Chapter 11 Information (Tables)

3 Months Ended

Mar. 31, 2012

Chapter 11 Information

Components of liabilities subject to compromise

(In millions)	March 31, 2012			December 31, 2011
Asbestos-related contingencies	$	1,700.0		$	1,700.0
Pre-petition bank debt plus accrued interest		914.6			907.3
Environmental contingencies		146.3			149.9
Unfunded special pension arrangements		129.5			129.0
Income tax contingencies		70.3			69.3
Postretirement benefits other than pension		64.1			64.6
Drawn letters of credit plus accrued interest		34.9			34.5
Accounts payable		31.3			31.3
Retained obligations of divested businesses		29.0			28.4
Other accrued liabilities		92.0			89.8
Reclassification to current liabilities(1)		(9.3	)		(8.4	)
Total Liabilities Subject to Compromise	$	3,202.7		$	3,195.7

(1)

As of March 31, 2012 and December 31, 2011, approximately $9.3 million and $8.4 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

(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		(364.9	)
Expense/(income) items:
Interest on pre-petition liabilities		519.5
Employee-related accruals		115.2
Provision for asbestos-related contingencies		744.8
Provision for environmental contingencies		352.7
Provision for income tax contingencies		(98.8	)
Balance sheet reclassifications		(35.0	)
Balance, end of period	$	3,202.7

Chapter 11 Expenses

	Three Months Ended March 31,
(In millions)	2012			2011
Legal and financial advisory fees	$	4.7		$	6.0
Interest income		(0.2	)		(0.2	)
Chapter 11 expenses, net of interest income	$	4.5		$	5.8

Debtor-in-Possession Statements of Operations

	Three Months Ended March 31,
(In millions) (Unaudited)	2012			2011
Net sales, including intercompany	$	364.3		$	314.3
Cost of goods sold, including intercompany, exclusive of depreciation and amortization shown separately below		226.0			183.2
Selling, general and administrative expenses		67.5			65.2
Defined benefit pension expense		13.5			11.6
Depreciation and amortization		16.5			16.9
Chapter 11 expenses, net of interest income		4.5			5.8
Research and development expenses		9.3			9.0
Interest expense and related financing costs		10.3			9.8
Restructuring expenses		2.4			0.2
Provision for environmental remediation		0.4			—
Other income, net		(12.6	)		(14.0	)
		337.8			287.7
Income before income taxes and equity in net income of non-filing entities		26.5			26.6
Provision for income taxes		(10.0	)		(10.7	)
Income before equity in net income of non-filing entities		16.5			15.9
Equity in net income of non-filing entities		44.4			38.3
Net income attributable to W. R. Grace & Co. shareholders	$	60.9		$	54.2

Debtor-in-Possession Statements of Cash Flows

	Three Months Ended March 31,
(In millions) (Unaudited)	2012			2011
Operating Activities
Net income attributable to W. R. Grace & Co. shareholders	$	60.9		$	54.2
Reconciliation to net cash used for operating activities:
Depreciation and amortization		16.5			16.9
Equity in net income of non-filing entities		(44.4	)		(38.3	)
Provision for income taxes		10.0			10.7
Income taxes paid, net of refunds		(0.2	)		(15.4	)
Defined benefit pension expense		13.5			11.6
Payments under defined benefit pension arrangements		(110.7	)		(204.5	)
Changes in assets and liabilities, excluding the effect of foreign currency translation:
Trade accounts receivable		6.3			(21.6	)
Inventories		11.5			(16.5	)
Accounts payable		(23.9	)		24.2
All other items, net		(23.0	)		(13.3	)
Net cash used for operating activities		(83.5	)		(192.0	)
Investing Activities
Capital expenditures		(15.7	)		(13.3	)
Transfer to restricted cash and cash equivalents		(6.9	)		—
Other		—			0.2
Net cash used for investing activities		(22.6	)		(13.1	)
Net cash provided by (used for) financing activities		12.9			(1.3	)
Net decrease in cash and cash equivalents		(93.2	)		(206.4	)
Cash and cash equivalents, beginning of period		788.6			787.2
Cash and cash equivalents, end of period	$	695.4		$	580.8

Debtor-in-Possession Balance Sheets

(In millions) (Unaudited)	March 31, 2012		December 31, 2011
ASSETS
Current Assets
Cash and cash equivalents	$	695.4	$	788.6
Restricted cash and cash equivalents		89.8		82.9
Trade accounts receivable, net		119.2		125.5
Accounts receivable—unconsolidated affiliate		13.2		10.2
Receivables from non-filing entities, net		150.4		143.1
Inventories		148.5		160.0
Other current assets		62.5		67.3
Total Current Assets		1,279.0		1,377.6
Properties and equipment, net		418.0		418.8
Deferred income taxes		721.9		752.7
Asbestos-related insurance		500.0		500.0
Loans receivable from non-filing entities, net		371.9		362.3
Investment in non-filing entities		369.4		333.6
Investment in unconsolidated affiliate		76.4		70.8
Other assets		60.6		63.7
Total Assets	$	3,797.2	$	3,879.5
LIABILITIES AND EQUITY (DEFICIT)
Liabilities Not Subject to Compromise
Current liabilities (including $7.5 due to unconsolidated affiliate) (2011—$3.5)	$	212.6	$	250.7
Underfunded defined benefit pension plans		75.9		215.5
Other liabilities (including $19.4 due to unconsolidated affiliate) (2011—$18.3)		55.1		58.1
Total Liabilities Not Subject to Compromise		343.6		524.3
Liabilities Subject to Compromise		3,202.7		3,195.7
Total Liabilities		3,546.3		3,720.0
Total W. R. Grace & Co. Shareholders' Equity (Deficit)		250.8		159.4
Noncontrolling interests in Chapter 11 filing entities		0.1		0.1
Total Equity (Deficit)		250.9		159.5
Total Liabilities and Equity (Deficit)	$	3,797.2	$	3,879.5