Operating income increased $12 million to $45 million in the six months ended
June 30, 2013 compared with $33 million in the six months ended June 30, 2012,
reflecting $7 million from favorable sales volume and product mix changes, the
higher selling prices and $3 million in lower SGA&R costs, offset in part by $4
million in higher manufacturing costs and a $1 million increase in other costs.
Corporate expense was $66 million in the six months ended June 30, 2013, which
included $13 million of amortization expense related to intangible assets. In
comparison, corporate expense was $57 million in the six months ended June 30,
2012, which included $13 million of amortization expense related to intangible
assets. The increase in 2013 was primarily due to a $21 million increase in an
environmental reserve for the costs to remediate a legacy non-operating site in
France. Following a detailed engineering study, we received estimates of the
costs of what will be a multi-year program to remediate the site to the
standards required by the regulatory authorities. Additionally, in the second
quarter of 2013, we reported a gain of $2 million related to an adjustment for a
legacy pension plan and lower costs associated with employee incentive programs
Certain functional and other expenses that are managed company-wide are
allocated to our segments. The portion of such costs allocated to the
Antioxidant business do not transfer directly under the Antioxidant Sale and are
anticipated to be eliminated in 2013. As such, in historic periods these costs
are shown as part of continuing operations in the corporate segment and not
included under earnings (loss) from discontinued operations, net of tax. These
costs approximate $6 million and $8 million for the six months ended June 30,
2013 and 2012, respectively.
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 United States Code ("Chapter 11") in the United
States Bankruptcy Court for the Southern District of New York (the "Bankruptcy
On August 8, 2010, our Canadian subsidiary, Chemtura Canada Co/Cie ("ChemturaCanada"), filed a voluntary petition for relief under Chapter 11. 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 the previously filed
Chapter 11 cases and appoint Chemtura Canada as the "foreign representative" for
the purposes of the Canadian Case. Such orders were granted on August 9, 2010.
On August 11, 2010, the Canadian Court entered an order recognizing the Chapter
11 cases as "foreign proceedings" under the CCAA.