Exhibit 99.1
CORPORATE COMMUNICATIONS
GRACE NEWS
W.R. Grace $ Co.
7500 Grace Drive
Columbia, MD 21044
CONTACT: Media Relations: Investor Relations:
Greg Euston Bridget Sarikas
(212) 468-3734 (410) 531-4194
greg.euston@mslpr.com investor.relations@grace.com
GRACE REPORTS THIRD QUARTER FINANCIAL RESULTS
COLUMBIA, Maryland, October 31, 2005 -- W. R. Grace & Co. (NYSE: GRA) today
announced its financial results for the third quarter and nine-month period
ended September 30, 2005. Highlights are as follows:
| | Sales for the third quarter of 2005 were $653.4 million compared with
$579.9 million in the prior year quarter, a 12.7% increase. The increase
was attributable to higher sales volume in all geographic regions, improved
product mix, selling price increases in response to cost inflation and, to
a lesser degree, acquisitions and favorable currency translation. Sales
increased 11.4% for the Davison Chemicals segment and 14.1% for the
Performance Chemicals segment.
| | Net income in the third quarter 2005 was $32.1 million, or $0.48 per
diluted share, compared with $48.0 million, or $0.72 per diluted share, in
the prior year quarter. Net income in the 2004 third quarter included a
$50.0 million pre-tax gain ($32.5 million after tax) from a litigation
settlement. The 2005 third quarter includes a $16.0 million favorable
change in estimated liabilities for tax exposures.
| | Pre-tax income from core operations was $59.1 million, 2.4% higher than the
third quarter of last year. Pre-tax operating income of the Performance
Chemicals segment was $45.5 million, up 15.2% compared with the 2004 third
quarter, attributable principally to higher sales volume, partially offset
by higher raw material costs, which exceeded the effect of selling price
increases. Pre-tax operating income of the Davison Chemicals segment was
$36.8 million, down 13.6% compared with the third quarter last year,
primarily due to lost sales and extra costs related to Hurricanes Katrina
and Rita in the Gulf of Mexico region of the United States, as well as
higher costs of energy and certain raw materials. Grace's production
facility for refining catalysts in Lake Charles, Louisiana, was shutdown
for two weeks by Hurricane Rita. Grace satisfied customer demand from its
other catalysts plants, incurring added production and distribution costs,
and added expenses to support its displaced workers in Lake Charles.
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| | Sales for the nine months ended September 30, 2005 were $1,933.1 million
compared with $1,670.8 million for the first nine months of 2004, a 15.7%
increase. Net income for the same periods was $67.9 million, or $1.01 per
diluted share, compared with $85.1 million, or $1.29 per diluted share. The
decline in net income is principally associated with the one-time gain from
the settlement of litigation in the 2004 third quarter. Pre-tax income from
core operations amounted to $155.4 million for the first nine months of
2005, a 6.8% increase over the same period last year, primarily
attributable to higher sales.
"We continued to deliver solid sales growth in the third quarter despite the
impact of the hurricanes in the Gulf of Mexico," said Grace's President and
Chief Executive Officer Fred Festa. "Operating income from our Performance
Chemicals segment benefited from good construction markets and the success of
growth initiatives, more than offsetting the difficulties faced by our Davison
Chemicals segment from the hurricanes. All of our workers at our Lake Charles,
Louisiana site are safe and the facility is back to full production after being
off-line for two weeks. The hurricanes have caused reduced production at certain
customer sites, added costs for support of workers and customers through the
recovery period, and higher energy costs caused by supply dislocation. We will
continue to work with our customers to balance our selling prices with an
unprecedented increase in energy and material costs."
CORE OPERATIONS
- ---------------
DAVISON CHEMICALS
Third quarter sales for the Davison Chemicals segment were $338.3 million, up
11.4% from the prior year quarter, mainly reflecting strong global demand for
reduced-sulfur transportation fuels and higher selling prices to partially
offset increases in raw material costs. Currency translation was not a
significant factor in the third quarter. Sales of refining technologies
products, which include fluid cracking catalysts, hydroprocessing catalysts and
performance additives used in petroleum refining, were $197.7 million in the
third quarter, up 16.9% compared with the prior year quarter. The increase
resulted from higher volume of hydroprocessing catalysts in response to
worldwide demand for cleaner fuels, and added revenue from the contractual
pass-through of metals costs. Hurricanes Katrina and Rita, which caused
shut-downs of a number of refineries in the United States, negatively affected
sales of fluid cracking catalysts in the third quarter and is likely to
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continue to have some negative effect in the fourth quarter. Grace is evaluating
the potential insurance recovery for business interruption costs. Sales of
specialty materials products, which include silica-based engineered materials,
specialty catalysts, and products used for drug discovery and purification, were
$140.6 million, up 4.4% compared with the third quarter of 2004. The increase
was primarily attributable to sales from the acquisition of Alltech
International Holdings, Inc., completed in August 2004, increases in selling
prices to address raw material cost inflation, and a better product sales mix;
offset by lower sales of engineered materials in Europe as a result of lower
economic activity in parts of that region.
Operating income of the Davison Chemicals segment for the third quarter of 2005
was $36.8 million compared with $42.6 million in the 2004 third quarter, a 13.6%
decrease. Operating margin was 10.9%, about 3.1 percentage points lower than the
prior year quarter. The decrease in operating income was primarily attributable
to the loss of sales and added costs related to Hurricanes Katrina and Rita.
These losses, together with higher energy and raw material costs, more than
offset improvements in operating income of Davison operations not affected by
the hurricanes.
Sales of the Davison Chemicals segment for the first nine months of 2005 were
$1,031.9 million, up 18.3% from the same period of 2004 (16.6% excluding the
favorable effects of currency translation). Year-to-date operating income was
$117.6 million, compared with $112.1 million for the prior year, a 4.9%
increase, with operating margins at 11.4% compared with 12.8% last year.
Year-to-date operating results reflect higher sales in all regions and major
product lines offset by the negative effects of the hurricanes in the Gulf of
Mexico, higher raw material and energy costs and costs associated with
integrating business functions and processes.
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PERFORMANCE CHEMICALS
Third quarter sales for the Performance Chemicals segment were $315.1 million,
up 14.1% from the prior year quarter, primarily as a result of strong growth in
sales volume worldwide and increases in selling prices, which partially offset
higher raw material costs. Currency translation was not a significant factor in
the third quarter. Sales of specialty construction chemicals, which include
concrete admixtures, cement additives and masonry products, were $161.2 million,
up 17.9% compared with the prior year quarter. Sales were up in all regions,
mainly reflecting geographic expansion and other growth initiatives, as well as
strong construction activity, primarily in North America. Sales of specialty
building materials, which include waterproofing and fire protection products,
were $77.9 million, up 13.6% compared with the third quarter of 2004. The
increase reflects higher sales of roofing underlayments to the residential
segment in North America, added sales from the acquisition of the TRI-FLEX 30(R)
synthetic roofing underlayment product line in December 2004, and higher sales
of specialty below-grade commercial waterproofing worldwide. Sales of Darex(R)
specialty sealants and coatings, used in rigid food and beverage packaging, were
$76.0 million, up 7.3% compared with the third quarter of 2004. Sales were up in
all geographic regions as a result of the continued commercial success of
Daraform(R) closure sealants and specialty can coatings, as well as selling
price increases, which partially offset higher raw material costs.
Operating income for the Performance Chemicals segment was $45.5 million in the
third quarter of 2005 compared with $39.5 million for third quarter of 2004, a
15.2% increase. Operating margin of 14.4% was slightly higher than the third
quarter of last year. Higher operating income and margins were primarily a
result of sales volume growth, offset by raw material inflation, which exceeded
the effect of selling price increases.
Sales of the Performance Chemicals segment for the nine months ended September
2005 were $901.2 million, up 12.9% from 2004 (11.0% excluding the favorable
effects of currency translation). Year-to-date operating income was $118.5
million compared with $106.0 million for the first nine months of the prior
year, a 11.8% increase, reflecting higher sales volume and positive results from
productivity and cost containment initiatives, offset by raw material cost
inflation, which exceeded the impact of selling price increases. Operating
margin of 13.1% was about even with the first nine months of last year.
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CORPORATE COSTS
Third quarter corporate costs related to core operations were $23.2 million
compared with $24.4 million in the prior year quarter, and $80.7 million for the
first nine months in 2005 compared with $72.6 million for the first nine months
of last year. The year-to-date increase was attributable primarily to higher
pension expense, resulting from updated assumptions for expected life-spans, the
longevity of Grace's active work force and amortization of deferred costs
related to capital market returns in recent years, which were factored into
corporate costs by the third quarter of last year.
OTHER MATTERS
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During the third quarter of 2005, Grace lowered its liability estimates for
continuing tax exposures by $16 million to account for resolution in the quarter
of previously considered risks in prior period tax returns. The benefit of this
change in estimate is reflected as an offset to normal income tax expense in the
quarter.
As previously disclosed, Grace and current and former employees are defendants
in a criminal proceeding related to former vermiculite mining operations in
Montana, and Grace and two employees are defendants in a civil lawsuit which was
filed in the second quarter of 2005 related to the clean-up of a former
vermiculite processing site in New Jersey. Grace's third quarter and
year-to-date financial statements include $5.5 million and $14.5 million,
respectively, of legal costs (included as part of "Selling, general and
administrative expenses" in the Consolidated Statement of Operations, and
"Pre-tax income (loss) from noncore activities" in the Segment Basis Analysis)
for the defense of Grace and the named individuals with respect to these
lawsuits. At this time, Grace cannot predict the outcome of these lawsuits nor
the extent of any financial impact. Defense costs are being expensed as
incurred.
Also as previously disclosed, Grace's amended proposed plan of reorganization
provides for interest on general unsecured claims (not payable until a plan is
confirmed) at rates that generally range from 4.19% to 6.09%. Such rates were
applied to Grace's estimate of eligible claims for the three-month and
nine-month periods ended September 30, 2005, increasing third quarter and
year-to-date interest expense by approximately $9 million and $29 million,
respectively.
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CASH FLOW AND LIQUIDITY
- -----------------------
Grace's net cash flow from operating activities was $5.8 million for the first
nine months of 2005, compared with $167.4 million for the comparable period of
2004. In addition to an increase in working capital in response to higher sales,
the year-to-date 2005 cash flow includes payments aggregating $130.2 million to
resolve U.S. federal tax return audits and an environmental contingency at a
formerly owned site and for the roll-forward of dollar-to-euro currency
contracts. Year-to-date 2005 pre-tax income from core operations before
depreciation and amortization was $241.5 million, 6.9% higher than the first
nine months of 2004, a result of the higher income from core operations
described above. Cash used for investing activities was $31.3 million for the
first nine months of 2005, primarily reflecting capital replacements, partially
offset by proceeds from the termination of life insurance policies.
At September 30, 2005, Grace had available liquidity in the form of cash ($463.5
million), net cash value of life insurance ($83.0 million) and available credit
under its debtor-in-possession facility ($211.6 million). Grace believes that
these sources and amounts of liquidity are sufficient to support its business
operations, strategic initiatives and Chapter 11 proceedings for the foreseeable
future.
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 (the "Filing"). Grace's non-U.S. subsidiaries and certain of its U.S.
subsidiaries were not part of the Filing. Since the Filing, all motions
necessary to conduct normal business activities have been approved by the
Bankruptcy Court.
On November 13, 2004, Grace filed a plan of reorganization, as well as several
associated documents, including a disclosure statement, with the Bankruptcy
Court. On January 13, 2005, Grace filed an amended plan of reorganization (the
"Plan") and related documents to address certain objections of creditors and
other interested parties. The amended Plan is supported by committees
representing general unsecured creditors and equity holders, but is not
supported by committees representing asbestos personal injury
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claimants and asbestos property damage claimants. The Bankruptcy Court
proceedings are currently focused on the estimation of Grace's asbestos-related
liabilities. The Bankruptcy Court has approved a process and timeline for the
estimation of asbestos-related property damage and personal injury claims, with
estimation hearings targeted for September 2006.
Most of Grace's noncore liabilities and contingencies (including
asbestos-related litigation, environmental claims, tax matters and other
obligations) are subject to compromise under the Chapter 11 process. The Chapter
11 proceedings, including related litigation and the claims valuation process,
could result in allowable claims that differ materially from recorded amounts.
Grace will adjust its estimates of allowable claims as facts come to light
during the Chapter 11 process that justify a change, and as Chapter 11
proceedings establish court-accepted measures of Grace's noncore liabilities.
See Grace's recent Securities and Exchange Commission filings for discussion of
noncore liabilities and contingencies.
* * * * *
Grace is a leading global supplier of catalysts and other products and services
to petroleum refiners; catalysts for the manufacture of plastics; silica-based
engineered and specialty materials for a wide-range of industrial applications;
specialty chemicals, additives and materials for commercial and residential
construction; and sealants and coatings for food packaging. With annual sales of
more than $2.3 billion, Grace has over 6,500 employees and operations in nearly
40 countries. For more information, visit Grace's web site at www.grace.com.
-------------
* * * * *
This announcement contains forward-looking statements that involve risks and
uncertainties, as well as statements that are preceded by, followed by or
include the words "believes," "plans," "intends," "targets," "will," "expects,"
"anticipates," or similar expressions. For such statements, Grace claims the
protection of the safe harbor for forward-looking statements contained in the
Private Securities Litigation Reform Act of 1995. Actual results may differ
materially from the results predicted, and reported results should not be
considered as an indication of future performance. Factors that could cause
actual results to differ from those contained in the forward-looking statements
include those factors set forth in Grace's most recent Annual Report on Form
10-K, quarterly reports on Form 10-Q and other reports, which have been filed
with the SEC. Readers are cautioned not to place undue reliance on
forward-looking statements, which speak only as of the date thereof. Grace
undertakes no obligation to publicly release any revisions to the
forward-looking statements contained in this release, or to update them to
reflect events or circumstances occurring after the date of this release.
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GRACE NEWS
========================================================= ============================ ==============================
W.R. GRACE & CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS THREE MONTHS ENDED NINE MONTHS ENDED
(UNAUDITED) SEPTEMBER 30, SEPTEMBER 30,
========================================================= ============================ ==============================
Amounts in millions, except per share amounts 2005 2004 2005 2004
- --------------------------------------------------------- -------------- ------------- --------------- --------------
Net sales.............................................. $ 653.4 $ 579.9 $ 1,933.1 $ 1,670.8
-------------- ------------- --------------- --------------
Cost of goods sold, exclusive of depreciation
and amortization shown separately below............ 426.0 361.3 1,258.4 1,049.7
Selling, general and administrative expenses,
exclusive of net pension expense and
depreciation shown separately below................ 111.3 104.7 350.0 317.6
Depreciation and amortization........................... 28.7 26.9 86.1 80.4
Research and development expenses....................... 14.9 13.1 45.1 38.8
Net pension expense..................................... 17.3 16.3 54.4 45.9
Interest expense and related financing costs............ 13.4 4.5 41.3 12.3
Other (income) expense.................................. (4.4) (50.5) (34.4) (49.1)
Provision for environmental remediation................. - 20.0 - 20.0
-------------- ------------- --------------- --------------
607.2 496.3 1,800.9 1,515.6
-------------- ------------- --------------- --------------
Income (loss) before Chapter 11 expenses,
income taxes and minority interest................. 46.2 83.6 132.2 155.2
Chapter 11 expenses, net................................ (9.3) (4.3) (19.9) (11.8)
Benefit from (provision for) income taxes............... 2.6 (28.0) (26.0) (51.9)
Minority interest in consolidated entities.............. (7.4) (3.3) (18.4) (6.4)
-------------- ------------- --------------- --------------
NET INCOME (LOSS).................................. $ 32.1 $ 48.0 $ 67.9 $ 85.1
========================================================= ============== ============= =============== ==============
BASIC EARNINGS (LOSS) PER COMMON SHARE.................. $ 0.48 $ 0.73 $ 1.02 $ 1.30
Average number of basic shares.......................... 66.9 65.8 66.8 65.7
DILUTED EARNINGS (LOSS) PER COMMON SHARE................ $ 0.48 $ 0.72 $ 1.01 $ 1.29
Average number of diluted shares........................ 67.2 66.3 67.3 66.0
========================================================= ============== ============= =============== ==============
Note: The amounts in these financial statements are unaudited and are subject to
change prior to the filing of Grace's Quarterly Report on Form 10-Q. Any changes
will be reflected in the Form 10-Q and promptly disclosed publicly, if material.
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W.R. GRACE & CO. AND SUBSIDIARIES
SEGMENT BASIS ANALYSIS THREE MONTHS ENDED NINE MONTHS ENDED
(UNAUDITED) SEPTEMBER 30, SEPTEMBER 30,
================================================ ===================================== =======================================
Amounts in millions 2005 2004 % Change 2005 2004 % CHANGE
- ------------------------------------------------ ----------- ---------- -------------- ------------ ----------- --------------
NET SALES:
DAVISON CHEMICALS
Refining Technologies...................... $197.7 $169.1 16.9% $605.4 $482.7 25.4%
Specialty Materials........................ 140.6 134.7 4.4% 426.5 389.8 9.4%
- ------------------------------------------------ ----------- ---------- -------------- ------------ ----------- --------------
TOTAL DAVISON CHEMICALS 338.3 303.8 11.4% 1,031.9 872.5 18.3%
- ------------------------------------------------ ----------- ---------- -------------- ------------ ----------- --------------
PERFORMANCE CHEMICALS
Construction chemicals..................... 161.2 136.7 17.9% 448.2 386.1 16.1%
Building materials......................... 77.9 68.6 13.6% 226.1 199.5 13.3%
Sealants & coatings........................ 76.0 70.8 7.3% 226.9 212.7 6.7%
- ------------------------------------------------ ----------- ---------- -------------- ------------ ----------- --------------
TOTAL PERFORMANCE CHEMICALS 315.1 276.1 14.1% 901.2 798.3 12.9%
- ------------------------------------------------ ----------- ---------- -------------- ------------ ----------- --------------
TOTAL GRACE SALES $653.4 $579.9 12.7% $1,933.1 $1,670.8 15.7%
================================================ =========== ========== ============== ============ =========== ==============
PRE-TAX OPERATING INCOME:
Davison Chemicals............................. $36.8 $42.6 (13.6%) $117.6 $112.1 4.9%
Performance Chemicals......................... 45.5 39.5 15.2% 118.5 106.0 11.8%
Corporate costs............................... (23.2) (24.4) 4.9% (80.7) (72.6) (11.2%)
- ------------------------------------------------ ----------- ---------- -------------- ------------ ----------- --------------
PRE-TAX INCOME FROM CORE OPERATIONS(a).......... 59.1 57.7 2.4% 155.4 145.5 6.8%
- ------------------------------------------------ ----------- ---------- -------------- ------------ ----------- --------------
PRE-TAX INCOME (LOSS) FROM NONCORE ACTIVITIES(a) (7.7) 26.4 (129.2%) (2.7) 12.6 (121.4%)
- ------------------------------------------------ ----------- ---------- -------------- ------------ ----------- --------------
Interest expense................................ (13.4) (4.5) (197.8%) (41.3) (12.3) NM
Interest income................................. 0.8 0.7 14.3% 2.4 3.0 (20.0%)
- ------------------------------------------------ ----------- ---------- -------------- ------------ ----------- --------------
INCOME (LOSS) BEFORE CHAPTER 11 EXPENSES
AND INCOME TAXES 38.8 80.3 (51.7%) 113.8 148.8 (23.5%)
Chapter 11 expenses, net........................ (9.3) (4.3) (116.3%) (19.9) (11.8) (68.6%)
Benefit from (provision for) income taxes....... 2.6 (28.0) 109.3% (26.0) (51.9) 49.9%
- ------------------------------------------------ ----------- ---------- -------------- ------------ ----------- --------------
NET INCOME (LOSS) $32.1 $48.0 (33.1%) $67.9 $85.1 (20.2%)
================================================ =========== ========== ============== ============ =========== ==============
================================================ =========== ========== ============== ============ =========== ==============
KEY FINANCIAL MEASURES:
Pre-tax income from core operations as a
percentage of sales...................... 9.0% 9.9% (0.9) pts. 8.0% 8.7% (0.7) pts.
Pre-tax income from core operations before
depreciation and amortization (a)........ $87.8 $84.6 3.8% $241.5 $225.9 6.9%
As a percentage of sales................. 13.4% 14.6% (1.2) pts. 12.5% 13.5% (1.0) pts.
================================================ =========== ========== ============== ============ =========== ==============
NET SALES BY REGION:
North America ............................... $285.0 $253.0 12.6% $826.1 $728.8 13.4%
Europe....................................... 232.5 206.9 12.4% 698.4 606.2 15.2%
Asia Pacific................................. 98.9 92.3 7.2% 304.6 251.8 21.0%
Latin America................................ 37.0 27.7 33.6% 104.0 84.0 23.8%
- ------------------------------------------------ ----------- ---------- -------------- ------------ ----------- --------------
TOTAL $653.4 $579.9 12.7% $1,933.1 $1,670.8 15.7%
================================================ =========== ========== ============== ============ =========== ==============
Note (a): The above chart, as well as the financial discussion in other parts of
this earnings release, divides Grace's financial results between "core
operations" and "non-core activities". Core operations comprise the financial
results of Davison Chemicals, Performance Chemicals and the cost of corporate
activities that directly or indirectly support business operations. In contrast,
non-core activities comprise all other events and transactions not directly
related to the generation of operating revenue or the support of core operations
and generally relate to Grace's former operations and products. Grace uses
pre-tax income from core operations as a factor in determining certain incentive
compensation and as a key factor in its management's decision-making process.
Neither pre-tax income from core operations nor pre-tax income from core
operations before depreciation and amortization purport to represent income or
cash flow as defined under generally accepted accounting principles, and should
not be considered an alternative to such measures as an indicator of Grace's
performance. These measures are provided to distinguish operating results of
Grace's current business base from results and related assets and liabilities of
past businesses, discontinued products, and corporate legacies including the
effect of Grace's Chapter 11 proceedings.
NM - Not Meaningful
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W.R. GRACE & CO. AND SUBSIDIARIES NINE MONTHS ENDED
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) SEPTEMBER 30,
=================================================================================== ==================================
Amounts in millions 2005 2004
--------------- ------------------
OPERATING ACTIVITIES
Income (loss) before Chapter 11 expenses, income taxes and
minority interest............................................................. $ 132.2 $ 155.2
Reconciliation to net cash provided by (used for) operating activities:
Depreciation and amortization ................................................ 86.1 80.4
Interest accrued on pre-petition liabilities subject to compromise............ 37.7 8.7
Net (gain) loss on sales of investments and disposals of assets............... (0.2) 0.1
Net gain from litigation settlement........................................... -- (50.0)
Provision for environmental remediation....................................... -- 20.0
Loss on sale of business...................................................... 1.1 --
Provision for uncollectible receivables....................................... 2.2 1.5
Income from life insurance policies, net...................................... (1.6) (1.8)
Payments to fund defined benefit pension plans................................ (32.8) (27.6)
Payments under postretirement benefit programs ............................... (8.3) (9.2)
Expenditures for environmental remediation ................................... (4.7) (6.1)
Expenditures for retained obligations of discontinued operations.............. (0.7) (0.9)
Changes in assets and liabilities, excluding effect of businesses
acquired/divested and foreign currency translation:
Working capital items..................................................... (60.8) (46.4)
Other accruals and non-cash items......................................... 17.1 72.8
------------- ------------------
NET CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES BEFORE INCOME TAXES AND
CHAPTER 11 EXPENSES........................................................... 167.3 196.7
Cash paid to settle noncore contingencies.......................................... (119.7) --
Chapter 11 expenses paid, net ..................................................... (14.0) (8.0)
Income taxes paid, net of refunds.................................................. (27.8) (21.3)
--------------- ------------------
NET CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES ......................... 5.8 167.4
--------------- ------------------
INVESTING ACTIVITIES
Capital expenditures for property and equipment ................................... (50.2) (40.0)
Businesses acquired, net of cash acquired.......................................... (2.5) (53.0)
Proceeds from termination of life insurance policies............................... 14.8 --
Net investment in life insurance policies ......................................... (1.8) (13.8)
Proceeds from life insurance policies.............................................. 2.2 12.5
Proceeds from sales of investments and disposals of assets......................... 1.7 1.7
Proceeds from sale of business..................................................... 4.5 --
--------------- ------------------
NET CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES ......................... (31.3) (92.6)
--------------- ------------------
FINANCING ACTIVITIES
Net payments of loans secured by cash value of life insurance policies............. (0.5) (3.2)
Net (repayments) borrowings under credit facilities ............................... (9.7) 6.0
Fees under debtor-in-possession credit facility.................................... (1.5) (1.6)
Proceeds from exercise of stock options............................................ 3.1 0.8
--------------- ------------------
NET CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES ......................... (8.6) 2.0
--------------- ------------------
Effect of currency exchange rate changes on cash and cash equivalents ............. (12.8) (0.9)
--------------- ------------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ............................. (46.9) 75.9
Cash and cash equivalents, beginning of period .................................... 510.4 309.2
--------------- ------------------
Cash and cash equivalents, end of period .......................................... $ 463.5 $ 385.1
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W.R. GRACE & CO. AND SUBSIDIARIES SEPTEMBER 30, DECEMBER 31,
CONSOLIDATED BALANCE SHEET (UNAUDITED) 2005 2004
=================================================================================== ================== =====================
Amounts in millions
ASSETS
CURRENT ASSETS
Cash and cash equivalents ......................................................... $ 463.5 $ 510.4
Trade accounts receivable, net .................................................... 426.0 390.9
Inventories ....................................................................... 261.1 248.3
Deferred income taxes ............................................................. 29.8 16.3
Other current assets............................................................... 63.1 62.6
------------------ -------------------
TOTAL CURRENT ASSETS ......................................................... 1,243.5 1,228.5
Properties and equipment, net...................................................... 588.8 645.3
Goodwill .......................................................................... 104.3 111.7
Cash value of life insurance policies, net of policy loans......................... 83.0 96.0
Deferred income taxes ............................................................. 667.4 667.4
Asbestos-related insurance expected to be realized after one year.................. 500.0 500.0
Other assets ...................................................................... 278.1 290.0
------------------ -------------------
TOTAL ASSETS ................................................................. $ 3,465.1 $ 3,538.9
================== ===================
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
LIABILITIES NOT SUBJECT TO COMPROMISE
CURRENT LIABILITIES
Debt payable within one year ...................................................... $ 2.7 $ 12.4
Accounts payable .................................................................. 156.5 146.0
Income taxes payable .............................................................. 12.7 7.7
Other current liabilities ......................................................... 223.9 221.5
------------------ -------------------
TOTAL CURRENT LIABILITIES .................................................... 395.8 387.6
Debt payable after one year........................................................ 0.5 1.1
Deferred income taxes ............................................................. 57.6 64.1
Unfunded defined benefit pension liability......................................... 434.2 424.9
Other liabilities ................................................................. 51.2 75.3
------------------ -------------------
TOTAL LIABILITIES NOT SUBJECT TO COMPROMISE .................................. 939.3 953.0
LIABILITIES SUBJECT TO COMPROMISE
Pre-petition debt plus accrued interest............................................ 674.7 645.8
Accounts payable................................................................... 31.5 31.3
Income tax contingencies........................................................... 126.0 210.4
Asbestos-related liability......................................................... 1,700.0 1,700.0
Environmental remediation.......................................................... 318.9 345.0
Post-retirement benefits........................................................... 181.4 196.3
Other liabilities and accrued interest............................................. 67.4 78.9
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TOTAL LIABILITIES SUBJECT TO COMPROMISE....................................... 3,099.9 3,207.7
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TOTAL LIABILITIES............................................................. 4,039.2 4,160.7
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SHAREHOLDERS' EQUITY (DEFICIT)
Common stock....................................................................... 0.8 0.8
Paid-in capital ................................................................... 423.4 426.5
Accumulated deficit................................................................ (505.3) (573.2)
Treasury stock, at cost............................................................ (119.7) (125.9)
Accumulated other comprehensive loss .............................................. (373.3) (350.0)
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TOTAL SHAREHOLDERS' EQUITY (DEFICIT).......................................... (574.1) (621.8)
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) ......................... $ 3,465.1 $ 3,538.9
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