Dow Chemical 2009 Annual Report Download - page 127

Table of Contents
The following table summarizes the activities related to the Company’s restructuring reserve:
2008 Restructuring Activities
In millions
Impairment of
Long-Lived
Assets and Other
Assets
Costs associated
with Exit or
Disposal
Activities Severance Costs Total
Restructuring charges recognized in the fourth quarter of
2008 $ 336 $ 128 $ 321 $ 785
Cash payments - - (2) (2)
Charges against reserve (336) - - (336)
Reserve balance at December 31, 2008 - $ 128 $ 319 $ 447
Adjustment to reserve - - 19 19
Cash payments - - (287) (287)
Foreign currency impact - 7 2 9
Reserve balance at December 31, 2009 - $ 135 $ 53 $ 188
2007 Restructuring
On December 3, 2007, the Company’s Board of Directors approved a restructuring plan that included the shutdown of a number of assets and organizational
changes within targeted support functions to improve the efficiency and cost effectiveness of the Company’s global operations. As a result of these shutdowns
and organizational changes, which were substantially complete at year-end 2009, the Company recorded pretax restructuring charges totaling $590 million in
the fourth quarter of 2007. The charges consisted of asset write-downs and write-offs of $422 million, costs associated with exit or disposal activities of
$82 million and severance costs of $86 million. The impact of the charges is shown as “Restructuring charges” in the consolidated statements of income and
was reflected in the Company’s segment results as shown in the following table, which also reflects adjustments made in 2007 to the 2006 restructuring
charges.
2007 Restructuring Charges by Operating Segment
In millions
Impairment of
Long-Lived
Assets, Other
Intangible Assets
and Equity
Investments
Costs associated
with Exit or
Disposal
Activities Severance Costs Total
Electronic and Specialty Materials $ 25 $ 2 - $ 27
Coatings and Infrastructure 19 1 - 20
Health and Agricultural Sciences 58 19 - 77
Performance Systems 123 32 - 155
Performance Products 59 - - 59
Basic Plastics 96 - - 96
Basic Chemicals 7 - - 7
Hydrocarbons and Energy 31 13 - 44
Corporate 4 15 $ 86 105
Total 2007 restructuring charges $ 422 $ 82 $ 86 $ 590
Adjustments to 2006 restructuring charge:
Performance Products - (4) - (4)
Corporate - - (8) (8)
Net 2007 restructuring charges $ 422 $ 78 $ 78 $ 578
Details regarding the components of the 2007 restructuring charges are discussed below:
Impairment of Long-Lived Assets, Other Intangible Assets and Equity Investments
The restructuring charges related to the write-down or write-off of assets and equity investments in 2007 totaled $422 million and included the impact of plant
closures and impairments of $273 million. The most significant plant write-downs affected Dow’s facilities located in Lauterbourg, France; Camaçari, Brazil;
Aratu, Brazil; Tarragona, Spain; Hahnville, Louisiana; and Berre, France; and assets related to the exit of the automotive sealants business in North
America, Latin America and Asia Pacific. Details regarding these write-downs are as follows:
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