. Dow reported earnings per share of $0.63
Excluding certain items(1) and discontinued operations, the Company earned $0.24 per share, driven by sequential price increases, volume growth in Electronic and Specialty Materials and Coatings and Infrastructure (Advanced Materials), Performance Products and Performance Systems, as well as the Company’s actions to reduce cost and capture acquisition-related synergies.

. Sales versus the prior quarter increased 6 percent due to price, more than offsetting a greater than $600 million increase in purchased feedstock and energy costs. Excluding Dow AgroSciences, which is a seasonal business, volume increased more than 3 percent versus the prior quarter. Sales declined 32 percent versus pro forma(2) sales for the same period last year, with a 23 percent decrease in price and a 9 percent decline in volume.

. Structural cost reductions are ahead of Company goals, with cost savings of more than $380 million in the quarter and more than $1 billion year-to-date. The Company has already achieved more than 110 percent of the 12-month cost synergy run-rate goal for the integration of Rohm and Haas, which began just six months ago.

. Equity earnings were $224 million in the quarter, up $102 million, or 84 percent, over the prior quarter, driven primarily by improvements in Dow Corning and EQUATE.
. The divestitures of ownership stakes in Total Raffinaderij Nederland N.V. (TRN) and the OPTIMAL Group of Companies were completed in the quarter, enabling the Company to pay down the bridge loan related to the acquisition of Rohm and Haas.
Comment
Andrew N. Liveris, Dow’s chairman and chief executive officer, stated:

“Dow once again delivered stronger sequential earnings due to our focus on aggressive price/volume management, accelerating cost reductions, especially with the Rohm and Haas integration, plus benefiting from our global presence with volume gains in emerging geographies. In addition, we are seeing pockets of volume growth in certain businesses versus the prior quarter, primarily in Advanced Materials, Performance Products and Performance Systems, which have benefited from the beginnings of a global economic recovery. Consistent with our focus on execution, immediately following the close of the quarter we also accomplished a key objective by completing the sale of Morton Salt and fully paying off our bridge loan related to the Rohm and Haas acquisition well ahead of schedule, improving the Company's financial flexibility and further deleveraging our balance sheet.”

(1) See Supplemental Information at the end of the release for a description of these items.
(2) The pro forma historical information reflects the combination of Dow and Rohm and Haas assuming the acquisition had been consummated on January 1, 2008, the treatment of Dow’s Calcium Chloride business as discontinued operations, and the impact of acquisition financing in place as of September 30, 2009.
®™ Trademark of The Dow Chemical Company or an affiliated company of Dow.

Review of Third Quarter Results
Dow reported sales of $12.0 billion for the third quarter of 2009, down 22 percent from reported sales in the same period last year, and 32 percent lower than the pro forma sales for the same period last year. Sales improved 6 percent from the prior quarter.

Net income from continuing operations for the quarter was $799 million. This compares with net income from continuing operations of $440 million in the third quarter of 2008.

Earnings for the current quarter were $0.63 per share versus earnings of $0.46 per share in the third quarter of 2008 and a loss of $0.47 per share in the second quarter of 2009.

Excluding certain items, which increased earnings per share $0.40, and a loss of $0.01 from discontinued operations, the Company earned $0.24 per share in the quarter. This compares with earnings of $0.59 per share in the third quarter of 2008 and $0.05 per share in the second quarter of this year (excluding certain items and discontinued operations in the comparison periods). Certain items in the current quarter included gains from the divestitures of ownership stakes in Total Raffinaderij Nederland N.V. (TRN) and the OPTIMAL Group of Companies of $0.46 per share; transaction, integration and other acquisition costs of $0.03 per share; and a loss on the early extinguishment of debt of $0.03 per share.

Company results also benefited from a lower tax rate in the quarter primarily due to a significant improvement in equity earnings versus the prior quarter.

At a Company level, volume was down 9 percent versus pro forma sales in the year-ago period. Versus the prior quarter, however, volume was unchanged, as the economic recession bottomed and selected bright spots emerged. Excluding Dow AgroSciences, which is a seasonal business, volume increased more than 3 percent versus the prior quarter. Volume was up sequentially in the Advanced Materials and Performance segments, except Health and Agricultural Sciences, where volume declined 32 percent due to seasonality and adverse weather conditions.

Price was down 23 percent versus pro forma sales in the same period last year, but increased 6 percent sequentially, with increases in all geographic areas. At a segment level, Hydrocarbons and Energy and Basic Plastics reported the largest increases, with price up 29 percent and 13 percent, respectively, versus the prior quarter.

Purchased feedstock and energy costs increased $618 million sequentially, yet were down 46 percent, or $3.5 billion, versus the same period last year.

The Company’s global operating rate improved sequentially by 3 percentage points to 78 percent, driven by volume growth in key operating segments in rapidly developing economies such as China, Brazil and IMEA and favorable feedstock and energy costs in North America relative to other geographies which, coupled with Dow’s feedstock flexibility, enabled increased exports.

Structural cost reductions are ahead of Company goals, with savings of more than $380 million in the quarter and more than $1 billion year-to-date. The Company has already achieved more than 110 percent of the 12-month cost synergy run-rate goal for the integration of Rohm and Haas, which began just six months ago.

Selling, General and Administrative (SG&A) expenses decreased $102 million from pro forma SG&A expenses in the third quarter of last year.

Equity earnings were $224 million in the quarter, up $102 million, or 84 percent, over the prior quarter, driven primarily by improvements in Dow Corning and EQUATE.

At a Company level, EBITDA excluding certain items was flat versus the prior quarter, despite seasonal declines in Health and Agricultural Sciences, which were fully offset by improved performance in Electronic and Specialty Materials and Basic Plastics.

“Dow once again delivered stronger sequential earnings due to our focus on aggressive price/volume management, accelerating cost reductions, especially with the Rohm and Haas integration, plus benefiting from our global presence with volume gains in emerging geographies,” said Andrew N. Liveris, Dow chairman and chief executive officer. “In addition, we are seeing pockets of volume growth in certain businesses versus the prior quarter, primarily in Advanced Materials, Performance Products and Performance Systems, which have benefited from the beginnings of a global economic recovery. Consistent with our focus on execution, immediately following the close of the quarter we also accomplished a key objective by completing the sale of Morton Salt and fully paying off our bridge loan related to the Rohm and Haas acquisition well ahead of schedule, improving the Company's financial flexibility and further deleveraging our balance sheet.”

Note: Due to rapidly changing business conditions, the Company has included comparisons to the prior quarter in addition to comparisons to the same period last year in the following operating segment summaries. Comparisons to the same period last year are made on a pro forma basis.

Electronic and Specialty Materials
Sales in the Electronic and Specialty Materials segment were $1.3 billion, down 15 percent from the same period last year. Volume decreased 9 percent and price declined 6 percent. Demand for electronics has improved sharply since the first quarter of the year, but has not yet returned to pre-recession levels. Semiconductor foundry utilization rates were high throughout the quarter, reflecting the rebuilding of depleted inventory pipelines and improving underlying demand. Sales in Specialty Materials were down on lower demand in Dow Water and Process Solutions for ion exchange resins, partly offset by an increase in sales of reverse osmosis membranes for large desalination and municipal water projects. Sales in Dow Wolff Cellulosics were lower due to weakness in construction end-use applications and inventory de-stocking in the pharmaceuticals industry, partly offset by steady demand in food-related applications. Equity earnings for the segment were $94 million. This compares with equity earnings of $114 million in the same period last year. EBITDA for the segment was $407 million. This compares with EBITDA of $390 million in the same period last year.

Performance Versus Prior Quarter
On a sequential basis, sales in the Electronic and Specialty Materials segment increased 8 percent, with volume up 7 percent and price up 1 percent. In the Electronic Materials business, the strong pace of recovery continued. The Semiconductor Technologies business reported high customer utilization rates, with clear signs of recovery in industry segments that experienced some of the deepest declines at the beginning of the year. Volume in Interconnect Technologies improved partly due to higher demand for printed circuit board applications. The Display Technologies business reported solid revenue growth, driven by volume recovery in light diffuser films, share gains in microlens films, and volume improvements in organic light emitting diode (LED) materials. The Growth Technologies business experienced a significant increase in demand in LED, notebook and television backlighting. The Specialty Materials business reported sequential volume gains across all business units except Dow Wolff Cellulosics, which was impacted by weak construction demand and inventory de-stocking in the pharmaceuticals industry. Dow Water and Process Solutions reported a modest improvement in sales due to higher shipments of reverse osmosis membranes for large projects, mostly offset by lower demand from industrial segments. Equity earnings of $94 million in the third quarter reflected a substantial improvement in performance at Dow Corning. This compares with equity earnings of $58 million in the second quarter of 2009. Third quarter EBITDA was $407 million. This compares with second quarter EBITDA of $158 million, which included charges totaling $143 million for restructuring activities and a one-time increase in cost of sales related to the fair valuation of Rohm and Haas inventories.

Coatings and Infrastructure
Sales in Coatings and Infrastructure were $1.3 billion for the third quarter, down 22 percent compared with the same period last year. Volume declined 9 percent, while price decreased 13 percent. Volume increases were reported in Asia Pacific, with China architectural coatings reporting robust growth versus the same period last year, as new products developed in the last two years by regional R&D teams successfully ramped up. All other geographic areas posted double-digit volume declines except IMEA, where volume was flat. At a segment level, weak year-over-year business conditions in the global building and construction industry persisted throughout the quarter, unfavorably impacting demand for insulation products and construction chemicals in Dow Building and Construction, and architectural paints and industrial coatings in Dow Coating Materials. Demand for architectural coatings in Asia Pacific stabilized in the quarter due to government stimulus spending in China. Prices for epoxy-based coating materials were down, due in part to unfavorable industry supply/demand fundamentals. Adhesives and Functional Polymers reported double-digit volume gains in Asia Pacific, due to strength in the packaging and automotive sectors. Price was down in all geographic areas. Third quarter EBITDA for Coatings and Infrastructure was $213 million. EBITDA in the third quarter of 2008 was $192 million.

Performance Versus Prior Quarter
Sales were up 7 percent from the prior quarter, with volume up 4 percent and price up 3 percent. Strong volume growth in industrial coatings was more than offset by the seasonal decline in architectural coatings, primarily in North America and Europe. Demand in Adhesives and Functional Polymers improved throughout the quarter, led by growth in adhesives for packaging and for leather used in automotive seating applications. Business results in Dow Building and Construction improved sequentially, driven by the slow rebound in commercial construction, especially in North America, Europe and Asia Pacific. These gains were partially offset by increased expenses related to the regulatory-driven changeover in foaming agent in the business’ North American asset base. Third quarter EBITDA was $213 million. This compares with EBITDA in the second quarter of $25 million, which was reduced $253 million by a restructuring charge and a one-time increase in cost of sales related to the fair valuation of Rohm and Haas inventories.

Health and Agricultural Sciences
Health and Agricultural Sciences reported sales of $796 million, down 20 percent from $995 million in the year-ago period. Volume declined 9 percent, while price was down 11 percent. Agricultural Chemicals was negatively impacted by lower crop commodity prices, which caused growers to reduce crop chemical applications, deplete existing inventories and delay purchases. Excess industry supply of glyphosate led to steep price declines for the herbicide versus the year-ago period. Insecticide sales also declined due to low insect pressures in North America and Europe. Sales of range and pasture herbicides were lower as well, due to severe drought conditions in the south central region of the United States. Corn seed sales in Brazil were negatively impacted by a delayed planting season and a shift in farm economics that favored soybeans versus corn. Significant regulatory milestones were achieved for SmartStax™ corn in the quarter. SmartStax received registration from the U.S. Environmental Protection Agency and regulatory authorization from the Canadian Food Inspection Agency. SmartStax remains on track for a 2010 commercial launch. Dow AgroSciences also announced that its affiliated cottonseed company, PhytoGen, reached double-digit cottonseed market segment share in the United States, the result of innovative breeding programs that are bringing new winning varieties with the right trait combinations to cotton growers. EBITDA for Health and Agricultural Sciences was $5 million, reflecting price and volume declines and increased investment in R&D. This compares with EBITDA of $95 million in the third quarter of 2008.

Performance Versus Prior Quarter
On a sequential basis, sales were down 34 percent, reflecting a 2 percent decline in price along with the typical seasonal decline in volume. EBITDA for Health and Agricultural Sciences in the third quarter of 2009 was $5 million. This compares with EBITDA of $140 million in the prior quarter, which included a $15 million reduction in the 2007 restructuring reserve.

™ SmartStax multi-event technology developed by Dow AgroSciences and Monsanto. SmartStax is a registered trademark of Monsanto Technology, LLC.

Performance Systems
Performance Systems sales were $1.5 billion, down 29 percent from $2.2 billion in the third quarter of 2008. Volume declined 13 percent, while price was down 16 percent. Declines were driven by the continued global economic slowdown in the automotive, construction and housing industries.

Automotive Systems sales fell, as original equipment manufacturers (OEMs) continued to reduce production, reflecting lower new vehicle builds versus the year-ago period. Formulated Systems posted volume declines in all geographic areas except Latin America and Asia Pacific, where government spending programs in China stimulated demand in infrastructure rehabilitation applications. Epoxy Systems also reported strong demand for wind energy applications in China, which favorably impacted results in the quarter. Continued weakness in the construction sector lead to a double-digit volume decline in Dow Wire and Cable. EBITDA for Performance Systems was $207 million. This compares with EBITDA of $106 million in the same period last year.

Performance Versus Prior Quarter
Sales increased 5 percent sequentially, driven by a 3 percent increase in price and a 2 percent gain in volume. Automotive Systems reported monthly volume gains in the quarter, due to government stimulus programs in China, Brazil and Germany. In the United States, the “Cash for Clunkers” government incentive program reduced excess vehicle inventory and OEMs responded by increasing production late in the quarter. Dow Elastomers also reported strong demand from the automotive sector, as new vehicle builds picked up towards the end of the quarter, and for food packaging applications, which have shown resilience throughout the recession. Formulated Systems volume grew in Asia Pacific, with significant gains in China. Polyurethane Systems reported a double-digit demand improvement in Russia where end-market segments have recovered quickly from depressed levels earlier in the year. Margins in Formulated Systems were under pressure throughout the quarter, however, as raw material costs increased faster than selling prices. Third quarter EBITDA for Performance Systems was $207 million. This compares with second quarter EBITDA of $212 million, which was reduced by a one-time increase of $30 million in cost of sales related to the fair valuation of Rohm and Haas inventories. Year-to-date EBITDA was $522 million, compared to 2008 year-to-date EBITDA of $515 million.

Performance Products
Sales in the Performance Products segment were $2.4 billion, down 33 percent from the same period last year. Volume fell 8 percent, while price declined 25 percent. Double-digit sales declines were reported across all business units and in all geographic areas as a result of the global economic downturn. The largest volume declines were in North America and Europe. Asia Pacific and IMEA, however, reported solid volume gains. Demand for Amines was especially weak in the agriculture industry, but volume still grew versus the year-ago period. Polyurethanes sales were down, but volume was flat with the same period last year. Epoxy sales fell as weak industry fundamentals have led to overcapacity and downward pressure on pricing. In Performance Fluids, Polyglycols and Surfactants, sales were lower than year-ago levels due to a contraction in industrial lubricant demand and weakness in construction-related applications, such as foam-control aides in cement and paint. Equity earnings were $19 million, down from $21 million in the third quarter of 2008 principally due to lower results from OPTIMAL. Third quarter EBITDA for Performance Products was $438 million, which included $140 million of the Company’s gain on the sale of OPTIMAL. This compares with EBITDA of $315 million in the year-ago period, which was reduced $63 million of hurricane-related costs.

Performance Versus Prior Quarter
On a sequential basis, sales in the Performance Products segment rose 16 percent. Volume increased 10 percent and price was up 6 percent. Amines reported a solid sequential improvement in demand, particularly in the automotive and electronics industries, which were supported by government stimulus efforts and inventory replenishment. Polyurethanes experienced double-digit volume growth, helped by government stimulus programs that fueled construction demand; however, margins were negatively impacted due to the steep increase in raw material costs, primarily propylene, in the quarter. Epoxy reported solid sequential volume growth in key end-use applications, including consumer electronics and construction. Sales in Performance Fluids, Polyglycols and Surfactants rose sequentially based on a strong increase in volume due to the recovery of demand for industrial lubricants and seasonal sales of de-foamers used in the production of bio-ethanol in Latin America and Europe. Additionally, the business continues to experience good demand for heat transfer fluids used in the emerging concentrated solar panels industry. Third quarter EBITDA was $438 million. This compares with second quarter EBITDA of $212 million, which was reduced $95 million by a restructuring charge and a one-time increase in cost of sales related to the fair valuation of Rohm and Haas inventories.

Basic Plastics
Sales in the Basic Plastics segment were $2.6 billion, down 32 percent from the same quarter last year, as volume increased 1 percent and price fell 33 percent. Double-digit price declines were reported in all geographic areas. Polyethylene volume increased from year-ago levels, due to double-digit gains in Latin America, Asia Pacific and IMEA. Relatively low production costs in North America resulted in export opportunities, which enabled the business to achieve double-digit volume growth in developing regions such as Asia Pacific and Latin America. Polypropylene volume rose slightly, primarily due to good demand and tight propylene supply in Europe, which partially offset weakness in North America where customers delayed purchases due to volatile propylene prices. Styrenics reported double-digit price and volume declines driven by lower raw material costs and weak year-over-year demand in automotive, appliance and construction applications. Equity earnings were $55 million in the third quarter, down $7 million from the year-ago period as improved results from Equipolymers and Siam Polyethylene were more than offset by lower earnings from EQUATE. Basic Plastics EBITDA was $590 million in the third quarter. This compares with $650 million in the year-ago period, which was reduced by $13 million of hurricane-related costs.

Performance Versus Prior Quarter
On a sequential basis, sales in the Basic Plastics segment rose 11 percent, as a 2 percent decline in volume was more than offset by a 13 percent increase in price. Polyethylene reported strong price increases in all geographic areas, led by Europe, which raised prices significantly to match rising feedstock costs and recover margins. Polyethylene reported volume growth on a global basis versus the prior quarter, due to strong sales into faster growing regions, such as Asia Pacific, where imports from North America occurred. These gains more than offset declines in North America and Europe. Polypropylene sales rose sequentially as a decline in volume was more than offset by a steep rise in price, as propylene prices surged in the quarter. While volatile propylene prices led to weak demand in North America, Europe reported volume growth as demand held up in the quarter and industry outages resulted in tight supply. Styrenics reported a drop in volume, which was more than offset by higher price. Equity earnings were $55 million in the third quarter, up $20 million on improved results from EQUATE. EBITDA for Basic Plastics was $590 million, up from $405 million in the second quarter of 2009.

Basic Chemicals
Sales in the Basic Chemicals segment were $568 million, down 49 percent from the same period last year. Volume declined 13 percent and price fell 36 percent, as double-digit price declines were reported in all geographic areas, except IMEA, and across all business units. Caustic soda prices are dramatically lower than year-ago levels as a result of weakness in alumina, chemical processing and pulp and paper industries. Vinyl chloride monomer (VCM) sales continued to be impacted by weak year-over-year infrastructure spending in the United States, tight credit, and contraction in the housing sector. The relative raw material cost advantage in the U.S. Gulf Coast enabled the business to increase production for export. Ethylene Oxide/Ethylene Glycol (EO/EG) results were impacted by reduced demand for EG used in polyester and polyethylene terephthalate (PET) production and industry overcapacity. Equity earnings were $45 million for the quarter, compared with $58 million in the year-ago period, on lower results from MEGlobal, OPTIMAL and EQUATE. EBITDA for the third quarter was $195 million, which included $187 million of the Company’s gain on the sale of OPTIMAL. This compares with EBITDA of $128 million for the same quarter last year, which was reduced by $21 million of hurricane-related costs.

Performance Versus Prior Quarter
On a sequential basis, sales in the Basic Chemicals segment fell 3 percent, as price declined 2 percent and volume decreased 1 percent. Caustic soda prices bottomed in the quarter as demand stabilized at a low level. VCM price rose strongly in the quarter due more to the collapse of caustic soda prices than from demand recovery in the marketplace. Relatively low production costs in the U.S. Gulf Coast encouraged production for export. The EO/EG business reported higher price sequentially as rising feedstock costs outside of North America lifted global EG prices and allowed the business to take advantage by exporting material from the U.S. Gulf Coast. Demand for key end-use applications of EG, such as textiles, appeared to weaken toward the end of the quarter. Equity earnings were $45 million for the quarter, compared with $9 million in the prior quarter, on improved results at EQUATE. EBITDA for the third quarter was $195 million, which included $187 million of the Company’s gain on the sale of OPTIMAL. This compares with a loss in EBITDA in the prior quarter of $107 million, which was reduced by a charge of $75 million for restructuring activities.

Outlook
Commenting on the Company’s outlook, Liveris said:

“The economic outlook for the rest of 2009 appears to be stabilizing with strong growth in Asia Pacific, especially China, and other emerging geographies. The global economy is now on firmer footing, and, in our view, the United States economy is beginning a slow and tenuous recovery, with unemployment continuing to be a drag on consumer spending. Therefore, our 2009/2010 operating plans do not count on material improvements in market conditions, and we remain tightly focused on those factors we can control, such as costs, capital and cash flow management.

"Dow has already begun to benefit from the smooth integration of Rohm and Haas and the decisive actions we took to accelerate our restructuring efforts and cost synergies. We have also made significant improvements to our balance sheet, strengthening our financial structure and providing more flexibility in how we execute any further divestitures, which will be made on a timely and strategic basis.

“Going forward, we will continue to manage our business with the same dedicated focus in the quarters ahead and are confident that we are firmly on track to position Dow as an earnings growth company.”

Dow will host a live Webcast of its third quarter earnings conference call with investors to discuss its results, business outlook and other matters today at 10:00 a.m. EDT on www.dow.com