RESTRUCTURING

On October 22, 2012, the Board of Directors of the Corporation approved a restructuring plan to improve the cost effectiveness of the Corporation's global operations. The restructuring plan affected approximately 100 positions and resulted in the shutdown of certain manufacturing facilities. These actions are expected to be completed primarily by December 31, 2014.

As a result of the restructuring activities, the Corporation recorded pretax restructuring charges of $71 million in the fourth quarter of 2012 consisting of costs associated with exit or disposal activities of $13 million, severance costs of $10 million and asset write-downs and write-offs of $48 million. The impact of these charges is shown as "Restructuring charges" in the consolidated statements of operations.

Details on the components of the restructuring charges are discussed below:

Cost Associated with Exit or Disposal Activities

The restructuring charges for costs associated with exit or disposal activities totaled $13 million in the fourth quarter of 2012 for contract cancellations fees.

Severance

The restructuring charges in the fourth quarter of 2012 included severance of $10 million for the separation of approximately 100 employees under the terms of the Corporation's ongoing benefit arrangements, primarily over the next two years. At December 31, 2013, severance of $6 million had been paid and a liability of $4 million remained for 21 employees.

Impairment of Long-Lived Assets, Other Assets and Equity Method Investments

The restructuring charges related to the write-down and write-off of assets in the fourth quarter of 2012 total $48 million. Details regarding the write-downs and write-offs are as follows:


•	Certain oxygenated solvents manufacturing facilities in Texas City, Texas have been consolidated and/or shut down, resulting in an asset write-down of $36 million. The facilities were shut down in the fourth quarter of 2012.


•	A performance monomer manufacturing facility in South Charleston, West Virginia was shut down, resulting in an asset write-down of $1 million and the write-off of other assets totaling $2 million. The assets were shut down in the fourth quarter of 2012.


•	Due to a change in the Corporation's strategy regarding its ownership in Nippon Unicar Company Limited ("NUC"), a 50:50 joint venture, the Corporation had determined its equity investment in NUC to be other-than-temporarily impaired and recorded a $9 million write-down of its interest in NUC. UCC completed the sale of its 50 percent ownership interest in NUC on July 1, 2013.

The following table summarizes the activities related to the Corporation's restructuring reserve:



Restructuring Activities	Costs Associated with Exit or Disposal Activities			Severance Costs			Impairment of Long-Lived Assets, Other Assets and Equity Method Investments
In millions	Costs Associated with Exit or Disposal Activities			Severance Costs						Total
Restructuring charges recognized in the fourth quarter of 2012	$	13		$	10		$	48		$	71
Charges against the reserve	—			—			(48		)	(48		)
Reserve balance at December 31, 2012	$	13		$	10		$	—		$	23
Cash payments	(2		)	(6		)	—			(8		)
Reserve balance at December 31, 2013	$	11		$	4		$	—		$	15

The reserve balance is included in the consolidated balance sheets as "Accrued and other current liabilities" and "Other noncurrent obligations."

The Corporation expects to incur additional costs in the future related to its restructuring activities, as UCC continually looks for ways to enhance the efficiency and cost effectiveness of its operations. Future costs are expected to include demolition costs related to closed facilities; these will be recognized as incurred. The Corporation also expects to incur additional employee-related costs, including involuntary termination benefits, related to its other optimization activities. These costs cannot be reasonably estimated at this time.

In the first quarter of 2012, the Corporation recorded restructuring charges totaling $3 million related to a workforce reduction of approximately 20 employees. In the third quarter of 2012, all severance related to this restructuring charge was paid.