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84
Divestiture of Polypropylene Business
On July 27, 2011, the Company entered into a definitive agreement to sell its global Polypropylene business (a Performance
Plastics business) to Braskem SA. The definitive agreement specified the assets and liabilities related to the business to be
included in the sale: the Company's polypropylene manufacturing facilities at Schkopau and Wesseling, Germany, and Freeport
and Seadrift, Texas; railcars; inventory; receivables; business know-how; certain product and process technology; and customer
contracts and lists. On September 30, 2011, the sale was completed for $459 million, net of working capital adjustments and
costs to sell, with proceeds subject to customary post-closing adjustments to be finalized in subsequent periods. Immaterial
post-closing adjustments were finalized in the second quarter of 2012. The proceeds included a $474 million receivable that
was paid to the Company on October 3, 2011. Dow's Polypropylene Licensing and Catalysts business and related catalyst
facilities were excluded from this sale. The transaction resulted in several long-term supply, service and purchase agreements
between Dow and Braskem SA, which are expected to generate significant ongoing cash flows. As a result, the divestiture of
this business was not reported as discontinued operations.
Divestiture of the Styron Business Unit
On June 17, 2010, the Company sold the Styron business unit ("Styron") to an affiliate of Bain Capital Partners. The proceeds
received on the sale included a $75 million long-term note receivable. In addition, the Company elected to acquire a 7.5 percent
equity interest in the resulting privately held, global materials company.
On February 3, 2011, Styron repaid the $75 million long-term note receivable, plus interest. In the first quarter of 2011, the
Company received dividend income of $25 million, recorded in "Sundry income (expense) - net" in the consolidated statements
of income and reflected in Corporate. The Company continued to hold a 6.5 percent equity interest at December 31, 2013.
NOTE 6 – INVENTORIES
The following table provides a breakdown of inventories:
Inventories at December 31
In millions 2013 2012
Finished goods $ 4,717 $ 4,880
Work in process 1,948 1,910
Raw materials 760 866
Supplies 878 820
Total inventories $ 8,303 $ 8,476
The reserves reducing inventories from a FIFO basis to a LIFO basis amounted to $854 million at December 31, 2013 and
$842 million at December 31, 2012. Inventories valued on a LIFO basis, principally hydrocarbon and U.S. chemicals and
plastics product inventories, represented 25 percent of the total inventories at December 31, 2013 and 29 percent of total
inventories at December 31, 2012.
A reduction of certain inventories resulted in the liquidation of some of the Company’s LIFO inventory layers, increasing
pretax income $55 million in 2013, $91 million in 2012 and $126 million in 2011.