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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 June 30, 2018
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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 July 31, 2018
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Common Stock, $0.01 par value per share
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67,238,067 shares
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Three Months Ended June 30,
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Six Months Ended June 30,
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(In millions, except per share amounts)
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2018
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2017
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2018
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2017
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Net sales
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$
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485.7
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$
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429.5
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$
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917.2
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$
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827.5
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Cost of goods sold
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287.0
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262.3
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549.0
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507.1
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Gross profit
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198.7
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167.2
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368.2
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320.4
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Selling, general and administrative expenses
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82.2
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69.3
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151.5
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134.8
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Research and development expenses
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16.1
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13.6
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30.8
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27.5
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Provision for environmental remediation, net
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0.5
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13.2
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0.6
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13.2
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Equity in earnings of unconsolidated affiliate
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(8.2
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)
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(6.1
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)
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(13.6
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)
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(13.1
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)
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Restructuring and repositioning expenses
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18.8
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5.4
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24.4
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7.7
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Interest expense and related financing costs
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19.9
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20.1
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39.2
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39.6
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Other (income) expense, net
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5.8
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(11.4
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3.5
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(13.3
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)
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Total costs and expenses
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135.1
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104.1
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236.4
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196.4
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Income (loss) before income taxes
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63.6
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63.1
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131.8
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124.0
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(Provision for) benefit from income taxes
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(25.0
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)
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(19.6
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)
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(49.8
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(37.6
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)
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Net income (loss)
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38.6
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43.5
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82.0
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86.4
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Less: Net (income) loss attributable to noncontrolling interests
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0.2
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0.4
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0.4
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0.4
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Net income (loss) attributable to W. R. Grace & Co. shareholders
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$
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38.8
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$
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43.9
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$
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82.4
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$
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86.8
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Earnings Per Share Attributable to W. R. Grace & Co. Shareholders
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Basic earnings per share:
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Net income (loss)
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$
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0.58
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$
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0.64
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$
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1.22
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$
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1.27
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Weighted average number of basic shares
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67.3
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68.3
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67.4
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68.3
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Diluted earnings per share:
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Net income (loss)
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$
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0.58
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$
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0.64
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$
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1.22
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$
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1.27
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Weighted average number of diluted shares
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67.4
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68.4
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67.5
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68.5
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Dividends per common share
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$
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0.24
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$
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0.21
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$
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0.48
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$
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0.42
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Three Months Ended June 30,
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Six Months Ended June 30,
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(In millions)
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2018
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2017
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2018
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2017
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Net income (loss)
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$
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38.6
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$
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43.5
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$
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82.0
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$
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86.4
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Other comprehensive income (loss), net of income taxes:
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Defined benefit pension and other postretirement plans
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(0.2
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)
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(0.4
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)
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(0.4
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)
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(0.7
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)
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Currency translation adjustments
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37.9
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(8.3
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)
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19.7
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(9.7
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)
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Gain (loss) from hedging activities
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(5.2
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)
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(0.2
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(3.4
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0.5
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Total other comprehensive income (loss)
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32.5
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(8.9
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)
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15.9
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(9.9
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)
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Comprehensive income (loss)
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71.1
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34.6
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97.9
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76.5
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Less: comprehensive (income) loss attributable to noncontrolling interests
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0.2
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0.4
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0.4
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0.4
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Comprehensive income (loss) attributable to W. R. Grace & Co. shareholders
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$
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71.3
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$
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35.0
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$
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98.3
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$
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76.9
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Six Months Ended June 30,
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(In millions)
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2018
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2017
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OPERATING ACTIVITIES
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Net income (loss)
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$
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82.0
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$
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86.4
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Reconciliation to net cash provided by (used for) operating activities:
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Depreciation and amortization
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50.9
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54.2
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Equity in earnings of unconsolidated affiliate
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(13.6
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)
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(13.1
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)
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Costs related to legacy product, environmental and other claims
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4.3
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17.0
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Cash paid for legacy product, environmental and other claims
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(12.6
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)
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(44.2
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)
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Provision for (benefit from) income taxes
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49.8
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37.6
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Cash paid for income taxes
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(16.7
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)
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(31.3
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)
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Income tax refunds received
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0.1
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29.7
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Loss on early extinguishment of debt
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4.8
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—
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Interest expense and related financing costs
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39.2
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39.6
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Cash paid for interest
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(39.6
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)
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(34.3
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)
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Defined benefit pension expense
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7.8
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8.2
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Cash paid under defined benefit pension arrangements
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(57.9
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)
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(7.8
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)
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Changes in assets and liabilities, excluding effect of currency translation and acquisitions:
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Trade accounts receivable
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14.8
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4.3
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Inventories
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(50.8
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)
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(3.9
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)
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Accounts payable
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34.0
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7.4
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All other items, net
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22.5
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(9.3
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)
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Net cash provided by (used for) operating activities
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119.0
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140.5
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INVESTING ACTIVITIES
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Capital expenditures
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(90.8
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)
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(59.1
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)
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Business acquired, net of cash acquired
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(420.9
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)
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—
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Other investing activities
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12.7
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0.3
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Net cash provided by (used for) investing activities
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(499.0
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)
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(58.8
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)
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FINANCING ACTIVITIES
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|
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||||
Borrowings under credit arrangements
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983.2
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|
|
98.8
|
|
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Repayments under credit arrangements
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(541.8
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)
|
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(61.5
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)
|
||
Cash paid for debt financing costs
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(11.8
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)
|
|
(0.2
|
)
|
||
Cash paid for repurchases of common stock
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(49.8
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)
|
|
(30.0
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)
|
||
Proceeds from exercise of stock options
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6.4
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|
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12.2
|
|
||
Dividends paid to shareholders
|
(32.4
|
)
|
|
(28.7
|
)
|
||
Other financing activities
|
(3.5
|
)
|
|
(3.8
|
)
|
||
Net cash provided by (used for) financing activities
|
350.3
|
|
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(13.2
|
)
|
||
Effect of currency exchange rate changes on cash, cash equivalents, and restricted cash
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(1.0
|
)
|
|
3.5
|
|
||
Net increase (decrease) in cash and cash equivalents
|
(30.7
|
)
|
|
72.0
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|
||
Cash, cash equivalents, and restricted cash, beginning of period
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163.5
|
|
|
100.6
|
|
||
Cash, cash equivalents, and restricted cash, end of period
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$
|
132.8
|
|
|
$
|
172.6
|
|
|
|
|
|
||||
Supplemental disclosure of cash flow information
|
|
|
|
||||
Capital expenditures in accounts payable
|
$
|
38.7
|
|
|
$
|
17.8
|
|
(In millions, except par value and shares)
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June 30,
2018 |
|
December 31,
2017 |
||||
ASSETS
|
|
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Current Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
131.5
|
|
|
$
|
152.8
|
|
Restricted cash and cash equivalents
|
1.3
|
|
|
10.7
|
|
||
Trade accounts receivable, less allowance of $11.7 (2017—$11.7)
|
277.5
|
|
|
285.2
|
|
||
Inventories
|
307.4
|
|
|
230.9
|
|
||
Other current assets
|
70.7
|
|
|
49.0
|
|
||
Total Current Assets
|
788.4
|
|
|
728.6
|
|
||
Properties and equipment, net of accumulated depreciation and amortization of $1,482.4 (2017—$1,463.4)
|
955.9
|
|
|
799.1
|
|
||
Goodwill
|
541.2
|
|
|
402.4
|
|
||
Technology and other intangible assets, net
|
364.5
|
|
|
255.4
|
|
||
Deferred income taxes
|
535.4
|
|
|
556.5
|
|
||
Investment in unconsolidated affiliate
|
138.7
|
|
|
125.9
|
|
||
Other assets
|
78.1
|
|
|
39.1
|
|
||
Total Assets
|
$
|
3,402.2
|
|
|
$
|
2,907.0
|
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LIABILITIES AND EQUITY
|
|
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|
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Current Liabilities
|
|
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|
||||
Debt payable within one year
|
$
|
23.3
|
|
|
$
|
20.1
|
|
Accounts payable
|
262.5
|
|
|
210.3
|
|
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Other current liabilities
|
217.3
|
|
|
217.8
|
|
||
Total Current Liabilities
|
503.1
|
|
|
448.2
|
|
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Debt payable after one year
|
1,963.3
|
|
|
1,523.8
|
|
||
Underfunded and unfunded defined benefit pension plans
|
452.2
|
|
|
502.4
|
|
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Other liabilities
|
188.7
|
|
|
169.3
|
|
||
Total Liabilities
|
3,107.3
|
|
|
2,643.7
|
|
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Commitments and Contingencies—Note 8
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Equity
|
|
|
|
||||
Common stock issued, par value $0.01; 300,000,000 shares authorized; outstanding: 67,235,786 (2017—67,780,410)
|
0.7
|
|
|
0.7
|
|
||
Paid-in capital
|
472.1
|
|
|
474.8
|
|
||
Retained earnings
|
625.5
|
|
|
573.1
|
|
||
Treasury stock, at cost: shares: 10,220,841 (2017—9,676,217)
|
(865.7
|
)
|
|
(832.1
|
)
|
||
Accumulated other comprehensive income (loss)
|
55.8
|
|
|
39.9
|
|
||
Total W. R. Grace & Co. Shareholders’ Equity
|
288.4
|
|
|
256.4
|
|
||
Noncontrolling interests
|
6.5
|
|
|
6.9
|
|
||
Total Equity
|
294.9
|
|
|
263.3
|
|
||
Total Liabilities and Equity
|
$
|
3,402.2
|
|
|
$
|
2,907.0
|
|
(In millions)
|
Common Stock and Paid-in Capital
|
|
Retained Earnings
|
|
Treasury Stock
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Noncontrolling Interests
|
|
Total Equity
|
||||||||||||
Balance, December 31, 2016
|
$
|
488.0
|
|
|
$
|
619.3
|
|
|
$
|
(804.9
|
)
|
|
$
|
66.4
|
|
|
$
|
3.6
|
|
|
$
|
372.4
|
|
Net income (loss)
|
—
|
|
|
86.8
|
|
|
—
|
|
|
—
|
|
|
(0.4
|
)
|
|
86.4
|
|
||||||
Repurchase of common stock
|
—
|
|
|
—
|
|
|
(30.0
|
)
|
|
—
|
|
|
—
|
|
|
(30.0
|
)
|
||||||
Payments to taxing authorities in consideration of employee tax obligations related to stock-based compensation arrangements
|
(2.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.4
|
)
|
||||||
Stock-based compensation
|
5.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5.4
|
|
||||||
Exercise of stock options
|
(17.0
|
)
|
|
—
|
|
|
28.8
|
|
|
—
|
|
|
—
|
|
|
11.8
|
|
||||||
Shares issued
|
0.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.7
|
|
||||||
Other comprehensive (loss) income
|
—
|
|
|
—
|
|
|
—
|
|
|
(9.9
|
)
|
|
—
|
|
|
(9.9
|
)
|
||||||
Dividends declared
|
—
|
|
|
(28.8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(28.8
|
)
|
||||||
Balance, June 30, 2017
|
$
|
474.7
|
|
|
$
|
677.3
|
|
|
$
|
(806.1
|
)
|
|
$
|
56.5
|
|
|
$
|
3.2
|
|
|
$
|
405.6
|
|
Balance, December 31, 2017
|
$
|
475.5
|
|
|
$
|
573.1
|
|
|
$
|
(832.1
|
)
|
|
$
|
39.9
|
|
|
$
|
6.9
|
|
|
$
|
263.3
|
|
Net income (loss)
|
—
|
|
|
82.4
|
|
|
—
|
|
|
—
|
|
|
(0.4
|
)
|
|
82.0
|
|
||||||
Repurchase of common stock
|
—
|
|
|
—
|
|
|
(49.8
|
)
|
|
—
|
|
|
—
|
|
|
(49.8
|
)
|
||||||
Payments to taxing authorities in consideration of employee tax obligations related to stock-based compensation arrangements
|
(3.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3.0
|
)
|
||||||
Stock-based compensation
|
9.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9.6
|
|
||||||
Exercise of stock options
|
(4.1
|
)
|
|
—
|
|
|
10.2
|
|
|
—
|
|
|
—
|
|
|
6.1
|
|
||||||
Shares issued
|
(5.2
|
)
|
|
—
|
|
|
6.0
|
|
|
—
|
|
|
—
|
|
|
0.8
|
|
||||||
Dividends declared
|
—
|
|
|
(32.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(32.5
|
)
|
||||||
Other comprehensive (loss) income
|
—
|
|
|
—
|
|
|
—
|
|
|
15.9
|
|
|
—
|
|
|
15.9
|
|
||||||
Adjustment to retained earnings for adoption of ASC 606
|
—
|
|
|
2.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.5
|
|
||||||
Balance, June 30, 2018
|
$
|
472.8
|
|
|
$
|
625.5
|
|
|
$
|
(865.7
|
)
|
|
$
|
55.8
|
|
|
$
|
6.5
|
|
|
$
|
294.9
|
|
•
|
Realization values of net deferred tax assets, which depend on projections of future taxable income;
|
•
|
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 and environmental remediation (see Note 8).
|
|
Six Months Ended June 30, 2017
|
||||||||||
(In millions)
|
Previously Reported
|
|
Revised
|
|
Effect of Change
|
||||||
Other investing activities
|
$
|
(0.5
|
)
|
|
$
|
0.3
|
|
|
$
|
0.8
|
|
Net cash provided by (used for) investing activities
|
(59.6
|
)
|
|
(58.8
|
)
|
|
0.8
|
|
|||
Cash, cash equivalents, and restricted cash, beginning of period
|
90.6
|
|
|
100.6
|
|
|
10.0
|
|
|||
Cash, cash equivalents, and restricted cash, end of period
|
161.8
|
|
|
172.6
|
|
|
10.8
|
|
|
Three months ended June 30, 2018
|
||||||||||
(In millions)
|
Under ASC 605
|
|
As Reported (ASC 606)
|
|
Effect of Change
|
||||||
Net sales
|
$
|
485.4
|
|
|
$
|
485.7
|
|
|
$
|
0.3
|
|
Gross profit
|
198.4
|
|
|
198.7
|
|
|
0.3
|
|
|||
Income (loss) before income taxes
|
63.3
|
|
|
63.6
|
|
|
0.3
|
|
|||
Provision for income taxes
|
(24.9
|
)
|
|
(25.0
|
)
|
|
(0.1
|
)
|
|||
Net income (loss)
|
38.4
|
|
|
38.6
|
|
|
0.2
|
|
|||
Net income (loss) attributable to W. R. Grace & Co. Shareholders
|
38.6
|
|
|
38.8
|
|
|
0.2
|
|
|
Six Months Ended June 30, 2018
|
||||||||||
(In millions)
|
Under ASC 605
|
|
As Reported (ASC 606)
|
|
Effect of Change
|
||||||
Net sales
|
$
|
916.8
|
|
|
$
|
917.2
|
|
|
$
|
0.4
|
|
Gross profit
|
367.8
|
|
|
368.2
|
|
|
0.4
|
|
|||
Income (loss) before income taxes
|
131.4
|
|
|
131.8
|
|
|
0.4
|
|
|||
Provision for income taxes
|
(49.7
|
)
|
|
(49.8
|
)
|
|
(0.1
|
)
|
|||
Net income (loss)
|
81.7
|
|
|
82.0
|
|
|
0.3
|
|
|||
Net income (loss) attributable to W. R. Grace & Co. Shareholders
|
82.1
|
|
|
82.4
|
|
|
0.3
|
|
|
June 30, 2018
|
||||||||||
(In millions)
|
Under ASC 605
|
|
As Reported (ASC 606)
|
|
Effect of Change
|
||||||
Deferred income taxes
|
$
|
536.2
|
|
|
$
|
535.4
|
|
|
$
|
(0.8
|
)
|
Other liabilities
|
192.3
|
|
|
188.7
|
|
|
(3.6
|
)
|
|||
Retained earnings
|
622.7
|
|
|
625.5
|
|
|
2.8
|
|
|
Three Months Ended June 30, 2017
|
||||||||||
(In millions)
|
Previously Reported
|
|
Revised
|
|
Effect of Change
|
||||||
Cost of goods sold
|
$
|
260.2
|
|
|
$
|
262.3
|
|
|
$
|
2.1
|
|
Gross profit
|
169.3
|
|
|
167.2
|
|
|
(2.1
|
)
|
|||
Selling, general and administrative expenses
|
70.3
|
|
|
70.8
|
|
|
0.5
|
|
|||
Research and development expenses
|
12.9
|
|
|
13.6
|
|
|
0.7
|
|
|||
Other (income) expense
|
(9.6
|
)
|
|
(12.9
|
)
|
|
(3.3
|
)
|
|
Six Months Ended June 30, 2017
|
||||||||||
(In millions)
|
Previously Reported
|
|
Revised
|
|
Effect of Change
|
||||||
Cost of goods sold
|
$
|
505.0
|
|
|
$
|
507.1
|
|
|
$
|
2.1
|
|
Gross profit
|
322.5
|
|
|
320.4
|
|
|
(2.1
|
)
|
|||
Selling, general and administrative expenses
|
136.8
|
|
|
137.8
|
|
|
1.0
|
|
|||
Research and development expenses
|
26.1
|
|
|
27.5
|
|
|
1.4
|
|
|||
Other (income) expense
|
(11.8
|
)
|
|
(16.3
|
)
|
|
(4.5
|
)
|
(In millions)
|
June 30,
2018 |
|
December 31,
2017 |
||||
Raw materials
|
$
|
60.3
|
|
|
$
|
48.8
|
|
In process
|
56.8
|
|
|
33.0
|
|
||
Finished products
|
161.3
|
|
|
124.7
|
|
||
Other
|
29.0
|
|
|
24.4
|
|
||
Total inventory
|
$
|
307.4
|
|
|
$
|
230.9
|
|
(In millions)
|
June 30,
2018 |
|
December 31,
2017 |
||||
2018 U.S. dollar term loan, net of unamortized debt issuance costs of $9.7
|
$
|
940.3
|
|
|
$
|
—
|
|
5.125% senior notes due 2021, net of unamortized debt issuance costs of $5.0 (2017—$5.8)
|
695.0
|
|
|
694.2
|
|
||
5.625% senior notes due 2024, net of unamortized debt issuance costs of $3.2 (2017—$3.5)
|
296.8
|
|
|
296.5
|
|
||
Debt payable to unconsolidated affiliate
|
46.3
|
|
|
42.4
|
|
||
2014 U.S. dollar term loan, net of unamortized debt issuance costs and discounts (2017—$4.3)
|
—
|
|
|
404.1
|
|
||
2014 Euro term loan, net of unamortized debt issuance costs and discounts
(2017—$1.0)
|
—
|
|
|
94.0
|
|
||
Other borrowings(1)
|
8.2
|
|
|
12.7
|
|
||
Total debt
|
1,986.6
|
|
|
1,543.9
|
|
||
Less debt payable within one year
|
23.3
|
|
|
20.1
|
|
||
Debt payable after one year
|
$
|
1,963.3
|
|
|
$
|
1,523.8
|
|
Weighted average interest rates on total debt
|
3.8
|
%
|
|
4.7
|
%
|
(a)
|
a
$950 million
term loan due in 2025, with interest at LIBOR +
175
basis points, and
|
(b)
|
a
$400 million
revolving credit facility due in 2023, with interest at LIBOR +
175
basis points.
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||||
(In millions)
|
Carrying Amount
|
|
Fair Value
|
|
Carrying Amount
|
|
Fair Value
|
||||||||
2018 U.S. dollar term loan(1)
|
$
|
940.3
|
|
|
$
|
939.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
5.125% senior notes due 2021(2)
|
695.0
|
|
|
709.2
|
|
|
694.2
|
|
|
728.7
|
|
||||
5.625% senior notes due 2024(2)
|
296.8
|
|
|
311.3
|
|
|
296.5
|
|
|
321.3
|
|
||||
U.S. dollar term loan(3)
|
—
|
|
|
—
|
|
|
404.1
|
|
|
409.7
|
|
||||
Euro term loan(3)
|
—
|
|
|
—
|
|
|
94.0
|
|
|
93.7
|
|
||||
Other borrowings
|
54.5
|
|
|
54.5
|
|
|
55.1
|
|
|
55.1
|
|
||||
Total debt
|
$
|
1,986.6
|
|
|
$
|
2,014.1
|
|
|
$
|
1,543.9
|
|
|
$
|
1,608.5
|
|
(1)
|
Carrying amounts are net of unamortized debt issuance costs and discounts of
$9.7 million
as of
June 30, 2018
.
|
(2)
|
Carrying amounts are net of unamortized debt issuance costs of
$5.0 million
and
$3.2 million
as of
June 30, 2018
, and
$5.8 million
and
$3.5 million
as of
December 31, 2017
, related to the 5.125% senior notes due 2021 and 5.625% senior notes due 2024, respectively.
|
(3)
|
Carrying amounts are net of unamortized debt issuance costs and discounts of
$4.3 million
and
$1.0 million
as of
December 31, 2017
, related to the U.S. dollar term loan and euro term loan, respectively.
|
|
Fair Value Measurements at June 30, 2018, 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
|
$
|
4.0
|
|
|
$
|
—
|
|
|
$
|
4.0
|
|
|
$
|
—
|
|
Interest rate derivatives
|
0.5
|
|
|
—
|
|
|
0.5
|
|
|
—
|
|
||||
Variable-to-fixed cross-currency derivatives
|
21.4
|
|
|
—
|
|
|
21.4
|
|
|
—
|
|
||||
Total Assets
|
$
|
25.9
|
|
|
$
|
—
|
|
|
$
|
25.9
|
|
|
$
|
—
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Interest rate derivatives
|
$
|
0.2
|
|
|
$
|
—
|
|
|
$
|
0.2
|
|
|
$
|
—
|
|
Currency derivatives
|
20.9
|
|
|
—
|
|
|
20.9
|
|
|
—
|
|
||||
Total Liabilities
|
$
|
21.1
|
|
|
$
|
—
|
|
|
$
|
21.1
|
|
|
$
|
—
|
|
|
Fair Value Measurements at December 31, 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
|
$
|
3.1
|
|
|
$
|
—
|
|
|
$
|
3.1
|
|
|
$
|
—
|
|
Total Assets
|
$
|
3.1
|
|
|
$
|
—
|
|
|
$
|
3.1
|
|
|
$
|
—
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Interest rate derivatives
|
$
|
1.8
|
|
|
$
|
—
|
|
|
$
|
1.8
|
|
|
$
|
—
|
|
Currency derivatives
|
23.8
|
|
|
—
|
|
|
23.8
|
|
|
—
|
|
||||
Total Liabilities
|
$
|
25.6
|
|
|
$
|
—
|
|
|
$
|
25.6
|
|
|
$
|
—
|
|
June 30, 2018
(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
|
|
$
|
3.3
|
|
|
Other current liabilities
|
|
$
|
—
|
|
Interest rate contracts
|
Other current assets
|
|
—
|
|
|
Other current liabilities
|
|
0.2
|
|
||
Variable-to-fixed cross-currency swaps
|
Other current assets
|
|
12.5
|
|
|
Other current liabilities
|
|
—
|
|
||
Currency contracts
|
Other assets
|
|
0.1
|
|
|
Other liabilities
|
|
19.1
|
|
||
Interest rate contracts
|
Other assets
|
|
0.5
|
|
|
Other liabilities
|
|
—
|
|
||
Variable-to-fixed cross-currency swaps
|
Other assets
|
|
8.9
|
|
|
Other liabilities
|
|
—
|
|
||
Derivatives not designated as hedging instruments under ASC 815:
|
|
|
|
|
|
|
|
||||
Currency contracts
|
Other current assets
|
|
0.6
|
|
|
Other current liabilities
|
|
1.8
|
|
||
Total derivatives
|
|
|
$
|
25.9
|
|
|
|
|
$
|
21.1
|
|
December 31, 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
|
|
$
|
2.7
|
|
|
Other current liabilities
|
|
$
|
1.4
|
|
Interest rate contracts
|
Other current assets
|
|
—
|
|
|
Other current liabilities
|
|
1.3
|
|
||
Currency contracts
|
Other assets
|
|
—
|
|
|
Other liabilities
|
|
22.2
|
|
||
Interest rate contracts
|
Other assets
|
|
—
|
|
|
Other liabilities
|
|
0.5
|
|
||
Derivatives not designated as hedging instruments under ASC 815:
|
|
|
|
|
|
|
|
||||
Currency contracts
|
Other current assets
|
|
0.4
|
|
|
Other current liabilities
|
|
0.2
|
|
||
Total derivatives
|
|
|
$
|
3.1
|
|
|
|
|
$
|
25.6
|
|
Three Months Ended June 30, 2018
(In millions) |
Amount of Gain (Loss) Recognized in OCI on Derivatives
|
|
Location of Gain (Loss) Reclassified from Accumulated OCI into Income
|
|
Amount of Gain (Loss) Reclassified from OCI into Income
|
||||
Derivatives in ASC 815 cash flow hedging relationships:
|
|
|
|
|
|||||
Interest rate contracts
|
$
|
0.3
|
|
|
Interest expense
|
|
$
|
0.1
|
|
Currency contracts(1)
|
10.4
|
|
|
Other expense
|
|
10.2
|
|
||
Variable-to-fixed cross-currency swaps
|
3.1
|
|
|
Interest expense
|
|
3.1
|
|
||
Variable-to-fixed cross-currency swaps
|
18.3
|
|
|
Other expense
|
|
29.3
|
|
||
Total derivatives
|
$
|
32.1
|
|
|
|
|
$
|
42.7
|
|
(1)
|
Amount of gain (loss) recognized in OCI includes
$0.4 million
excluded from the assessment of effectiveness for which the difference between changes in fair value and periodic amortization is recorded in OCI.
|
Six Months Ended June 30, 2018
(In millions) |
Amount of Gain (Loss) Recognized in OCI on Derivatives
|
|
Location of Gain (Loss) Reclassified from Accumulated OCI into Income
|
|
Amount of Gain (Loss) Reclassified from OCI into Income
|
||||
Derivatives in ASC 815 cash flow hedging relationships:
|
|
|
|
|
|||||
Interest rate contracts
|
$
|
1.8
|
|
|
Interest expense
|
|
$
|
(0.1
|
)
|
Currency contracts(1)
|
3.8
|
|
|
Other expense
|
|
4.1
|
|
||
Variable-to-fixed cross-currency swaps
|
3.1
|
|
|
Interest expense
|
|
3.1
|
|
||
Variable-to-fixed cross-currency swaps
|
18.3
|
|
|
Other expense
|
|
29.3
|
|
||
Total derivatives
|
$
|
27.0
|
|
|
|
|
$
|
36.4
|
|
(1)
|
Amount of gain (loss) recognized in OCI includes
$(0.4) million
excluded from the assessment of effectiveness for which the difference between changes in fair value and periodic amortization is recorded in OCI.
|
Three Months Ended June 30, 2017
(In millions) |
Amount of Gain (Loss) Recognized in OCI on Derivatives
|
|
Location of Gain (Loss) Reclassified from Accumulated OCI into Income
|
|
Amount of Gain (Loss) Reclassified from OCI into Income
|
||||
Derivatives in ASC 815 cash flow hedging relationships:
|
|
|
|
|
|||||
Interest rate contracts
|
$
|
(1.1
|
)
|
|
Interest expense
|
|
$
|
(0.8
|
)
|
Currency contracts
|
—
|
|
|
Other expense
|
|
(0.1
|
)
|
||
Total derivatives
|
$
|
(1.1
|
)
|
|
|
|
$
|
(0.9
|
)
|
Six Months Ended June 30, 2017
(In millions) |
Amount of Gain (Loss) Recognized in OCI on Derivatives
|
|
Location of Gain (Loss) Reclassified from Accumulated OCI into Income
|
|
Amount of Gain (Loss) Reclassified from OCI into Income
|
||||
Derivatives in ASC 815 cash flow hedging relationships:
|
|
|
|
|
|||||
Interest rate contracts
|
$
|
(1.0
|
)
|
|
Interest expense
|
|
$
|
(1.7
|
)
|
Currency contracts
|
(0.1
|
)
|
|
Other expense
|
|
(0.1
|
)
|
||
Total derivatives
|
$
|
(1.1
|
)
|
|
|
|
$
|
(1.8
|
)
|
|
Three Months Ended June 30,
|
||||||||||||||
|
2018
|
|
2017
|
||||||||||||
(In millions)
|
Interest expense
|
|
Other income (expense)
|
|
Interest expense
|
|
Other income (expense)
|
||||||||
Total amounts of income and expense line items in the Consolidated Statements of Operations in which the effects of cash flow hedges are recorded
|
$
|
(19.9
|
)
|
|
$
|
(5.8
|
)
|
|
$
|
(20.1
|
)
|
|
$
|
11.4
|
|
Gain (loss) on cash flow hedging relationships in ASC 815
|
|
|
|
|
|
|
|
||||||||
Interest rate contracts
|
|
|
|
|
|
|
|
||||||||
Amount of gain (loss) reclassified from accumulated OCI into income
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
(0.8
|
)
|
|
$
|
—
|
|
Variable-to-fixed cross-currency swaps
|
|
|
|
|
|
|
|
||||||||
Amount of gain (loss) reclassified from accumulated OCI into income
|
3.1
|
|
|
29.3
|
|
|
—
|
|
|
—
|
|
||||
Currency contracts
|
|
|
|
|
|
|
|
||||||||
Amount of gain (loss) reclassified from accumulated OCI into income
|
—
|
|
|
10.2
|
|
|
—
|
|
|
(0.1
|
)
|
||||
Amount excluded from effectiveness testing recognized in earnings based on amortization approach (included in above)
|
—
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
Six Months Ended June 30,
|
||||||||||||||
|
2018
|
|
2017
|
||||||||||||
(In millions)
|
Interest expense
|
|
Other income (expense)
|
|
Interest expense
|
|
Other income (expense)
|
||||||||
Total amounts of income and expense line items in the Consolidated Statements of Operations in which the effects of cash flow hedges are recorded
|
$
|
(39.2
|
)
|
|
$
|
(3.5
|
)
|
|
$
|
(39.6
|
)
|
|
$
|
13.3
|
|
Gain (loss) on cash flow hedging relationships in ASC 815
|
|
|
|
|
|
|
|
||||||||
Interest rate contracts
|
|
|
|
|
|
|
|
||||||||
Amount of gain (loss) reclassified from accumulated OCI into income
|
$
|
(0.1
|
)
|
|
$
|
—
|
|
|
$
|
(1.7
|
)
|
|
$
|
—
|
|
Variable-to-fixed cross-currency swaps
|
|
|
|
|
|
|
|
||||||||
Amount of gain (loss) reclassified from accumulated OCI into income
|
3.1
|
|
|
29.3
|
|
|
—
|
|
|
—
|
|
||||
Currency contracts
|
|
|
|
|
|
|
|
||||||||
Amount of gain (loss) reclassified from accumulated OCI into income
|
—
|
|
|
4.1
|
|
|
—
|
|
|
(0.1
|
)
|
||||
Amount excluded from effectiveness testing recognized in earnings based on amortization approach (included in above)
|
—
|
|
|
1.1
|
|
|
—
|
|
|
—
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(In millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Derivatives in ASC 815 net investment hedging relationships:
|
|
|
|
|
|
|
|
||||||||
Cross-currency swap
|
$
|
13.3
|
|
|
$
|
(6.1
|
)
|
|
$
|
2.0
|
|
|
$
|
(8.6
|
)
|
Non-derivatives in ASC 815 net investment hedging relationships:
|
|
|
|
|
|
|
|
||||||||
Foreign currency denominated debt
|
$
|
—
|
|
|
$
|
(4.9
|
)
|
|
$
|
(4.4
|
)
|
|
$
|
(7.2
|
)
|
Foreign currency denominated deferred intercompany royalties
|
1.9
|
|
|
(2.9
|
)
|
|
0.2
|
|
|
(4.4
|
)
|
||||
|
$
|
1.9
|
|
|
$
|
(7.8
|
)
|
|
$
|
(4.2
|
)
|
|
$
|
(11.6
|
)
|
(In millions)
|
June 30,
2018 |
|
December 31,
2017 |
||||
Overfunded defined benefit pension plans
|
$
|
4.2
|
|
|
$
|
—
|
|
Underfunded defined benefit pension plans
|
(63.4
|
)
|
|
(110.5
|
)
|
||
Unfunded defined benefit pension plans
|
(388.8
|
)
|
|
(391.9
|
)
|
||
Total underfunded and unfunded defined benefit pension plans
|
(452.2
|
)
|
|
(502.4
|
)
|
||
Pension liabilities included in other current liabilities
|
(14.8
|
)
|
|
(15.0
|
)
|
||
Net funded status
|
$
|
(462.8
|
)
|
|
$
|
(517.4
|
)
|
|
Three Months Ended June 30,
|
||||||||||||||
|
2018
|
|
2017
|
||||||||||||
(In millions)
|
U.S.
|
|
Non-U.S.
|
|
U.S.
|
|
Non-U.S.
|
||||||||
Service cost
|
$
|
4.9
|
|
|
$
|
2.5
|
|
|
$
|
4.3
|
|
|
$
|
2.0
|
|
Interest cost
|
10.3
|
|
|
1.2
|
|
|
10.5
|
|
|
1.1
|
|
||||
Expected return on plan assets
|
(14.6
|
)
|
|
(0.2
|
)
|
|
(14.4
|
)
|
|
(0.2
|
)
|
||||
Amortization of prior service credit
|
(0.1
|
)
|
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
||||
Net periodic benefit cost (income)
|
$
|
0.5
|
|
|
$
|
3.5
|
|
|
$
|
0.3
|
|
|
$
|
2.9
|
|
|
Six Months Ended June 30,
|
||||||||||||||
|
2018
|
|
2017
|
||||||||||||
(In millions)
|
U.S.
|
|
Non-U.S.
|
|
U.S.
|
|
Non-U.S.
|
||||||||
Service cost
|
$
|
9.7
|
|
|
$
|
4.9
|
|
|
$
|
8.6
|
|
|
$
|
4.0
|
|
Interest cost
|
20.6
|
|
|
2.5
|
|
|
21.0
|
|
|
2.1
|
|
||||
Expected return on plan assets
|
(29.1
|
)
|
|
(0.5
|
)
|
|
(28.8
|
)
|
|
(0.4
|
)
|
||||
Amortization of prior service credit
|
(0.3
|
)
|
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
||||
Net periodic benefit cost (income)
|
$
|
0.9
|
|
|
$
|
6.9
|
|
|
$
|
0.6
|
|
|
$
|
5.7
|
|
(In millions)
|
June 30,
2018 |
|
December 31,
2017 |
||||
Other Current Liabilities
|
|
|
|
||||
Accrued compensation
|
$
|
45.2
|
|
|
$
|
60.7
|
|
Deferred revenue
|
26.0
|
|
|
19.5
|
|
||
Environmental contingencies
|
22.7
|
|
|
23.5
|
|
||
Income taxes payable
|
20.3
|
|
|
12.2
|
|
||
Pension liabilities
|
14.8
|
|
|
15.0
|
|
||
Accrued interest
|
13.3
|
|
|
16.5
|
|
||
Other accrued liabilities
|
75.0
|
|
|
70.4
|
|
||
|
$
|
217.3
|
|
|
$
|
217.8
|
|
(In millions)
|
June 30,
2018 |
|
December 31,
2017 |
||||
Other Liabilities
|
|
|
|
||||
Liability to unconsolidated affiliate
|
$
|
56.0
|
|
|
$
|
32.7
|
|
Environmental contingencies
|
38.5
|
|
|
46.8
|
|
||
Deferred revenue
|
22.3
|
|
|
14.9
|
|
||
Fair value of currency and interest rate contracts
|
19.1
|
|
|
22.7
|
|
||
Asset retirement obligation
|
9.1
|
|
|
10.4
|
|
||
Deferred income taxes
|
8.0
|
|
|
8.2
|
|
||
Postemployment liability
|
4.9
|
|
|
5.2
|
|
||
Other noncurrent liabilities
|
30.8
|
|
|
28.4
|
|
||
|
$
|
188.7
|
|
|
$
|
169.3
|
|
•
|
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 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 or spin-off of a former business unit or product line in which Grace has agreed to indemnify the buyer or resulting entity against certain liabilities related to activities prior to the closing of the transaction, including environmental, tax, and employee 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 June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(In millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Catalysts Technologies
|
$
|
1.0
|
|
|
$
|
—
|
|
|
$
|
1.5
|
|
|
$
|
0.4
|
|
Materials Technologies
|
—
|
|
|
0.1
|
|
|
0.4
|
|
|
0.3
|
|
||||
Corporate
|
—
|
|
|
1.9
|
|
|
0.1
|
|
|
4.1
|
|
||||
Total restructuring expenses
|
$
|
1.0
|
|
|
$
|
2.0
|
|
|
$
|
2.0
|
|
|
$
|
4.8
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(In millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Defined benefit pension (income) expense other than service cost
|
$
|
(3.4
|
)
|
|
$
|
(3.2
|
)
|
|
(6.8
|
)
|
|
(4.4
|
)
|
||
Third-party acquisition-related costs
|
5.8
|
|
|
—
|
|
|
6.7
|
|
|
—
|
|
||||
Loss on early extinguishment of debt
|
4.8
|
|
|
—
|
|
|
4.8
|
|
|
—
|
|
||||
Currency transaction effects
|
(2.7
|
)
|
|
1.5
|
|
|
(3.1
|
)
|
|
2.0
|
|
||||
Net (gain) loss on sales of investments and disposals of assets
|
0.9
|
|
|
0.4
|
|
|
1.3
|
|
|
0.8
|
|
||||
Chapter 11 expenses, net
|
0.5
|
|
|
0.6
|
|
|
1.0
|
|
|
1.5
|
|
||||
Business interruption insurance recovery
|
—
|
|
|
(10.6
|
)
|
|
—
|
|
|
(13.1
|
)
|
||||
Other miscellaneous (income) expense
|
(0.1
|
)
|
|
(0.1
|
)
|
|
(0.4
|
)
|
|
(0.1
|
)
|
||||
Total other (income) expense, net
|
$
|
5.8
|
|
|
$
|
(11.4
|
)
|
|
$
|
3.5
|
|
|
$
|
(13.3
|
)
|
Three Months Ended June 30, 2018
(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
|
$
|
(0.4
|
)
|
|
$
|
0.1
|
|
|
$
|
(0.3
|
)
|
Amortization of net deferred actuarial loss included in net periodic benefit cost
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|||
Benefit plans, net
|
(0.3
|
)
|
|
0.1
|
|
|
(0.2
|
)
|
|||
Currency translation adjustments
|
40.6
|
|
|
(2.7
|
)
|
|
37.9
|
|
|||
Gain (loss) from hedging activities
|
(8.2
|
)
|
|
3.0
|
|
|
(5.2
|
)
|
|||
Other comprehensive income (loss) attributable to W. R. Grace & Co. shareholders
|
$
|
32.1
|
|
|
$
|
0.4
|
|
|
$
|
32.5
|
|
Six Months Ended June 30, 2018
(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
|
$
|
(0.8
|
)
|
|
$
|
0.2
|
|
|
$
|
(0.6
|
)
|
Amortization of net deferred actuarial loss included in net periodic benefit cost
|
0.2
|
|
|
—
|
|
|
0.2
|
|
|||
Benefit plans, net
|
(0.6
|
)
|
|
0.2
|
|
|
(0.4
|
)
|
|||
Currency translation adjustments
|
19.8
|
|
|
(0.1
|
)
|
|
19.7
|
|
|||
Gain (loss) from hedging activities
|
(5.6
|
)
|
|
2.2
|
|
|
(3.4
|
)
|
|||
Other comprehensive income (loss) attributable to W. R. Grace & Co. shareholders
|
$
|
13.6
|
|
|
$
|
2.3
|
|
|
$
|
15.9
|
|
Three Months Ended June 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
|
)
|
|
0.1
|
|
|
(0.4
|
)
|
|||
Currency translation adjustments
|
(8.3
|
)
|
|
—
|
|
|
(8.3
|
)
|
|||
Gain (loss) from hedging activities
|
(0.2
|
)
|
|
—
|
|
|
(0.2
|
)
|
|||
Other comprehensive income (loss) attributable to W. R. Grace & Co. shareholders
|
$
|
(9.0
|
)
|
|
$
|
0.1
|
|
|
$
|
(8.9
|
)
|
Six Months Ended June 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
|
$
|
(1.2
|
)
|
|
$
|
0.4
|
|
|
$
|
(0.8
|
)
|
Amortization of net deferred actuarial loss included in net periodic benefit cost
|
0.2
|
|
|
(0.1
|
)
|
|
0.1
|
|
|||
Benefit plans, net
|
(1.0
|
)
|
|
0.3
|
|
|
(0.7
|
)
|
|||
Currency translation adjustments
|
(9.7
|
)
|
|
—
|
|
|
(9.7
|
)
|
|||
Gain (loss) from hedging activities
|
0.7
|
|
|
(0.2
|
)
|
|
0.5
|
|
|||
Other comprehensive income (loss) attributable to W. R. Grace & Co. shareholders
|
$
|
(10.0
|
)
|
|
$
|
0.1
|
|
|
$
|
(9.9
|
)
|
Six Months Ended June 30, 2018
(In millions) |
Defined Benefit Pension and Other Postretirement Plans
|
|
Currency Translation Adjustments
|
|
Gain (Loss) from Hedging Activities
|
|
Total
|
||||||||
Beginning balance
|
$
|
0.9
|
|
|
$
|
41.6
|
|
|
$
|
(2.6
|
)
|
|
$
|
39.9
|
|
Other comprehensive income (loss) before reclassifications
|
—
|
|
|
19.7
|
|
|
20.0
|
|
|
39.7
|
|
||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
(0.4
|
)
|
|
—
|
|
|
(23.4
|
)
|
|
(23.8
|
)
|
||||
Net current-period other comprehensive income (loss)
|
(0.4
|
)
|
|
19.7
|
|
|
(3.4
|
)
|
|
15.9
|
|
||||
Ending balance
|
$
|
0.5
|
|
|
$
|
61.3
|
|
|
$
|
(6.0
|
)
|
|
$
|
55.8
|
|
Six Months Ended June 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
|
—
|
|
|
(9.7
|
)
|
|
(0.7
|
)
|
|
(10.4
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
(0.7
|
)
|
|
—
|
|
|
1.2
|
|
|
0.5
|
|
||||
Net current-period other comprehensive income (loss)
|
(0.7
|
)
|
|
(9.7
|
)
|
|
0.5
|
|
|
(9.9
|
)
|
||||
Ending balance
|
$
|
1.5
|
|
|
$
|
57.9
|
|
|
$
|
(2.9
|
)
|
|
$
|
56.5
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(In millions, except per share amounts)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Numerators
|
|
|
|
|
|
|
|
||||||||
Net income (loss) attributable to W. R. Grace & Co. shareholders
|
$
|
38.8
|
|
|
$
|
43.9
|
|
|
$
|
82.4
|
|
|
$
|
86.8
|
|
Denominators
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares—basic calculation
|
67.3
|
|
|
68.3
|
|
|
67.4
|
|
|
68.3
|
|
||||
Dilutive effect of employee stock options
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
|
0.2
|
|
||||
Weighted average common shares—diluted calculation
|
67.4
|
|
|
68.4
|
|
|
67.5
|
|
|
68.5
|
|
||||
Basic earnings per share
|
$
|
0.58
|
|
|
$
|
0.64
|
|
|
$
|
1.22
|
|
|
$
|
1.27
|
|
Diluted earnings per share
|
$
|
0.58
|
|
|
$
|
0.64
|
|
|
1.22
|
|
|
1.27
|
|
Three Months Ended June 30, 2018
(In millions) |
North America
|
|
Europe Middle East Africa (EMEA)
|
|
Asia Pacific
|
|
Latin America
|
|
Total
|
||||||||||
Catalysts Technologies:
|
|
|
|
|
|
|
|
|
|
||||||||||
Refining Catalysts
|
$
|
67.2
|
|
|
$
|
61.0
|
|
|
$
|
53.4
|
|
|
$
|
14.5
|
|
|
$
|
196.1
|
|
Polyolefin and Chemical Catalysts
|
51.6
|
|
|
66.6
|
|
|
45.2
|
|
|
4.9
|
|
|
168.3
|
|
|||||
Total
|
$
|
118.8
|
|
|
$
|
127.6
|
|
|
$
|
98.6
|
|
|
$
|
19.4
|
|
|
$
|
364.4
|
|
Materials Technologies:
|
|
|
|
|
|
|
|
|
|
||||||||||
Coatings
|
$
|
7.7
|
|
|
$
|
19.7
|
|
|
$
|
11.4
|
|
|
$
|
2.4
|
|
|
$
|
41.2
|
|
Consumer/Pharma
|
8.9
|
|
|
13.5
|
|
|
5.9
|
|
|
4.7
|
|
|
33.0
|
|
|||||
Chemical process
|
10.1
|
|
|
20.9
|
|
|
8.0
|
|
|
2.3
|
|
|
41.3
|
|
|||||
Other
|
1.9
|
|
|
3.7
|
|
|
0.2
|
|
|
—
|
|
|
5.8
|
|
|||||
Total
|
$
|
28.6
|
|
|
$
|
57.8
|
|
|
$
|
25.5
|
|
|
$
|
9.4
|
|
|
$
|
121.3
|
|
Six Months Ended June 30, 2018
(In millions) |
North America
|
|
EMEA
|
|
Asia Pacific
|
|
Latin America
|
|
Total
|
||||||||||
Catalysts Technologies:
|
|
|
|
|
|
|
|
|
|
||||||||||
Refining Catalysts
|
$
|
137.1
|
|
|
$
|
122.3
|
|
|
$
|
92.2
|
|
|
$
|
27.9
|
|
|
$
|
379.5
|
|
Polyolefin and Chemical Catalysts
|
83.8
|
|
|
125.0
|
|
|
83.2
|
|
|
8.7
|
|
|
300.7
|
|
|||||
Total
|
$
|
220.9
|
|
|
$
|
247.3
|
|
|
$
|
175.4
|
|
|
$
|
36.6
|
|
|
$
|
680.2
|
|
Materials Technologies:
|
|
|
|
|
|
|
|
|
|
||||||||||
Coatings
|
$
|
14.8
|
|
|
$
|
40.2
|
|
|
$
|
23.2
|
|
|
$
|
4.7
|
|
|
$
|
82.9
|
|
Consumer/Pharma
|
16.6
|
|
|
26.7
|
|
|
10.2
|
|
|
9.4
|
|
|
62.9
|
|
|||||
Chemical process
|
17.5
|
|
|
41.7
|
|
|
15.2
|
|
|
4.6
|
|
|
79.0
|
|
|||||
Other
|
3.6
|
|
|
8.2
|
|
|
0.3
|
|
|
0.1
|
|
|
12.2
|
|
|||||
Total
|
$
|
52.5
|
|
|
$
|
116.8
|
|
|
$
|
48.9
|
|
|
$
|
18.8
|
|
|
$
|
237.0
|
|
Three Months Ended June 30, 2017
(In millions) |
North America
|
|
EMEA
|
|
Asia Pacific
|
|
Latin America
|
|
Total
|
||||||||||
Catalysts Technologies:
|
|
|
|
|
|
|
|
|
|
||||||||||
Refining Catalysts
|
$
|
64.8
|
|
|
$
|
53.9
|
|
|
$
|
50.2
|
|
|
$
|
17.8
|
|
|
$
|
186.7
|
|
Polyolefin and Chemical Catalysts
|
30.4
|
|
|
55.3
|
|
|
44.6
|
|
|
3.5
|
|
|
133.8
|
|
|||||
Total
|
$
|
95.2
|
|
|
$
|
109.2
|
|
|
$
|
94.8
|
|
|
$
|
21.3
|
|
|
$
|
320.5
|
|
Materials Technologies:
|
|
|
|
|
|
|
|
|
|
||||||||||
Coatings
|
$
|
6.1
|
|
|
$
|
17.9
|
|
|
$
|
9.1
|
|
|
$
|
2.0
|
|
|
$
|
35.1
|
|
Consumer/Pharma
|
11.1
|
|
|
10.4
|
|
|
4.2
|
|
|
4.4
|
|
|
30.1
|
|
|||||
Chemical process
|
7.0
|
|
|
23.1
|
|
|
7.4
|
|
|
1.5
|
|
|
39.0
|
|
|||||
Other
|
1.4
|
|
|
3.3
|
|
|
—
|
|
|
0.1
|
|
|
4.8
|
|
|||||
Total(1)
|
$
|
25.6
|
|
|
$
|
54.7
|
|
|
$
|
20.7
|
|
|
$
|
8.0
|
|
|
$
|
109.0
|
|
(1)
|
Under the modified retrospective method, prior-period information has not been adjusted and continues to be reported in accordance with Grace’s historical accounting under ASC 605.
|
Six Months Ended June 30, 2017
(In millions) |
North America
|
|
EMEA
|
|
Asia Pacific
|
|
Latin America
|
|
Total
|
||||||||||
Catalysts Technologies:
|
|
|
|
|
|
|
|
|
|
||||||||||
Refining Catalysts
|
$
|
126.6
|
|
|
$
|
108.0
|
|
|
$
|
91.9
|
|
|
$
|
38.6
|
|
|
$
|
365.1
|
|
Polyolefin and Chemical Catalysts
|
58.0
|
|
|
99.5
|
|
|
83.2
|
|
|
8.5
|
|
|
249.2
|
|
|||||
Total
|
$
|
184.6
|
|
|
$
|
207.5
|
|
|
$
|
175.1
|
|
|
$
|
47.1
|
|
|
$
|
614.3
|
|
Materials Technologies:
|
|
|
|
|
|
|
|
|
|
||||||||||
Coatings
|
$
|
13.1
|
|
|
$
|
34.5
|
|
|
$
|
18.6
|
|
|
$
|
4.0
|
|
|
$
|
70.2
|
|
Consumer/Pharma
|
21.4
|
|
|
22.6
|
|
|
7.4
|
|
|
9.2
|
|
|
60.6
|
|
|||||
Chemical process
|
14.4
|
|
|
41.7
|
|
|
14.2
|
|
|
2.6
|
|
|
72.9
|
|
|||||
Other
|
3.0
|
|
|
6.3
|
|
|
0.1
|
|
|
0.1
|
|
|
9.5
|
|
|||||
Total(1)
|
$
|
51.9
|
|
|
$
|
105.1
|
|
|
$
|
40.3
|
|
|
$
|
15.9
|
|
|
$
|
213.2
|
|
(1)
|
Under the modified retrospective method, prior-period information has not been adjusted and continues to be reported in accordance with Grace’s historical accounting under ASC 605.
|
(In millions)
|
June 30,
2018 |
|
December 31,
2017 |
||||
Current
|
$
|
26.0
|
|
|
$
|
19.5
|
|
Noncurrent
|
22.3
|
|
|
14.9
|
|
||
Total
|
$
|
48.3
|
|
|
$
|
34.4
|
|
Year
|
|
Approximate percentage of revenue related to remaining performance obligations recognized
|
|
2018
|
|
12
|
%
|
2019
|
|
29
|
%
|
2020
|
|
23
|
%
|
Thereafter through 2024
|
|
36
|
%
|
|
|
100
|
%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(In millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net Sales
|
|
|
|
|
|
|
|
||||||||
Catalysts Technologies
|
$
|
364.4
|
|
|
$
|
320.5
|
|
|
$
|
680.2
|
|
|
$
|
614.3
|
|
Materials Technologies
|
121.3
|
|
|
109.0
|
|
|
237.0
|
|
|
213.2
|
|
||||
Total
|
$
|
485.7
|
|
|
$
|
429.5
|
|
|
$
|
917.2
|
|
|
$
|
827.5
|
|
Adjusted EBIT
|
|
|
|
|
|
|
|
||||||||
Catalysts Technologies segment operating income
|
$
|
113.7
|
|
|
$
|
101.3
|
|
|
$
|
205.8
|
|
|
$
|
182.5
|
|
Materials Technologies segment operating income
|
29.6
|
|
|
24.2
|
|
|
53.7
|
|
|
49.0
|
|
||||
Corporate costs
|
(19.8
|
)
|
|
(18.3
|
)
|
|
(36.4
|
)
|
|
(34.4
|
)
|
||||
Certain pension costs
|
(4.0
|
)
|
|
(3.2
|
)
|
|
(7.8
|
)
|
|
(6.3
|
)
|
||||
Total
|
$
|
119.5
|
|
|
$
|
104.0
|
|
|
$
|
215.3
|
|
|
$
|
190.8
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(In millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Grace Adjusted EBIT
|
$
|
119.5
|
|
|
$
|
104.0
|
|
|
$
|
215.3
|
|
|
$
|
190.8
|
|
Restructuring and repositioning expenses
|
(18.8
|
)
|
|
(5.4
|
)
|
|
(24.4
|
)
|
|
(7.7
|
)
|
||||
Third-party acquisition-related costs
|
(5.8
|
)
|
|
—
|
|
|
(6.7
|
)
|
|
—
|
|
||||
Loss on early extinguishment of debt
|
(4.8
|
)
|
|
—
|
|
|
(4.8
|
)
|
|
—
|
|
||||
Amortization of acquired inventory fair value adjustment
|
(4.6
|
)
|
|
—
|
|
|
(4.6
|
)
|
|
—
|
|
||||
Costs related to legacy product, environmental and other claims
|
(2.8
|
)
|
|
(14.9
|
)
|
|
(4.3
|
)
|
|
(17.0
|
)
|
||||
Income and expense items related to divested businesses
|
0.6
|
|
|
(0.7
|
)
|
|
0.1
|
|
|
(1.0
|
)
|
||||
Pension MTM adjustment and other related costs, net
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.9
|
)
|
||||
Interest expense, net
|
(19.5
|
)
|
|
(19.5
|
)
|
|
(38.4
|
)
|
|
(38.8
|
)
|
||||
Net income (loss) attributable to noncontrolling interests
|
(0.2
|
)
|
|
(0.4
|
)
|
|
(0.4
|
)
|
|
(0.4
|
)
|
||||
Income (loss) before income taxes
|
$
|
63.6
|
|
|
$
|
63.1
|
|
|
$
|
131.8
|
|
|
$
|
124.0
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(In millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net Sales
|
|
|
|
|
|
|
|
||||||||
United States
|
$
|
138.1
|
|
|
$
|
108.8
|
|
|
$
|
250.5
|
|
|
$
|
212.6
|
|
Canada
|
9.3
|
|
|
12.0
|
|
|
22.9
|
|
|
23.9
|
|
||||
Total North America
|
147.4
|
|
|
120.8
|
|
|
273.4
|
|
|
236.5
|
|
||||
Europe Middle East Africa
|
185.4
|
|
|
163.9
|
|
|
364.1
|
|
|
312.6
|
|
||||
Asia Pacific
|
124.1
|
|
|
115.5
|
|
|
224.3
|
|
|
215.4
|
|
||||
Latin America
|
28.8
|
|
|
29.3
|
|
|
55.4
|
|
|
63.0
|
|
||||
Total
|
$
|
485.7
|
|
|
$
|
429.5
|
|
|
$
|
917.2
|
|
|
$
|
827.5
|
|
(In millions)
|
June 30,
2018 |
|
December 31,
2017 |
||||
Summary Balance Sheet information:
|
|
|
|
||||
Current assets
|
$
|
293.0
|
|
|
$
|
239.8
|
|
Noncurrent assets
|
119.6
|
|
|
91.5
|
|
||
Total assets
|
$
|
412.6
|
|
|
$
|
331.3
|
|
|
|
|
|
||||
Current liabilities
|
$
|
138.6
|
|
|
$
|
82.4
|
|
Noncurrent liabilities
|
0.3
|
|
|
0.3
|
|
||
Total liabilities
|
$
|
138.9
|
|
|
$
|
82.7
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(In millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Summary Statement of Operations information:
|
|
|
|
|
|
|
|
||||||||
Net sales
|
$
|
103.0
|
|
|
$
|
110.5
|
|
|
$
|
188.2
|
|
|
$
|
207.9
|
|
Costs and expenses applicable to net sales
|
84.0
|
|
|
94.7
|
|
|
154.7
|
|
|
173.6
|
|
||||
Income before income taxes
|
16.9
|
|
|
12.6
|
|
|
28.2
|
|
|
26.8
|
|
||||
Net income
|
16.2
|
|
|
12.2
|
|
|
27.7
|
|
|
26.2
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(In millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Product manufactured for ART
|
$
|
58.5
|
|
|
$
|
53.1
|
|
|
$
|
110.4
|
|
|
$
|
104.5
|
|
Mark-up on product manufactured for ART included as a reduction of Grace’s cost of goods sold
|
1.2
|
|
|
1.0
|
|
|
2.2
|
|
|
2.0
|
|
||||
Charges for fixed costs; research and development; selling, general and administrative services; and depreciation to ART
|
10.4
|
|
|
10.4
|
|
|
21.1
|
|
|
20.8
|
|
(in millions)
|
June 30,
2018 |
|
December 31,
2017 |
||||
Accounts receivable
|
$
|
15.5
|
|
|
$
|
20.1
|
|
Noncurrent asset
|
56.0
|
|
|
32.7
|
|
||
Accounts payable
|
32.6
|
|
|
22.3
|
|
||
Debt payable within one year
|
8.7
|
|
|
8.6
|
|
||
Debt payable after one year
|
37.6
|
|
|
33.8
|
|
||
Noncurrent liability
|
56.0
|
|
|
32.7
|
|
|
Amount
(In millions)
|
|
Weighted Average Amortization Period
(in years)
|
||
Customer Lists
|
$
|
102.4
|
|
|
20.0
|
Technology
|
11.5
|
|
|
15.0
|
|
Trademarks
|
4.3
|
|
|
15.0
|
|
Total
|
$
|
118.2
|
|
|
19.1
|
(In millions)
|
Catalysts Technologies
|
|
Materials Technologies
|
|
Total Grace
|
||||||
Balance, December 31, 2017
|
$
|
357.7
|
|
|
$
|
44.7
|
|
|
$
|
402.4
|
|
Goodwill acquired during the year
|
139.7
|
|
|
—
|
|
|
139.7
|
|
|||
Foreign currency translation
|
(0.7
|
)
|
|
(0.2
|
)
|
|
(0.9
|
)
|
|||
Balance, June 30, 2018
|
$
|
496.7
|
|
|
$
|
44.5
|
|
|
$
|
541.2
|
|
•
|
Net sales
increased
13.1%
to
$485.7 million
.
|
•
|
Net income attributable to Grace
decreased
11.6%
to
$38.8 million
.
|
•
|
Adjusted EBIT
increased
14.9%
to
$119.5 million
.
|
•
|
Diluted earnings per share
decreased
9.4%
to
$0.58
per diluted share.
|
•
|
Adjusted EPS
increased
27.4%
to
$1.07
per diluted share.
|
•
|
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;
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; and
Methanol-to-Olefins (MTO) catalysts
, used to convert methanol, often derived from coal, into petrochemical feeds such as ethylene and propylene.
|
•
|
Hydroprocessing catalysts (HPC),
most of which are marketed through our Advanced Refining Technologies LLC, or ART, joint venture with Chevron Products Company (“Chevron”), that are used in process reactors to upgrade heavy oils into lighter, more useful products that comply with rising environmental standards by removing impurities such as nitrogen, sulfur and heavy metals, allowing less expensive feedstocks to be used in the petroleum refining process. (We hold a 50% economic interest in ART, which 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; and
chemical catalysts
used in a variety of industrial, environmental and consumer applications.
|
•
|
Gas-phase polypropylene process technology,
which provides our licensees with a cost-effective, flexible, and reliable capability to manufacture polypropylene products across a wide spectrum of performance attributes enabling customers to manufacture products for a broad array of end-use applications.
|
•
|
Coatings,
functional additives for wood and architectural coatings that provide surface effects and corrosion protection for metal substrates.
|
•
|
Consumer/Pharma,
specialized materials used as additives and intermediates for pharmaceuticals, nutraceuticals, beer, toothpaste, food and cosmetic segments.
|
•
|
Chemical process,
functional materials for use in plastics, rubber, tire, metal casting and adsorbent products for petrochemical and natural gas applications.
|
Analysis of Operations
(In millions)
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||
2018
|
|
2017
|
|
% Change
|
|
2018
|
|
2017
|
|
% Change
|
|||||||||||
Adjusted performance measures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Gross Margin:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Catalysts Technologies
|
43.5
|
%
|
|
40.4
|
%
|
|
3.1 pts
|
|
|
42.5
|
%
|
|
39.9
|
%
|
|
2.6 pts
|
|
||||
Materials Technologies
|
39.9
|
%
|
|
37.4
|
%
|
|
2.5 pts
|
|
|
38.2
|
%
|
|
38.2
|
%
|
|
0.0 pts
|
|
||||
Adjusted Gross Margin
|
42.6
|
%
|
|
39.6
|
%
|
|
3.0 pts
|
|
|
41.4
|
%
|
|
39.4
|
%
|
|
2.0 pts
|
|
||||
Amortization of acquired inventory fair value adjustment
|
(1.0
|
)%
|
|
—
|
%
|
|
(1.0) pts
|
|
|
(0.5
|
)%
|
|
—
|
%
|
|
(0.5) pts
|
|
||||
Pension costs in cost of goods sold
|
(0.7
|
)%
|
|
(0.2
|
)%
|
|
(0.5) pts
|
|
|
(0.8
|
)%
|
|
(0.4
|
)%
|
|
(0.4) pts
|
|
||||
Total Grace
|
40.9
|
%
|
|
39.4
|
%
|
|
1.5 pts
|
|
|
40.1
|
%
|
|
39.0
|
%
|
|
1.1 pts
|
|
||||
Adjusted EBIT:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Catalysts Technologies
|
$
|
113.7
|
|
|
$
|
101.3
|
|
|
12.2
|
%
|
|
$
|
205.8
|
|
|
$
|
182.5
|
|
|
12.8
|
%
|
Materials Technologies
|
29.6
|
|
|
24.2
|
|
|
22.3
|
%
|
|
53.7
|
|
|
49.0
|
|
|
9.6
|
%
|
||||
Corporate, pension, and other
|
(23.8
|
)
|
|
(21.5
|
)
|
|
(10.7
|
)%
|
|
(44.2
|
)
|
|
(40.7
|
)
|
|
(8.6
|
)%
|
||||
Total Grace
|
119.5
|
|
|
104.0
|
|
|
14.9
|
%
|
|
215.3
|
|
|
190.8
|
|
|
12.8
|
%
|
||||
Depreciation and amortization:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Catalysts Technologies
|
$
|
21.3
|
|
|
$
|
21.1
|
|
|
0.9
|
%
|
|
$
|
40.7
|
|
|
$
|
42.4
|
|
|
(4.0
|
)%
|
Materials Technologies
|
3.7
|
|
|
4.8
|
|
|
(22.9
|
)%
|
|
8.4
|
|
|
9.5
|
|
|
(11.6
|
)%
|
||||
Corporate
|
0.9
|
|
|
1.2
|
|
|
(25.0
|
)%
|
|
1.8
|
|
|
2.3
|
|
|
(21.7
|
)%
|
||||
Total Grace
|
25.9
|
|
|
27.1
|
|
|
(4.4
|
)%
|
|
50.9
|
|
|
54.2
|
|
|
(6.1
|
)%
|
||||
Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Catalysts Technologies
|
$
|
135.0
|
|
|
$
|
122.4
|
|
|
10.3
|
%
|
|
$
|
246.5
|
|
|
$
|
224.9
|
|
|
9.6
|
%
|
Materials Technologies
|
33.3
|
|
|
29.0
|
|
|
14.8
|
%
|
|
62.1
|
|
|
58.5
|
|
|
6.2
|
%
|
||||
Corporate, pension, and other
|
(22.9
|
)
|
|
(20.3
|
)
|
|
(12.8
|
)%
|
|
(42.4
|
)
|
|
(38.4
|
)
|
|
(10.4
|
)%
|
||||
Total Grace
|
145.4
|
|
|
131.1
|
|
|
10.9
|
%
|
|
266.2
|
|
|
245.0
|
|
|
8.7
|
%
|
||||
Adjusted EBIT margin:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Catalysts Technologies
|
31.2
|
%
|
|
31.6
|
%
|
|
(0.4) pts
|
|
|
30.3
|
%
|
|
29.7
|
%
|
|
0.6 pts
|
|
||||
Materials Technologies
|
24.4
|
%
|
|
22.2
|
%
|
|
2.2 pts
|
|
|
22.7
|
%
|
|
23.0
|
%
|
|
(0.3) pts
|
|
||||
Total Grace
|
24.6
|
%
|
|
24.2
|
%
|
|
0.4 pts
|
|
|
23.5
|
%
|
|
23.1
|
%
|
|
0.4 pts
|
|
||||
Adjusted EBITDA margin:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Catalysts Technologies
|
37.0
|
%
|
|
38.2
|
%
|
|
(1.2) pts
|
|
|
36.2
|
%
|
|
36.6
|
%
|
|
(0.4) pts
|
|
||||
Materials Technologies
|
27.5
|
%
|
|
26.6
|
%
|
|
0.9 pts
|
|
|
26.2
|
%
|
|
27.4
|
%
|
|
(1.2) pts
|
|
||||
Total Grace
|
29.9
|
%
|
|
30.5
|
%
|
|
(0.6) pts
|
|
|
29.0
|
%
|
|
29.6
|
%
|
|
(0.6) pts
|
|
Analysis of Operations
(In millions)
|
Four Quarters Ended
|
||||||
June 30,
2018 |
|
June 30,
2017 |
|||||
Calculation of Adjusted EBIT Return On Invested Capital (trailing four quarters):
|
|||||||
Adjusted EBIT
|
$
|
438.5
|
|
|
$
|
412.4
|
|
Invested Capital:
|
|
|
|
||||
Trade accounts receivable
|
277.5
|
|
|
265.0
|
|
||
Inventories
|
307.4
|
|
|
236.5
|
|
||
Accounts payable
|
(262.5
|
)
|
|
(199.9
|
)
|
||
|
322.4
|
|
|
301.6
|
|
||
Other current assets (excluding income taxes)
|
62.2
|
|
|
35.7
|
|
||
Properties and equipment, net
|
955.9
|
|
|
749.7
|
|
||
Goodwill
|
541.2
|
|
|
397.5
|
|
||
Technology and other intangible assets, net
|
364.5
|
|
|
261.9
|
|
||
Investment in unconsolidated affiliate
|
138.7
|
|
|
131.9
|
|
||
Other assets (excluding capitalized financing fees)
|
74.9
|
|
|
31.2
|
|
||
Other current liabilities (excluding income taxes, legacy environmental matters, accrued interest, and restructuring)
|
(157.0
|
)
|
|
(124.1
|
)
|
||
Other liabilities (excluding income taxes and legacy environmental matters)
|
(149.6
|
)
|
|
(111.6
|
)
|
||
Total invested capital
|
$
|
2,153.2
|
|
|
$
|
1,673.8
|
|
Adjusted EBIT Return On Invested Capital
|
20.4
|
%
|
|
24.6
|
%
|
(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 (MTM) 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 June 30,
|
||||||||||||||||||||||||||||||
|
2018
|
|
2017
|
||||||||||||||||||||||||||||
(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
|
|
|
|
|
|
|
|
|
|
$
|
0.58
|
|
|
|
|
|
|
|
|
|
|
|
$
|
0.64
|
|
||||||
Restructuring and repositioning expenses
|
$
|
18.8
|
|
|
$
|
4.6
|
|
|
$
|
14.2
|
|
|
0.21
|
|
|
$
|
5.4
|
|
|
$
|
2.5
|
|
|
$
|
2.9
|
|
|
0.04
|
|
||
Third-party acquisition-related costs
|
5.8
|
|
|
1.3
|
|
|
4.5
|
|
|
0.07
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Loss on early extinguishment of debt
|
4.8
|
|
|
1.1
|
|
|
3.7
|
|
|
0.05
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Amortization of acquired inventory fair value adjustment
|
4.6
|
|
|
1.1
|
|
|
3.5
|
|
|
0.05
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Costs related to legacy product, environmental and other claims
|
2.8
|
|
|
0.6
|
|
|
2.2
|
|
|
0.03
|
|
|
14.9
|
|
|
5.6
|
|
|
9.3
|
|
|
0.14
|
|
||||||||
Income and expense items related to divested businesses
|
(0.6
|
)
|
|
(0.1
|
)
|
|
(0.5
|
)
|
|
(0.01
|
)
|
|
0.7
|
|
|
0.3
|
|
|
0.4
|
|
|
0.01
|
|
||||||||
Discrete tax items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Income tax expense related to historical tax attributes(1)
|
|
|
(4.7
|
)
|
|
4.7
|
|
|
0.07
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Discrete tax items
|
|
|
|
(1.1
|
)
|
|
1.1
|
|
|
0.02
|
|
|
|
|
|
(0.9
|
)
|
|
0.9
|
|
|
0.01
|
|
||||||||
Adjusted EPS
|
|
|
|
|
|
|
|
|
|
$
|
1.07
|
|
|
|
|
|
|
|
|
|
|
|
$
|
0.84
|
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||||||
|
2018
|
|
2017
|
||||||||||||||||||||||||||||
(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
|
|
|
|
|
|
|
|
|
|
$
|
1.22
|
|
|
|
|
|
|
|
|
$
|
1.27
|
|
|||||||||
Restructuring and repositioning expenses
|
$
|
24.4
|
|
|
$
|
5.7
|
|
|
$
|
18.7
|
|
|
0.28
|
|
|
$
|
7.7
|
|
|
$
|
3.3
|
|
|
$
|
4.4
|
|
|
0.06
|
|
||
Third-party acquisition-related costs
|
6.7
|
|
|
1.6
|
|
|
5.1
|
|
|
0.08
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Loss on early extinguishment of debt
|
4.8
|
|
|
1.1
|
|
|
3.7
|
|
|
0.05
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Amortization of acquired inventory fair value adjustment
|
4.6
|
|
|
1.1
|
|
|
3.5
|
|
|
0.05
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Costs related to legacy product, environmental and other claims
|
4.3
|
|
|
1.0
|
|
|
3.3
|
|
|
0.05
|
|
|
17.0
|
|
|
6.4
|
|
|
10.6
|
|
|
0.15
|
|
||||||||
Income and expense items related to divested businesses
|
(0.1
|
)
|
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|
1.0
|
|
|
0.4
|
|
|
0.6
|
|
|
0.01
|
|
||||||||
Pension MTM adjustment and other related costs, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.9
|
|
|
0.7
|
|
|
1.2
|
|
|
0.02
|
|
||||||||
Discrete tax items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Income tax expense related to historical tax attributes(1)
|
|
|
(9.4
|
)
|
|
9.4
|
|
|
0.14
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Discrete tax items
|
|
|
(1.1
|
)
|
|
1.1
|
|
|
0.02
|
|
|
|
|
(0.4
|
)
|
|
0.4
|
|
|
0.01
|
|
||||||||||
Adjusted EPS
|
|
|
|
|
|
|
$
|
1.89
|
|
|
|
|
|
|
|
|
$
|
1.52
|
|
(1)
|
Our historical tax attribute carryforwards (net operating losses and tax credits) unfavorably affect our tax expense with respect to certain provisions of the Act. To normalize the effective tax rate, an adjustment is made to eliminate the tax expense impact associated with the historical tax attributes.
|
(in millions)
|
Three Months Ended June 30, 2018
|
|
Six Months Ended June 30, 2018
|
||||
Write-off of plant equipment and engineering costs
|
$
|
9.1
|
|
|
$
|
9.1
|
|
Third-party costs of manufacturing and business transformation programs
|
4.9
|
|
|
8.1
|
|
||
Employee severance
|
2.5
|
|
|
3.7
|
|
||
Other
|
2.3
|
|
|
3.5
|
|
||
Total restructuring and repositioning expenses
|
$
|
18.8
|
|
|
$
|
24.4
|
|
(a)
|
a $950 million term loan due in 2025, with interest at LIBOR +175 basis points, and
|
(b)
|
a $400 million revolving credit facility due in 2023, with interest at LIBOR +175 basis points.
|
(In millions)
|
Maximum Borrowing Amount
|
|
Available Liquidity
|
|
Expiration Date
|
||||
China
|
$
|
23.0
|
|
|
$
|
18.7
|
|
|
Various through 2023
|
Other countries
|
28.4
|
|
|
14.6
|
|
|
Various through 2023, as well as open-ended
|
||
Total
|
$
|
51.4
|
|
|
$
|
33.3
|
|
|
|
|
Six Months Ended June 30,
|
||||||
(In millions)
|
2018
|
|
2017
|
||||
Net cash provided by (used for) operating activities
|
$
|
119.0
|
|
|
$
|
140.5
|
|
Net cash provided by (used for) investing activities
|
(499.0
|
)
|
|
(58.8
|
)
|
||
Net cash provided by (used for) financing activities
|
350.3
|
|
|
(13.2
|
)
|
||
Effect of currency exchange rate changes on cash, cash equivalents, and restricted cash
|
(1.0
|
)
|
|
3.5
|
|
||
Net increase (decrease) in cash and cash equivalents
|
(30.7
|
)
|
|
72.0
|
|
||
Cash, cash equivalents, and restricted cash, beginning of period
|
163.5
|
|
|
100.6
|
|
||
Cash, cash equivalents, and restricted cash, end of period
|
$
|
132.8
|
|
|
$
|
172.6
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(In millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
U.S. advance-funded plans
|
$
|
50.0
|
|
|
$
|
—
|
|
|
$
|
50.0
|
|
|
$
|
—
|
|
U.S. pay-as-you-go plans
|
$
|
1.8
|
|
|
$
|
1.8
|
|
|
$
|
3.5
|
|
|
$
|
3.7
|
|
Non-U.S. advance-funded plans
|
0.5
|
|
|
0.2
|
|
|
0.5
|
|
|
0.5
|
|
||||
Non-U.S. pay-as-you-go plans
|
1.9
|
|
|
2.0
|
|
|
3.9
|
|
|
3.6
|
|
||||
Total Cash Contributions
|
$
|
54.2
|
|
|
$
|
4.0
|
|
|
$
|
57.9
|
|
|
$
|
7.8
|
|
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)
|
||||
4/1/2018 - 4/30/2018
|
|
61,000
|
|
|
66.06
|
|
|
61,000
|
|
|
179.9
|
|
5/1/2018 - 5/31/2018
|
|
47,731
|
|
|
71.29
|
|
|
47,731
|
|
|
176.5
|
|
6/1/2018 - 6/30/2018
|
|
100,569
|
|
|
73.00
|
|
|
100,569
|
|
|
169.1
|
|
Total
|
|
209,300
|
|
|
70.59
|
|
|
209,300
|
|
|
|
•
|
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
|
2.1
|
|
|
Exhibit 2.4 to Form 10-K (filed 2/22/18) SEC File No.: 001-13953
|
|
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
|
|
4.1
|
|
|
Exhibit 4.1 to Form 8-K (filed 4/03/18) SEC File No.: 001-13953
|
|
4.2
|
|
|
Exhibit 4.2 to Form 10-Q (filed 5/09/18) SEC File No.: 001-13953
|
|
10.1
|
|
|
Exhibit 10.1 to Form 8-K (filed 5/14/18) SEC File No.: 001-13953*
|
|
10.2
|
|
|
Filed herewith*
|
|
10.3
|
|
|
Filed herewith*
|
Exhibit No.
|
|
Description of Exhibit
|
|
Location
|
10.4
|
|
|
Filed herewith*
|
|
10.5
|
|
|
Filed herewith*
|
|
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: August 8, 2018
|
By:
|
/s/ A. E. FESTA
|
|
|
A. E. Festa
Chairman and Chief Executive Officer
(Principal Executive Officer)
|
|
|
|
Date: August 8, 2018
|
By:
|
/s/ HUDSON LA FORCE
|
|
|
Hudson La Force
President and Chief Operating Officer
(Acting Principal Financial Officer)
|
|
|
|
Date: August 8, 2018
|
By:
|
/s/ WILLIAM C. DOCKMAN
|
|
|
William C. Dockman
Vice President and Controller
(Principal Accounting Officer)
|
•
|
If a Participant ceases employment before age 55, the Participant will forfeit all rights to any cash payment or stock award related to this 20__-20__ PBU Grant.
|
•
|
If a Participant ceases employment at or after age 55 (at a time that the sum of his or her age and years of service total at least 60), or at or after age 62, or as a result of death or disability, during the Performance Period, then his or her PBU Grant shall thereupon vest, and he or she (or his or her estate or legal representative, as appropriate) shall be entitled to receive any cash payment or stock award (as appropriate) he or she would otherwise have received (at the time he or she would have otherwise received such payment or award), except that the amount of any such payment or award shall be reduced ratably in proportion to the portion of the Performance Period during which the Participant was not an employee (measured in whole calendar months ). If a Participant ceases employment with the Company for any of the reasons specified in this paragraph, after the completion of the applicable Performance Period (but before the cash payment or stock award is made), then his or her rights to his or her PBU Grant shall thereupon vest, and he or she shall be entitled to receive such cash payment or stock award at the time he or she would have otherwise received such payment or award.
|
•
|
Any other provision of this document notwithstanding, if a Participant is terminated from employment by the Company for “cause” (as defined in the next sentence), such Participant shall forfeit all rights to any cash payment (or stock award) related to a PBU Grant. “Cause” means the Participant engaging in actions that are injurious to the Company (monetarily or otherwise), or a Participant’s conviction for any criminal violation involving dishonesty or fraud or any crime which constitutes a felony.
|
(a)
|
For a period of __ months after a Participant is no longer employed (for any reason whatsoever) by the Company, the Participant will not, without the prior written consent of an authorized officer of the Company, (a) directly or indirectly engage in or (b) assist or have any active interest in (whether as a proprietor, partner, stockholder, officer, director or any type of principal whatsoever; provided that ownership of not more than 2% of the outstanding stock of a corporation traded on a national securities exchange shall not of itself be viewed as assisting or having an active interest), or (c) enter the employment of or act as an agent, broker or distributor for or adviser or consultant to any person, firm, corporation or business entity that is (or is about to become) directly or indirectly engaged in the development, manufacture or sale of any product that competes with or is similar to any product manufactured, sold or under development by the Company at any time while the Participant was employed by the Company, in any area of the world in which such product is, at the time the Participant ceases to be employed, manufactured or sold by the Company; provided that this restriction shall apply only with respect to the products with whose development, manufacture, or sale the Participant was concerned or connected with in any way during the __-month period immediately prior to the Participant ceasing to be an employee of the Company.
|
(b)
|
The Participant hereby acknowledges and confirms that the business of the Company extends throughout substantial areas of the world. During the course of the Participant’s employment with the Company, the Participant’s involvement with the business of the Company may vary as to products and geographic area. It is the Company’s practice to enforce
|
•
|
____________________________ units on ______________________________
|
•
|
____________________________ units on ______________________________
|
•
|
____________________________ units on ______________________________
|
•
|
If a Participant ceases employment at or after age 55 (at a time that the sum of his or her years of service and age total at least 60), or at or after age 62, or as a result of death or disability, prior to the Vesting/Stock Valuation Date specified by his or her RSU Grant Agreement, then he or she (or his or her estate or legal representative, as appropriate) shall be entitled to receive any cash payment or stock award (as appropriate), as soon as administratively practical after cessation of employment, calculated using the date of his or her cessation of employment as the Vesting/Stock Valuation Date, except that the amount of any such payment or award shall be reduced ratably in proportion to the portion of the Service Period during which the Participant was not an employee (measured in whole calendar months). If a Participant ceases employment with the Company for any of the reasons specified in this paragraph, after the designated Vesting/Stock Valuation Date (but before the cash payment or stock award is made), then his or her rights to his RSU Grant shall thereupon vest, and he or she shall be entitled to receive such cash payment or stock award at the time he or she would have otherwise received such payment or award.
|
•
|
Any other provision of this document notwithstanding, if a Participant is terminated from employment by the Company for “cause” (as defined in the next sentence), such Participant shall forfeit all rights to any RSU Grant. “Cause” means the Participant engaging in actions that are injurious to the Company (monetarily or otherwise), or a Participant’s conviction for any criminal violation involving dishonesty or fraud or any crime which constitutes a felony. |
(a)
|
For a period of __ months after (the Participant is no longer employed (for any reason whatsoever) by the Company, the Participant will not, without the prior written consent of an authorized officer of the Company, (a) directly or indirectly engage in or (b) assist or have any active interest in (whether as a proprietor, partner, stockholder, officer, director or any type of principal whatsoever; provided that ownership of not more than 2% of the outstanding stock of a corporation traded on a national securities exchange shall not of itself be viewed as assisting or having an active interest), or (c) enter the employment of or act as an agent, broker or distributor for or adviser or consultant to any person, firm, corporation or business entity that is (or is about to become) directly or indirectly engaged in the development, manufacture or sale of any product that competes with or is similar to any product manufactured, sold or under development by the Company at any time while the Participant was employed by the Company, in any area of the world in which such product is, at the time the Participant ceases to be employed, manufactured or sold by the Company; provided that this restriction shall apply only with respect to the products with whose development, manufacture, or sale the Participant was concerned or connected with in any way during the __-month period immediately prior to the Participant ceasing to be an employee of the Company.
|
•
|
______________________ shares on ______________________________
|
•
|
______________________ shares on ______________________________
|
•
|
______________________ shares on ______________________________
|
•
|
In the event of a voluntary cessation of the Participant’s service without the consent of the Committee, any portion of the Stock Option that is vested as of the date of such cessation of service shall terminate as of the 45th day following the date of such cessation of service.
|
•
|
If the Participant retires or otherwise ceases employment, and, as of the Participant’s cessation of employment, the Participant has attained the age of 55 but not age 62 (and the sum of the Participant’s age and years of service equals or exceeds 60), then a pro-rated portion of the Stock Option grant (pro-rated as specified in the next sentence) shall vest and become exercisable as of the date of the Participant’s cessation of employment, provided that such portion shall terminate (and no longer be exercisable) the sooner of (1) the date such portion would expire in the normal course or (2) three years after the date of the Participant’s cessation of employment. Such pro-rated portion shall equal the total number of shares underlying the Stock Option grant multiplied by a |
•
|
If the Participant retires or otherwise ceases employment prior to the date on which the first installment of the Stock Option grant becomes exercisable and, as of the Participant’s cessation of employment, the Participant has attained age 62, a pro-rated portion of the Stock Option grant (pro-rated as specified in the next sentence) shall vest and become exercisable as of the date of the Participant’s cessation of employment, provided that such portion shall terminate (and no longer be exercisable) the sooner of (1) the date such portion would expire in the normal course or (2) three years after the date of the Participant’s cessation of employment. Such pro-rated portion shall equal the total number of shares underlying the Stock Option grant multiplied by a fraction, the numerator of which is the number of whole calendar months elapsed since the date of grant and the denominator of which is the number of whole calendar months in the vesting period.
|
•
|
If the Participant either (1) retires or otherwise ceases employment on or following the date on which the first installment of the Stock Option grant becomes exercisable, and as of the Participant’s cessation of employment, the Participant has attained age 62, or (2) dies or become incapacitated, then the Stock Option grant shall continue to vest and be exercisable in the normal course, provided that the Stock Option grant shall terminate (and no longer be exercisable) three years after the Participant ceases employment.
|
•
|
Any portion of the Stock Option grant that does not become exercisable in accordance with the preceding information shall terminate as of the date the Participant ceases employment. |
•
|
Any other provision of this document notwithstanding, if a Participant is terminated from employment by the Company for “cause” (as defined in the next sentence), such Participant shall forfeit all rights to any Stock Option grant. “Cause” means the Participant engaging in actions that are injurious to the Company (monetarily or otherwise), or a Participant’s conviction for any criminal violation involving dishonesty or fraud or any crime which constitutes a felony.
|
(a)
|
For a period of __ months after a Participant is no longer employed (for any reason whatsoever) by the Company, the Participant will not, without the prior written consent of an authorized officer of
|
(b) |
The Participant hereby acknowledges and confirms that the business of the Company extends throughout substantial areas of the world. During the course of the Participant’s employment with the Company, the Participant’s involvement with the business of the Company may vary as to products and geographic area. It is the Company’s practice to enforce this noncompetition covenant only to the extent necessary to protect the Company’s legitimate interests commensurate with the Participant’s involvement with the business of the Company during the Participant’s employment, and the Participant acknowledges and confirms that the Company may enforce this noncompetition covenant consistent with such practice.
|
1.
|
I have reviewed this quarterly report on Form 10-Q of W. R. Grace & Co.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
|
/s/ A. E. FESTA
|
|
|
A. E. Festa
Chairman and Chief Executive Officer
(Principal Executive Officer)
|
1.
|
I have reviewed this quarterly report on Form 10-Q of W. R. Grace & Co.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
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/s/ HUDSON LA FORCE
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Hudson La Force
President and Chief Operating Officer
(Acting Principal Financial Officer)
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/s/ A. E. FESTA
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A. E. Festa
Chairman and Chief Executive Officer
(Principal Executive Officer)
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/s/ HUDSON LA FORCE
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Hudson La Force
President and Chief Operating Officer
(Acting Principal Financial Officer)
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Mine
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§104 S&S*
Citations
(#)
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§104(b) Orders
(#)
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§104(d) Citations and Orders
(#)
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§110(b)(2) Violations
(#)
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§107(a) Orders
(#)
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Total Dollar Value of MSHA Assessments Proposed
($)
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Total Number of Mining-Related Fatalities
(#)
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Received Written Notice of Pattern of S&S* Violations under §104(e)
(yes/no)
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Received Notice of Potential to have Pattern of S&S* Violations under §104(e)
(yes/no)
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Clay Mine
Aiken, SC
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—
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—
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—
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—
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—
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354
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—
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No
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No
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*
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S&S refers to violations of mandatory health or safety standards that could significantly and substantially contribute to the cause and effect of a coal or other mine safety or health hazard under §104 of the Mine Act.
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Mine
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Pending as of the end of most recent fiscal quarter
(#) |
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Instituted during most recent fiscal quarter
(#) |
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Resolved during most recent fiscal quarter
(#) |
Clay Mine
Aiken, SC
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—
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—
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—
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*
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29 CFR part 2700.
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