Dow Chemical 2011 Annual Report Download - page 187

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completed the divestiture of its interest in Morton to K+S and received net proceeds of $1,576 million, with proceeds subject to
customary post-closing adjustments. As a result, the Company recognized a pretax $37 million gain on the sale in the fourth
quarter of 2009, included in “Sundry income (expense)– net,” and reflected in Corporate. One billion dollars in proceeds from
this transaction were used to pay off the Term Loan Agreement used to fund the acquisition of Rohm and Haas (see Note P).
The results of operations for the Salt business were reported in Corporate and were not material to the consolidated financial
statements.
Divestiture of Calcium Chloride Business
On June 30, 2009, the Company completed the sale of the Calcium Chloride business for net proceeds of $204 million and
recognized a pretax gain of $162 million. The results of the Calcium Chloride business, including the second quarter of 2009
gain on the sale, are reflected as “Income from discontinued operations, net of income taxes” in the consolidated statements of
income.
The following table presents the results of discontinued operations:
Discontinued Operations
In millions
Net sales
Income before income taxes
Provision for income taxes
Income from discontinued operations, net of income taxes
2009
$ 70
$ 175
$ 65
$ 110
Divestiture of Investments in Nonconsolidated Affiliates
On September 1, 2009, the Company completed the sale of its ownership interest in Total Raffinaderij Nederland N.V.
(“TRN”), a nonconsolidated affiliate, and related inventory to Total S.A. for $742 million. This sale resulted in a pretax net gain
of $457 million, which consisted of a gain of $513 million included in “Sundry income (expense) – net” and a charge of
$56 million related to the recognition of hedging losses, which were recorded to “Cost of sales.” The gain impacted the
Feedstocks and Energy segment.
On September 30, 2009 the Company completed the sale of its ownership interest in the OPTIMAL Group of Companies
(“OPTIMAL”), nonconsolidated affiliates, to Petroliam Nasional Berhad for net proceeds of $660 million. This sale resulted in
a pretax gain of $339 million included in “Sundry income (expense) – net,” and reflected in the operating segments as follows:
$146 million in Performance Materials and $193 million in Feedstocks and Energy.
NOTE F – INVENTORIES
The following table provides a breakdown of inventories:
Inventories at December 31
In millions
Finished goods
Work in process
Raw materials
Supplies
Total inventories
2011
$ 4,327
1,716
765
769
$ 7,577
2010
$ 4,289
1,498
644
656
$ 7,087
The reserves reducing inventories from a FIFO basis to a LIFO basis amounted to $1,105 million at December 31, 2011
and $1,003 million at December 31, 2010. Inventories valued on a LIFO basis, principally hydrocarbon and U.S. chemicals and
plastics product inventories, represented 30 percent of the total inventories at December 31, 2011 and 29 percent of total
inventories at December 31, 2010.
A reduction of certain inventories resulted in the liquidation of some of the Company’s LIFO inventory layers, increasing
pretax income $126 million in 2011, $159 million in 2010 and $84 million in 2009.