Dow Chemical 2009 Annual Report Download - page 179

Table of Contents
The Company is currently under examination in a number of tax jurisdictions. It is reasonably possible that these examinations may be resolved within
twelve months. As a result, it is reasonably possible that the total gross unrecognized tax benefits of the Company at December 31, 2009 will be reduced by
approximately $51 million. The amount of settlement remains uncertain and it is reasonably possible that before settlement, the amount of gross unrecognized
tax benefits may increase or decrease by approximately $30 million. The impact on the Company’s results of operations is not expected to be material.
Tax years that remain subject to examination for the Company’s major tax jurisdictions are shown below:
Tax Years Subject to Examination by Major Tax Jurisdiction at
December 31
Jurisdiction
Earliest Open Year
2009 2008
Argentina 2003 2002
Brazil 2004 2003
Canada 2002 2001
France 2007 2007
Germany 2002 2002
Italy 2004 2004
The Netherlands 2008 2008
Spain 2004 2004
Switzerland 2008 2006
United Kingdom 2007 2006
United States:
Federal income tax 2004 2001
State and local income tax 1989 1989
The reserve for non-income tax contingencies related to issues in the United States and foreign locations was $189 million at December 31, 2009 and
$163 million at December 31, 2008. This is management’s best estimate of the potential liability for non-income tax contingencies. Inherent uncertainties exist
in estimates of tax contingencies due to changes in tax law, both legislated and concluded through the various jurisdictions’ tax court systems. It is the opinion
of the Company’s management that the possibility is remote that costs in excess of those accrued will have a material adverse impact on the Company’s
consolidated financial statements.
NOTE Y – OPERATING SEGMENTS AND GEOGRAPHIC AREAS
Dow is a diversified, worldwide manufacturer and supplier of products used primarily as raw materials in the manufacture of customer products and
services. The Company serves the following industries: appliance; automotive; agricultural; building and construction; chemical processing; electronics;
furniture; housewares; oil and gas; packaging; paints, coatings and adhesives; personal care; pharmaceutical; processed foods; pulp and paper; textile and
carpet; utilities; and water treatment.
Dow conducts its worldwide operations through global businesses, which are reported in eight operating segments following the acquisition of Rohm and
Haas. The Company’s operating segments are Electronic and Specialty Materials, Coatings and Infrastructure, Health and Agricultural Sciences, Performance
Systems, Performance Products, Basic Plastics, Basic Chemicals, and Hydrocarbons and Energy. Corporate contains the reconciliation between the totals for
the reportable segments and the Company’s totals and includes research and other expenses related to new business development activities, and other corporate
items not allocated to the reportable operating segments. The Company uses EBITDA (which Dow defines as earnings before interest, income taxes,
depreciation and amortization) as its measure of profit/loss for segment reporting purposes. EBITDA by operating segment includes all operating items relating
to the businesses, except depreciation and amortization; items that principally apply to the Company as a whole are assigned to Corporate. See table toward the
end of this footnote for depreciation and amortization by segment as well as a reconciliation of EBITDA to “Income from Continuing Operations Before Income
Taxes.”
The Corporate Profile included below describes the operating segments, and the types of products and services from which their revenues are derived.
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