Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | May. 04, 2016 | |
Document and Entity Information | ||
Entity Registrant Name | GCP Applied Technologies Inc. | |
Entity Central Index Key | 1,644,440 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 70,694,650 | |
Document Fiscal Year Focus | 2,016 | |
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, 2016 | Mar. 31, 2015 | |
Net sales | $ 314.1 | $ 322.7 |
Cost of goods sold | 192.9 | 211.4 |
Gross profit | 121.2 | 111.3 |
Selling, general and administrative expenses | 71.1 | 71.5 |
Research and development expenses | 5.3 | 5.8 |
Interest expense and related financing costs | 12.5 | 0.4 |
Interest income, net - related party | 0 | (0.2) |
Other expense (income), net | 1.3 | (0.4) |
Total costs and expenses | 95.4 | 81.4 |
Income before income taxes | 25.8 | 29.9 |
Provision for income taxes | (8.4) | (9.3) |
Net income | 17.4 | 20.6 |
Less: net income attributable to noncontrolling interests | (0.4) | (0.1) |
Net income attributable to GCP shareholders | $ 17 | $ 20.5 |
Basic earnings per share: | ||
Net income attributable to GCP shareholders (in usd per share) | $ 0.24 | $ 0.29 |
Weighted average number of basic shares | 70.6 | 70.5 |
Diluted earnings per share: | ||
Net income attributable to GCP shareholders (in usd per share) | $ 0.24 | $ 0.29 |
Weighted average number of diluted shares | 70.9 | 70.5 |
Repositioning | ||
Restructuring expenses | $ 4.3 | $ 0 |
Changes in Business Environment and Structure | ||
Restructuring expenses | $ 0.9 | $ 4.3 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) (unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 17.4 | $ 20.6 |
Other comprehensive income (loss): | ||
Currency translation adjustments | 3.9 | (29.6) |
(Loss) gain from hedging activities, net of income taxes | (0.2) | 0.1 |
Total other comprehensive income attributable to noncontrolling interests | 0.2 | 0.1 |
Total other comprehensive income (loss) | 3.9 | (29.4) |
Comprehensive income (loss) | 21.3 | (8.8) |
Less: comprehensive income attributable to noncontrolling interests | (0.6) | (0.2) |
Comprehensive income (loss) attributable to GCP shareholders | $ 20.7 | $ (9) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
OPERATING ACTIVITIES | ||
Net income | $ 17.4 | $ 20.6 |
Reconciliation to net cash provided by operating activities: | ||
Depreciation and amortization | 8.9 | 8.2 |
Deferred income taxes | (2.9) | (2.8) |
Cash paid for interest on notes and credit arrangements | (3) | (0.3) |
Defined benefit pension expense | 2.4 | 0.4 |
Cash paid under defined benefit pension arrangements | (1.3) | (0.7) |
Changes in assets and liabilities, excluding effect of currency translation: | ||
Trade accounts receivable | (11.1) | (5) |
Inventories | (4) | 0.6 |
Accounts payable | 12.9 | (0.7) |
All other items, net | 4.4 | (11.5) |
Net cash provided by operating activities | 23.7 | 8.8 |
INVESTING ACTIVITIES | ||
Capital expenditures | (13.7) | (7.7) |
Other investing activities | 0.1 | 0.1 |
Net cash used for investing activities | (13.6) | (7.6) |
FINANCING ACTIVITIES | ||
Borrowings under credit arrangements | 283.1 | 7.1 |
Repayments under credit arrangements | (9.1) | (18.1) |
Borrowings under related party loans | 0 | 0.5 |
Repayments under related party loans | 0 | (1.6) |
Proceeds from issuance of bonds | 525 | 0 |
Cash paid for debt financing costs | (18.2) | 0 |
Share repurchase under GCP 2016 Stock Incentive Plan | (1.7) | 0 |
Proceeds from exercise of stock options | 0.3 | 0 |
Excess tax benefits from stock-based compensation | 0.8 | 1.8 |
Transfers (from) to parent, net | (764.6) | 10.6 |
Net cash provided by financing activities | 15.6 | 0.3 |
Effect of currency exchange rate changes on cash and cash equivalents | 2.4 | (13.2) |
Increase (decrease) in cash and cash equivalents | 28.1 | (11.7) |
Cash and cash equivalents, beginning of period | 98.6 | 120.9 |
Cash and cash equivalents, end of period | $ 126.7 | $ 109.2 |
Consolidated Balance Sheets (un
Consolidated Balance Sheets (unaudited) - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 |
Current Assets | ||
Cash and cash equivalents | $ 126.7 | $ 98.6 |
Trade accounts receivable, less allowance of $6.2 (2015—$6.2) | 221 | 203.6 |
Inventories | 110.8 | 105.3 |
Other current assets | 36.5 | 38.9 |
Total Current Assets | 495 | 446.4 |
Properties and equipment, net of accumulated depreciation and amortization of $482.3 (2015—$430.1) | 223.5 | 197.1 |
Goodwill | 104.4 | 102.5 |
Technology and other intangible assets, net | 33.2 | 33.3 |
Deferred income taxes | 80.2 | 17.6 |
Overfunded defined benefit pension plans | 25.5 | 26.1 |
Other assets | 23.8 | 10.1 |
Total Assets | 985.6 | 833.1 |
Current Liabilities | ||
Debt payable within one year | 32 | 25.7 |
Accounts payable | 122.2 | 109 |
Loans payable - related party | 0 | 42.3 |
Other current liabilities | 121 | 125.5 |
Total Current Liabilities | 275.2 | 302.5 |
Debt payable after one year | 784.2 | 0 |
Deferred income taxes | 8.6 | 8.7 |
Unrecognized tax benefits | 9.6 | 5.2 |
Underfunded and unfunded defined benefit pension plans | 80.8 | 34 |
Other liabilities | 9.3 | 8.6 |
Total Liabilities | $ 1,167.7 | $ 359 |
Commitments and Contingencies - Note 7 | ||
Stockholders' (Deficit) Equity | ||
Net parent investment | $ 0 | $ 598.3 |
Common stock issued, par value $0.01; 300,000,000 shares authorized; outstanding: 70,673,392 | 0.7 | |
Accumulated deficit | (61.2) | 0 |
Accumulated other comprehensive loss | (124) | (127.7) |
Treasury stock | (1.7) | |
Total GCP's Shareholders' (Deficit) Equity | (186.2) | 470.6 |
Noncontrolling interests | 4.1 | 3.5 |
Total Stockholders' (Deficit) Equity | (182.1) | 474.1 |
Total Liabilities and Stockholders' (Deficit) Equity | $ 985.6 | $ 833.1 |
Consolidated Balance Sheets (u6
Consolidated Balance Sheets (unaudited) (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Trade accounts receivable, allowance | $ 6.2 | $ 6.2 |
Accumulated depreciation and amortization | $ 482.3 | $ 430.1 |
Common stock issued, par value (in usd per share) | $ 0.01 | |
Common stock, number of shares authorized | 300,000,000 | |
Common stock, number of shares outstanding | 70,673,392 |
Consolidated Statements of (Def
Consolidated Statements of (Deficit) Equity (unaudited) - USD ($) $ in Millions | Total | Common Stock | Accumulated Deficit | Treasury Stock | Net Parent Investment | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests |
Balance at Dec. 31, 2014 | $ 607.4 | $ 0 | $ 0 | $ 670.6 | $ (66) | $ 2.8 | |
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 20.6 | 20.5 | 0.1 | ||||
Other comprehensive (loss) income | (29.4) | (29.5) | 0.1 | ||||
Net transfers to parent | (0.7) | (0.7) | |||||
Balance at Mar. 31, 2015 | 597.9 | 0 | 0 | 690.4 | (95.5) | 3 | |
Balance at Dec. 31, 2015 | 474.1 | 0 | 0 | $ 0 | 598.3 | (127.7) | 3.5 |
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 17.4 | 9.8 | 7.2 | 0.4 | |||
Other comprehensive (loss) income | 3.9 | 3.7 | 0.2 | ||||
Net transfers to parent | (677.9) | (677.9) | |||||
Reclassification of net parent investment in connection with Separation | 0 | 0.7 | (73.1) | 72.4 | |||
Share based compensation | 0.7 | 0.7 | |||||
Exercise of stock options | 0.6 | 0.6 | |||||
Tax benefit related to stock plans | 0.8 | 0.8 | |||||
Treasury stock purchased under GCP 2016 Stock Incentive Plan | (1.7) | (1.7) | |||||
Balance at Mar. 31, 2016 | $ (182.1) | $ 0.7 | $ (61.2) | $ (1.7) | $ 0 | $ (124) | $ 4.1 |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting and Financial Reporting Policies | 3 Months Ended |
Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Summary of Significant Accounting and Financial Reporting Policies | Basis of Presentation and Summary of Significant Accounting and Financial Reporting Policies On January 27, 2016, GCP entered into a Separation and Distribution Agreement pursuant to which Grace agreed to transfer its Grace Construction Products operating segment and the packaging technologies business, operated under the “Darex” name, of its Grace Materials Technologies operating segment to GCP (the "Separation"). The Separation occurred on February 3, 2016, by means of a pro rata distribution to Grace stockholders of all of the then-outstanding shares of Company common stock (the "Distribution"). Under the Distribution, one share of Company common stock was distributed for each share of Grace common stock held by Grace stockholders of record as of the close of business on January 27, 2016. No fractional shares were distributed. As a result of the Distribution, GCP is now an independent public company and its common stock is listed under the symbol "GCP" on the New York Stock Exchange. GCP is engaged in the production and sale of specialty construction chemicals, specialty building materials, and packaging products through three operating segments. Specialty Construction Chemicals ("SCC") manufactures and markets concrete admixtures and cement additives. Specialty Building Materials ("SBM") manufactures and markets sheet and liquid membrane systems that protect structures from water, air and vapor penetration, fireproofing and other products designed to protect the building envelope. Darex Packaging Technologies ("Darex") manufactures and markets packaging materials for use in beverage and food containers, industrial containers and other consumer and industrial applications. Prior to the Separation, we operated as the Grace Construction Products operating segment and the Darex Packaging Technologies business of W.R. Grace & Co. The Separation was completed pursuant to various agreements with Grace related to the Separation. These agreements govern the relationship between GCP and Grace following the Separation and provided for the allocation of various assets, liabilities, rights and obligations. These agreements also include arrangements for transition services to be provided on a temporary basis by both parties. Basis of Presentation The financial statements for periods prior to the Separation have been prepared on a stand-alone basis and are derived from the consolidated financial statements and accounting records of Grace, as our business operated as a combination of entities under common control of Grace. These financial statements reflect the historical basis and carrying values established when the Company was part of Grace. Subsequent to the Separation, the accompanying Consolidated Financial Statements are presented on a consolidated basis and include all of the accounts and operations of GCP and its majority-owned subsidiaries. The financial statements reflect the financial position, results of operations and cash flows of GCP in accordance with generally accepted accounting principles in the United States of America ("GAAP") for interim financial information. The financial statements presented herein are unaudited and should be read in conjunction with the Combined Financial Statements presented in the Company's 2015 Annual Report on Form 10-K. Such 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 period ended March 31, 2016 are not necessarily indicative of the results of operations for the year ending December 31, 2016 . All transactions between GCP and Grace have been included in these financial statements. Prior to the Separation, all such transactions are considered to be effectively settled for cash, other than intercompany loan transactions, in the Combined Financial Statements at the time the transaction was recorded . The intercompany loans payable to Grace, related interest thereon, and related cash flows, as presented in Note 3 were reflected in Statements of Cash Flows as "Borrowings under related party loans" and "Repayments of related party loans," in the Balance Sheets as "Loans payable-related party" and in the Statements of Operations as "Interest income, net-related party." Subsequent to the Separation, Grace is no longer a related party of the Company. Prior to the Separation, the financial statements included expenses of Grace allocated to GCP for certain functions provided by Grace, including, but not limited to, general corporate expenses related to finance, legal, information technology, human resources, communications, ethics and compliance, environment health and safety, supply chain, shared services, employee benefits and incentives, insurance and stock-based compensation. These expenses were allocated to GCP on the basis of direct usage when identifiable, with the remainder allocated on the basis of revenue, headcount or other measures. These cost allocations were included in selling, general and administrative expenses in the Statement of Operations. Most of these costs were included in segment operating income with only a portion included in corporate costs. Both GCP and Grace consider the basis on which the expenses have been allocated to be a reasonable reflection of the utilization of services provided to, or the benefit received by, GCP during the periods presented. Subsequent to the Separation, GCP has performed most of these functions using its own resources or purchased services. However, the remainder of these functions will continue to be provided by Grace under a transition services agreement, for a period generally up to 18 months from the Separation. See Note 12 for further description of the transition services agreement between GCP and Grace. Prior to the Separation, the financial statements also included the assets and liabilities that were historically held at the Grace corporate level but were specifically identifiable or otherwise pushed down to GCP. The cash and cash equivalents held by Grace at the corporate level were not specifically identifiable to GCP and therefore were not allocated to GCP for any of the periods presented. Prior to the Separation, cash and cash equivalents in the Balance Sheets represent primarily cash held locally by entities included in the financial statements. Third-party debt and the related interest expense of Grace were not allocated to GCP for any of the periods presented as GCP is not the legal obligor of the debt and the Grace borrowings were not directly attributable to GCP's business. The financial statements exclude all assets, liabilities, income, gains, costs and expenses reported by Grace related to asbestos and bankruptcy matters. Prior to the Separation, these matters were not allocated to GCP as Grace is the legal obligor for those liabilities and Grace is expected to pay all future liabilities and costs related to such matters as such matters were not historically managed by GCP. Grace retained full responsibility for these matters following the Separation and GCP has not indemnified Grace for any losses or payments associated with these matters. Prior to the Separation, Grace used a centralized approach to cash management and financing of its operations and Grace funded GCP's operating and investing activities as needed. Prior to the Separation, cash transfers to and from the cash management accounts of Grace are reflected in the Statements of Cash Flows as “Transfers to parent, net.” Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount 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. GCP's accounting measurements that are most affected by management's estimates of future events are: • Contingent liabilities, which depend on an assessment of the probability of loss and an estimate of ultimate resolution cost, such as material commitments (see Note 7 to the Consolidated Financial Statements) and income taxes (see Note 4 to the Consolidated Financial Statements); • Pension and postretirement liabilities that depend on assumptions regarding participant life spans, future inflation, discount rates and total returns on invested funds (see Note 5 to the Consolidated Financial Statements); and • Realization values of net deferred tax assets, which depend on projections of future taxable income (see Note 4 to the Consolidated Financial Statements). Reclassifications Certain amounts in prior year's financial statements have been reclassified to conform to the current year presentation. Such reclassifications have not materially affected previously reported amounts in the financial statements. Revisions Certain prior period amounts related to borrowings and repayments under credit arrangements reported as financing activities on the Consolidated Statements of Cash Flows have been revised. For the three months ended March 31, 2015, borrowings and repayments under certain credit facilities of $3.3 million were previously netted within cash flows from financing activities. GCP concluded that these revisions were not material to the previously issued Combined Financial Statements. Income Tax As a global enterprise, GCP is subject to a complex array of tax regulations and must make assessments of applicable tax law and judgments in estimating its ultimate income tax liability. In the financial statements for periods prior to the Separation, income tax expense and tax balances were calculated using the separate return method as if GCP was a separate taxpayer, although GCP was included in tax returns filed by Grace. After the Separation, income tax expense and income tax balances represent GCP’s federal, state and foreign income taxes as an independent company. As a stand-alone entity, GCP will file tax returns on its own behalf and its deferred taxes and effective tax rate may not be comparable to those in historical periods. See Note 4 for details regarding estimates used in accounting for income tax matters including unrecognized tax benefits. Stock-Based Compensation Expense Prior to the Separation, GCP was allocated stock-based compensation expense from Grace related to GCP employees receiving awards denominated in Grace equity instruments. In accordance with an employee matters agreement entered into between Grace and GCP on January 27, 2016 in connection with the Separation (the "Employee Matters Agreement"), previously outstanding stock-based compensation awards granted under Grace's equity compensation programs prior to the Separation and held by certain executives and employees of GCP and Grace were adjusted to reflect the impact of the Separation on these awards. To preserve the aggregate intrinsic value of these stock-based compensation awards, as measured immediately before and immediately after the Separation, each holder of Grace stock-based compensation awards generally received an adjusted award consisting of either (i) both a stock-based compensation award denominated in Grace equity as it existed subsequent to the Separation and a stock-based compensation award denominated in GCP equity or (ii) solely a stock-based compensation award denominated in the equity of the company at which the person was employed following the Separation. In the Separation, the determination as to which type of adjustment applied to a holder’s previously outstanding Grace award was based upon the type of stock-based compensation award that was to be adjusted and the date on which the award was originally granted under the Grace equity compensation programs prior to the Separation. Under the Employee Matters Agreement, GCP retains certain obligations related to all stock- and cash-settled stock-based compensation awards denominated in GCP equity, regardless of whether the holder is a GCP employee. Following the Separation, we record stock-based compensation expense for equity awards in accordance with authoritative accounting guidance. Currency Translation Assets and liabilities of foreign subsidiaries (other than those located in countries with highly inflationary economies) are translated into U.S. dollars at current exchange rates, while revenues, costs and expenses are translated at average exchange rates during each reporting period. The resulting translation adjustments are included in "accumulated other comprehensive loss" in the Balance Sheets. The financial statements of any subsidiaries located in countries with highly inflationary economies are remeasured as if the functional currency were the U.S. dollar; the remeasurement creates translation adjustments that are reflected in net income in the Statements of Operations. Effective January 1, 2010, we began to account for Venezuela as a highly inflationary economy. As a result, the functional currency of our Venezuelan subsidiary became the U.S. dollar; therefore, all translation adjustments are reflected in net income in the accompanying Consolidated Statements of Operations. The official exchange rate (CENCOEX) of 4.3 was used to remeasure our financial statements from bolivars to U.S. dollars upon Venezuela's designation as a highly inflationary economy. On February 8, 2013, the Venezuelan government announced that, effective February 13, 2013, the official exchange rate of the bolivar to U.S. dollar would devalue from 4.3 to 6.3 . GCP continued to account for its results in Venezuela at the official exchange rate of 6.3 bolivars to one U.S. dollar until September 30, 2015. Based on developments in the third quarter of 2015, including changed expectations about GCP's ability to import raw materials into Venezuela at the official exchange rate and increased inflation, the Company determined that it was no longer appropriate to use the official exchange rate. Effective September 30, 2015, the Company began accounting for its results in Venezuela at the SIMADI rate. The Company recorded a pre-tax charge of $73.2 million in the third quarter of 2015 to reflect the devaluation of monetary assets and the impairment of non-monetary assets at the SIMADI rate of 199 bolivars to one U.S. dollar. In mid-February 2016, changes to the currency exchange systems were announced which eliminated the SICAD exchange rate and replaced the name SIMADI rate with DICOM, which is expected to be a floating exchange rate. The DICOM rate was 251 bolivars to one U.S. dollar at the end of the first quarter 2016, a 25% increase from the SIMADI rate used as of the end of the fourth quarter of 2015. Accordingly, in the first quarter of 2016, the Company recorded a $0.9 million loss in the Consolidated Statements of Operations to reflect the further devaluation of the net monetary and non-monetary asset position using the DICOM rate. Effect of New Accounting Standards In May 2014, the FASB issued ASU 2014-09 "Revenue from Contracts with Customers." This update is 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. The new requirements were to be effective for fiscal years beginning after December 15, 2016, and for interim periods within those fiscal years, with early adoption not permitted. In August 2015, the FASB issued ASU 2015-14 "Revenue from Contracts with Customers—Deferral of the Effective Date," deferring the effective date by one year but permitting adoption as of the original effective date. The revised standard allows for two methods of adoption: (a) full retrospective adoption, meaning the standard is applied to all periods presented, or (b) modified retrospective adoption, meaning the cumulative effect of applying the new standard is recognized as an adjustment to the opening retained earnings balance. GCP does not intend to adopt the standard early and is in the process of determining the adoption method as well as the effects the adoption will have on the Consolidated Financial Statements. In April 2015, the FASB issued ASU 2015-03 "Simplifying the Presentation of Debt Issuance Costs." This update is part of the FASB's Simplification Initiative and is also intended to enhance convergence with the IASB's treatment of debt issuance costs. The update requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. GCP adopted this standard for the first quarter 2016. See Footnote 3, Debt and Other Financial Instruments for the effect these ASU's had on the Consolidated Financial Statements. In August 2015, the FASB issued ASU 2015-15 "Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements." The update clarifies ASU 2015-03, allowing debt issuance costs related to line of credit arrangements to be deferred and presented as an asset and subsequently amortized ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The new requirements are effective for fiscal years beginning after December 15, 2015, and for interim periods within those fiscal years, with early adoption permitted. GCP adopted this standard for the first quarter 2016. See Footnote 3, Debt and Other Financial Instruments for the effect these ASU's had on the Consolidated Financial Statements. In July 2015, the FASB issued ASU 2015-11 "Simplifying the Measurement of Inventory." This update is part of the FASB's Simplification Initiative and is also intended to enhance convergence with the IASB's measurement of inventory. The update requires that inventory be measured at the lower of cost and net realizable value for entities using FIFO or average cost methods. The new requirements are effective for fiscal years beginning after December 15, 2016, and for interim periods within fiscal years beginning after December 31, 2016, with early adoption permitted. GCP is currently evaluating its effect on the Consolidated Financial Statements and the timing of adoption. In February 2016, the FASB issued ASU 2016-02 "Leases." 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. The amendments in this update are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. GCP is currently evaluating its effect on the Consolidated Financial Statements and the timing of adoption. In March 2016, the FASB issued ASU 2016-09 “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”). The standard is intended to simplify several areas of accounting for share-based compensation arrangements, including the income tax impact, classification on the statement of cash flows and forfeitures. ASU 2016-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, and early adoption is permitted. GCP is currently evaluating the impact that the standard will have on its Consolidated Financial Statements. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories are stated at the lower of cost or market, and cost is determined using FIFO. Inventories consisted of the following at March 31, 2016 , and December 31, 2015 : (In millions) March 31, December 31, Raw materials $ 42.8 $ 39.1 In process 5.6 6.2 Finished products 53.1 51.3 Other 9.3 8.7 Total inventories $ 110.8 $ 105.3 |
Debt and Other Financial Instru
Debt and Other Financial Instruments | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Debt and Other Financial Instruments | Debt and Other Financial Instruments Components of Debt (In millions) March 31, December 31, 9.5% Senior Notes due 2023, net of unamortized debt issuance costs of $7.8 at March 31, 2016 $ 517.2 $ — Term Loan due 2022, net of unamortized discount of $2.7 and unamortized debt issuance costs of $4.9 at March 31, 2016 (1) 267.4 — Related party — 42.3 Other borrowings (2) 31.6 25.7 Total debt 816.2 68.0 Less debt payable within one year 32.0 68.0 Debt payable after one year $ 784.2 $ — Weighted average interest rates on related party debt — % 3.3 % Weighted average interest rates on total debt 8.1 % 11.9 % __________________________ (1) Interest at LIBOR + 450 bps with a 75 bps LIBOR floor at March 31, 2016 . (2) Represents borrowings under various lines of credit and other borrowings, primarily by non-U.S. subsidiaries. The principal maturities of debt outstanding (net of unamortized discounts and debt issuance costs) at March 31, 2016 , were as follows: (In millions) 2016 $ 32.0 2017 3.4 2018 3.4 2019 3.4 2020 3.4 Thereafter 770.6 Total debt $ 816.2 Credit Agreement On February 3, 2016, GCP entered into a Credit Agreement (the “Credit Agreement”) that provides for new senior secured credit facilities (the “Credit Facilities”) in an aggregate principal amount of $525.0 million , consisting of: (a) term loans (the “Term Loans”) in an aggregate principal amount of $275.0 million maturing in 2022; and (b) $250.0 million revolving credit facility (the "Revolving Loans") due in 2021. The Term Loans 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 legal existence and compliance with laws and regulations; (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; (vi) transactions with affiliates; and (vii) a maximum total leverage ratio. The Credit Agreement contains conditions that would require mandatory principal payments in advance of the Term Loans maturity date; we were in compliance with all terms as of March 31, 2016 . 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. There are no events of default as of March 31, 2016. The Credit Facilities are secured on a first priority basis by a perfected security in, and mortgages on, substantially all tangible and intangible personal property and material fee-owned real property (including properties in Chicago, Illinois and Mount Pleasant, Tennessee) of the Company, a pledge of 100% of the equity of each material U.S. subsidiary of the Company and 65% of the equity of the United Kingdom holding company. The interest rate per annum applicable to the Term Loans is equal to, at GCP’s option, either a base rate plus a margin of 3.5% or LIBOR plus a margin of 4.5% . The interest rate per annum applicable to the Revolving Loans is equal to, at GCP’s option, either a base rate plus a margin ranging from 0.5% to 1.0% or LIBOR plus a margin ranging from 1.5% to 2.0% , in either case based upon the total leverage ratio of GCP and its restricted subsidiaries. As of March 31, 2016 , the Revolving Loans do not have an outstanding balance. Certain debt covenants may restrict the entity's ability as it relates to dividends, acquisitions and other borrowings. GCP had no outstanding draws on the Revolving Loans as of March 31, 2016 ; however, the available credit under that facility was reduced to $247.4 million by outstanding letters of credit. Senior Notes On January 27, 2016, GCP issued $525.0 million aggregate principal amount of 9.5% Senior Notes due 2023 (the “Notes”). Interest is payable semi-annually in arrears on February 1 and August 1 of each year, commencing on August 1, 2016. The Notes were issued subject to covenants that limit the Issuer’s and certain of its subsidiaries’ ability, subject to certain exceptions and qualifications, to (i) create or incur liens on assets, (ii) incur additional debt (iii) sell certain assets (iv) make certain investments and acquisitions, merge or sell or otherwise dispose of all or substantially all assets. During the first quarter of 2016, GCP incurred debt issuance costs relating to the Notes, Term Loans, and Revolving Loans of $8.0 million , $5.0 million and $5.2 million , respectively. The debt issuance costs relating to the Notes and the Term Loans were deducted from the carrying amount of their debt liabilities on the balance sheet and are being amortized over the term of their respective debt obligations. Debt issuance costs incurred relating to the Revolving Loans are classified as an asset in the "Other assets" caption on the balance sheet and are being amortized over the term of the Revolver Loans. The unamortized portion of these costs as of March 31, 2016 was $5.1 million . During the first quarter of 2016, GCP used certain proceeds from the Notes and Credit Facilities to fund a distribution to Grace in an amount of $750.0 million related to the Separation. Approximately $50 million was retained to meet operating requirements and to pay fees associated with the debt financing and other costs of the Separation that may be incurred subsequent to the Separation. Related party debt of approximately $42 million and related interest was transferred from Grace to GCP in connection with the Separation. Debt Fair Value At March 31, 2016 , the carrying amounts and fair values of GCP's debt were as follows: March 31, 2016 December 31, 2015 (In millions) Carrying Amount Fair Value Carrying Amount Fair Value 9.5% Senior Notes due 2023 $ 517.2 572.3 $ — $ — Term Loan due 2022 267.4 276.4 — — Other borrowings 31.6 31.6 68.0 68.0 Total debt $ 816.2 $ 880.3 $ 68.0 $ 68.0 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. The increase in fair value of the senior notes since issuance was driven by favorable demands in the marketplace. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The annualized effective tax rate on 2016 forecasted income from continuing operations is estimated to be 33.5% as of March 31, 2016, compared with 67.3% for the year ended December 31, 2015. The 2016 forecasted annual effective tax rate includes a tax benefit of $7.6 million (decrease of 5.6% of forecasted pretax income) for lower tax rates in foreign jurisdictions and a tax provision of $3.0 million (increase of 2.2% of forecasted pretax income) for state income taxes, net of the related federal tax benefit. The 2015 annual effective tax rate includes a tax provision of $24.7 million (increase of 19.7% of pretax income) for a nondeductible charge related to Venezuela, a tax provision of $19.9 million (increase of 15.9% of pretax income) for the U.S. tax cost on repatriation of foreign earnings, a tax benefit of $8.0 million (decrease of 6.4% of pretax income) for lower tax rates in foreign jurisdictions and a tax provision of $6.3 million (increase of 5.0% of pretax income) for state income taxes, net of the related federal benefit. For the period ended March 31, 2016, GCP recorded an out-of-period uncertain tax position that resulted in a $2.7 million increase to the provision for income taxes. This adjustment is not material to the first quarter of 2016 or any prior period financial statements and is not expected to be material to the full year 2016 results. As discussed in Note 1, on February 3, 2016 the Separation of Grace and GCP was completed. In conjunction with the Separation, GCP has increased its deferred tax assets in the U.S. by approximately $68 million mainly related to the step up in tax basis and transfer of a net pension liability in the first quarter of 2016. In evaluating GCP's ability to realize its deferred tax assets, GCP considers all reasonably available positive and negative evidence, including recent earnings experience, expectations of future taxable income and the tax character of that income, the period of time over which the temporary differences become deductible and the carryforward and/or carryback periods available to GCP for tax reporting purposes in the related jurisdiction. In estimating future taxable income, GCP relies upon assumptions and estimates about future activities, including the amount of future federal, state and international pretax operating income that GCP will generate; the reversal of temporary differences; and the implementation of feasible and prudent tax planning strategies. GCP records a valuation allowance to reduce deferred tax assets to the amount that it believes is more likely than not to be realized. At December 31, 2014, we had the intent and ability to indefinitely reinvest undistributed earnings of our foreign subsidiaries outside the United States. In connection with the Separation, Grace repatriated a total of $173.1 million of foreign earnings from foreign subsidiaries transferred to GCP pursuant to the Separation. Such amount was determined based on an analysis of each non-U.S. subsidiary's requirements for working capital, debt repayment and strategic initiatives. In 2015, on a stand-alone basis (see Basis of Presentation), GCP included tax expense of $19.9 million in its effective tax rate for such repatriation attributable to both current and prior years' earnings. The tax effect of the repatriation is determined by several variables including the tax rate applicable to the entity making the distribution, the cumulative earnings and associated foreign taxes of the entity and the extent to which those earnings may have already been taxed in the U.S. GCP believes that the Separation is a one -time, non-recurring event and that recognition of deferred taxes of undistributed earnings during 2015 would not have occurred if not for the Separation. Subsequent to Separation, GCP expects undistributed prior-year earnings of its foreign subsidiaries to remain permanently reinvested except in certain instances where repatriation of such earnings would result in minimal or no tax. GCP bases this assertion on: (1) the expectation that it will satisfy its U.S. cash obligations in the foreseeable future without requiring the repatriation of prior-year foreign earnings; (2) plans for significant and continued reinvestment of foreign earnings in organic and inorganic growth initiatives outside the U.S.; and (3) remittance restrictions imposed by local governments. GCP will continually analyze and evaluate its cash needs to determine the appropriateness of its indefinite reinvestment assertion. In connection with the Separation, GCP and Grace entered into various agreements that govern the relationship between the parties going forward, including a tax matters agreement. The tax matters agreement was entered into on the distribution date. Under the tax matters agreement, GCP and Grace will indemnify and hold each other harmless in accordance with the principles outlined in the tax matters agreement. |
Pension Plans and Other Postret
Pension Plans and Other Postretirement Benefit Plans | 3 Months Ended |
Mar. 31, 2016 | |
Pension and Other Postretirement Benefit Expense [Abstract] | |
Pension Plans and Other Postretirement Benefit Plans | Pension Plans and Other Postretirement Benefit Plans Multiemployer Benefit Plans Prior to the Separation, Grace sponsored funded and unfunded defined benefit pension and other postretirement benefit plans in which GCP employees and employees from other Grace businesses participated in (the “Shared Plans”). For purposes of the Combined Financial Statements in periods prior to the Separation, the Shared Plans were accounted for as multiemployer benefit plans. Accordingly, GCP did not record an asset or liability to recognize the funded status of these Shared Plans in the Balance Sheet prior to the Separation. In the fourth quarter of 2015, in preparation for the Separation, certain international pension plans were legally separated. Previously, the funded status of these Shared Plans was not reflected on GCP’s balance sheet as the plans were accounted for as multiemployer benefit plans. Upon legal separation of these international plans in 2015, GCP recorded the funded status as of December 31, 2015, resulting in an approximate $4 million increase to net pension liabilities. During the first quarter of 2016, certain Shared Plans in the U.S. were legally separated, resulting in an approximate $44 million increase to net pension liabilities on the Consolidated Balance Sheet as of March 31, 2016. The funded status of these plans as of March 31, 2016, is included in the Net Funded Status table below. GCP’s allocated pension expense for the Shared Plans was $0.9 million for the three months ended March 31, 2015. The related expense for the three months ended March 31, 2016 is included in the Components of Net Periodic Benefit Cost (Income) table below. Postretirement Benefits Other Than Pensions Grace provided postretirement life insurance benefits for retired employees of certain U.S. business units and certain divested business units. GCP’s allocated income for these postretirement life insurance benefits plan was $0.4 million for the three months ended March 31, 2015. In the first quarter of 2016, the postretirement life insurance benefits plan liability related to GCP employees who were participants in this plan at the time of Separation was legally transferred to GCP, resulting in an increase of $0.1 million to other liabilities. Additionally as part of the Separation, GCP assumed $0.8 million of prior service credit and $0.7 million of actuarial losses, both net of tax as part of the transfer. Pension Plans GCP sponsors certain defined benefit pension plans, primarily in the U.S . and the United Kingdom in which GCP employees participate. GCP records an asset or liability to recognize the funded status of these pension plans in its Consolidated Balance Sheets. The Shared Plans that were legally separated during the first quarter of 2016, as discussed under "Multiemployer Benefit Plans" above, resulted in an approximate $44 million increase to pension liabilities, and are included in the net funded status and net periodic benefit cost as of March 31, 2016. The following table presents the funded status of GCP's overfunded, underfunded and unfunded pension plans: (In millions) March 31, December 31, Overfunded defined benefit pension plans $ 25.5 $ 26.1 Underfunded defined benefit pension plans (46.4 ) (8.0 ) Unfunded defined benefit pension plans (34.4 ) (26.0 ) Total underfunded and unfunded defined benefit pension plans (80.8 ) (34.0 ) Pension liabilities included in other current liabilities (1.2 ) (1.1 ) Net funded status $ (56.5 ) $ (9.0 ) Overfunded plans include several advance-funded plans where the fair value of the plan assets exceeds the projected benefit obligation ("PBO"). This group of plans was overfunded by $25.5 million as of March 31, 2016 , and the overfunded status is reflected as assets in "overfunded defined benefit pension plans" in the Consolidated Balance Sheets. Underfunded plans include a group of advance-funded plans that are underfunded on a PBO basis. Unfunded plans include several plans that are funded on a pay-as-you-go basis, and therefore, the entire PBO is unfunded. As of March 31, 2016 , the combined balance of $82.0 million for the underfunded and unfunded plans included as liabilities in the Consolidated Balance Sheets is comprised of current and non-current components of $1.2 million in "other current liabilities" and $80.8 million in "underfunded and unfunded defined benefit pension plans", respectively. Components of Net Periodic Benefit Cost (Income) Three Months Ended March 31, 2016 2015 Pension Other Post Retirement Pension Other Post Retirement (In millions) U.S. Non-U.S. U.S. Non-U.S. Service cost $ 1.5 $ 0.9 $ — $ 0.1 $ 0.8 $ — Interest cost 1.2 2.1 — 0.1 2.3 — Expected return on plan assets (1.2 ) (2.3 ) — (0.2 ) (2.8 ) — Amortization of prior service (credit) cost — — (0.1 ) — 0.1 — Net periodic benefit cost (income) (1) $ 1.5 $ 0.7 $ (0.1 ) $ — $ 0.4 $ — ___________________________________ (1) Includes expense that was allocated to Grace of $0.1 million for the three months ended March 31, 2015. Plan Contributions and Funding GCP 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 GAAP. In March 2016, GCP made an accelerated contribution to the trusts that hold assets of the U.S. qualified pension plans of approximately $1 million . GCP intends to fund non-U.S. pension plans based on applicable legal requirements as well as actuarial and trustee recommendations. Defined Contribution Retirement Plan As part of the Separation, GCP established a defined contribution retirement plan for its employees in the United States, similar in design to the Grace defined contribution retirement plan. This plan is qualified under section 401(k) of the U.S. tax code. Currently, GCP contributes an amount equal to 100% of employee contributions, up to 6% of an individual employee's salary or wages. For the three months ended March 31, 2015, GCP received an allocation of the total cost related to this benefit plan of $1.4 million . GCP’s costs related to this benefit plan for the three months ended March 31, 2016 were $1.1 million . |
Other Balance Sheet Accounts
Other Balance Sheet Accounts | 3 Months Ended |
Mar. 31, 2016 | |
Payables and Accruals [Abstract] | |
Other Balance Sheet Accounts | Other Balance Sheet Accounts (In millions) March 31, December 31, Other Current Liabilities Customer volume rebates $ 28.1 $ 33.5 Accrued compensation (1) 25.5 27.1 Income tax payable (2) 15.8 23.3 Accrued interest 9.0 3.9 Pension liabilities 1.2 1.1 Other accrued liabilities 41.4 36.6 Total other current liabilities $ 121.0 $ 125.5 ________________________________ (1) Accrued compensation in the table above includes salaries and wages as well as estimated current amounts due under the annual and long-term incentive programs. (2) Income tax items above do not include amounts due from/to Grace. |
Commitments and Contingent Liab
Commitments and Contingent Liabilities | 3 Months Ended |
Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingent Liabilities | Commitments and Contingent Liabilities Purchase Commitments GCP uses purchase commitments to ensure supply and to minimize the volatility of certain key raw materials including lignins, polycarboxylates, amines and other materials. Such commitments are for quantities that GCP fully expects to use in its normal operations. Guarantees and Indemnification Obligations GCP 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. GCP accrues a warranty liability on a transaction-specific basis depending on the individual facts and circumstances related to each sale. Both the liability and annual expense related to product warranties are immaterial to the Consolidated Financial Statements. • Performance guarantees offered to customers. GCP has not established a liability for these arrangements based on past performance. • Contracts providing for the sale of a former business unit or product line in which GCP has agreed to indemnify the buyer against liabilities arising prior to the closing of the transaction, including environmental liabilities. • A tax sharing agreement with Grace, entered into in connection with the Separation, which may require GCP, in certain circumstances, to indemnify Grace if the Separation, together with certain related transactions, does not qualify under Sections 368(a)(1)(D) and 355 of the Internal Revenue Code (the "Code"). If GCP is required to indemnify Grace under the tax sharing agreement, it could be subject to significant tax liabilities. Environmental Remediation GCP is subject to loss contingencies resulting from extensive and evolving federal, state, local and foreign environmental laws and regulations relating to the generation, storage, handling, discharge, disposition and stewardship of hazardous wastes and other materials. GCP accrues for anticipated costs associated with response efforts where an assessment has indicated that a probable liability has been incurred and the cost can be reasonably estimated. As of March 31, 2016, GCP did not have any material environmental liabilities. GCP's environmental liabilities are reassessed whenever circumstances become better defined or response efforts and their costs can be better estimated. These liabilities are evaluated based on currently available information, including the progress of remedial investigation at each site, the current status of discussions with regulatory authorities regarding the method and extent of remediation at each site, existing technology, prior experience in contaminated site remediation and the apportionment of costs among potentially responsible parties. 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, 2016, GCP had gross financial assurances issued and outstanding of $2.6 million , composed of standby letters of credit and other financial assurances issued by various banks. General From time to time, GCP and its subsidiaries are parties to, or targets of, lawsuits, claims, investigations and proceedings which are managed and defended in the ordinary course of business. While GCP is unable to predict the outcome of these matters, the Company does not believe, based upon currently available facts, that the ultimate resolution of any of such pending matters will have a material adverse effect on its overall financial condition, results of operations or cash flows. Accounting for Contingencies Although the outcome of each of the matters discussed above cannot be predicted with certainty, GCP has assessed its risk and has made accounting estimates and disclosures as required under GAAP. |
Restructuring and Repositioning
Restructuring and Repositioning Expenses | 3 Months Ended |
Mar. 31, 2016 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Expenses and Repositioning Expenses | Restructuring and Repositioning Expenses Restructuring Expenses GCP incurs costs from restructuring actions as a result of changes in the business environment and its business structure. Restructuring expenses are excluded from segment operating income. GCP incurred $0.9 million ( $0.5 million in Specialty Construction Chemicals and $0.4 million in Specialty Building Materials) of restructuring expenses during first quarter of 2016, compared with $4.3 million ( $2.7 million in Specialty Construction Chemicals, $0.9 million in Specialty Building Materials and $0.7 million Darex Packaging Technologies) during the first quarter of 2015. GCP had restructuring liabilities of $2.0 million and $1.4 million as of March 31, 2016 and December 31, 2015, respectively related to severance actions taken during the periods. The majority of the severance expense was paid in the year it was incurred. Substantially all costs related to the remaining restructuring programs are expected to be paid by December 31, 2016. Restructuring Liability (In millions) Total Balance, December 31, 2015 $ 1.4 Accruals for severance and other costs 0.9 Payments (1.8 ) Currency translation adjustments and other 1.5 Balance, March 31, 2016 $ 2.0 Repositioning Expenses Post-Separation, GCP expects to incur expenses related to the transition to becoming a stand-alone public company. These costs are expected to range from $10.0 million to $15.0 million with substantially all of these expenses expected to be incurred within 12 months of the Distribution date. These repositioning expenses primarily relate to the following: • accounting, tax, legal and other professional costs pertaining to the Separation and establishment as a stand-alone public company; • costs relating to information technology systems; • employee-related costs that would not be incurred absent the Separation primarily relating to compensation, benefits, retention bonuses related to new or transitioning employees; and • recruiting and relocation costs associated with hiring and relocating employees. Due to the scope and complexity of these activities, the amount of these estimated costs could increase or decrease and the timing of incurrence could change. In the first quarter , GCP incurred repositioning expenses of $4.3 million , as follows: Repositioning expense (In millions) Three Months Ended March 31, 2016 Professional fees $ 2.1 Employee-related costs 2.2 Total $ 4.3 Substantially all of these costs have been or are expected to be settled in cash. Total cash payments for the quarter ended March 31, 2016 were $3.9 million for professional fees and employee-related costs, $0.9 million for capital expenditures and $5.9 million for taxes. |
Other Comprehensive Income (Los
Other Comprehensive Income (Loss) | 3 Months Ended |
Mar. 31, 2016 | |
Equity [Abstract] | |
Other Comprehensive Income (Loss) | Other Comprehensive Income (Loss) The following tables present the pre-tax, tax, and after-tax components of GCP's other comprehensive income (loss) for the three months ended March 31, 2016 and 2015 : Three Months Ended March 31, 2016 Pre-Tax Amount Tax Benefit/ (Expense) After-Tax Amount Defined benefit pension and other postretirement plans: Amortization of net prior service cost included in net periodic benefit cost $ (0.1 ) $ — $ (0.1 ) Assumption of net prior service credit 1.2 (0.4 ) 0.8 Assumption of net actuarial loss (1.1 ) 0.4 (0.7 ) Benefit plans, net — — — Currency translation adjustments 3.9 — 3.9 Loss from hedging activities (0.2 ) — (0.2 ) Other comprehensive income attributable to GCP shareholders $ 3.7 $ — $ 3.7 Three Months Ended March 31, 2015 Pre-Tax Amount Tax Benefit/ (Expense) After-Tax Amount Defined benefit pension and other postretirement plans: Amortization of net prior service cost included in net periodic benefit cost 0.1 (0.1 ) — Benefit plans, net 0.1 (0.1 ) — Currency translation adjustments (29.6 ) — (29.6 ) Gain from hedging activities 0.2 (0.1 ) 0.1 Other comprehensive loss attributable to GCP shareholders $ (29.3 ) $ (0.2 ) $ (29.5 ) The following tables present the changes in accumulated other comprehensive income (loss), net of tax, for the three months ended March 31, 2016 and 2015 : Three Months Ended March 31, 2016 Defined Benefit Pension and Other Postretirement Plans Currency Translation Adjustments Gain (Loss) from Hedging Activities Total Beginning balance $ 0.1 $ (127.8 ) $ — $ (127.7 ) Other comprehensive income before reclassifications 0.1 3.9 (0.5 ) 3.5 Amounts reclassified from accumulated other comprehensive income (0.1 ) — 0.3 0.2 Net current-period other comprehensive income (loss) — 3.9 (0.2 ) 3.7 Ending balance $ 0.1 $ (123.9 ) $ (0.2 ) $ (124.0 ) Three Months Ended March 31, 2015 Defined Benefit Pension and Other Postretirement Plans Currency Translation Adjustments Gain (Loss) from Hedging Activities Total Beginning balance $ (0.3 ) $ (47.7 ) $ (0.2 ) $ (48.2 ) Other comprehensive income before reclassifications — (29.6 ) (0.1 ) (29.7 ) Amounts reclassified from accumulated other comprehensive income — — 0.2 0.2 Net current-period other comprehensive (loss) income — (29.6 ) 0.1 (29.5 ) Ending balance $ (0.3 ) $ (77.3 ) $ (0.1 ) $ (77.7 ) GCP is a global enterprise operating in over 40 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 5 for a discussion of pension plans and other postretirement benefit plans. |
Stock Incentive Plans
Stock Incentive Plans | 3 Months Ended |
Mar. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Incentive Plans | Stock Incentive Plans The Company has provided certain key employees equity awards in the form of Stock Options, Performance Based Units (“PBUs”) and Restricted Share Units (“RSUs”) under the GCP 2016 Stock Incentive Plan, which was adopted at Separation. Certain employees and members of the Board of Directors are eligible to receive stock-based benefits, including stock, stock options, RSUs, and PBUs. Total cash and non-cash stock-based compensation cost included in the Consolidated Statements of Operations is $1.2 million for the three months ended March 31, 2016 and $0.8 million for the three months ended March 31, 2015. Stock-based compensation expense prior to the Separation was allocated to GCP based on the portion of Grace’s equity compensation programs in which GCP employees participated. In accordance with the Employee Matters Agreement, in connection with the Separation, previously outstanding stock-based compensation awards granted under Grace’s equity compensation programs prior to the Separation and held by certain executives and employees of GCP and Grace were adjusted to reflect the impact of the Separation on these awards. To preserve the aggregate intrinsic value of Grace awards held prior to the Separation, as measured immediately before and immediately after the Separation, each holder of Grace stock-based compensation awards generally received an adjusted award consisting of either (i) both a stock-based compensation award denominated in Grace equity as it existed subsequent to the Separation and a stock-based compensation award denominated in GCP equity or (ii) solely a stock-based compensation award denominated in the equity of the company at which the person was employed following the Separation. In the Separation, the determination as to which type of adjustment applied to a holder’s previously outstanding Grace award was based upon the type of stock-based compensation award that was to be adjusted and the date on which the award was originally granted under the Grace equity compensation programs prior to the Separation. Adjusted awards consisting of stock-based compensation awards denominated in GCP equity are considered issued under the GCP 2016 Stock Incentive Plan. These adjusted awards generally will be subject to the same vesting conditions and other terms that applied to the original Grace award to which these adjusted awards relate, before the Separation. Under the Employee Matters Agreement, the Company is obligated to settle all of the stock-based compensation awards denominated in GCP equity, regardless of whether the holders are GCP employees or Grace employees. Likewise, Grace is obligated to settle all of the stock-based compensation awards denominated in Grace shares, regardless of whether the holders are GCP employees or Grace employees. As a result, GCP has recorded a liability for cash-settled awards held by Grace employees. The adjustment of the original Grace awards that resulted in the issuance of GCP stock-based compensation awards resulted in an immaterial charge in the first quarter of 2016. In accordance with certain provisions of the GCP 2016 Stock Incentive Plan, the Company repurchases shares issued to certain holders of GCP awards in order to fulfill statutory tax withholding requirements for the employee. In the quarter ended March 31, 2016, the Company repurchased approximately 84,000 shares under these provisions. These purchases were reflected as treasury stock purchased under 2016 Stock Incentive Plan in the Consolidated Statement of (Deficit) Equity. As of March 31, 2016, 1,734,650 shares of common stock are available for issuance under the GCP 2016 Stock Incentive Plan. Stock Options Stock options are non-qualified and are set at exercise prices not less than 100% of the market value on the date of grant (market value is the average of the high price and low price from that trading day). GCP stock option awards provided prior to Separation have a contractual term of 5 years from the date of grant. Stock option awards that relate to Grace stock options originally granted post-Separation have a contractual term of 7 years from the original date of grant. Generally, stock options vest in substantially equal amounts each year over three years from the date of grant. GCP values stock options using the Black-Scholes option pricing model, which was developed for use in estimating the fair value of traded options. The risk-free rate is based on the U.S. Treasury yield curve published as of the grant date, with maturities approximating the expected term of the options. The expected term of the options is estimated using the simplified method as allowed by ASC 718-20, whereby the average between the vesting period and contractual term is used. The expected volatility was estimated using the volatility of an industry peer group. The following summarizes the assumptions used for estimating the fair value of stock options granted during 2016: Assumptions used to calculate expense for stock option Three Months Ended March 31, 2016 Risk-free interest rate 1.11% Average life of options (years) 4 - 5 Volatility 29.6 – 33.0% Dividend yield — Average fair value per stock option $4.86 The following table summarizes GCP stock option activity for the three months ended March 31, 2016: Stock Option Activity Number of Shares (in thousands) Weighted-Average Exercise Price Weighted- Average Remaining Contractual Term (years) Aggregated Intrinsic Value (in thousands) Outstanding, December 31, 2015 — $ — Converted on February 3, 2016 2,236 14.36 Options exercised 406 8.47 Options forfeited — — Options granted 741 17.14 Outstanding, March 31, 2016 2,571 16.09 3.90 $ 10,142 Exercisable, March 31, 2016 872 $ 12.42 1.68 6,648 The aggregate intrinsic values in the table above represent the total pre-tax intrinsic value (the difference between the Company's closing stock price on the last trading day of March 31, 2016 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their in-the-money options at quarter end. The amount changes based on the fair market value of the Company's stock. The intrinsic value of all options exercised in the first quarter of 2016 was $3.5 million . Total unrecognized stock-based compensation expense for stock options at March 31, 2016, was $3.7 million and the weighted-average period over which this expense will be recognized is approximately 1.5 years . Restricted Stock Units and Performance Based Units Upon Separation, certain previously outstanding RSUs and PBUs granted under Grace's equity compensation programs prior to the Separation were adjusted, in accordance with the Employee Matters Agreement, such that holders of these certain original Grace RSUs and PBUs received RSUs denominated in GCP equity. RSUs generally vest over a three year period, with vesting in substantially equal amounts each year over three years and some vesting 100% after the third year from the date of grant. A smaller number of RSUs were designated as sign-on awards and used for purposes of attraction and to cover outstanding awards from a prior employer and vest 100% after two years . RSU Activity Number Of Shares (in thousands) Weighted Average Grant Date Fair Value Outstanding, December 31, 2015 — $ — Converted on February 3, 2016 265 17.00 RSUs settled 31 16.90 RSUs granted 320 17.18 RSUs outstanding, March 31, 2016 554 $ 17.11 Awards that were fully vested as of the Separation were settled in the first quarter of 2016 for 25,000 shares and $0.5 million cash. The Company expects that approximately 18% of the 80,621 RSUs vesting in 2016, 0% of the 68,052 RSUs vesting in 2017, 38% of the 161,055 RSUs vesting in 2018 and 0% of the 245,018 RSUs vesting in 2019, will be settled in cash, with the remaining percentages of these RSUs to be settled in GCP stock. During the first quarter of 2016, the Company granted 155,501 PBUs under the GCP 2016 Stock Incentive Plan to Company employees. These awards vest on February 2019 subject to continued employment through the payment date, and have a weighted average grant date fair value of $17.04 for PBUs. The Company anticipates that 100% of the PBUs will be settled in GCP common stock, assuming full vesting. PBUs granted in 2016 are based on a three year cumulative adjusted earnings per share measure. The number of shares ultimately provided to the employee who received such a PBU grant will be based on Company performance against this measure, and can range from 0% to 200% of the target number of shares which may be due upon a target level of achievement of this measure. The award will be paid out in 2019 once performance against the measure, which is measured over fiscal year 2016-fiscal year 2018, is certified by the Compensation Committee. PBUs and RSUs are recorded at fair value at the date of grant. The common stock-settled portion of each such award is considered an equity award, with the stock compensation expense being determined based on the Company’s stock price on the grant date. The cash settled portion of the award is considered a liability award with liability being remeasured each reporting period based on the Company’s then current stock price. PBU stock-and cash-settled awards are remeasured each reporting period based on the expected payout of the award, which may range from 0% to 200% of the targets for such awards; therefore, these portions of the awards are subject to volatility until the payout is finally determined at the end of the performance period. As of March 31, 2016, $10.5 million of total unrecognized compensation expense related to the RSU and PBU awards is expected to be recognized over the remaining weighted-average service period of 3.1 years . |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 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) 2016 2015 Numerators Net income attributable to GCP shareholders $ 17.0 $ 20.5 Denominators Weighted average common shares—basic calculation 70.6 70.5 Dilutive effect of employee stock awards 0.3 — Weighted average common shares—diluted calculation 70.9 70.5 Basic earnings per share $ 0.24 $ 0.29 Diluted earnings per share $ 0.24 $ 0.29 The computation of basic and diluted earnings per common share is calculated assuming the number of shares of GCP common stock outstanding on February 3, 2016 had been outstanding at the beginning of each period presented. For periods prior to the Separation, it is assumed that there are no dilutive equity instruments as there were no equity awards in GCP outstanding prior to the Separation. See Note 1 for further discussion of the Separation. There were approximately 0.6 million anti-dilutive options and 0.2 million anti-dilutive RSUs outstanding on a weighted average basis for the three months ended March 31, 2016 . During the three months ended March 31, 2016 , the Company repurchased 83,799 shares of Company common stock for $1.7 million , respectively, in connection with GCP's equity compensation programs. |
Related Party Transactions and
Related Party Transactions and Transactions with Grace | 3 Months Ended |
Mar. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions and Transactions with Grace | Related Party Transactions and Transactions with Grace Related Parties All contracts with related parties are at rates and terms that we believe are comparable with those that could be entered into with independent third parties. Subsequent to the Separation, transactions with Grace represent third-party transactions. Allocation of General Corporate Expenses Prior to the Separation, the financial statements included expense allocations for certain functions provided by Grace as well as other Grace employees not solely dedicated to GCP, including, but not limited to, general corporate expenses related to finance, legal, information technology, human resources, communications, ethics and compliance, shared services, employee benefits and incentives, and stock-based compensation. These expenses were allocated to GCP on the basis of direct usage when identifiable, with the remainder allocated on the basis of revenue, headcount or other measures. The expense allocations from Grace discussed above included costs associated with defined benefit pension and other postretirement benefit plans (the “Shared Plans”) sponsored by Grace in which certain of GCP's employees participated. GCP accounted for such Shared Plans as multiemployer benefit plans. Accordingly, GCP did not record an asset or liability to recognize the funded status of the Shared Plans. As part of the Separation, Grace has split certain Shared Plans and transferred the assets and liabilities of such plans related to GCP employees to GCP. The expense allocations were determined on a basis that GCP considered to be a reasonable reflection of the utilization of or benefit received by GCP for the services provided by Grace. The allocations may not, however, reflect the expense GCP would have incurred as an independent company for the periods presented. Between January 1, 2016 and the Separation, GCP was allocated $2.0 million of general corporate expenses, which is primarily included within selling, general and administrative expenses in the Statements of Operations. Grace allocated $13.8 million of general corporate expenses during the three months ending March 31, 2015. Transition Services Agreement In connection with the Separation, the Company entered into a transition services agreement pursuant to which GCP and Grace provide various services to each other on a temporary, transitional basis. The services provided by Grace to GCP include information technology, treasury, tax administration, accounting, financial reporting, human resources and other services. Following the Separation, Grace continues to provide some of these services on a transitional basis, generally for a period of up to 18 months from the date of Separation. Tax Sharing Agreement GCP and Grace entered into a tax sharing agreement (“Tax Sharing Agreement”) in connection with the Separation that governs the parties’ respective rights, responsibilities and obligations with respect to tax liabilities and benefits, tax attributes, the preparation and filing of tax returns, the control of audits and other tax proceedings, and other matters regarding taxes. In general, and subject to the terms of the tax sharing agreement, GCP is responsible for all U.S. federal, state, and foreign taxes (and any related interest, penalties or audit adjustments) reportable on a GCP separate return (a return that does not include Grace or any of its subsidiaries); and Grace is responsible for all U.S. federal, state and foreign income taxes (and any related interest, penalties or audit adjustments) reportable on a consolidated, combined or unitary return that includes Grace or any of its subsidiaries and GCP or any of its subsidiaries. As part of this tax sharing agreement GCP and Grace have indemnified each other for tax matters arising post-Separation that relate to transactions prior to the Separation. As of the balance sheet date GCP has included $4.4 million of indemnified receivables. In addition, the Tax Sharing Agreement imposes certain restrictions on GCP and its subsidiaries (including restrictions on share issuances, business combinations, sales of assets and similar transactions) that are designed to preserve the qualification of the Distribution and certain related transactions under Sections 355 and certain other relevant provisions of the Code. The Tax Sharing Agreement provides special rules that allocate tax liabilities in the event the Distribution, together with certain related transactions, does not so qualify. In general, under the Tax Sharing Agreement, each party is expected to be responsible for any taxes imposed on, and certain related amounts payable by, GCP or Grace that arise from the failure of the Distribution and certain related transactions, to qualify under Sections 355 and certain other relevant provisions of the Code, to the extent that the failure to so qualify is attributable to actions, events or transactions relating to such party’s respective stock, assets or business, or a breach of the relevant representations or covenants made by that party in the Tax Sharing Agreement. Parent Company Equity Net transfers to parent are included within net parent investment on the Consolidated Statements of (Deficit) Equity. The components of the net transfers to parent as of March 31, 2016 and 2015 are as follows: Three Months Ended March 31, (In millions) 2016 2015 Cash pooling and general financing activities $ (690.8 ) $ (38.6 ) GCP expenses funded by parent 6.6 14.8 Corporate costs allocations 2.0 13.8 Provision for income taxes 4.3 9.3 Total net transfers to parent (677.9 ) (0.7 ) Other, net (86.7 ) 11.3 Transfers (to) from parent, net per Consolidated Statements of Cash Flows $ (764.6 ) $ 10.6 Other, net includes the non-cash transfer from parent of approximately $44 million of net pension liabilities, approximately $23 million of fixed assets, the non-cash transfer of approximately $42 million of related-party debt, deferred tax items, and other items. As discussed in Note 3, GCP used proceeds from the Notes and Credit Facilities to fund a distribution to Grace in an amount of $750.0 million related to the Separation. This distribution is reflected as a component of transfers to parent in the table above. |
Operating Segment Information
Operating Segment Information | 3 Months Ended |
Mar. 31, 2016 | |
Segment Reporting [Abstract] | |
Operating Segment Information | Operating Segment Information GCP is engaged in the production and sale of specialty construction chemicals, specialty building materials and packaging products through three operating segments. Specialty Construction Chemicals manufactures and markets concrete admixtures and cement additives. Specialty Building Materials manufactures and markets sheet and liquid membrane systems that protect structures from water, air and vapor penetration, fireproofing, and other products designed to protect the building envelope. Darex Packaging Technologies manufactures and markets packaging materials for use in beverage and food containers, industrial containers and other consumer and industrial applications. The table below presents information related to GCP's operating segments. Only those corporate expenses directly related to the operating segments are allocated for reporting purposes. All remaining corporate items are reported separately and labeled as such. GCP excludes defined benefit pension expense from the calculation of segment operating income. GCP believes that the exclusion of defined benefit pension expense provides a better indicator of its operating segment performance as defined benefit pension expense is not managed at an operating segment level. GCP defines Adjusted EBIT (a non-GAAP financial measure) to be net income attributable to GCP shareholders adjusted for interest income and expense; income taxes; 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 certain product lines and other investments; gains and losses on sales of businesses, product lines, and certain other investments; and certain other unusual or infrequent items that are not representative of underlying trends as applicable for the period. Operating Segment Data Three Months Ended March 31, (In millions) 2016 2015 Net Sales Specialty Construction Chemicals $ 137.0 $ 152.0 Specialty Building Materials 100.7 87.2 Darex Packaging Technologies 76.4 83.5 Total $ 314.1 $ 322.7 Adjusted EBIT Specialty Construction Chemicals segment operating income $ 9.9 $ 8.9 Specialty Building Materials segment operating income 27.8 17.1 Darex Packaging Technologies segment operating income 17.2 15.0 Corporate costs (6.9 ) (4.9 ) Certain pension costs (2.2 ) (1.2 ) Total $ 45.8 $ 34.9 Corporate costs include certain functional costs and other corporate costs such as certain performance-based compensation incentive compensation and public company costs. Reconciliation of Operating Segment Data to Financial Statements GCP Adjusted EBIT for the three months ended March 31, 2016 and 2015 , is reconciled below to income before income taxes presented in the accompanying Consolidated Statements of Operations. Three Months Ended March 31, (In millions) 2016 2015 GCP Adjusted EBIT $ 45.8 $ 34.9 Repositioning expenses (4.3 ) — Restructuring expenses (0.9 ) (4.3 ) Pension MTM adjustment and other related costs, net (2.7 ) (0.5 ) Net income attributable to noncontrolling interests 0.4 0.1 Interest expense, net (12.5 ) (0.3 ) Income before income taxes $ 25.8 $ 29.9 Geographic Area Data The table below presents information related to the geographic areas in which GCP operates. Sales are attributed to geographic areas based on customer location. Three Months Ended March 31, (In millions) 2016 2015 Net Sales United States $ 123.1 $ 110.4 Canada and Puerto Rico 6.7 5.2 Total North America 129.8 115.6 Europe Middle East Africa 79.3 80.2 Asia Pacific 74.9 78.6 Latin America 30.1 48.3 Total $ 314.1 $ 322.7 |
Basis of Presentation and Sum21
Basis of Presentation and Summary of Significant Accounting and Financial Reporting Policies (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | The financial statements for periods prior to the Separation have been prepared on a stand-alone basis and are derived from the consolidated financial statements and accounting records of Grace, as our business operated as a combination of entities under common control of Grace. These financial statements reflect the historical basis and carrying values established when the Company was part of Grace. Subsequent to the Separation, the accompanying Consolidated Financial Statements are presented on a consolidated basis and include all of the accounts and operations of GCP and its majority-owned subsidiaries. The financial statements reflect the financial position, results of operations and cash flows of GCP in accordance with generally accepted accounting principles in the United States of America ("GAAP") for interim financial information. |
Principles of Combination | The financial statements presented herein are unaudited and should be read in conjunction with the Combined Financial Statements presented in the Company's 2015 Annual Report on Form 10-K. Such 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 period ended March 31, 2016 are not necessarily indicative of the results of operations for the year ending December 31, 2016 . All transactions between GCP and Grace have been included in these financial statements. Prior to the Separation, all such transactions are considered to be effectively settled for cash, other than intercompany loan transactions, in the Combined Financial Statements at the time the transaction was recorded . The intercompany loans payable to Grace, related interest thereon, and related cash flows, as presented in Note 3 were reflected in Statements of Cash Flows as "Borrowings under related party loans" and "Repayments of related party loans," in the Balance Sheets as "Loans payable-related party" and in the Statements of Operations as "Interest income, net-related party." Subsequent to the Separation, Grace is no longer a related party of the Company. Prior to the Separation, the financial statements included expenses of Grace allocated to GCP for certain functions provided by Grace, including, but not limited to, general corporate expenses related to finance, legal, information technology, human resources, communications, ethics and compliance, environment health and safety, supply chain, shared services, employee benefits and incentives, insurance and stock-based compensation. These expenses were allocated to GCP on the basis of direct usage when identifiable, with the remainder allocated on the basis of revenue, headcount or other measures. These cost allocations were included in selling, general and administrative expenses in the Statement of Operations. Most of these costs were included in segment operating income with only a portion included in corporate costs. Both GCP and Grace consider the basis on which the expenses have been allocated to be a reasonable reflection of the utilization of services provided to, or the benefit received by, GCP during the periods presented. Subsequent to the Separation, GCP has performed most of these functions using its own resources or purchased services. However, the remainder of these functions will continue to be provided by Grace under a transition services agreement, for a period generally up to 18 months from the Separation. See Note 12 for further description of the transition services agreement between GCP and Grace. Prior to the Separation, the financial statements also included the assets and liabilities that were historically held at the Grace corporate level but were specifically identifiable or otherwise pushed down to GCP. The cash and cash equivalents held by Grace at the corporate level were not specifically identifiable to GCP and therefore were not allocated to GCP for any of the periods presented. Prior to the Separation, cash and cash equivalents in the Balance Sheets represent primarily cash held locally by entities included in the financial statements. Third-party debt and the related interest expense of Grace were not allocated to GCP for any of the periods presented as GCP is not the legal obligor of the debt and the Grace borrowings were not directly attributable to GCP's business. The financial statements exclude all assets, liabilities, income, gains, costs and expenses reported by Grace related to asbestos and bankruptcy matters. Prior to the Separation, these matters were not allocated to GCP as Grace is the legal obligor for those liabilities and Grace is expected to pay all future liabilities and costs related to such matters as such matters were not historically managed by GCP. Grace retained full responsibility for these matters following the Separation and GCP has not indemnified Grace for any losses or payments associated with these matters. Prior to the Separation, Grace used a centralized approach to cash management and financing of its operations and Grace funded GCP's operating and investing activities as needed. Prior to the Separation, cash transfers to and from the cash management accounts of Grace are reflected in the Statements of Cash Flows as “Transfers to parent, net.” |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount 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. GCP's accounting measurements that are most affected by management's estimates of future events are: • Contingent liabilities, which depend on an assessment of the probability of loss and an estimate of ultimate resolution cost, such as material commitments (see Note 7 to the Consolidated Financial Statements) and income taxes (see Note 4 to the Consolidated Financial Statements); • Pension and postretirement liabilities that depend on assumptions regarding participant life spans, future inflation, discount rates and total returns on invested funds (see Note 5 to the Consolidated Financial Statements); and • Realization values of net deferred tax assets, which depend on projections of future taxable income (see Note 4 to the Consolidated Financial Statements). |
Reclassifications and Revisions | Reclassifications Certain amounts in prior year's financial statements have been reclassified to conform to the current year presentation. Such reclassifications have not materially affected previously reported amounts in the financial statements. Revisions Certain prior period amounts related to borrowings and repayments under credit arrangements reported as financing activities on the Consolidated Statements of Cash Flows have been revised. For the three months ended March 31, 2015, borrowings and repayments under certain credit facilities of $3.3 million were previously netted within cash flows from financing activities. GCP concluded that these revisions were not material to the previously issued Combined Financial Statements. |
Income Tax | Income Tax As a global enterprise, GCP is subject to a complex array of tax regulations and must make assessments of applicable tax law and judgments in estimating its ultimate income tax liability. In the financial statements for periods prior to the Separation, income tax expense and tax balances were calculated using the separate return method as if GCP was a separate taxpayer, although GCP was included in tax returns filed by Grace. After the Separation, income tax expense and income tax balances represent GCP’s federal, state and foreign income taxes as an independent company. As a stand-alone entity, GCP will file tax returns on its own behalf and its deferred taxes and effective tax rate may not be comparable to those in historical periods. See Note 4 for details regarding estimates used in accounting for income tax matters including unrecognized tax benefits. |
Stock-based Compensation Expense | Stock-Based Compensation Expense Prior to the Separation, GCP was allocated stock-based compensation expense from Grace related to GCP employees receiving awards denominated in Grace equity instruments. In accordance with an employee matters agreement entered into between Grace and GCP on January 27, 2016 in connection with the Separation (the "Employee Matters Agreement"), previously outstanding stock-based compensation awards granted under Grace's equity compensation programs prior to the Separation and held by certain executives and employees of GCP and Grace were adjusted to reflect the impact of the Separation on these awards. To preserve the aggregate intrinsic value of these stock-based compensation awards, as measured immediately before and immediately after the Separation, each holder of Grace stock-based compensation awards generally received an adjusted award consisting of either (i) both a stock-based compensation award denominated in Grace equity as it existed subsequent to the Separation and a stock-based compensation award denominated in GCP equity or (ii) solely a stock-based compensation award denominated in the equity of the company at which the person was employed following the Separation. In the Separation, the determination as to which type of adjustment applied to a holder’s previously outstanding Grace award was based upon the type of stock-based compensation award that was to be adjusted and the date on which the award was originally granted under the Grace equity compensation programs prior to the Separation. Under the Employee Matters Agreement, GCP retains certain obligations related to all stock- and cash-settled stock-based compensation awards denominated in GCP equity, regardless of whether the holder is a GCP employee. Following the Separation, we record stock-based compensation expense for equity awards in accordance with authoritative accounting guidance. |
Currency Translation | Currency Translation Assets and liabilities of foreign subsidiaries (other than those located in countries with highly inflationary economies) are translated into U.S. dollars at current exchange rates, while revenues, costs and expenses are translated at average exchange rates during each reporting period. The resulting translation adjustments are included in "accumulated other comprehensive loss" in the Balance Sheets. The financial statements of any subsidiaries located in countries with highly inflationary economies are remeasured as if the functional currency were the U.S. dollar; the remeasurement creates translation adjustments that are reflected in net income in the Statements of Operations. Effective January 1, 2010, we began to account for Venezuela as a highly inflationary economy. As a result, the functional currency of our Venezuelan subsidiary became the U.S. dollar; therefore, all translation adjustments are reflected in net income in the accompanying Consolidated Statements of Operations. The official exchange rate (CENCOEX) of 4.3 was used to remeasure our financial statements from bolivars to U.S. dollars upon Venezuela's designation as a highly inflationary economy. On February 8, 2013, the Venezuelan government announced that, effective February 13, 2013, the official exchange rate of the bolivar to U.S. dollar would devalue from 4.3 to 6.3 . GCP continued to account for its results in Venezuela at the official exchange rate of 6.3 bolivars to one U.S. dollar until September 30, 2015. Based on developments in the third quarter of 2015, including changed expectations about GCP's ability to import raw materials into Venezuela at the official exchange rate and increased inflation, the Company determined that it was no longer appropriate to use the official exchange rate. Effective September 30, 2015, the Company began accounting for its results in Venezuela at the SIMADI rate. The Company recorded a pre-tax charge of $73.2 million in the third quarter of 2015 to reflect the devaluation of monetary assets and the impairment of non-monetary assets at the SIMADI rate of 199 bolivars to one U.S. dollar. In mid-February 2016, changes to the currency exchange systems were announced which eliminated the SICAD exchange rate and replaced the name SIMADI rate with DICOM, which is expected to be a floating exchange rate. The DICOM rate was 251 bolivars to one U.S. dollar at the end of the first quarter 2016, a 25% increase from the SIMADI rate used as of the end of the fourth quarter of 2015. Accordingly, in the first quarter of 2016, the Company recorded a $0.9 million loss in the Consolidated Statements of Operations to reflect the further devaluation of the net monetary and non-monetary asset position using the DICOM rate. |
Effect of New Accounting Standards | Effect of New Accounting Standards In May 2014, the FASB issued ASU 2014-09 "Revenue from Contracts with Customers." This update is 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. The new requirements were to be effective for fiscal years beginning after December 15, 2016, and for interim periods within those fiscal years, with early adoption not permitted. In August 2015, the FASB issued ASU 2015-14 "Revenue from Contracts with Customers—Deferral of the Effective Date," deferring the effective date by one year but permitting adoption as of the original effective date. The revised standard allows for two methods of adoption: (a) full retrospective adoption, meaning the standard is applied to all periods presented, or (b) modified retrospective adoption, meaning the cumulative effect of applying the new standard is recognized as an adjustment to the opening retained earnings balance. GCP does not intend to adopt the standard early and is in the process of determining the adoption method as well as the effects the adoption will have on the Consolidated Financial Statements. In April 2015, the FASB issued ASU 2015-03 "Simplifying the Presentation of Debt Issuance Costs." This update is part of the FASB's Simplification Initiative and is also intended to enhance convergence with the IASB's treatment of debt issuance costs. The update requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. GCP adopted this standard for the first quarter 2016. See Footnote 3, Debt and Other Financial Instruments for the effect these ASU's had on the Consolidated Financial Statements. In August 2015, the FASB issued ASU 2015-15 "Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements." The update clarifies ASU 2015-03, allowing debt issuance costs related to line of credit arrangements to be deferred and presented as an asset and subsequently amortized ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The new requirements are effective for fiscal years beginning after December 15, 2015, and for interim periods within those fiscal years, with early adoption permitted. GCP adopted this standard for the first quarter 2016. See Footnote 3, Debt and Other Financial Instruments for the effect these ASU's had on the Consolidated Financial Statements. In July 2015, the FASB issued ASU 2015-11 "Simplifying the Measurement of Inventory." This update is part of the FASB's Simplification Initiative and is also intended to enhance convergence with the IASB's measurement of inventory. The update requires that inventory be measured at the lower of cost and net realizable value for entities using FIFO or average cost methods. The new requirements are effective for fiscal years beginning after December 15, 2016, and for interim periods within fiscal years beginning after December 31, 2016, with early adoption permitted. GCP is currently evaluating its effect on the Consolidated Financial Statements and the timing of adoption. In February 2016, the FASB issued ASU 2016-02 "Leases." 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. The amendments in this update are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. GCP is currently evaluating its effect on the Consolidated Financial Statements and the timing of adoption. In March 2016, the FASB issued ASU 2016-09 “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”). The standard is intended to simplify several areas of accounting for share-based compensation arrangements, including the income tax impact, classification on the statement of cash flows and forfeitures. ASU 2016-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, and early adoption is permitted. GCP is currently evaluating the impact that the standard will have on its Consolidated Financial Statements. |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consisted of the following at March 31, 2016 , and December 31, 2015 : (In millions) March 31, December 31, Raw materials $ 42.8 $ 39.1 In process 5.6 6.2 Finished products 53.1 51.3 Other 9.3 8.7 Total inventories $ 110.8 $ 105.3 |
Debt and Other Financial Inst23
Debt and Other Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Components of Debt | Components of Debt (In millions) March 31, December 31, 9.5% Senior Notes due 2023, net of unamortized debt issuance costs of $7.8 at March 31, 2016 $ 517.2 $ — Term Loan due 2022, net of unamortized discount of $2.7 and unamortized debt issuance costs of $4.9 at March 31, 2016 (1) 267.4 — Related party — 42.3 Other borrowings (2) 31.6 25.7 Total debt 816.2 68.0 Less debt payable within one year 32.0 68.0 Debt payable after one year $ 784.2 $ — Weighted average interest rates on related party debt — % 3.3 % Weighted average interest rates on total debt 8.1 % 11.9 % __________________________ (1) Interest at LIBOR + 450 bps with a 75 bps LIBOR floor at March 31, 2016 . (2) Represents borrowings under various lines of credit and other borrowings, primarily by non-U.S. subsidiaries. |
Principal Maturities of Debt Outstanding | The principal maturities of debt outstanding (net of unamortized discounts and debt issuance costs) at March 31, 2016 , were as follows: (In millions) 2016 $ 32.0 2017 3.4 2018 3.4 2019 3.4 2020 3.4 Thereafter 770.6 Total debt $ 816.2 |
Carrying Amounts and Fair Values of Debt Instruments | At March 31, 2016 , the carrying amounts and fair values of GCP's debt were as follows: March 31, 2016 December 31, 2015 (In millions) Carrying Amount Fair Value Carrying Amount Fair Value 9.5% Senior Notes due 2023 $ 517.2 572.3 $ — $ — Term Loan due 2022 267.4 276.4 — — Other borrowings 31.6 31.6 68.0 68.0 Total debt $ 816.2 $ 880.3 $ 68.0 $ 68.0 |
Pension Plans and Other Postr24
Pension Plans and Other Postretirement Benefit Plans (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Pension and Other Postretirement Benefit Expense [Abstract] | |
Net Funded Status of Over-Funded, Underfunded, and Unfunded Pension Plans | The following table presents the funded status of GCP's overfunded, underfunded and unfunded pension plans: (In millions) March 31, December 31, Overfunded defined benefit pension plans $ 25.5 $ 26.1 Underfunded defined benefit pension plans (46.4 ) (8.0 ) Unfunded defined benefit pension plans (34.4 ) (26.0 ) Total underfunded and unfunded defined benefit pension plans (80.8 ) (34.0 ) Pension liabilities included in other current liabilities (1.2 ) (1.1 ) Net funded status $ (56.5 ) $ (9.0 ) |
Components of Net Periodic Benefit Cost (Income) | Components of Net Periodic Benefit Cost (Income) Three Months Ended March 31, 2016 2015 Pension Other Post Retirement Pension Other Post Retirement (In millions) U.S. Non-U.S. U.S. Non-U.S. Service cost $ 1.5 $ 0.9 $ — $ 0.1 $ 0.8 $ — Interest cost 1.2 2.1 — 0.1 2.3 — Expected return on plan assets (1.2 ) (2.3 ) — (0.2 ) (2.8 ) — Amortization of prior service (credit) cost — — (0.1 ) — 0.1 — Net periodic benefit cost (income) (1) $ 1.5 $ 0.7 $ (0.1 ) $ — $ 0.4 $ — ___________________________________ (1) Includes expense that was allocated to Grace of $0.1 million for the three months ended March 31, 2015. |
Other Balance Sheet Accounts (T
Other Balance Sheet Accounts (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Payables and Accruals [Abstract] | |
Schedule of Other Current Liabilities | (In millions) March 31, December 31, Other Current Liabilities Customer volume rebates $ 28.1 $ 33.5 Accrued compensation (1) 25.5 27.1 Income tax payable (2) 15.8 23.3 Accrued interest 9.0 3.9 Pension liabilities 1.2 1.1 Other accrued liabilities 41.4 36.6 Total other current liabilities $ 121.0 $ 125.5 ________________________________ (1) Accrued compensation in the table above includes salaries and wages as well as estimated current amounts due under the annual and long-term incentive programs. (2) |
Restructuring and Repositioni26
Restructuring and Repositioning Expenses (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Liability | Restructuring Liability (In millions) Total Balance, December 31, 2015 $ 1.4 Accruals for severance and other costs 0.9 Payments (1.8 ) Currency translation adjustments and other 1.5 Balance, March 31, 2016 $ 2.0 |
Schedule of Repositioning Expenses | In the first quarter , GCP incurred repositioning expenses of $4.3 million , as follows: Repositioning expense (In millions) Three Months Ended March 31, 2016 Professional fees $ 2.1 Employee-related costs 2.2 Total $ 4.3 |
Other Comprehensive Income (L27
Other Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Equity [Abstract] | |
Schedule 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 GCP's other comprehensive income (loss) for the three months ended March 31, 2016 and 2015 : Three Months Ended March 31, 2016 Pre-Tax Amount Tax Benefit/ (Expense) After-Tax Amount Defined benefit pension and other postretirement plans: Amortization of net prior service cost included in net periodic benefit cost $ (0.1 ) $ — $ (0.1 ) Assumption of net prior service credit 1.2 (0.4 ) 0.8 Assumption of net actuarial loss (1.1 ) 0.4 (0.7 ) Benefit plans, net — — — Currency translation adjustments 3.9 — 3.9 Loss from hedging activities (0.2 ) — (0.2 ) Other comprehensive income attributable to GCP shareholders $ 3.7 $ — $ 3.7 Three Months Ended March 31, 2015 Pre-Tax Amount Tax Benefit/ (Expense) After-Tax Amount Defined benefit pension and other postretirement plans: Amortization of net prior service cost included in net periodic benefit cost 0.1 (0.1 ) — Benefit plans, net 0.1 (0.1 ) — Currency translation adjustments (29.6 ) — (29.6 ) Gain from hedging activities 0.2 (0.1 ) 0.1 Other comprehensive loss attributable to GCP shareholders $ (29.3 ) $ (0.2 ) $ (29.5 ) |
Schedule of Changes of Accumulated Other Comprehensive Income (Loss), Net of Tax | The following tables present the changes in accumulated other comprehensive income (loss), net of tax, for the three months ended March 31, 2016 and 2015 : Three Months Ended March 31, 2016 Defined Benefit Pension and Other Postretirement Plans Currency Translation Adjustments Gain (Loss) from Hedging Activities Total Beginning balance $ 0.1 $ (127.8 ) $ — $ (127.7 ) Other comprehensive income before reclassifications 0.1 3.9 (0.5 ) 3.5 Amounts reclassified from accumulated other comprehensive income (0.1 ) — 0.3 0.2 Net current-period other comprehensive income (loss) — 3.9 (0.2 ) 3.7 Ending balance $ 0.1 $ (123.9 ) $ (0.2 ) $ (124.0 ) Three Months Ended March 31, 2015 Defined Benefit Pension and Other Postretirement Plans Currency Translation Adjustments Gain (Loss) from Hedging Activities Total Beginning balance $ (0.3 ) $ (47.7 ) $ (0.2 ) $ (48.2 ) Other comprehensive income before reclassifications — (29.6 ) (0.1 ) (29.7 ) Amounts reclassified from accumulated other comprehensive income — — 0.2 0.2 Net current-period other comprehensive (loss) income — (29.6 ) 0.1 (29.5 ) Ending balance $ (0.3 ) $ (77.3 ) $ (0.1 ) $ (77.7 ) |
Stock Incentive Plans (Tables)
Stock Incentive Plans (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Expenses Related to Stock Options, Valuation Assumptions | The following summarizes the assumptions used for estimating the fair value of stock options granted during 2016: Assumptions used to calculate expense for stock option Three Months Ended March 31, 2016 Risk-free interest rate 1.11% Average life of options (years) 4 - 5 Volatility 29.6 – 33.0% Dividend yield — Average fair value per stock option $4.86 |
Summary of Stock Option Activity | The following table summarizes GCP stock option activity for the three months ended March 31, 2016: Stock Option Activity Number of Shares (in thousands) Weighted-Average Exercise Price Weighted- Average Remaining Contractual Term (years) Aggregated Intrinsic Value (in thousands) Outstanding, December 31, 2015 — $ — Converted on February 3, 2016 2,236 14.36 Options exercised 406 8.47 Options forfeited — — Options granted 741 17.14 Outstanding, March 31, 2016 2,571 16.09 3.90 $ 10,142 Exercisable, March 31, 2016 872 $ 12.42 1.68 6,648 |
Summary of Restricted Stock Units Award Activity | RSU Activity Number Of Shares (in thousands) Weighted Average Grant Date Fair Value Outstanding, December 31, 2015 — $ — Converted on February 3, 2016 265 17.00 RSUs settled 31 16.90 RSUs granted 320 17.18 RSUs outstanding, March 31, 2016 554 $ 17.11 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
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) 2016 2015 Numerators Net income attributable to GCP shareholders $ 17.0 $ 20.5 Denominators Weighted average common shares—basic calculation 70.6 70.5 Dilutive effect of employee stock awards 0.3 — Weighted average common shares—diluted calculation 70.9 70.5 Basic earnings per share $ 0.24 $ 0.29 Diluted earnings per share $ 0.24 $ 0.29 |
Related Party Transactions an30
Related Party Transactions and Transactions with Grace (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Related Party Transactions [Abstract] | |
Components of Net Transfers to Parent | Net transfers to parent are included within net parent investment on the Consolidated Statements of (Deficit) Equity. The components of the net transfers to parent as of March 31, 2016 and 2015 are as follows: Three Months Ended March 31, (In millions) 2016 2015 Cash pooling and general financing activities $ (690.8 ) $ (38.6 ) GCP expenses funded by parent 6.6 14.8 Corporate costs allocations 2.0 13.8 Provision for income taxes 4.3 9.3 Total net transfers to parent (677.9 ) (0.7 ) Other, net (86.7 ) 11.3 Transfers (to) from parent, net per Consolidated Statements of Cash Flows $ (764.6 ) $ 10.6 |
Operating Segment Information (
Operating Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Segment Reporting [Abstract] | |
Schedule of Operating Segment Data | Operating Segment Data Three Months Ended March 31, (In millions) 2016 2015 Net Sales Specialty Construction Chemicals $ 137.0 $ 152.0 Specialty Building Materials 100.7 87.2 Darex Packaging Technologies 76.4 83.5 Total $ 314.1 $ 322.7 Adjusted EBIT Specialty Construction Chemicals segment operating income $ 9.9 $ 8.9 Specialty Building Materials segment operating income 27.8 17.1 Darex Packaging Technologies segment operating income 17.2 15.0 Corporate costs (6.9 ) (4.9 ) Certain pension costs (2.2 ) (1.2 ) Total $ 45.8 $ 34.9 |
Reconciliation of Operating Segment Data to Financial Statements | GCP Adjusted EBIT for the three months ended March 31, 2016 and 2015 , is reconciled below to income before income taxes presented in the accompanying Consolidated Statements of Operations. Three Months Ended March 31, (In millions) 2016 2015 GCP Adjusted EBIT $ 45.8 $ 34.9 Repositioning expenses (4.3 ) — Restructuring expenses (0.9 ) (4.3 ) Pension MTM adjustment and other related costs, net (2.7 ) (0.5 ) Net income attributable to noncontrolling interests 0.4 0.1 Interest expense, net (12.5 ) (0.3 ) Income before income taxes $ 25.8 $ 29.9 |
Schedule of Geographic Area Data | The table below presents information related to the geographic areas in which GCP operates. Sales are attributed to geographic areas based on customer location. Three Months Ended March 31, (In millions) 2016 2015 Net Sales United States $ 123.1 $ 110.4 Canada and Puerto Rico 6.7 5.2 Total North America 129.8 115.6 Europe Middle East Africa 79.3 80.2 Asia Pacific 74.9 78.6 Latin America 30.1 48.3 Total $ 314.1 $ 322.7 |
Basis of Presentation and Sum32
Basis of Presentation and Summary of Significant Accounting and Financial Reporting Policies (Details) | Feb. 03, 2016 | Mar. 31, 2016segment |
Class of Stock [Line Items] | ||
Number of operating segments | 3 | |
Common Stock | ||
Class of Stock [Line Items] | ||
Number of GCP shares distributed for every share held by Grace stockholders | 1 | |
Maximum | W.R. Grace & Co. | ||
Class of Stock [Line Items] | ||
Transition period | 18 months |
Basis of Presentation and Sum33
Basis of Presentation and Summary of Significant Accounting and Financial Reporting Policies - Revisions (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Borrowings and repayments under certain credit facilities | $ 3.3 | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Net increase in parent investment | $ 677.9 | 0.7 | |||
Net Parent Investment | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Net increase in parent investment | $ 677.9 | $ 0.7 | |||
Revision Of Cumulative Translation Adjustment Balances | Restatement Adjustment | Currency Translation Adjustments | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Increase in accumulated other comprehensive loss | $ 17.5 | $ 17.5 | |||
Revision Of Cumulative Translation Adjustment Balances | Restatement Adjustment | Net Parent Investment | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Net increase in parent investment | $ 17.5 | $ 17.5 | $ 17.5 |
Basis of Presentation and Sum34
Basis of Presentation and Summary of Significant Accounting and Financial Reporting Policies - Currency Translation (Details) - Venezuela $ in Millions | 3 Months Ended | ||||
Mar. 31, 2016USD ($) | Sep. 30, 2015USD ($) | Feb. 13, 2013 | Feb. 08, 2013 | Jan. 01, 2010 | |
Financial Statement Line Items with Differences in Reported Amount and Reporting Currency Denominated Amounts [Line Items] | |||||
Pre-tax charge reflect the devaluation of monetary assets and the impairment of non-monetary assets | $ 0.9 | $ 73.2 | |||
Increase in currency exchange rate, in percentage | 25.00% | ||||
Bolivar | |||||
Financial Statement Line Items with Differences in Reported Amount and Reporting Currency Denominated Amounts [Line Items] | |||||
Exchange rate used to remeasure financial statements upon Venezuela's designation as a highly inflationary economy | 6.3 | 4.3 | 4.3 | ||
Foreign currency exchange rate, translation | 251 | 199 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 42.8 | $ 39.1 |
In process | 5.6 | 6.2 |
Finished products | 53.1 | 51.3 |
Other | 9.3 | 8.7 |
Total inventories | $ 110.8 | $ 105.3 |
Debt and Other Financial Inst36
Debt and Other Financial Instruments - Components of Debt (Details) - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||
Total debt | $ 816.2 | $ 68 |
Less debt payable within one year | 32 | 68 |
Debt payable after one year | $ 784.2 | $ 0 |
Weighted average interest rates | 8.10% | 11.90% |
Senior Notes | ||
Debt Instrument [Line Items] | ||
Total debt | $ 517.2 | $ 0 |
Term Loan | ||
Debt Instrument [Line Items] | ||
Total debt | 267.4 | 0 |
Related Party | ||
Debt Instrument [Line Items] | ||
Total debt | $ 0 | $ 42.3 |
Weighted average interest rates | 0.00% | 3.30% |
Other Borrowings | ||
Debt Instrument [Line Items] | ||
Total debt | $ 31.6 | $ 25.7 |
Debt and Other Financial Inst37
Debt and Other Financial Instruments - Components of Debt (Additional Information) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Jan. 27, 2016 | |
Senior Notes | ||
Debt Instrument [Line Items] | ||
Stated interest rate | 9.50% | 9.50% |
Unamortized debt issuance cost | $ 7.8 | |
Term Loan | ||
Debt Instrument [Line Items] | ||
Unamortized debt issuance cost | 4.9 | |
Unamortized discount | $ 2.7 | |
Term Loan | LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 450.00% | |
Variable interest rate, floor | 75.00% |
Debt and Other Financial Inst38
Debt and Other Financial Instruments - Principal Maturities of Debt Outstanding (Details) - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 |
Debt Disclosure [Abstract] | ||
2,016 | $ 32 | |
2,017 | 3.4 | |
2,018 | 3.4 | |
2,019 | 3.4 | |
2,020 | 3.4 | |
Thereafter | 770.6 | |
Total debt | $ 816.2 | $ 68 |
Debt and Other Financial Inst39
Debt and Other Financial Instruments - Narrative (Details) - USD ($) | Feb. 03, 2016 | Mar. 31, 2016 | Jan. 27, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||||
Distribution to Grace related to the Separation | $ 750,000,000 | |||
Debt proceeds retained to meet operating requirements and to pay fees associated with the Separation | 50,000,000 | |||
Long-term debt | 816,200,000 | $ 68,000,000 | ||
United States | ||||
Debt Instrument [Line Items] | ||||
Pledged equity to credit facilities, percentage | 100.00% | |||
United Kingdom | ||||
Debt Instrument [Line Items] | ||||
Pledged equity to credit facilities, percentage | 65.00% | |||
Term Loan | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | $ 267,400,000 | 0 | ||
Term Loan | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 450.00% | |||
Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Aggregate principal amount | $ 525,000,000 | |||
Stated interest rate | 9.50% | 9.50% | ||
Debt issuance costs, gross | $ 8,000,000 | |||
Long-term debt | $ 517,200,000 | 0 | ||
Related Party | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | 0 | $ 42,300,000 | ||
Secured Debt | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 525,000,000 | |||
Secured Debt | Term Loan | ||||
Debt Instrument [Line Items] | ||||
Aggregate principal amount | $ 275,000,000 | |||
Annual amortization of debt, as percentage of original amount | 1.00% | |||
Debt issuance costs, gross | $ 5,000,000 | |||
Secured Debt | Term Loan | Base Rate | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 3.50% | |||
Secured Debt | Term Loan | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 4.50% | |||
Secured Debt | Revolving Credit | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 250,000,000 | |||
Outstanding draws on revolving loans | 0 | |||
Available credit under revolving loans | 247,400,000 | |||
Line of credit debt issuance costs, gross | $ 5,200,000 | |||
Line of credit, unamortized debt issuance costs | $ 5,100,000 | |||
Secured Debt | Revolving Credit | Base Rate | Minimum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 0.50% | |||
Secured Debt | Revolving Credit | Base Rate | Maximum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 1.00% | |||
Secured Debt | Revolving Credit | LIBOR | Minimum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 1.50% | |||
Secured Debt | Revolving Credit | LIBOR | Maximum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 2.00% |
Debt and Other Financial Inst40
Debt and Other Financial Instruments - Carrying Amounts and Fair Values of Debt Instruments (Details) - USD ($) $ in Millions | Mar. 31, 2016 | Jan. 27, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | |||
Carrying Amount | $ 816.2 | $ 68 | |
Level 2 Inputs | |||
Debt Instrument [Line Items] | |||
Fair Value | 880.3 | 68 | |
Senior Notes | |||
Debt Instrument [Line Items] | |||
Carrying Amount | $ 517.2 | 0 | |
Stated interest rate | 9.50% | 9.50% | |
Senior Notes | Level 2 Inputs | |||
Debt Instrument [Line Items] | |||
Fair Value | $ 572.3 | 0 | |
Term Loan | |||
Debt Instrument [Line Items] | |||
Carrying Amount | 267.4 | 0 | |
Term Loan | Level 2 Inputs | |||
Debt Instrument [Line Items] | |||
Fair Value | 276.4 | 0 | |
Other Borrowings | |||
Debt Instrument [Line Items] | |||
Carrying Amount | 31.6 | 68 | |
Other Borrowings | Level 2 Inputs | |||
Debt Instrument [Line Items] | |||
Fair Value | $ 31.6 | $ 68 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | Feb. 03, 2016 | Mar. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 |
Entity Location [Line Items] | ||||
Effective tax rate | 67.30% | |||
Tax benefit for lower tax rates in foreign jurisdictions | $ (8) | |||
Tax benefit for lower tax rates in foreign jurisdictions, percent | 6.40% | |||
Tax provision for state income taxes | $ 6.3 | |||
Tax provision for state income taxes, percent | 5.00% | |||
Repatriation of foreign earnings | $ 173.1 | $ 19.9 | ||
Repatriation of foreign earnings, percent | 15.90% | |||
Out-of-period uncertain tax position | $ 2.7 | |||
Increase in deferred tax assets in the US in conjunction with the Separation | $ 68 | |||
Venezuela | ||||
Entity Location [Line Items] | ||||
Tax provision nondeductible charge related to Venezuela | $ 24.7 | |||
Tax provision nondeductible charge related to Venezuela, percent | 19.70% | |||
Forecast | ||||
Entity Location [Line Items] | ||||
Effective tax rate | 33.50% | |||
Tax benefit for lower tax rates in foreign jurisdictions | $ (7.6) | |||
Tax benefit for lower tax rates in foreign jurisdictions, percent | 5.60% | |||
Tax provision for state income taxes | $ 3 | |||
Tax provision for state income taxes, percent | 2.20% |
Pension Plans and Other Postr42
Pension Plans and Other Postretirement Benefit Plans - Narrative (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | |||
Mar. 31, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2015 | Feb. 03, 2016 | |
Pension plans and other postretirement benefit plans | |||||
Overfunded defined benefit pension plans | $ 25.5 | $ 25.5 | $ 26.1 | ||
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 | $ 1.1 | $ 1.4 | |||
Shared Plans | |||||
Pension plans and other postretirement benefit plans | |||||
Allocated pension expense | 0.9 | ||||
Withdrawal from Multiemployer Defined Benefit Plan | |||||
Pension plans and other postretirement benefit plans | |||||
Increase to net pension liabilities | 44 | 4 | |||
Postretirement Life Insurance Plans | |||||
Pension plans and other postretirement benefit plans | |||||
Increase to net pension liabilities | 0.1 | ||||
Allocated income | $ 0.4 | ||||
Prior service credit assumed as part of acquisition, net of tax | $ 0.8 | ||||
Actuarial losses, net of tax | $ 0.7 | ||||
Pension Plans | |||||
Pension plans and other postretirement benefit plans | |||||
Overfunded defined benefit pension plans | 25.5 | 25.5 | 26.1 | ||
Combined balance of underfunded and unfunded plans included as liabilities | 82 | 82 | |||
Pension liabilities included in other current liabilities | 1.2 | 1.2 | 1.1 | ||
Underfunded and unfunded defined benefit pension plans | 80.8 | $ 80.8 | $ 34 | ||
U.S. | |||||
Pension plans and other postretirement benefit plans | |||||
Accelerated contribution to the trusts | $ 1 |
Pension Plans and Other Postr43
Pension Plans and Other Postretirement Benefit Plans - Net Funded Status of Over-Funded, Underfunded, and Unfunded Pension Plans (Details) - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 |
Pension plans and other postretirement benefit plans | ||
Overfunded defined benefit pension plans | $ 25.5 | $ 26.1 |
Underfunded defined benefit pension plans | (80.8) | (34) |
Pension Plans | ||
Pension plans and other postretirement benefit plans | ||
Overfunded defined benefit pension plans | 25.5 | 26.1 |
Underfunded defined benefit pension plans | (46.4) | (8) |
Unfunded defined benefit pension plans | (34.4) | (26) |
Total underfunded and unfunded defined benefit pension plans | (80.8) | (34) |
Pension liabilities included in other current liabilities | (1.2) | (1.1) |
Net funded status | $ (56.5) | $ (9) |
Pension Plans and Other Postr44
Pension Plans and Other Postretirement Benefit Plans - Components of Net Periodic Benefit Cost (Income) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
W.R. Grace | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Net periodic benefit cost (income) | $ 0.1 | |
U.S. | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Service cost | $ 1.5 | 0.1 |
Interest cost | 1.2 | 0.1 |
Expected return on plan assets | (1.2) | (0.2) |
Amortization of prior service (credit) cost | 0 | 0 |
Net periodic benefit cost (income) | 1.5 | 0 |
Non-U.S. | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Service cost | 0.9 | 0.8 |
Interest cost | 2.1 | 2.3 |
Expected return on plan assets | (2.3) | (2.8) |
Amortization of prior service (credit) cost | 0 | 0.1 |
Net periodic benefit cost (income) | 0.7 | 0.4 |
Other Post Retirement | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Service cost | 0 | 0 |
Interest cost | 0 | 0 |
Expected return on plan assets | 0 | 0 |
Amortization of prior service (credit) cost | (0.1) | 0 |
Net periodic benefit cost (income) | $ (0.1) | $ 0 |
Other Balance Sheet Accounts (D
Other Balance Sheet Accounts (Details) - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 |
Other Current Liabilities | ||
Customer volume rebates | $ 28.1 | $ 33.5 |
Accrued compensation | 25.5 | 27.1 |
Income tax payable | 15.8 | 23.3 |
Accrued interest | 9 | 3.9 |
Pension liabilities | 1.2 | 1.1 |
Other accrued liabilities | 41.4 | 36.6 |
Total other current liabilities | $ 121 | $ 125.5 |
Commitments and Contingent Li46
Commitments and Contingent Liabilities (Details) $ in Millions | Mar. 31, 2016USD ($) |
Standby Letter of Credit | |
Loss Contingencies [Line Items] | |
Gross financial assurances issued and outstanding | $ 2.6 |
Restructuring and Repositioni47
Restructuring and Repositioning Expenses - Narrative (Details) - USD ($) $ in Millions | Feb. 03, 2016 | Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 |
Changes in Business Environment and Structure | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring expenses | $ 0.9 | $ 4.3 | ||
Total cash payments for repositioning costs | 1.8 | |||
Changes in Business Environment and Structure | Employee Severance | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring liabilities | 2 | $ 1.4 | ||
Changes in Business Environment and Structure | Specialty Construction Chemicals | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring expenses | 0.5 | 2.7 | ||
Changes in Business Environment and Structure | Specialty Building Materials | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring expenses | 0.4 | 0.9 | ||
Changes in Business Environment and Structure | Darex Packaging Technologies | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring expenses | 0.7 | |||
Repositioning | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring expenses | 4.3 | $ 0 | ||
Estimated period for transition expenses to be incurred | 12 months | |||
Repositioning | Professional Fees and Employee-Related Costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total cash payments for repositioning costs | 3.9 | |||
Repositioning | Capital Expenditures | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total cash payments for repositioning costs | 0.9 | |||
Repositioning | Taxes | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total cash payments for repositioning costs | $ 5.9 | |||
Repositioning | Minimum | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Estimated transition expenses | $ 10 | |||
Repositioning | Maximum | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Estimated transition expenses | $ 15 |
Restructuring and Repositioni48
Restructuring and Repositioning Expenses - Restructuring Liability (Details) - Changes in Business Environment and Structure - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Restructuring Liability (In millions) | ||
Accruals for severance and other costs | $ 0.9 | $ 4.3 |
Payments | (1.8) | |
Currency translation adjustments and other | $ 1.5 |
Restructuring and Repositioni49
Restructuring and Repositioning Expenses - Repositioning Expenses (Details) - Repositioning - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring Charges | $ 4.3 | $ 0 |
Professional fees | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring Charges | 2.1 | |
Employee-related costs | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring Charges | $ 2.2 |
Other Comprehensive Income (L50
Other Comprehensive Income (Loss) - Pre-Tax, Tax, and After-Tax Components of Other Comprehensive Income (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
After-Tax Amount | ||
Total other comprehensive income (loss) | $ 3.9 | $ (29.4) |
Net prior service credit (cost) | ||
Pre-Tax Amount | ||
Amortization of net prior service cost included in net periodic benefit cost, pre-tax | (0.1) | 0.1 |
Assumption of net prior service credit and net actuarial loss, pre-tax | 1.2 | |
Tax Benefit/ (Expense) | ||
Amortization of net prior service cost included in net periodic benefit cost, tax | 0 | (0.1) |
Assumption of net prior service credit and net actuarial loss, tax | (0.4) | |
After-Tax Amount | ||
Amortization of net prior service cost included in net periodic benefit cost, after-tax | (0.1) | 0 |
Assumption of net prior service credit and net actuarial loss, after-tax | 0.8 | |
Net actuarial gain (loss) | ||
Pre-Tax Amount | ||
Assumption of net prior service credit and net actuarial loss, pre-tax | (1.1) | |
Tax Benefit/ (Expense) | ||
Assumption of net prior service credit and net actuarial loss, tax | 0.4 | |
After-Tax Amount | ||
Assumption of net prior service credit and net actuarial loss, after-tax | (0.7) | |
Benefit plans, net | ||
Pre-Tax Amount | ||
Other comprehensive income (loss), pre-tax | 0 | 0.1 |
Tax Benefit/ (Expense) | ||
Other comprehensive income (loss), tax | 0 | (0.1) |
After-Tax Amount | ||
Amortization of net prior service cost included in net periodic benefit cost, after-tax | 0.1 | 0 |
Assumption of net prior service credit and net actuarial loss, after-tax | 0.1 | 0 |
Total other comprehensive income (loss) | 0 | 0 |
Currency translation adjustments | ||
Pre-Tax Amount | ||
Other comprehensive income (loss), pre-tax | 3.9 | (29.6) |
Tax Benefit/ (Expense) | ||
Other comprehensive income (loss), tax | 0 | 0 |
After-Tax Amount | ||
Amortization of net prior service cost included in net periodic benefit cost, after-tax | 0 | 0 |
Assumption of net prior service credit and net actuarial loss, after-tax | 3.9 | (29.6) |
Total other comprehensive income (loss) | 3.9 | (29.6) |
Gain (loss) from hedging activities | ||
Pre-Tax Amount | ||
Other comprehensive income (loss), pre-tax | (0.2) | 0.2 |
Tax Benefit/ (Expense) | ||
Other comprehensive income (loss), tax | 0 | (0.1) |
After-Tax Amount | ||
Amortization of net prior service cost included in net periodic benefit cost, after-tax | (0.3) | (0.2) |
Assumption of net prior service credit and net actuarial loss, after-tax | (0.5) | (0.1) |
Total other comprehensive income (loss) | (0.2) | 0.1 |
Other comprehensive income attributable to GCP shareholders | ||
Pre-Tax Amount | ||
Other comprehensive income (loss), pre-tax | 3.7 | (29.3) |
Tax Benefit/ (Expense) | ||
Other comprehensive income (loss), tax | 0 | (0.2) |
After-Tax Amount | ||
Amortization of net prior service cost included in net periodic benefit cost, after-tax | (0.2) | (0.2) |
Assumption of net prior service credit and net actuarial loss, after-tax | 3.5 | (29.7) |
Total other comprehensive income (loss) | $ 3.7 | $ (29.5) |
Other Comprehensive Income (L51
Other Comprehensive Income (Loss) - Changes in Accumulated Other Comprehensive Income (Loss), Net of Tax (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2016USD ($)country | Mar. 31, 2015USD ($) | |
Changes in accumulated other comprehensive income (loss), net of tax | ||
Beginning balance | $ 470.6 | |
Total other comprehensive income (loss) | 3.9 | $ (29.4) |
Ending balance | $ (186.2) | |
Number of countries in which entity operates | country | 40 | |
Defined Benefit Pension and Other Postretirement Plans | ||
Changes in accumulated other comprehensive income (loss), net of tax | ||
Beginning balance | $ 0.1 | (0.3) |
Other comprehensive income before reclassifications | 0.1 | 0 |
Amounts reclassified from accumulated other comprehensive income | (0.1) | 0 |
Total other comprehensive income (loss) | 0 | 0 |
Ending balance | 0.1 | (0.3) |
Currency Translation Adjustments | ||
Changes in accumulated other comprehensive income (loss), net of tax | ||
Beginning balance | (127.8) | (47.7) |
Other comprehensive income before reclassifications | 3.9 | (29.6) |
Amounts reclassified from accumulated other comprehensive income | 0 | 0 |
Total other comprehensive income (loss) | 3.9 | (29.6) |
Ending balance | (123.9) | (77.3) |
Gain (Loss) from Hedging Activities | ||
Changes in accumulated other comprehensive income (loss), net of tax | ||
Beginning balance | 0 | (0.2) |
Other comprehensive income before reclassifications | (0.5) | (0.1) |
Amounts reclassified from accumulated other comprehensive income | 0.3 | 0.2 |
Total other comprehensive income (loss) | (0.2) | 0.1 |
Ending balance | (0.2) | (0.1) |
Total | ||
Changes in accumulated other comprehensive income (loss), net of tax | ||
Beginning balance | (127.7) | (48.2) |
Other comprehensive income before reclassifications | 3.5 | (29.7) |
Amounts reclassified from accumulated other comprehensive income | 0.2 | 0.2 |
Total other comprehensive income (loss) | 3.7 | (29.5) |
Ending balance | $ (124) | $ (77.7) |
Stock Incentive Plans - Narrati
Stock Incentive Plans - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | Feb. 03, 2016 | Feb. 02, 2016 | Mar. 31, 2016 | Mar. 31, 2015 |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||
Total cash and non-cash stock-based compensation cost | $ 1.2 | $ 0.8 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares repurchased | 83,799 | |||
Total unrecognized compensation expense related to the RSU and PBU awards | $ 10.5 | |||
Stock Option | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock options, exercise price, percent of market value on the date of grant | 100.00% | |||
Stock option awards, contractual term | 5 years | |||
Award vesting period | 3 years | |||
Intrinsic value of all options exercised | $ 3.5 | |||
Unrecognized stock-based compensation expense for stock options | $ 3.7 | |||
Unrecognized stock-based compensation expense for stock options, period of recognition | 1 year 6 months 12 days | |||
Stock Option | Vesting 1, Year 1 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting percentage | 33.33% | |||
Stock Option | Vesting 1, Year 2 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting percentage | 33.33% | |||
Stock Option | Vesting 1, Year 3 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting percentage | 33.33% | |||
Stock Option | W.R. Grace | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock option awards, contractual term | 7 years | |||
Restricted Stock Units (RSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period | 3 years | |||
Fully vested awards settled in shares | 25,000 | |||
Fully vested awards settled in cash | $ 0.5 | |||
Percent of units expected to settle in cash, vesting in 2016 | 18.00% | |||
Shares vesting in 2016 | 80,621 | |||
Percent of units expected to settle in cash, vesting in 2017 | 0.00% | |||
Shares vesting in 2017 | 68,052 | |||
Percent of units expected to settle in cash, vesting in 2018 | 38.00% | |||
Shares vesting in 2018 | 161,055 | |||
Percent of units expected to settle in cash, vesting in 2019 | 0.00% | |||
Shares vesting in 2019 | 245,018 | |||
Awards granted (in shares) | 320,000 | |||
Weighted average grant date fair value (in usd per share) | $ 17.18 | |||
Restricted Stock Units (RSUs) | Vesting 1, Year 1 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting percentage | 33.33% | |||
Restricted Stock Units (RSUs) | Vesting 1, Year 2 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting percentage | 33.33% | |||
Restricted Stock Units (RSUs) | Vesting 1, Year 3 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting percentage | 33.33% | |||
Restricted Stock Units (RSUs) | Vesting 2, Year 1 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting percentage | 0.00% | |||
Restricted Stock Units (RSUs) | Vesting 2, Year 2 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting percentage | 0.00% | |||
Restricted Stock Units (RSUs) | Vesting 2, Year 3 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting percentage | 100.00% | |||
Sign-On Awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period | 2 years | |||
Award vesting percentage | 100.00% | |||
Restricted Stock Units (RSUs) and Performance Based Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized stock-based compensation expense for stock options, period of recognition | 3 years 1 month 10 days | |||
2016 Stock Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares repurchased | 84,000 | |||
Number of shares of common stock available for issuance | 1,734,650 | |||
2016 Stock Incentive Plan | Performance Based Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Awards granted (in shares) | 155,501 | |||
Weighted average grant date fair value (in usd per share) | $ 17.04 | |||
Percent of units expected to settle in common stock | 100.00% | |||
Performance period | 3 years | |||
2016 Stock Incentive Plan | Performance Based Units | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected payout, percent of target | 0.00% | |||
2016 Stock Incentive Plan | Performance Based Units | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected payout, percent of target | 200.00% |
Stock Incentive Plans - Expense
Stock Incentive Plans - Expenses Related to Stock Options Granted, Valuation Assumptions (Details) - Stock Option | 3 Months Ended |
Mar. 31, 2016$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free interest rate | 1.11% |
Volatility, minimum | 29.60% |
Volatility, maximum | 33.00% |
Dividend yield | 0.00% |
Average fair value per stock option (in usd per share) | $ 4.86 |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Average life of options (years) | 4 years |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Average life of options (years) | 5 years |
Stock Incentive Plans - Stock O
Stock Incentive Plans - Stock Option Activity (Details) - Stock Option $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended |
Mar. 31, 2016USD ($)$ / sharesshares | |
Number of Shares (in thousands) | |
Outstanding, December 31, 2015 (in shares) | shares | 0 |
Converted on February 3, 2016 (in shares) | shares | 2,236 |
Options exercised (in shares) | shares | 406 |
Options forfeited (in shares) | shares | 0 |
Options granted (in shares) | shares | 741 |
Outstanding, March 31, 2016 (in shares) | shares | 2,571 |
Exercisable, March 31, 2016 (in shares) | shares | 872 |
Weighted-Average Exercise Price | |
Outstanding, December 31, 2015 (in usd per share) | $ / shares | $ 0 |
Converted on February 3, 2016 (in usd per share) | $ / shares | 14.36 |
Options exercised (in usd per share) | $ / shares | 8.47 |
Options forfeited (in usd per share) | $ / shares | 0 |
Options granted (in usd per share) | $ / shares | 17.14 |
Outstanding, March 31, 2016 (in usd per share) | $ / shares | 16.09 |
Exercisable, March 31, 2016 (in usd per share) | $ / shares | $ 12.42 |
Other Disclosures | |
Outstanding, weighted-average remaining contractual term | 3 years 10 months 24 days |
Exercisable, weighted-average remaining contractual term | 1 year 8 months 5 days |
Outstanding, aggregated intrinsic value | $ | $ 10,142 |
Exercisable, aggregated intrinsic value | $ | $ 6,648 |
Stock Incentive Plans - Restric
Stock Incentive Plans - Restricted Stock Units Award Activity (Details) - Restricted Stock Units (RSUs) shares in Thousands | 3 Months Ended |
Mar. 31, 2016$ / sharesshares | |
Number Of Shares (in thousands) | |
Outstanding, December 31, 2015 (in shares) | shares | 0 |
Converted on February 3, 2016 (in shares) | shares | 265 |
RSUs settled (in shares) | shares | 31 |
RSUs granted (in shares) | shares | 320 |
RSUs outstanding, March 31, 2016 (in shares) | shares | 554 |
Weighted Average Grant Date Fair Value | |
Outstanding, December 31, 2015 (in usd per share) | $ / shares | $ 0 |
Converted on February 3, 2016 (in usd per share) | $ / shares | 17 |
RSUs settled (in usd per share) | $ / shares | 16.90 |
RSUs granted (in usd per share) | $ / shares | 17.18 |
RSUs outstanding, March 31, 2016 (in usd per share) | $ / shares | $ 17.11 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Numerators | ||
Net income attributable to GCP shareholders | $ 17 | $ 20.5 |
Denominators | ||
Weighted average common shares—basic calculation | 70,600,000 | 70,500,000 |
Dilutive effect of employee stock options (in shares) | 300,000 | 0 |
Weighted average common shares—diluted calculation | 70,900,000 | 70,500,000 |
Basic earnings per share (in usd per share) | $ 0.24 | $ 0.29 |
Diluted earnings per share (in usd per share) | $ 0.24 | $ 0.29 |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Number of shares repurchased in connection with equity compensation programs | 83,799 | |
Value of common stock repurchased in connection with equity compensation programs | $ 1.7 | |
Stock Option | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 600,000 | |
Restricted Stock Units (RSUs) | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 200,000 |
Related Party Transactions an57
Related Party Transactions and Transactions with Grace - Related Party Expenses and Agreements (Details) - W.R. Grace & Co. - USD ($) $ in Millions | Feb. 03, 2016 | Feb. 02, 2016 | Mar. 31, 2016 | Mar. 31, 2015 |
Related Party Transaction [Line Items] | ||||
Allocated general corporate expenses | $ 2 | $ 13.8 | ||
Indemnified receivables, tax | $ 4.4 | |||
Maximum | ||||
Related Party Transaction [Line Items] | ||||
Transition period | 18 months |
Related Party Transactions an58
Related Party Transactions and Transactions with Grace - Parent Company Equity (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Related Party Transaction [Line Items] | ||
Total net transfers to parent | $ (677.9) | $ (0.7) |
Transfers (to) from parent, net per Consolidated Statements of Cash Flows | (764.6) | 10.6 |
Distribution to Grace related to the Separation | 750 | |
W.R. Grace & Co. | ||
Related Party Transaction [Line Items] | ||
Total net transfers to parent | (677.9) | (0.7) |
Other, net | (86.7) | 11.3 |
Transfers (to) from parent, net per Consolidated Statements of Cash Flows | (764.6) | 10.6 |
W.R. Grace & Co. | Cash pooling and general financing activities | ||
Related Party Transaction [Line Items] | ||
Total net transfers to parent | (690.8) | (38.6) |
W.R. Grace & Co. | GCP expenses funded by parent | ||
Related Party Transaction [Line Items] | ||
Total net transfers to parent | 6.6 | 14.8 |
W.R. Grace & Co. | Corporate costs allocations | ||
Related Party Transaction [Line Items] | ||
Total net transfers to parent | 2 | 13.8 |
W.R. Grace & Co. | Provision for income taxes | ||
Related Party Transaction [Line Items] | ||
Total net transfers to parent | 4.3 | $ 9.3 |
W.R. Grace & Co. | Net pension liabilities | ||
Related Party Transaction [Line Items] | ||
Other, net | (44) | |
W.R. Grace & Co. | Fixed assets | ||
Related Party Transaction [Line Items] | ||
Other, net | (23) | |
W.R. Grace & Co. | Related party debt, deferred tax, and other | ||
Related Party Transaction [Line Items] | ||
Other, net | $ (42) |
Operating Segment Information -
Operating Segment Information - Schedule of Operating Segment Data (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2016USD ($)segment | Mar. 31, 2015USD ($) | |
Segment Reporting [Abstract] | ||
Number of operating segments | segment | 3 | |
Segment Reporting Information [Line Items] | ||
Pension and Other Postretirement Benefit Expense | $ 2.7 | $ 0.5 |
Net Sales | ||
Net sales | 314.1 | 322.7 |
Adjusted EBIT | ||
Selling, general and administrative expenses | 71.1 | 71.5 |
Certain pension costs | (2.4) | (0.4) |
Total | 45.8 | 34.9 |
Operating Segments | Specialty Construction Chemicals | ||
Net Sales | ||
Net sales | 137 | 152 |
Adjusted EBIT | ||
Operating income | 9.9 | 8.9 |
Operating Segments | Specialty Building Materials | ||
Net Sales | ||
Net sales | 100.7 | 87.2 |
Adjusted EBIT | ||
Operating income | 27.8 | 17.1 |
Operating Segments | Darex Packaging Technologies | ||
Net Sales | ||
Net sales | 76.4 | 83.5 |
Adjusted EBIT | ||
Operating income | 17.2 | 15 |
Corporate, Non-Segment | ||
Adjusted EBIT | ||
Selling, general and administrative expenses | (6.9) | (4.9) |
Segment Reconciling Items | ||
Adjusted EBIT | ||
Certain pension costs | (2.2) | (1.2) |
Repositioning | ||
Adjusted EBIT | ||
Restructuring Charges | 4.3 | 0 |
Changes in Business Environment and Structure | ||
Adjusted EBIT | ||
Restructuring Charges | 0.9 | 4.3 |
Changes in Business Environment and Structure | Specialty Construction Chemicals | ||
Adjusted EBIT | ||
Restructuring Charges | 0.5 | 2.7 |
Changes in Business Environment and Structure | Specialty Building Materials | ||
Adjusted EBIT | ||
Restructuring Charges | $ 0.4 | 0.9 |
Changes in Business Environment and Structure | Darex Packaging Technologies | ||
Adjusted EBIT | ||
Restructuring Charges | $ 0.7 |
Operating Segment Information60
Operating Segment Information - Reconciliation of Operating Segment Data to Financial Statements (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Segment Reporting Information [Line Items] | ||
GCP Adjusted EBIT | $ 45.8 | $ 34.9 |
Pension MTM adjustment and other related costs, net | (2.7) | (0.5) |
Net income attributable to noncontrolling interests | 0.4 | 0.1 |
Interest expense, net | (12.5) | (0.3) |
Income before income taxes | 25.8 | 29.9 |
Repositioning | ||
Segment Reporting Information [Line Items] | ||
Restructuring expenses | (4.3) | 0 |
Changes in Business Environment and Structure | ||
Segment Reporting Information [Line Items] | ||
Restructuring expenses | $ (0.9) | $ (4.3) |
Operating Segment Information61
Operating Segment Information - Geographic Area Data (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Segment Reporting Information [Line Items] | ||
Net sales | $ 314.1 | $ 322.7 |
Total North America | ||
Segment Reporting Information [Line Items] | ||
Net sales | 129.8 | 115.6 |
United States | ||
Segment Reporting Information [Line Items] | ||
Net sales | 123.1 | 110.4 |
Canada and Puerto Rico | ||
Segment Reporting Information [Line Items] | ||
Net sales | 6.7 | 5.2 |
Europe Middle East Africa | ||
Segment Reporting Information [Line Items] | ||
Net sales | 79.3 | 80.2 |
Asia Pacific | ||
Segment Reporting Information [Line Items] | ||
Net sales | 74.9 | 78.6 |
Latin America | ||
Segment Reporting Information [Line Items] | ||
Net sales | $ 30.1 | $ 48.3 |