Dow Chemical 2009 Annual Report Download - page 99

Table of Contents
At December 31, 2009, the Company had a net deferred tax asset balance of $1.3 billion, after valuation allowances of $721 million.
In evaluating the ability to realize the deferred tax assets, the Company relies on, in order of increasing subjectivity, taxable income in prior carryback
years, the future reversals of existing taxable temporary differences, tax planning strategies and forecasted taxable income using historical and projected
future operating results.
At December 31, 2009, the Company had deferred tax assets for tax loss and tax credit carryforwards of $2.4 billion, $52 million of which is
subject to expiration in the years 2010-2014. In order to realize these deferred tax assets for tax loss and tax credit carryforwards, the Company needs
taxable income of approximately $7.4 billion across multiple jurisdictions. The taxable income needed to realize the deferred tax assets for tax loss and tax
credit carryforwards that are subject to expiration between 2010-2014 is approximately $347 million.
The Company recognizes the financial statement effects of an uncertain income tax position when it is more likely than not, based on the technical
merits, that the position will be sustained upon examination. At December 31, 2009, the Company had uncertain tax positions for both domestic and
foreign issues of $650 million.
The Company accrues for non-income tax contingencies when it is probable that a liability to a taxing authority has been incurred and the amount of
the contingency can be reasonably estimated. At December 31, 2009, the Company had a non-income tax contingency reserve for both domestic and
foreign issues of $189 million.
For additional information, see Notes A and X to the Consolidated Financial Statements.
Environmental Matters
Environmental Policies
Dow is committed to world-class environmental, health and safety (“EH&S”) performance, as demonstrated by industry-leading performance, a long-standing
commitment to Responsible Care®, and a strong commitment to achieve the Company’s 2015 Sustainability Goals – goals that set the standard for
sustainability in the chemical industry by focusing on improvements in Dow’s local corporate citizenship and product stewardship, and by actively pursuing
methods to reduce the Company’s environmental impact.
To meet the Company’s public commitments, as well as the stringent laws and government regulations related to environmental protection and remediation
to which its global operations are subject, Dow has well-defined policies, requirements and management systems. Dow’s EH&S Management System
(“EMS”) defines the “who, what, when and how” needed for the businesses to achieve the Company’s policies, requirements, performance objectives,
leadership expectations and public commitments. To ensure effective utilization, the EMS is integrated into a company-wide management system for EH&S,
Operations, Quality and Human Resources.
It is Dow’s policy to adhere to a waste management hierarchy that minimizes the impact of wastes and emissions on the environment. First, Dow works to
eliminate or minimize the generation of waste and emissions at the source through research, process design, plant operations and maintenance. Second, Dow
finds ways to reuse and recycle materials. Finally, unusable or non-recyclable hazardous waste is treated before disposal to eliminate or reduce the hazardous
nature and volume of the waste. Treatment may include destruction by chemical, physical, biological or thermal means. Disposal of waste materials in
landfills is considered only after all other options have been thoroughly evaluated. Dow has specific requirements for waste that is transferred to non-Dow
facilities, including the periodic auditing of these facilities.
Dow believes third-party verification and transparent public reporting are cornerstones of world-class EH&S performance and building public trust. As
such, numerous Dow sites in Europe, Latin America, Asia Pacific and North America have received third-party verification of Dow’s compliance with
Responsible Care® and with outside specifications such as ISO-14001. Dow continues to be a global champion of Responsible Care® and has worked to
broaden the application and impact of Responsible Care® around the world through engagement with suppliers, customers and joint venture partners.
Dow’s EH&S policies helped the Company achieve excellent safety performance in 2009. Dow’s 2009 recordable injury/illness frequency rate;
injury/illness severity rate; leaks, breaks and spills performance; and process safety performance were all at best ever levels and favorably position the
Company to achieve its 2015 sustainability goals. Further improvement in each of these areas as well as environmental compliance remain a top management
priority, with initiatives underway to further improve performance and compliance in 2010.
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