Dow Chemical 2013 Annual Report Download - page 105

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In the first quarter of 2011, the Company decreased the restructuring reserve by $6 million to adjust the reserve to the expected
future severance payments. The impact of this adjustment is shown as "Cost of sales" in the consolidated statements of income
and was reflected in Corporate. Severance payments of $7 million were made in the first half of 2011, bringing the program to a
close.
Restructuring Reserve Assumed from Rohm and Haas
In millions
Severance
Costs
Reserve balance at December 31, 2010 $ 12
Cash payments (7)
Adjustments to reserve (6)
Foreign currency impact 1
Reserve balance at June 30, 2011 $ —
NOTE 4 – ACQUISITIONS
Rohm and Haas Acquisition and Integration Related Expenses
During the first quarter of 2011, pretax charges totaling $31 million were recorded for integration costs related to the April 1,
2009 acquisition of Rohm and Haas. These charges are shown as “Acquisition-related integration expenses” in the consolidated
statements of income and reflected in Corporate.
NOTE 5 – DIVESTITURES
Divestiture of Polypropylene Licensing and Catalysts Business
On December 2, 2013, the Company sold its global Polypropylene Licensing and Catalysts business to W. R. Grace & Co. for
$490 million, net of working capital adjustments and costs to sell, with proceeds subject to customary post-closing adjustments
to be finalized in subsequent periods. The carrying value of the net assets divested was $39 million. The Company recorded a
$451 million pretax gain on the sale, included in "Sundry income (expense) - net" in the consolidated statements of income and
reflected in Performance Plastics. The Company recorded an after-tax gain of $356 million on the sale.
Divestiture of Ownership Interest in Dow Kokam LLC
On November 22, 2013, the Company sold its 67.4 percent ownership interest in Dow Kokam LLC ("Dow Kokam") to MBP
Investors, LLC. The Company recorded a pretax gain of $26 million on the sale, included in "Sundry income (expense) - net"
in the consolidated statements of income and reflected in Corporate. In the fourth quarter of 2012, the Company recorded a
restructuring charge related to the impairment of Dow Kokam’s long-lived assets (see Note 3 for additional information).
As a condition of the sale, Dow acquired the third party lenders’ interest in Dow Kokam’s $75 million note, which is included
in "Payments on long-term debt" in the consolidated statements of cash flows, and received a $75 million note from Dow
Kokam, of which $14 million is classified as "Accounts and notes receivable - other" and $61 million is classified as
"Noncurrent receivables" in the consolidated balance sheets. The note receivable is due to be paid in full by November 22,
2018. Payments received on the note receivable in future periods will be included in "Proceeds from sales of consolidated
companies" in the consolidated statements of cash flows.
Divestiture of Contract Manufacturing Business
On December 31, 2011, the Company sold the shares of Chemoxy International Limited, a contract manufacturing company
located in the United Kingdom, to Crossco (1255) Limited. All assets and liabilities aligned with this company were sold
including receivables; inventory; property, plant and equipment; customer lists; trademarks; software; and trade and other
payables. The sale was completed for $6 million, net of working capital adjustments and costs to sell, with proceeds subject to
customary post-closing adjustments to be finalized in subsequent periods. The value of the net assets divested was $48 million.
The Company recorded a $42 million pretax loss on the sale, included in "Sundry income (expense) - net" in the consolidated
statements of income and reflected in Performance Materials. The Company recorded an after-tax gain of $44 million on the
sale, primarily related to a tax benefit triggered by the recognition of capital losses on the share sale.
Post-closing adjustments were finalized in the fourth quarter of 2012 and the Company recognized a pretax and after-tax gain
of $8 million for the post-closing adjustments. The gain was included in "Sundry income (expense) - net" and reflected in
Performance Materials.