Description
Hello, Looking for assistance to help on Financial Statement Analysis. The instructions are all below.
I have all of the attachments required for the assignment that I am attaching. All of the writing requirements, pages and APA format are listed below as well. The analysis is on two companies and the spreadsheet has both financial statements and there are individual 10K statements for each.
Financial Statement Analysis
Overview
A financial analysis is a written document that combines analytical narrative with the supporting financial metrics in order to communicate the results of the analyst’s examination of the financial information.
In the Resources for this assignment, you will find links to the 10-K forms for The Dow Chemical Company and E.I. Du Pont De Nemours and Company, available in both HTML and PDF formats. (Note that the HTML and PDF versions of the documents are identical; you can choose which format you prefer.) You can glean a great deal of information about each company from its respective 10-K report. You will also find the Dow and DuPont Financial Statements Excel file, which contains the Balance Sheets, Income Statements, and Statements of Cash Flows for both companies. Each statement contains three years of financial information including the dollar figures and, in the balance sheet and income statement, common-sized percentages. Use these documents to complete your assignment.
Instructions
Prepare a financial analysis (a narrative that includes the supporting calculations) to compare and contrast the two companies with respect to the following:
1.Liquidity – Working Capital, Current Ratio, Quick Ratio, Operating Cash Flow to Current Liabilities, Days Receivables Outstanding, Days Inventory Held, Accounts Payable Turnover, Days Accounts Payable Outstanding, Revenues to Cash, Days Revenues in Cash, and other metrics that may be helpful.
2.Solvency – Liabilities to Assets Ratio, Liabilities to Shareholders’ Equity Ratio, Long-Term Debt to Shareholders’ Equity Ratio, Interest Coverage Ratio, Operating Cash Flow to Total Liabilities Ratio, and other metrics that may be helpful.
3.Profitability – Return on Assets, Profit Margin Percentage, Total Asset Turnover, Return on Common Equity, Capital Structure Leverage, Gross Margin Percentage, Operating Margin Percentage, Accounts Receivable Turnover, Inventory Turnover, Fixed Asset Turnover, and other metrics that may be helpful.
4.Horizontal and Vertical Common-Sized Percentages – Use common-sized percentages from the income statements to perform both vertical and horizontal analysis of the companies’ performance.
5.DuPont Analysis – Prepare a DuPont analysis for each company.
As you complete your assignment, be sure it meets the following guidelines. Read the Financial Statement Analysis Scoring Guide for specific information about how your assignment will be evaluated.
Written communication: Written communication is free of errors that detract from the overall message.
APA formatting: All resources and citations should be formatted according to current APA style and formatting guidelines.
Length: 5–10 pages.
Font and font size: Times New Roman, 12 point.
10-K 1 dow201410k.htm 10-K
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended DECEMBER
31, 2014
or
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________to__________
Commission file number: 1-3433
THE DOW CHEMICAL COMPANY
(Exact name of registrant as specified in its charter)
Delaware
38-1285128
State or other jurisdiction of
incorporation or organization
(I.R.S. Employer Identification No.)
2030 DOW CENTER, MIDLAND, MICHIGAN 48674
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: 989-636-1000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Name of each exchange on which registered
Common Stock, par value $2.50 per share
New York Stock Exchange
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
þ Yes
¨ No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
¨ Yes þ No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
þ Yes ¨ No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File
required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for
such shorter period that the registrant was required to submit and post such files).
þ Yes ¨ No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained
herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference
in Part III of this Form 10-K or any amendment to this Form 10-K.
¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer þ Accelerated filer ¨
Non-accelerated filer ¨
Smaller reporting company ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ¨ Yes
þ No
The aggregate market value of voting common stock held by non-affiliates as of June 30, 2014 (based upon the closing price of $51.46 per
common share as quoted on the New York Stock Exchange), was approximately $61.4 billion. For purposes of this computation, it is assumed that
the shares of voting stock held by Directors and Officers would be deemed to be stock held by affiliates. Non-affiliated common stock outstanding
at June 30, 2014 was 1,194,093,171 shares.
Total common stock outstanding at January 31, 2015 was 1,157,695,055 shares.
DOCUMENTS INCORPORATED BY REFERENCE
Part III: Proxy Statement for the Annual Meeting of Stockholders to be held on May 14, 2015.
Table of Contents
The Dow Chemical Company
ANNUAL REPORT ON FORM 10-K
For the fiscal year ended December 31, 2014
TABLE OF CONTENTS
PAGE
PART I
Item 1.
Business.
4
Item 1A.
Risk Factors.
19
Item 1B.
Unresolved Staff Comments.
23
Item 2.
Properties.
24
Item 3.
Legal Proceedings.
25
Item 4.
Mine Safety Disclosures.
27
Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities.
28
Item 6.
Selected Financial Data.
29
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of
Operations.
30
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk.
66
Item 8.
Financial Statements and Supplementary Data.
67
Item 9.
Changes in and Disagreements With Accountants on Accounting and Financial
Disclosure.
135
Item 9A.
Controls and Procedures.
136
Item 9B.
Other Information.
139
Item 10.
Directors, Executive Officers and Corporate Governance.
140
Item 11.
Executive Compensation.
140
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related
140
PART II
PART III
Stockholder Matters.
Item 13.
Certain Relationships and Related Transactions, and Director Independence.
140
Item 14.
Principal Accounting Fees and Services.
140
Exhibits, Financial Statement Schedules.
141
PART IV
Item 15.
SIGNATURES
143
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Table of Contents
The Dow Chemical Company and Subsidiaries
FORWARD-LOOKING STATEMENTS
Certain statements in this report, other than purely historical information, including estimates, projections, statements relating to
business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forwardlooking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of
1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements may appear throughout this report
including, without limitation, the following sections: “Item 1. Business,” “Management’s Discussion and Analysis,” and “Risk
Factors.” These forward-looking statements are generally identified by the words “anticipate,” “believe,” “estimate,” “expect,”
“future,” “intend,” “may,” “opportunity,” “outlook,” “plan,” “project,” “should,” “strategy,” “will,” “would,” “will be,” “will
continue,” “will likely result” and similar expressions. Forward-looking statements are based on current expectations and assumptions
that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. A
detailed discussion of principal risks and uncertainties which may cause actual results and events to differ materially from such
forward-looking statements is included in the section titled “Risk Factors” (Part I, Item 1A of this Form 10-K). The Dow Chemical
Company undertakes no obligation to update or revise publicly any forward-looking statements whether because of new information,
future events, or otherwise, except as required by securities and other applicable laws.
3
Table of Contents
The Dow Chemical Company and Subsidiaries
PART I, Item 1. Business.
THE COMPANY
The Dow Chemical Company was incorporated in 1947 under Delaware law and is the successor to a Michigan corporation, of the
same name, organized in 1897. The Company’s principal executive offices are located at 2030 Dow Center, Midland, Michigan 48674.
Throughout this Annual Report on Form 10-K, except as otherwise indicated by the context, the terms “Company” or “Dow” as used
herein mean The Dow Chemical Company and its consolidated subsidiaries.
Available Information
The Company’s annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, and amendments to
those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, are available free of charge
through the Investor Relations section of the Company’s website (www.dow.com/investors), as soon as reasonably practicable after the
reports are electronically filed or furnished with the U.S. Securities and Exchange Commission (“SEC”). The SEC maintains a website
that contains these reports as well as proxy statements and other information regarding issuers that file electronically. The SEC’s
website is at www.sec.gov. The Company’s website and its content are not deemed incorporated by reference into this report.
General
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.
Strategy
Dow’s strategy is to invest in a market-driven portfolio of advantaged and technology-enabled businesses that create value for our
shareholders and customers.
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BUSINESS SEGMENTS AND PRODUCTS
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. The segment has broad global reach with sales in
135 countries and research and development (“R&D”) and manufacturing facilities located in all geographic areas. Growth is achieved
through the development of innovative new products and technologies, successful segmentation of market offerings with leading
brands, diverse channels to market, competitive cost positions, strategic bolt-on acquisitions, and commercial and R&D collaborations.
The Company is committed to the development of innovative new crop protection and biological products and technologies.
Details on Agricultural Sciences’ 2014 sales, by business and geographic area, are as follows:
Products
Key product lines, including crop application, are listed below:
Crop Application
Key Product Lines Canola
Insecticides
x
Fungicides
Cereals Corn
x
x
Cotton
Range
and
Pasture
x
x
Herbicides
x
x
x
x
x
Seeds
x
x
x
x
x
Other
x
Trees, Fruits
Rice Soybeans Sunflower and Vegetables Others
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
The Company’s ability to produce seeds can be materially impacted by weather conditions, local political conditions and the
availability of reliable contract growers.
5
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Table of Contents
Agricultural Sciences is focused on delivering results through technology leadership. Major brands and technologies, by key product
line, are listed below:
Key Product Lines
Brands and Technologies
Insecticides
ISOCLAST™; LORSBAN™; RADIANT™; SENTRICON™; TELONE™; TRACER™
Fungicides
DITHANE™
Herbicides
BROADWAY™; CLINCHER™; DURANGO™; FENCER™; GARLON™; LONTREL™;
MILESTONE™; PANZER™; PRIMUS™; SPIDER™; STARANE™; SURESTART™; TORDON™
Seeds
AGROMEN™(1); BRODBECK™; DAIRYLAND SEED™; Grand Valley Hybrids; HYLAND™;
MYCOGEN™; NEXERA™; Omega-9 Healthier Oils; PFISTER™; PHYTOGEN™; POWERCORE™
Insect Trait Technology(2); PRAIRIE BRAND SEEDS™; REFUGE ADVANCED® powered by
SmartStax®(2); SmartStax® Insect Trait Technology(2); TRIUMPH™
Other
HARVISTA™ Technology; N-SERVE™ Nitrogen Stabilizer; RIPELOCK™ Quality Systems
(1) AGROMEN trademark used under license from Agromen Sementes Agricolas Ltda.
(2) Smartstax® and POWERCORE™ multi-event technology developed by Dow AgroSciences LLC and Monsanto. Smartstax®, the
Smartstax® logo, POWERCORE™ and the POWERCORE™ logo are trademarks of Monsanto Technology, LLC.
U.S. federal regulatory approvals have been obtained for the commercialization of ENLIST™ Corn and Soybeans including the U.S.
Environmental Protection Agency’s registration of ENLIST DUO™, the companion herbicide for use with ENLIST™ Corn and
Soybeans, in six key states. Regulatory approvals in certain other countries are still pending.
Patents, Trademarks and Licenses
Agricultural Sciences has significant technology-driven growth, led by plant biotechnology traits and crop protection products that
utilize proprietary formulations. As a result, the Company uses patents, trademarks, licenses and registrations to protect its investment
in germplasm, traits and proprietary chemistries and formulations. The Company also licenses plant biotechnology traits from third
parties and engages in research collaborations with global industry, academia and governments. The Company does not regard the
Agricultural Sciences segment as being materially dependent on any single or group of related patents, trademarks, licenses or
registrations.
Competition
Agricultural Sciences competes with producers of crop protection chemicals and agricultural biotechnology in the United States and
abroad. The Company competes on the basis of technology and trait leadership, price, quality and cost competitiveness. Key
competitors include BASF, Bayer, E. I. DuPont de Nemours, Monsanto and Syngenta, as well as generic and regional seed companies.
Distribution
Agricultural Sciences has a diverse worldwide network which markets and distributes the Company’s brands to customers globally.
This network consists of the Company’s sales and marketing organization partnering with distributors, independent retailers and
growers, cooperatives and agents throughout the world.
Seasonality
Agricultural Sciences sales and EBITDA are strongest in the first half of the year, aligning with the planting and growing season in the
northern hemisphere, where approximately 60 percent of the segment’s annual sales are generated. Inventory tends to be at peak levels
in the first quarter, in advance of the northern hemisphere planting and growing season. Accounts receivable tends to be highest at the
end of the second quarter, consistent with the peak sales period in the northern hemisphere.
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
segment’s commitment to continuous innovation and rapid new product development enables it to maximize opportunities in emerging
geographies and high-growth industries.
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Details on Consumer Solutions’ 2014 sales, by business and geographic area, are as follows:
Consumer Care
The Consumer Care portfolio of businesses delivers technologies for the consumer at the intersection of physics, biology and
chemistry, connecting the businesses to the human element. Developing performance-enhancing solutions that enable customers to
differentiate their products in the global pharmaceutical, food, home and personal care markets, Consumer Care provides the expertise
that makes end-use products better so consumers feel better.
Consumer Care’s principal businesses each serve one or more key market segments, as noted below:
Business
Market Segments
Technologies
Dow Home, Institutional &
Personal Care Solutions
Personal care, home care and specialty
applications with key focus on hair care,
skin care, sun care, cleansing, oral care, as
well as, fabric, dish, floor and hard surface
applications
From polymers and emollients to chelants and
dispersants, Dow offers the key enabling
technologies that differentiate customers’ products
while maintaining a strong commitment to offering
more sustainable options. Other notable
technologies include opacifiers, rheology
modifiers, surfactants and solvents
Dow Pharma and Food
Solutions
Pharmaceutical, food and nutrition
Cellulosic and other technologies used to help
bring new classes of pharmaceutical solutions to
the market and enable healthier foods (gluten-free,
reduced oil/fat content). Other notable technologies
include solubility enhancers, reagents, granulation
and binders, as well as coatings and controlled
release
SAFECHEM
A service business responsible for the
Offers cleaning solutions, equipment and services
sustainable and innovative use of solvents for metal and dry cleaning applications. Provides
close-loop SAFE-TAINER™ System delivery
systems to ensure emission free use of cleaning
agents
Dow Automotive Systems
Dow Automotive Systems is a leading global provider of collaborative solutions and advanced materials for original equipment
manufacturers, tier suppliers, aftermarket customers and commercial transportation manufacturers. Dow Automotive Systems’ leading
technologies, materials engineering, testing and service support are complemented by a robust line of structural, elastic and rubber-tosubstrate adhesives; composite materials technologies; polyurethane foams and acoustical management systems; and films and fluids.
7
Table of Contents
Dow Automotive Systems’ principal businesses offer the following technologies and serve the following market segments:
Business
Market Segments
Technologies
Adhesives
Elastic, structural and specialty adhesives Innovative and differentiated adhesive technologies
to enhance vehicle durability and
to meet customer specifications for durability and
performance
crash performance
Performance Solutions
Performance plastics, fluids and
polyurethane foam solutions for comfort
and acoustic management
Technologies that differentiate customers’ products
with improved performance characteristics
Dow Electronic Materials
Dow Electronic Materials is a leading global supplier of enabling materials for a broad range of consumer electronics including
smartphones, tablets, television monitors and personal computers, as well as electronic devices and systems used in a variety of
industries. The business produces materials for chemical mechanical planarization (“CMP”); materials used in the production of
electronic displays, including films, filters and organic light-emitting diodes (“OLEDs”); metalorganic precursors for light-emitting
diodes (“LEDs”); products and technologies that drive leading-edge semiconductor design; materials used in the fabrication of printed
circuit boards; and integrated metallization processes for metal finishing and decorative applications.
Dow Electronic Materials is comprised of four principal businesses, each serving one or more key market segments, as noted below:
Business
Market Segments
Technologies
Semiconductor Technologies
Integrated circuit fabrication for memory
and logic
CMP consumables, photolithography materials
Interconnect Technologies
Printed circuit board, electronic and
industrial finishing
Interconnect metallization and imaging process
chemistries
Display Technologies
Display materials
Display films and filters, OLED materials
Growth Technologies
New and emerging technologies
Advanced chip packaging materials, metalorganic
precursors, optical and ceramic materials
Competition
The Consumer Solutions segment experiences competition in each business within the segment. The competitors include many large,
multinational chemical firms as well as a number of regional and local competitors. The segment’s products have unique performance
characteristics that are required by customers who demand a high-level of customer service and technical expertise from the
Company’s sales force and scientists; therefore, Dow is well positioned to withstand competitive threats. Key competitors include
Ashland, BASF, Bayer, JSR Micro and Shin-Etsu Chemical.
Joint Ventures
The Consumer Solutions segment 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.
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Table of Contents
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. With unmatched R&D capabilities, a broad range of chemistries, extensive geographic reach
and strong channels to market, this segment is well positioned to capitalize on market trends. The segment has broad geographic reach
with sales in 145 countries and R&D and manufacturing facilities located in key geographic areas.
Details on Infrastructure Solutions’ 2014 sales, by business and geographic area, are as follows:
Dow Building & Construction
Dow Building & Construction is comprised of two businesses – Dow Building Solutions and Dow Construction Chemicals.
Leveraging more than 60 years of building science experience and deep application expertise, Dow creates high-performance solutions
designed to help make residential and commercial buildings more comfortable, last longer, save energy and reduce emissions. The
business group offers extensive lines of industry-leading durable insulation solutions and functional ingredients that provide improved
thermal performance, air sealing, weatherization and fire retardancy for construction products.
Dow Coating Materials
The Dow Coating Materials business manufactures and delivers solutions that leverage high quality, technologically advanced product
offerings for architectural paint and coatings, as well as industrial coatings applications, including paper, leather, concrete, wood,
automotive, maintenance and protective industries. Dow Coating Materials introduced the industry’s first waterborne technology in
1953 and has since led the industry’s conversion away from solvent borne technology to allow for lower volatile organic compounds
and an improved sustainability profile while pushing performance boundaries.
Energy & Water Solutions
Energy & Water Solutions is comprised of four businesses – Dow Microbial Control; Dow Oil, Gas & Mining; Dow Solar; and Dow
Water and Process Solutions. Dow Microbial Control provides technology used to predict, diagnose and sustainably solve the planet’s
most difficult microbial challenges while Dow Oil, Gas & Mining is helping to provide energy to the world by supplying smart,
innovative and customized solutions to enable the tapping of both conventional and unconventional sources. Providing buildingintegrated photovoltaics, Dow Solar enables energy solutions in the infrastructure market sector. Also aligned to the infrastructure
market sector is Dow Water and Process Solutions, a leading provider of purification and separation technologies including reverse
osmosis membranes and ion exchange resins to help customers with a broad array of separation and purification needs such as reusing
waste water streams, making fresh drinking water from sea water, creating a closed loop water system for oil field operations, and
removing impurities in dairy processing.
Performance Monomers
The Performance Monomers business produces specialty monomer products that are sold externally as well as consumed internally as
building blocks used in downstream polymer businesses. The business’ products are used in several applications, including cleaning
materials, personal care products, paints, coatings and inks.
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Table of Contents
Products
Infrastructure Solutions’ businesses each serve one or more key market segments, as noted below:
Business
Applications/Market Segments
Major Products
Dow Building &
Construction
Rigid and spray foam insulation; weatherization and
air sealing; caulks and sealants; elastomeric roof
coatings; exterior insulation finishing systems; roof
tiles and siding; industrial non-wovens; cement-based
tile adhesives; plasters and renders; tape joint
compounds; and concrete additives
AQUASET™ acrylic thermosetting resins,
DOW™ latex powders, FROTH-PAK™ foam
insulation and sealants, GREAT STUFF™
insulating foam sealants and adhesives,
RHOPLEX™ and PRIMAL™ acrylic polymer
emulsions, STYROFOAM™ brand insulation
products, WALOCEL™ cellulose ethers,
XENERGY™ high performance insulation,
LIQUID ARMOR™ flashing and sealant
Dow Coating
Materials
Acrylic binders; architectural paint and coatings;
dispersants; rheology modifiers; surfactants for both
architectural and industrial applications
ACRYSOL™ Rheology Modifiers, AVANSE™
acrylic binders, EVOQUE™ Pre-Composite
Polymer, FORMASHIELD™ acrylic binder,
RHOPLEX™ acrylic resin, TAMOL™ Dispersants
Energy & Water
Solutions
Helping customers in exploration, production,
transmission, refining and gas processing to optimize
supply, improve efficiencies and manage emissions.
Providing expertise and localized solutions for
microbial control for well souring, industrial cooling
water, fabric odor elimination, in-can preservation and
dry film protection. Providing advanced, cost
effective separation and purification technology for
water treatment and filtration, pharmaceutical, food
and beverage, and chemical processing
Demulsifiers, drilling and completion fluids, heat
transfer fluids, perchloroethylene, rheology
modifiers, scale inhibitors, shale inhibitors,
specialty amine solvents, surfactants, water
clarifiers, DOW ADSORBSIA™ selective media,
DOW EDI™ modules, DOWEX™ and
AMBERJET™ ion exchange resins, DOWEX™
OPTIPORE™ polymeric adsorbent resins, DOW
FILMTEC™ reverse osmosis and nanofiltration
elements, TEQUATIC™ PLUS fine particle filter,
AMBERLYST™ polymeric catalysts,
AQUCAR™, BIOBAN™, SILVADUR™
antimicrobial, DOW POWERHOUSE™ Solar
Shingles
Performance
Monomers
Super absorbents, water treatment, flocculants and
detergents, acrylic sheets, coatings, inks and
paints, molding compounds, impact modifiers,
processing aids, electronic displays, adhesives,
textiles, automotive and architectural safety glass
Acrylates, methacrylates, vinyl acetate monomers,
acrolein derivatives, high-quality impact modifiers,
processing aids, foam cell promoters and
weatherable acrylic capstock compounds
for thermoplastic and thermosetting materials
Competition
Competitors of the Infrastructure Solutions segment include many large multinational chemical firms as well as a number of regional
and local competitors. The segment’s products have unique performance characteristics that are required by customers who demand a
high level of customer service and expertise from our sales force and scientists; therefore, Dow is well positioned to withstand
competitive threats. Key competitors include Arkema, Ashland, BASF, Elementis, Hydranautics, Lanxess, Lonza, Owens-Corning and
Shin-Etsu Chemical.
Joint Ventures
The Infrastructure Solutions segment 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. The Performance Materials & Chemicals segment is positioned for
growth through diverse markets and product offerings. The segment has broad geographic reach with sales in nearly 150 countries and
manufacturing facilities located in all geographic areas. Performance Materials & Chemicals has a diverse product line that serves
customers in a large number of industries including appliance, construction and industrial.
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Table of Contents
Details on Performance Materials & Chemicals’ 2014 sales, by business and geographic area, are as follows:
Chlor-Alkali and Vinyl
The Chlor-Alkali and Vinyl business provides cost-advantaged chlorine and caustic soda supply and integration for Dow’s
performance businesses, including Chlorinated Organics, Crop Protection, Epoxy and Polyurethanes. Approximately 90 percent of the
chlorine produced internally by Dow is consumed within the Performance Materials & Chemicals segment. Chlor-Alkali and Vinyl
also includes the marketing of caustic soda, a valuable co-product of the chlor-alkali manufacturing process, and ethylene dichloride
and vinyl chloride monomer, essential for the production of polyvinyl chloride.
Chlorinated Organics
The Chlorinated Organics business is a recognized leader in supplying chlorinated organic products and solutions for safe and
sustainable uses, such as intermediates or feedstocks to produce electronics, agricultural products and fluoropolymers and non-ozone
depleting refrigerants.
Epoxy
The Epoxy business is a global supplier of epoxy resins, curing agents, intermediates and systems which serve a diverse array of
industries and market sectors, including electrical laminates, civil engineering, composites, industrial coatings, infrastructure and
consumer goods.
Industrial Solutions
The Industrial Solutions business enables manufacturing of the world’s goods and services with additive solutions that minimize
friction and heat in mechanical processes, manage the oil and water interface, deliver active ingredients for maximum effectiveness,
facilitate dissolvability and provide the foundational building blocks for the development of chemical technologies. The business
supports industrial manufacturers associated with virtually all end-markets, notably electronics, agricultural chemicals, engine/heavy
equipment, coatings, adhesives and inks, and detergents and cleaners. Industrial Solutions is also the world’s largest producer of
purified ethylene oxide. Approximately 80 percent of the ethylene oxide produced by Dow is consumed within the Performance
Materials & Chemicals segment.
Polyurethanes
Polyurethanes is comprised of four businesses: Isocyanates, Polyols, Polyurethane Systems and Propylene Oxide/Propylene Glycol
(“PO/PG”). The Polyurethanes business is the world’s largest producer of propylene oxide and propylene glycol as well a leading
producer of polyether polyols and aromatic isocyanates that serve energy efficiency, consumer comfort and industrial market sectors.
Propylene oxide is produced using the chlorohydrins process as well as by hydrogen peroxide to propylene oxide manufacturing
technology(1). Performance Materials & Chemicals businesses consume approximately 90 percent of the propylene oxide produced or
procured by Dow.
Competition
Competition for the Performance Materials & Chemicals segment varies based on the business. Key competitors include large,
international chemical companies as well as chemical divisions of major national and international oil companies. Performance
Materials & Chemicals back-integration into feedstocks supports a low-cost manufacturing base and consistent, reliable product
supply. Dow is a full-service supplier with a global technical service network located close to the customer, which allows the Company
to fuel growth in specialty applications and collaborate with customers to invent unique chemistries and tailored solutions. In addition
to its competitive cost position, reliable supply and superior customer service, the Company also
(1) Hydrogen peroxide to propylene oxide manufacturing technology is utilized by MTP HPPO Manufacturing Company Limited, a Thailandbased consolidated variable interest entity ultimately owned 50 percent by the Company and 50 percent by SCG Chemicals Co. Ltd.; and
BASF DOW HPPO Production B.V.B.A., a Belgium-based joint venture ultimately owned 100 percent by HPPO Holding & Finance C.V.,
which is owned 50 percent by the Company and 50 percent by BASF.
11
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competes worldwide on the basis of quality, technology and price. Key competitors include Axiall, BASF, Bayer, Hexion, Huntsman
and Olin.
Distribution
The Performance Materials & Chemicals segment markets it
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended DECEMBER
31, 2014
or
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________to__________
Commission file number: 1-3433
THE DOW CHEMICAL COMPANY
(Exact name of registrant as specified in its charter)
Delaware
38-1285128
State or other jurisdiction of
incorporation or organization
(I.R.S. Employer Identification No.)
2030 DOW CENTER, MIDLAND, MICHIGAN 48674
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: 989-636-1000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Name of each exchange on which registered
Common Stock, par value $2.50 per share
New York Stock Exchange
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
þ Yes
¨ No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
¨ Yes þ No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
þ Yes ¨ No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File
required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for
such shorter period that the registrant was required to submit and post such files).
þ Yes ¨ No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained
herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference
in Part III of this Form 10-K or any amendment to this Form 10-K.
¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer þ Accelerated filer ¨
Non-accelerated filer ¨
Smaller reporting company ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ¨ Yes
þ No
The aggregate market value of voting common stock held by non-affiliates as of June 30, 2014 (based upon the closing price of $51.46 per
common share as quoted on the New York Stock Exchange), was approximately $61.4 billion. For purposes of this computation, it is assumed that
the shares of voting stock held by Directors and Officers would be deemed to be stock held by affiliates. Non-affiliated common stock outstanding
at June 30, 2014 was 1,194,093,171 shares.
Total common stock outstanding at January 31, 2015 was 1,157,695,055 shares.
DOCUMENTS INCORPORATED BY REFERENCE
Part III: Proxy Statement for the Annual Meeting of Stockholders to be held on May 14, 2015.
Table of Contents
The Dow Chemical Company
ANNUAL REPORT ON FORM 10-K
For the fiscal year ended December 31, 2014
TABLE OF CONTENTS
PAGE
PART I
Item 1.
Business.
4
Item 1A.
Risk Factors.
19
Item 1B.
Unresolved Staff Comments.
23
Item 2.
Properties.
24
Item 3.
Legal Proceedings.
25
Item 4.
Mine Safety Disclosures.
27
Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities.
28
Item 6.
Selected Financial Data.
29
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of
Operations.
30
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk.
66
Item 8.
Financial Statements and Supplementary Data.
67
Item 9.
Changes in and Disagreements With Accountants on Accounting and Financial
Disclosure.
135
Item 9A.
Controls and Procedures.
136
Item 9B.
Other Information.
139
Item 10.
Directors, Executive Officers and Corporate Governance.
140
Item 11.
Executive Compensation.
140
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related
140
PART II
PART III
Stockholder Matters.
Item 13.
Certain Relationships and Related Transactions, and Director Independence.
140
Item 14.
Principal Accounting Fees and Services.
140
Exhibits, Financial Statement Schedules.
141
PART IV
Item 15.
SIGNATURES
143
2
Table of Contents
The Dow Chemical Company and Subsidiaries
FORWARD-LOOKING STATEMENTS
Certain statements in this report, other than purely historical information, including estimates, projections, statements relating to
business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forwardlooking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of
1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements may appear throughout this report
including, without limitation, the following sections: “Item 1. Business,” “Management’s Discussion and Analysis,” and “Risk
Factors.” These forward-looking statements are generally identified by the words “anticipate,” “believe,” “estimate,” “expect,”
“future,” “intend,” “may,” “opportunity,” “outlook,” “plan,” “project,” “should,” “strategy,” “will,” “would,” “will be,” “will
continue,” “will likely result” and similar expressions. Forward-looking statements are based on current expectations and assumptions
that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. A
detailed discussion of principal risks and uncertainties which may cause actual results and events to differ materially from such
forward-looking statements is included in the section titled “Risk Factors” (Part I, Item 1A of this Form 10-K). The Dow Chemical
Company undertakes no obligation to update or revise publicly any forward-looking statements whether because of new information,
future events, or otherwise, except as required by securities and other applicable laws.
3
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The Dow Chemical Company and Subsidiaries
PART I, Item 1. Business.
THE COMPANY
The Dow Chemical Company was incorporated in 1947 under Delaware law and is the successor to a Michigan corporation, of the
same name, organized in 1897. The Company’s principal executive offices are located at 2030 Dow Center, Midland, Michigan 48674.
Throughout this Annual Report on Form 10-K, except as otherwise indicated by the context, the terms “Company” or “Dow” as used
herein mean The Dow Chemical Company and its consolidated subsidiaries.
Available Information
The Company’s annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, and amendments to
those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, are available free of charge
through the Investor Relations section of the Company’s website (www.dow.com/investors), as soon as reasonably practicable after the
reports are electronically filed or furnished with the U.S. Securities and Exchange Commission (“SEC”). The SEC maintains a website
that contains these reports as well as proxy statements and other information regarding issuers that file electronically. The SEC’s
website is at www.sec.gov. The Company’s website and its content are not deemed incorporated by reference into this report.
General
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.
Strategy
Dow’s strategy is to invest in a market-driven portfolio of advantaged and technology-enabled businesses that create value for our
shareholders and customers.
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BUSINESS SEGMENTS AND PRODUCTS
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. The segment has broad global reach with sales in
135 countries and research and development (“R&D”) and manufacturing facilities located in all geographic areas. Growth is achieved
through the development of innovative new products and technologies, successful segmentation of market offerings with leading
brands, diverse channels to market, competitive cost positions, strategic bolt-on acquisitions, and commercial and R&D collaborations.
The Company is committed to the development of innovative new crop protection and biological products and technologies.
Details on Agricultural Sciences’ 2014 sales, by business and geographic area, are as follows:
Products
Key product lines, including crop application, are listed below:
Crop Application
Key Product Lines Canola
Insecticides
x
Fungicides
Cereals Corn
x
x
Cotton
Range
and
Pasture
x
x
Herbicides
x
x
x
x
x
Seeds
x
x
x
x
x
Other
x
Trees, Fruits
Rice Soybeans Sunflower and Vegetables Others
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
The Company’s ability to produce seeds can be materially impacted by weather conditions, local political conditions and the
availability of reliable contract growers.
5
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Agricultural Sciences is focused on delivering results through technology leadership. Major brands and technologies, by key product
line, are listed below:
Key Product Lines
Brands and Technologies
Insecticides
ISOCLAST™; LORSBAN™; RADIANT™; SENTRICON™; TELONE™; TRACER™
Fungicides
DITHANE™
Herbicides
BROADWAY™; CLINCHER™; DURANGO™; FENCER™; GARLON™; LONTREL™;
MILESTONE™; PANZER™; PRIMUS™; SPIDER™; STARANE™; SURESTART™; TORDON™
Seeds
AGROMEN™(1); BRODBECK™; DAIRYLAND SEED™; Grand Valley Hybrids; HYLAND™;
MYCOGEN™; NEXERA™; Omega-9 Healthier Oils; PFISTER™; PHYTOGEN™; POWERCORE™
Insect Trait Technology(2); PRAIRIE BRAND SEEDS™; REFUGE ADVANCED® powered by
SmartStax®(2); SmartStax® Insect Trait Technology(2); TRIUMPH™
Other
HARVISTA™ Technology; N-SERVE™ Nitrogen Stabilizer; RIPELOCK™ Quality Systems
(1) AGROMEN trademark used under license from Agromen Sementes Agricolas Ltda.
(2) Smartstax® and POWERCORE™ multi-event technology developed by Dow AgroSciences LLC and Monsanto. Smartstax®, the
Smartstax® logo, POWERCORE™ and the POWERCORE™ logo are trademarks of Monsanto Technology, LLC.
U.S. federal regulatory approvals have been obtained for the commercialization of ENLIST™ Corn and Soybeans including the U.S.
Environmental Protection Agency’s registration of ENLIST DUO™, the companion herbicide for use with ENLIST™ Corn and
Soybeans, in six key states. Regulatory approvals in certain other countries are still pending.
Patents, Trademarks and Licenses
Agricultural Sciences has significant technology-driven growth, led by plant biotechnology traits and crop protection products that
utilize proprietary formulations. As a result, the Company uses patents, trademarks, licenses and registrations to protect its investment
in germplasm, traits and proprietary chemistries and formulations. The Company also licenses plant biotechnology traits from third
parties and engages in research collaborations with global industry, academia and governments. The Company does not regard the
Agricultural Sciences segment as being materially dependent on any single or group of related patents, trademarks, licenses or
registrations.
Competition
Agricultural Sciences competes with producers of crop protection chemicals and agricultural biotechnology in the United States and
abroad. The Company competes on the basis of technology and trait leadership, price, quality and cost competitiveness. Key
competitors include BASF, Bayer, E. I. DuPont de Nemours, Monsanto and Syngenta, as well as generic and regional seed companies.
Distribution
Agricultural Sciences has a diverse worldwide network which markets and distributes the Company’s brands to customers globally.
This network consists of the Company’s sales and marketing organization partnering with distributors, independent retailers and
growers, cooperatives and agents throughout the world.
Seasonality
Agricultural Sciences sales and EBITDA are strongest in the first half of the year, aligning with the planting and growing season in the
northern hemisphere, where approximately 60 percent of the segment’s annual sales are generated. Inventory tends to be at peak levels
in the first quarter, in advance of the northern hemisphere planting and growing season. Accounts receivable tends to be highest at the
end of the second quarter, consistent with the peak sales period in the northern hemisphere.
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
segment’s commitment to continuous innovation and rapid new product development enables it to maximize opportunities in emerging
geographies and high-growth industries.
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Details on Consumer Solutions’ 2014 sales, by business and geographic area, are as follows:
Consumer Care
The Consumer Care portfolio of businesses delivers technologies for the consumer at the intersection of physics, biology and
chemistry, connecting the businesses to the human element. Developing performance-enhancing solutions that enable customers to
differentiate their products in the global pharmaceutical, food, home and personal care markets, Consumer Care provides the expertise
that makes end-use products better so consumers feel better.
Consumer Care’s principal businesses each serve one or more key market segments, as noted below:
Business
Market Segments
Technologies
Dow Home, Institutional &
Personal Care Solutions
Personal care, home care and specialty
applications with key focus on hair care,
skin care, sun care, cleansing, oral care, as
well as, fabric, dish, floor and hard surface
applications
From polymers and emollients to chelants and
dispersants, Dow offers the key enabling
technologies that differentiate customers’ products
while maintaining a strong commitment to offering
more sustainable options. Other notable
technologies include opacifiers, rheology
modifiers, surfactants and solvents
Dow Pharma and Food
Solutions
Pharmaceutical, food and nutrition
Cellulosic and other technologies used to help
bring new classes of pharmaceutical solutions to
the market and enable healthier foods (gluten-free,
reduced oil/fat content). Other notable technologies
include solubility enhancers, reagents, granulation
and binders, as well as coatings and controlled
release
SAFECHEM
A service business responsible for the
Offers cleaning solutions, equipment and services
sustainable and innovative use of solvents for metal and dry cleaning applications. Provides
close-loop SAFE-TAINER™ System delivery
systems to ensure emission free use of cleaning
agents
Dow Automotive Systems
Dow Automotive Systems is a leading global provider of collaborative solutions and advanced materials for original equipment
manufacturers, tier suppliers, aftermarket customers and commercial transportation manufacturers. Dow Automotive Systems’ leading
technologies, materials engineering, testing and service support are complemented by a robust line of structural, elastic and rubber-tosubstrate adhesives; composite materials technologies; polyurethane foams and acoustical management systems; and films and fluids.
7
Table of Contents
Dow Automotive Systems’ principal businesses offer the following technologies and serve the following market segments:
Business
Market Segments
Technologies
Adhesives
Elastic, structural and specialty adhesives Innovative and differentiated adhesive technologies
to enhance vehicle durability and
to meet customer specifications for durability and
performance
crash performance
Performance Solutions
Performance plastics, fluids and
polyurethane foam solutions for comfort
and acoustic management
Technologies that differentiate customers’ products
with improved performance characteristics
Dow Electronic Materials
Dow Electronic Materials is a leading global supplier of enabling materials for a broad range of consumer electronics including
smartphones, tablets, television monitors and personal computers, as well as electronic devices and systems used in a variety of
industries. The business produces materials for chemical mechanical planarization (“CMP”); materials used in the production of
electronic displays, including films, filters and organic light-emitting diodes (“OLEDs”); metalorganic precursors for light-emitting
diodes (“LEDs”); products and technologies that drive leading-edge semiconductor design; materials used in the fabrication of printed
circuit boards; and integrated metallization processes for metal finishing and decorative applications.
Dow Electronic Materials is comprised of four principal businesses, each serving one or more key market segments, as noted below:
Business
Market Segments
Technologies
Semiconductor Technologies
Integrated circuit fabrication for memory
and logic
CMP consumables, photolithography materials
Interconnect Technologies
Printed circuit board, electronic and
industrial finishing
Interconnect metallization and imaging process
chemistries
Display Technologies
Display materials
Display films and filters, OLED materials
Growth Technologies
New and emerging technologies
Advanced chip packaging materials, metalorganic
precursors, optical and ceramic materials
Competition
The Consumer Solutions segment experiences competition in each business within the segment. The competitors include many large,
multinational chemical firms as well as a number of regional and local competitors. The segment’s products have unique performance
characteristics that are required by customers who demand a high-level of customer service and technical expertise from the
Company’s sales force and scientists; therefore, Dow is well positioned to withstand competitive threats. Key competitors include
Ashland, BASF, Bayer, JSR Micro and Shin-Etsu Chemical.
Joint Ventures
The Consumer Solutions segment 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.
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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. With unmatched R&D capabilities, a broad range of chemistries, extensive geographic reach
and strong channels to market, this segment is well positioned to capitalize on market trends. The segment has broad geographic reach
with sales in 145 countries and R&D and manufacturing facilities located in key geographic areas.
Details on Infrastructure Solutions’ 2014 sales, by business and geographic area, are as follows:
Dow Building & Construction
Dow Building & Construction is comprised of two businesses – Dow Building Solutions and Dow Construction Chemicals.
Leveraging more than 60 years of building science experience and deep application expertise, Dow creates high-performance solutions
designed to help make residential and commercial buildings more comfortable, last longer, save energy and reduce emissions. The
business group offers extensive lines of industry-leading durable insulation solutions and functional ingredients that provide improved
thermal performance, air sealing, weatherization and fire retardancy for construction products.
Dow Coating Materials
The Dow Coating Materials business manufactures and delivers solutions that leverage high quality, technologically advanced product
offerings for architectural paint and coatings, as well as industrial coatings applications, including paper, leather, concrete, wood,
automotive, maintenance and protective industries. Dow Coating Materials introduced the industry’s first waterborne technology in
1953 and has since led the industry’s conversion away from solvent borne technology to allow for lower volatile organic compounds
and an improved sustainability profile while pushing performance boundaries.
Energy & Water Solutions
Energy & Water Solutions is comprised of four businesses – Dow Microbial Control; Dow Oil, Gas & Mining; Dow Solar; and Dow
Water and Process Solutions. Dow Microbial Control provides technology used to predict, diagnose and sustainably solve the planet’s
most difficult microbial challenges while Dow Oil, Gas & Mining is helping to provide energy to the world by supplying smart,
innovative and customized solutions to enable the tapping of both conventional and unconventional sources. Providing buildingintegrated photovoltaics, Dow Solar enables energy solutions in the infrastructure market sector. Also aligned to the infrastructure
market sector is Dow Water and Process Solutions, a leading provider of purification and separation technologies including reverse
osmosis membranes and ion exchange resins to help customers with a broad array of separation and purification needs such as reusing
waste water streams, making fresh drinking water from sea water, creating a closed loop water system for oil field operations, and
removing impurities in dairy processing.
Performance Monomers
The Performance Monomers business produces specialty monomer products that are sold externally as well as consumed internally as
building blocks used in downstream polymer businesses. The business’ products are used in several applications, including cleaning
materials, personal care products, paints, coatings and inks.
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Products
Infrastructure Solutions’ businesses each serve one or more key market segments, as noted below:
Business
Applications/Market Segments
Major Products
Dow Building &
Construction
Rigid and spray foam insulation; weatherization and
air sealing; caulks and sealants; elastomeric roof
coatings; exterior insulation finishing systems; roof
tiles and siding; industrial non-wovens; cement-based
tile adhesives; plasters and renders; tape joint
compounds; and concrete additives
AQUASET™ acrylic thermosetting resins,
DOW™ latex powders, FROTH-PAK™ foam
insulation and sealants, GREAT STUFF™
insulating foam sealants and adhesives,
RHOPLEX™ and PRIMAL™ acrylic polymer
emulsions, STYROFOAM™ brand insulation
products, WALOCEL™ cellulose ethers,
XENERGY™ high performance insulation,
LIQUID ARMOR™ flashing and sealant
Dow Coating
Materials
Acrylic binders; architectural paint and coatings;
dispersants; rheology modifiers; surfactants for both
architectural and industrial applications
ACRYSOL™ Rheology Modifiers, AVANSE™
acrylic binders, EVOQUE™ Pre-Composite
Polymer, FORMASHIELD™ acrylic binder,
RHOPLEX™ acrylic resin, TAMOL™ Dispersants
Energy & Water
Solutions
Helping customers in exploration, production,
transmission, refining and gas processing to optimize
supply, improve efficiencies and manage emissions.
Providing expertise and localized solutions for
microbial control for well souring, industrial cooling
water, fabric odor elimination, in-can preservation and
dry film protection. Providing advanced, cost
effective separation and purification technology for
water treatment and filtration, pharmaceutical, food
and beverage, and chemical processing
Demulsifiers, drilling and completion fluids, heat
transfer fluids, perchloroethylene, rheology
modifiers, scale inhibitors, shale inhibitors,
specialty amine solvents, surfactants, water
clarifiers, DOW ADSORBSIA™ selective media,
DOW EDI™ modules, DOWEX™ and
AMBERJET™ ion exchange resins, DOWEX™
OPTIPORE™ polymeric adsorbent resins, DOW
FILMTEC™ reverse osmosis and nanofiltration
elements, TEQUATIC™ PLUS fine particle filter,
AMBERLYST™ polymeric catalysts,
AQUCAR™, BIOBAN™, SILVADUR™
antimicrobial, DOW POWERHOUSE™ Solar
Shingles
Performance
Monomers
Super absorbents, water treatment, flocculants and
detergents, acrylic sheets, coatings, inks and
paints, molding compounds, impact modifiers,
processing aids, electronic displays, adhesives,
textiles, automotive and architectural safety glass
Acrylates, methacrylates, vinyl acetate monomers,
acrolein derivatives, high-quality impact modifiers,
processing aids, foam cell promoters and
weatherable acrylic capstock compounds
for thermoplastic and thermosetting materials
Competition
Competitors of the Infrastructure Solutions segment include many large multinational chemical firms as well as a number of regional
and local competitors. The segment’s products have unique performance characteristics that are required by customers who demand a
high level of customer service and expertise from our sales force and scientists; therefore, Dow is well positioned to withstand
competitive threats. Key competitors include Arkema, Ashland, BASF, Elementis, Hydranautics, Lanxess, Lonza, Owens-Corning and
Shin-Etsu Chemical.
Joint Ventures
The Infrastructure Solutions segment 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. The Performance Materials & Chemicals segment is positioned for
growth through diverse markets and product offerings. The segment has broad geographic reach with sales in nearly 150 countries and
manufacturing facilities located in all geographic areas. Performance Materials & Chemicals has a diverse product line that serves
customers in a large number of industries including appliance, construction and industrial.
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Table of Contents
Details on Performance Materials & Chemicals’ 2014 sales, by business and geographic area, are as follows:
Chlor-Alkali and Vinyl
The Chlor-Alkali and Vinyl business provides cost-advantaged chlorine and caustic soda supply and integration for Dow’s
performance businesses, including Chlorinated Organics, Crop Protection, Epoxy and Polyurethanes. Approximately 90 percent of the
chlorine produced internally by Dow is consumed within the Performance Materials & Chemicals segment. Chlor-Alkali and Vinyl
also includes the marketing of caustic soda, a valuable co-product of the chlor-alkali manufacturing process, and ethylene dichloride
and vinyl chloride monomer, essential for the production of polyvinyl chloride.
Chlorinated Organics
The Chlorinated Organics business is a recognized leader in supplying chlorinated organic products and solutions for safe and
sustainable uses, such as intermediates or feedstocks to produce electronics, agricultural products and fluoropolymers and non-ozone
depleting refrigerants.
Epoxy
The Epoxy business is a global supplier of epoxy resins, curing agents, intermediates and systems which serve a diverse array of
industries and market sectors, including electrical laminates, civil engineering, composites, industrial coatings, infrastructure and
consumer goods.
Industrial Solutions
The Industrial Solutions business enables manufacturing of the world’s goods and services with additive solutions that minimize
friction and heat in mechanical processes, manage the oil and water interface, deliver active ingredients for maximum effectiveness,
facilitate dissolvability and provide the foundational building blocks for the development of chemical technologies. The business
supports industrial manufacturers associated with virtually all end-markets, notably electronics, agricultural chemicals, engine/heavy
equipment, coatings, adhesives and inks, and detergents and cleaners. Industrial Solutions is also the world’s largest producer of
purified ethylene oxide. Approximately 80 percent of the ethylene oxide produced by Dow is consumed within the Performance
Materials & Chemicals segment.
Polyurethanes
Polyurethanes is comprised of four businesses: Isocyanates, Polyols, Polyurethane Systems and Propylene Oxide/Propylene Glycol
(“PO/PG”). The Polyurethanes business is the world’s largest producer of propylene oxide and propylene glycol as well a leading
producer of polyether polyols and aromatic isocyanates that serve energy efficiency, consumer comfort and industrial market sectors.
Propylene oxide is produced using the chlorohydrins process as well as by hydrogen peroxide to propylene oxide manufacturing
technology(1). Performance Materials & Chemicals businesses consume approximately 90 percent of the propylene oxide produced or
procured by Dow.
Competition
Competition for the Performance Materials & Chemicals segment varies based on the business. Key competitors include large,
international chemical companies as well as chemical divisions of major national and international oil companies. Performance
Materials & Chemicals back-integration into feedstocks supports a low-cost manufacturing base and consistent, reliable product
supply. Dow is a full-service supplier with a global technical service network located close to the customer, which allows the Company
to fuel growth in specialty applications and collaborate with customers to invent unique chemistries and tailored solutions. In addition
to its competitive cost position, reliable supply and superior customer service, the Company also
(1) Hydrogen peroxide to propylene oxide manufacturing technology is utilized by MTP HPPO Manufacturing Company Limited, a Thailandbased consolidated variable interest entity ultimately owned 50 percent by the Company and 50 percent by SCG Chemicals Co. Ltd.; and
BASF DOW HPPO Production B.V.B.A., a Belgium-based joint venture ultimately owned 100 percent by HPPO Holding & Finance C.V.,
which is owned 50 percent by the Company and 50 percent by BASF.
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competes worldwide on the basis of quality, technology and price. Key competitors include Axiall, BASF, Bayer, Hexion, Huntsman
and Olin.
Distribution
The Performance Materials & Chemicals segment markets it
Categories: