DuPont 2012 Annual Report Download - page 62

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(Dollars in millions, except per share)
Account balances and activity for the 2012 restructuring program are summarized below:
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Charges to income in 2012 $69 $157 $ 8 $ 234
Charges to accounts:
Payments —(4)(1) (5)
Net translation adjustment — 1 — 1
Asset write-offs and adjustments (69) — — (69)
Balance as of December 31, 2012 $ — $ 154 $ 7 $ 161
1. Other non-personnel charges consist of contractual obligation costs.
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In 2011, the company initiated a series of actions to achieve the expected cost synergies associated with the Danisco acquisition. As a result, the company
recorded a $53 charge in employee separation/asset related charges, net, primarily for employee separation costs in the U.S. and Europe which reduced
segment earnings as follows: Industrial Biosciences - $9, Nutrition & Health - $14, and Other - $30.
In the fourth quarter 2012, the company recorded a net reduction of $15 in the estimated costs associated with the 2011 restructuring program. This net
reduction was primarily due to lower than estimated individual severance costs and workforce reductions through non-severance programs. The net reduction
impacted segment earnings for the year ended December 31, 2012 as follows: Nutrition & Health - $4 and Other - $11. There were $17 of employee separation
cash payments related to the 2011 restructuring program during 2012. The actions and payments related to the 2011 restructuring program were substantially
complete as of December 31, 2012.
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During 2012, as a result of strategic decisions related to deteriorating conditions within a specific industrial chemicals market, the company determined that
an impairment triggering event had occurred and that an assessment of the asset group related to this industrial chemical was warranted. This assessment
determined that the carrying value of the asset group exceeded its fair value. As a result of the impairment test, a $33 pre-tax impairment charge was recorded
during 2012 within the Performance Chemicals segment.
During 2012, as a result of conditions in the thin film photovoltaic market, the company determined that an impairment triggering event had occurred and that
an assessment of the asset group related to its thin film photovoltaic modules and systems was warranted. This assessment determined that the carrying value
of the asset group exceeded its fair value. As a result of the impairment test, a $150 pre-tax impairment charge was recorded during 2012 within the
Electronics & Communications segment.
During 2012, as a result of deteriorating conditions in an industrial polymer market, the company determined that an impairment triggering event had
occurred and that an assessment of the asset group related to this polymer product was warranted. This assessment determined that the carrying value of the
asset group exceeded its fair value. As a result of the impairment test, a $92 pre-tax impairment charge was recorded during 2012 within the Performance
Materials segment.
The bases of the fair value for the charges above were calculated utilizing a discounted cash flow approach which included assumptions concerning future
operating performance and economic conditions that may differ from actual cash flows. In connection with the matters discussed above, as of December 31,
2012, the company had long-lived assets with a remaining net book value of approximately $150 accounted for at fair value on a nonrecurring basis after
initial recognition. These nonrecurring fair value measurements were determined using level 3 inputs within the fair value hierarchy, as described in Note 1 to
the Consolidated Financial Statements.
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