Dow Chemical 2012 Annual Report Download - page 77

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costs, the majority of which will be settled by December 31, 2013. At December 31, 2012, the remaining liability for
the 1Q12 Restructuring plan was $87 million.
• On October 23, 2012, the Board of Directors approved a restructuring plan ("4Q12 Restructuring") to advance the next
stage of the Company's transformation and to address macroeconomic uncertainties. The 4Q12 Restructuring plan
accelerates the Company's structural cost reduction program and will affect approximately 2,850 positions. The 4Q12
Restructuring plan also includes asset impairments related to the shutdown of approximately 20 manufacturing
facilities, the write-off of certain capital project spending and an impairment charge related to the write-down of Dow
Kokam LLC's long-lived assets. These actions are expected to be completed primarily over the next two years and will
result in cash expenditures related to severance costs, contract cancellation fees, other postretirement benefit
curtailment costs and environmental remediation, the majority of which is expected be settled by December 31, 2014.
At December 31, 2012, the remaining liability for the 4Q12 Restructuring plan was $397 million.
The Company expects to incur additional costs in the future related to its 1Q12 and 4Q12 restructuring activities, as the
Company continually looks for ways to enhance the efficiency and cost effectiveness of its operations, and to ensure
competitiveness across its businesses and geographic areas. Future costs are expected to include demolition costs related to
closed facilities and restructuring plan implementation costs; these will be recognized as incurred. The Company also expects
to incur additional employee-related costs, including involuntary termination benefits, related to its other optimization
activities. These costs cannot be reasonably estimated at this time.
Management expects that the Company will continue to have sufficient liquidity and financial flexibility to meet all of its
business obligations.
Working Capital at December 31
In millions 2012 2011
Current assets $ 23,684 $ 23,422
Current liabilities 11,493 13,634
Working capital $ 12,191 $ 9,788
Current ratio 2.06:1 1.72:1
Days-sales-outstanding-in-receivables 46 44
Days-sales-in-inventory 71 64
Working capital increased from December 31, 2011 to December 31, 2012 principally due to decreases in the current
portion of long-term debt from maturities and early redemptions. At December 31, 2012, trade receivables were $5.1 billion, up
from $4.9 billion at December 31, 2011. Days-sales-outstanding-in-receivables (excluding the impact of sales of receivables)
was 46 days at December 31, 2012 compared with 44 days at December 31, 2011. At December 31, 2012, total inventories
were $8.5 billion, up from $7.6 billion at December 31, 2011. Days-sales-in-inventory at December 31, 2012 was 71 days
compared with 64 days at December 31, 2011, reflecting increased production across all operating segments.