Dow Chemical 2009 Annual Report Download - page 123

Table of Contents
Details regarding the components of the 2009 restructuring charges are discussed below:
Impairment of Long-Lived Assets and Other Assets
The restructuring charges related to the write-down or write-off of assets totaled $454 million. Write-downs were related to Dow’s facilities located in Hahnville
and Plaquemine, Louisiana; the United States Federal Trade Commission (“FTC”) required divestiture of certain acrylic monomer and specialty latex assets
in North America; and other small manufacturing facilities where the acquisition of Rohm and Haas resulted in overlapping manufacturing capabilities.
Details regarding these write-downs or write-offs are as follows:
·Due to continued weakness in the global economy, the decision was made to shut down a number of hydrocarbon and basic chemicals facilities, with
an impact of $126 million, including the following:
·Ethylene manufacturing facility in Hahnville, Louisiana. A write-off of the net book value of the related buildings, machinery and equipment
against the Hydrocarbons and Energy segment was recorded. The facility shut down in the second quarter of 2009.
·Ethylene oxide/ethylene glycol manufacturing facility in Hahnville, Louisiana. A write-off of the net book value of the related buildings,
machinery and equipment against the Basic Chemicals segment was recorded. The facility shut down in the second quarter of 2009.
·Ethylene dichloride and vinyl chloride monomer manufacturing facility in Plaquemine, Louisiana. A write-down of the net book value of the
related buildings, machinery and equipment against the Basic Chemicals segment was recorded. The facility will shut down in mid-2011.
·With the completion of the Company’s acquisition of Rohm and Haas, the following charges were recognized:
·Due to an expected loss arising from the FTC required divestitures of certain acrylic monomer and specialty latex assets within eight months of
the closing of the acquisition of Rohm and Haas, the Company recognized an impairment charge of $205 million against the Coatings and
Infrastructure ($134 million) and Performance Products ($71 million) segments in the second quarter of 2009. The divestiture of the assets was
completed in January 2010 (see Note E).
·The decision was made to shut down a number of small manufacturing facilities to optimize the assets of the Company. Write-downs of $96
million were recorded in the second quarter of 2009, primarily impacting the Electronic and Specialty Materials ($66 million) and Coatings and
Infrastructure ($28 million) segments.
The restructuring charges in the second quarter of 2009 also included the write-off of capital project spending ($20 million) and other assets ($7 million)
associated with plant closures. These charges were reflected in the results of the operating segments impacted by the restructuring activities.
Costs Associated with Exit or Disposal Activities
The restructuring charges for costs associated with exit or disposal activities totaled $68 million in the second quarter of 2009 and included environmental
remediation of $64 million, impacting Corporate, with the remainder relating to contract termination fees and other charges. In the fourth quarter of 2009, the
Company increased the reserve by $13 million to reflect additional expense for pension settlements related to the Rohm and Haas acquisition.
Severance Costs
The restructuring charges included severance of $155 million for the separation of approximately 2,500 employees under the terms of the Company’s ongoing
benefit arrangements, primarily over the next two years. These costs were charged against Corporate. At December 31, 2009, severance of $72 million had
been paid and a currency adjusted liability of $84 million remained for approximately 1,221 employees.
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