Dow Chemical 2012 Annual Report Download - page 106

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• Two Interconnect Technologies manufacturing facilities, one in Lucerne, Switzerland and the other in
Marlborough, Massachusetts, will be shut down, resulting in a charge related to the write-down of assets of
$13 million against the Electronics and Functional Materials segment. The manufacturing facility in
Massachusetts will shut down in the fourth quarter of 2013; the manufacturing facility in Switzerland will shut
down in the fourth quarter of 2014.
• A polyethylene manufacturing facility in Tessenderlo, Belgium will be shut down in the first quarter of 2013. As a
result, an asset write-down of $10 million was recorded against the Performance Plastics segment.
• Certain Building and Construction manufacturing assets in Midland, Michigan were shut down in the fourth
quarter of 2012. As a result, an asset write-down of $9 million was recorded against the Coatings and
Infrastructure Solutions segment.
• Formulated Systems manufacturing capacity will be consolidated in the United States, resulting in the shut down
of a Solon, Ohio manufacturing facility and an asset write-down of $5 million, impacting the Performance
Materials segment. The manufacturing facility will shut down in the fourth quarter of 2013.
• The decision was made to shut down a number of small manufacturing, research and development, and
administrative facilities to optimize the assets of the Company. Write-downs of $42 million were recorded in the
fourth quarter of 2012, impacting Performance Materials ($20 million), Electronic and Functional Materials
($13 million), Coatings and Infrastructure Solutions ($4 million) and Corporate ($5 million). These facilities will
be shut down no later than the fourth quarter of of 2014.
• Certain capital projects were canceled resulting in the write-off of project spending of $8 million against the
Feedstocks and Energy ($7 million) and Coatings and Infrastructure Solutions ($1 million) segments.
• Due to a change in the Company's strategy regarding its ownership in Nippon Unicar Company Limited ("NUC"), a
50:50 joint venture, the Company determined its equity investment in NUC to be other-than-temporarily impaired and
recorded a $9 million write-down of its interest in NUC against the Performance Plastics segment.
• The fourth quarter of 2012 restructuring charge also included the write-off of other assets associated with plant
closures totaling $10 million. These charges are reflected in the results of the operating segments impacted by the
restructuring activities.
The following table summarizes the activities related to the Company's 4Q12 Restructuring reserve:
4Q12 Restructuring Activities
Costs
Associated with
Exit or
Disposal
Activities
Impairment of
Long-Lived
Assets, Other
Assets and
Equity Method
Investments
In millions
Severance
Costs Total
Restructuring charges recognized in the
fourth quarter of 2012 $ 39 $ 375 $ 576 $ 990
Charges against the reserve (9) — (576) (585)
Cash payments — (8) — (8)
Reserve balance at December 31, 2012 $ 30 $ 367 $ — $ 397
The reserve balance is included in the consolidated balance sheets as "Accrued and other current liabilities" and "Other
noncurrent obligations."
1Q12 Restructuring
On March 27, 2012, the Company's Board of Directors approved a restructuring plan ("1Q12 Restructuring") to optimize its
portfolio, respond to changing and volatile economic conditions, particularly in Western Europe, and to advance the Company's
Efficiency for Growth program, which was initiated by the Company in the second quarter of 2011. The 1Q12 Restructuring
plan includes the elimination of approximately 900 positions. In addition, the Company will shut down a number of
manufacturing facilities. These actions are expected to be completed primarily by December 31, 2013.