Chapter 11 Information (Tables)

6 Months Ended

Jun. 30, 2013

Components of liabilities subject to compromise

Components of liabilities subject to compromise are as follows:



(In millions)	June 30, 2013			December 31, 2012
Asbestos-related contingencies	$	2,065.0		$	2,065.0
Pre-petition bank debt plus accrued interest	952.3			937.2
Environmental contingencies	137.0			140.5
Unfunded special pension arrangements	129.6			134.3
Income tax contingencies	88.5			87.6
Postretirement benefits other than pension	59.0			63.9
Drawn letters of credit plus accrued interest	36.8			36.1
Accounts payable	31.3			31.3
Retained obligations of divested businesses	28.7			29.0
Other accrued liabilities	107.5			102.3
Reclassification to current liabilities(1)	(10.7		)	(10.1		)
Total Liabilities Subject to Compromise	$	3,625.0		$	3,617.1

_______________________________________________________________________________


(1)	As of June 30, 2013, and December 31, 2012, approximately $10.7 million and $10.1 million, respectively, of certain pension and postretirement benefit obligations subject to compromise have been presented in "other current liabilities" in the Consolidated Balance Sheets in accordance with ASC 715 "Compensation—Retirement Benefits".

Change in Liabilities Subject to Compromise

The following table is a reconciliation of the changes in pre-filing date liability balances for the period from the Filing Date through June 30, 2013.



(In millions) (Unaudited)	Cumulative Since Filing
Balance, Filing Date April 2, 2001	$	2,366.0
Cash disbursements and/or reclassifications under Bankruptcy Court orders:
Payment of environmental settlement liability	(252.0		)
Freight and distribution order	(5.7		)
Trade accounts payable order	(9.1		)
Resolution of contingencies subject to Chapter 11	(130.0		)
Other court orders for payments of certain operating expenses	(389.0		)
Expense (income) items:
Interest on pre-petition liabilities	568.4
Employee-related accruals	125.3
Provision for asbestos-related contingencies	1,109.8
Provision for environmental contingencies	357.3
Release of income tax contingencies	(79.6		)
Balance sheet reclassifications	(36.4		)
Balance, end of period	$	3,625.0

Chapter 11 Expenses



	Three Months Ended June 30,						Six Months Ended June 30,
(In millions)	2013			2012			2013			2012
Legal and financial advisory fees	$	3.8		$	3.9		$	8.8		$	8.6
Interest income	(0.5		)	(0.2		)	(0.7		)	(0.4		)
Chapter 11 expenses, net of interest income	$	3.3		$	3.7		$	8.1		$	8.2

Debtor-in-Possession Statements of Operations

W. R. Grace & Co.—Chapter 11 Filing Entities

Debtor-in-Possession Statements of Operations



	Six Months Ended June 30,
(In millions) (Unaudited)	2013			2012
Net sales, including intercompany	$	720.3		$	774.8
Cost of goods sold, including intercompany, exclusive of depreciation and amortization shown separately below	437.0			463.2
Selling, general and administrative expenses	120.7			131.8
Defined benefit pension expense	24.0			25.3
Depreciation and amortization	34.6			33.5
Chapter 11 expenses, net of interest income	8.1			8.2
Libby medical program settlement	—			19.5
Research and development expenses	18.8			18.4
Interest expense and related financing costs	18.6			20.4
Restructuring expenses	2.4			2.8
Provision for environmental remediation	2.1			0.9
Other income, net	(36.0		)	(38.2		)
	630.3			685.8
Income before income taxes and equity in net income of non-filing entities	90.0			89.0
Provision for income taxes	(38.0		)	(34.3		)
Income before equity in net income of non-filing entities	52.0			54.7
Equity in net income of non-filing entities	83.7			75.5
Net income attributable to W. R. Grace & Co. shareholders	$	135.7		$	130.2

Debtor-in-Possession Statements of Cash Flows

W. R. Grace & Co.—Chapter 11 Filing Entities

Debtor-in-Possession Statements of Cash Flows



	Six Months Ended June 30,
(In millions) (Unaudited)	2013			2012
Operating Activities
Net income attributable to W. R. Grace & Co. shareholders	$	135.7		$	130.2
Reconciliation to net cash provided by operating activities:
Depreciation and amortization	34.6			33.5
Equity in net income of non-filing entities	(83.7		)	(75.5		)
Provision for income taxes	38.0			34.3
Income taxes paid, net of refunds	(3.4		)	(1.8		)
Libby medical program settlement	—			19.5
Defined benefit pension expense	24.0			25.3
Payments under defined benefit pension arrangements	(52.8		)	(112.1		)
Changes in assets and liabilities, excluding the effect of foreign currency translation:
Trade accounts receivable	(10.3		)	(16.5		)
Inventories	(27.3		)	37.2
Accounts payable	16.8			(7.1		)
All other items, net	11.9			(23.9		)
Net cash provided by operating activities	83.5			43.1
Investing Activities
Capital expenditures	(39.9		)	(40.1		)
Transfer to short-term investments	(500.0		)	—
Transfer from (to) restricted cash and cash equivalents	5.1			(1.6		)
Net cash used for investing activities	(534.8		)	(41.7		)
Financing Activities
Net repayments under credit arrangements	(0.4		)	(1.0		)
Proceeds from exercise of stock options	25.2			17.8
Net cash provided by financing activities	24.8			16.8
Net (decrease) increase in cash and cash equivalents	(426.5		)	18.2
Cash and cash equivalents, beginning of period	1,064.2			788.6
Cash and cash equivalents, end of period	$	637.7		$	806.8

Debtor-in-Possession Balance Sheets

W. R. Grace & Co.—Chapter 11 Filing Entities

Debtor-in-Possession Balance Sheets



(In millions) (Unaudited)	June 30, 2013		December 31, 2012
ASSETS
Current Assets
Cash and cash equivalents	$	637.7	$	1,064.2
Short-term investments	500.0		—
Restricted cash and cash equivalents	113.2		118.3
Trade accounts receivable, net	142.9		132.6
Accounts receivable—unconsolidated affiliate	10.3		14.1
Receivables from non-filing entities, net	138.6		160.5
Inventories	133.6		106.3
Other current assets	44.6		58.5
Total Current Assets	1,720.9		1,654.5
Properties and equipment, net	440.8		433.5
Deferred income taxes	867.3		935.5
Asbestos-related insurance	500.0		500.0
Loans receivable from non-filing entities, net	282.7		282.1
Investment in non-filing entities	509.3		449.5
Investment in unconsolidated affiliate	99.5		85.5
Other assets	50.4		47.2
Total Assets	$	4,470.9	$	4,387.8
LIABILITIES AND EQUITY
Liabilities Not Subject to Compromise
Current liabilities (including $7.8 due to unconsolidated affiliate) (2012—$6.0)	$	222.7	$	244.7
Underfunded defined benefit pension plans	42.4		161.0
Other liabilities (including $22.8 due to unconsolidated affiliate) (2012—$22.4)	57.1		56.5
Total Liabilities Not Subject to Compromise	322.2		462.2
Liabilities Subject to Compromise	3,625.0		3,617.1
Total Liabilities	3,947.2		4,079.3
Total W. R. Grace & Co. Shareholders' Equity	523.6		308.4
Noncontrolling interests in Chapter 11 filing entities	0.1		0.1
Total Equity	523.7		308.5
Total Liabilities and Equity	$	4,470.9	$	4,387.8