Dow Chemical 2015 Annual Report Download - page 97

87
The following table presents the major classes of assets and liabilities divested in the Transaction, by operating segment:
Dow Chlorine Value Chain Assets and Liabilities Divested
In millions
Performance
Materials &
Chemicals
Performance
Plastics Corporate Total
Accounts and notes receivable - trade $ 269 $ — $ (6) $ 263
Inventories 297 34 7 338
Other current assets 5 6 100 111
Net property 1,268 205 58 1,531
Goodwill 71 — — 71
Other noncurrent assets 9 1 34 44
Total assets divested $ 1,919 $ 246 $ 193 $ 2,358
Long-term debt due within one year (1) $ — $ — $ 51 $ 51
Other current liabilities 99 17 — 116
Long-Term Debt (1) — — 518 518
Deferred income tax liabilities - noncurrent — — 265 265
Pension and other postretirement benefits - noncurrent — — 439 439
Total liabilities divested $ 99 $ 17 $ 1,273 $ 1,389
Components of accumulated other comprehensive loss
divested $ — $ — $ (215) $ (215)
Net carrying value divested $ 1,820 $ 229 $ (865) $ 1,184
(1) Excludes $1,161 million included as part of the debt exchange offer and $875 million from a term loan entered into under the
terms of the Transaction. See Note 17 for additional information.
In the fourth quarter of 2015, the Company completed the split-off of the chlorine value chain for $3,510 million, net of
working capital adjustments and costs to sell, with proceeds subject to post-closing adjustments. The proceeds included cash
received from Splitco in the form of a one-time special payment from proceeds received from a term loan, the principal amount
of the Splitco debt included in the debt exchange offer and the market value of the Dow common shares tendered in the public
exchange offer. The Company recognized a pretax gain of $2,233 million on the Transaction, which is the excess of the sum of
the net proceeds received over the chlorine value chain's net book value, a loss on the early extinguishment of debt and a loss
on the acquisition of Mitsui's noncontrolling interest. The pretax gain is included in "Sundry income (expense) - net" in the
consolidated statements of income and reflected in the following operating segments: Performance Materials & Chemicals
(gain of $1,984 million), Performance Plastics (gain of $317 million), and Corporate (loss of $68 million). The Company
recognized an after-tax gain of $2,215 million, primarily due to the tax-efficient nature of the Transaction.
The Company will not report the historical results of the chlorine value chain as discontinued operations in Dow's financial
statements, as the divestiture of these businesses does not represent a strategic shift that will have a major effect on the
Company's operations and financial results. However, the chlorine value chain is considered an individually significant
component and select income statement information is presented below:
Dow Chlorine Value Chain Income Statement Information
In millions 2015 (1) 2014 2013
Income Before Income Taxes (2) $ 139 $ 281 $ 212
Loss before income taxes attributable to noncontrolling interests 11 5 4
Income Before Income Taxes attributable to The Dow Chemical Company (2) $ 150 $ 286 $ 216
(1) Income statement information for 2015 includes results through September 30, 2015.
(2) Excludes transaction costs associated with the separation of the chlorine value chain, which are reported below.
In 2015, the Company incurred pretax charges of $119 million ($49 million in 2014) for nonrecurring transaction costs
associated with the separation of the chlorine value chain, consisting primarily of financial and professional advisory fees, legal
fees and information systems infrastructure costs. These charges, which are part of costs associated with portfolio and
productivity actions, were included in "Sundry income (expense) - net" in the consolidated statements of income and reflected
in Corporate.