The economic prosperity of a city, state or nation is largely dependent on the amount, and type, of business being conducted there. Payroll, taxes and corporate purchases all contribute significantly to economic health — and, indirectly to infrastructure, civic institutions and culture. In this section we have tried to share some key indicators of our impact on the Texas Operations Site community as well as of the economic performance of the site.

Here are some key indicators of our impact on the local community:

Capital Expenditures The money spent on capital expenditures at Texas Operations fell in 2003 due to overall economic conditions.

Production A production record for the site was established in 2003, surpassing our previous best year in 2000 by close to four percent. Production increased in 2003 even in a volatile global economy, with higher feedstock and energy prices, and variable consumer demand. Even with these factors the cumulative production was 10 percent higher than last year's production.

Local Purchasing As a competitive, global enterprise, we have a responsibility to actively manage our costs to a minimum. For certain products this means consolidating purchases and buying in great volume independent of the location of the supplier. However, there are other products and services that by their very nature will be bought locally, such as contract labor and certain maintenance activities. Dow's local purchasing department works closely with local suppliers to educate them about our strategic purchasing requirements. Total Payroll The total payroll for employees of Texas Operations has increased more than 29 percent from 1999 to 2003. The data is not currently available for 1994 - 1997.

Taxes Taxes paid by a company to the various authorities are an important part of our economic "footprint" in a country. In 2003, Texas Operations paid approximately $69.5 million in state and local taxes. This includes property, sales/use, franchise, income, excise and other miscellaneous taxes.