10-Q

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2012

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 1-1070

Olin Corporation

(Exact name of registrant as specified in its charter)

Virginia	13-1872319
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

190 Carondelet Plaza, Suite 1530, Clayton, MO	63105-3443
(Address of principal executive offices)	(Zip Code)

(314) 480-1400

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  x Accelerated filer  ¨ Non-accelerated filer  ¨ (Do not check if a smaller reporting company)

Smaller reporting company ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ¨ No x

As of September 30, 2012, 80,150,713 shares of the registrant’s common stock were outstanding.

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Part I — Financial Information

Item 1.  Financial Statements.

OLIN CORPORATION AND CONSOLIDATED SUBSIDIARIES

Condensed Balance Sheets

(In millions, except per share data)

(Unaudited)

	September 30, 2012			December 31, 2011			September 30, 2011
ASSETS
Current assets:
Cash and cash equivalents	$	103.1		$	304.8		$	318.3
Receivables, net	347.7			237.1			290.5
Income tax receivable	12.4			0.7			2.2
Inventories	213.7			176.6			166.3
Current deferred income taxes	56.5			50.9			50.4
Other current assets	20.0			10.2			11.1
Total current assets	753.4			780.3			838.8
Property, plant and equipment (less accumulated depreciation of $1,206.0, $1,144.0 and $1,122.1)	1,018.2			885.4			821.3
Prepaid pension costs	51.1			19.2			46.1
Restricted cash	18.5			51.7			71.6
Other assets	223.6			85.6			86.8
Goodwill	752.3			627.4			627.4
Total assets	$	2,817.1		$	2,449.6		$	2,492.0
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current installments of long-term debt	$	23.6		$	12.2		$	87.8
Accounts payable	189.4			149.7			129.6
Accrued liabilities	249.2			237.2			237.6
Total current liabilities	462.2			399.1			455.0
Long-term debt	703.1			524.2			501.8
Accrued pension liability	66.8			59.1			55.2
Deferred income taxes	153.2			99.6			113.5
Other liabilities	355.2			381.8			359.3
Total liabilities	1,740.5			1,463.8			1,484.8
Commitments and contingencies
Shareholders’ equity:
Common stock, par value $1 per share:  authorized, 120.0 shares;    issued and outstanding 80.2, 80.1 and 80.2 shares	80.2			80.1			80.2
Additional paid-in capital	854.1			852.0			852.4
Accumulated other comprehensive loss	(272.6		)	(294.2		)	(270.6		)
Retained earnings	414.9			347.9			345.2
Total shareholders’ equity	1,076.6			985.8			1,007.2
Total liabilities and shareholders’ equity	$	2,817.1		$	2,449.6		$	2,492.0

The accompanying notes to condensed financial statements are an integral part of the condensed financial statements.

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OLIN CORPORATION AND CONSOLIDATED SUBSIDIARIES

Condensed Statements of Income

(In millions, except per share data)

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Sales	$	581.2		$	550.2		$	1,597.1		$	1,515.3
Operating expenses:
Cost of goods sold	475.8			432.7			1,260.1			1,205.6
Selling and administration	42.4			39.8			131.2			121.0
Restructuring charges	2.3			4.1			6.0			6.6
Acquisition costs	8.3			—			8.3			0.8
Other operating income	1.1			4.3			1.5			5.9
Operating income	53.5			77.9			193.0			187.2
Earnings of non-consolidated affiliates	1.2			0.8			2.0			8.5
Interest expense	6.0			7.9			18.3			22.5
Interest income	0.2			0.2			0.7			0.7
Other (expense) income	(2.2		)	(1.6		)	(6.9		)	179.0
Income before taxes	46.7			69.4			170.5			352.9
Income tax provision	18.0			22.2			55.5			129.9
Net income	$	28.7		$	47.2		$	115.0		$	223.0
Net income per common share:
Basic	$	0.36		$	0.59		$	1.44		$	2.79
Diluted	$	0.35		$	0.58		$	1.42		$	2.76
Dividends per common share	$	0.20		$	0.20		$	0.60		$	0.60
Average common shares outstanding:
Basic	80.1			80.2			80.1			79.9
Diluted	81.0			80.8			80.9			80.8

The accompanying notes to condensed financial statements are an integral part of the condensed financial statements.

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OLIN CORPORATION AND CONSOLIDATED SUBSIDIARIES

Condensed Statements of Comprehensive Income

(In millions)

(Unaudited)

	Three Months Ended September 30,					Nine Months Ended September 30,
	2012		2011			2012		2011
Net income	$	28.7	$	47.2		$	115.0	$	223.0
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	0.8		—			0.3		2.3
Unrealized gains (losses) on derivative contracts	9.2		(14.0		)	10.5		(20.2		)
Amortization of prior service costs and actuarial losses	3.3		3.0			10.8		9.1
Total other comprehensive income (loss), net of tax	13.3		(11.0		)	21.6		(8.8		)
Comprehensive income	$	42.0	$	36.2		$	136.6	$	214.2

The accompanying notes to condensed financial statements are an integral part of the condensed financial statements.

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OLIN CORPORATION AND CONSOLIDATED SUBSIDIARIES

Condensed Statements of Shareholders’ Equity

(In millions, except per share data)

(Unaudited)

	Common Stock					Additional Paid-In Capital			Accumulated Other Comprehensive Loss			Retained Earnings			Total Shareholders’ Equity
	Shares Issued		Par Value
Balance at January 1, 2011	79.6		$	79.6		$	842.3		$	(261.8	)	$	170.2		$	830.3
Net income	—		—			—			—			223.0			223.0
Other comprehensive loss	—		—			—			(8.8		)	—			(8.8		)
Dividends paid:
Common stock ($0.60 per share)	—		—			—			—			(48.0		)	(48.0		)
Common stock repurchased and retired	(0.1	)	(0.1		)	(2.1		)	—			—			(2.2		)
Common stock issued for:
Stock options exercised	0.5		0.5			8.8			—			—			9.3
Other transactions	0.2		0.2			3.6			—			—			3.8
Stock-based compensation	—		—			(0.2		)	—			—			(0.2		)
Balance at September 30, 2011	80.2		$	80.2		$	852.4		$	(270.6	)	$	345.2		$	1,007.2
Balance at January 1, 2012	80.1		$	80.1		$	852.0		$	(294.2	)	$	347.9		$	985.8
Net income	—		—			—			—			115.0			115.0
Other comprehensive income	—		—			—			21.6			—			21.6
Dividends paid:
Common stock ($0.60 per share)	—		—			—			—			(48.0		)	(48.0		)
Common stock repurchased and retired	(0.2	)	(0.2		)	(2.9		)	—			—			(3.1		)
Common stock issued for:
Stock options exercised	0.1		0.1			1.3			—			—			1.4
Other transactions	0.2		0.2			2.4			—			—			2.6
Stock-based compensation	—		—			1.3			—			—			1.3
Balance at September 30, 2012	80.2		$	80.2		$	854.1		$	(272.6	)	$	414.9		$	1,076.6

The accompanying notes to condensed financial statements are an integral part of the condensed financial statements.

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OLIN CORPORATION AND CONSOLIDATED SUBSIDIARIES

Condensed Statements of Cash Flows

(In millions)

(Unaudited)

	Nine Months Ended September 30,
	2012			2011
Operating Activities
Net income	$	115.0		$	223.0
Adjustments to reconcile net income to net cash and cash equivalents provided by (used for) operating activities:
Gain on remeasurement of investment in SunBelt	—			(181.4		)
Earnings of non-consolidated affiliates	(2.0		)	(8.5		)
Gains on disposition of property, plant and equipment	(0.9		)	(4.8		)
Stock-based compensation	4.2			4.3
Depreciation and amortization	78.7			74.1
Deferred income taxes	34.5			93.1
Qualified pension plan contributions	(0.6		)	(0.7		)
Qualified pension plan income	(18.6		)	(19.5		)
Change in:
Receivables	(48.6		)	(79.6		)
Income taxes receivable	(11.7		)	3.5
Inventories	(1.3		)	(6.7		)
Other current assets	0.7			0.3
Accounts payable and accrued liabilities	15.0			11.6
Other assets	4.7			(0.2		)
Other noncurrent liabilities	(10.0		)	6.1
Other operating activities	(0.5		)	(2.2		)
Net operating activities	158.6			112.4
Investing Activities
Capital expenditures	(210.8		)	(128.4		)
Business acquired in purchase transaction, net of cash acquired	(312.3		)	(123.4		)
Proceeds from sale/leaseback of equipment	3.5			—
Proceeds from disposition of property, plant and equipment	3.7			6.2
Distributions from affiliated companies, net	0.5			1.1
Restricted cash activity	33.2			30.4
Other investing activities	(0.4		)	2.3
Net investing activities	(482.6		)	(211.8		)
Financing Activities
Long-term debt:
Borrowings	200.0			—
Repayments	(7.7		)	—
Earn out payment – SunBelt	(15.3		)	—
Common stock repurchased and retired	(3.1		)	(2.2		)
Stock options exercised	1.3			7.3
Excess tax benefits from stock-based compensation	0.7			2.0
Dividends paid	(48.0		)	(48.0		)
Deferred debt issuance costs	(5.6		)	—
Net financing activities	122.3			(40.9		)
Net decrease in cash and cash equivalents	(201.7		)	(140.3		)
Cash and cash equivalents, beginning of period	304.8			458.6
Cash and cash equivalents, end of period	$	103.1		$	318.3
Cash paid for interest and income taxes:
Interest	$	18.4		$	19.6
Income taxes, net of refunds	$	28.5		$	34.4
Non-cash investing activities:
Capital expenditures included in accounts payable and accrued liabilities	$	20.2		$	(4.2	)

The accompanying notes to condensed financial statements are an integral part of the condensed financial statements.

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OLIN CORPORATION AND CONSOLIDATED SUBSIDIARIES

Notes to Condensed Financial Statements

(Unaudited)

DESCRIPTION OF BUSINESS

Olin Corporation is a Virginia corporation, incorporated in 1892.  We are a manufacturer concentrated in three business segments:  Chlor Alkali Products, Chemical Distribution and Winchester.  Chlor Alkali Products, with nine U.S. manufacturing facilities and one Canadian manufacturing facility, produces chlorine and caustic soda, hydrochloric acid, hydrogen, bleach products and potassium hydroxide.  Chemical Distribution, with twenty-nine owned and leased terminal facilities, manufactures bleach products and distributes caustic soda, bleach products, potassium hydroxide and hydrochloric acid. Winchester, with its principal manufacturing facilities in East Alton, IL and Oxford, MS, produces and distributes sporting ammunition, reloading components, small caliber military ammunition and components, and industrial cartridges.

We have prepared the condensed financial statements included herein, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC).  The preparation of the consolidated financial statements requires estimates and assumptions that affect amounts reported and disclosed in the financial statements and related notes.  In our opinion, these financial statements reflect all adjustments (consisting only of normal accruals), which are necessary to present fairly the results for interim periods.  Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations; however, we believe that the disclosures are appropriate.  We recommend that you read these condensed financial statements in conjunction with the financial statements, accounting policies and the notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2011.  Certain reclassifications were made to prior year amounts to conform to the 2012 presentation.

On August 22, 2012, we acquired 100% of privately-held K. A. Steel Chemicals Inc. (KA Steel), whose operating results are included in the accompanying financial statements since the date of the acquisition.

On February 28, 2011, we acquired PolyOne Corporation’s (PolyOne) 50% interest in the SunBelt Chlor Alkali Partnership, which we refer to as SunBelt.  Previously, we had a 50% ownership interest in SunBelt, which was accounted for using the equity method of accounting.  Accordingly, prior to the acquisition, we included only our share of SunBelt results in earnings of non-consolidated affiliates.  Since the date of acquisition, SunBelt’s results are no longer included in earnings of non-consolidated affiliates but are consolidated in our accompanying financial statements.

ACQUISITIONS

KA Steel Acquisition

On August 22, 2012, we acquired 100% of privately-held KA Steel, on a debt free basis, for $338.5 million in cash, subject to certain post-closing adjustments. As of the date of acquisition, KA Steel had cash and cash equivalents of $26.2 million. The price paid is subject to a customary working capital adjustment. KA Steel is one of the largest distributors of caustic soda in North America and manufacturers and sells bleach in the Midwest.

The acquisition was partially financed with proceeds from the $200 million of 5.50% senior notes (2022 Notes) sold on August 22, 2012 with a maturity date of August 15, 2022. Proceeds from the 2022 Notes were $196.0 million, after expenses of $4.0 million. The 2022 Notes were issued at par value. Interest will be paid semi-annually beginning on February 15, 2013.

For segment reporting purposes, KA Steel comprises the newly created Chemical Distribution segment. The KA Steel results of operations have been included in our consolidated results for the period subsequent to the effective date of the acquisition. Our results for the three and nine months ended September 30, 2012 include KA Steel sales of $47.6 million and $1.9 million of segment income, which includes depreciation and amortization expense of $1.7 million primarily associated with the acquisition fair valuing of KA Steel.

The transaction has been accounted for using the acquisition method of accounting which requires, among other things, that assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date.  We are in the process of determining the fair values of KA Steel's tangible and intangible assets and liabilities. Initial estimates of those fair values are included in this interim report; however, the valuation process is not complete, and we expect that adjustments to the initial valuation will be required. The following table summarizes the preliminary allocation of the purchase price to KA Steel's

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assets and liabilities:

	August 22, 2012
	($ in millions)
Total current assets	$	126.0
Property, plant and equipment	23.9
Intangible assets	139.5
Total assets acquired	289.4
Total current liabilities	63.2
Other liabilities	10.1
Total liabilities assumed	73.3
Net identifiable assets acquired	216.1
Goodwill	124.9
Fair value of net assets acquired	$	341.0
Supplemental Data
Cash paid	$	338.5
Olin trade accounts receivable from KA Steel	2.5
Total fair value of consideration	$	341.0

Included in total current assets is cash and cash equivalents of $26.2 million and receivables of $61.8 million with a contracted value of $63.5 million. Included in other liabilities is an accrued pension withdrawal liability of $10.0 million for a multi-employer defined benefit pension plan.

Based on preliminary valuations, we allocated $128.6 million of the purchase price to intangible assets relating to customers, customer contracts and relationships, which management estimates to have a useful life of ten years, and $10.9 million to intangible assets associated with the KA Steel trade name, which management estimates to have an indefinite useful life. These identifiable intangible assets were included in other assets. Based on preliminary valuations, $124.9 million was assigned to goodwill, all of which is deductible for tax purposes.  The primary reasons for the acquisition and the principal factors that contributed to a KA Steel purchase price that resulted in the recognition of goodwill are the expanded capability to market and sell caustic soda, potassium hydroxide, and hydrochloric acid, as well as, the geographic diversification the KA Steel locations provide us, and the strengthened position in the industrial bleach segment.

Goodwill and the indefinite-lived trade name intangible asset recorded in the acquisition are not amortized but will be reviewed for impairment annually in the fourth quarter and/or when circumstances or other events indicate that impairment may have occurred.

The following pro forma summary presents the condensed statement of income as if the acquisition of KA Steel had occurred on January 1, 2011 (unaudited).

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
	($ in millions, except per share data)
Sales	$	686.9	$	656.2	$	1,879.8	$	1,803.4
Net income	39.3		44.5		124.9		220.4
Net income per common share:
Basic	$	0.49	$	0.56	$	1.56	$	2.76
Diluted	$	0.48	$	0.55	$	1.54	$	2.73

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The pro forma statement of income was prepared based on historical financial information and has been adjusted to give effect to pro forma adjustments that are (i) directly attributable to the transaction, (ii) factually supportable and (iii) expected to have a continuing impact on the combined results.  The pro forma statement of income uses estimates and assumptions based on information available at the time.  Management believes the estimates and assumptions to be reasonable; however, actual results may differ significantly from this pro forma financial information.  The pro forma information is not intended to reflect the actual results that would have occurred had the companies actually been combined during the period presented.  The pro forma data reflect the application of the following adjustments:

• Additional amortization expense related to the fair value of acquired identifiable intangible assets ($2.0 million and $3.5 million for the three months ended September 30, 2012 and September 30, 2011, respectively, and $9.0 million and $10.3 million for the nine months ended September 30, 2012 and September 30, 2011, respectively).

• Additional depreciation expense related to the fair value adjustment to property, plant and equipment and conforming KA Steel's useful lives to ours (zero and $0.1 million for the three months ended September 30, 2012 and September 30, 2011, respectively, and $0.2 million for both the nine months ended September 30, 2012 and September 30, 2011).

• Increase in interest expense related to the 2022 Notes issued in conjunction with this acquisition ($1.6 million and $2.8 million for the three months ended September 30, 2012 and September 30, 2011, respectively, and $7.1 million and $8.3 million for the nine months ended September 30, 2012 and September 30, 2011, respectively).

• Elimination of intersegment sales of caustic soda and bleach to KA Steel from Chlor Alkali Products at prices that approximate market ($4.6 million and $15.0 million for the three months ended September 30, 2012 and September 30, 2011, respectively, and $23.2 million and $37.0 million for the nine months ended September 30, 2012 and September 30, 2011, respectively).

• Elimination of transaction costs incurred in 2012 that are directly related to the transaction, and do not have a continuing impact on our combined operating results ($8.3 million for the three and nine months ended September 30, 2012).

In addition, the pro forma data reflect the tax effect of all of the above adjustments.  The pro forma tax provision reflects an increase (decrease) of $3.9 million and $(2.6) million for the three months ended September 30, 2012 and September 30, 2011, respectively, and $0.7 million and $(5.0) million for the nine months ended September 30, 2012 and September 30, 2011, respectively, associated with the incremental pretax income, the fair value adjustments for acquired intangible assets and property, plant and equipment, and the interest expense of the $200 million senior notes issued in conjunction with this acquisition, which reflects the marginal tax of the adjustments in the various jurisdictions where such adjustments occurred.

SunBelt Acquisition

On February 28, 2011, we acquired PolyOne’s 50% interest in SunBelt for $132.3 million in cash plus the assumption of a PolyOne guarantee related to the SunBelt Notes.  With this acquisition, we own 100% of SunBelt.  The SunBelt chlor alkali plant, which is located within our McIntosh, AL facility, has approximately 350,000 tons of membrane technology capacity.  We also agreed to a three year earn out, which has no guaranteed minimum or maximum, based on the performance of SunBelt.  In addition, during the second quarter of 2011, we remitted to PolyOne $6.0 million, which represented 50% of distributable cash generated by SunBelt from January 1, 2011 through February 28, 2011.

Pursuant to a note purchase agreement dated December 22, 1997, SunBelt sold $97.5 million of Guaranteed Senior Secured Notes due 2017, Series O, and $97.5 million of Guaranteed Senior Secured Notes due 2017, Series G.  We refer to these notes as the SunBelt Notes.  The SunBelt Notes bear interest at a rate of 7.23% per annum, payable semi-annually in arrears on each June 22 and December 22.  Beginning on December 22, 2002 and each year through 2017, SunBelt is required to repay $12.2 million of the SunBelt Notes, of which $6.1 million is attributable to the Series O Notes and of which $6.1 million is attributable to the Series G Notes.  In conjunction with the acquisition, we consolidated the SunBelt Notes with a fair value of $87.3 million for the remaining principal balance of $85.3 million as of February 28, 2011.

We have guaranteed the Series O Notes, and PolyOne, our former SunBelt partner, has guaranteed the Series G Notes, in both cases pursuant to customary guaranty agreements.  We have agreed to indemnify PolyOne for any payments or other costs under the guarantee in favor of the purchasers of the Series G Notes, to the extent any payments or other costs arise from a default or other breach under the SunBelt Notes.  If SunBelt does not make timely payments on the SunBelt Notes, whether as a result of a failure to pay on a guarantee or otherwise, the holders of the SunBelt Notes may proceed against the assets of SunBelt for repayment.

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From January 1, 2011 to February 28, 2011, we recorded $6.3 million of equity earnings of non-consolidated affiliates for our 50% ownership in SunBelt.  The value of our investment in SunBelt was $(0.8) million.  We remeasured our equity interest in SunBelt to fair value upon the close of the transaction.  As a result, we recognized a pretax gain of $181.4 million, which was classified in other (expense) income in our condensed statement of income.  In conjunction with this remeasurement, a discrete deferred tax expense of $76.0 million was recorded.

The transaction has been accounted for using the acquisition method of accounting which requires, among other things, that assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date.  We finalized our purchase price allocation during the second quarter of 2011.  The following table summarizes the final allocation of the purchase price to SunBelt’s assets and liabilities:

	February 28, 2011
	($ in millions)
Total current assets	$	37.6
Property, plant and equipment	87.4
Deferred income taxes	0.4
Other assets	5.8
Total assets acquired	131.2
Total current liabilities	42.7
Long-term debt	75.1
Other liabilities	27.6
Total liabilities assumed	145.4
Less:  Investment in SunBelt	(0.8		)
Net liabilities assumed	(13.4		)
Liabilities for uncertainties	48.3
Gain on remeasurement of investment in SunBelt	(181.4		)
Goodwill	327.1
Fair value of total consideration	$	180.6

Included in total current assets are cash and cash equivalents of $8.9 million.  Included in total current liabilities is $12.2 million of current installments of long-term debt.

Based on final valuations, we allocated $5.8 million of the purchase price to intangible assets relating to customers, customer contracts and relationships, which management estimates to have a useful life of fifteen years.  These identifiable intangible assets were included in other assets.  Based on final valuations, $327.1 million was assigned to goodwill.  For tax purposes, $163.7 million of the goodwill is deductible.  The goodwill represents the fair value of SunBelt that is in addition to the fair values of the other net assets acquired.  The primary reason for the acquisition and the principal factors that contributed to a SunBelt purchase price that resulted in the recognition of goodwill is the strategic fit with our Chlor Alkali operations and SunBelt’s low cost membrane capacity.

Goodwill recorded in the acquisition is not amortized but will be reviewed for impairment annually in the fourth quarter and/or when circumstances or other events indicate that impairment may have occurred.

For segment reporting purposes, SunBelt has been included in Chlor Alkali Products.  The SunBelt results of operations have been included in our consolidated results for the period subsequent to the effective date of the acquisition.  The following pro forma summary presents the condensed statement of income as if the acquisition of SunBelt had occurred on January 1, 2011 (unaudited).

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	Nine Months Ended
	September 30, 2011
	($ in millions, except per share data)
Sales	$	1,541.6
Net income	121.9
Net income per common share:
Basic	$	1.53
Diluted	$	1.51

The pro forma statement of income was prepared based on historical financial information and has been adjusted to give effect to pro forma adjustments that are (i) directly attributable to the transaction, (ii) factually supportable and (iii) expected to have a continuing impact on the combined results.  The pro forma statement of income uses estimates and assumptions based on information available at the time.  Management believes the estimates and assumptions to be reasonable; however, actual results may differ significantly from this pro forma financial information.  The pro forma information does not reflect any cost savings that might be achieved from operating the business under a single owner and is not intended to reflect the actual results that would have occurred had the companies actually been combined during the period presented.  The pro forma data reflect the application of the following adjustments:

• Elimination of the pretax gain resulting from the remeasurement of our previously held 50% equity interest in SunBelt, which is considered non-recurring ($181.4 million for the nine months ended September 30, 2011).

• Additional amortization expense related to the fair value of acquired identifiable intangible assets ($0.1 million for the nine months ended September 30, 2011).

• Reduction of depreciation expense related to the fair value adjustment to property, plant and equipment ($1.0 million for the nine months ended September 30, 2011).

• Reduction in interest expense as a result of increasing the carrying value of acquired debt obligations to its estimated fair value ($0.1 million for the nine months ended September 30, 2011).

• Additional accretion expense for the earn out liability that was recorded as a result of the acquisition ($0.4 million for the nine months ended September 30, 2011).

• Elimination of transaction costs incurred in 2011 that are directly related to the transaction, and do not have a continuing impact on our combined operating results ($0.8 million for the nine months ended September 30, 2011).

In addition, the pro forma data reflect the tax effect of all of the above adjustments.  The pro forma tax provision for the nine months ended September 30, 2011 reflects a reduction of $76.0 million related to the elimination of the gain resulting from the remeasurement of our previously held 50% equity interest in SunBelt.  The pro forma tax provision reflects an increase of $2.3 million for the nine months ended September 30, 2011, associated with the incremental pretax income and the fair value adjustments for acquired intangible assets, property, plant and equipment and the SunBelt Notes, which reflects the marginal tax of the adjustments in the various jurisdictions where such adjustments occurred.

11

RESTRUCTURING CHARGES

On December 9, 2010, our board of directors approved a plan to eliminate our use of mercury in the manufacture of chlor alkali products.  Under the plan, the 260,000 tons of mercury cell capacity at our Charleston, TN facility will be converted to 200,000 tons of membrane capacity capable of producing both potassium hydroxide and caustic soda.  The project has an estimated capital cost of approximately $165 million.  The board of directors also approved plans to reconfigure our Augusta, GA facility to manufacture bleach and distribute caustic soda, while discontinuing chlor alkali manufacturing at this site.  We based our decision to convert and reconfigure on several factors.  First, during 2009 and 2010 we had experienced a steady increase in the number of customers unwilling to accept our products manufactured using mercury cell technology.  Second, there was federal legislation passed in 2008 governing the treatment of mercury that significantly limits our recycling options after December 31, 2012.  We concluded that exiting mercury cell technology production after 2012 represented an unacceptable future cost risk.  Further, the conversion of the Charleston, TN plant to membrane technology will reduce the electricity usage per ECU produced by approximately 25%.  The decision to reconfigure the Augusta, GA facility to manufacture bleach and distribute caustic soda removes the highest cost production capacity from our system.  Mercury cell chlor alkali production at the Augusta, GA facility was discontinued at the end of September, 2012 and the first of the two new membrane cell rooms at Charleston, TN was successfully started up in the third quarter of 2012.The reconfiguration at Charleston, TN will be completed in the fourth quarter of 2012 with the expected startup of the second membrane cell room. These actions reduced our Chlor Alkali capacity by 160,000 tons. For the three months ended September 30, 2012 and 2011, we recorded pretax restructuring charges of $0.5 million and $2.0 million, respectively, for employee severance and related benefit costs and facility exit costs.  For the nine months ended September 30, 2012 and 2011, we recorded pretax restructuring charges of $1.0 million and $2.3 million, respectively, for employee severance and related benefit costs and facility exit costs.  We expect to incur additional restructuring charges through 2013 of approximately $7 million related to the implementation of plans to exit the use of mercury cell technology in the chlor alkali manufacturing process.

On November 3, 2010, we announced that we made the decision to relocate the Winchester centerfire ammunition manufacturing operations from East Alton, IL to Oxford, MS.  This relocation, when completed, is forecast to reduce Winchester’s annual operating costs by approximately $30 million.  Consistent with this decision we have initiated an estimated $110 million five-year project, which includes approximately $80 million of capital spending.  The State of Mississippi and local governments have provided incentives which should offset approximately 40 percent of the capital spending.  We currently expect to complete this relocation by the end of 2015.  For the three and nine months ended September 30, 2012, we recorded pretax restructuring charges of $1.8 million and $5.0 million, respectively, for employee severance and related benefit costs, employee relocation costs and facility exit costs.  For the three and nine months ended September 30, 2011 we recorded pretax restructuring charges of $2.1 million and $4.3 million, respectively, for employee severance and related benefit costs, employee relocation costs and facility exit costs. Additionally, for the nine months ended September 30, 2011 a portion of the charge related to a non-cash pension curtailment. These 2011 restructuring charges related primarily to the ratification of a new five and one half year Winchester, East Alton, IL union labor agreement.  We expect to incur additional restructuring charges through 2016 of approximately $11 million related to the transfer of these operations.

12

The following table summarizes the activity by major component of these 2010 restructuring actions and the remaining balances of accrued restructuring costs as of September 30, 2012:

		Employee severance and job related benefits			Pension and other postretirement benefits curtailment			Lease and other contract termination costs			Employee relocation costs			Facility exit costs			Total
		($ in millions)
Balance at January 1, 2011		$	6.0		$	—		$	1.0		$	—		$	—		$	7.0
	Restructuring charges:
	First quarter	0.1			—			—			—			—			0.1
	Second quarter	0.9			1.1			—			0.3			0.1			2.4
	Third quarter	2.7			—			—			1.0			0.4			4.1
	Amounts utilized	(0.2		)	(1.1		)	(0.2		)	(1.3		)	(0.5		)	(3.3		)
Balance at September 30, 2011		$	9.5		$	—		$	0.8		$	—		$	—		$	10.3
Balance at January 1, 2012		$	11.3		$	—		$	0.8		$	—		$	—		$	12.1
	Restructuring charges:
	First quarter	0.9			—			—			0.8			0.2			1.9
	Second quarter	1.0			—			—			0.7			0.1			1.8
	Third quarter	1.3			—			—			0.5			0.5			2.3
	Amounts utilized	(1.5		)	—			(0.2		)	(2.0		)	(0.8		)	(4.5		)
Balance at September 30, 2012		$	13.0		$	—		$	0.6		$	—		$	—		$	13.6

13

The following table summarizes the cumulative restructuring charges of these 2010 restructuring actions by major component through September 30, 2012:

	Chlor Alkali Products		Winchester		Total
	($ in millions)
Write-off of equipment and facility	$	17.5	$	—	$	17.5
Employee severance and job related benefits	5.5		10.1		15.6
Facility exit costs	7.7		0.8		8.5
Pension and other postretirement benefits curtailment	—		4.1		4.1
Employee relocation costs	0.1		4.1		4.2
Lease and other contract termination costs	1.0		—		1.0
Total cumulative restructuring charges	$	31.8	$	19.1	$	50.9

As of September 30, 2012, we have incurred cash expenditures of $9.0 million and non-cash charges of $28.3 million related to these restructuring actions.  The remaining balance of $13.6 million is expected to be paid out in 2012 through 2016.

ALLOWANCE FOR DOUBTFUL ACCOUNTS RECEIVABLES

We evaluate the collectibility of accounts receivable based on a combination of factors.  We estimate an allowance for doubtful accounts as a percentage of net sales based on historical bad debt experience.  This estimate is periodically adjusted when we become aware of a specific customer's inability to meet its financial obligations (e.g., bankruptcy filing) or as a result of changes in the overall aging of accounts receivable.  While we have a large number of customers that operate in diverse businesses and are geographically dispersed, a general economic downturn in any of the industry segments in which we operate could result in higher than expected defaults, and, therefore, the need to revise estimates for the provision for doubtful accounts could occur.

Allowance for doubtful accounts receivable consisted of the following:

	September 30,
	2012			2011
	($ in millions)
Balance at beginning of year	$	3.2		$	4.8
Provisions charged	0.6			0.8
(Write-offs) recoveries, net	(0.1		)	(1.7		)
Balance at end of period	$	3.7		$	3.9

Provisions (credited) charged to operations were $(0.4) million and $0.6 million for the three months ended September 30, 2012 and 2011, respectively.

14

INVENTORIES

Inventories consisted of the following:

	September 30, 2012			December 31, 2011			September 30, 2011
	($ in millions)
Supplies	$	35.6		$	35.0		$	32.8
Raw materials	73.1			75.7			69.8
Work in process	33.6			31.9			32.4
Finished goods	149.3			111.7			104.9
	291.6			254.3			239.9
LIFO reserve	(77.9		)	(77.7		)	(73.6		)
Inventories, net	$	213.7		$	176.6		$	166.3

In conjunction with the acquisition of KA Steel, we obtained inventories with a fair value of $35.8 million, as of August 22, 2012. In conjunction with the acquisition of SunBelt, we obtained inventories with a fair value of $4.0 million, as of February 28, 2011.  Inventories are valued at the lower of cost or market, with cost being determined principally by the dollar value last-in, first-out (LIFO) method of inventory accounting.  Cost for other inventories has been determined principally by the average cost method, primarily Chemical Distribution inventories, operating supplies, spare parts and maintenance parts.  Elements of costs in inventories included raw materials, direct labor and manufacturing overhead.  Inventories under the LIFO method are based on annual estimates of quantities and costs as of year-end; therefore, the condensed financial statements at September 30, 2012, reflect certain estimates relating to inventory quantities and costs at December 31, 2012.  If the first-in, first-out (FIFO) method of inventory accounting had been used, inventories would have been approximately $77.9 million, $77.7 million and $73.6 million higher than reported at September 30, 2012, December 31, 2011 and September 30, 2011, respectively.

OTHER ASSETS

Included in other assets were the following:

	September 30, 2012		December 31, 2011		September 30, 2011
	($ in millions)
Investments in non-consolidated affiliates	$	29.1	$	27.6	$	27.3
Intangible assets (less accumulated amortization of $9.8 million, $6.9 million and $6.2 million, respectively)	156.4		19.2		19.6
Deferred debt issuance costs	18.0		14.2		14.7
Interest rate swaps	8.9		13.8		14.3
Other	11.2		10.8		10.9
Other assets	$	223.6	$	85.6	$	86.8

15

EARNINGS PER SHARE

Basic and diluted net income per share are computed by dividing net income by the weighted average number of common shares outstanding.  Diluted net income per share reflects the dilutive effect of stock-based compensation.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
Computation of Income per Share	($ and shares in millions, except per share data)
Net income	$	28.7	$	47.2	$	115.0	$	223.0
Basic shares	80.1		80.2		80.1		79.9
Basic net income per share	$	0.36	$	0.59	$	1.44	$	2.79
Diluted shares:
Basic shares	80.1		80.2		80.1		79.9
Stock-based compensation	0.9		0.6		0.8		0.9
Diluted shares	81.0		80.8		80.9		80.8
Diluted net income per share	$	0.35	$	0.58	$	1.42	$	2.76

The computation of dilutive shares from stock-based compensation does not include 1.0 million shares and 1.7 million shares for the three months ended September 30, 2012 and 2011, respectively, and 1.0 million shares and 0.9 million shares for the nine months ended September 30, 2012, and 2011, respectively, as their effect would have been anti-dilutive.

ENVIRONMENTAL

We are party to various government and private environmental actions associated with past manufacturing facilities and former waste disposal sites.  Charges to income for investigatory and remedial efforts were material to operating results in 2012 and 2011.  The condensed balance sheets included reserves for future environmental expenditures to investigate and remediate known sites amounting to $150.5 million, $163.3 million and $164.6 million at September 30, 2012, December 31, 2011 and September 30, 2011, respectively, of which $119.5 million, $132.3 million and $136.6 million, respectively, were classified as other noncurrent liabilities.

Environmental provisions charged (credited) to income, which are included in cost of goods sold, were as follows:

	Three Months Ended September 30,					Nine Months Ended September 30,
	2012		2011			2012			2011
	($ in millions)
Charges to income	$	3.6	$	4.0		$	6.8		$	13.9
Recoveries from third parties of costs incurred and expensed in prior periods	—		(1.5		)	(0.1		)	(11.0		)
Total environmental expense	$	3.6	$	2.5		$	6.7		$	2.9

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Environmental exposures are difficult to assess for numerous reasons, including the identification of new sites, developments at sites resulting from investigatory studies, advances in technology, changes in environmental laws and regulations and their application, changes in regulatory authorities, the scarcity of reliable data pertaining to identified sites, the difficulty in assessing the involvement and financial capability of other potentially responsible parties (PRPs), our ability to obtain contributions from other parties, and the lengthy time periods over which site remediation occurs.  It is possible that some of these matters (the outcomes of which are subject to various uncertainties) may be resolved unfavorably to us, which could materially adversely affect our financial position or results of operations.

COMMITMENTS AND CONTINGENCIES

We, and our subsidiaries, are defendants in various legal actions (including proceedings based on alleged exposures to asbestos) incidental to our past and current business activities.  As of September 30, 2012, December 31, 2011 and September 30, 2011, our condensed balance sheets included liabilities for these legal actions of $15.8 million, $16.4 million and $16.1 million, respectively.  These liabilities do not include costs associated with legal representation.  Based on our analysis, and considering the inherent uncertainties associated with litigation, we do not believe that it is reasonably possible that these legal actions will materially adversely affect our financial position or results of operations in the near term.

During the ordinary course of our business, contingencies arise resulting from an existing condition, situation, or set of circumstances involving an uncertainty as to the realization of a possible gain contingency.  In certain instances such as environmental projects, we are responsible for managing the cleanup and remediation of an environmental site.  There exists the possibility of recovering a portion of these costs from other parties.  We account for gain contingencies in accordance with the provisions of Accounting Standards Codification (ASC) 450 “Contingencies” (ASC 450) and therefore do not record gain contingencies and recognize income until it is earned and realizable.

SHAREHOLDERS’ EQUITY

On July 21, 2011, our board of directors authorized a share repurchase program of up to 5 million shares of common stock that will terminate in three years for any of the remaining shares not yet repurchased.  For the nine months ended September 30, 2012 and 2011, 0.2 million and 0.1 million shares were purchased and retired under this program at a cost of $3.1 million and $2.2 million, respectively.  As of September 30, 2012, we had purchased a total of 0.4 million shares under this program and 4.6 million shares remained authorized to be purchased.

We issued 0.1 million and 0.5 million shares representing stock options exercised for the nine months ended September 30, 2012 and 2011, respectively, with a total value of $1.4 million and $9.3 million, respectively.

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The following table represents the activity included in accumulated other comprehensive loss:

	Foreign Currency Translation Adjustment			Unrealized Gains (Losses) on Derivative Contracts (net of taxes)			Pension and Postretirement Benefits (net of taxes)			Accumulated Other Comprehensive Loss
	($ in millions)
Balance at January 1, 2011	$	0.4		$	11.6		$	(273.8	)	$	(261.8	)
Unrealized gains (losses):
First quarter	1.3			0.4			—			1.7
Second quarter	1.0			(0.2		)	—			0.8
Third quarter	—			(13.2		)	—			(13.2		)
Reclassification adjustments into income:
First quarter	—			(3.5		)	2.8			(0.7		)
Second quarter	—			(2.9		)	3.3			0.4
Third quarter	—			(0.8		)	3.0			2.2
Balance at September 30, 2011	$	2.7		$	(8.6	)	$	(264.7	)	$	(270.6	)
Balance at January 1, 2012	$	1.8		$	(5.3	)	$	(290.7	)	$	(294.2	)
Unrealized gains (losses):
First quarter	0.3			2.6			—			2.9
Second quarter	(0.8		)	(4.1		)	—			(4.9		)
Third quarter	0.8			7.8			—			8.6
Reclassification adjustments into income:
First quarter	—			1.7			3.2			4.9
Second quarter	—			1.1			4.3			5.4
Third quarter	—			1.4			3.3			4.7
Balance at September 30, 2012	$	2.1		$	5.2		$	(279.9	)	$	(272.6	)

Pension and postretirement benefits (net of taxes) activity in other comprehensive loss included the amortization of prior service costs and actuarial losses.

Unrealized gains and losses on derivative contracts (net of taxes) activity in other comprehensive loss included deferred tax provisions (benefit) of $5.8 million and $(8.9) million for the three months ended September 30, 2012 and 2011, respectively, and $6.7 million and $(12.9) million for the nine months ended September 30, 2012 and 2011, respectively.  Pension and postretirement benefits (net of taxes) activity in other comprehensive loss included deferred tax provisions of $2.2 million and $1.9 million for the three months ended September 30, 2012 and 2011, respectively, and $6.8 million and $5.9 million for the nine months ended September 30, 2012 and 2011, respectively.

SEGMENT INFORMATION

We define segment results as income before interest expense, interest income, other operating income, other (expense) income and income taxes, and include the operating results of non-consolidated affiliates. Intersegment sales of $4.8 million for the three and nine months ended September 30, 2012, representing the sale of caustic soda, bleach, and hydrochloric acid to Chemical Distribution from Chlor Alkali Products, at prices that approximate market, have been eliminated from Chlor Alkali Products segment sales.

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	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Sales:	($ in millions)
Chlor Alkali Products	$	364.8		$	386.1		$	1,087.7		$	1,065.8
Chemical Distribution	47.6			—			47.6			—
Winchester	168.8			164.1			461.8			449.5
Total sales	$	581.2		$	550.2		$	1,597.1		$	1,515.3
Income before taxes:
Chlor Alkali Products	$	59.5		$	76.7		$	208.9		$	194.7
Chemical Distribution	1.9			—			1.9			—
Winchester	16.0			13.1			38.7			37.4
Corporate/other:
Pension income	7.2			6.9			20.5			20.8
Environmental expense	(3.6		)	(2.5		)	(6.7		)	(2.9		)
Other corporate and unallocated costs	(16.8		)	(15.7		)	(55.5		)	(52.8		)
Restructuring charges	(2.3		)	(4.1		)	(6.0		)	(6.6		)
Acquisition costs	(8.3		)	—			(8.3		)	(0.8		)
Other operating income	1.1			4.3			1.5			5.9
Interest expense	(6.0		)	(7.9		)	(18.3		)	(22.5		)
Interest income	0.2			0.2			0.7			0.7
Other (expense) income	(2.2		)	(1.6		)	(6.9		)	179.0
Income before taxes	$	46.7		$	69.4		$	170.5		$	352.9

STOCK-BASED COMPENSATION

Stock-based compensation granted includes stock options, performance stock awards, restricted stock awards and deferred directors’ compensation.  Stock-based compensation expense (income) was as follows:

	Three Months Ended September 30,					Nine Months Ended September 30,
	2012		2011			2012		2011
	($ in millions)
Stock-based compensation	$	2.2	$	1.9		$	6.0	$	6.7
Mark-to-market adjustments	0.5		(2.0		)	1.0		(1.2		)
Total expense (income)	$	2.7	$	(0.1	)	$	7.0	$	5.5

The fair value of each stock option granted, which typically vests ratably over three years, but not less than one year, was estimated on the date of grant, using the Black-Scholes option-pricing model with the following weighted-average assumptions:

Grant date	2012			2011
Dividend yield	3.65		%	4.32		%
Risk-free interest rate	1.36		%	3.05		%
Expected volatility	43		%	42		%
Expected life (years)	7.0			7.0
Grant fair value (per option)	$	6.55		$	5.48
Exercise price	$	21.92		$	18.78
Shares granted	480,250			575,000

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Dividend yield for 2012 and 2011 was based on a historical average.  Risk-free interest rate was based on zero coupon U.S. Treasury securities rates for the expected life of the options.  Expected volatility was based on our historical stock price movements, as we believe that historical experience is the best available indicator of the expected volatility.  Expected life of the option grant was based on historical exercise and cancellation patterns, as we believe that historical experience is the best estimate of future exercise patterns.

PENSION PLANS AND RETIREMENT BENEFITS

Most of our employees participate in defined contribution pension plans.  We provide a contribution to an individual retirement contribution account maintained with the Contributing Employee Ownership Plan (CEOP) primarily equal to 5% of the employee’s eligible compensation if such employee is less than age 45, and 7.5% of the employee’s eligible compensation if such employee is age 45 or older.  The defined contribution pension plans expense was $4.2 million and $3.5 million for the three months ended September 30, 2012 and 2011, respectively, and $12.3 million and $10.9 million for the nine months ended September 30, 2012 and 2011, respectively.

A portion of our bargaining hourly employees continue to participate in our domestic defined benefit pension plans under a flat-benefit formula.  Our funding policy for the defined benefit pension plans is consistent with the requirements of federal laws and regulations.  Our foreign subsidiaries maintain pension and other benefit plans, which are consistent with statutory practices.  Our defined benefit pension plan provides that if, within three years following a change of control of Olin, any corporate action is taken or filing made in contemplation of, among other things, a plan termination or merger or other transfer of assets or liabilities of the plan, and such termination, merger, or transfer thereafter takes place, plan benefits would automatically be increased for affected participants (and retired participants) to absorb any plan surplus (subject to applicable collective bargaining requirements).

We also provide certain postretirement health care (medical) and life insurance benefits for eligible active and retired domestic employees.  The health care plans are contributory with participants’ contributions adjusted annually based on medical rates of inflation and plan experience.

	Pension Benefits						Other Postretirement Benefits
	Three Months Ended September 30,						Three Months Ended September 30,
	2012			2011			2012		2011
Components of Net Periodic Benefit (Income) Cost	($ in millions)
Service cost	$	1.5		$	1.6		$	0.3	$	0.2
Interest cost	22.9			23.4			0.7		0.7
Expected return on plans’ assets	(34.9		)	(34.9		)	—		—
Amortization of prior service cost	0.1			0.1			—		—
Recognized actuarial loss	4.8			3.8			0.6		1.0
Net periodic benefit (income) cost	$	(5.6	)	$	(6.0	)	$	1.6	$	1.9

	Pension Benefits						Other Postretirement Benefits
	Nine Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Components of Net Periodic Benefit (Income) Cost	($ in millions)
Service cost	$	4.6		$	4.8		$	1.0		$	0.9
Interest cost	69.0			70.6			2.4			2.6
Expected return on plans’ assets	(104.7		)	(104.7		)	—			—
Amortization of prior service cost	0.2			0.3			(0.1		)	(0.1		)
Recognized actuarial loss	15.0			11.3			2.5			2.4
Curtailment	—			1.1			—			—
Net periodic benefit (income) cost	$	(15.9	)	$	(16.6	)	$	5.8		$	5.8

We made cash contributions to our Canadian qualified defined benefit pension plan of $0.6 million and $0.7 million for the nine months ended September 30, 2012 and 2011, respectively. In June 2011, we recorded a curtailment charge of $1.1 million related to the ratification of a new five and one half year Winchester, East Alton, IL union labor agreement. This curtailment charge was included in restructuring charges for the nine months ended September 30, 2011.

20

INCOME TAXES

The following table accounts for the difference between the actual tax provision and the amounts obtained by applying the statutory U.S. federal income tax rate of 35% to income before taxes.

	Three Months Ended September 30,				Nine Months Ended September 30,
Effective Tax Rate Reconciliation (Percent)	2012		2011		2012		2011
Statutory federal tax rate	35.0	%	35.0	%	35.0	%	35.0	%
Foreign rate differential	(0.1	)	(0.1	)	(0.1	)	—
Domestic manufacturing/export tax incentive	0.3		(1.6	)	(0.9	)	(0.8	)
Dividends paid to CEOP	(0.5	)	(0.4	)	(0.4	)	(0.2	)
State income taxes, net	1.5		2.4		1.0		1.2
Return to provision	0.7		2.0		0.3		0.6
Remeasurement of deferred taxes	0.5		—		0.8		(1.4	)
Section 45O tax credit	(0.6	)	—		(3.7	)	—
Incremental tax effect of SunBelt remeasurement	—		—		—		3.5
Change in tax contingencies	0.1		(5.2	)	0.7		(1.0	)
Change in valuation allowance	0.7		—		(0.3	)	—
Australia dividend residual tax expense	1.6		—		0.4		—
Other, net	(0.7	)	(0.1	)	(0.2	)	(0.1	)
Effective tax rate	38.5	%	32.0	%	32.6	%	36.8	%

The effective tax rates for the three months ended September 30, 2012 and 2011 included the cumulative effect of changes to our annual estimated effective tax rate from prior quarters.

The effective tax rate for the three and nine months ended September 30, 2012 included a benefit of $0.3 million and $6.3 million, respectively, associated with the Agricultural Chemicals Security Tax Credit under Section 45O of the Internal Revenue Code (IRC) (Section 45O), which is scheduled to sunset on December 31, 2012, that was or will be claimed on our 2008 to 2012 U.S. federal income tax returns. The effective tax rate for the three and nine months ended September 30, 2012 included expenses of $0.1 million and $1.3 million, respectively, associated primarily with changes in unrecognized tax benefits associated with prior years' tax positions. The effective tax rate for the three and nine months ended September 30, 2012 included a $0.7 million expense related to providing tax on previously undistributed earnings from our Winchester Australia Limited subsidiary. The effective tax rate for the three and nine months ended September 30, 2012 also included expenses of $0.2 million and $1.4 million, respectively, related to the remeasurement of deferred taxes due to an increase in state effective tax rates.

The effective tax rate for the three months ended September 30, 2011 included a $1.4 million expense associated with the finalization of our 2010 domestic income tax returns. The effective tax rate for the nine months ended September 30, 2011 included a benefit of $4.9 million related to remeasurement of deferred taxes due to an increase in state tax effective rates, a $2.1 million expense associated with the finalization of our 2010 domestic and Canadian income tax returns and a deferred tax expense of $76.0 million related to the tax effect of our gain on the remeasurement of our previously held 50% equity interest in SunBelt.

We completed the acquisition of KA Steel on August 22, 2012, with both parties agreeing to an election under Section 338(h)(10) of the U.S. IRC, which allows us to treat the transaction as an asset acquisition for U.S. federal income tax purposes. KA Steel does not carry forward any significant tax attributes and has an immaterial effect on our quarterly tax provision.

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As of September 30, 2012, we had $40.2 million of gross unrecognized tax benefits, which would have a net $38.4 million impact on the effective tax rate, if recognized.  As of September 30, 2011, we had $38.7 million of gross unrecognized tax benefits, of which $36.6 million would have impacted the effective tax rate, if recognized.  The amount of unrecognized tax benefits was as follows:

	September 30,
	2012			2011
	($ in millions)
Balance at beginning of year	$	37.9		$	41.5
Increases for prior year tax positions	2.9			0.2
Decreases for prior year tax positions	(0.4		)	—
Increases for current year tax positions	0.1			—
Settlement with taxing authorities	(0.3		)	—
Reductions due to statute of limitations	—			(3.0		)
Balance at end of period	$	40.2		$	38.7

As of September 30, 2012, we believe it is reasonably possible that our total amount of unrecognized tax benefits will decrease by approximately $8.3 million over the next twelve months.  The anticipated reduction primarily relates to settlements with taxing authorities and the expiration of federal, state and foreign statutes of limitation.

We operate primarily in North America and file income tax returns in numerous jurisdictions.  Our tax returns are subject to examination by various federal, state and local tax authorities.  We believe we have adequately provided for all tax positions; however, amounts asserted by taxing authorities could be greater than our accrued position.  For our primary tax jurisdictions, the tax years that remain subject to examination are as follows:

	Tax Years
U.S. federal income tax	2007 – 2011
U.S. state income tax	2004 – 2011
Canadian federal income tax	2007 – 2011
Canadian provincial income tax	2007 – 2011

DERIVATIVE FINANCIAL INSTRUMENTS

We are exposed to market risk in the normal course of our business operations due to our purchases of certain commodities, our ongoing investing and financing activities and our operations that use foreign currencies.  The risk of loss can be assessed from the perspective of adverse changes in fair values, cash flows and future earnings.  We have established policies and procedures governing our management of market risks and the use of financial instruments to manage exposure to such risks.  ASC 815 “Derivatives and Hedging” (ASC 815) requires an entity to recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value.  We use hedge accounting treatment for substantially all of our business transactions whose risks are covered using derivative instruments.  In accordance with ASC 815, we designate commodity forward contracts as cash flow hedges of forecasted purchases of commodities and certain interest rate swaps as fair value hedges of fixed-rate borrowings.  We do not enter into any derivative instruments for trading or speculative purposes.

Energy costs, including electricity used in our Chlor Alkali Products and Chemical Distribution segments, and certain raw materials and energy costs, namely copper, lead, zinc, electricity and natural gas used in our Winchester segment, are subject to price volatility.  Depending on market conditions, we may enter into futures contracts and put and call option contracts in order to reduce the impact of commodity price fluctuations.  The majority of our commodity derivatives expire within one year.  Those commodity contracts that extend beyond one year correspond with raw material purchases for long-term fixed-price sales contracts.

We enter into forward sales and purchase contracts to manage currency risk resulting from purchase and sale commitments denominated in foreign currencies (principally Canadian dollar and Australian dollar).  All of the currency derivatives expire within one year and are for United States dollar equivalents.  Our foreign currency forward contracts do not meet the criteria to qualify for hedge accounting.  At September 30, 2012, December 31, 2011 and September 30, 2011, we had forward contracts to sell foreign currencies with a notional value of $8.3 million, zero and zero, respectively.  We had no forward contracts to buy foreign currencies at September 30, 2012, December 31, 2011 and September 30, 2011.

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In March 2010, we entered into interest rate swaps on $125 million of our underlying fixed-rate debt obligations, whereby we agreed to pay variable rates to a counterparty who, in turn, pays us fixed rates.  The counterparty to these agreements is Citibank, N.A. (Citibank), a major financial institution.  In October 2011, we entered into $125 million of interest rate swaps with equal and opposite terms as the $125 million variable interest rate swaps on the 6.75% senior notes due 2016 (2016 Notes).  We have agreed to pay a fixed rate to a counterparty who, in turn, pays us variable rates.  The counterparty to this agreement is also Citibank.  The result was a gain of $11.0 million on the $125 million variable interest rate swaps, which will be recognized through 2016.  As of September 30, 2012, $8.9 million of this gain was included in long-term debt.  In October 2011, we de-designated our $125 million interest rate swaps that had previously been designated as fair value hedges.  The $125 million variable interest rate swaps and the $125 million fixed interest rate swaps do not meet the criteria for hedge accounting.  All changes in the fair value of these interest rate swaps are recorded currently in earnings.

In 2001 and 2002, we entered into interest rate swaps on $75 million of our underlying fixed-rate debt obligations, whereby we agreed to pay variable rates to a counterparty who, in turn, paid us fixed rates.  The counterparty to these agreements was Citibank.  In January 2009, we entered into a $75 million fixed interest rate swap with equal and opposite terms as the $75 million variable interest rate swaps on the 9.125% senior notes due 2011 (2011 Notes).  We agreed to pay a fixed rate to a counterparty who, in turn, paid us variable rates.  The counterparty to this agreement was Bank of America, N.A. (Bank of America), a major financial institution.  The result was a gain of $7.9 million on the $75 million variable interest rate swaps, which was recognized through 2011.  In January 2009, we de-designated our $75 million interest rate swaps that had previously been designated as fair value hedges.  The $75 million variable interest rate swaps and the $75 million fixed interest rate swap did not meet the criteria for hedge accounting.  All changes in the fair value of these interest rate swaps were recorded currently in earnings.

Cash flow hedges

ASC 815 requires that all derivative instruments be recorded on the balance sheet at their fair value.  For derivative instruments that are designated and qualify as a cash flow hedge, the change in fair value of the derivative is recognized as a component of other comprehensive loss until the hedged item is recognized in earnings.  Gains and losses on the derivatives representing hedge ineffectiveness are recognized currently in earnings.

We had the following notional amount of outstanding commodity forward contracts that were entered into to hedge forecasted purchases:

	September 30, 2012		December 31, 2011		September 30, 2011
	($ in millions)
Copper	$	59.8	$	52.1	$	54.3
Zinc	5.9		7.3		7.7
Lead	49.6		37.9		36.1
Natural gas	8.6		8.3		5.7

As of September 30, 2012, the counterparty to $85.6 million of these commodity forward contracts was Wells Fargo Bank, N.A. (Wells Fargo), a major financial institution.

We use cash flow hedges for certain raw material and energy costs such as copper, zinc, lead, electricity and natural gas to provide a measure of stability in managing our exposure to price fluctuations associated with forecasted purchases of raw materials and energy used in the company's manufacturing process.  At September 30, 2012, we had open positions in futures contracts through 2017.  If all open futures contracts had been settled on September 30, 2012, we would have recognized a pretax gain of $8.4 million.

If commodity prices were to remain at September 30, 2012 levels, approximately $5.9 million of deferred gains would be reclassified into earnings during the next twelve months.  The actual effect on earnings will be dependent on actual commodity prices when the forecasted transactions occur.

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Fair value hedges

For derivative instruments that are designated and qualify as a fair value hedge, the gain or loss on the derivative as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in current earnings.  We include the gain or loss on the hedged items (fixed-rate borrowings) in the same line item, interest expense, as the offsetting loss or gain on the related interest rate swaps.  As of September 30, 2012, December 31, 2011 and September 30, 2011, the total notional amounts of our interest rate swaps designated as fair value hedges were zero, $80.8 million and $218.0 million, respectively.

In June 2012, we terminated $73.1 million of interest rate swaps with Wells Fargo that had been entered into on the SunBelt Notes in May 2011. The result was a gain of $2.2 million, which will be recognized through 2017. As of September 30, 2012, $2.0 million of this gain was included in long-term debt. In March 2012, Citibank terminated $7.7 million of interest rate swaps on our industrial development and environmental improvement tax-exempt bonds (industrial revenue bonds) due in 2017.  The result was a gain of $0.2 million, which would have been recognized through 2017. In June 2012, the industrial revenue bonds were redeemed by us, and as a result, the remaining $0.2 million deferred gain was recognized in interest expense during the three months ended June 30, 2012.

We use interest rate swaps as a means of managing interest expense and floating interest rate exposure to optimal levels.  These interest rate swaps are treated as fair value hedges.  The accounting for gains and losses associated with changes in fair value of the derivative and the effect on the condensed financial statements will depend on the hedge designation and whether the hedge is effective in offsetting changes in fair value of cash flows of the asset or liability being hedged.  

Financial statement impacts

We present our derivative assets and liabilities in our condensed balance sheets on a net basis.  We net derivative assets and liabilities whenever we have a legally enforceable master netting agreement with the counterparty to our derivative contracts.  We use these agreements to manage and substantially reduce our potential counterparty credit risk.

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The following table summarizes the location and fair value of the derivative instruments on our condensed balance sheets.  The table disaggregates our net derivative assets and liabilities into gross components on a contract-by-contract basis before giving effect to master netting arrangements:

	Asset Derivatives								Liability Derivatives
		Fair Value								Fair Value
Derivatives Designated as Hedging Instruments	Balance Sheet Location	September 30, 2012			December 31, 2011		September 30, 2011		Balance Sheet Location	September 30, 2012		December 31, 2011			September 30, 2011
		($ in millions)								($ in millions)
Interest rate contracts	Other current assets	$	—		$	—	$	—	Current installments of long-term debt	$	—	$	—		$	0.6
Interest rate contracts	Other assets	—			2.2		14.3		Long-term debt	10.9		12.7			14.0
Interest rate contracts	Other assets	—			—		—		Other liabilities	—		—			0.2
Commodity contracts – gains	Other current assets	10.4			—		—		Accrued liabilities	—		(2.5		)	(2.3		)
Commodity contracts – losses	Other current assets	(2.0		)	—		—		Accrued liabilities	—		11.2			16.6
		$	8.4		$	2.2	$	14.3		$	10.9	$	21.4		$	29.1
Derivatives Not Designated as Hedging Instruments
Interest rate contracts	Other current assets	$	—		$	—	$	0.8	Accrued liabilities	$	—	$	—		$	0.3
Interest rate contracts – gains	Other assets	12.9			11.6		—		Other liabilities	—		—			—
Interest rate contracts – losses	Other assets	(4.0		)	—		—		Other liabilities	—		1.0			—
Commodity contracts – gains	Other current assets	0.7			—		—		Accrued liabilities	—		—			—
Commodity contracts – losses	Other current assets	(0.2		)	—		—		Accrued liabilities	—		1.5			0.4
		$	9.4		$	11.6	$	0.8		$	—	$	2.5		$	0.7
Total derivatives(1)		$	17.8		$	13.8	$	15.1		$	10.9	$	23.9		$	29.8

(1) Does not include the impact of cash collateral received from or provided to counterparties.

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The following table summarizes the effects of derivative instruments on our condensed statements of income:

		Amount of Gain (Loss)						Amount of Gain (Loss)
		Three Months Ended September 30,						Nine Months Ended September 30,
	Location of Gain (Loss)	2012			2011			2012			2011
Derivatives – Cash Flow Hedges		($ in millions)
Recognized in other comprehensive loss (effective portion)	———	$	12.7		$	(21.7	)	$	10.3		$	(21.3	)
Reclassified from accumulated other comprehensive loss into income (effective portion)	Cost of goods sold	$	(2.3	)	$	1.2		$	(6.9	)	$	11.8
Derivatives – Fair Value Hedges
Interest rate contracts	Interest expense	$	0.7		$	1.8		$	2.6		$	5.8
Derivatives Not Designated as Hedging Instruments
Interest rate contracts	Interest expense	$	0.1		$	(0.1	)	$	0.1		$	—
Commodity contracts	Cost of goods sold	0.7			(0.4		)	(1.7		)	(0.8		)
		$	0.8		$	(0.5	)	$	(1.6	)	$	(0.8	)

Credit risk and collateral

By using derivative instruments, we are exposed to credit and market risk.  If a counterparty fails to fulfill its performance obligations under a derivative contract, our credit risk will equal the fair-value gain in a derivative.  Generally, when the fair value of a derivative contract is positive, this indicates that the counterparty owes us, thus creating a repayment risk for us.  When the fair value of a derivative contract is negative, we owe the counterparty and, therefore, assume no repayment risk.  We minimize the credit (or repayment) risk in derivative instruments by entering into transactions with high-quality counterparties.  We monitor our positions and the credit ratings of our counterparties and we do not anticipate non-performance by the counterparties.

Based on the agreements with our various counterparties, cash collateral is required to be provided when the net fair value of the derivatives, with the counterparty, exceed a specific threshold.  If the threshold is exceeded, cash is either provided by the counterparty to us if the value of the derivatives is our asset, or cash is provided by us to the counterparty if the value of the derivatives is our liability.  As of September 30, 2012, December 31, 2011 and September 30, 2011, the amounts recognized in accrued liabilities for cash collateral provided by us to counterparties were zero, $3.9 million and $7.0 million, respectively.  In all instances where we are party to a master netting agreement, we offset the receivable or payable recognized upon payment of cash collateral against the fair value amounts recognized for derivative instruments that have also been offset under such master netting agreements.

FAIR VALUE MEASUREMENTS

Fair value is defined as the price at which an asset could be exchanged in a current transaction between knowledgeable, willing parties or the amount that would be paid to transfer a liability to a new obligor, not the amount that would be paid to settle the liability with the creditor.  Where available, fair value is based on observable market prices or parameters or derived from such prices or parameters.  Where observable prices or inputs are not available, valuation models are applied.  These valuation techniques involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the instruments or market and the instruments’ complexity.

Assets and liabilities recorded at fair value in the condensed balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair value.  Hierarchical levels, defined by ASC 820 “Fair Value Measurements and Disclosures” (ASC 820) are directly related to the amount of subjectivity associated with the inputs to fair valuation of these assets and liabilities, and are as follows:

Level 1 — Inputs were unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

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Level 2 — Inputs (other than quoted prices included in Level 1) were either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.

Level 3 — Inputs reflected management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date.  Consideration was given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.

We are required to separately disclose assets and liabilities measured at fair value on a recurring basis, from those measured at fair value on a nonrecurring basis.  Nonfinancial assets measured at fair value on a nonrecurring basis are intangible assets and goodwill, which are reviewed annually in the fourth quarter and/or when circumstances or other events indicate that impairment may have occurred.

Determining which hierarchical level an asset or liability falls within requires significant judgment.  We evaluate our hierarchy disclosures each quarter.  The following table summarizes the assets and liabilities measured at fair value in the condensed balance sheets:

	Fair Value Measurements
Balance at September 30, 2012	Level 1		Level 2		Level 3		Total
Assets	($ in millions)
Interest rate swaps	$	—	$	8.9	$	—	$	8.9
Commodity forward contracts	3.2		5.7		—		8.9
Liabilities
Interest rate swaps	$	—	$	10.9	$	—	$	10.9
Earn out	—		—		37.6		37.6
Balance at December 31, 2011
Assets
Interest rate swaps	$	—	$	13.8	$	—	$	13.8
Liabilities
Interest rate swaps	$	—	$	13.7	$	—	$	13.7
Commodity forward contracts	2.5		7.7		—		10.2
Earn out	—		—		49.0		49.0
Balance at September 30, 2011
Assets
Interest rate swaps	$	—	$	15.1	$	—	$	15.1
Liabilities
Interest rate swaps	$	—	$	15.1	$	—	$	15.1
Commodity forward contracts	4.8		9.9		—		14.7
Earn out	—		—		44.9		44.9

For the nine months ended September 30, 2012, there were no transfers into or out of Level 1 and Level 2.

The following table summarizes the activity for our earn out liability measured at fair value using Level 3 inputs:

	September 30,
	2012			2011
	($ in millions)
Balance at beginning of year	$	49.0		$	—
(Settlements) purchases	(18.5		)	42.3
Unrealized losses included in other (expense) income	7.1			2.6
Balance at end of period	$	37.6		$	44.9

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Interest Rate Swaps

The fair value of the interest rate swaps was included in other current assets, other assets, current installments of long-term debt, accrued liabilities, long-term debt and other liabilities as of September 30, 2012, December 31, 2011 and September 30, 2011.  These financial instruments were valued using the “income approach” valuation technique.  This method used valuation techniques to convert future amounts to a single present amount.  The measurement was based on the value indicated by current market expectations about those future amounts.  We use interest rate swaps as a means of managing interest expense and floating interest rate exposure to optimal levels.

Commodity Forward Contracts

The fair value of the commodity forward contracts was classified in other current assets and accrued liabilities as of September 30, 2012, December 31, 2011 and September 30, 2011, with unrealized gains and losses included in accumulated other comprehensive loss, net of applicable taxes.  These financial instruments were valued primarily based on prices and other relevant information observable in market transactions involving identical or comparable assets or liabilities including both forward and spot prices for commodities.  We use commodity forward contracts for certain raw materials and energy costs such as copper, zinc, lead, electricity and natural gas to provide a measure of stability in managing our exposure to price fluctuations.

Foreign Currency Contracts

We had no fair value of foreign currency contracts as of September 30, 2012, December 31, 2011 and September 30, 2011.  The gains and losses of foreign currency contracts were included in selling and administration expense as these financial instruments do not meet the criteria to qualify for hedge accounting.  These financial instruments were valued primarily based on prices and other relevant information observable in market transactions involving identical or comparable assets or liabilities including both forward and spot prices for foreign currencies.  We enter into forward sales and purchase contracts to manage currency risk resulting from purchase and sale commitments denominated in foreign currencies (principally Canadian dollar and Australian dollar).

Financial Instruments

The carrying values of cash and cash equivalents, restricted cash, accounts receivable and accounts payable approximated fair values due to the short-term maturities of these instruments.  The fair value of our long-term debt was determined based on current market rates for debt of similar risk and maturities.  The following table summarizes the fair value measurements of debt and the actual debt recorded on our condensed balance sheets:

	Fair Value Measurements
	Level 1		Level 2		Level 3		Total		Amount recorded on balance sheets
	($ in millions)
Balance at September 30, 2012	$	—	$	617.8	$	153.0	$	770.8	$	726.7
Balance at December 31, 2011	—		391.4		160.9		552.3		536.4
Balance at September 30, 2011	—		486.2		124.7		610.9		589.6

Earn Out

The fair value of the earn out associated with the SunBelt acquisition was estimated using a probability-weighted discounted cash flow model.  This fair value measurement is based on significant inputs not observed in the market.  Key assumptions in determining the fair value of the earn out include the discount rate and cash flow projections for the years ended December 31, 2012 and 2013.

For the nine months ended September 30, 2012, we paid $18.5 million for the earn out related to the 2011 SunBelt performance.  The 2011 earn out payment included $15.3 million that was recognized as part of the original purchase price.  The $15.3 million is included as a financing activity in the statement of cash flows.

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Nonrecurring Fair Value Measurements

In addition to assets and liabilities that are recorded at fair value on a recurring basis, we record assets and liabilities at fair value on a nonrecurring basis as required by ASC 820.  There were no assets measured at fair value on a nonrecurring basis as of September 30, 2012, December 31, 2011 and September 30, 2011.  At February 28, 2011, $180.6 million of assets were measured at fair value on a nonrecurring basis.  We recognized a gain of $181.4 million for the nine months ended September 30, 2011 on our previously held investment in SunBelt, which had been accounted for under the equity method of accounting prior to the acquisition.  We remeasured our equity interest in SunBelt of $(0.8) million based on our purchase of PolyOne’s 50% interest in SunBelt.  We used Level 1 inputs for the cash payments and Level 3 inputs for the estimated earn out.

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Business Background

Our manufacturing operations are concentrated in three business segments:  Chlor Alkali Products, Chemical Distribution and Winchester.  Chlor Alkali Products and Winchester are both capital intensive manufacturing businesses. Chlor Alkali Products operating rates are closely tied to the general economy.  Each segment has a commodity element to it, and therefore, our ability to influence pricing is quite limited on the portion of the segment’s business that is strictly commodity.  Our Chlor Alkali Products and Chemical Distribution businesses are commodity businesses where all supplier products are similar and price is the major supplier selection criterion.  We have little or no ability to influence prices in this large, global commodity market.  Cyclical price swings, driven by changes in supply/demand, can be abrupt and significant and, given the capacity in our Chlor Alkali Products business, can lead to significant changes in our overall profitability.  Winchester also has a commodity element to its business, but a majority of Winchester ammunition is sold as a branded consumer product where there are opportunities to differentiate certain offerings through innovative new product development and enhanced product performance.  While competitive pricing versus other branded ammunition products is important, it is not the only factor in product selection.

Executive Summary

KA Steel Acquisition

On August 22, 2012, we acquired privately-held KA Steel, on a debt free basis, for $338.5 million in cash, subject to certain post-closing adjustments. As of the date of acquisition, KA Steel had cash and cash equivalents of $26.2 million. The price paid is subject to a customary working capital adjustment. KA Steel is one of the largest distributors of caustic soda in North America and manufacturers and sells bleach in the Midwest. As part of the acquisition, we expensed $8.3 million of acquisition costs in the three and nine months ended September 30, 2012.

For segment reporting purposes, KA Steel comprises the newly created Chemical Distribution segment. Our results for the three and nine months ended September 30, 2012 include KA Steel sales of $47.6 million and $1.9 million of segment income, which includes depreciation and amortization expense of $1.7 million primarily associated with the acquisition fair valuing of KA Steel.

As a result of acquiring KA Steel, we anticipate realizing approximately $35 million of annual synergies at the end of three years. These synergies include opportunities to sell additional volumes of products we produce such as bleach, hydrochloric acid and potassium hydroxide through KA Steel and to optimize freight cost and logistics assets between us and KA Steel. Also, under the terms of the acquisition, both parties agreed to make an election under Section 338(h)(10) of the U.S. IRC that is expected to result in cash tax benefits to us that have a net present value of approximately $60 million.

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Financing

On August 22, 2012, we sold $200 million of 2022 Notes with a maturity of August 15, 2022. The 2022 Notes were issued at par value. Interest will be paid semi-annually beginning on February 15, 2013. The acquisition of KA Steel was partially financed with proceeds of $196.0 million, after expenses of $4.0 million, from the 2022 Notes.

Other Highlights

Chlor Alkali Products’ segment income was $59.5 million and $208.9 million for the three and nine months ended September 30, 2012, respectively. Chlor Alkali Products' third quarter 2012 segment income decreased 22% compared to the third quarter of 2011. Segment income was lower than the comparable period in the prior year, as a result of lower ECU prices and decreased chlorine and caustic soda volumes. Third quarter 2012 also included $4.9 million of costs associated with two plant startups. Operating rates in Chlor Alkali Products for the third quarter of 2012 were 83%, which was higher than the second quarter of 2012 level of 79% but lower than third quarter of 2011 level of 85%.

Third quarter of 2012 ECU netbacks of approximately $560 were 6% lower than the third quarter of 2011 ECU netbacks of $595, and 3% lower than the second quarter of 2012 level of approximately $575. The decline from both periods was due to lower chlorine prices.  ECU netbacks in the fourth quarter of 2012 are forecast to be higher than the third quarter of 2012 reflecting benefits from a portion of the caustic soda price increase that was announced in the second quarter totaling $60 per ton.  In the third quarter of 2012, an additional caustic soda price increase was announced of $70 per ton. While the success of the $70 per ton caustic soda price increase is not yet known, the majority of the benefit, if realized, would impact first quarter 2013 results.

Winchester segment income was $16.0 million and $38.7 million for the three and nine months ended September 30, 2012, respectively. The increase in third quarter and year to date segment income compared to the comparable periods last year reflects the impact of higher selling prices and lower commodity metals costs, partially offset by higher other material costs, higher manufacturing costs and transition costs associated with our ongoing relocation of the centerfire operations to Oxford, MS.

During the third quarter, we were notified by the U.S. Army that our joint venture with BAE Systems, named U.S. Munitions, was not the successful bidder for the Lake City Army Ammunition plant contract. The Lake City Army Ammunition Plant is the U.S. Army's primary manufacturing location for small caliber ammunition.

Capital spending of $210.8 million for the nine months ended September 30, 2012 included $101.0 million for the conversion of our Charleston, TN facility from mercury cell technology to membrane technology, $46.9 million for the construction of low salt, high strength bleach facilities at our McIntosh, AL; Henderson, NV; and Niagara Falls, NY chlor alkali sites and $15.2 million for our ongoing relocation of our Winchester centerfire ammunition manufacturing operations.  We completed low salt, high strength bleach facilities at McIntosh, AL and Niagara Falls, NY in the first and third quarters of 2012, respectively. Also, the first of the two new membrane cell rooms at Charleston, TN was successfully started up in the third quarter.

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Consolidated Results of Operations

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
	($ in millions, except per share data)
Sales	$	581.2		$	550.2		$	1,597.1		$	1,515.3
Cost of goods sold	475.8			432.7			1,260.1			1,205.6
Gross margin	105.4			117.5			337.0			309.7
Selling and administration	42.4			39.8			131.2			121.0
Restructuring charges	2.3			4.1			6.0			6.6
Acquisition costs	8.3			—			8.3			0.8
Other operating income	1.1			4.3			1.5			5.9
Operating income	53.5			77.9			193.0			187.2
Earnings of non-consolidated affiliates	1.2			0.8			2.0			8.5
Interest expense	6.0			7.9			18.3			22.5
Interest income	0.2			0.2			0.7			0.7
Other (expense) income	(2.2		)	(1.6		)	(6.9		)	179.0
Income before taxes	46.7			69.4			170.5			352.9
Income tax provision	18.0			22.2			55.5			129.9
Net income	$	28.7		$	47.2		$	115.0		$	223.0
Net income per common share:
Basic	$	0.36		$	0.59		$	1.44		$	2.79
Diluted	$	0.35		$	0.58		$	1.42		$	2.76

Three Months Ended September 30, 2012 Compared to Three Months Ended September 30, 2011

Sales for the three months ended September 30, 2012 were $581.2 million compared to $550.2 million in the same period last year, an increase of $31.0 million, or 6%.  Sales of the newly acquired Chemical Distribution segment were $47.6 million. Chlor Alkali Products’ sales decreased $21.3 million, or 6%, primarily due to decreased chlorine and caustic soda volumes and lower ECU prices.  Our ECU netbacks decreased 6% compared to the same period in the prior year.  Winchester sales increased by $4.7 million, or 3%, from the three months ended September 30, 2011 primarily due to higher selling prices and increased shipments to domestic commercial customers, partially offset by lower shipments to law enforcement agencies and military customers.

Gross margin decreased $12.1 million, or 10%, compared to the three months ended September 30, 2011, primarily as a result of lower ECU netbacks and decreased chlorine and caustic soda volumes, partially offset by increased gross margin from bleach and hydrochloric acid, increased Winchester gross margin resulting from higher selling prices and additional gross margin contributed by the newly acquired Chemical Distribution segment.  Gross margin as a percentage of sales decreased to 18% in 2012 from 21% in 2011.

Selling and administration expenses for the three months ended September 30, 2012 increased $2.6 million, or 7%, from the three months ended September 30, 2011 primarily due to increased management incentive compensation expense of $4.0 million, primarily due to mark-to-market adjustments on stock-based compensation and selling and administration expenses of the acquired KA Steel operations of $0.9 million, partially offset by reduced relocation costs of $1.5 million and lower bad debt costs of $1.0 million. Selling and administration expenses as a percentage of sales were 7% in 2012 and 2011.

Restructuring charges for the three months ended September 30, 2012 and 2011 were associated with exiting the use of mercury cell technology in the chlor alkali manufacturing process by the end of 2012 and our ongoing relocation of our Winchester centerfire ammunition manufacturing operations from East Alton, IL to Oxford, MS.

Acquisition costs for the three months ended September 30, 2012 were related to the acquisition of KA Steel.

Other operating income for the three months ended September 30, 2012 decreased by $3.2 million from the same period in 2011.  Other operating income for the three months ended September 30, 2011 included a gain of $3.7 million on the sale of a former manufacturing site.

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Interest expense decreased by $1.9 million in 2012, primarily due to an increase of $2.2 million in capitalized interest, primarily associated with the conversion of our Charleston, TN facility from mercury cell technology to membrane technology, and lower interest rates, partially offset by a higher level of debt outstanding.

Other (expense) income for the three months ended September 30, 2012 and 2011 included $2.3 million and $1.7 million, respectively, of expense for our earn out liability from the SunBelt acquisition.  

The effective tax rate for the three months ended September 30, 2012 included a $0.7 million expense associated with previously undistributed earnings from our Winchester Australia Limited subsidiary, a $0.3 million expense associated with the finalization of prior year's income tax returns and $0.2 million expense associated with the remeasurement of deferred taxes. After giving consideration to these three items of $1.2 million, the effective tax rate for the three months ended September 30, 2012 of 36.0% was higher than the 35% U.S. federal statutory rate, primarily due to state income taxes, which were partially offset by favorable permanent tax deduction items and the utilization of certain state tax credits. The effective tax rate for the three months ended September 30, 2011 included a $3.6 million reduction in expense associated with the expiration of statutes of limitation in domestic jurisdictions and a $1.4 million expense associated with the finalization of our 2010 domestic income tax returns.  After giving consideration to these two items of $2.2 million, the effective tax rate for the three months ended September 30, 2011 of 35.2% was higher than the 35% U.S. federal statutory rate primarily due to state income taxes, which were partially offset by favorable permanent tax deduction items and the utilization of certain state tax credits.

Nine Months EndedSeptember 30, 2012 Compared to Nine Months EndedSeptember 30, 2011

Sales for the nine months ended September 30, 2012 were $1,597.1 million compared to $1,515.3 million in the same period last year, an increase of $81.8 million, or 5%.  Sales of the newly acquired Chemical Distribution segment were $47.6 million. Chlor Alkali Products’ sales increased $21.9 million, or 2%, primarily due to higher ECU prices and the ownership of SunBelt for the full period.  Our ECU netbacks, including SunBelt, increased 3% compared to the same period in the prior year.  Winchester sales increased by $12.3 million, or 3%, from the nine months ended September 30, 2011 primarily due to higher selling prices and increased shipments to domestic commercial customers, partially offset by lower shipments to law enforcement agencies and military customers.

Gross margin increased $27.3 million, or 9%, compared to the nine months ended September 30, 2011, primarily as a result of higher ECU netbacks, the ownership of SunBelt for the full period, increased gross margin from bleach and hydrochloric acid, and additional gross margin contributed by the newly acquired Chemical Distribution segment, partially offset by the impact of decreased recoveries of $10.9 million from third parties for environmental costs incurred and expensed in prior periods.  There were $0.1 million of recoveries for environmental costs incurred and expensed in prior periods for the nine months ended September 30, 2012. Gross margin as a percentage of sales increased to 21% in 2012 from 20% in 2011.

Selling and administration expenses for the nine months ended September 30, 2012 increased $10.2 million, or 8%, from the nine months ended September 30, 2011 primarily due to a higher level of legal and legal-related settlement expenses of $3.9 million, increased salary and benefit costs of $3.5 million, increased management incentive compensation expense of $3.5 million, which includes mark-to-market adjustments on stock-based compensation, the inclusion of a full period of SunBelt’s selling and administration expenses of $1.5 million and selling and administration expenses of the acquired KA Steel operations of $0.9 million.  These increases were partially offset by reduced relocation costs of $3.5 million.  Selling and administration expenses as a percentage of sales were 8% in 2012 and 2011.

Restructuring charges for the nine months ended September 30, 2012 and 2011 were associated with exiting the use of mercury cell technology in the chlor alkali manufacturing process by the end of 2012 and our ongoing relocation of our Winchester centerfire ammunition manufacturing operations from East Alton, IL to Oxford, MS.

Acquisition costs for the nine months ended September 30, 2012 were related to the acquisition of KA Steel. Acquisition costs for the nine months ended September 30, 2011 were related to the acquisition of the remaining 50% of SunBelt.

Other operating income for the nine months ended September 30, 2012 decreased by $4.4 million from the same period in 2011.  Other operating income for the nine months ended September 30, 2012 and 2011 included $0.9 million and $1.1 million, respectively, on the disposition of property, plant and equipment primarily associated with the Charleston, TN conversion project. Other operating income for the nine months ended September 30, 2011 also included a gain of $3.7 million on the sale of a former manufacturing site.

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The earnings of non-consolidated affiliates were $2.0 million for the nine months ended September 30, 2012, a decrease of $6.5 million from the nine months ended September 30, 2011.  On February 28, 2011, we acquired the remaining 50% interest in SunBelt.  Since the date of acquisition, SunBelt’s results are no longer included in earnings of non-consolidated affiliates but are consolidated in our financial statements.

Interest expense decreased by $4.2 million in 2012, primarily due to an increase of $4.6 million in capitalized interest, primarily associated with the conversion of our Charleston, TN facility from mercury cell technology to membrane technology, partially offset by a higher level of debt outstanding.

Other (expense) income for the nine months ended September 30, 2012 and 2011 included $7.1 million and $2.6 million, respectively, of expense for our earn out liability from the SunBelt acquisition.  Other (expense) income for the nine months ended September 30, 2011 also included a gain of $181.4 million as a result of remeasuring our previously held 50% equity interest in SunBelt.

The effective tax rate for the nine months ended September 30, 2012 included a $6.3 million benefit related to the Section 45O credits and a $1.4 million benefit related to a valuation allowance release related to our state tax credits, partially offset by a $1.4 million expense associated with the remeasurement of deferred taxes, a $1.3 million expense associated with changes in tax contingencies, and a $0.7 million expense associated with previously undistributed earnings from our Winchester Australia Limited subsidiary. After giving consideration to these five items of $4.3 million, the effective tax rate for the nine months ended September 30, 2012 of 35.1% was slightly higher than the 35% U.S. federal statutory rate, primarily due to the effect of state income taxes, which were partially offset by favorable permanent tax deductions and the utilization of certain state tax credits. The effective tax rate for the nine months ended September 30, 2011 included a $3.5 million reduction in expense associated with the expiration of statutes of limitation in domestic jurisdictions, a $4.9 million reduction in expense associated with the remeasurement of deferred taxes due to an increase in state effective tax rates, a $2.1 million expense associated with the finalization of our 2010 domestic and Canadian tax returns and a $76.0 million increase in expense associated with the remeasurement of our SunBelt investment.  After giving consideration to these four items of $69.7 million, and the SunBelt pretax gain of $181.4 million, for the nine months ended September 30, 2011, the effective tax rate of 35.1% was slightly higher than the 35% U.S. federal statutory rate, primarily due to the effect of state income taxes which were partially offset by favorable permanent tax deduction items and the utilization of certain state tax credits.

Segment Results

We define segment results as income before interest expense, interest income, other operating income, other (expense) income and income taxes, and include the operating results of non-consolidated affiliates. Intersegment sales of $4.8 million for the three and nine months ended September 30, 2012, representing the sale of caustic soda, bleach, and hydrochloric acid to Chemical Distribution from Chlor Alkali Products, at prices that approximate market, have been eliminated from Chlor Alkali Products segment sales.

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	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Sales:	($ in millions)
Chlor Alkali Products	$	364.8		$	386.1		$	1,087.7		$	1,065.8
Chemical Distribution	47.6			—			47.6			—
Winchester	168.8			164.1			461.8			449.5
Total sales	$	581.2		$	550.2		$	1,597.1		$	1,515.3
Income before taxes:
Chlor Alkali Products(1)	$	59.5		$	76.7		$	208.9		$	194.7
Chemical Distribution	1.9			—			1.9			—
Winchester	16.0			13.1			38.7			37.4
Corporate/other:
Pension income(2)	7.2			6.9			20.5			20.8
Environmental expense(3)	(3.6		)	(2.5		)	(6.7		)	(2.9		)
Other corporate and unallocated costs	(16.8		)	(15.7		)	(55.5		)	(52.8		)
Restructuring charges(4)	(2.3		)	(4.1		)	(6.0		)	(6.6		)
Acquisition costs(5)	(8.3		)	—			(8.3		)	(0.8		)
Other operating income(6)	1.1			4.3			1.5			5.9
Interest expense(7)	(6.0		)	(7.9		)	(18.3		)	(22.5		)
Interest income	0.2			0.2			0.7			0.7
Other (expense) income(8)	(2.2		)	(1.6		)	(6.9		)	179.0
Income before taxes	$	46.7		$	69.4		$	170.5		$	352.9

(1) Earnings of non-consolidated affiliates were included in the Chlor Alkali Products segment results consistent with management’s monitoring of the operating segments.  The earnings of non-consolidated affiliates were $1.2 million and $0.8 million for the three months ended September 30, 2012 and 2011, respectively, and $2.0 million and $8.5 million for the nine months ended September 30, 2012 and 2011, respectively.  On February 28, 2011, we acquired the remaining 50% interest in SunBelt.  Since the date of acquisition, SunBelt’s results are no longer included in earnings of non-consolidated affiliates but are consolidated in our financial statements.

(2) The service cost and the amortization of prior service cost components of pension expense related to the employees of the operating segments are allocated to the operating segments based on their respective estimated census data.  All other components of pension costs are included in corporate/other and include items such as the expected return on plan assets, interest cost and recognized actuarial gains and losses.

(3) Environmental expense for the three months ended September 30, 2012 and 2011 included zero and $1.5 million, respectively, of recoveries from third parties for costs incurred and expensed in prior periods.  Environmental expense for the nine months ended September 30, 2012 and 2011 included $0.1 million and $11.0 million, respectively, of recoveries from third parties for costs incurred and expensed in prior periods.  Environmental expense is included in cost of goods sold in the condensed statements of income.

(4) Restructuring charges for the three and nine months ended September 30, 2012 and 2011 were associated with exiting the use of mercury cell technology in the chlor alkali manufacturing process by the end of 2012 and our ongoing relocation of our Winchester centerfire ammunition manufacturing operations from East Alton, IL to Oxford, MS.

(5) Acquisition costs for the three and nine months ended September 30, 2012 were related to the acquisition of KA Steel. Acquisition costs for the nine months ended September 30, 2011 were related to the acquisition of the remaining 50% of SunBelt.

(6) Other operating income for the three and nine months ended September 30, 2011 included a gain of $3.7 million on the sale of a former manufacturing site.

(7) Interest expense was reduced by capitalized interest of $2.5 million and $0.3 million for the three months ended September 30, 2012 and 2011, respectively, and $5.3 million and $0.7 million for the nine months ended September 30,

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2012 and 2011, respectively.

(8) Other (expense) income for the three months ended September 30, 2012 and 2011 included $2.3 million and $1.7 million, respectively, of expense for our earn out liability from the SunBelt acquisition and $7.1 million and $2.6 million for the nine months ended September 30, 2012 and 2011, respectively.  Other (expense) income for the nine months ended September 30, 2011 also included a pretax gain of $181.4 million as a result of remeasuring our previously held 50% equity interest in SunBelt.  The income tax provision for the nine months ended September 30, 2011 included a $76.0 million discrete deferred tax expense as a result of the remeasurement of the SunBelt investment.

Chlor Alkali Products

Three Months Ended September 30, 2012 Compared to Three Months Ended September 30, 2011

Chlor Alkali Products’ sales for the three months ended September 30, 2012 were $364.8 million compared to $386.1 million for the three months ended September 30, 2011, a decrease of $21.3 million, or 6%.  The sales decrease was primarily due to lower chlorine and caustic soda volumes of 5% and lower ECU pricing, which decreased 6% from the three months ended September 30, 2011.  The decreases were partially offset by increased bleach volumes of 9% for the three months ended September 30, 2012 compared to the same period last year. Our ECU netback, including SunBelt, was approximately $560 for the three months ended September 30, 2012 compared to approximately $595 for the three months ended September 30, 2011.  Freight costs included in the ECU netback decreased 2% for the three months ended September 30, 2012, compared to the same period last year.  Our operating rate for the three months ended September 30, 2012 was 83%, compared to the operating rate of 85% for the three months ended September 30, 2011. The lower operating rate for 2012 resulted from lower chlorine demand.

Chlor Alkali Products generated segment income of $59.5 million for the three months ended September 30, 2012, compared to $76.7 million for the same period in 2011, a decrease of $17.2 million.  Chlor Alkali Products segment income was lower primarily due to decreased volumes ($9.2 million) and lower ECU netbacks ($8.4 million), partially offset by decreased operating costs ($0.4 million).

Nine Months EndedSeptember 30, 2012 Compared to Nine Months EndedSeptember 30, 2011

Chlor Alkali Products’ sales for the nine months ended September 30, 2012 were $1,087.7 million compared to $1,065.8 million for the nine months ended September 30, 2011, an increase of $21.9 million, or 2%.  The sales increase was primarily due to higher ECU pricing, which increased 3% from the nine months ended September 30, 2011, and increased SunBelt sales of $33.1 million for the additional two months of our ownership.  Bleach volumes increased 9% for the nine months ended September 30, 2012 compared to the same period last year, while hydrochloric acid volumes also increased 6% compared to the nine months ended September 30, 2011.  Our ECU netback, including SunBelt, was approximately $575 for the nine months ended September 30, 2012 compared to approximately $560 for the nine months ended September 30, 2011.  Freight costs included in the ECU netback increased 3% for the nine months ended September 30, 2012, compared to the same period last year, primarily due to higher railroad freight rates.  Our operating rate for the nine months ended September 30, 2012 was 81%, compared to the operating rate of 83% for the nine months ended September 30, 2011.

Chlor Alkali Products generated segment income of $208.9 million for the nine months ended September 30, 2012, compared to $194.7 million for the same period in 2011, an increase of $14.2 million.  Chlor Alkali Products segment income was higher primarily due to higher ECU netbacks ($23.8 million), higher SunBelt earnings for the additional two months of our ownership ($8.3 million), primarily related to higher ECU netbacks and $7.5 million of additional income on the remaining 50% interest we acquired, and decreased operating costs ($2.1 million).  These increases were partially offset by decreased volumes ($20.0 million).

Chemical Distribution

For segment reporting purposes, KA Steel comprises the newly created Chemical Distribution segment. The KA Steel results of operations have been included in our consolidated results for the period subsequent to the effective date of the acquisition. Our results for the three and nine months ended September 30, 2012 include KA Steel sales of $47.6 million and $1.9 million of segment income, which includes depreciation and amortization expense of $1.7 million primarily associated with the acquisition fair valuing of KA Steel.

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Winchester

Three Months Ended September 30, 2012 Compared to Three Months Ended September 30, 2011

Winchester sales were $168.8 million for the three months ended September 30, 2012 compared to $164.1 million for the three months ended September 30, 2011, an increase of $4.7 million, or 3%.  The increase was primarily due to higher sales of ammunition to domestic commercial customers of $12.9 million, partially offset by lower shipments to military customers of $7.7 million and decreased shipments to law enforcement agencies of $1.2 million. Shipments to international customers were comparable to the same period last year.

Winchester reported segment income of $16.0 million for the three months ended September 30, 2012 compared to $13.1 million for the three months ended September 30, 2011, an increase of $2.9 million, or 22%.  The increase was primarily due to higher selling prices and the impact of decreased commodity costs ($8.0 million), partially offset by decreased volumes, increased other material costs and higher operating costs ($5.1 million).

Nine Months EndedSeptember 30, 2012 Compared to Nine Months EndedSeptember 30, 2011

Winchester sales were $461.8 million for the nine months ended September 30, 2012 compared to $449.5 million for the nine months ended September 30, 2011, an increase of $12.3 million, or 3%.  Sales of ammunition to domestic commercial customers were higher by $25.0 million.  This increase was partially offset by a reduction in shipments to law enforcement agencies of $8.2 million and reduced shipments to military customers of $5.8 million.  Shipments to international customers were comparable to the same period last year.

Winchester reported segment income of $38.7 million for the nine months ended September 30, 2012 compared to $37.4 million for the nine months ended September 30, 2011, an increase of $1.3 million, or 3%.  The increase was primarily due to higher selling prices and the impact of decreased commodity costs ($14.2 million), partially offset by decreased volumes, increased other material costs, higher operating costs and transition costs associated with our ongoing relocation of the centerfire operations to Oxford, MS ($12.9 million).

Corporate/Other

Three Months Ended September 30, 2012 Compared to Three Months Ended September 30, 2011

For the three months ended September 30, 2012, pension income included in corporate/other was $7.2 million compared to $6.9 million for the three months ended September 30, 2011.  On a total company basis, defined benefit pension income for the three months ended September 30, 2012 was $5.6 million compared to $6.0 million for the three months ended September 30, 2011.

For the three months ended September 30, 2012, charges to income for environmental investigatory and remedial activities were $3.6 million compared to $2.5 million for the three months ended September 30, 2011, which included $1.5 million of recoveries from third parties for costs incurred and expensed in prior periods.  Without these recoveries, charges to income for environmental investigatory and remedial activities would have been $3.6 million for the three months ended September 30, 2012 compared to $4.0 million for the three months ended September 30, 2011.  These charges related primarily to expected future investigatory and remedial activities associated with past manufacturing operations and former waste disposal sites.

For the three months ended September 30, 2012, other corporate and unallocated costs were $16.8 million compared to $15.7 million for the three months ended September 30, 2011, an increase of $1.1 million, or 7%.  The increase was primarily due to higher management incentive compensation expense of $2.7 million, which includes mark-to-market adjustments on stock-based compensation, and the elimination of intersegment profits in inventory on sales from the Chlor Alkali Products segment to the Chemical Distribution segment of $1.1 million, partially offset by a lower level of legal and legal-related settlement expenses of $1.0 million and lower salary and benefit costs of $1.0 million.

Nine Months EndedSeptember 30, 2012 Compared to Nine Months EndedSeptember 30, 2011

For the nine months ended September 30, 2012, pension income included in corporate/other was $20.5 million compared to $20.8 million for the nine months ended September 30, 2011.  On a total company basis, defined benefit pension income for the nine months ended September 30, 2012 was $15.9 million compared to $16.6 million for the nine months ended September 30, 2011.

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For the nine months ended September 30, 2012, charges to income for environmental investigatory and remedial activities were $6.7 million compared to $2.9 million for the nine months ended September 30, 2011, which included $0.1 million and $11.0 million, respectively, of recoveries from third parties for costs incurred and expensed in prior periods.  Without these recoveries, charges to income for environmental investigatory and remedial activities would have been $6.8 million for the nine months ended September 30, 2012 compared to $13.9 million for the nine months ended September 30, 2011.  These charges related primarily to expected future investigatory and remedial activities associated with past manufacturing operations and former waste disposal sites.

For the nine months ended September 30, 2012, other corporate and unallocated costs were $55.5 million compared to $52.8 million for the nine months ended September 30, 2011, an increase of $2.7 million, or 5%.  The increase was primarily due to higher stock-based compensation of $1.5 million, primarily resulting from mark-to-market adjustments and the elimination of intersegment profits in inventory on sales from the Chlor Alkali Products segment to the Chemical Distribution segment of $1.1 million.

Outlook

Net income in the fourth quarter of 2012 is projected to be in the $0.30 to $0.35 per diluted share range compared with $0.23 per diluted share in the fourth quarter of 2011.

In Chlor Alkali Products, the fourth quarter of 2012 segment income is expected to increase slightly compared to the fourth quarter of 2011 income of $50.3 million. The expected higher segment income compared to the fourth quarter of 2011 is due to higher volumes which more than offset lower pricing. Fourth quarter 2012 Chlor Alkali volumes are forecasted to be negatively impacted by anticipated customer outages and weaker seasonal chlorine demand. The fourth quarter of 2012 outlook also anticipates approximately $3 million of costs associated with four scheduled Olin plant maintenance outages. The Chlor Alkali Products' operating rate in the fourth quarter of 2012 is forecast to be in the mid 70% range.

Third quarter of 2012 ECU netbacks of approximately $560, were 6% lower than the third quarter of 2011 ECU netbacks of $595 and 3% lower than the second quarter of 2012 level of approximately $575. The decline from both periods was due to lower chlorine prices. ECU netbacks in the fourth quarter of 2012 are forecast to be higher than the third quarter of 2012 as benefits from a portion of the second quarter of 2012 $60 per ton caustic soda price increase more than offset continued weakness in chlorine pricing. In the third quarter of 2012, an additional caustic soda price increase was announced of $70 per ton. While the success of the $70 per ton caustic soda price increase is not yet known, the majority of the benefit, if realized, would impact first quarter 2013 results.

Bleach volumes in the third quarter of 2012 increased approximately 9% compared to third quarter 2011 levels. We have now experienced nineteen consecutive quarters, on a year-over-year basis, of volume growth in bleach shipments. The startup of our low salt, high strength bleach facilities in McIntosh, AL in the first quarter of 2012 and Niagara Falls, NY in the third quarter of 2012 increased our chlor alkali capacity that can be sold as bleach to 15%. We expect the third low salt, high strength bleach facility at our Henderson, NV chlor alkali site to startup in the first quarter of 2013. These three new facilities will increase total bleach manufacturing capacity by an additional 50% over the 2011 capacity. These low salt, high strength bleach facilities will manufacture bleach with approximately twice the concentration, which should significantly reduce transportation costs.

Winchester segment income in the seasonally weak fourth quarter is expected to more than double compared to the fourth quarter of 2011 of $0.5 million. Increased selling prices and higher commercial volumes are forecast to positively impact the fourth quarter of 2012 compared to the fourth quarter of 2011. The ongoing relocation of our Winchester centerfire ammunition manufacturing operations from East Alton, IL to Oxford, MS is also projected to contribute to the year-over-year improvement in segment income.

As a result of acquiring KA Steel, we anticipate realizing $7 million to $10 million of synergies during the first year of our ownership and approximately $35 million of annual synergies at the end of three years. These synergies include opportunities to sell additional volumes of products we produce such as bleach, hydrochloric acid and potassium hydroxide through KA Steel and to optimize freight cost and logistics assets between us and KA Steel. Also, under the terms of the acquisition, both parties agreed to make an election under Section 338(h)(10) of the IRC that is expected to result in cash tax benefits to us that have a net present value of approximately $60 million.

We anticipate that full year 2012 charges for environmental investigatory and remedial activities will be in the $8 million to $12 million range. We do not believe that there will be any additional recoveries of environmental costs incurred and expensed in prior periods in the fourth quarter of 2012.

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We expect defined benefit pension plan income in 2012 to be similar to the 2011 level. Based on the December 31, 2011 funding status, we will not be required to make any cash contributions to our domestic defined benefit pension plan in 2012. Under the pension funding relief provisions of the Moving Ahead for Progress in the 21^st Century legislation, we may not be required to make any additional cash contributions to our domestic defined benefit pension plan for several years. We do have a small Canadian defined benefit pension plan to which we anticipate cash contributions of less than $1 million in 2012.

During the fourth quarter of 2012, we are anticipating pretax restructuring charges of approximately $3 million primarily associated with our ongoing relocation of our Winchester centerfire ammunition manufacturing operations from East Alton, IL to Oxford, MS and exiting the use of mercury cell technology in the chlor alkali manufacturing process by the end of 2012. We are expecting total pretax restructuring charges for 2012 related to these projects to be approximately $9 million. We expect to incur additional restructuring charges through 2016 totaling approximately $11 million related to our ongoing relocation of our Winchester centerfire ammunition manufacturing operations from East Alton, IL to Oxford, MS. We also expect to incur additional restructuring charges through 2013 totaling approximately $7 million related to exiting the use of mercury cell technology in the chlor alkali manufacturing process.

After giving consideration to the $4.3 million of favorable tax adjustments for the nine months ended September 30, 2012, we believe the full year 2012 effective tax rate will be approximately 34%.

Capital spending for the nine months ended September 30, 2012 was $210.8 million. Of this total, approximately 48% supported the conversion of our Charleston, TN facility from mercury cell technology to membrane technology and approximately 22% supported the three low salt, high strength bleach projects. As a result of these projects, for the full year 2012, we expect capital spending to be in the $240 million to $250 million range. We completed low salt, high strength bleach facilities at McIntosh, AL and Niagara Falls, NY in the first and third quarters of 2012, respectively. We expect to complete the third low salt, high strength bleach facility at Henderson, NV in the first quarter of 2013. The first of the two new membrane cell rooms at Charleston, TN was successfully started up in the third quarter of 2012. The second membrane cell room at Charleston, TN is expected to startup in the fourth quarter of 2012. With the completion of the Charleston, TN conversion project in 2012, the completion of two of the three low salt, high strength bleach facilities, and lower levels of Winchester centerfire ammunition relocation capital spending, we expect 2013 capital spending to be approximately $100 million to $140 million lower than the 2012 level.

The combination of the high levels of capital spending in 2012 and the acquisition of KA Steel will result in increased levels of depreciation and amortization expense. We expect 2012 depreciation and amortization expense to be in the $110 million range and we expect this to increase to the $130 million to $140 million range in 2013.

Environmental Matters

Environmental provisions charged (credited) to income, which are included in costs of goods sold, were as follows:

	Three Months Ended September 30,					Nine Months Ended September 30,
	2012		2011			2012			2011
	($ in millions)
Charges to income	$	3.6	$	4.0		$	6.8		$	13.9
Recoveries from third parties of costs incurred and expensed in prior periods	—		(1.5		)	(0.1		)	(11.0		)
Total environmental expense	$	3.6	$	2.5		$	6.7		$	2.9

Our liabilities for future environmental expenditures were as follows:

	September 30,
	2012			2011
	($ in millions)
Balance at beginning of year	$	163.3		$	167.6
Charges to income	6.8			13.9
Remedial and investigatory spending	(20.1		)	(16.3		)
Currency translation adjustments	0.5			(0.6		)
Balance at end of period	$	150.5		$	164.6

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Environmental investigatory and remediation activities spending was associated with former waste disposal sites and past manufacturing operations.  Spending in 2012 for investigatory and remedial efforts, the timing of which is subject to regulatory approvals and other uncertainties, is estimated to be approximately $30 million.  Cash outlays for remedial and investigatory activities associated with former waste disposal sites and past manufacturing operations were not charged to income, but instead, were charged to reserves established for such costs identified and expensed to income in prior periods.  Associated costs of investigatory and remedial activities are provided for in accordance with generally accepted accounting principles governing probability and the ability to reasonably estimate future costs.  Our ability to estimate future costs depends on whether our investigatory and remedial activities are in preliminary or advanced stages.  With respect to unasserted claims, we accrue liabilities for costs that, in our experience, we may incur to protect our interest against those unasserted claims.  Our accrued liabilities for unasserted claims amounted to $2.7 million at September 30, 2012.  With respect to asserted claims, we accrue liabilities based on remedial investigation, feasibility study, remedial action and Operation, Maintenance and Monitoring (OM&M) expenses that, in our experience, we may incur in connection with the asserted claims.  Required site OM&M expenses are estimated and accrued in their entirety for required periods not exceeding 30 years, which reasonably approximates the typical duration of long-term site OM&M.  Charges to income for investigatory and remedial efforts were material to operating results in 2012 and 2011.

Our condensed balance sheets included liabilities for future environmental expenditures to investigate and remediate known sites amounting to $150.5 million at September 30, 2012, $163.3 million at December 31, 2011 and $164.6 million at September 30, 2011, of which $119.5 million, $132.3 million and $136.6 million, respectively, were classified as other noncurrent liabilities.  These amounts do not take into account any discounting of future expenditures or any consideration of insurance recoveries or advances in technology.  These liabilities are reassessed periodically to determine if environmental circumstances have changed and/or remediation efforts and our estimate of related costs have changed.  As a result of these reassessments, future charges to income may be made for additional liabilities.

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Annual environmental-related cash outlays for site investigation and remediation, capital projects and normal plant operations are expected to range between approximately $50 million to $70 million over the next several years, $20 million to $40 million of which is for investigatory and remedial efforts, which are expected to be charged against reserves recorded on our condensed balance sheet.  While we do not anticipate a material increase in the projected annual level of our environmental-related cash outlays, there is always the possibility that such an increase may occur in the future in view of the uncertainties associated with environmental exposures.  Environmental exposures are difficult to assess for numerous reasons, including the identification of new sites, developments at sites resulting from investigatory studies, advances in technology, changes in environmental laws and regulations and their application, changes in regulatory authorities, the scarcity of reliable data pertaining to identified sites, the difficulty in assessing the involvement and financial capability of other PRPs, our ability to obtain contributions from other parties and the lengthy time periods over which site remediation occurs.  It is possible that some of these matters (the outcomes of which are subject to various uncertainties) may be resolved unfavorably to us, which could materially adversely affect our financial position or results of operations.

Legal Matters and Contingencies

We, and our subsidiaries, are defendants in various legal actions (including proceedings based on alleged exposures to asbestos) incidental to our past and current business activities.  As of September 30, 2012, December 31, 2011 and September 30, 2011, our condensed balance sheets included liabilities for these legal actions of $15.8 million, $16.4 million and $16.1 million, respectively.  These liabilities do not include costs associated with legal representation.  Based on our analysis, and considering the inherent uncertainties associated with litigation, we do not believe that it is reasonably possible that these legal actions will materially adversely affect our financial position or results of operations in the near term.

During the ordinary course of our business, contingencies arise resulting from an existing condition, situation, or set of circumstances involving an uncertainty as to the realization of a possible gain contingency.  In certain instances such as environmental projects, we are responsible for managing the cleanup and remediation of an environmental site.  There exists the possibility of recovering a portion of these costs from other parties.  We account for gain contingencies in accordance with the provisions of ASC 450, and therefore do not record gain contingencies and recognize income until it is earned and realizable.

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Liquidity, Investment Activity and Other Financial Data

Cash Flow Data

	Nine Months Ended September 30,
	2012			2011
Provided By (Used For)	($ in millions)
Gain on remeasurement of investment in SunBelt	$	—		$	(181.4	)
Net operating activities	158.6			112.4
Capital expenditures	(210.8		)	(128.4		)
Business acquired in purchase transaction, net of cash acquired	(312.3		)	(123.4		)
Restricted cash activity	33.2			30.4
Net investing activities	(482.6		)	(211.8		)
Long-term debt borrowings, net of repayments	192.3			—
Earn out payment – SunBelt	(15.3		)	—
Net financing activities	122.3			(40.9		)

Operating Activities

For the nine months ended September 30, 2012, cash provided by operating activities increased by $46.2 million from the nine months ended September 30, 2011, primarily due to a smaller increase in working capital.  For the nine months ended September 30, 2012, working capital increased $45.9 million compared to an increase of $70.9 million in 2011.  Receivablesincreased from December 31, 2011 by $48.6 million as a result of higher sales in the third quarter of 2012 compared with fourth quarter of 2011.  Accounts payable and accrued liabilities increased from December 31, 2011 by $15.0 million.  The 2012 cash from operations was also impacted by a $5.9 million decrease in cash tax payments.

Investing Activities

Capital spending of $210.8 million for the nine months ended September 30, 2012 was $82.4 million higher than the corresponding period in 2011.  Capital spending for the nine months ended September 30, 2012 included $101.0 million for the conversion of our Charleston, TN facility from mercury cell technology to membrane technology, $46.9 million for the construction of low salt, high strength bleach facilities at our McIntosh, AL; Henderson, NV; and Niagara Falls, NY chlor alkali sites and $15.2 million for our ongoing relocation of our Winchester centerfire ammunition manufacturing operations.

For the total year 2012, we expect our capital spending to be in the $240 million to $250 million range, which includes spending for the conversion of our Charleston, TN facility from mercury cell technology to membrane technology, the low salt, high strength bleach facilities, the reconfiguration of our Augusta, GA facility to manufacture bleach and distribute caustic soda, and our ongoing relocation of our Winchester centerfire ammunition manufacturing operations.  The first of the two new membrane cell rooms at Charleston, TN was successfully started up in the third quarter of 2012. The second membrane cell room at Charleston, TN is expected to startup in the fourth quarter of 2012. We completed low salt, high strength bleach facilities at McIntosh, AL and Niagara Falls, NY in the first and third quarters of 2012, respectively, and expect the remaining low salt, high strength bleach facility at Henderson, NV to be completed during the first quarter of 2013.  These three new facilities will increase total bleach manufacturing capacity by an additional 50% over the 2011 capacity.  These low salt, high strength bleach facilities will manufacture bleach with approximately twice the concentration, which should significantly reduce transportation costs.  We expect depreciation and amortization expense to be in the $110 million range for 2012.

On August 22, 2012, we acquired KA Steel and paid cash of $312.3 million, subject to certain post-closing adjustments, net of $26.2 million of cash acquired.

On February 28, 2011, we acquired the remaining 50% interest in SunBelt and paid cash of $123.4 million, net of $8.9 million of cash acquired.

For the nine months ended September 30, 2012 and 2011, we utilized $33.2 million and $30.4 million, respectively, of restricted cash that was required to be used to fund capital projects in Alabama, Mississippi and Tennessee.

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For the nine months ended September 30, 2012, we entered into sale/leaseback agreements for barges and chlorine railcars that we acquired in 2012.  We received proceeds from the sale of $3.5 million.

Financing Activities

In August 2012, we sold $200 million of 2022 Notes with a maturity date of August 15, 2022. The 2022 Notes were issued at par value. Interest will be paid semi-annually beginning on February 15, 2013. The acquisition of KA Steel was partially financed with proceeds of $196.0 million, after expenses of $4.0 million, from the 2022 Notes.

In June 2012, we redeemed industrial revenue bonds totaling $7.7 million with a maturity date of 2017. We paid a premium of $0.2 million to the bond holders, which was included in interest expense. We also recognized a $0.2 million deferred gain in interest expense related to the interest rate swap, which was terminated in March 2012, on these industrial revenue bonds.

For the nine months ended September 30, 2012, we paid $18.5 million for the earn out related to the 2011 SunBelt performance.  The 2011 earn out payment included $15.3 million that was recognized as part of the original purchase price.  The $15.3 million is included as a financing activity in the statement of cash flows.

We issued 0.1 million shares and 0.5 million shares representing stock options exercised for the nine months ended September 30, 2012 and 2011, respectively, with a total value of $1.4 million and $9.3 million, respectively.

For the nine months ended September 30, 2012 and 2011, we purchased and retired 0.2 million and 0.1 million shares with a total value of $3.1 million and $2.2 million, respectively, under the share repurchase program approved by our board of directors on July 21, 2011.

The percent of total debt to total capitalization increased to 40.3% at September 30, 2012 from 35.2% at December 31, 2011.  The increase was due to a higher level of long-term debt at September 30, 2012 resulting from the issuance of the 2022 Notes, partially offset by higher shareholders’ equity primarily resulting from the net income for the nine months ended September 30, 2012.

In the first three quarters of 2012 and 2011, we paid a quarterly dividend of $0.20 per share.  Dividends paid for the nine months ended September 30, 2012 and 2011 were $48.0 million for both periods.  On October 25, 2012, our board of directors declared a dividend of $0.20 per share on our common stock, payable on December 10, 2012 to shareholders of record on November 9, 2012.

The payment of cash dividends is subject to the discretion of our board of directors and will be determined in light of then-current conditions, including our earnings, our operations, our financial condition, our capital requirements and other factors deemed relevant by our board of directors.  In the future, our board of directors may change our dividend policy, including the frequency or amount of any dividend, in light of then-existing conditions.

Liquidity and Other Financing Arrangements

Our principal sources of liquidity are from cash and cash equivalents, restricted cash, cash flow from operations and borrowings under our senior revolving credit facility.  Additionally, we believe that we have access to the debt and equity markets.

Cash flow from operations is variable as a result of both the seasonal and the cyclical nature of our operating results, which have been affected by seasonal and economic cycles in many of the industries we serve, such as vinyls, urethanes, bleach, ammunition and pulp and paper.  The seasonality of the ammunition business, which is typically driven by the fall hunting season, and the seasonality of the vinyls and bleach businesses, which are stronger in periods of warmer weather, typically cause working capital to fluctuate between $50 million to $100 million over the course of the year.  Cash flow from operations is affected by changes in ECU selling prices caused by changes in the supply/demand balance of chlorine and caustic soda, resulting in the chlor alkali business having significant leverage on our earnings and cash flow.  For example, assuming all other costs remain constant and internal consumption remains approximately the same, a $10 per ECU selling price change equates to an approximate $18 million annual change in our revenues and pretax profit when we are operating at full capacity.

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For the nine months ended September 30, 2012, cash provided by operating activities increased by $46.2 million from the nine months ended September 30, 2011, primarily due to a smaller increase in working capital.  For the nine months ended September 30, 2012, working capital increased $45.9 million compared to an increase of $70.9 million in 2011.  Receivablesincreased from December 31, 2011 by $48.6 million as a result of higher sales in the third quarter of 2012 compared with fourth quarter of 2011.  Accounts payable and accrued liabilities increased from December 31, 2011 by $15.0 million.  The 2012 cash from operations was also impacted by a $5.9 million decrease in cash tax payments.

Capital spending of $210.8 million for the nine months ended September 30, 2012 was $82.4 million higher than the corresponding period in 2011.  Capital spending for the nine months ended September 30, 2012 included $101.0 million for the conversion of our Charleston, TN facility from mercury cell technology to membrane technology, $46.9 million for the construction of low salt, high strength bleach facilities at our McIntosh, AL; Henderson, NV; and Niagara Falls, NY chlor alkali sites and $15.2 million for our ongoing relocation of our Winchester centerfire ammunition manufacturing operations.

For the total year 2012, we expect our capital spending to be in the $240 million to $250 million range, which includes spending for the conversion of our Charleston, TN facility from mercury cell technology to membrane technology, the low salt, high strength bleach facilities, the reconfiguration of our Augusta, GA facility to manufacture bleach and distribute caustic soda, and our ongoing relocation of our Winchester centerfire ammunition manufacturing operations.  The first of the two new membrane cell rooms at Charleston, TN was successfully started up in the third quarter of 2012. The second membrane cell room at Charleston, TN is expected to startup in the fourth quarter of 2012. We completed low salt, high strength bleach facilities at McIntosh, AL and Niagara Falls, NY in the first and third quarters of 2012, respectively, and expect the remaining low salt, high strength bleach facility at Henderson, NV to be completed during the first quarter of 2013.  These three new facilities will increase total bleach manufacturing capacity by an additional 50% over the 2011 capacity.  These low salt, high strength bleach facilities will manufacture bleach with approximately twice the concentration, which should significantly reduce transportation costs.  We expect depreciation and amortization expense to be in the $110 million range for 2012.

The overall use of cash of $201.7 million for the nine months ended September 30, 2012, primarily reflects the acquisition of KA Steel and capital spending for the conversion of our Charleston, TN facility, our low salt, high strength bleach facilities, and our ongoing relocation of our Winchester centerfire ammunition manufacturing operations, partially offset by the issuance of the 2022 Notes. Based on the seasonality of our working capital, our September 30, 2012 unrestricted cash balance of $103.1 million, the restricted cash balance of $18.5 million and the availability of $233.3 million of liquidity from our senior revolving credit facility, we believe we have sufficient liquidity to meet our short-term and long-term needs.  Additionally, we believe that we have access to the debt and equity markets.

On July 21, 2011, our board of directors authorized a share repurchase program for up to 5 million shares of common stock that will terminate in three years for any remaining shares not yet repurchased.  For the nine months ended September 30, 2012 and 2011, 0.2 million and 0.1 million shares were purchased and retired under this program at a cost of $3.1 million and $2.2 million, respectively. As of September 30, 2012, we had purchased a total of 0.4 million shares under this program and 4.6 million shares remained authorized to be purchased.  The repurchases will be effected from time to time on the open market, or in privately negotiated transactions.

In August 2012, we sold $200 million of 2022 Notes with a maturity date of August 15, 2022. The 2022 Notes were issued at par value. Interest will be paid semi-annually beginning on February 15, 2013. The acquisition of KA Steel was partially financed with proceeds of $196.0 million, after expenses of $4.0 million, from the 2022 Notes.

Pursuant to a note purchase agreement dated December 22, 1997, SunBelt sold $97.5 million of Guaranteed Senior Secured Notes due 2017, Series O, and $97.5 million of Guaranteed Senior Secured Notes due 2017, Series G.  The SunBelt Notes bear interest at a rate of 7.23% per annum, payable semi-annually in arrears on each June 22 and December 22.  Beginning on December 22, 2002 and each year through 2017, SunBelt is required to repay $12.2 million of the SunBelt Notes, of which $6.1 million is attributable to the Series O Notes and of which $6.1 million is attributable to the Series G Notes.  In conjunction with the SunBelt acquisition, we consolidated the SunBelt Notes with a fair value of $87.3 million for the remaining principal balance of $85.3 million as of February 28, 2011.  In December 2011, $12.2 million was repaid on these SunBelt Notes.

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In December 2010, we completed a financing of American Recovery and Reinvestment Act of 2009 (Recovery Zone) tax-exempt bonds totaling $41.0 million due 2035.  The bonds were issued by the Industrial Development Board of the County of Bradley and the City of Cleveland, TN (TN Authority) pursuant to a trust indenture between the TN Authority and U. S. Bank National Association, as trustee.  The bonds were sold to PNC Bank, National Association (PNC Bank), as administrative agent for itself and a syndicate of participating banks, in a private placement under a Credit and Funding Agreement dated December 27, 2010, between us and PNC Bank.  Proceeds of the bonds were loaned by the TN Authority to us under a loan agreement, whereby we are obligated to make loan payments to the TN Authority sufficient to pay all debt service and expenses related to the bonds.  Our obligations under the loan agreement and related note bear interest at a fluctuating rate based on LIBOR.  The financial covenants in the credit agreement mirror those in our senior revolving credit facility.  The bonds may be tendered to us (without premium) periodically beginning November 1, 2015.  During December 2010, we drew $41.0 million of the bonds.  The proceeds from the bonds are required to be used to fund capital project spending for our Charleston, TN facility mercury cell conversion.  As of September 30, 2012, $4.4 million of the proceeds remain with the trustee and are classified as a noncurrent asset on our condensed balance sheet as restricted cash, until such time as we request reimbursement of qualifying amounts used for the Charleston, TN facility mercury cell conversion.

In December 2010, we completed a financing of Recovery Zone tax-exempt bonds totaling $42.0 million due 2033.  The bonds were issued by the Mississippi Business Finance Corporation (MS Finance) pursuant to a trust indenture between MS Finance and U. S. Bank National Association, as trustee.  The bonds were sold to PNC Bank as administrative agent for itself and a syndicate of participating banks, in a private placement under a Credit and Funding Agreement dated December 1, 2010, between us and PNC Bank.  Proceeds of the bonds were loaned by MS Finance to us under a loan agreement, whereby we are obligated to make loan payments to MS Finance sufficient to pay all debt service and expenses related to the bonds.  Our obligations under the loan agreement and related note bear interest at a fluctuating rate based on LIBOR.  The financial covenants in the credit agreement mirror those in our senior revolving credit facility.  The bonds may be tendered to us (without premium) periodically beginning November 1, 2015.  During December 2010, we drew $42.0 million of the bonds.  The proceeds from the bonds are required to be used to fund capital project spending for our ongoing relocation of the Winchester centerfire ammunition manufacturing operations from East Alton, IL to Oxford, MS.  As of September 30, 2012, $14.1 million of the proceeds remain with the trustee and are classified as a noncurrent asset on our condensed balance sheet as restricted cash, until such time as we request reimbursement of qualifying amounts used for the Oxford, MS Winchester relocation.

In October 2010, we completed a financing of tax-exempt bonds totaling $70 million due 2024.  The bonds include $50 million issued pursuant to the Gulf Opportunity Go Zone Act of 2005 (Go Zone) and $20 million issued pursuant to the Recovery Zone Act.  The bonds were issued by the Industrial Development Authority of Washington County, AL (AL Authority) pursuant to a trust indenture between the AL Authority and U. S. Bank National Association, as trustee.  The bonds were sold to PNC Bank as administrative agent for itself and a syndicate of participating banks, in a private placement under a Credit and Funding Agreement dated October 14, 2010, between us and PNC Bank.  Proceeds of the bonds were loaned by the AL Authority to us under a loan agreement, whereby we are obligated to make loan payments to the AL Authority sufficient to pay all debt service and expenses related to the bonds.  Our obligations under the loan agreement and related note bear interest at a fluctuating rate based on LIBOR.  The financial covenants in the credit agreement mirror those in our senior revolving credit agreement.  The bonds may be tendered to us (without premium) periodically beginning November 1, 2015.  We had the option to borrow up to the entire $70 million in a series of draw downs through December 31, 2011.  We drew $36.0 million of the bonds in 2011 and $34.0 million in 2010.  The proceeds from the bonds are required to be used to fund capital project spending at our McIntosh, AL facility.  As of September 30, 2012, less than $0.1 million of the drawn proceeds remain with the trustee and are classified as a noncurrent asset on our condensed balance sheet as restricted cash, until such time as we request reimbursement of qualifying amounts used for the capital project spending at our McIntosh, AL facility.

On April 27, 2012, we entered into a new $265 million five-year senior revolving credit facility, which replaced the $240 million senior revolving credit facility and a $25 million letter of credit facility. The new senior revolving credit facility will expire in April, 2017. At September 30, 2012, we had $233.3 million available under our $265 million senior revolving credit facility, because we had issued $31.7 million of letters of credit under a $110 million subfacility.  The new senior revolving credit facility also has a $50 million Canadian subfacility. Under the senior revolving credit facility, we may select various floating rate borrowing options.  The actual interest rate paid on borrowings under the senior revolving credit facility is based on a pricing grid which is dependent upon the leverage ratio as calculated under the terms of the facility for the prior fiscal quarter.  The facility includes various customary restrictive covenants, including restrictions related to the ratio of debt to earnings before interest expense, taxes, depreciation and amortization (leverage ratio) and the ratio of earnings before interest expense, taxes, depreciation and amortization to interest expense (coverage ratio).  Compliance with these covenants is determined quarterly based on the operating cash flows for the last four quarters.  We were in compliance with all covenants and restrictions under all our outstanding credit agreements as of September 30, 2012 and 2011, and December 31, 2011, and no event of default had occurred that would permit the lenders under our outstanding credit agreements to accelerate the debt if not cured.  In the future, our ability to generate sufficient operating cash flows, among other factors, will determine the amounts

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available to be borrowed under these facilities.  As of September 30, 2012, there were no covenants or other restrictions that limited our ability to borrow.

At September 30, 2012, we had total letters of credit of $34.7 million outstanding, of which $31.7 million were issued under our $265 million senior revolving credit facility. The letters of credit were used to support certain long-term debt and certain workers compensation insurance policies.

Our current debt structure is used to fund our business operations.  As of September 30, 2012, we had long-term borrowings, including current installments, of $726.7 million, of which $155.9 million was issued at variable rates.  Commitments from banks under our senior revolving credit facility are an additional source of liquidity.

In June 2012, we terminated $73.1 million of interest rate swaps with Wells Fargo that had been entered into on the SunBelt Notes in May 2011.  The result was a gain of $2.2 million, which will be recognized through 2017. As of September 30, 2012, $2.0 million of this gain was included in long-term debt. In March 2012, Citibank terminated $7.7 million of interest rate swaps on our industrial revenue bonds due in 2017.  The result was a gain of $0.2 million, which would have been recognized through 2017. In June 2012, the industrial revenue bonds were redeemed by us, and as a result, the remaining $0.2 million deferred gain was recognized in interest expense during the three months ended June 30, 2012.

In March 2010, we entered into interest rate swaps on $125 million of our underlying fixed-rate debt obligations, whereby we agreed to pay variable rates to a counterparty who, in turn, pays us fixed rates.  The counterparty to these agreements is Citibank.  In October 2011, we entered into $125 million of interest rate swaps with equal and opposite terms as the $125 million variable interest rate swaps on the 2016 Notes.  We have agreed to pay a fixed rate to a counterparty who, in turn, pays us variable rates.  The counterparty to this agreement is also Citibank.  The result was a gain of $11.0 million on the $125 million variable interest rate swaps, which will be recognized through 2016.  As of September 30, 2012, $8.9 million of this gain was included in long-term debt.  In October 2011, we de-designated our $125 million interest rate swaps that had previously been designated as fair value hedges.  The $125 million variable interest rate swaps and the $125 million fixed interest rate swaps do not meet the criteria for hedge accounting.  All changes in the fair value of these interest rate swaps are recorded currently in earnings.

In 2001 and 2002, we entered into interest rate swaps on $75 million of our underlying fixed-rate debt obligations, whereby we agreed to pay variable rates to a counterparty who, in turn, paid us fixed rates.  The counterparty to these agreements was Citibank.  In January 2009, we entered into a $75 million fixed interest rate swap with equal and opposite terms as the $75 million variable interest rate swaps on the 2011 Notes.  We agreed to pay a fixed rate to a counterparty who, in turn, paid us variable rates.  The counterparty to this agreement was Bank of America.  The result was a gain of $7.9 million on the $75 million variable interest rate swaps, which was recognized through 2011.  In January 2009, we de-designated our $75 million interest rate swaps that had previously been designated as fair value hedges.  The $75 million variable interest rate swaps and the $75 million fixed interest rate swap did not meet the criteria for hedge accounting.  All changes in the fair value of these interest rate swaps were recorded currently in earnings.

Off-Balance Sheet Arrangements

In conjunction with the St. Gabriel, LA conversion and expansion project, which was completed in the fourth quarter of 2009, we entered into a twenty-year brine and pipeline supply agreement with PetroLogistics Olefins, LLC (PetroLogistics).  PetroLogistics installed, owns and operates, at its own expense, a pipeline supplying brine to the St. Gabriel, LA facility.  Beginning November 2009, we are obligated to make a fixed annual payment over the life of the contract of $2.0 million for use of the pipeline, regardless of the amount of brine purchased.  We also have a minimum usage requirement for brine of $8.4 million over the first five-year period of the contract.  After the first five-year period, the contract contains a buyout provision exercisable by us for $12.0 million.

We guarantee debt and other obligations under agreements with our affiliated companies.  In the normal course of business, we guarantee the principal and interest under a $0.3 million line of credit of one of our wholly-owned foreign affiliates.  At September 30, 2012, December 31, 2011 and September 30, 2011, our wholly-owned foreign affiliate had no borrowings outstanding under this line of credit, which would be utilized for working capital purposes.

New Accounting Standards

In July 2012, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2012-02 “Testing Indefinite-Lived Intangible Assets for Impairment” (ASU 2012-02), which amends ASC 350 “Intangibles – Goodwill and Other.”  This update permits entities to make a qualitative assessment of whether it is more likely than not that an indefinite-lived intangible asset's fair value is less than its carrying amount before performing a quantitative impairment test.  If an entity concludes that it is not more likely than not that the fair value of the indefinite-lived intangible asset is less than its carrying amount, it would not be required to perform the quantitative test for that asset.  This update is effective for fiscal years beginning after September 15, 2012.  This update will not have a material effect on our consolidated financial statements.

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In September 2011, the FASB issued ASU 2011-08 “Testing Goodwill for Impairment” (ASU 2011-08), which amends ASC 350 “Intangibles – Goodwill and Other.”  This update permits entities to make a qualitative assessment of whether it is more likely than not that a reporting unit's fair value is less than its carrying amount before applying the two-step goodwill impairment test.  If an entity concludes that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, it would not be required to perform the two-step impairment test for that reporting unit.  We adopted the provisions of ASU 2011-08 on January 1, 2012.  This update did not have a material effect on our consolidated financial statements.

During 2011, the FASB issued ASU 2011-05 “Presentation of Comprehensive Income” (ASU 2011-05) and ASU 2011-12 “Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05” (ASU 2011-12).  These updates require entities to present items of net income and other comprehensive income either in one continuous statement, referred to as the statement of comprehensive income, or in two separate, but consecutive, statements of net income and other comprehensive income.  We adopted the provisions of ASU 2011-05 and ASU 2011-12 on January 1, 2012.  These updates required modification of our consolidated financial statements presentation.  This update did not have a material effect on our consolidated financial statements.

In May 2011, the FASB issued ASU 2011-04 “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in US GAAP and IFRSs”, (ASU 2011-04), which amends ASC 820.  This update clarifies the existing guidance and amends the wording used to describe many of the requirements in US GAAP for measuring fair value and for disclosing information about fair value measurements.  This update became effective for us on January 1, 2012.  This update did not have a material effect on our consolidated financial statements.

In December 2010, the FASB issued ASU 2010-29 “Disclosure of Supplementary Pro Forma Information for Business Combinations” (ASU 2010-29), which amends ASC 805 “Business Combinations” (ASC 805).  This update clarified that an entity is required to disclose pro forma revenue and earnings as though the business combination that occurred during the current period had occurred as of the beginning of the comparable prior annual reporting period only.  In addition, this standard expands the supplemental pro forma disclosures to include a description of the nature and amount of material nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings.  We adopted the provisions of ASU 2010-29 on January 1, 2011.  The adoption of this update required additional disclosures for our acquisition of the remaining 50% equity interest in SunBelt.  This update did not have a material effect on our consolidated financial statements.

Item 3.  Quantitative and Qualitative Disclosures about Market Risk.

We are exposed to market risk in the normal course of our business operations due to our purchases of certain commodities, our ongoing investing and financing activities and our operations that use foreign currencies.  The risk of loss can be assessed from the perspective of adverse changes in fair values, cash flows and future earnings.  We have established policies and procedures governing our management of market risks and the use of financial instruments to manage exposure to such risks.

Energy costs, including electricity used in our Chlor Alkali Products and Chemical Distribution segments, and certain raw materials and energy costs, namely copper, lead, zinc, electricity and natural gas used in our Winchester segment, are subject to price volatility.  Depending on market conditions, we may enter into futures contracts and put and call option contracts in order to reduce the impact of commodity price fluctuations.  As of September 30, 2012, we maintained open positions on futures contracts totaling $123.9 million ($105.6 million at December 31, 2011 and $103.8 million at September 30, 2011).  Assuming a hypothetical 10% increase in commodity prices which are currently hedged, as of September 30, 2012, we would experience a $12.4 million ($10.6 million at December 31, 2011 and $10.4 million at September 30, 2011) increase in our cost of inventory purchased, which would be substantially offset by a corresponding increase in the value of related hedging instruments.

We are exposed to changes in interest rates primarily as a result of our investing and financing activities.  The effect of interest rates on our investing activity is not material to our consolidated financial position, results of operations, or cash flows.  Our current debt structure is used to fund business operations, and commitments from banks under our senior revolving credit facility are a source of liquidity.  As of September 30, 2012, December 31, 2011 and September 30, 2011, we had long-term borrowings of $726.7 million, $536.4 million and $589.6 million, respectively, of which $155.9 million at September 30, 2012 and December 31, 2011 and $119.9 million at September 30, 2011 were issued at variable rates.  

46

In June 2012, we terminated $73.1 million of interest rate swaps with Wells Fargo that had been entered into on the SunBelt Notes in May 2011. The result was a gain of $2.2 million, which will be recognized through 2017. As of September 30, 2012, $2.0 million of this gain was included in long-term debt. We had entered into the interest rate swaps, whereby we agreed to pay variable rates to Wells Fargo who, in turn, paid us fixed rates.  

In March 2012, Citibank terminated $7.7 million of interest rate swaps on our industrial revenue bonds due in 2017.  The result was a gain of $0.2 million, which would have been recognized through 2017. In June 2012, the industrial revenue bonds were redeemed by us, and as a result, the remaining $0.2 million deferred gain was recognized in interest expense during the three months ended June 30, 2012.

In March 2010, we entered into interest rate swaps on $125 million of our underlying fixed-rate debt obligations, whereby we agreed to pay variable rates to a counterparty who, in turn, pays us fixed rates.  The counterparty to these agreements is Citibank.  In October 2011, we entered into $125 million of interest rate swaps with equal and opposite terms as the $125 million variable interest rate swaps on the 2016 Notes.  We have agreed to pay a fixed rate to a counterparty who, in turn, pays us variable rates.  The counterparty to this agreement is also Citibank.  The result was a gain of $11.0 million on the $125 million variable interest rate swaps, which will be recognized through 2016.  As of September 30, 2012, $8.9 million of this gain was included in long-term debt.  In October 2011, we de-designated our $125 million interest rate swaps that had previously been designated as fair value hedges.  The $125 million variable interest rate swaps and the $125 million fixed interest rate swaps do not meet the criteria for hedge accounting.  All changes in the fair value of these interest rate swaps are recorded currently in earnings.

In 2001 and 2002, we entered into interest rate swaps on $75 million of our underlying fixed-rate debt obligations, whereby we agreed to pay variable rates to a counterparty who, in turn, paid us fixed rates.  The counterparty to these agreements was Citibank.  In January 2009, we entered into a $75 million fixed interest rate swap with equal and opposite terms as the $75 million variable interest rate swaps on the 2011 Notes.  We agreed to pay a fixed rate to a counterparty who, in turn, paid us variable rates.  The counterparty to this agreement was Bank of America.  The result was a gain of $7.9 million on the $75 million variable interest rate swaps, which was recognized through 2011.

The following table reflects the swap activity related to certain debt obligations:

Underlying Debt Instrument	Swap Amount		Date of Swap	September 30, 2012
	($ in millions)			Olin Pays Floating Rate:
6.75%, due 2016	$	65.0	March 2010	3.5%-4.5%	(a)
6.75%, due 2016	$	60.0	March 2010	3.5%-4.5%	(a)
				Olin Receives Floating Rate:
6.75%, due 2016	$	65.0	October 2011	3.5%-4.5%	(a)
6.75%, due 2016	$	60.0	October 2011	3.5%-4.5%	(a)

(a) Actual rate is set in arrears.  We project the rate will be within the range shown.

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Our interest rate swaps reduced interest expense by $2.7 million and $5.8 million for the nine months ended September 30, 2012 and 2011, respectively.

If the actual change in interest rates or commodities pricing is substantially different than expected, the net impact of interest rate risk or commodity risk on our cash flow may be materially different than that disclosed above.

We do not enter into any derivative financial instruments for speculative purposes.

Item 4.  Controls and Procedures.

Our chief executive officer and our chief financial officer evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2012.  Based on that evaluation, our chief executive officer and chief financial officer have concluded that, as of such date, our disclosure controls and procedures were effective to ensure that information Olin is required to disclose in the reports that it files or submits with the SEC under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms, and to ensure that information we are required to disclose in such reports is accumulated and communicated to our management, including our

chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

There have been no changes in our internal control over financial reporting that occurred during the quarter ended September 30, 2012, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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Cautionary Statement Regarding Forward-Looking Statements

This quarterly report on Form 10-Q includes forward-looking statements.  These statements relate to analyses and other information that are based on management’s beliefs, certain assumptions made by management, forecasts of future results, and current expectations, estimates and projections about the markets and economy in which we and our various segments operate.  The statements contained in this quarterly report on Form 10-Q that are not statements of historical fact may include forward-looking statements that involve a number of risks and uncertainties.

We have used the words “anticipate,” “intend,” “may,” “expect,” “believe,” “should,” “plan,” “estimate,” “project,” “forecast,” and variations of such words and similar expressions in this quarterly report to identify such forward-looking statements.  These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions, which are difficult to predict and many of which are beyond our control.

Therefore, actual outcomes and results may differ materially from those matters expressed or implied in such forward looking-statements.  We undertake no obligation to update publicly any forward-looking statements, whether as a result of future events, new information or otherwise.

The risks, uncertainties and assumptions involved in our forward-looking statements many of which are discussed in more detail in our filings with the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2011, include, but are not limited to the following:

• sensitivity to economic, business and market conditions in the United States and overseas, including economic instability or a downturn in the sectors served by us, such as ammunition, housing, vinyls and pulp and paper, and the migration by United States customers to low-cost foreign locations;

• the cyclical nature of our operating results, particularly declines in average selling prices in the chlor alkali industry and the supply/demand balance for our products, including the impact of excess industry capacity or an imbalance in demand for our chlor alkali products;

• economic and industry downturns that result in diminished product demand and excess manufacturing capacity in any of our segments and that, in many cases, result in lower selling prices and profits;

• costs and other expenditures in excess of those projected for environmental investigation and remediation or other legal proceedings;

• unexpected litigation outcomes;

• new regulations or public policy changes regarding the transportation of hazardous chemicals and the security of chemical manufacturing facilities;

• changes in legislation or government regulations or policies;

• adverse conditions in the credit and capital markets, limiting or preventing our ability to borrow or raise capital;

• the occurrence of unexpected manufacturing interruptions and outages, including those occurring as a result of labor disruptions and production hazards;

• the failure or an interruption of our information technology systems;

• higher-than-expected raw material and energy, transportation and/or logistics costs;

• weak industry conditions could affect our ability to comply with the financial maintenance covenants in our senior revolving credit facility and certain tax-exempt bonds;

• the effects of any declines in global equity markets on asset values and any declines in interest rates used to value the liabilities in our pension plan; and

• an increase in our indebtedness or higher-than-expected interest rates, affecting our ability to generate sufficient cash flow for debt service.

You should consider all of our forward-looking statements in light of these factors.  In addition, other risks and uncertainties not presently known to us or that we consider immaterial could affect the accuracy of our forward-looking statements.

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Part II - Other Information

Item 1.  Legal Proceedings.

Not Applicable.

Item 1A.  Risk Factors.

Not Applicable.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.

(a) Not applicable.

(b) Not applicable.

(c)

Issuer Purchases of Equity Securities

Period	Total Number of Shares (or Units) Purchased(1)	Average Price Paid per Share (or Unit)	Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs
July 1-31, 2012	—	—	—
August 1-31, 2012	—	—	—
September 1-30, 2012	—	—	—
Total				4,605,729	(1)

(1) On July 21, 2011, we announced a share repurchase program approved by the board of directors for the purchase of up to 5 million shares of common stock that will terminate on July 21, 2014.  Through September 30, 2012, 394,271 shares had been repurchased, and 4,605,729 shares remained available for purchase under that program.

Item 3.  Defaults Upon Senior Securities.

Not Applicable.

Item 4.  Mine Safety Disclosures.

Not Applicable.

Item 5.  Other Information.

Not Applicable.

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Item 6.  Exhibits.

2.1	Stock Purchase Agreement dated as of July 17, 2012, by and among Olin Corporation, K. A. Steel Chemicals Inc., the stockholders of K. A. Steel Chemicals Inc. and Robert F. Steel, as the sellers' representative - Exhibit 2.1 to Form 8-K dated July 18, 2012*
4.1	Second Supplemental Indenture dated as of August 9, 2012, between Olin Corporation, The Bank of New York Mellon Trust Company, N.A., and U. S. Bank National Association - Exhibit 4.1 to Form 8-K dated August 9, 2012*
4.2	Third Supplemental Indenture dated as of August 22, 2012, between Olin Corporation and U. S. Bank National Association - Exhibit 4.1 to Form 8-K dated August 22, 2012*
4.3	Form of 5.50% Senior Notes due 2022 - Exhibit 4.2 to Form 8-K dated August 22, 2012*
10.1	Form of Executive Agreement between Olin Corporation and each of Kenneth A. Steel, Jr. and Robert F. Steel dated July 17, 2012
11	Computation of Per Share Earnings (included in the Note-“Earnings Per Share” to Notes to Consolidated Financial Statements in Item 1)
12	Computation of Ratio of Earnings to Fixed Charges (Unaudited)
31.1	Section 302 Certification Statement of Chief Executive Officer
31.2	Section 302 Certification Statement of Chief Financial Officer
32	Section 906 Certification Statement of Chief Executive Officer and Chief Financial Officer
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

* Previously filed as indicated and incorporated by reference.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

OLIN CORPORATION
(Registrant)
By:	/s/ John E. Fischer
	Senior Vice President and Chief Financial Officer (Authorized Officer)

Date: October 29, 2012

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EXHIBIT INDEX

Exhibit No.	Description
2.1	Stock Purchase Agreement dated as of July 17, 2012, by and among Olin Corporation, K. A. Steel Chemicals Inc., the stockholders of K. A. Steel Chemicals Inc. and Robert F. Steel, as the sellers' representative - Exhibit 2.1 to Form 8-K dated July 18, 2012**
4.1	Second Supplemental Indenture dated as of August 9, 2012, between Olin Corporation, The Bank of New York Mellon Trust Company, N.A., and U. S. Bank National Association - Exhibit 4.1 to Form 8-K dated August 9, 2012*
4.2	Third Supplemental Indenture dated as of August 22, 2012, between Olin Corporation and U. S. Bank National Association - Exhibit 4.1 to Form 8-K dated August 22, 2012*
4.3	Form of 5.50% Senior Notes due 2022 - Exhibit 4.2 to Form 8-K dated August 22, 2012*
10.1	Form of Executive Agreement between Olin Corporation and each of Kenneth A. Steel, Jr. and Robert F. Steel dated July 17, 2012
11	Computation of Per Share Earnings (included in the Note-“Earnings Per Share” to Notes to Consolidated Financial Statements in Item 1)
12	Computation of Ratio of Earnings to Fixed Charges (Unaudited)
31.1	Section 302 Certification Statement of Chief Executive Officer
31.2	Section 302 Certification Statement of Chief Financial Officer
32	Section 906 Certification Statement of Chief Executive Officer and Chief Financial Officer
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

* Previously filed as indicated and incorporated by reference.

53

EX-10.1

Exhibit 10.1

EXECUTIVE AGREEMENT, dated as of July 17, 2012 (this “Agreement”), among OLIN CORPORATION, a Virginia corporation (“Olin”), K.A. STEEL CHEMICALS INC., a Delaware corporation (the “Company” and, together with Olin, “Employer”), and ROBERT F. STEEL (“Executive”).

WHEREAS, in connection with the transactions (the “Transactions”) contemplated by the Stock Purchase Agreement among Olin, the Company, the stockholders of the Company and Executive, as seller representative, dated as of July 17, 2012 (the “Purchase Agreement”), and subject to the terms and conditions of the Purchase Agreement, the Company will become a wholly owned subsidiary of Olin as of the closing of the Transactions (the “Closing”) and will be operated as a division of Olin;

WHEREAS, following the Closing, Employer desires to employ Executive;

WHEREAS, as an inducement to Olin to enter into the Purchase Agreement, Executive has agreed to provide services to, and enter into this Agreement, with Employer, effective as of the Closing (the “Effective Time”); and

WHEREAS, Executive acknowledges and agrees that the obligations of Executive pursuant to this Agreement, including pursuant to Sections 8 and 9, are an essential part of the economic terms of the Purchase Agreement.

NOW, THEREFORE, in consideration of the covenants and agreements hereinafter set forth and other good and valuable consideration, and intending to be legally bound hereby, the parties hereto agree as follows:

SECTION 1.Definitions. As used in this Agreement:

(a)“Board” means the Board of Directors of Olin.

(b)“Cause” means (i) the willful and continued failure of Executive to substantially perform Executive’s duties (other than any such failure resulting from Executive’s incapacity due to physical or mental illness or injury); (ii) the willful engaging by Executive in gross misconduct significantly and demonstrably financially injurious to Employer; (iii) a willful breach by Executive of Employer’s Code of Business Conduct; or (iv) willful misconduct by Executive in the course of Executive’s employment which is a felony or fraud.  No act or failure to act on the part of Executive will be considered “willful” unless done or omitted not in good faith and without reasonable belief that the action or omission was in the interests of Employer or not opposed to the interests of Employer and unless the act or failure to act has not been cured by Executive within 30 days after written notice to Executive specifying the nature of such violations.  Notwithstanding the foregoing, Executive shall not be deemed to have been terminated for Cause without 30 days’ advance written notice to Executive setting forth the reasons for Employer’s intention to terminate for Cause (such notice, a “Notice of Termination”). If, at the end of the 30-day cure period, the act or omission that constitutes Cause has not been remedied, Executive’s employment shall automatically terminate for Cause.

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(c)“Competitor” means any corporation, partnership, sole proprietorship, person, entity or business involved in the manufacturing or distribution of caustic soda and/or bleach that is in competition with Employer at any time during the Term or the Non-Compete Term (as defined in Section 8(a) below).

(d)“Disability” means that Executive has been determined “disabled” and eligible to receive benefits under Employer’s group long-term disability plan as in effect from time to time. Notwithstanding the foregoing, Executive shall not be deemed to have been terminated due to Disability without being given a Notice of Termination.

(e)“Good Reason” means, without the written consent of Executive, (i) material diminution of Executive’s job responsibilities as such responsibilities exist pursuant to this Agreement as of the Effective Time; (ii) the material reduction in Executive’s Base Salary as of the Effective Time; (iii) the geographic relocation of Executive’s principal place of employment greater than fifty (50) miles from such location as of the Effective Time; or (iv) material breach by the Employer of this Agreement. Notwithstanding the foregoing, Good Reason shall not be deemed to exist unless Executive provides written notice to Employer of the specific event or condition that Executive believes constitutes Good Reason no later than thirty (30) days after the time at which the event or condition purportedly giving rise to Good Reason first occurs or arises; and, provided that, if there exists an event or condition that constitutes Good Reason, Employer shall have thirty (30) days (the “Cure Period”) from the date such notice is received to cure such event or condition and, if Employer does so, such event or condition shall not constitute Good Reason hereunder. If, at the end of the Cure Period, the event or condition that constitutes Good Reason has not been remedied, Executive will be entitled to terminate employment for Good Reason during the 30-day period that follows the end of the Cure Period. If Executive does not terminate employment during such 30-day period, Executive shall not be permitted to terminate employment for Good Reason as a result of such event or condition.

(f)“Resignation for Good Reason” means the termination of Executive’s employment by Executive for Good Reason. For purposes solely of clarification, it is understood that (x) if, in connection with the spinoff of an Olin business or Olin’s assets as a separate public company to Olin’s shareholders, Executive accepts employment with, and becomes employed at, the spunoff company or its affiliate, the termination of Executive’s employment with Employer shall not be considered a “Resignation for Good Reason” for purposes of this Agreement and (y) except as provided in Section 6(d)(ii), in connection with the sale of an Olin business or assets to a third party or the transfer or sale of an Olin business or Olin’s assets to a joint venture to be owned directly or indirectly by Olin with one or more third parties, if Executive accepts employment with, and becomes employed by, such buyer or its affiliate or such joint venture or its affiliate in connection with such transaction, such cessation of employment with Employer shall not be considered a “Resignation for Good Reason” for purposes of this Agreement.

(g)“Termination Without Cause” means the termination of Executive’s employment by Employer other than for Cause and other than due to Executive’s death or Disability.  For purposes solely of clarification, it is understood that (x) if, in connection with the spinoff of an Olin business or Olin’s assets as a separate public company to Olin’s shareholders,

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Executive accepts employment with, and becomes employed at, the spunoff company or its affiliate, the termination of Executive’s employment with Employer shall not be considered a “Termination Without Cause” for purposes of this Agreement and (y) except as provided in Section 6(d)(ii), in connection with the sale of an Olin business or assets to a third party or the transfer or sale of an Olin business or Olin’s assets to a joint venture to be owned directly or indirectly by Olin with one or more third parties, if Executive accepts employment with, and becomes employed by, such buyer or its affiliate or such joint venture or its affiliate in connection with such transaction, such cessation of employment with Employer shall not be considered a “Termination Without Cause” for purposes of this Agreement.

SECTION 2.Term. Employer agrees to employ Executive, and Executive agrees to remain in the employ of Employer, subject to the terms and conditions of this Agreement, for the period commencing as of the Effective Time and ending on the second anniversary thereof (such period, the “Term”), unless such employment is earlier terminated in accordance with this Agreement; provided, however, that if the Purchase Agreement is terminated prior to the Closing, this Agreement shall be null and void ab initio. The Term shall automatically expire on the last day of the Term without notice by any party hereto to the other. Unless the parties otherwise agree in writing, continuation of Executive’s employment with Employer following the expiration of the Term shall be deemed an employment “at-will” and shall not be deemed to extend any provisions of this Agreement, and Executive’s employment may thereafter be terminated at will by either Executive or Employer, provided that Sections 8 and 9 shall survive any termination or expiration of this Agreement or Executive’s termination of employment hereunder.

SECTION 3.Position; Reporting; Executive’s Duties. (a) Position; Reporting. During the Term, Executive shall serve as President, Company, and Vice President, Olin. Executive shall report directly to the Senior Vice President, Operations, Olin (currently John McIntosh).

(b)Duties. During the Term, Executive shall devote Executive’s full time efforts during normal business hours to Employer’s business and affairs, except during vacation periods in accordance with Employer’s vacation policy and periods of illness or incapacity or other authorized leaves of absence.  Nothing in this Agreement will preclude Executive from devoting reasonable periods required for service as a director or a member of any organization involving no conflict of interest with Employer’s interest, provided that no additional position as director or member shall be accepted by Executive during the period of Executive’s employment with Employer without its prior consent.

SECTION 4.Compensation and Benefits. (a) Base Salary. During the Term, Executive shall be paid an annual base salary of $350,000 (“Base Salary”). The Base Salary shall be payable in accordance with the Employer’s regular payroll practices as then in effect. During the Term, the Base Salary will be reviewed annually and is subject to adjustment at the discretion of the Compensation Committee of the Board (the “Compensation Committee”), but in no event shall Employer pay Executive a Base Salary less than that set forth above during the Term.

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(b)Bonus. During the Term, Executive shall have an opportunity to earn a performance-based annual cash incentive (“ICP”) for each fiscal year targeted at $150,000 (the “ICP Standard”) and with a maximum of up to 200% of the ICP Standard (the “ICP Maximum”), provided that, with respect to any fiscal year in which Executive is employed by Employer during the Term for less than the entire fiscal year, the ICP Standard shall be pro-rated to reflect the number of calendar months during the fiscal year during which Executive was employed by Employer and the ICP Maximum payable with respect to Executive’s period of employment during such fiscal year shall be based on such pro-rated ICP Standard. The ICP shall be determined based 75% on financial metrics and 25% on non-financial metrics and such metrics shall be separately communicated by Employer to Executive within ninety (90) days following the commencement of the applicable performance period, provided that, with respect to the 2012 fiscal year, such metrics shall be communicated within ninety (90) days following the Effective Time. The aggregate amount of any ICP actually payable to Executive hereunder, if any, shall be determined by the Compensation Committee in its reasonable discretion in accordance with the established performance metrics and the terms of Olin’s Senior Management Incentive Compensation Plan, as it may be amended from time to time (or any successor plan thereto), as soon as practicable following such time as audited consolidated financial statements of Olin are available for the applicable fiscal year, and shall be paid as soon as reasonably practicable thereafter but no later than the 15th day of the third month following the applicable fiscal year end.

(c)Equity. As soon as practicable following the Effective Time, subject to approval by the Compensation Committee, Executive will receive 100,000 performance-based restricted stock units (the “Performance RSUs”) pursuant to an individual award agreement in substantially the form attached hereto as Exhibit A. Subject to the terms and conditions of the individual award agreement, the Performance RSUs will vest on the second anniversary of the Effective Time, provided that (x) Executive is employed by Employer or one of their subsidiaries on such date and (y) the performance goals, as determined by the Compensation Committee and communicated to the Executive within 90 days following the Effective Time, have been attained. The performance goals applicable to the Performance RSUs shall be based on achieving at least $30 million in synergies (based on achieved synergies on an annualized “run-rate” basis) within the following categories (i) additional bleach sales, (ii) improvement in customer mix, (iii) incremental sales of KOH and HCl through optimizing use of the Company’s existing infrastructure, (iv) re-optimization of freight across the caustic volumes of Employer and (v) reductions in sales and general administrative costs, insurance costs and headcount. For the avoidance of doubt, except as set forth in Section 6(a)(v), if Executive’s employment terminates prior to the second anniversary of the Effective Time, the Performance RSUs shall be forfeited.

(d)Benefits. During the Term, Executive shall be eligible to participate in the group benefit plans and programs of Employer that are generally available to other employees of Employer with comparable positions to Executive, subject to the terms and conditions of such plans and programs.

(e)Reimbursement of Expenses. During the Term, Employer shall reimburse Executive for all reasonable expenses incurred by Executive in the performance of Executive’s duties hereunder that comply with the applicable policies of Employer, including the presentation of appropriate statements of such expenses.

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SECTION 5.Termination of Employment During the Term. (a) Death or Disability. Executive’s employment shall terminate automatically upon Executive’s death. Executive’s death shall not affect any of Executive’s rights resulting from a Termination Without Cause or Resignation for Good Reason prior to death. Employer may terminate Executive’s employment for Disability.

(b)Cause or Without Cause. Employer may terminate Executive’s employment for Cause in accordance with the provisions of Section 1(b) or without Cause.

(c)Voluntary Resignation. Executive may terminate his employment other than for Good Reason at any time upon at least 30 days’ advance written notice to Employer.

(d)Resignation for Good Reason. Executive may terminate his employment for Good Reason in accordance with the provisions of Section 1(e).

(e)Date of Termination. “Date of Termination” means (i) if Executive’s employment is terminated by Employer for Cause or due to Disability, the date specified in the Notice of Termination, (ii) in the event of a Termination Without Cause, the Date of Termination shall be the date specified by Employer at the time it notified Executive of such termination, (iii) if Executive’s employment is terminated by reason of death, the date of Executive’s death, (iv) if Executive’s employment is terminated by him for any reason (including a Resignation for Good Reason), the 30th day following delivery of Executive’s notice to Employer of his resignation in accordance with Section 5(c) or 5(d), subject to Executive’s continued performance of duties through such 30th day (or, in Employer’s sole discretion, such earlier date as selected by Employer, provided that Employer continues to pay or provide to Executive the compensation and benefits specified under Section 4 through such 30th day) and (v) if Executive becomes employed by a New Employer (as defined in Section 6(d)(ii)) and has a Termination Without Cause or Resignation for Good Reason with the New Employer in accordance with Section 6(d)(ii), the Date of Termination shall be the date of cessation of employment with the New Employer.

SECTION 6.Obligations of Employer Upon Termination. Following any termination of Executive’s employment hereunder, Executive shall not be otherwise compensated for the loss of employment or the loss of any rights or benefits under this Agreement, except as provided below:

(a)Termination Without Cause or Resignation for Good Reason. In the event of a Termination Without Cause or Resignation for Good Reason during the Term, subject to the effectiveness of Executive’s execution of a general release of claims against Employer and its affiliates in the form attached hereto as Exhibit B no later than 54 days after the Date of Termination (as described in Section 7):

(i) Employer shall continue to pay to Executive the Base Salary (as in effect on the Date of Termination) for the remainder of the Term (the “Continuation Period”) in equal installments in accordance with Employer’s normal payroll practices, commencing with the first regular payroll following the date on which the general release of claims becomes effective and irrevocable as described in Section 7, provided that, for the

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avoidance of doubt, such equal installments shall be calculated based on the Base Salary payable from the Date of Termination through the remainder of the Term;

(ii) Employer shall pay to Executive the ICP Standard (as in effect on the Date of Termination) Executive would have had the opportunity to receive if Executive had remained employed during the Continuation Period, to the extent not previously paid, on April 30th of the year following the calendar year to which the ICP relates, provided that, if (A) Executive was reasonably expected by Olin to be a “covered employee” (within the meaning of Section 162(m) of the Code) for the taxable year of Olin in which the Date of Termination occurs and (B) the ICP Standard that Executive would have been eligible to receive for such year was originally intended by Olin to satisfy the performance-based exception under Section 162(m) of the Code (without regard to any entitlement to payment upon termination of employment), the reference above to Executive’s ICP Standard shall be replaced by (1) $150,000 in the event the Date of Termination occurs prior to the first anniversary of the Effective Time and (2) the product of (x) Executive’s Base Salary as of the Date of Termination and (y) a fraction, the numerator of which is Executive’s ICP Standard for the fiscal year immediately preceding the fiscal year in which the Date of Termination occurs and the denominator of which is Executive’s Base Salary for such fiscal year, in the event the Date of Termination occurs on or after the first anniversary of the Effective Time;

(iii) during the 12-month period following the Date of Termination, or, in the case of medical plans, until Executive becomes eligible for comparable coverage under the medical health plans of a successor employer, if earlier, Employer shall (A) if benefits under Employer’s medical and dental benefit plans, or materially equivalent plans maintained by Employer in replacement thereof (the “Health Plans”) will not be taxable to Executive, continue to provide coverage at Employer’s expense under the Health Plans, or (B) if benefits under the Health Plans will be taxable to Executive, reimburse Executive’s premiums for continued coverage under the Health Plans in the amount of the cost of such coverage, in either case for the Executive and Executive’s dependents at the level provided to Executive immediately prior to the Date of Termination;

(iv) Executive shall continue to receive retirement contributions during the Continuation Period under Employer’s qualified and non-qualified defined contribution plans for which Executive was eligible as of the Date of Termination based on the aggregate amount payable pursuant to Sections 6(a)(i) and (ii). Such contributions shall be applied to Employer’s qualified defined contribution plan to the extent permitted under then-applicable law, otherwise such contributions shall be applied to Employer’s non-qualified defined contribution plan, if applicable. Payments under such non-qualified plan shall be due at the times and in the manner payments are due Executive under such non-qualified plan, it being understood that Executive shall be permitted to receive payments from Employer’s plan (assuming Executive otherwise qualifies to receive such payments, is permitted to do so under the applicable plan terms and elects to do so), during the Continuation Period;

(v) Olin shall treat all outstanding equity awards held by Executive in accordance with the terms of the applicable equity plan and individual award agreements

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evidencing such awards, provided that the Performance RSUs granted pursuant to Section 4(c) shall become vested and nonforfeitable as of the Date of Termination on a pro rata basis based on the extent to which the performance goals applicable to the Performance RSUs have been achieved as of the last completed month preceding the Date of Termination as certified by the Compensation Committee. Such vested Performance RSUs shall be settled no later than 60 days following the Date of Termination. To illustrate the foregoing, the Compensation Committee would certify the amount of synergies that had been achieved from the Effective Time until the end of the month preceding the Termination Without Cause or Resignation for Good Reason, as applicable (such amount to be calculated based on such achieved synergies on an annualized “run-rate” basis), and would calculate a percentage the numerator of which is such amount and the denominator of which is the total synergy performance goal (i.e., $30 million). Executive would then be entitled to have vested and made nonforfeitable as of the Date of Termination the product of the number of Performance RSUs multiplied by such percentage. For example, if synergies of $15 million had been achieved (based on such achieved synergies on an annualized “run-rate” basis) as of the end of the month preceding the Termination Without Cause or Resignation for Good Reason, as applicable, then Executive would have vested and made nonforfeitable 50% of the total number of Performance RSUs (i.e., 50,000 restricted stock units), and the remainder would be forfeited; and

(vi)to the extent not theretofore paid or provided, Employer shall pay to Executive the Base Salary through the Date of Termination and any accrued and unused vacation through the Date of Termination and Employer shall pay or provide any other amounts or benefits required to be paid or provided or that Executive is eligible to receive pursuant to the terms and conditions of the employee benefit plans and programs of Employer and its affiliates through the Date of Termination at the time such payments are due (if any) (such payments and benefits shall be hereinafter referred to as the “Accrued Benefits”)

; provided, however, that, if, at any time during the Continuation Period, Executive fails to comply in any material respect with Executive’s obligations under Section 8 or 9, Employer shall no longer be required to provide the payments and benefits specified in this Section 6(a).

(b)Cause; Voluntary Resignation. If, during the Term, Executive’s employment shall be terminated for Cause or Executive terminates his employment other than due to Executive’s death or Disability or a Resignation for Good Reason, Employer shall pay to Executive the Accrued Benefits. Subject to the last sentence of Section 2, this Agreement shall terminate on the Date of Termination.

(c)Death or Disability. If, during the Term, Executive’s employment shall be terminated due to death or Disability, Executive, or in the event of Executive’s death, Executive’s heirs, if any, shall be entitled to payment of the Accrued Benefits and any other benefits as provided under the applicable death or disability benefit programs of Employer (if any).

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(d)Adjustments to Severance. (i) Notwithstanding Section 6(a), if on the Date of Termination, Executive is eligible and is receiving payments under any then-existing disability plan of Employer or its subsidiaries and affiliates, then Executive agrees that all payments under such disability plan may, and will be, suspended and offset (subject to applicable law) during the Continuation Period.  If, after such period, Executive remains eligible to receive disability payments, then such payments shall resume in the amounts and in accordance with the provisions of the applicable disability plan of Employer or its subsidiaries and affiliates.

(ii)In the event Executive, in connection with a spinoff or sale of an Olin business or Olin assets to a third party or the transfer of an Olin business or Olin assets to a joint venture which would be owned directly or indirectly by Olin with one or morethird parties, ceases to be employed by Employer and with Employer’s consent becomes employed by the buyer or its affiliate or the joint venture or its affiliate (a “New Employer”) prior to the second anniversary of the Effective Time, Executive shall be entitled to the benefits provided under Sections 6(a)(i) and (ii) (determined as if Executive incurred a Termination Without Cause or Resignation for Good Reason, as applicable, as of cessation of employment with the New Employer) (subject to Sections 6(d)(i) and 6(e)), if Executive has a Termination Without Cause or Resignation for Good Reason from the New Employer (with the New Employer being substituted for Employer in Section 1(f) or 1(g), as applicable) prior to the second anniversary of the Effective Time.  Subject to Section 22(d), any cash compensation amounts paid under this Section 6(d)(ii) shall be reduced by any severance, job transition or employment termination payments Executive receives in cash from the New Employer in connection with the Termination Without Cause or Resignation for Good Reason, as applicable, provided that no such reduction shall be made that violates the requirements of Treas. Reg. Section 1.409A-3(f).

(e)Other Severance Benefits. Executive may not cumulate the benefits provided under this Agreement with any severance or similar benefits (“Other Severance Benefits”) that Executive may be entitled to by agreement with Employer or under applicable law in connection with the termination of Executive’s employment.  Subject to Section 22(b) and the requirements of Treas. Reg. Section 1.409A-3(f), to the extent that Executive receives any Other Severance Benefits, then the payments and benefits payable hereunder to Executive shall be reduced by a like amount.  To the extent Employer is required to provide payments or benefits to Executive under the Worker Adjustment and Retraining Notification Act (or any state, local or foreign law relating to severance or dismissal benefits), the benefits payable hereunder shall be first applied to satisfy such obligation.

SECTION 7.Release. Executive shall not be entitled to receive any of the payments or benefits set forth in Section 6 unless Executive executes a Release (substantially in the form of Exhibit A hereto) in favor of Employer and others set forth in Exhibit A relating to all claims or liabilities of any kind relating to Executive’s employment with Employer or an affiliate and the termination of such employment, and, on or prior to the 54th day following the Date of Termination, such Release becomes effective and irrevocable in accordance with the terms thereof.

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SECTION 8.Restrictive Covenants. (a) As an inducement to Olin to enter into the Purchase Agreement and to Employer to make this offer of employment and provide the payments and benefits to Executive hereunder, Executive acknowledges and agrees that, in the event of Executive’s termination of employment for any reason (including expiration of the Term), Executive agrees to comply with the restrictions set forth in Section 8(b) for a two-year period from the date the Executive ceases to be employed by Employer and its subsidiaries for any reason (including expiration of the Term) (such date, the “Separation Date” and such two-year period, the Non-Compete Term”).

(b)Executive acknowledges and agrees that Executive shall not during the Non-Compete Term, directly or indirectly: (i) anywhere in North America, Central America or South America, render services for any Competitor as a principal, agent, employee, employer, consultant, co-partner or otherwise, or in any other individual or representative capacity, that is substantially similar to, or the same as, those services Executive provided to Employer, provided that Executive shall be free to purchase as an investment or otherwise, stock or other securities of such corporation, partnership, sole proprietorship, person, entity or business so long as such investment does not represent (x) in the case of stock or securities that are not listed upon a recognized securities exchange, a greater than 1% equity interest in such corporation, partnership, sole proprietorship, person, entity or business or (y) in the case of stock or securities that are listed upon a recognized securities exchange, a greater than 5% equity interest in such corporation, partnership, sole proprietorship, person, entity or business; or (ii) for Executive or for any other person, corporation, partnership, sole proprietorship, entity or business: (A) employ or attempt to employ any employee or former employee of Employer who was employed by Employer as of the Separation Date or within six months prior to the Separation Date; (B) on behalf of any Competitor, call on or solicit any of the actual or targeted prospective clients of Employer; or (C) make known the names and addresses of such clients or any information relating in any manner to Employer’s trade or business relationships with such clients.

(c)Executive acknowledges and agrees (whether or not Executive is subject to the restrictions set forth in Section 8(b)) not to disclose, either while in Employer’s employ or at any time thereafter, to any person not employed by Employer, or not engaged to render services to Employer, any confidential information obtained by Executive while in the employ of Employer, including trade secrets, know-how, improvements, discoveries, designs, customer and supplier lists, business plans and strategies, forecasts, budgets, cost information, formulae, processes, manufacturing equipment, compositions, computer programs, data bases and tapes and films relating to the business of Employer and its subsidiaries and affiliates (including majority-owned companies of such subsidiaries and affiliates); provided, however, that this provision shall not preclude Executive from disclosing information (i) known generally to the public (other than pursuant to Executive’s act or omission) or (ii) to the extent required by law or court order. Executive also agrees that upon leaving Employer’s employ Executive will not take with Executive, without the prior written consent of an officer authorized to act in the matter by the Board, any drawing, blueprint, specification or other document of Employer, its subsidiaries or affiliates, which is of a confidential nature relating to Employer, its subsidiaries or affiliates, including relating to its or their methods of distribution, or any description of any formulae or secret processes.

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(d)Executive acknowledges and agrees (whether or not Executive is subject to the restrictions set forth in Section 8(b)) not to make, either while in Employer’s employ or at any time thereafter, either directly or indirectly, any oral or written negative, disparaging or adverse statements or representations of or concerning Employer or its subsidiaries or affiliates, any of their clients, customers or businesses, or any of their current or former officers, directors, employees or shareholders; provided, however, that nothing herein shall prohibit Executive from disclosing truthful information if legally required (whether by oral questions, interrogatories, requests for information or documents, subpoena, civil investigative demand or similar process).

(e)Executive acknowledges and agrees that (i) the restrictive covenants contained in this Section 8 are reasonably necessary to protect the legitimate business interests of Employer, and are not overbroad, overlong, or unfair and are not the result of overreaching, duress or coercion of any kind, (ii) Executive’s full, uninhibited and faithful observance of each of the covenants contained in this Section 8 will not cause Executive any undue hardship, financial or otherwise, and that enforcement of each of the covenants contained herein will not impair Executive’s ability to obtain employment commensurate with Executive’s abilities and on terms fully acceptable to Executive or otherwise to obtain income required for the comfortable support of Executive and Executive’s family and the satisfaction of the needs of Executive’s creditors and (iii) the restrictions contained in this Section 8 are intended to be, and shall be, for the benefit of and shall be enforceable by, Employer’s successors and permitted assigns.

(f)Executive acknowledges and agrees that any violation of the provisions of Section 8 would cause Employer irreparable damage and that if Executive breaches or threatens to breach such provisions, Employer shall be entitled, in addition to any other rights and remedies Employer may have at law or in equity, to obtain specific performance of such covenants through injunction or other equitable relief from a court of competent jurisdiction, without proof of actual damages and without being required to post bond.

SECTION 9.Cooperation. Executive acknowledges and agrees (whether or not Executive is subject to the restrictions set forth in Section 8(b)) to provide reasonable cooperation, either while in Employer’s employ or at any time thereafter, to Employer and its affiliates in connection with any pending or future lawsuit, arbitration, or proceeding between Employer and/or any affiliate and any third party, any pending or future regulatory or governmental inquiry or investigation concerning Employer and/or any affiliate and any other legal, internal or business matters of or concerning Employer and/or any affiliate that relates to events occurring during Executive’s employment with Employer or any of its affiliates other than a suit between Executive, on the one hand, and Employer or its affiliates, on the other hand. Such cooperation shall include meeting with and providing information to Employer, any affiliate and/or their respective attorneys, auditors or other representatives as reasonably requested by Employer. Employer shall reimburse any reasonable legal fees and related expenses Executive incurs in order to comply with this Section 9.

SECTION 10.Entire Agreement. This instrument (including all Exhibits attached hereto), together with the Purchase Agreement, contains the entire agreement of the parties with respect to the subject matter hereof, and except as otherwise set forth herein, supersedes all prior agreements, promises, covenants, arrangements, communications, representations and warranties between them, whether written or oral, with respect to the subject matter hereof. In particular,

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Executive agrees and acknowledges that any previous written or oral agreement pertaining to employment between Olin or the Company and Executive shall hereby be terminated and has no further force and effect after the Effective Time. For the avoidance of doubt, the provisions of Section 8 shall not supersede the provisions of the Purchase Agreement with respect to the subject matter of Section 8, which shall remain in full force and effect in accordance with their terms.

SECTION 11.Successors; Binding Agreement. (a)  Employer will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of Employer, by agreement, in form and substance satisfactory to Executive, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that Employer would be required to perform if no such succession had taken place.  Failure of Employer to obtain such assumption and agreement prior to the effectiveness of any such succession will be a breach of this Agreement and entitle Executive to compensation from Employer in the same amount and on the same terms as Executive would be entitled to hereunder had a Termination occurred on the succession date.  As used in this Agreement, “Employer” means Employer as defined in the preamble to this Agreement and any successor to its business or assets which executes and delivers the agreement provided for in this Section 11 or which otherwise becomes bound by all the terms and provisions of this Agreement by operation of law or otherwise.

(b)This Agreement shall be enforceable by Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

SECTION 12.Notices. For the purpose of this Agreement, notices and all other communications provided for herein shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

If to Executive:

Robert F. Steel

919 Hill Road

Winnetka, IL 60093

If to Employer:

Olin Corporation
190 Carondelet Plaza
Suite 1530
Clayton, MO 63105-3443

Attention: Corporate Secretary

or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.

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SECTION 13.Governing Law.  The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the Commonwealth of Virginia (without giving effect to its principles of conflicts of law).

SECTION 14.Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same Agreement.

SECTION 15.Offset of Payments.  Except as may otherwise be expressly provided herein, nothing in this Agreement will be deemed to reduce or limit the rights which Executive may have under any employee benefit plan, policy or arrangement of Employer and its subsidiaries and affiliates.  Except as expressly provided in this Agreement or as required by law or pursuant to policies of Employer as may be in effect from time to time, and subject to Section 22(b), payments made pursuant to this Agreement shall not be affected by any set-off, counterclaim, recoupment, defense or other claim which Employer and its subsidiaries and affiliates may have against Executive.

SECTION 16.Withholding of Taxes.  Employer may withhold from any benefits payable under this Agreement all federal, state, city or other taxes as shall be required pursuant to any law or governmental regulation or ruling, and Executive shall be obligated to pay to Employer any withholding tax payable by Employer that Employer cannot withhold from payments to Executive.

SECTION 17.Non-assignability.  This Agreement is personal in nature and neither of the parties hereto shall, without the consent of the other, assign or transfer this Agreement or any rights or obligations hereunder, except as provided in Section 8 above.  Without limiting the foregoing, Executive’s right to receive payments hereunder shall not be assignable or transferable, whether by pledge, creation of a security interest or otherwise, other than a transfer by will or by the laws of descent or distribution, and, in the event of any attempted assignment or transfer by Executive contrary to this Section 17, Employer shall have no liability to pay any amount so attempted to be assigned or transferred.

SECTION 18.No Employment Right.  This Agreement shall not be deemed to confer on Executive a right to continued employment with Employer.

SECTION 19.Disputes/Arbitration.  (a)  Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration at Olin’s corporate headquarters in accordance with the rules of the American Arbitration Association then in effect.  Judgment may be entered on the arbitrator’s award in any court having jurisdiction;provided, however, that Executive shall be entitled to seek specific performance of Executive’s right to be paid during the pendency of any dispute or controversy arising under or in connection with this Agreement.

(b)Each party shall pay its own costs, legal, accounting and other fees and all other expenses associated with entering into and enforcing its or his rights under this Agreement; provided that Employer shall pay the full cost of the arbitration fees.

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(c)If any payment which is due to Executive pursuant to this Agreement has not been paid within ten (10) days of the date on which such payment was due, Executive shall be entitled to receive interest thereon from the due date until paid at an annual rate of interest equal to the Prime Rate reported in the Wall Street Journal, Northeast Edition, on the last business day of the month preceding the due date, compounded annually.

SECTION 20.Amendment. Except as specifically provided in Section 22(e), no provisions of this Agreement may be amended, modified, waived or discharged unless such amendment, modification, waiver or discharge is agreed to in writing signed by Executive and Employer.  No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.

SECTION 21.Severability. If any term, provision, covenant or condition of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable in any jurisdiction, then such provision, covenant or condition shall, as to such jurisdiction, be modified or restricted to the minimum extent necessary to make such provision valid, binding and enforceable, or, if such provision cannot be modified or restricted, then such provision shall, as to such jurisdiction, be deemed to be excised from this Agreement and any such invalidity, illegality or unenforceability with respect to such provision shall not invalidate or render unenforceable such provision in any other jurisdiction, and the remainder of the provisions hereof shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

SECTION 22.Section 409A of the Code. (a)  It is intended that the provisions of this Agreement comply with Section 409A of the Internal Revenue Code of 1986, as amended, and the regulations thereunder as in effect from time to time (collectively, hereinafter, “Section 409A”), and all provisions of this Agreement shall be construed and interpreted in a manner consistent with the requirements for avoiding taxes or penalties under Section 409A.

(b)Neither Executive nor any of Executive’s creditors or beneficiaries shall have the right to subject any deferred compensation (within the meaning of Section 409A) payable under this Agreement or under any other plan, policy, arrangement or agreement of or with Employer or any of its affiliates (this Agreement and such other plans, policies, arrangements and agreements, the “Employer Plans”) to any anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment or garnishment.  Except as permitted under Section 409A, any deferred compensation (within the meaning of Section 409A) payable to Executive or for Executive’s benefit under any Employer Plan may not be reduced by, or offset against, any amount owing by Executive to Employer or any of its affiliates.

(c)If, at the time of Executive’s separation from service (within the meaning of Section 409A), (i) Executive is a “specified employee” (within the meaning of Section 409A and using the identification methodology selected by Employer from time to time) and (ii) Employer shall make a good faith determination that an amount payable under this Agreement or under any Employer Plans constitutes deferred compensation (within the meaning of Section 409A) the payment of which is required to be delayed pursuant to the six-month delay

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rule set forth in Section 409A in order to avoid taxes or penalties under Section 409A, then Employer shall not pay such amount on the otherwise scheduled payment date, but shall instead accumulate such amount and pay it, without interest, on the first business day after such six-month period. To the extent required by Section 409A, any payment or benefit that would be considered deferred compensation subject to, and not exempt from, Section 409A, payable or provided upon a termination of Executive’s employment, shall only be paid or provided to Executive upon his separation from service (within the meaning of Section 409A).

(d)Except as specifically permitted by Section 409A or as otherwise specifically set forth in this Agreement, the benefits and reimbursements provided to Executive under this Agreement and any Employer Plan during any calendar year shall not affect the benefits and reimbursements to be provided to Executive under the relevant section of this Agreement or any Employer Plan in any other calendar year, and the right to such benefits and reimbursements cannot be liquidated or exchanged for any other benefit and shall be provided in accordance with Treas. Reg. Section 1.409A-3(i)(1)(iv) or any successor thereto. Further, in the case of reimbursement payments, such payments shall be made to Executive on or before the last day of the calendar year following the calendar year in which the underlying fee, cost or expense is incurred.

(e)Notwithstanding any provision of this Agreement or any Employer Plan to the contrary, in light of the uncertainty with respect to the proper application of Section 409A, Employer reserves the right to make amendments to any Employer Plan as Employer deems necessary or desirable to avoid the imposition of taxes or penalties under Section 409A. In any case, except as specifically provided in this Agreement, Executive shall be solely responsible and liable for the satisfaction of all taxes and penalties that may be imposed on Executive or for his account in connection with this Agreement (including any taxes and penalties under Section 409A), and neither Employer nor any of its subsidiaries and affiliates shall have any obligation to indemnify or otherwise hold Executive harmless from any or all of such taxes or penalties. Employer makes no representations concerning the tax consequences of Executive’s participation in this Agreement under Section 409A of the Code or any other Federal, state or local tax law. Executive’s tax consequences shall depend, in part, upon the application of relevant tax law, including Section 409A, to the relevant facts and circumstances.

(f)For purposes of Section 409A, each payment made pursuant to this Agreement will be deemed to be a separate payment as permitted under Treasury Regulation Section 1.409A-2(b)(2)(iii). In addition, to the extent any payment under this Agreement is nonqualified deferred compensation (within the meaning of Section 409A) and subject to Section 409A and the period measured from the Date of Termination through the first regular payroll date following the 54-day release consideration period commences in one taxable year and ends in another, then no such payment shall be made until the second taxable year.

SECTION 23.Survival. Except where this agreement states otherwise, the rights and obligations of Employer and Executive under the provisions of this Agreement, including Sections 8 and 9, shall survive and remain binding and enforceable, notwithstanding any termination of Executive’s employment with Employer, to the extent necessary to preserve the intended benefits of such provisions.

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SECTION 24.Headings. The headings in this Agreement are for convenience only and shall not be used to interpret or construe its provisions.

SECTION 25.Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

SECTION 26.Construction. As used in this Agreement, words such as “herein”, “hereinafter”, “hereby” and “hereunder”, and words of like import, refer to this Agreement, unless the context requires otherwise. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”.

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered as of the day and year first above set forth.

OLIN CORPORATION
By:
Name:	Joseph D. Rupp
Its:	Chairman, President & Chief Executive Officer

K.A. STEEL CHEMICALS INC.
By:
Name:	Kenneth A. Steel, Jr.
Its:	Executive Vice President

EXECUTIVE
By:
Name:	ROBERT F. STEEL

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Exhibit A

OLIN CORPORATION

2009 Long Term Incentive Plan

Performance-Based Restricted Stock Unit Award

Performance-Based Restricted Stock Unit Certificate

This certificate certifies that the employee named below has been awarded on the date hereof the number of Performance-Based Restricted Stock Units (the “Restricted Stock Units”) shown below.

Subject to the terms and conditions of the Olin Corporation 2009 Long Term Incentive Plan and related Award Description and the rules adopted by the Committee administering such Plan, this certificate will entitle the recipient following employment through the Vesting Date, to a payment of one share of Olin Common Stock for each Restricted Stock Unit awarded, provided that the Performance Condition (as defined in the attached Award Description) is satisfied.

Employee: «PARTICIPANT»

Number of Restricted Stock Units: «SHARES»

Vesting Date: As set forth in the attached Award Description

OLINC CORPPORATION

By the Compensation Committee

_____________________________

Authorized Signature

_______________________________

Employee Signature

Dated: __________________ __, 2012

DESCRIPTION OF

PERFORMANCE-BASED RESTRICTED STOCK UNIT AWARD

GRANTED UNDER THE

2009 OLIN CORPORATION LONG TERM INCENTIVE PLAN

1. Terms

The terms and conditions of these Restricted Stock Units are contained in the Award Certificate evidencing the grant of such Award, this Award Description and in the 2009 Olin Corporation Long Term Incentive Plan (the “Plan”). The Award of Restricted Stock Units is intended to be “performance-based compensation” as that term is used in Section 162(m) of the Code.

2. Definitions

Capitalized terms used but not defined herein have the meanings specified in the Plan.

3. Vesting and Payment

(a) Except as otherwise provided by the Committee, the Restricted Stock Units will vest if, and only if, (i) you remain continuously employed by Olin Corporation (“Olin”) or any of its subsidiaries during the 24-calendar month period immediately following the closing of the acquisition of K.A. Steel Chemicals Inc. (“KA”) by Olin pursuant to that certain Stock Purchase Agreement (the “Purchase Agreement”) among Olin, KA, the stockholders of KA and Robert F. Steel, as seller representative, dated as of July 17, 2012 (the last day of such 24-calendar month period, the “Vesting Date”), and (ii) Olin realizes at least $30 million in synergies (based on achieved synergies on an annualized “run-rate” basis) within the following categories (A) additional bleach sales, (B) improvement in customer mix, (C) incremental sales of KOH and HCl through optimizing use of KA’s existing infrastructure, (D) re-optimization of freight across the caustic volumes of Olin and KA, and (E) reductions in sales and general administrative costs, insurance costs and head count during such 24-month period, as defined in more detail by the Committee within 90 days after the closing under the Purchase Agreement in accordance with Section 162(m) of the Code (the “Performance Condition”).

(b) As soon as practical after the Vesting Date, the Committee shall make a determination as to whether the Performance Condition has been met. Any dispute between you and Olin regarding the Performance Condition or the Restricted Stock Units shall be resolved pursuant to the dispute resolutions provisions of the Executive Agreement among you, Olin and KA dated as of July 17, 2012 (your “Employment Agreement’), and the dispute resolution provisions of such Employment Agreement are hereby incorporated by reference.

(c) Each vested Restricted Stock Unit shall be payable by delivery of one share of Olin Common Stock (subject to adjustment as provided in the Plan), at the time set forth in Section 3(e) below. Each Restricted Stock Unit not vested shall be forfeited.

(d) Each outstanding Restricted Stock Unit shall accrue Dividend Equivalents (amounts equivalent to the cash dividends payable in cash), deferred in the form of cash.

Such Dividend Equivalents shall be paid only when and if the Restricted Stock Unit on which such Dividend Equivalents were accrued vests. Dividend Equivalents will accrue interest at an annual rate equal to Olin’s before tax cost of borrowing as determined from time to time by the Chief Financial Officer, the Treasurer or the Controller of the Company (or in the event there is no such borrowing, the Federal Reserve A1/P1 Composite rate for 90 day commercial paper plus 10 basis points, as determined by any such officer) or such other rate as determined from time to time by the Board or the Committee, compounded quarterly, from the date accrued to the earlier of the date paid or forfeiture. To the extent a Restricted Stock Unit does not vest or is otherwise forfeited, any accrued and unpaid Dividend Equivalents (and any interest on such Dividend Equivalents) shall be forfeited.

(e) The total number of Restricted Stock Units (and Dividend Equivalents and related interest) that vest pursuant to Section 3(a) above shall be paid on or as soon as administratively feasible after the Vesting Date, but in no event later than March 15^th of the calendar year following the calendar year of the Vesting Date.

(f) Restricted Stock Units shall carry no voting rights nor, except as specifically provided herein, be entitled to receive any dividends or other rights enjoyed by shareholders.

4. Termination of Employment

(a) Except as provided in Section 4(b), if your employment with the Company and its subsidiaries terminates for any reason other than a “Termination Without Cause” or a “Resignation for Good Reason”, as those terms are defined in your Employment Agreement, your Restricted Stock Units and the related Dividend Equivalents shall terminate and all your rights related thereto shall be forfeited immediately.

(b) If there is a Termination Without Cause or a Resignation for Good Reason, in each case, prior to the Vesting Date, a portion of the Restricted Stock Units shall become vested and nonforfeitable as of the “Date of Termination” (as defined in your Employment Agreement) on a pro rata basis based on the extent to which the Performance Condition has been met as of the end of the last completed month preceding the Date of Termination, as certified by the Committee. For example, if achieved synergies (based on such achieved synergies on an annualized “run-rate” basis) as described in Section 3(a) above as of the end of the month preceding the Date of Termination are $15 million, then 50% of the total Restricted Stock Units (i.e., 50,000 Restricted Stock Units) and the related Dividend Equivalents would vest as of the Date of Termination and be non-forfeitable, and the remaining Restricted Stock Units and Dividend Equivalents would be forfeited.

5. Tax Withholding

Olin will withhold from the payout of the Restricted Stock Units (and related Dividend Equivalents) the amount necessary to satisfy your federal, state and local withholding tax requirements.

6.    Miscellaneous

By accepting the Award of Restricted Stock Units, you agree that such Award is special compensation, and that any amount paid will not affect:

(a) The amount of any pension under any pension or retirement plan in which you participate as an employee of Olin,

(b) The amount of coverage under any group life insurance plan in which you participate as an employee of Olin, or

(c) The benefits under any other benefit plan or any kind heretofore or hereafter in effect, under which the availability or amount of benefits is related to compensation.

(d) To the extent any provision of this Award Description would subject any Participant to liability for interest or additional taxes under Code Section 409A, it will be deemed null and void, to the extent permitted by law and deemed advisable by the Committee. It is intended that this Award will be exempt from Code Section 409A (or to the extent applicable, comply with Code Section 409A), and this Award Description shall be interpreted and construed on a basis consistent with such intent. This Award Description may be amended in any respect deemed necessary (including retroactively) by the Committee in order to preserve exemption (or, if applicable, compliance) with Code Section 409A.

(e) This provision under Section 6(e) shall apply if any right you may have pursuant to this Award is considered deferred compensation under Code Section 409A.

(i) Notwithstanding Section 3(e), the payment made under Section 3(e) shall be paid no later than 60 days after the Vesting Date.

(ii) Notwithstanding Section 4(b), and subject to paragraph (iii) below, the payment made under Section 4(b) shall be paid no later than 60 days after your termination.

(iii) If you are a Specified Employee (as defined and determined under Code Section 409A) at the time you become entitled to payment under Section 4(b), then no payment which is payable upon your termination of employment as determined under Code Section 409A and not subject to an exception or exemption thereunder, shall be paid to you until the date that is six (6) months after your termination. Any such payment that would otherwise have been paid to you during this six-month period shall instead be paid to you on or as soon as administratively feasible following the date that is six (6) months after your termination, but no later than 60 days after such date. Until payment, you will continue to accrue Dividend Equivalents (and related interest) on the Restricted Stock Units as provided in Section 3(d).

(iv) A “termination of employment”, “termination”, or “retirement” (or other similar term having a similar import) under this Award shall have the same meaning as a “separation from service” as defined in Code Section 409A.

Exhibit B

RELEASE

Pursuant to the terms of the Employment Agreement (the “Employment Agreement”) entered into on July 17, 2012, among Robert F. Steel (“Executive”), Olin Corporation (“Olin”) and K.A. Steel Chemicals Inc. (the “Company”), and in exchange for the offer of employment and payments and benefits provided under the Employment Agreement, Executive, for himself, his family, his attorneys, agents, descendants, heirs, legatees, executors, personal administrators, guardians, personal representatives, hereby releases and discharges Olin, the Company as well as all of their respective past, present and future shareholders, parents, subsidiaries, affiliates, agents, directors, officers, employees, representatives, principals, attorneys, insurers, predecessors, successors, assigns and all persons acting by, through, under or in concert with Olin or the Company and any other parent or subsidiaries (collectively referred to as the “Released Parties”), from any and all non-statutory claims, obligations, debts, liabilities, demands, actions, causes of action, suits, accounts, covenants, contracts, agreements and damages whatsoever of every name and nature, known and unknown, which Executive ever had, or now has, against the Released Parties to the date of this Release, both in law and equity, arising out of or in any way related to Executive’s employment with Olin, the Company and their affiliates or the termination of that employment, including any claims that Executive is entitled to any compensation or benefits from any Released Party. The claims Executive releases include, but are not limited to, claims that the Released Parties:

(a)discriminated against Executive on the basis of race, color, sex (including claims of sexual harassment), national origin, ancestry, disability, religion, sexual orientation, marital status, parental status, veteran status, source of income, entitlement to benefits, union activities, age or any other claim or right Executive may have under the Civil Rights Act of 1964, the Age Discrimination in Employment Act (“ADEA”), the Older Workers Benefit Protection Act (“OWBPA”), or any other status protected by local, state or Federal laws, constitutions, regulations, ordinances or executive orders;

(b)failed to give proper notice of this employment termination under the Worker Adjustment and Retraining Notification Act (“WARN”), or any similar state or local statute or ordinance;

(c)violated any other Federal, state or local employment statute, such as the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), which, among other things, protects employee benefits; the Fair Labor Standards Act, which regulates wage and hour matters; the Family and Medical Leave Act, which requires employers to provide leaves of absence under certain circumstances; Title VII of the Civil Rights Act of 1964; the Americans With Disabilities Act; the Rehabilitation Act; the Occupational Safety and Health Act; and any other Federal, state or local laws relating to employment;

(d)violated the Released Parties’ personnel policies, handbooks, any covenant of good faith and fair dealing, or any contract of employment between Executive and any of the Released Parties;

B-#PageNum#

(e)violated public policy or common law, including claims for personal injury, invasion of privacy, retaliatory discharge, negligent hiring, retention or supervision, defamation, intentional or negligent infliction of emotional distress and/or mental anguish, intentional interference with contract, negligence, detrimental reliance, loss of consortium to Executive or any member of Executive’s family and/or promissory estoppel; or

(f)are in any way obligated for any reason to pay damages, expenses, litigation costs (including attorneys’ fees), bonuses, commissions, disability benefits, compensatory damages, punitive damages and/or interest.

Notwithstanding the forgoing, Executive is not prohibited from making or asserting (i) any claim or right under state workers’ compensation or unemployment laws, (ii) Executive’s rights as an insured under any director’s and officer’s liability insurance policy now or previously in force or (iii) any claim or right which by law cannot be waived, including Executive’s rights to file a charge with an administrative agency or to participate in an agency investigation, including but not limited to the right to file a charge with, or participate in an investigation or proceeding conducted by, the Equal Employment Opportunity Commission (“EEOC”). Executive waives, however, the right to recover money if any Federal, state or local government agency, including but not limited to the EEOC, pursues a claim on Executive’s behalf or on behalf of a class to which Executive may belong that arises out of or relates to Executive’s employment or severance from employment. In addition, this Release does not constitute a waiver or release of any of Executive’s rights to payments or benefits pursuant to Section 6 of the Employment Agreement or any accrued benefit under any employee benefit plan, program or arrangement of the Released Parties.

For the purpose of giving a full and complete release, Executive understands and agrees that this Release includes all claims that Executive may now have but does not know or suspect to exist in Executive’s favor against the Released Parties, and that this Release extinguishes those claims. Notwithstanding the foregoing, the waiver and release provisions set forth in this Release are not an attempt to cause Executive to waive or release rights or claims that may arise after the date this Release is executed.

Acknowledgments.

Executive affirms that Executive has fully reviewed the terms of this Release, affirms that Executive understands its terms, and states that Executive is entering into this Release knowingly, voluntarily and in full settlement of all claims which existed in the past or which currently exist, that arise out of Executive’s employment with Olin and the Company or Executive’s termination of employment.

Executive acknowledges that Executive has had at least 21 days to consider this Release thoroughly, and has been specifically advised to consult with an attorney, if Executive wishes, before signing below.

If Executive signs and returns this Release before the end of the 21-day period, Executive certifies that Executive’s acceptance of a shortened time period is knowing and voluntary, and neither Olin nor the Company improperly encouraged Executive to sign through fraud, misrepresentation, a threat to withdraw or alter the offer before the 21-day period expires, or by providing different terms to other employees who sign the release before such time period expires.

B-#PageNum#

Executive understands that Executive may revoke this Release within seven days after Executive signs it. Executive’s revocation must be in writing and submitted within such seven-day period.

If Executive does not revoke this Release within the seven-day period, it becomes effective and irrevocable on the eighth day after execution. Executive further understand that if Executive revokes this Release, Executive will not be eligible to receive the payments and benefits covered in Section 6 of the Employment Agreement.

Executive acknowledges that the waiver and release provisions set forth in this Release are in exchange for good and valuable consideration that is in addition to anything of value to which Executive was already entitled. Olin has advised Executive that it is in Executive’s best interest to consult with an attorney prior to executing this Release.

Date: ______________________            By: ________________________________

Robert F. Steel

B-#PageNum#

SCHEDULE 1

An identical Executive Agreement was executed between Olin Corporation, K.A. Steel Chemicals Inc. and Kenneth A. Steel on the same date, except that Kenneth A. Steel's title is Executive Vice President, Company and Vice President, Olin and he reports to Robert F. Steel, President, Company and Vice President, Olin.

A complete copy of this agreement will be filed upon the request of the Securities and Exchange Commission.

EX-12

Exhibit 12

OLIN CORPORATION AND CONSOLIDATED SUBSIDIARIES

Computation of Ratio of Earnings to Fixed Charges

(Unaudited)

	Nine Months Ended September 30,
	2012			2011
Earnings:	($ in millions)
Income before taxes	$	170.5		$	352.9
Add (deduct):
Equity in income of non-consolidated affiliates	(2.0		)	(8.5		)
Dividends received from non-consolidated affiliates	0.6			0.7
Capitalized interest	(5.3		)	(0.7		)
Fixed charges as described below	37.9			35.9
Total	$	201.7		$	380.3
Fixed charges:
Interest expensed and capitalized	$	23.6		$	23.2
Estimated interest factor in rent expense(1)	14.3			12.7
Total	$	37.9		$	35.9
Ratio of earnings to fixed charges	5.3			10.6

(1)  Amounts represent those portions of rent expense that are reasonable approximations of interest costs.

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Joseph D. Rupp, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Olin Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	October 29, 2012	/s/ Joseph D. Rupp
		Joseph D. Rupp
		Chairman, President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, John E. Fischer, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Olin Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	October 29, 2012	/s/ John E. Fischer
		John E. Fischer
		Senior Vice President and Chief Financial Officer

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

    In connection with the Quarterly Report of Olin Corporation (the “Company”) on Form 10-Q for the period ended September 30, 2012 as filed with the Securities and Exchange Commission (the “Report”), I, Joseph D. Rupp, Chairman, President and Chief Executive Officer and I, John E. Fischer, Senior Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to our knowledge: (1) the Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and (2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

    A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its Staff upon request.

/s/ Joseph D. Rupp
Joseph D. Rupp
Chairman, President and Chief Executive Officer
Dated:	October 29, 2012
/s/ John E. Fischer
John E. Fischer
Senior Vice President and Chief Financial Officer
Dated:	October 29, 2012

XML

DESCRIPTION OF BUSINESS (Details)	Aug. 22, 2012	Feb. 28, 2011
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Percentage of ownership in Sunbelt prior to acquiring remaining 50%		50.00%
Business Acquisition, Percentage of Voting Interests Acquired	100.00%	50.00%

XML

STOCK-BASED COMPENSATION (Details 1) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock-based compensation expense	$ 2.2	$ 1.9	$ 6.0	$ 6.7
Mark-to-market adjustments	0.5	(2.0)	1.0	(1.2)
Total expense (income)	$ 2.7	$ (0.1)	$ 7.0	$ 5.5

XML

OTHER ASSETS (Details) (USD $) In Millions, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2011
Other Assets [Abstract]
Investments in non-consolidated affiliates	$ 29.1	$ 27.6	$ 27.3
Intangible assets (less accumulated amortization of $9.8 million, $6.9 million and $6.2 million, respectively	156.4	19.2	19.6
Deferred debt issuance costs	18.0	14.2	14.7
Interest rate swaps	8.9	13.8	14.3
Other	11.2	10.8	10.9
Other assets	223.6	85.6	86.8
Intangible Assets accumulated amortization	$ 9.8	$ 6.9	$ 6.2

XML

STOCK-BASED COMPENSATION (Details 2) (USD $) In Millions, except Per Share data, unless otherwise specified	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Dividend yield	3.65%	4.32%
Risk-free interest rate	1.36%	3.05%
Expected volatility	43.00%	42.00%
Expected life (years)	7.0	7.0
Grant fair value (per option)	$ 6.55	$ 5.48
Exercise price	$ 21.92	$ 18.78
Shares granted	480,250	575,000

XML

ALLOWANCE FOR DOUBTFUL ACCOUNTS RECEIVABLES (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Allowance for Doubtful Accounts [Roll Forward]
Balance at beginning of year			$ 3.2	$ 4.8
Provisions charged (credited)	(0.4)	0.6	0.6	0.8
Write-offs, net			(0.1)	(1.7)
Balance at end of period	$ 3.7	$ 3.9	$ 3.7	$ 3.9

XML

SEGMENT INFORMATION (Tables)

9 Months Ended

Sep. 30, 2012

Segment Reporting [Abstract]

Segment Information

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Sales:	($ in millions)
Chlor Alkali Products	$	364.8		$	386.1		$	1,087.7		$	1,065.8
Chemical Distribution	47.6			—			47.6			—
Winchester	168.8			164.1			461.8			449.5
Total sales	$	581.2		$	550.2		$	1,597.1		$	1,515.3
Income before taxes:
Chlor Alkali Products	$	59.5		$	76.7		$	208.9		$	194.7
Chemical Distribution	1.9			—			1.9			—
Winchester	16.0			13.1			38.7			37.4
Corporate/other:
Pension income	7.2			6.9			20.5			20.8
Environmental expense	(3.6		)	(2.5		)	(6.7		)	(2.9		)
Other corporate and unallocated costs	(16.8		)	(15.7		)	(55.5		)	(52.8		)
Restructuring charges	(2.3		)	(4.1		)	(6.0		)	(6.6		)
Acquisition costs	(8.3		)	—			(8.3		)	(0.8		)
Other operating income	1.1			4.3			1.5			5.9
Interest expense	(6.0		)	(7.9		)	(18.3		)	(22.5		)
Interest income	0.2			0.2			0.7			0.7
Other (expense) income	(2.2		)	(1.6		)	(6.9		)	179.0
Income before taxes	$	46.7		$	69.4		$	170.5		$	352.9

XML

PENSION PLANS AND RETIREMENT BENEFITS (Details 1) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Curtailment				$ (1.1)
Pension Benefits [Member]
Service Cost	1.5	1.6	4.6	4.8
Interest Cost	22.9	23.4	69.0	70.6
Expected return on plans' assets	(34.9)	(34.9)	(104.7)	(104.7)
Amortization of prior service cost	0.1	0.1	0.2	0.3
Recognized acturial loss	4.8	3.8	15.0	11.3
Curtailment			0	1.1
Net periodic benefit (income) cost	(5.6)	(6.0)	(15.9)	(16.6)
Other Postretirement Benefits [Member}
Service Cost	0.3	0.2	1.0	0.9
Interest Cost	0.7	0.7	2.4	2.6
Expected return on plans' assets	0	0	0	0
Amortization of prior service cost	0	0	(0.1)	(0.1)
Recognized acturial loss	0.6	1.0	2.5	2.4
Curtailment			0	0
Net periodic benefit (income) cost	$ 1.6	$ 1.9	$ 5.8	$ 5.8

XML

ACQUISITION (Tables)

9 Months Ended

Sep. 30, 2012

KA Steel [Member]

Business Acquisition [Line Items]

Schedule of Purchase Price Allocation [Table Text Block]

	August 22, 2012
	($ in millions)
Total current assets	$	126.0
Property, plant and equipment	23.9
Intangible assets	139.5
Total assets acquired	289.4
Total current liabilities	63.2
Other liabilities	10.1
Total liabilities assumed	73.3
Net identifiable assets acquired	216.1
Goodwill	124.9
Fair value of net assets acquired	$	341.0
Supplemental Data
Cash paid	$	338.5
Olin trade accounts receivable from KA Steel	2.5
Total fair value of consideration	$	341.0

Business Acquisition, Pro Forma Information [Table Text Block]

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
	($ in millions, except per share data)
Sales	$	686.9	$	656.2	$	1,879.8	$	1,803.4
Net income	39.3		44.5		124.9		220.4
Net income per common share:
Basic	$	0.49	$	0.56	$	1.56	$	2.76
Diluted	$	0.48	$	0.55	$	1.54	$	2.73

SunBelt [Member]

Business Acquisition [Line Items]

Schedule of Purchase Price Allocation [Table Text Block]

	February 28, 2011
	($ in millions)
Total current assets	$	37.6
Property, plant and equipment	87.4
Deferred income taxes	0.4
Other assets	5.8
Total assets acquired	131.2
Total current liabilities	42.7
Long-term debt	75.1
Other liabilities	27.6
Total liabilities assumed	145.4
Less:  Investment in SunBelt	(0.8		)
Net liabilities assumed	(13.4		)
Liabilities for uncertainties	48.3
Gain on remeasurement of investment in SunBelt	(181.4		)
Goodwill	327.1
Fair value of total consideration	$	180.6

Business Acquisition, Pro Forma Information [Table Text Block]

	Nine Months Ended
	September 30, 2011
	($ in millions, except per share data)
Sales	$	1,541.6
Net income	121.9
Net income per common share:
Basic	$	1.53
Diluted	$	1.51

XML

ENVIRONMENTAL (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011
Environmental Remediation Obligations [Abstract]
Reserves for future environmental expenditures-total	$ 150.5	$ 164.6	$ 150.5	$ 164.6	$ 163.3
Reserves for environmental expenditures-noncurrent	119.5	136.6	119.5	136.6	132.3
Environment provisions charged (credited) to income [Abstract]
Charges to income	3.6	4.0	6.8	13.9
Recoveries From Third Parties Of Costs Incurred And Expensed In Prior Periods	0	(1.5)	(0.1)	(11.0)
Total environmental expense	$ 3.6	$ 2.5	$ 6.7	$ 2.9

XML

ACQUISITION (Details 2) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
KA Steel [Member]
Business Acquisition [Line Items]
Sales	$ 686.9	$ 656.2	$ 1,879.8	$ 1,803.4
Net income	39.3	44.5	124.9	220.4
Net income per common share-basic (in dollars per share)	$ 0.49	$ 0.56	$ 1.56	$ 2.76
Net income per common share-diluted (in dollars per share)	$ 0.48	$ 0.55	$ 1.54	$ 2.73
SunBelt [Member]
Business Acquisition [Line Items]
Sales				1,541.6
Net income				$ 121.9
Net income per common share-basic (in dollars per share)				$ 1.53
Net income per common share-diluted (in dollars per share)				$ 1.51

XML

DERIVATIVE FINANCIAL INSTRUMENTS (Tables)

9 Months Ended

Sep. 30, 2012

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of derivative instruments

We had the following notional amount of outstanding commodity forward contracts that were entered into to hedge forecasted purchases:

	September 30, 2012		December 31, 2011		September 30, 2011
	($ in millions)
Copper	$	59.8	$	52.1	$	54.3
Zinc	5.9		7.3		7.7
Lead	49.6		37.9		36.1
Natural gas	8.6		8.3		5.7

Summary of location and fair value of derivative instruments on condensed balance sheets

The following table summarizes the location and fair value of the derivative instruments on our condensed balance sheets.  The table disaggregates our net derivative assets and liabilities into gross components on a contract-by-contract basis before giving effect to master netting arrangements:

	Asset Derivatives								Liability Derivatives
		Fair Value								Fair Value
Derivatives Designated as Hedging Instruments	Balance Sheet Location	September 30, 2012			December 31, 2011		September 30, 2011		Balance Sheet Location	September 30, 2012		December 31, 2011			September 30, 2011
		($ in millions)								($ in millions)
Interest rate contracts	Other current assets	$	—		$	—	$	—	Current installments of long-term debt	$	—	$	—		$	0.6
Interest rate contracts	Other assets	—			2.2		14.3		Long-term debt	10.9		12.7			14.0
Interest rate contracts	Other assets	—			—		—		Other liabilities	—		—			0.2
Commodity contracts – gains	Other current assets	10.4			—		—		Accrued liabilities	—		(2.5		)	(2.3		)
Commodity contracts – losses	Other current assets	(2.0		)	—		—		Accrued liabilities	—		11.2			16.6
		$	8.4		$	2.2	$	14.3		$	10.9	$	21.4		$	29.1
Derivatives Not Designated as Hedging Instruments
Interest rate contracts	Other current assets	$	—		$	—	$	0.8	Accrued liabilities	$	—	$	—		$	0.3
Interest rate contracts – gains	Other assets	12.9			11.6		—		Other liabilities	—		—			—
Interest rate contracts – losses	Other assets	(4.0		)	—		—		Other liabilities	—		1.0			—
Commodity contracts – gains	Other current assets	0.7			—		—		Accrued liabilities	—		—			—
Commodity contracts – losses	Other current assets	(0.2		)	—		—		Accrued liabilities	—		1.5			0.4
		$	9.4		$	11.6	$	0.8		$	—	$	2.5		$	0.7
Total derivatives(1)		$	17.8		$	13.8	$	15.1		$	10.9	$	23.9		$	29.8

(1) Does not include the impact of cash collateral received from or provided to counterparties.

Summary of effects of derivative instruments on condensed statements of income

The following table summarizes the effects of derivative instruments on our condensed statements of income:

		Amount of Gain (Loss)						Amount of Gain (Loss)
		Three Months Ended September 30,						Nine Months Ended September 30,
	Location of Gain (Loss)	2012			2011			2012			2011
Derivatives – Cash Flow Hedges		($ in millions)
Recognized in other comprehensive loss (effective portion)	———	$	12.7		$	(21.7	)	$	10.3		$	(21.3	)
Reclassified from accumulated other comprehensive loss into income (effective portion)	Cost of goods sold	$	(2.3	)	$	1.2		$	(6.9	)	$	11.8
Derivatives – Fair Value Hedges
Interest rate contracts	Interest expense	$	0.7		$	1.8		$	2.6		$	5.8
Derivatives Not Designated as Hedging Instruments
Interest rate contracts	Interest expense	$	0.1		$	(0.1	)	$	0.1		$	—
Commodity contracts	Cost of goods sold	0.7			(0.4		)	(1.7		)	(0.8		)
		$	0.8		$	(0.5	)	$	(1.6	)	$	(0.8	)

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SHAREHOLDERS' EQUITY (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended						9 Months Ended		15 Months Ended
	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Jul. 21, 2011
Stockholders' Equity Note [Abstract]
Authorized share repurchase program (in shares)										5
Stock repurchase program period in force (in years)										3
Common stock repurchased and retired (in shares)							(0.2)	(0.1)
Stock Repurchased and Retired During Period, Value							$ 3.1	$ 2.2
Total repurchased shares under this program (in shares)									0.4
Remaining shares authorized to be purchased (in shares)	4.6						4.6		4.6
Stock options exercised							0.1	0.5
Total value of stock options exercised							1.4	9.3
Foreign Currency Translation Adjustment [Abstract]
Beginning balance			1.8			0.4	1.8	0.4
Unrealized gains (losses)	0.8	(0.8)	0.3	0	1.0	1.3	0.3	2.3
Ending balance	2.1			2.7			2.1	2.7	2.1
Unrealized Gains (Losses) on Derivative Contracts (net of taxes) [Abstract]
Beginning balance			(5.3)			11.6	(5.3)	11.6
Unrealized gains (losses)	7.8	(4.1)	2.6	(13.2)	(0.2)	0.4
Reclassification adjustments into income	1.4	1.1	1.7	(0.8)	(2.9)	(3.5)
Ending balance	5.2			(8.6)			5.2	(8.6)	5.2
Pension and Postretirement Benefits (net of taxes) [Abstract]
Beginning balance			(290.7)			(273.8)	(290.7)	(273.8)
Unrealized gains (Losses)	0	0	0	0	0	0
Reclassification adjustments into income	3.3	4.3	3.2	3.0	3.3	2.8
Ending balance	(279.9)			(264.7)			(279.9)	(264.7)	(279.9)
Accumulated Other Comprehensive Loss [Abstract]
Beginning balance			(294.2)			(261.8)	(294.2)	(261.8)
Unrealized gains (losses)	8.6	(4.9)	2.9	(13.2)	0.8	1.7
Reclassification adjustments into income	4.7	5.4	4.9	2.2	0.4	(0.7)
Ending balance	(272.6)			(270.6)			(272.6)	(270.6)	(272.6)
Deferred tax provision (benefit) on unrealized gains and losses on derivative contracts	5.8			(8.9)			6.7	(12.9)
Deferred tax provision pension and postretirement benefits	$ 2.2			$ 1.9			$ 6.8	$ 5.9

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FAIR VALUE MEASUREMENTS (Details 2) (USD $) In Millions, unless otherwise specified	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011	Dec. 31, 2010
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Balance at beginning of year	$ 37.6	$ 44.9	$ 49.0	$ 0
(Settlements) Purchases	(18.5)	42.3
Unrealized losses included in other (expense) income	$ 7.1	$ 2.6

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DERIVATIVE FINANCIAL INSTRUMENTS (Details Textuals) (USD $) In Millions, unless otherwise specified	3 Months Ended	9 Months Ended
	Jun. 30, 2012	Sep. 30, 2012	Mar. 31, 2012	Dec. 31, 2011	Sep. 30, 2011	Sep. 30, 2012 Forward Contracts Buy Foreign Currencies [Member]	Dec. 31, 2011 Forward Contracts Buy Foreign Currencies [Member]	Sep. 30, 2011 Forward Contracts Buy Foreign Currencies [Member]	Sep. 30, 2012 Forward Contracts Sell Foreign Currencies [Member]	Dec. 31, 2011 Forward Contracts Sell Foreign Currencies [Member]	Sep. 30, 2011 Forward Contracts Sell Foreign Currencies [Member]	Dec. 31, 2011 Variable Interest Rate Swaps $75M [Member]	Jan. 31, 2009 Variable Interest Rate Swaps $75M [Member]	Dec. 31, 2011 Fixed Interest Rate Swap $75M [Member]	Sep. 30, 2012 Interest Rate Swaps Designated As Fair Value Hedges [Member]	Dec. 31, 2011 Interest Rate Swaps Designated As Fair Value Hedges [Member]	Sep. 30, 2011 Interest Rate Swaps Designated As Fair Value Hedges [Member]	Sep. 30, 2012 Variable Interest Rate Swaps $125M [Member]	Oct. 31, 2011 Variable Interest Rate Swaps $125M [Member]	Sep. 30, 2012 Fixed Interest Rate Swaps $125M [Member]
Derivative [Line Items]
Notional amount						$ 0	$ 0	$ 0	$ 8.3	$ 0	$ 0	$ 75.0		$ 75.0	$ 0	$ 80.8	$ 218.0	$ 125.0		$ 125.0
Amount of gain included in long-term debt		2.0											7.9					8.9	11.0
Cash flow hedges [Abstract]
Amount of commodity forward contracts with Wells Fargo		85.6
Gain if all open futures contracts were settled		8.4
Approximate amount of deferred gains would be reclassified into earnings during the next twelve months		5.9
Fair value hedges [Abstract]
Amount of terminated interest rate swaps		73.1	7.7
Gain on terminated interest rate swaps		2.2	0.2
Gain on terminated interest rate swaps on recognized in interest expense upon redemption of our industrial revenue bonds	0.2
Credit risk and collateral [Abstract]
Amounts recognized in other current assets or (accrued liabilities) for cash collateral provided by us to counterparties.		$ 0		$ 3.9	$ 7.0

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INVENTORIES (Details) (USD $) In Millions, unless otherwise specified	Sep. 30, 2012	Aug. 22, 2012	Dec. 31, 2011	Sep. 30, 2011	Feb. 28, 2011
Inventory Disclosure [Abstract]
Supplies	$ 35.6		$ 35.0	$ 32.8
Raw materials	73.1		75.7	69.8
Work in process	33.6		31.9	32.4
Finished goods	149.3		111.7	104.9
Inventory, gross	291.6		254.3	239.9
LIFO reserve	(77.9)		(77.7)	(73.6)
Inventories, net	213.7		176.6	166.3
Inventories obtained through acquisition at fair value		$ 35.8			$ 4.0

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DESCRIPTION OF BUSINESS

9 Months Ended

Sep. 30, 2012

Organization, Consolidation and Presentation of Financial Statements [Abstract]

DESCRIPTION OF BUSINESS

DESCRIPTION OF BUSINESS

Olin Corporation is a Virginia corporation, incorporated in 1892.  We are a manufacturer concentrated in three business segments:  Chlor Alkali Products, Chemical Distribution and Winchester.  Chlor Alkali Products, with nine U.S. manufacturing facilities and one Canadian manufacturing facility, produces chlorine and caustic soda, hydrochloric acid, hydrogen, bleach products and potassium hydroxide.  Chemical Distribution, with twenty-nine owned and leased terminal facilities, manufactures bleach products and distributes caustic soda, bleach products, potassium hydroxide and hydrochloric acid. Winchester, with its principal manufacturing facilities in East Alton, IL and Oxford, MS, produces and distributes sporting ammunition, reloading components, small caliber military ammunition and components, and industrial cartridges.

We have prepared the condensed financial statements included herein, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC).  The preparation of the consolidated financial statements requires estimates and assumptions that affect amounts reported and disclosed in the financial statements and related notes.  In our opinion, these financial statements reflect all adjustments (consisting only of normal accruals), which are necessary to present fairly the results for interim periods.  Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations; however, we believe that the disclosures are appropriate.  We recommend that you read these condensed financial statements in conjunction with the financial statements, accounting policies and the notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2011.  Certain reclassifications were made to prior year amounts to conform to the 2012 presentation.

On August 22, 2012, we acquired 100% of privately-held K. A. Steel Chemicals Inc. (KA Steel), whose operating results are included in the accompanying financial statements since the date of the acquisition.

On February 28, 2011, we acquired PolyOne Corporation’s (PolyOne) 50% interest in the SunBelt Chlor Alkali Partnership, which we refer to as SunBelt.  Previously, we had a 50% ownership interest in SunBelt, which was accounted for using the equity method of accounting.  Accordingly, prior to the acquisition, we included only our share of SunBelt results in earnings of non-consolidated affiliates.  Since the date of acquisition, SunBelt’s results are no longer included in earnings of non-consolidated affiliates but are consolidated in our accompanying financial statements.

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DERIVATIVE FINANCIAL INSTRUMENTS (Details 1) (USD $) In Millions, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2011
Copper Commodity Forward Contracts [Member]
Derivative [Line Items]
Notional amount	$ 59.8	$ 52.1	$ 54.3
Zinc Commodity Forward Contracts [Member]
Derivative [Line Items]
Notional amount	5.9	7.3	7.7
Lead Commodity Forward Contracts [Member]
Derivative [Line Items]
Notional amount	49.6	37.9	36.1
Natural Gas Commodity Forward Contracts [Member]
Derivative [Line Items]
Notional amount	$ 8.6	$ 8.3	$ 5.7

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RESTRUCTURING CHARGE (Details Textuals) (USD $) In Millions, unless otherwise specified	3 Months Ended						9 Months Ended		23 Months Ended
	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Dec. 31, 2011	Dec. 31, 2010	Dec. 09, 2010 T
Restructuring Cost and Reserve [Line Items]
Previous mercury cell capacity tonnage at Charleston, TN facility (in tons)												260,000
Membrane capacity tonnage capability at Charleston, TN facility (in tons)												200,000
Estimated capital cost converting Charleston, TN facility	$ 165						$ 165		$ 165
Percentage reduction of electricity usage per ECU produced (in hundredths)	25.00%						25.00%		25.00%
Product Segment Production Capacity Decrease												160,000
Forecast annual reduction of Winchester's annual operating costs							30
Estimated five-year project cost for Winchester relocation	110						110		110
Estimated capital spending for Winchester relocation	80						80		80
Percentage of capital spending offset provided by State of Mississippi tax incentives (in hundredths)	40.00%						40.00%		40.00%
Restructuring charges	2.3	1.8	1.9	4.1	2.4	0.1	6.0	6.6	50.9
Inception to date Amounts Utilized (cash)									9.0
Inception to date Amounts Utilized (non-cash)									28.3
Accrued restructuring costs	13.6			10.3			13.6	10.3	13.6	12.1	7.0
Chlor Alkali Products Segment [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring charges	0.5			2.0			1.0	2.3	31.8
Restructuring And Related Cost Expected Cost							7
Winchester Segment [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring charges	1.8			2.1			5.0	4.3	19.1
Restructuring And Related Cost Expected Cost							$ 11

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OTHER ASSETS (Tables)

9 Months Ended

Sep. 30, 2012

Other Assets [Abstract]

Schedule of Other Assets

	September 30, 2012		December 31, 2011		September 30, 2011
	($ in millions)
Investments in non-consolidated affiliates	$	29.1	$	27.6	$	27.3
Intangible assets (less accumulated amortization of $9.8 million, $6.9 million and $6.2 million, respectively)	156.4		19.2		19.6
Deferred debt issuance costs	18.0		14.2		14.7
Interest rate swaps	8.9		13.8		14.3
Other	11.2		10.8		10.9
Other assets	$	223.6	$	85.6	$	86.8

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INVENTORIES (Tables)

9 Months Ended

Sep. 30, 2012

Inventory Disclosure [Abstract]

Inventories Table

Inventories consisted of the following:

	September 30, 2012			December 31, 2011			September 30, 2011
	($ in millions)
Supplies	$	35.6		$	35.0		$	32.8
Raw materials	73.1			75.7			69.8
Work in process	33.6			31.9			32.4
Finished goods	149.3			111.7			104.9
	291.6			254.3			239.9
LIFO reserve	(77.9		)	(77.7		)	(73.6		)
Inventories, net	$	213.7		$	176.6		$	166.3

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PENSION PLANS AND RETIREMENT BENEFITS (Details Textuals) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Compensation and Retirement Disclosure [Abstract]
Contribution to an individual retirement account as a percentage of employee's eligible compensation under age 45 (in hundredths)	5.00%		5.00%
Contribution to an individual retirement account as a percentage of employee's eligible compensation age 45 and older (in hundredths)	7.50%		7.50%
Defined contribution pension plans expense	$ 4.2	$ 3.5	$ 12.3	$ 10.9
Employer's contribution to defined benefit pension			0.6	0.7
Non cash pension and other Postretirement Benefits Curtailment Charge				$ 1.1

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RESTRUCTURING CHARGE (Details 1) (USD $) In Millions, unless otherwise specified	3 Months Ended						9 Months Ended		23 Months Ended
	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Dec. 31, 2011	Dec. 31, 2010
Restructuring Cost and Reserve [Line Items]
Accrued restructuring costs	$ 13.6			$ 10.3			$ 13.6	$ 10.3	$ 13.6	$ 12.1	$ 7.0
Restructuring charges	2.3	1.8	1.9	4.1	2.4	0.1	6.0	6.6	50.9
Restructuring and Related Cost, Incurred Cost							(4.5)	(3.3)
Employee Severance [Member]
Restructuring Cost and Reserve [Line Items]
Accrued restructuring costs	13.0			9.5			13.0	9.5	13.0	11.3	6.0
Restructuring charges	1.3	1.0	0.9	2.7	0.9	0.1			15.6
Restructuring and Related Cost, Incurred Cost							(1.5)	(0.2)
Pension and other postretirement benefits curtailment [Member]
Restructuring Cost and Reserve [Line Items]
Accrued restructuring costs	0			0			0	0	0	0	0
Restructuring charges	0	0	0	0	1.1	0			4.1
Restructuring and Related Cost, Incurred Cost							0	(1.1)
Lease and Other Contract Termination [Member]
Restructuring Cost and Reserve [Line Items]
Accrued restructuring costs	0.6			0.8			0.6	0.8	0.6	0.8	1.0
Restructuring charges	0	0	0	0	0	0			1.0
Restructuring and Related Cost, Incurred Cost							(0.2)	(0.2)
Employee Relocation Cost [Member]
Restructuring Cost and Reserve [Line Items]
Accrued restructuring costs	0			0			0	0	0	0	0
Restructuring charges	0.5	0.7	0.8	1.0	0.3	0			4.2
Restructuring and Related Cost, Incurred Cost							(2.0)	(1.3)
Facility Exit Costs (asset retirement obligations [Member]
Restructuring Cost and Reserve [Line Items]
Accrued restructuring costs	0			0			0	0	0	0	0
Restructuring charges	0.5	0.1	0.2	0.4	0.1	0			8.5
Restructuring and Related Cost, Incurred Cost							$ (0.8)	$ (0.5)

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EARNINGS PER SHARE (Tables)

9 Months Ended

Sep. 30, 2012

Earnings Per Share [Abstract]

Basic and Diluted Earnings Per Share Table

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
Computation of Income per Share	($ and shares in millions, except per share data)
Net income	$	28.7	$	47.2	$	115.0	$	223.0
Basic shares	80.1		80.2		80.1		79.9
Basic net income per share	$	0.36	$	0.59	$	1.44	$	2.79
Diluted shares:
Basic shares	80.1		80.2		80.1		79.9
Stock-based compensation	0.9		0.6		0.8		0.9
Diluted shares	81.0		80.8		80.9		80.8
Diluted net income per share	$	0.35	$	0.58	$	1.42	$	2.76

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ENVIRONMENTAL (Tables)

9 Months Ended

Sep. 30, 2012

Environmental Remediation Obligations [Abstract]

Environmental Provisions Charged (Credited) to Income Table

Environmental provisions charged (credited) to income, which are included in cost of goods sold, were as follows:

	Three Months Ended September 30,					Nine Months Ended September 30,
	2012		2011			2012			2011
	($ in millions)
Charges to income	$	3.6	$	4.0		$	6.8		$	13.9
Recoveries from third parties of costs incurred and expensed in prior periods	—		(1.5		)	(0.1		)	(11.0		)
Total environmental expense	$	3.6	$	2.5		$	6.7		$	2.9

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Condensed Statements of Cash Flows (USD $) In Millions, unless otherwise specified	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Operating Activities
Net income	$ 115.0	$ 223.0
Adjustments to reconcile net income to net cash and cash equivalents provided by (used for) operating activities:
Gain on remeasurement of investment in SunBelt	0	(181.4)
Earnings of non-consolidated affiliates	(2.0)	(8.5)
Gains on disposition of property, plant and equipment	(0.9)	(4.8)
Stock-based compensation	4.2	4.3
Depreciation and amortization	78.7	74.1
Deferred income taxes	34.5	93.1
Qualified pension plan contributions	(0.6)	(0.7)
Qualified pension plan income	(18.6)	(19.5)
Change in:
Receivables	(48.6)	(79.6)
Income taxes receivable	(11.7)	3.5
Inventories	(1.3)	(6.7)
Other current assets	0.7	0.3
Accounts payable and accrued liabilities	15.0	11.6
Other assets	4.7	(0.2)
Other noncurrent liabilities	(10.0)	6.1
Other operating activities	(0.5)	(2.2)
Net operating activities	158.6	112.4
Investing Activities
Capital expenditures	(210.8)	(128.4)
Business acquired in purchase transaction, net of cash acquired	(312.3)	(123.4)
Proceeds from sale/leaseback of equipment	3.5	0
Proceeds from disposition of property, plant and equipment	3.7	6.2
Distributions from affiliated companies, net	0.5	1.1
Restricted cash activity	33.2	30.4
Other investing activities	(0.4)	2.3
Net investing activities	(482.6)	(211.8)
Financing Activities
Long-term debt borrowings	200.0	0
Long-term debt repayments	(7.7)	0
Earn out payment - SunBelt	(15.3)	0
Common stock repurchased and retired	(3.1)	(2.2)
Stock options exercised	1.3	7.3
Excess tax benefits from stock-based compensation	0.7	2.0
Dividends paid	(48.0)	(48.0)
Deferred debt issuance costs	(5.6)	0
Net financing activities	122.3	(40.9)
Net decrease in cash and cash equivalents	(201.7)	(140.3)
Cash and cash equivalents, beginning of period	304.8	458.6
Cash and cash equivalents, end of period	103.1	318.3
Cash paid for interest and income taxes:
Interest	18.4	19.6
Income taxes, net of refunds	28.5	34.4
Non-cash investing activities:
Capital expenditures included in accounts payable and accrued liabilities	$ 20.2	$ (4.2)

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SHAREHOLDERS' EQUITY (Tables)

9 Months Ended

Sep. 30, 2012

Stockholders' Equity Note [Abstract]

Activity included in accumulated other comprehensive loss table

The following table represents the activity included in accumulated other comprehensive loss:

	Foreign Currency Translation Adjustment			Unrealized Gains (Losses) on Derivative Contracts (net of taxes)			Pension and Postretirement Benefits (net of taxes)			Accumulated Other Comprehensive Loss
	($ in millions)
Balance at January 1, 2011	$	0.4		$	11.6		$	(273.8	)	$	(261.8	)
Unrealized gains (losses):
First quarter	1.3			0.4			—			1.7
Second quarter	1.0			(0.2		)	—			0.8
Third quarter	—			(13.2		)	—			(13.2		)
Reclassification adjustments into income:
First quarter	—			(3.5		)	2.8			(0.7		)
Second quarter	—			(2.9		)	3.3			0.4
Third quarter	—			(0.8		)	3.0			2.2
Balance at September 30, 2011	$	2.7		$	(8.6	)	$	(264.7	)	$	(270.6	)
Balance at January 1, 2012	$	1.8		$	(5.3	)	$	(290.7	)	$	(294.2	)
Unrealized gains (losses):
First quarter	0.3			2.6			—			2.9
Second quarter	(0.8		)	(4.1		)	—			(4.9		)
Third quarter	0.8			7.8			—			8.6
Reclassification adjustments into income:
First quarter	—			1.7			3.2			4.9
Second quarter	—			1.1			4.3			5.4
Third quarter	—			1.4			3.3			4.7
Balance at September 30, 2012	$	2.1		$	5.2		$	(279.9	)	$	(272.6	)

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ACQUISITION (Details Textuals) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended					2 Months Ended		3 Months Ended	12 Months Ended			12 Months Ended		3 Months Ended		8 Months Ended	9 Months Ended		3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Aug. 22, 2012	Dec. 31, 2011	Feb. 28, 2011	Feb. 28, 2011 Customers, customer contracts and relationships [Member]	Feb. 28, 2011 SunBelt [Member] T	Jun. 30, 2011 SunBelt [Member]	Dec. 31, 2012 SunBelt [Member]	Dec. 31, 2012 Guaranteed Senior Secured Notes due 2017, Series O [Member]	Dec. 22, 1997 Guaranteed Senior Secured Notes due 2017, Series O [Member]	Dec. 31, 2012 Guaranteed Senior Secured Notes due 2017, Series G [Member]	Dec. 22, 1997 Guaranteed Senior Secured Notes due 2017, Series G [Member]	Sep. 30, 2012 KA Steel [Member]	Sep. 30, 2011 KA Steel [Member]	Aug. 22, 2012 KA Steel [Member]	Sep. 30, 2012 KA Steel [Member]	Sep. 30, 2011 KA Steel [Member]	Sep. 30, 2012 Chemical Distribution [Member]	Sep. 30, 2011 Chemical Distribution [Member]	Sep. 30, 2012 Chemical Distribution [Member]	Sep. 30, 2011 Chemical Distribution [Member]	Sep. 30, 2011 SunBelt [Member]	Dec. 22, 1997 SunBelt [Member]
Business Acquisition [Line Items]
Business Acquisition, Percentage of Voting Interests Acquired					100.00%		50.00%		50.00%									100.00%
Cash consideration for business acquisition									$ 132.3									$ 338.5
Cash and cash equivalents									8.9									26.2
Face amount of senior secured notes													97.5		97.5			200.0
Interest rate																		5.50%								7.23%
Long Term Debt Net Proceeds																		196.0
Payments of Debt Issuance Costs			5.6	0														4.0
Sales	581.2	550.2	1,597.1	1,515.3																	47.6	0	47.6	0
Income before taxes	46.7	69.4	170.5	352.9																	1.9	0	1.9	0
Depreciation and amortization			78.7	74.1																	1.7		1.7
Purchase Price Allocation, Receivables																		61.8
Business Acquisition Contracted Receivables Acquired																		63.5
Other liabilities									27.6									10.0
Final valuation of intangible assets relating to customers, customer contracts and relationships								5.8										128.6
Estimated useful life of intangible assets (in years)								15										10
Acquired Indefinite-lived Intangible Asset, Amount																		10.9
Goodwill									327.1
Tax deductible portion of goodwill									163.7									124.9
Additional amortization expense related to the fair value of acquired identifiable intangible assets																2.0	3.5		9.0	10.3					0.1
Increase (reduction) of depreciation expense related to the fair value adjustment to property, plant and equipment																0	0.1		0.2	0.2					(1.0)
Increase in interest expense due to debt issuance for acquisition																1.6	2.8		7.1	8.3
Eliminatation of intersegment sales																4.6	15.0		23.2	37.0
Pro Forma Adjustment Acquisition costs	8.3	0	8.3	0.8												8.3			8.3						0.8
Reduction in interest expense as a result of increasing the carrying value of acquired debt obligations to its estimated fair value																									0.1
Additional accretion expense for the earn out liability that was recorded as a result of the acquisition																									0.4
Pro forma increase (decrease) of tax provision due to fair value adjustments																3.9	(2.6)		0.7	(5.0)					2.3
Olin's ownership percentage of SunBelt after acquisition of PolyOne's interest (in hundredths)									100.00%
Membrane technology capacity of plant (in tons)									350,000
Earn out agreement term (in years)									3
Cash remitted to PolyOne for distributable cash generated by SunBelt										6.0
Percentage of ownership in Sunbelt prior to acquiring remaining 50%							50.00%																		50.00%
Required annual debt repayment for Series O and Series G notes											12.2	6.1		6.1
Fair value of acquired debt									87.3
Remaining principal balance of consolidated notes									85.3
Income (Loss) from Equity Method Investments	1.2	0.8	2.0	8.5					6.3
Equity Method Investments	29.1	27.3	29.1	27.3		27.6			0.8
Pretax gain on acquisition of SunBelt									181.4
Discrete deferred tax expense relating to the SunBelt acquisition									76.0
Current installment of long term debt									$ 12.2

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SEGMENT INFORMATION (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended						9 Months Ended		23 Months Ended
	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012
Segment Reporting Information [Line Items]
Segment Reporting Information, Intersegment Revenue	$ 4.8						$ 4.8
Total sales	581.2			550.2			1,597.1	1,515.3
Income before taxes [Abstract]
Income before taxes	46.7			69.4			170.5	352.9
Environmental expense	3.6			2.5			6.7	2.9
Restructuring charges	(2.3)	(1.8)	(1.9)	(4.1)	(2.4)	(0.1)	(6.0)	(6.6)	(50.9)
Acquisition costs	8.3			0			8.3	0.8
Other operating income	1.1			4.3			1.5	5.9
Interest expense	(6.0)			(7.9)			(18.3)	(22.5)
Interest income	0.2			0.2			0.7	0.7
Other (expense) income	(2.2)			(1.6)			(6.9)	179.0
Chlor Alkali Products [Member]
Segment Reporting Information [Line Items]
Total sales	364.8			386.1			1,087.7	1,065.8
Income before taxes [Abstract]
Income before taxes	59.5			76.7			208.9	194.7
Chemical Distribution [Member]
Segment Reporting Information [Line Items]
Total sales	47.6			0			47.6	0
Income before taxes [Abstract]
Income before taxes	1.9			0			1.9	0
Winchester [Member]
Segment Reporting Information [Line Items]
Total sales	168.8			164.1			461.8	449.5
Income before taxes [Abstract]
Income before taxes	16.0			13.1			38.7	37.4
Corporate/Other [Member]
Income before taxes [Abstract]
Pension income	7.2			6.9			20.5	20.8
Environmental expense	(3.6)			(2.5)			(6.7)	(2.9)
Other corporate and unallocated costs	(16.8)			(15.7)			(55.5)	(52.8)
Restructuring charges	(2.3)			(4.1)			(6.0)	(6.6)
Acquisition costs	$ (8.3)			$ 0			$ (8.3)	$ (0.8)

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Condensed Balance Sheets (USD $) In Millions, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2011
Current assets:
Cash and cash equivalents	$ 103.1	$ 304.8	$ 318.3
Receivables, net	347.7	237.1	290.5
Income tax receivable	12.4	0.7	2.2
Inventories	213.7	176.6	166.3
Current deferred income taxes	56.5	50.9	50.4
Other current assets	20.0	10.2	11.1
Total current assets	753.4	780.3	838.8
Property, plant and equipment (less accumulated depreciation of $1,206.0, $1,144.0 and $1,122.1)	1,018.2	885.4	821.3
Prepaid pension costs	51.1	19.2	46.1
Restricted cash	18.5	51.7	71.6
Other assets	223.6	85.6	86.8
Goodwill	752.3	627.4	627.4
Total assets	2,817.1	2,449.6	2,492.0
Current liabilities:
Current installments of long-term debt	23.6	12.2	87.8
Accounts payable	189.4	149.7	129.6
Accrued liabilities	249.2	237.2	237.6
Total current liabilities	462.2	399.1	455.0
Long-term debt	703.1	524.2	501.8
Accrued pension liability	66.8	59.1	55.2
Deferred income taxes	153.2	99.6	113.5
Other liabilities	355.2	381.8	359.3
Total liabilities	1,740.5	1,463.8	1,484.8
Commitments and contingencies
Shareholders' equity:
Common stock, par value $1 per share: authorized, 120.0 shares; issued and outstanding 80.2, 80.1 and 80.2 shares	80.2	80.1	80.2
Additional paid-in capital	854.1	852.0	852.4
Accumulated other comprehensive loss	(272.6)	(294.2)	(270.6)
Retained earnings	414.9	347.9	345.2
Total shareholders' equity	1,076.6	985.8	1,007.2
Total liabilities and shareholders' equity	$ 2,817.1	$ 2,449.6	$ 2,492.0

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RESTRUCTURING CHARGE (Details 2) (USD $) In Millions, unless otherwise specified	3 Months Ended						9 Months Ended		23 Months Ended
	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012
Restructuring Cost and Reserve [Line Items]
Restructuring charges	$ 2.3	$ 1.8	$ 1.9	$ 4.1	$ 2.4	$ 0.1	$ 6.0	$ 6.6	$ 50.9
Write-off of equipment and facility [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring charges									17.5
Employee Severance [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring charges	1.3	1.0	0.9	2.7	0.9	0.1			15.6
Facility Exit Costs (asset retirement obligations [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring charges	0.5	0.1	0.2	0.4	0.1	0			8.5
Pension and other postretirement benefits curtailment [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring charges	0	0	0	0	1.1	0			4.1
Employee Relocation Cost [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring charges	0.5	0.7	0.8	1.0	0.3	0			4.2
Lease and Other Contract Termination [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring charges	0	0	0	0	0	0			1.0
Winchester Segment [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring charges	1.8			2.1			5.0	4.3	19.1
Winchester Segment [Member] | Write-off of equipment and facility [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring charges									0
Winchester Segment [Member] | Employee Severance [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring charges									10.1
Winchester Segment [Member] | Facility Exit Costs (asset retirement obligations [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring charges									0.8
Winchester Segment [Member] | Pension and other postretirement benefits curtailment [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring charges									4.1
Winchester Segment [Member] | Employee Relocation Cost [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring charges									4.1
Winchester Segment [Member] | Lease and Other Contract Termination [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring charges									0
Chlor Alkali Products Segment [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring charges	0.5			2.0			1.0	2.3	31.8
Chlor Alkali Products Segment [Member] | Write-off of equipment and facility [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring charges									17.5
Chlor Alkali Products Segment [Member] | Employee Severance [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring charges									5.5
Chlor Alkali Products Segment [Member] | Facility Exit Costs (asset retirement obligations [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring charges									7.7
Chlor Alkali Products Segment [Member] | Pension and other postretirement benefits curtailment [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring charges									0
Chlor Alkali Products Segment [Member] | Employee Relocation Cost [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring charges									0.1
Chlor Alkali Products Segment [Member] | Lease and Other Contract Termination [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring charges									$ 1.0

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Condensed Statements of Shareholders' Equity (USD $) In Millions, unless otherwise specified	Total	Common Stock [Member]	Additional Paid-In Capital [Member]	Accumulated Other Comprehensive Loss [Member]	Retained Earnings [Member]
Balance at Dec. 31, 2010	$ 830.3	$ 79.6	$ 842.3	$ (261.8)	$ 170.2
Balance (in shares) at Dec. 31, 2010		79.6
Net income	223.0	0	0	0	223.0
Other comprehensive income (loss)	(8.8)	0	0	(8.8)	0
Dividends paid:
Common stock ($0.60 per share)	(48.0)	0	0	0	(48.0)
Common stock repurchased and retired	(2.2)	(0.1)	(2.1)	0	0
Common stock repurchased and retired (in shares)	(0.1)	(0.1)
Common stock issued for:
Stock options exercised	9.3	0.5	8.8	0	0
Stock options exercised (in shares)	0.5	0.5
Other transactions	3.8	0.2	3.6	0	0
Other transactions (in shares)		0.2
Stock-based compensation	(0.2)	0	(0.2)	0	0
Balance at Sep. 30, 2011	1,007.2	80.2	852.4	(270.6)	345.2
Balance (in shares) at Sep. 30, 2011		80.2
Balance at Dec. 31, 2011	985.8	80.1	852.0	(294.2)	347.9
Balance (in shares) at Dec. 31, 2011		80.1
Net income	115.0	0	0	0	115.0
Other comprehensive income (loss)	21.6	0	0	21.6	0
Dividends paid:
Common stock ($0.60 per share)	(48.0)	0	0	0	(48.0)
Common stock repurchased and retired	(3.1)	(0.2)	(2.9)	0	0
Common stock repurchased and retired (in shares)	(0.2)	(0.2)
Common stock issued for:
Stock options exercised	1.4	0.1	1.3	0	0
Stock options exercised (in shares)	0.1	0.1
Other transactions	2.6	0.2	2.4	0	0
Other transactions (in shares)		0.2
Stock-based compensation	1.3	0	1.3	0	0
Balance at Sep. 30, 2012	$ 1,076.6	$ 80.2	$ 854.1	$ (272.6)	$ 414.9
Balance (in shares) at Sep. 30, 2012		80.2

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INCOME TAXES (Details 1)	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Income Tax Contingency [Line Items]
Statutory federal tax rate	35.00%	35.00%	35.00%	35.00%
Foreign rate differential	(0.10%)	(0.10%)	(0.10%)	0.00%
Domestic manufacturing/export tax incentive	0.30%	(1.60%)	(0.90%)	(0.80%)
Dividends paid to CEOP	(0.50%)	(0.40%)	(0.40%)	(0.20%)
State income taxes, net	1.50%	2.40%	1.00%	1.20%
Return to provision	0.70%	2.00%	0.30%	0.60%
Remeasurement of deferred taxes	0.50%	0.00%	0.80%	(1.40%)
Section 45O tax credit	(0.60%)	0.00%	(3.70%)	0.00%
Incremental tax effect of SunBelt remeasurement	0.00%	0.00%	0.00%	3.50%
Change in tax contingencies	0.10%	(5.20%)	0.70%	(1.00%)
Change valuation allowance	0.70%	0.00%	(0.30%)	0.00%
Australia dividend residual tax expense	1.60%	0.00%	0.40%	0.00%
Other, net	(0.70%)	(0.10%)	(0.20%)	(0.10%)
Effective tax rate	38.50%	32.00%	32.60%	36.80%

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PENSION PLANS AND RETIREMENT BENEFITS (Tables)

9 Months Ended

Sep. 30, 2012

Compensation and Retirement Disclosure [Abstract]

Components of Net Periodic Benefit (Income) Cost

	Pension Benefits						Other Postretirement Benefits
	Three Months Ended September 30,						Three Months Ended September 30,
	2012			2011			2012		2011
Components of Net Periodic Benefit (Income) Cost	($ in millions)
Service cost	$	1.5		$	1.6		$	0.3	$	0.2
Interest cost	22.9			23.4			0.7		0.7
Expected return on plans’ assets	(34.9		)	(34.9		)	—		—
Amortization of prior service cost	0.1			0.1			—		—
Recognized actuarial loss	4.8			3.8			0.6		1.0
Net periodic benefit (income) cost	$	(5.6	)	$	(6.0	)	$	1.6	$	1.9

	Pension Benefits						Other Postretirement Benefits
	Nine Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Components of Net Periodic Benefit (Income) Cost	($ in millions)
Service cost	$	4.6		$	4.8		$	1.0		$	0.9
Interest cost	69.0			70.6			2.4			2.6
Expected return on plans’ assets	(104.7		)	(104.7		)	—			—
Amortization of prior service cost	0.2			0.3			(0.1		)	(0.1		)
Recognized actuarial loss	15.0			11.3			2.5			2.4
Curtailment	—			1.1			—			—
Net periodic benefit (income) cost	$	(15.9	)	$	(16.6	)	$	5.8		$	5.8

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FAIR VALUE MEASUREMENTS (Details Textuals) (USD $) In Millions, unless otherwise specified	2 Months Ended	9 Months Ended
	Feb. 28, 2011	Sep. 30, 2012	Sep. 30, 2011	Aug. 22, 2012	Dec. 31, 2011
Fair Value Disclosure [Line Items]
Total earn out payment - SunBelt		$ 18.5
Earn out payment - SunBelt		15.3	0
Assets measured at fair value on a nonrecurring basis	180.6	0	0		0
Gain on remeasurement of investment in SunBelt	181.4	0	181.4
Equity interest in SunBelt prior to remeasuring		(29.1)	(27.3)		(27.6)
Business Acquisition, Percentage of Voting Interests Acquired	50.00%			100.00%
Foreign Currency Contracts		0	0		0
SunBelt [Member]
Fair Value Disclosure [Line Items]
Equity interest in SunBelt prior to remeasuring	$ (0.8)
Business Acquisition, Percentage of Voting Interests Acquired	50.00%

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INCOME TAXES

9 Months Ended

Sep. 30, 2012

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

The following table accounts for the difference between the actual tax provision and the amounts obtained by applying the statutory U.S. federal income tax rate of 35% to income before taxes.

	Three Months Ended September 30,				Nine Months Ended September 30,
Effective Tax Rate Reconciliation (Percent)	2012		2011		2012		2011
Statutory federal tax rate	35.0	%	35.0	%	35.0	%	35.0	%
Foreign rate differential	(0.1	)	(0.1	)	(0.1	)	—
Domestic manufacturing/export tax incentive	0.3		(1.6	)	(0.9	)	(0.8	)
Dividends paid to CEOP	(0.5	)	(0.4	)	(0.4	)	(0.2	)
State income taxes, net	1.5		2.4		1.0		1.2
Return to provision	0.7		2.0		0.3		0.6
Remeasurement of deferred taxes	0.5		—		0.8		(1.4	)
Section 45O tax credit	(0.6	)	—		(3.7	)	—
Incremental tax effect of SunBelt remeasurement	—		—		—		3.5
Change in tax contingencies	0.1		(5.2	)	0.7		(1.0	)
Change in valuation allowance	0.7		—		(0.3	)	—
Australia dividend residual tax expense	1.6		—		0.4		—
Other, net	(0.7	)	(0.1	)	(0.2	)	(0.1	)
Effective tax rate	38.5	%	32.0	%	32.6	%	36.8	%

The effective tax rates for the three months ended September 30, 2012 and 2011 included the cumulative effect of changes to our annual estimated effective tax rate from prior quarters.

The effective tax rate for the three and nine months ended September 30, 2012 included a benefit of $0.3 million and $6.3 million, respectively, associated with the Agricultural Chemicals Security Tax Credit under Section 45O of the Internal Revenue Code (IRC) (Section 45O), which is scheduled to sunset on December 31, 2012, that was or will be claimed on our 2008 to 2012 U.S. federal income tax returns. The effective tax rate for the three and nine months ended September 30, 2012 included expenses of $0.1 million and $1.3 million, respectively, associated primarily with changes in unrecognized tax benefits associated with prior years' tax positions. The effective tax rate for the three and nine months ended September 30, 2012 included a $0.7 million expense related to providing tax on previously undistributed earnings from our Winchester Australia Limited subsidiary. The effective tax rate for the three and nine months ended September 30, 2012 also included expenses of $0.2 million and $1.4 million, respectively, related to the remeasurement of deferred taxes due to an increase in state effective tax rates.

The effective tax rate for the three months ended September 30, 2011 included a $1.4 million expense associated with the finalization of our 2010 domestic income tax returns. The effective tax rate for the nine months ended September 30, 2011 included a benefit of $4.9 million related to remeasurement of deferred taxes due to an increase in state tax effective rates, a $2.1 million expense associated with the finalization of our 2010 domestic and Canadian income tax returns and a deferred tax expense of $76.0 million related to the tax effect of our gain on the remeasurement of our previously held 50% equity interest in SunBelt.

We completed the acquisition of KA Steel on August 22, 2012, with both parties agreeing to an election under Section 338(h)(10) of the U.S. IRC, which allows us to treat the transaction as an asset acquisition for U.S. federal income tax purposes. KA Steel does not carry forward any significant tax attributes and has an immaterial effect on our quarterly tax provision.

As of September 30, 2012, we had $40.2 million of gross unrecognized tax benefits, which would have a net $38.4 million impact on the effective tax rate, if recognized.  As of September 30, 2011, we had $38.7 million of gross unrecognized tax benefits, of which $36.6 million would have impacted the effective tax rate, if recognized.  The amount of unrecognized tax benefits was as follows:

	September 30,
	2012			2011
	($ in millions)
Balance at beginning of year	$	37.9		$	41.5
Increases for prior year tax positions	2.9			0.2
Decreases for prior year tax positions	(0.4		)	—
Increases for current year tax positions	0.1			—
Settlement with taxing authorities	(0.3		)	—
Reductions due to statute of limitations	—			(3.0		)
Balance at end of period	$	40.2		$	38.7

As of September 30, 2012, we believe it is reasonably possible that our total amount of unrecognized tax benefits will decrease by approximately $8.3 million over the next twelve months.  The anticipated reduction primarily relates to settlements with taxing authorities and the expiration of federal, state and foreign statutes of limitation.

We operate primarily in North America and file income tax returns in numerous jurisdictions.  Our tax returns are subject to examination by various federal, state and local tax authorities.  We believe we have adequately provided for all tax positions; however, amounts asserted by taxing authorities could be greater than our accrued position.  For our primary tax jurisdictions, the tax years that remain subject to examination are as follows:

	Tax Years
U.S. federal income tax	2007 – 2011
U.S. state income tax	2004 – 2011
Canadian federal income tax	2007 – 2011
Canadian provincial income tax	2007 – 2011

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INCOME TAXES (Tables)

9 Months Ended

Sep. 30, 2012

Income Tax Disclosure [Abstract]

Effective Tax Rate Reconciliation (Percent)

The following table accounts for the difference between the actual tax provision and the amounts obtained by applying the statutory U.S. federal income tax rate of 35% to income before taxes.

	Three Months Ended September 30,				Nine Months Ended September 30,
Effective Tax Rate Reconciliation (Percent)	2012		2011		2012		2011
Statutory federal tax rate	35.0	%	35.0	%	35.0	%	35.0	%
Foreign rate differential	(0.1	)	(0.1	)	(0.1	)	—
Domestic manufacturing/export tax incentive	0.3		(1.6	)	(0.9	)	(0.8	)
Dividends paid to CEOP	(0.5	)	(0.4	)	(0.4	)	(0.2	)
State income taxes, net	1.5		2.4		1.0		1.2
Return to provision	0.7		2.0		0.3		0.6
Remeasurement of deferred taxes	0.5		—		0.8		(1.4	)
Section 45O tax credit	(0.6	)	—		(3.7	)	—
Incremental tax effect of SunBelt remeasurement	—		—		—		3.5
Change in tax contingencies	0.1		(5.2	)	0.7		(1.0	)
Change in valuation allowance	0.7		—		(0.3	)	—
Australia dividend residual tax expense	1.6		—		0.4		—
Other, net	(0.7	)	(0.1	)	(0.2	)	(0.1	)
Effective tax rate	38.5	%	32.0	%	32.6	%	36.8	%

Unrecognized Tax Benefits

 The amount of unrecognized tax benefits was as follows:

	September 30,
	2012			2011
	($ in millions)
Balance at beginning of year	$	37.9		$	41.5
Increases for prior year tax positions	2.9			0.2
Decreases for prior year tax positions	(0.4		)	—
Increases for current year tax positions	0.1			—
Settlement with taxing authorities	(0.3		)	—
Reductions due to statute of limitations	—			(3.0		)
Balance at end of period	$	40.2		$	38.7

Tax Returns Subject to Examination

 For our primary tax jurisdictions, the tax years that remain subject to examination are as follows:

	Tax Years
U.S. federal income tax	2007 – 2011
U.S. state income tax	2004 – 2011
Canadian federal income tax	2007 – 2011
Canadian provincial income tax	2007 – 2011

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FAIR VALUE MEASUREMENTS

9 Months Ended

Sep. 30, 2012

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

Fair value is defined as the price at which an asset could be exchanged in a current transaction between knowledgeable, willing parties or the amount that would be paid to transfer a liability to a new obligor, not the amount that would be paid to settle the liability with the creditor.  Where available, fair value is based on observable market prices or parameters or derived from such prices or parameters.  Where observable prices or inputs are not available, valuation models are applied.  These valuation techniques involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the instruments or market and the instruments’ complexity.

Assets and liabilities recorded at fair value in the condensed balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair value.  Hierarchical levels, defined by ASC 820 “Fair Value Measurements and Disclosures” (ASC 820) are directly related to the amount of subjectivity associated with the inputs to fair valuation of these assets and liabilities, and are as follows:

Level 1 — Inputs were unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

Level 2 — Inputs (other than quoted prices included in Level 1) were either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.

Level 3 — Inputs reflected management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date.  Consideration was given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.

We are required to separately disclose assets and liabilities measured at fair value on a recurring basis, from those measured at fair value on a nonrecurring basis.  Nonfinancial assets measured at fair value on a nonrecurring basis are intangible assets and goodwill, which are reviewed annually in the fourth quarter and/or when circumstances or other events indicate that impairment may have occurred.

Determining which hierarchical level an asset or liability falls within requires significant judgment.  We evaluate our hierarchy disclosures each quarter.  The following table summarizes the assets and liabilities measured at fair value in the condensed balance sheets:

	Fair Value Measurements
Balance at September 30, 2012	Level 1		Level 2		Level 3		Total
Assets	($ in millions)
Interest rate swaps	$	—	$	8.9	$	—	$	8.9
Commodity forward contracts	3.2		5.7		—		8.9
Liabilities
Interest rate swaps	$	—	$	10.9	$	—	$	10.9
Earn out	—		—		37.6		37.6
Balance at December 31, 2011
Assets
Interest rate swaps	$	—	$	13.8	$	—	$	13.8
Liabilities
Interest rate swaps	$	—	$	13.7	$	—	$	13.7
Commodity forward contracts	2.5		7.7		—		10.2
Earn out	—		—		49.0		49.0
Balance at September 30, 2011
Assets
Interest rate swaps	$	—	$	15.1	$	—	$	15.1
Liabilities
Interest rate swaps	$	—	$	15.1	$	—	$	15.1
Commodity forward contracts	4.8		9.9		—		14.7
Earn out	—		—		44.9		44.9

For the nine months ended September 30, 2012, there were no transfers into or out of Level 1 and Level 2.

The following table summarizes the activity for our earn out liability measured at fair value using Level 3 inputs:

	September 30,
	2012			2011
	($ in millions)
Balance at beginning of year	$	49.0		$	—
(Settlements) purchases	(18.5		)	42.3
Unrealized losses included in other (expense) income	7.1			2.6
Balance at end of period	$	37.6		$	44.9

Interest Rate Swaps

The fair value of the interest rate swaps was included in other current assets, other assets, current installments of long-term debt, accrued liabilities, long-term debt and other liabilities as of September 30, 2012, December 31, 2011 and September 30, 2011.  These financial instruments were valued using the “income approach” valuation technique.  This method used valuation techniques to convert future amounts to a single present amount.  The measurement was based on the value indicated by current market expectations about those future amounts.  We use interest rate swaps as a means of managing interest expense and floating interest rate exposure to optimal levels.

Commodity Forward Contracts

The fair value of the commodity forward contracts was classified in other current assets and accrued liabilities as of September 30, 2012, December 31, 2011 and September 30, 2011, with unrealized gains and losses included in accumulated other comprehensive loss, net of applicable taxes.  These financial instruments were valued primarily based on prices and other relevant information observable in market transactions involving identical or comparable assets or liabilities including both forward and spot prices for commodities.  We use commodity forward contracts for certain raw materials and energy costs such as copper, zinc, lead, electricity and natural gas to provide a measure of stability in managing our exposure to price fluctuations.

Foreign Currency Contracts

We had no fair value of foreign currency contracts as of September 30, 2012, December 31, 2011 and September 30, 2011.  The gains and losses of foreign currency contracts were included in selling and administration expense as these financial instruments do not meet the criteria to qualify for hedge accounting.  These financial instruments were valued primarily based on prices and other relevant information observable in market transactions involving identical or comparable assets or liabilities including both forward and spot prices for foreign currencies.  We enter into forward sales and purchase contracts to manage currency risk resulting from purchase and sale commitments denominated in foreign currencies (principally Canadian dollar and Australian dollar).

Financial Instruments

The carrying values of cash and cash equivalents, restricted cash, accounts receivable and accounts payable approximated fair values due to the short-term maturities of these instruments.  The fair value of our long-term debt was determined based on current market rates for debt of similar risk and maturities.  The following table summarizes the fair value measurements of debt and the actual debt recorded on our condensed balance sheets:

	Fair Value Measurements
	Level 1		Level 2		Level 3		Total		Amount recorded on balance sheets
	($ in millions)
Balance at September 30, 2012	$	—	$	617.8	$	153.0	$	770.8	$	726.7
Balance at December 31, 2011	—		391.4		160.9		552.3		536.4
Balance at September 30, 2011	—		486.2		124.7		610.9		589.6

Earn Out

The fair value of the earn out associated with the SunBelt acquisition was estimated using a probability-weighted discounted cash flow model.  This fair value measurement is based on significant inputs not observed in the market.  Key assumptions in determining the fair value of the earn out include the discount rate and cash flow projections for the years ended December 31, 2012 and 2013.

For the nine months ended September 30, 2012, we paid $18.5 million for the earn out related to the 2011 SunBelt performance.  The 2011 earn out payment included $15.3 million that was recognized as part of the original purchase price.  The $15.3 million is included as a financing activity in the statement of cash flows.

Nonrecurring Fair Value Measurements

In addition to assets and liabilities that are recorded at fair value on a recurring basis, we record assets and liabilities at fair value on a nonrecurring basis as required by ASC 820.  There were no assets measured at fair value on a nonrecurring basis as of September 30, 2012, December 31, 2011 and September 30, 2011.  At February 28, 2011, $180.6 million of assets were measured at fair value on a nonrecurring basis.  We recognized a gain of $181.4 million for the nine months ended September 30, 2011 on our previously held investment in SunBelt, which had been accounted for under the equity method of accounting prior to the acquisition.  We remeasured our equity interest in SunBelt of $(0.8) million based on our purchase of PolyOne’s 50% interest in SunBelt.  We used Level 1 inputs for the cash payments and Level 3 inputs for the estimated earn out.

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FAIR VALUE MEASUREMENTS (Details 3) (USD $) In Millions, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2011
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Long-term Debt, Fair Value	$ 770.8	$ 552.3	$ 610.9
Notes Payable	726.7	536.4	589.6
Fair Value, Inputs, Level 1 [Member]
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Long-term Debt, Fair Value	0	0	0
Fair Value, Inputs, Level 2 [Member]
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Long-term Debt, Fair Value	617.8	391.4	486.2
Fair Value, Inputs, Level 3 [Member]
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Long-term Debt, Fair Value	$ 153.0	$ 160.9	$ 124.7

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Condensed Statements of Shareholders' Equity Parenthetical (USD $)	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Statement of Stockholders' Equity [Abstract]
Common stock, per share	$ 0.60	$ 0.60

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Condensed Balance Sheets Parenthetical (USD $) In Millions, except Per Share data, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2011
ASSETS
Accumulated depreciation	$ 1,206.0	$ 1,144.0	$ 1,122.1
Shareholders' equity:
Common stock, par value	$ 1.00	$ 1.00	$ 1.00
Common stock, authorized	120.0	120.0	120.0
Common stock, issued	80.2	80.1	80.2
Common stock, outstanding	80.2	80.1	80.2

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COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2012

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

We, and our subsidiaries, are defendants in various legal actions (including proceedings based on alleged exposures to asbestos) incidental to our past and current business activities.  As of September 30, 2012, December 31, 2011 and September 30, 2011, our condensed balance sheets included liabilities for these legal actions of $15.8 million, $16.4 million and $16.1 million, respectively.  These liabilities do not include costs associated with legal representation.  Based on our analysis, and considering the inherent uncertainties associated with litigation, we do not believe that it is reasonably possible that these legal actions will materially adversely affect our financial position or results of operations in the near term.

During the ordinary course of our business, contingencies arise resulting from an existing condition, situation, or set of circumstances involving an uncertainty as to the realization of a possible gain contingency.  In certain instances such as environmental projects, we are responsible for managing the cleanup and remediation of an environmental site.  There exists the possibility of recovering a portion of these costs from other parties.  We account for gain contingencies in accordance with the provisions of Accounting Standards Codification (ASC) 450 “Contingencies” (ASC 450) and therefore do not record gain contingencies and recognize income until it is earned and realizable.

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Document And Entity Information (USD $)	9 Months Ended
	Sep. 30, 2012	Jun. 30, 2012
Entity Registrant Name	Olin Corporation
Entity Central Index Key	0000074303
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float		$ 1,658,588,540
Entity Common Stock, Shares Outstanding	80,150,713
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q3
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2012

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SHAREHOLDERS' EQUITY

9 Months Ended

Sep. 30, 2012

Stockholders' Equity Note [Abstract]

SHAREHOLDERS' EQUITY

SHAREHOLDERS’ EQUITY

On July 21, 2011, our board of directors authorized a share repurchase program of up to 5 million shares of common stock that will terminate in three years for any of the remaining shares not yet repurchased.  For the nine months ended September 30, 2012 and 2011, 0.2 million and 0.1 million shares were purchased and retired under this program at a cost of $3.1 million and $2.2 million, respectively.  As of September 30, 2012, we had purchased a total of 0.4 million shares under this program and 4.6 million shares remained authorized to be purchased.

We issued 0.1 million and 0.5 million shares representing stock options exercised for the nine months ended September 30, 2012 and 2011, respectively, with a total value of $1.4 million and $9.3 million, respectively.

The following table represents the activity included in accumulated other comprehensive loss:

	Foreign Currency Translation Adjustment			Unrealized Gains (Losses) on Derivative Contracts (net of taxes)			Pension and Postretirement Benefits (net of taxes)			Accumulated Other Comprehensive Loss
	($ in millions)
Balance at January 1, 2011	$	0.4		$	11.6		$	(273.8	)	$	(261.8	)
Unrealized gains (losses):
First quarter	1.3			0.4			—			1.7
Second quarter	1.0			(0.2		)	—			0.8
Third quarter	—			(13.2		)	—			(13.2		)
Reclassification adjustments into income:
First quarter	—			(3.5		)	2.8			(0.7		)
Second quarter	—			(2.9		)	3.3			0.4
Third quarter	—			(0.8		)	3.0			2.2
Balance at September 30, 2011	$	2.7		$	(8.6	)	$	(264.7	)	$	(270.6	)
Balance at January 1, 2012	$	1.8		$	(5.3	)	$	(290.7	)	$	(294.2	)
Unrealized gains (losses):
First quarter	0.3			2.6			—			2.9
Second quarter	(0.8		)	(4.1		)	—			(4.9		)
Third quarter	0.8			7.8			—			8.6
Reclassification adjustments into income:
First quarter	—			1.7			3.2			4.9
Second quarter	—			1.1			4.3			5.4
Third quarter	—			1.4			3.3			4.7
Balance at September 30, 2012	$	2.1		$	5.2		$	(279.9	)	$	(272.6	)

Pension and postretirement benefits (net of taxes) activity in other comprehensive loss included the amortization of prior service costs and actuarial losses.

Unrealized gains and losses on derivative contracts (net of taxes) activity in other comprehensive loss included deferred tax provisions (benefit) of $5.8 million and $(8.9) million for the three months ended September 30, 2012 and 2011, respectively, and $6.7 million and $(12.9) million for the nine months ended September 30, 2012 and 2011, respectively.  Pension and postretirement benefits (net of taxes) activity in other comprehensive loss included deferred tax provisions of $2.2 million and $1.9 million for the three months ended September 30, 2012 and 2011, respectively, and $6.8 million and $5.9 million for the nine months ended September 30, 2012 and 2011, respectively.

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Condensed Statements of Income (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Income Statement [Abstract]
Sales	$ 581.2	$ 550.2	$ 1,597.1	$ 1,515.3
Operating expenses:
Cost of goods sold	475.8	432.7	1,260.1	1,205.6
Selling and administration	42.4	39.8	131.2	121.0
Restructuring charges	2.3	4.1	6.0	6.6
Acquisition costs	8.3	0	8.3	0.8
Other operating income	1.1	4.3	1.5	5.9
Operating income	53.5	77.9	193.0	187.2
Earnings of non-consolidated affiliates	1.2	0.8	2.0	8.5
Interest expense	6.0	7.9	18.3	22.5
Interest income	0.2	0.2	0.7	0.7
Other (expense) income	(2.2)	(1.6)	(6.9)	179.0
Income before taxes	46.7	69.4	170.5	352.9
Income tax provision	18.0	22.2	55.5	129.9
Net income	$ 28.7	$ 47.2	$ 115.0	$ 223.0
Net income per common share:
Basic	$ 0.36	$ 0.59	$ 1.44	$ 2.79
Diluted	$ 0.35	$ 0.58	$ 1.42	$ 2.76
Dividends per common share	$ 0.20	$ 0.20	$ 0.60	$ 0.60
Average common shares outstanding:
Basic	80.1	80.2	80.1	79.9
Diluted	81.0	80.8	80.9	80.8

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ALLOWANCE FOR DOUBTFUL ACCOUNTS RECEIVABLES

9 Months Ended

Sep. 30, 2012

Accounts Receivable, Net [Abstract]

ALLOWANCE FOR DOUBTFUL ACCOUNTS RECEIVABLES

ALLOWANCE FOR DOUBTFUL ACCOUNTS RECEIVABLES

We evaluate the collectibility of accounts receivable based on a combination of factors.  We estimate an allowance for doubtful accounts as a percentage of net sales based on historical bad debt experience.  This estimate is periodically adjusted when we become aware of a specific customer's inability to meet its financial obligations (e.g., bankruptcy filing) or as a result of changes in the overall aging of accounts receivable.  While we have a large number of customers that operate in diverse businesses and are geographically dispersed, a general economic downturn in any of the industry segments in which we operate could result in higher than expected defaults, and, therefore, the need to revise estimates for the provision for doubtful accounts could occur.

Allowance for doubtful accounts receivable consisted of the following:

	September 30,
	2012			2011
	($ in millions)
Balance at beginning of year	$	3.2		$	4.8
Provisions charged	0.6			0.8
(Write-offs) recoveries, net	(0.1		)	(1.7		)
Balance at end of period	$	3.7		$	3.9

Provisions (credited) charged to operations were $(0.4) million and $0.6 million for the three months ended September 30, 2012 and 2011, respectively.

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RESTRUCTURING CHARGE

9 Months Ended

Sep. 30, 2012

Restructuring and Related Activities [Abstract]

RESTRUCTURING CHARGE

RESTRUCTURING CHARGES

On December 9, 2010, our board of directors approved a plan to eliminate our use of mercury in the manufacture of chlor alkali products.  Under the plan, the 260,000 tons of mercury cell capacity at our Charleston, TN facility will be converted to 200,000 tons of membrane capacity capable of producing both potassium hydroxide and caustic soda.  The project has an estimated capital cost of approximately $165 million.  The board of directors also approved plans to reconfigure our Augusta, GA facility to manufacture bleach and distribute caustic soda, while discontinuing chlor alkali manufacturing at this site.  We based our decision to convert and reconfigure on several factors.  First, during 2009 and 2010 we had experienced a steady increase in the number of customers unwilling to accept our products manufactured using mercury cell technology.  Second, there was federal legislation passed in 2008 governing the treatment of mercury that significantly limits our recycling options after December 31, 2012.  We concluded that exiting mercury cell technology production after 2012 represented an unacceptable future cost risk.  Further, the conversion of the Charleston, TN plant to membrane technology will reduce the electricity usage per ECU produced by approximately 25%.  The decision to reconfigure the Augusta, GA facility to manufacture bleach and distribute caustic soda removes the highest cost production capacity from our system.  Mercury cell chlor alkali production at the Augusta, GA facility was discontinued at the end of September, 2012 and the first of the two new membrane cell rooms at Charleston, TN was successfully started up in the third quarter of 2012.The reconfiguration at Charleston, TN will be completed in the fourth quarter of 2012 with the expected startup of the second membrane cell room. These actions reduced our Chlor Alkali capacity by 160,000 tons. For the three months ended September 30, 2012 and 2011, we recorded pretax restructuring charges of $0.5 million and $2.0 million, respectively, for employee severance and related benefit costs and facility exit costs.  For the nine months ended September 30, 2012 and 2011, we recorded pretax restructuring charges of $1.0 million and $2.3 million, respectively, for employee severance and related benefit costs and facility exit costs.  We expect to incur additional restructuring charges through 2013 of approximately $7 million related to the implementation of plans to exit the use of mercury cell technology in the chlor alkali manufacturing process.

On November 3, 2010, we announced that we made the decision to relocate the Winchester centerfire ammunition manufacturing operations from East Alton, IL to Oxford, MS.  This relocation, when completed, is forecast to reduce Winchester’s annual operating costs by approximately $30 million.  Consistent with this decision we have initiated an estimated $110 million five-year project, which includes approximately $80 million of capital spending.  The State of Mississippi and local governments have provided incentives which should offset approximately 40 percent of the capital spending.  We currently expect to complete this relocation by the end of 2015.  For the three and nine months ended September 30, 2012, we recorded pretax restructuring charges of $1.8 million and $5.0 million, respectively, for employee severance and related benefit costs, employee relocation costs and facility exit costs.  For the three and nine months ended September 30, 2011 we recorded pretax restructuring charges of $2.1 million and $4.3 million, respectively, for employee severance and related benefit costs, employee relocation costs and facility exit costs. Additionally, for the nine months ended September 30, 2011 a portion of the charge related to a non-cash pension curtailment. These 2011 restructuring charges related primarily to the ratification of a new five and one half year Winchester, East Alton, IL union labor agreement.  We expect to incur additional restructuring charges through 2016 of approximately $11 million related to the transfer of these operations.

The following table summarizes the activity by major component of these 2010 restructuring actions and the remaining balances of accrued restructuring costs as of September 30, 2012:

		Employee severance and job related benefits			Pension and other postretirement benefits curtailment			Lease and other contract termination costs			Employee relocation costs			Facility exit costs			Total
		($ in millions)
Balance at January 1, 2011		$	6.0		$	—		$	1.0		$	—		$	—		$	7.0
	Restructuring charges:
	First quarter	0.1			—			—			—			—			0.1
	Second quarter	0.9			1.1			—			0.3			0.1			2.4
	Third quarter	2.7			—			—			1.0			0.4			4.1
	Amounts utilized	(0.2		)	(1.1		)	(0.2		)	(1.3		)	(0.5		)	(3.3		)
Balance at September 30, 2011		$	9.5		$	—		$	0.8		$	—		$	—		$	10.3
Balance at January 1, 2012		$	11.3		$	—		$	0.8		$	—		$	—		$	12.1
	Restructuring charges:
	First quarter	0.9			—			—			0.8			0.2			1.9
	Second quarter	1.0			—			—			0.7			0.1			1.8
	Third quarter	1.3			—			—			0.5			0.5			2.3
	Amounts utilized	(1.5		)	—			(0.2		)	(2.0		)	(0.8		)	(4.5		)
Balance at September 30, 2012		$	13.0		$	—		$	0.6		$	—		$	—		$	13.6

The following table summarizes the cumulative restructuring charges of these 2010 restructuring actions by major component through September 30, 2012:

	Chlor Alkali Products		Winchester		Total
	($ in millions)
Write-off of equipment and facility	$	17.5	$	—	$	17.5
Employee severance and job related benefits	5.5		10.1		15.6
Facility exit costs	7.7		0.8		8.5
Pension and other postretirement benefits curtailment	—		4.1		4.1
Employee relocation costs	0.1		4.1		4.2
Lease and other contract termination costs	1.0		—		1.0
Total cumulative restructuring charges	$	31.8	$	19.1	$	50.9

As of September 30, 2012, we have incurred cash expenditures of $9.0 million and non-cash charges of $28.3 million related to these restructuring actions.  The remaining balance of $13.6 million is expected to be paid out in 2012 through 2016.

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DERIVATIVE FINANCIAL INSTRUMENTS

9 Months Ended

Sep. 30, 2012

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE FINANCIAL INSTRUMENTS

DERIVATIVE FINANCIAL INSTRUMENTS

We are exposed to market risk in the normal course of our business operations due to our purchases of certain commodities, our ongoing investing and financing activities and our operations that use foreign currencies.  The risk of loss can be assessed from the perspective of adverse changes in fair values, cash flows and future earnings.  We have established policies and procedures governing our management of market risks and the use of financial instruments to manage exposure to such risks.  ASC 815 “Derivatives and Hedging” (ASC 815) requires an entity to recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value.  We use hedge accounting treatment for substantially all of our business transactions whose risks are covered using derivative instruments.  In accordance with ASC 815, we designate commodity forward contracts as cash flow hedges of forecasted purchases of commodities and certain interest rate swaps as fair value hedges of fixed-rate borrowings.  We do not enter into any derivative instruments for trading or speculative purposes.

Energy costs, including electricity used in our Chlor Alkali Products and Chemical Distribution segments, and certain raw materials and energy costs, namely copper, lead, zinc, electricity and natural gas used in our Winchester segment, are subject to price volatility.  Depending on market conditions, we may enter into futures contracts and put and call option contracts in order to reduce the impact of commodity price fluctuations.  The majority of our commodity derivatives expire within one year.  Those commodity contracts that extend beyond one year correspond with raw material purchases for long-term fixed-price sales contracts.

We enter into forward sales and purchase contracts to manage currency risk resulting from purchase and sale commitments denominated in foreign currencies (principally Canadian dollar and Australian dollar).  All of the currency derivatives expire within one year and are for United States dollar equivalents.  Our foreign currency forward contracts do not meet the criteria to qualify for hedge accounting.  At September 30, 2012, December 31, 2011 and September 30, 2011, we had forward contracts to sell foreign currencies with a notional value of $8.3 million, zero and zero, respectively.  We had no forward contracts to buy foreign currencies at September 30, 2012, December 31, 2011 and September 30, 2011.

In March 2010, we entered into interest rate swaps on $125 million of our underlying fixed-rate debt obligations, whereby we agreed to pay variable rates to a counterparty who, in turn, pays us fixed rates.  The counterparty to these agreements is Citibank, N.A. (Citibank), a major financial institution.  In October 2011, we entered into $125 million of interest rate swaps with equal and opposite terms as the $125 million variable interest rate swaps on the 6.75% senior notes due 2016 (2016 Notes).  We have agreed to pay a fixed rate to a counterparty who, in turn, pays us variable rates.  The counterparty to this agreement is also Citibank.  The result was a gain of $11.0 million on the $125 million variable interest rate swaps, which will be recognized through 2016.  As of September 30, 2012, $8.9 million of this gain was included in long-term debt.  In October 2011, we de-designated our $125 million interest rate swaps that had previously been designated as fair value hedges.  The $125 million variable interest rate swaps and the $125 million fixed interest rate swaps do not meet the criteria for hedge accounting.  All changes in the fair value of these interest rate swaps are recorded currently in earnings.

In 2001 and 2002, we entered into interest rate swaps on $75 million of our underlying fixed-rate debt obligations, whereby we agreed to pay variable rates to a counterparty who, in turn, paid us fixed rates.  The counterparty to these agreements was Citibank.  In January 2009, we entered into a $75 million fixed interest rate swap with equal and opposite terms as the $75 million variable interest rate swaps on the 9.125% senior notes due 2011 (2011 Notes).  We agreed to pay a fixed rate to a counterparty who, in turn, paid us variable rates.  The counterparty to this agreement was Bank of America, N.A. (Bank of America), a major financial institution.  The result was a gain of $7.9 million on the $75 million variable interest rate swaps, which was recognized through 2011.  In January 2009, we de-designated our $75 million interest rate swaps that had previously been designated as fair value hedges.  The $75 million variable interest rate swaps and the $75 million fixed interest rate swap did not meet the criteria for hedge accounting.  All changes in the fair value of these interest rate swaps were recorded currently in earnings.

Cash flow hedges

ASC 815 requires that all derivative instruments be recorded on the balance sheet at their fair value.  For derivative instruments that are designated and qualify as a cash flow hedge, the change in fair value of the derivative is recognized as a component of other comprehensive loss until the hedged item is recognized in earnings.  Gains and losses on the derivatives representing hedge ineffectiveness are recognized currently in earnings.

We had the following notional amount of outstanding commodity forward contracts that were entered into to hedge forecasted purchases:

	September 30, 2012		December 31, 2011		September 30, 2011
	($ in millions)
Copper	$	59.8	$	52.1	$	54.3
Zinc	5.9		7.3		7.7
Lead	49.6		37.9		36.1
Natural gas	8.6		8.3		5.7

As of September 30, 2012, the counterparty to $85.6 million of these commodity forward contracts was Wells Fargo Bank, N.A. (Wells Fargo), a major financial institution.

We use cash flow hedges for certain raw material and energy costs such as copper, zinc, lead, electricity and natural gas to provide a measure of stability in managing our exposure to price fluctuations associated with forecasted purchases of raw materials and energy used in the company's manufacturing process.  At September 30, 2012, we had open positions in futures contracts through 2017.  If all open futures contracts had been settled on September 30, 2012, we would have recognized a pretax gain of $8.4 million.

If commodity prices were to remain at September 30, 2012 levels, approximately $5.9 million of deferred gains would be reclassified into earnings during the next twelve months.  The actual effect on earnings will be dependent on actual commodity prices when the forecasted transactions occur.

Fair value hedges

For derivative instruments that are designated and qualify as a fair value hedge, the gain or loss on the derivative as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in current earnings.  We include the gain or loss on the hedged items (fixed-rate borrowings) in the same line item, interest expense, as the offsetting loss or gain on the related interest rate swaps.  As of September 30, 2012, December 31, 2011 and September 30, 2011, the total notional amounts of our interest rate swaps designated as fair value hedges were zero, $80.8 million and $218.0 million, respectively.

In June 2012, we terminated $73.1 million of interest rate swaps with Wells Fargo that had been entered into on the SunBelt Notes in May 2011. The result was a gain of $2.2 million, which will be recognized through 2017. As of September 30, 2012, $2.0 million of this gain was included in long-term debt. In March 2012, Citibank terminated $7.7 million of interest rate swaps on our industrial development and environmental improvement tax-exempt bonds (industrial revenue bonds) due in 2017.  The result was a gain of $0.2 million, which would have been recognized through 2017. In June 2012, the industrial revenue bonds were redeemed by us, and as a result, the remaining $0.2 million deferred gain was recognized in interest expense during the three months ended June 30, 2012.

We use interest rate swaps as a means of managing interest expense and floating interest rate exposure to optimal levels.  These interest rate swaps are treated as fair value hedges.  The accounting for gains and losses associated with changes in fair value of the derivative and the effect on the condensed financial statements will depend on the hedge designation and whether the hedge is effective in offsetting changes in fair value of cash flows of the asset or liability being hedged.  

Financial statement impacts

We present our derivative assets and liabilities in our condensed balance sheets on a net basis.  We net derivative assets and liabilities whenever we have a legally enforceable master netting agreement with the counterparty to our derivative contracts.  We use these agreements to manage and substantially reduce our potential counterparty credit risk.

The following table summarizes the location and fair value of the derivative instruments on our condensed balance sheets.  The table disaggregates our net derivative assets and liabilities into gross components on a contract-by-contract basis before giving effect to master netting arrangements:

	Asset Derivatives								Liability Derivatives
		Fair Value								Fair Value
Derivatives Designated as Hedging Instruments	Balance Sheet Location	September 30, 2012			December 31, 2011		September 30, 2011		Balance Sheet Location	September 30, 2012		December 31, 2011			September 30, 2011
		($ in millions)								($ in millions)
Interest rate contracts	Other current assets	$	—		$	—	$	—	Current installments of long-term debt	$	—	$	—		$	0.6
Interest rate contracts	Other assets	—			2.2		14.3		Long-term debt	10.9		12.7			14.0
Interest rate contracts	Other assets	—			—		—		Other liabilities	—		—			0.2
Commodity contracts – gains	Other current assets	10.4			—		—		Accrued liabilities	—		(2.5		)	(2.3		)
Commodity contracts – losses	Other current assets	(2.0		)	—		—		Accrued liabilities	—		11.2			16.6
		$	8.4		$	2.2	$	14.3		$	10.9	$	21.4		$	29.1
Derivatives Not Designated as Hedging Instruments
Interest rate contracts	Other current assets	$	—		$	—	$	0.8	Accrued liabilities	$	—	$	—		$	0.3
Interest rate contracts – gains	Other assets	12.9			11.6		—		Other liabilities	—		—			—
Interest rate contracts – losses	Other assets	(4.0		)	—		—		Other liabilities	—		1.0			—
Commodity contracts – gains	Other current assets	0.7			—		—		Accrued liabilities	—		—			—
Commodity contracts – losses	Other current assets	(0.2		)	—		—		Accrued liabilities	—		1.5			0.4
		$	9.4		$	11.6	$	0.8		$	—	$	2.5		$	0.7
Total derivatives(1)		$	17.8		$	13.8	$	15.1		$	10.9	$	23.9		$	29.8

(1) Does not include the impact of cash collateral received from or provided to counterparties.

The following table summarizes the effects of derivative instruments on our condensed statements of income:

		Amount of Gain (Loss)						Amount of Gain (Loss)
		Three Months Ended September 30,						Nine Months Ended September 30,
	Location of Gain (Loss)	2012			2011			2012			2011
Derivatives – Cash Flow Hedges		($ in millions)
Recognized in other comprehensive loss (effective portion)	———	$	12.7		$	(21.7	)	$	10.3		$	(21.3	)
Reclassified from accumulated other comprehensive loss into income (effective portion)	Cost of goods sold	$	(2.3	)	$	1.2		$	(6.9	)	$	11.8
Derivatives – Fair Value Hedges
Interest rate contracts	Interest expense	$	0.7		$	1.8		$	2.6		$	5.8
Derivatives Not Designated as Hedging Instruments
Interest rate contracts	Interest expense	$	0.1		$	(0.1	)	$	0.1		$	—
Commodity contracts	Cost of goods sold	0.7			(0.4		)	(1.7		)	(0.8		)
		$	0.8		$	(0.5	)	$	(1.6	)	$	(0.8	)

Credit risk and collateral

By using derivative instruments, we are exposed to credit and market risk.  If a counterparty fails to fulfill its performance obligations under a derivative contract, our credit risk will equal the fair-value gain in a derivative.  Generally, when the fair value of a derivative contract is positive, this indicates that the counterparty owes us, thus creating a repayment risk for us.  When the fair value of a derivative contract is negative, we owe the counterparty and, therefore, assume no repayment risk.  We minimize the credit (or repayment) risk in derivative instruments by entering into transactions with high-quality counterparties.  We monitor our positions and the credit ratings of our counterparties and we do not anticipate non-performance by the counterparties.

Based on the agreements with our various counterparties, cash collateral is required to be provided when the net fair value of the derivatives, with the counterparty, exceed a specific threshold.  If the threshold is exceeded, cash is either provided by the counterparty to us if the value of the derivatives is our asset, or cash is provided by us to the counterparty if the value of the derivatives is our liability.  As of September 30, 2012, December 31, 2011 and September 30, 2011, the amounts recognized in accrued liabilities for cash collateral provided by us to counterparties were zero, $3.9 million and $7.0 million, respectively.  In all instances where we are party to a master netting agreement, we offset the receivable or payable recognized upon payment of cash collateral against the fair value amounts recognized for derivative instruments that have also been offset under such master netting agreements.

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SEGMENT INFORMATION

9 Months Ended

Sep. 30, 2012

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION

We define segment results as income before interest expense, interest income, other operating income, other (expense) income and income taxes, and include the operating results of non-consolidated affiliates. Intersegment sales of $4.8 million for the three and nine months ended September 30, 2012, representing the sale of caustic soda, bleach, and hydrochloric acid to Chemical Distribution from Chlor Alkali Products, at prices that approximate market, have been eliminated from Chlor Alkali Products segment sales.

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Sales:	($ in millions)
Chlor Alkali Products	$	364.8		$	386.1		$	1,087.7		$	1,065.8
Chemical Distribution	47.6			—			47.6			—
Winchester	168.8			164.1			461.8			449.5
Total sales	$	581.2		$	550.2		$	1,597.1		$	1,515.3
Income before taxes:
Chlor Alkali Products	$	59.5		$	76.7		$	208.9		$	194.7
Chemical Distribution	1.9			—			1.9			—
Winchester	16.0			13.1			38.7			37.4
Corporate/other:
Pension income	7.2			6.9			20.5			20.8
Environmental expense	(3.6		)	(2.5		)	(6.7		)	(2.9		)
Other corporate and unallocated costs	(16.8		)	(15.7		)	(55.5		)	(52.8		)
Restructuring charges	(2.3		)	(4.1		)	(6.0		)	(6.6		)
Acquisition costs	(8.3		)	—			(8.3		)	(0.8		)
Other operating income	1.1			4.3			1.5			5.9
Interest expense	(6.0		)	(7.9		)	(18.3		)	(22.5		)
Interest income	0.2			0.2			0.7			0.7
Other (expense) income	(2.2		)	(1.6		)	(6.9		)	179.0
Income before taxes	$	46.7		$	69.4		$	170.5		$	352.9

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EARNINGS PER SHARE

9 Months Ended

Sep. 30, 2012

Earnings Per Share [Abstract]

EARNINGS PER SHARE

EARNINGS PER SHARE

Basic and diluted net income per share are computed by dividing net income by the weighted average number of common shares outstanding.  Diluted net income per share reflects the dilutive effect of stock-based compensation.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
Computation of Income per Share	($ and shares in millions, except per share data)
Net income	$	28.7	$	47.2	$	115.0	$	223.0
Basic shares	80.1		80.2		80.1		79.9
Basic net income per share	$	0.36	$	0.59	$	1.44	$	2.79
Diluted shares:
Basic shares	80.1		80.2		80.1		79.9
Stock-based compensation	0.9		0.6		0.8		0.9
Diluted shares	81.0		80.8		80.9		80.8
Diluted net income per share	$	0.35	$	0.58	$	1.42	$	2.76

The computation of dilutive shares from stock-based compensation does not include 1.0 million shares and 1.7 million shares for the three months ended September 30, 2012 and 2011, respectively, and 1.0 million shares and 0.9 million shares for the nine months ended September 30, 2012, and 2011, respectively, as their effect would have been anti-dilutive.

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INCOME TAXES (Details 2) (USD $) In Millions, unless otherwise specified	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011	Dec. 31, 2010
Reconciliation of Unrecognized Tax Benefits [Roll Forward]
Unrecognized Tax Benefits	$ 40.2	$ 38.7	$ 37.9	$ 41.5
Increases for prior year tax positions	2.9	0.2
Decreases for prior year tax positions	(0.4)	0
Increases for current year tax positions	0.1	0
Settlements with taxing authorities	(0.3)	0
Unrecognized Tax Benefits, Reductions Resulting from Lapse of Applicable Statute of Limitations	$ 0	$ (3.0)

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INVENTORIES

9 Months Ended

Sep. 30, 2012

Inventory Disclosure [Abstract]

INVENTORIES

INVENTORIES

Inventories consisted of the following:

	September 30, 2012			December 31, 2011			September 30, 2011
	($ in millions)
Supplies	$	35.6		$	35.0		$	32.8
Raw materials	73.1			75.7			69.8
Work in process	33.6			31.9			32.4
Finished goods	149.3			111.7			104.9
	291.6			254.3			239.9
LIFO reserve	(77.9		)	(77.7		)	(73.6		)
Inventories, net	$	213.7		$	176.6		$	166.3

In conjunction with the acquisition of KA Steel, we obtained inventories with a fair value of $35.8 million, as of August 22, 2012. In conjunction with the acquisition of SunBelt, we obtained inventories with a fair value of $4.0 million, as of February 28, 2011.  Inventories are valued at the lower of cost or market, with cost being determined principally by the dollar value last-in, first-out (LIFO) method of inventory accounting.  Cost for other inventories has been determined principally by the average cost method, primarily Chemical Distribution inventories, operating supplies, spare parts and maintenance parts.  Elements of costs in inventories included raw materials, direct labor and manufacturing overhead.  Inventories under the LIFO method are based on annual estimates of quantities and costs as of year-end; therefore, the condensed financial statements at September 30, 2012, reflect certain estimates relating to inventory quantities and costs at December 31, 2012.  If the first-in, first-out (FIFO) method of inventory accounting had been used, inventories would have been approximately $77.9 million, $77.7 million and $73.6 million higher than reported at September 30, 2012, December 31, 2011 and September 30, 2011, respectively.

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OTHER ASSETS

9 Months Ended

Sep. 30, 2012

Other Assets [Abstract]

Other Assets Disclosure [Text Block]

OTHER ASSETS

Included in other assets were the following:

	September 30, 2012		December 31, 2011		September 30, 2011
	($ in millions)
Investments in non-consolidated affiliates	$	29.1	$	27.6	$	27.3
Intangible assets (less accumulated amortization of $9.8 million, $6.9 million and $6.2 million, respectively)	156.4		19.2		19.6
Deferred debt issuance costs	18.0		14.2		14.7
Interest rate swaps	8.9		13.8		14.3
Other	11.2		10.8		10.9
Other assets	$	223.6	$	85.6	$	86.8

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ENVIRONMENTAL

9 Months Ended

Sep. 30, 2012

Environmental Remediation Obligations [Abstract]

ENVIRONMENTAL

ENVIRONMENTAL

We are party to various government and private environmental actions associated with past manufacturing facilities and former waste disposal sites.  Charges to income for investigatory and remedial efforts were material to operating results in 2012 and 2011.  The condensed balance sheets included reserves for future environmental expenditures to investigate and remediate known sites amounting to $150.5 million, $163.3 million and $164.6 million at September 30, 2012, December 31, 2011 and September 30, 2011, respectively, of which $119.5 million, $132.3 million and $136.6 million, respectively, were classified as other noncurrent liabilities.

Environmental provisions charged (credited) to income, which are included in cost of goods sold, were as follows:

	Three Months Ended September 30,					Nine Months Ended September 30,
	2012		2011			2012			2011
	($ in millions)
Charges to income	$	3.6	$	4.0		$	6.8		$	13.9
Recoveries from third parties of costs incurred and expensed in prior periods	—		(1.5		)	(0.1		)	(11.0		)
Total environmental expense	$	3.6	$	2.5		$	6.7		$	2.9

Environmental exposures are difficult to assess for numerous reasons, including the identification of new sites, developments at sites resulting from investigatory studies, advances in technology, changes in environmental laws and regulations and their application, changes in regulatory authorities, the scarcity of reliable data pertaining to identified sites, the difficulty in assessing the involvement and financial capability of other potentially responsible parties (PRPs), our ability to obtain contributions from other parties, and the lengthy time periods over which site remediation occurs.  It is possible that some of these matters (the outcomes of which are subject to various uncertainties) may be resolved unfavorably to us, which could materially adversely affect our financial position or results of operations.

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DERIVATIVE FINANCIAL INSTRUMENTS (Details 3) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Cash Flow Hedging [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Recognized in other comprehensive loss (effective portion)	$ 12.7	$ (21.7)	$ 10.3	$ (21.3)
Not Designated as Hedging Instrument [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of gain (loss)	0.8	(0.5)	(1.6)	(0.8)
Cost of Sales [Member] | Cash Flow Hedging [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Reclassified from accumulated other comprehensive loss into income (effective portion)	(2.3)	1.2	(6.9)	11.8
Interest Rate Contract [Member] | Interest Expense [Member] | Fair Value Hedging [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of gain (loss)	0.7	1.8	2.6	5.8
Interest Rate Contract [Member] | Interest Expense [Member] | Not Designated as Hedging Instrument [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of gain (loss)	0.1	(0.1)	0.1	0
Commodity Contracts [Member] | Cost of Sales [Member] | Not Designated as Hedging Instrument [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of gain (loss)	$ 0.7	$ (0.4)	$ (1.7)	$ (0.8)

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FAIR VALUE MEASUREMENTS (Details 1) (USD $) In Millions, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2011
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Interest rate swaps	$ 8.9	$ 13.8	$ 15.1
Commodity forward contracts	8.9
Interest rate swaps	10.9	13.7	15.1
Commodity forward contracts		10.2	14.7
Earn out	37.6	49.0	44.9
Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Interest rate swaps	8.9	13.8	15.1
Commodity forward contracts	5.7
Interest rate swaps	10.9	13.7	15.1
Commodity forward contracts		7.7	9.9
Earn out	0	0	0
Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Interest rate swaps	0	0	0
Commodity forward contracts	0
Interest rate swaps	0	0	0
Commodity forward contracts		0	0
Earn out	37.6	49.0	44.9
Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Interest rate swaps	0	0	0
Commodity forward contracts	3.2
Interest rate swaps	0	0	0
Commodity forward contracts		2.5	4.8
Earn out	$ 0	$ 0	$ 0

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DERIVATIVE FINANCIAL INSTRUMENTS (Details 2) (USD $) In Millions, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2011
Derivatives, Fair Value [Line Items]
Liability derivatives	$ 10.9	$ 23.9	$ 29.8
Asset derivatives	17.8	13.8	15.1
Designated as Hedging Instrument [Member]
Derivatives, Fair Value [Line Items]
Liability derivatives	10.9	21.4	29.1
Asset derivatives	8.4	2.2	14.3
Designated as Hedging Instrument [Member] | Interest Rate Contract [Member] | Other Assets [Member]
Derivatives, Fair Value [Line Items]
Asset derivatives	0	2.2	14.3
Designated as Hedging Instrument [Member] | Interest Rate Contract [Member] | Other Current Assets [Member]
Derivatives, Fair Value [Line Items]
Asset derivatives	0	0	0
Designated as Hedging Instrument [Member] | Interest Rate Contract Loss [Member] | Other Assets [Member]
Derivatives, Fair Value [Line Items]
Asset derivatives	0	0	0
Designated as Hedging Instrument [Member] | Interest Rate Contract Loss [Member] | Other Liabilities [Member]
Derivatives, Fair Value [Line Items]
Liability derivatives	0	0	0.2
Designated as Hedging Instrument [Member] | Interest Rate Contract Loss [Member] | Long-term Debt [Member]
Derivatives, Fair Value [Line Items]
Liability derivatives	10.9	12.7	14.0
Designated as Hedging Instrument [Member] | Interest Rate Contract Loss [Member] | Current Installments of Long-term Debt [Member]
Derivatives, Fair Value [Line Items]
Liability derivatives	0	0	0.6
Designated as Hedging Instrument [Member] | Commodity Contracts Gains [Member] | Accrued Liabilities [Member]
Derivatives, Fair Value [Line Items]
Liability derivatives	0	(2.5)	(2.3)
Designated as Hedging Instrument [Member] | Commodity Contracts Gains [Member] | Other Current Assets [Member]
Derivatives, Fair Value [Line Items]
Asset derivatives	10.4	0	0
Designated as Hedging Instrument [Member] | Commodity Contracts Losses [Member] | Accrued Liabilities [Member]
Derivatives, Fair Value [Line Items]
Liability derivatives	0	11.2	16.6
Designated as Hedging Instrument [Member] | Commodity Contracts Losses [Member] | Other Current Assets [Member]
Derivatives, Fair Value [Line Items]
Asset derivatives	(2.0)	0	0
Not Designated as Hedging Instrument [Member]
Derivatives, Fair Value [Line Items]
Liability derivatives	0	2.5	0.7
Asset derivatives	9.4	11.6	0.8
Not Designated as Hedging Instrument [Member] | Interest Rate Contract [Member] | Other Assets [Member]
Derivatives, Fair Value [Line Items]
Asset derivatives	12.9	11.6	0
Not Designated as Hedging Instrument [Member] | Interest Rate Contract [Member] | Other Liabilities [Member]
Derivatives, Fair Value [Line Items]
Liability derivatives	0	0	0
Not Designated as Hedging Instrument [Member] | Interest Rate Contract [Member] | Other Current Assets [Member]
Derivatives, Fair Value [Line Items]
Asset derivatives	0	0	0.8
Not Designated as Hedging Instrument [Member] | Interest Rate Contract Loss [Member] | Other Assets [Member]
Derivatives, Fair Value [Line Items]
Asset derivatives	(4.0)	0	0
Not Designated as Hedging Instrument [Member] | Interest Rate Contract Loss [Member] | Other Liabilities [Member]
Derivatives, Fair Value [Line Items]
Liability derivatives	0	1.0	0
Not Designated as Hedging Instrument [Member] | Interest Rate Contract Loss [Member] | Accrued Liabilities [Member]
Derivatives, Fair Value [Line Items]
Liability derivatives	0	0	0.3
Not Designated as Hedging Instrument [Member] | Commodity Contracts Gains [Member] | Accrued Liabilities [Member]
Derivatives, Fair Value [Line Items]
Liability derivatives	0	0	0
Not Designated as Hedging Instrument [Member] | Commodity Contracts Gains [Member] | Other Current Assets [Member]
Derivatives, Fair Value [Line Items]
Asset derivatives	0.7	0	0
Not Designated as Hedging Instrument [Member] | Commodity Contracts Losses [Member] | Accrued Liabilities [Member]
Derivatives, Fair Value [Line Items]
Liability derivatives	0	1.5	0.4
Not Designated as Hedging Instrument [Member] | Commodity Contracts Losses [Member] | Other Current Assets [Member]
Derivatives, Fair Value [Line Items]
Asset derivatives	$ (0.2)	$ 0	$ 0

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STOCK-BASED COMPENSATION (Tables)

9 Months Ended

Sep. 30, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-based compensation expense

Stock-based compensation expense (income) was as follows:

	Three Months Ended September 30,					Nine Months Ended September 30,
	2012		2011			2012		2011
	($ in millions)
Stock-based compensation	$	2.2	$	1.9		$	6.0	$	6.7
Mark-to-market adjustments	0.5		(2.0		)	1.0		(1.2		)
Total expense (income)	$	2.7	$	(0.1	)	$	7.0	$	5.5

Schedule of fair value of stock options granted

The fair value of each stock option granted, which typically vests ratably over three years, but not less than one year, was estimated on the date of grant, using the Black-Scholes option-pricing model with the following weighted-average assumptions:

Grant date	2012			2011
Dividend yield	3.65		%	4.32		%
Risk-free interest rate	1.36		%	3.05		%
Expected volatility	43		%	42		%
Expected life (years)	7.0			7.0
Grant fair value (per option)	$	6.55		$	5.48
Exercise price	$	21.92		$	18.78
Shares granted	480,250			575,000

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COMMITMENTS AND CONTINGENCIES (Details) (USD $) In Millions, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2011
Commitments and Contingencies Disclosure [Abstract]
Legal action liabilities	$ 15.8	$ 16.4	$ 16.1

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PENSION PLANS AND RETIREMENT BENEFITS

9 Months Ended

Sep. 30, 2012

Compensation and Retirement Disclosure [Abstract]

PENSION PLANS AND RETIREMENT BENEFITS

PENSION PLANS AND RETIREMENT BENEFITS

Most of our employees participate in defined contribution pension plans.  We provide a contribution to an individual retirement contribution account maintained with the Contributing Employee Ownership Plan (CEOP) primarily equal to 5% of the employee’s eligible compensation if such employee is less than age 45, and 7.5% of the employee’s eligible compensation if such employee is age 45 or older.  The defined contribution pension plans expense was $4.2 million and $3.5 million for the three months ended September 30, 2012 and 2011, respectively, and $12.3 million and $10.9 million for the nine months ended September 30, 2012 and 2011, respectively.

A portion of our bargaining hourly employees continue to participate in our domestic defined benefit pension plans under a flat-benefit formula.  Our funding policy for the defined benefit pension plans is consistent with the requirements of federal laws and regulations.  Our foreign subsidiaries maintain pension and other benefit plans, which are consistent with statutory practices.  Our defined benefit pension plan provides that if, within three years following a change of control of Olin, any corporate action is taken or filing made in contemplation of, among other things, a plan termination or merger or other transfer of assets or liabilities of the plan, and such termination, merger, or transfer thereafter takes place, plan benefits would automatically be increased for affected participants (and retired participants) to absorb any plan surplus (subject to applicable collective bargaining requirements).

We also provide certain postretirement health care (medical) and life insurance benefits for eligible active and retired domestic employees.  The health care plans are contributory with participants’ contributions adjusted annually based on medical rates of inflation and plan experience.

	Pension Benefits						Other Postretirement Benefits
	Three Months Ended September 30,						Three Months Ended September 30,
	2012			2011			2012		2011
Components of Net Periodic Benefit (Income) Cost	($ in millions)
Service cost	$	1.5		$	1.6		$	0.3	$	0.2
Interest cost	22.9			23.4			0.7		0.7
Expected return on plans’ assets	(34.9		)	(34.9		)	—		—
Amortization of prior service cost	0.1			0.1			—		—
Recognized actuarial loss	4.8			3.8			0.6		1.0
Net periodic benefit (income) cost	$	(5.6	)	$	(6.0	)	$	1.6	$	1.9

	Pension Benefits						Other Postretirement Benefits
	Nine Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Components of Net Periodic Benefit (Income) Cost	($ in millions)
Service cost	$	4.6		$	4.8		$	1.0		$	0.9
Interest cost	69.0			70.6			2.4			2.6
Expected return on plans’ assets	(104.7		)	(104.7		)	—			—
Amortization of prior service cost	0.2			0.3			(0.1		)	(0.1		)
Recognized actuarial loss	15.0			11.3			2.5			2.4
Curtailment	—			1.1			—			—
Net periodic benefit (income) cost	$	(15.9	)	$	(16.6	)	$	5.8		$	5.8

We made cash contributions to our Canadian qualified defined benefit pension plan of $0.6 million and $0.7 million for the nine months ended September 30, 2012 and 2011, respectively. In June 2011, we recorded a curtailment charge of $1.1 million related to the ratification of a new five and one half year Winchester, East Alton, IL union labor agreement. This curtailment charge was included in restructuring charges for the nine months ended September 30, 2011.

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RESTRUCTURING CHARGE (Tables)

9 Months Ended

Sep. 30, 2012

Restructuring and Related Activities [Abstract]

Schedule of Restructuring Reserve by Type of Cost [Table Text Block]

The following table summarizes the activity by major component of these 2010 restructuring actions and the remaining balances of accrued restructuring costs as of September 30, 2012:

		Employee severance and job related benefits			Pension and other postretirement benefits curtailment			Lease and other contract termination costs			Employee relocation costs			Facility exit costs			Total
		($ in millions)
Balance at January 1, 2011		$	6.0		$	—		$	1.0		$	—		$	—		$	7.0
	Restructuring charges:
	First quarter	0.1			—			—			—			—			0.1
	Second quarter	0.9			1.1			—			0.3			0.1			2.4
	Third quarter	2.7			—			—			1.0			0.4			4.1
	Amounts utilized	(0.2		)	(1.1		)	(0.2		)	(1.3		)	(0.5		)	(3.3		)
Balance at September 30, 2011		$	9.5		$	—		$	0.8		$	—		$	—		$	10.3
Balance at January 1, 2012		$	11.3		$	—		$	0.8		$	—		$	—		$	12.1
	Restructuring charges:
	First quarter	0.9			—			—			0.8			0.2			1.9
	Second quarter	1.0			—			—			0.7			0.1			1.8
	Third quarter	1.3			—			—			0.5			0.5			2.3
	Amounts utilized	(1.5		)	—			(0.2		)	(2.0		)	(0.8		)	(4.5		)
Balance at September 30, 2012		$	13.0		$	—		$	0.6		$	—		$	—		$	13.6

Schedule of Restructuring and Related Costs [Table Text Block]

The following table summarizes the cumulative restructuring charges of these 2010 restructuring actions by major component through September 30, 2012:

	Chlor Alkali Products		Winchester		Total
	($ in millions)
Write-off of equipment and facility	$	17.5	$	—	$	17.5
Employee severance and job related benefits	5.5		10.1		15.6
Facility exit costs	7.7		0.8		8.5
Pension and other postretirement benefits curtailment	—		4.1		4.1
Employee relocation costs	0.1		4.1		4.2
Lease and other contract termination costs	1.0		—		1.0
Total cumulative restructuring charges	$	31.8	$	19.1	$	50.9

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EARNINGS PER SHARE (Details) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Computation of Basic Income per Share [Abstract]
Net income	$ 28.7	$ 47.2	$ 115.0	$ 223.0
Basic shares (in shares)	80.1	80.2	80.1	79.9
Basic net income per share (in dollars per share)	$ 0.36	$ 0.59	$ 1.44	$ 2.79
Computation of Diluted Income per Share [Abstract]
Basic shares (in shares)	80.1	80.2	80.1	79.9
Stock-based compensation (in shares)	0.9	0.6	0.8	0.9
Diluted shares (in shares)	81.0	80.8	80.9	80.8
Diluted net income per share (in dollars per share)	$ 0.35	$ 0.58	$ 1.42	$ 2.76
Antidilutive shares excluded from the computation of earnings per share (in shares)	1.0	1.7	1.0	0.9

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ACQUISITION (Details 1) (USD $) In Millions, unless otherwise specified					2 Months Ended
	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2011	Aug. 22, 2012 KA Steel [Member]	Feb. 28, 2011 SunBelt [Member]
Business Acquisition [Line Items]
Total current assets				$ 126.0	$ 37.6
Property, plant and equipment				23.9	87.4
Intangible assets				139.5
Deferred income taxes					0.4
Other assets					5.8
Total assets acquired				289.4	131.2
Total current liabilities				63.2	42.7
Long-term debt					75.1
Other liabilities					27.6
Other liabilities				10.1
Total liabilities assumed				73.3	145.4
Net identifiable assets acquired				216.1
Less: Investment in SunBelt	(29.1)	(27.6)	(27.3)		(0.8)
Net liabilities assumed					(13.4)
Liabilities for uncertainties					48.3
Gain on remeasurement of investment in SunBelt					(181.4)
Goodwill				124.9	327.1
Fair value of net assets acquired				341.0	180.6
Cash paid				338.5	132.3
Olin trade accounts receivable from KA Steel				2.5
Total fair value of consideration				$ 341.0

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Condensed Statements of Comprehensive Income (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]
Net income	$ 28.7	$ 47.2	$ 115.0	$ 223.0
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	0.8	0	0.3	2.3
Unrealized gains (losses) on derivative contracts	9.2	(14.0)	10.5	(20.2)
Amortization of prior service costs and actuarial losses	3.3	3.0	10.8	9.1
Total other comprehensive income (loss), net of tax	13.3	(11.0)	21.6	(8.8)
Comprehensive income	$ 42.0	$ 36.2	$ 136.6	$ 214.2

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ACQUISITION

9 Months Ended

Sep. 30, 2012

Business Combinations [Abstract]

ACQUISITION

ACQUISITIONS

KA Steel Acquisition

On August 22, 2012, we acquired 100% of privately-held KA Steel, on a debt free basis, for $338.5 million in cash, subject to certain post-closing adjustments. As of the date of acquisition, KA Steel had cash and cash equivalents of $26.2 million. The price paid is subject to a customary working capital adjustment. KA Steel is one of the largest distributors of caustic soda in North America and manufacturers and sells bleach in the Midwest.

The acquisition was partially financed with proceeds from the $200 million of 5.50% senior notes (2022 Notes) sold on August 22, 2012 with a maturity date of August 15, 2022. Proceeds from the 2022 Notes were $196.0 million, after expenses of $4.0 million. The 2022 Notes were issued at par value. Interest will be paid semi-annually beginning on February 15, 2013.

For segment reporting purposes, KA Steel comprises the newly created Chemical Distribution segment. The KA Steel results of operations have been included in our consolidated results for the period subsequent to the effective date of the acquisition. Our results for the three and nine months ended September 30, 2012 include KA Steel sales of $47.6 million and $1.9 million of segment income, which includes depreciation and amortization expense of $1.7 million primarily associated with the acquisition fair valuing of KA Steel.

The transaction has been accounted for using the acquisition method of accounting which requires, among other things, that assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date.  We are in the process of determining the fair values of KA Steel's tangible and intangible assets and liabilities. Initial estimates of those fair values are included in this interim report; however, the valuation process is not complete, and we expect that adjustments to the initial valuation will be required. The following table summarizes the preliminary allocation of the purchase price to KA Steel's assets and liabilities:

	August 22, 2012
	($ in millions)
Total current assets	$	126.0
Property, plant and equipment	23.9
Intangible assets	139.5
Total assets acquired	289.4
Total current liabilities	63.2
Other liabilities	10.1
Total liabilities assumed	73.3
Net identifiable assets acquired	216.1
Goodwill	124.9
Fair value of net assets acquired	$	341.0
Supplemental Data
Cash paid	$	338.5
Olin trade accounts receivable from KA Steel	2.5
Total fair value of consideration	$	341.0

Included in total current assets is cash and cash equivalents of $26.2 million and receivables of $61.8 million with a contracted value of $63.5 million. Included in other liabilities is an accrued pension withdrawal liability of $10.0 million for a multi-employer defined benefit pension plan.

Based on preliminary valuations, we allocated $128.6 million of the purchase price to intangible assets relating to customers, customer contracts and relationships, which management estimates to have a useful life of ten years, and $10.9 million to intangible assets associated with the KA Steel trade name, which management estimates to have an indefinite useful life. These identifiable intangible assets were included in other assets. Based on preliminary valuations, $124.9 million was assigned to goodwill, all of which is deductible for tax purposes.  The primary reasons for the acquisition and the principal factors that contributed to a KA Steel purchase price that resulted in the recognition of goodwill are the expanded capability to market and sell caustic soda, potassium hydroxide, and hydrochloric acid, as well as, the geographic diversification the KA Steel locations provide us, and the strengthened position in the industrial bleach segment.

Goodwill and the indefinite-lived trade name intangible asset recorded in the acquisition are not amortized but will be reviewed for impairment annually in the fourth quarter and/or when circumstances or other events indicate that impairment may have occurred.

The following pro forma summary presents the condensed statement of income as if the acquisition of KA Steel had occurred on January 1, 2011 (unaudited).

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
	($ in millions, except per share data)
Sales	$	686.9	$	656.2	$	1,879.8	$	1,803.4
Net income	39.3		44.5		124.9		220.4
Net income per common share:
Basic	$	0.49	$	0.56	$	1.56	$	2.76
Diluted	$	0.48	$	0.55	$	1.54	$	2.73

The pro forma statement of income was prepared based on historical financial information and has been adjusted to give effect to pro forma adjustments that are (i) directly attributable to the transaction, (ii) factually supportable and (iii) expected to have a continuing impact on the combined results.  The pro forma statement of income uses estimates and assumptions based on information available at the time.  Management believes the estimates and assumptions to be reasonable; however, actual results may differ significantly from this pro forma financial information.  The pro forma information is not intended to reflect the actual results that would have occurred had the companies actually been combined during the period presented.  The pro forma data reflect the application of the following adjustments:

• Additional amortization expense related to the fair value of acquired identifiable intangible assets ($2.0 million and $3.5 million for the three months ended September 30, 2012 and September 30, 2011, respectively, and $9.0 million and $10.3 million for the nine months ended September 30, 2012 and September 30, 2011, respectively).

• Additional depreciation expense related to the fair value adjustment to property, plant and equipment and conforming KA Steel's useful lives to ours (zero and $0.1 million for the three months ended September 30, 2012 and September 30, 2011, respectively, and $0.2 million for both the nine months ended September 30, 2012 and September 30, 2011).

• Increase in interest expense related to the 2022 Notes issued in conjunction with this acquisition ($1.6 million and $2.8 million for the three months ended September 30, 2012 and September 30, 2011, respectively, and $7.1 million and $8.3 million for the nine months ended September 30, 2012 and September 30, 2011, respectively).

• Elimination of intersegment sales of caustic soda and bleach to KA Steel from Chlor Alkali Products at prices that approximate market ($4.6 million and $15.0 million for the three months ended September 30, 2012 and September 30, 2011, respectively, and $23.2 million and $37.0 million for the nine months ended September 30, 2012 and September 30, 2011, respectively).

• Elimination of transaction costs incurred in 2012 that are directly related to the transaction, and do not have a continuing impact on our combined operating results ($8.3 million for the three and nine months ended September 30, 2012).

In addition, the pro forma data reflect the tax effect of all of the above adjustments.  The pro forma tax provision reflects an increase (decrease) of $3.9 million and $(2.6) million for the three months ended September 30, 2012 and September 30, 2011, respectively, and $0.7 million and $(5.0) million for the nine months ended September 30, 2012 and September 30, 2011, respectively, associated with the incremental pretax income, the fair value adjustments for acquired intangible assets and property, plant and equipment, and the interest expense of the $200 million senior notes issued in conjunction with this acquisition, which reflects the marginal tax of the adjustments in the various jurisdictions where such adjustments occurred.

SunBelt Acquisition

On February 28, 2011, we acquired PolyOne’s 50% interest in SunBelt for $132.3 million in cash plus the assumption of a PolyOne guarantee related to the SunBelt Notes.  With this acquisition, we own 100% of SunBelt.  The SunBelt chlor alkali plant, which is located within our McIntosh, AL facility, has approximately 350,000 tons of membrane technology capacity.  We also agreed to a three year earn out, which has no guaranteed minimum or maximum, based on the performance of SunBelt.  In addition, during the second quarter of 2011, we remitted to PolyOne $6.0 million, which represented 50% of distributable cash generated by SunBelt from January 1, 2011 through February 28, 2011.

Pursuant to a note purchase agreement dated December 22, 1997, SunBelt sold $97.5 million of Guaranteed Senior Secured Notes due 2017, Series O, and $97.5 million of Guaranteed Senior Secured Notes due 2017, Series G.  We refer to these notes as the SunBelt Notes.  The SunBelt Notes bear interest at a rate of 7.23% per annum, payable semi-annually in arrears on each June 22 and December 22.  Beginning on December 22, 2002 and each year through 2017, SunBelt is required to repay $12.2 million of the SunBelt Notes, of which $6.1 million is attributable to the Series O Notes and of which $6.1 million is attributable to the Series G Notes.  In conjunction with the acquisition, we consolidated the SunBelt Notes with a fair value of $87.3 million for the remaining principal balance of $85.3 million as of February 28, 2011.

We have guaranteed the Series O Notes, and PolyOne, our former SunBelt partner, has guaranteed the Series G Notes, in both cases pursuant to customary guaranty agreements.  We have agreed to indemnify PolyOne for any payments or other costs under the guarantee in favor of the purchasers of the Series G Notes, to the extent any payments or other costs arise from a default or other breach under the SunBelt Notes.  If SunBelt does not make timely payments on the SunBelt Notes, whether as a result of a failure to pay on a guarantee or otherwise, the holders of the SunBelt Notes may proceed against the assets of SunBelt for repayment.

From January 1, 2011 to February 28, 2011, we recorded $6.3 million of equity earnings of non-consolidated affiliates for our 50% ownership in SunBelt.  The value of our investment in SunBelt was $(0.8) million.  We remeasured our equity interest in SunBelt to fair value upon the close of the transaction.  As a result, we recognized a pretax gain of $181.4 million, which was classified in other (expense) income in our condensed statement of income.  In conjunction with this remeasurement, a discrete deferred tax expense of $76.0 million was recorded.

The transaction has been accounted for using the acquisition method of accounting which requires, among other things, that assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date.  We finalized our purchase price allocation during the second quarter of 2011.  The following table summarizes the final allocation of the purchase price to SunBelt’s assets and liabilities:

	February 28, 2011
	($ in millions)
Total current assets	$	37.6
Property, plant and equipment	87.4
Deferred income taxes	0.4
Other assets	5.8
Total assets acquired	131.2
Total current liabilities	42.7
Long-term debt	75.1
Other liabilities	27.6
Total liabilities assumed	145.4
Less:  Investment in SunBelt	(0.8		)
Net liabilities assumed	(13.4		)
Liabilities for uncertainties	48.3
Gain on remeasurement of investment in SunBelt	(181.4		)
Goodwill	327.1
Fair value of total consideration	$	180.6

Included in total current assets are cash and cash equivalents of $8.9 million.  Included in total current liabilities is $12.2 million of current installments of long-term debt.

Based on final valuations, we allocated $5.8 million of the purchase price to intangible assets relating to customers, customer contracts and relationships, which management estimates to have a useful life of fifteen years.  These identifiable intangible assets were included in other assets.  Based on final valuations, $327.1 million was assigned to goodwill.  For tax purposes, $163.7 million of the goodwill is deductible.  The goodwill represents the fair value of SunBelt that is in addition to the fair values of the other net assets acquired.  The primary reason for the acquisition and the principal factors that contributed to a SunBelt purchase price that resulted in the recognition of goodwill is the strategic fit with our Chlor Alkali operations and SunBelt’s low cost membrane capacity.

Goodwill recorded in the acquisition is not amortized but will be reviewed for impairment annually in the fourth quarter and/or when circumstances or other events indicate that impairment may have occurred.

For segment reporting purposes, SunBelt has been included in Chlor Alkali Products.  The SunBelt results of operations have been included in our consolidated results for the period subsequent to the effective date of the acquisition.  The following pro forma summary presents the condensed statement of income as if the acquisition of SunBelt had occurred on January 1, 2011 (unaudited).

	Nine Months Ended
	September 30, 2011
	($ in millions, except per share data)
Sales	$	1,541.6
Net income	121.9
Net income per common share:
Basic	$	1.53
Diluted	$	1.51

The pro forma statement of income was prepared based on historical financial information and has been adjusted to give effect to pro forma adjustments that are (i) directly attributable to the transaction, (ii) factually supportable and (iii) expected to have a continuing impact on the combined results.  The pro forma statement of income uses estimates and assumptions based on information available at the time.  Management believes the estimates and assumptions to be reasonable; however, actual results may differ significantly from this pro forma financial information.  The pro forma information does not reflect any cost savings that might be achieved from operating the business under a single owner and is not intended to reflect the actual results that would have occurred had the companies actually been combined during the period presented.  The pro forma data reflect the application of the following adjustments:

• Elimination of the pretax gain resulting from the remeasurement of our previously held 50% equity interest in SunBelt, which is considered non-recurring ($181.4 million for the nine months ended September 30, 2011).

• Additional amortization expense related to the fair value of acquired identifiable intangible assets ($0.1 million for the nine months ended September 30, 2011).

• Reduction of depreciation expense related to the fair value adjustment to property, plant and equipment ($1.0 million for the nine months ended September 30, 2011).

• Reduction in interest expense as a result of increasing the carrying value of acquired debt obligations to its estimated fair value ($0.1 million for the nine months ended September 30, 2011).

• Additional accretion expense for the earn out liability that was recorded as a result of the acquisition ($0.4 million for the nine months ended September 30, 2011).

• Elimination of transaction costs incurred in 2011 that are directly related to the transaction, and do not have a continuing impact on our combined operating results ($0.8 million for the nine months ended September 30, 2011).

In addition, the pro forma data reflect the tax effect of all of the above adjustments.  The pro forma tax provision for the nine months ended September 30, 2011 reflects a reduction of $76.0 million related to the elimination of the gain resulting from the remeasurement of our previously held 50% equity interest in SunBelt.  The pro forma tax provision reflects an increase of $2.3 million for the nine months ended September 30, 2011, associated with the incremental pretax income and the fair value adjustments for acquired intangible assets, property, plant and equipment and the SunBelt Notes, which reflects the marginal tax of the adjustments in the various jurisdictions where such adjustments occurred.

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INCOME TAXES (Details Textuals) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011	Feb. 28, 2011	Dec. 31, 2010
Income Tax Disclosure [Abstract]
Statutory federal tax rate	35.00%	35.00%	35.00%	35.00%
Benefit from Section 45O credit	$ 0.3		$ 6.3
Changes in tax contingencies	0.1		1.3
Income Tax Reconciliation, Repatriation of Foreign Earnings	0.7		0.7
Expense (benefit) related to re-measurement of deferred taxes due to an increase in state tax effective rates	0.2		1.4	(4.9)
Prior Year Income Taxes		1.4		2.1
Deferred tax expense related to remeasurement of equity interest				76.0
Percentage of ownership in Sunbelt prior to acquiring remaining 50%						50.00%
Unrecognized Tax Benefits	40.2	38.7	40.2	38.7	37.9		41.5
Impact on the effective tax rate, if recognized	38.4	36.6	38.4	36.6
Significant Change in Unrecognized Tax Benefits is Reasonably Possible, Amount of Unrecorded Benefit	$ 8.3		$ 8.3
Internal Revenue Service (IRS) [Member]
Income Tax Examination [Line Items]
Open Tax Years by Major Tax Jurisdiction			2007 – 2011
State and Local Jurisdiction [Member]
Income Tax Examination [Line Items]
Open Tax Years by Major Tax Jurisdiction			2004 – 2011
Foreign Country [Member]
Income Tax Examination [Line Items]
Open Tax Years by Major Tax Jurisdiction			2007 – 2011
Canadian Provincial Income Tax [Member]
Income Tax Examination [Line Items]
Open Tax Years by Major Tax Jurisdiction			2007 – 2011

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ALLOWANCE FOR DOUBTFUL ACCOUNTS RECEIVABLES (Tables)

9 Months Ended

Sep. 30, 2012

Accounts Receivable, Net [Abstract]

Allowance for Doubtful Accounts Receivable

Allowance for doubtful accounts receivable consisted of the following:

	September 30,
	2012			2011
	($ in millions)
Balance at beginning of year	$	3.2		$	4.8
Provisions charged	0.6			0.8
(Write-offs) recoveries, net	(0.1		)	(1.7		)
Balance at end of period	$	3.7		$	3.9

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FAIR VALUE MEASUREMENTS (Tables)

9 Months Ended

Sep. 30, 2012

Fair Value Disclosures [Abstract]

Table of financial instruments measured at fair value

The following table summarizes the assets and liabilities measured at fair value in the condensed balance sheets:

	Fair Value Measurements
Balance at September 30, 2012	Level 1		Level 2		Level 3		Total
Assets	($ in millions)
Interest rate swaps	$	—	$	8.9	$	—	$	8.9
Commodity forward contracts	3.2		5.7		—		8.9
Liabilities
Interest rate swaps	$	—	$	10.9	$	—	$	10.9
Earn out	—		—		37.6		37.6
Balance at December 31, 2011
Assets
Interest rate swaps	$	—	$	13.8	$	—	$	13.8
Liabilities
Interest rate swaps	$	—	$	13.7	$	—	$	13.7
Commodity forward contracts	2.5		7.7		—		10.2
Earn out	—		—		49.0		49.0
Balance at September 30, 2011
Assets
Interest rate swaps	$	—	$	15.1	$	—	$	15.1
Liabilities
Interest rate swaps	$	—	$	15.1	$	—	$	15.1
Commodity forward contracts	4.8		9.9		—		14.7
Earn out	—		—		44.9		44.9

Activity summary of financial instruments measure at fair value using level 3 inputs

The following table summarizes the activity for our earn out liability measured at fair value using Level 3 inputs:

	September 30,
	2012			2011
	($ in millions)
Balance at beginning of year	$	49.0		$	—
(Settlements) purchases	(18.5		)	42.3
Unrealized losses included in other (expense) income	7.1			2.6
Balance at end of period	$	37.6		$	44.9

Fair value of debt table

The following table summarizes the fair value measurements of debt and the actual debt recorded on our condensed balance sheets:

	Fair Value Measurements
	Level 1		Level 2		Level 3		Total		Amount recorded on balance sheets
	($ in millions)
Balance at September 30, 2012	$	—	$	617.8	$	153.0	$	770.8	$	726.7
Balance at December 31, 2011	—		391.4		160.9		552.3		536.4
Balance at September 30, 2011	—		486.2		124.7		610.9		589.6

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STOCK-BASED COMPENSATION

9 Months Ended

Sep. 30, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

Stock-based compensation granted includes stock options, performance stock awards, restricted stock awards and deferred directors’ compensation.  Stock-based compensation expense (income) was as follows:

	Three Months Ended September 30,					Nine Months Ended September 30,
	2012		2011			2012		2011
	($ in millions)
Stock-based compensation	$	2.2	$	1.9		$	6.0	$	6.7
Mark-to-market adjustments	0.5		(2.0		)	1.0		(1.2		)
Total expense (income)	$	2.7	$	(0.1	)	$	7.0	$	5.5

The fair value of each stock option granted, which typically vests ratably over three years, but not less than one year, was estimated on the date of grant, using the Black-Scholes option-pricing model with the following weighted-average assumptions:

Grant date	2012			2011
Dividend yield	3.65		%	4.32		%
Risk-free interest rate	1.36		%	3.05		%
Expected volatility	43		%	42		%
Expected life (years)	7.0			7.0
Grant fair value (per option)	$	6.55		$	5.48
Exercise price	$	21.92		$	18.78
Shares granted	480,250			575,000

Dividend yield for 2012 and 2011 was based on a historical average.  Risk-free interest rate was based on zero coupon U.S. Treasury securities rates for the expected life of the options.  Expected volatility was based on our historical stock price movements, as we believe that historical experience is the best available indicator of the expected volatility.  Expected life of the option grant was based on historical exercise and cancellation patterns, as we believe that historical experience is the best estimate of future exercise patterns.