Significant Price Increases and Consistent Equity Earnings Mitigate Impacts
of Declining Global Demand, Record High Feedstock and Energy Costs, and
Hurricanes
MIDLAND, Mich., Oct. 23 /PRNewswire-FirstCall/ --
Third Quarter 2008 Highlights
-- Sales for the quarter increased 13 percent from the same period last
year to $15.4 billion.
-- Price increased 22 percent, with double-digit price gains in all
operating segments and all geographic areas. This was the largest
year-over- year percentage increase in price since the first quarter of
2005.
-- Volume was down 9 percent globally, reduced by the impact of
Hurricanes Gustav and Ike, further weakening of demand, and the Company's
focus on implementing price increases in the quarter. Excluding the impact
of acquisitions, divestitures and the hurricanes, volume was down 5
percent.
-- Earnings for the quarter of $0.46 per share were unfavorably
impacted by certain items such as the hurricanes ($0.09 per share in costs
and $0.03 per share in margin on lost sales), purchased in-process research
and development charges of $0.03 per share, and acquisition-related
expenses of $0.02 per share (see supplemental information at the end of the
release for a description of these items).
-- Purchased feedstock and energy costs surged 48 percent, an increase
of $2.6 billion over the same quarter last year, the largest year-over-year
increase in the Company's history and the third consecutive quarter in
which these costs reached new highs. Margin expansion was not achieved in
both Basic and Performance segments, as the hurricanes idled approximately
80 percent of the Company's North American capacity in September, when
feedstock costs were declining.
-- Agricultural Sciences set a new third quarter sales and EBIT(1)
record, with sales up 24 percent to $976 million. Price was up 16 percent
and volume up 8 percent compared with the same quarter last year.
-- Equity earnings were $266 million for the quarter. This was the
seventh consecutive quarter that earnings from joint ventures exceeded $250
million.
Comment
Andrew N. Liveris, Dow's chairman and chief executive officer, stated:
"Dow performed well in the third quarter despite a difficult economy and
increased costs. Our ability to take proactive measures, including the
implementation of two broad-based price increases and aggressive cost
controls, allowed us to post solid results against worsening market
conditions, record high raw material costs and two hurricanes on the U.S. Gulf
Coast."
3 Months Ended 9 Months Ended
(In millions, except for Sept 30 Sept 30
per share amounts) 2008 2007 2008 2007
Net Sales $15,411 $13,589 $46,615 $39,286
Net Income $428 $403 $2,131 $2,415
Earnings per Common Share $0.46 $0.42 $2.26 $2.49
Earnings per Common Share
Excluding Certain Items (1) $0.60 $0.84 $2.40 $2.91
(1) See supplemental information at the end of the release for a
description of these items. In addition, the interruption of
operations caused by the hurricanes in the third quarter of 2008
resulted in an estimated pretax $50 million in margin on lost sales,
the equivalent of $0.03 per share, which is not included in the
amounts presented in this table.
Review of Third Quarter Results
The Dow Chemical Company (NYSE: DOW) reported sales of $15.4 billion
for the third quarter of 2008, 13 percent higher than the same period last
year, setting a third quarter sales record.
Net income for the quarter was $428 million, reflecting $81 million in
costs (after tax) related to Hurricanes Gustav and Ike, a $27 million
charge for purchased in-process research and development related to recent
acquisitions, and expenses of $18 million related to the Company's pending
acquisition of Rohm and Haas. This compares with net income of $403 million
in the third quarter of 2007, which included a $362 million charge related
to a change in German tax law and a $39 million charge for purchased
in-process research and development.
Earnings for the quarter of $0.46 per share were unfavorably impacted
by the hurricanes ($0.09 per share in costs and $0.03 per share in margin
on lost sales), purchased in-process research and development charges of
$0.03 per share, and acquisition-related expenses of $0.02 per share (see
supplemental information at the end of the release for a description of
these items).
Price was 22 percent higher than the same quarter last year, with
double- digit increases in all operating segments and in all geographic
areas. This was the largest year-over-year percentage increase in price
since the first quarter of 2005. However, feedstock and energy costs surged
$2.6 billion over the same period last year. Margin expansion was not
achieved as the hurricanes idled approximately 80 percent of the Company's
Gulf Coast capacity in September, when feedstock costs were declining.
Volume was down 9 percent compared with the same quarter last year,
reflecting declining global demand, the impact of Hurricanes Gustav and
Ike, various asset shutdowns and divestitures, and the joint venture
formation of Americas Styrenics. Volume was also impacted by the Company's
focus on increasing selling prices in the quarter. Excluding the impact of
acquisitions, divestitures and the hurricanes, volume was down 5 percent.
Equity earnings were $266 million for the quarter, once again
demonstrating strong and consistent contributions from joint ventures to
the Company's results and marking the seventh consecutive quarter in which
equity earnings have exceeded $250 million.
"Dow performed well in the third quarter despite a difficult economy
and increased costs," said Andrew N. Liveris, Dow's chairman and chief
executive officer. "Our ability to take proactive measures, including the
implementation of two broad-based price increases and aggressive cost
controls, allowed us to post solid results against worsening market
conditions, record high raw material costs and two hurricanes on the U.S.
Gulf Coast."
Performance Plastics
In the Performance Plastics segment, third quarter sales increased 10
percent over the same period last year to $4.3 billion. Price increased 14
percent, with double-digit gains in all geographic areas, while volume
declined 4 percent. Despite robust price gains across the segment, selling
prices continued to lag significant increases in purchased feedstock and
energy costs, increases in other raw material costs, and the impact of
Hurricanes Gustav and Ike. Further declines in the North American
automotive and housing industries, coupled with softening demand in the
same industries in Europe and Asia Pacific, impacted results in a number of
business units including Dow Automotive, Dow Building Solutions, and
Specialty Plastics and Elastomers. Demand in Dow Polyurethanes declined, as
furniture and bedding applications softened. In contrast, Polyurethane
Systems reported continuing strong demand in oil and gas applications.
While margins declined for epoxy intermediates in the face of rising raw
material costs and additional industry capacity, recent acquisitions in
Epoxy Systems reported solid demand in wind energy and infrastructure
applications. Third quarter EBIT for Performance Plastics was $146 million,
compared with $409 million in the third quarter of 2007. Results for the
quarter included $35 million in hurricane-related costs.
Performance Chemicals
Sales in Performance Chemicals were $2.5 billion for the quarter, up 14
percent compared with $2.2 billion posted in the same period last year.
Globally, price was up 21 percent, with increases in all businesses and in
all geographic areas. In North America, Asia Pacific and Latin America,
price improved by more than 20 percent. Volume decreased 7 percent, due in
part to the impacts of Hurricanes Gustav and Ike, and the Company's focus
on increasing selling prices in the quarter. Designed Polymers reported
strong demand in food, pharmaceutical and personal care applications in Dow
Wolff Cellulosics, which partially offset weakness in construction
polymers. Dow Water Solutions reported growing demand for FILMTEC(TM)
reverse osmosis membranes and ion exchange resins, as global water industry
fundamentals remain strong due to water scarcity and growing demand.
Margins for Dow Latex expanded in the quarter, due to the Company's strong
focus on price, which was aided by a limited supply of a key raw material.
Demand for biocides was also strong, due to ongoing growth in oil and gas
exploration and production. Equity earnings in the segment were $137
million, up $47 million on better results from Dow Corning and OPTIMAL.
Performance Chemicals reported EBIT of $275 million for the quarter,
compared with $219 million for the same period last year.
Results for the quarter included $14 million in hurricane-related
costs, while results in the same period in 2007 included a charge of $9
million for purchased in-process research and development related to
acquisitions.
Agricultural Sciences
Agricultural Sciences posted sales of $976 million, 24 percent higher
than the same period last year and setting a third quarter sales record in
what is traditionally a seasonally slow quarter. Price was up 16 percent,
while volume grew 8 percent, reflecting organic growth and growth from
recent acquisitions. Dow AgroSciences' broad portfolio of both agricultural
chemicals and seeds continued to benefit from robust global demand for
agricultural output. Sales in seeds and traits increased in the quarter led
by higher demand for sunflower oil and seed in Latin America. Corn sales in
Brazil also rose in the quarter, due to an improved farm economy and a
solid performance from the Agromen acquisition. Strong demand was reported
for cereal and broadleaf crop herbicides in North America and northern
Europe, due to high cereal prices, an increase in planted acres and the
very successful launch of Pyroxsulam in Canada, which exceeded customer
expectations. Glyphosate sales were up in the quarter, driven by higher
price due to tight industry supply conditions. Strong volume growth
continued for new products Penoxsulam rice herbicide and Aminopyralid
herbicide for range and pasture. Spinetoram insecticide sales continued to
ramp-up from product launches in the United States. The business announced
two new bolt-on acquisitions in the quarter - Dairyland Seed and Renze
Hybrids. These represent the fifth and sixth acquisitions Dow AgroSciences
has completed since May 2007. Third quarter EBIT for Agricultural Sciences
was $61 million, which includes a charge of $27 million for purchased
in-process research and development related to recent acquisitions and $2
million in hurricane-related costs. This compares with EBIT of $15 million
in the year ago period, which included a charge of $50 million for
purchased in- process research and development related to acquisitions.
Basic Plastics
Sales in Basic Plastics rose 7 percent to $3.5 billion, up from $3.3
billion in the same period last year. Price increased 25 percent, and was
up in all businesses and in all geographic areas. Volume decreased 18
percent, due in part to the shutdown of polypropylene capacity in St.
Charles, Louisiana in the fourth quarter of 2007, the sale of polyethylene
assets in Cubatao, Brazil in the third quarter of 2007, the joint venture
formation of Americas Styrenics in May 2008, and the impacts of Hurricanes
Gustav and Ike. Robust price increases in Polyethylene more than offset
increases in purchased feedstock and energy costs. Demand for Polypropylene
was down, due to lower consumer spending and slowdowns in the housing and
automotive sectors. Equity earnings were $55 million, versus $39 million in
the same period last year on improved earnings from EQUATE. EBIT for Basic
Plastics was $481 million compared with $556 million in the same period
last year. Results in the quarter reflect a charge of $11 million for
hurricane-related costs.
Basic Chemicals
Basic Chemicals sales of $1.5 billion for the quarter were flat with
the same period last year. The segment recorded a 20 percent gain in price,
and a 20 percent decline in volume. Compared with last year, volumes were
lower due to the sale of the caustic soda business in Western Canada in
December 2007. Caustic soda prices benefited from ongoing favorable
industry supply/demand fundamentals, but demand for vinyl chloride monomer
used in polyvinylchloride ("PVC") production continued to decline as
end-use applications for PVC, namely residential building and construction
applications, remained extremely weak. Results for the Chlor-Vinyls
business were also impacted by Hurricanes Gustav and Ike, which extended an
earlier unplanned outage at the Company's facility in Freeport, Texas.
Volumes were down substantially in the Ethylene Oxide/ Ethylene Glycol
("EO/EG") business, due to weak industry fundamentals, new capacity from
Middle Eastern suppliers, and a decline in polyester fiber demand in Asia
Pacific. The EO/EG business was also negatively impacted by the two
hurricanes in the quarter. Equity earnings in Basic Chemicals were $61
million, versus $115 million in the year ago period due to lower results at
MEGlobal and EQUATE. EBIT was $64 million, compared with $205 million in
the third quarter of 2007. Results in the quarter reflect a charge of $26
million for hurricane-related costs.
Outlook
Commenting on the Company's outlook, Liveris said: "The global economy
is now feeling the full effects of the same economic issues that have
plagued the U.S. for the past several quarters. These issues have now been
exacerbated by the lack of credit, resulting in a drop in demand not only
in the U.S., but around the world. In our view, we will likely see a global
recession through most of 2009.
"Dow is well positioned, however, to weather this increasingly
difficult economic downturn. We have a strong balance sheet, we have a
track record of strong financial discipline and we are accelerating our
focus on what we can control, namely costs and capital, asset
restructuring, and other interventions. In addition, we will continue to
implement our transformational strategic actions, such as closing our
petrochemicals joint venture with PIC of Kuwait and closing our announced
acquisition of Rohm and Haas."
Dow will host a live Webcast of its third quarter earnings conference
call with investors to discuss its results, business outlook and other
matters today at 10:00 a.m. ET on http://www.dow.com.
(1) Earnings before interest, income taxes and minority interests
("EBIT"). A reconciliation of EBIT to "Net Income Available for Common
Stockholders" is provided following the Operating Segments table.
(R)(TM) Trademark of The Dow Chemical Company or an affiliated company
of Dow.
About Dow
With annual sales of $54 billion and 46,000 employees worldwide, Dow is
a diversified chemical company that combines the power of science and
technology with the "Human Element" to constantly improve what is essential
to human progress. The Company delivers a broad range of products and
services to customers in around 160 countries, connecting chemistry and
innovation with the principles of sustainability to help provide everything
from fresh water, food and pharmaceuticals to paints, packaging and
personal care products. 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 http://www.dow.com
Use of non-GAAP measures: Dow's management believes that measures of
income excluding certain items ("non-GAAP" measures) provide relevant and
meaningful information to investors about the ongoing operating results of
the Company. Such measurements are not recognized in accordance with
accounting principles generally accepted in the United States of America
("GAAP") and should not be viewed as an alternative to GAAP measures of
performance. Reconciliations of non-GAAP measures to GAAP measures are
provided in the Supplemental Information tables.
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.
Supplemental Information
Description of Certain Items Affecting Results:
Earnings in the third quarter of 2008 were unfavorably impacted by
costs related to Hurricanes Gustav and Ike, which hit the U.S. Gulf Coast
in the third quarter. These costs, which included the repair of property
damage, clean-up costs, unabsorbed fixed costs and inventory write-offs,
totaled $127 million pretax and were reflected in the operating segments as
follows: $35 million in Performance Plastics, $14 million in Performance
Chemicals, $2 million in Agricultural Sciences, $11 million in Basic
Plastics, $26 million in Basic Chemicals, $36 million in Hydrocarbons and
Energy, and $3 million in Unallocated and Other. Earnings in the quarter
were also unfavorably impacted by pretax charges totaling $27 million for
purchased in-process research and development related to the recent
acquisitions of assets of Texas Triumph Seed Co., Inc.; Dairyland Seed Co.,
Inc.; and Bio-Plant Research Ltd; these charges are reflected in
Agricultural Sciences. Earnings in the quarter were further impacted by
pretax charges totaling $18 million for legal expenses and other
transaction costs related to the pending acquisition of Rohm and Haas
Company; these charges are reflected in Unallocated and Other.
Earnings in the third quarter of 2007 were unfavorably impacted by
pretax charges totaling $59 million for purchased in-process research and
development. Of this amount, $50 million was related to the 2007
acquisitions of assets of Agromen, Exelixis, Duo Maize and Maize
Technologies International, and is reflected in Agricultural Sciences. The
remaining $9 million charge for purchased in-process research and
development was related to the acquisition of Wolff Walsrode on June 30,
2007, and is reflected in Performance Chemicals. Earnings in the quarter
were further impacted by a charge of $362 million against the provision for
income taxes related to a change in German tax law enacted in August 2007,
which reduced the German income tax rate, resulting in a reduction in the
value of the Company's net deferred tax assets in Germany.
The following table summarizes the impact of certain items recorded in
the three-month periods ended September 30, 2008 and 2007, and previously
described in this section:
Certain Items Impacting Results
Pretax Impact on Impact on
Impact(1) Net Income(2) EPS(3)
Three Months Three Months Three Months
Ended Ended Ended
In millions, except Sept.30, Sept.30, Sept.30, Sept.30, Sept.30, Sept.30,
per share amounts 2008 2007 2008 2007 2008 2007
Impact of Hurricanes
Gustav and Ike(4) $(127) - $ (81) - $(0.09) -
Purchased in-process
research and
development charges (27) $(59) (27) $ (39) (0.03) $(0.04)
Acquisition-related
expenses (18) - (18) - (0.02) -
German tax law
change - - - (362) - (0.38)
Total $(172) $(59) $(126) $(401) $(0.14) $(0.42)
(1) Impact on "Income before Income Taxes and Minority Interests"
(2) Impact on "Net Income Available for Common Stockholders"
(3) Impact on "Earnings per common share - diluted"
(4) In addition, the interruption of operations caused by the hurricanes
resulted in an estimated pretax $50 million in margin on lost sales,
the equivalent of $0.03 per share, which is not included in the
amounts presented in the table.
Financial Statements (Note A)
The Dow Chemical Company and Subsidiaries
Consolidated Statements of Income
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
In millions, except per share
amounts (Unaudited) 2008 2007 2008 2007
Net Sales $15,411 $13,589 $46,615 $39,286
Cost of sales 13,975 11,864 41,526 33,867
Research and development
expenses 334 329 1,000 951
Selling, general and
administrative expenses 498 476 1,511 1,371
Amortization of intangibles 21 22 68 51
Restructuring credit - - - (4)
Purchased in-process research
and development charges
(Note B) 27 59 27 59
Acquisition-related expenses
(Note C) 18 - 18 -
Equity in earnings of
nonconsolidated affiliates 266 296 791 828
Sundry income (expense) - net (34) 70 49 262
Interest income 23 28 72 101
Interest expense and
amortization of debt
discount 160 148 456 423
Income before Income Taxes and
Minority Interests 633 1,085 2,921 3,759
Provision for income taxes
(Note D) 185 659 727 1,271
Minority interests' share in
income 20 23 63 73
Net Income Available for Common
Stockholders $428 $403 $2,131 $2,415
Share Data
Earnings per common share -
basic $0.46 $0.42 $2.29 $2.53
Earnings per common share -
diluted $0.46 $0.42 $2.26 $2.49
Common stock dividends
declared per share of common
stock $0.42 $0.42 $1.26 $1.215
Weighted-average common
shares outstanding - basic 925.2 948.9 932.4 955.6
Weighted-average common
shares outstanding - diluted 934.0 961.5 941.7 968.3
Depreciation $505 $499 $1,497 $1,439
Capital Expenditures $628 $519 $1,584 $1,311
Notes to the Consolidated Financial Statements:
Note A: The unaudited interim consolidated financial statements reflect
all adjustments which, in the opinion of management, are
considered necessary for a fair presentation of the results for
the periods covered. These statements should be read in
conjunction with the audited consolidated financial statements and
notes thereto included in the Company's Annual Report on Form 10-K
for the year ended December 31, 2007. Except as otherwise
indicated by the context, the terms "Company" and "Dow" as used
herein mean The Dow Chemical Company and its consolidated
subsidiaries.
Note B: During the third quarter of 2008, pretax charges totaling
$27 million were recorded for estimated values assigned to
purchased in-process research and development related to recent
acquisitions within the Agricultural Sciences segment. During the
third quarter of 2007, pretax charges totaling $59 million were
recorded for estimated values assigned to purchased in- process
research and development. $50 million was related to 2007
acquisitions within the Agricultural Sciences segment; $9 million
was related to the acquisition of Wolff Walsrode on June 30, 2007.
Note C: On July 10, 2008, Dow and Rohm and Haas Company announced a
definitive agreement under which the Company will acquire Rohm and
Haas Company, with expected completion in early 2009. During the
third quarter of 2008, pretax charges totaling $18 million were
recorded for legal expenses and other transaction costs related to
the pending acquisition.
Note D: In August 2007, a change in German tax law, which included a
reduction in the German income tax rate, was enacted. As a result,
the Company adjusted the value of its net deferred tax assets in
Germany and recorded a charge of $362 million against the
provision for income taxes in the third quarter of 2007.
The Dow Chemical Company and Subsidiaries
Consolidated Balance Sheets
Sept. 30, Dec. 31,
In millions (Unaudited) 2008 2007
Assets
Current Assets
Cash and cash equivalents $2,261 $1,736
Marketable securities and
interest-bearing deposits 11 1
Accounts and notes receivable:
Trade (net of allowance for
doubtful receivables - 2008:
$122; 2007: $118) 5,480 5,944
Other 4,121 3,740
Inventories 7,542 6,885
Deferred income tax assets -
current 261 348
Total current assets 19,676 18,654
Investments
Investment in nonconsolidated
affiliates 3,358 3,089
Other investments 2,305 2,489
Noncurrent receivables 300 385
Total investments 5,963 5,963
Property
Property 48,230 47,708
Less accumulated depreciation 33,932 33,320
Net property 14,298 14,388
Other Assets
Goodwill 3,637 3,572
Other intangible assets (net of
accumulated amortization - 2008:
$786; 2007: $721) 808 781
Deferred income tax assets -
noncurrent 2,274 2,126
Asbestos-related insurance
receivables - noncurrent 662 696
Deferred charges and other assets 2,847 2,621
Total other assets 10,228 9,796
Total Assets $50,165 $48,801
Liabilities and Stockholders' Equity
Current Liabilities
Notes payable $2,407 $1,548
Long-term debt due within one year 1,743 586
Accounts payable:
Trade 4,227 4,555
Other 2,218 1,981
Income taxes payable 580 728
Deferred income tax liabilities -
current 112 117
Dividends payable 392 418
Accrued and other current
liabilities 2,470 2,512
Total current liabilities 14,149 12,445
Long-Term Debt 8,257 7,581
Other Noncurrent Liabilities
Deferred income tax liabilities -
noncurrent 912 854
Pension and other postretirement
benefits - noncurrent 3,006 3,014
Asbestos-related liabilities -
noncurrent 904 1,001
Other noncurrent obligations 3,239 3,103
Total other noncurrent liabilities 8,061 7,972
Minority Interest in Subsidiaries 70 414
Preferred Securities of Subsidiaries 500 1,000
Stockholders' Equity
Common stock 2,453 2,453
Additional paid-in capital 865 902
Retained earnings 18,954 18,004
Accumulated other comprehensive
loss (687) (170)
Treasury stock at cost (2,457) (1,800)
Net stockholders' equity 19,128 19,389
Total Liabilities and Stockholders'
Equity $50,165 $48,801
See Notes to the Consolidated Financial Statements.
The Dow Chemical Company and Subsidiaries
Operating Segments
Three Months Ended Nine Months Ended
Sept.30, Sept.30, Sept.30, Sept.30,
In millions (Unaudited) 2008 2007 2008 2007
Sales by operating segment
Performance Plastics $4,252 $3,877 $12,633 $11,148
Performance Chemicals 2,462 2,152 7,261 6,225
Agricultural Sciences 976 788 3,650 2,915
Basic Plastics 3,535 3,316 10,807 9,390
Basic Chemicals 1,500 1,507 4,701 4,233
Hydrocarbons and Energy 2,611 1,828 7,394 5,063
Unallocated and Other 75 121 169 312
Total $15,411 $13,589 $46,615 $39,286
EBIT (1) by operating segment
Performance Plastics $146 $409 $743 $1,232
Performance Chemicals 275 219 836 825
Agricultural Sciences 61 15 727 505
Basic Plastics 481 556 1,296 1,612
Basic Chemicals 64 205 252 504
Hydrocarbons and Energy (1) - (1) (1)
Unallocated and Other (256) (199) (548) (596)
Total $770 $1,205 $3,305 $4,081
Certain items reducing EBIT by
operating segment (2)
Performance Plastics $(35) $- $(35) $-
Performance Chemicals (14) (9) (14) (9)
Agricultural Sciences (29) (50) (29) (50)
Basic Plastics (11) - (11) -
Basic Chemicals (26) - (26) -
Hydrocarbons and Energy (36) - (36) -
Unallocated and Other (21) - (21) -
Total $(172) $(59) $(172) $(59)
Equity in earnings (losses) of
nonconsolidated affiliates by
operating segment (included in EBIT)
Performance Plastics $(1) $15 $29 $55
Performance Chemicals 137 90 351 299
Agricultural Sciences 2 1 4 1
Basic Plastics 55 39 130 141
Basic Chemicals 61 115 229 270
Hydrocarbons and Energy 11 35 49 62
Unallocated and Other 1 1 (1) -
Total $266 $296 $791 $828
(1) The Company uses EBIT (which Dow defines as earnings before interest,
income taxes and minority interests) as its measure of profit/loss for
segment reporting purposes. EBIT includes all operating items related
to the businesses and excludes items that principally apply to the
Company as a whole. A reconciliation of EBIT to "Net Income Available
for Common Stockholders" is provided below:
Three Months Nine Months
Ended Ended
Sept.30, Sept.30, Sept.30, Sept.30,
2008 2007 2008 2007
EBIT $770 $1,205 $3,305 $4,081
+ Interest income 23 28 72 101
- Interest expense and
amortization of debt discount 160 148 456 423
- Provision for income taxes 185 659 727 1,271
- Minority interests' share in
income 20 23 63 73
Net Income Available for Common
Stockholders $428 $403 $2,131 $2,415
(2) See Supplemental Information for a description of certain items
affecting results in 2008 and 2007.
The Dow Chemical Company and Subsidiaries
Sales Volume and Price by Operating Segment
Three Months Ended Nine Months Ended
Sept. 30, 2008 Sept. 30, 2008
Percentage change from prior year Volume Price Total Volume Price Total
Operating segments
Performance Plastics (4)% 14% 10% 1 % 12% 13%
Performance Chemicals (7)% 21% 14% 1 % 16% 17%
Agricultural Sciences 8 % 16% 24% 11 % 14% 25%
Basic Plastics (18)% 25% 7% (8)% 23% 15%
Basic Chemicals (20)% 20% - (11)% 22% 11%
Hydrocarbons and Energy 3 % 40% 43% 7 % 39% 46%
Total (9)% 22% 13% (1)% 20% 19%
Sales by Geographic Area
Three Months Ended Nine Months Ended
Sept.30, Sept.30, Sept.30, Sept.30,
In millions (Unaudited) 2008 2007 2008 2007
Sales by geographic area
North America $5,518 $5,235 $16,772 $15,274
Europe 5,786 4,872 17,991 14,347
Asia Pacific 1,805 1,571 5,427 4,518
Latin America 1,821 1,524 5,055 4,146
India, Middle East and Africa 481 387 1,370 1,001
Total $15,411 $13,589 $46,615 $39,286
Sales Volume and Price by Geographic Area
Three Months Ended Nine Months Ended
Sept. 30, 2008 Sept. 30, 2008
Percentage change from prior year Volume Price Total Volume Price Total
Geographic areas
North America (15)% 20% 5% (8)% 18% 10%
Europe (6)% 25% 19% 1 % 24% 25%
Asia Pacific (2)% 17% 15% 7 % 13% 20%
Latin America (4)% 23% 19% 1 % 21% 22%
India, Middle East and Africa 7 % 17% 24% 20 % 17% 37%
Total (9)% 22% 13% (1)% 20% 19%
SOURCE The Dow Chemical Company
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CONTACT:
Media, Bob Plishka, +1-989-638-2288, or
Analysts, Jeff Tate, +1-989-636-1375, both of The Dow Chemical
Company
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