Dow Chemical 2013 Annual Report Download - page 120

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The assets, classified as Level 3 measurements, were valued at $127 million using unobservable inputs, including assumptions
a market participant would use to measure the fair value of the group of assets, which included projected cash flows. The
carrying value by segment was as follows: Coatings and Infrastructure Solutions assets were valued at $100 million;
Performance Materials assets were written down to zero; Feedstocks and Energy assets were valued at $9 million; and
Corporate assets were valued at $18 million.
2012 Fair Value Measurements on a Nonrecurring Basis
As part of the 1Q12 Restructuring plan that was approved on March 27, 2012, the Company shut down a number of
manufacturing facilities during 2012. The manufacturing assets and facilities associated with this plan were written down to
zero in the first quarter of 2012 and a $94 million impairment charge was included in "Restructuring charges (credits)" in the
consolidated statements of income. During the fourth quarter of 2012, the Company reduced the 1Q12 Restructuring reserve by
$4 million. See Note 3 for additional information.
In the second half of 2012, a $27 million asset impairment charge was recognized in the Performance Materials segment. The
assets, classified as Level 3 measurements, were valued at $12 million using unobservable inputs, including assumptions a
market participant would use to measure the fair value of the group of assets, which included projected cash flows.
As part of the 4Q12 Restructuring plan that was approved on October 23, 2012, the Company will shut down a number of
manufacturing facilities during the next two years. The manufacturing assets and facilities associated with this plan were
written down to zero in the fourth quarter of 2012. In addition, an equity investment was impaired. The equity investment,
classified as a Level 3 measurement, was valued at $33 million using unobservable inputs, including assumptions a market
participant would use to measure the fair value of the investment, which included projected cash flows. These impairment
charges, totaling $576 million, were included in "Restructuring charges (credits)" in the consolidated statements of income. See
Note 3 for additional information.
In the fourth quarter of 2012, the Company performed its annual goodwill impairment testing utilizing a discounted cash flow
methodology as its valuation technique. As a result of this testing, the Company recognized a $220 million goodwill
impairment charge related to its Dow Formulated Systems reporting unit (part of the Performance Materials segment), which
was included in "Goodwill impairment loss" in the consolidated statements of income. See Note 9 for additional information.
2011 Fair Value Measurements on a Nonrecurring Basis
After evaluating expected future investments in conjunction with expected future cash flows, a $27 million asset impairment
charge was recognized in the fourth quarter of 2011 related to a manufacturing facility in Brazil aligned with the Polyurethanes
business. The long-lived assets and supplies associated with this facility were written down to zero. The charge was included in
"Cost of sales" in the consolidated statements of income and reflected in the Performance Materials segment. The decision was
made to shut down this facility as part of the 1Q12 Restructuring plan.