RESTRUCTURING AND ASSET RELATED CHARGES - NET

9 Months Ended

Sep. 30, 2019

Restructuring and Related Activities [Abstract]

Restructuring and Related Activities Disclosure [Text Block]

RESTRUCTURING AND ASSET RELATED CHARGES - NET

Charges for restructuring programs and other asset related charges, which includes other asset impairments, were $147 million for the three months ended September 30, 2019 ($48 million for the three months ended September 30, 2018) and $368 million for the nine months ended September 30, 2019 ($175 million for the nine months ended September 30, 2018). These charges were recorded in "Restructuring and asset related charges - net" in the consolidated statements of income.

Restructuring Plans

DowDuPont Cost Synergy Program

In September and November 2017, DowDuPont approved post-merger restructuring actions under the DowDuPont Cost Synergy Program (the "Synergy Program") which was designed to integrate and optimize the organization following the Merger and in preparation for the business separations. The Company expects actions related to the Synergy Program to be substantially complete by the end of 2019. The following table summarizes the activities related to the Synergy Program, which are reflected on a continuing operations basis:



DowDuPont Synergy Program	Severance and Related Benefit Costs			Asset Write-downs and Write-offs			Costs Associated with Exit and Disposal Activities			Total
In millions	Severance and Related Benefit Costs			Asset Write-downs and Write-offs			Costs Associated with Exit and Disposal Activities			Total
Reserve balance at Dec 31, 2017	$	270		$	—		$	5		$	275
Packaging & Specialty Plastics	$	—		$	—		$	3		$	3
Industrial Intermediates & Infrastructure	—			—			11			11
Corporate	68			3			—			71
Total restructuring charges	$	68		$	3		$	14		$	85
Charges against the reserve	—			(3		)	—			(3		)
Cash payments	(48		)	—			(3		)	(51		)
Reserve balance at Mar 31, 2018	$	290		$	—		$	16		$	306
Corporate	$	17		$	13		$	—		$	30
Total restructuring charges	$	17		$	13		$	—		$	30
Charges against the reserve	—			(13		)	—			(13		)
Cash payments	(54		)	—			(6		)	(60		)
Reserve balance at Jun 30, 2018	$	253		$	—		$	10		$	263
Packaging & Specialty Plastics	$	—		$	4		$	—		$	4
Corporate	43			—			—			43
Total restructuring charges	$	43		$	4		$	—		$	47
Charges against the reserve	—			(4		)	—			(4		)
Cash payments	(56		)	—			—			(56		)
Reserve balance at Sep 30, 2018	$	240		$	—		$	10		$	250
Packaging & Specialty Plastics	$	—		$	6		$	—		$	6
Performance Materials & Coatings	—			7			—			7
Corporate	9			—			—			9
Total restructuring charges	$	9		$	13		$	—		$	22
Charges against the reserve	—			(13		)	—			(13		)
Cash payments	(39		)	—			(3		)	(42		)
Reserve balance at Dec 31, 2018	$	210		$	—		$	7		$	217
Packaging & Specialty Plastics	$	—		$	—		$	1		$	1
Corporate	52			76			15			143
Total restructuring charges	$	52		$	76		$	16		$	144
Charges against the reserve	—			(76		)	—			(76		)
Cash payments	(79		)	—			(4		)	(83		)
Reserve balance at Mar 31, 2019	$	183		$	—		$	19		$	202
Performance Materials & Coatings	$	—		$	22		$	—		$	22
Corporate	25			7			5			37
Total restructuring charges	$	25		$	29		$	5		$	59
Charges against the reserve	—			(29		)	(2		)	(31		)
Cash payments	(71		)	—			—			(71		)
Reserve balance at Jun 30, 2019	$	137		$	—		$	22		$	159
Industrial Intermediates & Infrastructure	$	—		$	—		$	5		$	5
Performance Materials & Coatings				1						1
Corporate	46			4			—			50
Total restructuring charges	$	46		$	5		$	5		$	56
Charges against the reserve	—			(5		)	—			(5		)
Cash payments	(77		)	—			(6		)	(83		)
Reserve balance at Sep 30, 2019	$	106		$	—		$	21		$	127

At September 30, 2019, $107 million was included in "Accrued and other current liabilities" ($205 million at December 31, 2018) and $20 million was included in "Other noncurrent obligations" ($12 million at December 31, 2018) in the consolidated balance sheets.

The Company recorded pretax restructuring charges of $842 million inception-to-date under the Synergy Program on a continuing operations basis, consisting of severance and related benefit costs of $567 million, asset write-downs and write-offs of $230 million and costs associated with exit and disposal activities of $45 million.

Asset Write-downs and Write-offs

The restructuring charges related to the write-down and write-off of assets related primarily to miscellaneous asset write-downs and write-offs, including the shutdown of several small manufacturing facilities and the write-off of non-manufacturing assets and certain corporate facilities.

Costs Associated with Exit and Disposal Activities

The restructuring charges for costs associated with exit and disposal activities for the three and nine months ended September 30, 2019 related primarily to contract cancellation penalties. In the nine months ended September 30, 2018, the restructuring charges for costs associated with exit and disposal activities included contract cancellation penalties and environmental remediation liabilities.

The Company expects to incur additional costs in the future related to its restructuring activities. 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-related costs, including involuntary termination benefits, related to its other optimization activities. These costs cannot be reasonably estimated at this time.

Asset Related Charges

The Company recognized additional pretax impairment charges of $16 million and $34 million for the three and nine months ended September 30, 2019, respectively, related primarily to capital additions made to a biopolymers manufacturing facility in Santa Vitoria, Minas Gerais, Brazil, which was impaired in 2017 (charge of $3 million and $9 million for the three and nine months ended September 30, 2018). The impairment charge was included in “Restructuring and asset related charges - net” in the consolidated statements of income and related to Performance Materials & Coatings ($9 million) and Packaging & Specialty Plastics ($7 million). See Note 20 for additional information.

On August 13, 2019, the Company entered into a definitive agreement to sell its acetone derivatives business to ALTIVIA Ketones & Additives, LLC. The divestiture includes the Company's acetone derivatives related inventory and production assets, located in Institute, West Virginia, in addition to the site infrastructure, land and utilities. The divestiture is expected to close in the fourth quarter of 2019. The Company will remain at the Institute site as a tenant. As a result of this planned divestiture, the Company recognized a pretax impairment charge of $75 million in the third quarter of 2019. The impairment charge was included in "Restructuring and asset related charges - net" in the consolidated statements of income and related to Packaging & Specialty Plastics ($24 million) and Corporate ($51 million). See Note 20 for additional information.