Dow Chemical 2014 Annual Report Download - page 106

82
associated business, inventory, customer contracts, process technology, business know-how and certain intellectual property.
The transaction closed on February 2, 2015.
Divestiture of Polypropylene Licensing and Catalysts Business
On December 2, 2013, the Company sold its global Polypropylene Licensing and Catalysts business to W. R. Grace & Co. for
$490 million, net of working capital adjustments and costs to sell, with proceeds subject to customary post-closing adjustments
which were finalized in the fourth quarter of 2014. The carrying value of the net assets divested was $39 million. The Company
recorded a $451 million pretax gain on the sale, included in "Sundry income (expense) - net" in the consolidated statements of
income and reflected in Performance Plastics. The Company recorded an after-tax gain of $356 million on the sale.
Post-closing adjustments were finalized in the fourth quarter of 2014 and the Company recorded a pretax gain of $5 million
($3 million after tax) for the post-closing adjustments. The gain was included in "Sundry income (expense) - net" in the
consolidated statements of income and reflected in Performance Plastics.
Divestiture of Ownership Interest in Dow Kokam LLC
On November 22, 2013, the Company sold its 67.4 percent ownership interest in Dow Kokam LLC ("Dow Kokam") to MBP
Investors, LLC. The Company recorded a pretax gain of $26 million on the sale, included in "Sundry income (expense) - net"
in the consolidated statements of income and reflected in Corporate. In the fourth quarter of 2012, the Company recorded a
restructuring charge related to the impairment of Dow Kokam’s long-lived assets. See Note 3 for additional information.
As a condition of the sale, Dow acquired the third party lenders’ interest in Dow Kokam’s $75 million note, which is included
in "Payments on long-term debt" in the consolidated statements of cash flows, and received a $75 million note from Dow
Kokam. At December 31, 2014, $61 million is classified as "Noncurrent receivables" in the consolidated balance sheets. The
note receivable is due to be paid in full by November 22, 2018. Payments received on the note receivable are included in
"Proceeds from sales of property, businesses and consolidated companies, net of cash divested" in the consolidated statements
of cash flows.
Divestiture of Contract Manufacturing Business
On December 31, 2011, the Company sold the shares of Chemoxy International Limited, a contract manufacturing company
located in the United Kingdom, to Crossco (1255) Limited.
Post-closing adjustments were finalized in the fourth quarter of 2012 and the Company recognized a pretax and after-tax gain
of $8 million for the post-closing adjustments. The gain was included in "Sundry income (expense) - net" in the consolidated
statements of income and reflected in Performance Materials & Chemicals.
NOTE 6 – INVENTORIES
The following table provides a breakdown of inventories:
Inventories at December 31
In millions 2014 2013
Finished goods $ 4,547 $ 4,717
Work in process 1,905 1,948
Raw materials 797 760
Supplies 852 878
Total inventories $ 8,101 $ 8,303
The reserves reducing inventories from a FIFO basis to a LIFO basis amounted to $569 million at December 31, 2014 and
$854 million at December 31, 2013. Inventories valued on a LIFO basis, principally hydrocarbon and U.S. chemicals and
plastics product inventories, represented 29 percent of the total inventories at December 31, 2014 and 25 percent of total
inventories at December 31, 2013.
A reduction of certain inventories resulted in the liquidation of some of the Company’s LIFO inventory layers, increasing
pretax income $23 million in 2014, $55 million in 2013 and $91 million in 2012.