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 our Consolidated Financial Statements and accompanying notes. Our estimates are based on historical experience and currently available information. Management's Discussion and Analysis of Financial Condition and Results of Operations and the Accounting Policies footnote in our 2012 Annual Report on Form 10-K describe the critical accounting estimates and 44 --------------------------------------------------------------------------------
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accounting policies used in the preparation of our Consolidated Financial Statements. Actual results could differ from management's estimates and assumptions. There have been no significant changes in our critical accounting estimates during the six months ended
2013 OUTLOOK We remain committed to our objective of creating a focused portfolio of global specialty chemical businesses that provide sustainable competitive advantage and continued growth opportunities through superior innovation, reliability and applied science, making
Chemturaindispensable to its stakeholders. Through our portfolio improvement strategies, in 2013 Chemturawill be smaller, but will improve its operating margins and have a portfolio of strongly differentiated product lines based on proprietary chemical technologies that offer superior organic revenue growth and be positioned to exploit secular industry growth trends in all regions of the globe. Our non-industrial segments, Chemtura AgroSolutions and Consumer Products segments delivered year-over-year improvement in the first half of 2013. While both segments saw their seasonal peak performance in the second quarter of 2013, they continue to target year-on-year improvement in the second half of 2013. Our Industrial Performance segment delivered growth in net sales and operating income in the first half of 2013 and anticipates repeating this performance in the second half of the year. The petroleum additives product line will continue to lead improvement offsetting the impact of lower demand for urethanes products from mining and electronic applications as well as continuing weakness in Europe. Our Industrial Engineered segment continues to face tougher demand conditions. After the decline in demand for flame retardants used in insulation foams in the first quarter of 2013, and the related softening in price, demand and pricing stabilized at these lower levels in the second quarter. Demand for flame retardants has shown modest sequential improvement over the last three quarters, but remained lower in the second quarter of 2013 than in the second quarter of 2012. Our customer's visibility of demand trends in the second half of 2013 limits their ability to project what degree of improvement will occur compared to the first half of 2013. We anticipate continued strength in demand for clear brine fluids used in oil and gas production applications and for the intermediates we produce for pharmaceutical and agrochemical applications and continued development of mercury control applications.