Dow Chemical 2012 Annual Report Download - page 114

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Summarized Income Statement Information
In millions 2012 (1) 2011 (2) 2010 (3)
Sales $ 17,668 $ 16,396 $ 14,702
Gross profit $ 2,911 $ 4,176 $ 3,833
Net income $ 872 $ 2,470 $ 2,189
(1) The summarized income statement information for 2012 does not include the
results for Compañia Mega S.A. which is no longer considered a principal
nonconsolidated affiliate as of the fourth quarter of 2012.
(2) The summarized income statement information for 2011 does not include the
results for Map Ta Phut Olefins Company and Sadara Chemical Company as
these entities became principal nonconsolidated affiliates in 2012.
(3) The summarized income statement information for 2010 includes the results for
Americas Styrenics LLC through June 17, 2010. It does not include the results
for Map Ta Phut Olefins Company and Sadara Chemical Company as these
entities became principal nonconsolidated affiliates in 2012.
The Company has service agreements with some of these entities, including contracts to manage the operations of
manufacturing sites and the construction of new facilities; licensing and technology agreements; and marketing, sales, purchase
and lease agreements.
Excess ethylene glycol produced in Dow’s plants in the United States and Europe is sold to MEGlobal and represented 1
percent of total net sales in 2012 (1 percent of total net sales in 2011 and 1 percent of total net sales in 2010). In addition, the
Company sells ethylene to MEGlobal as a raw material for its ethylene glycol plants in Canada. Sales of ethylene and ethylene
glycol to MEGlobal are reflected in the Feedstocks and Energy segment and represented 4 percent of the segment's sales in
2012 (5 percent in 2011 and 6 percent in 2010).
NOTE 9 – GOODWILL AND OTHER INTANGIBLE ASSETS
The following table shows changes in the carrying amount of goodwill for the years ended December 31, 2012 and 2011, by
operating segment:
Goodwill Electronic
and
Functional
Materials
Coatings and
Infrastructure
Solutions
Ag
Sciences
Perf
Materials
Perf
Plastics
Feedstocks
and Energy Total
In millions
Gross goodwill at Jan 1, 2011 $ 4,949 $ 4,057 $ 1,546 $ 1,182 $ 1,416 $ 63 $ 13,213
Accumulated impairments at
Jan 1, 2011 — ——
(216)(30)— (246)
Net goodwill at Jan 1, 2011 $ 4,949 $ 4,057 $ 1,546 $ 966 $ 1,386 $ 63 $ 12,967
Acquisition of seed company — — 12 — — — 12
Sale of a Dow Automotive
Systems product line ——— (7)— — (7)
Foreign currency impact (15) (16) — — (11) — (42)
Net goodwill at Dec 31, 2011 $ 4,934 $ 4,041 $ 1,558 $ 959 $ 1,375 $ 63 $ 12,930
Lightscape Materials, Inc. 3 ———— —3
Goodwill impairment — — — (220) — — (220)
Foreign currency impact 8 11 — 1 6 — 26
Net goodwill at Dec 31, 2012 $ 4,945 $ 4,052 $ 1,558 $ 740 $ 1,381 $ 63 $ 12,739
Accumulated impairments at
Dec 31, 2012 — — — 429 — — 429
Gross goodwill at Dec 31, 2012 $ 4,945 $ 4,052 $ 1,558 $ 1,169 $ 1,381 $ 63 $ 13,168
At December 31, 2012, the Company had accumulated goodwill impairments of $429 million ($209 million at
December 31, 2011 and $246 million at January 1, 2011). During the past two years, the accumulated goodwill impairments
balance was reduced by the following transactions: the September 30, 2011 sale of the global Polypropylene business, which
included $30 million of impaired goodwill (reflected in Performance Plastics); and the divestiture of the Dow Haltermann
business during 2011, which included $7 million of impaired goodwill (reflected in Performance Materials).