Operating Segment Information

3 Months Ended

Mar. 31, 2012

Operating Segment Information

Operating Segment Information

15. Operating Segment Information

        Grace is a global producer of specialty chemicals and specialty materials. In the 2012 first quarter, Grace announced a realignment of its business into three operating segments: Grace Catalysts Technologies, Grace Materials Technologies, and Grace Construction Products. Grace made this change to align its operating segments more closely with the markets it serves, and to better position its businesses to realize operational efficiencies and reduce overhead costs. Grace Catalysts Technologies includes catalysts and related products 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 16. Grace Materials Technologies includes packaging technologies 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 also 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, net Chapter 11- and asbestos-related costs, restructuring expenses and related asset impairments, divestment expenses, and gains and losses on sales of product lines and other investments.

Operating Segment Data

	Three Months Ended March 31,
(In millions)	2012			2011
Net Sales
Grace Catalysts Technologies	$	313.2		$	275.7
Grace Materials Technologies		212.9			212.4
Grace Construction Products		228.3			207.6
Total	$	754.4		$	695.7
Adjusted EBIT
Grace Catalysts Technologies segment operating income	$	99.2		$	77.9
Grace Materials Technologies segment operating income		35.8			40.4
Grace Construction Products segment operating income		20.5			16.3
Corporate costs		(25.4	)		(22.4	)
Defined benefit pension expense		(18.8	)		(16.5	)
Total	$	111.3		$	95.7

(In millions)	March 31, 2012		December 31, 2011
Total Assets
Grace Catalysts Technologies	$	813.2	$	804.5
Grace Materials Technologies		494.0		481.1
Grace Construction Products		558.4		545.9
Corporate		2,594.4		2,662.5
Total	$	4,460.0	$	4,494.0

        Corporate costs include corporate support function costs and other corporate costs such as non-asbestos environmental remediation, insurance premiums and professional fees.

        Grace Adjusted EBIT for the three months ended March 31, 2012 and 2011 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 March 31,
(In millions)	2012			2011
Grace Adjusted EBIT	$	111.3		$	95.7
Chapter 11- and asbestos-related costs, net		(5.2	)		(5.7	)
Restructuring expenses and related asset impairments		(3.0	)		(0.2	)
Divestment expenses		(0.2	)		—
Interest expense and related financing costs		(11.3	)		(10.4	)
Interest income of non-Debtor subsidiaries		0.1			0.3
Net income (loss) attributable to noncontrolling interests		0.4			(0.2	)
Income before income taxes	$	92.1		$	79.5

        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 March 31,
(In millions)	2012		2011
Net Sales
United States	$	202.3	$	206.1
Canada and Puerto Rico		21.3		19.1
Total North America		223.6		225.2
Europe Middle East Africa		293.1		272.2
Asia Pacific		162.4		130.3
Latin America		75.3		68.0
Total	$	754.4	$	695.7