Travelers Property Casualty Corp

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					Asbestos Defendant Profile                                                         Page NSI-1


                National Service Industries, Inc
National Service Industries, Inc.                    Employees:              7,100
 (NYSE: NSI)                                         Revenue:       $ 532,400,000
1420 Peachtree St., NE                               Net Income:    $ (32,072,000)
Atlanta, GA 30309-3002                               Assets:        $ 519,098,000
Phone: 404-853-1000                                  Liabilities:   $ 298,465,000
Fax: 404-853-1015                                    (As of August 31, 2002)
http://www.nationalservice.com

Description: NSI operates two segments, linen rental and envelope manufacturing. Its National
Linen Service unit rents linens and related products to the restaurant, lodging, and health care
industries, primarily in the southeastern US. Its other subsidiary, Atlantic Envelope, makes
custom envelopes and other office products. In late 2001 NSI spun off Lithonia Lighting Group
(residential, commercial, industrial, and institutional lighting fixtures) and NSI Chemicals Group
into a new company named Acuity Brands.

Asbestos Discussion from SEC filings:
From the Company’s Form 10-K for the period ending August 31, 2002 at
http://www.sec.gov/Archives/edgar/data/70538/000095014402012015/g76849e10vk.htm
Filed On: November 15, 2002

The Company is subject to various legal              Company        seek      both      substantial
claims arising in the normal course of               compensatory damages and punitive
business out of the conduct of its current           damages. The Company believes that many
and prior businesses, including product              of the claims against it are without merit.
liability claims. The Company accrues for            The Company believes its conduct with
legal claims when payments associated with           respect to asbestos-containing insulation
the claims become probable and can be                was consistent with recognized safety
reasonably estimated for financial statement         standards at the relevant times, and the
purposes. While management believes that             Company believes there is no basis for
its accruals are appropriate based on                imposing punitive damages against it in
information currently available, the actual          connection with asbestos claims. In addition,
costs of resolving legal claims may be               the Company believes that it has substantial
substantially different from the amounts             legal defenses against many of these claims,
accrued.                                             including that the Company did not
                                                     manufacture      any      asbestos-containing
Among the product liability claims to which          building products, that the Company did
the Company is subject are claims for                not distribute or install products at certain
personal injury or wrongful death arising            sites where exposure is alleged, and that
from the installation and distribution of            statutes of repose in some states bar the
asbestos-containing insulation, primarily in         claims. However, there is no assurance that
the southeastern United States, by a                 the Company will be successful in asserting
previously divested business of the                  defenses to these claims.
Company. Most claims against the


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Asbestos Defendant Profile                                                     Page NSI-2
Prior to February 1, 2001, the Center for        experience in administration of its defense
Claims Resolution (the “CCR”) handled the        strategy and recent settlement activity, the
processing and settlement of claims on           Company reviewed its asbestos claims
behalf of the Company and retained local         liabilities and adjusted the balances in these
counsel for the defense of claims. Pursuant      accounts from its prior three year outlook to
to a written agreement among CCR                 its estimate of the total probable liabilities
members, the Company was responsible for         from pending and expected future asbestos
varying percentages of defense and liability     claims over an approximate fifty year
payments on a claim-by-claim basis for each      period, which takes into consideration the
claim in which it was named in accordance        life expectancy of individuals potentially
with predetermined sharing formulae.             exposed. The Company believes that a
Substantially all of the Company’s portion       reasonable estimate of its expected future
of those payments was paid directly by the       claims for approximately fifty years could
Company’s insurers. Since February 1, 2001,      require an increase in its liabilities ranging
the Company has retained trial counsel           from       approximately     $94 million    to
directly, rather than through the CCR, to        $139 million. Management does not believe
defend asbestos-related claims against the       that any amount in the range is more
Company and has engaged another outside          accurate than any other. Therefore, as of
consultant to provide claims processing and      August 31, 2002, the Company increased its
administration services for asbestos-related     liabilities for asbestos-related costs by
claims. The Company is more vigorously           $94 million, the low end of the range and
defending asbestos-related claims and will       recorded an additional insurance recovery
seek to dismiss without any settlement           of $77 million.
payment claims arising in jurisdictions or
involving worksites where the Company            The Company’s estimates of indemnity
did not distribute or install asbestos-          payments and defense costs associated with
containing products.                             pending and future asbestos claims are
                                                 based on the Company’s estimate of the
At August 31, 2001, the accrual for asbestos-    number of future asbestos-related claims
related liabilities, before consideration of     and the type of disease, if any, alleged or
insurance recoveries, was based on the           expected to be alleged in such claims,
following: the Company’s estimate of             assumptions regarding the timing and
indemnity payments and defense costs             amounts of settlement payments, the status
associated with pending and future               of ongoing litigation and settlement
asbestos-related claims; settlements agreed      initiatives, and the advice of outside counsel
to but not paid; the Company’s expected          with respect to the current state of the law
payment on account of settlement                 related to asbestos claims. The ultimate
obligations of defaulting CCR members;           liability for all pending and future claims
interest on settlement payments that are         cannot be determined with certainty due to
subject to ongoing dispute resolution with       the difficulty of forecasting the numerous
certain insurance providers; and other legal     variables that can affect the amount of
fees and expenses. During 2002, as part of its   liability. There are inherent uncertainties
ongoing estimating process, consultation         involved in estimating these amounts, and
with outside experts, the nature of pending      the Company’s actual costs in future periods
claims, the jurisdictions in which claims        could differ materially from the
have been filed, and in light of its gained



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Asbestos Defendant Profile                                                     Page NSI-3
Company’s estimates due to changes in facts      issues, and, with respect to one of the
and circumstances after the date of each         insurers, to secure payment of past due
estimate. For additional information, see        amounts and to ensure that the insurer’s
Note 6, Commitments and Contingences, in         future obligations will be met in a timely
the Notes to the Consolidated Financial          fashion. Approximately $8.5 million of
Statements included in this filing.              insurance recovery is under alternative
                                                 dispute      resolution     proceedings      at
Insurance Receivable                             August 31, 2002. The Company believes its
The Company believes that it has insurance       recorded receivables, which includes both
coverage available to recover most of its        billed amounts and estimates of future
asbestos-related costs. With the exception of    recoveries, from insurance carriers are
the Company’s payments on account of             collectible. The Company reached this
settlement obligations of defaulting CCR         conclusion after considering various factors
members, the Company has reached                 including     its   prior    insurance-related
settlement agreements with substantially all     recoveries in respect of asbestos-related
of its relevant insurers providing for           claims,     existing    insurance     policies,
payment of substantially all asbestos-related    settlement agreements with insurers, the
claims (subject to retentions) up to the         apparent viability of its insurers, the advice
various policy limits, as discussed in Note 6,   of outside counsel with respect to the
Commitments and Contingences, in the             applicable insurance coverage law relating
Notes to the Consolidated Financial              to terms and conditions of those policies,
Statements included in this filing. The          and a general assessment by the Company
timing and amount of future recoveries           and its advisors of the financial condition of
from insurance carriers will depend on the       the relevant insurers. Although the
pace of claims review and processing by          Company believes these assumptions are
such carriers and on the resolution of any       reasonable, other assumptions could have
remaining disputes regarding coverage            been used that would result in substantially
under such policies. In the event the            lower recoveries. If expected insurance
Company’s insurers dispute amounts billed        recoveries become unavailable, due to
to them or pay on an untimely basis, the         insolvencies among the Company’s primary
Company takes all practicable steps to           or excess insurance carriers, disputes with
secure payment, including alternative            carriers or otherwise, the Company’s results
dispute resolution procedures and litigation     of operations, liquidity and financial
to resolve the issues. The Company has           condition could be materially adversely
initiated alternative dispute resolution         affected.
proceedings with two insurers to resolve
outstanding insurance policy interpretation


Asbestos Discussion from SEC filings:
From the Company’s Form 10-Q for the quarter ended February 28, 2003
http://www.sec.gov/Archives/edgar/data/70538/000095014403004761/g81926e10vq.htm
Filed On: April 10, 2003

The Company is subject to various legal          and prior businesses, including product
claims arising in the normal course of           liability claims. The Company
business out of the conduct of its current

LitigationDataSource.com                                        Updated June 14, 2003
Asbestos Defendant Profile                                                    Page NSI-4
accrues for legal claims when payments           Company and retained local counsel for the
associated with the claims become probable       defense of claims. Pursuant to a written
and can be reasonably estimated for              agreement among CCR members, the
financial    statement     purposes.     While   Company was responsible for varying
management believes that its accruals are        percentages of defense and liability
appropriate based on information currently       payments on a claim-by-claim basis for each
available, the actual costs of resolving         claim in which it was named in accordance
legal claims may be substantially different      with predetermined sharing formulae.
from the amounts accrued.                        Substantially all of the Company’s portion
                                                 of those payments was paid directly by the
Among the product liability claims to which      Company’s insurers. Since February 1, 2001,
the Company is subject are claims for            the Company has retained trial counsel
personal injury or wrongful death arising        directly, rather than through the CCR, to
from the installation and distribution of        defend asbestos-related claims against the
asbestos-containing insulation, primarily in     Company and has engaged another outside
the southeastern United States, by a             consultant to provide claims processing and
previously divested business of the              administration services for asbestos-related
Company. Most claims against the                 claims. The Company is more vigorously
Company        seek      both      substantial   defending asbestos-related claims and will
compensatory damages and punitive                seek to dismiss without any settlement
damages. The Company believes that many          payment claims arising in jurisdictions or
of the claims against it are without merit.      involving worksites where the Company
The Company believes its conduct with            did not distribute or install asbestos-
respect to asbestos-containing insulation        containing products.
was consistent with recognized safety
standards at the relevant times, and the         At August 31, 2001, the accrual for asbestos-
Company believes there is no basis for           related liabilities, before consideration of
imposing punitive damages against it in          insurance recoveries, was based on the
connection with asbestos claims. In addition,    following: the Company’s estimate of
the Company believes that it has substantial     indemnity payments and defense costs
legal defenses against many of these claims,     associated with pending and future
including that the Company did not               asbestos-related claims; settlements agreed
manufacture      any      asbestos-containing    to but not paid; the Company’s expected
building products, that the Company did          payment on account of settlement
not distribute or install products at certain    obligations of defaulting CCR members;
sites where exposure is alleged, and that        interest on settlement payments that are
statutes of repose in some states bar the        subject to ongoing dispute resolution with
claims. However, there is no assurance that      certain insurance providers; and
the Company will be successful in asserting
defenses to these claims.                        other legal fees and expenses. During 2002,
                                                 as part of its ongoing estimating process,
Prior to February 1, 2001, the Center for        consultation with outside experts, the nature
Claims    Resolution   (the “CCR”), a            of pending claims, the jurisdictions in which
membership organization for asbestos             claims have been filed, and in light of its
defendants, handled the processing and           gained experience in administration of its
settlement of claims on behalf of the            defense strategy and recent



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Asbestos Defendant Profile                                                       Page NSI-5
settlement activity, the Company reviewed         Additionally, the Company believes it has
its asbestos claims liabilities and adjusted      adequate insurance coverage available to
the balances in these accounts from its prior     cover this increase in liabilities and therefore
three year outlook to its estimate of the total   recorded an additional insurance recovery
probable liabilities from pending and             amount of $138 million.
expected future asbestos claims over an
approximate fifty year period, which takes        The Company’s estimates of indemnity
into consideration the life expectancy of         payments and defense costs associated with
individuals potentially exposed. As a result      pending and future asbestos claims are
of such review, the Company increased its         based on the Company’s estimate of the
liabilities for asbestos-related costs by         number of future asbestos-related claims
$94 million and recorded an additional            and the type of disease, if any, alleged or
insurance recovery of $77 million.                expected to be alleged in such claims,
                                                  assumptions regarding the timing and
During the quarter ended February 28, 2003,       amounts of settlement payments, the status
the Company engaged external consulting           of ongoing litigation and settlement
economists to review the expected asbestos        initiatives, and the advice of outside counsel
claims liabilities. Based on information          with respect to the current state of the law
supplied by this study and management’s           related to asbestos claims. The ultimate
knowledge of and experience with its              liability for all pending and future claims
asbestos liabilities and insurance recoveries,    cannot be determined with certainty due to
the Company concluded that an additional          the difficulty of forecasting the numerous
increase in its liabilities was necessary. This   variables that can affect the amount of
increase is attributed to higher average          liability. There are inherent uncertainties
resolution indemnity costs per claim than         involved in estimating these amounts, and
previously estimated. The increase in the         the Company’s actual costs in future periods
liabilities resulting from this review process    could differ materially from the Company’s
was a range of $138 million to $209 million.      estimates due to changes in facts and
Management does not believe that any              circumstances after the date of each
amount in the range is more accurate than         estimate. For additional information, see
any other. Therefore, as of February 28,          Note 9, Legal Proceedings, in the Notes to
2003, the Company increased its liabilities       the Consolidated Financial Statements
for asbestos-related costs by approximately       included in this filing.
$138 million, the low end of the range.

Asbestos Discussion from SEC filings:
From the Company’s Form 10-Q for the quarter ended November 30, 2002
http://www.sec.gov/Archives/edgar/data/70538/000095014403000386/g80169e10vq.htm
Filed on: January 14, 2003

The Company is subject to various legal           management that the ultimate resolution of
claims arising in the normal course of            pending and threatened legal proceedings
business out of the conduct of its current        will not have a material adverse effect on
and prior businesses, including product           the Company’s financial condition or results
liability claims. Based on information            of operations beyond its current estimates.
currently available, it is the opinion of         However, in



LitigationDataSource.com                                          Updated June 14, 2003
Asbestos Defendant Profile                                                   Page NSI-6
the    event    of     unexpected       future   the Company will be successful in asserting
developments, it is possible that the ultimate   defenses to these claims.
resolution of such matters, if unfavorable,
could have a material adverse effect on the      Prior to February 1, 2001, the Center for
Company’s financial condition and results        Claims     Resolution    (the “CCR”), a
of operations in a particular future period.     membership organization for asbestos
The Company accrues for legal claims when        defendants, handled the processing and
payments associated with the claims become       settlement of claims on behalf of the
probable and can be reasonably estimated         Company and retained local counsel for the
for financial statement purposes. While          defense of claims. Pursuant to a written
management believes that its accruals are        agreement among CCR members, the
appropriate based on information currently       Company was responsible for varying
available, the actual costs of resolving         percentages of defense and liability
pending and future legal claims against the      payments on a claim-by-claim basis for each
Company may differ substantially from the        claim in which it was named in accordance
amounts accrued.                                 with predetermined sharing formulae.
                                                 Substantially all of the Company’s portion
Among the product liability claims to which      of those payments was paid directly by the
the Company is subject are claims for            Company’s insurers. Since February 1, 2001,
personal injury or wrongful death arising        the Company has retained trial counsel
from the installation and distribution of        directly, rather than through the CCR, to
asbestos-containing insulation, primarily in     defend asbestos-related claims against the
the southeastern United States, by a             Company and has engaged another outside
previously divested business of the              consultant to provide claims processing and
Company. Most claims against the                 administration services for asbestos-related
Company        seek      both      substantial   claims. The Company is more vigorously
compensatory damages and punitive                defending asbestos-related claims and will
damages. The Company believes that many          seek to dismiss without any settlement
of the claims against it are without merit.      payment claims arising in jurisdictions or
The Company believes its conduct with            involving worksites where the Company
respect to asbestos-containing insulation        did not distribute or install asbestos-
was consistent with recognized safety            containing products.
standards at the relevant times, and the
Company believes there is no basis for           During the past two years, certain former
imposing punitive damages against it in          members of the CCR have failed to make
connection with asbestos claims. In addition,    payments to the CCR, by reason of
the Company believes that it has substantial     bankruptcy or otherwise, for their shares of
legal defenses against many of these claims,     certain settlement agreements the CCR had
including that the Company did not               reached on behalf of its members with
manufacture      any      asbestos-containing    plaintiffs. Consequently, with respect to
building products, that the Company did          some settlement agreements, the CCR has
not distribute or install products at certain    been unable to make the full payments
sites where exposure is alleged, and that        contemplated by those agreements. In some
statutes of repose in some states bar the        circumstances, the Company and other
claims. However, there is no assurance that      members and former




LitigationDataSource.com                                       Updated June 14, 2003
Asbestos Defendant Profile                                                    Page NSI-7
members of the CCR have contributed             no insurance or other recovery with respect
additional funds to the CCR to permit it to     to these amounts has been recorded as an
make certain payments contemplated by the       asset in the Company’s financial statements.
settlement    agreements,    though      the
Company does not believe it is liable for       The amount of the Company’s liability on
such additional funds. As of November 30,       account of payments contemplated by
2002, the Company has contributed               settlement agreements entered into by the
approximately $5.8 million to the CCR for       CCR is uncertain. The Company has
this purpose, and it may make further such      included in its accruals its estimate of the
payments in the future. Some plaintiffs who     Company’s potential liability in this respect,
are parties to settlement agreements with       but the Company’s ultimate liability for
the CCR that                                    these matters could be greater than
                                                estimated if more CCR members or former
contemplate payments that the CCR has           members fail to meet their obligations or if
been unable to make have commenced              the courts determine that the Company
litigation against the CCR, the Company,        could be liable for settlement payments that
and other members and former members to         were attributable to other CCR members.
recover amounts due under these settlement
agreements. The Company believes that it        Several significant companies that are
should not be liable for settlement payments    traditional co-defendants in asbestos claims,
attributable to other members or former         both former members of the CCR and non-
members of the CCR, and the Company has         members, have sought protection under
joined a joint defense group with other CCR     Chapter 11 of the federal bankruptcy code
members to defend these claims.                 during the past three years. Litigation
                                                against such co-defendants generally is
The Company believes that any amount it         stayed or restricted as a result of their
pays, including the $5.8 million it has         bankruptcy filings. The absence of these
already contributed to the CCR, on account      traditional defendants may increase the
of payments contemplated by settlement          number of claims filed against other
agreements entered into by the CCR on           defendants, including the Company, and
behalf of its members, should be covered        may increase the cost of resolving such
either by the Company’s insurance or by         claims. Due to the uncertainties surrounding
surety bonds and collateral provided by         the ultimate effect of these bankruptcies on
those former members who failed to meet         remaining asbestos defendants, the effect on
their obligations. There can be no assurance,   the amount of the Company’s liabilities
however, that the Company can actually          cannot be determined.
recover any of these amounts. Accordingly,

Asbestos Discussion from SEC filings:
From the Company’s Form 10-Q for the quarter ended May 31, 2002
http://www.sec.gov/Archives/edgar/data/70538/000095014402007391/g77215e10vq.htm
Filed On: July 15, 2002

The Company is subject to various legal         liability claims. Based on information
claims arising in the normal course of          currently available, it is the opinion of
business out of the conduct of its current      management that the ultimate resolution of
and prior businesses, including product


LitigationDataSource.com                                       Updated June 14, 2003
Asbestos Defendant Profile                                                   Page NSI-9
pending and threatened legal proceedings        not distribute or install products at certain
will not have a material adverse effect on      sites where exposure is alleged, and that
the                                             statutes of repose in some states bar the
                                                claims. However, there is no assurance that
Company’s financial condition or results of     the Company will be successful in asserting
operations. However, in the event of            defenses to these claims.
unexpected future developments, it is
possible that the ultimate resolution of such   Prior to February 1, 2001, the Center for
matters, if unfavorable, could have a           Claims Resolution (the “CCR”) handled the
material adverse effect on the Company’s        processing and settlement of claims on
results of operations in a particular future    behalf of the Company and retained local
period. The Company reserves for legal          counsel for the defense of claims. Pursuant
claims when payments associated with the        to a written agreement among CCR
claims become probable and the costs can be     members, the Company was responsible for
reasonably estimated for financial statement    varying percentages of defense and liability
purposes. While management believes that        payments on a claim-by-claim basis for each
its reserves are appropriate based on           claim in which it was named in accordance
information currently available, the actual     with predetermined sharing formulae.
costs of resolving pending and future legal     Substantially all of the Company’s portion
claims against the Company may differ           of those payments were paid directly by the
substantially from the amounts reserved.        Company’s insurers. Since February 1, 2001,
                                                the Company has retained trial counsel
Among the product liability claims to which     directly, rather than through the CCR, to
the Company is subject are claims for           defend asbestos-related claims against the
personal injury or wrongful death arising       Company and has engaged another outside
from the installation and distribution of       consultant to provide claims processing and
asbestos-containing insulation, primarily in    administration services for asbestos-related
the southeastern United States, by a            claims. The Company intends to be more
divested business of the Company. Most          vigorous in defending asbestos-related
claims against the Company seek both            claims and will seek to dismiss without any
substantial compensatory damages and            settlement payment claims arising in
punitive damages. The Company believes          jurisdictions or involving worksites where
that many of the claims against it are          the Company did not distribute or install
without merit. The Company believes its         asbestos-containing products. During the
conduct with respect to asbestos-containing     past two years, certain former members of
insulation was consistent with recognized       the CCR have failed to make payments to
safety standards at the relevant times, and     the CCR, by reason of bankruptcy or
the Company believes there is no basis for      otherwise, for their shares of certain
imposing punitive damages against it in         settlement agreements the CCR had reached
connection with asbestos claims. In addition,   on behalf of its members with plaintiffs.
the Company believes that it has substantial    Consequently, with respect to some
legal defenses against many of these claims,    settlement agreements, the CCR has been
including that the Company did not              unable to make the full payments
manufacture      any    asbestos-containing     contemplated
building products, that the Company did




LitigationDataSource.com                                       Updated June 14, 2003
Asbestos Defendant Profile                                                  Page NSI-10
by     those     agreements.     In   some      settlement agreements entered into by the
circumstances, the Company and other            CCR is uncertain. The Company has
members and former members of the CCR           included in its reserves its estimate of the
have contributed additional funds to the        Company’s potential liability in this respect,
CCR to permit it to make certain payments       but the Company’s ultimate liability for
contemplated by the settlement agreements.      these matters could be greater than
As of May 31, 2002, the Company has             estimated if more CCR members or former
contributed approximately $5.3 million to       members fail to meet their obligations or if
the CCR for this purpose, and it may make       the courts determine that the Company
further such payments in the future.            could be liable for settlement payments that
Payments made since August 31, 2001 have        were attributable to other CCR members.
been applied against the Company’s accrual
for asbestos liabilities established as of      Several significant companies that are
August 31, 2001. Some plaintiffs who are        traditional co-defendants in asbestos claims,
parties to settlement agreements with the       both former members of the CCR and non-
CCR that contemplate payments that the          members, have sought protection under
CCR has been unable to make have                Chapter 11 of the federal bankruptcy code
commenced litigation against the CCR, the       during the past two years. Litigation against
Company, and other members and former           such co-defendants generally is stayed or
members to recover amounts due under            restricted as a result of their bankruptcy
these settlement agreements. The Company        filings. The absence of these traditional
believes that it should not be liable for       defendants may increase the number of
settlement payments attributable to other       claims filed against other defendants,
members or former members of the CCR,           including the Company, and may increase
and the Company has joined a joint defense      the cost of resolving such claims. Due to the
group with other CCR members to defend          uncertainties surrounding the ultimate effect
these claims.                                   of these bankruptcies on remaining asbestos
                                                defendants, the effect on the amount of the
The Company believes that any amount it         Company’s liabilities cannot be determined.
pays, including the $5.3 million it has
already contributed to the CCR, on account      During the fiscal year ended August 31,
of payments contemplated by settlement          2001, the Company was served with
agreements entered into by the CCR on           approximately      30,000   asbestos-related
behalf of its members, should be covered        claims and settled approximately 16,000
either by the Company’s insurance or by         claims for an average of approximately
surety bonds and collateral provided by         $1,035 per claim (including approximately
those former members who failed to meet         200 claims that were dismissed with no
their obligations. There can be no assurance,   payment). As of August 31, 2001, there were
however, that the Company can actually          approximately 35,000 open claims pending
recover any of these amounts. Accordingly,      against     the     Company       (including
no insurance or other recovery with respect     approximately 1,000 claims that were settled
to these amounts has been recorded as an        in principle after February 1, 2001 but not
asset in the Company’s financial statements.    finalized)   and     approximately     12,000
                                                additional claims that were settled in
The amount of the Company’s liability on        principle prior to February 1, 2001 but not
account of payments contemplated by             finalized.



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Asbestos Defendant Profile                                                    Page NSI-11
Asbestos Discussion from SEC filings:
From the Company’s Form 10-Q for the quarter ended February 28, 2002
http://www.sec.gov/Archives/edgar/data/70538/000095014402003857/g75500e10-q.txt
Filed On: April 15, 2002

Among the product liability claims to which       settlement obligations of defaulting CCR
the Company is subject are claims for             members; interest on settlement payments
personal injury or wrongful death arising         that are subject to ongoing dispute
from the installation and distribution of         resolution with certain insurance providers;
asbestos-containing insulation, primarily in      and other legal fees and expenses. The
the southeastern United States, by a              Company's        estimates    of    indemnity
previously divested business of the               payments and defense costs associated with
Company. Most claims against the                  pending and future asbestos claims are
Company        seek       both      substantial   based on the Company's estimate of the
compensatory damages and punitive                 number of future asbestos-related claims
damages. The Company believes that many           and the type of disease, if any, alleged or
of the claims against it are without merit.       expected to be alleged in such claims,
The Company believes its conduct with             assumptions regarding the timing and
respect to asbestos-containing insulation         amounts of settlement payments, the status
was consistent with recognized safety             of ongoing litigation and settlement
standards at the relevant times, and the          initiatives, and the advice of outside counsel
Company believes there is no basis for            with respect to the current state of the law
imposing punitive damages against it in           related to asbestos claims. The ultimate
connection with asbestos claims. In addition,     liability for all pending and future claims
the Company believes that it has substantial      cannot be determined with certainty due to
legal defenses against many of these claims,      the difficulty of forecasting the numerous
including that the Company did not                variables that can affect the amount of
manufacture      any       asbestos-containing    liability. There are inherent uncertainties
building products, that the Company did           involved in estimating these amounts, and
not distribute or install products at certain     the Company's actual costs in future periods
sites where exposure is alleged, and that         could exceed the Company's estimates due
statutes of repose in some states bar the         to changes in facts and circumstances after
claims. However, there is no assurance that       the date of each estimate. For additional
the Company will be successful in asserting       information, see Note 8 to the financial
defenses to these claims.The accrual for          statements included in this filing.
asbestos-related       liabilities,     before
consideration of insurance recoveries is          Insurance Receivable
based on the following: the Company's
estimate of indemnity payments and                Among the product liability claims to which
defense costs associated with pending and         the Company is subject are claims for
future asbestos-related claims to be paid         personal injury or wrongful death arising
through mid-2005; settlements agreed to but       from the installation and distribution of
not paid as of February 28, 2002; the             asbestos-containing
Company's expected payment on account of




LitigationDataSource.com                                         Updated June 14, 2003
Asbestos Defendant Profile                                                  Page NSI-12
insulation, primarily in the southeastern       policies, and a general assessment by the
United States, by a previously divested         Company and its advisors of the financial
business of the Company. The Company            condition of the relevant insurers. If
believes that it has insurance coverage         expected insurance recoveries become
available to recover most of its asbestos-      unavailable, due to insolvencies among the
related costs. The Company has reached          Company's primary or excess insurance
settlement agreements with substantially all    carriers, disputes with carriers or otherwise,
of    its relevant insurers providing for       the Company's results of operations,
payment of substantially all asbestos-related   liquidity and financial condition could be
claims (subject to retentions) up to the        materially adversely affected.
various policy limits, except for the
Company's payments on account of                Environmental Matters
settlement obligations of defaulting CCR        The Company's operations, as well as
members, as discussed in Note 8 to the          similar operations of other companies, are
financial statements                            subject to comprehensive laws and
                                                regulations relating to the generation,
included in this filing. The timing and         storage, handling, transportation, and
amount of future recoveries from insurance      disposal of hazardous substances and solid
carriers will depend on the pace of claims      and hazardous wastes and to the
review and processing by such carriers and      remediation of contaminated sites. Permits
on the resolution of any remaining disputes     and environmental controls are required for
regarding coverage under such policies. In      certain of the Company's operations to limit
the event the Company's insurers dispute        air and water pollution, and these permits
amounts billed to them or pay on an             are subject to modification, renewal, and
untimely basis, the Company takes all           revocation by issuing authorities. The
practicable steps to secure payment,            Company believes that it is in substantial
including alternative dispute resolution        compliance with all material environmental
procedures and litigation to resolve the        laws, regulations, and permits. On an
issues. The Company has initiated an            ongoing basis, the Company incurs capital
alternative dispute resolution proceeding       and      operating   costs    relating    to
with one insurer to resolve outstanding         environmental compliance. Environmental
insurance policy interpretation issues, to      laws and regulations have generally become
secure payment of past due amounts and to       stricter in recent years, and the cost of
ensure that the insurer's future obligations    responding to future changes may be
will be met in a timely fashion. The            substantial.
Company       believes     that   substantial
recoveries from the insurance carriers are      The Company reserves for known
probable. The Company reached this              environmental claims when payments
conclusion after considering its prior          associated with the claims become probable
insurance-related recoveries in respect of      and the costs can be reasonably estimated.
asbestos-related claims, existing insurance     The actual cost of environmental issues may
policies, settlement agreements with            be higher than that reserved due to
insurers, the apparent viability of its         difficulty in estimating such costs and
insurers, the advice of outside counsel with    potential changes in the status of
respect to the applicable insurance coverage    government regulations.
law relating to terms and conditions of those



LitigationDataSource.com                                       Updated June 14, 2003
Asbestos Defendant Profile                                                      Page NSI-13
Self-Insurance                                     $3.7 million, or $0.36 per diluted share,
                                                   compared to the prior year's income from
It is the Company's policy to self insure for      continuing operations of $4.4 million, or
certain insurable risks consisting primarily       $0.43 per diluted share. The decline in
of physical loss to property; business             income      from     continuing     operations
interruptions resulting from such loss; and        primarily resulted from lower revenues,
workers' compensation, employee medical,           restructuring charges and higher overall
comprehensive general, and auto liability.         labor and benefits. Textile rental segment
Insurance coverage is obtained for                 second quarter revenues of $77.3 million
catastrophic     property   and      casualty      decreased 2.9 percent compared to last
exposures as well as those risks required to       year's $79.6 million. On a year-to-date basis,
be insured by law or contract. Based on an         revenues decreased $4.5 million, or 2.8
independent actuary's estimate of the              percent compared to the same prior year
aggregate liability for claims incurred, a         period. Operating profit for the second
provision for claims under the self-insured        quarter was $1.3 million compared to last
program is recorded and revised annually.          year's operating profit of $4.0 million.
The actuarial estimates are subject to             Operating profit for the second quarter
uncertainty from various sources, including        included $304 thousand of gains related to
changes in claim reporting patterns, claim         previously divested businesses and a $381
settlement patterns, judicial decisions,           thousand reduction of expense associated
legislation, and economic                          with ongoing restructuring plans. Last
conditions.                                        year's operating profit included $2.4 million
                                                   of gains on sales of businesses. On a year-to-
RESULTS OF OPERATIONS                              date basis, the textile rental segment had an
                                                   operating loss of $4.0 million for the first six
NSI generated revenue of $132.0 million and        months of fiscal 2002 versus operating profit
$266.4 million for the three and six months        of $7.7 million for the first six months of
ended February 28, 2002, respectively,             fiscal 2001. Year-to-date operating profit
compared to revenue of $135.1 million and          includes restructuring expense and other
$275.8 million, respectively, in the previous      charges of $5.4 million relating to the closure
year. The decrease was related to the overall      of two facilities and $304 thousand of gains
softer economy and lost revenues from the          related to previously divested businesses,
closure of two envelope manufacturing              whereas the operating profit for the same
facilities in the fourth quarter of fiscal 2001.   prior year period included $2.4 million of
                                                   gains on sales of businesses. Excluding these
Losses from continuing operations totaled          items, the decline in operating profit is
$41 thousand, or $0.00 per diluted share, for      largely due to the impact of business travel
the three months ended February 28, 2002,          and entertainment, increases in labor and
compared to income from continuing                 benefit costs, and costs associated with
operations of $2.1 million, or $0.20 per           overhead reduction programs within the
diluted share, for the three months ended          business.
February 28, 2001. On a year-to-date basis,
net losses from continuing operations for the      The restructuring charge included a
first six months of the current fiscal year        reduction of severance costs of $148
were                                               thousand, and $1.6 million in exit expenses
                                                   to close and consolidate facilities. Exit
                                                   expenses primarily include costs of


LitigationDataSource.com                                           Updated June 14, 2003
Asbestos Defendant Profile                                                      Page NSI-14
lease terminations and costs to dispose of          thousand of costs associated with the
closed facilities. Reserve reductions of $413       reorganization of the Miami, Florida facility.
thousand were also recorded during the              Excluding the current year gain of $75
second quarter of fiscal 2002 primarily due         thousand, the prior year reorganization
to lower than originally estimated costs to         costs and approximately $485 thousand of
prepare a facility closed in a prior year for       prior year goodwill amortization, which
sale.                                               ceased upon the adoption of SFAS No. 142,
                                                    profits decreased approximately $1.2 million
Additionally, as a further result of the            as a result of the lower overall revenue and
closure of the two textile rental facilities, the   increased benefits costs.
Company recognized long-lived asset
impairments totaling $4.4 million. Textile          Corporate expenses were $1.9 million for the
rental assets to be disposed of were reduced        first quarter compared to last year's $1.1
to state them at their estimated fair value         million. For the six months ended February
less costs to sell. Assets to be disposed of        28, 2002, corporate expenses increased from
primarily related to equipment located in           $2.4 million to $4.6 million. The planned
the facilities included in the restructuring        increase is representative of on-going, stand-
program noted above. After the charge, the          alone corporate costs.
remaining net book value of these assets
was immaterial. Estimated fair market               Net interest expense of $168 thousand and
values were established based on an                 $279 thousand for the three and six months
analysis of expected future cash flows.             ended February 28, 2002, respectively,
                                                    decreased from $439 thousand and $889
The envelope segment second quarter                 thousand for the same prior year periods,
revenues of $54.7 million decreased 1.5             respectively, due to lower overall rates and
percent from last year's results of $55.5           lower     interest    bearing     obligations.
million. Operating profit was $649                  Additionally, the provision for income taxes
thousand, a decrease of $214 thousand from          increased to 40 percent of income from
last year's $863 thousand profit. During the        continuing operations compared to 37
quarter, the envelope segment sold its Lyon         percent in the prior year as a result of the
Folder unit, recognizing a gain of                  loss of certain state tax benefits associated
approximately $75 thousand. Excluding the           with the spin-off.
current year gain, and approximately $245
thousand of goodwill amortization that has          LIQUIDITY AND CAPITAL RESOURCES
been discontinued with the adoption of
SFAS 142, profits decreased approximately           Operating Activities
$534 thousand. The decline in operating
profits is the result of the decrease in            Continuing operations used cash of $107
revenue, primarily from lower courier               thousand during the six months ended
volumes. On a year-to-date basis, the               February 28, 2002 compared with cash
envelope segment revenues of $110.3                 provided of $19.9 million during the
million decreased 4.2 percent from last             respective period of the prior year. Fiscal
year's results of $115.1 million, and               2002 operating cash flow was lower because
operating profit of $2.8 million increased          of a decrease in net income and an increase
$228 thousand from last year's results of $2.6      in
million. Last year's results included $880



LitigationDataSource.com                                           Updated June 14, 2003
Asbestos Defendant Profile                                                  Page NSI-15
cash used for both current and long-term          primarily from lower days in accounts
liabilities, which was partially offset by an     payable due to utilization of recently
increase in cash provided by inventory and        negotiated vendor payment terms and
linens in service. The increase in cash used      payments related to asbestos settlements.
for current and long-term liabilities resulted

Asbestos-Related News:
NSI Announces Settlement of Texas Asbestos Litigation (Published November 22, 2002)




LitigationDataSource.com                                        Updated June 14, 2003

				
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