Operating Segment Information

6 Months Ended

Jun. 30, 2015

Segment Reporting [Abstract]

Operating Segment Information

Grace is a global producer of specialty chemicals and specialty materials. Grace manages its business through three operating segments: Grace Catalysts Technologies, Grace Materials Technologies, and Grace Construction Products. Grace Catalysts Technologies includes catalysts and related products and technologies used in refining, petrochemical and other chemical manufacturing applications. Grace's Advanced Refining Technologies (ART) joint venture is managed in this segment. ART is an unconsolidated affiliate, and Grace accounts for ART using the equity method as discussed in Note 14. Grace Materials Technologies includes packaging products and engineered materials, coatings and sealants used in consumer, industrial, and pharmaceutical applications. Grace Construction Products includes specialty construction chemicals and specialty building materials used in commercial, infrastructure and residential construction. Intersegment sales are eliminated in consolidation. The table below presents information related to Grace'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.

Grace excludes defined benefit pension expense from the calculation of segment operating income. Grace believes that the exclusion of defined benefit pension expense provides a better indicator of its operating segment performance as defined benefit pension expense is not managed at an operating segment level.

Grace defines Adjusted EBIT (a non-GAAP financial measure) to be net income adjusted for interest income and expense; income taxes; costs related to Chapter 11 and asbestos; restructuring and repositioning expenses and asset impairments; pension costs other than service and interest costs, expected returns on plan assets, and amortization of prior service costs/credits; income and expense items related to divested businesses, product lines, and certain other investments; gains and losses on sales of businesses, product lines, and certain other investments; and certain other unusual or infrequent items that are not representative of underlying trends.

Operating Segment Data

	Three Months Ended June 30,						Six Months Ended June 30,
(In millions)	2015			2014			2015			2014
Net Sales
Catalysts Technologies	$	289.3		$	313.2		$	570.3		$	597.7
Materials Technologies	204.2			236.1			404.5			455.9
Construction Products	288.6			288.7			527.9			528.9
Total	$	782.1		$	838.0		$	1,502.7		$	1,582.5
Adjusted EBIT
Catalysts Technologies segment operating income	$	86.6		$	97.5		$	160.3		$	168.7
Materials Technologies segment operating income	45.7			49.7			86.7			95.2
Construction Products segment operating income	53.9			45.0			83.3			70.4
Corporate costs	(23.1		)	(22.8		)	(43.7		)	(45.3		)
Gain on termination of postretirement plans related to current businesses	—			4.7			—			4.7
Certain pension costs	(6.3		)	(8.0		)	(12.8		)	(16.3		)
Total	$	156.8		$	166.1		$	273.8		$	277.4

Corporate costs include corporate support function costs and other corporate costs such as professional fees and insurance premiums.

Grace Adjusted EBIT for the three and six months endedJune 30, 2015 and 2014, is reconciled below to income before income taxes presented in the accompanying Consolidated Statements of Operations.

Reconciliation of Operating Segment Data to Financial Statements

	Three Months Ended June 30,						Six Months Ended June 30,
(In millions)	2015			2014			2015			2014
Grace Adjusted EBIT	$	156.8		$	166.1		$	273.8		$	277.4
(Costs) benefit related to Chapter 11 and asbestos, net	(2.7		)	(1.5		)	7.0			(17.0		)
Pension MTM adjustment and other related costs, net	—			—			(4.7		)	4.8
Gain on termination of postretirement plans related to divested businesses	—			3.2			—			3.2
Restructuring expenses and asset impairments	(4.4		)	(11.7		)	(13.9		)	(12.4		)
Repositioning expenses	(13.4		)	—			(20.3		)	—
Gain on sale of product line	—			0.2			—			0.2
Income and expense items related to divested businesses	(0.4		)	(3.6		)	0.3			(4.7		)
Interest expense, net	(24.9		)	(24.2		)	(49.8		)	(43.1		)
Net income attributable to noncontrolling interests	0.1			0.5			0.2			0.7
Income before income taxes	$	111.1		$	129.0		$	192.6		$	209.1

The table below presents information related to the geographic areas in which Grace operates. Sales are attributed to geographic areas based on customer location.

Geographic Area Data

	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2015		2014		2015		2014
Net Sales
United States	$	248.9	$	238.7	$	463.5	$	444.7
Canada and Puerto Rico	25.3		21.6		43.1		38.2
Total North America	274.2		260.3		506.6		482.9
Europe Middle East Africa	242.5		289.8		477.7		564.7
Asia Pacific	185.7		190.1		362.3		355.0
Latin America	79.7		97.8		156.1		179.9
Total	$	782.1	$	838.0	$	1,502.7	$	1,582.5