2014 Investor Forum

Jim Fitterling
Vice Chairman, Business Operations
November 13, 2014

Dow.com
SEC Disclosure Rules
Some of our comments today 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
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to the most directly comparable GAAP financial measures and other associated
disclosures are provided on the Internet at www.dow.com/investors.
™Trademark of The Dow Chemical Company or an affiliated company of Dow.
“EBITDA” is defined as earnings (i.e., “Net Income”) before interest, income taxes, depreciation and amortization.
“Adjusted EBITDA” is defined as EBITDA excluding the impact of Certain items.
“Adjusted EBITDA margin” is defined as “Adjusted EBITDA” as a percentage of reported net sales.
“Adjusted EPS” is defined as earnings per share excluding the impact of Certain items.
“Net Debt” equals total debt (“Notes payable” plus “Long-term debt due within one year” plus “Long-Term Debt”) minus “Cash and cash equivalents.”
“Net Debt to Total Capitalization” ratio is defined as “Net Debt” divided by “Net Capital.” “Net Capital” is defined as “Total Equity” + “Redeemable Noncontrolling Interest” + “Net Debt.”
“Net Debt to EBITDA” is defined as “Net Debt” divided by “Adjusted EBITDA.”
“TTM” is defined as trailing twelve months.
“Total Capital” is defined as total assets minus non-interest bearing liabilities.
“Adjusted Return on Capital” is defined as TTM “Adjusted Net Operating Profit After Tax” divided by average “Total Capital.”
“Adjusted Sales” for joint ventures is defined as sales for joint ventures less sales to Dow and/or other Dow joint ventures.
“Net Debt” for joint ventures excludes debt owed to Dow and/or other Dow joint ventures.
“Total Shareholder Return” is defined as stock price appreciation plus dividends paid.
Our Priorities Going Forward

Fully capitalize on growth levers

Make further strategic choices: Go deeper and

narrower to drive the next level of long-term growth

Maintain strong focus on rewarding shareholders

Announcing New Segments Aligned to Dow’s Strategy
Infrastructure Performance Materials
Agricultural Sciences Consumer Solutions Solutions & Chemicals Performance Plastics

 Crop Protection  Consumer Care  Dow Building &  Chlor Alkali and Vinyl  Dow Elastomers
 Dow Automotive Construction  Chlorinated Organics  Dow Electrical and
 Seeds Telecommunications
Systems  Dow Coating Materials  Epoxy  Dow Packaging and
 Dow Electronic  Energy & Water  Industrial Solutions Specialty Plastics
Materials Solutions  Polyurethanes  Energy
 Performance Monomers  Hydrocarbons
Revenue: $7.2B Revenue: $4.6B Revenue: $8.5B Revenue: $14.9B Revenue: $22.6B
Adj. EBITDA: $0.9B Adj. EBITDA: $1.0B Adj. EBITDA: $1.1B Adj. EBITDA: $2.1B Adj. EBITDA: $4.4B

Foundation of Core Strengths Support the Entire Franchise

 Cost Advantaged Feedstocks in Every Region  Global Reach ― Marketing, Business & Operations
 Scale & Operational Excellence  Expertise in Science & Technology
 Molecular and Physical Integration  Strong Brand Value
3Q14 Trailing Twelve Months Revenue and Adj. EBITDA data
 Running an Integrated Enterprise… Sell Out, Sell Up
APPLY ‘BEST OWNER’ MINDSET
CREATE STRUCTURAL ADVANTAGES ― Low Cost, Technology, Targeted Marketing
CapEx Selling and R&D
COMMODITY

Dow Electrical &

SPECIALTY
Dow Packaging & Telecommunications
Specialty Plastics
DIVEST Chlorine Carve-Out
Epoxy Polyurethanes Dow Elastomers
Industrial Solutions

Hydrocarbons & Energy

RETAIN FOR INTEGRATION / RUN FOR CASH Advantaged Feedstocks
INNOVATE BACK TO SPECIALTY
Industrial Solutions — Enabling Manufacturing

Farm processing surfactants and solvents

Polyurethanes Industrial
Solutions Fast-evaporating solvents for chip-making
Performance
Materials &
Chemicals
$14.9B High performing industrial fluids
Revenue
Epoxy Chlor-
Alkali and
Vinyls
Solvent systems for coatings
Chlorinated Organics

Making Things Better, Faster, Cleaner Through Additive Solutions

3Q14 Trailing Twelve Months Revenue
Epoxy and Polyurethanes Delivering Improvement
Actions
 Major restructuring
 Organizational redesign
 Focused effort on
manufacturing reliability and
asset utilization
 Shut down assets and reduce
fixed costs
 Improve total variable margin
 Reduce SARD
 Improve working capital
 Gain market share
Results
 Organizational redesign
complete
 Overall $200MM improvement
through cost reductions
 8 assets shut down
 Double-digit fixed cost
improvements in
Polyurethanes
 Significant SARD reductions in
2014, more to come in 2015
 Single digit volume increases
in Polyurethanes YTD
Bridge from Management Book to Chlorine Carve Out Financials
Pro Forma EBITDA Bridge for Chlorine Carve-Out
$MM

$30―$60 ~$500
$75―$125
$300―$400
With Upside
Potential

As Dow Net Sales Between Ongoing Business As Chlorine

Dow and NewCo Productivity Actions Carve-out

Today YE 2014 1Q15 2Q15 YE 2015

Signing
Timeline Offers Close
Selection
Innovations to Improve Functionality and Sustainability
100% PE Stand Up Pouch Two-Piece PE Bottle PACXPERT™

Differentiated Innovations in Sustainable

Packaging Through Close Value Chain Engagement
Top Global Ethylene / Polyethylene Producers
Ethylene Capacity Polyethylene Capacity
Dow ExxonMobil
SABIC Dow
ExxonMobil SABIC
SINOPEC LyondellBasell
LyondellBasell SINOPEC
Royal Dutch/Shell IPIC
Abu Dhabi Gov't Chevron Phillips
NPC-Iran Ineos
Ineos Braskem
CNPC NPC Iran

0 4,000 8,000 12,000 0 5,000 10,000

MT MT
Source: Dow, IHS Source: Dow, IHS

Dow is the Biggest Ethylene Producer in the World

Investments Enhance High-Return Franchise
18%

16%

Dow Performance Plastics*

14%
2013 Adjusted ROA

12%

10%

8%

6%

4%

2%

0%
Chemicals Companies

Low Cost and Focus on Attractive Markets Drive Consistent and Higher Earnings
Peer List: AXLL, BASF, BMS, CE, CF, DD, EMN, FMC, HUN, LYB, MOS, POT, PPG, SEE, WLK Source: Dow, Capital IQ
*For comparison purposes only, the ROA for Dow Performance Plastics shown above includes ~20% allocation Adjusted ROA: Adj. EBIT*(1-Tax) / Avg Total Assets
of Corporate segment. Corporate segment allocation based on Dow Performance Plastics' % of total assets.
Excluding this allocation, Dow Performance Plastics has a ROA of ~22%, see Reg G file.
Sources of Value in Performance Plastics

Mix and Application PE Cycle Ethylene Cycle Oil to Gas Spread

$100‒$200/MT $200‒$300/MT $600‒$1000/MT

Dow Value Comes from Four Sources

 Advantage ― Dow… Innovation in Plastics
QUALITY & SERVICE OFFERING Dow Customers Depend on Assets,
Innovation and Customer Intimacy
 Assets
$100- ― Advantaged feedstock in
$200/MT 5 regions
PREMIUM
― Specialized asset technology
In n o
v atio
n  Innovation
― Best in class material science
Complexity ― High throughput R&D
― IP protected technology
 Customer Intimacy
― High-performance PE, adhesives,
Price barrier, tie layer materials
Competition ― Industry leading brands
― Value chain intimate approach

COMMODITY
Derivative Operating Rates Nearing Peak Conditions
Industry Global Polyethylene Operating Rate Near Term Strengthening
 Pricing power continues to strengthen
90%
 North America continues to be
sold out
87.5%  European duty discourages imports
87.0% improving S/D dynamics
Operating Rate

86.3%
85.2% Peak May Extend Into Mid-Term
 Further start-up delays /
85% postponements likely (i.e., USGC,
83.9% 83.9% China CTO, etc.)
 1% increase in global GDP would
increase global O/Rs by 2%
Demand Exceeds New Builds Assumptions
 Base GDP growth 2.8%, 3.4% and 3.7%
for 2014, 2015 and 2016, respectively
80%
2012 2013 2014 2015 2016 2017
Source: Dow
Global Ethylene Operating Rates Entering the Peak
 Operating rates continue recovery from the 2008 lows
 Expect peak scenarios in 2016-2018, with pricing power improving through 2014 into 2015
Ethylene Production=Demand Nameplate Capacity Industry Op Rate
200 98
Cycle Pricing Power will Add ~$2.5B/yr for Dow
Ethylene, Millions of Tons

180 96

Operating Rate, %
160 94
94 94
140 93
92 92
120 91 90
100 89
80 88 88
87
60 86 86
85 85
40 84 84
20 82
0 80
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Global Insight
4.1% 1.7% -1.9% 4.3% 3.0% 2.5% 2.6% 2.8% 3.4% 3.7% 3.8% 3.7%
GDP
Low Case 2.8% 2.9% 3.0% 3.0% 3.0%

Source: Dow, IHS, Global Insight (8/14)

The Loaded Spring… Growing Commodity Demand
Per Capita Demand for Plastics, etc. Increases
50 Global PE Consumption Per Capita Driven by:
United States & Canada
 Urbanization
40
 Spread of middle-class in
2014 - Demand per Capita (kg per person)

33.1
33.1 kg perperson
kg per personUSUS& &
W.W.
Europe
emerging world
30
Western Europe
Japan and Korea
 Population growth
 Higher than OECD growth in GDP
20 Middle East
China

11.8 kg per person

Eastern Europe
2010 Non-OECD demand is not driver of current
10
Latin America
2005 market tightness
Other Asia 2000

Africa India
Recovery in non-OECD will have double
0 impact of increased per capita use and
0 1000 2000 3000 4000
Population (millions)
5000 6000 7000
stronger GDP
Source: Dow, IHS
Peak Pricing Power versus Feedstock Advantage
Cracker Margins Expanded by $200/MT–$300/MT in Last Three Peaks
Dow Produces ~10MM tons/year
30 180
Natural Gas Brent Oil
25 150
US Natural Gas ($/MMBTU)

Cycle Peaks

Brent Crude Oil ($/bbl)

20 120

15 90
CRUDE : GAS
10 Price Arbitrage 60

5 30

0 0
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

Source: Bloomberg
Advantaged Positions Across the Globe
Established
USGC Revamped Key Alliances
Investments Sadara Alberta European LPG in Latin
Advantage America
 US shale  Low cost  Alberta  Extending US  Growing
 Access to Asia advantage shale ethane
advantage  Next large shale
 Abundant LPG development
for Europe

U.S. Shale Gas

Production
2014

Volume
2013
2012

Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Dow’s Feedslate in the Americas — Moving Lighter
90%
Dow Ethane Cracking Capability

Argentina Initiatives Rejuvenate TX-9 Startup

Ethane Supplies
for Ethylene Production

85%
LA-3
Actions Drive Project
80% Canada Ethane
Long

SCO2
75% Restart

70%

65%
2013

2014

2015

2016

2017
Source: Dow
Shale Drives Growth in NGL Supplies in U.S. and Europe
Dow Europe LPG Contribution ― $MM Dow Europe LPG Cracking Volume Increasing
250

200
2014

Volume
150

100 2013
50 2012

Jan
Feb
Mar
Apr
-

May
Jun
Jul
Aug
Sep
Oct
2010 2011 2012 2013 2014

Nov
Dec
YTD

 Improved efficiency in Terneuzen

 Doubled capability in Tarragona
 More to come in 2015
Source: Dow
 Value of Gulfstream Investments at Authorization
Project HH Gas Ethane Propane Brent Cap Ex ROC Full Run Rate
Auth EBITDA

St. Charles Ethylene $6.00/mmbtu $0.69/gal $1.41/gal $109/bbl $160MM 37% $250MM/yr
Restart

Freeport PDH $5.30/mmbtu $0.70/gal $1.60/gal $132/bbl $1,200MM 16% $450MM/yr

PDH Infrastructure $400MM

Plaquemine
Feedstock Flexibility $5.60/mmbtu $0.75/gal $1.67/gal $136/bbl $250MM 57% $250MM/yr
& Debottleneck

Freeport World
Scale Ethylene $6.00/mmbtu $0.59/gal $1.36/gal $129/bbl $3,400MM 23% $1,500MM/yr
& Derivatives

Cracker & Derivatives

Infrastructure $1,000MM
 Value of Gulfstream Investments at
Authorization versus Today
Today’s Cost $3.80/ $0.22/ $0.87/ $85/
Structure mmbtu gal gal bbl

Project HH Gas Ethane Propane Brent Cap Ex ROC Full Run Rate
Auth EBITDA EBITDA
St. Charles
Ethylene Restart $6.00/mmbtu $0.69/gal $1.41/gal $109/bbl $160MM 37% $250MM/yr $280MM

Freeport PDH $5.30/mmbtu $0.70/gal $1.60/gal $132/bbl $1,200MM 16% $450MM/yr $600MM
PDH Infrastructure $400MM
Plaquemine
Feedstock
Flexibility & $5.60/mmbtu $0.75/gal $1.67/gal $136/bbl $250MM 57% $250MM/yr $270MM
Debottleneck
Freeport World
Scale Ethylene
& Derivatives $6.00/mmbtu $0.59/gal $1.36/gal $129/bbl $3,400MM 23% $1,500MM/yr
$1,800MM
Cracker &
Derivatives $1,000MM
Infrastructure

Today’s cost structure as of 10/27/14

Executing on Our Growth Levers

 Polyurethanes: Streamline and sell out

 Industrial Solutions: Narrower, deeper, more

 Chlorine and Epoxy: In the market, closing in 2015

 Performance Plastics: $4.4B EBITDA… the peak is coming

Plans on Track, Delivering Today, Upside to Come

3Q14 Trailing Twelve Months Adj. EBITDA data