SecProbe.io

CORRESP
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filename1.htm

August 21,
2008

Mr. John Reynolds

Assistant Director

United States Securities
and Exchange Commission

450 Fifth Street

Washington, D.C.  20549-0405

Re:          Response
of Schweitzer-Mauduit International, Inc.

to
Comment Letter from the Securities and Exchange

Commission
dated July 1, 2008

Commenting
on Form 10-K for the year ended December 31, 2007 filed March 7,
2008

File
No. 001-13948

Definitive
Proxy Statement on Schedule 14A

Filed March 7, 2008

File No. 001-13948

Dear Mr. Reynolds:

Attached
is the response of Schweitzer-Mauduit International, Inc. (the “Company”
or “registrant” or “SWM”) to the Securities and Exchange Commission’s (the “Commission”
or “Staff”) comments on the above identified disclosure documents filed by the
Company. We have attempted to fully respond and to provide information that
would assist in more fully understanding our disclosures.

The
Company’s responses to the Commission’s comments follow in the same order set
forth in your July 1, 2008 letter.

Due
to the confidential and sensitive nature of information included in response to
Comment 7 in your letter, we are providing the supplemental analysis in support
of our response to that comment by separate supplemental letter.  Therefore, please anticipate receipt of such
supplemental letter and consider it together with this letter as you evaluate
our responses to your comments.

Form 10-K for Fiscal Year Ended December 31,
2007

Management’s Discussion and Analysis of
Financial Condition and Results of Operation, page 24

Property, Plant and Equipment Valuation, page 31

1.                                     We
note on page 26 that you plan to transfer production from the Lee Mills to
other facilities and discontinue the sale of the majority of commercial and
industrial papers currently produced at the Lee Mills. Please tell us the net
book value of the Lee Mills property, plant and equipment (“PP&E”) as of December 31,
2007, and explain to us how you determined that the net book value is
recoverable in light of your current restructuring activities and, as you
disclose in your Form 8-K filed on October 1, 2007, the fact that
Philip Morris will cease operation of one of its two remaining U.S. facilities
for manufacturing cigarettes and transfer significant production volume
off-shore. In your response, describe how you intend to use or dispose of your
Lee Mills plant once you cease operations at the plant. Also, tell us how you
have applied SFAS 143 in determining whether you have an asset retirement
obligation with regards to the closure of the Lee Mills.

Response:  A
decision was made in the third quarter of 2007 to commit to a plan to shut down
the Lee Mills during 2008.  In
conjunction with that decision, plans for future expected use and disposition
of the Lee Mills assets were evaluated and a decision was made to sell the
assets.  Analysis was performed regarding
the recoverability of the net book value of the assets.

Independent appraisals were obtained and used as a
basis to determine estimates of fair value for the most material components of
the land and buildings, and estimates were made of smaller components in
relation to the appraised properties.
Certain machinery and equipment components were deemed to include proprietary
knowledge of our papermaking techniques and processes, which we would not want
to fall into the hands of competitors, thus a decision was made that the
equipment would not be sold intact.
Also, due to the age and nature of the equipment and cost of removal and
transportation, it was determined that substantially all of the equipment would
be sold for scrap metal.  Based on these
considerations, for the machinery and equipment an estimate was made of the
value that could be recovered from a scrap dealer.  In accordance with Statement of Financial
Accounting Standards (“SFAS”) No. 144 (“SFAS No. 144”), “Accounting
for the Impairment or Disposal of Long-Lived Assets,” asset impairment charges were
recorded in 2007.  As of December 31,
2007, the adjusted carrying values of the Lee Mills PP&E totaled $7.0
million, approximately $6.4 million of which is for land and buildings and
approximately $0.6 million of which is for machinery and equipment.  Of the total $7.0 million carrying value, $5.6 million (or 80%) was
supported by independent appraisals, with the remainder based upon internally
developed

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estimates.
To date in 2008, management continues to believe these fair value
estimates are appropriate and, therefore, we have made no adjustment to these
estimates through the first two quarters of 2008.

With respect to SFAS No. 143,
“Accounting for Asset Retirement Obligations,” the only relevant obligation is
the continuing post-closure monitoring of an old closed landfill.  SWM already carried a liability related to
the obligation to continue this post-closure monitoring.  There were no other asset retirement
obligations identified as defined in paragraph 2 of SFAS No. 143.

Note 2. Summary of Significant Accounting
Policies - Accrued Expenses, page 63

2.                                     In
the balance sheet or in a note thereto, please provide further detail of any “Other
accrued expenses” items in excess of five percent of total current liabilities
in accordance with Rule 5-02 (20) of Regulation S-X.

Response:  “Accrued
expenses” on the consolidated balance sheet at December 31, 2007 totaled
$111.3 million.  Certain major components
of this total were disclosed separately in Note 2 under the caption “Accrued
Expenses”, however many smaller accrued expenses for items totaling $43.7
million were not separately disclosed and were included on the line “Other
accrued expenses” of that table.  The
$43.7 million “Other accrued expenses” line was comprised of accrued expenses
to a variety of suppliers and service providers, a variety of types of business
taxes payable in multiple jurisdictions and other smaller miscellaneous
accruals.  Among these broad individual
types of accrued expenses there were no items in excess of five percent of
total current liabilities (5% of $215.2 million = $10.8 million).

Controls and Procedures, page 95

3.                                     We
note your statement, “A control system, no matter how well conceived and
operated, can provide only reasonable, not absolute, assurance that the
objectives of the control system are met.” Please confirm that in future
filings you will revise, to state clearly, if true, that your disclosure
controls and procedures are designed to provide reasonable assurance of
achieving their objectives and that your principal executive officer and
principal financial officer concluded that your disclosure controls and
procedures are effective at that reasonable assurance level. In the
alternative, remove the reference to the level of assurance of your disclosure
controls and procedures. Please refer to section II.F.4 of Management’s Reports
on Internal Control Over Financial Reporting and Certification Disclosure in
Exchange Act Reports, Item 308T of Regulation S-K, and SEC Release No. 338238,
available on our website at http://www.sec.gov/rules/final/33-8238.htm.

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Response:  We confirm
that in future filings we will revise and state more clearly that our
disclosure controls and procedures are designed to
provide reasonable assurance of achieving their objectives and that our
principal executive officer and principal financial officer concluded that our
disclosure controls and procedures are effective at that
reasonable assurance level.

Audit Committee Financial
Expert, page 97

4.                                     We
note your reference to Item 7(d)(3)(iv) of Schedule 14A of the Exchange
Act for the definition of “independent” and to Item 401(h) of Regulation
S-K for the definition of “audit committee financial expert.” In future
filings, please omit any reference to these items because they do not exist,
and provide the correct citations for the noted definitions.

Response:  We confirm
that in future filings we will omit reference to Item 7(d)(3)(iv) of
Schedule 14A of the Exchange Act for the definition of “independent” and omit
reference to Item 401(h) of Regulation S-K for the definition of “audit
committee financial expert.”  In future
filings we will provide correct citations for these noted definitions by making
reference to “the requirements of the New York Stock Exchange” for the
definition of “independent” and to “Item 407(d)(5)(ii)” for the definition of “audit
committee financial expert.”

Item 11. Executive
Compensation, page 97

5.                                     We
note your statement that your disclosure under “Comprehensive Compensation
Discussion and Analysis” in your definitive proxy statement is not incorporated
by reference from your definitive proxy statement. We also note that your
disclosure under “Comprehensive Compensation Discussion and Analysis” appears
to furnish the information required by Item 402(b) of Regulation S-K and
that the Compensation Committee Report on page 25 of your definitive proxy
statement states: “the Compensation Committee recommended to the Board of
Directors that the Comprehensive Compensation Discussion & Analysis be
included in the Company’s Proxy Statement and incorporated by reference in the
Company’s Annual Report in its Form 10-K.” Please amend your filing so
that it complies with Item 11 of Form 10-K.

Response:  We
believe that the material quantitative information relevant to either a
shareholder’s decision on how to vote shares or to an investor’s decision on
whether or not to buy or sell the Company’s common stock was disclosed in the
elements of the 2008 proxy statement that were incorporated by reference into
the Form 10-K.  Our discussion of
the Restricted Stock plan also incorporated most of the elements

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of our compensation philosophy that are contained in
the Comprehensive Discussion and Analysis and therefore we believe that Item 11
of our 2007 Form 10-K filing complied in all material respects with the
disclosure requirements of Item 402(b) of regulation S-K.  However, we recognize that the “Comprehensive
Compensation Discussion and Analysis” disclosure in our proxy statement
provides useful information for an investor to have a more clear and complete
understanding of Executive Compensation.
Therefore, in future filings we will incorporate by reference in Item 11
of our Annual Report in Form 10-K, the “Executive Compensation” section of
our proxy statement inclusive of the “Comprehensive Compensation Discussion and
Analysis” disclosure.  We believe an
amendment to our 2007 Form 10-K would not provide any significant value to
investors at this point as all of this information is on file with the Commission.

Definitive Proxy
Statement on Schedule 14A

Comprehensive
Compensation Discussion & Analysis, page 10

Market Value
Determination, page 10

6.                                     We
note your reference to an “Executive Peer Group.” Because you appear to
benchmark compensation, in future filings you are required to identify the
companies that comprise the benchmark group. If you have benchmarked different
elements of your compensation against different benchmarking groups, please
identify the companies that comprise each group. Refer to Item 402(b)(2)(xiv)
of Regulation S-K.

Response:  In response to this request, please note that
the competitive analysis of executive compensation that the Compensation
Committee considers is based on the use of Towers Perrin, Watson Wyatt and Mercer
survey databases. Specific companies are not selected from those databases.
Instead, our compensation consultant defines size parameters (based on
revenues) for the appropriate market frame of reference and assesses market
rates based on the data that emerges from the surveys.  Where specific companies are used to
benchmark compensation, as for example in the case of director compensation, we
identified the specific companies that made up the peer group.  See pages 23 and 24 of our 2008 Proxy
Statement.

We
believe that our disclosures and discussion found in the first and second
paragraphs on page 10 and on pages 23 and 24 of the 2008 Proxy
Statement explained the use of the foregoing data bases, the revenue screens
and other adjustment mechanisms used to benchmark our executive compensation and
the companies used to benchmark our director compensation and fully complied
with the requirements of Item 402(b)(2)(xiv) of Regulation S-K.  However, in order to

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avoid any
confusion that may have arisen with respect to our use of the term “executive
peer group” we will add additional clarifying language in our subsequent proxy
statements to the effect that benchmarking of executive compensation is by
reference to data from compensation survey databases and not to specific
companies.

Restricted Stock
Plan-Performance Shares: Year 2007 of 2007-2008 Award  Opportunity,
page 18

Performance Objectives, page 19

7.                                     We
note your footnote disclosure on page 22 regarding the confidential and competitively
sensitive nature of information concerning certain of the performance targets.
You have not provided full disclosure of the terms of the necessary performance
targets to be achieved for your named executive officers to earn their
incentive compensation. In future filings please disclose the specific
performance targets used to determine incentive amounts, or within the time
frame set forth below, provide us with a supplemental analysis
explaining why it is appropriate to omit these targets pursuant to Instruction
4 to Item 402(b) of Regulation S-K. The supplemental analysis should be
based upon the 2008 proxy statement. To the extent that it is appropriate to
omit specific targets, please provide the disclosure pursuant to Instruction 4
to Item 402(b). General statements regarding the level of difficulty, or ease,
associated with achieving performance goals either corporately or individually
are not sufficient. In discussing how likely it will be for the company to
achieve the target levels or other factors, provide as much detail as necessary
without providing information that poses a reasonable risk of competitive harm.

Response:
 Each of the 13 performance objectives
established under the Restricted Stock Plan – Performance Share award opportunity
for 2007 is operationally focused and provides for an executive compensation
opportunity that is well within the norm for comparably sized manufacturing
enterprises as well as within the likely expectations of investors.  We do not believe that the omitted
information is material to either a shareholder in deciding how to vote or to
an investor in deciding whether to purchase or to sell the Company’s common
stock.

Furthermore,
the omitted information focuses on operational objectives at a granular level
or identifies ongoing strategic business plans and initiatives that the Company
considers confidential and competitively sensitive.  The public disclosure of this information
would be detrimental to the Company’s interests and the interests of its shareholders.
 A further description of the omitted
information and our analysis of why it is confidential and competitively
sensitive information that should not be publicly disclosed is being provided
to the Commission as

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supplemental
information in a separate letter.  Please
anticipate receipt of such supplemental letter.

To the
extent that it is appropriate to omit complete disclosure of the specific
performance targets, we note that we disclosed the actual objective levels
achieved by the Company’s executives in 2007 against each of the 13 performance
objectives on pages 19-22 of our proxy statement in the column headed “2007
Performance Level Achieved (Target = 100%)”.
We believe that the disclosure of actual performance against the
objectives meets or exceeds our obligation under S-K It