Dow Chemical 2015 Annual Report Download - page 91

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Impairment of Long-Lived Assets, Investments and Other Assets
The restructuring charges related to the write-down and write-off of assets in the second quarter of 2015 totaled $169 million.
Details regarding the write-downs and write-offs are as follows:
• As a result of changing market dynamics in certain end-use markets, select manufacturing facilities and non-core
assets aligned with the Dow Electronic Materials business will be shut down. The assets impacted include certain
display films and metalorganic precursors, including a metalorganic materials manufacturing site in North Andover,
Massachusetts, and related operations in Taoyuan, Taiwan, as well as certain display films’ manufacturing assets
aligned with SKC Haas Display Films Co., Ltd., a majority-owned joint venture located in Cheonan, South Korea. In
the second quarter of 2015, the Company recorded a $51 million charge for asset write-downs and write-offs in the
Dow Electronic Materials business, which is reflected in the Consumer Solutions segment. The facilities and assets
associated with these charges are expected to be shut down primarily by the end of 2016.
• The Company will shut down and/or consolidate manufacturing capacity in the Dow Building & Construction
business. As a result, the Company recorded a charge of $15 million in the second quarter of 2015 for asset write-offs
which is reflected in the Infrastructure Solutions segment. The impacted facilities are expected to be shut down by the
end of the third quarter of 2016.
• A Consumer Care manufacturing facility in Institute, West Virginia, was shut down in the fourth quarter of 2015. As a
result, an asset write-down of $14 million was recorded against the Consumer Solutions segment.
• A Dow Packaging and Specialty Plastics plant in Schkopau, Germany, was permanently shut down in the second
quarter of 2015, resulting in an asset write-off of $12 million against the Performance Plastics segment.
• Select operations in Agricultural Sciences were shut down, closed or idled in the second half of 2015, resulting in a
pretax charge of $8 million for the write-down of assets. In the fourth quarter of 2015, the Company recorded an
additional charge of $1 million related to the impairment of long-lived assets and other assets.
• A decision was made to shut down a number of small manufacturing and administrative facilities to optimize the
Company's asset footprint. Write-downs of $14 million were recorded in the second quarter of 2015, impacting
Infrastructure Solutions ($10 million) and Corporate ($4 million). These facilities will be shut down no later than the
second quarter of 2016. During the fourth quarter of 2015, the Company recorded a favorable adjustment to the
restructuring charge related to the impairment of long-lived assets of $1 million, impacting Infrastructure Solutions.
• Due to a change in the Company's strategy to monetize and exit certain Venture Capital portfolio investments, a write-
down of $55 million was recorded in the second quarter of 2015, reflected in Corporate.
The following table summarizes the activities related to the Company's 2015 restructuring reserve, which is included in
"Accrued and other current liabilities" and "Other noncurrent obligations" in the consolidated balance sheets as shown in the
following table.
2015 Restructuring Activities
In millions
Costs
Associated
with Exit and
Disposal
Activities
Severance
Costs
Impairment
of Long-
Lived Assets,
Investments
and Other
Assets Total
Restructuring Charges recognized in the
second quarter of 2015 $ 10 $ 196 $ 169 $ 375
Charges against the reserve — — (169) (169)
Adjustments to the reserve 1 39 — 40
Impact of currency (1) — — (1)
Cash payments — (92) — (92)
Reserve balance at Dec 31, 2015 $ 10 $ 143 $ — $ 153
Dow expects to incur additional costs in the future related to its restructuring activities, as the Company continually looks for
ways to enhance the efficiency and cost effectiveness of its operations, and to ensure competitiveness across its businesses and
geographic areas. Future costs are expected to include demolition costs related to closed facilities and restructuring plan
implementation costs; these costs will be recognized as incurred. The Company also expects to incur additional employee-