Dow Chemical 2013 Annual Report Download - page 60

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The following table summarizes the impact of certain items recorded in 2013, 2012 and 2011:
Certain Items Impacting Results Pretax
Impact (1)
Impact on
Net Income (2)
Impact on
EPS (3) (4)
In millions, except per share amounts 2013 2012 2011 2013 2012 2011 2013 2012 2011
Adjusted to exclude certain items (non-
GAAP measures) $ 2,981 $ 2,249 $ 2,959 $ 2.48 $ 1.90 $ 2.54
Certain items:
Cost of sales:
Asset impairments and related costs $ (181) $ — $ (77) (124) — (51) (0.10) — (0.05)
Warranty accrual adjustment of exited
business — — (60) — — (38) — — (0.03)
Restructuring implementation costs (40) (1) — (29) (1) — (0.03) — —
Research and development expenses:
Restructuring implementation costs (2) — — (1) — — — — —
Selling, general and administrative
expenses:
Restructuring implementation costs (2) (21) — (2) (13) — — (0.01) —
Amortization of intangibles:
Asset impairments and related costs (3) — — (2) — — — — —
Goodwill impairment loss — (220) — — (220) — — (0.19) —
Restructuring charges (credits) (5) 22 (1,343) — 21 (951) — 0.02 (0.82) —
Acquisition-related integration expenses — — (31) — — (20) — — (0.02)
Equity in earnings of nonconsolidated
affiliates:
Gain on collection of impaired note
receivable — — 86 — — 86 — — 0.07
Dow Corning restructuring and asset
abandonment — (89) — — (82) — — (0.07) —
Sadara development and other costs — (73) — — (70) — — (0.06) —
Asset impairments at a formulated
electrolytes joint venture (10) — — (6) — — (0.01) — —
Sundry income (expense) - net:
Gain from K-Dow settlement 2,161 — — 1,647 — — 1.37 — —
Gain (Loss) on sale of contract
manufacturing business — 8 (42) — 8 44 — 0.01 0.04
Gain on sale of Polypropylene Licensing
and Catalysts business 451 — — 356 — — 0.29 — —
Gain on sale of a 7.5 percent interest in
Freeport LNG Development, L.P. 87 — — 69 — — 0.06 — —
Gain on sale of ownership interest in Dow
Kokam 26 — — 18 — — 0.01 — —
Loss on early extinguishment of debt (326) (123) (482) (205) (78) (314) (0.17) (0.06) (0.27)
Provision for income taxes:
Uncertain tax position adjustments — — — (276) — — (0.23) — —
Tax valuation allowance — — — — — (264) — — (0.23)
Total certain items $ 2,183 $(1,862) $ (606) $ 1,466 $(1,407) $ (557) $ 1.21 $ (1.20) $ (0.49)
Dilutive effect of assumed preferred stock
conversion into shares of common stock $ (0.01) $ — $ —
Reported U.S. GAAP Amounts (6) (7) $ 4,447 $ 842 $ 2,402 $ 3.68 $ 0.70 $ 2.05
(1) Impact on "Income Before Income Taxes."
(2) Impact on "Net Income Available for The Dow Chemical Company Common Stockholders."
(3) Impact on "Earnings per common share - diluted."
(4) For the year ended December 31, 2013, conversion of the Company's Cumulative Convertible Perpetual Preferred Stock, Series A into
shares of the Company's common stock was excluded from the calculation of "Diluted earnings per share adjusted to exclude certain
items" as well as the earnings per share impact of certain items because the effect of including them would have been antidilutive.
(5) "Restructuring charges (credits)" in 2012 include $304 million of asset impairments and severance costs related to Dow Kokam LLC
("Dow Kokam") which, at the time of the charge, was owned 63.6 percent by Dow. The Dow Kokam restructuring impact on "Net
Income Available for The Dow Chemical Company Common Stockholders" was reduced by $7 million of tax credits and $108 million
of net loss attributable to noncontrolling interests. The Company's share of the Dow Kokam charge, after tax and noncontrolling
interests, was $189 million.
(6) For the year ended December 31, 2013, an assumed conversion of the Company's Cumulative Convertible Perpetual Preferred Stock,
Series A into shares of the Company's common stock was included in the calculation of diluted earnings per share (reported U.S. GAAP
amount).
(7) The Company used "Net Income Attributable to The Dow Chemical Company" when calculating diluted earnings per share (reported
U.S. GAAP amount) for the twelve-month period ended December 31, 2013, as it excludes preferred dividends of $340 million.