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The Dow Chemical Company
1Q 2009 Earnings Conference Call
April 30, 2009




                 1Q09 Earnings Conference Call
SEC Disclosure Rules

Some of our comments today may include statements about
our expectations for the future. Those expectations involve
risks and uncertainties. Dow cannot guarantee the accuracy
of any forecasts or estimates, and we do not plan to update
any forward-looking statements if our expectations change. If
you would like more information on the risks involved in
forward-looking statements, please see our annual report and
our SEC filings.

In addition, some of our comments may reference non-GAAP
financial measures. Where available, a reconciliation to the
most directly comparable GAAP financial measures and other
associated disclosures are provided on the internet at
www.dow.com in the Financial Reports page of the Investor
Relations section.

                 1Q09 Earnings Conference Call – Page 2
Agenda

 Recent Achievements & 2009 Areas of Focus

 Restructuring, De-leveraging and Synergies

 1Q09 Financial Performance & Business Trends

 Dow Advanced Materials Update

 Outlook & Priorities




             1Q09 Earnings Conference Call – Page 3
Recent Achievements

 Re-negotiated financing of Rohm and Haas acquisition

 Re-structured acquisition terms to preserve financial
 flexibility and advance strategy

 Announced sale of Morton salt, hours after acquisition close

 Increased acquisition-related cost synergy target

 Validated acquisition growth synergies of $3 billion

 Announced and implemented cost reduction actions that
 contributed to 1Q09 results


               1Q09 Earnings Conference Call – Page 4
2009 Areas of Focus

 Strengthening our balance sheet to protect our
 investment grade credit rating



 Managing business through uncertain operating
 environment



 Successfully integrating Rohm and Haas




            1Q09 Earnings Conference Call – Page 5
De-leveraging Plan

 Asset sales

 Debt and equity issuances

 Debt to EBITDA well within covenants

 Bridge loan pay down by end-2009

 Debt to total capital less than 50% by year-end




               1Q09 Earnings Conference Call – Page 6
Morton Salt Divestiture Exceeds Expectations

  Met communicated timeline
  on Signing


  And … Exceeded expectations
  on value


  Over delivered by $0.2B
  ̶ $1.7B Morton Salt versus the
    target of $1.5B
  ̶ 6.1x gross proceeds/EBITDA




                1Q09 Earnings Conference Call – Page 7
Divestment Plan
                                                          Potential Value
  Previously Discussed                                      $3+ billion
     TRN
     South East Asia olefins & derivatives business
     Morton Salt
     Calcium Chloride
  Olefins & Derivatives Envelope                            $4-6 billion
     K-Dow successor
     Regional plays
  Aromatics & Derivatives Envelope                          $1-2 billion
     SB Rubber
     SB Latex
  Stand-Alone Assets                                       $15+ billion
     Dow AgroSciences
     Others
  Total                                           $23-26 billion

                 1Q09 Earnings Conference Call – Page 8
2009 Operating Plan

 Deliver on 4Q08 restructuring program

 “Right-size” global footprint

 Reduce costs and defer or eliminate capital
 spending

 Deliver acquisition synergies

 Total run rate up to ~$2.5 billion by end-2010


             1Q09 Earnings Conference Call – Page 9
4Q08 Restructuring Progress

 Delivered approximately half of targeted global
 workforce reduction



 17% ahead of planned savings



 Expect to be at $500 million run rate by end-
 2009




            1Q09 Earnings Conference Call – Page 10
1Q09 Financial Highlights

      1Q09 sales were $9.1 billion, down 39% vs. 1Q08
        ̶    Double-digit declines in all geographies and all operating
             segments, except Dow AgroSciences
        ̶    Volume declined 19% vs. 1Q08; price down 20% vs. 1Q08

      Dow AgroSciences set quarterly sales and EBIT(1) records

      EBIT increased sequentially, with largest percentage
      improvement in Performance segments, excluding Dow
      AgroSciences

      Further drop in feedstock and energy costs
        ̶    $3.1 billion (49%) lower than 1Q08

      Accelerated cost reductions partly offset price and volume
      declines

(1) Earnings before interest, income taxes and noncontrolling interests (“EBIT”). A reconciliation of EBIT to
    “Net Income Attributable to The Dow Chemical Company” is provided in the Appendix.


                                      1Q09 Earnings Conference Call – Page 11
1Q09 Financial Performance

Dollars in millions (except per share amounts)                           1Q09     1Q08 Change
Sales                                                               $9,087       $14,824   (39)%
        Price                                                                               (20)%
        Volume                                                                              (19)%
Purchased feedstock & energy costs                                                         (49)%
Equity earnings                                                           $65      $274    (76)%
Equity earnings, excluding
 certain items1                                                           $94      $274    (66)%
Earnings per share – diluted                                             $0.03     $0.99   (97)%
Earnings per share – diluted,
 excluding certain items1                                                $0.12     $0.99   (88)%
1   See Appendix for Supplemental Information regarding certain items.



                                 1Q09 Earnings Conference Call – Page 12
1Q09 Financial Performance
Dollars in millions (except per share amounts)                              1Q09                 4Q08 Change
Sales                                                                     $9,087             $10,899                 (17)%
        Price                                                                                                          (17)%
        Volume                                                                                                          (0)%
Purchased feedstock & energy costs                                                                                   (27)%
Equity earnings (losses)                                                        $65                  $(4)                     n/a
Equity earnings (losses),
 excluding certain items1                                                       $94                  $(4)                     n/a
Earnings (Loss) per
 share – diluted                                                            $0.03             $(1.68)                         n/a
Earnings (Loss) per share – diluted,
 excluding certain items1,2          $0.12                                                    $(0.62)                         n/a
1   See Appendix for Supplemental Information regarding certain items.
2   In addition, the interruption of operations caused by the hurricanes resulted in an estimated pretax $15 million in the
    fourth quarter of 2008 in lost margin on lost sales, the equivalent of $0.01 per share, which is not included in the
    amounts presented in the table.


                                    1Q09 Earnings Conference Call – Page 13
1Q09 Earnings Per Share Reconciliation

Reported earnings per share                                              $0.03

Restructuring charges                                                     0.02

Acquisition-related expenses                                              0.04

Dow Corning restructuring                                                 0.03

Earnings per share – diluted, excluding certain items                    $0.12




See Appendix for Supplemental Information regarding these items.




                               1Q09 Earnings Conference Call – Page 14
Volume Up from December Lows

 Pace of decline has begun
 to moderate




                                  excluding Agricultural Sciences
                                    Volume (millions of units),
 Monthly improvements in
 demand

 Business conditions began
 to stabilize

 March was the strongest
 month of the quarter

                                                                    Oct- Nov- Dec- Jan- Feb- Mar-
                                                                     08   08   08   09   09   09



              1Q09 Earnings Conference Call – Page 15
Dow Global Demand Impact Across Industries
% of total 2008 sales in billions $                                         High
                                                                            Medium            Sensitivity to downturn
Net of Hydrocarbons & Energy and Unallocated                                Low
                             100% =       48.2        4.5                 19.1                24.6
    Construction                                                           5
                                            13                             4
                                                                                               21
    Transportation                          7
    Electronics                             5                              14
                                                                                               13

    Distribution/3rd Party Sales            19                                                 6

                                                 1                         30                  8
    Mining                                            100
                                                                                               10
    Consumer Goods                          19

                                                                                               14
    Industrial Market                       11                             26
                                                                                               2
    Paper & Pulp                            4
                                                                                               16
    Health Care                             2
                                            8
                                                                           4

    Food                                                                   14
                                                                                               3
                                                                                                    2
                                            10
    Agriculture                                                       1                        5

    Source:   Dow Analysis             Total DOW      AG              BP&C                PP&C*
                                                            * Incl Market-Facing-Businesses


                             1Q09 Earnings Conference Call – Page 16
Performance Portfolio Demand Trend

 Specialty businesses
 showed pricing resiliency




                                   excluding Agricultural Sciences
                                     Volume (millions of units),
 Most notable improvement
 experienced in March



 Volume rebounded
 significantly from Dec 2008
 low

                                                                     Oct- Nov- Dec- Jan- Feb- Mar-
                                                                      08   08   08   09   09   09



               1Q09 Earnings Conference Call – Page 17
Basics Portfolio Demand Trend

 Chain de-stocking began to




                                  excluding Hydrocarbons & Energy
 moderate in 1Q09




                                     Volume (millions of units),
 Production levels bounced
 back as manufacturing
 assets ran in line with
 demand



 Dow’s polyethylene volume
 up 10% from 4Q08
                                                                    Oct- Nov- Dec- Jan- Feb- Mar-
                                                                     08   08   08   09   09   09



              1Q09 Earnings Conference Call – Page 18
Cost Control

 SARD down $93 million vs. 1Q08
  ̶   Despite 8% increase in Dow AgroSciences




 Spending down $270 million vs. 1Q08 and 4Q08



 Remain on track to achieve capital spending
 commitment




                1Q09 Earnings Conference Call – Page 19
Operating Rate Trend
                                     80%
 Dow’s 1Q09 operating rate
 was 68% vs. 64% in 4Q08             75%

                                     70%
 Clear improvement in rates
 from historic low reached           65%
 in Dec 2008
                                     60%


 Continue to tightly manage          55%
 operations
                                     50%


 Production being matched            45%

 to demand
                                     40%
                                            Oct- Nov- Dec- Jan- Feb- Mar-
                                             08   08   08   09   09   09



              1Q09 Earnings Conference Call – Page 20
Heritage ROH: 1Q09 Financial Performance
Dollars in millions                                                      1Q09     1Q08 Change
Net Sales                                                                $1,772 $2,507   (29)%
         Price                                                                             (3)%
         Volume                                                                           (26)%
(Loss) Earnings before income
   taxes                                                                  $(58)   $233   (125%)
(Loss) Earnings before income
   taxes, excluding certain items1                                         $45    $245   (82%)
1   See Appendix for Supplemental Information regarding certain items.


       Gradual improvements in 1Q09 in almost all business units
       Encouraging signs of recovery in Electronic Materials
       businesses, led by Asia
       Challenging coatings market conditions partially offset by
       cost reductions, margin management and new product
       launches

                                  1Q09 Earnings Conference Call – Page 21
Organizational Structure
                                            The Dow Chemical Company
                                            Andrew Liveris, Chairman & CEO



                                               Dow Advanced Materials
                                            Pierre Brondeau, President & CEO




            Coatings              Building & Construction              Marketing       Human Resources
         Luis Fernandez
          Luis Fernandez                Torsten Kraef
                                        Torsten Kraef                 Ruby Chandy
                                                                     Ruby Chandy          Jenifer
                                                                                         Jenifer Reed



                                     Specialty Materials              Research &
       Electronic Materials                                                                 Legal
                                        Peter Davies
                                       Peter Davies                  Development
          Yi Hyon Paik
           Yi Hyon Paik                                                                  Ken Fitzpatrick
                                                                                        Ken Fitzpatrick
                                                                     A.N. Sreeram
                                                                      A.N. Sreeram


      Adhesives & Functional         Asia/RDE Growth               Manufacturing,
                                                                                         Public Affairs
             Polymers                     Agenda                  Engineering & EHS
        Patrice Barthelmes             Mark Douglas                                      Brian McPeak
                                                                                          Brian McPeak
         Patrice Barthelmes            Mark Douglas                  Don Taylor
                                                                      Don Taylor



                                                                   Business Services        Finance
                                                                     Jim Varilek
                                                                       Jim Varilek     Alfonso Escudero
                                                                                        Alfonso Escudero


    Heritage Dow leaders denoted in red.
    Heritage ROH leaders denoted in green.

                               1Q09 Earnings Conference Call – Page 22
Creating Large High-Growth Global Businesses

  Coatings (~$3.5B business): Leadership in architectural and industrial
  coatings business. Integration of acrylics, latexes, epoxies, polyurethanes
  and water soluble polymer technologies.

  Building & Construction (~$2.3B business): Global leadership position
  in insulation and weather protection materials like foams and films, as well
  as construction chemicals based on cellulosics, emulsion polymers,
  rheology modifiers and dispersants for the building and construction
  industry.

  Water (~$1B business): Leading component provider servicing the ever
  growing demand for pure water for industrial and consumable markets.

  Biocides (~$0.6B business): Global leadership position in bio-safety &
  preservation in consumable (food, paper/pulp, wood, paints, cleaners,
  fuel, health & beauty aids) goods.

  Household & Personal Care (~$0.7B business): Leadership in
  conditioning polymers combined with thickeners and fixatives in personal
  care and environmentally friendly additives.




                   1Q09 Earnings Conference Call – Page 23
Creating Large High-Growth Global Businesses

  Electronic Materials (~$2B business): Global leadership
  in lithography/CMP for semiconductor fabrication,
  interconnect for circuit board and packaging, flat panel
  display, photovoltaic metallization.

  Paper, Carpet & Textiles (~$2B business): Global
  leadership position in emulsions and other products for
  several markets and applications like paper, paperboard,
  carpet & floor covering, leather, graphic arts, etc.

  Adhesives (~$0.7B business): Leading provider of
  formulated adhesives, adhesive polymers and pressure-
  sensitive adhesives for packaging and other applications.

  Cellulosics (~$1B business): Global leadership position in
  cellulose based products and solutions for the food, pharma
  and other industries.


                1Q09 Earnings Conference Call – Page 24
Lockdown Period and Clean Team Information

Goal: Create Action Plans to Deliver Growth and Cost
      Synergy Targets

  Lockdowns
   ̶   Transfer of knowledge and business confidential information
       between companies
   ̶   Over 1,000 Dow and ROH employees engaged
   ̶   Spanned 3 to 4 week period
   ̶   Included Functions, Businesses and Geographies

  Clean Team Information
   ̶   Accelerates integration and cost synergy capture
   ̶   Prepared by 3rd party consultants and retirees
   ̶   “Play Book” to enable tactical (<1 year) and strategic (3-5
       years) growth

                   1Q09 Earnings Conference Call – Page 25
Cost Synergies by Category

                                                  Announced          Estimated
                                                  Synergies          Synergies
  Category                                          (MM$)      %      (MM$)      %

Purchasing Synergies including Raw Materials         280       31%      390      30%
Shared Services and Governance                       280       31%      380      29%
Mnfg. / Supply Chain Work Process Improvements       160       17%      280      22%
Corporate Business Development Overlap                80       9%        50      4%
ROH Announced Restructurings                         110       12%      200      15%
                                       Total         910 100% 1,300 100%



43% increase in cost synergies from $910 million to $1.3 billion




                     1Q09 Earnings Conference Call – Page 26
Top Synergy Projects
              Function                        Project Description

             Purchasing                           Raw Materials
     Manufacturing & Engineering                MRO / Equipment
        Information Technology            IT Infrastructure Consolidation
             Purchasing                     Hydrocarbons and Energy
    Marketing & Sales / Commercial   Marketing and Sales / Business Overlap
     Manufacturing & Engineering       Manufacturing Footprint Optimization
            Supply Chain                     Logistics and Packaging
           Shared Services                  Corporate Services and IT
        Information Technology           I/S Organizational Consolidation

 100+ projects identified

 Top 12 projects represent $650 million of $1.3 billion run rate
 target

 Intend to be at 60% run rate 12 months after closing


                    1Q09 Earnings Conference Call – Page 27
Examples of >$100MM Annual Sales Growth Synergies


  Coatings: Cross selling at key accounts –
  Acrylic/Latex/Epoxy/PU
  Building and Construction: Leverage Dow’s market
  channel for ROH products
  Personal Care: Short-term opportunity for rheology
  modifiers, opacifiers, preservatives
  Advanced Packaging/Electronics: Dow formulated
  epoxies – ROH growth platform
  Adhesives: Leverage Dow PE/PU Technology in ROH
  Adhesives for packaging and transportation
  Russia: Leverage ROH footprint/organization in Russia

               1Q09 Earnings Conference Call – Page 28
2009 Outlook – Dow Advanced Materials

 Full-year sales down vs. 2008, in line with Specialty
 Chemical industry

 Electronics significantly impacted by inventory
 correction and reduced consumer spending
  ̶ High gross margin magnifies impact

 Demand appears to be improving
 ̶ Four months of sequential growth for overall ROH
     (excluding Salt)
  ̶ Asia chemical year-on-year growth in March
   ̶ Electronic material inventory correction over


             1Q09 Earnings Conference Call – Page 29
Path Moving Forward

 Top priority is to maintain EH&S performance


 Intense customer focus – “We will not give our
 customers a reason to go elsewhere”


 Quickly capturing the $1.3B in cost synergies


 Committed to growth by building the premier
 Advanced Materials business


            1Q09 Earnings Conference Call – Page 30
Outlook

 Some signs that pace of economic decline is
 moderating

 Customers continue to manage low inventory
 levels

 Dow’s vast geographic and market reach well-
 positioned to benefit as recovery progresses

 Continue to assume 2009 will be a year of global
 recession


            1Q09 Earnings Conference Call – Page 31
2009 Priorities

 Successfully integrate Rohm and Haas to capture
 growth and preserve their business model

 Realize Rohm and Haas cost synergy targets and
 accelerate Dow’s own restructuring plan

 Execute divestment plan to support bridge loan
 pay down and protect our investment grade
 credit rating

 Actively manage costs and operations through
 the economic downturn


            1Q09 Earnings Conference Call – Page 32
Appendix




           1Q09 Earnings Conference Call
Performance Plastics
                                                                                           Tech.
Dollars in millions                         1Q09            1Q08           Specialty    Licensing &
                                                                           Plastics &                        Dow
                                                                                          C atalyst       Automotive
Sales                                      $2,435           $3,963        Elastomers                                   Dow Building
                                                                                                                        Solutions
  Price down 11%; Volume down 28%

EBIT                                              $30        $329                                     Sales
Equity earnings included in EBIT                  $2          $18                                                        Dow Epoxy




                                                                                        Polyurethanes
                                                                                        & PU Systems




                                       1Q09 Trends
                                                                     Price and volume down in all
                                  Sales   Price    Volume            geographic areas
Dow Automotive                     ↓       ↓            ↓            Volumes impacted by continued
Dow Building Solutions             ↓       ↓            ↓
                                                                     slowdown in automotive and
Dow Epoxy                          ↓       ↓            ↓
                                                                     construction activity
Polyurethanes & PU Systems         ↓       ↓            ↓
Specialty Plastics & Elastomers    ↓       ↓            ↓
                                                                     Most businesses saw gradual
Technology Licensing & Catalyst    ↓       -            ↓
                                                                     increase in volume toward latter
                                                                     part of 1Q09



                                    1Q09 Earnings Conference Call – Page 34
Performance Chemicals
Dollars in millions                                       1Q09         1Q08                               Designed
                                                                                                          Polymers
Sales                                                  $1,517          $2,323         Specialty
                                                                                     C hemicals
  Price down 7%; Volume down 28%

EBIT                                                        $115        $271
                                                                                                  Sales

Certain items* included in EBIT                             $(29)         $-
Equity earnings included in EBIT                             $11         $95                                Dow Latex

* See Appendix for Supplemental Information regarding certain items.




                                                1Q09 Trends
                                                                                Lower sales in Dow Water
                                          Sales     Price     Volume            Solutions due to fewer large
Designed Polymers                           ↓         ↓         ↓               desalination projects
Dow Latex                                   ↓         ↓         ↓
                                                                                Specialty Chemicals reported
Specialty Chemicals                         ↓         ↓         ↓
                                                                                record sales for aircraft de-icing
                                                                                fluids
                                                                                Weak demand in industrial
                                                                                sectors partially offset by late-
                                                                                quarter improvement,
                                                                                particularly in China
                                            1Q09 Earnings Conference Call – Page 35
Agricultural Sciences
Dollars in millions                     1Q09           1Q08
                                                                       Seeds &
Sales                                  $1,446          $1,314           Traits

  Price flat; Volume up 10%

EBIT                                       $338         $331                     Sales
Equity earnings included in EBIT              $1          $1

                                                                                         Ag C hem




                                   1Q09 Trends
                                                                Record 1Q sales and EBIT,
                              Sales   Price   Volume            driven by strong performance in
Agricultural Chemicals         ↑       -           ↑            Seeds & Traits
Seeds and Traits               ↑       -           ↑
                                                                Results reflect organic growth
                                                                and favorable impact from
                                                                acquisitions
                                                                Ag Chem volume increased,
                                                                with new product sales nearly
                                                                doubling

                                1Q09 Earnings Conference Call – Page 36
Basic Plastics
Dollars in millions                     1Q09            1Q08                         Polystyrene

Sales                                  $1,847           $3,492       Polypropylene

  Price down 35%; Volume down 12%

EBIT                                           $4        $427                                 Sales
Equity earnings included in EBIT              $13         $42

                                                                                                      Polyethylene




                                    1Q09 Trends
                                                                 Double-digit price and volume
                              Sales   Price    Volume            declines for segment vs. 1Q08
Polyethylene                   ↓        ↓           ↓            Demand growth vs. 4Q08
Polypropylene                  ↓        ↓           ↓
                                                                 reflected re-stocking throughout
Polystyrene                    ↓        ↓           ↓
                                                                 value chains
                                                                 Polyethylene demand down 4%
                                                                 vs. 1Q08, but up 10% vs. 4Q08




                                1Q09 Earnings Conference Call – Page 37
Basic Chemicals
Dollars in millions                       1Q09          1Q08
                                                                              EO/EG
Sales                                      $801         $1,559
  Price down 21%; Volume down 28%

EBIT                                      $(92)           $159                        Sales
Equity earnings included in EBIT              $40         $97


                                                                                                 C ore
                                                                                              C hemicals




                                      1Q09 Trends
                                                                 Double-digit price and volume
                                 Sales   Price   Volume          declines vs. 1Q08
Core Chemicals                    ↓       ↓         ↓            Caustic soda sales impacted by
Ethylene Oxide/Ethylene Glycol    ↓       ↓         ↓
                                                                 weaker alumina and pulp and
                                                                 paper industry fundamentals
                                                                 Weak PVC demand for building
                                                                 and construction continued
                                                                 EO/EG industry fundamentals
                                                                 remain weak

                                   1Q09 Earnings Conference Call – Page 38
Reconciliation of Non-GAAP Financial Measure (Heritage Dow)


                                                       Three Months Ended
Dollars in millions
                                                        3/31/09        3/31/08
EBIT                                                            $159    $1,385

+ Interest income                                                 12        24
- Interest expense and amortization
  of debt discount                                               154       145
- Provision (Credit) for income taxes                           (18)       299
- Net income attributable to
  noncontrolling interests                                       11         24
Net Income Attributable to
 The Dow Chemical Company                                        $24      $941



                      1Q09 Earnings Conference Call – Page 39
Supplemental Information (Heritage Dow)

Certain items affecting results

Earnings in the first quarter 2009 were unfavorably impacted
  by three items:

  Net pretax adjustment to the 2008 restructuring charge of
  $19 million resulting from adjustments to severance,
  reflected in Unallocated and Other.
  Pretax charges totaling $48 million for legal expenses and
  other transaction costs related to the April 1, 2009
  acquisition of Rohm and Haas Company, reflected in
  Unallocated and Other.
  Pretax charges totaling $29 million for the Company’s share
  of a restructuring charge recognized by Dow Corning
  Corporation, a 50 percent owned nonconsolidated affiliate
  of the Company; these charges are reflected in “Equity in
  earnings of nonconsolidated affiliates” and impact the
  Performance Chemicals segment.

                1Q09 Earnings Conference Call – Page 40
Supplemental Information (Heritage Dow)
Certain items affecting results

Results for the fourth quarter of 2008 were negatively impacted by the following items:
     Pretax costs totaling $54 million related to Hurricanes Gustav and Ike, which hit the U.S. Gulf Coast in the third
     quarter. These costs, which primarily included the repair of property damage and unabsorbed fixed costs, are included
     in “Cost of sales” in the consolidated statements of income and reflected in the operating segments as follows:
     $13 million in Performance Plastics, $1 million in Performance Chemicals, $3 million in Basic Plastics, $15 million in
     Basic Chemicals, $16 million in Hydrocarbons and Energy, and $6 million in Unallocated and Other.
     Pretax legal expenses and other costs of $69 million related to the K-Dow transaction that were expensed upon
     Petrochemical Industries Company’s refusal to close the K-Dow transaction on January 2, 2009. These costs are shown
     as “Cost of sales” in the consolidated statements of income and reflected in Unallocated and Other.
     Goodwill impairment losses of $239 million related to the Dow Automotive ($209 million against Performance Plastics)
     and Polypropylene ($30 million against Basic Plastics) reporting units. The losses are shown as “Goodwill impairment
     losses” in the consolidated statements of income.
     Net pretax restructuring charges of $839 million. In December 2008, the Company’s Board of Directors approved a
     restructuring plan as part of a series of actions to advance the Company’s strategy and respond to the recent, severe
     economic downturn. The restructuring plan includes the shut down of a number of facilities and a global workforce
     reduction. As a result, the Company recorded restructuring charges totaling $785 million, including asset write-downs
     and write-offs of $336 million, severance costs of $321 million and costs associated with exit or disposal activities
     (such as pension curtailment costs and environmental remediation) of $128 million. In addition, the Company recorded
     a $60 million unfavorable adjustment to restructuring charges recorded in the fourth quarter of 2007 and a $6 million
     favorable adjustment to restructuring charges recorded in the third quarter of 2006. The net impact of the fourth
     quarter charges and adjustments, which is shown as “Restructuring charges” in the consolidated statements of income,
     impacted all operating segments.
     Pretax charge of $17 million for purchased in-process research and development (“IPR&D”) related to the recent
     acquisition of assets of Süwestsaat GbR. The charge is shown as “Purchased in-process research and development
     charges (credit)” in the consolidated statements of income and reflected in Agricultural Sciences.
     Pretax charges totaling $31 million for legal expenses and other transaction costs related to the pending acquisition of
     Rohm and Haas Company. These charges are shown as “Acquisition-related expenses” in the consolidated statements
     of income and reflected in Unallocated and Other.




                                  1Q09 Earnings Conference Call – Page 41
Supplemental Information (Heritage Dow)

Certain items affecting results
Dollars in millions (except per share amounts)

                                                       Pretax                   Impact on                  Impact
                                                     Impact (1)               Net Income (2)              on EPS (3)
                                                  Three Months Ended         Three Months Ended       Three Months Ended
                                                 3/31/09      3/31/08       3/31/09     3/31/08       3/31/09    3/31/08
Restructuring charges                                $(19)              -      $(17)              -    $(0.02)             -
Acquisition-related expenses                          (48)              -       (41)              -     (0.04)             -
Dow Corning restructuring                             (29)              -       (27)              -     (0.03)             -
Total                                               $(96)               -     $(85)               -    $(0.09)             -




(1) Impact on “Income before Income Taxes”
(2) Impact on “Net Income Attributable to The Dow Chemical Company”
(3) Impact on “Earnings per common share – diluted”




                                           1Q09 Earnings Conference Call – Page 42
Supplemental Information (Heritage Dow)
Certain items affecting results
Dollars in millions (except per share amounts)

                                                                  Pretax                                   Impact on                                  Impact
                                                                Impact (1)                               Net Income (2)                              on EPS (3)
                                                           Three Months Ended                         Three Months Ended                       Three Months Ended
                                                                  12/31/08                                    12/31/08                                12/31/08
Goodwill impairment losses                                                   $(239)                                     $(230)                                 $(0.25)
Restructuring charges                                                         (839)                                       (628)                                  (0.68)
Impact of Hurricanes Gustav and Ike (4)                                         (54)                                        (34)                                 (0.03)
K-Dow related expenses                                                          (69)                                        (44)                                 (0.05)
Purchased in-process research and
 development charges                                                            (17)                                        (17)                                 (0.02)
Acquisition-related expenses                                                    (31)                                        (25)                                 (0.03)
Total                                                                    $(1,249)                                      $(978)                                 $(1.06)




(1)   Impact on “Income before Income Taxes”
(2)   Impact on “Net Income Attributable to The Dow Chemical Company”
(3)   Impact on “Earnings per common share – diluted”
(4)   In addition, the interruption of operations caused by the hurricanes resulted in an estimated pretax $15 million in lost margin on lost sales, the equivalent
      of $0.01 per share, which is not included in the amounts presented in the table.




                                                1Q09 Earnings Conference Call – Page 43
                                                4Q08
Certain Items Affecting Results (Heritage Dow)

Certain items reducing EBIT by Operating Segment
Dollars in millions




                                  Three Months Ended              Three Months Ended
                                  3/31/09       3/31/08               12/31/08
Performance Plastics                        -             -                   $(333)
Performance Chemicals                $(29)                -                       (25)
Agricultural Sciences                       -             -                       (20)
Basic Plastics                              -             -                      (181)
Basic Chemicals                             -             -                      (118)
Hydrocarbons and Energy                     -             -                       (34)
Unallocated and Other                  (67)               -                      (538)
Total                               $(96)                 -                $(1,249)




                        1Q09 Earnings Conference Call – Page 44
4Q08 Loss Per Share Reconciliation

Reported loss per share                                   $(1.68)

Goodwill impairment losses                                  0.25

Restructuring charges                                       0.68

Impact of Hurricanes Gustav and Ike                         0.03

K-Dow related expenses                                      0.05

Purchased in-process R&D related to acquisitions            0.02

ROH acquisition-related expenses                            0.03

Loss per share excluding certain items                    $(0.62)


                1Q09 Earnings Conference Call – Page 45
                4Q08
Principal Joint Ventures (Heritage Dow)

Although Dow participates in many joint ventures, the most
significant joint ventures from a financial perspective are:

Americas Styrenics LLC*
Compañía MEGA S.A.
Dow Corning Corporation
EQUATE Petrochemical Company K.S.C.
Equipolymers
MEGlobal
The OPTIMAL Group of Companies
The SCG-DOW Group
Univation Technologies, LLC

* Formed May 2008.
For more information on Dow’s joint venture activities, please see our Joint Venture White Paper on Dow’s website at
http://www.dow.com/about/pdf/djv_0408.pdf.




                                    1Q09 Earnings Conference Call – Page 46
Preliminary Results for Principal Joint Ventures


Principal Joint Ventures - Total                                            Dow Proportionate Share
Dollars in millions (unaudited)
                                      1Q09             1Q08           Dollars in millions (unaudited)
                                                                                                          1Q09             1Q08
Sales                              $2,463           $3,841            Sales                             $1,175          $1,802
Adjusted Sales1                    $2,021           $2,896            Adjusted Sales1                      $979         $1,390
EBIT2                                 $137             $893           EBIT2                                  $59            $380
Depreciation &                                                        Depreciation &
Amortization                          $127             $120           Amortization                           $58              $55
                                                                      Equity Earnings3                       $59            $275



1   Adjusted Sales defined as Sales for these joint ventures less sales to Dow and/or to other Dow joint ventures.
2   EBIT defined as earnings before interest, income taxes and noncontrolling interests.
3   First quarter 2009 Equity Earnings from Principal Joint Ventures includes pretax charges totaling $29 million for the Company’s
    share of a restructuring charge recognized by Dow Corning Corporation.




                                      1Q09 Earnings Conference Call – Page 47
Supplemental Information (Heritage ROH)

Certain items affecting results
Dollars in millions

                                                        Pretax
                                                      Impact (1)
                                               Three Months Ended
                                              3/31/09         3/31/08
Restructuring and asset impairments                   $(22)        $(12)
Dow transaction-related costs                          (79)             -
Hurricane-related                                       (2)             -
Total                                           $(103)             $(12)




(1) Impact on “(Loss) earnings before income taxes”




                                      1Q09 Earnings Conference Call – Page 48

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Q1 2009 Earning Report of Dow Chem Co.

  • 1. The Dow Chemical Company 1Q 2009 Earnings Conference Call April 30, 2009 1Q09 Earnings Conference Call
  • 2. SEC Disclosure Rules Some of our comments today may include statements about our expectations for the future. Those expectations involve risks and uncertainties. Dow cannot guarantee the accuracy of any forecasts or estimates, and we do not plan to update any forward-looking statements if our expectations change. If you would like more information on the risks involved in forward-looking statements, please see our annual report and our SEC filings. In addition, some of our comments may reference non-GAAP financial measures. Where available, a reconciliation to the most directly comparable GAAP financial measures and other associated disclosures are provided on the internet at www.dow.com in the Financial Reports page of the Investor Relations section. 1Q09 Earnings Conference Call – Page 2
  • 3. Agenda Recent Achievements & 2009 Areas of Focus Restructuring, De-leveraging and Synergies 1Q09 Financial Performance & Business Trends Dow Advanced Materials Update Outlook & Priorities 1Q09 Earnings Conference Call – Page 3
  • 4. Recent Achievements Re-negotiated financing of Rohm and Haas acquisition Re-structured acquisition terms to preserve financial flexibility and advance strategy Announced sale of Morton salt, hours after acquisition close Increased acquisition-related cost synergy target Validated acquisition growth synergies of $3 billion Announced and implemented cost reduction actions that contributed to 1Q09 results 1Q09 Earnings Conference Call – Page 4
  • 5. 2009 Areas of Focus Strengthening our balance sheet to protect our investment grade credit rating Managing business through uncertain operating environment Successfully integrating Rohm and Haas 1Q09 Earnings Conference Call – Page 5
  • 6. De-leveraging Plan Asset sales Debt and equity issuances Debt to EBITDA well within covenants Bridge loan pay down by end-2009 Debt to total capital less than 50% by year-end 1Q09 Earnings Conference Call – Page 6
  • 7. Morton Salt Divestiture Exceeds Expectations Met communicated timeline on Signing And … Exceeded expectations on value Over delivered by $0.2B ̶ $1.7B Morton Salt versus the target of $1.5B ̶ 6.1x gross proceeds/EBITDA 1Q09 Earnings Conference Call – Page 7
  • 8. Divestment Plan Potential Value Previously Discussed $3+ billion TRN South East Asia olefins & derivatives business Morton Salt Calcium Chloride Olefins & Derivatives Envelope $4-6 billion K-Dow successor Regional plays Aromatics & Derivatives Envelope $1-2 billion SB Rubber SB Latex Stand-Alone Assets $15+ billion Dow AgroSciences Others Total $23-26 billion 1Q09 Earnings Conference Call – Page 8
  • 9. 2009 Operating Plan Deliver on 4Q08 restructuring program “Right-size” global footprint Reduce costs and defer or eliminate capital spending Deliver acquisition synergies Total run rate up to ~$2.5 billion by end-2010 1Q09 Earnings Conference Call – Page 9
  • 10. 4Q08 Restructuring Progress Delivered approximately half of targeted global workforce reduction 17% ahead of planned savings Expect to be at $500 million run rate by end- 2009 1Q09 Earnings Conference Call – Page 10
  • 11. 1Q09 Financial Highlights 1Q09 sales were $9.1 billion, down 39% vs. 1Q08 ̶ Double-digit declines in all geographies and all operating segments, except Dow AgroSciences ̶ Volume declined 19% vs. 1Q08; price down 20% vs. 1Q08 Dow AgroSciences set quarterly sales and EBIT(1) records EBIT increased sequentially, with largest percentage improvement in Performance segments, excluding Dow AgroSciences Further drop in feedstock and energy costs ̶ $3.1 billion (49%) lower than 1Q08 Accelerated cost reductions partly offset price and volume declines (1) Earnings before interest, income taxes and noncontrolling interests (“EBIT”). A reconciliation of EBIT to “Net Income Attributable to The Dow Chemical Company” is provided in the Appendix. 1Q09 Earnings Conference Call – Page 11
  • 12. 1Q09 Financial Performance Dollars in millions (except per share amounts) 1Q09 1Q08 Change Sales $9,087 $14,824 (39)% Price (20)% Volume (19)% Purchased feedstock & energy costs (49)% Equity earnings $65 $274 (76)% Equity earnings, excluding certain items1 $94 $274 (66)% Earnings per share – diluted $0.03 $0.99 (97)% Earnings per share – diluted, excluding certain items1 $0.12 $0.99 (88)% 1 See Appendix for Supplemental Information regarding certain items. 1Q09 Earnings Conference Call – Page 12
  • 13. 1Q09 Financial Performance Dollars in millions (except per share amounts) 1Q09 4Q08 Change Sales $9,087 $10,899 (17)% Price (17)% Volume (0)% Purchased feedstock & energy costs (27)% Equity earnings (losses) $65 $(4) n/a Equity earnings (losses), excluding certain items1 $94 $(4) n/a Earnings (Loss) per share – diluted $0.03 $(1.68) n/a Earnings (Loss) per share – diluted, excluding certain items1,2 $0.12 $(0.62) n/a 1 See Appendix for Supplemental Information regarding certain items. 2 In addition, the interruption of operations caused by the hurricanes resulted in an estimated pretax $15 million in the fourth quarter of 2008 in lost margin on lost sales, the equivalent of $0.01 per share, which is not included in the amounts presented in the table. 1Q09 Earnings Conference Call – Page 13
  • 14. 1Q09 Earnings Per Share Reconciliation Reported earnings per share $0.03 Restructuring charges 0.02 Acquisition-related expenses 0.04 Dow Corning restructuring 0.03 Earnings per share – diluted, excluding certain items $0.12 See Appendix for Supplemental Information regarding these items. 1Q09 Earnings Conference Call – Page 14
  • 15. Volume Up from December Lows Pace of decline has begun to moderate excluding Agricultural Sciences Volume (millions of units), Monthly improvements in demand Business conditions began to stabilize March was the strongest month of the quarter Oct- Nov- Dec- Jan- Feb- Mar- 08 08 08 09 09 09 1Q09 Earnings Conference Call – Page 15
  • 16. Dow Global Demand Impact Across Industries % of total 2008 sales in billions $ High Medium Sensitivity to downturn Net of Hydrocarbons & Energy and Unallocated Low 100% = 48.2 4.5 19.1 24.6 Construction 5 13 4 21 Transportation 7 Electronics 5 14 13 Distribution/3rd Party Sales 19 6 1 30 8 Mining 100 10 Consumer Goods 19 14 Industrial Market 11 26 2 Paper & Pulp 4 16 Health Care 2 8 4 Food 14 3 2 10 Agriculture 1 5 Source: Dow Analysis Total DOW AG BP&C PP&C* * Incl Market-Facing-Businesses 1Q09 Earnings Conference Call – Page 16
  • 17. Performance Portfolio Demand Trend Specialty businesses showed pricing resiliency excluding Agricultural Sciences Volume (millions of units), Most notable improvement experienced in March Volume rebounded significantly from Dec 2008 low Oct- Nov- Dec- Jan- Feb- Mar- 08 08 08 09 09 09 1Q09 Earnings Conference Call – Page 17
  • 18. Basics Portfolio Demand Trend Chain de-stocking began to excluding Hydrocarbons & Energy moderate in 1Q09 Volume (millions of units), Production levels bounced back as manufacturing assets ran in line with demand Dow’s polyethylene volume up 10% from 4Q08 Oct- Nov- Dec- Jan- Feb- Mar- 08 08 08 09 09 09 1Q09 Earnings Conference Call – Page 18
  • 19. Cost Control SARD down $93 million vs. 1Q08 ̶ Despite 8% increase in Dow AgroSciences Spending down $270 million vs. 1Q08 and 4Q08 Remain on track to achieve capital spending commitment 1Q09 Earnings Conference Call – Page 19
  • 20. Operating Rate Trend 80% Dow’s 1Q09 operating rate was 68% vs. 64% in 4Q08 75% 70% Clear improvement in rates from historic low reached 65% in Dec 2008 60% Continue to tightly manage 55% operations 50% Production being matched 45% to demand 40% Oct- Nov- Dec- Jan- Feb- Mar- 08 08 08 09 09 09 1Q09 Earnings Conference Call – Page 20
  • 21. Heritage ROH: 1Q09 Financial Performance Dollars in millions 1Q09 1Q08 Change Net Sales $1,772 $2,507 (29)% Price (3)% Volume (26)% (Loss) Earnings before income taxes $(58) $233 (125%) (Loss) Earnings before income taxes, excluding certain items1 $45 $245 (82%) 1 See Appendix for Supplemental Information regarding certain items. Gradual improvements in 1Q09 in almost all business units Encouraging signs of recovery in Electronic Materials businesses, led by Asia Challenging coatings market conditions partially offset by cost reductions, margin management and new product launches 1Q09 Earnings Conference Call – Page 21
  • 22. Organizational Structure The Dow Chemical Company Andrew Liveris, Chairman & CEO Dow Advanced Materials Pierre Brondeau, President & CEO Coatings Building & Construction Marketing Human Resources Luis Fernandez Luis Fernandez Torsten Kraef Torsten Kraef Ruby Chandy Ruby Chandy Jenifer Jenifer Reed Specialty Materials Research & Electronic Materials Legal Peter Davies Peter Davies Development Yi Hyon Paik Yi Hyon Paik Ken Fitzpatrick Ken Fitzpatrick A.N. Sreeram A.N. Sreeram Adhesives & Functional Asia/RDE Growth Manufacturing, Public Affairs Polymers Agenda Engineering & EHS Patrice Barthelmes Mark Douglas Brian McPeak Brian McPeak Patrice Barthelmes Mark Douglas Don Taylor Don Taylor Business Services Finance Jim Varilek Jim Varilek Alfonso Escudero Alfonso Escudero Heritage Dow leaders denoted in red. Heritage ROH leaders denoted in green. 1Q09 Earnings Conference Call – Page 22
  • 23. Creating Large High-Growth Global Businesses Coatings (~$3.5B business): Leadership in architectural and industrial coatings business. Integration of acrylics, latexes, epoxies, polyurethanes and water soluble polymer technologies. Building & Construction (~$2.3B business): Global leadership position in insulation and weather protection materials like foams and films, as well as construction chemicals based on cellulosics, emulsion polymers, rheology modifiers and dispersants for the building and construction industry. Water (~$1B business): Leading component provider servicing the ever growing demand for pure water for industrial and consumable markets. Biocides (~$0.6B business): Global leadership position in bio-safety & preservation in consumable (food, paper/pulp, wood, paints, cleaners, fuel, health & beauty aids) goods. Household & Personal Care (~$0.7B business): Leadership in conditioning polymers combined with thickeners and fixatives in personal care and environmentally friendly additives. 1Q09 Earnings Conference Call – Page 23
  • 24. Creating Large High-Growth Global Businesses Electronic Materials (~$2B business): Global leadership in lithography/CMP for semiconductor fabrication, interconnect for circuit board and packaging, flat panel display, photovoltaic metallization. Paper, Carpet & Textiles (~$2B business): Global leadership position in emulsions and other products for several markets and applications like paper, paperboard, carpet & floor covering, leather, graphic arts, etc. Adhesives (~$0.7B business): Leading provider of formulated adhesives, adhesive polymers and pressure- sensitive adhesives for packaging and other applications. Cellulosics (~$1B business): Global leadership position in cellulose based products and solutions for the food, pharma and other industries. 1Q09 Earnings Conference Call – Page 24
  • 25. Lockdown Period and Clean Team Information Goal: Create Action Plans to Deliver Growth and Cost Synergy Targets Lockdowns ̶ Transfer of knowledge and business confidential information between companies ̶ Over 1,000 Dow and ROH employees engaged ̶ Spanned 3 to 4 week period ̶ Included Functions, Businesses and Geographies Clean Team Information ̶ Accelerates integration and cost synergy capture ̶ Prepared by 3rd party consultants and retirees ̶ “Play Book” to enable tactical (<1 year) and strategic (3-5 years) growth 1Q09 Earnings Conference Call – Page 25
  • 26. Cost Synergies by Category Announced Estimated Synergies Synergies Category (MM$) % (MM$) % Purchasing Synergies including Raw Materials 280 31% 390 30% Shared Services and Governance 280 31% 380 29% Mnfg. / Supply Chain Work Process Improvements 160 17% 280 22% Corporate Business Development Overlap 80 9% 50 4% ROH Announced Restructurings 110 12% 200 15% Total 910 100% 1,300 100% 43% increase in cost synergies from $910 million to $1.3 billion 1Q09 Earnings Conference Call – Page 26
  • 27. Top Synergy Projects Function Project Description Purchasing Raw Materials Manufacturing & Engineering MRO / Equipment Information Technology IT Infrastructure Consolidation Purchasing Hydrocarbons and Energy Marketing & Sales / Commercial Marketing and Sales / Business Overlap Manufacturing & Engineering Manufacturing Footprint Optimization Supply Chain Logistics and Packaging Shared Services Corporate Services and IT Information Technology I/S Organizational Consolidation 100+ projects identified Top 12 projects represent $650 million of $1.3 billion run rate target Intend to be at 60% run rate 12 months after closing 1Q09 Earnings Conference Call – Page 27
  • 28. Examples of >$100MM Annual Sales Growth Synergies Coatings: Cross selling at key accounts – Acrylic/Latex/Epoxy/PU Building and Construction: Leverage Dow’s market channel for ROH products Personal Care: Short-term opportunity for rheology modifiers, opacifiers, preservatives Advanced Packaging/Electronics: Dow formulated epoxies – ROH growth platform Adhesives: Leverage Dow PE/PU Technology in ROH Adhesives for packaging and transportation Russia: Leverage ROH footprint/organization in Russia 1Q09 Earnings Conference Call – Page 28
  • 29. 2009 Outlook – Dow Advanced Materials Full-year sales down vs. 2008, in line with Specialty Chemical industry Electronics significantly impacted by inventory correction and reduced consumer spending ̶ High gross margin magnifies impact Demand appears to be improving ̶ Four months of sequential growth for overall ROH (excluding Salt) ̶ Asia chemical year-on-year growth in March ̶ Electronic material inventory correction over 1Q09 Earnings Conference Call – Page 29
  • 30. Path Moving Forward Top priority is to maintain EH&S performance Intense customer focus – “We will not give our customers a reason to go elsewhere” Quickly capturing the $1.3B in cost synergies Committed to growth by building the premier Advanced Materials business 1Q09 Earnings Conference Call – Page 30
  • 31. Outlook Some signs that pace of economic decline is moderating Customers continue to manage low inventory levels Dow’s vast geographic and market reach well- positioned to benefit as recovery progresses Continue to assume 2009 will be a year of global recession 1Q09 Earnings Conference Call – Page 31
  • 32. 2009 Priorities Successfully integrate Rohm and Haas to capture growth and preserve their business model Realize Rohm and Haas cost synergy targets and accelerate Dow’s own restructuring plan Execute divestment plan to support bridge loan pay down and protect our investment grade credit rating Actively manage costs and operations through the economic downturn 1Q09 Earnings Conference Call – Page 32
  • 33. Appendix 1Q09 Earnings Conference Call
  • 34. Performance Plastics Tech. Dollars in millions 1Q09 1Q08 Specialty Licensing & Plastics & Dow C atalyst Automotive Sales $2,435 $3,963 Elastomers Dow Building Solutions Price down 11%; Volume down 28% EBIT $30 $329 Sales Equity earnings included in EBIT $2 $18 Dow Epoxy Polyurethanes & PU Systems 1Q09 Trends Price and volume down in all Sales Price Volume geographic areas Dow Automotive ↓ ↓ ↓ Volumes impacted by continued Dow Building Solutions ↓ ↓ ↓ slowdown in automotive and Dow Epoxy ↓ ↓ ↓ construction activity Polyurethanes & PU Systems ↓ ↓ ↓ Specialty Plastics & Elastomers ↓ ↓ ↓ Most businesses saw gradual Technology Licensing & Catalyst ↓ - ↓ increase in volume toward latter part of 1Q09 1Q09 Earnings Conference Call – Page 34
  • 35. Performance Chemicals Dollars in millions 1Q09 1Q08 Designed Polymers Sales $1,517 $2,323 Specialty C hemicals Price down 7%; Volume down 28% EBIT $115 $271 Sales Certain items* included in EBIT $(29) $- Equity earnings included in EBIT $11 $95 Dow Latex * See Appendix for Supplemental Information regarding certain items. 1Q09 Trends Lower sales in Dow Water Sales Price Volume Solutions due to fewer large Designed Polymers ↓ ↓ ↓ desalination projects Dow Latex ↓ ↓ ↓ Specialty Chemicals reported Specialty Chemicals ↓ ↓ ↓ record sales for aircraft de-icing fluids Weak demand in industrial sectors partially offset by late- quarter improvement, particularly in China 1Q09 Earnings Conference Call – Page 35
  • 36. Agricultural Sciences Dollars in millions 1Q09 1Q08 Seeds & Sales $1,446 $1,314 Traits Price flat; Volume up 10% EBIT $338 $331 Sales Equity earnings included in EBIT $1 $1 Ag C hem 1Q09 Trends Record 1Q sales and EBIT, Sales Price Volume driven by strong performance in Agricultural Chemicals ↑ - ↑ Seeds & Traits Seeds and Traits ↑ - ↑ Results reflect organic growth and favorable impact from acquisitions Ag Chem volume increased, with new product sales nearly doubling 1Q09 Earnings Conference Call – Page 36
  • 37. Basic Plastics Dollars in millions 1Q09 1Q08 Polystyrene Sales $1,847 $3,492 Polypropylene Price down 35%; Volume down 12% EBIT $4 $427 Sales Equity earnings included in EBIT $13 $42 Polyethylene 1Q09 Trends Double-digit price and volume Sales Price Volume declines for segment vs. 1Q08 Polyethylene ↓ ↓ ↓ Demand growth vs. 4Q08 Polypropylene ↓ ↓ ↓ reflected re-stocking throughout Polystyrene ↓ ↓ ↓ value chains Polyethylene demand down 4% vs. 1Q08, but up 10% vs. 4Q08 1Q09 Earnings Conference Call – Page 37
  • 38. Basic Chemicals Dollars in millions 1Q09 1Q08 EO/EG Sales $801 $1,559 Price down 21%; Volume down 28% EBIT $(92) $159 Sales Equity earnings included in EBIT $40 $97 C ore C hemicals 1Q09 Trends Double-digit price and volume Sales Price Volume declines vs. 1Q08 Core Chemicals ↓ ↓ ↓ Caustic soda sales impacted by Ethylene Oxide/Ethylene Glycol ↓ ↓ ↓ weaker alumina and pulp and paper industry fundamentals Weak PVC demand for building and construction continued EO/EG industry fundamentals remain weak 1Q09 Earnings Conference Call – Page 38
  • 39. Reconciliation of Non-GAAP Financial Measure (Heritage Dow) Three Months Ended Dollars in millions 3/31/09 3/31/08 EBIT $159 $1,385 + Interest income 12 24 - Interest expense and amortization of debt discount 154 145 - Provision (Credit) for income taxes (18) 299 - Net income attributable to noncontrolling interests 11 24 Net Income Attributable to The Dow Chemical Company $24 $941 1Q09 Earnings Conference Call – Page 39
  • 40. Supplemental Information (Heritage Dow) Certain items affecting results Earnings in the first quarter 2009 were unfavorably impacted by three items: Net pretax adjustment to the 2008 restructuring charge of $19 million resulting from adjustments to severance, reflected in Unallocated and Other. Pretax charges totaling $48 million for legal expenses and other transaction costs related to the April 1, 2009 acquisition of Rohm and Haas Company, reflected in Unallocated and Other. Pretax charges totaling $29 million for the Company’s share of a restructuring charge recognized by Dow Corning Corporation, a 50 percent owned nonconsolidated affiliate of the Company; these charges are reflected in “Equity in earnings of nonconsolidated affiliates” and impact the Performance Chemicals segment. 1Q09 Earnings Conference Call – Page 40
  • 41. Supplemental Information (Heritage Dow) Certain items affecting results Results for the fourth quarter of 2008 were negatively impacted by the following items: Pretax costs totaling $54 million related to Hurricanes Gustav and Ike, which hit the U.S. Gulf Coast in the third quarter. These costs, which primarily included the repair of property damage and unabsorbed fixed costs, are included in “Cost of sales” in the consolidated statements of income and reflected in the operating segments as follows: $13 million in Performance Plastics, $1 million in Performance Chemicals, $3 million in Basic Plastics, $15 million in Basic Chemicals, $16 million in Hydrocarbons and Energy, and $6 million in Unallocated and Other. Pretax legal expenses and other costs of $69 million related to the K-Dow transaction that were expensed upon Petrochemical Industries Company’s refusal to close the K-Dow transaction on January 2, 2009. These costs are shown as “Cost of sales” in the consolidated statements of income and reflected in Unallocated and Other. Goodwill impairment losses of $239 million related to the Dow Automotive ($209 million against Performance Plastics) and Polypropylene ($30 million against Basic Plastics) reporting units. The losses are shown as “Goodwill impairment losses” in the consolidated statements of income. Net pretax restructuring charges of $839 million. In December 2008, the Company’s Board of Directors approved a restructuring plan as part of a series of actions to advance the Company’s strategy and respond to the recent, severe economic downturn. The restructuring plan includes the shut down of a number of facilities and a global workforce reduction. As a result, the Company recorded restructuring charges totaling $785 million, including asset write-downs and write-offs of $336 million, severance costs of $321 million and costs associated with exit or disposal activities (such as pension curtailment costs and environmental remediation) of $128 million. In addition, the Company recorded a $60 million unfavorable adjustment to restructuring charges recorded in the fourth quarter of 2007 and a $6 million favorable adjustment to restructuring charges recorded in the third quarter of 2006. The net impact of the fourth quarter charges and adjustments, which is shown as “Restructuring charges” in the consolidated statements of income, impacted all operating segments. Pretax charge of $17 million for purchased in-process research and development (“IPR&D”) related to the recent acquisition of assets of Süwestsaat GbR. The charge is shown as “Purchased in-process research and development charges (credit)” in the consolidated statements of income and reflected in Agricultural Sciences. Pretax charges totaling $31 million for legal expenses and other transaction costs related to the pending acquisition of Rohm and Haas Company. These charges are shown as “Acquisition-related expenses” in the consolidated statements of income and reflected in Unallocated and Other. 1Q09 Earnings Conference Call – Page 41
  • 42. Supplemental Information (Heritage Dow) Certain items affecting results Dollars in millions (except per share amounts) Pretax Impact on Impact Impact (1) Net Income (2) on EPS (3) Three Months Ended Three Months Ended Three Months Ended 3/31/09 3/31/08 3/31/09 3/31/08 3/31/09 3/31/08 Restructuring charges $(19) - $(17) - $(0.02) - Acquisition-related expenses (48) - (41) - (0.04) - Dow Corning restructuring (29) - (27) - (0.03) - Total $(96) - $(85) - $(0.09) - (1) Impact on “Income before Income Taxes” (2) Impact on “Net Income Attributable to The Dow Chemical Company” (3) Impact on “Earnings per common share – diluted” 1Q09 Earnings Conference Call – Page 42
  • 43. Supplemental Information (Heritage Dow) Certain items affecting results Dollars in millions (except per share amounts) Pretax Impact on Impact Impact (1) Net Income (2) on EPS (3) Three Months Ended Three Months Ended Three Months Ended 12/31/08 12/31/08 12/31/08 Goodwill impairment losses $(239) $(230) $(0.25) Restructuring charges (839) (628) (0.68) Impact of Hurricanes Gustav and Ike (4) (54) (34) (0.03) K-Dow related expenses (69) (44) (0.05) Purchased in-process research and development charges (17) (17) (0.02) Acquisition-related expenses (31) (25) (0.03) Total $(1,249) $(978) $(1.06) (1) Impact on “Income before Income Taxes” (2) Impact on “Net Income Attributable to The Dow Chemical Company” (3) Impact on “Earnings per common share – diluted” (4) In addition, the interruption of operations caused by the hurricanes resulted in an estimated pretax $15 million in lost margin on lost sales, the equivalent of $0.01 per share, which is not included in the amounts presented in the table. 1Q09 Earnings Conference Call – Page 43 4Q08
  • 44. Certain Items Affecting Results (Heritage Dow) Certain items reducing EBIT by Operating Segment Dollars in millions Three Months Ended Three Months Ended 3/31/09 3/31/08 12/31/08 Performance Plastics - - $(333) Performance Chemicals $(29) - (25) Agricultural Sciences - - (20) Basic Plastics - - (181) Basic Chemicals - - (118) Hydrocarbons and Energy - - (34) Unallocated and Other (67) - (538) Total $(96) - $(1,249) 1Q09 Earnings Conference Call – Page 44
  • 45. 4Q08 Loss Per Share Reconciliation Reported loss per share $(1.68) Goodwill impairment losses 0.25 Restructuring charges 0.68 Impact of Hurricanes Gustav and Ike 0.03 K-Dow related expenses 0.05 Purchased in-process R&D related to acquisitions 0.02 ROH acquisition-related expenses 0.03 Loss per share excluding certain items $(0.62) 1Q09 Earnings Conference Call – Page 45 4Q08
  • 46. Principal Joint Ventures (Heritage Dow) Although Dow participates in many joint ventures, the most significant joint ventures from a financial perspective are: Americas Styrenics LLC* Compañía MEGA S.A. Dow Corning Corporation EQUATE Petrochemical Company K.S.C. Equipolymers MEGlobal The OPTIMAL Group of Companies The SCG-DOW Group Univation Technologies, LLC * Formed May 2008. For more information on Dow’s joint venture activities, please see our Joint Venture White Paper on Dow’s website at http://www.dow.com/about/pdf/djv_0408.pdf. 1Q09 Earnings Conference Call – Page 46
  • 47. Preliminary Results for Principal Joint Ventures Principal Joint Ventures - Total Dow Proportionate Share Dollars in millions (unaudited) 1Q09 1Q08 Dollars in millions (unaudited) 1Q09 1Q08 Sales $2,463 $3,841 Sales $1,175 $1,802 Adjusted Sales1 $2,021 $2,896 Adjusted Sales1 $979 $1,390 EBIT2 $137 $893 EBIT2 $59 $380 Depreciation & Depreciation & Amortization $127 $120 Amortization $58 $55 Equity Earnings3 $59 $275 1 Adjusted Sales defined as Sales for these joint ventures less sales to Dow and/or to other Dow joint ventures. 2 EBIT defined as earnings before interest, income taxes and noncontrolling interests. 3 First quarter 2009 Equity Earnings from Principal Joint Ventures includes pretax charges totaling $29 million for the Company’s share of a restructuring charge recognized by Dow Corning Corporation. 1Q09 Earnings Conference Call – Page 47
  • 48. Supplemental Information (Heritage ROH) Certain items affecting results Dollars in millions Pretax Impact (1) Three Months Ended 3/31/09 3/31/08 Restructuring and asset impairments $(22) $(12) Dow transaction-related costs (79) - Hurricane-related (2) - Total $(103) $(12) (1) Impact on “(Loss) earnings before income taxes” 1Q09 Earnings Conference Call – Page 48