OPERATING SEGMENTS AND GEOGRAPHIC AREAS

Beginning in the fourth quarter of 2014, the Company changed its reportable segments as a result of changes in the Company's organization, including executive leadership appointments. The new operating segments reflect the Company’s strategy to be low-cost and fully integrated in key value chains while adding value through technology and end-market orientation. The new operating segments also reflect either integrated value chain alignment, such as acrylic, chlorine, ethylene and propylene within a segment, or the segment’s innovation-driven market focus.

Following are the new segments:


•	Agricultural Sciences


•	Consumer Solutions


•	Infrastructure Solutions


•	Performance Materials & Chemicals


•	Performance Plastics

The Company also changed the assignment of certain expenses previously aligned with the Corporate segment to better reflect operating segment results and profitability. All leveraged functional costs (i.e., information systems, finance, human resources, legal, supply chain, etc.) are now fully allocated to the segments. In addition, long-term performance-based compensation expense, including the Employee Stock Purchase Plan, stock options, deferred stock and performance deferred stock, are now allocated to the segments based primarily on employee alignment.

The reporting changes are retrospectively reflected in segment results for all periods presented.

Dow is a diversified, worldwide manufacturer and supplier of products used primarily as raw materials in the manufacture of customer products and services. The Company serves the following industries: appliance; automotive; agricultural; building and construction; chemical processing; electronics; furniture; housewares; oil and gas; packaging; paints, coatings and adhesives; personal care; pharmaceutical; processed foods; pulp and paper; textile and carpet; utilities; and water treatment.

Dow conducts its worldwide operations through global businesses, which are reported in five operating segments. Corporate contains the reconciliation between the totals for the reportable segments and the Company’s totals and includes research and other expenses related to new business development activities, and other corporate items not allocated to the reportable operating segments.

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; items that principally apply to the Company as a whole are assigned to Corporate. See table toward the end of this footnote for depreciation and amortization by segment, as well as a reconciliation of EBITDA to “Income Before Income Taxes.”

Corporate Profile

Dow combines the power of science and technology to passionately innovate what is essential to human progress. The Company is driving innovations that extract value from the intersection of chemical, physical and biological sciences to help address many of the world's most challenging problems such as the need for clean water, clean energy generation and conservation, and increasing agricultural productivity. Dow's integrated, market-driven, industry-leading portfolio of specialty chemical, advanced materials, agrosciences and plastics businesses delivers a broad range of technology-based products and solutions to customers in approximately 180 countries and in high growth sectors such as packaging, electronics, water, coatings and agricultural. In 2014, Dow had annual sales of more than $58 billion and employed approximately 53,000 people worldwide. The Company's more than 6,000 products are manufactured at 201 sites in 35 countries across the globe. The Company conducts its worldwide operations through global businesses, which are reported in five operating segments: Agricultural Sciences, Consumer Solutions, Infrastructure Solutions, Performance Materials & Chemicals and Performance Plastics.

Agricultural Sciences

The Agricultural Sciences segment is a global leader in providing crop protection and seed/plant biotechnology products and technologies, urban pest management solutions and healthy oils. The business invents, develops, manufactures and markets products for use in agricultural, industrial and commercial pest management, and food service. Agricultural Sciences consists of two businesses - Crop Protection and Seeds.

Consumer Solutions

The Consumer Solutions segment consists of three global businesses: Consumer Care, Dow Automotive Systems and Dow Electronic Materials. These global businesses develop and market customized materials using advanced technology and unique chemistries for specialty applications - including semiconductors and organic light-emitting diodes, adhesives and foams used by the transportation industry, and cellulosics for innovative pharmaceutical formulations and food solutions. These businesses serve the needs of market segments as diverse as: automotive; electronics and entertainment; healthcare and medical; and, personal and home care goods. The Consumer Solutions segment also includes a portion of the Company's share of the results of Dow Corning Corporation, a joint venture that manufactures silicone and silicone products, which is owned 50 percent by the Company.

Infrastructure Solutions

The Infrastructure Solutions segment is comprised of an industry-leading portfolio of businesses utilizing advanced technology to deliver products such as architectural and industrial coating applications, building insulation, adhesives, microbial protection for the oil and gas industry, and water technologies. Infrastructure Solutions consists of four global businesses: Dow Building & Construction, Dow Coating Materials, Energy & Water Solutions and Performance Monomers. The Infrastructure Solutions segment also includes a portion of the Company's share of the results of Dow Corning Corporation, a joint venture that manufactures silicone and silicone products, which is owned 50 percent by the Company.

Performance Materials & Chemicals

The Performance Materials & Chemicals segment is comprised of five technology-driven, customer-centric global businesses that are advantaged through integration and driven by innovative technology and solutions: Chlor-Alkali and Vinyl, Chlorinated Organics, Epoxy, Industrial Solutions and Polyurethanes. Products produced by this segment are back-integrated into feedstocks, supporting a low-cost manufacturing base and consistent, reliable supply. Performance Materials & Chemicals has a diverse product line that serves customers in a large number of industries including appliance, construction and industrial. The Performance Materials & Chemicals segment also includes the results of MEGlobal and a portion of the results of EQUATE Petrochemicals Company K.S.C., The Kuwait Olefins Company K.S.C., Map Ta Phut Olefins Company Limited, and Sadara Chemical Company, all joint ventures of the Company.

Performance Plastics

The Performance Plastics segment is the world’s leading plastics franchise, and is a market-oriented portfolio composed of five global businesses: Dow Elastomers, Dow Electrical and Telecommunications, Dow Packaging and Specialty Plastics, Energy and Hydrocarbons. The segment is advantaged through its low cost position into key feedstocks and benefits from Dow’s R&D expertise to deliver leading-edge technology that provides a competitive benefit to customers in key strategic markets. The Performance Plastics segment also includes the results of Univation Technologies, LLC, The Kuwait Styrene Company K.S.C. and The SCG-Dow Group as well as a portion of the results of EQUATE Petrochemicals Company K.S.C., The Kuwait Olefins Company K.S.C., Map Ta Phut Olefins Limited and the Sadara Chemical Company, all joint ventures of the Company.

Divestiture:

On December 2, 2013, the Company sold its Polypropylene Licensing and Catalysts business to W. R. Grace & Co. This business was reported in the Performance Plastics segment through the date of divestiture. See Note 5 for additional information on this divestiture.

Corporate

Corporate includes certain enterprise and governance activities (including insurance operations, geographic management, risk management such as foreign currency hedging activities, audit fees, donations, Company branding initiatives, etc.); the results of Ventures (including business incubation platforms, non-business aligned joint ventures, and venture capital); environmental operations; gains and losses on the sales of financial assets; severance costs; non-business aligned litigation expenses (including asbestos-related defense costs and reserve adjustments); and, foreign exchange results.

The Company operates 201 manufacturing sites in 35 countries. The United States is home to 73 of these sites, representing 59 percent of the Company’s long-lived assets. Sales are attributed to geographic areas based on customer location; long-lived assets are attributed to geographic areas based on asset location.



Geographic Area Information (1)	United States		Europe, Middle East, Africa and India		Rest of World		Total
In millions	United States		Europe, Middle East, Africa and India		Rest of World		Total
2014
Sales to external customers	$	19,449	$	19,671	$	19,047	$	58,167
Long-lived assets	$	10,605	$	2,628	$	4,818	$	18,051
2013
Sales to external customers	$	18,712	$	19,208	$	19,160	$	57,080
Long-lived assets	$	9,320	$	3,256	$	4,878	$	17,454
2012
Sales to external customers	$	18,391	$	20,038	$	18,357	$	56,786
Long-lived assets	$	8,953	$	3,426	$	5,141	$	17,520


(1)	The Indian subcontinent, previously reported with Rest of World, is now aligned with Europe, Middle East, Africa and India; prior period sales and long-lived assets have been adjusted to reflect this realignment.



Operating Segment Information	Agri-cultural Sciences		Consumer Solutions		Infra-stucture Solutions			Perf Materials & Chemicals			Perf Plastics			Corp			Total
In millions	Agri-cultural Sciences		Consumer Solutions		Infra-stucture Solutions			Perf Materials & Chemicals			Perf Plastics			Corp			Total
2014
Sales to external customers	$	7,290	$	4,639	$	8,429		$	15,114		$	22,386		$	309		$	58,167
Intersegment revenues (1)	—		—		—			100			—			(100		)	—
Equity in earnings (losses) of nonconsolidated affiliates	4		281		(6		)	322			257			(23		)	835
Goodwill and other intangible asset impairment losses (2)	—		50		—			—			—			—			50
Restructuring charges (credits) (3)	—		—		—			(3		)	—			—			(3		)
Asbestos-related charge (4)	—		—		—			—			—			78			78
EBITDA (5)	962		1,130		817			2,193			4,422			(580		)	8,944
Total assets	7,292		9,629		12,245			12,179			13,459			13,992			68,796
Investment in nonconsolidated affiliates	83		691		922			698			705			1,102			4,201
Depreciation and amortization	208		396		510			780			759			94			2,747
Capital expenditures	383		114		269			315			2,490			1			3,572
2013
Sales to external customers	$	7,137	$	4,562	$	8,339		$	14,824		$	21,910		$	308		$	57,080
Intersegment revenues (1)	—		—		—			137			—			(137		)	—
Equity in earnings (losses) of nonconsolidated affiliates	5		107		126			480			355			(39		)	1,034
Restructuring charges (credits) (3)	—		—		(1		)	(15		)	(6		)	—			(22		)
EBITDA (5)	894		933		941			1,913			4,503			1,361			10,545
Total assets	7,059		10,171		12,844			12,085			13,788			13,554			69,501
Investment in nonconsolidated affiliates	88		541		1,178			827			772			1,095			4,501
Depreciation and amortization	189		414		528			743			707			100			2,681
Capital expenditures	319		105		198			409			1,271			—			2,302
2012
Sales to external customers	$	6,382	$	4,518	$	8,071		$	14,981		$	22,588		$	246		$	56,786
Intersegment revenues (1)	—		—		—			150			—			(150		)	—
Equity in earnings (losses) of nonconsolidated affiliates	1		87		58			362			130			(102		)	536
Goodwill and other intangibles impairment losses (2)	—		—		—			220			—			—			220
Restructuring charges (credits) (3)	—		136		61			299			33			814			1,343
EBITDA (5)	923		773		963			1,603			2,924			(1,595		)	5,591
Total assets	6,368		10,597		13,104			13,164			13,560			12,812			69,605
Investment in nonconsolidated affiliates	86		422		1,081			790			744			998			4,121
Depreciation and amortization	176		416		542			783			672			109			2,698
Capital expenditures	321		244		292			759			951			47			2,614


(1)	Includes revenues generated by transfers of product to Agricultural Sciences from other segments, generally at market-based prices. Other transfers of products between operating segments are generally valued at cost.


(2)	See Note 11 for information regarding intangible asset impairment losses and Note 9 for information regarding the goodwill impairment loss.


(3)	See Note 3 for information regarding restructuring charges and credits.


(4)	See Note 14 for information regarding the asbestos-related charge.


(5)	A reconciliation of EBITDA to “Income Before Income Taxes” is provided below.



Reconciliation of EBITDA to “Income Before Income Taxes” In millions	2014		2013		2012
EBITDA	$	8,944	$	10,545	$	5,591
- Depreciation and amortization	2,747		2,681		2,698
+ Interest income	51		41		41
- Interest expense and amortization of debt discount	983		1,101		1,269
Income Before Income Taxes	$	5,265	$	6,804	$	1,665