Chemtura Reports Fourth Quarter And Full Year 2012 Financial Results

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Chemtura Corporation, with 2012 sales of $2.6 billion, is a global manufacturer and marketer of specialty chemicals, agrochemicals and pool, spa and home care products. Additional information concerning us is available at www.chemtura.com.

Managed Basis Financial Measures

The information presented in this press release and in the attached financial tables includes financial measures that are not calculated or presented in accordance with Generally Accepted Accounting Principles in the United States (“GAAP”). Our managed basis financial measures consist of adjusted results of operations that exclude certain expenses, gains and losses that may not be indicative of our core operations. Excluded items include costs associated with the bankruptcy reorganization; facility closures, severance and related costs; gains and losses on sale of business and assets; increased depreciation due to the change in useful life of assets; unusual and non-recurring settlements; accelerated recognition of asset retirement obligations: impairment charges; changes in our pension plans as a result of dispositions, merger or significant plan amendments, and the release of cumulative translation adjustments upon the complete or substantial liquidation of any majority-owned entity. They also include the computation of Adjusted EBITDA. In addition to the managed basis financial measures discussed above, we have applied a managed basis effective income tax rate to our managed basis income before taxes. Our managed basis tax rate of 28% represents a refined estimated tax rate for our core operations to simplify comparison of underlying operating performance. Reconciliations of these managed basis financial measures to their most directly comparable GAAP financial measures are provided in the attached financial tables. We believe that such managed basis financial measures provide useful information to investors and may assist them in evaluating our underlying performance and identifying operating trends. In addition, management uses these managed basis financial measures internally to allocate resources and evaluate the performance of our operations. While we believe that such measures are useful in evaluating our performance, investors should not consider them to be a substitute for financial measures prepared in accordance with GAAP. In addition, these managed basis financial measures may differ from similarly titled managed basis financial measures used by other companies and do not provide a comparable view of our performance relative to other companies in similar industries.

Forward-Looking Statements

This document includes forward-looking statements within the meaning of Section 27(a) of the Securities Act of 1933, as amended and Section 21(e) of the Exchange Act of 1934, as amended. These forward-looking statements are identified by terms and phrases such as “anticipate,” “believe,” “intend,” “estimate,” “expect,” “continue,” “should,” “could,” “may,” “plan,” “project,” “predict,” “will” and similar expressions and include references to assumptions and relate to our future prospects, developments and business strategies.

Factors that could cause our actual results to differ materially from those expressed or implied in such forward-looking statements include, but are not limited to:

• The cyclical nature of the global chemicals industry;
• Increases in the price of raw materials or energy and our ability to recover cost increases through increased selling prices for our products;
• Disruptions in the availability of raw materials or energy;
• Our ability to implement our growth strategies in rapidly growing markets and faster growing regions;
• Our ability to execute timely upon our portfolio management strategies and mid and long range business plans;
• Our ability to obtain the requisite regulatory and other approvals to implement the plan to build a new multi-purpose manufacturing facility in Nantong, China;
• Declines in general economic conditions;
• The ability to comply with product registration requirements of regulatory authorities, including the U.S. food and drug administration (the “FDA”) and European Union REACh legislation;
• The effect of adverse weather conditions;
• Demand for Chemtura AgroSolutions segment products being affected by governmental policies;
• Current and future litigation, governmental investigations, prosecutions and administrative claims;
• Environmental, health and safety regulation matters;
• Federal regulations aimed at increasing security at certain chemical production plants;
• Significant international operations and interests;
• Our ability to maintain adequate internal controls over financial reporting;
• Exchange rate and other currency risks;
• Our dependence upon a trained, dedicated sales force;
• Operating risks at our production facilities;
• Our ability to protect our patents or other intellectual property rights;
• Whether our patents may provide full protection against competing manufacturers;
• Our ability to remain technologically innovative and to offer improved products and services in a cost-effective manner;
• The risks to our joint venture investments resulting from lack of sole decision making authority;
• Our unfunded and underfunded defined benefit pension plans and post-retirement welfare benefit plans;
• Risks associated with strategic acquisitions and divestitures;
• Risks associated with possible climate change legislation, regulation and international accords;
• The ability to support the carrying value of the goodwill and long-lived assets related to our businesses;
• Whether we repurchase any additional shares of our common stock that our Board of Directors has authorized us to purchase and the terms on which any such repurchases are made; and
• Other risks and uncertainties described in our filings with the Securities and Exchange Commission, including Item 1A, Risk Factors, in our Annual Report on Form 10-K.

These statements are based on our estimates and assumptions and on currently available information. Our forward-looking statements include information concerning possible or assumed future results of operations, and our actual results may differ significantly from the results discussed. Forward-looking information is intended to reflect opinions as of the date this press release was issued. We undertake no duty to update any forward-looking statements to conform the statements to actual results or changes in our operations.

CHEMTURA CORPORATION
Index of Financial Statements and Schedules
		Page
Financial Statements
Consolidated Statements of Operations (Unaudited) -
Quarters and Years ended December 31, 2012 and 2011		11
Consolidated Statements of Comprehensive Income (Unaudited) -
Quarters and Years ended December 31, 2012 and 2011		12
Consolidated Balance Sheets - December 31, 2012 (Unaudited) and
December 31, 2011		13
Condensed Consolidated Statements of Cash Flows (Unaudited) -
Years ended December 31, 2012 and 2011		14
Segment Net Sales and Operating Income (Unaudited) -
Quarters and Years ended December 31, 2012 and 2011		15
Supplemental Schedules
Major Factors Affecting Net Sales and Operating Results (Unaudited) -
Quarter and Year ended December 31, 2012 versus 2011		16
GAAP and Managed Basis Consolidated Statements of Operations (Unaudited) -
Quarters ended December 31, 2012 and 2011		17
GAAP and Managed Basis Consolidated Statements of Operations (Unaudited) -
Years ended December 31, 2012 and 2011		18
GAAP and Managed Basis Segment Net Sales and Operating Income (Unaudited) -
Quarters ended December 31, 2012 and 2011		19
GAAP and Managed Basis Segment Net Sales and Operating Income (Unaudited) -
Years ended December 31, 2012 and 2011		20

CHEMTURA CORPORATION
Consolidated Statements of Operations (Unaudited)
(In millions, except per share data)
			Quarters Ended December 31,					Years Ended December 31,
			2012		2011			2012		2011
Net sales		$	622	$	578		$	2,629	$	2,606
Cost of goods sold			470		428			1,938		1,939
Gross profit			152		150			691		667
Gross profit %			24%		26%			26%		26%
Selling, general and administrative			76		80			299		326
Depreciation and amortization			30		29			120		123
Research and development			10		8			44		38
Facility closures, severance and related costs			3		3			12		3
Gain on sale of business			-		(27)			-		(27)
Impairment charges			-		1			-		4
Changes in estimates related to expected allowable claims			-		2			1		3
Equity loss			1		1			4		1
Operating income			32		53			211		196
Interest expense			(17)		(15)			(64)		(63)
Loss on early extinguishment of debt			(1)		-			(1)		-
Other income, net			24		-			21		-
Reorganization items, net			(1)		-			(5)		(19)
Earnings from continuing operations before income taxes			37		38			162		114
Income tax expense			(10)		(14)			(28)		(20)
Earnings from continuing operations			27		24			134		94
(Loss) earnings from discontinued operations, net of tax			(7)		10			(34)		26
Net earnings			20		34			100		120
Less: Net loss (earnings) attributable to non-controlling interests			-		-			1		(1)
Net earnings attributable to Chemtura		$	20	$	34		$	101	$	119
Basic and diluted per share information - attributable to Chemtura:
Earnings from continuing operations, net of tax		$	0.27	$	0.24		$	1.35	$	0.94
(Loss) earnings from discontinued operations, net of tax			(0.07)		0.10			(0.33)		0.25
Net earnings attributable to Chemtura		$	0.20	$	0.34		$	1.02	$	1.19
Weighted average shares outstanding - Basic			97.9		99.6			98.2		100.1
Weighted average shares outstanding - Diluted			99.0		100.1			98.8		100.3
Amounts attributable to Chemtura Stockholders:
Earnings from continuing operations, net of tax		$	27	$	24		$	134	$	94
(Loss) earnings from discontinued operations, net of tax			(7)		10			(33)		25
Net earnings attributable to Chemtura		$	20	$	34		$	101	$	119

CHEMTURA CORPORATION
Consolidated Statements of Comprehensive Income (Unaudited)
(In millions)
			Quarters Ended December 31,					Years Ended December 31,
			2012		2011			2012		2011
Net earnings		$	20	$	34		$	100	$	120
Other comprehensive loss, net of tax:
Foreign currency translation adjustments			(21)		(15)			(6)		(35)
Unrecognized pension and other post-retirement benefit costs			(82)		(41)			(76)		(35)
Comprehensive (loss) income			(83)		(22)			18		50
Comprehensive loss (income) attributable to the non-controlling interest			-		-			1		(1)
Comprehensive (loss) income attributable to Chemtura		$	(83)	$	(22)		$	19	$	49

CHEMTURA CORPORATION
Consolidated Balance Sheets
(In millions)
			December 31,			December 31,
			2012			2011
			(Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents		$	363		$	179
Restricted cash			-			5
Accounts receivable			405			400
Inventories			468			455
Other current assets			142			133
Current assets of discontinued operations			234			149
Total current assets			1,612			1,321
NON-CURRENT ASSETS
Property, plant and equipment, net			719			669
Goodwill			177			174
Intangible assets, net			348			363
Other assets			174			190
Non-current assets of discontinued operations			-			138
Total Assets		$	3,030		$	2,855
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Short-term borrowings		$	5		$	4
Accounts payable			175			149
Accrued expenses			194			189
Income taxes payable			12			17
Current liabilities of discontinued operations			125			31
Total current liabilities			511			390
NON-CURRENT LIABILITIES
Long-term debt			871			748
Pension and post-retirement health care liabilities			393			389
Other liabilities			187			198
Non-current liabilities of discontinued operations			-			84
Total liabilities			1,962			1,809
STOCKHOLDERS' EQUITY
Common stock			1			1
Additional paid-in capital			4,366			4,353
Accumulated deficit			(2,848)			(2,949)
Accumulated other comprehensive loss			(428)			(346)
Treasury stock			(30)			(22)
Total Chemtura stockholders' equity			1,061			1,037
Non-controlling interest - Continuing operations			-			1
Non-controlling interest - Discontinued operations			7			8
Total Non-controlling interest			7			9
Total stockholders' equity			1,068			1,046
Total Liabilities and Stockholders' Equity		$	3,030		$	2,855

CHEMTURA CORPORATION
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In millions)
			Years Ended December 31,
Increase (decrease) to cash			2012			2011
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings		$	100		$	120
Adjustments to reconcile net earnings
to net cash provided by operating activities:
Gain on sale of business			-			(27)
Impairment charges			47			4
Release of translation adjustments from liquidation of entities			(21)			-
Loss on early extinguishment of debt			1			-
Depreciation and amortization			139			140
Stock-based compensation expense			24			26
Reorganization items, net			1			2
Changes in estimates related to expected allowable claims			1			3
Equity income			(3)			(3)
Changes in assets and liabilities, net			(71)			(83)
Net cash provided by operating activities			218			182
CASH FLOWS FROM INVESTING ACTIVITIES
Net proceeds from divestments			9			8
Payments for acquisitions			-			(35)
Capital expenditures			(149)			(154)
Net cash used in investing activities			(140)			(181)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from Term Loan			125			-
(Payments on) proceeds from other short term borrowings, net			(3)			3
Common shares acquired			(20)			(22)
Payments for debt issuance costs			(2)			-
Proceeds from exercise of stock options			5			1
Net cash provided by (used in) financing activities			105			(18)
CASH
Effect of exchange rates on cash and cash equivalents			2			(4)
Change in cash and cash equivalents			185			(21)
Cash and cash equivalents at beginning of period			180			201
Cash and cash equivalents at end of period		$	365		$	180
Cash and cash equivalents at end of period - Continuing operations		$	363		$	179
Cash and cash equivalents at end of period - Discontinued operations		$	2		$	1

CHEMTURA CORPORATION
Segment Net Sales and Operating Income (Unaudited)
(In millions)
			Quarters Ended December 31,					Years Ended December 31,
			2012		2011			2012		2011
NET SALES
Petroleum additives		$	146	$	141		$	600	$	634
Urethanes			68		70			291		305
Industrial Performance Products			214		211			891		939
Bromine based & related products			181		149			730		688
Organometallics			40		45			166		181
Industrial Engineered Products			221		194			896		869
Consumer Products			89		87			433		422
Chemtura AgroSolutions			98		86			409		376
Total net sales		$	622	$	578		$	2,629	$	2,606
OPERATING INCOME
Industrial Performance Products		$	20	$	28		$	102	$	116
Industrial Engineered Products			28		30			140		130
Consumer Products			5		1			30		26
Chemtura AgroSolutions			11		5			65		30
Segment operating income			64		64			337		302
General corporate expense, including amortization			(29)		(32)			(113)		(123)
Facility closures, severance and related costs			(3)		(3)			(12)		(3)
Gain on sale of business			-		27			-		27
Impairment charges			-		(1)			-		(4)
Changes in estimates related to expected allowable claims			-		(2)			(1)		(3)
Total operating income		$	32	$	53		$	211	$	196

CHEMTURA CORPORATION
Major Factors Affecting Net Sales and Operating Results (Unaudited)
Quarter and Year ended December 31, 2012 versus 2011
(In millions)
The following table summarizes the major factors contributing to the changes
in operating results versus the prior year:
			Quarter ended December 31,						Year ended December 31,
			Net			Earnings before			Net			Earnings before
			Sales			income taxes			Sales			income taxes
2011		$	578		$	38		$	2,606		$	114
2011 Accelerated recognition of asset retirement obligations			-			1			-			-
2011 UK pension benefit matter			-			8			-			8
2011 Loss on disposal of assets			-			-			-			1
2011 Accelerated depreciation of property, plant and equipment			-			1			-			2
2011 Facility closures, severance and related costs			-			3			-			3
2011 Gain on sale of business			-			(27)			-			(27)
2011 Impairment Charges			-			1			-			4
2011 Changes in estimates related to expected allowable claims			-			2			-			3
2011 Reorganization items, net			-			-			-			19
			578			27			2,606			127
Changes in selling prices			3			3			75			75
Unit volume and mix			45			10			(17)			(4)
Foreign currency impact - operating income			(4)			(1)			(35)			(7)
Lower (higher) raw materials and energy costs			-			1			-			(6)
Manufacturing cost impacts			-			(13)			-			(37)
Changes in SGA&R, excluding foreign exchange impact			-			(9)			-			7
(Higher) lower depreciation and amortization expense			-			(2)			-			1
Higher interest expense			-			(2)			-			(1)
Foreign currency impact - other income (expense), net			-			2			-			(3)
Other			-			5			-			8
			622			21			2,629			160
2012 Accelerated depreciation of property, plant and equipment			-			-			-			-
2012 Facility closures, severance and related costs			-			(3)			-			(12)
2012 Impairment Charges			-			-			-			-
2012 Changes in estimates related to expected allowable claims			-			-			-			(1)
2012 Loss on early extinguishment of debt			-			(1)			-			(1)
2012 Release of translation adjustments from liquidation of entities			-			21			-			21
2012 Reorganization items, net			-			(1)			-			(5)
2012		$	622		$	37		$	2,629		$	162

CHEMTURA CORPORATION
GAAP and Managed Basis Consolidated Statements of Operations (Unaudited)
(In millions, except per share data)
			Quarter ended December 31, 2012							Quarter ended December 31, 2011
					Managed Basis							Managed Basis
			GAAP		Adjustments		Managed Basis			GAAP		Adjustments		Managed Basis
Net sales		$	622	$	-	$	622		$	578	$	-	$	578
Cost of goods sold			470		-		470			428		(1)		427
Gross profit			152		-		152			150		1		151
Gross profit %			24%				24%			26%				26%
Selling, general and administrative			76		-		76			80		(8)		72
Depreciation and amortization			30		-		30			29		(1)		28
Research and development			10		-		10			8		-		8
Facility closures, severance and related costs			3		(3)		-			3		(3)		-
Gain on sale of business			-		-		-			(27)		27		-
Impairment charges			-		-		-			1		(1)		-
Changes in estimates related to expected allowable claims			-		-		-			2		(2)		-
Equity loss			1		-		1			1		-		1
Operating income			32		3		35			53		(11)		42
Interest expense			(17)		-		(17)			(15)		-		(15)
Loss on early extinguishment of debt			(1)		1		-			-		-		-
Other income, net			24		(21)		3			-		-		-
Reorganization items, net			(1)		1		-			-		-		-
Earnings from continuing operations before income taxes			37		(16)		21			38		(11)		27
Income tax expense			(10)		4		(6)			(14)		6		(8)
Earnings from continuing operations			27		(12)		15			24		(5)		19
(Loss) earnings from discontinued operations, net of tax			(7)		7		-			10		(10)		-
Net earnings attributable to Chemtura		$	20	$	(5)	$	15		$	34	$	(15)	$	19
Basic and diluted per share information - attributable to Chemtura:
Earnings from continuing operations, net of tax		$	0.27			$	0.15		$	0.24			$	0.19
(Loss) earnings from discontinued operations, net of tax			(0.07)				-			0.10				-
Net earnings		$	0.20			$	0.15		$	0.34			$	0.19
Weighted average shares outstanding - Basic			97.9				97.9			99.6				99.6
Weighted average shares outstanding - Diluted			99.0				99.0			100.1				100.1
Managed Basis Adjustments consist of the following:
Accelerated recognition of asset retirement obligations				$	-						$	1
UK pension benefit matter					-							8
Accelerated depreciation of property, plant and equipment					-							1
Facility closures, severance and related costs					3							3
Gain on sale of business					-							(27)
Impairment charges					-							1
Changes in estimates related to expected allowable claims					-							2
Loss on early extinguishment of debt					1							-
Release of translation adjustments from liquidation of entities					(21)							-
Reorganization items, net					1							-
Pre-tax					(16)							(11)
Adjustment to apply a Managed Basis effective tax rate					4							6
Loss (earnings) from discontinued operations, net of tax					7							(10)
After-tax				$	(5)						$	(15)
Adjusted EBITDA consists of the following:
Operating income - GAAP						$	32						$	53
Accelerated recognition of asset retirement obligations							-							1
UK pension benefit matter							-							8
Accelerated depreciation of property, plant and equipment							-							1
Facility closures, severance and related costs							3							3
Gain on sale of business							-							(27)
Impairment charges							-							1
Changes in estimates related to expected allowable claims							-							2
Operating income - Managed Basis							35							42
Depreciation and amortization - Managed Basis							30							28
Non-cash stock-based compensation expense							10							4
Adjusted EBITDA						$	75						$	74

CHEMTURA CORPORATION
GAAP and Managed Basis Consolidated Statements of Operations (Unaudited)
(In millions, except per share data)
			Year ended December 31, 2012									Year ended December 31, 2011
						Managed Basis									Managed Basis
			GAAP			Adjustments			Managed Basis			GAAP			Adjustments			Managed Basis
Net sales		$	2,629		$	-		$	2,629		$	2,606		$	-		$	2,606
Cost of goods sold			1,938			-			1,938			1,939			-			1,939
Gross profit			691			-			691			667			-			667
Gross profit %			26%						26%			26%						26%
Selling, general and administrative			299			-			299			326			(9)			317
Depreciation and amortization			120			-			120			123			(2)			121
Research and development			44			-			44			38			-			38
Facility closures, severance and related costs			12			(12)			-			3			(3)			-
Gain on sale of business			-			-			-			(27)			27			-
Impairment charges			-			-			-			4			(4)			-
Changes in estimates related to expected allowable claims			1			(1)			-			3			(3)			-
Equity loss			4			-			4			1			-			1
Operating income			211			13			224			196			(6)			190
Interest expense			(64)			-			(64)			(63)			-			(63)
Loss on early extinguishment of debt			(1)			1			-			-			-			-
Other income, net			21			(21)			-			-			-			-
Reorganization items, net			(5)			5			-			(19)			19			-
Earnings from continuing operations before income taxes			162			(2)			160			114			13			127
Income tax expense			(28)			(17)			(45)			(20)			(16)			(36)
Earnings from continuing operations			134			(19)			115			94			(3)			91
(Loss) earnings from discontinued operations, net of tax			(34)			34			-			26			(26)			-
Net earnings			100			15			115			120			(29)			91
Less: Net loss (earnings) attributable to non-controlling interests			1			(1)			-			(1)			1			-
Net earnings attributable to Chemtura		$	101		$	14		$	115		$	119		$	(28)		$	91
Basic and diluted per share information - attributable to Chemtura:
Earnings from continuing operations, net of tax		$	1.35					$	1.16		$	0.94					$	0.91
(Loss) earnings from discontinued operations, net of tax			(0.33)						-			0.25						-
Net earnings		$	1.02					$	1.16		$	1.19					$	0.91
Weighted average shares outstanding - Basic			98.2						98.2			100.1						100.1
Weighted average shares outstanding - Diluted			98.8						98.8			100.3						100.3
Managed Basis Adjustments consist of the following:
UK pension benefit matter					$	-								$	8
Loss on disposal of assets						-									1
Accelerated depreciation of property, plant and equipment						-									2
Facility closures, severance and related costs						12									3
Gain on sale of business						-									(27)
Impairment charges						-									4
Changes in estimates related to expected allowable claims						1									3
Loss on early extinguishment of debt						1									-
Release of translation adjustments from liquidation of entities						(21)									-
Reorganization items, net						5									19
Pre-tax						(2)									13
Adjustment to apply a Managed Basis effective tax rate						(17)									(16)
Loss (earnings) from discontinued operations, net of tax						34									(26)
Non-controlling interests - Discontinued Operations						(1)									1
After-tax					$	14								$	(28)
Adjusted EBITDA consists of the following:
Operating income - GAAP								$	211								$	196
UK pension benefit matter									-									8
Loss on disposal of assets									-									1
Accelerated depreciation of property, plant and equipment									-									2
Facility closures, severance and related costs									12									3
Gain on sale of business									-									(27)
Impairment charges									-									4
Changes in estimates related to expected allowable claims									1									3
Operating income - Managed Basis									224									190
Depreciation and amortization - Managed Basis									120									121
Non-cash stock-based compensation expense									23									25
Adjusted EBITDA								$	367								$	336

CHEMTURA CORPORATION
GAAP and Managed Basis Segment Sales and Operating Income (Unaudited)
(In millions of dollars)
			Quarter ended December 31, 2012									Quarter ended December 31, 2011
			GAAP			Managed Basis						GAAP			Managed Basis
			Historical			Adjustments			Managed Basis			Historical			Adjustments			Managed Basis
NET SALES
Industrial Performance Products		$	214		$	-		$	214		$	211		$	-		$	211
Industrial Engineered Products			221			-			221			194			-			194
Consumer Products			89			-			89			87			-			87
Chemtura AgroSolutions			98			-			98			86			-			86
Total net sales		$	622		$	-		$	622		$	578		$	-		$	578
OPERATING INCOME
Industrial Performance Products		$	20		$	-		$	20		$	28		$	1		$	29
Industrial Engineered Products			28			-			28			30			-			30
Consumer Products			5			-			5			1			-			1
Chemtura AgroSolutions			11			-			11			5			1			6
Segment operating income			64			-			64			64			2			66
General corporate expense, including amortization			(29)			-			(29)			(32)			8			(24)
Facility closures, severance and related costs			(3)			3			-			(3)			3			-
Gain on sale of business			-			-			-			27			(27)			-
Impairment charges			-			-			-			(1)			1			-
Changes in estimates related to expected allowable claims			-			-			-			(2)			2			-
Total operating income		$	32		$	3		$	35		$	53		$	(11)		$	42
Managed Basis Adjustments consist of the following:
Accelerated recognition of asset retirement obligations					$	-								$	1
UK pension benefit matter						-									8
Accelerated depreciation of property, plant and equipment						-									1
Facility closures, severance and related costs						3									3
Gain on sale of business						-									(27)
Impairment charges						-									1
Changes in estimates related to expected allowable claims						-									2
					$	3								$	(11)
DEPRECIATION AND AMORTIZATION
Industrial Performance Products		$	7		$	-		$	7		$	7		$	-		$	7
Industrial Engineered Products			11			-			11			10			-			10
Consumer Products			3			-			3			2			-			2
Chemtura AgroSolutions			3			-			3			3			(1)			2
General corporate expense			6			-			6			7			-			7
Total depreciation and amortization		$	30		$	-		$	30		$	29		$	(1)		$	28
NON-CASH STOCK-BASED COMPENSATION EXPENSE
Industrial Performance Products								$	1								$	-
Industrial Engineered Products									1									-
Consumer Products									-									-
Chemtura AgroSolutions									-									1
General corporate expense									8									3
Total non-cash stock-based compensation expense								$	10								$	4
Adjusted EBITDA by Segment:
Industrial Performance Products								$	28								$	36
Industrial Engineered Products									40									40
Consumer Products									8									3
Chemtura AgroSolutions									14									9
General corporate expense									(15)									(14)
Adjusted EBITDA								$	75								$	74

CHEMTURA CORPORATION
GAAP and Managed Basis Segment Sales and Operating Income (Unaudited)
(In millions of dollars)
			Year ended December 31, 2012									Year ended December 31, 2011
			GAAP			Managed Basis						GAAP			Managed Basis
			Historical			Adjustments			Managed Basis			Historical			Adjustments			Managed Basis
NET SALES
Industrial Performance Products		$	891		$	-		$	891		$	939		$	-		$	939
Industrial Engineered Products			896			-			896			869			-			869
Consumer Products			433			-			433			422			-			422
Chemtura AgroSolutions			409			-			409			376			-			376
Total net sales		$	2,629		$	-		$	2,629		$	2,606		$	-		$	2,606
OPERATING INCOME
Industrial Performance Products		$	102		$	-		$	102		$	116		$	1		$	117
Industrial Engineered Products			140			-			140			130			-			130
Consumer Products			30			-			30			26			-			26
Chemtura AgroSolutions			65			-			65			30			1			31
Segment operating income			337			-			337			302			2			304
General corporate expense, including amortization			(113)			-			(113)			(123)			9			(114)
Facility closures, severance and related costs			(12)			12			-			(3)			3			-
Gain on sale of business			-			-			-			27			(27)			-
Impairment charges			-			-			-			(4)			4			-
Changes in estimates related to expected allowable claims			(1)			1			-			(3)			3			-
Total operating income		$	211		$	13		$	224		$	196		$	(6)		$	190
Managed Basis Adjustments consist of the following:
UK pension benefit matter					$	-								$	8
Loss on disposal of assets						-									1
Accelerated depreciation of property, plant and equipment						-									2
Facility closures, severance and related costs						12									3
Gain on sale of business						-									(27)
Impairment charges						-									4
Changes in estimates related to expected allowable claims						1									3
					$	13								$	(6)
DEPRECIATION AND AMORTIZATION
Industrial Performance Products		$	25		$	-		$	25		$	26		$	-		$	26
Industrial Engineered Products			43			-			43			42			(1)			41
Consumer Products			10			-			10			9			-			9
Chemtura AgroSolutions			13			-			13			10			(1)			9
General corporate expense			29			-			29			36			-			36
Total depreciation and amortization		$	120		$	-		$	120		$	123		$	(2)		$	121
NON-CASH STOCK-BASED COMPENSATION EXPENSE
Industrial Performance Products								$	2								$	2
Industrial Engineered Products									2									2
Consumer Products									1									1
Chemtura AgroSolutions									1									2
General corporate expense									17									18
Total non-cash stock-based compensation expense								$	23								$	25
Adjusted EBITDA by Segment:
Industrial Performance Products								$	129								$	145
Industrial Engineered Products									185									173
Consumer Products									41									36
Chemtura AgroSolutions									79									42
General corporate expense									(67)									(60)
Adjusted EBITDA								$	367								$	336

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