Dow Chemical 2015 Annual Report Download - page 90

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effective. Early adoption is not permitted except for the provision to record fair value changes for financial liabilities under the
fair value option resulting from instrument-specific credit risk in other comprehensive income. The Company is currently
evaluating the impact of adopting this guidance.
NOTE 3 – RESTRUCTURING
On April 29, 2015, Dow's Board of Directors approved actions to further streamline the organization and optimize the
Company’s footprint as a result of the separation of a significant portion of Dow’s chlorine value chain. These actions, which
will further accelerate Dow’s value growth and productivity targets, will result in a reduction of approximately 1,750 positions
across a number of businesses and functions and adjustments to the Company's asset footprint to enhance competitiveness.
These actions are expected to be completed primarily by March 31, 2017.
As a result of these actions, the Company recorded pretax restructuring charges of $375 million in the second quarter of 2015
consisting of costs associated with exit or disposal activities of $10 million, severance costs of $196 million and asset write-
downs and write-offs of $169 million. In the fourth quarter of 2015, the Company recorded restructuring charge adjustments of
$40 million, including severance costs of $39 million for the separation of approximately 500 additional positions as part of the
Company's efforts to further streamline the organization, and $1 million of costs associated with exit and disposal activities.
The impact of these charges is shown as "Restructuring charges (credits)" in the consolidated statements of income and
reflected in the Company's segment results as shown in the following table. The Company also recorded $14 million of "Net
loss attributable to noncontrolling interests" for noncontrolling interests' portion of the restructuring charges.
2015 Restructuring Charges by Operating
Segment
In millions
Costs
Associated
with Exit or
Disposal
Activities
Severance
Costs
Impairment
of Long-
Lived Assets,
Investments
and Other
Assets Total
Agricultural Sciences $ 6 $ — $ 8 $ 14
Consumer Solutions 2 — 65 67
Infrastructure Solutions 2 — 25 27
Performance Plastics — — 12 12
Corporate — 196 59 255
2015 Restructuring Charges $ 10 $ 196 $ 169 $ 375
Adjustments to 2015 Restructuring Charges:
Agricultural Sciences 1 — 1 2
Infrastructure Solutions — — (1) (1)
Corporate — 39 — 39
Total 2015 Restructuring Charges $ 11 $ 235 $ 169 $ 415
Details regarding the components of the 2015 restructuring charges are discussed below:
Costs Associated with Exit and Disposal Activities
The restructuring charges for costs associated with exit and disposal activities, primarily environmental remediation and
contract penalties, totaled $10 million in the second quarter of 2015, impacting Agricultural Sciences ($6 million), Consumer
Solutions ($2 million) and Infrastructure Solutions ($2 million). In the fourth quarter of 2015, the Company increased the
restructuring reserve for costs associated with exit and disposal activities by $1 million, impacting Agricultural Sciences.
Severance Costs
The restructuring charges recorded in the second quarter of 2015 included severance of $196 million for the separation of
approximately 1,750 employees under the terms of the Company's ongoing benefit arrangements. In the fourth quarter of 2015,
the Company recorded an additional charge of $39 million related to the separation of approximately 500 additional employees,
primarily by March 31, 2017. These costs were charged against Corporate. At December 31, 2015, severance of $92 million
was paid, leaving a liability of $143 million for approximately 1,250 employees.