Stockholder Summary 2010

8/3/2019 Stockholder Summary 2010

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The Dow Chemical Company2010 Annual Stockholder Summary

The Right Formula for Growth


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Mastering Transormation...At Eer Leel

All we see, all we touch our entire complex world comes down to 118 elements. Just 118.It is only when we introduce t he element o humanity the 119th element that creativitycombines with chemistry, and innovation changes lives.

In our view, the greatest challenges the world will ace in the coming decades are ones that canbe solved and will be solved at the intersection o chemistry, biology and physics sciencesthat the people o Dow have mastered.

Our ability to design the right ormula has the power to transorm what nature began andto create solutions the world has never known. By rethinking what is possible at the molecularlevel, Dow is changing the world around us pioneering new products and addressing themegatrends acing humankind.

This strategy has ueled the transormation o our Company. Creating new markets orour products. New solutions or our customers. And increasing value or our s tockholders.

We invite you to take a closer look.

Table o Contents

2 Meet the Worlds Best Problem Solvers the Men and Women o Dow

3 Financial Highlights4 Chairmans Letter to Stockholders

6 2010 Achievements

8 Executive Leadership Committee and Corporat

9 Corporate Governance and Board o Directors

10 The Right Formula or Growth

12 The Right Portolio

16 The Right Pipeline

20 The Right Geographic Presence

24 The Right Investments in People and the Plane

28 Vision, Mission and Strategy

29 Stockholder Reerence Inormation

the right formulafor growth


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The Dow Chemical Company 2010 Annual Stockholder Summary 2010 Annual Stockholder Sum2

Meet the Worlds Best Problem Solers the Men and Women o Dow

Dow employs nearly 50,000 people across the globe, people o incredibly diverse talents.Yet, together, our people are inspired by a common purpose and passion: to put the powero chemistry to work to solve human problems.

By searching or solutions and never giving up. By engaging their imagination and ingenuity.By listening, anticipating, collaborating and creating, they reach beyond the expected to oerthe truly innovative. At the same time, they perorm with integrity, discipline and a respect orpeople and the planet.

Here are some o the remarkable men and women o Dow people who are making adierence and making it now or our customers and or the world. Together, they areworking on developing new technologies or cleaner energy and water, saer andmore efcient operations, and solutions or customers.

Carrie Cui-Ping

TS&D Engineer

Alternative Energy,Epoxy Systems

Shanghai, China

Jarod D. Dais

External Engagement Leader

Sustainability

Midland, Michigan

Paul-Michael Pelln

Global Market Manager,Industrial Processes

Dow Water &Process Solutions

Schwalbach, Germany

Kala Smile Ross

Resource Leader,Process Automation

Engineering Solutions

Chennai, India

Karen L. Eddlemon

Counsel, U.S. Operations

LegalPlaquemine, Louisiana

Niels Smits

Production LeaderLHC-7 Freeport

Manuacturing andEngineering

Freeport, Texas

Mnica Araena Selman

Administrative Specialist

Polyethylene

Talcahuano, Chile

Sandeep S. Dhingra

Global R&D Director,Analytical Sciences

Core R&D

Midland, Michigan

The Dow Chemical Company

Net Sales(dollars in millions)

06 07

49,

009

08

53,

375

09

57,

361

10

44,

875 5

3,

674

06 07

3,

796

08

2,

962

09

626

10

566

2

,321

Total Sales

$53,674

Plastics$11,551

Chemicals and Energy$3,485

Hydrocarbons$5,442

Electronic and Specialty Materia$5,040

Coatings and Infrastructure$5,365

Health and Agricultural Sciences$4,869

Performance Systems$6,676

Performance Products$10,903Corporate: $343

Per Share Data(dollars)

Net Income fromContinuing Operations

(dollars in millions)

Earnings Excluding and Discontinued Ope

Earnings Diluted

Dividends Declared

1.

50

0.

60

1.

68

06

3.

82

07

4.

23

2.

99

08

3.

74

1.

635

0.

62

09

1.7

9

0.

32

10

0.

63

0.

60

1.

72

1.

97

Financial Highlights

2010 2009

Net Sales (dollars in millions) $53,674 $44,875

Net Income rom Continuing Operations (dollars in millions) $2,321 $566

Earnings per Share rom Continuing Operations Diluted, Excluding Certain Items1 $1.97 $0.63

Dividends Declared per Share $0.60 $0.60

Net Debt to Capital Ratio2 43% 48%

2010 Sales b Operating Segment(dollars in millions)

1 A reconciliation to the most directly comparable U.S. GAAP measure is provided on the Internet at www.dow.com/nancial.

2 Net debt equals total debt (Notes payable plus Long-term debt due within one y ear plus Long-term debt) minus Cash and c ash equivalents.

The orward-looking statements contained in this document involve risks and uncertainties that may aect the Companys operations, markets,products, services, prices and other actors as discussed more ully elsewhere and in lings with the U.S. Securities and Exchange Commission.These risks and uncertainties include, but are not limited to, economic, competitive, legal, governmental and technological actors. Accordingly,there is no assurance that the Companys expectations will be realized. The Company assumes no obligation to provide revisions to any orward-looking statements should circumstances change, except as otherwise required by securities and other applicable laws. Reerences to Dow or theCompany mean The Dow Chemical Company and its consolidated subsidiaries, unless otherwise expressly noted.


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2010 Annual Stockholder Sum

Dear Stockholders,

For a global enterprise like The Dow Chemical Company,changing course demands resiliency and perseverance.It requires singular ocus and unwavering purpose. And itcalls or a relentless spirit o exploration and implementation.

These qualities have long set generations o Dow peopleapart men and women who have made dicult, bold,courageous decisions. More recently, these qualities haveenabled the Company to successully pursue its strategy otransormational growth and its mission: to passionatelyinnovate what is essential to human progress by providingsustainable solutions to our customers.

This strategy began to take shape in earnest several years agowhen your Board o Directors and executive leadership team

took a hard look at the Companys uture. We considered thetransormational impact o the global megatrends that arerevolutionizing our world. And we considered the changes thatDow needed to make in order to seize the new opportunitiesdened by these trends.

Since then, Dow employees have worked hard to impl ementthese proound changes.

This Company has never been about

staying in one place. We are always

advancing. We are always growing.

We are always innovating. Progress

is a Dow tradition. It is an element

o our DNA.

Andrew N. Liveris

President, Chie Executive Oicerand Chairman o the BoardFebruary 25, 2011

Strategically, we are committed to continue expanding our porto specialty chemicals, agrosciences and advanced materials, anaccelerate the transormation o our Plastics ranchise.

We are ocused on maintaining the momentum o our growthportolio and will continue to invest in and monetize our innovatiopipeline. We will also continue accelerating toward our 2012 goal $2 billion in growth synergies.

We will urther strengthen our presence in emerging geographicareas with a goal o reaching 35 percent o revenue rom theseregions in 2012. Our progress will accelerate as we continueimplementing projects in Thailand, Saudi Arabia, Brazil and Chinathat will bolster our downstream businesses and increase ourasset ootprint in the emerging world.

From an operational perspective, we will maintain our vigilantapproach to reliable operations, productivity and cost reductions

while prudently investing in growth.Financially, we remain committed to driving our net debt to totacapital ratio down to less than 40 percent by the end o 2012.

And nally, we will continue advocating globally or policies thathelp manuacturing thrive in a 21st-century economy.

We will pursue all o this while upholding our unwavering ocuson sae operations in the communities where we live and work.In act, Dows commitment to sustainability and our ocus onaddressing great global challenges will increase as Dow stepsinto its role as the ocial Chemistry Company o the OlympicMovement a premier par tnership we initiated in 2010.

These are, without question, remarkable times or The Dow ChemCompany. As we x our eyes on a new rontier, we are buildingupon a rich legacy o innovation that is woven into the abric o oCompany. Ater all, it was the potential o chemistry that broughHerbert H. Dow to Midland, Michigan, 114 years ago. He believedeeply in the power o chemistry to create, to build and to improv

More than a century later, the men and women o The DowChemical Company continue to be driven by that set o belies by Herbert H. Dows spirit o exploration and his ethic o hardwork. We are disciplined. We are passionate. We are pur poseuand we stand behind our mission.

Thank you or believing in our mission. Thank you or supportinour work. And thank you or investing in the uture o our Compa

Our strong investment in growth remained steadast. Our 2010R&D spending increased to $1.7 billion, and we drew on our$30 billion net present value innovation pipeline to launchnew products that will set us apart or years to come. In act,more than one-third o our revenue this year was generatedby products launched within the last ve years.

We delivered more than $1 billion in revenue rom growthsynergies on a run-rate basis rom our transormationalacquisition o Rohm and Haas, and we surpassed $2 billionin cost synergies, well ahead o schedule.

We put our disciplined portolio management approach intoaction divesting $5 billion in non-strategic assets in lessthan two years.

We pursued strategic joint ventures that bolster our integrationstrength, while simultaneously liberating capital or investment

in our businesses that are technology- and customer-driven. We reduced our net debt to capit al ratio to 42.6 percent, and

delivered more than $4 billion in cash rom operating activities.

We are now entering a period o increasing nancial fexibilityater successully integrating the largest acquisition in our historyin the midst o what has become known as the worlds worstnancial crisis since the Great Depression.

And in terms o earnings growth, we delivered results more thantriple that o the year-ago period.

We accomplished all o this while maintaining our high standardsor environment, health and saety perormance. Our eorts wererecognized by the National Saety Council, which named D ow therecipient o the prestigious Robert W. Campbell Award. Dow isthe rst chemical company to be so honored.

Our commitment to helping people around the world remainedequally strong. Thousands o employees volunteered this year, asthey always do, working in local communities where we operate andbeyond. In particular, Dow provided support in Pakistan, Haiti andChile in the wake o disasters that struck these regions in 2010.

As we stand steadast behind our values o integrity, respect orpeople and protection o our planet, we also recognize that thisCompany has never been about staying in one place. We are alwaysadvancing. We are always growing. We are always innovating.

Progress is a Dow tradition. It is an element o our DNA.That is why, even as we celebrate a tremendous year, we are lookingto the uture. We welcome the act that the global economy isshowing positive trends. However, we wont depend on externalactors to uel our growth. Our portolio is well-balanced to mitigateuncertainty, and our drive to deliver sustained earnings growthremains resolute.

Today, we are proud to report that this transormational strategyis rmly in place and it is delivering clear results. In 2010, weachieved, and in many cases exceeded, our goals:

We grew revenue 26 percent excluding the impact of divestitures,more than double our 2010 goal o 10 percent, and deliveredgains in every quarter.

Our growth in emerging regions hit a new milestone, surpassing$16 billion in revenues or the rst time in our Companyshistory. Sales in Asia Pacic topped $9 billion in the year, alsorepresenting an all-time record. And this is only the beginning:we made investments in Thailand, China, Vietnam, Korea andelsewhere in this exciting growth region. And we continued tomake signicant progress on several mega projects designed to

accelerate our growth in Asia Pacic and the Middle East.

We expanded EBITDA margins1 more than 200 basis points ata Company level and achieved year-over-year EBITDA marginexpansion or seven consecutive quarters, excluding certain items.2

1 EBITDA is deined as earnings beore interest, income taxes, depreciation and amortization.EBITDA margin is deined as EBITDA as a percentage o sales. EBITDA and EBITDA marginare presented excluding certain items.

2 See Supplemental Inormation at www.dow.com/inancial or a description o these items.The Dow Chemical Company


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u First Quarter

Dow signs a deinitive agreement to divest Styron to BainCapital Partners or $1.6 billion. The Company also inalizes thesales o its acrylic acid and esters business in Clear Lake, Texas,and its UCAR Emulsion Systems specialty latex business inNorth America to Arkema.

The Company surpasses its ull-year growth synergy target

related to the acquisition o Rohm and Haas, delivering$530 million in sales on an annual run-rate basis.

Dow successully completes a two-year, multimillion-dollarproject to transorm its STYROFOAM Brand Insulation to amore sustainable manuacturing technology in North America,cutting in hal the greenhouse gas emissions rom productionat all o its converted acilities in the region.

DOW POWERHOUSE Solar Shingle receives aGLOBE Foundation award or Environmental Excellencein Emerging Technology.

Dow AgroSciences announces the irst commercial saleoSmartStax corn h ybrid. A revolutionary new seed traitcombination, SmartStax also receives theAgProfessionalReaders Choice 2009 New Product o the Year award.

Paul Polman, CEO o Unilever PLC and Unilever N.V., is electedto Dows Board o Directors, and William H. Weideman isappointed Executive Vice President and Chie Financial Oicer.

Dow supports eorts to assist disaster recovery in Haiti andChile, ollowing devastating earthquakes in both countries.

u Second Quarter

Dow Advanced Materials1 hosts its irst-ever Sector Day or mediaand investors, during which it projects sales will grow to $12 billionby 2012 and EBITDA will nearly double to roughly $3 billion by 2012.Growth will be driven by leadership positions in ast-growing end-markets, a strong geographic position and a robust innovation pipeline.

Dow exceeds its commitments to deliver cost synergies relatedto the acquisition o Rohm and Haas and to reduce structuralcosts, achieving a run- rate o more than $2 billion.

Dow completes the sale o Styron and exceeds its goal o divesting$5 billion in non-strategic assets in less than two years.

Joint venture Dow Kokam breaks ground on a world-scalelithium ion battery manuacturing acility in Midland, Michigan.In conjunction with the groundbreaking, Dow hosts U.S. Vice

President Joe Biden at its headquarters and showcases severalo the Companys major green technology initiatives.

Dow and Cobblestone Homes introduce Michigans irst aordablenet-zero energy home, constructed with energy-eicient technologiesrom Dow.

Dow Electronic Materials announces a multi-phase plan toexpand its trimethylgallium (TMG) production capacity to servethe ast-growing LED industry. Plans include adding signiicantTMG capacity at existing U.S. acilities and building a newmanuacturing plant in Cheonan, Korea.

Dow AgroSciences and Bayer CropScience enter into cross-licensingagreements or cotton technologies. Through the combination oleading technologies such as WideStrikeInsect Protection andGlyTol, cotton growers worldwide w ill have more choices orimproving productivity.

Dow and BASF receive a 2010 Presidential Green Chemistry ChallengeAward or jointly developed hydrogen peroxide to propylene oxide(HPPO) technology. The technology vastly improves the productionprocess o a key chemical intermediate, propylene oxide.

Dow wins our 2010 American Chemistry Council ResponsibleCare Energy Eiciency Awards or programs that improved

energy eiciency at three o the Companys U.S. acilities.

Dow is added to the NASDAQ OMX CRD Global Sustainability 50Index or the irst time. The index is comprised o companies thathave taken a leadership role in sustainability perormance reporting.

Dow continues its commitment to chemical saety with a ive-year,$5 million research grant to The Hamner I nstitute.

u Third Quarter

Dow is the irst-ever chemical company to receive the NationalSaety Councils international Robert W. Campbell Award. Theprestigious award honors a company that up holds Environment,Health and Saety as key business values.

Sales in emerging geographies surpass $4 billion in the quarteror the irst time in the Companys history. Continuing itsocus on growth in emerging geographies, Dow, along withSaudi Aramco, conirms that Jubail Industrial City is the plannedsite location or a proposed joint venture petrochemical project.

Dow and Mitsui & Co. Ltd. sign a deinitive agreement to orma 50:50 manuacturing joint venture to construct, own and operatea new membrane chlor-alkali acility at Dows manuacturingcomplex in Freeport, Texas.

Dow announces the irst 100 ull-time jobs to support thedevelopment o the DOW P OWERHOUSE Solar Shinglein Midland, Michigan.

Dow Electronic Materials inaugurates its new organic lightemitting diode (OLED) materials acility in Cheonan, Korea.

Dow becomes an oicial Worldwide Olympic Partner. Thistop sponsorship extends through 2020 and will allow Dowto showcase its people, products, scientiic excellence andcommitment to sustainable solutions on a global stage.

Dow and India-based Tata Consultancy Services celebratethe construction o a new Business Process Service Centerin Midland, Michigan. The partnership supports a businessservices model that is expected to deliver world-classcapabilities at an estimated 30 percent savings, whilecreating new jobs in the Great Lakes Bay Region.

Dow announces a technology breakthrough project that willincrease polyolein elastomers manuacturing capacity at itsproduction acilities in Freeport, Texas; Tarragona, Spain; andPlaquemine, Louisiana.

Dow AgroSciences showcases a new reuge-in-the-bag concept.Pending registration by the U.S. Environmental ProtectionAgency, the concept will be commercialized asSmartStaxReuge Advanced and will provide a single-bag solutionor reuge reduction in the U.S. Corn Belt as early as 2012.

Dow introduces ENLIGHT Polyolein Encapsulant Films thatcan enhance eiciencies in photovoltaic module productionand lower conversion costs. Commercial-scale manuacturingo the ilms begins in Findlay, Ohio, in the ollowing quarter.

Dow is named to the Carbon Disclosure Leadership Indexby the Carbon Disclosure Project or the sixth year.

Dow Chairman and Chie Executive Oicer Andrew Liveris isappointed by President Barack Obama to the Presidents ExportCouncil. Liveris joins labor leaders, congressional representatives andCEOs rom other top U.S. companies in advising the Administrationon how to achieve its goal o doubling exports in the next ive years.

u Fourth Quarter

Dow announces the successul startup o a new Solution LinearLow Density Polyethylene II train (SPE II) in Thailand. SPE IIis owned by Siam Polyethylene Company Limited, a joint ventureo Dow and Siam Cement Group.

Dow and the Shenhua Group submit a Project Application Repoto the Chinese government or approval to bu ild and operate aworld-scale integrated complex in Yulin City, Shaanxi Province

Dow AgroSciences is granted a U.S. patent or crop plantsthat contain one o Dow AgroSciences new class o herbicidetolerant traits.

DOW POWERHOUSE Solar Shingle receives UnderwritersLaboratories (UL) saety certiication. The certiication is a

milestone toward its planned 2011 commercialization.

Dow Electronic Materials announces it will construct a newmanuacturing acility in Eastern China to meet the growingmaterial demand within the printed circuit board, electronic andindustrial inishing, and photovoltaic industries in A sia Paciic.

Dow Coating Materials announces a breakthrough series oproducts designed to signiicantly reduce paint manuacturersdependence on a key raw material, titanium dioxide.

Dow Water & Process Solutions announces that its reverseosmosis technology will be used in the worlds largest 16-inchdesalination plant, the Soreq Plant, located near Tel Aviv, Israe

Dow breaks ground on a new manuacturing acility in southeVietnam or the production o polymers used in paint, coatingsconstruction, packaging, home and personal care industries.

Dow announces plans to build a propylene glycol plant inThailand. The new acility will use propylene oxide derivedrom the new, sustainable HPPO technology, developedjointly by Dow and BASF.

Dow continues to make solid progress in deleveraging itsbalance sheet, reaching a net debt to total capitalization

ratio o 42.6 percent by year-end.

Dow announces that its largest manuacturing acility in Brazil,the Aratu Complex, will add biomass to its portolio o cleanenergy sources by the end o 2012.

Dow partners with the International Union o Pure and ApplieChemistry as the irst global partner or the International Yearo Chemistry in 2011.

2010 Achieements

In 2010, Dow was ocused on the executiono our strategy and delivering on thepromise o our new portolio.

The Dow Chemical Company1 Dow Advanced Materials includes the Electronic and Specialty Materials, and Coatings andInrastructure operating segments.


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The Dow Chemical Company 2010 Annual Stockholder Sum

Andrew N. LierisPresident, Chie Executive Ocerand Chairman o the Board

William H. WeidemanExecutive Vice President andChie Financial Ocer

William F. BanholzerExecutive Vice President,Ventures, New BusinessDevelopment & Licensingand Chie Technology Ocer

William L. CurrChie Tax Ocer andAssistant Secretary

Ronald C. EdmondsVice President and Controller

Corporate Ofcers(at February 25, 2011)

James R. FitterlingExecutive Vice President o The DowChemical Company and President,Plastics and Hydrocarbons

Gregor M. FreiwaldExecutive Vice President, HumanResources, Corporate Aairs,& Aviation

Michael R. GambrellExecutive Vice President,Manuacturing andEngineering Operations

Heinz HallerExecutive Vice President andChie Commercial Ocer

Charles J. KalilExecutive Vice President,Law and GovernmentAairs, General Counseland Corporate Secretary

Daid E. KeplerExecutive Vice President,Business Services, ChieSustainability Ocer andChie Inormation Ocer

Juan R. LucianoExecutive Vice President o TheDow Chemical Company andPresident, Perormance Division

James D. McIlennGroup Senior Vice President,Mega Projects

Geoer E. MerszeiExecutive Vice President oThe Dow Chemical Company;President o Dow Europe,Middle East and Arica; andChairman o Dow Europe

Jerome A. PeribereExecutive Vice President o The DowChemical Company and Presidentand Chie Executive Ocer, DowAdvanced Materials

Fernando RuizCorporate Vice Presidentand Treasurer

Carol A. WilliamsGroup Senior Vice President oThe Dow Chemical Companyand President, Chemicals andEnergy Division

Gregor T. GrocholskiCorporate Auditor

W. Michael McGuireAssistant Secretary

Am E. WilsonAssistant Secretary

Seated let to right:Michael R. Gambrell, Charles J. Kalil, Andrew N. Liveris,William H. Weideman, David E. Kepler

Standing let to right: Jerome A. Peribere, Heinz Haller, William F. Banholzer,Juan R. Luciano, James R. Fitterling, Gregory M. Freiwald, Geoery E. Merszei,James D. McIlvenny, Carol A. Williams

Executie Leadership Committee(at February 25, 2011)

Corporate GoernanceAt Dow, we believe our success depends on maintaining the highestethical and moral standards everywhere we operate. That ocus onintegrity starts at the top. Eective corporate governance beginswith the perormance o the Board o Directors.

Dow exemplies good governance with a presiding director;directors with solid, diverse experience and credentials; corporategovernance guidelines; and codes o business conduct and nancialethics. Independent directors comprise a substantial majority oDows Board.

Dows corporate governance guidelines address important aspectso Dows corporate governance structure, such as criteria ordirector qualications, election, continuing education and tenure;ongoing improvement o Board eectiveness; and a rameworkor the evaluation o management and succession planning.

During 2010, Dow again achieved the highest rating possible orits standards o corporate governance rom GovernanceMetricsInternational, an independent research and ratings agency.

More inormation on Dows corporate governance, including Dowcorporate governance guidelines, Board Committee charters andCode o Business Conduct, is available online at www.dow.com

Andrew N. Liveris, president, chie executive ocer and chairmanand William H. Weideman, executive vice president and chienancial ocer, executed the certications required by Secti ons302 and 906 o the Sarbanes-Oxley Act o 2002 on February 182011, and led Managements Report on Internal Control OverFinancial Reporting, as required by Section 404. The certicationswere led as exhibits to the Companys Annual Report on Form10-K or the year ended December 31, 2010, and copies areincluded herein.

In addition, Mr. Liveris certied to the New York Stock Exchang(NYSE) on May 27, 2010, that he was unaware o any violations the Company o the NYSE corporate governance listing s tandardin eect as o that date. The certication was made in accordanwith the rules o the NYSE.

Andrew N. LierisPresident, Chie Executive Ocerand Chairman o the Board

Arnold A. AllemangDirector since 1996

Jacqueline K. BartonArthur and Marian HanischMemorial Proessor o Chemistry,

Caliornia Institute o TechnologyDirector since 1993

James A. BellExecutive Vice President,Corporate President andChie Financial Ocer,The Boeing CompanyDirector since 2005

Je M. FettigChairman and Chie ExecutiveOcer, Whirlpool CorporationDirector since 2003

Barbara H. FranklinPresident and Chie ExecutiveOcer, Barbara FranklinEnterprises and Former U.S.Secretary o CommerceDirector 19801992 and1993 to date

John B. HessChairman and Chie ExecutiveOcer, Hess CorporationDirector since 2006

Paul PolmanChie Executive Ocer,Unilever PLC and Unilever N.V.Director since 2010

Dennis H. ReilleFormer Non-Executive Chairman,Covidien, Ltd.Director since 2007

James M. RinglerChairman, Teradata CorporationDirector since 2001

Ruth G. Shaw

Former Executive Advisor,Duke Energy CorporationDirector since 2005

Paul G. SternDow Presiding Director,Chairman, Claris CapitalDirector since 1992

Board o Directors(at February 25, 2011)

Committees o theBoard o Directors(at February 25, 2011)

Audit CommitteeB.H. Franklin, ChairJ.A. BellJ.M. FettigJ.M. RinglerP.G. Stern

Compensation andLeadership DeelopmentCommitteeD.H. Reilley, ChairJ.K. BartonJ.B. HessP. PolmanR.G. Shaw

Enironment, Health andSaet CommitteeJ.K. Barton, ChairA.A. AllemangA.N. LiverisP. PolmanD.H. ReilleyJ.M. Ringler

R.G. ShawGoernance CommitteeP.G. Stern, ChairJ.A. BellJ.M. FettigB.H. Franklin

Dennis H. Reilley Paul G. SternJames M. Ringler

J e M . F et ti g B ar ba ra H. Fr an kl in J oh n B . H es sArnold A. Allemang

Andrew N. Liveris

Jacqueline K. Barton James A. Bell

Ruth G. ShawPaul Polman


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The Right Formula or Growth

Our goal in 2010 was to execute or today and build or tomorrow. Even inan environment o economic uncertainty, Dows earnings growth was clearlyevident as we continued to reduce our cost structure, deliver on our synergytargets, strengthen our balance sheet and make signiicant progress intransorming our portolio.

Underpinning our transormation are our pillars:

uWith the right business portolio, we are creating value or our cus tomers throughour higher-growth, higher-margin, market-ocused businesses, many o which are leadersin their industries.

uWith the right geographic presence, we are creating opportunities in new placeswith new customers by expanding our reach in emerging markets.

u Through the right growth pipeline, we are creating new products or new marketsby aligning our substantial research and development investments to address criticalglobal issues.

u With the right people, we are creating passionate leaders at every level and in everypart o our business leaders who execute by understanding and anticipating economicrealities, making smart choices, leading change and inspiring teamwork by example.

Using the same inancial discipline, creative vision and sense o purpose that have always setDow apart, our people the 119th element are transorming Dow into a more innovative,market-driven and technology-rich company, while also helping to transorm our world.

Focus on Megatrends

We have taken an outside-in approach based onthe global demographicsand tectonic shits that arshaping the uture. Thesemegatrends serve as the lethat sharpens our ocus andirects our investments.

Robust Portolio

As one o the worldslargest perormance products,perormance systems,agroscience and advancedmaterials providers, wehave leadership positionsin high-growth, high-marginsectors such as electronics,

water, agriculture, coatingsand alternative energy. Andour restructured global Plasticsranchise is now comprisedin large part o technology-based polymers that are atthe epicenter o growth inhigh-perormance packaging,elastomers and wire andcable applications.

Integration Strength

We deliver unparalleledintegration advantage toour downstream market-driven advanced materials,agrosciences and perormancebusinesses through world-classbuilding blocks powered bytechnology and manuacturingeconomies o scale, coupledwith strategic partnershipsthat bolster our eedstockadvantage.

Sustainabilit Leadership

Our innovation engine isocused on delivering carbonmitigation, alternativeenergy, water puriication,crop productivity, buildingeiciency and many moresolutions that improve liveswhile protecting the planet.Our leadership is validatedby third-party recognition.Our Sustainability Goals areintegral to our corporatevision, mission and values which continue to drivechange that is good or theenvironment, good or peopleand good or business.

Technolog Leadership

Our innovation agenda isocused on megatrends andis backed by a rigorousprocess that enables us todeliver commercial successand bottom-line results.Our rich $30 billion pipelineon a non-risk-adjusted netpresent value (NPV) basisis illed with solutions thatcustomers want and, in turn,will enable us to expandmargins and reduce earningsvolatility over time.

Global Reach

Dows growing geographicpresence means we are nowin a better position than everto capitalize on emergingmarket opportunities, with32 percent o our sales in2010 coming rom theseast-growing regions. Andthis is only the beginningas we continue to makeprogress with key megaprojects that will even urtherexpand our ability to servehigh-growth regions.

Financial Discipline

We continue to driveinancial discipline and, as aresult, have reduced our costructure, lowered debt andstrengthened our balancesheet. In 2010, we delivered$2.4 billion in cost savingsrelated to our restructuringprograms and acquisition-related synergies. Weexceeded our goal to divest$5 billion in non-strategicassets over the last severayears. And we reduced ounet debt to capital ratio

to 42.6 percent. Movingorward, we will maintainour vigilant approach to cosproductivity, while prudentinvesting in growth.

Customer Focus

We have shited our portolioto a more market-driven,customer-centric model,aligning our businessesand innovations to addresscustomer needs. We recognizethat our customers will beour organizing principle orgrowth. That is why we arebuilding relationships withcustomers who are on theoreront o innovation andtechnology dierentiation identiying and anticipatinguture needs throughoutthe value chain.



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STRATEGy-IN-ACTIONReshaped: More Technolog-Rich Businesses

Dows new portolio is preerentially tilted toward specialtychemical, advanced material and agroscience businesses. Thesetechnology-rich platorms are already delivering higher marginsand earnings growth. Since 2009, Dows gross margin hasimproved rom 13 percent to approximately 15 percent. Inaddition, the Company more than doubled its annual EBITDArun-rate perormance since the irst quarter o 2009 to nearly$2 billion in the ourth quarter o 2010.

Advanced Materials and Health and Agricultural Sciences,which serve cus tomers in electronics, health care, agriculture,inrastructure and other ast-growing end-markets, are leadingDows growth. Growth in the Perormance division is driven byour systems-and-solutions approach to customers, an improvingeconomy and strong sales in ast-growing end-markets such aswind energy applications. Together, these segments accountedor sales o $33 billion in 2010.

Meanwhile, our Chemicals and Energy segment continues tobolster its integration strength, ueling downstream growth inour market-driven and perormance businesses. And our Plasticssegment prized or strong back-integration into eedstocks,economies o scale, as well as technology and brand leadership represents the strongest ranchise in the industry.

Reinigorated: Deliering on Our Commitments

We have actively reshaped Dow through aggressive portoliomanagement. In less than two years, we have divested morethan $5 billion in non-strategic businesses exceeding our2009 2010 targets. In 2010, we:

Surpassed our goal of divesting $2 billion in non-strategicassets, ueled in large part by our sale o Styron to Bain Capitalor $1.6 billion. These actions allowed us to reduce debtwhile reeing capital or investment in our higher-growth,higher-margin businesses.

Maintained an aggressive focus to deliver against restructuringand acquisition-related synergy targets, delivering $2.4 b illionin cost savings ahead o schedule.

Continued to manage our balance sheet, evidenced by the factthat our net d ebt to total capital ratio reached 42.6 percent byyear-end. This was driven in part by more than $4 billion o cashrom operating activities.

THE RIGHT PORTFOLIO

Dow has reshaped and repositioned its portolio to take on the complex realitieso today and tomorrow. We have reorganized our businesses around customersand global market needs. We have preerentially invested in higher-growth andtechnology-rich businesses, while preserving our unique integration advantage.And we have exited businesses that no longer meet our strategic vision. As a result,

we have a diverse portolio o leading businesses that are capable o creatinggrowth or our customers and long-term value or our stockholders.

Plastics: A Portolio with Focus

We have executed changes to our Plastics segment thathave resulted in a tighter market ocus and superiorinancial returns.

We have streamlined our portolio, moving away rom high-cost commodities toward higher-margin specialties. Our ocuis on high-value-added polymers, such as linear low densitypolyethylene (LLDPE), which serve market segments such as

lexible ood and specialty packaging, and health andhygiene. These specialty market segments demand andreward new technology innovation. And we are bringinour solutions to regions that are growing rapidly asevidenced by a joint ventures start-up o its SolutionLinear Low Density Polyethylene II train in Thailand.

Strengthening Our Feedstock Adantage

At the same time, we plan to boost our ethanecracking capability in the United States by up to30 percent over the next three years, capitalizing onthe regions aordable and stable natural gas prices.In addition, we are reviewing joint venture options orbuilding a natural gas liquids ractionator. Both actionswill urther strengthen the competitive advantage oour higher-margin specialty plastics, Perormance andAdvanced Materials segments.

Through cross-selling opportunities, new business and

new solutions, we have captured signiicant growth

synergies since our 2009 acquisition o Rohm and Haas.

Already, we have realized more than $1 billion revenue in

growth synergies on an annual run-rate basis, exceeding our

2010 target by more than $500 million and we are rapidly

accelerating toward our 2012 target o $2 billion.

We continue to bolster our integration strength in

cost-eective ways. In December, Dow inalized a joint

venture agreement with Mitsui to construct and operate

a new chlor-alkali acility at Dows Freeport, Texas, site.

The 50:50 joint venture will result in a world-scale chlor-

alkali plant that will supply critical building blocks to Dows

downstream businesses at lower cost and with less capital.

Relationships: Partnering or Growth

Overall, our joint ventures delivered $1.1 billion in EBITDA toDow in 2010, representing a 54 percent increase rom 2009,

excluding certain items.1 An integral part o our businessmodel, our joint venture activities have risen markedly inrecent years. For example:

Dow Cornings equity earnings have grown by nearly 20 percenta year since 2004. This growth is expected to continue as newsilicone capacity comes online in China and as Dow Corningincreases its ability to support key industries such as electronicsand solar through its Hemlock Semiconductor joint venture.

EQUATE Petrochemical Company, which produces polyethyleneand ethylene glycol or customers throughout Europe, MiddleEast and Asia, is beneiting rom recent expansions that nearlydoubled production capacity.

Dow Kokam broke ground on its Midland Battery Park facilityin June 2010. The plant, which will manuacture 600,000watt-hours o advanced lithium ion b atteries or the growingplug-in hybrid and electrical vehicle business, is on target orstart-up in irst quarter 2012. Already revenue positive, the jointventure also began commercial production at a new acilityin France, to produce battery systems to power 15,000 ullyelectric vehicles annually.

2010 Dow Proportionate Share of All Principal JV Sales* by Geography

North America24%

Europe, Middle Eastand Africa28%

Asia Pacific41%

Latin America7%

i i li ilii i l li

, ,

i ll i i l l

r ri

E r i l Eri

i i i

L i r i

Equity Earnings from Nonconsolidated Affiliates($ in millions)

05

$964

06

$959

07

$1,122

08

$787

09

$630

10

$1,112

+

+

1 See supplemental inormation on www.dow.com/inancial or a description o these items.

*Adjusted Net Sales is equal to Net Sales or these joint ventures less sales to Dow and/orto other Dow joint ventures.


9/17


Electronic and Specialt Materials

Customer-centric businesses developingcustomized advanced materials orapplications rom semiconductors andfat panel displays to water processingand cellulosics or pharmaceuticalsand ood

STRENGTHS & STRATEGy

#1 or #2 positions in chemical mechanical

planarization (CMP) pads/slurries,semiconductor photolithography materialsand metallization or circuit boards

#1 in reverse osmosis membranes,ion exchange resins

Strong positions in high-growthindustries: pharmaceuticals, personalcare, ood, water and electronics

Well-positioned, growing manufacturingand R&D base in Asia Paciic

Addressing growing consumer demandor sustainable products

2010 HIGHLIGHTS

Opened world-class OLED manufacturingplant in Korea; also broke ground ornew Dow Seoul Technology Centerand LED precursor manuacturingplant in Korea and a new East Chinamanuacturing center to serve electronicsand photovoltaic industries

Announced the worlds largestdesalination plant will be enabled

by Dow Water Process & Solutionstechnology

Health and Agricultural Sciences

A global leader with high-value productsin plant biotechnology, agriculturalchemicals, urban pest managementand healthy oils


Agricultural chemistry pipeline filled withhigh-value solutions and proprietaryormulations; new products anticipatedto yield $800 million in sales by 2013

Significant technology-driven growth,led bySmartStax technology today,coming with Dow Herbicide TolerantTrait (DHT) Technology System in uture

Leading-edge insecticide, herbicide,ungicide and umigant solutionsor growers

Bolt-on seed acquisitions continueto strengthen channel access

2010 HIGHLIGHTS

LaunchedSmartStax and introducedSmartStax Reuge Advanced concept

Granted patents for DHT platform in theUnited States, Mexico, New Zealand,South Arica and China

Entered into cross-licensing agreementswith Bayer CropScience regardingcotton technologies

Expanded seed marketing capabilitiesthrough bolt-on acquisitions, includingGrand Valley Hybrids

Coatings and Inrastructure

Industry-leading businesses ocusedon building solutions, constructionchemicals, coating materials, andadhesives and unctional polymers


Worlds largest and broadest suppliero raw materials and largest R&Dcommitment in the coatings industry

Focused coatings growth on low-volatileorganic compound (VOC)/low-odorcoatings, advanced hiding platorms,and a broad coating additives platorm

#1 position in extruded polystyreneoam insulation and cellulosic-basedconstruction chemical additives;breakthrough development in

solar shingles

Positioned for emerging market trends,including more stringent energystandards or buildings, coatingsolutions or low-VOC/low-odorand solventless adhesives orsustainable packaging

2010 HIGHLIGHTS

Introduced new coatings technologythat enables superior hiding perormanceand reduced use o titanium dioxide;invested in new emulsion plants inEast China and Vietnam

Received UL certification for the

DOW POWERHOUSE Solar Shingle

Launched next-generationSTYROFOAM Brand Insulationwith an unprecedented50-year warranty

Technology-driven businesses providingtailored solutions or civil engineering,appliances and urniture, oil and gas,automotive, wind energy, and wireand cable


Leading industry positions in automotiveglass and structural bonding, ormulatedepoxy and polyurethane systems,polyolein elastomers, plastic additives,specialty resins and ilms

Expertise in material science, polymerprocessing and ormulation technologies

Rich product pipeline fueled bymarket trends in solar and windenergy, growing inrastructure andtransportation needs, energy eiciencyand enhanced sustainability

Global manufacturing presence anddeep integration advantage

2010 HIGHLIGHTS

Achieved double-digit volume growth inDow Formulated Systems ueled by windenergy and energy eiciency

Dow Oil & Gas announced comprehensiveoering in carbon dioxide management

Launched lead- and phthalate-free DowECOLIBRIUM Bio-Based Plasticizers orwire and cable applications

Increased elastomer capacity throughbreakthrough technology; constructinga new specialty elastomers plantin Thailand

Plastics and Hdrocarbons

Worlds largest supplier o essentialplastics materials, solutions andtechnologies; leading global produceo polyethylene and ethylene


Unparalleled economies of scale; channmarket in almost 100 countries

Highly productive and scalable operatstrong back-integration

Brand leadership, differentiated prodlines and strong downstream ranchis

2010 HIGHLIGHTS

Joint venture started up new Solution Low Density Polyethylene II train in Th

Translated ability to crack light feedslinto higher margins and proitability

Announced plans to expand ethanecracking capability on U.S. Gul Coasand review joint venture options or nagas liquids ractionation

Perormance Sstems Perormance Products

Product-centric businesses oering superiorproduct perormance at competitive cost


Worlds largest producer of propyleneoxide, polyether polyols and epoxy resins

Novel building blocks help fueldownstream growth

Broad product mix for diverseapplications in gas treatment,detergents, herbicide ormulations,personal care products, heating andcooling, ood and beverage processing,uel additives, paints and coatings, andpharmaceuticals

Global leadership in heat transfer fluids

Back-integration into feedstockssupports a low-cost manuacturingbase and reliable product supply

Global manufacturing presence servescustomers needs eiciently

2010 HIGHLIGHTS

Returned to pre-recession margins

Announced plans to build a newpropylene glycol plant in Map Ta Phut,Thailand, to expand Dows presencein Asia Paciic

Received 2010 Presidential GreenChemistry Challenge Award orHPPO technology

Market leader in Concentrating SolarPower, supplying record volumes oDOWTHERM A heat transer luidin 2010

Chemicals and Energ

Largest producer o chlorine, causticsoda, puried ethylene oxide andchlorinated organics; one o the worldlargest industrial power producers


Highly integrated operations with all ochlorine and 90 percent o ethylene oxproduced by Dow used internally

Highly advantaged power andsteam operations

By-product recovery and re-use reducraw material costs, and provides moresustainable manuacturing

Forging partnerships to bolster ourintegration strength and build onour equity-light model or low-cost,low-capital growth

2010 HIGHLIGHTS

Finalized joint venture with Mitsui toconstruct a new membrane chlor-alkaliacility in Freeport, Texas

Right-sized asset footprint with closureo non-strategic assets


10/17


Innoating or Growth

Dows R&D pipeline is deep and diverse. We have more than500 projects in our pipeline that together represent a non-risk-adjusted net present value (NPV) o $30 billion, or $12 billionon a risk-adjusted basis.

The health o this pipeline is evident with more than $16 billionin non-risk-adjusted NPV in early-stage exploration and$6 billion in projects approaching commercialization. Ourrigorous prioritization continues to ensure that we supportopportunities to investigate a wide variety o disruptiveinnovative technologies, while continuing to delivernear-term, bottom-line results.

THE RIGHT PIPELINE

Powered by science and connected to customer and societal needs, our innovationpipeline has a net present value o $30 billion today triple the value in 2007. We arestrategically aligning our R&D investments with key global megatrends that represent$350 billion in addressable market opportunities. From SmartStax seeds torevolutionary DOW POWERHOUSE solar shingles, rom coating ormulationsthat improve indoor air quality to puriication solutions that deliver

clean drinking water, our R&D engine is delivering breakthroughtechnologies and driving Dows growth while alsohelping to shape the uture.

STRATEGy-IN-ACTION

Technolog Integration: A PowerulPath to Innoation

By using our scope and scale to connect our materialsscience expertise to customer needs, we are usinga single epoxy molecule to create ormulations or aproduct as small as a 35 nm chip and as large as a60-meter wind blade. This new epoxy ormulationcombines excellent thermal characteristics and strongbonding capabilities with low properties that make itan ideal underill or lip chips a chip packagingtechnique that is avored in smart phones and otherlightweight electronic devices.

But that is not all. This epoxy has properties that give ita ast inusion rate and make it perect or the eicientmanuacture o wind turbine blades. Two demandingindustries. Two critical market needs. One promisingmaterial used to create high-margin, revolutionarycustomer solutions. This is the power o technologyintegration. This is the power o one Dow.

Managing or Results

Our commitment to innovation has never wavered. In 2010,despite a sluggish economy, we continued our strong investmentin R&D, increasing spending to $1.7 billion. Plus, our stringentR&D pipeline management system helps ensure we optimizeour investments in these important ways:

A heightened customer and market ocus. We systematicallyidentiy market opportunities, then meet them with targetedsolutions that help our customers win in the marketplace.Voice-o-the-customer research and strong cross-collaborationbetween unctions and businesses help pinpoint unmet needs.

Disciplined, cross-company portolio management. OurInnovation Growth Playbook is used to optimize the distributiono long- and short-term projects in our pipeline. Based ona 10-year horizon, these R&D projects are prioritized, irstwithin individual business units, and then ultimately acrossthe Company as a whole. This allows us to allocate our

resources to the projects with the highest potential return. An R&D organization that targets both short-term business

objectives and long-term strategic research. In 2010,approximately 75 percent o our Core R&D unds wereallocated directly to the businesses. This allows us tostrengthen our market leadership in existing technologies,while capturing growth opportunities through new marketsor disruptive, technological change.

A world-class team o more than 6,000 researchers.Increasingly, we are taking a global approach to innovation,and in 2010, we hired more than 100 new PhDs rom theworlds top universities. We operate more than 40 R&Dacilities globally, and are planning a new R&D center at theKing Abdullah University o Science and Technology inSaudi Arabia. This global approach to inding the bestintellectual power helps us remain competitive in localmarkets and enables us to attract top talent.

Accelerating Innoation through Collaboration

Dow multiplies the power o our R&D investments and ourinnovation reach through our ever-growing global networko innovation partners.

Most recently, we teamed with Oak Ridge National Laboratory tocreate a Center o Energy Excellence to research the development

o low-cost carbon iber or wind turbines. We also work with topR&D talent at premier educational institutions. For example, withthe Caliornia Institute o Technology, we are developing next-generation, low-cost, high-eiciency photovoltaic materials. WithShanghai Jiao Tong University in China, we are making advancesin polymer science. And at Northwestern University, we arepartnering to extend our expertise in catalysis.

Among our achieements in 2010:

Our breakthrough DOW POWERHOUSE Solar Shinglepassed more than 50 third-party tests to achieve ULcertiication, a critical milestone or 2011 commercialization.

SmartStax trait technology, developed under an R&D and

cross-licensing agreement between Dow AgroSciences andMonsanto, was commercially launched in North America.

Dow AgroSciences was granted patents in key countries for DowHerbicide Tolerant Trait Technology in corn. When launched, thenew technology system will enable exceptional weed control bypartnering with and improving current cropping systems to oergrowers unsurpassed lexibility, convenience and value.

Our 16-inch membrane reverse osmosis water filters werechosen to be used in the worlds largest desalination plantin Israel. These new ilters are twice the size o previous units,helping to make the production o clean drinking water romseawater more aordable and energy eicient.

Dows R&D investments are strategically alignedto megatrends that represent $350 billion inaddressable market opportunities with growthrates o between 1.3 and 3 times GDP.

R&D Pipeline ValuationNPV($ in billions)

5

10

17

2830

1997 2007 2008 2009 2010

Preservative

Advanced Materials Division

Perormance Division

Dow AgroSciences

Corporate and New Businesses

Basics

Our portfolio of low-VOC/low-odor binders continues to gawide acceptance by paint manuacturers worldwide. Led by suite o acrylic-based AVANSE binders, the p ortolio provtough, durable coatings that meet the most stringent VOC aenvironmental standards.

Dow Electronic Materials introduced new products in a varietyo areas including polishing pads, slurries, photoresists,metallization and ilms helping to urther our leadershippositions in the industry. In act, more than 95 percent oall smart phones are manuactured using products romDow Electronic Materials.

Dow Coating Materials introduced a new technology platformthat takes hiding capability to a new level by signiicantlyreducing customers dependence on titanium dioxide.

Dow Oil & Gas launched ELEVATE CO 2 Enhanced Oil RecovConormance Solution, an innovative, new technique de signto increase oil production at existing wells while simultaneoreducing operating expenditures.

2010 Pipeline Valuation by Stage($ in billions)

Exploration

16.3

2.5

Development

6.4

3.7

Implementation

6.95.8

NPV

Risk-Adjusted NPV


11/17

The Dow Chemical Company192010 Annual Stockholder Summary 18

Tomorrows Growth Driers Four Ke Megatrends

Our R&D investments are strategically aligned with our key megatrends:Health and Nutrition, Transportation and Inrastructure, Consumerism, and Energy.These megatrends represent $350 billion in addressable market opportunities withabove-average growth rates o up to three times global GDP. By aligning our R&Dinvestments to these very real growth drivers, we are delivering practical solutionsor clean water, aordable energy and increased ood resources, while creatingnew earnings streams or Dow.

Health and Nutrition Transportation and Inrastructure Consumerism Energ

Market Driers Emerging economies

Higher living standards

Aging populations

Urbanization

Aging infrastructure

Global integration

Emerging economies

Customization, convenience

Wealthier consumers

Challenges of energy demand,cost and global climate change

Opportunit Areas Agriculture

Functional foods

Health care

Construction and transportation

Coatings

Water

Electronics and communications

Home and personal care

Furnishings

Energy production and efficiency

Energy storage

Ke Dow Capabilities Biotechnology

Chemistry

Material sciences

Building materials

Advanced materials science

Filter membrane elements

High throughput formulations capability

Optical materials

Polymer performance modeling

Rapid formulation development

Alternative energy and feedstocks

Building integrated p hotovoltaics

Lithium ion batteries

Dow Addressable Market >$70 billion >$75 billion >$140 billion >$60 billion

Recent Innoations uLeading seed traits in deelopment:Proprietary Dow Herbicide Tolerant TraitTechnology andSmartStax ReugeAdvanced, a blended producto 95 percentSmartStax and5 percent non-insect-traited seed,deliver growth opportunities in keyrow crops.

u Healthier oils: In 2010, zero transat Omega-9 oils were introduced inmicrowave popcorn, resulting in60 percent less saturated at and

nearly 40 percent ewer caloriesthan other microwave popcorns.

uPharma solutions: METHOCELDirect Compression (DC) PremiumGrade Hypromellose Polymers delivercost eective, perormance-enhancingdrug processing and delivery solutions.

uSolutions or cleaner air: AERIFY dieselparticulate ilters will deliver lower emissions andreduce impact on uel economy. Launch: 2012

u Solutions or improed coatings: Ournext-generation hiding coatings technolog ysigniicantly reduces manuacturers dependenceon titanium dioxide while also addressingperormance, reducing VOCs and providingbetter economics.

uSolutions or cleaner water:Dowsmembrane technologies are positionedto reduce the cost o desalination and

reuse 35 percent by 2015.

uNext-generation displatechnologies: Dow continuesto be a world leader in activematrix OLED materials.

uLeading-edge semiconductortechnolog: Our CMP pads andslurries use innovative technologythat reduces deects and cost oownership or advanced nodes.

uSmarter cleaning technolog:Dow is producing more sustainableabric care solutions and biodegradable

surace cleaners.

uHigh-qualit LED precursormaterials: Dow is a leading suppliero precursors such as TMG to the LEDmarket and has patented precursormanuacturing processes and deliverytechnology. In 2010, the Companyannounced plans to increase productioncapacity in the United States and inKorea to meet surging global demand.

uBreakthrough solar solutions:DOW POWERHOUSE Solar Shinglecombines a rooing shingle with asolar cell, so it seamlessly blends withasphalt roos and provides roo protection.Launch: 2011

uWind energ sstems: AIRSTONESystems or wind energy includeproducts and solutions that are idealor wind blade abrication. In 2010, weannounced plans to expand capacityto serve wind energy customers in

China and North America.uAdanced batter technologies:

Joint venture Dow Kokam is buildingan advance d manuacturing plant todeliver superior lithium ion batterytechnology or plug-in hybrid andully electric vehicles.

2010 Annual Stockholder SumThe Dow Chemical Company


12/17


Driing Growth in Emerging Geographies

Because o Dows transormed portolio o value-addedtechnology businesses and our broad geographic reach, oursales rom emerging geographies again increased in 2010.For the year, emerging geographies generated 34 percento total sales. In act, sales in these areas surpassed $16 billionin 2010, setting an all-time record or the Company.

To accelerate our ongoing transormation, Dow is buildingits presence in high-growth, high-potential geographies suchas Greater China, Southeast Asia, Latin America, Eastern Europe,the Middle East and Arica. We are increasing investment in ouradvanced innovation capability, world-class local talent anddierentiated product portolios to support our customersbusinesses and the demands o new middle-class consumers.

Our inestments in 2010 included:

The start-up of a specialty polyethylene plant in Thailand,capturing our share o growth in the region.

Construction of a Dow Electronic Materials plant in easternChina to meet material demands o the Chinese photovoltaicand electronics industry.

Construction of a new manufacturing facility in southern Vietnamor the production o polymers used in the paint, coatings,

construction, packaging, home and personal care industries. The addition of a new Dow Seoul Technology Center in Korea

ocused on technological advancements in lat panel displaytechnologies, semiconductor devices and related applications.

The inauguration of a new OLED Electronic Materials facilityin Korea. During the last 10 years, Dow has invested morethan $300 million in the Korean electronic materials industryto support new business development, manuacturing, andresearch and development.

THE RIGHT GEOGRAPHIC PRESENCE

Today, Dow is poised to succeed as one o the most global corporations in the world.Our geographic reach, in developed and developing markets alike, allows us to capturenew opportunities and strengthen our ability to achieve sustainable growth. Today weare accelerating our growth by bringing our innovations to emerging economies regions where ast population growth and a growing middle class are resulting in

new demand or our products and double-digit growth or the Company in 2010.

28%

2008 Pro Forma Sales2010 Sales

32%

Projected 2012

35%

2010 Sales by Geography

North America

Europe, Middle Eastand Africa

Asia Pacific

Latin America

36%

34%

18%

12%

GEOGRAPHIC PRESENCE CHINAEleating Competitieness through Mega Projects

Our investments in mega projects are a cornerstone o ourgeographic growth strategy. These projects provide capacityor the building blocks needed to support the continued growtho our Perormance and market-driven businesses and ourcustomers growth.

Our mega projects ollow an equity-light model, in which weshare the assets and costs with a regional partner. This allows usto maintain our integration and our size, while reeing up capitalor investments in our Perormance and Advanced Materialsbusinesses. In 2010, we continued to make signiicant progresswith several mega projects:

We entered into the final stages of the front-end engineeringand design study o a proposed joint venture project withSaudi Aramco. Dow and Saudi Aramco are working to builda world-scale integrated chemicals complex in Jubail, Saud iArabia. The complex will provide access to advantagedeedstock and increase capacity or ourPerormance businesses.

In Thailand, we invested in expanding and growingour Perormance businesses in Asia Paciic throughour joint ventures with The Siam Cement Group.The site is ully integrated with eedstock suppl yrom a nearby cracker, and in 2010, we launchedour Solution Linear Low Density Polyethylene II train.World-scale Specialty Elastomers and HPPO plantsare also under construction, and we have announcedplans to build a propylene glycol acility as well.

In China, Dow and the Shenhua Group are completinga easibility study to build and operate a world-scaleintegrated complex in Yulin City. This project recentlyreached a key milestone when the partnership submitted theormal Project Application Report to the Chinese government.

Winning Locall

Ultimately, we will grow our geographic presence through stronglocal relationships, strong local knowledge and strong local talent.To reach our growth objectives, Dow has implemented a newgeographic operating model that places senior executives incritical strategic leadership roles at the local level. We havealso introduced the Geographic Leadership Council, whichplays an active role in driving business development, ortiying

government relationships, enhancing customer interaction,and participating in employee management and development.

Dow in China: Innoating or Growth

At the Shanghai Dow Center, Dow researchers andcustomers are working side-by-side to turn marketopportunities into proitable solutions. The R&D acilitysunique Customer Innovation Center converts concepts intoprototypes giving customers a irst-hand opportunity toexperience how their lotions will eel on their customersskin or how their paints will be nearly odorless.

By investing in people, inrastructure and research, Dow isable to quickly ind solutions to unique local needs and tapnew opportunities in new markets. For example, with theacquisition o Rohm and Haas in 2009, Dow has signiicantlyexpanded its electronic materials ootprint and coatingscapacity in mainland China and Taiwan.

As a result, nearly 90 perceno Dows revenue in Greate

China was derived rom ourcombined Perormancesegments in 2010.

Three decades ater Dow irst began

doing business in China, the Shanghai Dow

Center demonstrates how Dow is using its innovation

pipeline to support the growth o its customers in

China. The center houses more than 1,500 employees,

including some 500 scientists and researchers working

across 80 integrated labs.

+Emerging Geographies

Developed Geographies



13/17


Dow inAFRICA

KEy FACTS

Nearly 250 employees

4 manuacturing sites; 6 commercial oices

Presence or more than 50 years

Strategic sourcing region or DowEurope, Middle East and Arica (EMEA)as the largest supplier o hydrocarbons

92 percent o revenue comes rom

Advanced Materials, Health andAgricultural Sciences, and PerormanceSystems and Products

GROWTH OPPORTUNITIES

Inrastructure (more than $700 billionplanned expenditure on inrastructurein Arica in next ive years)

Consumerism (consumer spendingexpected to reach $1.4 trillion by 2020with a middle class estimated between300 and 500 million)

Health and Nutrition (65 percent oAricas population works in agriculture)

Energy (investment o $400 billion insolar projects projected in next 30 years;0.3 percent o North Arican deserts canmeet Europes current electricity needs)

DOW SOLUTIONS AT WORK

More sustainable gold mining practicesin South Arica protect resh water ecologyand maximize water reuse using DowWater & Process Solutions technology

DOW Latex Powder and WALOCELcellulosics were used in the constructiono South Aricas FIFA World Cupstadiums; the two products combineto orm a tile adhesive that keeps thestadiums together

In 2010, Dow established the DowChemical East Arica Ltd., a Kenyancorporate entity that is responsible ordeveloping Dows presence throughoutEast Arica

Dow in theMIDDLE EAST

KEy FACTS

Nearly 160 employees

Nine joint ventures in Kuwait,Saudi Arabia, Bahrain and United ArabEmirates, one manuacturing site

More than 30 years in the Middle East

330 customers in 11 countries


Inrastructure:

Water (FILMTEC and DOWUltrailtration)

Construction (cellulosics or dry mixmortar segment, acrylic binders orinsulation and building envelopes,and latex and acrylics or coatings)

Energy:

Oil and gas (innovations orenhanced oil recovery andoptimized oil production)


Announced in 2009, Dows R&DCenter at the King Abdullah University

o Science and Technology will ocusinitially on water, oil and gas, andinrastructure technologies

Equity-light strategy gives Dowaccess to eedstocks by workingwith local partners to diversiy localeconomies and develop the regioninto a petrochemical hub

Dow and Saudi Aramco are workingto build a world-scale integratedchemicals complex in Jubail,Saudi Arabia

KEy FACTS

13,000 employees

55 manuacturing sites

30+ commercial oices

90 percent o the products sold inEurope are made in the region

Home to approximately one-third oDows manuacturing assets and threeo Dows ive largest integrated sites


Inrastructure:

Construction (leading provider opipe technologies or water, utilities,energy, and oil and gas industries)

Automotive (leading provider oplastics and perormance materials)

Consumerism (leading provider oinnovative solutions or packagingand home and personal care)

Energy (next-generation insulation,wind energy)


Collaboration with top customers,value chain partners, public laboratoriesand academic institutions enableinnovation, aster time to marketand lower upront investment

Unique ValuePark model (with 20companies, 29 plants) in Germanyconnects Dows strategic partners andcustomers on site integrating materiallows and logistics while reducing ixedassets and operating capital

Dow inEUROPE

Broad Geographic Reach

Our geographic presence is ar-reaching, with a balance o developedand emerging economies. Europe and North America continue to be criticalcontributors to Dows present and uture successes, while our investmentpriorities target Asia Paciic, Latin America, the Middle East and Arica to

urther build our position in emerging economies.

Dow inNORTH AMERICA

KEy FACTS

25,000 employees


Investments in higher-margin,higher-growth businesses

Leader in responsible operationsand innovations that addressenergy challenges

Strong network o manuacturing,sales and R&D acilities

Large, integrated sites that providea competitive cost advantage


Energy (innovations in solar and next-generation energy storage technology)

Health and Nutrition (investments inbranded seeds and new trait innovationsare accelerating our growth in U.S. cornand cotton)


Joint venture between Dow and Mitsuito construct a new membrane chlor-alkaliacility in Freeport, Texas

Multiple investments in advancedmanuacturing at Dows MichiganOperations in Midland are resultingin new green-technology jobs:

About 100 new jobs were createdto support development othe DOW POWERHOUSE

Solar Shingle Joint venture Dow Kokam world-scale

lithium ion battery manuacturingacility is expected to employ morethan 800 people when ully operational

Dow and Tata Consultancy Servicesbegan construction o a new BusinessProcess Services Center in Midland,supporting a business service modelthat is expected to optimize serviceswhile creating new jobs or the region

Dow inASIA PACIFIC

KEy FACTS

7,000 employees


18 percent o global sales

Double-digit growth ueled by market-driven Advanced Materials businesses

Investments expanding in region, with$400 million in capital investments in

Advanced Materials in the next threeyears, $800 million in Thailand jointventure investment in the next twoyears, new emulsion plant in Vietnam,and mega project in China

Key strategic alignments with topcustomers in the region


Inrastructure (well-positionedwith industry-leading wateriltration technology and leadingcoatings ranchise)

Energy (supplies resin ormulationor wind blades or all major globalturbine producers)

Health and Nutrition (Dow AgroSciencesrice oil opportunities)

Consumerism (leading supplier oelectronic materials)


New Dow Technology Center in Koreais strategically located to engage keysemiconductor and display customers inAsia Paciic and will house 200300scientists

Dow and the Shenhua Group areworking together to build and operatea world-scale integrated complex ocoal, power and chemicals in Yulin City,Shaanxi Province

Dow inLATIN AMERICA

KEy FACTS

4,000 employees


12 percent o Dows global sales

Sustainability drives innovation(Brazil leads in sugarcane-basedethanol production)

Recognized as a top employer in Braz

Colombia, Argentina, Mexico and Ch


Health and Nutrition (growth-drivingregion or Dow AgroSciences, doubledagrochemicals capacity in Argentina)

Energy (plastic innovations, includingrenewable energy alternatives,lightweighting o vehicles)

Consumerism (sustainable packagingbeverages, household and personal cdriven by growing consumer base)

Transportation and Inrastructure(government investments ininrastructure and growth o middleclass is boosting sales in coatings,insulation products and adhesives;robust automotive production)


Developing plans or world-scaleintegrated industrial park to makepolyethylene rom sugarcane in Brazil

Collaboration through Dowswe.nnovate program and theLatin America Customer Academyosters innovation across sites andidentiies uture market opportunitiesand joint projects


14/17


THE RIGHT INvESTMENTS IN PEOPLE AND THE PLANET

Sustainability means making every decision with the uture in mind. At Dow, weare committed to minimizing our impact and to delivering solutions that help ourcustomers and the rest o society do the same. We believe that i you want tomake sustainability about more than just words, you have to set the bar highand measure your progress rigorously.

2010 marks the mid-point o our 2015 Sustainability Goals. These 10-yearcommitments go beyond our own ootprint and include goals that connectour businesses with helping to solve the worlds biggest challenges

energy, climate change, water, ood, housing and health. Scienceor a sustainable world this is our contribution to protectingthe planet.

Innoations or Tomorrow

Dow is addressing the global water crisis on multiple fronts,including lower-cost desalination technologies, more eectiveultrailtration systems and support o initiatives such as DowLive Earth Run or Water, a series o 6 km run/walks held incities across the world to raise awareness and unds or cleandrinking water.

We are investing in next-generation solar technologies acrossthe entire value chain rom expanding polycrystalline siliconproduction through Dow Cornings Hemlock Semiconductorjoint venture to manuacturing our breakthrough DOWPOWERHOUSE Solar Shingle or homeowners.

We continue to innovate technologies for more ef ficient windenergy. In 2010, we partnered with Astraeus Wind Energy, Inc.

and MAG Industrial Automation Systems to improve themanuacture o wind turbine blades.

As a recognized leader in building insulation applications,Dow Building & Construction was selected by the U.S.Department o Energy to lead a multi-year project thatwill combine research and residential in-home testing todevelop enhanced home energy-eiciency retroit solutions.

Responsible Operations

In 2010, Dow received the NationalSaety Councils prestigious RobertW. Campbell Award. This internationalaward recognizes a company thatupholds Environment, Health andSaety (EH&S) as a key business

value and clearly links measurable achievement in EH&Sperormance to productivity and proitability.

Since 1994, Dow has prevented more than 90 million metrictons o carbon dioxide (CO2) rom entering the atmosphereand saved more than $9 billion in energy costs. And wecontinue to improve our processes. For example, our patentedlare technology, which uses hydrogen instead o methane atselected sites, will save more than $10 million during the next

10 years and eliminate 27,000 metric tons o emissions eachyear the equivalent o taking about 4,600 cars o the road.

Our industrial energy-efficiency efforts have saved 1,800trillion Btu equivalent to the electrical usage o all theresidential homes in Caliornia or more than 20 months.

Our products reduce greenhouse gases by multiples of ourown emissions on an annual basis. A third-party-validatedlie cycle assessment ound the use o insulation products suchas STYROFOAM Brand Insulation avoids emissions thatare six times greater than our Companys annual emissions.

Smart Solutions or Toda

Dows clean and sustainable innovations such as the worldsirst halogen-ree solution or lexible cords and unctionalpaint technologies that reduce ormaldehyde levels in the air are expected to create $20 b illion in market opportunities.

Michigans first affordable net-zero energy home uses readilyavailable energy-eiciency technologies rom Dow. The houseis expected to save $3,500 in energy costs and avert 45,000pounds o CO2 annually.

We successfully completed a two-year, multimillion-dollarproject to transorm our energy-saving STYROFOAM BrandInsulation to a more sustainable manuacturing technologyin North America, eliminating the use o ozone-depletingsubstances, and cutting in hal the greenhouse gas emissionsrom its production at converted acilities.

Partners or Change

We partnered with leading organizations such as Change the

Equation and the International Year o Chemistry to advancescience, technology, engineering and math education.

We were named a lead industrial partner to the U.S./ChinaCleaner Energy Resource Center or Building Energy Eiciency,which will conduct research to save energy and cut costsin buildings.

Our capital investments in WaterHealth International impactthe lives o two million people in India. Plus, in responseto the Haiti earthquake, we donated Dow Water & ProcessSolutions equipment and raw materials to severalnon-governmental organizations.

Dow AgroSciences is collaborating with Donald DanforthPlant Science Center to study how our EXZACT PrecisionTechnology can help improve the nu tritional value and virusresistance o the root crop cassava or millions o peopleliving in developing nations, particularly in Arica.

Through the Dow Sustainability Corps, we put the talents ofour employees to work, addressing sustainable developmentchallenges across the world. Our employees conducted sevenprojects across the globe, teaming with Central AmericaMedical Outreach, Pure Water or the World and The NatureConservancy, among others.

In partnership with Habitat for Humanity International, Dow

sponsored 19 builds, including projects in India and Egypt, toprovide sae, aordable and energy-eicient housing to amiliesacross the world. We also participated in the 19th Jimmy CarterWork Project, which built 80 homes in our U.S. cities.

2010 Recognitions

Awarded an unprecedented seventh U.S. Presidential GreenChemistry Challenge Award or our hydrogen peroxide topropylene oxide (HPPO) technology, jointly developed with BA

Named a 2010 Leader of Change by the Foundation for SocialChange (FSC) and the United Nations Oice or Partnerships

Awarded first-ever Employee Volunteers in Action Awardrom Keep America Beautiul or Dows engagement at49 sites with more than 600 employees

Named a finalist for the U.S. Chamber of Commerces 2010Corporate Citizenship Award or International CommunityService. Recognized or our commitment to provide sae,aordable, energy-eicient housing to amilies worldwidethrough our partnership with Habitat or Humanity

Achieved A+ rating for Global Reporting Initiative reportor the third consecutive year

Named for the 10th time to the Dow Jones SustainabilityWorld Index

Added to NASDAQ OMX CRD Global Sustainability 50 Index

STRATEGy-IN-ACTION

First-o-Kind Collaboration to DemonstrateBusiness Opportunities in Protecting Nature

Dow and The Nature Conservancy are embarking on agroundbreaking collaboration to help companies integratethe value o nature into top-line strategies and goals.

Announced in January 2011, the collaboration will usescientiic models, maps and analyses to measure the beneitsthat nature provides or people such as clean air, water andood and then apply them to help guide Dows businessdecisions. Dow will use the inormation, or example, to makeinormed decisions regarding land and water management,site selection and development, and natural resourcemanagement on Dow lands and waterways. Dow and its

philanthropic arm, The Dow Chemical Foundation, havecommitted $10 million to the ive-year project.

A major objective o the project is to share all tools andresults publicly and through peer review, so that othercompanies, scientists and interested parties can test andapply the learnings.



15/17


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2015 Sustainabilit Goal Updates

Dows 2015 Sustainability Goals address a broad spectrum o commitments to ourstakeholders our customers, employees, global communities, stockholders andthe environment. We take our commitments seriously and report quarterly on ourprogress. A summary o our 2010 progress is below. More detailed goal descriptionsand complete reports can be viewed at ww w.dow.com/commitments.

Local Protection o Human Health and the Enironment

GOAL:Achieve, on average, a 75 percent improvement in key indicators orEnvironment, Health & Saety operating excellence rom the 2005 baseline

Product Saet Leadership

GOAL: Publish Product Saety Assessmentsor all products

Dow is committed to making Product Saety Assessments(PSAs) publicly accessible or all o our products. At the endo 2010, Dow had posted 330 PSAs to the Product Saety

page on www.dow.com.

In 2010, the Injury and Illness rate was.32 per 200,000 hours o work. Althoughthis perormance does not meet ourexpectations when compared with our2009 perormance, it represents a morethan 35 percent improvement over 2005perormance levels.

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GOAL:Reduce our energy intensity 25 percent

Through 2010, savings due to improved energyintensity perormance exceeded $9 billion on aless than $2 billion investment.

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Energy Efficiency Cumulative Savings

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$9.4 billion saved since 1994

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Our 2010 Energy Intensity goal was 5,397 Btu/lb, or 87.5percent o the value in 2005. Our actual perormance was6,028 Btu/lb, which is 98 percent o the 2005 baseline.

Sustainable Chemistr

GOAL:Double the percentage o sales to 10 percent or productsthat are highly advantaged by sustainable chemistry

The percentage o sales rom products with highly advantagedsustainable chemistry perormance increased rom 1.7 percentin 2008 to 3.4 percent in 2009.


At the end o 2010, 355 Loss o PrimaryContainment (LOPC) incidents occurred,translating into an annual rate that isan improvement rom 2009. This is morethan a 70 percent improvement over our2005 baseline perormance levels.

At the end o 2010, we recorded45 Process Saety Incidents. This ismore than a 40 percent improvementover 2005.

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Addressing Climate Change

GOAL:Reduce our greenhouse gas intensity 2.5 percent per year

We estimate our absolute greenhouse gas (GHG) emissions in2010 were 43.0 million metric tons, essentially lat with 2009perormance. Our intent is to continue to grow the Companywhile maintaining or reducing GHGs relative to recent history.

PSAs now cover products thatrepresent 69% o Company sales.

Energy Intensity improved 22% in the irst 10-year goal.

Contributing to Communit Success

GOAL:Achieve community acceptance ratings o 100 percenat Dow sites where we have a major presence

Dow is committed to improving the quality o lie in thecommunities in which it operates throughout the world.Through inancial contributions and the volunteer eortso our employees, Dow supports progra

Stockholder Summary 2010

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