Chemtura Reports 2007 Fourth Quarter Results

Chemtura Corporation (NYSE: CEM; the "Company”) filed its Annual Report on Form 10-K today, reporting flat earnings for the fourth quarter of 2007. Additionally the Company is reporting net earnings on a non-GAAP basis of $26 million, or $0.11 per share. The net loss for the quarter includes loss from continuing operations of $3 million, or $0.02 per share, income from discontinued operations of $4 million, or $0.02 per share and loss on the sale of discontinued operations of $1 million, or $0.00 per share. On a non-GAAP basis, net earnings include income from continuing operations of $22 million, or $0.09 per share and income from discontinued operations of $4 million, or $0.02 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 fourth quarter results on a GAAP basis: (In millions, except per share data)   Fourth quarter     2007   2006   % change Net sales   $ 891     $ 809     10 % Operating profit (loss)   $ 24     $ (24 )   200 % Loss from continuing operations   $ (3 )   $ (186 )   98 % Loss per share from continuing operations   $ (0.02 )   $ (0.77 )   97 % Earnings per share from discontinued operations   $ 0.02     $ 0.02     -   Per share (loss) gain from sale of discontinued operations   $ -     $ 0.01     NM   Net loss per share   $ -     $ (0.74 )   NM         NM = Not Meaningful The following is a summary of fourth quarter results on a non-GAAP basis: (In millions, except per share data)   Fourth quarter     2007   2006   % change Net sales   $ 891   $ 809     10 % Operating profit   $ 55   $ 21     162 % Earnings (loss) from continuing operations   $ 22   $ (8 )   375 % Earnings (loss) per share from continuing operations   $ 0.09   $ (0.03 )   400 % Earnings per share from discontinued operations   $ 0.02   $ 0.02     -   Net earnings (loss) per share   $ 0.11   $ (0.01 )   NM         NM = Not Meaningful Fourth Quarter Results - GAAP Revenue for the quarter was $891 million, or 10% above fourth quarter 2006 revenue of $809 million. The increase in revenue was attributable to $50 million for the Kaufman acquisition, $18 million from positive foreign exchange, and $17 million from higher selling prices which were offset by a $3 million impact from product mix. Gross profit improved $42 million compared with the same period of 2006. The Company benefited $17 million from higher selling prices, $16 million from higher volume and mix, $13 million from the Kaufman acquisition, $8 million from favorable manufacturing variances net of cost savings and other cost decreases of $5 million. Those gains were offset by $24 million in higher raw material and energy costs and $2 million of unfavorable foreign exchange impacts due to the weaker U.S. dollar. Additionally in the fourth quarter of 2006 there was a $9 million charge for the accelerated recognition of asset retirement obligations. Operating profit increased $48 million in the fourth quarter of 2007 as compared with the same quarter last year. Operating profit benefited from a $42 million increase in gross profit, $16 million decrease in antitrust costs, a $5 million decrease in facility closures, severance and related costs and other cost decreases of $3 million, offset by an increase of $15 million in costs related to the change in the useful life of property, plant and equipment and an impairment of long-lived assets of $3 million. The loss from continuing operations for the fourth quarter of 2007 was $3 million, or $0.02 per share, compared with a loss of $186 million, or $0.77 per share, for the fourth quarter of 2006. The increase primarily reflects a $131 million decrease in income taxes, the $48 million increase in operating profit discussed above, a $12 million increase in foreign exchange gains and $2 million in other cost decreases. These earnings were partially offset by the absence of the $6 million gain in the fourth quarter of 2006 on sale of the Company’s equity interest in the Davis Standard venture and an increase of $4 million in minority interest expense. Discontinued operations principally reflects the optical monomers business that was sold in the fourth quarter of 2007 and the fluorine business that was sold on January 31, 2008. Earnings from discontinued operations for the fourth quarter of 2007 were $4 million (net of $2 million of tax) and were $5 million (net of $3 million of tax) for the fourth quarter of 2006. Loss on sale of discontinued operations in the fourth quarter of 2007 was $1 million primarily related to the sale of optical monomers. A gain on sale of discontinued operations of $1 million in the fourth quarter of 2006 represents the reversal of reserves for certain contingencies related to the sale of the OrganoSilicones business. Fourth Quarter Non-GAAP Results On a non-GAAP basis, fourth quarter 2007 gross profit was $210 million, or 24% of net sales, as compared with fourth quarter 2006 non-GAAP gross profit of $177 million, or 22% of net sales. On a non-GAAP basis, fourth quarter 2007 operating profit was $55 million, or 6% of net sales, as compared with fourth quarter 2006 non-GAAP operating profit of $21 million, or 3% of net sales. Non-GAAP earnings from continuing operations before income taxes in 2007 and 2006 exclude pre-tax charges of $31 million and $39 million, respectively, primarily related to the change in useful life of property, plant and equipment, antitrust costs, facility closures, severance and related costs, accelerated recognition of asset retirement obligations, gain on sale of equity interest in joint venture and impairment of long-lived assets. The amounts associated with these charges are detailed on page 12 of this release. Chemtura’s non-GAAP tax rate of 35% represents the expected effective tax rate for the Company’s core operations. The Company has chosen to apply this rate to non-GAAP pre-tax income beginning in the third quarter of 2007 to better reflect underlying operating performance. Non-GAAP earnings from discontinued operations principally reflects the optical monomers and fluorine businesses of $4 million and $5 million for the quarters ended December 31, 2007 and 2006, respectively. Cash Flows - GAAP Net cash provided by operations in 2007 was $149 million as compared with $251 million in 2006. The decrease in cash provided by operations in 2007 primarily reflects the reduction in accrued liabilities principally due to the payment of antitrust litigation settlements accrued in prior periods. The Company’s accounts receivable balance is net after reflecting the sale of accounts receivable of $239 million as of December 31, 2007, $303 million as of September 30, 2007 and $279 million as of December 31, 2006. This reduction in accounts receivable securitization resulted in the higher accounts receivable balance as of the end of the year. At December 31, 2007, the Company’s inventory balance of $676 million was increased by the impact of weakening U.S. dollar. At the same exchange rates that applied as of December 31, 2006, the value of inventories as of December 31, 2007 would have been $649 million. Capital expenditures for the year ended 2007 were $117 million compared to $128 million in 2006. The Company currently anticipates capital expenditures to be $165 million in 2008, which includes $25 million related to the consolidation of its legacy ERP systems onto a single instance of SAP. The Company’s total debt as of December 31, 2007 was $1,063 million as compared with $1,111 million as of December 31, 2006. Cash and cash equivalents were $77 million as of December 31, 2007 compared to $95 million as of December 31, 2006. 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. Chemtura’s non-GAAP tax rate of 35% beginning with the third quarter of 2007 represents the expected effective tax rate for the Company’s core operations. 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 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 successfully complete the restructuring and turnaround of our Polymer Additives segment; The ability to obtain growth from demand for flame retardant, petroleum additive and lubricant, agricultural and pool and spa product applications; The ability to obtain the synergies anticipated from the integration of the Kaufman business and gain sales from new refrigeration lubricant applications; The ability to sustain profitability in our Crop Protection business due to new generic competition and the failure to secure new products and technology. Additionally, the Crop Protection business is dependent on disease and pest conditions, as well as, local and regional economic conditions; The ability to sell methyl bromide due to regulatory restrictions; Changes in weather conditions which could adversely affect the seasonal selling cycles in both our Consumer Products and Crop Protection segments; Changes in the availability and/or quality of our energy and raw materials; The ability to collect our outstanding receivables; Changes in interest rates and foreign currency exchange rates; Changes in technology, market demand and customer requirements; The enactment of more stringent domestic and international 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 complete the execution of our portfolio transformation plan; The ability to reduce our indebtedness levels; The ability to recover our deferred tax assets; The ability to successfully complete the Company’s new SAP platform initiative; The ability to support the goodwill in our business segments; The ability to remain compliant with our debt covenants or obtain necessary waivers; and 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. CHEMTURA CORPORATION   Index of Financial Statements and Schedules   Page   Financial Statements   Consolidated Statements of Operations (Unaudited) - 7 Quarter and Twelve Months ended December 31, 2007 and 2006   Consolidated Balance Sheets - December 31, 2007 (Unaudited) and December 31, 2006 8   Condensed Consolidated Statements of Cash Flows (Unaudited) - Twelve Months ended December 31, 2007 and 2006 9   Segment Net Sales and Operating Profit (Loss) (Unaudited) - Quarter and Twelve Months ended December 31, 2007 and 2006 10   Supplemental Schedules   Major Factors Affecting Net Sales and Operating Results (Unaudited) - Quarter and Twelve Months ended December 31, 2007 versus 2006 11   Non-GAAP Consolidated Statements of Operations (Unaudited) - Quarter ended December 31, 2007 and 2006 12   Non-GAAP Consolidated Statements of Operations (Unaudited) - Twelve Months ended December 31, 2007 and 2006 13   Non-GAAP Segment Net Sales and Operating Profit (Loss) (Unaudited) - Quarter ended December 31, 2007 and 2006 14   Non-GAAP Segment Net Sales and Operating Profit (Unaudited) - Twelve Months ended December 31, 2007 and 2006 15 CHEMTURA CORPORATION Consolidated Statements of Operations (Unaudited) (In millions, except per share data)     Quarter Ended Twelve Months Ended December 31, December 31, 2007 2006 2007 2006   Net sales $ 891 $ 809 $ 3,747 $ 3,458   Cost of products sold 681 641 2,862 2,602 Selling, general and administrative 85 88 393 387 Depreciation and amortization 77 63 269 204 Research and development 16 16 62 61 Facility closures, severance and related costs 2 7 36 5 Antitrust costs 3 19 35 90 Merger costs - 1 - 17 Loss on sale of businesses 1 - 15 11 Impairment of long-lived assets 3 - 19 80 Equity income (1 ) (2 ) (3 ) (4 )   Operating profit (loss) 24 (24 ) 59 5 Interest expense 20 21 87 102 Loss on early extinguishment of debt - - - 44 Other expense, net 2 5 13 6         Earnings (loss) from continuing operations before income taxes 2 (50 ) (41 ) (147 ) Income tax expense 5   136   4   126     Loss from continuing operations (3 ) (186 ) (45 ) (273 ) Earnings from discontinued operations 4 5 18 20 (Loss) gain on sale of discontinued operations (1 ) 1   24   47     Net loss $ -   $ (180 ) $ (3 ) $ (206 )   Basic and diluted earnings (loss) per common share: Loss from continuing operations $ (0.02 ) $ (0.77 ) $ (0.18 ) $ (1.13 ) Earnings from discontinued operations 0.02 0.02 0.07 0.08 (Loss) gain on sale of discontinued operations -   0.01   0.10   0.20   Net loss $ -   $ (0.74 ) $ (0.01 ) $ (0.85 )   Weighted average shares outstanding - basic and diluted 242.0   240.7   241.6   240.5   CHEMTURA CORPORATION Consolidated Balance Sheets (In millions of dollars)     December 31, 2007 December 31, 2006 ASSETS (Unaudited)   CURRENT ASSETS Cash and cash equivalents $ 77 $ 95 Accounts receivable 389 342 Inventories 676 660 Other current assets 239   288   Total current assets 1,381   1,385     NON-CURRENT ASSETS Property, plant and equipment, net 1,032 1,147 Goodwill 1,309 1,177 Intangible assets, net 585 551 Other assets 109   139     $ 4,416   $ 4,399     LIABILITIES AND STOCKHOLDERS' EQUITY   CURRENT LIABILITIES Short-term borrowings $ 5 $ 48 Accounts payable 285 285 Accrued expenses 353 461 Income taxes payable 38   94   Total current liabilities 681   888     NON-CURRENT LIABILITIES Long-term debt 1,058 1,063 Pension and post-retirement health care liabilities 361 440 Other liabilities 463 329   STOCKHOLDERS' EQUITY Common stock 3 3 Additional paid-in capital 3,028 3,005 Accumulated deficit (1,179 ) (1,128 ) Accumulated other comprehensive income (loss) 168 (34 ) Treasury stock at cost (167 ) (167 ) Total stockholders' equity 1,853   1,679     $ 4,416   $ 4,399   CHEMTURA CORPORATION Condensed Consolidated Statements of Cash Flows (Unaudited) (In millions of dollars)       Twelve Months Ended December 31, Increase (decrease) to cash 2007 2006 CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (3 ) $ (206 ) Adjustments to reconcile net earnings (loss) to net cash provided by operations: Loss on sale of businesses 15 11 Gain on sale of discontinued operations (24 ) (47 ) Gain on sale of equity interest in venture - (6 ) Impairment of long-lived assets 19 80 Loss on early extinguishment of debt - 44 Depreciation and amortization 275 214 Stock-based compensation expense 10 14 Equity income, net of cash distributions (3 ) 3 Changes in assets and liabilities, net: (140 ) 144   Net cash provided by operations 149   251     CASH FLOWS FROM INVESTING ACTIVITIES Net proceeds from divestments 186 196 Payments for acquisitions, net of cash acquired (165 ) (9 ) Merger transaction costs paid - (8 ) Capital expenditures (117 ) (128 ) Other investing activities 13   -   Net cash (used in) provided by investing activities (83 ) 51     CASH FLOWS FROM FINANCING ACTIVITIES Payments on credit facility, net - (414 ) Payments on long term borrowings - (324 ) Proceeds from long term borrowings - 497 Payments on short term borrowings (48 ) (16 ) Premium paid on early extinguishment of debt - (36 ) Payments for debt issuance costs - (6 ) Dividends paid (48 ) (48 ) Repayment of life insurance policy loan - (10 ) Proceeds from exercise of stock options 7 3 Other financing activities (1 ) (1 ) Net cash used in financing activities (90 ) (355 )   CASH Effect of exchange rates on cash and cash equivalents 6   9     Change in cash and cash equivalents (18 ) (44 ) Cash and cash equivalents at beginning of period 95   139     Cash and cash equivalents at end of period $ 77   $ 95   CHEMTURA CORPORATION Segment Net Sales and Operating Profit (Loss) (Unaudited) (In millions of dollars)       Quarter Ended Twelve Months Ended December 31, December 31, 2007   2006 2007   2006 NET SALES   Polymer Additives $ 440 $ 419 $ 1,806 $ 1,712 Performance Specialties 231 161 911 670 Consumer Products 111 116 567 566 Crop Protection 91 72 352 311 Other 18   41   111   199   Total Net Sales $ 891   $ 809   $ 3,747   $ 3,458         OPERATING PROFIT   Polymer Additives $ (2 ) $ 17 $ 77 $ 130 Performance Specialties 39 26 140 115 Consumer Products 7 6 72 70 Crop Protection 22 4 79 48 Other -   (7 ) (6 ) (4 ) 66   46   362   359     General corporate expense, including amortization (30 ) (34 ) (158 ) (133 ) Change in useful life of property, plant and equipment (3 ) (9 ) (40 ) (18 ) Facility closures, severance and related costs (2 ) (7 ) (36 ) (5 ) Antitrust costs (3 ) (19 ) (35 ) (90 ) Merger costs - (1 ) - (17 ) Loss on sale of businesses (1 ) - (15 ) (11 ) Impairment of long-lived assets (3 ) -   (19 ) (80 ) Total Operating Profit (Loss) $ 24   $ (24 ) $ 59   $ 5   CHEMTURA CORPORATION Major Factors Affecting Net Sales and Operating Results (Unaudited) Quarter and Twelve Months ended December 31, 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 Twelve Months Ended December 31, December 31, Pre-tax Pre-tax (Loss) (Loss) Earnings from Earnings from Net Continuing Net Continuing Sales Operations Sales Operations   2006 $ 809 $ (50 ) $ 3,458 $ (147 )   2006 Accelerated Recognition of asset retirement obligation - 9 - 9 2006 Favorable settlement of contractual matter - - - (4 ) 2006 Change in useful life of property, plant and equipment - 9 - 18 2006 Facility closures, severance and related costs - 7 - 5 2006 Antitrust costs - 19 - 90 2006 Merger expense - 1 - 17 2006 Loss on sale of businesses - - - 11 2006 Asset impairment - - - 80 2006 Interest income on tax settlement - - - (4 ) 2006 Gain on sale of equity interest in Davis Standard venture - (6 ) - (6 ) 2006 Loss on early extinguishment of debt -   -   -   44   809 (11 ) 3,458 113   Higher selling prices 17 17 43 43 Unit volume and mix, net of Celogen® foaming agents (3 ) 16 13 38 Foreign currency impact 18 (3 ) 61 (6 ) Industrial Water Additives divested business - - (12 ) (2 ) Kaufman acquisition 50 9 181 23 Other acquisitions and divestitures - 4 3 10 Manufacturing variances net of cost savings - 8 - 14 Higher raw materials/energy costs - (24 ) - (99 ) Decrease in Crop Protection reserve for doubtful accounts - 7 - 11 Increased legal fees - (2 ) - (9 ) Increased insurance costs - (4 ) - (9 ) Higher minority interest expense - (4 ) - (7 ) Higher A/R securitization fees - - - (5 ) Foreign exchange gain (loss) - 12 - 21 Lower interest expense - 1 - 15 Other -   7   -   (12 ) 891 33 3,747 139   2007 Accelerated recognition of asset retirement obligation - - - (7 ) 2007 Favorable Settlement on contractual matter - 2 - 2 2007 Change in useful life of property, plant and equipment - (24 ) - (70 ) 2007 Facility closures, severance and related costs - (2 ) - (36 ) 2007 Antitrust costs - (3 ) - (35 ) 2007 Loss on sale of businesses - (1 ) - (15 ) 2007 Asset impairment - (3 ) - (19 )         2007 $ 891   $ 2   $ 3,747   $ (41 ) CHEMTURA CORPORATION Non-GAAP Consolidated Statements of Operations (Unaudited) (In millions, except per share data)   Quarter Ended December 31, 2007 Quarter Ended December 31, 2006 Non-GAAP Non-GAAP GAAP Adj. Non-GAAP GAAP Adj. Non-GAAP   Net sales $ 891 $ - $ 891 $ 809 $ - $ 809   Cost of products sold 681 - 681 641 (9 ) 632 Selling, general and administrative 85 2 87 88 - 88 Depreciation and amortization 77 (24 ) 53 63 (9 ) 54 Research and development 16 - 16 16 - 16 Facility closures, severance and related costs 2 (2 ) - 7 (7 ) - Antitrust costs 3 (3 ) - 19 (19 ) - Merger costs - - - 1 (1 ) - Loss on sale of businesses 1 (1 ) - - - - Impairment of long-lived assets 3 (3 ) - - - - Equity income (1 ) -   (1 ) (2 ) -   (2 )   Operating profit (loss) 24 31 55 (24 ) 45 21 Interest expense 20 - 20 21 - 21 Loss on early extinguishment of debt - - - - - - Other expense, net 2   -   2   5   6   11     Earnings (loss) from continuing operations before income taxes 2 31 33 (50 ) 39 (11 ) Income tax expense (benefit) 5   6   11   136   (139 ) (3 )   (Loss) earnings from continuing operations (3 ) 25 22 (186 ) 178 (8 ) Earnings from discontinued operations 4 - 4 5 - 5 (Loss) gain on sale of discontinued operations (1 ) 1   -   1   (1 ) -     Net (loss) earnings $ -   $ 26   $ 26   $ (180 ) $ 177   $ (3 )     Diluted earnings from continuing operations $ 0.09 $ (0.03 ) Diluted earnings from discontinued operations 0.02   0.02   Diluted net earnings $ 0.11   $ (0.01 )     Diluted weighted average shares outstanding 242.0   240.7       Quarter Quarter Ended Ended Non-GAAP Adjustments consist of the following: December 31, 2007 December 31, 2006   Accelerated recognition of asset retirement obligation $ - $ 9 Favorable settlement on contractual matter (2 ) - Change in useful life of property, plant and equipment 24 9 Facility closures, severance and related costs 2 7 Antitrust costs 3 19 Merger costs - 1 Loss on sale of businesses 1 - Asset impairment 3 - Gain on sale of equity interest in Davis Standard venture -   (6 ) Pre-Tax 31 39   Adjustment to apply a non-GAAP effective tax rate 6   (139 ) After-Tax 25 178   Gain on sale of discontinued operations 1   (1 ) Net Earnings $ 26   $ 177   CHEMTURA CORPORATION Non-GAAP Consolidated Statements of Operations (Unaudited) (In millions, except per share data)   Twelve Months Ended December 31, 2007 Twelve Months Ended December 31, 2006 Non-GAAP Non-GAAP GAAP Adj. Non-GAAP GAAP Adj. Non-GAAP   Net sales $ 3,747 $ - $ 3,747 $ 3,458 $ - $ 3,458   Cost of products sold 2,862 (7 ) 2,855 2,602 (9 ) 2,593 Selling, general and administrative 393 2 395 387 4 391 Depreciation and amortization 269 (70 ) 199 204 (18 ) 186 Research and development 62 - 62 61 - 61 Facility closures, severance and related costs 36 (36 ) - 5 (5 ) - Antitrust costs 35 (35 ) - 90 (90 ) - Merger costs - - - 17 (17 ) - Loss on sale of businesses 15 (15 ) - 11 (11 ) - Impairment of long-lived assets 19 (19 ) - 80 (80 ) - Equity income (3 ) -   (3 ) (4 ) -   (4 )   Operating profit 59 180 239 5 226 231 Interest expense 87 - 87 102 - 102 Loss on early extinguishment of debt - - - 44 (44 ) - Other expense, net 13   -   13   6   10   16     (Loss) earnings from continuing operations before income taxes (41 ) 180 139 (147 ) 260 113 Income tax expense (benefit) 4   45   49   126   (85 ) 41     (Loss) earnings from continuing operations (45 ) 135 90 (273 ) 345 72 Earnings from discontinued operations 18 - 18 20 - 20 Gain on sale of discontinued operations 24   (24 ) -   47   (47 ) -     Net (loss) earnings $ (3 ) $ 111   $ 108   $ (206 ) $ 298   $ 92       Diluted earnings from continuing operations $ 0.38 $ 0.30 Diluted earnings from discontinued operations 0.07   0.08   Diluted net earnings $ 0.45   $ 0.38       Diluted weighted average shares outstanding 242.1   241.3       Twelve Months Twelve Months Ended Ended Non-GAAP Adjustments consist of the following: December 31, 2007   December 31, 2006   Accelerated recognition of asset retirement obligation $ 7 $ 9 Favorable settlement on contractual matter (2 ) (4 ) Change in useful life of property, plant and equipment 70 18 Facility closures, severance and related costs 36 5 Antitrust costs 35 90 Merger costs - 17 Loss on sale of businesses 15 11 Asset impairment 19 80 Interest income on tax settlement - (4 ) Gain on sale of equity interest in Davis Standard venture - (6 ) Loss on early extinguishment of debt -   44   Pre-Tax 180 260   Adjustment to apply a non-GAAP effective tax rate 45   (85 ) After-Tax 135 345   Gain on sale of discontinued operations (24 ) (47 ) Net Earnings $ 111   $ 298   CHEMTURA CORPORATION Non-GAAP Segment Net Sales and Operating Profit (Loss) (Unaudited) (In millions of dollars)       Quarter Ended December 31, 2007 Quarter Ended December 31, 2006 Non-GAAP Non-GAAP GAAP Adjustments Non-GAAP GAAP Adjustments Non-GAAP NET SALES   Polymer Additives $ 440 $ - $ 440 $ 419 $ - $ 419 Performance Specialties 231 - 231 161 - 161 Consumer Products 111 - 111 116 - 116 Crop Protection 91 - 91 72 - 72 Other 18   -   18   41   -   41   Total Net Sales $ 891   $ -   $ 891   $ 809   $ -   $ 809     OPERATING PROFIT (LOSS)   Polymer Additives $ (2 ) $ 22 $ 20 $ 17 $ 5 $ 22 Performance Specialties 39 1 40 26 - 26 Consumer Products 7 - 7 6 - 6 Crop Protection 22 - 22 4 - 4 Other -   -   -   (7 ) 4   (3 ) 66   23   89   46   9   55     General corporate expense, including amortization (30 ) (4 ) (34 ) (34 ) - (34 ) Change in useful life of property, plant and equipment (3 ) 3 - (9 ) 9 - Facility closures, severance and related cost (2 ) 2 - (7 ) 7 - Antitrust costs (3 ) 3 - (19 ) 19 - Merger costs - - - (1 ) 1 - Loss on sale of businesses (1 ) 1 - - - - Impairment of long-lived assets (3 ) 3 - - - -               Total Operating Profit (Loss) $ 24   $ 31   $ 55   $ (24 ) $ 45   $ 21     Quarter Quarter Ended Ended Non-GAAP Adjustments consist of the following: December 31, 2007 December 31, 2006   Accelerated recognition of asset retirement obligation $ - $ 9 Favorable settlement on contractual matter (2 ) - Change in useful life of property, plant and equipment 24 9 Facility closures, severance and related costs 2 7 Antitrust costs 3 19 Merger costs - 1 Loss on sale of businesses 1 - Asset impairment 3   -   $ 31   $ 45   CHEMTURA CORPORATION Non-GAAP Segment Net Sales and Operating Profit (Unaudited) (In millions of dollars)     Twelve Months Ended December 31, 2007 Twelve Months Ended December 31, 2006 Non-GAAP Non-GAAP GAAP Adjustments Non-GAAP GAAP Adjustments Non-GAAP NET SALES   Polymer Additives $ 1,806 $ - $ 1,806 $ 1,712 $ - $ 1,712 Performance Specialties 911 - 911 670 - 670 Consumer Products 567 - 567 566 - 566 Crop Protection 352 - 352 311 - 311 Other 111   -   111   199   -   199   Total Net Sales $ 3,747   $ -   $ 3,747   $ 3,458   $ -   $ 3,458     OPERATING PROFIT   Polymer Additives $ 77 $ 31 $ 108 $ 130 $ 5 $ 135 Performance Specialties 140 1 141 115 - 115 Consumer Products 72 - 72 70 - 70 Crop Protection 79 - 79 48 - 48 Other (6 ) 5   (1 ) (4 ) 4   -   362   37   399   359   9   368     General corporate expense, including amortization (158 ) (2 ) (160 ) (133 ) (4 ) (137 ) Change in useful life of property, plant and equipment (40 ) 40 - (18 ) 18 - Facility closures, severance and related cost (36 ) 36 - (5 ) 5 - Antitrust costs (35 ) 35 - (90 ) 90 - Merger costs - - - (17 ) 17 - Loss on sale of businesses (15 ) 15 - (11 ) 11 - Impairment of long-lived assets (19 ) 19 - (80 ) 80 -             Total Operating Profit $ 59   $ 180   $ 239   $ 5   $ 226   $ 231     Twelve Months Twelve Months Ended Ended Non-GAAP Adjustments consist of the following: December 31, 2007 December 31, 2006   Accelerated recognition of asset retirement obligation $ 7 $ 9 Favorable settlement on contractual matter (2 ) (4 ) Change in useful life of property, plant and equipment 70 18 Facility closures, severance and related costs 36 5 Antitrust costs 35 90 Merger costs - 17 Loss on sale of businesses 15 11 Asset impairment 19   80   $ 180   $ 226