RESTRUCTURING

4Q12 Restructuring

On October 23, 2012, the Company's Board of Directors approved a restructuring plan ("4Q12 Restructuring") to advance the next stage of the Company's transformation and to address macroeconomic uncertainties. The 4Q12 Restructuring plan accelerates the Company's structural cost reduction program and will affect approximately 2,850 positions and result in the shutdown of approximately 20 manufacturing facilities. These actions are expected to be completed primarily by March 31, 2015. As a result of the 4Q12 Restructuring activities, the Company recorded pretax restructuring charges of $990 million in the fourth quarter of 2012 consisting of costs associated with exit or disposal activities of $39 million, severance costs of $375 million and asset write-downs and write-offs of $576 million.

The severance component of the 4Q12 Restructuring charge of $375 million was for the separation of approximately 2,850 employees under the terms of the Company's ongoing benefit arrangements, primarily by March 31, 2015. At December 31, 2012, severance of $8 million had been paid and a liability of $367 million remained for 2,767 employees. In the first nine months of 2013, severance of $183 million was paid, leaving a liability of $184 million for approximately 1,000 employees at September 30, 2013.

The following table summarizes the activities related to the Company's 4Q12 Restructuring reserve:



4Q12 Restructuring Activities	Costs Associated with Exit or Disposal Activities			Severance Costs			Total
In millions	Costs Associated with Exit or Disposal Activities			Severance Costs			Total
Reserve balance at December 31, 2012	$	30		$	367		$	397
Cash payments	(1		)	(69		)	(70		)
Reserve balance at March 31, 2013	$	29		$	298		$	327
Cash payments	(1		)	(59		)	(60		)
Reserve balance at June 30, 2013	$	28		$	239		$	267
Cash payments	(1		)	(55		)	(56		)
Reserve balance at September 30, 2013	$	27		$	184		$	211

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

1Q12 Restructuring

On March 27, 2012, the Company's Board of Directors approved a restructuring plan ("1Q12 Restructuring") to optimize its portfolio, respond to changing and volatile economic conditions, particularly in Western Europe, and to advance the Company's Efficiency for Growth program. The 1Q12 Restructuring plan included the shutdown of a number of manufacturing facilities and the elimination of approximately 900 positions. These actions are expected to be completed primarily by December 31, 2013. As a result of the 1Q12 Restructuring activities, the Company recorded pretax restructuring charges of $357 million in the first quarter of 2012 consisting of costs associated with exit or disposal activities of $150 million, severance costs of $113 million and asset write-downs and write-offs of $94 million. The impact of these charges was shown as "Restructuring charges" in the consolidated statements of income.

The severance component of the 1Q12 Restructuring charge of $113 million was for the separation of approximately 900 employees under the terms of the Company's ongoing benefit arrangements, primarily by December 31, 2013. At December 31, 2012, severance of $82 million had been paid and a liability of $31 million remained for 248 employees. In the first nine months of 2013, severance of $26 million was paid, leaving a liability of $5 million for approximately 70 employees at September 30, 2013.

The following table summarizes the activities related to the Company's 1Q12 Restructuring reserve:



1Q12 Restructuring Activities	Costs Associated with Exit or Disposal Activities
In millions	Costs Associated with Exit or Disposal Activities			Severance Costs			Total
Reserve balance at December 31, 2012	$	56		$	31		$	87
Cash payments	(4		)	(20		)	(24		)
Noncash settlements	(7		)	—			(7		)
Foreign currency impact	(1		)	—			(1		)
Reserve balance at March 31, 2013	$	44		$	11		$	55
Cash payments	(4		)	(5		)	(9		)
Noncash settlements	(1		)	—			(1		)
Reserve balance at June 30, 2013	$	39		$	6		$	45
Cash payments	(1		)	(1		)	(2		)
Reserve balance at September 30, 2013	$	38		$	5		$	43

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

Dow expects to incur additional costs in the future related to its restructuring activities, as the Company continually looks for ways to enhance the efficiency and cost effectiveness of its operations, and to ensure competitiveness across its businesses and across geographic areas. 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.