Document qrX7zrwj7M8oJVVeOK7m5dDR

-odfclAtN* 1 P&K <--.................. .. (PS ZS-IUP-lM* 12:25:05, 2tiAR-lO4 10 07:44) |*4MYC4?S2 jio* PRT1.47S2-C.............. 94099S' Prinary 94NYC42B2-Profile' h.R. GRACE ---EDGAR COPY-*- --------KUt Oocuneat: OOCUHNT I <P*J4> SECURITIES AW EXCHANGE COMMISSION WASHINGTON, D C. 2054S FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR ISId) OF THE SECURITIES EXCHANGE ACT OF 1934 lOK It* FISCAL YEAR ENDED DECEMBER 31, 1933 COWISSIDH FIlF WISER 1-3720 . R. GRACE S CO. INCORPORATED UNDER THE LA Of THE 5TATE OF NEW YORK I.R.S. IHPtOYFR IDENTIFICATION MO. 13-34S1MS ONE TOWN CENTER ROAD. BOCA RATON, FlORtOA 486-1010 407/362-2000 SECURITIES REG1STBIED PURSUANT TO SECTION 12(b) OF TIE ACT: TITLE OF E CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED Comon Stock, SI par value COflMn Stock Purchase Rights ] Maw Yerk Stock Exchange, Inc. I Chicago Stock Exchange, Incarporatad 7 3/4% Notat Dua 2002 lissuad by I. R. Grace t Co.-Coan., a Nholly owned aibtidiary) and related Guarantaai ] j | j Naw York Stock Exchange, Inc. SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE AC1: Nana Indicate by check nark whether the registrant (1) has filed all rsports required to be filed by Section 13 or iS(d) of thi Sacuritiet Exchange Act of 1034 during the preceding 12 nonths and (2) has bean subject ta such filing raquiranaatt for tka past 0 days. Yea __ X__ No ______ Indicate by check bark if disclosure of deliaguent filers pursuant to Itow 405 of Regulation S-K is rot contained herein, and will not bo contained, to the hast of registrant's knoaladgt. in tha Proxy Ststenant incorporated by reference in Part III of this Torn 10-K or any aneaifasat to this Fern iO-K. __X__ The aggregate Market value of W. R. Grace S Co. voting tteck held by nonaffiliates was epproxinately S4 3 billion at February i, 1004. At Harch 1, 1994 , 93,856,994 Oharas of S'. R. Orace S Co. Coanen 81eck, St par value, pare outstanding. OOCUNENTS IMCORPORATFD By REFERENCE 00CUMEN1 Proxy Stataneat for Annual Hatting to ho held May 10, 1904 (specified porttone) IMERE INCORPCRATEO Part lit ' jSf 'V ~ ,, r -OOCtMW 1 PMf ?---------- ------------------ -- (TO I-IM*-1**4 12:25:05,UO 25-IMA-1B4 10:02:44) [9.WrC42B2J !0KPST1_<282-C-*--------- *40999' -Arln.rj 4NYC4?g2*--Prof il : H.R. OHACf ----rOOAR COPY--------------------Cl l.nt Doeurwm : DOCUUfUT 1 <F4QI> TABLE Or COM1ENTS Pip* PART I I ten 1. Iten 2. (tan 3. (tan 4. Buvinti....................................................................................... Introduction....................................................................... Stratagie Restructuring. ............................................. Industry Gcgeeot*............................................................ Specialty ChMucals............................................ Health Cr...........................................,........................ Other Operation*.............................................................. Research Activities.................... ................................. Envirenaentel, Health aid Safety Hittiri.......... Uitanali end Energy...................................................... Properties............................................... Legal Proceeding*.................... 6utniaih of Hatters to a Vote of Security tloldan................................................................................... 1 i 1 3 3 0 11 11 1? 13 13 14 20 Encutive Officers........................................................................................ 20 PART It Its* l. (to* $. ttan 7. Iton P. l tan P. lamat for Registrant's Conaen Equity and Related Stockholder Hot tars....................................... Salecttd Financial Oata....................................................... Manegeoest's Discussion and Analysis of Finan cial Condition and Results ofOperations............ financial Stateeeets and SupplementaryOata............ Changes in and Oisagrtvents with Accountants on Accounting and Financial Disclosure................ 21 22 22 22 22 PRAT lit Itea 10. Itoa II. Itsa 12. (toe 13. Directors end Executive Officers of the Registrant............................................................................ 22 Ciacutivo Coopensati.cn........................................................ 23 Security Ownership of Certain Banaflcial Owiars and iMnageneni................................................................... 23 Certain Relationships and RelatedTransactions.. 23 PART XV its* 14. Exhibits. Financial Statement Schedules* and Reports On Fore 6-K........................................................ 23 Signatures.................................... -.................................................................. 27 financial Sutvhment.................................................................................. f -1 t 9 DOCUMENT 1 PACE S--.............. ................... <PD 2S-UAR1894 I2:7S:OS,0 2S-MH- 1M 10:U7:4) IWNTCaTWnOK-PflTI <M? C`--------- =-*S40W* -Primary VC4?62---Proflie: w.R. GRACE -EJX1AH G0PY""****"--**--Client Document: DOCUMENT 1 -Page PART I Item 1. Business. INTRODUCTION A. R. Grace A Co., through its siAJildlarlea. it pnasrily eagajtd in the epecialty cMoictl business on worldwide basis one in specialiied hoaith c>ra activities. In its cheaical operations, Oraca develops, ftknufactures and narkett epecialty chenlcale and Material! and ralatad ayslant, in health cart, Craca is primarily angagad in supplying kidnay dialysis and DOM inration and ratpiratory tharapy services and products. At usad In this Report, the tarn 'Gonpaay' raters to ft. R. Oraca 0 Co., a Na York corporation, and tha tarn 'Oraca* raTart to ina Conpany aaofor ona or aoro of Its subaldlarias. Craca`t principal eieuutlve offices arc located It Ona loan Canter Read, Boca Raton, Florida 33481-1010, aad Its talaphona nutoar it 407/382 2000. At year-tnd 1003, Oraca had approxlaately 34,000 full-tint anplayeea aorldalda in Ita conlinwiag oparatlons (appronnataiy 7,000 In discantinuad cparationi). Oraca'1 Conaalldatad Financial Statanants for tna tnrae yaars la tha panod andad Oesenfcer 3t, 1903 (-consalidalad Financial Statananta'I and certain othar -financial infornation included in tha Canpany'a 1993 Annual RtpOrt to Shareholders art tat forth in tha Financial Supplaaant to tnit Naport and incorparatad hy rafaranca haraln. STRATEGIC RESTRUCTURING In tft9i, Oraca announcad a nan carporata ttratagy aith the principal objective of enhancing shareholder value. The dtjtr conpanents or tha strategy are (a/ focusing on core bustnaaaaa ta accelerate groertn; (D) Jpgraoiig financial parfontanca, principally by aelllng or ftOMUling nor-core businaaaas, lowering tha ratia af debt ta total capital and reducing overhead; and (c) integrating corporate and operating unit functions tnrmigh flooal product line anagansnt. Tha esra businsstot rafarrad to above are packaging, health care, catalysts sad other slliea-batad products, contraction products, aster traatrtnt and process cheapesta, tnd eentsinar products. As part or ita Ms corpcrate strategy, Oraca has reorgamiad ilia naiiagenent of tnasa care businesses an tha baais of global product Unas. Brace has also organized task forces that art developing and iaplenenting `bast practices' relating to financial plansing, iaforaotios eyetens, kunan resource!, logistics Ini otner sunegentnt functions; has implemented a process to batter w -C&ONCIO 1 -------- -------- -----------------(PD pi iMry *4KYC4?V---frotll. W.h.anACt 12:25:05,110 28NAAl*64 10:07 *4) |04NTC42*2|10K 1H_2a2 C----------- 9400*6-*-E0QAR COPT--.........----Client Doctaeant: DOCUffUl 1 allocate capital among its Dusinasses; and ha* retired or refiaaacad Post of its nighor-cDSt debt. DIVESTMENTS AMD OlfCR DISPOSITIONS. Pursuant to it* new strategy, Orica Mi dsvcstec or wonetlias a nuabar of non-cora txjtinaiias and has announcad plan* to divast Otinrr*. In INI, Orica cold it* specialty textiles businass; its autanoUvc chemicals and found dshdaning components builnaiaac; investment* in tao pharmaceutical businassas; Its irlnidadian fertilizer operations; it* aniul faad businesses; it* polyurathana foaa sealant aanjfactunny business; and it* Japanoss aicronv* products Dunn***. In 1902, Grace sold it* book, vioeo and sortwsr* distribation businesses aid Its Orpanic cbaaicalt businass ana related assets. In Uaceebor 1092, Grace also coaplatad a transaction ta monetize a portion of itt cocoa and chocolate business by telling a 21% liaitad partnarsnip interest in oraca Cocoa Associates, l.P. ('Oraca Cocoa1), atilch mu tnis pusinass aid other assets, reselling in Grace's receipt of approximately *300 nut ion in cssn. Dur ing tna nrtt half or 1BB3, Grace sold substantially all of Its oil aid pas arm energy services Businesses tor net cask proceeds of $386 mlllon, and it is in tha process or llquseating tna renaming aiscallanaous assets and isatiilitiis of mesa eussnasias. Grace also said a nunbar of other non-core businesses and corporate lavestaants in 1893, including a 50% intarast in a Japanese chanleal business (tor approsiaataly $31.4 Billion), a food Mygiana saryicas businass (for approsiaataly $11.2 alllion) and ainority investments in araca-Oiarra Horticultural Products Ceapany and Csnonla Eavlronaanlal Services Corp. (far proceeds totaling $41.3 aillion). In January 1954, Grace racaivad $42.8 alii son in exchange Tor the seceritloa of Tna Restaurant Enterprises Group, Itc. held by Oraca. In the fourth quarter of 1992, Oraca classified Coloeyo coal Coapany. a coal uining subsidiary, as a dlseontiauad operation. In the second auartar of 1993, after evaluating tha expected contribution of its rsaaining no*-cor* businaists to its Tutiirs parforaanea and groath, Oraca reclassified ss discontinued operations Its cocoa and battery separators businesssi; certain tnglnearte materials businassas (principally prlating products, aiactraaagnatlc radiation control aad natarini tacAnology businasaas); and substantially all of its otlwr aon-cort businassas. Graca is setivaly pursuing tb* sal* of the** businassas. SIKAitGic ACQUISITIONS. As part of its strategy to focus on core businass growth, Grace has made, and aspects to contlnu* to naka, strategic acquisitions directly related to its cor* buslnaasas. In 1892, Oraca acquired the North nneriean food service packaging business of Du Pont Canada for apprexiaately $20 aillion. in 1993, Oraca acquired (a) tka altar traataant and related operations of Aquatic Ouiaica 5.A. of Brazil, which Sat significant operation* throughout south Anarica, as wall as operation* in Portugal asd tlw 2- OOCUtCKT 1 PAdF A.-...------ (PD 3S-MAR-1904 12:SS:OS,UD **-MAA-1k9 10:07:44) |94KrC*2a?)10K-PHI1_422C-- M0699- Primary 94IIYC4?8?<Prof tie: . GRACE -------EOGAft COPY----------------- ------"Clltnt Uocuaent: OOCUNEN1 1 <Page> United States: and (k) the Ratalistlc* fluid creckinp catalyst additive business previously o*Md by a joint vantura batmen Union Carbide Corporation aad Allisd-Siinal Inc. In tke 1991-92 parlad, draco acquired the Renacara unit of Lloyds Chemists pic. ttia loading United Kingdom producer of dialysis oencontrato and a diltrlbutor of associated products, as mil as additional dialysis cantors located priaarily in the United States, for approximately (54 Billion in the gtrsgato. In 1093, Grace acquired Nona Intencive Cara, Inc., a national provider of alternate site infusion therapy and dialysis boaltb cars services, for approximately S129 nillion an cosh {inclusive of aspenses); Virginia-based American Homacare Equipment, Inc., a provider of tioao infusion and rospiratory ilttrapy services, for approximately tit,goo shares of the Coapany's coanoa stock tnd Other consideration; and Ri|gers MedlllntechnJk <hUV4, e Ccruan manufacturer end distributor nf dialysis products. Additionally, during 1M3, grace acquired rational providers of Soue infusion thorspy sorvicos and heme support nursing sorviets, as Mil as 3C additional dialysis oantara loeatsd priaarily ir the United States, for a total of approximately SP1 nillion. In March 1094, Orccc msouncad that it had agreed to acquire home Mutritlocal Sorvicos, Inc., a national provider of huso infusion theropy sorvicos, for approximately SI20 Billion in cash (inclusive of expanses and dsbt to be asaunad); completion of the transaction it anticlpatod during tbs second quarter of 1994. Oraca ia considering aedttional acquisitions in the health care industry, ulth a via* to continued development of its internotional health ear* kusineea. Sea Notes 3, (, A aad 11 to the Consolidated Financial Stcteaents and `Management's Discussion and Analysis of Financial Condition and Results of Operations* in the Financial Supplauent far additional information INDUSTRY SEGMENTS Ikforaatiao concerning the odloo and revenues, pretax aparating profit and identifiable (Slota of Draco's continuing operations by isdustry npunt and geographic eras far 1993. 1992 and 1991 It contained in Note 17 to Draco's Consolldstsd Ffnseelal Ststemmnts in the Financial Supplement. SPECIALTY CICM1CALS Grace's specialty chanical operations consist of the develspaint, emifactare and sal* of products and systaas in five aero market groaps (mo 'Strategic Restructuring- above). These products aad eyateas typically serve highly specialised aarkets aad represent an important eenpoeent (but a relatively snail portion of the cost) of the end products la ehich they are used. Accordingly, competition ie generally booed primarily on tachnologlcnl capability, custoaar sarvica and product quality. Oman's specialty 3- OdtiNENf i rase -marry 04KYC42B2--Profile: (PP ORACf 12dS:K,IO 10:07:4) |MWC4Mf|10 Wlljaj c---"WOtW' --tUUU c0ynr.*r.------------Client Oocjfirnt: DOCUUfNI i ckcatcal products and systens ar-t aarkatad primarily tnrougn diraet Mitt nrgsnsxetions. tm fallowing ia a datcription of tia products and services provided oy aacn of Groce's cora specialty cheaicol MiLnlUfl PACKAS1HQ. Cract't psekagisg business ('Oract Packaging') provide* higi>-performance total packaging systems on a aorldaldt baait, coapoting principally by providing ss^erior qualily product* aad Mrvlcts Tor tptcialllsd cut toner naadi. Tlta principal product* aad atrvica* provided by araca Packaging ara (*t flexible packaging lyatca* (including material, aquipaant and tsrvlces) far a broad rang* of pantnabla food* such * frttn aoat, praparad food*, baked goods, poultry, produce, cheese, and looked and processed aat products; (b) shrink filns for packaging n variety of can liner and industrial products; [ c) fsaa tray* far supermarket* and poultry and other food processors; and (d) rigid pldstse containers Tor dairy and othar Toad and non-food products. firoct Packaging cenpste* through thrat product groups: llaxiblt packaging (narksted extanssvaly under the Cryovac-R- raglstsrad traduisrt), foan trays, aad rigid plastic containsrs. Cryovac-R- flexible packaging products include shrink bags, tnriHk Tilas, learnetsd fiiai, mudicel filns, and aigilpiicrt. Tnt Cryovac pscxaging product* group dtvulupud *>*) introduced fietibia plaitic vacuum gnrlnk packaging in tnt letr ibdOs, contributing to axpaadad food distribution and aarketmg by providing feottsr protection agaiast decay-laduclng Daetaria and aaittura loss. The aarkat far Cryovac products kas sidiiequently sniTtad frdn industrial Taod application* tssrsrd tha retsil food usrkat, and Cryovac packagisg technology fiat else bean intreduced in non-food applications such as Tltxiblt packaging far display itsns and slnctronic and usdical products. ins flexible packaging products group euphaslias Ti*e core caapetancies to differentiate Itself from co^retIters: (I) proprietary film processing tsclnslsgy; (21 resin technology, permitting the production of aotorlalt MitOd te specific cuetcner needs; (9y packaging and food science expert1as, providing better understanding of tha interaction bttaeen packaging materials aM packagia products; (4) coaplats systsus support capability, te previa* a single source or supply for custonar needs, and (9) suetegically located prcductlM, earehsuslng sod distribution nstnurk*. foan trays ar* produced by ths Fompac basinsss group of draco Packaging, priaarily for sale to supernarhats and poultry end other food processor* ia the eastern United State*, fernpac's proprietary technology Its* llso bean successfully utilltad in cnrtnln packaging applications outside tie united States, and Fompac is tsplorlng opportunities to axpasd Its txmadts Outside horth Anerics. -4- OOCLMEK1 1 PAGE 7---.............. (PS 28-IMR-1M4 12:26:0S,MD 28-UAR-1994 10:07:44) {MmrC422]l0K-PtT1_4282-C----------940999- Primary 94NTC4267---Proflie: W.K. OMCt BKMX COPY---*"--"""Client Docunent: DOCUMENT 1 <PJ* Grace Packaging's (Aaicron business group produces rigid plastic packaging applicatioes, priaarlly tor dairy product! in Australia. Tlu product! utilize praprlatary taeraororming technology, involving tin controlled thinning aid soaping ot hot plastic shoots to increase stroagth and rigidity while ninuuzing weight. Braco Packaging'i salat and revenues wars SI.3 billion ia 1093 and SI.2 billion in aach of 1091 and 1092. Approximately 60S af Orica Packaging's 1903 sales and revenues ware generated in Nortt America, SOS in Europe, 10N ia Asia Pacific, aad the remainder in latin America. At year-end 1993, Grace Packaging enployed approximately 9,000 people In 23 production facilities (9 in north America, G in Europe, S in Latin America and 3 in Asia Pacific) and 77 sales offices, serving nore than 11,000 customers. A majority of the raa materials used by Grace Packaging are rasins that are generally available at stable prices, la aott cases, multiple sources of raw watarials exist, with at laast one source being located In each regional market. The primary external Influence affecting tha packaging businass is the general economy; seasonality is not significant to Grace Packaging's business. CATALYST AND OTHER SILICA BASEO FROOUCTS. This core business (`Graee Davison*) is ennposed of three principal product groupa: fluid cracking catalyats, polyolefin catalysts, and silica and xaellte adsorhents. lease products involve silica, alualaa and leelite technology and tha design aed manufacture of products to meet customer specifications; they are sold te aajor oil refiners, plastics and chaaical manufacturers, and consumer products companies. Fluid craeking catalysts are used by refiners to upgrade oil tc mere valuable transportation fuel! such as gasolins and )et and diesel fuel. Oil refining it a highly specialized discipline, demending that products be tailored to aeet local variations in ran aaterials and operational needs. Coapetitlon is based on technology, product performance, customer service and prlca. Polyolefin catalysts and catalyst supports art essential compcrents used in manufacturing nearly half of all high density nd linear low density produced polyethylene resins, which are used in products such as packaging film atd plastic pips. The catalyst business ia technology.intensive end focused on providing products specifically formulated to aeet end-user applications. Manufacturers generally eonpate on s eorldwide bails, and competition bae intensified recently due to exceed capacity in the catalyst iadustry, with resultant price sensitivity. Silica end zeolite adsorbents are asad In plastics, Oeatlfrlces, paints, insulated glass and other prsdacts, and In tha refining ot edible oils. Silicas art used it coatings as flattieg agents, in plastics to inprova hancliag, in toothpastas as thickeners and S- SOCUCMT 1 f*OE a--.---- |PD 28-NAR-1994 12:35:05,110 ?a-hAA-19*4 10:07:44) |MRVC42K|10K PRTI 4307C`~------ 940> -rrlaary 94KTG42B2--Protil*: W.R. ORACt ----BttAA COPY----------Cliant Doeuaart: OOCUUCNI i cleaner*. in food tc carry flavor* and prevent caking, and in the purification of edible oil*. Once Davlion's tale* and revenue* were *572 pillion in 1903, 0510 aiUion in iw, and *470 Million in lift; approxuutely 59% of Grace Oavison'l 1993 sale* and revenue* were generated in North Aasrica, 34% In Europe, 8% in Asia Pacific and 1% in Latin Aaerlc*. At year-end 1993, Grace Devlean aaployed approiuataly 3,60U peraons woriOeid* in nine fadlltie* (six la tne United State* and one each in Canada, Germany and Irazll). aott ra* aatarial* uaed in the aanufaetur* of Grace Oeviion prodiet* are available Trcm Multiple sourest end, in sots lnatance*. are produced or suppltan by Grace. Because of the divorce application* of product* utilizing Grace Davison technology and the geographic areas in which such product* are used, seasonality does not have a significant effect an ft-ace Davison's businesses CONsrnuCTlOh nDUUCIS. Grace Construction Products COCP') is a leading supplier of specialty notarial* and systems to the world-silde construction industry, ocp products and systsns strengthen concrete, control corrosion, prevent water daaage and protect structural steel against collapse due to fire, inese products include concrete adelxteres, eeaoist processing additives, and fireproofing and waterproofing aatertala. In North Aneriea, OCP also anufacture* ana distrloutas reinforced fiberglass building canponants, Masonry block additives end proojets, and vereiicullta products used In construction and otner industrial applications. OOP's products are sold to e broad custoaer bast, including caaant aanvractursr*, ready alted and precast concrete producers, specialty subcontractors and applicators, aasonry block Manufacturers, building naturinls distributors and otbar industrial aanufaeturart. otf i* principal sippuer of the products It Manufactures, coapctlno with several large giooal suppliers end duller regional cdapetitors. Competition is based largely on pricing, product performance, proprietary technology end technical support end service. OCP'I 1993 sales and revenues totaled <333 Million (70S in North Aneriea, it% m Europe, 13% in Asia Pacific and less then 1% la Latin Aneriea]. Salas end revenues for 1993 and 1991 were <333 ailllan end <345 Million, respectively. At yter-erd less, OCP aaployed apprsaiatlely 3,000 peraons at spproxiaatoly SO production facilities 133 In North Aneriea, 9 in Southeast Asia. 7 in Australia, s in Europe, 4 in Latia Aneriea and 1 in Japan) and 73 talas offless aorldwide. Supplies see ras aatarial* used for Manufacturing GCP products are pi inertly coanodltles obtained Iran Multiple sources, iscluding coaaodity cMaical producers, petreleua ecapaaits, other construction industry suppliers ami paper nanufecturert. In nost lastanc- -6 rt e DOCUUFKT t RACE 9--........ ................. (ho 2t* 1M< 12:25:03,MO 1994 10:07:44) [94NrC42B2J10(-RRT1_42t? C---406S> Pruirr 94NVC4?2***Proflie: MR. GRACE --C0Pr*-"-**"---**-Cli4nt Oocueent: DOCUUFin i <Pagt S. ther# |rt at Hast two alternative uwhtri lor tM raw utiruii atilized by OCR. The construction business is eetenal, based on weather conditions, and cyclical, in raspoese te ecenaeic conditions and construction Oaaand. la incrsat* profitability asd ainiaito tbs iwpagt of cyclical downturn* in regional aconoaios, CCP strives to introducs now and iwpreved products, bat lapleaented a ioaar cost structure ia klortb Anoriea and Europe and is owptiasiziog expansion in European and Southeast Asian narKat*. MATED lnEATMfMT. Grace's water treetweet and process chanlcals business ('Grace Dearborn*) consists of the water troetnent and paper lndostry eervicot business linai, which market tbs following products snd services: (a) enaaleal treetnents and systaos to prevent corrosion, scale snd wicrabiologlcal greertb in industrial process esters, besting snd coollag applications, and laddstrlil vastenter applicarinns tor clarification, sludgo de-wataiing, odor control and watar racvcllng: (b) paper industry process ehewicals, support aqulpocnt and ralatad ipsciaiist and consulting asrvicas; (c) hydrocarbon processing cbonicals, related njppnrt oqulpnant and services to protect, end optlaizn processing tysten parfornaece; (d) cbewlcal treatwente, support equipment and services for euqnr processing, including processing sugar into alcebel at a gasoline substitute; (e) rkewical treetnents to protect ledustrlal canned Tood cooking and starilitlng equipmentj and |f) paint detaefcifieetlon products and services to rawnve paint sludge free water wish paint spray systant. Grace Oaarborn sales and revenues for 1993 totaled *330 ellllon (i in North Anerlca, aOn in Europe, 1d\ in Latin inertia and 2h In Asm Pacific). Sails end revenues for 1003 and INI were 9302 Willson and 32(2 Nlllioi, respectively. At yesr-end 1*03, grace Dearborn swploynd approiLMtely 2,800 persons at 21 plants (7 in Latin Aaarlca, 6 in North Anerica and 4 In each of Europa and Asia Pacific) and 107 sales offices. Daw Materials used in tbs grace Dearborn business Unas are readily available fran Multiple sources, generally at stable prices. Tbs paper industry services business is effected by the cyclicality of the gleOal paper aartot. The water treataent services business responds to (bet la not adversely affected by) seasonal 1luctuatioas, concastrating an boiler treataent in winter and cooling systaa treataent in sunawr. The affects of seasonality art further dlnmisncd by the geographic diversity of the Markets in which grace Dearborn ccMpetat. COMTATuni PRODUCTS, o-sce't container bwsinsss <`Grace Container*) consists nf thro* product lines: container sealants, closures and coatings. The principal products Marketed by tkeee product line* include scaling ccapoends and related application equipwent for food and beverage cans and ether rigid containers; gasketing Materials to the wetsI crown, llualnua roll-oe and plastic cloture sagnants ef the glats/clesure peckeglag Markets; none - r a* DOCUKNT 1 PA 10-------- -------- ------------- (TO 26-UAR.im 1J:25:05,D 2*W.19*a 10:07:4-1) [SeNlfC4282)l0K-PRTl_42S?-O---...94OU00- -Pruvary 94NYCI2S2----- Profile. b.K. ORACC "EWWH OOPY------"-------Cl lent Oocurxnt: DOCUMENT i *iv* Ut^Mri and iwoeiim prouctivi end decorativ coating* Tor plastic ami oral cloturot; protective and decorative coatlagt ano lacquers tor rigid food and beverage containoro; and luoricsiti used primarily ia two-piece can nenufacturing. Craca Containar aaloa and revenue* (eicludlng ihoa* of Oraco Specialty Polyner*, dlacuaaod below) *oro S2SO Billion, 3263 Billion and SMS Billion in (000, 1002 and 1091, raapacllaoly. It* product* ar* aaraotod intarnatlonally, with in of aaloa and revenue* in Europe, 27\ in Nortd Ancrica, 25k la Asia Pacific aid 1TB in Latin Aeerice. At year-on<J 1903, Oraco Container anployod approainatoly 1,00 porsona at 25 plant* and 09 sal*! off lea* worldwide. Conpotnion la boaod on providing lughqwallty custoaar service, as Boll as on prico and product quality and reliability. Rear aaterlals ar* generally avaiiablo fren aullipla sourcoa at atablo price*. Altnougn doaand for container packaging ond sealant products tonds to entrees* during tna eareast Booths of tns year, ton inpact of such seasonality on Oraco Container it oftsat a Laoat entirely by the geographic eiversity of the narkols In ehlch It eoapata*. hecent ly integrated with Oraco Container is Orace Specialty Polyaart, which develops fonailstad en*inoared polywars Tor printtd circuit board and conpontnt atsenbly in ths electronics, electrical, automotive and aatenta Industrial. That* include surface aount and conductive adhesive*, capacitor coating*, light enittlng diode encepiuleni* and eonfomal coatings. Iho inttgratlon of the*# product line* raflect* the reliance of Doth busilH**a* on polyaor technology as *n integral feature of the products they aeiMJfacture. HEALTH GAME Grace's health care business ('Oraca Health Cara') is prliurily angagad In supplying kidney dialysis ond hose infusion and respiratory therapy services, end in to* nanufecture sad sole of products used to provide dialysis and cthar nodical services. Orace Health Car* provides kldsty dialysis and related services for outpatients *itt chronic rsnsl fallorc. At Uecaabar 31, 1003, Orace Hsalth Caro operated 501 ceatare providing dialysis and ralatao aarvices (471 in tha United States and hierio Rico, 23 in Porlugnl, 4 in Spain, 2 in tha Clech Republic and i in Argentina); these centers, substantially all of uhlck art leased, average *v> prenlmtely 5,600 aguere feel in site. Grace Health Cara also provides inpatient scute dialysis services under contracts with hospitals is the United States (395 at Decesber 31, 1993) and furnishes dialysis equipment aid supplits to patihati who elect hoae treatment. At Oecenbtr 31, 1093, Orace Hsalth Cars was traating approsiwately 37,000 patients in the U.S. and 3,000 patients In other -0- COCUKMT 1 AuX It------ (PD 3S-HAR-1M 1?:?:d6.M9 78-IMt. tgg4 10:07:44) (B4NVC428J]|0K-rnTi 42S2-C---- >40099 Prinsry 84NYC4?8?Proflie: h.R. 0UC ----tOOlA COPY----------------------------------- -- Oucieveni: DOCURHI t <Pap>- coumriH. Mnituii fra* kidney dialysis iirtieu oiri SI.012 nilHoo in 1M3, sooo iiuiai in 1092 one 1720 Billion in 1901 additionally, Groce Health Coro nenufecturos dispotiDie bloniOin, dulyilt solutions and artificial iUnyt (dlilfiin), for uio in i<* dialysis contain and for tale to uraffHinted diatynis facilities and hoae petiMts; din tributes dialysis supplies and equipaent and other nodical prodnett end supplies nanufactured by others; and provides laboratory semens (including Hepatitis testing} to dialysis patients. Here then two-thirds of the soles of dialysis and otner aedicsl products supplies and equiptant reflect sales to patients not directly treated, or facilities not operated, by Oreee Haalth Care. Groce Health Cara also provides infusion and respiratory therapy services end otner nodical equlpaent and supplies to patients for hone nee through a netnorh ol li locations (fid leased end 1 owned). Infusion tlterepy includes intravenous delivery of on expanding range of aodications end eutritionel preperetlons, such es cheaothdrapy, tote] parenteral nutrition, antibiotic thsrepy and drugs tor pain aanageBent. Respiratory therepy includes delivery of oxygen ano aerosolwed drugs and thi use of ventilators. In addition. Grace naaltn Card provides hene nursing support services through nine branch locations. Grace Heeltfl Care's buslnass is dspeadeat on thd continual ten of Medicare end ether miro perty Insurance coverage far dialysis aid hoae cere services end products. At suen tine as Medicare oecoaes a patient's prinary peye- for dialysis (generally, 3 aonths following comencewent of trsataent or, in the ceec of patients covered by employersponsored health lesurence, 21 nontha after cuonencewent of treetaMnt) and/or heneenre products and services, Oedicare currently reiaoersae suppliers of sach services end product! for apprOKlmately son or ostablisied teas or reaecnable charges; the renaming m is paid by the patient ang/or his non-Medicert insurance carrier. Because in Best cases the prices of dialysis sarvicas and prnoiets in the u s. ere directly or indirectly regulated by Medicare, conpetitlon ie the industry is hasefl priaarily on quality and accessibility of service. In addition, tone states linll coapatltian under laws that raetriet the nunber of dialysis facilities within a geographic araa based on need, as determent! by state agencies. Conpetitlon in tha hate care business it also based oe quality of service as well es price, end, where state laws do not inpose Units an conpetitlon, there ere no significant barriare te entaring this business. Cost emciency, therefore, is eiso a hey eleaent of coapetition in this aarket. Based upon Grace's knowledge aad understanding of the haalth care ircustry in general end of otner proeidern of kidney dialysis and infusion therapy, as well at inromation obtained trow publicly available sources. Twee* Health Care bnlleves that it is anoag the aost cost-efficient of B boCUKtn 1>AGE 17*.............{PD2S'MM.tMi 12:?S:<*,aO 2R.IWM004 10:OJ:<4| |04NVC42B2nCK-P1IT<_422-C--> -- -940*89- Pnaiery 04MYG42S7**-frofile: H I. GRACE -EDOM COFV------------------------ -Clurrt Decunenl: OOCURCNI i <PlK> tl>* companies in its field ana tha*. it i the leading United Stetes aupplier of dialysis services and products and a leading United states provida- of infusion tliarapy. capt at notad in the following paragraph. Qraca Health Cara believes there ara adequate aourcat of aupplv for the raw aitersals and products utilised It lti health car* service* and aadical product! Businssses At y*r-end 1003. Grace Health Cart aaployad a total of approsimataly ta.fioo persons full-tint at lU facilitita worldaida. Grace Haaltn Cart's businesses ganarally ara not seasonal or cyclical In nature. It la unclear at this tlwa whether and to wfcat eitem any of tne currently proposed rafontt lfl U.S. healtn care lw> will effect Grace Health Cart's operations. national Uadical Cara. Inc. (`NUC'l la Graca'a principal health care StOsidiary. In 1903, tha United States Food and Drug Adninistratina (*FOA*) issued ueport altrts with respect to (a) haaodialyais hlaodlines naaufactured at NUC's plant located in Mynosa, Hessco and (b) heaodialyieri aaiaifacturad in Wi Dublin, Ireland facility. Products subject to FDA Inport marts any not enter tha United States until tha FDA approves tha qialtty assurance systana of the facility at which such products ire aanufncturad. In January 1994, MIC entered into a consent decree providing for tha resumption of iaportation of hloodlinos and heaodialyteri following certification by UHC that tne relevant facility conplies with FDA regulations and successful coaplstion of an FDA inspactxon to aerify such CMapllance. In nccardaacs with the concart decree, NIC certified coapllence to the FDA with respect to tha Reyman, Ueslca facility in January 1994 and tha FDA liftad tha bloodline inport alert In Haret 1994, following a thorough rainspectlon by the FDA md a coanttaent by hue to finish certain studies by Uay 1994 aad. In tha interin, to perfom additional product testing. Certification of coaplianee at the Dublin. Ireland facility la anticipated in the second quarter of 1994. The censent decree alec requires WC to certify and maintain compliance with applicable FOA dewice aanufseturlng laws end rdguletlons at all of Its United Stataa manufacturing facilities. RUC hat conducted o full reme* of such facilities and upgraded its quality aesuranra system as necessary, and all certifications required with respect to aach facilities hart baen filed. Ro fines or psnalttos ware luposad on sue et a rasult of any of tht FOA's actinns railting to tha import alerts or in connection with the consent decree. Meitner the Inport alerts nor pravinaaly reported recalls of cartain NMC products haws had, aor ara thay expected to iavt, a material affect on Omen's results of operations or fieanclel petition. HEALTH CARE IKIESIfFKI. Grace has > 47% Cannes eipilty interest in a conpany that aareoa hospitals aad otMr health care Institutions by recruiting nurses and athor trained Malth care personnel and placing then an temporary aasignaenta throughout the United Stataa. Grace also owns preferred stock of the conpany aid op- 10 oocuffNT i pm* *. (po ya-aM-iag* i?:<>:as.Mn m-mm-iom io:o?:4<) [*suve4a*J)'0KFRTi *g? c--**---o99 Primary 04MrC4?S?e>ePro1 i Ur *>.R CRATE ---EDOM COPY-................. ................"Clunt Doamat: DOCUMENT 1 Pages tions. exercisable conaenclng in iftgd, to acquire the balance of suck conpany's eeanoe aqusty. See `Strategic Restructuring' shave for sefnrmatiofi concerning 1443 and early 1044 transaction* involving Graea's health earn htmnm OTHER OPERATIONS THERRA1 AMD FHISSION CONTRM SYSTFVS. In 1M3. Graca cortilned lti Mb processing equipment butinati and It* air ablation control catalyst* and systems but max to farm a nan product lino la thermal and aniatian control systeM, named 'Graca TEC Systems'. Tha principal produet* currently marketed by thi* product lino art (a) air flotation dryers and auxiliary nab processing equipment for tho printing, coating and converting Industries, and (b| air aaitsion control catalyat* and systems to control volatile organic compound!, carnon nonoiidc and nitrogen oxides Mission* iron ponar gaonration, induttrial and autonotlve sources. OISCONTIMUrn OPERATIONS. To the fourth quarter of t43, Groce claiaifled Coloeye Coil Coapany ('Colaeryo*) aa a dlscmtlnuad operation. Cntnwyn, a partnership aholly oened by Grace. Operates the largest surface coal nlna in Colorado under federal and stats lasses covering proven sadfor probable surface raiervat of approslaately IBS alllioo too* of ]o>-sulfur coal. In the second quarter of SBG3, Grace classified at discontinued operations its renaming non-core businesses, including Grace Cocoa, as international producer and supplier of high-quality intermediate cocoa and chocolate products to the bakery, coafactionary, dairy and beverage industries; Grace's battery separators business; and certain angiseared aaterials businesses, principally printing products, alnctrenatnotic radiation central and material technology businesses. Graca la actively pursuing tha divestaant of these discontinued operations and those referred to under 'Strategic Restructuring* above. See Notes 3 and G to Grace's Consolidated Finaaclal Statoaents in the Financial Suppleaaat and 'Strategic Restructuring* for additional information. RESEARCH ACTIVITIES Grace engages in active research and davalnpnant programs directed toearc the development of non products and processes and the improvement of. and developatnt of nan uses for, existing products and processes. Research is carried out by divisional laboratories in the United States, Europe and Japan and by the Corporate Research Oivisioa, alilch has facilities in Colwuiia, 11 4 OUUJWN1 1 WUM !<*..........(PC M-hAft-iggg 12:25:06,* 29-HMC1994 10:07:44) (04NVC42(2)1O( PRT1_42U-C--B40M- maary #4t(YC4262"-frol lit: p.R. afl*C *100AR COPT"*"*--**----"Clianf noerant: OOCIBIENT 1 <7H*> aaryiaad; Lexington, Massachusetts and Atsugi, Japan. Tha Raaaarck Oiviaiua't acti*mai rocut on draco's coro product lints and include tpociiltv polyaars: bianedlcai devices; catalysis; construction oatsrials; pnotopolvaors; specialty packaging; anc process onginaoring, principally involving tha development of tocnnoioglas to aanufacturo chaaical specialties and eioaadlcal products, as part or draco's caraasfant to focus rosaurcos an eoro busiaassos, corporata rosoircn prograas tot tni eoro product linos are boing Incraasod, ahils fundiag in support of aon-cors bosinasaas and dlscontlauad operations is being eliminated. in addition, product line and corporate rasaarch pragmas are beint integrated and coacentratad on any projects. nesearen and development expenses relating to continuing operations aeaunted to 9139 Billion in 1993, 9130 Billion it 1992 and 9129.1 Billion in lMi (including aipenses incurred lr funding asternal research projects). Tne annum or research and oevdlopaent aspeasaa relating to gsvarnaant- and customer-epontorod projects (as opposed to projects sponsored by Grace) it not materiel. EMVIKMftNIAl., HEALTH AND SAFETY BATTERS In constructing and operating its facilities, Grace incurs capital and operating expenditures relating to the protection of the onvirofsnnt, as nil as costa to rantdiato previously contenineted properties. Costa incurred to operate and Mints le anvirenmeatal facilities and disposd of hazardous asd non-hazardous rates vith raspoct to coetinning operations uort 945 Billion in 1093, 95d nlllion le 1992 and 939 all lion in 1991, and are astlaatad to Bo 950 aiiison and SS4 ailllon in 1994 and 1999, reapnetivoly. Grace's CMltal expenditures for environmental control lacilitlos relating to continuing operations vara approxiaetaly 929 ailllon, $11 Billion and 917 ailllon it 1903, iW2 and 1991, respectively, and ara extlMted to bo 919 Billion and 923 million during 1994 and 1999, respectively. Costs incurred to roaedlate previously contenineted sites uere 944 nillioa, 939 Billion and 9fB alllioe in 1993, 1992 id 1991, respectively, and are estimated to be 944 Billion aod 935 alllioe in 1994 and 1999, respectively. Such expenditures have hot had, aid ara not eipectod to Bava, a notarial affect on Grace's other capita] expenditures er on its esrnings or coapatitlva position. See Dote 11 to trace's Consolidated Financial Statements and 'ttanegenent's Dlscasslon and Analysis of Results of Operations aed Financial Coadition' in the fiaanciol Supplement. Grace has astabllahad an fnvironaontal, Haalth and Safety (*EHS*) policy and related programs that include specialized safety training for employees, asonitorsng of the workplace anvlroamsnt, and training and guidaace for a^sloyeas uitk raspoct to EHS rsgvlstory compliance. These prograas are unowned by a central EHS depertaent organized ia 1993. This dapartaant also audits opnr- 12 -oocuerr > PAGE IS-------------- (pu Z9-MAH-1SM 12;2S:as,OT <re-Mfl-1934 1Ol07:dd) [S4HTM28211OK-PIIT1 *282-0----MOtgg- friaary S4NTCS2B2--rrofiie; v.k. grace ----EDGAA COPY------------"Client Oocuwnt: DOCUMENT i <Paga> ting facilities n eanages Grace's anvironpental rsaadlation activities. The Responsible Car* prograa of the Cbeaical Maiufacturors Association, in which Grace's Unitod Stitts ctimicii operit iont hat* particlpattd, has D*n aitsndad to Oraca op*rations aorldaida under tha neat `Coaaitaant to Caro'. Tho goal of this prograa is to proaote bast aanagoaent practical in th* araas of product itwardsnip, aaplova* hoalth and safaty, coaaualty aaaronoas and aaargtney ratponsa, prorata oafaty, distribution practicas and pollution prevention. Grata's EH* auditing prograa mb also baaa expanded to include all fscUltiai worldwide; this prograi involves tha oniita inapaetian of facilitias for coaplianea with applicabla lavs, aa nil at Gract's polieiat, standards and guidaLinas. Saa Itto 3, 'Lagsl Procatdlags*, in this Rtport, snd `Nanageaent's Discussion and Analysis of Results of Oparatinnt and Financial Condition' in tha Financial Supplaaant, for infemotion caiceming nnvlrnouentel proenadings to akich Qract is a party. MATERIA! S AND ENERGY Tha availability and pricoi of tho ran notorials and fuolo uoad oy Grace ara subjact to worldwide aarhat ooadttions and governwsntnl polieiat. On tho basts of asitting arranganants, draco doai aot anticipate any aoj or disruptions of its business in ISM as a rasvlt of shortagas of raa notorials or energy. Skoald shortagoa occur, thoir offact on Graca'a operations would tfapond upon tkair nature, duration and savarity and consequently cannot ba deieraineU at this tina. Mcaavar, arranganants hava boon node, and sill continue to be nade, for long-tore cooeitwents far aany of Grace's raw enterislw and real rsquireuenta froa priaary soirees of supply. ITEi 2. PROPERTIES. draca operates choalcal, aaaifactunng ana otmr typos of plants and fscilitiaa (including offis* and other ssrvlce facllltlsi) tnroughost tha norId. Oraca considers xtt a)or agorating propartias to ba in good operating cdroit ion and suilabla far tnelr currant use. Although Grace ballaveo that too productive capacity of nott of its plants and other facilities It adequate for currant operations and foreseeable groertit, it conducts ongoing, long-rargt forecastieg of its capital requireaents to assure that sdoitionai capacity sill ba available eras and at needed (see irroraation regarding Graca'a capital aaponditires on page F-28 ot toe Financial Supplanent). Accordingly, Grace does not anticipate mat its oparations or incona Mil bo aatortally affected by tha tbsanca of available capacity- 13 - OOCUtfM 1 PAUi t*--(PD 2 MM-1BS4 12:25:05,MO 2B-MAR-igga 10:07:44) [0NYC4282|10l<-PRTl_4282 C--geOBeS' primary si4*rC4za2""Protiie: W.H. GRACE -EOQAB COPY*""*"*"*--""Client OocuMnt: DOCUMENT i <Page Additional information regarding Grace's properties it (Ct forth ir. Item 1 above, in sentBuies v art VI en page* F-35 and F-36 of tha Financial Supplement art in Notai i, a and ii to grace's consolidated Finaacial Stataaantt ir tha financial Supplement. ITEM 3. LEGAL PROCEEDIhOS. ASBESTOS litigation. Grace it a oatAtdirit in lassults relating to previously told asoestes-containing products and anticipator that it 111 b* nanto at a daranoant it additional asbestos-related lamsuits In tha future. At year-end 1993, Grace ms a defendant in approximately 38,100 asbestos-related intuits rapratanting approximately 68,700 claim (at coopered ta approalaately 30,000 lavtuits ana 53,000 claim at year-art 1002). 02 of tha laatuitt pending at year-end lain involved claim for property damage allegedly caused by tha uta of aiDtttot-centainlng materials in tha construction of buildings. The plaintiffs in tneta Javsuits garorally teak, among other things, to have tha defendants absorb the cost of removing, containing or repairing tha atMttas-containine materials in the affected buildings. Tim remaining asbestos-related larsuits involve claim for personal liiury. Ia nut of Grace's asoestos-reiited lamsuits, It is one of many defendants. Through year-end 1003, 120 asbestos property damage eases had bean dismissed aits respect te Grace mlthout payment of any damage* or settlement ameuets; judgments ears entered ii favor of grace in tmelve cases; in sin cases (tour of mhica are on appeal), Grace ess held liable for a total of 868.3 asllton; and 131 property damage suits and claim had been settled by Orsce for a total of *300.0 million. Grace Ms recorded a receivable for the insurance pro- casds It aspects to receive in cemectien arlth these adverse verdicts and icttlments, as mil as defansa casts initially paid by Grace (see 'Insurance Litigation* belom and Note 2 to Grace's Consolidated Fleancial Statements la tha Fanascial Supplement). Included In the asbestos property damage la*suits pending against Grace and others at yaar-end 1003 are tha folloving clast actions: |1) a Pennsylvania statt court action (PRINCE GEORGE CENTER, INC. V. U.S. GYPSUM COMPANY. ET AL., Court ef Common Pleas of Philadelphia County) covtrlng all caanerclml huildinf* in the United States leased in mholt or in pert to the United Stetes governneat on or after Hay 30, 1086; (2) an aetion, conditionally certified by the United States Court of Appeal! for the Fourth Circuit in Septaabar 1883 aad pending m the United States District Court for tha Oistrlct of South Carolina, covering all public and private cel Leges and universities in the United States vhosa buildings contain asbnttes materials (CENTRAL KSLEYAN COLLEGE, ET AL. V. W. R. GRACE, ET AL.); (3) an action (IN RE: ASBESTOS SCHOOL LITIGATION), brought In 1983 in tne United States District Court for tha Easters District * Pennsylvania, oa behalf ef all public and private elemeatary and secondary schools in tha United States 14 00CUMEN1 1 PJGI 17---(PO 28-MAR-1994 12:2S:bS.|0 29-RAA-1994 10:07:44) |4MVe47*2|i0K.pRTi_428?-C------ '--940999- PriMry 94NVC42B?---Profile: h.R. GRACI *eK<1AR COPY* --seat Document: OOCUffNl i Page that contain asbestos materials, which action hai Man scheduled for trial In lata 1994 on a linited nuabar of iiaxt: and (4) a purported clam action (MOfRSOM NEHORIAL HOSPITAL. ET AL. V. . R. BRACE A CO.. FI Al), filed in 1992 in tha Court of Como* Plaaa far Haapton County, South Carolina, nn haha If of all ontltiaa that oan. in Mole or in part, any tauldtng containing asbestos materials aanufacturad by Oraca or one of tlta other naaed defendants, otkar than bailOinon tub met to tilt data action laatuita deacribed above and any building owned by tba fadaral or any atata govarnaant. The remaining aabattaa lawseits banding at year-and 1BS3 iavnlvad claim for ptrtonal injury. Through year-and 1993, approiinataly 7,000 pereooal injury lawsuits involving 17,900 clalns had bean dlaalaaed with ratpact to grace without payment of any damages or aettlcnant anounta (prinarily on tha baata that Gract producta ware not involved), aid approximately 11,300 tuch mitt involving 13,400 cities had bean aattlad for a total of 952.2 million (tea [murence Litigation' below). In January 1993, In EONAR0 H. CARlOiKM, FT AL. V. AiiDCU PROOUCTS. INC.. ET Al.. tha United Statea Oistrict Coart for tha Intern District of Pannaylvama conditionally cartlflad a daaa of all future atbeatos paraonal lniury elaimanta, includitg individual! who have bean occupationally exposed to aabaataa-containiag natarlalt but who da not pretently alltgt aabaatoi-ralatad imury. Although Grace la not aaong tha defanoant* rimed in the ciaaa action complaint. diaaamination of tha required claaa notice my generate additional litigation against Grace. In 1991, tha Judicial Patel on liulti-District Litigation consolidated in tha Unitad Statas District Court far tha Eaattrn District nf Pennsylvania, far pra-trisl purposaa, all atbeatos personal injury cases pending in tha federal courts (including approsiaately 7,001 cases against Oraca). To data, no action has baan taken by tha court handling tha consolidated uses that would indicate whether the coasolldation will affect Brace'a cast nf disposing of thato cases or its defense costa. (race`a ultiaate aiposure in respect of its asbestos-related laatuita and claims *111 depend on tba extant ta which its Insurance will cover danagas far which it any be bald liable, anounta paid la aottiament and litigation costa, fmiie (aj Grace's Insurance carriers ham net acknowledged or have denied the applicability of thair insurance coverage to braes'a asbestos property damage laaiuits and claims (axcept as discussed below under 'Insurance Litigation'), (b) Oraca it currently in lltigalinn with certain carriers concerting tha applicability and extant of lta insurance cavaraga and () tha resolution of certain issues, primarily relating to the availability of coverage for specific years, will reeulrt further judicial proraadiags, Oraca believes that its insurance will covsr s substantial portion of any daaagas, aattlaaaet aoounts and litigation costs related tn its asbestos litigation and - 15 -OOCUWNT t PAfil 1M*"* (PD 2-U4j.IB94 12:25:05,MD 2tBAR-1B04 10:07:44) (PdMVC422|10KRAT1_4I82C........... -940099- Prinary 9*kYT4?6?--"Pro111e: ft.R. GRACE -- -EDGAR O0Pr----*****--*Cli*nt Oocuwast: DCCUKNT 1 <P*ge cities constqeantly, Grace baluves that tha resolution or iti asbestos litigation *111 not havo a aatorlal adverse effect on it> consolidated financial poiitlen or results of floatations. Soo `Insurance Litigation* below and Mot* 2 to Craeo's Consolldatad Fiaancial Stataaants i* tha Financial Supplaaent for additional inforaation. EMVIROMCKTAL AM) 01HER PROCEEDINGS. Gr*c* (togttkar with otbar companies) has haan dasignatad a `potentially raiponalbl* party* (*PRP`) by tha United Statas Environmental Protection Agaacy (`EPA*) aith respect to absorbina the costs of investigating and ranadiating pollution at various sites. Grace has not Incur*!) any aatarial liability aith raspact to sites as to which such procaaeings have bean concluded by agreement witn the EPA. At year.end 1993. procaodings ware pending aith raspact to approximately 33 sites as to afiich Grace has bean dasignatad a PAP. Although federal law provides that all PRPs My b* held jointly and savtrally liable for tha costs of inyostigation sad remediation of a sit*, after consideration of tha liabilities of othar PDFs with raspact to those sites and thtir raspsctlvw levels of financial respoaslbllity, Grica baliavas that tha mount rocordad in its Conselidatad Fleanclal Stataaents far environmental remediation is adaquats to cover its aaposwre with raspact to these sites <sat Note tt to tha Consolidated Financial Sutemntt in tha Financial Suppleaeet for further inferaation). I* addition, Grace is presently involved in litigation with iti insurance carriers seeking to hold than responsible for certain mounts for which Grace My bo hold liable with rospoct to theit sitas. the outcoae of such litigotlos. as wall as the anount of asy recovery that Grace aay receive in connection therewith, is prestntly uncertain. Grace is also involved in othar litigatioa, including certain oavironaental proceedings brought by fodtrol. state and/or local govsrnaant agancios and private parties. Mo such litigation is expected to result in significant Monetary or other sanctions or in other Mtariel liabilities. However, as a voluntary participant in tha EPA Toxic Substances Control Act Coapliance Audit Progran, Grace agreed to uedertaka a corporate-wide audit of conpliaaeo aith Sactioa of such Act and to pay a stipulated civil penalty for each study or report that should havo been. Out was not, subaittod to tho EPA is required under such Section. Althoagh final review of the audit is not coaolete, Grace believes it will be required to pay tha EPA poaattlas aggragatino frea C2S0.M0 to 5400,000 for iaferaatioa discovered In the course of tba audit. In addition. Grace has voluntarily raported to tha EPA violations of certain notification and relates roouirenests under such Act, and it is anticipated that peaaltias will be assessed against Grace in connection therewith: the eaeunt of suck penalties cannot be detemieed at this tine. For additional inforaation, sea Mot* 2 to Grace's Consolidated Financial Statements in tha Financial Supplement. 16 - -DOCUMENT i PAGE ig......--(pQ 2g-HAR-lO*e 12:35:05,MO ZB-MAR-igg 10:O7:44J [94NYC4Z82I1OKPRT1 426?C---- 94DSD4- -Primeiy B4NYC42B2---Proftle: W.b. GRADE *--fcDGAR COPY--****"**--"Client Document: DOCUMENT 1 <fagt In addition, in (Nril iJ, thw leuted States Department of justice filed soil against Orate in tke United States District Court tor the District or Montana, (treat Fells Division, alleging certain violations or tke Clean Air Act 11 connection with the eenolltlos or a eill in LiDty, lontana daring lets 1991 and early 1912. the coaplalnt soaks daaagos of up to 125,000 per day tor each or serin alleged vlolatlona and injunctive relief agsiast future vloiatloni, and tee Departaeat of Justice previously infonaed Greet that It nlgit seek penalties or up to *3.1 aiiiion la connection therewith. However, sutiject to cartata lufidiiiujie, Oracc and tea Oapartaant or Justice nave agreed in principle to svitle this wetter upon the payment oy Grace of penalties substantially Joeer tsen the anount initially contemplated fiy tke Depertaaat of Justice. Fuitnei , Hutco Corporation r'Hatco*), wmch purchased the assets of a Grace I. heel cel business in 1*70, praviously instituted a lawsuit against Grace la the united states District court for tee Oistnct or New Jersey eeekiig recovery of cleanup costs for wasta allegedly generated at a New Jersey facility during the peiiud of Grace's penersnip. Grace nas also filed a lawsuit against its insurance carriers seeking indemnity against any damages assessed against Brace in the underlying lsesuit, as wall as defense eosta. In decisions rendered during 1993, tee Court ruled that Grace is responsible for a substantial portion or Hatco's costs. In as earner decision, the court had resolved, In a Banner favorable to Oraca, certain legal iisuas regarding Grace's right to Insurance coverage; however, the ultimata liability of Oraca'a iaswrenee carriers will be deterainao at trial. Remedial coata, and Grace's share at such casts, will be determined once ongoing site investigations are completed and a remediation plan is approved by tne state ef Men jersey, which it not expected to occur before the letter part ef 199a. as result of the above factors, neither the arsoutt that Grace may oa required to pay Mateo, nor the anount that Hatco may have to abserb, nor toe amount of Grace's recoveries from its Insurance carriers can be reliably iitlmataa at this tiae. However, based on iti investigation to data, Grace believes that the ultimata resolution of this aatttr mill net have a listeria 1 affect on ita liaancial condition. INSURANCE LITIGATION. Grace i$ involved in litigation with certain insurant* carriers with respect to asbestos-related claias and environmental liabilities. Its asbestos-related lasuranet actions coasitt of two casts styled MARYLAND CASUALTY GO. V. . H. GRACE 4 00., both pending in the United States District court for the southern District of Maw York; STATE OF MISSISSIPPI V. Trc FilMlKOIt to., tl AL., pending in the Circuit Court ef Jackson County, Mississippi; DAruw IKJtPtNOfcNT SCHOOL DISTRICT V. UNITED STATES IINERAL PRODUCTS COMPANY, ET AL., pending in the United states District Court for the Eastern District of Tikes; ISOEPENMMI SCHOOL DISTRICT NO. 1D7, ET AL. V. . R. BRACE 4 CO. AND ACCIDENT 4 CASUALTY INSURANCE CO., ET AL., pending in the Flret 17 DOCUMENT I PACE. SO------------ (PO Prsaary 94NYC43A2---Profile: t.D. ORACE Page* 1?:2*:S.W 29-NAA-1994 10:0?:44) (C4NYC42a?]10KPflTl 49B7C-- --940999------- UX1AA COPY-----------------------------------Client Docunent: POCUNtNI 1 Judies*! District if! Hinnasotaj THE COUNTY OF HEIMEPIN V. CENTRAL NATIONAL INSURANCE COMPANY, ET AL., pending in *44 Fourth Judicial District in Ninntsota, f COLAS, INC. V. CENTRAL NATIONAL INSUnANCC CO., paading in tlu District Court for Ran46y County, Minnasota; AMERICAN EMPLOYERS' INSURANCE CO., AMERICAN REINSURANCE CO., AND COMMERCIAL UNION IRSURAMZ CO., AND UNIQARD SECURITY INSURANCE CO. V. W. R. QRACE * CO., CONTIICHTAL CASUALTY CO., AMI MARYLAND CASUALTY CO., ahich i* podding i tha Now York atsta court*; and R. H. ORACE A CO.-CONN. V. ADMIRAL INSURANCE CO., ET AL., ponding in tha Superior Court of California far tnc County of Laa Angelas. draco'a lnouranca action* ralating to aaviramMntal liaOllitLaa consist of MARYLAND CASUALTY CO. V. W. R. ORACE A CO., pandlng in tM Unitad Stataa Oiatrict Court for tha Southern Oisl'ict of Naa York; and KATCO CORF. V. R. R. ORASE A CO.-CONN., pandlng in tha United States District Ceurt for tne Oiatrict af Naa Jaraay. Tha relief sosght by Oraca in tMia aetiana would provide insurance aufficiant to cover Dratti astiaated akpaaura aitn respect ta the aetiana' subject nnttar, incluOlag daanga* lor anountt praviaualy eapended by Craea to defend clams and satisfy }udgaeett anil sattlanant* |saa Note 2 to omen's Consolidated fleasers! Statanant* ir tha Financial Aupplanant). The factaal bases underlying these actions are tk* nature of the underlying asbestos-related and enairoanental clams, tha language of tha insurance policies sold by tha carriers to Oraca and ta* drafting history of those pel idee. In March 1991 (in no* of the above asbestos-related caies Involving Maryland Casualty Co.j, the United Stales District Court for tha Southern District af Haw York held that Oraca'a prueary insurance carriers nr* obligated t* defend and indannify Oraca for daaagas (otnor teas certain punitive dAMgtS), stttlanant anoints and imgatloa costs nith resptet to AMMStos-raUttd property denag* end personal injury claim; In sd holding, tha Court dotornlncd that coverage for property danag* is triggarad by tha discovery of dsaag* during the period covered by the relevant policy. On Septanoar i, 1993, me Uaitsd state* Court of Appoals far the Secoad Circuit ravarsac the District Courta ruliag as to a `discovery of danag*' trigger far such Claim and, lnstosd, adopted a trigger based on tha data of instillation of nabastos-centaimng notarial*. In January 1994, tha united States Court of Appeals for the Second circuit granted Graces petit lot for a renearing concerning the September i, 190 declaim. Tne Second Circuit has requested that tha part let rebrlaf the usee of tha trigger of coverage, otiicn raoriafing is aehadulad t* ba concluded in April 1994. It is not known nRatbar oral argwiant concorning this issun oill be echtdultd In caoMotlon with tha rehearing of this cast. In Dacanbar 1991, the Mississippi Court referred to abovt also hold that Craea'a prinary and aacass Insurance carriers are obligated to defend MM) indemnify Oraca, dalansming that, for purposes of insartnce covaraga, d*n*ga to buildings fro asbestos-containing products occurs at tha tine men products are put in plan* and that the dosage centsnues as long as the building contains tne products -DOOMNT l PMk *1--(PD .Prlaary t4NC42W--PP9T114: .R. OflACE 12:25:05,D 29-IM-1994 10:07:44) [(4NVC42S2]10K'f>(Tt_47B7-C>--040*00. --"ECCAJI eoPY----------Client Docuaant: OOCTJUlNT 1 (rartrrao to it a * coat mucus trigger ') In Noveafcar 1002, the Hinnoaota court rcftrrati t aoova reached a tlailar daemon in intarprating a Orac* insurance policy. In io*3, Orac* received (74.6 aillioa undar aittlaaanti alth intursace carriers, in raiMiurCMMnt tar amounts previously expended by Grac* In connection aim atoastos-raiatad litigation. Thai* settlasantt alio provide for future raiaoursanents of (114.0 aiilian. In early 1994, O-in iittlad vita two aooitlonal murine* carriart and racairad approilaataly (M.S aillion undar ucn iittiaaantt. Prior to 19(3, Orac* received payaanti totalling 997.7 auiion from iniuranca earrlari ($30.9 aillion prior to 1(91; (55.9 aillion in i9i ana 01.5 aiiitoa in 1092), tit* Majority of ahieh rapraiantad th* aggregate raaainmg obligations ovad to Grac* oy thoia carriart for priaary-lavol laiuranca coverage arlttan for tka pariod Jun* SO, 1(62 through Jan* SO. 1967. At a ratult of tn* payaanti received in 1(90 and 1(91, iniuranca litigation war* diaaitiad at to th* prlaarylavtl product liability inauranc* coverage previously told by tha ralavant insurers to draco; hovaver, litigationt continue at to ctrtaia otner prxaary- and excast-laval carriart. onca continual to bo involved in litigation vith cartain of iti iniuranca carriart, including an affiliatad aroip ot carriart, tkat had agreed to a tattltatnt and had aad* a tiriat of poyaontt tharoundor during 19(3. Tn* group oi earrlari subsequently notified Orac* that it oould aot honor tka aortaaant (atiich had not boon executed) duo to tha (aptoiabar 1. 19(3 dacltion of the United State* Court of Appaalt far tn* Second Circuit referred to abw. Grac* paiiavat tut th* tottlaaant agraaoant it binding and initiated action tc enforce tha tattlaaant agroeaont. In January 1994, tha Unltsd States Oiitrlct court Tor the fatten) Dittrjet of fatal hole that the agraiaant it anforcaabla. in* affiliated group of carriart it axpoctod to oppoal tali ruling to tho United stotot court ot Appaalt far tha Fifth Circuit. sa* boti 2 to Qroca't contolldatod Financial Stataaantt, appearing in tha financial supplaaant for additional infCroatian. Fuufcu SILICA plant LITIGATION. In January 1993, Orac* Initiated legal action m tn* kalgian courts against tha Flaaiiik governs*fit to rocovar loaaat ratulting troo the cleiinf of Grace's finad iilica plant it Putra. lalgiui. (Sa* bote 9 to Graces Coato11dated Financial Stataaonti it tho Financial Supplontnt for aOdltlonal iaforaotioa). (k'leo it seeking danages in taoata of four billion Belgian franca (approiinatoly (120 aillion ot current exchange ratal), plus intaratt and lots of profits. Thar* ir* alto ponding tvo sacarat* arbitrations, one involving th* ongiioaring eonpany that ares responsible for tho design and construction of tha fuatd silica plait, and tka other involving a c lain by tha ccapany from uhieh tho plant had agrtad to purchase hydrogan under a long-tern 19 "'DOCUMENT 1 PAGE 22*------------ --------- (PD 28-IMM994 12:25:05,l*> 7E-HAI-1094 10:07:44) [9eNVC4?A2)ia<.PTi <! C...............94044-.. -Prinery P4NTC42S?-----Profile; w.fl. GRACE ---EDGAR COPY----.------Client Document: DOCUMENT 1 *Page contract. Tii* outcomes of that* proceeatags aay atlecl tl action filtC agaiest tha Tlenlih government. ITEM 4. SUBMISSION OE BATTERS TO A YOU Of SECURITY HOLDERS. this ltaa it inapplicable, as no Batten mre submitted to rote of the Cenpany'a eecurlty holder! Ourinf tM Tourtk quarter of 1003. EXECUTIVE OFriCEAS Tm Company* ouirant executive officarl are lifted beloa. Executive officer! are elected to serve until TM tallowing annuel Beating o" the CMfr'i Boare or Directors; tne next sueti Beating If tchaduleC to be held on May 10, 19S4. NAHT AMO AQF OFFICE FIRST ELECTED J. P. Bolduc 194) A. II. Bfber (SO) r. Ptr Boor (93) HuQh L. Coroy (74) Joon-Louis droic (62) CoMtMtlM L. (61) Donald It. Kalaikan (39) Janas P. Mevvet (St) Brian j. Bmti (49} President and cniaf Executive Officer Executive Vice President and General Counsel Executive Vice President Executive Vice President Eiecutive Vice President Executive Vic* President Eiecutive Vico President Executive Vice President Executive Vico President and Chief Fiaascial Officer 08/02/90 01/01/93 06/10/93 01 /C-5/99 12/03/97 05/10/93 09/00/91 12/07/09 09/00/90 07/06/B9 All tne above eiecutive ofticert Rave been actively engaged In Oraea'e buvieese Tor me past five yean. Mr. Carey aes a partner of Finlay, Kuible, Ragner, Heine, Underberg, Manley, Mayenoa A Catty (a lan fin) froa 1983 to 1M7, that fifB if on-rently involved in bentruptcy proceedings coaaencad aabeaquant to Hr. Carey's Oaportare. Hr. csrey it cooperetlng vith th* trustee ie banaruptcy to facum a plan or reorganization tnat would result in sobs Halted liability far Or. Carey. 20 - UOCmtKT 1 PACE 23--------- (PO 2S-HAR-1MM 12:25:05.* 'R-RAfl 104 10:07:44) [O4HVC422M0K-nri_42*? C*- -- -9409*9 -P'lajry 4HYC4282---Profil*: R.R. MACE --F1XUH COPY""----------------------Client Docuewnt: DOCuetNl i <ragr part ii lit* S. MARKET FDR REOISTRAIfT'S COMON EQUITY AND ftflATED STOCKHOLDER HATTERS. Escapt at proviOad below, th* infomatian callsd for by this Itsn opptart in th* Financial Suppltaont un<Mr th* beading 'Financial tunwary* opposite th* caption 'Other Statiitiet Coano* shareholders of record' (pap* F-2B); ond*r th* balding 'Quarterly Sunwarv' oppoaita tha captinnt 'Dividend* d*:l*r*d p*r cannon sliarf* and 'Hirfcet one* of coanon stock* (page F-2S); and in Not* 13 to Grace's Consolidated Financial Stat*a*nts (pig* F-ifl). Each char* of th* Coapany's Cornon Stock bat an attandant Coanon stock Purcbasa Right ('Right*). Th* flights ara not and ail] *ot b*ca*n exereleabl* unjats and until cartain aaents occur (as datcrihad below). until such avanta occur, the Rights Kill autonatically trad* alth tha Como* Stock aad **par*tc certificates for th* Rights bill not Pa- distributed. Th* Right* will baeonc eirreliable on th* tanth business day (or such latar business day as nay be fund by tha Coopanir'b Board of Directors) aftr a porsen or group (a) btcon** an 'interacted lharsholdar*. at daflntd in Sactinn 012 of th* M> York Businas* Corporation Lav (genarally, a beneficial oanar ef M or nor* of the outstanding voting stock), or (b) can neat a tandar offer or exchange offer that would result ia such parson or group boconiag an interested shareholder. Tn* Right* mil not hav* any voting power at any tin*. Mltl th* Rights bacon* enercisable, each Right will initially *ntitl* the holder to buy froa th* Conpany on* ttur* ef Cannon Stock for SBf.50, subject tu *d]itn*nt in cartain casts ('purchase price'). If, at any tin* after th* Rights beewe* exercisable, (a) th* Conpany Is involved In a ewrgwr or ether business cenblnetioa in Much (i) th* Conpony is net the surviving corporation or (it) any Of the Coanon Stock is changes or converted into *r atcbengod for stock or other securities of any other person or cask or other proparty, or (U) SOt Of tho Company's istots, cash flow or earning power is aold, each Right will eatitla tb* bolder to buy a nuaber of share* of coaaen stock of th* ecscaring ceapany haring a aarket eatua equal to twie* th* pursbeo* price. Alternetively, each right not oanad by a parson who bocoaos an interested sherebelddr would Meat oxereisobl* far Coanon Stock for other cemideratien) having narkei value equal to twic* lit* purcfias* rwiew. Th* Rights a*y be red#weed by the Conpany at S.02f per Right (payable la cast, Comon Stock or any other fern of censidsratioe deeaed epprepriet* by th* Board) at anr tine tbroagh th* tanth bustnets day (or such later business oay as nay bs filed by tha Boardl after a public aaneuncanant that a person or group has bocOM an interested shareholder; this right of raaanption nay be reinstated if all inttrastad shareholders reduce their holding* to - 21 - 11 -OOGLNEN1 1 EASE 2.--~ (PO 2U-KM-1994 1Z:25:C>5|M) 2S-NAR-1994 10:07:44) 194NYC42B211 OK PRT1 4282-C----940999- -rruaary 94NYC42M---prof lla: *.*. grace ----EDGAR COPY------Clitnt Document: DOCuttTt i <rage> ioa or less of tM outstanding common Stock. Tlta Rights mill expire in caeuiry 1997. Th Rights aay bo meanae*) aithor brfor# or after thoy become ssarcisable. Homever, the basic aeenaaic tams of tha Rights (such as the purchase and redemption prices and the aspiration data) cannot ha caangsd. ITEM S. SELECTED FINANCIAL DATA. Tha information called for by this Itea appears uador tha heading 'Financial Sumary' (page F-29 of the Financial Sumleaent) and la hntnx 5, t, 9 and IS to Grace's Consolidatad Financial Statement* (pagaa F.l?, F-13, F-17 and F-22 of tha Financial Supplaaant). In addition, Fxtiihlt 12 to thin Report (pnga F-41 of the Financial Supplaaant) coatsIns tha ratio of earnings to fined charges and coabintd fixed charges asd preferred stock dividends for Once for the years 1960-1993. ITEM 7. UANAIMFNT'S OISCUSSION AM) ANALYSIS OF FINANCIAL CONDITION ANO OFS1J1 IS OF OPERATIONS. Tha infcreation callad far by this I toe appears on h--t-1 F-30 to T-33 of tha Financial Supplaeent. ITEM . FINANCIAL STATENESTS AND SUPRLEKHTARY DATA. Saa tha Indax to Consolidetsd Financial Statements and Financial Sletsment Schedules and Exhibits an page F-i of the Financial Sufplenent. ITEM 0. CHANCES IN AM) OISA0REENENT3 WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. This itan is inapplicable, ae no such changaa or dlsagreeeants have occurrod. PART III 1TEN 10. DIRECl (MS AM) EXECUTIVE (FFICERS OF THE REGISTRANT. Except for information regarding the Coapany's exacutlve officers (see page 20), the information called ter by this Itsn is lacorporatad in this Report by rararance to tha dafinltlva Proxy Statement for the Coapany's 1994 Annual Nesting of Shareholders, excapt for Information not deaaed to be 'soliciting safer141' or - 22 DOCUMENT 1 EASE -------(P0 2B-IUft.ie i?-?S:05,UD ?t-IIUIie4 10:07:44) |04NYC4?]tflK-P*T1 428K.C--- -- --9409M- Prinnry 94MrC42S2-*Prof tla: .*. (MAC! COPY.......... .......... ...... *-------- Client Doceaent: DOCUMENT t <PK> Mlled* with tIM Securities and Exchii^e Coaaiexion esC'). infometion eet>|ect to Regulations 14A or 14C under the Securities Exchange Act of '< (`Exchange Act') or inforaatlon subject to the liabilities of Section IS of the Exchange Act. ITEM 11. EXECUTIVE COMPENSATION. ITEM 1?. SECURITY OMCRSHir OF CERTAIN 8ENEFICIA1 OMNEftS AND MANAGEMENT, ITEM 13. CERTAIN RELATIONSHIPS ANC RELATED TRANSACTIONS. The information celled for by I tens If, 12 aed IS ii incorporated in this Report by reference to th definitive Proxy Stataaent for the Coapany's 1004 Annual Hasting of Shareholders, except for infoneation not deaaad to be 'solicitiag aateriol' or filed* with me SEC, Information subject to Regulations T4A or 14C inder the EscTienoI Act or inforaatlon subject to the liabilities of Section IB of the Exchange Act. PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCW0U.ES, AND REPORTS ON F3RU t-K. FINANCIAL STATEMENTS AND SCTCURFS. See the Index to Consolidated Financial Statements and Financial Statanaat Schedules and Exhibits on page F-1 of tho Financial Suppleaent. REPORTS ON FORM I K Tho Coaoeny filed no Reports on Fora l-K during the fourth quarter of 1983. EXHIBITS. The exhibits to this Report ore listed bole*. Other then exhibits that ara tiled herewith, all exhibit* Listed belen are incorporated herein by reference. Exhibits indicated by an atterlafc {*1 are the nanagsaent contracts end compensatory plans, eentrects or arrangement* required to be tiled as axhibtts te this Raport. EXHIBIT MERE LOCATED Certificate of Incorporation of a. R. Grace 4 Co., as anendtd By lews af W. R. Oracn t Co., as Mended Exnibit 3 te Fora b K {filed s/O/M) Exhibit 3.2 te Fora 10-K (filed 3/ad/OI) - 13 MCVMEKT I PAGE ----------------PriMfy MNW42W*1--Profile! <Fag -- (PD 26 HAA 1M4 I3:2i;06,ic> 26-646-1084 10:07:44) (84MVC4262) 10K-PBT1,42*2 C------------040999 CflACE I06AA COPY--"Pliant Document: DOCUWfNT 1 Ifxnrturi dated av of Sept** bar 20, 19B2 among v. R. Grace & Go. Conn., V. R. Qrsct S Ce. and Beaker* Trust Company Enitit 4.2 to Fora 10.K ifiiid 3/2;0*) Indenter* dated as of January 28, 19*3 aaong V. fi. Orate A Co.-Conn., tr. R. Grace 4 Co. and NationsBank of Georgia, M.A. txkibit 4.4 to Frn 10-K Ifilod 3/26/03) Credit Agreement dated as of exhibit 4.2 to Tom A*K September 1, 10*2 among *. R. (filed 9/2G/92) Grace A Co., 0. ft. Grace 4 Co. - Conn, end the Several Bonks Parties thereto and Chemical Bank, as Agent Amended and Restated Rights Agreement dated as of June 7, 1990 beteean ft. R. Grace A Co. and Heaufacturcrs Hanover Trust Goapeny Cxhibit to Amendment Form 4 to Application for ftegsstratioe on Form 4 B ifiied 6/19/90) ft. fl. Grace 4 Ce. Ceeeutive Salary rvotoctsen Plan, as encoded Exhibit 19(f) to Fern -R (filed 6/9/46)* ft. R. Grace 4 Ce. 1M1 Stock incentive Plan, as amended ft. ft. Grace 4 Co. 1946 Gtock Incentive Plan, as emended ft. ft. Grace 4 Ce. 1999 Slock Incentive Plan, as emended Form of Stock Option Agreements form of Restricted Share Anrd Agreements Exhibit 24(a) to Form 10*0 (filed 4/13/91)* Exhibit 24(b) to feri 10-0 (filed 4/13/91)* Exhibit 24(c) to Fora 10-0 (filed 4/13/91)* Exhibit 10(b) to Form 10-K (filed 3/26/92)* Exhibit 10(1) to Form 10-K (filed 3/24/92)* Information Concerning W. R. Grace A Go. Incentive Compen sation Program and Deferred Compensation Pregm Pages 10 and 11 of Proxy 3tatameni (filed 4/10/93)* 9. R. Grata A Co. Long-Tcra Incentive Plan Exhibit 10(1) to Fom 10-K (filed 3/29/91)* ft. R. Grace A Co. Retiranent Plan for Outside Directors, as amended Exhibit 10(a) to Form 10-K (filed 3/26/92)* 74 OOCUtfElfT 1 PACf 77----------------------- (PD ?*-MaP*1904 l2;2ft:05,U0 29-MA8-IW4 10:07:44) f04KYC428ZJIOK-Wn_428?-C----040999* PriMry 01NVC4287TMProfi Je: W.R, GAACf **-*E0GA OocUMnt: DOCUUIMl 1 Eeployweat Agreement dated August Exhibit 10(f) to Pom 7, 10*0 MtwHO It. n. Greet ft Co. 10-K (filed 8/00/01)* end Joseph B- bright, Jr. Eaploynent Aflroawnt datad at of April t, 1001 between h. ft. Grace ft Co.-Conn, and Constantine L. Harper*, as encoded exhibit 10(a) to fam 10-K (filod 3/20/92)* Housing loan Agreeawnt dated a* of August 1, 10*7 between ft. ft. Grace ft Co. aatf J. P. Bolduc, related Anendeent and Assignaent dated day 10, 1888 Exhibit I0(q) to For* 10-K (Tiled 3/29/9*); Exhibit 10(1) to Form 8-K (filed */9/ft*ja tnploynent Agreeewni dated August 1, 1903 between J. P. Bolduc and ft. ft. Grace ft Co. Filed kirevitli* Stock Option Agreement dated June 80, 190ft between David l. Vun&ch and ft. A. Grace ft Co. Filed herewith* Stock Option Agreement dated June 30, 1903 between David l. Vunich end ft. ft. Groce ft Co. Tiled herewith* national Bedxeel Core, Ine. and Subsidiaries Executive Bonus Pleat Exhibit 10 (ea) to Font 10-K (Hied 3/28/92}" ftetirwsent Agreement between V. II. Groce ft Co. and J. Peter Groce dated Decoder 21, 1092 Exhibit 10.23 to For* 10-K (riled 3/28/93)* Executive Severance Agreement dated as of September t, 1092 between ft. A. Brace ft Ce. and J. P. Bolduc Exhibit 10.24 to For* 10-K (filed 3/24/93)* Executive Severance Agreewant dated Saptenber 1, 1992 between ft. A. Brace ft Co. and Constantine l. Hanpara Exhibit 10.28 to For* 10-K (filed 3/20/93)* Fora af Executive Severance Agreeeant between ft. A. Grace ft Co. and others Exhibit 10.20 to For* 10-K (filed 3/28/03) * 25 -OOCiaENT 1 PAOt 29-------------- ----- ------- -- <PO Priury 94NYG42t2-"*Profile: W.R. VMCC <Pege> 12:2S:05,D 28MHl4 10:07:44) (94MYC4293)10K PRT1_42?-Cr ---- seiwsa '"EDGAR copy*"**""""'"--""client Docuwent: DOCUMENT i Coetelling Aoreeaent dated Jim 1, 1902 bet.e.n *. R. Gram iCo. and Kantky Mtwiitii, Inc. exhibit 10.29 to Font to-* (filed J/2fl/93]* Incentive Cowpeetetien Agrtwent dated June 1. 1902 between Nationel Medical Care, Inc. and Kanaky Asiociatet, Inc. EitUii 10.30 to Fern 10-K (filed 3/20/93)* Conceiting Agreement dated as sf June 19, 1903 by end between National Medical Care, Inc., The Maiphrey Group. Inc. end Gordon J. Huephrey Filed hergwite* Enoloynent Terwiiutioe Agraeaeet dated June 30, 1993 between J. R. bright, jr. and nr. R. Grace 9 Co. Filed eereeltrr *. I. Drerr 4 Co. Supplemental Eiecutlve Retiraaent Rian, ae encoded Flied hereeltn* beiehtad Average limber of Snarai and Faraiegt Used in Par Share Coapntatione Filed herewith (in Financial Mpplentnt te 10-K) Congutation of Ratio of Earalaga to Filed Charge* aid Cabined Fiend Charge* and Preferred Stock Dividend* Filed hereelth (in Financial Supplement tc 10-K) Selected Portion* of the 1993 Annual Report to Snarenoider* ef It. R. draee S Co. rlied hereeltn (In Financial Supplement tc 10-K) Lilt of Subtldiaries ef (. >. Grace I Co. riled nerewttn Concent of Independent Accoun tant* Power* nf Attorney Filed herewith (in Financial Supplement to 10-KJ Filed herewith - 2* - DOCUMENT 1 PAGE 2==*---.*- (PO 2|. UR. 1004 12:25:05.10 2B-IMR-194 10:07:44) |04NVC4??|inK-PPn.4787-C---0400D0- Primary g4NVC47B2---Prof ile: W.R. BRACE --Client Doeueent: DOCUMENT 1 <Page> SIGNATURES Pursuant to the requiresents of Soction 13 or 1510) of the Securities Exchange Act of 1934, the registrant hat duly caused this Report to be signed on it* behalf by the undersigned, thereun to duly authorized. IS. R. GRACE l CO. By Itl B. J. Sbith Date: Harch 2*, 1904 B. J. Saith (Executiva Vice President) Purtuant to the regulreatats of the Securities Exchange Act of 193*. this Report has been signed belau by the fellovlng persons on behalf of tho registrant and in the capacities indicated on March 28, 1094. SIGNATURE TIUE J. P. Bolduc* President end Director (Principal Executiva Officer) G. C. Oacay* E. M. Duffy* H. A. Eckaann* C. H. I mart, Jr.* J. P. grace' R. H. Oriorson* C. L. Haapars* T. A. Moines* G. J. Huapnrey* G. P. Jaakins* R. C. Macauley* ] R. Millikan* | J. E. Phipps* j J. A. Pualichar* j E. V. Pyna* ] 0. W. Robbias, Jr.* | G. S. Vance* ) D. 1. Yunich* ] Oiractors Ilf B. J. Snith (B. J. Smith) Executive Vice President (Principal Financial Officer] iti R. II. Sukenik (R. II. Suhenik) Viet Praaldant and Controller (Principal Accounting Officar) * By signing hit nan* hereto, Robert B. Lana ia slgnino this docusent on Dehalf of each of the parsons indicated above pursuant to poners of attorney duly executed by such persons and filed trith the Securities and Exchange Coanissioa. By iti Robert B. lain Robert B. lean (Attorney-in-fact) rr -  -DOCWBKT i Mat 30-*--"*"**- IPO Z0-IMR-19M 12:25:06.HO 28-RAR- 1904 10:07:44) |94lfVC47R211(hC-PRTi 428? c--*--94M99* -Primtry 94trr'CA2B?--rrnTl 14' K.ft. GRALt EDGAR C0PV"-,**'*-"**'**""*Cl !* Document: OOCiatfKl i FINANCIAL SUFPLtatNI to Annual Report on Fora m t Tor the Voir Ended December 31. 1993 W. R. GRACE A CO. AH) SUBSIDIARIES Index to Consolidated financial Statements and Financial STataaint Schedules and Exhibit! PACE nepart of IndvpenOem Accountant! on financial Stalaaoat Schedules. . F-2 Consent of Independent Accountant!........................................................................... F-2 Rtpart of independent Accountant!........................................................................... F-J consolidated Statonant of Oporatioat tor tlM thro* years In tlia period ended December 31, 1993........................... ...................................F-4 Cansolidated Staieaeni at Catn floes Tor the three years in the period ended Decemoer 31, 19*3..............................................................F-S Consolidated Balance Sheet at at ueceabar 31, 1993 and 1992 .................. F-6 Consolidated Statement of shareholders' Equity for the three yeere in the period tnddd December 31, 1993 ................................. F-7 Notee to Consolidated Financial Statements..........................................................F-S-f-24 Ouarterly Burner y - Unaudited......................................................................................... F-26 Quarterly Statistics................................................................................................................ F-2{ horldeida Operations................................................................................................................F-27 Capital Eapendlteres, Net Fined Assets and Deprsclltion end Lease Amortlienon.........................................................................................F-2S Financial Sumsary...............................................................................................................f-29 uenogeannt s OlscuseiOn end Analytic of Results of Operations and Financial Conoition................................................................................F-30 financial statement schedules scneoult il Aaountt receivable from officers and eapleyeeiexceedug $100,000 .... r-34 schedule T - Property, plant and equipnent ............................ r-S5 Schedule VI - AccMilated depreciatioi, dapletloe and amort station of property, pleat and equlpnont.............................................................. r-36 Schedule viii valuation and qualifying account aad reserves.............................................................. r-37 Schvdule ix Shortterm berrovings ............................................. I 38 schedule x - Supplementary incaee steteaent ihfornetlon F-39 lahlhit ii: meighted Average NUBbtr of Shares and Earaings Used in Per Shoe amputations................................................................................ F-40 Frsioit 12: Computation of Hatio of Earnings to Fixod Charots aad Coabintd Fieo Chargee aad PreferredStock Dividends .... F-41 The finaiciel flata luted above appearing in this Financial Supplatant are incorporates dy refereaee herein. TM Financial Statenent Schedules should ha rad in conjunction eiih the Consolidated Financial Statements and Notei tiiereto. Financial statement! of 50%- or leit-omwd persons and othnr parsens accounted for by the equity method have bean omitted as provided in Rule 309 of securities and Exchange Commission Regulation S-X. Financial Statement schedules not included have been emitted because they are not applicable or the required information is shown in the Consolldotod Financial Statement! or Nates inertto. F-1 *DOCUMENT 1 RAPE 31------------------ ------------ (PQ 2S-MAR-1994 12:25:05,MO 28-MW-1951 10:07:41] (MMYC4282|10K-PRT1_42B7-r.-.." -- .'040eo- Prinary 04NYC42*?---Profll*: *.. OtACE ----tDGAfl COPY-"--'-------- CUtnt Docuntnt: noetaeai i RfPOflT Ol INOCTCNDCvr MCOtMTANTS Oft FINANCIAL STATEMENT SC*MAES To thi Shareholders and Board of Oirectora of k. I. OTact 1 Co. Our audita of tf>* oontalldaiad financial statements rafarrta to in our report datao February 0, iMa appearing an page <5 of thi 1995 Annual Report to Shareholders of . R. Grace a Co. (nhich report aid COUCHattad financial statenents are mcludad In tlua Amual Report on font 10-K) alto included an audit of the Financial Statement Schedules lilted oa pa F-i in tna Index to Concoladatad Financial Statements and Fiaancial Stattaant Schedules and Exhibit* e* tnia Fern 10 K. In our opinion, these Financial Stateuent Schodulac preaent fairly, in ell material roapecta, the information tat fortn tnarein advan read in tonjunctien with the related coisolidated financial statements. PRICE MTERMOOSf Nee York, Rae York February 1, 1004 CORSENT OP INDEPENDENT ACCOUNIANTS *e hereby consent to the iecorporetion By raTaranct in the Pros- pactuaes constituting parts of the Roglstration Statements on font S-3 (hoi. 33-51041, 33 SOSOS and 33-2S962) and For* - (Nos. 33-7504, 33-15112 and 33-27960) of V. R. Grace a Co. of our report dated February (, iaS4 appearing on paga 25 of tla 1003 Annual Rapart to Shareholder!, amich report la Included at page P-3 of tkla Report on Fora ION. Nt olau conaont to tho laelusion in tils Report of our report on tho Financial Statement Schedules, Mich appears abort. PRICE IrATERMOUSE Me- York, Nee York larch 20, 1004 f-2 OOCINENI 1 PACE J2--------------------- ------(PO 2a-BAR-IB94 12:25:05,*) 2C-NAR-1994 04:50:13) tMNVC42*2IF0fill1O K *7t2 C-------------------->940999- Priwary 94NVC42e2'-*f*rotile: W.R. ORACE "'EDSAA G0PV~..--v*-vv.Clieot Documrt: DOCUMXI i Pi54> IIANAREHEUT'S RESPONSIBILITY FOR FINANCIAL REPORTING Msnagenest la raspostible lor ths preparation, at Mil *4 the integrity and objectivity, o1 the coneoiidated financial atataaaati and other financial infsrnation included In this report. Such financial infomation hat Man prepared la conforeity slth generally accaptod accounting principles atd accordingly includes aertaln anounts that rapreaant aanaganant't best astieates and ludgnaata. For many years, naaapoaant has aaintaiaed intaraal control aystana to assist it In fulfilling its responsibility for financial reporting, including careful selection ef personnel, segregation of duties, Toraal business, aceauntiag and ripnrting policies and precedurea and on eatenslvo 1eternal audit function. Mile no systea can ensure elinieation of all errors and irregularities, Oraco's systeas, niMch are reviewed ati atoeifled in response to cnanglng conditions, have bean Ootiynod to provide reasonable lasurunce that assets era tefaguerded, policies and procedures era followed and transactions art properly encuted and reported. The concept ef reasonable assurance is based on tna recognition that there are lfnitetions in ell system and that the cost of such systeas should not ticeed the benefits to ba derived. The Audit Cownittee ef the Board ef Dimeters, anicfl is cooprlsed of directors Mo are neither officers nar employest of nor consultants to Grace, aeets regularly with Osea's senior financial personnel, istsmal auditors and independent accountants to review audit plana and results as Mil as tha action taken by aanagaieent in discharging ite responsibilities tor accounting, financial reporting and internal control systeas. The Audit Coanitlee reports its flndiegs and also reccmeoos the selection of independent accountants to the Board of Directors grace's sunagaaant, Internal auditors and independent accountants haws direct and cenfidanllal access ta the Audit ConnIttee at all tiaes. Tha independent accountant* are engaged tu conduct audits of and render a report on tea consolidated financial etaiewents in accordance with generally accepter auditing standards. These standards Include a review af the systeas of internal controls and tost* of transactions tu the extent considered necessary by the independent accountants for psirpose* ef supporting their opinion as set fortn in their report. B. J. Salth Esocutiva Vice President and Chief Financial Officer RFPOBT or INDEPENDENT ACCOUNTANTS Pflrcf WATERHOUSE 1177 Avenue of the Amricos New York, NV 1003C February S, IBM TO THf SHAflEHOLDEBS AND BOARD 0T DIRECTORS OF U. R. GRACE t CO. In our opinion, the consolidated flraecial stataaents sypesring on paS*s F-4 through T-74 of this report present fairly. In all Material respects, the financial position ef W. R. Creee A Co. and subsidiaries at Dccs*Mr 31, 1993 and 1992, and tha results ef their operations and their cash flows for each of tne three year* in the period ended DecvMOor 31, 1*93, In conformity with generally accepted accounting principles. These financial statsaants are the responsibility of the Coapeny's aanogeaent; cur responsibility is to eiprest on opinion on these fieanctol stoteaents based on our audits, be conducted our audits of these staleaents in accordance with generally accepted auditing standards which ragwira that we plan ana perfant tha audit to obtain reasonable assurance ebout whether tlw financial statsaants are free of aatorial Miectateneat. An audit induces examining, on a fast basis, evidence supporting the amounts end disclosures In tl* financial stateaesti, assessing the accounting principles used and Significant estiaates wade by aanaganent, aed evaluating the overall financial statenant presentation. Ns believe that our audits provide a reasonable basil for tlw opinion expressed above. As discussed in Notes s and 16, the Coapany adopted new accounting standards fer ineane teres ami postroclraMnt benefits in 1902. F-3 * D0CUKN1 t PAQt 33.-------........... (po ?*.HAFl. igo. 12:J:06.UD 2S-m.IM4 04:50:13} | #41(1X4782 JFORH10K4?67c:-- <940094' Priaary 94NFC42S2-**ProfiJe: W.R. GRACF "-LDOAR COPY--*"** ......-.-ciiaRt Docuaart DOCLUFNl 1 CONSOLIDATED FINANCIAL STATErENTS A. R. GRACE t CO. AID SUBSIDIARIES CONSOLIDATED STATEMENT OF OPERATIONS <Taolt> <Caption> DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS <$> Siiti ang revenues .... ......................................................................................... . otntr mcooa (Mott 4).......................................................................................................... TotJi............................................................................................. ............................................ 1993 1992 <C> *4,403.1 64,337.0 42.9 69.9 4,450.9 4,406.9 1991 <t> 54,366.6 55.7 4.447.3 Cost of goods told and oparatlng aapantat.............................................................. Sailing, ganaral and adninistrativa aapantat . ........................................ Oapraciation and aaartlzatlan .................................................................................... Intaratt txpanta (Kota 91................................................................................................. HttaarcR and davelopaant axpaatas................................................................................ Proviuon rail ting ts aaMstos-ralatod iasuranca covaraga (Nota 2) . . Provision rotating to a fuaod silica plait (Nota S)........................................ Total..................................................... .... ............................................................................... lncoaa troa continuiag oparatloat brfora lacooa tana*............................... provision tor lncoaa tanas (Nota S)............................................................................ lncoaa Troa continuing oporatlons................................................................................ (Losniiincoao Iron discootinuad oporatlons (Unit 6)........................................ 2,996.6 1.029.T 22T.7 61.6 136.0 159.0 2,601.5 1.026.0 224.9 90.0 130.0 >4U.O 4,214.4 182.5 134.8 5/ a 7 (162.2) 2,649.7 982. S 237.9 115.4 129.1 4,108.1 334.2 137.5 701.7 16.9 Inccnar(loss) bafora cuailativa affact of accounting changas .................. Ciatuiativa affact of accounting cAaogtt (Notaa S and tdj ........................... Net income/(Jo**)................................................................................................................... 26.0 004.S) (190.0) t (294.S) 7IB.6 S 718.6 Earnings.'Ilots) par share Continuing Optrations...................................................................................................... Cuauiative affact of accounting chaagas.............................................................. Nat aarntngs/(losi|.......................................................... ................................................ Fully diiutad aarniagt par tiara: I .64 * (2-12) S (3.2*) 9 2.31 9 9 2.50 Cuntiiuiing OptratIons........................................................................................................... g 1.4S S .62 S 2 23 Ctmlalivc afttct of accounting cMangas................................................................. g -t - - (1 j s Nat tarmngt............................................................................................................................ ( .20 * --(i| * 2.40 THE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS. PACES KrTO F-ia' AflE I ITTCORAL.......................................................... PARTS OF INbSE STATEMENTS. <F1) HI NOT PRESENTED AS THE EFFECT IS ANTI'MIUTIVE. <;TiDla> F-4 DOCUNENT 1 PAd* 34..TM --.......... .. (PD 3S.MAR KM 12:23:0s,NO Jt-IWH 1894 04:50:13) (B4NrC42B2|F0RN1O-K_42*P C.............. 940999* -PriKjrr 4NYC475?*--Prof il: W. R GRACE ----EUGAfl COPY-.--*-.--Client Document: Document <Page CONSOLIDATED STATEMENT Of CASH FLOWS <Tbl* <Cjption> OCX.LABS IB Mil IONS 1993 <S> Oft BATIK ACTIVITIES Incane from continuing operations bafore incewe taxes........................................ ......................... Reconciliation tn cosh provides) by operating activities: Depreciation antf aaortixatlon................................................................................................................... Prevision relating te esbestoa - related insnrence coverage............................................ . . Provision relating te a tuned silica pleat .................................................................................... Changes in asters one liabilities, excluding businesses acguirad/divasted and foreign eichenge effect: (Increase)/decrease in notes nrd accounts receiv*>le, tat ................................................. Increase in inventories ............................................................................................................................ Proceeds froa settlementt of interest rata hedge ograaaentt ............................................ Net eipandituras for asbestos-related insurance coverage..................................................... Increase in accounts payable................................................................................................................... Other...................................................................................................... ..................................................... <c> $ 221.2 222.7 t&D.O (10).2) (50.51 67.9 (103.1) 50.1 (167.5) Nat pretax cash provided by aperating activities of continuing operations...................... Net prates cash provided by operating activities of discontinued operations.................. 301. 44.? Net pretax cash provided by operating activities ........................................................................... 1 aeons taxes paid.................................................................................................................................................. 345.0 (103.7) Net cash provided by operating activities............................................................................................. 243.1 1fl9? <t> S 102.5 224..0. 140 0 4ft.4 (7.3) .V? (70.3) 2*.5 (207.ft) 354 .0 174.3 537.7 (-) 430.3 1001 4 334.7 ?3?.0 171 .7 (30.S) (64.9) 11 .0 {IOC.3) 654.6 11.3 710.1 (117.5) 002.3 INVESTING ACTIVITIES C*>itl expeadituras......................................................................................................................................... businesses acquired in purchase transactions, net of cash acquired .................................... Increase in net inveataent in diacentinusd operations................................................................... Net proceeds froa divootnonte........................................................................................................................ Net proceeds froa sale/leaseback trasaaetaona.................................................................................... Other............................................................................................................................................................................. Nat cash used for investing activities ................................................................................................. (300.6) (306.6) (43.1) 454.6 27.2 15.4 (1M.8) (306.4) (61.3) [10l.6> 221 -7 2.2 (337 71 (447.0) (131.0) (55.0) 396.4 (00.1) (377.6) FINANCING ACTIVITIES <1 ) Dividends paid ....................................................................................................................................................... Rapeynents of borrowings havieg original neturitlei in ascess Of throe nooths. . . . Increase in borreutngs having original netunties in axcasi of three norths.................. Net increase/(repayment*) in borrowing) having origiMl aaturitlfs of lets than three norths ......................................................................................................................................... Sale of United partnership interest...................................................................................................... Other. . . ....................................................................................................................................................... (128.4) (512.6) 373.0 155.7 -- 6.4 Net cash used for financing activities ................................................................................................. (105.9) Effect nf exchange rate changes on cash and cath aquivalants ................................................. (O.S) (nocrease)/increaic in cash end cash equivalents ........................................................................... (15.2) Cash and cash equivalent), beginning of year ............................................................................... 62.0 Cash end cash agulvslcnts, end of year .................................................................................................. 4 47.4 (175.0) (274.0) 355 7 (500.0) 207.0 13.4 (241.4) <3.6| (144.3) 207.1 4 62.4 (122.5) (6*6.6) 310 7 271.3 45.7 (141 .4) (2.2; 01 vl 110.0 6 207.1 7)6 NOTES TO CONSOLIDATED FINANCIAL STATE*1178, PAGES F-8 TO F-24, ARE INTEGRAL PARTS OF THESE STATEVENTS. cFn> (I) SEE NOTE O TO T* CONSOLIDATED FINANCIAL SlAfEKNTS FOR SUPPLE X NTAL INFORMATION RELATING TO NONCASH f IHACKING ACTIVITIES. </Table f) -DOCtACNT 1 PAGE 35--"---------- -- (PD 28-MAR-1094 12:25:05,110 26-HA8-1094 04:50:13) |04KYC282)M10 K_4?*? C-.-----04OTSW -Prmary 04NYC4202a7rgril6: *.R, OKACl 'EDGAA COPY----* -'Client DiuMnt. DOCUMENT 1 CONSOLIDATED BALANCE JHFCT debit- cCapticn* OOlLAAS IN MILLION}, EXCEPT PAR VALUE HCMr $1, <> ASSETS CURRENT ASSETS Cnl and cash equivalents........................................................................... Netee and account* rtnjvaDlt, net (Not* 7).................................... Inventories (Meta 7).................................................................................... Net aaaete of ditcoutanued optrat tom, current (Mat* SI. . . Deferred ineont taiea (Not* 9)............................................................... Dther currant meats.................................................................................... TOTAL CURRENT ASSETS................................................................................ propart,a* and equipment, net (Not I) ............................................ Nat aisata of uiscentlnueo operation!, noncirraat...................... Goodwill, It** accuaulltec auortlist loo of 153.2(1092- -SSO.1) Asbesto*-related iasunnea racaivaOXt (Not* 2)........................... Other aiseti (Not* 7J............................................................................................. TOTAL ASSETS.................................................................................................. 1003 1M? <c> c> S <7 6 657.4 441 n 761 .3 31 .8 36.2 1.875.3 1,454.1 481 .6 862.3 1.236.3 t 6,104.6 S 42.8 690.4 502.0 606.3 06.8 42.2 2,001 .4 1 ,707.0 108.5 208. SSB.3 1,033.0 8 5,599.6 LIABILITIES AND SHAREHOLDERS EOUITY CURRENT LIABILITIES Shert-tara debt (Note )...................................................................................................... Account* payable ........................................................................................................................ IncoM tape* (Nota 5)............................................................................................................... Other currant liabilities...................................................................................................... Iftaorlty interests, currant (Mot* 12)............................................................................ TOTAL CURRERT LIABILITIES.................................................................................................. Lwng-ttra diet (Note 0).......................................................................................................... Other noncurrent Liebilitlss ............................................................................................. Deferred incona tana6 (Nota 5) ......................................................................................... Liability for esbestos-rtlatad lltisatton (Not* 2) ............................................ Nlnority interests, noncurrent (Not* 12) ................................................................... TOTAL LIABILITIES................................................................................................................... S 532.6 6 464.7 414.6 423.6 126.6 156.1 621.0 603.2 207.0 1,002.6 1,639.6 1,173.5 613.8 97.4 713.7 1,301.5 obo.1 86.4 207.0 4,591.0 4,033.0 COUUlTOfcNIS AMD CONTINGENCIES (NOTES 2, 0 AM 11) SHAREHOLOLKS' EOUITY (NOTE 13) Preferred ttochi, S100 par value ................................................................................................ 7.4 7.9 CMMn stock, SI.00 par valut; 300.000,000 shares authoriied; outstasding at DecenOer 31: 1993 83,465,000; 1902 - 89,(02,000 . . . 93.9 99.9 Paid in capital............................................................................................................................ 297.8 tsi.4 Retained earnings............................................. .......................................................................... i,ta0.2 1,298.6 Cumulative translation adjustaents ......................................................................................... (87.3) (2.4) TOIAL SHAREHOLDERS* EOUITY............................................................................................. 1,517.0 1,545.0 TOTAL LIABILITIES AMD SMAEHOLBERS* EOUITY.......................................................... 3 6,100.6 3 5,598.6 <(Table* THE NOTES TO CONSOLIDATED E1NANCIA1 STATEUERTS, PAGES F-S TO F-24, ARC IATEOAAL PARTS OF T1CSE STATEMENTS. F.6 *OOCUWT 1 PAOE 36-------------- (PO 2S-MA6 19&4 12:25:06,HO 26-IUR-1994 04:50:13| [94WYC4282]FCRN10-K_4282-C-------O40999- .prjKry 94NYC42B2--iProf Lie: M.R. GRACE "EDGAR COPY------Client Document: DOCUMENT 1 <Page> CONSOLIDATED STATEWNT Of SHAREHOLDERS' EQUITY <Tabla> <Captlon> DOLLARS IN BILLIONS S> PREFERRED STOCKS Balance, beginning of year ........................... other........................................................................... BALANCE, em> of year........................................ Cmmoii Stock Balance, beginning of year ........................... . . Conversion of notes aad debentures . . . . . Stock option and owsrds............................... Acquisition.................. ............................................ BALANCE. END OF YEAR........................................ . . 1993 <> S 7.5 m) 1992 <o S 7.5 *' 7.5 1991 <C $ 7.5 " 7.5 $9.9 2.8 99.S *$.6 1.3 B9.9 86.1 2.5 -- 88.6 PAID IN CAPITAL Balance, beginning of year ........................... Conversion of notes aad debentures . . . . . Stock options and awards ................................ Acquisition.............................................................. Other............................................................................ BALANCE, END OF YEAR........................................ 108.7 120.1 -- 31.1 .. .2 1S1.4 61 .6 .. 58.4 .1 120.1 RETAILED EARNINOS Bolsnco. btDinning of y.r ........................... Met incase/(loss)................................................. Dividends paid . . . BALANCE. END OF YEAR <12*.4) 1.194.2 1,719.0 (204.5) (125.9) 1,298.6 1,822.0 218.6 (122.6) 1,719.0 CUMULATIVE TRANSLATION ADJUSTMENTS Balance, baginning of year .... Translation adjustment! ..... BALANCE. END OF YEAR . . . TOTAL SHAREHOLDERS * EQUITY <2.4) (4.9) (67.3) 90.0 (92.4) (2.4) 134.4 (44.4) $1fS17.S $1,545.0 $2,025.2 </Tabl*> THE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, PANES F-B TO F-24, ARE INTEGRAL PARTS OF THESE STATEMENTS. F*7 DOCUMENT* PAGf 37... -- .jpg gg.mar.1994 13:36:06.MD P* MA<1-ia64 04:60:13) (*4NYC428?|F0fiM10K 428?C-- 940999- Primary 04NYC4Z82--Profile: *-*. CRACF ------ EOGAR COPY-'---*---Cll*t Docmest: DOCUMENT 1 <F>age> 10115 TO CONSOLIDATED FINANCIAL STATEMENTS UOUJWS IN MILLIONS, EXCEPT PEN SHARE AKXMTS 1. SUMMARY OF SIQMIFICAMT ACCOUNT INQ AMO FINANCIAL REPORT INC POLICIES PRINCIPLES OF CONSOLIDATION TM consolidated financial statements include me accounts Of K. R. Grace A Co. and all aa)erity-eund companies (eallactiraly Grace). Intercompany transactions and balances ara aliainatad it consolidation. Iavtstndnts In affiliated coapanias (30A - SM oamad) ara aceauatad -for unoar taa equity aatnod. RtCLASSIFICATIONS Certain aaounts In the prior years' conaalidatcd financial s(attaints hast bear raclssslf ted to coirfom to tna currant yaar's presentation and at raquxraO with respect to discontinued oparatiens. cash EQUIVALENTS Cash aqaivalants consist of highly liquid lnstrunents nitn natuntias of thras nonfhs or lass whan purchased. The rtcerded anount approximates fair value bacauaa of tke short aaturitias of these iHTastaants. INVENTORIES Inventories art stated at the Tovar of cost or am-k*i. Due to ttia diversified nature of Grace's operations, savernl nathods of ditormining cost re used, Including first-it/first -out. everso# and, for substantially #11 U.S. chemical inventories, Jast-ln/first-nut. liarkat value for raa and packaging aatanals is based on current Cost and, for other Inventory sis seiflest loom, on net realizable value. PNDPENlltS AM) EOUIPHENT Preparties aid equipment art stated at the lever of cost or net realizable value. Depreciation of properties and aqulpemnt is generally computed using the straight-lisa aatnod over the estimated uasful lives of the assets. Interest is capitalized in cantaction aitk ><jor project expenditures and amortized, oenerally on a straight-lins basis, over ths estisated useful Uvea of tha assets. fully depreciated asaits are retained la properties and equipment and minted accuaulatM ddpraclatlon accounts until titty ara ranovad fron service. In the case of disposals, assets and related depraclatinn are raaovsd fren tha accounts and tne net mount, lass any preceels froa dtspnsal, is charged er credited to incone. COOOWIU AMI OTHER AMORTIZATION Ododaill ansae frem certain purchase transactions and is amrtized usisg the straight-line method over appropriate periods not exceeding 40 years. Patient relationships (see Meta 7) am snortized using the straight-line nathod ever t7 years. iNCONfc 1AXES Effective January 1, 1092, Orate adopted St staticnt of Financial accounting Standards (SFASl No. 109, 'Accounting for Intone Tams.' Tha Statement requires the use of an asset and liability approach for the accounting and financial reporting of income taxes. FDHEIGN CURRENCY TRANSLATION Foreign currency transeetioas and financial statements (except for those relating to countries arith highly inflationary economies) ere translated into U.S. dollars at current exchange rate*, except that revenues, costs and expenses are translated at average exchange rales during each reporting period. The financial mtateaMote of eebsidiaries located in countries with highly inflationary oeonanles oust be remeasured as if the functional currency were tha U.S. dollar. The remeaeurment creates translation ad)ustmoots that are reflected in net tecone. The elleootion for Income taees included in the translation adjustments account in shareholders' equity was not significant. FARMIMGS PER SHARE Prinary earnings per there are computed oa the basis of the oughtod overage lumber of ccmaon shores outstanding. Fully dilated earnings par share assuee the convtrsion of convertible debentures (with an increase in net lacome for the after-tax interest savings) and the issuance or coanon steci equivalents ralated to stock options. FINANCIAL INSTRUMENTS 6rare enters into interest rate seeps, options one caps, and foreign currency contracts te nanage exposure to fluctuations in interest and foreign currency exchange rates. The differeetlaJt paid or received an interest rate agreements are accrued and recognized as ediustmente to interest expense; geies and losses mailztd upot settlement of those agreementc ere deferred end mortized to ieterott expense over a period relevant te the agreement it the uederlying hedged instrument remains outstanding, or lanadiatsly if the underlying hedged instrment is settled. Pragmas paid on caps are amortized te interest expanse over the tern of the cap. Cains and lossas on foreign currency contracts offset gain# end iossae reselling from the undarlyieg transactions. Oaias and losses on contracts that badge specific foreign currency conmitaente are deferred mad recognized in net income in tha period in which tho transaction it consummated, gains and lussas an contract! that lade* not investments in foreign subsidiaries arc recognized in ths simulative translation adjustments nocoust sn shareholders' equity. F-9 DOCUWEIO 1 PAGf 3--(PD 2t-OAR-1994 1?;2S:05,D 26-MAR-1*9* 04:50:11) |B4WVC42?]FOfllltO K_?*2-C-.~-~*40HW Priory 9*HTC42K*-ProfUt: W-R- (WAGE -*--DGAR C0PV---*----**----Cliwnl Oocuwnt: DOCUNtMl 1 <Plfll> 2. ASBESTOS AND RELAlfcU INSURANCE LITIGATION Grace It a defendant la lawsuits relating to previously (old atbtstos containing product* and anticipates tut it *111 b* ium as a dararlant in additional asbestos- ralatad lawsuits in til* fwtur*. At Otcartttr 31, 1993. Grac* *at a cvlvadint in approxlaattly 39,100 atbaatoi- ralatad laasuitt rapraaantine approximately M,roo elalat (varsoa approximately 30,900 lanulti and 53,000 claim at Oaeaabar 31, 1(92). Of the lawsuits ponding at Dacaabar 31. 1993, 9? t103 at Decanter 31, 1992) lnvolvad claims for preparty daaaga dliogadly caused try to* ut* of asoestos-containing materials In tM construction of buildings. Tn< plaintiffs in tnaaa lavtuitt goaarally saah, aaong ether things, to Uv* th* u*rndant( aosoro tM cost or moving, contailing or rapairlne th* asbastoscontaining materials in tht affactad buildings. Th remaiaino aabtstes-related 1ansuits lnvolvad claias for parsons 1 injury. In ant of than lawsuits, Draco is on* or many oaranoants. propeutt damage litigation Through bacanoar 31, 1993, 120 ASbaitos proparty danago casts had bean dliaitui with raspact to oraca without paynant of any danagas or ssttlenent anounts; judgncnts ware entered in favor or Grace in twslva cases; in tin cases (four of wmch are on appeal), Grace was held liable for a total of (68.3; and 131 property daaaga suits and claims had baan settled by Grace for a total of 3300.0. Grace ms recorded a receivable for the insurance proceeds It expects to rtctiva in connection with these adverse verdicts end sattlsaents, as well as far derente costs isltlally paid by Grace. (See 'Insurance Litigation' below.) On Septanber i, 1993, the tl.s. Court of Appeals for the Second Circuit issued a decision regarding tne availability of insurance coverage with raspact to oraca's asbeslos property Canape litigation and claias. In January 1994, the court granted Grace's petition ter a re- hearing concerning such decision. included in the asbestos property daaape lawsuits pending against Grace and others at year-and 1993 era the following purported class actleas: (1) a Pennsylvania state coon action, certified in 1992, covering ell connercia] bandings in tM U.S. leased in whole or in part to the U. S. govarnaant on er after May 30, I99G; (2) an actios, cirtlflad by the U.S. Court of Appeals for tea Fourth Circuit in septeeber 19*3 and pending in e u.S. district Court in south Carolina, covering ail public and private collegas and universities in the U. 3. whose buildings contain asbestos aalerisls; (3) an action, brought in eg] in a u.S. District Court in Pennsylvania, on behalf of all bubllc and private alimentary and saconoary schools in the U.S. that contain asbestos Materials, which nas been scheduled for trial in late 1994 on a limited nuaher of issues; ano () an action filed in a South Carolina state court in 199? an txtialr of all entitias that own, ia whale or in part, any building containing sabsstos Materials marxjfactured by Grace er oee of the other naaed defendant!, other than buildings sub)act to th* class action lawsuits described above, as well as any building owned by the federal or any state govarnaant. personal iMims litigation through Decawer 31, 1993, approulaataly 7,000 asbestos perioral injury lansulta invcitiag 17,900 claias had bean dlenissed wish respect to Grace withaut paynest of any daaages or sattlaatnt anounts (prtsaari)y on th* basis that Grac* products ware not invulvad), and approximately 11,300 Such suits involving 13.400 claias had baea sattlad far a total at (62.2. In January 1993, tn* u.S. District Court for tba Easters District ef Pennsylvania conditionally certified a class ef all future asbestos personal injury elements, including iediviihiels who have been occupationally exposed to asbestos-containing aatariais but who do not presently allege asbaslos-ralatad injury* Although Grace is not aaong th* defendants nanad in th* class action cooplaint, Oissaajaation of the required class notica aay general* additional litigation against Grac*. hANGE OF POUNIIAL EZPOSURT Although personal injury cams are gtnerally slallar to tacit other (differing only in th* type of asbostos-ralatod Illness allegedly suffered by the plaintiff), each property daiaag* cat* is unique sn that building typw, six* and utilization and difficulty of abatoaont. if necessary, vary Iran structure to structure; thus, th* anounts involved in prior dispositions of property damage cases are not necessarily iodieatlwa of in* anounts that aay h* required to cispote of such cases ia the future. In addition, la property eanage cases, inforMtlen regarding product ideatiflcatian on a building.by.building basis 1 i.I., ediether er not Grace products ware actually used in tha construction of in* building), the age, typa, size and us* of th* building, th* juriidletioaal mstary of prior east* and the coart in which the cast is pending provide thw only neaningful guidance as to potential future costs. However, wuch of this intoraation is not yot available in a anjerity of the property daaaga cases currently pending against Grace. Accordingly, astiaatas of future costs.te dispose of thaas Casas are, In post instances. based an lncnaplut* information, as well as assistptions that aay net be accurate. Further, th* filiag of the cuss setions aid uncertainty with raspact t* the class cartlfiestien in th* national alaaantary and secondary schools class action (sa* 'Proparty Daaagt Litigation* above) aaka it oor* difficult to reliably predict th* costs Grac* will lacur in disposing of asbestos-related litigation. -oocuwm I MCT 39-------- -------------------- - iro ZS-atw.iggc 12:25:05.80 76-HAR-I994 04:50:13) [64NVCd?B2)F(Blo.K C2S7 c----------9<ow. 'Primary 94NYC4262--Proflle. e.R. GBAC **"*HXiAR COPY"----**--"--Client Document: DOCIMCN1 1 -Pag tubtact to tbe procoding qualifications (STUCK Bract bdlievss to 0* significant), Oraca has attempted to oataniina Its Tutor# cotta to dispose of this litigation and hat concluded that it Is prooaMt that thi parSoria] injury aad proparty daaaga casts ponding at December 31, ign can too disposed of for a total moult astiaatad at SB13.7 (inclustra or lsoal fast and expenses), of alt eh Oraca has racordad *713.7 as a nonearrant liability and $100.0 as a currant liability, that coaparas to tha estimated liability (currant and nancurrtnt) af sadb.O at saptcabar 30, 19*3, raflacting payaants aadc in tte faurtn quartar of 19*3. In addiiion, Oraca ias racordad a receivable of $8*2.3 far tha insurance procaadt it aspactl to racaivt In reimburieaeet for prior psynont* and astlmtad fuiura payments to disposa at asbastoa- ratatad litigation. Thia conparts tu tha racalvabla Of $044.0 at September SO, 1093. which raflactad a $300.0 tfterlaa provision racordad in tha third quartar of 1003 ralatad to tha Sacand Circuit Cosrt ct appeals decision, while tha fourth quartar 1893 activity included the partial rasarsal of swell provision, as well as insurance procards received during tha quarter. (Sas `Insurenet Litigation' balow.) Oraca has also settled coverage disputes with certain insurance carriers. These ssttlaaeats provide fur future payments of $114.0 and havd been recorded at notes receivable, further, O'ace continues te seek to recover the balance of tha peyaante it eat Bade eilh respect to asbestos-related litigation Iron its anests insurers and free insurance ceapanies that sold insurance policies to pradecatser eenpanies of Oraca, as discussed Peloe. IMMAAMCC LITIGATION Grace'* ultiaita asposure ia respect of Its asbestos- related lawsuits and claves will depend on tha extant tu whicn its insurance will cover Omegas for which it nay be held liable, swuunts paid in sattlesent end litigation costs. In Uarch lepi, tho v. S. District Court for tna Southern District of Maw York held that Orsce's prinary insurance carriers are Obligated to defend and indanaify Grace with respect to dmagea (other thaa certain penitlve daaagee), settleaant aasiatt* aad litigation coats in cannectien With both personal injury and property Senega asbestos deias. Tna court ns id that covsrsgs for ssbsstos property dnmogs ia triggered by the 'discovery of dafaap*' durlag the policy period. On Sapianbar i, 1093, the u.S. Court of Appeals lor the Second Circuit issued a daemon regarding tha availability of lasurance coverage with respect to Croce's asbestos litigation and claims, lhe Court of Appalls revtrtsd the District Court's ruling as to a 'discovery of damage* trigger for asbestos preperty Sanage claves and instead adopted a trigger based on the date of installation nf asbestos-containing materials. As a rasalt of this decision, Cracc recorded an aftar-tax provision of $300.0 during the third qgarter of 1*93 to reflect tha reductien in Insurance coverage for its asbestos preperty Cases* lawsuits end da ins. In January 1994, the U.S. Court of Appeals lor tha Second Circuit granted Grace s petition lor a re-hearing concerning tha Septewber i. 1903 dacsaian. In view of the Courts action, during the fourth quarter of 1993. Grace reversal) S200.0 of the after-tax provision recorded in the third quarter. la Oeseaber 1991, the Circuit Coart for Jackson County, ississlppl held that Grace's priwiry and excess insurance carriers are obligated to dafend and indemnify grace, holding that for the purposes of insurance coveraee, daaaqe to buildings free asbestos-containing product* occurs at the tine such arodJCts ar* put in place and that ths daaagt continues as long as the building contains the products (s 'continuous trigger*). A Sinner decision wss rendered by Uiimesete stote court in November 1092. In 1993, Oraca received S74.6 unoer settlements with insurance carriers, in reimbursement for monies previously oxpondsd by Dries In connection with atnastas-related litigation ; as Motioned above, these settlements also provide for future reiaburlaments of $114.0. In early 1994, Grace settled ajtb ten additional inauraocs earners and received approximately $84.a under such settieoents. Prior to i*93, Grace received paynents totalling $97.7 tram insurance carriers, the majority of which represented the aggregate remaining obligation owed to Oraci by those carriers for primary level insurance coverage written by thaw for the period Juno 30, 196? through Juno 30, 1967. Grace continues to be involved in litiqatien with certain ef its insurance carriers, including as affiliated group of carriers that had sgreod tn e Stttlmeni and had Bade a sarins of payMnti under test sgrosaest in 1993. Tho group of carriers subsequently notified Grace that it would no longer honor the agreement |which had not been executed) due to the Septoabor 1, 1993 U.S. Court of nppoeli utemon discussed above. Grace believes that the settlaamt agrawwent (which involves approxiMtely $200.0 of the asbostos-relatsd receivable of 4952.3 at December 3|, 1993) is binding end initiated action to enforce the eottlmsnt agrwtMnt. m January 1994, the U.S. District Court for the Cistern district or Texes held tha egrwsaent to be enforceable. The affiliated group of carriers is expected to appeal this ruling to the U.S. Court of Appeals for the fifth Circuit. for the period October 20, 1M2 through Juan 30, 1945- - the most relevant period for asbestos-related litigation--Grace purchased, on in enaual basis, at much a* eight levels of axcess insurance coverage. In gaaeral, excess policies provide that whee clsins paid axhaust eovarigi at one leva), the Insured asy seek payment from tha carriers at the next higher level. Far that 23-year period, tn# first eix levels of excess lnturasce svtilible froa insurance computes that Oraca believes, to be solvent (based priaarily upon reports from a leading independent insurance rating service) provide coverage in excess of lie billion. If, however, the mount available in the first six levels should prove to bs iasofficiwat, Grace has substaetial additional coverage amildble in it* two remaining levels of excel* coverage. In Grace's opinion, it is probable that recoveries from its excess insurance coverage Bill be available to satisfy Grace'e asbestos- related exposure after giving effect to the prevision racordad in 1993. Consequently, Grace believes that ths resolution of its asbestos-related litigation Bill not hsvs a aatsrial sffset on its copsolidsted financial position or results of opsratleas. I.A -DOCUREWT 1 PAOC *0------------------ ----------- (ft) 2S-HMI-18M 17;25:05,1(0 26.|MfM9*4 04:50:13) [*Nve42*21F0RB10 IE 4282-C--------- -- 940799- .PriMiry paNYC42*7-----Profile: p.p. ORACE --EOOW COFV------*Cl int Document: OOCIMEOT 1 3. acOUItITMNS, DIVESTMENTS MD STRATEGIC RESTWCTUdlK ACQUISITIONS hHlMtui acquire* in 1893 coniiated primarily of health car* altar traatnaat bniMuti. Oraca acquired Hoar Intensive Ur*. Inc. in the second quarter of 1883 for approximately $128.0 in cash (inclusive of ralatod cotta) and acquired other health care businesses during 1883 for an aggregate of jymnoiinatoiy 811B.0 in oaoh and <3.8 in comm atock. Oraca alio acquired Latin America's Xargaat water traataant business in the Tint quarter of 1883 for approniaataly *67.* in caah. In July 1883, Orate collated the purcitaar of the eoaooa atock of Grace Fnergy Corporation (Oraca energy) not ooaaa By Grace for <77.3 in caah. Sea Note a for a discussion of 1883 diraatoant activity with reapect to Oraca Energy'* hutinaaeae. (hiring 1*82, Eh-act continued to expand its health care operation* through the acquiaition of aaveral MJ*in*it*t and facilitiea for consideration totalling 844.2 in cash. In (801, Oraca purchased the 2s% Minority interest in Grace Cocoa for <74.R in cash end purchased an initial 47% caerson equity intarast in a health care service eonpeey. tn addition, Grace fcntrgy purchased its foraer partner's 50% interest in Colmvyo Coal Caapany (Celauyo) for <34.S In cash plus related debt repaymenta. All of the ahore transactions ware accounted for as purchasas. and the result* of aparailona of the acquired businesses are included In the consolidated fineecial steteaant* froa the raspectiu* dates of aeqeisition. DIVKTWNTS In 1883, Qrec* completed the sale of substantially all of the oil and gas oparatlaa* of Oraca Energy, along Pith certain carporatt lnvastaatita; see Note a far further information. Otner non-core business** diuaatad during 1*83 included a 60% intarast in a Japanese Chemical basinets aad a food industry hygiene services business far approximately <31.4 and <11.7, respectively. In Oacsebar 1882, Sraca said its organic chemicals business and related net aassts for appi-uximstsly 8100.0 in cash plus non-voting preferred stock of the buyer. In Bereh 1882, Oraca sold its bosk, video aad software distribution business (Oract Distribution), ehicfl nt cliaaifled as 8 dlseantinusd operation 1 the fourth quarter or 1881; seo Not# 8 for further lnforaatlnn. STRATEOIC RfSTROCluriBO The 1891 net gain on strategic restructurin* af <6.1 (sac Not* 4) includes gains or aioe.e, inclusive of cumulative translation gains of <37.0, an th* disposition or certain aon-eori businesses and invasfmsnt*. Offsetting thee* gems ears expenses related to the relocation of Draco's corporate headquarters iron Nta York to Florida, provisions for litigation and certain osviromanto) and plant Closure expenses and * rasarvo for th* costs of restructuring activities. 4. OTHER INCOME cTaBls* <captioe <s Intarast ............................................................................ Mat gain on strategic restructuring................... Equity in earnings of affiliated conpanltt . Other, nat ........................................................................ 1883 o <30.4 -- 1.0 11.1 *42.3 1192 +c* *12.3 3.4 54.0 S69.V 1991 <C> <12.t 6.1 2.2 34.6 655.7 </7ablo> Other, nat in 1883 represents principally th* gain on the (ala of a 5C% intarast in a Japanese r.banlcel businee* (sac Note 3), offaet by provieloas for environmental aad plant closure esponse*. lateraet lacamt in 1883 includes <21.9 relating tn the aattlameat of prior yaara' Fadaral income tax returns. r-it i * "p 'vy aocucir i 41------ird20*M*i M:zyM,m h-mmom cm:D) [NmeottirawiA Ma? :i ' ^Ariury 0ftt4tt2--Q`afil: *.#. &UCZ '<*040* --"tOOM OOff........ '' -- '' Client CMcuuM: : 5tr *. IHOOW TAKES (ffietivi Jvwary 1, 1M. One* euotKJ MAS * 10*. '*nwMiti>| Mr Imm Taui.' nick appUaa an a*t i UaOllStr WOTMOO rcouiria# tw rare*"*'**' of d*frr*d Ui itMti Md lLahiUtiaa with raapo<t to tiio oxotatad future tf Koinwiicw of mini (U! M*a Oni racw*M0 in tM NmaUiiM flMflcUl Ititimiti a*4 for rttsrn*. If It it mm UMly tMfl Mt tut liiori portlet of 9 diftrnd tax ui*t till tot u niIIim, a voluotlet <Umwn ut N recojftllM. At perblttart V*tr SFAf Mi 100. foot alamort Mt to raatate prior pari4 ` cMMlidattd flBBrtCiat *tatmam to #ln offtOt to tFtS at. `00. tasiodin# too ottorrort too outfit rtnapoiTort wp9 tfea MoptlOA of A No. 106. *CN^yr<' AtMttft for r*ireuraunt Uaiflti otaar liu Paaaiem, ' tM affect of ry motia* ef <rAS la. iOO *a Oran1* HM fiaayuJ uiLutti * aM utariai. It tea tkirrt juortar af 1103, oroea rocarrtm t*e affect* of tba QMUbuo Upt Mraeriimioo Mt of IMS |0IM}, eoico Ni aaioctM lit tugutt IMS. Mont attar fUita. Mm aurauort tnt iMt u.t. Mooral carporata tax rolo to , affaatlva Jowutry i, 1003. Mmu*, ultur Iki* l*areoM la tM J.l. fuarai aorparote tax rota ffraa 3a%>, oor im oaoar prutalau of MU, wa a rffact Orau i reiwlla of aparottoea. Tai caeamms ot iacaaa/(loi*| frai ceetiauia# oseraiiaa* bafero iaecm tun art fellava; Tab]e . Capiim s> MUT1C........................................................ tereipn................................................................... tooa <c SS.O taat.a im <c> SM.4 <13.0J ia loot c 01*4.2 2*0.0 ooa.* '/Table* TM pru;ilen/ (Miafitl for ineaaa tarn iUkiim to a*atl*ii*f pantiM* coaalatart of 'Table* <J|Ua 1003 i Too? 1001 S facoral lMaoa taaaa: CerreM. ........................................................... > Ovferrea . ........................................................... Stlto CM locol HIM* tmi . aureut. foriipn iicm taxaa: Ourrwl............................................................... Orfarrart ............................................................... *> S O.l 1J0.fl ft.l 40.4 it.*> o % 74 0 (10.1) If.S 07.1 6.3 1 41.3 (*.0) IS. i tM 4 12.6 a oo.o P34.0 0132.6 </TMU At OortHor 11, IMS oort IMS, ike rttfarrert tu aaoeta and liabilities (OotlitM of tie foilooino Item: <1a0la *6cptien ion Muarei im rtrroiWkent eftpMties............................................... wIun raiaUi# ta aOaatw ralatai aeptuca........................ Mirratinaaat kanaflti atkar mm mmiom................................ Mt coorotlM lou otrryforyaraa....................................... .... Maafvoo Mt jftt Sortuctlble for tas perpeaaa.................... fa* ereoit cyryforiwos................................................................... Milaa aai umraaiia rnanrai....................................... ... rjpitaUiaf wwMvi aaaia eert UNttyji rararta. . . . . State rtafarraal uiai.......................................................................... OtOar.................................................................................................. . . II 12.2 n.i aa.o iii.i 64.0 2C.2 10.4 *.* 40.4 i mi < #100.7 m. i ot.f im Oil 23.4 IT. 7 II.4 rtt n ratal Mfarraf Ui eaaata......................................................... #20.0 SOO.O Mprocioitoo #n# Mortiutioo.................... rr0MM pomuai coat.................................................................... Oakar......................................................................................................... roto] Mftrrad Ui UeMliti*i.................................................. iai.i #7. 4.0 ns.l iai. n.a 4.4 tic.a Oafarrco tw caaotft vaimtioo tilOMoco.................................... 125.7 Mt oaforrert tea aaaata............................................. tlii.r 143. i 0137.4 */TNa* M2 1 rmt a*-- lift ?MIAb*i Pruaary uirtusn--Profil*: ** 0040? 3:3S;OS,HD 3a.bU.ftP* 1*rrc*3ia)F<no-K_4WS c---- KOMI CB^-- >--> Cltint tanM: 00CJOC1 la MMMtlKi itl Ik* aM^M * tfm >. 10* uonwarr 1, brace recoaauod veluatioa lUanau of SM i, *ia t adjuatad v> mi m if*3. TM flUiftion illooonca rCJUl to tba oooartbloty n t toa raAlUotioa of cortoln dafarrad tan aaatti, inclodiot US. tax cradlt carryforward*. tat# wmi xucoJ Mt eoarating lea* tmryfrm*rm ana ort --ftrrtd to ttiati, ood al paroting Iim in aortal* frtifk |riMietUtt. Ooaed upon utlciptnd fvhri ratiiiu. * M< cewiaM, attar ooonifoiiw of ** valuation olloorc*. that It it boro Ubely thOA Mt ttat tk eot doiorrad tv ml baliM* *U1 by rwliiN. too ittbt giving rtM to dafarrad to uuli iM UAilitki at Oacaabtr 3*, 1901 UKlaM roaooroh ad MfOlopotft Mtl CMC Hilt Bata tic tax fwowtt aN Mir itaaa tk tea Itmimm t mm Mt Mt conform t thaif crootMfit tar financial Hawrt purpma*. At Dkmmc 31, 1009, tMra gro 090.0 of tax credit carrrfervnrd* atm Muitioi periods through 1990 and S2S.0 of tar crocit carryforward* tttt m eepiratie* partoo Acditionllyr than ara itata aag local 4M fartiyn not P****ti9 Ut* Mprytmwai oath tn iffnl # Ml.i *M vm-tou* nplrti*i MflOI. TM u.t Fodtral corporata tii rota rocoacilat to ta* iffoctlvo ux rata for CMtiiwut eporat im u 'ollara: <Tthk* (CUM> too i mi 1991 x> 1.9. FeOarol urfwak ms rota....................................... ; nerooaa; i Mniw | in t*a rote rawltlag fra* U.t. <N frNi inaaa oa foreign g*ratioo. . . . litill!atloo of fororal boaaooaa croditi . ... Stata aod local ireoba t, aat of Fodonl locabi tax oaiiarit........................................... Vihatin alienante for Oaforre* toa mmII . . . . lopaef of U. A im fsroipn toe roio eMOa on dafarrad tint . . ............................................... Otbar, nat.............................................................................. (ffootlve toa rate.............................................................. <* -ai o 34. Dt id.a 1.0 70.3 <C> 34.0b . .r# 3.0 <9.3) (3.0 <.*> 70.04 -- MSI 30. U.t. w4 foreign toaea kH oei Man proneod 00 appPtibtttly *444 A of ndiatrtbufaN earnloga at eortaia faro*#* a#oldiarloat o* anab laroingi ara balAS riUMf ladrflnitoly bp aach auneidiariee far roin--atnaat. iHo OitribrtJM of thaao oarninga would riwti in additional farolgo rltbboldlnp tons of apgroxiaottly fft.3 no additional U.S. fabarti incona toxoi to tn xtoM tnay ara aor ornoi by roraign tu eratfita, Mt It it tot pnctieaftla to atioot* IN total taa Liability liat oomJJ be iaarrod ago*1 <utl a tlatribat in a. oiccobriMCO flPCMndlft COCOA, OATTMV RPIMrOM AM MJlfflO WOUAU MO tYTTM la ON aacond auartar of IM, Prana eieatlflod at otocootaauao gtntun it> cocao end battary aaporatara ouaioaiua: eortaia OMiaoered aaiarialt Maintain*, principally lit pruning product*, olactrabagottic rNbUM control aoo ootariol toctnoioir mdmimi (coiiamvoiy flB); and cUnt Mn>wrt aoaioaaaoa paooiag ttiu aivoatneat. A previiian of #100.0 fMt or M Meltable tax oontflt of 099..1) net reeoroefl m too aaeo juortor f 1009, nun ikIimii 1M loti oxpoctor on IN diva*went of tbeao Nnioeaaea, tboir articuotoo not oporotiog rtMJtt and 41S.7 provision fcr latoroat expome oUacstol to too C1KOOTIRUO0 oporstiOA* tnrouga thoir aspectad data af dioataaat. OurlfN IN firat aw mmn uarkk of 1003, Oraoo Mid aubaMMioUr all tk oil ood ga optrituat af Qraco Inarg^f, obicb *n claaaiflod oa a otaeoatinuad aparotiM in 1003, for aat caao proooada of 9M,0. obitb ooa aaoiatMt Mto irr oatiaetoa. Too iota fra diaantiauod aparatiana in 1002 ifclvdod a proviaiao of #199.0 (am or an oppli<aola taa Ptooflt Of I01.0] roiflting t# tlw looaoa npMtN an tbo efvoetbaot of Oraoa laorgy*o eporotiono. # i PUTMUN tba 0ioataot of CoIaovP. oartboraAip Mlly m by o>k tnaryv. nd oipoeia to coocltodo nan a troaooetioo la 10M. Proca la la too procoaa of ilOiuaiug tba raboiairg ogioolliMooi oooou aid Uabllitiaa of #ato Energy a oil oad fM optraiiwik. 0MCt DinilUTlOb AMI CTP Aa otatioMd obvo, u too aaoand biortor of 10M. aroea dnaoiflod oa aneoitiwM oporotlaai cartuo aeo-cara hiUMiiao, onion laeluoo tta aniMi ponoiua ond CvbNM fortiuior apOMUMO, tM opOTOtlng rpaultf Mf floe otaott ef NUI ore mb*4 onoar oonr' in tba faUodig lOUaa. to 1000, Qroeo elOMlfiad no Olacont Ivna oporatiooa oorto&o earparot* maoatMota, includiog Intt'l bUarity latiNott in Canoala lovlro--antai lomiaoa tarp. ma o-Mlkfra Hamcultural Product a Coopany, la BocaMar t0tS( rac* coaplataa mo aaia of tnaao buarny miraiti for total proeaada of Ml .3, 0t la Mruiang 0o Ml* Of <* roMiaing noor* ouaiooaaoa aod corporate lavoattantt ano ocpaeta to conaluAo Mb iwumim* in l#a. Tba loan frm diacaoilnjae wwatliM in I009 loeladed on rno- tu prwutM or tif.i raUtiog to tba loot aaaodotod Ntn tba ukt ar Ortu'i raoouino nnican- atylo roataurort oparotion. In Harco 1K2, proce cooplttad tba aala of (Noaa Oiatriawuon for 107. a la csan and notao. . M3 "00CU9EKT 1 PAGE <FO 28NAR.*904 1?:?5:05,UD 26.tfAfl'1094 04:50:13) f d4MVC4?C21 FOflWI 0 K_4797 C - - * - * . -40999 - Pruury 94HVC4282-*-Profilt: w.R. GRACE EEKMfl COPY---*------------*-Cllent Oocuiem: DOCUNVNT 1 Operating result* of Oraee's discontinued operations sutoeepuent to their classifscation as such Hava boon consistent with Mounts originally Mtiiutfd end mrt recorded against established reserves. Operating results prior to classification as discontinued operations sad sales and revenues for the three ors ended Oocenbor 31, 1093, 1992 and 1991 were os follows: <Tble> Caption> <s* COCOA Sales and revenues ....................................................................................... (lots>/incone froa operations before tans (i).................. 1 aeons tax benefit/(provision) ..................................................... Hoss)/incone fron discontinued operations ........................... 1993 <C> 1992 <C> 1991 <> 8 935.9 9 993.5 9 705.0 $ (5.6)9 1.0 S (4.6) 9 1.8 9 29.9 .4 (11.8) 7.7 % IS.8 BATTERY SEPARATORS AND ENS Sale* end revenues ................................................................................ lnem* fron aperatioas before tarns (1)................................... Incan* tax (provision) ....................................................................... I eveone fron discontinued operations........................................ ... 9 397.9 S 413.6 s 401.7 9 4.7 9 29.1 3 23.7 (2.M (10.1) (8.0) 9 2-9 $ 19.0 3 15.7 GRACE ENERGY Seles end revenues ........................................................................... (loss) fran aperatioas before taxst (I)................................... Incoae tax benefit ........................................................................... . (Lots) fron discontinued operations........................................ ... 9 234.9 3 615.0 3 479.2 3 (11.1) 3 (26.9) .. 9*9 8.7 * <.*> s (15-9) GRACE DISTRIBUTION Sale* and revenue* ........................................................................... (less) from operations before taxo* (1)............................... Incone tlx benefit ............................................................................ (Lo**) fron discontinued operation*........................................ OTHER Sales and revenues ........................................................................... (Loss) fron operations before taxes (i)............................... Incoae tax benefit ............................................................................ (Lost)/inc<me fron discontinued operations . .................. Total operating result* of discontimiod operations . . Net pretax (Joss) on disposals of operations .................. . Intone tax benefit on disposals of operations.................. Tot*1 |loss)/incen* Iris discontlnutd operations .... .* 3 178.0 9 790.4 S (2.9) .9 (.1) .1 * (i.*i 8 -- S 99.7 9 99.6 S 102.4 S (1 F| 3 (13.4) 9 (2.7) .3 3.5 3.0 S (1.4) * (> $ .3 * (34) 3 4.9 9 18.0 (121.3) (295.1) 22.3 88.0 3(198.4) 8(192.2) 9 19.0 M <Fn (1) REFLECTS AN ALLOCATION OF INTEREST EXPENSE RASEO ON (A) A RATIO OF THE NET ASSETS OF THE BUSINESSES CLASSIFIED AS DISCONTINUED OPERATIONS IN THE SECOND QUARTER OF IMS AS COMPARED TO ORACE'S TOTAL CAPITAL AM) (0) GRACE'S INCREMENTAL BORROWING RATE APPLIED TO BOTH THE EXPECTED PROCEEDS FROM TIC DIVESTMENT OF OAACE ENERGY AM) TO THE NET ASSETS OF OSACC DISTRIBUTION TMSOUOH THE OATES OF THEIR RESPECTIVE SALES. ASSURING THAT AMOUNTS RECEIVES FROM TlC DIVESTMENT OF THESE BUSINESSES ARE USCO TO REDUCE DERT. TIC ABOVE OPERATING RESULTS FOR TIC PERIODS PRIOR TO CLASSIFICATION AS DISCONTINUED OPERATIONS INCLUDE INTEREST EXPENSE ALLOCATIONS OF S3.S, SM.S AND SS7.S FOR IMS, 1M2 AMD I SSI, RESPECTIVELY. <ITabl For financial reporting purposes. tin asMts, liaoilttl.s, r.iultt of operations and cash flam af Oraca Cocoa Assoctatai, L.P. (IP) ara included in Grace's coasolidatad financial stataaeats as a conponant ef discontinued operations, and tn* autsiM* investors- interest la LP Is reflected as a einority interest sa tea Consolidated Malanca aaaat. see Not* 12 far a further discussion of LP. F-14 -DOCUMENT l PAG1 -------------------------------------(PC 2a-MM).lM4 12 26:05,NO 2CM4A1M4 04:60:13) [ft4NYC42?|1Oll0>: 4282 C................... S40S89- -PriMf) #4HTC4*S2--ProfiU: *-* oft4C ....{OOAfl Copy-..................... ............ --Clitnt DoctMMnt: OOCUMtHT 1 <P9> Mat iin of Qraci'i ditMfltlMMd operations (iveludiafl intercompany aseets) at December 31, 1093 were at ftilovt; <Tsbl*> <Captlon Cocoa tottery Separators Grace and EOS Energy Other lotal S> Current asset*........................................ Properties and equipment, aet. . . Investments m and advances to affiliated companies ...................... Other noncurrent assets...................... Total assets............................................ S 210.6 170.3 41.0 $ 430.7 6 114.3 187.7 4.8 25.4 3 301.7 <c <> <c* 6 14.6 6 54.4 6 402.1 134.0 36.8 500.3 4.1 11.4 40.2 47.0 49.1 125.6 164.3 6 180.4 61 ,077.1 Current liabilities............................... Other noncurrent liabilities . . - Total liabilities............................... Net assets................................................. 6 127.4 03.7 0 191.1 8 239.6 6 36.9 26.7 6 67.6 S 234.1 6 14.9 * 23.1 19.7 () 204.3 111.6 6 34.6 3 22-5 6 315.8 6 129.7 S 157.9 3 761.3 </Table> 7. OTHER RALANCE SHEET ITEMS <Tible> <Caption> 1993 1992 NOTES AND ACCOUNTS RECEIVABLE Trad* r<ivatlti, )i silo.,RC4ft of 341.7 (1112 - 01.3) . Other receivables, liu illmacfi of 6.6 (1992 - 61.0) . . <C> <C* 3 345.7 3 598.3 111.7 92.1 6 657.4 6 690.4 .............. .............. INVENTORIES Ran and packaging materials....................................................................... % 111.4 0 179.3 In process........................................................................................................... SO.9 76.2 Finished products............................................................................................. 243.3 324.7 General merchandise.................................................... 67.0 69.6 Less; Adjustment of certain inventories to a lost-m/fIret out (lIFO) basis............................................................................................. (40.6) (47.1) 5 441 0 3 592.0 OTHER ASSETS Deferred income taxes.................................................................................... Prepaid pension costs..................................................................................... Patient relationships, less accumulated snortnation of 696.5 (1992 .. $70.5)................................................................................ Long-tem receivables, less aUowancas of S13.4 11992 SB.4) .................................................................................................. Deferred charges ............................................................................................. Long-term investments..................................................................................... Investments in and advances to affiliated companies.................. Patents and licenses ................................................. ................................ Other........................................................................................................................ 8 277.3 S 137.1 224.2 229.2 196.4 164.6 177.0 110.4 104.4 51.4 33.D 60.3 103.6 108.1 68.2 116.8 25.7 61.5 81,235.3 61 ,033.9 /T*bie> During 1993 and 1992, Grace entered into agreements to sell up to S270.0 and 3345.0, respectively, of interests in designated pools of trade receivables. At December 91, 1993 and 1992, 6269. and 6307.9, respectively, hed been received pursuant to such sales, which amounts are reflected as reductions to trade accounts receivable. Included In the trade receivables sold at Oeceaber 31, 1992 are 650.0 of trade receivables the aale of which has been reflected as a reduction in net aaeets ef discontinued operations. Under the terms of these agreements, new interests in trade receivables are sold as collections reduce previously sold trade receivables. There is no recourse to Grace, nor is Grace required to rspurchase any of the trad# receivables ia the pools; if certain trod# receivables in the pools prove to be uncollectible, other trade receivables are substitutid (to the extent available). Costs related to these sales sro sxponsed as incurred. There were no tains or losses on these transactions. Inventories valued at LIFO coat comprised 29.0% and 22.9% of inventories at December 31, 1993 and 1992, respaetively. Liquidation of prior years1 LIFO inventory layers in 1993, 1992 and 1991 did not materially affect cost of goods sold in any of these years. OOOMLN1 1 P*AOF -------------------------------------- <H> 2 UAfl. 1 0* 12:26:06,NO M-HAfl-ISM 04:60-13) |O4NYC4J2|,Om0K t?t? C---------------- 940*99* -Prijury HNYC4262---Profil.: OMCI ...-0GAfl COPT--.------cil.nt Document. DOCUMfNT 1 i. MtOPEftTlES AND OUlP*tffI <Tabtc Gaption> 1993 1692 <S land..................................................................................................................... 6utidings............................................................................................. Machinery, equipmant Md other................................................. Projects under construction. ... ........................................ Proportte* ond equipment, gross ........................................ Accumulated depreciation and amortization........................... Propartlas and equipment, net ............................................ $ 51.3 636.i 1,642.5 247.6 2,777.6 (1,323.7) $ 1,454.1 <C> 3 59.2 601.3 2,199.1 231.4 3,291.0 (1,563.1) $ 1,707.9 /Tsblv Interest costs have beea incurred in connection with the financing of cortain assets prior to placing them in service. Interest costa capitalized In 1993, 1992 and 1961 mere 67.4, 620.4 and 621.4, respectively. Depreciation and amortization expense relating to properties and equipnent amounted to 6169.2, 6194.9 and 6203.4 in 1693, 1992 and 1901, respectively. Grace's rental expanse for operating leases Mounted to 663.8, 660.0 and 667.7 in 1993, 1992 aad 1991, respectively See Note 11 ter information regarding contingent rentals. At Oocenter 31, 1903, minimus future payments for operating leases wore: 1able> <S 1994 ....................................................................... .... 1996 ..................................................................................... 1996 ..................................................................................... 1997 . 1996 ..................................................................................... Later years....................................................................... <C> $ 59.4 50.2 41.9 35.4 28.9 75.5 Total emimn lease payments............................... s 291.3 </7ab) The above minimum leas# payments include sublease income of 612.1 per year for 1994 through 1996 and a total of 653.6 in later year*. In 1992. a critical raw material supplier to Grace's fused silica plant in Belgim i effectively denied a previously promised permit for by-product disposal, resulting in the shutdown of the supplier's plant. As a result, the continued operation of Grace's plant mould have required Grace to obtain other suppliers and/or take other actions requiring significant additional investment. Consequently, Grace closed its plant and in the third quarter of 1992 recorded a one-time provision of SI40.0, reflecting the entire net book value of the facility and certain additional expenses. This provision could be offset in part by recoveries from litigation, the renegotiation of certain contracts relating to the plant and/or the sale of the plant. As of December 31, 1993, Grace substantially completed the shutdown of this facility and believes the amounts recorded are adequate to cover remaining contingencies. F-16 * <C* 9400T TtM 001 CMfui papar (9.0% ana 4 H Mlafttau arvagi literate ritl if y*ar.and 1093 m| iM, .... $t Oak MrrdalHO (4.9% wat001*4 Mrt|i nt4r-**t rat* at TW-ON0 10*3) <tl .................................................................. Carrant uiurmi af laaftira M(................................ Oih*r anart-tam tarrwiae(l)............................................... 10T.4 9 n.c 0.1 BM.i 170 0 50. T 71* 4 9 099.R 9 404.7 tang Tr Daftt C--ar;i>l w* (3.0% aaiffctaa Mrg iMartit rata at yaor-and 1103) jti ................................................................... Mir bortoalms (3.f% m 4.2% vaiffttaO mraaa iataraat rata at yavaaa 1009 w*a 1009, raapactmjy)(1)................ r a% aa Oua 9000(3)................... ...................................... 7.70% MtOl Cum 9009(4). ..................................................... 0.0% tntaa Qua itOS(B) ............................................................ krtO') iMiOMMit aitfe nrtow atlurlUii tfrwiA 2009 . liww Yield option rm (iTDM)|0)................................... 1.90% (aavartlOla tiOoraiMU Oatrtur0 Out 9002(7) . . . Ira**trial ranaaua aanda arith ariaa Mturiiut tbrowga 2007 .............................................. -......................... 90.9 479.0 990.0 100.0 104.0 72.2 S 610.0 100.0 190.0 NT 4 151.7 ISO.9 0.0 t.112.0 <.400.2 Liu aaounu 4a iiou on* yiar intludM to ftOarr-lara Mt 0.1 90.7 01,173.0 l,3M.k fuil*70r NtyMM oaorapo lttaroit roto%M total 0oM *>; 'i!n fn r<) IMI ITt INO HVOLVXMD CREDIT AdNEHBfT, 0MCE AY RDRNOP I# TO Ct,290.0 AT MUNI0) NATES NASO UPON TIC 7REUAUIM PK|M, fGDEM. RMDS ANO/CR CVMD0UM RATC. 07 THE 01,220.0, AFWOClMtU 1219.0 IS AVAlUtfU LIBIA A 904.307 FACIlTTT SJ9IN1M SEPTENBtN 1, 10*4, 4M0 TK IfPMMER 3 AVAZUIU MOM A TMfl.fCAN FACILITY EVIRM tfmtflOl 1, 1009. AT occeum n, toss *0 1002. wmw or 102.0 4jd saoo.o, acoacctnciv, CHS OtfTSTAMDINft MEN 7 MVOLVINO CRE9IT 00MEMH AM AM 1UCUOFD 10 Lfldtt-TfRi BAM OBMOTlNOi A0Okt. AT OCCOKB 01, 1902, 1012.0 M RESERVED to support cowcnciai p*cr m oret mm ONuonan ounwoiifi, uafzvg ITT UNUKO CREDIT F4C111TIC0 OP 0047.0. A0C*l MSUTV TO 0OAMM ME poaouo amount* avauaili under on* mouitiss it tt&iser to ooMUAMt WTH CERTAIN COWOWTl. MICH IHGUflE MUMP NET NORTH KBIftaFMEJirt AM Afc HTtRflT OOOEAME MHO. (91 WPRtOdlhO 1MU0UI UfCA 07 CUftfT 40 KClUAMOUS 0OMONIH90, TUMULT OF MH-ll l 90S1CIMIIS. (91 omtm TH FIRST OUMTEN OF 1012. OMCf SOLO-AT PAN 0200.0 OF 7.4% NOTfl OUE 2000. INTEREST IS PAYABLE SEUAMNIfeiLY MO T* UOfTFi NAY NOT 00 rbcemo rmoa 10 natuuty. I4i OUN10O TIC third OMUfR OP 1092, 0MC4 90UI AT Ml S1S0.0 OF 7.79% NOTES om 7002. IHTEUST ! PAW0U SCNZAOMAUT AM DC NOTEI MV NOT BE REOEfMfr PRIOR 10 HATUHTV. (Si OUUtt IX FOURTH OUMTER OF 1009. B%40 SOLD 0100.0 Of I.R HDTSO Out 1000 AT m INITIAL PUBLIC OFFERW) PRICE OF It. 1901 OF PAR, TO YOLO 0 00% WttWT IS PATOU KlfllMMmV AND T NOTES BAT NOT BE NEOEEMD PRIOR TO (S> 0R4CF NTOFEIKO IN FULL Ail. OF ITS OVTBTANBIHB OOUtO YlCiO OPTIC* ROItS (11009) (SI.0T2J FNINCZPAL AMUR AT MTUNCTY; 0071.4 CMRtttt VALUE) 00 JULY 20, 1003. IN COMMOTION PITH TC UDCCTIM, APPIOXtMTVIV 21% OF TMS AVOW iMTNBKIiATElY 0300.0 mm co*ftfftT Nero i. mtam PNXNOXOAL hoam of A0OM1, 0113.B 0. n. omcb b CeoM. BotnoimOoVnAsLUtoEc) k. rx HunM of tnc lyohr mos wnmo for 0*07.0 m cmh. 17) ORAQ BEBEEMO IN FULL Ml. OF ITt BUTBUMIM A.MR WiURTlMI 0L0ORO1MATC MIOIUVS DUE MO> /0.2M KSEVTUNtt) ON BEPTHMR IS. IBM. TM 0.20% 0SRENTM2S KN COOMIIIU INTO CONNOR STOCK OF V. K. OMCE I 00. AT a 09MNSI0N MICE 07 947.199 TfR 9HMC. ILMTA0TIALLT ALL OF EM StSO.O PUNURAL AMUNT OF TW 0.90% OMSVT0RCB OUT0TARDSNN IMMlATELV PRIOR TO *STR4a 7>fM0l 1 aaMtatlRllv oil 00 Ortct'i 9iptaaiaa aay ta aaaalarataO, mmt it* ptmesool kmnai agruaiiitt taralnotaO. upon tho oaourraoea m* a Mfauit aaear cniu atfear Bract mtomIrbo. SaMaPaao Miriuo of ooot at Dia--Nr St, 1002 oro: 1094 -0IJ; I90t-.$100.$ 1000 010.9; taor- ao.l. m4 1990*04.4. IfetiHit MNUI tar 03. 9oa m4 I90t --yatao ta 991.9, 000.0 an* llts.4, 'HNCtiHjy,__ Ittaraat paypoMo Na 1a 1003, im and iopi aawtu tt nn.i. 4110.1 mi SINS.I, nopictimy. Sy rrmum Ito totaroot rtt iKpeurt ihmuj% iRT w strianm LgtMiti, Sroeo rtPMOs latsroot onhh for tfea raara aaaad OmmRt 91, ists M 1900 07 190.3 004 04.7, r0Op*ctlOl7. Saa Bata 10 for furtnar RIioimIm #f utinrt nil iprafaata. Borlo* Ihi fturtn Ouartor at 10M. Bract flla4 a ranUTrattan ctataaaat iro Ucarltloa 09 befetnp CeoaioiloR eavarlti I7S9.& of 4Pt oad/ar acuity tacuritaai tmt aay oa laid fra tM ta tl; tfea raoutrauan ttotaaaot bacoao ttaatlva ia Jinaary 1R94. FU I GOCUNENT 1 PAGE <7------------- (pg 28UAR-<994 12:2S:0S,ND 2G-GAR-1994 04:50:13) |4C422]FaiIO K_42K C-~---M0999- fh-mary 94NYC42B2---Profila: W.R. gaa --CDGAR COPY - ---Client Docuaant: DOCWENT 1 <Paga > 10. FINANCIAL INSTRINENTS INTEREST RATE SIMPS Sraca aetars into interest rata hedge agreements to mnag* iataroat cotta AM riaka eilocietwc with changing intaraat ratal; aoat of tnaaa agraaaaata affactivaly conaart underlying fixsd-rats debt into vnriabla-rets dabt Oatad on LIBOR. At TTaraatur 31, 1083 and 1902, tna notional principal mount of tnaaa agraananti totalled (1,250.0 and Si,035.0. reapectlvely. At DacaMoar 31, 1903. Sraca would have bean required to pay 325.1 to eettle theaa agreaaants, representing the eiceaa of carrying value over fair value, baaed on eatiaatea received froa financial InatitutioM. The fur value at Oeceabar 31, 1902 nae not naterial. Due to prevloualy tattled agreements, Waca hat unmnrtiied gains of 355.3 and 34.9 at of Dacanber 31, 1993 and 1992, raapectively, which are reflacted at adjustments to intaraat axpanae over appropriate period! relevant to the retpactlve financial instruments. FORE ION CURRENCY CONTRACTS Grace entera into a variety of abort-ter* currency swaps, foreign exchange contract! and optlont to mnage iti exposure to fluctuationa in foreign currency exchange rates. These contract! generally involve the exchange of one currency for another at a future data. At Dacanber 31. 1933, grace had a notional principal mount of approxiaately S34.9 in contract! to buy or tall foreign currency in tna future. The carrying value at pecaaber 31, 1999 and 1992, Milch approximted fair value baaed on exchange rataa at Deraahar 31, 1933 and 1902, at not tlgnlfleant. OTHER FINANCIAL 1NSTRIMENTS At Daceaber 31, 1993 and 1992, tha carrying value of financial laatruamta such at caah, abort-tar* inveataanta, trad* receivable* and payables and short- tarn dabt approxlmtad their fair values, based on tha short-tarn naturltiet of tnaaa instrunant*. Additionally, tha carrying value of both long-tarn invettnents and raealvablas approxlanted fair values, fair value is datarnlmd baaed an expected future cash flora, discountad at narKet intaraat ratal, and other appropriate valuation mthodolegiea. At Oecaaoer 31, 1993 and 1002, tha fair value of long-tarn dabt wat 31,210.4 and 31,400.0, raapectively. Oath periods include approxiaately 3510.0 of borroaringe supported by tha revolver agraaaant, for which tha carrying value approxlmtad fair value. Tha fair value of dabt it oatemlaed by obtaining quotas rron financial institution*. Exposure to aarxat risk oa intaraat rat* and foreign currency contracts results fro* fluctuationa in floating rata indie** and currency rataa, respectively, during tha period* in which tha contracts are outstanding. The counterpartits to Orica'a intaraat rata badge agraaaants and currency exchange contracts consist of a diversified group of aajor financial institutions. Grace ta exposea to credit risk to tha extant of nonpertoraance by tbasa counterparties; however, earn taint believe i the risk of incurring losses dua to credit risk is r**ate. Tha national aeovxt of tha instruments discussad above reflected tha extant of invelvaaant in tha instrwmeats, but did net represent its exposure to mrket risk. Considerable judgment it required to develop the estimates of fair value; thus, tha attiaatas provided above are not naeasaarily indicative of the mount* that could be realized in a current aerkat exchange. 11. CONNITUENTS AMD CONTINGENT LIABILITIES Grace is the naaad tenant or guarantor with reepact ta certain lento obligations of previously divested businesses. The leasee, acne of Milch extend to 201S, have future minimum lease payments aggregating 360 4. Grace is also the oanad tenant or guarantor with reepact to lease obligation* having future ainlaua laaa* payntnts of $43.7, as to enieh Chaneel Hone Centers, Inc., a previously divested business, has been released in bankruptcy; offsetting tnis la S33.7 of future minimum rental 1neons iron subtenants. Grace continues to attsapt to iLpleaat the remaining prop*rtlea and ballsvat its ultimate expoaura Is net aaterlal. Grace it the naaad tenant aith reepact to lease ebligatleat with future ainiaxsi lease pamoate of S1S.S that have bean as signed to Hsraans, a previously divastad business currently operating under Chapter 11 of tha Federal Bankruptcy cod*. Heraaas has adezted Grace that it intends to continue t* occupy prmisas under lease* with future aunimum payments of S1T.S aad is negotiating termination agramentt a* to tha reminder. Grace believe* its ultlaata exposure under these leases is not aaterlal, as Hermans is performing on its currant laaa* obligations and expect! ta emerge from bankruptcy aa a viable company. Additionally, ben is fully indemnified by ether parties far any lonaes it nay incur under theaa leases. In 1902 and 1903, Grace proeiOad Tha Restaurant Enterpriest Group, Inc. (REG) itn various forma of financial support, including a latter of credit support facility to assist REG in aaatlag certain liquidity and other financial requirements. Curing 1003, REG uas reorganized, and in January 1004 tha latter of credit was canceled and Grace received 342.B in exchange fee all of the REG securities held by Grace. The reorganized REG (note named Family Rastauraate, Inc.) has agreed to indemnify Grace with respect to leasee entered into by REG'S iiPiidiariei under which Grace remain* contingently liable. At Decamdsr 31, 1993, these leases have future alniaum lease payments at 372.4. Grace believes any risk of loss from those contingent liabilities is remote. F-1S # -OOCUKUT 1 PAGE 4S-------- (P0 78-MAR-1*bt 12:26:05.10 26-MO-1M4 (M:50:13) (94(fYC4271fOMlO->> <78? C............................................940996- -Prinary 94NVC43S2--Profile: 0-0. GRACE ------EDGAR COPY-------...........----- -Clisnt Document: DOCUUINi i <**ege Croc* it subject to loss contingencies resulting tror environmental lnt and regulations, which include obligations to remove or mitigal the tflteti on the environseat of the disposal or release of eartaia wastes and other substances at various titas. Oraea aecruaa for anticipated coats associated witn invastigatory and raMdiation affartt artwra an aaaaatisant Us Indicated taat a lots it probable and can be reasonably estimated. At Oacaabar 31, 1993, Oraea's accrued liability for environmental remediation totallad approximately *1*0.0. Tna measurement of tha liability it evaluated quarterly bated on currently available laronaatloa, including the progress of remedial invostigatlon at oach site, tna currant status of discussions nitn regulatory authorities regarding tna nettled and extant of ranequation at eacn site, aad the astant of appOrtiOMsent of costs anong otnar potentially raspoatlbla parties. As sane of those natters era decided (the outcone of Milch Is uO|ct to various uncertainties) and/or non sites are assessed and costs can be reasonably estimated, Oraea alll review end analyze the mod for additional accruals. 12. Minority Interests In OnceiMMr 1M2, LP, formerly a general partnership named Oraea cocoa that was wholly owned by two Oraea entities, adaitted two additional Oraea antitian as general partners and also admitted ana nan limited partner. As a result of the admission of these nes partners, the total capital of LP increases to *1,030.5, which included a *300.0 cash contribution made by the hew limited partner, *2*7.0 of mhich ms funded by outside investors. IP's atssts consist of drace Cocoa's worldwide cocoa and chocolate business, long-tarn notes and depend loans dun from various Oraco entities, which arc guaranteed by V. R. Oraea * Co. and its principal operating subsidiary, and cash. The cash contribution from the new limited partner ms Initially lent by LP t the principal operating subsidiary of I. R. Grace * Co. and ms used to retire certain domestic borrowings and for general corporate purposes. Four Grace entities serve as general partaars of IP and owi general partnership internets totalling 70.03% in LP; the new limited partner Owrvs a 20.97% limited partner Interest in LP. LP is a sapareta and distinct legal aatity tram each of the Grace entitles and has separata assets, liabilities, business functions and operation. Far fiMncial report ins purposes, the tseets, liabilities, results of operations and cash flews of IP ore included in Grace's consolidated financial atatononts as s component of discontinued operations and the outston investors' interest in LP is reflected as a minority interest. 13. Sherenoldort' Equity The neighted average number of sheres of cannon stock outstanding during 1W3 wet 91,4*1,000 (1*02 *9,543,000; 1991 - *7,230,000). R. Orsce * Co. it authorued to issue 300,000,000 shares of cannon stock. Of tne cannon stock unissued at December 31, 1993, approilnately 9,7*7,000 shares My be issued or dollvarod upon tnc oxarciso of stock options or grant of shore awards in connection with stock incantives such as stock options. Is addition, at Decamber 31, 1*93, 102,232,000 tharee were reserved in connection witn Common stock Purchase Sights (Rights). A Right is iisutd for each outstanding short of common stock; the Rights are not and will set become tiercisable unless tnd until certain events occur, aad at no tine will the Rights have aay voting power. Preferred stocks authorised, issued and outstanding ere: <1atile> <Cnpt tan* snares as of December SI.IMS Par value of Shares Outstanding Authorised In out- and Issued frMMiry standing $ <C so.ooo 9S CimUIivi Class A(2) 50,000 n hoacunutative Class 0(2) 40r000 c* 9.sac 33,044 10,41* <c 36,4*4 IS,350 21,385 1663 <C (3.0 1.6 2,2 1992 1M1 <C *3.6 1.7 2.2 C *3.6 1.7 2.2 *7.4 *7.5 S7.S .... .... .... <Fn (1) 1*0 votoa par snare. (2) 1* votes par sharp:' - </Table> Dividends paid on the preferred stocks amounted to *.6 in each of 1993, 1992 and 1991. The Certificate of incorporation also authorizes 5,000,000 shares of Class C Preferred Stock, *1 par value, sons of which has been issued. F-19 'DOCUMENT I PACE 49--<PD 29-U*fi1*** 12:25:05,MD 26-N4B 1994 04:50:13) (94NYG4?62JFOftM10-K 4262 C--- 940999- Primary 94MrC4282*Proflie: W.R. QftACE ---EDGAR COPY-***--Client Document: OOCUVfNl 1 <Page> 14. Stock Inctntlv* Plant Table* Ception Changes in outstanding ecmiM stock options are summarized below: 1993 Number of Shares Average Exorcise Price $* <C> <0 Balance at beginning of year . . . 6.365,107 635.09 Options granted. ........................... . . 1,461,425 36.00 7.026,612 Options exercised........................... (663,255) Opt ions terminated or canceled . . (176,053) 25.69 40.13 at ud of yoar . . . . . . 6,965,30* 35.43 1992 Amber of Shares Average Exercise Price <C <C> 6,112,248 532.01 1,445,300 37.77 7,557,546 (1,132,863) (59,493) 25.29 27.97 6,365,167 35.09 1991 Number of Shares Average Exercise Price C 7,172,775 2.901.793 c* *74.91 39.27 10.074,566 (2.052,421) (1,009,699) 23.49 25.54 6,(12,246 32.01 /7eble At Decernbar 31, 1093, options coloring 6,051,256 iMrti <1002 4,026,040, 1091 - 3,090,00b) vara exercisable and 1,004.122 atiaras <1002 -- 3,067,994. 1001 4,697,366) vara available far additional grants. In 1001, cartain executive offlcara surrendered all or a portion of thair outstanding stock options m exchange for shares of covnon stock equal in value to the axcasa of ft) tha market value of the option aftaras at the dote of surrender over (2) too purchase price of the option shores. The shares received upon surrender were subject to restrictions on transfer. Tm officers surrendering options generally were granted new options covering on equal number of shares with a purchase price equal to 1101 of the fair market value of the common stock on tha data of grant. Subject to certain exceptions, such options nay not be exercised until IMS, at which tine they tacoil exercisable in five annual installments. 15. PENSION PLANS Grace maintains defined benefit pension plans covering employees of certain units who meet age end service requirement*. Benefits are generally based on final average salary and years of service. Grace foods lte U.S. pension plans in accordance with federal lavs and regulations. Non-U,S. pension plans are funded under a variety of methods because of differing local laws and customs and therefore cannot be summarized. Approximately 55% ef U.S. and ncn-U.S. plan assets st December 31, 1993 more common slocks, with the remainder primarily fixed income securities. Pension (benefit)/cost is comprised of the following components: stable* Cption> 1993 U.S. Non-US. S <c Service cost on benefits earned during the year. . . .6 17.6 Interest cost on benefits earned in prior years. . . . 36.3 Actual return on plan assets ............................................. Deferred gain/(lots) on plan assets............................... Aflortii.tio* af Mt t> *4 prier larvict east*. . . (6.3) <C> 6 9.5 17.1 (56.7) 36.0 (1-7) N.t pansla. (banafltl/cait ................................................. . 6 (1.6) S 4.2 1992 1991 U.S. Non-U ,S. U.S. Non-U.S. <> s 11.1 31.7 (20.9) (30-Si (0.4) S (17.0) C S 9.4 16.5 (30.6) 9.5 (5-6) 6 (.7) c> s 13.6 30.9 (63.6) 33.2 (7.71 <C S 13.4 16.3 (34.3) 12.9 (2.) 6 (13.6) 6 5.4 /Table* F-20 0- -OOCU*WT I PAOf SO------------ ---------- (PD 2>-IWI-19M 12:25:05.* 26 1UA ,gg4 04:50:13) |4NrC4232]F0A*1O-K 4207-C---- ----9409S9* Primary 94RYC42*?--Profit*: *'-R. GRACE ---EOOAD COPY---------Cl leal Ooeinent: DOCtanNI i Pg> riM funded (Ului of tMH plant vat at fallows: -Table-Caption mi u.s. Non-U.S. c> Actuarial present 1m of benefit obligation: Vested ............................................................................................. .6 *14.3 <C> 6173.6 1902 U.S. Neo-U.s. c o S 622.3 6t63.fi Accmulsted benefit obligation............................................. -6 630.0 0192.2 S 537.7 St 76.1 Tote) projected benefit obligation................................... a* 691.4 6363.4 Plan tiMU et fair v)v..................................................... .... . *36.4 270.1 6 S96.4 6240.4 767.9 2*8.5 pjen aiuti in excess of projected benefit obi ifatIon . 145.0 Unaaortiled net gain at initial adaption ...................... Unanortiiad prior sarvlca coat ............................................. . 34.a unrecognized net geln/cioss) ................................................. 47.6 Prepaid pension cost ................................................................... S131.3 3 <f n 6.7 (.4) 4.2 .9 5.4(1) 171.5 (106.6) 19.4 54.2 4S.1 114.3) 4.2 (21.0) $ 136.5 3 17.9(1 ....... .............. ID Includes $71.4 in 1093 and MO.7 la 1002 of prapald pantian cant*. </TaPla> Tna following tignlfleant atiaaptiont vara uaad In 1003, 1002 and 1001: -Table-Capeion> 1003 1002 u.s. Nbn-U.3. U.S. Non- U.S. <s> Discount rote et December 31.................................. Expected long-tern rete of return.................. .... Rate of coNPtnsetion increase. . . .................. .................. .................. .................. C* 7.6* 9.0 5.5 < 4.5 - *.0% 6.0 - 10.6 3.5 - 7.5 <c 8.0% 9.0 fi.O <C> 6.0 12.0% 6.0 11.0 3.5 7.S ./Tabla- At a ratult of classifying eartaia aparatioas at diacoatinuad and divasting otbar operations, Oraca racogniiad aa lncraata in tha nat prapald pantion Dana)it of 36.2 and 310.0 in 1002 and 1001, ratpactivaly. In addition, Qraca tattlad cartain pantion obiigatloot of ana of ita non-U.S. plans, rasuiting in garni of $.6, $.7 and 311.B in 1003, 1002 and 1001, ratpactivaly. Qraca'i Ratiranant Plan for Salaried Eaployaai (Plan) contains provisions undar waicn tits Plan would automatically tanainata in tna avent of a cOanga in control of 0. R. Graev S Co. and Plan banaflts mould pa tacarad through tna purenasa of annuity contracts. Upon sues termination, a portion of tha Plan's excass assttt mould ba placed in an irrevocable trust to fund various snployae benefit plans and arrangements of Oraca, and any balance would oe returned to Grace. 1001 u.s. Nan-US. <c> 9.0% 9.0 6.0 <c> 6.0 13.0% fi.O - 11.0 3.5 - 7.5 F -21 0* -OOCUICNT 1 PACE 51------- (PC 2S-KM-1B* 12:25:05,> 25-NAII-1094 03:02:11) |B*KYC422]F0I10K.A_422C-------- BAOOP#- Primary gaNVC4262--Profile: (.1 OWE -COGAP COPY------------Client Document: DOCUMENT 1 Page* is. OtMr poitretlrsment Bandit Plant Grace prmtMt certain ether pettretirwmaiit health cara and Ufa insurance baaafita for retired employees of specified U.S. uit>. Tkaaa ratiraa Mdical and lifa insurance plant provide various lava It of baaafita to eapleyeas (depending an their data of hire) obo rdtlra froo Oraca aftar aga SS with at least 10 yaart of service. Tba plant aro Currently unfunded. Effaetlva January 1, 1002, Oraca adaptod SFAS No. 106, which raquirat tha accrual method of occeuoting for tba future eoatt of pottratlraaaat health earn and Ufa insurance baaafitt ovar tba aaployoat' yaart of tarvlca. Tba 'pay at you go' aathod of accounting, utad prior to 1002, recognized theta cotta on a catt Oatit. Tha adoption of SFAS No. 106 on tha iaaadiate recognition batlt, concurrent with the adoption of SFAS No. log, retuItad in a charge to 1002 eamingt of S100.0, net of 606.0 of deferred iacoao taxat. In addition, tha application of SFAS No. 106 raaulted in a (recreate of 65.1 in 1002 after-tai aaraingt froo continuing operationi. Oraca't cath flow, houevar, it unaffected fay laplaaantation af SFAS No. 106, at Grace continual to pay tba cotta af poatretireaant benefit! at they are incurred. Included in noncurrant llabilltiei at of Daceaber 31, 1003 and 1002 are the following: Table* Caption* <S Accumilated poitrotiranant benefit obligation: Datiroaa...................................................................................................... Fully aligibla participant!............................................................ Active ineligible participants...................................................... Accumulated pottretiranent aeaefit obligation............................... Unrecognized net laaa......................................................................... Unrecognized prior service benefit............................................ Accrued poatratiraasat benefit obllgatien........................................ 1003 > Sltt.O 36.fi 36.3 244.1 cteto.f.7i ) (266.3 Ifift? <e> 3151.0 21 aS 45.1 21r.fi (17.6) 75.? 62TS.2 (Tapia* Nat periodic poatretlraoent benefit coat far tha years ended and 1002 it coapriaad of tha felloolng deponent a; Table* Caption* <S Service cott........................................................................................................ Intarott cott on aeewnuiatod poitrotiraawot benefit obligation................................................................... ........................ Amortization of not lota.............................................................................. Amortization of prior torvlco benefit................................................. Nat periodic pottrotlromeat benefit cott........................................... tr 31p 1093 IfifS c> 3 3.2 13.2 .2 (4.6) 611.1 1902 <C 3 3.ft 15..f.i (1.9) 317.5 debit* The cott of thasa benefit* (cash batlt) to Grace'a continuing eperationi oat approtlaalely 66.6 for 1061. At a raault af claeilfyiag certain operations at discontinued, Ib-aca recognized reduction! in tha accrued poatretireaant benefit obligation of approaiaatoly S16.6 and 623.5 in 1003 and 1902, respectively, which are reflected in tha reserve for discontinued operations. During 1692, Oraca't ratiraa medical pleat ware amended to lacroaao cost snaring by employees retiring after January 1, 1003. Tbit aaaadmoat decreased the eccuaulated postretirement bsaafit obligation by 652.0 at Oacaabar 31, 1063 and will be amortized ovar an average remaining future service Ufa of approximately 13 years. Nedical care coat trend rates ware projected at 11.7b in 1003, declining to 5.0b through 2003 and remaining level thereafter. The effect of a one percentage point increase in each year's assumed medical cara cast trend rate, holding all other attumptioot constant, would be to lacroate the aaautl net periodic poetretirement benefit cott by 61,6 and tea eccuaulated poatretireaant benefit obligation by 516.5. The discount rates at Oacaabar 31, 1003 and 1902 ware 7.5b and g.Ob, respectively. la Novetdur 1002, tba Financial Accounting Standards Ooard lamed SFAS No. 112, 'Eaployart' Accounting far Fostemploymaet Baaafitt,' which raaoirwt accrual accounting Ter *on-accumulating poitaanploymant baaafita. Grace's primary potteaplayaant obligation it far disabled anrhare' nedical benefits. These are currently Included in accrued postretirement costs under SFAS No. 106. Tba adoption of SFAS No. 112 is not expected to have a material affect on Grace's results of operations or financial position. F-22 DOCUMEMt 1 MCt 5?------------ ----------------(M> 28-1141).1M4 12:24:04,80 ?5IM)-1B04 03:02:18) (84NYC4?82|F08lf10-K-A <282 C---------- MOM9- -PrUsary 64#rC42--Profils: .R. OMCE Wl COPY--------Cliaat Ooeuwnt: DOCUMENT 1 <Paga> 17. Industry nnd Gao,rapMc S4fMn <Tabla> industry Ssgasnt In#omaTlon(i) <$> M snd ftasanuas............................. Pratax Oparatln, Profit.................. IdtnUUsbls Aasats........................... Otpraciation and Aaertization.................................. <c* IMS 1882 1M1 IMS 1992 1991 IMS 1882 1M1 IMS IMS 1991 1883 1992 1991 Specialty CMaieala <c <2.885 3,092 3,079 392 239(3) 409 2.116 2,012 2,280 208 224 21 139 fSI 194 NMlth Car* <> *1.513 1,273 1,090 247 176 143 1,442 1,095 1,016 90 62 46 79 65 1 Ot3ar(2) <c 3 249 (410(4) (242)(4) (216) (4) 1,791 827 750 21 94 52 12 9 19 lots! < 34,409 4,937 4,397 221 193 334 5,348(6) 4,034(5) 4,076(6) 3(0(5) 310(5) 314(5) 229 225 233 f-23 > DOCUMENT 1 PAOf 53--(PD 26*UAA'l994 12)25:05,110 2ii-6A8-1094 03:02:16) fO4llYC4262JFO*910-KA_4?a?-C--940999- -Pruary 64NYC4262*Praf 1U: P.6. OMCC -EDONI COPY----Cl ift Document: DOCUVNT 1 <TaPl#> C#Ofiirapliic Sagaant Inforutioo(t) <S> Salas and Aavanuat........................... <C> 1603 1092 1991 Prttn OparatiAfl Profit................ 1M) 1992 1091 !Mntifibl AlMti........... ............. 1003 100? 1001 <f#> United Otatai <c> n.ass 2,721 2,455 400 307 313 2,327 1,077 1,01S Canada <c 0124 131 130 7 1 10 82 75 06 Europe <c 0 832 1,001 UN 03 ()(S) 102 753 772 060 Otaar <c* MAT 404 301 70 70 77 305 203 300 (1) Cartain Mount! hava baan raitatad to coofana to to# 1003 protantatien. (2) lacludaa dlvastad specialty Milntim and unallocated corporate itaas. (3) IneltiOii provision of 0140 raiitlng to a fuaM silica plant in OalgltM. (4) Uaallocatad corporata ltaaa include: latarast aspaaaa...................................................... Oeaaral corporata overkead expenses............ Oaaaral corporata raaaarcte axpanaas........... Provision relating to astooatoa'raiatod insurance covers,*............................................. Mat fain on strategic raatructurln,........... Other fsspeatei)/inccus, aat........................... Total 1009 S (82) (83) (*> 11 BP) (SO) S(41l) 1802 * (80) (04) (02) --- (20) 5(242) 1901 0 (HO) (03) (SO) 6 10 *(2) Unallocated Corporata Itaaa (?) c 0 249 <>) (?18)(4) 1,701 027 750 Total <> 04,406 4,337 4,367 221 193 334 5,348(5) 4,034(5) 4,020(5} (S) Excludes aaaati ad capital aapaadlturaa of diacaatinuad operations a* fellousi 1003 1002 1001 Idantlflabla asaata........................................ Discontinued oparatloas............................... 55,346 761 64,034 1,666 64,026 1,061 Total Assats................................................... 00,108 5,588 05,007 Capital aapanditura*...................................... Di(continued operation!............................... Total Capital Eapaneiturai.................... 1 310 * 310 6 910 66 S 396 6 314 133 6 447 </Tat>la F-24 * DOCUMENT t PAGE --- ------------------ ....... (po -primary #4MYC422--Profile : N.R. CAACE 12:25:0S, 25-MW-iMA 03:02:18) |4NYC42S2)FOSM10-K-A 4282 C-------- 940999. ----EDGAR COPY---"----------------------Cli.iit Docunant: DOCUMENT i QUMTTEHLY SUWARY imWDIUD- `DOLLARS IN MILLIONS, EXCEPT PER SHAM <Tabl <Captlon> QUARTER ENDED <3 MARCH 31 <C* JU* 30 O SEPTEMER 30 c* DECEMBER 31 <o &ilM and rtvamns..................................................................... Cost cft poodi sold and operating axpansat.................. Intow/lini) fro* continuing cpiritlm.................... Lmi fren liiconllnwl opmtlMi.................................... Net incaM/lloss)....................................................................... Erningt/ilsit) par share:(2) Continuing opsrations................................................... Mat aaralngs/flnsa)....................................................... Fully diluted Mmino* ptn star*: Csntinui.g optrilltn................................................... Nat aaraings.................................... .................................. Dividends daelarad par common ahara................................ brut prlc* of co--nn stock: (3) High.................................................................,...................... Lon............................................................ .............................. ClOH...................................................................................... 1992(1) Salas and ravaneat......................... *......................................... Coat of goads said and operating axpantas..!........... Inco--/ (loss) Iron continuing operation*.................... (losal/inc--* fraa diacdntlaued operations................ Cwulativ# affact of accouating changes...................... Nat (lo*)/incoB*........................................................................ Earnin#/(1!> P*r MMr*:(2) Cantinuing operation*................................................... Cunuiatlva affact of accounting changaa........... Nat (loBs)/aarninga........................................................ Fully allutad aarALAR* p.r sliara: Continuing oparationl................................................... Nat oarnings....................................................................... Dividend! declared pnr co--an share................................ Market price of co--an stock:(3) High......................................................................................... Lon........................................................................................... Close....................................................................................... 8906.2 (--3.1) 31.7 -:a.4) 29.3 S .35 .31 S.34 .30 a.ss 940 1/8 36 3/4 38 1/2 8840.3 (seo.t) 17.0 (14.1) (150.0) (1r.1) 8 .19 (2.12) (2.10) 8 .18 --() S .IS 8 45 37 3/4 40 3/4 81,094.1 (04S.S) S3.9 (105.0) <51.1) 3.00 (*?) s.ss --<*> 8.35 81,138.1 (884.3) (236.4)14) .(236.4) 6(2.58) (2.SO) S--(S) --<*> 8.35 81,182.0 (090.2) 2SS.2(S) ?5.2 83.05 3.OS 93.03 3.03 8.35 840 5/8 30 1/2 40 1/2 841 1/4 34 5/S 34 S/S 840 5/8 34 3/4 40 5/9 S1.001.C <809*2) 61.1 <152.3} -- (101.2) S 1,114.2 (648.2) (S4.5){7) 2.4 .. (82.1) 8 .57 .. (1.13) S (.04) (-22) S .$4 --<) S .35 S --(61 --() 6 .35 81,220.9 (YYT-O) 74.1 1.9 75.9 8 .82 ._ .84 8 .75 .77 S .35 S 38 1/2 33 3/9 34 S 38 1/2 32 37 5/8 8 40 3/4 34 40 1/4 <Fr> (1) AMOUNTS HAVE BEEN RESTATED TO CONFORM TO THE YEAR-END 1003 PRESENTATION. 12) PEP SHAPE RESULTS FOR THE FOUR QUARTERS DIFFER FROM FULL-FEAR PER SHARE RESULTS AS A SEPARATE COMPUTATION OF EMWINQS PER SHARE IS IMWE FOR EACH QUARTER PRESENTED. T* DIFFERENCE IN IMS IS PRINCIPALLY DUE TO THE COPY!RSIOH 1H THE THIRD QUARTER OF OUTSTANDING LYONS INTO APPROXIMATELY 2.S MILLION SHARES OF COMMON STOCK; SEE NOTE S TO TIC CONSOLIDATED FINANCIAL STATEMENTS. (3) PRINCIPAL HAAKET: ** YORK STOCK EXEHANOE. |4> INCLUDES A PROVISION OF S300.0 RELATINO TO AMESTOS-RCLATEO INSJRARCE COVE RACE. IS) INCLUDES A S2O0.0 REVERSAL OF THE S300.0 PROVISION RfLATINO TO ASBESTOS- RELATED INSURANCE COVERAOE. (S| NOT PRESENTED A5 THE EFFECT IS ANTI - DILUTIVE. (?) INCLUDES A PROVISION OF S140.0 DELATING TO A FUMED SILICA PLANT IN BELGIUM. /Tat>l F-2S  V.W* .j< |p 1 * lat>l + <C4ptidft* S'........................... ....... iPO 2 MAB*1994 17:25;05,W0 25 MAR-1994 03:0?:i8) |*4N1fC42B2]r0RH0 K A_42a? C----94099^ -profil: * R GRACL *-"EOGAR COPV*"**------ Oocumm OOCUMIfcl i OUARIFRIY STATISTICS UNAUDITED* -DOLLARS IN UlLLIOtC QUARTER ENDED <S* 1993(1) SALES AND REVENUES Specialty Chaaiealt HaaltN Care................. Total............................. MARCH 31 <c 8649.1 338.1 SMS.2 JUNE 30 <c> SEPTEMBER 30 DECSIDEA 31 <c> c> S 729.9 364.2 SI .094.1 S 734.7 401.4 SI. 136.1 S 792.9 409.1 91,192.0 OPERATING INCOME AFTER TAXE$(2) Spatially ChaNlcait......................... Malta Cara.......................................... Total........... ........................................ $ 39.S 27.9 s sr.s s 68.S 35.1 s 93. s SO .5 36.8 $ 97.4 $ BO. S 42.3 S 122.9 1992(1) SALES AND REVENUES(3) Specialty Chanicali.. Malta car#................ .. Total.................................. SS99.7 SSI'S.7 $ 687 309 8 996.9 $ 723.2 332.3 S1.0SS.5 S S09.0 344.9 SI ,153.0 OPERATING INOMC AFTER TAXE&<2) Specialty CtMMicaia......................... Malta Cara........................................... Total * 33.9 20.6 S S4.5 * 89.7 S 25.6 62.0(4) 27.8 s 86.3 S 99.6 8 83. S 31.7 S IIS.3 Fn* (1) AMOUNTS HAVE BEEN RESTATED TO CONFORM TO THE YM-EN0 1903 PRESENTATION. (2) EXCLUDES DIVESTED BUSINESSES.AW, IN 1993, A SI00.0 PROVISION FOR ASBESTOS-RELATED INSURANCE COVERAGE. AMOUNTS ARE COWUTED BEFORE THE ALLOCATION OF CORPORATE RESEARCH, CORPORATE OVERHEAD AND CORPORATE INTEREST. FOR THIS TABLE, TAXES ARE COMPUTED SUBSTANTIALLY ON A SEPARATE RETURN BASIS FOR EACH UNIT. (3) EXCLUDES SALES OF OIVESTfO BUSINESSES; THEREFORE, THE TOTAL DOES NOT AGREE WITH SALES AND REVENUES IN THE CONSOLIDATED STATERENT OF OPERATIONS. <4) EXCLUDES A PROVISION OF 8140.0 RELATING TO A FMCD SILICA PLANT IN BELGIUM. S7able> F-26  oocumek* i pace ss........................ .. <ro m-nar-issa i2:;os,no 25-na*.i**4 :02:i#i i*NYC42a2iroRuio-c-A c----mosm* Prinary S4NYC42S2--Prof il: N.R. <HUCE fDOAfl COPY----"*--------- --Oocumtmt: DOCUMENT I Pa,u Tnbi*> orloude operations dollars hi hluoks <* UNITED STATES/CAMAOA tpuulty CMMetlt., hu ita car*.................... Total................................. EUROPE Specialty CtmiCAli.......................................... HaaltR Cara.......................................................... . ita......................................................................... ASIA PACIFIC Specialty CMaieala.......................................... Malta Cara .......................................................... Total......................................................................... LATIN AJ*RICA/OTHER Sptcialty Chaaicala.......................................... Haaltfc Cara............................................................ Total......................................................................... Subtotal SinitiA lutUMHI.......................................... Total Continuing Oparationa ...................... ........... SALES M RI VENUES! 1) 1M C> si,ass 1,434 2,979 1M2 <> S1.4SS 1,211 2(MC 1991 < SI ,407 1,020 2.43S 0S7 66 1,025 916 61 946 276 266 s - 264 265 4,400 S4.40N 110 120 4,0*5 242 54,337 K -* 95 6,742 45 54,3*7 (1) CERTAIN 19*2 AND 1*91 AMOUNTS HAVE BEEN RESTATEO TO CONFORM TO THE IMS PRESENTATION. (2) COtruTEO BEFORE THE ALLOCATION OF CORPORATE RESEARCH, CORPORATE OVERHEAD AND CORPORATE INTEREST. FOR THIS TABU, TAXES ARE COMPUTED SUBSTANTIALLY ON A SEPARATE RETURN BASIS FOR EACH SUBSIDIARY AMD DIVISION. IN TM CASE OF EACH U.S. SUBSIDIARY AND DIVISION. TAX SEMEFITS FOR OPERATING LOSSES, IF ANY, ARE RECOGNIZED CURRENTLY. 13) EXCLUDES A SI00 PROVISION FOR ASSESTOS-RELATEO INSURANCE COVERAGE. (4) EXCLUDES A PROVISION OF *140 RELATING TO A FUMED SILICA PLANT IN RElfllUI. </Tat>J*> F-27 OPERATING INCOME AFTER TAXE5(1><2) 1993(3) 1002 1991 <c> <> <C> <141 128 <124 0? <120 78 MO 216 196 44 45(4) 6? 14 14 S 60 79 97 40 36 37 -- * 40 3G 37 16 16 3*2 <362 '** 14 14 645 16 061 .... 9 9 666 10 <346 DOCUMENT 1 PAGE 57------------ (P0 2S-NM-IBM 12:25:05,110 **-**- 1P94 03:02:1*) |Syn>42*2)F0RNIO K -A 4282-C---04009c. -PTUMry B4MVG4?*?--frofils: MCE --EDOAfl COPY-------- --------cllent Document: DOCUMENT 1 <Page> <Tlbla> Captio CAPITAL EXPEWZTURCS, NET FIXEO ASSETS AND DEPRECIATION AND LEASE AMORTIZATION <1) DOLLARS IN NILLIOMS Capital Expenditure* Nat Fiaad Aisttt Depreciation and Laata Amortisation <5* OPERATING GROUP Specialtr OiMiuli...................... Mealtd Cara........................................ Siditotal............................................... Beneral Corporate........................... Total Continuing Operation*... Divaatatt Businesses...................... Ditcontinued Operation!.............. Total..................................................... 1003 c> S200 0 289 21 310 --- S310 1002 <> *200 52 262 34 3M 24 u taos 1001 <c> 3170 46 22S 4$ 270 44 133 *447 1003 <C 61,040 zn 1,326 126 1,454 * *1,464 IfiB? <c> S 97$ 221 1,106 102 1,296 4 40Q SI,706 1091 <C> * 041 205 1,146 02 1,238 213 1,107 *2,596 1093 <C *135 46 181 6 109 * *109 1002 <c> *131 38 169 8 177 46 8195 1991 C 6126 66 162 7 1*9 34 8203 OEOQftAPMXC LOCATION United Statoa and Canada............ Europe................................................... Otner Areas........................................ Subtotal.............................................. Oeeeral Corporate........................... Total ContlfMiinf Operation*... Divested Bueiaesaat....................... Discontinued Operations.............. Total..................................................... SI OS 60 26 260 21 310 .. *310 ____ *1M 00 10 262 34 2*6 24 M S3M SIS3 66 16 226 46 270 44 133 6447 __ _ S 664 351 121 1*326 12* 1,464 *1,454 Fn (1) 1892 AND AMOUNTS HAVE KEN RESTATED TO CONFORM TO T* 1003 HUESENTAt ION. /Tafcle F-2S S 767 342 97 1,106 102 1,2B* 4 406 *1,706 * 696 346 104 1,146 2 1,236 213 1,107 (2,65* *117 40 IS 161 6 in * *160 8106 49 12 169 8 177 18 6195 *107 45 10 162 7 169 34 *203 __ , -DOCUMENT 1 PME --- ------------------------------- (Pt> 78-MW. 1M4 12:25:05.NO 2SIWI-1994 03:02:11) f94NYC4282)F0Mia-K-A 4232-C---9.0309- -Pruury N4MYC4282--Profit.: .R. GRACE ------ EJX3Afl COPY----.----.---------------- Cli.nt OocUMNt: DOCUMENT 1 7at>l> c Caption* FINANCIAL SUMMARY OCULARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS 1003 1092 1001 <s <c> <C c> STATEMENT OF OPERATIONS Salas and ravanuaa................................................................. $4,408.4 $4,337.0 $4,366.5 Cost of goods sold and operating axpanaas.............. 2,506.8 2,001.$ 7,540.2 Depreciation and anortlzation........................................ 227.7 224.0 232.0 Interest aapaasa..................................................................... 81.S 90.0 115.4 Rasaarch and development espanaes............................. 133.0 130.0 128.1 Ineona fron continuing oparations before income taaas................................................... 221.2(1) 192.8(2) 334.? Provision for incoao taui............................................... 88.8 134.8 132.5 Income froa continuing oparations............................... 1$4.4 57.7 201.7 (Loss)/inco*e fra* discontinued oparations............ .Cuwlatlvt effect of accounting cKanges.................. (108.4) (162.2) (190.0) 16.9 -- Nat iwcos/Uoi)..................................................... ............. 26.0 (2*4-5) 218.6 1900 1009 <C> O 34,309.7 2,603.5 227.2 137.0 125.4 $3,820.3 2,430.7 199.4 121 .0 105.0 272.1 07.5 174.6 28.2 202.0 207.1 61.3 145.9 107 .3 253.2 financial position Currant ssatts..................... ................................................ Currant liabilities.............................................................. Properties and eguipment, nat........................................ Total ctsote.............................................................................. Tot 01 dobt.................................................................................. StiarsMldare* equity -- counon itoefc......................... Jt,873.3 1,802.6 1,454.1 8,108.8 1,708.1 1.510.2 $2,091.4 1,699.6 1,707.0 3,308.8 1,818.2 1,587.8 $1,090.0 1,622.1 2,556.2 $,007.1 2,239.4 2,017.7 $2,380.1 1,680.1 2,482.1 6,226.5 2,285.9 1,905.0 $2,166.3 1,589.1 2,220.0 5,619.1 2,015.7 1,722.9 DATA PER COMMON SHARE Earainga froa eontiaulng operation............................ .Cumulative effect of aecountiag cliange................... Earniagi/(laee)........................................................................ Dividends..................................................................................... loot valuo.................................................................................. Avaraga cannon eharee eut.tanqing (tlwu.aad.)... 8 1.48 .28 1 .40 16.16 >1,481 $ . (212) (3.28) 1.40 17.10 89,343 $ 2.31 .. 2.50 1.40 22.77 >7,238 5 2.03 2.SB 1 .40 22.14 95,579 5 1.71 .- 2-97 1.40 20.16 5,193 OTHER STATISTICS Dividands paid on cemeo* stock......... ............................ Capital oipoadxturae............................................................ % Total debt to total capital........................................ Common ftAarehoidere of record........................................ Common etock price range.................................................... .. NunPer of enployeei -- continuing operation* (thouund*)............................................. 8 127.9 $ 125.4 300.$ 308.4 52.0% 54.1% 10,358 20,880 41 1/4-34 S/S 43-32 34.0 32.8 3 122.0 $ 120.2 5 119.7 447.0 513.7 404.6 52.7% 54.4% 33.8% 21.049 23,327 26,457 40 3/4-23 3/8 33 5/8-17 39 1/8 32.9 34.2 33.2 Fn* (1) Iacludas a provuioo of S154.0 ralating to asbastas-ralatad insuranoa cavaraga. (2) Includes a provision of $140.0 ralating to a fiaaad silica plant in Balglua. </Tbla> VV -OOOJNEN7 t PAGE 59--..----------*" (PD 2S-UAR-1994 12:25: OS, 25XAA-1994 03.02: l) f94ITVC4n3|F0Ail(0-K-A_42S2-C----94D9g -Primary 84HTC4282-----Prof jl. W.R. GRACE ----- -EDGAR COPY------------------ -------------- -client Document: DOCUMENT i Pege MANAGEMENT'S 0ISCUSSION and analysis of results of operations and financial CONDITION REVIEW OF OPERATIONS OVERVIEW S1m and rtvMins Increased 0% La 1009 over 1002, excluding NiiiMIMi dimttd in 1002; including the dlvestad bualaessos, 1003 illn and rmnwt increased by 2% as compared to 1092. Salad and ravanuai lacraaaad 0% in 1002 mr 1901, excluding businesses ioM in botn years. In the third quarter of 1993, Oraca racordad a special noncash after-tai charga of 9300 Million |S47S Million prataij to railact a September i, 1993 daemon of tha U.S. Court of Appaals for tba Sacand Circuit, ahich bad tna affact of reducing Grace's iasurance coverage far aabastas property daMiga laasultt and clouts. In tna fourth guartar of 1093, Oraca reversed 9200 Million of tha after-tan provision (S31S alllion pretax) following tha Court's decision to grant Oraca' petition for a ro-aaaring concerning tha September 1, 1993 decision; trio renaming after tax provision of SIOO Million (3150 Million pretax) reflect* anticipated additional lagal expenses and ethar uncertainties related to Oraea'e asbestos lawsuits and claias. In tha third quarter of 1092, Graca closed ite Belgian fumed silica plant and racordad a one - tine provision of Siao Billion, representing the entire net booh value of the facility end certain additional axpenses. Excluding the 1993 asbestos cad 1992 fused silica charges, Incone fraa continuing operations for IN} incroasod 19%, to 3334-4 uilllon, ever 1992 (including businesses divested Is 1992). I scone fraa continuing operations decreased by 2% in 1902 as compared to 1991 (excluding tha provision relating to tna fuaad ailica plant, but Including businesses divested la both years). For all periods presented, the statement of operations has been restated to reflect the classification of certain businesses as discontinued operations, as discusssd in Note 6 to the Consolidated Financial Stateaents. SPECIALTY CHEWICALS Including the rasultn of cnaaleal businesses divested la 1992, salee and revenues decreased by n la 1999 as coopered to 1992, and operating menus after taxes (operating incone) decreased by a% for 1999 versus 1992 (excluding the 1992 provision related to tbe fused silica plant). Tba following discussion secludes sale* and revenues and spent lag incane of divested businesses and the fused silica provision referred to above. Sales and rtvsnues Increased 9% in 1093 as coapared to 1992, reflecting favorable voluae aad prlce/product Mis variances estiaeted at 9% and 2%, respectively, offset by an unfavorable currency exchange variance estimated at 5%. Voliue increeses occurred in 1993 la packaging |dus to luprovtd silos of filns and laminates), water treebeen! (reflecting tha acquisition of Latin America's largest water traataent business in the firat quarter of 1999), fluid cracking catalysts aad silica products (reflecting iuproveuente in Market share end pricing I end construction products (reflecting tha introduction of aeu concrete aduixtures and strosiger salae la waterproofing eyetens). Operating incase was flat in 1993 coapared to 1992. North American results significantly improved In 1993, as strong growth occurred in packaging, fluid cracking catalyste and silica products and construction products, due nalaly to the voluae increase! noted above. European result! far Meet product liaee were adversely affected by continuing recessionary conditioes, leading to reduced profitability; however, results for Eurepeaa fluid crocking catalysts and silica prouictt iaprovsd, primarily due ta increased veluws achieved following tha uithdrawal of certain competitors fren this market in igg2. In Asia Paelfic, favorable results wars achieved, primarily in packaging and fluid cracking catalysts and silica products. In Latin America, results were dawn, primarily due to toe costs of integrating ths operations of the now water treatment business, partially offset by favorable results in packaging. Salas increased by M in 1993 compared to 1991, excluding from botn period! the sales of chemical businesses divested in both years; sales were essentially flat including those businesses. The increase was primarily due to favorable volume, price/product mix aad foreign currency exchange variances estimated at 3%, 1% aad 1%, respectively. Volume Increases occurred in most product lines, particularly packaging and fluid cracking catalysts and silica products. Operating income for 1093 decreased #% over 1901, excluding the divested chemical businesses; operating income increased 3% Including tbose businesses. North American results far most product linos improved in 19*2, as strong gromth was exhibited in packaging and fluid cracking catalysts and silica products, nalnly duo to strong volume increases. European results were adversely affected by recessloaary conditions, landing to reduced profitability. However, favorable remits were achieved in both Asia Pacific and Latin America for most product lines. HEALTH CARE 3ales and revenue! for 1993 increased by 19% aver 1992, due ta iacreasas of 19%, 39% and 11%, respectively, in kidney dialysis services, hone health care and aedical products operations (including laboratory services). 1993 results tor dialysis services and name health car# include the results of Homo Intensive Cara, Inc., acquired in June 1993, as wall as a nuaber af saaller acquisitions during the year. The nuaber of centers providing dialysis and related services increased 20%, from 410 at ysar-and 1993 to SOI at yaar-end 1993 (4T1 in tba U.s. and Puerto Rico, 33 in Portugal, 4 In Spain, 3 la tha Czech Republic and 1 in Argentina). F-30 * DOCUMENT 1 PMC 80-------*------ (PO 3S-HM-19M 12:25:05,110 25 MM-1964 03:02:11) 194MfC42e21F0RB10-K A_42I2-C----940999> -Primer/ 94NYC42D2--Prof ils: H.R. UUCt EDGAR COPY------.. ...--Client Document: DOCUMENT 1 *P(i> Operating income In 10*3 increased by 35% ever 1M2. TM 1093 results for ell health cor* businesses benefited from UprmaMti in coot controls, operating fficl**ci*s and/or capacity utilization, partially offsat by tha costs of improving and axpnadlng quality asourooc* systems for nodical products asnufaeturinp (so* boioa far further discussion). in addition, results for 1002 included costs related to previously reported loaq-tora Incentive arranoeaants srith certain health core executives. It is taicloar at this tin* whether and to what extent any of the currently proposed reform in u.S. health car* will affect Grace's health care oparatlona. lion*ear, based on ita knowledge and understanding of the health cart industry in general end of othsr providers of kidney dialysis and infusion therapy, as ee 11 as an publicly available information, Oraca ballavos that ita health earn oparatlona ara among tho aost cost-efficient in the industry. Sales and revenues or hsalth ear* operations increased by 20%, to 51.3 billion, in 1992 aa coapared ta 1091, ratlooting laprovemarts of 19%, ig\ end 25%, respectively, m kidney dialysis services, hone health car* and nodical products operations. Operating incoa* for 1902 increased by 27% over 1991, reflecting the continued growth of til health earn businesses, as mil as iaprovsaents in spnratlag officleacles and capacity utilization. In 1993, tht U.S. Food and brug Adainistration (FM) lmsuad Import alerts with respect to (1) hemodialysis bloodlines manufactured at tha plant of National Nodical Care, lac. (NNC), Greco's principal health care subsidiary, located in Reyman, Mexico and |2) Mmodlalyzeri manufactured in INSC'i Dublin, Inland facility. Products subject to FM Import alsrts bay not oatar tha U.S. until the FDA approves the quality assurance system of the facility at ablch much products ara manufactured. In January 1PP4, WC entered into a consent decree providing for the rasinsption of importation of bloodlines and heaodialyznrn following certification by SMC that tha rwlawant facility ceaplles with FDA regulations and successful completion ar aa FDA inspection to verify such compliance. In aecoraanea with tha consent decree, NNC certified coopliaises to the FDA with respect ta tha Neynoss, Mexico facility in January 1994, and the FDA lifted the bloodline inport alart in March 1994 fallowing a thorough roinapoctlon by the FDA and a coaaltnent by NMC to finish certain studies by May 1994 and, in the Interim, ta perform additional product tasting. Certification of compliance at tha Oublin, Ireland facility is anticipated in the second quarter of 1994. Tha consent decree also requires NMC to certify aad aalntain conpliaaca with applicable FM device manufacturing laws and regulations at all of Its U.S. manufacturing facilities. NMC has conducted a full review mf its facilities and upgraded, as aeeassary, all of its quality assurance systems. No fines or penalties were iaposed on NMC as a result of any of tha FDA's actions relating to tha import alerts or in connectIon with tha consent decree. Neither the import alerts nor previously reported recalls of certain NMC products ara expected to haw* a tutorial affect on Grace's results or operations or flaeiieial position. STATEICNT OF OPERATIONS OTHER INCOME See Kota 4 ta tha Consolidated Financial Ststaments far Information relating to ether incoa*. INTEREST EXPENSE Interest aspens* decreased by S% la 1903 versus 1992, primarily due to lower debt levels aad lower interest ratas, tha use of financial instruaants (tee Not* 10 to the Consolidated Financial Stateaants) and the replacement of certain fixed-rate debt with lower-coat floating-rat* borraaingt, partially nffaat by a reduction in interest allocated to discontinued operations and interest cspitalited. See `Financial Condition: Liquidity and Capital Resource*" below for inlornatinn on borrowings. RESEARCH AND DEVELOPMENT EXPENSES Nosearch and deveisment (RAO) spending increased py 4% ia 1993 verses 1992. Ml spending is now primarily directed toward oraca'a core specialty chemicals and health car* business**. INCOME TAXES The effective tea rata aas 39.2% in 1993 versus 43.1% in 1992, before giving vffect to the 1992 provision of CS1.D Million for a valuation allowance for deferred tax ssseti Tn* lower effective tax rata in 1993 resulted primarily from reductions in certain foreign tax rata* and higher utilization of ratearch and development and foreign tax credits, partially offset by tas costs associated with repatriating ta the U.S. earnings of foreign subsidiaries. The valuation nllseanc* far 1993 and 1992 raiata* to tho uncertainty as ta the realization of certain deferred tax assats, including U.S. tax credit carryforwards, state and local net operating loss carryforwards and net deferred tas assats, and net operating lass carryforwards in certain foreign jurisdictions. Rased upon anticipated future results, tho Company la* concluded, after consideration of tha valuation allowance, that it is wore likaly than not that the net deferred tax assat balance mill bo realized. In the third quarter of 1993, Oraca recorded tha offsets ef tha Omnibus Budget Reconciliation Act of 1903 (OBRA), which ms enacted in Augutt 1993. Among ether things, OGRA increased tha highest U.S. Federal corporate tas rnt* to 35%, alloctwo January 1, 1993. Homwcr, aeltner this increase in the U.S. Federal corporate tax rat* (fro* 34%), nor tho other previsions ef OGRA, bed a material affact on draco's results of operations. F-31 1 -OOCUENT 1 PAGE <1---------- *--------~ (PD 29-MAR.1t94 17:26:05,10 26-MU' 1004 03:02:1*1 (94MYC42921F0RN1 OK-*42*2-0--040004- -Primary 94NVG4292--Profile: Tr.R. GRACE COGA* COPY-.-"-**" '-"-"--Client Document: OOCUUCNT 1 Pag* Im 1002 mutiw tn rot* ineruul to 43.is (before th* ibm p-nuioi tar the valuation allowance) at coshered with 30.OS in 1001, laroaly due ta th* additional eoata of repatriating to tna 0.3. a Manor laval of aarntne* of foraian subsidiaries and an incraaaa in atata incona tnai. Saa Hot a 3 to tka Conaolldatad Financial Stataaanta for furthar infamatlon on incest taxaa. LOSS FROM DISCONTINUED OPERATIONS In 1003, Oraca rattatad lta financial atatasanta ta raflact tka claaalfication of certain businesses at discontinued oparatlana. Saa Hota 6 to tka Cansolidatad Financial Statanantt for furtkar inforaatioa. FINANCIAL 00N0ITI0N LIQUIDITY AND CAPITAL RESOURCES During 1003, tka not pretax catk flow provided by Oraca's continuing oparating activatlat nat 3301.0 pillion vertut 3303.0 alllion in 1002, pnaarily due to tka uae of 344.1 alllion of not catk to rapurckata account! receivable la 1003, at coopered to the receipt of 303.3 aillioa of nat proceed! froa the tala af account! receivable in 1002, and a nat catk outflaa of 3103.1 alllion relating to aebaxtoe in 1003 (tea baloa far furtkar diicuaiioa), coppered with a net each outflaa of $70.3 aiIlian in 1002. AIM, la 1003 catk flea provided by operating activitiee include* 307.9 aillioa in proceed! froa tka aettlaaeat of intaraet rata hedge agraaaantt. After giving affect to dlKontinuad operation! and payaantt of laeoaa taaea, tka net catk provided by oparating activitiee aaa $243.1 ailUon In 1003. Inventing activities used $131.0 ailline af case in 1003, largely reflecting capital expenditures and business acqulsltiane and invastaante, prinertly la tna health ears mad aster treatment businesses. During 1003, Oraca scQuired 100% of the outstanding stock of boas Intensive Cara, lac. for approximately $120 alllion (inclusive of related caste). These investing ectivltias vers offset by nat proceeds of $434.3 aillioa froa divestments (asinly those af Oraca Energy's all and gas operations). Maangeaent anticipates that the laval ef capital eapeadltores in 10P4 will increase to approximately $330 alllion as coopered to the 3300.S Billion of capital spending In 1093. Capital apendlnt la expected to be concentrated on Oraca'a core kualnessas. Nat caea used far financing activities in 1993 aaa $105.9 aillion, primarily reflecting the payment af 9129.4 million af dividend!. Tatal debt aaa approximately 31.7 billion nt year-end 1993, a decrease af $113.1 million from year-end 1992. Grace's tatal debt as a percentage ef total capital (debt ratio) decreased tram $4.1% at year-end 1092 ta $2.0% at year -end 1003, primarily as a result of tna reduction in total debt. In January 1093, Grace to1C $390 aillioa principal anount of 7.4% Notes Hue 2000, The net proceeds from tka sale of these Notes vara used to repay coawrciel paper and bank borromlngs. In tna third quarter of 1993, Grace completed the redemption la full of its outstanding Llguid Yield Option Notaa duo 2003 (LYONS) aad 6 l/a% Convertible Subordinate Debentures Dm 2002. Of the $1,012.5 aillioa principal amount at maturity of LYONS outtiaadiag, approximately 31% (3309.3 million) uae canvortad into 2.3 allllca snares at common stock; the remaining LYONa (3702.9 billion) aara redeemed for approximately 3259 Billion la cask, tuketemtially all ef the $150 million principal amount of the 0 1/4% Convertible Debentures due 2002 outstanding mmdiately prior te redemption uas redeemed for catk (equal to tka principal amount outstanding) Grace expects te aetiafy its 1994 cask requirements froa the following sources: (1) funds generated by operations, (2) proceed* from the Mies of businesses end (3) financings. Such financings could include new bcrrowiiws, the availability and coat ef ablch mill depend upon general economic aad markat condition*. ASBESTOS-RELATED NATTERS At reparted la Nets 2 te the Consolidated Financial Stctessents, Grace Is a defendant in lawsuits relating te previously said asbestos-containing products. In 1003, Grace paid $103.1 million ia connection with the defense and disposition of property damage and personal injury litigation related to asbestos, net ef amounts recsived in 1003 free settlements with certain of Grace's insurance csrrlere. as mare fully discussed above in 'Review af Operations: Overview,' Grace recorded a nat nemcesh emerge of $169 Billion (pretax) in 1993 te reflect anticipated additional legal expenses aad ether uncertainties related te Grace's asbestos lm>suits and cl*1m. The balance sheet it year-end 1993 include* a receivable due froa insurance carrier*, aub)*ct to litigation, ef S9A2.3 Billion. Grace fcat alee recarded a receivable ef epprexiMtely $114 ex11Ion for amounts ta be received pursuant to settlement agremeaats previously entered into Bite certain insurance carrier*. Mill* Oreee cannot precisely astlaat* tk* Mounts to be paid la 1904 ia respect ef asbestos-related Lawsuit* aad claims, Oraca expects that it mill be r*%aired to expend approximately 350 million is 1394 tn defend end dispose of suck lawsuits and claims (after giving effect to payments te be received from certain insurance carrier*, at discaseed above and in Not* 2 ta the Consolidated Financial StateMnta). A* iedictted therein, tk* amounts reflected in th* Consclieated Financial Statements witn respect to the probable coat ef disposing of pending sibestos lawsuits and clalM and probable recoveries from insurance carriers represent astiaates; neither th* outcomes of such lawsuits aad claim! nor tn* outcoams of Grace's continuing litigations with certain of its insurance earner* can b* predicted with certalaty. F-32 V* -DOCUMENT 1 PAOE 82----......---- (Po M-|w||.1SM 12:25:08,110 TS-NW-IOei 03:02:18) (MNVC42m2|F0M10 K.A 42S2-C----840809- -Prianry 04NTC4282---Profile: W.R. BRACE ---EOCKW COPY--***--*------CUant Document: OOCUNENT 1 <Page> ENVTMMENTAl NATTERS Oraee incur* co>ts related to onvironaontal protection duo to loos and rooulations, Oraeo's coaaltaant to industry initiatives sued as Responsible Care -R- (tne Cneaical Nenufacturars Association program) and its oun internal standards. Norlduida expanses of COatinuiag operations related to the operation and aukntanance of anvironaenta] facilities end disposal of hsiardaus and nonsaiardous aastes totalled 845 aillisn, ISO aillion and 838 Billion in 1083, 1802 and 1881, respectively.In addition, norldaida capital expenditures for continuing operations relating to eavirenaentel protection in logs totalled 820 Billion, coopered with 818 Billion and 817 Billion in 1082 and 1881, respectively. Oraea has also incurred coats to reaadlate previously contaaiaated sites. Triase costs uere 844 Billion, 835 aillion and 818 Billion la 1003, 1802 and 1801, respectively. Tnose aaounta vers charged against previously established reserves for estinatsd expenses for environmental spendlag, which ears identified and charged to iacoae in prior years. Braes accrues for anticipated costs associated alth investigatory and reaediation efforts in accordance Bits Stateaeat of Financial Accounting Standards Me. 5, 'Accounting for Contingencies,' which governs probability and the ability to reasonably astinata future costs. During 1803, 1002 and 1091, there were periodic provisions recorded far ervirormentel and plant closure axpansas, ohlch Include the costs of future investigatory and reaediation activities, at year-end 1883, Braca'e accruals far anvlrooacntal ronadiation totalled approximately 8150 Billion. These reserves do act talte into account any discounting for future expenditures or possible future Insurance recoveries. The liabilities arc reassessed v*enever eavironaartal eircuwtancas bacon# better defined and/or ronadiation efforts and thair coats can bo batter astlaated. Annual eevironaeatal-rotated cash outlays are expected to total 844 aillion In 1884 and 835 Billion in 1885. Expandlturos have boon funded fron internal sources of cash and arc aot axpactad to have a slgalflcant affect on liquidity. F-33 % MOMENT 1 PAGE S3-------------------- --- -------(TO 2A-MAA- 1004 12:25:05,110 23.MAR- 1W4 15:05:17) ( 4NVC4282|SCH-Il_4202-C-------040900- FrInary 4(YC<2*2"'4VoT111: M.R. MACE *--EOOAR COPY--"""-----'--"--Cllint Docunaat: DOCUMENT I SOCDULE II N. R. GRACE A CO. AND SUBSIDIARIES AMOUNTS RECEIVABLE FROM OFFICERS AMD EtfEOfTEES EXCEEDING $103,000* (dollar aaonti la tAouiaaaa) <Tbla <OAtiin> For tha Vaar 1903 Be lone* At Nfiitniing of period S c> Amount .................................... Nuatoar of aplRiiti. . . $2,059 9 *cnptlan> Additions <c> $132 Deductions Mounts collected vrittM off <c> <c> 9251 For tha vaar 1002 Balanc* At end of period*' Currsnt Not Current*** <c> $ 15 1 <c> *2,*20 * Balaaea at beginning of parlod <S 4> Aount .................................... $?,bis nuatoar of anpltoys*i. . . 11 Additions <> MOI Daductiaas Mount t collected Mounts written off <> < S212 $450 BaliM* at nd of period** Currant o $SM 4 Not Current*** <> $2,450 7 For tna Vaar 1001 Balanea at baolnnine of parlod s <c* Amount .................................... *4,022 Nuatoar of Mployoet. . . 1? Additions C Daductions Mounts collected Mounts Witten off <c> -c> $75 $450 Fn> Ta Majority of too racaivatolat rtfraMt ralocatlon loan* to aaployaa*. Additional inforaation coaearning cartain of ttotsa loan* la contained la tha Proxy Stataawnt for tna fnapsny* 1004 Annual Masting. Tan Oalaacas nay include Mti currant and non-currant portions dua fren an individual aaployaa. Tharafora, tka total auRtoar of aaployaat ooino to*lanesa at tka and of a parlod nay rsflact dlffaraat portions of tna saaw aaployaa's indabtadnasa. Raprasants anaunts dua nora tkan ana yaar aftar tka and of tka parlod. STatol* FM Balance at ond of period** Currant <c> $777 7 Not Current*** *C> $2,036 7 .oocutf* I tott U. Prvmry MTC4202-. -- PD 28-8MM804 12:28:05,1 2* *M-i94 02:17;U| l84*fU3t21&Ol.ir_?ft2-C- It: IMCE -KHM ar**"- .!------ciut OocaMtt: r. I. M 4 CC. 4ND 9UMS1MIO PWrr, 7UMT MB COUl'tKNt <i nUlioo< for tf fair IMA <laftl* Ottar dwifit Mt|a*CT) LMd.................................................. ftuildJfl*. ... tfacairory. oauipoant and otMr . Proiacts ytdir coaatruetion. . . Otiooco t Oogsontiif of partaf ft 90.2 801.3 2.188.1 2S1. 8 9.211.3 AOlitiM at IO*t O 8 .9 3T.J ior.1 174.4 o aoo.i Ml fro onto C ft MV <.> (84.2) (9) I (08 0) ippllcobio to IVtiMIMI oaoulratf(o) <e S 3.2 3.4 13.8 11.7 8 31.2 taoUnaoli to fiietatlawl spirttiflit(k| <* V>4> <101.9* 1901.3* <90.2* 0 1004.7* Otclataiftea*iens (c) C S 8.2 12.0 203.7 (193.01 ft 47.0 Ckjrroaty ae)aaiMatt O ft () (M) 13ft 2* ( ) him) alone* at and if oariod O ft til 36.1 l M2.9 14? * 99.777.1 Fer th* Tmt IMI Otoar ew|i - M4(t<fcjct) Claasmcaiiot <9> Loot ...... ........................ natural rtaoorco prapir^ joo. . . lu&ldJiio*.................... VacHtMry, oa*.0*ant 464 ot*ar . Fro|octft i0ar coftsfnjci in. . . ftalarxo at ngiAAing or oorioo < < 89.4 193 1 127 A 2.881.2 332.8 a.oci.2 MOltlam at coat < 8 1.8 ft.O 37.8 00.0 2*4.0 $300.4 ROUT#- ipplicMla ta eiipoaoift M1UBIMI (> AOOUcaOla M UmnUiwI ooorU4M(8* mamir* aati*na <di c 8 (1.8) (. 8) 102.2V .......... / 0(10.7) <* c 8 <1.11 f (8.0) <139.0) <20.ft} IS3.0) 1140.7) (43.0) 122.8) . (3.0) 0(184 1) 0(1,127.0) *C ft 8.4 19.0) 81.1 107.1 (833.7) 0(188.8) Curroncy 8alanco od)ut at ond OWtl of aoriod O * M i) (.1) (25.0) (OB.ft) (3.#) 8(123.2) ft 98.9 001 3 2.180.1 331.4 03.2*1.0 for tha 7tor lit- fUor atar8** odd(OoOaei) Claaalfleatior RiIjmi at ftdditlaaa bogiaaiftt at Ortiro- of parlor (Mt onto ftpplleatola to dfaaaaalft of boil- nasaat () ftpplleablt 70 bwaiMtiM acartrad (a) Daclaaalticatiana (i) brrtftcv adluataanti ftolanco at and of pariaa S* <C load ........................................... . ft 72 9 latvrai ratourea proparriit. . 852. S OUOlOlft....................................... Ml anMlnory, ipjgonit and otnor 9,011.2 irojaiti wrtar conatfucuan. . 917.9 84,008.3 O 0 1.0 a.o 30.7 129.0 308.8 447.0 <fit> o * (1.41 (20.8) (*7.3) (1.1* (.1) O 0 (04) (92.8) (092.7) (- *) 8(180.9) <>) C* 0 80.8 .4 8.1 1.4 8 01. 4> 1 .2 70.9 10.0 103.4 (544.0) S 31.1 c* r 0 i .*> (4.0) <1'*3) .7 <* S 8S.4 123.1 822 0 c.aoft-2 392.ft * <1ft.) 81,0013 ....... .> U* Roto 1 t Qract't CftnaoUdalad rinaacut ItatMarti in tt* Financial Supp)Mni to trtt Aapcrt. frl ** to flntt t comoiiaatoo miwcui nitmiu i tot Fumai tappiotoflc to \nu Mpert. ;c) tocluoao tm rapurattM or corral* aum iiduaad u a fut year itia-Uwatok FtmeUai. 1*1 I*)atM I pravwta* raining u araw1! OolftUa fmad iUIm atott; at* Mott to Oraat'a Sooaolldatod FimmUI Btatnanta km tlaa tiiiNlal lonrTaaaat to tua Niatt. i> FMjMrOjf rof toeta tfen taMMtitrttaa of prortaurty caaaalttiM lun.attrlai tMt ora am bolag oeemstod far at 8&MtftaaM aparotloaa. M tN MMOlltttiia of auMldioriai arorioutl) aocooatad for fey tha tfvltf MtlM. </TaOiO oagrocionoo m loo** NMnuttm um In vita of tha vtriaty of propartiaa nod oaaraciatim aoo laato anortitatloa ratot, It it not proatlooOlt to tot fort* ottaiiaO ratoa. Too aoaraaa aoaraoiatioo aoo loot* ooirtlaartoa ratia oo a aonaatliatod feiaU for 100ft, 1000 on# I0M anno oo fafe!o CapU0* <$ luLidlOflft.............. ............................................ Mastiioary, muipoana ora) nor.................. /loai 1083 c* 1102 <(> 4.f\ ft.O 1091 < 4.89 7.9 f-38 > -DOCUMENT 1 PAOE 6S---- (PO 26-MMt-fgg. 1J:25:05,MD 25-MAII-1BP4 03:03:02) [MMYC4262]SCH-V1 4ZB2C--**-.--940999- .Prieary S4NYC4262>-'Profile: M R. OMCC *---tOOSfl COPY-----"------------Client Oocuaint: OOCUftNT l *P*g socouu vx *. R. GRACE 1 00. AMD SUBSIDIMICS accumulated depreciation, depletion amd AMORTIZATION OF PROPERTY, PLANT AM) EQUIPMENT (in MiUlont) <Caption> Far IU Yrar 1903 Clastlficatioa <s* Land.......................................................... Buildings................................................. Machinery, equipment and other . Balance at beginning of period < 6 1.3 306.6 1,276.2 S 1.663.1 othir ctiangas - ldd(da4vct) Addition! charged to cost! end upturn Retirebents ^pllcablt to discontinued operatloos(a|i Currency Reclaaaifi- adjust- cations (0) nonts Bo 1once at one of ptriM <c S .1 32.2 156.0 C* - S (6.5) (R9.5) <C> * (.> <73.t) <321.2) <c> $ (.1) 1.2 60.1 <C S (4.3) (22.0) <> 6 .7 254.1 1,068.a 6 109.2 3 <7R.0 6(304.9) $ SI .2 S (26.) 61,323.7 For tlM Voar 1*92 Classified ion S Uond ..... ............................... Natural rtiourca prsptrtiis. . . . Buildings............................................ Machinery, equipment and otnnr . . Balance at Peginning of period <c> 475.6 t.oso.a 6 2,450.1 Additions charged to ousts end ActIreexpenses mti Appli cable to disposals of ouslMsses(c) <c> 6 .1 c* C> * <.t> 37.9 203.4 <6.S) 6 (6-6) (S#.4) (67.1) 6 241.4 3 (65.0) 6 (IDE.6) tner cnanpot - odd (Ooduct) Applicable te discontinued operatlon*<a) O 6 (476.6) (22.1) (334.4) S (632.1) Currency Balance Reclatsif i adjust at end eetions(d) bents ef period <C> $ .4 .3 3.8 (4S.) .c> 6 (.3) (6.S) (52.3) <C S 1.3 306.6 1,275.2 6 (42.1) 6 (62.3) 31.583.1 For the Veer 1691 Classification <$> Land . . ............................................. Noturol resource properties. . . Buildings. ............................... .... . Machinery, epulpbent and oilier . . . Balance at begum in, of period <c> 42S.6 1.SS1.1 S 2,444.1 Other chants - add (deduct) Additions charged to costs and Retire expenses ment. <o 6 .1 36.9 40.9 222.3 c 3 (20.2) <.) (74.3) Appliabls to disposals ef hullnasses(c) C 6 (.3) (34-7) (1SS.2) Reclassiflcations(e) o % 33.3 (6.1) (16.9) Currency Balance adjust- at end uents of period <c 6 (2.0) (4.2) c* S .9 475.6 312.6 1,660.6 6 300.2 6(100.1) 6(160.2) $ 8.3 6 K.2) *2,450.1 <Fn. (<) Soo Koto 0 to (trace's Censelldstsd Financial Statsments in the Financial Supplement to taia Report. (>) incluOo* tho ropurcRaao of certain auata InclMOaO in a prior pear sale-leaseback tranoaction. (c) Sac Note 3 to Oraco't Consolidated Financial Statoawnts in tno Financial Supplement to tnia Report. <d) Include! a proviaion relatina to Brace's Balgtan fumed ailica Plant; aee Mote a to Grace1a Conaolldated Financial Statementa In tie Financial Suppleoeat to tkia Report. () Primarily reflects tie deconsolidation of previously consolidated subsidiaries tRat are aee being accounted for aa discontinued operatlens, and tbe consolidation of aubaldlarlaa previously accountsd far by the equity aathed. /Table* F-36 1 oaomrn ^ wee oi----(R> a *9.14*4 ia::ts, a-**>* is:ii:2i f*irrc4apnQ<.wii <aa.^>.* +*lM*ry MaVC42eM^OtlJ: .*. OMU. IBQM B89-------- KUm fiMMIt; JOQWKt i O. R CJUCt & CO Ml XDlJffS$ VUUAriQN MC OALlfVlM ACCOUNTS NO KKKVtf 111 SCHEDULE VIlJ rT!Dk Cptla For tM T#*r ij DlKMptlM cS> roluatioo a*0 ounllt>in8 acMuata aaouctoc trsu utiu: AtlWWOW for trnCOfc lO KMBitl rvctivOia .... NOiritUl of 4Jvo*tnC WlMMIt..................................... Iteforrod ti hum valuation tilwawi. . ... lotar-vos: Firtlp Mploroa tnnnfit ebUtatlem*............................. DUcmliutd ip*rnm........................................................ /Tat la* For tfW loaf 1902 T40la APdltinna ttfaduction*) Cnirpne femlanca icrodltad) to M|irair>| coat* aM of panol OMIll Ottar tat'** laiiau at m of porloe *e> * <> c> a it.a t or. 1 SOI a 142.9 0 1.1 0 1 111.2 t 111 1 s *( l> i m. 9 13.4 1 144.? 0 11.2 HIM) <* .11 1 S 04.4 1 132.1 naaitiMt (Caductiona ] Oitcrjptiw Cieroaa talarco (eradLiad; ta boaicMng neat* ond of Hfiat aipaiMa Ot tar not*** *0* '* valuation mo toimmi Oceania ooaoctao rrm acaata: AUuaMia lor onto* H account* rotaivaol*................ J <C Ml. 0 o Mt. <c* 1141.71 laIans* at ond of tan* i.3 Oaairitiao of dkvaatod Ihuami....................... . Dtfarrod tas natal* valuation allawnea**....................... 0201 .0 at 4 (*) 111.4 mi a.a tia.o 0143.1 ftaaarvis: Faroioa wployot tannflt otiioatlaM*....................... DlteoAtlMid operation*........................................................ i.'Taoit* rtaOla* <C*frUM far tN ># 1tf 1073 ora. 7 018.1 070.0 SM.4 S-- 1144.7 Oaoenpiian * valuation an owilifriRg account* Muttl trm Manta: . AMammm far mtu account* rncofnWl* Addition. fdaduetioii} CNnad ftaianen (crtdtttd) to oaoianmg potto art of period oiponaaa ft tar 00T* * ftalttca at one of fonoe <* 00* t t42.r SIW.O) 041.0 Snaritlat of Hwim tuiMtaii..................................... star 0** 020.3 0201.0 RoMrvta: Paraifa Nfliyn Maorit onl!otiom*......................... Qiwflilvn4 opnrot ion*...................................................... fn? 0110 7 Ml * fcBMIWU lJal)7 HMltK MRtNM MNflt tll|ltlMt, fTtMTily piMtW ' tooHm, 'ilatiai t draei'i earatlMt Jut Umw. * flfactiva January 1. 10Q, irm adaptad ItatMMt af ruiaeu) acewntino Itoidor* no. in, Accotrtina tor tacaoa Txaa. Friif yurt tort not raatatad lor till adoption, CMUtl Of INltlNI M MUCtlM ippllUUl to I611MIUI lOtuirtl, oipwili or MittwiHi, mo Mt rit*oTfa, laraiin mttmkt irmkU, McUulUtoUaM <l*clo(l"9 tin PcnioUHUm of own roUiirt to tiitoMlMiN and UmUmMi ottior OlnWiti. <fTOIl> Far 11. 0(19.1) *() H2.1 074.7 1 \i `> DOCMKMT 1 Mfi* ----------------- --------------- IK) a-IM'iaM 12:26:OS,MD ge-HAR-IMe 02:17:37) |*4KYC42?|SCH-IX (MI C----------------- -Prusarr 04#rrCX72---Prof lie: B.R. GRICE --..FOGAF COPY-.----"-'---"-"--Client Document: DOCIUENT i Pege SCHEDULE IX k. R. GRACE A CO. AMO SURSIDIARIES SHORT-TERM aORROHNOS (dollar anoints in alllions) Teble .Caption* Salaries at and s* period ovarag* lntrtt rati at and of pariod bexinue amount outstanding during periodic) Avorsgo Mount outstanding during poriod<d) avtrag* inttrost rat* during pariod(o) S> For tils yssr IBM <C> Coanorcial papsr and bank borronlngs (a)........................... S *77.S Otner snort-tons borroulngt (b)............................................ 366 1 <C> O s.e% 7.3 $ 779.3 356.1 C % 631.7 273.9 *c 4.1% 7.6 For tbs ysar 1BS2 Coassrclal papar and bank borrowings (a)........................... S Otbar snort-torn borrowings (b)............................................ 70S.* 21S.4 4.3% 3.1 9 1,194.9 467.2 9 1,03*.4 337.3 5.2% 10.7 Far tbs ysar 1M1 Coarssrclal papor sod bank barronlnss (a)........................... S 1,168.3 Oth#r snort-tom borrowings (b)........................... 300.0 5.9% 9.6 $ 1.244.4 370.$ 9 1,162.4 340.8 7.2% 11.2 |a) Roproaonts eonnoreial papor and bonk borrowings. Prior to Soptoabsr 1M2, all onounts, although short-torn in nature, wars classified as long-tern borrowings because of the availability of long-tern financing under a prior revolving eradlt ogrsoasnt and Grace's intent to refinance tnese borrowings on a long-tom basis. In accordance witli a IBM revolving credit agrgeaoat, only a portion of tbesa borrowings nay bo classified as long-tom; see Mote B to Grace's Consolidated Financial Statements la the Financial Supploaeat to this Report. (b| Represents various linos of credit and aisaallaneous borrowings, priaarily of non-U.S. subsidiaries. (c) Represents the oasimias outstanding at any guarter-and during the year. (d) Average amount outstanding is conputed by dividing by four the total of the principal balances outstanding at the end of each guarter. (a) Weighted average interest rate is conputed by dividing the interest expense on short-tom borrowings incurred during the year by average short-tern borrowings outstanding. */Table F-3S I -OOCUNEIfl 1 MCE 6B------- -- Primary 94WTC4282--Profil: <P9> - jpg 0RACE '2:25:05,RD 23-MAR-1984 15:48:37) | #4*704282 )SCH-X_422-C *-----940999----EDGAR COPY------ -- ..........Cllnt Doamnt : DOCUMENT i schedule x a. R. BRACE a CO. AMD SUBSIDIARIES suppleicntary income statement information (In ailliont) -Caption- ItM <s Uaintaaanca and rapairt........................... </Tabla> CharQad to eosta and avpanaas Yaars andad Daca^ar 31, 1993 1992 1991 <c> $ 135-9 <c> S 153.1 <> 3 151.1 F-30 W > OOCU^tfl 1 PAGE |PO 26*IMft-1964 12:25:06,m 2S-HA*`194 01:44:00) |94NYC42*2|EXhIX_4?B2C----940999* PriMry 4APrC4202*-Prrjil9: I.H. GRACE *HDGAff COPY--*"Client Oocuitnt: DOCUMENT i <Pjg4> Ekftjbit 11 *. 6. GRACE A CD. AND SUBSIDIARIES ftCIGHTEO AVERAGE NUIBER Of SHARES AND EARN! NOS USEO IN PER SHAPE aMPUTATIONS Tn* v*igfttod svorag* nuabor of iftor#* of Pompci Stock outstanding soro as follovs: Tabl#> Caption <s .ight.d average nuaMr of share* of Cwnn Stock Outataading................................................................................................................... Conversion of convertible debt abligitiona .................................................................. Additional dliutiv* affect of outataading option* (a* determined by tna application of tba troaaury ttock nethod)............................................................................................................................ Weighted airaragd nuabar of shares of Comon Stock outstanding assuming full dilution .............................................................. 1993 <c 91,461 46 (In thousands) 1002 c 9,643 1991 <C> 7,236 6,456 6S0 * 1,150 02.1S7 B9,&43 96,851 Incoat/Uoii) used ia tho coapwtation of earning* par share wars as follows: <Captioi> <s Nat Income/(loss)............................................................................................................................ Dividends paid on proforrod stocks .................................................................................... Income/(loss) used in per shard computation of earnings .................................... Interast, net of tas, on convertible debt obligations............................................. Incas*/(loss) used in per share eonpcitatlon of earning* assuting full dilution.............................................................. .... (in alllions, except por share) 1993 <c> S 26.0 1092 <c S (294.S| 1001 <c> S 216.6 (.5) (5) (.5) 2S.5 (295.0) - 211.1 14.4 6 25.5 S (205.0) 8 232.8 Earnings/(loss) per share.......................................................................................................... 6 0.2S Earrings par share assuting full dilution....................................................................... S 0.26 <Fn * 7bo offoet of tho convertlblo Mcuritioi and outstanding options would bo anti-dilutive. Therefor*, tnoy aro not shoain. </Ietle S (3.20) .4 8 2.50 S 2.40 F-40 -DOCUMENT 1 PAGE 70------------ (PC n-MAR-1894 12:25:05,10 2S-MR-1884 01 :44:00) |84irrC42a2)EXHlN0X_42(? c--B40989. PrUury 9PIYC42M--Proftie; W.R. GRACE --.(DOM copy------------------- ------------Client Dscunent: DOCUMENT i Table> .Caption. . R. GRACE A CO. AMO SUBSIDIARIES COMPUTATION Of RATIO Of EARNIH3S TO FIXED CHARGES AND COUBIIED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS (la alllloas bbcopt rattoi) (Unaudited) Exhibit 12 1003 () Vobtb Ended DKMbir 31, (to) 1002 (d) 1001 Nat lncoM from cMtifluiag optritloni.................................... Add (dtduct): Provilloo for lncoM tsioa..................................................... lncaae tneee of S0\-earned ceapanias ............................... Hlnorlty Interest in Incone of **)ority-oemed HAtldiarlai................................................. Equity In unranltted earnings of lass than sovawied ccnpaaiee............................................. Interest expense. Including anortlaatlon of eapitiliiad iatarait.......................................................... Aaortlzatlon 01 debt discount and expense .................. Extineted enount af rantal expense dsnsd to rtprtittt the interest factor....................... Ineoae as adjust**............................... -....................................... 5134.4 86.ft .1 (1.3) 118.8 4.3 31.8 8385.4 $ 57.7 134.8 2.1 - (1-8) 152.9 1.5 26.8 8373.8 8201.7 132.5 1.5 (2.5) 198.4 2.1 21.7 8555.4 8174.6 7.5 1.9 1.2 (2.1) 235.7 1 .9 21 .0 8531.7 1089 .8145.9 61.3 1-2 .6 (.31 224.8 1.9 16.1 8454.5 Ccnoined fixed chxrgee and preferred stock dividends: Interest expel**. including capitalized Interest ......................................................................................... Anortliatinn of debt discount and expense .................. Eitwtid tuunt of rental expense deened to represent the Interest factor...................... siia.fi 4.3 21 .3 Filed charges......................................................................................... Preferred stock dividend requirennnts m)........................... 145.5 .9 Combined fixed charges end preferred stock dividends ............................................................................ 8148.4 318ft.S 1.S 25.6 184.8 .8 8195.S 8213.3 2-1 21.7 237.1 .8 8238.0 5244.7 1 .9 21 .0 267.5 .8 8268.4 8229.3 1.9 19.1 250.3 .7 $251.0 Ratio of earning* te fixed charges ........................... ... 2.51 1.92 2.34 1.99 1 -ft? Ratio of earnings to confelned fixed charges and preferred stock dividend* ............................................. 2.60 1.91 <En> (s) (b) (e) <d) Prtfarrd xtock dividend requlreaents, lncreesed to an anount Pepreneatiag the pretax earninae that uould he required to caver euch dividend requireneetx baaed an the affective tax rataa for the perioda preiented. Reetatad to conforn to the 1003 preaantatlon. Include! a provlaiea af 0150.0 relating to axbaetoe-related laiuranoe coverage. include! a pravlalan af *140.0 relating ta a Tuned silica plant in Be ig Slav < (Table. 2.33 1.98 1.81 f-11 DOCUMENT t PMC -------------------------------------(PD 2M-MAP1#*, Priaary 04NYC4202--Prof il: k'.R. eiUCE 2SMM-1M4 01:44:00) |04WrC422)eX)UPM)*_*22C--..--O40M9- -EDOM COPY--- Docuwac: DOCUMENT 1 Exhibit IMI "DOCUMENT 1 PACE (PD 28.ua/t-1904 12:25:05,00 2S-bAR-1b04 01:44:00) |S4MTC42*?IEXMINDX 4232 C- -----040999- -Primary 94NYC4202-"-Pretil: W.R. GRACE ....EDOAA COPY--------Cl lent Document: D0CUUEN1 1 Page W. R. ORACC A CO. Annual Aapert on Fora 10-K for the Fiscal Yoar Ended Deceafeer 31, 1003 EXHIBIT NO. EXHIBIT EXHIBIT INDEX WHERE LOCATED 3.01 3.02 4.01 4.02 4.03 4.04 Certificate of Incorporation of *. R. Oraco * Co., at aaanded Exhibit 3 tc Fern 3-K (fllad 0/0/B8) By-lawa of amended R. Oraco A Co., at Exhibit 3.3 to Foro 10-K (fllad 3/30/B3) Imfantura datod at of Septaabar 20, 1902 aaaoo W. R- Oraco A Co.-Cona., W. N. Oraca A Co. and Banders Truat Coapany Exhibit 4.3 to Fora 10-K (fllad 3/20/93) Indonturo datad at of January 23, 1S93 atMf W. R. Oraca A Co.-Conn., W. R. Graca A Co. and MationtOaak of Georgia, N.A. Exhibit 4.4 to Fora 10-K (fllad 3/20/03) Credit AgraaRaat datad at of Sapteabar 1, 1B02 among *. R. Oraca A Co., a. R. Oraca A Co.Conn, and tha Several Banks Parties tharata and Caaaical Bank, at Agent Exhibit 4,2 to Fora 3-K (fllad 0/20/02) Amended and Rastated Rights Agraaaaat dated as of June 7, 1000 bataaan W. R. Oraca A Co. and Manufacturers Hanover trust COapany Exhibit to ataaBaat on Fora 3 to Application for Registration on Fora 3-B (filed 0/10/00) Other than exhibits that ara filed herewith, all exhibits listed in this Exhibit index ara incorporated herein by reference. Exhibits indicated by an astoriak () ara tha megenent contracts and eeapensatory plans, contracts or aitanpensntt required to be filed ax exhibits to this Report. In accordance with paragraph (b) (4) (lii) of I tea 001 of Regulation S-K, certain instruments renting to long-tora debt are not being filed; W. R. Oraco A Co. ag~oes to furnish a copy of aay such lastriaasnt to the Securities and Exchange Ccaalstion upon request. DOCUMENT 1 PACE 73------------- -------------- /PD 2D-NMI-1DB4 12:23:05,NO 25-MM-1004 01:44:00) I1NYC422|xmN0X42B2-C-----------------14NM- prinary MN7C4252--Prof!!*: N.H. ORACE --ED0AR COPY-*..--------- --Doaimnt: DOCUKNT 1 <P0> EXHIBIT m. EXHIBIT WERE LOCATED 10.01 10.02 10.03 10.04 10.OS 10.06 10.07 10.00 10.00 10.10 10.11 W. 1. 9n 4 Co. Exaentlvo Salary Protection Pin, at nnM - R. Oraeo 4 Co. 1001 Stock Ikmum PIm, m anoodod V. 0. GrftC* 4 Co. 1006 Stock iMMtiN Pico, as caohdod Mf. II. Qraca 4 Co. 1060 Stock lMMtivi nil, as ncMtfl Fora* of Stock Option Apr.-anta Fora, of Mastrlctad Skara turf Aorotaantx InforNNtian Conceiting w. |. Qraca ft Co. Ineantlva Coopaniation Progran and Dafarrad Coapanaaciofi Progran W. B. Oraco 4 Co. Long-Tor* Incontlva Plan N. R. Qraca 4 Co. Mtiranaat Plan far Outaida Diraetor*, aoandad Eaplepaaat Igmaut dhtod Auguxt 7, 1QSQ Patman 1, R. Qraca 4 Co. and Josapk R. S-i|kt, Jr. Eaploymnt Apraanaat aatod aa of April 1. 1M1 Patman w. R. Oraca 4 Co.-Com. and Constantim 1. Hanpart, aa aaandad Exhibit 10(f) to For* 0-K (filod 0/0)00)* Exhibit 20(a) to Fora 10*0 (tiled 0/13/01)* Exhibit 20(b) to Fora 10-0 (filod S/13/01)* Exhibit 20(c) to Fora 10-0 (mod 0/13/01 > Exhibit 10(h) to Fora 10-K (filod 3/20/02)* Exhibit 10(1) to Fom IO-K (filed 3/2Q/D2)' Paoaa 10 iu 11 of Proxy ttatomnt (filed 4/10/03)* Exhibit 16(1) to Fora 10-K (filod 3/20/01)* Exhibit 10(a) to Fora 10-K (filad 3/20/02)- Exhibit iO(r) to Fora 10-K (filod 3/20/01)* Exhibit 10(x) to Fora 10-K (filod 3/2R/02)- 2- A ..........-OOCU*MT 1 PAGE ------------ ----------(PD 20-MAA-1994 12:25:0S, 25-WR-1R04 01:44:00) [MWYC42S2]EXHIHDX_428Z -Prinary 94HYC42B2----- Profile: r.r. grace --EDGAR COPT---------------- ------------ ----- ClUfrt Docunant: DOCUMENT 1 <Pa#> EXHIBIT NO. EXHIBIT WHERE LOCATED 10.12 10.13 10.14 10.13 10.16 10.17 10.18 10.19 10.20 Housing Loan ^reement dated as of August 1, 1867 between . R. Grace & Co. and J. P. Bolduc, related Amendment and Assignment dated Nay 10, 1988 Euployment Agreeaent dated August 1, 1M3 between j. p. Bolduc and V. R. Qrace t Co. Stock Option Agr..--nt dat<) Juno 30, 1003 botwoor Oavid L. Yualch and IT. R. Graea A Co. Stock Option Agraanaat datad Juaa 30, 1903 batwaan David L. Yuaxcn aid W. R. Graea A Co. National Hadical Cara, Inc. and Scdisidiarle* Executive Bonus Plans R.tlrmant Aprunant oataaan W. R. Groca Co. and J. Pater Grace dated Decenber 21, 1002 Executive Severance Agreement dated ae of Septeooer 1, 1002 oetvoon R. R. Groca a Co. and J, P. Bolduc Executive Severance Agreement dated September 1, 1992 between w. R. Grace 4 Co. and Conetantine L. hampers Fane of Executive Severance Agreement between W. R. Grece A Co. and other* Exhibit 10(e) to Fora 10-K (filed 3/29/88); Exhibit 19(i> to Fora 6-K (tiled 6/0/88)* Filed herewith* Filad harawitn* Filad k.mwith* Exhibit 10 (as) to Fora 10-K (filed 3/28/92)* Exhibit 10.23 to Form 10-K (filed 3/26/93)* Exhibit 10.24 to Fora 10-K (filad 3/20/03)* Exhibit to.26 to Form 10-K (filed 3/28/93)* Exhibit 10.28 to Forw 10-K (filed 3/26/93)* 3 *$ 'DOCUMENT 1 PAdE 75-----------(PO M.tM-itM 1 ?: 25: OS, ND gS-UAft-IOM 01:44;00) tS4*rc43a3|EXHJN0X..42B3.C------$40999- Priaary 94YC42R2-*-Profila: W.R. MACE ---EDGAR COPY*--Document. OOCUMEN1 t <Pge exhibit NO. EXHIBIT MERE LOCATED 10. 31 10.32 10.33 10.34 10.39 11 13 13 33 Consulting Agreement datad June 1, 1997 batman *. R. Grace I Co. aad Kamsky Associataa, lac. Incantiva Compensation AgraaNaat dated Juna 1. 1B83 batman National Radical Cara, Inc. and Kamsky Associates, Inc. Consulting Agroamnt datad aa of Juna 19, 1903 by and batman National Nodical Cara, lac., Tim Humphrey Group, lac. and Gordon J. Humphrey Eaployment Taraiaation Agraaawnt datad Jana 30, 19*3 batman J. B. bright, Jr. aad I. R. Graca I Co. W. R. Craca 9 Co. tupplaisaotal Executive Ratiramnt Plan, aa aaandad Knighted Average hunbar of Sharon and Earainga (had in Par Share Computations Conputation of Ratio of Earainga to Fixed Chargee end Ceablnad Fixed Charge aad Preferred Stock Dividends Selected Portland of the logs Annual Report to Shareholder* of w. R. draco 9 Co. List of Subsidiaries of . R. Orece 9 Co. Exhibit 10.29 to Fora 10-X (filed 3(36/93}* Exhibit 10.30 to Fora 10-K (filed 3/29/031* Filed herewith* Filad herewith* Filed herewith* Filed herewith (in Financial Supplement to 10-K) Filed herewith (in Financial Supplement tc- 10-K) Filed herewith (in Financial Supplement to 10-K) Filed herewith -4- J OOCUCNT i'paGE Priaary X4NYC42B2----- Profil.: <Paga> EXHIBIT NO. EXHIBIT "IPO 2B-BJW-10M 12:25:05,*) 25-IM-1M4 01:44:00) [B4YC422|EXHIND!C42*2C--..-------M0S9- (MACE ----EDOAR COPV-- ""Cliant Oocuwnt: DOCUMENT i HERE LOCATED 24 CcfiMiit of Indapandant Accaun- FilaO haraaitti ,,M` (1 IlnKltl Supplaaaat to 10-K) 25 Pa*r#r of Attoraay F11M hara.it n S- 40CMEHT 2 CADW --WJOtCS----/pg ja iM liM 12: ?5'34 -PriMrr 4MyC422--Profile: W.N. QUC OOCO*CIfT* ___ -EDM COP* TVPf> EX-10.13 OESCftlPTION* EXHIBIT 10.19 <TEXT* *""*--409M "Client Once-- ot DOCUMENT ? LaserD II PRINT SUMMARY Accounting: Disabled Date Printed: Time Printed: 11/14/97 11: 18 AM, Company Name: Exchange: Ticker Symbol: Company Number: W R GRACE & CO N GRA W016000000 Document Type: Document Date: Amendment: Document Number: 10-K 12/31/93 01073398 Pages Printed: 78 Lasern '90CUKW 1 HEADER --BHUSWS----... (PO 7*-aAA lGa> la-SS-OS)----............ .Priwr > `:KVM2W--Profat: .n. MACE ---EDGAB efley. <oocucni> <1VPE> 10-K OFSCRIPTION> rORH 10-K *TEKT> "1 .S4Wjg. -Cli.nt DotUMnt; DOCIN'KT 1 0"1 3"IS