Dow Chemical 2014 Annual Report Download - page 110

Download and view the complete annual report

Please find page 110 of the 2014 Dow Chemical annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 186

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170
  • 171
  • 172
  • 173
  • 174
  • 175
  • 176
  • 177
  • 178
  • 179
  • 180
  • 181
  • 182
  • 183
  • 184
  • 185
  • 186

86
NOTE 9 – GOODWILL AND OTHER INTANGIBLE ASSETS
The following tables show changes in the carrying amount of goodwill for the years ended December 31, 2014 and 2013, by
operating segment:
2014 Goodwill
Agricultural
Sciences
Consumer
Solutions
Infrastructure
Solutions
Performance
Materials &
Chemicals
Performance
Plastics Total
In millions
Gross goodwill at Jan 1, 2014 $ 1,563 $ 4,618 $ 4,540 $ 1,041 $ 1,465 $ 13,227
Accumulated impairments at
Jan 1, 2014 —(209) — (220) — (429)
Net goodwill at Jan 1, 2014 $ 1,563 $ 4,409 $ 4,540 $ 821 $ 1,465 $ 12,798
Purchase price adjustment of a
seed company (5) — — — — (5)
Foreign currency impact — (20) (89) (12) (40) (161)
Net goodwill at Dec 31, 2014 $ 1,558 $ 4,389 $ 4,451 $ 809 $ 1,425 $ 12,632
Accumulated impairments at
Dec 31, 2014 — 209 — 220 — 429
Gross goodwill at Dec 31, 2014 $ 1,558 $ 4,598 $ 4,451 $ 1,029 $ 1,425 $ 13,061
2013 Goodwill
Agricultural
Sciences
Consumer
Solutions
Infrastructure
Solutions
Performance
Materials &
Chemicals
Performance
Plastics Total
In millions
Gross goodwill at Jan 1, 2013 $ 1,558 $ 4,611 $ 4,511 $ 1,037 $ 1,451 $ 13,168
Accumulated impairments at
Jan 1, 2013 —(209) — (220) — (429)
Net goodwill at Jan 1, 2013 $ 1,558 $ 4,402 $ 4,511 $ 817 $ 1,451 $ 12,739
Acquisition of a seed company 5 — — — — 5
Sale of a Performance
Monomers product line — — (3) — — (3)
Foreign currency impact — 7 32 4 14 57
Net goodwill at Dec 31, 2013 $ 1,563 $ 4,409 $ 4,540 $ 821 $ 1,465 $ 12,798
Accumulated impairments at
Dec 31, 2013 — 209 — 220 — 429
Gross goodwill at Dec 31, 2013 $ 1,563 $ 4,618 $ 4,540 $ 1,041 $ 1,465 $ 13,227
Goodwill Impairments
The Company performs an impairment test for goodwill annually during the fourth quarter. Qualitative factors may be assessed
by the Company to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying
value. The qualitative factors assessed at the Company level include, but are not limited to, GDP growth rates, long-term
hydrocarbon and energy prices, equity and credit market activity, discount rates, foreign exchange rates and overall financial
performance. Qualitative factors assessed at the reporting unit level include, but are not limited to, changes in industry and
market structure, competitive environments, planned capacity and new product launches, cost factors such as raw material
prices, and financial performance of the reporting unit.
2014 Goodwill Impairment Testing
In 2014, the Company assessed qualitative factors for 9 of the 14 reporting units carrying goodwill. The qualitative assessment
indicated that it was more likely than not that the fair value exceeded carrying value for those reporting units included in the
qualitative test. The Company performed the first step of the quantitative testing for the remaining five reporting units. The
Company utilized a discounted cash flow methodology to calculate the fair value of the reporting units. Based on the fair value
analysis, management concluded that fair value exceeded carrying value for all reporting units. As a result, no additional
quantitative testing was required for the reporting units.