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ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the Quarterly Period Ended September 30, 2013
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||
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||
OR
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||
o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Commission File Number 1-13953
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Delaware
(State of Incorporation)
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65-0773649
(I.R.S. Employer Identification No.)
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Large accelerated filer
ý
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Accelerated filer
o
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Non-accelerated filer
o
(Do not check if a
smaller reporting company)
|
|
Smaller reporting company
o
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Class
|
|
Outstanding at October 31, 2013
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Common Stock, $0.01 par value per share
|
|
76,896,708 shares
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|
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||||
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||||
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|||
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|||
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|||
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|||
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|||
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|||
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|||
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|||
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|||
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|||
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|||
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||||
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||||
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||||
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||||
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Three Months Ended September 30,
|
|
Nine Months Ended September 30,
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||||||||||||
(In millions, except per share amounts)
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Net sales
|
$
|
771.3
|
|
|
$
|
776.6
|
|
|
$
|
2,284.0
|
|
|
$
|
2,357.7
|
|
Cost of goods sold
|
486.6
|
|
|
491.8
|
|
|
1,432.2
|
|
|
1,491.7
|
|
||||
Gross profit
|
284.7
|
|
|
284.8
|
|
|
851.8
|
|
|
866.0
|
|
||||
Selling, general and administrative expenses
|
125.2
|
|
|
130.8
|
|
|
391.7
|
|
|
401.2
|
|
||||
Restructuring expenses and related asset impairments
|
3.6
|
|
|
1.1
|
|
|
8.7
|
|
|
6.4
|
|
||||
Research and development expenses
|
15.0
|
|
|
15.4
|
|
|
48.5
|
|
|
47.9
|
|
||||
Defined benefit pension expense
|
18.2
|
|
|
17.6
|
|
|
54.9
|
|
|
53.2
|
|
||||
Interest expense and related financing costs
|
10.7
|
|
|
11.5
|
|
|
32.1
|
|
|
34.1
|
|
||||
Provision for environmental remediation
|
1.7
|
|
|
0.6
|
|
|
4.0
|
|
|
1.8
|
|
||||
Chapter 11 expenses, net of interest income
|
2.9
|
|
|
4.4
|
|
|
11.0
|
|
|
12.6
|
|
||||
Libby medical program settlement
|
—
|
|
|
0.1
|
|
|
—
|
|
|
19.6
|
|
||||
Equity in earnings of unconsolidated affiliate
|
(2.8
|
)
|
|
(4.9
|
)
|
|
(17.1
|
)
|
|
(13.8
|
)
|
||||
Other (income) expense, net
|
0.7
|
|
|
(3.2
|
)
|
|
5.1
|
|
|
(6.0
|
)
|
||||
Total costs and expenses
|
175.2
|
|
|
173.4
|
|
|
538.9
|
|
|
557.0
|
|
||||
Income before income taxes
|
109.5
|
|
|
111.4
|
|
|
312.9
|
|
|
309.0
|
|
||||
Provision for income taxes
|
(39.8
|
)
|
|
(35.4
|
)
|
|
(106.7
|
)
|
|
(102.0
|
)
|
||||
Net income
|
69.7
|
|
|
76.0
|
|
|
206.2
|
|
|
207.0
|
|
||||
Less: Net income attributable to noncontrolling interests
|
(0.3
|
)
|
|
(0.5
|
)
|
|
(1.1
|
)
|
|
(1.3
|
)
|
||||
Net income attributable to W. R. Grace & Co. shareholders
|
$
|
69.4
|
|
|
$
|
75.5
|
|
|
$
|
205.1
|
|
|
$
|
205.7
|
|
Earnings Per Share Attributable to W. R. Grace & Co. Shareholders
|
|
|
|
|
|
|
|
||||||||
Basic earnings per share:
|
|
|
|
|
|
|
|
||||||||
Net income attributable to W. R. Grace & Co. shareholders
|
$
|
0.90
|
|
|
$
|
1.01
|
|
|
$
|
2.69
|
|
|
$
|
2.75
|
|
Weighted average number of basic shares
|
76.7
|
|
|
75.0
|
|
|
76.2
|
|
|
74.7
|
|
||||
Diluted earnings per share:
|
|
|
|
|
|
|
|
||||||||
Net income attributable to W. R. Grace & Co. shareholders
|
$
|
0.89
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|
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$
|
0.99
|
|
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$
|
2.64
|
|
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$
|
2.70
|
|
Weighted average number of diluted shares
|
77.9
|
|
|
76.4
|
|
|
77.6
|
|
|
76.2
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
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||||||||||||
(In millions)
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Net income
|
$
|
69.7
|
|
|
$
|
76.0
|
|
|
$
|
206.2
|
|
|
$
|
207.0
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Defined benefit pension and other postretirement plans, net of income taxes
|
28.8
|
|
|
(13.0
|
)
|
|
98.3
|
|
|
(40.3
|
)
|
||||
Currency translation adjustments
|
5.0
|
|
|
14.5
|
|
|
(18.3
|
)
|
|
5.1
|
|
||||
Gain (loss) from hedging activities, net of income taxes
|
—
|
|
|
1.5
|
|
|
(0.4
|
)
|
|
3.0
|
|
||||
Total other comprehensive loss attributable to noncontrolling interests
|
(0.7
|
)
|
|
(0.3
|
)
|
|
(0.9
|
)
|
|
—
|
|
||||
Total other comprehensive income (loss)
|
33.1
|
|
|
2.7
|
|
|
78.7
|
|
|
(32.2
|
)
|
||||
Comprehensive income
|
102.8
|
|
|
78.7
|
|
|
284.9
|
|
|
174.8
|
|
||||
Less: comprehensive (income) loss attributable to noncontrolling interests
|
0.4
|
|
|
(0.2
|
)
|
|
(0.2
|
)
|
|
(1.3
|
)
|
||||
Comprehensive income attributable to W. R. Grace & Co. shareholders
|
$
|
103.2
|
|
|
$
|
78.5
|
|
|
$
|
284.7
|
|
|
$
|
173.5
|
|
|
Nine Months Ended September 30,
|
||||||
(In millions)
|
2013
|
|
2012
|
||||
OPERATING ACTIVITIES
|
|
|
|
||||
Net income
|
$
|
206.2
|
|
|
$
|
207.0
|
|
Reconciliation to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
91.8
|
|
|
88.9
|
|
||
Equity in earnings of unconsolidated affiliate
|
(17.1
|
)
|
|
(13.8
|
)
|
||
Dividend received from unconsolidated affiliate
|
2.8
|
|
|
6.3
|
|
||
Chapter 11 expenses, net of interest income
|
11.0
|
|
|
12.6
|
|
||
Chapter 11 expenses paid
|
(11.2
|
)
|
|
(9.9
|
)
|
||
Libby medical program settlement
|
—
|
|
|
19.6
|
|
||
Libby medical program settlement paid
|
—
|
|
|
(19.6
|
)
|
||
Provision for income taxes
|
106.7
|
|
|
102.0
|
|
||
Income taxes paid, net of refunds
|
(65.6
|
)
|
|
(41.6
|
)
|
||
Excess tax benefits from stock-based compensation
|
33.7
|
|
|
(23.0
|
)
|
||
Interest accrued on pre-petition liabilities subject to compromise
|
28.1
|
|
|
30.0
|
|
||
Restructuring expenses and related asset impairments
|
8.7
|
|
|
6.4
|
|
||
Payments for restructuring expenses
|
(3.8
|
)
|
|
(7.2
|
)
|
||
Defined benefit pension expense
|
54.9
|
|
|
53.2
|
|
||
Payments under defined benefit pension arrangements
|
(63.6
|
)
|
|
(122.5
|
)
|
||
Provision for environmental remediation
|
4.0
|
|
|
1.8
|
|
||
Expenditures for environmental remediation
|
(11.2
|
)
|
|
(8.1
|
)
|
||
Changes in assets and liabilities, excluding effect of currency translation:
|
|
|
|
||||
Trade accounts receivable
|
5.2
|
|
|
(3.7
|
)
|
||
Inventories
|
(37.7
|
)
|
|
20.6
|
|
||
Accounts payable
|
6.8
|
|
|
3.6
|
|
||
All other items, net
|
(7.1
|
)
|
|
(10.2
|
)
|
||
Net cash provided by operating activities
|
342.6
|
|
|
292.4
|
|
||
INVESTING ACTIVITIES
|
|
|
|
||||
Capital expenditures
|
(117.9
|
)
|
|
(103.6
|
)
|
||
Businesses acquired, net of cash acquired
|
(15.8
|
)
|
|
(40.5
|
)
|
||
Transfer to short-term investments
|
(500.0
|
)
|
|
—
|
|
||
Transfer from (to) restricted cash and cash equivalents
|
12.4
|
|
|
(24.1
|
)
|
||
Proceeds from sale of business
|
1.8
|
|
|
—
|
|
||
Other investing activities
|
4.2
|
|
|
0.5
|
|
||
Net cash used for investing activities
|
(615.3
|
)
|
|
(167.7
|
)
|
||
FINANCING ACTIVITIES
|
|
|
|
||||
Net borrowings (repayments) under credit arrangements
|
(3.0
|
)
|
|
24.6
|
|
||
Proceeds from exercise of stock options
|
30.9
|
|
|
25.7
|
|
||
Excess tax benefits from stock-based compensation
|
(33.7
|
)
|
|
23.0
|
|
||
Other financing activities
|
6.1
|
|
|
5.1
|
|
||
Net cash provided by financing activities
|
0.3
|
|
|
78.4
|
|
||
Effect of currency exchange rate changes on cash and cash equivalents
|
(9.8
|
)
|
|
(0.2
|
)
|
||
(Decrease) increase in cash and cash equivalents
|
(282.2
|
)
|
|
202.9
|
|
||
Cash and cash equivalents, beginning of period
|
1,336.9
|
|
|
1,048.3
|
|
||
Cash and cash equivalents, end of period
|
$
|
1,054.7
|
|
|
$
|
1,251.2
|
|
(In millions, except par value and shares)
|
September 30,
2013 |
|
December 31,
2012 |
||||
ASSETS
|
|
|
|
||||
Current Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
1,054.7
|
|
|
$
|
1,336.9
|
|
Short-term investments
|
500.0
|
|
|
—
|
|
||
Restricted cash and cash equivalents
|
185.2
|
|
|
197.6
|
|
||
Trade accounts receivable, less allowance of $5.4 (2012—$5.2)
|
467.8
|
|
|
474.8
|
|
||
Accounts receivable—unconsolidated affiliate
|
16.1
|
|
|
15.6
|
|
||
Inventories
|
314.8
|
|
|
278.6
|
|
||
Deferred income taxes
|
10.6
|
|
|
58.3
|
|
||
Other current assets
|
140.4
|
|
|
78.4
|
|
||
Total Current Assets
|
2,689.6
|
|
|
2,440.2
|
|
||
Properties and equipment, net of accumulated depreciation and amortization of $1,830.2 (2012—$1,785.1)
|
787.8
|
|
|
770.5
|
|
||
Goodwill
|
204.0
|
|
|
196.7
|
|
||
Patents, licenses and other intangible assets, net
|
76.9
|
|
|
82.7
|
|
||
Deferred income taxes
|
814.6
|
|
|
956.3
|
|
||
Asbestos-related insurance
|
500.0
|
|
|
500.0
|
|
||
Overfunded defined benefit pension plans
|
30.2
|
|
|
33.8
|
|
||
Investment in unconsolidated affiliate
|
90.8
|
|
|
85.5
|
|
||
Other assets
|
36.1
|
|
|
24.5
|
|
||
Total Assets
|
$
|
5,230.0
|
|
|
$
|
5,090.2
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
Liabilities Not Subject to Compromise
|
|
|
|
||||
Current Liabilities
|
|
|
|
||||
Debt payable within one year
|
$
|
86.2
|
|
|
$
|
83.4
|
|
Debt payable—unconsolidated affiliate
|
4.5
|
|
|
3.6
|
|
||
Accounts payable
|
249.5
|
|
|
249.4
|
|
||
Accounts payable—unconsolidated affiliate
|
10.8
|
|
|
2.6
|
|
||
Other current liabilities
|
289.3
|
|
|
307.3
|
|
||
Total Current Liabilities
|
640.3
|
|
|
646.3
|
|
||
Debt payable after one year
|
7.4
|
|
|
13.4
|
|
||
Debt payable—unconsolidated affiliate
|
24.1
|
|
|
22.4
|
|
||
Deferred income taxes
|
23.9
|
|
|
27.1
|
|
||
Underfunded and unfunded defined benefit pension plans
|
250.8
|
|
|
400.6
|
|
||
Other liabilities
|
45.2
|
|
|
45.0
|
|
||
Total Liabilities Not Subject to Compromise
|
991.7
|
|
|
1,154.8
|
|
||
Liabilities Subject to Compromise—Note 2
|
|
|
|
||||
Debt plus accrued interest
|
997.5
|
|
|
973.3
|
|
||
Income tax contingencies
|
85.4
|
|
|
87.6
|
|
||
Asbestos-related contingencies
|
2,065.0
|
|
|
2,065.0
|
|
||
Environmental contingencies
|
134.0
|
|
|
140.5
|
|
||
Postretirement benefits
|
174.8
|
|
|
188.1
|
|
||
Other liabilities and accrued interest
|
169.7
|
|
|
162.6
|
|
||
Total Liabilities Subject to Compromise
|
3,626.4
|
|
|
3,617.1
|
|
||
Total Liabilities
|
4,618.1
|
|
|
4,771.9
|
|
||
Commitments and Contingencies—Note 10
|
|
|
|
||||
Equity
|
|
|
|
||||
Common stock issued, par value $0.01; 300,000,000 shares authorized; outstanding: 76,849,629 (2012—75,565,409)
|
0.8
|
|
|
0.8
|
|
||
Paid-in capital
|
530.1
|
|
|
536.5
|
|
||
Retained earnings
|
600.3
|
|
|
395.2
|
|
||
Treasury stock, at cost: shares: 140,571 (2012—1,414,351)
|
(1.7
|
)
|
|
(16.8
|
)
|
||
Accumulated other comprehensive loss
|
(527.7
|
)
|
|
(607.3
|
)
|
||
Total W. R. Grace & Co. Shareholders' Equity
|
601.8
|
|
|
308.4
|
|
||
Noncontrolling interests
|
10.1
|
|
|
9.9
|
|
||
Total Equity
|
611.9
|
|
|
318.3
|
|
||
Total Liabilities and Equity
|
$
|
5,230.0
|
|
|
$
|
5,090.2
|
|
(In millions)
|
Common
Stock
and
Paid-in
Capital
|
|
Retained
Earnings
|
|
Treasury
Stock
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Noncontrolling
Interests
|
|
Total
Equity
|
||||||||||||
Balance, December 31, 2011
|
$
|
473.6
|
|
|
$
|
301.1
|
|
|
$
|
(36.8
|
)
|
|
$
|
(578.5
|
)
|
|
$
|
8.1
|
|
|
$
|
167.5
|
|
Net income
|
—
|
|
|
205.7
|
|
|
—
|
|
|
—
|
|
|
1.3
|
|
|
207.0
|
|
||||||
Stock based compensation
|
11.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11.2
|
|
||||||
Exercise of stock options
|
9.5
|
|
|
—
|
|
|
16.2
|
|
|
—
|
|
|
—
|
|
|
25.7
|
|
||||||
Tax benefit related to stock plans
|
23.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23.0
|
|
||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(32.2
|
)
|
|
—
|
|
|
(32.2
|
)
|
||||||
Balance, September 30, 2012
|
$
|
517.3
|
|
|
$
|
506.8
|
|
|
$
|
(20.6
|
)
|
|
$
|
(610.7
|
)
|
|
$
|
9.4
|
|
|
$
|
402.2
|
|
Balance, December 31, 2012
|
$
|
537.3
|
|
|
$
|
395.2
|
|
|
$
|
(16.8
|
)
|
|
$
|
(607.3
|
)
|
|
$
|
9.9
|
|
|
$
|
318.3
|
|
Net income
|
—
|
|
|
205.1
|
|
|
—
|
|
|
—
|
|
|
1.1
|
|
|
206.2
|
|
||||||
Stock based compensation
|
10.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10.7
|
|
||||||
Exercise of stock options
|
15.8
|
|
|
—
|
|
|
15.1
|
|
|
—
|
|
|
—
|
|
|
30.9
|
|
||||||
Tax benefit related to stock plans
|
(33.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(33.7
|
)
|
||||||
Shares issued
|
0.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.8
|
|
||||||
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
79.6
|
|
|
(0.9
|
)
|
|
78.7
|
|
||||||
Balance, September 30, 2013
|
$
|
530.9
|
|
|
$
|
600.3
|
|
|
$
|
(1.7
|
)
|
|
$
|
(527.7
|
)
|
|
$
|
10.1
|
|
|
$
|
611.9
|
|
•
|
Contingent liabilities, which depend on an assessment of the probability of loss and an estimate of ultimate resolution cost, such as asbestos-related matters and litigation (see Notes 2 and 3), income taxes (see Note 7), and environmental remediation (see Note 10);
|
•
|
Pension and postretirement liabilities that depend on assumptions regarding participant life spans, future inflation, discount rates and total returns on invested funds (see Note 8);
|
•
|
Realization values of net deferred tax assets and insurance receivables, which depend on projections of future income and cash flows and assessments of insurance coverage and insurer solvency; and
|
•
|
Recoverability of goodwill, which depends on assumptions used to value reporting units, such as observable market inputs, projections of future cash flows and weighted average cost of capital. The Grace Construction Products (GCP) Europe reporting unit continues to operate in a challenging environment. While the fair value of this reporting unit exceeded the carrying value at its last testing date and management does not believe that impairment is probable, the business must continue to improve its performance in future periods, consistent with expectations, to sustain the goodwill carrying value.
|
•
|
$250 million
in cash plus interest thereon from January 1, 2009, to the effective date of the Joint Plan to be paid by Grace;
|
•
|
Cash in the amount of the PD Initial Payment (as described below) and the ZAI Initial Payment (as described below) to be paid by Grace;
|
•
|
A warrant to acquire
10 million
shares of Company common stock at an exercise price of
$17.00
per share, expiring
one
year from the effective date of the Joint Plan. This obligation will be settled in cash with the PI Trust as discussed below;
|
•
|
Rights to all proceeds under all of the Debtors' insurance policies that are available for payment of PI Claims;
|
•
|
Cash in the amount of
$512.5 million
plus interest thereon from December 21, 2002, to the effective date of the Joint Plan at a rate of
5.5%
per annum to be paid by Cryovac reduced by the amount of Cryovac's contribution to the PD Initial Payment and the ZAI Initial Payment (as described below) and
18 million
shares of Sealed Air common stock to be paid by Cryovac pursuant to the Sealed Air Settlement;
|
•
|
Cash in the amount of
$115 million
to be paid by Fresenius pursuant to the Fresenius Settlement reduced by the amount of Fresenius' contribution to the PD Initial Payment and the ZAI Initial Payment (as described below); and
|
•
|
Deferred payments by Grace of
$110 million
per year for 5 years beginning in 2019, and
$100 million
per year for 10 years beginning in 2024, that would be subordinate to any bank debt or bonds
|
•
|
Approximately
$152 million
in cash plus cash in the amount of the estimated first
six months
of PD Trust expenses, to be paid by Cryovac and Fresenius (the "PD Initial Payment"), and CDN
$8.6 million
in cash to be paid by Grace pursuant to the Canadian ZAI Settlement.
|
•
|
A Grace obligation (the "PD Obligation") providing for a payment to the PD Trust every
six months
in the amount of the non-ZAI PD Claims allowed during the preceding six months plus interest and, except for the first six months, the amount of PD Trust expenses for the preceding six months. The aggregate amount to be paid under the PD Obligation would not be capped.
|
•
|
$30 million
in cash plus interest from April 1, 2009, to the effective date of the Joint Plan, to be paid by Cryovac and Fresenius (the "ZAI Initial Payment").
|
•
|
$30 million
in cash on the third anniversary of the effective date of the Joint Plan, to be paid by Grace.
|
•
|
A Grace obligation providing for the payment of up to
10
contingent deferred payments of
$8 million
per year during the 20-year period beginning on the fifth anniversary of the effective date of the Joint Plan, with each such payment due only if the ZAI Assets fall below
$10 million
during the preceding year.
|
(In millions)
|
September 30,
2013 |
|
December 31,
2012 |
||||
Asbestos-related contingencies
|
$
|
2,065.0
|
|
|
$
|
2,065.0
|
|
Pre-petition bank debt plus accrued interest
|
960.1
|
|
|
937.2
|
|
||
Environmental contingencies
|
134.0
|
|
|
140.5
|
|
||
Unfunded special pension arrangements
|
127.4
|
|
|
134.3
|
|
||
Income tax contingencies
|
85.4
|
|
|
87.6
|
|
||
Postretirement benefits other than pension
|
58.4
|
|
|
63.9
|
|
||
Drawn letters of credit plus accrued interest
|
37.4
|
|
|
36.1
|
|
||
Accounts payable
|
31.3
|
|
|
31.3
|
|
||
Retained obligations of divested businesses
|
29.6
|
|
|
29.0
|
|
||
Other accrued liabilities
|
108.8
|
|
|
102.3
|
|
||
Reclassification to current liabilities(1)
|
(11.0
|
)
|
|
(10.1
|
)
|
||
Total Liabilities Subject to Compromise
|
$
|
3,626.4
|
|
|
$
|
3,617.1
|
|
(1)
|
As of
September 30, 2013
, and
December 31, 2012
, approximately
$11.0 million
and
$10.1 million
, respectively, of certain pension and postretirement benefit obligations subject to compromise have been presented in "other current liabilities" in the Consolidated Balance Sheets in accordance with ASC 715 "Compensation—Retirement Benefits".
|
(In millions) (Unaudited)
|
Cumulative
Since Filing
|
||
Balance, Filing Date April 2, 2001
|
$
|
2,366.0
|
|
Cash disbursements and/or reclassifications under Bankruptcy Court orders:
|
|
||
Payment of environmental settlement liability
|
(252.0
|
)
|
|
Freight and distribution order
|
(5.7
|
)
|
|
Trade accounts payable order
|
(9.1
|
)
|
|
Resolution of contingencies subject to Chapter 11
|
(130.0
|
)
|
|
Other court orders for payments of certain operating expenses
|
(395.4
|
)
|
|
Expense (income) items:
|
|
||
Interest on pre-petition liabilities
|
578.0
|
|
|
Employee-related accruals
|
125.2
|
|
|
Provision for asbestos-related contingencies
|
1,109.8
|
|
|
Provision for environmental contingencies
|
359.0
|
|
|
Release of income tax contingencies
|
(82.7
|
)
|
|
Balance sheet reclassifications
|
(36.7
|
)
|
|
Balance, end of period
|
$
|
3,626.4
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(In millions)
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Legal and financial advisory fees
|
$
|
3.6
|
|
|
$
|
4.6
|
|
|
$
|
12.4
|
|
|
$
|
13.2
|
|
Interest income
|
(0.7
|
)
|
|
(0.2
|
)
|
|
(1.4
|
)
|
|
(0.6
|
)
|
||||
Chapter 11 expenses, net of interest income
|
$
|
2.9
|
|
|
$
|
4.4
|
|
|
$
|
11.0
|
|
|
$
|
12.6
|
|
|
Nine Months Ended September 30,
|
||||||
(In millions) (Unaudited)
|
2013
|
|
2012
|
||||
Net sales, including intercompany
|
$
|
1,077.1
|
|
|
$
|
1,153.8
|
|
Cost of goods sold, including intercompany, exclusive of depreciation and amortization shown separately below
|
659.0
|
|
|
685.2
|
|
||
Selling, general and administrative expenses
|
175.5
|
|
|
192.8
|
|
||
Defined benefit pension expense
|
35.9
|
|
|
38.0
|
|
||
Depreciation and amortization
|
51.4
|
|
|
50.4
|
|
||
Chapter 11 expenses, net of interest income
|
11.0
|
|
|
12.6
|
|
||
Libby medical program settlement
|
—
|
|
|
19.6
|
|
||
Research and development expenses
|
27.8
|
|
|
26.8
|
|
||
Interest expense and related financing costs
|
28.1
|
|
|
30.8
|
|
||
Restructuring expenses
|
4.8
|
|
|
2.5
|
|
||
Provision for environmental remediation
|
3.8
|
|
|
1.1
|
|
||
Other income, net
|
(52.2
|
)
|
|
(63.2
|
)
|
||
|
945.1
|
|
|
996.6
|
|
||
Income before income taxes and equity in net income of non-filing entities
|
132.0
|
|
|
157.2
|
|
||
Provision for income taxes
|
(52.9
|
)
|
|
(60.4
|
)
|
||
Income before equity in net income of non-filing entities
|
79.1
|
|
|
96.8
|
|
||
Equity in net income of non-filing entities
|
126.0
|
|
|
108.9
|
|
||
Net income attributable to W. R. Grace & Co. shareholders
|
$
|
205.1
|
|
|
$
|
205.7
|
|
|
Nine Months Ended September 30,
|
||||||
(In millions) (Unaudited)
|
2013
|
|
2012
|
||||
Operating Activities
|
|
|
|
||||
Net income attributable to W. R. Grace & Co. shareholders
|
$
|
205.1
|
|
|
$
|
205.7
|
|
Reconciliation to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
51.4
|
|
|
50.4
|
|
||
Equity in net income of non-filing entities
|
(126.0
|
)
|
|
(108.9
|
)
|
||
Provision for income taxes
|
52.9
|
|
|
60.4
|
|
||
Income taxes paid, net of refunds
|
(3.6
|
)
|
|
(2.9
|
)
|
||
Libby medical program settlement
|
—
|
|
|
19.6
|
|
||
Libby medical program settlement paid
|
—
|
|
|
(19.6
|
)
|
||
Excess tax benefits from stock-based compensation
|
33.7
|
|
|
(23.0
|
)
|
||
Interest accrued on pre-petition liabilities subject to compromise
|
28.1
|
|
|
30.0
|
|
||
Defined benefit pension expense
|
35.9
|
|
|
38.0
|
|
||
Payments under defined benefit pension arrangements
|
(54.2
|
)
|
|
(113.5
|
)
|
||
Changes in assets and liabilities, excluding the effect of foreign currency translation:
|
|
|
|
||||
Trade accounts receivable
|
(7.5
|
)
|
|
(7.6
|
)
|
||
Inventories
|
(31.8
|
)
|
|
45.0
|
|
||
Accounts payable
|
7.5
|
|
|
(7.2
|
)
|
||
All other items, net
|
14.8
|
|
|
(22.3
|
)
|
||
Net cash provided by operating activities
|
206.3
|
|
|
144.1
|
|
||
Investing Activities
|
|
|
|
||||
Capital expenditures
|
(68.6
|
)
|
|
(63.4
|
)
|
||
Transfer to short-term investments
|
(500.0
|
)
|
|
—
|
|
||
Transfer from (to) restricted cash and cash equivalents
|
(11.2
|
)
|
|
(13.2
|
)
|
||
Net cash used for investing activities
|
(579.8
|
)
|
|
(76.6
|
)
|
||
Financing Activities
|
|
|
|
||||
Net repayments under credit arrangements
|
(0.3
|
)
|
|
(0.4
|
)
|
||
Proceeds from exercise of stock options
|
31.7
|
|
|
25.7
|
|
||
Excess tax benefits from stock-based compensation
|
(33.7
|
)
|
|
23.0
|
|
||
Net cash (used for) provided by financing activities
|
(2.3
|
)
|
|
48.3
|
|
||
Net (decrease) increase in cash and cash equivalents
|
(375.8
|
)
|
|
115.8
|
|
||
Cash and cash equivalents, beginning of period
|
1,064.2
|
|
|
788.6
|
|
||
Cash and cash equivalents, end of period
|
$
|
688.4
|
|
|
$
|
904.4
|
|
(In millions) (Unaudited)
|
September 30,
2013 |
|
December 31, 2012
|
||||
ASSETS
|
|
|
|
||||
Current Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
688.4
|
|
|
$
|
1,064.2
|
|
Short-term investments
|
500.0
|
|
|
—
|
|
||
Restricted cash and cash equivalents
|
129.5
|
|
|
118.3
|
|
||
Trade accounts receivable, net
|
140.1
|
|
|
132.6
|
|
||
Accounts receivable—unconsolidated affiliate
|
14.9
|
|
|
14.1
|
|
||
Receivables from non-filing entities, net
|
154.1
|
|
|
160.5
|
|
||
Inventories
|
138.1
|
|
|
106.3
|
|
||
Other current assets
|
15.7
|
|
|
58.5
|
|
||
Total Current Assets
|
1,780.8
|
|
|
1,654.5
|
|
||
Properties and equipment, net
|
449.5
|
|
|
433.5
|
|
||
Deferred income taxes
|
788.0
|
|
|
935.5
|
|
||
Asbestos-related insurance
|
500.0
|
|
|
500.0
|
|
||
Loans receivable from non-filing entities, net
|
286.5
|
|
|
282.1
|
|
||
Investment in non-filing entities
|
556.3
|
|
|
449.5
|
|
||
Investment in unconsolidated affiliate
|
90.8
|
|
|
85.5
|
|
||
Other assets
|
58.1
|
|
|
47.2
|
|
||
Total Assets
|
$
|
4,510.0
|
|
|
$
|
4,387.8
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
Liabilities Not Subject to Compromise
|
|
|
|
||||
Current liabilities (including $15.0 due to unconsolidated affiliate) (2012—$6.0)
|
$
|
209.6
|
|
|
$
|
244.7
|
|
Underfunded defined benefit pension plans
|
13.4
|
|
|
161.0
|
|
||
Other liabilities (including $24.1 due to unconsolidated affiliate) (2012—$22.4)
|
58.7
|
|
|
56.5
|
|
||
Total Liabilities Not Subject to Compromise
|
281.7
|
|
|
462.2
|
|
||
Liabilities Subject to Compromise
|
3,626.4
|
|
|
3,617.1
|
|
||
Total Liabilities
|
3,908.1
|
|
|
4,079.3
|
|
||
Total W. R. Grace & Co. Shareholders' Equity
|
601.8
|
|
|
308.4
|
|
||
Noncontrolling interests in Chapter 11 filing entities
|
0.1
|
|
|
0.1
|
|
||
Total Equity
|
601.9
|
|
|
308.5
|
|
||
Total Liabilities and Equity
|
$
|
4,510.0
|
|
|
$
|
4,387.8
|
|
•
|
The warrant to acquire
10 million
shares of the Company's common stock for
$17.00
per share, which will be recorded at fair value on the effective date of the Joint Plan. Under the agreement to cash settle the warrant, discussed in Note 2, the warrant will have a value between
$375 million
and
$490 million
. Based on the current trading range of Company common stock and other valuation factors, Grace estimates the value of the warrant at emergence will be the maximum value of
$490 million
.
|
•
|
The deferred payment obligation of
$110 million
per year for
five years
beginning January 2, 2019, and of
$100 million
per year for
ten years
beginning January 2, 2024, which will be recorded at fair value on the effective date of the Joint Plan. The recorded fair value of the deferred payment obligation of
$547 million
is within the reasonable range of possible valuations of this obligation at emergence. The value of the deferred payment obligation is affected by (i) interest rates; (ii) the Company's credit standing and the payment period of the deferred payments; (iii) restrictive covenants and terms of the Company's other credit facilities; (iv) assessment of the risk of a default, which if default were to occur would require Grace to issue shares of Company common stock; and (v) the subordination provisions of the deferred payment agreement.
|
•
|
The cash payable by Grace to fund the PI and PD Trusts as discussed in Note 2, which will be recorded at fair value on the effective date of the Joint Plan. Grace estimates the fair value of these payments to be
$528 million
at emergence.
|
•
|
As discussed in Note 2, proceeds with respect to all of Grace's insurance policies that provide coverage for asbestos-related claims would be transferred to the PI Trust under the Joint Plan. The recorded asbestos-related insurance receivable and related liability of
$500.0 million
at
September 30, 2013
, is within the reasonable range of possible valuations of these policies at emergence.
|
(In millions)
|
September 30,
2013 |
|
December 31, 2012
|
||||
Raw materials
|
$
|
78.9
|
|
|
$
|
66.5
|
|
In process
|
52.9
|
|
|
46.1
|
|
||
Finished products
|
151.6
|
|
|
133.8
|
|
||
Other
|
31.4
|
|
|
32.2
|
|
||
|
$
|
314.8
|
|
|
$
|
278.6
|
|
(In millions)
|
September 30,
2013 |
|
December 31, 2012
|
||||
Debt payable within one year
|
$
|
86.2
|
|
|
$
|
83.4
|
|
Debt payable after one year
|
$
|
7.4
|
|
|
$
|
13.4
|
|
Debt Subject to Compromise
|
|
|
|
||||
Bank borrowings
|
$
|
500.0
|
|
|
$
|
500.0
|
|
Accrued interest on bank borrowings
|
460.1
|
|
|
437.2
|
|
||
Drawn letters of credit
|
26.7
|
|
|
26.5
|
|
||
Accrued interest on drawn letters of credit
|
10.7
|
|
|
9.6
|
|
||
|
$
|
997.5
|
|
|
$
|
973.3
|
|
Weighted average interest rates on total debt
|
3.5
|
%
|
|
3.5
|
%
|
|
Fair Value Measurements at
September 30, 2013 Using
|
||||||||||||||
Items Measured at Fair Value on a Recurring Basis
(In millions)
|
Total
|
|
Quoted Prices in Active Markets for Identical Assets or Liabilities
(Level 1)
|
|
Significant Other Observable Inputs
(Level 2)
|
|
Significant Unobservable Inputs
(Level 3)
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Currency derivatives
|
$
|
2.2
|
|
|
$
|
—
|
|
|
$
|
2.2
|
|
|
$
|
—
|
|
Commodity derivatives
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total Assets
|
$
|
2.2
|
|
|
$
|
—
|
|
|
$
|
2.2
|
|
|
$
|
—
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Currency derivatives
|
$
|
10.8
|
|
|
$
|
—
|
|
|
$
|
10.8
|
|
|
$
|
—
|
|
Commodity derivatives
|
0.5
|
|
|
—
|
|
|
0.5
|
|
|
—
|
|
||||
Total Liabilities
|
$
|
11.3
|
|
|
$
|
—
|
|
|
$
|
11.3
|
|
|
$
|
—
|
|
|
Fair Value Measurements at
December 31, 2012 Using
|
||||||||||||||
Items Measured at Fair Value on a Recurring Basis
(In millions)
|
Total
|
|
Quoted Prices in Active Markets for Identical Assets or Liabilities
(Level 1)
|
|
Significant Other Observable Inputs
(Level 2)
|
|
Significant Unobservable Inputs
(Level 3)
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Currency derivatives
|
$
|
1.2
|
|
|
$
|
—
|
|
|
$
|
1.2
|
|
|
$
|
—
|
|
Commodity derivatives
|
0.2
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
||||
Total Assets
|
$
|
1.4
|
|
|
$
|
—
|
|
|
$
|
1.4
|
|
|
$
|
—
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Currency derivatives
|
$
|
5.1
|
|
|
$
|
—
|
|
|
$
|
5.1
|
|
|
$
|
—
|
|
Commodity derivatives
|
0.4
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
||||
Total Liabilities
|
$
|
5.5
|
|
|
$
|
—
|
|
|
$
|
5.5
|
|
|
$
|
—
|
|
Fair Values of Derivative Instruments at
September 30, 2013
(In millions)
|
Asset Derivatives
|
|
Liability Derivatives
|
||||||||
Balance Sheet
Location
|
|
Fair Value
|
|
Balance Sheet
Location
|
|
Fair Value
|
|||||
Derivatives designated as hedging instruments under ASC 815:
|
|
|
|
|
|
|
|
||||
Commodity contracts
|
Other current assets
|
|
$
|
—
|
|
|
Other current liabilities
|
|
$
|
0.5
|
|
Currency contracts
|
Other current assets
|
|
0.7
|
|
|
Other current liabilities
|
|
0.1
|
|
||
Currency contracts
|
Other assets
|
|
1.4
|
|
|
Other liabilities
|
|
—
|
|
||
Derivatives not designated as hedging instruments under ASC 815:
|
|
|
|
|
|
|
|
||||
Currency contracts
|
Other current assets
|
|
0.1
|
|
|
Other current liabilities
|
|
10.7
|
|
||
Total derivatives
|
|
|
$
|
2.2
|
|
|
|
|
$
|
11.3
|
|
Fair Values of Derivative Instruments at
December 31, 2012
(In millions)
|
Asset Derivatives
|
|
Liability Derivatives
|
||||||||
Balance Sheet
Location
|
|
Fair Value
|
|
Balance Sheet
Location
|
|
Fair Value
|
|||||
Derivatives designated as hedging instruments under ASC 815:
|
|
|
|
|
|
|
|
||||
Commodity contracts
|
Other current assets
|
|
$
|
0.2
|
|
|
Other current liabilities
|
|
$
|
0.4
|
|
Currency contracts
|
Other current assets
|
|
1.2
|
|
|
Other current liabilities
|
|
0.2
|
|
||
Derivatives not designated as hedging instruments under ASC 815:
|
|
|
|
|
|
|
|
||||
Currency contracts
|
Other current assets
|
|
—
|
|
|
Other current liabilities
|
|
4.9
|
|
||
Total derivatives
|
|
|
$
|
1.4
|
|
|
|
|
$
|
5.5
|
|
The Effect of Derivative Instruments on the Consolidated Statement of Operations for the Three Months Ended
September 30, 2013
(In millions)
|
Amount of Gain or (Loss) Recognized in OCI on Derivatives (Effective Portion)
|
|
Location of Gain or (Loss) Reclassified from Accumulated OCI into Income
(Effective Portion)
|
|
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income
(Effective Portion)
|
||||
Derivatives in ASC 815 cash flow hedging relationships:
|
|
|
|
|
|||||
Currency contracts
|
$
|
0.3
|
|
|
Other income (expense)
|
|
$
|
0.5
|
|
Currency contracts
|
—
|
|
|
Cost of goods sold
|
|
(0.1
|
)
|
||
Commodity contracts
|
(0.1
|
)
|
|
Cost of goods sold
|
|
(0.3
|
)
|
||
Total derivatives
|
$
|
0.2
|
|
|
|
|
$
|
0.1
|
|
|
|
|
|
|
|
||||
|
|
Location of Gain or (Loss) Recognized in Income on Derivatives
|
|
Amount of Gain or (Loss) Recognized in Income on Derivatives
|
|||||
Derivatives not designated as hedging instruments under ASC 815:
|
|
|
|
|
|||||
Currency contracts
|
|
Other income (expense)
|
|
$
|
(9.9
|
)
|
The Effect of Derivative Instruments on the Consolidated Statement of Operations for the Nine Months Ended
September 30, 2013
(In millions)
|
Amount of Gain or (Loss) Recognized in OCI on Derivatives (Effective Portion)
|
|
Location of Gain or (Loss) Reclassified from Accumulated OCI into Income
(Effective Portion)
|
|
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income
(Effective Portion)
|
||||
Derivatives in ASC 815 cash flow hedging relationships:
|
|
|
|
|
|||||
Currency contracts
|
$
|
1.0
|
|
|
Other income (expense)
|
|
$
|
1.3
|
|
Currency contracts
|
(0.2
|
)
|
|
Cost of goods sold
|
|
(0.2
|
)
|
||
Commodity contracts
|
(0.4
|
)
|
|
Cost of goods sold
|
|
(0.1
|
)
|
||
Total derivatives
|
$
|
0.4
|
|
|
|
|
$
|
1.0
|
|
|
|
|
|
|
|
||||
|
|
Location of Gain or (Loss) Recognized in Income on Derivatives
|
|
Amount of Gain or (Loss) Recognized in Income on Derivatives
|
|||||
Derivatives not designated as hedging instruments under ASC 815:
|
|
|
|
|
|||||
Currency contracts
|
|
Other income (expense)
|
|
$
|
(5.8
|
)
|
The Effect of Derivative Instruments on the Consolidated Statement of Operations for the Three Months Ended September 30, 2012
(In millions)
|
Amount of Gain or (Loss) Recognized in OCI on Derivatives (Effective Portion)
|
|
Location of Gain or (Loss) Reclassified from Accumulated OCI into Income
(Effective Portion)
|
|
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income
(Effective Portion)
|
||||
Derivatives in ASC 815 cash flow hedging relationships:
|
|
|
|
|
|||||
Currency contracts
|
$
|
0.8
|
|
|
Cost of goods sold
|
|
$
|
0.6
|
|
Commodity contracts
|
0.8
|
|
|
Cost of goods sold
|
|
(1.3
|
)
|
||
Total derivatives
|
$
|
1.6
|
|
|
|
|
$
|
(0.7
|
)
|
|
|
|
|
|
|
||||
|
|
Location of Gain or (Loss) Recognized in Income on Derivatives
|
|
Amount of Gain or (Loss) Recognized in Income on Derivatives
|
|||||
Derivatives not designated as hedging instruments under ASC 815:
|
|
|
|
|
|||||
Currency contracts
|
|
Other income (expense)
|
|
$
|
(4.4
|
)
|
The Effect of Derivative Instruments on the Consolidated Statement of Operations for the Nine Months Ended
September 30, 2012
(In millions)
|
Amount of Gain or (Loss) Recognized in OCI on Derivatives (Effective Portion)
|
|
Location of Gain or (Loss) Reclassified from Accumulated OCI into Income
(Effective Portion)
|
|
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income
(Effective Portion)
|
||||
Derivatives in ASC 815 cash flow hedging relationships:
|
|
|
|
|
|||||
Currency contracts
|
$
|
0.8
|
|
|
Cost of goods sold
|
|
$
|
0.4
|
|
Commodity contracts
|
(1.5
|
)
|
|
Cost of goods sold
|
|
(5.7
|
)
|
||
Total derivatives
|
$
|
(0.7
|
)
|
|
|
|
$
|
(5.3
|
)
|
|
|
|
|
|
|
||||
|
|
Location of Gain or (Loss) Recognized in Income on Derivatives
|
|
Amount of Gain or (Loss) Recognized in Income on Derivatives
|
|||||
Derivatives not designated as hedging instruments under ASC 815:
|
|
|
|
|
|||||
Currency contracts
|
|
Other income (expense)
|
|
$
|
3.4
|
|
Tax Jurisdiction(1)
|
Examination
in Progress
|
|
Examination Not
Yet Initiated |
United States—Federal
|
2007 - 2009
|
|
2010 - 2012
|
United States—State
|
2007 - 2011
|
|
2009 - 2012
|
Germany
|
2006 - 2008
|
|
2009 - 2012
|
France
|
2009 - 2011
|
|
2012
|
United Kingdom
|
None
|
|
2008 - 2012
|
Italy
|
None
|
|
2008 - 2012
|
Canada
|
None
|
|
2006 - 2012
|
(1)
|
Includes federal, state, provincial or local jurisdictions, as applicable.
|
(In millions)
|
September 30,
2013 |
|
December 31, 2012
|
||||
Overfunded defined benefit pension plans
|
$
|
30.2
|
|
|
$
|
33.8
|
|
Underfunded defined benefit pension plans
|
(30.2
|
)
|
|
(179.7
|
)
|
||
Unfunded defined benefit pension plans
|
(220.6
|
)
|
|
(220.9
|
)
|
||
Total underfunded and unfunded defined benefit pension plans
|
(250.8
|
)
|
|
(400.6
|
)
|
||
Unfunded defined benefit pension plans included in liabilities subject to compromise
|
(121.6
|
)
|
|
(128.5
|
)
|
||
Pension liabilities included in other current liabilities
|
(14.3
|
)
|
|
(14.0
|
)
|
||
Net funded status
|
$
|
(356.5
|
)
|
|
$
|
(509.3
|
)
|
|
Three Months Ended September 30,
|
||||||||||||||||||||||
|
2013
|
|
2012
|
||||||||||||||||||||
|
Pension
|
|
Other Post
Retirement
|
|
Pension
|
|
Other Post
Retirement
|
||||||||||||||||
(In millions)
|
U.S.
|
|
Non-U.S.
|
|
|
U.S.
|
|
Non-U.S.
|
|
||||||||||||||
Service cost
|
$
|
6.3
|
|
|
$
|
2.8
|
|
|
$
|
—
|
|
|
$
|
5.4
|
|
|
$
|
2.2
|
|
|
$
|
—
|
|
Interest cost
|
12.9
|
|
|
5.1
|
|
|
0.5
|
|
|
14.0
|
|
|
5.3
|
|
|
0.6
|
|
||||||
Expected return on plan assets
|
(17.0
|
)
|
|
(3.4
|
)
|
|
—
|
|
|
(15.8
|
)
|
|
(3.7
|
)
|
|
—
|
|
||||||
Amortization of prior service cost
|
0.2
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of net deferred actuarial loss
|
9.5
|
|
|
1.8
|
|
|
0.2
|
|
|
8.9
|
|
|
1.1
|
|
|
0.2
|
|
||||||
Net periodic benefit cost
|
$
|
11.9
|
|
|
$
|
6.3
|
|
|
$
|
0.7
|
|
|
$
|
12.7
|
|
|
$
|
4.9
|
|
|
$
|
0.8
|
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||
|
2013
|
|
2012
|
||||||||||||||||||||
|
Pension
|
|
Other Post
Retirement
|
|
Pension
|
|
Other Post
Retirement
|
||||||||||||||||
(In millions)
|
U.S.
|
|
Non-U.S.
|
|
|
U.S.
|
|
Non-U.S.
|
|
||||||||||||||
Service cost
|
$
|
18.9
|
|
|
$
|
8.2
|
|
|
$
|
0.1
|
|
|
$
|
16.1
|
|
|
$
|
6.7
|
|
|
$
|
0.1
|
|
Interest cost
|
38.9
|
|
|
15.3
|
|
|
1.6
|
|
|
42.0
|
|
|
16.1
|
|
|
1.9
|
|
||||||
Expected return on plan assets
|
(51.0
|
)
|
|
(10.4
|
)
|
|
—
|
|
|
(47.4
|
)
|
|
(11.1
|
)
|
|
—
|
|
||||||
Amortization of prior service cost
|
0.6
|
|
|
—
|
|
|
—
|
|
|
0.6
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of net deferred actuarial loss
|
28.5
|
|
|
5.9
|
|
|
0.4
|
|
|
26.7
|
|
|
3.5
|
|
|
0.5
|
|
||||||
Net periodic benefit cost
|
$
|
35.9
|
|
|
$
|
19.0
|
|
|
$
|
2.1
|
|
|
$
|
38.0
|
|
|
$
|
15.2
|
|
|
$
|
2.5
|
|
(In millions)
|
September 30,
2013 |
|
December 31,
2012 |
||||
Other Current Liabilities
|
|
|
|
||||
Accrued compensation
|
$
|
74.2
|
|
|
$
|
84.5
|
|
Income tax payable
|
29.0
|
|
|
44.8
|
|
||
Customer volume rebates
|
33.5
|
|
|
32.5
|
|
||
Pension liabilities
|
14.3
|
|
|
14.0
|
|
||
Accrued Chapter 11 reorganization expenses
|
6.4
|
|
|
6.6
|
|
||
Accrued commissions
|
6.4
|
|
|
12.9
|
|
||
Restructuring liability
|
5.2
|
|
|
3.0
|
|
||
Fair value of currency forward and commodity contracts
|
11.3
|
|
|
5.5
|
|
||
Deferred tax liability
|
0.6
|
|
|
0.6
|
|
||
Other accrued liabilities
|
108.4
|
|
|
102.9
|
|
||
|
$
|
289.3
|
|
|
$
|
307.3
|
|
•
|
Product warranties with respect to certain products sold to customers in the ordinary course of business. These warranties typically provide that products will conform to specifications. Grace generally does not establish a liability for product warranty based on a percentage of sales or other formula. Grace accrues a warranty liability on a transaction-specific basis depending on the individual facts and circumstances related to each sale. Both the liability and annual expense related to product warranties are immaterial to the Consolidated Financial Statements.
|
•
|
Licenses of intellectual property by Grace to third parties in which Grace has agreed to indemnify the licensee against third party infringement claims.
|
•
|
Contracts providing for the sale of a former business unit or product line in which Grace has agreed to indemnify the buyer against liabilities arising prior to the closing of the transaction, including environmental liabilities.
|
•
|
Guarantees of real property lease obligations of third parties, typically arising out of (a) leases entered into by former subsidiaries of Grace, or (b) the assignment or sublease of a lease by Grace to a third party.
|
Restructuring Expenses and Related Asset Impairments
(In millions)
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
2013
|
|
2012
|
|
2013
|
|
2012
|
|||||||||
Severance and other employee related costs
|
$
|
1.5
|
|
|
$
|
0.5
|
|
|
$
|
5.7
|
|
|
$
|
5.4
|
|
Asset impairments and other restructuring costs
|
2.1
|
|
|
0.6
|
|
|
3.0
|
|
|
1.0
|
|
||||
Total restructuring expenses and related asset impairments
|
$
|
3.6
|
|
|
$
|
1.1
|
|
|
$
|
8.7
|
|
|
$
|
6.4
|
|
Restructuring Liability
(In millions)
|
Total
|
||
Balance, December 31, 2012
|
$
|
3.0
|
|
Accruals for severance and other costs
|
6.0
|
|
|
Payments
|
(3.8
|
)
|
|
Balance, September 30, 2013
|
$
|
5.2
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(In millions)
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Translation effects—intercompany loans
|
$
|
(10.1
|
)
|
|
$
|
(5.2
|
)
|
|
$
|
(6.6
|
)
|
|
$
|
2.3
|
|
Value of currency forward contracts—intercompany loans
|
9.9
|
|
|
4.7
|
|
|
5.7
|
|
|
(4.0
|
)
|
||||
Currency transaction loss in Venezuela
|
—
|
|
|
—
|
|
|
8.5
|
|
|
—
|
|
||||
Other currency transaction effects
|
1.5
|
|
|
(0.1
|
)
|
|
3.0
|
|
|
0.5
|
|
||||
Interest income of non-Debtor subsidiaries
|
(0.2
|
)
|
|
(0.3
|
)
|
|
(0.5
|
)
|
|
(0.7
|
)
|
||||
Net (gain) loss on sales of investments and disposals of assets
|
1.1
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
||||
Other miscellaneous income
|
(1.5
|
)
|
|
(2.3
|
)
|
|
(5.0
|
)
|
|
(4.4
|
)
|
||||
Total other (income) expense, net
|
$
|
0.7
|
|
|
$
|
(3.2
|
)
|
|
$
|
5.1
|
|
|
$
|
(6.0
|
)
|
Three Months Ended September 30, 2013
(In millions)
|
Pre-Tax
Amount
|
|
Tax Benefit/
(Expense)
|
|
After-Tax
Amount
|
||||||
Defined benefit pension and other postretirement plans:
|
|
|
|
|
|
||||||
Amortization of net prior service cost included in net periodic benefit cost
|
$
|
0.2
|
|
|
$
|
(0.2
|
)
|
|
$
|
—
|
|
Amortization of net deferred actuarial loss included in net periodic benefit cost
|
11.5
|
|
|
(3.8
|
)
|
|
7.7
|
|
|||
Other changes in funded status
|
33.5
|
|
|
(12.4
|
)
|
|
21.1
|
|
|||
Benefit plans, net
|
45.2
|
|
|
(16.4
|
)
|
|
28.8
|
|
|||
Currency translation adjustments
|
5.0
|
|
|
—
|
|
|
5.0
|
|
|||
Gain from hedging activities
|
0.1
|
|
|
(0.1
|
)
|
|
—
|
|
|||
Other comprehensive income attributable to W. R. Grace & Co. shareholders
|
$
|
50.3
|
|
|
$
|
(16.5
|
)
|
|
$
|
33.8
|
|
Nine Months Ended September 30, 2013
(In millions)
|
Pre-Tax
Amount
|
|
Tax Benefit/
(Expense)
|
|
After-Tax
Amount
|
||||||
Defined benefit pension and other postretirement plans:
|
|
|
|
|
|
||||||
Amortization of net prior service cost included in net periodic benefit cost
|
$
|
0.6
|
|
|
$
|
(0.3
|
)
|
|
$
|
0.3
|
|
Amortization of net deferred actuarial loss included in net periodic benefit cost
|
34.8
|
|
|
(11.7
|
)
|
|
23.1
|
|
|||
Other changes in funded status
|
116.6
|
|
|
(41.7
|
)
|
|
74.9
|
|
|||
Benefit plans, net
|
152.0
|
|
|
(53.7
|
)
|
|
98.3
|
|
|||
Currency translation adjustments
|
(18.3
|
)
|
|
—
|
|
|
(18.3
|
)
|
|||
Loss from hedging activities
|
(0.6
|
)
|
|
0.2
|
|
|
(0.4
|
)
|
|||
Other comprehensive income attributable to W. R. Grace & Co. shareholders
|
$
|
133.1
|
|
|
$
|
(53.5
|
)
|
|
$
|
79.6
|
|
Three Months Ended September 30, 2012
(In millions)
|
Pre-Tax
Amount
|
|
Tax Benefit/
(Expense)
|
|
After-Tax
Amount
|
||||||
Defined benefit pension and other postretirement plans:
|
|
|
|
|
|
||||||
Amortization of net prior service cost included in net periodic benefit cost
|
$
|
0.2
|
|
|
$
|
(0.1
|
)
|
|
$
|
0.1
|
|
Amortization of net deferred actuarial loss included in net periodic benefit cost
|
10.2
|
|
|
(3.5
|
)
|
|
6.7
|
|
|||
Other changes in funded status
|
(28.4
|
)
|
|
8.6
|
|
|
(19.8
|
)
|
|||
Benefit plans, net
|
(18.0
|
)
|
|
5.0
|
|
|
(13.0
|
)
|
|||
Currency translation adjustments
|
14.5
|
|
|
—
|
|
|
14.5
|
|
|||
Gain from hedging activities
|
2.3
|
|
|
(0.8
|
)
|
|
1.5
|
|
|||
Other comprehensive income (loss) attributable to W. R. Grace & Co. shareholders
|
$
|
(1.2
|
)
|
|
$
|
4.2
|
|
|
$
|
3.0
|
|
Nine Months Ended September 30, 2012
(In millions)
|
Pre-Tax
Amount
|
|
Tax Benefit/
(Expense)
|
|
After-Tax
Amount
|
||||||
Defined benefit pension and other postretirement plans:
|
|
|
|
|
|
||||||
Amortization of net prior service cost included in net periodic benefit cost
|
$
|
0.6
|
|
|
$
|
(0.2
|
)
|
|
$
|
0.4
|
|
Amortization of net deferred actuarial loss included in net periodic benefit cost
|
30.7
|
|
|
(10.5
|
)
|
|
20.2
|
|
|||
Other changes in funded status
|
(88.8
|
)
|
|
27.9
|
|
|
(60.9
|
)
|
|||
Benefit plans, net
|
(57.5
|
)
|
|
17.2
|
|
|
(40.3
|
)
|
|||
Currency translation adjustments
|
5.1
|
|
|
—
|
|
|
5.1
|
|
|||
Gain from hedging activities
|
4.6
|
|
|
(1.6
|
)
|
|
3.0
|
|
|||
Other comprehensive loss attributable to W. R. Grace & Co. shareholders
|
$
|
(47.8
|
)
|
|
$
|
15.6
|
|
|
$
|
(32.2
|
)
|
Nine Months Ended September 30, 2013
(In millions)
|
Defined Benefit Pension and Other Postretirement Plans
|
|
Currency Translation Adjustments
|
|
Gains and Losses from Hedging Activities
|
|
Unrealized Loss on Investment
|
|
Total
|
||||||||||
Beginning balance
|
$
|
(641.8
|
)
|
|
$
|
35.6
|
|
|
$
|
(0.3
|
)
|
|
$
|
(0.8
|
)
|
|
$
|
(607.3
|
)
|
Other comprehensive income (loss) before reclassifications
|
74.9
|
|
|
(18.3
|
)
|
|
0.4
|
|
|
—
|
|
|
57.0
|
|
|||||
Amounts reclassified from accumulated other comprehensive loss
|
23.4
|
|
|
—
|
|
|
(0.8
|
)
|
|
—
|
|
|
22.6
|
|
|||||
Net current-period other comprehensive income (loss)
|
98.3
|
|
|
(18.3
|
)
|
|
(0.4
|
)
|
|
—
|
|
|
79.6
|
|
|||||
Ending balance
|
$
|
(543.5
|
)
|
|
$
|
17.3
|
|
|
$
|
(0.7
|
)
|
|
$
|
(0.8
|
)
|
|
$
|
(527.7
|
)
|
Nine Months Ended September 30, 2012
(In millions)
|
Defined Benefit Pension and Other Postretirement Plans
|
|
Currency Translation Adjustments
|
|
Gains and Losses from Hedging Activities
|
|
Unrealized Loss on Investment
|
|
Total
|
||||||||||
Beginning balance
|
$
|
(605.2
|
)
|
|
$
|
30.2
|
|
|
$
|
(2.7
|
)
|
|
$
|
(0.8
|
)
|
|
$
|
(578.5
|
)
|
Other comprehensive income (loss) before reclassifications
|
(60.9
|
)
|
|
5.1
|
|
|
(0.4
|
)
|
|
—
|
|
|
(56.2
|
)
|
|||||
Amounts reclassified from accumulated other comprehensive loss
|
20.6
|
|
|
—
|
|
|
3.4
|
|
|
—
|
|
|
24.0
|
|
|||||
Net current-period other comprehensive income (loss)
|
(40.3
|
)
|
|
5.1
|
|
|
3.0
|
|
|
—
|
|
|
(32.2
|
)
|
|||||
Ending balance
|
$
|
(645.5
|
)
|
|
$
|
35.3
|
|
|
$
|
0.3
|
|
|
$
|
(0.8
|
)
|
|
$
|
(610.7
|
)
|
Three Months Ended September 30, 2013
(In millions)
|
|
Amount of Gain or (Loss) Reclassified From Accumulated OCI
|
|
Location of Gain or (Loss) Reclassified from Accumulated OCI into Income
|
||
Defined benefit pension and other postretirement plans:
|
|
|
|
|
||
Amortization of net prior service cost
|
|
$
|
(0.2
|
)
|
|
Defined benefit pension expense
|
Amortization of net deferred actuarial loss
|
|
(11.5
|
)
|
|
Defined benefit pension expense
|
|
Total before tax
|
|
(11.7
|
)
|
|
|
|
Tax (expense) benefit
|
|
4.0
|
|
|
|
|
Net of tax
|
|
$
|
(7.7
|
)
|
|
|
|
|
|
|
|
||
Gain (loss) from hedging activities
|
|
|
|
|
||
Currency contracts
|
|
$
|
0.5
|
|
|
Other income (expense)
|
Currency contracts
|
|
(0.1
|
)
|
|
Cost of goods sold
|
|
Commodity contracts
|
|
(0.3
|
)
|
|
Cost of goods sold
|
|
Total before tax
|
|
0.1
|
|
|
|
|
Tax (expense) benefit
|
|
—
|
|
|
|
|
Net of tax
|
|
0.1
|
|
|
|
|
Total reclassifications for the period, net of tax
|
|
$
|
(7.6
|
)
|
|
|
Nine Months Ended September 30, 2013
(In millions)
|
|
Amount of Gain or (Loss) Reclassified From Accumulated OCI
|
|
Location of Gain or (Loss) Reclassified from Accumulated OCI into Income
|
||
Defined benefit pension and other postretirement plans:
|
|
|
|
|
||
Amortization of net prior service cost
|
|
$
|
(0.6
|
)
|
|
Defined benefit pension expense
|
Amortization of net deferred actuarial loss
|
|
(34.8
|
)
|
|
Defined benefit pension expense
|
|
Total before tax
|
|
(35.4
|
)
|
|
|
|
Tax (expense) benefit
|
|
12.0
|
|
|
|
|
Net of tax
|
|
$
|
(23.4
|
)
|
|
|
|
|
|
|
|
||
Gain (loss) from hedging activities
|
|
|
|
|
||
Currency contracts
|
|
$
|
1.3
|
|
|
Other income (expense)
|
Currency contracts
|
|
(0.2
|
)
|
|
Cost of goods sold
|
|
Commodity contracts
|
|
(0.1
|
)
|
|
Cost of goods sold
|
|
Total before tax
|
|
1.0
|
|
|
|
|
Tax (expense) benefit
|
|
(0.2
|
)
|
|
|
|
Net of tax
|
|
0.8
|
|
|
|
|
Total reclassifications for the period, net of tax
|
|
$
|
(22.6
|
)
|
|
|
Three Months Ended September 30, 2012
(In millions)
|
|
Amount of Gain or (Loss) Reclassified From Accumulated OCI
|
|
Location of Gain or (Loss) Reclassified from Accumulated OCI into Income
|
||
Defined benefit pension and other postretirement plans:
|
|
|
|
|
||
Amortization of net prior service cost
|
|
$
|
(0.2
|
)
|
|
Defined benefit pension expense
|
Amortization of net deferred actuarial loss
|
|
(10.2
|
)
|
|
Defined benefit pension expense
|
|
Total before tax
|
|
(10.4
|
)
|
|
|
|
Tax (expense) benefit
|
|
3.6
|
|
|
|
|
Net of tax
|
|
$
|
(6.8
|
)
|
|
|
|
|
|
|
|
||
Gain (loss) from hedging activities
|
|
|
|
|
||
Currency contracts
|
|
$
|
0.6
|
|
|
Cost of goods sold
|
Commodity contracts
|
|
(1.3
|
)
|
|
Cost of goods sold
|
|
Total before tax
|
|
(0.7
|
)
|
|
|
|
Tax (expense) benefit
|
|
0.3
|
|
|
|
|
Net of tax
|
|
(0.4
|
)
|
|
|
|
Total reclassifications for the period, net of tax
|
|
$
|
(7.2
|
)
|
|
|
Nine Months Ended September 30, 2012
(In millions)
|
|
Amount of Gain or (Loss) Reclassified From Accumulated OCI
|
|
Location of Gain or (Loss) Reclassified from Accumulated OCI into Income
|
||
Defined benefit pension and other postretirement plans:
|
|
|
|
|
||
Amortization of net prior service cost
|
|
$
|
(0.6
|
)
|
|
Defined benefit pension expense
|
Amortization of net deferred actuarial loss
|
|
(30.7
|
)
|
|
Defined benefit pension expense
|
|
Total before tax
|
|
(31.3
|
)
|
|
|
|
Tax (expense) benefit
|
|
10.7
|
|
|
|
|
Net of tax
|
|
$
|
(20.6
|
)
|
|
|
|
|
|
|
|
||
Gain (loss) from hedging activities
|
|
|
|
|
||
Currency contracts
|
|
$
|
0.4
|
|
|
Cost of goods sold
|
Commodity contracts
|
|
(5.7
|
)
|
|
Cost of goods sold
|
|
Total before tax
|
|
(5.3
|
)
|
|
|
|
Tax (expense) benefit
|
|
1.9
|
|
|
|
|
Net of tax
|
|
(3.4
|
)
|
|
|
|
Total reclassifications for the period, net of tax
|
|
$
|
(24.0
|
)
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(In millions, except per share amounts)
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Numerators
|
|
|
|
|
|
|
|
||||||||
Net income attributable to W. R. Grace & Co. shareholders
|
$
|
69.4
|
|
|
$
|
75.5
|
|
|
$
|
205.1
|
|
|
$
|
205.7
|
|
Denominators
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares—basic calculation
|
76.7
|
|
|
75.0
|
|
|
76.2
|
|
|
74.7
|
|
||||
Dilutive effect of employee stock options
|
1.2
|
|
|
1.4
|
|
|
1.4
|
|
|
1.5
|
|
||||
Weighted average common shares—diluted calculation
|
77.9
|
|
|
76.4
|
|
|
77.6
|
|
|
76.2
|
|
||||
Basic earnings per share
|
$
|
0.90
|
|
|
$
|
1.01
|
|
|
$
|
2.69
|
|
|
$
|
2.75
|
|
Diluted earnings per share
|
$
|
0.89
|
|
|
$
|
0.99
|
|
|
$
|
2.64
|
|
|
$
|
2.70
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(In millions)
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Net Sales
|
|
|
|
|
|
|
|
||||||||
Catalysts Technologies
|
$
|
273.7
|
|
|
$
|
298.9
|
|
|
$
|
831.1
|
|
|
$
|
939.7
|
|
Materials Technologies
|
220.1
|
|
|
214.4
|
|
|
663.7
|
|
|
652.6
|
|
||||
Construction Products
|
277.5
|
|
|
263.3
|
|
|
789.2
|
|
|
765.4
|
|
||||
Total
|
$
|
771.3
|
|
|
$
|
776.6
|
|
|
$
|
2,284.0
|
|
|
$
|
2,357.7
|
|
Adjusted EBIT
|
|
|
|
|
|
|
|
||||||||
Catalysts Technologies segment operating income
|
$
|
77.4
|
|
|
$
|
92.0
|
|
|
$
|
248.4
|
|
|
$
|
291.2
|
|
Materials Technologies segment operating income
|
46.8
|
|
|
39.8
|
|
|
135.9
|
|
|
122.3
|
|
||||
Construction Products segment operating income
|
45.6
|
|
|
36.7
|
|
|
113.7
|
|
|
92.7
|
|
||||
Corporate costs
|
(20.9
|
)
|
|
(21.8
|
)
|
|
(65.4
|
)
|
|
(69.0
|
)
|
||||
Defined benefit pension expense
|
(18.2
|
)
|
|
(17.6
|
)
|
|
(54.9
|
)
|
|
(53.2
|
)
|
||||
Total
|
$
|
130.7
|
|
|
$
|
129.1
|
|
|
$
|
377.7
|
|
|
$
|
384.0
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(In millions)
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Grace Adjusted EBIT
|
$
|
130.7
|
|
|
$
|
129.1
|
|
|
$
|
377.7
|
|
|
$
|
384.0
|
|
Costs related to Chapter 11
|
(3.9
|
)
|
|
(3.7
|
)
|
|
(11.0
|
)
|
|
(11.1
|
)
|
||||
Asbestos-related costs
|
(2.5
|
)
|
|
(2.0
|
)
|
|
(6.7
|
)
|
|
(25.0
|
)
|
||||
Restructuring expenses and related asset impairments
|
(3.6
|
)
|
|
(1.1
|
)
|
|
(8.7
|
)
|
|
(6.4
|
)
|
||||
Certain costs related to divested businesses
|
(1.0
|
)
|
|
(0.2
|
)
|
|
(1.0
|
)
|
|
(0.4
|
)
|
||||
Interest expense and related financing costs
|
(10.7
|
)
|
|
(11.5
|
)
|
|
(32.1
|
)
|
|
(34.1
|
)
|
||||
Currency transaction loss on cash in Venezuela
|
—
|
|
|
—
|
|
|
(6.9
|
)
|
|
—
|
|
||||
Interest income of non-Debtor subsidiaries
|
0.2
|
|
|
0.3
|
|
|
0.5
|
|
|
0.7
|
|
||||
Net income attributable to noncontrolling interests
|
0.3
|
|
|
0.5
|
|
|
1.1
|
|
|
1.3
|
|
||||
Income before income taxes
|
$
|
109.5
|
|
|
$
|
111.4
|
|
|
$
|
312.9
|
|
|
$
|
309.0
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(In millions)
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Net Sales
|
|
|
|
|
|
|
|
||||||||
United States
|
$
|
227.6
|
|
|
$
|
222.6
|
|
|
$
|
668.7
|
|
|
$
|
663.7
|
|
Canada and Puerto Rico
|
20.5
|
|
|
23.2
|
|
|
54.0
|
|
|
68.0
|
|
||||
Total North America
|
248.1
|
|
|
245.8
|
|
|
722.7
|
|
|
731.7
|
|
||||
Europe Middle East Africa
|
273.7
|
|
|
276.9
|
|
|
816.2
|
|
|
879.8
|
|
||||
Asia Pacific
|
155.0
|
|
|
160.4
|
|
|
478.7
|
|
|
490.1
|
|
||||
Latin America
|
94.5
|
|
|
93.5
|
|
|
266.4
|
|
|
256.1
|
|
||||
Total
|
$
|
771.3
|
|
|
$
|
776.6
|
|
|
$
|
2,284.0
|
|
|
$
|
2,357.7
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(In millions)
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Grace sales of catalysts to ART
|
$
|
69.2
|
|
|
$
|
53.4
|
|
|
$
|
174.2
|
|
|
$
|
153.1
|
|
Charges for fixed costs, research and development and selling, general and administrative services to ART
|
7.0
|
|
|
7.2
|
|
|
22.5
|
|
|
22.3
|
|
Statements of Operations
(In millions)
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
2013
|
|
2012
|
|
2013
|
|
2012
|
|||||||||
Sales
|
$
|
24.1
|
|
|
$
|
25.3
|
|
|
$
|
78.0
|
|
|
$
|
77.0
|
|
Income before taxes
|
4.8
|
|
|
1.8
|
|
|
5.8
|
|
|
5.9
|
|
||||
Net income
|
3.6
|
|
|
1.5
|
|
|
4.8
|
|
|
5.0
|
|
||||
Noncontrolling interests in net income
|
0.3
|
|
|
0.5
|
|
|
1.1
|
|
|
1.3
|
|
Balance Sheets
(In millions)
|
September 30,
2013 |
|
December 31,
2012 |
||||
Cash
|
$
|
10.6
|
|
|
$
|
5.7
|
|
Other current assets
|
35.8
|
|
|
41.6
|
|
||
Total assets
|
78.6
|
|
|
73.8
|
|
||
Total liabilities
|
53.0
|
|
|
47.2
|
|
||
Shareholders' equity
|
25.6
|
|
|
26.6
|
|
||
Noncontrolling interests in shareholders' equity
|
10.1
|
|
|
9.9
|
|
•
|
Net sales decreased
0.7%
to
$771.3 million
.
|
•
|
Adjusted EBIT increased
1.2%
to
$130.7 million
.
|
•
|
Grace net income decreased
8.1%
to
$69.4 million
or
$0.89
per diluted share. Adjusted EPS increased
2.9%
to
$1.07
per diluted share.
|
•
|
Adjusted EBIT Return On Invested Capital was
33.8%
on a trailing four quarters basis compared with
34.6%
in the prior year.
|
•
|
Fluid catalytic cracking, or FCC, catalysts, that help to "crack" the hydrocarbon chain in distilled crude oil to produce transportation fuels, such as gasoline and diesel fuels, and other petroleum-based products; and FCC additives used to reduce sulfur in gasoline, maximize propylene production from refinery FCC units, and reduce emissions of sulfur oxides, nitrogen oxides and carbon monoxide from refinery FCC units;
|
•
|
Hydroprocessing catalysts, most of which are marketed through our ART joint venture with Chevron Products Company in which we hold a 50% economic interest, that are used in process reactors to upgrade heavy oils into lighter, more useful products by removing impurities such as nitrogen, sulfur and heavy metals, allowing less expensive feedstocks to be used in the petroleum refining process (ART is not consolidated in our financial statements, so ART's sales are excluded from our sales); and
|
•
|
Polyolefin catalysts and catalyst supports, for the production of polypropylene and polyethylene thermoplastic resins, which can be customized to enhance the performance of a wide range of industrial and consumer end-use applications including high pressure pipe, geomembranes, food packaging, automotive parts, medical devices, and textiles; and chemical catalysts used in a variety of industrial, environmental and consumer applications.
|
•
|
Engineered materials, including silica-based and silica-alumina-based materials, used in:
|
•
|
Coatings and print media applications, consisting of functional additives that provide matting effects and corrosion protection for industrial and consumer coatings, enable enhanced
|
•
|
Consumer applications, as a free-flow agent, carrier or processing aid in food and personal care products; as a toothpaste abrasive and thickener; and for the processing and stabilization of edible oils and beverages;
|
•
|
Industrial applications, such as tires and rubber, precision investment casting, refractory, insulating glass windows, biofuels, and drying applications, fulfilling various functions such as reinforcement, high temperature binding and moisture scavenging;
|
•
|
Pharmaceutical, life science, and related applications such as silica-based separation media and excipients and pharmaceutical intermediates combined with complementary purification products including chromatography columns and consumables, and CO
2
adsorbents used in anesthesiology and mine safety applications; and
|
•
|
Packaging materials, including can and closure sealants used to seal and enhance the shelf life of can and bottle contents; coatings for cans and closures that prevent metal corrosion, protect package contents from the influence of metal and ensure proper adhesion of sealing compounds; and scavenging technologies designed to reduce off-taste and extend the shelf-life of packaged products.
|
•
|
Construction chemicals including concrete admixtures and fibers used to modify the rheology, improve the durability and enhance various other properties of concrete, mortar, masonry and other cementitious construction materials; and additives used in cement processing to improve energy efficiency in manufacturing, enhance the characteristics of finished cement and improve ease of use; and
|
•
|
Building materials used in both new construction and renovation/repair projects. The products protect buildings and civil engineering structures from water, vapor and air penetration. The portfolio includes waterproofing membranes for commercial and residential buildings, specialty grouts for use in waterproofing and soil stabilization applications, air and vapor barriers, and other products to solve the specialized needs of preventative and repair applications.
|
Analysis of Operations
(In millions, except per share amounts)
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||
2013
|
|
2012
|
|
% Change
|
|
2013
|
|
2012
|
|
% Change
|
|||||||||||
Net sales:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Catalysts Technologies
|
$
|
273.7
|
|
|
$
|
298.9
|
|
|
(8.4
|
)%
|
|
$
|
831.1
|
|
|
$
|
939.7
|
|
|
(11.6
|
)%
|
Materials Technologies
|
220.1
|
|
|
214.4
|
|
|
2.7
|
%
|
|
663.7
|
|
|
652.6
|
|
|
1.7
|
%
|
||||
Construction Products
|
277.5
|
|
|
263.3
|
|
|
5.4
|
%
|
|
789.2
|
|
|
765.4
|
|
|
3.1
|
%
|
||||
Total Grace net sales
|
$
|
771.3
|
|
|
$
|
776.6
|
|
|
(0.7
|
)%
|
|
$
|
2,284.0
|
|
|
$
|
2,357.7
|
|
|
(3.1
|
)%
|
Net sales by region:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
North America
|
$
|
248.1
|
|
|
$
|
245.8
|
|
|
0.9
|
%
|
|
$
|
722.7
|
|
|
$
|
731.7
|
|
|
(1.2
|
)%
|
Europe Middle East Africa
|
273.7
|
|
|
276.9
|
|
|
(1.2
|
)%
|
|
816.2
|
|
|
879.8
|
|
|
(7.2
|
)%
|
||||
Asia Pacific
|
155.0
|
|
|
160.4
|
|
|
(3.4
|
)%
|
|
478.7
|
|
|
490.1
|
|
|
(2.3
|
)%
|
||||
Latin America
|
94.5
|
|
|
93.5
|
|
|
1.1
|
%
|
|
266.4
|
|
|
256.1
|
|
|
4.0
|
%
|
||||
Total net sales by region
|
$
|
771.3
|
|
|
$
|
776.6
|
|
|
(0.7
|
)%
|
|
$
|
2,284.0
|
|
|
$
|
2,357.7
|
|
|
(3.1
|
)%
|
Profitability performance measures:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted EBIT(A)(B):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Catalysts Technologies segment operating income
|
$
|
77.4
|
|
|
$
|
92.0
|
|
|
(15.9
|
)%
|
|
$
|
248.4
|
|
|
$
|
291.2
|
|
|
(14.7
|
)%
|
Materials Technologies segment operating income
|
46.8
|
|
|
39.8
|
|
|
17.6
|
%
|
|
135.9
|
|
|
122.3
|
|
|
11.1
|
%
|
||||
Construction Products segment operating income
|
45.6
|
|
|
36.7
|
|
|
24.3
|
%
|
|
113.7
|
|
|
92.7
|
|
|
22.7
|
%
|
||||
Corporate support functions
|
(15.6
|
)
|
|
(16.0
|
)
|
|
2.5
|
%
|
|
(49.2
|
)
|
|
(50.8
|
)
|
|
3.1
|
%
|
||||
Other corporate costs (including non-asbestos environmental remediation)
|
(5.3
|
)
|
|
(5.8
|
)
|
|
8.6
|
%
|
|
(16.2
|
)
|
|
(18.2
|
)
|
|
11.0
|
%
|
||||
Defined benefit pension expense(B)
|
(18.2
|
)
|
|
(17.6
|
)
|
|
(3.4
|
)%
|
|
(54.9
|
)
|
|
(53.2
|
)
|
|
(3.2
|
)%
|
||||
Adjusted EBIT
|
130.7
|
|
|
129.1
|
|
|
1.2
|
%
|
|
377.7
|
|
|
384.0
|
|
|
(1.6
|
)%
|
||||
Costs related to Chapter 11
|
(3.9
|
)
|
|
(3.7
|
)
|
|
(5.4
|
)%
|
|
(11.0
|
)
|
|
(11.1
|
)
|
|
0.9
|
%
|
||||
Asbestos-related costs
|
(2.5
|
)
|
|
(2.0
|
)
|
|
(25.0
|
)%
|
|
(6.7
|
)
|
|
(25.0
|
)
|
|
73.2
|
%
|
||||
Restructuring expenses and related asset impairments
|
(3.6
|
)
|
|
(1.1
|
)
|
|
NM
|
|
|
(8.7
|
)
|
|
(6.4
|
)
|
|
(35.9
|
)%
|
||||
Certain costs related to divested businesses
|
(1.0
|
)
|
|
(0.2
|
)
|
|
NM
|
|
|
(1.0
|
)
|
|
(0.4
|
)
|
|
(150.0
|
)%
|
||||
Interest expense and related financing costs
|
(10.7
|
)
|
|
(11.5
|
)
|
|
7.0
|
%
|
|
(32.1
|
)
|
|
(34.1
|
)
|
|
5.9
|
%
|
||||
Currency transaction loss on cash in Venezuela
|
—
|
|
|
—
|
|
|
—
|
%
|
|
(6.9
|
)
|
|
—
|
|
|
NM
|
|
||||
Interest income of non-Debtor subsidiaries
|
0.2
|
|
|
0.3
|
|
|
(33.3
|
)%
|
|
0.5
|
|
|
0.7
|
|
|
(28.6
|
)%
|
||||
Provision for income taxes
|
(39.8
|
)
|
|
(35.4
|
)
|
|
(12.4
|
)%
|
|
(106.7
|
)
|
|
(102.0
|
)
|
|
(4.6
|
)%
|
||||
Net income attributable to W. R. Grace & Co. shareholders
|
$
|
69.4
|
|
|
$
|
75.5
|
|
|
(8.1
|
)%
|
|
$
|
205.1
|
|
|
$
|
205.7
|
|
|
(0.3
|
)%
|
Diluted EPS (GAAP)
|
$
|
0.89
|
|
|
$
|
0.99
|
|
|
(10.1
|
)%
|
|
$
|
2.64
|
|
|
$
|
2.70
|
|
|
(2.2
|
)%
|
Adjusted EPS (non-GAAP)
|
$
|
1.07
|
|
|
$
|
1.04
|
|
|
2.9
|
%
|
|
$
|
3.00
|
|
|
$
|
3.07
|
|
|
(2.3
|
)%
|
Analysis of Operations
(In millions)
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||
2013
|
|
2012
|
|
% Change
|
|
2013
|
|
2012
|
|
% Change
|
|||||||||||
Profitability performance measures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Gross margin:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Catalysts Technologies
|
39.2
|
%
|
|
40.5
|
%
|
|
(1.3) pts
|
|
|
40.5
|
%
|
|
41.0
|
%
|
|
(0.5) pts
|
|
||||
Materials Technologies
|
34.8
|
%
|
|
32.8
|
%
|
|
2.0 pts
|
|
|
34.5
|
%
|
|
32.7
|
%
|
|
1.8 pts
|
|
||||
Construction Products
|
36.3
|
%
|
|
35.4
|
%
|
|
0.9 pts
|
|
|
36.2
|
%
|
|
34.9
|
%
|
|
1.3 pts
|
|
||||
Total Grace
|
36.9
|
%
|
|
36.7
|
%
|
|
0.2 pts
|
|
|
37.3
|
%
|
|
36.7
|
%
|
|
0.6 pts
|
|
||||
Operating margin:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Catalysts Technologies
|
28.3
|
%
|
|
30.8
|
%
|
|
(2.5) pts
|
|
|
29.9
|
%
|
|
31.0
|
%
|
|
(1.1) pts
|
|
||||
Materials Technologies
|
21.3
|
%
|
|
18.6
|
%
|
|
2.7 pts
|
|
|
20.5
|
%
|
|
18.7
|
%
|
|
1.8 pts
|
|
||||
Construction Products
|
16.4
|
%
|
|
13.9
|
%
|
|
2.5 pts
|
|
|
14.4
|
%
|
|
12.1
|
%
|
|
2.3 pts
|
|
||||
Total Grace
|
16.9
|
%
|
|
16.6
|
%
|
|
0.3 pts
|
|
|
16.5
|
%
|
|
16.3
|
%
|
|
0.2 pts
|
|
||||
Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Adjusted EBIT:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Catalysts Technologies
|
$
|
77.4
|
|
|
$
|
92.0
|
|
|
(15.9
|
)%
|
|
$
|
248.4
|
|
|
$
|
291.2
|
|
|
(14.7
|
)%
|
Materials Technologies
|
46.8
|
|
|
39.8
|
|
|
17.6
|
%
|
|
135.9
|
|
|
122.3
|
|
|
11.1
|
%
|
||||
Construction Products
|
45.6
|
|
|
36.7
|
|
|
24.3
|
%
|
|
113.7
|
|
|
92.7
|
|
|
22.7
|
%
|
||||
Corporate
|
(39.1
|
)
|
|
(39.4
|
)
|
|
0.8
|
%
|
|
(120.3
|
)
|
|
(122.2
|
)
|
|
1.6
|
%
|
||||
Total Grace
|
130.7
|
|
|
129.1
|
|
|
1.2
|
%
|
|
377.7
|
|
|
384.0
|
|
|
(1.6
|
)%
|
||||
Depreciation and amortization:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Catalysts Technologies
|
$
|
13.2
|
|
|
$
|
13.3
|
|
|
(0.8
|
)%
|
|
$
|
40.0
|
|
|
$
|
40.5
|
|
|
(1.2
|
)%
|
Materials Technologies
|
7.8
|
|
|
7.3
|
|
|
6.8
|
%
|
|
23.6
|
|
|
22.1
|
|
|
6.8
|
%
|
||||
Construction Products
|
7.6
|
|
|
8.6
|
|
|
(11.6
|
)%
|
|
24.0
|
|
|
24.2
|
|
|
(0.8
|
)%
|
||||
Corporate
|
1.4
|
|
|
0.5
|
|
|
180.0
|
%
|
|
4.2
|
|
|
2.1
|
|
|
100.0
|
%
|
||||
Total Grace
|
30.0
|
|
|
29.7
|
|
|
1.0
|
%
|
|
91.8
|
|
|
88.9
|
|
|
3.3
|
%
|
||||
Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Catalysts Technologies
|
$
|
90.6
|
|
|
$
|
105.3
|
|
|
(14.0
|
)%
|
|
$
|
288.4
|
|
|
$
|
331.7
|
|
|
(13.1
|
)%
|
Materials Technologies
|
54.6
|
|
|
47.1
|
|
|
15.9
|
%
|
|
159.5
|
|
|
144.4
|
|
|
10.5
|
%
|
||||
Construction Products
|
53.2
|
|
|
45.3
|
|
|
17.4
|
%
|
|
137.7
|
|
|
116.9
|
|
|
17.8
|
%
|
||||
Corporate
|
(37.7
|
)
|
|
(38.9
|
)
|
|
3.1
|
%
|
|
(116.1
|
)
|
|
(120.1
|
)
|
|
3.3
|
%
|
||||
Total Grace
|
160.7
|
|
|
158.8
|
|
|
1.2
|
%
|
|
469.5
|
|
|
472.9
|
|
|
(0.7
|
)%
|
||||
Adjusted EBITDA margin:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Catalysts Technologies
|
33.1
|
%
|
|
35.2
|
%
|
|
(2.1) pts
|
|
|
34.7
|
%
|
|
35.3
|
%
|
|
(0.6) pts
|
|
||||
Materials Technologies
|
24.8
|
%
|
|
22.0
|
%
|
|
2.8 pts
|
|
|
24.0
|
%
|
|
22.1
|
%
|
|
1.9 pts
|
|
||||
Construction Products
|
19.2
|
%
|
|
17.2
|
%
|
|
2.0 pts
|
|
|
17.4
|
%
|
|
15.3
|
%
|
|
2.1 pts
|
|
||||
Total Grace
|
20.8
|
%
|
|
20.4
|
%
|
|
0.4 pts
|
|
|
20.6
|
%
|
|
20.1
|
%
|
|
0.5 pts
|
|
Analysis of Operations
(In millions)
|
Four Quarters Ended
September 30,
|
||||||
2013
|
|
2012
|
|||||
Calculation of Adjusted EBIT Return On Invested Capital (trailing four quarters):
|
|
|
|
||||
Adjusted EBIT
|
$
|
511.1
|
|
|
$
|
492.2
|
|
Invested Capital:
|
|
|
|
||||
Trade accounts receivable
|
483.9
|
|
|
483.4
|
|
||
Inventories
|
314.8
|
|
|
309.0
|
|
||
Accounts payable
|
(260.3
|
)
|
|
(253.2
|
)
|
||
|
538.4
|
|
|
539.2
|
|
||
Other current assets (excluding income taxes)
|
82.5
|
|
|
78.2
|
|
||
Properties and equipment, net
|
787.8
|
|
|
735.4
|
|
||
Goodwill
|
204.0
|
|
|
170.0
|
|
||
Investment in unconsolidated affiliate
|
90.8
|
|
|
81.2
|
|
||
Other assets
|
113.0
|
|
|
122.5
|
|
||
Other current liabilities (excluding income taxes, Chapter 11, and restructuring)
|
(248.1
|
)
|
|
(247.4
|
)
|
||
Other liabilities (including non-asbestos environmental remediation)
|
(57.1
|
)
|
|
(54.5
|
)
|
||
Total invested capital
|
$
|
1,511.3
|
|
|
$
|
1,424.6
|
|
Adjusted EBIT Return On Invested Capital
|
33.8
|
%
|
|
34.6
|
%
|
(A)
|
Grace's segment operating income includes only Grace's share of income of consolidated and unconsolidated joint ventures.
|
(B)
|
Defined benefit pension expense includes all defined benefit pension expense of Grace. Catalysts Technologies, Materials Technologies, and Construction Products segment operating income and corporate costs do not include amounts for defined benefit pension expense.
|
|
Three Months ended September 30, 2013
as a Percentage Increase (Decrease) from
Three Months Ended September 30, 2012
|
||||||||||
Net Sales Variance Analysis
|
Volume
|
|
Price
|
|
Currency
Translation
|
|
Total
|
||||
Catalysts Technologies
|
(3.6
|
)%
|
|
(6.6
|
)%
|
|
1.8
|
%
|
|
(8.4
|
)%
|
Materials Technologies
|
0.6
|
%
|
|
2.2
|
%
|
|
(0.1
|
)%
|
|
2.7
|
%
|
Construction Products
|
6.2
|
%
|
|
2.3
|
%
|
|
(3.1
|
)%
|
|
5.4
|
%
|
Net sales
|
0.9
|
%
|
|
(1.2
|
)%
|
|
(0.4
|
)%
|
|
(0.7
|
)%
|
By Region:
|
|
|
|
|
|
|
|
||||
North America
|
6.2
|
%
|
|
(4.6
|
)%
|
|
(0.7
|
)%
|
|
0.9
|
%
|
Europe Middle East Africa
|
(3.7
|
)%
|
|
(0.2
|
)%
|
|
2.7
|
%
|
|
(1.2
|
)%
|
Asia Pacific
|
(1.3
|
)%
|
|
(1.9
|
)%
|
|
(0.2
|
)%
|
|
(3.4
|
)%
|
Latin America
|
3.7
|
%
|
|
6.2
|
%
|
|
(8.8
|
)%
|
|
1.1
|
%
|
|
Nine Months ended September 30, 2013
as a Percentage Increase (Decrease) from
Nine Months Ended September 30, 2012
|
||||||||||
Net Sales Variance Analysis
|
Volume
|
|
Price
|
|
Currency
Translation
|
|
Total
|
||||
Catalysts Technologies
|
(1.8
|
)%
|
|
(9.9
|
)%
|
|
0.1
|
%
|
|
(11.6
|
)%
|
Materials Technologies
|
0.7
|
%
|
|
2.2
|
%
|
|
(1.2
|
)%
|
|
1.7
|
%
|
Construction Products
|
3.4
|
%
|
|
1.8
|
%
|
|
(2.1
|
)%
|
|
3.1
|
%
|
Net sales
|
0.7
|
%
|
|
(2.9
|
)%
|
|
(0.9
|
)%
|
|
(3.1
|
)%
|
By Region:
|
|
|
|
|
|
|
|
||||
North America
|
3.4
|
%
|
|
(4.7
|
)%
|
|
0.1
|
%
|
|
(1.2
|
)%
|
Europe Middle East Africa
|
(5.7
|
)%
|
|
(2.0
|
)%
|
|
0.5
|
%
|
|
(7.2
|
)%
|
Asia Pacific
|
3.7
|
%
|
|
(4.8
|
)%
|
|
(1.2
|
)%
|
|
(2.3
|
)%
|
Latin America
|
8.9
|
%
|
|
3.0
|
%
|
|
(7.9
|
)%
|
|
4.0
|
%
|
|
Three Months Ended September 30,
|
||||||||||||||||||||||||||||||
|
2013
|
|
2012
|
||||||||||||||||||||||||||||
(In millions, except per share amounts)
|
Pre-
Tax
|
|
Tax at
Actual
Rate
|
|
After-
Tax
|
|
Per
Share
|
|
Pre-
Tax
|
|
Tax at
Actual
Rate
|
|
After-
Tax
|
|
Per
Share
|
||||||||||||||||
Diluted Earnings Per Share (GAAP)
|
|
|
|
|
|
|
|
|
|
$
|
0.89
|
|
|
|
|
|
|
|
|
|
|
|
$
|
0.99
|
|
||||||
Costs related to Chapter 11
|
$
|
3.9
|
|
|
$
|
1.1
|
|
|
$
|
2.8
|
|
|
0.04
|
|
|
$
|
3.7
|
|
|
$
|
1.1
|
|
|
$
|
2.6
|
|
|
0.03
|
|
||
Asbestos-related costs
|
2.5
|
|
|
0.5
|
|
|
2.0
|
|
|
0.03
|
|
|
2.0
|
|
|
0.5
|
|
|
1.5
|
|
|
0.02
|
|
||||||||
Restructuring expenses and related asset impairments
|
3.6
|
|
|
1.2
|
|
|
2.4
|
|
|
0.03
|
|
|
1.1
|
|
|
0.3
|
|
|
0.8
|
|
|
0.01
|
|
||||||||
Loss on sale of divested businesses
|
1.0
|
|
|
0.4
|
|
|
0.6
|
|
|
0.01
|
|
|
0.2
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
||||||||
Discrete tax items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Discrete tax items, including adjustments to uncertain tax positions
|
|
|
|
(5.4
|
)
|
|
5.4
|
|
|
0.07
|
|
|
|
|
|
0.8
|
|
|
(0.8
|
)
|
|
(0.01
|
)
|
||||||||
Adjusted EPS (non-GAAP)
|
|
|
|
|
|
|
|
|
|
$
|
1.07
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1.04
|
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||||||||
|
2013
|
|
2012
|
||||||||||||||||||||||||||||
(In millions, except per share amounts)
|
Pre-
Tax
|
|
Tax at
Actual
Rate
|
|
After-
Tax
|
|
Per
Share
|
|
Pre-
Tax
|
|
Tax at
Actual
Rate
|
|
After-
Tax
|
|
Per
Share
|
||||||||||||||||
Diluted Earnings Per Share (GAAP)
|
|
|
|
|
|
|
|
|
|
$
|
2.64
|
|
|
|
|
|
|
|
|
|
|
|
$
|
2.70
|
|
||||||
Costs related to Chapter 11
|
$
|
11.0
|
|
|
$
|
2.8
|
|
|
$
|
8.2
|
|
|
0.11
|
|
|
$
|
11.1
|
|
|
$
|
3.0
|
|
|
$
|
8.1
|
|
|
0.11
|
|
||
Asbestos-related costs
|
6.7
|
|
|
2.4
|
|
|
4.3
|
|
|
0.06
|
|
|
25.0
|
|
|
8.8
|
|
|
16.2
|
|
|
0.21
|
|
||||||||
Restructuring expenses and related asset impairments
|
8.7
|
|
|
2.8
|
|
|
5.9
|
|
|
0.08
|
|
|
6.4
|
|
|
1.9
|
|
|
4.5
|
|
|
0.06
|
|
||||||||
Currency transaction loss on cash in Venezuela
|
6.9
|
|
|
—
|
|
|
6.9
|
|
|
0.09
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Loss on sale of divested businesses
|
1.0
|
|
|
0.4
|
|
|
0.6
|
|
|
0.01
|
|
|
0.2
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
||||||||
Discrete tax items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Discrete tax items, including adjustments to uncertain tax positions
|
|
|
(1.0
|
)
|
|
1.0
|
|
|
0.01
|
|
|
|
|
0.5
|
|
|
(0.5
|
)
|
|
(0.01
|
)
|
||||||||||
Adjusted EPS (non-GAAP)
|
|
|
|
|
|
|
|
|
|
$
|
3.00
|
|
|
|
|
|
|
|
|
|
|
|
$
|
3.07
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(In millions)
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Costs related to Chapter 11:
|
|
|
|
|
|
|
|
||||||||
Chapter 11 expenses, net of interest income
|
$
|
2.9
|
|
|
$
|
4.4
|
|
|
$
|
11.0
|
|
|
$
|
12.6
|
|
D&O insurance costs related to Chapter 11
|
0.1
|
|
|
0.1
|
|
|
0.2
|
|
|
0.2
|
|
||||
Translation effects—intercompany loans (A)
|
(10.1
|
)
|
|
(5.2
|
)
|
|
(6.6
|
)
|
|
2.3
|
|
||||
Value of currency forward contracts—intercompany loans (A)
|
9.9
|
|
|
4.7
|
|
|
5.7
|
|
|
(4.0
|
)
|
||||
Certain other currency translation costs, net (A)
|
1.1
|
|
|
(0.3
|
)
|
|
0.7
|
|
|
—
|
|
||||
Costs related to Chapter 11
|
$
|
3.9
|
|
|
$
|
3.7
|
|
|
$
|
11.0
|
|
|
$
|
11.1
|
|
(A)
|
Due to the bankruptcy, we have had significant intercompany loans between our non-U.S. subsidiaries and our U.S. debtor subsidiaries that are not related to our operating activities. In addition, we have accumulated significant cash during our bankruptcy. We expect that the intercompany loans will be paid when we emerge from bankruptcy, and we expect to use the excess cash balances to fund a significant portion of our emergence from bankruptcy. Accordingly, income and expense items related to the intercompany loans and the cash balances are categorized as costs related to Chapter 11.
|
(In millions)
|
Maximum
Borrowing
Amount
|
|
Available
Liquidity
|
|
Expiration Date
|
||||
Country
|
|
|
|
|
|
||||
Germany
|
$
|
67.5
|
|
|
$
|
7.6
|
|
|
12/31/2013
|
Other countries
|
29.7
|
|
|
15.2
|
|
|
Various through 2015
|
||
Other countries—cash collateralized(A)
|
87.5
|
|
|
35.6
|
|
|
Various through 2014
|
||
Total
|
$
|
184.7
|
|
|
$
|
58.4
|
|
|
|
(A)
|
Cash collateral related to these facilities is included in restricted cash in the Consolidated Balance Sheets.
|
|
Nine Months Ended September 30,
|
||||||
(In millions)
|
2013
|
|
2012
|
||||
Net cash provided by operating activities
|
$
|
342.6
|
|
|
$
|
292.4
|
|
Net cash used for investing activities
|
(615.3
|
)
|
|
(167.7
|
)
|
||
Net cash provided by financing activities
|
0.3
|
|
|
78.4
|
|
||
Effect of currency exchange rate changes on cash and cash equivalents
|
(9.8
|
)
|
|
(0.2
|
)
|
||
(Decrease) increase in cash and cash equivalents
|
(282.2
|
)
|
|
202.9
|
|
||
Cash and cash equivalents, beginning of period
|
1,336.9
|
|
|
1,048.3
|
|
||
Cash and cash equivalents, end of period
|
$
|
1,054.7
|
|
|
$
|
1,251.2
|
|
|
Fully-Funded
Pension Plans(1)
|
|
Underfunded
Pension Plans(1)
|
|
Unfunded
Pension Plans(2)
|
||||||||||||||||||
(In millions)
|
September 30,
2013 |
|
December 31,
2012 |
|
September 30,
2013 |
|
December 31,
2012 |
|
September 30,
2013 |
|
December 31,
2012 |
||||||||||||
Projected benefit obligation
|
$
|
1,249.7
|
|
|
$
|
235.4
|
|
|
$
|
194.5
|
|
|
$
|
1,355.8
|
|
|
$
|
356.5
|
|
|
$
|
363.4
|
|
Fair value of plan assets
|
1,279.9
|
|
|
269.2
|
|
|
164.3
|
|
|
1,176.1
|
|
|
—
|
|
|
—
|
|
||||||
Funded status (PBO basis)
|
$
|
30.2
|
|
|
$
|
33.8
|
|
|
$
|
(30.2
|
)
|
|
$
|
(179.7
|
)
|
|
$
|
(356.5
|
)
|
|
$
|
(363.4
|
)
|
(1)
|
Plans intended to be advance-funded.
|
(2)
|
Plans intended to be pay-as-you-go.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(In millions)
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
U.S. advance-funded plans
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
50.0
|
|
|
$
|
109.3
|
|
U.S. pay-as-you-go plans
|
1.4
|
|
|
1.4
|
|
|
4.2
|
|
|
4.2
|
|
||||
Non-U.S. advance-funded plans
|
2.1
|
|
|
1.2
|
|
|
3.3
|
|
|
3.4
|
|
||||
Non-U.S. pay-as-you-go plans
|
2.1
|
|
|
1.7
|
|
|
6.1
|
|
|
5.6
|
|
||||
Total Cash Contributions
|
$
|
5.6
|
|
|
$
|
4.3
|
|
|
$
|
63.6
|
|
|
$
|
122.5
|
|
•
|
Are not statements of fact, but rather are used to allocate risk to one of the parties if the statements prove to be inaccurate;
|
•
|
May have been qualified by disclosures that were made to the other parties in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement;
|
•
|
May apply standards of materiality in a way that is different from what may be viewed as material to you or other investors; and
|
•
|
Were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and do not reflect more recent developments.
|
Exhibit No.
|
|
Description of Exhibit
|
|
Location
|
15
|
|
Accountants' Awareness Letter
|
|
Filed herewith
|
31(i).1
|
|
Certification of Periodic Report by Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002
|
|
Filed herewith
|
31(i).2
|
|
Certification of Periodic Report by Chief Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002
|
|
Filed herewith
|
32
|
|
Certification of Periodic Report by Chief Executive Officer and Chief Financial Officer under Section 906 of the Sarbanes-Oxley Act of 2002
|
|
Filed herewith
|
101.INS
|
|
XBRL Instance Document
|
|
Filed herewith
|
101.SCH
|
|
XBRL Taxonomy Extension Schema
|
|
Filed herewith
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
Filed herewith
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase
|
|
Filed herewith
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase
|
|
Filed herewith
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase
|
|
Filed herewith
|
|
W. R. GRACE & CO.
(Registrant)
|
|
|
|
|
Date: 11/7/2013
|
By:
|
/s/ ALFRED E. FESTA
|
|
|
Alfred E. Festa
(Chairman and
Chief Executive Officer)
|
|
|
|
Date: 11/7/2013
|
By:
|
/s/ HUDSON LA FORCE III
|
|
|
Hudson La Force III
(Senior Vice President and
Chief Financial Officer)
|
|
|
|
Date: 11/7/2013
|
By:
|
/s/ WILLIAM C. DOCKMAN
|
|
|
William C. Dockman
(Vice President and Controller)
|
Exhibit No.
|
|
Description of Exhibit
|
|
Location
|
15
|
|
Accountants' Awareness Letter
|
|
Filed herewith
|
31(i).1
|
|
Certification of Periodic Report by Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002
|
|
Filed herewith
|
31(i).2
|
|
Certification of Periodic Report by Chief Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002
|
|
Filed herewith
|
32
|
|
Certification of Periodic Report by Chief Executive Officer and Chief Financial Officer under Section 906 of the Sarbanes-Oxley Act of 2002
|
|
Filed herewith
|
101.INS
|
|
XBRL Instance Document
|
|
Filed herewith
|
101.SCH
|
|
XBRL Taxonomy Extension Schema
|
|
Filed herewith
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
Filed herewith
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase
|
|
Filed herewith
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase
|
|
Filed herewith
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase
|
|
Filed herewith
|
No information found
* THE VALUE IS THE MARKET VALUE AS OF THE LAST DAY OF THE QUARTER FOR WHICH THE 13F WAS FILED.
FUND | NUMBER OF SHARES | VALUE ($) | PUT OR CALL |
---|---|---|---|
Swift Run Capital Management, LLC | 26,660 | 1,462 |
DIRECTORS | AGE | BIO | OTHER DIRECTOR MEMBERSHIPS |
---|---|---|---|
During 2020, the Compensation Committee of the Board was composed of Mses. Fasone Holder, Gulyas and Reiland, and Messrs. Cummings, Quinn, Slack, Tomkins, Steffen, and Yanai. Ms. Gulyas chaired the Compensation Committee during 2020. None of these persons is a current or former Grace officer or employee, nor did we have any reportable related party transactions with any of these persons; except that Ms. Reiland and Mr. Slack were included on the slate of director nominees recommended by our Board in the Proxy Statement for our 2019 Annual Meeting of Shareholders pursuant to a letter agreement with 40 North. See “Agreements with Certain of our Shareholders,” above. Ms. Reiland resigned from our Board effective October 13, 2020. None of our executive officers serves or in the past has served as a member of the board of directors or compensation committee of any entity that has one or more of its executive officers serving, or in the past having served, on our Board or our Compensation Committee. | |||
Benchmark peer and industry data annually for competitive analysis of CEO / other NEO compensation | |||
Julie Fasone Holder Chief Executive Officer, JFH Insights LLC Age 68 Director since 2016 | |||
Henry R. Slack Managing Director, Quarterwatch LLC Age 71 Director since 2019* | |||
During 2020, the Compensation Committee of the Board was composed of Mses. Fasone Holder, Gulyas and Reiland, and Messrs. Cummings, Quinn, Slack, Tomkins, Steffen, and Yanai. Ms. Gulyas chaired the Compensation Committee during 2020. None of these persons is a current or former Grace officer or employee, nor did we have any reportable related party transactions with any of these persons; except that Ms. Reiland and Mr. Slack were included on the slate of director nominees recommended by our Board in the Proxy Statement for our 2019 Annual Meeting of Shareholders pursuant to a letter agreement with 40 North. See “Agreements with Certain of our Shareholders,” above. Ms. Reiland resigned from our Board effective October 13, 2020. None of our executive officers serves or in the past has served as a member of the board of directors or compensation committee of any entity that has one or more of its executive officers serving, or in the past having served, on our Board or our Compensation Committee. | |||
Christopher J. Steffen Non-Executive Chairman, W. R. Grace & Co. Age 78 Director since 2006 |
Name and Principal Position | Year |
Salary
($) |
Bonus
($)(a) |
Stock Awards(b)
($) |
Option Awards(b)
($) |
Non-Equity Incentive Plan Compensation
($) |
Change in Pension Value and Nonqualified Deferred Compensation Earnings(d)
($) |
All Other Compensation(e)
($) |
Total
($) |
|||||||||||||||||||||||||||||||||||||||||||||||
AICP(c) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
H. La Force
President & Chief Executive Officer |
2020 | 906,250 | 398,795 | 2,399,979 | 807,321 | 145,016 | 1,134,000 | 179,879 | 5,971,240 | |||||||||||||||||||||||||||||||||||||||||||||||
2019 | 850,000 | — | 2,099,966 | 693,209 | 697,000 | 1,021,000 | 168,849 | 5,530,024 | ||||||||||||||||||||||||||||||||||||||||||||||||
2018 | 667,243 | — | 975,011 | 325,189 | 692,700 | 124,000 | 83,584 | 2,867,727 | ||||||||||||||||||||||||||||||||||||||||||||||||
W. C. Dockman
Senior Vice President & Chief Financial Officer |
2020 | 456,250 | 140,549 | 600,036 | 201,833 | 51,109 | 676,000 | 50,497 | 2,176,274 | |||||||||||||||||||||||||||||||||||||||||||||||
2019 | 377,650 | — | 574,938 | 123,789 | 203,580 | 625,000 | 42,730 | 1,947,687 | ||||||||||||||||||||||||||||||||||||||||||||||||
E. C. Brown
Senior Vice President, Human Resources and Information Technology and Chief Human Resources Officer
|
2020 | 420,000 | 157,584 | 412,490 | 138,758 | 47,040 | 309,000 | 60,785 | 1,545,657 | |||||||||||||||||||||||||||||||||||||||||||||||
2019 | 397,083 | — | 562,506 | 185,675 | 227,949 | 236,000 | 62,916 | 1,672,129 | ||||||||||||||||||||||||||||||||||||||||||||||||
2018 | 390,000 | — | 374,989 | 125,073 | 320,800 | 76,000 | 57,941 | 1,344,803 | ||||||||||||||||||||||||||||||||||||||||||||||||
K. N. Cole
Senior Vice President, Public Affairs & Environment, Health, Safety & Chief Sustainability Officer
|
2020 | 377,500 | 116,276 | 337,528 | 113,530 | 42,282 | 246,000 | 54,719 | 1,287,835 | |||||||||||||||||||||||||||||||||||||||||||||||
2019 | 370,000 | — | 525,011 | 173,298 | 212,380 | 293,000 | 53,875 | 1,627,564 | ||||||||||||||||||||||||||||||||||||||||||||||||
2018 | 365,000 | — | 337,551 | 112,565 | 300,500 | 90,000 | 42,824 | 1,248,440 | ||||||||||||||||||||||||||||||||||||||||||||||||
M. A. Shelnitz
Former Senior Vice President, General Counsel & Secretary
|
2020 | 459,000 | 108,603 | 412,490 | 138,758 | 51,410 | 755,000 | 916,110 | 2,841,371 | |||||||||||||||||||||||||||||||||||||||||||||||
2019 | 450,000 | — | 412,447 | 136,166 | 258,300 | 1,488,000 | 70,083 | 2,814,996 | ||||||||||||||||||||||||||||||||||||||||||||||||
2018 | 443,750 | — | 412,494 | 137,580 | 365,400 | — | 53,615 | 1,412,839 |
No Customers Found
Suppliers
Supplier name | Ticker |
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Thermo Fisher Scientific Inc. | TMO |
CSX Corporation | CSX |
Illinois Tool Works Inc. | ITW |
Union Pacific Corporation | UNP |
ABB Ltd | ABB |
Celanese Corporation | CE |
Price
Yield
Owner | Position | Direct Shares | Indirect Shares |
---|