Dow Chemical 2011 Annual Report Download - page 128

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During 2010, the Company recorded adjustments of $29 million to the 2009 restructuring charge for additional asset
impairments, exit and disposal activities, and severance; and adjustments of $3 million to the 2008 restructuring charge to
reduce the severance reserve. The adjustments were shown as "Restructuring charges" in the consolidated statements of income
and were reflected in Electronic and Functional Materials ($8 million charge), Coatings and Infrastructure Solutions
($20 million charge) and Corporate ($2 million credit).
In June 2009, Dow's Board of Directors approved a restructuring plan that incorporated actions related to the Company's
acquisition of Rohm and Haas as well as additional actions to advance the Company's strategy and to respond to continued
weakness in the global economy. The restructuring plan included the shutdown of a number of facilities and a global workforce
reduction. As a result, the Company recorded restructuring charges totaling $677 million in the second quarter of 2009, which
included asset write-downs and write-offs of $454 million, severance costs of $155 million and costs associated with exit or
disposal activities of $68 million. The impact of the charges was shown as “Restructuring charges” in the consolidated
statements of income and was reflected in the Company's segment results as follows: $48 million in Electronic and Functional
Materials, $262 million in Coatings and Infrastructure Solutions, $2 million in Performance Materials, $1 million in
Performance Plastics and $140 million in Feedstocks and Energy, with the remaining $224 million in Corporate.
During 2009, the Company recorded the following adjustments to its restructuring plans: in the first quarter of 2009, the
Company recorded additional severance of $19 million related to 2008 restructuring activities, reflected in Corporate; in the
second quarter of 2009, the Company recorded a $15 million reduction in the 2007 restructuring reserve, reflected in the
Agricultural Sciences segment; and in the fourth quarter of 2009, the Company recorded a $5 million reduction to the 2007
restructuring reserve and $13 million in additional charges related to the 2009 restructuring activities, both reflected in
Corporate.
See Note C to the Consolidated Financial Statements for details on the restructuring charges.
During 2009, a charge of $7 million was recorded for purchased in-process research and development (“IPR&D”) related
to the purchase of lithium-ion battery technology by the Ventures business, impacting Corporate. See Note D to the
Consolidated Financial Statements for information regarding this charge.
Charges totaling $31 million in 2011, $143 million in 2010 and $166 million in 2009 were recorded for integration costs,
legal expenses and other transaction costs related to the acquisition of Rohm and Haas; these charges were reflected in
Corporate. In 2009, the Company also recorded $60 million in acquisition-related retention costs. These costs were recorded in
“Cost of sales,” “Research and development expenses,” and “Selling, general and administrative expenses” in the consolidated
statements of income and reflected in Corporate. The integration of Rohm and Haas was completed in the first quarter of 2011.
Following the completion of a study to review Union Carbide's asbestos claim and resolution activity in December of
2010, Union Carbide decreased its asbestos-related liability for pending and future claims (excluding future defense and
processing costs) by $54 million in the fourth quarter of 2010. The reduction was shown as “Asbestos-related credit” in the
consolidated statements of income and was reflected in Corporate. See Asbestos-Related Matters of Union Carbide Corporation
in Other Matters in Management's Discussion and Analysis of Financial Condition and Results of Operations; and Note N to
the Consolidated Financial Statements for additional information.
Dow’s share of the earnings of nonconsolidated affiliates in 2011 was $1,223 million, compared with $1,112 million in
2010 and $630 million in 2009. In 2011, equity earnings increased to a new Company record as improved earnings at
MEGlobal, The Kuwait Olefins Company K.S.C. and Univation Technologies, LLC more than offset declines at SCG-Dow
Group, Dow Corning Corporation ("Dow Corning"), Map Ta Phut Olefins Company Limited and EQUATE Petrochemical
Company K.S.C. ("EQUATE"). Equity earnings for 2011 also included a $86 million gain related to cash collected on a
previously impaired note receivable related to Equipolymers (reflected in Performance Plastics). In 2010, increased earnings at
Dow Corning, EQUATE, MEGlobal, The Kuwait Olefins Company K.S.C. and The Kuwait Styrene Company K.S.C. more
than offset a decline in earnings resulting from the September 2009 divestitures of the Company's ownership interests in TRN
and the OPTIMAL Group of Companies (“OPTIMAL”), and the June 2010 divestiture of the Company's ownership interest in
Americas Styrenics LLC. Equity earnings for 2009 were negatively impacted by a $65 million impairment charge related to
Equipolymers and the Company's $29 million share of a restructuring charge related to Dow Corning. In 2009, equity earnings
declined, reflecting the overall decrease in global demand and poor economic conditions, with EQUATE, Dow Corning and
OPTIMAL reporting the largest declines. Improved results were reported by The Kuwait Olefins Company K.S.C. in 2009
following the successful startup of additional production capacity for ethylene oxide/ethylene glycol and increased production
of ethylene in support of additional polyethylene capacity. See Note H to the Consolidated Financial Statements for additional
information on nonconsolidated affiliates. See Note E to the Consolidated Financial Statements for additional information
concerning the Company's divestitures.