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Quarterly report pursuant to Section 13 or 15(d)

RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS

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RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS
6 Months Ended
Jun. 30, 2011
RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS Ìý
RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS

6. RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS

ÌýÌýÌýÌýÌýÌýÌýÌýAs of JuneÌý30, 2011 and DecemberÌý31, 2010, accrued restructuring costs by type of cost and initiative consisted of the following (dollars in millions):

Ìý
Ìý Workforce reductions(1) Ìý Demolition and decommissioning Ìý Noncancelable lease costs Ìý Other restructuring costs Ìý Total(2) Ìý

Accrued liabilities as of JanuaryÌý1, 2011

Ìý $ 36 Ìý $ 1 Ìý $ 1 Ìý $ 11 Ìý $ 49 Ìý

2011 charges for 2006 and prior initiatives

Ìý Ìý 1 Ìý Ìý — Ìý Ìý 1 Ìý Ìý — Ìý Ìý 2 Ìý

2011 charges for 2009 initiatives

Ìý Ìý 1 Ìý Ìý — Ìý Ìý — Ìý Ìý 2 Ìý Ìý 3 Ìý

2011 charges for 2010 initiatives

Ìý Ìý — Ìý Ìý 2 Ìý Ìý — Ìý Ìý 1 Ìý Ìý 3 Ìý

2011 charges for 2011 initiatives

Ìý Ìý 11 Ìý Ìý — Ìý Ìý — Ìý Ìý — Ìý Ìý 11 Ìý

Reversal of reserves no longer required

Ìý Ìý (3 ) Ìý — Ìý Ìý — Ìý Ìý — Ìý Ìý (3 )

2011 payments for 2006 and prior initiatives

Ìý Ìý — Ìý Ìý — Ìý Ìý (1 ) Ìý — Ìý Ìý (1 )

2011 payments for 2008 initiatives

Ìý Ìý (1 ) Ìý — Ìý Ìý — Ìý Ìý — Ìý Ìý (1 )

2011 payments for 2009 initiatives

Ìý Ìý (2 ) Ìý — Ìý Ìý — Ìý Ìý (3 ) Ìý (5 )

2011 payments for 2010 initiatives

Ìý Ìý (9 ) Ìý (2 ) Ìý — Ìý Ìý (1 ) Ìý (12 )

2011 payments for 2011 initiatives

Ìý Ìý (1 ) Ìý — Ìý Ìý — Ìý Ìý — Ìý Ìý (1 )

Net activity of discontinued operations

Ìý Ìý — Ìý Ìý — Ìý Ìý — Ìý Ìý (1 ) Ìý (1 )

Foreign currency effect on liability balance

Ìý Ìý 3 Ìý Ìý (1 ) Ìý — Ìý Ìý — Ìý Ìý 2 Ìý
Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý

Accrued liabilities as of JuneÌý30, 2011

Ìý $ 36 Ìý $ — Ìý $ 1 Ìý $ 9 Ìý $ 46 Ìý
Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý

(1)
The total workforce reduction reserves of $36Ìýmillion relate to the termination of 255 positions, of which 218 positions had not been terminated as of JuneÌý30, 2011.

(2)
Accrued liabilities by initiatives were as follows (dollars in millions):

Ìý
Ìý JuneÌý30,
2011
Ìý DecemberÌý31,
2010
Ìý

2006 initiatives and prior

Ìý $ 5 Ìý $ 4 Ìý

2008 initiatives

Ìý Ìý — Ìý Ìý 1 Ìý

2009 initiatives

Ìý Ìý 17 Ìý Ìý 20 Ìý

2010 initiatives

Ìý Ìý 14 Ìý Ìý 24 Ìý

2011 initiatives

Ìý Ìý 10 Ìý Ìý — Ìý
Ìý Ìý Ìý Ìý Ìý Ìý

Total

Ìý $ 46 Ìý $ 49 Ìý
Ìý Ìý Ìý Ìý Ìý Ìý

ÌýÌýÌýÌýÌýÌýÌýÌýDetails with respect to our reserves for restructuring, impairment and plant closing costs are provided below by segment and initiative (dollars in millions):

Ìý
Ìý Polyurethanes Ìý Performance
Products
Ìý Advanced
Materials
Ìý Textile
Effects
Ìý Pigments Ìý Discontinued
Operations
Ìý Corporate
and Other
Ìý Total Ìý

Accrued liabilities as of JanuaryÌý1, 2011

Ìý $ — Ìý $ 1 Ìý $ 2 Ìý $ 25 Ìý $ 8 Ìý $ 8 Ìý $ 5 Ìý $ 49 Ìý

2011 charges for 2006 and prior initiatives

Ìý Ìý — Ìý Ìý — Ìý Ìý — Ìý Ìý 1 Ìý Ìý 1 Ìý Ìý — Ìý Ìý — Ìý Ìý 2 Ìý

2011 charges for 2009 initiatives

Ìý Ìý — Ìý Ìý — Ìý Ìý — Ìý Ìý — Ìý Ìý 3 Ìý Ìý — Ìý Ìý — Ìý Ìý 3 Ìý

2011 charges for 2010 initiatives

Ìý Ìý — Ìý Ìý — Ìý Ìý — Ìý Ìý 2 Ìý Ìý — Ìý Ìý — Ìý Ìý 1 Ìý Ìý 3 Ìý

2011 charges for 2011 initiatives

Ìý Ìý — Ìý Ìý — Ìý Ìý 3 Ìý Ìý 5 Ìý Ìý 3 Ìý Ìý — Ìý Ìý — Ìý Ìý 11 Ìý

Reversal of reserves no longer required

Ìý Ìý — Ìý Ìý — Ìý Ìý — Ìý Ìý (3 ) Ìý — Ìý Ìý — Ìý Ìý — Ìý Ìý (3 )

2011 payments for 2006 and prior initiatives

Ìý Ìý — Ìý Ìý — Ìý Ìý — Ìý Ìý (1 ) Ìý — Ìý Ìý — Ìý Ìý — Ìý Ìý (1 )

2011 payments for 2008 initiatives

Ìý Ìý — Ìý Ìý — Ìý Ìý — Ìý Ìý — Ìý Ìý (1 ) Ìý — Ìý Ìý — Ìý Ìý (1 )

2011 payments for 2009 initiatives

Ìý Ìý — Ìý Ìý — Ìý Ìý — Ìý Ìý — Ìý Ìý (5 ) Ìý — Ìý Ìý — Ìý Ìý (5 )

2011 payments for 2010 initiatives

Ìý Ìý — Ìý Ìý — Ìý Ìý — Ìý Ìý (8 ) Ìý — Ìý Ìý — Ìý Ìý (4 ) Ìý (12 )

2011 payments for 2011 initiatives

Ìý Ìý — Ìý Ìý — Ìý Ìý — Ìý Ìý (1 ) Ìý — Ìý Ìý — Ìý Ìý — Ìý Ìý (1 )

Net activity of discontinued operations

Ìý Ìý — Ìý Ìý — Ìý Ìý — Ìý Ìý — Ìý Ìý — Ìý Ìý (1 ) Ìý — Ìý Ìý (1 )

Foreign currency effect on liability balance

Ìý Ìý — Ìý Ìý — Ìý Ìý — Ìý Ìý 3 Ìý Ìý (1 ) Ìý — Ìý Ìý — Ìý Ìý 2 Ìý
Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý

Accrued liabilities as of JuneÌý30, 2011

Ìý $ — Ìý $ 1 Ìý $ 5 Ìý $ 23 Ìý $ 8 Ìý $ 7 Ìý $ 2 Ìý $ 46 Ìý
Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý

Current portion of restructuring reserves

Ìý $ — Ìý $ 1 Ìý $ 4 Ìý $ 23 Ìý $ 8 Ìý $ 7 Ìý $ 2 Ìý $ 45 Ìý

Long-term portion of restructuring reserve

Ìý Ìý — Ìý Ìý — Ìý Ìý 1 Ìý Ìý — Ìý Ìý — Ìý Ìý — Ìý Ìý — Ìý Ìý 1 Ìý

Estimated additional future charges for current restructuring projects

Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý

Estimated additional charges within one year

Ìý Ìý — Ìý Ìý — Ìý Ìý — Ìý Ìý — Ìý Ìý 5 Ìý Ìý — Ìý Ìý — Ìý Ìý 5 Ìý

Estimated additional charges beyond one year

Ìý Ìý — Ìý Ìý — Ìý Ìý — Ìý Ìý — Ìý Ìý — Ìý Ìý — Ìý Ìý — Ìý Ìý — Ìý

ÌýÌýÌýÌýÌýÌýÌýÌýDetails with respect to cash and noncash restructuring charges by initiative are provided below (dollars in millions):

Ìý
Ìý Three Months Ended
JuneÌý30, 2011
Ìý Six Months Ended
JuneÌý30, 2011
Ìý

Cash charges:

Ìý Ìý Ìý Ìý Ìý Ìý Ìý
Ìý

2011 charges for 2006 and prior initiatives

Ìý $ — Ìý $ 2 Ìý
Ìý

2011 charges for 2009 initiatives

Ìý Ìý 2 Ìý Ìý 3 Ìý
Ìý

2011 charges for 2010 initiatives

Ìý Ìý 2 Ìý Ìý 3 Ìý
Ìý

2011 charges for 2011 initiatives

Ìý Ìý 6 Ìý Ìý 11 Ìý

Reversal of reserves no longer required

Ìý Ìý (1 ) Ìý (3 )
Ìý Ìý Ìý Ìý Ìý Ìý

Total 2011 Restructuring, Impairment and Plant Closing Costs

Ìý $ 9 Ìý $ 16 Ìý
Ìý Ìý Ìý Ìý Ìý Ìý

Ìý

Ìý
Ìý Three Months Ended
JuneÌý30, 2010
Ìý Six Months Ended
JuneÌý30, 2010
Ìý

Cash charges:

Ìý Ìý Ìý Ìý Ìý Ìý Ìý
Ìý

2010 charges for 2005 initiatives

Ìý $ 1 Ìý $ 1 Ìý
Ìý

2010 charges for 2009 initiatives

Ìý Ìý 3 Ìý Ìý 5 Ìý
Ìý

2010 charges for 2010 initiatives

Ìý Ìý 16 Ìý Ìý 20 Ìý

Reversal of reserves no longer required

Ìý Ìý (3 ) Ìý (6 )
Ìý Ìý Ìý Ìý Ìý Ìý

Total 2010 Restructuring, Impairment and Plant Closing Costs

Ìý $ 17 Ìý $ 20 Ìý
Ìý Ìý Ìý Ìý Ìý Ìý

ÌýÌýÌýÌýÌýÌýÌýÌýDuring the six months ended JuneÌý30, 2011, our Advanced Materials segment recorded charges of $3Ìýmillion primarily related to the reorganization of our global structure and relocation of our divisional headquarters from Basel, Switzerland to The Woodlands, Texas.

ÌýÌýÌýÌýÌýÌýÌýÌýDuring the six months ended JuneÌý30, 2011, our Textile Effects segment recorded charges of $8Ìýmillion of which $5Ìýmillion related to simplification of the commercial organization and optimization of our distribution network, $2Ìýmillion related to nonworkforce reductions incurred for the consolidation of our Switzerland manufacturing facilities, and $1Ìýmillion related to the consolidation of our North Carolina sites. We reversed charges of $3Ìýmillion which were no longer required for workforce reductions at our production facility in Langweid, Germany and the consolidation of manufacturing activities and processes at our site in Basel, Switzerland.

ÌýÌýÌýÌýÌýÌýÌýÌýDuring the six months ended JuneÌý30, 2011, our Pigments segment recorded charges of $7Ìýmillion of which $3Ìýmillion related to the closure of our Grimsby, U.K. plant and $3Ìýmillion related to workforce reductions at our Umbogintwini, South Africa plant. We expect to incur additional charges of $5Ìýmillion through DecemberÌý31, 2012, primarily related to the closure of our Grimsby, U.K. plant.

ÌýÌýÌýÌýÌýÌýÌýÌýDuring the six months ended JuneÌý30, 2011, we recorded charges of $1Ìýmillion in Corporate and other primarily related to workforce reductions in connection with a reorganization and regional consolidation of our transactional accounting activities.