Press Release
Contacts:
Investors: |
| Stephen Forsyth |
| 203-573-3863 |
Media: |
| Mary Ann Dunnell |
| 203-573-3034 |
Chemtura Reports 2007 Second Quarter Results
MIDDLEBURY, CT — August 2, 2007 - Chemtura Corporation (NYSE: CEM; the “Company”) reported a net loss of $2 million, or $0.01 per share, for the second quarter of 2007 and net earnings on a non-GAAP basis of $43 million, or $0.18 per share.
The net loss for the quarter includes a loss from continuing operations of $30 million, or $0.12 per share; income from discontinued operations of $3 million, or $0.01 per share; and gain on the sale of a discontinued operations of $25 million, or $0.10 per share. On a non-GAAP basis, net earnings include income from continuing operations of $40 million, or $0.17 per share and income from discontinued operations of $3 million, or $0.01 per share.
The discussion below includes information on both a GAAP and non-GAAP basis. The Company has presented the non-GAAP financial information because management uses non-GAAP information internally to evaluate and manage the performance of the Company’s operations, and believes that the non-GAAP financial information provides useful information to investors. A reconciliation of the GAAP and non-GAAP financial information has been provided in the supplemental schedules included in this release.
The following is a summary of the second quarter results:
(In millions, except per share data) |
| Second quarter |
| ||||||
|
| 2007 |
| 2006 |
| % change |
| ||
Net sales |
| $ | 1,059 |
| $ | 971 |
| 9 | % |
Operating profit |
| $ | 5 |
| $ | 47 |
| (89 | %) |
Loss from continuing operations |
| $ | (30 | ) | $ | (3 | ) | NM |
|
Loss per share from continuing operations |
| $ | (0.12 | ) | $ | (0.02 | ) | NM |
|
Earnings per share from discontinued operations |
| $ | 0.01 |
| $ | 0.02 |
| (50 | %) |
Per share gain from sale of a discontinued operation |
| $ | 0.10 |
| $ | — |
| NM |
|
Net loss per share |
| $ | (0.01 | ) | $ | — |
| NM |
|
NM = Not Meaningful
1
The following is a summary of the second quarter ended June 30, 2007 results on a non-GAAP basis as compared with the same quarter in 2006 results on a non-GAAP basis.
(In millions, except per share data) |
| Second quarter |
| ||||||
|
| 2007 |
| 2006 |
| % change |
| ||
Net sales |
| $ | 1,059 |
| $ | 971 |
| 9 | % |
Operating profit |
| $ | 93 |
| $ | 102 |
| (9 | %) |
Earnings from continuing operations |
| $ | 40 |
| $ | 46 |
| (13 | %) |
Earnings per share from continuing operations |
| $ | 0.17 |
| $ | 0.19 |
| (11 | %) |
Earnings per share from discontinued operations |
| $ | 0.01 |
| $ | 0.02 |
| (50 | %) |
Net earnings per share |
| $ | 0.18 |
| $ | 0.21 |
| (14 | %) |
“Our second quarter results reflect numerous positives: record earnings for Consumer Products despite a slowdown at the end of the quarter; outstanding performance for Crop Protection despite legacy bad debt issues in Latin America related to prior growing seasons; continued sequential improvement in Polymer Additives; and excellent performance from our Kaufman Holdings (“Kaufman”) businesses in the first full quarter since we acquired them at the end of January,” said Robert Wood, Chairman and CEO.
“The impact of the bad debt provision, the transitional impacts from the carve-out and sale of the EPDM business, and the higher than normal non-GAAP tax provision rate served to reduce our non-GAAP earnings in the quarter by more than $0.02 per share.
“As we indicated in the first quarter conference call, we expected to begin to see the benefits of our efforts over the last three years. This quarter’s results are the first evidence of this impact. Our focus remains on managing those elements of our business we can control. The corporate restructuring initiatives in the quarter are reducing our cost base and realigning our organization to improve execution. We have started the process of realigning our manufacturing footprint. Our portfolio reshaping continues with the important step of divesting the EPDM business completed in June. These actions are critical steps towards our goal of becoming a leaner, more focused enterprise.
“The focus on cost and effectiveness will remain our highest priority in the coming quarters. Despite raw material cost pressures, the third and fourth quarters are expected to provide us with the first consecutive year-on-year positive comparisons in many quarters.”
Second Quarter 2007 Business Segment Highlights
· Polymer Additives revenues were up 8% compared to the second quarter of 2006 despite some weakness in the electronics and building and construction industries. Non-GAAP operating income of $39 million was down from the second quarter of 2006 but was up again sequentially. Compared to the first quarter of 2007 non-GAAP operating income increased by 23% on a 7% increase in revenues as the Company continued its initiatives to improve the performance of certain of its polymer additive product lines. The improvement in the quarter was made despite the impact of continuing increases in raw material input costs, particularly tin and tallow.
2
· Performance Specialties revenues were up 35% compared to the second quarter of 2006 and operating income was up 24%. The Kaufman acquisition contributed approximately $49 million or 29% to the growth in revenues.
· Consumer Products revenues were approximately the same as the second quarter of 2006 but operating income was up 20%. Revenues exceeded prior years in April and May, but softened in late June with consumer demand slowing as the month progressed. Demand in July is tracking with our expectations.
· Crop Protection revenues were up 14% compared to the second quarter of 2006, primarily due to strong North American sales. Operating income was up 24% despite recording a provision for doubtful accounts from prior growing seasons in Latin America of $5 million. The bad debt provision in the second quarter of 2006 was $2 million.
Second Quarter 2007 Significant Transactions and Events
· During the second quarter of 2007, Chemtura initiated a company-wide restructuring plan in order to improve performance and accelerate growth. This plan includes the realignment of its business segments, streamlining of the organization, reevaluation of its manufacturing footprint and the redirection of efforts to focus on end-use markets. The Company has approved locations described below for closure or sale and is continuing to evaluate further rationalization of its manufacturing footprint. As of June 30, 2007, the Company identified approximately 600 position reductions and recorded a second quarter pre-tax charge for severance of $20 million related to these actions.
· On June 4, 2007, the Company formally announced its plan to close the antioxidant facilities at Pedrengo and Ravenna, Italy, and two intermediate chemical product lines at Catenoy, France. The actions, which are in addition to the restructuring plan mentioned above, impact approximately 190 employees. As a result of this plan, the Company recorded pre-tax charges of $32 million in the quarter ($5 million severance; $21 million additional depreciation expense; $2 million accelerated asset retirement obligations; and a $4 million asset impairment charge).
· On June 26, 2007, the Company announced a change in its segment presentation, and has included the revised presentation in this release.
· On June 29, 2007, the Company completed the sale of its EPDM business, the Celogen® foaming agents product line related to rubber chemicals, and its Geismar, Louisiana facility to Lion Copolymer, LLC, for cash proceeds of $137 million, plus $16 million in promissory notes. The Company reported a net of tax gain of $10 million ($25 million related to the sale of the EPDM business in discontinued operations and a loss of $15 million related to the sale of foaming agents in continuing operations). The Company utilized the cash proceeds to reduce debt incurred in the first quarter of 2007 for the purchase of Kaufman, repaying its revolver in full during the quarter. The Company continues to explore the sale of its remaining rubber chemicals product lines.
· On July 27, 2007 the Company announced that it will not renew the lease on its Oakville, Ontario facility, that it is exploring strategic options for Oakville and that it will consolidate certain of Oakville’s operations into other facilities. The Company also announced its plan to consolidate its Scarborough, Ontario facility into its West Hill, Ontario plant and to sell surplus land and office buildings at the West Hill facility.
· On July 31, 2007, the Company completed the sale of its organic peroxide business located in Marshall, Texas. As a result, the Company recorded a charge of $4 million.
· As of January 1, 2007, the Company’s worldwide employees approximated 6,380 (proforma for its Kaufman acquisition in the first quarter of 2007). The number of employees was reduced to
3
approximately 6,210 as of March 31, 2007 and further declined to approximately 5,740 as of June 30, 2007 reflecting the initial impact of the Company’s restructuring activities, the divestitures in the second quarter of 2007 and natural attrition. The number of employees was further reduced to 5,610 as of July 31, 2007 due to the sale of the organic peroxides business and restructuring actions. As of July 31, 2007, this represents a 12% reduction from the first of the year. Additional employment reductions are anticipated as the Company completes its announced restructuring actions.
Second Quarter Results
· Second quarter 2007 net sales of $1,059 million were 9 percent above the $971 million reported in the second quarter of 2006. $49 million of the increase came from the purchase of Kaufman, $26 million from increases in sales volume of the existing businesses and $13 million from favorable foreign currency translation.
· Gross profit increased $8 million in the second quarter of 2007 as compared with the same quarter last year. The margin increase is primarily due to a $10 million benefit from increased sales volume and changes in product mix, $8 million from the Kaufman acquisition, $2 million of favorable foreign currency translation and other increases of $16 million. These increases were partially offset by $24 million of higher raw material and energy costs and an increase of $4 million in accelerated asset retirement obligations.
· Operating profit reflected an increase of $25 million in facility closures, severance and related costs, $19 million increase in costs related to the change in the useful life of property, plant and equipment, $15 million due to a loss on sale of the foaming agents product line and $10 million increase in corporate expenses (including the impact of higher legal expenses in 2007 and of certain credits recorded in the second quarter of 2006), a $3 million quarter-over-quarter increase in provision for Latin American doubtful accounts related to the Crop Protection business and other costs of $9 million, offset by a $14 million decrease in antitrust costs and a reduction of $5 million in merger costs. Additionally in 2006, the Company reported a loss of $12 million related to the sale of the Industrial Water Additives business.
· The loss from continuing operations for the second quarter of 2007 was $30 million, or $0.12 per share, compared with a loss of $3 million, or $0.02 per share, for the second quarter of 2006. The decrease primarily reflects the $42 million decline in operating profit discussed above, a $2 million increase in income tax expense and other cost increases of $9 million, offset by $6 million in lower interest expense. Additionally, in 2006 the Company reported a $20 million loss on early extinguishment of debt.
· The higher GAAP income tax provision rate reflects the impact of the valuation allowance provided against the benefit of domestic tax losses.
· Discontinued operations in 2007 reflect the gain of $25 million (net of $13 million of tax) and earnings of $3 million (net of $2 million of tax) related to the sale of the EPDM business. Discontinued operations for the second quarter of 2006 reflect earnings from the EPDM business of $4 million (net of $2 million of tax) and reflect the cost of certain restructuring actions taken in anticipation of the sale.
Second Quarter Non-GAAP Results
· On a non-GAAP basis, second quarter 2007 operating profit was $93 million as compared with second quarter 2006 non-GAAP operating profit of $102 million.
4
· Non-GAAP earnings from continuing operations in 2007 and 2006 excludes charges of $70 million and $49 million, respectively, primarily related to facility closures, severance and related costs, antitrust costs, losses on sales of businesses, additional depreciation and a loss on early extinguishment of debt. The amounts associated with these charges are detailed on page 13 of this release.
· The non-GAAP effective tax rate of 38% reflects some higher taxes related to the divested businesses.
· Non-GAAP earnings from discontinued operations for the second quarter of 2007 and 2006 include earnings from the EPDM business of $3 million and $4 million, respectively.
Second Quarter Earnings Q&A Teleconference
Copies of this release as well as informational slides will be available on the Investor Relations section of the Company’s website at www.chemtura.com. The Company will host a teleconference to review these results on Friday, August 3, at 9:00 a.m. EDT. Interested parties are asked to dial in approximately 10 minutes prior to the start time at (913) 981-5581. Replay of the call will be available for two weeks starting at 12:00 p.m. EDT on August 3. To access the replay, call (719) 457-0820 and enter access code 6534768.
Live Internet access to the 2007 second quarter conference call will be available through the Investor Relations section of the Company’s website. If you need further information pertaining to the call, please contact Ann Marie Biondo at (203) 573-2929.
Chemtura Corporation, with 2006 sales of $3.5 billion, is a global manufacturer and marketer of specialty chemicals, crop protection and pool, spa and home care products. Additional information concerning Chemtura is available at www.chemtura.com.
###
Non-GAAP Financial Measures
The information presented in this press release and in the attached financial tables includes financial measures that are not calculated or presented in accordance with Generally Accepted Accounting Principles in the United States (GAAP). These non-GAAP financial measures consist of adjusted results of operations of the Company that exclude certain expenses, gains and losses that may not be indicative of the core operations of the Company. Excluded items include facility closures, severance and related costs, antitrust costs, Merger costs, increased depreciation due to the change in useful life of assets, unusual and non-recurring settlements, and the accelerated recognition of asset retirement obligations. In addition to the non-GAAP financial measures discussed above, the Company has applied a non-GAAP effective income tax rate to our non-GAAP income before taxes. This rate incorporates an assumed mix of foreign earnings and taxes, permanent book-tax differences, various tax planning strategies and other assumptions. Reconciliations of these non-GAAP financial measures to their most directly comparable GAAP financial measures are provided in the attached financial tables. The Company believes that such non-GAAP financial measures provide useful information to investors and may assist them in evaluating the Company’s underlying performance and identifying operating trends. In addition, management uses these non-GAAP financial measures internally to allocate resources and evaluate the performance of the Company’s operations. While the Company believes that such measures are useful in evaluating the Company’s performance, investors should not consider them to be a substitute for financial measures prepared in accordance with GAAP. In addition, these non-GAAP financial measures may differ from similarly titled non-GAAP financial
5
measures used by other companies and do not provide a comparable view of the Company’s performance relative to other companies in similar industries.
Forward-Looking Statement
This document includes forward-looking statements. These forward-looking statements are identified by terms and phrases such as “anticipate,” “believe,” “intend,” “estimate,” “expect,” “continue,” “should,” “could,” “may,” “plan,” “project,” “predict,” “will” and similar expressions and include references to assumptions and relate to our future prospects, developments and business strategies.
Factors that could cause our actual results to differ materially from those expressed or implied in such forward-looking statements include, but are not limited to:
· General economic conditions.
· Significant international operations and interests.
· The ability to obtain increases in selling prices to offset increases in raw material and energy costs.
· The ability to retain sales volumes in the event of increasing selling prices.
· The ability to absorb fixed cost overhead in the event of lower volumes.
· Pension and other post-retirement benefit plan assumptions.
· The ability to continue to recover lost volume in our antioxidants products or execute other portions of the recovery plan for other businesses within Polymer Additives.
· The ability to sustain profitability in our Crop Protection business due to new generic competition, or the failure to secure new products and technology.
· The ability to sell methyl bromide due to regulatory restrictions.
· Energy and raw material prices, availability and quality.
· Production capacity.
· Changes in interest rates and foreign currency exchange rates.
· Changes in technology, market demand and customer requirements.
· The enactment of more stringent environmental laws and regulations.
· The ability to realize expected cost savings under our restructuring plans, Six Sigma and Lean manufacturing initiatives.
· The ability to successfully execute our portfolio divestiture plan.
· The ability to reduce our indebtedness levels.
· The ability to recover our deferred tax assets.
· The ability to remain compliant with our debt covenants or obtain necessary waivers.
· Other risks and uncertainties detailed in Item 1A.Risk Factors or in our filings with the Securities and Exchange Commission.
These statements are based on the Company’s estimates and assumptions and on currently available information. The forward-looking statements include information concerning the Company’s possible or assumed future results of operations, and the Company’s actual results may differ significantly from the results discussed. Forward-looking information is intended to reflect opinions as of the date this press release was issued and such information will not necessarily be updated by the Company.
6
CHEMTURA CORPORATION
Index of Financial Statements and Schedules
| Page | |
|
|
|
Financial Statements |
|
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|
|
|
Consolidated Statements of Operations (Unaudited) - Quarter and Six Months ended June 30, 2007 and 2006 |
| 8 |
|
|
|
Consolidated Balance Sheets - June 30, 2007 (Unaudited) and December 31, 2006 |
| 9 |
|
|
|
Condensed Consolidated Statements of Cash Flows (Unaudited) - Six Months ended June 30, 2007 and 2006 |
| 10 |
|
|
|
Segment Net Sales and Operating Profit (Unaudited) - Quarter and Six Months ended June 30, 2007 and 2006 |
| 11 |
|
|
|
Supplemental Schedules |
|
|
|
|
|
Major Factors Affecting Net Sales and Operating Results (Unaudited) - Quarter and Six Months ended June 30, 2007 versus 2006 |
| 12 |
|
|
|
Non-GAAP Consolidated Statements of Operations (Unaudited) - Quarter ended June 30, 2007 and 2006 |
| 13 |
|
|
|
Non-GAAP Consolidated Statements of Operations (Unaudited) - Six months ended June 30, 2007 and 2006 |
| 14 |
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|
Non-GAAP Segment Net Sales and Operating Profit (Unaudited) - Quarter ended June 30, 2007 and 2006 |
| 15 |
|
|
|
Non-GAAP Segment Net Sales and Operating Profit (Unaudited) - Six months ended June 30, 2007 and 2006 |
| 16 |
7
CHEMTURA CORPORATION
Consolidated Statements of Operations (Unaudited)
(In millions, except per share data)
|
| Quarter Ended June 30, |
| Six Months Ended June 30, |
| ||||||||
|
| 2007 |
| 2006 |
| 2007 |
| 2006 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Net sales |
| $ | 1,059 |
| $ | 971 |
| $ | 1,968 |
| $ | 1,842 |
|
|
|
|
|
|
|
|
|
|
| ||||
Cost of products sold |
| 793 |
| 713 |
| 1,488 |
| 1,349 |
| ||||
Selling, general and administrative |
| 114 |
| 98 |
| 217 |
| 199 |
| ||||
Depreciation and amortization |
| 71 |
| 44 |
| 134 |
| 94 |
| ||||
Research and development |
| 15 |
| 18 |
| 32 |
| 32 |
| ||||
Facility closures, severance and related costs |
| 22 |
| (3 | ) | 25 |
| (3 | ) | ||||
Antitrust costs |
| 18 |
| 32 |
| 30 |
| 45 |
| ||||
Merger costs |
| — |
| 5 |
| — |
| 15 |
| ||||
Loss on sale of businesses, net |
| 15 |
| 12 |
| 15 |
| 12 |
| ||||
Impairment of long-lived assets |
| 7 |
| 6 |
| 7 |
| 6 |
| ||||
Equity income |
| (1 | ) | (1 | ) | (1 | ) | (1 | ) | ||||
|
|
|
|
|
|
|
|
|
| ||||
Operating profit |
| 5 |
| 47 |
| 21 |
| 94 |
| ||||
Interest expense |
| 23 |
| 29 |
| 46 |
| 58 |
| ||||
Loss on early extinguishment of debt |
| — |
| 20 |
| — |
| 20 |
| ||||
Other expense (income), net |
| 6 |
| (3 | ) | 5 |
| (2 | ) | ||||
|
|
|
|
|
|
|
|
|
| ||||
(Loss) earnings from continuing operations before income taxes |
| (24 | ) | 1 |
| (30 | ) | 18 |
| ||||
Income tax expense |
| 6 |
| 4 |
| 18 |
| 10 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
(Loss) earnings from continuing operations |
| (30 | ) | (3 | ) | (48 | ) | 8 |
| ||||
Earnings from discontinued operations |
| 3 |
| 4 |
| 6 |
| 6 |
| ||||
Gain on sale of discontinued operations |
| 25 |
| — |
| 27 |
| — |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Net (loss) earnings |
| $ | (2 | ) | $ | 1 |
| $ | (15 | ) | $ | 14 |
|
|
|
|
|
|
|
|
|
|
| ||||
Basic (loss) earnings per common share: |
|
|
|
|
|
|
|
|
| ||||
(Loss) earnings from continuing operations |
| $ | (0.12 | ) | $ | (0.02 | ) | $ | (0.20 | ) | $ | 0.03 |
|
Earnings from discontinued operations |
| 0.01 |
| 0.02 |
| 0.03 |
| 0.03 |
| ||||
Gain on sale of discontinued operations |
| 0.10 |
| — |
| 0.11 |
| — |
| ||||
Net (loss) earnings |
| $ | (0.01 | ) | $ | — |
| $ | (0.06 | ) | $ | 0.06 |
|
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| ||||
Diluted (loss) earnings per common share: |
|
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|
|
|
| ||||
(Loss) earnings from continuing operations |
| $ | (0.12 | ) | $ | (0.02 | ) | $ | (0.20 | ) | $ | 0.03 |
|
Earnings from discontinued operations |
| 0.01 |
| 0.02 |
| 0.03 |
| 0.03 |
| ||||
Gain on sale of discontinued operations |
| 0.10 |
| — |
| 0.11 |
| — |
| ||||
Net (loss) earnings |
| $ | (0.01 | ) | $ | — |
| $ | (0.06 | ) | $ | 0.06 |
|
|
|
|
|
|
|
|
|
|
| ||||
Weighted average shares outstanding - basic |
| 241.4 |
| 240.5 |
| 241.2 |
| 240.3 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Weighted average shares outstanding - diluted |
| 241.4 |
| 240.5 |
| 241.2 |
| 241.3 |
| ||||
8
CHEMTURA CORPORATION
Consolidated Balance Sheets
(In millions of dollars)
|
| June 30, 2007 |
| December 31, |
| ||
|
| (Unaudited) |
|
|
| ||
ASSETS |
|
|
|
|
| ||
CURRENT ASSETS |
|
|
|
|
| ||
Cash and cash equivalents |
| $ | 76 |
| $ | 95 |
|
Accounts receivable (a) |
| 453 |
| 342 |
| ||
Inventories |
| 684 |
| 660 |
| ||
Other current assets |
| 214 |
| 288 |
| ||
Total current assets |
| 1,427 |
| 1,385 |
| ||
|
|
|
|
|
| ||
NON-CURRENT ASSETS |
|
|
|
|
| ||
Property, plant and equipment, net |
| 1,077 |
| 1,147 |
| ||
Cost in excess of acquired net assets |
| 1,261 |
| 1,177 |
| ||
Intangible assets, net |
| 596 |
| 551 |
| ||
Other assets |
| 134 |
| 139 |
| ||
|
|
|
|
|
| ||
|
| $ | 4,495 |
| $ | 4,399 |
|
|
|
|
|
|
| ||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
| ||
CURRENT LIABILITIES |
|
|
|
|
| ||
Short-term borrowings |
| $ | 81 |
| $ | 48 |
|
Accounts payable |
| 337 |
| 285 |
| ||
Accrued expenses (b) |
| 394 |
| 461 |
| ||
Income taxes payable |
| 30 |
| 94 |
| ||
Total current liabilities |
| 842 |
| 888 |
| ||
|
|
|
|
|
| ||
NON-CURRENT LIABILITIES |
|
|
|
|
| ||
Long-term debt |
| 1,062 |
| 1,063 |
| ||
Pension and post-retirement health care liabilities |
| 437 |
| 440 |
| ||
Other liabilities (c) |
| 430 |
| 329 |
| ||
|
|
|
|
|
| ||
STOCKHOLDERS’ EQUITY |
|
|
|
|
| ||
Common stock |
| 3 |
| 3 |
| ||
Additional paid-in capital |
| 3,019 |
| 3,005 |
| ||
Accumulated deficit |
| (1,167 | ) | (1,128 | ) | ||
Accumulated other comprehensive loss |
| 36 |
| (34 | ) | ||
Treasury stock at cost |
| (167 | ) | (167 | ) | ||
Total stockholders’ equity |
| 1,724 |
| 1,679 |
| ||
|
|
|
|
|
| ||
|
| $ | 4,495 |
| $ | 4,399 |
|
(a) |
| The increase in accounts receivable is primarily due to the seasonality of business in the Consumer Products and Crop Protection businesses, improved sales volume and increased pricing in the Polymer Additives business and the acquisition of Kaufman in 2007. Also, included in the Accounts Receivable balance is the sale of receivables under the Company’s accounts receivable securitization programs of $306 million and $279 million at June 30, 2007 and December 31, 2006, respectively. |
|
|
|
(b) |
| The decrease in accrued expenses is primarily due to antitrust payments made in February 2007. |
|
|
|
(c) |
| The increase in other liabilities is primarily due to an increase in non-current deferred tax liabilities. The increase in the non-current deferred tax liabilities is primarily due to the acquisition of Kaufman and due to the utilization of net operating losses and foreign tax credits. |
9
CHEMTURA CORPORATION
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In millions of dollars)
|
| Six Months Ended June 30, |
| ||||
Increase (decrease) to cash |
| 2007 |
| 2006 |
| ||
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
| ||
Net (loss) earnings |
| $ | (15 | ) | $ | 14 |
|
Adjustments to reconcile net (loss) earnings to net cash provided by operations: |
|
|
|
|
| ||
Loss on sale of businesses, net |
| 15 |
| 12 |
| ||
Gain on sale of discontinued operations |
| (27 | ) | — |
| ||
Impairment of long-lived assets |
| 7 |
| 6 |
| ||
Loss on early extinguishment of debt |
| — |
| 20 |
| ||
Depreciation and amortization |
| 138 |
| 97 |
| ||
Stock-based compensation expense |
| 5 |
| 7 |
| ||
Equity income |
| (1 | ) | (3 | ) | ||
Changes in assets and liabilities, net: |
| (75 | ) | 18 |
| ||
Net cash provided by operations |
| 47 |
| 171 |
| ||
|
|
|
|
|
| ||
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
| ||
Net proceeds from divestments |
| 132 |
| 117 |
| ||
Payments for acquisitions, net of cash acquired |
| (164 | ) | (7 | ) | ||
Merger transaction costs paid |
| — |
| (8 | ) | ||
Capital expenditures |
| (46 | ) | (48 | ) | ||
Net cash (used in) provided by investing activities |
| (78 | ) | 54 |
| ||
|
|
|
|
|
| ||
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
| ||
Payments on credit facility, net |
| — |
| (389 | ) | ||
Proceeds from long term borrowings |
| — |
| 497 |
| ||
Payments on long term borrowings |
| — |
| (165 | ) | ||
Proceeds from (payments on) short term borrowings |
| 31 |
| (48 | ) | ||
Premium paid on early extinguishment of debt |
| — |
| (16 | ) | ||
Payments for debt issuance costs |
| — |
| (5 | ) | ||
Dividends paid |
| (24 | ) | (24 | ) | ||
Repayment of life insurance policy loan |
| — |
| (10 | ) | ||
Proceeds from exercise of stock options |
| 4 |
| 3 |
| ||
Other financing activities |
| — |
| (2 | ) | ||
Net cash provided by (used in) financing activities |
| 11 |
| (159 | ) | ||
|
|
|
|
|
| ||
CASH |
|
|
|
|
| ||
Effect of exchange rates on cash and cash equivalents |
| 1 |
| 4 |
| ||
|
|
|
|
|
| ||
Change in cash and cash equivalents |
| (19 | ) | 70 |
| ||
Cash and cash equivalents at beginning of period |
| 95 |
| 139 |
| ||
|
|
|
|
|
| ||
Cash and cash equivalents at end of period |
| $ | 76 |
| $ | 209 |
|
10
CHEMTURA CORPORATION
Segment Net Sales and Operating Profit (Unaudited)
(In millions of dollars)
|
| Quarter Ended June 30, |
| Six Months Ended June 30, |
| ||||||||
|
| 2007 |
| 2006 |
| 2007 |
| 2006 |
| ||||
NET SALES |
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Polymer Additives |
| $ | 475 |
| $ | 439 |
| $ | 919 |
| $ | 862 |
|
Performance Specialties |
| 232 |
| 171 |
| 443 |
| 343 |
| ||||
Consumer Products |
| 201 |
| 204 |
| 317 |
| 318 |
| ||||
Crop Protection |
| 97 |
| 86 |
| 178 |
| 164 |
| ||||
Other |
| 54 |
| 71 |
| 111 |
| 155 |
| ||||
Total Net Sales |
| $ | 1,059 |
| $ | 971 |
| $ | 1,968 |
| $ | 1,842 |
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
| ||||
OPERATING PROFIT |
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Polymer Additives |
| $ | 38 |
| $ | 50 |
| $ | 69 |
| $ | 89 |
|
Performance Specialties |
| 34 |
| 28 |
| 68 |
| 59 |
| ||||
Consumer Products |
| 41 |
| 35 |
| 42 |
| 47 |
| ||||
Crop Protection |
| 20 |
| 16 |
| 41 |
| 36 |
| ||||
Other |
| — |
| 5 |
| 1 |
| 9 |
| ||||
|
| 133 |
| 134 |
| 221 |
| 240 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
General corporate expense, including amortization |
| (44 | ) | (32 | ) | (87 | ) | (65 | ) | ||||
Change in useful life of property, plant and equipment |
| (22 | ) | (3 | ) | (36 | ) | (6 | ) | ||||
Facility closures, severance and related costs |
| (22 | ) | 3 |
| (25 | ) | 3 |
| ||||
Antitrust costs |
| (18 | ) | (32 | ) | (30 | ) | (45 | ) | ||||
Merger costs |
| — |
| (5 | ) | — |
| (15 | ) | ||||
Loss on sale of businesses, net |
| (15 | ) | (12 | ) | (15 | ) | (12 | ) | ||||
Impairment of long-lived assets |
| (7 | ) | (6 | ) | (7 | ) | (6 | ) | ||||
Total Operating Profit |
| $ | 5 |
| $ | 47 |
| $ | 21 |
| $ | 94 |
|
11
CHEMTURA CORPORATION
Major Factors Affecting Net Sales and Operating Results (Unaudited)
Quarter and Six Months ended June 30, 2007 versus 2006
(In millions of dollars)
The following table summarizes the major factors contributing to the changes
in operating results versus the prior year:
|
| Quarter Ended June 30, |
| Six Months Ended June 30, |
| ||||||||
|
| Net |
| Pre-tax |
| Net |
| Pre-tax |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
2006 |
| $ | 971 |
| $ | 1 |
| $ | 1,842 |
| $ | 18 |
|
|
|
|
|
|
|
|
|
|
| ||||
2006 Change in useful life of property, plant and equipment |
| — |
| 3 |
| — |
| 6 |
| ||||
2006 Favorable settlement of contractual matter |
| — |
| — |
| — |
| (4 | ) | ||||
2006 Facility closures, severance and related costs |
| — |
| (3 | ) | — |
| (3 | ) | ||||
2006 Antitrust costs |
| — |
| 32 |
| — |
| 45 |
| ||||
2006 Merger expense |
| — |
| 5 |
| — |
| 15 |
| ||||
2006 Loss on sale of Industrial Water |
| — |
| 12 |
| — |
| 12 |
| ||||
2006 Asset Impairment |
| — |
| 6 |
| — |
| 6 |
| ||||
2006 Loss on early extinguishment of debt |
| — |
| 20 |
| — |
| 20 |
| ||||
2006 Interest income on tax settlement |
| — |
| (4 | ) | — |
| (4 | ) | ||||
|
| 971 |
| 72 |
| 1,842 |
| 111 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Higher selling prices |
| 2 |
| 2 |
| 12 |
| 12 |
| ||||
Increased unit volume |
| 26 |
| 10 |
| 15 |
| 8 |
| ||||
Foreign currency impact |
| 13 |
| 2 |
| 28 |
| 1 |
| ||||
Industrial Water Additives divested business |
| (2 | ) | — |
| (13 | ) | (2 | ) | ||||
Kaufman acquisition |
| 49 |
| 5 |
| 82 |
| 6 |
| ||||
Manufacturing variances net of cost savings |
| — |
| (3 | ) | — |
| (1 | ) | ||||
Higher raw materials/energy costs |
| — |
| (24 | ) | — |
| (51 | ) | ||||
Higher A/R securitization fees |
| — |
| (1 | ) | — |
| (4 | ) | ||||
Lower interest expense |
| — |
| 6 |
| — |
| 12 |
| ||||
Other |
| — |
| (5 | ) | 2 |
| (2 | ) | ||||
|
| 1,059 |
| 64 |
| 1,968 |
| 90 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
2007 Change in useful life of property, plant and equipment |
| — |
| (22 | ) | — |
| (36 | ) | ||||
2007 Accelerated recognition of asset retirement obligation |
| — |
| (4 | ) | — |
| (7 | ) | ||||
2007 Facility closures, severance and related costs |
| — |
| (22 | ) | — |
| (25 | ) | ||||
2007 Antitrust costs |
| — |
| (18 | ) | — |
| (30 | ) | ||||
2007 Merger expense |
| — |
| — |
| — |
| — |
| ||||
2007 Loss on sale of businesses, net |
| — |
| (15 | ) | — |
| (15 | ) | ||||
2007 Asset Impairment |
| — |
| (7 | ) | — |
| (7 | ) | ||||
2007 |
| $ | 1,059 |
| $ | (24 | ) | $ | 1,968 |
| $ | (30 | ) |
12
CHEMTURA CORPORATION
Non-GAAP Consolidated Statement of Operations (Unaudited)
(In millions, except per share data)
|
| Quarter Ended June 30, 2007 |
| Quarter Ended June 30, 2006 |
| ||||||||||||||
|
|
|
| Non-GAAP |
|
|
|
|
| Non-GAAP |
|
|
| ||||||
|
| GAAP |
| Adj. |
| Non-GAAP |
| GAAP |
| Adj. |
| Non-GAAP |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net sales |
| $ | 1,059 |
| $ | — |
| $ | 1,059 |
| $ | 971 |
| $ | — |
| $ | 971 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Cost of products sold |
| 793 |
| (4 | ) | 789 |
| 713 |
| — |
| 713 |
| ||||||
Selling, general and administrative |
| 114 |
| — |
| 114 |
| 98 |
| — |
| 98 |
| ||||||
Depreciation and amortization |
| 71 |
| (22 | ) | 49 |
| 44 |
| (3 | ) | 41 |
| ||||||
Research and development |
| 15 |
| — |
| 15 |
| 18 |
| — |
| 18 |
| ||||||
Facility closures, severance and related costs |
| 22 |
| (22 | ) | — |
| (3 | ) | 3 |
| — |
| ||||||
Antitrust costs |
| 18 |
| (18 | ) | — |
| 32 |
| (32 | ) | — |
| ||||||
Merger costs |
| — |
| — |
| — |
| 5 |
| (5 | ) | — |
| ||||||
Loss on sale of businesses, net |
| 15 |
| (15 | ) | — |
| 12 |
| (12 | ) | — |
| ||||||
Impairment of long-lived assets |
| 7 |
| (7 | ) | — |
| 6 |
| (6 | ) | — |
| ||||||
Equity income |
| (1 | ) | — |
| (1 | ) | (1 | ) | — |
| (1 | ) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Operating profit |
| 5 |
| 88 |
| 93 |
| 47 |
| 55 |
| 102 |
| ||||||
Interest expense |
| 23 |
| — |
| 23 |
| 29 |
| — |
| 29 |
| ||||||
Loss on early extinguishment of debt |
| — |
| — |
| — |
| 20 |
| (20 | ) | — |
| ||||||
Other expense (income), net |
| 6 |
| — |
| 6 |
| (3 | ) | 4 |
| 1 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
(Loss) earnings from continuing operations before income taxes |
| (24 | ) | 88 |
| 64 |
| 1 |
| 71 |
| 72 |
| ||||||
Income tax (benefit) expense |
| 6 |
| 18 |
| 24 |
| 4 |
| 22 |
| 26 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
(Loss) earnings from continuing operations |
| (30 | ) | 70 |
| 40 |
| (3 | ) | 49 |
| 46 |
| ||||||
Earnings from discontinued operations |
| 3 |
| — |
| 3 |
| 4 |
| — |
| 4 |
| ||||||
Gain on sale of discontinued operations |
| 25 |
| (25 | ) | — |
| — |
| — |
| — |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net earnings |
| $ | (2 | ) | $ | 45 |
| $ | 43 |
| $ | 1 |
| $ | 49 |
| $ | 50 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Diluted earnings from continuing operations |
|
|
|
|
| $ | 0.17 |
|
|
|
|
| $ | 0.19 |
| ||||
Diluted earnings from discontinued operations |
|
|
|
|
| 0.01 |
|
|
|
|
| 0.02 |
| ||||||
Diluted net earnings |
|
|
|
|
| $ | 0.18 |
|
|
|
|
| $ | 0.21 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Diluted weighted average shares outstanding |
|
|
|
|
| 242.2 |
|
|
|
|
| 241.3 |
| ||||||
|
| Quarter |
| Quarter |
| ||
|
| Ended |
| Ended |
| ||
Non-GAAP Adjustments consist of the following: |
| June 30, 2007 |
| June 30, 2006 |
| ||
|
|
|
|
|
| ||
Change in useful life of property, plant and equipment |
| $ | 22 |
| $ | 3 |
|
Accelerated recognition of asset retirement obligation |
| 4 |
| — |
| ||
Facility closures, severance and related costs |
| 22 |
| (3 | ) | ||
Antitrust costs |
| 18 |
| 32 |
| ||
Merger costs |
| — |
| 5 |
| ||
Loss on sale of businesses, net |
| 15 |
| 12 |
| ||
Asset Impairment |
| 7 |
| 6 |
| ||
Loss on early extinguishment of debt |
| — |
| 20 |
| ||
Interest income on tax settlement |
| — |
| (4 | ) | ||
Pre-Tax |
| 88 |
| 71 |
| ||
|
|
|
|
|
| ||
Adjustment to apply a non-GAAP effective tax rate |
| 18 |
| 22 |
| ||
After-Tax |
| 70 |
| 49 |
| ||
|
|
|
|
|
| ||
Gain on sale of discontinued operations |
| (25 | ) | — |
| ||
Net Earnings |
| $ | 45 |
| $ | 49 |
|
13
CHEMTURA CORPORATION
Non-GAAP Consolidated Statement of Operations (Unaudited)
(In millions, except per share data)
|
| Six Months Ended June 30, 2007 |
| Six Months Ended June 30, 2006 |
| ||||||||||||||
|
|
|
| Non-GAAP |
|
|
|
|
| Non-GAAP |
|
|
| ||||||
|
| GAAP |
| Adj. |
| Non-GAAP |
| GAAP |
| Adj. |
| Non-GAAP |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net sales |
| $ | 1,968 |
| $ | — |
| $ | 1,968 |
| $ | 1,842 |
| $ | — |
| $ | 1,842 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Cost of products sold |
| 1,488 |
| (7 | ) | 1,481 |
| 1,349 |
| — |
| 1,349 |
| ||||||
Selling, general and administrative |
| 217 |
| — |
| 217 |
| 199 |
| 4 |
| 203 |
| ||||||
Depreciation and amortization |
| 134 |
| (36 | ) | 98 |
| 94 |
| (6 | ) | 88 |
| ||||||
Research and development |
| 32 |
| — |
| 32 |
| 32 |
| — |
| 32 |
| ||||||
Facility closures, severance and related costs |
| 25 |
| (25 | ) | — |
| (3 | ) | 3 |
| — |
| ||||||
Antitrust costs |
| 30 |
| (30 | ) | — |
| 45 |
| (45 | ) | — |
| ||||||
Merger costs |
| — |
| — |
| — |
| 15 |
| (15 | ) | — |
| ||||||
Loss on sale of businesses, net |
| 15 |
| (15 | ) | — |
| 12 |
| (12 | ) | — |
| ||||||
Impairment of long-lived assets |
| 7 |
| (7 | ) | — |
| 6 |
| (6 | ) | — |
| ||||||
Equity income |
| (1 | ) | — |
| (1 | ) | (1 | ) | — |
| (1 | ) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Operating profit |
| 21 |
| 120 |
| 141 |
| 94 |
| 77 |
| 171 |
| ||||||
Interest expense |
| 46 |
| — |
| 46 |
| 58 |
| — |
| 58 |
| ||||||
Loss on early extinguishment of debt |
| — |
| — |
| — |
| 20 |
| (20 | ) | — |
| ||||||
Other (income) expense, net |
| 5 |
| — |
| 5 |
| (2 | ) | 4 |
| 2 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
(Loss) earnings from continuing operations before income taxes |
| (30 | ) | 120 |
| 90 |
| 18 |
| 93 |
| 111 |
| ||||||
Income tax (benefit) expense |
| 18 |
| 15 |
| 33 |
| 10 |
| 30 |
| 40 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
(Loss) earnings from continuing operations |
| (48 | ) | 105 |
| 57 |
| 8 |
| 63 |
| 71 |
| ||||||
Earnings from discontinued operations |
| 6 |
| — |
| 6 |
| 6 |
| — |
| 6 |
| ||||||
Gain on sale of discontinued operations |
| 27 |
| (27 | ) | — |
| — |
| — |
| — |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net (loss) earnings |
| $ | (15 | ) | $ | 78 |
| $ | 63 |
| $ | 14 |
| $ | 63 |
| $ | 77 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Diluted earnings from continuing operations |
|
|
|
|
| $ | 0.24 |
|
|
|
|
| $ | 0.29 |
| ||||
Diluted earnings from discontinued operations |
|
|
|
|
| 0.02 |
|
|
|
|
| 0.03 |
| ||||||
Diluted net earnings |
|
|
|
|
| $ | 0.26 |
|
|
|
|
| $ | 0.32 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Diluted weighted average shares outstanding |
|
|
|
|
| 242.2 |
|
|
|
|
| 241.3 |
| ||||||
|
| Six Months |
| Six Months |
| ||
|
| Ended |
| Ended |
| ||
Non-GAAP Adjustments consist of the following: |
| June 30, 2007 |
| June 30, 2006 |
| ||
|
|
|
|
|
| ||
Change in useful life of property, plant and equipment |
| $ | 36 |
| $ | 6 |
|
Accelerated recognition of asset retirement obligation |
| 7 |
| — |
| ||
Favorable settlement on contractual matter |
| — |
| (4 | ) | ||
Facility closures, severance and related costs |
| 25 |
| (3 | ) | ||
Antitrust costs |
| 30 |
| 45 |
| ||
Merger costs |
| — |
| 15 |
| ||
Loss on sale of businesses, net |
| 15 |
| 12 |
| ||
Asset Impairment |
| 7 |
| 6 |
| ||
Loss on early extinguishment of debt |
| — |
| 20 |
| ||
Interest income on tax settlement |
| — |
| (4 | ) | ||
Pre-Tax |
| 120 |
| 93 |
| ||
|
|
|
|
|
| ||
Adjustment to apply a non-GAAP effective tax rate |
| 15 |
| 30 |
| ||
After-Tax |
| 105 |
| 63 |
| ||
|
|
|
|
|
| ||
Gain on sale of discontinued operations |
| (27 | ) | — |
| ||
Net Earnings |
| $ | 78 |
| $ | 63 |
|
14
CHEMTURA CORPORATION
Non-GAAP Segment Net Sales and Operating Profit (Unaudited)
(In millions of dollars)
| Quarter Ended June 30, 2007 |
| Quarter Ended June 30, 2006 |
| |||||||||||||||
|
|
|
| Non-GAAP |
|
|
|
|
| Non-GAAP |
|
|
| ||||||
|
| GAAP |
| Adjustments |
| Non-GAAP |
| GAAP |
| Adjustments |
| Non-GAAP |
| ||||||
NET SALES |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Polymer Additives |
| $ | 475 |
| $ | — |
| $ | 475 |
| $ | 439 |
| $ | — |
| $ | 439 |
|
Performance Specialties |
| 232 |
| — |
| 232 |
| 171 |
| — |
| 171 |
| ||||||
Consumer Products |
| 201 |
| — |
| 201 |
| 204 |
| — |
| 204 |
| ||||||
Crop Protection |
| 97 |
| — |
| 97 |
| 86 |
| — |
| 86 |
| ||||||
Other |
| 54 |
| — |
| 54 |
| 71 |
| — |
| 71 |
| ||||||
Total Net Sales |
| $ | 1,059 |
| $ | — |
| $ | 1,059 |
| $ | 971 |
| $ | — |
| $ | 971 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
OPERATING PROFIT |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Polymer Additives |
| $ | 38 |
| $ | 1 |
| $ | 39 |
| $ | 50 |
| $ | — |
| $ | 50 |
|
Performance Specialties |
| 34 |
| — |
| 34 |
| 28 |
| — |
| 28 |
| ||||||
Consumer Products |
| 41 |
| — |
| 41 |
| 35 |
| — |
| 35 |
| ||||||
Crop Protection |
| 20 |
| — |
| 20 |
| 16 |
| — |
| 16 |
| ||||||
Other |
| — |
| 1 |
| 1 |
| 5 |
| — |
| 5 |
| ||||||
|
| 133 |
| 2 |
| 135 |
| 134 |
| — |
| 134 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
General corporate expense, including amortization |
| (44 | ) | 2 |
| (42 | ) | (32 | ) | — |
| (32 | ) | ||||||
Change in useful life of property, plant and equipment |
| (22 | ) | 22 |
| — |
| (3 | ) | 3 |
| — |
| ||||||
Facility closures, severance and related cost |
| (22 | ) | 22 |
| — |
| 3 |
| (3 | ) | — |
| ||||||
Antitrust costs |
| (18 | ) | 18 |
| — |
| (32 | ) | 32 |
| — |
| ||||||
Merger costs |
| — |
| — |
| — |
| (5 | ) | 5 |
| — |
| ||||||
Loss on sale of businesses, net |
| (15 | ) | 15 |
| — |
| (12 | ) | 12 |
| — |
| ||||||
Impairment of long-lived assets |
| (7 | ) | 7 |
| — |
| (6 | ) | 6 |
| — |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total operating profit |
| $ | 5 |
| $ | 88 |
| $ | 93 |
| $ | 47 |
| $ | 55 |
| $ | 102 |
|
Non-GAAP Adjustments consist of the following: |
| Quarter |
| Quarter |
| ||
Change in useful life of property, plant and equipment |
| $ | 22 |
| $ | 3 |
|
Accelerated recognition of asset retirement obligation |
| 4 |
| — |
| ||
Facility closures, severance and related costs |
| 22 |
| (3 | ) | ||
Antitrust costs |
| 18 |
| 32 |
| ||
Merger costs |
| — |
| 5 |
| ||
Loss on sale of businesses, net |
| 15 |
| 12 |
| ||
Asset Impairment |
| 7 |
| 6 |
| ||
|
| $ | 88 |
| $ | 55 |
|
15
CHEMTURA CORPORATION
Non-GAAP Segment Net Sales and Operating Profit (Unaudited)
(In millions of dollars)
|
| Six Months Ended June 30, 2007 |
| Six Months Ended June 30, 2006 |
| ||||||||||||||
|
|
|
| Non-GAAP |
|
|
|
|
| Non-GAAP |
|
|
| ||||||
|
| GAAP |
| Adjustments |
| Non-GAAP |
| GAAP |
| Adjustments |
| Non-GAAP |
| ||||||
NET SALES |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Polymer Additives |
| $ | 919 |
| $ | — |
| $ | 919 |
| $ | 862 |
| $ | — |
| $ | 862 |
|
Performance Specialties |
| 443 |
| — |
| 443 |
| 343 |
| — |
| 343 |
| ||||||
Consumer Products |
| 317 |
| — |
| 317 |
| 318 |
| — |
| 318 |
| ||||||
Crop Protection |
| 178 |
| — |
| 178 |
| 164 |
| — |
| 164 |
| ||||||
Other |
| 111 |
| — |
| 111 |
| 155 |
| — |
| 155 |
| ||||||
Total Net Sales |
| $ | 1,968 |
| $ | — |
| $ | 1,968 |
| $ | 1,842 |
| $ | — |
| $ | 1,842 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
OPERATING PROFIT |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Polymer Additives |
| $ | 69 |
| $ | 1 |
| $ | 70 |
| $ | 89 |
| $ | — |
| $ | 89 |
|
Performance Specialties |
| 68 |
| — |
| 68 |
| 59 |
| — |
| 59 |
| ||||||
Consumer Products |
| 42 |
| — |
| 42 |
| 47 |
| — |
| 47 |
| ||||||
Crop Protection |
| 41 |
| — |
| 41 |
| 36 |
| — |
| 36 |
| ||||||
Other |
| 1 |
| 4 |
| 5 |
| 9 |
| — |
| 9 |
| ||||||
|
| 221 |
| 5 |
| 226 |
| 240 |
| — |
| 240 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
General corporate expense, including amortization |
| (87 | ) | 2 |
| (85 | ) | (65 | ) | (4 | ) | (69 | ) | ||||||
Change in useful life of property, plant and equipment |
| (36 | ) | 36 |
| — |
| (6 | ) | 6 |
| — |
| ||||||
Facility closures, severance and related cost |
| (25 | ) | 25 |
| — |
| 3 |
| (3 | ) | — |
| ||||||
Antitrust costs |
| (30 | ) | 30 |
| — |
| (45 | ) | 45 |
| — |
| ||||||
Merger costs |
| — |
| — |
| — |
| (15 | ) | 15 |
| — |
| ||||||
Loss on sale of businesses, net |
| (15 | ) | 15 |
| — |
| (12 | ) | 12 |
| — |
| ||||||
Impairment of long-lived assets |
| (7 | ) | 7 |
| — |
| (6 | ) | 6 |
| — |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total operating profit |
| $ | 21 |
| $ | 120 |
| $ | 141 |
| $ | 94 |
| $ | 77 |
| $ | 171 |
|
Non-GAAP Adjustments consist of the following: |
| Six Months |
| Six Months |
| ||
Change in useful life of property, plant and equipment |
| $ | 36 |
| $ | 6 |
|
Accelerated recognition of asset retirement obligation |
| 7 |
| — |
| ||
Favorable settlement on contractual matter |
| — |
| (4 | ) | ||
Facility closures, severance and related costs |
| 25 |
| (3 | ) | ||
Antitrust costs |
| 30 |
| 45 |
| ||
Merger costs |
| — |
| 15 |
| ||
Loss on sale of businesses, net |
| 15 |
| 12 |
| ||
Asset Impairment |
| 7 |
| 6 |
| ||
|
| $ | 120 |
| $ | 77 |
|
16