BEST ✨ Call Girls In Indirapuram Ghaziabad ✔️ 9871031762 ✔️ Escorts Service...
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
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