RESTRUCTURING AND ASSET RELATED CHARGES - NET

DowDuPont Cost Synergy Program

In September 2017, DowDuPont approved initial post-merger actions under the DowDuPont Cost Synergy Program (the "Synergy Program") which is designed to integrate and optimize the organization following the Merger and Intended Business Separations. In connection with the approved actions under the Synergy Program, the Company recorded a pretax restructuring charge for severance and related benefit costs of $139 million in the third quarter of 2017. The impact of this charge is shown as “Restructuring and asset related charges - net” in the consolidated statements of income. These actions are expected to be substantially completed by September 30, 2019. At September 30, 2017, severance of $19 million was paid, leaving a liability of $120 million.

Subsequent Event

On November 1, 2017, the Company approved restructuring actions in connection with the Synergy Program. Based on all actions approved to date under the Synergy Program, the Company expects to record total pretax restructuring charges of about $1.3 billion, comprised of approximately $525 million to $575 million of severance and related benefits costs; $400 million to $440 million of asset related charges, and $290 million to $310 million of costs related to contract terminations. Current estimated total pretax restructuring charges includes the $139 million pretax charge recorded in the third quarter of 2017, comprised of severance and related benefit costs. The Company expects to record pretax restructuring charges of approximately $900 million in the fourth quarter of 2017, with the remaining restructuring charges to be incurred by the end of 2019.

2016 Restructuring Plan

On June 27, 2016, the Board of Directors of the Company approved a restructuring plan that incorporated actions related to the ownership restructure of 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 and related benefit costs of $268 million, asset related charges and other of $153 million and costs associated with exit and disposal activities of $28 million. The impact of these charges is shown as "Restructuring and asset related charges - net" in the consolidated statements of income. 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 Activities	Severance and Related Benefit Costs			Costs Associated with Exit and Disposal Activities			Total
In millions	Severance and Related Benefit Costs			Costs Associated with Exit and Disposal Activities			Total
Reserve balance at Dec 31, 2016	$	201		$	27		$	228
Cash payments	(59		)	—			(59		)
Reserve balance at Mar 31, 2017	$	142		$	27		$	169
Adjustments to the reserve ¹	—			(3		)	(3		)
Cash payments	(51		)	—			(51		)
Reserve balance at Jun 30, 2017	$	91		$	24		$	115
Cash payments	(31		)	—			(31		)
Reserve balance at Sep 30, 2017	$	60		$	24		$	84


1.	Included in "Restructuring and asset related charges - net" in the consolidated statements of income.

Severance and Related Benefit Costs

The restructuring charge included severance and related benefit costs 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. At December 31, 2016, severance of $67 million was paid, leaving a liability of $201 million for approximately 1,700 employees. In the first nine months of 2017, severance of $141 million was paid, leaving a liability of $60 million for approximately 630 employees at September 30, 2017.

2015 Restructuring Plan

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

The following table summarizes adjustments made to the 2015 restructuring reserve for the three- and nine-month periods ended September 30, 2017 and 2016:



Adjustments to the 2015 Restructuring Reserve ¹	Three Months Ended					Nine Months Ended
In millions	Sep 30, 2017		Sep 30, 2016			Sep 30, 2017			Sep 30, 2016
Severance and related benefit credits	$	—	$	—		$	(9	)	$	—
Asset related credits and other	$	—	$	(1	)	$	—		$	(3	)
Costs (credits) associated with exit and disposal activities	$	—	$	1		$	(1	)	$	6


1.	Included in "Restructuring and asset related charges - net" in the consolidated statements of income.

Severance and Related Benefit 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.

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.