Dow Chemical 2009 Annual Report Download - page 78

Table of Contents
EBITDA for 2008 was $1,050 million, compared with $1,991 million in 2007. Results for 2008 were negatively impacted by costs of $59 million
related to the U.S. Gulf Coast hurricanes and restructuring charges of $39 million related to the closure of several manufacturing facilities announced in the
fourth quarter. EBITDA declined from 2007 as the favorable impact of higher selling prices in 2008 was more than offset by increased feedstock and energy
and raw material costs and decreased sales volume resulting from contraction in the global economy.
Results for 2007 were negatively impacted by restructuring charges of $55 million, including a charge of $42 million related to the write-down of the
Company’s indirect 50 percent interest in Dow Reichhold Specialty Latex LLC, and charges of $13 million related to the write-down of two manufacturing
facilities.
Performance Products Outlook for 2010
The anticipated recovery of the global economy, along with various government stimulus programs and expected growth in emerging geographies, improves the
2010 outlook for Performance Products. Several businesses have already noted increased demand in the later part of 2009 and expect further strengthening in
2010. The restructuring efforts completed in 2008 and 2009 are expected to have a positive impact on 2010 business results.
Amines sales are expected to grow in 2010, with volume growth exceeding anticipated price reductions for the business related to industry overcapacity.
The business has been successfully increasing sales in certain industry segments, helped by increased sales volume with some key customers. Demand in
Asia Pacific, particularly China, is expected to more than offset sluggish demand in Europe and North America.
Polyurethanes prices are expected to rise in 2010, driven by anticipated increases in feedstock and energy costs. Volume is expected to improve relative to
2009 resulting from the improvement in global economic conditions, which should have a positive impact on the industry operating rates. Healthy economic
conditions in Asia Pacific are expected to more than compensate for projected soft demand in Europe.
Epoxy sales are expected to grow due to continued economic recovery. As demand improves, some margin recovery is expected. Adding to the positive
outlook for the business in 2010, demand growth for halogen-free products is anticipated, along with a reduction in competitor capacity in certain industry
segments.
The Oxygenated Solvents business continues to focus on price management to retain margins. This is anticipated to result in favorable financial results as
demand rebounds with an overall improvement in the economy. Volume is expected to be up slightly.
Performance Monomers positive sales demand trend from the latter part of 2009 is expected to continue into 2010. The recovery of the global economy,
stability in the established industries and growth, especially in the emerging geographies, are expected to positively impact the business. Sales are expected to
increase, driven by higher prices due to higher raw material costs, combined with more positive industry supply/demand balances.
In July 2009, the Company announced that styrene-butadiene latex would align with Styron, a new business unit of Dow being formed to prepare styrene-
butadiene latex and other businesses to operate under a different ownership structure in the future. Styrene-butadiene latex is still managed within the
Performance Products segment.
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