1000 - Consolidated Statements
1000 - Consolidated Statements of Operations (USD $) | ||||
In Millions, except Share data | 3 Months Ended
Jun. 30, 2009 | 3 Months Ended
Jun. 30, 2008 | 6 Months Ended
Jun. 30, 2009 | 6 Months Ended
Jun. 30, 2008 |
Net Sales | $11,322 | $16,349 | $20,363 | $31,140 |
Cost of sales | 9,764 | 14,621 | 17,902 | 27,505 |
Research and development expenses | 381 | 335 | 673 | 666 |
Selling, general and administrative expenses | 663 | 514 | 1,106 | 1,012 |
Amortization of intangibles | 112 | 25 | 134 | 47 |
Restructuring charges | 662 | 0 | 681 | 0 |
Acquisition-related expenses | 52 | 0 | 100 | 0 |
Equity in earnings of nonconsolidated affiliates | 122 | 251 | 187 | 525 |
Sundry income - net | 23 | 37 | 20 | 83 |
Interest income | 9 | 25 | 21 | 49 |
Interest expense and amortization of debt discount | 525 | 151 | 679 | 296 |
Income (Loss) from Continuing Operations Before Income Taxes | (683) | 1,016 | (684) | 2,271 |
Provision (Credit) for income taxes | (248) | 240 | (273) | 536 |
Net Income (Loss) from Continuing Operations | (435) | 776 | (411) | 1,735 |
Income from discontinued operations, net of income taxes | 103 | 5 | 114 | 11 |
Net Income (Loss) | (332) | 781 | (297) | 1,746 |
Net income attributable to noncontrolling interests | 12 | 19 | 23 | 43 |
Net Income (Loss) Attributable to The Dow Chemical Company | (344) | 762 | (320) | 1,703 |
Preferred stock dividends | 142 | 0 | 142 | 0 |
Net Income (Loss) Available for The Dow Chemical Company Common Stockholders | (486) | 762 | (462) | 1,703 |
Per Common Share Data: | ||||
Net income (loss) from continuing operations available for common stockholders | -0.57 | 0.81 | -0.59 | 1.81 |
Discontinued operations attributable to common stockholders | 0.1 | 0.01 | 0.12 | 0.01 |
Earnings (Loss) per common share - basic | -0.47 | 0.82 | -0.47 | 1.82 |
Net income (loss) from continuing operations available for common stockholders | -0.57 | 0.81 | -0.59 | 1.79 |
Discontinued operations attributable to common stockholders | 0.1 | 0 | 0.12 | 0.01 |
Earnings (Loss) per common share - diluted | -0.47 | 0.81 | -0.47 | 1.8 |
Dividends declared on common stock (Per share: $0.30 in 2009, $0.84 in 2008) | 0.15 | 0.42 | 0.3 | 0.84 |
Weighted-average common shares outstanding - basic | 1026.1 | 929.8 | 975.8 | 936 |
Weighted-average common shares outstanding - diluted | 1035.5 | 939.4 | 983.8 | 945.5 |
Depreciation | 624 | 497 | 1,079 | 992 |
Capital Expenditures | $325 | $597 | $559 | $956 |
2000 - Consolidated Balance She
2000 - Consolidated Balance Sheets (USD $) | ||
In Millions | Jun. 30, 2009
| Dec. 31, 2008
|
Current Assets | ||
Cash and cash equivalents | $2,648 | $2,800 |
Accounts and notes receivable: | ||
Trade (net of allowance for doubtful receivables - 2009: $145; 2008: $124) | 5,531 | 3,782 |
Other | 3,072 | 3,074 |
Inventories | 6,684 | 6,036 |
Deferred income tax assets - current | 448 | 368 |
Total current assets | 18,383 | 16,060 |
Investments | ||
Investment in nonconsolidated affiliates | 3,027 | 3,204 |
Other investments | 2,492 | 2,245 |
Noncurrent receivables | 329 | 276 |
Total investments | 5,848 | 5,725 |
Property | ||
Property | 51,673 | 48,391 |
Accumulated depreciation | 34,296 | 34,097 |
Net property | 17,377 | 14,294 |
Other Assets | ||
Goodwill | 13,248 | 3,394 |
Other intangible assets (net of accumulated amortization - 2009: $995; 2008: $825) | 5,296 | 829 |
Deferred income tax assets - noncurrent | 2,362 | 3,900 |
Asbestos-related insurance receivables - noncurrent | 627 | 658 |
Deferred charges and other assets | 924 | 614 |
Assets held for sale | 2,103 | 0 |
Total other assets | 24,560 | 9,395 |
Total Assets | 66,168 | 45,474 |
Current Liabilities | ||
Notes payable | 695 | 2,360 |
Long-term debt due within one year | 1,090 | 1,454 |
Accounts payable: | ||
Trade | 3,394 | 3,306 |
Other | 2,038 | 2,227 |
Income taxes payable | 125 | 637 |
Deferred income tax liabilities - current | 93 | 88 |
Dividends payable | 274 | 411 |
Accrued and other current liabilities | 3,418 | 2,625 |
Total current liabilities | 11,127 | 13,108 |
Long-Term Debt | 21,983 | 8,042 |
Other Noncurrent Liabilities | ||
Deferred income tax liabilities - noncurrent | 1,446 | 746 |
Pension and other postretirement benefits - noncurrent | 6,620 | 5,466 |
Asbestos-related liabilities - noncurrent | 793 | 824 |
Other noncurrent obligations | 3,411 | 3,208 |
Liabilities held for sale | 565 | 0 |
Total other noncurrent liabilities | 12,835 | 10,244 |
Preferred Securities of Subsidiaries | 0 | 500 |
Stockholders' Equity | ||
Preferred stock, series A ($1.00 par, $1,000 liquidation preference, 4,000,000 shares) | 4,000 | 0 |
Common stock | 2,906 | 2,453 |
Additional paid-in capital | 2,010 | 872 |
Retained earnings | 16,242 | 17,013 |
Accumulated other comprehensive loss | (4,047) | (4,389) |
Unearned ESOP Shares | (541) | 0 |
Treasury stock at cost | (851) | (2,438) |
The Dow Chemical Company's Stockholders' Equity | 19,719 | 13,511 |
Noncontrolling interests | 504 | 69 |
Total Equity | 20,223 | 13,580 |
Total Liabilities and Equity | $66,168 | $45,474 |
2010 - Parenthetical Data For C
2010 - Parenthetical Data For Consolidated Balance Sheets (USD $) | ||
In Millions, except Share data | Jun. 30, 2009
| Dec. 31, 2008
|
Assets | ||
Trade (net of allowance for doubtful receivables - 2009: $145; 2008: $124) | ($145) | ($124) |
Other intangible assets (net of accumulated amortization - 2009: $995; 2008: $825) | ($995) | ($825) |
Stockholders' Equity | ||
Preferred stock, series A ($1.00 par, $1,000 liquidation preference, 4,000,000 shares) | 1 | 0 |
Preferred stock, series A ($1.00 par, $1,000 liquidation preference, 4,000,000 shares) | 1,000 | 0 |
Preferred stock, series A ($1.00 par, $1,000 liquidation preference, 4,000,000 shares) | 4,000,000 | 0 |
3000 - Consolidated Statements
3000 - Consolidated Statements of Cash Flows (USD $) | ||
In Millions | 6 Months Ended
Jun. 30, 2009 | 6 Months Ended
Jun. 30, 2008 |
Operating Activities | ||
Net Income (Loss) | ($297) | $1,746 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 1,271 | 1,143 |
Provision (Credit) for deferred income tax | (486) | 137 |
Earnings of nonconsolidated affiliates less than dividends received | 430 | 89 |
Pension contributions | (127) | (79) |
Net loss (gain) on sales of consolidated companies | 7 | (26) |
Net gain on sales of investments | (8) | (26) |
Net gain on sales of property and businesses | (189) | (28) |
Other net loss (gain) | 13 | (18) |
Restructuring charges | 676 | 0 |
Excess tax benefits from share-based payment arrangements | 0 | (2) |
Changes in assets and liabilities, net of effects of acquired and divested companies: | ||
Accounts and notes receivable | (949) | (1,489) |
Inventories | 357 | (847) |
Accounts payable | (552) | 1,169 |
Other assets and liabilities | (83) | (353) |
Cash provided by operating activities | 63 | 1,416 |
Investing Activities | ||
Capital expenditures | (559) | (956) |
Proceeds from sales of property, businesses and consolidated companies | 265 | 149 |
Purchase of previously leased assets | 0 | (63) |
Investments in consolidated companies, net of cash acquired | (14,834) | (231) |
Investments in nonconsolidated affiliates | (41) | (116) |
Distributions from nonconsolidated affiliates | 5 | 4 |
Purchase of unallocated Rohm and Haas ESOP shares | (552) | 0 |
Purchases of investments | (230) | (511) |
Proceeds from sales and maturities of investments | 317 | 500 |
Cash used in investing activities | (15,629) | (1,224) |
Financing Activities | ||
Changes in short-term notes payable | (1,801) | 738 |
Proceeds from revolving credit facility | 3,000 | 0 |
Payments on revolving credit facility | (2,100) | 0 |
Proceeds from Term Loan | 9,226 | 0 |
Payments on Term Loan | (5,089) | 0 |
Proceeds from issuance of long-term debt | 5,160 | 981 |
Payments on long-term debt | (618) | (80) |
Purchases of treasury stock | (5) | (804) |
Proceeds from issuance of common stock | 966 | 0 |
Proceeds from issuance of preferred stock | 7,000 | 0 |
Proceeds from sales of common stock | 553 | 53 |
Issuance costs for debt and equity securities | (368) | 0 |
Excess tax benefits from share-based payment arrangements | 0 | 2 |
Distributions to noncontrolling interests | (24) | (24) |
Dividends paid to stockholders | (527) | (786) |
Cash provided by financing activities | 15,373 | 80 |
Effect of Exchange Rate Changes on Cash | 41 | 103 |
Summary | ||
Increase (Decrease) in cash and cash equivalents | (152) | 375 |
Cash and cash equivalents at beginning of year | 2,800 | 1,736 |
Cash and cash equivalents at end of period | $2,648 | $2,111 |
4000 - Consolidated Statements
4000 - Consolidated Statements of Equity (USD $) | ||||||
In Millions | 3 Months Ended
Jun. 30, 2009 | 3 Months Ended
Jun. 30, 2008 | 6 Months Ended
Jun. 30, 2009 | 6 Months Ended
Jun. 30, 2008 | Dec. 31, 2008
| Dec. 31, 2007
|
Preferred Stock | ||||||
Balance at beginning of year | $0 | $0 | ||||
Preferred stock issued | 7,000 | 0 | ||||
Preferred stock repurchased | (2,500) | 0 | ||||
Preferred stock converted to common stock | (500) | 0 | ||||
Balance at end of period | 4,000 | 0 | 4,000 | 0 | 0 | 0 |
Common Stock | ||||||
Balance at beginning of year | 2,453 | 2,453 | ||||
Common stock issued | 453 | 0 | ||||
Balance at end of period | 2,906 | 2,453 | 2,906 | 2,453 | 2,453 | 2,453 |
Additional Paid-in Capital | ||||||
Balance at beginning of year | 872 | 902 | ||||
Common stock issued | 2,655 | 0 | ||||
Sale of shares to ESOP | (1,529) | 0 | ||||
Stock-based compensation and allocation of ESOP shares | 12 | (98) | ||||
Balance at end of period | 2,010 | 804 | 2,010 | 804 | 872 | 902 |
Retained Earnings | ||||||
Balance at beginning of year | 17,013 | 18,004 | ||||
Net income (loss) available for The Dow Chemical Company common stockholders | (486) | 762 | (462) | 1,703 | ||
Dividends declared on common stock (Per share: $0.30 in 2009, $0.84 in 2008) | (305) | (779) | ||||
Other | (4) | (9) | ||||
Balance at end of period | 16,242 | 18,919 | 16,242 | 18,919 | 17,013 | 18,004 |
Accumulated Other Comprehensive Income (Loss), Net of Tax | ||||||
Unrealized Gains (Losses) on Investments at beginning of year | (111) | 71 | ||||
Net change in unrealized gains (losses) | 75 | (55) | 51 | (84) | ||
Balance at end of period | (60) | (13) | (60) | (13) | (111) | 71 |
Cumulative Translation Adjustments at beginning of year | 221 | 723 | ||||
Translation adjustments | 482 | (33) | 98 | 540 | ||
Balance at end of period | 319 | 1,263 | 319 | 1,263 | 221 | 723 |
Pension and Other Postretirement Benefit Plans at beginning of year | (4,251) | (989) | ||||
Adjustments to pension and other postretirement benefit plans | 34 | 3 | 39 | 17 | ||
Balance at end of period | (4,212) | (972) | (4,212) | (972) | (4,251) | (989) |
Accumulated Derivative Gain (Loss) at beginning of year | (248) | 25 | ||||
Net hedging results | (68) | 83 | ||||
Reclassification to earnings | 222 | (12) | ||||
Balance at end of period | (94) | 96 | (94) | 96 | (248) | 25 |
Total accumulated other comprehensive income (loss) | (4,047) | 374 | (4,389) | |||
Unearned ESOP Shares | ||||||
Balance at beginning of year | 0 | 0 | ||||
Shares acquired | (553) | 0 | ||||
Shares allocated to ESOP participants | 12 | 0 | ||||
Balance at end of period | (541) | 0 | (541) | 0 | 0 | 0 |
Treasury Stock | ||||||
Balance at beginning of year | (2,438) | (1,800) | ||||
Purchases | (5) | (846) | ||||
Sale of shares to ESOP | 1,529 | 0 | ||||
Issuance to employees and employee plans | 63 | 229 | ||||
Balance at end of period | (851) | (2,417) | (851) | (2,417) | (2,438) | (1,800) |
The Dow Chemical Company's Stockholders' Equity | 19,719 | 20,133 | 13,511 | |||
Noncontrolling Interests | ||||||
Balance at beginning of year | 69 | 414 | ||||
Net income attributable to noncontrolling interests | 12 | 19 | 23 | 43 | ||
Purchase of noncontrolling interest's share of subsidiary | 0 | (200) | ||||
Acquisition of Rohm and Haas Company noncontrolling interests | 432 | 0 | ||||
Other | (20) | (20) | ||||
Balance at end of period | 504 | 237 | 504 | 237 | 69 | 414 |
Total Equity | $20,223 | $20,370 | $13,580 |
4010 - Parenthetical Data For C
4010 - Parenthetical Data For Consolidated Statements of Equity (USD $) | ||||
3 Months Ended
Jun. 30, 2009 | 3 Months Ended
Jun. 30, 2008 | 6 Months Ended
Jun. 30, 2009 | 6 Months Ended
Jun. 30, 2008 | |
Retained Earnings | ||||
Dividends declared on common stock (Per share: $0.30 in 2009, $0.84 in 2008) | 0.15 | 0.42 | 0.3 | 0.84 |
5000 - Consolidated Statements
5000 - Consolidated Statements of Comprehensive Income (USD $) | ||||
In Millions | 3 Months Ended
Jun. 30, 2009 | 3 Months Ended
Jun. 30, 2008 | 6 Months Ended
Jun. 30, 2009 | 6 Months Ended
Jun. 30, 2008 |
Net Income (Loss) | ($332) | $781 | ($297) | $1,746 |
Other Comprehensive Income (Loss), Net of Tax | ||||
Net unrealized gains (losses) on investments | 75 | (55) | 51 | (84) |
Translation adjustments | 482 | (33) | 98 | 540 |
Adjustments to pension and other postretirement benefit plans | 34 | 3 | 39 | 17 |
Net gains on cash flow hedging derivative instruments | 36 | 44 | 154 | 71 |
Total other comprehensive income (loss) | 627 | (41) | 342 | 544 |
Comprehensive Income | 295 | 740 | 45 | 2,290 |
Comprehensive income attributable to noncontrolling interests, net of tax | 12 | 19 | 23 | 43 |
Comprehensive Income Attributable to The Dow Chemical Company | $283 | $721 | $22 | $2,247 |
6000 - Consolidated Financial S
6000 - Consolidated Financial Statements | |
6 Months Ended
Jun. 30, 2009 | |
Consolidated Financial Statements | |
Significant Accounting Policies [Text Block] | NOTE A CONSOLIDATED FINANCIAL STATEMENTS The unaudited interim consolidated financial statements of The Dow Chemical Company and its subsidiaries (Dow or the Company) were prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) and reflect all adjustments (including normal recurring accruals) which, in the opinion of management, are considered necessary for the fair presentation of the results for the periods presented. These statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Companys Annual Report on Form 10-K for the year ended December31, 2008. |
6010 - Recent Accounting Pronou
6010 - Recent Accounting Pronouncements | |
6 Months Ended
Jun. 30, 2009 | |
Recent Accounting Pronouncements | |
Note - Recent Accounting Pronouncements | NOTE B RECENT ACCOUNTING PRONOUNCEMENTS Accounting for Noncontrolling Interests In December2007, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No.160, Noncontrolling Interests in Consolidated Financial Statements - an amendment of ARB No.51. The Statement established accounting and reporting standards for noncontrolling interests in a subsidiary and for deconsolidation of a subsidiary. The Statement was effective January 1, 2009 for the Company. The retrospective presentation and disclosure requirements outlined by SFAS No.160 have been incorporated into this Quarterly Report on Form 10-Q for the interim period ended June30, 2009. The implementation of SFAS No.160 revised all previous references to minority interests in the consolidated financial statements to noncontrolling interests, and resulted in the following changes: The Consolidated Statements of Operations now present Net Income (Loss), which includes Net income attributable to noncontrolling interests and Net Income (Loss) Attributable to The Dow Chemical Company. Net Income (Loss) Available for The Dow Chemical Company Common Stockholders is equivalent to the previously reported Net Income Available for Common Stockholders. No change was required to the presentation of earnings per share by SFAS No.160. The Consolidated Balance Sheets now present Noncontrolling interests as a component of Total equity. Noncontrolling interests is equivalent to the previously reported Minority Interest in Subsidiaries. The Dow Chemical Companys stockholders equity is equivalent to the previously reported Net stockholders equity. The Consolidated Statements of Comprehensive Income now present Comprehensive Income, which includes Comprehensive income attributable to noncontrolling interests and Comprehensive Income Attributable to The Dow Chemical Company. Comprehensive Income Attributable to The Dow Chemical Company is equivalent to the previously reported Comprehensive Income. The Consolidated Statements of Cash Flows now begin with Net Income (Loss) instead of Net Income Available for Common Stockholders. Interim Consolidated Statements of Equity have been added to fulfill the disclosure requirements of SFAS No.160. Other Accounting Pronouncements In February2008, the FASB issued FASB Staff Position (FSP) No. FAS157-2, Effective Date of FASB Statement No.157, which delayed the effective date of SFAS No.157, Fair Value Measurements, for nonfinancial assets and nonfinancial liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis, to fiscal years beginning after November15, 2008. On January1, 2009, the Company adopted SFAS No.157 for these assets and liabilities. Since the Companys fair value measurements for nonfinancial assets and nonfinancial liabilities were consistent with the guidance of the Statement, the adoption of the Statement did not have a material impact on the Companys consolidated financial statements. The Companys enhanced disclosures are included in NoteI. In March2008, the FASB issued SFAS No.161, Disclosures about Derivative Instrume |
6020 - Restructuring
6020 - Restructuring | |
6 Months Ended
Jun. 30, 2009 | |
Restructuring | |
Note - Restructuring | NOTE C RESTRUCTURING 2009 Restructuring On June 30, 2009, the Companys Board of Directors approved a restructuring plan related to the Companys acquisition of Rohm and Haas Company (Rohm and Haas) as well as actions to advance the Companys strategy and to respond to continued weakness in the global economy. The restructuring plan includes the elimination of approximately 2,500 positions primarily resulting from synergies achieved as a result of the acquisition of Rohm and Haas. In addition, the Company will shut down a number of manufacturing facilities. These actions are expected to be completed primarily during the next twoyears. As a result of the restructuring activities, the Company recorded pretax restructuring charges of $677million, consisting of asset write-downs and write-offs of $454million, costs associated with exit or disposal activities of $68million and severance costs of $155million. The impact of the charges is shown as Restructuring charges in the consolidated statements of operations and was reflected in the Companys segment results as shown in the following table, which also reflects adjustments made in 2009 to the 2008 and 2007 restructuring charges, as discussed in the sections titled 2008 Restructuring and 2007 Restructuring. 2009 Restructuring Charges by Operating Segment In millions Impairment of Long-Lived Assets and Other Assets Costs associated with Exit or Disposal Activities Severance Costs Total Electronic and Specialty Materials $ 68 - - $ 68 Coatings and Infrastructure 167 $ 4 - 171 Performance Products 73 - - 73 Basic Plastics 1 - - 1 Basic Chemicals 75 - - 75 Hydrocarbons and Energy 65 - - 65 Corporate 5 64 $ 155 224 Total 2009 restructuring charges $ 454 $ 68 $ 155 $ 677 Adjustments to 2008 restructuring: Corporate - - 19 19 Adjustments to 2007 restructuring: Health and Agricultural Sciences - (15 ) - (15 ) Net 2009 restructuring charges $ 454 $ 53 $ 174 $ 681 Details regarding the components of the 2009 restructuring charges are discussed below: Impairment of Long-Lived Assets and Other Assets The restructuring charges related to the write-down or write-off of assets in the second quarter of 2009 totaled $454million. Write-downs were related to Dows facilities located in Hahnville and Plaquemine, Louisiana, the United States Federal Trade Commission (FTC) required divestiture of certain acrylic monomer and specialty latex assets in North America and other small manufacturing facilities where the combination of Dow and Rohm and Haas resulted in overlapping manufacturing capabilities. Details regarding these write-downs or write-offs are as follows: Due to continued weakness in the global economy, the decision was made to shut down a number of hydrocarbon and basic chemicals facilities, with an impact of $126million, including the following: Ethylene manufacturing facility in Hahnville, Louisiana. A write-off of the net book value of the related buildings, machinery and equipment against the Hydrocarbons an |
6030 - Acquisitions
6030 - Acquisitions | |
6 Months Ended
Jun. 30, 2009 | |
Acquisitions | |
Note - Acquisitions | NOTE D ACQUISITIONS Acquisition of Rohm and Haas On April1, 2009, the Company completed the acquisition of Rohm and Haas. Pursuant to the July10, 2008 Agreement and Plan of Merger (the Merger Agreement), Ramses Acquisition Corp., a direct wholly owned subsidiary of the Company, merged with and into Rohm and Haas (the Merger), with Rohm and Haas continuing as the survivingcorporation and becoming a direct wholly owned subsidiary of the Company. The Company pursued the acquisition of Rohm and Haas to make the Company a leading specialty chemicals and advanced materials company, combining the two organizations best-in-class technologies, broad geographic reach and strong industry channels to create a business portfolio with significant growth opportunities. The acquisition of Rohm and Haas was accounted for under Statement of Financial Accounting Standards No.141 (revised 2007), Business Combinations (SFAS141R). Pursuant to the terms and conditions of the Merger Agreement, each outstanding share of Rohm and Haas common stock was converted into the right to receive cash of $78per share, plus additional cash consideration of $0.97 per share. The additional cash consideration represented 8percent per annum on the $78per share consideration from January10, 2009 to the closing of the Merger, less dividends declared by Rohm and Haas with a dividend record date between January10, 2009 and the closing of the Merger. All options to purchase shares of common stock of Rohm and Haas granted under the Rohm and Haas stock option plans and all other Rohm and Haas equity-based compensation awards, whether vested or unvested as of April1, 2009, became fully vested and converted into the right to receive cash of $78.97per share, less any applicable exercise price. Total cash consideration paid to Rohm and Haas shareholders was $15,681million. As part of the purchase price, $552million in cash was paid to the Rohm and Haas Company Employee Stock Ownership Plan (Rohm and Haas ESOP) on April1, 2009 for 7.0million shares of Rohm and Haas common stock held by the Rohm and Haas ESOP. As a condition of the FTCs approval of the Merger, the Company is required to divest a portion of its acrylic monomer business, a portion of its specialty latex business and its hollow sphere particle business within eight months of the closing of the Merger. Total net sales and cost of sales for these businesses amounted to approximately one percent of the Companys 2008 net sales and cost of sales. Following is the amount of net sales and earnings from the Rohm and Haas acquired businesses included in the Companys results since the April1, 2009 acquisition. Included in the results from Rohm and Haas was $257million of restructuring charges (see NoteC for information regarding the Companys 2009 restructuring activities) and a one-time increase in cost of sales of $209million related to the fair value step-up of inventories acquired from Rohm and Haas and sold in the second quarter of 2009. Rohm and Haas Results of Operations In millions April1 - June30, 2009 Net sales $ 1,849 Loss from Continuing Operations Before Income Taxes $ (339 ) The following tab |
6040 - Inventories
6040 - Inventories | |
6 Months Ended
Jun. 30, 2009 | |
Inventories | |
Note - Inventories | NOTE F INVENTORIES The following table provides a breakdown of inventories: Inventories In millions June 30, 2009 Dec. 31, 2008 Finished goods $ 3,596 $ 3,351 Work in process 1,656 1,217 Raw materials 745 830 Supplies 687 638 Total inventories $ 6,684 $ 6,036 The reserves reducing inventories from the first-in, first-out (FIFO) basis to the last-in, first-out (LIFO) basis amounted to $515million at June 30, 2009 and $627million at December31, 2008. |
6050 - Goodwill and Other Intan
6050 - Goodwill and Other Intangible Assets | |
6 Months Ended
Jun. 30, 2009 | |
Note - Goodwill and Other Intangible Assets | NOTE G GOODWILL AND OTHER INTANGIBLE ASSETS The following table shows the carrying amount of goodwill by operating segment: Goodwill In millions Electronic and Specialty Materials Coatings and Infrastructure Health and Ag Sciences Perf Systems Perf Products Basic Plastics Hydrocarbons and Energy Total Balance at Dec. 31, 2008 $ 785 $ 91 $ 1,391 $ 572 $ 427 $ 65 $ 63 $ 3,394 Goodwill related to 2009 acquisition of Rohm and Haas 3,806 5,061 188 385 412 - - 9,852 Adjustment related to 2008 acquisition of: Dairyland Seed Co., Inc. - - (1 ) - - - - (1 ) Stevens Roofing Systems - 3 - - - - - 3 Balance at June 30, 2009 $ 4,591 $ 5,155 $ 1,578 $ 957 $ 839 $ 65 $ 63 $ 13,248 The recording of the April1, 2009 acquisition of Rohm and Haas (see NoteD) resulted in goodwill of $9,852million, which is not deductible for tax purposes. Intangible assets acquired with the acquisition amounted to $4,475million as shown below: Rohm and Haas Intangible Assets In millions Gross Carrying Amount Weighted-average Amortization Period Intangible assets with finite lives: Licenses and intellectual property $ 1,368 10 years Software 73 5 years Trademarks 482 10 years Customer related 2,478 16 years Total intangible assets, finite lives $ 4,401 10 years In-process RD, indefinite lives 74 - Total intangible assets $ 4,475 Goodwill Impairments During the fourth quarter of 2008, the Company recorded an estimated goodwill impairment loss of $209million for the Dow Automotive reporting unit. As required by SFAS No.142, Goodwill and Other Intangible Assets, the second step of goodwill impairment testing to determine the implied fair value of goodwill for the Dow Automotive reporting unit was finalized in the first quarter of 2009. No adjustment was required to be made to the estimated impairment loss based on completion of the allocation process. The following table provides information regarding the Companys other intangible assets: Other Intangible Assets At June 30, 2009 At December 31, 2008 In millions Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net Intangible assets with finite lives: Licenses and intellectual property $ 1,677 $ (237 ) $ 1,440 $ 316 $ (192 ) $ 124 Patents 140 (104 ) 36 139 (100 ) 39 Software 813 (395 ) 418 700 (363 ) 337 Trademarks 654 (78 ) 576 169 (61 ) 108 Customer related 2,798 (124 ) 2,674 210 (66 ) 144 Other 133 (57 ) 76 120 (43 ) 77 Total intangible assets, finite lives $ 6,215 $ (995 ) $ 5,220 $ 1,654 $ (825 ) $ 829 In-process RD, indefinite lives 76 - 76 - - - Total intangible assets $ 6,291 $ (995 ) $ 5,296 $ 1,654 $ (825 ) $ 829 The following table provides information regarding amortization expense: |
6060 - Financial Instruments
6060 - Financial Instruments | |
6 Months Ended
Jun. 30, 2009 | |
Financial Instruments | |
Note - Financial Instruments | NOTE H FINANCIAL INSTRUMENTS Investments The Companys investments in marketable securities are primarily classified as available-for-sale. The unrealized gains recognized during the six-month reporting period ended June30, 2009, on trading securities still held at June30, 2009 were $3 million. Investing Results In millions Six Months Ended June30, 2009 Proceeds from sales of available-for-sale securities $ 210 Gross realized gains $ 4 Gross realized losses $ (16 ) The following table summarizes the contractual maturities of the Companys investments in debt securities: Contractual Maturities of Debt Securities at June30, 2009 In millions Amortized Cost Fair Value Within one year $ 54 $ 54 One to five years 599 624 Six to ten years 619 651 After ten years 303 307 Total $ 1,575 $ 1,636 At June30, 2009 and December31, 2008, the Company also had $650million and $250million of held-to-maturity securities (primarily Treasury bills) classified as cash equivalents, as these securities have original maturities of three months or less. The Companys investments in held to maturity securities are held at amortized cost, which approximates fair value. The following tables provide the fair value and gross unrealized losses of the Companys investments that were deemed to be temporarily impaired at June30, 2009 and December31, 2008, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position: Temporarily Impaired Securities at June30, 2009 Less than 12 months 12 months or more Total In millions Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Debt securities: U.S. Treasury obligations and direct obligations of U.S. government agencies $ 56 $ (1 ) - - $ 56 $ (1 ) Corporate bonds 140 (6 ) $ 33 (4 ) 173 (10 ) Other - - 1 - 1 - Total debt securities $ 196 $ (7 ) $ 34 $ (4 ) $ 230 $ (11 ) Equity securities 142 (42 ) 123 (55 ) 265 (97 ) Total temporarily impaired securities $ 338 $ (49 ) $ 157 $ (59 ) $ 495 $ (108 ) Temporarily Impaired Securities at December31, 2008 Less than 12 months 12 months or more Total In millions Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Debt securities: U.S. Treasury obligations and direct obligations of U.S. government agencies $ 14 - - - $ 14 - Corporate bonds 388 $ (35 ) $ 8 $ (1 ) 396 $ (36 ) Other 4 - 2 - 6 - Total debt securities $ 406 $ (35 ) $ 10 $ (1 ) $ 416 $ (36 ) Equity securities 268 (152 ) 37 (25 ) 305 (177 ) Total temporarily impaired securities $ 674 $ (187 ) $ 47 $ (26 ) $ 721 $ (213 ) Portfolio managers regularly review all of the Companys holdings to determine if any investments are other-than-temporarily impaired. |
6070 - Fair Value Measurements
6070 - Fair Value Measurements | |
6 Months Ended
Jun. 30, 2009 | |
Fair Value Measurements | |
Note - Fair Value Measurements | NOTE I FAIR VALUE MEASUREMENTS The following table summarizes the bases used to measure certain assets and liabilities at fair value on a recurring basis in the consolidated balance sheets: Basis of Fair Value Measurements on a Recurring Basis at June 30, 2009 In millions Quoted Prices in Active Markets for Identical Items (Level 1) Significant Other Observable Inputs (Level 2) Counterparty and Cash Collateral Netting (1) Total Assets at fair value: Equity securities (2) $ 393 $ 26 - $ 419 Debt securities (2) - 1,636 - 1,636 Derivatives relating to: (3) Foreign currency - 157 $ (95 ) 62 Commodities - 60 (38 ) 22 Total assets at fair value $ 393 $ 1,879 $ (133 ) $ 2,139 Liabilities at fair value: Derivatives relating to: (3) Foreign currency - $ 218 $ (95 ) $ 123 Commodities - 106 (38 ) 68 Total liabilities at fair value - $ 324 $ (133 ) $ 191 (1) Cash collateral is classified as Accounts and notes receivable Other in the consolidated balance sheets. Amounts represent the effect of legally enforceable master netting arrangements between the Company and its counterparties and the payable or receivable for cash collateral held or placed with the same counterparty. (2) The Companys investments in equity and debt securities are primarily classified as available-for-sale, and are included in Other investments in the consolidated balance sheets. (3) See NoteH for the classification of derivatives in the consolidated balance sheets. For assets and liabilities classified as Level1 (measured using quoted prices in active markets), the total fair value is either the price of the most recent trade at the time of the market close or the official close price as defined by the exchange in which the asset is most actively traded on the last trading day of the period, multiplied by the number of units held without consideration of transaction costs. For Level2 assets and liabilities, the fair value is based on the price a dealer would pay for the security or similar securities, adjusted for any terms specific to that asset or liability. Market inputs are obtained from well-established and recognized vendors of market data and placed through tolerance/quality checks. For derivative assets and liabilities, the fair value is calculated using standard industry models used to calculate the fair value of the various financial instruments based on significant observable market inputs such as foreign exchange rates, commodity prices, swap rates, interest rates, and implied volatilities obtained from various market sources. For all other assets and liabilities for which observable inputs are used, fair value is derived through the use of fair value models, such as a discounted cash flow model or other standard pricing models. See NoteH for further information on the types of instruments used by the Company for risk management. Assets and liabilities related to forward contracts, interest rate swaps, currency swaps, options and other conditional or excha |
6080 - Commitments and Continge
6080 - Commitments and Contingent Liabilities | |
6 Months Ended
Jun. 30, 2009 | |
Commitments and Contingent Liabilities | |
Note - Commitments and Contingent Liabilities | NOTE J COMMITMENTS AND CONTINGENT LIABILITIES Litigation Breast Implant Matters On May 15, 1995, Dow Corning Corporation (Dow Corning), in which the Company is a 50percent shareholder, voluntarily filed for protection under Chapter 11 of the Bankruptcy Code to resolve litigation related to Dow Cornings breast implant and other silicone medical products. On June 1, 2004, Dow Cornings Joint Plan of Reorganization (the Joint Plan) became effective and Dow Corning emerged from bankruptcy. The Joint Plan contains release and injunction provisions resolving all tort claims brought against various entities, including the Company, involving Dow Cornings breast implant and other silicone medical products. To the extent not previously resolved in state court actions, cases involving Dow Cornings breast implant and other silicone medical products filed against the Company were transferred to the U.S. District Court for the Eastern District of Michigan (the District Court) for resolution in the context of the Joint Plan. On October 6, 2005, all such cases then pending in the District Court against the Company were dismissed. Should cases involving Dow Cornings breast implant and other silicone medical products be filed against the Company in the future, they will be accorded similar treatment. It is the opinion of the Companys management that the possibility is remote that a resolution of all future cases will have a material adverse impact on the Companys consolidated financial statements. As part of the Joint Plan, Dow and Corning Incorporated agreed to provide a credit facility to Dow Corning in an aggregate amount of $300million, which was reduced to $250million effective June1, 2009. The Companys share of the credit facility was originally $150million, but was reduced to $125million effective June1, 2009, and is subject to the terms and conditions stated in the Joint Plan. At June30, 2009, no draws had been taken against the credit facility. DBCP Matters Numerous lawsuits have been brought against the Company and other chemical companies, both inside and outside of the United States, alleging that the manufacture, distribution or use of pesticides containing dibromochloropropane (DBCP) has caused personal injury and property damage, including contamination of groundwater. It is the opinion of the Companys management that the possibility is remote that the resolution of such lawsuits will have a material adverse impact on the Companys consolidated financial statements. Environmental Matters Accruals for environmental matters are recorded when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated, based on current law and existing technologies. At June30, 2009, the Company had accrued obligations of $537million for environmental remediation and restoration costs, including $88million for the remediation of Superfund sites. The $537million balance includes $159million of environmental liabilities assumed from Rohm and Haas on April1, 2009 (see NoteD).This is managements best estimate of the costs for remediation and restoration with respect to environmental matters for which the |
Term Debt
Term Debt | |
6 Months Ended
Jun. 30, 2009 | |
Long-Term Debt | |
Note - Long-Term Debt | NOTE K NOTES PAYABLE, LONG-TERM DEBT AND AVAILABLE CREDIT FACILITIES Notes Payable In millions June30, 2009 Dec.31, 2008 Commercial paper $ 107 $ 1,597 Notes payable to banks 473 661 Notes payable to related companies 113 102 Trade notes payable 2 - Total notes payable $ 695 $ 2,360 Period-end average interest rates 3.57 % 4.04 % Long-Term Debt In millions 2009 Average Rate June30, 2009 2008 Average Rate Dec.31, 2008 Promissory notes and debentures: Final maturity 2009 8.61 % $ 146 6.76 % $ 682 Final maturity 2010 9.14 % 275 9.14 % 275 Final maturity 2011 3.16 % 1,705 6.13 % 806 Final maturity 2012 6.00 % 907 6.00 % 907 Final maturity 2013 6.05 % 389 6.85 % 139 Final maturity 2014 and thereafter 7.89 % 10,633 7.05 % 2,682 Other facilities: Term Loan 3.82 % 4,137 - - U.S. dollar loans, various rates and maturities 2.40 % 715 2.43 % 700 Foreign currency loans, various rates and maturities 3.47 % 1,003 3.23 % 73 Medium-term notes, varying maturities through 2022 6.55 % 1,323 6.25 % 1,072 Foreign medium-term notes, various rates and maturities 4.13 % 1 4.13 % 1 Foreign medium-term notes, final maturity 2010, Euro 4.37 % 563 4.37 % 561 Foreign medium-term notes, final maturity 2011, Euro 4.63 % 695 4.63 % 690 Pollution control/industrial revenue bonds, varying maturities through 2033 5.97 % 1,114 5.61 % 904 Capital lease obligations - 44 - 46 Unamortized debt discount - (551 ) - (15 ) Unexpended construction funds - (26 ) - (27 ) Long-term debt due within one year - (1,090 ) - (1,454 ) Total long-term debt - $ 21,983 - $ 8,042 Annual Installments on Long-Term Debt for Next Five Years In millions 2009 $ 938 2010 $ 1,123 2011 $ 6,566 2012 $ 1,455 2013 $ 861 2014 $ 2,278 On March9, 2009 the Company borrowed $3billion under its Five Year Competitive Advance and Revolving Credit Facility Agreement, dated April24, 2006; $1.6billion of the funds were repaid on May15, 2009 and $0.5billion of the funds were repaid on June30, 2009. The funds are due in April 2011 and bear interest at a variable LIBOR-plus rate. The Company is using the funds to finance day-to-day operations, to repay indebtedness maturing in the ordinary course of business and for other general corporate purposes. At June30, 2009, the Company had an unused and committed balance of $2.1 billion under the Agreement. Debt financing for the acquisition of Rohm and Haas was provided by a $9,226million draw on a Term Loan Agreement (Term Loan) on April1, 2009. The Term Loan matures on April1, 2010, provided however, that the original maturity date may be extended for an additional year at the option of the Company, for a maximum outstanding balance of $8.0billion. The actual interest rate of the Term Loan and the resulting fees that the Company will ultimately pay for the Term Loan can vary signif |
6100 - Pension Plan and Other P
6100 - Pension Plan and Other Postretirement Benefits | |
6 Months Ended
Jun. 30, 2009 | |
Pension Plan and Other Postretirement Benefits | |
Note - Pension Plan and Other Postretirement Benefits | NOTE L PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS As a result of the April1, 2009 acquisition of Rohm and Haas (see NoteD), the Company assumed sponsorship of qualified and non-qualified pension and postretirement benefit plans that provide defined benefits to U.S. and non-U.S. employees. The Company acquired the following plan assets and obligations from Rohm and Haas: Plan Assets and Obligations Acquired from Rohm and Haas on April1, 2009 In millions Defined Benefit Pension Plans Other Postretirement Benefits Fair value of plan assets $ 1,439 $ 18 Projected benefit obligation $ 2,168 $ 338 The plan assets of the acquired defined benefit pension plans, consisting primarily of equity and debt securities, were measured at market value. The asset allocation by asset category was as follows: Weighted-Average Allocation of Rohm and Haas Pension Plan Assets on April 1, 2009 Equity securities 44 % Debt securities 32 % Real estate 10 % Insurance contracts 6 % Alternative investments (1) 8 % Total 100 % (1) Including hedge funds and other investments. The weighted-average expected long-term rate of return on plan assets used to calculate net periodic benefit cost for the period April1, 2009 through December31, 2009 is 8.02percent for defined benefit pension plans and 8.50percent for other postretirement benefits. The weighted-average assumptions used to determine pension plan obligations and other postretirement benefit obligations for the acquired plans on April1, 2009 were as follows: Weighted-Average Assumptions for All Plans Acquired from Rohm and Haas Defined Benefit Pension Plans Other Postretirement Benefits Discount rate 7.72 % 7.86 % Rate of increase in future compensation levels 3.88 % - Initial health care cost trend rate - 9.70 % Ultimate health care cost trend rate - 6.00 % Year ultimate trend rate to be reached - 2018 The net periodic benefit cost for all significant plans of the consolidated Company was as follows: Net Periodic Benefit Cost for All Significant Plans Three Months Ended Six Months Ended In millions June 30, 2009 June 30, 2008 June 30, 2009 June 30, 2008 Defined Benefit Pension Plans: Service cost $ 70 $ 68 $ 128 $ 135 Interest cost 280 243 518 484 Expected return on plan assets (321 ) (311 ) (609 ) (621 ) Amortization of prior service cost 8 8 16 16 Amortization of net loss 26 12 52 23 Net periodic benefit cost $ 63 $ 20 $ 105 $ 37 Other Postretirement Benefits: Service cost $ 5 $ 5 $ 9 $ 9 Interest cost 36 29 65 59 Expected return on plan assets (4 ) (7 ) (8 ) (14 ) Amortization of prior service credit (1 ) (1 ) (2 ) (2 ) Net periodic benefit cost $ 36 $ 26 $ 64 $ 52 |
Based Compensation
Based Compensation | |
6 Months Ended
Jun. 30, 2009 | |
Stock-Based Compensation | |
Note - Stock-Based Compensation | NOTE M STOCK-BASED COMPENSATION The Company grants stock-based compensation to employees under the Employees Stock Purchase Plan (ESPP) and the 1988 Award and Option Plan (the 1988 Plan) and to non-employee directors under the 2003 Non-Employee Directors Stock Incentive Plan. During the first half of 2009, employees subscribed to the right to purchase 10.5million shares with a weighted-average exercise price of $20.81per share and a weighted-average fair value of $1.00per share under the ESPP. During the first half of 2009, the Company granted the following stock-based compensation awards to employees under the 1988 Plan: 11.4million stock options with a weighted-average exercise price of $9.53per share and a weighted-average fair value of $2.60per share. 5.4million shares of deferred stock with a weighted-average fair value of $9.68per share. 1.2million shares of performance deferred stock with a weighted-average fair value of $9.53per share. During the first half of 2009, the Company granted the following stock-based compensation awards to non-employee directors under the 2003 Non-Employee Directors Stock Incentive Plan: 53,600 shares of restricted stock with a weighted-average fair value of $6.47per share. Total unrecognized compensation cost at June30, 2009, including unrecognized cost related to the first half of 2009 activity, is provided in the following table: Total Unrecognized Compensation Cost at June 30, 2009 In millions Unrecognized Compensation Cost Weighted-average Recognition Period ESPP purchase rights $ 5 3.5 months Unvested stock options $ 42 0.69 year Deferred stock awards $ 100 0.93 year Performance deferred stock awards $ 12 0.53 year |
6120 - Earnings Per Share Calcu
6120 - Earnings Per Share Calculations | |
6 Months Ended
Jun. 30, 2009 | |
Earnings Per Share Calculations | |
Note - Earnings Per Share Calculations | NOTE Q EARNINGS PER SHARE CALCULATIONS Net Income Three Months Ended Six Months Ended In millions June 30, 2009 June 30, 2008 June 30, 2009 June 30, 2008 Income (Loss) from continuing operations $ (435 ) $ 776 $ (411 ) $ 1,735 Income from discontinued operations, net of income taxes 103 5 114 11 Net income attributable to noncontrolling interests 12 19 23 43 Net income (loss) attributable to The Dow Chemical Company $ (344 ) $ 762 $ (320 ) $ 1,703 Preferred stock dividends 142 - 142 - Net income (loss) available for common stockholders $ (486 ) $ 762 $ (462 ) $ 1,703 Earnings Per Share Calculations - Basic Three Months Ended Six Months Ended Dollars per share June 30, 2009 June 30, 2008 June 30, 2009 June 30, 2008 Income (Loss) from continuing operations $ (0.42 ) $ 0.83 $ (0.42 ) $ 1.85 Income from discontinued operations, net of income taxes 0.10 0.01 0.12 0.01 Net income attributable to noncontrolling interests 0.01 0.02 0.02 0.04 Net income (loss) attributable to The Dow Chemical Company $ (0.33 ) $ 0.82 $ (0.32 ) $ 1.82 Preferred stock dividends (0.14 ) - (0.15 ) - Net income (loss) available for common stockholders $ (0.47 ) $ 0.82 $ (0.47 ) $ 1.82 Earnings Per Share Calculations - Diluted Three Months Ended Six Months Ended Dollars per share June 30, 2009 June 30, 2008 June 30, 2009 June 30, 2008 Income (Loss) from continuing operations $ (0.42 ) $ 0.83 $ (0.42 ) $ 1.84 Income from discontinued operations, net of income taxes 0.10 - 0.12 0.01 Net income attributable to noncontrolling interests 0.01 0.02 0.02 0.05 Net income (loss) attributable to The Dow Chemical Company $ (0.33 ) $ 0.81 $ (0.32 ) $ 1.80 Preferred stock dividends (1) (0.14 ) - (0.15 ) - Net income (loss) available for common stockholders $ (0.47 ) $ 0.81 $ (0.47 ) $ 1.80 Shares in millions Weighted-average common shares - basic 1,026.1 929.8 975.8 936.0 Plus dilutive effect of stock options and awards 9.4 9.6 8.0 9.5 Weighted-average common shares - diluted 1,035.5 939.4 983.8 945.5 Stock options and deferred stock awards excluded from EPS calculations (2) 62.2 34.3 64.0 34.2 Conversion of preferred stock excluded from EPS calculations (3) 120.3 - 60.2 - (1) Preferred stock dividends were not added back in the calculation of diluted earnings per share because the effect of adding them back would have been anti-dilutive. (2) These outstanding options to purchase shares of common stock and deferred stock awards were excluded from the calculation of diluted earnings per share because the effect of including them would have been anti-dilutive. (3) Conversion of the Cumulative Convertible Perpetual Preferred Stock, Series A into shares of the Companys common stock was excluded from the calculation of diluted earnings per share because the effect of including them would have been a |
6130 - Operating Segments and G
6130 - Operating Segments and Geographic Areas | |
6 Months Ended
Jun. 30, 2009 | |
Operating Segments and Geographic Areas | |
Note - Operating Segments and Geographic Areas | NOTE R OPERATING SEGMENTS AND GEOGRAPHIC AREAS Beginning in the second quarter of 2009, the Company changed its reportable segments due to recent changes in the Companys organization resulting from the April1, 2009 acquisition of Rohm and Haas. In addition, the Company changed its measure of profit/loss for segment reporting purposes from EBIT to EBITDA (which Dow defines as earnings before interest, income taxes, depreciation and amortization). EBITDA by operating segment includes all operating items relating to the businesses, except depreciation and amortization;items that principally apply to the Company as a whole are assigned to Corporate. The reporting changes are reflected in the following Corporate Profile and segment information. Corporate Profile Dow is a diversified chemical company that combines the power of science and technology with the Human Element to constantly improve what is essential to human progress. The Company delivers a broad range of products and services to customers in approximately 160 countries, connecting chemistry and innovation with the principles of sustainability to help provide everything from fresh water, food and pharmaceuticals to paints, packaging and personal care products. In 2008, Dow had annual sales of $57.5billion and employed approximately 46,000 people worldwide. The Company has 150manufacturing sites in 35countries and produces approximately 3,300 products. On April1, 2009, Dow acquired Rohm and Haas Company, a global specialty materials company with sales of $10billion in 2008, 98manufacturing sites in 30countriesand approximately 15,000 employees worldwide. The following descriptions of the Companys operating segments include a representative listing of products for each business. ELECTRONIC AND SPECIALTY MATERIALS Applications: chemical mechanical planarization (CMP) pads and slurries chemical processing and intermediates electronic displays food and pharmaceutical processing and ingredients printed circuit board materials semiconductor packaging, connectors and industrial finishing water purification Electronic Materials is a leading global supplier of materials for chemical mechanical planarization (CMP); materials used in the production of electronic displays; products and technologies that drive leading edge semiconductor design; materials used in the fabrication of printed circuit boards; and integrated metallization processes critical for interconnection, corrosion resistance, metal finishing and decorative applications. These enabling materials are found in applications such as consumer electronics, flat panel displays and telecommunications. Products: ACuPLANE CMP slurries; AR antireflective coatings; AUROLECTROLESS immersion gold process; COPPER GLEAM acid copper plating products; DURAPOSIT electroless nickel process; ENLIGHT products for photovoltaic manufacturers; EPIC immersion photoresists; INTERVIA photodielectrics for advanced packaging; LITHOJET digital imaging processes; OPTOGRADE metalorganic precursors; VISIONPAD CMP pads Specialty Materials is a portfolio of businesses characterized by a vast global footprint, a broad array of unique chemistri |
6150 - Divestitures
6150 - Divestitures | |
6 Months Ended
Jun. 30, 2009 | |
Divestitures | |
Note - Divestitures | NOTE E DIVESTITURES Divestiture of the Rohm and Haas Salt Business On April1, 2009, the Company announced the entry into a definitive agreement to sell the stock of Morton International, Inc. (Morton), the Salt business of Rohm and Haas, to K+S Aktiengesellschaft. The transaction is subject to customary closing conditions, including regulatory approval, and is expected to close in 2009. The transaction values Morton at $1,675million, with proceeds subject to customary post-closing adjustments. Net proceeds from the sale are anticipated to be used to pay down long-term debt. The results of operations for the Salt business are reported in Corporate. The following table provides the major classes of assets and liabilities related to Morton, which have been presented as noncurrent assets and liabilities held for sale in the consolidated balance sheets: Assets and Liabilities Held for Sale In millions At June 30, 2009 Current assets $ 286 Property 398 Other intangible assets 1,318 Deferred charges and other assets 101 Assets held for sale $ 2,103 Current liabilities $ 136 Deferred income tax liabilities - noncurrent 334 Pension and other post retirement benefits 82 Other noncurrent obligations 13 Liabilities held for sale $ 565 Divestiture of the Calcium Chloride Business On June30, 2009, the Company completed the sale of the Calcium Chloride business and recognized a pretax gain of $162million. The results of the Calcium Chloride business, including the second quarter of 2009 gain on the sale, are reflected as Income from discontinued operations, net of income taxes in the consolidated statements of operations for all periods presented. The following table presents the results of discontinued operations: Discontinued Operations Three Months Ended Six Months Ended In millions June30, 2009 June30, 2008 June 30, 2009 June 30, 2008 Net sales $ 24 $ 31 $ 70 $ 64 Income before income taxes $ 164 $ 8 $ 182 $ 17 Provision for income taxes $ 61 $ 3 $ 68 $ 6 Income from discontinued operations, net of income taxes $ 103 $ 5 $ 114 $ 11 |
6290 - Stockholders' Equity
6290 - Stockholders' Equity | |
1/1/2009 - 6/30/2009
| |
Stockholders' Equity | |
Note - Stockholders' Equity | NOTE P STOCKHOLDERS EQUITY Cumulative Convertible Perpetual Preferred Stock, Series A Equity securities in the form of Cumulative Convertible Perpetual Preferred Stock, SeriesA (preferred seriesA) were issued on April1, 2009 to Berkshire Hathaway Inc. in the amount of $3billion (3million shares) and the Kuwait Investment Authority in the amount of $1billion (1million shares). The Company will pay cumulative dividends on preferred seriesA at a rate of 8.5percent per annum in either cash, shares of common stock, or any combination thereof, at the option of the Company. Dividends may be deferred indefinitely, at the Companys option. If deferred, common stock dividends must also be deferred. Any past due and unpaid dividends will accrue additional dividends at a rate of 10percent per annum, compounded quarterly. If dividends are deferred for any six quarters, the preferred seriesA shareholders may elect two directors to the Companys Board of Directors until all past due dividends are paid. On June30, 2009, the Board of Directors declared a quarterly dividend of $85million to preferred seriesA shareholders, which was paid on July1, 2009. Ongoing dividends related to preferred seriesA will be $85million per quarter. Shareholders of preferred seriesA may convert all or any portion of their shares, at their option, at any time, into shares of the Companys common stock at an initial conversion rate of 24.2010shares of common stock for each share of preferred seriesA. Under certain circumstances, the Company will be required to adjust the conversion rate. On or after the fifth anniversary of the issuance date, if the common stock price exceeds $53.72per share for any 20trading days in a consecutive 30-day window, the Company may, at its option, at any time, in whole or in part, convert preferred seriesA into common stock at the then applicable conversion rate. Common Stock In May 2009, the Company launched a public offering of 150.0million shares of its common stock at a price of $15.00per share. Included in the 150.0million shares were 83.3million shares issued to the Haas Trusts and Paulson in consideration for shares of preferred series B held by the Haas Trusts and Paulson (see NoteO). Gross proceeds were $2,250million, of which the Companys net proceeds (after underwriting discounts and commissions) were $966million for the sale of the Companys 66.7million shares. On May26, 2009, the Company entered into an underwriting agreement and filed the corresponding shelf registration statement to effect the conversion of the preferred seriesC into shares of the Companys common stock (see NoteO). On June9, 2009, following the end of the sale period and determination of the share conversion amount, the Company issued 31.0million shares to the Haas Trusts. Employee Stock Ownership Plan The Company has the Dow Employee Stock Ownership Plan (the ESOP), which is an integral part of The Dow Chemical Company Employees Savings Plan (the Plan). A significant majority of full-time employees in the United States are eligible to participate in the Plan. The Company uses the ESOP to provide the Company's matching contribution in the form of the Company |
6440 - Preferred Securities of
6440 - Preferred Securities of Subsidiaries | |
6 Months Ended
Jun. 30, 2009 | |
Preferred Securities of Subsidiaries | |
Note - Preferred Securities of Subsidiaries | NOTE N PREFERRED SECURITIES OF SUBSIDIARIES In July 1999, Tornado Finance V.O.F., a consolidated foreign subsidiary of the Company, issued $500million of preferred securities in the form of preferred partnership units. The units provided a distribution of 7.965 percent, may be redeemed in 2009 or thereafter, and may be called at any time by the subsidiary. The preferred partnership units were previously classified as Preferred Securities of Subsidiaries in the consolidated balance sheets. The distributions were included in Net income attributable to noncontrolling interests in the consolidated statements of operations. On June4, 2009, the preferred partner notified Tornado Finance V.O.F. that the preferred partnership units would be redeemed in full on July9, 2009 as permitted by the terms of the partnership agreement. At June30, 2009, $500million of preferred securities were classified as Accrued and other current liabilities and $20million of accrued dividends were classified as Dividends payable in the consolidated balance sheets. On July9, 2009, the preferred partnership units and accrued dividends were redeemed for a total of $520million. |
6450 - Redeemable Preferred Sto
6450 - Redeemable Preferred Stock | |
6 Months Ended
Jun. 30, 2009 | |
Redeemable Preferred Stock | |
Redeemable Preferred Stock | NOTE O REDEEMABLE PREFERRED STOCKS Cumulative Perpetual Preferred Stock, Series B With the April1, 2009 acquisition of Rohm and Haas, certain trusts established by members of the Haas family (the Haas Trusts) and Paulson Co. Inc. (Paulson) purchased from the Company Cumulative Perpetual Preferred Stock, SeriesB (preferred seriesB) in the amount of 2.5million shares (Haas Trusts 1.5million shares; Paulson 1.0million shares) for an aggregate price of $2.5billion (Haas Trusts $1.5billion; Paulson $1.0 billion). Under the terms of the preferred seriesB, the holders were entitled to cumulative dividends at a rate of 7percent per annum in cash and 8percent per annum either in cash or as an increase in the liquidation preference of the preferred seriesB, at the Companys option. In May 2009, the Company entered into a purchase agreement with the Haas Trusts and Paulson, whereby the Haas Trusts and Paulson agreed to sell to the Company their shares of the preferred series B in consideration for shares of the Companys common stock and/or notes, at the discretion of the Company. Pursuant to the purchase agreement, the Company issued 83.3million shares of its common stock to the HaasTrusts and Paulson in consideration for the purchase of 1.2 million shares of preferred series B held by the HaasTrusts and Paulson. In a separate transaction as part of a $6billion offering of senior notes, the Company issued $1.35 billion aggregate principal amount of 8.55 percent notes due 2019 to the HaasTrusts and Paulson in consideration for the purchase of the remaining 1.3million shares of preferred series B at par plus accrued dividends. Upon the consummation of these transactions, all shares of preferred series B were retired. For additional information concerning the common stock and debt issuances, see NotesK and P. Cumulative Convertible Perpetual Preferred Stock, SeriesC With the April1, 2009 acquisition of Rohm and Haas, the Haas Trusts invested $500million in Cumulative Convertible Perpetual Preferred Stock, SeriesC (preferred seriesC). Under the terms of the preferred series C, prior to June8, 2009, the holders were entitled to cumulative dividends at a rate of 7percent per annum in cash and 8percent per annum either in cash or as an increase in the liquidation preference of the preferred seriesC, at the Companys option. On and after June8, 2009, the Company was required to pay cumulative dividends of 12percent per annum in cash. The preferred seriesC shares would automatically convert to common stock on the date immediately following the ten full trading days commencing on the date on which there was an effective shelf registration statement relating to the common stock underlying the preferred seriesC, if such registration statement was effective prior to June8, 2009. On May 26, 2009, the Company entered into an underwriting agreement and filed the corresponding shelf registration statement to effect the conversion of preferred seriesC into the Companys common stock in accordance with the terms of the preferred series C. Under the terms of the preferred series C, the shares of preferred seriesC convert into shares of the Companys common s |
Document Information
Document Information | |
6 Months Ended
Jun. 30, 2009 | |
Document Information [Line Items] | |
Document Type | 10-Q |
Document Period End Date | 2009-06-30 |
Amendment Flag | false |
Amendment Description | none |
Entity Information
Entity Information (USD $) | ||
6 Months Ended
Jun. 30, 2009 | Jun. 30, 2008
| |
Entity Information [Line Items] | ||
Entity Registrant Name | The Dow Chemical Company | |
Entity Central Index Key | 0000029915 | |
Current Fiscal Year End Date | --12-31 | |
Entity Well-known Seasoned Issuer | Yes | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Public Float | $32,200,000,000 | |
Entity Common Stock, Shares Outstanding | 1,143,619,623 |