The following discussion and analysis should be read in conjunction with our unaudited condensed consolidated financial statements included in Item 1 of this Form 10-Q.

This management's discussion and analysis of financial condition and results of operations contains forward-looking statements. See "forward-looking statements" for a discussion of certain risks, assumptions and uncertainties associated with these statements.

OUR BUSINESS

We are among the larger publicly traded specialty chemical companies in the United States. We are dedicated to delivering innovative, application-focused specialty chemical solutions and consumer products. We operate in a wide variety of end-use industries, including agriculture, automotive, building and construction, electronics, lubricants, packaging, plastics for durable and non-durable goods, pool and spa chemicals and transportation. The majority of our chemical products are sold to industrial manufacturing customers for use as additives, ingredients or intermediates that add value to their end products. Our agrochemical and consumer products are sold to dealers, distributors and major retailers. We are a leader in many of our key product lines and transact business in more than 100 countries.

The primary economic factors that influence the operations and sales of our Industrial Performance Products ("Industrial Performance") and Industrial Engineered Products ("Industrial Engineered") segments (collectively referred to as "Industrial") are industrial production, residential and commercial construction, electronic component production and polymer production, residential and commercial construction. In addition, our Chemtura AgroSolutions segment is influenced by worldwide weather, disease and pest infestation conditions. Our Consumer Products segment is also influenced by general economic conditions impacting consumer spending and weather conditions.

Other factors affecting our financial performance include industry capacity, customer demand, raw material and energy costs, and selling prices. Selling prices are influenced by the global demand and supply for the products we produce. We pursue selling prices that reflect the value our products deliver to our customers, while seeking to pass on higher costs for raw material and energy to preserve our profit margins.

FIRST QUARTER RESULTS

Overview

Consolidated net sales for the first quarter of 2012 were $708 million or $9 million higher than 2011. We realized $39 million from higher selling prices, responding to the requirements to reinvest in and support growth in our Industrial segments and to recover increases in raw material and distribution costs over the prior year. However, the continued weakness in demand from industrial applications and the downturn in electronics demand that emerged in the second half of 2011 carried forward into the first quarter of 2012 and we experienced a reduction in net sales volumes of $24 million compared to the prior year. However, we did see improvement in electronics demand in the later part of the quarter. Sales volume growth was generated by our Consumer Products and Chemtura AgroSolutions segments, with a net sales volume decrease from our Industrial segments. The volume growth in our Consumer Products segment reflected the benefit of regaining a mass market customer for the 2012 season that had been lost for the 2011 season and relatively strong performance in the mass market channel in North America. We also experience $6 million from unfavorable foreign currency translation.

Gross profit for the first quarter of 2012 was $171 million, an increase of $10 million compared with the first quarter of 2011. Gross profit as a percentage of net sales rose to 24% as compared with 23% in the same quarter of 2011. The increase in gross profit primarily reflected the higher selling prices noted above offset by $11 million in unfavorable manufacturing absorption variances due to lower sales volumes, $4 million increase in manufacturing costs, $5 million increase in raw material prices, $6 million decline in sales volume and product mix, a $2 million increase in distribution costs and a $1 million increase in other costs.

Selling, general and administrative ("SG&A") expense of $82 million was $3 million higher than the first quarter of 2011 as we invested in sales and marketing to support growth.

Depreciation and amortization expense of $33 million was $4 million lower than the first quarter of 2011. The first quarter of 2011 included $1 million of accelerated depreciation associated with reorganization initiatives.

Research and development expense ("R&D") of $13 million was slightly higher than in the same quarter of 2011 as we invested in product and application development.

Changes in estimates related to expected allowable claims were $2 million for the first quarter of 2012, as we reduced the outstanding number of claims remaining to be resolved in our Disputed Claims Reserve.

Interest expense of $14 million during the first quarter of 2012 was $2 million lower than the first quarter of 2011.

Other expense, net was $4 million in the first quarter of 2012 compared to other income, net of $1 million for the first quarter of 2011. The change is primarily the result of unrealized and realized foreign currency losses recorded in the first quarter of 2012.

Reorganization items, net of $2 million in the first quarter of 2012 was $5 million lower than the first quarter of 2011. The expense in both periods primarily comprised professional fees directly associated with the Chapter 11 reorganization and the impact of negotiated settlement of claims for which Bankruptcy Court approval has been obtained or requested.

The income tax benefit in the first quarter of 2012 was $1 million compared with income tax expense of $3 million in the first quarter of 2011. The benefit in the first quarter of 2012 is primarily related to adjustments for prior years taxes in various foreign subsidiaries. We have offset our current year-to-date U.S income with net operating loss carryforwards and reduced the associated valuation allowance.

Net earnings attributable to Chemtura for the first quarter of 2012 was $22 million, or $0.22 per share, as compared with net earnings attributable to Chemtura of $7 million, or $0.07 per share, for the first quarter of 2011.

The following is a discussion of the results of our segments for the first quarter ended March 31, 2012.

Industrial Performance Products

Our Industrial Performance segment reported lower net sales and operating income in the first quarter of 2012 compared with last year. The weakness came from the antioxidants products and, to a lesser extent, the urethanes products. Sales volume across the segment was lower than last year as industrial demand has not yet recovered from the decline in the second half of 2011. The lower customer demand resulted in lower sales volume which negatively impacted net sales, and also generated higher manufacturing costs due to unfavorable absorption from lower plant production volumes. All businesses within this segment continue to aggressively implement price increases to cover raw material and distribution cost increases, as well as other investments needed to support the expected increasing customer demand.

Net sales totaled $313 million in the first quarter of 2012, a decrease of $23 million compared with last year. The lower results reflect the negative impact of reduced sales volume noted above totaling $36 million, partially offset by higher selling prices of $14 million. There was also a $1 million unfavorable foreign currency translation impact.

Operating income totaled $24 million in the first quarter of 2012, a decrease of $6 million compared with last year. The lower profits resulted from lower sales volumes and changes in product mix of $10 million, increased raw material costs of $8 million and higher SG&A and R&D (collectively "SGA&R") expense of $2 million, partially offset by higher selling prices.

Industrial Engineered Products

Our Industrial Engineered segment delivered improvements in net sales and operating income over the same quarter of 2011 mainly as a result of increases in selling prices over the last twelve months. During 2011, we increased selling prices to cover the higher cost of raw materials and other manufacturing and distribution costs as well as to support the required capacity reinvestments for sustainable and reliable supply of products to our customers. Demand from the electronics industry started the quarter at the same levels as in second half of 2011, but began recovering later in the quarter as the inventory liquidation in the broader electronics industry supply chain abated. Nevertheless, with lower production volumes than in the first quarter of 2011, coupled with bringing new production capacity on-line, the segment generated unfavorable manufacturing absorption variances. Increases in distribution costs and reductions in equity income were fully offset by slight declines in raw material costs and favorable volume and product mix in 2012.

Net sales increased by $17 million to $226 million for the first quarter of 2012 reflecting the benefit of $23 million in increased selling prices partially offset by $4 million in lower sales volume and $2 million from unfavorable foreign currency translation.

Operating income increased $11 million to $44 million in the first quarter of 2012 compared with $33 million in the first quarter of 2011. The improvement reflected the favorable selling price increases, $2 million in product mix changes and $3 million from lower raw material costs, which were only partly offset by $10 million in unfavorable manufacturing absorption variances, $4 million in increased manufacturing costs, $2 million in higher distribution costs and a reduction of $1 million in equity income.

Consumer Products

Our Consumer Products segment showed a modest improvement in net sales for the first quarter of 2012 compared with the first quarter of 2011 primarily the result of increased sales volume due to regaining a mass market customer for our 2012 season and relatively strong performance for this time of year in the mass market channel in North America. The benefit of increased sales volume combined with a reduction in SGA&R expense was not sufficient to offset increases in raw materials and the release of manufacturing variances as a result of lower production volumes in 2011, resulting in the operating loss for the quarter increasing compared to the first quarter of 2011.

Net sales increased by $5 million to $84 million in the first quarter of 2012. This increase reflected $6 million of higher sales volume offset by $1 million from unfavorable foreign currency translation.

Operating loss increased $2 million to $5 million in the first quarter of 2012 compared with an operating loss of $3 million in the first quarter of 2011, principally driven by higher raw material costs and manufacturing variances.

Chemtura AgroSolutions

Our Chemtura AgroSolutions segment reported higher net sales and operating income for the first quarter of 2012 compared with the same quarter in 2011. Increases in volume benefited from new products and registrations with growth in revenues in all regions except Southern Asia. North America had the benefit of a mild winter and a warm start to spring. European sales still grew despite the harshest winter in a number of years. Net sales and operating profit benefited from increases in selling prices. Unfavorable foreign currency translation impacted this segment as well.

Net sales increased by $10 million to $85 million for the first quarter of 2012 from $75 million in the same quarter of 2011. The increase was composed of $10 million in higher sales volume and $2 million in higher selling prices offset by $2 million from unfavorable foreign currency translation.

Operating income increased $8 million to $10 million in the first quarter of 2012 compared with $2 million in the first quarter of 2011, reflecting a $3 million increase from sales volume and product mix changes, $2 million from higher selling prices, $1 million from lower raw material costs and $3 million from lower manufacturing and distribution costs, partly offset by a $1 million impact from unfavorable foreign currency translation.

General Corporate

Included in general corporate expenses are costs and expenses that are of a general nature or managed on a corporate basis. These costs, net of allocations to the business segments, primarily represent corporate stewardship and administration activities together with costs associated with legacy activities and intangible asset amortization. Functional costs are allocated between the business segments and general corporate expense.

Corporate expense of $29 million in the first quarter of 2012 increased slightly from $28 million in the first quarter of 2011.

LIQUIDITY AND CAPITAL RESOURCES

Emergence from Chapter 11

On March 18, 2009 (the "Petition Date") Chemtura and 26 of our U.S. affiliates (collectively the "U.S. Debtors" or the "Debtors" when used in relation to matters before August 8, 2010) filed voluntary petitions for relief under Chapter 11 of Title 11 of the United States Code ("Chapter 11") in the United States Bankruptcy Court for the Southern District of New York (the "Bankruptcy Court").

On August 8, 2010, our Canadian subsidiary, Chemtura Canada Co/Cie ("Chemtura Canada"), filed a voluntary petition for relief under Chapter 11. The U.S. Debtors along with Chemtura Canada after it filed for Chapter 11 (collectively the "Debtors") requested the Bankruptcy Court to enter an order jointly administering Chemtura Canada's Chapter 11 case with the previously filed Chapter 11 cases and appoint Chemtura Canada as the "foreign representative" for the purposes of the

Canadian case. Such orders were granted on August 9, 2010. On August 11, 2010, the Canadian court entered an order recognizing the Chapter 11 cases as a "foreign proceedings" under the CCAA.

On November 3, 2010, the Bankruptcy Court entered an order confirming the Debtors' plan of reorganization (the "Plan"). On November 10, 2010 (the "Effective Date"), the Debtors substantially consummated their reorganization through a series of transactions contemplated by the Plan and the Plan became effective.

On June 10, 2011, we filed a closing report in Chemtura Canada's Chapter 11 case and a motion seeking a final decree closing that Chapter 11 case. On June 23, 2011, the Bankruptcy Court granted our motion and entered a final decree closing the Chapter 11 case of Chemtura Canada.

On December 1, 2011, we filed a motion requesting entry of an order granting a final decree closing the Chapter 11 cases of 22 Debtors (the "Fully Administered Debtors"). On December 15, 2011, the Bankruptcy Court entered an order granting a final decree closing the Fully Administered Debtors' Chapter 11 cases.

On February 7, 2012, we filed a motion requesting entry of an order granting a final decree closing the Chapter 11 cases for Bio-Lab, Inc. and GLCC Laurel, LLC, which was granted by the Bankruptcy Court on February 22, 2012.

On March 16, 2012, we filed a motion requesting entry of an order granting a final decree closing the Chapter 11 cases for Great Lakes Chemical Corporation and Uniroyal Chemical Company Limited (Delaware), which was granted by the Bankruptcy Court on March 29, 2012.

As of March 31, 2012, the Bankruptcy Court has entered orders granting final decrees closing all of the Debtors' Chapter 11 cases except the Chapter 11 case of Chemtura Corporation.

For further discussion of the Chapter 11 cases, see Note 16 - Emergence from Chapter 11 in our Notes to Consolidated Financial Statements.

Financing Facilities

On August 27, 2010, we completed a private placement offering under Rule 144A of $455 million aggregate principal amount of 7.875% senior notes due 2018 (the "Senior Notes") at an issue price of 99.269% in reliance on an exemption pursuant to Section 4(2) of the Securities Act of 1933. We also entered into a senior secured term facility credit agreement due 2016 (the "Term Loan") with Bank of America, N.A., as administrative agent, and other lenders party thereto for an aggregate principal amount of $295 million with an original issue discount of 1%. The Term Loan permits us to increase the size of the facility by up to $125 million. On November 10, 2010, we entered into a five-year senior secured revolving credit facility available through 2015 (the "ABL Facility") for an amount up to $275 million, subject to availability under a borrowing base (with a $125 million letter of credit sub-facility). The ABL Facility permits us to increase the size of the facility by up to $125 million subject to obtaining lender commitments to provide such increase. At March 31, 2012, we had $59 million of borrowings under the ABL Facility and $15 million of outstanding letters of credit (primarily related to insurance obligations, environmental obligations and banking credit facilities) which utilizes available capacity under the facility. At March 31, 2012, we had approximately $201 million of undrawn availability under the ABL Facility.

These facilities contain covenants that limit, among other things, our ability to enter into certain transactions, such as creating liens, incurring additional indebtedness or repaying certain indebtedness, making investments, paying dividends, and entering into acquisitions, dispositions and joint ventures. The Term Loan requires that we meet certain quarterly financial maintenance covenants including a maximum Secured Leverage Ratio (as defined in the agreement) of 2.5:1.0 and a minimum Consolidated Interest Coverage Ratio (as defined in the agreement) of 3.0:1.0. The ABL Facility contains a springing financial covenant requiring a minimum trailing 12-month fixed charge coverage ratio of 1.1 to 1.0 at all times during any period from the date when the amount available for borrowings under the ABL Facility falls below the greater of
(i) $34 million and (ii) 12.5% of the aggregate commitments until such date such available amount has been equal to or greater than the greater of (i) $34 million and (ii) 12.5% of the aggregate commitments for 45 consecutive days. As of March 31, 2012, we were in compliance with the covenant requirements of these financing facilities.

For further discussion of the financing facilities, see Note 6 - Debt in the Notes to our Consolidated Financial Statements.

Accounts Receivable Financing Facility

On October 26, 2011, certain of our European subsidiaries (the "Sellers") entered into a trade receivables financing facility (the "A/R Financing Facility") with GE Factofrance SAS as purchaser (the "Purchaser"). Pursuant to the A/R Financing Facility, and subject to certain conditions stated therein, the Purchaser has agreed to purchase from the Sellers, on a revolving basis, certain trade receivables up to a maximum amount outstanding at any time of €68 million (approximately $90 million). The A/R Financing Facility is uncommitted and has an indefinite term. Since availability under the A/R Financing Facility is expected to vary depending on the value of the Seller's eligible trade receivables, the Sellers' availability under the A/R Financing Facility may increase or decrease from time to time. The monthly financing fee on the drawn portion of the A/R Financing Facility is the applicable Base Rate plus 1.50%. In addition, the A/R Financing Facility is subject to a minimum commission on the annual volume of transferred receivables. We had no outstanding borrowings under the A/R Financing Facility for the period ending March 31, 2012.

Stock Repurchase Program

On October 18, 2011, we announced that our Board of Directors (the "Board") has authorized us to repurchase up to $50 million of our common stock over the next twelve months. The shares are expected to be repurchased from time to time through open market purchases. The program, which does not obligate us to repurchase any particular amount of common stock, may be modified or suspended at any time at the Board's discretion. The manner, price, number and timing of such repurchases, if any, will be subject to a variety of factors, including market conditions and the applicable rules and regulations of the Securities and Exchange Commission ("SEC"). As of March 31, 2012, the cumulative authorized repurchase allowance was $50 million, of which we had cumulatively purchased 2 million shares for $22 million. The remaining allowance under the program was approximately $28 million. There were no purchases made in the quarter ended March 31, 2012.

Restructuring Initiatives

On April 30, 2012, our Board approved a restructuring plan providing for, among other things, the closure of our Industrial Performance Product segment's antioxidants manufacturing facility in Pedrengo, Italy. The Board also approved actions to improve the operating effectiveness of certain global corporate functions. This plan is expected to achieve significant gains in efficiency and costs. The plant closure is expected to be completed by the first quarter of 2013. The restructuring plan is anticipated to generate cash savings of approximately $15 million in 2013. We anticipate recording a pre-tax charge of approximately $30 million in the second quarter of 2012 for accelerated depreciation of property, plant and equipment, asset retirement obligations, severance and related costs with the balance of the costs being expensed as incurred through 2013. The total cost of the restructuring plan is estimated to be approximately $40 million of which approximately $6 million will consist of non-cash charges, for a net cash cost of approximately $34 million.

Cash Flows from Operating Activities

Net cash used in operating activities was $89 million for the quarter ended March 31, 2012 compared to net cash used in operating activities of $112 million in the same period for last year. Changes in key working capital accounts are summarized below:

Favorable (unfavorable)                  Three months ended     Three months ended
(In millions)                              March 31, 2012         March 31, 2011
Accounts receivable                     $                (94 ) $                (83 )
Inventories                                              (53 )                  (65 )
Accounts payable                                          34                     23
Pension and post-retirement health
care liabilities                                         (19 )                  (15 )

During the quarter ended March 31, 2012, accounts receivable increased by $94 million driven by increased volume principally within the Industrial Performance Products and Industrial Engineered Products segments related to seasonal demand. Inventory increased $53 million during the quarter ended March 31, 2012 as a result of building inventory ahead of the higher seasonal demand for some of our products. Accounts payable increased by $34 million in the quarter ended March 31, 2012 primarily a result of higher raw material purchases, as well as the timing of vendor payments. Pension and post-retirement health care liabilities decreased $19 million primarily due to the funding of benefit obligations. Pension and post-retirement contributions amounted to $22 million at March 31, 2012, which included $19 million for domestic plans and $3 million for international plans.

Cash flows from operating activities in 2012 were adjusted by the impact of certain non-cash and other charges, which primarily included depreciation and amortization expense of $33 million and stock-based compensation expense of $7 million.

During the first quarter of 2011, accounts receivable increased by $83 million driven by increased volume principally within the Industrial Performance Products and Industrial Engineered Products segments. With available liquidity in the first quarter of 2011, we were able to resume our historic practice of building inventory ahead of the higher seasonal demand for some of our products in the summer and, as such, inventory increased $65 million during the first quarter of 2011. Accounts payable increased by $23 million in the first quarter of 2011 primarily a result of growth in raw material and capital purchases and improving vendor credit terms. Pension and post-retirement health care liabilities decreased primarily due to the funding of benefit obligations. Contributions amounted to $18 million in 2011, which included $12 million for domestic plans and $6 million for international plans.

Cash flows from operating activities in 2011 were adjusted by the impact of certain non-cash and other charges, which primarily included depreciation and amortization expense of $37 million and stock-based compensation expense of $8 million.

Cash Flows from Investing and Financing Activities

Investing Activities

Net cash used in investing activities was $29 million for the quarter ended March 31, 2012 related to payments for capital expenditures for U.S. and international facilities, environmental and other compliance requirements.

Net cash used in investing activities was $53 million for the first quarter of 2011. Investing activities were primarily related to payments for joint ventures of $30 million, which included $28 million for ISEM and $2 million for DayStar Materials, LLC, and $23 million in capital expenditures for U.S. and foreign facilities, environmental and other compliance requirements.

Financing Activities

Net cash provided by financing activities was $58 million for the quarter ended March 31, 2012, which included proceeds from the ABL Facility of $59 million and payments on other short term borrowings of $1 million.

Net cash provided by financing activities was $74 million for the first quarter of 2011, which included proceeds from the ABL Facility of $73 million and proceeds from other short term borrowings $1 million.

Settlements of Disputed Claims

In the quarter ended March 31, 2012, we distributed approximately $4 million of restricted cash associated with our Chapter 11 cases. These settlements were comprised of a $3 million supplemental distribution to holders of previously issued Chemtura stock ("Holders of Interests") and $1 million for general unsecured claims. Additionally we issued approximately $23 million of common stock which included a $20 million supplemental distribution to Holders of Interests and $3 million for general unsecured claims.

In the quarter ended March 31, 2011, we settled approximately $29 million of disputed claims asserted in our Chapter 11 cases with restricted cash. These settlements were comprised of $27 million for environmental items and $2 million for general unsecured claims. Additionally we issued approximately $7 million of common stock which included $4 million for the settlement of certain other disputed claims and a $3 million supplemental distribution to Holders of Interests.

Future Liquidity

. . .