Grace Reports First Quarter 2013 Adjusted EPS of $0.81

  Grace Reports First Quarter 2013 Adjusted EPS of $0.81

Business Wire

COLUMBIA, Md. -- April 24, 2013

W. R. Grace & Co. (NYSE: GRA) announced first quarter net income of
$52.9million, or $0.69 per diluted share. Net income for the prior-year
quarter was $60.9 million, or $0.80 per diluted share. Adjusted EPS was $0.81
per diluted share compared with $0.88 per diluted share in the prior-year
quarter.

“Sales and earnings were below our expectations,” said Fred Festa, Grace's
Chairman and Chief Executive Officer. “Customer operational issues and delayed
orders in Catalysts Technologies led to weaker results than we expected. While
the economic environment is more challenging than we planned, our productivity
focus and operating flexibility enabled us to maintain our operating margin
and deliver strong year-over-year earnings growth in Materials Technologies
and Construction Products."

First Quarter Results

First quarter net sales of $709.9 million decreased 5.9 percent compared with
the prior-year quarter. The decrease was due to lower pricing (-5.0 percent)
and unfavorable currency translation (-0.9 percent), as sales volumes were
unchanged.

Gross profit of $263.8 million decreased 4.8 percent compared with the
prior-year quarter primarily due to lower sales. Gross margin increased 50
basis points to 37.2 percent compared with the prior-year quarter.

Adjusted EBIT of $104.9 million decreased 5.8 percent compared with $111.3
million in the prior-year quarter. The decrease primarily was due to lower
sales, which offset lower manufacturing costs and reduced operating expenses.
Adjusted EBIT margin of 14.8 percent was unchanged from the prior-year
quarter.

The Venezuelan government changed the official exchange rate of the bolivar to
the U.S. dollar from 4.3 to 6.3 during the first quarter. As a result, Grace
recorded a currency transaction loss of $8.5 million, of which $1.6 million is
included in Adjusted EBIT.

Adjusted EBIT Return On Invested Capital was 34.8 percent on a trailing
four-quarter basis, a decrease of 10 basis points from the prior-year quarter.

Grace Catalysts Technologies

Sales down 14.7 percent; segment operating income down 21.9 percent

First quarter sales for the Catalysts Technologies operating segment, which
includes specialty catalysts and additives for refinery, plastics and other
chemical process applications, were $266.5 million, a decrease of 14.7 percent
compared with the prior-year quarter. The decrease primarily was due to lower
pricing (-14.1 percent), lower sales volumes (-0.4 percent) and unfavorable
currency translation (-0.2 percent). The decrease in pricing was predominantly
attributable to lower rare earth surcharges.

Segment gross margin was 40.3 percent compared with 42.0 percent in the
prior-year quarter. The decrease in gross margin primarily was due to lower
sales and the effect of lower rare earth unit costs and volumes on capitalized
inventory values.

Segment operating income was $77.2 million compared with $98.9 million in the
prior-year quarter, a 21.9 percent decrease primarily due to lower sales and
gross margin. Income was down more than $15 million from plan. Approximately
$7 million in lower earnings were attributable to the loss of sales at four
large customers due to their operational issues or inventory reductions.
Approximately $5 million in lower earnings were due to a delay of expected
sales at five large customers, primarily at the company's ART joint venture.

Grace Materials Technologies

Sales up 0.5 percent; segment operating income up 22.7 percent

First quarter sales for the Materials Technologies operating segment, which
includes engineered materials for consumer, industrial, coatings and
pharmaceutical applications and packaging technologies, were $214.9 million,
an increase of 0.5 percent compared with the prior-year quarter. The increase
was due to improved pricing (+1.8 percent), which offset unfavorable currency
translation (-1.2 percent) and lower sales volumes (-0.1 percent).

Engineered materials sales volumes and prices grew 4 percent due to higher
sales and improved product mix in Asia and higher sales in North America.
Packaging sales volumes and prices increased 1 percent with growth in Asia
largely offset by weaker sales in Western Europe.

Sales in emerging regions, which represented 41 percent of sales, increased 8
percent. Sales in Western Europe, which represented 32 percent of sales,
decreased 4 percent.

Segment gross margin was 35.1 percent, an increase of 330 basis points
compared with the prior-year quarter. The increase in gross margin primarily
reflected lower manufacturing costs and improved pricing.

Segment operating income was $44.3 million compared with $36.1 million in the
prior-year quarter, a 22.7 percent increase primarily due to higher gross
margin. Segment operating margin was 20.6 percent, an increase of 370 basis
points compared with the prior-year quarter.

Grace Construction Products

Sales up 0.1 percent; segment operating income up 11.2 percent

First quarter sales for the Construction Products operating segment, which
includes Specialty Construction Chemicals (SCC) products and Specialty
Building Materials (SBM) products used in commercial, infrastructure and
residential construction, were $228.5 million compared with $228.3 million in
the prior-year quarter. The sales increase was due to improved pricing (+1.2
percent) and higher sales volumes (+0.5 percent), which more than offset
unfavorable currency translation (-1.6 percent). Last year's third quarter
acquisition of Rheoset Industria contributed $7.0 million to sales.

Sales in the emerging regions, which represented 37 percent of sales,
increased 12 percent primarily due to strong sales performance of SCC products
in Latin America. Sales in North America, which represented approximately 40
percent of sales, decreased 2 percent as weaker sales of SBM products offset 4
percent growth of SCC products. Western Europe, which represented
approximately 14 percent of sales, declined 14 percent compared with the
prior-year quarter.

Segment gross margin of 35.5 percent improved 130 basis points compared with
the prior-year quarter. The increase in gross margin primarily was due to
improved pricing and lower operating costs.

Segment operating income was $22.8 million compared with $20.5 million for the
prior-year quarter, an 11.2 percent increase primarily due to improved gross
margin and lower expenses. Segment operating margin improved to 10.0 percent
compared with 9.0 percent in the prior-year quarter.

Other Expenses

Total corporate expenses were $20.8 million for the first quarter, a decrease
of 18.1% compared with the prior-year quarter, largely due to restructuring
and other cost reduction actions in the prior year.

Defined benefit pension expense for the first quarter was $18.6 million
compared with $18.8 million for the prior-year quarter. In March 2013, the
company made an accelerated contribution of $50 million to its U.S. defined
benefit pension plans.

Interest expense was $10.5 million for the first quarter compared with $11.3
million for the prior-year quarter. The annualized weighted average interest
rate on pre-petition obligations for the first quarter was 3.5 percent.

Income Taxes

Income taxes were recorded at a global effective tax rate of approximately 34
percent before considering the effects of certain non-deductible Chapter 11
expenses, changes in uncertain tax positions and other discrete adjustments.

Grace generally has not had to pay U.S. Federal income taxes in cash in recent
years since available tax deductions and credits have fully offset U.S.
taxable income. Income taxes in foreign jurisdictions are generally paid in
cash. Grace expects to generate significant U.S. Federal net operating losses
upon emergence from bankruptcy. Income taxes paid in cash, net of refunds,
were $11.6 million during the first quarter, or approximately 14 percent of
income before income taxes.

Cash Flow

Net cash provided by operating activities in the first quarter was $51.1
million compared with net cash used for operating activities of $18.4 million
in the prior-year quarter. The increase in cash flow resulted from lower
pension payments and improvements in net working capital.

Adjusted Free Cash Flow was $66.4 million for the first quarter compared with
$32.5 million in the prior-year period. The year-over-year increase primarily
was due to improvements in net working capital.

2013 Outlook

As of April 24, 2013, Grace expects 2013 Adjusted EBIT to be in the range of
$540 million to $560 million, an increase of 4 to 8 percent compared with 2012
Adjusted EBIT of $517.4 million. The company expects 2013 Adjusted EBITDA to
be in the range of $665 million to $685 million.

Chapter 11 Proceedings

On April 2, 2001, Grace and 61 of its United States subsidiaries and
affiliates, including its primary U.S. operating subsidiary, W. R. Grace &
Co.-Conn., filed voluntary petitions for reorganization under Chapter 11 of
the United States Bankruptcy Code in the United States Bankruptcy Court for
the District of Delaware in order to resolve Grace's asbestos-related
liabilities.

On January 31, 2011, the Bankruptcy Court issued an order confirming Grace's
Joint Plan. On January 31, 2012, the United States District Court issued an
order affirming the Joint Plan, which was reaffirmed on June 11, 2012,
following a motion for reconsideration. Five parties have appeals pending
before the U.S. Court of Appeals for the Third Circuit. Oral arguments are
scheduled to be heard by a Third Circuit panel of judges on June 17, 2013.

The timing of Grace's emergence from Chapter 11 will depend on a favorable
ruling by the Third Circuit court and the satisfaction or waiver of the
remaining conditions set forth in the Joint Plan. The Joint Plan sets forth
how all pre-petition claims and demands against Grace will be resolved. See
Grace's most recent periodic reports filed with the SEC for a detailed
description of the Joint Plan.

Investor Call

Grace will discuss these results during an investor conference call and
webcast today starting at 11:00 a.m. ET. To access the call and webcast,
interested participants should go to the Investor Information - Investor
Presentations portion of the company's web site, www.grace.com, and click on
the webcast link.

Those without access to the Internet can listen to the investor call by
dialing +1.877.299.4454 (U.S.) or +1.617.597.5447 (International) and entering
participant passcode 60991616. Investors are advised to access the call at
least ten minutes early in order to register.

An audio replay will be available at 1:00 p.m. ET on April 24. The replay will
be accessible by dialing +1.888.286.8010 (U.S.) or +1.617.801.6888
(International) and entering the participant passcode 29840878. The replay
will be available for one week.

About Grace

Grace is a leading global supplier of catalysts; engineered and packaging
materials; and, specialty construction chemicals and building materials. The
company's three industry-leading business segments-Grace Catalysts
Technologies, Grace Materials Technologies and Grace Construction
Products-provide innovative products, technologies and services that enhance
the quality of life. Grace employs approximately 6,500 people in over 40
countries and had 2012 net sales of $3.2 billion. More information about Grace
is available at www.grace.com.

This announcement contains forward-looking statements, that is, information
related to future, not past, events. Such statements generally include the
words “believes,” “plans,” “intends,” “targets,” “will,” “expects,”
“suggests,” “anticipates,” “outlook,” “continues” or similar expressions.
Forward-looking statements include, without limitation, all statements
regarding Grace's Chapter 11 case; expected financial positions; results of
operations; cash flows; financing plans; business strategy; budgets; capital
and other expenditures; competitive positions; growth opportunities for
existing products; benefits from new technology and cost reduction
initiatives, plans and objectives; and markets for securities. For these
statements, Grace claims the protection of the safe harbor for forward-looking
statements contained in the Private Securities Litigation Reform Act of 1995.
Like other businesses, Grace is subject to risks and uncertainties that could
cause its actual results to differ materially from its projections or that
could cause other forward-looking statements to prove incorrect. Factors that
could cause actual results to materially differ from those contained in the
forward-looking statements include, without limitation: developments affecting
Grace's bankruptcy, propose plan of reorganization and settlements with
certain creditors, the cost and availability of raw materials (including rare
earth) and energy, developments affecting Grace's underfunded and unfunded
pension obligations, risks related to foreign operations, especially in
emerging region, acquisitions and divestitures of assets and gains and losses
from dispositions or impairments, the effectiveness of its research and
development and growth investments, its legal and environmental proceedings,
costs of compliance with environmental regulation and those factors set forth
in Grace's most recent Annual Report on Form 10-K, quarterly report on Form
10-Q and current reports on Form 8-K, which have been filed with the
Securities and Exchange Commission and are readily available on the Internet
at www.sec.gov. Reported results should not be considered as an indication of
future performance. Readers are cautioned not to place undue reliance on
Grace's projections and forward-looking statements, which speak only as the
date thereof. Grace undertakes no obligation to publicly release any revision
to the projections and forward-looking statements contained in this
announcement, or to update them to reflect events or circumstances occurring
after the date of this announcement.

                                                       
W. R. Grace & Co. and Subsidiaries
Consolidated Statements of Operations (unaudited)
                                                         
                                                         Three Months Ended
                                                         March 31,
(In millions, except per share amounts)                  2013       2012
Net sales                                                $ 709.9     $ 754.4
Cost of goods sold                                       446.1      477.3   
Gross profit                                             263.8       277.1
Selling, general and administrative expenses             128.9       136.6
Restructuring expenses and related asset impairments     0.8         3.0
Research and development expenses                        16.9        16.5
Defined benefit pension expense                          18.6        18.8
Interest expense and related financing costs             10.5        11.3
Provision for environmental remediation                  1.0         0.6
Chapter 11 expenses, net of interest income              4.8         4.5
Equity in earnings of unconsolidated affiliate           (5.1    )   (5.7    )
Other (income) expense, net                              6.1        (0.6    )
Total costs and expenses                                 182.5      185.0   
Income before income taxes                               81.3        92.1
Provision for income taxes                               (28.1   )   (30.8   )
Net income                                               53.2        61.3
Less: Net income attributable to noncontrolling          (0.3    )   (0.4    )
interests
Net income attributable to W. R. Grace & Co.             $ 52.9     $ 60.9  
shareholders
Earnings Per Share Attributable to W. R. Grace & Co.
Shareholders
Basic earnings per share:
Net income attributable to W. R. Grace & Co.             $ 0.70      $ 0.82
shareholders
Weighted average number of basic shares                  75.7        74.3
Diluted earnings per share:
Net income attributable to W. R. Grace & Co.             $ 0.69      $ 0.80
shareholders
Weighted average number of diluted shares                77.2        76.4
                                                                             

 The Notes to the Financial Information are included as part of the Earnings
                                   Release.

                                            
W. R. Grace & Co. and Subsidiaries
Analysis of Operations (unaudited)
                                                                            
                                              Three Months Ended
                                              March 31,
(In millions, except per share amounts)       2013       2012       % Change
Net sales:
Catalysts Technologies                        $ 266.5     $ 312.3     (14.7 )%
Materials Technologies                        214.9       213.8       0.5   %
Construction Products                         228.5      228.3      0.1   %
Total Grace net sales                         $ 709.9    $ 754.4    (5.9  )%
Net sales by region:
North America                                 $ 226.7     $ 223.6     1.4   %
Europe Middle East Africa                     254.4       293.1       (13.2 )%
Asia Pacific                                  150.6       162.4       (7.3  )%
Latin America                                 78.2       75.3       3.9   %
Total net sales by region                     $ 709.9    $ 754.4    (5.9  )%
Profitability performance measures:
Adjusted EBIT(A)(B)(C):
Catalysts Technologies segment operating      $ 77.2      $ 98.9      (21.9 )%
income
Materials Technologies segment operating      44.3        36.1        22.7  %
income
Construction Products segment operating       22.8        20.5        11.2  %
income
Corporate support functions                   (16.2   )   (19.7   )   17.8  %
Other corporate costs (including              (4.6    )   (5.7    )   19.3  %
non-asbestos environmental remediation)
Defined benefit pension expense(C)            (18.6   )   (18.8   )   1.1   %
Adjusted EBIT                                 104.9       111.3       (5.8  )%
Costs related to Chapter 11                   (3.8    )   (4.0    )   5.0   %
Asbestos-related costs                        (2.1    )   (1.2    )   (75.0 )%
Restructuring expenses and related asset      (0.8    )   (3.0    )   73.3  %
impairments
Certain costs related to divested             —           (0.2    )   100.0 %
businesses
Interest expense and related financing        (10.5   )   (11.3   )   7.1   %
costs
Currency transaction loss on cash in          (6.9    )   —           NM
Venezuela
Interest income of non-Debtor subsidiaries    0.2         0.1         100.0 %
Provision for income taxes                    (28.1   )   (30.8   )   8.8   %
Net income attributable to W. R. Grace &      $ 52.9     $ 60.9     (13.1 )%
Co. shareholders
Diluted EPS (GAAP)                            $ 0.69     $ 0.80     (13.8 )%
Adjusted EPS (non-GAAP)                       $ 0.81     $ 0.88     (8.0  )%
                                                                      
Costs related to Chapter 11:
Chapter 11 expenses, net of interest income   $ 4.8       $ 4.5       6.7   %
D&O insurance costs related to Chapter 11     0.1         0.1         —     %
Translation effects—intercompany loans (D)    7.4         (9.6    )   NM
Value of currency forward                     (7.7    )   8.1         NM
contracts—intercompany loans (D)
Certain other currency translation costs,     (0.8    )   0.9        NM
net (D)
Costs related to Chapter 11                   $ 3.8      $ 4.0      (5.0  )%
                                                                            

 The Notes to the Financial Information are included as part of the Earnings
                                   Release.

                                            
W. R. Grace & Co. and Subsidiaries
Analysis of Operations (unaudited) (continued)
                                                                            
                                              Three Months Ended
                                              March 31,
(In millions)                                 2013      2012       % Change
Profitability performance measures
(A)(B)(C):
Gross margin:
Catalysts Technologies                        40.3   %   42.0    %   (1.7) pts
Materials Technologies                        35.1   %   31.8    %   3.3 pts
Construction Products                         35.5   %   34.2    %   1.3 pts
Total Grace                                   37.2   %   36.7    %   0.5 pts
Operating margin:
Catalysts Technologies                        29.0   %   31.7    %   (2.7) pts
Materials Technologies                        20.6   %   16.9    %   3.7 pts
Construction Products                         10.0   %   9.0     %   1.0 pts
Total Grace                                   14.8   %   14.8    %   0.0 pts
Adjusted EBITDA:
Adjusted EBIT:
Catalysts Technologies                        $ 77.2     $ 98.9      (21.9  )%
Materials Technologies                        44.3       36.1        22.7   %
Construction Products                         22.8       20.5        11.2   %
Corporate                                     (39.4  )   (44.2   )   10.9   %
Total Grace                                   104.9      111.3       (5.8   )%
Depreciation and amortization:
Catalysts Technologies                        $ 13.5     $ 13.6      (0.7   )%
Materials Technologies                        8.0        7.4         8.1    %
Construction Products                         8.2        7.5         9.3    %
Corporate                                     1.4        0.9         55.6   %
Total Grace                                   31.1       29.4        5.8    %
Adjusted EBITDA:
Catalysts Technologies                        $ 90.7     $ 112.5     (19.4  )%
Materials Technologies                        52.3       43.5        20.2   %
Construction Products                         31.0       28.0        10.7   %
Corporate                                     (38.0  )   (43.3   )   12.2   %
Total Grace                                   136.0      140.7       (3.3   )%
Adjusted EBITDA margin:
Catalysts Technologies                        34.0   %   36.0    %   (2.0) pts
Materials Technologies                        24.3   %   20.3    %   4.0 pts
Construction Products                         13.6   %   12.3    %   1.3 pts
Total Grace                                   19.2   %   18.7    %   0.5 pts
                                                                     

 The Notes to the Financial Information are included as part of the Earnings
                                   Release.

                                               
W. R. Grace & Co. and Subsidiaries
Analysis of Operations (unaudited) (continued)
                                                 
                                                 Three Months Ended
                                                 March 31,
(In millions)                                    2013         2012
Cash flow measure (A):
Net cash provided by (used for) operating        $ 51.1        $ (18.4    )
activities
Capital expenditures                             (39.3     )   (38.3      )
Free Cash Flow                                   11.8          (56.7      )
Chapter 11 expenses paid                         3.2           3.2
Accelerated defined benefit pension plan         50.0          83.4
contributions
Expenditures for asbestos-related                1.4          2.6        
environmental remediation
Adjusted Free Cash Flow                          $ 66.4       $ 32.5     
                                                 
                                                 
                                                 
                                                 Four Quarters Ended
                                                 March 31,
(In millions)                                    2013            2012
Calculation of Adjusted EBIT Return On
Invested Capital (trailing four quarters):
Adjusted EBIT                                    $ 511.0         $   494.2
Invested Capital:
Trade accounts receivable                        443.4           471.7
Inventories                                      317.8           358.5
Accounts payable                                 (286.2    )     (263.6      )
                                                 475.0           566.6
Other current assets (excluding income taxes)    77.9            71.8
Properties and equipment, net                    762.5           726.8
Goodwill                                         194.3           150.4
Investment in unconsolidated affiliate           90.5            76.4
Other assets                                     108.8           99.6
Other current liabilities (excluding income      (186.4    )     (218.5      )
taxes, Chapter 11, and restructuring)
Other liabilities (including non-asbestos        (55.9     )     (57.5       )
environmental remediation)
Total invested capital                           $ 1,466.7      $   1,415.6 
Adjusted EBIT Return On Invested Capital         34.8      %     34.9        %
                                                                             

 The Notes to the Financial Information are included as part of the Earnings
                                   Release.

                                                   
W. R. Grace & Co. and Subsidiaries
Consolidated Statements of Cash Flows (unaudited)
                                                     
                                                     Three Months Ended
                                                     March 31,
(In millions)                                        2013         2012
OPERATING ACTIVITIES
Net income                                           $ 53.2        $ 61.3
Reconciliation to net cash provided by (used for)
operating activities:
Depreciation and amortization                        31.1          29.4
Equity in earnings of unconsolidated affiliate       (5.1      )   (5.7      )
Dividends received from unconsolidated affiliate     2.8           5.2
Chapter 11 expenses, net of interest income          4.8           4.5
Chapter 11 expenses paid                             (3.2      )   (3.2      )
Provision for income taxes                           28.1          30.8
Income taxes paid, net of refunds                    (11.6     )   (8.0      )
Interest accrued on pre-petition liabilities         9.0           9.9
subject to compromise
Restructuring expenses and related asset             0.8           3.0
impairments
Payments for restructuring expenses and related      (1.2      )   (2.2      )
asset impairments
Defined benefit pension expense                      18.6          18.8
Payments under defined benefit pension               (53.9     )   (113.7    )
arrangements
Provision for environmental remediation              1.0           0.6
Expenditures for environmental remediation           (2.6      )   (4.4      )
Changes in assets and liabilities, excluding
effect of currency translation:
Trade accounts receivable                            39.6          11.1
Inventories                                          (42.8     )   (26.1     )
Accounts payable                                     49.3          12.1
All other items, net                                 (66.8     )   (41.8     )
Net cash provided by (used for) operating            51.1         (18.4     )
activities
INVESTING ACTIVITIES
Capital expenditures                                 (39.3     )   (38.3     )
Transfer to restricted cash and cash equivalents     (4.0      )   (3.0      )
Net cash used for investing activities               (43.3     )   (41.3     )
FINANCING ACTIVITIES
Net (repayments) borrowings under credit             (17.7     )   0.9
arrangements
Proceeds from exercise of stock options              6.3           12.0
Other financing activities                           0.8          1.7       
Net cash (used for) provided by financing            (10.6     )   14.6      
activities
Effect of currency exchange rate changes on cash     (14.3     )   5.0       
and cash equivalents
Decrease in cash and cash equivalents                (17.1     )   (40.1     )
Cash and cash equivalents, beginning of period       1,336.9      1,048.3   
Cash and cash equivalents, end of period             $ 1,319.8    $ 1,008.2 
                                                                             

 The Notes to the Financial Information are included as part of the Earnings
                                   Release.

                                                               
W. R. Grace & Co. and Subsidiaries
Consolidated Balance Sheets (unaudited)
                                                                  
                                                    March 31,     December 31,
(In millions, except par value and shares)          2013          2012
ASSETS
Current Assets
Cash and cash equivalents                           $ 1,319.8     $  1,336.9
Restricted cash and cash equivalents                201.6         197.6
Trade accounts receivable, less allowance of $5.0   429.6         474.8
(2012—$5.2)
Accounts receivable—unconsolidated affiliate        13.8          15.6
Inventories                                         317.8         278.6
Deferred income taxes                               52.6          58.3
Other current assets                                94.4         78.4       
Total Current Assets                                2,429.6       2,440.2
Properties and equipment, net of accumulated
depreciation and amortization of $1,783.7           762.5         770.5
(2012—$1,785.1)
Goodwill                                            194.3         196.7
Patents, licenses and other intangible assets,      78.9          82.7
net
Deferred income taxes                               927.2         956.3
Asbestos-related insurance                          500.0         500.0
Overfunded defined benefit pension plans            36.5          33.8
Investment in unconsolidated affiliate              90.5          85.5
Other assets                                        29.9         24.5       
Total Assets                                        $ 5,049.4    $  5,090.2 
LIABILITIES AND EQUITY
Liabilities Not Subject to Compromise
Current Liabilities
Debt payable within one year                        $ 67.5        $  83.4
Debt payable—unconsolidated affiliate               4.5           3.6
Accounts payable                                    284.8         249.4
Accounts payable—unconsolidated affiliate           1.4           2.6
Other current liabilities                           238.9        307.3      
Total Current Liabilities                           597.1         646.3
Debt payable after one year                         11.7          13.4
Debt payable—unconsolidated affiliate               21.7          22.4
Deferred income taxes                               26.9          27.1
Underfunded and unfunded defined benefit pension    309.1         400.6
plans
Other liabilities                                   45.1         45.0       
Total Liabilities Not Subject to Compromise         1,011.6       1,154.8
Liabilities Subject to Compromise
Debt plus accrued interest                          981.1         973.3
Income tax contingencies                            90.4          87.6
Asbestos-related contingencies                      2,065.0       2,065.0
Environmental contingencies                         139.3         140.5
Postretirement benefits                             185.1         188.1
Other liabilities and accrued interest              165.3        162.6      
Total Liabilities Subject to Compromise             3,626.2      3,617.1    
Total Liabilities                                   4,637.8      4,771.9    
                                                                  
Equity
Common stock issued, par value $0.01; 300,000,000
shares authorized; outstanding: 75,871,645          0.8           0.8
(2012—75,565,409)
Paid-in capital                                     542.7         536.5
Retained earnings                                   448.1         395.2
Treasury stock, at cost: shares: 1,108,115          (13.2     )   (16.8      )
(2012—1,414,351)
Accumulated other comprehensive loss                (577.2    )   (607.3     )
Total W. R. Grace & Co. Shareholders' Equity        401.2         308.4
Noncontrolling interests                            10.4         9.9        
Total Equity                                        411.6        318.3      
Total Liabilities and Equity                        $ 5,049.4    $  5,090.2 
                                                                             

 The Notes to the Financial Information are included as part of the Earnings
                                   Release.

                 
W. R. Grace & Co. and Subsidiaries
Adjusted Earnings Per Share (unaudited)
                   
                   Three Months Ended March 31,
                   2013                                  2012
                           Tax at                              Tax at          
                   Pre-     Actual    After-   Per        Pre-     Actual    After-   Per
(In millions,
except per share   Tax      Rate      Tax      Share      Tax      Rate      Tax      Share
amounts)
Diluted Earnings                               $ 0.69                                 $ 0.80
Per Share (GAAP)
Cost related to    $ 3.8    $ 0.8     $ 3.0    0.04       $ 4.0    $ 0.9     $ 3.1    0.04
Chapter 11
Asbestos-related   2.1      0.7       1.4      0.02       1.2      0.4       0.8      0.01
costs
Restructuring
expenses and       0.8      0.2       0.6      0.01       3.0      1.0       2.0      0.03
related asset
impairments
Currency
transaction loss   6.9      2.6       4.3      0.05       —        —         —        —
on cash in
Venezuela
Discrete tax
items:
Discrete tax
items, including
adjustments to              (0.1  )   0.1      —                  (0.2  )   0.2      —
uncertain tax
positions
Adjusted EPS                                   $ 0.81                                $ 0.88
(non-GAAP)
                                                                                        

 The Notes to the Financial Information are included as part of the Earnings
                                   Release.

                      W. R. Grace&Co. and Subsidiaries

                      Notes to the Financial Information

(A): In the above charts, Grace presents its results of operations by
operating segment and for adjusted operations. Adjusted EBIT means net income
adjusted for interest income and expense, income taxes, costs related to
Chapter 11, asbestos-related costs, restructuring expenses and related asset
impairments, certain costs related to divested businesses, and gains and
losses on sales of businesses, product lines, and certain other investments.
In the 2013 first quarter, we also adjusted for the currency transaction loss
incurred on our Venezuelan cash balances of $6.9 million before taxes.
Adjusted EBITDA means Adjusted EBIT adjusted for depreciation and
amortization. Grace uses Adjusted EBIT as a performance measure in significant
business decisions. Adjusted Free Cash Flow means net cash provided by or used
for operating activities minus capital expenditures plus the net cash flow
from costs related to Chapter 11, cash paid to resolve contingencies subject
to Chapter 11, accelerated payments under defined benefit pension
arrangements, and expenditures for asbestos-related environmental remediation.
Grace uses Adjusted Free Cash Flow as a liquidity measure to evaluate its
ability to generate cash to support its ongoing business operations, to invest
in its businesses, and to provide a return of capital to shareholders.
Adjusted EPS means Diluted EPS adjusted for costs related to Chapter 11,
asbestos-related costs, restructuring expenses and related asset impairments,
certain costs related to divested businesses, gains and losses on sales of
businesses, product lines, and certain other investments, and certain discrete
tax items. Adjusted EBIT Return On Invested Capital means Adjusted EBIT
divided by the sum of net working capital, properties and equipment and
certain other assets and liabilities. Adjusted EBIT, Adjusted EBITDA, Adjusted
Free Cash Flow, Adjusted EPS, and Adjusted EBIT Return On Invested Capital do
not purport to represent income measures as defined under United States
generally accepted accounting principles, and should not be considered as
alternatives to such measures as an indicator of Grace's performance. These
measures are provided to distinguish the operating results of Grace's current
business base from the costs of Grace's Chapter 11 proceedings, asbestos
liabilities, restructuring activities, and divested businesses.

(B): Grace's segment operating income includes only Grace's share of income
from consolidated and unconsolidated joint ventures.

(C): Defined benefit pension expense includes all defined benefit pension
expense of Grace. Catalysts Technologies, Materials Technologies, and
Construction Products segment operating income and corporate costs do not
include amounts for defined benefit pension expense.

(D): Due to its bankruptcy, Grace has had significant intercompany loans
between its non-U.S. subsidiaries and its U.S. debtor subsidiaries that are
not related to its operating activities. In addition, Grace has accumulated
significant cash during its bankruptcy. The intercompany loans are expected to
be paid when Grace emerges from bankruptcy, and excess cash balances are
expected to be used to fund a significant portion of Grace's emergence from
bankruptcy. Accordingly, income and expense items related to the intercompany
loans and the cash balances are categorized as costs related to Chapter 11.

NM - Not Meaningful

Contact:

W. R. Grace & Co.
Media Relations
Rich Badmington, +1 410-531-4370
rich.badmington@grace.com
or
Investor Relations
Mark Sutherland, +1 410-531-4590
mark.sutherland@grace.com
 
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