RESTRUCTURING

2016 Restructuring

On June 27, 2016, the Board of Directors of the Company approved a restructuring plan that incorporates actions related to the ownership restructure of Dow Corning Corporation ("Dow Corning"). These actions, aligned with Dow’s value growth and synergy targets, will result in a global workforce reduction of approximately 2,500 positions, with most of these positions resulting from synergies related to the ownership restructure of Dow Corning. These actions are expected to be substantially completed by June 30, 2018.

As a result of these actions, the Company recorded pretax restructuring charges of $449 million in the second quarter of 2016 consisting of severance costs of $268 million, asset write-downs and write-offs of $153 million and costs associated with exit and disposal activities of $28 million. The impact of these charges is shown as "Restructuring charges (credits)" in the consolidated statements of income and reflected in the Company's segment results as follows: Consumer Solutions ($28 million), Infrastructure Solutions ($97 million), Performance Plastics ($10 million) and Corporate ($314 million). The following table summarizes the activities related to the Company's 2016 restructuring reserve, which is included in "Accrued and other current liabilities" and "Other noncurrent obligations" in the consolidated balance sheets.



2016 Restructuring Charges	Severance Costs			Costs Associated with Exit and Disposal Activities			Total
In millions	Severance Costs			Costs Associated with Exit and Disposal Activities			Total
Reserve balance at December 31, 2016	$	201		$	27		$	228
Cash payments	(59		)	—			(59		)
Reserve balance at March 31, 2017	$	142		$	27		$	169
Adjustments to the reserve	—			(3		)	(3		)
Cash payments	(51		)	—			(51		)
Reserve balance at June 30, 2017	$	91		$	24		$	115

Adjustments to the 2016 Restructuring Charge

In the second quarter of 2017, the Company recorded a favorable adjustment to the 2016 restructuring charge related to costs associated with exit and disposal activities of $3 million, included in "Restructuring charges (credits)" in the consolidated statements of income and reflected in the Infrastructure Solutions segment.

Severance Costs

The restructuring charge included severance of $268 million for the separation of approximately 2,500 employees under the terms of the Company's ongoing benefit arrangements, primarily by June 30, 2018. These costs were charged against Corporate. At December 31, 2016, severance of $67 million was paid, leaving a liability of $201 million for approximately 1,700 employees. In the first six months of 2017, severance of $110 million was paid, leaving a liability of $91 million for approximately 820 employees at June 30, 2017.

2015 Restructuring

Adjustments to the 2015 Restructuring Charge

In the first quarter of 2016, the Company recorded a favorable adjustment to the 2015 restructuring charge related to the impairment of long-lived assets of $2 million, reflected in the Infrastructure Solutions segment. In the second quarter of 2016, the Company recorded an unfavorable adjustment related to additional accruals for exit and disposal activities of $5 million, reflected in Agricultural Sciences ($4 million) and Consumer Solutions ($1 million). The adjustments were included in "Restructuring charges (credits)" in the consolidated statements of income.

In the first quarter of 2017, the Company recorded a favorable adjustment to the 2015 restructuring charge related to costs associated with exit and disposal activities of $1 million, reflected in the Agricultural Sciences segment. In the second quarter of 2017, the Company recorded a favorable adjustment to the severance accrual of $9 million, reflected in Corporate. The adjustments were included in "Restructuring charges (credits)" in the consolidated statements of income.

Severance Costs

The severance component of the 2015 restructuring charge of $235 million was for the separation of approximately 2,250 positions under the terms of the Company's ongoing benefit arrangements. At December 31, 2016, severance of $190 million was paid, leaving a liability of $45 million for approximately 290 employees. In the first six months of 2017, severance of $33 million was paid and the Company recorded a favorable adjustment of $9 million to the severance reserve, leaving a liability of $3 million for approximately 40 employees at June 30, 2017.

The 2015 restructuring activities were substantially completed at June 30, 2017, with remaining liabilities related to severance and costs associated with exit and disposal activities to be settled over time.

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 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.