On August 29, 2006, the Board of Directors of The Dow Chemical Company ("Dow" or the "Company") approved a plan to shut down a number of assets around the world as the Company continues its drive to improve the competitiveness of its global operations. The shutdowns, which are described in Item 2.06 below, are scheduled to be completed over the next 28 months. As a consequence of these shutdowns, the Company will record a charge in the third quarter of 2006 for costs associated with these exit activities, including severance costs of approximately $90 million, contract termination fees of approximately $60 million, and curtailment costs associated with Dow's defined benefit plans of approximately $70 million. In total, these costs are expected to range from $200 million to $250 million.

All severance costs and contract termination fees will result in future cash expenditures. Curtailment costs will result in future cash expenditures of approximately $30 million.

On August 29, 2006, the Board of Directors approved a plan to shut down a number of assets around the world as the Company continues its drive to improve the competitiveness of its global operations. As a consequence of these shutdowns and other optimization activities, which are scheduled to be completed over the next 28 months, the Company will record a charge in the third quarter of 2006 for asset write-downs and asset write-offs. The charge related to the impairment of these assets, including costs for asbestos abatement and environmental remediation, will range from $350 million to $400 million. The most significant shutdowns will take place at Dow's facilities in Sarnia and Fort Saskatchewan, Canada, and Porto Marghera, Italy. Details of these shutdowns are as follows:

The Dow Chemical Company issued a press release on August 31, 2006, regarding the preceding items. The press release is included below in its entirety.

In Fort Saskatchewan, the Company will shut down its chlor-alkali and direct chlorination ethylene dichloride plants by the end of October 2006. This decision was driven by the substantial capital costs required to maintain long-term operations at the 27 year-old facilities - an investment that could not be justified based on expected rates of return.

In Porto Marghera, Italy, the Company has made the decision to not restart production of the toluene diisocyanate (TDI) facility, which was shut down for planned maintenance in early August. Fundamentals in the TDI business remain weak due to excess global production capacity.

The Company is also writing off obsolete technology assets and capital project spending that has been determined to be of no further value.

"During the past three years, the Company has shut down more than 50 manufacturing facilities across the globe - yielding a significant reduction in structural costs - while continuing to invest in long-term growth," said Liveris. "And that focus on asset optimization will remain sharp, no matter where we are in the business cycle, ensuring that we maintain our competitive edge as we accelerate a strategy focused on dampening cyclicality and driving earnings growth."