Bank of America 38th Annual Investment Conference

Dow’s Transformation In ActionGeoffery E. MerszeiExecutive Vice President & Chief Financial Officer

September 17, 2008

Bank of America 38th Annual Investment Conference

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Agenda

►Who Is Dow

►Financial Performance

►Transformational Strategy

►Strategy in Action

– Formation of K-Dow Petrochemicals– Acquisition of Rohm and Haas

►Summary


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2007 Sales by Segment

Performance Plastics

Performance Chemicals

Agricultural Sciences 7%

Basic Plastics

Basic Chemicals

Hydrocarbons & Energy 13%

$54 B

2007 Sales by Geography

India, Middle East and Africa 2%

North America

Europe

Asia Pacific

Latin America

$54 B

Diversified Portfolio


28%

16%24%

11% 38%

12%

11%

37%

Unallocated & Other 1%

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OAO Gazprom

PetroChina

Chevron Phillips

Reliance Industries

BASF

Total SA

Formosa Plastics Grp

INEOS Group

Exxon Mobil

Royal Dutch Shell

Dow Chemical

Sinopec

SABIC

LyondellBasell►2007 Sales* - $29B

►8,800 Dow people

►6,000 global customers

►35 Dow sites; 6 JV sites

►Renowned product brands

►Operational/safety excellence

►Technology leadership

*Includes Dow’s proportionate share of joint venture revenues. 4

Source: Public Company Reports

A Strong Basics Franchise


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Cytec

Celanese

Lubrizol

Eastman

Rohm & Haas

Royal DSM NV

PPG

Bayer

Evonik Industries AG

Hexion (inc. Huntsman)

Akzo Nobel

DuPont

Dow Chemical

BASF

►2007 Sales – $27B►22,800 employees►12,500 global customers►158 countries►41 R&D sites►94 Manufacturing sites

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Source: Public Company Reports

Market-driven Performance Businesses


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Agenda

►Who Is Dow





►Summary


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First Half 2008 Financial Performance6 months ended 6 months ended

June 30, 2008 June 30, 2007 ChangeSales $31,204 $25,697 21%

Price 18%Volume 3%

Purchased feedstock & energy cost 42%

Equity earnings $525 $532 (1%)

EBIT* $2,535 $2,876 (12%)

Earnings per share $1.80 $2.07 (13%)Dollars in millions (except per share amounts)

*See www.dow.com for Reconciliation of Non-GAAP Financial Measure


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Financial Goals

* Non-GAAP data; excludes certain items; excludes Union Carbide prior to 2001. See www.dow.com for more information.

Financial Metrics

2007: $3.76

10-year average growth: 4%1995 – 2005 growth: 5%

2004

2003

Earnings per Share*

1997

1999

2000

2001

2002

2005

2006

2007

1998

2007: 14%10-year average: 12%1995 – 2005 average: 12%

Return on Capital*

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007


2007: 19%

10-year average: 18%1995 – 2005 average: 19%

1998

1999

2000

2001

2002

2003

2004

2005

2006

Return on Equity*

2007

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Agenda

►Who Is Dow





►Summary


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Innovation, Technology and R&DInnovation, Technology and R&D

Dow’s Transformational Strategy

• Grow Performance and Specialties

• Strengthen competitiveness of Basics

ProductsProducts

SolutionsSolutions

SystemsSystemsBASICSBASICSFEEDSTOCKSFEEDSTOCKS PERFORMANCEPERFORMANCE MARKET

FACINGMARKET FACING

JOINTVENTURES

JOINTVENTURES

JOINTVENTURES

JOINTVENTURES


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Building the Dow of Tomorrow

OpportunityAreas

AgricultureAgriculture Alternative Energy& Feedstocks

Alternative Energy& Feedstocks ConstructionConstruction Apparel &

FurnishingsApparel &

Furnishings

Energy Production& Efficiency

Energy Production& Efficiency TransportationTransportation Electronics &

CommunicationsElectronics &

Communications

Energy StorageEnergy Storage WaterWater Home & Personal Care

Home & Personal Care

Functional FoodsFunctional Foods

HealthcareHealthcare

Key DowCapabilities

Building MaterialsBuilding Materials

IntegratedPhotovoltaics

IntegratedPhotovoltaics

Feedstock & Energy Management

Feedstock & Energy Management

InsulationInsulation

Applied EnergyEfficiency

Applied EnergyEfficiency

Advanced MaterialsScience

Advanced MaterialsScience

Filter/MembraneElements

Filter/MembraneElements

High ThroughputFormulations

High ThroughputFormulations

Rapid Formulation Development

Rapid Formulation Development

Printed Circuit Board MaterialsPrinted Circuit

Board Materials

Optical MaterialsOptical Materials

Polymer Performance

Modeling

Polymer Performance

Modeling

BiotechnologyBiotechnology

ChemistryChemistry

Material ScienceMaterial Science

Themes

Health & Nutrition Energy Transportation & Infrastructure

Consumerism

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Shareholder Remuneration

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

2005 2006 2007 2Q08 YTD

Sha

re R

epur

chas

e A

mou

nt ($

Mill

ions

)

– 71 Million Shares Repurchased

– $3.0 Billion Spent– Largest Program

In A Decade


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1928 1938 1948 1958 1968 1978 1988 1998

Consistently Rewarding Shareholders

1912 2008**

• A 96-Year History of Consistent Dividends– Maintained or Increased Each Year

– Increased 25% Since 2006

Quarterly Dividends Paid Per Share*

*ADJUSTED FOR STOCK SPLITS AND STOCK DIVIDENDS**2008 DIVIDEND ANNUALIZED BASED ON Q2 YTD PAYOUT


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Agenda

►Who Is Dow





►Summary


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K-Dow Petrochemicals

► Creates a world-class petrochemicals giant

► Introduces a new global player with enhanced capabilities to grow – especially in China, India and the Middle East

► Opens the door to low-cost feedstocks for future growth

► Preserves vertical integration for Performance businesses

► Estimated pre-tax cash to Dow – $9.5B

TRANSACTION VALUE - $19.1 billion (on 100% basis)


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Creating A World-Class Petrochemicals Company

► Polyethylene, Polypropylene, Polycarbonate, Ethyleneamines and Ethanolamines

► All related technologies► Fully dedicated hydrocarbon assets

• Fort Saskatchewan, Canada (cracker)• Bahia Blanca, Argentina (cracker)• Tarragona, Spain (cracker and octene manufacturing facility)

► Ethylene supply agreements from Dow’s other crackers► Number 1 position in Polyethylene


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Exceptional Returns From JVs

$322

$923$964 $959

$1,122

$205

$430

$536$622

$837

19%

40% 39% 38% 39%

Equity Earnings ($ millions)

2003

2004

2005

2006

2007

Cash Distributions ($ millions) Return on Investment*

2003

2004

2005

2006

2007

2003

2004

2005

2006

2007

*Equity earnings/average investmentin nonconsolidated affiliates


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Agenda

►Who Is Dow





►Summary


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About Rohm and Haas ►Premier advanced materials and specialty chemicals

company

►2007 sales of $8.9 billion

►Leading positions in electronics and coatings

►Headquartered in Philadelphia,

located in 27 countries

►15,700 employees

►Established in 1909Bank of America 38th Annual Investment Conference

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Strategic Rationale

►Accelerates growth through strong operational and strategic fit

►Creates new leadership positions in key industry growth segments

►Well-known commitment to R&D

►Fuels Dow’s own innovation engine

►Delivers more stable earnings with higher growth


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A Powerful New Dow

Asset LightAsset LightJointJoint

VenturesVentures

Chemicals,Chemicals,PetrochemicalsPetrochemicals& Feedstocks& Feedstocks

PerformancePerformanceProductsProducts

Health &Health &AgricultureAgriculture

Rohm and HaasRohm and HaasAdvancedAdvancedMaterialsMaterials

ElectronicElectronicMaterialsMaterials

SpecialtySpecialtyMaterialsMaterials CoatingsCoatings

Dow Coating Solutions

Adv. Elec. Materials

DesignedPolymers

Specialty Packaging

EpoxySystems

PolyurethaneSystems

Feedstock-Driven Businesses Market-Driven Businesses

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2/3 Specialties


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Growth Potential

►Accelerates revenue growth and improves margins– Increases percentage of revenues from higher margin,

higher growth specialty business– Reduces volatility and increases growth in earnings

2007 – 2012Industry Growth Rates

SOURCE: SRI Consulting, CMAI, Company filings and presentations

Dow 4%

Rohm and Haas 5 – 9%

Dow + Rohm and Haas 5 – 7%


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Significant Cost Synergies

►At least $800 million in annual pre-tax synergies

►Phased in over two years

Shared Servicesand Governance

Purchasing, including Raw Materials

Manufacturing / Supply Chain Work Process Improvements

Corporate Business Development Overlap

35%35% 35%35%

10%10% 20%20%


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Dow Synergy Track RecordCost synergies as a percent of target revenue

Union Carbide 18% delivered

Rohm and Haas Ag 16% delivered

Angus Chemicals 15% delivered

EniChem Polyurethanes 14% delivered

Gurit-Essex 16% delivered

Rohm and Haas 9% target


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In Summary

►Committed to, and implementing, our strategy

►K-Dow Petrochemicals “Day One” before year-end

►On-track to close Rohm and Haas in early 2009

►Committed to delivering solid results in 2008

►Dow will be a transformed company!

2008 Credit Suisse Chemical Conference

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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.


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Q&A

2008 Credit Suisse Chemical Conference

Economy & Finance

Bank of America 38th Annual Investment Conference