DISCLOSURE REGARDING FORWARD-LOOKING INFORMATION
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements made by or on behalf of The Dow Chemical Company and its subsidiaries ("Dow" or the "Company"). This section covers the current performance and outlook of the Company and each of its operating segments. The forward-looking statements contained in this section and in other parts of this document involve risks and uncertainties that may affect the Company's operations, markets, products, services, prices and other factors as more fully discussed elsewhere and in filings with the U.S. Securities and Exchange Commission ("SEC"). These risks and uncertainties include, but are not limited to, economic, competitive, legal, governmental and technological factors. Accordingly, there is no assurance that the Company's expectations will be realized. The Company assumes no obligation to provide revisions to any forward-looking statements should circumstances change, except as otherwise required by securities and other applicable laws.

OVERVIEW
· On April 1, 2009, the Company completed the $15.7 billion acquisition of Rohm and Haas Company ("Rohm and Haas"), financed by $7 billion of preferred equity securities and $9.2 billion of debt. Additional financing activity took place in the second quarter of 2009, including the issuance of debt securities, the issuance of common stock, retirement of $3 billion of preferred equity securities and partial payment on the $9.2 billion of debt incurred on April 1, 2009.

· The Company reported sales in the second quarter of 2009 of $11.3 billion, down 31 percent from $16.3 billion in the second quarter of 2008. On a pro forma (1) basis, sales were down 40 percent compared with $18.9 billion in the second quarter of 2008. On a pro forma basis, prices were down 20 percent and volume was down 20 percent, reflecting falling feedstock and energy costs and continued poor economic conditions.

· Purchased feedstock and energy costs, which account for almost half of Dow's total costs, decreased 51 percent or $3.5 billion compared with the second quarter of 2008.

· Equity earnings were $122 million in the second quarter of 2009, down from $251 million in the second quarter of 2008.

· Capital spending was $325 million in the second quarter of 2009, on track with the full-year post-acquisition target of $1.4 billion; debt as a percent of total capitalization was 54.0 percent, up 8.3 percentage points from year-end 2008.

(1) The unaudited pro forma historical segment information is based on the historical consolidated financial statements and accompanying notes of both Dow and Rohm and Haas and has been prepared to illustrate the effects of the Company's acquisition of Rohm and Haas, assuming the acquisition of Rohm and Haas had been consummated on January 1, 2008, and the treatment of Dow's Calcium Chloride business as discontinued operations due to the sale of the business on June 30, 2009.

Selected Financial Data                       Three Months Ended             Six Months Ended
                                             June 30,       June 30,       June 30,       June 30,
In millions, except per share amounts            2009           2008           2009           2008
Net sales                                  $   11,322     $   16,349     $   20,363     $   31,140

Cost of sales                              $    9,764     $   14,621     $   17,902     $   27,505
Percent of net sales                             86.2 %         89.4 %         87.9 %         88.3 %

Research and development, and selling,
general and administrative expenses        $    1,044     $      849     $    1,779     $    1,678
Percent of net sales                              9.2 %          5.2 %          8.7 %          5.4 %

Effective tax rate                               36.3 %         23.6 %         39.9 %         23.6 %

Net income (loss) available for common
stockholders                               $     (486 )   $      762     $     (462 )   $    1,703

Earnings (loss) per common share - basic   $    (0.47 )   $     0.82     $    (0.47 )   $     1.82
Earnings (loss) per common share -
diluted                                    $    (0.47 )   $     0.81     $    (0.47 )   $     1.80

Operating rate percentage                          75 %           83 %           71 %           84 %

ACQUISITION OF ROHM AND HAAS COMPANY
On April 1, 2009, the Company completed the acquisition of Rohm and Haas. Pursuant to the July 10, 2008 Agreement and Plan of Merger (the "Merger Agreement"), Ramses Acquisition Corp., a direct wholly owned subsidiary of the Company, merged with and into Rohm and Haas (the "Merger"), with Rohm and Haas continuing as the surviving corporation becoming a direct wholly owned subsidiary of the Company.

The Company pursued the acquisition of Rohm and Haas to make the Company a leading specialty chemicals and advanced materials company, combining the two organizations' best-in-class technologies, broad geographic reach and strong industry channels to create a business portfolio with significant growth opportunities.

Pursuant to the terms and conditions of the Merger Agreement, each outstanding share of Rohm and Haas common stock was converted into the right to receive cash of $78 per share, plus additional cash consideration of $0.97 per share. The additional cash consideration represented 8 percent per annum on the $78 per share consideration from January 10, 2009 to the closing of the Merger, less dividends declared by Rohm and Haas with a dividend record date between January 10, 2009 and the closing of the Merger. All options to purchase shares of common stock of Rohm and Haas granted under the Rohm and Haas stock option plans and all other Rohm and Haas equity-based compensation awards, whether vested or unvested as of April 1, 2009, became fully vested and converted into the right to receive cash of $78.97 per share, less any applicable exercise price. Total cash consideration paid to Rohm and Haas shareholders was $15.7 billion.

The Company expects the transaction to create $1.3 billion in estimated pretax annual cost synergies and savings including increased purchasing power for raw materials; manufacturing and supply chain work process improvements; and the elimination of redundant corporate overhead for shared services and governance. The Company also anticipates that the transaction will produce significant growth synergies through the application of each company's innovative technologies and as a result of the combined businesses' broader product portfolio in key industry segments with strong global growth rates.

See Note D to the Consolidated Financial Statements for more information on this transaction.

RESULTS OF OPERATIONS
Results of Rohm and Haas are included in the Company's consolidated results from the acquisition date forward. In order to provide the most meaningful comparison of results of operations, some of the comparisons presented are to pro forma amounts. The unaudited pro forma historical segment information reflects the combination of Dow and Rohm and Haas and the impact of increased depreciation and amortization expense resulting from the fair valuation of assets acquired from Rohm and Haas in accordance with Statement of Financial Accounting Standards No. 141 (revised 2007), "Business Combinations" ("SFAS 141R"), assuming that the transaction had been consummated on January 1, 2008 (see "Segment Results" for further information).

Net sales for the second quarter of 2009 were $11.3 billion, down 31 percent from $16.3 billion reported in the second quarter of last year and down 40 percent compared with pro forma net sales of $18.9 billion. Compared with the same quarter of 2008 on a pro forma basis, prices fell 20 percent, with double-digit price decreases in all operating segments, with the exception of Electronic and Specialty Materials (down 5 percent) and Health and Agricultural Sciences (down 5 percent), and in all geographic areas. Price declines were most pronounced in the basic segments, with Hydrocarbons and Energy down 37 percent, Basic Plastics down 30 percent and Basic Chemicals down 29 percent. From a geographic standpoint, price declines were most pronounced in Europe where prices declined 26 percent and Latin America where prices declined 23 percent. Compared with the second quarter of last year on a pro forma basis, double-digit volume decreases were reported by all operating segments, except Health and Agricultural Sciences, which reported a 7 percent decline, and in all geographic areas. Volume declines were a result of the continued weakness in the global economy.

Reported net sales for the first six months of 2009 were $20.4 billion, down 35 percent from $31.1 billion in the same period last year. On a pro forma basis, net sales for the first six months of 2009 were $22.1 billion, down 39 percent from $36.2 billion in the same period last year. Compared with the first half of 2008 on a pro forma basis, prices were down 20 percent and volume decreased 19 percent. Price declines were reported by all operating segments, with the most significant declines in Hydrocarbons and Energy (41 percent), Basic Plastics (32 percent) and Basic Chemicals (25 percent). Double-digit volume declines were reported across all geographic areas and in all operating segments except Health and Agricultural Sciences, which reported a 1 percent increase in volume. For additional details regarding the change in net sales on a pro forma basis, see the Sales Volume and Price table at the end of the section entitled "Segment Results."

Gross margin was $1,558 million for the second quarter of 2009, down from $1,728 million reported in the second quarter of last year. Gross margin declined as a result of significantly lower selling prices and volume weakness, offset somewhat by lower hydrocarbon and energy costs (down approximately $3.5 billion or 51 percent) and lower costs for other raw materials. Gross margin was reduced by a one-time increase in cost of sales of $209 million related to the fair value step-up of inventories acquired from Rohm and Haas on April 1, 2009, and sold in the second quarter of 2009. The increase was included in "Cost of sales" in the consolidated statements of operations and reflected in the operating segments as follows: $75 million in Electronic and Specialty Materials, $82 million in Coatings and Infrastructure, $30 million in Performance Systems and $22 million in Performance Products. Year to date, gross margin was $2,461 million, compared with $3,635 million reported in the first six months of 2008.

The Company's global plant operating rate (for its chemicals and plastics businesses) was 75 percent in the second quarter of 2009, down from 83 percent in the second quarter of 2008. For the first half of 2009, Dow's global plant operating rate was 71 percent, down from 84 percent in the same period of 2008. Operating rates declined across most businesses, impacted by actions taken by management in response to lower demand resulting from the downturn in the global economy.

Personnel count was 57,903 at June 30, 2009, up from 46,102 at December 31, 2008 and 46,008 at June 30, 2008. Headcount increased from year-end 2008 due primarily to the acquisition of Rohm and Haas (an increase of 15,400), offset by declines related to restructuring activities (a decrease of 2,800), asset and business divestitures (a decrease of 650) and approximately 170 employees transferred to a joint venture.

Operating expenses (research and development, and selling, general and administrative expenses) totaled $1,044 million in the second quarter of 2009, up $195 million (23 percent) from $849 million in the second quarter of last year. Compared with last year, research and development ("R&D") expenses increased $46 million, and selling, general and administrative ("SG&A") expenses increased $149 million. For the first half of 2009, operating expenses totaled $1,779 million, up $101 million (6 percent) from $1,678 million in the first half of 2008 due to the acquisition of Rohm and Haas, and strategic growth initiatives at Dow AgroSciences, partially offset by cost saving initiatives.

Amortization of intangibles was $112 million in the second quarter of 2009, up from $25 million in the second quarter of last year. For the first half of 2009, amortization of intangibles was $134 million, compared with $47 million for the same period last year. The increase in amortization of intangibles reflected the amortization of the fair value of intangible assets acquired from Rohm and Haas. See Notes D and G to the Consolidated Financial Statements for additional information concerning the acquisition of Rohm and Haas and intangible assets.

In June 2009, Dow's Board of Directors approved a restructuring plan that incorporated actions related to the Company's acquisition of Rohm and Haas as well as additional actions to advance the Company's strategy and to respond to continued weakness in the global economy. The restructuring plan included the shutdown of a number of facilities and a global workforce reduction. As a result, the Company recorded restructuring charges totaling $677 million in the second quarter of 2009, which included asset write-downs and write-offs, severance costs and costs associated with exit or disposal activities. The impact of the charges was shown as "Restructuring charges" in the consolidated statements of operations and was reflected in the Company's segment results as follows: $68 million in Electronic and Specialty Materials, $171 million in Coatings and Infrastructure, $73 million in Performance Products, $1 million in Basic Plastics, $75 million in Basic Chemicals, $65 million in Hydrocarbons and Energy and $224 million in Corporate. In the second quarter of 2009, the Company also recorded a $15 million reduction in the 2007 restructuring reserve, reflected in the Health and Agricultural Sciences segment. See Note C to the Consolidated Financial Statements for details on the restructuring charges.

During the second quarter of 2009, pretax charges totaling $52 million were recorded for legal expenses and other transaction costs related to the April 1, 2009 acquisition of Rohm and Haas, and reflected in Corporate. These charges were expensed in accordance with SFAS 141R. An additional $34 million of acquisition-related retention expenses were incurred during the second quarter of 2009. These costs were recorded in "Cost of sales," "Research and development expenses," and "Selling, general and administrative expenses" and reflected in Corporate.

Dow's share of the earnings of nonconsolidated affiliates was $122 million in the second quarter of 2009, down from $251 million in the second quarter of last year. Compared with the same quarter of last year, earnings decreased at EQUATE Petrochemical Company K.S.C. ("EQUATE"), the OPTIMAL Group of Companies ("OPTIMAL"), Dow Corning Corporation ("Dow Corning") and MEGlobal, reflecting the overall decrease in global demand and poor economic conditions. Results from Equipolymers B.V. ("Equipolymers"), Americas Styrenics LLC and The Kuwait Olefins Co. K.S.C. showed modest improvement compared with the second quarter of last year. For the first six months of 2009, Dow's share of the earnings of nonconsolidated affiliates was $187 million, down from $525 million for the same period last year, with EQUATE, Dow Corning and OPTIMAL showing the largest declines. Equity earnings in the first half of 2009 were negatively impacted by $29 million for the Company's share of a restructuring charge recognized by Dow Corning. In May 2009, the Company announced a definitive agreement for the sale of the Company's 45 percent ownership stake in Total Raffinaderij Nederland N.V. ("TRN") for an enterprise value expected to be approximately $725 million. The transaction remains subject to regulatory and other approvals and is expected to close in 2009. On July 30, 2009, the Company announced that it had reached an agreement to sell its ownership stake in OPTIMAL for $660 million. The formal signing and exchange of the related definitive agreements is expected to take place during the first week of August. The transaction remains subject to customary conditions and approvals and is expected to close in the third quarter of 2009.

Sundry income - net includes a variety of income and expense items such as the gain or loss on foreign currency exchange, dividends from investments, and gains and losses on sales of investments and assets. Sundry income - net for the second quarter of 2009 was $23 million, compared with $37 million in the same quarter of 2008. Year to date, sundry income - net was $20 million, compared with $83 million in the first half of 2008.

Net interest expense (interest expense less capitalized interest and interest income) was $516 million in the second quarter of 2009, compared with $126 million in the second quarter of last year. Year to date, net interest expense was $658 million, compared with $247 million in the first six months of 2008. The increase in interest expense was due to debt financing for the April 1, 2009 acquisition of Rohm and Haas. Interest income was down $16 million in the second quarter of 2009 compared with the second quarter of 2008, and down $28 million for the first six months of 2009 compared with the first six months of 2008. The decline in interest income was due to lower interest rates. See "Changes in Financial Condition" for additional information regarding debt financing activity related to the acquisition of Rohm and Haas.

The effective tax rate for the second quarter of 2009 was 36.3 percent compared to 23.6 percent for the second quarter of 2008. For the first six months of 2009 the effective tax rate was 39.9 percent compared with 23.6 percent for the first six months of 2008. The Company's effective tax rate fluctuates based on, among other factors, where income is earned and the level of income relative to available tax credits. The year-to-date tax rate included the impact of audit settlements in the United States as well as the reversal of tax valuation allowances in Asia Pacific.

On June 30, 2009, the Company sold the Calcium Chloride business and recognized a $162 million pretax gain. The results of operations related to the Calcium Chloride business have been reclassified and reported as income from discontinued operations for all periods presented. Income from discontinued operations (net of income taxes) for the second quarter of 2009 was $103 million ($0.10 per share), compared with $5 million in the second quarter of 2008. Income from discontinued operations (net of income taxes) for the first six months of 2009, was $114 million ($0.12 per share) compared with $11 million ($0.01 per share) for the same period in 2008.

Preferred stock dividends of $142 million were recognized in the second quarter of 2009 following the Company's second quarter issuance of three series of preferred stock. Dividends on Cumulative Convertible Perpetual Preferred Stock, Series A were $85 million, with the remaining $57 million of dividends relating to Cumulative Perpetual Preferred Stock, Series B and Cumulative Convertible Perpetual Preferred Stock, Series C, both of which were subsequently retired in the second quarter of 2009. See Notes O and P to the Consolidated Financial Statements for additional information.

Net income (loss) available for common stockholders was a loss of $486 million or $0.47 per share for the second quarter of 2009, compared with income of $762 million or $0.81 per share for the second quarter of 2008. Net income
(loss) available for common stockholders for the first six months of 2009 was a loss of $462 million or $0.47 per share, compared with income of $1,703 million or $1.80 per share for the same period of 2008.

On July 31, 2009, the Company entered into a definitive agreement for the sale of certain acrylic monomer and specialty latex assets, as required by the United States Federal Trade Commission ("FTC"), for approval of the April 1, 2009 acquisition of Rohm and Haas (see Note D to the Consolidated Financial Statements). The transaction is subject to approval by the FTC and other customary closing conditions, and is expected to close in the second half of 2009.

The following tables summarize the impact of certain items recorded in the three-month and six-month periods ended June 30, 2009 and June 30, 2008, and previously described in this section:

Certain Items                        Pretax                             Impact on                             Impact on
Impacting Results                  Impact (1)                         Net Income (2)                           EPS (3)
                               Three Months Ended                   Three Months Ended                   Three Months Ended
In millions, except          June 30,           June 30,          June 30,           June 30,         June 30,             June 30,
per share amounts                2009               2008              2009               2008             2009                 2008
One-time increase in
cost of sales related
to fair valuation of
Rohm and Haas
inventories             $        (209 )                -     $        (132 )                -     $      (0.13 )                  -
Restructuring charges            (662 )                -              (445 )                -            (0.43 )                  -
Transaction and other
acquisition costs                 (86 )                -               (61 )                -            (0.06 )                  -
Total                   $        (957 )                -     $        (638 )                -     $      (0.62 )                  -




Certain Items                       Pretax                           Impact on                          Impact on
Impacting Results                 Impact (1)                       Net Income (2)                        EPS (3)
                               Six Months Ended                   Six Months Ended                   Six Months Ended
In millions, except         June 30,          June 30,         June 30,          June 30,        June 30,           June 30,
per share amounts               2009              2008             2009              2008            2009               2008
One-time increase in
cost of sales related
to fair valuation of
Rohm and Haas
inventories             $       (209 )               -     $       (132 )               -     $     (0.13 )                -
Restructuring charges           (681 )               -             (462 )               -           (0.45 )                -
Transaction and other
acquisition costs               (134 )               -             (102 )               -           (0.10 )                -
Dow Corning
restructuring                    (29 )               -              (27 )               -           (0.03 )                -
Total                   $     (1,053 )               -     $       (723 )               -     $     (0.71 )                -

(1) Impact on "Income (Loss) from Continuing Operations Before Income Taxes"
(2) Impact on "Net Income (Loss) from Continuing Operations"
(3) Impact on "Net income (loss) from continuing operations available for common stockholders - Earnings (Loss) per common share - diluted"

SEGMENT RESULTS
Effective in the second quarter of 2009, the Company changed its reportable segments due to recent changes in the Company's organization resulting from the April 1, 2009 acquisition of Rohm and Haas. In addition, the Company changed its measure of profit/loss for segment reporting purposes from EBIT to EBITDA (which Dow defines as earnings before interest, income taxes, depreciation and amortization). EBITDA by operating segment includes all operating items relating to the businesses, except depreciation and amortization; items that principally apply to the Company as a whole are assigned to Corporate. See Note R to the Consolidated Financial Statements for a reconciliation of EBITDA to "Income
(Loss) from Continuing Operations Before Income Taxes."

In order to provide the most meaningful comparison of results by reportable segment, the following discussion and analysis compares actual results for the second quarter of 2009 to pro forma historical results for the second quarter of 2008. For the year-to-date comparisons, actual results for the second quarter of 2009 plus pro forma historical results for the first quarter of 2009 are compared to pro forma historical results for the first half of 2008. The unaudited pro forma historical segment information is based on the historical consolidated financial statements and accompanying notes of both Dow and Rohm and Haas and has been prepared to illustrate the effects of the Company's acquisition of Rohm and Haas, assuming the acquisition of Rohm and Haas had been consummated on January 1, 2008.

The unaudited pro forma historical segment information is not necessarily indicative of the results of operations that would have actually occurred had the acquisition been completed as of the dates indicated, nor is it indicative of the future operating results of the combined company. The unaudited pro forma historical segment information does not reflect future events that may occur after the acquisition of Rohm and Haas, including the potential realization of operating cost savings (synergies) or restructuring activities or other costs related to the planned integration of Rohm and Haas, and does not consider potential impacts of current market conditions on revenues, expense efficiencies or asset dispositions (with the exception of the sale of Dow's Calcium Chloride business).

ELECTRONIC AND SPECIALTY MATERIALS

Electronic and Specialty Materials       Three Months Ended             Six Months Ended
                                       June 30,        June 30,      June 30,       June 30,
In millions                                2009            2008          2009           2008
Sales                                $    1,164      $      730     $   1,640     $    1,359
EBITDA                               $      158      $      214     $     237     $      441
Pro Forma Sales                             N/A      $    1,583     $   2,135     $    3,027
Pro Forma EBITDA                            N/A      $      492     $     251     $      901

Electronic and Specialty Materials sales were $1,164 million for the second quarter of 2009, down 26 percent from $1,583 million in the second quarter of 2008. Compared with the second quarter of 2008, volume declined 21 percent and prices dropped 5 percent, including a 2 percent unfavorable currency impact. The drop in prices was broad-based, with decreases reported in all geographic areas. The decrease in volume was also broad-based in all geographic areas and in all major product groups. The decline in volume was driven by the continued slow down in the electronics, housing and construction industries. EBITDA for the second quarter of 2009 was $158 million, down significantly from $492 million in the second quarter of 2008, as lower sales volume, lower selling prices and lower equity earnings from Dow Corning exceeded the benefit from lower raw . . .