10-Q 1 gcpwi-20220630.htm 10-Q gcpwi-20220630
000164444012/312022Q2FALSEP1Yhttp://fasb.org/us-gaap/2022#LongTermDebtAndCapitalLeaseObligationshttp://fasb.org/us-gaap/2022#LongTermDebtAndCapitalLeaseObligationshttp://fasb.org/us-gaap/2022#OtherAssetsNoncurrenthttp://fasb.org/us-gaap/2022#OtherAssetsNoncurrenthttp://fasb.org/us-gaap/2022#OtherLiabilitiesCurrenthttp://fasb.org/us-gaap/2022#OtherLiabilitiesCurrenthttp://fasb.org/us-gaap/2022#OtherLiabilitiesNoncurrenthttp://fasb.org/us-gaap/2022#OtherLiabilitiesNoncurrent00016444402022-01-012022-06-3000016444402022-07-31xbrli:shares00016444402022-04-012022-06-30iso4217:USD00016444402021-04-012021-06-3000016444402021-01-012021-06-30iso4217:USDxbrli:shares00016444402022-06-3000016444402021-12-310001644440us-gaap:CommonStockMember2022-03-310001644440us-gaap:CommonStockMember2021-03-310001644440us-gaap:CommonStockMember2021-12-310001644440us-gaap:CommonStockMember2020-12-310001644440us-gaap:CommonStockMember2022-04-012022-06-300001644440us-gaap:CommonStockMember2021-04-012021-06-300001644440us-gaap:CommonStockMember2022-01-012022-06-300001644440us-gaap:CommonStockMember2021-01-012021-06-300001644440us-gaap:CommonStockMember2022-06-300001644440us-gaap:CommonStockMember2021-06-300001644440us-gaap:AdditionalPaidInCapitalMember2022-03-310001644440us-gaap:AdditionalPaidInCapitalMember2021-03-310001644440us-gaap:AdditionalPaidInCapitalMember2021-12-310001644440us-gaap:AdditionalPaidInCapitalMember2020-12-310001644440us-gaap:AdditionalPaidInCapitalMember2022-04-012022-06-300001644440us-gaap:AdditionalPaidInCapitalMember2021-04-012021-06-300001644440us-gaap:AdditionalPaidInCapitalMember2022-01-012022-06-300001644440us-gaap:AdditionalPaidInCapitalMember2021-01-012021-06-300001644440us-gaap:AdditionalPaidInCapitalMember2022-06-300001644440us-gaap:AdditionalPaidInCapitalMember2021-06-300001644440us-gaap:RetainedEarningsMember2022-03-310001644440us-gaap:RetainedEarningsMember2021-03-310001644440us-gaap:RetainedEarningsMember2021-12-310001644440us-gaap:RetainedEarningsMember2020-12-310001644440us-gaap:RetainedEarningsMember2022-04-012022-06-300001644440us-gaap:RetainedEarningsMember2021-04-012021-06-300001644440us-gaap:RetainedEarningsMember2022-01-012022-06-300001644440us-gaap:RetainedEarningsMember2021-01-012021-06-300001644440us-gaap:RetainedEarningsMember2022-06-300001644440us-gaap:RetainedEarningsMember2021-06-300001644440us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember2022-03-310001644440us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember2021-03-310001644440us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember2021-12-310001644440us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember2020-12-310001644440us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember2022-04-012022-06-300001644440us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember2021-04-012021-06-300001644440us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember2022-01-012022-06-300001644440us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember2021-01-012021-06-300001644440us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember2022-06-300001644440us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember2021-06-300001644440us-gaap:TreasuryStockCommonMember2022-03-310001644440us-gaap:TreasuryStockCommonMember2021-03-310001644440us-gaap:TreasuryStockCommonMember2021-12-310001644440us-gaap:TreasuryStockCommonMember2020-12-310001644440us-gaap:TreasuryStockCommonMember2022-04-012022-06-300001644440us-gaap:TreasuryStockCommonMember2021-04-012021-06-300001644440us-gaap:TreasuryStockCommonMember2022-01-012022-06-300001644440us-gaap:TreasuryStockCommonMember2021-01-012021-06-300001644440us-gaap:TreasuryStockCommonMember2022-06-300001644440us-gaap:TreasuryStockCommonMember2021-06-300001644440us-gaap:NoncontrollingInterestMember2022-03-310001644440us-gaap:NoncontrollingInterestMember2021-03-310001644440us-gaap:NoncontrollingInterestMember2021-12-310001644440us-gaap:NoncontrollingInterestMember2020-12-310001644440us-gaap:NoncontrollingInterestMember2022-04-012022-06-300001644440us-gaap:NoncontrollingInterestMember2021-04-012021-06-300001644440us-gaap:NoncontrollingInterestMember2022-01-012022-06-300001644440us-gaap:NoncontrollingInterestMember2021-01-012021-06-300001644440us-gaap:NoncontrollingInterestMember2022-06-300001644440us-gaap:NoncontrollingInterestMember2021-06-3000016444402021-06-3000016444402020-12-31gcpwi:segment0001644440gcpwi:MergerAgreementWithSaintGobainMembergcpwi:SaintGobainMember2021-12-050001644440gcpwi:MergerAgreementWithSaintGobainMembergcpwi:SaintGobainMember2021-12-052021-12-0500016444402022-01-012022-03-310001644440us-gaap:OtherExpenseMember2022-01-012022-06-300001644440us-gaap:DiscontinuedOperationsDisposedOfBySaleMembergcpwi:DarexPackagingTechnologiesBusinessMember2017-12-310001644440us-gaap:DiscontinuedOperationsDisposedOfBySaleMembergcpwi:DarexPackagingTechnologiesBusinessMember2022-04-012022-06-300001644440us-gaap:DiscontinuedOperationsDisposedOfBySaleMembergcpwi:DarexPackagingTechnologiesBusinessMember2021-04-012021-06-300001644440us-gaap:DiscontinuedOperationsDisposedOfBySaleMembergcpwi:DarexPackagingTechnologiesBusinessMember2022-01-012022-06-300001644440us-gaap:DiscontinuedOperationsDisposedOfBySaleMembergcpwi:DarexPackagingTechnologiesBusinessMember2021-01-012021-06-300001644440srt:MinimumMember2022-06-300001644440srt:MaximumMember2022-06-300001644440us-gaap:EmployeeSeveranceMember2021-12-310001644440gcpwi:AssetImpairmentWriteOffsMember2021-12-310001644440gcpwi:RepositioningAndOtherCostsMember2021-12-310001644440us-gaap:EmployeeSeveranceMember2022-01-012022-06-300001644440gcpwi:AssetImpairmentWriteOffsMember2022-01-012022-06-300001644440gcpwi:RepositioningAndOtherCostsMember2022-01-012022-06-300001644440us-gaap:EmployeeSeveranceMember2022-06-300001644440gcpwi:AssetImpairmentWriteOffsMember2022-06-300001644440gcpwi:RepositioningAndOtherCostsMember2022-06-300001644440us-gaap:EmployeeSeveranceMembersrt:MinimumMembergcpwi:RestructuringPlanAndRepositioningPlan2021Member2022-06-300001644440us-gaap:EmployeeSeveranceMembersrt:MaximumMembergcpwi:RestructuringPlanAndRepositioningPlan2021Member2022-06-300001644440srt:MinimumMembergcpwi:RestructuringPlanAndRepositioningPlan2021Membergcpwi:AssetImpairmentWriteOffsMember2022-06-300001644440srt:MaximumMembergcpwi:RestructuringPlanAndRepositioningPlan2021Membergcpwi:AssetImpairmentWriteOffsMember2022-06-300001644440gcpwi:RestructuringPlanAndRepositioningPlan2021Memberus-gaap:OtherRestructuringMember2022-06-300001644440gcpwi:RestructuringPlanAndRepositioningPlan2021Membergcpwi:RepositioningCostMember2022-06-300001644440srt:MinimumMembergcpwi:RestructuringPlanAndRepositioningPlan2021Member2022-06-300001644440srt:MaximumMembergcpwi:RestructuringPlanAndRepositioningPlan2021Member2022-06-300001644440us-gaap:EmployeeSeveranceMembergcpwi:RestructuringPlanAndRepositioningPlan2021Member2022-06-300001644440gcpwi:RestructuringPlanAndRepositioningPlan2021Membergcpwi:AssetImpairmentWriteOffsMember2022-06-300001644440gcpwi:RestructuringPlanAndRepositioningPlan2021Member2022-06-300001644440us-gaap:EmployeeSeveranceMembersrt:MinimumMembergcpwi:RestructuringPlanAndRepositioningPlanPhase22019Member2022-06-300001644440us-gaap:EmployeeSeveranceMembersrt:MaximumMembergcpwi:RestructuringPlanAndRepositioningPlanPhase22019Member2022-06-300001644440gcpwi:AssetImpairmentWriteOffsMembergcpwi:RestructuringPlanAndRepositioningPlanPhase22019Member2022-06-300001644440us-gaap:OtherRestructuringMembergcpwi:RestructuringPlanAndRepositioningPlanPhase22019Member2022-06-300001644440srt:MinimumMembergcpwi:RepositioningCostMembergcpwi:RestructuringPlanAndRepositioningPlanPhase22019Member2022-06-300001644440srt:MaximumMembergcpwi:RepositioningCostMembergcpwi:RestructuringPlanAndRepositioningPlanPhase22019Member2022-06-300001644440srt:MinimumMembergcpwi:RestructuringPlanAndRepositioningPlanPhase22019Member2022-06-300001644440srt:MaximumMembergcpwi:RestructuringPlanAndRepositioningPlanPhase22019Member2022-06-300001644440us-gaap:EmployeeSeveranceMembergcpwi:RestructuringPlanAndRepositioningPlanPhase22019Member2022-06-300001644440gcpwi:RepositioningCostMembergcpwi:RestructuringPlanAndRepositioningPlanPhase22019Member2022-06-300001644440gcpwi:RestructuringPlanAndRepositioningPlanPhase22019Member2022-06-300001644440gcpwi:RestructuringPlanAndRepositioningPlan2021Member2022-01-012022-06-300001644440gcpwi:RestructuringPlanAndRepositioningPlan2021Membergcpwi:RepositioningCostMember2022-01-012022-06-300001644440gcpwi:RestructuringPlanAndRepositioningPlan2021Member2021-01-012021-06-300001644440gcpwi:RestructuringPlanAndRepositioningPlan2021Membergcpwi:RepositioningCostMember2021-01-012021-06-300001644440gcpwi:RestructuringPlanAndRepositioningPlanPhase22019Member2019-07-31xbrli:pure0001644440gcpwi:RestructuringPlanAndRepositioningPlanPhase22019Member2022-01-012022-06-300001644440gcpwi:RepositioningCostMembergcpwi:RestructuringPlanAndRepositioningPlanPhase22019Member2022-01-012022-06-300001644440gcpwi:RestructuringPlanAndRepositioningPlanPhase22019Member2021-01-012021-06-300001644440gcpwi:RepositioningCostMembergcpwi:RestructuringPlanAndRepositioningPlanPhase22019Member2021-01-012021-06-300001644440us-gaap:RevolvingCreditFacilityMembergcpwi:RevolvingCreditFacilityDue2023Member2022-06-300001644440us-gaap:RevolvingCreditFacilityMembergcpwi:RevolvingCreditFacilityDue2023Member2021-12-310001644440us-gaap:SeniorNotesMembergcpwi:FivePointFivePercentSeniorNotesDuein2026Member2022-06-300001644440us-gaap:SeniorNotesMembergcpwi:FivePointFivePercentSeniorNotesDuein2026Member2021-12-310001644440us-gaap:NotesPayableOtherPayablesMember2022-06-300001644440us-gaap:NotesPayableOtherPayablesMember2021-12-310001644440us-gaap:RevolvingCreditFacilityMembergcpwi:RevolvingCreditFacilityDue2023Member2022-06-300001644440us-gaap:RevolvingCreditFacilityMembergcpwi:RevolvingCreditFacilityDue2023Member2021-12-310001644440gcpwi:RevolvingCreditFacilityDue2023Member2022-06-300001644440us-gaap:SeniorNotesMembergcpwi:FivePointFivePercentSeniorNotesDuein2026Member2018-04-300001644440us-gaap:SeniorNotesMembergcpwi:FivePointFivePercentSeniorNotesDuein2026Member2022-04-152022-04-150001644440us-gaap:NonUsMember2022-06-300001644440us-gaap:ForwardContractsMember2022-05-012022-05-310001644440us-gaap:ForwardContractsMember2022-06-30gcpwi:derivativeInstrumentiso4217:EUR0001644440us-gaap:ForwardContractsMember2021-12-310001644440us-gaap:ForwardContractsMember2022-04-012022-06-300001644440us-gaap:ForwardContractsMember2021-04-012021-06-300001644440us-gaap:ForwardContractsMember2022-01-012022-06-300001644440us-gaap:ForwardContractsMember2021-01-012021-06-300001644440country:GB2021-04-012021-06-300001644440country:GB2021-01-012021-06-300001644440country:US2022-04-012022-06-300001644440us-gaap:ForeignPlanMember2022-04-012022-06-300001644440country:US2021-04-012021-06-300001644440us-gaap:ForeignPlanMember2021-04-012021-06-300001644440country:US2022-01-012022-06-300001644440us-gaap:ForeignPlanMember2022-01-012022-06-300001644440country:US2021-01-012021-06-300001644440us-gaap:ForeignPlanMember2021-01-012021-06-300001644440us-gaap:AccumulatedTranslationAdjustmentMember2022-03-310001644440us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2022-03-310001644440us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2022-03-310001644440us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-03-310001644440us-gaap:AccumulatedTranslationAdjustmentMember2022-04-012022-06-300001644440us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2022-04-012022-06-300001644440us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2022-04-012022-06-300001644440us-gaap:AccumulatedTranslationAdjustmentMember2022-06-300001644440us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2022-06-300001644440us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2022-06-300001644440us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-06-300001644440us-gaap:AccumulatedTranslationAdjustmentMember2021-12-310001644440us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-12-310001644440us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2021-12-310001644440us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310001644440us-gaap:AccumulatedTranslationAdjustmentMember2022-01-012022-06-300001644440us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2022-01-012022-06-300001644440us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2022-01-012022-06-300001644440us-gaap:EmployeeStockOptionMember2022-06-300001644440gcpwi:RestrictedStockUnitsRSUsAndPerformanceSharesMember2022-06-300001644440us-gaap:EmployeeStockOptionMember2022-01-012022-06-300001644440us-gaap:RestrictedStockUnitsRSUMember2021-12-310001644440us-gaap:RestrictedStockUnitsRSUMember2022-01-012022-06-300001644440us-gaap:RestrictedStockUnitsRSUMember2022-06-300001644440us-gaap:PerformanceSharesMember2021-12-310001644440us-gaap:PerformanceSharesMember2022-01-012022-06-300001644440us-gaap:PerformanceSharesMember2022-06-300001644440us-gaap:FinancialStandbyLetterOfCreditMembergcpwi:AmendedCreditAgreementMember2022-06-300001644440us-gaap:FinancialStandbyLetterOfCreditMembergcpwi:AmendedCreditAgreementMember2021-12-3100016444402021-03-012021-03-3100016444402022-06-012022-06-300001644440srt:AffiliatedEntityMemberus-gaap:OtherNoncurrentAssetsMember2022-01-012022-06-300001644440srt:AffiliatedEntityMemberus-gaap:OtherNoncurrentAssetsMember2021-01-012021-12-310001644440us-gaap:OtherCurrentLiabilitiesMembersrt:AffiliatedEntityMember2022-01-012022-06-300001644440us-gaap:OtherCurrentLiabilitiesMembersrt:AffiliatedEntityMember2021-01-012021-12-310001644440us-gaap:OperatingSegmentsMembergcpwi:SpecialtyConstructionChemicalsMember2022-04-012022-06-300001644440us-gaap:OperatingSegmentsMembergcpwi:SpecialtyConstructionChemicalsMember2021-04-012021-06-300001644440us-gaap:OperatingSegmentsMembergcpwi:SpecialtyConstructionChemicalsMember2022-01-012022-06-300001644440us-gaap:OperatingSegmentsMembergcpwi:SpecialtyConstructionChemicalsMember2021-01-012021-06-300001644440gcpwi:SpecialtyBuildingMaterialsMemberus-gaap:OperatingSegmentsMember2022-04-012022-06-300001644440gcpwi:SpecialtyBuildingMaterialsMemberus-gaap:OperatingSegmentsMember2021-04-012021-06-300001644440gcpwi:SpecialtyBuildingMaterialsMemberus-gaap:OperatingSegmentsMember2022-01-012022-06-300001644440gcpwi:SpecialtyBuildingMaterialsMemberus-gaap:OperatingSegmentsMember2021-01-012021-06-300001644440us-gaap:OperatingSegmentsMember2022-04-012022-06-300001644440us-gaap:OperatingSegmentsMember2021-04-012021-06-300001644440us-gaap:OperatingSegmentsMember2022-01-012022-06-300001644440us-gaap:OperatingSegmentsMember2021-01-012021-06-300001644440us-gaap:CorporateNonSegmentMember2022-04-012022-06-300001644440us-gaap:CorporateNonSegmentMember2021-04-012021-06-300001644440us-gaap:CorporateNonSegmentMember2022-01-012022-06-300001644440us-gaap:CorporateNonSegmentMember2021-01-012021-06-300001644440us-gaap:MaterialReconcilingItemsMember2022-04-012022-06-300001644440us-gaap:MaterialReconcilingItemsMember2021-04-012021-06-300001644440us-gaap:MaterialReconcilingItemsMember2022-01-012022-06-300001644440us-gaap:MaterialReconcilingItemsMember2021-01-012021-06-300001644440country:US2022-04-012022-06-300001644440country:US2021-04-012021-06-300001644440country:US2022-01-012022-06-300001644440country:US2021-01-012021-06-300001644440gcpwi:CanadaAndOtherNorthAmericaMember2022-04-012022-06-300001644440gcpwi:CanadaAndOtherNorthAmericaMember2021-04-012021-06-300001644440gcpwi:CanadaAndOtherNorthAmericaMember2022-01-012022-06-300001644440gcpwi:CanadaAndOtherNorthAmericaMember2021-01-012021-06-300001644440srt:NorthAmericaMember2022-04-012022-06-300001644440srt:NorthAmericaMember2021-04-012021-06-300001644440srt:NorthAmericaMember2022-01-012022-06-300001644440srt:NorthAmericaMember2021-01-012021-06-300001644440us-gaap:EMEAMember2022-04-012022-06-300001644440us-gaap:EMEAMember2021-04-012021-06-300001644440us-gaap:EMEAMember2022-01-012022-06-300001644440us-gaap:EMEAMember2021-01-012021-06-300001644440srt:AsiaPacificMember2022-04-012022-06-300001644440srt:AsiaPacificMember2021-04-012021-06-300001644440srt:AsiaPacificMember2022-01-012022-06-300001644440srt:AsiaPacificMember2021-01-012021-06-300001644440srt:LatinAmericaMember2022-04-012022-06-300001644440srt:LatinAmericaMember2021-04-012021-06-300001644440srt:LatinAmericaMember2022-01-012022-06-300001644440srt:LatinAmericaMember2021-01-012021-06-30

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period EndedJune 30, 2022
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number1-37533
GCP Applied Technologies Inc.
Delaware47-3936076
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
2325 Lakeview Parkway, Alpharetta, Georgia                  30009
(Address of principal executive offices)                 (Zip Code)
(617876-1400
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
ClassTrading SymbolExchange on which registered
Common Stock, $0.01 par value per shareGCPNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒    No ☐ 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). 
Yes ☒    No ☐ 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filerNon-accelerated filerSmaller reporting companyEmerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐  No 
Securities registered pursuant to Section 12(b) of the Act:
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
ClassOutstanding at July 31, 2022
Common Stock, $0.01 par value per share74,021,514
1

TABLE OF CONTENTS

2

PART I. FINANCIAL INFORMATION
Item 1.    Financial Statements
GCP Applied Technologies Inc.
Condensed Consolidated Statements of Operations (unaudited)
Three Months Ended
Six Months Ended
June 30,June 30,
2022202120222021
(in millions, except per share amounts)
Net sales$268.4 $253.4 $505.7 $476.2 
Cost of goods sold182.3 160.3 346.6 296.6 
   Gross profit86.1 93.1 159.1 179.6 
Selling, general and administrative expenses64.7 64.2 127.2 130.8 
Interest expense, net5.4 5.6 11.0 11.2 
Restructuring and repositioning expenses1.1 7.0 4.6 15.9 
Other expense (income), net4.1 (1.2)7.2 1.6 
    Total costs75.3 75.6 150.0 159.5 
Income from continuing operations before income taxes10.8 17.5 9.1 20.1 
Income tax expense(3.6)(7.0)(5.5)(8.0)
Income from continuing operations7.2 10.5 3.6 12.1 
Loss from discontinued operations, net of income taxes (1.7)(0.2)(2.0)(0.2)
Net income 5.5 10.3 1.6 11.9 
Less: Net income attributable to noncontrolling interests (0.1)(0.1)(0.2)
Net income attributable to GCP shareholders$5.5 $10.2 $1.5 $11.7 
Amounts Attributable to GCP Shareholders:
Income from continuing operations attributable to GCP shareholders$7.2 $10.4 $3.5 $11.9 
Loss from discontinued operations, net of income taxes(1.7)(0.2)(2.0)(0.2)
Net income attributable to GCP shareholders$5.5 $10.2 $1.5 $11.7 
Earnings Per Share Attributable to GCP Shareholders
Basic earnings per share:
Income from continuing operations attributable to GCP shareholders$0.10 $0.14 $0.05 $0.16 
Loss from discontinued operations, net of income taxes(0.03) (0.03) 
Net income attributable to GCP shareholders$0.07 $0.14 $0.02 $0.16 
Weighted average number of basic shares74.0 73.4 74.0 73.2 
Diluted earnings per share:
Income from continuing operations attributable to GCP shareholders$0.10 $0.14 $0.05 $0.16 
Loss from discontinued operations, net of income taxes(0.03) (0.03) 
Net income attributable to GCP shareholders$0.07 $0.14 $0.02 $0.16 
Weighted average number of diluted shares74.1 73.6 74.2 73.4 

The Notes to the Unaudited Condensed Consolidated Financial Statements are an integral part of these statements
3

GCP Applied Technologies Inc.
Condensed Consolidated Statements of Comprehensive (Loss) Income (unaudited)
Three Months Ended
Six Months Ended
June 30,June 30,
2022202120222021
(in millions)
Net income $5.5 $10.3 $1.6 $11.9 
Other comprehensive (loss) income:
Currency translation adjustments(28.2)4.8 (29.2)(2.8)
    Income tax effect(0.3)0.1 (0.5)(0.3)
Defined benefit pension plans and postretirement plans 0.1 (0.3)0.1 
Income tax effect  0.1  
Derivatives0.1    
Total other comprehensive (loss) income(28.4)5.0 (29.9)(3.0)
Comprehensive (loss) income (22.9)15.3 (28.3)8.9 
Less: Comprehensive income attributable to noncontrolling interests (0.1) (0.2)
Comprehensive (loss) income attributable to GCP shareholders$(22.9)$15.2 $(28.3)$8.7 

The Notes to the Unaudited Condensed Consolidated Financial Statements are an integral part of these statements
4

GCP Applied Technologies Inc.
Condensed Consolidated Balance Sheets (unaudited)
June 30,
2022
December 31,
2021
(in millions, except par value and shares)
ASSETS
Current Assets
  Cash and cash equivalents$459.4 $500.6 
  Trade accounts receivable, net 170.5 162.4 
  Inventories149.1 130.7 
  Current assets held for sale 22.0 
  Other current assets45.7 45.9 
Total Current Assets824.7 861.6 
  Properties and equipment, net 212.0 213.2 
  Goodwill196.6 205.5 
  Technology and other intangible assets, net54.1 48.8 
Other assets109.3 117.5 
Total Assets$1,396.7 $1,446.6 
LIABILITIES AND STOCKHOLDERS’ EQUITY
  
Current Liabilities  
  Current maturities of long-term debt$0.9 $2.1 
  Current liabilities held for sale 2.6 
  Accounts payable108.2 102.3 
  Other current liabilities 100.5 124.9 
Total Current Liabilities209.6 231.9 
  Long-term debt348.1 348.8 
  Defined benefit pension plans57.1 56.5 
  Unrecognized tax benefits41.3 41.1 
  Income taxes payable22.5 24.1 
  Other liabilities70.6 72.3 
Total Liabilities749.2 774.7 
Commitments and Contingencies - Note 12
Stockholders’ Equity
  
Preferred stock, par value $0.01; 50,000,000 shares authorized, no shares issued or outstanding
  
Common stock issued, par value $0.01; 300,000,000 shares authorized; outstanding: 74,018,547 and 73,845,554, respectively
0.8 0.7 
  Paid-in capital84.8 80.2 
  Accumulated earnings733.0 731.5 
  Accumulated other comprehensive loss(159.3)(129.4)
  Treasury stock(14.2)(13.8)
Total GCP’s Shareholders’ Equity
645.1 669.2 
 Noncontrolling interests2.4 2.7 
Total Stockholders’ Equity
647.5 671.9 
Total Liabilities and Stockholders’ Equity
$1,396.7 $1,446.6 

The Notes to the Unaudited Condensed Consolidated Financial Statements are an integral part of these statements
5

GCP Applied Technologies Inc.
Condensed Consolidated Statements of Stockholders’ Equity (unaudited)

Three Months EndedSix Months Ended
June 30,June 30,
2022202120222021
(in millions)
Common stock
Balance, beginning of period$0.7 $0.7 $0.7 $0.7 
Change in common stock at par value0.1  0.1  
Balance, end of period0.8 0.7 0.8 0.7 
Additional paid-in-capital
Balance, beginning of period84.1 65.5 80.2 61.9 
Exercise of stock options0.1 2.1 3.8 4.3 
Share-based compensation0.6 2.6 0.8 4.0 
Balance, end of period84.8 70.2 84.8 70.2 
Accumulated earnings
Balance, beginning of period727.5 711.8 731.5 710.3 
Net income attributable to GCP shareholders5.5 10.2 1.5 11.7 
Balance, end of period733.0 722.0 733.0 722.0 
Accumulated other comprehensive loss
Balance, beginning of period(130.9)(118.5)(129.4)(110.5)
Other comprehensive (loss) income(28.4)5.0 (29.9)(3.0)
Balance, end of period(159.3)(113.5)(159.3)(113.5)
Treasury stock
Balance, beginning of period(14.0)(11.4)(13.8)(10.7)
Share repurchases(0.2)(0.9)(0.4)(1.6)
Balance, end of period(14.2)(12.3)(14.2)(12.3)
Non-controlling interests
Balance, beginning of period2.4 2.5 2.7 2.4 
Net income attributable to noncontrolling interests 0.1 0.1 0.2 
Dividends and other changes  (0.4) 
Balance, end of period2.4 2.6 2.4 2.6 
Total stockholders’ equity$647.5 $669.7 $647.5 $669.7 


The Notes to the Unaudited Condensed Consolidated Financial Statements are an integral part of these statements
6

GCP Applied Technologies Inc.
Condensed Consolidated Statements of Cash Flows (unaudited)
Six Months Ended
June 30,
20222021
(in millions)
OPERATING ACTIVITIES  
Net income$1.6 $11.9 
Less: Loss from discontinued operations, net of income taxes(2.0)(0.2)
Income from continuing operations3.6 12.1 
Reconciliation to net cash (used in) provided by operating activities:  
  Depreciation and amortization21.3 22.4 
  Provisions for expected credit losses and inventory obsolescence7.8 3.7 
  Deferred income taxes1.6 (1.6)
  Unrealized loss (gain) on foreign currency1.0 (2.1)
  Stock-based compensation expense0.8 2.5 
  Impairment of assets related to restructuring plans0.1 2.7 
  Other0.7 2.3 
Changes in assets and liabilities, excluding effect of currency translation
  Trade accounts receivable(12.2)0.3 
  Inventories(25.5)(34.3)
  Accounts payable9.2 20.3 
  Pension assets and liabilities, net1.7 1.8 
  Other assets and liabilities, net(19.3)(9.1)
Net cash (used in) provided by operating activities from continuing operations(9.2)21.0 
Net cash used in operating activities from discontinued operations(2.6)(0.2)
Net cash (used in) provided by operating activities(11.8)20.8 
INVESTING ACTIVITIES  
Capital expenditures(25.3)(14.9)
Proceeds from net investment hedge3.9  
Other investing activities 0.1 
Net cash used in investing activities(21.4)(14.8)
FINANCING ACTIVITIES  
Proceeds from exercise of stock options3.8 4.3 
Payments of tax withholding obligations related to employee equity awards(1.7)(1.6)
Payments on finance lease obligations(1.4)(0.3)
Repayments under credit arrangements(0.8)(0.3)
Other financing activities(0.7) 
Net cash (used in) provided by financing activities(0.8)2.1 
Effect of currency exchange rate changes on cash and cash equivalents(7.2)(1.9)
Decrease in cash and cash equivalents (41.2)6.2 
Cash and cash equivalents, beginning of period500.6 482.7 
Cash and cash equivalents, end of period$459.4 $488.9 
Supplemental disclosure of non-cash financing activities:
   Property and equipment purchases unpaid and included in accounts payable$7.2$5.5

The Notes to the Unaudited Condensed Consolidated Financial Statements are an integral part of these statements
7

Notes to the Condensed Consolidated Financial Statements (unaudited)

1. Nature of Business and Basis of Presentation
Nature of Business
GCP Applied Technologies Inc. (“GCP”, or the “Company”) is engaged in the production and sale of specialty construction chemicals and specialty building materials through two operating segments. Specialty Construction Chemicals (“SCC”) operating segment provides products, services and technologies to the concrete and cement industries, including concrete admixtures and cement, as well as in-transit monitoring and management systems, which reduce the cost and improve the performance and quality of cement, concrete, mortar, masonry, and other cementitious-based construction materials. Specialty Building Materials (“SBM”) operating segment manufactures and markets sheet and liquid membrane systems that protect structures from water, air and vapor penetration, as well as fireproofing and other products designed to protect the building envelope.
Basis of Presentation
The accompanying unaudited Condensed Consolidated Financial Statements are presented on a consolidated basis and include all of the accounts and operations of GCP and its majority-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The financial statements reflect the financial position, results of operations and cash flows of GCP in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) and with the instructions to Form 10-Q and Article 10 of Securities and Exchange Commission (“SEC”) Regulation S-X for interim financial information.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the unaudited Condensed Consolidated Financial Statements, and the reported amounts of revenues and expenses for the periods presented. The Company assesses the estimates on an ongoing basis and records changes in estimates in the period they occur and become known. GCP’s accounting measurements that are most affected by management’s estimates of future events are disclosed in its 2021 Annual Report on Form 10-K filed with the SEC for the year ended December 31, 2021 (the “2021 Annual Report on Form 10-K”). Actual results could differ from those estimates.
The interim financial statements presented herein are unaudited and should be read in conjunction with the audited Consolidated Financial Statements and notes thereto contained in the 2021 Annual Report on Form 10-K. The Condensed Consolidated Balance Sheet at December 31, 2021 was derived from the audited annual consolidated financial statements as of the period then ended. Certain information and footnote disclosures typically included in GCP’s annual consolidated financial statements have been condensed or omitted. The unaudited financial statements reflect all adjustments that, in the opinion of management, are necessary for a fair statement of the results of the interim periods presented. All such adjustments are of a normal recurring nature. The results of operations for the three and six months ended June 30, 2022 are not necessarily indicative of the results of operations for the year ending December 31, 2022. Certain amounts in prior period financial statements have been reclassified to conform to the current period presentation. Such reclassifications have not materially affected previously reported amounts.
Proposed Merger
On December 5, 2021, GCP entered into an Agreement and Plan of Merger, or the (Merger Agreement”), with Cyclades Parent, Inc., or Parent, and Cyclades Merger Sub, Inc., a wholly owned subsidiary of Parent, (Merger Sub), and Compagnie de Saint-Gobain S.A., collectively, (Saint-Gobain). Pursuant to the terms of the Merger Agreement, Merger Sub will merge with and into GCP (the “Merger”), with GCP continuing as the surviving corporation of the Merger and as a wholly-owned subsidiary of Parent. At the effective time of the Merger, each share of GCP’s common stock that is issued and outstanding immediately prior to the effective time of the Merger shall be automatically converted into the right to receive $32.00 in cash, without interest. GCP’s Board of Directors and the board of directors of Saint-Gobain have each approved the Merger and the Merger Agreement. On March 8, 2022, the Companys stockholders approved the Merger. The Company currently expects the Merger to close in the second half of 2022. Until the closing, GCP will continue to operate as an independent company.

GCP may be required to pay a cash termination fee to Saint-Gobain of up to $71 million, as required under the Merger Agreement under certain circumstances, including in the event GCP terminates the Merger Agreement to enter into a “Superior Proposal,” as defined in the Merger Agreement, or in the event GCP enters into an alternative transaction within nine months of termination of the Merger Agreement in certain circumstances and such alternative transaction is
8

Notes to the Condensed Consolidated Financial Statements (unaudited)
consummated.
Assets Held for Sale
In October 2021, the Company approved the sale of a business unit within the SBM segment and classified it as held for sale in its 2021 Annual Report on Form 10-K. In the first quarter of 2022, the Company decided to discontinue the proposed sale of this business unit and recorded a $0.7 million charge for accumulated unrecognized depreciation and amortization expense during the period the associated assets were classified as held for sale. In the six months ended June 30, 2022, the Company also reversed the $0.8 million loss on sale of a product line that it had previously recorded in 2021 resulting in a $0.1 million overall gain recorded in Other expense (income), net in the unaudited Condensed Consolidated Statement of Operations. As of March 1, 2022, all depreciation and amortization associated with this business are in operating costs and expense in the unaudited Condensed Consolidated Statement of Operations.
Goodwill
The change in goodwill in the six months ended June 30, 2022 was due mostly to unfavorable foreign currency translations of $12.1 million partially offset by $3.2 million assets held for sale that were reversed when GCP decided to discontinue the proposed sale of the business unit.
Discontinued Operations
In 2017, GCP completed the sale of its Darex Packaging Technologies (“Darex”) business to Henkel AG & Co. KGaA (“Henkel”) for $1.1 billion in cash. Since that time, Darex results of operations and cash flows have been reclassified and reflected as “discontinued operations” in the unaudited Condensed Statements of Operations and Cash Flows for all periods presented including fees incurred by the Company in relation to Henkel indemnification claims (see Note 12, “Commitments and Contingencies”). Unless otherwise noted, the information throughout the Notes to the accompanying unaudited Condensed Consolidated Financial Statements pertains only to the continuing operations of GCP.
The following table sets forth the components of “Loss from discontinued operations, net of income taxes” in the unaudited Condensed Consolidated Statements of Operations:
Three Months Ended
Six Months Ended
June 30, 2022June 30, 2021June 30, 2022June 30, 2021
(in millions)
Selling, general and administrative expenses$2.4 $0.2 $2.7 $0.2 
Loss from discontinued operations before income taxes(2.4)(0.2)(2.7)(0.2)
Income tax expense(0.7) (0.7) 
Loss from discontinued operations, net of income taxes$(1.7)$(0.2)$(2.0)$(0.2)
Risk and Uncertainties
In March 2020, the World Health Organization declared the outbreak of the novel strain of coronavirus (“COVID-19”) a global pandemic, and recommended a number of restrictive measures to contain the spread. Many governments in the regions where GCP generates the majority of its revenue have adopted policies which have impacted GCP and many other companies globally, particularly the extended lockdowns and supply chain disruptions. COVID-19 and its resurgence has and will continue to impact global economic activity, particularly raw material inflation and the supply chain challenges are impacting the ability to fulfill demand and the cost of the GCPs products. Furthermore, factors such as the conflict in Ukraine, risks related to energy markets and the resulting increases in petroleum-based raw materials and historic inflation headwinds have impacted GCPs results of operations in the six months ended June 30, 2022. GCP has been closely monitoring the impact of COVID-19 and working to manage the effects on its business globally. It is difficult to estimate with reasonable certainty at this time the duration and extent of the impact of the pandemic on the global economy, the Company’s business, financial position and results of operations. GCP has made certain estimates within its financial statements related to the impact of COVID-19 and other risk and uncertainties, including allowances for credit losses related to the estimated amount of receivables not expected to be collected and excess, obsolete or damaged inventories, future expected cash flows related to impairment assessments of goodwill and long-lived assets, incentive compensation accruals, contingent liabilities, and sales allowances related to volume rebates recognized based on anticipated sales volume. There may be changes to the Company’s estimates in future periods due to uncertainty associated with the impact of COVID-19, the extent of which will depend
9

Notes to the Condensed Consolidated Financial Statements (unaudited)
largely on future developments, including new information which may emerge concerning the resurgence of the pandemic, as well as additional and unanticipated actions by government authorities to further contain the spread of COVID-19.
2. Revenue from Contracts with Customers
Revenue is recognized upon transfer of control of products or services promised to customers in an amount that reflects the consideration the Company expects to receive in exchange for these products or services. GCP disaggregates its revenue from contracts with customers by operating segments, which it believes best depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. Please refer to Note 14, “Operating Segments”.
Short-Term Arrangements

The majority of the Company’s revenue is generated from short-term arrangements associated with the production and sale of concrete admixtures and cement additives within its SCC segment, as well as sheet and liquid membrane systems and other specialty products designed to protect the building envelope within its SBM segment. Short-term arrangements within its SCC segment involve selling concrete admixtures and providing dispensers to customers. Such arrangements contain a lease element due to the customer’s right to control the use of dispensers over a period of time in exchange for consideration. For such arrangements, the transfer of control takes place at a point in time when products are shipped or delivered to the customer. Revenue from these contracts with customers is therefore typically recognized upon shipment of the product or delivery at the customer’s site based on shipping terms.
Long-Term Arrangements
The Company generates revenue from long-term arrangements within its SCC segment, which generally consist of VERIFI® and Ductilcrete sales arrangements. VERIFI® sales arrangements involve installing equipment on the customers’ trucks and at their plants, as well as performing slump management and truck location tracking services. The Company recognizes lease and service revenue for these arrangements.
The Company has certain long-term arrangements, under which the Company has certain performance obligations that are satisfied over time, resulting in remaining obligations for which the work has not been performed or has been partially performed. At June 30, 2022, the aggregate amount of transaction price allocated to remaining performance obligations was immaterial and will be earned as revenue over the remaining term of these contracts, which is generally one to four years.
3. Restructuring and Repositioning Expenses
Repositioning expenses are primarily related to consulting, professional services, and other employee-related costs associated with the Company’s restructuring activities.
Restructuring, repositioning and associated costs, which are included in “Other current liabilities” on the unaudited Condensed Balance Sheets, were as follows.
SeveranceAsset Impairment Repositioning and Other CostsTotal
(in millions)
Balance at December 31, 2021$8.2 $ $4.2 $12.4 
Additional accrual0.6 0.1 3.9 4.6 
Payments(4.2) (6.2)(10.4)
Other(0.1)(0.1)(0.6)(0.8)
  Balance at June 30, 2022$4.5 $ $1.3 $5.8 
10

Notes to the Condensed Consolidated Financial Statements (unaudited)
The following table summarizes the charges incurred and planned in connection with restructuring and repositioning plans.
Severance & Employee Related CostsAsset ImpairmentOther CostsRepositioningTotal Costs
(in millions)
2021 Plan:
Estimated total costs
$13-$15
$8-$9
$8$5
$34-$37
Cumulative costs to date$14.0$7.4$8.2$5.8$35.4
2019 Phase 2 Plan:
Estimated total costs
$25-$26
$1
$
$7-$8
$33-$35
Cumulative Costs to date$25.0$0.9$$7.4$33.3
2021 Restructuring and Repositioning Plan (the “2021 Plan”)
In March 2021, the Board approved a business restructuring and repositioning plan related to the relocation of the Company’s corporate headquarters to Alpharetta, Georgia, the closure of its Cambridge, Massachusetts campus, the build-out of new R&D locations in Wilmington, Massachusetts, as well as the consolidation of other regional facilities and offices, including an organizational redesign. The Company moved into the Alpharetta headquarters in September 2021 and in the Wilmington R&D facility in April 2022. The program was completed in June 2022.
During the six months ended June 30, 2022, the Company incurred $4.7 million of restructuring charges for the 2021 Plan recorded within “Restructuring and repositioning expenses” in the Statement of Operations. $2.0 million was for repositioning expenses, $1.6 million was for other associated costs related mostly to the prior Cambridge headquarters, $1.0 million was mostly for severance and employee related costs and $0.1 million was for asset impairment charges.
During the six months ended June 30, 2021, the Company incurred $13.9 million of restructuring charges for the 2021 Plan recorded within “Restructuring and repositioning expenses” in the Statement of Operations. $9.8 million was mostly for severance and employee related costs, $2.4 million was for asset impairment charges, $1.2 million was for other associated costs and $0.5 million was for repositioning expense and other costs.
2019 Phase 2 Restructuring and Repositioning Plan (the “2019 Phase 2 Plan”)
In July 2019, the Board approved a business restructuring and repositioning plan to optimize the design and footprint of the Company’s global organization, primarily with respect to its general administration and business support functions, and streamline cross-functional activities. The 2019 Phase 2 Plan resulted in the net reduction of approximately 10% of the Company’s workforce. The program was substantially completed in March 2021.
During the six months ended June 30, 2022, the Company reversed $0.3 million of severance charges for the 2019 Phase 2 Plan within “Restructuring and repositioning expenses” in the Statement of Operations and recorded $0.2 million for repositioning expense and other costs.
During the six months ended June 30, 2021, the Company incurred $2.0 million of restructuring charges for the 2019 Phase 2 Plan recorded within “Restructuring and repositioning expenses” in the Statement of Operations. $1.3 million was for repositioning expense, $0.4 million was for severance and employee related costs and $0.3 million was for asset impairment charges.
11

Notes to Consolidated Financial Statements (unaudited)
4. Debt
The following is a summary of obligations under senior notes and other borrowings at June 30, 2022 and December 31, 2021.
June 30,
2022
December 31,
2021
(in millions)
Revolving Credit Facility due 2023$ $ 
5.5% Senior Notes due in 2026
347.5 347.2 
Other borrowings1.5 3.7 
Total debt 349.0 350.9 
Less: current portion of long-term debt(0.9)(2.1)
Long-term debt$348.1 $348.8 
Weighted average interest rates on total debt obligations5.5 %5.5 %
Revolving Credit Facility
The Company entered into a $350 million Revolving Credit Facility on April 2018 (the “Revolving Credit Facility”). At June 30, 2022 and December 31, 2021, there were no outstanding borrowings on the Revolving Credit Facility. There were $2.8 million in outstanding letters of credit which resulted in available credit of $347.2 million at June 30, 2022.
The Credit Agreement contains conditions that would require mandatory principal payments in advance of the maturity date of the Revolving Credit Facility, as well as certain customary affirmative and negative covenants and events of default, as described in the Company’s Consolidated Financial Statements included in the 2021 Annual Report in the Form 10-K. The Company was in compliance with all covenant terms at June 30, 2022. There were no events of default at June 30, 2022.
5.5% Senior Notes
The Company issued the 5.5% Senior Notes in April 2018 with an aggregate principal amount of $350 million maturing on April 15, 2026 (the 5.5% Senior Notes). Interest on the 5.5% Senior Notes is payable semi-annually in arrears on April 15 and October 15 of each year. The Company made an interest payment of $9.6 million on April 15, 2022. At June 30, 2022, the 5.5% Senior Notes are reported net of unamortized discount and debt issuance costs of $2.5 million. Based on quotes from dealers where obtainable or the value of the most recent trade in the market (Level 2), the outstanding 5.5% Senior Notes has a fair value of $348.3 million at June 30, 2022.
The 5.5% Senior Notes contain certain customary affirmative and negative covenants and events of default, as described in the Company’s Consolidated Financial Statements included in the 2021 Annual Report in the Form 10-K. The Company was in compliance with all covenants and conditions under the Indenture at June 30, 2022. There were no events of default at June 30, 2022.
Other Borrowings
Other borrowings of $1.5 million are comprised of various borrowings under lines of credits, primarily by non-U.S. subsidiaries as well as $0.9 million of finance lease obligations at June 30, 2022. Other borrowings have a fair value that approximate their carrying value. We have $44.1 million available under various non-U.S. credit facilities.
12

Notes to the Condensed Consolidated Financial Statements (unaudited)
5. Derivatives
In May 2022, the Company settled its outstanding net investment foreign currency forward contracts for $3.9 million. The unamortized gain remaining in “Accumulated other comprehensive loss” was $1.2 million, net of tax, at June 30, 2022 and will be recorded into income if the Merger is consummated. Further, the unamortized excluded component under the spot method of $0.7 million will also be recorded into income if the Merger is consummated.
The Company used derivative instruments to partially offset its business exposure to foreign currency risk on net investments in certain foreign subsidiaries. The Company entered into foreign currency forward contracts to offset a portion of the changes in the carrying amounts of its net investments entered in foreign operations due to fluctuations in foreign currency exchange rates. The Company was a party to four forward contracts with an aggregate notional amount of €40.0 million to hedge foreign currency exposure on net investments in certain of its European subsidiaries whose functional currency was the Euro.
The following table summarizes the fair value of the Company’s derivative instruments designated as net investment hedges at December 31, 2021.
Fair Value
Balance Sheet LocationDecember 31, 2021
(in millions)
Derivative assetsOther current assets$0.7 
Derivative assetsOther assets1.0 
Derivative liabilitiesOther liabilities0.2 
The fair value of derivative instruments was measured based on expected future cash flows discounted at market interest rates using observable market inputs and classified as Level 2 within the fair value hierarchy.
The effects of our foreign exchange forward contracts on the unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss, is recorded as follows.
Three Months Ended
Six Months Ended
June 30, 2022June 30, 2021June 30, 2022June 30, 2021
(in millions)
Gain recognized in the statements of operations and comprehensive income, net of tax$0.1 $0.2 $0.3 $0.4 
Cumulative translation adjustments1.4 (0.6)2.1 1.2 
Income tax effect(0.3)0.1 (0.5)(0.3)
6. Income Taxes
Income tax expense attributable to continuing operations during the three months ended June 30, 2022 and 2021 was $3.6 million and $7.0 million, respectively, representing effective tax rates of 33.3% and 40.0%, respectively.

Income tax expense attributable to continuing operations during the six months ended June 30, 2022 and 2021 was $5.5 million and $8.0 million, respectively, representing effective tax rates of 60.4% and 39.8%, respectively.

The difference between the U.S. federal income tax rate of 21.0% and GCP’s overall income tax rate for the three months ended June 30, 2022, was primarily due to $0.4 million of income tax expense for valuation allowances on net operating losses, $0.4 million of foreign rate differential, $0.3 million of state and local taxes, and $0.3 million of tax rate change.
The difference between the U.S. federal income tax rate of 21.0% and GCP’s overall income tax rate for the three months ended June 30, 2021, was primarily due to income tax expense on the United Kingdom (“U.K.”) rate change on $2.9 million, foreign rate differential of $1.0 million, non-deductible expenses of $0.7 million, offset by income tax benefit on valuation releases of $1.2 million.
The difference between the U.S. federal income tax rate of 21.0% and GCP’s overall income tax rate for the six months ended June 30, 2022, was primarily due to income tax expense of $2.6 million for valuation allowances, mostly recorded on deferred tax assets in China due to declined profitability.
13

Notes to the Condensed Consolidated Financial Statements (unaudited)
The difference between the U.S. federal income tax rate of 21.0% and GCP’s overall income tax rate for the six months ended June 30, 2021, was due to income tax expense on the U.K. rate change of $2.9 million, foreign rate differential of $1.0 million, and non-deductible expenses of $0.8 million, offset by income tax benefits on valuation releases of $1.2 million.
Repatriation
It is GCP’s practice and intention to permanently reinvest the earnings of its foreign subsidiaries and repatriate earnings only when the tax impact is efficient.
Valuation Allowance
In evaluating GCP’s ability to realize its deferred tax assets, GCP considers all reasonably available positive and negative evidence, including recent earnings experience, expectations of future taxable income and the tax character of that income, the period of time over which temporary differences become deductible and the carryforward and/or carryback periods available to GCP for tax reporting purposes in the related jurisdiction. In estimating future taxable income, GCP relies upon assumptions and estimates about future activities, including the amount of future federal, state and foreign pretax operating income that GCP will generate; the reversal of temporary differences; and the implementation of feasible and prudent tax planning strategies. GCP records a valuation allowance to reduce deferred tax assets to the amount that it believes is more likely than not to be realized.
During the three months ended June 30, 2022, GCP recognized an income tax expense of $0.4 million due to increases on valuation allowances on net operating losses. During the six months ended June 30, 2022, GCP recognized income tax expense of $2.6 million, consisting primarily of $1.9 million valuation allowance on Chinese deferred tax assets, driven mostly by declined profitability. During the three months and six months ended June 30, 2021, GCP recognized income tax benefit of $1.2 million, largely driven by the release of valuation allowances on deferred tax assets in France.

Tax Sharing Agreement
In connection with the legal separation and transfer of W.R. Grace & Co.’s (“Grace”) construction products and packaging technologies businesses to the Company through a dividend distribution of all of the then-outstanding common stock of GCP to Grace shareholders on February 3, 2016 (the “Separation”), GCP and Grace entered into various agreements that govern the relationship between the parties going forward, including a tax matters agreement (the “Tax Sharing Agreement”). Under the Tax Sharing Agreement, GCP and Grace will indemnify and hold each other harmless in accordance with the principles outlined therein. Please refer to Note 13, “Related Party Transactions” for further information on the Tax Sharing Agreement.
7. Retirement Plans
The components of GCP’s net periodic benefit costs are as follows.
Three Months Ended
20222021
U.S.Non-U.S.U.S.Non-U.S.
(in millions)
Service cost$1.3 $0.2 $1.6 $0.2 
Interest cost1.1 1.1 1.2 0.7 
Expected return on plan assets(1.2)(1.0)(1.6)(0.7)
Amortization of prior service cost 0.1  0.1 
Net periodic benefit cost$1.2 $0.4 $1.2 $0.3 
14

Notes to the Condensed Consolidated Financial Statements (unaudited)
Six Months Ended
20222021
U.S.Non-U.S.U.S.Non-US
Service cost$2.5 $0.5 $3.1 $0.5 
Interest cost2.2 2.2 2.4 1.4 
Expected return on plan assets(2.3)(2.1)(3.1)(1.5)
Amortization of prior service cost 0.1  0.1 
Net periodic benefit cost$2.4 $0.7 $2.4 $0.5 
Service cost component of net periodic benefit cost is included in “Selling, general and administrative expenses” and “Cost of goods sold” in the unaudited Condensed Consolidated Statements of Operations. All other components of net periodic benefit costs are presented in “Other expense (income), net” within the unaudited Condensed Consolidated Statements of Operations.
8. Other Balance Sheet Accounts
The following is a summary of inventories.
June 30,
2022
December 31,
2021
(in millions)
Raw materials$73.1 $62.5 
In process5.9 5.5 
Finished products and other70.1 62.7 
Total inventories$149.1 $130.7 
The following is a summary of other current assets.
June 30,
2022
December 31,
2021
(in millions)
Non-trade receivables$21.7 $22.5 
Prepaid expenses and other current assets12.6 11.4 
Income taxes receivable11.4 12.0 
Total other current assets$45.7 $45.9 
The following is a summary of other assets.
June 30,
2022
December 31,
2021
(in millions)
Operating lease right-of-use asset$45.1 $48.7 
Defined benefit pension plans28.1 31.0 
Deferred income taxes7.7 10.3 
Other assets28.4 27.5 
Total other assets$109.3 $117.5 
    

15

Notes to the Condensed Consolidated Financial Statements (unaudited)
The following is a summary of other current liabilities.
June 30,
2022
December 31,
2021
(in millions)
Accrued compensation$18.7 $21.2 
Accrued customer volume rebates18.0 23.6 
Operating lease obligations6.8 7.5
Restructuring liability5.8 12.4 
Accrued interest4.0 4.0 
Income taxes payable3.3 3.3 
Other accrued liabilities43.9 52.9 
Total other current liabilities$100.5 $124.9 
The following is a summary of other liabilities.
June 30,
2022
December 31,
2021
(in millions)
Operating lease obligations$40.9 $41.9 
Deferred income taxes14.4 15.9 
Other liabilities15.3 14.5 
Total other liabilities$70.6 $72.3 
9. Accumulated Other Comprehensive Loss
Accumulated other comprehensive loss, net of tax, is presented below.
Currency Translation AdjustmentsPension PlansHedging ActivitiesAccumulated Other Comprehensive Loss
(in millions)
Balance at March 31, 2022
$(128.0)$(2.9)$ $(130.9)
Net current-period other comprehensive loss(28.5) 0.1 (28.4)
Balance at June 30, 2022
$(156.5)$(2.9)$