Business Radar | Gcp Applied Technologies Inc.

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Delivering Value 2016 Annual Report

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Through applied knowledge and service excellence, GCP Applied Technologies provides premier specialty construction chemicals and specialty building materials for many of the world’s most renowned structures, and packaging technologies for the best-known consumer brands, delivering superior results for all our customers. Technologies for Construction GCP Applied Technologies’ Specialty Construction Chemicals and Specialty Building Materials segments offer solutions for nearly every aspect of the built environment. SPECIALTY CONSTRUCTION CHEMICALS Water Reducers Concrete Management System • ADVA® • Verifi® Durability Products Cement Additives • STRUX® • ESE® • DCI® • CBA® • Eclipse® • HEA2® Shotcrete System • Tytro® SPECIALTY BUILDING MATERIALS Waterproofing and Fire Protection Air Barriers • Monokote® • PrePrufe® Specialty Products • Bituthene® • De Neef® • Perm-A-Barrier® • BETEC® • Silcor® • Servidek® Flooring Underlayments Roofing Underlayments • Ice & Water Shield®

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Critical waterproofing application provided by GCP PrePrufe® membrane for Crossrail Place at Canary Wharf Station in London. Technologies for Metal Packaging GCP Applied Technologies’ Darex Packaging Technologies segment ensures the integrity of all types of metal packaging. Our sealants and coatings for cans and closures include valued functionalities like BPA-NI, oxygen scavenging, heat seal and easy removal of contents. DAREX PACKAGING TECHNOLOGIES Can Sealants • 2pc and 3pc beverage cans • 2pc and 3pc food cans • Aerosol and general line cans • Industrial containers Internal and External Coatings • 3pc cans • 2pc DRD • Monobloc cans, bottles and tubes • Closures: – Crowns – Aluminum ROPP – Lug caps Closure Sealants • Crowns • Aluminum ROPP • Plastic caps • Lug caps • Performance additives On the cover • Marina Bay Sands in Singapore was constructed using Daracem® and Daratard® admixture products and Monokote® fire proofing. • The Mercedes-Benz Museum in Germany used Eclipse® Floor shrinkage-reducing admixture to achieve flooring with enhanced durability and polished appearance. • Apperta® coatings from GCP bring the superior performance and regulatory expertise to this demanding segment of the can industry. 01

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A Letter from the President and Chief Executive Officer Shareholders, Customers, and Colleagues: FIRST ANNIVERSARY AS A PUBLIC COMPANY While 2016 had its share of unpredictability from geopolitical events to the financial markets, GCP has been well-positioned to deliver value. Our company’s markets— construction and packaging—are both healthy and benefiting from long-term secular trends. Factors such as a growing global population, robust construction spending, more stringent building regulations, greater attention to environmental and sustainability concerns, as well as food safety, contribute to increasing demand for our products and technical services. The company’s stock began trading on the New York Stock be more efficient. We help them deliver sustainable solutions to Exchange in February 2016. Success in our first year has been their customers, while reducing costs and enhancing perfor- built on the dedication of each of our colleagues around the globe mance. We are also committed to producing these products who made countless contributions. The strong teams, systems, safely at our facilities and in the communities where we operate. processes, and culture we are building provide us with momentum Each of our three business segments is commercializing superior- for the next phase of our development as a new company. performing brands and solutions. In Specialty Construction Chemicals, we are creating a new category in the ready-mix DELIVERING ON COMMITMENTS concrete industry with our Verifi® in-transit concrete management Our company mission statement highlights our goal to “deliver system which helps customers deliver higher-quality concrete world-class products, applied knowledge, and service excellence at a lower cost. Our Specialty Building Materials segment has to create value.” To do so, we are following our main principles: launched new Silcor® liquid waterproofing and Perm-A-Barrier® maintaining customer focus, leveraging leading positions globally, weather barrier products that improve building performance and capitalizing on formulation expertise and technological devel- reduce labor costs. Finally, our Darex Packaging Technologies opments, focusing investments on growth, and improving offers customers innovative BPA-NI coatings to meet stringent productivity. customer requirements. Over the past year, we have stayed on course with our business We also completed two bolt-on acquisitions in 2016 to augment strategy, maintaining strong positions in key markets and pursuing our organic commercial and technological developments. In acquisitions. We have concentrated on creating shareholder value November, we acquired Halex Corporation, a company best by deploying resources to increase sales, earnings and cash flow. recognized for its proprietary rolled moisture barrier flooring A fundamental part of our strategy is producing and delivering membrane. This acquisition complements our exterior building innovative, best-in-class products and services. Across all three products portfolio with the addition of new products for appli- of our business segments, GCP products enable customers to cations inside buildings and increases our position in renovation 02

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Our Commitment to Building a More Sustainable World GCP products create multiple connected benefits related to performance, cost, quality and sustainability. Our products enable our customers to reduce their use of energy and water; to build structures that are safer, sturdier and more energy efficient; and to make packaging that improves food safety, lengthens shelf life and enables reuse of materials. Within our operations, we are committed to embedding sustainability by reducing our environmental footprint, protecting each other from harm, providing economic and social benefits to our stakeholders and generating profits for our investors. SPECIALTY CONSTRUCTION CHEMICALS SPECIALTY BUILDING MATERIALS DAREX PACKAGING TECHNOLOGIES Our cement additives reduce the energy Our building envelope products work Our products support metal cans and needed for cement production, and our together as a system to improve energy closures that enhance food safety, extend admixtures alter the properties of concrete efficiency, enhance building safety, and shelf life, and have high recycling rates. to improve durability of structures. Verifi provide durability in the face of extreme We also work with customers to meet technology provides further benefits by weather events. beyond-compliance needs such as our reducing concrete waste and optimizing industry-leading BPA-NI can coatings. mix design. and retrofit projects. In August, we acquired the intellectual prop- LOOKING AHEAD erty and assets of SensoCrete®. This investment enables us to In 2017, we will continue to expand our new product pipelines incorporate additional measurement capabilities into Verifi®. and reinforce the “GCP Total Business Advantage”—systems and application solutions driven by new technologies and digital tools FULL YEAR 2016 RESULTS* which add layers-of-value for our rapidly evolving end-markets. In 2016, GCP’s revenue grew 2% on a constant currency basis By focusing on the development of these high-value, specialized excluding Venezuela to $1.38 billion and declined 4% to $1.36 product applications, we will continually refresh our portfolio, billion on an as-reported basis. Our construction revenues grew create leading brands and services, and ensure GCP is positioned 3% on a constant currency basis excluding Venezuela primarily to grow. due to the healthy North American market. In closing, I would like to thank all of our shareholders, customers, We are pleased with the margin expansion we were able to and employees for their support. I look forward to another generate in 2016. Our Adjusted Gross Margin expanded 180 successful year in building our new company. basis points to 39.7%. Excluding Venezuela, Adjusted EBIT grew Sincerely, approximately 7% to $211 million, and Adjusted EBIT Margins increased to 15.7% from 14.6% in 2015. We continued to deliver strong Adjusted Free Cash Flows, total- ing $114 million in 2016, which supports our ability to reinvest in our key commercial growth programs and pursue strategic GREGORY E. POLING bolt-on acquisitions. President and Chief Executive Officer *Net sales on a constant currency basis and excluding Venezuela, Adjusted Gross Margin, Adjusted EBIT excluding Venezuela, Adjusted EBIT Margin excluding Venezuela, and Adjusted Free Cash Flow are Non-GAAP financial measures. Definitions of these Non-GAAP measures as well as reconciliations to the most comparable GAAP measure may be found in the “Analysis of Operations” table in Item 7—Management’s Discussion and Analysis of our Form 10-K for the year ended December 31, 2016 or at the end of this Annual Report. 03

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Financial Highlights Net Sales Adjusted Gross Profit* Sales by Segment ($ in millions) ($ in millions) $1,480.4 $1,418.6 $1,355.8 $523.8 $537.7 $537.9 $1,500 $600 37.9% 35.4% 39.7% 23% $1,250 $500 $1,000 $400 $1.36B 46% 2016 Net Sales $750 $300 31% $500 $200 $250 $100 Specialty Construction Chemicals 0 0 Specialty Building Materials 2014 2015 2016 2014 2015 2016 Darex Packaging Products Adjusted Gross Margin Adjusted EBIT* Adjusted EBIT ROIC* Sales by Region ($ in millions) $195.4 $226.7 $213.8 36.5% 48.0% 38.4% $250 50% 16.0% 10% 15.8% 13.2% $200 40% 24% Facilities in 42% $150 30% 35 Countries $100 20% 24% $50 10% North America 0 0 Europe, the Middle East and Africa 2014 2015 2016 2014 2015 2016 Asia Pacific Adjusted EBIT Margin Latin America *A definition of this Non-GAAP measure as well as a reconciliation to the most comparable GAAP measure may be found in Item 7 of the Company’s Form 10-K included in this Annual Report. 04

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Delivering Value 2016 Form 10-K

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2016 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 1-137533 GCP Applied Technologies Inc. Delaware 47-3936076 (State of Incorporation) (I.R.S. Employer Identification No.) 62 Whittemore Avenue, Cambridge, Massachusetts 02140-1623 (617) 876-1400 (Address and phone number of principal executive offices) Securities registered pursuant to Section 12(b) of the Exchange Act: Title of each class Name of each exchange on which registered Common Stock, $.01 par value New York Stock Exchange, Inc. Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes No 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 and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted 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 if disclosure of delinquent filers pursuant to Item 405 of Regulations S-K is not contained herein and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act. Large accelerated filer Accelerated filer Non-accelerated filer (Do not check if a smaller reporting company) Smaller reporting company Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No The aggregate market value of GCP Applied Technologies' voting and non-voting common equity held by non-affiliates as of June 30, 2016 (the last business day of the registrant's most recently completed second fiscal quarter) based on the closing sale price of $26.04 as reported on the New York Stock Exchange was $1,844,781,249. At February 27, 2017, there were 71,185,929 shares of GCP Applied Technologies Common Stock, $.01 par value, outstanding. DOCUMENTS INCORPORATED BY REFERENCE Portions of the definitive proxy statement for our 2017 Annual Meeting of Stockholders are incorporated by reference in Part III of this Form 10-K.

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TABLE OF CONTENTS PART I Item 1. Business 2 Item 1A. Risk Factors 12 Item 1B. Unresolved Staff Comments 23 Item 2. Properties 23 Item 3. Legal Proceedings 24 Item 4. Mine Safety Disclosures 24 Executive Officers of the Registrant 24 PART II Item 5. Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities 26 Item 6. Selected Financial Data 27 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 29 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 60 Item 8. Financial Statements and Supplementary Data 61 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 114 Item 9A. Controls and Procedures 114 Item 9B. Other Information 114 PART III Item 10. Directors, Executive Officers and Corporate Governance 114 Item 11. Executive Compensation 114 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 114 Item 13. Certain Relationships and Related Transactions and Director Independence 115 Item 14. Principal Accountant Fees and Services 115 PART IV Item 15. Exhibits and Financial Statement Schedules 116 Item 16. Form 10-K Summary 118 SIGNATURES 119

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Presentation of Information Unless the context requires otherwise, references to "GCP Applied Technologies Inc.", "GCP", "we", "us", "our" and "the Company" refer to GCP Applied Technologies Inc., and its consolidated subsidiaries for periods subsequent to its separation from W.R. Grace & Co. on February 3, 2016. For periods prior to February 3, 2016, these terms refer to the combined historical business and operations of W.R. Grace & Co.’s construction products and packaging technologies businesses as they were historically managed as part of W.R. Grace & Co. Unless the context requires otherwise, references to "Grace" refer to W.R. Grace & Co., and its consolidated subsidiaries, which is the Company’s former parent company. References in this Annual Report on Form 10-K to the "Separation" refer to the legal separation and transfer of Grace’s 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. Forward-Looking Statements This document contains, and our other public communications may contain, forward-looking statements, that is, information related to future, not past, events. Such statements generally include the words "believes," "plans," "intends," "targets," "will," "expects," "suggests," "anticipates," "outlook," "continues" or similar expressions. Forward-looking statements include, without limitation, expected financial positions; results of operations; cash flows; financing plans; business strategy; operating plans; 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. 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 events to materially differ from those contained in the forward-looking statements include, without limitation: risks related to foreign operations, especially in emerging regions; the cost and availability of raw materials and energy; the effectiveness of GCP's research and development and growth investments; acquisitions and divestitures of assets and gains and losses from dispositions; developments affecting GCP’s outstanding indebtedness; developments affecting GCP's funded and unfunded pension obligations; GCP's legal and environmental proceedings; uncertainties related to the Company’s ability to realize the anticipated benefits of the separation transaction; the inability to establish or maintain certain business relationships and relationships with customers and suppliers or the inability to retain key personnel; costs of compliance with environmental regulation and those factors set forth in Item 1A of this Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, which have been filed with the Securities and Exchange Commission ("SEC") and are available on the Internet at www.sec.gov. Our reported results should not be considered as an indication of our future performance. Readers are cautioned not to place undue reliance on our projections and forward-looking statements, which speak only as of the date thereof. We undertake no obligation to publicly release any revisions to the projections and forward-looking statements contained in this document, or to update them to reflect events or circumstances occurring after the date of this document. Trademarks and Trade Names We own or have rights to trademarks, service marks, copyrights and trade names that we use in conjunction with the operation of our business, including, except as otherwise indicated, the trademarks, service marks or trade names used in this report. A mark designated with a circled “R” (e.g., ADVA®) means that the mark has been registered in the USA or other countries where we sell products. This report may also include trademarks, service marks and trade names of other companies. Each trademark, service mark or trade name of any other company appearing in this Annual Report on Form 10-K belongs to its holder. Unless otherwise indicated, use or display by us of other parties’ trademarks, service marks or trade names is not intended to and does not imply a relationship with the trade name owner, or endorsement or sponsorship by us of the trademark, service mark or trade name owner. 1

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PART I. Item 1. BUSINESS BUSINESS OVERVIEW GCP Applied Technologies Inc. produces and sells specialty construction chemicals, specialty building materials and packaging sealants and coatings through three global operating segments in which we have achieved leadership positions. Specialty Construction Chemicals manufactures and markets concrete admixtures, which enhance the properties of concrete and other cementitious construction materials, and cement additives, which improve the performance of Portland cement, the most widely used construction material in the world. Specialty Building Materials manufactures and markets building envelope, residential building, and specialty construction products that protect structures from water, vapor transmission, air penetration, and fire damage. Darex Packaging Technologies manufactures and markets sealants and coatings that safeguard the packaging materials and preserve the contents of beverage and food containers and other consumer and industrial applications. GCP Applied Technologies Inc. was incorporated on May 1, 2015 for the purpose of holding the construction products and packaging technologies businesses of W. R. Grace & Co. On February 3, 2016, Grace shareholders received one common share of GCP for every one common share of Grace held and the construction products and packaging technologies businesses of Grace were transferred to GCP, thereby completing our legal separation from Grace ("the Separation"). On February 4, 2016, we began "regular way" trading on the New York Stock Exchange under the ticker symbol "GCP." For the year ended December 31, 2016, we had net sales of $1.4 billion, income before income taxes of $106.0 million and net income of $72.8 million. Approximately 60% of our 2016 sales were generated outside the United States and we operate in approximately 35 countries. Strategy Overview Our objective is to deliver value to shareholders by growing our sales, earnings, cash flow, and return on invested capital through the implementation of our business strategies. The Specialty Construction Chemicals, Specialty Building Materials and Darex Packaging Technologies segments produce and market a portfolio of high- performance products for leading global concrete and cement producers, architects, engineers and developers, packaging and closure manufacturers, and food and beverage companies. Our products must satisfy our customers’ well-defined performance requirements and specifications to provide high value, although they typically represent a low percentage of the total cost of our customers’ end-products or projects. We implement the following growth strategies using a number of key levers to accelerate progress toward our objective: Leverage Segment Leadership Positions for Sales Growth — We utilize our global manufacturing operations, technical service and support footprint, research and development capabilities, and sales and marketing organization to increase our geographic and customer penetration worldwide. Our sales force employs our applied intelligence framework - a combination of integrated customer relationship management ("CRM") tools and capabilities and cross-product knowledge - to pursue higher value project-centric and customer-centric opportunities for GCP’s complete portfolio of high-performing products. We make targeted investments to expand our capabilities in geographies and segments where trends and economic cycles present the best opportunities. Strengthen and Enhance Our Segment Positions with Product Innovation — We seek to strengthen our position as an industry innovator by investing in research and development activities focused on commercializing differentiated products and services and, where possible, creating new product categories. To drive this innovation, we employ our business model of introducing and supporting new technologies and categories through our centralized research and development center in Cambridge, Massachusetts as well as our regional global applications labs. Examples of our category creation successes include our patented intelligent concrete monitoring system, VERIFI®, which provides in-transit data on concrete quality and truck location, our PREPRUFE® fully-bonded pre-applied waterproofing technology, and ICE & WATER SHIELD®, a category- leading self-adhesive underlayment for sloped roofs. 2

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Maintain Strong Customer Focus — A key aspect of our strategy is to deliver product and technology solutions to our customers that help improve the performance of their products and the productivity of their manufacturing operations. We believe that maintaining a close partnership with our customers, which includes providing on-site technical support, allows us to effectively focus our innovation efforts and respond to their changing demands at a global, regional and local level. Our goal is to demonstrate for each customer the layers of value we provide, which include outstanding product performance and technical service as well as savings for customers through reduced product application cost and improved building performance. Increase Productivity by Optimizing Global Supply Chain Opportunities — GCP’s productivity strategies focus on operations, logistics and the supply chain. We have established procurement and product formulation expertise to manage our product costs and production efficiencies. Product formulations are optimized at our regional development labs around the world. These formulations are designed to meet specific customer needs while also considering the costs of the various raw material options available to meet those needs. Our global supply chain organization balances local raw material supply with global contracts that improve our buying power. Our global manufacturing network also maximizes production and delivery efficiencies. Grow Through Strategic Acquisitions — When consistent with our business strategies, we will seek strategic, bolt-on acquisitions and alliances to accelerate our customer and geographic penetration, broaden our technology and product portfolios and bolster our manufacturing capacity and capability. Drive Cash Flow Conversion and Adjusted EBIT Return on Invested Capital to Deliver Long-Term Value to Our Shareholders — We believe our strategies will allow us to accelerate our cash flow conversion to invest in research and development activities, manufacturing operations, technical service and sales organizations, strategic acquisitions and to return excess capital to shareholders. PRODUCTS AND SEGMENTS Specialty Construction Chemicals Operating Segment (SCC) We supply concrete admixtures, polymer fibers and in transit monitoring systems to concrete producers that are used to improve the rheology, workability, quality, durability and other engineering properties of concrete, mortar, masonry and other cementitious construction materials. We also supply cement additives to cement manufacturers that are used to improve energy efficiency and reduce carbon dioxide in cement processing, enhance the characteristics of finished cement and improve ease of use. We compete with several large international suppliers and regionally with smaller competitors. Competition for our products is based on product performance, technical support, the breadth of our manufacturing and distribution infrastructure and our ability to bring value to our customers in the construction industry. Our major global competitors are BASF and Sika. The following table sets forth SCC sales as a percentage of GCP total revenue. 2016 2015 2014 % of GCP % of GCP % of GCP (In millions) Sales Revenue Sales Revenue Sales Revenue Concrete $ 469.1 34.6% $ 532.7 37.5% $ 541.9 36.6% Cement 154.7 11.4% 161.6 11.4% 184.4 12.5% Total SCC Revenue $ 623.8 46.0% $ 694.3 48.9% $ 726.3 49.1% 3

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The following table sets forth SCC sales by geographic region as a percentage of SCC total revenue. 2016 2015 2014 % of SCC % of SCC % of SCC (In millions) Sales Revenue Sales Revenue Sales Revenue North America $ 243.0 39.0% $ 242.0 34.9% $ 235.0 32.4% Europe Middle East Africa (EMEA) 136.2 21.8% 141.2 20.3% 170.3 23.4% Asia Pacific 179.0 28.7% 181.9 26.2% 185.5 25.5% Latin America 65.6 10.5% 129.2 18.6% 135.5 18.7% Total SCC Revenue $ 623.8 100.0% $ 694.3 100.0% $ 726.3 100.0% SCC consists of two product groups: concrete admixtures and cement additives. Concrete admixtures The concrete admixtures product group includes concrete admixtures, admixtures for decorative concrete and concrete production management systems. Concrete admixtures allow concrete producers to use a limited selection of locally-sourced raw materials (cement and aggregates) to produce concrete to meet a wide variety of performance specifications. Our products are based on a set of core platform technologies formulated regionally into admixtures tailored to local end-use requirements. For example, our MIRA® admixtures allow concrete to be produced with a lower amount of water, which improves the compressive strength and the long-term durability of the concrete. ADVA® admixtures are used to make flowable "self-compacting concrete" which is popular in precast concrete manufacturing where the rapid filling of large molds is a major driver of economics. ECLIPSE® admixtures are used to minimize the formation of shrinkage cracks in critical applications, such as bridge decks. STRUX® polymeric fibers are designed to improve the ductility of concrete which is a naturally brittle material. In some cases, STRUX® polymeric fibers may be used to replace steel reinforcement near the surface of concrete that will be exposed to corrosive de-icing salts. Admixtures for decorative concrete are used to create decorative/architectural concrete. PIERI® surface retarders are used to obtain exposed aggregate finishes in precast and cast-in-place concrete, achieving the desired surface appearance. PIERI® release agents allow for the efficient removal of mold forms with a resultant blemish-free concrete surface. Concrete production management systems provide sophisticated process monitoring and control while concrete is in transit to the jobsite. Our patented concrete production management system, sold under the VERIFI® brand name, measures, monitors and manages critical concrete properties and systematically adds water or admixtures to maintain optimum concrete flow properties. The result is increased product quality and consistency of concrete, fewer rejected loads, increased jobsite efficiency and minimized costly project delays. Cement additives Portland cement is the binding agent for concrete. National standards usually dictate the compressive strength and other properties that must be met by cement. Cement additives are used to reduce the energy required to mill cement to the desired fineness and to improve the handling characteristics of the powdered material. These products are also used to adjust the performance of Portland cement, permitting our customers to optimize production economics. Examples include HEA2® Cement Additives, which are used around the world to improve the energy efficiency of cement grinding operations and CBA® Cement Additives, which are used to produce higher cement strength, providing a high level of process flexibility to the cement manufacturer. Increasingly, cement manufacturers seek to reduce the environmental impact of their manufacturing processes; our additives provide greater flexibility in raw materials, enabling customers to achieve improvements such as reductions in energy use and CO2 emissions. 4

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The SCC product portfolio includes: Products Uses Customers Key Brands Concrete Chemicals and polymeric fibers used to Ready-mix and precast ADVA®, STRUX®, MIRA®, POLARSET®, admixtures reduce the production and in-place concrete producers, engineers ECLIPSE®, DARACEM®, DARASET®, costs of concrete, increase the and specifiers DCI®, RECOVER®, WRDA®, ZYLA® performance of concrete and improve the life cycle cost of structures Admixtures for Products for architectural concrete Precast concrete producers PIERI® decorative include surface retarders, coatings, and architects concrete pigments and release agents used by concrete producers and contractors to enhance the surface appearance and aesthetics of concrete Concrete Proprietary sensors, algorithms and Ready-mix concrete VERIFI® production control systems which monitor and manufacturers management adjust the flow properties while in transit systems to construction sites, providing concrete producers quality control and operational efficiencies Cement Formulated chemicals added to the Cement manufacturers CBA®, SYNCHRO®, HEA2®, TDA®, ESE® additives milling stage of the cement manufacturing process to improve plant energy efficiency, enhance the performance of the finished cement and help our customers meet environmental regulations and reduce their CO2 footprints Specialty Building Materials Operating Segment (SBM) We supply building and flooring materials used in both new construction and renovation/repair projects. We manufacture and sell products that protect structures from water, vapor transmission and air penetration as well as fire damage. Our products also reduce energy usage and improve the long-term durability of structures. They include waterproofing membranes and roofing underlayments for use in commercial and residential buildings, polymeric grouts for use in waterproofing and soil stabilization applications, air and vapor barriers, cementitious grouts, passive fire protection, and a flooring barrier system to protect surface flooring from moisture and alkalinity damage, as well as flooring installation products. Our products are specified and installed on commercial, residential and infrastructure projects around the world. Our technology platforms, project selling competencies and international reach are the foundation for our industry leadership. We are dedicated to understanding local codes and construction practices so that our technology solutions address the regional needs of our customers. Our global specification sales organization emphasizes its technical expertise and has established relationships with key influencers and decision makers across the entire project selling value chain including architects, engineers, general contractors, specialty contractors and other channel partners. We continue to expand our international presence in targeted regions with our core product lines and by adding new technologies. Our specialty building materials product sales are global. We engage with global architectural and contracting firms as well as local specifiers, engineers, contractors and building material distributors that influence the buying decisions for our products. We compete globally with several large international construction materials suppliers, also regionally and locally with numerous smaller competitors. Competition for our products is based on product performance, technical support and service, brand name recognition and price. Our major competitors are Sika, RPM and Carlisle. 5

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The following table sets forth SBM sales as a percentage of GCP total revenue. 2016 2015 2014 % of GCP % of GCP % of GCP (In millions) Sales Revenue Sales Revenue Sales Revenue Building Envelope $ 236.3 17.4% $ 234.7 16.6% $ 236.3 16.0% Residential Building Products 89.2 6.6% 79.3 5.6% 59.2 4.0% Specialty Construction Products 97.2 7.2% 84.1 5.9% 83.8 5.6% Total SBM Revenue $ 422.7 31.2% $ 398.1 28.1% $ 379.3 25.6% The following table sets forth SBM sales by geographic region as a percentage of SBM total revenue. 2016 2015 2014 % of SBM % of SBM % of SBM (In millions) Sales Revenue Sales Revenue Sales Revenue North America $ 265.9 62.9% $ 229.6 57.7% $ 201.0 53.0% Europe Middle East Africa (EMEA) 89.5 21.2% 94.7 23.8% 100.4 26.4% Asia Pacific 62.2 14.7% 69.4 17.4% 72.0 19.0% Latin America 5.1 1.2% 4.4 1.1% 5.9 1.6% Total SBM Revenue $ 422.7 100.0% $ 398.1 100.0% $ 379.3 100.0% SBM consists of three product groups: building envelope, residential building products and specialty construction products. Building envelope products Building envelope products protect structures from water and help manage air and vapor transmission through building walls. The majority of sales in this product group are waterproofing products that protect commercial structures, residential structures and infrastructure. Our waterproofing products are used in both above-grade and below-grade applications. Above grade, our products protect the material to which they are applied and allow architects to design occupied spaces free from water infiltration, and below grade, our products enable the construction of structures in challenging sites, including portions below the existing water table. Examples of these products include our self-adhesive rubberized asphalt membrane, BITUTHENE® and our innovative pre-applied sheet membrane, PREPRUFE®. Our BITUTHENE® product line is manufactured globally and has a long track record of providing waterproofing in the most challenging conditions. Designers and contractors have relied on BITUTHENE® for over 40 years and continue to specify it by name. We pioneered the pre-applied waterproofing category with our Advanced Bond Technology™ found in PREPRUFE®. Our unique technology allows a waterproofing membrane to be installed on the ground or on walls before concrete is placed for a foundation. This technology also allows waterproofing of walls normally inaccessible during the construction of a building, such as foundations in densely populated cities. Major projects around the world have successfully implemented our PREPRUFE® system and it continues to gain recognition for its waterproofing performance. Residential building products Residential building products consist of roofing underlayments, flashing and weather barriers. Roofing underlayments are placed below the outermost roof covering, such as shingles, to protect sloped roofs from water damage caused by wind-driven rain and ice dams. ICE & WATER SHIELD® roofing underlayments are known throughout the industry and are sold in North America through a network of distributors. The VYCOR® flashing portfolio consists of high performance self-adhered flashing products that provide premium protection against water infiltration in critical areas such as windows and doors. VYCOR® flashing reduces the risk of mold and rot development and contributes to energy efficiency by sealing air leakages from the building. 6

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Specialty construction products Specialty construction products include fire protection, chemical grouts, cementitious grouts and mortars, and specialty flooring products. Passive fire protection products are marketed under the MONOKOTE® brand. Chemical grouts are sold under the DE NEEF® brand and are used to repair cracks in concrete, seal water leaks in commercial buildings and infrastructure in addition to soil stabilization. BETEC® cementitious grouts and mortars are used in applications where specific strength and/or flow are required. Examples of these applications include assembly of concrete precast elements for wind turbines, filling under rails for railroads and providing a high-strength surface for heavy machinery in industrial settings. VERSASHIELD® is our branded fiberglass membrane that is installed between a concrete subfloor and surface flooring protecting the surface flooring from moisture and alkalinity related damage. Other flooring installation products include seam tapes, tack strips, underlayment, and tools and accessories used for the installation of carpet, ceramic, laminate stone and other surface flooring. The SBM product portfolio includes: Products Uses Customers Key Brands Building Structural barrier systems to prevent Architects, consultants and BITUTHENE®, PREPRUFE®, ADPRUFE®, envelope above and below ground water, vapor structural engineers; specialty HYDRODUCT®, ADCOR®, SILCOR®, products and air infiltration of the building waterproofing, masons, dry wall PERM-A-BARRIER® envelope of commercial structures, contractors and general including self-adhered sheet and liquid contractors; specialty membranes, joint sealing materials, distributors drainage composites and waterstops Residential Specialty roofing membranes and Roofing contractors, home ICE & WATER SHIELD®, TRI-FLEX®, building flexible flashings for windows, doors, builders and remodelers; VYCOR® products decks and detail areas, including fully building material distributors, adhered roofing underlayments, lumberyards and home centers; synthetic underlayments and self- architects and specifiers adhered flashing Fire protection Fire protection products spray-applied to Local contractors and specialty MONOKOTE® materials the structural steel frame, encasing and subcontractors and applicators; insulating the steel and protecting the building materials distributors; building in the event of fire and industrial manufacturers; enhancing the heat resistance during a architects and structural fire engineers Chemical grouts Products for repair and remediation in Contractors; specialty DE NEEF®, HYDRO ACTIVE®, waterproofing applications and soil distributors; municipalities; and SWELLSEAL®, DE NEEF® PURe™ stabilization other owners of large infrastructure facilities Cementitious Cementitious grouts and mortars used Specialty contractors engaged BETEC® grouts and for under filling and gap filling in the repair of concrete, mortars installation of new precast concrete elements and infrastructure repair Specialty Flooring moisture barriers and Distributors; contractors; home VERSASHIELD®, ORCON® flooring installation products centers; flooring manufacturers; products and large commercial end users Darex Packaging Technologies Operating Segment (Darex) We supply sealants and coatings to global manufacturers of beverage, food, consumer and industrial metal containers and closures. These products, designed with our significant regulatory and application knowledge, protect the packaging materials and preserve their contents. We are the global leader in can sealants. 7

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Our growth is driven by innovation of higher performing products, continuous development of new applications, increasing demand for sustainability, rising disposable income in emerging regions, general economic growth and increasing demand for canned and bottled packaged products. Our customers trust and rely on our global technical service as well as our expertise in global regulatory compliance (including food laws) to address industry challenges and enhance their productivity. We seek to develop and introduce new products that add additional value to the current and future needs of our customers, such as our introduction of new BPA-NI coatings and products with oxygen scavenging functionality. We believe we are well positioned to capture industry growth, especially in emerging regions with our global infrastructure. Our Darex business is global. We compete with several large international suppliers, and regionally, with many smaller competitors. Our primary global competitors are Altana, Akzo Nobel, PPG and Valspar. Competition for our products is generally based on product performance and reliability, technical service, price and additional value-added features to address the needs of our customers, end-users and brand owners. The following table sets forth Darex sales as a percentage of GCP total revenue. 2016 2015 2014 % of GCP % of GCP % of GCP (In millions) Sales Revenue Sales Revenue Sales Revenue Sealants $ 211.7 15.6 % $ 221.2 15.6% $ 254.8 17.2% Coatings 97.6 7.2 % 105.0 7.4% 120.0 8.1% Total Darex Revenue $ 309.3 22.8 % $ 326.2 23.0% $ 374.8 25.3% The following table sets forth Darex sales by geographic region as a percentage of Darex total revenue. 2016 2015 2014 % of Darex % of Darex % of Darex (In millions) Sales Revenue Sales Revenue Sales Revenue North America $ 63.9 20.7% $ 66.6 20.4% $ 67.9 18.1% Europe Middle East Africa (EMEA) 95.6 30.9% 105.2 32.3% 125.3 33.4% Asia Pacific 81.4 26.3% 78.3 24.0% 92.2 24.6% Latin America 68.4 22.1% 76.1 23.3% 89.4 23.9% Total Darex Revenue $ 309.3 100.0% $ 326.2 100.0% $ 374.8 100.0% Darex consists of two product groups: sealants and coatings. Sealants Our sealants product group includes two product lines: can sealants and closures. Can sealants provide a hermetic seal between the lid and the body of the metal can used in beverage, food, aerosol and industrial packaging. We offer our customers a complete portfolio of both water-based and solvent- based technologies to address current industry trends of thinner gauge metals and high-speed production processes. Closures products provide the seal for pry-off crowns, twist-off crowns and roll-on pilfer-proof (ROPP) and plastic caps. Our CELOX® oxygen-scavenging technology protects sensitive beverages from oxygen ingress into the packaging to extend product shelf-life and prevent flavor deterioration, color changes and nutrient depletion. Our SINCERA® lubricants are specifically designed for taste sensitive applications. Coatings Coatings protect both the interior and exterior surfaces of metal packaging containers and closures. Our coatings are engineered to prevent metal corrosion, ensure proper adhesion of sealing compounds and enhance graphic decorations on the exterior of containers and closures. We introduced our APPERTA® coatings to address increasing industry demands for non-BPA technology. We specifically formulated our SISTIAGA® coatings for technically demanding monobloc beverage and aerosol containers. 8

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The Darex product portfolio includes: Products Uses Customers Key Brands Can Sealants Solvent and water-based Packaging manufacturers DAREX® compounds for rigid metal and food and beverage containers that ensure a hermetic companies seal between the lid and the body of beverage, food, aerosol and other cans Closures PVC and PVC-free compounds Manufacturers of closures DAREX®, DARAFORM®, Sealants for metal and plastic bottle for food and beverages DARASEAL®, DARABLEND®, closures that are used on pry-off SINCERA®, CELOX® and twist-off metal crowns, as well as roll-on pilfer-proof and plastic closures to seal and enhance the shelf life of food and beverages in glass and plastic bottles and jars Coatings Products for coating metal cans, Packaging manufacturers DAREX®, APPERTA®, SISTIAGA® crowns and closure packaging and food and beverage that protect the metal against companies corrosion, protect the contents against the influences of metal, ensure proper adhesion of sealing compounds to metal surfaces and provide base coats for inks and for decorative purposes SALES AND MARKETING Our three operating segments maintain direct sales and technical teams made up of approximately 850 employees supporting customers in over 125 countries worldwide. Our global team sells products under annual and multi-year global, regional and local agreements and has developed deep segment and product application knowledge key to our customers' success. We believe our deep rooted understanding of our customers' needs, challenges and operations and our ability to service at high standards throughout the world, give all three segments a competitive advantage. The majority of our products require local, regional, country and international code approvals related to use, storage and performance. Our commercial organization supports and consults on committees and technical associations in order to ensure codes and product standards are consistently applied. Our SCC and SBM sales professionals work with leading architects, engineers and contractors across the globe seeking to have our products specified for use in thousands of projects annually. Our products have been used in some of the world's signature structures including the Getty Center in Los Angeles, Hong Kong’s Bank of China Tower, Qatar's Heart of Doha, London's Crossrail Railway System and many other landmarks. As part of our "go to market" strategy, the SCC team provides technical services to over 10,000 concrete and cement production facilities worldwide. In many cases, we also provide product dispensing equipment to our customers as an integral part of the concrete and cement production process. Darex employs a global sales and technical service team to market our products and serve the needs of our customers in over 75 countries. Darex provides a high level of technical service at the customer facility to ensure proper use of our products, as well as ongoing consultation with our customers to drive productivity and value for the customer throughout the value chain. MANUFACTURING, RAW MATERIALS AND SUPPLY CHAIN Our three operating segments share global supply chain processes, manufacturing facilities, as well as technical service and sales centers around the world, which provides cost efficiency. 9

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Specialty Construction Chemicals and Specialty Building Materials We utilize internal and third party manufacturing to produce our products to our specifications. Our low capital intensive plants along with third-party manufacturers provide us with flexibility in servicing our customers. Several of our plants ship internationally but most of our facilities are positioned to serve local market demand. We have the ability to respond quickly to changes in local demand by establishing or expanding manufacturing capacity with low capital investment. With both vendors and customers, we have numerous multi-year supply and purchasing agreements which help to minimize volume disruption. Construction demand is seasonal resulting in demand variations requiring effective management of our manufacturing and distribution assets. For many of our SCC customers, we install and maintain a chemical dispensing and storage system for our products at their production facilities. We periodically replenish the on-site systems to give our customers instant access to our SCC products in the amounts they require twenty-four hours a day. We also install equipment on ready-mix trucks to monitor and manage concrete in transit to job sites. This customer-based equipment accounted for 28% of our current annual capital spend. The raw materials we use in our products are obtained from a variety of suppliers, including basic chemical and petrochemical producers. Many of our raw materials are organic chemicals derived from olefins, including specialty films and fibers. We also make significant purchases of inorganic materials such as gypsum and specialty materials, including papers, rubber and asphalt. We have multiple raw material sources and balance our purchasing requirements between local and global sources seeking to maximize performance and profitability. Global supply and demand factors, changes in currency exchange rates and petroleum prices can significantly impact the price of our key raw materials. Our global supply chain team monitors the global market to identify cost and productivity opportunities. We seek to leverage our overall purchasing volumes for all regions. Since we manufacture a portion of our products in emerging regions using raw materials from suppliers in the U.S., Europe and other advanced economies, changes in the values of the currencies of these emerging regions versus the U.S. dollar and the euro may adversely affect our raw material costs. This effect is partially mitigated by our reliance on local sourcing for some raw materials. The construction business is cyclical, in response to economic conditions, as well as seasonal, driven by weather conditions. Demand for our products is primarily driven by global non-residential and infrastructure construction activity and U.S. residential construction activity. We seek to increase profitability and minimize the impact of cyclical downturns in regional economies by introducing technically advanced high-performance products and expanding geographically. Darex Packaging Technologies Our packaging products are manufactured by a network of globally integrated plants that are positioned to service our customers regionally. Our packaging products are manufactured in both large facilities to permit economies of scale and a network of smaller operations that enable customization to local conditions. The principal raw materials for Darex products include resins, solvents, latexes (including certain food-grade raw materials), polyolefins, pigments and rubber. Multiple suppliers are generally available for each of these materials; however, some of our raw materials may be provided by single sources of supply. We seek to mitigate the risk of using single source suppliers by identifying and qualifying alternative suppliers or, for unique materials, by using alternative formulations from other suppliers. In some instances, we produce our own raw materials and intermediates. Prices for many of our raw materials, including specialty and commodity materials such as latex, rubbers, pigments, resins and solvents, can be volatile. We generally take actions to mitigate the effect of changes in raw material cost, including increasing our product prices, developing alternative formulations for our products, increasing productivity and entering into supply agreements for certain raw materials. Since we manufacture a substantial portion of our products in emerging regions using raw materials supplied from the U.S., Europe and other advanced economies, changes in the values of these currencies may adversely affect our raw material costs. This effect is partially mitigated by our reliance on local sourcing for many of our raw materials. 10

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FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS AND GEOGRAPHIC AREAS Disclosure of financial information about industry segments and geographic areas for 2016, 2015 and 2014 is provided in this Annual Report on Form 10-K in Item 8 (Financial Statements and Supplementary Data) under Note 14 (Operating Segment Information) to the Consolidated Financial Statements, which disclosure is incorporated herein by reference. Disclosure of risks attendant to our foreign operations is provided in Item 1A (Risk Factors). BACKLOG OF ORDERS While at any given time there may be some backlog of orders, backlog is not material in respect to our total annual sales, nor are the changes, from time to time, significant. RESEARCH ACTIVITIES; INTELLECTUAL PROPERTY We believe success in our industries is driven by technology and innovation. Growing our businesses and maintaining our margins is dependent on our ability to introduce new products and enhance existing products based on innovative technology, as well as our ability to obtain patent or other intellectual property protection. Our research and development programs emphasize development of new products and processes, improvement of existing products and processes and application of existing products and processes to new industries and uses. Our world-class Global Technology Center in Cambridge, Massachusetts houses the product research activities of all three of our operating segments. The global marketing resources that we believe are essential to a successful product development process are also located with our research and development group in Cambridge. Technologies developed by our Global Technology Center are customized for each region and supported in the field by a network of Regional Technical Centers including facilities in Sorocaba, Brazil; Singapore; Beijing, China; Atsugi, Japan; Epernon, France; Lügde, Germany; Norderstedt, Germany; and Heist, Belgium. Globally, we have over 400 research and development and technical service employees and approximately 11% of our workforce is focused on technology. We believe the collective technical expertise, industry knowledge and professionalism of this team is a significant differentiator for us. We file patent applications globally on a routine basis and obtain grants in numerous countries around the world in support of our products, formulations, manufacturing processes, equipment and improvements. We also benefit from technological and commercial advantages protected under trade secret laws, including know-how and other proprietary information related to many of our products, technologies and internal quality control and testing methodologies. Entering 2017, we have approximately 900 active patents and patent applications pending in countries around the world, including approximately 160 in the U.S. During the past five years, we have averaged approximately 65 patent applications per year globally. The average number of patents filed and granted could go up or down from year to year, depending on various factors, some of which may not be within our control. It is our intent to continue to file for patents to protect our proprietary innovations and investments in research. Research and development expenses were approximately $23 million in 2016, $22 million in 2015 and $28 million in 2014. These amounts include depreciation and amortization expenses related to research and development assets and expenses incurred in funding external research projects. The amount of research and development expenses relating to government- and customer- sponsored projects (rather than projects that we sponsor) was not material during these periods. 11

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ENVIRONMENT, HEALTH AND SAFETY MATTERS We are subject, along with other manufacturers of specialty chemicals, to stringent regulations under numerous U.S. federal, state and local and foreign environmental, health and safety laws and regulations relating to the generation, storage, handling, discharge, disposition and stewardship of hazardous wastes and other materials. Environmental laws require that certain responsible parties, as defined in the relevant statute, fund remediation actions regardless of legality of original disposal or ownership of a disposal site. We are involved in remediation actions to address hazardous wastes or other materials as required by U.S. federal, state and local and foreign laws. We continuously seek to improve our environment, health and safety performance. We have expended funds to comply with environmental laws and regulations and expect to continue to do so in the future. EMPLOYEE RELATIONS As of December 31, 2016, we had approximately 2,900 employees, of which approximately 800 were employed in the United States. Of our total employees, approximately 2,400 were salaried and 500 were hourly. Approximately 85 of our manufacturing employees in the United States are represented by five different local collective bargaining groups. We have operated without a labor work stoppage for more than 10 years. We have works councils representing the majority of our European sites covering approximately 150 employees. AVAILABLE INFORMATION We maintain an Internet website at www.gcpat.com. Our Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports, filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, are available, free of charge, on our website as soon as reasonably practicable after such reports are electronically filed with, or furnished to, the Securities and Exchange Commission, or "SEC." Further, the SEC's website, www.sec.gov, contains reports and other information regarding our filings or you may read and copy any materials that we file with the SEC at its Public Reference Room, located at 100 F Street, NE, Washington, DC 02549. These reports may be accessed through our website's investor relations page. In addition, the charters for the Audit, Compensation, Nominating and Governance, and Corporate Responsibility Committees of our Board of Directors, our corporate governance principles and code of ethics are available, free of charge, on our website at http://investor.gcpat.com/corporate-governance/governance- documents. Printed copies of the charters, governance guidelines and code of ethics may be obtained free of charge by contacting GCP Shareholder Services by emailing investors@gcpat.com or by calling (617) 876-1400.The information on our website is not, and shall not be deemed to be, a part of this report or incorporated into any other filings we make with the SEC. Item 1A. RISK FACTORS Our operations are subject to a number of risks, including those listed below. When considering investments in our company, you should carefully consider each of the following risk factors and all of the other information set forth in this Annual Report on Form 10-K. Based on the information currently known to us, we believe that the following information identifies the most significant risk factors affecting the Company and our business in each of these categories of risks. However, the risks and uncertainties the Company faces are not limited to those set forth in the risk factors described below. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also adversely affect our business. In addition, past financial performance may not be a reliable indicator of future performance, and historical trends should not be used to anticipate results or trends in future periods. 12

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If any of the following risks and uncertainties develops into actual events, these events could have a material adverse effect on our business, financial condition or results of operations. In such case or in the case that an additional risk or uncertainty not presently known to us or that we currently believe to be immaterial develops into actual events, the trading price of our common stock could decline. Risks Relating to Our Business We face significant competition and, if we are not able to respond to competition, our revenues may decrease. We face significant competition from a variety of competitors in each of our markets. Some of our competitors have substantially greater financial, marketing, personnel and other resources than we do. New competitors also could enter our markets and certain of our customers could decide to self-manufacture or otherwise enter our markets. We consider product quality, performance, customer service, on-time delivery, price, distribution capabilities and breadth of product offerings to be the primary competitive factors in our markets. Our competitors may be able to offer more attractive pricing, duplicate our strategies, or develop enhancements to products that could offer performance features that are superior to our products. Competitive pressures, including those described above, could adversely affect our competitive position, leading to a loss of market share or decreases in prices, either of which could have a material adverse effect on our business, financial condition or results of operations. The length and depth of product and industry business cycles in our segments may result in periods of reduced sales, earnings and cash flows, and portions of our business are subject to seasonality and weather-related effects. Our operating segments are sensitive to the cyclical nature of the industries they serve. Our construction business is cyclical in response to economic conditions and construction demand and is also seasonal and dependent on favorable weather conditions, with a decrease in construction activity during the winter months. Our packaging products are affected by seasonal and weather-related factors including the consumption of beverages and the size and quality of food crops. If we are not able to continue our technological innovation and successful introduction of new products, our customers may turn to other suppliers to meet their requirements. The specialty chemicals industry and the end-use applications into which we sell our products experience ongoing technological change and product improvements. A key element of our business strategy is to invest in research and development activities with the goal of introducing new high-performance, technically differentiated products. We may not be successful in developing new technology and products that successfully compete with products introduced by our competitors, and our customers may not accept or may have lower demand for, our new products. If we fail to keep pace with evolving technological innovations or fail to improve our products in response to our customers’ needs, then our business, financial condition and results of operations could be adversely affected as a result of reduced sales of our products. Prices for certain raw materials are volatile and can have a significant effect on our manufacturing and supply chain strategies as we seek to maximize our profitability. If we are unable to successfully adjust our strategies in response to volatile raw materials prices, such volatility could have a negative effect on our earnings in future periods. We use petroleum-based materials, natural gas derivatives and other materials in the manufacture of our products. Prices for these materials are volatile and can have a significant effect on our pricing, sales, manufacturing and supply chain strategies as we seek to maximize our profitability. Our ability to successfully adjust strategies in response to volatile raw material prices by increasing prices for our products and services, reducing costs or taking other actions is a significant factor in maintaining or improving our profitability. If we are unable to successfully adjust our strategies in response to volatile prices, such volatility could have a negative effect on our sales and earnings in future periods. 13

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A substantial portion of our raw materials are commodities whose prices fluctuate as market supply and demand fundamentals change. We attempt to manage exposure to price volatility of major commodities through: long-term supply contracts; customer contracts that permit adjustments for changes in prices of commodity-based materials and energy; and forward buying programs that layer in our expected requirements systematically over time; Although we regularly assess our exposure to raw material price volatility, we cannot always predict the prospects of volatility and we cannot always cover the risk in a cost-effective manner. We have a policy of maintaining, when available, multiple sources of supply for raw materials. However, certain of our raw materials may be provided by single sources of supply. We may not be able to obtain sufficient raw materials due to unforeseen developments that would cause an interruption in supply. Even if we have multiple sources of supply for raw materials, these sources may not make up for the loss of a major supplier. The global scope of our operations subjects us to the risks of doing business in foreign countries, which could adversely affect our business, financial condition and results of operations. We operate our business on a global scale with approximately 60% of our 2016 sales outside the United States. We operate in approximately 35 countries and in over 30 currencies. We currently have many production facilities, technical centers and administrative and sales offices located outside North America, including facilities and offices in Europe, the Middle East, Africa, Asia Pacific and Latin America. We expect non-U.S. sales to continue to represent a substantial majority of our revenue. Accordingly, our business is subject to risks related to the differing legal, political, social and economic conditions and regulatory requirements of many jurisdictions as well as risks related to the political relationship between the foreign countries in which we conduct business and the United States. Risks inherent in non-U.S. operations include the following: commercial agreements may be more difficult to enforce and receivables more difficult to collect; intellectual property rights may be more difficult to enforce; we may experience increased shipping costs, disruptions in shipping or reduced availability of freight transportation; we may have difficulty transferring our profits or capital from foreign operations to other countries where such funds could be more profitably deployed; we may experience unexpected adverse changes in export duties, quotas and tariffs and difficulties in obtaining export licenses; some foreign countries have adopted, and others may impose, additional withholding taxes or other restrictions on foreign trade or investment, including currency exchange and capital controls; foreign governments may nationalize private enterprises; our business and profitability in a particular country could be affected by political or economic repercussions on a domestic, country specific or global level from terrorist activities and the response to such activities; we may be affected by unexpected adverse changes in foreign laws or regulatory requirements; and unanticipated events, such as geopolitical changes, could adversely affect our foreign operations. Our success as a global business will depend, in part, upon our ability to succeed in differing legal, regulatory, economic, social and political conditions by developing, implementing and maintaining policies and strategies that are effective in each location where we do business. 14

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Our operations in Venezuela have been, and may in the future continue to be, adversely affected by political and economic instability in the country. Our ability to manage our Venezuelan operations has been and will continue to be negatively affected by difficult conditions in Venezuela, including continuing high inflation and the significant devaluation of the Venezuelan bolivar. Government regulations regarding price increases limit our ability to offset the effects of high inflation and the currency devaluations. Import authorization controls and the limited availability of foreign exchange limit our ability to import raw materials needed for the production of our products. In addition, labor laws limit our ability to manage overhead costs and, at times, production has been negatively impacted by local labor issues. Additional government actions could have further adverse impacts on our business, results of operations, cash flows and financial condition, as could further deterioration in the Venezuelan economy resulting from the decline in the price of oil or from other factors. We have no assurance that we will be able to sustain operations in Venezuela. Economic factors as well as further government actions affecting our ability to do business (including the possibility of nationalization, expropriation of assets or other similar actions) could affect our results of operations, cash flows and financial condition. For additional information regarding these and other risks associated with our operations in Venezuela, refer to Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Global, regional and local economic weakness and political uncertainty could adversely affect our business and financial performance. Economic and geopolitical uncertainty continues to exist across the globe, including with respect to the United Kingdom’s vote to leave the European Union (“Brexit”), the failed military coup in Turkey in July 2016 which has led to continued political turmoil in Turkey as the government operates under a state of emergency, and ongoing corruption scandals in Brazil. Our business and financial performance depend significantly on macroeconomic and geopolitical conditions and the demand for our products and services in the markets in which we compete. Recent economic weakness and political uncertainty in various markets throughout the world, whether related to Brexit, the political situations in Turkey and/or Brazil, or otherwise, have resulted, and may in the future result, in decreased revenue, gross margin or earnings and in increased expenses. Certain of our customer relationships outside of the United States are with governmental entities and we could be materially and adversely affected by violations of the U.S. Foreign Corrupt Practices Act ("FCPA") and similar worldwide anti-bribery laws in non-U.S. jurisdictions. The FCPA and similar worldwide anti-bribery laws in non-U.S. jurisdictions generally prohibit companies and their intermediaries from making improper payments to non-U.S. officials for the purpose of obtaining or retaining business. Because certain of our customer relationships outside of the United States are with governmental entities, we are subject to such anti-bribery laws. Our policies mandate compliance with these anti-bribery laws. We operate in many parts of the world that have experienced governmental corruption to some degree, and in certain circumstances strict compliance with anti-bribery laws may conflict with local customs and practices. Despite our training and compliance programs our internal control policies and procedures may not always protect us from reckless or criminal acts committed by our employees or agents. Violations of anti-bribery laws or allegations of such violations, could disrupt our business and result in a material adverse effect on our results of operations, financial condition and cash flows. 15

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We are exposed to currency exchange rate changes that impact our profitability and these risks could increase as a result of recent global political uncertainty and other risks in international markets. We are exposed to currency exchange rate risk through our U.S. and non-U.S. operations. Changes in currency exchange rates may materially affect our operating results. For example, changes in currency exchange rates may affect the relative prices at which we and our competitors sell products in the same region and the cost of materials used in our operations. A substantial portion of our net sales and assets are denominated in currencies other than the U.S. dollar. When the U.S. dollar strengthens against other currencies, at a constant level of business, our reported sales, earnings, assets and liabilities are reduced because the non-U.S. currencies translate into fewer U.S. dollars. In addition, since we manufacture a portion of our construction products and packaging products in emerging regions using raw materials from suppliers in the U.S., Europe and other advanced economies, changes in the values of the currencies of these emerging regions versus the U.S. dollar, the euro and the currencies of other advanced economies in which we purchase raw materials, may adversely affect our raw material costs. We incur a currency transaction risk whenever one of our operating subsidiaries enters into either a purchase or a sales transaction using a currency different from the operating subsidiary's functional currency. Given the volatility of exchange rates, we may not be able to manage our currency transaction risks effectively, which may expose our financial condition or results of operations to significant additional risk. We have debt obligations that could restrict our business, adversely impact our financial condition, results of operations or cash flows or restrict our ability to return cash to shareholders. As of December 31, 2016, we had $830.9 million of indebtedness outstanding. The amount of and terms governing the Company's indebtedness may have material effects on our business, including to: require us to dedicate a substantial portion of our cash flow to debt payments, thereby reducing funds available for working capital, capital expenditures, acquisitions, research and development, distributions to holders of company common stock and other purposes; restrict us from making strategic acquisitions or taking advantage of favorable business opportunities; limit our flexibility in planning for or reacting to, changes in our business and the industries in which we operate; increase our vulnerability to adverse economic, credit and industry conditions, including recessions; make it more difficult for us to satisfy our debt service and other obligations; place us at a competitive disadvantage compared to our competitors that have relatively less debt; and limit our ability to borrow additional funds or to dispose of assets to raise funds, if needed, for working capital, capital expenditures, acquisitions, research and development and other purposes. We may also incur substantial additional indebtedness in the future. If we incur additional debt, the risks related to our indebtedness may intensify. We require liquidity to service the Company's debt and to fund operations, capital expenditures, research and development efforts, acquisitions and other corporate expenses. Our ability to fund operations, capital expenditures, research and development efforts, acquisitions and other corporate expenses, including repayment of our debt, depends on our ability to generate cash through future operating performance, which is subject to economic, financial, competitive, legislative, regulatory and other factors. Many of these factors are beyond our control. We cannot be certain that our businesses will generate sufficient cash or that future borrowings will be available to us in amounts sufficient to fund all of our requirements. If we are unable to generate sufficient cash to fund all of our requirements, we may need to pursue one or more alternatives, such as to: reduce or delay planned capital expenditures, research and development spending or acquisitions; obtain additional financing or restructure or refinance all or a portion of our debt on or before maturity; 16

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sell assets or businesses; and sell additional equity. Any reduction or delay in planned capital expenditures, research and development spending or acquisitions or sales of assets or businesses may materially and adversely affect our future revenue prospects. In addition, we cannot be certain that we will be able to raise additional equity capital, restructure or refinance any of our debt or obtain additional financing on commercially reasonable terms or at all. Restrictions imposed by agreements governing our indebtedness limit our ability to operate our business, finance our future operations or capital needs or engage in other business activities. If we fail to comply with certain restrictions under these agreements, our debt could be accelerated and the Company may not have sufficient cash to pay the accelerated debt. The agreements governing our indebtedness contain various covenants that limit, among other things, our ability, and the ability of certain of our subsidiaries, to: incur certain liens; enter into sale and leaseback transactions; and consolidate, merge or sell all or substantially all of our assets or the assets of our guarantors. As a result of these covenants, we are limited in the manner in which we can conduct our business, and may be unable to engage in favorable business activities or finance future operations or capital needs. Accordingly, these restrictions may limit our flexibility to operate our business. A failure to comply with the restrictions contained in these agreements, including maintaining the financial ratios required by our credit facilities, could lead to an event of default which could result in an acceleration of the indebtedness. We cannot assure you that our future operating results will be sufficient to enable us to comply with the covenants contained in the agreements governing our indebtedness or to remedy any such default. In addition, in the event that repayment of our debt is accelerated pursuant to the terms of these agreements, we may not have or be able to obtain sufficient funds to make such accelerated payments. Our indebtedness exposes us to interest expense increases if interest rates increase. As of December 31, 2016, we had approximately $318 million, or 38%, of our borrowings at variable interest rates exposing us to interest rate risk. If interest rates increase, our debt service obligations on the variable rate indebtedness would increase even though the amount borrowed would remain the same, and our net income would decrease. An increase of 1% in the interest rates payable on our variable rate indebtedness at December 31, 2016 would increase our annual estimated debt-service requirements by approximately $3 million, assuming our consolidated variable interest rate indebtedness outstanding remains the same. We have unfunded and underfunded pension plan liabilities. We will require future operating cash flow to fund these liabilities. We have no assurance that we will generate sufficient cash to satisfy these obligations. We maintain U.S. and non-U.S. defined benefit pension plans covering current and former employees who meet or met age and service requirements. Our net pension liability and cost is materially affected by the discount rate used to measure pension obligations, the longevity and actuarial profile of our workforce, the level of plan assets available to fund those obligations and the actual and expected long-term rate of return on plan assets. Significant changes in investment performance or a change in the portfolio mix of invested assets can result in corresponding increases and decreases in the valuation of plan assets or in a change in the expected rate of return on plan assets. In addition, any changes in the discount rate could result in a significant increase or decrease in the valuation of pension obligations, affecting the reported funded status of our pension plans as well as the net periodic pension cost in the following years. Similarly, changes in the expected return on plan assets can result in significant changes in the net periodic pension cost in the following years. 17

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When consistent with our business strategies, we intend to pursue acquisitions, joint ventures and other transactions that complement or expand our businesses. We may not be able to complete proposed transactions and even if completed, the transactions may not achieve the earnings, cash flow or returns on investment that we had contemplated. We have recently completed a number of acquisitions that we believe will contribute to our future success. We intend to continue to pursue opportunities to buy other businesses or technologies that could complement, enhance or expand our current businesses or product lines or that might otherwise offer us growth opportunities. We may have difficulty identifying appropriate opportunities or, if we do identify opportunities, we may not be successful in completing transactions for a number of reasons. Any transactions that we are able to identify and complete may involve a number of risks, including: the diversion of management's attention from our existing businesses to integrate the operations and personnel of the acquired or combined business or joint venture; possible adverse effects on our operating results during the integration process; failure of the acquired business to achieve expected operational objectives; and our possible inability to achieve the intended objectives of the transaction. In addition, we may not be able to successfully or profitably integrate, operate, maintain and manage any newly acquired operations or their employees. We may not be able to maintain uniform standards, controls, procedures and policies, which may lead to operational inefficiencies. Our results of operations could be adversely affected by warranty claims and product liability. We provide standard warranties that our products perform according to their specifications and do not have material defects. In particular, for a limited number of high value construction projects we warrant the performance of some products for periods of 10 to 20 years. Our products are generally sold to the commercial construction, residential construction and food packaging industries and they often constitute an integral part of our customers’ products. If our products do not meet specifications, are otherwise defective, or are used contrary to our instructions or in applications for which they are not designed, they may contribute to damage to our customers’ products, the end users of our customers’ products and buildings and other installations that contain our products. Although we take measures to avoid product defects and instruct our customers on the proper use of our products, if a substantial warranty claim or product liability lawsuit is brought against us, the cost of defending the claim or lawsuit could be significant and any adverse determination could have a material adverse effect on our results of operations. We manufacture and sell products into many global jurisdictions where our efforts to contractually limit our liability (e.g., by defining a maximum liability, disclaiming implied or other statutory forms of liability or by waiving certain types of damages, including consequential, indirect and non-proximately caused damages) may not be enforceable or may be found by a court to not apply in a particular situation. We work with dangerous materials that can injure our employees, damage our facilities and disrupt our operations. Some of our operations involve the handling of hazardous materials that may pose the risk of fire, explosion or the release of hazardous substances. Such events could result from terrorist attacks, natural disasters or operational failures, and might cause injury or loss of life to our employees and others, environmental contamination, and property damage. These events might cause a temporary shutdown of an affected plant or portion thereof, and we could be subject to penalties or claims as a result. A disruption of our operations caused by these or other events could have a material adverse effect on our results of operations. 18

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We may be required to spend large amounts of money for environmental compliance. As a manufacturer of specialty chemicals and specialty materials, we are subject to stringent regulations under numerous U.S. federal, state, local and foreign environmental, health and safety laws and regulations relating to the generation, storage, handling, discharge, disposition and stewardship of hazardous wastes and other materials. We expend funds to comply with such laws and regulations and have established a policy to minimize our emissions to the environment. Nevertheless, legislative, regulatory and economic uncertainties (including existing and potential laws and regulations pertaining to climate change) make it difficult for us to project future spending for these purposes and we may be required to expend additional funds to remain in compliance. Some of our employees are unionized, represented by works councils or employed subject to local laws that are less favorable to employers than the laws in the United States. As of December 31, 2016, we had approximately 2,950 total employees, of which approximately 815 were employed in the United States. Of our total U.S. employees, approximately 85 are unionized. In addition, a large number of our employees are employed in countries in which employment laws provide greater bargaining or other rights to employees than the laws in the United States. Such employment rights require us to work collaboratively with the legal representatives of the employees to effect any changes to labor arrangements. For example, most of our employees in Europe are represented by works councils that have co-determination rights on any changes in conditions of employment, including salaries and benefits and staff changes, and may impede efforts to restructure our workforce. A strike, work stoppage or slowdown by our employees or significant dispute with our employees, whether or not related to these negotiations, could result in a significant disruption of our operations or higher ongoing labor costs. We may be subject to claims of infringement of the intellectual property rights of others, which could hurt our business or financial performance. Although each of our core businesses monitors and conducts watches on third party patents in an attempt to avoid encroaching upon the intellectual property rights of others, from time to time we may receive claims from our competitors or others alleging that our processes or products infringe or otherwise interfere with their intellectual property rights. Any claims that our products or processes infringe or interfere with the intellectual property rights of others, regardless of the merit or resolution of the claims, could cause us to incur significant costs in responding to, defending and resolving the claims, and may divert the efforts and attention of our management and technical personnel from our business. If we are found to be infringing or otherwise violating the intellectual property rights of others, we may be liable for damages, including damages that may have occurred from our customers using any infringing products. We may be required to cease selling or manufacturing the allegedly infringing product, to contest the invalidity or enforceability of the third party patent, to redesign our products or processes to avoid the third party patent, to pay a license fee in order to commercialize under the third party patent, or to take other measures to avoid costs required to defend against such third party claims of patent infringement. Even if we ultimately prevail, the existence of the lawsuit could prompt our customers to switch to products that are not the subject of infringement suits. We are subject to business continuity risks associated with centralization of certain administrative functions. We have centralized certain administrative functions in a few designated centers around the world, to improve efficiency and reduce costs. To the extent that these central locations are disrupted or disabled, key business processes, such as invoicing, payments and general management operations, could be interrupted. A failure of our information technology infrastructure could adversely impact our business and operations. We rely upon the capacity, reliability and security of our information technology (IT) infrastructure and our ability to expand and continually update this infrastructure in response to the changing needs of our business. If we experience a problem with the functioning of an important IT system or a security breach of our IT systems, the resulting disruptions could have an adverse effect on our business. 19

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We and certain of our third-party vendors receive and store personal information in connection with our human resources operations and other aspects of our business. Despite our implementation of security measures, our IT systems are vulnerable to damages from computer viruses, natural disasters, unauthorized access, cyber-attack and other similar disruptions. Any system failure, accident or security breach could result in disruptions to our operations. A material network breach in the security of our IT systems could include the theft of our intellectual property, trade secrets or customer information. To the extent that any disruptions or security breach results in a loss or damage to our data or an inappropriate disclosure of confidential or customer information, it could cause significant damage to our reputation, affect our relationships with our customers, lead to claims against us and ultimately harm our business. In addition, we may be required to incur significant costs to protect against damage caused by these disruptions or security breaches in the future. Risks Relating to the Separation If the distribution and certain related transactions fail to qualify under applicable Internal Revenue Code provisions, Grace, the Company and Grace shareholders could be subject to significant tax liabilities and, in certain circumstances, the Company could be required to indemnify Grace for material taxes and other related amounts pursuant to indemnification obligations under the Tax Sharing Agreement. As a condition to the distribution that effected the Separation, Grace was required to receive an opinion of counsel, in form and substance satisfactory to Grace in its sole discretion, regarding the U.S. federal income tax treatment of the distribution and certain related transactions. The opinion of counsel was based upon and relied on, among other things, certain facts and assumptions, as well as certain representations, statements and undertakings of Grace and us, including those relating to our and Grace's past and future conduct. If any of these representations, statements or undertakings were, or become, inaccurate or incomplete, or if Grace or we breach any of its or our covenants in the Separation documents, such as the Tax Sharing Agreement, the opinion of counsel may be invalid and the conclusions reached therein could be jeopardized. Notwithstanding the opinion of counsel, the Internal Revenue Service (the “IRS”) could determine that the distribution and certain related transactions failed to qualify under applicable Internal Revenue Code provisions if it determines that any of the representations, assumptions or undertakings upon which the opinion of counsel were based were false or have been violated, or if it disagrees with the conclusions in the opinion of counsel. The opinion of counsel is not binding on the IRS and there can be no assurance that the IRS will not assert a contrary position. If the distribution is determined to fail to qualify under applicable Internal Revenue Code provisions, then, in general, Grace may recognize taxable gain as if it had sold our common stock in a taxable sale for its fair market value (unless Grace and GCP jointly make an election under Section 336(e) of the Internal Revenue Code (the “Code”) with respect to the distribution, in which case, in general, we would (i) recognize taxable gain as if we had sold all of our assets in a taxable sale in exchange for an amount equal to the fair market value of our common stock and the assumption of all of our liabilities and (ii) obtain a related step up in the basis of our assets), and Grace shareholders at the time of the distribution who received shares of our common stock in the distribution would be subject to tax as if they had received a taxable distribution equal to the fair market value of such shares. Under the Tax Sharing Agreement entered into between Grace and GCP, we may be required to indemnify Grace against any additional taxes and related amounts resulting from (1) an acquisition under certain circumstances of all or a portion of our equity securities or assets, whether by merger or otherwise (and regardless of whether we participated in or otherwise facilitated the acquisition), (2) other actions that we may take or fail to, or (3) any of our representations or undertakings made in connection with the Separation and the distribution being incorrect or violated. Any such indemnity obligations could be material. In addition, Grace, GCP and our respective subsidiaries may incur certain tax costs in connection with the Separation, including non-U.S. tax costs resulting from Separations in non-U.S. jurisdictions, which may be material. 20

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U.S. federal income tax consequences may restrict our ability to engage in desirable strategic or capital- raising transactions following the distribution. Under current law, a separation can be rendered taxable to the parent corporation and its shareholders as a result of certain post-separation acquisitions of shares or assets of the spun-off corporation. For example, a separation may result in taxable gain to the parent corporation under Section 355(e) of the Tax Code if the Separation were later deemed to be part of a plan (or series of related transactions) pursuant to which one or more persons, directly or indirectly, acquire shares representing a 50 percent or greater interest (by vote or value) in the spun-off corporation. To preserve the U.S. federal income tax treatment of the Separation and distribution, and in addition to our indemnity obligation described immediately above, the Tax Sharing Agreement restricts GCP, for the two-year period following the distribution, except in specified circumstances, from: Entering into any transaction pursuant to which all or a portion of our assets or shares of our common stock would be acquired, whether by merger or otherwise; Issuing GCP equity securities beyond certain thresholds; Repurchasing our shares other than in certain open-market transactions; Ceasing to actively conduct or run certain of our businesses; or Taking or failing to take any other action that jeopardizes the expected U.S. federal income tax treatment of the Separation and certain related transactions. These restrictions may limit our ability to pursue certain equity issuances, strategic transactions or other transactions that may maximize the value of our business. In connection with the Separation, Grace agreed to indemnify the Company for certain liabilities and we have agreed to indemnify Grace for certain liabilities. If the Company is required to act on these indemnities to Grace, we may need to divert cash to meet those obligations and our financial results could be negatively impacted. The Grace indemnity may not be sufficient to insure the Company against the full amount of liabilities for which it may be allocated responsibility, and Grace may not be able to satisfy its indemnification obligations in the future. Pursuant to the Separation and Distribution Agreement and the Tax Sharing Agreement, Grace agreed to indemnify us for certain liabilities, and we agreed to indemnify Grace for certain liabilities, and we agreed to indemnify Grace in each case for uncapped amounts, as discussed further in “Certain Relationships and Related Transactions-Agreements with Grace.” Indemnities that we may be required to provide Grace are not subject to any cap, may be significant and could negatively impact our business, particularly indemnities relating to our actions that could impact the U.S. federal income tax treatment of the distribution and certain related transactions. Third parties could also seek to hold us responsible for any of the liabilities that Grace has agreed to retain. Further, the indemnity from Grace may not be sufficient to protect us against the full amount of such liabilities, and Grace may not be able to fully satisfy its indemnification obligations in the future. Moreover, even if we ultimately succeed in recovering from Grace any amounts for which we are held liable, we may be temporarily required to bear these losses ourselves. Each of these risks could negatively affect our business, results of operations and financial condition. Certain of Grace’s insurance policies may not cover us for losses associated with occurrences prior to the Separation. In connection with the Separation, we entered into agreements with Grace to address several matters associated with the Separation, including insurance coverage. Post-Separation, some of Grace’s insurance policies may not cover us for certain losses associated with occurrences prior to the Separation. 21

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Several members of our Board of Directors and management may have actual or potential conflicts of interest because of their ownership of shares of common stock of Grace. Several members of our Board of Directors and management own common stock of Grace and/or stock options to purchase common stock of Grace or other equity-based awards because of their current or prior relationships with Grace, which could create, or appear to create, potential conflicts of interest when our directors and executive officers are faced with decisions that could have different implications for Grace and our Company. See “Management.” Risks Relating to Ownership of GCP Common Stock Our share price may fluctuate significantly. The market price of our common stock could fluctuate significantly due to a number of factors, many of which are beyond our control, including: fluctuations in our quarterly or annual earnings results or those of other companies in the industry; failures of our operating results to meet the estimates of securities analysts or the expectations of shareholders or changes by securities analysts in their estimates of our future earnings; announcements made by us or our customers, suppliers or competitors; changes in laws or regulations which adversely affect us or our industry; changes in accounting standards, policies, guidance, interpretations or principles; general economic, industry and stock market conditions; future sales of company common stock by shareholders; future issuances of our common stock by us; and the other factors described in these “Risk Factors” and other parts of this Annual Report on Form 10- K. Provisions in the Company’s corporate documents, the Tax Sharing Agreement and Delaware law could delay or prevent a change-in-control of the Company, even if that change may be considered beneficial by some Company shareholders. The existence of some provisions in our certificate of incorporation, our bylaws and of Delaware law could discourage, delay or prevent a change in control of the Company that a shareholder may consider favorable. These include provisions: authorization of a large number of shares of common stock that are not yet issued, which may permit our Board of Directors to issue shares to persons friendly to current management, thereby protecting the continuity of the Company's management, or which could be used to dilute the stock ownership of persons seeking to obtain control of the Company; prohibition on shareholders calling special meetings and taking action by written consent; advance notice requirements for nominations of candidates for election to the Company's Board of Directors and for proposing matters to be acted on by shareholders at the annual shareholder meetings; the temporary classification of our Board of Directors; and supermajority voting requirements for certain amendments to the Company’s certificate of incorporation or shareholder proposals for amendments to the Company’s bylaws. In addition, since the Separation, the Company has been and is subject to Section 203 of the Delaware General Corporation Law, which may have an anti-takeover effect with respect to transactions not approved in advance by the Company's Board of Directors, including discouraging takeover attempts that might result in a premium over the market price for shares of company common stock. 22

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We believe these provisions protect our shareholders from coercive or otherwise unfair takeover tactics by requiring potential acquirers to negotiate with our Board of Directors and by providing the Board of Directors with more time to assess any acquisition proposal as compared to its long term plan as a standalone company. However, these provisions apply even if a proposal may be considered beneficial by some shareholders and could delay or prevent an acquisition that our Board of Directors determines is not in the best interests of GCP and our shareholders. In addition, an acquisition or further issuance of our stock could trigger the application of Section 355(e) of the Code. The Company may not be able to engage in desirable strategic or capital-raising transactions following the distribution. Under the Tax Sharing Agreement, the Company would be required to indemnify Grace for any resulting tax and related amounts, and this indemnity obligation might discourage, delay or prevent a change of control that you may consider favorable. The Company may issue preferred stock with terms that could dilute the voting power or reduce the value of company common stock. Our certificate of incorporation authorizes it to issue, without the approval of our shareholders, one or more classes or series of preferred stock having such designation, powers, preferences and relative, participating, optional and other special rights, including preferences over our common stock respecting dividends and distributions, as our Board of Directors generally may determine. The terms of one or more classes or series of preferred stock could dilute the voting power or reduce the value of company common stock. For example, we could grant holders of preferred stock the right to elect some number of directors in all events or on the happening of specified events or the right to veto specified transactions. Similarly, the repurchase or redemption rights or liquidation preferences that we could assign to holders of preferred stock could affect the residual value of the common stock. The Company does not expect to pay any cash dividends for the foreseeable future. We currently intend to retain future earnings to finance our business. As a result, GCP does not expect to pay any cash dividends for the foreseeable future. All decisions regarding the payment of dividends by GCP will be made by our Board of Directors from time to time in accordance with applicable law. There can be no assurance that we will have sufficient surplus under Delaware law to be able to pay any dividends at any time in the future. This may result from extraordinary cash expenses, actual expenses exceeding contemplated costs, funding of capital expenditures, increases in reserves or other currently unknown reasons. If we do not pay dividends, the price of our common stock must appreciate in order for you to receive a gain on your investment. This appreciation may not occur. Further, you may have to sell some or all of your shares of our common stock in order to generate cash flow from your investment. Item 1B. UNRESOLVED STAFF COMMENTS None. Item 2. PROPERTIES We operate manufacturing plants and other facilities (including offices, warehouses, labs and other service facilities) throughout the world. Some of these plants and facilities are shared among our operating segments. We consider our major operating properties to be in good operating condition and suitable for their current use. We believe that, after taking planned expansion into account, the productive capacity of our plants and other facilities is generally adequate for current operations. The tables below summarize our primary facilities by operating segment and region as of December 31, 2016. 23

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Number of Facilities(1) Europe Middle East Africa North America (EMEA) Asia Pacific Latin America Total Specialty Construction Chemicals 12 7 18 6 43 Specialty Building Materials 6 5 4 — 15 Darex Packaging Technologies 2 6 5 3 16 ___________________________________________________________________________________________________________________ (1) Shared facilities are counted in all applicable operating segments. The total number of facilities included in the above table, without regard to sharing amongst operating segments, is 64. Number of Facilities—Leased(1) Europe Middle East Africa North America (EMEA) Asia Pacific Latin America Total Specialty Construction Chemicals 4 3 14 5 26 Specialty Building Materials 1 3 3 — 7 Darex Packaging Technologies — 2 2 3 7 _________________________________________________________________________________________________________ (1) Shared facilities are counted in all applicable operating segments. Number of Facilities—Owned(1) Europe Middle East Africa North America (EMEA) Asia Pacific Latin America Total Specialty Construction Chemicals 8 4 4 1 17 Specialty Building Materials 5 2 1 — 8 Darex Packaging Technologies 2 4 3 — 9 ___________________________________________________________________________________________________________________ (1) Shared facilities are counted in all applicable operating segments. We own our principal facilities. With respect to our other facilities, we either own, lease or hold them under a land lease arrangement. Our corporate headquarters is in Cambridge, Massachusetts, and we also lease and operate a shared services facility in Manila, Philippines. Our largest facilities are located in Chicago, Illinois; Cambridge, Massachusetts; and Epernon, France. We also have numerous smaller locations around the world. SCC requires a greater number of facilities to service its customers than SBM or Darex as many of its products are water-based and are delivered to numerous distributors, concrete production locations, cement production locations and job sites. (See Note 3, "Properties and Equipment," to the Consolidated Financial Statements in Item 8). In connection with our credit agreement, we have executed security agreements with respect to certain of our larger United States facilities. As of December 31, 2016, mortgages or deeds of trust were in effect with respect to facilities in Mount Pleasant, Tennessee and Chicago, Illinois. A description of our credit agreement may be found within Note 5, "Debt and Other Financial Instruments," to the Consolidated Financial Statements in Item 8. Item 3. LEGAL PROCEEDINGS Information with respect to this item may be found in Note 9, "Commitments and Contingencies," to the Consolidated Financial Statements in Item 8, which is incorporated herein by reference. Item 4. MINE SAFETY DISCLOSURES Not applicable. 24

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EXECUTIVE OFFICERS OF THE REGISTRANT Our executive officers as of February 1, 2017 are listed in the following table. Each executive officer was elected by our Board of Directors to serve for a term of one year and until his successor is elected and qualified or until his earlier resignation or removal. Name Age Position G. E. Poling 61 President and Chief Executive Officer D. P. Freeman 53 Vice President and Chief Financial Officer J. W. Kapples 57 Vice President, General Counsel and Secretary Z. Mahmood 50 Vice President and President, SBM and Global Operations K.R. Holland 55 Vice President and Chief Human Resources Officer Gregory E. Poling has served as GCP’s President and Chief Executive Officer since our separation from W.R. Grace & Co. (“Grace”) on February 3, 2016. Mr. Poling had been employed with Grace since 1977. He held positions in sales, marketing, business development and general management across all of Grace's operating segments. From 1977 to 1999, Mr. Poling held positions of increasing responsibility in Grace's construction products business. In 2005, Mr. Poling became President of Grace Davison (one of Grace's two operating segments at the time which included Darex) and a Vice President of W. R. Grace & Co. On November 3, 2011, Mr. Poling was elected President and Chief Operating Officer of W. R. Grace & Co. Dean P. Freeman has served as GCP’s Vice President and Chief Financial Officer since our separation from Grace on February 3, 2016. Mr. Freeman joined Grace in September 2015 as Vice President, GCP Finance. He previously served as Interim Chief Executive Officer and President, from January to May 2014, and as Executive Vice President and Chief Financial Officer, from 2012 to October 2014, at Watts Water Technologies, a global provider of products and solutions for the residential, commercial and industrial markets. Mr. Freeman served as Senior Vice President of Finance and Treasurer of Flowserve Corporation from 2009 to 2011 and as Vice President, Finance and Chief Financial Officer of the Flowserve Pump Division from 2006 to 2009. Prior to Flowserve, Mr. Freeman served as Chief Financial Officer, Europe for The Stanley Works Corporation. Mr. Freeman has also served in financial executive and management roles of progressive responsibility with United Technologies Corporation and SPX Corporation. John W. Kapples has served as GCP’s Vice President, General Counsel and Secretary since our separation from Grace on February 3, 2016. Mr. Kapples joined Grace in December 2015 as Vice President and General Counsel, GCP. He previously served as Vice President at Medtronic plc from February 2015 to August 2015, where he assisted with legal transition and integration matters related to Medtronic's acquisition of Covidien plc. From 2006 to 2015, Mr. Kapples served as Vice President and Secretary at Covidien, a medical device and pharmaceutical company. Prior to Covidien, Mr. Kapples served in management and legal roles of increasing responsibility at Raytheon Company. Zain Mahmood has served as GCP’s Vice President and President, SBM and Global Operations, since our separation from Grace on February 3, 2016. Mr. Mahmood joined Grace in November 2015 as Vice President and President, SBM and Global Operations, GCP. He previously served from 2013 to 2015 as President and CEO at Demilec Inc., a polyurethane-based insulation and coatings manufacturer. From 2007 to 2012, Mr. Mahmood served as President and CEO at Parkson Corporation, a water and wastewater treatment equipment manufacturer. Prior to Parkson, Mr. Mahmood served in management roles of increasing responsibility with Johns Manville Corporation, ABB and AlliedSignal (currently Honeywell). Kevin R. Holland joined GCP on January 17, 2017 as Vice President and Chief Human Resources Officer. Prior to joining GCP, he served during 2016 as a Senior Vice President and Chief Human Resources Officer at BrightStar Corporation, a $12 billion mobile technology services company. From 2005 to 2016, Mr. Holland was employed at Chiquita Brands International, where he served in management roles of increasing responsibility culminating in his position as Executive Vice President and Chief Administrative Officer. Previous positions include senior human resource roles with global businesses, including Molson Coors Brewing Company (2003 to 2005) and FedEx Kinko's (1999 to 2003). 25

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PART II. Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is listed on the New York Stock Exchange ("NYSE") under the ticker symbol "GCP." There were 4,772 stockholders of record of our common stock as of December 31, 2016. The high and low common stock sales prices per share for 2016 are presented below. 2016 High Low First quarter $ 20.67 $ 14.47 Second quarter 27.01 19.51 Third quarter 30.12 25.18 Fourth quarter 30.12 25.10 The high and low market prices per share of our common stock as reported by the NYSE for each full quarterly period of fiscal year 2015 are not provided as the common stock of GCP Applied Technologies, Inc. did not begin "regular way" trading on the NYSE until February 4, 2016. Since the Separation, we have not paid a dividend to holders of our common stock. Further, we currently intend to retain future earnings to finance our business. As a result, we do not expect to pay any cash dividends for the foreseeable future. All decisions regarding the payment of dividends to our shareholders will be made by our Board of Directors from time to time in accordance with applicable law. Recent Sales of Unregistered Equity Securities None. Issuer Purchases of Equity Securities None. 26

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STOCK PERFORMANCE GRAPH AND CUMULATIVE TOTAL RETURN The graph below shows the cumulative total stockholder return, assuming the investment of $100 on February 4, 2016 (and the reinvestment of dividends thereafter), in each of GCP common stock, the Standard & Poor's (S&P) 1000 Index and the S&P 1500 Specialty Chemicals Index. The comparisons in the graph below are based on historical data and are not indicative of, or intended to forecast, future performance of our common stock. Fiscal 2016 2/4/16 3/31/16 6/30/16 9/30/16 12/30/16 GCP Applied Technologies Inc. $ 100 $ 118 $ 154 $ 168 $ 158 S&P 1500 Specialty Chemicals 100 111 117 121 118 S&P 1000 Index 100 111 115 121 131 Item 6. SELECTED FINANCIAL DATA The following selected consolidated financial data should be read in conjunction with the information contained in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and the Consolidated Financial Statements and notes thereto included in Item 8 of this Annual Report on Form 10-K, which are incorporated herein by reference, in order to understand the factors that may affect the comparability of the information presented below. 27

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The statement of operations data for each of the years ended December 31, 2016, 2015 and 2014, and the balance sheet data as of December 31, 2016 and 2015 set forth below are derived from our audited Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K. We derived the statement of operations data for the year ended December 31, 2013 set forth below from our audited Consolidated Financial Statements included in our December 31, 2015 Annual Report on Form 10-K. We derived the statement of operations data for the year ended December 31, 2012 and the balance sheet data as of December 31, 2013 and 2012 set forth below from information that is included in our Registration Statement on Form 10, as filed with the SEC on January 12, 2016. Prior to GCP's separation from Grace on February 3, 2016, our financial statements included expense allocations for certain functions provided by Grace as well as other Grace employees not solely dedicated to GCP, including, but not limited to, general corporate expenses related to finance, legal, information technology, human resources, communications, ethics and compliance, shared services, employee benefits and incentives and stock-based compensation. These expenses were allocated to GCP on the basis of direct usage when identifiable, with the remainder allocated on the basis of revenue, headcount or other measures. Management of the Company considers these allocations to be a reasonable reflection of the utilization of services by, or the benefits provided to, the Company. The allocations may not, however, reflect the expense the Company would have incurred as a standalone company for the periods presented prior to February 3, 2016. Actual costs that may have been incurred if the Company had been a standalone company would depend on a number of factors, including the chosen organizational structure, what functions were outsourced or performed by employees and strategic decisions made in areas such as information technology and infrastructure. The selected consolidated financial data in this section are not intended to replace the Consolidated Financial Statements and are qualified in their entirety by the Consolidated Financial Statements and related notes included elsewhere in this Annual Report on Form 10-K. Fiscal Year Ended December 31, (in millions, except per share amounts) 2016 2015 2014 2013 2012 Statement of Operations Net sales $ 1,355.8 $ 1,418.6 $ 1,480.4 $ 1,442.3 $ 1,409.2 Net income 73.8 40.9 135.5 111.3 86.3 Net income attributable to noncontrolling interests (1.0) (0.8) (1.2) (1.6) (1.1) Net income attributable to GCP 72.8 40.1 134.3 109.7 85.2 Basic and diluted earnings per share(1) Diluted earnings per share attributable to GCP $ 1.02 $ 0.57 $ 1.90 $ 1.56 $ 1.21 Average diluted shares outstanding 71.7 70.5 70.5 70.5 70.5 Financial Position Total assets $ 1,089.8 $ 833.1 $ 981.5 $ 986.4 $ 966.3 Long-term debt 783.0 — — 4.5 11.4 Long-term debt—related party — — — 9.3 20.1 _____________________________________________________________________________ (1) GCP's earnings per share amounts for 2015 and 2014 were calculated using the shares that were distributed to Grace shareholders immediately following the legal separation. For periods prior to February 3, 2016, it is assumed that there are no dilutive equity instruments as there were no GCP equity awards outstanding prior to the legal separation from Grace. 28

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS See "Analysis of Operations" for a discussion of our non-GAAP performance measures. Our references to "advanced economies" and "emerging regions" refer to classifications established by the International Monetary Fund. Summary Description of Business We are engaged in the production and sale of specialty construction chemicals, specialty building materials and packaging sealants and coatings through three global operating segments: Specialty Construction Chemicals. Specialty Construction Chemicals ("SCC") provides products, technologies, and services that reduce the cost and improve the performance of cement, concrete, mortar, masonry and other cementitious based construction materials. Specialty Building Materials. Specialty Building Materials ("SBM") produces and sells sheet and liquid membrane systems and other products that protect both new and existing structures from water, air, and vapor penetration, and 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. Darex Packaging Technologies. Darex Packaging Technologies ("Darex") produces and sells sealants and coatings for consumer and industrial applications to protect the integrity of packaged products. We operate our business on a global scale with approximately 60% of our annual 2016 net sales from outside the United States. We operate in approximately 35 countries and transact 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. On January 27, 2016, GCP entered into a Separation and Distribution Agreement pursuant to which Grace agreed to transfer its Grace Construction Products operating segment and the packaging technologies business, operated under the “Darex” name, of its Grace Materials Technologies operating segment to GCP (the "Separation"). The Separation occurred on February 3, 2016, by means of a pro rata distribution to Grace stockholders of all of the outstanding shares of Company common stock (the "Distribution"). Under the Distribution, one share of Company common stock was distributed for each share of Grace common stock held as of the close of business on January 27, 2016. On February 4, 2016 GCP began "regular way" trading on the New York Stock Exchange under the ticker symbol "GCP." Results of Operations 2016 Performance Summary Following is a summary of our financial performance for the year ended December 31, 2016, compared with the prior year. Net sales decreased 4.4% to $1.4 billion. Net income attributable to GCP shareholders was $72.8 million or $1.02 per diluted share, compared to net income attributable to GCP shareholders of $40.1 million or $0.57 per diluted share, for the prior year. Adjusted EPS was $1.41 per diluted share. Adjusted EBIT decreased 5.7% to $213.8 million. Adjusted EBIT Return On Invested Capital was 38.4% compared with 48.0% for the year ended December 31, 2015. 29

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2015 Performance Summary Following is a summary of our financial performance for the year ended December 31, 2015, compared with the prior year. Net sales decreased 4.2% to $1.4 billion. Net income attributable to GCP shareholders was $40.1 million or $0.57 per diluted share, compared to net income attributable to GCP shareholders of $134.3 million or $1.90 per diluted share, for the prior year. Adjusted EBIT increased 16.0% to $226.7 million. Adjusted EBIT Return On Invested Capital was 48.0% compared with 36.5% for the year ended December 31, 2014. Analysis of Operations for 2016, 2015 and 2014 We have set forth in the table below our key operating statistics with percentage changes for the years ended December 31, 2016, 2015 and 2014. Please refer to this Analysis of Operations when reviewing this Management's Discussion and Analysis of Financial Condition and Results of Operations. Non-GAAP Financial Measures The table below presents financial information in accordance with U.S. GAAP, as well as certain non-GAAP financial measures, which we describe below in further detail. We believe that the non-GAAP financial information supplements our discussions about the performance of our businesses, improves period-to-period comparability and provides insight to the information that our management uses to evaluate the performance of our businesses. Our management uses non-GAAP measures in financial and operational decision-making processes, for internal reporting, and as part of forecasting and budgeting processes, as these measures provide additional transparency to our core operations. In the table, we have provided reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with U.S. GAAP. These non-GAAP financial measures should not be considered substitutes for financial measures calculated in accordance with U.S. GAAP, and the financial results that we calculate and present in the table in accordance with U.S. GAAP, as well as the corresponding reconciliations from those results, should be carefully evaluated as part of our MD&A. We define Adjusted EBIT (a non-GAAP financial measure) to be net income attributable to GCP shareholders adjusted for interest income; interest expense and related financing costs; income taxes; currency and other financial losses in Venezuela; restructuring and repositioning expenses and asset impairments; pension costs other than service and interest costs, expected returns on plan assets and amortization of prior service costs/credits; income and expense items related to certain product lines and investments; gains and losses on sales of businesses, product lines and certain other investments; third-party acquisition-related costs; the amortization of acquired inventory fair value adjustment; and certain other items that are not representative of underlying trends. Adjusted EBIT Margin means Adjusted EBIT divided by net sales. We use Adjusted EBIT to assess and measure our operating performance and in determining performance-based compensation. We use Adjusted EBIT as a performance measure because it provides improved period-to-period comparability for decision-making and compensation purposes and because it allows management to measure the ongoing earnings results of our strategic and operating decisions. We define Adjusted EBITDA (a non-GAAP financial measure) to be Adjusted EBIT adjusted for depreciation and amortization. We use Adjusted EBITDA as a performance measure in making significant business decisions. 30

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We define Adjusted Earnings Per Share (a non-GAAP financial measure) to be earnings per share ("EPS") on a diluted basis adjusted for costs related to restructuring and repositioning expenses and asset impairments; pension costs other than service and interest costs, expected return on plan assets and amortization of prior service costs/credits; gains and losses on sales of businesses, product lines and certain other investments; third- party acquisition-related costs; other financing costs associated with the modification or extinguishment of debt; certain other items that are not representative of underlying trends; and certain discrete tax items. We use Adjusted EPS as a performance measure to review our diluted earnings per share results on a consistent basis during the quarters of each fiscal year. We define Adjusted Gross Profit (a non-GAAP financial measure) to be gross profit adjusted for pension- related costs; loss in Venezuela included in cost of goods sold; and the amortization of acquired inventory fair value adjustment. Adjusted Gross Margin means Adjusted Gross Profit divided by net sales. We use this performance measure to understand trends and changes and to make business decisions regarding core operations. We note that the devaluation loss in Venezuela results primarily from geopolitical factors. We define Adjusted EBIT Return On Invested Capital (a non-GAAP financial measure) to be Adjusted EBIT (on a trailing four quarters basis) divided by the sum of net working capital, properties and equipment and certain other assets and liabilities. We use Adjusted EBIT Return On Invested Capital as a performance measure to review investments and to make capital allocation decisions. Adjusted EBIT, Adjusted EBITDA, Adjusted EPS, Adjusted EBIT Return On Invested Capital and Adjusted Gross Profit do not purport to represent income measures as defined under U.S. GAAP. These measures are provided to investors and others to improve the period-to-period comparability and peer-to-peer comparability of our financial results and to ensure that investors understand the information we use to evaluate the performance of our businesses. Adjusted EBIT has material limitations as an operating performance measure because it excludes costs related to income and expenses from restructuring and repositioning activities, which historically have been a material component of our net income. Adjusted EBITDA also has material limitations as an operating performance measure because it excludes the impact of depreciation and amortization expense. Our business is substantially dependent on the successful deployment of capital and depreciation and amortization expense is a necessary element of our costs. We compensate for the limitations of these measurements by using these indicators together with net income as measured under GAAP to present a complete analysis of our results of operations. Adjusted EBIT and Adjusted EBITDA should be evaluated together with net income measured under GAAP for a complete understanding of our results of operations. 31

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We have provided in the following tables a reconciliation of these non-GAAP measures to the most directly comparable financial measure calculated and presented in accordance with U.S. GAAP. Analysis of Operations % % (In millions) 2016 2015 Change 2014 Change Net sales: Specialty Construction Chemicals $ 623.8 $ 694.3 (10.2)% $ 726.3 (4.4)% Specialty Building Materials 422.7 398.1 6.2 % 379.3 5.0 % Darex Packaging Technologies 309.3 326.2 (5.2)% 374.8 (13.0)% Total GCP net sales $ 1,355.8 $ 1,418.6 (4.4)% $ 1,480.4 (4.2)% Net sales by region: North America $ 572.8 $ 538.2 6.4 % $ 503.9 6.8 % Europe Middle East Africa (EMEA) 321.3 341.1 (5.8)% 396.0 (13.9)% Asia Pacific 322.6 329.6 (2.1)% 349.7 (5.7)% Latin America 139.1 209.7 (33.7)% 230.8 (9.1)% Total net sales by region $ 1,355.8 $ 1,418.6 (4.4)% $ 1,480.4 (4.2)% Profitability performance measures: Adjusted EBIT(A): Specialty Construction Chemicals segment operating income $ 72.6 $ 83.7 (13.3)% $ 72.4 15.6 % Specialty Building Materials segment operating income 114.0 99.6 14.5 % 75.7 31.6 % Darex Packaging Technologies segment operating income 64.8 72.8 (11.0)% 74.1 (1.8)% Corporate costs(B) (29.2) (24.3) (20.2)% (19.3) (25.9)% Certain pension costs(C) (8.4) (5.1) (64.7)% (7.5) 32.0 % Adjusted EBIT (non-GAAP) 213.8 226.7 (5.7)% 195.4 16.0 % Currency and other financial losses in Venezuela — (73.2) NM (1.0) NM Repositioning expenses (15.3) — NM — NM Restructuring expenses and asset impairments (1.9) (11.6) 83.6 % (18.3) 36.6 % Pension MTM adjustment and other related costs, net (23.2) (15.0) (54.7)% 18.6 NM Gain on termination and curtailment of pension and other postretirement plans 0.8 — NM — NM Third-party acquisition-related costs (2.1) — NM — NM Other financing costs (1.2) — NM — NM Amortization of acquired inventory fair value adjustment (1.3) — NM — NM Interest expense, net (64.6) (2.5) NM (4.8) 47.9 % Provision for income taxes (32.2) (84.3) 61.8 % (55.6) (51.6)% Net income attributable to GCP shareholders (GAAP) $ 72.8 $ 40.1 81.5 % $ 134.3 (70.1)% Diluted EPS (GAAP) $ 1.02 $ 0.57 $ 1.90 Adjusted EPS (non-GAAP) $ 1.41 32

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Analysis of Operations (In millions) Adjusted profitability Gross Profit: Specialty Construction Chemicals Specialty Building Materials Darex Packaging Technologies Adjusted Gross Profit (non-GAAP) Amortization of acquired Loss in Venezuela in cost of goods sold Pension costs in cost of goods sold Total GCP Gross Profit (GAAP) Gross Margin: Specialty Construction Chemicals Specialty Building Materials Darex Packaging Technologies Adjusted Gross Margin (non-GAAP) Amortization of acquired Loss in Venezuela in cost of goods sold Pension costs in cost of goods sold Total GCP Gross Margin (GAAP) Adjusted EBIT(A)(B)(C): Specialty Construction Specialty Building Materials Darex Packaging Technologies Corporate and certain pension costs Total GCP Adjusted EBIT (non-GAAP) Depreciation and amortization: Specialty Construction Chemicals Specialty Building Materials Darex Packaging Technologies Corporate Total GCP Adjusted EBITDA: Specialty Construction Chemicals Specialty Building Materials Darex Packaging Technologies Corporate and certain pension costs Total GCP Adjusted EBITDA (non-GAAP) Adjusted EBIT Margin: Specialty Construction Chemicals Specialty Building Materials Darex Packaging Technologies Total GCP Adjusted EBIT Margin (non-GAAP) Adjusted EBITDA Margin: Specialty Construction Chemicals Specialty Building Materials Darex Packaging Technologies Total GCP Adjusted EBITDA Margin (non-GAAP) 2016 2015 % Change 2014 % Change performance measures: $ 229.9 $ 244.3 (5.9)% $ 244.8 (0.2)% 196.7 179.5 9.6 % 158.0 13.6 % 111.3 113.9 (2.3)% 121.0 (5.9)% 537.9 537.7 —% 523.8 2.7 % inventory fair value adjustment (1.3) — NM — NM — (13.7) NM — NM (7.9) (7.8) (1.3)% 6.6 NM 528.7 516.2 2.4 % 530.4 (2.7)% 36.9 % 35.2 % 1.7 pts 33.7% 1.5 pts 46.5 % 45.1 % 1.4 pts 41.7% 3.4 pts 36.0 % 34.9 % 1.1 pts 32.3% 2.6 pts 39.7 % 37.9 % 1.8 pts 35.4% 2.5 pts inventory fair value adjustment (0.1)% —% NM —% NM —% (1.0)% NM —% NM (0.6)% (0.5)% (0.1) pts 0.4% (0.9) pts 39.0 % 36.4 % 2.6 pts 35.8% 0.6 pts Chemicals segment operating income $ 72.6 $ 83.7 (13.3)% $ 72.4 15.6 % segment operating income 114.0 99.6 14.5 % 75.7 31.6 % segment operating income 64.8 72.8 (11.0)% 74.1 (1.8)% (37.6) (29.4) (27.9)% (26.8) (9.7)% 213.8 226.7 (5.7)% 195.4 16.0 % $ 20.0 $ 18.0 11.1 % $ 18.5 (2.7)% 9.6 7.8 23.1 % 8.6 (9.3)% 6.4 4.8 33.3 % 5.5 (12.7)% 0.2 1.2 (83.3)% 1.4 (14.3)% 36.2 31.8 13.8 % 34.0 (6.5)% $ 92.6 $ 101.7 (8.9)% $ 90.9 11.9 % 123.6 107.4 15.1 % 84.3 27.4 % 71.2 77.6 (8.2)% 79.6 (2.5)% (37.4) (28.2) (32.6)% (25.4) (11.0)% 250.0 258.5 (3.3)% 229.4 12.7 % 11.6 % 12.1 % (0.5) pts 10.0% 2.1 pts 27.0 % 25.0 % 2.0 pts 20.0% 5.0 pts 21.0 % 22.3 % (1.3) pts 19.8% 2.5 pts 15.8 % 16.0 % (0.2) pts 13.2% 2.8 pts 14.8 % 14.6 % 0.2 pts 12.5% 2.1 pts 29.2 % 27.0 % 2.2 pts 22.2% 4.8 pts 23.0 % 23.8 % (0.8) pts 21.2% 2.6 pts 18.4 % 18.2 % 0.2 pts 15.5% 2.7 pts 33

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Analysis of Operations (In millions) 2016 2015 2014 Calculation of Adjusted EBIT Return On Invested Capital (trailing four quarters): Adjusted EBIT $ 213.8 $ 226.7 $ 195.4 Invested Capital: Trade accounts receivable 217.1 203.6 225.8 Inventories 121.6 105.3 122.9 Accounts payable (122.6) (109.0) (112.3) 216.1 199.9 236.4 Other current assets (excluding income taxes and related party loans receivable) 41.2 34.5 38.6 Properties and equipment, net 232.2 197.1 197.5 Goodwill 119.3 102.5 114.0 Technology and other intangible assets, net 53.0 33.3 44.0 Other assets (excluding capitalized financing fees) 22.8 10.1 8.5 Other current liabilities (excluding income taxes, restructuring, repositioning and accrued interest) (110.5) (96.9) (95.0) Other liabilities (excluding other postretirement benefits liability) (17.7) (8.6) (9.1) Total invested capital $ 556.4 $ 471.9 $ 534.9 Adjusted EBIT Return On Invested Capital (non-GAAP) 38.4% 48.0% 36.5% ___________________________________________________________________________________________________________________ Amounts may not add due to rounding. (A) GCP's segment operating income includes only GCP's share of income of consolidated joint ventures. (B) Management allocates corporate costs to each segment to the extent such costs are directly attributable to the segments. (C) Certain pension costs include only ongoing costs recognized quarterly, which include service and interest costs, expected returns on plan assets and amortization of prior service costs/credits. SCC, SBM and Darex segment operating income and corporate costs do not include any amounts for pension expense. Other pension related costs including annual mark-to-market adjustments, actuarial gains and losses, gains or losses from curtailments and terminations and other related costs are excluded from Adjusted EBIT. These amounts are not used by management to evaluate the performance of the GCP businesses and significantly affect the peer-to-peer and period-to-period comparability of our financial results. Mark-to-market adjustments, actuarial gains and losses, and other related costs relate primarily to changes in financial market values and actuarial assumptions and are not directly related to the operation of the GCP businesses. NM Not meaningful. 34

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Adjusted EPS The following table reconciles our Diluted EPS (GAAP) to our Adjusted EPS (non-GAAP). Year Ended December 31, 2016 Tax Per (In millions, except per share amounts) Pre-Tax Effect After-Tax Share Diluted Earnings Per Share (GAAP) $ 1.02 Repositioning expenses $ 15.3 $ 5.5 $ 9.8 0.14 Restructuring expenses 1.9 0.5 1.4 0.02 Gain on termination and curtailment of pension and other postretirement plans (0.8) (0.3) (0.5) (0.01) Pension MTM adjustment and other related costs, net 23.2 8.0 15.2 0.21 Third-party acquisition-related costs 2.1 0.8 1.3 0.02 Amortization of acquired inventory fair value adjustment 1.3 0.5 0.8 0.01 Other financing costs 1.2 0.5 0.7 0.01 Discrete tax items: Discrete tax items, including adjustments to uncertain tax positions — 1.2 (1.2) (0.01) Adjusted EPS (non-GAAP) $ 1.41 GCP Overview Following is an overview of our financial performance for the years ended December 31, 2016, 2015 and 2014. During these periods, we benefited from increased construction spending in North America, and to a lesser extent, increased construction spending in Asia Pacific. Sales volumes in Europe and Latin America have been weaker, particularly in Latin America. We generally expect these demand trends to continue through 2017. We also benefited from declining raw material costs in 2015 and 2016, which contributed to the increase in gross margin in these years. Prices for certain raw materials have begun to rise, and we anticipate modest cost inflation in 2017. Currency changes, due to the stronger U.S. dollar, have had a significant negative effect on revenue during this time period and we expect currency changes to continue to have a negative effect through 2017. Net Sales and Gross Margin 35

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The following table identifies the year-over-year increase or decrease in sales attributable to changes in volume and/or mix, product price, the impact of currency translation and for changes in net sales in Venezuela for 2016. 2016 as a Percentage Increase (Decrease) from 2015 Currency Net Sales in Net Sales Variance Analysis Volume(1) Price(1) Translation(1) Venezuela Total Change Specialty Construction Chemicals (0.9)% 0.3 % (3.3)% (6.3)% (10.2)% Specialty Building Materials 7.4 % 0.5 % (1.7)% —% 6.2 % Darex Packaging Technologies 2.2 % (1.2)% (3.2)% (3.0)% (5.2)% Net sales 2.3 % —% (2.8)% (3.9)% (4.4)% By Region: North America 6.5 % 0.1 % (0.2)% —% 6.4 % Europe Middle East Africa (1.4)% (0.6)% (3.8)% —% (5.8)% Asia Pacific 1.6 % (2.0)% (1.7)% —% (2.1)% Latin America (3.5)% 5.8 % (12.7)% (23.3)% (33.7)% __________________________ (1) Excludes net sales in Venezuela. Net sales of $1,355.8 million for 2016 decreased $62.8 million or 4.4% compared with the prior year primarily due to a decrease of sales in Venezuela and unfavorable currency translation, partially offset by higher sales volume in SBM and Darex. The strengthening of the US dollar against the euro, British pound, Argentine peso and other global currencies resulted in unfavorable foreign exchange impacts, particularly in SCC and Darex. Excluding Venezuela, net sales for 2016 decreased 0.5% compared with the prior year. Net sales in Venezuela decreased $55.9 million or 79.3% in 2016 compared with the prior year, primarily due to the devaluation of the Venezuelan bolivar in the third quarter of 2015 and further weakening against the U.S. dollar in 2016. See "Venezuela" below for further discussion. The following table presents Venezuela's net sales, Adjusted Gross Profit, and Adjusted EBIT by operating segment as compared with the prior year. Venezuela Financial Performance for the Year Ended December 31, 2016 ($ in millions) SCC Darex Corporate Total Venezuela Net sales $ 8.5 $ 6.1 $ — $ 14.6 Adjusted Gross Profit 4.2 3.8 — 8.0 Adjusted EBIT 3.0 3.3 (3.6) 2.7 Venezuela Financial Performance for the Year Ended December 31, 2015(1) ($ in millions) SCC Darex Corporate Total Venezuela Net sales $ 54.4 $ 16.1 $ — $ 70.5 Adjusted Gross Profit 29.0 6.3 — 35.3 Adjusted EBIT 26.9 4.9 (2.5) 29.3 36

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Year Ended December 31, 2016 versus Year Ended December 31, 2015 - Change (%) SCC Darex Corporate Total Venezuela Net sales (84.4)% (62.1)% NM (79.3)% Adjusted Gross Profit (85.5)% (39.7)% NM (77.3)% Adjusted EBIT (88.8)% (32.7)% 44.0% (90.8)% __________________________ (1) In the table above for the year ended December 31, 2015, Venezuela's Adjusted Gross Profit excludes the $13.7 million loss in Venezuela included in cost of goods sold and Adjusted EBIT excludes the $73.2 million currency and other financial losses in Venezuela incurred as a result of the currency devaluation in the third quarter of 2015. GCP's gross margin of 39.0% increased 260 basis points for 2016 compared with the prior year, primarily due to lower raw material cost, productivity improvements and a $13.7 million loss in Venezuela included in cost of goods sold in the third quarter of 2015 that did not repeat in 2016. GCP's Adjusted Gross Margin of 39.7% for 2016 increased 180 basis points compared with the prior year, primarily due to lower raw material cost and productivity improvements. The following table identifies the year-over-year increase or decrease in net sales attributable to changes in volume and/or mix, product price, the impact of currency translation and for changes in net sales in Venezuela for 2015. 2015 as a Percentage Increase (Decrease) from 2014 Currency Net Sales in Net Sales Variance Analysis Volume(1) Price(1) Translation(1) Venezuela Total Change Specialty Construction Chemicals 0.8 % 0.1 % (8.4)% 3.1% (4.4)% Specialty Building Materials 8.5 % 1.1 % (4.6)% —% 5.0 % Darex Packaging Technologies (3.6)% (0.5)% (8.9)% —% (13.0)% Net sales 1.7 % 0.2 % (7.6)% 1.5% (4.2)% By Region: North America 7.8 % (0.2)% (0.8)% —% 6.8 % Europe Middle East Africa (0.1)% —% (13.8)% —% (13.9)% Asia Pacific 1.6 % (0.2)% (7.1)% —% (5.7)% Latin America (8.5)% 2.1 % (12.4)% 9.7% (9.1)% __________________________ (1) Excludes net sales in Venezuela Net sales of $1,418.6 million for 2015 decreased $61.8 million or 4.2% compared with the prior year, primarily due to unfavorable currency translation, partially offset by improved pricing and higher sales volumes. Unfavorable currency translation against the U.S. dollar, primarily in Europe, impacted all operating segments. Higher sales volumes in SCC and SBM were partially offset by lower sales volumes in Darex. Net sales in Venezuela increased $22.4 million or 46.6% in 2015 compared with the prior year, largely due to significant price inflation. See "Venezuela" below for further discussion. The following table presents Venezuela's net sales, Adjusted Gross Profit, and Adjusted EBIT by operating segment as compared with the prior year. Venezuela Financial Performance for the Year Ended December 31, 2015(1) ($ in millions) SCC Darex Corporate Total VZ Net sales $ 54.4 $ 16.1 $ — $ 70.5 Adjusted Gross Profit 29.0 6.3 — 35.3 Adjusted EBIT 26.9 4.9 (2.5) 29.3 37

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Venezuela Financial Performance for the Year Ended December 31, 2014 ($ in millions) SCC Darex Corporate Total VZ Net sales $ 31.7 $ 16.4 $ — $ 48.1 Adjusted Gross Profit 15.9 5.6 — 21.5 Adjusted EBIT 14.3 4.3 (1.3) 17.3 Year Ended December 31, 2015 versus Year Ended December 31, 2014 - Change (%) SCC Darex Corp Total VZ Net sales 71.6% (1.8)% NM 46.6% Adjusted Gross Profit 82.4% 12.5 % NM 64.2% Adjusted EBIT 88.1% 14.0 % 92.3% 69.4% __________________________ 1) In the table above, Venezuela's Adjusted Gross Profit excludes the $13.7 million loss in Venezuela included in cost of goods sold and Adjusted EBIT excludes the $73.2 million currency and other financial losses in Venezuela incurred as a result of the currency devaluation in the third quarter of 2015. GCP's gross margin was 36.4% for 2015 compared with 35.8% for the prior year, an improvement of 60 basis points. The increase was primarily due to improved pricing and volume in SBM and SCC, as well as lower raw material costs in all segments, partially offset by higher pension-related costs and a $13.7 million loss in Venezuela recorded in cost of goods sold. Adjusted Gross Margin was 37.9% for 2015 compared with 35.4% for the prior year, an improvement of 250 basis points. The increase was primarily due to improved pricing and lower raw material costs, partially offset by lower sales volume in Darex. Net Income Attributable to GCP Shareholders Net income attributable to GCP shareholders was $72.8 million for 2016, an increase of 81.5% compared with $40.1 million for the prior year. The increase was primarily due to the $73.2 million loss in Venezuela recorded in the third quarter of 2015 that did not repeat in 2016, lower income taxes and restructuring expenses and higher gross profit, partially offset by higher interest, repositioning and pension costs. Net income was $40.1 million for 2015, a decrease of 70.1% compared with $134.3 million for the prior year. The decrease was primarily due to the $73.2 million loss in Venezuela recorded in the third quarter of 2015, and higher income taxes and pension costs. 38

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Adjusted EBIT Adjusted EBIT was $213.8 million for 2016, a decrease of 5.7% compared with the prior year. The decrease was primarily due to a $26.6 million decrease in Venezuela’s Adjusted EBIT and an increase in pension costs, partially offset by higher gross profit driven by higher sales volumes and lower raw material costs. Excluding Venezuela, Adjusted EBIT increased 6.9%. Adjusted EBIT Margin of 15.8% declined slightly from the prior year primarily due to the adverse currency impacts of Venezuela. Adjusted EBIT was $226.7 million for 2015, an increase of 16.0% compared with the prior year primarily due to higher sales volume, lower raw material costs, cost savings from our restructuring initiatives and improved pricing which more than offset unfavorable currency translation. Adjusted EBIT margin was 16.0% for 2015, an increase compared with 13.2% for the prior year. The increase was primarily due to higher coatings demand in Europe and North America from new product technology offset by adverse currency impacts in Venezuela and lower demand for our coatings and closure products in Asia Pacific and Latin America. Adjusted EBIT Return On Invested Capital Adjusted EBIT Return On Invested Capital for 2016 was 38.4%, a decrease from 48.0% in 2015. The decrease was mainly driven by lower Adjusted EBIT and an increase in invested capital primarily due to the acquisition of Halex in the fourth quarter of 2016. 39

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Adjusted EBIT Return On Invested Capital for 2015 was 48.0%, an increase from 36.5% for 2014. The increase was primarily due to increases in Adjusted EBIT offset by decreases in invested capital due in part to foreign currency translation. We manage our operations with the objective of maximizing sales, earnings and cash flow over time. Doing so requires that we successfully balance our growth, profitability and working capital and other investments to support sustainable, long-term financial performance. We use Adjusted EBIT Return On Invested Capital as a performance measure in evaluating operating results, in making operating and investment decisions and in balancing the growth and profitability of our operations. Generally, we favor those businesses and investments that provide the highest return on invested capital. Operating Segment Overview—Specialty Construction Chemicals (SCC) Following is an overview of the financial performance of SCC for the years ended December 31, 2016, 2015 and 2014. Net Sales—SCC Net sales were $623.8 million for 2016, a decrease of $70.5 million or 10.2% compared with the prior year. The decrease in net sales was primarily due to sales in Venezuela, which declined $45.9 million or 84.4%, over the same period. Excluding Venezuela, net sales declined 3.8% from the prior year primarily due to the effects of foreign currency exchange and lower volumes, partially offset by price increases. Sales volume increases in North America, Asia Pacific and Europe were more than offset by declines in Latin America, primarily in Brazil. Currency translation had an unfavorable impact in all regions, particularly Latin America. Price increases in Latin America and North America were partially offset by declines in Asia Pacific and EMEA. Sales volumes declined in our Concrete business due to year-over-year declines in Latin America as a result of unfavorable macro-economic conditions, particularly in Brazil, which offset volume increases in North America and Europe. Sales volumes in our Cement business increased slightly primarily due to improved demand in Asia Pacific. Sales were $694.3 million for 2015, a decrease of $32.0 million or 4.4% compared with the prior year. The sales decrease was primarily due to unfavorable currency translation in Europe and Latin America, partially offset by sales increases in Venezuela, improved pricing and an increase in sales volumes in North America, Asia Pacific and Europe. 40

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Segment Operating Income (SOI) and Margin—SCC Gross profit was $229.9 million for 2016, a decrease of $14.4 million or 5.9% compared with the prior year, primarily due to lower gross profit in Venezuela, which declined $24.8 million in the same period. Gross margin was 36.9% compared with 35.2% for the prior year primarily due to lower raw material costs and increased productivity, partially offset by lower gross profit from Venezuela. Segment operating income was $72.6 million for 2016, a decrease of $11.1 million or 13.3% compared with the prior year, primarily due to the reduction in gross profit and higher general and administrative expenses. Excluding Venezuela, segment operating income increased 22.5%. Segment operating margin for the year was 11.6%. Gross profit was $244.3 million for 2015, a decrease of $0.5 million or 0.2% compared with the prior year. Gross margin was 35.2% compared with 33.7% for the prior year, primarily due to improved pricing in Venezuela, volume increases in North America and Asia Pacific and lower raw material costs. Segment operating income was $83.7 million for 2015, an increase of $11.3 million or 15.6% compared with the prior year. Segment operating margin increased to 12.1%, an improvement of 210 basis points compared with the prior year. These increases primarily resulted from volume growth in North America, Asia Pacific and Europe in addition to lower raw material costs, productivity gains and lower operating expenses. 41

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