OPERATING SEGMENTS AND GEOGRAPHIC AREAS

9 Months Ended

Sep. 30, 2013

Segment Reporting [Abstract]

OPERATING SEGMENTS AND GEOGRAPHIC AREAS

OPERATING SEGMENTS AND GEOGRAPHIC AREAS

During the first quarter of 2013, the Company's Performance Plastics segment combined Dow Performance Packaging, Dow Hygiene and Medical, and Dow Polypropylene Licensing and Catalyst businesses into a newly created Dow Packaging and Specialty Plastics business to better align with the markets and customers served. The Performance Plastics businesses, which are reflected in the following updated profile for the segment, are as follows:

• Dow Elastomers

• Dow Electrical and Telecommunications

• Dow Packaging and Specialty Plastics

There were no other changes to Part I, Item I. Business included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.

Performance Plastics

The Performance Plastics segment consists of the solution-oriented portfolio of Dow Elastomers, Dow Electrical and Telecommunications, and Dow Packaging and Specialty Plastics. These businesses serve high-growth, high value sectors where Dow's world-class technology and rich innovation pipeline creates competitive advantages for customers and the entire value chain. Dow Elastomers is a leading global producer of polyolefin elastomers and the largest metallocene ethylene propylene diene monomer ("EPDM") producer providing a cost-advantaged position. Dow Electrical and Telecommunications is a pioneer in the production of polymers for wire and cable applications. Dow Packaging and Specialty Plastics is a leading materials supplier of polyethylene based resins, films and specialty polymers for strategic segments within its five global target market sectors - performance packaging, hygiene and medical, adhesives and functional materials, industrial specialties and photovoltaic films.  

These businesses also have complementary market reach, asset capabilities and technology platforms that provide the Company with immediate and long-term growth synergies. The segment has broad geographic reach with sales in more than 100 countries and manufacturing facilities located in all geographic areas. Market growth is expected to be driven by major shifts in population demographics, improving socioeconomic status in emerging geographies, consumer and brand owner demand for increased consumer convenience, efforts to reduce food waste, growth in telecommunications networks, specifically broadband and LTE networks, and global development of electrical transmission and distribution infrastructure and renewable energy applications.

Details on Performance Plastics' 2012 sales, by business and geographic area, are as follows:

Products

Major products by business and applications/market segments are listed below:

Business	Major Products	Applications/Market Segments
Dow Elastomers	Elastomers, plastomers, EPDMs	Adhesives, footwear, housewares, infrastructure, sports recreation, toys and infant products, transportation
Dow Electrical and Telecommunications	Wire and cable insulation, semiconductive and jacketing compound solutions, bio-based plasticizers	Building and construction, electrical transmission and distribution infrastructure, telecommunications infrastructure
Dow Packaging and Specialty Plastics	Polyethylene, low-density polyethylene, linear low-density polethylene, high-density polyethylene, polyolefin emulsions, polyolefin plastomers, acrylics	Adhesives; flexible packaging for food and beverages; rigid packaging for food, household goods and industrial products; medical end-use; personal care products; sealants; unitization films; and water, natural gas and irrigation pipe

Transfers of products between operating segments are generally valued at cost. However, transfers of products to Agricultural Sciences from other segments are generally valued at market-based prices; the revenues generated by these transfers in the first nine months of 2013 and 2012 were immaterial and eliminated in consolidation.

Operating Segments	Three Months Ended						Nine Months Ended
In millions	Sep 30, 2013			Sep 30, 2012			Sep 30, 2013			Sep 30, 2012
Sales by operating segment
Electronic and Functional Materials	$	1,168		$	1,111		$	3,461		$	3,383
Coatings and Infrastructure Solutions	1,839			1,730			5,394			5,321
Agricultural Sciences	1,410			1,302			5,363			4,816
Performance Materials	3,307			3,411			10,024			10,253
Performance Plastics	3,616			3,500			10,790			10,802
Feedstocks and Energy	2,328			2,521			7,427			8,113
Corporate	66			62			235			181
Total	$	13,734		$	13,637		$	42,694		$	42,869
EBITDA (1) by operating segment
Electronic and Functional Materials	$	287		$	273		$	814		$	803
Coatings and Infrastructure Solutions	283			246			719			787
Agricultural Sciences	18			63			792			821
Performance Materials	314			491			1,038			1,173
Performance Plastics	970			737			2,932			2,215
Feedstocks and Energy	187			200			620			532
Corporate	(225		)	(212		)	1,305			(865		)
Total	$	1,834		$	1,798		$	8,220		$	5,466
Equity in earnings (losses) of nonconsolidated affiliates by operating segment (included in EBITDA)
Electronic and Functional Materials	$	36		$	27		$	81		$	81
Coatings and Infrastructure Solutions	32			29			83			96
Agricultural Sciences	3			3			6			3
Performance Materials	(11		)	(30		)	(46		)	(67		)
Performance Plastics	134			28			279			101
Feedstocks and Energy	135			123			399			300
Corporate	(7		)	(5		)	(22		)	(22		)
Total	$	322		$	175		$	780		$	492

(1) The Company uses EBITDA (which Dow defines as earnings (i.e., "Net Income") before interest, income taxes, depreciation and amortization) as its measure of profit/loss for segment reporting purposes. EBITDA by operating segment includes all operating items relating to the businesses, except depreciation and amortization; items that principally apply to the Company as a whole are assigned to Corporate. A reconciliation of EBITDA to "Income Before Income Taxes" is provided below.

Reconciliation of EBITDA to “Income Before Income Taxes”	Three Months Ended				Nine Months Ended
In millions	Sep 30, 2013		Sep 30, 2012		Sep 30, 2013		Sep 30, 2012
EBITDA	$	1,834	$	1,798	$	8,220	$	5,466
- Depreciation and amortization	665		665		1,992		2,018
+ Interest income	11		10		29		26
- Interest expense and amortization of debt discount	264		318		839		959
Income Before Income Taxes	$	916	$	825	$	5,418	$	2,515

Geographic Areas	Three Months Ended				Nine Months Ended
In millions	Sep 30, 2013		Sep 30, 2012		Sep 30, 2013		Sep 30, 2012
Sales by geographic area
United States	$	4,471	$	4,394	$	14,089	$	14,029
Europe, Middle East and Africa	4,308		4,446		13,794		14,680
Rest of World	4,955		4,797		14,811		14,160
Total	$	13,734	$	13,637	$	42,694	$	42,869