Edgar Filing: MINERALS TECHNOLOGIES INC

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2012

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 1-11430

MINERALS TECHNOLOGIES INC.
(Exact name of registrant as specified in its charter)

DELAWARE	25-1190717
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

622 Third Avenue, New York, NY 10017-6707
(Address of principal executive offices, including zip code)

(212) 878-1800
(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.

YES _X_

NO ____

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

YES _X_

NO _

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer [X]

Accelerated Filer [ ]

Non- accelerated Filer [ ]

Smaller Reporting Company [ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES __

NO X

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Class
Common Stock, $0.10 par value

Outstanding at October 16, 2012
17,690,876

MINERALS TECHNOLOGIES INC.

INDEX TO FORM 10-Q


		Page No.
PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements:

	Condensed Consolidated Statements of Income for the three-month and nine-month periods ended September 30, 2012 and October 2, 2011 (Unaudited)	3

	Condensed Consolidated Statements of Comprehensive Income for the three-month and nine-month periods ended September 30, 2012 and October 2, 2011 (Unaudited)	4

	Condensed Consolidated Balance Sheets as of September 30, 2012 (Unaudited) and December 31, 2011	5

	Condensed Consolidated Statements of Cash Flows for the nine-month periods ended September 30, 2012 and October 2, 2011 (Unaudited)	6

	Notes to Condensed Consolidated Financial Statements (Unaudited)	7

	Review Report of Independent Registered Public Accounting Firm	15


Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	16

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	25

Item 4.	Controls and Procedures	25


PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	26

Item 1A.	Risk Factors	27

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27

Item 3.	Default Upon Senior Securities	27

Item 4.	Mine Safety Disclosures	27

Item 5.	Other Information	27

Item 6.	Exhibits	27


Signature		28

PART 1. FINANCIAL INFORMATION

ITEM 1. Financial Statements

MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

				Three Months Ended						Nine Months Ended
(in thousands, except per share data)					Sept. 30, 2012			Oct. 2, 2011			Sept. 30, 2012			Oct. 2, 2011

Net sales				$	250,346		$	262,192		$	761,453		$	793,111
Cost of goods sold					195,347			209,282			595,175			633,585
			Production margin		54,999			52,910			166,278			159,526

Marketing and administrative expenses					22,046			22,553			66,784			69,392
Research and development expenses					5,105			4,723			15,178			14,489
Restructuring and other costs					0			240			0			470

			Income from operations		27,848			25,394			84,316			75,175

Non-operating income (deductions), net					(650	)		(1,663	)		(2,016	)		(3,299	)
	Income from operations before provision for taxes				27,198			23,731			82,300			71,876
Provision for taxes on income					8,015			7,387			24,270			21,686

	Consolidated net income				19,183			16,344			58,030			50,190

Less:		Net income attributable to non-controlling interests			553			656			1,653			2,308
Net income attribute to Minerals Technologies Inc. (MTI)				$	18,630		$	15,688		$	56,377		$	47,882


Earnings per share:
	Basic			$	1.06		$	0.88		$	3.19		$	2.64
	Diluted			$	1.05		$	0.87		$	3.17		$	2.62

Cash dividends declared per common share				$	0.05		$	0.05		$	0.15		$	0.15

Shares used in computation of earnings per share:

			Basic		17,640			17,928			17,694			18,128
			Diluted		17,733			18,019			17,775			18,242

See accompanying Notes to Condensed Consolidated Financial Statements.

MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)

				Three Months Ended						Nine Months Ended
(thousands of dollars)					Sept. 30, 2012			Oct. 2, 2011			Sept. 30, 2012			Oct. 2, 2011
Consolidated net income				$	19,183		$	16,344		$	58,030		$	50,190
Other comprehensive income, net of tax:
	Foreign currency translation adjustments				8,562			(25,356	)		1,595			(3,170	)
	Pension and postretirement plan adjustments				1,829			(1,138	)		5,481			1,817
	Sale of interest in business				--			(820	)		--			(820	)
	Cash flow hedges:
		Net derivative gains (losses) arising during the period			(299	)		1,517			380			87
Comprehensive income (loss)					29,275			(9,453	)		65,486			48,104
Comprehensive income (loss) attributable to
			non-controlling interest		(750	)		1,523			(1,561	)		(1,391	)
Comprehensive income (loss) attributable to MTI				$	28,525		$	(7,930	)	$	63,925		$	46,713

See accompanying Notes to Condensed Consolidated Financial Statements.

MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED BALANCE SHEETS

ASSETS
(thousands of dollars)				Sept. 30, 2012*			Dec. 31, 2011**

Current assets:
	Cash and cash equivalents		$	449,106		$	395,152
	Short-term investments, at cost which approximates market			12,700			18,494
	Accounts receivable, net			194,240			194,317
	Inventories			93,143			90,760
	Prepaid expenses and other current assets			21,039			21,566
		Total current assets		770,228			720,289

Property, plant and equipment, less accumulated depreciation and depletion – September 30, 2012 - $933,525; December 31, 2011 - $930,515				318,891			318,134
Goodwill				65,738			64,671
Other assets and deferred charges				54,408			61,861
		Total assets	$	1,209,265		$	1,164,955


LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
	Short-term debt		$	5,117		$	5,846
	Current maturities of long-term debt			1,977			8,552
	Accounts payable			102,203			103,354
	Restructuring liabilities			593			1,411
	Other current liabilities			67,108			61,739
		Total current liabilities		176,998			180,902

Long-term debt				83,753			85,449
Accrued Pension and Post-Retirement Benefits				90,970			97,318
Other non-current liabilities				29,199			33,266
		Total liabilities		380,920			396,935

Shareholders' equity:
	Common stock			2,931			2,913
	Additional paid-in capital			343,906			335,134
	Retained earnings			1,016,851			963,130
	Accumulated other comprehensive loss			(37,783	)		(45,331	)
	Less common stock held in treasury			(522,943	)		(514,234	)

Total MTI shareholders' equity				802,962			741,612
Non-controlling interest				25,383			26,408
		Total shareholders' equity		828,345			768,020

		Total liabilities and shareholders' equity	$	1,209,265		$	1,164,955

* Unaudited
** Condensed from audited financial statements

See accompanying Notes to Condensed Consolidated Financial Statements.

MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

				Nine Months Ended
(thousands of dollars)						Sept. 30, 2012			Oct. 2, 2011
Operating Activities:

Consolidated net income					$	58,030		$	50,190

Adjustments to reconcile net income
	to net cash provided by operating activities:
			Depreciation, depletion and amortization			37,466			43,724
			Payments relating to restructuring activities			(826	)		(2,360	)
			Pension plan funding			(11,760	)		(4,584	)
			Tax benefits related to stock incentive programs			270			428
			Other non-cash items			6,891			5,799
			Net changes in operating assets and liabilities			14,722			(320	)
Net cash provided by operating activities						104,793			92,877

Investing Activities:

Purchases of property, plant and equipment						(37,846	)		(36,913	)
Proceeds from sale of short-term investments						9,310			7,170
Purchases of short-term investments						(4,062	)		(8,221	)
Net cash used in investing activities						(32,598	)		(37,964	)

Financing Activities:

Proceeds from issuance of long-term debt						--			1,596
Repayment of long-term debt						(8,280	)		--
Net issuance (repayment) of short-term debt						(937	)		1,463
Purchase of common shares for treasury						(8,710	)		(43,432	)
Proceeds from issuance of stock under option plan						6,190			5,078
Excess tax benefits related to stock incentive programs						38			158
Dividends paid to non-controlling interest						(3,394	)		--
Cash dividends paid						(2,656	)		(2,719	)
Net cash used in financing activities						(17,749	)		(37,856	)

Effect of exchange rate changes on cash and
		cash equivalents				(492	)		(2,356	)

Net increase in cash and cash equivalents						53,954			14,701
Cash and cash equivalents at beginning of period						395,152			367,827
Cash and cash equivalents at end of period					$	449,106		$	382,528

Supplemental disclosure of cash flow information:
Interest paid					$	1,791		$	1,871

Income taxes paid					$	15,378		$	22,698

Non-cash financing activities:
		Treasury stock purchases settled after period-end			$	--		$	1,575

S See accompanying Notes to Condensed Consolidated Financial Statements.

MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Note 1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared by management in accordance with the rules and regulations of the United States Securities and Exchange Commission. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted. Therefore, these financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2011. In the opinion of management, all adjustments, consisting solely of normal recurring adjustments necessary for a fair presentation of the financial information for the periods indicated, have been included. The results for the three-month and nine-month periods ended September 30, 2012 are not necessarily indicative of the results that may be expected for the year ending December 31, 2012.

Note 2. Summary of Significant Accounting Policies

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, allowance for doubtful accounts, valuation of inventories, valuation of long-lived assets, goodwill and other intangible assets, pension plan assumptions, income tax, income tax valuation allowances, and litigation and environmental liabilities. Actual results could differ from those estimates.

Note 3. Earnings Per Share (EPS)

Basic earnings per share are based upon the weighted average number of common shares outstanding during the period. Diluted earnings per share are based upon the weighted average number of common shares outstanding during the period assuming the issuance of common shares for all dilutive potential common shares outstanding.

The following table sets forth the computation of basic and diluted earnings per share:

		Three Months Ended				Nine Months Ended
Basic EPS (in millions, except per share data)			Sept. 30, 2012		Oct. 2, 2011		Sept. 30, 2012		Oct. 2, 2011

	Net income attributable to MTI	$	18.6	$	15.7	$	56.4	$	47.9

Weighted average shares outstanding			17.6		17.9		17.7		18.1

	Basic earnings per share attributable to MTI	$	1.06	$	0.88	$	3.19	$	2.64

			Three Months Ended				Nine Months Ended
Diluted EPS (in millions, except per share data)				Sept. 30, 2012		Oct. 2, 2011		Sept. 30, 2012		Oct. 2, 2011

	Net income attributable to MTI		$	18.6	$	15.7	$	56.4	$	47.9

	Weighted average shares outstanding			17.6		17.9		17.7		18.1
	Diluted effect of stock options and stock units			0.1		0.1		0.1		0.1
		Weighted average shares outstanding, adjusted		17.7		18.0		17.8		18.2

	Diluted earnings per share attributable to MTI		$	1.05	$	0.87	$	3.17	$	2.62

MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

The weighted average diluted common shares outstanding for the three-month and nine-month periods ended September 30, 2012 and October 2, 2011 excludes the dilutive effect of 113,000 options and 603,869 options, respectively, as such options had an exercise price in excess of the average market value of the Company's common stock during such periods.

Note 4. Income Taxes

As of September 30, 2012, the Company had approximately $4.4 million of total unrecognized income tax benefits. Included in this amount were a total of $2.8 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.

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 a net increase of approximately $0.1 million and $0.2 million during the third quarter and first nine months of 2012, respectively, and had an accrued balance of $0.9 million of interest and penalties as of September 30, 2012.

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 international income tax examinations by tax authorities for years prior to 2006.

Note 5. Inventories

The following is a summary of inventories by major category:

(millions of dollars)		September 30, 2012		December 31, 2011
Raw materials	$	38.8	$	38.5
Work-in-process		7.7		6.0
Finished goods		26.1		26.1
Packaging and supplies		20.5		20.2
Total inventories	$	93.1	$	90.8

Note 6. Goodwill and Other Intangible Assets

Goodwill is not amortized, but instead is tested for impairment, at least annually. The carrying amount of goodwill was $65.7 million and $64.7 million as of September 30, 2012 and December 31, 2011, respectively. The net change in goodwill since December 31, 2011 was attributable to the effect of foreign exchange.

Acquired intangible assets subject to amortization as of September 30, 2012 and December 31, 2011 were as follows:

	September 30, 2012				December 31, 2011
(millions of dollars)		Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Patents and trademarks	$	6.2	$	4.1	$	6.2	$	4.0
Customer lists		2.7		1.5		2.7		1.5
	$	8.9	$	5.6	$	8.9	$	5.5

The weighted average amortization period for acquired intangible assets subject to amortization is approximately 15 years. Estimated amortization expense is $0.6 million for each of the next five years through 2016.

MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Also included in other assets and deferred charges is an intangible asset of approximately $0.3 million which represents the non-current unamortized amount paid to a customer in connection with contract extensions at seven PCC satellite facilities. A current portion of $0.4 million is included in prepaid expenses and other current assets. Such amounts will be amortized as a reduction of sales over the remaining lives of the customer contracts. Approximately $0.1 million was amortized in the third quarter of 2012. Estimated amortization as a reduction of sales is as follows: remainder of 2012 - $0.1 million; 2013 - $0.4 million; 2014 - $0.4 million; 2015 - $0.1 million.

Note 7. Restructuring Costs

A reconciliation of the restructuring liability as of September 30, 2012, is as follows:

(millions of dollars)	Balance as of Dec. 31, 2011		Provisions (Reversals)		Cash Expenditures			Balance as of Sept. 30, 2012
Contract costs	$	0.8	$	--	$	(0.3	)	$	0.5
Severance and other employee benefits		0.6		--		(0.5	)		0.1
	$	1.4	$	--	$	(0.8	)	$	0.6

Approximately $0.8 million in payments were made in first nine months of 2012. The remaining restructuring liability of $0.6 million will be funded from cash flows from operations during the remainder of 2012 and in 2013.

Note 8. Long-Term Debt and Commitments

The following is a summary of long-term debt:

(millions of dollars)			September 30, 2012		December 31, 2011

5.53% Series 2006A Senior Notes
	Due October 5, 2013		$	50.0	$	50.0
Floating Rate Series 2006A Senior Notes
	Due October 5, 2013			25.0		25.0
Variable/Fixed Rate Industrial
	Development Revenue Bonds Due August 1, 2012			---		8.0
Variable/Fixed Rate Industrial
	Development Revenue Bonds Series 1999 Due November 1, 2014			8.2		8.2
Installment obligations				1.4		1.4
Other Borrowings				1.1		1.4
		Total		85.7		94.0
Less: Current maturities				2.0		8.6
Long-term debt			$	83.7	$	85.4

As of September 30, 2012, the Company had $191 million of uncommitted short-term bank credit lines, of which approximately $5.1 million were in use.

In August 2012, the Company repaid $8.0 million for its Economic Development Authority Refunding Revenue Bonds. These bonds were issued in 1997 to refinance the bonds issued in connection with the construction of the company's PCC plant in Courtland, Alabama.

Note 9. Pension Plans

The Company and its subsidiaries have pension plans both in the U.S. and internationally, covering substantially all eligible employees on a contributory or non-contributory basis. 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.

MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Components of Net Periodic Benefit Cost

(millions of dollars)			Pension Benefits
				Three Months Ended						Nine Months Ended
				Sept. 30, 2012			Oct. 2, 2011			Sept. 30, 2012			Oct. 2, 2011
Service cost			$	2.3		$	1.7		$	7.0		$	5.4
Interest cost				3.6			3.0			10.8			8.9
Expected return on plan assets				(4.2	)		(3.5	)		(12.5	)		(10.5	)
Settlement cost				--			0.4			--			0.4
Amortization:
	Prior service cost			0.3			0.4			0.9			1.0
	Recognized net actuarial loss			3.4			2.3			10.2			6.4
		Net periodic benefit cost	$	5.4		$	4.3		$	16.4		$	11.6

(millions of dollars)			Other Benefits
				Three Months Ended						Nine Months Ended
				Sept. 30, 2012			Oct. 2, 2011			Sept. 30, 2012			Oct. 2, 2011
Service cost			$	0.1		$	0.2		$	0.4		$	0.5
Interest cost				0.1			0.1			0.3			0.5
Amortization:
	Prior service cost			(0.8	)		(0.8	)		(2.3	)		(2.3	)
	Recognized net actuarial loss			--			--			--			0.2
		Net periodic benefit cost	$	(0.6	)	$	(0.5	)	$	(1.6	)	$	(1.1	)

Amortization amounts of prior service costs and recognized net actuarial losses are recorded, net of tax, as increases to accumulated other comprehensive income.

Employer Contributions

The Company expects to contribute $15.0 million to its pension plans and $1.0 million to its other post retirement benefit plans in 2012. As of September 30, 2012, $11.8 million has been contributed to the pension plans and approximately $0.5 million has been contributed to the other post retirement benefit plans.

Note 10. Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss, net of related tax, are as follows:

(millions of dollars)		Sept. 30, 2012			Dec. 31, 2011
Foreign currency translation gains	$	31.5		$	29.9
Unrecognized pension costs		(72.0	)		(77.5	)
Net gain (loss) on cash flow hedges		2.7			2.3
Accumulated other comprehensive loss	$	(37.8	)	$	(45.3	)

Note 11. Accounting for Asset Retirement Obligations

The Company records asset retirement obligations for situations in which the Company will be required to incur costs to retire tangible long-lived assets. These are primarily related to its PCC satellite facilities and mining operations. The Company has also recorded 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 legal or contractual obligations. The associated asset retirement costs are capitalized as part of the carrying amount of the long-lived asset.

MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

The following is a reconciliation of asset retirement obligations as of September 30, 2012:

(millions of dollars)
Asset retirement liability, December 31, 2011	$	14.7
Accretion expense		0.5
Payments		(0.2	)
Foreign currency translation		--
Asset retirement liability, September 30, 2012	$	15.0

Approximately $0.4 million is included in other current liabilities and $14.6 million is included in other non-current liabilities in the Condensed Consolidated Balance Sheet as of September 30, 2012.

Note 12. Legal Proceedings

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 72 pending silica cases and 29 pending asbestos cases. To date, 1,394 silica cases and 10 asbestos cases have been dismissed. Four new asbestos cases were filed in the third quarter of 2012. 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 not settled any silica or asbestos lawsuits to date. 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 was approximately $0.2 million, the majority of which has been 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 29 pending asbestos cases, at least 25 allege liability based solely on products sold prior to the initial public offering, and for which the Company is therefore entitled to full indemnification pursuant to such agreements. 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.

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. We are now conducting a site-specific risk assessment required by the regulators.

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. 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 September 30, 2012.

MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

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 September 30, 2012.

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

Note 13. Non-Operating Income and Deductions

		Three Months Ended						Nine Months Ended
(millions of dollars)			Sept. 30, 2012			Oct. 2, 2011			Sept. 30, 2012			Oct. 2, 2011
	Interest income	$	0.7		$	1.1		$	2.5		$	2.9
	Interest expense		(0.8	)		(0.8	)		(2.4	)		(2.4	)
	Foreign exchange (losses) gains		(0.1	)		(0.2	)		(0.8	)		(1.5	)
	Foreign currency translation loss upon liquidation		--			(1.4	)		--			(1.4	)
	Other deductions		(0.4	)		(0.4	)		(1.3	)		(0.9	)
Non-operating (deductions) income, net		$	(0.6	)	$	(1.7	)	$	(2.0	)	$	(3.3	)

In the third quarter of 2011, the company divested a 50% interest in its Refractories joint venture in Korea. As a result, the Company now has a 20% equity interest in this entity and recognized a $1.4 million currency translation loss upon deconsolidation of this entity. The fair value of the remaining 20% interest was approximately $0.6 million and the Company now accounts for this investment using the equity method.

Note 14 . Non-controlling interests

The following is a reconciliation of beginning and ending total equity, equity attributable to MTI, and equity attributable to non-controlling interests:

		Equity Attributable to MTI
(millions of dollars)		Common Stock		Additional Paid-in Capital		Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock			Non-controlling Interests			Total
Balance as of December 31, 2011		$	2.9		335.1		963.1			(45.3	)		(514.2	)		26.4			768.0

Net income			--		--		56.4			--			--			1.7			58.1
Dividends declared			--		--		(2.7	)		--			--			--			(2.7	)
Dividends to non-controlling interest			--		--		--			--			--			(3.4	)		(3.4	)
Capital contributions by non-controlling interest			--		--		--			--			--			0.8			0.8
Currency translation adjustment			--		--		--			1.6			--			(0.1	)		1.5
Unamortized pension gains and
	prior service costs		--		--		--			5.5			--			--			5.5
Cash flow hedge:
Net derivative gains (losses)
	arising during the year		--		--		--			0.4			--			--			0.4
Reclassification adjustment			--		--		--			--			--			--			--
Employee benefit transactions			--		6.2		--			--			--			--			6.2
Income tax benefit arising from employee
	stock option plans		--		0.3		--			--			--			--			0.3
Stock based compensation			--		2.3		--			--			--			--			2.3
Purchase of common stock			--		--		--			--			(8.7	)		--			(8.7	)
Balance as of September 30, 2012		$	2.9		343.9		1,016.8			(37.8	)		(522.9	)		25.4			828.3

The income attributable to non-controlling interests for the nine-month periods ended September 30, 2012 and October 2, 2011 was from continuing operations. The remainder of income was attributable to MTI. There were no changes in MTI's ownership interest for the period ended September 30, 2012 as compared with December 31, 2011.

MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Note 15. Segment and Related Information

Segment information for the three and nine-month periods ended September 30, 2012 and October 2, 2011 were as follows:

(millions of dollars)	Net Sales

	Three Months Ended				Nine Months Ended
		Sept. 30, 2012		Oct. 2, 2011		Sept. 30, 2012		Oct. 2, 2011
Specialty Minerals	$	165.6	$	171.1	$	501.4	$	516.1
Refractories		84.7		91.1		260.0		277.0
Total	$	250.3	$	262.2	$	761.4	$	793.1

(millions of dollars)	Income from Operations

	Three Months Ended				Nine Months Ended
		Sept. 30, 2012		Oct. 2, 2011		Sept. 30, 2012		Oct. 2, 2011
Specialty Minerals	$	22.6	$	19.3	$	64.6	$	57.2
Refractories		7.2		7.5		25.0		22.2
Total	$	29.8	$	26.8	$	89.6	$	79.4

Included in income from operations for the Refractories segment for the three month and nine month periods ended October 2, 2011 were restructuring costs of $0.2 million and $ -- , respectively.

Included in income from operations for the Specialty Minerals segment for the nine months period ended October 2, 2011 were restructuring costs of $0.4 million.

The carrying amount of goodwill by reportable segment as of September 30, 2012 and December 31, 2011 was as follows:

(millions of dollars)	Goodwill

	Period Ended
		Sept. 30, 2012		Dec. 31, 2011
Specialty Minerals	$	14.1	$	13.8
Refractories		51.6		50.9
Total	$	65.7	$	64.7

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

(millions of dollars)		Income from continuing operations before provision for taxes:
		Three Months Ended						Nine Months Ended
			Sept. 30, 2012			Oct. 2, 2011			Sept. 30, 2012			Oct. 2, 2011

Income from operations for reportable segments		$	29.8		$	26.8		$	89.6		$	79.4
Unallocated corporate expenses			(2.0	)		(1.4	)		(5.3	)		(4.2	)
Consolidated income from operations			27.8			25.4			84.3			75.2
Non-operating income (deductions) from operations			(0.6	)		(1.7	)		(2.0	)		(3.3	)
Income from continuing operations,
	before provision for taxes on income	$	27.2		$	23.7		$	82.3		$	71.9

MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

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

(millions of dollars)		Three Months Ended				Nine Months Ended
			Sept. 30, 2012		Oct. 2, 2011		Sept. 30, 2012		Oct. 2, 2011
Paper PCC		$	120.6	$	126.5	$	361.6	$	379.3
Specialty PCC			16.4		16.0		49.8		48.2
Talc			11.9		11.3		37.1		35.4
Ground Calcium Carbonate			16.7		17.3		52.9		53.2
Refractory Products			66.0		71.1		200.5		216.1
Metallurgical Products			18.7		20.0		59.5		60.9
	Net sales	$	250.3	$	262.2	$	761.4	$	793.1

REVIEW REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Shareholders
Minerals Technologies Inc.:

We have reviewed the condensed consolidated balance sheet of Minerals Technologies Inc. and subsidiaries as of September 30, 2012 and the related condensed consolidated statements of income and comprehensive income (loss) for the three-month and nine-month periods ended September 30, 2012 and October 2, 2011, and the related condensed consolidated statements of cash flows for the nine-month periods ended September 30, 2012 and October 2, 2011. These condensed consolidated financial statements are the responsibility of the company's management.

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the condensed consolidated financial statements referred to above for them to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of Minerals Technologies Inc. and subsidiaries as of December 31, 2011, and the related consolidated statements of income, shareholders' equity, and cash flows for the year then ended (not presented herein); and in our report dated February 24, 2012, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2011 is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

/s/ KPMG LLP

New York, New York
November 2, 2012

ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

	Income and Expense Items as a Percentage of Net Sales

	Three Months Ended					Nine Months Ended
		Sept. 30, 2012		Oct. 2, 2011			Sept. 30, 2012		Oct. 2, 2011
Net sales		100.0	%	100.0	%		100.0	%	100.0	%
Cost of goods sold		78.0		79.8			78.2		79.9

Production margin		22.0		20.2			21.8		20.1
Marketing and administrative expenses		8.7		8.6			8.8		8.7
Research and development expenses		2.0		1.8			2.0		1.8
Restructuring and other costs		---		0.1			---		0.1

Income from operations		11.1		9.7			11.1		9.5
Net income		7.4	%	6.0	%		7.4	%	6.0	%

Executive Summary

Consolidated sales for the third quarter of 2012 decreased 5% to $250.3 million from $262.2 million in the prior year. Foreign exchange had an unfavorable impact on sales of approximately $11.6 million or 4 percentage points. Income from operations grew 10% to $27.8 million in the third quarter of 2012 from $25.4 million in the prior year. Net income increased 19% to $18.6 million in the third quarter of 2012 from $15.7 million in the prior year.

The Company's results reflected continued solid financial performance, despite weakening economic conditions in Europe. The Company remains focused on the execution of its geographic expansion and new product development growth strategies and we continue to see progress in our major growth strategy of developing and commercializing new products such as our FulFill™ platform of technologies of higher filler loading The Company has entered into eleven commercial agreements with papermakers around the world for the adoption of our FulFill™ higher filler technology. In addition, the Company signed a contract to build a 100,000 ton satellite PCC facility in China at a paper mill owned by Shandong Sun Paper Industry Joint Stock Co. Ltd. We also launched a new faster laser measurement system within our Ferrotron subsidiary for the global steel industry.

The Company's balance sheet as of September 30, 2012 continues to be very strong. Cash, cash equivalents and short-term investments were approximately $462 million. We have available lines of credit of $191 million, our debt to equity ratio was 11%, and our current ratio was 4.4. Our cash flows from operations were approximately $40 million in the third quarter of 2012.

We face some significant risks and challenges in the future:

·	The industries we serve, primarily paper, steel, construction and automotive, can be adversely affected by the uncertain global economic climate. Our Refractories segment primarily serves the steel industry which has softened globally in the third quarter and impacted our two largest markets, North America and Europe. In the paper industry, which is served by our Paper PCC product line, production levels for uncoated freesheet within North America and Europe, our two largest markets, for the third quarter 2012 were 1.6% and 2.8% below the prior year. In addition, our Processed Minerals and Specialty PCC product lines are affected by the seasonal demand of the domestic building and construction markets.
·	Some of our customers may experience shutdowns due to industry consolidations, or may face liquidity issues, or bankruptcy, which could deteriorate the aging of our accounts receivable, increase our bad debt exposure and possibly trigger impairment of assets or realignment of our businesses.
·	Consolidations and rationalizations in the paper and steel industries concentrate purchasing power in the hands of fewer customers, increasing pricing pressure on suppliers such as Minerals Technologies Inc.
·	Most of our Paper PCC sales are subject to long-term contracts that may be terminated pursuant to their terms, or may be renewed on terms less favorable to us.

·	We are subject to volatility in pricing and supply availability of our key raw materials used in our Paper PCC product line and Refractory product line.
·	We continue to rely on China for a portion of our supply of magnesium oxide in the Refractories segment, which may be subject to uncertainty in availability and cost.
·	Fluctuations in energy costs have an impact on all of our businesses.
·	Changes in the fair market value of our pension assets, rates of return on assets, and discount rates could continue to have a significant impact on our net periodic pension costs as well as our funding status.
·	As we expand our operations abroad we face the inherent risks of doing business in many foreign countries, including foreign exchange risk, import and export restrictions, and security concerns.
·	The Company's operations, particularly in the mining and environmental areas (discharges, emissions and greenhouse gases), are subject to regulation by federal, state and foreign authorities and may be subject to, and presumably will be required to comply with, additional laws, regulations and guidelines which may be adopted in the future.

During the second quarter of 2011, Metsa Board Corporation, formerly M-real Corporation, announced plans to divest its Alizay paper mill in France. Over the past several months, Metsa Board had been in discussions with a number of paper producers; however none of the candidates have fulfilled Metsa Board's conditions for sale. Although the paper mill is presently not operating, we believe discussions for the sale of the mill continue. If Metsa Board can not sell the facility, the Company would likely shut down its PCC satellite facility permanently and could incur an impairment of assets charge. Under that scenario, the Company could pursue options for mitigation or recovery of assets, including redeployment of assets to other locations to the extent feasible. The net book value of the facility as of September 30, 2012 was $3.7 million. In 2011, sales at Alizay were approximately $7 million.

During the third quarter of 2011, NewPage Corporation filed for Chapter 11 bankruptcy protection. The Company does business with five NewPage mills, including operating three satellite PCC facilities at NewPage locations. At present, the Company continues to supply PCC to these mills. NewPage has reached an agreement with its major creditor groups on a plan to emerge from bankruptcy. However, there can be no assurance such plan will be confirmed. If NewPage is unable to emerge from the bankruptcy process or should the facilities the Company supplies cease operations, the Company could incur an impairment of assets charge of up to $16 million and may incur additional provisions for bad debt. Annual sales to NewPage locations in 2011 were approximately $20 million.

The Company has evaluated these facilities for impairment of assets and, based upon the information currently available and probability-weighted cash flows of various potential outcomes, has determined that no impairment charge is required in the third quarter.

The Company will continue to focus on innovation and new product development and other opportunities for continued growth as follows:

·	Develop multiple high-filler technologies, such as filler-fiber, under the Fulfill^TM platform of products, to increase the fill rate in freesheet paper and continue to progress with commercial discussions and full-scale paper machine trials.
·	Increase our sales of PCC for paper by further penetration of the markets for paper filling at both freesheet and groundwood mills, particularly in emerging markets.
·	Expand the Company's PCC coating product line using the satellite model.
·	Promote the Company's expertise in crystal engineering, especially in helping papermakers customize PCC morphologies for specific paper applications.
·	Expand PCC produced for paper filling applications by working with industry partners to develop new methods to increase the ratio of PCC for fiber substitutions.
·	Develop unique calcium carbonates and talc products used in the manufacture of novel biopolymers, a new market opportunity.
·	Deploy new talc, PCC and GCC products in paint, coating and packaging applications.
·	Deploy value-added formulations of refractory materials that not only reduce costs but improve performance.
·	Expand our solid core wire product line into BRIC, Middle Eastern and other Asian countries.
·	Deploy our laser measurement technologies into new applications.
·	Deploy operational excellence principles into all aspects of the organization, including system infrastructure and lean principles.
·	Explore selective acquisitions to fit our core competencies in minerals and fine particle technology.

However, there can be no assurance that we will achieve success in implementing any one or more of these opportunities.

Results of Operations

Three months ended September 30, 2012 as compared with three months ended October 2, 2011.

Sales

(millions of dollars)				Third Quarter 2012	% of Total Sales		Growth			Third Quarter 2011	% of Total Sales
Net Sales				Third Quarter 2012	% of Total Sales		Growth			Third Quarter 2011	% of Total Sales

U.S			$	138.3	55.3	%	(1)	%	$	140.2	53.5	%
International				112.0	44.7	%	(8)	%		122.0	46.5	%
	Net sales		$	250.3	100.0	%	(5)	%	$	262.2	100.0	%

Paper PCC			$	120.6	48.2	%	(5)	%	$	126.5	48.3	%
Specialty PCC				16.4	6.5	%	2	%		16.0	6.1	%
	PCC Products		$	137.0	54.7	%	(4)	%	$	142.5	54.4	%

Talc			$	11.9	4.7	%	5	%	$	11.3	4.3	%
Ground Calcium Carbonate				16.7	6.7	%	(3)	%		17.3	6.6	%
	Processed Minerals Products		$	28.6	11.4	%	0	%	$	28.6	10.9	%

	Specialty Minerals Segment		$	165.6	66.1	%	(3)	%	$	171.1	65.3	%

Refractory Products			$	66.0	26.4	%	(7)	%	$	71.1	27.1	%
Metallurgical Products				18.7	7.5	%	(7)	%		20.0	7.6	%
	Refractories Segment		$	84.7	33.9	%	(7)	%	$	91.1	34.7	%

		Net sales	$	250.3	100.0	%	(5)	%	$	262.2	100.0	%

Worldwide net sales in the third quarter of 2012 decreased 5% to $250.3 million from $262.2 million in the prior year. Foreign exchange had an unfavorable impact on sales of $11.6 million or approximately 4 percentage points. Sales in the Specialty Minerals segment, which includes the PCC and Processed Minerals product lines, decreased 3% to $165.6 million as compared with $171.1 million for the same period in 2011. Sales in the Refractories segment decreased 7% to $84.7 million as compared with $91.1 million for the same period in 2011.

Worldwide net sales of PCC, which is primarily used in the manufacturing process of the paper industry, decreased 4% in the third quarter to $137.0 million from $142.5 million in the prior year. Foreign exchange had an unfavorable impact on sales of $7.4 million or approximately 5 percentage points. Paper PCC sales decreased 5% to $120.6 million in the third quarter of 2012 from $126.5 million in the prior year. Foreign exchange had an unfavorable impact on sales of $7.2 million or approximately 6 percentage points. Paper PCC volumes declined 1% in the third quarter from the prior year with Europe declines of 14% partially offset by new satellite PCC facilities in North America and India as well as increased volumes in Latin America. Sales were affected by the closure of one satellite PCC facility in Finland, the temporary shutdown of a satellite PCC facility in France and volume declines due to lower paper production in Europe. Sales of Specialty PCC increased 2% to $16.4 million from $16.0 million in the prior year. This increase was primarily due to higher volumes.

Net sales of Processed Minerals were flat as compared to the prior year. Talc sales increased 5% to $11.9 million from $11.3 million in the prior year which offset the lower volumes in our ground calcium carbonate (GCC) product line.

Net sales in the Refractories segment in the third quarter of 2012 decreased 7% to $84.7 million from $91.1 million in the prior year. Foreign exchange had an unfavorable impact on sales of $4.2 million or approximately 5 percentage points. Sales of refractory products and systems to steel and other industrial applications decreased 7% to $66.0 million from $71.1 million in the prior year due to lower volumes, fewer equipment sales, the effects of foreign exchange and reduced sales in non-steel applications. Sales of metallurgical products within the Refractories segment decreased 7% to $18.7 million as compared with $20.0 million in the same period last year.

Net sales in the United States decreased 1% to $138.3 million in the third quarter of 2012 from $140.2 million in the prior year. International sales in the third quarter of 2012 decreased 8% to $112.0 million from $122.0 million, primarily due to lower volumes in Europe and the effects of foreign exchange.

Operating Costs and Expenses (millions of dollars)		Third Quarter 2012		Third Quarter 2011	Growth

Cost of goods sold	$	195.3	$	209.3	(7)	%
Marketing and administrative	$	22.0	$	22.6	(3)	%
Research and development	$	5.1	$	4.7	9	%
Restructuring and other costs	$	---	$	0.2	(100)	%

Cost of goods sold was 78.0% of sales as compared with 79.8% of sales in the prior year. Production margin increased $2.1 million, or 4% despite a 5% decrease in sales. In the Specialty Minerals segment, production margin increased 8% despite a 3% decrease in sales. This was primarily attributable to increased pricing of $4 million, lower energy costs of $1 million, continued productivity and cost improvements of $2 million, and combined higher volumes from new satellite facilities and in our talc product line of $2 million. Collectively, these items more than offset increased material costs of $3 million, the effects of continued permanent and temporary PCC facility closures and other volume declines of $2 million and the effects of foreign exchange of $1.6 million. In the Refractories segment, production margin decreased 3% despite a 7% decrease in sales. The decrease in margin was less than the decrease in sales due to lower materials costs of $2.5 million, cost and expense control and productivity improvements, which partially offset the combined effect of refractory volume and equipment declines of $2 million and the effects of foreign exchange of $1 million.

Marketing and administrative costs decreased 3% in the third quarter to $22.0 million from $22.6 million in the prior year and represented 8.7% of sales as compared with 8.6% of sales in the prior year. This decrease was primarily due to our expense control initiatives and the effects of foreign exchange.

Research and development expenses increased 9% to $5.1 million from $4.7 million in the prior year and represented 2.0% of net sales as compared with 1.8% of net sales in the prior year. The increased costs were primarily due to Paper PCC trial activity.

Income from Operations (millions of dollars)		Third Quarter 2012		Third Quarter 2011	Growth

Income from operations	$	27.8	$	25.4	10	%

The Company recorded income from operations of $27.8 million in the third quarter of 2012, a 10% increase from prior year income from operations of $25.4 million. Income from operations represented 11.1% of net sales in the current year as compared with 9.7% of sales in the third quarter of 2011.

Income from operations in the third quarter of 2012 for the Specialty Minerals segment was $22.6 million, as compared to income from operations of $19.3 million in the prior year. Operating income for the Refractories segment was $7.2 million as compared to income from operations of $7.5 million in the prior year.

Non-Operating Deductions (millions of dollars)		Third Quarter 2012		Third Quarter 2011	Growth

Non-operating deductions	$	0.6	$	1.7	(65)	%

In the third quarter of 2012, the Company recorded net non-operating deductions of $0.6 million as compared to net non-operating deductions of $1.7 million in the prior year. During the third quarter of 2011, the Company recognized currency translation losses of $1.4 million upon deconsolidation of our joint venture in Korea.

Provision for Taxes on Income (millions of dollars)		Third Quarter 2012				Third Quarter 2011			Growth
Provision for taxes on income	$	8.0			$	7.4			8	%

The effective tax rate for the third quarter of 2012 was 29.5% as compared with 31.1% for the third quarter of 2011. In the third quarter of 2011, the effective tax rate was negatively affected by 1.5 percentage points related to the foreign currency translation loss relating to the deconsolidation of our joint venture in Korea for which the Company could not record a tax benefit.

Consolidated Net Income, net of tax (millions of dollars)		Third Quarter 2012				Third Quarter 2011			Growth
Consolidated net income,net of tax	$	19.2			$	16.3			18	%

The Company recorded consolidated net income, net of tax, of $19.2 million as compared with $16.3 million in the prior year.

Non-controlling Interests (million of dollars)		Third Quarter 2012				Third Quarter 2011			Growth
Net income	$	0.6			$	0.7			(14)	%

The decrease in the income attributable to non-controlling interests is due to lower profitability in our joint ventures.

Net Income Attributable to MTI (million of dollars)		Third Quarter 2012				Third Quarter 2011			Growth
Net income	$	18.6			$	15.7			18	%

Net income attributable to MTI was $18.6 million in the third quarter of 2012 as compared with income of $15.7 million in the prior year. Diluted earnings were $1.05 per share in the third quarter of 2012 as compared with earnings of $0.87 per share in the prior year.

Nine months ended September 30, 2012 as compared with nine months ended October 2, 2011

(millions of dollars)				First Nine Months 2012	% of Total Sales		Growth			First Nine Months 2011	% of Total Sales
Net Sales				First Nine Months 2012	% of Total Sales		Growth			First Nine Months 2011	% of Total Sales

U.S			$	427.4	56.1	%	2	%	$	420.8	53.1	%
International				334.0	43.9	%	(10)	%		372.3	46.9	%
	Net sales		$	761.4	100.0	%	(4)	%	$	793.1	100.0	%

Paper PCC			$	361.6	47.6	%	(5)	%	$	379.3	47.8	%
Specialty PCC				49.8	6.5	%	3	%		48.2	6.1	%
	PCC Products		$	411.4	54.1	%	(4)	%	$	427.5	53.9	%

Talc			$	37.1	4.9	%	5	%	$	35.4	4.5	%
Ground Calcium Carbonate				52.9	6.9	%	(1)	%		53.2	6.7	%
	Processed Minerals Products		$	90.0	11.8	%	2	%	$	88.6	11.2	%

	Specialty Minerals Segment		$	501.4	65.9	%	(3)	%	$	516.1	65.1	%

Refractory Products			$	200.5	26.3	%	(7)	%	$	216.1	27.2	%
Metallurgical Products				59.5	7.8	%	(2)	%		60.9	7.7	%
	Refractories Segment		$	260.0	34.1	%	(6)	%	$	277.0	34.9	%

		Net sales	$	761.4	100.0	%	(4)	%	$	793.1	100.0	%

Worldwide net sales in the first nine months of 2012 decreased 4% to $761.4 million from $793.1 million in the prior year. Foreign exchange had an unfavorable impact on sales of approximately $23.4 million or approximately 3 percentage points. Sales in the Specialty Minerals segment, which includes the PCC and Processed Minerals product lines, decreased 3% to $501.4 million as compared with $516.1 million for the same period in 2011. Sales in the Refractories segment decreased 6% from the previous year to $260.0 million.

Worldwide net sales of PCC, which is primarily used in the manufacturing process of the paper industry, decreased 4% in the first nine months to $411.4 million from $427.5 million in the prior year. Foreign exchange had an unfavorable impact on sales of $15.4 million, or approximately 4 percentage points. Paper PCC sales decreased 5% to $361.6 million in the first nine months of 2012 from $379.3 million in the prior year. Volumes for this product line declined approximately 4%, primarily in Europe. Sales were affected by the closure of one satellite PCC facility in Finland, and the temporary shutdown of a satellite PCC facility in France. There were however, new PCC satellite facilities in North America and India that partially offset the volume decline. Sales of Specialty PCC increased 3% to $49.8 million from $48.2 million in the prior year. This increase was primarily due to volume increases of 3%.

Net sales of Processed Minerals products increased 2% in the first nine months of 2012 to $90.0 million from $88.6 million in the prior year. This increase was primarily attributable to volume and price increases in our talc product line. Talc sales increased 5% while GCC sales declined 1% primarily due to lower volumes in California.

Net sales in the Refractories segment decreased 6% in the first nine months to $260.0 million from $277.0 million in the prior year. Foreign exchange had an unfavorable impact on sales of $8.0 million, or approximately 3 percentage points. Sales of refractory products and systems to steel and other industrial applications decreased 7% to $200.5 million from $216.1 million primarily due to reduced volumes resulting from the deconsolidation of the Company's Refractory operations in Korea in the third quarter of 2011 of $3.5 million and to volume declines in Europe of 2% due to weakness in the European steel industry. Sales of metallurgical products within the Refractories segment decreased 2% to $59.5 million as compared with $60.9 million in the same period last year.

Net sales in the United States increased 2% to $427.4 million in the first nine months of 2012. International sales in the first nine months of 2012 decreased 10% to $334.0 million, primarily due to lower volumes in Europe and the effects of foreign exchange.

Operating Costs and Expenses (millions of dollars)		Nine Months 2012		Nine Months 2011	Growth

Cost of goods sold	$	595.2	$	633.6	(6)	%
Marketing and administrative	$	66.8	$	69.4	(4)	%
Research and development	$	15.2	$	14.5	5	%
Restructuring and other costs	$	---	$	0.5	(100)	%

Cost of goods sold was 78.2% of sales as compared with 79.9% of sales in the prior year. Production margin increased $6.8 million, or 4% as compared with a 4% decrease in sales. In the Specialty Minerals segment, production margin increased 6% on a 3% decrease in sales. This was primarily attributable to increased pricing of $15 million, lower energy costs of $1.3 million, continued productivity and cost improvements of $5 million, and combined higher volumes from new satellite facilities and in our talc product line of $3 million. Collectively, these items more than offset increased material costs of $10 million, the effects of continued permanent and temporary PCC facility closures and other volume declines of $6 million and the effects of foreign exchange of $3.5 million. In the Refractories segment, production margin increased 2% on a 6% decrease in sales. This was primarily attributable to lower material costs of $7 million, and cost and expense control and productivity improvement of $3 million, which more than offset the combined effect of volume declines and lower equipment sales of $7 million and the effects of foreign exchange of $1.2 million.

Marketing and administrative costs decreased 4% in the first nine months of 2012 to $66.8 million from $69.4 million in the prior year, primarily due to expense control initiatives and the effects of foreign exchange. Marketing and administrative costs as a percentage of net sales, however, remained flat at 8.8% in the current year as compared with prior year.

Research and development expenses increased 5% to $15.2 million and represented 2.0% of net sales as compared with 1.8% of net sales in the prior year. This increase was primarily due to Paper PCC trial activity.

Restructuring and other costs during the first nine months of 2011 were $0.5 million and primarily related to an additional $0.9 million of restructuring costs associated with our 2007 restructuring of our PCC merchant facility in Germany. This was partially offset by reversals of previously recorded liabilities.

Income from Operations (millions of dollars)		Nine Months 2012		Nine Months 2011	Growth

Income from operations	$	84.3	$	75.2	12	%

The Company recorded income from operations in the first nine months of 2012 of $84.3 million as compared with $75.2 million in the prior year. Income from operations represented 11.1% of net sales as compared with 9.5% of net sales in the prior year.

Income from operations for the Specialty Minerals segment increased 13% to $64.6 million from $57.2 million in the prior year. Income from operations for the Refractories segment increased 13% to $25.0 million from $22.2 million in the prior year.

Non-Operating Income (Deductions) (millions of dollars)		Nine Months 2012		Nine months 2011	Growth

Non-operating income (deductions), net	$	(2.0)	$	(3.3)	(39)	%

Non-operating deductions were $2.0 million as compared with $3.3 million in the first nine months of 2012, a decrease of 39%. This decrease was attributable to lower foreign exchange losses in the current year as well as foreign currency translation losses recognized upon deconsolidation of the Company's joint venture in Korea in the first nine months of 2011.

Provision for Taxes on Income (millions of dollars)		Nine Months 2012		Nine months 2011	Growth

Provision for taxes on income	$	24.3	$	21.7	12	%

The effective tax rate for the first nine months of 2012 was 29.5% as compared with 30.2% in the prior year. The rate for 2011 was affected by the foreign currency translation loss for Korea for which the Company could not record a tax benefit.

Consolidated net income, net of tax (millions of dollars)		Nine Months 2012				Nine months 2011			Growth
Income from continuing operations	$	58.0			$	50.2			16	%

The Company recorded consolidated net income, net of tax, of $58.0 million as compared with $50.2 million in the prior year.

Non-controlling Interests (million of dollars)		Nine Months 2012				Nine months 2011			Growth
Net income	$	1.7			$	2.3			(26)	%

The decrease in the income attributable to non-controlling interests was due to lower profitability in our joint ventures.

Net Income Attributable to MTI (millions of dollars)		Nine Months 2012				Nine months 2011			Growth
Net income	$	56.4			$	47.9			18	%

Net income attributable to MTI was $56.4 million in the first nine months of 2012 as compared with income of $47.9 million in the prior year. Diluted earnings were $3.17 per share for the first nine months of 2012 as compared with earnings of $2.62 per share in the prior year.

Liquidity and Capital Resources

Cash flows provided from operations in the first nine months of 2012 were principally used to fund capital expenditures, repurchase shares of Company stock, and pay the Company's dividend to common shareholders. Cash provided from operating activities amounted to $104.8 million in the first nine months of 2012 as compared with $92.9 million for the same period last year. The increase in cash provided from operations was primarily due to improved profitability and a favorable change in working capital as compared with the first nine month of 2011.

Working capital is defined as trade accounts receivable, trade accounts payable and inventories. Total working capital increased $5.0 million, or approximately 3%, from December 2011.

In 2011, the Company's Board of Directors authorized the Company's management to repurchase, at its discretion, up to $75 million of the Company's shares over a two-year period. As of September 30, 2012, 197,315 shares have been repurchased under this program for $ 11.7 million,or an average price of approximately $59.32 per share.

The following table summarizes our contractual obligations as of September 30, 2012:

Contractual Obligations

				Payments Due by Period
(millions of dollars)			Total		Less Than 1 Year		1-3 Years		3-5 Years		After 5 Years

Debt		$	85.7	$	2.0	$	83.7	$	--	$	--
Operating lease obligations			22.6		4.1		5.8		3.9		8.8
	Total contractual obligations	$	108.3	$	6.1	$	89.5	$	3.9	$	8.8

The Company had $191 million in uncommitted short-term bank credit lines, of which $5.1 million were in use at September 30, 2012. Our credit lines are primarily in the US, with approximately $20 million or 11% outside the US. The credit lines are generally one year in term at competitive market rates at large well established institutions. The Company typically uses its available credit lines to fund working capital requirement or local capital spending needs. We anticipate that capital expenditures for 2012 should be between $55 million and $65 million, principally related to the construction of PCC plants and other opportunities that meet our strategic growth objectives. We expect to meet our other long-term financing requirements from internally generated funds, uncommitted bank credit lines and, where appropriate, project financing of certain satellite plants. The aggregate maturities of long-term debt are as follows: remainder of 2012 - $-- million; 2013 - $77.2 million; 2014 - $8.2 million; 2015 $-- million; 2016 $–million; thereafter - $ -- million.

Cautionary Statement for "Safe Harbor" Purposes under the Private Securities Litigation Reform Act of 1995

The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements made by or on behalf of the Company. This report contains statements that the Company believes may be "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, particularly statements relating to the Company's objectives, plans or goals, future actions, future performance or results of current and anticipated products, sales efforts, expenditures, and financial results. From time to time, the Company also provides forward-looking statements in other publicly-released materials, both written and oral. Forward-looking statements provide current expectations and forecasts of future events such as new products, revenues and financial performance, and are not limited to describing historical or current facts. They can be identified by the use of words such as "believes," "expects," "plans," "intends," "anticipates," and other words and phrases of similar meaning.

Forward-looking statements are necessarily based on assumptions, estimates and limited information available at the time they are made. A broad variety of risks and uncertainties, both known and unknown, as well as the inaccuracy of assumptions and estimates, can affect the realization of the expectations or forecasts in these statements. Many of these risks and uncertainties are difficult to predict or are beyond the Company's control. Consequently, no forward-looking statement can be guaranteed. Actual future results may vary materially. Significant factors affecting the expectations and forecasts are set forth under "Item 1A — Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2011, and in Exhibit 99 to this Quarterly Report on Form 10-Q.

The Company undertakes no obligation to update any forward-looking statements to reflect events or circumstances that arise after the date hereof. Investors should refer to the Company's subsequent filings under the Securities Exchange Act of 1934 for further disclosures.

Recently Issued Accounting Standards

We do not expect the adoption of any recent accounting pronouncements to have a material effect on the financial statements of the Company.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities.

On an ongoing basis, we evaluate our estimates and assumptions, including those related to revenue recognition, allowance for doubtful accounts, valuation of inventories, valuation of long-lived assets, pension plan assumptions, stock-based compensation assumptions, income taxes, income tax valuation allowances and litigation and environmental liabilities. We base our estimates on historical experience and on other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that can not readily be determined from other sources. There can be no assurance that actual results will not differ from those estimates.

ITEM 3. Quantitative and Qualitative Disclosures about Market Risk

Market risk represents the risk of loss that may impact our financial position, results of operations or cash flows due to adverse changes in market prices and foreign currency and interest rates. We are exposed to market risk because of changes in foreign currency exchange rates as measured against the U.S. dollar. We do not anticipate that near-term changes in exchange rates will have a material impact on our future earnings or cash flows. However, there can be no assurance that a sudden and significant decline in the value of foreign currencies would not have a material adverse effect on our financial condition and results of operations. Approximately 48% of our bank debt bears interest at variable rates; therefore our results of operations would only be affected by interest rate changes to such outstanding bank debt. An immediate 10 percent change in interest rates would not have a material effect on our results of operations over the next fiscal year.

We do not enter into derivatives or other financial instruments for trading or speculative purposes. When appropriate, we enter into derivative financial instruments, such as forward exchange contracts and interest rate swaps, to mitigate the impact of foreign exchange rate movements and interest rate movements on our operating results. The counterparties are major financial institutions. Such forward exchange contracts and interest rate swaps would not subject us to additional risk from exchange rate or interest rate movements because gains and losses on these contracts would offset losses and gains on the assets, liabilities, and transactions being hedged. We had open forward exchange contracts to purchase approximately $2.5 million of foreign currencies as of September 30, 2012. The fair value of these instruments at September 30, 2012 was a liability of less than $0.1 million.

In 2008, the Company entered into forward contracts to sell 30 million Euros as a hedge of its net investment in Europe. These contracts mature in October 2013. The fair value of these instruments at September 30, 2012 was an asset of $4.1 million.

ITEM 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report, and under the supervision and with participation of the Company's management, including the Chief Executive Officer and the Chief Financial Officer, the Company carried out an evaluation of the effectiveness of the design and operation of the Company's disclosure controls and procedures, pursuant to Exchange Act Rule 13a-15(b). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective as of September 30, 2012.

Changes in Internal Control Over Financial Reporting

There was no change in the Company's internal control over financial reporting during the quarter ended September 30, 2012 that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. Legal Proceedings

Environmental Matters

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 September 30, 2012.

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

ITEM 1A. Risk Factors

There have been no material changes to our risk factors from those disclosed in our 2011 Annual Report on Form 10-K. For a description of Risk Factors, see Exhibit 99 attached to this report.

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

Period	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of the Publicly Announced Program	Dollar Value of Shares that May Yet be Purchased Under the Program
July 2 – July 29	38,600	$	62.84	192,415	$	63,601,195

July 30 – August 26	4,900	$	62.55	197,315	$	63,294,696

August 27 – September 30	--	$	--	197,315	$	63,294,696

Total	43,500	$	62.81

In 2011, the Company's Board of Directors authorized the Company's management to repurchase, at its discretion, up to $75 million of the Company's shares over a two-year period. As of September 30, 2012, 197,315 shares have been repurchased under this program for $11.7 million, or an average price of approximately $59.32 per share.

ITEM 3. Default Upon Senior Securities

Not applicable.

ITEM 4. Mine Safety Disclosures

The information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in Exhibit 95 to this Quarterly Report on Form 10-Q.

ITEM 5. Other Information

None.

ITEM 6. Exhibits

Exhibit No.		Exhibit Title

15		Letter Regarding Unaudited Interim Financial Information.
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 Certifications.
95		Information concerning Mine Safety Violations
99		Risk Factors.
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema
101.CAL		XBRL Taxonomy Extension Calculation Linkbase
101.DEF		XBRL Taxonomy Extension Definition Linkbase
101.LAB		XBRL Taxonomy Extension Label Linkbase
101.PRE		XBRL Taxonomy Extension Presentation Linkbase

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Minerals Technologies Inc.



By:	/s/ Douglas T. Dietrich
	Douglas T. Dietrich
	Senior Vice President-Finance and Treasury
	Chief Financial Officer
	(principal financial officer)

November 2, 2012

EXHIBIT INDEX

The following documents are filed as part of this report

Exhibit No.		Exhibit Title

15		Letter Regarding Unaudited Interim Financial Information.
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 Certifications.
95		Information concerning Mine Safety Violations
99		Risk Factors.
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema
101.CAL		XBRL Taxonomy Extension Calculation Linkbase
101.DEF		XBRL Taxonomy Extension Definition Linkbase
101.LAB		XBRL Taxonomy Extension Label Linkbase
101.PRE		XBRL Taxonomy Extension Presentation Linkbase