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Press release from Business Wire

Dow Corning Reports Sales and Profits for First Quarter of 2012

Tuesday, May 01, 2012

Dow Corning Reports Sales and Profits for First Quarter of 201208:30 EDT Tuesday, May 01, 2012 MIDLAND, Mich. (Business Wire) -- Dow Corning Corp. today announced its financial performance for the first quarter of 2012. Dow Corning recorded sales of $1.52 billion and net income $70.5 million. Both sales and net income were lower than the first quarter of 2011. Additional information about Dow Corning's financial results: First Quarter Results Sales were $1.52 billion, 4 percent lower than last year's first quarter. While demand improved slightly over last year, prices were depressed globally. Price pressure coupled with high raw material costs resulted in a decline in product margins. Net income was $70.5 million, 61 percent lower than last year's first quarter.                   Q1 2012   Q1 2011   % Change Sales (in billions)   $ 1.52   $ 1.58   -4 % Net income (in millions)   $ 71   $ 179   -61 % Adjusted net income* (in millions)   $ 71   $ 175   -60 % *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. Donald Sheets: “As expected, this was a difficult quarter due to oversupply in both the silicone and polycrystalline silicon industries combined with rising raw materials and energy costs.” “While global demand continues to grow for our silicone-based materials, significant pricing pressure is impacting our performance.” “Our Hemlock Semiconductor Group joint ventures will continue to be challenged by the oversupplied polycrystalline silicon industry throughout 2012.” “As a cost-competitive manufacturer in both the silicone and polycrystalline silicon segments, we are well positioned to compete during this period of oversupply.” “Protecting our competitive cost position at both Dow Corning and Hemlock Semiconductor remains essential to our long-term success, and we are aggressively pursuing opportunities to increase efficiency and reduce costs in our operations.” “Dow Corning continues to pioneer new technologies with a robust innovation portfolio that will drive margin growth in the future.” 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 CorporationSelected Financial Information(in millions of U. S. dollars)(Unaudited)     Consolidated Income Statement Data   Three Months Ended March 31,20122011     Net Sales$1,522.4$1,579.3   Net IncomeAttributable to Dow Corning$70.5$178.7   Adjustment for AEMC1, net$-$(3.3)   Adjusted Net Income2$70.5$175.4       1The period ending March 31, 2011 included a tax benefit related to Advanced Energy Manufacturing Credits, net of thenoncontrolling interests' share.2Adjusted 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   March 31, 2012December 31, 2011Assets   Current Assets$4,761.6$4,873.0Property, Plant and Equipment, Net7,565.27,380.3Other Assets   1,163.1   1,317.9   $13,489.9$13,571.2     Liabilities and Equity   Current Liabilities$1,914.3$2,022.9Other Liabilities7,918.17,963.4Equity   3,657.5   3,584.9   $13,489.9$13,571.2   Dow CorningJarrod Erpelding, 989.496.1582Jarrod.Erpelding@dowcorning.com