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filename1.htm

    responsefy09form10k.htm

    July 17,
2009

    United
States Securities and Exchange Commission

    100 F
Street, NE

    Washington,
D.C.   20549-6010

    Attn:  Mr.
Larry Spirgel, Assistant Director

    RE:         AZZ
incorporated

    File No. 001-2777

    Form 10-K for the Year Ended February
28, 2009

    AZZ
incorporated (the “Company” or “AZZ”) provides the following response to the
comment letter dated July 2, 2009, of the Staff of the Securities and Exchange
Commission concerning the Company’s Form 10-K for the year ended February 28,
2009 (the “Form 10-K”).

    AZZ has
the following responses to the comment letter received from the
Staff.

    Form 10-K for the fiscal
year ended February 28, 2009

    Cover
Page

              1.

              Under
      the “Documents Incorporated by Reference” heading, you state that your
      Annual Report to Shareholders for the Fiscal Year Ended 2009 (Annual
      Report) is incorporated into “Parts [I, II, and IV].” However, we are
      unable to locate the specific portions that are incorporated by reference.
      Also, we note that you have not filed your Annual Report as exhibit 13 to
      your Form 10-K as required by Note 2 to General Instruction G to Form
      l0-K. In your response letter, please
explain.

    RESPONSE:
The Annual Report was inadvertently included under the heading “Documents
Incorporated by Reference” on the cover page.  AZZ has duly noted the
Staff’s comments and, in the Form 10-K/A for the fiscal year ended February 28,
2009, that AZZ will file in response to the Staff’s comments (the “Form
10-K/A”), AZZ will remove the reference to the Annual Report from the Cover
Page.  Accordingly, AZZ’s annual report will not be required to be
filed as exhibit 13 to the Form 10-K/A in accordance with Note 2 to General
Instruction G to Form 10-K.

    Item 1.  Business,
page 1

              2.

              Please
      revise to disclose the information about international revenues that is
      required by Regulation S-K Item
101(d).

    RESPONSE:
AZZ defines international revenues based on the final destination of the
products AZZ has produced. AZZ will include this disclosure under Item 1.
Business as defined by Regulation S-K Item 101(d) in future filings for AZZ’s
Electrical and Industrial Products Segment. AZZ’s Galvanizing Service Segment
does not have any international revenues. International revenues for AZZ’s Electrical
and Industrial Products Segment were $34.3 million, $38.2 million and $50
million for fiscal 2007, 2008, and 2009, respectively.

    Information Incorporated
Into Part III by Reference to Proxy Statement

    Executive Compensation, page
13 of the Proxy Statement

    Compensation Discussion and
Analysis, page 13 of the Proxy Statement

              3.

              Throughout
      your Compensation Discussion and Analysis and as to each compensation
      element, revise to disclose how you arrived
      at and why you paid
      each of the particular levels and forms of compensation for each named
      executive officer. For example, we note that all of your named executive
      officers received non-equity incentive plan compensation and stock
      appreciation rights in 2009. However, you do not disclose the reasons why
      the committee chose to award the actual amounts reported in the Summary
      Compensation Table. We believe it is appropriate to provide a more
      thorough analysis of how and why the committee arrived at the decision to
      award SARs and non-equity incentive plan compensation in these amounts.
      For further information, please see Staff Observations in the Review of
      Executive Compensation Disclosure, which is available on our website at
      www.sec.gov/divisions/corpfin/cfguidance.shtml#ecd.

    RESPONSE:  AZZ
has duly noted the Staff’s comments and in the Form 10-K/A will include the
disclosure set forth in Exhibit A attached
hereto.  See the following paragraphs of Exhibit
A:  the second full paragraph on page 2, the second, third,
fourth and fifth full paragraphs on page 3, the first, second and third full
paragraphs on page 4, the first and second full paragraphs on page 5 and the
first full paragraph on page 6.  An additional copy of Exhibit A, marked to
show changes, has been included to assist the Staff in reviewing AZZ’s proposed
changes.

              4.

              We
      note that the Compensation Committee compares each element of total
      compensation against a group of publicly-traded manufacturing companies.
      We also note that market data is used to determine equity award levels.
      Please revise your disclosure to provide additional detail about how
      market data was used to make compensation decisions in your most recent
      fiscal year. If you engage in benchmarking, please identify the component
      companies in your peer group and market data. Refer to Regulation S-K
      Compliance and Disclosure Interpretations, Question and Answer 118.05,
      available at www.sec.gov/divisions/corpfin/guidance/regs-kinterp.htm.

    RESPONSE:
AZZ has duly noted the Staff’s comments and in the Form 10-K/A will include the
disclosure set forth in Exhibit A attached
hereto.  See the following paragraphs of Exhibit
A:  the sixth full paragraph on page 1 and the first and second
full paragraphs on page 2.

    Annual Incentive
Compensation page 15 of the Proxy Statement

              5.

              We
      note your references to quantitative and qualitative goals in connection
      with determining your cash incentive awards. With respect to material
      qualitative goals, revise your disclosure to identify the nature of such
      goals and discuss how the
Compensation

              Committee
      assessed achievement of such goals. Also, revise to disclose the material
      quantitative goals and discuss how the Compensation Committee assessed
      achievement of such goals. If you believe that disclosure of quantitative
      goals is not required because it would result in competitive harm such
      that you may omit this information under Instruction 4 to Item 402(b) of
      Regulation S-K, please provide in your response letter a detailed
      explanation of such conclusion. In this regard, please note that we
      generally do not agree with the argument that disclosing a company-level
      performance target for the last fiscal year would cause a registrant
      competitive harm when disclosure of the performance target will occur
      after the fiscal year has ended and actual company results have been
      disclosed. If you believe you have a sufficient basis to keep the
      information confidential, disclose how difficult it would be for you or a
      business segment to achieve the undisclosed goal. General statements
      regarding the level of difficulty or ease associated with achieving the
      goals are not sufficient. Provide as much detail as necessary without
      providing information that would result in competitive harm. Refer to
      Regulation S-K Compliance and Disclosure Interpretations, Question and
      Answer 118.04, available at www.sec.gov/divisions/corpfin/guidance/regs-kinterp.htm.

    RESPONSE:
AZZ has duly noted the Staff’s comments and in the Form 10-K/A will include the
disclosure set forth in Exhibit A attached
hereto.  See the following paragraphs of Exhibit
A:  the third, fourth and fifth full paragraphs on page 3, all
of the paragraphs on page 4 and the second full paragraph on page
five.  Please note that certain of the quantitative goals are
confidential such that disclosure of such goals in the Form 10-K/A would result
in competitive harm to AZZ.  As set forth in Exhibit A, these
quantitative goals are established based on AZZ’s strategic plan, which
typically includes contemplated transactions (including proposed strategic
acquisitions of other companies by AZZ) that may not have been disclosed to the
public by the time that any particular fiscal year has ended.  Because
this strategic plan is highly confidential, AZZ does not publicly disclose
specific quantitative goals that are based on annual internal revenue, operating
income or return on asset objectives. Revealing specific quantitative goals
would provide competitors and other third parties with insights into AZZ’s
confidential planning process and strategies, thereby causing competitive
harm.

    Compensation Committee
Report, page 18 of the Proxy Statement

              6.

              Since
      you are incorporating this disclosure by reference into your Form 10-K,
      please revise to also state whether the Compensation Committee recommended
      to the Board that the Compensation Discussion and Analysis be included in
      the company’s annual report on Form 10-K. Refer to Item 407(e)(5)(i)(B) of
      Regulation S-K.

    RESPONSE:
AZZ has duly noted the Staff’s comments and in the Form 10-K/A will include the
following statement under the heading “COMPENSATION COMMITTEE
REPORT”:

    The
Compensation Committee of the Company has reviewed and discussed the
Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K
with management, and, based on such review and discussions, the Compensation
Committee recommended to the Board that the Compensation Discussion and Analysis
be included in the Company’s Annual Report on Form 10-K/A for the fiscal year
ended February 28, 2009.

    Grants of Plan Based Awards,
page 20 of the Proxy Statement

              7.

              In
      the first paragraph of the subsection titled “Performance-Based Incentive
      Compensation” on page 15, you disclose that, in January 2008, the
      Compensation Committee approved the group of employees eligible to
      participate in the Senior Management Bonus Plan and established target
      award opportunities based on achieving various levels of performance.
      Therefore, it appears that you should have reported the threshold, target
      and maximum potential awards pursuant to these non-equity incentive plan
      awards in your Grants of Plan-Based Awards Table, whereas the actual
      earned award is disclosed in your Summary Compensation Table. Please
      revise your disclosure in response to this comment or tell us why it is
      not applicable. For more information, please see Regulation S-K Compliance
      and Disclosure Interpretations, Question and Answer 120.02, available at
      www.sec.gov/divisions/corpfin/guidance/regs-kinterp.htm.

    RESPONSE:
AZZ has duly noted the Staff’s comments and in the Form 10-K/A will include the
disclosure set forth in Exhibit B attached
hereto.  An additional copy of Exhibit B, marked to
show changes, has been included to assist the Staff in reviewing AZZ’s proposed
changes.

    Item 7 Management Discussion
and Analysis of Financial Condition and Results of
Operations

    Critical Accounting Policies
and Estimates

    Impairment of Long-Lived
Assets, Identifiable Intangible Assets and Goodwill page 21

              8.

              We
      note that goodwill accounted for 19% of total assets as of February 28,
      2009. We note that revenues, operating income and segment income may have
      declined in recent quarters due to the negative impact of the current
      economic environment. As a result of your impairment test of your
      reporting units as of February 28, 2009, you determined that your goodwill
      balance was not impaired. In light of the significance of your goodwill
      balance, we expect robust and comprehensive disclosure in your critical
      accounting policies regarding your impairment testing policy. This
      disclosure should provide investors with sufficient information about
      management’s insights and assumptions with regard to the recoverability of
      goodwill. Specifically, we believe you should provide the following
      information:

              •

              Provide
      a more detailed description of the steps you perform to review goodwill
      for recoverability.

              •

              Disclose
      a breakdown of your goodwill balance as of December 31, 2008 by reporting
      unit.

              •

              Disclose
      any changes to your reporting units or allocations of goodwill by
      reporting unit and the reasons for such
changes.

              •

              Describe
      the nature of the valuation techniques and the significant estimates and
      assumptions you employed to determine the fair value of your reporting
      units in your impairment analysis. For example, if you utilize the
      discounted cash flow approach, you should disclose the discount rates for
      each reporting unit and how those discount rates were determined,
      including your consideration of any market risk premiums. In addition, we
      believe your disclosure should address your estimates of future cash
      flows, as follows:

              1)

              Provide
      a discussion of your historical cash flow growth rates and explain how
      your historical growth rates were considered when determining the growth
      rate to be utilized in your cash flow
  projections.

              2)

              Disclose
      the growth rate you need to achieve in your cash flow projections in order
      to avoid having a goodwill impairment
charge.

              3)

              In
      view of the current economic environment, discuss how you considered the
      uncertainties inherent in your estimated future growth rates, For example,
      you should explain if and when you anticipated a recovery of the economy
      in your growth rates used in your cash flows
  analysis.

              •

              Describe
      changes to the assumptions and methodologies, if any, since your last
      annual impairment test.

    For
further guidance, refer to Release No. 33-8350 “Interpretation: Commission
Guidance Regarding Management’s Discussion and Analysis of Financial Condition
and Results of Operations.”

    RESPONSE:
AZZ has duly noted the Staff’s comments.  As disclosed under Critical
Accounting Policies and Estimates, sub section Impairment of Long-Lived Assets,
Identifiable Assets and Goodwill on page 21 of the Form 10-K, AZZ conducts an
annual impairment test of goodwill in the fourth quarter of each fiscal
year.  AZZ’s disclosure includes:

    •           The
accounting policy AZZ applies;

    •           When
impairment tests are conducted;

    •           How
a possible impairment is measured;

    •           The
variables that could impact the measurement;

    •           That
other variables could arise that could impact the measurement; and

    •           That
the measurement could change in the future.

    AZZ
follows the two-step process as specified in the accounting standards when
conducting its impairment test.  AZZ has never had to apply the second
step because of the significant cushion between the calculated fair values and
the carrying
amounts of its reporting units. The cushions for fiscal 2009, 2008 and 2007 in
the Electrical and Industrial Segment were 214 percent, 122 percent, and 104
percent, respectively, and in the Galvanizing Segment they were 169 percent, 127
percent, and 201 percent, respectively. Because of the significant cushions
between these two amounts, AZZ has not considered it reasonably likely that even
significant variations in the variables associated with its measurements would
trigger a possible impairment.

    In
Note 7 to its financial statements filed with the Form 10-K, AZZ discloses the
breakdown of its goodwill balances by reporting unit and it discloses the
changes in those balances, including the reasons for the changes.  In
the spirit of supplementing but not duplicating information already disclosed in
the notes to