· form 10-q for the quarter ended march 31, ... 5 notes to consolidated financial statements...

Morningstar® Document Research℠

FORM 10-QChemtura CORP - CHMTFiled: May 01, 2012 (period: March 31, 2012)

Quarterly report with a continuing view of a company's financial position

Table of Contents

SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-Q

⌧ QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2012

OR

� TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the transition period from to

(Commission File Number) 1-15339

CHEMTURA CORPORATION(Exact name of registrant as specified in its charter)

Delaware

52-2183153(State or other jurisdiction of incorporation or

organization)

(I.R.S. Employer Identification Number)

1818 Market Street, Suite 3700, Philadelphia, Pennsylvania199 Benson Road, Middlebury, Connecticut

1910306749

(Address of principal executive offices)

(Zip Code)

(203) 573−2000(Registrant’s telephone number,

including area code)

(Former name, former address and former fiscal year, if changed from last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the SecuritiesExchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),and (2) has been subject to such filing requirements for the past 90 days. ⌧ Yes � No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, everyInteractive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of the chapter) during thepreceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ⌧ Yes � 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 definition of “large accelerated filer,” “accelerated filer,” “non-accelerated filer” and “smaller reportingcompany” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ⌧

Accelerated Filer�

Non-accelerated filer�

Smaller reporting company�(Do not check if 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 ⌧

Source: Chemtura CORP, 10-Q, May 01, 2012 Powered by Morningstar® Document Research℠

No The number of shares of common stock outstanding as of the latest practicable date is as follows:

Class

Number of shares outstandingat March 31, 2012

Common Stock - $.01 par value

98,665,045


Table of Contents

CHEMTURA CORPORATION AND SUBSIDIARIES

FORM 10-Q

FOR THE QUARTER ENDED MARCH 31, 2012

INDEX

PAGE

PART I. FINANCIAL INFORMATION

2

ITEM 1. Financial Statements

2

Consolidated Statements of Operations (Unaudited)

2

Consolidated Statements of Comprehensive Income (Unaudited)

3

Consolidated Balance Sheets

4

Condensed Consolidated Statements of Cash Flows (Unaudited)

5

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

6

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

26

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk

34

ITEM 4. Controls and Procedures

35 PART II. OTHER INFORMATION

36

ITEM 1. Legal Proceedings

36 ITEM 1A. Risk Factors

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

36 ITEM 5. Other Information

36 ITEM 6. Exhibits

37

SIGNATURE

38 1


Table of Contents

PART I. FINANCIAL INFORMATION ITEM 1. Financial Statements

CHEMTURA CORPORATION AND SUBSIDIARIESConsolidated Statements of Operations (Unaudited)

Quarters ended March 31, 2012 and 2011(In millions, except per share data)

Quarters ended March 31,

2012

2011

Net sales

$ 708

$ 699

Cost of goods sold

537

538

Selling, general and administrative

82

79

Depreciation and amortization

33

37

Research and development

13

11

Impairment charges

1

2

Changes in estimates related to expected allowable claims

2

—

Equity income

(1) —

Operating income

41

32

Interest expense

(14) (16)Other (expense) income, net

(4) 1

Reorganization items, net

(2) (7) Earnings before income taxes

21

10

Income tax benefit (expense)

1

(3) Net earnings attributable to Chemtura

$ 22

$ 7

Basic and diluted per share information - attributable to Chemtura

Net earnings attributable to Chemtura

$ 0.22

$ 0.07

Weighted average shares outstanding - Basic

98.3

100.1

Weighted average shares outstanding - Diluted

99.1

100.1

See accompanying notes to Consolidated Financial Statements.

2


Table of Contents

CHEMTURA CORPORATION AND SUBSIDIARIESConsolidated Statements of Comprehensive Income (Unaudited)

Quarters ended March 31, 2012 and 2011(In millions)


2012

2011

Net earnings

$ 22

$ 7

Other comprehensive income, net of tax

Foreign currency translation adjustments

22

31

Unrecognized pension and other post-retirement benefit costs

2

2

Comprehensive income attributable to Chemtura

$ 46

$ 40


3


Table of Contents

CHEMTURA CORPORATION AND SUBSIDIARIESConsolidated Balance Sheets

March 31, 2012 (Unaudited) and December 31, 2011(In millions, except par value data)

March 31,

December 31,

2012

2011

(unaudited)

ASSETS

CURRENT ASSETS

Cash and cash equivalents

$ 122

$ 180

Restricted cash

—

5

Accounts receivable, net

559

458

Inventories, net

603

542

Other current assets

138

136

Total current assets

1,422

1,321

NON-CURRENT ASSETS

Property, plant and equipment, net

760

752

Goodwill

177

174

Intangible assets, net

394

392

Other assets

215

216

Total assets

$ 2,968

$ 2,855

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES

Short-term borrowings

$ 63

$ 5

Accounts payable

210

173

Accrued expenses

181

194

Income taxes payable

8

18

Total current liabilities

462

390

NON-CURRENT LIABILITIES

Long-term debt

748

748

Pension and post-retirement health care liabilities

443

460

Other liabilities

221

211

Total liabilities

1,874

1,809

STOCKHOLDERS’ EQUITY

Common stock - $0.01 par value Authorized - 500.0 shares Issued - 100.2 shares atMarch 31, 2012 and 98.3 shares at December 31, 2011

1

1

Additional paid-in capital

4,348

4,353

Accumulated deficit

(2,927) (2,949)Accumulated other comprehensive loss

(322) (346)

Treasury stock at cost - 1.5 shares at March 31, 2012 and 2.0 shares at December 31,2011

(14) (22)

Total Chemtura stockholders’ equity

1,086

1,037

Non-controlling interest

8

9

Total stockholders’ equity

1,094

1,046

Total liabilities and stockholders’ equity

$ 2,968

$ 2,855


4


Table of Contents

CHEMTURA CORPORATION AND SUBSIDIARIESCondensed Consolidated Statements of Cash Flows (Unaudited)

Quarters ended March 31, 2012 and 2011(In millions)


Increase (decrease) in cash

2012

2011

CASH FLOWS FROM OPERATING ACTIVITIES

Net earnings

$ 22

$ 7

Adjustments to reconcile net earnings to net cash used in operating activities:

Impairment charges

1

2


33

37

Stock-based compensation expense

7

8


1

1

Changes in estimates related to expected allowable claims

2

—

Equity income

(1) —

Changes in assets and liabilities, net of assets acquired and liabilities assumed:

Accounts receivable

(94) (83)Inventories

(53) (65)

Accounts payable

34

23

Pension and post-retirement health care liabilities

(19) (15)Other

(22) (27)

Net cash used in operating activities

(89) (112) CASH FLOWS FROM INVESTING ACTIVITIES

Payments for acquisitions

—

(30)Capital expenditures

(29) (23)

Net cash used in investing activities

(29) (53) CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from ABL Facility, net

59

73

(Payments on) proceeds from other short term borrowings, net

(1) 1

Net cash provided by financing activities

58

74

CASH AND CASH EQUIVALENTS

Effect of exchange rates on cash and cash equivalents

2

3

Change in cash and cash equivalents

(58) (88)Cash and cash equivalents at beginning of period

180

201

Cash and cash equivalents at end of period

$ 122

$ 113


5


Table of Contents

CHEMTURA CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1) NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations Chemtura Corporation, together with our consolidated subsidiaries is dedicated to delivering innovative, application-focused specialtychemical and consumer product offerings. Our corporate headquarters is located at 1818 Market Street, Suite 3700, Philadelphia, PA19103. Our principal executive offices are located at 1818 Market Street, Suite 3700, Philadelphia, PA 19103 and at 199 BensonRoad, Middlebury, CT 06749. We operate in a wide variety of end-use industries including agriculture, automotive, construction,electronics, lubricants, packaging, plastics for durable and non-durable goods, pool and spa chemicals, and transportation. When we use the terms “Corporation,” “Company,” “Chemtura,” “Registrant,” “We,” “Us” and “Our,” unless otherwise indicated orthe context otherwise requires, we are referring to Chemtura Corporation and our consolidated subsidiaries. We are the successor to Crompton & Knowles Corporation (“Crompton & Knowles”), which was incorporated in Massachusetts in1900 and engaged in the manufacture and sale of specialty chemicals beginning in 1954. Crompton & Knowles traces its roots toCrompton Loom Works incorporated in the 1840s. We expanded the specialty chemical business through acquisitions in the UnitedStates and Europe, including the 1996 acquisition of Uniroyal Chemical Company, Inc. (“Uniroyal”), the 1999 merger with WitcoCorporation (“Witco”) and the 2005 acquisition of Great Lakes Chemical Corporation (“Great Lakes”). The information in the foregoing Consolidated Financial Statements for the quarters ended March 31, 2012 and 2011 is unaudited butreflects all adjustments which, in the opinion of management, are necessary for a fair presentation of the results of operations for theinterim periods presented. All such adjustments are of a normal recurring nature, except as otherwise disclosed in the accompanyingnotes to our Consolidated Financial Statements. Basis of Presentation The accompanying Consolidated Financial Statements include the accounts of Chemtura and our wholly-owned and majority-ownedsubsidiaries that we control. Other affiliates in which we have a 20% to 50% ownership interest or a non-controlling majority interestare accounted for in accordance with the equity method. Other investments in which we have less than 20% ownership are recorded atcost. All significant intercompany balances and transactions have been eliminated in consolidation. Our Consolidated Financial Statements have been prepared in conformity with U.S. generally accepted accounting principles(“GAAP”), which require us to make estimates and assumptions that affect the reported amounts of assets and liabilities anddisclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues andexpenses during the reporting period. Actual results could differ from these estimates. Certain prior year amounts have been reclassified to conform to the current year’s presentation. These changes did not have a materialimpact on previously reported results of operations, cash flows or financial position. We operated as a debtor-in-possession (“DIP”) under the protection of the United States Bankruptcy Court for the Southern District ofNew York (the “Bankruptcy Court”) from March 18, 2009 (the “Petition Date”) through November 10, 2010 (the “Effective Date”). From the Petition Date through the Effective Date, our Consolidated Financial Statements were prepared in accordance withAccounting Standards Codification (“ASC”) Section 852-10-45, Reorganizations — Other Presentation Matters (“ASC 852-10-45”)which requires that financial statements, for periods during the pendency of our voluntary petitions for relief under Chapter 11 of Title11 of the United States Code (the “Chapter 11”) filings, distinguish transactions and events that are directly associated with thereorganization from the ongoing operations of the business. Accordingly, certain income, expenses, realized gains and losses andexpenses for losses that were realized or incurred in the Chapter 11 cases were recorded in changes in estimates related to expectedallowable claims and reorganization items, net in our Consolidated Statements of Operations.

The interim Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notesincluded in our Annual Report on Form 10-K for the period ended December 31, 2011. The consolidated results of operations for thequarter ended March 31, 2012 are not necessarily indicative of the results expected for the full year.

6


Table of Contents

Accounting Policies and Other Items Cash and cash equivalents include bank term deposits with original maturities of three months or less. Included in cash and cashequivalents in our Consolidated Balance Sheets at both March 31, 2012 and December 31, 2011 is $1 million of restricted cash that isrequired to be on deposit to support certain letters of credit and performance guarantees, the majority of which will be settled withinone year. Included in our restricted cash balance at December 31, 2011 is $5 million of cash on deposit for the settlement of disputedbankruptcy claims that existed at the Effective Date. Included in accounts receivable are allowances for doubtful accounts of $20 million as of March 31, 2012 and December 31, 2011. During the quarters ended March 31, 2012 and 2011, we made interest payments of approximately $23 million. During the quartersended March 31, 2012 and 2011, we made payments for income taxes (net of refunds) of $12 million and $4 million, respectively. Accounting Developments In May 2011, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2011-04, Amendments to Achieve Common FairValue Measurement and Disclosure Requirements in U.S. GAAP and IFRSs (“ASU 2011-04”). ASU 2011-04 amends U.S. GAAP toconform it with fair value measurement and disclosure requirements in International Financial Reporting Standards (“IFRS”). Theamendments in ASU 2011-04 changed the wording used to describe the requirements in U.S. GAAP for measuring fair value and fordisclosing information about fair value measurements. The provisions of ASU 2011-04 are effective for the first reporting period(including interim periods) beginning after December 15, 2011. The adoption of this standard did not have a material impact on ourresults of operations, financial condition or disclosures. In June 2011, the FASB issued ASU No. 2011-05, Presentation of Comprehensive Income (“ASU 2011-05”). ASU 2011-05 requiresthe presentation of comprehensive income, the components of net income and the components of other comprehensive income eitherin a single continuous statement of comprehensive income or in two separate but consecutive statements. In December 2011, theFASB issued Accounting Standards Update No. 2011-12, Deferral of the Effective Date for Amendments to the Presentation ofReclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05 ( “ASU2011-12”). ASU 2011-12 defers the effective date of the requirement in ASU 2011-05 to disclose on the face of the financialstatements the effects of reclassifications out of accumulated other comprehensive income on the components of net income and othercomprehensive income. All other requirements of ASU 2011-05 are not affected by ASU 2011-12. The provisions of ASU 2011-05are effective for the first reporting period (including interim periods) beginning after December 15, 2011. The adoption of thisstandard did not have a material financial statement impact as it only addressed the presentation of our financial statements. In September 2011, the FASB issued ASU No. 2011-08, Intangibles — Goodwill and Other (Topic 350): Testing Goodwill forImpairment. The guidance in ASU 2011-08 is intended to reduce complexity and costs by allowing an entity the option to make aqualitative evaluation about the likelihood of goodwill impairment to determine whether it should calculate the fair value of areporting unit. The amendment also improved previous guidance by expanding upon the examples of events and circumstances that anentity should consider between annual impairment tests in determining whether it is more likely than not that the fair value of areporting unit is less than its carrying amount. The provisions of this ASU are effective for annual and interim goodwill impairmenttests performed for fiscal years beginning after December 15, 2011, with early adoption permitted. The adoption of this guidance willnot have a material impact on our results of operations or financial condition. In September 2011, the FASB issued ASU No. 2011-09, Compensation—Retirement Benefits Multiemployer Plans (Subtopic 715-80).The guidance in ASU 2011-09 assists users of financial statements to assess the potential future cash flow implications relating to anemployer’s participation in multiemployer pension plans. The disclosures will indicate the financial health of all of the significantplans in which the employer participates and assist a financial statement user to access additional information that is available outsidethe financial statements. The provisions of the ASU 2011-09 are effective for annual periods for fiscal years ending afterDecember 15, 2011, with early adoption permitted. The adoption of this guidance did not have a material impact on our results ofoperations or financial condition.

7


Table of Contents 2) RESTRUCTURING ACTIVITIES Corporate Restructuring Programs On April 30, 2012, our Board of Directors (the “Board”) approved a restructuring plan providing for, among other things, the closureof our Industrial Performance Product segment’s antioxidants manufacturing facility in Pedrengo, Italy. The Board also approvedactions to improve the operating effectiveness of certain global corporate functions. This plan is expected to achieve significant gainsin efficiency and costs. The plant closure is expected to be completed by the first quarter of 2013. The restructuring plan isanticipated to generate cash savings of approximately $15 million in 2013. We anticipate recording a pre-tax charge of approximately$30 million in the second quarter of 2012 for accelerated depreciation of property, plant and equipment, asset retirement obligations,severance and related costs with the balance of the costs being expensed as incurred through 2013. The total cost of the restructuringplan is estimated to be approximately $40 million of which approximately $6 million will consist of non-cash charges, for a net cashcost of approximately $34 million. In November 2011, our Board approved a restructuring plan intended to make Chemtura AgroSolutions more cost efficient bycentralizing certain functions regionally and consolidating laboratory activities in North America. Costs related to this plan wereimmaterial for the quarter ended March 31, 2012. Reorganization Initiatives On January 25, 2010, our Board approved an initiative involving the consolidation and idling of certain assets within the Great LakesSolutions business operations in El Dorado, Arkansas, which was approved by the Bankruptcy Court on February 23, 2010. During2010 and 2011, the demand for brominated products used in electronic applications grew significantly and it became evident that wewould need to produce larger quantities of bromine than were projected when we formulated our consolidation plan. In addition, inthe first quarter of 2011, our joint venture partner informed us that they would exercise their right to purchase our interest in ourTetrabrom joint venture in the Middle East that supplies a brominated flame retardant to us. While under the terms of the joint ventureagreement, the purchaser is obligated to continue to supply the current volumes of the brominated flame retardant to us for two yearsfollowing the acquisition, we needed to plan for the ultimate production of this product once supply from the joint venture terminated. Our analysis indicated that the most cost effective source of the additional bromine we require is to continue to operate many of thebromine assets we had planned to idle and to invest to improve their operating efficiency. In light of this analysis, on April 20, 2011,our Board confirmed that we should defer a portion of the El Dorado restructuring plan and continue to operate certain of the bromineand brine assets that were planned to be idled. The sale of our 50% interest in Tetrabrom Technologies Ltd. was completed inNovember 2011. As a result of our reorganization initiatives, we recorded pre-tax charges of $1 million for the quarter ended March 31, 2011, primarilyfor accelerated depreciation. The amounts accrued for all of our reorganization initiatives and corporate restructuring programs is less than $1 million at March 31,2012 and $1 million at December 31, 2011 and were included in accrued expenses. 3) INVENTORIES Components of inventories are as follows:

March 31,

December 31,

(In millions)

2012

2011

Finished goods

$ 401

$ 348

Work in process

46

43

Raw materials and supplies

156

151

$ 603

$ 542

Included in the above net inventory balances are inventory obsolescence reserves of approximately $18 million at March 31, 2012 andDecember 31, 2011.

8


Table of Contents

4) PROPERTY, PLANT AND EQUIPMENT

March 31,

December 31,

(In millions)

2012

2011

Land and improvements

$ 81

$ 85

Buildings and improvements

243

240

Machinery and equipment

1,266

1,238

Information systems equipment

188

175

Furniture, fixtures and other

32

31

Construction in progress

123

121

1,933

1,890

Less: accumulated depreciation

(1,173) (1,138)

$ 760

$ 752

Depreciation expense amounted to $24 million and $26 million for the quarters ended March 31, 2012 and 2011, respectively.Depreciation expense included accelerated depreciation of certain fixed assets associated with our restructuring programs of $1million for the quarter ended March 31, 2011. 5) GOODWILL AND INTANGIBLE ASSETS Our goodwill balance was $177 million at March 31, 2012 and $174 million at December 31, 2011. The goodwill is allocated entirelyto the Industrial Performance Products segment. The goodwill balance at March 31, 2012 and December 31, 2011 reflectedaccumulated impairments of $90 million. We have elected to perform our annual goodwill impairment procedures for all of our reporting units in accordance with ASCSubtopic 350-20, Intangibles — Goodwill and Other - Goodwill (“ASC 350-20”) as of July 31, or sooner, if events occur orcircumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. We estimatethe fair value of our reporting units utilizing income and market approaches through the application of discounted cash flow andmarket comparable methods (Level 3 inputs as described in Note 13 — Financial Instruments and Fair Value Measurements). Theassessment is required to be performed in two steps: step one to test for a potential impairment of goodwill and, if potentialimpairments are identified, step two to measure the impairment loss through a full fair valuing of the assets and liabilities of thereporting unit utilizing the acquisition method of accounting. We concluded that no goodwill impairment existed in any of ourreporting units based on the annual review as of July 31, 2011. We continually monitor and evaluate business and competitive conditions that affect our operations and reflects the impact of thesefactors in our financial projections. If permanent or sustained changes in business or competitive conditions occur, they can lead torevised projections that could potentially give rise to impairment charges. Our intangible assets (excluding goodwill) are comprised of the following:

March 31, 2012

December 31, 2011

(In millions)

Gross Cost

Accumulated Amortization

Net Intangibles

Gross Cost


Net Intangibles

Patents

$ 131

$ (73) $ 58

$ 128

$ (70) $ 58

Trademarks

264

(74) 190

262

(71) 191

Customer relationships

147

(52) 95

146

(50) 96

Production rights

46

(29) 17

46

(28) 18

Other

77

(43) 34

70

(41) 29

Total

$ 665

$ (271) $ 394

$ 652

$ (260) $ 392

The increase in gross intangible assets since December 31, 2011 is primarily due to additions of $8 million and foreign currencytranslation of $5 million. Amortization expense related to intangible assets amounted to $9 million and $11 million for the quarters ended March 31, 2012 and2011, respectively.

9


Table of Contents

6) DEBT Our debt is comprised of the following:

March 31,

December 31,

(In millions)

2012

2011

7.875% Senior Notes due 2018

$ 452

$ 452

Term Loan due 2016

293

293

ABL Facility

59

—

Other borrowings

7

8

Total debt

811

753

Less: ABL Facility

(59) —

Less: Other short-term borrowings

(4) (5)

Long-term debt

$ 748

$ 748

Financing Facilities On August 27, 2010, we completed a private placement offering under Rule 144A of $455 million aggregate principal amount of7.875% senior notes due 2018 (the “Senior Notes”) at an issue price of 99.269% in reliance on an exemption pursuant toSection 4(2) of the Securities Act of 1933. We also entered into a senior secured term facility credit agreement due 2016 (the “TermLoan”) with Bank of America, N.A., as administrative agent, and other lenders party thereto for an aggregate principal amount of$295 million with an original issue discount of 1%. The Term Loan permits us to increase the size of the facility by up to $125million. On November 10, 2010, we entered into a five-year senior secured revolving credit facility available through 2015 (the “ABLFacility”) for an amount up to $275 million, subject to availability under a borrowing base (with a $125 million letter of creditsub-facility). The ABL Facility permits us to increase the size of the facility by up to $125 million subject to obtaining lendercommitments to provide such increase. At March 31, 2012, we had $59 million of borrowings under the ABL Facility and $15million of outstanding letters of credit (primarily related to insurance obligations, environmental obligations and banking creditfacilities), which utilizes available capacity under the facility. At December 31, 2011, we had no borrowings under the ABL Facility,but we had $15 million of outstanding letters of credit. At March 31, 2012 and December 31, 2011, we had approximately $201million of undrawn availability under the ABL Facility. These facilities contain covenants that limit, among other things, our ability to enter into certain transactions, such as creating liens,incurring additional indebtedness or repaying certain indebtedness, making investments, paying dividends, and entering intoacquisitions, dispositions and joint ventures. The Term Loan requires that we meet certain quarterly financial maintenance covenantsincluding a maximum Secured Leverage Ratio (as defined in the agreement) of 2.5:1.0 and a minimum Consolidated InterestCoverage Ratio (as defined in the agreement) of 3.0:1.0. The ABL Facility contains a springing financial covenant requiring aminimum trailing 12-month fixed charge coverage ratio (as defined in the agreement) of 1.1 to 1.0 at all times during any period fromthe date when the amount available for borrowings under the ABL Facility falls below the greater of (i) $34 million and (ii) 12.5% ofthe aggregate commitments until such date such available amount has been equal to or greater than the greater of (i) $34 million and(ii) 12.5% of the aggregate commitments for 45 consecutive days. As of March 31, 2012, we were in compliance with the covenantrequirements of these financing facilities.

Accounts Receivable Financing Facility On October 26, 2011, certain of our European subsidiaries (the “Sellers”) entered into a trade receivables financing facility (the “A/RFinancing Facility”) with GE FactoFrance SAS as purchaser (the “Purchaser”). Pursuant to the A/R Financing Facility, and subject tocertain conditions stated therein, the Purchaser has agreed to purchase from the Sellers, on a revolving basis, certain trade receivablesup to a maximum amount outstanding at any time of €68 million (approximately $90 million). The A/R Financing Facility isuncommitted and has an indefinite term. Since availability under the A/R Financing Facility is expected to vary depending on thevalue of the Seller’s eligible trade receivables, the Sellers’ availability under the A/R Financing Facility may increase or decrease fromtime to time. The monthly financing fee on the drawn portion of the A/R Financing Facility is the applicable Base Rate plus 1.50%. In addition, the A/R Financing Facility is subject to a minimum commission on the annual volume of transferred receivables. We hadno outstanding borrowings under the A/R Financing Facility, for the period ending March 31, 2012 and December 31, 2011.

10


Table of Contents

7) INCOME TAXES We reported an income tax benefit of $1 million and expense of $3 million for the quarters ended March 31, 2012 and 2011,respectively. We have offset our current year-to-date U.S. income with net operating loss carryforwards and reduced the associatedvaluation allowance. We will continue to adjust our tax provision through the establishment or reduction of non-cash valuationallowances until we determine that it is more-likely than not that the net deferred tax assets associated with our U.S. operations will beutilized. We have net liabilities related to unrecognized tax benefits of $49 million and $46 million at March 31, 2012 and December 31, 2011,respectively. The increase is primarily due to currency fluctuation. We recognize interest and penalties related to unrecognized tax benefits as income tax expense. Accrued interest and penalties areprimarily included within other liabilities in our Consolidated Balance Sheet. We believe it is reasonably possible that our unrecognized tax benefits may decrease by approximately $22 million within the nextyear. This reduction may occur due to the expiration of the statute of limitations or conclusion of examinations by tax authorities. Wefurther expect that the amount of unrecognized tax benefits will continue to change as a result of ongoing operations, the outcomes ofaudits and the expiration of the statue of limitations. This change is not expected to have a significant impact on our financialcondition. 8) ACCUMULATED OTHER COMPREHENSIVE LOSS The components of accumulated other comprehensive loss (“AOCL”), net of tax at March 31, 2012 and December 31, 2011, are asfollows:

March 31,

December 31,

(In millions)

2012

2011


$ 75

$ 53

Unrecognized pension and other post-retirement benefit costs

(397) (399) Accumulated other comprehensive loss

$ (322) $ (346)

9) EARNINGS PER COMMON SHARE The computation of basic earnings per common share is based on the weighted average number of common shares outstanding. Thecomputation of diluted earnings per common share is based on the weighted average number of common and common shareequivalents outstanding. The following is a reconciliation of the shares used in the computation of earnings per share:


(In millions)

2012

2011

Weighted average shares outstanding - Basic

98.3

100.1

Dilutive effect of common share equivalents

0.8

—

Weighted average shares outstanding - Diluted

99.1

100.1

At March 31, 2012 and 2011, 0.3 million performance based restricted stock units (“PSU’s”) and 1 million bonus units with aperformance criteria, respectively, were excluded from the calculation of diluted earnings per share because the specified performancecriteria for the vesting of these units had not yet been met. The PSU’s and bonus units could be dilutive in the future if the specifiedperformance criteria are met. On October 18, 2011, we announced that our Board had authorized us to repurchase up to $50 million of our common stock over thenext twelve months. The shares are expected to be repurchased from time to time through open market purchases. The program,which does not obligate us to repurchase any particular amount of common stock, may be modified or suspended at any time at theBoard’s discretion. The manner, price, number and timing of such repurchases, if any, will be subject to a variety of factors, includingmarket conditions and the applicable rules and regulations of the Securities and Exchange Commission (“SEC”). As of March 31,2012, we had cumulatively purchased 2.0 million shares for $22 million. No purchases were made during the first quarter of 2012.

11


Table of Contents

10) STOCK INCENTIVE PLANS In 2010, we adopted the Chemtura Corporation 2010 Long-Term Incentive Plan (the “2010 LTIP”), which was approved by theBankruptcy Court and became effective upon our emergence from Chapter 11. The 2010 LTIP provides for grants of nonqualifiedstock options (“NQOs”), incentive stock options (“ISOs”), stock appreciation rights, dividend equivalent rights, stock units, bonusstock, performance awards, share awards, restricted stock, time-based restricted stock units (“RSUs”) and performance-based RSUs. The 2010 LTIP provides for the issuance of a maximum of 11 million shares. NQOs and ISOs may be granted under the 2010 LTIP atprices equal to the fair market value of the underlying common shares on the date of the grant. All outstanding stock options willexpire not more than ten years from the date of the grant. As of March 31, 2012, grants authorized under the 2010 LTIP included the2009 Emergence Incentive Plan (the “2009 EIP”), the 2010 Emergence Incentive Plan (the “2010 EIP”), the 2011 long-term incentiveawards (the “2011 LTIA”), the 2012 long-term incentive awards (the “2012 LTIA”) and the 2010 Emergence Award Plan (the “2010EAP”), as well as other grants made to the Board. All grants of NQOs have an exercise price equal to the fair market value of theunderlying common stock at the date of grant. Stock-based compensation expense was $7 million and $8 million for the quarters ended March 31, 2012 and March 31, 2011,respectively. Stock-based compensation expense was primarily reported in SG&A. Stock Option Plans In March 2012, our Board approved the grant of 0.8 million NQOs under our 2012 LTIA. These option vest ratably over a three-yearperiod. In March 2011, under the 2010 EIP, we granted 0.8 million NQOs. One third vested immediately, one third vested on March 31, 2012and one third vests on March 31, 2013. In March 2011, our Board approved the grant of 1.4 million NQOs under our 2011 LTIA. These options will vest ratably over athree-year period. We use the Black-Scholes option-pricing model to determine the fair value of NQOs. We have elected to recognize compensationcost for awards of NQOs equally over the requisite service period for each separately vesting tranche, as if multiple awards weregranted. Using this method, the weighted average fair value of stock options granted during the quarters ended March 31, 2012 andMarch 31, 2011 was $8.14 and $8.40, respectively. Total remaining unrecognized compensation expense associated with unvested NQOs at March 31, 2012 was $13 million, which willbe recognized over the weighted average period of approximately 2 years.

Restricted Stock Units In March 2012, our Board approved the grant of 0.6 million time-based RSU’s under our 2012 LTIA. These RSU’s will vest ratablyover a three-year period. In March 2012, the Board approved the grant of 0.3 million performance shares under the 2012 LTIA. The share grant is subject to aperformance multiplier of up to 2 times the targeted award. The performance measurement period is the three calendar year periodending December 31, 2014, the performance share metric used will be our relative total shareholder return against the companiescomprising the Russell 3000 Index, and the performance shares will be settled on March 1, 2015. We used the Monte-Carlosimulation model to determine the fair value of the performance shares. Using this method, the average per share fair value of theseawards was $25.38. In March 2011, under the 2010 EIP, we granted 0.4 million time-based RSU’s with a fair market value of the quoted closing price ofour stock on that date. One third vested immediately, one third vested on March 31, 2012 and one third vests on March 31, 2013. In March 2011, our Board approved the grant of 0.4 million time-based RSU’s under our 2011 LTIA. These RSU’s vest ratably overa three-year period. In March 2011, we established the initial allocations under the 2010 EAP, which was previously approved by the Bankruptcy Courtand provided designated participants with the opportunity to share in a pool of up to 1 million fully vested shares of

12


Table of Contents

common stock. The portion of the 2010 EAP pool to be distributed would be determined by Chemtura’s consolidated earnings beforeinterest, taxes, depreciation and amortization expense (“EBITDA”) during the fiscal year 2011. In March 2012, the compensationcommittee approved the allocation of specified percentage interests in the 2010 EAP pool among designated participants, includingour named executive officers. Under the formula established in bankruptcy, our 2011 consolidated EBITDA resulted in a payout of57% of the total 2010 EAP pool of 1 million shares, or 0.6 million shares, which were distributed to the participants in March 2012. In February 2011, we granted 0.1 million time-based RSU’s to non-employee directors with a fair market value of the quoted closingprice of our stock on that date. These RSU’s vest ratably over a two-year period. Total remaining unrecognized compensation expense associated with unvested time-based and performance based RSU’s at March 31,2012 was $19 million, which will be recognized over the weighted average period of approximately 3 years. 11) PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS Components of our defined benefit plans net periodic benefit (credit) cost for the quarters ended March 31, 2012 and 2011 are asfollows:

Defined Benefit Plans

Qualified

International and

Post-Retirement

U.S. Plans

Non-Qualified Plans

Health Care Plans




(In millions)

2012

2011

2012

2011

2012

2011

Service cost

$ —

$ —

$ 1

$ 1

$ —

$ —

Interest cost

11

12

5

5

1

1

Expected return on planassets

(14) (14) (5) (4) —

—

Amortization of priorservice cost

—

3

—

—

(1) —

Amortization of actuariallosses

4

—

—

—

1

(1)

Net periodic benefit cost

$ 1

$ 1

$ 1

$ 2

$ 1

$ —

We contributed $15 million to our U.S. qualified pension plans, $1 million to our U.S. non-qualified pension plans and $3 million toour international pension plans for the quarter ended March 31, 2012. Contributions to post-retirement health care plans for thequarter ended March 31, 2012 were $3 million. On November 18, 2009, the Bankruptcy Court entered an order (the “2009 OPEB Order”) approving, in part, our motion (the “2009OPEB Motion”) requesting authorization to modify certain post-retirement welfare benefits (the “OPEB Benefits”) under ourpost-retirement welfare benefit plans (the “OPEB Plans”), including the OPEB Benefits of certain Uniroyal salaried retirees (the“Uniroyal Salaried Retirees”). On April 5, 2010, the Bankruptcy Court entered an order denying the Uniroyal Salaried Retirees’motion to reconsider the 2009 OPEB Order based, among other things, on the Uniroyal Salaried Retirees’ failure to file a timelyobjection to the 2009 OPEB Motion. On April 8, 2010, the Uniroyal Salaried Retirees appealed the Bankruptcy Court’s April 5, 2010order and on April 14, 2010, sought a stay pending their appeal (the “Stay”) of the 2009 OPEB Order as to our right to modify theOPEB Benefits. On April 21, 2010, the Bankruptcy Court ordered us not to modify the Uniroyal Salaried Retirees’ OPEB Benefits,pending a hearing and decision as to the Stay. After consulting with the official committees of unsecured creditors and equity securityholders, we requested that the Bankruptcy Court have a hearing to decide, as a matter of law, whether we have the right to modify theOPEB Benefits of the Uniroyal Salaried Retirees as requested in the 2009 OPEB Motion. In November 2011, we reached anagreement in principle with a steering committee of the Uniroyal Salaried Retirees resolving all disputes concerning the 2009 OPEBMotion. On February 21, 2012, we filed a motion with the Bankruptcy Court seeking approval of a settlement stipulation with thesteering committee of the Uniroyal Salaried Retirees based upon the prior agreement in principle and authorizing us to implementchanges to the OPEB Benefits of all Uniroyal Salaried Retirees based upon the settlement stipulation and as a partial grant of the reliefrequested in the 2009 OPEB Motion. The Bankruptcy Court approved the motion at a hearing held on March 29, 2012. We are in theprocess of determining the impact and will communicate the changes to the participants in the second quarter of 2012. On May 9, 2011, one of our UK subsidiaries entered into definitive agreements with the trustees of the Great Lakes U.K. LimitedPension Plan (“UK Pension Plan”) over the terms of a “recovery plan” which provided for a series of additional cash contributions tobe made to reduce the underfunding over time. The agreements provided, among other things, for our UK subsidiary to make cashcontributions of £60 million (approximately $96 million) in just over a three year period, with the initial contribution of £30 million($49 million) made in the second quarter of 2011. The second contribution of £15 million ($24 million) is to be made in May 2012. The agreements also provided for the granting of both a security interest and a guarantee to support certain of the liabilities under theUK Pension Plan.Source: Chemtura CORP, 10-Q, May 01, 2012 Powered by Morningstar® Document Research℠

13


Table of Contents

There is also an evaluation being undertaken as to whether additional benefit obligations exist in connection with the equalization ofcertain benefits under the UK Pension Plan that occurred in the early 1990s. Based on the results of the evaluation to date, $8 millionof expense was recorded in the fourth quarter of 2011, which may be subject to adjustment as further information is gathered as part ofthe evaluation. Upon completion of the evaluation and the finalization of the liability with respect to additional benefit obligations,additional cash contributions to the UK Pension Plan may be required starting in 2013. There were no changes to the evaluationduring the first quarter of 2012. 12) DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES Our activities expose our earnings, cash flows and financial condition to a variety of market risks, including the effects of changes inforeign currency exchange rates, interest rates and energy prices. We maintain a risk management strategy that may utilize derivativeinstruments to mitigate risk against foreign currency movements. We do not enter into derivative instruments for trading orspeculative purposes. We have exposure to changes in foreign currency exchange rates resulting from transactions entered into by us and our foreignsubsidiaries in currencies other than their functional currency (primarily trade payables and receivables). We are also exposed tocurrency risk on intercompany transactions (including intercompany loans). We manage these currency risks on a consolidated basis,which allows us to net our exposure. Prior to our Chapter 11 filing we purchased foreign currency forward contracts to manage ourexposure. In February 2012, we purchased forward contracts to offset the effects of foreign currency on a receivable related to thesale of our 50% interest in Tetrabrom Technologies Ltd. in 2011 (see Note 15 — Acquisition and Divestitures for additionalinformation). 13) FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS Financial Instruments The carrying amounts for cash and cash equivalents, accounts receivable, other current assets, accounts payable and other currentliabilities, approximate their fair value because of the short-term maturities of these instruments. The fair value of debt is basedprimarily on quoted market values. The following table presents the carrying amounts and estimated fair values of material financial instruments used by us in the normalcourse of business:

As of March 31, 2012

As of December 31, 2011

Carrying

Fair

Carrying

Fair

(In millions)

Amount

Value

Amount

Value

Total debt

$ 811

$ 861

$ 753

$ 777

Fair Value Measurements We apply the provisions of ASC 820 with respect to our financial assets and liabilities that are measured at fair value within thefinancial statements on a recurring basis. ASC 820 specifies a hierarchy of valuation techniques based on whether the inputs to thosevaluation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, whileunobservable inputs reflect our market assumptions. The fair value hierarchy specified by ASC 820 is as follows:

• Level 1 — Quoted prices in active markets for identical assets and liabilities. • Level 2 — Quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and

liabilities in markets that are not active or other inputs that are observable or can be corroborated by observable marketdate.

• Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of

the assets and liabilities.

Level 1 fair value measurements in 2012 and 2011 included securities purchased in connection with the deferral of compensation, ourmatch and investment earnings related to the supplemental savings plan. These securities are considered our general assets untildistributed to the participants and are included in other assets in our Consolidated Balance Sheets. A corresponding liability isincluded in other liabilities at March 31, 2012 and December 31, 2011 in our Consolidated Balance

14


Table of Contents

Sheets. Quoted market prices were used to determine fair values of the Level 1 investments held in a trust with a third-partybrokerage firm. The fair value of the asset and corresponding liability was $1 million at March 31, 2012 and December 31, 2011. Level 2 fair value measurements are used to value our foreign currency forward contracts (see Note 15 — Acquisitions andDivestitures). For the quarter ended March 31, 2012, there were no transfers into or out of Levels 1 and 2. Level 3 fair value measurements are utilized in our impairment reviews of Goodwill (see Note 5 — Goodwill and Intangible Assets). Level 1, 2 and 3 fair value measurements are utilized for defined benefit plan assets in determining the funded status of our pensionand post-retirement benefit plan liabilities on an annual basis (at December 31).

14) ASSET RETIREMENT OBLIGATIONS We apply the provisions of ASC Topic 410, Asset Retirements and Environmental Obligations (“ASC 410”), which require companiesto make estimates regarding future events in order to record a liability for asset retirement obligations in the period in which a legalobligation is created. Such liabilities are recorded at fair value, with an offsetting increase to the carrying value of the relatedlong-lived assets. The fair value is estimated by discounting projected cash flows over the estimated life of the assets using our creditadjusted risk-free rate applicable at the time the obligation is initially recorded. In future periods, the liability is accreted to its presentvalue and the capitalized cost is depreciated over the useful life of the related asset. We also adjust the liability for changes resultingfrom revisions to the timing of future cash flows or the amount of the original estimate. Upon retirement of the long-lived asset, weeither settle the obligation for its recorded amount or incur a gain or loss. Our asset retirement obligations include estimates for all asset retirement obligations identified for our worldwide facilities. Our assetretirement obligations are primarily the result of legal obligations for the removal of leasehold improvements and restoration ofpremises to their original condition upon termination of leases at approximately 20 facilities; legal obligations to close approximately90 brine supply, brine disposal, waste disposal, and hazardous waste injection wells and the related pipelines at the end of their usefullives; and decommissioning and decontamination obligations that are legally required to be fulfilled upon closure of approximately 30of our manufacturing facilities. The following is a summary of the change in the carrying amount of the asset retirement obligations for the quarters ended March 31,2012 and 2011 and the net book value of assets related to the asset retirement obligations at March 31, 2012 and 2011:

Quarter ended March 31,

(In millions)

2012

2011

Asset retirement obligation balance at beginning of period

$ 21

$ 23

Accretion expense — cost of goods sold

—

1

Payments

(1) —

Asset retirement obligation balance at end of period

$ 20

$ 24

Net book value of asset retirement obligation assets at end of period

$ 1

$ 1

Depreciation expense for the quarters ended March 31, 2012 and 2011 was less than $1 million. At March 31, 2012 and December 31, 2011, $5 million and $6 million, respectively of asset retirement obligations were included inaccrued expenses and $15 million was included in other liabilities for both periods on the Consolidated Balance Sheet.

15


Table of Contents 15) ACQUISITIONS AND DIVESTITURES Acquisitions On January 26, 2011, we announced the formation of ISEM S.r.l. (“ISEM”), a strategic research and development alliance with IsagroS.p.A., which will provide us access to two commercialized products and accelerate the development and commercialization of newactive ingredients and molecules related to our Chemtura AgroSolutions segment. ISEM is a 50/50 joint venture between us andIsagro S.p.A. and is being accounted for as an equity method investment. Our investment in the joint venture was €20 million ($29million), which was made in January 2011. In addition, we and Isagro S.p.A. have agreed to jointly fund discovery and developmentefforts for ISEM, for approximately $2 million annually from each partner for five years. During 2011, we funded approximately $2million as planned. Funding our contributions will be done in part by reducing our planned direct research and development spending. On February 1, 2011, we announced the formation of DayStar Materials, LLC, a joint venture with UP Chemical Co. Ltd. that willmanufacture and sell high purity metal organic precursors for the rapidly growing LED market in our Industrial Engineered Productssegment. DayStar Materials, LLC is a 50/50 joint venture and is being accounted for as an equity method investment. We made cashcontributions of $6 million in 2011, in accordance with the joint venture agreement. Divestitures

Tetrabrom Joint Venture Divestiture

On November 28, 2011, we sold our 50% interest in Tetrabrom Technologies Ltd. for net consideration of $38 million. Theconsideration will be paid over a three year period beginning in April 2012. A payment of $9 million was received in April 2012. Apre-tax gain of $27 million was recorded on the sale in the fourth quarter of 2011. In February 2012, we purchased forward contractswith a notional amount of $38 million to reduce the risk of currency exposure related to the three annual installments of thisreceivable. These contracts matured in April 2012. Upon maturity, additional contracts were purchased to off set foreign currencyexposure on the remaining annual payments due through 2014. We use fair value accounting methods for these contracts and haverecorded a gain of less than $1 million reflecting the changes in the fair market value of these contracts in other (expense) income, netin our Consolidated Statement of Operations. The resulting net asset of the changes in fair market value of these contracts has beenaccounted for in other current assets and other long-term assets in our Consolidated Balance Sheet. 16) EMERGENCE FROM CHAPTER 11 On March 18, 2009 (the “Petition Date”) Chemtura and 26 of our U.S. affiliates (collectively the “U.S. Debtors” or the “Debtors”when used in relation to matters before August 8, 2010) filed voluntary petitions for relief under Chapter 11 of Title 11 of the UnitedStates Code (“Chapter 11”) in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”). On August 8, 2010, our Canadian subsidiary, Chemtura Canada Co/Cie (“Chemtura Canada”), filed a voluntary petition for reliefunder Chapter 11. On August 11, 2010, Chemtura Canada commenced ancillary recognition proceedings under Part IV of theCompanies’ Creditors Arrangement Act (the “CCAA”) in the Ontario Superior Court of Justice, (the “Canadian Court” and suchproceedings, the “Canadian Case”). The U.S. Debtors along with Chemtura Canada after it filed for Chapter 11 (collectively the“Debtors”) requested the Bankruptcy Court to enter an order jointly administering Chemtura Canada’s Chapter 11 case with thepreviously filed Chapter 11 cases and appoint Chemtura Canada as the “foreign representative” for the purposes of the CanadianCase. Such orders were granted on August 9, 2010. On August 11, 2010, the Canadian Court entered an order recognizing theChapter 11 cases as a “foreign proceedings” under the CCAA. On November 3, 2010, the Bankruptcy Court entered an order confirming the Debtors’ plan of reorganization (the “Plan”). OnNovember 10, 2010 (the “Effective Date”), the Debtors substantially consummated their reorganization through a series oftransactions contemplated by the Plan and the Plan became effective. In March 2011, we made a supplemental distribution to holders of previously issued common stock (“Holders of Interests”) asauthorized by the Bankruptcy Court. The supplemental distribution included payments of $3 million in stock, valuing the stock at thePlan valuation.

16


Table of Contents

On June 10, 2011, we filed a closing report in Chemtura Canada’s Chapter 11 case and a motion seeking a final decree closing thatChapter 11 case. On June 23, 2011, the Bankruptcy Court granted our motion and entered a final decree closing the Chapter 11 caseof Chemtura Canada. In August 2011, we made a second supplemental distribution to Holders of Interests as authorized by the Bankruptcy Court. Thesupplemental distribution included payments of $2 million in cash and $12 million in stock, valuing the stock at the Plan valuation. On December 1, 2011, we filed a motion requesting entry of an order granting a final decree closing the Chapter 11 cases of 22Debtors (the “Fully Administered Debtors”):

• A&M Cleaning Products LLC

• Crompton Colors Incorporated

• Laurel Industries Holdings, Inc.• Aqua Clear Industries, LLC

• Crompton Holding Corporation

• Monochem, Inc.

• ASEPSIS, Inc.

• Crompton Monochem, Inc.

• Naugatuck Treatment Company• ASCK, Inc.

• Great Lakes Chemical Global, Inc.

• Recreational Water Products, Inc.

• BioLab Company Store, LLC

• GT Seed Treatment, Inc.

• Weber City Road LLC• Biolab Franchise Company, LLC

• HomeCare Labs, Inc

• WRL of Indiana, Inc.

• BioLab Textile Additives, LLC

• ISCI, Inc.

• CNK Chemical Realty Corporation

• Kem Manufacturing Corporation

On December 15, 2011, the Bankruptcy Court entered an order granting a final decree closing the Fully Administered Debtors’Chapter 11 cases. On January 5, 2012, we filed a motion with the Bankruptcy Court seeking authority to make a third supplemental distribution toHolders of Interests, which was granted by the Bankruptcy Court on January 26, 2012. The Bankruptcy Court extended the time tomake the third supplemental distribution by order dated March 2, 2012 and authorized an increase to the third supplementaldistribution by order dated March 8, 2012. The third supplemental distribution was made in March 2012 and included payments of $3million in cash and $20 million in stock, valuing the stock at the Plan valuation. On February 7, 2012, we filed a motion requesting entry of an order granting a final decree closing the Chapter 11 cases forBio-Lab, Inc. and GLCC Laurel, LLC, which was granted by the Bankruptcy Court on February 22, 2012. On March 16, 2012, we filed a motion requesting entry of an order granting a final decree closing the Chapter 11 cases for GreatLakes Chemical Corporation and Uniroyal Chemical Company Limited (Delaware), which was granted by the Bankruptcy Court onMarch 29, 2012. As of March 31, 2012, the Bankruptcy Court has entered orders granting final decrees closing all of the Debtors’ Chapter 11 casesexcept the Chapter 11 case of Chemtura Corporation. At March 31, 2012 and December 31, 2011 the remaining undisbursed amount in the Disputed Claims Reserve was $2 million and$29 million, respectively. The decrease in the Disputed Claims Reserve was due to settlement payments resolving Disputed Claims of$4 million and supplemental distributions to Holders of Interests of $23 million. Any remaining Disputed Claims, to the extent theyare ultimately allowed by the Bankruptcy Court, will be satisfied (to the extent allowed and not covered by insurance) from theDisputed Claims Reserve. The Reorganization Items, net recorded in our Consolidated Statements of Operations related to our Chapter 11 cases comprise thefollowing:


(In millions)

2012

2011

Professional fees

$ 1

$ 6

Claim settlements, net (a)

1

1

Total reorganization items, net

$ 2

$ 7

(a) Represents the difference between the settlement amount of certain pre-petition obligations (obligations settled in commonstock are based on the fair value of our stock at the issuance date) and the corresponding carrying value of the recordedliabilities.

17


Table of Contents

17) LEGAL PROCEEDINGS AND CONTINGENCIES We are involved in claims, litigation, administrative proceedings and investigations of various types in a number of jurisdictions. Anumber of such matters involve, or may involve, claims for a material amount of damages and relate to or allege environmentalliabilities, including clean-up costs associated with hazardous waste disposal sites, natural resource damages, property damage andpersonal injury. As a result of the Chapter 11 cases, substantially all prepetition litigation and claims against us and our subsidiaries that were Debtorsin the Chapter 11 cases have been discharged and permanently enjoined from further prosecution and are described below under thesubheading “Prepetition Litigation and Claims Discharged Under the Plan.” Claims and legal actions asserted against non-Debtors or relating to events occurring after the Effective Date, certain regulatory andadministrative proceedings and certain contractual and other claims assumed with the authorization of the Bankruptcy Court, were notdischarged in the Chapter 11 cases and are described below under the subheading “Litigation and Claims Not Discharged Under thePlan.” Prepetition Litigation and Claims Discharged Under the Plan

Chapter 11 Plan and Establishment of Claims Reserves

On March 18, 2009, the Debtors filed voluntary petitions in the Bankruptcy Court seeking relief under Chapter 11. The Debtors’Chapter 11 cases have been assigned to the Honorable Robert E. Gerber and are being jointly administered as Case No. 09-11233. The Debtors continued to operate their business as debtors in possession under the jurisdiction of the Bankruptcy Court until theiremergence from Chapter 11 on November 10, 2010. Pursuant to the Plan, and by orders of the Bankruptcy Court dated September 24, 2010, October 19, 2010 and October 29, 2010, theDebtors established the Diacetyl Reserve, the Environmental Reserve and the Disputed Claims Reserve, each as defined in the Plan,on account of claims that were not yet allowed in the Chapter 11 cases as of the Effective Date, including proofs of claim assertedagainst the Debtors that were subject to objection as of the Effective Date (the “Disputed Claims”). The Diacetyl Reserve wasapproved by the Bankruptcy Court in the amount of $7 million, comprised of separate segregated reserves, and has since been reducedas settlement agreements have been approved by the Bankruptcy Court. The Environmental Reserve was approved by the BankruptcyCourt in the amount of $38 million, a portion of which was further segregated into certain separate reserves established to account forsettlements that were pending Bankruptcy Court approval, and has since been reduced as settlement agreements have been approvedby the Bankruptcy Court. The Disputed Claims Reserve was approved by the Bankruptcy Court in the amount of $42 million, plusadditional segregated individual reserves for certain creditors’ claims in the aggregate amount of approximately $30 million, all ofwhich have been reduced as settlement agreements have been approved by the Bankruptcy Court. On June 24, 2011, we resolved the final disputed Environmental Claim. As a result, under the Plan, the amounts remaining in theEnvironmental Reserve were transferred to the Disputed Claims Reserve. Any remaining Disputed Claims, to the extent they areultimately allowed by the Bankruptcy Court, will be satisfied (to the extent allowed and not covered by insurance) from the DisputedClaims Reserve, and holders of the Disputed Claims are permanently enjoined under the Plan from pursuing their claims against us. As of March 31, 2012, as a result of distributions pursuant to the Plan, the remaining undisbursed amount in the Disputed ClaimsReserve was $2 million. As we complete the process of evaluating and/or resolving the Disputed Claims, appropriate adjustments to our ConsolidatedFinancial Statements will be made. Adjustments may also result from actions of the Bankruptcy Court, settlement negotiations, andother events. For additional information, see Note 16 — Emergence from Chapter 11 in our Notes to Consolidated FinancialStatements. Litigation and Claims Not Discharged Under the Plan

Environmental Liabilities

We are involved in environmental matters of various types in a number of jurisdictions. A number of such matters involve claims formaterial amounts of damages and relate to or allege environmental liabilities, including clean up costs associated with hazardouswaste disposal sites and natural resource damages. The Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (“CERCLA”), and comparablestate statutes impose strict liability upon various classes of persons with respect to the costs associated with the

18


Table of Contents

investigation and remediation of waste disposal sites. Such persons are typically referred to as “Potentially Responsible Parties” orPRPs. Chemtura and several of our subsidiaries have been identified by federal, state or local governmental agencies or by otherPRPs, as a PRP at various locations in the United States. Because in certain circumstances these laws have been construed toauthorize the imposition of joint and several liability, the Environmental Protection Agency (“EPA”) and comparable state agenciescould seek to recover all costs involving a waste disposal site from any one of the PRPs for such site, including Chemtura, despite theinvolvement of other PRPs. In many cases, we are one of a large number of PRPs with respect to a site. In a few instances, we are thesole or one of only a handful of PRPs performing investigation and remediation. Where other financially responsible PRPs areinvolved, we expect that any ultimate liability resulting from such matters will be apportioned between us and such other parties. Inaddition, we are involved with environmental remediation and compliance activities at some of our current and former sites in theUnited States and abroad. Each quarter, we evaluate and review estimates for future remediation and other costs to determine appropriate environmental reserveamounts. For each site where the cost of remediation is probable and reasonably estimable, we determine the specific measures thatare believed to be required to remediate the site, the estimated total cost to carry out the remediation plan, the portion of the totalremediation costs to be borne by us and the anticipated time frame over which payments toward the remediation plan will occur. Atsites where we expect to incur ongoing operation and maintenance expenditures, we accrue on an undiscounted basis for a period ofgenerally 10 years those costs which we believe are probable and reasonably estimable. On June 6, 2011, our subsidiary Great Lakes Chemical Corporation received a proposed Consent Administrative Order (“CAO”) fromthe Arkansas Department of Environmental Quality alleging violations of the Resource Conservation and Recovery Act in conjunctionwith its facility located in El Dorado, Arkansas. The proposed CAO included a civil penalty. While we believe that a mutuallyacceptable settlement amount will be negotiated with the agency, a reasonable estimate of the settlement amount cannot be made atthis time. In any event, the ultimate settlement with the agency will not have a material effect on our results of operations, financialcondition or cash flows. The total amount accrued for environmental liabilities as of March 31, 2012 and December 31, 2011, was $88 million. At March 31,2012 and December 31, 2011, $18 million of these environmental liabilities were reflected as accrued expenses and $70 million werereflected as other liabilities. We estimate that the reasonably possible ongoing environmental liabilities could range up to $102million at March 31, 2012. Our accruals for environmental liabilities include estimates for determinable clean-up costs. We recordeda pre-tax charge of $2 million in 2012, and made payments of $3 million during the quarter ended March 31, 2012 for clean-up costs,which reduced our environmental liabilities. At certain sites, we have contractual agreements with certain other parties to shareremediation costs. Based on these arrangements, we had a receivable of $10 million at March 31, 2012 and December 31, 2011. At anumber of these sites, the extent of contamination has not yet been fully investigated or the final scope of remediation is not yetdeterminable. We intend to assert all meritorious legal defenses and will pursue other equitable factors that are available with respectto these matters. However, the final cost of clean-up at these sites could exceed our present estimates, and could have, individually orin the aggregate, a material adverse effect on our financial condition, results of operations, or cash flows. Our estimates forenvironmental remediation liabilities may change in the future should additional sites be identified, further remediation measures berequired or undertaken, current laws and regulations be modified or additional environmental laws and regulations be enacted, and asnegotiations with respect to certain sites continue.

Other

We are routinely subject to other civil claims, litigation and arbitration, and regulatory investigations, arising in the ordinary course ofour business, as well as in respect of our divested businesses. Some of these claims and litigations relate to product liability claims,including claims related to our current and historical products and asbestos-related claims concerning premises and historic productsof our corporate affiliates and predecessors. We believe the claims relating to the period before the filing of the Chapter 11 cases aresubject to discharge pursuant to the Plan and will be satisfied, to the extent they were timely filed in the Chapter 11 cases and allowedby the Bankruptcy Court, solely from the Disputed Claims Reserve. Further, we believe that we have strong defenses to these claims. These claims have not had a material impact on us to date and we believe the likelihood that a future material adverse outcome willresult from these claims is remote. However, we cannot be certain that an adverse outcome of one or more of these claims, to theextent not discharged in the Chapter 11 cases, would not have a material adverse effect on our financial condition, results ofoperations or cash flows. Internal Review of Customer Incentive, Commission and Promotional Payment Practices The SEC staff has advised us that it has completed its investigation resulting from our previously disclosed review of various customerincentive, commission and promotional payment practices of the Chemtura AgroSolutions segment in the Europe, Middle East andAfrica region (the “EMEA Region”), and has determined not to recommend action by the SEC.

19


Table of Contents

Guarantees In addition to the letters of credit of $15 million outstanding at both March 31, 2012 and December 31, 2011, we have guarantees thathave been provided to various financial institutions. At March 31, 2012 and December 31, 2011, we had $14 million and $11 millionof outstanding guarantees, respectively. The letters of credit and guarantees were primarily related to liabilities for insuranceobligations, environmental obligations, banking and credit facilities, vendor deposits and European value added tax (“VAT”)obligations. We have applied the disclosure provisions of ASC Topic 460, Guarantees (“ASC 460”), to our agreements that contain guarantee orindemnification clauses. We are a party to several agreements pursuant to which we may be obligated to indemnify a third party withrespect to certain loan obligations of joint venture companies in which we have an equity interest. These obligations arose to provideinitial financing for a joint venture start-up, fund an acquisition and/or provide project capital. Such obligations mature throughAugust 2016. In the event that any of the joint venture companies were to default on these loan obligations, we would indemnify theother party up to its proportionate share of the obligation based upon its ownership interest in the joint venture. At March 31, 2012,the maximum potential future principal and interest payments due under these guarantees were $5 million. At December 31, 2011, themaximum potential future principal and interest payments due under these guarantees were $8 million. In accordance with ASC 460,we have accrued $1 million in reserves, which represents the probability weighted fair value of these guarantees at March 31, 2012and December 31, 2011. The reserve has been included in other liabilities on our Consolidated Balance Sheet at March 31, 2012 andDecember 31, 2011 with an offset to the investment included in other assets. In addition, we have financing agreements with banks in Brazil for certain customers under which we receive funds from the banks atinvoice date, and in turn, the customer agrees to pay the banks on the due date. We provide a full recourse guarantee to the banks inthe event of customer non-payment. In the ordinary course of business, we enter into contractual arrangements under which we may agree to indemnify a third party tosuch arrangement from any losses incurred relating to the services they perform on our behalf or for losses arising from certain eventsas defined within the particular contract, which may include, for example, litigation, claims or environmental matters relating to ourpast performance. For any losses that we believe are probable and estimable, we have accrued for such amounts in our ConsolidatedBalance Sheets. 18) BUSINESS SEGMENT DATA We evaluate a segment’s performance based on several factors, of which the primary factor is operating income (loss). In computingoperating income (loss) by segment, the following items have not been deducted: (1) general corporate expense; (2) amortization;(3) changes in estimates related to expected allowable claims; and (4) impairment charges. Pursuant to ASC Topic 280, SegmentReporting (“ASC 280”), these items have been excluded from our presentation of segment operating income (loss) because they arenot reported to the chief operating decision maker for purposes of allocating resources among reporting segments or assessing segmentperformance. Industrial Performance Products Industrial Performance Products are engineered solutions for our customers’ specialty chemical needs. Industrial PerformanceProducts include petroleum additives that provide detergency, friction modification and corrosion protection in automotive lubricants,greases, refrigeration and turbine lubricants; castable urethane prepolymers engineered to provide superior abrasion resistance anddurability in many industrial and recreational applications; polyurethane dispersions and urethane prepolymers used in various typesof coatings such as clear floor finishes, high-gloss paints and textiles treatments; and antioxidants that improve the durability andlongevity of plastics used in food packaging, consumer durables, automotive components and electrical components. These productsare sold directly to manufacturers and through distribution channels. Industrial Engineered Products Industrial Engineered Products are chemical additives designed to improve the performance of polymers in their end-use applications.Industrial Engineered Products include brominated performance products, flame retardants, fumigants and organometallics. Theproducts are sold across the entire value chain ranging from direct sales to monomer producers, polymer manufacturers, compoundersand fabricators, fine chemical manufacturers and oilfield service companies to industry distributors.

20


Table of Contents

Consumer Products Consumer Products are performance chemicals that are sold to consumers for in-home and outdoor use. Consumer Products include avariety of branded recreational water purification products sold through local dealers and large retailers to assist consumers in themaintenance of their pools and spas and branded cleaners and degreasers sold primarily through mass merchants to consumers forhome cleaning. Chemtura AgroSolutions Chemtura AgroSolutions develops, supplies, registers and sells agricultural chemicals formulated for specific crops in variousgeographic regions for the purpose of enhancing quality and improving yields. The business focuses on specific target markets in sixmajor product lines: seed treatments, fungicides, miticides, insecticides, growth regulators and herbicides. These products are solddirectly to growers and to major distributors in the agricultural sector. General Corporate Expense and Other Charges General corporate expense includes costs and expenses that are of a general corporate nature or managed on a corporate basis. Thesecosts (net of allocations to the business segments) primarily represent corporate stewardship and administration activities together withcosts associated with legacy activities and intangible asset amortization. Functional costs are allocated between the business segmentsand general corporate expense. Impairment charges related to the impairment of intangible assets and property, plant and equipmentthat were no longer supportable. Change in estimates related to expected allowable claims relates to adjustments to resolve disputedclaims. A summary of business data for our reportable segments for the quarters ended March 31, 2012 and 2011 are as follows:


(In millions)

2012

2011

Net Sales

Industrial Performance Products

$ 313

$ 336

Industrial Engineered Products

226

209

Consumer Products

84

79

Chemtura AgroSolutions

85

75

Total net sales

$ 708

$ 699


(In millions)

2012

2011

Operating Income (Loss)


$ 24

$ 30


44

33

Consumer Products

(5) (3)Chemtura AgroSolutions

10

2

73

62

General corporate expense, including amortization

(29) (28)

Impairment charges

(1) (2)Changes in estimates related to expected allowable

claims

(2) —

Total operating income

$ 41

$ 32

21


Table of Contents 19) GUARANTOR CONDENSED CONSOLIDATING FINANCIAL DATA Our obligations under the Senior Notes are fully and unconditionally guaranteed on a senior unsecured basis, jointly and severally, byeach current and future domestic restricted subsidiary, other than excluded subsidiaries that guarantee any indebtedness of Chemturaor our restricted subsidiaries. Our subsidiaries that do not guarantee the Senior Notes are referred to as the “Non-GuarantorSubsidiaries.” The Guarantor Condensed Consolidating Financial Data presented below presents the statements of operations,statements of comprehensive income, balance sheets and statements of cash flow for: (i) Chemtura Corporation (the “ParentCompany”), the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries on a consolidated basis (which is derived from Chemturahistorical reported financial information); (ii) the Parent Company, alone (accounting for our Guarantor Subsidiaries and theNon-Guarantor Subsidiaries on an equity basis under which the investments are recorded by each entity owning a portion of anotherentity at cost, adjusted for the applicable share of the subsidiary’s cumulative results of operations, capital contributions anddistributions, and other equity changes); (iii) the Guarantor Subsidiaries alone; and (iv) the Non-Guarantor Subsidiaries alone.

Condensed Consolidating Statement of OperationsQuarter ended March 31, 2012

(In millions)

Non-

Parent

Guarantor

Guarantor

Consolidated

Eliminations

Company

Subsidiaries

Subsidiaries

Net sales

$ 708

$ (481) $ 415

$ 164

$ 610

Cost of goods sold

537

(481) 330

144

544


82

—

30

11

41


33

—

9

12

12


13

—

5

2

6

Impairment charges

1

—

—

—

1

Changes in estimates related to expectedallowable claims

2

—

2

—

—

Equity income

(1) —

—

—

(1) Operating income (loss)

41

—

39

(5) 7

Interest expense

(14) —

(17) 1

2

Other expense, net

(4) —

(3) —

(1)Reorganization items, net

(2) —

(2) —

—

Equity in net earnings of subsidiaries

—

(5) 5

—

—

Earnings (loss) before income taxes

21

(5) 22

(4) 8

Income tax benefit

1

—

—

—

1

Net earnings (loss) attributable to

Chemtura

$ 22

$ (5) $ 22

$ (4) $ 9

Condensed Consolidating Statement of Comprehensive Income

Quarter ended March 31, 2012(In millions)

Non-

Parent

Guarantor

Guarantor

Consolidated

Eliminations

Company

Subsidiaries

Subsidiaries

Net earnings (loss)

22

(5) 22

(4) 9

Other comprehensive income (loss),

net of tax

Foreign currency translationadjustments

22

—

(13) 2

33

Unrecognized pension and otherpost-retirement benefit costs

2

—

2

—

—


Comprehensive income (loss)

attributable to Chemtura

$ 46

$ (5) $ 11

$ (2) $ 42

22


Table of Contents

Condensed Consolidating Balance SheetAs of March 31, 2012

(In millions)

Non-

Parent

Guarantor

Guarantor

Consolidated

Eliminations

Company

Subsidiaries

Subsidiaries

ASSETS

Current assets

$ 1,422

$ —

$ 364

$ 252

$ 806

Intercompany receivables

—

(8,309) 2,943

2,383

2,983

Investment in subsidiaries

—

(12,373) 2,036

1,736

8,601

Property, plant and equipment

760

—

158

272

330

Goodwill

177

—

93

3

81

Other assets

609

—

177

182

250

Total assets

$ 2,968

$ (20,682) $ 5,771

$ 4,828

$ 13,051

LIABILITIES AND STOCKHOLDERS’

EQUITY

Current liabilities

$ 462

$ —

$ 184

$ 80

$ 198

Intercompany payables

—

(8,309) 3,375

2,692

2,242

Long-term debt

748

—

747

—

1

Other long-term liabilities

664

—

371

59

234

Total liabilities

1,874

(8,309) 4,677

2,831

2,675

Stockholders’ equity

1,094

(12,373) 1,094

1,997

10,376


$ 2,968

$ (20,682) $ 5,771

$ 4,828

$ 13,051

Condensed Consolidating Statement of Cash Flows


Non-

Parent

Guarantor

Guarantor

Consolidated

Eliminations

Company

Subsidiaries

Subsidiaries

Increase (decrease) to cash

CASH FLOWS FROM OPERATINGACTIVITIES

Net earnings (loss) $ 22

$ (5) $ 22

$ (4) $ 9

Adjustments to reconcile net earnings (loss) tonet cash (used in) provided by operations:

Impairment charges

1

—

—

—

1


33

—

9

12

12


7

—

7

—

—


1

—

1

—

—


2

—

2

—

—

Equity (income) loss

(1) 5

(5) —

(1)Changes in assets and liabilities, net

(154) —

(118) 2

(38)

Net cash (used in) provided by operations

(89) —

(82) 10

(17) CASH FLOWS FROM INVESTING

ACTIVITIES

Capital expenditures

(29) —

(9) (10) (10)Net cash used in investing activities

(29) —

(9) (10) (10)

CASH FLOWS FROM FINANCING

ACTIVITIES

Proceeds from ABL Facility

59

—

59

—

—

Payments on other short term borrowings,net

(1) —

—

—

(1)

Net cash provided by (used in) financingactivities

58

—

59

—

(1)


CASH

Effect of exchange rates on cash and cashequivalents

2

—

—

—

2


(58) —

(32) —

(26)Cash and cash equivalents at beginning of

period

180

—

35

—

145

Cash and cash equivalents at end of period $ 122

$ —

$ 3

$ —

$ 119

23


Table of Contents


(In millions)

Non-

Parent

Guarantor

Guarantor

Consolidated

Eliminations

Company

Subsidiaries

Subsidiaries

Net sales

$ 699

$ (440) $ 411

$ 146

$ 582

Cost of goods sold

538

(440) 336

122

520


79

—

33

13

33


37

—

10

13

14


11

—

5

2

4

Impairment charges

2

—

—

—

2

Operating income (loss)

32

—

27

(4) 9

Interest expense

(16) —

(17) —

1

Other income (expense), net

1

—

(5) —

6


(7) —

(7) —

—

Equity in net earnings of subsidiaries

—

(9) 9

—

—

Earnings (loss) before income taxes

10

(9) 7

(4) 16

Income tax expense

(3) —

—

—

(3)

Net earnings (loss) attributable toChemtura

$ 7

$ (9) $ 7

$ (4) $ 13



Non-

Parent

Guarantor

Guarantor

Consolidated

Eliminations

Company

Subsidiaries

Subsidiaries

Net earnings (loss)

7

(9) 7

(4) 13

Other comprehensive income (loss), net

of tax


31

—

(22) 4

49


2

—

2

—

—


attributable to Chemtura

$ 40

$ (9) $ (13) $ —

$ 62

24


Table of Contents

Condensed Consolidating Balance SheetAs of December 31, 2011

(In millions)

Non-

Parent

Guarantor

Guarantor

Consolidated

Eliminations

Company

Subsidiaries

Subsidiaries

ASSETS

Current assets

$ 1,321

$ —

$ 372

$ 204

$ 745

Intercompany receivables

—

(7,846) 2,727

2,230

2,889

Investment in subsidiaries

—

(14,617) 2,011

1,734

10,872


752

—

160

271

321

Goodwill

174

—

92

3

79

Other assets

608

—

226

185

197

Total assets

$ 2,855

$ (22,463) $ 5,588

$ 4,627

$ 15,103

LIABILITIES AND STOCKHOLDERS’

EQUITY

Current liabilities

$ 390

$ —

$ 134

$ 79

$ 177


—

(7,846) 3,201

2,491

2,154

Long-term debt

748

—

747

—

1

Other long-term liabilities

671

—

460

60

151

Total liabilities

1,809

(7,846) 4,542

2,630

2,483


1,046

(14,617) 1,046

1,997

12,620


$ 2,855

$ (22,463) $ 5,588

$ 4,627

$ 15,103



Non-

Parent

Guarantor

Guarantor

Consolidated

Eliminations

Company

Subsidiaries

Subsidiaries

Increase (decrease) to cash

CASH FLOWS FROM OPERATINGACTIVITIES

Net earnings (loss)

$ 7

$ (9) $ 7

$ (4) $ 13

Adjustments to reconcile net earnings (loss) tonet cash (used in) provided by operations:

Impairment charges

2

—

—

—

2


37

—

10

13

14


8

—

8

—

—


1

—

1

—

—

Equity loss (income)

—

9

(9) —

—

Changes in assets and liabilities, net

(167) —

(114) 1

(54)Net cash (used in) provided by operations

(112) —

(97) 10

(25)

CASH FLOWS FROM INVESTING

ACTIVITIES

Payments for acquistions

(30) —

—

—

(30)Capital expenditures

(23) —

(4) (10) (9)

Net cash used in investing activities

(53) —

(4) (10) (39) CASH FLOWS FROM FINANCING

ACTIVITIES

Proceeds from ABL Facility

73

—

73

—

—

Proceeds from other short term borrowings,net

1

—

—

—

1

Net cash provided by financing activities

74

—

73

—

1

CASH


Effect of exchange rates on cash and cashequivalents

3

—

—

—

3


(88) —

(28) —

(60)Cash and cash equivalents at beginning of period

201

—

41

—

160

Cash and cash equivalents at end of period

$ 113

$ —

$ 13

$ —

$ 100

25


Table of Contents ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis should be read in conjunction with our unaudited condensed consolidated financial statementsincluded in Item 1 of this Form 10-Q. This management’s discussion and analysis of financial condition and results of operations contains forward-looking statements. See“forward-looking statements” for a discussion of certain risks, assumptions and uncertainties associated with these statements. OUR BUSINESS We are among the larger publicly traded specialty chemical companies in the United States. We are dedicated to deliveringinnovative, application-focused specialty chemical solutions and consumer products. We operate in a wide variety of end-useindustries, including agriculture, automotive, building and construction, electronics, lubricants, packaging, plastics for durable andnon-durable goods, pool and spa chemicals and transportation. The majority of our chemical products are sold to industrialmanufacturing customers for use as additives, ingredients or intermediates that add value to their end products. Our agrochemical andconsumer products are sold to dealers, distributors and major retailers. We are a leader in many of our key product lines and transactbusiness in more than 100 countries. The primary economic factors that influence the operations and sales of our Industrial Performance Products (“IndustrialPerformance”) and Industrial Engineered Products (“Industrial Engineered”) segments (collectively referred to as “Industrial”) areindustrial production, residential and commercial construction, electronic component production and polymer production, residentialand commercial construction. In addition, our Chemtura AgroSolutions segment is influenced by worldwide weather, disease and pestinfestation conditions. Our Consumer Products segment is also influenced by general economic conditions impacting consumerspending and weather conditions. Other factors affecting our financial performance include industry capacity, customer demand, raw material and energy costs, andselling prices. Selling prices are influenced by the global demand and supply for the products we produce. We pursue selling pricesthat reflect the value our products deliver to our customers, while seeking to pass on higher costs for raw material and energy topreserve our profit margins. FIRST QUARTER RESULTS Overview Consolidated net sales for the first quarter of 2012 were $708 million or $9 million higher than 2011. We realized $39 million fromhigher selling prices, responding to the requirements to reinvest in and support growth in our Industrial segments and to recoverincreases in raw material and distribution costs over the prior year. However, the continued weakness in demand from industrialapplications and the downturn in electronics demand that emerged in the second half of 2011 carried forward into the first quarter of2012 and we experienced a reduction in net sales volumes of $24 million compared to the prior year. However, we did seeimprovement in electronics demand in the later part of the quarter. Sales volume growth was generated by our Consumer Productsand Chemtura AgroSolutions segments, with a net sales volume decrease from our Industrial segments. The volume growth in ourConsumer Products segment reflected the benefit of regaining a mass market customer for the 2012 season that had been lost for the2011 season and relatively strong performance in the mass market channel in North America. We also experience $6 million fromunfavorable foreign currency translation. Gross profit for the first quarter of 2012 was $171 million, an increase of $10 million compared with the first quarter of 2011. Grossprofit as a percentage of net sales rose to 24% as compared with 23% in the same quarter of 2011. The increase in gross profitprimarily reflected the higher selling prices noted above offset by $11 million in unfavorable manufacturing absorption variances dueto lower sales volumes, $4 million increase in manufacturing costs, $5 million increase in raw material prices, $6 million decline insales volume and product mix, a $2 million increase in distribution costs and a $1 million increase in other costs. Selling, general and administrative (“SG&A”) expense of $82 million was $3 million higher than the first quarter of 2011 as weinvested in sales and marketing to support growth. Depreciation and amortization expense of $33 million was $4 million lower than the first quarter of 2011. The first quarter of 2011included $1 million of accelerated depreciation associated with reorganization initiatives.

26


Table of Contents Research and development expense (“R&D”) of $13 million was slightly higher than in the same quarter of 2011 as we invested inproduct and application development. Changes in estimates related to expected allowable claims were $2 million for the first quarter of 2012, as we reduced the outstanding number of claims remaining to be resolved in our Disputed Claims Reserve. Interest expense of $14 million during the first quarter of 2012 was $2 million lower than the first quarter of 2011. Other expense, net was $4 million in the first quarter of 2012 compared to other income, net of $1 million for the first quarter of2011. The change is primarily the result of unrealized and realized foreign currency losses recorded in the first quarter of 2012. Reorganization items, net of $2 million in the first quarter of 2012 was $5 million lower than the first quarter of 2011. The expense inboth periods primarily comprised professional fees directly associated with the Chapter 11 reorganization and the impact of negotiatedsettlement of claims for which Bankruptcy Court approval has been obtained or requested. The income tax benefit in the first quarter of 2012 was $1 million compared with income tax expense of $3 million in the first quarterof 2011. The benefit in the first quarter of 2012 is primarily related to adjustments for prior years taxes in various foreignsubsidiaries. We have offset our current year-to-date U.S income with net operating loss carryforwards and reduced the associatedvaluation allowance. Net earnings attributable to Chemtura for the first quarter of 2012 was $22 million, or $0.22 per share, as compared with net earningsattributable to Chemtura of $7 million, or $0.07 per share, for the first quarter of 2011. The following is a discussion of the results of our segments for the first quarter ended March 31, 2012. Industrial Performance Products Our Industrial Performance segment reported lower net sales and operating income in the first quarter of 2012 compared with lastyear. The weakness came from the antioxidants products and, to a lesser extent, the urethanes products. Sales volume across thesegment was lower than last year as industrial demand has not yet recovered from the decline in the second half of 2011. The lowercustomer demand resulted in lower sales volume which negatively impacted net sales, and also generated higher manufacturing costsdue to unfavorable absorption from lower plant production volumes. All businesses within this segment continue to aggressivelyimplement price increases to cover raw material and distribution cost increases, as well as other investments needed to support theexpected increasing customer demand. Net sales totaled $313 million in the first quarter of 2012, a decrease of $23 million compared with last year. The lower results reflectthe negative impact of reduced sales volume noted above totaling $36 million, partially offset by higher selling prices of $14 million. There was also a $1 million unfavorable foreign currency translation impact. Operating income totaled $24 million in the first quarter of 2012, a decrease of $6 million compared with last year. The lower profitsresulted from lower sales volumes and changes in product mix of $10 million, increased raw material costs of $8 million and higherSG&A and R&D (collectively “SGA&R”) expense of $2 million, partially offset by higher selling prices. Industrial Engineered Products Our Industrial Engineered segment delivered improvements in net sales and operating income over the same quarter of 2011 mainly asa result of increases in selling prices over the last twelve months. During 2011, we increased selling prices to cover the higher cost ofraw materials and other manufacturing and distribution costs as well as to support the required capacity reinvestments for sustainableand reliable supply of products to our customers. Demand from the electronics industry started the quarter at the same levels as insecond half of 2011, but began recovering later in the quarter as the inventory liquidation in the broader electronics industry supplychain abated. Nevertheless, with lower production volumes than in the first quarter of 2011, coupled with bringing new productioncapacity on-line, the segment generated unfavorable manufacturing absorption variances. Increases in distribution costs andreductions in equity income were fully offset by slight declines in raw material costs and favorable volume and product mix in 2012. Net sales increased by $17 million to $226 million for the first quarter of 2012 reflecting the benefit of $23 million in increased sellingprices partially offset by $4 million in lower sales volume and $2 million from unfavorable foreign currency translation.

27


Table of Contents Operating income increased $11 million to $44 million in the first quarter of 2012 compared with $33 million in the first quarter of2011. The improvement reflected the favorable selling price increases, $2 million in product mix changes and $3 million from lowerraw material costs, which were only partly offset by $10 million in unfavorable manufacturing absorption variances, $4 million inincreased manufacturing costs, $2 million in higher distribution costs and a reduction of $1 million in equity income. Consumer Products Our Consumer Products segment showed a modest improvement in net sales for the first quarter of 2012 compared with the firstquarter of 2011 primarily the result of increased sales volume due to regaining a mass market customer for our 2012 season andrelatively strong performance for this time of year in the mass market channel in North America. The benefit of increased salesvolume combined with a reduction in SGA&R expense was not sufficient to offset increases in raw materials and the release ofmanufacturing variances as a result of lower production volumes in 2011, resulting in the operating loss for the quarter increasingcompared to the first quarter of 2011. Net sales increased by $5 million to $84 million in the first quarter of 2012. This increase reflected $6 million of higher sales volumeoffset by $1 million from unfavorable foreign currency translation. Operating loss increased $2 million to $5 million in the first quarter of 2012 compared with an operating loss of $3 million in the firstquarter of 2011, principally driven by higher raw material costs and manufacturing variances. Chemtura AgroSolutions Our Chemtura AgroSolutions segment reported higher net sales and operating income for the first quarter of 2012 compared with thesame quarter in 2011. Increases in volume benefited from new products and registrations with growth in revenues in all regionsexcept Southern Asia. North America had the benefit of a mild winter and a warm start to spring. European sales still grew despitethe harshest winter in a number of years. Net sales and operating profit benefited from increases in selling prices. Unfavorableforeign currency translation impacted this segment as well. Net sales increased by $10 million to $85 million for the first quarter of 2012 from $75 million in the same quarter of 2011. Theincrease was composed of $10 million in higher sales volume and $2 million in higher selling prices offset by $2 million fromunfavorable foreign currency translation. Operating income increased $8 million to $10 million in the first quarter of 2012 compared with $2 million in the first quarter of 2011,reflecting a $3 million increase from sales volume and product mix changes, $2 million from higher selling prices, $1 million fromlower raw material costs and $3 million from lower manufacturing and distribution costs, partly offset by a $1 million impact fromunfavorable foreign currency translation. General Corporate Included in general corporate expenses are costs and expenses that are of a general nature or managed on a corporate basis. Thesecosts, net of allocations to the business segments, primarily represent corporate stewardship and administration activities together withcosts associated with legacy activities and intangible asset amortization. Functional costs are allocated between the business segmentsand general corporate expense. Corporate expense of $29 million in the first quarter of 2012 increased slightly from $28 million in the first quarter of 2011. LIQUIDITY AND CAPITAL RESOURCES Emergence from Chapter 11 On March 18, 2009 (the “Petition Date”) Chemtura and 26 of our U.S. affiliates (collectively the “U.S. Debtors” or the “Debtors”when used in relation to matters before August 8, 2010) filed voluntary petitions for relief under Chapter 11 of Title 11 of the UnitedStates Code (“Chapter 11”) in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”). On August 8, 2010, our Canadian subsidiary, Chemtura Canada Co/Cie (“Chemtura Canada”), filed a voluntary petition for reliefunder Chapter 11. The U.S. Debtors along with Chemtura Canada after it filed for Chapter 11 (collectively the “Debtors”) requestedthe Bankruptcy Court to enter an order jointly administering Chemtura Canada’s Chapter 11 case with the previously filed Chapter 11cases and appoint Chemtura Canada as the “foreign representative” for the purposes of the

28


Table of Contents

Canadian case. Such orders were granted on August 9, 2010. On August 11, 2010, the Canadian court entered an order recognizingthe Chapter 11 cases as a “foreign proceedings” under the CCAA.

On November 3, 2010, the Bankruptcy Court entered an order confirming the Debtors’ plan of reorganization (the “Plan”). OnNovember 10, 2010 (the “Effective Date”), the Debtors substantially consummated their reorganization through a series oftransactions contemplated by the Plan and the Plan became effective. On June 10, 2011, we filed a closing report in Chemtura Canada’s Chapter 11 case and a motion seeking a final decree closing thatChapter 11 case. On June 23, 2011, the Bankruptcy Court granted our motion and entered a final decree closing the Chapter 11 caseof Chemtura Canada. On December 1, 2011, we filed a motion requesting entry of an order granting a final decree closing the Chapter 11 cases of 22Debtors (the “Fully Administered Debtors”). On December 15, 2011, the Bankruptcy Court entered an order granting a final decreeclosing the Fully Administered Debtors’ Chapter 11 cases. On February 7, 2012, we filed a motion requesting entry of an order granting a final decree closing the Chapter 11 cases forBio-Lab, Inc. and GLCC Laurel, LLC, which was granted by the Bankruptcy Court on February 22, 2012. On March 16, 2012, we filed a motion requesting entry of an order granting a final decree closing the Chapter 11 cases for GreatLakes Chemical Corporation and Uniroyal Chemical Company Limited (Delaware), which was granted by the Bankruptcy Court onMarch 29, 2012. As of March 31, 2012, the Bankruptcy Court has entered orders granting final decrees closing all of the Debtors’ Chapter 11 casesexcept the Chapter 11 case of Chemtura Corporation. For further discussion of the Chapter 11 cases, see Note 16 - Emergence from Chapter 11 in our Notes to Consolidated FinancialStatements. Financing Facilities On August 27, 2010, we completed a private placement offering under Rule 144A of $455 million aggregate principal amount of7.875% senior notes due 2018 (the “Senior Notes”) at an issue price of 99.269% in reliance on an exemption pursuant toSection 4(2) of the Securities Act of 1933. We also entered into a senior secured term facility credit agreement due 2016 (the “TermLoan”) with Bank of America, N.A., as administrative agent, and other lenders party thereto for an aggregate principal amount of$295 million with an original issue discount of 1%. The Term Loan permits us to increase the size of the facility by up to $125million. On November 10, 2010, we entered into a five-year senior secured revolving credit facility available through 2015 (the “ABLFacility”) for an amount up to $275 million, subject to availability under a borrowing base (with a $125 million letter of creditsub-facility). The ABL Facility permits us to increase the size of the facility by up to $125 million subject to obtaining lendercommitments to provide such increase. At March 31, 2012, we had $59 million of borrowings under the ABL Facility and $15million of outstanding letters of credit (primarily related to insurance obligations, environmental obligations and banking creditfacilities) which utilizes available capacity under the facility. At March 31, 2012, we had approximately $201 million of undrawnavailability under the ABL Facility. These facilities contain covenants that limit, among other things, our ability to enter into certain transactions, such as creating liens,incurring additional indebtedness or repaying certain indebtedness, making investments, paying dividends, and entering intoacquisitions, dispositions and joint ventures. The Term Loan requires that we meet certain quarterly financial maintenance covenantsincluding a maximum Secured Leverage Ratio (as defined in the agreement) of 2.5:1.0 and a minimum Consolidated InterestCoverage Ratio (as defined in the agreement) of 3.0:1.0. The ABL Facility contains a springing financial covenant requiring aminimum trailing 12-month fixed charge coverage ratio of 1.1 to 1.0 at all times during any period from the date when the amountavailable for borrowings under the ABL Facility falls below the greater of (i) $34 million and (ii) 12.5% of the aggregatecommitments until such date such available amount has been equal to or greater than the greater of (i) $34 million and (ii) 12.5% ofthe aggregate commitments for 45 consecutive days. As of March 31, 2012, we were in compliance with the covenant requirements ofthese financing facilities. For further discussion of the financing facilities, see Note 6 — Debt in the Notes to our Consolidated Financial Statements.

29


Table of Contents Accounts Receivable Financing Facility On October 26, 2011, certain of our European subsidiaries (the “Sellers”) entered into a trade receivables financing facility (the “A/RFinancing Facility”) with GE Factofrance SAS as purchaser (the “Purchaser”). Pursuant to the A/R Financing Facility, and subject tocertain conditions stated therein, the Purchaser has agreed to purchase from the Sellers, on a revolving basis, certain trade receivablesup to a maximum amount outstanding at any time of €68 million (approximately $90 million). The A/R Financing Facility isuncommitted and has an indefinite term. Since availability under the A/R Financing Facility is expected to vary depending on thevalue of the Seller’s eligible trade receivables, the Sellers’ availability under the A/R Financing Facility may increase or decrease fromtime to time. The monthly financing fee on the drawn portion of the A/R Financing Facility is the applicable Base Rate plus 1.50%. In addition, the A/R Financing Facility is subject to a minimum commission on the annual volume of transferred receivables. We hadno outstanding borrowings under the A/R Financing Facility for the period ending March 31, 2012. Stock Repurchase Program On October 18, 2011, we announced that our Board of Directors (the “Board”) has authorized us to repurchase up to $50 million ofour common stock over the next twelve months. The shares are expected to be repurchased from time to time through open marketpurchases. The program, which does not obligate us to repurchase any particular amount of common stock, may be modified orsuspended at any time at the Board’s discretion. The manner, price, number and timing of such repurchases, if any, will be subject toa variety of factors, including market conditions and the applicable rules and regulations of the Securities and Exchange Commission(“SEC”). As of March 31, 2012, the cumulative authorized repurchase allowance was $50 million, of which we had cumulativelypurchased 2 million shares for $22 million. The remaining allowance under the program was approximately $28 million. There wereno purchases made in the quarter ended March 31, 2012. Restructuring Initiatives On April 30, 2012, our Board approved a restructuring plan providing for, among other things, the closure of our IndustrialPerformance Product segment’s antioxidants manufacturing facility in Pedrengo, Italy. The Board also approved actions to improvethe operating effectiveness of certain global corporate functions. This plan is expected to achieve significant gains in efficiency andcosts. The plant closure is expected to be completed by the first quarter of 2013. The restructuring plan is anticipated to generate cashsavings of approximately $15 million in 2013. We anticipate recording a pre-tax charge of approximately $30 million in the secondquarter of 2012 for accelerated depreciation of property, plant and equipment, asset retirement obligations, severance and related costswith the balance of the costs being expensed as incurred through 2013. The total cost of the restructuring plan is estimated to beapproximately $40 million of which approximately $6 million will consist of non-cash charges, for a net cash cost of approximately$34 million. Cash Flows from Operating Activities

Net cash used in operating activities was $89 million for the quarter ended March 31, 2012 compared to net cash used in operatingactivities of $112 million in the same period for last year. Changes in key working capital accounts are summarized below:

Favorable (unfavorable)

Three months ended

Three months ended

(In millions)

March 31, 2012

March 31, 2011

Accounts receivable

$ (94) $ (83)Inventories

(53) (65)

Accounts payable

34

23

Pension and post-retirement health careliabilities

(19) (15)

During the quarter ended March 31, 2012, accounts receivable increased by $94 million driven by increased volume principally withinthe Industrial Performance Products and Industrial Engineered Products segments related to seasonal demand. Inventory increased$53 million during the quarter ended March 31, 2012 as a result of building inventory ahead of the higher seasonal demand for someof our products. Accounts payable increased by $34 million in the quarter ended March 31, 2012 primarily a result of higher rawmaterial purchases, as well as the timing of vendor payments. Pension and post-retirement health care liabilities decreased $19million primarily due to the funding of benefit obligations. Pension and post-retirement contributions amounted to $22 million atMarch 31, 2012, which included $19 million for domestic plans and $3 million for international plans.

30


Table of Contents

Cash flows from operating activities in 2012 were adjusted by the impact of certain non-cash and other charges, which primarilyincluded depreciation and amortization expense of $33 million and stock-based compensation expense of $7 million. During the first quarter of 2011, accounts receivable increased by $83 million driven by increased volume principally within theIndustrial Performance Products and Industrial Engineered Products segments. With available liquidity in the first quarter of 2011,we were able to resume our historic practice of building inventory ahead of the higher seasonal demand for some of our products inthe summer and, as such, inventory increased $65 million during the first quarter of 2011. Accounts payable increased by $23 millionin the first quarter of 2011 primarily a result of growth in raw material and capital purchases and improving vendor credit terms. Pension and post-retirement health care liabilities decreased primarily due to the funding of benefit obligations. Contributionsamounted to $18 million in 2011, which included $12 million for domestic plans and $6 million for international plans. Cash flows from operating activities in 2011 were adjusted by the impact of certain non-cash and other charges, which primarilyincluded depreciation and amortization expense of $37 million and stock-based compensation expense of $8 million. Cash Flows from Investing and Financing Activities

Investing Activities Net cash used in investing activities was $29 million for the quarter ended March 31, 2012 related to payments for capitalexpenditures for U.S. and international facilities, environmental and other compliance requirements. Net cash used in investing activities was $53 million for the first quarter of 2011. Investing activities were primarily related topayments for joint ventures of $30 million, which included $28 million for ISEM and $2 million for DayStar Materials, LLC, and $23million in capital expenditures for U.S. and foreign facilities, environmental and other compliance requirements.

Financing Activities

Net cash provided by financing activities was $58 million for the quarter ended March 31, 2012, which included proceeds from theABL Facility of $59 million and payments on other short term borrowings of $1 million. Net cash provided by financing activities was $74 million for the first quarter of 2011, which included proceeds from the ABL Facilityof $73 million and proceeds from other short term borrowings $1 million. Settlements of Disputed Claims In the quarter ended March 31, 2012, we distributed approximately $4 million of restricted cash associated with our Chapter 11 cases. These settlements were comprised of a $3 million supplemental distribution to holders of previously issued Chemtura stock (“Holdersof Interests”) and $1 million for general unsecured claims. Additionally we issued approximately $23 million of common stock whichincluded a $20 million supplemental distribution to Holders of Interests and $3 million for general unsecured claims. In the quarter ended March 31, 2011, we settled approximately $29 million of disputed claims asserted in our Chapter 11 cases withrestricted cash. These settlements were comprised of $27 million for environmental items and $2 million for general unsecuredclaims. Additionally we issued approximately $7 million of common stock which included $4 million for the settlement of certainother disputed claims and a $3 million supplemental distribution to Holders of Interests. Future Liquidity In 2012, we expect to finance our continuing operations and capital spending requirements with cash flows provided by operatingactivities, available cash and cash equivalents, borrowings under our ABL Facility, the A/R Financing Facility and other sources. Cash and cash equivalents as of March 31, 2012 were $122 million.

31


Table of Contents

Contractual Obligations and Other Cash Requirements During the quarter ended March 31, 2012, we made aggregate contributions of $19 million to our U.S. and international pension plansand $3 million to our post-retirement benefit plans. We expect to make approximately $62 million of contributions to these plansduring the remainder of 2012, including a $24 million contribution to our UK pension plan discussed below. On May 9, 2011, one of our UK subsidiaries entered into definitive agreements with the trustees of the Great Lakes U.K. LimitedPension Plan (“UK Pension Plan”) over the terms of a “recovery plan” which provided for a series of additional cash contributions tobe made to reduce the underfunding over time. The agreements provided, among other things, for our UK subsidiary to make cashcontributions of £60 million (approximately $96 million) in just over a three year period, with the initial contribution of £30 million($49 million) made in the second quarter of 2011. The second contribution of £15 million ($24 million) is to be made in May 2012. The agreements also provided for the granting of both a security interest and a guarantee to support certain of the liabilities under theUK Pension Plan. There is also an evaluation being undertaken as to whether additional benefit obligations exist in connection with the equalization ofcertain benefits under the UK Pension Plan that occurred in the early 1990s. Based on the results of the evaluation to date, $8 millionof expense was recorded in the fourth quarter of 2011, which may be subject to adjustment as further information is gathered as part ofthe evaluation. Upon completion of the evaluation and the finalization of the liability with respect to additional benefit obligations,additional cash contributions to the UK Pension Plan may be required starting in 2013. There were no changes to the evaluationduring the first quarter of 2012. We had net liabilities related to unrecognized tax benefits of $49 million at March 31, 2012. We believe it is reasonably possible thatour unrecognized tax benefits may decrease by approximately $22 million within the next 12 months. Guarantees In addition to $15 million in outstanding letters of credit at March 31, 2012, we have guarantees that have been provided to variousfinancial institutions. At March 31, 2012, we had $14 million of outstanding guarantees primarily related to vendor deposits. Theletters of credit and guarantees were primarily related to liabilities for insurance obligations, environmental obligations, banking creditfacilities, vendor deposits and European value added tax (“VAT”) obligations. CRITICAL ACCOUNTING ESTIMATES Our Consolidated Financial Statements have been prepared in conformity with U.S. generally accepted accounting principles(“GAAP”), which require management to make estimates and assumptions that affect the amounts and disclosures reported in ourConsolidated Financial Statements and accompanying notes. Our estimates are based on historical experience and currently availableinformation. Management’s Discussion and Analysis of Financial Condition and Results of Operations and the Accounting Policiesfootnote in our Annual Report on Form 10-K for the fiscal year ended December 31, 2011 describe the critical accounting estimatesand accounting policies used in the preparation of our Consolidated Financial Statements. Actual results could differ frommanagement’s estimates and assumptions. There have been no significant changes in our critical accounting estimates during thethree month period ended March 31, 2012. 2012 TRENDS Building upon on our first quarter performance, we anticipate that our operating performance in the first half of 2012 will equal orexceed the first half of 2011. The second quarter is historically our strongest quarter as we realize the full benefit of our seasonalbusinesses. The challenge is now for our Industrial segments to sequentially improve over their first quarter performance and strivefor the same levels as they achieved last year. In the first quarter we saw demand from our electronics customers improve as theinventory correction across the broader electronics industry that drove our demand lower in the latter part of 2011 abated. We nowwait to see how the underlying electronics industry demand evolves in the coming months to assess how strong this recovery may be. For the other industrial applications we serve, recovery to-date from the reduction in demand in the second half of 2011 has beenslower. There are signs of improvement but the rate of recovery remains to be determined. In addition, continuing to recoverincreases in raw material costs remains a key factor in sustaining improving performance. We expect stronger performance throughout the balance of 2012 from our Consumer Products and Chemtura AgroSolutionssegments. Our Consumer Products segment has regained the mass market customer it lost for the 2011 season and introduced newproducts and brands. Chemtura AgroSolutions has extended its product offerings, gained new product registrations and strengthenedits distribution channels. The resulting increase in sales volume is expected to drive stronger

32


Table of Contents

performance from these segments in 2012. When combined with recovering industrial demand, we anticipate stronger year-on-yearperformance comparisons in the second half of 2012 contributing to our expectation that 2012 will be another year of improvement.

FORWARD-LOOKING STATEMENTS In addition to historical information, this Report contains “forward-looking statements” within the meaning of Section 27(a) of theSecurities Act of 1933, as amended and Section 21(e) of the Exchange Act of 1934 as amended. We use words such as “anticipate,”“believe,” “intend,” “estimate,” “expect,” “continue,” “should,” “could,” “may,” “plan,” “project,” “predict,” “will” and similarexpressions to identify forward-looking statements. Such statements include, among others, those concerning our expected financialperformance and strategic and operational plans, as well as all assumptions, expectations, predictions, intentions or beliefs aboutfuture events. You are cautioned that any such forward-looking statements are not guarantees of future performance and that a numberof risks and uncertainties could cause actual results to differ materially from those anticipated in the forward-looking statements. Such risks and uncertainties 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;• 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 European debt crisis;• 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;• The ability to grow profitability in our Chemtura AgroSolutions segment;• 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 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 of the additional shares of our common stock that our Board of Directors have authorized us to

purchase over the next twelve months and the terms on which any such repurchases are made;• Our ability to execute on our long range plans; and• Other risks and uncertainties detailed in Item 1A. Risk Factors in our filings with the Securities and Exchange Commission.

These statements are based on our estimates and assumptions and on currently available information. The forward-looking statementsinclude information concerning our possible or assumed future results of operations, and our actual results may differ significantlyfrom the results discussed. Forward-looking information is intended to reflect opinions as of the date this Form 10-Q was filed. Weundertake no duty to update any forward-looking statements to conform the statements to actual results or changes in our operations.

33


Table of Contents

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk

This Item should be read in conjunction with Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” and Note 15,“Derivative Instruments and Hedging Activities” to the Consolidated Financial Statements in our 2011 Annual Report on Form 10-K. Also see Note 12, “Derivative Instruments and Hedging Activities” to the Consolidated Financial Statements (unaudited) included inthis Form 10-Q. The fair market value of long-term debt is subject to interest rate risk. Our total debt amounted to $811 million at March 31, 2012. The fair market value of such debt as of March 31, 2012 was $861 million, which has been determined primarily based on quotedmarket prices. In February 2012, we purchased forward contracts with a notional amount of $38 million to reduce the risk of currency exposurerelated to the three annual installments of this receivable. These contracts matured in April 2012. Upon maturity, additional contractswere purchased to off set foreign currency exposure on the remaining annual payments due through 2014. We use fair valueaccounting methods for these contracts and have recorded a gain of less than $1 million reflecting the changes in the fair market valueof these contracts in other (expense) income, net in our Consolidated Statement of Operations. The resulting net asset of the changesin fair market value of these contracts has been accounted for in other current assets and other long-term assets in our ConsolidatedBalance Sheet. There have been no other significant changes in market risk during the quarter ended March 31, 2012.

34


Table of Contents ITEM 4. Controls and Procedures

(a) Disclosure Controls and Procedures

As of March 31, 2012, our management, including our Chief Executive Officer (CEO) and Chief Financial Officer (CFO), haveconducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures pursuant toRule 13a-15(b) of the Exchange Act. Based on that evaluation, our CEO and CFO concluded that our disclosure controls andprocedures are effective as of the end of the period covered by this report.

(b) Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting during the first fiscal quarter ended March 31, 2012that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

35


Table of Contents

PART II. OTHER INFORMATION

ITEM 1. Legal Proceedings See Note 17 — Legal Proceedings and Contingencies in the Notes to our Consolidated Financial Statements for a description of ourlegal proceedings. ITEM 1A. Risk Factors Our risk factors are described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2011. Investors areencouraged to review those risk factors in detail before making any investment in our securities. There have been no significantchanges in our risk factors during the quarter ended March 31, 2012. ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds Issuer Purchases of Equity Securities During the Fourth Quarter of 2011 On October 18, 2011, we announced that our Board of Directors (the “Board”) has authorized us to repurchase up to $50 million ofour common stock over the next twelve months. The shares are expected to be repurchased from time to time through open marketpurchases. The program, which does not obligate us to repurchase any particular amount of common stock, may be modified orsuspended at any time at the Board’s discretion. The manner, price, number and timing of such repurchases, if any, will be subject toa variety of factors, including market conditions and the applicable rules and regulations of the Securities and Exchange Commission(“SEC”). As of March 31, 2012 the cumulative authorized repurchase allowance was $50 million, of which we had cumulativelypurchased 2 million shares for $22 million. The remaining allowance under the program was approximately $28 million. There wereno purchases made in the quarter ended March 31, 2012. ITEM 5. Other Information On April 30, 2012, our Board approved a restructuring plan providing for, among other things, the closure of our IndustrialPerformance Product segment’s antioxidants manufacturing facility in Pedrengo, Italy. The Board also approved actions to improvethe operating effectiveness of certain global corporate functions. This plan is expected to achieve significant gains in efficiency andcosts. The plant closure is expected to be completed by the first quarter of 2013. The restructuring plan is anticipated to generate cashsavings of approximately $15 million in 2013. We anticipate recording a pre-tax charge of approximately $30 million in the secondquarter of 2012 for accelerated depreciation of property, plant and equipment, asset retirement obligations, severance and related costswith the balance of the costs being expensed as incurred through 2013. The total cost of the restructuring plan is estimated to beapproximately $40 million of which approximately $6 million will consist of non-cash charges, for a net cash cost of approximately$34 million.

36


Table of Contents

ITEM 6. Exhibits

The following documents are filed as part of this report:

Number

Description 31.1

Certification of Periodic Report by Chemtura Corporation’s Chief Executive Officer (Section 302).

31.2

Certification of Periodic Report by Chemtura Corporation’s Chief Financial Officer (Section 302).

32.1

Certification of Periodic Report by Chemtura Corporation’s Chief Executive Officer (Section 906).

32.2

Certification of Periodic Report by Chemtura Corporation’s Chief Financial Officer (Section 906).

101.INS

XBRL Instance Document *

101.SCH

XBRL Taxonomy Extension Schema Document *

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document *

101.LAB

XBRL Taxonomy Extension Label Linkbase Document *

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document *

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document *

* Pursuant to Regulation S-T, this interactive data file is deemed not filed or part of a registration statement or prospectus forpurposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the SecuritiesExchange Act of 1934, and otherwise is not subject to liability under these sections.

37


Table of Contents

CHEMTURA CORPORATIONSIGNATURES

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

CHEMTURA CORPORATION

(Registrant) Date: May 1, 2012

/s/ Kevin V. Mahoney

Name: Kevin V. MahoneyTitle: Senior Vice President, Corporate Controller and ChiefAccounting Officer

38


Exhibit 31.1 I, Craig A. Rogerson, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Chemtura Corporation; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact

necessary to make the statements made, in light of the circumstances under which such statements were made, notmisleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all

material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periodspresented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and

procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (asdefined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be

designed under our supervision, to ensure that material information relating to the registrant, including itsconsolidated subsidiaries, is made known to us by others within those entities, particularly during the period inwhich this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to

be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance with generally acceptedaccounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our

conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period coveredby this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during

the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report)that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control overfinancial reporting; and


5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over

financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or personsperforming the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial

reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarizeand report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in

the registrant’s internal control over financial reporting.

Date: May 1, 2012

By: /s/ Craig A. Rogerson

Craig A. Rogerson

Chairman, President and Chief Executive Officer


Exhibit 31.2 I, Stephen C. Forsyth, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Chemtura Corporation; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact

necessary to make the statements made, in light of the circumstances under which such statements were made, notmisleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all

material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periodspresented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and

procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (asdefined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be

designed under our supervision, to ensure that material information relating to the registrant, including itsconsolidated subsidiaries, is made known to us by others within those entities, particularly during the period inwhich this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to

be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance with generally acceptedaccounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our

conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period coveredby this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during

the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report)that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control overfinancial reporting; and


5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over

financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or personsperforming the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial

reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarizeand report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in

the registrant’s internal control over financial reporting.

Date: May 1, 2012

By: /s/ Stephen C. Forsyth

Stephen C. Forsyth

Executive Vice President and Chief Financial Officer


Exhibit 32.1

CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Chemtura Corporation (the “Company”) on Form 10-Q for the period ending March 31,2012 (the “Report”), I, Craig A. Rogerson, Chairman, President and Chief Executive Officer of the Company, certify, pursuant to 18U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of

operations of the Company.

/s/ Craig A. Rogerson

Craig A. Rogerson

Chairman, President and

Chief Executive Officer

Date: May 1, 2012

This written statement accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to theextent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the SecuritiesExchange Act of 1934. A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by theCompany and furnished to the Securities and Exchange Commission or its staff upon request.


Exhibit 32.2

CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Chemtura Corporation (the “Company”) on Form 10-Q for the period ending March 31,2012 (the “Report”), I, Stephen C. Forsyth, Executive Vice President and Chief Financial Officer, certify, pursuant to 18 U.S.C.Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of

operations of the Company.

/s/ Stephen C. Forsyth

Stephen C. Forsyth

Executive Vice President,

Chief Financial Officer,

Date: May 1, 2012

This written statement accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to theextent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the SecuritiesExchange Act of 1934. A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by theCompany and furnished to the Securities and Exchange Commission or its staff upon request.


Document and Entity Information

Document and Entity Information(USD $)

3 Months Ended03/31/2012

Entity Registrant Name Chemtura CORP

Entity Central Index Key 0001091862

Document Type 10-Q

Document Period End Date 2012-03-31

Amendment Flag false

Current Fiscal Year End Date --12-31

Entity Current Reporting Status Yes

Entity Filer Category Large Accelerated Filer

Entity Common Stock, SharesOutstanding

98,665,045

Document Fiscal Year Focus 2,012

Document Fiscal Period Focus Q1


Consolidated Statements of Operations

Consolidated Statements of Operations(USD $) (in Millions) except Per Share Data



Chemtura Agro Solutions [Member]

Statement Net sales $ 85 $ 75

Consumer Products [Member]

Statement Net sales 84 79

Industrial Engineered Products [Member]


Industrial Performance Products [Member]


ITALY

Statement Facility closures, severance and related costs

Consolidation, Eliminations [Member]

Statement Net sales (481) (440)

Cost of goods sold (481) (440)

Earnings before income taxes (5) (9)

Net earnings attributable to Chemtura (5) (9)

Guarantor Subsidiaries [Member]


Cost of goods sold 144 122

Selling, general and administrative 11 13

Depreciation and amortization 12 13

Research and development 2 2

Operating income (5) (4)

Interest expense 1

Earnings before income taxes (4) (4)


Non-Guarantor Subsidiaries [Member]






Impairment charges 1 2

Equity income (1)

Operating income 7 9

Interest expense 2 1

Other (expense) income, net (1) 6


Earnings before income taxes 8 16

Income tax benefit (expense) (1) (3)

Net earnings attributable to Chemtura 9 13

Parent Company [Member]






Changes in estimates related to expected allowable claims 2


Interest expense (17) (17)

Other (expense) income, net (3) (5)

Reorganization items, net (2) (7)










Equity income (1)






Income tax benefit (expense) 1 (3)

Net earnings attributable to Chemtura $ 22 $ 7

Basic and diluted per share information - attributable toChemtura

Net earnings attributable to Chemtura (in dollars per share) $ 0.22 $ 0.07

Weighted average shares outstanding - Basic (in shares) 98.3 100.1

Weighted average shares outstanding - Diluted (in shares) 99.1 100.1


Consolidated Statements of Comprehensive Income

Consolidated Statements of Comprehensive Income(USD $) (in Millions)




Statement Net earnings $ (5) $ (9)


Statement Net earnings (4) (4)


Statement Net earnings 9 13




Other comprehensive income, net of tax Foreign currency translation adjustments 22 31

Unrecognized pension and other post-retirement benefitcosts

2 2

Comprehensive income attributable to Chemtura $ 46 $ 40



Consolidated Balance Sheets(USD $) (in Millions) 03/31/2012 12/31/2011


NON-CURRENT ASSETS Goodwill $ 177 $ 174

Production Rights [Member]

NON-CURRENT ASSETS Intangible assets, net 17 18


ASSETS Total assets (20,682) (22,463)

LIABILITIES AND STOCKHOLDERS' EQUITY Total liabilities (8,309) (7,846)

STOCKHOLDERS' EQUITY Total stockholders' equity (12,373) (14,617)

Total liabilities and stockholders' equity (20,682) (22,463)

Customer Relationships [Member]



ASSETS CURRENT ASSETS Total current assets 252 204

NON-CURRENT ASSETS Property, plant and equipment, net 272 271

Goodwill 3 3

Total assets 4,828 4,627

LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Total current liabilities 80 79

Total liabilities 2,831 2,630

STOCKHOLDERS' EQUITY Total stockholders' equity 1,997 1,997

Total liabilities and stockholders' equity 4,828 4,627


ASSETS CURRENT ASSETS Cash and cash equivalents 119 145

Total current assets 806 745


Goodwill 81 79


LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Source: Chemtura CORP, 10-Q, May 01, 2012 Powered by Morningstar® Document Research℠

Total current liabilities 198 177




Other Intangible Assets [Member]




Total current assets 364 372


Goodwill 93 92


LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Total current liabilities 184 134




Patents [Member]


Trademarks [Member]



Restricted cash 5

Accounts receivable, net 559 458

Inventories, net 603 542

Other current assets 138 136

Total current assets 1,422 1,321


Goodwill 177 174

Intangible assets, net 394 392

Other assets 215 216


LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Short-term borrowings 63 5


Accounts payable 210 173

Accrued expenses 181 194

Income taxes payable 8 18


NON-CURRENT LIABILITIES Long-term debt 748 748

Pension and post-retirement health care liabilities 443 460

Other liabilities 221 211


STOCKHOLDERS' EQUITY Common stock - $0.01 par value Authorized - 500.0 shares Issued - 100.2 shares at March 31, 2012 and 98.3 shares at December 31, 2011 1 1

Additional paid-in capital 4,348 4,353

Accumulated deficit (2,927) (2,949)

Accumulated other comprehensive loss (322) (346)

Treasury stock at cost - 1.5 shares at March 31, 2012 and 2.0 shares at December 31, 2011 (14) (22)

Total Chemtura stockholders' equity 1,086 1,037

Non-controlling interest 8 9

Total stockholders' equity 1,094 1,046

Total liabilities and stockholders' equity $ 2,968 $ 2,855


Consolidated Balance Sheets (Parenthetical)

Consolidated Balance Sheets(Parenthetical) (USD $) 03/31/2012 12/31/2011

Common stock, par value (in dollars pershare)

$ 0.01 $ 0.01

Common stock, Authorized shares 500 500

Common stock, Issued shares 100.2 98.3

Treasury stock at cost, shares 1.5 2


Condensed Consolidated Statements of Cash Flows

Condensed Consolidated Statements of Cash Flows(USD $) (in Millions)




CASH FLOWS FROM OPERATING ACTIVITIES Net earnings $ (5) $ (9)


CASH FLOWS FROM OPERATING ACTIVITIES Net earnings (4) (4)

Adjustments to reconcile net earnings to net cash used in operatingactivities:


Net cash used in operating activities 10 10

CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditures (10) (10)

Net cash used in investing activities (10) (10)


CASH FLOWS FROM OPERATING ACTIVITIES Net earnings 9 13




Net cash used in operating activities (17) (25)

CASH FLOWS FROM INVESTING ACTIVITIES Payments for acquisitions (30)

Capital expenditures (10) (9)


CASH FLOWS FROM FINANCING ACTIVITIES (Payments on) proceeds from other short term borrowings, net (1) 1

Net cash provided by financing activities (1) 1

CASH AND CASH EQUIVALENTS Effect of exchange rates on cash and cash equivalents 2 3

Change in cash and cash equivalents (26) (60)

Cash and cash equivalents at beginning of period 145 160

Cash and cash equivalents at end of period 119 100





Stock-based compensation expense 7 8

Reorganization items, net 1 1






CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from ABL Facility, net 59 73

Net cash provided by financing activities 59 73

CASH AND CASH EQUIVALENTS Change in cash and cash equivalents (32) (28)










Equity income (1)

Changes in assets and liabilities, net of assets acquired and liabilitiesassumed:

Accounts receivable (94) (83)

Inventories (53) (65)


Pension and post-retirement health care liabilities (19) (15)

Other (22) (27)





CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from ABL Facility, net 59 73

(Payments on) proceeds from other short term borrowings, net (1) 1


CASH AND CASH EQUIVALENTS Effect of exchange rates on cash and cash equivalents 2 3



Cash and cash equivalents at end of period $ 122 $ 113


NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(USD $)


NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 1)

NATURE OF OPERATIONS ANDSUMMARY OF SIGNIFICANTACCOUNTING POLICIES

Nature of Operations Chemtura Corporation, together with ourconsolidated subsidiaries is dedicated todelivering innovative, application-focusedspecialty chemical and consumer productofferings. Our corporate headquarters is locatedat 1818 Market Street, Suite 3700, Philadelphia,PA 19103. Our principal executive offices arelocated at 1818 Market Street, Suite 3700,Philadelphia, PA 19103 and at 199 Benson Road,Middlebury, CT 06749. We operate in a widevariety of end-use industries includingagriculture, automotive, construction, electronics,lubricants, packaging, plastics for durable andnon-durable goods, pool and spa chemicals, andtransportation. When we use the terms “Corporation,”“Company,” “Chemtura,” “Registrant,” “We,”“Us” and “Our,” unless otherwise indicated or thecontext otherwise requires, we are referring toChemtura Corporation and our consolidatedsubsidiaries. We are the successor to Crompton & KnowlesCorporation (“Crompton & Knowles”), whichwas incorporated in Massachusetts in 1900 andengaged in the manufacture and sale of specialtychemicals beginning in 1954. Crompton &Knowles traces its roots to Crompton LoomWorks incorporated in the 1840s. We expandedthe specialty chemical business throughacquisitions in the United States and Europe,including the 1996 acquisition of UniroyalChemical Company, Inc. (“Uniroyal”), the 1999merger with Witco Corporation (“Witco”) and the2005 acquisition of Great Lakes ChemicalCorporation (“Great Lakes”). The information in the foregoing ConsolidatedFinancial Statements for the quarters endedMarch 31, 2012 and 2011 is unaudited but reflectsall adjustments which, in the opinion ofmanagement, are necessary for a fair presentationof the results of operations for the interim periodspresented. All such adjustments are of a normalrecurring nature, except as otherwise disclosed inthe accompanying notes to our ConsolidatedFinancial Statements. Basis of Presentation The accompanying Consolidated FinancialStatements include the accounts of Chemtura andour wholly-owned and majority-owned


subsidiaries that we control. Other affiliates inwhich we have a 20% to 50% ownership interestor a non-controlling majority interest areaccounted for in accordance with the equitymethod. Other investments in which we have lessthan 20% ownership are recorded at cost. Allsignificant intercompany balances andtransactions have been eliminated inconsolidation. Our Consolidated Financial Statements have beenprepared in conformity with U.S. generallyaccepted accounting principles (“GAAP”), whichrequire us to make estimates and assumptions thataffect the reported amounts of assets andliabilities and disclosures of contingent assets andliabilities at the date of the financial statementsand the reported amounts of revenues andexpenses during the reporting period. Actualresults could differ from these estimates. Certain prior year amounts have been reclassifiedto conform to the current year’s presentation.These changes did not have a material impact onpreviously reported results of operations, cashflows or financial position. We operated as a debtor-in-possession (“DIP”)under the protection of the United StatesBankruptcy Court for the Southern District ofNew York (the “Bankruptcy Court”) fromMarch 18, 2009 (the “Petition Date”) throughNovember 10, 2010 (the “Effective Date”). Fromthe Petition Date through the Effective Date, ourConsolidated Financial Statements were preparedin accordance with Accounting StandardsCodification (“ASC”) Section 852-10-45,Reorganizations — Other Presentation Matters(“ASC 852-10-45”) which requires that financialstatements, for periods during the pendency ofour voluntary petitions for relief under Chapter 11of Title 11 of the United States Code (the“Chapter 11”) filings, distinguish transactions andevents that are directly associated with thereorganization from the ongoing operations of thebusiness. Accordingly, certain income, expenses,realized gains and losses and expenses for lossesthat were realized or incurred in the Chapter 11cases were recorded in changes in estimatesrelated to expected allowable claims andreorganization items, net in our ConsolidatedStatements of Operations.

The interim Consolidated Financial Statementsshould be read in conjunction with theConsolidated Financial Statements and notesincluded in our Annual Report on Form 10-K forthe period ended December 31, 2011. Theconsolidated results of operations for the quarterended March 31, 2012 are not necessarilyindicative of the results expected for the full year.

Accounting Policies and Other Items Cash and cash equivalents include bank termdeposits with original maturities of three months


or less. Included in cash and cash equivalents inour Consolidated Balance Sheets at bothMarch 31, 2012 and December 31, 2011 is $1million of restricted cash that is required to be ondeposit to support certain letters of credit andperformance guarantees, the majority of whichwill be settled within one year. Included in our restricted cash balance atDecember 31, 2011 is $5 million of cash ondeposit for the settlement of disputed bankruptcyclaims that existed at the Effective Date. Included in accounts receivable are allowancesfor doubtful accounts of $20 million as ofMarch 31, 2012 and December 31, 2011. During the quarters ended March 31, 2012 and2011, we made interest payments ofapproximately $23 million. During the quartersended March 31, 2012 and 2011, we madepayments for income taxes (net of refunds) of $12million and $4 million, respectively. Accounting Developments In May 2011, the Financial Accounting StandardsBoard (“FASB”) issued ASU No. 2011-04,Amendments to Achieve Common Fair ValueMeasurement and Disclosure Requirements inU.S. GAAP and IFRSs (“ASU 2011-04”). ASU2011-04 amends U.S. GAAP to conform it withfair value measurement and disclosurerequirements in International Financial ReportingStandards (“IFRS”). The amendments in ASU2011-04 changed the wording used to describe therequirements in U.S. GAAP for measuring fairvalue and for disclosing information about fairvalue measurements. The provisions of ASU2011-04 are effective for the first reporting period(including interim periods) beginning afterDecember 15, 2011. The adoption of thisstandard did not have a material impact on ourresults of operations, financial condition ordisclosures. In June 2011, the FASB issued ASUNo. 2011-05, Presentation of ComprehensiveIncome (“ASU 2011-05”). ASU 2011-05 requiresthe presentation of comprehensive income, thecomponents of net income and the components ofother comprehensive income either in a singlecontinuous statement of comprehensive income orin two separate but consecutive statements. InDecember 2011, the FASB issued AccountingStandards Update No. 2011-12, Deferral of theEffective Date for Amendments to thePresentation of Reclassifications of Items Out ofAccumulated Other Comprehensive Income inAccounting Standards Update No. 2011-05(“ASU 2011-12”). ASU 2011-12 defers theeffective date of the requirement in ASU 2011-05to disclose on the face of the financial statementsthe effects of reclassifications out of accumulatedother comprehensive income on the components


of net income and other comprehensive income.All other requirements of ASU 2011-05 are notaffected by ASU 2011-12. The provisions ofASU 2011-05 are effective for the first reportingperiod (including interim periods) beginning afterDecember 15, 2011. The adoption of thisstandard did not have a material financialstatement impact as it only addressed thepresentation of our financial statements. In September 2011, the FASB issued ASUNo. 2011-08, Intangibles — Goodwill and Other(Topic 350): Testing Goodwill for Impairment.The guidance in ASU 2011-08 is intended toreduce complexity and costs by allowing an entitythe option to make a qualitative evaluation aboutthe likelihood of goodwill impairment todetermine whether it should calculate the fairvalue of a reporting unit. The amendment alsoimproved previous guidance by expanding uponthe examples of events and circumstances that anentity should consider between annualimpairment tests in determining whether it ismore likely than not that the fair value of areporting unit is less than its carrying amount.The provisions of this ASU are effective forannual and interim goodwill impairment testsperformed for fiscal years beginning afterDecember 15, 2011, with early adoptionpermitted. The adoption of this guidance will nothave a material impact on our results ofoperations or financial condition. In September 2011, the FASB issued ASUNo. 2011-09, Compensation—Retirement BenefitsMultiemployer Plans (Subtopic 715-80). Theguidance in ASU 2011-09 assists users offinancial statements to assess the potential futurecash flow implications relating to an employer’sparticipation in multiemployer pension plans. Thedisclosures will indicate the financial health of allof the significant plans in which the employerparticipates and assist a financial statement userto access additional information that is availableoutside the financial statements. The provisions ofthe ASU 2011-09 are effective for annual periodsfor fiscal years ending after December 15, 2011,with early adoption permitted. The adoption ofthis guidance did not have a material impact onour results of operations or financial condition.


RESTRUCTURING ACTIVITIES

RESTRUCTURING ACTIVITIES(USD $)


RESTRUCTURING ACTIVITIES 2)

RESTRUCTURING ACTIVITIES Corporate Restructuring Programs On April 30, 2012, our Board of Directors (the “Board”) approved a restructuring plan providing for,among other things, the closure of our Industrial Performance Product segment’s antioxidantsmanufacturing facility in Pedrengo, Italy. The Board also approved actions to improve the operatingeffectiveness of certain global corporate functions. This plan is expected to achieve significant gainsin efficiency and costs. The plant closure is expected to be completed by the first quarter of 2013. The restructuring plan is anticipated to generate cash savings of approximately $15 million in 2013. We anticipate recording a pre-tax charge of approximately $30 million in the second quarter of 2012for accelerated depreciation of property, plant and equipment, asset retirement obligations, severanceand related costs with the balance of the costs being expensed as incurred through 2013. The totalcost of the restructuring plan is estimated to be approximately $40 million of which approximately $6million will consist of non-cash charges, for a net cash cost of approximately $34 million. In November 2011, our Board approved a restructuring plan intended to make ChemturaAgroSolutions more cost efficient by centralizing certain functions regionally and consolidatinglaboratory activities in North America. Costs related to this plan were immaterial for the quarter endedMarch 31, 2012. Reorganization Initiatives On January 25, 2010, our Board approved an initiative involving the consolidation and idling ofcertain assets within the Great Lakes Solutions business operations in El Dorado, Arkansas, which wasapproved by the Bankruptcy Court on February 23, 2010. During 2010 and 2011, the demand forbrominated products used in electronic applications grew significantly and it became evident that wewould need to produce larger quantities of bromine than were projected when we formulated ourconsolidation plan. In addition, in the first quarter of 2011, our joint venture partner informed us thatthey would exercise their right to purchase our interest in our Tetrabrom joint venture in the MiddleEast that supplies a brominated flame retardant to us. While under the terms of the joint ventureagreement, the purchaser is obligated to continue to supply the current volumes of the brominatedflame retardant to us for two years following the acquisition, we needed to plan for the ultimateproduction of this product once supply from the joint venture terminated. Our analysis indicated thatthe most cost effective source of the additional bromine we require is to continue to operate many ofthe bromine assets we had planned to idle and to invest to improve their operating efficiency. In lightof this analysis, on April 20, 2011, our Board confirmed that we should defer a portion of the ElDorado restructuring plan and continue to operate certain of the bromine and brine assets that wereplanned to be idled. The sale of our 50% interest in Tetrabrom Technologies Ltd. was completed inNovember 2011. As a result of our reorganization initiatives, we recorded pre-tax charges of $1 million for the quarterended March 31, 2011, primarily for accelerated depreciation. The amounts accrued for all of our reorganization initiatives and corporate restructuring programs isless than $1 million at March 31, 2012 and $1 million at December 31, 2011 and were included inaccrued expenses.


INVENTORIES

INVENTORIES(USD $)


INVENTORIES 3)

INVENTORIES Components of inventories are as follows:

March 31,

December 31,

(In millions)

2012

2011

Finished goods

$ 401

$ 348

Work in process

46

43


156

151

$ 603

$ 542

Included in the above net inventory balances are inventory obsolescence reserves of approximately $18 million atMarch 31, 2012 and December 31, 2011.


PROPERTY, PLANT AND EQUIPMENT

PROPERTY, PLANT AND EQUIPMENT(USD $)


PROPERTY, PLANT AND EQUIPMENT 4)


March 31,

December 31,

(In millions)

2012

2011


$ 81

$ 85

Buildings andimprovements

243

240

Machinery andequipment

1,266

1,238

Information systemsequipment

188

175

Furniture, fixtures andother

32

31


123

121

1,933

1,890

Less: accumulateddepreciation

(1,173) (1,138)

$ 760

$ 752

Depreciation expense amounted to $24 million and $26 million for the quarters endedMarch 31, 2012 and 2011, respectively. Depreciation expense included accelerateddepreciation of certain fixed assets associated with our restructuring programs of $1 million forthe quarter ended March 31, 2011.


GOODWILL AND INTANGIBLE ASSETS

GOODWILL AND INTANGIBLE ASSETS(USD $)


GOODWILL AND INTANGIBLEASSETS 5)

GOODWILL AND INTANGIBLE ASSETS Our goodwill balance was $177 million at March 31, 2012 and $174 million at December 31,2011. The goodwill is allocated entirely to the Industrial Performance Products segment. Thegoodwill balance at March 31, 2012 and December 31, 2011 reflected accumulated impairmentsof $90 million. We have elected to perform our annual goodwill impairment procedures for all of our reportingunits in accordance with ASC Subtopic 350-20, Intangibles — Goodwill and Other - Goodwill(“ASC 350-20”) as of July 31, or sooner, if events occur or circumstances change that wouldmore likely than not reduce the fair value of a reporting unit below its carrying value. Weestimate the fair value of our reporting units utilizing income and market approaches throughthe application of discounted cash flow and market comparable methods (Level 3 inputs asdescribed in Note 13 — Financial Instruments and Fair Value Measurements). The assessmentis required to be performed in two steps: step one to test for a potential impairment of goodwilland, if potential impairments are identified, step two to measure the impairment loss through afull fair valuing of the assets and liabilities of the reporting unit utilizing the acquisition methodof accounting. We concluded that no goodwill impairment existed in any of our reporting unitsbased on the annual review as of July 31, 2011. We continually monitor and evaluate business and competitive conditions that affect ouroperations and reflects the impact of these factors in our financial projections. If permanent orsustained changes in business or competitive conditions occur, they can lead to revisedprojections that could potentially give rise to impairment charges. Our intangible assets (excluding goodwill) are comprised of the following:

March 31, 2012

December 31, 2011

(In millions)

Gross Cost


Net Intangibles

Gross Cost


Net Intangibles

Patents $ 131

$ (73) $ 58

$ 128

$ (70) $ 58

Trademarks

264

(74) 190

262

(71) 191

Customerrelationships

147

(52) 95

146

(50) 96

Production rights

46

(29) 17

46

(28) 18

Other

77

(43) 34

70

(41) 29

Total $ 665

$ (271) $ 394

$ 652

$ (260) $ 392

The increase in gross intangible assets since December 31, 2011 is primarily due to additions of$8 million and foreign currency translation of $5 million. Amortization expense related to intangible assets amounted to $9 million and $11 million forthe quarters ended March 31, 2012 and 2011, respectively.


DEBT

DEBT(USD $)


DEBT 6)

DEBT Our debt is comprised of the following:

March 31,

December 31,

(In millions)

2012

2011

7.875% Senior Notes due 2018

$ 452

$ 452

Term Loan due 2016

293

293

ABL Facility

59

—

Other borrowings

7

8

Total debt

811

753

Less: ABL Facility

(59) —

Less: Other short-term borrowings

(4) (5)

Long-term debt

$ 748

$ 748

Financing Facilities On August 27, 2010, we completed a private placement offering under Rule 144A of $455 million aggregate principalamount of 7.875% senior notes due 2018 (the “Senior Notes”) at an issue price of 99.269% in reliance on an exemptionpursuant to Section 4(2) of the Securities Act of 1933. We also entered into a senior secured term facility credit agreementdue 2016 (the “Term Loan”) with Bank of America, N.A., as administrative agent, and other lenders party thereto for anaggregate principal amount of $295 million with an original issue discount of 1%. The Term Loan permits us to increasethe size of the facility by up to $125 million. On November 10, 2010, we entered into a five-year senior secured revolvingcredit facility available through 2015 (the “ABL Facility”) for an amount up to $275 million, subject to availability under aborrowing base (with a $125 million letter of credit sub-facility). The ABL Facility permits us to increase the size of thefacility by up to $125 million subject to obtaining lender commitments to provide such increase. At March 31, 2012, wehad $59 million of borrowings under the ABL Facility and $15 million of outstanding letters of credit (primarily related toinsurance obligations, environmental obligations and banking credit facilities), which utilizes available capacity under thefacility. At December 31, 2011, we had no borrowings under the ABL Facility, but we had $15 million of outstandingletters of credit. At March 31, 2012 and December 31, 2011, we had approximately $201 million of undrawn availabilityunder the ABL Facility. These facilities contain covenants that limit, among other things, our ability to enter into certain transactions, such ascreating liens, incurring additional indebtedness or repaying certain indebtedness, making investments, paying dividends,and entering into acquisitions, dispositions and joint ventures. The Term Loan requires that we meet certain quarterlyfinancial maintenance covenants including a maximum Secured Leverage Ratio (as defined in the agreement) of 2.5:1.0and a minimum Consolidated Interest Coverage Ratio (as defined in the agreement) of 3.0:1.0. The ABL Facility containsa springing financial covenant requiring a minimum trailing 12-month fixed charge coverage ratio (as defined in theagreement) of 1.1 to 1.0 at all times during any period from the date when the amount available for borrowings under theABL Facility falls below the greater of (i) $34 million and (ii) 12.5% of the aggregate commitments until such date suchavailable amount has been equal to or greater than the greater of (i) $34 million and (ii) 12.5% of the aggregatecommitments for 45 consecutive days. As of March 31, 2012, we were in compliance with the covenant requirements ofthese financing facilities.

Accounts Receivable Financing Facility On October 26, 2011, certain of our European subsidiaries (the “Sellers”) entered into a trade receivables financing facility(the “A/R Financing Facility”) with GE FactoFrance SAS as purchaser (the “Purchaser”). Pursuant to the A/R FinancingFacility, and subject to certain conditions stated therein, the Purchaser has agreed to purchase from the Sellers, on arevolving basis, certain trade receivables up to a maximum amount outstanding at any time of €68 million (approximately$90 million). The A/R Financing Facility is uncommitted and has an indefinite term. Since availability under the A/RFinancing Facility is expected to vary depending on the value of the Seller’s eligible trade receivables, the Sellers’availability under the A/R Financing Facility may increase or decrease from time to time. The monthly financing fee onthe drawn portion of the A/R Financing Facility is the applicable Base Rate plus 1.50%. In addition, the A/R FinancingFacility is subject to a minimum commission on the annual volume of transferred receivables. We had no outstandingborrowings under the A/R Financing Facility, for the period ending March 31, 2012 and December 31, 2011.


INCOME TAXES

INCOME TAXES(USD $)


INCOME TAXES 7)

INCOME TAXES We reported an income tax benefit of $1 million and expense of $3 million for the quarters ended March 31, 2012and 2011, respectively. We have offset our current year-to-date U.S. income with net operating loss carryforwardsand reduced the associated valuation allowance. We will continue to adjust our tax provision through theestablishment or reduction of non-cash valuation allowances until we determine that it is more-likely than not thatthe net deferred tax assets associated with our U.S. operations will be utilized. We have net liabilities related to unrecognized tax benefits of $49 million and $46 million at March 31, 2012 andDecember 31, 2011, respectively. The increase is primarily due to currency fluctuation. We recognize interest and penalties related to unrecognized tax benefits as income tax expense. Accrued interestand penalties are primarily included within other liabilities in our Consolidated Balance Sheet. We believe it is reasonably possible that our unrecognized tax benefits may decrease by approximately $22 millionwithin the next year. This reduction may occur due to the expiration of the statute of limitations or conclusion ofexaminations by tax authorities. We further expect that the amount of unrecognized tax benefits will continue tochange as a result of ongoing operations, the outcomes of audits and the expiration of the statue of limitations. Thischange is not expected to have a significant impact on our financial condition.


ACCUMULATED OTHER COMPREHENSIVE LOSS

ACCUMULATED OTHER COMPREHENSIVE LOSS(USD $)


ACCUMULATED OTHER COMPREHENSIVE LOSS 8)

ACCUMULATED OTHER COMPREHENSIVE LOSS The components of accumulated other comprehensive loss (“AOCL”), net of tax atMarch 31, 2012 and December 31, 2011, are as follows:

March 31,

December 31,

(In millions)

2012

2011


$ 75

$ 53


(397) (399)

Accumulated other comprehensive loss

$ (322) $ (346)


EARNINGS PER COMMON SHARE

EARNINGS PER COMMON SHARE(USD $)


EARNINGS PER COMMON SHARE 9)

EARNINGS PER COMMON SHARE The computation of basic earnings per common share is based on the weighted average number ofcommon shares outstanding. The computation of diluted earnings per common share is based onthe weighted average number of common and common share equivalents outstanding. The following is a reconciliation of the shares used in the computation of earnings per share:


(In millions)

2012

2011

Weighted average shares outstanding- Basic

98.3

100.1

Dilutive effect of common shareequivalents

0.8

—

Weighted average shares outstanding

- Diluted

99.1

100.1

At March 31, 2012 and 2011, 0.3 million performance based restricted stock units (“PSU’s”) and 1million bonus units with a performance criteria, respectively, were excluded from the calculationof diluted earnings per share because the specified performance criteria for the vesting of theseunits had not yet been met. The PSU’s and bonus units could be dilutive in the future if thespecified performance criteria are met. On October 18, 2011, we announced that our Board had authorized us to repurchase up to $50million of our common stock over the next twelve months. The shares are expected to berepurchased from time to time through open market purchases. The program, which does notobligate us to repurchase any particular amount of common stock, may be modified or suspendedat any time at the Board’s discretion. The manner, price, number and timing of such repurchases,if any, will be subject to a variety of factors, including market conditions and the applicablerules and regulations of the Securities and Exchange Commission (“SEC”). As of March 31, 2012,we had cumulatively purchased 2.0 million shares for $22 million. No purchases were made duringthe first quarter of 2012.


STOCK INCENTIVE PLANS

STOCK INCENTIVE PLANS(USD $)


STOCK INCENTIVE PLANS 10)

STOCK INCENTIVE PLANS In 2010, we adopted the Chemtura Corporation 2010 Long-Term Incentive Plan (the “2010 LTIP”),which was approved by the Bankruptcy Court and became effective upon our emergence from Chapter11. The 2010 LTIP provides for grants of nonqualified stock options (“NQOs”), incentive stock options(“ISOs”), stock appreciation rights, dividend equivalent rights, stock units, bonus stock, performanceawards, share awards, restricted stock, time-based restricted stock units (“RSUs”) and performance-basedRSUs. The 2010 LTIP provides for the issuance of a maximum of 11 million shares. NQOs and ISOsmay be granted under the 2010 LTIP at prices equal to the fair market value of the underlying commonshares on the date of the grant. All outstanding stock options will expire not more than ten years from thedate of the grant. As of March 31, 2012, grants authorized under the 2010 LTIP included the 2009Emergence Incentive Plan (the “2009 EIP”), the 2010 Emergence Incentive Plan (the “2010 EIP”), the2011 long-term incentive awards (the “2011 LTIA”), the 2012 long-term incentive awards (the “2012LTIA”) and the 2010 Emergence Award Plan (the “2010 EAP”), as well as other grants made to theBoard. All grants of NQOs have an exercise price equal to the fair market value of the underlyingcommon stock at the date of grant. Stock-based compensation expense was $7 million and $8 million for the quarters ended March 31, 2012and March 31, 2011, respectively. Stock-based compensation expense was primarily reported in SG&A. Stock Option Plans In March 2012, our Board approved the grant of 0.8 million NQOs under our 2012 LTIA. These optionvest ratably over a three-year period. In March 2011, under the 2010 EIP, we granted 0.8 million NQOs. One third vested immediately, onethird vested on March 31, 2012 and one third vests on March 31, 2013. In March 2011, our Board approved the grant of 1.4 million NQOs under our 2011 LTIA. These optionswill vest ratably over a three-year period. We use the Black-Scholes option-pricing model to determine the fair value of NQOs. We have elected torecognize compensation cost for awards of NQOs equally over the requisite service period for eachseparately vesting tranche, as if multiple awards were granted. Using this method, the weighted averagefair value of stock options granted during the quarters ended March 31, 2012 and March 31, 2011 was$8.14 and $8.40, respectively. Total remaining unrecognized compensation expense associated with unvested NQOs at March 31, 2012was $13 million, which will be recognized over the weighted average period of approximately 2 years.

Restricted Stock Units In March 2012, our Board approved the grant of 0.6 million time-based RSU’s under our 2012 LTIA. These RSU’s will vest ratably over a three-year period. In March 2012, the Board approved the grant of 0.3 million performance shares under the 2012 LTIA. The share grant is subject to a performance multiplier of up to 2 times the targeted award. Theperformance measurement period is the three calendar year period ending December 31, 2014, theperformance share metric used will be our relative total shareholder return against the companiescomprising the Russell 3000 Index, and the performance shares will be settled on March 1, 2015. Weused the Monte-Carlo simulation model to determine the fair value of the performance shares. Using thismethod, the average per share fair value of these awards was $25.38. In March 2011, under the 2010 EIP, we granted 0.4 million time-based RSU’s with a fair market value ofthe quoted closing price of our stock on that date. One third vested immediately, one third vested onMarch 31, 2012 and one third vests on March 31, 2013. In March 2011, our Board approved the grant of 0.4 million time-based RSU’s under our 2011 LTIA. These RSU’s vest ratably over a three-year period.


In March 2011, we established the initial allocations under the 2010 EAP, which was previouslyapproved by the Bankruptcy Court and provided designated participants with the opportunity to share in apool of up to 1 million fully vested shares of common stock. The portion of the 2010 EAP pool to bedistributed would be determined by Chemtura’s consolidated earnings before interest, taxes, depreciationand amortization expense (“EBITDA”) during the fiscal year 2011. In March 2012, the compensationcommittee approved the allocation of specified percentage interests in the 2010 EAP pool amongdesignated participants, including our named executive officers. Under the formula established inbankruptcy, our 2011 consolidated EBITDA resulted in a payout of 57% of the total 2010 EAP pool of 1million shares, or 0.6 million shares, which were distributed to the participants in March 2012. In February 2011, we granted 0.1 million time-based RSU’s to non-employee directors with a fair marketvalue of the quoted closing price of our stock on that date. These RSU’s vest ratably over a two-yearperiod. Total remaining unrecognized compensation expense associated with unvested time-based andperformance based RSU’s at March 31, 2012 was $19 million, which will be recognized over theweighted average period of approximately 3 years.


PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS

PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS(USD $)


PENSION AND OTHER POST-RETIREMENT BENEFITPLANS 11)

PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS Components of our defined benefit plans net periodic benefit (credit) cost for thequarters ended March 31, 2012 and 2011 are as follows:

Defined Benefit Plans

Qualified

International and

Post-Retirement

U.S. Plans

Non-Qualified Plans

Health Care Plans




(In millions)

2012

2011

2012

2011

2012

2011

Service cost

$ —

$ —

$ 1

$ 1

$ —

$ —

Interest cost

11

12

5

5

1

1

Expected returnon plan assets

(14) (14) (5) (4) —

—

Amortization ofprior servicecost

—

3

—

—

(1) —

Amortization ofactuariallosses

4

—

—

—

1

(1)

Net periodic

benefit cost $ 1

$ 1

$ 1

$ 2

$ 1

$ —

We contributed $15 million to our U.S. qualified pension plans, $1 million to ourU.S. non-qualified pension plans and $3 million to our international pension plansfor the quarter ended March 31, 2012. Contributions to post-retirement health careplans for the quarter ended March 31, 2012 were $3 million. On November 18, 2009, the Bankruptcy Court entered an order (the “2009 OPEBOrder”) approving, in part, our motion (the “2009 OPEB Motion”) requestingauthorization to modify certain post-retirement welfare benefits (the “OPEBBenefits”) under our post-retirement welfare benefit plans (the “OPEB Plans”),including the OPEB Benefits of certain Uniroyal salaried retirees (the “UniroyalSalaried Retirees”). On April 5, 2010, the Bankruptcy Court entered an orderdenying the Uniroyal Salaried Retirees’ motion to reconsider the 2009 OPEB Orderbased, among other things, on the Uniroyal Salaried Retirees’ failure to file a timelyobjection to the 2009 OPEB Motion. On April 8, 2010, the Uniroyal SalariedRetirees appealed the Bankruptcy Court’s April 5, 2010 order and on April 14, 2010,sought a stay pending their appeal (the “Stay”) of the 2009 OPEB Order as to ourright to modify the OPEB Benefits. On April 21, 2010, the Bankruptcy Court orderedus not to modify the Uniroyal Salaried Retirees’ OPEB Benefits, pending a hearingand decision as to the Stay. After consulting with the official committees ofunsecured creditors and equity security holders, we requested that the BankruptcyCourt have a hearing to decide, as a matter of law, whether we have the right tomodify the OPEB Benefits of the Uniroyal Salaried Retirees as requested in the 2009OPEB Motion. In November 2011, we reached an agreement in principle with asteering committee of the Uniroyal Salaried Retirees resolving all disputesconcerning the 2009 OPEB Motion. On February 21, 2012, we filed a motion withthe Bankruptcy Court seeking approval of a settlement stipulation with the steeringcommittee of the Uniroyal Salaried Retirees based upon the prior agreement inprinciple and authorizing us to implement changes to the OPEB Benefits of allUniroyal Salaried Retirees based upon the settlement stipulation and as a partialgrant of the relief requested in the 2009 OPEB Motion. The Bankruptcy Courtapproved the motion at a hearing held on March 29, 2012. We are in the process ofdetermining the impact and will communicate the changes to the participants in thesecond quarter of 2012. On May 9, 2011, one of our UK subsidiaries entered into definitive agreements with


the trustees of the Great Lakes U.K. Limited Pension Plan (“UK Pension Plan”) overthe terms of a “recovery plan” which provided for a series of additional cashcontributions to be made to reduce the underfunding over time. The agreementsprovided, among other things, for our UK subsidiary to make cash contributions of£60 million (approximately $96 million) in just over a three year period, with theinitial contribution of £30 million ($49 million) made in the second quarter of 2011. The second contribution of £15 million ($24 million) is to be made in May 2012. The agreements also provided for the granting of both a security interest and aguarantee to support certain of the liabilities under the UK Pension Plan.

There is also an evaluation being undertaken as to whether additional benefitobligations exist in connection with the equalization of certain benefits under the UKPension Plan that occurred in the early 1990s. Based on the results of the evaluationto date, $8 million of expense was recorded in the fourth quarter of 2011, which maybe subject to adjustment as further information is gathered as part of the evaluation.Upon completion of the evaluation and the finalization of the liability with respect toadditional benefit obligations, additional cash contributions to the UK Pension Planmay be required starting in 2013. There were no changes to the evaluation duringthe first quarter of 2012.


DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES(USD $)


DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES 12)

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES Our activities expose our earnings, cash flows and financial condition to avariety of market risks, including the effects of changes in foreign currencyexchange rates, interest rates and energy prices. We maintain a riskmanagement strategy that may utilize derivative instruments to mitigate riskagainst foreign currency movements. We do not enter into derivativeinstruments for trading or speculative purposes. We have exposure to changes in foreign currency exchange rates resultingfrom transactions entered into by us and our foreign subsidiaries incurrencies other than their functional currency (primarily trade payables andreceivables). We are also exposed to currency risk on intercompanytransactions (including intercompany loans). We manage these currencyrisks on a consolidated basis, which allows us to net our exposure. Prior toour Chapter 11 filing we purchased foreign currency forward contracts tomanage our exposure. In February 2012, we purchased forward contracts tooffset the effects of foreign currency on a receivable related to the sale of our50% interest in Tetrabrom Technologies Ltd. in 2011 (see Note 15 —Acquisition and Divestitures for additional information).


FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS(USD $)


FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS 13)

FINANCIAL INSTRUMENTS AND FAIR VALUEMEASUREMENTS

Financial Instruments The carrying amounts for cash and cash equivalents, accountsreceivable, other current assets, accounts payable and other currentliabilities, approximate their fair value because of the short-termmaturities of these instruments. The fair value of debt is basedprimarily on quoted market values. The following table presents the carrying amounts and estimated fairvalues of material financial instruments used by us in the normalcourse of business:



Carrying

Fair

Carrying

Fair

(In millions) Amount

Value

Amount

Value

Total debt

$ 811

$ 861

$ 753

$ 777

Fair Value Measurements We apply the provisions of ASC 820 with respect to our financialassets and liabilities that are measured at fair value within thefinancial statements on a recurring basis. ASC 820 specifies ahierarchy of valuation techniques based on whether the inputs to thosevaluation techniques are observable or unobservable. Observableinputs reflect market data obtained from independent sources, whileunobservable inputs reflect our market assumptions. The fair valuehierarchy specified by ASC 820 is as follows:

•

Level 1 — Quoted prices in active markets for identicalassets and liabilities.

•

Level 2 — Quoted prices for similar assets and liabilities inactive markets, quoted prices for identical or similar assetsand liabilities in markets that are not active or other inputsthat are observable or can be corroborated by observablemarket date.

•

Level 3 — Unobservable inputs that are supported by littleor no market activity and that are significant to the fairvalue of the assets and liabilities.

Level 1 fair value measurements in 2012 and 2011 included securitiespurchased in connection with the deferral of compensation, our matchand investment earnings related to the supplemental savings plan.These securities are considered our general assets until distributed tothe participants and are included in other assets in our ConsolidatedBalance Sheets. A corresponding liability is included in otherliabilities at March 31, 2012 and December 31, 2011 in ourConsolidated Balance Sheets. Quoted market prices were used todetermine fair values of the Level 1 investments held in a trust with athird-party brokerage firm. The fair value of the asset andcorresponding liability was $1 million at March 31, 2012 andDecember 31, 2011. Level 2 fair value measurements are used tovalue our foreign currency forward contracts (see Note 15 —Acquisitions and Divestitures). For the quarter ended March 31,


2012, there were no transfers into or out of Levels 1 and 2. Level 3 fair value measurements are utilized in our impairmentreviews of Goodwill (see Note 5 — Goodwill and Intangible Assets). Level 1, 2 and 3 fair value measurements are utilized for definedbenefit plan assets in determining the funded status of our pension andpost-retirement benefit plan liabilities on an annual basis (atDecember 31).


ASSET RETIREMENT OBLIGATIONS

ASSET RETIREMENT OBLIGATIONS(USD $)


ASSET RETIREMENT OBLIGATIONS 14)

ASSET RETIREMENT OBLIGATIONS We apply the provisions of ASC Topic 410, Asset Retirements and Environmental Obligations(“ASC 410”), which require companies to make estimates regarding future events in order torecord a liability for asset retirement obligations in the period in which a legal obligation iscreated. Such liabilities are recorded at fair value, with an offsetting increase to the carryingvalue of the related long-lived assets. The fair value is estimated by discounting projected cashflows over the estimated life of the assets using our credit adjusted risk-free rate applicable at thetime the obligation is initially recorded. In future periods, the liability is accreted to its presentvalue and the capitalized cost is depreciated over the useful life of the related asset. We alsoadjust the liability for changes resulting from revisions to the timing of future cash flows or theamount of the original estimate. Upon retirement of the long-lived asset, we either settle theobligation for its recorded amount or incur a gain or loss. Our asset retirement obligations include estimates for all asset retirement obligations identifiedfor our worldwide facilities. Our asset retirement obligations are primarily the result of legalobligations for the removal of leasehold improvements and restoration of premises to theiroriginal condition upon termination of leases at approximately 20 facilities; legal obligations toclose approximately 90 brine supply, brine disposal, waste disposal, and hazardous wasteinjection wells and the related pipelines at the end of their useful lives; and decommissioning anddecontamination obligations that are legally required to be fulfilled upon closure ofapproximately 30 of our manufacturing facilities. The following is a summary of the change in the carrying amount of the asset retirementobligations for the quarters ended March 31, 2012 and 2011 and the net book value of assetsrelated to the asset retirement obligations at March 31, 2012 and 2011:


(In millions)

2012

2011

Asset retirement obligation balance at beginningof period

$ 21

$ 23

Accretion expense — cost of goods sold

—

1

Payments

(1) —

Asset retirement obligation balance at end ofperiod

$ 20

$ 24

Net book value of asset retirement obligation

assets at end of period

$ 1

$ 1

Depreciation expense for the quarters ended March 31, 2012 and 2011 was less than $1 million. At March 31, 2012 and December 31, 2011, $5 million and $6 million, respectively of assetretirement obligations were included in accrued expenses and $15 million was included in otherliabilities for both periods on the Consolidated Balance Sheet.


ACQUISITIONS AND DIVESTITURES

ACQUISITIONS AND DIVESTITURES(USD $)


ACQUISITIONS AND DIVESTITURES 15)

ACQUISITIONS AND DIVESTITURES Acquisitions On January 26, 2011, we announced the formation of ISEM S.r.l. (“ISEM”), a strategic researchand development alliance with Isagro S.p.A., which will provide us access to twocommercialized products and accelerate the development and commercialization of new activeingredients and molecules related to our Chemtura AgroSolutions segment. ISEM is a 50/50joint venture between us and Isagro S.p.A. and is being accounted for as an equity methodinvestment. Our investment in the joint venture was €20 million ($29 million), which was madein January 2011. In addition, we and Isagro S.p.A. have agreed to jointly fund discovery anddevelopment efforts for ISEM, for approximately $2 million annually from each partner for fiveyears. During 2011, we funded approximately $2 million as planned. Funding our contributionswill be done in part by reducing our planned direct research and development spending. On February 1, 2011, we announced the formation of DayStar Materials, LLC, a joint venturewith UP Chemical Co. Ltd. that will manufacture and sell high purity metal organic precursorsfor the rapidly growing LED market in our Industrial Engineered Products segment. DayStarMaterials, LLC is a 50/50 joint venture and is being accounted for as an equity methodinvestment. We made cash contributions of $6 million in 2011, in accordance with the jointventure agreement. Divestitures


On November 28, 2011, we sold our 50% interest in Tetrabrom Technologies Ltd. for netconsideration of $38 million. The consideration will be paid over a three year period beginningin April 2012. A payment of $9 million was received in April 2012. A pre-tax gain of $27million was recorded on the sale in the fourth quarter of 2011. In February 2012, we purchasedforward contracts with a notional amount of $38 million to reduce the risk of currency exposurerelated to the three annual installments of this receivable. These contracts matured inApril 2012. Upon maturity, additional contracts were purchased to off set foreign currencyexposure on the remaining annual payments due through 2014. We use fair value accountingmethods for these contracts and have recorded a gain of less than $1 million reflecting thechanges in the fair market value of these contracts in other (expense) income, net in ourConsolidated Statement of Operations. The resulting net asset of the changes in fair marketvalue of these contracts has been accounted for in other current assets and other long-term assetsin our Consolidated Balance Sheet.


EMERGENCE FROM CHAPTER 11

EMERGENCE FROM CHAPTER 11(USD $)


EMERGENCE FROM CHAPTER 11 16)

EMERGENCE FROM CHAPTER 11 On March 18, 2009 (the “Petition Date”) Chemtura and 26 of our U.S. affiliates (collectively the“U.S. Debtors” or the “Debtors” when used in relation to matters before August 8, 2010) filedvoluntary petitions for relief under Chapter 11 of Title 11 of the United States Code (“Chapter 11”)in the United States Bankruptcy Court for the Southern District of New York (the “BankruptcyCourt”). On August 8, 2010, our Canadian subsidiary, Chemtura Canada Co/Cie (“Chemtura Canada”), fileda voluntary petition for relief under Chapter 11. On August 11, 2010, Chemtura Canadacommenced ancillary recognition proceedings under Part IV of the Companies’ CreditorsArrangement Act (the “CCAA”) in the Ontario Superior Court of Justice, (the “Canadian Court”and such proceedings, the “Canadian Case”). The U.S. Debtors along with Chemtura Canada afterit filed for Chapter 11 (collectively the “Debtors”) requested the Bankruptcy Court to enter an orderjointly administering Chemtura Canada’s Chapter 11 case with the previously filed Chapter 11cases and appoint Chemtura Canada as the “foreign representative” for the purposes of theCanadian Case. Such orders were granted on August 9, 2010. On August 11, 2010, the CanadianCourt entered an order recognizing the Chapter 11 cases as a “foreign proceedings” under theCCAA. On November 3, 2010, the Bankruptcy Court entered an order confirming the Debtors’ plan ofreorganization (the “Plan”). On November 10, 2010 (the “Effective Date”), the Debtorssubstantially consummated their reorganization through a series of transactions contemplated bythe Plan and the Plan became effective. In March 2011, we made a supplemental distribution to holders of previously issued common stock(“Holders of Interests”) as authorized by the Bankruptcy Court. The supplemental distributionincluded payments of $3 million in stock, valuing the stock at the Plan valuation.

On June 10, 2011, we filed a closing report in Chemtura Canada’s Chapter 11 case and a motionseeking a final decree closing that Chapter 11 case. On June 23, 2011, the Bankruptcy Courtgranted our motion and entered a final decree closing the Chapter 11 case of Chemtura Canada. In August 2011, we made a second supplemental distribution to Holders of Interests as authorizedby the Bankruptcy Court. The supplemental distribution included payments of $2 million in cashand $12 million in stock, valuing the stock at the Plan valuation. On December 1, 2011, we filed a motion requesting entry of an order granting a final decreeclosing the Chapter 11 cases of 22 Debtors (the “Fully Administered Debtors”):


• Crompton ColorsIncorporated

• Laurel Industries Holdings,Inc.

• Aqua Clear Industries, LLC

• Crompton HoldingCorporation

• Monochem, Inc.

• ASEPSIS, Inc.


• Naugatuck TreatmentCompany

• ASCK, Inc.

• Great Lakes ChemicalGlobal, Inc.

• Recreational Water Products,Inc.

• BioLab Company Store, LLC • GT Seed Treatment, Inc.

• Weber City Road LLC

• Biolab Franchise Company,LLC



• BioLab Textile Additives,LLC

• ISCI, Inc.

• CNK Chemical RealtyCorporation

• Kem ManufacturingCorporation

On December 15, 2011, the Bankruptcy Court entered an order granting a final decree closing theFully Administered Debtors’ Chapter 11 cases.


On January 5, 2012, we filed a motion with the Bankruptcy Court seeking authority to make a thirdsupplemental distribution to Holders of Interests, which was granted by the Bankruptcy Court onJanuary 26, 2012. The Bankruptcy Court extended the time to make the third supplementaldistribution by order dated March 2, 2012 and authorized an increase to the third supplementaldistribution by order dated March 8, 2012. The third supplemental distribution was made inMarch 2012 and included payments of $3 million in cash and $20 million in stock, valuing thestock at the Plan valuation. On February 7, 2012, we filed a motion requesting entry of an order granting a final decree closingthe Chapter 11 cases for Bio-Lab, Inc. and GLCC Laurel, LLC, which was granted by theBankruptcy Court on February 22, 2012. On March 16, 2012, we filed a motion requesting entry of an order granting a final decree closingthe Chapter 11 cases for Great Lakes Chemical Corporation and Uniroyal Chemical CompanyLimited (Delaware), which was granted by the Bankruptcy Court on March 29, 2012. As of March 31, 2012, the Bankruptcy Court has entered orders granting final decrees closing all ofthe Debtors’ Chapter 11 cases except the Chapter 11 case of Chemtura Corporation. At March 31, 2012 and December 31, 2011 the remaining undisbursed amount in the DisputedClaims Reserve was $2 million and $29 million, respectively. The decrease in the Disputed ClaimsReserve was due to settlement payments resolving Disputed Claims of $4 million and supplementaldistributions to Holders of Interests of $23 million. Any remaining Disputed Claims, to the extentthey are ultimately allowed by the Bankruptcy Court, will be satisfied (to the extent allowed andnot covered by insurance) from the Disputed Claims Reserve. The Reorganization Items, net recorded in our Consolidated Statements of Operations related to ourChapter 11 cases comprise the following:


(In millions)

2012

2011

Professional fees

$ 1

$ 6


1

1

Total reorganization items, net

$ 2

$ 7

(a)

Represents the difference between the settlement amount of certain pre-petitionobligations (obligations settled in common stock are based on the fair value of our stockat the issuance date) and the corresponding carrying value of the recorded liabilities.


LEGAL PROCEEDINGS AND CONTINGENCIES

LEGAL PROCEEDINGS AND CONTINGENCIES(USD $)


LEGAL PROCEEDINGS AND CONTINGENCIES 17)

LEGAL PROCEEDINGS AND CONTINGENCIES We are involved in claims, litigation, administrative proceedings and investigations ofvarious types in a number of jurisdictions. A number of such matters involve, or mayinvolve, claims for a material amount of damages and relate to or allege environmentalliabilities, including clean-up costs associated with hazardous waste disposal sites,natural resource damages, property damage and personal injury. As a result of the Chapter 11 cases, substantially all prepetition litigation and claimsagainst us and our subsidiaries that were Debtors in the Chapter 11 cases have beendischarged and permanently enjoined from further prosecution and are described belowunder the subheading “Prepetition Litigation and Claims Discharged Under the Plan.” Claims and legal actions asserted against non-Debtors or relating to events occurringafter the Effective Date, certain regulatory and administrative proceedings and certaincontractual and other claims assumed with the authorization of the Bankruptcy Court,were not discharged in the Chapter 11 cases and are described below under thesubheading “Litigation and Claims Not Discharged Under the Plan.” Prepetition Litigation and Claims Discharged Under the Plan


On March 18, 2009, the Debtors filed voluntary petitions in the Bankruptcy Courtseeking relief under Chapter 11. The Debtors’ Chapter 11 cases have been assigned tothe Honorable Robert E. Gerber and are being jointly administered as CaseNo. 09-11233. The Debtors continued to operate their business as debtors in possessionunder the jurisdiction of the Bankruptcy Court until their emergence from Chapter 11on November 10, 2010. Pursuant to the Plan, and by orders of the Bankruptcy Court dated September 24, 2010,October 19, 2010 and October 29, 2010, the Debtors established the Diacetyl Reserve,the Environmental Reserve and the Disputed Claims Reserve, each as defined in thePlan, on account of claims that were not yet allowed in the Chapter 11 cases as of theEffective Date, including proofs of claim asserted against the Debtors that were subjectto objection as of the Effective Date (the “Disputed Claims”). The Diacetyl Reservewas approved by the Bankruptcy Court in the amount of $7 million, comprised ofseparate segregated reserves, and has since been reduced as settlement agreements havebeen approved by the Bankruptcy Court. The Environmental Reserve was approved bythe Bankruptcy Court in the amount of $38 million, a portion of which was furthersegregated into certain separate reserves established to account for settlements that werepending Bankruptcy Court approval, and has since been reduced as settlementagreements have been approved by the Bankruptcy Court. The Disputed ClaimsReserve was approved by the Bankruptcy Court in the amount of $42 million, plusadditional segregated individual reserves for certain creditors’ claims in the aggregateamount of approximately $30 million, all of which have been reduced as settlementagreements have been approved by the Bankruptcy Court. On June 24, 2011, we resolved the final disputed Environmental Claim. As a result,under the Plan, the amounts remaining in the Environmental Reserve were transferredto the Disputed Claims Reserve. Any remaining Disputed Claims, to the extent they areultimately allowed by the Bankruptcy Court, will be satisfied (to the extent allowed andnot covered by insurance) from the Disputed Claims Reserve, and holders of theDisputed Claims are permanently enjoined under the Plan from pursuing their claimsagainst us. As of March 31, 2012, as a result of distributions pursuant to the Plan, theremaining undisbursed amount in the Disputed Claims Reserve was $2 million. As we complete the process of evaluating and/or resolving the Disputed Claims,appropriate adjustments to our Consolidated Financial Statements will be made. Adjustments may also result from actions of the Bankruptcy Court, settlement


negotiations, and other events. For additional information, see Note 16 — Emergencefrom Chapter 11 in our Notes to Consolidated Financial Statements. Litigation and Claims Not Discharged Under the Plan


We are involved in environmental matters of various types in a number of jurisdictions. A number of such matters involve claims for material amounts of damages and relate toor allege environmental liabilities, including clean up costs associated with hazardouswaste disposal sites and natural resource damages. The Comprehensive Environmental Response, Compensation and Liability Act of 1980,as amended (“CERCLA”), and comparable state statutes impose strict liability uponvarious classes of persons with respect to the costs associated with the investigation andremediation of waste disposal sites. Such persons are typically referred to as“Potentially Responsible Parties” or PRPs. Chemtura and several of our subsidiarieshave been identified by federal, state or local governmental agencies or by other PRPs,as a PRP at various locations in the United States. Because in certain circumstancesthese laws have been construed to authorize the imposition of joint and several liability,the Environmental Protection Agency (“EPA”) and comparable state agencies couldseek to recover all costs involving a waste disposal site from any one of the PRPs forsuch site, including Chemtura, despite the involvement of other PRPs. In many cases,we are one of a large number of PRPs with respect to a site. In a few instances, we arethe sole or one of only a handful of PRPs performing investigation and remediation. Where other financially responsible PRPs are involved, we expect that any ultimateliability resulting from such matters will be apportioned between us and such otherparties. In addition, we are involved with environmental remediation and complianceactivities at some of our current and former sites in the United States and abroad. Each quarter, we evaluate and review estimates for future remediation and other costs todetermine appropriate environmental reserve amounts. For each site where the cost ofremediation is probable and reasonably estimable, we determine the specific measuresthat are believed to be required to remediate the site, the estimated total cost to carry outthe remediation plan, the portion of the total remediation costs to be borne by us and theanticipated time frame over which payments toward the remediation plan will occur. Atsites where we expect to incur ongoing operation and maintenance expenditures, weaccrue on an undiscounted basis for a period of generally 10 years those costs which webelieve are probable and reasonably estimable. On June 6, 2011, our subsidiary Great Lakes Chemical Corporation received a proposedConsent Administrative Order (“CAO”) from the Arkansas Department ofEnvironmental Quality alleging violations of the Resource Conservation and RecoveryAct in conjunction with its facility located in El Dorado, Arkansas. The proposed CAOincluded a civil penalty. While we believe that a mutually acceptable settlementamount will be negotiated with the agency, a reasonable estimate of the settlementamount cannot be made at this time. In any event, the ultimate settlement with theagency will not have a material effect on our results of operations, financial conditionor cash flows. The total amount accrued for environmental liabilities as of March 31, 2012 andDecember 31, 2011, was $88 million. At March 31, 2012 and December 31, 2011, $18million of these environmental liabilities were reflected as accrued expenses and $70million were reflected as other liabilities. We estimate that the reasonably possibleongoing environmental liabilities could range up to $102 million at March 31, 2012. Our accruals for environmental liabilities include estimates for determinable clean-upcosts. We recorded a pre-tax charge of $2 million in 2012, and made payments of $3million during the quarter ended March 31, 2012 for clean-up costs, which reduced ourenvironmental liabilities. At certain sites, we have contractual agreements with certainother parties to share remediation costs. Based on these arrangements, we had areceivable of $10 million at March 31, 2012 and December 31, 2011. At a number ofthese sites, the extent of contamination has not yet been fully investigated or the finalscope of remediation is not yet determinable. We intend to assert all meritorious legaldefenses and will pursue other equitable factors that are available with respect to thesematters. However, the final cost of clean-up at these sites could exceed our presentestimates, and could have, individually or in the aggregate, a material adverse effect on


our financial condition, results of operations, or cash flows. Our estimates forenvironmental remediation liabilities may change in the future should additional sitesbe identified, further remediation measures be required or undertaken, current laws andregulations be modified or additional environmental laws and regulations be enacted,and as negotiations with respect to certain sites continue.

Other

We are routinely subject to other civil claims, litigation and arbitration, and regulatoryinvestigations, arising in the ordinary course of our business, as well as in respect of ourdivested businesses. Some of these claims and litigations relate to product liabilityclaims, including claims related to our current and historical products andasbestos-related claims concerning premises and historic products of our corporateaffiliates and predecessors. We believe the claims relating to the period before thefiling of the Chapter 11 cases are subject to discharge pursuant to the Plan and will besatisfied, to the extent they were timely filed in the Chapter 11 cases and allowed by theBankruptcy Court, solely from the Disputed Claims Reserve. Further, we believe thatwe have strong defenses to these claims. These claims have not had a material impacton us to date and we believe the likelihood that a future material adverse outcome willresult from these claims is remote. However, we cannot be certain that an adverseoutcome of one or more of these claims, to the extent not discharged in the Chapter 11cases, would not have a material adverse effect on our financial condition, results ofoperations or cash flows. Internal Review of Customer Incentive, Commission and Promotional PaymentPractices The SEC staff has advised us that it has completed its investigation resulting from ourpreviously disclosed review of various customer incentive, commission andpromotional payment practices of the Chemtura AgroSolutions segment in the Europe,Middle East and Africa region (the “EMEA Region”), and has determined not torecommend action by the SEC.

Guarantees In addition to the letters of credit of $15 million outstanding at both March 31, 2012and December 31, 2011, we have guarantees that have been provided to variousfinancial institutions. At March 31, 2012 and December 31, 2011, we had $14 millionand $11 million of outstanding guarantees, respectively. The letters of credit andguarantees were primarily related to liabilities for insurance obligations, environmentalobligations, banking and credit facilities, vendor deposits and European value added tax(“VAT”) obligations. We have applied the disclosure provisions of ASC Topic 460, Guarantees (“ASC460”), to our agreements that contain guarantee or indemnification clauses. We are aparty to several agreements pursuant to which we may be obligated to indemnify a thirdparty with respect to certain loan obligations of joint venture companies in which wehave an equity interest. These obligations arose to provide initial financing for a jointventure start-up, fund an acquisition and/or provide project capital. Such obligationsmature through August 2016. In the event that any of the joint venture companies wereto default on these loan obligations, we would indemnify the other party up to itsproportionate share of the obligation based upon its ownership interest in the jointventure. At March 31, 2012, the maximum potential future principal and interestpayments due under these guarantees were $5 million. At December 31, 2011, themaximum potential future principal and interest payments due under these guaranteeswere $8 million. In accordance with ASC 460, we have accrued $1 million in reserves,which represents the probability weighted fair value of these guarantees at March 31,2012 and December 31, 2011. The reserve has been included in other liabilities on ourConsolidated Balance Sheet at March 31, 2012 and December 31, 2011 with an offsetto the investment included in other assets. In addition, we have financing agreements with banks in Brazil for certain customersunder which we receive funds from the banks at invoice date, and in turn, the customeragrees to pay the banks on the due date. We provide a full recourse guarantee to thebanks in the event of customer non-payment.


In the ordinary course of business, we enter into contractual arrangements under whichwe may agree to indemnify a third party to such arrangement from any losses incurredrelating to the services they perform on our behalf or for losses arising from certainevents as defined within the particular contract, which may include, for example,litigation, claims or environmental matters relating to our past performance. For anylosses that we believe are probable and estimable, we have accrued for such amounts inour Consolidated Balance Sheets.


BUSINESS SEGMENT DATA

BUSINESS SEGMENT DATA(USD $)


BUSINESS SEGMENT DATA 18)

BUSINESS SEGMENT DATA We evaluate a segment’s performance based on several factors, of which the primary factor is operatingincome (loss). In computing operating income (loss) by segment, the following items have not beendeducted: (1) general corporate expense; (2) amortization; (3) changes in estimates related to expectedallowable claims; and (4) impairment charges. Pursuant to ASC Topic 280, Segment Reporting (“ASC280”), these items have been excluded from our presentation of segment operating income (loss) becausethey are not reported to the chief operating decision maker for purposes of allocating resources amongreporting segments or assessing segment performance. Industrial Performance Products Industrial Performance Products are engineered solutions for our customers’ specialty chemical needs. Industrial Performance Products include petroleum additives that provide detergency, frictionmodification and corrosion protection in automotive lubricants, greases, refrigeration and turbinelubricants; castable urethane prepolymers engineered to provide superior abrasion resistance anddurability in many industrial and recreational applications; polyurethane dispersions and urethaneprepolymers used in various types of coatings such as clear floor finishes, high-gloss paints and textilestreatments; and antioxidants that improve the durability and longevity of plastics used in food packaging,consumer durables, automotive components and electrical components. These products are sold directlyto manufacturers and through distribution channels. Industrial Engineered Products Industrial Engineered Products are chemical additives designed to improve the performance of polymersin their end-use applications. Industrial Engineered Products include brominated performance products,flame retardants, fumigants and organometallics. The products are sold across the entire value chainranging from direct sales to monomer producers, polymer manufacturers, compounders and fabricators,fine chemical manufacturers and oilfield service companies to industry distributors.

Consumer Products Consumer Products are performance chemicals that are sold to consumers for in-home and outdoor use. Consumer Products include a variety of branded recreational water purification products sold throughlocal dealers and large retailers to assist consumers in the maintenance of their pools and spas andbranded cleaners and degreasers sold primarily through mass merchants to consumers for home cleaning. Chemtura AgroSolutions Chemtura AgroSolutions develops, supplies, registers and sells agricultural chemicals formulated forspecific crops in various geographic regions for the purpose of enhancing quality and improving yields. The business focuses on specific target markets in six major product lines: seed treatments, fungicides,miticides, insecticides, growth regulators and herbicides. These products are sold directly to growersand to major distributors in the agricultural sector. General Corporate Expense and Other Charges General corporate expense includes costs and expenses that are of a general corporate nature or managedon a corporate basis. These costs (net of allocations to the business segments) primarily representcorporate stewardship and administration activities together with costs associated with legacy activitiesand intangible asset amortization. Functional costs are allocated between the business segments andgeneral corporate expense. Impairment charges related to the impairment of intangible assets andproperty, plant and equipment that were no longer supportable. Change in estimates related to expectedallowable claims relates to adjustments to resolve disputed claims. A summary of business data for our reportable segments for the quarters ended March 31, 2012 and2011 are as follows:



(In millions)

2012

2011

Net Sales


$ 313

$ 336


226

209

Consumer Products

84

79


85

75

Total net sales

$ 708

$ 699


(In millions)

2012

2011



$ 24

$ 30


44

33

Consumer Products

(5) (3)Chemtura AgroSolutions

10

2

73

62

General corporate expense, including

amortization

(29) (28)Impairment charges

(1) (2)

Changes in estimates related toexpected allowable claims

(2) —

Total operating income

$ 41

$ 32


GUARANTOR CONDENSED CONSOLIDATING FINANCIAL DATA

GUARANTOR CONDENSED CONSOLIDATING FINANCIAL DATA(USD $)


GUARANTOR CONDENSED CONSOLIDATING FINANCIALDATA 19)

GUARANTOR CONDENSED CONSOLIDATING FINANCIALDATA

Our obligations under the Senior Notes are fully and unconditionallyguaranteed on a senior unsecured basis, jointly and severally, by each currentand future domestic restricted subsidiary, other than excluded subsidiaries thatguarantee any indebtedness of Chemtura or our restricted subsidiaries. Oursubsidiaries that do not guarantee the Senior Notes are referred to as the“Non-Guarantor Subsidiaries.” The Guarantor Condensed ConsolidatingFinancial Data presented below presents the statements of operations,statements of comprehensive income, balance sheets and statements of cashflow for: (i) Chemtura Corporation (the “Parent Company”), the GuarantorSubsidiaries and the Non-Guarantor Subsidiaries on a consolidated basis(which is derived from Chemtura historical reported financial information);(ii) the Parent Company, alone (accounting for our Guarantor Subsidiaries andthe Non-Guarantor Subsidiaries on an equity basis under which the investmentsare recorded by each entity owning a portion of another entity at cost, adjustedfor the applicable share of the subsidiary’s cumulative results of operations,capital contributions and distributions, and other equity changes); (iii) theGuarantor Subsidiaries alone; and (iv) the Non-Guarantor Subsidiaries alone.


(In millions)

Non-

Parent

Guarantor

Guarantor

Consolidated

Eliminations

Company

Subsidiaries

Subsidiaries

Net sales

$ 708

$ (481)$ 415

$ 164

$ 610

Cost of goods

sold

537

(481) 330

144

544

Selling, generalandadministrative

82

—

30

11

41

Depreciation andamortization

33

—

9

12

12

Research anddevelopment

13

—

5

2

6

Impairmentcharges

1

—

—

—

1

Changes inestimatesrelated toexpectedallowableclaims

2

—

2

—

—

Equity income

(1) —

—

—

(1) Operating income

(loss)

41

—

39

(5) 7

Interest expense

(14) —

(17) 1

2

Other expense,net

(4) —

(3) —

(1)

Reorganizationitems, net

(2) —

(2) —

—

Equity in netearnings of

—

(5) 5

—

—


subsidiaries Earnings (loss)

before incometaxes

21

(5) 22

(4) 8

Income tax

benefit

1

—

—

—

1

Net earnings

(loss)attributableto Chemtura

$ 22

$ (5)$ 22

$ (4)$ 9



Non-

Parent

Guarantor

Guarantor

Consolidated

Eliminations

Company

Subsidiaries

Subsidiaries

Net earnings (loss)

22

(5) 22

(4) 9

Other

comprehensiveincome (loss), netof tax

Foreign currencytranslationadjustments

22

—

(13) 2

33

Unrecognizedpension andotherpost-retirementbenefit costs

2

—

2

—

—

Comprehensive

income (loss)attributable toChemtura

$ 46

$ (5)$ 11

$ (2)$ 42

Condensed Consolidating Balance Sheet

As of March 31, 2012(In millions)

Non-

Parent

Guarantor

Guarantor

Consolidated

Eliminations

Company

Subsidiaries

Subsidiaries

ASSETS

Current assets $ 1,422

$ —

$ 364

$ 252

$ 806

Intercompanyreceivables

—

(8,309) 2,943

2,383

2,983

Investment insubsidiaries

—

(12,373) 2,036

1,736

8,601

Property, plant andequipment

760

—

158

272

330

Goodwill

177

—

93

3

81

Other assets

609

—

177

182

250

Total assets $ 2,968

$ (20,682)$ 5,771

$ 4,828

$ 13,051

LIABILITIES AND

STOCKHOLDERS’EQUITY

Current liabilities $ 462

$ —

$ 184

$ 80

$ 198



—

(8,309) 3,375

2,692

2,242

Long-term debt

748

—

747

—

1

Other long-termliabilities

664

—

371

59

234

Total liabilities

1,874

(8,309) 4,677

2,831

2,675


1,094

(12,373) 1,094

1,997

10,376

Total liabilities andstockholders’equity

$ 2,968

$ (20,682)$ 5,771

$ 4,828

$ 13,051



Non-

Parent

Guarantor

Guarantor

Consolidated

Eliminations

Company

Subsidiaries

Subsidiaries

Increase (decrease) tocash

CASH FLOWSFROMOPERATINGACTIVITIES

Net earnings (loss) $ 22

$ (5)$ 22

$ (4)$ 9

Adjustments toreconcile netearnings (loss) tonet cash (used in)provided byoperations:

Impairmentcharges

1

—

—

—

1


33

—

9

12

12

Stock-basedcompensationexpense

7

—

7

—

—

Reorganizationitems, net

1

—

1

—

—

Changes inestimates relatedto expectedallowable claims

2

—

2

—

—

Equity (income)loss

(1) 5

(5) —

(1)

Changes in assetsand liabilities,net

(154) —

(118) 2

(38)

Net cash (used in)provided byoperations

(89) —

(82) 10

(17)

CASH FLOWS

FROMINVESTINGACTIVITIES

Capitalexpenditures

(29) —

(9) (10) (10)

Net cash used ininvesting activities

(29) —

(9) (10) (10)

CASH FLOWS

FROMFINANCINGACTIVITIES


Proceeds fromABL Facility

59

—

59

—

—

Payments on othershort termborrowings, net

(1) —

—

—

(1)

Net cash provided by(used in) financingactivities

58

—

59

—

(1)

CASH

Effect of exchangerates on cash andcash equivalents

2

—

—

—

2

Change in cash andcash equivalents

(58) —

(32) —

(26)

Cash and cashequivalents atbeginning of period

180

—

35

—

145

Cash and cashequivalents at endof period

$ 122

$ —

$ 3

$ —

$ 119

Condensed Consolidating Statement of Operations


Non-

Parent

Guarantor

Guarantor

Consolidated

Eliminations

Company

Subsidiaries

Subsidiaries

Net sales

$ 699

$ (440)$ 411

$ 146

$ 582

Cost of goods sold

538

(440) 336

122

520

Selling, general andadministrative

79

—

33

13

33


37

—

10

13

14

Research anddevelopment

11

—

5

2

4

Impairment charges

2

—

—

—

2

Operating income

(loss) 32 — 27 (4) 9 Interest expense (16) — (17) — 1 Other income

(expense), net 1 — (5) — 6 Reorganization

items, net (7) — (7) — — Equity in net

earnings ofsubsidiaries — (9) 9 — —

Earnings (loss)

before incometaxes 10 (9) 7 (4) 16

Income tax expense (3) — — — (3)

Net earnings(loss)attributable toChemtura $ 7 $ (9)$ 7 $ (4)$ 13




Non- Parent Guarantor Guarantor Consolidated Eliminations Company Subsidiaries Subsidiaries Net earnings (loss) 7 (9) 7 (4) 13 Other comprehensive

income (loss), netof tax Foreign currency

translationadjustments 31 — (22) 4 49

Unrecognizedpension andotherpost-retirementbenefit costs 2 — 2 — —

Comprehensive

income (loss)attributable toChemtura $ 40 $ (9)$ (13)$ — $ 62


As of December 31, 2011(In millions)

Non- Parent Guarantor Guarantor Consolidated Eliminations Company Subsidiaries Subsidiaries ASSETS Current assets $ 1,321 $ — $ 372 $ 204 $ 745 Intercompany

receivables — (7,846) 2,727 2,230 2,889 Investment in

subsidiaries — (14,617) 2,011 1,734 10,872 Property, plant and

equipment 752 — 160 271 321 Goodwill 174 — 92 3 79 Other assets 608 — 226 185 197

Total assets $ 2,855 $ (22,463)$ 5,588 $ 4,627 $ 15,103 LIABILITIES AND


Current liabilities $ 390 $ — $ 134 $ 79 $ 177 Intercompany payables — (7,846) 3,201 2,491 2,154 Long-term debt 748 — 747 — 1 Other long-term

liabilities 671 — 460 60 151 Total liabilities 1,809 (7,846) 4,542 2,630 2,483

Stockholders’ equity 1,046 (14,617) 1,046 1,997 12,620 Total liabilities and

stockholders’equity $ 2,855 $ (22,463)$ 5,588 $ 4,627 $ 15,103



Non-


Parent Guarantor Guarantor Consolidated Eliminations Company Subsidiaries Subsidiaries Increase (decrease) to

cash CASH FLOWS

FROMOPERATINGACTIVITIES

Net earnings (loss) $ 7 $ (9)$ 7 $ (4)$ 13 Adjustments to

reconcile netearnings (loss) tonet cash (used in)provided byoperations: Impairment charges 2 — — — 2 Depreciation and

amortization 37 — 10 13 14 Stock-based

compensationexpense 8 — 8 — —

Reorganizationitems, net 1 — 1 — —

Equity loss(income) — 9 (9) — —

Changes in assetsand liabilities,net (167) — (114) 1 (54)

Net cash (used in)provided byoperations (112) — (97) 10 (25)

CASH FLOWS


Payments foracquistions (30) — — — (30)

Capital expenditures (23) — (4) (10) (9)Net cash used in

investing activities (53) — (4) (10) (39) CASH FLOWS

FROMFINANCINGACTIVITIES Proceeds from

ABL Facility 73 — 73 — — Proceeds from

other short termborrowings, net 1 — — — 1

Net cash provided byfinancing activities 74 — 73 — 1

CASH Effect of exchange

rates on cash andcash equivalents 3 — — — 3

Change in cash andcash equivalents (88) — (28) — (60)

Cash and cashequivalents atbeginning of period 201 — 41 — 160

Cash and cashequivalents at end

$ 113 $ — $ 13 $ — $ 100


of period


NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Policies) (USD $)


Basis of Presentation Basis of Presentation The accompanying Consolidated Financial Statementsinclude the accounts of Chemtura and ourwholly-owned and majority-owned subsidiaries thatwe control. Other affiliates in which we have a 20% to50% ownership interest or a non-controlling majorityinterest are accounted for in accordance with theequity method. Other investments in which we haveless than 20% ownership are recorded at cost. Allsignificant intercompany balances and transactionshave been eliminated in consolidation. Our Consolidated Financial Statements have beenprepared in conformity with U.S. generally acceptedaccounting principles (“GAAP”), which require us tomake estimates and assumptions that affect thereported amounts of assets and liabilities anddisclosures of contingent assets and liabilities at thedate of the financial statements and the reportedamounts of revenues and expenses during the reportingperiod. Actual results could differ from theseestimates. Certain prior year amounts have been reclassified toconform to the current year’s presentation. Thesechanges did not have a material impact on previouslyreported results of operations, cash flows or financialposition. We operated as a debtor-in-possession (“DIP”) underthe protection of the United States Bankruptcy Courtfor the Southern District of New York (the“Bankruptcy Court”) from March 18, 2009 (the“Petition Date”) through November 10, 2010 (the“Effective Date”). From the Petition Date through theEffective Date, our Consolidated Financial Statementswere prepared in accordance with AccountingStandards Codification (“ASC”) Section 852-10-45,Reorganizations — Other Presentation Matters (“ASC852-10-45”) which requires that financial statements,for periods during the pendency of our voluntarypetitions for relief under Chapter 11 of Title 11 of theUnited States Code (the “Chapter 11”) filings,distinguish transactions and events that are directlyassociated with the reorganization from the ongoingoperations of the business. Accordingly, certainincome, expenses, realized gains and losses andexpenses for losses that were realized or incurred inthe Chapter 11 cases were recorded in changes inestimates related to expected allowable claims andreorganization items, net in our ConsolidatedStatements of Operations.

The interim Consolidated Financial Statements shouldbe read in conjunction with the Consolidated FinancialStatements and notes included in our Annual Reporton Form 10-K for the period ended December 31,2011. The consolidated results of operations for thequarter ended March 31, 2012 are not necessarily


indicative of the results expected for the full year.

Cash and Cash Equivalents Cash and cash equivalents include bank term depositswith original maturities of three months or less. Included in cash and cash equivalents in ourConsolidated Balance Sheets at both March 31, 2012and December 31, 2011 is $1 million of restricted cashthat is required to be on deposit to support certainletters of credit and performance guarantees, themajority of which will be settled within one year. Included in our restricted cash balance atDecember 31, 2011 is $5 million of cash on deposit forthe settlement of disputed bankruptcy claims thatexisted at the Effective Date.

Allowance for doubtful accounts Included in accounts receivable are allowances fordoubtful accounts of $20 million as of March 31, 2012and December 31, 2011. During the quarters ended March 31, 2012 and 2011,we made interest payments of approximately $23million. During the quarters ended March 31, 2012and 2011, we made payments for income taxes (net ofrefunds) of $12 million and $4 million, respectively.

Accounting Developments Accounting Developments In May 2011, the Financial Accounting StandardsBoard (“FASB”) issued ASU No. 2011-04,Amendments to Achieve Common Fair ValueMeasurement and Disclosure Requirements in U.S.GAAP and IFRSs (“ASU 2011-04”). ASU 2011-04amends U.S. GAAP to conform it with fair valuemeasurement and disclosure requirements inInternational Financial Reporting Standards (“IFRS”). The amendments in ASU 2011-04 changed thewording used to describe the requirements in U.S.GAAP for measuring fair value and for disclosinginformation about fair value measurements. Theprovisions of ASU 2011-04 are effective for the firstreporting period (including interim periods) beginningafter December 15, 2011. The adoption of thisstandard did not have a material impact on our resultsof operations, financial condition or disclosures. In June 2011, the FASB issued ASU No. 2011-05,Presentation of Comprehensive Income (“ASU2011-05”). ASU 2011-05 requires the presentation ofcomprehensive income, the components of net incomeand the components of other comprehensive incomeeither in a single continuous statement ofcomprehensive income or in two separate butconsecutive statements. In December 2011, the FASBissued Accounting Standards Update No. 2011-12,Deferral of the Effective Date for Amendments to thePresentation of Reclassifications of Items Out ofAccumulated Other Comprehensive Income inAccounting Standards Update No. 2011-05 (“ASU2011-12”). ASU 2011-12 defers the effective date ofthe requirement in ASU 2011-05 to disclose on theface of the financial statements the effects ofreclassifications out of accumulated othercomprehensive income on the components of netincome and other comprehensive income. All otherrequirements of ASU 2011-05 are not affected by ASU


2011-12. The provisions of ASU 2011-05 areeffective for the first reporting period (includinginterim periods) beginning after December 15, 2011. The adoption of this standard did not have a materialfinancial statement impact as it only addressed thepresentation of our financial statements. In September 2011, the FASB issued ASUNo. 2011-08, Intangibles — Goodwill and Other(Topic 350): Testing Goodwill for Impairment. Theguidance in ASU 2011-08 is intended to reducecomplexity and costs by allowing an entity the optionto make a qualitative evaluation about the likelihood ofgoodwill impairment to determine whether it shouldcalculate the fair value of a reporting unit. Theamendment also improved previous guidance byexpanding upon the examples of events andcircumstances that an entity should consider betweenannual impairment tests in determining whether it ismore likely than not that the fair value of a reportingunit is less than its carrying amount. The provisions ofthis ASU are effective for annual and interim goodwillimpairment tests performed for fiscal years beginningafter December 15, 2011, with early adoptionpermitted. The adoption of this guidance will not havea material impact on our results of operations orfinancial condition. In September 2011, the FASB issued ASUNo. 2011-09, Compensation—Retirement BenefitsMultiemployer Plans (Subtopic 715-80). The guidancein ASU 2011-09 assists users of financial statements toassess the potential future cash flow implicationsrelating to an employer’s participation inmultiemployer pension plans. The disclosures willindicate the financial health of all of the significantplans in which the employer participates and assist afinancial statement user to access additionalinformation that is available outside the financialstatements. The provisions of the ASU 2011-09 areeffective for annual periods for fiscal years endingafter December 15, 2011, with early adoptionpermitted. The adoption of this guidance did not havea material impact on our results of operations orfinancial condition.


INVENTORIES (Tables)

INVENTORIES(Tables) (USD $)


Components of inventories

March 31, December 31, (In millions) 2012 2011 Finished goods $ 401 $ 348 Work in process 46 43 Raw materials and

supplies 156 151 $ 603 $ 542


PROPERTY, PLANT AND EQUIPMENT (Tables)

PROPERTY, PLANT AND EQUIPMENT(Tables) (USD $)


Schedule of property, plant and equipment

March 31, December 31, (In millions) 2012 2011 Land and improvements $ 81 $ 85 Buildings and

improvements 243 240 Machinery and equipment 1,266 1,238 Information systems

equipment 188 175 Furniture, fixtures and

other 32 31 Construction in progress 123 121 1,933 1,890 Less: accumulated

depreciation (1,173) (1,138) $ 760 $ 752


GOODWILL AND INTANGIBLE ASSETS (Tables)

GOODWILL AND INTANGIBLE ASSETS(Tables) (USD $)


Schedule of intangible assets (excludinggoodwill)

March 31, 2012 December 31, 2011

(In millions) Gross Cost


Net Intangibles

Gross Cost


Net Intangibles

Patents $ 131 $ (73) $ 58 $ 128 $ (70) $ 58 Trademarks 264 (74) 190 262 (71) 191 Customer

relationships 147 (52) 95 146 (50) 96 Production

rights 46 (29) 17 46 (28) 18 Other 77 (43) 34 70 (41) 29

Total $ 665 $ (271) $ 394 $ 652 $ (260) $ 392


DEBT (Tables)

DEBT(Tables) (USD $)


Schedule of debt

March 31, December 31, (In millions) 2012 2011 7.875% Senior Notes

due 2018 $ 452 $ 452 Term Loan due 2016 293 293 ABL Facility 59 — Other borrowings 7 8

Total debt 811 753 Less: ABL Facility (59) — Less: Other short-term

borrowings (4) (5)

Long-term debt $ 748 $ 748


ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables)

ACCUMULATED OTHER COMPREHENSIVE LOSS(Tables) (USD $)


Schedule of components of accumulated other comprehensive loss

March 31,

December 31,

(In millions)

2012

2011


$ 75

$ 53


(397) (399)

Accumulated other comprehensive

loss

$ (322) $ (346)


EARNINGS PER COMMON SHARE (Tables)

EARNINGS PER COMMON SHARE(Tables) (USD $)


Schedule of reconciliation of the shares used in the computation of earningsper share

Quarters ended March 31, (In millions) 2012 2011 Weighted average shares

outstanding - Basic 98.3 100.1 Dilutive effect of common share

equivalents 0.8 — Weighted average shares

outstanding - Diluted 99.1 100.1


PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS (Tables)

PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS(Tables) (USD $)


Components of the entity's defined benefit plans net periodicbenefit (credit) cost

Defined Benefit Plans Qualified International and Post-Retirement U.S. Plans Non-Qualified Plans Health Care Plans Quarters ended March 31, Quarters ended March 31, Quarters ended March 31, (In millions) 2012 2011 2012 2011 2012 2011 Service cost $ — $ — $ 1 $ 1 $ — $ — Interest cost 11 12 5 5 1 1 Expected return on

plan assets (14) (14) (5) (4) — — Amortization of

prior service cost — 3 — — (1) — Amortization of

actuarial losses 4 — — — 1 (1) Net periodic benefit

cost $ 1 $ 1 $ 1 $ 2 $ 1 $ —


FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Tables)

FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS(Tables) (USD $)


Schedule of the carrying amounts and estimated fair values of material financial instruments



Carrying

Fair

Carrying

Fair

(In millions)

Amount

Value

Amount

Value

Total

debt $ 811

$ 861

$ 753

$ 777


ASSET RETIREMENT OBLIGATIONS (Tables)

ASSET RETIREMENT OBLIGATIONS(Tables) (USD $)


Summary of the change in the carrying amount of the asset retirement obligationsand the net book value of assets


(In millions)

2012

2011

Asset retirement obligationbalance at beginning ofperiod

$ 21

$ 23

Accretion expense — costof goods sold

—

1

Payments

(1) —

Asset retirement obligationbalance at end of period

$ 20

$ 24

Net book value of asset

retirement obligationassets at end of period

$ 1

$ 1


EMERGENCE FROM CHAPTER 11 (Tables)

EMERGENCE FROM CHAPTER 11(Tables) (USD $)


Fully Administered Debtors

• A&M CleaningProducts LLC


• Laurel IndustriesHoldings, Inc.

• Aqua Clear Industries,LLC


• Monochem, Inc.

• ASEPSIS, Inc.

• Crompton Monochem,Inc.


• ASCK, Inc.


• Recreational WaterProducts, Inc.

• BioLab Company Store,LLC

• GT Seed Treatment,Inc.


• Biolab FranchiseCompany, LLC



• BioLab TextileAdditives, LLC

• ISCI, Inc.



Schedule of reorganization items related to Chapter 11 cases


(In millions)

2012

2011

Professional fees $ 1

$ 6


1

1

Total reorganization items,

net $ 2

$ 7

(a)

Represents the difference between the settlement amount of certainpre-petition obligations (obligations settled in common stock arebased on the fair value of our stock at the issuance date) and thecorresponding carrying value of the recorded liabilities.


BUSINESS SEGMENT DATA (Tables)

BUSINESS SEGMENT DATA(Tables) (USD $)


Summary of revenue and operating profit for reportable segments

Quarters ended March 31, (In millions) 2012 2011 Net Sales

Industrial Performance Products $ 313 $ 336 Industrial Engineered Products 226 209 Consumer Products 84 79 Chemtura AgroSolutions 85 75

Total net sales $ 708 $ 699

Quarters ended March 31, (In millions) 2012 2011 Operating Income (Loss)

Industrial Performance Products $ 24 $ 30 Industrial Engineered Products 44 33 Consumer Products (5) (3)Chemtura AgroSolutions 10 2

73 62 General corporate expense, including

amortization (29) (28)Impairment charges (1) (2)Changes in estimates related to expected

allowable claims (2) —

Total operating income $ 41 $ 32


GUARANTOR CONDENSED CONSOLIDATING FINANCIAL DATA (Tables)

GUARANTOR CONDENSED CONSOLIDATING FINANCIAL DATA(Tables) (USD $)


Schedule of condensed consolidating statement of operations


(In millions)

Non- Parent Guarantor Guarantor Consolidated Eliminations Company Subsidiaries Subsidiaries Net sales $ 708 $ (481) $ 415 $ 164 $ 610 Cost of goods sold 537 (481) 330 144 544 Selling, general and

administrative 82 — 30 11 41 Depreciation and

amortization 33 — 9 12 12 Research and development 13 — 5 2 6 Impairment charges 1 — — — 1 Changes in estimates

related to expectedallowable claims 2 — 2 — —

Equity income (1) — — — (1) Operating income (loss) 41 — 39 (5) 7 Interest expense (14) — (17) 1 2 Other expense, net (4) — (3) — (1)Reorganization items, net (2) — (2) — — Equity in net earnings of

subsidiaries — (5) 5 — — Earnings (loss) before

income taxes 21 (5) 22 (4) 8 Income tax benefit 1 — — — 1

Net earnings (loss)attributable toChemtura $ 22 $ (5) $ 22 $ (4) $ 9


(In millions)

Non- Parent Guarantor Guarantor Consolidated Eliminations Company Subsidiaries Subsidiaries Net sales $ 699 $ (440)$ 411 $ 146 $ 582 Cost of goods sold 538 (440) 336 122 520 Selling, general and

administrative 79 — 33 13 33 37 — 10 13 14



Research anddevelopment 11 — 5 2 4

Impairment charges 2 — — — 2 Operating income

(loss) 32 — 27 (4) 9 Interest expense (16) — (17) — 1 Other income

(expense), net 1 — (5) — 6 Reorganization


earnings ofsubsidiaries — (9) 9 — —

Earnings (loss)

before incometaxes 10 (9) 7 (4) 16

Income tax expense (3) — — — (3)

Net earnings(loss)attributable toChemtura $ 7 $ (9)$ 7 $ (4)$ 13

Schedule of condensed consolidating statement ofcomprehensive income Condensed Consolidating Statement of Comprehensive Income


Non- Parent Guarantor Guarantor Consolidated Eliminations Company Subsidiaries Subsidiaries Net earnings (loss) 22 (5) 22 (4) 9 Other

comprehensiveincome (loss),net of tax Foreign

currencytranslationadjustments 22 — (13) 2 33


Comprehensive

income (loss)attributable toChemtura $ 46 $ (5)$ 11 $ (2)$ 42

Condensed Consolidating Statement of Comprehensive IncomeQuarter ended March 31, 2011

(In millions)


Non- Parent Guarantor Guarantor Consolidated Eliminations Company Subsidiaries Subsidiaries Net earnings (loss) 7 (9) 7 (4) 13 Other

comprehensiveincome (loss), netof tax Foreign currency

translationadjustments 31 — (22) 4 49


Comprehensive

income (loss)attributable toChemtura $ 40 $ (9)$ (13)$ — $ 62

Schedule of condensed consolidating balance sheet Condensed Consolidating Balance SheetAs of March 31, 2012

(In millions)

Non- Parent Guarantor Guarantor Consolidated Eliminations Company Subsidiaries Subsidiaries ASSETS Current assets $ 1,422 $ — $ 364 $ 252 $ 806 Intercompany receivables — (8,309) 2,943 2,383 2,983 Investment in subsidiaries — (12,373) 2,036 1,736 8,601 Property, plant and


Total assets $ 2,968 $ (20,682) $ 5,771 $ 4,828 $ 13,051 LIABILITIES AND


Current liabilities $ 462 $ — $ 184 $ 80 $ 198 Intercompany payables — (8,309) 3,375 2,692 2,242 Long-term debt 748 — 747 — 1 Other long-term liabilities 664 — 371 59 234

Total liabilities 1,874 (8,309) 4,677 2,831 2,675 Stockholders’ equity 1,094 (12,373) 1,094 1,997 10,376

Total liabilities andstockholders’ equity $ 2,968 $ (20,682) $ 5,771 $ 4,828 $ 13,051

Condensed Consolidating Balance SheetAs of December 31, 2011

(In millions)


Non- Parent Guarantor Guarantor Consolidated Eliminations Company Subsidiaries Subsidiaries ASSETS Current assets $ 1,321 $ — $ 372 $ 204 $ 745 Intercompany receivables — (7,846) 2,727 2,230 2,889 Investment in subsidiaries — (14,617) 2,011 1,734 10,872 Property, plant and equipment 752 — 160 271 321 Goodwill 174 — 92 3 79 Other assets 608 — 226 185 197

Total assets $ 2,855 $ (22,463) $ 5,588 $ 4,627 $ 15,103 LIABILITIES AND


Current liabilities $ 390 $ — $ 134 $ 79 $ 177 Intercompany payables — (7,846) 3,201 2,491 2,154 Long-term debt 748 — 747 — 1 Other long-term liabilities 671 — 460 60 151

Total liabilities 1,809 (7,846) 4,542 2,630 2,483 Stockholders’ equity 1,046 (14,617) 1,046 1,997 12,620

Total liabilities andstockholders’ equity $ 2,855 $ (22,463) $ 5,588 $ 4,627 $ 15,103

Schedule of condensed consolidating statement of cashflows Condensed Consolidating Statement of Cash Flows


Non- Parent Guarantor Guarantor Consolidated Eliminations Company Subsidiaries Subsidiaries Increase (decrease) to

cash CASH FLOWS



reconcile netearnings (loss) tonet cash (used in)provided byoperations: Impairment

charges 1 — — — 1 Depreciation and




Changes inestimates relatedto expectedallowable claims 2 — 2 — —

Equity (income)loss (1) 5 (5) — (1)




CASH FLOWS

FROMINVESTINGACTIVITIES Capital

expenditures (29) — (9) (10) (10)Net cash used in



ABL Facility 59 — 59 — — Payments on other

short termborrowings, net (1) — — — (1)

Net cash provided by(used in) financingactivities 58 — 59 — (1)




Cash and cashequivalents atbeginning ofperiod 180 — 35 — 145

Cash and cashequivalents at endof period $ 122 $ — $ 3 $ — $ 119

Condensed Consolidating Statement of Cash FlowsQuarter ended March 31, 2011

(In millions)


cash CASH FLOWS



reconcile netearnings (loss) tonet cash (used in)provided byoperations:


Impairmentcharges 2 — — — 2

Depreciation andamortization 37 — 10 13 14

Stock-basedcompensationexpense 8 — 8 — —


Equity loss(income) — 9 (9) — —



CASH FLOWS


Payments foracquistions (30) — — — (30)




ABL Facility 73 — 73 — — Proceeds from

other short termborrowings, net 1 — — — 1

Net cash provided byfinancing activities 74 — 73 — 1




Cash and cashequivalents atbeginning ofperiod 201 — 41 — 160

Cash and cashequivalents at endof period $ 113 $ — $ 13 $ — $ 100


NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)

NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Details) (USD $) (in Millions)



Maximum [Member]

NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Investment in other affiliates to be accounted using the equity method (as a percent) 0.50

Ownership interest in other affiliates to be accounted for at cost (as a percent) 0.20

Accounting Policies and Other Items Term of original maturity to classify bank term deposits as cash equivalents (in months) P3M

Minimum [Member]

NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Investment in other affiliates to be accounted using the equity method (as a percent) 0.20

NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting Policies and Other Items Restricted cash required to be on deposit to support certain letters of credit and performance guarantees $ 1

Settlement period of letters of credit and performance guarantees kept as deposit, forming a part of restricted cash (in years) P1Y

Restricted cash included in cash and cash equivalents

Allowances for doubtful accounts 20

Interest paid 23 23

Income taxes (net of refunds) $ 12 $ 4


RESTRUCTURING ACTIVITIES (Details)

RESTRUCTURING ACTIVITIES(Details) (USD $) (in Millions)






Tetrabrom Technologies Ltd [Member]

Restructuring information Period for which purchaser is obligated to continue to supply currentvolumes of the brominated flame retardant (in years)

P2Y

Percentage ownership interest sold 0.50

ITALY

Restructuring information Estimated cost of restructuring plan $ 40

Non-cash charges for restructuring 6

Net cash cost for restructuring 34

Anticipated annual cash savings 15

Pre-tax charges for accelerated deprecation 30

Maximum [Member]

Restructuring information Amounts accrued for reorganization initiatives and corporate restructuringprograms

1

Restructuring information Pre-tax charges for accelerated deprecation $ 1

Amounts accrued for reorganization initiatives and corporate restructuringprograms


INVENTORIES (Details)

INVENTORIES(Details) (USD $) (inMillions)

03/31/2012 12/31/2011

Finished goods $ 401 $ 348

Work in process 46 43

Raw materials and supplies 156 151

Inventory, net 603 542

Inventory obsolescencereserves

$ 18 $ 18


PROPERTY, PLANT AND EQUIPMENT (Details)

PROPERTY, PLANT AND EQUIPMENT(Details) (USD $) (in Millions)



ITALY

Property, plant and equipment Accelerated depreciation of certain fixedassets

Building and Building Improvements[Member]

Property, plant and equipment Property, plant and equipment, gross $ 243

Computer Equipment [Member]

Property, plant and equipment Property, plant and equipment, gross 188

Construction in Progress [Member]


Furniture and Fixtures [Member]



Property, plant and equipment Property, plant and equipment, net 272

Land and Land Improvements [Member]


Machinery and Equipment [Member]

Property, plant and equipment Property, plant and equipment, gross 1,266

Maximum [Member]

Property, plant and equipment Depreciation expense 1 1





Property, plant and equipment Property, plant and equipment, gross 1,933

Less: accumulated depreciation (1,138)

Property, plant and equipment, net 760

Depreciation expense 24 26

Accelerated depreciation of certain fixedassets

$ 1


GOODWILL AND INTANGIBLE ASSETS (Details)

GOODWILL AND INTANGIBLEASSETS(Details) (USD $) (in Millions)

03/31/2012 12/31/2011

Industrial Performance Products[Member]

Goodwill information Goodwill $ 177 $ 174

Accumulated impairments related togoodwill

90 90


Goodwill information Goodwill 3 3





Goodwill information Goodwill $ 177 $ 174


GOODWILL AND INTANGIBLE ASSETS (Details 2)

GOODWILL AND INTANGIBLEASSETS(Details 2) (USD $) (in Millions)

3 MonthsEnded03/31/2012

Production Rights [Member]

Intangible assets (excluding goodwill) Gross Cost $ 46

Accumulated Amortization (29)

Net Intangibles 17

Customer Relationships [Member]

Intangible assets (excluding goodwill) Gross Cost 147


Net Intangibles 95

Other Intangible Assets [Member]



Net Intangibles 34

Patents [Member]



Net Intangibles 58

Trademarks [Member]



Net Intangibles 190



Net Intangibles 394

Additions in gross intangible assets 8

Foreign currency translation 5

Amortization expense $ 9


DEBT (Details)

DEBT(Details) (USD $) (in Millions)


Accounts Receivable Financing Facility [Member]

DEBT Maximum borrowing capacity

Debt Instrument, Variable Rate Base Rate [Member]

DEBT Variable interest rate basis

Basis points added to reference rate (as a percent)

Other Borrowings [Member]

DEBT Total debt $ 7

Carrying (Reported) Amount, Fair Value Disclosure [Member]

DEBT Total debt 811

Estimate of Fair Value, Fair Value Disclosure [Member]

DEBT Total debt 861


DEBT Long-term debt 1


DEBT Long-term debt 747

Revolving Credit Facility [Member]

DEBT Total debt 59

Term of revolving credit facility (in years)

Maximum borrowing capacity

Maximum borrowing capacity for letter of credit sub-facility

Option to increase the size of the facility 125

Outstanding letters of credit 15

Total undrawn availability 201

Trailing period used to calculate the fixed charge coverage ratio (in months) P12M

Fixed charge coverage ratio 1.1

Threshold amount for specified fixed charge coverage ratio 34

Threshold percentage of aggregate commitments for specified fixed charge coverage ratio 0.125

Number of consecutive days during which percentage of aggregate commitments are required to be maintained P45D

Secured Debt [Member]

DEBT Total debt 293

Discount rate (as a percent)

Option to increase the size of the facility 125

Secured leverage ratio 2.5

Consolidated interest coverage ratio 3

Senior Notes [Member]


DEBT Total debt 452

Interest rate (as a percent) 0.07875

Issue price as a percentage of par value

DEBT Total debt 811

Less: ABL Facility (59)

Less: Other short term borrowings 4

Long-term debt 748

Outstanding letters of credit $ 15


INCOME TAXES (Details)

INCOME TAXES(Details) (USD $) (in Millions)




Income tax benefit (expense) $ 1 $ 3

Income tax benefit (expense) (1) 3

Net liabilities related to unrecognized tax benefits 49

Potential decrease in unrecognized tax benefits within the nextyear

$ 22


ACCUMULATED OTHER COMPREHENSIVE LOSS (Details)

ACCUMULATED OTHER COMPREHENSIVE LOSS(Details) (USD $) (in Millions) 03/31/2012 12/31/2011

Foreign currency translation adjustments $ 75 $ 53

Unrecognized pension and other post-retirement benefitcosts

(397) (399)

Accumulated other comprehensive loss $ (322) $ (346)


EARNINGS PER COMMON SHARE (Details)

EARNINGS PER COMMON SHARE(Details) (USD $) (in Millions)




Performance Shares [Member]

Earnings (loss) per common share Antidilutive securities excluded from the calculation of diluted earnings (loss) pershare

0.3 1

Reconciliation of the shares used in the computation of earnings (loss) pershare

Weighted average shares outstanding - Basic 98.3 100.1

Dilutive effect of common share equivalents 0.8

Weighted average shares outstanding - Diluted 99.1 100.1

Repurchase of common stock Value of common stock authorized to be repurchased $ 50

Period over which repurchase of shares of common stock was authorized (inmonths)

P12M

Number of shares repurchased 2

Value of shares repurchased $ 22


STOCK INCENTIVE PLANS (Details)

STOCK INCENTIVE PLANS(Details) (USD $) (in Millions) except Per Share Data




Incentive Stock Option [Member]

Stock incentive plans Expiration period (in years) P10Y

Long-term Incentive Plan 2010 [Member]

Stock incentive plans Number of shares available for issuance

Expiration period (in years)

Stock-based compensation expense $ 7

Nonqualified Stock Options [Member]

Stock incentive plans Expiration period (in years) P10Y

Options granted (in shares) 0.8

Grants approved (in shares) 0.8 1.4

Percentage of award vesting 0.33 0.33

Vesting period (in years) P3Y P3Y

Weighted average fair value of options granted (in dollars per share) $ 8.14

Unrecognized compensation expense Remaining unrecognized compensation expense associated with unvested shares or units 13 13

Weighted average period for recognization of unrecognized compensation expense (inyears)

P2Y

Time-based Restricted Stock Units RSU [Member]

Stock incentive plans Grants approved (in shares) 0.6

Awards granted (in shares) 0.4

Awards granted (in shares) 0.4

Percentage of award vesting 0.33 0.33

Vesting period (in years) P3Y

Performance Shares [Member]

Stock incentive plans Number of shares available for issuance 1 1

Grants approved (in shares) 0.3

Performance multiplier 2

Performance measurement period (in years) P3Y

Vesting period (in years) P3Y

Distribution percentage 0.57

Number of shares distributed 0.6

Weighted average fair value of options granted (in dollars per share) $ 25.38

Restricted Stock Units (RSUs) [Member]

Unrecognized compensation expense Remaining unrecognized compensation expense associated with unvested shares or units $ 19 $ 19

Weighted average period for recognization of unrecognized compensation expense (inyears)

P3Y


PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS (Details)

PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS(Details) (USD $) (in Millions)



Foreign and Non-qualified Pension Plans Defined Benefit [Member]

Defined benefit plans net periodic benefit (credit) cost Service cost $ 1 $ 1

Interest cost 5 5

Expected return on plan assets (5) (4)

Net periodic benefit cost 1 2

Great Lakes UK Limited Pension Plan [Member]

Pension and other post-retirement benefit plans Defined benefit plans net periodic benefit (credit) cost Net periodic benefit cost

Cash contributions by foreign subsidiary

Period over which cash contributions are made by UK subsidiary (in years)

Cash contributions by entity

United States Non-qualified Pension Plans of US Entity Defined Benefit[Member]

Pension and other post-retirement benefit plans Employer contribution 1

Foreign Pension Plans, Defined Benefit [Member]

Pension and other post-retirement benefit plans Employer contribution 3

Other Postretirement Benefit Plans, Defined Benefit [Member]

Pension and other post-retirement benefit plans Defined benefit plans net periodic benefit (credit) cost Interest cost 1 1

Amortization of prior service cost (1)

Amortization of actuarial losses 1 (1)

Net periodic benefit cost 1

Employer contribution 3

United States Pension Plans of US Entity, Defined Benefit [Member]

Pension and other post-retirement benefit plans Defined benefit plans net periodic benefit (credit) cost Interest cost 11 12

Expected return on plan assets (14) (14)

Amortization of prior service cost 3

Amortization of actuarial losses 4

Net periodic benefit cost 1 1

Employer contribution $ 15


DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Details)

DERIVATIVE INSTRUMENTS AND HEDGINGACTIVITIES(Details) (USD $)



Derivative instruments and hedging activities Percentage ownership interest sold 0.50


FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Details)

FINANCIAL INSTRUMENTS AND FAIR VALUEMEASUREMENTS(Details) (USD $) (in Millions)

03/31/2012 12/31/2011

Other Borrowings [Member]

Financial instruments and fair value measurements Total debt $ 7 $ 8

Carrying (Reported) Amount, Fair Value Disclosure [Member]

Financial instruments and fair value measurements Total debt 811 753

Estimate of Fair Value, Fair Value Disclosure [Member]



Financial instruments and fair value measurements Total debt 59

Secured Debt [Member]


Senior Notes [Member]


Financial instruments and fair value measurements Total debt $ 811 $ 753


FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Details 2)

FINANCIAL INSTRUMENTS AND FAIR VALUEMEASUREMENTS(Details 2) (USD $) (in Millions)

03/31/2012 12/31/2011

Fair Value, Inputs, Level 1 [Member]

Fair Value Measurements Fair value of asset $ 1 $ 1

Fair value of liability $ 1 $ 1


ASSET RETIREMENT OBLIGATIONS (Details)

ASSET RETIREMENT OBLIGATIONS(Details) (USD $) (in Millions)



Brine and Waste Disposal Facilities [Member]

Asset retirement obligations Number of facilities to be closed 90

Lease Termination [Member]


Manufacturing Facility [Member]


Maximum [Member]

Asset retirement obligations Depreciation expense $ 1 $ 1

Asset retirement obligations Change in the carrying amount of the asset retirementobligations

Asset retirement obligation balance at beginning of period 21 23

Accretion expense (income) - cost of goods sold 1

Payments (1)

Asset retirement obligation balance at end of period 20 24

Net book value of asset retirement obligation assets at end of period 1 1

Depreciation expense 24 26

Asset retirement obligations included in accrued expenses 5

Asset retirement obligations included in other liabilities $ 15


ACQUISITIONS AND DIVESTITURES (Details)

ACQUISITIONS AND DIVESTITURES(Details) (USD $) (in Millions)




Day Star Materials LLC [Member]

Acquisitions Ownership interest in a joint venture (as a percent) 0.5

Cash contributions $ 6

ISEM S.r.l [Member]

Acquisitions Number of commercialized products to which the entity will haveaccess

2

Ownership interest in a joint venture (as a percent) 0.5

Investment in joint venture 20

Amount of annual contribution agreed to fund discovery anddevelopment

2

Period for making contribution (in years) P5Y

Contribution made $ 2


ACQUISITIONS AND DIVESTITURES (Details 2)

ACQUISITIONS AND DIVESTITURES(Details 2) (USD $) (in Millions)




3 Months Ended12/31/2011 02/29/2012


Divestitures Percentage ownership interest sold 0.50

Net consideration from sale of an investment $ 9 $ 38

Period for receiving proceeds from sale of an investment interest in annualinstallments (in years)

P3Y

Pre-tax gain on sale of business 27

Notional amount of forward contracts purchased to reduce the risk of currencyexposure

38

Gain due to change in fair market value of foreign exchange forward contracts $ 1


EMERGENCE FROM CHAPTER 11 (Details)

EMERGENCE FROM CHAPTER 11(Details) (USD $) (in Millions)






3 Months Ended03/31/2011 03/18/2009

Disputed Claims Reserve [Member]

Summary of distributable claim reservesestablished under Chapter 11 Plan

Remaining undisbursed reserve amount $ 29 $ 2

Settlements 4

Supplemental Distributions 23


Reorganization items related to Chapter11 cases

Total reorganization items, net 2 7

Number of US affiliates of the entity thatalso filed voluntary petitions for reliefunder Chapter 11

26

Supplemental cash distribution payments toHolders of Interests

3 2 3

Supplemental stock distribution paymentsto Holders of Interests

20 12

Number of Fully Administered Debtors

Reorganization items related to Chapter11 cases

Professional fees 1 6

Claim settlements, net 1 1

Total reorganization items, net $ 2 $ 7


LEGAL PROCEEDINGS AND CONTINGENCIES (Details)

LEGAL PROCEEDINGS AND CONTINGENCIES(Details) (USD $) (in Millions)


3 Months Ended03/31/2012 09/24/2010

Diacetyl Reserve [Member]

Summary of distributable claim reserves established under Chapter 11Plan

Claim reserve approved $ 7

Disputed Claims Reserve [Member]


Claim reserve approved


Environmental Reserve [Member]



Segregated Reserves [Member]




LEGAL PROCEEDINGS AND CONTINGENCIES (Details 2)

LEGAL PROCEEDINGS AND CONTINGENCIES(Details 2) (USD $) (in Millions)


Environmental Issue [Member]

Environmental Liabilities that Have Not Been Discharged or Settled Period for accrual of probable and reasonable remediation costs on an undiscounted basis (in years) P10Y

Environmental liabilities reflected as accrued expenses $ 18

Environmental liabilities reflected as other liabilities 70

Amount accrued for environmental liabilities 88

Reasonably possible ongoing environmental liabilities 102

Pre-tax charge for clean-up costs 2

Payments for clean-up costs 3

Receivable based on contractual agreement $ 10



LEGAL PROCEEDINGS AND CONTINGENCIES(Details 3) (USD $) (in Millions)


Indirect Guarantee of Indebtedness [Member]

Guarantees Number of banks in brazil 2

Payment Guarantee [Member]

Guarantees Outstanding guarantees $ 14

Maximum potential future principal and interest payments due under guarantees 5

Weighted fair value of guarantees 1


Guarantees Outstanding letters of credit 15

Guarantees Outstanding letters of credit $ 15


BUSINESS SEGMENT DATA (Details)

BUSINESS SEGMENT DATA(Details) (USD $) (in Millions)




BUSINESS SEGMENT DATA Number of major product lines 6

Net sales $ 85 $ 75

Operating Income (Loss) 10 2


BUSINESS SEGMENT DATA Net sales 84 79

Operating Income (Loss) (5) (3)








BUSINESS SEGMENT DATA Net sales (481) (440)






Impairment charges (1) (2)




Changes in estimates related to expected allowableclaims

(2)




General corporate expense, including amortization (29) (28)

Impairment charges (1) (2)


(2)

Operating income $ 41 $ 32


GUARANTOR CONDENSED CONSOLIDATING FINANCIAL DATA (Details)

GUARANTOR CONDENSED CONSOLIDATING FINANCIALDATA(Details) (USD $) (in Millions)




Guarantor condensed consolidating financial data Net sales $ 85 $ 75


Guarantor condensed consolidating financial data Net sales 84 79





ITALY

Guarantor condensed consolidating financial data Facility closures, severance and related costs


Guarantor condensed consolidating financial data Net sales (481) (440)

Cost of goods sold (481) (440)

Equity in net earnings of subsidiaries (5) (9)

Earnings (loss) before income taxes (5) (9)


ACCUMULATED OTHER COMPREHENSIVE LOSS Net earnings (5) (9)

Other comprehensive income, net of tax Comprehensive income attributable to Chemtura (5) (9)








Interest expense 1

Earnings (loss) before income taxes (4) (4)


ACCUMULATED OTHER COMPREHENSIVE LOSS Net earnings (4) (4)


Comprehensive income attributable to Chemtura (2)









Equity income (1)


Interest expense 2 1


Earnings (loss) before income taxes 8 16

Income tax benefit (expense) (1) (3)


ACCUMULATED OTHER COMPREHENSIVE LOSS Net earnings 9 13


Comprehensive income attributable to Chemtura 42 62












Equity in net earnings of subsidiaries 5 9




Other comprehensive income, net of tax Foreign currency translation adjustments (13) (22)

Unrecognized pension and other post-retirement benefit costs 2 2

Comprehensive income attributable to Chemtura 11 (13)









Equity income (1)






Income tax benefit (expense) 1 (3)




Unrecognized pension and other post-retirement benefit costs 2 2

Comprehensive income attributable to Chemtura $ 46 $ 40


GUARANTOR CONDENSED CONSOLIDATING FINANCIAL DATA (Details 2)

GUARANTOR CONDENSED CONSOLIDATING FINANCIALDATA(Details 2) (USD $) (in Millions)

03/31/2012 12/31/2011


ASSETS Goodwill $ 177 $ 174


ASSETS Intercompany receivables (8,309) (7,846)

Investment in subsidiaries (12,373) (14,617)

Total assets (20,682) (22,463)

LIABILITIES AND STOCKHOLDERS' EQUITY Intercompany payables (8,309) (7,846)

Total liabilities (8,309) (7,846)

Stockholders' equity (12,373) (14,617)

Total liabilities and stockholders' equity (20,682) (22,463)


ASSETS Current assets 252 204

Intercompany receivables 2,383 2,230

Investment in subsidiaries 1,736 1,734

Property, plant and equipment, net 272 271

Goodwill 3 3



LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities 80 79

Intercompany payables 2,692 2,491

Other long-term liabilities 59 60


Stockholders' equity 1,997 1,997







Goodwill 81 79





Long-term debt 1 1











Goodwill 93 92





Long-term debt 747 747





ASSETS Current assets 1,422 1,321


Goodwill 177 174








Total liabilities and stockholders' equity $ 2,968 $ 2,855



GUARANTOR CONDENSED CONSOLIDATING FINANCIAL DATA(Details 3) (USD $) (in Millions)




CASH FLOWS FROM OPERATING ACTIVITIES Net earnings (loss) $ (5) $ (9)

Adjustments to reconcile net earnings (loss) to net cash provided by (used in)operations:

Equity (income) loss 5 9


CASH FLOWS FROM OPERATING ACTIVITIES Net earnings (loss) (4) (4)



Changes in assets and liabilities, net 2 1

Net cash used in operating activities 10 10




CASH FLOWS FROM OPERATING ACTIVITIES Net earnings (loss) 9 13




Equity (income) loss (1)

Changes in assets and liabilities, net (38) (54)





CASH FLOWS FROM FINANCING ACTIVITIES Payments on other short term borrowings, net (1) 1

Net cash provided by financing activities (1) 1

CASH Effect of exchange rates on cash and cash equivalents 2 3












Equity (income) loss (5) (9)





CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from ABL Facility 59 73


CASH Change in cash and cash equivalents (32) (28)










Equity (income) loss (1)






CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from ABL Facility 59 73

Payments on other short term borrowings, net (1) 1


CASH Effect of exchange rates on cash and cash equivalents 2 3



Cash and cash equivalents at end of period $ 122 $ 113


_____________________________________Created by Morningstar® Document Research℠http://documentresearch.morningstar.com


http://documentresearch.morningstar.com

Morningstar® Document Research℠

FORM 10-K/AChemtura CORP - CHMTFiled: April 30, 2012 (period: December 31, 2011)

Amendment to a previously filed 10-K

U.S. SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-K/AAmendment No. 1

(Mark One)

⌧ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2011

OR

� TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934

For the transition period from to

Commission File No. 1-15339

Chemtura Corporation(Exact name of registrant as specified in its charter)

Delaware

52-2183153(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification Number)

1818 Market Street, Suite 3700, Philadelphia, Pennsylvania199 Benson Road, Middlebury, Connecticut

1910306749

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (203) 573−2000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Name of each exchange on which registeredCommon Stock, $0.01 par value

New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: NONE

Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.Yes ⌧ No �

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.Yes � No ⌧

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the SecuritiesExchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),and (2) has been subject to such filing requirements for the past 90 days. Yes ⌧ No �

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, everyInteractive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during thepreceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ⌧ No �

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and willnot be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference inPart III of this Form 10-K or any amendment to this Form 10-K. �

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smallerreporting company. See definition of “accelerated filer,” “large accelerated filer” and “smaller reporting company” in Rule 12b-2 ofthe Exchange Act. (Check off):

Large accelerated filer⌧

Accelerated filer�

Source: Chemtura CORP, 10-K/A, April 30, 2012 Powered by Morningstar® Document Research℠

Non-accelerated filer�

Smaller reporting company�

(Do not check if a 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 ⌧

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant, computed as ofJune 30, 2011, based on the value of the closing price of these shares as quoted on the New York Stock Exchange was $1.8 billion.

The number of voting shares of Common Stock of the registrant outstanding as of January 31, 2012 was 96.3 million.

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.Yes ⌧ No �

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Proxy Statement to be delivered to shareholders in connection with the Annual Meeting of Shareholders to beheld on May 10, 2012 are incorporated by reference into Part III.



EXPLANATORY NOTE

The sole purpose of this Amendment No. 1 to Chemtura Corporation’s Annual Report on Form 10-K for the year ended December 31,2011 (the “Form 10-K”) is to furnish an updated Exhibit 101 to the Form 10-K. Exhibit 101 consists of the following materialsformatted in XBRL (eXtensible Business Reporting Language):

101.INS XBRL Instance Document101.SCH XBRL Taxonomy Extension Schema Document101.CAL XBRL Taxonomy Extension Calculation Linkbase Document101.DEF XBRL Taxonomy Extension Definition Linkbase Document101.LAB XBRL Taxonomy Extension Labels Linkbase Document101.PRE XBRL Taxonomy Extension Presentation Linkbase Document No other changes have been made to the Form 10-K. This Form 10-K/A speaks as of the original filing date of the Form 10-K and hasnot been updated to reflect events occurring subsequent to the original filing date.

1


PART IV Item 15. Exhibits

The following exhibits are either filed herewith or incorporated herein by reference to the respective reports and registrationstatements identified in the parenthetical clause following the description of the exhibit:

ExhibitNo.

Description

2.1

Joint Chapter 11 Plan of Chemtura Corporation, et al, dated August 4, 2010, as amended (incorporated by reference toExhibit 2.1 to the Registrant’s November 4, 2010 Form 8-K).

3(i)

Amended and Restated Certificate of Incorporation of Chemtura Corporation (incorporated by reference to Exhibit 3.1to Chemtura’s Registration Statement on Form 8-A filed with the SEC on November 9, 2010).

3(ii)

Bylaws of Chemtura Corporation (incorporated by reference to Exhibit 3.2 to Chemtura’s Registration Statement onForm 8-A filed with the SEC on November 9, 2010).

4.1

Indenture, dated as of August 27, 2010, among Chemtura Corporation and U.S. Bank National Association(incorporated by reference to Exhibit 4.2 to the Registrant’s August 27, 2010 Form 8-K (“August 27, 2010 8-K”)).

4.2

Registration Rights Agreement, dated as of August 27, 2010 among Chemtura Corporation, the subsidiaries namedtherein and Citigroup Global Markets Inc., Banc of America Securities LLC, Barclays Capital Inc., Wells FargoSecurities, LLC and Goldman, Sachs & Co (incorporated by reference to Exhibit 4.3 to the Registrant’s August 27,2010 Form 8-K).

4.3

First Supplemental Indenture, dated as of November 9, 2010, among Chemtura Corporation, the guarantors namedtherein and U.S. Bank National Association (incorporated by reference to Exhibit 4.4 to the Registrant’s November 12,2010 Form 8-K (“November 12, 2010 8-K”)).

4.4

Amendment No. 1 to the Senior Secured Revolving Credit Facility Agreement, dated as of March 22, 2011, amongChemtura Corporation and certain of its subsidiaries named therein, as borrowers, Bank of America, N.A., asadministrative agent and collateral agent, the other agents party thereto and the Lenders party thereto (incorporated byreference to Exhibit 4.1 to the Registrant’s March 28, 2011 Form 8-K).

10.1

Letter Agreement, dated March 18, 2009, between the Company and Alvarez & Marsal North America, LLC(incorporated by reference to Exhibit 10.3 to the March 31, 2009 10-Q).

10.2

Separation Agreement and General Release, dated as of July 1, 2009, between Chemtura Corporation and RobertWedinger (incorporated by reference to Exhibit 99.1 to the Registrant’s July 9, 2009 Form 8-K).+

10.3

2009 Chemtura Corporation Management Incentive Program (incorporated by reference to Exhibit 10.1 to theRegistrant’s Form 10-Q for the period ended June 30, 2009).+

10.4

Share and Asset Purchase Agreement, dated December 23, 2009, among Chemtura Corporation, SK Atlas, LLC and SKCapital Partners II, LP (incorporated by reference to Exhibit 2.1 to the Registrant’s December 23, 2009 Form 8-K).

2


Exhibit No.

Description 10.5

Share and Asset Purchase Agreement between Chemtura Corporation and SK Atlas, LLC and SK Capital Partners II,LLP, dated December 15, 2010 (incorporated by reference to Exhibit 10.58 to the Registrant’s 2009 Form 10-K).

10.6

Share and Asset Purchase Agreement by and among Artek Aterian Holding Company, LLC, Aterian InvestmentPartners Distressed Opportunities, LP, Artek Surfin Chemicals Ltd. and Chemtura Corporation, dated February 23,2010 (incorporated by reference to Exhibit 2.1 to the Registrant’s February 24, 2010 Form 8-K).

10.7

Senior Secured Term Facility Credit Agreement, dated as of August 27, 2010, among Chemtura Corporation, Bank ofAmerica, N.A., as Administrative Agent, the other agents party thereto and the Lenders party thereto (incorporated byreference to Exhibit 4.5 to the Registrant’s May 16, 2011 Form 8-K/A).

10.8

Amendment No. 1 to the Senior Secured Term Facility Credit Agreement, dated as of September 27, 2010, amongChemtura Corporation, Bank of America, N.A., as Administrative Agent, the other agents party thereto and the Lendersparty thereto (incorporated by reference to Exhibit 4.1 to the Registrant’s September 30, 2010 Form 8-K).

10.9

Senior Secured Revolving Credit Facility Agreement, dated as of November 9, 2010, among Chemtura Corporation andcertain of its subsidiaries named therein, as borrowers, Bank of America, N.A., as administrative agent and collateralagent, the other agents party thereto and the Initial Lenders and other Lenders party thereto (incorporated by referenceto Exhibit 4.1 to the Registrant’s May 16, 2011 8-K/A).

10.10

Guaranty, dated as of November 9, 2010, pursuant to the Senior Secured Revolving Facility Credit Agreement(incorporated by reference to Exhibit 4.2 to the Registrant’s November 12, 2010 8-K).

10.11

Security Agreement, dated as of November 9, 2010, pursuant to the Senior Secured Revolving Facility CreditAgreement (incorporated by reference to Exhibit 4.3 to the Registrant’s November 12, 2010 8-K).

10.12

Guaranty, dated as of November 9, 2010, pursuant to the Senior Secured Term Facility Credit Agreement (incorporatedby reference to Exhibit 4.5 to the Registrant’s November 12, 2010 8-K).

10.13

Security Agreement, dated as of November 9, 2010, pursuant to the Senior Secured Term Facility Credit Agreement(incorporated by reference to Exhibit 4.6 to the Registrant’s November 12, 2010 8-K).

10.14

Employment Agreement, dated as of November 9, 2010, between Craig Rogerson and Chemtura Corporation(incorporated by reference to Exhibit 10.1 to the Registrant’s November 12, 2010 8-K).+

10.15

Employment Agreement, dated as of November 9, 2010, between Stephen Forsyth and Chemtura Corporation(incorporated by reference to Exhibit 10.2 to the Registrant’s November 12, 2010 8-K).+

10.16

Employment Agreement, dated as of November 9, 2010, between Billie Flaherty and Chemtura Corporation(incorporated by reference to Exhibit 10.3 to the Registrant’s November 12, 2010 8-K).+

10.17

Employment Agreement, dated as of November 9, 2010, between Chet Cross and Chemtura Corporation. (incorporatedby reference to Exhibit 10.17 to the Registrant’s 2010 Form 10-K) +

10.18

Employment Agreement, dated as of November 9, 2010, between Alan Swiech and Chemtura Corporation.(incorporated by reference to Exhibit 10.18 to the Registrant’s 2010 Form 10-K) +

10.19

Form of Nonqualified Stock Option Agreement (incorporated by reference to Exhibit 99.1 to the Registrant’sNovember 12, 2010 8-K). +

10.20

Form of Restricted Stock Unit Agreement (incorporated by reference to Exhibit 99.2 to the Registrant’s November 12,2010 8-K). +

10.21

Chemtura Corporation 2010 Long-Term Incentive Plan (incorporated by reference to Exhibit 99.1 to Chemtura’sRegistration Statement on Form S-8 filed with the Securities and Exchange Commission on November 9, 2010). +

10.22

Chemtura Corporation EIP Settlement Plan (incorporated by reference to Exhibit 99.2 to Chemtura’s RegistrationStatement on Form S-8 filed with the Securities and Exchange Commission on November 9, 2010). +

10.23

Chemtura Corporation Emergence Award Plan (incorporated by reference to Exhibit 99.3 to Chemtura’s RegistrationStatement on Form S-8 filed with the Securities and Exchange Commission on November 9, 2010). +


10.24

Chemtura Corporation 2010 Short Term Incentive Plan. (incorporated by reference to Exhibit 10.24 to the Registrant’s2010 Form 10-K)+

3


Exhibit No.

Description 10.25

2011 Management Incentive Plan (incorporated by reference to Exhibit 10.1 to the Registrant’s March 3, 2011Form 8-K (“March 3, 2011 8-K”)).+

10.26

Amendment No. 1 to Employment Agreement, dated as of March 9, 2011, between Craig Rogerson and ChemturaCorporation (incorporated by reference to Exhibit 10.2 to the Registrant’s March 3, 2011 8-K).+

10.27

Amendment No. 1 to Employment Agreement, dated as of March 9, 2011, between Stephen Forsyth and ChemturaCorporation (incorporated by reference to Exhibit 10.3 to the Registrant’s March 3, 2011 8-K).+

10.28

Amendment No. 1 to Employment Agreement, dated as of March 9, 2011, between Billie Flaherty and ChemturaCorporation (incorporated by reference to Exhibit 10.4 to the Registrant’s March 3, 2011 8-K).+

10.29

Master Agreement, dated as of October 26, 2011, Relating to Multi-Country Receivables Purchase Facilities(incorporated by reference to Exhibit 10.1 to the Registrant’s October 27, 2011 Form 8-K).

10.30

Amendment No. 2 to the Senior Secured Revolving Facility Credit Agreement, dated as of December 22, 2011, amongChemtura Corporation and certain of its subsidiaries named therein, as borrowers, Bank of America, N.A., asadministrative agent, and the other Lenders party thereto (incorporated by reference to Exhibit 4.1 to the Registrant’sDecember 22, 2011 Form 8-K).

21

Subsidiaries of the Registrant (incorporated by reference to Exhibit 21 to the Registrant’s 2011 Form 10-K)

23

Consent of Independent Registered Public Accounting Firm (incorporated by reference to Exhibit 23 to the Registrant’s2011 Form 10-K).

24

Form of Power of Attorney from directors and executive officers of the Registrant authorizing signature of this report(Original on file at principal executive offices of Registrant) (incorporated by reference to Exhibit 24 to the Registrant’s2011 Form 10-K).

31.1

Certification of Periodic Financial Reports by the Registrant’s Chief Executive Officer (Section 302) (incorporated byreference to Exhibit 31.1 to the Registrant’s 2011 Form 10-K).

31.2

Certification of Periodic Financial Reports by the Registrant’s Chief Financial Officer (Section 302) (incur(incorporatedby reference to Exhibit 31.2 to the Registrant’s 2011 Form 10-K).

32.1

Certification of Periodic Financial Reports by the Registrant’s Chief Executive Officer (Section 906) (incorporated byreference to Exhibit 32.1 to the Registrant’s 2011 Form 10-K).

32.2

Certification of Periodic Financial Reports by the Registrant’s Chief Financial Officer (Section 906) (incorporated byreference to Exhibit 32.2 to the Registrant’s 2011 Form 10-K).

101.INS

XBRL Instance Document *

101.SCH

XBRL Taxonomy Extension Schema Document *

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document *

101.LAB

XBRL Taxonomy Extension Label Linkbase Document *

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document *

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document *

* Copies of these Exhibits are furnished with this Annual Report on Form 10-K.+ This Exhibit is a compensatory plan, contract or arrangement in which one or more directors or executive officers of the Registrantparticipate.

4


SIGNATURE

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


(Registrant) Date: April 30, 2012 /s/ Kevin V. Mahoney

Name: Kevin V. Mahoney

Title: Senior Vice President, Corporate Controller and ChiefAccounting Officer 5


Document and Entity Information

Document and Entity Information(USD $)

12 Months Ended12/31/2011 01/31/2012 06/30/2011

Entity Registrant Name Chemtura CORP

Entity Central Index Key 0001091862

Document Type 10-K

Document Period End Date 2011-12-31

Amendment Flag true

Amendment Description The sole purpose of this Amendment No. 1 to Chemtura Corporationâ��s Annual Reporton Form 10-K for the year ended December 31, 2011 (the â��Form 10-Kâ��) is tofurnish an updated Exhibit 101 to the Form 10-K. Exhibit 101 consists of the followingmaterials formatted in XBRL (eXtensible Business Reporting Language): 101.INSXBRL Instance Document 101.SCH XBRL Taxonomy Extension Schema Document101.CAL XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF XBRLTaxonomy Extension Definition Linkbase Document 101.LAB XBRL TaxonomyExtension Labels Linkbase Document 101.PRE XBRL Taxonomy ExtensionPresentation Linkbase Document No other changes have been made to the Form 10-K.This Form 10-K/A speaks as of the original filing date of the Form 10-K and has notbeen updated to reflect events occurring subsequent to the original filing date.

Current Fiscal Year End Date --12-31

Entity Well-known Seasoned Issuer Yes

Entity Voluntary Filers No

Entity Current Reporting Status Yes

Entity Filer Category Large Accelerated Filer

Entity Public Float $ 1,800,000,000

Entity Common Stock, Shares Outstanding 96,300,000

Document Fiscal Year Focus 2,011

Document Fiscal Period Focus FY


Consolidated Statements of Operations

Consolidated Statements of Operations(USD $) (in Millions) except Per ShareData








Statement NET SALES $ 680 $ 710 $ 767 $ 603 $ 3,025 $ 2,760 $ 2,300

COSTS AND EXPENSES Cost of goods sold 2,296 2,103 1,721

Selling, general and administrative 339 315 289

Depreciation and amortization 140 175 162

Research and development 43 42 35

Facility closures, severance and relatedcosts

3 1 3

Antitrust costs 10

Gain on sale of business (27) (2)

Impairment charges 57 4 57 39


40 49 122 3 35 73

Equity income (3) (4)

OPERATING INCOME (LOSS) 227 38 (32)

Interest expense (63)[1] (191)[1] (70)[1]

Loss on early extinguishment of debt (75) (13) (88)

Other expense, net (6) (17)

Reorganization items, net (223) (33) (26) (21) (19) (303) (97)

Earnings (loss) from continuingoperations before income taxes

145 (550) (216)

Income tax expense (25) (22) (10)

Earnings (loss) from continuingoperations

120 (572) (226)

Loss from discontinued operations, net oftax

1 (2) (1) (63)

Loss on sale of discontinued operations,net of tax

(3) (9) (12) (3)

Net earnings (loss) 120 (585) (292)

Less: net earnings attributable tonon-controlling interests

(1) (1) (1)


(367) 9 (49) (179) 119 (586) (293)

BASIC AND DILUTED PER SHAREINFORMATION - ATTRIBUTABLETO CHEMTURA:

Earnings (loss) from continuingoperations, net of tax (in dollars pershare)

$ (2.25) $ 0.05 $ (0.16) $ (0.73) $ 1.19 $ (2.58) $ (0.93)

Loss from discontinued operations, net oftax (in dollars per share)

$ (0.01) $ (0.26)

Loss on sale of discontinued operations,net of tax (in dollars per share)

$ (0.01) $ (0.04) $ (0.05) $ (0.01)

Net earnings (loss) attributable toChemtura (in dollars per share)

$ (2.25) $ 0.04 $ (0.20) $ (0.74) $ 1.19 $ (2.63) $ (1.20)

Basic weighted - average sharesoutstanding (in shares)

163.7 242.9 242.9 242.9 100.1 223 242.9

Diluted weighted - average sharesoutstanding (in shares)

163.7 242.9 242.9 242.9 100.3 223 242.9

AMOUNTS ATTRIBUTABLE TOCHEMTURA STOCKHOLDERS:


Earnings (loss) from continuingoperations, net of tax

(367) 12 (41) (177) 119 (573) (227)

Loss from discontinued operations, net oftax

1 (2) (1) (63)

Loss on sale of discontinued operations,net of tax

(3) (9) (12) (3)


$ (367) $ 9 $ (49) $ (179) $ 119 $ (586) $ (293)

[1] - During 2010, $137 million of contractual interest expense was recorded relating to interest obligations on unsecured claims for the period March 18, 2009 throughthe November 10, 2010 that, as of the second quarter of 2010, were considered probable of being paid based on the plan of reorganization filed and later confirmed.Included in this amount is contractual interest expense of $63 million for 2009.


Consolidated Statements of Operations (Parenthetical)

Consolidated Statements of Operations(Parenthetical) (USD $) (in Millions)




12 Months Ended12/31/2010 11/10/2010

Contractual interest expense $ 9 $ 21 $ 108 $ 137

Cumulative contractual interestexpense incurred

$ 137 $ 137 $ 137



Consolidated Balance Sheets(USD $) (in Millions) 12/31/2011 12/31/2010

ASSETS CURRENT ASSETS Cash and cash equivalents $ 180 $ 201

Restricted cash 5 32

Accounts receivable 458 489

Inventories 542 528

Other current assets 136 171

Total current assets 1,321 1,421

NON-CURRENT ASSETS Property, plant and equipment 752 716

Goodwill 174 175

Intangible assets, net 392 429

Non-current restricted cash 6


Total Assets 2,855 2,913

LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Short-term borrowings 5 3


Accrued expenses 194 281

Income taxes payable 18 14


NON-CURRENT LIABILITIES Long-term debt 748 748

Pension and post-retirement health care liabilities 460 498

Other liabilities 211 207


STOCKHOLDERS' EQUITY Common stock - $.01 par value Authorized - 500.0 shares Issued - 98.3 shares in 2011 and 95.6 shares in 2010 1 1

Additional paid-in capital 4,353 4,305

Accumulated deficit (2,949) (3,068)

Accumulated other comprehensive loss (346) (276)

Treasury stock at cost - 2.0 shares in 2011 (22)

Total Chemtura stockholders' equity 1,037 962

Non-controlling interests 9 9

Total stockholders' equity 1,046 971

Total Liabilities and Stockholders' Equity $ 2,855 $ 2,913


Consolidated Balance Sheets (Parenthetical)

Consolidated Balance Sheets(Parenthetical) (USD $) 12/31/2011 12/31/2010

Common stock, par value (in dollars pershare)

$ 0.01 $ 0.01

Common stock, Authorized shares 500 500

Common stock, Issued shares 98.3 95.6

Treasury stock, shares 2


Consolidated Statements of Cash Flows

Consolidated Statements of Cash Flows(USD $) (in Millions)




CASH FLOWS FROM OPERATING ACTIVITIES Net earnings (loss) $ 120 $ (585) $ (292)

Adjustments to reconcile net earnings (loss) to net cash provided by (used in) operatingactivities:


Loss on sale of discontinued operations 12 3

Impairment charges 4 60 104

Loss on early extinguishment of debt 88


Stock-based compensation expense 26 10 3

Reorganization items, net 2 186 35

Changes in estimates related to expected allowable claims 3 35 73

Non-cash contractual post-petition interest expense 113

Provision for doubtful accounts 7 3 5

Equity income (3) (4)

Deferred taxes (6) 34

Changes in assets and liabilities, net: Accounts receivable 13 (77) 36

Impact of accounts receivable facilities (103)

Inventories (24) (36) 85

Restricted cash (38)

Other current assets 38 11 (4)

Other assets 3 (5) (11)

Accounts payable (11) 70 16

Accrued expenses (39) 36 (15)

Income taxes payable 5 (18) (28)

Pension and post-retirement health care liabilities (82) (61) (26)

Other liabilities 25 (10) 26

Other (4) (6)

Net cash provided by (used in) operating activities 182 (204) 49

CASH FLOWS FROM INVESTING ACTIVITIES Net proceeds from divestments 8 43 3

Payments for acquisitions, net of cash acquired (35) (5)

Capital expenditures (154) (124) (56)

Net cash used in investing activities (181) (81) (58)

CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from Senior Notes 452

Proceeds from Term Loan 292

Proceeds from long term borrowings 1

Payments on long term borrowings (18)

Proceeds from (payments on) other short term borrowings, net 3 (2)

Payments for debt issuance and refinancing costs (40) (30)

Payments for make-whole and no-call provisions (10)

Common shares acquired (22)

Proceeds from exercise of stock options 1


Net cash (used in) provided by financing activities (18) 251 173

CASH AND CASH EQUIVALENTS Effect of exchange rates on cash and cash equivalents (4) (1) 4

Change in cash and cash equivalents (21) (35) 168

Cash and cash equivalents at beginning of year 201 236 68

Cash and cash equivalents at end of year $ 180 $ 201 $ 236


Consolidated Statements of Stockholders' Equity

Consolidated Statements of Stockholders' Equity(USD $) (in Millions)

Old Shares[Member]

Accumulated Other ComprehensiveIncome(Loss) [Member]

Additional Paid-in Capital[Member]

Common Stock[Member]

Comprehensive Income[Member]

Consolidation, Eliminations[Member]

Guarantor Subsidiaries[Member]

Non-Guarantor Subsidiaries[Member]

Noncontrolling Interest[Member]

Parent Company[Member]

Retained Earnings[Member]

TreasuryStock[Member]

Total

Increase (Decrease) in Shareholders'Equity

Balance at 2008-12-31 $ (208) $ 3,036 $ 3 $ 13 $ (2,189) $ (167)$ 488

Balance (in shares) at 2008-12-31 254.1 11.5

Comprehensive income (loss):

Net (loss) earnings (292) (5) 45 (39) 1 (293) (293) (292)

Equity adjustment for translation of foreigncurrencies

51 51 51

Unrecognized pension and post-retirementplan costs, net of deferred tax expense of $1million in 2011, $4 in 2010, and $1 in 2009

(78) (78) (78)

Changes in fair value of derivatives 1 1 1

Total comprehensive income (loss) (318) (318)

Other (1) (1)

Stock-based compensation 3 3

Other issuances 0.3

Balance at 2009-12-31 (234) 3,039 3 13 (2,482) (167)172



Balance at 2009-12-31 (234) 3,039 3 13 (2,482) (167)172



Net (loss) earnings (585) (135) 67 69 1 (586) (586) (585)


(26) (26) (26)


(16) (16) (16)

Total comprehensive income (loss) (627) (627)

Cancellation of Chemtura previous commonstock

3 (3)

Cancellation of Chemtura previous commonstock (in shares)

254.4

Treasury stock cancellation (167) 167

Treasury stock cancellation (in shares) 11.5

Issuance of reorganized Chemtura commonstock

1,423 1 1,424

Issuance of reorganized Chemtura commonstock (in shares)

95.5 95.5

Dividends attributable to the noncontrollinginterest

(1) (1)

Purchase of subsidiary shares fromnoncontrolling interest

(4) (4)


Other issuances 0.1

Balance at 2010-12-31 (276) 4,305 1 (12,700) 2,026 10,674 9 971 (3,068) 971

Balance (in shares) at 2010-12-31 95.6


Balance at 2010-12-31 (276) 4,305 1 (12,700) 2,026 10,674 9 971 (3,068) 971

Balance (in shares) at 2010-12-31 95.6


Net (loss) earnings 120 (114) 25 90 1 119 119 120


(35) (35) (35)


(35) (35) (35)

Total comprehensive income (loss) 50 50

Treasury stock cancellation (in shares) 254.4

Issuance of reorganized Chemtura commonstock

19 19

Issuance of reorganized Chemtura commonstock (in shares)

2.4

Dividends attributable to the noncontrollinginterest

(1) (1)


Common shares acquired (22)(22)

Common shares acquired (in shares) (2)

Other issuances 0.3

Balance at 2011-12-31 $ (346) $ 4,353 $ 1 $ (14,617) $ 1,997 $ 12,620 $ 9 $ 1,046 $ (2,949) $ (22)$ 1,046

Balance (in shares) at 2011-12-31 98.3 2


Consolidated Statements of Stockholders' Equity (Parenthetical)

Consolidated Statements of Stockholders' Equity(Parenthetical) (USD $) (in Millions)




Unrecognized pension and post-retirement plan costs, deferred taxexpense

$ 1 $ 4 $ 1


NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(USD $)


NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 1)

NATURE OF OPERATIONS ANDSUMMARY OF SIGNIFICANTACCOUNTING POLICIES

Nature of Operations Chemtura Corporation, together with ourconsolidated subsidiaries is dedicated todelivering innovative, application-focusedspecialty chemical and consumer productofferings. Our principal executive offices arelocated in Philadelphia, Pennsylvania andMiddlebury, Connecticut. We operate in a widevariety of end-use industries, includingagriculture, automotive, construction, electronics,lubricants, packaging, plastics for durable andnon-durable goods, pool and spa chemicals, andtransportation. When we use the terms “Corporation,”“Company,” “Chemtura,” “Registrant,” “We,”“Us” and “Our,” unless otherwise indicated or thecontext otherwise requires, we are referring toChemtura Corporation and our consolidatedsubsidiaries. We are the successor to Crompton & KnowlesCorporation (“Crompton & Knowles”), whichwas incorporated in Massachusetts in 1900 andengaged in the manufacture and sale of specialtychemicals beginning in 1954. Crompton &Knowles traces its roots to the Crompton LoomWorks incorporated in the 1840s. We expandedthe specialty chemical business throughacquisitions in the United States and Europe,including the 1996 acquisition of UniroyalChemical Company, Inc. (“Uniroyal”), the 1999merger with Witco Corporation (“Witco”) and the2005 acquisition of Great Lakes ChemicalCorporation (“Great Lakes”). Basis of Presentation The accompanying Consolidated FinancialStatements include the accounts of Chemtura andour wholly-owned and majority-ownedsubsidiaries that we control. Other affiliates inwhich we have a 20% to 50% ownership interestor a non-controlling majority interest areaccounted for in accordance with the equitymethod. Other investments in which we have lessthan 20% ownership are recorded at cost. Allsignificant intercompany balances andtransactions have been eliminated inconsolidation. Our Consolidated Financial Statements have beenprepared in conformity with U.S. generallyaccepted accounting principles (“GAAP”), whichrequire us to make estimates and assumptions that


affect the reported amounts of assets andliabilities and disclosures of contingent assets andliabilities at the date of the financial statementsand the reported amounts of revenues andexpenses during the reporting period. Actualresults could differ from these estimates. Certain prior year amounts have been reclassifiedto conform to the current year’s presentation.These changes did not have a material impact onpreviously reported results of operations, cashflows or financial position. We operated as a debtor-in-possession (“DIP”)under the protection of the United StatesBankruptcy Court for the Southern District ofNew York (the “Bankruptcy Court”) fromMarch 18, 2009 (the “Petition Date”) throughNovember 10, 2010 (the “Effective Date”). Fromthe Petition Date through the Effective Date, ourConsolidated Financial Statements were preparedin accordance with Accounting StandardsCodification (“ASC”) Section 852-10-45,Reorganizations — Other Presentation Matters(“ASC 852-10-45”) which requires that financialstatements, for periods during the pendency ofour voluntary petitions for relief under Chapter 11of Title 11 of the United States Code (the“Chapter 11”) filings, distinguish transactions andevents that are directly associated with thereorganization from the ongoing operations of thebusiness. Accordingly, certain income, expenses,realized gains and losses and expenses for lossesthat were realized or incurred in the Chapter 11cases were recorded in Reorganization items, netin our Consolidated Statements of Operations. Inconnection with our emergence from Chapter 11on November 10, 2010, we recorded certain “planeffect” adjustments to our Consolidated FinancialStatements as of the Effective Date in order toreflect certain expenses of our plan ofreorganization (the “Plan”). See Note 18 –Emergence from Chapter 11 for a furtherdiscussion. Accounting Policies

Revenue Recognition

Substantially all of our revenues are derived fromthe sale of products. Revenue is recognized whenrisk of loss and title to the product is transferredto the customer. Revenue is recorded net of taxescollected from customers that are remitted togovernmental authorities with the collected taxesrecorded as current liabilities until remitted to therespective governmental authorities. Ourproducts are sold subject to various shippingterms. Our terms of delivery are included on oursales invoices and order confirmation documents.

Customer Rebates

We accrue for the estimated cost of customerrebates as a reduction of sales. Customer rebatesare primarily based on customers achieving


defined sales targets over a specified period oftime. We estimate the cost of these rebates basedon the likelihood of the rebate being achieved andrecognize the cost as a deduction from sales whensuch sales are recognized. Rebate programs aremonitored on a regular basis and adjusted asrequired. Our accruals for customer rebates were$20 million at December 31, 2011 and 2010,respectively. Customer rebates are included as areduction to accounts receivable on ourConsolidated Balance Sheet.

Operating Costs and Expenses

Cost of goods sold (“COGS”) includes all costsincurred in manufacturing goods, including rawmaterials, direct manufacturing costs andmanufacturing overhead. COGS also includeswarehousing, distribution, engineering,purchasing, customer service, environmental,health and safety functions, and shipping andhandling costs for outbound product shipments. Selling, general and administrative (“SG&A”)expenses include costs and expenses related to thefollowing functions and activities: selling,advertising, legal, provision for doubtfulaccounts, corporate facilities and corporateadministration. SG&A also includes accounting,information technology, finance and humanresources, excluding direct support inmanufacturing operations, which is included asCOGS. Research and development (“R&D”)expenses include basic and applied research anddevelopment activities of a technical andnon-routine nature. R&D costs are expensed asincurred. COGS, SG&A and R&D expensesexclude depreciation and amortization expenseswhich are presented on a separate line in ourConsolidated Statements of Operations.

Other Expense, Net

Other expense, net includes costs associated withour accounts receivable facilities, foreignexchange losses, interest income and other items.

(In millions)

2011

2010

2009

Costs of accounts

receivable facilities $ —

$ —

$ (2)

Foreign exchange loss

(2) (11) (22)Interest income

4

3

7

Other items, individuallyless than $1 million

(2) 2

—

$ — $ (6)$ (17)

Allowance for Doubtful Accounts

Included in accounts receivable are allowancesfor doubtful accounts in the amount of $20million in 2011 and $24 million in 2010. Theallowance for doubtful accounts reflects a reserverepresenting our estimate of the amounts that maynot be collectible. In addition to reviewing


delinquent accounts receivable, we consider manyfactors in estimating our reserves, includinghistorical data, experience, customer types, creditworthiness, and economic trends. From time totime, we may adjust our assumptions foranticipated changes in any of these or otherfactors expected to affect collection.

Inventory Valuation Inventories are valued at the lower of cost ormarket. Cost is determined using the first-in,first-out (“FIFO”) method.

Property, Plant and Equipment Property, plant and equipment are carried at cost,less accumulated depreciation. Depreciationexpense from continuing operations is computedon the straight-line method using the followingranges of asset lives: land improvements - 3 to 20years; buildings and improvements - 2 to 40years; machinery and equipment - 2 to 25 years;information systems and equipment - 2 to 10years; and furniture, fixtures and other - 1 to 10years. See Note 6 – Property, Plant andEquipment for further information. Renewals and improvements that significantlyextend the useful lives of the assets arecapitalized. Capitalized leased assets andleasehold improvements are depreciated over theshorter of their useful lives or the remaining leaseterm. Expenditures for maintenance and repairsare charged to expense as incurred.

Intangible Assets

Patents, trademarks and other intangibles assetsare being amortized principally on a straight-linebasis using the following ranges for theirestimated useful lives: patents - 5 to 20 years;trademarks - 7 to 40 years; customer relationships- 14 to 30 years; production rights - 9 to 10 years;and other intangibles - 5 to 20 years. See Note 7– Goodwill and Intangible Assets for furtherinformation.

Recoverability of Long-Lived Assetsand Goodwill

We evaluate the recoverability of the carryingvalue of long-lived assets, excluding goodwill,whenever events or changes in circumstancesindicate that the carrying value may not berecoverable. Under such circumstances, we assesswhether the projected undiscounted cash flows ofour long-lived assets are sufficient to recover theexisting unamortized cost of our long-livedassets. If the undiscounted projected cash flowsare not sufficient, we calculate the impairmentamount by discounting the projected cash flowsusing our weighted-average cost of capital. Theamount of the impairment is written off againstearnings in the period in which the impairment isdetermined.


We evaluate the recoverability of the carryingvalue of goodwill on an annual basis as ofJuly 31, or when events occur or circumstanceschange. See Note 7 – Goodwill and IntangibleAssets for further details.

Income Taxes

We account for income taxes using the asset andliability method. Under this method, deferred taxassets and liabilities are recognized for the futuretax consequences of temporary differencesbetween the carrying amounts and tax bases ofassets and liabilities using enacted rates. Theeffect of a change in tax rates on deferred taxassets is recognized in income in the period thatincludes the enactment date. We recognize the financial statement effects of anuncertain income tax position when it is morelikely than not, based on the technical merits, thatthe position will be sustained upon examination. We accrue for other tax contingencies when it isprobable that a liability to a taxing authority hasbeen incurred and the amount of the contingencycan be reasonably estimated. Provision is made for taxes on undistributedearnings of foreign subsidiaries and relatedcompanies to the extent that such earnings are notdeemed to be indefinitely reinvested.


Each quarter we evaluate and review ourestimates for future remediation, operation andmanagement costs directly related toenvironmental remediation, to determineappropriate environmental reserve amounts. Foreach site where the cost of remediation isprobable and reasonably estimable, we determinethe specific measures that are believed to berequired to remediate the site, the estimated totalcost to carry out the remediation plan, the portionof the total remediation costs to be borne by usand the anticipated time frame over whichpayments to implement the remediation plan willoccur. At sites where we expect to incur ongoingoperations and maintenance expenditures, weaccrue on an undiscounted basis, for a period ofgenerally 10 years, those costs which are probableand reasonably estimable. Environmentalliabilities related to claims as part of the Chapter11 cases are reflected in our ConsolidatedBalance Sheet at December 31, 2010 at amountsexpected to be allowed by the Bankruptcy Court.These amounts were settled during 2011.

Litigation and Contingencies

In accordance with guidance now codified underASC Topic 450, Contingencies, we record in ourConsolidated Financial Statements amountsrepresenting our probable and reasonablyestimable liability for claims, litigation and


guarantees. As information about current orfuture litigation or other contingencies becomesavailable, management assesses whether suchinformation warrants the recording of additionalexpenses relating to those contingencies. SeeNote 19 – Legal Proceedings and Contingenciesfor further information.

Stock-Based Compensation

We recognize compensation expense forstock-based awards issued over the requisiteservice period for each separately vesting tranche,as if multiple awards were granted. Stock-basedcompensation expense is measured at the date ofgrant, based on the fair value of the award. Stock-based compensation expense recognizedwas $26 million, $10 million, and $3 million forthe years ended December 31, 2011, 2010 and2009, respectively.

Translation of Foreign Currencies

Balance sheet accounts denominated in foreigncurrencies are translated at the current rate ofexchange as of the balance sheet date, whilerevenues and expenses are translated at averagerates of exchange during the periods presented. The cumulative foreign currency adjustmentsresulting from such translation are included inaccumulated other comprehensive income loss.

Cash Flows

Cash and cash equivalents include bank termdeposits with original maturities of three monthsor less. Included in cash and cash equivalents inour Consolidated Balance Sheets at bothDecember 31, 2011 and 2010 is $1 million ofrestricted cash that is required to be on deposit tosupport certain letters of credit and performanceguarantees, the majority of which will be settledwithin one year. Included in our restricted cash balance withincurrent assets at December 31, 2011 is $5 millionof cash on deposit for the settlement of disputedbankruptcy claims that existed on the EffectiveDate. At December 31, 2010, $32 million and $6million of restricted cash related to the disputedbankruptcy claims was included within currentassets and non-current assets, respectively. In 2011 and 2010 we settled approximately $41million and $373 million of liabilities subject tocompromise, respectively, in cash upon ouremergence from Chapter 11. Of the $41 millionpaid in 2011, $33 million was paid from restrictedcash. Additionally, in 2011 and 2010 we issuedapproximately $33 million and $1.4 billion ofcommon stock for the settlement of liabilitiessubject to compromise, respectively, inaccordance with the Plan. Cash payments included interest payments of $57million in 2011, $56 million in 2010 (which


includes $24 million of interest payments inaccordance with the Plan) and $45 million in2009. Cash payments also included income taxpayments, net of refunds of $16 million in 2011,$6 million in 2010 and $33 million in 2009. Accounting Developments

Recently Implemented

In May 2009, the Financial Accounting StandardsBoard (the “FASB”) issued guidance nowcodified as ASC Topic 855, Subsequent Events(“ASC 855”), which provides authoritativeaccounting literature related to evaluatingsubsequent events. ASC 855 is similar to thecurrent guidance with some exceptions that arenot intended to result in significant change tocurrent practice. On February 24, 2010, theFASB issued Accounting Standards Update(“ASU”) 2010-09, Amendments to CertainRecognition and Disclosure Requirements (“ASC2010-09”), which amends ASC 855. ASU2010-09 addresses certain implementation issuesrelated to an entity’s requirement to perform anddisclose subsequent event procedures. ASU2010-09 was effective immediately. We adoptedASU 2010-09 in our Quarterly Report for thequarter ended March 31, 2010 and as a result ofthe adoption we no longer are required to disclosethe date through which subsequent events havebeen evaluated. In June 2009, FASB issued guidance nowcodified as ASC Topic 105, Generally AcceptedAccounting Principles (“ASC 105”). ASC 105establishes only two levels of GAAP,authoritative and non-authoritative. The FASBAccounting Standards Codification (the“Codification”) is the source of authoritative,nongovernmental GAAP, except for rules andinterpretive releases of the Securities andExchange Commission (“SEC”), which aresources of authoritative GAAP for SECregistrants. All other non-grandfathered,non-SEC accounting literature not included in theCodification will become non-authoritative. Thestandard was effective for financial statements forinterim or annual reporting periods ending afterSeptember 15, 2009. As the Codification was notintended to change or alter existing GAAP, it didnot have any impact on our results of operations,financial condition or disclosures. Referencesmade to FASB guidance throughout thisdocument have been updated for the Codification. In June 2009, the FASB issued guidance nowcodified as ASC Topic 810, Consolidation (“ASC810”), which amends certain guidance fordetermining whether an entity is a variableinterest entity (“VIE”). ASC 810 requires anenterprise to perform an analysis to determinewhether its variable interests give it a controllingfinancial interest in a VIE. Companies arerequired to assess whether it has an implicitfinancial responsibility to ensure that a VIE


operates as designed when determining whether ithas the power to direct the activities of the VIEthat most significantly impact the entity’seconomic performance. In addition, ASC 810requires ongoing reassessments of whether anenterprise is the primary beneficiary of a VIE. The standard was effective for financialstatements for interim or annual reporting periodsthat began after November 15, 2009. Earlierapplication was prohibited. We adopted theprovisions of ASC 810 effective as of January 1,2010 and its adoption did not have a materialimpact on our results of operations, financialcondition or disclosures. On January 21, 2010, the FASB issued ASU2010-06, Improving Disclosures About FairValue Measurements (“ASU 2010-06”), whichamends ASC 820 Fair Value Measurements andDisclosures (“ASC820”). ASU 2010-06 adds newrequirements for disclosures about transfers intoand out of fair value hierarchy Levels 1 and 2, asdefined in ASC 820, and separate disclosuresabout purchases, sales, issuances, and settlementsrelating to fair value hierarchy Level 3measurements. ASU 2010-06 also clarifiesexisting fair value disclosures about the level ofdisaggregation and about inputs and valuationtechniques used to measure fair value. ASU2010-06 amends guidance on employers’disclosures about postretirement benefit planassets under ASC 715 Compensation-RetirementBenefits to require that disclosures be provided byclasses of assets instead of by major categories ofassets. ASU 2010-06 was effective for the firstreporting period (including interim periods)beginning after December 15, 2009, except forthe requirement to provide the fair valuehierarchy Level 3 activity mentioned above. Weadopted the provisions effective as of January 1,2011. The adoption of this guidance did not havea material impact on our results of operations,financial condition because it provides enhanceddisclosure requirements only. In May 2011, the FASB issued ASUNo. 2011-04, Amendments to Achieve CommonFair Value Measurement and DisclosureRequirements in U.S. GAAP and IFRSs (“ASU2011-04”). ASU 2011-04 amends GAAP toconform it with fair value measurement anddisclosure requirements in International FinancialReporting Standards (“IFRS”). The amendmentsin ASU 2011-04 changed the wording used todescribe the requirements in GAAP for measuringfair value and for disclosing information aboutfair value measurements. The provisions of ASU2011-04 are effective for the first reporting period(including interim periods) beginning afterDecember 15, 2011. We are currently evaluatingthe impact this accounting standard update willhave on our results of operations, financialcondition or disclosures. In June 2011, the FASB issued ASUNo. 2011-05, Presentation of Comprehensive


Income (“ASU 2011-05”). ASU 2011-05 requiresthe presentation of comprehensive income, thecomponents of net income and the components ofother comprehensive income either in a singlecontinuous statement of comprehensive income orin two separate but consecutive statements. Thenew standard also requires presentation ofadjustments for items that are reclassified fromother comprehensive income to net income in thestatement where the components of net incomeand the components of other comprehensiveincome are presented. The provisions of ASU2011-05 are effective for the first reporting period(including interim periods) beginning afterDecember 15, 2011. In December 2011, theFASB issued ASU 2011-12, ComprehensiveIncome (Topic 220). This update defers theeffective date for items only relating to thepresentation and reclassification adjustments inASU 2011-05. The adoption of these standardswill not have a material financial statementimpact as it only impacts the presentation of ourfinancial statements. In September 2011, the FASB issued ASUNo. 2011-08, Intangibles – Goodwill and Other(Topic 350): Testing Goodwill for Impairment(“ASU 2011-08”). The guidance in ASU 2011-08is intended to reduce complexity and costs byallowing an entity the option to make a qualitativeevaluation about the likelihood of goodwillimpairment to determine whether it shouldcalculate the fair value of a reporting unit. Theamendments also improve previous guidance byexpanding upon the examples of events andcircumstances that an entity should considerbetween annual impairment tests in determiningwhether it is more likely than not that the fairvalue of a reporting unit is less than its carryingamount. The amendments in ASU 2011-08 areeffective for annual and interim goodwillimpairment tests performed for fiscal yearsbeginning after December 15, 2011, with earlyadoption permitted. The adoption of this guidancewill not have a material impact on our results ofoperations or financial condition. In September 2011, the FASB issued ASUNo. 2011-09, Compensation – RetirementBenefits Multiemployer Plans (Subtopic 715-80)(“ASU 2011-09”). The guidance in ASU 2011-09is meant to assists users of financial statementsassess the potential future cash flow implicationsrelating to an employer’s participation inmultiemployer pension plans. The disclosureswill indicate the financial health of all of thesignificant plans in which the employerparticipates and assist a financial statement userto access additional information that is availableoutside the financial statements. The amendmentsin ASU 2011-09 are effective for annual periodsfor fiscal years ending after December 15, 2011,with early adoption permitted. We will adopt theprovisions of ASU 2011-09 beginning with ourinterim period ended March 31, 2012. Theadoption of this guidance is not expected to have


a material impact on our results of operations orfinancial condition. Risks and Uncertainties Our revenues are largely dependent on thecontinued operation of our manufacturingfacilities. There are many risks involved inoperating chemical manufacturing plants,including the breakdown, failure or substandardperformance of equipment, operating errors,natural disasters, the need to comply withdirectives of, and maintain all necessary permitsfrom, government agencies as well as potentialterrorist attacks. Our operations can be adverselyaffected by raw material shortages, labor forceshortages or work stoppages and events impedingor increasing the cost of transporting our rawmaterials and finished products. The occurrenceof material operational problems, including butnot limited to the events described above, mayhave a material adverse effect on the productivityand profitability of a particular manufacturingfacility. With respect to certain facilities, suchevents could have a material effect on Chemturaas a whole. Our operations are also subject to various hazardsincident to the production of industrialchemicals. These include the use, handling,processing, storage and transportation of certainhazardous materials. Under certaincircumstances, these hazards could cause personalinjury and loss of life, severe damage to anddestruction of property and equipment,environmental damage and suspension ofoperations. Claims arising from any futurecatastrophic occurrence at any one of ourfacilities may result in us being named as adefendant in lawsuits asserting potential claims. We perform ongoing credit evaluations of ourcustomers’ financial condition including anassessment of the impact, if any, of prevailingeconomic conditions. We generally do notrequire collateral from our customers. We areexposed to credit losses in the event ofnonperformance by counterparties on derivativeinstruments when utilized. The counterparties tothese transactions are major financial institutions,which may be adversely affected by globaleconomic impacts. However, we consider therisk of default to be minimal. International operations are subject to variousrisks which may or may not be present in U.S.operations. These risks include politicalinstability, the possibility of expropriation,restrictions on dividends and remittances,instabilities of currencies, requirements forgovernmental approvals for new ventures andlocal participation in operations such as localequity ownership and workers’ councils. Currency fluctuations between the U.S. dollar andthe currencies in which we conduct business havecaused and will continue to cause foreign


currency transaction gains and losses, which maybe material. Any of these events could have anadverse effect on our international operations.


ACQUISITIONS AND DIVESTITURES

ACQUISITIONS AND DIVESTITURES(USD $)


ACQUISITIONS AND DIVESTITURES 2)

ACQUISITIONS AND DIVESTITURES Acquisitions On January 26, 2011, we announced the formation of ISEM S.r.l. (“ISEM”), a strategic researchand development alliance with Isagro S.p.A., which will provide us access to twocommercialized products and accelerate the development and commercialization of new activeingredients and molecules related to our Chemtura AgroSolutions segment. ISEM is a 50/50joint venture between us and Isagro S.p.A. and is being accounted for as an equity methodinvestment. Our investment in the joint venture was €20 million ($29 million), which was madein January 2011. In addition, we and Isagro S.p.A. have agreed to jointly fund discovery anddevelopment efforts for ISEM, for approximately $2 million annually from each partner for fiveyears. During 2011 we funded approximately $2 million as planned. Funding our contributionswill be done in part by reducing our planned direct research and development spending. On February 1, 2011, we announced the formation of DayStar Materials, LLC (“Daystar”), ajoint venture with UP Chemical Co. Ltd. that will manufacture and sell high purity metal organicprecursors for the rapidly growing LED market in our Industrial Engineered Products segment. DayStar is a 50/50 joint venture and is being accounted for as an equity method investment. Wemade cash contributions of $6 million in 2011, in accordance with the joint venture agreement. Divestitures


On November 28, 2011, we sold our 50% interest in Tetrabrom Technologies Ltd. for netconsideration of $38 million. The consideration will be paid in equal annual installments over athree year period. The first payment is due in April 2012. A pre-tax gain of $27 million wasrecorded on the sale.

Sodium Sulfonates Divestiture

On July 30, 2010, we completed the sale of our natural sodium sulfonates and oxidizedpetrolatum product lines to Sonneborn Holding, LLC for net proceeds of $5 million. The saleincluded certain assets, our 50% interest in a European joint venture, the assumption of certainliabilities and the mutual release of obligations between the parties. The net assets soldconsisted of accounts receivable of $3 million, other current assets of $7 million, property, plantand equipment, net of $2 million, environmental liabilities of $3 million and other liabilities of$6 million. A pre-tax gain of approximately $2 million was recorded on the sale.

PVC Additives Divestiture

On April 30, 2010, we completed the sale of our PVC additives business to Galata ChemicalsLLC (formerly known as Artek Aterian Holding Company, LLC) and its sponsors, AterianInvestment Partners Distressed Opportunities, LP and Artek Surfin Chemicals Ltd. (collectively,“Galata”) for net proceeds of $38 million which included a working capital adjustment that wasreceived during the fourth quarter of 2010. The net assets sold consisted of accounts receivableof $47 million, inventory of $42 million, other current assets of $6 million, other assets of $1million, pension and other post-retirement health care liabilities of $25 million, accounts payableof $3 million and other accrued liabilities of $1 million. A pre-tax loss of approximately $13million was recorded on the sale after the elimination of $16 million of accumulated othercomprehensive loss (“AOCL”) resulting from the liquidation of a foreign subsidiary as part ofthe transaction. We classified the PVC additives business as discontinued operations in our ConsolidatedStatements of Operations for all periods presented. We determined the cash flows associatedwith the continuation of activities are deemed indirect and we evaluated whether we hadsignificant continued involvement in the operations of the disposed businesses. Accordingly, wedid not deem our involvement with the disposed business subsequent to the sale to besignificant. All applicable disclosures included in the accompanying footnotes have been


updated to reflect the PVC additives business as a discontinued operation. Loss from discontinued operations for periods with activities consists of the following:

Year Ended

(In millions)

2010

2009

Net Sales

$ 96

$ 241

Pre-tax loss from discontinued operations

$ (1) $ (69)(a)

Income tax benefit

—

6

Loss from discontinued operations

$ (1) $ (63) (a)

In 2009, we recorded a pre-tax impairment charge of $65 million to write-down the value ofproperty, plant and equipment, net and intangible assets, net (see Note 3 – Restructuringand Asset Impairment Activities for further information).

OrganoSilicones Divestiture

On July 31, 2003, we sold certain assets and assigned certain liabilities of our OrganoSiliconesbusiness unit to the Specialty Materials division of General Electric Company (“GE”) andacquired GE’s Specialty Chemicals business. During 2009, we recorded an accrual of $4 million ($3 million, net of taxes) which was includedin loss on sale of discontinued operations, net of tax in our Consolidated Statements ofOperations, related to the divestiture of our OrganoSilicones business. This accrual related to aloss contingency for information that became available during 2009.


RESTRUCTURING AND ASSET IMPAIRMENT ACTIVITIES

RESTRUCTURING AND ASSET IMPAIRMENT ACTIVITIES(USD $)


RESTRUCTURING AND ASSET IMPAIRMENT ACTIVITIES 3)

RESTRUCTURING AND ASSET IMPAIRMENT ACTIVITIES Reorganization Initiatives In 2009, the Bankruptcy Court approved the implementation of certain costsavings and growth initiatives, including the closure of a manufacturingfacility in Ashley, IN, the consolidation of warehouses related to ourConsumer Products segment, the reduction of leased space at two of our U.S.office facilities, and the rejection of various unfavorable contracts. Additionally, on January 25, 2010, our Board of Directors (the “Board”)approved an initiative involving the consolidation and idling of certain assetswithin the Great Lakes Solutions business operations in El Dorado,Arkansas, which was approved by the Bankruptcy Court on February 23,2010 and was expected to be substantially completed by the first half of2012. During 2010, the demand for brominated products used in electronicapplications grew significantly. With the evidence that demand has startedto recover for our products used in oil and gas applications in the Gulf ofMexico as well as insulation and furniture foam applications, andrecognizing the emerging demand for mercury removal applications, it hasbecome evident that we will need to produce larger quantities of brominethan were projected when we formulated our consolidation plan. In addition,in the first quarter of 2011 our partner informed us that they will exercisetheir right to purchase our interest in our Tetrabrom joint venture in theMiddle East that supplies a brominated flame retardant to us. While underthe terms of the joint venture agreement, the purchaser is obligated tocontinue to supply the current volumes of the brominated flame retardant tous for two years following the acquisition, we need to plan for the ultimateproduction of this product. The sale of our 50% interest in TetrabromTechnologies Ltd. was completed in November 2011, with proceeds to bereceived over a three year period beginning in April 2012, which will assistin defraying the cost of any required capacity addition that we may berequired to make. Our analysis has indicated that the most cost effectivesource of the additional bromine we require is to continue to operate many ofthe bromine assets we had planned to idle and to invest to improve theiroperating efficiency. In light of this analysis, on April 20, 2011, our Boardconfirmed that we should defer a portion of the El Dorado restructuring planand continue to operate certain of the bromine and brine assets that wereplanned to be idled. As a result of our reorganization initiatives, we recorded pre-tax charges of$3 million for the year ended December 31, 2011 primarily for assetimpairments and accelerated depreciation. We recorded pre-tax charges of$37 million for the year ended December 31, 2010 ($5 million was recordedto reorganization items, net for severance, asset relocation costs and contracttermination costs, $30 million was recorded to depreciation and amortizationfor accelerated depreciation, and $2 million was recorded to COGS foraccelerated asset retirement obligations and asset write-offs). In 2009, werecorded pre-tax charges of $9 million ($4 million was recorded toreorganization items, net for severance and real property lease rejections, $3million was recorded to depreciation and amortization expense foraccelerated depreciation, $1 million was recorded to COGS and $1 millionwas recorded to SG&A for asset disposals and accelerated asset retirementobligations). Corporate Restructuring Programs In November 2011, we approved a restructuring plan intended to makeChemtura AgroSolutions more cost efficient by centralizing certain functionsregionally and consolidating laboratory activities in North America. As aresult of this plan, we recorded a pre-tax charge of $3 million for severance


to facility closures, severance and related costs for the year endedDecember 31, 2011 In March 2010, we approved a restructuring plan to consolidate certaincorporate functions internationally to gain efficiencies and reduce costs. Asa result of this plan, we recorded a pre-tax charge of $1 million for severanceto facility closures, severance and related costs for the year endedDecember 31, 2010. In December, 2008, we announced a worldwide restructuring program toreduce cash fixed costs. This initiative involved a worldwide reduction inour professional and administrative staff by approximately 500 people. Werecorded a pre-tax charge of $3 million for the year ended December 31,2009 to facility closures, severance and related costs for severance andrelated costs. A summary of the charges and adjustments related to these restructuringprograms is as follows:

(In millions)

Severanceand

RelatedCosts

OtherFacilityClosureCosts

Total

Balance at January 1, 2009 $ 29

2

31

Facility closure, severance andrelated costs

2

1

3

Reorganization initiatives, net

1

3

4

Cash payments

(23) (2) (25)Balance at December 31, 2009

9

4

13


1

—

1

Cash payments

(9) (4) (13)Balance at December 31, 2010

1

—

1


3

—

3

Cash payments

(3) —

(3)Balance at December 31, 2011

$ 1

—

$ 1

At December 31, 2011 and 2010, the balance of these reserves were includedin accrued expenses in our Consolidated Balance Sheet. Asset Impairments In accordance with ASC Topic 350, Intangibles – Goodwill and Other(“ASC 350”) and ASC Topic 360, Property, Plant and Equipment (“ASC360”), we recorded pre-tax charges totaling $4 million, $60 million and $104million in 2011, 2010 and 2009, respectively, to impairment charges or lossfrom discontinued operations in our Consolidated Statements of Operations. For the year ended December 31, 2011, we recorded an impairment chargeof $3 million related to intangible assets of the Chemtura AgroSolutionsreporting unit with no future use. Additionally, there was a $1 millionimpairment charge related to property, plant and equipment of the El Dorado,Arkansas facility reorganization initiative. During the fourth quarter of 2010, we recorded an impairment charge of $57million to reduce the carrying value of goodwill in our ChemturaAgroSolutions segment. During the annual impairment review as of July 31,2010, we identified risks inherent in our Chemtura AgroSolutions reportingunit’s forecast given its recent performance was below expectations. At theend of the fourth quarter of 2010, this reporting unit’s performance hadsignificantly fallen below expectations for several consecutive quarters. Weconcluded that it was appropriate to perform a goodwill impairment reviewas of December 31, 2010. We used revised forecasts to compute theestimated fair value of this reporting unit. These projections indicated that


the estimated fair value of the Chemtura AgroSolutions reporting unit wasless than the carrying value. Based upon our preliminary step 2 analysis, anestimated goodwill impairment charge of $57 million was recorded(representing the remaining goodwill of this reporting unit). Due to thecomplexities of the analysis, which involves an allocation of the fair value,we finalized our step 2 analysis and goodwill impairment charge in the firstquarter of 2011. The analysis supported our 2010 conclusion that thegoodwill was fully impaired. During the first half of 2010, we recorded an impairment charge of $3million, which was included in loss from discontinued operations, net of taxin our Consolidated Statements of Operations, primarily related to furtherreducing the carrying value of property, plant and equipment of our PVCadditives business, formerly a component of the Industrial EngineeredProducts reporting segment, to reflect the revised estimated fair value of theassets. The decrease in fair value is the result of the definitive agreemententered into with counterparties in December 2009 for the sale of our PVCadditives business. In the fourth quarter of 2009, we recorded an impairment charge of $7million, of which $5 million was included in loss from discontinuedoperations, net of tax in our Consolidated Statements of Operations,primarily related to further reducing the carrying value of property, plant andequipment of our PVC additives business to reflect the revised estimated fairvalue of the assets. In the second quarter of 2009, we experienced continued year-over-yearrevenue reductions from the impact of the global recession in the electronic,building and construction industries. In addition, the Consumer Productssegment revenues were impacted by cooler and wetter than normal weatherin the northeastern and mid-western regions of the United States. Based onthese factors, we reviewed the recoverability of the long-lived assets for theasset groupings within our segments. For the PVC additives business, formerly a component of our IndustrialEngineered Products reporting segment, the carrying value of the long-livedassets was in excess of the undiscounted cash flows. As a result, werecorded a pre-tax impairment charge of $60 million in the second quarter of2009 to write-down the value of property, plant and equipment, net by $48million and intangible assets, net by $12 million. The $60 million chargewas included in loss from discontinued operations, net of tax in ourConsolidated Statements of Operations. Due to the factors cited above, we also concluded it was appropriate toperform a goodwill impairment review as of June 30, 2009. We used theupdated projections in our long-range plan to compute estimated fair valuesof our reporting units. These projections indicated that the estimated fairvalue of our Consumer Products reporting unit was less than its carryingvalue. Based on our preliminary analysis, an estimated goodwill impairmentcharge of $37 million was recorded for this reporting unit in the secondquarter of 2009 (representing the remaining goodwill in this reporting unit). We finalized our analysis of the goodwill impairment charge in the thirdquarter of 2009 and no change to the estimated charge was required (seeNote 7 — Goodwill and Intangible Assets for further information).


SALE OF ACCOUNTS RECEIVABLE

SALE OF ACCOUNTS RECEIVABLE(USD $)


SALE OF ACCOUNTS RECEIVABLE 4)

SALE OF ACCOUNTS RECEIVABLE On October 26, 2011, certain of our European subsidiaries (the “Sellers”) entered into a tradereceivables financing facility (the “A/R Financing Facility”) with GE Factofrance SAS aspurchaser (the “Purchaser”). Pursuant to the A/R Financing Facility, and subject to certainconditions stated therein, the Purchaser has agreed to purchase from the Sellers, on a revolvingbasis, certain trade receivables up to a maximum amount outstanding at any time of €68 million(approximately $88 million). The A/R Financing Facility is uncommitted and has an indefiniteterm. Since availability under the A/R Financing Facility is expected to vary depending on thevalue of the Seller’s eligible trade receivables, the Sellers’ availability under the A/R FinancingFacility may increase or decrease from time to time. The monthly financing fee on the drawnportion of the A/R Financing Facility is the applicable Base Rate plus 1.50%. In addition, theA/R Financing Facility is subject to a minimum commission on the annual volume of transferredreceivables. We had no outstanding borrowings under the A/R Financing Facility for the periodending December 31, 2011. We retain servicing rights and a retained interest in the financed receivables. We will classify theoutstanding trade receivables financing as a secured borrowings in our Consolidated BalanceSheet. The agreement governing our A/R Financing Facility does not contain any financial covenantsbut does contain customary events of default including certain receivable performance metrics. Any material failure to meet the applicable A/R Financing facility metrics in the future could leadto an early termination event under the A/R Financing Facility, which could require us to ceaseour use of such facilities, prohibiting us from obtaining additional borrowings against ourreceivables or, at the discretion of the Purchaser, requiring that we repay the A/R FinancingFacility in full. On January 23, 2009, we entered into a U.S. accounts receivable facility with up to $150 millionof capacity and a three-year term with certain lenders. Under the U.S. facility, certain of oursubsidiaries were able to sell their accounts receivable to a special purpose entity (“SPE”) thatwas created for the purpose of acquiring such receivables and selling an undivided interest thereinto certain purchasers. In accordance with the receivables purchase agreements, the purchaserswere granted an undivided ownership interest in the accounts receivable owned by the SPE. Thefacility was terminated on March 23, 2009 as a condition of the Chapter 11 proceedings. Allaccounts receivable were sold back by the purchasers and the SPE to their original selling entityusing proceeds of $117 million from a credit facility extended to us during Chapter 11. At January 1, 2009, certain of our European subsidiaries maintained a separate European Facilityto sell up to approximately $244 million (€175 million) of the eligible accounts receivabledirectly to a purchaser as of December 31, 2008. At January 1, 2009, $67 million of internationalaccounts receivable had been sold under this facility. During the second quarter of 2009, with noagreement to restart the European Facility, the remaining balance of the accounts receivablepreviously sold under this facility was settled and the facility was terminated. In 2009, the costs associated with the U.S. and European facilities of $2 million is included inother expense, net in our Consolidated Statements of Operations. Additionally, following thetermination of the U.S. facilities in 2009, deferred financing costs of approximately $4 millionrelated to this facility were charged to reorganization items, net in our Consolidated Statements ofOperations.


INVENTORIES

INVENTORIES(USD $)


INVENTORIES 5)

INVENTORIES

(In millions)

2011

2010

Finished goods

$ 348

$ 325

Work in process

43

41


151

162

$ 542

$ 528

Included in the above net inventory balances are inventory obsolescence reserves of approximately $18 million and$23 million at December 31, 2011 and 2010, respectively.



PROPERTY, PLANT AND EQUIPMENT(USD $)


PROPERTY, PLANT AND EQUIPMENT 6)


(In millions)

2011

2010


$ 85

$ 79


240

231


1,238

1,174

Information systems and equipment

175

173


31

32


121

97

1,890

1,786

Less: accumulated depreciation

1,138

1,070

$ 752

$ 716

Depreciation expense from continuing operations amounted to $102 million, $138 million and$124 million for 2011, 2010 and 2009, respectively. Depreciation expense from continuingoperations includes accelerated depreciation of certain fixed assets associated with ourrestructuring programs of $2 million, $30 million and $5 million for 2011, 2010 and 2009,respectively.


GOODWILL AND INTANGIBLE ASSETS

GOODWILL AND INTANGIBLE ASSETS(USD $)


GOODWILL AND INTANGIBLE ASSETS 7)

GOODWILL AND INTANGIBLE ASSETS Goodwill Goodwill by reportable segment is as follows:

(In millions)

Industrial Performance

Products

ChemturaAgroSolutions

Total

Goodwill at December 31, 2009

$ 268

$ 57

$ 325

Accumulated impairments at December 31, 2009

(90) —

(90)Net Goodwill at December 31, 2009

178

57

235

Impairment charges

—

(57) (57)

Foreign currency translation

(3) —

(3)


265

—

265

Accumulated impairments at December 31, 2010

(90) —

(90)Net Goodwill at December 31, 2010

175

—

175

Foreign currency translation

(1) —

(1)


264

—

264

Accumulated impairments at December 31,2011

(90) —

(90)

Net Goodwill at December 31, 2011

$ 174

$ —

$ 174

We have elected to perform our annual goodwill impairment procedures for all of ourreporting units in accordance with ASC Subtopic 350-20, Intangibles – Goodwill and Other -Goodwill (“ASC 350-20”) as of July 31, or sooner, if events occur or circumstances changethat would more likely than not reduce the fair value of a reporting unit below the carryingvalue. We estimate the fair value of our reporting units utilizing income and marketapproaches through the application of discounted cash flow and market comparable methods(Level 3 inputs as described in Note 16 – Financial Instruments and Fair ValueMeasurements). The assessment is required to be performed in two steps: step one to test fora potential impairment of goodwill and, if potential impairments are identified, step two tomeasure the impairment loss through a full fair valuing of the assets and liabilities of thereporting unit utilizing the acquisition method of accounting. We continually monitor and evaluate business and competitive conditions that affect ouroperations and reflects the impact of these factors in our financial projections. If permanentor sustained changes in business or, competitive conditions occur, they can lead to revisedprojections that could potentially give rise to impairment charges. We concluded that no goodwill impairment existed in any of our reporting units based on theannual reviews as of July 31, 2011 and 2010. However during the annual review as ofJuly 31, 2010, we identified risks inherent in Chemtura AgroSolutions reporting unit’sforecast given the recent performance of this reporting unit which was below expectations. Atthe end of the fourth quarter of 2010, this reporting unit’s performance had significantly fallenbelow expectations for several consecutive quarters. We concluded that it was appropriate toperform a goodwill impairment review as of December 31, 2010. We used revised forecaststo compute the estimated fair value of this reporting unit. These projections indicated that theestimated fair value of the Chemtura AgroSolutions reporting unit was less than the carryingvalue. Based upon our preliminary step 2 analysis, an estimated goodwill impairment chargeof $57 million was recorded, representing the remaining goodwill of this reporting unit. Dueto the complexities of the analysis, which involved an allocation of the fair value, we finalizedour step 2 analysis and goodwill impairment charge in the first quarter of 2011. The analysissupported our 2010 conclusion that the goodwill was fully impaired.


In connection with the continued weakness in global financial markets and our filing for reliefunder Chapter 11, we concluded it was appropriate to perform a goodwill impairment reviewas of March 31, 2009. We used our own estimates of the effects of the macroeconomicchanges on the markets we serve to develop an updated view of our projections. Thoseupdated projections were used to compute updated estimated fair values of our reportingunits. Based on these estimated fair values used to test goodwill for impairment, weconcluded that no impairment existed in any of our reporting units at March 31, 2009. Subsequently in June 2009, we performed another goodwill impairment review as certain ofour reporting unit were negatively impacted versus expectations due to the cold and wetweather conditions during the first half of 2009. We used the updated projections in ourlong-range plan to compute estimated fair values of our reporting units. These projectionsindicated that the estimated fair value of our Consumer Products reporting unit was less thanthe carrying value. Based on our analysis, a goodwill impairment charge of $37 million wasrecorded for this reporting unit in the second quarter of 2009, which represented theremaining goodwill in this reporting unit. Intangible Assets Our intangible assets (excluding goodwill) are comprised of the following:

2011

2010

(In millions)

GrossValue

AccumulatedAmortization

NetIntangibles

GrossValue


NetIntangibles

Patents $ 128

$ (70) $ 58

$ 127

$ (62) $ 65

Trademarks

262

(71) 191

264

(62) 202


146

(50) 96

147

(43) 104

Production rights

46

(28) 18

46

(24) 22

Other

70

(41) 29

73

(37) 36

Total $ 652

$ (260) $ 392

$ 657

$ (228) $ 429

The decrease in gross intangible assets since December 31, 2010 is due to foreign currencytranslation of $4 million, the write-off of $4 million related to fully amortized intangibles(offset within accumulated amortization) and impairments of $3 million, partially offset bythe capitalization of re-registration costs of $6 million. Amortization expense from continuing operations related to intangible assets amounted to $38million in 2011, $37 million in 2010 and $38 million in 2009. Estimated amortizationexpense of intangible assets for the next five fiscal years is as follows: $35 million (2012),$35 million (2013), $29 million (2014) $25 million (2015) and $18 million (2016).


DEBT

DEBT(USD $)


DEBT 8)

DEBT Our debt is comprised of the following:

(In millions)

2011

2010

7.875% Senior Notes due 2018, net of unamortized discount of $3 million in 2011 and

2010 with an effective interest rate of 8.17% in 2011 and 8.15% in 2010

$ 452

$ 452

Term Loan due 2016, net of unamortized discount of $2 million in 2011 and $3 millionin 2010 with an effective interest rate of 5.79% in 2011 and 5.77% in 2010

293

292

Other borrowings

8

7

Total Debt

753

751

Less: Short-term borrowings

(5) (3)

Total Long-Term Debt

$ 748

$ 748

Financing Facilities In 2010, in order to fund our Chapter 11 Plan and provide for future capital needs, we obtained approximately $1 billion infinancing. On August 27, 2010, we completed a private placement offering under Securities and Exchange Commission(“SEC”) Rule 144A of $455 million aggregate principal amount of 7.875% senior notes due 2018 (the “Senior Notes”) atan issue price of 99.269% in reliance on an exemption pursuant to Section 4(2) of the Securities Act of 1933. We alsoentered into a senior secured term facility credit agreement due 2016 (the “Term Loan”) with Bank of America, N.A., asadministrative agent, and other lenders party thereto for an aggregate principal amount of $295 million with an originalissue discount of 1%. The Term Loan permits us to increase the size of the facility by up to $125 million. On theEffective Date, we entered into a five year senior secured revolving credit facility available through 2015 (the “ABLFacility”) with Bank of America, N.A., as administrative agent and the other lenders party thereto for an amount up to$275 million, subject to availability under a borrowing base (with a $125 million letter of credit sub-facility). The ABLFacility permits us to increase the size of the facility by up to $125 million subject to obtaining lender commitments toprovide such increase.

Senior Notes

At any time prior to September 1, 2014, we may redeem some or all of the Senior Notes at a redemption price equal to100% of the principal amount thereof plus a make-whole premium (as defined in the indenture) and accrued and unpaidinterest up to, but excluding, the redemption date. We may also redeem some or all of the Senior Notes at any time on orafter September 1, 2014, with the redemption prices being, prior to September 1, 2015, 103.938% of the principal amount,on or after September 1, 2015 and prior to September 1, 2016, 101.969% of the principal amount and thereafter 100% plusany accrued and unpaid interest to the redemption date. In addition, prior to September 1, 2013, we may redeem up to 35%of the Senior Notes from the proceeds of certain equity offerings. If we experience specific kinds of changes in control, wemay be required to offer to repurchase all of the Senior Notes. The redemption price (subject to limitations as described inthe indenture) is equal to accrued and unpaid interest on the date of redemption plus the redemption price as set forthabove. Our Senior Notes contain covenants that limit our ability to enter into certain transactions, such as incurring additionalindebtedness, creating liens, paying dividends, and entering into dispositions and joint ventures. As of December 31, 2011,we were in compliance with the covenant requirements of the Senior Notes. Our Senior Notes are subject to certain events of default, including, among others, breach of other agreements in theIndenture; any guarantee of a significant subsidiary ceasing to be in full force and effect; a default by us or our restrictedsubsidiaries under any bonds, debentures, notes or other evidences of indebtedness of a certain amount, resulting in itsacceleration; the rendering of judgments to pay certain amounts of money against us or our significant subsidiaries whichremains outstanding for 60 days; and certain events of bankruptcy or insolvency. In connection with the Senior Notes, in June 2011, we consummated an exchange offer, registered with the SEC, toexchange unregistered Senior Notes originally issued in the private placement offering for registered Senior Notes. Theterms of the registered Senior Notes are substantially identical to the unregistered Senior Notes, except that transferrestrictions, registration rights and additional interest provisions relating to the unregistered Senior Notes do not apply to


the registered Senior Notes.

Term Loan

Borrowings under the Term Loan (due in 2016) bear interest at a rate per annum equal to, at our election, (i) 3.0% plus theBase Rate (defined as the higher of (a) the Federal Funds rate plus 0.5%; (b) Bank of America’s published prime rate; and(c) the Eurodollar Rate plus 1%) or (ii) 4.0% plus the Eurodollar Rate (defined as the higher of (a) 1.5% and (b) the currentLIBOR adjusted for reserve requirements). The Term Loan is secured by a first priority lien on substantially all of our U.S. tangible and intangible assets (excludingaccounts receivable, inventory, deposit accounts and certain other related assets), including, without limitation, realproperty, equipment and intellectual property, together with a pledge of the equity interests of our first tier subsidiaries andthe guarantors of the Term Loan, and a second priority lien on substantially all of our U.S. accounts receivable andinventory. We may, at our option, prepay the outstanding aggregate principal amount on the Term Loan advances in whole or ratablyin part along with accrued and unpaid interest on the date of the prepayment. Our obligations as borrower under the Term Loan are guaranteed by certain of our U.S. subsidiaries. The Term Loan contains covenants that limit, among other things, our ability to enter into certain transactions, such ascreating liens, incurring additional indebtedness or repaying certain indebtedness, making investments, paying dividends,and entering into acquisitions, dispositions and joint ventures. Additionally, the Term Loan requires that we meet certain financial maintenance covenants including a maximum SecuredLeverage Ratio (as defined in the agreement) of 2.5:1.0 and a minimum Consolidated Interest Coverage Ratio (as definedin the agreement) of 3.0:1.0. As of December 31, 2011, we were in compliance with the covenant requirements of theTerm Loan. The Term Loan is subject to certain events of default, applicable to Chemtura, the guarantors and their respectivesubsidiaries, including, nonpayment of principal, interest, fees or other amounts, violation of covenants, materialinaccuracy of representations and warranties (including the existence of a material adverse event as defined in theagreement), cross-default to material indebtedness, certain events of bankruptcy and insolvency, material judgments,certain ERISA events, a change in control, and actual or asserted invalidity of liens or guarantees or any collateraldocument, in certain cases subject to the threshold amounts and grace periods set forth in the Term Loan agreement. On September 27, 2010, we entered into Amendment No. 1 to the Term Loan which deleted the requirement thatintercompany loans be subordinated, as the requirement was inconsistent with the provisions for prepayment of other debtwhich expressly permitted prepayments of intra-group debt. The amendment also clarified, among other things, languagepermitting payments and dispositions made pursuant to the Plan.

ABL Facility

The revolving loans under the ABL Facility (available through 2015) will bear interest at a rate per annum which, at ouroption, can be either: (a) a base rate (the highest of (i) Bank of America, N.A.’s “prime rate,” (ii) the Federal FundsEffective Rate plus 0.5% and (iii) the one-month LIBOR plus 1.00%) plus a margin of between 2.25% and 1.75% based onthe average excess availability under the ABL Facility for the preceding quarter; or (b) the current reserve adjusted LIBORplus a margin of between 3.25% and 2.75% based on the average excess availability under the ABL Facility for thepreceding quarter. Our obligations (and the obligations of the other borrowing subsidiaries) under the ABL Facility are guaranteed on asecured basis by all the guarantors (as defined in the agreement) that are not borrowers, and by certain of our future directand indirect domestic subsidiaries. The obligations and guarantees under the ABL Facility will be secured by (i) afirst-priority security interest in the borrowers’ and the guarantors’ existing and future inventory and accounts receivable,together with general intangibles relating to inventory and accounts receivable, contract rights under agreements relating toinventory and accounts receivable, documents relating to inventory, supporting obligations and letter-of-credit rightsrelating to inventory and accounts receivable, instruments evidencing payment for inventory and accounts receivable;money, cash, cash equivalents, securities and other property held by the Administrative Agent or any lender under the ABLFacility; deposit accounts, credits and balances with any financial institution with which any borrower or any guarantormaintains deposits and which contain proceeds of, or collections on, inventory and accounts receivable; books, records andother property related to or referring to any of the foregoing and proceeds of any of the foregoing (the “Senior Asset BasedPriority Collateral”); and (ii) a second-priority security interest in substantially all of the borrowers’ and the guarantors’other assets, including (a) 100% of the capital stock of borrowers’ and the guarantors’ direct domestic subsidiaries held bythe borrowers and the guarantors and 100% of the non-voting capital stock of the borrowers’ and the guarantors’ directforeign subsidiaries held by the borrowers and the guarantors, and (b) 65% of the voting capital stock of the borrowers’ andthe guarantors’ direct foreign subsidiaries (to the extent held by the borrowers and the guarantors), in each case subject to


certain exceptions set forth in the ABL Facility agreement and the related loan documentation. Mandatory prepayments of the loans under the ABL Facility (and cash collateralization of outstanding letters of credit) arerequired (i) to the extent the usage of the ABL Facility exceeds the lesser of (a) the borrowing base and (b) the theneffective commitments and (ii) subject to exceptions, thresholds and reinvestment rights, with the proceeds of certain salesor casualty events of assets on which the ABL Facility has a first priority security interest. If, at the end of any business day, the amount of unrestricted cash and cash equivalents held by the borrowers andguarantors (excluding amounts in certain exempt accounts) exceeds $20 million in the aggregate, mandatory prepaymentsof the loans under the ABL Facility (and cash collateralization of outstanding letters of credit) are required on thefollowing business day in an amount necessary to eliminate such excess (net of our known cash uses on the date of suchprepayment and for the 2 business days thereafter). The ABL Facility agreement contains certain affirmative and negative covenants (applicable to us, the other borrowingsubsidiaries, the guarantors and their respective subsidiaries), including, without limitation, covenants requiring financialreporting and notices of certain events, and covenants imposing limitations on incurrence of indebtedness and guarantees;liens; loans and investments; asset dispositions; dividends, redemptions, and repurchases of stock and prepayments,redemptions and repurchases of certain indebtedness; mergers, consolidations, acquisitions, joint ventures or creation ofsubsidiaries; material changes in business; transactions with affiliates; restrictions on distributions from subsidiaries andgranting of negative pledges; changes in accounting and reporting; sale leasebacks; and speculative transactions, and aspringing financial covenant requiring a minimum trailing 12-month fixed charge coverage ratio (as defined in theagreement) of 1.1 to 1.0 at all times during any period from the date when the amount available for borrowings under theABL Facility falls below the greater of (i) $34 million and (ii) 12.5% of the aggregate commitments to the date suchavailable amount has been equal to or greater than the greater of (i) $34 million and (ii) 12.5% of the aggregatecommitments for 45 consecutive days. As of December 31, 2011, we were in compliance with the covenant requirementsof the ABL Facility. The ABL Facility agreement contains certain events of default (applicable to us, the other borrowing subsidiaries, theguarantors and their respective subsidiaries), including nonpayment of principal, interest, fees or other amounts, violationof covenants, material inaccuracy of representations and warranties (including the existence of a material adverse event asdefined in the agreement), cross-default to material indebtedness, certain events of bankruptcy and insolvency, materialjudgments, certain ERISA events, a change in control, and actual or asserted invalidity of liens or guarantees or anycollateral document, in certain cases subject to the threshold amounts and grace periods set forth in the ABL Facilityagreement. On March 22, 2011, we entered into Amendment No. 1 to the ABL Facility which permits us to amend the Term Loan(and refinance those facilities in connection with such an amendment) to provide for principal amortization not exceeding1% of the total principal amount of the Term Loan (such percentage calculated as of the date of any such amendment to theTerm Loan). Amendment No. 1 also clarifies that we may, in connection with an otherwise permitted amendment to theTerm Loan that refinances those facilities, increase the Term Loan up to the maximum amount permitted under the debtincurrence covenant contained in the ABL Facility. On December 22, 2011, we entered into Amendment No. 2 to the ABL Facility which modifies certain of the negativecovenants to provide us with additional flexibility in incurrence of indebtedness, liens, investments, certain restrictedpayments and repayment of other debt if certain borrowing availability tests under the ABL Facility are met. At December 31, 2011 and 2010, we had no borrowings under the ABL Facility, but we had $15 million and $12 million atDecember 31, 2011 and 2010, respectively, of outstanding letters of credit (primarily related to insurance obligations,environmental obligations and banking credit facilities) which utilizes available capacity under the facility. AtDecember 31, 2011 and 2010 we had approximately $201 million and $185 million, respectively, of undrawn availabilityunder the ABL Facility. Maturities At December 31, 2011, the scheduled maturities of debt are as follows: 2012 - $6 million; 2013 - $0 million; 2014 - $0million; 2015 - $0 million; 2016 - $295 million and thereafter $455 million. Debtor-in-Possession Credit Facility On March 18, 2009, in connection with the Chapter 11 filing, we entered into a $400 million senior secured super-prioritydebtor-in-possession DIP Credit Facility (the “DIP Credit Facility”) arranged by Citigroup Global Markets Inc. withCitibank, N.A. as administrative agent, subject to approval by the Bankruptcy Court. On March 20, 2009, the BankruptcyCourt entered an interim order approving the Debtors’ access to $190 million of the DIP Credit Facility in the form of a$165 million term loan and a $25 million revolving credit facility. The DIP Credit Facility closed on March 23, 2009 withthe drawing of the $165 million term loan. The initial proceeds were used to fund the termination of the U.S. accountsreceivable facility, pay fees and expenses associated with the transaction and fund business operations. On April 29, 2009,


the Bankruptcy Court entered a final order providing full access to the $400 million DIP Credit Facility. On February 9, 2010, the Bankruptcy Court gave interim approval of the Amended and Restated Senior SecuredSuper-Priority Debtor-in-Possession Credit Agreement (the “Amended DIP Credit Facility”) by and among the Debtors,Citibank N.A. and the other lenders party thereto (collectively the “Loan Syndicate”). The Amended DIP Credit Facilityreplaced the DIP Credit Facility. The Amended DIP Credit Facility provided for a first priority and priming securedrevolving and term loan credit commitment of up to an aggregate of $450 million comprising a $300 million term loan anda $150 million revolving credit facility. The Amended DIP Credit Facility was scheduled to mature on the earliest of 364days after the closing, the effective date of a plan of reorganization or the date of termination in whole of the Commitments(as defined in the credit agreement governing the Amended DIP Credit Facility). The proceeds of the term loan under theAmended DIP Credit Facility were used to, among other things, refinance the obligations outstanding under the previousDIP Credit Facility and provide working capital for general corporate purposes. The Amended DIP Credit Facilityprovided a reduction in our financing costs through reductions in interest spread and avoidance of the extension feespayable under the DIP Credit Facility in February and May 2010. The Amended DIP Credit Facility closed onFebruary 12, 2010 with the drawing of the $300 million term loan. On February 9, 2010, the Bankruptcy Court entered anorder approving full access to the Amended DIP Credit Facility, which order became final by its terms on February 18,2010. The Amended DIP Credit Facility resulted in a substantial modification for certain lenders within the Loan Syndicate giventhe reduction in their commitments as compared to the DIP Credit Facility. Accordingly, we recognized a $13 millioncharge for the year ended December 31, 2010 for the early extinguishment of debt resulting from the write-off of deferredfinancing costs and the incurrence of fees payable to lenders under the DIP Credit Facility. We also incurred $5 million ofdebt issuance costs related to the Amended DIP Credit Facility for the year ended December 31, 2010. Certain fees were payable to the lenders upon the reduction or termination of the commitment and upon the substantialconsummation of a plan of reorganization as described more fully in the DIP Credit Facility including an exit fee payableto the Lenders of 2% of “roll-up” commitments and 3% of all other commitments. These fees, which amounted to $11million, were paid upon the funding of the term loan under the Amended DIP Credit Facility. Borrowings under the DIP Credit Facility term loans bore interest at a rate per annum equal to 10.5%. Additionally, wepaid an unused commitment fee of 1.5% per annum and a letter of credit fee of 3.75% per annum. Borrowings under theAmended DIP Credit Facility term loan bore interest at a rate per annum equal to 6%. Additionally, we paid an unusedcommitment fee of 1.0% per annum and a letter of credit fee of 4.5% per annum. The Amended DIP Credit Facility was paid in full and terminated on the Effective Date. Pre-Petition Debt Obligations The Chapter 11 filing constituted an event of default under, or otherwise triggered repayment obligations with respect to,several of the debt instruments and agreements relating to direct and indirect financial obligations of the Debtors as of thePetition Date (collectively “Pre-petition Debt”). As a result, all obligations under the Pre-petition Debt becameautomatically and immediately due and payable. During the pendency of the Chapter 11 cases, efforts to enforce thepayment obligations under the Pre-petition Debt were stayed. Further, interest accruals and payments for the unsecuredPre-petition Debt were ceased as of the Petition Date. As a result of the estimated claim recoveries reflected in the Planfiled during the second quarter of 2010, we determined that it was probable that obligations for interest on unsecuredclaims would ultimately be paid. As such, interest that had not previously been recorded since the Petition Date wasrecorded in the second quarter of 2010. The amount of post-petition interest recorded during the year ended December 31,2010 was $137 million which represents the cumulative amount of interest for unsecured claims (including unsecured debt)accruing from the Petition Date through the Effective Date. As of November 3, 2010, our Plan confirmation date, we recorded the allowed claims for our “make-whole” settlement onthe $500 million of 6.875% Notes Due 2016 (“2016 Notes”) and our “no-call” settlement on the $150 million 6.875%Debentures due 2026 (“2026 Debentures”). We recorded these claims in 2010 in the amount of $70 million within loss onearly extinguishment of debt in our Consolidated Statements of Operations. As of December 31, 2010, all claims relating to Pre-petition Debt have been settled and paid in accordance with theprovisions of the Plan.


LEASES

LEASES(USD $)


LEASES 9)

LEASES At December 31, 2011, minimum rental commitments, primarily for buildings, land and equipment under non-cancelableoperating leases, net of sublease income, amounted to $13 million (2012), $12 million (2013), $10 million (2014), $8million (2015), $8 million (2016), $24 million (2017 and thereafter) and $75 million in the aggregate. Sublease income isnot significant in future periods. Rental expenses under operating leases, net of sublease income were $25 million (2011),$24 million (2010) and $29 million (2009). Sublease income was less than $1 million in 2011, 2010 and 2009. Future minimum lease payments under capital leases at December 31, 2011 were not significant. Real estate taxes, insurance and maintenance expenses are generally our obligations and, accordingly, were not included aspart of rental payments. It is expected that in the normal course of business, leases that expire will be renewed or replacedby similar leases.


INCOME TAXES

INCOME TAXES(USD $)


INCOME TAXES 10)

INCOME TAXES The components of earnings (loss) from continuing operations before income taxes and the income taxexpense(benefit) are as follows:

(In millions)

2011

2010

2009

Pre-tax Earnings (Loss) from Continuing Operations:

Domestic

$ 27

$ (622) $ (206)Foreign

118

72

(10)

$ 145

$ (550) $ (216)

Income Tax Expense (Benefit)

Domestic

Current

$ 1

$ (26) $ 15

Deferred

3

31

(22)

4

5

(7)Foreign

Current

30

14

(5)Deferred

(9) 3

22

21

17

17

Total

Current

31

(12) 10

Deferred

(6) 34

—

$ 25

$ 22

$ 10

The expense (benefit) for income taxes from continuing operations differs from the Federal statutory rate for thefollowing reasons:

(In millions)

2011

2010

2009

Income tax expense (benefit) at the U.S. statutory rate

$ 50

$ (193) $ (76)Antitrust legal settlements

—

(2) 1

Foreign rate differential

(26) (3) 22

State income taxes, net of federal benefit

—

1

1

Tax audit settlements

—

(13) —

Valuation allowances

(18) 307

100

U.S. tax on foreign earnings

28

(135) (1)Nondeductible reorganizational expenses

3

23

15

Nondeductible expenses, other

1

1

1

Nondeductible stock compensation

1

14

—

Depletion

(2) (5) (2)Post-petition interest expense

—

22

(22)

Goodwill

—

19

—

Income tax credits

(14) (9) (7)Taxes attributable to prior periods

2

(4) (21)

Other, net

—

(1) (1)Income tax expense

$ 25

$ 22

$ 10

Deferred taxes are recorded based on differences between the book and tax basis of assets and liabilities usingcurrently enacted tax rates and regulations. The components of the deferred tax assets and liabilities are as follows:

(In millions)

2011

2010

Deferred tax assets:

Pension and other post-retirement liabilities

$ 177

$ 180

Net operating loss carryforwards

422

443

Other accruals

44

22


Tax credit carryforwards

82

64

Accruals for environmental remediation

26

37

Inventories and other

29

25

Financial instruments

5

4

Total deferred tax assets

785

775

Valuation allowance

(695) (697)Net deferred tax assets after valuation allowance

90

78

Deferred tax liabilities:

Unremitted foreign earnings of subsidiaries

(7) (5)Property, plant and equipment

(81) (64)

Intangibles

(33) (30)Other

—

(16)

Total deferred tax liabilities

(121) (115)Net deferred tax liability after valuation allowance

$ (31) $ (37)

Net current and non-current deferred taxes from each tax jurisdiction are included in the following accounts:

(In millions)

2011

2010

Net current deferred taxes

Other current assets

$ 6

$ 9

Other current liabilities

(10) (7)Net non-current deferred taxes

Other assets

20

21

Other liabilities

(47) (60) We had valuation allowances related to U.S. operations of $652 million, $652 million and $310 million atDecember 31, 2011, 2010 and 2009, respectively. We had valuation allowances related to foreign operations of$43 million, $45 million and $70 million at December 31, 2011, 2010 and 2009, respectively. A valuationallowance has been provided for deferred tax assets where it is more likely than not these assets will expire beforewe are able to realize their benefit. Of the $2 million reduction in the total valuation allowance during 2011, $16million was recorded to the income tax benefit in our Consolidated Statements of Operations and $14 million wasrecorded to other comprehensive loss in our Consolidated Balance Sheet. Of the $317 million change in the totalvaluation allowance during 2010, $310 million was recorded to the income tax provision in our ConsolidatedStatements of Operations and $7 million was recorded to other comprehensive loss in our Consolidated BalanceSheet. This valuation allowance will be maintained until it is more likely than not that remaining deferred assetswill be realized. When this occurs, our income tax expense will be reduced by a decrease in our valuationallowance, which could have a significant impact on our future earnings. The components of our gross net operating loss (“NOL”) are as follows:

(In millions)

2011

2010

Federal NOL

$ 1,057

$ 1,050

State NOL

$ 1,237

$ 1,313

Foreign NOL

$ 82

$ 304

State and foreign NOL and credits expire 2012-2031, federal credits expire 2013-2031 and federal NOL expire2024-2031. As a result of our emergence from Chapter 11 Bankruptcy in 2010, we will be subject to annual federalNOL limitations under Internal Revenue Code (“IRC”) Section 382 in the future. Our federal NOL annuallimitation will be in the range of $59 million to $77 million starting in 2011 and beyond. At December 31, 2011,we had federal and state tax credit carryforwards of $79 million and $3 million, respectively. At December 31,2010, we had federal and state tax credit carryforwards of $61 million and $3 million, respectively. We consider undistributed earnings of certain foreign subsidiaries to be indefinitely invested in their operations. AtDecember 31, 2011, such undistributed earnings amounted to $753 million. As a result of our emergence fromChapter 11 in 2010, and the significant reduction in debt, we have determined that we will no longer need torepatriate certain undistributed earnings of our foreign subsidiaries to fund U.S. operations. Also, we have plans toinvest such undistributed earnings indefinitely. As such, the amount of foreign subsidiaries undistributed earningsconsidered to be indefinitely invested in their foreign operations has been increased. The effect of such change inthe year ended December 31, 2011 is a reduction of $3 million in U.S. deferred income tax liability on suchundistributed earnings. In 2011, this reduction in U.S. taxes on unremitted foreign earnings has been offset by anequal increase in the valuation allowance related to U.S. deferred tax assets, and, as such, had no net effect on taxexpense recognized in our Consolidated Statements of Operations.


We also have not recognized a deferred tax liability for the difference between the book basis and tax basis ofinvestments in the common stock of foreign subsidiaries. Such differences relate primarily to the unremittedearnings of both Witco’s and Great Lakes’ foreign subsidiaries prior to their mergers with us. The basis differencein subsidiaries of Witco, acquired on September 1, 1999, is approximately $237 million and the basis difference insubsidiaries of Great Lakes, acquired on July 1, 2005, is approximately $62 million. Estimating the tax liabilitythat would arise if these earnings were repatriated is not practicable at this time. During the year ended December 31, 2011, we recorded an increase to our liability for unrecognized tax benefits ofapproximately $5 million. This increase was primarily related to a foreign tax matter dating back to the 1990s. During the year ended December 31, 2010, we recorded a decrease to our liability for unrecognized tax benefits ofapproximately $35 million. This decrease was primarily related to the completion of our federal IRS examinationfor the 2006-2007 tax years. In accordance with ASC 740, we recognize interest and penalties related tounrecognized tax benefits as a component of income tax expense. The beginning and ending amount of unrecognized tax benefits reconciles as follows:

(In millions)

2011

2010

2009

Balance at January 1

$ 41

$ 76

$ 85

Gross increases for tax positions taken during current year

1

—

2

Gross increases for tax positions taken during a prior period

13

3

45

Gross decreases for tax positions taken during a prior period

(5) (10) (44)Gross decreases due to bankruptcy claims adjustment

—

—

(5)

Decreases from the expiration of the statute of limitations

(1) —

(1)Settlements / payments

(1) (29) (8)

Foreign currency impact

(2) 1

2

Balance at December 31

$ 46

$ 41

$ 76

We recognized $1 million of interest expense, $1 million of interest income and $1 million of interest expenserelated to unrecognized tax benefits within tax expense in our Consolidated Statements of Operations in 2011, 2010and 2009, respectively. We also recognized, in our Consolidated Balance Sheets at December 31, 2011 and 2010, atotal amount of $12 million and $11 million of interest, respectively, related to unrecognized tax benefits.We fileincome tax returns in the U.S., various U.S. states and certain foreign jurisdictions. We have completed our federalexamination through December 31, 2007. The tax years 2008-2010 remain open to examination. Foreign and United States jurisdictions have statutes of limitations generally ranging from 3 to 5 years. We have anumber of state, local and foreign examinations currently in process. Major foreign exams in process includeCanada, Germany and Switzerland. We believe it is reasonably possible that our unrecognized tax benefits may decrease by approximately $21 millionwithin the next year. This reduction may occur due to the statute of limitations expirations or conclusion ofexaminations by tax authorities. We further expect that the amount of unrecognized tax benefits will continue tochange as a result of ongoing operations, the outcomes of audits, and the expiration of the statute of limitations. This change is not expected to have a significant impact on our results of operations or financial condition.


CAPITAL STOCK AND EARNINGS (LOSS) PER COMMON SHARE

CAPITAL STOCK AND EARNINGS(LOSS) PER COMMON SHARE (USD $)


CAPITAL STOCK AND EARNINGS (LOSS) PER COMMON SHARE 11)

CAPITAL STOCK AND EARNINGS (LOSS) PERCOMMON SHARE

Capital Stock

New Shares

Pursuant to the Plan, all shares, including shares held in treasury, ofour common stock outstanding prior to the Effective Date werecanceled. On November 8, 2010, the NYSE approved for listing 111million shares of common shares in the capital of the reorganizedcompany authorized pursuant to the Plan, (“the New CommonStock”), as, comprising: (i) approximately 95.5 million shares of NewCommon Stock to be issued under the Plan; (ii) approximately 4.5million shares of New Common Stock reserved for future issuancesunder the Plan as disputed claims are settled; and (iii) 11 millionshares of New Common Stock reserved for issuance under our equitycompensation plans. At December 31, 2011, approximately 1.9 million reserved shares ofNew Common Stock remain to be issued to either settle disputedclaims or to holders of previously issued Chemtura stock (“Holders ofInterests”). These shares were not accounted for as of December 31,2011 and will be recognized at the date issued and measured based onthe fair value of our common stock at that time. For settlements ofliabilities, the difference between the fair value of the stock issuedcompared to the liability amount will be recognized in ourConsolidated Statements of Operations. We are authorized to issue 500 million shares of $0.01 par valuecommon stock. There were 98.3 million shares issued, of which 2.0million were held in treasury at December 31, 2011 and there were95.6 million shares issued at December 31, 2010. We are authorizedto issue 0.3 million shares of $0.01 par value preferred stock, none ofwhich are outstanding.

Old Shares

We were authorized to issue 500 million shares of $0.01 par valuecommon stock. There were 254.4 million shares issued atDecember 31, 2009, respectively, of which 11.5 million were held astreasury stock at December 31, 2009. We were authorized to issue 0.3million shares of $0.10 par value preferred stock, none of which wereoutstanding. The 254.4 million shares of common stock, the 11.5 million shares oftreasury stock and the preferred stock right were all canceled upon theEffective Date.

Treasury Stock

On October 18, 2011, we announced that our Board of Directors (the“Board”) has authorized us to repurchase up to $50 million of ourcommon stock over the next twelve months. The shares are expectedto be repurchased from time to time through open market purchases. The program, which does not obligate us to repurchase any particularamount of common stock, may be modified or suspended at any timeat the Board’s discretion. The manner, price, number and timing ofsuch repurchases, if any, will be subject to a variety of factors,including market conditions and the applicable rules and regulations


of the Securities and Exchange Commission (“SEC”). As ofDecember 31, 2011, we had purchased 2.0 million shares for $22million. Earnings (Loss) per Common Share A portion of the 100 million (which excludes shares reserved forequity compensation plans) newly authorized common shares wereimmediately distributed, and the remainder was reserved fordistribution to holders of certain disputed claims that, althoughunresolved as of the Effective Date, later become allowed. To theextent that any of the reserved shares remain undistributed uponresolution of the disputed claims, such shares will not be returned tous but rather will be distributed pro rata to claimants with allowedclaims or to holders of our previously outstanding common stock toincrease their recovery under the Plan. Therefore, pursuant to thePlan, all 100 million shares ultimately will be distributed. Accordingly, although the reserved shares are not yet issued andoutstanding, all conditions of distribution had been met for thesereserved shares as of the Effective Date, and such shares areconsidered issued and are included in our calculation of weightedaverage shares outstanding. The computation of basic earnings (loss) per common share is basedon the weighted average number of common shares outstanding. Thecomputation of diluted earnings (loss) per common share is based onthe weighted average number of common and common shareequivalents outstanding. For the years ended December 31, 2010 and2009, the computation of diluted earnings (loss) per share equals thebasic earnings (loss) per common share calculation since commonstock equivalents were antidilutive due to losses from continuingoperations. The following is a reconciliation of the shares used in the computationof earnings (loss) per share:

Year ended

(In millions)

2011

2010

2009

Weighted average sharesoutstanding - Basic

100.1

223.0

242.9

Dilutive effect of commonshare equivalents

0.2

—

—

Weighted average sharesoutstanding - Diluted

100.3

223.0

242.9

The weighted average shares outstanding for 2010 were based upon243 million of old shares outstanding for approximately 10 monthsand approximately 100 million of new shares outstanding forapproximately 2 months. Although EPS information for the yearsended December 31, 2010 and 2009, is presented, it is not comparableto the information presented for the year ended December 31, 2011,due to the changes in our capital structure on the Effective Date.


COMPREHENSIVE INCOME (LOSS)

COMPREHENSIVE INCOME(LOSS) (USD $)


COMPREHENSIVE INCOME (LOSS) 12)

COMPREHENSIVE INCOME (LOSS) An analysis of our comprehensive income (loss) for the years ended 2011, 2010 and 2009 are asfollows:

(In millions)

2011

2010

2009

Net earnings (loss)

$ 120

$ (585) $ (292)Other comprehensive income (loss), net of tax:


(35) (26) 51

Unrecognized pension and other post-retirementbenefit costs

(35) (16) (78)

Change in fair value of derivatives

—

—

1


50

(627) (318)Comprehensive income attributable to the

non-controlling interest

(1) (1) (1)Comprehensive income (loss) attributable to Chemtura

$ 49

$ (628) $ (319)

The components of accumulated other comprehensive loss (“AOCL”), net of tax at December 31,2011 and 2010 is as follows:

(In millions)

2011

2010

Foreign currency translation adjustment

$ 53

$ 88

Unrecognized pension and other post retirement benefitcosts

(399) (364)


$ (346) $ (276)


STOCK INCENTIVE PLANS

STOCK INCENTIVE PLANS(USD $)


STOCK INCENTIVE PLANS 13)

STOCK INCENTIVE PLANS We utilize various employee stock-based compensation plans. Awards under these plans are granted toeligible officers, management employees and non-employee directors. Awards may be made in the formof incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock and/orRSUs. Under the plans, we issue additional shares of common stock upon the exercise of stock optionsor the vesting of RSUs. Description of the Plans When our Plan became effective, we implemented the Chemtura Corporation 2010 Long-Term IncentivePlan (the “2010 LTIP”) which had been previously approved by the Bankruptcy Court. All stock-basedcompensation plans existing prior to the Effective Date were terminated and any unvested or unexercisedshares associated with these plans were cancelled. We recognized all previously unrecognizedcompensation expense of $1 million to reorganization items, net in 2010 upon the cancellation of theexisting plans. The 2010 LTIP provides for grants of nonqualified stock options, incentive stock options,stock appreciation rights, dividend equivalent rights, stock units, bonus stock, performance awards, shareawards, restricted stock and RSUs. The 2010 LTIP provides for the issuance of a maximum of 11 millionshares, of which 4.7 million have been granted. Non-qualified and incentive stock options may begranted under the 2010 LTIP at prices equal to the fair market value of the underlying common shares onthe date of the grant. All outstanding stock options will expire not more than ten years from the date ofthe grant. As of December 31, 2011, grants authorized under the 2010 LTIP are being administeredthrough the following award plans that are described below as the 2009 Emergence Incentive Plan (the“2009 EIP”), the 2010 Emergence Incentive Plan (the “2010 EIP”), the 2010 Emergence Award Plan (the“2010 EAP”) and the 2011 Long-Term Incentive Plan (the “2011 LTIP”), as well as other grants made tothe Board of Directors. During the year ended December 31, 2011 and 2010, we had 6.3 million and 9.8 million shares availablefor grant respectively. Total stock-based compensation expense, including amounts for RSUs and stock options, was $26million, $10 million and $3 million for the years ended December 31, 2011, 2010 and 2009, respectively. In 2011, stock-based compensation expense of $22 million and $4 million was reported in SG&A andCOGS, respectively. In 2010, stock-based compensation expense of $8 million, $1 million and $1million was reported in SG&A, COGS and reorganization items, net, respectively. In 2009, stock-basedcompensation expense was primarily reported in SG&A. In 2011, 2010 and 2009, approximately 30%, 25% and 80%, respectively, of the stock-basedcompensation expense was allocated to our operating segments. All other stock-based compensationexpense has been allocated to Corporate. Stock Options In March 2011, we granted under the EIP Settlement Plan approved by the Bankruptcy Court (“EIPSettlement Plan”) 0.8 million Non-qualified Options (“NQOs”) relating to the 2010 EIP with an exerciseprice equal to the fair market value of the underlying common stock at the date of grant. One third vestedimmediately, one third vests on March 31, 2012 and one third vests on March 31, 2013. The number ofemployees included in the 2010 EIP and the size of the award pool are based upon specific consolidatedearnings before interest, taxes, depreciation and amortization expense (“EBITDA”) levels achieved forthe twelve month period ended December 31, 2010. In March 2011, our Board of Directors approved the grant of 1.4 million NQOs under our 2011 LTIP. These options will vest ratably over a three-year period. The Committee and the Bankruptcy Court approved a similar emergence incentive plan in 2009 (the“2009 EIP”) based upon specific consolidated EBTIDA levels for the twelve month period endingMarch 31, 2010. In November 2010, we granted under the EIP Settlement Plan 0.8 million NQOsrelating to the 2009 EIP with an exercise price equal to the fair market value of the underlying commonstock on the date of grant. One third of the options vested immediately upon emergence from Chapter 11,


one third vested on March 31, 2011 and one third vests on March 31, 2012. We use the Black-Scholes option-pricing model to determine the compensation expense related to stockoptions. We have elected to recognize compensation cost for stock option awards granted equally overthe requisite service period for each separately vesting tranche, as if multiple awards were granted. Usingthis method, the weighted average fair value of stock options granted during the years endedDecember 31, 2011 and December 31, 2010 was $8.39 and $7.73, respectively. No stock options weregranted in 2009. The Black-Scholes option-pricing model requires the use of various assumptions. The following table presents the weighted average assumptions used:

Year Ended December 31,

2011

2010

2009

Dividend yield

0.0% 0.0% N/A

Expected volatility

53.8% 56.0% N/A

Risk-free interest rate

2.5% 1.3% N/A

Expected life (in years)

6

5

N/A

The weighted average expected life of six years for the 2011 grants and five years for the 2010 grantsreflects the simplified method, which defines the expected life as the average of the contractual term ofthe options and the weighted average vesting period for all option tranches. We continue to use thesimplified method because there is insufficient data to develop a justifiable expected term. Expectedvolatility for the 2011 awards of NQOs is based primarily on a combination of the historical volatilityover the five year period prior to our entering into Chapter 11 and historical volatility since emergencefrom Chapter 11. Expected volatility for the 2010 option grants is based primarily on the historicalvolatility over the five year period prior to our entering into Chapter 11. A summary of our stock option activities for 2011, 2010 and 2009 is summarized as follows:

Weighted

Average

Aggregate

Remaining

Intrinsic

Price Per Share

Shares

Contractual

Value

Range

Average

(in millions)

Life

(in millions)

Outstanding at 1/1/09

$ 1.50-21.74

$ 9.38

11.9

Lapsed

5.85-21.74

9.22

(5.5)


1.50-15.89

9.52

6.4

5.7

$ —

Cancelled

1.50-15.89

9.52

(6.4)

Granted

15.50

15.50

0.8


15.50

15.50

0.8

9.8

—

Granted

16.03

16.03

2.2

Lapsed

15.50-16.03

15.91

(0.2)


$ 15.50-16.03

$ 15.90

2.8

9.1

$ —

Exercisable at 12/31/09

$ 1.50-15.89

$ 10.05

4.4


$ 15.50

$ 15.50

0.3


$ 15.50-16.03

$ 15.68

0.7

9.0

$ —

Total remaining unrecognized compensation cost associated with unvested stock options at December 31,2011 was $9 million, which will be recognized over the weighted average period of approximately 2years. Restricted Stock Awards In March 2011, we granted under the EIP Settlement Plan, 0.4 million time-based restricted stock units(“RSU’s”) relating to the 2010 EIP with a fair market value of the quoted closing price of our stock onthat date. One third vested immediately, one third vests on March 31, 2012 and one third vests onMarch 31, 2013. In March 2011, our Board of Directors approved the grant of 0.4 million time-based RSU’s under our2011 LTIP. These RSU’s will vest ratably over a three-year period. In March 2011, we granted performance based bonus units under the 2010 EAP, which was previouslyapproved by the Bankruptcy Court and carries a performance condition requirement. This performance


award provides designated participants the opportunity to receive fully vested shares of common stockupon the achievement of specified consolidated EBITDA during the fiscal year 2011. Results ofEBITDA will be adjusted to exclude certain categories of income and expense as defined in the 2010EAP. Approximately 0.6 million shares will be awarded based upon the achievement against theperformance goal and will vest and be distributed to the participants in March 2012. In February 2011, we granted 0.1 million time-based RSU’s to non-employee directors with a fair marketvalue of the quoted closing price of our stock on that date. These RSU’s will vest ratably over a two-yearperiod. In November 2010, we granted under the EIP Settlement Plan 0.4 million time-based RSU’s relating tothe 2009 EIP with a fair market value of the quoted closing price of our stock on that date. One thirdvested immediately, one third vested on March 31, 2011 and one third vests on March 31, 2012. RSUs award activity for 2011, 2010 and 2009 is as follows:

Weighted

Average

Aggregate

Shares

Grant Date

Fair Value

(in millions)

Fair Value

(in millions)

Unvested RSU awards, January 1, 2009

2.0

$ 8.58

Canceled or expired

(0.8) 7.00

Unvested RSU awards, December 31, 2009

1.2

9.51

2

Cancelled

(1.2) 9.51

Granted

0.4

15.50

Vested

(0.1) 15.50

2


0.3

15.50

5

Cancelled

(0.1) 15.97

Granted

1.0

16.00

Vested

(0.3) 15.74

5


0.9

$ 15.91

$ 10

Total remaining unrecognized compensation expense associated with unvested RSUs at December 31,2011 was $9 million, which will be recognized over the weighted average period of approximately 2years. Tax Benefits of Stock-Based Compensation Plans ASC 718 Stock Compensation requires the benefits of tax deductions in excess of grant-date fair value bepresented in the cash flows from financing section of our Consolidated Statements of Cash Flows. Wedid not obtain any cash tax benefit associated with shares exercised during the year ended December 31,2011and 2010, as we generated tax net operating losses. Cash proceeds received from option exercisesduring 2011 was $1 million.


PENSION AND OTHER POST-RETIREMENT PLANS

PENSION AND OTHER POST-RETIREMENT PLANS(USD $)


PENSION AND OTHER POST-RETIREMENTPLANS 14)

PENSION AND OTHER POST-RETIREMENT PLANS We have several defined benefit and defined contribution pension plans coveringsubstantially all of our domestic employees and certain international employees. Benefitsunder the defined benefit plans are primarily based on the employees’ years of service andcompensation during employment. Effective January 1, 2006, we eliminated futureearnings benefits to participants of our domestic defined benefit plans for non-bargainedemployees. All active non-bargained employees would subsequently earn benefits underdefined contribution plans for all service incurred on or after January 1, 2006. Our fundingpolicy for the defined benefit plans is based on contributions at the minimum annualamounts required by law plus such amounts as we may deem appropriate. Contributions forthe defined contribution plans are determined as a percentage of the covered employee’ssalary. Plan assets consist of publicly traded securities and investments in commingledfunds administered by independent investment advisors. International employees are covered by various pension benefit arrangements, some ofwhich are considered to be defined benefit plans for financial reporting purposes. Assets ofthese plans are comprised primarily of equity investments and fixed-income investments. Benefits under these plans are primarily based upon levels of compensation. Fundingpolicies are based on legal requirements, tax considerations and local practices. We also provide health and life insurance benefits for substantially all of our activedomestic employees and certain retired and international employees. These plans aregenerally not prefunded and are paid by us as incurred. In 2009, the Bankruptcy Court authorized us to modify certain benefits under our sponsoredpost-retirement health care plans. In March 2010, certain participants of these plans werenotified of the amendments to their benefits. As a result of these amendments, werecognized a $20 million decrease in our U.S. post-retirement health care plan obligationsduring 2010, with the offset reflected within AOCL. On November 18, 2009, the Bankruptcy Court entered an order (the “2009 OPEB Order”)approving, in part, our motion (the “2009 OPEB Motion”) requesting authorization tomodify certain post-retirement welfare benefits (the “OPEB Benefits”) under ourpost-retirement welfare benefit plans (the “OPEB Plans”), including the OPEB Benefits ofcertain Uniroyal salaried retirees (the “Uniroyal Salaried Retirees”). On April 5, 2010, theBankruptcy Court entered an order denying the Uniroyal Salaried Retirees’ motion toreconsider the 2009 OPEB Order based, among other things, on the Uniroyal SalariedRetirees’ failure to file a timely objection to the 2009 OPEB Motion. On April 8, 2010, theUniroyal Salaried Retirees appealed the Bankruptcy Court’s April 5, 2010 order and onApril 14, 2010, sought a stay pending their appeal (the “Stay”) of the 2009 OPEB Order asto our right to modify the OPEB Benefits. On April 21, 2010, the Bankruptcy Court orderedus not to modify the Uniroyal Salaried Retirees’ OPEB Benefits, pending a hearing anddecision as to the Stay. After consulting with the official committees of unsecured creditorsand equity security holders, we requested that the Bankruptcy Court have a hearing todecide, as a matter of law, whether we have the right to modify the OPEB Benefits of theUniroyal Salaried Retirees as requested in the 2009 OPEB Motion. In November 2011, wereached an agreement in principle with a steering committee of the Uniroyal SalariedRetirees resolving all disputes concerning the 2009 OPEB Motion. The agreement inprinciple remains subject to documentation, execution by the parties and Bankruptcy Courtapproval upon notice to all Uniroyal Salaried Retirees, which is expected in the first quarterof 2012. In addition, on January 6, 2010, the Bankruptcy Court heard arguments regarding whetherwe had the right to modify the OPEB Benefits, as requested in the 2009 OPEB Motion,with respect to certain retirees who were represented by the United Steelworkers, or one ofits predecessor unions, while employed by us (the “USW Retirees”) and as to whom theBankruptcy Court did not rule as part of the 2009 OPEB Order. The Bankruptcy Courtdetermined that it could not, without an evidentiary hearing, rule on the 2009 OPEB Motionas it relates to the USW Retirees. After extensive negotiations with the USW Retirees, the


Debtors reached consensual resolution with respect to modification of their OPEB Benefits,eliminating the need for an evidentiary hearing. On September 17, 2010, the BankruptcyCourt approved the settlement and authorized the Debtors to modify certain benefits undertheir sponsored post-retirement health care plans. Such modifications were effectivelycommunicated to the affected participants in December 2010. As a result of thesemodifications, we recognized a $7 million decrease in our U.S. post-retirement health careplan obligations in 2010, with the offset reflected within AOCL. As previously disclosed, on December 22, 2010, the UK Pensions Regulator issued a“warning notice” to us, stating their intent to request authority to issue a “financial supportdirection” against us for the support of the benefit obligations under one of our UK pensionplans. Our UK subsidiary that is responsible for this plan has entered into definitiveagreements with the trustees of that plan over the terms of a “recovery plan” which willprovide for additional cash contributions to be made to reduce its underfunding over timeand the UK Pensions Regulator has withdrawn the “warning notice.” The agreementsprovide, among other things, for our UK subsidiary to make cash contributions of £60million (approximately $95 million) in just over a three year period starting with an initialcontribution of £30 million ($49 million) that we made in the second quarter of 2011. Theagreements also provide for the granting of both a security interest and a guarantee tosupport certain of the liabilities under this pension plan. There is also an evaluation being undertaken as to whether additional benefit obligationsexist in connection with the equalization of certain benefits under the UK Pension Plan thatoccurred in the early 1990s. Based on the results of the evaluation to date, $8 million ofexpense has been recorded in the fourth quarter of 2011, which may be subject toadjustment as further information is gathered as part of the evaluation. Upon completion ofthe evaluation and the finalization of the liability with respect to additional benefitobligations, additional cash contributions to the UK Pension Plan may be required startingin 2013 Benefit Obligations

Defined Benefit Pension Plans

Qualified

International and

Post-Retirement

Domestic Plans

Non-Qualified Plans

Health Care Plans

(In millions)

2011

2010

2011

2010

2011

2010

Change in projected benefitobligation:

Projected benefit obligation atbeginning of year

$ 934

$ 874

$ 425

$ 421

$ 104

$ 150

Service cost

1

1

3

3

1

—

Interest cost

46

48

22

22

5

7

Plan participants’contributions

—

—

—

1

—

—

Actuarial (gains) losses

50

76

(12) 29

18

(12)Benefits paid

(60) (60) (19) (20) (11) (15)

Plan amendments

—

—

—

—

—

(27)Business divestitures (a)

—

(5) —

(22) —

—

Foreign currency exchangerate

—

—

(4) (14) (1) 1

Other

—

—

5

5

—

—

Projected benefit obligation atend of year

$ 971

$ 934

$ 420

$ 425

$ 116

$ 104

Accumulated benefit

obligation at end of year

$ 970

$ 933

$ 410

$ 412

Weighted-average year-end

assumptions used todetermine benefitobligations:

Discount rate

4.60% 5.10% 4.85% 5.25% 4.26% 4.78%Rate of compensation

increase

4.00% 4.00% 3.22% 3.35% N/A

N/A

Health care cost trend rate

6.86% 7.40% (a) Business divestitures represent the sale of our PVC additives business in April 2010. A 6.86% weighted-average rate of increase in the health care cost trend rate was assumedfor the accumulated post-retirement benefit obligation as of December 31, 2011. The rate


was assumed to decrease gradually to a weighted average rate of 5.0% over approximatelythe next 6 to 9 years. Assumed health care cost trend rates have a significant effect on thepost-retirement benefit obligation reported for the health care plans. A one percentage pointincrease in assumed health care cost trend rates would increase the accumulatedpost-retirement benefit obligation by $5 million for health care benefits as of December 31,2011. A one percentage point decrease in assumed health care cost trend rates woulddecrease the accumulated post-retirement benefit obligation by $5 million for health carebenefits as of December 31, 2011. Plan Assets


Qualified

International and

Post-Retirement

Domestic Plans

Non-Qualified Plans

Health Care Plans

(In millions)

2011

2010

2011

2010

2011

2010

Change in plan assets:

Fair value of plan assetsat beginning of year

$ 700

$ 625

$ 249

$ 230

$ —

$ —

Actual return on planassets

77

86

11

25

—

—

Employer contributions

20

50

63

18

11

15


—

—

1

1

—

—

Benefits paid

(60) (60) (19) (20) (11) (15)Business divestitures

—

(1) —

—

—

—

Foreign currencyexchange ratechanges

—

—

(4) (5) —

—

Other

—

—

5

—

—

—

Fair value of plan assetsat end of year

$ 737

$ 700

$ 306

$ 249

$ —

$ —

Our pension plan assets are managed by outside investment managers. Assets aremonitored monthly to ensure they are within the range of parameters as set forth by us. Ourinvestment strategy with respect to pension assets is to achieve the expected rate of returnwithin an acceptable or appropriate level of risk. Our investment strategy is designed topromote diversification, to moderate volatility and to attempt to balance the expected returnwith risk levels. The target allocations for qualified domestic plans are 50% equitysecurities, 45% fixed income securities and 5% to all other types of investments. The targetallocations for international pension plans are 60% equity securities, 38% fixed incomesecurities and 2% to all other types of investments. The fair values of our defined benefit pension plan assets at December 31, 2011 and 2010,by asset category are as follows:

Fair Value Measurements at December 31, 2011


Qualified Domestic Plans International and Non-Qualified Plans

(In millions) Total

Quoted Pricesin Active

Markets forIdentical

Assets(Level 1)

SignificantObservable

Inputs(Level 2)

SignificantUnobservable

Inputs(Level 3) Total



Assets(Level 1)


Inputs(Level 2)


Inputs(Level 3)

Equity securities:

U.S.equities (a) $ 47 $ 47 $ — $ — $ — $ — $ — $ —

Internationalequities (a) 56 56 — — — — — —

Pooled equity (b) 242 242 — — 143 20 123 —

Preferred stock 1 — 1 — — — — —

Fixed incomesecurities:

U.S. governmentbonds (c) 172 — 172 — — — — —

Internationalgovernmentbonds (c) — — — — 58 — 58 —

U.S. corporatebonds (d) 180 — 180 — 1 — 1 —

Internationalcorporatebonds (d) 27 — 27 — — — — —

Pooled fixedincome funds(e) — — — — 97 — 97 —


Private equity &other insturments(f) — — — — 6 — — 6

Money market funds(g) 11 11 — — — — — —

Cash & cashequivalents 1 1 — — 1 1 — —

$ 737 $ 357 $ 380 $ — $ 306 $ 21 $ 279 $ 6




(In millions) Total

QuotedPrices inActive

Marketsfor

IdenticalAssets

(Level 1)


Inputs(Level 2)




Marketsfor

IdenticalAssets

(Level 1)


Inputs(Level 2)


Inputs(Level 3)

Equity securities:

U.S.equities (a) $ 80 $ 80 $ — $ — $ — $ — $ — $ —

International equities(a) 62 62 — — — — — —

Pooled equity (b) 247 247 — — 154 20 134 —


Fixed income securities: —


Internationalgovernment bonds(c) — — — — 2 — 2 —

U.S. corporate bonds(d) 152 — 152 — — — — —

Internationalcorporate bonds(d) 24 — 24 — 1 — 1 —

Pooled fixed incomefunds (e) — — — — 89 — 89 —

Private equity & otherinsturments (f) — — — — 1 — — 1

Money market funds (g) 10 10 — — — — — —

Cash & cash equivalents 2 2 — — 2 2 — —

$ 700 $ 401 $ 299 $ — $ 249 $ 22 $ 226 $ 1

(a)

U.S. and international equities are comprised of shares of common stock in varioussized U.S. and international companies from a diverse set of industries. Commonstock is valued at the closing price reported on the U.S. and international exchangeswhere the security is actively traded.

(b)

Pooled equity funds include mutual and collective funds that invest primarily inmarketable equity securities of various sized companies in a diverse set of industries invarious regions of the world. Shares of publicly traded mutual funds are valued at theclosing price reported on the U.S. and international exchanges where the underlyingsecurities are actively traded. Units of collective funds are valued at the per unit valuedetermined by the fund manager, which is based on market price of the underlyingsecurities.

(c)

U.S. and international government bonds include U.S. treasury, municipal and agencyobligations and international government debt. Such instruments are valued at quotedmarket prices for those instruments or on institutional bid valuations. The increase inthe value of the U.S. bonds is due mainly to improved performance in 2011. Theincrease in the value of the international bonds is primarily due to the $49 millioncontribution we made to one of our UK pension plans.

(d)

U.S. and international corporate bonds are from a diverse set of industries and regions. Such instruments are valued using similar securities in active markets and observabledata or broker or dealer quotations.

(e)

Pooled fixed income funds are fixed income funds that invest primarily in corporateand government bonds. Such instruments are valued using similar securities in activemarkets and observable data or broker or dealer quotations.

(f)

Private equity and other instruments include instruments for which there are significantunobservable inputs. The increase in the fair value of these assets of $5 million during2011 primarily related to the addition of annuity contracts related to two of ourinternational plans.

(g)

Money market funds primarily include high-grade money market instruments withshort maturities (less than 90 days).

Funded Status


The funded status at the end of the year, and the related amounts recognized on thestatement of financial condition, are as follows:


QualifiedDomestic Plans

International andNon-Qualified Plans

Post-RetirementHealth Care Plans

(In millions)

2011

2010

2011

2010

2011

2010

Funded status, end ofyear:

Fair value of plan assets

$ 737

$ 700

$ 306

$ 249

$ —

$ —

Benefit obligations

971

934

420

425

116

104

Net amount recognized

$ (234) $ (234) $ (114) $ (176) $ (116) $ (104) Amounts recognized in

the ConsolidatedBalance Sheets at theend of year consist of:

Noncurrent assets

$ —

—

12

1

—

—

Current liability

—

—

(6) (7) (10) (10)Noncurrent liability

(234) (234) (120) (170) (106) (94)

Liabilities subject tocompromise

—

—

—

—

—

—

Liabilities ofdiscontinuedoperations

—

—

—

—

—

—



accumulated othercomprehensive lossconsist of:

Net actuarial loss/(gain)

$ 399

$ 382

$ 73

$ 81

$ 51

$ 35

Prior servicecost/(credit)

1

1

1

—

(58) (64)

$ 400

$ 383

$ 74

$ 81

$ (7) $ (29)

The estimated amounts that will be amortized from AOCL into net periodic benefit cost(credit) in 2012 are as follows:

(In millions)

QualifiedDomestic

Plans

Internationaland Non-Qualified

Plans

Post-RetirementHealth Care

Plans

Actuarial loss

$ 15

$ 2

$ 3

Prior service credit

—

—

(5)Total amorization cost (credit)

$ 15

$ 2

$ (2)

As of December 31, 2011 and 2010, the current liabilities positions are included in accruedexpenses in our Consolidated Balance Sheets and the non-current liabilities positions areshown as pension and post-retirement health care liabilities. Our funding assumptions for our domestic pension plans assume no significant change withregards to demographics, legislation, plan provisions, or actuarial assumptions or methodsto determine the estimated funding requirements. We contributed approximately $94million and $83 million to our pension and post retirement plans in 2011 and 2010,respectively. The 2011 contribution includes $49 million for one of our UK pension plansas required by the “recovery plan” agreed to with the trustees of that plan. The 2010contribution included a $50 million voluntary contribution to our domestic qualified plans,which resulted from an agreement entered into with the Pension Benefit GuarantyCorporation related to our emergence from bankruptcy. There were no discretionarycontributions to our domestic qualified plan in 2011 or to our international plans during2011 and 2010.


The projected benefit obligation and fair value of plan assets for pension andpost-retirement plans with a projected benefit obligation in excess of plan assets atDecember 31, 2011 and 2010 were as follows:

(In millions)

2011

2010

Projected benefit obligation in excess of plan assets at endof year:

Projected benefit obligation

$ 1,305

$ 1,452


829

937

The projected benefit obligation, accumulated benefit obligation and fair value of planassets for pension and post-retirement plans with an accumulated benefit obligation inexcess of plan assets at December 31, 2011 and 2010 were as follows:

(In millions)

2011

2010

Accumulated benefit obligation in excess of plan assets at end ofyear:


$ 1,133

$ 1,347

Accumulated benefit obligation

1,130

1,334


778

936

Expected Cash Flows Information about the expected cash flows for the domestic qualified defined benefit plans,international and non-qualified defined benefit plans and post-retirement health care plansare as follows:


(in millions)

QualifiedDomestic

Plans

Internationaland

Non-QualifiedPlans


Plans

Expected Employer Contributions:

2012

$ 40

$ 34

$ 10

Expected Benefit Payments (a):

2012

61

19

10

2013

61

19

9

2014

61

20

9

2015

61

20

9

2016

62

20

9

2017-2021

310

113

38

(a)

The expected benefit payments are based on the same assumptions used to measure ourbenefit obligation at the end of the year and include benefits attributable to estimatedfuture employee service.

Net Periodic Cost





(In millions)

2011

2010

2009

2011

2010

2009

2011

2010

2009

Components of netperiodic benefit cost(credit):

Service cost $ 1

$ 1

$ —

$ 3

$ 3

$ 3

$ 1

$ —

$ —

Interest cost

46

48

50

22

22

22

5

7

9

Expected return on planassets

(56) (55) (56) (18) (18) (18) —

—

—


—

—

—

—

—

—

(6) (5) (6)

Recognized actuariallosses

12

7

5

2

1

1

2

3

2

Curtailment gain

—

—

—

—

—

—

—

—

—


recognizedSettlement loss recognized

—

—

—

—

—

—

—

—

—

Other

—

—

—

—

—

—

—

—

1

Net periodic benefit cost(credit)

$ 3

$ 1

$ (1) $ 9

$ 8

$ 8

$ 2

$ 5

$ 6

2011

2010

2009

2011

2010

2009

2011

2010

2009

Weighted-averageassumptions used todetermine net cost:

Discount rate

5.10% 5.70% 6.00% 5.14% 5.66% 5.90% 5.14% 5.49% 6.04%Expected return on planassets

7.75% 8.00% 7.75% 6.80% 7.60% 7.50%

Rate of compensationincrease

4.00% 4.00% 4.00% 3.34% 2.96% 3.60%

The expected return on pension plan assets is based on our investment strategy, historicalexperience, and our expectations for long term rates of return. We determine the long-termrate of return assumptions for the domestic and international pension plans based on itsinvestment allocation between various asset classes. The expected rate of return on planassets is derived by applying the expected returns on various asset classes to our target assetallocation. The expected returns are based on the expected performance of the various assetclasses and are further supported by historical investment returns. We utilized a weightedaverage expected long-term rate of 7.75% on all domestic assets and a weighted averagerate of 6.80% for the international plan assets for the year ended December 31, 2011. Assumed health care cost trend rates have a significant effect on the service and interestcost components reported for the health care plans. A one percentage point increase inassumed health care cost trend rates increases the service and interest cost components ofnet periodic post-retirement health care benefit cost by less than $1 million for 2011. A onepercentage point decrease in assumed health care cost trend rates decreases the service andinterest cost components of net periodic post-retirement health care benefit cost by less than$1 million for 2011. Our cost of the defined contribution plans was $13 million for 2011, $12 million for 2010and $13 million for 2009.


DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES(USD $)


DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES 15)

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES Our activities expose our earnings, cash flows and financial condition to avariety of market risks, including the effects of changes in foreign currencyexchange rates, interest rates and energy prices. We maintain a riskmanagement strategy that may utilize derivative instruments to mitigate riskagainst foreign currency movements and to manage energy price volatility. In accordance with ASC Topic 815, Derivatives and Hedging (“ASC 815”),we recognize in AOCL any changes in the fair value of all derivativesdesignated as cash flow hedging instruments. We do not enter into derivativeinstruments for trading or speculative purposes. We have exposure to changes in foreign currency exchange rates resultingfrom transactions entered into by us and our foreign subsidiaries incurrencies other than their functional currency (primarily trade payables andreceivables). We are also exposed to currency risk on intercompanytransactions (including intercompany loans). We manage these currencyrisks on a consolidated basis, which allows us to net our exposure. Prior toour Chapter 11 filing, these contracts were generally recognized in otherincome (expense), net to offset the impact of valuing recorded foreigncurrency trade payables, receivables and intercompany transactions. We hadnot designated these derivatives as hedges, although we believe theseinstruments reduced our exposure to foreign currency risk. In 2009, werecognized a loss of $26 million in other expense, net associated with theforeign exchange contracts. However, as a result of the changes in ourfinancial condition and our financing agreements, we were unable tocontinue our prior practice during the course of our Chapter 11 proceedings. The financing agreements that we entered into in connection with ouremergence from Chapter 11 permit us to purchase contracts and derivativesto manage foreign exchange and other financial risks subject to certainlimitations. The net effect of the realized and unrealized gains and losses recognized inother expense, net on the foreign exchange derivatives and the underlyingtransactions resulted in a pre-tax loss of $2 million, $11 million and $22million in 2011, 2010 and 2009, respectively. No derivatives wereoutstanding as of December 31, 2011, 2010 and 2009.


FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS(USD $)


FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS 16)

FINANCIAL INSTRUMENTS AND FAIR VALUEMEASUREMENTS

Financial Instruments The carrying amounts for cash and cash equivalents, accountsreceivable, other current assets, accounts payable and other currentliabilities, excluding liabilities subject to compromise, approximatetheir fair value because of the short-term maturities of theseinstruments. The fair value of debt is based primarily on quotedmarket values. The following table presents the carrying amounts and estimated fairvalues of material financial instruments used by us in the normalcourse of our business:

2011

2010

(In millions)

CarryingAmount

FairValue

CarryingAmount

FairValue

Total debt

$ 753

$ 777

$ 751

$ 786

Fair Value Measurements We apply provisions of ASC 820 with respect to our financial assetsand liabilities that are measured at fair value within the financialstatements on a recurring basis. ASC 820 specifies a hierarchy ofvaluation techniques based on whether the inputs to those valuationtechniques are observable or unobservable. Observable inputs reflectmarket data obtained from independent sources, while unobservableinputs reflect our market assumptions. The fair value hierarchyspecified by ASC 820 is as follows:

•

Level 1 – Quoted prices in active markets for identicalassets and liabilities.

•

Level 2 – Quoted prices for similar assets and liabilities inactive markets, quoted prices for identical or similar assetsand liabilities in markets that are not active or other inputsthat are observable or can be corroborated by observablemarket date.

•

Level 3 – Unobservable inputs that are supported by little orno market activity and that are significant to the fair valueof the assets and liabilities.

Level 1 fair value measurements in 2011 and 2010 included thedeferral of compensation, our match and investment earnings relatedto the Supplemental Savings Plan. These securities are considered ourgeneral assets until distributed to the participant and are included inother assets in our Consolidated Balance Sheets. A correspondingliability is included in other liabilities at December 31, 2011 and 2010in our Consolidated Balance Sheets. Quoted market prices were usedto determine fair values of these investments (Level 1) which are heldin a trust with a third-party brokerage firm. The fair value of the assetand corresponding liability was $1 million at December 31, 2011 and2010. For the year ended December 31, 2011, there were no transfersinto or out of Level 1 and Level 2.


Level 3 fair value measurements are utilized in our impairmentreviews of Goodwill (see Note 7 – Goodwill and Intangible Assets). Fair value measurements of benefit plan assets included in net benefitplan liabilities are discussed in Note 14 – Pension and OtherPost-Retirement Plans.


ASSET RETIREMENT OBLIGATIONS

ASSET RETIREMENT OBLIGATIONS(USD $)


ASSET RETIREMENT OBLIGATIONS 17)

ASSET RETIREMENT OBLIGATIONS We apply the provisions of ASC Topic 410, Asset Retirements and Environmental Obligations(“ASC 410”), which require companies to make estimates regarding future events in order torecord a liability for asset retirement obligations in the period in which a legal obligation iscreated. Such liabilities are recorded at fair value, with an offsetting increase to the carryingvalue of the related long-lived assets. The fair value is estimated by discounting projected cashflows over the estimated life of the assets using our credit adjusted risk-free rate applicable at thetime the obligation is initially recorded. In future periods, the liability is accreted to its presentvalue and the capitalized cost is depreciated over the useful life of the related asset. We alsoadjust the liability for changes resulting from revisions to the timing or the amount of the originalestimate. Upon retirement of the long-lived asset, we either settle the obligation for its recordedamount or incur a gain or loss. Our asset retirement obligations include estimates for all asset retirement obligations identifiedfor our worldwide facilities. Our asset retirement obligations are primarily the result of legalobligations for the removal of leasehold improvements and restoration of premises to theiroriginal condition upon termination of leases at approximately 23 facilities; legal obligations toclose approximately 89 brine supply, brine disposal, waste disposal, and hazardous wasteinjection wells and the related pipelines at the end of their useful lives; and decommissioning anddecontamination obligations that are legally required to be fulfilled upon closure ofapproximately 33 of our manufacturing facilities. The following is a summary of the change in the carrying amount of the asset retirementobligations during 2011 and 2010, the net book value of assets related to the asset retirementobligations at December 31, 2011 and 2010 and the related depreciation expense recorded in2011 and 2010.

(In millions)

2011

2010

Asset retirement obligation balance at beginning of year

$ 23

$ 26

Revisions (a)

1

(3)Accretion expense – cost of goods sold (b)

—

2

Accretion expense – loss from discontinued operations (c)

—

(1)Payments

(3) (1)

Asset retirement obligation balance at end of year

$ 21

$ 23

Net book value of asset retirement obligation assets at end of year

$ 1

$ 1

Depreciation expense

$ —

$ —

(a)

The addition in 2011 primarily relates to a reclassification of asset retirement costs that werepreviously recorded in another accrued expense account. The 2010 reversal includes thesale of our natural sodium sulfonates and oxidized petrolatum product lines in July 2010.

(b)

The decrease in accretion expense in 2011 as compared to 2010 is primarily due to therevision of costs related to various reorganization initiatives implemented in 2009 and2010, which resulted in the acceleration of certain costs in 2010 and the reduction of certaincosts in 2011.

(c)

Includes the reversal of asset retirement obligations related to the sale of our PVC additivesbusiness in April 2010.

At December 31, 2011, $6 million of the asset retirement obligation balance was included inaccrued expenses and $15 million was included in other liabilities in our Consolidated BalanceSheet. At December 31, 2010, $11 million of the asset retirement obligation balance wasincluded in accrued expenses, $12 million was included in other liabilities in our ConsolidatedBalance Sheet.


EMERGENCE FROM CHAPTER 11

EMERGENCE FROM CHAPTER 11(USD $)


EMERGENCE FROM CHAPTER 11 18)

EMERGENCE FROM CHAPTER 11 The onset of the global recession in the fourth quarter of 2008 caused a rapid deterioration in ouroperating performance, reductions in availability under our credit facilities and reduced ourliquidity. The crisis in the credit markets that had deepened in the late summer of 2008compounded the liquidity challenges we faced. Under normal market conditions, we believed wewould have been able to secure additional liquidity and refinance our $370 million notes that weredue to mature on July 15, 2009 (the “2009 Notes”) in the debt capital markets. In the first quarterof 2009, having carefully explored and exhausted all possibilities to gain near-term access toliquidity, we determined that DIP financing presented the best available alternative for us to meetour immediate and ongoing liquidity needs and preserve the value of our business. As a result,having obtained the commitment of the $400 million DIP Credit Facility, Chemtura and 26 of ourU.S. affiliates (collectively the “U.S. Debtors”, or the “Debtors” when used in relation to mattersbefore August 8, 2010) filed Chapter 11 on the Petition Date in the Bankruptcy Court. On August 8, 2010, our Canadian subsidiary, Chemtura Canada Co/Cie (“Chemtura Canada”), fileda voluntary petition for relief under Chapter 11. On August 11, 2010, Chemtura Canadacommenced ancillary recognition proceedings under Part IV of the Companies’ CreditorsArrangement Act (the “CCAA”) in the Ontario Superior Court of Justice (the “Canadian Court”and such proceedings, the “Canadian Case”). The U.S. Debtors along with Chemtura Canada afterit filed for Chapter 11 (collectively the “Debtors”) requested the Bankruptcy Court to enter an orderjointly administering Chemtura Canada’s Chapter 11 case with the previously filed Chapter 11cases and appoint Chemtura Canada as the “foreign representative” for the purposes of theCanadian Case. Such orders were granted on August 9, 2010. On August 11, 2010, the CanadianCourt entered an order recognizing the Chapter 11 cases as a “foreign proceedings” under theCCAA. On June 17, 2010, the U.S. Debtors filed the initial version of our plan of reorganization and relateddisclosure statement (as amended, modified or supplemented, the “Plan” and “DisclosureStatement”) with the Bankruptcy Court and on July 9, 2010, July 20, 2010, August 5, 2010,September 14, 2010 and September 20, 2010, the Debtors filed revised versions of the Plan andDisclosure Statement with the Bankruptcy Court. The final version of the Plan was filed with theBankruptcy Court on October 29, 2010. The Plan organized claims against the Debtors into classesaccording to their relative priority and certain other criteria. For each class, the Plan described(a) the type of claim or interest, (b) the recovery available to the holders of claims or interests inthat class under the Plan, (c) whether the class was “impaired” under the Plan, meaning that eachholder would receive less than the full value on account of its claim or interest or that the rights ofholders under law will be altered in some way (such as receiving stock instead of holding a claim)and (d) the form of consideration (e.g., cash, stock or a combination thereof), if any, that suchholders were to receive on account of their respective claims or interests. Distributions to creditors under the Plan generally included a combination of New Common Stock,cash, reinstatement or such other treatment as agreed between the Debtors and the applicablecreditor. Certain creditors were eligible to elect, when voting on the Plan, to receive their recoveryin the form of the maximum available amount of cash or the maximum available amount of NewCommon Stock. Holders of Interests, based upon their vote as a class to reject the Plan, receivedtheir pro rata share of value available for distribution, after all allowed claims have been paid in fulland certain disputed claims reserves required by the Plan have been established in accordance withthe terms of the Plan. The Plan provides that Holders of Interests may also be entitled tosupplemental distributions if amounts reserved on account of disputed claims exceed the value ofclaims that are ultimately allowed and two such supplemental distributions have been made to date. On October 21, 2010, the Bankruptcy Court entered a bench decision approving confirmation of theDebtors’ Plan and on November 3, 2010, the Bankruptcy Court entered an order confirming thePlan. On the Effective Date, the Debtors substantially consummated their reorganization through aseries of transactions contemplated by the Plan and the Plan became effective. Pursuant to thePlan, on the Effective Date: (i) our common stock, par value $0.01 per share, outstanding prior toeffectiveness of the Plan was cancelled and all of our outstanding publicly registered pre-petitionindebtedness was settled, and (ii) shares of our New Common Stock, par value $0.01 per share,were issued for distribution in accordance with the Plan. On November 8, 2010, the NYSE


approved for listing a total of 111 million shares of New Common Stock, as authorized under thePlan, comprising: (i) approximately 95.5 million shares of New Common Stock to be issued underthe Plan; (ii) approximately 4.5 million shares of New Common Stock reserved for future issuancesunder the Plan; and (iii) 11 million shares of New Common Stock reserved for issuance under ourequity plans. Our New Common Stock started trading on the NYSE under the ticker symbol“CHMT” on November 11, 2010. The Plan provided for payment in full including interest in certain circumstances on all allowedclaims. Holders of Interests received a pro-rata share of New Common Stock in accordance withthe Plan together with the potential right to receive supplemental distributions in certaincircumstances. At the Effective Date, we determined that we did not meet the requirements under ASCSection 852-10-45 to adopt fresh start accounting because the reorganized value of our assetsexceeded the carrying value of our liabilities. Fresh start accounting would have required us torecord assets and liabilities at fair value as of the Effective Date. Pursuant to the Plan, and by orders of the Bankruptcy Court dated September 24, 2010, October 19,2010 and October 29, 2010, the Debtors established the Diacetyl Reserve, the EnvironmentalReserve and the Disputed Claims Reserve on account of disputed claims as of the Effective Date. All claims as to which an objection was filed and ultimately allowed by the Bankruptcy Courtregarding Diacetyl and environmental matters have been satisfied through the Diacetyl andEnvironmental reserves. To the extent remaining claims are allowed by the Bankruptcy Court,these claims will be paid from the Disputed Claims Reserve. These reserves have been fundedthrough cash (which is reflected as restricted cash in our Consolidated Balance Sheet) and shares ofcommon stock reserved for future issuance. Accruals for expected allowed claims relating to thesedisputed claims are recorded when the settlement amount is probable and reasonably estimablewhich may differ from the total of the approved reserve amount. Pursuant to the Plan and the October 29, 2010 order approving the Disputed Claims Reserve,Holders of Interests in Chemtura may also be entitled to supplemental distributions (in the form ofcash and/or stock) if amounts reserved on account of disputed claims exceed the value of claimsthat are ultimately allowed. These Holders of Interests will be entitled to a portion of any excessvalue held in specified segregated reserves within the Disputed Claims Reserve following theresolution of the claims for which the segregated reserves are held. These Holders of Interests willalso be entitled to all excess value held in the Disputed Claims Reserve after all disputed claims areeither disallowed or allowed and satisfied from the Disputed Claims Reserve. If authorized by theBankruptcy Court, Holders of Interests may also be entitled to interim distributions from theDisputed Claims Reserve if the Bankruptcy Court determines that the amount held in the reservemay be reduced before all disputed claims have been allowed or disallowed. In March 2011 andAugust 2011, we made supplemental distributions to Holders of Interests in accordance with thePlan and as authorized by the Bankruptcy Court. On January 5, 2012, we filed a motion with theBankruptcy Court seeking authority to make a third supplemental distribution to Holders ofInterests, which was granted by the Bankruptcy Court on January 26, 2012. The supplementaldistribution is scheduled to begin on or before March 2, 2012 and is currently expected to beapproximately $15 million payable in cash and stock. To the extent we are able to resolveadditional remaining disputed claims before that date, we may seek Court approval to modify thedate of the supplemental distribution, further increase the supplemental distribution and/or combinethe supplemental distribution with the final distribution to Holders of Interests. As of December 31, 2011, as a result of distributions pursuant to the Plan, there were no remainingundisbursed amount in the Environmental Reserve, the Diacetyl Reserve or the segregated reserves,and the remaining undisbursed amount in the Disputed Claims Reserve was $29 million. Anyremaining Disputed Claims, to the extent they are ultimately allowed by the Bankruptcy Court, willbe satisfied (to the extent allowed and not covered by insurance) from the Disputed ClaimsReserve. A summary of the above described approved distributable claims reserves is as follows:

(In millions)

DiacetylReserve

EnvironmentalReserve

DisputedClaimsReserve

SegregatedReserves

TotalReserves

Distributable amount approved atEffective Date

$ 7

$ 38

$ 42

$ 30

$ 117

Settlements

(7) (9) (2) (4) (22)Distributable balance at

December 31, 2010

—

29

40

26

95


Settlements

—

(27) (27) (2) (56)Supplemental distributions

—

—

(5) (12) (17)

Reclass to disputed claimsreserve

—

(2) 14

(12) —

Insurance Reimbursements

—

—

7

—

7

Distributable balance atDecember 31, 2011

$ —

$ —

$ 29

$ —

$ 29

The reorganization items, net recorded in our Consolidated Statements of Operations relating to ourChapter 11 cases compromise the following:

(In millions)

2011

2010

2009

Professional fees and other

$ 16

$ 117

60

Write-off of debt discounts and premiums (a)

—

(2) 24

Write-off of debt issuance costs (a)

—

—

7

Write-off of deferred charges related to termination ofU.S. accounts receivable facility

—

—

4

Rejections or terminations of lease and other contractagreements (b)

—

2

9

Severance - closure of manufacturing plants andwarehouses (b)

1

3

1

Claim settlements, net (c)

2

183

(8)Total reorganization items, net

$ 19

$ 303

97

(a)

During 2009, the carrying value of pre-petition debt was adjusted to its respective face valueas this represented the expected allowable claim in the Chapter 11 cases. As a result,unamortized debt issuance costs, discounts and premiums were charged to reorganizationitems, net in our Consolidated Statements of Operations. During 2010, further adjustmentswere made based on the allowed claim.

(b)

Represents charges for cost savings initiatives for which Bankruptcy Court approval has beenobtained or requested. For additional information see Note 3 – Restructuring and AssetImpairment Activities.

(c)

Represents the difference between the settlement amount of certain pre-petition obligations(which for obligations settled in New Common Stock is based on the fair value of our stock atthe issuance date) and the corresponding carrying value of the recorded liabilities.

On June 10, 2011, we filed a closing report in Chemtura Canada’s Chapter 11 case and a motionseeking a final decree closing that Chapter 11 case. On June 23, 2011, the Bankruptcy Courtgranted our motion and entered a final decree closing the Chapter 11 case of Chemtura Canada. On December 1, 2011, we filed a motion requesting entry of an order granting a final decreeclosing the Chapter 11 cases for the following debtors (the “Fully Administered Debtors”):




• Aqua Clear Industries, LLC


• Monochem, Inc.

• ASEPSIS, Inc.



• ASCK, Inc.



• BioLab Company Store, LLC • GT Seed Treatment, Inc.


• Bio lab Franchise Company,LLC




• ISCI, Inc.



On December 15, 2011, the Bankruptcy Court entered an order granting a final decree closing theFully Administered Debtors’ Chapter 11 cases.


On February 7, 2012, we filed a motion requesting entry of an order granting a final decree closingthe Chapter 11 cases for Bio-Lab, Inc. and GLCC Laurel, LLC.


LEGAL PROCEEDINGS AND CONTINGENCIES

LEGAL PROCEEDINGS AND CONTINGENCIES(USD $)


LEGAL PROCEEDINGS AND CONTINGENCIES 19)

LEGAL PROCEEDINGS AND CONTINGENCIES We are involved in claims, litigation, administrative proceedings and investigations ofvarious types in a number of jurisdictions. A number of such matters involve, or mayinvolve, claims for a material amount of damages and relate to or allege environmentalliabilities, including clean-up costs associated with hazardous waste disposal sites,natural resource damages, property damage and personal injury. As a result of the Chapter 11 cases, substantially all pre-petition litigation and claimsagainst Chemtura and our subsidiaries that were Debtors in the Chapter 11 cases havebeen discharged and permanently enjoined from further prosecution and are describedunder the subheading “Prepetition Litigation and Claims Discharged under the Plan”below. Claims and legal actions asserted against non-Debtors or relating to events occurringafter the Effective Date, certain regulatory and administrative proceedings and certaincontractual and other claims assumed with the authorization of the Bankruptcy Court,were not discharged in the Chapter 11 cases and are described under the subheading“Litigation and Claims Not Discharged Under the Plan” below. Prepetition Litigation and Claims Discharged Under the Plan


On March 18, 2009, the Debtors filed voluntary petitions in the Bankruptcy Courtseeking relief under Chapter 11. The Debtors’ Chapter 11 cases have been assigned tothe Honorable Robert E. Gerber and are being jointly administered as CaseNo. 09-11233. The Debtors continued to operate their business as debtors in possessionunder the jurisdiction of the Bankruptcy Court until their emergence from Chapter 11on November 10, 2010. Pursuant to the Plan, and by orders of the Bankruptcy Court dated September 24, 2010,October 19, 2010 and October 29, 2010, the Debtors established the Diacetyl Reserve,the Environmental Reserve and the Disputed Claims Reserve, each as defined in thePlan, on account of claims that were not yet allowed in the Chapter 11 cases as of theEffective Date, including proofs of claim asserted against the Debtors that were subjectto objection as of the Effective Date (the “Disputed Claims”). The Diacetyl Reservewas approved by the Bankruptcy Court in the amount of $7 million, comprised ofseparate segregated reserves, and has since been reduced as settlement agreements havebeen approved by the Bankruptcy Court. The Environmental Reserve was approved bythe Bankruptcy Court in the amount of $38 million, a portion of which was furthersegregated into certain separate reserves established to account for settlements that werepending Bankruptcy Court approval, and has since been reduced as settlementagreements have been approved by the Bankruptcy Court. The Disputed ClaimsReserve was approved by the Bankruptcy Court in the amount of $42 million, plusadditional segregated individual reserves for certain creditors’ claims in the aggregateamount of approximately $30 million, all of which have been reduced as settlementagreements have been approved by the Bankruptcy Court. On June 24, 2011, we resolved the last disputed Environmental Claim. As a result,under the Plan, the amounts remaining in the Environmental Reserve were transferredto the Disputed Claims Reserve. Any remaining Disputed Claims, to the extent they areultimately allowed by the Bankruptcy Court, will be satisfied (to the extent allowed andnot covered by insurance) from the Disputed Claims Reserve, and holders of theDisputed Claims are permanently enjoined under the Plan from pursuing their claimsagainst us. As of December 31, 2011, as a result of distributions pursuant to the Plan,there were no remaining undisbursed amount in the Environmental Reserve, theDiacetyl Reserve or the segregated reserves, and the remaining undisbursed amount inthe Disputed Claims Reserve was $29 million.


As we complete the process of evaluating and/or resolving the Disputed Claims,appropriate adjustments to our Consolidated Financial Statements will be made. Adjustments may also result from actions of the Bankruptcy Court, settlementnegotiations, and other events. For additional information, see Note 18 – Emergencefrom Chapter 11 in our Notes to Consolidated Financial Statements.

Certain Prepetition Litigation Against the Debtors

Tricor: Our litigation with Tricor Refining, LLC (“Tricor”) pending in the CaliforniaSuperior Court, Kern County, was settled during the Chapter 11 cases pursuant to astipulation by which Tricor agreed to convey certain property and assets to us and, inreturn, Tricor was granted a general unsecured claim in the Chapter 11 cases in theamount of approximately $2 million. Conyers: Three putative class action lawsuits pending in the Superior Court ofRockdale County, Georgia pertaining to the fire at our Conyers, Georgia warehouse onMay 25, 2004 captioned James and Carla Brown v. Bio-Lab, Inc., et al., Don Chapmanet al. v. Bio-Lab, Inc., et al. and Deborah Davis, et al. v. Bio-Lab, Inc., et al., oneputative federal class action lawsuit captioned Bill Martin, et al. v. Bio-Lab, Inc., et al.and several remaining individual lawsuits, including the lawsuit captioned Billy R.Brown, et al. v. Bio-Lab, Inc., et al., pending in the Superior Court of Rockdale County,Georgia will be resolved under a Class Action Settlement Agreement (the “SettlementAgreement”) entered into on August 25, 2010. The Settlement Agreement provides fora settlement fund of $7 million to be paid out to settlement class members on aclaim-by-claim basis pursuant to certain procedures and a distribution formula set forthin the Settlement Agreement. Those persons who have opted out of the settlement classand have filed a proof of claim during the Chapter 11 cases may continue to pursuesuch claim in the Bankruptcy Court. We believe those persons who have opted out ofthe Settlement Class and have not filed a proof of claim during the Chapter 11 caseswill be barred by the Plan and discharge injunction from pursuing their claims againstus. By order dated September 10, 2010, the Bankruptcy Court approved the Debtors’entry into the Class Action Settlement Agreement, and preliminarily approved the classaction settlement. In January 2011, the Bankruptcy Court entered a final orderapproving the Settlement Agreement as fair, adequate and reasonable. Diacetyl: Beginning before 2001, food industry factory workers began alleging thatexposure to diacetyl, a butter flavoring ingredient widely used in the food industrybetween 1982 and 2005, caused respiratory illness. During the Chapter 11 cases, approximately 373 non-duplicative proofs of claiminvolving diacetyl were filed against us, approximately 366 of which were filed byindividual claimants, and approximately 7 of which were filed by corporate re-sellers orusers of diacetyl seeking contribution or indemnity (the “Corporate Claimants”). Thediacetyl claims included the claims of plaintiffs in 23 diacetyl lawsuits that were thenpending against us and/or Chemtura Canada, our wholly owned subsidiary. We have entered into, and obtained Bankruptcy Court approval of, settlementagreements to resolve all of the diacetyl claims filed by the individual claimants and theCorporate Claimants, except for those claims that have been expunged by order of theBankruptcy Court. We have also entered into and obtained Bankruptcy Court approvalof a settlement agreement with a key insurance carrier, AIG, with respect to the diacetylclaims, which provides for payment of 50% of the diacetyl settlements entered intoduring the Chapter 11 cases. Claims subject to approved settlements have been treatedas allowed claims and satisfied pursuant to the Plan.

Australian Civil Antitrust Matters

On September 27, 2007, Chemtura and one of our subsidiaries who did not file aChapter 11 case, as well as Bayer AG and Bayer Australia Ltd., were sued by WrightRubber Products Pty Ltd. (“Wright”) in the Federal Court of Australia for alleged pricefixing violations with respect to the sale of rubber chemicals in Australia. OnNovember 21, 2008, Wright filed an amended Statement of Claim and further amendedits Statement of Claim on August 2, 2010. On May 25, 2011, Chemtura and oursubsidiary entered into a settlement agreement to resolve the litigation for an agreedallowed unsecured claim of approximately $1 million which was paid from theDisputed Claim Reserve pursuant to the Plan.


Appeals Relating to the Chapter 11 Cases During the Chapter 11 cases, a creditor, Pentair Water Pool & Spa, Inc. (“Pentair”),appealed three orders of the Bankruptcy Court: (i) the Bankruptcy Court’s orderestablishing the Disputed Claims Reserve; (ii) an order partially disallowing the claimsasserted by Pentair; and (iii) an order overruling the late-filed objection of Kurt andAmy Stetler to the Debtors’ motion seeking the establishment of the Disputed ClaimsReserve. On March 24, 2011, we entered into a term sheet for a cost-sharing agreementwith Pentair that provides, among other things, for the sharing of costs in relation to asettlement of the claims of Kurt and Amy Stetler and the dismissal of the appeals uponour payment of the agreed share of the settlement costs. The parties subsequentlynegotiated definitive documentation of the agreements and, on June 23, 2011, we filed amotion with the Bankruptcy Court to approve the cost-sharing agreement and thesettlement of the claims of Kurt and Amy Stetler. The Bankruptcy Court approved thesettlement on July 14, 2011. The District Court for the Southern District of New Yorkdismissed the appeals on December 1, 2011. Litigation and Claims Not Discharged Under the Plan Chemtura Manufacturing UK Limited (“CMUK”) is the principal employer of the GreatLakes UK Limited Pension Plan (the “UK Pension Plan”), an occupational pensionscheme that was established in the UK to provide pensions and other benefits for itsemployees. Under the UK Pension Plan, certain employees and former employees areentitled to pension benefits, most of which are defined benefits in nature, based onpensionable salary. The UK Pension Plan has approximately 580 pensioners and 690members entitled to deferred benefits under the defined benefit section. The estimatedfunding deficit of the UK Pension Plan as of December 31, 2008, as measured inaccordance with Section 75 of the Pension Act of 1995 (UK), was approximately £95million. The UK Pension Trustees filed 27 contingent, unliquidated Proofs of Claim againsteach of the Debtors (other than Chemtura Canada) in the Chapter 11 cases. Byagreement with the UK Pension Trustees, the proofs of claim were disallowed on thecondition that no party may later assert that the Chapter 11 cases operate as a bar to theUK Pension Trustees asserting claims against any of the Debtors in an appropriatenon-bankruptcy forum. Also as previously disclosed, CMUK had been engaged withthe UK Pension Trustees over the terms of a “recovery plan” to reduce the underfundeddeficit in the UK Pension Plan and the applicable regulatory authority, in this case theUK Pensions Regulator (the “Regulator”), had issued a “warning notice” to CMUK andfive other Chemtura affiliates, including Chemtura, stating their intent to requestauthority to issue a “financial support direction” against each of them for the support ofthe benefit obligations under the UK Pension Plan, potentially up to the amount of thefunding deficit. Definitive agreements have now been entered into between CMUK andthe UK Pension Trustees over the terms of a “recovery plan” to reduce the underfundeddeficit in the UK Pension Plan and the Regulator has withdrawn the “warning notice”issued against CMUK and the five other Chemtura affiliates, including Chemtura. Thedefinitive agreements provide, among other things, for CMUK to make cashcontributions of £60 million (approximately $95 million) in just over a three year periodstarting with an initial contribution of £30 million ($49 million) that we made in thesecond quarter of 2011. The agreements also provide for the granting of both a securityinterest and a guarantee to support certain of the liabilities under this pension plan. There is also an evaluation being undertaken as to whether additional benefitobligations exist in connection with the equalization of certain benefits under the UKPension Plan that occurred in the early 1990s. Based on the results of the evaluation todate, $8 million of expense has been recorded in the fourth quarter of 2011, which maybe subject to adjustment as further information is gathered as part of the evaluation.Upon completion of the evaluation and the finalization of the liability with respect toadditional benefit obligations, additional cash contributions to the UK Pension Planmay be required starting in 2013 Environmental Liabilities We are involved in environmental matters of various types in a number of jurisdictions. A number of such matters involve claims for material amounts of damages and relate to


or allege environmental liabilities, including clean up costs associated with hazardouswaste disposal sites and natural resource damages. The Comprehensive Environmental Response, Compensation and Liability Act of 1980,as amended (“CERCLA”), and comparable state statutes impose strict liability uponvarious classes of persons with respect to the costs associated with the investigation andremediation of waste disposal sites. Such persons are typically referred to as“Potentially Responsible Parties” or PRPs. Chemtura and several of our subsidiarieshave been identified by federal, state or local governmental agencies or by other PRPs,as a PRP at various locations in the United States. Because in certain circumstancesthese laws have been construed to authorize the imposition of joint and several liability,the Environmental Protection Agency (“EPA”) and comparable state agencies couldseek to recover all costs involving a waste disposal site from any one of the PRPs forsuch site, including Chemtura, despite the involvement of other PRPs. In many cases,we are one of a large number of PRPs with respect to a site. In a few instances, we arethe sole or one of only a handful of PRPs performing investigation and remediation. Where other financially responsible PRPs are involved, we expect that any ultimateliability resulting from such matters will be apportioned between us and such otherparties. In addition, we are involved with environmental remediation and complianceactivities at some of our current and former sites in the United States and abroad. Asdescribed below, certain environmental liabilities against us have been discharged orsettled during the Chapter 11 cases.

Discharged and/or Settled Environmental Liabilities

As part of the Chapter 11 cases, under the Plan, the Debtors retained responsibility forenvironmental cleanup liabilities relating to currently owned or operated sites (i.e. sitesthat were part of the Debtors’ estates) and, with certain exceptions, discharged or settledliabilities relating to formerly owned or operated sites (i.e. sites that were no longer partof the Debtors’ estates) and third-party sites (i.e. sites that never were part of theDebtors’ estates). As of December 31, 2011, we had obtained Bankruptcy Court approval ofenvironmental settlements with the United States Department of Justice, the EPA andthe Connecticut Commissioner of Environmental Protection, the Indiana Department ofEnvironmental Management, the Florida Department of Environmental Protection, theNorth Carolina Division of Waste Management, the New York EnvironmentalProtection and Spill Compensation Fund, the Georgia Department of NaturalResources, the Louisiana Department of Environmental Quality, the Texas Commissionon Environmental Quality, the Ohio Environmental Protection Agency, the State ofNew York and the New York State Department of Environmental Conservation, thePennsylvania Department of Environmental Protection, the California Department ofToxic Substances Control, and the New Jersey Department of EnvironmentalProtection, the California Regional Water Quality Control Board, Santa Ana Region,the California Regional Water Quality Control Board, San Francisco Bay Region, andthe State Water Resources Board for the State of California. The settlement with theEPA resolved alleged violations of the Clean Air Act, CERCLA, the EmergencyPlanning and Community Right to Know Act, and the Clean Water Act, with respect toour Conyers facility, which we had previously reported in our periodic reports. All of the above-described settlements have been paid from the Debtors’ estates or theEnvironmental Reserve established under the Plan. As of December 31, 2011, $36million has been paid on account of such environmental settlements. As a result ofthese settlements, we have voluntarily dismissed an adversary proceeding that theDebtors initiated during the Chapter 11 cases against the United States and variousStates seeking a ruling from the Bankruptcy Court that all of the Debtors’ liabilitieswith respect to formerly owned or operated sites and third-party sites are dischargeableclaims in the Chapter 11 cases. In view of the offers made to settle environmental liabilities and the settlements thathave been reached with respect to environmental liabilities, estimates relating toenvironmental liabilities with respect to formerly owned or operated sites andthird-party sites are now classified as accrued expenses and other liabilities in ourConsolidated Balance Sheet at December 31, 2011 and 2010.

Environmental Liabilities that Have Not Been Discharged or Settled


Each quarter, we evaluate and review estimates for future remediation and other costs todetermine appropriate environmental reserve amounts. For each site where the cost ofremediation is probable and reasonably estimable, we determine the specific measuresthat are believed to be required to remediate the site, the estimated total cost to carry outthe remediation plan, the portion of the total remediation costs to be borne by us and theanticipated time frame over which payments toward the remediation plan will occur. Atsites where we expect to incur ongoing operation and maintenance expenditures, weaccrue on an undiscounted basis for a period of generally 10 years those costs which webelieve are probable and reasonably estimable. On June 6, 2011, our subsidiary Great Lakes Chemical Corporation, received aproposed Consent Administrative Order (“CAO”) from the Arkansas Department ofEnvironmental Quality alleging violations of the Resource Conservation and RecoveryAct in conjunction with its facility located in El Dorado, Arkansas. The proposed CAOincluded a civil penalty. While we believe that a mutually acceptable settlementamount will be negotiated with the agency, a reasonable estimate of the settlementamount cannot be made at this time. In any event, the ultimate settlement with theagency will not have a material effect on our results of operations, financial conditionor cash flows. The total amount accrued for environmental liabilities as of December 31, 2011 andDecember 31, 2010, was $88 million and $119 million (which includes $27 millionrelated to disputed claims), respectively. At December 31, 2011 and December 31,2010, $18 million and $43 million, respectively, of these environmental liabilities werereflected as accrued expenses and $70 million and $76 million, respectively, werereflected as other liabilities in our Consolidated Balance Sheets. We estimate thatongoing environmental liabilities could range up to $107 million at December 31,2011. Our accruals for environmental liabilities include estimates for determinableclean-up costs. We recorded a pre-tax charge of $6 million in 2011, $54 million in2010, and $20 million in 2009, to increase our environmental liabilities and madepayments of $37 million in 2011 (which included $27 million related to pre-petitionliabilities) and $52 million in 2010 (which included $42 million related to pre-petitionliabilities) for clean-up costs, which reduced our environmental liabilities. At certainsites, we have contractual agreements with certain other parties to share remediationcosts. We have a receivable of $10 million at December 31, 2011 and $11 million atDecember 31, 2010 to reflect probable recoveries. At a number of these sites, theextent of contamination has not yet been fully investigated or the final scope ofremediation is not yet determinable. We intend to assert all meritorious legal defensesand will pursue other equitable factors that are available with respect to these matters. However, the final cost of clean-up at these sites could exceed our present estimates,and could have, individually or in the aggregate, a material adverse effect on ourfinancial condition, results of operations or cash flows. Our estimates forenvironmental remediation liabilities may change in the future should additional sitesbe identified, further remediation measures be required or undertaken, current laws andregulations be modified or additional environmental laws and regulations be enacted,and as negotiations with respect to certain sites continue or as certain liabilities relatingto such sites are resolved as part of the Chapter 11 cases. Other We are routinely subject to other civil claims, litigation and arbitration, and regulatoryinvestigations, arising in the ordinary course of our business, as well as in respect of ourdivested businesses. Some of these claims and litigations relate to product liabilityclaims, including claims related to our current and historic products andasbestos-related claims concerning premises and historic products of our corporateaffiliates and predecessors. We believe the claims relating to the period before thefiling of the Chapter 11 cases are subject to discharge pursuant to the Plan and will besatisfied, to the extent they were timely filed in the Chapter 11 cases and allowed by theBankruptcy Court, solely from the Disputed Claims Reserve. Further, we believe thatwe have strong defenses to these claims. These claims have not had a material impacton us to date and we believe the likelihood that a future material adverse outcome willresult from these claims is remote. However, we cannot be certain that an adverseoutcome of one or more of these claims, to the extent not discharged in the Chapter 11cases, would not have a material adverse effect on our financial condition, results ofoperations or cash flows.


Internal Review of Customer Incentive, Commission and Promotional PaymentPractices Our previously disclosed review of various customer incentive, commission andpromotional payment practices of the Chemtura AgroSolutions segment in the Europe,Middle East and Africa region (the “EMEA Region”), was completed in 2010. Thereview was conducted under the oversight of the Audit Committee of the Board ofDirectors and with the assistance of outside counsel and forensic accountingconsultants. As disclosed previously, the review found evidence of various suspiciouspayments made to persons in certain Central Asian countries and of activity intended toconceal the nature of those payments. The amounts of these payments were reflected inour books and records but were not recorded appropriately or in a transparent manner,including payments that were redirected to persons other than the customer, distributoror agent in the particular transaction. None of these payments were subject to adequateinternal control. We have strengthened our worldwide internal controls relating tocustomer incentives and sales agent commissions and enhanced our global policyprohibiting improper payments, which contemplates, among other things, that wemonitor our international operations. Such monitoring may require that we investigateallegations of possible improprieties relating to transactions and the way in which suchtransactions are recorded. We have severed our relationship with all of the sales agentsand the employees responsible for the suspicious payments. We are currently indiscussions with the Securities and Exchange Commission regarding a possibleresolution of this matter. We cannot reasonably estimate the nature or amount ofmonetary or other sanctions, if any, that might be imposed as a result of the review. Wehave concluded that there is no matter connected with the review that would lead to amaterial change to the financial statements presented in this Annual Report onForm 10-K. Guarantees In addition to the letters of credit of $15 million and $12 million outstanding atDecember 31, 2011 and 2010, respectively, we have guarantees that have been providedto various financial institutions. At December 31, 2011 and 2010, we had $10 millionand $6 million, respectively. The letters of credit and guarantees were primarily relatedto insurance obligations, environmental obligations, banking credit facilities, vendordeposits and European value added tax (“VAT”) obligations. We have applied the disclosure provisions of ASC Topic 460, Guarantees (“ASC460”), to our agreements that contain guarantee or indemnification clauses. We are aparty to several agreements pursuant to which we may be obligated to indemnify a thirdparty with respect to certain loan obligations of joint venture companies in which wehave an equity interest. These obligations arose to provide initial financing for a jointventure start-up, fund an acquisition and/or provide project capital. Such obligationsmature through August 2016. In the event that any of the joint venture companies wereto default on these loan obligations, we would indemnify the other party up to itsproportionate share of the obligation based upon its ownership interest in the jointventure. At December 31, 2011, the maximum potential future principal and interestpayments due under these guarantees were $8 million. At December 31, 2010, themaximum potential future payments due under these guarantees were $15 million inprincipal and $1 million in interest. In accordance with ASC 460, we have accrued $1million and $2 million in reserves, which represents the probability weighted fair valueof these guarantees at December 31, 2011 and 2010, respectively. The reserve has beenincluded in long-term liabilities on our Consolidated Balance Sheet at December 31,2011 and 2010 with an offset to the investment included in other assets. We also have a customer guarantee, in which we have contingently guaranteed certaindebt obligations of one of our customers. The amount of this guarantee was $2 millionat December 31, 2011 and December 31, 2010. Based on past experience and on theunderlying circumstances, we do not expect to have to perform under this guarantee. At December 31 2011, unconditional purchase obligations primarily for commitmentsto purchase raw materials and tolling arrangements with outside vendors, amounted to$2 million (2012), $2 million (2013), $1 million (2014), $1 million (2015) and $6million in the aggregate.


In addition, the Company has a financing agreement with a bank in Brazil for certaincustomers under which the Company receives funds from the bank at invoice date, andin turn, the customer agrees to pay the bank on the due date. The Company provides afull recourse guarantee to the bank in the event of customer non-payment. In the ordinary course of business, we enter into contractual arrangements under whichwe may agree to indemnify a third party to such arrangement from any losses incurredrelating to the services they perform on our behalf or for losses arising from certainevents as defined within the particular contract, which may include, for example,litigation, claims or environmental matters relating to our past performance. For anylosses that we believe are probable and estimable, we have accrued for such amounts inour Consolidated Balance Sheets.


BUSINESS SEGMENTS

BUSINESS SEGMENTS(USD $)


BUSINESS SEGMENTS 20)

BUSINESS SEGMENTS We evaluate a segment’s performance based on several factors, of which the primary factor is operatingincome (loss). In computing operating income (loss) by segment, the following items have not beendeducted: (1) general corporate expense; (2) amortization; (3) facility closures, severance and related costs;(4) antitrust costs; (5) change in useful life of property, plant & equipment; (6) gain (loss) on sale of business;(7) changes in estimates related to expected allowable claims; and (8) impairment charges. Pursuant to ASCTopic 280, Segment Reporting (“ASC 280”), these items have been excluded from our presentation ofsegment operating income (loss) because they are not reported to the chief operating decision maker forpurposes of allocating resources among reporting segments or assessing segment performance. Industrial Performance Products Industrial Performance Products are engineered solutions for our customers’ specialty chemical needs. Industrial Performance Products include petroleum additives that provide detergency, friction modificationand corrosion protection in automotive lubricants, greases, refrigeration and turbine lubricants; castableurethane prepolymers engineered to provide superior abrasion resistance and durability in many industrial andrecreational applications; polyurethane dispersions and urethane prepolymers used in various types ofcoatings such as clear floor finishes, high-gloss paints and textiles treatments; and antioxidants that improvethe durability and longevity of plastics used in food packaging, consumer durables, automotive componentsand electrical components. These products are sold directly to manufacturers and through distributionchannels. Industrial Engineered Products Industrial Engineered Products are chemical additives designed to improve the performance of polymers intheir end-use applications. Industrial Engineered Products include brominated performance products, flameretardants, fumigants and organometallics. The products are sold across the entire value chain ranging fromdirect sales to monomer producers, polymer manufacturers, compounders and fabricators, fine chemicalmanufacturers and oilfield service companies to industry distributors. Consumer Products Consumer Products are performance chemicals that are sold to consumers for in-home and outdoor use. Consumer Products include a variety of branded recreational water purification products sold through localdealers and large retailers to assist consumers in the maintenance of their pools and spas and branded cleanersand degreasers sold primarily through mass merchants to consumers for home cleaning. Chemtura AgroSolutions Chemtura AgroSolutions develops, supplies, registers and sells agricultural chemicals formulated for specificcrops in various geographic regions for the purpose of enhancing quality and improving yields. The businessfocuses on specific target markets in six major product lines: seed treatments, fungicides, miticides,insecticides, growth regulators and herbicides. These products are sold directly to growers and to majordistributors in the agricultural sector. General Corporate Expense and Other Charges General corporate expense includes costs and expenses that are of a general corporate nature or managed on acorporate basis. These costs (net of allocations to the business segments) primarily represent corporatestewardship and administration activities together with costs associated with legacy activities and intangibleasset amortization. Functional costs are allocated between the business segments and general corporateexpense. Accelerated depreciation relates to certain assets affected by our restructuring programs. Facilityclosures, severance and related costs are primarily for severance costs related to our cost savings initiatives. The antitrust costs are primarily for settlements and legal costs associated with antitrust investigations andrelated civil lawsuits. The gain on sale of business relates to the sale of our 50% interest in TetrabromTechnologies Ltd. in 2011 and the sale of the natural sodium sulfonates and oxidized petrolatum product linesin 2010. Impairment charges primarily relate to the impairment of intangibles assets and property, plant andequipment related to our El Dorado, Arkansas facility in 2011, the impairment of goodwill of the ChemturaAgroSolutions segment in 2010, and the impairment of goodwill of the Consumer Products segment in 2009.


Change in estimates related to expected allowable claims relates to adjustments to liabilities subject tocompromise (primarily legal and environmental reserves) as a result of the proofs of claim evaluation process. Corporate assets are principally cash and cash equivalents, intangible assets (including goodwill) and otherassets (including deferred tax assets) maintained for general corporate purposes A summary of business data for our reportable segments for the years 2011, 2010 and 2009 is as follows: Information by Business Segment(In millions)

Net Sales

2011

2010

2009


$ 1,358

$ 1,223

$ 999


869

728

512

Consumer Products

422

458

457


376

351

332

Net Sales

$ 3,025

$ 2,760

$ 2,300


2011

2010

2009


$ 137

$ 119

$ 91


130

25

3

Consumer Products

26

67

63


30

21

42

Segment Operating Income

323

232

199

General corporate expense

(75) (65) (68)

Amortization

(38) (37) (38)Change in useful life of property, plant and equipment

—

(1) —

Facility closures, severance and related costs

(3) (1) (3)Antitrust costs

—

—

(10)

Gain on sale of business

27

2

—

Impairment charges

(4) (57) (39)Changes in estimates related to expected allowable claims

(3) (35) (73)

Total Operating Income (Loss)

227

38

(32) Interest expense

(63) (191) (70)

Loss on early extinguishment of debt

—

(88) —

Other expense, net

—

(6) (17)Reorganization items, net

(19) (303) (97)

Earnings (loss) from continuing operations before income

taxes

$ 145

$ (550) $ (216)

Depreciation and Amortization

2011

2010

2009


$ 38

$ 35

$ 41


42

79

57

Consumer Products

9

11

13


10

9

8

99

134

119

Corporate

41

41

43

Total continuing operations

140

175

162

Discontinued operations

—

—

11

$ 140

$ 175

$ 173

Equity Income (Loss)

2011

2010

2009


$ 3

$ 2

$ 1


2

2

(1)Chemtura AgroSolutions

(2) —

—

$ 3

$ 4

$ —


Segment Assets

2011

2010

2009


$ 768

$ 778

$ 717

Industrial Engineered Products 624 532 531 Consumer Products 226 259 272 Chemtura AgroSolutions 326 343 311

1,944 1,912 1,831 Discontinued operations — — 85 Corporate 911 1,001 1,202

$ 2,855 $ 2,913 $ 3,118

Capital Expenditures 2011 2010 2009 Industrial Performance Products $ 41 $ 37 $ 16 Industrial Engineered Products 98 58 16 Consumer Products 6 10 4 Chemtura AgroSolutions 6 11 8 151 116 44 Corporate 3 8 9

Total continuing operations 154 124 53 Discontinued operations — — 3

$ 154 $ 124 $ 56

Equity Method Investments 2011 2010 2009 Industrial Performance Products $ 23 $ 21 $ 19 Industrial Engineered Products 6 9 8 Chemtura AgroSolutions 28 2 2

$ 57 $ 32 $ 29 Information by Geographic Area(In millions)

Net sales (based on location of customer) 2011 2010 2009 United States $ 1,290 $ 1,236 $ 1,088 Canada 60 49 42 Latin America 161 143 126 Europe/Africa 923 813 703 Asia/Pacific 591 519 341 $ 3,025 $ 2,760 $ 2,300

Property, Plant and Equipment 2011 2010 2009 United States $ 431 $ 391 $ 422 Canada 68 68 59 Latin America 15 18 16 Europe/Africa 205 203 219 Asia/Pacific 33 36 34 $ 752 $ 716 $ 750


GUARANTOR CONDENSED CONSOLIDATING FINANCIAL DATA

GUARANTOR CONDENSED CONSOLIDATING FINANCIALDATA(USD $)


GUARANTOR CONDENSED CONSOLIDATING FINANCIALDATA 21)

GUARANTOR CONDENSED CONSOLIDATING FINANCIALDATA

Our obligations under the Senior Notes are fully and unconditionallyguaranteed on a senior unsecured basis, jointly and severally, by eachcurrent and future domestic restricted subsidiary, other than excludedsubsidiaries that guarantee any indebtedness of Chemtura or our restrictedsubsidiaries. Our subsidiaries that do not guarantee the Senior Notes arereferred to as the “Non-Guarantor Subsidiaries.” The GuarantorCondensed Consolidating Financial Data presented below presents thestatements of operations, balance sheets and statements of cash flow data:(i) for Chemtura Corporation (the “Parent Company”), the GuarantorSubsidiaries and the Non-Guarantor Subsidiaries on a consolidated basis(which is derived from Chemtura historical reported financialinformation); (ii) for the Parent Company, alone (accounting for ourGuarantor Subsidiaries and the Non-Guarantor Subsidiaries on an equitybasis under which the investments are recorded by each entity owning aportion of another entity at cost, adjusted for the applicable share of thesubsidiary’s cumulative results of operations, capital contributions anddistributions, and other equity changes); (iii) for the GuarantorSubsidiaries alone; and (iv) for the Non-Guarantor Subsidiaries alone.

Condensed Consolidating Statement of OperationsYear ended December 31, 2011

(In millions)

Non- Parent Guarantor Guarantor Consolidated Eliminations Company Subsidiaries Subsidiaries Net sales $ 3,025 $ (1,847)$ 1,669 $ 743 $ 2,460 Cost of goods sold 2,296 (1,847) 1,368 611 2,164 Selling, general

andadministrative 339 — 133 52 154



Facility closures,severance andrelated costs 3 — 1 — 2

Gain on sale ofbusiness (27) — — — (27)

Impairmentcharges 4 — 1 1 2


Equity (income)loss (3) — 1 — (4)

Operating income 227 — 108 22 97 Interest expense (63) — (72) 1 8 Other (expense)

income, net — — (10) 4 6 Reorganization

items, net (19) — (19) — —


Equity in netearnings (loss)of subsidiariesfrom continuingoperations — (114) 116 (2) —

Earnings (loss)

from continuingoperationsbefore incometaxes 145 (114) 123 25 111

Income taxexpense (25) — (4) — (21)

Net earnings

(loss) 120 (114) 119 25 90 Less: net earnings

attributable tonon-controllinginterests (1) — — — (1)

Net earnings

(loss)attributable toChemtura $ 119 $ (114)$ 119 $ 25 $ 89














Year ended December 31, 2011(In millions)

Non- Parent Guarantor Guarantor Consolidated Eliminations Company Subsidiaries Subsidiaries

Increase (decrease)to cash



Net earnings $ 120 $ (114)$ 119 $ 25 $ 90 Adjustments to

reconcile netearnings to netcash provided byoperations: Gain on sale of

business (27) — — — (27)Impairment

charges 4 — 1 1 2 Depreciation and




Changes inestimatesrelated toexpectedallowableclaims 3 — 3 — —

Equity income (3) 114 (115) 2 (4)Changes in assets

and liabilities,net (83) — (41) 5 (47)

Net cash providedby operations 182 — 31 83 68

CASH FLOWS


Net proceeds fromdivestments 8 — 8 — —

Payments foracquisitions, netof cash acquired (35) — — — (35)


investingactivities (181) — (16) (83) (82)

CASH FLOWS


Payments on shortterm borrowings,net 3 — — — 3

Common sharesacquired (22) — (22) — —

Proceeds from theexercise of stockoptions 1 — 1 — —

Net cash (used in)provided byfinancingactivities (18) — (21) — 3


rates on cash andcash equivalents (4) — — — (4)

(21) — (6) — (15)


Change in cash andcash equivalents

Cash and cashequivalents atbeginning of year 201 — $ 41 $ — $ 160

Cash and cashequivalents at endof year $ 180 $ — $ 35 $ — $ 145



Non- Parent Guarantor Guarantor Consolidated Eliminations Company Subsidiaries Subsidiaries Net sales $ 2,760 $ (1,710)$ 1,478 $ 794 $ 2,198 Cost of goods sold 2,103 (1,710) 1,312 583 1,918 Selling, general




Facility closures,severance andrelated costs 1 — — — 1


Impairmentcharges 57 — 54 — 3

Changes inestimates relatedto expectedallowable claims 35 — 15 (1) 21

Equity income (4) — — — (4) Operating income

(loss) 38 — (94) 66 66 Interest expense (191) — (165) (35) 9 Loss on early

extinguishmentof debt (88) — (88) — —

Other (expense)income, net (6) — (41) 37 (2)

Reorganizationitems, net (303) — (300) (2) (1)

Equity in netearnings ofsubsidiariesfrom continuingoperations — (135) 134 1 —

(Loss) earnings

from continuingoperationsbefore incometaxes (550) (135) (554) 67 72

Income taxexpense (22) — — — (22)

(Loss) earnings

from continuingoperations (572) (135) (554) 67 50

Loss fromdiscontinued

(1) — — — (1)


operations, netof tax

(Loss) gain on saleof discontinuedoperations, netof tax (12) — (32) — 20

Net (loss)

earnings (585) (135) (586) 67 69 Less: net earnings


Net (loss)

earningsattributable toChemtura $ (586)$ (135)$ (586)$ 67 $ 68











Stockholders’ equity 971 (12,700) 971 2,026 10,674 Total liabilities and





Increase(decrease)to cash


Net (loss) earnings $ (585)$ (135)$ (586)$ 67 $ 69 Adjustments to

reconcile net (loss)


earnings to netcash (used in)provided byoperations:


Loss (gain) on sale ofdiscontinuedoperations 12 — 32 — (20)

Impairment charges 60 — 55 — 5 Loss on early

extinguishment ofdebt 88 — 88 — —



Reorganization items,net 186 — 186 — —

Changes in estimatesrelated to expectedallowable claims 35 — 15 (1) 21

Non-cash contractualpost-petitioninterest expense 113 — 113 — —

Equity income (4) 135 (134) (1) (4)Changes in assets and

liabilities, net (292) — (168) (60) (64)Net cash (used in)

provided byoperations (204) — (352) 93 55

CASH FLOWS



Capital expenditures (124) — (27) (49) (48)Net cash (used in)

provided byinvesting activities (81) — 16 (49) (48)

CASH FLOWS


Proceeds from SeniorNotes 452 — 452 — —

Proceeds from TermLoan 292 — 292 — —

Proceeds fromAmended DIPCredit Facility 299 — 299 — —

Payments onAmended DIPCredit Facility (300) — (300) — —

Payments on DIPCredit Facility, net (250) — (250) — —

Repayments of6.875% Notes due2016 (75) — (75) — —

Repayments of6.875%Debentures due2026 (19) — (19) — —

Repayments of 7%Notes due 2009 (44) — — (44) —

Payments on 2007Credit Facility, net (54) — (54) — —

(40) — (40) — —


Payments for debtissuance andrefinancing costs

Payments formake-whole andno-call premiums (10) — (10) — —

Net cash provided by(used in) financingactivities 251 — 295 (44) —

CASH

Effect of exchangerates on cash andcash equivalents (1) — — — (1)

Change in cash andcash equivalents (35) — (41) — 6

Cash and cashequivalents atbeginning of year 236 — 82 — 154




Non- Parent Guarantor Guarantor Consolidated Eliminations Company Subsidiaries Subsidiaries Net sales $ 2,300 $ (1,430)$ 1,161 $ 703 $ 1,866 Cost of goods sold 1,721 (1,430) 990 522 1,639 Selling, general




Facility closures,severance andrelated costs 3 — (1) 1 3

Antitrust costs 10 — 9 — 1 Impairment

charges 39 — — — 39 Changes in

estimates relatedto expectedallowable claims 73 — 71 2 —

Operating (loss)

income (32) — (84) 49 3 Interest expense (70) — (76) (2) 8 Other (expense)

income, net (17) — (20) 1 2 Reorganization

items, net (97) — (95) (1) (1)Equity in net loss

of subsidiariesfrom continuingoperations — (5) 5 — —

(Loss) earnings

from continuingoperationsbefore income

(216) (5) (270) 47 12


taxesIncome tax

(expense)benefit (10) — 26 (1) (35)

(Loss) earnings

from continuingoperations (226) (5) (244) 46 (23)

Loss fromdiscontinuedoperations, netof tax (63) — (49) (1) (13)

Loss on sale ofdiscontinuedoperations, netof tax (3) — — — (3)

Net (loss)

earnings (292) (5) (293) 45 (39) Less: net earnings


Net (loss)

earningsattributable toChemtura $ (293)$ (5)$ (293)$ 45 $ (40)



Non- Parent Guarantor Guarantor Consolidated Eliminations Company Subsidiaries Subsidiaries Increase (decrease)

to cash CASH FLOWS


Net (loss) earnings $ (292)$ (5)$ (293)$ 45 $ (39)Adjustments to

reconcile net(loss) earnings tonet cash providedby (used in)operations: Loss on sale of

discontinuedoperations 3 — — — 3

Impairmentcharges 104 — 53 — 51




Changes inestimatesrelated toexpectedallowableclaims 73 — 71 2 —

Equity loss — 5 (5) — — (50) — (15) (88) 53


Changes in assetsand liabilities,net

Net cash providedby (used in)operations 49 — (103) 24 128

CASH FLOWS



Payments foracquisitions, netof cash acquired (5) — (5) — —


investingactivities (58) — (19) (17) (22)

CASH FLOWS


Proceeds from DIPCredit Facility,net 250 — 250 — —

Payments on 2007Credit Facility,net (28) — (28) — —

Proceeds from longterm borrowings 1 — — — 1

Payments on longterm borrowings (18) — (9) (9) —

Payments on shortterm borrowings,net (2) — — — (2)

Payments for debtissuance andrefinancing costs (30) — (30) — —

Net cash providedby (used in)financingactivities 173 — 183 (9) (1)



Change in cash andcash equivalents 168 — 61 (2) 109

Cash and cashequivalents atbeginning of year 68 — 21 2 45



SUMMARIZED UNAUDITED QUARTERLY FINANCIAL DATA

SUMMARIZED UNAUDITED QUARTERLY FINANCIAL DATA(USD $)


SUMMARIZED UNAUDITED QUARTERLY FINANCIAL DATA 22) SUMMARIZED UNAUDITED QUARTERLY FINANCIALDATA

SUMMARIZED UNAUDITED QUARTERLY FINANCIAL DATA

(In millions, except per share data) 2011 First Second Third Fourth Net sales $ 699 $ 876 $ 773 $ 677 Gross profit $ 161 $ 224 $ 174 $ 170 AMOUNTS

ATTRIBUTABLE TOCHEMTURA COMMONSHAREHOLDERS:

Net earnings attributable toChemtura $ 7(a)$ 69(b)$ 9(c)$ 34(d)

EARNINGS PER SHARE -

BASIC AND DILUTED -ATTRIBUTABLE TOCHEMTURA (i):

Net earnings attributable toChemtura $ 0.07 $ 0.69 $ 0.09 $ 0.34

Basic weighted-average

shares outstanding 100.1 100.3 100.3 99.6 Diluted weighted-average

shares outstanding 100.1 100.5 100.5 100.1

2010 First Second Third Fourth Net sales $ 603 $ 767 $ 710 $ 680 Gross profit $ 134 $ 199 $ 160 $ 164 AMOUNTS

ATTRIBUTABLE TOCHEMTURACOMMONSHAREHOLDERS:

(Loss) earnings fromcontinuing operations,net of tax $ (177)(e)$ (41)(f)$ 12(g)$ (367)(h)

(Loss) earnings fromdiscontinuedoperations, net of tax (2) 1 — —

Loss on sale ofdiscontinuedoperations, net of tax — (9) (3) —

Net (loss) earningsattributable toChemtura $ (179) $ (49) $ 9 $ (367)

EARNINGS (LOSS) PER

SHARE - BASIC ANDDILUTED -


ATTRIBUTABLE TOCHEMTURA (i):

(Loss) earnings fromcontinuing operations,net of tax $ (0.73) $ (0.16) $ 0.05 $ (2.25)

(Loss) earnings fromdiscontinuedoperations, net of tax (0.01) — — —

Loss on sale ofdiscontinuedoperations, net of tax — (0.04) (0.01) —

Net (loss) earningsattributable toChemtura $ (0.74) $ (0.20) $ 0.04 $ (2.25)

Basic and diluted

weighted-averageshares outstanding 242.9 242.9 242.9 163.7

(a) The earnings from continuing operations for the first quarter of 2011

included pre-tax charges for reorganization items, net of $7 million.(b) The earnings from continuing operations for the second quarter of

2011 included pre-tax charges reorganization items, net of $6million.

(c) The earnings from continuing operations for the third quarter of 2011included pre-tax charges for reorganization items of $6 million.

(d) The net earnings from continuing operations for the fourth quarterof 2011 included pre-tax credit for the gain on the sale of business of$27 million.

(e) The net loss from continuing operations for the first quarter of 2010included pre-tax charges for changes in estimates to expectedallowable claims of $122 million, reorganization items, net of $21million and a loss on the early extinguishment of debt of $13million.

(f) The net loss from continuing operations for the second quarter of2010 included pre-tax charges for contractual interest expense onunsecured pre-petition liabilities of $108 million and reorganizationitems, net of $26 million. Also included in the net loss fromcontinuing operations was a pre-tax credit for changes in estimatesto expected allowable claims of $49 million.

(g) The earnings from continuing operations for the third quarter of 2010included pre-tax charges for reorganization items of $33 million andcontractual interest expense on unsecured pre-petition liabilities of$21 million. Also included in the earnings from continuingoperations were pre-tax credit for changes in estimates to expectedallowable claims of $40 million.

(h) The net loss from continuing operations for the fourth quarter of2010 included pre-tax charges for reorganization items, net of $223million, a loss on the early extinguishment of debt of $75 million,asset impairments of $57 million and interest expense on unsecuredpre-petition liabilities of $9 million.

(i) The sum of the earnings per common share for the four quarters maynot equal the total earnings per common share for the full year due toquarterly changes in the average number of shares outstanding. Additionally, upon the effectiveness of our Plan all previouslyoutstanding shares of common stock were cancelled and pursuant tothe Plan approximately 96 million shares of New Common Stockwere issued. As a result, the average shares outstanding of our NewCommon Stock may not be comparable to prior periods.


Schedule II Valuation and Qualifying Accounts

Schedule II Valuation and Qualifying Accounts(USD $)


Schedule II Valuation and QualifyingAccounts

Schedule II

Valuation and Qualifying Accounts

(In millions of dollars)

Balance atbeginning

of year

Additionscharged tocosts andexpenses

Deductions

Other

Balanceat endof year

2011:

Allowance for doubtful accounts

$ 24

7

(11)(a) —

20

Reserve for customer rebates

20

41

(41)(b) —

20

2010:


$ 32

3

(10)(a) (1)(c) 24


18

36

(35)(b) 1(c) 20

2009:


$ 25

5

(2)(a) 4(c) 32


19

27

(30)(a) 2(c) 18

(a)

Primarily represents accounts written off as uncollectible (net of recoveries).(b)

Primarily represents payment to the customers.(c)

Primarily represents the translation effect of balances denominated in foreign currencies.


NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Policies) (USD $)


Revenue Recognition

Substantially all of our revenues are derived from thesale of products. Revenue is recognized when risk ofloss and title to the product is transferred to thecustomer. Revenue is recorded net of taxes collectedfrom customers that are remitted to governmentalauthorities with the collected taxes recorded as currentliabilities until remitted to the respective governmentalauthorities. Our products are sold subject to variousshipping terms. Our terms of delivery are included onour sales invoices and order confirmation documents.

Customer Rebates

We accrue for the estimated cost of customer rebatesas a reduction of sales. Customer rebates are primarilybased on customers achieving defined sales targetsover a specified period of time. We estimate the costof these rebates based on the likelihood of the rebatebeing achieved and recognize the cost as a deductionfrom sales when such sales are recognized. Rebateprograms are monitored on a regular basis andadjusted as required. Our accruals for customerrebates were $20 million at December 31, 2011 and2010, respectively. Customer rebates are included as areduction to accounts receivable on our ConsolidatedBalance Sheet.

Operating Costs and Expenses

Cost of goods sold (“COGS”) includes all costsincurred in manufacturing goods, including rawmaterials, direct manufacturing costs andmanufacturing overhead. COGS also includeswarehousing, distribution, engineering, purchasing,customer service, environmental, health and safetyfunctions, and shipping and handling costs foroutbound product shipments. Selling, general andadministrative (“SG&A”) expenses include costs andexpenses related to the following functions andactivities: selling, advertising, legal, provision fordoubtful accounts, corporate facilities and corporateadministration. SG&A also includes accounting,information technology, finance and human resources,excluding direct support in manufacturing operations,which is included as COGS. Research anddevelopment (“R&D”) expenses include basic andapplied research and development activities of atechnical and non-routine nature. R&D costs areexpensed as incurred. COGS, SG&A and R&Dexpenses exclude depreciation and amortizationexpenses which are presented on a separate line in ourConsolidated Statements of Operations.

Other Expense, Net

Other expense, net includes costs associated with ouraccounts receivable facilities, foreign exchange losses,interest income and other items.


Allowance for Doubtful Accounts

Included in accounts receivable are allowances fordoubtful accounts in the amount of $20 million in2011 and $24 million in 2010. The allowance fordoubtful accounts reflects a reserve representing ourestimate of the amounts that may not be collectible. Inaddition to reviewing delinquent accounts receivable,we consider many factors in estimating our reserves,including historical data, experience, customer types,credit worthiness, and economic trends. From time totime, we may adjust our assumptions for anticipatedchanges in any of these or other factors expected toaffect collection.

Inventory Valuation Inventories are valued at the lower of cost or market. Cost isdetermined using the first-in, first-out (“FIFO”) method.

Property, Plant and Equipment Property, plant and equipment are carried at cost, lessaccumulated depreciation. Depreciation expense fromcontinuing operations is computed on the straight-linemethod using the following ranges of asset lives: landimprovements - 3 to 20 years; buildings andimprovements - 2 to 40 years; machinery andequipment - 2 to 25 years; information systems andequipment - 2 to 10 years; and furniture, fixtures andother - 1 to 10 years. See Note 6 – Property, Plant andEquipment for further information. Renewals and improvements that significantly extendthe useful lives of the assets are capitalized. Capitalized leased assets and leasehold improvementsare depreciated over the shorter of their useful lives orthe remaining lease term. Expenditures formaintenance and repairs are charged to expense asincurred.

Intangible Assets

Patents, trademarks and other intangibles assets arebeing amortized principally on a straight-line basisusing the following ranges for their estimated usefullives: patents - 5 to 20 years; trademarks - 7 to 40years; customer relationships - 14 to 30 years;production rights - 9 to 10 years; and other intangibles- 5 to 20 years. See Note 7 – Goodwill and IntangibleAssets for further information.

Recoverability of Long-Lived Assets and Goodwill

We evaluate the recoverability of the carrying value oflong-lived assets, excluding goodwill, wheneverevents or changes in circumstances indicate that thecarrying value may not be recoverable. Under suchcircumstances, we assess whether the projectedundiscounted cash flows of our long-lived assets aresufficient to recover the existing unamortized cost ofour long-lived assets. If the undiscounted projectedcash flows are not sufficient, we calculate theimpairment amount by discounting the projected cashflows using our weighted-average cost of capital. Theamount of the impairment is written off againstearnings in the period in which the impairment is


determined. We evaluate the recoverability of the carrying value ofgoodwill on an annual basis as of July 31, or whenevents occur or circumstances change. See Note 7 –Goodwill and Intangible Assets for further details.

Income Taxes

We account for income taxes using the asset andliability method. Under this method, deferred taxassets and liabilities are recognized for the future taxconsequences of temporary differences between thecarrying amounts and tax bases of assets and liabilitiesusing enacted rates. The effect of a change in tax rateson deferred tax assets is recognized in income in theperiod that includes the enactment date. We recognize the financial statement effects of anuncertain income tax position when it is more likelythan not, based on the technical merits, that theposition will be sustained upon examination. Weaccrue for other tax contingencies when it is probablethat a liability to a taxing authority has been incurredand the amount of the contingency can be reasonablyestimated. Provision is made for taxes on undistributed earningsof foreign subsidiaries and related companies to theextent that such earnings are not deemed to beindefinitely reinvested.


Each quarter we evaluate and review our estimates forfuture remediation, operation and management costsdirectly related to environmental remediation, todetermine appropriate environmental reserve amounts. For each site where the cost of remediation is probableand reasonably estimable, we determine the specificmeasures that are believed to be required to remediatethe site, the estimated total cost to carry out theremediation plan, the portion of the total remediationcosts to be borne by us and the anticipated time frameover which payments to implement the remediationplan will occur. At sites where we expect to incurongoing operations and maintenance expenditures, weaccrue on an undiscounted basis, for a period ofgenerally 10 years, those costs which are probable andreasonably estimable. Environmental liabilities relatedto claims as part of the Chapter 11 cases are reflectedin our Consolidated Balance Sheet at December 31,2010 at amounts expected to be allowed by theBankruptcy Court. These amounts were settled during2011.

Litigation and Contingencies In accordance with guidance now codified under ASCTopic 450, Contingencies, we record in ourConsolidated Financial Statements amountsrepresenting our probable and reasonably estimableliability for claims, litigation and guarantees. Asinformation about current or future litigation or othercontingencies becomes available, managementassesses whether such information warrants the


recording of additional expenses relating to thosecontingencies. See Note 19 – Legal Proceedings andContingencies for further information.

Stock-Based Compensation

We recognize compensation expense for stock-basedawards issued over the requisite service period foreach separately vesting tranche, as if multiple awardswere granted. Stock-based compensation expense ismeasured at the date of grant, based on the fair valueof the award. Stock-based compensation expenserecognized was $26 million, $10 million, and $3million for the years ended December 31, 2011, 2010and 2009, respectively.

Translation of Foreign Currencies

Balance sheet accounts denominated in foreigncurrencies are translated at the current rate of exchangeas of the balance sheet date, while revenues andexpenses are translated at average rates of exchangeduring the periods presented. The cumulative foreigncurrency adjustments resulting from such translationare included in accumulated other comprehensiveincome loss.

Cash Flows

Cash and cash equivalents include bank term depositswith original maturities of three months or less.Included in cash and cash equivalents in ourConsolidated Balance Sheets at both December 31,2011 and 2010 is $1 million of restricted cash that isrequired to be on deposit to support certain letters ofcredit and performance guarantees, the majority ofwhich will be settled within one year. Included in our restricted cash balance within currentassets at December 31, 2011 is $5 million of cash ondeposit for the settlement of disputed bankruptcyclaims that existed on the Effective Date. AtDecember 31, 2010, $32 million and $6 million ofrestricted cash related to the disputed bankruptcyclaims was included within current assets andnon-current assets, respectively. In 2011 and 2010 we settled approximately $41million and $373 million of liabilities subject tocompromise, respectively, in cash upon our emergencefrom Chapter 11. Of the $41 million paid in 2011, $33million was paid from restricted cash. Additionally, in2011 and 2010 we issued approximately $33 millionand $1.4 billion of common stock for the settlement ofliabilities subject to compromise, respectively, inaccordance with the Plan. Cash payments included interest payments of $57million in 2011, $56 million in 2010 (which includes$24 million of interest payments in accordance withthe Plan) and $45 million in 2009. Cash payments alsoincluded income tax payments, net of refunds of $16million in 2011, $6 million in 2010 and $33 million in2009.


NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Tables) (USD $)


Schedule of other expense, net

(In millions)

2011

2010

2009

Costs of accounts receivable

facilities $ —

$ —

$ (2)

Foreign exchange loss

(2) (11) (22)Interest income

4

3

7

Other items, individually lessthan $1 million

(2) 2

—

$ — $ (6)$ (17)


ACQUISITIONS AND DIVESTITURES (Tables)

ACQUISITIONS AND DIVESTITURES(Tables) (USD $)


Schedule of loss from discontinued operations

Year Ended

(In millions)

2010

2009

Net Sales

$ 96

$ 241

Pre-tax loss from discontinued operations

$ (1) $ (69)(a)

Income tax benefit

—

6

Loss from discontinued operations

$ (1) $ (63) (a)

In 2009, we recorded a pre-tax impairment charge of $65 million to write-down thevalue of property, plant and equipment, net and intangible assets, net (see Note 3 –Restructuring and Asset Impairment Activities for further information).


RESTRUCTURING AND ASSET IMPAIRMENT ACTIVITIES (Tables)

RESTRUCTURING AND ASSET IMPAIRMENT ACTIVITIES(Tables) (USD $)


Summary of the charges and adjustments related to restructuring programs

(In millions)

Severanceand

RelatedCosts

OtherFacilityClosureCosts

Total

Balance at January 1, 2009 $ 29

2

31

Facility closure, severanceand related costs

2

1

3

Reorganization initiatives,net

1

3

4

Cash payments

(23) (2) (25)Balance at December 31,

2009

9

4

13


1

—

1

Cash payments

(9) (4) (13)Balance at December 31,

2010

1

—

1


3

—

3

Cash payments

(3) —

(3)Balance at December 31,

2011 $ 1

—

$ 1


INVENTORIES (Tables)

INVENTORIES(Tables) (USD $)


Schedule of components of inventories

(In millions)

2011

2010

Finished goods $ 348

$ 325

Work in process

43

41

Raw materials andsupplies

151

162

$ 542

$ 528


PROPERTY, PLANT AND EQUIPMENT (Tables)

PROPERTY, PLANT AND EQUIPMENT(Tables) (USD $)


Schedule of property, plant and equipment

(In millions)

2011

2010

Land and improvements $ 85

$ 79


240

231


1,238

1,174

Information systems andequipment

175

173


31

32


121

97

1,890

1,786

Less: accumulateddepreciation

1,138

1,070

$ 752

$ 716


GOODWILL AND INTANGIBLE ASSETS (Tables)

GOODWILL AND INTANGIBLE ASSETS(Tables) (USD $)


Schedule of goodwill by reportable segment

(In millions)

Industrial Performance

Products

ChemturaAgroSolutions

Total

Goodwill at December 31,

2009 $ 268

$ 57

$ 325

Accumulated impairments atDecember 31, 2009

(90) —

(90)

Net Goodwill atDecember 31, 2009

178

57

235

Impairment charges

—

(57) (57)

Foreign currencytranslation

(3) —

(3)

Goodwill at December 31,

2010

265

—

265

Accumulated impairments atDecember 31, 2010

(90) —

(90)


175

—

175

Foreign currency

translation

(1) —

(1)

Goodwill at December 31,2011

264

—

264

Accumulated impairmentsat December 31, 2011

(90) —

(90)


$ 174

$ —

$ 174

Schedule of intangible assets (excludinggoodwill)

2011

2010

(In millions)

GrossValue


NetIntangibles

GrossValue


NetIntangibles

Patents $ 128

$ (70)$ 58

$ 127

$ (62)$ 65

Trademarks

262

(71) 191

264

(62) 202


146

(50) 96

147

(43) 104

Productionrights

46

(28) 18

46

(24) 22

Other

70

(41) 29

73

(37) 36

Total $ 652

$ (260)$ 392

$ 657

$ (228)$ 429


Debt (Tables)

Debt(Tables) (USD $)


Schedule of debt

(In millions)

2011

2010

7.875% Senior Notes due 2018, net of unamortized discount of $3 million in 2011

and 2010 with an effective interest rate of 8.17% in 2011 and 8.15% in 2010

$ 452

$ 452

Term Loan due 2016, net of unamortized discount of $2 million in 2011 and $3million in 2010 with an effective interest rate of 5.79% in 2011 and 5.77% in2010

293

292

Other borrowings

8

7

Total Debt

753

751

Less: Short-term borrowings

(5) (3)

Total Long-Term Debt

$ 748

$ 748


INCOME TAXES (Tables)

INCOME TAXES(Tables) (USD $)


Schedule of earnings (loss) from continuing operations beforeincome taxes and the income tax expense (benefit)

(In millions)

2011

2010

2009

Pre-tax Earnings (Loss) from

Continuing Operations:

Domestic $ 27

$ (622)$ (206)

Foreign

118

72

(10)

$ 145 $ (550)$ (216)

Income Tax Expense (Benefit)

Domestic

Current $ 1

$ (26)$ 15

Deferred

3

31

(22)

4

5

(7)Foreign

Current

30

14

(5)Deferred

(9) 3

22

21

17

17

Total

Current

31

(12) 10

Deferred

(6) 34

—

$ 25

$ 22

$ 10

Schedule of expense (benefit) for income taxes from continuingoperations that differs from federal statutory rate

(In millions)

2011

2010

2009

Income tax expense (benefit) at the U.S.statutory rate

$ 50

$ (193) $ (76)

Antitrust legal settlements

—

(2) 1

Foreign rate differential

(26) (3) 22

State income taxes, net of federal benefit

—

1

1

Tax audit settlements

—

(13) —

Valuation allowances

(18) 307

100

U.S. tax on foreign earnings

28

(135) (1)Nondeductible reorganizational expenses

3

23

15

Nondeductible expenses, other

1

1

1

Nondeductible stock compensation

1

14

—

Depletion

(2) (5) (2)Post-petition interest expense

—

22

(22)

Goodwill

—

19

—

Income tax credits

(14) (9) (7)Taxes attributable to prior periods

2

(4) (21)

Other, net

—

(1) (1)Income tax expense

$ 25

$ 22

$ 10

Schedule of components of the deferred tax assets and liabilities

(In millions)

2011

2010

Deferred tax assets:

Pension and other post-retirementliabilities

$ 177

$ 180

Net operating loss carryforwards

422

443

Other accruals

44

22

Tax credit carryforwards

82

64

26

37


Accruals for environmentalremediation

Inventories and other

29

25

Financial instruments

5

4

Total deferred tax assets

785

775

Valuation allowance

(695) (697)Net deferred tax assets after valuation

allowance

90

78

Deferred tax liabilities:

Unremitted foreign earnings ofsubsidiaries

(7) (5)


(81) (64)Intangibles

(33) (30)

Other

—

(16)Total deferred tax liabilities

(121) (115)

Net deferred tax liability after valuationallowance

$ (31) $ (37)

Schedule of net current and non-current deferred taxes from eachtax jurisdiction

(In millions) 2011

2010

Net current deferredtaxes

Other currentassets

$ 6

$ 9

Other currentliabilities

(10) (7)

Net non-currentdeferred taxes

Other assets

20

21

Other liabilities

(47) (60)

Schedule of components of gross net operating loss

(In millions)

2011

2010

FederalNOL

$ 1,057

$ 1,050

State NOL $ 1,237

$ 1,313

ForeignNOL

$ 82

$ 304

Schedule of reconciliation of beginning and ending amount ofunrecognized tax benefits

(In millions)

2011

2010

2009

Balance at January 1

$ 41

$ 76

$ 85

Gross increases for tax positions taken

during current year

1

—

2

Gross increases for tax positions takenduring a prior period

13

3

45

Gross decreases for tax positions takenduring a prior period

(5) (10) (44)

Gross decreases due to bankruptcy claimsadjustment

—

—

(5)

Decreases from the expiration of the statuteof limitations

(1) —

(1)

Settlements / payments

(1) (29) (8)Foreign currency impact

(2) 1

2

Balance at December 31

$ 46

$ 41

$ 76


CAPITAL STOCK AND EARNINGS (LOSS) PER COMMON SHARE (Tables)

CAPITAL STOCK AND EARNINGS(LOSS) PER COMMON SHARE (Tables) (USD $)


Schedule of reconciliation of the shares used in computation of earnings (loss) pershare

Year ended

(In millions)

2011

2010

2009

Weighted average sharesoutstanding - Basic

100.1

223.0

242.9

Dilutive effect of commonshare equivalents

0.2

—

—

Weighted average sharesoutstanding - Diluted

100.3

223.0

242.9


COMPREHENSIVE INCOME (LOSS) (Tables)

COMPREHENSIVE INCOME(LOSS) (Tables) (USD $)


Schedule of comprehensive income (loss)

(In millions)

2011

2010

2009

Net earnings (loss)

$ 120

$ (585) $ (292)Other comprehensive income (loss), net of

tax:


(35) (26) 51


(35) (16) (78)

Change in fair value of derivatives

—

—

1


50

(627) (318)Comprehensive income attributable to

the non-controlling interest

(1) (1) (1)Comprehensive income (loss) attributable

to Chemtura

$ 49

$ (628) $ (319)

Schedule of components of accumulated other comprehensive loss("AOCL"), net of tax

(In millions)

2011

2010

Foreign currency translation adjustment

$ 53

$ 88

Unrecognized pension and other postretirement benefit costs

(399) (364)


$ (346) $ (276)


STOCK INCENTIVE PLANS (Tables)

STOCK INCENTIVE PLANS(Tables) (USD $)


Schedule of weighted average assumptions

Year EndedDecember 31,

2011

2010

2009

Dividend yield

0.0% 0.0% N/A

Expectedvolatility

53.8%56.0% N/A

Risk-free interestrate

2.5% 1.3% N/A

Expected life (inyears)

6

5

N/A

Summary of stock option activities

Weighted

Average

Aggregate

Remaining

Intrinsic

Price Per Share

Shares

Contractual

Value

Range

Average

(in millions)

Life

(in millions)

Outstanding at1/1/09

$ 1.50-21.74

$ 9.38

11.9

Lapsed

5.85-21.74

9.22

(5.5)


1.50-15.89

9.52

6.4

5.7

$ —

Cancelled

1.50-15.89

9.52

(6.4)

Granted

15.50

15.50

0.8


15.50

15.50

0.8

9.8

—

Granted

16.03

16.03

2.2

Lapsed

15.50-16.03

15.91

(0.2)

Outstandingat 12/31/11

$ 15.50-16.03

$ 15.90

2.8

9.1

$ —

Exercisable at

12/31/09 $ 1.50-15.89

$ 10.05

4.4

Exercisable at12/31/10

$ 15.50

$ 15.50

0.3

Exercisable at12/31/11

$ 15.50-16.03

$ 15.68

0.7

9.0

$ —

Schedule of RSUs award activity

Weighted

Average

Aggregate

Shares

Grant Date

Fair Value

(in millions)

Fair Value

(in millions)

Unvested RSU awards,January 1, 2009

2.0

$ 8.58

Canceled or expired

(0.8) 7.00

Unvested RSU awards,December 31, 2009

1.2

9.51

2

Cancelled

(1.2) 9.51

Granted

0.4

15.50

Vested

(0.1) 15.50

2


0.3

15.50

5

Cancelled

(0.1) 15.97

Granted

1.0

16.00

Vested

(0.3) 15.74

5


0.9

$ 15.91

$ 10


PENSION AND OTHER POST-RETIREMENT PLANS (Tables)

PENSION AND OTHER POST-RETIREMENT PLANS(Tables) (USD $)


Schedule of benefit obligation and weighted-averageassumptions used


Qualified

International and

Post-Retirement

Domestic Plans

Non-Qualified Plans

Health Care Plans

(In millions)

2011

2010

2011

2010

2011

2010

Change in projected benefitobligation:

Projected benefit obligationat beginning of year

$ 934

$ 874

$ 425

$ 421

$ 104

$ 150

Service cost

1

1

3

3

1

—

Interest cost

46

48

22

22

5

7


—

—

—

1

—

—

Actuarial (gains) losses

50

76

(12) 29

18

(12)Benefits paid

(60) (60) (19) (20) (11) (15)

Plan amendments

—

—

—

—

—

(27)Business divestitures (a)

—

(5) —

(22) —

—

Foreign currency exchangerate

—

—

(4) (14) (1) 1

Other

—

—

5

5

—

—

Projected benefit obligationat end of year

$ 971

$ 934

$ 420

$ 425

$ 116

$ 104

Accumulated benefit

obligation at end of year

$ 970

$ 933

$ 410

$ 412

Weighted-average year-end

assumptions used todetermine benefitobligations:

Discount rate

4.60% 5.10% 4.85% 5.25% 4.26% 4.78%Rate of compensation

increase

4.00% 4.00% 3.22% 3.35% N/A

N/A

Health care cost trend rate

6.86% 7.40% (a) Business divestitures represent the sale of our PVC additives business in April 2010.

Schedule of changes in fair value of plan assets


Qualified

International and

Post-Retirement

Domestic Plans

Non-Qualified Plans

Health Care Plans

(In millions) 2011

2010

2011

2010

2011

2010

Change in planassets:

Fair value ofplan assets atbeginning ofyear

$ 700

$ 625

$ 249

$ 230

$ —

$ —

Actual return onplan assets

77

86

11

25

—

—

Employercontributions

20

50

63

18

11

15

Planparticipants’contributions

—

—

1

1

—

—

Benefits paid

(60) (60) (19) (20) (11) (15)Business

divestitures

—

(1) —

—

—

—

Foreign currencyexchange ratechanges

—

—

(4) (5) —

—

Other

—

—

5

—

—

—

Fair value ofplan assets atend of year

$ 737

$ 700

$ 306

$ 249

$ —

$ —


Schedule of fair values of defined benefitpension plan assets, by asset category




(In millions) Total



Assets(Level 1)


Inputs(Level 2)





Assets(Level 1)


Inputs(Level 2)


Inputs(Level 3)

Equity securities:

U.S.equities (a) $ 47 $ 47 $ — $ — $ — $ — $ — $ —

Internationalequities (a) 56 56 — — — — — —

Pooled equity(b) 242 242 — — 143 20 123 —


Fixed incomesecurities:


Internationalgovernmentbonds (c) — — — — 58 — 58 —

U.S. corporatebonds (d) 180 — 180 — 1 — 1 —

Internationalcorporatebonds (d) 27 — 27 — — — — —

Pooled fixedincomefunds (e) — — — — 97 — 97 —

Private equity &otherinsturments (f) — — — — 6 — — 6

Money marketfunds (g) 11 11 — — — — — —

Cash & cashequivalents 1 1 — — 1 1 — —

$ 737 $ 357 $ 380 $ — $ 306 $ 21 $ 279 $ 6




(In millions) Total


Marketsfor

IdenticalAssets

(Level 1)


Inputs(Level 2)




Marketsfor

IdenticalAssets

(Level 1)


Inputs(Level 2)


Inputs(Level 3)

Equity securities:

U.S.equities (a) $ 80 $ 80 $ — $ — $ — $ — $ — $ —

International equities(a) 62 62 — — — — — —

Pooled equity (b) 247 247 — — 154 20 134 —


Fixed income securities: —


Internationalgovernment bonds(c) — — — — 2 — 2 —

U.S. corporate bonds(d) 152 — 152 — — — — —

Internationalcorporate bonds(d) 24 — 24 — 1 — 1 —

Pooled fixed incomefunds (e) — — — — 89 — 89 —

Private equity & otherinsturments (f) — — — — 1 — — 1

Money market funds (g) 10 10 — — — — — —

Cash & cash equivalents 2 2 — — 2 2 — —

$ 700 $ 401 $ 299 $ — $ 249 $ 22 $ 226 $ 1

(a)

U.S. and international equities are comprised of shares of common stock in varioussized U.S. and international companies from a diverse set of industries. Commonstock is valued at the closing price reported on the U.S. and international exchangeswhere the security is actively traded.

(b)

Pooled equity funds include mutual and collective funds that invest primarily inmarketable equity securities of various sized companies in a diverse set of industries


in various regions of the world. Shares of publicly traded mutual funds are valued atthe closing price reported on the U.S. and international exchanges where theunderlying securities are actively traded. Units of collective funds are valued at theper unit value determined by the fund manager, which is based on market price of theunderlying securities.

(c)

U.S. and international government bonds include U.S. treasury, municipal and agencyobligations and international government debt. Such instruments are valued at quotedmarket prices for those instruments or on institutional bid valuations. The increase inthe value of the U.S. bonds is due mainly to improved performance in 2011. Theincrease in the value of the international bonds is primarily due to the $49 millioncontribution we made to one of our UK pension plans.

(d)

U.S. and international corporate bonds are from a diverse set of industries andregions. Such instruments are valued using similar securities in active markets andobservable data or broker or dealer quotations.

(e)

Pooled fixed income funds are fixed income funds that invest primarily in corporateand government bonds. Such instruments are valued using similar securities in activemarkets and observable data or broker or dealer quotations.

(f)

Private equity and other instruments include instruments for which there aresignificant unobservable inputs. The increase in the fair value of these assets of $5million during 2011 primarily related to the addition of annuity contracts related totwo of our international plans.

(g)

Money market funds primarily include high-grade money market instruments withshort maturities (less than 90 days).

Schedule of funded status and related amountsrecognized on statement of financial condition





(In millions)

2011

2010

2011

2010

2011

2010

Funded status, end ofyear:


$ 737

$ 700

$ 306

$ 249

$ —

$ —

Benefit obligations

971

934

420

425

116

104



the ConsolidatedBalance Sheets at theend of year consist of:

Noncurrent assets

$ —

—

12

1

—

—

Current liability

—

—

(6) (7) (10) (10)Noncurrent liability

(234) (234) (120) (170) (106) (94)

Liabilities subject tocompromise

—

—

—

—

—

—

Liabilities ofdiscontinuedoperations

—

—

—

—

—

—



accumulated othercomprehensive lossconsist of:

Net actuarial loss/(gain)

$ 399

$ 382

$ 73

$ 81

$ 51

$ 35

Prior servicecost/(credit)

1

1

1

—

(58) (64)

$ 400

$ 383

$ 74

$ 81

$ (7) $ (29)


Schedule of estimated amounts that will beamortized from AOCL into net periodic benefitcost (credit) in next fiscal year

(In millions)

QualifiedDomestic

Plans

Internationaland Non-Qualified

Plans


Plans

Actuarial loss $ 15

$ 2

$ 3

Prior servicecredit

—

—

(5)

Totalamorizationcost (credit)

$ 15

$ 2

$ (2)

Schedule of projected benefit obligation inexcess of plan assets

(In millions)

2011

2010

Projected benefit obligation in excess of planassets at end of year:


$ 1,305

$ 1,452


829

937

Schedule of accumulated benefit obligation inexcess of plan assets

(In millions)

2011

2010

Accumulated benefit obligation in excess of planassets at end of year:


$ 1,133

$ 1,347

Accumulated benefit obligation

1,130

1,334


778

936

Schedule of expected employer contributionsand expected benefit payments


(in millions)

QualifiedDomestic

Plans

Internationaland

Non-QualifiedPlans


Plans

Expected Employer Contributions:

2012

$ 40

$ 34

$ 10

Expected Benefit Payments (a):

2012

61

19

10

2013

61

19

9

2014

61

20

9

2015

61

20

9

2016

62

20

9

2017-2021

310

113

38

(a)

The expected benefit payments are based on the same assumptions used to measureour benefit obligation at the end of the year and include benefits attributable toestimated future employee service.

Schedule of components of net periodic benefitcost (credit) and weighted-average assumptionsused to determine net cost



International andNon-Qualified

Plans


(In millions) 2011

2010

2009

2011

2010

2009

2011

2010

2009

Components of netperiodic benefitcost (credit):

Service cost $ 1

$ 1

$ —

$ 3

$ 3

$ 3

$ 1

$ —

$ —

Interest cost

46

48

50

22

22

22

5

7

9

Expected return onplan assets

(56) (55) (56) (18) (18) (18) —

—

—

—

—

—

—

—

—

(6) (5) (6)



Recognized actuariallosses

12

7

5

2

1

1

2

3

2

Curtailment gainrecognized

—

—

—

—

—

—

—

—

—

Settlement lossrecognized

—

—

—

—

—

—

—

—

—

Other

—

—

—

—

—

—

—

—

1

Net periodic benefitcost (credit)

$ 3

$ 1

$ (1) $ 9

$ 8

$ 8

$ 2

$ 5

$ 6

2011

2010

2009

2011

2010

2009

2011

2010

2009

Weighted-averageassumptions usedto determine netcost:

Discount rate

5.10% 5.70% 6.00% 5.14% 5.66% 5.90% 5.14% 5.49% 6.04%Expected return onplan assets

7.75% 8.00% 7.75% 6.80% 7.60% 7.50%

Rate of compensationincrease

4.00% 4.00% 4.00% 3.34% 2.96% 3.60%


FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Tables)

FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS(Tables) (USD $)


Schedule of carrying amounts and estimated fair values of material financial instruments

2011

2010

(In millions)

CarryingAmount

FairValue

CarryingAmount

FairValue

Total debt

$ 753

$ 777

$ 751

$ 786


ASSET RETIREMENT OBLIGATIONS (Tables)

ASSET RETIREMENT OBLIGATIONS(Tables) (USD $)


Summary of the change in the carrying amount of the asset retirement obligationsand the net book value of assets

(In millions)

2011

2010

Asset retirement obligation balance atbeginning of year

$ 23

$ 26

Revisions (a)

1

(3)Accretion expense – cost of goods sold (b)

—

2

Accretion expense – loss fromdiscontinued operations (c)

—

(1)

Payments

(3) (1)Asset retirement obligation balance at end of

year $ 21

$ 23

Net book value of asset retirement obligation

assets at end of year $ 1

$ 1

Depreciation expense

$ —

$ —

(a)

The addition in 2011 primarily relates to a reclassificationof asset retirement costs that were previously recorded inanother accrued expense account. The 2010 reversalincludes the sale of our natural sodium sulfonates andoxidized petrolatum product lines in July 2010.

(b)

The decrease in accretion expense in 2011 as compared to2010 is primarily due to the revision of costs related tovarious reorganization initiatives implemented in 2009 and2010, which resulted in the acceleration of certain costs in2010 and the reduction of certain costs in 2011.

(c)

Includes the reversal of asset retirement obligations relatedto the sale of our PVC additives business in April 2010.


EMERGENCE FROM CHAPTER 11 (Tables)

EMERGENCE FROM CHAPTER 11(Tables) (USD $)


Summary of approved distributable claims reserves

(In millions)

DiacetylReserve

EnvironmentalReserve

DisputedClaimsReserve

SegregatedReserves

TotalReserves

Distributable amountapproved atEffective Date

$ 7

$ 38

$ 42

$ 30

$ 117

Settlements

(7) (9) (2) (4) (22)Distributable

balance atDecember 31,2010

—

29

40

26

95

Settlements

—

(27) (27) (2) (56)Supplemental

distributions

—

—

(5) (12) (17)Reclass to disputed

claims reserve

—

(2) 14

(12) —

InsuranceReimbursements

—

—

7

—

7

Distributablebalance atDecember 31,2011

$ —

$ —

$ 29

$ —

$ 29

Schedule of reorganization items related to Chapter 11cases

(In millions)

2011

2010

2009

Professional fees and other

$ 16

$ 117

60

Write-off of debt discounts and premiums (a)

—

(2) 24

Write-off of debt issuance costs (a)

—

—

7

Write-off of deferred charges related totermination of U.S. accounts receivable facility

—

—

4

Rejections or terminations of lease and othercontract agreements (b)

—

2

9

Severance - closure of manufacturing plants andwarehouses (b)

1

3

1

Claim settlements, net (c)

2

183

(8)Total reorganization items, net

$ 19

$ 303

97

(a)

During 2009, the carrying value of pre-petition debt was adjusted to its respectiveface value as this represented the expected allowable claim in the Chapter 11cases. As a result, unamortized debt issuance costs, discounts and premiumswere charged to reorganization items, net in our Consolidated Statements ofOperations. During 2010, further adjustments were made based on the allowedclaim.

(b)

Represents charges for cost savings initiatives for which Bankruptcy Courtapproval has been obtained or requested. For additional information see Note 3 –Restructuring and Asset Impairment Activities.

(c)

Represents the difference between the settlement amount of certain pre-petitionobligations (which for obligations settled in New Common Stock is based on thefair value of our stock at the issuance date) and the corresponding carrying valueof the recorded liabilities.


Schedule of Fully Administered Debtors On December 1, 2011, we filed a motion requesting entry of an order granting a finaldecree closing the Chapter 11 cases for the following debtors (the “Fully AdministeredDebtors”):

• A&M Cleaning ProductsLLC



• Aqua Clear Industries,LLC


• Monochem, Inc.

• ASEPSIS, Inc.

• CromptonMonochem, Inc.


• ASCK, Inc.



• BioLab Company Store,LLC

• GT Seed Treatment, Inc.


• Bio lab FranchiseCompany, LLC




• ISCI, Inc.




BUSINESS SEGMENTS (Tables)

BUSINESS SEGMENTS(Tables) (USD $)


Schedule of information by business segment

(In millions)

Net Sales

2011

2010

2009


$ 1,358

$ 1,223

$ 999


869

728

512

Consumer Products

422

458

457


376

351

332

Net Sales

$ 3,025

$ 2,760

$ 2,300


2011

2010

2009


$ 137

$ 119

$ 91


130

25

3

Consumer Products

26

67

63


30

21

42

Segment Operating Income

323

232

199

General corporate expense

(75) (65) (68)

Amortization

(38) (37) (38)Change in useful life of property, plant and

equipment

—

(1) —

Facility closures, severance and related costs

(3) (1) (3)Antitrust costs

—

—

(10)

Gain on sale of business

27

2

—

Impairment charges

(4) (57) (39)Changes in estimates related to expected allowable

claims

(3) (35) (73)Total Operating Income (Loss)

227

38

(32)

Interest expense

(63) (191) (70)

Loss on early extinguishment of debt

—

(88) —

Other expense, net

—

(6) (17)Reorganization items, net

(19) (303) (97)

Earnings (loss) from continuing operations before

income taxes

$ 145

$ (550) $ (216)

Depreciation and Amortization

2011

2010

2009


$ 38

$ 35

$ 41


42

79

57

Consumer Products

9

11

13


10

9

8

99

134

119

Corporate

41

41

43

Total continuing operations

140

175

162

Discontinued operations

—

—

11

$ 140

$ 175

$ 173

Equity Income (Loss)

2011

2010

2009


$ 3

$ 2

$ 1


2

2

(1)Chemtura AgroSolutions

(2) —

—

$ 3

$ 4

$ —


Segment Assets

2011

2010

2009


$ 768

$ 778

$ 717

Industrial Engineered Products 624 532 531 Consumer Products 226 259 272 Chemtura AgroSolutions 326 343 311

1,944 1,912 1,831 Discontinued operations — — 85 Corporate 911 1,001 1,202

$ 2,855 $ 2,913 $ 3,118

Capital Expenditures 2011 2010 2009 Industrial Performance Products $ 41 $ 37 $ 16 Industrial Engineered Products 98 58 16 Consumer Products 6 10 4 Chemtura AgroSolutions 6 11 8 151 116 44 Corporate 3 8 9

Total continuing operations 154 124 53 Discontinued operations — — 3

$ 154 $ 124 $ 56

Equity Method Investments 2011 2010 2009 Industrial Performance Products $ 23 $ 21 $ 19 Industrial Engineered Products 6 9 8 Chemtura AgroSolutions 28 2 2

$ 57 $ 32 $ 29

Schedule of information by geographic area (In millions)

Net sales (based on location ofcustomer) 2011 2010 2009

United States $ 1,290 $ 1,236 $ 1,088 Canada 60 49 42 Latin America 161 143 126 Europe/Africa 923 813 703 Asia/Pacific 591 519 341 $ 3,025 $ 2,760 $ 2,300

Property, Plant and Equipment 2011 2010 2009 United States $ 431 $ 391 $ 422 Canada 68 68 59 Latin America 15 18 16 Europe/Africa 205 203 219 Asia/Pacific 33 36 34 $ 752 $ 716 $ 750


GUARANTOR CONDENSED CONSOLIDATING FINANCIAL DATA (Tables)

GUARANTOR CONDENSED CONSOLIDATING FINANCIAL DATA(Tables) (USD $)


Schedule of condensed consolidating statement of operations


(In millions)

Non- Parent Guarantor Guarantor Consolidated Eliminations Company Subsidiaries Subsidiaries Net sales $ 3,025 $ (1,847)$ 1,669 $ 743 $ 2,460 Cost of goods sold 2,296 (1,847) 1,368 611 2,164 Selling, general and


amortization 140 — 36 50 54 Research and

development 43 — 18 7 18 Facility closures,

severance andrelated costs 3 — 1 — 2


Impairment charges 4 — 1 1 2 Changes in

estimates relatedto expectedallowable claims 3 — 3 — —

Equity (income)loss (3) — 1 — (4)

Operating income 227 — 108 22 97 Interest expense (63) — (72) 1 8 Other (expense)

income, net — — (10) 4 6 Reorganization


earnings (loss) ofsubsidiaries fromcontinuingoperations — (114) 116 (2) —

Earnings (loss) from

continuingoperations beforeincome taxes 145 (114) 123 25 111

Income tax expense (25) — (4) — (21)

Net earnings(loss) 120 (114) 119 25 90

Less: net earnings



Net earnings

(loss)attributable toChemtura $ 119 $ (114)$ 119 $ 25 $ 89


(In millions)

Non- Parent Guarantor Guarantor Consolidated Eliminations Company Subsidiaries Subsidiaries Net sales $ 2,760 $ (1,710)$ 1,478 $ 794 $ 2,198 Cost of goods sold 2,103 (1,710) 1,312 583 1,918 Selling, general and




severance andrelated costs 1 — — — 1


Impairment charges 57 — 54 — 3 Changes in

estimates relatedto expectedallowable claims 35 — 15 (1) 21

Equity income (4) — — — (4) Operating income

(loss) 38 — (94) 66 66 Interest expense (191) — (165) (35) 9 Loss on early

extinguishment ofdebt (88) — (88) — —

Other (expense)income, net (6) — (41) 37 (2)

Reorganizationitems, net (303) — (300) (2) (1)

Equity in netearnings ofsubsidiaries fromcontinuingoperations — (135) 134 1 —

(Loss) earnings

from continuingoperations beforeincome taxes (550) (135) (554) 67 72

Income tax expense (22) — — — (22) (Loss) earnings

from continuingoperations (572) (135) (554) 67 50


Loss fromdiscontinuedoperations, net oftax (1) — — — (1)

(Loss) gain on saleof discontinuedoperations, net oftax (12) — (32) — 20

Net (loss)

earnings (585) (135) (586) 67 69 Less: net earnings


Net (loss)

earningsattributable toChemtura $ (586)$ (135)$ (586)$ 67 $ 68



Non- Parent Guarantor Guarantor Consolidated Eliminations Company Subsidiaries Subsidiaries Net sales $ 2,300 $ (1,430)$ 1,161 $ 703 $ 1,866 Cost of goods sold 1,721 (1,430) 990 522 1,639 Selling, general and




severance andrelated costs 3 — (1) 1 3

Antitrust costs 10 — 9 — 1 Impairment charges 39 — — — 39 Changes in

estimates relatedto expectedallowable claims 73 — 71 2 —

Operating (loss)

income (32) — (84) 49 3 Interest expense (70) — (76) (2) 8 Other (expense)

income, net (17) — (20) 1 2 Reorganization

items, net (97) — (95) (1) (1)Equity in net loss of

subsidiaries fromcontinuingoperations — (5) 5 — —


(Loss) earnings

from continuingoperations beforeincome taxes (216) (5) (270) 47 12

Income tax(expense) benefit (10) — 26 (1) (35)

(Loss) earnings

from continuingoperations (226) (5) (244) 46 (23)

Loss fromdiscontinuedoperations, net oftax (63) — (49) (1) (13)

Loss on sale ofdiscontinuedoperations, net oftax (3) — — — (3)

Net (loss)

earnings (292) (5) (293) 45 (39) Less: net earnings


Net (loss)

earningsattributable toChemtura $ (293)$ (5)$ (293)$ 45 $ (40)

Schedule of condensed consolidating balance sheet Condensed Consolidating Balance SheetAs of December 31, 2011

(In millions)






















Stockholders’ equity 971 (12,700) 971 2,026 10,674 Total liabilities and


Schedule of condensed consolidating statement of cashflows




Increase (decrease) tocash


Net earnings $ 120 $ (114)$ 119 $ 25 $ 90 Adjustments to

reconcile netearnings to net cashprovided byoperations: Gain on sale of

business (27) — — — (27)Impairment charges 4 — 1 1 2 Depreciation and






Equity income (3) 114 (115) 2 (4)Changes in assets

and liabilities, net (83) — (41) 5 (47)Net cash provided by

operations 182 — 31 83 68 CASH FLOWS



Payments foracquisitions, net ofcash acquired (35) — — — (35)




Payments on shortterm borrowings,net 3 — — — 3

Common sharesacquired (22) — (22) — —

Proceeds from theexercise of stockoptions 1 — 1 — —

Net cash (used in)provided byfinancing activities (18) — (21) — 3


rates on cash andcash equivalents (4) — — — (4)


Cash and cashequivalents atbeginning of year 201 — $ 41 $ — $ 160





Increase(decrease) tocash

CASH FLOWS



Net (loss) earnings $ (585)$ (135)$ (586)$ 67 $ 69 Adjustments to

reconcile net (loss)earnings to net cash(used in) providedby operations:


Loss (gain) on sale ofdiscontinuedoperations 12 — 32 — (20)

Impairment charges 60 — 55 — 5 Loss on early

extinguishment ofdebt 88 — 88 — —



Reorganization items,net 186 — 186 — —

Changes in estimatesrelated to expectedallowable claims 35 — 15 (1) 21

Non-cash contractualpost-petition interestexpense 113 — 113 — —

Equity income (4) 135 (134) (1) (4)Changes in assets and

liabilities, net (292) — (168) (60) (64)Net cash (used in)

provided byoperations (204) — (352) 93 55

CASH FLOWS



Capital expenditures (124) — (27) (49) (48)Net cash (used in)

provided byinvesting activities (81) — 16 (49) (48)

CASH FLOWS


Proceeds from SeniorNotes 452 — 452 — —

Proceeds from TermLoan 292 — 292 — —

Proceeds fromAmended DIPCredit Facility 299 — 299 — —

Payments onAmended DIPCredit Facility (300) — (300) — —

Payments on DIPCredit Facility, net (250) — (250) — —


Repayments of6.875% Notes due2016 (75) — (75) — —

Repayments of6.875% Debenturesdue 2026 (19) — (19) — —

Repayments of 7%Notes due 2009 (44) — — (44) —



Payments formake-whole andno-call premiums (10) — (10) — —

Net cash provided by(used in) financingactivities 251 — 295 (44) —

CASH

Effect of exchangerates on cash andcash equivalents (1) — — — (1)

Change in cash andcash equivalents (35) — (41) — 6

Cash and cashequivalents atbeginning of year 236 — 82 — 154





cash CASH FLOWS


Net (loss) earnings $ (292)$ (5)$ (293)$ 45 $ (39)Adjustments to

reconcile net (loss)earnings to net cashprovided by (usedin) operations: Loss on sale of

discontinuedoperations 3 — — — 3

Impairment charges 104 — 53 — 51 Depreciation and




73 — 71 2 —


Changes inestimates relatedto expectedallowable claims

Equity loss — 5 (5) — — Changes in assets

and liabilities,net (50) — (15) (88) 53

Net cash provided by(used in) operations 49 — (103) 24 128

CASH FLOWS



Payments foracquisitions, net ofcash acquired (5) — (5) — —




Proceeds from DIPCredit Facility, net 250 — 250 — —


Proceeds from longterm borrowings 1 — — — 1

Payments on longterm borrowings (18) — (9) (9) —

Payments on shortterm borrowings,net (2) — — — (2)


Net cash provided by(used in) financingactivities 173 — 183 (9) (1)



Change in cash andcash equivalents 168 — 61 (2) 109

Cash and cashequivalents atbeginning of year 68 — 21 2 45



SUMMARIZED UNAUDITED QUARTERLY FINANCIAL DATA (Tables)

SUMMARIZED UNAUDITED QUARTERLY FINANCIAL DATA(Tables) (USD $)


Schedule of summarized unaudited quarterly financial data

(In millions, except per share data) 2011 First Second Third Fourth Net sales $ 699 $ 876 $ 773 $ 677 Gross profit $ 161 $ 224 $ 174 $ 170 AMOUNTS

ATTRIBUTABLE TOCHEMTURA COMMONSHAREHOLDERS:

Net earnings attributable toChemtura $ 7(a)$ 69(b)$ 9(c)$ 34(d)

EARNINGS PER SHARE -

BASIC AND DILUTED -ATTRIBUTABLE TOCHEMTURA (i):

Net earnings attributable toChemtura $ 0.07 $ 0.69 $ 0.09 $ 0.34

Basic weighted-average shares

outstanding 100.1 100.3 100.3 99.6 Diluted weighted-average

shares outstanding 100.1 100.5 100.5 100.1

2010 First Second Third Fourth Net sales $ 603 $ 767 $ 710 $ 680 Gross profit $ 134 $ 199 $ 160 $ 164 AMOUNTS

ATTRIBUTABLE TOCHEMTURACOMMONSHAREHOLDERS:

(Loss) earnings fromcontinuing operations,net of tax $ (177)(e)$ (41)(f)$ 12(g)$ (367)(h)

(Loss) earnings fromdiscontinued operations,net of tax (2) 1 — —

Loss on sale ofdiscontinued operations,net of tax — (9) (3) —

Net (loss) earningsattributable to Chemtura $ (179) $ (49) $ 9 $ (367)

EARNINGS (LOSS) PER

SHARE - BASIC ANDDILUTED -ATTRIBUTABLE TOCHEMTURA (i):

(Loss) earnings fromcontinuing operations,

$ (0.73) $ (0.16) $ 0.05 $ (2.25)


net of tax(Loss) earnings from

discontinued operations,net of tax (0.01) — — —

Loss on sale ofdiscontinued operations,net of tax — (0.04) (0.01) —

Net (loss) earningsattributable to Chemtura $ (0.74) $ (0.20) $ 0.04 $ (2.25)

Basic and diluted

weighted-average sharesoutstanding 242.9 242.9 242.9 163.7

(a) The earnings from continuing operations for the first quarter of 2011

included pre-tax charges for reorganization items, net of $7 million.(b) The earnings from continuing operations for the second quarter of 2011

included pre-tax charges reorganization items, net of $6 million.(c) The earnings from continuing operations for the third quarter of 2011

included pre-tax charges for reorganization items of $6 million.(d) The net earnings from continuing operations for the fourth quarter of

2011 included pre-tax credit for the gain on the sale of business of $27million.

(e) The net loss from continuing operations for the first quarter of 2010included pre-tax charges for changes in estimates to expected allowableclaims of $122 million, reorganization items, net of $21 million and aloss on the early extinguishment of debt of $13 million.

(f) The net loss from continuing operations for the second quarter of 2010included pre-tax charges for contractual interest expense on unsecuredpre-petition liabilities of $108 million and reorganization items, net of$26 million. Also included in the net loss from continuing operationswas a pre-tax credit for changes in estimates to expected allowableclaims of $49 million.

(g) The earnings from continuing operations for the third quarter of 2010included pre-tax charges for reorganization items of $33 million andcontractual interest expense on unsecured pre-petition liabilities of $21million. Also included in the earnings from continuing operations werepre-tax credit for changes in estimates to expected allowable claims of$40 million.

(h) The net loss from continuing operations for the fourth quarter of 2010included pre-tax charges for reorganization items, net of $223 million, aloss on the early extinguishment of debt of $75 million, assetimpairments of $57 million and interest expense on unsecuredpre-petition liabilities of $9 million.

(i) The sum of the earnings per common share for the four quarters may notequal the total earnings per common share for the full year due toquarterly changes in the average number of shares outstanding. Additionally, upon the effectiveness of our Plan all previouslyoutstanding shares of common stock were cancelled and pursuant to thePlan approximately 96 million shares of New Common Stock wereissued. As a result, the average shares outstanding of our New CommonStock may not be comparable to prior periods.


NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)

NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTINGPOLICIES(Details) (USD $) (in Millions)




Customer Rebates Accruals for customer rebates $ 20 $ 20

Other Expense, Net Costs of accounts receivable facilities (2)

Foreign exchange loss (2) (11) (22)

Interest income 4 3 7

Other items, individually less than $1 million (2) 2

Maximum individual amount of other items 1 1


Allowance For Doubtful Accounts Allowances for doubtful accounts $ 20 $ 24


NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2)

NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Details 2) (USD $)



NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Details 3) (USD $)



NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Details 4) (USD $) (in Millions)




Stock-Based Compensation Stock-based compensation expense $ 26 $ 10 $ 3

Cash Flows Maximum term of original maturity to classify bank term deposits as cash equivalents (in months) P3M

Restricted cash required to be on deposit to support certain letters of credit and performance guarantees 1 1

Settlement period of letters of credit and performance guarantees kept as deposit, forming a part of restrictedcash (in years)

P1Y P1Y

Restricted cash included in current assets 5 32

Restricted cash included in non-current assets 6

Cash paid for settlement of liabilities subject to compromise 41 373

Payment from restricted cash for settlement of liabilities subject to compromise 33

Value of common stock issued for settlement of liabilities subject to compromise 33 1,400

Interest paid 57 56 45

Interest payment in accordance with the Plan 24

Income tax paid (net of refunds) $ 16 $ 6 $ 33


ACQUISITIONS AND DIVESTITURES (Details)

ACQUISITIONS ANDDIVESTITURES(Details) (USD $) (in Millions)


12/31/2009

Acquisitions Investment in joint venture $ 57 $ 29


ACQUISITIONS AND DIVESTITURES (Details 2)

ACQUISITIONS ANDDIVESTITURES(Details 2) (USD $) (in Millions)








Divestitures Net consideration from sale of aninvestment

$ 8 $ 43 $ 3

Pre-tax gain (loss) on sale ofbusiness

27 27 2

Loss from discontinued operations Loss from discontinued operations 1 (2) (1) (63)

Pre-tax impairment charge $ 60 $ 4 $ 60 $ 104


RESTRUCTURING AND ASSET IMPAIRMENT ACTIVITIES (Details)

RESTRUCTURING AND ASSET IMPAIRMENTACTIVITIES(Details) (USD $) (in Millions)




Restructuring information Pre-tax charges for restructuring $ 3 $ 1 $ 3


RESTRUCTURING AND ASSET IMPAIRMENT ACTIVITIES (Details 2)

RESTRUCTURING AND ASSET IMPAIRMENTACTIVITIES(Details 2) (USD $) (in Millions)







Restructuring information Pre-tax charge for severance to facility closures, severanceand related costs

$ 3 $ 1 $ 3

Charges and adjustments related to restructuringprograms

Facility closures, severance and related costs 3 1 3

Asset impairments Pre-tax charges for impairment 60 4 60 104

Impairment charge related to intangible assets 12 3

Impairment charge related to property, plant andequipment

57 7 48 4 57 39

Impairment charge related to goodwill $ 57


SALE OF ACCOUNTS RECEIVABLE (Details)

SALE OF ACCOUNTS RECEIVABLE(Details) (USD $) (in Millions)


Sale of accounts receivable Costs associated with the U.S. and europeanfacilities

$ 2

Write-off of deferred financing costs $ 4


INVENTORIES (Details)

INVENTORIES(Details) (USD $) (inMillions)

12/31/2011 12/31/2010

Finished goods $ 348 $ 325

Work in process 43 41

Raw materials and supplies 151 162

Inventory, net 542 528

Inventory obsolescencereserves

$ 18 $ 23


PROPERTY, PLANT AND EQUIPMENT (Details)

PROPERTY, PLANT AND EQUIPMENT(Details) (USD $) (in Millions)




Property, Plant and Equipment Property, plant and equipment, gross $ 1,890 $ 1,786

Less: accumulated depreciation 1,138 1,070


Depreciation expense 102 138 124

Accelerated depreciation of certain fixedassets

$ 2 $ 30 $ 5


GOODWILL AND INTANGIBLE ASSETS (Details)

GOODWILL AND INTANGIBLE ASSETS(Details) (USD $) (in Millions)



Goodwill by reportable segment Goodwill at the beginning of the period $ 265 $ 325

Accumulated impairments at the beginning of theperiod

(90) (90)

Net goodwill at the beginning of the period 175 235

Impairment charges (57)

Foreign currency translation (1) (3)

Goodwill at the end of the period 264 265

Accumulated impairments at the end of the period (90) (90)

Net goodwill at the end of the period $ 174 $ 175


GOODWILL AND INTANGIBLE ASSETS (Details 2)

GOODWILL AND INTANGIBLE ASSETS(Details 2) (USD $) (in Millions)



Intangible assets (excluding goodwill) Gross Value $ 652 $ 657

Accumulated Amortization (228) (228)

Net Intangibles 392 429

Foreign currency translation 4

Write-off of fully amortized intangible assets 4

Impairment charge 3

Re-registration costs capitalized 6

Amortization expense from continuing operations 38 37

Estimated amortization expense of intangible assets for the next five fiscalyears

2012 35

2013 35

2014 29

2015 25

2016 $ 18


Debt (Details)

Debt(Details) (USD $) (in Millions)



12 Months Ended12/31/2010 12/31/2010

DEBT Total Debt $ 751 $ 753 $ 751 $ 751

Less: Short-term borrowings (3) (3) (3) (3)

Total Long-Term Debt 748 748 748 748

Financing obtained to fund the entity's Chapter 11 Plan and provide for future capital needs 1,000

Outstanding letters of credit 12 15 12 12

Maturities 2012 6

2013 0

2014 0

2015 0

2016 295

Thereafter 455

Charge for early extinguishment of debt 75 88

Cumulative amount of pre-petition interest expense for unsecured claims 137 137 137

Portion of loss on early extinguishment of debt related to settlement of pre-petition debtobligations.

$ 70


LEASES (Details)

LEASES(Details) (USD $) (in Millions)


Minimum rental commitments, primarily for buildings, land and equipment under non-cancelable operating leases, net of sublease income 2012 $ 13

2013 12

2014 10

2015 8

2016 8

2017 and thereafter 24

Aggregate minimum rental commitments 75

Rental expenses under operating leases, net of sublease income $ 25


INCOME TAXES (Details)

INCOME TAXES(Details) (USD $) (in Millions)




Pre-tax Earnings (Loss) from continuing Operations: Domestic $ 27 $ (622) $ (206)

Foreign 118 72 (10)

Total pre-tax earnings (loss) from continuing operations 145 (550) (216)

Domestic Current 1 (26) 15

Deferred 3 31 (22)

Total domestic 4 5 (7)

Foreign Current 30 14 (5)

Deferred (9) 3 22

Total foreign 21 17 17

Total Current 31 (12) 10

Deferred (6) 34

Total income tax expense (benefit) 25 22 10

Expense (benefit) for income taxes from continuing operations that differs from federal statutoryrate

Income tax expense (benefit) at the U.S. statutory rate 50 (193) (76)

Antitrust legal settlements (2) 1

Foreign rate differential (26) (3) 22

State income taxes, net of federal benefit 1 1

Tax audit settlements (13)

Valuation allowances (18) 307 100

U.S. tax on foreign earnings 28 (135) (1)

Nondeductible reorganizational expenses 3 23 15

Nondeductible expenses, other 1 1 1

Nondeductible stock compensation 1 14

Depletion (2) (5) (2)

Post-petition interest expense 22 (22)

Goodwill 19

Income tax credits (14) (9) (7)

Taxes attributable to prior periods 2 (4) (21)

Other, net (1) (1)

Total income tax expense (benefit) 25 22 10

Deferred tax assets: Pension and other post-retirement liabilities 177 180

Net operating loss carryforwards 422 443

Other accruals 44 22

Tax credit carryforwards 82 64

Accruals for environmental remediation 26 37

Inventories and other 29 25

Financial instruments 5 4

Total deferred tax assets 785 775

Valuation allowance (697) (697)


Net deferred tax assets after valuation allowance 90 78

Deferred tax liabilities: Unremitted foreign earnings of subsidiaries (5) (5)

Property, plant and equipment (64) (64)

Intangibles (30) (30)

Other (16) (16)

Total deferred tax liabilities (115) (115)

Net deferred tax liability after valuation allowance (31) (37)

Net current deferred taxes Other current assets 6 9

Other current liabilities (10) (7)

Net non-current deferred taxes Other assets 20 21

Other liabilities $ (47) $ (60)


INCOME TAXES (Details 2)

INCOME TAXES(Details 2) (USD $) (in Millions)



Valuation allowances Change in valuation allowance $ 2 $ 317

Valuation allowance recorded in income tax (benefit)provision

(16) 310

Valuation allowance recorded in other comprehensive loss $ 14 $ 7



INCOME TAXES(Details 3) (USD $)





Undistributed earnings of foreign subsidiaries $ 753

Reduction in U.S. deferred income tax liability due to increase in undistributed earnings of foreign subsidiaries $ 3







Income taxes Increase (decrease) in liability for unrecognized tax benefits $ 5 $ (35)

Reconciliation of beginning and ending amount of unrecognized taxbenefits

Balance at the beginning of the period 41 76 85

Gross increases for tax positions taken during current year 1 2

Gross increases for tax positions taken during a prior period 13 3 45

Gross decreases for tax positions taken during a prior period (5) (10) (44)

Gross decreases due to bankruptcy claims adjustment (5)

Decreases from the expiration of the statute of limitations (1) (1)

Settlements / payments (1) (29) (8)

Foreign currency impact (2) 1 2

Balance at the end of the period 46 41 76

Interest expense related to unrecognized tax benefits 1 1

Interest income related to unrecognized tax benefits 1

Interest accrued related to unrecognized tax benefits 12 11

Potential decrease of unrecognized tax benefits over the next year $ 21


CAPITAL STOCK AND EARNINGS (LOSS) PER COMMON SHARE (Details)

CAPITAL STOCK AND EARNINGS(LOSS) PER COMMON SHARE (Details) (USD $) (in Millions) except Per Share Data












CAPITAL STOCK AND EARNINGS (LOSS) PER COMMON SHARE

Shares authorized pursuant to Plan 500 500 500 500

Par value of common stock (in dollars per share) $ 0.01 $ 0.01 $ 0.01 $ 0.01

Shares issued 98.3 95.6 98.3 95.6

Value of shares repurchased $ 22

Reconciliation of the shares used in the computation of earnings (loss) pershare

Weighted average shares outstanding - Basic 99.6 100.3 100.3 100.1 163.7 242.9 242.9 242.9 100.1 223 242.9

Dilutive effect of common share equivalents 0.2

Weighted average shares outstanding - Diluted 100.1 100.5 100.5 100.1 163.7 242.9 242.9 242.9 100.3 223 242.9


COMPREHENSIVE INCOME (LOSS) (Details)

COMPREHENSIVE INCOME(LOSS) (Details) (USD $) (in Millions)




Net earnings (loss) $ 120 $ (585) $ (292)

Other comprehensive income (loss), net of tax: Foreign currency translation adjustments (35) (26) 51

Unrecognized pension and other post-retirement benefit costs (35) (16) (78)

Change in fair value of derivatives 1

Total comprehensive income (loss) 50 (627) (318)

Comprehensive income attributable to the non-controlling interest (1) (1) (1)

Comprehensive income (loss) attributable to Chemtura 49 (628) (319)

Components of accumulated other comprehensive loss ("AOCL"), net oftax

Foreign currency translation adjustment 53 88

Unrecognized pension and other post retirement benefit costs (364) (364)

Accumulated other comprehensive loss $ (346) $ (276)


STOCK INCENTIVE PLANS (Details)

STOCK INCENTIVE PLANS(Details) (USD $) (in Millions)



Stock incentive plans Compensation expense recognized from previously unrecognizedexpense

$ 1

Number of shares available for grant 6.3 9.8


STOCK INCENTIVE PLANS (Details 2)

STOCK INCENTIVE PLANS(Details 2) (USD $) (in Millions)




STOCK INCENTIVE PLANS Stock-based compensation expense $ 26 $ 10 $ 3

Percentage of stock-based compensation expense allocated to operatingsegments

0.30 0.25 0.80



STOCK INCENTIVEPLANS(Details 3) (USD $)



STOCK INCENTIVEPLANS(Details 4) (USD $)



STOCK INCENTIVE PLANS(Details 5) (USD $) (in Millions)


Tax Benefits of Stock-Based CompensationPlans

Proceeds from exercise of stock options $ 1


PENSION AND OTHER POST-RETIREMENT PLANS (Details)

PENSION AND OTHER POST-RETIREMENTPLANS(Details) (USD $) (in Millions)



Change in plan assets: Employer contributions $ 94 $ 83


PENSION AND OTHER POST-RETIREMENT PLANS (Details 2)

PENSION AND OTHER POST-RETIREMENT PLANS(Details 2) (USD $)


PENSION AND OTHER POST-RETIREMENT PLANS (Details 3)

PENSION AND OTHER POST-RETIREMENT PLANS(Details 3) (USD $) (in Millions)




PENSION AND OTHER POST-RETIREMENT PLANS Amounts recognized in the Consolidated Balance Sheets at the end of year consistof:

Noncurrent liability $ (460) $ (498) $ (498)

Cash contributions by entity as per definitive agreements with the trustees 94 83

Projected benefit obligation in excess of plan assets at end of year: Projected benefit obligation 1,305 1,305 1,452

Fair value of plan assets 829 829 937

Accumulated benefit obligation in excess of plan assets at end of year: Projected benefit obligation 1,133 1,133 1,347

Accumulated benefit obligation 1,130 1,130 1,334

Fair value of plan assets 778 778 936

Cost of defined contribution plans $ 13 $ 12


DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Details)

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES(Details) (USD $) (in Millions)




Foreign currency contracts not designated as hedging instruments, loss recorded in other expense,net

$ 26

Foreign currency contract pre-tax loss $ 2 $ 11 $ 22


FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Details)

FINANCIAL INSTRUMENTS AND FAIR VALUEMEASUREMENTS(Details) (USD $)


FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Details 2)

FINANCIAL INSTRUMENTS AND FAIR VALUEMEASUREMENTS(Details 2) (USD $)


ASSET RETIREMENT OBLIGATIONS (Details)

ASSET RETIREMENT OBLIGATIONS(Details) (USD $) (in Millions)



Asset Retirement Obligations Change in the carrying amount of the asset retirementobligations

Asset retirement obligation balance at beginning of year $ 23 $ 26

Revisions 1 (3)

Accretion expense - cost of goods sold 2

Accretion expense - loss from discontinued operations (1)

Payments (3) (1)

Asset retirement obligation balance at end of year 21 23

Net book value of asset retirement obligation assets at end of year 1 1

Asset retirement obligation included in accrued expenses 6 11

Asset retirement obligation included in other liabilities $ 15 $ 12


EMERGENCE FROM CHAPTER 11 (Details)

EMERGENCE FROM CHAPTER 11(Details) (USD $)

12 Months Ended12/31/2011 03/31/2009

Number of US affiliates of the entity that also filed voluntary petitions for relief under Chapter 11 26

Number of supplemental distributions made 2

Bankruptcy Proceedings Disclosures Par value of common stock (in dollars per share) $ 0.01


EMERGENCE FROM CHAPTER 11 (Details 2)

EMERGENCE FROM CHAPTER 11(Details 2) (USD $) (in Millions)






Supplemental distribution to Holders of Interests payable in cash andstock

$ 15

Reconciliation of approved distributable claims reserves Distributable balance at the beginning of period 95 95

Distributable amount approved at Effective Date 117 117

Settlements (56) (22)

Supplemental distributions (17)

Insurance Reimbursements 7

Distributable balance at the end of period 95 29 95

Reorganization items related to Chapter 11 cases Professional fees and other 16 117 60

Write-off of debt discounts and premiums (2) 24

Write-off of debt issuance costs 7

Write-off of deferred charges related to termination of U.S. accountsreceivable facility

4

Rejections or terminations of lease and other contract agreements 2 9

Severance - closure of manufacturing plants and warehouses 1 3 1

Claim settlements, net 2 183 (8)

Total reorganization items, net $ 7 $ 223 $ 19 $ 303 $ 97


LEGAL PROCEEDINGS AND CONTINGENCIES (Details)

LEGAL PROCEEDINGS AND CONTINGENCIES(Details) (USD $) (in Millions) 12/31/2011 12/31/2010


Claim reserve approved $ 117




LEGAL PROCEEDINGS ANDCONTINGENCIES(Details 2) (USD $)



LEGAL PROCEEDINGS ANDCONTINGENCIES(Details 3) (USD $)



LEGAL PROCEEDINGS AND CONTINGENCIES(Details 4) (USD $) (in Millions) 12/31/2011 12/31/2010

Guarantees Outstanding letters of credit $ 15 $ 12

Unconditional purchase obligations primarily for commitments to purchase raw materials and tolling arrangements with outsidevendors

2012 2

2013 2

2014 1

2015 1

Aggregate unconditional purchase obligations $ 6


BUSINESS SEGMENTS (Details)

BUSINESS SEGMENTS(Details) (USD $) (in Millions)





BUSINESS SEGMENTS Net sales $ 680 $ 3,025 $ 2,760 $ 2,300

Segment Operating Income 323 232 199

General corporate expense (75) (65) (68)

Amortization (38) (37) (38)

Change in useful life of property, plant and equipment (1)

Facility closures, severance and related costs (3) (1) (3)

Antitrust costs (10)

Gain on sale of business 27 2

Impairment charges (57) (4) (57) (39)


(3) (35) (73)



Loss on early extinguishment of debt (75) (88)


Reorganization items, net (223) (19) (303) (97)

Earnings (loss) from continuing operations beforeincome taxes

145 (550) (216)

Depreciation and Amortization 140 175 173

Equity Income (Loss) 3 4

Segment Assets 2,913 2,855 2,913 3,118

Capital Expenditures 154 124 56

Equity Method Investments $ 32 $ 57 $ 32 $ 29 [1] - During 2010, $137 million of contractual interest expense was recorded relating to interest obligations on unsecured claims for the period March 18, 2009 throughthe November 10, 2010 that, as of the second quarter of 2010, were considered probable of being paid based on the plan of reorganization filed and later confirmed.Included in this amount is contractual interest expense of $63 million for 2009.


BUSINESS SEGMENTS (Details 2)

BUSINESS SEGMENTS(Details 2) (USD $) (in Millions)












Business segments

Net sales $ 677 $ 773 $ 876 $ 699 $ 680 $ 710 $ 767 $ 603 $ 3,025 $ 2,760 $ 2,300

Property, Plant and Equipment $ 752 $ 716 $ 752 $ 716 $ 750


GUARANTOR CONDENSED CONSOLIDATING FINANCIAL DATA (Details)

GUARANTOR CONDENSED CONSOLIDATING FINANCIALDATA(Details) (USD $) (in Millions)








Guarantor condensed consolidating financial data Net sales $ 680 $ 710 $ 767 $ 603 $ 3,025 $ 2,760 $ 2,300

Cost of goods sold 2,296 2,103 1,721

Selling, general and administrative 339 315 289


Research and development 43 42 35

Facility closures, severance and related costs 3 1 3

Antitrust costs 10


Impairment charges 57 4 57 39

Changes in estimates related to expected allowable claims 40 49 122 3 35 73

Equity income (loss) (3) (4)



Loss on early extinguishment of debt (75) (13) (88)


Reorganization items, net (223) (33) (26) (21) (19) (303) (97)

Earnings (loss) from continuing operations before income taxes 145 (550) (216)

Income tax (expense) benefit (25) (22) (10)

(Loss) earnings from continuing operations (367) 12 (41) (177) 119 (573) (227)

(Loss) earnings from discontinued operations, net of tax 1 (2) (1) (63)

Loss on sale of discontinued operations, net of tax (3) (9) (12) (3)

Net earnings (loss) 120 (585) (292)

Less: net earnings attributable to non-controlling interests (1) (1) (1)

Net earnings (loss) attributable to Chemtura $ (367) $ 9 $ (49) $ (179) $ 119 $ (586) $ (293) [1] - During 2010, $137 million of contractual interest expense was recorded relating to interest obligations on unsecured claims for the period March 18, 2009 throughthe November 10, 2010 that, as of the second quarter of 2010, were considered probable of being paid based on the plan of reorganization filed and later confirmed.Included in this amount is contractual interest expense of $63 million for 2009.



GUARANTOR CONDENSED CONSOLIDATING FINANCIALDATA(Details 2) (USD $) (in Millions)

12/31/2011 12/31/2010 12/31/2009

ASSETS Current assets $ 1,321 $ 1,421


Goodwill 174 175 235


Total Assets 2,855 2,913 3,118





Stockholders' equity 1,046 971 172

Total Liabilities and Stockholders' Equity $ 2,855 $ 2,913



GUARANTOR CONDENSED CONSOLIDATING FINANCIAL DATA(Details 3) (USD $) (in Millions)




CASH FLOWS FROM OPERATING ACTIVITIES Net (loss) earnings $ 120 $ (585) $ (292)



Loss (gain) on sale of discontinued operations 12 3

Impairment charges 4 60 104

Loss on early extinguishment of debt 88


Stock-based compensation expense 26 10 3

Reorganization items, net 2 186 35

Changes in estimates related to expected allowable claims 3 35 73

Non-cash contractual post-petition interest expense 113

Equity income (loss) (3) (4)

Changes in assets and liabilities, net (83) (292) (50)

Net cash provided by (used in) operating activities 182 (204) 49

CASH FLOWS FROM INVESTING ACTIVITIES Net proceeds from divestments 8 43 3

Payments for acquisitions, net of cash acquired (35) (5)

Capital expenditures (154) (124) (56)

Net cash used in investing activities (181) (81) (58)

CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from Senior Notes 452

Proceeds from Term Loan 292

Proceeds from long term borrowings 1

Payments on long term borrowings (18)

Payments on short term borrowings, net 3 (2)

Payments for debt issuance and refinancing costs (40) (30)

Payments for make-whole and no-call premiums (10)

Common shares acquired (22)

Proceeds from exercise of stock options 1

Net cash (used in) provided by financing activities (18) 251 173

CASH Effect of exchange rates on cash and cash equivalents (4) (1) 4

Change in cash and cash equivalents (21) (35) 168

Cash and cash equivalents at beginning of year 201 236 68

Cash and cash equivalents at end of year $ 180 $ 201 $ 236


SUMMARIZED UNAUDITED QUARTERLY FINANCIAL DATA (Details)

SUMMARIZED UNAUDITED QUARTERLY FINANCIALDATA(Details) (USD $) (in Millions) except Per Share Data












Net sales $ 677 $ 773 $ 876 $ 699 $ 680 $ 710 $ 767 $ 603 $ 3,025 $ 2,760 $ 2,300

Gross profit 170 174 224 161 164 160 199 134

AMOUNTS ATTRIBUTABLE TO CHEMTURACOMMON SHAREHOLDERS:

(Loss) earnings from continuing operations, net of tax (367) 12 (41) (177) 119 (573) (227)

(Loss) earnings from discontinued operations, net of tax 1 (2) (1) (63)

Loss on sale of discontinued operations, net of tax (3) (9) (12) (3)

Net earnings (loss) attributable to Chemtura 34 9 69 7 (367) 9 (49) (179) 119 (586) (293)

EARNINGS (LOSS) PER SHARE - BASIC ANDDILUTED - ATTRIBUTABLE TO CHEMTURA:

(Loss) earnings from continuing operations, net of tax (indollars per share)

$ (2.25) $ 0.05 $ (0.16) $ (0.73) $ 1.19 $ (2.58) $ (0.93)

(Loss) earnings from discontinued operations, net of tax (indollars per share)

$ (0.01) $ (0.26)

Loss on sale of discontinued operations, net of tax (in dollarsper share)

$ (0.01) $ (0.04) $ (0.05) $ (0.01)

Net earnings (loss) attributable to Chemtura (in dollars pershare)

$ 0.34 $ 0.09 $ 0.69 $ 0.07 $ (2.25) $ 0.04 $ (0.20) $ (0.74) $ 1.19 $ (2.63) $ (1.20)

Basic weighted - average shares outstanding (in shares) 99.6 100.3 100.3 100.1 163.7 242.9 242.9 242.9 100.1 223 242.9

Diluted weighted - average shares outstanding (in shares) 100.1 100.5 100.5 100.1 163.7 242.9 242.9 242.9 100.3 223 242.9

Reorganization items, net 6 6 7 223 33 26 21 19 303 97

Gain on sale of business 27 27 2

Changes in estimates related to expected allowable claims 40 49 122 3 35 73

Loss on early extinguishment of debt 75 13 88

Contractual interest expense on unsecured pre-petitionliabilities

9 21 108 137

Asset impairment charges $ 57 $ 4 $ 57 $ 39

Shares of new common stock issued 95.5


Schedule II Valuation and Qualifying Accounts (Details)

Schedule II Valuation and QualifyingAccounts(Details) (USD $)


_____________________________________Created by Morningstar® Document Research℠http://documentresearch.morningstar.com


http://documentresearch.morningstar.com

· form 10-q for the quarter ended march 31, ... 5 notes to consolidated financial statements...

Documents