Dow Delivers Earnings of $0.35 Per Share or Adjusted Earnings of $0.61 Per Share;

Emerging Geographies post 10th Consecutive Quarter of Year-Over-Year Volume Growth

Dubai, United Arab Emirates (UAE) - May 13 2012 - The Dow Chemical Company (NYSE: DOW) reported sales of $14.7 billion in the first quarter of 2012, in line with the year-ago period. Adjusted sales increased 4 percent versus the prior year, representing the tenth consecutive quarter of year-over-year sales growth.

Volume declined 1 percent, but was up 3 percent on an adjusted basis with increases in Agricultural Sciences (12 percent), Feedstocks and Energy (7 percent), and Performance Materials (2 percent).

On an adjusted, geographic basis, volume gains in Europe, Middle East and Africa (EMEA) (7 percent) and North America (2 percent) more than offset declines in Latin America and Asia Pacific.

Emerging geographies posted a tenth consecutive quarter of year-over-year volume growth on an adjusted basis, led by gains this quarter in the Middle East, Africa, India, and Eastern Europe.

Dow's global operating rate was 84 percent, up 12 percentage points sequentially and 1 percentage point versus the year-ago period. Research and Development (R&D) expenses were up 1 percent versus the same period last year. The Company continued to invest in its technology-driven segments, including Coatings and Infrastructure Solutions, Electronic and Functional Materials, and Agricultural Sciences. 

Selling, General and Administrative (SG&A) expenses rose 1 percent versus the prior year, in part due to increased spending to support growth initiatives and new product launches in Agricultural Sciences.

Coatings and Infrastructure Solutions sales were $1.7 billion, down 2 percent compared with the same period last year. Volume was flat versus the prior year, and price was down 2 percent. Dow Building and Construction reported sales gains across all geographic areas, except Europe, where the construction industry continues to contract.

Dow Water and Process Solutions reported record first quarter sales, with gains in both price and volume. Demand continued to be particularly strong in reverse osmosis membranes in industrial water applications. Dow Coating Materials reported a decrease in sales as price declines more than offset a modest increase in volume. In architectural coatings, volume declined in most geographic areas, driven in part by the lack of customer inventory restocking witnessed in the first quarter of 2011 as industry-wide supply issues abated in the latter part of 2010. Dow Coating Materials' hiding platform recorded several wins with EVOQUE™ technology as customers continue to reformulate paints to enhance performance and improve the efficiency of titanium dioxide usage.

Sales in Performance Materials were $3.5 billion, down 2 percent compared with the same quarter last year. However, adjusted sales were flat as volume increases offset price declines. Dow Formulated Systems reported double-digit sales growth, with volume gains in all geographic areas except Asia Pacific, which continued to experience weak demand in the wind-energy sector. Dow Oil and Gas reported double-digit sales gains driven by strong sector fundamentals, particularly in North America due to the shale gas dynamic.

Sales in Performance Plastics were $3.6 billion. Volume gains in Asia Pacific and pricing initiatives in North America offset sales declines in EMEA and Latin America. Dow Elastomers posted new quarterly sales and EBITDA records. Sales in Performance Packaging declined over the previous year.

Sales in Feedstocks and Energy were $2.9 billion, up 13 percent from the same period last year. Volume increased 7 percent and price increased 6 percent.

Commenting on the results, Andrew N. Liveris, Dow's chairman and chief executive officer said: "Dow again demonstrated the strength of its transformed portfolio, even as demand remained slow early in the quarter," said Andrew N. Liveris, Dow's chairman and chief executive officer. "We have now delivered top-line growth for ten consecutive quarters and the benefit of our balanced portfolio was again evident: We captured demand gains in developed regions and posted a tenth consecutive quarter of volume increases in rapidly growing emerging economies.

"We exited the quarter with momentum, and looking forward we remain resolutely focused on our strategic priorities - capturing the benefits of new products and technologies, such as POWERHOUSE™ and EVOQUE™, which will generate value in local markets for both our customers and our shareholders. In addition, we are capitalizing on our world-class feedstock advantage and balanced, integrated portfolio, as well as exhibiting diligent operating and capital efficiency. All of this places us in a unique position to drive earnings growth and continue our 100-year legacy of shareholder remuneration" he said.

Markus Wildi, president, Dow Middle East said, "The broad diversity of Dow's portfolio gives us the unique ability to pivot - taking advantage of growth where it is happening most. We are continuing to invest in the Middle East market and expand our geographical footprint to address regional needs. We anticipate that global growth will gain momentum as we move through the second quarter and into the remainder of the year, and we are committed and focused on execution, and the delivery of our short- and long-term targets."

Middle East highlights for Q1 2012 include:

Investment and expansion

  • Dow announced plans to invest in a new manufacturing facility for its Dow Coating Materials (DCM) business unit in the Kingdom of Saudi Arabia

  • Dow and the Saline Water Conversion Corporation (SWCC) announced a Memorandum of Understanding (MoU) to pursue Joint Development (JD) activities in desalination technologies

Social Investment

  • Dow Chemical in Kuwait recently sponsored and participated in the American Business Council Kuwait's (ABCK) annual business summit, 'Kuwait is Open for Business'

  • Dow Chemical in Kuwait sponsored the second Kuwait International Educators' Conference last month

  • Dow Chemical in Kuwait helped to advance public understanding and appreciation of environmental development and sustainability through its global sponsorship of Kuwait's "Environment Month"

The complete first quarter 2012 statement is available at:

http://www.dow.com/investors/earnings/2012/12q1earn.htm

(1) "Adjusted earnings per share" is defined as earnings per share excluding the impact of "Certain Items."

(2) "Adjusted sales" is defined as "Net Sales" excluding sales related to prior-period divestitures.

(3) EBITDA is defined as earnings (i.e., "Net Income") before interest, income taxes, depreciation and amortization.

(4) Net debt equals total debt ("Notes payable" plus "Long-term debt due within one year" plus "Long-Term Debt") minus "Cash and cash equivalents," and "Marketable securities and interest-bearing deposits."

About Dow
Dow (NYSE: DOW) combines the power of science and technology to passionately innovate what is essential to human progress. The Company connects chemistry and innovation with the principles of sustainability to help address many of the world's most challenging problems such as the need for clean water, renewable energy generation and conservation, and increasing agricultural productivity. Dow's diversified industry-leading portfolio of specialty chemical, advanced materials, agrosciences and plastics businesses delivers a broad range of technology-based products and solutions to customers in approximately 160 countries and in high growth sectors such as electronics, water, energy, coatings and agriculture. In 2011, Dow had annual sales of $60 billion and employed approximately 52,000 people worldwide. The Company's more than 5,000 products are manufactured at 197 sites in 36 countries across the globe. References to "Dow" or the "Company" mean The Dow Chemical Company and its consolidated subsidiaries unless otherwise expressly noted. More information about Dow can be found at www.dow.com.

About Dow in the Middle East
Dow has a longstanding relationship with the Middle East beginning with the establishment of manufacturing and commercial facilities in the United Arab Emirates more than 35 years ago. Since then, Dow has established a solid presence in the Middle East petrochemicals industry, partnering with leading regional companies to set up state-of-the-art petrochemical complexes across the region. For 17 years, Dow and Petrochemical Industries Company K.S.C. (PIC) of Kuwait have shared one successful milestone after another, partnering on six industry-leading joint ventures. Saudi Aramco and Dow have formed a joint venture. Sadara, to build, own and operate a world-scale integrated chemicals complex in the Eastern Province of the Kingdom of Saudi Arabia. From the entrepreneurship initiatives of LoYac in Kuwait to the new Dow Middle East and Africa R&D Center at the King Abdullah University of Science and Technology in Saudi Arabia, Dow actively supports the social and economic aspirations of the communities where it operates. For more information about Dow in the Middle East, please visit:

www.dowmiddleeast.com

Note: The forward-looking statements contained in this document involve risks and uncertainties that may affect the Company's operations, markets, products, services, prices and other factors as discussed in filings with the Securities and Exchange Commission. These risks and uncertainties include, but are not limited to, economic, competitive, legal, governmental and technological factors. Accordingly, there is no assurance that the Company's expectations will be realized. The Company assumes no obligation to provide revisions to any forward-looking statements should circumstances change, except as otherwise required by securities and other applicable laws.

For further information on Dow:
Fadi Fahem
Dow Middle East
Tel:  +971 453 7093
ffahem@dow.com

Nisreen Sarryeh  
Weber Shandwick
T +971 4 321 0077
dow@ws-mena.com

© Press Release 2012