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40
COATINGS AND INFRASTRUCTURE SOLUTIONS
The Coatings and Infrastructure Solutions segment consists of the following businesses: Dow Building and Construction, Dow
Coating Materials, Dow Water and Process Solutions, and Performance Monomers; and includes a portion of the Company's
share of the results of Dow Corning Corporation, a joint venture of the Company.
Coatings and Infrastructure Solutions
In millions 2012 2011 2010
Sales $ 6,898 $ 7,200 $ 6,596
Price change from comparative period (6)% 13 % 9 %
Volume change from comparative period 2 % (4)% (3)%
Volume change, excluding divestitures 2 % (1)% 7 %
Equity earnings $ 50 $ 321 $ 343
EBITDA $ 823 $ 1,167 $ 1,230
Certain items impacting EBITDA $ (134) $ (60) $ (20)
2012 Versus 2011
Coatings and Infrastructure Solutions sales were $6,898 million in 2012, down from $7,200 million in 2011. Sales decreased 4
percent with price declining 6 percent (with approximately one-third of the price decrease due to currency) and volume
improving 2 percent. The decrease in price was across all geographic areas and across most businesses, driven in response to
lower feedstock and energy and other raw material costs. Dow Coating Materials volume increased due to higher demand for
industrial coatings. Despite market share gains achieved through technology innovations in paper coatings and in traffic paint,
notably EVOQUEâ„¢, volume for architectural coatings declined slightly, driven by continued weak end-use market conditions,
especially for residential construction in EMEA. Dow Water and Process Solutions volume was flat as higher demand for
reverse osmosis membranes used in water desalination projects and for ion exchange resins used in ultrapure water applications
was offset by weaker demand for ion exchange resins used in large industrial water projects. Dow Building and Construction
volume declined due to price/volume optimization in North America and slower construction activity in EMEA, which more
than offset volume gains in Asia Pacific. Performance Monomers volume increased in all geographic areas, especially in Asia
Pacific, driven by favorable supply/demand conditions in Japan due to a competitor plant outage.
EBITDA for 2012 was $823 million, down from $1,167 million in 2011. Compared with last year, lower selling prices and
lower equity earnings from Dow Corning more than offset higher sales volumes, lower feedstock and energy costs and the
favorable impact of currency on costs. EBITDA for 2012 was negatively impacted by restructuring charges of $53 million. The
1Q12 Restructuring plan included $37 million of restructuring charges, consisting of asset write-downs and write-offs of $33
million and costs associated with exit or disposal activities of $4 million. The 4Q12 Restructuring plan included $16 million for
asset write-downs and write-offs. In addition, EBITDA for 2012 included an $81 million charge related to Dow Corning's
restructuring and asset abandonment. See Notes 3 and 8 to the Consolidated Financial Statements for additional information on
these charges.
On July 20, 2012, the Chinese Ministry of Commerce ("MOFCOM") initiated antidumping and countervailing duty
investigations of imports of solar-grade polycrystalline silicon products from the United States and Korea based on a petition
filed by Chinese solar-grade polycrystalline silicon producers. The petition alleges that producers within these countries
exported solar-grade polycrystalline silicon to China at less than fair value, and that production of solar-grade polycrystalline
silicon in the United States has been subsidized by the U.S. government. If the Chinese authorities find dumping or
subsidization, they may impose additional duties on future imports of solar-grade polycrystalline silicon to China from the
United States. Dow Corning, as a provider of solar-grade polycrystalline silicon product, is cooperating with MOFCOM in the
investigation and is vigorously contesting the allegations. The outcome of this matter is uncertain. However, it is reasonably
possible that the estimate of undiscounted cash flows used to test the recoverability of the polycrystalline silicon asset group
could change in the near term, resulting in a write-down of assets to fair value. If an asset impairment is recorded at Dow
Corning related to the polycrystalline silicon asset group, the potential after tax impact to Dow is estimated to be approximately
$700 million.
2011 Versus 2010
Coatings and Infrastructure Solutions sales were $7,200 million in 2011, up from $6,596 million in 2010. Sales increased 9
percent with price improving 13 percent and volume decreasing 4 percent. The increase in price was broad-based, with double-
digit gains across all geographic areas, more than offsetting higher feedstock and other raw material costs. Volume was lower
primarily due to the June 1, 2010 divestiture of the Powder Coatings business and the Federal Trade Commission required
divestiture of certain acrylic monomer and specialty latex assets on January 25, 2010. Excluding these divestitures, volume was
down 1 percent compared with 2010. Dow Building and Construction sales were higher as prices increased in response to