Dow Chemical 2009 Annual Report Download - page 126

Table of Contents
·Solution vinyl resin manufacturing facilities in Texas City, Texas. A $26 million write-down of the net book value of the related buildings,
machinery and equipment against the Performance Products segment was recorded in the fourth quarter of 2008. This plant was shut down in
the third quarter of 2009.
·Perchloroethylene/carbon tetrachloride manufacturing facility in Aratu, Brazil. An $11 million write-off of the net book value of the related
buildings, machinery and equipment against the Basic Chemicals segment was recorded in the fourth quarter of 2008. This facility is expected
to be shut down by the end of the first quarter of 2010.
·In addition to the locations described above, the restructuring charges for plant closures included $26 million related to the shutdown of several
small production facilities.
·The Company decided in the fourth quarter of 2008 to pursue strategic alternatives regarding its Wilton, England, ethylene oxide/ethylene glycol
(“EO/EG”) plant. Based on the results of asset impairment testing, an impairment charge of $30 million against the Basic Chemicals segment was
recorded in the fourth quarter of 2008. The plant was shut down in January 2010.
·Due to an expected loss on the pending sale of the automotive sealants business in Europe, an impairment charge of $8 million against the
Performance Systems segment was recorded in the fourth quarter of 2008. The business was sold in the first quarter of 2009.
·Due to a change in scope, the Company’s investment (primarily engineering costs) in a project to form a joint venture to design, build and operate a
petrochemical complex in Oman was written down. An $83 million write-down of the project-related spending against the Basic Plastics segment was
recorded in the fourth quarter of 2008.
The restructuring charges in the fourth quarter of 2008 also included the write-off of capital project spending ($13 million); spare parts ($9 million) and
catalysts ($6 million) associated with plant closures; other assets ($5 million); as well as a loss on the sale of inventory ($15 million) associated with the
divestiture of the automotive sealants business in Europe. These write-offs were related to the businesses involved in the shutdown of assets and were therefore
reflected in the results of various operating segments.
Costs Associated with Exit or Disposal Activities
The restructuring charges for costs associated with exit or disposal activities totaled $128 million in 2008 and included pension curtailment costs and
termination benefits of $88 million reflected in Corporate; and environmental remediation and asbestos abatement of $40 million primarily impacting Basic
Chemicals and Corporate.
Severance Costs
As a result of the Company’s decision to shut down assets around the world and implement a global workforce reduction, the restructuring charges
included severance of $321 million for the separation of approximately 3,000 employees under the terms of Dow’s ongoing benefit arrangements, primarily
over the next two years. These costs were charged against Corporate. In the first quarter 2009, the Company increased the severance reserve by
$19 million, including approximately 500 additional employees. At December 31, 2009, severance of approximately $289 million had been paid and a
currency adjusted liability of $53 million remained for approximately 293 employees.
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