Dow Corning Reports Sales and Profits for Fourth Quarter and 2012 Year-End

  Dow Corning Reports Sales and Profits for Fourth Quarter and 2012 Year-End

Business Wire

MIDLAND, Mich. -- February 8, 2013

DowCorning Corp. today reported its financial performance for the fourth
quarter and full year of 2012. Dow Corning recorded sales of $6.12 billion and
net income of $188 million for 2012. Dow Corning’s year-to-date sales and
adjusted net income were down 5 percent and 45 percent, respectively, compared
to 2011 as oversupply, economic volatility and high raw material costs
significantly reduced the company’s profits. Adjusted net income for 2012
excluded charges for asset abandonments and restructuring expenses. Adjusted
net income for 2011 excluded a gain on long-term sales agreements. Additional
information about Dow Corning’s financial results:

J. Donald Sheets, Dow Corning's executive vice president and chief financial
officer (Photo: Busines ...

J. Donald Sheets, Dow Corning's executive vice president and chief financial
officer (Photo: Business Wire)

                            Fourth Quarter Results

  *Sales were $1.48billion, 3 percent lower than last year’s fourth quarter.
  *Adjusted net income was $69 million, 10 percent lower than last year’s
    fourth quarter.
  *Dow Corning’s Hemlock Semiconductor Group joint ventures continued to be
    challenged by significant oversupply in the polysilicon industry and the
    threat of potential duties on its products sold into China.
  *Sales in Europe continued to be significantly lower due to continuing
    economic volatility.

                             Year-to-Date Results

  *Sales were $6.12billion, 5 percent lower than 2011.
  *Adjusted net income was $338 million, 45 percent lower than 2011.


            Q4 2012       Q4 2011    %         2012      2011    %
                                         Change                         Change
Sales (in    $  1.48      $  1.52    -3%       $  6.12   $ 6.43  -5%
billions)
Net income
(Loss) (in   $  (101  )    $  260     -139%     $  188    $ 806   -77%
millions)
Adjusted
net
income*      $  69        $  77      -10%      $  338    $ 613   -45%
(in
millions)
*Adjusted net income is a non-GAAP financial measure which excludes certain
unusual items. The reconciliation between GAAP and non-GAAP measures is shown
in the table following the news release.

Comments from Dow Corning’s Executive  Vice President and Chief Financial
Officer J.DonaldSheets:

  *“Oversupply in the silicone and polycrystalline silicon industries, as
    well as persistently high raw material costs and global trade policy
    instability impacted our financial performance significantly in 2012.
    While we expect these conditions to last well into 2013, Dow Corning’s
    strategy for long-term success is clear and robust, and our foundation is
    financially strong.”
  *“We are taking actions to strengthen our ability to maintain our
    competitive position in the marketplace and enable us to continue to
    invest in developing innovative products for our customers.”
  *“We have a strong product portfolio that includes a mix of world-class,
    highly differentiated products together with a balanced portfolio of
    highly innovative new materials to ensure our long-term success. We also
    continue to aggressively pursue opportunities to increase efficiency and
    reduce costs in our operations.”
  *“The unresolved trade disputes among the U.S., China and Europe are a
    major factor in Hemlock Semiconductor’s business, as the threat of tariffs
    on U.S. polysilicon imported into China has significantly decreased orders
    from China, which is home to one of the largest markets for solar
    polysilicon.”

About Dow Corning

Dow Corning (www.dowcorning.com) provides performance-enhancing solutions to
serve the diverse needs of more than 25,000 customers worldwide. A global
leader in silicones, silicon-based technology and innovation, Dow Corning
offers more than 7,000 products and services via the company’s Dow Corning^®
and XIAMETER^® brands. Dow Corning is equally owned by The Dow Chemical
Company (NYSE:DOW) and Corning, Incorporated (NYSE:GLW). More than half of Dow
Corning’s annual sales are outside the United States.

About Hemlock Semiconductor Group

Hemlock Semiconductor Group (Hemlock Semiconductor) is comprised of several
joint venture companies among Dow Corning Corporation, Shin-Etsu Handotai, and
Mitsubishi Materials Corporation. Hemlock Semiconductor is a leading provider
of polycrystalline silicon and other silicon-based products used in the
manufacturing of semiconductor devices, and solar cells and modules. Hemlock
Semiconductor began its operations in 1961.

Dow Corning Corporation
Selected Financial Information
(in millions of U. S. dollars)
(Unaudited)
                                                           
                                                                   
Consolidated Income Statement Data
                                                                   
                       Three Months Ended December   Twelve Months Ended
                       31,                           December 31,
                       2012            2011          2012          2011
                                                                   
                                                                   
Net Sales              $  1,480.2      $ 1,518.9     $ 6,118.5     $ 6,426.7
                                                                   
Net Income (Loss)
    Attributable       $  (100.7   )   $ 259.7       $ 187.7       $ 806.2
    to Dow Corning
                                                                   
Adjustment for
Asset Abandonments     $  169.5        $ -           $ 169.5       $ -
and
Restructuring^1
                                                                   
Adjustment for
Long-Term Sales        $  -            $ (177.6  )   $ (19.7   )   $ (177.6  )
Contracts^2
                                                                   
Adjustment for         $  -           $ (5.3    )   $ -          $ (15.8   )
AEMC^3, net
                                                                   
Adjusted Net           $  68.8         $ 76.8        $ 337.5       $ 612.8
Income^4

^1 The three and twelve month periods ended December 31, 2012 included an
adjustment for asset abandonments and restructuring charges.

^2 The twelve month period ended December 31, 2012 and the three and twelve
month periods ended December 31, 2011 included adjustments for gains on
long-term sales agreements.

^3 The three and twelve month periods ended December 31, 2011 included a tax
benefit related to Advanced Energy Manufacturing Credits.

^4 Adjusted Net Income is a non-GAAP financial measure which excludes certain
unusual items and which reconciles to Net Income as shown.

                                                      
Consolidated Balance Sheet Data
                                                           
                                       December 31, 2012   December 31, 2011
Assets
                                                           
Current Assets                         $     4,117.3       $     4,873.0
Property, Plant and Equipment, Net           7,553.1             7,380.3
Other Assets                                1,630.5            1,846.5
                                       $     13,300.9      $     14,099.8
                                                           
Liabilities and Equity
                                                           
Current Liabilities                    $     1,513.5       $     2,022.9
Other Liabilities                            8,214.2             8,492.0
Equity                                      3,573.2            3,584.9
                                       $     13,300.9      $     14,099.8

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Contact:

DowCorning Corp.
Jarrod Erpelding, 989.496.1582
Jarrod.Erpelding@dowcorning.com
 
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