Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | Apr. 30, 2018 | |
Document and Entity Information | ||
Entity Registrant Name | W R GRACE & CO | |
Entity Central Index Key | 1,045,309 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 67,296,308 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 |
Consolidated Statements of Oper
Consolidated Statements of Operations (unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Statement [Abstract] | ||
Net sales | $ 431.5 | $ 398 |
Cost of goods sold | 262 | 244.8 |
Gross profit | 169.5 | 153.2 |
Selling, general and administrative expenses | 69.3 | 65.5 |
Research and development expenses | 14.7 | 13.9 |
Provision for environmental remediation, net | 0.1 | 0 |
Equity in earnings of unconsolidated affiliate | (5.4) | (7) |
Restructuring and repositioning expenses | 5.6 | 2.3 |
Interest expense and related financing costs | 19.3 | 19.5 |
Other (income) expense, net | 2.3 | 1.9 |
Total costs and expenses | 101.3 | 92.3 |
Income (loss) before income taxes | 68.2 | 60.9 |
(Provision for) benefit from income taxes | (24.8) | (18) |
Net income (loss) | 43.4 | 42.9 |
Less: Net (income) loss attributable to noncontrolling interests | 0.2 | 0 |
Net income (loss) attributable to W. R. Grace & Co. shareholders | $ 43.6 | $ 42.9 |
Basic earnings per share: | ||
Net income (loss) | $ 0.64 | $ 0.63 |
Weighted average number of basic shares | 67.6 | 68.3 |
Diluted earnings per share: | ||
Net income (loss) | $ 0.64 | $ 0.63 |
Weighted average number of diluted shares | 67.7 | 68.5 |
Dividends per common share | $ 0.24 | $ 0.21 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive (Loss) Income (unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ 43.4 | $ 42.9 |
Other comprehensive income (loss), net of income taxes: | ||
Defined benefit pension and other postretirement plans | (0.2) | (0.3) |
Currency translation adjustments | (18.2) | (1.4) |
Gain (loss) from hedging activities | 1.8 | 0.7 |
Total other comprehensive income (loss) | (16.6) | (1) |
Comprehensive income (loss) | 26.8 | 41.9 |
Less: comprehensive (income) loss attributable to noncontrolling interests | 0.2 | 0 |
Comprehensive income (loss) attributable to W. R. Grace & Co. shareholders | $ 27 | $ 41.9 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
OPERATING ACTIVITIES | |||
Net income (loss) | $ 43.4 | $ 42.9 | |
Reconciliation to net cash provided by (used for) operating activities: | |||
Depreciation and amortization | 25 | 27.1 | |
Equity in earnings of unconsolidated affiliate | (5.4) | (7) | |
(Costs) benefit related to legacy product, environmental and other claims | 1.5 | 2.1 | |
Cash paid for legacy product, environmental and other claims | 6.3 | 40.7 | |
Provision for (benefit from) income taxes | 24.8 | 18 | |
Cash paid for income taxes | 8.9 | 15.4 | |
Income tax refunds received | 0 | 0.8 | |
Interest expense and related financing costs | 19.3 | 19.5 | |
Cash paid for interest | (5.3) | (4.9) | |
Defined benefit pension expense | 3.8 | 5 | |
Cash paid under defined benefit pension arrangements | (3.7) | (3.8) | |
Changes in assets and liabilities, excluding effect of currency translation and acquisitions: | |||
Trade accounts receivable | 20.1 | 19.8 | |
Inventories | (23) | (4.4) | |
Accounts payable | 10.5 | 10.1 | |
All other items, net | (6.8) | (33.2) | |
Net Cash Provided by (Used in) Operating Activities | 89 | 35.9 | |
INVESTING ACTIVITIES | |||
Capital expenditures | (50.1) | (31) | |
Other investing activities | 1.6 | 0.1 | |
Net Cash Provided by (Used in) Investing Activities | (48.5) | (30.9) | |
FINANCING ACTIVITIES | |||
Borrowings under credit arrangements | 8.6 | 38.9 | |
Repayments under credit arrangements | (11.7) | (41.7) | |
Cash paid for repurchases of common stock | 35 | 10 | |
Proceeds from exercise of stock options | 0.8 | 6 | |
Dividends paid to shareholders | (16.2) | (14.3) | |
Other financing activities | (1.6) | (0.3) | |
Net Cash Provided by (Used in) Financing Activities | (55.1) | (21.4) | |
Effect of currency exchange rate changes on cash, cash equivalents, and restricted cash | 2.4 | 2.2 | |
Net increase (decrease) in cash and cash equivalents | (12.2) | (14.2) | |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | [1] | 163.5 | 100.6 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | [2] | 151.3 | 86.4 |
Restricted cash and cash equivalents | 1.4 | 10 | |
Supplemental Cash Flow Information [Abstract] | |||
Capital expenditures in accounts payable | 29.6 | 21.2 | |
Net share settled stock option exercises | $ 0 | $ 1.2 | |
[1] | (1)Includes $10.7 million and $10.0 million of restricted cash and cash equivalents at December 31, 2017 and 2016, respectively. | ||
[2] | (2)Includes $1.4 million and $10.0 million of restricted cash and cash equivalents at March 31, 2018 and 2017, respectively. |
Consolidated Balance Sheets (un
Consolidated Balance Sheets (unaudited) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Current Assets | ||
Cash and cash equivalents | $ 149.9 | $ 152.8 |
Restricted cash and cash equivalents | 1.4 | 10.7 |
Trade accounts receivable, less allowance of $11.7 (2017—$11.7) | 269.1 | 285.2 |
Inventories | 256.2 | 230.9 |
Other current assets | 51 | 49 |
Total Current Assets | 727.6 | 728.6 |
Properties and equipment, net of accumulated depreciation and amortization of $1,497.9 (2017—$1,463.4) | 829.4 | 799.1 |
Goodwill | 405.2 | 402.4 |
Technology and other intangible assets, net | 251.6 | 255.4 |
Deferred income taxes | 550.6 | 556.5 |
Investment in unconsolidated affiliate | 132.2 | 125.9 |
Other assets | 48.5 | 39.1 |
Total Assets | 2,945.1 | 2,907 |
Current Liabilities | ||
Debt payable within one year | 14.8 | 20.1 |
Accounts payable | 217.3 | 210.3 |
Other current liabilities | 233.5 | 217.8 |
Total Current Liabilities | 465.6 | 448.2 |
Debt payable after one year | 1,531.7 | 1,523.8 |
Underfunded and unfunded defined benefit pension plans | 516 | 502.4 |
Other liabilities | 185.9 | 169.3 |
Total Liabilities | 2,699.2 | 2,643.7 |
Equity | ||
Common stock issued, par value $0.01; 300,000,000 shares authorized; outstanding: 67,295,704 (2017—67,780,410) | 0.7 | 0.7 |
Paid-in capital | 476.1 | 474.8 |
Retained earnings | 603.7 | 573.1 |
Treasury stock, at cost: shares: 10,160,923 (2017—9,676,217) | (864.6) | (832.1) |
Accumulated other comprehensive income (loss) | 23.3 | 39.9 |
Total W. R. Grace & Co. Shareholders’ Equity | 239.2 | 256.4 |
Noncontrolling interests | 6.7 | 6.9 |
Total Equity | 245.9 | 263.3 |
Total Liabilities and Equity | $ 2,945.1 | $ 2,907 |
Consolidated Balance Sheets (u6
Consolidated Balance Sheets (unaudited) (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Trade accounts receivable, less allowance of $11.7 (2017—$11.7) | $ 11.7 | $ 11.7 |
Properties and equipment, net of accumulated depreciation and amortization of $1,497.9 (2017—$1,463.4) | $ 1,497.9 | $ 1,463.4 |
Common stock issued, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock issued, shares authorized | 300,000,000 | 300,000,000 |
Common stock issued, shares outstanding | 67,295,704 | 67,780,410 |
Treasury stock, at cost (shares) | 10,160,923 | 9,676,217 |
Consolidated Statements of Equi
Consolidated Statements of Equity (unaudited) - USD ($) $ in Millions | Total | Common Stock and Paid-in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests |
Beginning balance at Dec. 31, 2016 | $ 372.4 | $ 488 | $ 619.3 | $ (804.9) | $ 66.4 | $ 3.6 |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 42.9 | 42.9 | ||||
Repurchase of common stock | (10) | (10) | ||||
Payments to taxing authorities in consideration of employee tax obligations related to stock-based compensation arrangements | (2.2) | (2.2) | ||||
Stock-based compensation | 2.4 | 2.4 | ||||
Exercise of stock options | 5.6 | (8.8) | 14.4 | |||
Other comprehensive (loss) income | (1) | (1) | ||||
Dividends declared | 14.4 | 14.4 | ||||
Ending balance at Mar. 31, 2017 | 395.7 | 479.4 | 647.8 | (800.5) | 65.4 | 3.6 |
Increase (Decrease) in Stockholders' Equity | ||||||
Cumulative Effect of New Accounting Principle in Period of Adoption | 3.2 | |||||
Beginning balance at Dec. 31, 2017 | 263.3 | 475.5 | 573.1 | (832.1) | 39.9 | 6.9 |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 43.4 | 43.6 | (0.2) | |||
Repurchase of common stock | (35) | (35) | ||||
Payments to taxing authorities in consideration of employee tax obligations related to stock-based compensation arrangements | (0.7) | (0.7) | ||||
Stock-based compensation | 3.7 | 3.7 | ||||
Exercise of stock options | 0.8 | (0.4) | 1.2 | |||
Shares issued | 0 | (1.3) | 1.3 | |||
Other comprehensive (loss) income | (16.6) | (16.6) | ||||
Dividends declared | 16.2 | 16.2 | ||||
Ending balance at Mar. 31, 2018 | $ 245.9 | $ 476.8 | $ 603.7 | $ (864.6) | $ 23.3 | $ 6.7 |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting and Financial Reporting Policies | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Summary of Significant Accounting and Financial Reporting Policies | W. R. Grace & Co., through its subsidiaries, is engaged in specialty chemicals and specialty materials businesses on a global basis through two reportable segments: Grace Catalysts Technologies, which includes catalysts and related products and technologies used in refining, petrochemical and other chemical manufacturing applications; and Grace Materials Technologies, which includes specialty materials, including silica-based and silica-alumina-based materials, used in coatings, consumer, industrial, and pharmaceutical applications. W. R. Grace & Co. conducts all of its business through a single wholly owned subsidiary, W. R. Grace & Co.–Conn. (“Grace–Conn.”). Grace–Conn. owns all of the assets, properties and rights of W. R. Grace & Co. on a consolidated basis, either directly or through subsidiaries. As used in these notes, the term “Company” refers to W. R. Grace & Co. The term “Grace” refers to the Company and/or one or more of its subsidiaries and, in certain cases, their respective predecessors. Basis of Presentation The interim Consolidated Financial Statements presented herein are unaudited and should be read in conjunction with the Consolidated Financial Statements presented in the Company’s 2017 Annual Report on Form 10-K. Such interim Consolidated Financial Statements reflect all adjustments that, in the opinion of management, are necessary for a fair statement of the results of the interim periods presented; all such adjustments are of a normal recurring nature except for the impacts of adopting new accounting standards as discussed below. All significant intercompany accounts and transactions have been eliminated. The results of operations for the three-month interim period ended March 31, 2018 , are not necessarily indicative of the results of operations to be attained for the year ending December 31, 2018 . Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements, and the reported amounts of revenues and expenses for the periods presented. Actual amounts could differ from those estimates, and the differences could be material. Changes in estimates are recorded in the period identified. Grace’s accounting measurements that are most affected by management’s estimates of future events are: • Realization values of net deferred tax assets, which depend on projections of future taxable income (see Note 5); • Pension and postretirement liabilities, which depend on assumptions regarding participant life spans, future inflation, discount rates and total returns on invested funds (see Note 6); • Carrying values of goodwill and other intangible assets, which depend on assumptions of future earnings and cash flows; and • Contingent liabilities, which depend on an assessment of the probability of loss and an estimate of ultimate obligation, such as litigation (see Note 8), income taxes (see Note 5), and environmental remediation (see Note 8). Reclassifications Certain amounts in prior years’ Consolidated Financial Statements have been reclassified to conform to the current year presentation. Such reclassifications have not materially affected previously reported amounts in the Consolidated Financial Statements. Long-Lived Assets During the 2018 first quarter, Grace, with the assistance of an outside accounting firm, completed a study to evaluate the useful lives of its operating machinery and equipment, including a review of historical asset retirement data as well as review and analysis of relevant industry practices. As a result of this study, effective January 1, 2018, Grace revised the accounting useful lives of certain machinery and equipment, which was determined to be a change in accounting estimate and is being applied prospectively. As a result of this change in accounting estimate, Grace’s depreciation expense with respect to such machinery and equipment was reduced by $2.7 million , resulting in an increase to net income of $2.1 million or $0.03 per diluted share, for the three months ended March 31, 2018. Estimated useful lives for operating machinery and equipment, which previously ranged from 3 to 10 years, now range from 5 to 25 years. Recently Issued Accounting Standards In February 2016, the FASB issued ASU 2016-02 “Leases (Topic 842).” This update is intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The core principle of Topic 842 is that a lessee should recognize the assets and liabilities that arise from leases. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term, including optional payments where they are reasonably certain to occur. Currently, as a lessee, Grace is a party to a number of leases which, under existing guidance, are classified as operating leases and not recorded on the balance sheet but expensed as incurred. Under the new standard, many of these leases will be recorded on the Consolidated Balance Sheets. Grace will adopt the standard in the 2019 first quarter. Grace has begun its evaluation of the new standard and at this time cannot reasonably estimate the effect of adoption. In January 2017, the FASB issued ASU 2017-04 “Intangibles—Goodwill and Other (Topic 350).” This update modifies the concept of impairment from the condition that exists when the carrying amount of goodwill exceeds its implied fair value to the condition that exists when the carrying amount of a reporting unit exceeds its fair value. An entity no longer will determine goodwill impairment by calculating the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination (“Step 2”). Because these amendments eliminate Step 2 from the goodwill impairment test, they should reduce the cost and complexity of evaluating goodwill for impairment. Grace is required to adopt the amendments in this update on January 1, 2020. Early adoption is permitted. Grace is currently evaluating the timing of adoption and does not expect the update to have a material effect on the Consolidated Financial Statements. In January 2018, the FASB issued ASU 2018-01 “Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842.” This update provides an optional transition practical expedient that allows an entity to elect not to evaluate under Topic 842 existing or expired land easements not previously accounted for as leases. All land easements entered into or modified after the adoption of Topic 842 must be evaluated under Topic 842. Grace, which typically does not account for easements under current lease accounting, will use the transition practical expedient when adopting Topic 842 in the 2019 first quarter and at this time cannot reasonably estimate the effect of adoption. In February 2018, the FASB issued ASU 2018-02 “Income Statement—Reporting Comprehensive Income (Topic 220).” This update addresses the revaluation of deferred tax assets and liabilities due to the Tax Cuts and Jobs Act of 2017 impacting income from continuing operations, even if the initial income tax effects were recognized in other comprehensive income. The update allows entities to reclassify the tax effects that were originally in other comprehensive income from accumulated other comprehensive income to retained earnings. The update requires entities to disclose whether the election was made and a description of the income tax effects. The update can be: (a) applied to the period of adoption, or (b) applied retrospectively to each period in which the Tax Cuts and Jobs Act of 2017 is in effect. Grace is required to adopt the amendments in this update for on January 1, 2019, with early adoption permitted. Grace is currently evaluating the timing and effect of adoption. Recently Adopted Accounting Standards In November 2016, the FASB issued ASU 2016-18 “Statement of Cash Flows (Topic 230): Restricted Cash,” which requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. Grace adopted the update in the 2018 first quarter. Restricted cash included in the Consolidated Balance Sheets as of March 31, 2018 , was $1.4 million . In January 2017, the FASB issued ASU 2017-01 “Business Combinations (Topic 805),” which provides a screen to determine when an integrated set of assets and activities is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. This screen reduces the number of transactions that need to be further evaluated. If the screen is not met, the amendments in this update (1) require that to be considered a business, a set must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output, and (2) remove the evaluation of whether a market participant could replace missing elements. The amendments in this update also narrow the definition of the term “output” so that the term is consistent with how outputs are described in ASC 606. Grace adopted the update in the 2018 first quarter, and it did not have an effect on the Consolidated Financial Statements. In May 2017, the FASB issued ASU 2017-09 “Compensation—Stock Compensation (Topic 718).” This update clarifies the existing definition of the term “modification,” which is currently defined as “a change in any of the terms or conditions of a share-based payment award.” The update requires entities to account for modifications of share-based payment awards unless the (1) fair value, (2) vesting conditions, and (3) classification as an equity instrument or a liability instrument of the modified award are the same as of the original award before modification. Grace adopted the update in the 2018 first quarter, and it did not have an effect on the Consolidated Financial Statements. Revenue Recognition In May 2014, the FASB issued ASU 2014-09 “Revenue from Contracts with Customers (Topic 606)” (“ASC 606”). This update was intended to remove inconsistencies and weaknesses in revenue requirements; provide a more robust framework for addressing revenue issues; improve comparability of revenue recognition practices across entities, industries, jurisdictions and capital markets; provide more useful information to users of financial statements through improved disclosure requirements; and simplify the preparation of financial statements by reducing the number of requirements to which an entity must refer. Grace adopted ASC 606 with a date of initial application of January 1, 2018. Grace applied the standard to all customer contracts. As a result, Grace has changed its accounting policy for revenue recognition as detailed below. Grace applied ASC 606 using the modified retrospective method, that is, by recognizing the cumulative effect of initially applying ASC 606 as an adjustment to “retained earnings” at the date of initial application. Results for periods beginning after December 31, 2017, are presented under ASC 606, while the comparative information has not been adjusted and continues to be reported in accordance with Grace’s historical accounting under ASC 605 "Revenue Recognition" (“ASC 605”). Under ASC 606, revenue from customer arrangements is recognized when control is transferred to the customer. For product sales, control is transferred at the point in time at which risk of loss and title have transferred to the customer, which is determined based on shipping terms. Terms of delivery and terms of payment are generally included in customer contracts of sale, order confirmation documents, and invoices. Grace defers revenue recognition until no other significant Grace obligations remain. Grace’s customer arrangements do not contain significant acceptance provisions. For Grace’s licensed technology business, revenue is recognized ratably over the period of performance of the contract, as the customer simultaneously receives and consumes the benefits provided by Grace’s technology licensing engineers before and during the licensee’s plant construction. Contract periods range from three to seven years, depending on the scope of the licensee’s project. Certain of Grace's contracts with customers include multiple performance obligations, particularly in the licensed technology business. For such arrangements, where applicable and material, Grace allocates revenue to each performance obligation based on its relative standalone selling price. Grace generally determines standalone selling prices based on the negotiated, contractual prices charged to customers. In instances where individual deliverables within a bundle of goods and/or services are not distinct, the bundle is accounted for as a single performance obligation. Revenue for the bundled deliverables is recognized when control is transferred to the customer, which can be at a point in time or over a period of time. In its implementation of ASC 606, Grace assessed its customer arrangements at the operating segment level, and based on the similarity of arrangements, Grace elected to use the portfolio method practical expedient. Based on the promises made to customers, exclusive of its licensed technology business, Grace determined that it has a performance obligation to manufacture and deliver products to its customers. For Grace’s licensed technology business, Grace determined that the customer arrangements contain multiple performance obligations, including licensing the technology and providing engineering design packages and technical services to the customers to enable them to realize the benefit of the technology. Grace makes certain other promises in its customer arrangements that are immaterial in the context of the contracts. Generally, transaction prices charged to Grace’s customers are fixed at the time of invoicing, and Grace expects to collect the fixed amount according to its customer payment terms. For product sales, payment is generally due within 30 to 60 days of invoicing. Grace invoices its technology license customers as certain project milestones are achieved, and payment terms are similar to those of Grace’s product sales. Grace offers various incentives to its customers that result in variable consideration, including but not limited to volume discounts, which reward bulk purchases by lowering the price for future purchases, and volume rebates, which encourage customers to purchase volume levels that would reduce their current prices. These incentives are immaterial to the Consolidated Financial Statements. Taxes that Grace collects that are assessed by a governmental authority, and that are both imposed on and concurrent with any of its revenue-producing activities, are excluded from revenue. Grace considers shipping and handling activities that it performs as activities to fulfill the sales of its products. Amounts billed for shipping and handling are included in net sales, while costs incurred for shipping and handling are included in cost of sales, in accordance with the practical expedient provided by ASC 606. Except for the changes below, Grace has consistently applied its accounting policy for revenue recognition to all periods presented in the Consolidated Financial Statements. Grace recorded a net increase to “retained earnings” of $3.2 million as of January 1, 2018, which represents the cumulative impact of adopting ASC 606, with a corresponding reduction to “other liabilities.” The cumulative adjustment results from a change in accounting for contingent revenue related to technology licensing arrangements. Under ASC 605, certain revenue was not realized until a contractual contingency was resolved. Upon adoption of ASC 606, Grace estimates all forms of variable consideration, including contingent amounts, at the inception of the arrangement and recognizes it over the period of performance. The tables below present the effect of the adoption of ASC 606 on Grace’s Consolidated Statements of Operations and Consolidated Balance Sheets. Consolidated Statements of Operations Three months ended March 31, 2018 (In millions) Under ASC 605 As Reported (ASC 606) Effect of Change Net sales $ 431.4 $ 431.5 $ 0.1 Gross profit 169.4 169.5 0.1 Income (loss) before income taxes 68.1 68.2 0.1 Net income (loss) 43.3 43.4 0.1 Net income (loss) attributable to W. R. Grace & Co. Shareholders 43.5 43.6 0.1 Consolidated Balance Sheets March 31, 2018 (In millions) Under ASC 605 As Reported (ASC 606) Effect of Change Other liabilities $ 189.2 $ 185.9 $ (3.3 ) Retained earnings 600.4 603.7 3.3 ASU 2017-07 “Compensation—Retirement Benefits (Topic 715)” In March 2017, the FASB issued ASU 2017-07 “Compensation—Retirement Benefits (Topic 715).” This update requires that the service cost component of net benefit cost be presented with other compensation costs arising from services rendered. The remaining net benefit cost is either presented as a line item in the statement of operations outside of a subtotal for income from operations, if presented, or disclosed separately. In addition, only the service cost component of net benefit cost can be capitalized. Grace adopted the update in the 2018 first quarter. The changes in classification of net benefit costs within the Consolidated Statements of Operations have been retrospectively applied to all periods presented. The change in costs capitalizable into inventory was applied prospectively in accordance with the update. The impacts of all adjustments made to previously reported amounts are summarized below: Consolidated Statements of Operations Three months ended March 31, 2017 (In millions) Previously Reported Revised Effect of Change Selling, general and administrative expenses $ 66.5 $ 67.0 $ 0.5 Research and development expenses 13.2 13.9 0.7 Other (income) expense (2.2 ) (3.4 ) (1.2 ) |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories are stated at the lower of cost or net realizable value, and cost is determined using FIFO. Inventories consisted of the following at March 31, 2018 , and December 31, 2017 : (In millions) March 31, December 31, Raw materials $ 52.1 $ 48.8 In process 39.4 33.0 Finished products 138.8 124.7 Other 25.9 24.4 Total inventory $ 256.2 $ 230.9 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Debt | Components of Debt (In millions) March 31, December 31, 5.125% senior notes due 2021, net of unamortized debt issuance costs of $5.4 at March 31, 2018 (2017—$5.8) $ 694.6 $ 694.2 U.S. dollar term loan, net of unamortized debt issuance costs and discounts of $4.1 at March 31, 2018 (2017—$4.3) 404.3 404.1 5.625% senior notes due 2024, net of unamortized debt issuance costs of $3.3 at March 31, 2018 (2017—$3.5) 296.7 296.5 Euro term loan, net of unamortized debt issuance costs and discounts of $0.9 at March 31, 2018 (2017—$1.0) 98.4 94.0 Debt payable to unconsolidated affiliate 45.6 42.4 Other borrowings(1) 6.9 12.7 Total debt 1,546.5 1,543.9 Less debt payable within one year 14.8 20.1 Debt payable after one year $ 1,531.7 $ 1,523.8 Weighted average interest rates on total debt 4.8 % 4.7 % ___________________________________________________________________________________________________________________ (1) Represents borrowings under various lines of credit and other borrowings, primarily by non-U.S. subsidiaries. See Note 4 for a discussion of the fair value of Grace’s debt. The principal maturities of debt outstanding at March 31, 2018 , were as follows: (In millions) 2018 $ 12.5 2019 9.3 2020 8.0 2021 1,203.9 2022 5.7 Thereafter 307.1 Total debt $ 1,546.5 Grace also maintained a $300 million revolving credit facility. As of March 31, 2018 , the available credit under this facility was reduced to $267.3 million by outstanding letters of credit. On April 3, 2018, Grace refinanced its U.S. dollar and euro term loans and replaced its revolving credit facility with a new facility. (See Note 16.) |
Fair Value Measurements and Ris
Fair Value Measurements and Risk | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements and Risk | Certain of Grace’s assets and liabilities are reported at fair value on a gross basis. ASC 820 “Fair Value Measurements and Disclosures” defines fair value as the value that would be received at the measurement date in the principal or “most advantageous” market. Grace uses principal market data, whenever available, to value assets and liabilities that are required to be reported at fair value. Grace has identified the following financial assets and liabilities that are subject to the fair value analysis required by ASC 820: Fair Value of Debt and Other Financial Instruments Debt payable is recorded at carrying value. Fair value is determined based on Level 2 inputs, including expected future cash flows (discounted at market interest rates), estimated current market prices and quotes from financial institutions. At March 31, 2018 , the carrying amounts and fair values of Grace’s debt were as follows: March 31, 2018 December 31, 2017 (In millions) Carrying Amount Fair Value Carrying Amount Fair Value 5.125% senior notes due 2021(1) $ 694.6 $ 712.8 $ 694.2 $ 728.7 U.S. dollar term loan(2) 404.3 403.8 404.1 409.7 5.625% senior notes due 2024(1) 296.7 305.6 296.5 321.3 Euro term loan(2) 98.4 98.3 94.0 93.7 Other borrowings 52.5 52.5 55.1 55.1 Total debt $ 1,546.5 $ 1,573.0 $ 1,543.9 $ 1,608.5 ___________________________________________________________________________________________________________________ (1) Carrying amounts are net of unamortized debt issuance costs of $5.4 million and $3.3 million as of March 31, 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. (2) Carrying amounts are net of unamortized debt issuance costs and discounts of $4.1 million and $0.9 million as of March 31, 2018 , and $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. At March 31, 2018 , the recorded values of other financial instruments such as cash equivalents and trade receivables and payables approximated their fair values, based on the short-term maturities and floating rate characteristics of these instruments. Currency Derivatives Because Grace operates and/or sells to customers in over 60 countries and in over 30 currencies, its results are exposed to fluctuations in currency exchange rates. Grace seeks to minimize exposure to these fluctuations by matching sales in volatile currencies with expenditures in the same currencies, but it is not always possible to do so. From time to time, Grace uses financial instruments such as currency forward contracts, options, swaps, or combinations thereof to reduce the risk of certain specific transactions. However, Grace does not have a policy of hedging all exposures, because management does not believe that such a level of hedging would be cost-effective. Forward contracts with maturities of not more than 36 months are used and designated as cash flow hedges of forecasted repayments of intercompany loans. The effective portion of gains and losses on these currency hedges is recorded in "accumulated other comprehensive income (loss)" and reclassified into “other (income) expense, net” to offset the remeasurement of the underlying hedged loans. Excluded components (forward points) on these hedges are amortized to income on a systematic basis. Grace also enters into foreign currency forward contracts to hedge a portion of its net outstanding monetary assets and liabilities. These forward contracts are not designated as hedging instruments under applicable accounting guidance, and therefore all changes in the fair value of the forward contracts are recorded in "other (income) expense, net," in the Consolidated Statements of Operations. These forward contracts are intended to offset the foreign currency gains or losses associated with the underlying monetary assets and liabilities. The valuation of Grace’s currency exchange rate forward contracts and swaps is determined using an income approach. Inputs used to value currency exchange rate forward contracts consist of: (1) spot rates, which are quoted by various financial institutions; (2) forward points, which are primarily affected by changes in interest rates; and (3) discount rates used to present value future cash flows, which are based on the London Interbank Offered Rate (LIBOR) curve or overnight indexed swap rates. Total notional amounts for forward contracts outstanding as of March 31, 2018 , were $187.9 million . Debt and Interest Rate Swap Agreements Grace uses interest rate swaps designated as cash flow hedges to manage fluctuations in interest rates on variable rate debt. The effective portion of gains and losses on these interest rate cash flow hedges is recorded in “accumulated other comprehensive income (loss)” and reclassified into “interest expense and related financing costs” during the hedged interest period. In connection with its emergence financing, Grace entered into interest rate swaps beginning on February 3, 2015, and maturing on February 3, 2020, fixing the LIBOR component of the interest on $250 million of Grace’s term debt at a rate of 2.393% . The valuation of these interest rate swaps is determined using an income approach, using prevailing market interest rates and discount rates to present value future cash flows based on the forward LIBOR yield curves. Credit risk is also incorporated into derivative valuations. The interest rate swaps were de-designated and terminated in April 2018 in connection with Grace’s entry into a new credit agreement. (See Note 16.) The following tables present the fair value hierarchy for financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2018 , and December 31, 2017 : Fair Value Measurements at March 31, 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 $ 2.6 $ — $ 2.6 $ — Interest rate derivatives 0.6 — 0.6 — Total Assets $ 3.2 $ — $ 3.2 $ — Liabilities Interest rate derivatives $ 0.2 $ — $ 0.2 $ — Currency derivatives 41.3 — 41.3 — Total Liabilities $ 41.5 $ — $ 41.5 $ — 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 $ — The following tables present the location and fair values of derivative instruments included in the Consolidated Balance Sheets as of March 31, 2018 , and December 31, 2017 : March 31, 2018 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 $ 2.5 Other current liabilities $ 4.4 Interest rate contracts Other current assets — Other current liabilities 0.2 Currency contracts Other assets — Other liabilities 35.8 Interest rate contracts Other assets 0.6 Other liabilities — Derivatives not designated as hedging instruments under ASC 815: Currency contracts Other current assets 0.1 Other current liabilities 1.1 Total derivatives $ 3.2 $ 41.5 December 31, 2017 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 The following tables present the location and amount of gains and losses on derivative instruments included in the Consolidated Statements of Operations or, when applicable, gains and losses initially recognized in other comprehensive income (loss) (“OCI”) for the three months ended March 31, 2018 and 2017 : Three Months Ended March 31, 2018 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 $ 1.5 Interest expense $ (0.2 ) Currency contracts(1) (6.6 ) Other expense (6.1 ) Total derivatives $ (5.1 ) $ (6.3 ) ___________________________________________________________________________________________________________________ (1) Amount of gain (loss) recognized in OCI includes $(0.8) 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 March 31, 2017 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 $ 0.1 Interest expense $ (0.9 ) Currency contracts (0.1 ) Other expense — Total derivatives $ — $ (0.9 ) The following table presents the total amounts of income and expense line items presented in the Consolidated Statements of Operations in which the effects of cash flow hedges are reported. Three Months Ended March 31, 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 $ 19.3 $ (2.3 ) $ 19.5 $ (1.9 ) Gain (loss) on cash flow hedging relationships in ASC 815 Interest rate contracts Amount of gain (loss) reclassified from accumulated OCI into income $ (0.2 ) $ — $ (0.9 ) $ — Currency contracts Amount of gain (loss) reclassified from accumulated OCI into income — (6.1 ) — — Amount excluded from effectiveness testing recognized in earnings based on amortization approach (included in above) — 0.9 — — Net Investment Hedges Grace uses cross-currency swaps as derivative hedging instruments in certain net investment hedges of its non-U.S. subsidiaries. The effective portion of gains and losses attributable to these net investment hedges is recorded net of tax to “currency translation adjustments” within “accumulated other comprehensive income (loss)” to offset the change in the carrying value of the net investment being hedged. Recognition in earnings of amounts previously recorded to “currency translation adjustments” is limited to circumstances such as complete or substantially complete liquidation of the net investment in the hedged foreign operation. At March 31, 2018 , the notional amount of €170.0 million of Grace’s cross-currency swaps was designated as a hedging instrument of its net investment in its European subsidiaries. Grace also uses foreign currency denominated debt and deferred intercompany royalties as non-derivative hedging instruments in certain net investment hedges. The effective portion of gains and losses attributable to these net investment hedges is recorded to “currency translation adjustments” within “accumulated other comprehensive income (loss).” Recognition in earnings of amounts previously recorded to “currency translation adjustments” is limited to circumstances such as complete or substantially complete liquidation of the net investment in the hedged foreign operation. At March 31, 2018 , €80.1 million of Grace’s term loan principal was designated as a hedging instrument of its net investment in its European subsidiaries. At March 31, 2018 , €28.1 million of Grace’s deferred intercompany royalties was designated as a hedging instrument of its net investment in its European subsidiaries. The term loan principal was de-designated and repaid in April 2018 in connection with Grace’s entry into a new credit agreement. (See Note 16.) The following table presents the amount of gains and losses on derivative and non-derivative instruments designated as net investment hedges, recorded to “currency translation adjustments” within “accumulated other comprehensive income (loss)” for the three months ended March 31, 2018 and 2017 . There were no reclassifications of the effective portion of net investment hedges out of OCI and into earnings for the periods presented in the tables below. Three Months Ended March 31, (In millions) 2018 2017 Derivatives in ASC 815 net investment hedging relationships: Cross-currency swap $ (11.3 ) $ (2.5 ) Non-derivatives in ASC 815 net investment hedging relationships: Foreign currency denominated debt $ (4.4 ) $ (2.3 ) Foreign currency denominated deferred intercompany royalties (1.7 ) (1.5 ) $ (6.1 ) $ (3.8 ) Credit Risk Grace is exposed to credit risk in its trade accounts receivable. Customers in the petroleum refining industry represent the greatest exposure. Grace’s credit evaluation policies mitigate credit risk exposures, and it has a history of minimal credit losses. Grace does not generally require collateral for its trade accounts receivable but may require a bank letter of credit in certain instances, particularly when selling to customers in cash-restricted countries. Grace may also be exposed to credit risk in its derivatives contracts. Grace monitors counterparty credit risk and currently does not anticipate nonperformance by counterparties to its derivatives. Grace’s derivative contracts are with internationally recognized commercial financial institutions. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | The provision for income taxes for the three months ended March 31, 2018 and 2017 , was $24.8 million and $18.0 million , respectively. The $6.8 million increase is primarily due to the Tax Cuts and Jobs Act of 2017 (the “Act”) Global Intangible Low Taxed Income (“GILTI”) 2018 first quarter tax charge of $5.9 million and a $2.5 million discrete benefit primarily related to share-based compensation deductions in the 2017 first quarter that did not repeat in 2018, offset by $1.6 million primarily related to the tax impact of the change of Grace’s geographic mix of income. On December 22, 2017, the Act was signed into law, making significant changes to the Internal Revenue Code. Changes include a federal corporate tax rate decrease from 35% to 21% for tax years beginning after December 31, 2017, the transition of U.S. international taxation from a worldwide tax system to a territorial system, and a one-time transition tax on the mandatory deemed repatriation of foreign earnings. On December 22, 2017, the SEC issued Staff Accounting Bulletin No. 118 (“SAB 118”) to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Act. In accordance with SAB 118, Grace recorded the provisional income tax effects of the Act. Additional detailed analyses are needed in order to complete the accounting for certain income tax aspects of the Act. Any subsequent adjustment to these amounts will be recorded to current tax expense in the quarter during which the analysis is completed, which is expected to be during the second half of 2018. In January 2018, the FASB released guidance on the accounting for tax on the GILTI provisions of the Act. Grace has not completed its analysis in order to make a policy decision on accounting for GILTI. |
Pension Plans and Other Postret
Pension Plans and Other Postretirement Benefit Plans | 3 Months Ended |
Mar. 31, 2018 | |
Pension and Other Postretirement Benefits Cost (Reversal of Cost) [Abstract] | |
Pension Plans and Other Postretirement Benefit Plans | Pension Plans The following table presents the funded status of Grace’s underfunded and unfunded pension plans: (In millions) March 31, December 31, Underfunded defined benefit pension plans $ (110.1 ) $ (110.5 ) Unfunded defined benefit pension plans (405.9 ) (391.9 ) Total underfunded and unfunded defined benefit pension plans (516.0 ) (502.4 ) Pension liabilities included in other current liabilities (15.3 ) (15.0 ) Net funded status $ (531.3 ) $ (517.4 ) Underfunded plans include a group of advance-funded plans that are underfunded on a projected benefit obligation (“PBO”) basis. Unfunded plans include several plans that are funded on a pay-as-you-go basis, and therefore, the entire PBO is unfunded. The following table presents the components of net periodic benefit cost (income). Three Months Ended March 31, 2018 2017 (In millions) U.S. Non-U.S. U.S. Non-U.S. Service cost $ 4.8 $ 2.4 $ 4.3 $ 2.0 Interest cost 10.3 1.3 10.5 1.0 Expected return on plan assets (14.5 ) (0.3 ) (14.4 ) (0.2 ) Amortization of prior service credit (0.2 ) — (0.1 ) — Net periodic benefit cost (income) $ 0.4 $ 3.4 $ 0.3 $ 2.8 Plan Contributions and Funding Grace intends to satisfy its funding obligations under the U.S. qualified pension plans and to comply with all of the requirements of the Employee Retirement Income Security Act of 1974 (“ERISA”). For ERISA purposes, funded status is calculated on a different basis than under U.S. GAAP. On April 6, 2018, Grace contributed $50.0 million to its U.S. qualified pension plans. Grace intends to fund non-U.S. pension plans based on applicable legal requirements and actuarial recommendations. Defined Contribution Retirement Plan Grace sponsors a defined contribution retirement plan for its employees in the United States. This plan is qualified under section 401(k) of the U.S. tax code. Currently, Grace contributes an amount equal to 100% of employee contributions, up to 6% of an individual employee’s salary or wages. Grace’s cost related to this benefit plan for the three months ended March 31, 2018 , was $2.8 million compared with $2.7 million for the prior-year quarter . The U.S. salaried pension plan is closed to new entrants after January 1, 2017. U.S. salaried employees and certain U.S. hourly employees hired on or after January 1, 2017, and employees in Germany hired on or after January 1, 2016, will participate in enhanced defined contribution plans instead of defined benefit pension plans. |
Other Balance Sheet Accounts
Other Balance Sheet Accounts | 3 Months Ended |
Mar. 31, 2018 | |
Other Balance Sheet Accounts [Abstract] | |
Other Balance Sheet Accounts | (In millions) March 31, December 31, Other Current Liabilities Accrued compensation $ 39.0 $ 60.7 Accrued interest 29.9 16.5 Deferred revenue 29.6 19.5 Environmental contingencies 22.4 23.5 Income taxes payable 17.9 12.2 Pension liabilities 15.3 15.0 Other accrued liabilities 79.4 70.4 $ 233.5 $ 217.8 Accrued compensation includes salaries and wages as well as estimated current amounts due under the annual and long-term incentive programs. (In millions) March 31, December 31, Other Liabilities Environmental contingencies $ 42.6 $ 46.8 Liability to unconsolidated affiliate 38.5 32.7 Fair value of currency and interest rate contracts 35.8 22.7 Deferred revenue 17.1 14.9 Asset retirement obligation 9.6 10.4 Deferred income taxes 8.3 8.2 Postemployment liability 5.0 5.2 Other noncurrent liabilities 29.0 28.4 $ 185.9 $ 169.3 |
Commitments and Contingent Liab
Commitments and Contingent Liabilities | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingent Liabilities | Over the years, Grace operated numerous types of businesses that are no longer part of its business portfolio. As Grace divested or otherwise ceased operating these businesses, it retained certain liabilities and obligations, which we refer to as legacy liabilities. The principal legacy liabilities are product and environmental liabilities. Although the outcome of each of the matters discussed below cannot be predicted with certainty, Grace has assessed its risk and has made accounting estimates as required under U.S. GAAP. Legacy Product and Environmental Liabilities Legacy Product Liabilities Grace emerged from an asbestos-related Chapter 11 bankruptcy on February 3, 2014 (the “Effective Date”). Under its plan of reorganization, all pending and future asbestos-related claims are channeled for resolution to either a personal injury trust (the “PI Trust”) or a property damage trust (the “PD Trust”). The trusts are the sole recourse for holders of asbestos-related claims. The channeling injunctions issued by the bankruptcy court prohibit holders of asbestos-related claims from asserting such claims directly against Grace. Grace has satisfied all of its financial obligations to the PI Trust. Grace has contingent financial obligations remaining to the PD Trust. With respect to property damage claims related to Grace’s former Zonolite attic insulation product installed in the U.S. (“ZAI PD Claims”), the PD Trust was funded with $34.4 million on the Effective Date and $30.0 million on February 3, 2017. Grace is also obligated to make up to 10 contingent deferred payments of $8 million per year to the PD Trust in respect of ZAI PD Claims during the 20 -year period beginning on the fifth anniversary of the Effective Date, with each such payment due only if the assets of the PD Trust in respect of ZAI PD Claims fall below $10 million during the preceding year. Grace has not accrued for the 10 additional payments as Grace does not have sufficient information to conclude that they are probable. Grace is not obligated to make additional payments to the PD Trust in respect of ZAI PD Claims beyond the payments described above. Grace has satisfied all of its financial obligations with respect to Canadian ZAI PD Claims. With respect to other asbestos property damage claims (“Other PD Claims”), claims unresolved as of the Effective Date are to be litigated in the bankruptcy court and any future claims are to be litigated in a federal district court, in each case pursuant to procedures approved by the bankruptcy court. To the extent any such Other PD Claims are determined to be allowed claims, they are to be paid in cash by the PD Trust. Grace is obligated to make a payment to the PD Trust every six months in the amount of any Other PD Claims allowed during the preceding six months plus interest (if applicable) and the amount of PD Trust expenses for the preceding six months (the “PD Obligation”). Grace has not paid any Other PD Claims since emergence. Annual expenses have been approximately $0.2 million per year. The aggregate amount to be paid under the PD Obligation is not capped and Grace may be obligated to make additional payments to the PD Trust in respect of the PD Obligation. Grace has accrued for those unresolved Other PD Claims that it believes are probable and estimable. Grace has not accrued for other unresolved or unasserted Other PD Claims as it does not believe that payment is probable. All payments to the PD Trust required after the Effective Date are secured by the Company’s obligation to issue 77,372,257 shares of Company common stock to the PD Trust in the event of default, subject to customary anti-dilution provisions. This summary of the commitments and contingencies related to the Chapter 11 proceeding does not purport to be complete and is qualified in its entirety by reference to the plan of reorganization and the exhibits and documents related thereto, which have been filed with the Securities and Exchange Commission (the “SEC”). Legacy Environmental Liabilities Grace is subject to loss contingencies resulting from extensive and evolving federal, state, local and foreign environmental laws and regulations relating to its manufacturing operations. Grace has procedures in place to minimize such contingencies; nevertheless, it has liabilities associated with past operations and additional claims may arise in the future. To address its legacy liabilities, Grace accrues for anticipated costs of response efforts where an assessment has indicated that a probable liability has been incurred and the cost can be reasonably estimated. These accruals do not take into account any discounting for the time value of money. Grace’s environmental liabilities are reassessed regularly and adjusted when circumstances become better defined or response efforts and their costs can be better estimated, typically as a matter moves through the life-cycle of environmental investigation and remediation. These liabilities are evaluated based on currently available information, relating to the nature and extent of contamination, risk assessments, feasibility of response actions, and apportionment amongst other potentially responsible parties, all evaluated in light of prior experience. At March 31, 2018 , Grace’s estimated liability for legacy environmental response costs totaled $65.0 million , compared with $70.3 million at December 31, 2017 , and was included in “other current liabilities” and “other liabilities” in the Consolidated Balance Sheets. These amounts are based on agreements in place or on Grace’s estimate of costs where no formal remediation plan exists, yet there is sufficient information to estimate response costs. Vermiculite-Related Matters Grace purchased a vermiculite mine in Libby, Montana, in 1963 and operated it until 1990. Vermiculite concentrate from the Libby mine was used in the manufacture of attic insulation and other products. Some of the vermiculite ore contained naturally occurring asbestos. Grace is engaged with the U.S. Environmental Protection Agency (the “EPA”) and other federal, state and local governmental agencies in a remedial investigation and feasibility study (“RI/FS”) of the Libby mine and the surrounding area. In its 2017 Annual Project Update for the Libby Asbestos Superfund Site, the EPA announced a narrowing of its focus from the former “OU3 Study Area” to a smaller Operable Unit 3 (“OU3”). Within this revised area, the RI/FS will determine the specific areas requiring remediation and will identify possible remedial action alternatives. Possible remedial actions within OU3 are wide-ranging, from institutional controls such as land use restrictions, to more active measures involving soil removal, containment projects, or other protective measures. When meaningful new information becomes available, Grace will reevaluate estimated liability for the costs for remediation of the mine and surrounding area and adjust its reserves accordingly. Based on communications from regulatory agencies, Grace expects the RI/FS and a record of decision to be completed by the end of 2019. The EPA is also investigating or remediating formerly owned or operated sites that processed Libby vermiculite into finished products. Grace is cooperating with the EPA on these investigation and remediation activities, and has recorded a liability to the extent that its review has indicated that a probable liability has been incurred and the cost is estimable. These liabilities cover the estimated cost of investigations and, to the extent an assessment has indicated that remediation is necessary, the estimated cost of response actions. Response actions typically involve soil excavation and removal, and replacement with clean fill. The EPA may commence additional investigations in the future at other sites that processed Libby vermiculite, but Grace does not believe, based on its knowledge of prior and current operations and site conditions, that liability for remediation at such other sites is probable. Grace’s total estimated liability for response costs that are currently estimable for the Libby mine and surrounding area, and at vermiculite processing sites outside of Libby, at March 31, 2018 , and December 31, 2017 , was $20.9 million and $25.8 million , respectively. It is probable that Grace’s ultimate liability for these vermiculite-related matters will exceed current estimates by material amounts. Non-Vermiculite-Related Matters At March 31, 2018 , and December 31, 2017 , Grace’s estimated legacy environmental liability for response costs at sites not related to its former vermiculite mining and processing activities was $44.1 million and $44.5 million , respectively. This liability relates to Grace’s former businesses or operations, including its share of liability at off-site disposal facilities. Grace’s estimated liability is based upon regulatory requirements and environmental conditions at each site. As Grace receives new information, its estimated liability may change materially. Commercial and Financial Commitments and Contingencies Purchase Commitments Grace uses purchase commitments to ensure supply and to minimize the volatility of major components of direct manufacturing costs including natural gas, certain metals, rare earths, and other materials. Such commitments are for quantities that Grace fully expects to use in its normal operations. Guarantees and Indemnification Obligations Grace is a party to many contracts containing guarantees and indemnification obligations. These contracts primarily consist of: • 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. Financial Assurances Financial assurances have been established for a variety of purposes, including insurance and environmental matters, trade-related commitments and other matters. At March 31, 2018 , Grace had gross financial assurances issued and outstanding of $141.6 million , composed of $67.8 million of surety bonds issued by various insurance companies and $73.8 million of standby letters of credit and other financial assurances issued by various banks. |
Restructuring Expenses and Repo
Restructuring Expenses and Repositioning Expenses | 3 Months Ended |
Mar. 31, 2018 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Expenses and Repositioning Expenses | Restructuring Expenses In the 2018 first quarter , Grace incurred costs from restructuring actions, primarily related to workforce reductions as a result of changes in the business environment and its business structure, which are included in “restructuring and repositioning expenses” in the Consolidated Statements of Operations. Restructuring costs in the 2018 first quarter primarily related to plant exit costs and sales force reorganization. Restructuring costs in the 2017 first quarter primarily related to workforce reduction programs in manufacturing, supply chain, finance and IT. The following table presents restructuring expenses by reportable segment for the three months ended March 31, 2018 . Three Months Ended March 31, (In millions) 2018 2017 Catalysts Technologies $ 0.4 $ 0.4 Materials Technologies 0.4 0.3 Corporate 0.2 2.1 Total restructuring expenses $ 1.0 $ 2.8 These costs are not included in segment operating income. Substantially all costs related to the restructuring programs are expected to be paid by September 30, 2018. The following table presents components of the change in the restructuring liability from December 31, 2017 , to March 31, 2018 . (In millions) Balance, December 31, 2017 $ 6.7 Accruals for severance and other costs 1.4 Payments (2.8 ) Balance, March 31, 2018 $ 5.3 Repositioning Expenses Repositioning expenses primarily include third-party costs related to transformative productivity programs and costs incurred to complete the Separation. Pretax repositioning expenses for the three months ended March 31, 2018 , were $4.6 million compared with a benefit of $0.5 million for the prior-year quarter . Expenses incurred in 2018 primarily related to costs for a multi-year program to transform manufacturing and business processes to extend our competitive advantages and improve our cost position. Substantially all of these costs have been or are expected to be settled in cash. |
Other Expense (Income), net
Other Expense (Income), net | 3 Months Ended |
Mar. 31, 2018 | |
Other Income and Expenses [Abstract] | |
Other Expense (Income), net | Components of other (income) expense, net are as follows: Three Months Ended March 31, (In millions) 2018 2017 Defined benefit pension expense other than service cost $ (3.4 ) $ (1.2 ) Third-party acquisition-related costs 0.9 — Chapter 11 expenses, net 0.5 0.9 Currency transaction effects (0.4 ) 0.5 Net (gain) loss on sales of investments and disposals of assets 0.4 0.4 Other miscellaneous (income) expense (0.3 ) (2.5 ) Total other (income) expense, net $ (2.3 ) $ (1.9 ) |
Other Comprehensive Loss
Other Comprehensive Loss | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Other Comprehensive Income (Loss) | The following tables present the pre-tax, tax, and after-tax components of Grace’s other comprehensive income (loss) for the three months ended March 31, 2018 and 2017 : Three Months Ended March 31, 2018 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 (20.8 ) 2.6 (18.2 ) Gain (loss) from hedging activities 2.2 (0.4 ) 1.8 Other comprehensive income (loss) attributable to W. R. Grace & Co. shareholders $ (18.9 ) $ 2.3 $ (16.6 ) Three Months Ended March 31, 2017 Pre-Tax Amount Tax Benefit/ (Expense) After-Tax Amount Defined benefit pension and other postretirement plans: Amortization of net prior service credit included in net periodic benefit cost $ (0.6 ) $ 0.2 $ (0.4 ) Amortization of net deferred actuarial loss included in net periodic benefit cost 0.1 — 0.1 Benefit plans, net (0.5 ) 0.2 (0.3 ) Currency translation adjustments (1.4 ) — (1.4 ) Gain (loss) from hedging activities 0.9 (0.2 ) 0.7 Other comprehensive income (loss) attributable to W. R. Grace & Co. shareholders $ (1.0 ) $ — $ (1.0 ) The following tables present the changes in accumulated other comprehensive income (loss), net of tax, for the three months ended March 31, 2018 and 2017 : Three Months Ended March 31, 2018 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 — (18.2 ) (5.4 ) (23.6 ) Amounts reclassified from accumulated other comprehensive income (loss) (0.2 ) — 7.2 7.0 Net current-period other comprehensive income (loss) (0.2 ) (18.2 ) 1.8 (16.6 ) Ending balance $ 0.7 $ 23.4 $ (0.8 ) $ 23.3 Three Months Ended March 31, 2017 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 — (1.4 ) — (1.4 ) Amounts reclassified from accumulated other comprehensive income (loss) (0.3 ) — 0.7 0.4 Net current-period other comprehensive income (loss) (0.3 ) (1.4 ) 0.7 (1.0 ) Ending balance $ 1.9 $ 66.2 $ (2.7 ) $ 65.4 Grace is a global enterprise operating in many countries with local currency generally deemed to be the functional currency for accounting purposes. The currency translation amount represents the adjustments necessary to translate the balance sheets valued in local currencies to the U.S. dollar as of the end of each period presented, and to translate revenues and expenses at average exchange rates for each period presented. See Note 4 for a discussion of hedging activities. See Note 6 for a discussion of pension plans and other postretirement benefit plans. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | The following table shows a reconciliation of the numerators and denominators used in calculating basic and diluted earnings per share. Three Months Ended March 31, (In millions, except per share amounts) 2018 2017 Numerators Net income (loss) attributable to W. R. Grace & Co. shareholders $ 43.6 $ 42.9 Denominators Weighted average common shares—basic calculation 67.6 68.3 Dilutive effect of employee stock options 0.1 0.2 Weighted average common shares—diluted calculation 67.7 68.5 Basic earnings per share $ 0.64 $ 0.63 Diluted earnings per share $ 0.64 $ 0.63 There were 1.7 million anti-dilutive options outstanding for the three months ended March 31, 2018 , compared with 1.4 million for the prior-year quarter . On February 5, 2015, the Company announced that its Board of Directors had authorized a share repurchase program of up to $500 million , which it completed on July 10, 2017. On February 8, 2017, the Company announced that its Board of Directors authorized an additional share repurchase program of up to $250 million , expected to be completed over the next 24 to 36 months at the discretion of management. The timing of the repurchases and the actual amount repurchased will depend on a variety of factors, including the market price of the Company’s shares, the strategic deployment of capital, and general market and economic conditions. During the three months ended March 31, 2018 and 2017 , the Company repurchased 514,141 shares and 142,371 shares of Company common stock for $35.0 million and $10.0 million , respectively, pursuant to the terms of the share repurchase programs. As of March 31, 2018 , $183.9 million remained under the current authorization. |
Operating Segment Information
Operating Segment Information | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Operating Segment Information | Grace is a global producer of specialty chemicals and specialty materials. Grace’s two reportable business segments are Grace Catalysts Technologies and Grace Materials Technologies. Grace Catalysts Technologies includes catalysts and related products and technologies used in refining, petrochemical and other chemical manufacturing applications. Advanced Refining Technologies (“ART”), Grace’s joint venture with Chevron Products Company, a division of Chevron U.S.A. Inc. (“Chevron”), is managed in this segment. (See Note 15.) Grace Catalysts Technologies comprises two operating segments, Grace Refining Technologies and Grace Specialty Catalysts, which are aggregated into one reportable segment based upon similar economic characteristics, the nature of the products and production processes, type and class of customer, and channels of distribution. Grace Materials Technologies includes specialty materials, including silica-based and silica-alumina-based materials, used in coatings, consumer, industrial, and pharmaceutical applications. The table below presents information related to Grace’s reportable segments. Only those corporate expenses directly related to the reportable segments are allocated for reporting purposes. All remaining corporate items are reported separately and labeled as such. Grace excludes defined benefit pension expense from the calculation of segment operating income. Grace believes that the exclusion of defined benefit pension expense provides a better indicator of its reportable segment performance as defined benefit pension expense is not managed at a reportable segment level. Grace defines Adjusted EBIT to be net income attributable to W. R. Grace & Co. shareholders adjusted for interest income and expense; income taxes; costs related to legacy product, environmental and other claims; restructuring and repositioning expenses and asset impairments; pension costs other than service and interest costs, expected returns on plan assets, and amortization of prior service costs/credits; income and expense items related to divested businesses, product lines, and certain other investments; gains and losses on sales of businesses, product lines, and certain other investments; third-party acquisition-related costs and the amortization of acquired inventory fair value adjustment; and certain other items that are not representative of underlying trends. Reportable Segment Data Three Months Ended March 31, (In millions) 2018 2017 Net Sales Catalysts Technologies $ 315.8 $ 293.8 Materials Technologies 115.7 104.2 Total $ 431.5 $ 398.0 Adjusted EBIT Catalysts Technologies segment operating income $ 92.1 $ 81.2 Materials Technologies segment operating income 24.1 24.8 Corporate costs (16.6 ) (16.1 ) Certain pension costs (3.8 ) (3.1 ) Total $ 95.8 $ 86.8 Corporate costs include corporate support function costs and other corporate costs such as professional fees and insurance premiums. 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. Reconciliation of Reportable Segment Data to Financial Statements Grace Adjusted EBIT for the three months ended March 31, 2018 and 2017 , is reconciled below to “income (loss) before income taxes” presented in the accompanying Consolidated Statements of Operations. Three Months Ended March 31, (In millions) 2018 2017 Grace Adjusted EBIT $ 95.8 $ 86.8 Restructuring and repositioning expenses (5.6 ) (2.3 ) (Costs) benefit related to legacy product, environmental and other claims (1.5 ) (2.1 ) Third-party acquisition-related costs (0.9 ) — Income and expense items related to divested businesses (0.5 ) (0.3 ) Pension MTM adjustment and other related costs, net — (1.9 ) Interest expense, net (18.9 ) (19.3 ) Net income (loss) attributable to noncontrolling interests (0.2 ) — Income (loss) before income taxes $ 68.2 $ 60.9 Geographic Area Data The table below presents information related to the geographic areas in which Grace operates. Sales are attributed to geographic areas based on customer location. Three Months Ended March 31, (In millions) 2018 2017 Net Sales United States $ 112.4 $ 103.7 Canada 13.6 12.0 Total North America 126.0 115.7 Europe Middle East Africa 178.7 148.7 Asia Pacific 100.2 99.9 Latin America 26.6 33.7 Total $ 431.5 $ 398.0 |
Unconsolidated Affiliate
Unconsolidated Affiliate | 3 Months Ended |
Mar. 31, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Unconsolidated Affiliate | Grace accounts for its 50% ownership interest in ART, its joint venture with Chevron, using the equity method of accounting. Grace’s investment in ART amounted to $132.2 million and $125.9 million as of March 31, 2018 , and December 31, 2017 , respectively, and the amount included in “equity in earnings of unconsolidated affiliate” in the accompanying Consolidated Statements of Operations totaled $5.4 million for the three months ended March 31, 2018 , compared with $7.0 million for the prior-year quarter . ART is a private, limited liability company, taxed as a partnership, and accordingly does not have a quoted market price available. The following summary presents ART’s assets, liabilities and results of operations. (In millions) March 31, December 31, Summary Balance Sheet information: Current assets $ 241.9 $ 239.8 Noncurrent assets 100.9 91.5 Total assets $ 342.8 $ 331.3 Current liabilities $ 81.5 $ 82.4 Noncurrent liabilities 0.3 0.3 Total liabilities $ 81.8 $ 82.7 Three Months Ended March 31, (In millions) 2018 2017 Summary Statement of Operations information: Net sales $ 85.2 $ 97.4 Costs and expenses applicable to net sales 70.7 78.9 Income before income taxes 11.3 14.2 Net income 11.5 14.0 Grace and ART transact business on a regular basis and maintain several agreements in order to operate the joint venture. These agreements are treated as related party activities with an unconsolidated affiliate. Product manufactured by Grace for ART is accounted for on a net basis, with a mark-up, in “cost of goods sold” in the Consolidated Statements of Operations. Grace also receives reimbursement from ART for fixed costs, research and development, selling, general and administrative services, and depreciation. Grace records reimbursements against the respective line items on Grace’s Consolidated Statement of Operations. The table below presents summary financial data related to transactions between Grace and ART. Three Months Ended March 31, (In millions) 2018 2017 Product manufactured for ART $ 51.9 $ 51.4 Mark-up on product manufactured for ART included as a reduction of Grace’s cost of goods sold 1.0 1.0 Charges for fixed costs; research and development; selling, general and administrative services; and depreciation to ART 10.7 10.4 The table below presents Grace balances related to ART. (in millions) March 31, December 31, Accounts receivable $ 19.7 $ 20.1 Noncurrent asset 38.5 32.7 Accounts payable 27.9 22.3 Debt payable within one year 8.9 8.6 Debt payable after one year 36.7 33.8 Noncurrent liability 38.5 32.7 The noncurrent asset and noncurrent liability in the table above represent spending to date related to a planned residue hydroprocessing catalyst production plant in Lake Charles, Louisiana. Grace manages the design and construction of the plant, and the asset will continue to be included in “other assets” in Grace’s Consolidated Balance Sheets until construction is completed. Grace has likewise recorded a liability for the transfer of the asset to ART upon completion, included in “other liabilities” in the Consolidated Balance Sheets. Grace and Chevron provide lines of credit in the amount of $15.0 million each at a commitment fee of 0.1% of the credit amount. These agreements have been approved by the ART Executive Committee for renewal until February 2019. No amounts were outstanding at March 31, 2018 , and December 31, 2017 . |
Revenues (Notes)
Revenues (Notes) | 3 Months Ended |
Mar. 31, 2018 | |
Revenues [Abstract] | |
Revenue from Contract with Customer [Text Block] | Grace generates revenues from customer arrangements primarily by manufacturing and delivering specialty chemicals and specialty materials through its two reportable segments. See Note 14 for additional information about Grace’s reportable segments. Disaggregation of Revenue The following table presents Grace's revenues by geography and product group, within its respective reportable segments, for the three months ended March 31, 2018 and 2017 . Three Months Ended March 31, 2018 North America Europe Middle East Africa (EMEA) Asia Pacific Latin America Total Catalysts Technologies: Refining Catalysts $ 69.9 $ 61.3 $ 38.8 $ 13.4 $ 183.4 Polyolefin and Chemical Catalysts 32.2 58.4 38.0 3.8 132.4 Total $ 102.1 $ 119.7 $ 76.8 $ 17.2 $ 315.8 Materials Technologies: Coatings $ 7.1 $ 20.5 $ 11.8 $ 2.3 $ 41.7 Consumer/Pharma 7.7 13.2 4.3 4.7 29.9 Chemical process 7.4 20.8 7.2 2.3 37.7 Other 1.7 4.5 0.1 0.1 6.4 Total $ 23.9 $ 59.0 $ 23.4 $ 9.4 $ 115.7 Three Months Ended March 31, 2017 North America EMEA Asia Pacific Latin America Total Catalysts Technologies: Refining Catalysts $ 61.8 $ 54.1 $ 41.7 $ 20.8 $ 178.4 Polyolefin and Chemical Catalysts 27.6 44.2 38.6 5.0 115.4 Total $ 89.4 $ 98.3 $ 80.3 $ 25.8 $ 293.8 Materials Technologies: Coatings $ 7.0 $ 16.6 $ 9.5 $ 2.0 $ 35.1 Consumer/Pharma 10.3 12.2 3.2 4.8 30.5 Chemical process 7.4 18.6 6.8 1.1 33.9 Other 1.6 3.0 0.1 — 4.7 Total(1) $ 26.3 $ 50.4 $ 19.6 $ 7.9 $ 104.2 ___________________________________________________________________________________________________________________ (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. Contract Balances Grace invoices customers for product sales once performance obligations have been satisfied, generally at the point of delivery, at which point payment becomes unconditional. Accordingly, Grace's product sales contracts generally do not give rise to material contract assets or liabilities under ASC 606; however, from time to time certain customers may pay in advance. In the technology licensing business, Grace invoices licensees based on milestones achieved but has obligations to provide services in future periods, which results in contract liabilities. The following table presents Grace’s deferred revenue balances as of March 31, 2018 , and December 31, 2017 : (In millions) March 31, December 31, Current $ 29.6 $ 19.5 Noncurrent 17.1 14.9 Total $ 46.7 $ 34.4 These amounts are included as deferred revenue in “other current liabilities” and “other liabilities” in Grace's Consolidated Balance Sheets. Grace records deferred revenues when cash payments are received or due in advance of performance. The increase in deferred revenue reflects cash payments from customers received or due in advance of satisfying performance obligations, offset by $6.3 million of revenue recognized that was included in the deferred revenue balance as of December 31, 2017 , and the $3.2 million cumulative adjustment recorded to retained earnings as part of the adoption of ASC 606. The noncurrent portion of the technology licensing revenue will be recognized as performance obligations under the technology licensing agreements are satisfied; the noncurrent balance is expected to be recognized over the next four years . Remaining performance obligations represent the estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied). The aggregate amount of the transaction price allocated to remaining performance obligations for such contracts with a duration of more than one year was approximately $103 million as of March 31, 2018 , and includes certain amounts reported as deferred revenue above. In accordance with the practical expedient in ASC 606-10-50-14, Grace does not disclose information about remaining performance obligations that have original expected durations of one year or less. Grace expects to recognize revenue related to remaining performance obligations over several years, as follows: Year Approximate percentage of revenue related to remaining performance obligations recognized 2018 21 % 2019 28 % 2020 20 % Thereafter through 2024 31 % 100 % For the three months ended March 31, 2018 , revenue recognized from performance obligations related to prior periods was not material. Grace has not capitalized any costs to obtain or fulfill contracts with customers under ASC 606. No material impairment losses have been recognized on any receivables or contract assets arising from contracts with customers. |
Subsequent Events (Notes)
Subsequent Events (Notes) | 3 Months Ended |
Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | On April 3, 2018 , Grace entered into a Credit Agreement (the “Credit Agreement”), which provides for new senior secured credit facilities, consisting of: (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. The term loan will amortize in equal quarterly installments in aggregate annual amounts equal to 1.00% of the original principal amount thereof. The Credit Agreement contains customary affirmative covenants, including, but not limited to: (i) maintenance of existence, and compliance with laws; (ii) delivery of consolidated financial statements and other information; (iii) payment of taxes; (iv) delivery of notices of defaults and certain other material events; and (v) maintenance of adequate insurance. The Credit Agreement also contains customary negative covenants, including but not limited to restrictions on: (i) dividends on, and redemptions of, equity interests and other restricted payments; (ii) liens; (iii) loans and investments; (iv) the sale, transfer or disposition of assets and businesses; (v) transactions with affiliates; and (vi) a maximum first lien leverage ratio. Events of default under the Credit Agreement include, but are not limited to: (i) failure to pay principal, interest, fees or other amounts under the Credit Agreement when due, taking into account any applicable grace period: (ii) any representation or warranty proving to have been incorrect in any material respect when made; (iii) failure to perform or observe covenants or other terms of the Credit Agreement subject to certain grace periods; (iv) a cross-default and cross-acceleration with certain other material debt; (v) bankruptcy events; (vi) certain defaults under ERISA; and (vii) the invalidity or impairment of security interests. To secure its obligations under the Credit Agreement, Grace and certain of its U.S. subsidiaries have granted security interests in substantially all equity and debt interests in Grace–Conn. or any other Grace subsidiary owned by them and in substantially all their non-real estate assets and property. The foregoing is a summary of the Credit Agreement. Grace has filed the full text of the Credit Agreement with the SEC, which is readily available on the Internet at www.sec.gov. Grace used a portion of the proceeds to repay in full the borrowings outstanding under its 2014 credit agreement, which was terminated, as well as to make a voluntary $50.0 million accelerated contribution to the U.S. qualified pension plans. In connection with the repayment of debt, Grace recorded a loss on debt extinguishment of approximately $5 million in the 2018 second quarter. Additionally, on April 3, 2018, Grace acquired the polyolefin catalysts business of Albemarle Corporation for approximately $421 million , net of cash acquired. In connection with the financing, Grace de-designated and cash settled its existing interest rate swap. Grace also de-designated the €80.1 million of term loan principal that had been designated as a net investment hedge. Also in connection with the financing, Grace entered into a new interest rate swap, beginning on April 3, 2018, and maturing on March 31, 2023, fixing $100.0 million of term debt at 2.775% . Grace also entered into a new cross currency swap to synthetically convert $600 million of U.S. dollar-denominated floating rate debt into €490 million euro-denominated debt fixed at 2.0231% . These swaps have been designated as cash flow hedges, with gains and losses reported in “other comprehensive income (loss)” until the underlying transactions affect earnings. |
Basis of Presentation and Sum24
Basis of Presentation and Summary of Significant Accounting and Financial Reporting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The interim Consolidated Financial Statements presented herein are unaudited and should be read in conjunction with the Consolidated Financial Statements presented in the Company’s 2017 Annual Report on Form 10-K. Such interim Consolidated Financial Statements reflect all adjustments that, in the opinion of management, are necessary for a fair statement of the results of the interim periods presented; all such adjustments are of a normal recurring nature except for the impacts of adopting new accounting standards as discussed below. All significant intercompany accounts and transactions have been eliminated. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements, and the reported amounts of revenues and expenses for the periods presented. Actual amounts could differ from those estimates, and the differences could be material. Changes in estimates are recorded in the period identified. Grace’s accounting measurements that are most affected by management’s estimates of future events are: • Realization values of net deferred tax assets, which depend on projections of future taxable income (see Note 5); • Pension and postretirement liabilities, which depend on assumptions regarding participant life spans, future inflation, discount rates and total returns on invested funds (see Note 6); • Carrying values of goodwill and other intangible assets, which depend on assumptions of future earnings and cash flows; and • Contingent liabilities, which depend on an assessment of the probability of loss and an estimate of ultimate obligation, such as litigation (see Note 8), income taxes (see Note 5), and environmental remediation (see Note 8). |
Reclassifications | Reclassifications Certain amounts in prior years’ Consolidated Financial Statements have been reclassified to conform to the current year presentation. Such reclassifications have not materially affected previously reported amounts in the Consolidated Financial Statements. |
Long-lived assets | Long-Lived Assets During the 2018 first quarter, Grace, with the assistance of an outside accounting firm, completed a study to evaluate the useful lives of its operating machinery and equipment, including a review of historical asset retirement data as well as review and analysis of relevant industry practices. As a result of this study, effective January 1, 2018, Grace revised the accounting useful lives of certain machinery and equipment, which was determined to be a change in accounting estimate and is being applied prospectively. As a result of this change in accounting estimate, Grace’s depreciation expense with respect to such machinery and equipment was reduced by $2.7 million , resulting in an increase to net income of $2.1 million or $0.03 per diluted share, for the three months ended March 31, 2018. Estimated useful lives for operating machinery and equipment, which previously ranged from 3 to 10 years, now range from 5 to 25 years. |
Effect of New Accounting Standards | Recently Issued Accounting Standards In February 2016, the FASB issued ASU 2016-02 “Leases (Topic 842).” This update is intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The core principle of Topic 842 is that a lessee should recognize the assets and liabilities that arise from leases. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term, including optional payments where they are reasonably certain to occur. Currently, as a lessee, Grace is a party to a number of leases which, under existing guidance, are classified as operating leases and not recorded on the balance sheet but expensed as incurred. Under the new standard, many of these leases will be recorded on the Consolidated Balance Sheets. Grace will adopt the standard in the 2019 first quarter. Grace has begun its evaluation of the new standard and at this time cannot reasonably estimate the effect of adoption. In January 2017, the FASB issued ASU 2017-04 “Intangibles—Goodwill and Other (Topic 350).” This update modifies the concept of impairment from the condition that exists when the carrying amount of goodwill exceeds its implied fair value to the condition that exists when the carrying amount of a reporting unit exceeds its fair value. An entity no longer will determine goodwill impairment by calculating the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination (“Step 2”). Because these amendments eliminate Step 2 from the goodwill impairment test, they should reduce the cost and complexity of evaluating goodwill for impairment. Grace is required to adopt the amendments in this update on January 1, 2020. Early adoption is permitted. Grace is currently evaluating the timing of adoption and does not expect the update to have a material effect on the Consolidated Financial Statements. In January 2018, the FASB issued ASU 2018-01 “Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842.” This update provides an optional transition practical expedient that allows an entity to elect not to evaluate under Topic 842 existing or expired land easements not previously accounted for as leases. All land easements entered into or modified after the adoption of Topic 842 must be evaluated under Topic 842. Grace, which typically does not account for easements under current lease accounting, will use the transition practical expedient when adopting Topic 842 in the 2019 first quarter and at this time cannot reasonably estimate the effect of adoption. In February 2018, the FASB issued ASU 2018-02 “Income Statement—Reporting Comprehensive Income (Topic 220).” This update addresses the revaluation of deferred tax assets and liabilities due to the Tax Cuts and Jobs Act of 2017 impacting income from continuing operations, even if the initial income tax effects were recognized in other comprehensive income. The update allows entities to reclassify the tax effects that were originally in other comprehensive income from accumulated other comprehensive income to retained earnings. The update requires entities to disclose whether the election was made and a description of the income tax effects. The update can be: (a) applied to the period of adoption, or (b) applied retrospectively to each period in which the Tax Cuts and Jobs Act of 2017 is in effect. Grace is required to adopt the amendments in this update for on January 1, 2019, with early adoption permitted. Grace is currently evaluating the timing and effect of adoption. Recently Adopted Accounting Standards In November 2016, the FASB issued ASU 2016-18 “Statement of Cash Flows (Topic 230): Restricted Cash,” which requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. Grace adopted the update in the 2018 first quarter. Restricted cash included in the Consolidated Balance Sheets as of March 31, 2018 , was $1.4 million . In January 2017, the FASB issued ASU 2017-01 “Business Combinations (Topic 805),” which provides a screen to determine when an integrated set of assets and activities is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. This screen reduces the number of transactions that need to be further evaluated. If the screen is not met, the amendments in this update (1) require that to be considered a business, a set must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output, and (2) remove the evaluation of whether a market participant could replace missing elements. The amendments in this update also narrow the definition of the term “output” so that the term is consistent with how outputs are described in ASC 606. Grace adopted the update in the 2018 first quarter, and it did not have an effect on the Consolidated Financial Statements. In May 2017, the FASB issued ASU 2017-09 “Compensation—Stock Compensation (Topic 718).” This update clarifies the existing definition of the term “modification,” which is currently defined as “a change in any of the terms or conditions of a share-based payment award.” The update requires entities to account for modifications of share-based payment awards unless the (1) fair value, (2) vesting conditions, and (3) classification as an equity instrument or a liability instrument of the modified award are the same as of the original award before modification. Grace adopted the update in the 2018 first quarter, and it did not have an effect on the Consolidated Financial Statements. Revenue Recognition In May 2014, the FASB issued ASU 2014-09 “Revenue from Contracts with Customers (Topic 606)” (“ASC 606”). This update was intended to remove inconsistencies and weaknesses in revenue requirements; provide a more robust framework for addressing revenue issues; improve comparability of revenue recognition practices across entities, industries, jurisdictions and capital markets; provide more useful information to users of financial statements through improved disclosure requirements; and simplify the preparation of financial statements by reducing the number of requirements to which an entity must refer. Grace adopted ASC 606 with a date of initial application of January 1, 2018. Grace applied the standard to all customer contracts. As a result, Grace has changed its accounting policy for revenue recognition as detailed below. Grace applied ASC 606 using the modified retrospective method, that is, by recognizing the cumulative effect of initially applying ASC 606 as an adjustment to “retained earnings” at the date of initial application. Results for periods beginning after December 31, 2017, are presented under ASC 606, while the comparative information has not been adjusted and continues to be reported in accordance with Grace’s historical accounting under ASC 605 "Revenue Recognition" (“ASC 605”). Under ASC 606, revenue from customer arrangements is recognized when control is transferred to the customer. For product sales, control is transferred at the point in time at which risk of loss and title have transferred to the customer, which is determined based on shipping terms. Terms of delivery and terms of payment are generally included in customer contracts of sale, order confirmation documents, and invoices. Grace defers revenue recognition until no other significant Grace obligations remain. Grace’s customer arrangements do not contain significant acceptance provisions. For Grace’s licensed technology business, revenue is recognized ratably over the period of performance of the contract, as the customer simultaneously receives and consumes the benefits provided by Grace’s technology licensing engineers before and during the licensee’s plant construction. Contract periods range from three to seven years, depending on the scope of the licensee’s project. Certain of Grace's contracts with customers include multiple performance obligations, particularly in the licensed technology business. For such arrangements, where applicable and material, Grace allocates revenue to each performance obligation based on its relative standalone selling price. Grace generally determines standalone selling prices based on the negotiated, contractual prices charged to customers. In instances where individual deliverables within a bundle of goods and/or services are not distinct, the bundle is accounted for as a single performance obligation. Revenue for the bundled deliverables is recognized when control is transferred to the customer, which can be at a point in time or over a period of time. In its implementation of ASC 606, Grace assessed its customer arrangements at the operating segment level, and based on the similarity of arrangements, Grace elected to use the portfolio method practical expedient. Based on the promises made to customers, exclusive of its licensed technology business, Grace determined that it has a performance obligation to manufacture and deliver products to its customers. For Grace’s licensed technology business, Grace determined that the customer arrangements contain multiple performance obligations, including licensing the technology and providing engineering design packages and technical services to the customers to enable them to realize the benefit of the technology. Grace makes certain other promises in its customer arrangements that are immaterial in the context of the contracts. Generally, transaction prices charged to Grace’s customers are fixed at the time of invoicing, and Grace expects to collect the fixed amount according to its customer payment terms. For product sales, payment is generally due within 30 to 60 days of invoicing. Grace invoices its technology license customers as certain project milestones are achieved, and payment terms are similar to those of Grace’s product sales. Grace offers various incentives to its customers that result in variable consideration, including but not limited to volume discounts, which reward bulk purchases by lowering the price for future purchases, and volume rebates, which encourage customers to purchase volume levels that would reduce their current prices. These incentives are immaterial to the Consolidated Financial Statements. Taxes that Grace collects that are assessed by a governmental authority, and that are both imposed on and concurrent with any of its revenue-producing activities, are excluded from revenue. Grace considers shipping and handling activities that it performs as activities to fulfill the sales of its products. Amounts billed for shipping and handling are included in net sales, while costs incurred for shipping and handling are included in cost of sales, in accordance with the practical expedient provided by ASC 606. Except for the changes below, Grace has consistently applied its accounting policy for revenue recognition to all periods presented in the Consolidated Financial Statements. Grace recorded a net increase to “retained earnings” of $3.2 million as of January 1, 2018, which represents the cumulative impact of adopting ASC 606, with a corresponding reduction to “other liabilities.” The cumulative adjustment results from a change in accounting for contingent revenue related to technology licensing arrangements. Under ASC 605, certain revenue was not realized until a contractual contingency was resolved. Upon adoption of ASC 606, Grace estimates all forms of variable consideration, including contingent amounts, at the inception of the arrangement and recognizes it over the period of performance. The tables below present the effect of the adoption of ASC 606 on Grace’s Consolidated Statements of Operations and Consolidated Balance Sheets. Consolidated Statements of Operations Three months ended March 31, 2018 (In millions) Under ASC 605 As Reported (ASC 606) Effect of Change Net sales $ 431.4 $ 431.5 $ 0.1 Gross profit 169.4 169.5 0.1 Income (loss) before income taxes 68.1 68.2 0.1 Net income (loss) 43.3 43.4 0.1 Net income (loss) attributable to W. R. Grace & Co. Shareholders 43.5 43.6 0.1 Consolidated Balance Sheets March 31, 2018 (In millions) Under ASC 605 As Reported (ASC 606) Effect of Change Other liabilities $ 189.2 $ 185.9 $ (3.3 ) Retained earnings 600.4 603.7 3.3 ASU 2017-07 “Compensation—Retirement Benefits (Topic 715)” In March 2017, the FASB issued ASU 2017-07 “Compensation—Retirement Benefits (Topic 715).” This update requires that the service cost component of net benefit cost be presented with other compensation costs arising from services rendered. The remaining net benefit cost is either presented as a line item in the statement of operations outside of a subtotal for income from operations, if presented, or disclosed separately. In addition, only the service cost component of net benefit cost can be capitalized. Grace adopted the update in the 2018 first quarter. The changes in classification of net benefit costs within the Consolidated Statements of Operations have been retrospectively applied to all periods presented. The change in costs capitalizable into inventory was applied prospectively in accordance with the update. The impacts of all adjustments made to previously reported amounts are summarized below: Consolidated Statements of Operations Three months ended March 31, 2017 (In millions) Previously Reported Revised Effect of Change Selling, general and administrative expenses $ 66.5 $ 67.0 $ 0.5 Research and development expenses 13.2 13.9 0.7 Other (income) expense (2.2 ) (3.4 ) (1.2 ) |
Revenue Recognition | Under ASC 606, revenue from customer arrangements is recognized when control is transferred to the customer. For product sales, control is transferred at the point in time at which risk of loss and title have transferred to the customer, which is determined based on shipping terms. Terms of delivery and terms of payment are generally included in customer contracts of sale, order confirmation documents, and invoices. Grace defers revenue recognition until no other significant Grace obligations remain. Grace’s customer arrangements do not contain significant acceptance provisions. For Grace’s licensed technology business, revenue is recognized ratably over the period of performance of the contract, as the customer simultaneously receives and consumes the benefits provided by Grace’s technology licensing engineers before and during the licensee’s plant construction. Contract periods range from three to seven years, depending on the scope of the licensee’s project. Certain of Grace's contracts with customers include multiple performance obligations, particularly in the licensed technology business. For such arrangements, where applicable and material, Grace allocates revenue to each performance obligation based on its relative standalone selling price. Grace generally determines standalone selling prices based on the negotiated, contractual prices charged to customers. In instances where individual deliverables within a bundle of goods and/or services are not distinct, the bundle is accounted for as a single performance obligation. Revenue for the bundled deliverables is recognized when control is transferred to the customer, which can be at a point in time or over a period of time. In its implementation of ASC 606, Grace assessed its customer arrangements at the operating segment level, and based on the similarity of arrangements, Grace elected to use the portfolio method practical expedient. Based on the promises made to customers, exclusive of its licensed technology business, Grace determined that it has a performance obligation to manufacture and deliver products to its customers. For Grace’s licensed technology business, Grace determined that the customer arrangements contain multiple performance obligations, including licensing the technology and providing engineering design packages and technical services to the customers to enable them to realize the benefit of the technology. Grace makes certain other promises in its customer arrangements that are immaterial in the context of the contracts. Generally, transaction prices charged to Grace’s customers are fixed at the time of invoicing, and Grace expects to collect the fixed amount according to its customer payment terms. For product sales, payment is generally due within 30 to 60 days of invoicing. Grace invoices its technology license customers as certain project milestones are achieved, and payment terms are similar to those of Grace’s product sales. Grace offers various incentives to its customers that result in variable consideration, including but not limited to volume discounts, which reward bulk purchases by lowering the price for future purchases, and volume rebates, which encourage customers to purchase volume levels that would reduce their current prices. These incentives are immaterial to the Consolidated Financial Statements. Taxes that Grace collects that are assessed by a governmental authority, and that are both imposed on and concurrent with any of its revenue-producing activities, are excluded from revenue. Grace considers shipping and handling activities that it performs as activities to fulfill the sales of its products. Amounts billed for shipping and handling are included in net sales, while costs incurred for shipping and handling are included in cost of sales, in accordance with the practical expedient provided by ASC 606. |
Basis of Presentation and Sum25
Basis of Presentation and Summary of Significant Accounting and Financial Reporting Policies Recently Adopted Accounting Standards (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Standards Update 2014-09 [Member] | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles [Table Text Block] | The tables below present the effect of the adoption of ASC 606 on Grace’s Consolidated Statements of Operations and Consolidated Balance Sheets. Consolidated Statements of Operations Three months ended March 31, 2018 (In millions) Under ASC 605 As Reported (ASC 606) Effect of Change Net sales $ 431.4 $ 431.5 $ 0.1 Gross profit 169.4 169.5 0.1 Income (loss) before income taxes 68.1 68.2 0.1 Net income (loss) 43.3 43.4 0.1 Net income (loss) attributable to W. R. Grace & Co. Shareholders 43.5 43.6 0.1 Consolidated Balance Sheets March 31, 2018 (In millions) Under ASC 605 As Reported (ASC 606) Effect of Change Other liabilities $ 189.2 $ 185.9 $ (3.3 ) Retained earnings 600.4 603.7 3.3 |
Accounting Standards Update 2017-07 [Member] | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles [Table Text Block] | The impacts of all adjustments made to previously reported amounts are summarized below: Consolidated Statements of Operations Three months ended March 31, 2017 (In millions) Previously Reported Revised Effect of Change Selling, general and administrative expenses $ 66.5 $ 67.0 $ 0.5 Research and development expenses 13.2 13.9 0.7 Other (income) expense (2.2 ) (3.4 ) (1.2 ) |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | Inventories consisted of the following at March 31, 2018 , and December 31, 2017 : (In millions) March 31, December 31, Raw materials $ 52.1 $ 48.8 In process 39.4 33.0 Finished products 138.8 124.7 Other 25.9 24.4 Total inventory $ 256.2 $ 230.9 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Disclosure of debt | Components of Debt (In millions) March 31, December 31, 5.125% senior notes due 2021, net of unamortized debt issuance costs of $5.4 at March 31, 2018 (2017—$5.8) $ 694.6 $ 694.2 U.S. dollar term loan, net of unamortized debt issuance costs and discounts of $4.1 at March 31, 2018 (2017—$4.3) 404.3 404.1 5.625% senior notes due 2024, net of unamortized debt issuance costs of $3.3 at March 31, 2018 (2017—$3.5) 296.7 296.5 Euro term loan, net of unamortized debt issuance costs and discounts of $0.9 at March 31, 2018 (2017—$1.0) 98.4 94.0 Debt payable to unconsolidated affiliate 45.6 42.4 Other borrowings(1) 6.9 12.7 Total debt 1,546.5 1,543.9 Less debt payable within one year 14.8 20.1 Debt payable after one year $ 1,531.7 $ 1,523.8 Weighted average interest rates on total debt 4.8 % 4.7 % ___________________________________________________________________________________________________________________ (1) Represents borrowings under various lines of credit and other borrowings, primarily by non-U.S. subsidiaries. |
Schedule of Maturities of Long-term Debt | The principal maturities of debt outstanding at March 31, 2018 , were as follows: (In millions) 2018 $ 12.5 2019 9.3 2020 8.0 2021 1,203.9 2022 5.7 Thereafter 307.1 Total debt $ 1,546.5 |
Fair Value Measurements and R28
Fair Value Measurements and Risk (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments | At March 31, 2018 , the carrying amounts and fair values of Grace’s debt were as follows: March 31, 2018 December 31, 2017 (In millions) Carrying Amount Fair Value Carrying Amount Fair Value 5.125% senior notes due 2021(1) $ 694.6 $ 712.8 $ 694.2 $ 728.7 U.S. dollar term loan(2) 404.3 403.8 404.1 409.7 5.625% senior notes due 2024(1) 296.7 305.6 296.5 321.3 Euro term loan(2) 98.4 98.3 94.0 93.7 Other borrowings 52.5 52.5 55.1 55.1 Total debt $ 1,546.5 $ 1,573.0 $ 1,543.9 $ 1,608.5 ___________________________________________________________________________________________________________________ (1) Carrying amounts are net of unamortized debt issuance costs of $5.4 million and $3.3 million as of March 31, 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. (2) Carrying amounts are net of unamortized debt issuance costs and discounts of $4.1 million and $0.9 million as of March 31, 2018 , and $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. |
Schedule of Fair Value of Assets and Liabilities Measured on a Recurring Basis | The following tables present the fair value hierarchy for financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2018 , and December 31, 2017 : Fair Value Measurements at March 31, 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 $ 2.6 $ — $ 2.6 $ — Interest rate derivatives 0.6 — 0.6 — Total Assets $ 3.2 $ — $ 3.2 $ — Liabilities Interest rate derivatives $ 0.2 $ — $ 0.2 $ — Currency derivatives 41.3 — 41.3 — Total Liabilities $ 41.5 $ — $ 41.5 $ — 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 $ — |
Schedule of the Location and Fair Values of Derivative Instruments Included in the Consolidated Balance Sheets | The following tables present the location and fair values of derivative instruments included in the Consolidated Balance Sheets as of March 31, 2018 , and December 31, 2017 : March 31, 2018 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 $ 2.5 Other current liabilities $ 4.4 Interest rate contracts Other current assets — Other current liabilities 0.2 Currency contracts Other assets — Other liabilities 35.8 Interest rate contracts Other assets 0.6 Other liabilities — Derivatives not designated as hedging instruments under ASC 815: Currency contracts Other current assets 0.1 Other current liabilities 1.1 Total derivatives $ 3.2 $ 41.5 December 31, 2017 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 |
Schedule of Gain (Loss) on Derivative Instruments | The following tables present the location and amount of gains and losses on derivative instruments included in the Consolidated Statements of Operations or, when applicable, gains and losses initially recognized in other comprehensive income (loss) (“OCI”) for the three months ended March 31, 2018 and 2017 : Three Months Ended March 31, 2018 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 $ 1.5 Interest expense $ (0.2 ) Currency contracts(1) (6.6 ) Other expense (6.1 ) Total derivatives $ (5.1 ) $ (6.3 ) ___________________________________________________________________________________________________________________ (1) Amount of gain (loss) recognized in OCI includes $(0.8) 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 March 31, 2017 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 $ 0.1 Interest expense $ (0.9 ) Currency contracts (0.1 ) Other expense — Total derivatives $ — $ (0.9 ) The following table presents the total amounts of income and expense line items presented in the Consolidated Statements of Operations in which the effects of cash flow hedges are reported. Three Months Ended March 31, 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 $ 19.3 $ (2.3 ) $ 19.5 $ (1.9 ) Gain (loss) on cash flow hedging relationships in ASC 815 Interest rate contracts Amount of gain (loss) reclassified from accumulated OCI into income $ (0.2 ) $ — $ (0.9 ) $ — Currency contracts Amount of gain (loss) reclassified from accumulated OCI into income — (6.1 ) — — Amount excluded from effectiveness testing recognized in earnings based on amortization approach (included in above) — 0.9 — — |
Schedule of Gain (Loss) on Nonderivative Instruments | The following table presents the amount of gains and losses on derivative and non-derivative instruments designated as net investment hedges, recorded to “currency translation adjustments” within “accumulated other comprehensive income (loss)” for the three months ended March 31, 2018 and 2017 . There were no reclassifications of the effective portion of net investment hedges out of OCI and into earnings for the periods presented in the tables below. Three Months Ended March 31, (In millions) 2018 2017 Derivatives in ASC 815 net investment hedging relationships: Cross-currency swap $ (11.3 ) $ (2.5 ) Non-derivatives in ASC 815 net investment hedging relationships: Foreign currency denominated debt $ (4.4 ) $ (2.3 ) Foreign currency denominated deferred intercompany royalties (1.7 ) (1.5 ) $ (6.1 ) $ (3.8 ) |
Pension Plans and Other Postr29
Pension Plans and Other Postretirement Benefit Plans (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Pension and Other Postretirement Benefits Cost (Reversal of Cost) [Abstract] | |
Schedule of net funded status of fully funded, underfunded, and unfunded pension plans | The following table presents the funded status of Grace’s underfunded and unfunded pension plans: (In millions) March 31, December 31, Underfunded defined benefit pension plans $ (110.1 ) $ (110.5 ) Unfunded defined benefit pension plans (405.9 ) (391.9 ) Total underfunded and unfunded defined benefit pension plans (516.0 ) (502.4 ) Pension liabilities included in other current liabilities (15.3 ) (15.0 ) Net funded status $ (531.3 ) $ (517.4 ) |
Components of net periodic benefit cost (income) | Three Months Ended March 31, 2018 2017 (In millions) U.S. Non-U.S. U.S. Non-U.S. Service cost $ 4.8 $ 2.4 $ 4.3 $ 2.0 Interest cost 10.3 1.3 10.5 1.0 Expected return on plan assets (14.5 ) (0.3 ) (14.4 ) (0.2 ) Amortization of prior service credit (0.2 ) — (0.1 ) — Net periodic benefit cost (income) $ 0.4 $ 3.4 $ 0.3 $ 2.8 |
Other Balance Sheet Accounts (T
Other Balance Sheet Accounts (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Other Balance Sheet Accounts [Abstract] | |
Schedule of Other Assets and Other Liabilities | (In millions) March 31, December 31, Other Current Liabilities Accrued compensation $ 39.0 $ 60.7 Accrued interest 29.9 16.5 Deferred revenue 29.6 19.5 Environmental contingencies 22.4 23.5 Income taxes payable 17.9 12.2 Pension liabilities 15.3 15.0 Other accrued liabilities 79.4 70.4 $ 233.5 $ 217.8 Accrued compensation includes salaries and wages as well as estimated current amounts due under the annual and long-term incentive programs. (In millions) March 31, December 31, Other Liabilities Environmental contingencies $ 42.6 $ 46.8 Liability to unconsolidated affiliate 38.5 32.7 Fair value of currency and interest rate contracts 35.8 22.7 Deferred revenue 17.1 14.9 Asset retirement obligation 9.6 10.4 Deferred income taxes 8.3 8.2 Postemployment liability 5.0 5.2 Other noncurrent liabilities 29.0 28.4 $ 185.9 $ 169.3 |
Restructuring Expenses and Re31
Restructuring Expenses and Repositioning Expenses (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Restructuring and Related Activities [Abstract] | |
Schedule of restructuring expenses and asset impairments | The following table presents restructuring expenses by reportable segment for the three months ended March 31, 2018 . Three Months Ended March 31, (In millions) 2018 2017 Catalysts Technologies $ 0.4 $ 0.4 Materials Technologies 0.4 0.3 Corporate 0.2 2.1 Total restructuring expenses $ 1.0 $ 2.8 |
Schedule of restructuring liability | (In millions) Balance, December 31, 2017 $ 6.7 Accruals for severance and other costs 1.4 Payments (2.8 ) Balance, March 31, 2018 $ 5.3 |
Other Expense (Income), net (Ta
Other Expense (Income), net (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Other Income and Expenses [Abstract] | |
Schedule of other (income) expense, net | Components of other (income) expense, net are as follows: Three Months Ended March 31, (In millions) 2018 2017 Defined benefit pension expense other than service cost $ (3.4 ) $ (1.2 ) Third-party acquisition-related costs 0.9 — Chapter 11 expenses, net 0.5 0.9 Currency transaction effects (0.4 ) 0.5 Net (gain) loss on sales of investments and disposals of assets 0.4 0.4 Other miscellaneous (income) expense (0.3 ) (2.5 ) Total other (income) expense, net $ (2.3 ) $ (1.9 ) |
Other Comprehensive Loss (Table
Other Comprehensive Loss (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Disclosure of pre-tax, tax, and after-tax components of other comprehensive income (loss) | The following tables present the pre-tax, tax, and after-tax components of Grace’s other comprehensive income (loss) for the three months ended March 31, 2018 and 2017 : Three Months Ended March 31, 2018 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 (20.8 ) 2.6 (18.2 ) Gain (loss) from hedging activities 2.2 (0.4 ) 1.8 Other comprehensive income (loss) attributable to W. R. Grace & Co. shareholders $ (18.9 ) $ 2.3 $ (16.6 ) Three Months Ended March 31, 2017 Pre-Tax Amount Tax Benefit/ (Expense) After-Tax Amount Defined benefit pension and other postretirement plans: Amortization of net prior service credit included in net periodic benefit cost $ (0.6 ) $ 0.2 $ (0.4 ) Amortization of net deferred actuarial loss included in net periodic benefit cost 0.1 — 0.1 Benefit plans, net (0.5 ) 0.2 (0.3 ) Currency translation adjustments (1.4 ) — (1.4 ) Gain (loss) from hedging activities 0.9 (0.2 ) 0.7 Other comprehensive income (loss) attributable to W. R. Grace & Co. shareholders $ (1.0 ) $ — $ (1.0 ) |
Schedule of components of accumulated other comprehensive loss | The following tables present the changes in accumulated other comprehensive income (loss), net of tax, for the three months ended March 31, 2018 and 2017 : Three Months Ended March 31, 2018 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 — (18.2 ) (5.4 ) (23.6 ) Amounts reclassified from accumulated other comprehensive income (loss) (0.2 ) — 7.2 7.0 Net current-period other comprehensive income (loss) (0.2 ) (18.2 ) 1.8 (16.6 ) Ending balance $ 0.7 $ 23.4 $ (0.8 ) $ 23.3 Three Months Ended March 31, 2017 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 — (1.4 ) — (1.4 ) Amounts reclassified from accumulated other comprehensive income (loss) (0.3 ) — 0.7 0.4 Net current-period other comprehensive income (loss) (0.3 ) (1.4 ) 0.7 (1.0 ) Ending balance $ 1.9 $ 66.2 $ (2.7 ) $ 65.4 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of reconciliation of the numerators and denominators used in calculating basic and diluted earnings per share | The following table shows a reconciliation of the numerators and denominators used in calculating basic and diluted earnings per share. Three Months Ended March 31, (In millions, except per share amounts) 2018 2017 Numerators Net income (loss) attributable to W. R. Grace & Co. shareholders $ 43.6 $ 42.9 Denominators Weighted average common shares—basic calculation 67.6 68.3 Dilutive effect of employee stock options 0.1 0.2 Weighted average common shares—diluted calculation 67.7 68.5 Basic earnings per share $ 0.64 $ 0.63 Diluted earnings per share $ 0.64 $ 0.63 |
Operating Segment Information (
Operating Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of operating segment data | Reportable Segment Data Three Months Ended March 31, (In millions) 2018 2017 Net Sales Catalysts Technologies $ 315.8 $ 293.8 Materials Technologies 115.7 104.2 Total $ 431.5 $ 398.0 Adjusted EBIT Catalysts Technologies segment operating income $ 92.1 $ 81.2 Materials Technologies segment operating income 24.1 24.8 Corporate costs (16.6 ) (16.1 ) Certain pension costs (3.8 ) (3.1 ) Total $ 95.8 $ 86.8 |
Schedule of reconciliation of operating segment data to financial statements | Grace Adjusted EBIT for the three months ended March 31, 2018 and 2017 , is reconciled below to “income (loss) before income taxes” presented in the accompanying Consolidated Statements of Operations. Three Months Ended March 31, (In millions) 2018 2017 Grace Adjusted EBIT $ 95.8 $ 86.8 Restructuring and repositioning expenses (5.6 ) (2.3 ) (Costs) benefit related to legacy product, environmental and other claims (1.5 ) (2.1 ) Third-party acquisition-related costs (0.9 ) — Income and expense items related to divested businesses (0.5 ) (0.3 ) Pension MTM adjustment and other related costs, net — (1.9 ) Interest expense, net (18.9 ) (19.3 ) Net income (loss) attributable to noncontrolling interests (0.2 ) — Income (loss) before income taxes $ 68.2 $ 60.9 |
Schedule of geographic area data | The table below presents information related to the geographic areas in which Grace operates. Sales are attributed to geographic areas based on customer location. Three Months Ended March 31, (In millions) 2018 2017 Net Sales United States $ 112.4 $ 103.7 Canada 13.6 12.0 Total North America 126.0 115.7 Europe Middle East Africa 178.7 148.7 Asia Pacific 100.2 99.9 Latin America 26.6 33.7 Total $ 431.5 $ 398.0 |
Unconsolidated Affiliate (Table
Unconsolidated Affiliate (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Summary of financial information of equity method investee | The following summary presents ART’s assets, liabilities and results of operations. (In millions) March 31, December 31, Summary Balance Sheet information: Current assets $ 241.9 $ 239.8 Noncurrent assets 100.9 91.5 Total assets $ 342.8 $ 331.3 Current liabilities $ 81.5 $ 82.4 Noncurrent liabilities 0.3 0.3 Total liabilities $ 81.8 $ 82.7 Three Months Ended March 31, (In millions) 2018 2017 Summary Statement of Operations information: Net sales $ 85.2 $ 97.4 Costs and expenses applicable to net sales 70.7 78.9 Income before income taxes 11.3 14.2 Net income 11.5 14.0 |
Schedule of financial data related to transactions between Grace and ART | The table below presents summary financial data related to transactions between Grace and ART. Three Months Ended March 31, (In millions) 2018 2017 Product manufactured for ART $ 51.9 $ 51.4 Mark-up on product manufactured for ART included as a reduction of Grace’s cost of goods sold 1.0 1.0 Charges for fixed costs; research and development; selling, general and administrative services; and depreciation to ART 10.7 10.4 The table below presents Grace balances related to ART. (in millions) March 31, December 31, Accounts receivable $ 19.7 $ 20.1 Noncurrent asset 38.5 32.7 Accounts payable 27.9 22.3 Debt payable within one year 8.9 8.6 Debt payable after one year 36.7 33.8 Noncurrent liability 38.5 32.7 |
Revenues (Tables)
Revenues (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Revenues [Abstract] | |
Disaggregation of Revenue [Table Text Block] | The following table presents Grace's revenues by geography and product group, within its respective reportable segments, for the three months ended March 31, 2018 and 2017 . Three Months Ended March 31, 2018 North America Europe Middle East Africa (EMEA) Asia Pacific Latin America Total Catalysts Technologies: Refining Catalysts $ 69.9 $ 61.3 $ 38.8 $ 13.4 $ 183.4 Polyolefin and Chemical Catalysts 32.2 58.4 38.0 3.8 132.4 Total $ 102.1 $ 119.7 $ 76.8 $ 17.2 $ 315.8 Materials Technologies: Coatings $ 7.1 $ 20.5 $ 11.8 $ 2.3 $ 41.7 Consumer/Pharma 7.7 13.2 4.3 4.7 29.9 Chemical process 7.4 20.8 7.2 2.3 37.7 Other 1.7 4.5 0.1 0.1 6.4 Total $ 23.9 $ 59.0 $ 23.4 $ 9.4 $ 115.7 Three Months Ended March 31, 2017 North America EMEA Asia Pacific Latin America Total Catalysts Technologies: Refining Catalysts $ 61.8 $ 54.1 $ 41.7 $ 20.8 $ 178.4 Polyolefin and Chemical Catalysts 27.6 44.2 38.6 5.0 115.4 Total $ 89.4 $ 98.3 $ 80.3 $ 25.8 $ 293.8 Materials Technologies: Coatings $ 7.0 $ 16.6 $ 9.5 $ 2.0 $ 35.1 Consumer/Pharma 10.3 12.2 3.2 4.8 30.5 Chemical process 7.4 18.6 6.8 1.1 33.9 Other 1.6 3.0 0.1 — 4.7 Total(1) $ 26.3 $ 50.4 $ 19.6 $ 7.9 $ 104.2 ___________________________________________________________________________________________________________________ (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. |
Contract with Customer, Asset and Liability [Table Text Block] | The following table presents Grace’s deferred revenue balances as of March 31, 2018 , and December 31, 2017 : (In millions) March 31, December 31, Current $ 29.6 $ 19.5 Noncurrent 17.1 14.9 Total $ 46.7 $ 34.4 |
Remaining Performance Obligations [Table Text Block] | Grace expects to recognize revenue related to remaining performance obligations over several years, as follows: Year Approximate percentage of revenue related to remaining performance obligations recognized 2018 21 % 2019 28 % 2020 20 % Thereafter through 2024 31 % 100 % |
Basis of Presentation and Sum38
Basis of Presentation and Summary of Significant Accounting and Financial Reporting Policies (Details) | 3 Months Ended |
Mar. 31, 2018segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of Reportable Segments | 2 |
Basis of Presentation and Sum39
Basis of Presentation and Summary of Significant Accounting and Financial Reporting Policies Recently Adopted Accounting Standards (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Jan. 01, 2018 | Dec. 31, 2016 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Depreciation and amortization | $ (25) | $ (27.1) | |||
Restricted cash and cash equivalents | $ 1.4 | 10 | $ 10.7 | $ 10 | |
Revenue, Performance Obligation, Description of Payment Terms | For product sales, payment is generally due within 30 to 60 days of invoicing. Grace invoices its technology license customers as certain project milestones are achieved, and payment terms are similar to those of Grace’s product sales. | ||||
Revenue, Net | $ 431.5 | 398 | |||
Gross profit | 169.5 | 153.2 | |||
Income (loss) before income taxes | 68.2 | 60.9 | |||
Net income (loss) | $ 43.4 | $ 42.9 | |||
Net income (loss) | $ 0.64 | $ 0.63 | |||
Net Income (Loss) Attributable to Parent | $ 43.6 | $ 42.9 | |||
Retained earnings | 603.7 | 573.1 | |||
Other liabilities | 185.9 | $ 169.3 | |||
Selling, general and administrative expenses | 69.3 | 65.5 | |||
Research and development expenses | 14.7 | 13.9 | |||
Other (income) expense, net | $ (2.3) | (1.9) | |||
Scenario, Previously Reported [Member] | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Selling, general and administrative expenses | 66.5 | ||||
Research and development expenses | 13.2 | ||||
Other (income) expense, net | (2.2) | ||||
Accounting Standards Update 2017-07 [Member] | Restatement Adjustment [Member] | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Selling, general and administrative expenses | 0.5 | ||||
Research and development expenses | 0.7 | ||||
Other (income) expense, net | (1.2) | ||||
Accounting Standards Update 2017-07 [Member] | Pro Forma [Member] | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Selling, general and administrative expenses | 67 | ||||
Research and development expenses | 13.9 | ||||
Other (income) expense, net | $ (3.4) | ||||
Minimum [Member] | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Revenue, Performance Obligation, Description of Timing | P3Y | ||||
Maximum [Member] | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Revenue, Performance Obligation, Description of Timing | P7Y | ||||
Machinery and Equipment [Member] | Minimum [Member] | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Property, Plant and Equipment, Useful Life | 3 years | ||||
Machinery and Equipment [Member] | Maximum [Member] | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Property, Plant and Equipment, Useful Life | 10 years | ||||
Service Life [Member] | Machinery and Equipment [Member] | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Depreciation and amortization | $ 2.7 | ||||
Net income (loss) | $ 2.1 | ||||
Net income (loss) | $ 0.03 | ||||
Service Life [Member] | Machinery and Equipment [Member] | Minimum [Member] | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Property, Plant and Equipment, Useful Life | 5 years | ||||
Service Life [Member] | Machinery and Equipment [Member] | Maximum [Member] | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Property, Plant and Equipment, Useful Life | 25 years | ||||
Calculated under Revenue Guidance in Effect before Topic 606 [Member] | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Revenue, Net | $ 431.4 | ||||
Gross profit | 169.4 | ||||
Income (loss) before income taxes | 68.1 | ||||
Net income (loss) | 43.3 | ||||
Net Income (Loss) Attributable to Parent | 43.5 | ||||
Retained earnings | 600.4 | ||||
Other liabilities | 189.2 | ||||
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Revenue, Net | 0.1 | ||||
Gross profit | 0.1 | ||||
Income (loss) before income taxes | 0.1 | ||||
Net income (loss) | 0.1 | ||||
Net Income (Loss) Attributable to Parent | 0.1 | ||||
Retained earnings | 3.3 | $ 3.2 | |||
Other liabilities | $ (3.3) | $ (3.2) |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 52.1 | $ 48.8 |
In process | 39.4 | 33 |
Finished products | 138.8 | 124.7 |
Other | 25.9 | 24.4 |
Total inventories | $ 256.2 | $ 230.9 |
Debt - Components of Debt (Deta
Debt - Components of Debt (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | |||
Debt payable—unconsolidated affiliate | $ 45.6 | $ 42.4 | |
Total debt | 1,546.5 | 1,543.9 | |
Debt payable within one year | 14.8 | 20.1 | |
Debt payable after one year | $ 1,531.7 | $ 1,523.8 | |
Weighted average interest rates on total debt | 4.80% | 4.70% | |
5.125% Senior Notes, Due 2021 | |||
Debt Instrument [Line Items] | |||
Interest rate (percent) | 5.125% | 5.125% | |
Unamortized discount and debt issuance costs | $ 5.4 | $ 5.8 | |
Total debt | 694.6 | 694.2 | |
Term Loan B (USD) | |||
Debt Instrument [Line Items] | |||
Unamortized discount and debt issuance costs | 4.1 | 4.3 | |
Total debt | $ 404.3 | $ 404.1 | |
5.625% Senior Notes, Due 2024 | |||
Debt Instrument [Line Items] | |||
Interest rate (percent) | 5.625% | 5.625% | |
Unamortized discount and debt issuance costs | $ 3.3 | $ 3.5 | |
Total debt | 296.7 | 296.5 | |
Term Loan B (EUR) | |||
Debt Instrument [Line Items] | |||
Unamortized discount and debt issuance costs | 0.9 | 1 | |
Total debt | 98.4 | 94 | |
Other borrowings | |||
Debt Instrument [Line Items] | |||
Total debt | [1] | $ 6.9 | $ 12.7 |
[1] | (1) Represents borrowings under various lines of credit and other borrowings, primarily by non-U.S. subsidiaries. |
Debt - Debt Maturity Schedule (
Debt - Debt Maturity Schedule (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Maturities of Long-term Debt [Abstract] | ||
2,018 | $ 12.5 | |
2,019 | 9.3 | |
2,020 | 8 | |
2,021 | 1,203.9 | |
2,022 | 5.7 | |
Thereafter | 307.1 | |
Total debt | $ 1,546.5 | $ 1,543.9 |
Debt - Narrative (Details)
Debt - Narrative (Details) - Revolving Credit Facility | Mar. 31, 2018USD ($) |
Debt Instrument [Line Items] | |
Maximum Borrowing Capacity | $ 300,000,000 |
Line of Credit Facility, Current Borrowing Capacity | $ 267,300,000 |
Fair Value Measurements and R44
Fair Value Measurements and Risk - Carrying Amounts and Fair Values of Debt (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Total debt | $ 1,546.5 | $ 1,543.9 | ||
Fair Value | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Other borrowings | 52.5 | 55.1 | ||
Total debt | 1,573 | 1,608.5 | ||
Carrying Amount | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Other borrowings | 52.5 | 55.1 | ||
Total debt | 1,546.5 | 1,543.9 | ||
Term Loan B (USD) | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Unamortized discount and debt issuance costs | 4.1 | 4.3 | ||
Term Loan B (USD) | Fair Value | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Total debt | 403.8 | 409.7 | ||
Term Loan B (USD) | Carrying Amount | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Total debt | [1] | 404.3 | 404.1 | |
Term Loan B (EUR) | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Unamortized discount and debt issuance costs | 0.9 | 1 | ||
Term Loan B (EUR) | Fair Value | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Total debt | 98.3 | 93.7 | ||
Term Loan B (EUR) | Carrying Amount | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Total debt | [1] | 98.4 | 94 | |
5.125% Senior Notes, Due 2021 | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Unamortized discount and debt issuance costs | 5.4 | 5.8 | ||
Total debt | $ 694.6 | $ 694.2 | ||
Interest rate (percent) | 5.125% | 5.125% | ||
5.125% Senior Notes, Due 2021 | Fair Value | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Total debt | $ 712.8 | $ 728.7 | ||
5.125% Senior Notes, Due 2021 | Carrying Amount | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Total debt | [2] | 694.6 | 694.2 | |
5.625% Senior Notes, Due 2024 | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Unamortized discount and debt issuance costs | 3.3 | 3.5 | ||
Total debt | $ 296.7 | $ 296.5 | ||
Interest rate (percent) | 5.625% | 5.625% | ||
5.625% Senior Notes, Due 2024 | Fair Value | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Total debt | $ 305.6 | $ 321.3 | ||
5.625% Senior Notes, Due 2024 | Carrying Amount | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Total debt | [2] | 296.7 | $ 296.5 | |
Net Investment Hedging | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net | $ 0 | $ 0 | ||
[1] | (2)Carrying amounts are net of unamortized debt issuance costs and discounts of $4.1 million and $0.9 million as of March 31, 2018, and $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. | |||
[2] | (1)Carrying amounts are net of unamortized debt issuance costs of $5.4 million and $3.3 million as of March 31, 2018, and $5.8 million and $3.5 million as of December 31, 2017, related to the 5.125% senior notes due 2021 and 5.625% senior notes due 2024, respectively. |
Fair Value Measurements and R45
Fair Value Measurements and Risk - Narrative (Details) - 3 months ended Mar. 31, 2018 € in Millions | EUR (€)Currencycountry | USD ($)Currencycountry |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Number of countries in which entity operates | country | 60 | 60 |
Number of currencies used | Currency | 30 | 30 |
Maximum Remaining Maturity of Foreign Currency Derivatives | 36 months | |
Deferred intercompany royalties designated as hedging instrument | € 28.1 | |
Term Loan B (EUR) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Term loan principal designated as hedging instrument | € 80.1 | |
Currency contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total contract value | $ | $ 187,900,000 | |
Interest rate swap | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total contract value | $ | $ 250,000,000 | |
Fixed interest rate | 2.393% | 2.393% |
Currency Swap [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total contract value | € 170 |
Fair Value Measurements and R46
Fair Value Measurements and Risk - Financial Asset and Liabilities (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Assets | ||
Total Assets | $ 3.2 | $ 3.1 |
Liabilities | ||
Total Liabilities | 41.5 | 25.6 |
Fair Value, Measurements, Recurring | ||
Assets | ||
Currency derivatives | 2.6 | 3.1 |
Interest rate derivatives | 0.6 | |
Total Assets | 3.2 | 3.1 |
Liabilities | ||
Interest rate derivatives | 0.2 | 1.8 |
Currency derivatives | 41.3 | 23.8 |
Total Liabilities | 41.5 | 25.6 |
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | ||
Assets | ||
Currency derivatives | 2.6 | 3.1 |
Interest rate derivatives | 0.6 | |
Total Assets | 3.2 | 3.1 |
Liabilities | ||
Interest rate derivatives | 0.2 | 1.8 |
Currency derivatives | 41.3 | 23.8 |
Total Liabilities | $ 41.5 | $ 25.6 |
Fair Value Measurements and R47
Fair Value Measurements and Risk - Derivative Instruments (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Asset Derivatives | ||
Total derivatives | $ 3.2 | $ 3.1 |
Liability Derivatives | ||
Total derivatives | 41.5 | 25.6 |
Designated as Hedging Instrument | Other current assets | ||
Asset Derivatives | ||
Currency contracts | 2.5 | 2.7 |
Interest rate contracts | 0 | 0 |
Designated as Hedging Instrument | Other assets | ||
Asset Derivatives | ||
Currency contracts | 0 | 0 |
Interest rate contracts | 0.6 | 0 |
Designated as Hedging Instrument | Other current liabilities | ||
Liability Derivatives | ||
Currency contracts | 4.4 | 1.4 |
Interest rate derivatives | 0.2 | 1.3 |
Designated as Hedging Instrument | Other liabilities | ||
Liability Derivatives | ||
Currency contracts | 35.8 | 22.2 |
Interest rate derivatives | 0 | 0.5 |
Not Designated as Hedging Instrument | Other current assets | ||
Asset Derivatives | ||
Currency contracts | 0.1 | 0.4 |
Not Designated as Hedging Instrument | Other current liabilities | ||
Liability Derivatives | ||
Currency contracts | $ 1.1 | $ 0.2 |
Fair Value Measurements and R48
Fair Value Measurements and Risk - Gain (Loss) on Derivative Instruments (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Gains and losses on derivative instruments | |||
Interest expense and related financing costs | $ 19.3 | $ 19.5 | |
Other (income) expense, net | (0.3) | (2.5) | |
Cash Flow Hedging | |||
Gains and losses on derivative instruments | |||
Amount of Gain (Loss) Recognized in OCI on Derivatives | (5.1) | 0 | |
Amount of Gain (Loss) Reclassified from OCI into Income | 6.3 | 0.9 | |
Cash Flow Hedging | Interest rate contracts | |||
Gains and losses on derivative instruments | |||
Amount of Gain (Loss) Recognized in OCI on Derivatives | 1.5 | 0.1 | |
Cash Flow Hedging | Interest rate contracts | Interest expense | |||
Gains and losses on derivative instruments | |||
Amount of Gain (Loss) Reclassified from OCI into Income | 0.2 | 0.9 | |
Cash Flow Hedging | Currency contracts | |||
Gains and losses on derivative instruments | |||
Amount of Gain (Loss) Recognized in OCI on Derivatives | (6.6) | [1] | (0.1) |
Derivative instruments, Gain (Loss) Recognized in OCI, Amount Excluded from Effectiveness Testing, Net | (0.8) | ||
Cash Flow Hedging | Currency contracts | Other expense | |||
Gains and losses on derivative instruments | |||
Amount of Gain (Loss) Reclassified from OCI into Income | 6.1 | 0 | |
Derivative Instruments, Gain (Loss) Recognized in Income, Ineffective Portion and Amount Excluded from Effectiveness Testing, Net | $ 0.9 | $ 0 | |
[1] | (1)Amount of gain (loss) recognized in OCI includes $(0.8) million excluded from the assessment of effectiveness for which the difference between changes in fair value and periodic amortization is recorded in OCI. |
Fair Value Measurements and R49
Fair Value Measurements and Risk - Gain (Loss) on Nonderivative Instrument (Details) - Net Investment Hedging - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net | $ 0 | $ 0 |
Nonderivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net | (6.1) | (3.8) |
Cross-currency swap [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain (Loss) Recognized in OCI on Derivatives | (11.3) | (2.5) |
Foreign currency denominated debt [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Nonderivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net | (4.4) | (2.3) |
Foreign currency denominated deferred intercompany royalties [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Nonderivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net | $ (1.7) | $ (1.5) |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Provision for (benefit from) income taxes | $ 24.8 | $ 18 | |
Increase (Decrease) in Income Taxes | 6.8 | ||
Tax Cuts and Jobs Act of 2017 GILTI Provisional Tax Expense | 5.9 | ||
Other Tax Expense (Benefit) | $ 1.6 | $ 2.5 | |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 35.00% |
Pension Plans and Other Postr51
Pension Plans and Other Postretirement Benefit Plans - Pension Plans and Other Postretirement Benefit (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | |
Funded status of fully funded, underfunded, and unfunded pension plans: | |||
Underfunded and unfunded defined benefit pension plans | $ 516 | $ 502.4 | |
Pension liabilities included in other current liabilities | 15.3 | 15 | |
Net funded status | (531.3) | (517.4) | |
Unfunded defined benefit pension plans [Member] | |||
Funded status of fully funded, underfunded, and unfunded pension plans: | |||
Underfunded and unfunded defined benefit pension plans | 405.9 | 391.9 | |
Underfunded defined benefit pension plans [Member] | |||
Funded status of fully funded, underfunded, and unfunded pension plans: | |||
Underfunded and unfunded defined benefit pension plans | $ 110.1 | $ 110.5 | |
Subsequent Event [Member] | |||
Pension plans and other postretirement benefit plans | |||
Defined Benefit Plan, Plan Assets, Contributions by Employer | $ 50 |
Pension Plans and Other Postr52
Pension Plans and Other Postretirement Benefit Plans - Components of Net Periodic Benefit Cost (Income) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Defined contribution retirement plan | ||
Percentage that the employer contributes of employee contributions under 401(k) plan | 100.00% | |
Maximum percentage of employee compensation match by employer to defined contribution plan | 6.00% | |
Costs related to defined contribution retirement plan | $ 2.8 | $ 2.7 |
Foreign Plan [Member] | ||
Net Periodic Benefit Cost | ||
Service cost | 2.4 | 2 |
Interest cost | 1.3 | 1 |
Expected return on plan assets | (0.3) | (0.2) |
Amortization of prior service credit | 0 | 0 |
Net periodic benefit cost (income) | 3.4 | 2.8 |
Domestic Plan [Member] | ||
Net Periodic Benefit Cost | ||
Service cost | 4.8 | 4.3 |
Interest cost | 10.3 | 10.5 |
Expected return on plan assets | (14.5) | (14.4) |
Amortization of prior service credit | (0.2) | (0.1) |
Net periodic benefit cost (income) | $ 0.4 | $ 0.3 |
Other Balance Sheet Accounts (D
Other Balance Sheet Accounts (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Other Current Liabilities | ||
Accrued compensation | $ 39 | $ 60.7 |
Accrued interest | 29.9 | 16.5 |
Deferred revenue | 29.6 | 19.5 |
Environmental contingencies | 22.4 | 23.5 |
Income taxes payable | 17.9 | 12.2 |
Pension liabilities included in other current liabilities | 15.3 | 15 |
Other accrued liabilities | 79.4 | 70.4 |
Total Other Current Liabilities | 233.5 | 217.8 |
Other Liabilities, Noncurrent [Abstract] | ||
Environmental contingencies | 42.6 | 46.8 |
Liability to unconsolidated affiliate | 38.5 | 32.7 |
Fair value of currency and interest rate contracts | 35.8 | 22.7 |
Deferred revenue | 17.1 | 14.9 |
Asset Retirement Obligation | 9.6 | 10.4 |
Deferred income taxes | 8.3 | 8.2 |
Postemployment liability | 5 | 5.2 |
Other noncurrent liabilities | 29 | 28.4 |
Other Liabilities, Noncurrent | $ 185.9 | $ 169.3 |
Commitments and Contingent Li54
Commitments and Contingent Liabilities - Asbestos-Related Liabilities (Details) $ in Millions | 3 Months Ended | |||
Mar. 31, 2018USD ($)paymentshares | Dec. 31, 2017USD ($) | Feb. 03, 2017USD ($) | Feb. 03, 2014USD ($) | |
Other Commitments Chapter 11 [Abstract] | ||||
ZAI PD account funding | $ 34.4 | |||
ZAI P D Account, Payment on Third Anniversary of Effective Date of Joint Plan | $ 30 | |||
ZAI P D account, maximum number of contingent deferred payments | payment | 10 | |||
ZAI P D account, deferred payments, each year for twenty years | $ 8 | |||
Period in which ZAI PD contingent deferred payments will be made | 20 years | |||
Minimum ZAI P D account assets for condition in relation to contingent obligation payments | $ 10 | |||
Frequency of PD trust payments | 6 months | |||
Estimated annual expenses related to PD Trust | $ 0.2 | |||
Number of shares issuable under warrant (in shares) | shares | 77,372,257 | |||
Environmental remediation | ||||
Estimated liability for environmental investigative and remediation costs | $ 65 | $ 70.3 | ||
Vermiculite Related Matters [Member] | ||||
Environmental remediation | ||||
Estimated liability for environmental investigative and remediation costs | 20.9 | 25.8 | ||
Non-Vermiculite Related Matters [Member] | ||||
Environmental remediation | ||||
Estimated liability for environmental investigative and remediation costs | $ 44.1 | $ 44.5 |
Commitments and Contingent Li55
Commitments and Contingent Liabilities - Financial Assurances (Details) $ in Millions | Mar. 31, 2018USD ($) |
Financial Guarantee | |
Financial assurances | |
Gross financial assurances issued and outstanding | $ 141.6 |
Surety Bonds [Member] | |
Financial assurances | |
Gross financial assurances issued and outstanding | 67.8 |
Standby Letters of Credit [Member] | |
Financial assurances | |
Gross financial assurances issued and outstanding | $ 73.8 |
Restructuring Expenses and Re56
Restructuring Expenses and Repositioning Expenses - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Restructuring and Related Activities [Abstract] | ||
Repositioning expenses | $ 4.6 | $ (0.5) |
Restructuring Expenses and Re57
Restructuring Expenses and Repositioning Expenses - Expenses and Asset Impairments (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring expenses | $ 1 | $ 2.8 |
Grace Catalysts Technologies [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring expenses | 0.4 | 0.4 |
Grace Materials Technologies [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring expenses | 0.4 | 0.3 |
Corporate, Non-Segment [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring expenses | $ 0.2 | $ 2.1 |
Restructuring Expenses and Re58
Restructuring Expenses and Repositioning Expenses - Liability Rollforward (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Restructuring Reserve [Roll Forward] | |
Balance, December 31, 2017 | $ 6.7 |
Accruals for severance and other costs | 1.4 |
Payments | (2.8) |
Balance, March 31, 2018 | $ 5.3 |
Other Expense (Income), net (De
Other Expense (Income), net (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Other Income and Expenses [Abstract] | ||
Net periodic benefit (income) cost other than service cost | $ (3.4) | $ (1.2) |
Third-party acquisition-related costs | 0.9 | 0 |
Chapter 11 expenses, net | 0.5 | 0.9 |
Currency transaction effects | (0.4) | 0.5 |
Net (gain) loss on sales of investments and disposals of assets | 0.4 | 0.4 |
Other miscellaneous (income) expense | (0.3) | (2.5) |
Total other (income) expense, net | $ (2.3) | $ (1.9) |
Other Comprehensive Loss - OCI
Other Comprehensive Loss - OCI Components (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Accumulated Defined Benefit Plans Adjustment, Net Prior Service Attributable to Parent [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Pre-Tax Amount | $ (0.4) | $ (0.6) |
Tax Benefit/ (Expense) | 0.1 | 0.2 |
After-Tax Amount | (0.3) | (0.4) |
Defined Benefit Pension and Other Postretirement Plans | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Pre-Tax Amount | 0.1 | 0.1 |
Tax Benefit/ (Expense) | 0 | 0 |
After-Tax Amount | 0.1 | 0.1 |
Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Pre-Tax Amount | (0.3) | (0.5) |
Tax Benefit/ (Expense) | 0.1 | 0.2 |
After-Tax Amount | (0.2) | (0.3) |
Currency Translation Adjustments | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Pre-Tax Amount | (20.8) | (1.4) |
Tax Benefit/ (Expense) | 2.6 | 0 |
After-Tax Amount | (18.2) | (1.4) |
Gain (Loss) from Hedging Activities | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Pre-Tax Amount | 2.2 | 0.9 |
Tax Benefit/ (Expense) | (0.4) | (0.2) |
After-Tax Amount | 1.8 | 0.7 |
AOCI Attributable to Parent | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Pre-Tax Amount | (18.9) | (1) |
Tax Benefit/ (Expense) | 2.3 | 0 |
After-Tax Amount | $ (16.6) | $ (1) |
Other Comprehensive Loss - AOCI
Other Comprehensive Loss - AOCI (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | $ 263.3 | $ 372.4 |
Total other comprehensive income (loss) | (16.6) | (1) |
Ending balance | 245.9 | 395.7 |
Defined Benefit Pension and Other Postretirement Plans | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | 0.9 | 2.2 |
Other comprehensive income (loss) before reclassifications | 0 | 0 |
Amounts reclassified from accumulated other comprehensive income (loss) | (0.2) | (0.3) |
Total other comprehensive income (loss) | (0.2) | (0.3) |
Ending balance | 0.7 | 1.9 |
Currency Translation Adjustments | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | 41.6 | 67.6 |
Other comprehensive income (loss) before reclassifications | (18.2) | (1.4) |
Amounts reclassified from accumulated other comprehensive income (loss) | 0 | 0 |
Total other comprehensive income (loss) | (18.2) | (1.4) |
Ending balance | 23.4 | 66.2 |
Gain (Loss) from Hedging Activities | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | (2.6) | (3.4) |
Other comprehensive income (loss) before reclassifications | (5.4) | 0 |
Amounts reclassified from accumulated other comprehensive income (loss) | 7.2 | 0.7 |
Total other comprehensive income (loss) | 1.8 | 0.7 |
Ending balance | (0.8) | (2.7) |
AOCI Attributable to Parent | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | 39.9 | 66.4 |
Other comprehensive income (loss) before reclassifications | (23.6) | (1.4) |
Amounts reclassified from accumulated other comprehensive income (loss) | 7 | 0.4 |
Total other comprehensive income (loss) | (16.6) | (1) |
Ending balance | $ 23.3 | $ 65.4 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Feb. 08, 2017 | Feb. 05, 2015 | |
Numerators | ||||
Net income (loss) attributable to W. R. Grace & Co. shareholders | $ 43,600,000 | $ 42,900,000 | ||
Denominators | ||||
Weighted average common shares—basic calculation (in shares) | 67,600,000 | 68,300,000 | ||
Dilutive effect of employee stock options (in shares) | 100,000 | 200,000 | ||
Weighted average common shares—diluted calculation (in shares) | 67,700,000 | 68,500,000 | ||
Basic earnings per share attributable to W. R. Grace & Co. shareholders | ||||
Basic earnings per share | $ 0.64 | $ 0.63 | ||
Diluted earnings per share attributable to W. R. Grace & Co. shareholders | ||||
Diluted earnings per share | $ 0.64 | $ 0.63 | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive options outstanding | 1,700,000 | 1,400,000 | ||
Stock Repurchase Program, Authorized Amount | $ 250,000,000 | $ 500,000,000 | ||
Stock repurchased during period (in shares) | 514,141 | 142,371 | ||
Cash paid for repurchases of common stock | $ 35,000,000 | $ 10,000,000 | ||
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ 183,900,000 | |||
Minimum [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Stock Repurchase Program, Period in Force | 24 months | |||
Maximum [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Stock Repurchase Program, Period in Force | 36 months |
Operating Segment Information -
Operating Segment Information - Reportable Segment Data (Details) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018USD ($)segment | Mar. 31, 2017USD ($) | ||
Operating segment information | |||
Number of Reportable Segments | segment | 2 | ||
Net Sales | |||
Net sales | $ 431.5 | $ 398 | |
Adjusted EBIT | |||
Total | 95.8 | 86.8 | |
Reconciliation of operating segment data to financial statements | |||
(Costs) benefit related to legacy product, environmental and other claims | 1.5 | 2.1 | |
Restructuring and repositioning expenses | 5.6 | 2.3 | |
Pension MTM adjustment and other related costs, net | 0 | 1.9 | |
Income and expense items related to divested businesses | 0.5 | 0.3 | |
Third-party acquisition-related costs | 0.9 | 0 | |
Interest expense, net | (18.9) | (19.3) | |
Net income (loss) attributable to noncontrolling interests | 0.2 | 0 | |
Income (loss) before income taxes | $ 68.2 | 60.9 | |
Grace Catalysts Technologies [Member] | |||
Operating segment information | |||
Number of Reportable Segments | segment | 1 | ||
Number of operating segments | segment | 2 | ||
Net Sales | |||
Net sales | $ 315.8 | 293.8 | |
Adjusted EBIT | |||
Operating income | 92.1 | 81.2 | |
Grace Materials Technologies [Member] | |||
Net Sales | |||
Net sales | 115.7 | 104.2 | [1] |
Adjusted EBIT | |||
Operating income | 24.1 | 24.8 | |
Corporate, Non-Segment [Member] | |||
Adjusted EBIT | |||
Operating income | (16.6) | (16.1) | |
Certain pension costs | $ (3.8) | $ (3.1) | |
[1] | (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. |
Operating Segment Information64
Operating Segment Information - Geographic Area Data (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Geographic Area Data | ||
Net sales | $ 431.5 | $ 398 |
United States | ||
Geographic Area Data | ||
Net sales | 112.4 | 103.7 |
CANADA | ||
Geographic Area Data | ||
Net sales | 13.6 | 12 |
Total North America | ||
Geographic Area Data | ||
Net sales | 126 | 115.7 |
Europe Middle East Africa | ||
Geographic Area Data | ||
Net sales | 178.7 | 148.7 |
Asia Pacific | ||
Geographic Area Data | ||
Net sales | 100.2 | 99.9 |
Latin America | ||
Geographic Area Data | ||
Net sales | $ 26.6 | $ 33.7 |
Unconsolidated Affiliate (Detai
Unconsolidated Affiliate (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Equity Method Investments and Joint Ventures [Abstract] | |||
Equity method investment ownership interest (percent) | 50.00% | ||
Investment in unconsolidated affiliate | $ 132,200,000 | $ 125,900,000 | |
Equity in earnings of unconsolidated affiliate | 5,400,000 | $ 7,000,000 | |
ART's assets, liabilities and results of operations | |||
Current assets | 241,900,000 | 239,800,000 | |
Noncurrent assets | 100,900,000 | 91,500,000 | |
Total assets | 342,800,000 | 331,300,000 | |
Current liabilities | 81,500,000 | 82,400,000 | |
Noncurrent liabilities | 300,000 | 300,000 | |
Total liabilities | 81,800,000 | 82,700,000 | |
Net sales | 85,200,000 | 97,400,000 | |
Costs and expenses applicable to net sales | 70,700,000 | 78,900,000 | |
Income before income taxes | 11,300,000 | 14,200,000 | |
Net income | 11,500,000 | 14,000,000 | |
Related Party Transactions [Abstract] | |||
Product manufactured for ART | 51,900,000 | 51,400,000 | |
Mark-up on product manufactured for ART included as a reduction of Grace’s cost of goods sold | 1,000,000 | 1,000,000 | |
Charges for fixed costs; research and development; selling, general and administrative services; and depreciation to ART | 10,700,000 | $ 10,400,000 | |
Investment in unconsolidated affiliates | |||
Accounts receivable | 19,700,000 | 20,100,000 | |
Noncurrent asset | 38,500,000 | 32,700,000 | |
Accounts payable | 27,900,000 | 22,300,000 | |
Debt payable within one year | 8,900,000 | 8,600,000 | |
Debt payable after one year | 36,700,000 | 33,800,000 | |
Liability to unconsolidated affiliate | 38,500,000 | 32,700,000 | |
Grace | |||
Investment in unconsolidated affiliates | |||
Line of credit facility, maximum provided by Grace and Chevron each | $ 15,000,000 | ||
Commitment fee on credit facility (as a percent) | 0.10% | ||
Credit facility amount outstanding | $ 0 | $ 0 | |
Chevron | |||
Investment in unconsolidated affiliates | |||
Line of credit facility, maximum provided by Grace and Chevron each | $ 15,000,000 | ||
Commitment fee on credit facility (as a percent) | 0.10% |
Acquisitions (Details)
Acquisitions (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Business Acquisition [Line Items] | ||
Goodwill | $ 405.2 | $ 402.4 |
Revenues Disaggregation of Reve
Revenues Disaggregation of Revenue (Details) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018USD ($)segment | Mar. 31, 2017USD ($) | ||
Disaggregation of Revenue [Line Items] | |||
Net sales | $ 431.5 | $ 398 | |
Number of Reportable Segments | segment | 2 | ||
Total North America | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | $ 126 | 115.7 | |
Europe Middle East Africa | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 178.7 | 148.7 | |
Asia Pacific | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 100.2 | 99.9 | |
Latin America | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 26.6 | 33.7 | |
Grace Catalysts Technologies [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | $ 315.8 | 293.8 | |
Number of Reportable Segments | segment | 1 | ||
Grace Catalysts Technologies [Member] | Total North America | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | $ 102.1 | 89.4 | |
Grace Catalysts Technologies [Member] | Europe Middle East Africa | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 119.7 | 98.3 | |
Grace Catalysts Technologies [Member] | Asia Pacific | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 76.8 | 80.3 | |
Grace Catalysts Technologies [Member] | Latin America | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 17.2 | 25.8 | |
Grace Catalysts Technologies [Member] | Refining Catalysts [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 183.4 | 178.4 | |
Grace Catalysts Technologies [Member] | Refining Catalysts [Member] | Total North America | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 69.9 | 61.8 | |
Grace Catalysts Technologies [Member] | Refining Catalysts [Member] | Europe Middle East Africa | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 61.3 | 54.1 | |
Grace Catalysts Technologies [Member] | Refining Catalysts [Member] | Asia Pacific | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 38.8 | 41.7 | |
Grace Catalysts Technologies [Member] | Refining Catalysts [Member] | Latin America | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 13.4 | 20.8 | |
Grace Catalysts Technologies [Member] | Polyolefin and Chemical Catalysts [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 132.4 | 115.4 | |
Grace Catalysts Technologies [Member] | Polyolefin and Chemical Catalysts [Member] | Total North America | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 32.2 | 27.6 | |
Grace Catalysts Technologies [Member] | Polyolefin and Chemical Catalysts [Member] | Europe Middle East Africa | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 58.4 | 44.2 | |
Grace Catalysts Technologies [Member] | Polyolefin and Chemical Catalysts [Member] | Asia Pacific | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 38 | 38.6 | |
Grace Catalysts Technologies [Member] | Polyolefin and Chemical Catalysts [Member] | Latin America | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 3.8 | 5 | |
Grace Materials Technologies [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 115.7 | 104.2 | [1] |
Grace Materials Technologies [Member] | Total North America | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 23.9 | 26.3 | [1] |
Grace Materials Technologies [Member] | Europe Middle East Africa | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 59 | 50.4 | [1] |
Grace Materials Technologies [Member] | Asia Pacific | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 23.4 | 19.6 | [1] |
Grace Materials Technologies [Member] | Latin America | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 9.4 | 7.9 | [1] |
Grace Materials Technologies [Member] | Coatings [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 41.7 | 35.1 | |
Grace Materials Technologies [Member] | Coatings [Member] | Total North America | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 7.1 | 7 | |
Grace Materials Technologies [Member] | Coatings [Member] | Europe Middle East Africa | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 20.5 | 16.6 | |
Grace Materials Technologies [Member] | Coatings [Member] | Asia Pacific | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 11.8 | 9.5 | |
Grace Materials Technologies [Member] | Coatings [Member] | Latin America | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 2.3 | 2 | |
Grace Materials Technologies [Member] | Consumer/Pharma [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 29.9 | 30.5 | |
Grace Materials Technologies [Member] | Consumer/Pharma [Member] | Total North America | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 7.7 | 10.3 | |
Grace Materials Technologies [Member] | Consumer/Pharma [Member] | Europe Middle East Africa | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 13.2 | 12.2 | |
Grace Materials Technologies [Member] | Consumer/Pharma [Member] | Asia Pacific | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 4.3 | 3.2 | |
Grace Materials Technologies [Member] | Consumer/Pharma [Member] | Latin America | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 4.7 | 4.8 | |
Grace Materials Technologies [Member] | Chemical process [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 37.7 | 33.9 | |
Grace Materials Technologies [Member] | Chemical process [Member] | Total North America | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 7.4 | 7.4 | |
Grace Materials Technologies [Member] | Chemical process [Member] | Europe Middle East Africa | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 20.8 | 18.6 | |
Grace Materials Technologies [Member] | Chemical process [Member] | Asia Pacific | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 7.2 | 6.8 | |
Grace Materials Technologies [Member] | Chemical process [Member] | Latin America | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 2.3 | 1.1 | |
Grace Materials Technologies [Member] | Other materials [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 6.4 | 4.7 | |
Grace Materials Technologies [Member] | Other materials [Member] | Total North America | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 1.7 | 1.6 | |
Grace Materials Technologies [Member] | Other materials [Member] | Europe Middle East Africa | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 4.5 | 3 | |
Grace Materials Technologies [Member] | Other materials [Member] | Asia Pacific | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 0.1 | 0.1 | |
Grace Materials Technologies [Member] | Other materials [Member] | Latin America | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | $ 0.1 | $ 0 | |
[1] | (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. |
Revenues Contract with Customer
Revenues Contract with Customers (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | |
Deferred Revenue Arrangement [Line Items] | |||
Current | $ 29.6 | $ 19.5 | |
Noncurrent | 17.1 | 14.9 | |
Total | 46.7 | 34.4 | |
Contract with Customer, Liability, Revenue Recognized | 6.3 | ||
Retained earnings | $ 603.7 | $ 573.1 | |
Contract with Customer, Expected Timing of Satisfaction, Period | 4 years | ||
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | |||
Deferred Revenue Arrangement [Line Items] | |||
Retained earnings | $ 3.3 | $ 3.2 |
Revenues Remaining Performance
Revenues Remaining Performance Obligations (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation | $ 103 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue Remaining Performance Obligation Expected Timing of Satisfaction, Remaining of Fiscal Year | 21.00% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue Remaining Performance Obligation Expected Timing of Satisfaction, in Year Two | 28.00% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue Remaining Performance Obligation Expected Timing of Satisfaction, in Year Three | 20.00% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue Remaining Performance Obligation Expected Timing of Satisfaction, After Year Three | 31.00% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: (nil) | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue Remaining Performance Obligation Expected Timing of Satisfaction, Total Percentage | 100.00% |
Subsequent Events (Details)
Subsequent Events (Details) € in Millions | 3 Months Ended | ||||
Jun. 30, 2018USD ($) | Mar. 31, 2018EUR (€) | Apr. 03, 2018EUR (€) | Apr. 03, 2018USD ($) | Mar. 31, 2018USD ($) | |
Subsequent Event [Line Items] | |||||
Subsequent Event, Date | Apr. 3, 2018 | ||||
Subsequent Event [Member] | |||||
Subsequent Event [Line Items] | |||||
Defined Benefit Plan, Plan Assets, Contributions by Employer | $ 50,000,000 | ||||
Loss on early extinguishment of debt | (5,000,000) | ||||
Business acquired | $ 421,000,000 | ||||
2025 Term Loan [Member] | Subsequent Event [Member] | |||||
Subsequent Event [Line Items] | |||||
Senior Notes | $ 950,000,000 | ||||
Debt instrument, Periodic Payment, Interest Rate | 1.00% | 1.00% | |||
Debt Instrument, Basis Spread on Variable Rate | 1.75% | ||||
2023 Revolving Credit Facility [Member] | Subsequent Event [Member] | |||||
Subsequent Event [Line Items] | |||||
Senior Notes | $ 400,000,000 | ||||
Debt Instrument, Basis Spread on Variable Rate | 1.75% | ||||
Interest rate swap | |||||
Subsequent Event [Line Items] | |||||
Derivative, Notional Amount | $ 250,000,000 | ||||
Fixed interest rate | 2.393% | 2.393% | |||
Interest rate swap | Subsequent Event [Member] | |||||
Subsequent Event [Line Items] | |||||
Derivative, Notional Amount | $ 100,000,000 | ||||
Fixed interest rate | 2.775% | 2.775% | |||
Currency Swap [Member] | |||||
Subsequent Event [Line Items] | |||||
Derivative, Notional Amount | € | € 170 | ||||
Currency Swap [Member] | Subsequent Event [Member] | |||||
Subsequent Event [Line Items] | |||||
Derivative, Notional Amount | € | € 490 | ||||
Fixed interest rate | 2.0231% | 2.0231% | |||
Currency Swap [Member] | Term Loan B (USD) | Subsequent Event [Member] | |||||
Subsequent Event [Line Items] | |||||
Senior Secured Credit Facilities to Fund Emergence | $ 600,000,000 |
Uncategorized Items - gra-20180
Label | Element | Value |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 3,200,000 |