ÀÖÌìÌÃfun88(ÖйúÇø)¹Ù·½ÍøÕ¾

3. BUSINESS COMBINATIONS

RUSSIAN MDI, COATINGS AND SYSTEMS ACQUISITION

ÌýÌýÌýÌýÌýÌýÌýÌýOn JulyÌý3, 2012, we completed our acquisition of the remaining 55% ownership interest in International Polyurethane InvestmentÌýB.V. (the "Russian Systems House Acquisition"). This company's wholly owned subsidiary, ÀÖÌìÌÃfun88(ÖйúÇø)¹Ù·½ÍøÕ¾ NMG Zao, is a leading supplier of polyurethane systems to the adhesives, coatings and footwear markets in Russia, Ukraine and Belarus and is headquartered in Obninsk, Russia. The acquisition cost was approximately â‚�13Ìýmillion (approximately $16Ìýmillion). The acquired business was integrated into our Polyurethanes segment. Transaction costs charged to expense related to this acquisition were not significant. The fair value of our existing 45% ownership interest immediately prior to the acquisition was $13Ìýmillion, valued by applying the income approach. Key assumptions include a discount rate of 17% and a terminal growth rate of 4%. In connection with this transaction, we recorded a noncash pretax loss of approximately $4Ìýmillion in other operating (income) expense on the consolidation of this investment. The long-term debt of approximately $7Ìýmillion that was assumed as part of this transaction was repaid shortly after the acquisition date.

ÌýÌýÌýÌýÌýÌýÌýÌýWe have accounted for the Russian Systems House Acquisition using the acquisition method. As such, we analyzed the fair value of tangible and intangible assets acquired and liabilities assumed. The preliminary allocation of acquisition cost to the assets acquired and liabilities assumed is summarized as follows (dollars in millions):

ÌýÌýÌýÌýÌýÌýÌýÌýThe acquisition cost allocation is preliminary pending final determination of the fair value of assets acquired and liabilities assumed, including final valuation of working capital, property, plant and equipment, intangible assets and the determination of related deferred taxes. For purposes of this preliminary allocation of fair value, we have assigned any excess of the acquisition cost over historical carrying values to property, plant and equipment and no amounts have been allocated to goodwill. It is possible that changes to this preliminary allocation could occur.

ÌýÌýÌýÌýÌýÌýÌýÌýInternational Polyurethane InvestmentÌýB.V. had revenues and earnings of $16Ìýmillion and $3Ìýmillion, respectively, for the period from the date of acquisition to SeptemberÌý30, 2012. If this acquisition were to have occurred on JanuaryÌý1, 2011, there would have been no significant impact to the combined earnings attributable to our Company or ÀÖÌìÌÃfun88(ÖйúÇø)¹Ù·½ÍøÕ¾ International and the following estimated pro forma revenues attributable to our Company and ÀÖÌìÌÃfun88(ÖйúÇø)¹Ù·½ÍøÕ¾ International would have been reported (dollars in millions):

EMA ACQUISITION

ÌýÌýÌýÌýÌýÌýÌýÌýOn DecemberÌý30, 2011, we completed the acquisition of EMA Kimya Sistemleri Sanayi ve Ticaret A.S. (the "EMA Acquisition"), an MDI-based polyurethanes systems house in Istanbul, Turkey for approximately $11Ìýmillion, net of cash acquired and including the repayment of assumed debt. The acquired business was integrated into our Polyurethanes segment. We have accounted for the EMA Acquisition using the acquisition method and transaction costs charged to expense associated with this acquisition were not significant. For purposes of a preliminary allocation of the acquisition cost to assets acquired and liabilities assumed, we have assigned the excess of the acquisition cost over historical carrying values of $7Ìýmillion to property, plant and equipment. At DecemberÌý31, 2011, the excess of the acquisition cost over historical carrying values had been assigned as goodwill. This preliminary purchase price allocation is likely to change once we complete the analysis of the fair value of tangible and intangible assets acquired and liabilities assumed during the fourth quarter of 2012. Net sales for the three and nine months ended SeptemberÌý30, 2011 related to the business acquired were approximately $7Ìýmillion and $19Ìýmillion, respectively. Net losses for the three and nine months ended SeptemberÌý30, 2011 related to the business acquired were approximately $(1) million and $(3) million, respectively.

LAFFANS ACQUISITION

ÌýÌýÌýÌýÌýÌýÌýÌýOn AprilÌý2, 2011, we completed the acquisition of the chemical business of Laffans Petrochemicals Limited, an amines and surfactants manufacturer located in Ankleshwar, India (the "Laffans Acquisition") at a cost of approximately $23Ìýmillion. The acquired business has been integrated into our Performance Products segment. Transaction costs charged to expense related to this acquisition were not significant.

ÌýÌýÌýÌýÌýÌýÌýÌýWe have accounted for the Laffans Acquisition using the acquisition method. As such, we analyzed the fair value of tangible and intangible assets acquired and liabilities assumed. The allocation of acquisition cost to the assets acquired and liabilities assumed is summarized as follows (dollars in millions):

ÌýÌýÌýÌýÌýÌýÌýÌýIf this acquisition were to have occurred on JanuaryÌý1, 2011, the following estimated pro forma revenues and net income attributable to ÀÖÌìÌÃfun88(ÖйúÇø)¹Ù·½ÍøÕ¾ Corporation and ÀÖÌìÌÃfun88(ÖйúÇø)¹Ù·½ÍøÕ¾ International would have been reported (dollars in millions):

ÀÖÌìÌÃfun88(ÖйúÇø)¹Ù·½ÍøÕ¾ Corporation

ÀÖÌìÌÃfun88(ÖйúÇø)¹Ù·½ÍøÕ¾ International