8-K

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K
Current Report

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):
July 24, 2003

THE DOW CHEMICAL COMPANY
(Exact name of registrant as specified in its charter)

Delaware	1-3433	38-1285128
(State or other jurisdiction of incorporation or organization)	(Commission file number)	(I.R.S. Employer Identification No.)

2030 DOW CENTER, MIDLAND, MICHIGAN 48674
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: 989-636-1000

Not applicable
(Former name, former address and former fiscal year, if changed since last report)

Item 5.	Other Events.
	The Dow Chemical Company issued a press release on July 24, 2003, announcing results for the second quarter of 2003.
Item 7.	Financial Statements and Exhibits.
	(c)	Exhibits.
		99.1 Press release issued by The Dow Chemical Company on July 24, 2003, announcing results for the second quarter of 2003.

SIGNATURE

        Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	THE DOW CHEMICAL COMPANY Registrant
Date: July 24, 2003
		/s/  FRANK H. BROD Frank H. Brod Vice President and Controller

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press release issued by The Dow Chemical Company on July 24, 2003, announcing results for the second quarter of 2003.

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SIGNATURE
EXHIBIT INDEX

EX-99.1

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EXHIBIT 99.1

July 24, 2003

Dow Reports Earnings Improvement of 65%
for the Second Quarter of 2003

Second Quarter of 2003 Highlights

•

Sales were $8.2 billion, an increase of 14 percent from second quarter 2002 sales of $7.3 billion, with a 16 percent increase in price partially offset by a 2 percent decrease in volume.



•

EBIT* was $799 million, compared with $539 million in the second quarter of 2002, with substantial gains in almost all operating segments.



•

Dow reported earnings of $0.43 per share, a 65 percent improvement from $0.26 per share a year ago.



•

Substantial cost reductions and improved prices helped to offset a $700 million increase in feedstock and energy costs, compared to a year ago.

	3 Months Ended June 30				6 Months Ended June 30
(In millions, except for per share amounts)
	2003		2002		2003		2002
Net Sales	$	8,242	$	7,529	$	16,323	$	13,564
Earnings before Interest, Income Taxes and Minority Interests (EBIT*)	$	799	$	539	$	1,143	$	782
Net Income	$	393	$	238	$	469	$	343
Earnings Per Common Share	$	0.43	$	0.26	$	0.51	$	0.37
Before Cumulative Effect of Changes in Accounting Principles:
Net Income	$	393	$	238	$	478	$	276
Earnings Per Common Share	$	0.43	$	0.26	$	0.52	$	0.30

*

For additional information, see Supplemental Information following the text of this release. See segment information at the end of this release for reconciliation between EBIT and "Net Income Available for Common Stockholders".

Review of Second Quarter Results

        The Dow Chemical Company reported sales of $8.2 billion for the second quarter of 2003, compared with $7.3 billion a year ago. Earnings before interest, income taxes and minority interests (EBIT) were $799 million. Net income was $393 million. Earnings per share were $0.43, compared with $0.26 per share a year ago, an increase of 65 percent.

        "In spite of the huge challenges faced by industry in the second quarter—persistently high feedstock and energy costs and global geopolitical and economic uncertainty—Dow has responded well," said J. Pedro Reinhard, executive vice president and chief financial officer. "This is primarily due to the Company's focus on the financial discipline implemented since the beginning of the year. Excellent progress has been made on expense reduction, working capital management and capital spending control."

        Sales were up 14 percent from the second quarter of 2002, with a 16 percent increase in price and a 2 percent decrease in volume. Second quarter volume did not show its typical seasonal improvement due to overall economic uncertainty, particularly in Asia Pacific. Feedstock and energy costs remained at high levels, increasing by around $700 million in the second quarter, compared to a year ago. Contributing to the Company's earnings improvement, Agricultural Sciences posted record results for the quarter. Additionally, earnings from the Company's joint ventures were up, compared to a year ago.

        Performance Plastics and Performance Chemicals continued to perform well under adverse conditions. EBIT for these two segments improved by 12 percent as a result of improved prices and cost control efforts, despite higher feedstock and energy costs. Although construction activity in the United States was delayed due to a wet spring, causing volume to be flat, sales improved in Fabricated Products due to increased pricing. Dow Automotive faced challenging industry conditions as well, but volume was down only 3 percent as this business benefited from its strong positions in North America and Europe. Emulsion Polymers posted the strongest sales gains in the Performance Chemicals segment due to pricing improvement and the leveraging of its global position with customers in the paper coating industry.

        Agricultural Sciences had a record quarter, with sales increasing 5 percent from the second quarter of 2002. Sales gains were achieved in most geographic areas. Strong increases in sales came from products acquired in recent years. Insecticides growth was led by strong performance for spinosad insect control products. Overall EBIT improved 23 percent from the second quarter of 2002, showing the benefit of restructuring efforts undertaken in recent years.

        Plastics sales increased 11 percent with higher prices more than offsetting reduced volume. Polyethylene volume was down in North America and Latin America but was slightly up in Europe and Asia Pacific. Chemicals sales rose, in spite of reduced volume, because of significant price increases in caustic soda, vinyl chloride monomer and ethylene glycol. Combined EBIT in the basics segments more than doubled from a year ago, as cost control and higher prices in most businesses helped recover some of the margin lost in prior periods to higher feedstock and energy costs. Additionally, much of the increase in the Company's equity earnings was reported in the basics segments, reflecting the benefit of Dow's global position in advantaged feedstock locations.

        According to Reinhard, "Dow is focused on the factors which can be controlled. The organization has taken progressive steps for disciplined cost control, capital spending and working capital control. This commitment will continue. Under the current challenging circumstances, we are taking it quarter by quarter. We will continue to focus on implementation of the financial improvement program and working with our customers. Looking ahead to the third quarter, the organization is committed to improve its financial performance compared to last year."

Upcoming Webcast:

•

Dow will host a live Webcast of its second quarter earnings conference call with investors to discuss its results, business outlook and other matters today at 10 a.m. EDT on www.dow.com.

About Dow

        Dow is a leading science and technology company that provides innovative chemical, plastic and agricultural products and services to many essential consumer markets. With annual sales of $28 billion, Dow serves customers in more than 170 countries and a wide range of markets that are vital to human progress, including food, transportation, health and medicine, personal and home care, and building and construction, among others. Committed to the principles of sustainable development, Dow and its approximately 50,000 employees seek to balance economic, environmental and social responsibilities.

        Note: The forward-looking statements contained in this document involve risks and uncertainties that may affect the Company's operations, markets, products, services, prices and other factors as discussed in filings with the Securities and Exchange Commission. 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.

Supplemental Information

        Dow uses "Earnings before Interest, Income Taxes and Minority Interests" (EBIT) to measure the financial performance of its global business units and for reporting the results of its operating segments. This measure includes all operating items relating to the businesses and excludes items that principally apply to the Company as a whole. EBIT for the total Company measures the aggregate performance of the business units. Dow believes EBIT is useful to help investors assess the results of Dow's business operations.

        The following tables show the impact of certain items recorded in the three-month and six-month periods ended June 30, 2003 and 2002.

Description of Certain Items Affecting Results:
Second Quarter of 2002

        Results in the second quarter of 2002 were unfavorably impacted by additional pretax merger-related expenses of $10 million and a $10 million pretax restructuring charge (Dow's share) recorded by UOP LLC, Dow's joint venture with Honeywell.

	Pretax Impact (1)				Impact on Net Income (2)
	Three Months Ended				Three Months Ended
In millions	June 30, 2003	June 30, 2002			June 30, 2003	June 30, 2002
Merger-related expenses and restructuring	—	$	(10	)	—	$	(7	)
UOP restructuring	—		(10	)	—		(7	)
Total	—	$	(20	)	—	$	(14	)

Year-to-Date 2003 and 2002

        In the first half of 2003, earnings were impacted by an after-tax charge of $9 million related to the adoption of Statement of Financial Accounting Standards (SFAS) No. 143, "Accounting for Asset Retirement Obligations."

        Results in the first half of 2002 were unfavorably impacted by additional pretax merger-related expenses of $23 million, pretax goodwill impairment losses of $16 million related to investments in nonconsolidated affiliates, a $10 million pretax restructuring charge (Dow's share) recorded by UOP LLC, and a net after-tax gain of $67 million related to the adoption of two new accounting standards (SFAS No. 141, "Business Combinations," and SFAS No. 142, "Goodwill and Other Intangible Assets").

	Pretax Impact (1)				Impact on Net Income (2)
	Six Months Ended				Six Months Ended
In millions	June 30, 2003	June 30, 2002			June 30, 2003			June 30, 2002
Merger-related expenses and restructuring	—	$	(23	)		—		$	(15	)
Goodwill impairment losses in nonconsolidated affiliates	—		(16	)		—			(16	)
UOP restructuring	—		(10	)		—			(7	)
Cumulative effect of changes in accounting principles	—		—		$	(9	)		67
Total	—	$	(49	)	$	(9	)	$	29

(1)

Impact on "Income before Income Taxes and Minority Interests"

(2)

Impact on "Net Income Available for Common Stockholders"

THE DOW CHEMICAL COMPANY — 2Q03 EARNINGS
FINANCIAL STATEMENTS (Note A)

The Dow Chemical Company and Subsidiaries
Consolidated Statements of Income

		Three Months Ended			Six Months Ended
In millions, except per share amounts (Unaudited)		June 30, 2003	June 30, 2002		June 30, 2003		June 30, 2002
Net Sales		$8,242	$7,259		$16,323		$13,564
	Cost of sales	6,970	6,031		14,133		11,386
	Research and development expenses	246	272		483		522
	Selling, general and administrative expenses	354	405		709		796
	Amortization of intangibles	15	19		30		33
	Merger-related expenses and restructuring	—	10		—		23
	Equity in earnings (losses) of nonconsolidated affiliates	90	21		129		(5	)
	Sundry income (expense) — net	52	(4	)	46		(17	)
	Interest income	18	14		38		30
	Interest expense and amortization of debt discount	207	188		422		377
Income before Income Taxes and Minority Interests		610	365		759		435
	Provision for income taxes	186	111		233		135
	Minority interests' share in income	31	16		48		24
Income before Cumulative Effect of Changes in Accounting Principles		393	238		478		276
	Cumulative effect of changes in accounting principles (Note B)	—	—		(9	)	67
Net Income Available for Common Stockholders		$393	$238		$469		$343
Share Data
	Earnings before cumulative effect of changes in accounting principles per common share —    basic	$0.43	$0.26		$0.52		$0.30
	Earnings per common share — basic	$0.43	$0.26		$0.51		$0.38
	Earnings before cumulative effect of changes in accounting principles per common share —    diluted	$0.43	$0.26		$0.52		$0.30
	Earnings per common share — diluted	$0.43	$0.26		$0.51		$0.37
	Common stock dividends declared per share of common stock	$0.335	$0.335		$0.67		$0.67
	Weighted-average common shares outstanding — basic	917.3	910.7		916.0		909.0
	Weighted-average common shares outstanding — diluted	921.9	919.3		921.8		917.2
Depreciation		$426	$402		$859		$790
Capital Expenditures		$272	$391		$495		$688

Notes to the Consolidated Financial Statements:

Note A:	The unaudited interim consolidated financial statements reflect all adjustments which, in the opinion of management, are considered necessary for a fair presentation of the results for the periods covered. Certain reclassifications of prior year amounts have been made to conform to current year presentation. These statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2002. Except as otherwise indicated by the context, the terms "Company" and "Dow" as used herein mean The Dow Chemical Company and its consolidated subsidiaries.
Note B:	On January 1, 2002, the Company adopted SFAS No. 141, "Business Combinations," and SFAS No. 142, "Goodwill and Other Intangible Assets." The cumulative effect of adoption was a net gain of $67 million and was primarily due to the write-off of negative goodwill related to BSL, partially offset by the write-off of unrelated goodwill impairments.
	On January 1, 2003, the Company adopted SFAS No. 143, "Accounting for Asset Retirement Obligations." The cumulative effect of adoption was a charge of $9 million (net of tax of $5 million).

The Dow Chemical Company and Subsidiaries
Consolidated Balance Sheets

In millions (Unaudited)			June 30, 2003		Dec. 31, 2002
Assets
Current Assets
	Cash and cash equivalents		$2,276		$1,484
	Marketable securities and interest-bearing deposits		71		89
	Accounts and notes receivable:
		Trade (net of allowance for doubtful receivables — 2003: $125; 2002: $127)	3,260		3,116
		Other	2,261		2,369
	Inventories		4,235		4,208
	Deferred income tax assets — current		147		109
	Total current assets		12,250		11,375
Investments
	Investment in nonconsolidated affiliates		1,721		1,565
	Other investments		1,823		1,689
	Noncurrent receivables		306		577
	Total investments		3,850		3,831
Property
	Property		39,101		37,934
	Less accumulated depreciation		25,447		24,137
	Net property		13,654		13,797
Other Assets
	Goodwill		3,219		3,189
	Other intangible assets (net of accumulated amortization — 2003: $383; 2002: $349)		594		613
	Deferred income tax assets — noncurrent		3,903		3,776
	Asbestos-related insurance receivables — noncurrent		1,350		1,489
	Deferred charges and other assets		1,677		1,492
	Total other assets		10,743		10,559
Total Assets			$40,497		$39,562
Liabilities and Stockholders' Equity
Current Liabilities
	Notes payable		$586		$580
	Long-term debt due within one year		1,260		797
	Accounts payable:
		Trade	2,578		2,834
		Other	2,050		1,789
	Income taxes payable		220		202
	Deferred income tax liabilities — current		101		30
	Dividends payable		328		326
	Accrued and other current liabilities		2,464		2,298
	Total current liabilities		9,587		8,856
Long-Term Debt			11,636		11,659
Other Noncurrent Liabilities
	Deferred income tax liabilities — noncurrent		1,093		994
	Pension and other postretirement benefits — noncurrent		3,818		3,775
	Asbestos-related liabilities — noncurrent		1,913		2,072
	Other noncurrent obligations		3,245		3,214
	Total other noncurrent liabilities		10,069		10,055
Minority Interest in Subsidiaries			355		366
Preferred Securities of Subsidiaries			1,000		1,000
Stockholders' Equity
	Common stock		2,453		2,453
	Additional paid-in capital		—		—
	Unearned ESOP shares		(51	)	(61	)
	Retained earnings		9,352		9,520
	Accumulated other comprehensive loss		(1,881	)	(2,097	)
	Treasury stock at cost		(2,023	)	(2,189	)
	Net stockholders' equity		7,850		7,626
Total Liabilities and Stockholders' Equity			$40,497		$39,562

See Notes to the Consolidated Financial Statements.

The Dow Chemical Company and Subsidiaries
Operating Segments and Geographic Areas

		Three Months Ended				Six Months Ended
In millions (Unaudited)		June 30, 2003		June 30, 2002		June 30, 2003		June 30, 2002
Operating segment sales
	Performance Plastics	$1,908		$1,835		$3,755		$3,554
	Performance Chemicals	1,404		1,302		2,775		2,561
	Agricultural Sciences	927		886		1,695		1,531
	Plastics	1,877		1,688		3,851		3,116
	Chemicals	1,048		861		2,097		1,546
	Hydrocarbons and Energy	985		583		1,944		1,068
	Unallocated and Other	93		104		206		188
	Total	$8,242		$7,259		$16,323		$13,564
Operating segment EBIT (1)
	Performance Plastics	$163		$145		$299		$392
	Performance Chemicals	185		165		307		363
	Agricultural Sciences	233		189		363		215
	Plastics	159		106		296		44
	Chemicals	101		(15	)	135		(68	)
	Hydrocarbons and Energy	8		10		(13	)	41
	Unallocated and Other	(50	)	(61	)	(244	)	(205	)
	Total	$799		$539		$1,143		$782
Geographic area sales
	United States	$3,395		$3,025		$6,498		$5,624
	Europe	2,873		2,359		5,870		4,514
	Rest of World	1,974		1,875		3,955		3,426
	Total	$8,242		$7,259		$16,323		$13,564

(1)

Dow uses "Earnings before Interest, Income Taxes and Minority Interests" ("EBIT") to measure the financial performance of its global business units and for reporting the results of its operating segments. This measure includes all operating items relating to the businesses and excludes items that principally apply to the Company as a whole. EBIT for the total Company measures the aggregate performance of the business units. Dow believes EBIT is useful to help investors assess the results of Dow's business operations. The reconciliation between EBIT and "Net Income Available for Common Stockholders" is shown below:

	Three Months Ended		Six Months Ended
	June 30, 2003	June 30, 2002	June 30, 2003		June 30, 2002
EBIT	$799	$539	$1,143		$782
Interest income	18	14	38		30
Interest expense and amortization of debt discount	207	188	422		377
Provision for income taxes	186	111	233		135
Minority interests' share in income	31	16	48		24
Cumulative effect of changes in accounting principles	—	—	(9	)	67
Net Income Available for Common Stockholders	$393	$238	$469		$343

Sales Volume and Price by Operating Segment and Geographic Area

		Three Months Ended June 30, 2003						Six Months Ended June 30, 2003
Percentage change from prior year
		Volume		Price		Total		Volume		Price		Total
Operating segments
	Performance Plastics	(8	)%	12	%	4	%	(4	)%	10	%	6	%
	Performance Chemicals	(2	)%	10	%	8	%	1	%	7	%	8	%
	Agricultural Sciences	—		5	%	5	%	6	%	5	%	11	%
	Plastics	(11	)%	22	%	11	%	(6	)%	30	%	24	%
	Chemicals	(6	)%	28	%	22	%	4	%	32	%	36	%
	Hydrocarbons and Energy	42	%	27	%	69	%	39	%	43	%	82	%
	Total	(2	)%	16	%	14	%	2	%	18	%	20	%
Geographic areas
	United States	(2	)%	14	%	12	%	2	%	14	%	16	%
	Europe	(1	)%	23	%	22	%	1	%	29	%	30	%
	Rest of World	(5	)%	10	%	5	%	2	%	13	%	15	%
	Total	(2	)%	16	%	14	%	2	%	18	%	20	%

End of Dow Chemical 2Q03 Earnings Release

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Dow Reports Earnings Improvement of 65% for the Second Quarter of 2003