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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, 2017
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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 or other jurisdiction of incorporation or organization)
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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)
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|
Smaller reporting company
o
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Emerging growth company
o
|
|
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Class
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Outstanding at October 31, 2017
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Common Stock, $0.01 par value per share
|
|
67,763,201 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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Three Months Ended September 30,
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Nine Months Ended September 30,
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||||||||||||
(In millions, except per share amounts)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net sales
|
$
|
429.5
|
|
|
$
|
404.5
|
|
|
$
|
1,257.0
|
|
|
$
|
1,157.8
|
|
Cost of goods sold
|
256.2
|
|
|
236.3
|
|
|
761.2
|
|
|
663.7
|
|
||||
Gross profit
|
173.3
|
|
|
168.2
|
|
|
495.8
|
|
|
494.1
|
|
||||
Selling, general and administrative expenses
|
70.5
|
|
|
67.1
|
|
|
207.3
|
|
|
201.5
|
|
||||
Research and development expenses
|
13.3
|
|
|
12.1
|
|
|
39.4
|
|
|
36.2
|
|
||||
Provision for environmental remediation, net
|
6.4
|
|
|
11.9
|
|
|
19.6
|
|
|
19.4
|
|
||||
Equity in earnings of unconsolidated affiliate
|
(4.8
|
)
|
|
(8.5
|
)
|
|
(17.9
|
)
|
|
(18.0
|
)
|
||||
Restructuring and repositioning expenses
|
9.3
|
|
|
5.6
|
|
|
17.0
|
|
|
28.6
|
|
||||
Interest expense and related financing costs
|
20.1
|
|
|
19.8
|
|
|
59.7
|
|
|
61.6
|
|
||||
Other (income) expense, net
|
(0.2
|
)
|
|
(0.5
|
)
|
|
(12.0
|
)
|
|
13.3
|
|
||||
Total costs and expenses
|
114.6
|
|
|
107.5
|
|
|
313.1
|
|
|
342.6
|
|
||||
Income (loss) from continuing operations before income taxes
|
58.7
|
|
|
60.7
|
|
|
182.7
|
|
|
151.5
|
|
||||
(Provision for) benefit from income taxes
|
(11.6
|
)
|
|
(19.4
|
)
|
|
(49.2
|
)
|
|
(62.1
|
)
|
||||
Income (loss) from continuing operations
|
47.1
|
|
|
41.3
|
|
|
133.5
|
|
|
89.4
|
|
||||
Income (loss) from discontinued operations, net of income taxes
|
—
|
|
|
(1.6
|
)
|
|
—
|
|
|
(10.9
|
)
|
||||
Net income (loss)
|
47.1
|
|
|
39.7
|
|
|
133.5
|
|
|
78.5
|
|
||||
Less: Net (income) loss attributable to noncontrolling interests
|
0.3
|
|
|
(0.1
|
)
|
|
0.7
|
|
|
0.3
|
|
||||
Net income (loss) attributable to W. R. Grace & Co. shareholders
|
$
|
47.4
|
|
|
$
|
39.6
|
|
|
$
|
134.2
|
|
|
$
|
78.8
|
|
Amounts Attributable to W. R. Grace & Co. Shareholders:
|
|
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations attributable to W. R. Grace & Co. shareholders
|
$
|
47.4
|
|
|
$
|
41.2
|
|
|
$
|
134.2
|
|
|
$
|
89.7
|
|
Income (loss) from discontinued operations, net of income taxes
|
—
|
|
|
(1.6
|
)
|
|
—
|
|
|
(10.9
|
)
|
||||
Net income (loss) attributable to W. R. Grace & Co. shareholders
|
$
|
47.4
|
|
|
$
|
39.6
|
|
|
$
|
134.2
|
|
|
$
|
78.8
|
|
Earnings Per Share Attributable to W. R. Grace & Co. Shareholders
|
|
|
|
|
|
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|
||||||||
Basic earnings per share:
|
|
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations
|
$
|
0.70
|
|
|
$
|
0.59
|
|
|
$
|
1.97
|
|
|
$
|
1.27
|
|
Income (loss) from discontinued operations, net of income taxes
|
—
|
|
|
(0.03
|
)
|
|
—
|
|
|
(0.15
|
)
|
||||
Net income (loss)
|
$
|
0.70
|
|
|
$
|
0.56
|
|
|
$
|
1.97
|
|
|
$
|
1.12
|
|
Weighted average number of basic shares
|
67.9
|
|
|
70.3
|
|
|
68.2
|
|
|
70.5
|
|
||||
Diluted earnings per share:
|
|
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations
|
$
|
0.70
|
|
|
$
|
0.58
|
|
|
$
|
1.96
|
|
|
$
|
1.27
|
|
Income (loss) from discontinued operations, net of income taxes
|
—
|
|
|
(0.02
|
)
|
|
—
|
|
|
(0.16
|
)
|
||||
Net income (loss)
|
$
|
0.70
|
|
|
$
|
0.56
|
|
|
$
|
1.96
|
|
|
$
|
1.11
|
|
Weighted average number of diluted shares
|
68.0
|
|
|
70.7
|
|
|
68.3
|
|
|
70.9
|
|
||||
Dividends per common share
|
$
|
0.21
|
|
|
$
|
0.17
|
|
|
$
|
0.63
|
|
|
$
|
0.34
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(In millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net income (loss)
|
$
|
47.1
|
|
|
$
|
39.7
|
|
|
$
|
133.5
|
|
|
$
|
78.5
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Defined benefit pension and other postretirement plans, net of income taxes
|
(0.3
|
)
|
|
(0.3
|
)
|
|
(1.0
|
)
|
|
(1.0
|
)
|
||||
Currency translation adjustments, net of income taxes
|
(12.1
|
)
|
|
(2.3
|
)
|
|
(21.8
|
)
|
|
(6.4
|
)
|
||||
Gain (loss) from hedging activities, net of income taxes
|
(0.4
|
)
|
|
0.6
|
|
|
0.1
|
|
|
(2.7
|
)
|
||||
Total other comprehensive income (loss) attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
2.6
|
|
||||
Total other comprehensive income (loss)
|
(12.8
|
)
|
|
(2.0
|
)
|
|
(22.7
|
)
|
|
(7.5
|
)
|
||||
Comprehensive income (loss)
|
34.3
|
|
|
37.7
|
|
|
110.8
|
|
|
71.0
|
|
||||
Less: comprehensive (income) loss attributable to noncontrolling interests
|
0.3
|
|
|
(0.1
|
)
|
|
0.7
|
|
|
(2.3
|
)
|
||||
Comprehensive income (loss) attributable to W. R. Grace & Co. shareholders
|
$
|
34.6
|
|
|
$
|
37.6
|
|
|
$
|
111.5
|
|
|
$
|
68.7
|
|
|
Nine Months Ended September 30,
|
||||||
(In millions)
|
2017
|
|
2016
|
||||
OPERATING ACTIVITIES
|
|
|
|
||||
Net income (loss)
|
$
|
133.5
|
|
|
$
|
78.5
|
|
Less: loss (income) from discontinued operations
|
—
|
|
|
10.9
|
|
||
Income from continuing operations
|
133.5
|
|
|
89.4
|
|
||
Reconciliation to net cash provided by (used for) operating activities from continuing operations:
|
|
|
|
||||
Depreciation and amortization
|
82.6
|
|
|
73.8
|
|
||
Equity in earnings of unconsolidated affiliate
|
(17.9
|
)
|
|
(18.0
|
)
|
||
Dividends received from unconsolidated affiliate
|
19.0
|
|
|
24.8
|
|
||
Costs related to legacy product, environmental and other claims
|
25.5
|
|
|
24.2
|
|
||
Cash paid for legacy product, environmental and other claims
|
(50.1
|
)
|
|
(17.3
|
)
|
||
Provision for (benefit from) income taxes
|
49.2
|
|
|
62.1
|
|
||
Cash paid for income taxes
|
(44.1
|
)
|
|
(42.4
|
)
|
||
Income tax refunds received
|
30.2
|
|
|
2.3
|
|
||
Loss on early extinguishment of debt
|
—
|
|
|
11.1
|
|
||
Interest expense and related financing costs
|
59.7
|
|
|
61.6
|
|
||
Cash paid for interest
|
(40.1
|
)
|
|
(45.5
|
)
|
||
Defined benefit pension expense
|
11.6
|
|
|
8.2
|
|
||
Cash paid under defined benefit pension arrangements
|
(12.2
|
)
|
|
(12.1
|
)
|
||
Accounts receivable reserve—Venezuela
|
10.0
|
|
|
—
|
|
||
Changes in assets and liabilities, excluding effect of currency translation and acquisitions:
|
|
|
|
||||
Trade accounts receivable
|
20.7
|
|
|
9.7
|
|
||
Inventories
|
(4.5
|
)
|
|
(5.8
|
)
|
||
Accounts payable
|
3.0
|
|
|
11.0
|
|
||
All other items, net
|
(8.6
|
)
|
|
(29.5
|
)
|
||
Net cash provided by (used for) operating activities from continuing operations
|
267.5
|
|
|
207.6
|
|
||
INVESTING ACTIVITIES
|
|
|
|
||||
Capital expenditures
|
(85.6
|
)
|
|
(89.4
|
)
|
||
Business acquired
|
(3.5
|
)
|
|
(245.1
|
)
|
||
Proceeds from sale of assets
|
0.6
|
|
|
11.3
|
|
||
Other investing activities
|
(1.5
|
)
|
|
(1.4
|
)
|
||
Net cash provided by (used for) investing activities from continuing operations
|
(90.0
|
)
|
|
(324.6
|
)
|
||
FINANCING ACTIVITIES
|
|
|
|
||||
Borrowings under credit arrangements
|
106.3
|
|
|
20.6
|
|
||
Repayments under credit arrangements
|
(108.9
|
)
|
|
(614.9
|
)
|
||
Cash paid for repurchases of common stock
|
(65.0
|
)
|
|
(55.1
|
)
|
||
Proceeds from exercise of stock options
|
14.8
|
|
|
13.3
|
|
||
Dividends paid
|
(43.0
|
)
|
|
(24.1
|
)
|
||
Distribution from GCP
|
—
|
|
|
750.0
|
|
||
Other financing activities
|
(3.8
|
)
|
|
(2.4
|
)
|
||
Net cash provided by (used for) financing activities from continuing operations
|
(99.6
|
)
|
|
87.4
|
|
||
Effect of currency exchange rate changes on cash and cash equivalents
|
7.2
|
|
|
2.7
|
|
||
Increase (decrease) in cash and cash equivalents from continuing operations
|
85.1
|
|
|
(26.9
|
)
|
||
Cash flows from discontinued operations
|
|
|
|
||||
Net cash provided by (used for) operating activities
|
—
|
|
|
23.9
|
|
||
Net cash provided by (used for) investing activities
|
—
|
|
|
(9.5
|
)
|
||
Net cash provided by (used for) financing activities
|
—
|
|
|
31.4
|
|
||
Effect of currency exchange rate changes on cash and cash equivalents
|
—
|
|
|
(1.0
|
)
|
||
Increase (decrease) in cash and cash equivalents from discontinued operations
|
—
|
|
|
44.8
|
|
||
Net increase (decrease) in cash and cash equivalents
|
85.1
|
|
|
17.9
|
|
||
Less: cash and cash equivalents of discontinued operations
|
—
|
|
|
(143.4
|
)
|
||
Cash and cash equivalents, beginning of period
|
90.6
|
|
|
329.9
|
|
||
Cash and cash equivalents, end of period
|
$
|
175.7
|
|
|
$
|
204.4
|
|
|
|
|
|
||||
Supplemental disclosure of cash flow information
|
|
|
|
||||
Capital expenditures in accounts payable
|
$
|
20.2
|
|
|
$
|
15.2
|
|
Net share settled stock option exercises
|
1.2
|
|
|
10.4
|
|
(In millions, except par value and shares)
|
September 30,
2017 |
|
December 31,
2016 |
||||
ASSETS
|
|
|
|
||||
Current Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
175.7
|
|
|
$
|
90.6
|
|
Restricted cash and cash equivalents
|
10.8
|
|
|
10.0
|
|
||
Trade accounts receivable, less allowance of $12.6 (2016—$2.2)
|
253.1
|
|
|
273.9
|
|
||
Inventories
|
239.5
|
|
|
228.0
|
|
||
Other current assets
|
36.3
|
|
|
52.3
|
|
||
Total Current Assets
|
715.4
|
|
|
654.8
|
|
||
Properties and equipment, net of accumulated depreciation and amortization of $1,438.2 (2016—$1,327.5)
|
762.8
|
|
|
729.6
|
|
||
Goodwill
|
401.7
|
|
|
394.2
|
|
||
Technology and other intangible assets, net
|
259.2
|
|
|
269.1
|
|
||
Deferred income taxes
|
694.1
|
|
|
709.4
|
|
||
Investment in unconsolidated affiliate
|
118.0
|
|
|
117.6
|
|
||
Other assets
|
34.7
|
|
|
37.1
|
|
||
Total Assets
|
$
|
2,985.9
|
|
|
$
|
2,911.8
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
Current Liabilities
|
|
|
|
||||
Debt payable within one year
|
$
|
46.5
|
|
|
$
|
76.5
|
|
Accounts payable
|
195.2
|
|
|
195.4
|
|
||
Other current liabilities
|
207.9
|
|
|
208.9
|
|
||
Total Current Liabilities
|
449.6
|
|
|
480.8
|
|
||
Debt payable after one year
|
1,521.9
|
|
|
1,507.6
|
|
||
Underfunded and unfunded defined benefit pension plans
|
452.1
|
|
|
424.3
|
|
||
Other liabilities
|
165.3
|
|
|
126.7
|
|
||
Total Liabilities
|
2,588.9
|
|
|
2,539.4
|
|
||
Commitments and Contingencies—Note 8
|
|
|
|
||||
Equity
|
|
|
|
||||
Common stock issued, par value $0.01; 300,000,000 shares authorized; outstanding: 67,758,485 (2016—68,309,431)
|
0.7
|
|
|
0.7
|
|
||
Paid-in capital
|
475.4
|
|
|
487.3
|
|
||
Retained earnings
|
710.3
|
|
|
619.3
|
|
||
Treasury stock, at cost: shares: 9,698,142 (2016—9,147,196)
|
(837.2
|
)
|
|
(804.9
|
)
|
||
Accumulated other comprehensive income (loss)
|
43.7
|
|
|
66.4
|
|
||
Total W. R. Grace & Co. Shareholders' Equity
|
392.9
|
|
|
368.8
|
|
||
Noncontrolling interests
|
4.1
|
|
|
3.6
|
|
||
Total Equity
|
397.0
|
|
|
372.4
|
|
||
Total Liabilities and Equity
|
$
|
2,985.9
|
|
|
$
|
2,911.8
|
|
(In millions)
|
Common Stock and Paid-in Capital
|
|
Retained Earnings
|
|
Treasury Stock
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Noncontrolling Interests
|
|
Total Equity
|
||||||||||||
Balance, December 31, 2015
|
$
|
496.7
|
|
|
$
|
436.3
|
|
|
$
|
(658.4
|
)
|
|
$
|
(66.8
|
)
|
|
$
|
4.7
|
|
|
$
|
212.5
|
|
Net income (loss)
|
—
|
|
|
78.8
|
|
|
—
|
|
|
—
|
|
|
(0.3
|
)
|
|
78.5
|
|
||||||
Repurchase of common stock
|
—
|
|
|
—
|
|
|
(55.1
|
)
|
|
—
|
|
|
—
|
|
|
(55.1
|
)
|
||||||
Stock-based compensation
|
9.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9.2
|
|
||||||
Exercise of stock options
|
(16.2
|
)
|
|
—
|
|
|
39.9
|
|
|
—
|
|
|
—
|
|
|
23.7
|
|
||||||
Tax benefit related to stock plans
|
—
|
|
|
70.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
70.4
|
|
||||||
Shares issued
|
0.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.7
|
|
||||||
Other comprehensive (loss) income
|
—
|
|
|
—
|
|
|
—
|
|
|
(10.1
|
)
|
|
2.6
|
|
|
(7.5
|
)
|
||||||
Dividends declared
|
—
|
|
|
(24.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24.1
|
)
|
||||||
Distribution of GCP
|
—
|
|
|
54.7
|
|
|
—
|
|
|
135.3
|
|
|
(3.7
|
)
|
|
186.3
|
|
||||||
Balance, September 30, 2016
|
$
|
490.4
|
|
|
$
|
616.1
|
|
|
$
|
(673.6
|
)
|
|
$
|
58.4
|
|
|
$
|
3.3
|
|
|
$
|
494.6
|
|
Balance, December 31, 2016
|
$
|
488.0
|
|
|
$
|
619.3
|
|
|
$
|
(804.9
|
)
|
|
$
|
66.4
|
|
|
$
|
3.6
|
|
|
$
|
372.4
|
|
Net income (loss)
|
—
|
|
|
134.2
|
|
|
—
|
|
|
—
|
|
|
(0.7
|
)
|
|
133.5
|
|
||||||
Repurchase of common stock
|
—
|
|
|
—
|
|
|
(65.0
|
)
|
|
—
|
|
|
—
|
|
|
(65.0
|
)
|
||||||
Payments to taxing authorities in consideration of employee tax obligations relative to stock-based compensation arrangements
|
(2.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.5
|
)
|
||||||
Stock-based compensation
|
8.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8.2
|
|
||||||
Exercise of stock options
|
(18.3
|
)
|
|
—
|
|
|
32.7
|
|
|
—
|
|
|
—
|
|
|
14.4
|
|
||||||
Shares issued
|
0.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.7
|
|
||||||
Other comprehensive (loss) income
|
—
|
|
|
—
|
|
|
—
|
|
|
(22.7
|
)
|
|
—
|
|
|
(22.7
|
)
|
||||||
Contribution to joint venture
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.2
|
|
|
1.2
|
|
||||||
Dividends declared
|
—
|
|
|
(43.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(43.2
|
)
|
||||||
Balance, September 30, 2017
|
$
|
476.1
|
|
|
$
|
710.3
|
|
|
$
|
(837.2
|
)
|
|
$
|
43.7
|
|
|
$
|
4.1
|
|
|
$
|
397.0
|
|
•
|
Realization values of net deferred tax assets, which depend on projections of future taxable income (see Note 5);
|
•
|
Pension and postretirement liabilities, which depend on assumptions regarding participant life spans, future inflation, discount rates and total returns on invested funds (see Note 6);
|
•
|
Carrying values of goodwill and other intangible assets, which depend on assumptions of future earnings and cash flows; and
|
•
|
Contingent liabilities, which depend on an assessment of the probability of loss and an estimate of ultimate obligation, such as litigation (see Note 8), income taxes (see Note 5), and environmental remediation (see Note 8).
|
(In millions)
|
September 30,
2017 |
|
December 31,
2016 |
||||
Raw materials
|
$
|
53.6
|
|
|
$
|
57.7
|
|
In process
|
34.7
|
|
|
33.4
|
|
||
Finished products
|
128.2
|
|
|
115.8
|
|
||
Other
|
23.0
|
|
|
21.1
|
|
||
Total inventory
|
$
|
239.5
|
|
|
$
|
228.0
|
|
(In millions)
|
September 30,
2017 |
|
December 31,
2016 |
||||
5.125% senior notes due 2021, net of unamortized debt issuance costs of $6.2 at September 30, 2017 (2016—$7.3)
|
$
|
693.8
|
|
|
$
|
692.7
|
|
U.S. dollar term loan, net of unamortized debt issuance costs and discounts of $4.7 at September 30, 2017 (2016—$5.7)
|
403.7
|
|
|
402.7
|
|
||
5.625% senior notes due 2024, net of unamortized debt issuance costs of $3.6 at September 30, 2017 (2016—$4.0)
|
296.4
|
|
|
296.0
|
|
||
Euro term loan, net of unamortized debt issuance costs and discounts of $1.0 at September 30, 2017 (2016—$1.3)
|
93.1
|
|
|
82.5
|
|
||
Debt payable to unconsolidated affiliate
|
41.4
|
|
|
39.5
|
|
||
Deferred payment obligation
|
—
|
|
|
30.0
|
|
||
Other borrowings(1)
|
40.0
|
|
|
40.7
|
|
||
Total debt
|
1,568.4
|
|
|
1,584.1
|
|
||
Less debt payable within one year
|
46.5
|
|
|
76.5
|
|
||
Debt payable after one year
|
$
|
1,521.9
|
|
|
$
|
1,507.6
|
|
Weighted average interest rates on total debt
|
4.7
|
%
|
|
4.6
|
%
|
|
(In millions)
|
||
2017
|
$
|
40.4
|
|
2018
|
8.8
|
|
|
2019
|
8.3
|
|
|
2020
|
7.0
|
|
|
2021
|
1,196.1
|
|
|
Thereafter
|
307.8
|
|
|
Total debt
|
$
|
1,568.4
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||||||||||
(In millions)
|
Carrying Amount
|
|
Fair Value
|
|
Carrying Amount
|
|
Fair Value
|
||||||||
5.125% senior notes due 2021(1)
|
$
|
693.8
|
|
|
$
|
752.8
|
|
|
$
|
692.7
|
|
|
$
|
721.3
|
|
U.S. dollar term loan(2)
|
403.7
|
|
|
405.7
|
|
|
402.7
|
|
|
408.2
|
|
||||
5.625% senior notes due 2024(1)
|
296.4
|
|
|
325.7
|
|
|
296.0
|
|
|
311.5
|
|
||||
Euro term loan(2)
|
93.1
|
|
|
93.2
|
|
|
82.5
|
|
|
82.0
|
|
||||
Other borrowings
|
81.4
|
|
|
81.4
|
|
|
110.2
|
|
|
110.2
|
|
||||
Total debt
|
$
|
1,568.4
|
|
|
$
|
1,658.8
|
|
|
$
|
1,584.1
|
|
|
$
|
1,633.2
|
|
(1)
|
Carrying amounts are net of unamortized debt issuance costs of
$6.2 million
and
$3.6 million
as of
September 30, 2017
, and
$7.3 million
and
$4.0 million
as of
December 31, 2016
, related to the 5.125% senior notes due 2021 and 5.625% senior notes due 2024, respectively.
|
(2)
|
Carrying amounts are net of unamortized debt issuance costs and discounts of
$4.7 million
and
$1.0 million
as of
September 30, 2017
, and
$5.7 million
and
$1.3 million
as of
December 31, 2016
, related to the U.S. dollar term loan and euro term loan, respectively.
|
|
Fair Value Measurements at September 30, 2017, Using
|
||||||||||||||
(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
|
$
|
3.3
|
|
|
$
|
—
|
|
|
$
|
3.3
|
|
|
$
|
—
|
|
Total Assets
|
$
|
3.3
|
|
|
$
|
—
|
|
|
$
|
3.3
|
|
|
$
|
—
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Interest rate derivatives
|
$
|
4.2
|
|
|
$
|
—
|
|
|
$
|
4.2
|
|
|
$
|
—
|
|
Currency derivatives
|
17.9
|
|
|
—
|
|
|
17.9
|
|
|
—
|
|
||||
Total Liabilities
|
$
|
22.1
|
|
|
$
|
—
|
|
|
$
|
22.1
|
|
|
$
|
—
|
|
|
Fair Value Measurements at December 31, 2016, Using
|
||||||||||||||
(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
|
$
|
8.8
|
|
|
$
|
—
|
|
|
$
|
8.8
|
|
|
$
|
—
|
|
Total Assets
|
$
|
8.8
|
|
|
$
|
—
|
|
|
$
|
8.8
|
|
|
$
|
—
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Interest rate derivatives
|
$
|
6.0
|
|
|
$
|
—
|
|
|
$
|
6.0
|
|
|
$
|
—
|
|
Currency derivatives
|
0.9
|
|
|
—
|
|
|
0.9
|
|
|
—
|
|
||||
Total Liabilities
|
$
|
6.9
|
|
|
$
|
—
|
|
|
$
|
6.9
|
|
|
$
|
—
|
|
September 30, 2017
(In millions) |
Asset Derivatives
|
|
Liability Derivatives
|
||||||||
Balance Sheet
Location
|
|
Fair Value
|
|
Balance Sheet
Location
|
|
Fair Value
|
|||||
Derivatives designated as hedging instruments under ASC 815:
|
|
|
|
|
|
|
|
||||
Currency contracts
|
Other current assets
|
|
$
|
2.9
|
|
|
Other current liabilities
|
|
$
|
—
|
|
Interest rate contracts
|
Other current assets
|
|
—
|
|
|
Other current liabilities
|
|
1.7
|
|
||
Currency contracts
|
Other assets
|
|
—
|
|
|
Other liabilities
|
|
17.6
|
|
||
Interest rate contracts
|
Other assets
|
|
—
|
|
|
Other liabilities
|
|
2.5
|
|
||
Derivatives not designated as hedging instruments under ASC 815:
|
|
|
|
|
|
|
|
||||
Currency contracts
|
Other current assets
|
|
0.4
|
|
|
Other current liabilities
|
|
0.3
|
|
||
Total derivatives
|
|
|
$
|
3.3
|
|
|
|
|
$
|
22.1
|
|
December 31, 2016
(In millions) |
Asset Derivatives
|
|
Liability Derivatives
|
||||||||
Balance Sheet
Location
|
|
Fair Value
|
|
Balance Sheet
Location
|
|
Fair Value
|
|||||
Derivatives designated as hedging instruments under ASC 815:
|
|
|
|
|
|
|
|
||||
Currency contracts
|
Other current assets
|
|
$
|
4.0
|
|
|
Other current liabilities
|
|
$
|
—
|
|
Interest rate contracts
|
Other current assets
|
|
—
|
|
|
Other current liabilities
|
|
2.8
|
|
||
Currency contracts
|
Other assets
|
|
4.0
|
|
|
Other liabilities
|
|
—
|
|
||
Interest rate contracts
|
Other assets
|
|
—
|
|
|
Other liabilities
|
|
3.2
|
|
||
Derivatives not designated as hedging instruments under ASC 815:
|
|
|
|
|
|
|
|
||||
Currency contracts
|
Other current assets
|
|
0.8
|
|
|
Other current liabilities
|
|
0.9
|
|
||
Total derivatives
|
|
|
$
|
8.8
|
|
|
|
|
$
|
6.9
|
|
Three Months Ended September 30, 2017
(In millions) |
Amount of Gain (Loss) Recognized in OCI on Derivatives
(Effective Portion)
|
|
Location of Gain (Loss) Reclassified from Accumulated OCI into Income
(Effective Portion)
|
|
Amount of Gain (Loss) Reclassified from OCI into Income
(Effective Portion)
|
||||
Derivatives in ASC 815 cash flow hedging relationships:
|
|
|
|
|
|||||
Interest rate contracts
|
$
|
0.2
|
|
|
Interest expense
|
|
$
|
(0.7
|
)
|
Currency contracts
|
(0.1
|
)
|
|
Other expense
|
|
0.1
|
|
||
Total derivatives
|
$
|
0.1
|
|
|
|
|
$
|
(0.6
|
)
|
Nine Months Ended September 30, 2017
(In millions) |
Amount of Gain (Loss) Recognized in OCI on Derivatives
(Effective Portion)
|
|
Location of Gain (Loss) Reclassified from Accumulated OCI into Income
(Effective Portion)
|
|
Amount of Gain (Loss) Reclassified from OCI into Income
(Effective Portion)
|
||||
Derivatives in ASC 815 cash flow hedging relationships:
|
|
|
|
|
|||||
Interest rate contracts
|
$
|
(0.8
|
)
|
|
Interest expense
|
|
$
|
(2.4
|
)
|
Currency contracts
|
(0.2
|
)
|
|
Other expense
|
|
—
|
|
||
Total derivatives
|
$
|
(1.0
|
)
|
|
|
|
$
|
(2.4
|
)
|
Three Months Ended September 30, 2016
(In millions) |
Amount of Gain (Loss) Recognized in OCI on Derivatives
(Effective Portion) |
|
Location of Gain (Loss) Reclassified from Accumulated OCI into Income
(Effective Portion) |
|
Amount of Gain (Loss) Reclassified from OCI into Income
(Effective Portion) |
||||
Derivatives in ASC 815 cash flow hedging relationships:
|
|
|
|
|
|||||
Interest rate contracts
|
$
|
0.6
|
|
|
Interest expense
|
|
$
|
(1.0
|
)
|
Currency contracts
|
(0.4
|
)
|
|
Other expense
|
|
0.3
|
|
||
Total derivatives
|
$
|
0.2
|
|
|
|
|
$
|
(0.7
|
)
|
Nine Months Ended September 30, 2016
(In millions) |
Amount of Gain (Loss) Recognized in OCI on Derivatives
(Effective Portion) |
|
Location of Gain (Loss) Reclassified from Accumulated OCI into Income
(Effective Portion) |
|
Amount of Gain (Loss) Reclassified from OCI into Income
(Effective Portion) |
||||
Derivatives in ASC 815 cash flow hedging relationships:
|
|
|
|
|
|||||
Interest rate contracts
|
$
|
(5.8
|
)
|
|
Interest expense
|
|
$
|
(3.1
|
)
|
Currency contracts
|
(0.3
|
)
|
|
Other expense
|
|
0.7
|
|
||
Total derivatives
|
$
|
(6.1
|
)
|
|
|
|
$
|
(2.4
|
)
|
Three Months Ended September 30, 2017
(In millions) |
Amount of Gain (Loss) Recognized in OCI in Currency Translation Adjustments
(Effective Portion)
|
||
Derivatives in ASC 815 net investment hedging relationships:
|
|
||
Cross-currency swap
|
$
|
(7.3
|
)
|
Non-derivatives in ASC 815 net investment hedging relationships:
|
|
||
Foreign currency denominated debt
|
$
|
(3.1
|
)
|
Foreign currency denominated deferred intercompany royalties
|
(1.7
|
)
|
|
|
$
|
(4.8
|
)
|
Nine Months Ended September 30, 2017
(In millions) |
Amount of Gain (Loss) Recognized in OCI in Currency Translation Adjustments
(Effective Portion)
|
||
Derivatives in ASC 815 net investment hedging relationships:
|
|
||
Cross-currency swap
|
$
|
(20.5
|
)
|
Non-derivatives in ASC 815 net investment hedging relationships:
|
|
||
Foreign currency denominated debt
|
$
|
(10.3
|
)
|
Foreign currency denominated deferred intercompany royalties
|
(6.1
|
)
|
|
|
$
|
(16.4
|
)
|
Three Months Ended September 30, 2016
(In millions) |
Amount of Gain (Loss) Recognized in OCI in Currency Translation Adjustments
(Effective Portion)
|
||
Derivatives in ASC 815 net investment hedging relationships:
|
|
||
Cross-currency swap
|
$
|
(1.8
|
)
|
Non-derivatives in ASC 815 net investment hedging relationships:
|
|
||
Foreign currency denominated debt
|
$
|
(0.8
|
)
|
Nine Months Ended September 30, 2016
(In millions) |
Amount of Gain (Loss) Recognized in OCI in Currency Translation Adjustments
(Effective Portion)
|
||
Derivatives in ASC 815 net investment hedging relationships:
|
|
||
Cross-currency swap
|
$
|
(1.7
|
)
|
Non-derivatives in ASC 815 net investment hedging relationships:
|
|
||
Foreign currency denominated debt
|
$
|
(1.2
|
)
|
(In millions)
|
Deferred Tax Asset
(Net of Liabilities)
|
|
Valuation Allowance
|
|
Net Deferred Tax Asset
|
||||||
United States—Federal
|
$
|
615.7
|
|
|
$
|
(17.7
|
)
|
|
$
|
598.0
|
|
United States—States
|
54.6
|
|
|
(11.2
|
)
|
|
43.4
|
|
|||
Germany
|
44.1
|
|
|
—
|
|
|
44.1
|
|
|||
Other foreign
|
8.0
|
|
|
(2.5
|
)
|
|
5.5
|
|
|||
Total
|
$
|
722.4
|
|
|
$
|
(31.4
|
)
|
|
$
|
691.0
|
|
|
Expiration Dates
|
United States—Federal (NOLs)
|
2034 - 2035
|
United States—Federal (Credits)
|
2019 - 2027
|
United States—States (NOLs)
|
2017 - 2035
|
(In millions)
|
September 30,
2017 |
|
December 31,
2016 |
||||
Underfunded defined benefit pension plans
|
$
|
(80.4
|
)
|
|
$
|
(83.1
|
)
|
Unfunded defined benefit pension plans
|
(371.7
|
)
|
|
(341.2
|
)
|
||
Total underfunded and unfunded defined benefit pension plans
|
(452.1
|
)
|
|
(424.3
|
)
|
||
Pension liabilities included in other current liabilities
|
(15.3
|
)
|
|
(14.4
|
)
|
||
Net funded status
|
$
|
(467.4
|
)
|
|
$
|
(438.7
|
)
|
|
Three Months Ended September 30,
|
||||||||||||||||||||||
|
2017
|
|
2016
|
||||||||||||||||||||
|
Pension
|
|
Other Post
Retirement
|
|
Pension
|
|
Other Post
Retirement
|
||||||||||||||||
(In millions)
|
U.S.
|
|
Non-U.S.
|
|
|
U.S.
|
|
Non-U.S.
|
|
||||||||||||||
Service cost
|
$
|
4.3
|
|
|
$
|
2.2
|
|
|
$
|
—
|
|
|
$
|
4.5
|
|
|
$
|
1.7
|
|
|
$
|
—
|
|
Interest cost
|
10.5
|
|
|
1.1
|
|
|
—
|
|
|
10.1
|
|
|
1.3
|
|
|
—
|
|
||||||
Expected return on plan assets
|
(14.4
|
)
|
|
(0.2
|
)
|
|
—
|
|
|
(14.2
|
)
|
|
(0.2
|
)
|
|
—
|
|
||||||
Amortization of prior service credit
|
(0.1
|
)
|
|
—
|
|
|
(0.5
|
)
|
|
(0.1
|
)
|
|
—
|
|
|
(0.5
|
)
|
||||||
Amortization of net deferred actuarial loss
|
—
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
||||||
Curtailment gain
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
||||||
Net periodic benefit cost (income) from continuing operations
|
$
|
0.3
|
|
|
$
|
3.1
|
|
|
$
|
(0.4
|
)
|
|
$
|
0.3
|
|
|
$
|
2.6
|
|
|
$
|
(0.4
|
)
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||
|
2017
|
|
2016
|
||||||||||||||||||||
|
Pension
|
|
Other Post
Retirement
|
|
Pension
|
|
Other Post
Retirement
|
||||||||||||||||
(In millions)
|
U.S.
|
|
Non-U.S.
|
|
|
U.S.
|
|
Non-U.S.
|
|
||||||||||||||
Service cost
|
$
|
12.9
|
|
|
$
|
6.2
|
|
|
$
|
—
|
|
|
$
|
13.9
|
|
|
$
|
5.4
|
|
|
$
|
—
|
|
Interest cost
|
31.5
|
|
|
3.2
|
|
|
—
|
|
|
30.8
|
|
|
4.6
|
|
|
—
|
|
||||||
Expected return on plan assets
|
(43.2
|
)
|
|
(0.6
|
)
|
|
—
|
|
|
(43.0
|
)
|
|
(1.5
|
)
|
|
—
|
|
||||||
Amortization of prior service credit
|
(0.3
|
)
|
|
—
|
|
|
(1.5
|
)
|
|
(0.2
|
)
|
|
—
|
|
|
(1.7
|
)
|
||||||
Amortization of net deferred actuarial loss
|
—
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
0.4
|
|
||||||
Curtailment gain
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.9
|
)
|
|
—
|
|
||||||
Net periodic benefit cost (income)
|
0.9
|
|
|
8.8
|
|
|
(1.2
|
)
|
|
1.5
|
|
|
7.6
|
|
|
(1.3
|
)
|
||||||
Less: discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.5
|
)
|
|
(0.2
|
)
|
|
—
|
|
||||||
Net periodic benefit cost (income) from continuing operations
|
$
|
0.9
|
|
|
$
|
8.8
|
|
|
$
|
(1.2
|
)
|
|
$
|
1.0
|
|
|
$
|
7.4
|
|
|
$
|
(1.3
|
)
|
(In millions)
|
September 30,
2017 |
|
December 31,
2016 |
||||
Other Current Liabilities
|
|
|
|
||||
Accrued compensation
|
$
|
49.7
|
|
|
$
|
49.6
|
|
Accrued interest
|
29.9
|
|
|
16.2
|
|
||
Environmental contingencies
|
24.5
|
|
|
32.5
|
|
||
Deferred revenue
|
16.4
|
|
|
27.2
|
|
||
Pension liabilities
|
15.3
|
|
|
14.4
|
|
||
Income taxes payable
|
14.9
|
|
|
5.7
|
|
||
Other accrued liabilities
|
57.2
|
|
|
63.3
|
|
||
|
$
|
207.9
|
|
|
$
|
208.9
|
|
(In millions)
|
September 30,
2017 |
|
December 31,
2016 |
||||
Other Liabilities
|
|
|
|
||||
Environmental contingencies
|
$
|
46.1
|
|
|
$
|
33.8
|
|
Liability to unconsolidated affiliate
|
28.0
|
|
|
27.0
|
|
||
Fair value of currency and interest rate contracts
|
20.1
|
|
|
3.2
|
|
||
Deferred revenue
|
9.5
|
|
|
2.3
|
|
||
Asset retirement obligation
|
8.5
|
|
|
10.2
|
|
||
Postemployment liability
|
6.9
|
|
|
7.2
|
|
||
Other noncurrent liabilities
|
46.2
|
|
|
43.0
|
|
||
|
$
|
165.3
|
|
|
$
|
126.7
|
|
•
|
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 accrues a warranty liability on a transaction-specific basis depending on the individual facts and circumstances related to each sale.
|
•
|
Performance guarantees offered to customers under certain licensing arrangements. Grace has not established a liability for these arrangements based on past performance.
|
•
|
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 related to activities prior to the closing of the transaction, including environmental liabilities.
|
•
|
Contracts related to the Separation in which Grace has agreed to indemnify GCP against liabilities related to activities prior to the closing of the transaction, including tax, employee, and 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.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(In millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Catalysts Technologies
|
$
|
2.4
|
|
|
$
|
1.6
|
|
|
$
|
2.8
|
|
|
$
|
2.7
|
|
Materials Technologies
|
0.2
|
|
|
(0.1
|
)
|
|
0.5
|
|
|
15.1
|
|
||||
Corporate
|
2.7
|
|
|
0.3
|
|
|
6.8
|
|
|
0.4
|
|
||||
Total restructuring expenses
|
$
|
5.3
|
|
|
$
|
1.8
|
|
|
$
|
10.1
|
|
|
$
|
18.2
|
|
Restructuring Liability
(In millions)
|
Total
|
||
Balance, December 31, 2016
|
$
|
9.6
|
|
Accruals for severance and other costs
|
9.5
|
|
|
Payments
|
(10.9
|
)
|
|
Currency translation adjustments and other
|
0.1
|
|
|
Balance, September 30, 2017
|
$
|
8.3
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(In millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Business interruption insurance recovery
|
$
|
(11.9
|
)
|
|
$
|
—
|
|
|
$
|
(25.0
|
)
|
|
$
|
—
|
|
Accounts receivable reserve—Venezuela
|
10.0
|
|
|
—
|
|
|
10.0
|
|
|
—
|
|
||||
Currency transaction effects
|
1.8
|
|
|
(0.2
|
)
|
|
3.8
|
|
|
0.1
|
|
||||
Chapter 11 expenses, net
|
0.4
|
|
|
0.4
|
|
|
1.9
|
|
|
2.4
|
|
||||
Net (gain) loss on sales of investments and disposals of assets
|
0.7
|
|
|
(0.1
|
)
|
|
1.5
|
|
|
0.1
|
|
||||
Third-party acquisition-related costs
|
0.4
|
|
|
—
|
|
|
0.4
|
|
|
2.5
|
|
||||
Loss on early extinguishment of debt
|
—
|
|
|
—
|
|
|
—
|
|
|
11.1
|
|
||||
Other miscellaneous (income) expense
|
(1.6
|
)
|
|
(0.6
|
)
|
|
(4.6
|
)
|
|
(2.9
|
)
|
||||
Total other (income) expense, net
|
$
|
(0.2
|
)
|
|
$
|
(0.5
|
)
|
|
$
|
(12.0
|
)
|
|
$
|
13.3
|
|
Three Months Ended September 30, 2017
(In millions) |
Pre-Tax Amount
|
|
Tax Benefit/ (Expense)
|
|
After-Tax Amount
|
||||||
Defined benefit pension and other postretirement plans:
|
|
|
|
|
|
||||||
Amortization of net prior service credit included in net periodic benefit cost
|
$
|
(0.6
|
)
|
|
$
|
0.2
|
|
|
$
|
(0.4
|
)
|
Amortization of net deferred actuarial loss included in net periodic benefit cost
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|||
Benefit plans, net
|
(0.5
|
)
|
|
0.2
|
|
|
(0.3
|
)
|
|||
Currency translation adjustments(1)
|
(3.6
|
)
|
|
(8.5
|
)
|
|
(12.1
|
)
|
|||
Gain (loss) from hedging activities
|
0.7
|
|
|
(1.1
|
)
|
|
(0.4
|
)
|
|||
Other comprehensive income (loss) attributable to W. R. Grace & Co. shareholders
|
$
|
(3.4
|
)
|
|
$
|
(9.4
|
)
|
|
$
|
(12.8
|
)
|
Nine Months Ended September 30, 2017
(In millions) |
Pre-Tax Amount
|
|
Tax Benefit/ (Expense)
|
|
After-Tax Amount
|
||||||
Defined benefit pension and other postretirement plans:
|
|
|
|
|
|
||||||
Amortization of net prior service credit included in net periodic benefit cost
|
$
|
(1.8
|
)
|
|
$
|
0.6
|
|
|
$
|
(1.2
|
)
|
Amortization of net deferred actuarial loss included in net periodic benefit cost
|
0.3
|
|
|
(0.1
|
)
|
|
0.2
|
|
|||
Benefit plans, net
|
(1.5
|
)
|
|
0.5
|
|
|
(1.0
|
)
|
|||
Currency translation adjustments
|
(17.9
|
)
|
|
(3.9
|
)
|
|
(21.8
|
)
|
|||
Gain (loss) from hedging activities
|
1.5
|
|
|
(1.4
|
)
|
|
0.1
|
|
|||
Other comprehensive income (loss) attributable to W. R. Grace & Co. shareholders
|
$
|
(17.9
|
)
|
|
$
|
(4.8
|
)
|
|
$
|
(22.7
|
)
|
Three Months Ended September 30, 2016
(In millions) |
Pre-Tax Amount
|
|
Tax Benefit/ (Expense)
|
|
After-Tax Amount
|
||||||
Defined benefit pension and other postretirement plans:
|
|
|
|
|
|
||||||
Amortization of net prior service credit included in net periodic benefit cost
|
$
|
(0.6
|
)
|
|
$
|
0.2
|
|
|
$
|
(0.4
|
)
|
Amortization of net deferred actuarial loss included in net periodic benefit cost
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|||
Benefit plans, net
|
(0.5
|
)
|
|
0.2
|
|
|
(0.3
|
)
|
|||
Currency translation adjustments
|
(2.3
|
)
|
|
—
|
|
|
(2.3
|
)
|
|||
Gain (loss) from hedging activities
|
0.9
|
|
|
(0.3
|
)
|
|
0.6
|
|
|||
Other comprehensive income (loss) attributable to W. R. Grace & Co. shareholders
|
$
|
(1.9
|
)
|
|
$
|
(0.1
|
)
|
|
$
|
(2.0
|
)
|
Nine Months Ended September 30, 2016
(In millions) |
Pre-Tax Amount
|
|
Tax Benefit/ (Expense)
|
|
After-Tax Amount
|
||||||
Defined benefit pension and other postretirement plans:
|
|
|
|
|
|
||||||
Amortization of net prior service credit included in net periodic benefit cost
|
$
|
(1.9
|
)
|
|
$
|
0.7
|
|
|
$
|
(1.2
|
)
|
Amortization of net deferred actuarial loss included in net periodic benefit cost
|
0.4
|
|
|
(0.2
|
)
|
|
0.2
|
|
|||
Benefit plans, net
|
(1.5
|
)
|
|
0.5
|
|
|
(1.0
|
)
|
|||
Currency translation adjustments
|
(6.4
|
)
|
|
—
|
|
|
(6.4
|
)
|
|||
Gain (loss) from hedging activities
|
(4.2
|
)
|
|
1.5
|
|
|
(2.7
|
)
|
|||
Other comprehensive income (loss) attributable to W. R. Grace & Co. shareholders
|
$
|
(12.1
|
)
|
|
$
|
2.0
|
|
|
$
|
(10.1
|
)
|
Nine Months Ended September 30, 2017
(In millions) |
Defined Benefit Pension and Other Postretirement Plans
|
|
Currency Translation Adjustments
|
|
Gain (Loss) from Hedging Activities
|
|
Total
|
||||||||
Beginning balance
|
$
|
2.2
|
|
|
$
|
67.6
|
|
|
$
|
(3.4
|
)
|
|
$
|
66.4
|
|
Other comprehensive income (loss) before reclassifications
|
—
|
|
|
(21.8
|
)
|
|
(1.6
|
)
|
|
(23.4
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
(1.0
|
)
|
|
—
|
|
|
1.7
|
|
|
0.7
|
|
||||
Net current-period other comprehensive income (loss)
|
(1.0
|
)
|
|
(21.8
|
)
|
|
0.1
|
|
|
(22.7
|
)
|
||||
Ending balance
|
$
|
1.2
|
|
|
$
|
45.8
|
|
|
$
|
(3.3
|
)
|
|
$
|
43.7
|
|
Nine Months Ended September 30, 2016
(In millions) |
Defined Benefit Pension and Other Postretirement Plans
|
|
Currency Translation Adjustments
|
|
Gain (Loss) from Hedging Activities
|
|
Total
|
||||||||
Beginning balance
|
$
|
3.0
|
|
|
$
|
(66.1
|
)
|
|
$
|
(3.7
|
)
|
|
$
|
(66.8
|
)
|
Other comprehensive income (loss) before reclassifications
|
—
|
|
|
(6.4
|
)
|
|
(4.3
|
)
|
|
(10.7
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
(1.0
|
)
|
|
—
|
|
|
1.6
|
|
|
0.6
|
|
||||
Net current-period other comprehensive income (loss)
|
(1.0
|
)
|
|
(6.4
|
)
|
|
(2.7
|
)
|
|
(10.1
|
)
|
||||
Distribution of GCP
|
(0.2
|
)
|
|
135.5
|
|
|
—
|
|
|
135.3
|
|
||||
Ending balance
|
$
|
1.8
|
|
|
$
|
63.0
|
|
|
$
|
(6.4
|
)
|
|
$
|
58.4
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(In millions, except per share amounts)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Numerators
|
|
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations attributable to W. R. Grace & Co. shareholders
|
$
|
47.4
|
|
|
$
|
41.2
|
|
|
$
|
134.2
|
|
|
$
|
89.7
|
|
Income (loss) from discontinued operations, net of income taxes
|
—
|
|
|
(1.6
|
)
|
|
—
|
|
|
(10.9
|
)
|
||||
Net income (loss) attributable to W. R. Grace & Co. shareholders
|
$
|
47.4
|
|
|
$
|
39.6
|
|
|
$
|
134.2
|
|
|
$
|
78.8
|
|
Denominators
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares—basic calculation
|
67.9
|
|
|
70.3
|
|
|
68.2
|
|
|
70.5
|
|
||||
Dilutive effect of employee stock options
|
0.1
|
|
|
0.4
|
|
|
0.1
|
|
|
0.4
|
|
||||
Weighted average common shares—diluted calculation
|
68.0
|
|
|
70.7
|
|
|
68.3
|
|
|
70.9
|
|
||||
Basic earnings per share attributable to W. R. Grace & Co. shareholders
|
|
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations
|
$
|
0.70
|
|
|
$
|
0.59
|
|
|
$
|
1.97
|
|
|
$
|
1.27
|
|
Income (loss) from discontinued operations, net of income taxes
|
—
|
|
|
(0.03
|
)
|
|
—
|
|
|
(0.15
|
)
|
||||
Net income (loss)
|
$
|
0.70
|
|
|
$
|
0.56
|
|
|
$
|
1.97
|
|
|
$
|
1.12
|
|
Diluted earnings per share attributable to W. R. Grace & Co. shareholders
|
|
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations
|
$
|
0.70
|
|
|
$
|
0.58
|
|
|
$
|
1.96
|
|
|
$
|
1.27
|
|
Income (loss) from discontinued operations, net of income taxes
|
—
|
|
|
(0.02
|
)
|
|
—
|
|
|
(0.16
|
)
|
||||
Net income (loss)
|
$
|
0.70
|
|
|
$
|
0.56
|
|
|
$
|
1.96
|
|
|
$
|
1.11
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(In millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net Sales
|
|
|
|
|
|
|
|
||||||||
Catalysts Technologies
|
$
|
317.5
|
|
|
$
|
295.8
|
|
|
$
|
931.8
|
|
|
$
|
834.8
|
|
Materials Technologies
|
112.0
|
|
|
108.7
|
|
|
325.2
|
|
|
323.0
|
|
||||
Total
|
$
|
429.5
|
|
|
$
|
404.5
|
|
|
$
|
1,257.0
|
|
|
$
|
1,157.8
|
|
Adjusted EBIT
|
|
|
|
|
|
|
|
||||||||
Catalysts Technologies segment operating income
|
$
|
103.6
|
|
|
$
|
94.3
|
|
|
$
|
286.1
|
|
|
$
|
260.1
|
|
Materials Technologies segment operating income
|
26.4
|
|
|
26.4
|
|
|
75.4
|
|
|
75.0
|
|
||||
Corporate costs
|
(18.5
|
)
|
|
(14.9
|
)
|
|
(52.9
|
)
|
|
(44.4
|
)
|
||||
Certain pension costs
|
(3.4
|
)
|
|
(3.1
|
)
|
|
(9.7
|
)
|
|
(9.3
|
)
|
||||
Total
|
$
|
108.1
|
|
|
$
|
102.7
|
|
|
$
|
298.9
|
|
|
$
|
281.4
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(In millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Grace Adjusted EBIT
|
$
|
108.1
|
|
|
$
|
102.7
|
|
|
$
|
298.9
|
|
|
$
|
281.4
|
|
(Costs) benefit related to legacy product, environmental and other claims
|
(8.5
|
)
|
|
(13.1
|
)
|
|
(25.5
|
)
|
|
(24.2
|
)
|
||||
Restructuring and repositioning expenses
|
(9.3
|
)
|
|
(5.6
|
)
|
|
(17.0
|
)
|
|
(28.6
|
)
|
||||
Accounts receivable reserve—Venezuela
|
(10.0
|
)
|
|
—
|
|
|
(10.0
|
)
|
|
—
|
|
||||
Pension MTM adjustment and other related costs, net
|
—
|
|
|
0.2
|
|
|
(1.9
|
)
|
|
1.1
|
|
||||
Income and expense items related to divested businesses
|
(0.3
|
)
|
|
(0.1
|
)
|
|
(1.3
|
)
|
|
(0.3
|
)
|
||||
Third-party acquisition-related costs
|
(0.4
|
)
|
|
—
|
|
|
(0.4
|
)
|
|
(2.5
|
)
|
||||
Gain (loss) on sale of product line
|
(0.4
|
)
|
|
—
|
|
|
(0.4
|
)
|
|
0.7
|
|
||||
Loss on early extinguishment of debt
|
—
|
|
|
—
|
|
|
—
|
|
|
(11.1
|
)
|
||||
Amortization of acquired inventory fair value adjustment
|
—
|
|
|
(4.1
|
)
|
|
—
|
|
|
(4.1
|
)
|
||||
Interest expense, net
|
(20.2
|
)
|
|
(19.4
|
)
|
|
(59.0
|
)
|
|
(60.6
|
)
|
||||
Net income (loss) attributable to noncontrolling interests
|
(0.3
|
)
|
|
0.1
|
|
|
(0.7
|
)
|
|
(0.3
|
)
|
||||
Income (loss) from continuing operations before income taxes
|
$
|
58.7
|
|
|
$
|
60.7
|
|
|
$
|
182.7
|
|
|
$
|
151.5
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(In millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net Sales
|
|
|
|
|
|
|
|
||||||||
United States
|
$
|
106.7
|
|
|
$
|
115.8
|
|
|
$
|
319.3
|
|
|
$
|
336.4
|
|
Canada
|
12.1
|
|
|
11.8
|
|
|
36.0
|
|
|
34.1
|
|
||||
Total North America
|
118.8
|
|
|
127.6
|
|
|
355.3
|
|
|
370.5
|
|
||||
Europe Middle East Africa
|
173.2
|
|
|
171.6
|
|
|
485.8
|
|
|
472.4
|
|
||||
Asia Pacific
|
119.6
|
|
|
76.7
|
|
|
335.0
|
|
|
231.9
|
|
||||
Latin America
|
17.9
|
|
|
28.6
|
|
|
80.9
|
|
|
83.0
|
|
||||
Total
|
$
|
429.5
|
|
|
$
|
404.5
|
|
|
$
|
1,257.0
|
|
|
$
|
1,157.8
|
|
(In millions)
|
September 30,
2017 |
|
December 31,
2016 |
||||
Summary Balance Sheet information:
|
|
|
|
||||
Current assets
|
$
|
268.5
|
|
|
$
|
249.2
|
|
Noncurrent assets
|
85.5
|
|
|
84.8
|
|
||
Total assets
|
$
|
354.0
|
|
|
$
|
334.0
|
|
|
|
|
|
||||
Current liabilities
|
$
|
121.7
|
|
|
$
|
102.0
|
|
Noncurrent liabilities
|
—
|
|
|
0.3
|
|
||
Total liabilities
|
$
|
121.7
|
|
|
$
|
102.3
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(In millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net sales
|
$
|
113.5
|
|
|
$
|
110.1
|
|
|
$
|
321.4
|
|
|
$
|
255.8
|
|
Costs and expenses applicable to net sales
|
100.1
|
|
|
89.8
|
|
|
273.7
|
|
|
213.2
|
|
||||
Income before income taxes
|
10.4
|
|
|
18.2
|
|
|
37.2
|
|
|
37.4
|
|
||||
Net income
|
9.6
|
|
|
17.0
|
|
|
35.8
|
|
|
35.9
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(In millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Grace sales of catalysts to ART
|
$
|
54.5
|
|
|
$
|
56.1
|
|
|
$
|
159.0
|
|
|
$
|
156.4
|
|
Mark-up on Grace's sales to ART included as a reduction of Grace's cost of goods sold
|
1.1
|
|
|
1.1
|
|
|
3.1
|
|
|
3.1
|
|
||||
Charges for fixed costs, research and development, selling, general and administrative services, and depreciation to ART
|
10.4
|
|
|
6.2
|
|
|
31.2
|
|
|
18.5
|
|
(in millions)
|
September 30,
2017 |
|
December 31,
2016 |
||||
Accounts receivable
|
$
|
14.5
|
|
|
$
|
14.9
|
|
Noncurrent asset
|
28.0
|
|
|
27.0
|
|
||
Accounts payable
|
24.5
|
|
|
28.7
|
|
||
Debt payable within one year
|
7.7
|
|
|
7.6
|
|
||
Debt payable after one year
|
33.7
|
|
|
31.9
|
|
||
Noncurrent liability
|
28.0
|
|
|
27.0
|
|
(In millions)
|
Nine Months Ended September 30, 2016
|
||
Net sales
|
$
|
99.6
|
|
Cost of goods sold
|
62.6
|
|
|
Gross profit
|
37.0
|
|
|
Selling, general and administrative expenses
|
21.6
|
|
|
Research and development expenses
|
1.7
|
|
|
Repositioning expenses
|
22.0
|
|
|
Interest expense and related financing costs
|
0.7
|
|
|
Other expense, net
|
4.4
|
|
|
Total costs and expenses
|
50.4
|
|
|
(Loss) Income from discontinued operations before income taxes
|
(13.4
|
)
|
|
Benefit from (provision for) income taxes
|
2.6
|
|
|
(Loss) Income from discontinued operations after income taxes
|
(10.8
|
)
|
|
Less: Net income attributable to noncontrolling interests
|
(0.1
|
)
|
|
Net (loss) income from discontinued operations
|
$
|
(10.9
|
)
|
•
|
Net sales
increased
6.2%
to
$429.5 million
.
|
•
|
Income from continuing operations attributable to Grace
increased
15.0%
to
$47.4 million
.
|
•
|
Diluted earnings per share from continuing operations increased
20.7%
to
$0.70
per diluted share.
|
•
|
Adjusted EPS
increased
12.5%
to
$0.90
per diluted share.
|
•
|
Adjusted EBIT
increased
5.3%
to
$108.1 million
.
|
•
|
Fluid catalytic cracking catalysts, also called 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 (HPC), most of which are marketed through our ART joint venture with Chevron 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).
|
•
|
Polyolefin catalysts and catalyst supports, also called specialty catalysts (SC), 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; chemical catalysts used in a variety of industrial, environmental and consumer applications; and gas-phase polypropylene process technology, which provides our licensees with a reliable capability to manufacture polypropylene products for a broad array of end-use applications.
|
•
|
Coatings and print media applications, functional additives that provide matting effects and corrosion protection for industrial and consumer coatings and media and paper products to enhance quality in ink jet coatings.
|
•
|
Consumer/Pharma 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; as well as pharmaceutical, life science and related applications including silica-based separation media, excipients and pharmaceutical intermediates.
|
•
|
Chemical Process applications, such as tires and rubber, plastics, precision investment casting, refractory, insulating glass windows, adsorbents for use in petrochemical and natural gas processes and biofuels, various functions such as reinforcement, high temperature binding and moisture scavenging.
|
Analysis of Operations
(In millions, except per share amounts)
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||
2017
|
|
2016
|
|
% Change
|
|
2017
|
|
2016
|
|
% Change
|
|||||||||||
Net sales:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Catalysts Technologies
|
$
|
317.5
|
|
|
$
|
295.8
|
|
|
7.3
|
%
|
|
$
|
931.8
|
|
|
$
|
834.8
|
|
|
11.6
|
%
|
Materials Technologies
|
112.0
|
|
|
108.7
|
|
|
3.0
|
%
|
|
325.2
|
|
|
323.0
|
|
|
0.7
|
%
|
||||
Total Grace net sales
|
$
|
429.5
|
|
|
$
|
404.5
|
|
|
6.2
|
%
|
|
$
|
1,257.0
|
|
|
$
|
1,157.8
|
|
|
8.6
|
%
|
Net sales by region:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
North America
|
$
|
118.8
|
|
|
$
|
127.6
|
|
|
(6.9
|
)%
|
|
$
|
355.3
|
|
|
$
|
370.5
|
|
|
(4.1
|
)%
|
Europe Middle East Africa
|
173.2
|
|
|
171.6
|
|
|
0.9
|
%
|
|
485.8
|
|
|
472.4
|
|
|
2.8
|
%
|
||||
Asia Pacific
|
119.6
|
|
|
76.7
|
|
|
55.9
|
%
|
|
335.0
|
|
|
231.9
|
|
|
44.5
|
%
|
||||
Latin America
|
17.9
|
|
|
28.6
|
|
|
(37.4
|
)%
|
|
80.9
|
|
|
83.0
|
|
|
(2.5
|
)%
|
||||
Total net sales by region
|
$
|
429.5
|
|
|
$
|
404.5
|
|
|
6.2
|
%
|
|
$
|
1,257.0
|
|
|
$
|
1,157.8
|
|
|
8.6
|
%
|
Performance measures:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted EBIT(A):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Catalysts Technologies segment operating income
|
$
|
103.6
|
|
|
$
|
94.3
|
|
|
9.9
|
%
|
|
$
|
286.1
|
|
|
$
|
260.1
|
|
|
10.0
|
%
|
Materials Technologies segment operating income
|
26.4
|
|
|
26.4
|
|
|
—
|
%
|
|
75.4
|
|
|
75.0
|
|
|
0.5
|
%
|
||||
Corporate costs
|
(18.5
|
)
|
|
(14.9
|
)
|
|
(24.2
|
)%
|
|
(52.9
|
)
|
|
(44.4
|
)
|
|
(19.1
|
)%
|
||||
Certain pension costs(B)
|
(3.4
|
)
|
|
(3.1
|
)
|
|
(9.7
|
)%
|
|
(9.7
|
)
|
|
(9.3
|
)
|
|
(4.3
|
)%
|
||||
Adjusted EBIT
|
108.1
|
|
|
102.7
|
|
|
5.3
|
%
|
|
298.9
|
|
|
281.4
|
|
|
6.2
|
%
|
||||
(Costs) benefit related to legacy product, environmental and other claims
|
(8.5
|
)
|
|
(13.1
|
)
|
|
|
|
(25.5
|
)
|
|
(24.2
|
)
|
|
|
||||||
Restructuring and repositioning expenses
|
(9.3
|
)
|
|
(5.6
|
)
|
|
|
|
(17.0
|
)
|
|
(28.6
|
)
|
|
|
||||||
Accounts receivable reserve—Venezuela
|
(10.0
|
)
|
|
—
|
|
|
|
|
(10.0
|
)
|
|
—
|
|
|
|
||||||
Pension MTM adjustment and other related costs, net
|
—
|
|
|
0.2
|
|
|
|
|
(1.9
|
)
|
|
1.1
|
|
|
|
||||||
Income and expense items related to divested businesses
|
(0.3
|
)
|
|
(0.1
|
)
|
|
|
|
(1.3
|
)
|
|
(0.3
|
)
|
|
|
||||||
Third-party acquisition-related costs
|
(0.4
|
)
|
|
—
|
|
|
|
|
(0.4
|
)
|
|
(2.5
|
)
|
|
|
||||||
Gain (loss) on sale of product line
|
(0.4
|
)
|
|
—
|
|
|
|
|
(0.4
|
)
|
|
0.7
|
|
|
|
||||||
Loss on early extinguishment of debt
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
(11.1
|
)
|
|
|
||||||
Amortization of acquired inventory fair value adjustment
|
—
|
|
|
(4.1
|
)
|
|
|
|
—
|
|
|
(4.1
|
)
|
|
|
||||||
Interest expense, net
|
(20.2
|
)
|
|
(19.4
|
)
|
|
(4.1
|
)%
|
|
(59.0
|
)
|
|
(60.6
|
)
|
|
2.6
|
%
|
||||
(Provision for) benefit from income taxes
|
(11.6
|
)
|
|
(19.4
|
)
|
|
40.2
|
%
|
|
(49.2
|
)
|
|
(62.1
|
)
|
|
20.8
|
%
|
||||
Income (loss) from continuing operations attributable to W. R. Grace & Co. shareholders
|
$
|
47.4
|
|
|
$
|
41.2
|
|
|
15.0
|
%
|
|
$
|
134.2
|
|
|
$
|
89.7
|
|
|
49.6
|
%
|
Diluted EPS from continuing operations
|
$
|
0.70
|
|
|
$
|
0.58
|
|
|
20.7
|
%
|
|
$
|
1.96
|
|
|
$
|
1.27
|
|
|
54.3
|
%
|
Adjusted EPS
|
$
|
0.90
|
|
|
$
|
0.80
|
|
|
12.5
|
%
|
|
$
|
2.42
|
|
|
$
|
2.15
|
|
|
12.6
|
%
|
Analysis of Operations
(In millions)
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||
2017
|
|
2016
|
|
% Change
|
|
2017
|
|
2016
|
|
% Change
|
|||||||||||
Adjusted performance measures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Gross Margin:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Catalysts Technologies
|
41.4
|
%
|
|
44.6
|
%
|
|
(3.2) pts
|
|
|
40.4
|
%
|
|
44.8
|
%
|
|
(4.4) pts
|
|
||||
Materials Technologies
|
38.4
|
%
|
|
37.8
|
%
|
|
0.6 pts
|
|
|
38.3
|
%
|
|
39.3
|
%
|
|
(1.0) pts
|
|
||||
Adjusted Gross Margin
|
40.6
|
%
|
|
42.8
|
%
|
|
(2.2) pts
|
|
|
39.8
|
%
|
|
43.2
|
%
|
|
(3.4) pts
|
|
||||
Amortization of acquired inventory fair value adjustment
|
—
|
%
|
|
(1.0
|
)%
|
|
1.0 pts
|
|
|
—
|
%
|
|
(0.4
|
)%
|
|
0.4 pts
|
|
||||
Pension costs in cost of goods sold
|
(0.2
|
)%
|
|
(0.2
|
)%
|
|
0.0 pts
|
|
|
(0.3
|
)%
|
|
(0.1
|
)%
|
|
(0.2) pts
|
|
||||
Total Grace
|
40.4
|
%
|
|
41.6
|
%
|
|
(1.2) pts
|
|
|
39.5
|
%
|
|
42.7
|
%
|
|
(3.2) pts
|
|
||||
Adjusted EBIT:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Catalysts Technologies
|
$
|
103.6
|
|
|
$
|
94.3
|
|
|
9.9
|
%
|
|
$
|
286.1
|
|
|
$
|
260.1
|
|
|
10.0
|
%
|
Materials Technologies
|
26.4
|
|
|
26.4
|
|
|
—
|
%
|
|
75.4
|
|
|
75.0
|
|
|
0.5
|
%
|
||||
Corporate, pension, and other
|
(21.9
|
)
|
|
(18.0
|
)
|
|
(21.7
|
)%
|
|
(62.6
|
)
|
|
(53.7
|
)
|
|
(16.6
|
)%
|
||||
Total Grace
|
108.1
|
|
|
102.7
|
|
|
5.3
|
%
|
|
298.9
|
|
|
281.4
|
|
|
6.2
|
%
|
||||
Depreciation and amortization:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Catalysts Technologies
|
$
|
22.2
|
|
|
$
|
21.0
|
|
|
5.7
|
%
|
|
$
|
64.6
|
|
|
$
|
56.5
|
|
|
14.3
|
%
|
Materials Technologies
|
5.0
|
|
|
5.0
|
|
|
—
|
%
|
|
14.5
|
|
|
14.7
|
|
|
(1.4
|
)%
|
||||
Corporate
|
1.2
|
|
|
1.0
|
|
|
20.0
|
%
|
|
3.5
|
|
|
2.6
|
|
|
34.6
|
%
|
||||
Total Grace
|
28.4
|
|
|
27.0
|
|
|
5.2
|
%
|
|
82.6
|
|
|
73.8
|
|
|
11.9
|
%
|
||||
Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Catalysts Technologies
|
$
|
125.8
|
|
|
$
|
115.3
|
|
|
9.1
|
%
|
|
$
|
350.7
|
|
|
$
|
316.6
|
|
|
10.8
|
%
|
Materials Technologies
|
31.4
|
|
|
31.4
|
|
|
—
|
%
|
|
89.9
|
|
|
89.7
|
|
|
0.2
|
%
|
||||
Corporate, pension, and other
|
(20.7
|
)
|
|
(17.0
|
)
|
|
(21.8
|
)%
|
|
(59.1
|
)
|
|
(51.1
|
)
|
|
(15.7
|
)%
|
||||
Total Grace
|
136.5
|
|
|
129.7
|
|
|
5.2
|
%
|
|
381.5
|
|
|
355.2
|
|
|
7.4
|
%
|
||||
Adjusted EBIT margin:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Catalysts Technologies
|
32.6
|
%
|
|
31.9
|
%
|
|
0.7 pts
|
|
|
30.7
|
%
|
|
31.2
|
%
|
|
(0.5) pts
|
|
||||
Materials Technologies
|
23.6
|
%
|
|
24.3
|
%
|
|
(0.7) pts
|
|
|
23.2
|
%
|
|
23.2
|
%
|
|
0.0 pts
|
|
||||
Total Grace
|
25.2
|
%
|
|
25.4
|
%
|
|
(0.2) pts
|
|
|
23.8
|
%
|
|
24.3
|
%
|
|
(0.5) pts
|
|
||||
Adjusted EBITDA margin:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Catalysts Technologies
|
39.6
|
%
|
|
39.0
|
%
|
|
0.6 pts
|
|
|
37.6
|
%
|
|
37.9
|
%
|
|
(0.3) pts
|
|
||||
Materials Technologies
|
28.0
|
%
|
|
28.9
|
%
|
|
(0.9) pts
|
|
|
27.6
|
%
|
|
27.8
|
%
|
|
(0.2) pts
|
|
||||
Total Grace
|
31.8
|
%
|
|
32.1
|
%
|
|
(0.3) pts
|
|
|
30.4
|
%
|
|
30.7
|
%
|
|
(0.3) pts
|
|
Analysis of Operations
(In millions)
|
Four Quarters Ended
|
||||||
September 30,
2017 |
|
December 31, 2016
|
|||||
Calculation of Adjusted EBIT Return On Invested Capital (trailing four quarters):
|
|||||||
Adjusted EBIT
|
$
|
417.8
|
|
|
$
|
400.3
|
|
Invested Capital:
|
|
|
|
||||
Trade accounts receivable
|
253.1
|
|
|
273.9
|
|
||
Inventories
|
239.5
|
|
|
228.0
|
|
||
Accounts payable
|
(195.2
|
)
|
|
(195.4
|
)
|
||
|
297.4
|
|
|
306.5
|
|
||
Other current assets (excluding income taxes)
|
31.1
|
|
|
32.0
|
|
||
Properties and equipment, net
|
762.8
|
|
|
729.6
|
|
||
Goodwill
|
401.7
|
|
|
394.2
|
|
||
Technology and other intangible assets, net
|
259.2
|
|
|
269.1
|
|
||
Investment in unconsolidated affiliate
|
118.0
|
|
|
117.6
|
|
||
Other assets (excluding capitalized financing fees)
|
32.9
|
|
|
34.9
|
|
||
Other current liabilities (excluding income taxes, legacy environmental matters, accrued interest, and restructuring)
|
(129.8
|
)
|
|
(144.4
|
)
|
||
Other liabilities (excluding legacy environmental matters)
|
(118.7
|
)
|
|
(89.3
|
)
|
||
Total invested capital
|
$
|
1,654.6
|
|
|
$
|
1,650.2
|
|
Adjusted EBIT Return On Invested Capital
|
25.3
|
%
|
|
24.3
|
%
|
(A)
|
Grace's segment operating income includes only Grace's share of income of consolidated and unconsolidated joint ventures.
|
(B)
|
Certain pension costs include only ongoing costs recognized quarterly, which include service and interest costs, expected returns on plan assets, and amortization of prior service costs/credits. Catalysts Technologies and Materials Technologies segment operating income and corporate costs do not include any amounts for pension expense. Other pension related costs including annual mark-to-market adjustments and actuarial gains and losses are excluded from Adjusted EBIT. These amounts are not used by management to evaluate the performance of Grace's businesses and significantly affect the peer-to-peer and period-to-period comparability of our financial results. Mark-to-market adjustments and actuarial gains and losses relate primarily to changes in financial market values and actuarial assumptions and are not directly related to the operation of Grace's businesses.
|
|
Three Months Ended September 30, 2017
as a Percentage Increase (Decrease) from Three Months Ended September 30, 2016 |
||||||||||
Net Sales Variance Analysis
|
Volume
|
|
Price
|
|
Currency Translation
|
|
Total
|
||||
Catalysts Technologies
|
6.8
|
%
|
|
(0.5
|
)%
|
|
1.0
|
%
|
|
7.3
|
%
|
Materials Technologies
|
0.2
|
%
|
|
0.1
|
%
|
|
2.7
|
%
|
|
3.0
|
%
|
Net sales
|
5.1
|
%
|
|
(0.4
|
)%
|
|
1.5
|
%
|
|
6.2
|
%
|
By Region:
|
|
|
|
|
|
|
|
||||
North America
|
(4.8
|
)%
|
|
(2.1
|
)%
|
|
—
|
%
|
|
(6.9
|
)%
|
Europe Middle East Africa
|
(2.0
|
)%
|
|
(0.7
|
)%
|
|
3.6
|
%
|
|
0.9
|
%
|
Asia Pacific
|
53.4
|
%
|
|
2.8
|
%
|
|
(0.3
|
)%
|
|
55.9
|
%
|
Latin America
|
(38.7
|
)%
|
|
1.1
|
%
|
|
0.2
|
%
|
|
(37.4
|
)%
|
|
Nine Months Ended September 30, 2017
as a Percentage Increase (Decrease) from Nine Months Ended September 30, 2016 |
||||||||||
Net Sales Variance Analysis
|
Volume
|
|
Price
|
|
Currency Translation
|
|
Total
|
||||
Catalysts Technologies
|
11.9
|
%
|
|
—
|
%
|
|
(0.3
|
)%
|
|
11.6
|
%
|
Materials Technologies
|
0.6
|
%
|
|
(0.2
|
)%
|
|
0.3
|
%
|
|
0.7
|
%
|
Net sales
|
8.8
|
%
|
|
(0.1
|
)%
|
|
(0.1
|
)%
|
|
8.6
|
%
|
By Region:
|
|
|
|
|
|
|
|
||||
North America
|
(4.0
|
)%
|
|
(0.1
|
)%
|
|
—
|
%
|
|
(4.1
|
)%
|
Europe Middle East Africa
|
3.4
|
%
|
|
(0.3
|
)%
|
|
(0.3
|
)%
|
|
2.8
|
%
|
Asia Pacific
|
44.2
|
%
|
|
0.6
|
%
|
|
(0.3
|
)%
|
|
44.5
|
%
|
Latin America
|
(3.4
|
)%
|
|
(0.2
|
)%
|
|
1.1
|
%
|
|
(2.5
|
)%
|
|
Three Months Ended September 30,
|
||||||||||||||||||||||||||||||
|
2017
|
|
2016
|
||||||||||||||||||||||||||||
(In millions, except per share amounts)
|
Pre-
Tax
|
|
Tax Effect
|
|
After-
Tax
|
|
Per
Share
|
|
Pre-
Tax
|
|
Tax Effect
|
|
After-
Tax
|
|
Per
Share
|
||||||||||||||||
Diluted earnings per share from continuing operations
|
|
|
|
|
|
|
|
|
|
$
|
0.70
|
|
|
|
|
|
|
|
|
|
|
|
$
|
0.58
|
|
||||||
Accounts receivable reserve—Venezuela
|
$
|
10.0
|
|
|
$
|
3.5
|
|
|
$
|
6.5
|
|
|
0.10
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
|
||
Restructuring and repositioning expenses
|
9.3
|
|
|
2.7
|
|
|
6.6
|
|
|
0.10
|
|
|
5.6
|
|
|
1.4
|
|
|
4.2
|
|
|
0.06
|
|
||||||||
Costs (benefit) related to legacy product, environmental and other claims
|
8.5
|
|
|
3.0
|
|
|
5.5
|
|
|
0.08
|
|
|
13.1
|
|
|
4.9
|
|
|
8.2
|
|
|
0.12
|
|
||||||||
Third-party acquisition-related costs
|
0.4
|
|
|
0.1
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Loss (gain) on sale of product line
|
0.4
|
|
|
0.1
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Income and expense items related to divested businesses
|
0.3
|
|
|
0.1
|
|
|
0.2
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
||||||||
Amortization of acquired inventory fair value adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4.1
|
|
|
1.5
|
|
|
2.6
|
|
|
0.04
|
|
||||||||
Pension MTM adjustment and other related costs, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|
—
|
|
||||||||
Discrete tax items, including adjustments to uncertain tax positions
|
|
|
|
5.3
|
|
|
(5.3
|
)
|
|
(0.08
|
)
|
|
|
|
|
(0.3
|
)
|
|
0.3
|
|
|
—
|
|
||||||||
Adjusted EPS
|
|
|
|
|
|
|
|
|
|
$
|
0.90
|
|
|
|
|
|
|
|
|
|
|
|
$
|
0.80
|
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||||||||
|
2017
|
|
2016
|
||||||||||||||||||||||||||||
(In millions, except per share amounts)
|
Pre-
Tax
|
|
Tax Effect
|
|
After-
Tax
|
|
Per
Share
|
|
Pre-
Tax
|
|
Tax Effect
|
|
After-
Tax
|
|
Per
Share
|
||||||||||||||||
Diluted earnings per share from continuing operations
|
|
|
|
|
|
|
|
|
|
$
|
1.96
|
|
|
|
|
|
|
|
|
$
|
1.27
|
|
|||||||||
Costs (benefit) related to legacy product, environmental and other claims
|
$
|
25.5
|
|
|
$
|
9.4
|
|
|
$
|
16.1
|
|
|
0.24
|
|
|
$
|
24.2
|
|
|
$
|
9.0
|
|
|
$
|
15.2
|
|
|
0.21
|
|
||
Restructuring and repositioning expenses
|
17.0
|
|
|
6.0
|
|
|
11.0
|
|
|
0.16
|
|
|
28.6
|
|
|
9.5
|
|
|
19.1
|
|
|
0.27
|
|
||||||||
Accounts receivable reserve—Venezuela
|
10.0
|
|
|
3.5
|
|
|
6.5
|
|
|
0.10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Pension MTM adjustment and other related costs, net
|
1.9
|
|
|
0.7
|
|
|
1.2
|
|
|
0.02
|
|
|
(1.1
|
)
|
|
(0.3
|
)
|
|
(0.8
|
)
|
|
(0.01
|
)
|
||||||||
Income and expense items related to divested businesses
|
1.3
|
|
|
0.5
|
|
|
0.8
|
|
|
0.01
|
|
|
0.3
|
|
|
0.1
|
|
|
0.2
|
|
|
—
|
|
||||||||
Third-party acquisition-related costs
|
0.4
|
|
|
0.1
|
|
|
0.3
|
|
|
—
|
|
|
2.5
|
|
|
0.7
|
|
|
1.8
|
|
|
0.03
|
|
||||||||
Loss (gain) on sale of product line
|
0.4
|
|
|
0.1
|
|
|
0.3
|
|
|
—
|
|
|
(0.7
|
)
|
|
(0.3
|
)
|
|
(0.4
|
)
|
|
(0.01
|
)
|
||||||||
Loss on early extinguishment of debt
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11.1
|
|
|
4.1
|
|
|
7.0
|
|
|
0.10
|
|
||||||||
Amortization of acquired inventory fair value adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4.1
|
|
|
1.5
|
|
|
2.6
|
|
|
0.04
|
|
||||||||
Discrete tax items, including adjustments to uncertain tax positions
|
|
|
|
4.9
|
|
|
(4.9
|
)
|
|
(0.07
|
)
|
|
|
|
|
(17.7
|
)
|
|
17.7
|
|
|
0.25
|
|
||||||||
Adjusted EPS
|
|
|
|
|
|
|
|
|
|
$
|
2.42
|
|
|
|
|
|
|
|
|
|
|
|
$
|
2.15
|
|
(In millions)
|
Maximum Borrowing Amount
|
|
Available Liquidity
|
|
Expiration Date
|
||||
Germany
|
$
|
58.7
|
|
|
$
|
5.5
|
|
|
12/31/2017
|
Other countries
|
51.4
|
|
|
29.3
|
|
|
Various through 2020
|
||
Total
|
$
|
110.1
|
|
|
$
|
34.8
|
|
|
|
|
Nine Months Ended September 30,
|
||||||
(In millions)
|
2017
|
|
2016
|
||||
Net cash provided by (used for) operating activities from continuing operations
|
$
|
267.5
|
|
|
$
|
207.6
|
|
Net cash provided by (used for) investing activities from continuing operations
|
(90.0
|
)
|
|
(324.6
|
)
|
||
Net cash provided by (used for) financing activities from continuing operations
|
(99.6
|
)
|
|
87.4
|
|
||
Effect of currency exchange rate changes on cash and cash equivalents
|
7.2
|
|
|
2.7
|
|
||
Increase (decrease) in cash and cash equivalents from continuing operations
|
85.1
|
|
|
(26.9
|
)
|
||
Increase (decrease) in cash and cash equivalents from discontinued operations
|
—
|
|
|
44.8
|
|
||
Net increase (decrease) in cash and cash equivalents
|
85.1
|
|
|
17.9
|
|
||
Less: cash and cash equivalents of discontinued operations
|
—
|
|
|
(143.4
|
)
|
||
Cash and cash equivalents, beginning of period
|
90.6
|
|
|
329.9
|
|
||
Cash and cash equivalents, end of period
|
$
|
175.7
|
|
|
$
|
204.4
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(In millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
U.S. advance-funded plans
|
$
|
0.3
|
|
|
$
|
—
|
|
|
$
|
0.3
|
|
|
$
|
—
|
|
U.S. pay-as-you-go plans
|
$
|
2.1
|
|
|
$
|
2.0
|
|
|
$
|
5.8
|
|
|
$
|
5.6
|
|
Non-U.S. advance-funded plans
|
0.2
|
|
|
0.4
|
|
|
0.7
|
|
|
1.0
|
|
||||
Non-U.S. pay-as-you-go plans
|
1.8
|
|
|
1.7
|
|
|
5.4
|
|
|
5.5
|
|
||||
Total Cash Contributions
|
$
|
4.4
|
|
|
$
|
4.1
|
|
|
$
|
12.2
|
|
|
$
|
12.1
|
|
Period
|
|
Total number of shares purchased
(#)
|
|
Average price paid per share
($/share)
|
|
Total number of shares purchased as part of publicly announced plans or programs
(#)
|
|
Approximate dollar value of shares that may yet be purchased under the plans or programs
($ in millions)
|
||||
7/1/2017 - 7/31/2017
|
|
144,700
|
|
|
71.38
|
|
|
144,700
|
|
|
243.6
|
|
8/1/2017 - 8/31/2017
|
|
365,062
|
|
|
67.58
|
|
|
365,062
|
|
|
218.9
|
|
9/1/2017 - 9/30/2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
218.9
|
|
Total
|
|
509,762
|
|
|
68.66
|
|
|
509,762
|
|
|
|
|
•
|
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
|
3.1
|
|
|
Exhibit 3.01 to Form 8-K (filed 2/07/14) SEC File No.: 001-13953
|
|
3.2
|
|
|
Exhibit 3.01 to Form 8-K (filed 1/23/15) SEC File No.: 001-13953
|
|
15
|
|
|
Filed herewith
|
|
31(i).1
|
|
|
Filed herewith
|
|
31(i).2
|
|
|
Filed herewith
|
|
32
|
|
|
Filed herewith
|
|
95
|
|
|
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
|
*
|
Management contracts and compensatory plans, contracts or arrangements required to be filed as exhibits to this Report.
|
|
W. R. GRACE & CO.
(Registrant)
|
|
|
|
|
Date: November 2, 2017
|
By:
|
/s/ A. E. FESTA
|
|
|
A. E. Festa
(Chairman and
Chief Executive Officer)
|
|
|
|
Date: November 2, 2017
|
By:
|
/s/ THOMAS E. BLASER
|
|
|
Thomas E. Blaser
(Senior Vice President and
Chief Financial Officer)
|
|
|
|
Date: November 2, 2017
|
By:
|
/s/ WILLIAM C. DOCKMAN
|
|
|
William C. Dockman
(Vice President and Controller)
|
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 |
---|
DIRECTORS | AGE | BIO | OTHER DIRECTOR MEMBERSHIPS |
---|
No information found
No Customers Found
Suppliers
Supplier name | Ticker |
---|---|
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 |
---|