GCP APPLIED TECHNOLOGIES INC. The unaudited Condensed Consolidated Financial Statements for the three and nine months endedSeptember 30, 2020 have been revised to correct prior period errors as discussed in Note 1, "Basis of Presentation and Summary of Significant Accounting and Financial Reporting Policies" and Note 15, "Revisions of Previously Issued Unaudited Condensed Consolidated Financial Statements" in the Notes to the unaudited Condensed Consolidated Financial Statements included in Item 1, "Financial Statements" on this Quarterly Report on Form 10-Q. Accordingly, the tables presented in the Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") reflect the impact of those revisions. Information Related to Forward-Looking Statements This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and these statements involve substantial risks and uncertainties. All statements other than statements of historical fact contained in this Quarterly Report on Form 10-Q are forward-looking statements. Forward-looking statements generally relate to future events and our future financial or operating performance. Such statements generally include the words "believes," "plans," "intends," "targets," "will," "expects," "suggests," "anticipates," "outlook," "continues" or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, without limitation, statements about expected financial positions; results of operations; cash flows; financing plans; business strategy; operating plans; strategic alternatives; capital and other expenditures; competitive positions; growth opportunities for existing products; benefits from new technology and cost reduction initiatives, plans and objectives; and markets for securities.
We caution you that the foregoing list may not contain all of the forward-looking statements made in this Quarterly Report on Form 10-Q.
You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectation and projections about future events and trends that we believe may affect our business, financial condition, results of operations and prospects. Like other businesses, we are subject to risks and uncertainties that could cause our actual results to differ materially from our projections or that could cause other forward-looking statements to prove incorrect. Factors that could cause actual results to materially differ from those contained in the forward-looking statements, or that could cause other forward-looking statements to prove incorrect, include, without limitation, risks related to: the cyclical and seasonal nature of the industries that GCP serves; foreign operations, especially in emerging regions; changes in currency exchange rates; business disruptions due to public health or safety emergencies, such as the COVID-19 pandemic; the cost and availability of raw materials and energy; the effectiveness of GCP's research and development, new product introductions and growth investments; acquisitions and divestitures of assets and gains and losses from dispositions; developments affecting GCP's outstanding liquidity and indebtedness, including debt covenants and interest rate exposure; developments affecting GCP's funded and unfunded pension obligations; warranty and product liability claims; legal proceedings; the inability to establish or maintain certain business relationships and relationships with customers and suppliers or the inability to retain key personnel; the handling of hazardous materials and the costs of compliance with environmental regulation, and those factors set forth in our Annual Report on Form 10-K for the year endedDecember 31, 2020 . The forward-looking statements made in this Quarterly Report on Form 10-Q and our reported results should not be considered as an indication of our future performance. The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law. RESULTS OF OPERATIONS Business Description Summary We are engaged in the production and sale of specialty construction chemicals and specialty building materials through 26 -------------------------------------------------------------------------------- Table of Contents two global operating segments: •Specialty Construction Chemicals ("SCC"). Our SCC operating segment provides products, services and technologies to the concrete and cement industries, including concrete add mixtures 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. •SpecialtyBuilding Materials ("SBM"). Our SBM operating segment produces and sells sheet and liquid membrane systems and other products that protect both new and existing structures from water, air, and vapor penetration, as well as from fire damage. We also manufacture and sell specialized cementitious and chemical grouts used for soil consolidation and leak-sealing applications in addition to a moisture barrier system and installation tools for the flooring industry. We operate our business on a global scale. During the nine months endedSeptember 30, 2021 , approximately 50% of our net sales were generated outside of theU.S. We operate and have locations in over 30 countries and transact business in over 30 currencies. We manage our operating segments on a global basis to serve global markets. Currency fluctuations affect our reported results of operations, cash flows, and financial position. Impact of COVID-19 Pandemic The global health crisis caused by the COVID-19 outbreak and its resurgences has and will continue to negatively impact global economic activity, which, despite progress in vaccination efforts, remains uncertain and cannot be predicted with confidence. We have been closely monitoring the impact of COVID-19 and managing its effects on our business globally as the situation continues to evolve. As global economies continue to reopen we are seeing strong demand across business segments and geographies and expect this growth to continue into 2022 We are encouraged by stable demand across both our business segments globally during the third quarter 2021. We continued to capture improved pricing and realized positive benefits from our corporate restructuring, ongoing productivity actions in our manufacturing organization, and headquarters move. Despite this positive momentum, inflation headwinds, specifically raw material prices, logistics and global supply chain disruptions, had a tangible impact on our quarterly performance. The combination of these factors, adversely affected volumes in both the SBM and our SCC segments. We continue to take actions to protect margins and have announced new price increases in all regions to offset the inflationary headwinds we are experiencing. However, the effect of the ongoing global supply chain disruptions and continued increases in the cost of raw materials and freight transportation have outpaced our mitigating efforts and we expect margin compression to remain over the next few quarters. It is difficult for us to predict at this time the duration and extent of the impact of COVID-19 on the global construction industry and our business, financial position, results of operations, and liquidity although we expect that managing the impacts of the pandemic will be a part of our ongoing operations for the foreseeable future. We are focused on protecting the health, safety and well-being of our employees in accordance with guidelines issued by national and other health and safety authorities, while seeking to meet the needs of our global customers and suppliers. We will continue to actively monitor the situation and may take further actions that alter our business operations as may be required by federal, state or local authorities or that we determine are in the best interests of our employees, customers, suppliers and stockholders. The following is an overview of our financial performance for the third quarter and nine months endedSeptember 30, 2021 compared with the prior-year periods. 27 --------------------------------------------------------------------------------
Table of Contents
Three Months Ended Nine Months Ended
September 30, September 30,
2021 2020 % Change 2021 2020 % Change
(in millions, except per share amounts)
Net sales $ 249.6 $ 248.4 0.5 % $ 725.8 $ 660.5 9.9 %
Cost of goods sold 165.1 146.6 12.6 % 461.7 398.5 15.9 %
Gross profit 84.5 101.8 (17.0) % 264.1 262.0 0.8 %
Gross margin 33.9 % 41.0 % (7.1) % 36.4 % 39.7 % (3.3) %
Selling, general and administrative
expenses 59.2 64.7 (8.5) % 190.0 198.8 (4.4) %
Restructuring and repositioning
expenses 6.7 7.8 (14.1) % 22.6 15.0 50.7 %
Interest expense and related financing
costs 5.6 5.6 - % 16.8 16.3 3.1 %
Gain on sale of corporate headquarters - (110.2) 100.0 % - (110.2) 100.0 %
Other expense, net 3.6 2.7 33.3 % 5.2 6.4 (18.8) %
Income from continuing operations
before income taxes 9.4 131.2 (92.8) % 29.5 135.7 (78.3) %
Income tax expense (1.6) (31.0) (94.8) % (9.6) (34.0) (71.8) %
Loss from discontinued operations, net
of income taxes (0.1) (0.1) - % (0.3) (0.4) (25.0) %
Net income 7.7 100.1 (92.3) % 19.6 101.3 (80.7) %
Less: Net income attributable to
noncontrolling interests - (0.2) 100.0 % (0.2) (0.4) (50.0) %
Net income attributable to GCP
shareholders $ 7.7 $ 99.9 (92.3) % $ 19.4 $ 100.9 (80.8) %
Income from continuing operations
attributable to GCP shareholders 7.8 100.0 (92.2) % $ 19.7 $ 101.3 NM
Diluted EPS from continuing operations
attributable to GCP shareholders $ 0.10 $ 1.36 (92.6) % $ 0.26 $ 1.38 (81.2) %
Net sales:
SCC $ 142.0 $ 138.3 2.7 % $ 410.5 $ 379.6 8.1 %
SBM 107.6 110.1 (2.3) % 315.3 280.9 12.2 %
Total GCP net sales $ 249.6 $ 248.4 0.5 % $ 725.8 $ 660.5 9.9 %
Net sales by region:
North America $ 136.6 $ 141.2 (3.3) % $ 386.8 $ 372.7 3.8 %
Europe Middle East Africa (EMEA) 50.2 47.4 5.9 % 148.9 126.3 17.9 %
Asia Pacific 45.0 47.4 (5.1) % 144.3 127.4 13.3 %
Latin America 17.8 12.4 43.5 % 45.8 34.1 34.3 %
Total net sales by region $ 249.6 $ 248.4 0.5 % $ 725.8 $ 660.5 9.9 %
Third Quarter Performance Summary
Following is a summary of our financial performance for the third quarter ended
September 30, 2021 compared with the prior-year quarter.
•Net sales increased 0.5% to $249.6 million .
•Gross profit decreased 17.0% to $84.5 million ; gross margin decreased
approximately 710 basis points to 33.9%.
•Selling, general, and administrative expenses ("SG&A") decreased 8.5% to $59.2
million .
•Income from continuing operations attributable to GCP shareholders was $7.8
million , or $0.10 per diluted share, compared to $100.0 million , or $1.36 per
diluted share, for the prior-year quarter.
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Table of Contents
GCP Overview
Net Sales and Gross Margin
[[Image Removed: gcpwi-20210930_g1.jpg]][[Image Removed: gcpwi-20210930_g2.jpg]]
The following table identifies the period-over-period increase or decrease in
sales attributable to changes in volume and/or mix, product price, and the
impact of currency translation for the three ended September 30, 2021 from the
same period in the prior year.
Three Months Ended
Net Sales Variance Analysis Volume Price Currency Translation Total Change
SCC (0.3) % 1.8 % 1.2 % 2.7 %
SBM (4.4) % 0.6 % 1.5 % (2.3) %
Net sales (2.2) % 1.3 % 1.4 % 0.5 %
By Region:
North America (4.5) % 0.9 % 0.3 % (3.3) %
Europe Middle East Africa (1.0) % 3.4 % 3.5 % 5.9 %
Asia Pacific (5.7) % (1.4) % 2.0 % (5.1) %
Latin America 34.5 % 6.1 % 2.9 % 43.5 %
Net sales of $249.6 million for the third quarter ended September 30, 2021
increased $1.2 million , or 0.5%, from the prior-year quarter primarily due to
favorable sale pricing and foreign currency translation, partially offset by
lower sale volumes primarily in North America and Asia Pacific , partially offset
by increase in Latin America .
Gross profit of $84.5 million for the third quarter ended September 30, 2021
decreased $17.3 million , or 17.0%, from the prior-year quarter primarily due to
significant higher raw material costs. Gross margin decreased 710 basis points
to 33.9% primarily due to higher raw material and logistics costs.
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Table of Contents
The following table identifies the period-over-period increase or decrease in
sales attributable to changes in volume and/or mix, product price, and the
impact of currency translation for the nine months ended September 30, 2021 from
the same period in the prior year.
Nine Months Ended
Net Sales Variance Analysis Volume Price Currency Translation Total Change
SCC 4.9 % 1.2 % 2.0 % 8.1 %
SBM 9.4 % 0.2 % 2.6 % 12.2 %
Net sales 6.8 % 0.8 % 2.3 % 9.9 %
By Region:
North America 3.0 % 0.4 % 0.4 % 3.8 %
Europe Middle East Africa 8.6 % 2.1 % 7.2 % 17.9 %
Asia Pacific 9.5 % (1.1) % 4.9 % 13.3 %
Latin America 31.7 % 7.4 % (4.8) % 34.3 %
Net sales of $725.8 million for the nine months ended September 30, 2021
increased $65.3 million or 9.9%, compared with the prior-year period primarily
due to higher sales volumes in SBM and SCC and the favorable impact of foreign
currency translation. Sales volumes were higher in the nine months due to
increased construction activity in all regions.
Gross profit of $264.1 million for the nine months ended September 30, 2021
increased $2.1 million , or 0.8%, compared with the prior-year period, primarily
due to higher sales volumes in SBM and SCC, largely offset by higher raw
material and logistic costs. Gross margin decreased 330 basis points to 36.4%
primarily due to higher raw material and logistics costs.
SG&A
SG&A costs of $59.2 million decreased $5.5 million or 8.5%, for the third
quarter ended September 30, 2021 compared to the prior-year quarter primarily
due to lower employee-related costs resulting from restructuring programs and
lower incentives compensation costs. These favorable impacts were partially
offset by higher acquisition-related costs and facility costs related to the
corporate headquarters.
SG&A costs of $190.0 million decreased $8.8 million or 4.4%, for the nine months
ended September 30, 2021 compared to the prior-year period primarily due to
lower employee-related costs resulting from restructuring programs and
shareholder activism and other related costs incurred during the prior-year
period. These favorable impacts were partially offset by higher facility costs
related to corporate headquarters relocation.
Restructuring and repositioning expenses
2021 Restructuring Plan
Cumulative costs incurred under the 2021 Plan since its inception were $20.4
million with expected total costs of $32.0 million-$35.0 million . During the
current quarter, we increased our previously estimated total costs by $6.0
million due to higher employee related costs and exit costs related to the
Cambridge facility. We have achieved total annualized pre-tax cost savings
through a reduction in general and administrative expenses and a reduction in
overhead costs under the 2021 Plan of approximately $7 million at September 30,
2021 , which benefited both the SCC and the SBM operating segments and corporate
functions. We expect to realize total pre-tax cost structure savings associated
with the 2021 Plan of approximately $13 million to $15 million mostly in
general, administrative and overhead costs, with most of the savings occurring
in 2022. Substantially all of the restructuring actions under the 2021 Plan are
expected to be completed by June 2022 . With the exception of asset write offs,
substantially all of the restructuring and repositioning activities are expected
to be settled in cash.
2019 Phase 2 Restructuring and Repositioning Plan
Cumulative costs incurred under the 2019 Phase 2 Plan since its inception were
$34.0 million . We have achieved total annualized pre-tax cost savings through a
reduction in general and administrative expenses under the 2019 Phase 2 Plan of
approximately $19 million at September 30, 2021 , which benefited both the SCC
and the SBM operating segments and corporate functions. We expect to achieve
total estimated cost savings of approximately $20 million . With the exception of
asset write offs, substantially all of the restructuring and repositioning
activities are expected to be settled in cash.
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2019 Restructuring and Repositioning Plan Cumulative costs incurred under the 2019 Plan since its inception were$12.5 million . We achieved annualized pre-tax cost savings of approximately$18 million through a reduction in cost of goods sold as a result of supply chain, warehouse operations, and logistical enhancements that benefited both the SCC and SBM operating segments under the 2019 Plan. Substantially all of the activities under the 2019 Plan were completed byDecember 2020 . For further information on our restructuring expenses, please refer to Note 3, "Restructuring and Repositioning Expenses" in the Notes to the unaudited Condensed Consolidated Financial Statements. Pension Expense Defined benefit expense includes costs relating toU.S. and non-U.S. defined benefit pension and other postretirement benefit plans that provide benefits for retirees and former employees of divested businesses where we retained these obligations. Certain pension costs represent ongoing costs recognized quarterly, including service and interest costs, expected return on plan assets and amortization of prior service costs/credits. Certain pension costs during the third quarter and nine months endedSeptember 30, 2021 were$1.5 million and$4.4 million , respectively compared with$1.3 million and$3.9 million , respectively, for the corresponding prior-year periods. Other Expense, Net Other expense, net, consists primarily of interest income, foreign currency exchange gains (losses), defined benefit pension expenses exclusive of service costs, income from our Transition Services Agreement related to the sale ofDarex , and other items. Other expense, net stayed relatively consistent at$3.6 million during the third quarter endedSeptember 30, 2021 compared to$2.7 million in prior period. Other expense, net was$5.2 million and$6.4 million , respectively, during the nine months endedSeptember 30, 2021 and the prior-year period. The decrease of$1.2 million was primarily due to an indirect tax recovery inBrazil in the 2021 second quarter. Income Taxes Income taxes attributable to continuing operations during the third quarter endedSeptember 30, 2021 and the prior-year quarter was income tax expense of$1.6 million and$31.0 million , respectively, representing effective tax rates of 17.0% and 23.6%, respectively. Income tax attributable to continuing operations during the nine months endedSeptember 30, 2021 and the prior-year period was an income tax expense of$9.6 million and$34.0 million , respectively, representing effective tax rates of 32.5% and 25.1%, respectively. The difference between theU.S. federal income tax rate of 21.0% and our overall income tax rate for the third quarter was primarily due to valuation allowance releases inthe United States andAustralia , offset by income tax expense on non-deductible expenses. The difference between theU.S. federal income tax rate of 21.0% and our overall income tax rate for the nine months was primarily due to an income tax rate change in theUnited Kingdom , non-deductible executive compensation and other expenses, and foreign rate differential, offset by valuation releases inthe United States ,France andAustralia . In general, it is our practice and intention to permanently reinvest the earnings of our foreign subsidiaries and repatriate earnings only when tax efficient. 31 -------------------------------------------------------------------------------- Table of Contents Income from Continuing Operations Attributable to GCP Shareholders [[Image Removed: gcpwi-20210930_g3.jpg]][[Image Removed: gcpwi-20210930_g4.jpg]] Income from continuing operations attributable to GCP shareholders was$7.8 million for the third quarter compared to$100.0 million in the prior-year quarter. The prior period included gains from the sale of theCambridge, Massachusetts corporate headquarters. Income from continuing operations attributable to GCP shareholders was$19.7 million for the nine months compared to$101.3 million for the prior-year period. The prior period included gains from the sale of theCambridge, Massachusetts corporate headquarters. InJuly 2017 , we completed the sale of ourDarex business to Henkel. The results of operations of theDarex segment are presented as discontinued operations and, as such, have been excluded from continuing operations and segment results for all periods presented. Unless otherwise noted, the discussion and analysis pertains only to our continuing operations. Operating Segment Overview The following is an overview of the financial performance of the SCC and SBM operating segments for the third quarter and nine months compared with the prior-year periods. For further information on our accounting policies related to allocating certain functional and corporate costs and measuring segment operating income, please refer to Note 14, "Operating Segment and Geographic Information" in the Notes to the unaudited Condensed Consolidated Financial Statements included in Item 1, "Financial Statements" on this Quarterly Report on Form 10-Q. Refer to the table in the "Analysis of Operations" section for the related segment financial performance information. Segment operating margin is defined as segment operating income divided by segment net sales. It represents an operating performance measure related to ongoing earnings and trends in our operating segments that are engaged in revenue generation and other core business activities. We use this metric to allocate resources between the segments and assess our strategic and operating decisions related to core operations of our business. 32 -------------------------------------------------------------------------------- Table of Contents SCCNet Sales and Gross Margin [[Image Removed: gcpwi-20210930_g5.jpg]][[Image Removed: gcpwi-20210930_g6.jpg]] Net sales were$142.0 million for the third quarter endedSeptember 30, 2021 , an increase of$3.7 million or 2.7%, compared with the prior-year quarter. The increase was primarily due to favorable impact of price increase and foreign currency translation. SCC had favorable price increases of 1.8% during the third quarter. Gross profit was$44.0 million for the third quarter endedSeptember 30, 2021 , a decrease of$11.3 million or 20.4%, compared with the prior-year quarter. Gross margin decreased 900 basis points to 31.0% compared with the prior-year quarter primarily due to higher raw material costs. Net sales were$410.5 million for the nine months endedSeptember 30, 2021 , an increase of$30.9 million or 8.1%, compared with the prior-year period. The increase was primarily due to higher sales volumes in EMEA,Asia Pacific , andLatin America , as well as the favorable impact of foreign currency translation. Sales volumes increased 4.9% for the nine months endedSeptember 30, 2021 compared with the prior-year period due to higher construction and manufacturing activity. Gross profit was$141.6 million for the nine months endedSeptember 30, 2021 , a decrease of$7 million or 4.7%, compared with the prior-year period, primarily due to higher raw material costs. Gross margin decreased 460 basis points to 34.5% compared with the prior-year period primarily due to higher raw material and logistic costs, partially offset by price and volume. 33 -------------------------------------------------------------------------------- Table of Contents Segment Operating Income and Operating Margin [[Image Removed: gcpwi-20210930_g7.jpg]][[Image Removed: gcpwi-20210930_g8.jpg]] Segment operating income of$7.7 million for the third quarter endedSeptember 30, 2021 decreased$11.1 million , or 59.0%, compared with the prior-year quarter primarily due to lower gross profit. Segment operating margin of 5.4% decreased 820 basis points compared with the prior-year quarter primarily due to higher raw material costs. Segment operating income of$29.1 million for the nine months endedSeptember 30, 2021 decreased$8.6 million or 22.8%, compared with the prior-year period primarily due to lower gross profit. Segment operating margin of 7.1% decreased 280 basis points compared with the prior-year period primarily due to lower gross margin. 200 basis points improvement was achieved through greater operating leverage due to increased volume in the period.
SBM
Net Sales and Gross Margin [[Image Removed: gcpwi-20210930_g9.jpg]][[Image Removed: gcpwi-20210930_g10.jpg]] Net sales were$107.6 million for the third quarter endedSeptember 30, 2021 , a decrease of$2.5 million or 2.3%, compared with the prior-year quarter primarily due to lower sales volumes in most regions, partially offset by favorable impact of foreign currency translation and pricing. 34 -------------------------------------------------------------------------------- Table of Contents Gross profit was$40.8 million for the third quarter endedSeptember 30, 2021 , a decrease of$6.0 million or 12.8%, from the prior-year quarter, while gross margin decreased 460 basis points to 37.9% primarily due to higher raw material costs. Net sales were$315.3 million for the nine months endedSeptember 30, 2021 , an increase of$34.4 million or 12.2%, compared with the prior-year period primarily due to higher sales volumes in all regions and the favorable impact of foreign currency translation. Sales volumes increased 9.4% in the nine months endedSeptember 30, 2021 compared with the prior-year period due to higher construction and manufacturing activity in all regions. Residential volumes increased 19.4% for the nine months driven by the strong demand inNorth America for roofing materials. Building Envelope and Specialty Construction Products volumes increased 4.2% and 4.5%, respectively for the nine months compared with the prior-year period primarily due to higher construction activity. Gross profit was$123.6 million for the nine months endedSeptember 30, 2021 , an increase of$9.0 million or 7.9%, primarily due to higher sales volumes. Gross margin decreased 160 basis points to 39.2% from the prior-year period primarily due to higher raw material costs partially offset by higher sale volumes. Segment Operating Income and Operating Margin [[Image Removed: gcpwi-20210930_g11.jpg]][[Image Removed: gcpwi-20210930_g12.jpg]] Segment operating income of$20.9 million for the third quarter endedSeptember 30, 2021 decreased by$4.7 million , or 18.4%, compared with the prior-year quarter primarily due to lower gross profit. Segment operating margin decreased 390 basis points to 19.4% primarily due to higher raw material costs. Segment operating income of$60.2 million for the nine months endedSeptember 30, 2021 increased by$8.9 million or 17.3%, compared with the prior-year period primarily due to higher gross profit. Segment operating margin increased 80 basis points to 19.1% primarily due to higher sales volumes. FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES The following is an analysis of our financial condition, liquidity and capital resources atSeptember 30, 2021 . Cash Resources and Available Credit Facilities AtSeptember 30, 2021 , we had$481.5 million of cash and cash equivalents and available liquidity of$347.2 million , of which$324.5 million was held in theU.S. and$40.3 million was available under various non-U.S. credit facilities. We expect to meet ourU.S. cash and liquidity requirements with cash on hand, cash we expect to generate during 2021 and thereafter, future borrowings, if any, and other available liquidity, including royalties and service fees from our foreign subsidiaries. We may also repatriate future earnings from foreign subsidiaries if that results in minimal or noU.S. tax consequences. We expect to have sufficient cash and liquidity to finance ourU.S. operations and growth strategy and meet our debt obligations. Our non-U.S. credit facilities are extended to various subsidiaries that use them primarily to issue bank guarantees supporting trade activity and provide working capital during occasional cash shortfalls in certain foreign entities. We generally renew 35
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Table of Contents these credit facilities as they expire. Sale and Relocation of Corporate Headquarters InJuly 2020 , we sold our corporate headquarters inCambridge, Massachusetts for net cash proceeds of$122.5 million . During 2020, we made cash tax payments of approximately$15 million related to the gain on sale of$110.2 million and expect to make additional cash tax payments of approximately$13 million in future years. Pursuant to the terms of the lease, we are required to make certain payments for real estate taxes and other operating expenses related to the property. InMarch 2021 , the Board approved a business restructuring and repositioning plan related to the relocation of the Company's corporate headquarters to theAtlanta, Georgia area, the closure of itsCambridge, Massachusetts campus, the build-out of new global research and development locations near theBoston /Cambridge area, as well as the consolidation of other regional facilities and offices, including an organizational redesign, which is expected to lower costs. We expect to incur approximately$6 million of capital expenditures mostly related to the build-out of the global R&D facility, corporate headquarters and information technology infrastructure associated with the relocation. Share Repurchase Program InJuly 2020 , our Board of Directors authorized a program to repurchase up to$100 million of our common stock effective throughJuly 2022 . The share repurchase program is subject to a periodic review by the Board and may be suspended periodically or discontinued at any time. We plan to fund repurchases from our existing cash balance. Analysis of Cash Flows The following table summarizes our cash flows for the nine months endedSeptember 30, 2021 and the prior-year period:
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