Dow Chemical 2013 Annual Report Download - page 52

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The Dow Chemical Company and Subsidiaries
PART II, Item 7. Management’s Discussion and
(Unaudited) Analysis of Financial Condition and Results of Operations.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
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ABOUT DOW
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 agriculture. In 2013, Dow had annual sales of more than $57 billion and employed approximately 53,000 people
worldwide. The Company's more than 6,000 products are manufactured at 201 sites in 36 countries across the globe. The
Company conducts its worldwide operations through global businesses, which are reported in six operating segments:
Electronic and Functional Materials, Coatings and Infrastructure Solutions, Agricultural Sciences, Performance Materials,
Performance Plastics and Feedstocks and Energy.
In 2013, 36 percent of the Company’s sales were to customers in North America; 32 percent were in Europe, Middle East and
Africa (“EMEA”); while the remaining 32 percent were to customers in Asia Pacific and Latin America.
2013 OVERVIEW
During 2013, Dow continued to face a challenging business environment with ongoing, persistent headwinds in Western
Europe and hesitant growth in other geographic areas. In this uncertain economic environment, the Company remained
committed to its strategy - implementing cost and cash flow actions, which gained momentum as the year progressed; liberating
and deploying cash to enhance the Company's capital structure and reward shareholders; and investing in strategic projects
focused on long-term sustainable growth. The Company also paid down debt, continued to maintain a strong liquidity position
and rewarded shareholders through dividends and share repurchases.
Net sales for 2013 were $57.1 billion, up 1 percent from $56.8 billion in 2012. Sales increased in all operating segments except
Performance Materials (down 2 percent) and Feedstocks and Energy (down 8 percent). Excluding the impact of a divestiture(1),
sales increased in all geographic areas except Europe, Middle East and Africa ("EMEA") (down 5 percent).
(1) Excludes sales related to Nippon Unicar Company Limited, which was divested on July 1, 2013.
2013 Overview 30
Results of Operations 32
Segment Results 39
Electronic and Functional Materials 39
Coatings and Infrastructure Solutions 41
Agricultural Sciences 42
Performance Materials 43
Performance Plastics 45
Feedstocks and Energy 47
Sales Price and Volume Charts 50
Liquidity and Capital Resources 51
Other Matters 57
Critical Accounting Policies 57
Environmental Matters 62
Asbestos-Related Matters of Union Carbide Corporation 66
K-Dow Arbitration 66