The Dow Chemical Company

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1 The Dow Chemical Company Credit Suisse Basic Chemicals Conference Jim Fitterling Vice Chairman, Business Operations September 17, 2015 The Dow Chemical Company

2 SEC Disclosure Rules Some of our comments today include statements about our expectations for the future. Those expectations involve risks and uncertainties. Dow cannot guarantee the accuracy of any forecasts or estimates, and we do not plan to update any forward-looking statements if our expectations change. If you would like more information on the risks involved in forward-looking statements, please see our annual report and our SEC filings. In addition, some of our comments reference non-gaap financial measures. Where available, presentation of and reconciliation to the most directly comparable GAAP financial measures and other associated disclosures are provided on the Internet at Important Notices and Additional Information In connection with the proposed transaction, Splitco has filed a registration statement on Form S-4/S-1 containing a prospectus and Olin has filed a proxy statement on Schedule 14A and a registration statement on Form S-4 containing a prospectus with the SEC. INVESTORS AND SECURITY HOLDERS ARE ADVISED TO READ THE REGISTRATION STATEMENTS/PROSPECTUSES AND PROXY STATEMENT AND ANY FURTHER AMENDMENTS WHEN THEY BECOME AVAILABLE AS WELL AS ANY OTHER RELEVANT DOCUMENTS WHEN THEY BECOME AVAILABLE, BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE PARTIES AND THE PROPOSED TRANSACTION. Investors and security holders may obtain a free copy of the prospectuses and proxy statement (when available) and other documents filed by TDCC, Splitco and Olin with the SEC at the SEC's web site at Free copies of these documents and any further amendments, once available, and each of the companies other filings with the SEC may also be obtained from the respective companies by directing a written request to Olin at 190 Carondelet Plaza, Clayton, MO Attention: Investor Relations or TDCC or Splitco at The Dow Chemical Company, 2030 Dow Center, Midland, Michigan 48674, Attention: Investor Relations. This communication is not a solicitation of a proxy from any investor or security holder. However, Olin, TDCC, and certain of their respective directors, executive officers and other members of management and employees, may be deemed to be participants in the solicitation of proxies from shareholders of Olin in respect of the proposed transaction under the rules of the SEC. Information regarding Olin s directors and executive officers is available in Olin s 2014 Annual Report on Form 10-K filed with the SEC on February 25, 2015, and in its definitive proxy statement for its annual meeting of shareholders filed March 4, Information regarding TDCC s directors and executive officers is available in TDCC s Annual Report on Form 10-K filed with the SEC on February 13, 2015, and in its definitive proxy statement for its annual meeting of shareholders, filed March 27, 2015, and a supplement to the proxy statement filed March 31, These documents can be obtained free of charge from the sources indicated above. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, is contained in the registration statements, prospectuses and proxy statement and other relevant materials filed with the SEC. This communication shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended. Trademark of The Dow Chemical Company or an affiliated company of Dow. EBITDA is defined as earnings (i.e., Net Income ) before interest, income taxes, depreciation and amortization. Operating EBITDA is defined as EBITDA excluding the impact of Certain Items. Operating EPS is defined as earnings per share excluding the impact of Certain Items. Operating Return on Capital is on a trailing twelve month basis and defined as Adjusted Net Operating Profit After Tax divided by Average Total Capital. 2

3 Agenda Moving Narrower and Deeper Portfolio is Structured to Capture Value Executing on Our Commitments 3

4 Pre-Tax Proceeds ($B) Going Narrower with Our Portfolio Dow Exceeds Divestiture Target Completed In Progress Kuwait and Other JV Optimization Dow Chlorine Products ~ $0.9B AgroFresh ~ $1.4B Angus and Sodium Borohydride ~$450MM Asset Sales (Railcars, Land, etc.) ~$850MM in 2013 (PPL&C, others) *Assumes 37% tax rate; Based on March 2015 values ~$3.6B ~$3B Tax Eq. ~$5B Pre-Tax Taxable Equivalent Value* ~ $8B >$7B - $8.5B Completed Dow Chlorine Products Expanded Target Since 2013 released ~$12B 1 in pretax and tax equivalent value to be repurposed for shareholder benefit In the last five years, we have exited $11.7B 2 in lower margin/lower ROC business revenue Dow Chlorine Products, Styrenics chain, Polypropylene chain, Angus, SBH, AgroFresh Operating ROC 3 has improved by 370 bps Operating EPS 3 has expanded by 141% Operating EBITDA margin has improved by 520 bps $4.4B in buybacks and dividends with a 49% payout ratio over the last 12 months (1) Assumes completion of the Dow Chlorine Products transaction (2) Revenue on a TTM basis at time of sale for businesses (3) TTM basis 4

5 Stepping Down Right-Size Specialty Ethylene Derivatives and Chlorine Envelopes EG EO 1 Dow EO Capacity (2004) Right-Size EO Envelope and Move Away from Commodity Applications 85% reduction in Dow direct EG participation MEGlobal Divest/Shutdown Dow EO Capacity (2015) EO/EG Actions Taken Reduced ownership of NAA EO/EG capacity with MEGlobal JV formation (2004) Shutdown capacity in St. Charles (2009) Sold interest in Optimal (2009) Shutdown capacity in Wilton, U.K. (2010) Converted to EO-only operation in Terneuzen (2009) and St. Charles (2011) Maintain modest EG flywheel to maximize EO operations Right-Size Chlorine Envelope and Reduce Exposure to Highly-Cyclical End Markets Ext 2 Int 3 Dow CL2 Capacity (2004) ~7B lbs. reduction in Dow s CL2 consumption Vinyls Epoxy GCO Dow CL2 Capacity (2015) Chlorine Actions Taken Shutdown chlorine and EDC capacity in Fort Saskatchewan (2006) Shutdown chlorine capacity in Freeport (2009) Shutdown VCM capacity in Texas and Louisiana (2011) Shutdown EDC capacity in Louisiana (2011) Announced shutdown of chlorine capacity in Freeport (2013) Signed DCP divestiture with Olin (2015) (1) Non-EG ethylene oxide derivatives (2) External use (3) Internal use 5

6 Integrated Margin cpp Focusing Asset Base Toward Highest Value U.S. Margins for Ethylene Based Products Dow is Focused on Participation in Highest Value Markets Portfolio Action Basic Chemicals Dow participation in highest margin markets for Ethylene 1 64% in % in % in Differentiation Packaging and Specialty Plastics and EO specialty derivatives require channel and innovation competencies that are core to Dow Basic plastics is a flywheel for Dow, allowing full leverage of our leadership position in PE scale Source: IHS, Dow internal PVC and VCM markets are lower margin uses of ethylene that are heavily commoditized Purple: Parts of the Consumer Solutions, Infrastructure Solutions and Performance Materials & Chemicals operating segments Red : Part of the Performance Plastics operating segment Grey: Part of the Performance Materials & Chemicals operating segment (1) Based on IHS shareholder capacity 6

7 Going Deeper in Higher Margin Chains Focused Uses of Ethylene Dow Ethylene Capacity Utilization 83% of operated capacity goes directly into highmargin markets Sold ethylene capacity to MEGlobal in 2004 reduced exposure to glycols Expected sale of ethylene to Olin at reinvestment economics 74% 9% 9% Other derivatives Heritage contracts DCP 8% Operated, not wholly owned 23B lbs Last layer of legacy vinyl contract exposure ends in 2020 Performance Plastics Specialty Ethylene Derivatives MEGlobal Chlorine Derivatives IHS C2 Capacity Source: 2014 IHS Shareholder Capacity; Internal Dow Focused Investment in Value-Added Markets 7

8 Dow and Olin A Long-Term Strategic Win/Win Dow best long-term ethylene owner Chlorine Ethylene Olin best long-term chlorine owner High-return uses of ethylene Dow retains site integration while improving ROC Low-cost ECU producer Olin is fully integrated and diverse global leader in chlorine Retains Dow s chlorine integration advantage ROC accretive expected to improve balance sheet by ~$5B 1 through liability reduction, cash and share buybacks Reduces exposure to vinyl chain Enables capital prioritization to highest return opportunities Rapid step up to premier global position in chlorine chain Realizes ethylene integration at scale and USGC producer costs Positioned to compete 8 Integrated base load customer Diversifies product offering and markets Accelerates ROC Improvement; ~$8B in Pretax Proceeds (1) Based on timeframe 8

9 Olin Synthetic Ethylene Ownership Dow Benefits Receives reinvestment economics on ~1980 ethylene capacity connected to chlorine derivatives Receives ~$0.7B capacity rights payment with potential for an additional ~$0.5B due upon option trigger Olin Benefits Immediate back integration to USGC ethylene economics Access of up to 345 KTA of ethylene Future option for 300 KTA increment in 2021 Deal Mechanics (20-year deal with upfront and per-lb payments) Rights to 345 KTA ethylene/year starting at deal close with option for additional 300 KTA in 2021 related to Dow legacy contract sale/purchase at full industry integrated producer basis unit costs. Realizes Reinvestment Economics on ~35 Year Old Ethylene Capacity 9

10 Strength of New Olin The Global Leader in Chlorine Derivatives with Unmatched Scale, Integration and Diversification (as of 2016) Brine Integration Power Integration Ethylene Integration In-House Cell Technology and Services Diverse Chlorine Outlets 1 (1) Via capacity reservation off-take agreements with Dow at economic cost-based pricing Source: IHS; Publically available information 10

12 Portfolio is Structured to Capture Value Differentiation Attractive Supply / Demand Taking Advantage of Energy Disconnects 12

13 Maximizing Long-Term Shareholder Value Sources of Value Vary Over Time Ethane/Naphtha Spread Ethylene/Naphtha Margin PE/Ethylene Margin 100% 80% 60% 40% 20% 0% TTM Source: 2014 IHS Shareholder Capacity; Internal Dow; Bloomberg TTM TDCC Operating EBITDA ($B) $3.0 $8.5 $5.3 $9.3 $9.6 Brent Oil Price ($/bbl) $25 $55 $63 $99 $58 1 Optimizing Integrated Returns Run to maximize integrated volumes Grow physical capacity Best-in-class reliability Americas and Middle East Gas-based economics Europe LPG enables margin optimization across by-product price swings Oil-to-gas spread sets a higher earnings base Markets are tightening, driving higher integrated PE margins Dow differentiation adds a high return layer of consistent value on top of energy and supply/demand dynamics (1) TTM as of 2Q15 for Operating EBITDA and Brent Crude Oil Price is Jan 1 though Aug 31,

14 Differentiation at Every Step of the Value Chain Meeting customer needs through global marketing and sales organization Collaboration with customers (i.e. Pack Studios) Competitively advantaged through science and technology expertise specific to Dow: Broadest portfolio of plastic technologies in the industry Technology ownership (Material Science, Catalyst Tech., Process Tech.) Experts with answers Brand recognition for high performance LLDPE, HDPE, LDPE, Elastomers, EVA, Acrylic Binders, Adhesives, Barrier Films, Fibers, Sealants, Tie Layers, Formulated Products PACXPERT, 100% PE Stand-Up Pouch, CONTINUUM two-piece rigid container, INFUSE Olefin Block Copolymers 14

15 Capacity and Demand (B lbs.) Global Operating Rate Capacity and Demand (B lbs.) Global Operating Rate Integrated Polyethylene and Elastomers Balances Remain Favorable Global Ethylene Demand / Capacity / Operating Rate Demand Capacity Operating Rate 100% 95% 90% 85% Balances expected to tighten over next several years Oil uncertainties lead to >7MMT of project delays or 9MMT under pressure % 75% Supply risks persist as industry continues to operate an aging fleet Global Polyethylene Demand / Capacity / Operating Rate Demand Capacity Operating Rate 95% 90% 85% 80% 75% 70% Reasonable delays with projects under construction and as new participants climb the experience curve (Iran and China) Iranian export capacity destined for Chinese HDPE market and other highly commoditized applications Source: Dow IHS

16 Examples Key Variables Demand Matters Tight Oil Supply Low Global Demand High feedstock cost Low price pass through Low commodity margins Weak specialty margins High Global Demand High feedstock cost Good price pass through High oil/gas spreads Moderate specialty margins Excess Oil Supply Low feedstock cost Low price pass through Low commodity margins Good specialty margins Low feedstock cost Good price pass through Good commodity margins Good specialty margins Tight Oil Supply Low Global Demand 2012 $112 Brent Dow Op. EBITDA $7.5B High Global Demand 2013 $109 Brent Dow Op. EBITDA $8.4B Excess Oil Supply 2009 $63 Brent Dow Op. EBITDA $5.3B 2015 $58 Brent YTD Dow Op. EBITDA $9.6B (TTM as of 2Q15) Sources: Bloomberg; Dow internal 16

18 Dow Ethylene Capacity (B lbs.) Global Ethylene Capacity (B lbs.) Largest Global Increase of Integrated PE and Derivatives (today ) SC-2 Sadara LA-3, Sadara TX Dow Rest of World Dow Americas Global 220 Going Deeper Ethylene Capacity Increase is Fully Integrated in Polyethylene, Elastomers and Other Specialty Derivatives Source: IHS by Shareholder 18

19 U.S. Gulf Coast Investments On Plan PDH ($1.2B CAPEX) TX-9 ($1.7B CAPEX) Derivative Assets $2.0B CAPEX (including $0.3B de-bottleneck) LA-3 ($0.2B CAPEX) Mechanically complete Commissioning underway On spec propylene in 4Q15 EBITDA contribution in 4Q15 Construction began in June 2014, approximately 25% complete All major equipment purchased, with >60% on-site and 30% installed Ethane cracker with initial propane flexibility of up to 30% Synced with start-up of TX-9 Next-generation NORDEL Metallocene EPDM High Melt Index (HMI) specialty elastomers ELITE Enhanced Polyethylene New specialty low density polyethylene Added: Bi-modal Gas Phase de-bottlenecking De-bottlenecks plant capacity, increasing ethylene capacity by 250 KTA Will balance U.S. ethylene position Timed with upcoming turnaround in 1H16 Infrastructure ($1.4B CAPEX) PDH infrastructure complete Ethane and propane feedstock pipelines to Mt. Belvieu complete All Equipment is Purchased and Projects Remain on Plan 19

20 Disciplined and Delivering Narrower and deeper execution is driving performance Integrated franchises are powerhouses today On track for the largest advantaged integrated polyethylene and elastomers expansion in the Americas and globally Dow-Olin is a huge win for both companies We re executing portfolio moves, operations, capex, differentiation 20

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22 Ethane Propane Butane Naphtha Maximum Cracking Capability for Ethylene Production by Feedstock Dow Europe LPG Cracking Capability for Ethylene Production Dow Ethane Cracking Capability for Ethylene Production Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Volume Dow s Industry Leading Feedstock Flexibility Enables Optimized Feedslate Economics Increasing U.S. Ethane Capability Dow U.S. Dow Americas 90% 80% 70% 60% 50% 40% Dow Europe LPG Cracking Volume Increasing Industry-Leading Flexibility Increasing Europe LPG Capability 75% Dow U.S. Industry U.S. 60% 55% 50% 25% 50% 45% 40% 0% 35% 30% 22

23 Ethane Usage (MBD) Ethane Surplus / Deficit (MBD) Propane Supply / Demand (MBD) Propane Exports / (Imports) (MBD) Feedstock Drivers for USGC Investments Remain Favorable 2750 US Ethane Supply / Demand Balance US Propane Supply / Demand Balance Surplus Supply Demand Surplus/(deficit) Domestic Demand Domestic Supply 23

24 Applying Unique High Throughput R&D Across Dow Unique Capabilities Improve Probability of Success 5x-10x increase in experimental productivity Cut time to discovery in half Catalyst Discovery and Development Dow Segments: Performance Plastics, Performance Materials & Chemicals Innovations: INFUSE Catalyst, advanced EO catalysts Formulation Development and Rapid Customization Dow Segments: Ag. Sciences, Consumer & Infrastructure Solutions Innovations: EVOQUE Polymer, ENLIST DUO, 193nm Photoresist Process Development and Optimization Dow Segment: Agricultural Sciences Innovations: ISOCLAST Active Strengthening Customer Intimacy and Accelerating Innovation 24

25 US Patent Grants US Patent Applications Capturing Value From Science and Technology Margin Premium on Patent Advantaged Sales >1,000bps US Applications US Grants Over 5,000 new products launched in 2014; Over 20,000 in the last 5 years 25