Grace accounts for its 50% ownership interest in ART, its joint venture with Chevron, using the equity method of accounting. Grace’s investment in ART amounted to $144.4 million and $125.9 million as of September 30, 2018, and December 31, 2017, respectively, and the amount included in “equity in earnings of unconsolidated affiliate” in the accompanying Consolidated Statements of Operations totaled $5.9 million and $19.5 million for the three and nine months ended September 30, 2018, compared with $4.8 million and $17.9 million for the corresponding prior-year periods. ART is a private, limited liability company, taxed as a partnership, and accordingly does not have a quoted market price available.

The following summary presents ART’s assets, liabilities and results of operations.



(In millions)	September 30, 2018		December 31, 2017
Summary Balance Sheet information:
Current assets	$	308.0	$	239.8
Noncurrent assets	137.9		91.5
Total assets	$	445.9	$	331.3

Current liabilities	$	160.1	$	82.4
Noncurrent liabilities	0.3		0.3
Total liabilities	$	160.4	$	82.7



	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2018		2017		2018		2017
Summary Statement of Operations information:
Net sales	$	120.2	$	113.5	$	308.4	$	321.4
Costs and expenses applicable to net sales	105.0		100.1		259.7		273.7
Income before income taxes	12.5		10.4		40.7		37.2
Net income	11.8		9.6		39.5		35.8

Grace and ART transact business on a regular basis and maintain several agreements in order to operate the joint venture. These agreements are treated as related party activities with an unconsolidated affiliate. Product manufactured by Grace for ART is accounted for on a net basis, with a mark-up, in “cost of goods sold” in the Consolidated Statements of Operations. Grace also receives reimbursement from ART for fixed costs, research and development, selling, general and administrative services, and depreciation. Grace records reimbursements against the respective line items on Grace’s Consolidated Statement of Operations. The table below presents summary financial data related to transactions between Grace and ART.



	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2018		2017		2018		2017
Product manufactured for ART	$	58.7	$	54.5	$	169.1	$	159.0
Mark-up on product manufactured for ART included as a reduction of Grace’s cost of goods sold	1.1		1.1		3.3		3.1
Charges for fixed costs; research and development; selling, general and administrative services; and depreciation to ART	10.5		10.4		31.6		31.2

The table below presents balances in Grace’s Consolidated Financial Statements related to ART.



(in millions)	September 30, 2018		December 31, 2017
Accounts receivable	$	15.1	$	20.1
Noncurrent asset	74.7		32.7
Accounts payable	31.2		22.3
Debt payable within one year	8.6		8.6
Debt payable after one year	39.5		33.8
Noncurrent liability	74.7		32.7

The noncurrent asset and noncurrent liability in the table above represent spending to date related to a residue hydroprocessing catalyst production plant that is under construction in Lake Charles, Louisiana. Grace manages the design and construction of the plant, and the asset will continue to be included in “other assets” in Grace’s Consolidated Balance Sheets until construction is completed. Grace has likewise recorded a liability for the transfer of the asset to ART upon completion, included in “other liabilities” in the Consolidated Balance Sheets.

Grace and Chevron provide lines of credit in the amount of $15.0 million each at a commitment fee of 0.1% of the credit amount. These agreements have been approved by the ART Executive Committee for renewal until February 2019. No amounts were outstanding at September 30, 2018, and December 31, 2017.