Chemtura Reports Second Quarter and Six Month 2006 Results.MIDDLEBURY Middlebury College is a liberal-arts college in Middlebury, Vermont, founded in 1800. Middlebury is the name of some places in the United States of America:
See: New York Stock Exchange : CEM CEM contagious equine metritis. CEM selective medium chocolate agar made with Eugon agar and 5% horse blood; used to cultivate Taylorella equigenitalis. ; the "Company") reported today earnings from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the for the second quarter of 2006 of $2.5 million, or $0.01 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share and non-GAAP earnings from continuing operations of $50.2 million or $0.21 per diluted share. Earnings from continuing operations includes $2.6 million ($1.7 million after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. ) related to the incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. stock-based compensation expense for the quarter ended June June: see month. 30, 2006, associated with the adoption of FASB Statement FASB Statement A standard set by the Financial Accounting Standards Board regarding a financial accounting and reporting method. Essentially, FASB statements determine the acceptable accounting practices that Certified Public Accountants use in reporting No. 123R, "Share Based Payment," on January January: see month. 1, 2006. Non-GAAP earnings from continuing operations for the second quarter of 2006 exclude pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta charges of $29.3 million for antitrust Antitrust The antitrust laws apply to virtually all industries and to every level of business, including manufacturing, transportation, distribution, and marketing. They prohibit a variety of practices that restrain trade. costs resulting primarily from settlement offers made to certain rubber chemicals claimants and legal fees associated with the antitrust investigations and civil lawsuits, a $19.5 million loss on early extinguishment The destruction or cancellation of a right, a power, a contract, or an estate. Extinguishment is sometimes confused with merger, though there is a clear distinction between them. of debt related to the retirement of the Company's Senior Floating Rate Notes due 2010, a $12.5 million loss on the sale of the Industrial Water Additives business, a $5.6 million asset impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charge related to the impairment of retained long-lived long-lived adj. 1. Having a long life: a long-lived aunt. 2. Lasting a long time; persistent: a long-lived rumor. 3. assets related to the Industrial Water Additives business, $4.7 million for merger costs related to the merger with Great Lakes Chemical Corporation Great Lakes Chemical Corporation is a chemical research, production, sales and distribution company that produces specialty chemicals used for polymers, fire suppressants and retardants, pool and spa water purification systems and various other applications. on July July: see month. 1, 2005 ("the Merger"), and $2.9 million for additional depreciation due to the change in the useful life of certain assets at one of the Company's manufacturing facilities. Also excluded from non-GAAP earnings are pre-tax credits of $3.3 million for facility closures, severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when and related costs due to the reversal reversal n. the decision of a court of appeal ruling that the judgment of a lower court was incorrect and is reversed. The result is that the lower court which tried the case is instructed to dismiss the original action, retry the case, or is ordered to change its of reserves primarily related to the Company's Tarrytown Tarrytown (târ`ētoun), village (1990 pop. 10,739), Westchester co., SE N.Y., a residential suburb of New York City, on the E bank of the Hudson opposite Nyack; settled in the 17th cent. by the Dutch, inc. 1870. , NY facility that were no longer deemed necessary and $4.0 million of interest income on a favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. tax settlement. The following is a summary of the second quarter and six month results on a GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). basis:
----------------------------------------------------------------------
(In millions) Second quarter Six months
----------------------------------------------------------------------
% %
2006 2005 change 2006 2005 change
----------------------------------------------------------------------
Net sales (a) $1,016.3 $602.3 69% $1,932.1 $1,192.1 62%
----------------------------------------------------------------------
Operating
profit (b) $68.1 $45.5 50% $114.5 $106.8 7%
----------------------------------------------------------------------
Earnings from
continuing
operations (b) $2.5 $10.2 (75%) $15.7 $28.4 (45%)
----------------------------------------------------------------------
Diluted earnings
per share from
continuing
operations $0.01 $0.09 (89%) $0.07 $0.24 (71%)
----------------------------------------------------------------------
The following is a summary of the second quarter and six month 2006 results on a non-GAAP basis as compared with the second quarter and six month 2005 results on a pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma and non-GAAP basis. The pro forma basis reflects the impact of the Merger as if it occurred on January 1, 2005, which has been set forth in the supplemental disclosures attached to this press release:
----------------------------------------------------------------------
(In millions) Second quarter Six months
----------------------------------------------------------------------
Pro forma % Pro forma %
2006 2005 change 2006 2005 change
----------------------------------------------------------------------
Net sales (a) $1,016.3 $1,093.7 (7%) $1,932.1 $2,103.9 (8%)
----------------------------------------------------------------------
Non-GAAP
operating
profit (b) $107.3 $126.4 (15%) $ 179.9 $211.4 (15%)
----------------------------------------------------------------------
Non-GAAP
earnings from
continuing
operations (b) $50.2 $61.2 (18%) $77.0 $94.3 (18%)
----------------------------------------------------------------------
Non-GAAP diluted
earnings per share
from continuing
operations $0.21 $0.26 (19%) $0.32 $0.40 (20%)
----------------------------------------------------------------------
(a) Includes $7.9 million and $48.3 million for the second quarter and
first six months of 2005, respectively, relating to the Polymer
Processing Equipment business that was deconsolidated in April
2005.
(b) Includes $2.6 million ($1.7 million after-tax) and $4.2 million
($2.6 million after-tax) for the second quarter and first six
months of 2006, respectively, which represents the effects of
implementing FASB Statement 123R for stock-based compensation.
"Actions we have taken have driven successive profit and cash flow improvement in each of the last two quarters. Some of our business platforms are exceeding expectations, but a few are still underperforming. We will continue to grow profitability in our stronger businesses and are vigorously vig·or·ous adj. 1. Strong, energetic, and active in mind or body; robust. See Synonyms at healthy. 2. Marked by or done with force and energy. See Synonyms at active. addressing the challenges in underperforming units," said Robert Robert, Henry Martyn 1837-1923. American army engineer and parliamentary authority. He designed the defenses for Washington, D.C., during the Civil War and later wrote Robert's Rules of Order (1876). Noun 1. L. Wood, president, chairman and chief executive officer. Actual and Pro Forma Net Sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight , Pro Forma Adjusted Non-GAAP Operating Profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. and Pro Forma Adjusted Earnings from Continuing Operations Second Quarter Results Second quarter 2006 net sales of $1,016.3 million were $414.0 million above second quarter 2005 net sales of $602.3 million. The increase was primarily due to $477.8 million in additional sales resulting from the Merger, partially offset by the exclusion exclusion /ex·clu·sion/ (eks-kloo´zhun) 1. a shutting out or elimination. 2. surgical isolation of a part, as of a segment of intestine, without removal from the body. of $7.9 million of sales due to the deconsolidation of the Company's Polymer polymer (pŏl`əmər), chemical compound with high molecular weight consisting of a number of structural units linked together by covalent bonds (see chemical bond). Processing Equipment business in April 2005. Second quarter 2006 net sales were $77.4 million or 7 percent less than second quarter 2005 pro forma net sales of $1,093.7 million. Of this decrease $100.8 million was attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to lower volume, $12.5 million due to the divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). of the Industrial Water Additives business in May 2006, $7.9 million due to the deconsolidation of the Polymer Processing Equipment business unit in April 2005, $2.8 million due to the net effect of other acquisitions and divestitures, and $3.9 million due to unfavorable foreign currency impact, partially offset by a $50.5 million increase in selling prices. Operating profit for the second quarter of 2006 was $68.1 million as compared to $45.5 million for the second quarter of 2005. On a non-GAAP basis, second quarter 2006 operating profit of $107.3 million was $19.1 million or 15% lower than second quarter 2005 pro forma non-GAAP operating profit of $126.4 million. The 15% decrease is comprised of raw material and energy cost increases of $19.5 million, lower volumes of $35.7 million, $13.5 million of unfavorable manufacturing costs resulting from lower production volumes, $5.0 million of higher freight The price or compensation paid for the transportation of goods by a carrier. Freight is also applied to the goods transported by such carriers. The liability of a carrier for freight damaged, lost, or destroyed during shipment is determined by contract, statute, or costs, $3.3 million of other strategic and corporate initiative costs, $2.4 million of unfavorable foreign currency translation, $2.3 million related to the incremental effect of stock option expense, $1.5 million of inventory write-offs, and other net increases in operating costs operating costs npl → gastos mpl operacionales , which were partially offset by selling price increases of $50.5 million and synergy The enhanced result of two or more people, groups or organizations working together. In other words, one and one equals three! It comes from the Greek "synergia," which means joint work and cooperative action. cost savings of $22.6 million. Second quarter 2005 GAAP earnings from continuing operations were $10.2 million or $0.09 per diluted share. Pro forma non-GAAP earnings from continuing operations for the second quarter of 2005 were $61.2 million or $0.26 per diluted share. Pro forma non-GAAP earnings from continuing operations for the second quarter of 2005 excludes pre-tax charges of $24.2 million for facility closures, severance and related costs, which included a charge of $20.3 million related to the closure of the Company's Tarrytown, NY facility, $3.3 million for antitrust costs and $8.7 million of merger costs resulting from the Merger. Six Month Results Net sales for the six months ended June 30, 2006 of $1,932.1 million were $740.0 million above net sales for the comparable period of 2005 of $1,192.1 million. The increase was primarily due to $855.6 million in additional sales resulting from the Merger, partially offset by the exclusion of $48.3 million of sales due to the deconsolidation of the Company's Polymer Processing Equipment business in April 2005. Six month 2006 net sales were $171.8 million or 8 percent less than six month 2005 pro forma net sales of $2,103.9 million. Of this decrease $179.3 million was attributable to lower volume, $12.5 million due to declines in volume and selling prices resulting from supply agreements related to the divestiture of the Industrial Water Additives business in May 2006, $48.3 million due to the deconsolidation of the Polymer Processing Equipment business unit in April 2005, $7.5 million due to the net effect of other acquisitions and divestitures, and $28.0 million due to unfavorable foreign currency impact, partially offset by a $103.8 million increase in selling prices. Operating profit for the six months ended June 30, 2006 was $114.5 million as compared to $106.8 million for the six months ended June 30, 2005. On a non-GAAP basis, six month 2006 operating profit of $179.9 million was $31.4 million or 15% lower than six month 2005 pro forma non-GAAP operating profit of $211.4 million. The 15% decrease is comprised of raw material and energy cost increases of $47.9 million, lower volumes of $57.7 million, $32.4 million of unfavorable manufacturing costs resulting from lower production volumes, $6.9 million of unfavorable foreign currency translation, $6.8 million of other strategic and corporate initiative costs, $6.1 million of higher freight costs, $4.2 million related to the incremental effect of stock option expense, $1.9 million of inventory write-offs, and other net increases in operating costs, which were partially offset by selling price increases of $103.8 million and synergy cost savings of $40.4 million. GAAP earnings from continuing operations for the six months ended June 30, 2006 were $15.7 million, or $0.07 per diluted share, compared to GAAP earnings from continuing operations of $28.4 million, or $0.24 per diluted share, for the six months ended June 30, 2005. Non-GAAP earnings from continuing operations for the first six months of 2006 of $77.0 million, or $0.32 per diluted share, exclude pre-tax charges of $42.1 million for antitrust costs resulting primarily from settlement offers made to certain rubber chemicals, plastic additives and urethanes claimants and legal fees associated with the antitrust investigations and civil lawsuits, a $19.5 million loss on early extinguishment of debt related to the retirement of the Company's Senior Floating Rate Notes due 2010, a $12.5 million loss on the sale of the Industrial Water Additives business, a $5.6 million asset impairment charge related to the impairment of retained long-lived assets related to the Industrial Water Additives business, $14.8 million for merger costs resulting from the Merger, and $5.8 million for additional depreciation due to the change in the useful life of certain assets at one of the Company's manufacturing facilities. Also excluded from non-GAAP earnings are pre-tax credits of $2.8 million for facility closures, severance and related costs, a $4.3 million favorable settlement of a contractual matter, and $4.0 million of interest income on a favorable tax settlement. Pro forma non-GAAP earnings from continuing operations for the first six months of 2005 of $94.3 million or $0.40 per diluted share exclude pre-tax charges of $25.3 million for facility closures, severance and related costs, which included a charge of $20.3 million related to the closure of the Company's Tarrytown, NY facility, $6.5 million for antitrust costs and $8.7 million of merger costs resulting from the Merger, partially offset by a pre-tax credit of $7.2 million for insurance recoveries related to a fire at the Company's Conyers, Georgia Conyers is a city in Rockdale County, Georgia, USA. As of the 2000 census, the city population was 10,689. Census estimates of 2005 indicate a population of 12,205. The city is the county seat of Rockdale County GR6. facility. The Company reported income tax expense for the first six months of 2006 of $13.5 million. The tax expense was impacted by a number of discrete A component or device that is separate and distinct and treated as a singular unit. items for the six month period primarily driven by the disposition Act of disposing; transferring to the care or possession of another. The parting with, alienation of, or giving up of property. The final settlement of a matter and, with reference to decisions announced by a court, a judge's ruling is commonly referred to as disposition, regardless of of the Industrial Water Additives business, offset by favorable settlements of certain tax examinations, reduction of valuation allowance on deferred tax assets and tax legislative changes. The effective rate of tax for the first six months of 2006 was 46%. Excluding discrete items, the effective rate of tax for the first six months of 2006 would have been 38.7%. The effective rate of tax for 2006 is forecast to be approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 40%, which reflects the impact of discrete items over a twelve month period. The non-GAAP effective rate of tax for 2006, which excludes nondeductible non·de·duct·i·ble adj. Not deductible, especially for income-tax purposes. Adj. 1. nondeductible - not allowable as a deduction deductible - acceptable as a deduction (especially as a tax deduction) antitrust costs, is forecast to be approximately 35%. Non-GAAP operating profit, non-GAAP earnings from continuing operations and non-GAAP earnings per share from continuing operations are considered non-GAAP financial measures. A reconciliation of the Company's GAAP operating profit to non-GAAP and pro forma operating profit and of the Company's GAAP earnings from continuing operations to non-GAAP and pro forma earnings pro forma earnings Income not necessarily calculated in accordance with generally accepted accounting principles. For example, a company might report pro forma earnings that exclude depreciation expense and nonrecurring expenses such as restructuring costs. from continuing operations is set forth in the supplemental disclosure attached to this press release. Second Quarter Earnings Q&A Teleconference The Company's second quarter earnings conference call will be held on August 3, 2006 at 8:00 a.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT . Interested parties are asked to dial in approximately 10 minutes prior to the start time at (703) 925-2608. Replay of the call will be available for two weeks starting at 11:30 a.m. on August 3, 2006. To access the replay, call (320) 365-3844 and enter access code 836374. Live internet access See how to access the Internet. to the conference call and informational slides will be available through the Investor Relations Investor relations The process by which the corporation communicates with its investors. section of the Company's Web site, www.chemtura.com. Chemtura Corporation, with pro forma 2005 sales of $3.9 billion, is a global manufacturer and marketer of specialty chemicals A Specialty chemical is a chemical produced for a specialized use. They are produced in lower volume than bulk chemicals, of which petrochemicals, made from oil feedstocks, are the most common. However, both are produced in a chemical plant. , crop protection and pool, spa and home care products. Additional information concerning Chemtura is available at www.chemtura.com. Supplemental Historical Pro Forma and Non-GAAP Financial Information Included in the Appendix appendix, small, worm-shaped blind tube, about 3 in. (7.6 cm) long and 1-4 in. to 1 in. (.64–2.54 cm) thick, projecting from the cecum (part of the large intestine) on the right side of the lower abdominal cavity. to this press release are supplemental financial tables containing unaudited pro forma and non-GAAP adjusted Consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: Statements of Earnings and Segment Operating Profit. The attached schedules reflect adjustments to previously furnished fur·nish tr.v. fur·nished, fur·nish·ing, fur·nish·es 1. To equip with what is needed, especially to provide furniture for. 2. information for changes in depreciation and amortization related to the Company's fair value adjustment of Great Lakes' property, plant and equipment and intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. . The schedules also reflect certain additional reclassifications to conform the former Great Lakes Great Lakes, group of five freshwater lakes, central North America, creating a natural border between the United States and Canada and forming the largest body of freshwater in the world, with a combined surface area of c.95,000 sq mi (246,050 sq km). presentation to the Company's presentation. Unaudited Pro Forma Financial Information The attached unaudited pro forma results of operations for the second quarter and six months of 2005 give effect to the Merger using the purchase method as if the Merger had been consummated con·sum·mate tr.v. con·sum·mat·ed, con·sum·mat·ing, con·sum·mates 1. a. To bring to completion or fruition; conclude: consummate a business transaction. b. as of January 1, 2005. The pro forma unaudited results of operations combine the historical results of operations of the Company and Great Lakes with the following adjustments:
(1) Pension - Represents a reduction in pension expense,
principally due to the elimination of the impact of
amortization of historical gains and losses from Great
Lakes' historical net periodic benefit cost.
(2) Interest - Represents the impact on interest expense of
amortization of the fair value adjustment to Great Lakes'
long-term debt.
(3) Purchase accounting depreciation - Represents the impact
on depreciation expense of the fair value adjustment and
change in the remaining useful life of Great Lakes'
property, plant and equipment.
(4) Amortization - Represents the impact on amortization
expense of the fair value adjustment and change in
remaining useful life of Great Lakes' intangible assets.
(5) Inventory accounting - Represents the impact of conforming
Great Lakes' inventory capitalization policy to a
consistently applied method utilized by the Company.
(6) Merger costs - Represents the reversal of costs incurred
by Great Lakes in connection with the Merger.
The unaudited pro forma results of operations do not give effect to synergies and cost savings. The pro forma results of operations do not purport To convey, imply, or profess; to have an appearance or effect. The purport of an instrument generally refers to its facial appearance or import, as distinguished from the tenor of an instrument, which means an exact copy or duplicate. PURPORT, pleading. to be indicative indicative: see mood. of what the actual results of operations would have been had the Merger been completed on the dates assumed or the results of operations that may be achieved in the future. Conformed Great Lakes The financial information presented as Conformed Great Lakes in the Appendix reflects reclassifications of historical Great Lakes' financial information to conform to Verb 1. conform to - satisfy a condition or restriction; "Does this paper meet the requirements for the degree?" fit, meet coordinate - be co-ordinated; "These activities coordinate well" the Company's presentation. 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 Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with Generally Accepted Accounting Principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. (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, asset impairments, increased depreciation due to the change in useful life of assets, unusual and non-recurring catastrophic events or settlements, loss on early extinguishment of debt, and gains and losses on disposition of business units. 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 Tax planning Devising strategies throughout the year in order to minimize tax liability, for example, by choosing a tax filing status that is most beneficial to the taxpayer. 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 To reserve a resource such as memory or disk. See memory allocation. 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 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 forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. Certain statements made in this release are forward-looking statements that involve risks and uncertainties, including, but not limited to, general economic conditions; significant international operations Internal Operations (I.O., IO or I/O) is a fictional American Intelligence Agency in Wildstorm comics. It was originally called International Operations. I.O. first appeared in WildC.A.T.S. volume 1 #1 (August, 1992) and was created by Brandon Choi and Jim Lee. and interests; the outcome and timing of antitrust investigations and related civil lawsuits to which Chemtura is subject; the ability to obtain increases in selling prices; the ability to retain sales volumes in the event of increasing selling prices; the ability to absorb absorb To offset sell orders or a new security offering with buy orders. fixed cost overhead in the event of lower volumes; pension and other post-retirement benefit plan assumptions; 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 Chemtura's cost-reduction initiatives; the ability to successfully execute To run a program, which causes the computer to carry out its instructions. See executable code, instruction and EXE file. execute - execution our portfolio divesture Di`ves´ture n. 1. Divestiture. plan; the amount of any additional earn-out Earn-out Refers to an additional payment in a merger or acquisition that is not part of the original acquisition cost, which is based on the acquired company's future earnings relative to a level determined by the merger agreement. payments from General Electric Company from the sale of the OrganoSilicones business; the ability to reduce Chemtura's debt levels; the ability to successfully integrate the Crompton Cromp·ton , Samuel 1753-1827. British inventor of the spinning mule (1779). and Great Lakes businesses, operations and information systems and achieve anticipated benefits from the Merger, including costs savings and synergies; and other risks and uncertainties detailed in filings with the Securities and Exchange Commission by Chemtura or its predecessor predecessor - parent companies. These statements are based on Chemtura's estimates and assumptions and on currently available information. The forward-looking statements include information concerning our possible or assumed future results of operations. Chemtura's actual results may differ significantly from the results discussed. Forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. information is intended to reflect opinions as of the date this release was issued and such information will not necessarily be updated by Chemtura.
CHEMTURA CORPORATION
Index of Financial Statements and Schedules
Financial Statements
Condensed Consolidated Statements of Earnings (Unaudited) -
Quarter and six months ended June 30, 2006 and 2005
Condensed Consolidated Balance Sheets - June 30, 2006
(Unaudited) and December 31, 2005
Condensed Consolidated Statements of Cash Flows (Unaudited) -
Six months ended June 30, 2006 and 2005
Segment Sales and Operating Profit (Unaudited) - Quarter ended
and six months ended June 30, 2006 and 2005
Supplemental Schedules
Major Factors Affecting Pro Forma Operating Results (Unaudited)
- Quarter ended June 30, 2006 and 2005
Non-GAAP Condensed Consolidated Statements of Earnings
(Unaudited) - Quarter and six months ended June 30, 2006 and
2005
Non-GAAP Condensed Consolidated Statement of Earnings
(Unaudited) - Quarter ended June 30, 2006
Non-GAAP Condensed Consolidated Statement of Earnings
(Unaudited) - Six months ended June 30, 2006
Non-GAAP Condensed Consolidated Statement of Earnings
(Unaudited) - Quarter ended June 30, 2005
Non-GAAP Condensed Consolidated Statement of Earnings
(Unaudited) - Six months ended June 30, 2005
Non-GAAP Segment Sales and Operating Profit (Unaudited) -
Quarter and six months ended June 30, 2006 and 2005
Non-GAAP Segment Sales and Operating Profit (Unaudited) -
Quarter ended June 30, 2006
Non-GAAP Segment Sales and Operating Profit (Unaudited) - Six
months ended June 30, 2006
Non-GAAP Segment Sales and Operating Profit (Unaudited) -
Quarter ended June 30, 2005
Non-GAAP Segment Sales and Operating Profit (Unaudited) - Six
months ended June 30, 2005
CHEMTURA CORPORATION
Condensed Consolidated Statements of Earnings (Unaudited)
(In thousands, except per share data)
Quarter Ended Six Months Ended
June 30, June 30,
------------------- ---------------------
2006 2005 2006 2005
---------- -------- ---------- ----------
Net sales $1,016,323 $602,329 $1,932,084 $1,192,059
Cost of products sold (*) 750,210 422,258 1,425,047 842,732
Selling, general and
administrative (*) 98,528 60,546 203,491 124,545
Depreciation and
amortization 45,607 27,737 97,318 57,863
Research and development 17,724 10,472 32,522 20,983
Equity income (197) (86) (471) (174)
Facility closures, severance
and related costs (3,280) 23,917 (2,776) 24,075
Antitrust costs 29,275 3,338 42,083 6,504
Merger costs 4,745 8,686 14,790 8,686
Impairment of long-lived
assets 5,610 - 5,610 -
---------- -------- ---------- ----------
Operating profit 68,101 45,461 114,470 106,845
Interest expense 29,397 24,309 58,470 48,715
Loss on early extinguishment
of debt 19,549 - 19,549 -
Other expense, net (*) 9,859 2,745 7,219 7,011
---------- -------- ---------- ----------
Earnings from continuing
operations before income
taxes 9,296 18,407 29,232 51,119
Income tax expense 6,789 8,233 13,520 22,716
---------- -------- ---------- ----------
Earnings from continuing
operations 2,507 10,174 15,712 28,403
Earnings from discontinued
operations - 450 - 2,656
Loss on sale of
discontinued operations - (27,622) - (27,622)
---------- -------- ---------- ----------
Net earnings (loss) $ 2,507 $(16,998)$ 15,712 $ 3,437
========== ======== ========== ==========
Basic earnings (loss) per
common share:
Earnings from continuing
operations $ 0.01 $ 0.09 $ 0.07 $ 0.24
Earnings from
discontinued operations - - - 0.02
Loss on sale of
discontinued operations - (0.23) - (0.23)
---------- -------- ---------- ----------
Net earnings (loss) $ 0.01 $ (0.14)$ 0.07 $ 0.03
========== ======== ========== ==========
Diluted earnings (loss) per
common share:
Earnings from continuing
operations $ 0.01 $ 0.09 $ 0.07 $ 0.24
Earnings from
discontinued operations - - - 0.02
Loss on sale of
discontinued operations - (0.23) - (0.23)
---------- -------- ---------- ----------
Net earnings (loss) $ 0.01 $ (0.14)$ 0.07 $ 0.03
========== ======== ========== ==========
Weighted average shares
outstanding - basic 240,489 117,769 240,308 117,267
========== ======== ========== ==========
Weighted average shares
outstanding - diluted 241,311 121,523 241,252 120,237
========== ======== ========== ==========
(*) Certain amounts relating to operations have been reclassified from
other expense, net to cost of products sold and selling, general
and administrative expense in 2005 to be comparable to the 2006
presentation.
CHEMTURA CORPORATION
Condensed Consolidated Balance Sheets
(In thousands of dollars)
June 30, December 31,
2006 2005
------------ ------------
ASSETS (Unaudited)
CURRENT ASSETS
Cash and cash equivalents $ 209,231 $ 138,556
Accounts receivable 423,084 547,857
Inventories 692,304 661,617
Other current assets 202,197 193,570
------------ ------------
Total current assets 1,526,816 1,541,600
------------ ------------
NON-CURRENT ASSETS
Property, plant and equipment, net 1,154,161 1,192,335
Cost in excess of acquired net assets 1,213,962 1,211,459
Intangible assets, net 579,873 620,677
Other assets 409,564 419,932
------------ ------------
$ 4,884,376 $ 4,986,003
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Short-term borrowings $ 14,878 $ 60,168
Accounts payable 313,785 310,485
Accrued expenses 450,792 444,336
Income taxes payable 131,158 160,700
------------ ------------
Total current liabilities 910,613 975,689
------------ ------------
NON-CURRENT LIABILITIES
Long-term debt 1,254,022 1,309,603
Pension and post-retirement health care
liabilities 576,446 618,539
Other liabilities 283,268 306,775
STOCKHOLDERS' EQUITY
Common stock 2,521 2,515
Additional paid-in capital 2,997,816 2,950,649
Accumulated deficit (878,190) (869,873)
Accumulated other comprehensive loss (95,278) (141,052)
Treasury stock at cost (166,842) (166,842)
------------ ------------
Total stockholders' equity 1,860,027 1,775,397
------------ ------------
$ 4,884,376 $ 4,986,003
============ ============
CHEMTURA CORPORATION
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands of dollars)
Six Months Ended
June 30,
--------------------
Increase (decrease) to cash 2006 2005
--------------------------- --------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings $ 15,712 $ 3,437
Adjustments to reconcile net earnings to net
cash provided by (used in) operations:
Loss on sale of Industrial Water Additives
business 12,475 -
Loss on sale of discontinued operations - 27,622
Impairment of long-lived assets 5,610 -
Loss on early extinguishment of debt 19,549 -
Depreciation and amortization 97,318 60,643
Equity income (3,445) (174)
Changes in assets and liabilities, net:
Accounts receivable (107,791) (77,192)
Accounts receivable - securitization 252,068 25,483
Inventories (22,336) (32,709)
Accounts payable (476) (16,206)
Deposit for civil antitrust settlement - (58,500)
Pension and post-retirement health care
liabilities (52,284) (28,018)
Other (45,334) (42,738)
--------- ---------
Net cash provided by (used in) operations 171,066 (138,352)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Net proceeds from divestments 116,668 74,100
Net payments for acquisitions (6,734) -
Merger transaction costs paid (8,315) (5,918)
Capital expenditures (48,458) (31,800)
Other investing activities 406 (56)
--------- ---------
Net cash provided by investing activities 53,567 36,326
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Payments on credit facility (388,608) -
Proceeds on long-term borrowings 497,261 -
Payments on long-term borrowings (164,750) (10,000)
Payments on short-term borrowings (48,211) (651)
Premium paid on early extinguishment of debt (15,882) -
Payments for debt issuance costs (5,470) (726)
Dividends paid (24,034) (11,692)
Repayment of life insurance policy loan (9,854) -
Proceeds from exercise of stock options 2,979 17,087
Other financing activities (1,820) 480
--------- ---------
Net cash used in financing activities (158,389) (5,502)
--------- ---------
CASH
Effect of exchange rates on cash 4,431 (2,134)
--------- ---------
Change in cash 70,675 (109,662)
Cash at beginning of period 138,556 158,700
--------- ---------
Cash at end of period $ 209,231 $ 49,038
========= =========
Note: The 2005 Condensed Consolidated Statements of Cash Flows have
not been adjusted to reflect discontinued operations and thus
includes the cash flows of the Refined Products business, which
was sold in June 2005.
CHEMTURA CORPORATION
Segment Sales and Operating Profit (Unaudited)
(In thousands of dollars)
Quarter Ended Six Months Ended
June 30, June 30,
-------------------- ----------------------
2006 2005 2006 2005
---------- -------- ---------- ----------
NET SALES
Plastic Additives $ 409,087 $209,982 $ 806,671 $ 418,269
Polymers 124,550 138,503 251,888 269,321
Specialty Additives 143,893 154,922 286,417 287,241
Crop Protection 100,812 90,977 189,422 168,890
Consumer Products 203,180 - 317,607 -
Polymer Processing
Equipment - 7,945 - 48,338
Other 34,801 - 80,079 -
---------- -------- ---------- ----------
Total net sales 1,016,323 602,329 1,932,084 1,192,059
========== ======== ========== ==========
OPERATING PROFIT
Plastic Additives $ 40,686 $ 15,163 $ 72,956 $ 32,085
Polymers 16,991 27,707 34,400 51,356
Specialty Additives 16,740 30,194 32,549 56,538
Crop Protection 22,110 25,205 45,711 44,702
Consumer Products 34,428 - 46,721 -
Polymer Processing
Equipment - (2,533) - (3,003)
Other 3,304 - 8,886 -
---------- -------- ---------- ----------
134,259 95,736 241,223 181,678
---------- -------- ---------- ----------
General corporate expense,
including amortization (29,808) (14,334) (67,046) (35,568)
Facility closures,
severance and related
costs 3,280 (23,917) 2,776 (24,075)
Antitrust costs (29,275) (3,338) (42,083) (6,504)
Merger costs (4,745) (8,686) (14,790) (8,686)
Impairment of long-lived
assets (5,610) - (5,610) -
---------- -------- ---------- ----------
Total operating profit $ 68,101 $ 45,461 $ 114,470 $ 106,845
========== ======== ========== ==========
CHEMTURA CORPORATION SUPPLEMENTARY SCHEDULE
Major Factors Affecting Pro Forma Net Sales ----------------------
and Operating Results (Unaudited)
Quarter and six months ended June 30, 2006 versus 2005
(In millions of dollars)
The following table summarizes the major factors contributing to the
second quarter and six month changes in operating results versus the
prior year pro forma operating results:
Quarter Ended Six Months Ended
June 30, June 30,
-------------------- ----------------------
Pre-tax Pre-tax
Earnings Earnings
(Loss) (Loss)
from from
Net Continuing Net Continuing
Sales Operations Sales Operations
--------- ---------- --------- ------------
2005 * $1,093.7 $58.0 $2,103.9 $111.8
2005 Conyers fire
insurance recoveries - - - (7.2)
2005 Facility closures,
severance and related
costs - 24.2 - 25.3
2005 Antitrust costs - 3.3 - 6.5
2005 Merger costs - 8.7 - 8.7
--------- ---------- --------- ------------
1,093.7 94.2 2,103.9 145.1
Higher selling prices 50.5 50.5 103.8 103.8
Reduced unit volume/mix (100.8) (35.7) (179.3) (57.7)
Foreign currency impact (3.9) (2.4) (28.0) (6.9)
Polymer Processing
Equipment (7.9) 6.0 (48.3) 6.6
Industrial Water Additives
divested business (12.5) (3.0) (12.5) (3.0)
Other
acquisitions/divestitures (2.8) 2.1 (7.5) 1.8
Cost savings - 22.6 - 40.4
Higher raw
materials/energy costs - (19.5) - (47.9)
Unfavorable manufacturing
productivity/absorption - (13.5) - (32.4)
Higher freight costs - (5.0) - (6.1)
Other strategic and
corporate initiatives - (3.3) - (6.8)
Stock option expense - (2.6) - (4.2)
Higher A/R securitization
fees - (1.8) - (1.0)
Inventory write-offs - (1.5) - (1.9)
2005 interest income from
tax settlement - (2.2) - (2.2)
Higher interest expense - (0.4) - (0.3)
Other - (8.0) - (8.9)
--------- ---------- --------- ------------
1,016.3 76.5 1,932.1 118.4
2006 Change in useful life
of assets - (2.9) - (5.8)
2006 Facility closures,
severance and related
costs - 3.3 - 2.8
2006 Antitrust costs - (29.3) - (42.1)
2006 Merger expense - (4.7) - (14.8)
2006 Impairment of long-
lived assets - (5.6) - (5.6)
2006 Early extinguishment
of debt - (19.5) - (19.5)
2006 Favorable settlement
of contractual matter - - - 4.3
2006 Interest income from
tax settlement - 4.0 - 4.0
2006 Loss on divested
business - (12.5) - (12.5)
--------- ---------- --------- ------------
2006 $1,016.3 $9.3 $1,932.1 $29.2
========= ========== ========= ============
* Represents the pro forma net sales and pre-tax earnings from
continuing operations, giving effect to the Merger with Great Lakes
as if it had been consummated as of the beginning of January 1, 2005.
CHEMTURA CORPORATION
Pro Forma Non-GAAP Condensed Consolidated Statement of Earnings
(Unaudited)
(In thousands, except per share data)
Quarter Ended Six Months Ended
June 30, June 30,
---------------------- ----------------------
2006 2005 2006 2005
---------- ---------- ---------- ----------
Net sales $1,016,323 $1,093,738 $1,932,084 $2,103,893
Cost of products
sold (*) 750,210 787,981 1,425,047 1,522,833
Selling, general and
administrative (*) 98,528 113,208 203,491 234,914
Depreciation and
amortization 42,722 49,682 91,548 101,491
Research and development 17,724 16,987 32,522 34,180
Equity income (197) (544) (471) (912)
---------- ---------- ---------- ----------
Operating profit 107,336 126,424 179,947 211,387
Interest expense 29,397 28,952 58,470 58,125
Other expense, net (*) 1,356 3,251 3,017 8,175
---------- ---------- ---------- ----------
Earnings from
continuing operations
before income taxes 76,583 94,221 118,460 145,087
Income tax expense 26,384 32,977 41,461 50,780
---------- ---------- ---------- ----------
Earnings from
continuing operations $ 50,199 $ 61,244 $ 76,999 $ 94,307
========== ========== ========== ==========
Diluted earnings from
continuing operations $ 0.21 $ 0.26 $ 0.32 $ 0.40
========== ========== ========== ==========
Weighted average shares
outstanding - diluted 241,311 239,008 241,252 236,821
========== ========== ========== ==========
(*) Certain amounts relating to operations have been reclassified from
other expense, net to cost of products sold and selling, general
and administrative expense in 2005 to be comparable to the 2006
presentation.
CHEMTURA CORPORATION
Non-GAAP Condensed Consolidated Statement of Earnings (Unaudited)
(In thousands, except per share data)
Non-GAAP
Quarter Quarter
Ended Ended
June 30, Non-GAAP June 30,
2006 Adjustments 2006
---------- ----------- ----------
Net sales $1,016,323 $ - $1,016,323
Cost of products sold 750,210 - 750,210
Selling, general and
administrative 98,528 - 98,528
Depreciation and amortization 45,607 (2,885) 42,722
Research and development 17,724 - 17,724
Equity income (197) - (197)
Facility closures, severance and
related costs (3,280) 3,280 -
Antitrust costs 29,275 (29,275) -
Merger costs 4,745 (4,745) -
Impairment of long-lived assets 5,610 (5,610) -
---------- ----------- ----------
Operating profit 68,101 39,235 107,336
Interest expense 29,397 - 29,397
Loss on early extinguishment of
debt 19,549 (19,549) -
Other expense, net 9,859 (8,503) 1,356
---------- ----------- ----------
Earnings from continuing
operations before income taxes 9,296 67,287 76,583
Income tax expense 6,789 19,595 26,384
---------- ----------- ----------
Earnings from continuing
operations $ 2,507 $ 47,692 $ 50,199
========== =========== ==========
Diluted earnings from continuing
operations $ 0.21
==========
Diluted weighted average shares
outstanding 241,311
==========
Non-GAAP Adjustments consist of
the following: Non-GAAP
----------
Change in useful life of assets
property, plant and equipment $ 2,885
Facility closures, severance and
related costs (3,280)
Antitrust costs 29,275
Merger costs 4,745
Asset impairment 5,610
Loss on early extinguishment of
debt 19,549
Interest income on tax settlement (3,972)
Loss on sale of Industrial Waters 12,475
----------
Pre-Tax 67,287
Adjustment to apply a non-GAAP
effective tax rate 19,595
----------
After-Tax $ 47,692
==========
CHEMTURA CORPORATION
Non-GAAP Condensed Consolidated Statement of Earnings (Unaudited)
(In thousands, except per share data)
Non-GAAP
Six Six
Months Months
Ended Ended
June 30, Non-GAAP June 30,
2006 Adjustments 2006
---------- ----------- ----------
Net sales $1,932,084 $ - $1,932,084
Cost of products sold 1,425,047 - 1,425,047
Selling, general and
administrative 203,491 - 203,491
Depreciation and amortization 97,318 (5,770) 91,548
Research and development 32,522 - 32,522
Equity income (471) - (471)
Facility closures, severance and
related costs (2,776) 2,776 -
Antitrust costs 42,083 (42,083) -
Merger costs 14,790 (14,790) -
Impairment of long-lived assets 5,610 (5,610) -
---------- ----------- ----------
Operating profit 114,470 65,477 179,947
Interest expense 58,470 - 58,470
Loss on early extinguishment of
debt 19,549 (19,549) -
Other expense, net 7,219 (4,202) 3,017
---------- ----------- ----------
Earnings from continuing
operations before income taxes 29,232 89,228 118,460
Income tax expense 13,520 27,941 41,461
---------- ----------- ----------
Earnings from continuing
operations $ 15,712 $ 61,287 $ 76,999
========== =========== ==========
Diluted earnings from continuing
operations $ 0.32
==========
Diluted weighted average shares
outstanding 241,252
==========
Non-GAAP Adjustments consist of
the following: Non-GAAP
----------
Change in useful life of assets
property, plant and equipment $ 5,770
Facility closures, severance and
related costs (2,776)
Antitrust costs 42,083
Merger costs 14,790
Asset impairment 5,610
Loss on early extinguishment of
debt 19,549
Favorable settlement of
contractual matter (4,300)
Interest income on tax settlement (3,973)
Loss on sale of Industrial Waters 12,475
----------
Pre-Tax 89,228
Adjustment to apply a non-GAAP
effective tax rate 27,941
----------
After-Tax $ 61,287
==========
CHEMTURA CORPORATION
Pro Forma Non-GAAP Condensed Consolidated Statement of Earnings
(Unaudited)
(In thousands, except per share data)
Conformed
Chemtura Great Lakes
Quarter Quarter
Ended Ended
June 30, June 30, Pro Forma
2005 2005 Adjustments
--------- ---------- -----------
Net sales $ 602,329 $ 491,409 $ -
Cost of products sold 422,258 366,430 (707)
Selling, general and administrative 60,546 52,902 (240)
Depreciation and amortization 27,737 19,978 1,967
Research and development 10,472 6,567 (52)
Equity income (86) (458) -
Facility closures, severance and
related costs 23,917 246 -
Antitrust costs 3,338 - -
Merger costs 8,686 135,880 (135,880)
--------- ---------- -----------
Operating profit (loss) 45,461 (90,136) 134,912
Interest expense 24,309 6,845 (2,202)
Other expense, net 2,745 506 -
--------- ---------- -----------
Earnings (loss) from continuing
operations before income taxes 18,407 (97,487) 137,114
Income tax expense (benefit) 8,233 (9,451) 27,345
--------- ---------- -----------
Earnings (loss) from continuing
operations $ 10,174 $ (88,036) $ 109,769
========= ========== ===========
Pro Forma
Pro Forma Non-GAAP
Combined Combined
Quarter Quarter
Ended Ended
June 30, Non-GAAP June 30,
2005 Adjustments 2005
---------- ---------- ----------
Net sales $1,093,738 $ - $1,093,738
Cost of products sold 787,981 - 787,981
Selling, general and
administrative 113,208 - 113,208
Depreciation and amortization 49,682 - 49,682
Research and development 16,987 - 16,987
Equity income (544) - (544)
Facility closures, severance and
related costs 24,163 (24,163) -
Antitrust costs 3,338 (3,338) -
Merger costs 8,686 (8,686) -
---------- --------- ----------
Operating profit (loss) 90,237 36,187 126,424
Interest expense 28,952 - 28,952
Other expense, net 3,251 - 3,251
---------- --------- ----------
Earnings (loss) from continuing
operations before income taxes 58,034 36,187 94,221
Income tax expense (benefit) 26,127 6,850 32,977
---------- --------- ----------
Earnings (loss) from continuing
operations $ 31,907 $ 29,337 $ 61,244
========== ========= ==========
Diluted earnings from continuing
operations $ 0.13 $ 0.26
========== ==========
Diluted weighted average shares
outstanding 239,008 239,008
========== ==========
Pro Forma Adjustments consist of Pro
the following: Forma
----------
Pension $ 975
Interest 2,202
Purchase accounting depreciation 2,637
Amortization (4,604)
Purchase accounting inventory fair
value impact 24
Merger costs 135,880
----------
Pre-Tax 137,114
Adjustment to apply a pro forma
effective tax rate 27,345
----------
After-Tax $109,769
==========
Non-GAAP Adjustments consist of
the following: Non-GAAP
----------
Facility closures, severance and
related costs $ 24,163
Antitrust costs 3,338
Merger costs 8,686
----------
Pre-Tax 36,187
Adjustment to apply a non-GAAP
effective tax rate 6,850
----------
After-Tax $ 29,337
==========
CHEMTURA CORPORATION
Pro Forma Non-GAAP Condensed Consolidated Statement of Earnings
(Unaudited)
(In thousands, except per share data)
Conformed
Chemtura Great Lakes
Six Months Six Months
Ended Ended
June 30, June 30, Pro Forma
2005 2005 Adjustments
----------------------------------
Net sales $1,192,059 $ 911,834 $ -
Cost of products sold 842,732 673,401 (463)
Selling, general and
administrative 124,545 110,849 (480)
Depreciation and amortization 57,863 39,748 3,880
Research and development 20,983 13,301 (104)
Equity income (174) (738) -
Facility closures, severance and
related costs 24,075 1,228 -
Antitrust costs 6,504 - -
Merger costs 8,686 138,429 (138,429)
---------- --------- -----------
Operating profit (loss) 106,845 (64,384) 135,596
Interest expense 48,715 13,814 (4,404)
Other expense, net 7,011 1,164 -
---------- --------- -----------
Earnings (loss) from continuing
operations before income taxes 51,119 (79,362) 140,000
Income tax expense (benefit) 22,716 (3,833) 27,461
---------- --------- -----------
Earnings (loss) from continuing
operations $ 28,403 $ (75,529) $ 112,539
========== ========= ===========
Pro Forma
Pro Forma Non-GAAP
Combined Combined
Six Months Six Months
Ended Ended
June 30, Non-GAAP June 30,
2005 Adjustments 2005
----------------------------------
Net sales $2,103,893 $ - $2,103,893
Cost of products sold 1,515,670 7,163 1,522,833
Selling, general and administrative 234,914 - 234,914
Depreciation and amortization 101,491 - 101,491
Research and development 34,180 - 34,180
Equity income (912) - (912)
Facility closures, severance and
related costs 25,303 (25,303) -
Antitrust costs 6,504 (6,504) -
Merger costs 8,686 (8,686) -
---------- --------- ----------
Operating profit (loss) 178,057 33,330 211,387
Interest expense 58,125 - 58,125
Other expense, net 8,175 - 8,175
---------- --------- ----------
Earnings (loss) from continuing
operations before income taxes 111,757 33,330 145,087
Income tax expense (benefit) 46,344 4,436 50,780
---------- --------- ----------
Earnings (loss) from continuing
operations $ 65,413 $ 28,894 $ 94,307
========== ========= ==========
Diluted earnings from continuing
operations $ 0.28 $ 0.40
========== ==========
Diluted weighted average shares
outstanding 236,821 236,821
========== ==========
Pro Forma Adjustments consist of
the following: Pro Forma
----------
Pension $ 1,950
Interest 4,404
Purchase accounting depreciation 5,274
Amortization (9,154)
Purchase accounting inventory
fair value impact (903)
Merger costs 138,429
----------
Pre-Tax 140,000
Adjustment to apply a pro forma
effective tax rate 27,461
----------
After-Tax $ 112,539
==========
Non-GAAP Adjustments consist of
the following: Non-GAAP
----------
Facility closures, severance and
related costs $ 25,303
Antitrust costs 6,504
Merger costs 8,686
Conyers fire insurance recoveries (7,163) (a)
----------
Pre-Tax 33,330
Adjustment to apply a non-GAAP
effective tax rate 4,436
----------
After-Tax $ 28,894
==========
(a) Represents insurance recoveries related to a fire at the Company's
Conyers, Georgia facility.
CHEMTURA CORPORATION SUPPLEMENTARY SCHEDULE
Non-GAAP Segment Net Sales and ----------------------
Operating Profit (Unaudited)
(In thousands of dollars)
Pro Forma
Pro Forma Six Six
Quarter Quarter Months Months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
2006 2005 2006 2005
---------- ---------- ---------- ----------
NET SALES
Plastic Additives $ 409,087 $ 423,172 $ 806,671 $ 851,002
Polymers 124,550 138,503 251,888 269,321
Specialty Additives 143,893 165,774 286,417 307,384
Crop Protection 100,812 103,524 189,422 192,054
Consumer Products 203,180 206,084 317,607 345,954
Polymer Processing
Equipment (a) - 7,945 - 48,338
Other 34,801 48,736 80,079 89,840
---------- ---------- ---------- ----------
Total net sales $1,016,323 $1,093,738 $1,932,084 $2,103,893
========== ========== ========== ==========
OPERATING PROFIT (LOSS)
Plastic Additives $ 40,686 $ 32,218 $ 72,956 $ 75,610
Polymers 16,991 27,707 34,400 51,356
Specialty Additives 16,740 31,829 32,549 59,324
Crop Protection 22,110 28,712 45,711 52,080
Consumer Products 34,428 26,113 46,721 28,184
Polymer Processing
Equipment (a) - (2,533) - (3,003)
Other 3,304 7,584 8,886 11,582
---------- ---------- ---------- ----------
134,259 151,630 241,223 275,133
---------- ---------- ---------- ----------
General corporate
expense (26,923) (25,206) (61,276) (63,746)
---------- ---------- ---------- ----------
Total operating
profit $ 107,336 $ 126,424 $ 179,947 $ 211,387
========== ========== ========== ==========
(a) As a result of the April 29, 2005 contribution of the assets of
the Polymer Processing Equipment segment in exchange for a
non-controlling interest in the Davis-Standard LLC venture,
Polymer Processing Equipment ceased to be a reporting segment of
the Company. The Company is recording its proportionate share of
the venture's earnings in Other expense, net.
CHEMTURA CORPORATION
Non-GAAP Segment Net Sales and Operating Profit (Unaudited)
(In thousands of dollars)
Non-GAAP
Quarter Quarter
Ended Ended
June 30, Non-GAAP June 30,
2006 Adjustments 2006
---------- ----------- ----------
NET SALES
Plastic Additives $ 409,087 $ - $ 409,087
Polymers 124,550 - 124,550
Specialty Additives 143,893 - 143,893
Crop Protection 100,812 - 100,812
Consumer Products 203,180 - 203,180
Polymer Processing Equipment - - -
Other 34,801 - 34,801
---------- ----------- ----------
$1,016,323 $ - $1,016,323
========== =========== ==========
OPERATING PROFIT
Plastic Additives $ 40,686 $ - $ 40,686
Polymers 16,991 - 16,991
Specialty Additives 16,740 - 16,740
Crop Protection 22,110 - 22,110
Consumer Products 34,428 - 34,428
Polymer Processing Equipment - - -
Other 3,304 - 3,304
---------- ----------- ----------
134,259 - 134,259
---------- ----------- ----------
General corporate expense (29,808) 2,885 (26,923)
Facility closures, severance and
related costs 3,280 (3,280) -
Antitrust costs (29,275) 29,275 -
Merger costs (4,745) 4,745 -
Impairment of long-lived assets (5,610) 5,610 -
---------- ----------- ----------
Total operating profit $ 68,101 $ 39,235 $ 107,336
========== =========== ==========
Non-GAAP Adjustments consist of Operating
the following: Profit
----------
Change in useful life of assets
property, plant and equipment $ 2,885
Facility closures, severance
and related costs (3,280)
Antitrust costs 29,275
Merger costs 4,745
Impairment of long-lived assets 5,610
----------
$ 39,235
==========
CHEMTURA CORPORATION
Non-GAAP Segment Net Sales and Operating Profit (Unaudited)
(In thousands of dollars)
Non-GAAP
Six Six
Months Months
Ended Ended
June 30, Non-GAAP June 30,
2006 Adjustments 2006
---------- ----------- ----------
NET SALES
Plastic Additives $ 806,671 $ - $ 806,671
Polymers 251,888 - 251,888
Specialty Additives 286,417 - 286,417
Crop Protection 189,422 - 189,422
Consumer Products 317,607 - 317,607
Polymer Processing Equipment - - -
Other 80,079 - 80,079
---------- ----------- ----------
$1,932,084 $ - $1,932,084
========== =========== ==========
OPERATING PROFIT
Plastic Additives $ 72,956 $ - $ 72,956
Polymers 34,400 - 34,400
Specialty Additives 32,549 - 32,549
Crop Protection 45,711 - 45,711
Consumer Products 46,721 - 46,721
Polymer Processing Equipment - - -
Other 8,886 - 8,886
---------- ----------- ----------
241,223 - 241,223
---------- ----------- ----------
General corporate expense (67,046) 5,770 (61,276)
Facility closures, severance
and related costs 2,776 (2,776) -
Antitrust costs (42,083) 42,083 -
Merger costs (14,790) 14,790 -
Impairment of long-lived assets (5,610) 5,610 -
---------- ----------- ----------
Total operating profit $ 114,470 $ 65,477 $ 179,947
========== =========== ==========
Non-GAAP Adjustments consist of Operating
the following: Profit
----------
Change in useful life of assets
property, plant and equipment $ 5,770
Facility closures, severance
and related costs (2,776)
Antitrust costs 42,083
Merger costs 14,790
Impairment of long-lived assets 5,610
----------
$ 65,477
==========
CHEMTURA CORPORATION
Pro Forma Non-GAAP Segment Net Sales and Operating Profit (Unaudited)
(In thousands of dollars)
Conformed
Great Lakes
Quarter Quarter
Ended Ended
June 30, June 30, Pro Forma
2005 2005 Adjustments
---------- ---------- -----------
NET SALES
Plastic Additives $ 209,982 $ 213,190 $ -
Polymers 138,503 - -
Specialty Additives 154,922 10,852 -
Crop Protection 90,977 12,547 -
Consumer Products - 206,084 -
Polymer Processing Equipment 7,945 - -
Other - 48,736 -
---------- ---------- -----------
$ 602,329 $ 491,409 $ -
========== ========== ===========
OPERATING PROFIT
Plastic Additives $ 15,163 $ 14,709 $ 2,346
Polymers 27,707 - -
Specialty Additives 30,194 1,459 176
Crop Protection 25,205 3,426 81
Consumer Products - 26,054 59
Polymer Processing Equipment (2,533) - -
Other - 6,693 891
---------- ---------- -----------
95,736 52,341 3,553
---------- ---------- -----------
General corporate expense (14,334) (6,351) (4,521)
Facility closures, severance and
related costs (23,917) (246) -
Antitrust costs (3,338) - -
Merger costs (8,686) (135,880) 135,880
---------- ---------- -----------
Total operating profit
(loss) $ 45,461 $ (90,136) $ 134,912
========== ========== ===========
Pro Forma
Pro Forma Non-GAAP
Combined Combined
Quarter Quarter
Ended Ended
June 30, Non-GAAP June 30,
2005 Adjustments 2005
------------ ---------- -----------
NET SALES
Plastic Additives $ 423,172 $ - $ 423,172
Polymers 138,503 - 138,503
Specialty Additives 165,774 - 165,774
Crop Protection 103,524 - 103,524
Consumer Products 206,084 - 206,084
Polymer Processing Equipment 7,945 - 7,945
Other 48,736 - 48,736
---------- ---------- -----------
$1,093,738 $ - $ 1,093,738
========== ========== ===========
OPERATING PROFIT
Plastic Additives $ 32,218 $ - $ 32,218
Polymers 27,707 - 27,707
Specialty Additives 31,829 - 31,829
Crop Protection 28,712 - 28,712
Consumer Products 26,113 - 26,113
Polymer Processing Equipment (2,533) - (2,533)
Other 7,584 - 7,584
---------- ---------- -----------
151,630 - 151,630
---------- ---------- -----------
General corporate expense (25,206) - (25,206)
Facility closures, severance
and related costs (24,163) 24,163 -
Antitrust costs (3,338) 3,338 -
Merger costs (8,686) 8,686 -
---------- ---------- -----------
Total operating profit
(loss) $ 90,237 $ 36,187 $ 126,424
========== ========== ===========
Pro Forma Adjustments consist of Operating
the following: Profit
----------
Pension $ 975
Purchase Accounting Depreciation 2,637
Amortization (4,604)
Inventory Accounting 24
Merger Costs 135,880
----------
$ 134,912
==========
Non-GAAP Adjustments consist of Operating
the following: Profit
----------
Facility closures, severance and
related costs $ 24,163
Antitrust costs 3,338
Merger Costs 8,686
----------
$ 36,187
==========
CHEMTURA CORPORATION
Pro Forma Non-GAAP Segment Net Sales and Operating Profit (Unaudited)
(In thousands of dollars)
Conformed
Great Lakes
Six Six
Months Months
Ended Ended
June 30, June 30, Pro Forma
2005 2005 Adjustments
---------- ---------- -----------
NET SALES
Plastic Additives $ 418,269 $ 432,733 $ -
Polymers 269,321 - -
Specialty Additives 287,241 20,143 -
Crop Protection 168,890 23,164 -
Consumer Products - 345,954 -
Polymer Processing Equipment 48,338 - -
Other - 89,840 -
---------- ---------- -----------
$1,192,059 $ 911,834 $ -
========== ========== ===========
OPERATING PROFIT
Plastic Additives $ 32,085 $ 34,902 $ 8,623
Polymers 51,356 - -
Specialty Additives 56,538 2,478 308
Crop Protection 44,702 7,216 162
Consumer Products - 31,642 (4,295)
Polymer Processing Equipment (3,003) - -
Other - 10,225 1,357
---------- ---------- -----------
181,678 86,463 6,155
---------- ---------- -----------
General corporate expense (35,568) (11,190) (8,988)
Facility closures, severance
and related costs (24,075) (1,228) -
Antitrust costs (6,504) - -
Merger costs (8,686) (138,429) 138,429
---------- ---------- -----------
Total operating profit
(loss) $ 106,845 $ (64,384) $ 135,596
========== ========== ===========
Pro Forma
Pro Forma Non-GAAP
Combined Combined
Six Months Six Months
Ended Ended
June 30, Non-GAAP June 30,
2005 Adjustments 2005
------------ ---------- -----------
NET SALES
Plastic Additives $ 851,002 $ - $ 851,002
Polymers 269,321 - 269,321
Specialty Additives 307,384 - 307,384
Crop Protection 192,054 - 192,054
Consumer Products 345,954 - 345,954
Polymer Processing Equipment 48,338 - 48,338
Other 89,840 - 89,840
---------- ---------- -----------
$ 2,103,893 $ - $ 2,103,893
========== ========== ===========
OPERATING PROFIT
Plastic Additives $ 75,610 $ - $ 75,610
Polymers 51,356 - 51,356
Specialty Additives 59,324 - 59,324
Crop Protection 52,080 - 52,080
Consumer Products 27,347 837 28,184
Polymer Processing Equipment (3,003) - (3,003)
Other 11,582 - 11,582
---------- ---------- -----------
274,296 837 275,133
---------- ---------- -----------
General corporate expense (55,746) (8,000) (63,746)
Facility closures, severance
and related costs (25,303) 25,303 -
Antitrust costs (6,504) 6,504 -
Merger costs (8,686) 8,686 -
---------- ---------- -----------
Total operating profit
(loss) $ 178,057 $ 33,330 $ 211,387
========== ========== ===========
Pro Forma Adjustments consist of Operating
the following: Profit
----------
Pension $ 1,950
Purchase Accounting Depreciation 5,274
Amortization (9,154)
Inventory Accounting (903)
Merger Costs 138,429
----------
$ 135,596
==========
Non-GAAP Adjustments consist of Operating
the following: Profit
----------
Facility closures, severance
and related costs $ 25,303
Antitrust costs 6,504
Merger Costs 8,686
Conyers Fire Costs (7,163)
----------
$ 33,330
==========
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