Dow Chemical 2009 Annual Report Download - page 5

2009 Annual Report 3
As we look ahead, Dow will complete the integration of Rohm and Haas. We will continue to
invest in technology-integrated, market-driven performance businesses that create value for
our stockholders and growth for our customers. In 2010, we will invest heavily in research and
development – again committing $1.6 billion to our already robust pipeline – an investment
equal to our record spend in 2009. This pipeline is valued today at $28 billion, more than five
times higher than in 1997. And we will continue to manage a portfolio of asset-integrated,
building-block businesses that generate value for our downstream portfolio.
We will stay focused on delivering the right asset-light strategy for our world-class Basic Plastics
segment. We will, as ever, be patient and do only the deals that fuel our high-growth, high-
value assets that, as we have seen, generate strong cash flow even in the most challenging
times. Our recently announced Styron transaction with Bain Capital is an example of seeking
the best value outcome for these businesses.
We will also maintain the financial and operational discipline that are hallmarks of our Company
and served us so well through the economic downturn. As I have said in the past, Dow is a
“no excuses” company. We welcome the fact that the global economic climate appears to be
improving, but we will not count on it. We ended 2009 with a cash balance of $2.8 billion, and
we improved our balance sheet because of the many actions we took throughout the year. I’m
committed to further improving the financial profile of the Company in 2010 and beyond. We
will continue to improve our financial ratios through additional non-strategic divestitures and
through our proven ability to generate solid cash flow.
Likewise, we are committed to meeting our announced structural cost reductions. We are
already well ahead of schedule towards reaching a $2.5 billion run-rate by year-end 2010.
In fact, we have already achieved more than 140 percent of the 12-month cost synergy and
restructuring run-rate goal for the integration of Rohm and Haas. In addition, we will improve
our working capital discipline by another $500 million this year.
This disciplined, strategic approach to our business served us well last year and is just as
important for Dow’s future. It is the key to fulfilling our unwavering commitment to create
value for all our stakeholders – and, specifically, to increase value for you, our stockholders.
The Dow we are creating will deliver on this promise, today and tomorrow.
This past year has been like no other. Your Dow management team faced tremendous adversity.
I am pleased with how we came through with great results and a firm resolve.
Thank you for your patience and support during these challenging times. And thank you for
continuing to believe – as I do – in our vision: to be the most profitable and respected
science-driven chemical company in the world.
Andrew N. Liveris
President, Chief Executive Officer
and Chairman of the Board
March 3, 2010