MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1.

Summary of Significant Accounting Policies

Business

The Company is a resource- and technology-based company that develops, produces and markets on a worldwide basis a broad range of specialty mineral, mineral-based and synthetic mineral products and supporting systems and services.

Basis of Presentation

The accompanying consolidated financial statements include the accounts of Minerals Technologies Inc. (the "Company"), its wholly and majority-owned subsidiaries, as well as variable interest entities for which the Company is the primary beneficiary. All intercompany balances and transactions have been eliminated in consolidation.

On May 9, 2014, the Company acquired AMCOL International Corporation (“AMCOL”), see Note 2. The accompanying Consolidated Statements of Income include the results of operations of the acquired AMCOL businesses from May 9, 2014, through December 31, 2014.

Use of Estimates

The Company employs accounting policies that are in accordance with U.S. generally accepted accounting principles and require management to make estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reported period. Significant estimates include those related to revenue recognition, valuation of accounts receivables, valuation of inventories, valuation of long-lived assets, goodwill and other intangible assets, pension plan assumptions, valuation of product liability and asset retirement obligation, income tax, income tax valuation allowances, and litigation and environmental liabilities. Actual results could differ from those estimates.

Cash Equivalents and Short-term Investments

The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. Short-term investments consist of financial instruments, mainly bank deposits, with original maturities beyond three months, but less than twelve months. Short-term investments amounted to $2.0 million and $2.6 million at December 31, 2016 and 2015, respectively. There were no unrealized holding gains and losses on the short-term bank investments held at December 31, 2016.

Trade Accounts Receivable

Trade accounts receivables are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Company's best estimate of the amount of probable credit losses in the Company's existing accounts receivable. The Company determines the allowance based on historical write-off experience and specific allowances for bankrupt customers. The Company also analyzes the collection history and financial condition of its other customers, considering current industry conditions and determines whether an allowance needs to be established. The Company reviews its allowance for doubtful accounts monthly. Past due balances over 90 days based on payment terms are reviewed individually for collectability. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance-sheet credit exposure related to its customers.

Inventories

Inventories are valued at the lower of cost or market. Cost is determined by the first-in, first-out (FIFO) method.

Additionally, items such as idle facility expense, excessive spoilage, freight handling costs, and re-handling costs are recognized as current period charges. The allocation of fixed production overheads to the costs of conversion are based upon the normal capacity of the production facility. Fixed overhead costs associated with idle capacity are expensed as incurred.

Property, Plant and Equipment

Property, plant and equipment are recorded at cost. Significant improvements are capitalized, while maintenance and repair expenditures are charged to operations as incurred. The Company capitalizes interest cost as a component of construction in progress. The straight-line method of depreciation is used for substantially for all of the assets for financial reporting purposes, except for mining related equipment which uses units-of-production method. The annual rates of depreciation are 3% - 6.67% for buildings, 6.67% - 12.5% for machinery and equipment, 8% - 12.5% for furniture and fixtures and 12.5% - 25% for computer equipment and software-related assets. The estimated useful lives of our PCC production facilities and machinery and equipment pertaining to our natural stone mining and processing plants and our chemical plants are 15 years.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Property, plant and equipment are depreciated over their useful lives. Useful lives are based on management's estimates of the period that the assets can generate revenue, which does not necessarily coincide with the remaining term of a customer's contractual obligation to purchase products made using those assets. The Company's sales of PCC are predominantly pursuant to long-term evergreen contracts, initially ten years in length, with paper mills at which the Company operates satellite PCC plants. The terms of many of these agreements have been extended, often in connection with an expansion of the satellite PCC plant. Failure of a PCC customer to renew an agreement or continue to purchase PCC from a Company facility could result in an impairment of assets charge or accelerated depreciation at such facility.

Depletion of mineral reserves is determined on a unit-of-extraction basis for financial reporting purposes, based upon proven and probable reserves, and on a percentage depletion basis for tax purposes.

Stripping Costs Incurred During Production

Stripping costs are those costs incurred for the removal of waste materials for the purpose of accessing ore body that will be produced commercially. Stripping costs incurred during the production phase of a mine are variable costs that are included in the costs of inventory produced during the period that the stripping costs are incurred.

Accounting for the Impairment of Long-Lived Assets

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable, the Company estimates the undiscounted future cash flows (excluding interest), resulting from the use of the asset and its ultimate disposition. If the sum of the undiscounted cash flows (excluding interest) is less than the carrying value, the Company recognizes an impairment loss, measured as the amount by which the carrying value exceeds the fair value of the asset, determined principally using discounted cash flows.

Goodwill and Other Intangible Assets

Goodwill represents the excess of purchase price and related costs over the value assigned to the net tangible and identifiable intangible assets of businesses acquired. Goodwill is not amortized, but instead assessed for impairment. Intangible assets with estimable useful lives are amortized on a straight-line basis over their respective estimated lives to the estimated residual values, and reviewed for impairment.

The Company performs a qualitative assessment for each of its reporting units to determine if the two step process for impairment testing is required. If the Company determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company would then evaluate the recoverability of goodwill using a two-step impairment test approach at the reporting unit level. In the first step, the fair value for the reporting unit is compared to its book value including goodwill. In the case that the fair value of the reporting unit is less than book value, a second step is performed which compares the fair value of the reporting unit's goodwill to the book value of the goodwill. The fair value for the goodwill is determined based on the difference between the fair values of the reporting unit and the net fair values of the identifiable assets and liabilities of such reporting unit. If the fair value of the goodwill is less than the book value, the difference is recognized as impairment.

Investment in joint ventures

The Company uses the equity method of accounting to incorporate the results of its investments in companies in which it has significant influence, but does not control; and cost method of accounting in companies in which it cannot exercise significant control. The Company records the equity in earnings of its investments in joint ventures on a one month lag. At December 31, 2016, the book value of Company’s equity method investment was $14.4 million. The Company had no cost method investments at December 31, 2016.

Accounting for Asset Retirement Obligations

The Company provides for obligations associated with the retirement of long-lived assets and the associated asset retirement costs. The fair value of a liability for an asset retirement obligation is recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. The associated asset retirement costs are capitalized as part of the carrying amount of the long-lived asset. The Company also provides for legal obligations to perform asset retirement activities where timing or methods of settlement are conditional on future events.

The Company also records liabilities related to land reclamation as a part of the asset retirement obligations. The Company mines land for various minerals using a surface-mining process that requires the removal of overburden. In many instances, the Company is obligated to restore the land upon completion of the mining activity. As the overburden is removed, the Company recognizes this liability for land reclamation based on the estimated fair value of the obligation. The obligation is adjusted to reflect the passage of time and changes in estimated future cash outflows.

Fair Value of Financial Instruments

The recorded amounts of cash and cash equivalents, receivables, short-term borrowings, accounts payable, accrued interest, and variable-rate long-term debt approximate fair value because of the short maturity of those instruments or the variable nature of underlying interest rates. Short-term investments are recorded at cost, which approximates fair market value.

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MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Derivative Financial Instruments

The Company records derivative financial instruments which are used to hedge certain foreign exchange risk at fair value on the balance sheet. See Note 11 for a full description of the Company's hedging activities and related accounting policies.

Revenue Recognition

Revenue from sale of products is recognized when title passes to the customer, the customer assumes the risks and rewards of ownership, and collectability is reasonably assured; generally, this occurs when the goods are shipped to the customer. In most of the Company's PCC contracts, the price per ton is based upon the total number of tons sold to the customer during the year. Under those contracts the price billed to the customer for shipments during the year is based on periodic estimates of the total annual volume that will be sold to such customer. Revenues are adjusted at the end of each year to reflect the actual volume sold. The Company also has consignment arrangements with certain customers in our Refractories segment. Revenues for these transactions are recorded when the consigned products are consumed by the customer.

Revenue from sales of equipment is recorded upon completion of installation and receipt of customer acceptance. Revenue from services is recorded when the services have been performed and collectability is reasonably assured.

Revenue from long-term construction contracts is recorded using the percentage-of-completion method. Progress is generally based upon costs incurred to date as compared to the total estimated costs to complete the work under the contract or the amount of product installed in relation to the total amount expected to be installed. All known or anticipated losses on contracts are provided when they become evident. Cost adjustments that are in the process of being negotiated with customers for extra work or changes in scope of work are included in revenue when collection is reasonably assured.

Foreign Currency

The assets and liabilities of the Company's international subsidiaries are translated into U.S. dollars using exchange rates at the respective balance sheet date. The resulting translation adjustments are recorded in accumulated other comprehensive income (loss) in shareholders' equity. Income statement items are generally translated at monthly average exchange rates prevailing during the period. International subsidiaries operating in highly inflationary economies translate non-monetary assets at historical rates, while net monetary assets are translated at current rates, with the resulting translation adjustments included in net income. At December 31, 2016, the Company had no international subsidiaries operating in highly inflationary economies.

Income Taxes

Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

The Company operates in multiple taxing jurisdictions, both within the U.S. and outside the U.S. In certain situations, a taxing authority may challenge positions that the Company has adopted in its income tax filings. The Company regularly assesses its tax position for such transactions and includes reserves for those differences in position. The reserves are utilized or reversed once the statute of limitations has expired or the matter is otherwise resolved.

The application of income tax law is inherently complex. Laws and regulations in this area are voluminous and are often ambiguous. As such, we are required to make many subjective assumptions and judgments regarding our income tax exposures. Interpretations of and guidance surrounding income tax laws and regulations change over time. As such, changes in our subjective assumptions and judgments can materially affect amounts recognized in the consolidated balance sheets and statements of operations. The Company's accounting policy is to recognize interest and penalties as part of its provision for income taxes. See Note 7 for additional detail on our uncertain tax positions.

The accompanying financial statements do not include a provision for U.S. income taxes on international subsidiaries' unremitted earnings, which are expected to be permanently reinvested overseas.

Research and Development

Research and development costs are expensed as incurred.

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MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Accounting for Stock-Based Compensation

The Company recognizes compensation expense for share-based awards based upon the grant date fair value over the vesting period.

Pension and Post-retirement Benefits

The Company has defined benefit pension plans covering the majority of its employees. The benefits are generally based on years of service and an employee's modified career earnings.

The Company also provides post-retirement healthcare benefits for the majority of its retirees and employees in the United States. The Company measures the costs of its obligation based on its best estimate. The net periodic costs are recognized as employees render the services necessary to earn the post-retirement benefits.

The Company assumed AMCOL’s qualified defined benefit pension plan which covers substantially all of AMCOL domestic employees hired before January 1, 2004, and supplementary pension plan which provides benefits in excess of qualified plan limitation for certain employees.

Environmental

Expenditures that relate to current operations are expensed or capitalized as appropriate. Expenditures that relate to an existing condition caused by past operations and which do not contribute to current or future revenue generation are expensed. Liabilities are recorded when it is probable the Company will be obligated to pay amounts for environmental site evaluation, remediation or related costs, and such amounts can be reasonably estimated.

Earnings Per Share

Basic earnings per share have been computed based upon the weighted average number of common shares outstanding during the period.

Diluted earnings per share have been computed based upon the weighted average number of common shares outstanding during the period assuming the issuance of common shares for all potentially dilutive common shares outstanding.

Subsequent events

The Company has evaluated for subsequent events through the date of issuance of its financial statements.

Recently Issued accounting Standards

Changes to accounting principles generally accepted in the United States of America (U.S. GAAP) are established by the Financial Accounting Standards Board (FASB) in the form of accounting standards updates (ASUs) to the FASB’s Accounting Standards Codification. The Company considers the applicability and impact of all ASUs. ASUs not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on our consolidated financial position and results of operations.

Revenue from Contracts with Customers

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers” which will supersede nearly all existing revenue recognition guidance under U.S. GAAP. The underlying principle is that an entity will recognize revenue to depict the transfer of goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods or services. The guidance provides a five-step analysis of transactions to determine when and how revenue is recognized. Other major provisions include capitalization of certain contract costs, consideration of time value of money in the transaction price, and allowing estimates of variable consideration to be recognized before contingencies are resolved in certain circumstances. The guidance also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers. The guidance is effective for the interim and annual periods beginning on or after December 15, 2017. The guidance permits the use of either a retrospective or cumulative effect transition method. The Company has not yet selected a transition method and is currently evaluating the impact of this ASU on the Company’s consolidated financial statements and related disclosures. The Company expects to complete this analysis in early 2017.

Inventory – Simplifying the Measurement of Inventory

In July 2015, the FASB issued ASU No. 2015-11, “Inventory (Topic 330): Simplifying the Measurement of Inventory.” Under this accounting guidance, inventory will be measured at the lower of cost and net realizable value and other options that currently exist for market value will be eliminated. ASU No. 2015-11 defines net realizable value as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. No other changes were made to the current guidance on inventory measurement. ASU 2015-11 is effective for fiscal years beginning after December 15, 2016, and interim periods within fiscal years beginning after December 15, 2017 with early adoption permitted. The adoption of this guidance is not expected to have a material impact on the Company’s financial statements.

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MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Leases

In February 2016, the FASB issued ASU 2016-02, “Leases”, which requires lessees to recognize most leases on-balance sheet, thereby increasing their reported assets and liabilities, in some cases very significantly. Lessor accounting remains substantially similar to current U.S. GAAP. ASU 2016-02 is effective for public business entities for annual and interim periods in fiscal years beginning after December 15, 2018. ASU 2016-02 mandates a modified retrospective transition method for all entities. The Company is currently evaluating the impact of this ASU on the Company’s consolidated financial statements and related disclosures; however, the Company does not expect the adoption of this guidance to have a material impact on the Company’s financial statements.

Investments – Equity Method and Joint Ventures

In March 2016, the FASB issued ASU 2016-07, “Simplifying the Transition to the Equity Method of Accounting”, which eliminates the requirement for an investor to retroactively apply the equity method when its increase in ownership interest (or degree of influence) in an investee triggers equity method accounting. ASU 2016-07 is effective for all entities for interim and annual periods in fiscal years beginning after December 15, 2016. The adoption of this guidance is not expected to have a material impact on the Company’s financial statements.

Stock Compensation – Improvements to Employee Share-Based Payment Accounting

In March 2016, the FASB issued ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting”, which is intended to improve the accounting for share-based payment transactions as part of the FASB’s simplification initiative. The ASU changes seven aspects of the accounting for share-based payment award transactions, including: (1) accounting for income taxes; (2) classification of excess tax benefits on the statement of cash flows; (3) forfeitures; (4) minimum statutory tax withholding requirements; (5) classification of employee taxes paid on the statement of cash flows when an employer withholds shares for tax-withholding purposes; (6) practical expedient – expected term (nonpublic only); and (7) intrinsic value (nonpublic only). The ASU is effective for fiscal years beginning after December 15, 2016, and interim periods within those years for public business entities. Early adoption is permitted in any interim or annual period provided that the entire ASU is adopted. The adoption of this guidance is not expected to have a material impact on the Company’s financial statements.

Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory

In October 2016, the FASB issued ASU 2016-16, "Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory", which requires entities to recognize at the transaction date the income tax consequences of intercompany asset transfer other than inventory. ASU 2016-16 is effective for fiscal years beginning after December 15, 2017. Early adoption is permitted for this ASU, but only at the beginning of an annual period for which no financial statements have already been issued or made available for issuance. The adoption of this guidance is not expected to have a material impact on the Company's financial statements.

Note 2.

Business Combination

On May 9, 2014, pursuant to the Merger Agreement dated March 10, 2014, the Company acquired AMCOL, based in Hoffman Estates, Illinois, a leading international producer of specialty materials and related products and services for industrial and consumer markets.

The Company acquired AMCOL by completing a tender offer to purchase AMCOL’s outstanding shares of common stock and the subsequent merger of AMCOL with and into a wholly-owned subsidiary of MTI. At the expiration of the Company’s tender offer, each tendered share of AMCOL common stock was purchased for consideration equal to $45.75 in cash, and at the effective time of the back-end merger, each share of AMCOL common stock not tendered (other than shares owned by the Company or held by AMCOL in treasury) was converted into the right to receive consideration equal to $45.75 in cash. Upon completion of the merger, AMCOL became a wholly owned direct subsidiary of MTI. Through the tender offer and the merger, the Company paid $1,519.4 million in cash to acquire all of the outstanding shares of AMCOL.

In connection with the acquisition of AMCOL, the Company entered into a $1,560.0 million senior secured term loan facility (the “Term Facility”), the net proceeds of which, together with the Company’s cash on hand, were used as cash consideration for the acquisition of AMCOL and to refinance certain existing indebtedness of the Company and AMCOL and to pay fees and expenses in connection with the foregoing. See Note 14.

The fair value of the total consideration transferred, net of cash acquired, was $1,802.3 million and comprised of the following:

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

	(millions of dollars)
Cash consideration transferred to AMCOL shareholders	$	1,519.4
AMCOL notes repaid at close		325.6
Total consideration transferred to debt and equity holders		1,845.0
Cash acquired		42.7
Total consideration transferred to debt and equity holders, net of cash acquired	$	1,802.3

The acquisition of AMCOL has been accounted for using the acquisition method of accounting, which requires, among other things, the assets acquired and liabilities assumed be recognized at their respective fair values as of the acquisition date. As of May 9, 2015, the Company has completed its assessment of property, certain reserves (including environmental, legal, and tax matters), obligations and deferred taxes, as well as our review of AMCOL’s existing accounting policies. The purchase price allocation has been finalized.

The following table summarizes the final amounts recognized for assets acquired and liabilities assumed as of the acquisition date, as well as adjustments made in 2015 to the amounts initially recorded in 2014 (measurement period adjustments). The measurement period adjustments did not have a significant impact on our consolidated statements of income, balance sheets or cash flows in any period and therefore, we have not retrospectively adjusted our financial statements.

	Preliminary Allocation Previously Reported on Form 10-K as of December 2014		Increase		Final Allocation
	(millions of dollars)		(millions of dollars)		(millions of dollars)
Accounts receivable	$	235.7	$	-	$	235.7
Inventories		157.3		-		157.3
Other current assets		65.0		-		65.0
Mineral rights		535.5		-		535.5
Plant, property and equipment		371.2		-		371.2
Goodwill		708.1		12.8		720.9
Intangible assets		214.3		8.8		223.1
Other non-current assets		51.4		9.2		60.6
Total assets acquired	$	2,338.5	$	30.8	$	2,369.3
Accounts payable		66.4		-		66.4
Accrued expenses		61.6		-		61.6
Non-current deferred tax liability		322.3		1.5		323.8
Other non-current liabilities		85.9		29.3		115.2
Total liabilities assumed	$	536.2	$	30.8	$	567.0
Net assets acquired	$	1,802.3	$	-	$	1,802.3

The Company used the income, market, or cost approach (or a combination thereof) for the preliminary valuation, and used valuation inputs and analyses that were based on market participant assumptions. Market participants are considered to be buyers and sellers unrelated to the Company in the principal or most advantageous market for the asset or liability. For certain items, the carrying value was determined to be a reasonable approximation of fair value based on the information available. The Company’s estimates related to this valuation are considered to be critical accounting estimates because they are susceptible to change from period to period based on our judgments about a variety of factors and due to the uncontrollable variability of market factors underlying them. For example, in performing assessments of the fair value of these assets, the Company makes judgments about the future performance business of the acquired business, economic, regulatory, and political conditions affecting the net assets acquired, appropriate risk-related rates for discounting estimated future cash flows, reasonable estimates of disposal values, and market royalty rate.

Goodwill was calculated as the excess of the consideration transferred over the assets acquired and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. The goodwill is primarily attributable to fair value of expected synergies from combining the MTI and AMCOL businesses and will be allocated to the Performance Materials and Construction Technologies segments. Goodwill recognized as a result of this acquisition is not deductible for tax purposes.

In connection with the acquisition, the Company recorded an additional deferred tax liability of $323.8 million with a corresponding increase to goodwill. The increase in deferred tax liability represents the tax effect of the difference between the estimated assigned fair value of the tangible and intangible assets and the tax basis of such assets.

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MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Mineral rights were valued using discounted cash flow method, a Level 3 fair value input. Plant, property and equipment were valued using the replacement cost method adjusted for age and deterioration, also a Level 3 fair value input.

Intangible assets acquired mainly included technology and tradenames. Technology was valued using relief-from royalty method, a Level 3 fair value input, with a weighted average amortization period of 12 years. Tradenames were valued using multi-period excess earnings, also a Level 3 fair value input, with a weighted average amortization period of 34 years.

The Company incurred $8.0, $11.8 million and $19.1 million of acquisition and integration related cost during the years ended December 31, 2016, 2015 2014, respectively, which is reflected within the acquisition related transaction and integration costs line of the Consolidated Statements of Income.

Note 3.

Restructuring and Other Items, net

In 2014, the Company initiated a restructuring program and undertook actions to realign its business operations, improve efficiencies, profitability, and return on invested capital. This restructuring impacted all business segments of the Company and provided annualized savings of approximately $29 million (unaudited). This restructuring resulted in the following charges relating to asset impairment and reduction in workforce:

Asset impairment and other restructuring charges:

The asset impairment charges in 2014 related to the consolidation of certain manufacturing operations and administrative offices. The Company closed three Construction Technologies’ operations – two in Europe and one in Asia – and consolidated those operations into others in these regions. The Company also closed and consolidated the operations of one of its Performance Materials blending facilities in the U.S. The fair value of the associated assets was estimated using a discounted cash flow approach (a Level 3 fair value input).

In 2015, the Company recognized impairment charges for certain underutilized coiled tubing equipment within the Energy Services segment which have been abandoned by the Company.

In 2016, the Company recognized additional restructuring charges for lease termination costs, inventory write-offs and impairment of assets relating to its exit from the Nitrogen and Pipeline product lines and restructuring of other onshore services within the Energy Services segment as a result of the significant reduction in oil prices and overcapacity in the onshore oil service market. The Company expects to realize further annualized savings from this restructuring program of $11.5 million (unaudited). In addition, the Company recognized a $2.9 million gain on previously impaired assets in the Refractories Segment.

Work force reduction:

In 2014, the Company announced a 10% permanent reduction of its workforce including elimination of duplicate corporate functions, deployment of our shared service model, and consolidation and alignment of various corporate functions and regional locations across the Company.

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MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table outlines the amount of restructuring charges recorded within the Consolidated Statements of Income, and the segments they relate to:

Restructuring and Other Items, net	Year Ended December 31, 2016
	2016			2015		2014
	(millions of dollars)
Impairment of assets
Performance Materials	$	-		$	-	$	0.4
Construction Technologies		-			-		11.7
Energy Services		18.5			33.0		11.6
Corporate		-			1.2		-
Total impairment of assets charges	$	18.5		$	34.2	$	23.7

Severance and other employee costs
Specialty Minerals	$	-		$	-	$	3.0
Refractories		-			2.0		0.7
Performance Materials		-			-		5.6
Construction Technologies		-			-		5.8
Energy Services		12.7			9.0		3.7
Total severance and other employee costs	$	12.7		$	11.0	$	18.8

Other
Refractories	$	(2.9	)	$	-	$	-
Performance Materials		-			-		0.7

Total restructuring and other items, net	$	28.3		$	45.2	$	43.2

At December 31, 2016 and 2015, the Company had $3.6 million and $7.9 million, respectively, included within other current liabilities within our Consolidated Balance Sheets for cash expenditures needed to satisfy remaining obligations under these reorganization initiatives. The Company expects to pay these amounts by the end of 2017.

The following table is a reconciliation of our restructuring liability balance:

	(millions of dollars)
Restructuring liability, December 31, 2015	$	7.9
Additional provisions		12.7
Cash payments		(17.0	)
Restructuring liability, December 31, 2016	$	3.6

Note 4.

Stock-Based Compensation

At the Company’s 2015 Annual Meeting of Stockholders, the Company’s stockholders ratified the adoption of the Company’s 2015 Stock Award and Incentive Plan (the “2015 Plan”), which provides for grants of incentive and non-qualified stock options, restricted stock, stock appreciation rights, stock awards or performance unit awards. The 2015 Plan is substantially similar to the Company’s 2001 Stock Award and Incentive Plan (as amended and restated as of March 18, 2009, the “2001 Plan” and collectively with the 2015 Plan, the “Plans”). The Company established the 2015 Plan to increase the total number of shares of common stock reserved and available for issuance by 880,000 shares from the number of shares remaining under the 2001 Plan. With the ratification of the 2015 Plan by the Company’s stockholders, the 2001 Plan was discontinued as to new grants (however, all awards previously granted under the 2001 Plan remained unchanged). The Plans are administered by the Compensation Committee of the Board of Directors. Stock options granted under the Plan generally have a ten year term. The exercise price for stock options are at prices at or above the fair market value of the common stock on the date of the grant, and each award of stock options will vest ratably over a specified period, generally three years.

Stock-based compensation expense is recognized in the consolidated financial statements for stock options based on the grant date fair value.

Net income for years ended 2016, 2015 and 2014 include $3.5 million, $4.0 million and $3.1 million pre-tax compensation costs, respectively, related to stock option expense as a component of marketing and administrative expenses. All stock option expense is recognized in the consolidated statements of operations. The related tax benefit included in the statement of income on the non-qualified stock options was $1.4 million, $1.6 million and $1.2 million for 2016, 2015 and 2014, respectively.

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MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The benefits of tax deductions in excess of the tax benefit from compensation costs that were recognized or would have been recognized are classified as financing inflows on the consolidated statement of cash flows.

Stock Options

The fair value of options granted is estimated on the date of grant using the Black-Scholes valuation model. Compensation expense is recognized only for those options expected to vest, with forfeitures estimated at the date of grant based on the Company's historical experience and future expectations. The forfeiture rate assumption used for the periods ended December 31, 2016, 2015 and 2014 was 7.38%, 7.34% and 7.13%, respectively.

The weighted average grant date fair value for stock options granted during the years ended December 31, 2016, 2015 and 2014 was $14.34, $22.68 and $22.89, respectively. The weighted average grant date fair value for stock options vested during 2016, 2015 and 2014 was $20.94, $17.83 and $13.59, respectively. The total intrinsic value of stock options exercised during the years ended December 31, 2016, 2015 and 2014 was $4.9 million, $2.4 million and $13.0 million, respectively.

The fair value for stock awards was estimated at the date of grant using the Black-Scholes option valuation model with the following weighted average assumptions for the years ended December 31, 2016, 2015 and 2014:

	2016			2015			2014
Expected life (in years)		6.5			6.4			6.5
Interest rate		1.72	%		1.52	%		2.16	%
Volatility		36.75	%		36.86	%		37.15	%
Expected dividend yield		0.54	%		0.33	%		0.34	%

The expected term of the options represents the estimated period of time until exercise and is based on historical experience of similar awards, based upon contractual terms, vesting schedules, and expectations of future employee behavior. The expected stock-price volatility is based upon the historical and implied volatility of the Company's stock. The interest rate is based upon the implied yield on U.S. Treasury bills with an equivalent remaining term. Estimated dividend yield is based upon historical dividends paid by the Company.

The following table summarizes stock option activity for the year ended December 31, 2016:

	Awards			Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value (Millions)
Awards outstanding at December 31, 2015		1,091,844		$	42.29
Granted		383,622			38.59
Exercised		(150,944	)		36.66
Canceled		(125,797	)		43.78

Awards outstanding at December 31, 2016		1,198,725			41.66		6.51	$	42.7
Awards exercisable at December 31, 2016		767,313			39.43		5.31		29.0

The aggregate intrinsic value above is calculated before applicable income taxes, based on the Company's closing stock price of $77.25 as of the last business day of the period ended December 31, 2016 had all options been exercised on that date. The weighted average intrinsic value of the options exercised during 2016, 2015 and 2014 was $32.34, $32.07 and $40.17 per share, respectively. As of December 31, 2016, total unrecognized stock-based compensation expense related to non-vested stock options was approximately $3.8 million, which is expected to be recognized over a weighted average period of approximately three years.

The Company issues new shares of common stock upon the exercise of stock options.

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MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Non-vested stock option activity for the year ended December 31, 2016 is as follows:

	Awards			Weighted Average Grant date Fair Value Per Share
Nonvested awards outstanding at December 31, 2015		353,859		$	57.21
Granted		383,622			38.59
Vested		(191,775	)		55.01
Canceled		(114,294	)		42.18
Nonvested awards outstanding at December 31, 2016		431,412			45.61

Restricted Stock

The Company has granted key employees rights to receive shares of the Company's common stock pursuant to the Plan. The rights will be deferred for a specified number of years of service, subject to restrictions on transfer and other conditions. Compensation expense for these shares is recognized over the vesting period. The Company granted 155,165 shares, 216,502 shares and 106,575 shares for the periods ended December 31, 2016, 2015 and 2014, respectively. The fair value was determined based on the market value of unrestricted shares. As of December 31, 2016, there was unrecognized stock-based compensation related to restricted stock of $6.1 million, which will be recognized over approximately the next three years. The compensation expense amortized with respect to all units was approximately $5.8 million, $8.8 million and $4.9 million for the periods ended December 31, 2016, 2015 and 2014, respectively. In addition, the Company recorded reversals of $3.8 million, $1.6 million and $2.1 million for periods ended December 31, 2016, 2015 and 2014, respectively, related to restricted stock forfeitures. Such costs and reversals are included in marketing and administrative expenses.

The following table summarizes the restricted stock activity for the Plan:

	Awards			Weighted Average Grant Date Fair Value Per Share
Unvested balance at December 31, 2015		284,245			58.63
Granted		155,165			38.37
Vested		(88,746	)		57.38
Canceled		(123,451	)		50.72
Unvested balance at December 31, 2016		227,213			49.57

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MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 5.

Earnings Per Share (EPS)

	Year Ended December 31,
	2016		2015		2014
	(in millions, except per share data)
Basic EPS
Amounts attributable to MTI
Income from continuing operations	$	133.4	$	107.9	$	90.3
Income from discontinued operations		-		-		2.1
Net income	$	133.4	$	107.9	$	92.4

Weighted average shares outstanding		34.9		34.7		34.5

Earnings per share attributable to MTI
Continuing operations	$	3.82	$	3.11	$	2.62
Discontinued operations		-		-		0.06
Net income	$	3.82	$	3.11	$	2.68

Diluted EPS
Amounts attributable to MTI
Income from continuing operations	$	133.4	$	107.9	$	90.3
Income from discontinued operations		-		-		2.1
Net income	$	133.4	$	107.9	$	92.4

Weighted average shares outstanding		34.9		34.7		34.5
Dilutive effect of stock options and stock units		0.3		0.3		0.3
Weighted average shares outstanding, adjusted		35.2		35.0		34.8

Earnings per share attributable to MTI
Continuing operations	$	3.79	$	3.08	$	2.59
Discontinued operations		-		-		0.06
Net income	$	3.79	$	3.08	$	2.65

Options to purchase 784 shares, 386,766 shares and 12,888 shares of common stock for the years ended December 31, 2016, 2015 and 2014, respectively, were not included in the computation of diluted earnings per share because they were anti-dilutive, as the exercise prices of the options were greater than the average market price of the common shares.

Note 6.

Discontinued Operations

During the year ended December 31, 2014, the Company reversed a facility closure accrual of $2.4 million, net of $0.6 million tax expense, for a previously impaired facility.

The following table provides selected financial information for the amounts included within discontinued operations in the Consolidated Statements of Income.

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MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

	Year Ended December 31,
	2016		2015		2014
	(millions of dollars)
Net sales	$	-	$	-	$	-

Production margin		-		-		-
Expenses		-		-		(0.3	)
Facility closure costs accrual (reversal)		-		-		(2.4	)

Income from operations	$	-	$	-	$	2.7

Provision for taxes on income	$	-	$	-	$	0.6

Income from discontinued operations, net of tax	$	-	$	-	$	2.1

Note 7.

Income Taxes

Income from operations before provision for taxes by domestic and foreign source is as follows:

	2016		2015		2014
	(millions of dollars)
Income from continuing operations before income taxes and income from affiliates and joint ventures:
Domestic	$	72.9	$	32.6	$	54.8
Foreign		97.4		100.0		68.2
	$	170.3	$	132.6	$	123.0

The provision (benefit) for taxes on income consists of the following:

	2016			2015			2014
	(millions of dollars)
Domestic
Taxes currently payable
Federal	$	18.7		$	1.4		$	28.1
State and local		4.4			1.2			3.4
Deferred income taxes		(8.8	)		(3.2	)		(15.1	)
Domestic tax provision		14.3			(0.6	)		16.4

Foreign
Taxes currently payable		23.2			22.7			20.3
Deferred income taxes		(2.2	)		0.7			(5.9	)
Foreign tax provision		21.0			23.4			14.4
Total tax provision	$	35.3		$	22.8		$	30.8

The provision for taxes on income shown in the previous table is classified based on the location of the taxing authority, regardless of the location in which the taxable income is generated.

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MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The major elements contributing to the difference between the U.S. federal statutory tax rate and the consolidated effective tax rate are as follows:

	2016			2015			2014

U.S. statutory rate		35.0	%		35.0	%		35.0	%

Depletion		(6.6	)%		(8.4	)%		(7.8	)%
Difference between tax provided on foreign earnings and the U.S. statutory rate		(6.4	)%		(8.3	)%		(9.5	)%
State and local taxes, net of federal tax benefit		1.1	%		0.3	%		1.0	%
Tax credits and foreign dividends		0.6	%		(0.5	)%		4.1	%
Change in valuation allowance		(1.1	)%		(0.9	)%		1.7	%
Impact of uncertain tax positions		0.4	%		(0.1	)%		0.4	%
Impact of officer's non-deductible compensation		0.1	%		2.9	%		2.7	%
Manufacturing deduction		(2.0	)%		(2.0	)%		(3.3	)%
Other		(0.4	)%		(0.8	)%		0.7	%
Consolidated effective tax rate		20.7	%		17.2	%		25.0	%

The Company believes that its accrued liabilities are sufficient to cover its U.S. and foreign tax contingencies. The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are presented below:

	2016			2015
	(millions of dollars)
Deferred tax assets attributable to:
Accrued liabilities	$	49.7		$	36.1
Net operating loss carry forwards		34.6			37.6
Pension and post-retirement benefits costs		55.4			55.0
Other		35.0			29.1
Valuation allowance		(24.8	)		(28.8	)
Total deferred tax assets		149.9			129.0
Deferred tax liabilities attributable to:
Plant and equipment, principally due to differences in depreciation		251.3			247.2
Intangible assets		96.3			98.7
Other		14.0			4.5
Total deferred tax liabilities		361.6			350.4
Net deferred tax asset (liability)	$	(211.7	)	$	(221.4	)

Net deferred tax assets and net deferred tax liabilities are as follows:

	2016			2015
	(millions of dollars)

Net deferred tax asset, long-term	$	27.1		$	30.6
Net deferred tax liability, long-term		238.8			252.0
Net deferred tax asset (liability), long-term	$	(211.7	)	$	(221.4	)

Net deferred tax assets are included in other assets and deferred charges.

The Company has $34.6 million of deferred tax assets arising from tax loss carry forwards which will be realized through future operations. Carry forwards of approximately $17.5 million expire over the next 20 years, and $17.1 million can be utilized over an indefinite period.

On December 31, 2016, the Company had $13.7 million of total unrecognized tax benefits. Included in this amount were a total of $9.5 million of unrecognized income tax benefits that, if recognized, would affect the Company's effective tax rate. While it is expected that the amount of unrecognized tax benefits will change in the next 12 months, we do not expect the change to have a significant impact on the results of operations or the financial position of the Company.

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MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes the activity related to our unrecognized tax benefits:

	2016		2015
	(millions of dollars)

Balance at beginning of the year	$	4.0	$	5.0
Increases related to current year tax positions		8.8		0.5
Increases related to new judgements		0.9		0.8
Decreases related to audit settlements and statue expirations		-		(2.3	)

Balance at the end of the year	$	13.7	$	4.0

The Company's accounting policy is to recognize interest and penalties accrued, relating to unrecognized income tax benefits as part of its provision for income taxes. The Company had recorded a $0.3 million benefit in interest and penalties during 2016 and had a total accrued balance on December 31, 2016 of $1.2 million.

The Company operates in multiple taxing jurisdictions, both within and outside the U.S. In certain situations, a taxing authority may challenge positions that the Company has adopted in its income tax filings. The Company, with a few exceptions (none of which are material), is no longer subject to U.S. federal, state, local, and European income tax examinations by tax authorities for years prior to 2010.

Net cash paid for income taxes were $30.6 million, $43.8 million and $5.7 million for the years ended December 31, 2016, 2015 and 2014, respectively.

The Company has not provided for U.S. federal and foreign withholding taxes on $560.3 million of foreign subsidiaries' undistributed earnings as of December 31, 2016 because such earnings are intended to be permanently reinvested overseas. To the extent the parent company has received foreign earnings as dividends; the foreign taxes paid on those earnings have generated tax credits, which have substantially offset related U.S. income taxes. However, in the event that the entire $560.3 million of foreign earnings were to be repatriated, incremental taxes may be incurred. We do not believe this amount would be more than $89.7 million.

Note 8.

Inventories

The following is a summary of inventories by major category:

	2016		2015
		(millions of dollars)
Raw materials	$	70.6	$	73.4
Work-in-process		5.4		5.4
Finished goods		80.5		86.1
Packaging and supplies		30.4		30.0
Total inventories	$	186.9	$	194.9

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MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 9.

Property, Plant and Equipment

The major categories of property, plant and equipment and accumulated depreciation and depletion are presented below:

	December 31,
	2016			2015
	(millions of dollars)
Mineral rights and reserves	$	547.8		$	553.8
Land		42.7			39.8
Buildings		195.6			179.7
Machinery and equipment		1,193.6			1,130.7
Furniture and fixtures and other		123.3			209.7
Construction in progress		38.4			53.6
		2,141.4			2,167.3
Less: accumulated depreciation and depletion		(1,089.6	)		(1,063.0	)
Property, plant and equipment, net	$	1,051.8		$	1,104.3

Depreciation and depletion expense for the years ended December 31, 2016, 2015 and 2014 was $75.4 million, $82.1 million and $76.6 million, respectively.

Note 10.

Goodwill and Other Intangible Assets

Goodwill and other intangible assets with indefinite lives are not amortized, but instead are assessed for impairment, at least annually. The carrying amount of goodwill was $778.7 million and $781.2 million as of December 31, 2016 and December 31, 2015, respectively. The net change in goodwill since December 31, 2015 was attributable to the effects of foreign exchange.

The balance of goodwill by segment and the activity occurring in the past two fiscal years is as follows:

	Specialty Minerals			Refractories			Performance Materials			Construction Technologies			Consolidated
	(millions of dollars)
Balance at December 31, 2014	$	13.7		$	49.0		$	453.2		$	255.0		$	770.9

Change in goodwill relating to:
Purchase price finalization								91.1			(78.3	)		12.8
Foreign exchange translation		(0.4	)		(2.0	)		(0.1	)		-			(2.5	)
Total Changes	$	(0.4	)	$	(2.0	)	$	91.0		$	(78.3	)	$	10.3

Balance at December 31, 2015	$	13.3		$	47.0		$	544.2		$	176.7		$	781.2

Change in goodwill relating to:
Purchase price finalization		-			-			-			-			-
Foreign exchange translation		(1.2	)		(1.3	)		-			-			(2.5	)
Total Changes		(1.2	)		(1.3	)		-			-			(2.5	)

Balance at December 31, 2016	$	12.1		$	45.7		$	544.2		$	176.7		$	778.7

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MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Acquired intangible assets subject to amortization as of December 31, 2016 and December 31, 2015 were as follows:

	Weighted Average Useful Life (Years)		December 31, 2016				December 31, 2015
			Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization


			(millions of dollars)
Tradenames		34	$	199.8	$	15.3	$	199.8	$	9.3
Technology		12		18.8		3.6		18.8		2.5
Patents and trademarks		17		6.4		4.8		6.4		4.4
Customer relationships		30		4.5		1.4		4.5		0.6
		28	$	229.5	$	25.1	$	229.5	$	16.8

The weighted average amortization period of the acquired intangible assets subject to amortization is approximately 28 years. Amortization expense was approximately $8.2 million, $7.9 million and $4.6 million for the years ended December 31, 2016, 2015 and 2014, respectively and is recorded within the Marketing and administrative expenses line within the Consolidated Statements of Income. The estimated amortization expense is $7.9 million annually for 2017-2021, and $164.9 million thereafter.

Note 11.

Derivative Financial Instruments and Hedging Activities

As a multinational corporation with operations throughout the world, the Company is exposed to certain market risks. The Company uses a variety of practices to manage these market risks, including, when considered appropriate, derivative financial instruments. The Company's objective is to offset gains and losses resulting from interest rates and foreign currency exposures with gains and losses on the derivative contracts used to hedge them. The Company uses derivative financial instruments only for risk management and not for trading or speculative purposes.

By using derivative financial instruments to hedge exposures to changes in interest rates and foreign currencies, the Company exposes itself to credit risk and market risk. Credit risk is the risk that the counterparty will fail to perform under the terms of the derivative contract. When the fair value of a derivative contract is positive, the counterparty owes the Company, which creates credit risk for the Company. When the fair value of a derivative contract is negative, the Company owes the counterparty, and therefore, it does not face any credit risk. The Company minimizes the credit risk in derivative instruments by entering into transactions with major financial institutions.

Market risk is the adverse effect on the value of a financial instrument that results from a change in interest rates, currency exchange rates, or commodity prices. The market risk associated with interest rate and forward exchange contracts is managed by establishing and monitoring parameters that limit the types and degree of market risk that may be undertaken.

Cash flow hedges:

For derivative instruments that are designated and qualify as cash flow hedges, the Company records the effective portion of the gain or loss in accumulated other comprehensive income (loss) as a separate component of shareholders' equity. The Company subsequently reclassifies the effective portion of gain or loss into earnings in the period during which the hedged transaction is recognized in earnings.

The Company utilizes interest rate swaps to limit exposure to market fluctuations on floating-rate debt. During the second quarter of 2016, the Company entered into a floating to fixed interest rate swap for an initial aggregate notional amount of $300 million. The notional amount at December 31, 2016 was $257 million. This interest rate swap is designated as a cash flow hedge. The gains and losses associated with this interest rate swap are recorded in accumulated other comprehensive income (loss). The fair value of this swap was an asset of $2.5 million at December 31, 2016 and is recorded in other assets and deferred charges on the Consolidated Balance Sheet.

In addition, the Company uses foreign exchange forward contracts to protect against foreign currency exchange rate risks inherent in its forecasted inventory purchases. The Company had 2 open foreign exchange contracts as of December 31, 2016, designated as cash flow hedges. The gains and losses associated with these forward exchange contracts are recognized into cost of sales. Gains and losses and hedge ineffectiveness associated with these derivatives were not significant. The fair value of these contracts at December 31, 2016 and 2015 was not significant.

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MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Other:

The Company is exposed to potential gains or losses from foreign currency fluctuations affecting net investments and earning denominated in foreign currencies. The Company is particularly sensitive to currency exchange rate fluctuations for the following currencies: British pound sterling (GBP), Chinese renminbi (CYN), Euro, Malaysian ringgit (MYR), Polish zloty (PLN), South African Rand (ZAR), Thai baht (THB) and Turkish lira (TRY). When considered appropriate, the Company enters into foreign exchange derivative contracts to mitigate the risk of fluctuations on these exposures. The Company does not designate these contracts for hedge accounting treatment and the changes in fair value of these contracts are recorded in earnings. The Company recorded losses of $0.6 million and $0.3 million in other non-operating income (deductions), net within the Consolidated Statements of Income for the years ended 2016 and 2015, respectively. There were 2 open contracts at December 31, 2016. The fair value of these contracts at December 31, 2016 was not significant. There were no open foreign exchange rate contracts at December 31, 2015.

Refer to Note 12 for further discussion of the determination of the fair value of derivatives.

Note 12.

Fair Value of Financial Instruments

Fair value is an exchange price that would be received for an asset or paid to transfer a liability (exit price) in an orderly transaction between market participants at the measurement date. The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability. The Company follows a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs about which little or no market data exists, therefore requiring an entity to develop its own assumptions.

Assets and liabilities measured at fair value are based on one or more of three valuation techniques. The three valuation techniques are as follows:

•	Market approach - prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.

•	Cost approach - amount that would be required to replace the service capacity of an asset or replacement cost.

•	Income approach - techniques to convert future amounts to a single present amount based on market expectations, including present value techniques, option-pricing and other models.

The Company primarily applies the income approach for foreign exchange derivatives for recurring fair value measurements and attempts to utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs.

The following table sets forth by level within the fair value hierarchy the Company's financial assets and liabilities accounted for at fair value on a recurring basis at the end of each of the past two years. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company's assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels.

			Fair Value Measurements Using
Description	Asset / (Liability) Balance at 12/31/16		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
		(millions of dollars)
Deferred compensation plan assets	$	10.8	$	-	$	10.8	$	-

Supplementary pension plan assets		10.4		-		10.4		-

Interest rate swap		2.5		-		2.5		-

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MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

			Fair Value Measurements Using
Description	Asset / (Liability) Balance at 12/31/16		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(milliions of dollars)
Money market funds	$	7.5	$	7.5	$	-	$	-

The fair value of investment in the money market funds is determined by quoted prices in active markets and is categorized as Level 1.

The fair value of foreign exchange contracts is determined based on inputs that are readily available in public markets or can be derived from information available in publicly quoted markets and are categorized as Level 2. Deferred compensation and supplementary pension plan assets related to the acquisition of AMCOL businesses and are valued using quoted prices for similar assets in active markets.

The Company does not have any financial assets or liabilities measured at fair value on a recurring basis categorized as Level 3, except for pension assets discussed in Note 15, and there were no transfers in or out of Level 3 during the year ended December 31, 2016 and 2015. There were also no changes to the Company's valuation techniques used to measure asset and liability fair values on a recurring basis.

Note 13.

Financial Instruments and Concentrations of Credit Risk

The following methods and assumptions were used to estimate the fair value of each class of financial instrument:

Cash and cash equivalents, short-term investments, accounts receivable and payable: The carrying amounts approximate fair value because of the short maturities of these instruments.

Short-term debt and other liabilities: The carrying amounts of short-term debt and other liabilities approximate fair value because of the short maturities of these instruments.

Long-term debt: The fair value of the long-term debt of the Company is estimated based on the quoted market prices for that debt or similar debt and approximates the carrying amount.

Forward exchange contracts: The fair value of forward exchange contracts (used for hedging purposes) is based on information derived from active markets. If appropriate, the Company would enter into forward exchange contracts to mitigate the impact of foreign exchange rate movements on the Company's operating results. It does not engage in speculation. Such foreign exchange contracts would offset losses and gains on the assets, liabilities and transactions being hedged.

Credit risk: The Company provides credit to customers in the ordinary course of business. The Company’s customer base is diverse and includes customers located throughout the world. Credit risk results from the possibility that a loss may occur from the failure of another party to perform according to the terms of the contracts. The Company regularly monitors its credit risk exposures and takes steps to mitigate the likelihood of these exposures resulting in actual loss. The Company's extension of credit is based on an evaluation of the customer's financial condition and collateral is generally not required.

The Company's bad debt expense for the years ended December 31, 2016, 2015 and 2014 was $6.2 million, $2.6 million and $2.4 million, respectively.

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MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 14.

Long-Term Debt and Commitments

The following is a summary of long term debt:

	December 31,
	2016		2015
	(millions of dollars)
Term Loan Facility, due May 9, 2021, net of unamortized discount and deferred financing costs of $26.4 million and $30.9 million as of December 31, 2016 and December 31, 2015, respectively.	$	1,061.7	$	1,246.4
Japan Loan Facilities		5.8		-
China Loan Facilities		9.2		12.0
Total	$	1,076.7	$	1,258.4
Less: Current maturities		6.8		3.1
Long-term debt	$	1,069.9	$	1,255.3

On May 9, 2014, in connection with the acquisition of AMCOL International Corporation (“AMCOL”), the Company entered into a credit agreement providing for a $1,560 million senior secured term loan facility (the “Term Facility”) and a $200 million senior secured revolving credit facility (the “Revolving Facility” and, together with the Term Facility, the “Facilities”).

On June 23, 2015, the Company entered into an amendment (the “First Amendment”) to the credit agreement to reprice the $1.378 billion then outstanding on the Term Facility. As amended by the First Amendment, the Term Facility had a $1.078 billion floating rate tranche and a $300 million fixed rate tranche. On February 14, 2017, the Company entered into an amendment (the “Second Amendment”) to the credit agreement to reprice the $788 million floating rate tranche then outstanding. See Note 24. The maturity date for loans under the Term Facility was not changed by the First Amendment. As amended by the First Amendment, the loans outstanding under the Term Facility matured on May 9, 2021 and the loans outstanding (if any) and commitments under the Revolving Facility will mature and terminate, as the case may be, on May 9, 2019. After the First Amendment and until the Second Amendment, loans under the variable rate tranche of the Term Facility bore interest at a rate equal to an adjusted LIBOR rate (subject to a floor of 0.75%) plus an applicable margin equal to 3.00% per annum. Loans under the fixed rate tranche of the Term Facility bear interest at a rate of 4.75%. Loans under the Revolving Facility will bear interest at a rate equal to an adjusted LIBOR rate plus an applicable margin equal to 1.75% per annum. Such rates are subject to decrease by up to 25 basis points in the event that, and for so long as, the Company’s net leverage ratio (as defined in the credit agreement) is less than certain thresholds. The variable rate tranche of the Term Facility was issued at par and had a 1% required amortization per year under the First Amendment. The obligations of the Company under the Facilities are unconditionally guaranteed jointly and severally by, subject to certain exceptions, all material domestic subsidiaries of the Company (the “Guarantors”) and secured, subject to certain exceptions, by a security interest in substantially all of the assets of the Company and the Guarantors.

The credit agreement contains certain customary affirmative and negative covenants that limit or restrict the ability of the Company and its restricted subsidiaries to enter into certain transactions or take certain actions. In addition, the credit agreement contains a financial covenant that requires the Company, if on the last day of any fiscal quarter loans or letters of credit were outstanding under the Revolving Facility (excluding up to $15 million of letters of credit), to maintain a maximum net leverage ratio (as defined in the credit agreement) of, initially, 5.25 to 1.00 for the four fiscal quarter period preceding such day. Such maximum net leverage ratio requirement is subject to decrease during the duration of the facility to a minimum level (when applicable) of 3.50 to 1.00. As of December 31, 2016, there were no loans and $12.2 million in letters of credit outstanding under the Revolving Facility. The Company is in compliance with all the covenants associated with the Revolving Facility as of the end of the period covered by this report.

During 2016, the Company repaid $190 million on its Term Facility.

The Company has five committed loan facilities for the funding of new manufacturing facilities in China, for a combined 94.8 million RMB and $1.8 million. In December 2016, the Company entered into a committed loan facility in Japan in the amount of 680 million Yen (approximately $5.8 million). As of December 31, 2016, on a combined basis, $15.0 million was outstanding. Principal will be repaid in accordance with the payment schedules ending in 2021. The Company repaid $3.2 million on these loans in 2016.

As of December 31, 2016, the Company had $34.8 million in uncommitted short-term bank credit lines, of which approximately $6.1 million was in use.

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MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Short-term borrowings as of December 31, 2016 and 2015 were $6.1 million and $6.5 million, respectively. The weighted average interest rate on short-term borrowings outstanding as of December 31, 2016 and December 31, 2015 was 3.7% and 3.4%, respectively.

The aggregate maturities of long-term debt are as follows: $6.8 million in 2017; $3.6 million in 2018; $0.6 million in 2019, $0.6 million in 2020; $1,091.5 million in 2021 and $0.0 million thereafter.

During 2016, 2015 and 2014, respectively, the Company incurred interest costs of $56.5 million, $62.6 million and $44.6 million, including $0.1 million, $0.5 million and $0.6 million, respectively, which were capitalized. Interest paid approximated the incurred interest cost.

Note 15.

Benefit Plans

Pension Plans and Other Postretirement Benefit Plans

The Company and its subsidiaries have pension plans covering the majority of eligible employees on a contributory or non-contributory basis. Benefits under defined benefit plans are generally based on years of service and an employee's career earnings. Employees generally become fully vested after five years.

The Company also provides postretirement health care and life insurance benefits for the majority of its U.S. retired employees. Employees are generally eligible for benefits upon retirement and completion of a specified number of years of creditable service. The Company does not pre-fund these benefits and has the right to modify or terminate the plan in the future.

In May 2014, as a part of its acquisition of AMCOL businesses, the Company assumed AMCOL’s qualified defined benefit pension plan, supplementary pension plan (SERP) and defined contribution plan. The defined benefit pension plan covers substantially all of AMCOL’s domestic employees hired before January 1, 2004. The SERP plan provides benefit in excess of qualified plan limitation for certain employees. AMCOL’s domestic employees hired on or after January 1, 2004 participate in AMCOL’s defined contribution plan whereby the Company will make a retirement contribution into the employee’s savings plan equal to 3% of their compensation. For more information on the AMCOL acquisition, see Note 2.

The Company’s disclosures for the U.S. plans have been combined with those outside of the U.S. as the international plans do not have significantly different assumptions, and together represent less than 25% of our total benefit obligation.

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MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table set forth Company's pension obligation and funded status at December 31:

	Pension Benefits						Post-Retirement Benefits
	2016			2015			2016			2015
	(millions of dollars)
Change in benefit obligations:
Beginning projected benefit obligation	$	416.6		$	433.8		$	9.3		$	10.1
Service cost		8.2			10.3			0.3			0.4
Interest cost		13.0			15.4			0.3			0.3
Actuarial (gain)/loss		21.2			(17.0	)		(0.6	)		(0.9	)
Benefits paid		(18.3	)		(19.5	)		-			(0.4	)
Settlements		(0.9	)
Acquisition
Foreign exchange impact		(11.4	)		(7.0	)		-			(0.2	)
Other		(0.5	)		0.6
Ending projected benefit obligation		427.9			416.6			9.3			9.3

Change in plan assets:
Beginning fair value		282.5			295.8			-			-
Actual return on plan assets		22.9			1.2			-			-
Employer contributions		10.5			10.0			-			0.4
Plan participants' contributions		0.4			0.5			-			-
Benefits paid		(18.3	)		(19.5	)		-			(0.4	)
Settlements		(0.5	)		-			-			-
Acquisition		-			-			-			-
Foreign exchange impact		(8.2	)		(5.5	)		-			-
Ending fair value		289.3			282.5			-			-

Funded status of the plan	$	(138.6	)	$	(134.1	)	$	(9.3	)	$	(9.3	)

Amounts recognized in the consolidated balance sheet consist of:

	Pension Benefits						Post-Retirement Benefits
	2016			2015			2016			2015
	(millions of dollars)

Current liability	$	(0.8	)	$	(0.9	)	$	(0.6	)	$	(0.7	)
Non-current liability		(137.8	)		(133.2	)		(8.7	)		(8.6	)
Recognized liability	$	(138.6	)	$	(134.1	)	$	(9.3	)	$	(9.3	)

The current portion of pension liabilities is included in accrued compensation and related items.

Amounts recognized in accumulated other comprehensive income, net of related tax effects, consist of:

	Pension Benefits					Post-Retirement Benefits
	2016			2015		2016			2015
	(millions of dollars)

Net actuarial (gain) loss	$	82.1		$	80.3	$	(1.7	)	$	(1.5	)
Prior service cost		(0.1	)		0.2		(2.4	)		(4.3	)
Amount recognized end of year	$	82.0		$	80.5	$	(4.1	)	$	(5.8	)

The accumulated benefit obligation for all defined benefit pension plans was $394.5 million and $382.6 million at December 31, 2016 and 2015, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Changes in the Plan assets and benefit obligations recognized in other comprehensive income:

	Pension Benefits					Post-Retirement Benefits
	2016			2015		2016			2015
	(millions of dollars)

Current year actuarial gain (loss)	$	(8.7	)	$	0.5	$	0.3		$	0.6
Amortization of actuarial (gain) loss		6.8			7.7		(0.1	)		(0.1	)
Amortization of prior service credit (gain) loss		0.4			0.5		(1.9	)		(1.9	)
Total recognized in other comprehensive income	$	(1.5	)	$	8.7	$	(1.7	)	$	(1.4	)

The components of net periodic benefit costs are as follows:

	Pension Benefits									Post-Retirement Benefits
	2016			2015			2014			2016			2015			2014
	(millions of dollars)

Service cost	$	8.2		$	10.3		$	8.9		$	0.3		$	0.4		$	0.4
Interest cost		13.0			15.4			14.9			0.3			0.3			0.4
Expected return on plan assets		(18.6	)		(19.7	)		(19.4	)		-			-			-
Amortization of prior service cost		0.6			0.8			1.0			(3.1	)		(3.1	)		(3.1	)
Recognized net actuarial (gain) loss		10.7			12.1			7.4			(0.2	)		(0.1	)		(0.2	)
Settlement/curtailment loss		0.3			-			-			-			-			-
Net periodic benefit cost	$	14.2		$	18.9		$	12.8		$	(2.7	)	$	(2.5	)	$	(2.5	)

Unrecognized prior service cost is amortized over the average remaining service period of each active employee.

The Company's funding policy for U.S. plans generally is to contribute annually into trust funds at a rate that provides for future plan benefits and maintains appropriate funded percentages. Annual contributions to the U.S. qualified plans are at least sufficient to satisfy regulatory funding standards and are not more than the maximum amount deductible for income tax purposes. The funding policies for the international plans conform to local governmental and tax requirements. The plans' assets are invested primarily in stocks and bonds.

The 2017 estimated amortization of amounts in other accumulated comprehensive income are as follows:

	Pension Benefits		Post-Retirement Benefits
	(millions of dollars)

Amortization of prior service credit (gain) loss	$	0.1	$	(3.1	)
Amortization of net (gain) loss		10.6		(0.3	)
Total cost to be recognized	$	10.7	$	(3.4	)

Additional Information

The weighted average assumptions used to determine net periodic benefit cost in the accounting for the pension benefit plans and other benefit plans for the years ended December 31, 2016, 2015 and 2014 are as follows:

	2016			2015			2014

Discount rate		3.88	%		3.71	%		4.39	%
Expected return on plan assets		6.89	%		6.89	%		7.34	%
Rate of compensation increase		3.03	%		3.04	%		3.08	%

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MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The weighted average assumptions used to determine benefit obligations for the pension benefit plans and other benefit plans at December 31, 2016, 2015 and 2014 are as follows:

	2016			2015			2014

Discount rate		3.60	%		3.89	%		3.66	%
Rate of compensation increase		2.96	%		3.04	%		3.05	%

For 2016, 2015 and 2014, the discount rate was based on a Citigroup yield curve of high quality corporate bonds with cash flows matching our plans' expected benefit payments. The expected return on plan assets is based on our asset allocation mix and our historical return, taking into account current and expected market conditions. The actual return on pension assets was approximately 8% in 2016, 1% in 2015 and 7% in 2014.

The Company maintains a self-funded health insurance plan for its retirees. This plan provided that the maximum health care cost trend rate would be 5%. Effective June 2010, the Company amended its plan to change the eligibility requirement for retirees and revised its plan so that increases in expected health care costs would be borne by the retiree.

Plan Assets

The Company's pension plan weighted average asset allocation percentages at December 31, 2016 and 2015 by asset category are as follows:

Asset Category	2016			2015

Equity securities		60.2	%		58.9	%
Fixed income securities		32.7	%		34.7	%
Real estate		0.7	%		0.9	%
Other		6.4	%		5.5	%
Total		100.0	%		100.0	%

The Company's pension plan fair values at December 31, 2016 and 2015 by asset category are as follows:

Asset Category	2016		2015
	(millions of dollars)
Equity securities	$	174.1	$	166.4
Fixed income securities		94.7		98.0
Real estate		1.9		2.5
Other		18.6		15.6
Total		289.3		282.5

The following table presents domestic and foreign pension plan assets information at December 31, 2016, 2015 and 2014 (the measurement date of pension plan assets):

	U.S. Plans						International Plans
	2016		2015		2014		2016		2015		2014
	(millions of dollars)

Fair value of plan assets	$	221.9	$	213.0	$	224.1	$	67.4	$	69.5	$	71.7

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MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes our defined benefit pension plan assets measured at fair value as of December 31, 2016:

Pension Assets Fair Value as of December 31, 2016	Quoted Prices In Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs		Total
Pension Assets Fair Value as of December 31, 2016	(Level 1)		(Level 2)		(Level 3)
	(millions of dollars)

Equity securities
US equities	$	155.0	$	0.2	$	-	$	155.2
Non-US equities		18.9		-		-		18.9

Fixed income securities
Corporate debt instruments		63.4		31.3		-		94.7

Real estate and other
Real estate		-		-		1.9		1.9
Other		-		0.2		18.4		18.6

Total assets	$	237.3	$	31.7	$	20.3	$	289.3

The following table summarizes our defined benefit pension plan assets measured at fair value as of December 31, 2015:

Pension Assets Fair Value as of December 31, 2015	Quoted Prices In Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs		Total
Pension Assets Fair Value as of December 31, 2015	(Level 1)		(Level 2)		(Level 3)
	(millions of dollars)

Equity securities
US equities	$	143.7	$	0.2	$	-	$	143.9
Non-US equities		22.5		-		-		22.5

Fixed income securities
Corporate debt instruments		65.4		32.6		-		98.0

Real estate and other
Real estate		-		-		2.5		2.5
Other		-		0.2		15.4		15.6

Total assets		231.6		33.0		17.9		282.5

U.S. equities—This class included actively and passively managed common equity securities comprised primarily of large-capitalization stocks with value, core and growth strategies.

Non-U.S. equities—This class included actively managed common equity securities comprised primarily of international large-capitalization stocks.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Fixed income—This class included debt instruments issued by the US Treasury, and corporate debt instruments.

Real Estate and other— This class includes assets related to real estate and other assets such as insurance contracts.

Asset classified as Level 1 are valued using quoted prices on major stock exchange on which individual assets are traded. Our Level 2 assets are valued using net asset value. The net asset value is quoted on a private market that is not active; however, the unit price is based on the underlying investments that are traded on an active market. Our Level 3 assets are estimated at fair value based on the most recent financial information available for the underlying securities, which are not traded on active market, and represents significant unobservable input.

The following is a reconciliation of changes in fair value measurement of plan assets using significant unobservable inputs (Level 3):

	(millions of dollars)

Beginning balance at December 31, 2014	$	26.6
Purchases, sales, settlements		-
Actual return on plan assets still held at reporting date		(8.4	)
Foreign exchange impact		(0.3	)
Ending balance at December 31, 2015	$	17.9
Purchases, sales, settlements		-
Actual return on plan assets still held at reporting date		3.0
Foreign exchange impact		(0.6	)
Ending balance at December 31, 2016	$	20.3

There were no transfers in or out of Level 3 during the year ended December 31, 2016 and 2015

Contributions

The Company expects to contribute $12.2 million to its pension plans and $0.6 million to its other post-retirement benefit plan in 2017.

Estimated Future Benefit Payments

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid:

	Pension Benefits		Other Benefits
	(millions of dollars)

2017	$	20.2	$	0.6
2018	$	21.2	$	0.7
2019	$	22.4	$	0.7
2020	$	23.0	$	0.7
2021	$	23.2	$	0.8
2022-2026	$	123.8	$	4.0

Investment Strategies

The investment strategy for pension plan assets is to maintain a broadly diversified portfolio designed to both preserve and grow plan assets to meet future plan obligations. The Company's average rate of return on assets from inception through December 31, 2016 was over 9%. The Company’s assets are strategically allocated among equity, debt and other investments to achieve a diversification level that dampens fluctuations in investment returns. The Company’s long-term investment strategy is an investment portfolio mix of approximately 55%-65% in equity securities, 30%-35% in fixed income securities and 0%-15% in other securities.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Savings and Investment Plans

The Company maintains a voluntary Savings and Investment Plan (a 401(k) plan) for most non-union employees in the U.S. On January 1, 2015, as a result of the acquisition and subsequent integration of AMCOL, the AMCOL 401(k) plan was merged into the Minerals Technologies Inc. Savings and Investment Plan. Within prescribed limits, the Company bases its contribution to the Savings and Investment Plan on employee contributions. The Company's contributions amounted to $5.1 million, $6.3 million and $2.9 million for the years ended December 31, 2016, 2015 and 2014, respectively. The Company also contributed $2.6 million to the AMCOL 401(k) plan in 2014.

Note 16.

Leases

The Company has several non-cancelable operating leases, primarily for office space and equipment. Rent expense amounted to approximately $16.2 million, $19.5 million and $19.8 million for the years ended December 31, 2016, 2015 and 2014, respectively. Total future minimum rental commitments under all non-cancelable leases for each of the years 2017 through 2021 and in aggregate thereafter are approximately $14.4 million, $12.1 million, $9.9 million, $8.2 million, $6.6 million, respectively, and $33.1 million thereafter. Total future minimum rentals to be received under non-cancelable subleases were approximately $4.2 million at December 31, 2016.

Total future minimum payments to be received under direct financing leases for each of the years 2017 through 2021 and the aggregate thereafter are approximately: $0.3 million, $0.3 million, $0.2 million, $0.1 million, $0.1 million and $-- million thereafter.

Note 17.

Litigation

We are party to a number of lawsuits arising in the normal course of our business.

On May 8, 2013, Armada (Singapore) PTE Limited, an ocean shipping company now in bankruptcy ("Armada") filed a case in federal court in the Northern District of Illinois against AMCOL and certain of its subsidiaries ( Armada (Singapore) PTE Limited v. AMCOL International Corp., et al., United States District Court for the Northern District of Illinois , Case No. 13 CV 3455). We acquired AMCOL and its subsidiaries on May 9, 2014. A co-defendant is Ashapura Minechem Limited, a company located in Mumbai, India (“AML”). During the relevant time period, 2008-2010, AMCOL owned slightly over 20% of the outstanding AML stock through December 2009, after which it owned approximately 19%. In 2008, AML entered into two contracts of affreightment (“COA”) with Armada for over 60 ship loads of bauxite from India to China. After one shipment, AML made no further shipments, which led Armada to file arbitrations in London against AML, one for each COA. AML did not appear in the London arbitrations and default awards of approximately $70 million were entered. The litigation filed by Armada against AMCOL and AML relates to these awards, which AML has not paid. The substance of the allegations by Armada is that AML and AMCOL engaged in illegal conduct to thwart Armada’s efforts to collect the arbitration award. The counts in the complaint include both violations of the Illinois Fraudulent Transfer laws, as well as federal RICO violations. The lawsuit seeks money damages, as well as injunctive relief. Fact discovery is scheduled to close in the first quarter of 2017. We have accrued an estimate of potential damages for the Armada lawsuit, the amount of which was not material to our financial position, results of operations or cash flows.

Certain of the Company's subsidiaries are among numerous defendants in a number of cases seeking damages for exposure to silica or to asbestos containing materials. The Company currently has three pending silica cases and 18 pending asbestos cases. To date, 1,492 silica cases and 48 asbestos cases have been dismissed, not including any lawsuits against AMCOL or American Colloid Company dismissed prior to our acquisition of AMCOL. Six new asbestos cases were filed in the period, including three new cases in the fourth quarter of 2016, and one additional case in the first quarter of 2017. No asbestos or silica cases were closed during the fourth quarter, however, as previously reported, twenty-seven silica cases and two asbestos cases were closed during 2016. Most of these claims do not provide adequate information to assess their merits, the likelihood that the Company will be found liable, or the magnitude of such liability, if any. Additional claims of this nature may be made against the Company or its subsidiaries. At this time management anticipates that the amount of the Company's liability, if any, and the cost of defending such claims, will not have a material effect on its financial position or results of operations.

The Company has settled only one silica lawsuit, for a nominal amount, and no asbestos lawsuits to date (not including any that may have been settled by AMCOL prior to completion of the acquisition). We are unable to state an amount or range of amounts claimed in any of the lawsuits because state court pleading practices do not require identifying the amount of the claimed damage. The aggregate cost to the Company for the legal defense of these cases since inception continues to be insignificant. The majority of the costs of defense for these cases, excluding cases against AMCOL or American Colloid, are reimbursed by Pfizer Inc. pursuant to the terms of certain agreements entered into in connection with the Company's initial public offering in 1992. Of the 18 pending asbestos cases all except two allege liability based on products sold largely or entirely prior to the initial public offering, and for which the Company is therefore entitled to indemnification pursuant to such agreements. The two exceptions pertain to a pending asbestos case against American Colloid Company, and one for which no period of alleged exposure has been stated by plaintiffs. Our experience has been that the Company is not liable to plaintiffs in any of these lawsuits and the Company does not expect to pay any settlements or jury verdicts in these lawsuits.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Environmental Matters

On April 9, 2003, the Connecticut Department of Environmental Protection issued an administrative consent order relating to our Canaan, Connecticut, plant where both our Refractories segment and Specialty Minerals segment have operations. We agreed to the order, which includes provisions requiring investigation and remediation of contamination associated with historic use of polychlorinated biphenyls ("PCBs") and mercury at a portion of the site. We have completed the required investigations and submitted several reports characterizing the contamination and assessing site-specific risks. We are awaiting regulators’ approval of the risk assessment report, which will form the basis for a proposal by the Company concerning eventual remediation.

We believe that the most likely form of overall site remediation will be to leave the existing contamination in place (with some limited soil removal), encapsulate it, and monitor the effectiveness of the encapsulation. We anticipate that a substantial portion of the remediation cost will be borne by the United States based on its involvement at the site from 1942 – 1964, as historic documentation indicates that PCBs and mercury were first used at the facility at a time of U.S. government ownership for production of materials needed by the military. Pursuant to a Consent Decree entered on October 24, 2014, the United States paid the Company $2.3 million in the 4^th quarter of 2014 to resolve the Company’s claim for response costs for investigation and initial remediation activities at this facility through October 24, 2014. Contribution by the United States to any future costs of investigation or additional remediation has, by agreement, been left unresolved. Though the cost of the likely remediation remains uncertain pending completion of the phased remediation decision process, we have estimated that the Company’s share of the cost of the encapsulation and limited soil removal described above would approximate $0.4 million, which has been accrued as of December 31, 2016.

The Company is evaluating options for upgrading the wastewater treatment facilities at its Adams, Massachusetts plant. This work has been undertaken pursuant to an administrative Consent Order originally issued by the Massachusetts Department of Environmental Protection (“DEP”) on June 18, 2002. This order was amended on June 1, 2009 and on June 2, 2010. The amended Order includes the investigation by January 1, 2022 of options for ensuring that the facility's wastewater treatment ponds will not result in unpermitted discharge to groundwater. Additional requirements of the amendment include the submittal by July 1, 2022 of a plan for closure of a historic lime solids disposal area. Preliminary engineering reviews completed in 2005 indicate that the estimated cost of wastewater treatment upgrades to operate this facility beyond 2024 may be between $6 million and $8 million. The Company estimates that the remaining remediation costs would approximate $0.4 million, which has been accrued as of December 31, 2016.

The Company and its subsidiaries are not party to any other material pending legal proceedings, other than routine litigation incidental to their businesses.

Note 18.

Stockholders' Equity

Capital Stock

The Company's authorized capital stock consists of 100 million shares of common stock, par value $0.10 per share, of which 34,969,987 shares and 34,784,395 shares were outstanding at December 31, 2016 and 2015, respectively, and 1,000,000 shares of preferred stock, none of which were issued and outstanding.

Cash Dividends

Cash dividends of $7.0 million or $0.20 per common share were paid during 2016. In January 2017, a cash dividend of approximately $1.7 million or $0.05 per share, was declared, payable in the first quarter of 2017.

Stock Award and Incentive Plan

At the Company’s 2015 Annual Meeting of Stockholders, the Company’s stockholders ratified the adoption of the Company’s 2015 Stock Award and Incentive Plan (the “2015 Plan”), which provides for grants of incentive and non-qualified stock options, restricted stock, stock appreciation rights, stock awards or performance unit awards. The 2015 Plan is substantially similar to the Company’s 2001 Stock Award and Incentive Plan (as amended and restated as of March 18, 2009, the “2001 Plan” and collectively with the 2015 Plan, the “Plans”). The Company established the 2015 Plan to increase the total number of shares of common stock reserved and available for issuance by 880,000 shares from the number of shares remaining under the 2001 Plan. With the ratification of the 2015 Plan by the Company’s stockholders, the 2001 Plan was discontinued as to new grants (however, all awards previously granted under the 2001 Plan remained unchanged). The Plans are administered by the Compensation Committee of the Board of Directors. Stock options granted under the Plan have a term not in excess of ten years. The exercise price for stock options will not be less than the fair market value of the common stock on the date of the grant, and each award of stock options will vest ratably over a specified period, generally three years.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes stock option and restricted stock activity for the Plans:

				Stock Options					Restricted Shares
	Shares Available for Grant			Shares			Weighted Average Exercise Price Per Share ($)		Shares			Weighted Average Exercise Price Per Share ($)

Balance January 1, 2014		1,190,964			1,131,415		$	32.42		185,572		$	37.65
Granted		(279,643	)		173,068			58.25		106,575			59.16
Exercised/vested		-			(323,636	)		30.57		(61,621	)		36.51
Canceled		84,806			(29,768	)		41.88		(55,038	)		38.73
Balance December 31, 2014		996,127			951,079			37.46		175,488			50.56
Authorized		880,000			-			-		-			-
Granted		(455,275	)		238,773			60.40		216,502			60.32
Exercised/vested		-			(74,839	)		33.12		(59,801	)		47.51
Canceled		71,113			(23,169	)		60.22		(47,944	)		51.43
Balance December 31, 2015		1,491,965			1,091,844			42.29		284,245			58.63
Authorized		-			-			-		-			-
Granted		(538,787	)		383,622			38.59		155,165			38.37
Exercised/vested		-			(150,944	)		36.66		(88,746	)		57.38
Canceled		249,248			(125,797	)		43.78		(123,451	)		50.72
Balance December 31, 2016		1,202,426			1,198,725			41.66		227,213			49.57

Note 19.

Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income (loss) at December 31 comprised of the following components:

	2016			2015
	(millions of dollars)
Cumulative foreign currency translation	$	(147.3	)	$	(108.7	)
Unrecognized pension costs (net of tax benefit of $39.4 in 2016 and $38.7 in 2015)		(78.0	)		(74.8	)
Unrealized gain (loss) on cash flow hedges (net of tax expense of $1.8 in 2016 and $1.0 in 2015)		4.2			2.6
	$	(221.1	)	$	(180.9	)

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MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes the changes in other comprehensive income (loss) by component:

	Year Ended December 31,
	2016									2015
	Pre-Tax Amount			Tax (Expense) Benefit			Net-of- Tax Amount			Pre-Tax Amount			Tax (Expense) Benefit			Net-of- Tax Amount
	(millions of dollars)
Foreign currency translation adjustment		(40.2	)		-		$	(40.2	)		(76.6	)		-		$	(76.6	)

Pension plans:
Net actuarial gains (losses) and prior service costs arising during the period		(12.5	)		4.1			(8.4	)		0.5			0.5			1.0
Amortization of net actuarial (gains) losses and prior service costs		8.0			(2.8	)		5.2			9.6			(3.3	)		6.3

Unrealized gains (losses) on cash flow hedges		2.4			(0.8	)		1.6			-			-			-

Total other comprehensive income (loss)	$	(42.3	)	$	0.5		$	(41.8	)	$	(66.5	)	$	(2.8	)	$	(69.3	)

The pre-tax amortization amounts of pension plans in the table above are included within the components of net periodic pension benefit costs (see note 15) and the related tax amounts are included within provision for taxes on income line within Consolidated Statements of Income.

Note 20.

Accounting for Asset Retirement Obligations

The Company records asset retirement obligations in which the Company will be required to retire tangible long-lived assets. These are primarily related to its PCC satellite facilities and mining operations. The Company has also recorded the provisions related to conditional asset retirement obligations at its facilities. The Company has recorded asset retirement obligations at all of its facilities except where there are no contractual or legal obligations. The associated asset retirement costs are capitalized as part of the carrying amount of the long-lived asset.

The following is a reconciliation of asset retirement obligations as of December 31, 2016 and 2015:

	2016			2015
	(millions of dollars)
Asset retirement liability, beginning of period	$	21.4		$	23.0
Accretion expense		2.5			2.8
Reversals		-			(1.0	)
Payments		(1.6	)		(1.9	)
Foreign currency translation		(0.8	)		(1.5	)
Asset retirement liability, end of period	$	21.5		$	21.4

The Company mines various minerals using a surface mining process that requires the removal of overburden. In certain areas and under various governmental regulations, the Company is obligated to restore the land comprising each mining site to its original condition at the completion of the mining activity. This liability will be adjusted to reflect the passage of time, mining activities, and changes in estimated future cash outflows

The current portion of the liability of approximately $2.1 million is included in other current liabilities and the long-term portion of the liability of approximately $19.4 million is included in other non-current liabilities in the Consolidated Balance Sheet as of December 31, 2016.

Accretion expense is included in cost of goods sold in the Company's Consolidated Statements of Income.

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MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 21.

Non-Controlling Interests

In May 2014, the Company acquired the remaining 20% non-controlling interest in CETCO Lining Technologies India Pvt. Ltd. (“CETCO India”), a part of our Construction Technologies operations for $2.1 million. The following table sets forth the effects of this transaction on equity attributable to MTI shareholders:

	Year Ended December 31,
	2016		2015		2014
	(millions of dollars)
Net income attributable to MTI	$	133.4	$	107.9	$	92.4
Transfer from non-controlling interest:
Decrease in additional paid-in capital for purchase of the remaining non-controlling interest in CETCO India		-		-		(2.1	)

Change from net income attributable to MTI and transfers from non-controlling interest	$	133.4	$	107.9	$	90.3

Note 22.

Segment and Related Information

The Company determines its operating segments based on the discrete financial information that is regularly evaluated by its chief operating decision maker, our President and Chief Executive Officer, in deciding how to allocate resources and in assessing performance. The Company's operating segments are strategic business units that offer different products and serve different markets. They are managed separately and require different technology and marketing strategies.

The Company has 5 reportable segments: Specialty Minerals, Refractories, Performance Materials, Construction Technologies, and Energy Services.

- The Specialty Minerals segment produces and sells the synthetic mineral product precipitated calcium carbonate ("PCC") and processed mineral product quicklime ("lime"), and mines mineral ores then processes and sells natural mineral products, primarily limestone and talc.

- The Refractories segment produces and markets monolithic and shaped refractory materials and specialty products, services and application and measurement equipment, and calcium metal and metallurgical wire products.

- The Performance Materials segment is a leading supplier of bentonite and bentonite-related products. This segment also supplies chromite and leonardite and operates more than 25 mining or production facilities worldwide.

- The Construction Technologies segment provides products for non-residential construction, environmental and infrastructure projects worldwide. It serves customers engaged in a broad range of construction projects, including site remediation, concrete waterproofing for underground structures, liquid containment on projects ranging from landfills to flood control, and drilling applications including foundation, slurry wall, tunneling, water well, and horizontal drilling.

- The Energy Services segment provides services to improve the production, costs, compliance, and environmental impact of activities performed in oil and gas industry. This segment offers a range of services for off-shore filtration and well testing to the worldwide oil and gas industry.

The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The Company evaluates performance based on the operating income of the respective business units. The costs deducted to arrive at operating profit do not include several items, such as net interest or income tax expense. Depreciation expense related to corporate assets is allocated to the business segments and is included in their income from operations. However, such corporate depreciable assets are not included in the segment assets. Intersegment sales and transfers are not significant.

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MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Segment information for the years ended December 31, 2016, 2015 and 2014 was as follows:

	2016			2015			2014
	(millions of dollars)
Net Sales
Specialty Minerals	$	591.5		$	624.6		$	650.1
Refractories		274.5			295.9			359.7
Performance Materials		502.8			514.8			352.8
Construction Technologies		183.3			180.1			152.3
Energy Services		85.9			182.2			210.1
Total		1,638.0			1,797.6			1,725.0

Income from Operations
Specialty Minerals		102.7			100.8			95.8
Refractories		37.0			27.8			43.2
Performance Materials		97.5			95.9			41.0
Construction Technologies		23.6			22.5			(0.8	)
Energy Services		(25.9	)		(27.9	)		16.3
Total		234.9			219.1			195.5

Depreciation, Depletion and Amortization
Specialty Minerals		34.9			34.0			35.6
Refractories		6.9			7.5			10.8
Performance Materials		30.4			31.7			18.7
Construction Technologies		8.5			7.7			5.8
Energy Services		11.2			17.4			13.5
Total		91.9			98.3			84.4

Segment Assets
Specialty Minerals		491.7			505.3			494.4
Refractories		283.4			292.7			357.3
Performance Materials		1,606.4			1,626.0			1,584.4
Construction Technologies		335.7			339.4			447.7
Energy Services		104.7			154.7			228.9
Total		2,821.9			2,918.1			3,112.7

Capital Expenditures
Specialty Minerals		40.4			51.9			44.4
Refractories		5.9			11.1			11.7
Performance Materials		11.2			9.8			7.3
Construction Technologies		1.6			1.3			1.0
Energy Services		1.4			11.1			16.7
Total		60.5			85.2			81.1

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MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A reconciliation of the totals reported for the operating segments to the applicable line items in the consolidated financial statements is as follows:

	2016			2015			2014
	(millions of dollars)
Income from Operations before Provision for Taxes on Income
Income from operations for reportable segments	$	234.9		$	219.1		$	195.5
Acquisition related transaction and integration costs		(8.0	)		(11.8	)		(19.1	)
Unallocated corporate expenses		(6.0	)		(7.0	)		(7.6	)
Consolidated income from operations		220.9			200.3			168.8
Non-operating deductions, net		(50.6	)		(67.7	)		(45.8	)
Income from continuing operations before provision for taxes on income		170.3			132.6			123.0

Total Assets
Total segment assets		2,821.9			2,918.1			3,112.7
Corporate assets		41.5			61.9			44.8
Consolidated total assets		2,863.4			2,980.0			3,157.5

Capital Expenditures
Total segment capital expenditures		60.5			85.2			81.1
Corporate capital expenditures		1.9			0.8			0.7
Consolidated capital expenditures		62.4			86.0			81.8

Financial information relating to the Company's operations by geographic area was as follows:

	2016		2015		2014
	(millions of dollars)
Net Sales
United States	$	936.2	$	1,049.6	$	1,004.4

Canada/Latin America		82.6		86.3		90.2
Europe/Africa		338.8		382.1		407.7
Asia		280.4		279.6		222.7
Total International		701.8		748.0		720.6
Consolidated net sales		1,638.0		1,797.6		1,725.0

Long-Lived Assets
United States	$	1,794.5	$	1,829.3	$	1,865.2

Canada/Latin America		14.8		13.0		18.8
Europe/Africa		98.2		117.6		136.8
Asia		127.3		138.3		144.3
Total International		240.3		268.9		299.9
Consolidated long-lived assets		2,034.8		2,098.2		2,165.1

Net sales and long-lived assets are attributed to countries and geographic areas based on the location of the legal entity. No individual foreign country represents more than 10% of consolidated net sales or consolidated long-lived assets.

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MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company's sales by product category are as follows:

	2016		2015		2014
	(millions of dollars)
Paper PCC	$	387.9	$	423.3	$	454.5
Specialty PCC		64.3		64.8		66.1
Talc		55.7		55.9		55.5
Ground Calcium Carbonate		83.6		80.6		74.0
Refractory Products		219.0		230.7		273.9
Metallurgical Products		55.5		65.2		85.8
Metalcasting		258.0		266.4		181.4
Household, Personal Care and Specialty Products		171.2		172.7		108.0
Basic Minerals and Other Products		73.6		75.7		63.4
Environmental Products		78.9		69.7		70.7
Building Materials and Other Products		104.4		110.4		81.6
Energy Services		85.9		182.2		210.1
Total		1,638.0		1,797.6		1,725.0

Note 23.

Quarterly Financial Data (unaudited)

	2016 quarters
	First		Second		Third		Fourth
	(millions of dollars, except per share amounts)

Net sales by segment
Specialty Minerals segment	$	155.6	$	150.6	$	147.3	$	138.0
Refractories segment		69.2		73.9		63.4	$	68.0
Performance Materials segment		119.0		128.6		119.5	$	135.7
Construction Technologies segment		40.6		53.9		49.5	$	39.3
Energy Services segment		25.8		20.0		19.8	$	20.3
Net sales		410.2		427.0		399.5		401.3

Gross profit		112.7		121.1		115.2		111.4

Income from operations		57.6		39.5		67.3		56.5

Income from continuing operations		34.8		22.3		42.5		37.5

Net income attributable to Minerals Technologies Inc. (MTI)		33.9		21.2		41.6		36.7

Basic earnings per share attributable to MTI shareholders:
Income from continuing operations	$	0.97	$	0.61	$	1.19	$	1.05
Loss from discontinued operations		-		-		-		-
Net income	$	0.97	$	0.61	$	1.19	$	1.05

Diluted earnings per share attributable to MTI shareholders:
Income from continuing operations	$	0.97	$	0.60	$	1.18	$	1.04
Loss from discontinued operations		-		-		-		-
Net income	$	0.97	$	0.60	$	1.18	$	1.04

Market price range per share of common stock:
High	$	57.12	$	61.66	$	72.51	$	82.90
Low	$	37.03	$	52.53	$	56.00	$	66.10
Close	$	57.12	$	57.38	$	70.69	$	77.25

Dividends paid per common share	$	0.05	$	0.05	$	0.05	$	0.05

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MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

	2015 quarters
	First		Second		Third		Fourth
	(millions of dollars, except per share amounts)

Net sales by segment
Specialty Minerals segment	$	154.0	$	156.5	$	156.5	$	157.6
Refractories segment		73.9		76.4		77.4		68.2
Performance Materials segment		127.9		129.1		126.5		131.3
Construction Technologies segment		38.9		52.1		49.7		39.4
Energy Services segment		58.6		49.3		40.9		33.4
Net sales		453.3		463.4		451.0		429.9

Gross profit		116.6		126.2		118.9		109.3

Income from operations		59.9		52.8		49.9		37.7

Income from continuing operations		36.0		27.5		30.3		17.8
Income (loss) from discontinued operations
Net income attributable to MTI		35.1		26.6		29.2		17.0

Basic earnings per share attributable to MTI shareholders:
Income from continuing operations	$	1.01	$	0.77	$	0.84	$	0.49
Loss from discontinued operations		-		-		-		-
Net income	$	1.01	$	0.77	$	0.84	$	0.49

Diluted earnings per share attributable to MTI shareholders:
Income from continuing operations	$	1.01	$	0.76	$	0.83	$	0.48
Loss from discontinued operations		-		-		-		-
Net income	$	1.01	$	0.76	$	0.83	$	0.48

Market price range per share of common stock:
High	$	74.74	$	74.21	$	68.15	$	61.80
Low	$	59.00	$	66.49	$	46.69	$	45.35
Close	$	70.65	$	69.02	$	50.31	$	45.86

Dividends paid per common share	$	0.05	$	0.05	$	0.05	$	0.05

Note 24.

Subsequent Events

In February 2017, the Company entered into the Second Amendment to the credit agreement to reprice the $788 million floating rate tranche then outstanding. The Second Amendment extended the maturity for this tranche under the Term Facility February 14, 2024. After the Second Amendment, loans under the floating rate tranche of the Term Facility bear interest at a rate equal to an adjusted LIBOR rate (subject to a floor of 0.75%) plus an applicable margin equal to 2.25% per annum. The floating rate tranche of the Term Facility was issued at a 0.25% discount and has a 1% required amortization per year. The $300 million fixed rate tranche remains unchanged.

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Table of Contents

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders

Minerals Technologies Inc.:

We have audited the accompanying consolidated balance sheets of Minerals Technologies Inc. and subsidiary companies as of December 31, 2016 and 2015, and the related consolidated statements of income, comprehensive income, shareholders’ equity, and cash flows for each of the years in the three‑year period ended December 31, 2016. In connection with our audits of the consolidated financial statements, we also have audited the related financial statement schedule. These consolidated financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Minerals Technologies Inc. and subsidiary companies as of December 31, 2016 and 2015, and the results of their operations and their cash flows for each of the years in the three‑year period ended December 31, 2016, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Minerals Technologies Inc. and subsidiary companies’ internal control over financial reporting as of December 31, 2016, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated February 17, 2017 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

/s/ KPMG LLP

New York, New York

February 17, 2017

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Table of Contents

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders

Minerals Technologies, Inc.

We have audited Minerals Technologies Inc. and subsidiary companies' internal control over financial reporting as of December 31, 2016, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Minerals Technologies Inc. and subsidiary companies' management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, Minerals Technologies Inc. and subsidiary companies maintained, in all material respects, effective internal control over financial reporting as of December 31, 2016, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Minerals Technologies Inc. and subsidiary companies as of December 31, 2016 and 2015, and the related consolidated statements of income, comprehensive income, shareholder's equity, cash flows and related financial statement schedule for each of the years in the three-year period ended December 31, 2016, and our report dated February 17, 2017 expressed an unqualified opinion on those consolidated financial statements and financial statement schedule.

/s/ KPMG LLP

New York, New York

February 17, 2017

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Table of Contents

Management's Report On Internal Control Over Financial Reporting

Management of Minerals Technologies Inc. is responsible for the preparation, integrity and fair presentation of its published consolidated financial statements. The financial statements have been prepared in accordance with U.S. generally accepted accounting principles and, as such, include amounts based on judgments and estimates made by management. The Company also prepared the other information included in the annual report and is responsible for its accuracy and consistency with the consolidated financial statements.

Management is also responsible for establishing and maintaining effective internal control over financial reporting. The Company's internal control over financial reporting includes those policies and procedures that pertain to the Company's ability to record, process, summarize and report reliable financial data. The Company maintains a system of internal control over financial reporting, which is designed to provide reasonable assurance to the Company's management and board of directors regarding the preparation of reliable published financial statements and safeguarding of the Company's assets. The system includes a documented organizational structure and division of responsibility, established policies and procedures, including a code of conduct to foster a strong ethical climate, which are communicated throughout the Company, and the careful selection, training and development of our people.

The Board of Directors, acting through its Audit Committee, is responsible for the oversight of the Company's accounting policies, financial reporting and internal control. The Audit Committee of the Board of Directors is comprised entirely of outside directors who are independent of management. The Audit Committee is responsible for the appointment and compensation of the independent registered public accounting firm. It meets periodically with management, the independent registered public accounting firm and the internal auditors to ensure that they are carrying out their responsibilities. The Audit Committee is also responsible for performing an oversight role by reviewing and monitoring the financial, accounting and auditing procedures of the Company in addition to reviewing the Company's financial reports. The independent registered public accounting firm and the internal auditors have full and unlimited access to the Audit Committee, with or without management, to discuss the adequacy of internal control over financial reporting, and any other matters which they believe should be brought to the attention of the Audit Committee.

Management recognizes that there are inherent limitations in the effectiveness of any system of internal control over financial reporting, including the possibility of human error and the circumvention or overriding of internal control. Accordingly, even effective internal control over financial reporting can provide only reasonable assurance with respect to financial statement preparation and may not prevent or detect misstatements. Further, because of changes in conditions, the effectiveness of internal control over financial reporting may vary over time.

The Company assessed its internal control system as of December 31, 2016 in relation to criteria for effective internal control over financial reporting described in "Internal Control - Integrated Framework (2013)" issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on its assessment, the Company has determined that, as of December 31, 2016, its system of internal control over financial reporting was effective.

The consolidated financial statements have been audited by the independent registered public accounting firm, which was given unrestricted access to all financial records and related data, including minutes of all meetings of stockholders, the Board of Directors and committees of the Board. Reports of the independent registered public accounting firm, which includes the independent registered public accounting firm's attestation of the effectiveness of the Company's internal control over financial reporting are also presented within this document.

/s/	Douglas T. Dietrich Chief Executive Officer	/s/	Matthew E. Garth Senior Vice President, Finance and Treasury, Chief Financial Officer

/s/	Michael A. Cipolla Vice President, Corporate Controller and Chief Accounting Officer

February 17, 2017

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Table of Contents

MINERALS TECHNOLOGIES INC. & SUBSIDIARY COMPANIES

SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS

(millions of dollars)

Description	Balance at Beginning of Period		Additions Charged to Costs, Provisions and Expenses		Deductions (a)			Balance at End of Period
Year ended December 31, 2016
Valuation and qualifying accounts deducted from assets to which they apply:
Allowance for doubtful accounts	$	4.4		6.2		(2.7	)		7.9

Year ended December 31, 2015
Valuation and qualifying accounts deducted from assets to which they apply:
Allowance for doubtful accounts	$	3.6		2.6		(1.8	)		4.4

Year ended December 31, 2014
Valuation and qualifying accounts deducted from assets to which they apply:
Allowance for doubtful accounts	$	1.7	$	2.4		(0.5	)		3.6

(a)	Includes impact of translation of foreign currencies.

S-1

Delaware		25-1190717
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

622 Third Avenue 38^th Floor New York, New York (Address of principal executive office)		10017-6707 (Zip Code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each class		Name of each exchange on which registered
Common Stock, $.10 par value		New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:

Large Accelerated Filer ☒	Accelerated Filer ☐	Non- accelerated Filer ☐	Smaller Reporting Company ☐
(Do not check if smaller reporting company)

		Page
PART I
Item 1.	Business	3

Item 1A.	Risk Factors	13

Item 1B.	Unresolved Staff Comments	18

Item 2.	Properties	19

Item 3.	Legal Proceedings	24

Item 4.	Mine Safety Disclosures	25

PART II

Item 5.	Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	25

Item 6.	Selected Financial Data	28

Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	29

Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	43

Item 8.	Financial Statements and Supplementary Data	44

Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	44

Item 9A.	Controls and Procedures	44

Item 9B.	Other Information	45

PART III

Item 10.	Directors, Executive Officers and Corporate Governance	45

Item 11.	Executive Compensation	46

Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	46

Item 13.	Certain Relationships and Related Transactions, and Director Independence	46

Item 14.	Principal Accountant Fees and Services	47

PART IV

Item 15.	Exhibits and Financial Statement Schedules	48

Signatures		52

Location	Facility	Product Line	Segment
United States
Alabama, Sandy Ridge	Plant; Mine	Metalcasting, basic minerals and specialty products	Performance Materials
Arizona, Pima County	Plant; Mine¹	Limestone	Specialty Minerals
California, Lucerne Valley	Plant; Mine	Limestone	Specialty Minerals
Connecticut, Canaan	Plant; Mine	Limestone, Metallurgical Wire/Calcium	Specialty Minerals; Refractories
Georgia, Cartersville	Plant	Environmental products and other building materials products	Construction Technologies
Illinois, Hoffman Estates	Research laboratories; Administrative office²	All Company Products	All Segments
Indiana, Portage	Plant	Refractories/Shapes	Refractories
Louisiana, Baton Rouge	Plant	Monolithic Refractories	Refractories
Louisiana, Broussard	Research laboratories²	Filtration and well testing services	Energy Services
Houston, TX	Headquarter, Administrative Office²		Energy Services
Louisiana, New Iberia	Operations base²	Filtration and Well testing services	OilfieldSeg - Energy Services
Massachusetts, Adams	Plant; Mine	Limestone, Lime, PCC	Specialty Minerals
Montana, Dillon	Plant; Mine	Talc	Specialty Minerals
Nebraska, Scottsbluff	Transportation terminal		Performance Materials and Construction Technologies
New York, New York	Headquarters²	All Company Products	Headquarters
North Dakota, Gascoyne	Plant; Mine	Metalcasting, basic minerals and specialty products	Performance Materials
Ohio, Bryan	Plant	Monolithic Refractories	Refractories
Ohio, Dover	Plant	Monolithic Refractories/Shapes	Refractories
Pennsylvania, Bethlehem	Administrative Office; Research laboratories; Sales Offices	All Company Products	All Segments
Pennsylvania, Easton	Administrative Office; Research laboratories; Plant; Sales Offices	All Company Products	All Segments
Pennsylvania, Slippery Rock	Plant; Sales Offices	Monolithic Refractories/Shapes	Refractories
Texas, Bay City	Plant	Talc	Specialty Minerals
Wyoming, Colony	Plant; Mine	Metalcasting, pet litter, personal care, specialty and basic minerals products	MineralsSeg - Performance Materials
Wyoming, Lovell	Plant; Mine	Basic minerals, Specialty and pet care products; Environmental and building materials products	Performance Materials and Construction Technologies

Percentage of Net Sales	2016			2015			2014

Specialty Minerals		36	%		35	%		38	%
Refractories		17	%		16	%		21	%
Performance Materials		31	%		29	%		20	%
Construction Technologies		11	%		10	%		9	%
Energy Services		5	%		10	%		12	%
Total		100	%		100	%		100	%

Location	Principal Customer
United States
Alabama, Jackson	Boise Inc.
Alabama, Selma	International Paper Company
Arkansas, Ashdown	Domtar Inc.
Florida, Pensacola	Georgia-Pacific Corporation (Koch Industries)
Louisiana, Port Hudson	Georgia-Pacific Corporation (Koch Industries)
Maine, Jay	Verso Paper Holdings LLC
Michigan, Quinnesec	Verso Paper Holdings LLC
Minnesota, Cloquet	Sappi Ltd.
Minnesota, International Falls	Boise Inc.
New York, Ticonderoga	International Paper Company
Ohio, Chillicothe	P.H. Glatfelter Co.
South Carolina, Eastover	International Paper Company
Washington, Camas	Georgia-Pacific Corporation (Koch Industries)
Washington, Longview	North Pacific Paper Corporation
Washington, Wallula	Boise Inc.
Wisconsin, Kimberly	Appleton Coated
Wisconsin, Park Falls	Flambeau River Papers LLC
Wisconsin, Superior	New Page Corporation
Wisconsin, Wisconsin Rapids	New Page Corporation

Location	Principal Customer
International
Brazil, Guaiba	CMPC - Celulose Rio Grandense
Brazil, Jacarei	Munksjo Brasil Ind e Com de Papeis Especiais Ltda.
Brazil, Luiz Antonio	International Paper do Brasil Ltda.
Brazil, Mucuri	Suzano Papel e Celulose S. A.
Brazil, Suzano	Suzano Papel e Celulose S. A.
Canada, St. Jerome, Quebec	Les Entreprises Rolland Inc
Canada, Windsor, Quebec	Domtar Inc.
China, Dagang ¹	Gold East Paper (Jiangsu) Company Ltd.
China, Zhenjiang ¹	Gold East Paper (Jiangsu) Company Ltd.
China, Suzhou¹	Gold HuaSheng Paper Company Ltd.
China, Henan	Henan Jianghe Paper Co., Ltd.
China, Guangxi^{1, 2}	Nanning Jindaxing Paper Industry Company Ltd
China, Shandong²	Shandong Sun Paper Industry Joint Stock Company Ltd
Finland, Äänekoski	M-real Corporation
Finland, Tervakoski	Trierenberg Holding
France, Alizay	Double A Paper Company Ltd.
France, Saillat Sur Vienne	International Paper Company
Germany, Schongau	UPM Corporation
India, Ballarshah¹	Ballarpur Industries Ltd.
India, Dandeli	West Coast Paper Mill Ltd.
India, Gaganapur¹	Ballarpur Industries Ltd.
India, Saila Khurd	Kuantum Papers Ltd.
India, Rayagada¹	JK Paper
Indonesia, Perawang¹	PT Indah Kiat Pulp and Paper Corporation
Japan, Shiraoi¹	Nippon Paper Group Inc.
Malaysia, Sipitang	Ballarpur Industries Ltd.
Poland, Kwidzyn	International Paper – Kwidzyn, S.A
Portugal, Figueira da Foz¹	Navigator Paper Figueira, S.A.
Slovakia, Ruzomberok	Mondi Business Paper SCP
South Africa, Merebank¹	Mondi Paper Company Ltd.
Thailand, Namphong	Phoenix Pulp & Paper Public Co. Ltd.
Thailand, Tha Toom¹	Double A Paper Company Ltd.
Thailand, Tha Toom 2¹	Double A Paper Company Ltd.

	2016 Tons Usage (000s)		Total Tons of Reserves (000s)		Assigned Reserves (000s)			Unassigned Reserves** (000s)			Conversion Factor			Mining Claims
	2016 Tons Usage (000s)		Total Tons of Reserves (000s)		Assigned Reserves (000s)			Unassigned Reserves** (000s)			Conversion Factor			Owned			Unpatented *			Leased
Limestone
Adams, MA		630		24,388		24,388			-			80	%		24,388			-			-
Canaan, CT		594		18,910		18,910			-			90	%		18,910			-			-
Lucerne Valley, CA		938		42,729		42,729						95	%		42,729			-			-
Pima County, AZ		190		8,129		8,129			-			90	%		8,129			-			-
Total Limestone		2,352		94,156		94,156			-						94,156			-			-
						100	%		0	%					100	%		0	%		0	%
Talc
Dillon, MT		215		3,038		3,038			-			85	%		3,038			-			-
						100	%		0	%					100	%		0	%		0	%
Sodium Bentonite
Australia		21		1,259		1,259			-			80	%								1,259
Belle/Colony, WY/SD		1,306		67,027		67,027			-			77	%		3,894			11,952			51,181
Lovell, WY		561		38,258		38,258			-			86	%		17,468			14,371			6,419
Other SD, WY, MT				72,831		-			72,831			79	%		54,815			15,048			2,968
Total Sodium Bentonite		1,888		179,375		106,544			72,831						76,177			41,371			61,827
						59	%		41	%					42	%		23	%		34	%
Calcium Bentonite
Chao Yang, Liaoning, China		33		1,772		1,772			-			78	%								1,772
Nevada		1		1,561		1,561			-			76	%		1,017			44			500
Sandy Ridge, AL		111		6,763		6,763			-			75	%		1,995						4,768
Turkey		159		4,945		4,945			-			77	%								4,945
Total Calcium Bentonite		304		15,041		15,041			-						3,012			44			11,985
						100	%		0	%					20	%		0	%		80	%
Leonardite
Gascoyne, ND		28		2,707		2,707			-			72	%		-			2,019			688
						100	%		0	%								75	%		25	%
Chromite
South Africa		80		3,654		3,654			-			75	%		-			-			3,654
						100	%		0	%					0	%		0	%		100	%
Other
Nevada**		-		2,997		-			2,997			80	%					2,997			-
						0	%		100	%					0	%		100	%		0	%

GRAND TOTALS		4,867		300,968		225,140			75,828						176,383			46,431			78,154
						75	%		25	%					59	%		15	%		26	%

Plan Category	Number of securities to be issued upon exercise of outstanding options		Weighted average exercise price of outstanding options		Number of securities remaining available for future issuance

Equity compensation plans approved by security holders		1,198,725	$	41.66		1,202,426

Total		1,198,725	$	41.66		1,202,426

	12/11	12/12	12/13	12/14	12/15	12/16

Minerals Technologies Inc.	100.00	141.93	214.50	248.78	164.83	278.56
S&P 500	100.00	116.00	153.58	174.60	177.01	198.18
S&P Midcap 400	100.00	117.88	157.37	172.74	168.98	204.03
Dow Jones US Industrials	100.00	117.87	165.74	177.84	174.83	208.98
Dow Jones US Basic Materials	100.00	110.49	133.00	137.51	120.42	144.83
S&P MidCap 400 Materials Sector	100.00	119.17	153.63	160.87	138.20	185.77

	Payments Due by Period
	Total		2017		2018 - 2019		2020 - 2021		After 2021
	Total		2017		2018 - 2019		2020 - 2021		After 2021
	(millions of dollars)
Debt	$	1,103.1	$	6.8	$	4.2	$	1,092.1	$	-
Interest related to long term debt		194.5		44.4		88.0		62.1		-
Estimated pension and post retirement plan funding		27.2		12.2		15.0		-		-
Operating lease obligations		84.3		14.4		22.0		14.8		33.1
Other long term liabilities		21.5		2.1		-		-		19.4
Total contractual obligations	$	1,430.6	$	79.9	$	129.2	$	1,169.0	$	52.5

Effect on Expense
(millions of dollars)	Discount Rate			Salary Scale			Return on Asset

1% increase	$	(4.1	)	$	0.9		$	(2.0	)
1% decrease	$	6.2		$	(0.8	)	$	2.0

Effect on Projected Benefit Obligation
(millions of dollars)	Discount Rate			Salary Scale
1% increase	$	(42.3	)	$	5.0
1% decrease	$	52.3		$	(4.4	)

Name	Age	Position

Douglas T. Dietrich	47	Chief Executive Officer
Matthew E. Garth	42	Senior Vice President, Finance and Treasury, Chief Financial Officer
D.J. Monagle, III	54	Senior Vice President, Chief Operating Officer – Specialty Minerals Inc. and Minteq Group
Gary L. Castagna	55	Senior Vice President and Managing Director, Performance Materials
Jonathan J. Hastings	54	Senior Vice President, Corporate Development
Douglas W. Mayger	59	Senior Vice President and Director-MTI Supply Chain
Thomas J. Meek	59	Senior Vice President, General Counsel, Human Resources, Secretary and Chief Compliance Officer
W. Rand Mendez	57	Senior Vice President and Managing Director, Paper PCC
Brett Argirakis	52	Vice President and Managing Director, Minteq International Inc.
Michael A. Cipolla	59	Vice President, Corporate Controller and Chief Accounting Officer
Andrew Jones	58	Vice President and Managing Director, Energy Services

2.1	-	Agreement and Plan of Merger, dated as of March 10, 2014, by and among Minerals Technologies Inc., MA Acquisition Inc. and AMCOL International Corporation (1)
3.1	-	Restated Certificate of Incorporation of the Company (2)
3.2	-	By-Laws of the Company as amended and restated effective March 16, 2016 (3)
4.1	-	Specimen Certificate of Common Stock (2)
10.1	-	Asset Purchase Agreement, dated as of September 28, 1992, by and between Specialty Refractories Inc. and Quigley Company Inc. (4)
10.1(a)	-	Agreement dated October 22, 1992 between Specialty Refractories Inc. and Quigley Company Inc., amending Exhibit 10.1 (5)
10.1(b)	-	Letter Agreement dated October 29, 1992 between Specialty Refractories Inc. and Quigley Company Inc., amending Exhibit 10.1 (5)
10.2	-	Reorganization Agreement, dated as of September 28, 1992, by and between the Company and Pfizer Inc. (4)
10.3	-	Asset Contribution Agreement, dated as of September 28, 1992, by and between Pfizer Inc. and Specialty Minerals Inc. (4)
10.4	-	Asset Contribution Agreement, dated as of September 28, 1992, by and between Pfizer Inc. and Barretts Minerals Inc. (4)
10.4(a)	-	Agreement dated October 22, 1992 between Pfizer Inc, Barretts Minerals Inc. and Specialty Minerals Inc., amending Exhibits 10.3 and 10.4 (5)
10.5	-	Employment Agreement, dated December 13, 2016, between the Company and Douglas T. Dietrich (6) (+)
10.6	-	Form of Employment Agreement between the Company and each of Brett Argirakis, Michael A. Cipolla, Matthew E. Garth, Andrew Jones, Douglas W. Mayger, Thomas J. Meek, W. Rand Mendez and D.J. Monagle, III (*) (+)
10.6(a)	-	Form of Employment Agreement between the Company and Jonathan J. Hastings (7) (+)
10.6(b)	-	Form of amendment to Employment Agreement between the Company and Jonathan J. Hastings (8) (+)
10.6(c)	-	Form of Employment Agreement between the Company and Gary L. Castagna (9) (+)
10.7	-	Severance Agreement between the Company and Douglas T. Dietrich (10) (+)
10.8	-	Form of Severance Agreement between the Company and each of Brette Argirakis, Michael A. Cipolla, Matthew E. Garth, Andrew Jones, Douglas W. Mayger, Thomas J. Meek, W. Rand Mendez, and D.J. Monagle, III (*) (+)
10.8(a)	-	Form of Severance Agreement between the Company and Jonathan J. Hastings (11) (+)

10.8(b)	-	Form of amendment to Severance Agreement between the Company and Jonathan J. Hastings (12) (+)
10.8(c)		Form of Severance Agreement between the Company and Gary L. Castagna (13) (+)
10.9	-	Form of Indemnification Agreement between the Company and each of Michael A. Cipolla, Douglas T. Dietrich, Jonathan J. Hastings, Andrew Jones, Douglas W. Mayger, Thomas J. Meek, D.J. Monagle III and each of the Company’s non-employee directors (14) (+)
10.10	-	Company Employee Protection Plan, as amended August 27, 1999 (15) (+)
10.11	-	Company Nonfunded Deferred Compensation and Unit Award Plan for Non-Employee Directors, as amended and restated effective January 1, 2008 (16) (+)
10.11(a)	-	First Amendment to the Company Nonfunded Deferred Compensation and Unit Award Plan for Non-Employee Directors, dated January 18, 2012 (17) (+)
10.12	-	2015 Stock Award and Incentive Plan of the Company (18) (+)
10.13	-	Company Retirement Plan, as amended and restated, dated December 21, 2012 (19) (+)
10.13(a)	-	Second Amendment to Company Retirement Plan, as amended and restated, dated December 22, 2014 (20)(+)
10.13(b)	-	Third Amendment to Company Retirement Plan, as amended and restated, dated June 12, 2015 (21)(+)
10.13(c)	-	Fourth Amendment to Company Retirement Plan, as amended and restated, dated December 16, 2016 (*)(+)
10.14	-	Company Supplemental Retirement Plan, amended and restated effective December 31, 2009 (22) (+)
10.14(a)	-	First Amendment to Company Supplemental Retirement Plan, as amended and restated, dated December 22, 2014 (23)(+)
10.15	-	Company Savings and Investment Plan, as amended and restated, dated December 21, 2012 (24) (+)
10.15(a)	-	Amendment to the Company Savings and Investment Plan, as amended and restated, dated December 5, 2013 (25) (+)
10.15(b)	-	Amendment to the Company Savings and Investment Plan, as amended and restated, dated December 5, 2013 (26) (+)
10.15(c)	-	Third Amendment to the Company Savings and Investment Plan, as amended and restated, dated December 22, 2014 (27)(+)
10.15(d)	-	Amendment to the Company Savings and Investment Plan, as amended and restated, dated December 31, 2015 (28)(+)
10.16	-	Company Supplemental Savings Plan, amended and restated effective December 31, 2009 (29) (+)
10.16(a)	-	Amendment to the Company Supplemental Savings Plan, dated December 28, 2011 (30)(+)
10.16(b)	-	First Amendment to the Company Supplemental Savings Plan, dated December 22, 2014 (31)(+)
10.16(c)	-	Second Amendment to the Company Supplemental Savings Plan, dated December 22, 2014 (32)(+)
10.16(d)	-	Third Amendment to the Company Supplemental Savings Plan, dated December 16, 2016 (*)(+)
10.17	-	Company Health and Welfare Plan, effective as of April 1, 2003 and amended and restated as of January 1, 2006 (33)(+)
10.17(a)	-	Amendment to the Company Health and Welfare Plan, dated May 19, 2009 (34) (+)
10.17(b)	-	First Amendment to Company Health and Welfare Plan, dated December 22, 2014 (35)(+)
10.18	-	Company Retiree Medical Plan, effective as of January 1, 2011 (36)(+)
10.18(a)	-	First Amendment to Company Retiree Medical Plan, dated December 22, 2014 (37)(+)
10.19	-	Amended and Restated Grantor Trust Agreement, dated as of April 1, 2010, by and between the Company and the Wilmington Trust Company (38)(+)
10.20	-	AMCOL International Corporation Nonqualified Deferred Compensation Plan, as amended (39) (+)
10.20(a)	-	First Amendment to AMCOL International Corporation Nonqualified Deferred Compensation Plan, as amended, dated December 22, 2014 (40)(+)
10.20(b)	-	Third Amendment to the AMCOL International Corporation Nonqualified Deferred Compensation Plan, as amended, dated August 21, 2015 (41)(+)
10.21	-	AMCOL International Corporation Amended and Restated Supplementary Pension Plan for Employees (42) (+)
10.21(a)	-	First Amendment to AMCOL International Corporation Amended and Restated Supplementary Pension Plan for Employees, dated December 22, 2014 (43)(+)
10.21 (b)	-	Second Amendment to Amended and Restated Supplementary Pension Plan for Employees of AMCOL International Corporation, dated August 21, 2015 (44)(+)

10.22	-	Second Amendment, dated as of February 14, 2017, to the Credit Agreement, dated as of May 9, 2014, among Minerals Technologies Inc., the subsidiary borrowers party thereto, the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, and the other agents party thereto (45)

10.23	-	Indenture, dated July 22, 1963, between the Cork Harbour Commissioners and Roofchrome Limited (4)
21.1	-	Subsidiaries of the Company (*)
23.1	-	Consent of Independent Registered Public Accounting Firm (*)
24	-	Power of Attorney (*)
31.1	-	Rule 13a-14(a)/15d-14(a) Certification executed by the Company's principal executive officer (*)
31.2	-	Rule 13a-14(a)/15d-14(a) Certification executed by the Company's principal financial officer (*)
32	-	Section 1350 Certification (*)
95		Information Concerning Mine Safety Violations (*)

(1)		Incorporated by reference to exhibit 2.1 to the Company’s Current Report on Form 8-K filed March 10, 2014.
(2)		Incorporated by reference to the exhibit so designated filed with the Company's Annual Report on Form 10-K for the year ended December 31, 2003.
(3)		Incorporated by reference to the exhibit so designated filed with the Company's Current Report on Form 8-K filed on March 17, 2016.
(4)		Incorporated by reference to the exhibit so designated filed with the Company's Registration Statement on Form S-1 (Registration No. 33-51292), originally filed on August 25, 1992.
(5)		Incorporated by reference to the exhibit so designated filed with the Company's Registration Statement on Form S-1 (Registration No. 33-59510), originally filed on March 15, 1993.
(6)		Incorporated by reference to exhibit 10.1 filed with the Company's Current Report on Form 8-K filed on December 16, 2016.
(7)		Incorporated by reference to exhibit 10.5 filed with the Company's Annual Report on Form 10-K for the year ended December 31, 2006.
(8)		Incorporated by reference to exhibit 10.6(a) filed with the Company's Annual Report on Form 10-K for the year ended December 31, 2009.
(9)		Incorporated by reference to exhibit 10.6(b) filed with the Company's Annual Report on Form 10-K for the year ended December 31, 2014.
(10)		Incorporated by reference to the exhibit 10.2 filed with the Company’s Current Report on form 8-K filed on December 16, 2016.
(11)		Incorporated by reference to exhibit 10.6 filed with the Company's Annual Report on Form 10-K for the year ended December 31, 2005.
(12)		Incorporated by reference to exhibit 10.7(a) filed with the Company's Annual Report on Form 10-K for the year ended December 31, 2009.
(13)		Incorporated by reference to exhibit 10.7(b) filed with the Company's Annual Report on Form 10-K for the year ended December 31, 2014.
(14)		Incorporated by reference to exhibit 10.1 filed with the Company's Current Report on Form 8-K filed on May 8, 2009.
(15)		Incorporated by reference to exhibit 10.7 filed with the Company's Annual Report on Form 10-K for the year ended December 31, 2004.
(16)		Incorporated by reference to exhibit 10.8 filed with the Company's Quarterly Report on Form 10-Q for the quarter ended March 30, 2008.
(17)		Incorporated by reference to exhibit 10.11(a) filed with the Company’s Annual Report on Form 10-K for the year ended December 31, 2011.
(18)		Incorporated by reference to Appendix B to the Company’s 2015 Proxy Statement filed on April 2, 2015.
(19)		Incorporated by reference to exhibit 10.12 filed with the Company's Annual Report on Form 10-K for the year ended December 31, 2012.
(20)		Incorporated by reference to exhibit 10.13(a) filed with the Company's Annual Report on Form 10-K for the year ended December 31, 2014.
(21)		Incorporated by reference to exhibit 10.2 filed with the Company's Quarterly Report on Form 10-Q for the quarter ended June 28, 2015.
(22)		Incorporated by reference to exhibit 10.13 filed with the Company's Annual Report on Form 10-K for the year ended December 31, 2009.
(23)		Incorporated by reference to exhibit 10.14(a) filed with the Company's Annual Report on Form 10-K for the year ended December 31, 2014.
(24)		Incorporated by reference to exhibit 10.14 filed with the Company's Annual Report on Form 10-K for the year ended December 31, 2012.

(25)		Incorporated by reference to exhibit 10.15(a) filed with the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.
(26)		Incorporated by reference to exhibit 10.15(b) filed with the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.
(27)		Incorporated by reference to exhibit 10.15(c) filed with the Company's Annual Report on Form 10-K for the year ended December 31, 2014.
(28)		Incorporated by reference to exhibit 10.15(d) filed with the Company's Annual Report on Form 10-K for the year ended December 31, 2015.
(29)		Incorporated by reference to exhibit 10.15 filed with the Company's Annual Report on Form 10-K for the year ended December 31, 2009.
(30)		Incorporated by reference to exhibit 10.16(a) filed with the Company’s Annual Report on Form 10-K for the year ended December 31, 2011.
(31)		Incorporated by reference to exhibit 10.16(b) filed with the Company's Annual Report on Form 10-K for the year ended December 31, 2014.
(32)		Incorporated by reference to exhibit 10.16(c) filed with the Company's Annual Report on Form 10-K for the year ended December 31, 2014.
(33)		Incorporated by reference to exhibit 10.14 filed with the Company's Annual Report on Form 10-K for the year ended December 31, 2006.
(34)		Incorporated by reference to exhibit 10.16(a) filed with the Company's Annual Report on Form 10-K for the year ended December 31, 2009.
(35)		Incorporated by reference to exhibit 10.17(b) filed with the Company's Annual Report on Form 10-K for the year ended December 31, 2014.
(36)		Incorporated by reference to exhibit 10.17 filed with the Company's Annual Report on Form 10-K for the year ended December 31, 2010.
(37)		Incorporated by reference to exhibit 10.18(a) filed with the Company's Annual Report on Form 10-K for the year ended December 31, 2014.
(38)		Incorporated by reference to exhibit 10.1 filed with the Company's Quarterly Report on Form 10-Q for the period ended April 4, 2010.
(39)		Incorporated by reference to exhibit 10.1 filed with the Annual Report on Form 10-K for the year ended December 31, 2008 of AMCOL International Corporation (Commission File No. 0-15661)
(40)		Incorporated by reference to exhibit 10.20(a) filed with the Company's Annual Report on Form 10-K for the year ended December 31, 2014.
(41)		Incorporated by reference to exhibit 10.1 filed with the Company's Quarterly Report on Form 10-Q for the quarter ended September 27, 2015.
(42)		Incorporated by reference to the exhibit 10.6 filed with the Annual Report on Form 10-K for the year ended December 31, 2008 of AMCOL International Corporation (Commission File No. 0-15661)
(43)		Incorporated by reference to exhibit 10.21(a) filed with the Company's Annual Report on Form 10-K for the year ended December 31, 2014.
(44)		Incorporated by reference to exhibit 10.2 filed with the Company's Quarterly Report on Form 10-Q for the quarter ended September 27, 2015.
(45)		Incorporated by reference to the exhibit 10.1 filed with the Company's Current Report on Form 8-K filed on February 15, 2017.

(*)		Filed herewith.
(+)		Management contract or compensatory plan or arrangement required to be filed pursuant to Item 601 of Regulation S-K.

	By:	/s/ Douglas T. Dietrich
		Douglas T. Dietrich
		Chief Executive Officer

	SIGNATURE	TITLE	DATE

/s/	Douglas T. Dietrich	Chief Executive Officer	February 17, 2017
	Douglas T. Dietrich	(principal executive officer)

/s/	Matthew E. Garth	Senior Vice President-Finance and Treasury,	February 17, 2017
	Matthew E. Garth	Chief Financial Officer (principal financial officer)

/s/	Michael A. Cipolla	Vice President - Controller and	February 17, 2017
	Michael A. Cipolla	Chief Accounting Officer (principal accounting officer)

	*	Director	February 17, 2017
	Joseph C. Breunig

	*	Director	February 17, 2017
	John J. Carmola

	*	Director	February 17, 2017
	Robert L. Clark

/s/	Douglas T. Dietrich	Director	February 17, 2017
	Douglas T. Dietrich

	*	Chairman & Director	February 17, 2017
	Duane R. Dunham

	*	Director	February 17, 2017
	Marc E. Robinson

	*	Director	February 17, 2017
	Barbara R. Smith

	*	Director	February 17, 2017
	Donald C. Winter

* By: /s/ Thomas J. Meek
Thomas J. Meek
Attorney-in-Fact

Audited Financial Statements:		Page

	Consolidated Balance Sheets as of December 31, 2016 and 2015	F-2

	Consolidated Statements of Income for the years ended December 31, 2016, 2015 and 2014	F-3

	Consolidated Statements of Comprehensive Income for the years ended December 31, 2016, 2015 and 2014	F-4

	Consolidated Statements of Cash Flows for the years ended December 31, 2016, 2015 and 2014	F-5

	Consolidated Statements of Shareholders' Equity for the years ended December 31, 2016, 2015 and 2014	F-6

	Notes to Consolidated Financial Statements	F-7

Reports of Independent Registered Public Accounting Firm		F-40

Management's Report on Internal Control Over Financial Reporting		F-42

Valuation and Qualifying Accounts		S-1

	Equity Attributable to MTI
	Common Stock		Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock			Non-controlling Interests			Total
	(millions of dollars)
Balance as of December 31, 2013	$	4.7	$	361.5		$	1,106.3		$	(31.3	)	$	(593.7	)	$	$ 26.9		$	874.4

Net income		-		-			92.4			-			-			3.1			95.5
Other comprehensive income (loss)		-		-			-			(81.6	)		-			(1.0	)		(82.6	)
Dividends declared		-		-			(6.9	)		-			-			-			(6.9	)
Dividends to non-controlling interest		-		-			-			-			-			(3.3	)		(3.3	)
Purchase of non-controlling interest shares		-		(2.1	)		-			-			-						(2.1	)
Acquisition of AMCOL		-		-			-			-			-			0.2			0.2
Issuance of shares pursuant to employee stock compensation plans		0.1		3.3			-			-			-			-			3.4
Income tax benefit arising from employee stock compensation plans		-		4.4			-			-			-			-			4.4
Stock based compensation		-		5.9			-			-			-			-			5.9
Balance as of December 31, 2014	$	4.8	$	373.0		$	1,191.8		$	(112.9	)	$	(593.7	)	$	25.9		$	888.9

Net income		-		-			107.9			-			-			3.7			111.6
Other comprehensive income (loss)		-		-			-			(68.0	)		-			(1.3	)		(69.3	)
Dividends declared		-		-			(7.0	)		-			-			-			(7.0	)
Dividends to non-controlling interest		-		-			-			-			-			(1.1	)		(1.1	)
Issuance of shares pursuant to employee stock compensation plans		-		2.4			-			-			-			-			2.4
Income tax benefit arising from employee stock compensation plans		-		1.0			-			-			-			-			1.0
Stock based compensation		-		11.2			-			-			-			-			11.2
Balance as of December 31, 2015	$	4.8	$	387.6		$	1,292.7		$	(180.9	)	$	(593.7	)	$	27.2		$	937.7

Net income		-		-			133.4			-			-			3.7			137.1
Other comprehensive income (loss)		-		-			-			(40.2	)		-			(1.6	)		(41.8	)
Dividends declared		-		-			(7.0	)		-			-			-			(7.0	)
Dividends to non-controlling interest		-		-			-			-			-			(4.9	)		(4.9	)
Issuance of shares pursuant to employee stock compensation plans		-		5.5			-			-			-			-			5.5
Income tax benefit arising from employee stock compensation plans		-		0.6			-			-			-			-			0.6
Purchase of common stock for treasury		-		-			-			-			(2.6	)		-			(2.6	)
Stock based compensation		-		6.3			-			-			-			-			6.3
Balance as of December 31, 2016	$	4.8	$	400.0		$	1,419.1		$	(221.1	)	$	(596.3	)	$	24.4		$	1,030.9