MIDLAND,
Mich., April 21, 2022 /PRNewswire/ --
FINANCIAL HIGHLIGHTS
- GAAP earnings per share (EPS) was $2.11; Operating EPS¹ was $2.34, compared to $1.36 in the year-ago period. Operating EPS
excludes certain items in the quarter, totaling $0.23 per share, primarily due to asset-related
charges.
- Net sales were $15.3 billion, up
28% versus the year-ago period, reflecting gains in all operating
segments, businesses and regions. Sequentially, net sales were up
6%, driven by gains in Performance Materials & Coatings and
Packaging & Specialty Plastics.
- Local price increased 28% versus the year-ago period, with
gains in all operating segments, businesses and regions.
Sequentially, local price increased 2%, primarily driven by
silicones and polyurethanes.
- Volume increased 3% versus the year-ago period, with gains in
all operating segments and in the U.S. & Canada and Latin
America. Sequentially, volume was also up 5%, reflecting
strong demand for silicones and polyethylene applications.
- Equity earnings were $174
million, down $50 million from
the year-ago period, primarily driven by impacts from planned
maintenance activity at Sadara. Equity earnings were down
$50 million from the prior quarter
driven by lower polyethylene and MEG margins in Asia Pacific.
- GAAP Net Income was $1.6 billion.
Operating EBIT1 was $2.4
billion, up $865 million from
the year-ago period with gains in all operating segments.
Sequentially, operating EBIT increased 7%, led by improvements in
Performance Materials & Coatings and Industrial Intermediates
& Infrastructure as higher prices and lower planned maintenance
activity more than offset higher raw material and energy
costs.
- Cash provided by operating activities – continuing operations
was $1.6 billion, up $1.8 billion2 year-over-year due to
increased earnings and an elective pension contribution in the
year-ago period. Sequentially, cash provided by operating
activities decreased $945 million as
higher dividends from joint ventures were more than offset by
working capital on increased sales and raw material costs. Free
cash flow1 was $1.3
billion.
- Returns to shareholders totaled $1.1
billion in the quarter, comprised of $513 million in dividends and $600 million in share repurchases.
SUMMARY FINANCIAL RESULTS
|
Three Months Ended Mar 31
|
Three Months
Ended Dec 31
|
In millions,
except per share amounts
|
1Q22
|
1Q21
|
vs.
SQLY
[B /
(W)]
|
4Q21
|
vs.
PQ
[B /
(W)]
|
Net
Sales
|
$15,264
|
$11,882
|
$3,382
|
$14,364
|
$900
|
GAAP Income, Net of
Tax
|
$1,552
|
$1,006
|
$546
|
$1,761
|
$(209)
|
Operating
EBIT¹
|
$2,419
|
$1,554
|
$865
|
$2,265
|
$154
|
Operating EBIT
Margin¹
|
15.9%
|
13.1%
|
280 bps
|
15.8%
|
10 bps
|
Operating
EBITDA¹
|
$3,171
|
$2,271
|
$900
|
$2,920
|
$251
|
GAAP Earnings Per
Share
|
$2.11
|
$1.32
|
$0.79
|
$2.32
|
$(0.21)
|
Operating Earnings
Per Share¹
|
$2.34
|
$1.36
|
$0.98
|
$2.15
|
$0.19
|
Cash Provided by
(Used for)
Operating Activities – Cont. Ops
|
$1,612
|
$(228)
|
$1,840
|
$2,557
|
$(945)
|
|
|
1.
|
Op. Earnings Per Share,
Op. EBIT, Op. EBIT Margin, Op. EBITDA, and Free Cash Flow are
non-GAAP measures. See page 6 for further discussion.
|
2.
|
Cash Provided by
Operating Activities – Continuing Operations includes a $1 billion
elective pension contribution in the first quarter of
2021.
|
®TM Trademark of The
Dow Chemical Company ("Dow") or an affiliated company of
Dow
|
CEO QUOTE
Jim Fitterling, chairman and
chief executive officer, commented on the quarter:
"Entering our company's 125th year, Team Dow
delivered top- and bottom-line growth sequentially and
year-over-year in the first quarter, demonstrating the advantage of
our differentiated portfolio, feedstock flexibility and continued
focus on disciplined execution. Despite higher energy costs, we
captured healthy end-market demand and achieved solid volume
growth, price gains and margin expansion.
"In addition, today we published our annual benchmarking that
demonstrates Dow delivered on our financial targets with
top-quartile EBITDA margins, return on capital, free cash flow
yield, shareholder remuneration, and debt reduction. We also
recently announced a new $3 billion share repurchase program –
a direct result of our performance as well as our balanced and
disciplined capital allocation approach."
SEGMENT HIGHLIGHTS
Packaging & Specialty Plastics
|
Three Months Ended March 31
|
Three Months Ended
December 31
|
In millions,
except margin
percentages
|
1Q22
|
1Q21
|
vs.
SQLY
[B /
(W)]
|
4Q21
|
vs.
PQ
[B /
(W)]
|
Net
Sales
|
$7,627
|
$6,082
|
$1,545
|
$7,189
|
$438
|
Operating
EBIT
|
$1,234
|
$1,228
|
$6
|
$1,442
|
$(208)
|
Operating EBIT
Margin
|
16.2
%
|
20.2%
|
(400)
bps
|
20.1%
|
(390)
bps
|
Equity
Earnings
|
$110
|
$106
|
$4
|
$130
|
$(20)
|
Packaging & Specialty Plastics segment net sales in the
quarter were $7.6 billion, up
25% versus the year-ago period. Local price increased 24%
year-over-year with gains in both businesses and all regions.
Continued strong end-market demand drove a 4% year-over-year volume
increase, with gains in energy sales, olefins, and polyethylene,
primarily in the U.S. & Canada. Currency decreased net sales by 3%. On
a sequential basis, the segment delivered a 6% net sales increase,
driven by robust demand in both businesses, including polyethylene
demand, across industrial and consumer packaging applications.
Equity earnings were $110 million, up $4 million
compared to the year-ago period. For the principal joint ventures,
gains from increased elastomer margins at the Thai joint ventures
were offset by lower integrated polyethylene margins at Sadara and
the Kuwait joint ventures. On a
sequential basis, equity earnings decreased by $20 million due
to higher raw material costs impacting polyethylene margins at
the principal joint ventures.
Operating EBIT was $1.2 billion, up $6
million versus the year-ago period, with Op. EBIT
margins down 400 basis points year-over-year, as price
increases in the U.S. & Canada
and Latin America were partly
offset by rising raw materials and energy costs in all regions.
Sequentially, Op. EBIT was down $208 million and Op. EBIT
margins declined by 390 basis points, primarily due to higher
raw material and energy costs in Europe.
Packaging and Specialty Plastics business delivered higher
net sales versus the year-ago period, led by local price gains in
all regions as well as in industrial & consumer packaging and
flexible food & beverage packaging applications. Volumes
declined slightly year-over-year, as growth in the U.S. &
Canada was more than offset by
declines in Asia Pacific.
Sequentially, the business increased revenue on volume gains in all
regions. Price increases in functional polymers were more than
offset by price declines in polyethylene.
Hydrocarbons & Energy business delivered a net sales
increase compared to the year-ago period, driven primarily by
higher local prices in olefins and aromatics. Sequentially, sales
increased due to higher olefin volume and price, primarily in
Europe, the Middle East, Africa and India.
Industrial Intermediates & Infrastructure
|
Three Months Ended March 31
|
Three Months Ended
December 31
|
In millions,
except margin
percentages
|
1Q22
|
1Q21
|
vs.
SQLY
[B /
(W)]
|
4Q21
|
vs.
PQ
[B /
(W)]
|
Net
Sales
|
$4,524
|
$3,607
|
$917
|
$4,548
|
$(24)
|
Operating
EBIT
|
$661
|
$326
|
$335
|
$595
|
$66
|
Operating EBIT
Margin
|
14.6%
|
9.0%
|
560 bps
|
13.1%
|
150 bps
|
Equity
Earnings
|
$62
|
$115
|
$(53)
|
$90
|
$(28)
|
Industrial Intermediates & Infrastructure segment net sales
in the quarter were $4.5 billion, up 25% versus the year-ago
period. Local price improved 29% year-over-year with gains in both
businesses and in all regions. Currency decreased sales by 5%.
Volume was up 1% year-over-year as improved supply availability
from the impacts of Winter Storm Uri
in the prior year were offset by planned maintenance activity at
Sadara. On a sequential basis, net sales were down 1%, as local
price gains in both businesses were offset by the lower supply
availability from Sadara.
Equity earnings were $62 million, down $53 million
compared to the year-ago period due to lower supply availability
from planned maintenance activity at Sadara. On a sequential basis,
equity earnings decreased by $28 million due to lower MEG
margins.
Operating EBIT was $661 million, an increase of
$335 million compared to the year-ago period, primarily due to
strong pricing momentum in both businesses, driving Op. EBIT
margins up 560 basis points year-over-year. Sequentially,
Op. EBIT was up $66 million, and Op. EBIT margins
improved by 150 basis points, as strong prices and lower
planned maintenance activity offset pressure from higher raw
material and energy costs.
Polyurethanes & Construction Chemicals business
delivered higher net sales compared to the year-ago period, driven
by local price gains in all regions and across all key value
chains. Volume declined year-over-year, primarily due to the lower
supply availability from Sadara. Sequentially, net sales declined
as local price gains and strong demand for construction and
industrial applications were more than offset by the lower supply
availability from Sadara due to planned maintenance activity.
Industrial Solutions business delivered increased net sales
year-over-year, with local price gains in all regions. Volume
also increased globally, driven by strong demand in industrial,
agriculture and coatings markets, as well as improved supply
availability from the impacts of Winter
Storm Uri in the year-ago period. Sequential net sales were
flat as local price gains and demand growth in the pharmaceutical,
mobility and home and industrial cleaning end-markets were offset
by the lower supply availability from Sadara.
Performance Materials & Coatings
|
Three Months Ended March 31
|
Three Months Ended
December 31
|
In millions,
except margin
percentages
|
1Q22
|
1Q21
|
vs.
SQLY
[B /
(W)]
|
4Q21
|
vs.
PQ
[B /
(W)]
|
Net
Sales
|
$3,049
|
$2,123
|
$926
|
$2,558
|
$491
|
Operating
EBIT
|
$595
|
$62
|
$533
|
$295
|
$300
|
Operating EBIT
Margin
|
19.5%
|
2.9%
|
1,660
bps
|
11.5%
|
800 bps
|
Equity
Earnings
|
$3
|
$2
|
$1
|
$2
|
$1
|
Performance Materials & Coatings segment net sales in the
quarter were $3 billion, up 44% versus the year-ago period.
Local price increased 39% year-over-year, with gains in both
businesses and in all regions. Volume increased 8% year-over-year
on stronger demand for silicones and coatings applications combined
with improved supply availability from the impact of Winter Storm Uri in the year-ago period.
Currency decreased net sales by 3%. On a sequential basis, net
sales were up 19% with local price gains in both businesses. Volume
increased sequentially due to strong consumer demand and increased
supply availability of siloxanes upon the completion of planned
maintenance activity in the prior quarter.
Operating EBIT was $595 million, compared to
$62 million in the year-ago period, as Op. EBIT margins
increased 1,660 basis points due to strong price gains and
robust demand for both silicones and coatings offerings.
Sequentially, Op. EBIT improved $300 million and Op. EBIT
margins improved 800 basis points due to local price gains and
lower impact from planned maintenance activity.
Consumer Solutions business delivered higher net sales
year-over year, with local price gains in all regions and
applications. Volume also improved across all regions, driven by
improved siloxane supply and strong demand for personal care
applications. Sequentially, net sales were up with increases in
local price and volume. Improved supply availability of siloxanes
versus the prior quarter enabled the business to capture stronger
demand across all major end-markets.
Coatings & Performance Monomers business delivered
increased net sales compared to the year-ago period, with local
price gains in all regions. Volume increased year-over-year on
improved supply availability of monomers from the impact of
Winter Storm Uri in the year-ago
period. Sequentially, the business delivered flat sales as local
price gains for architectural coatings were offset by lower
monomers volumes due to maintenance activity.
OUTLOOK
"Looking ahead, we see strong demand across our end-markets,"
said Fitterling. "While the geopolitical environment remains
dynamic, our global scale, cost-advantaged positions, and
industry-leading feedstock and derivative flexibility continue to
enable resilient financial and operating performance. At the same
time, we are advancing our strategy to decarbonize and grow
underlying earnings by more than $3 billion in the transition
to a more sustainable world. Dow is well-positioned to achieve
mid-cycle earnings above pre-pandemic levels as we capture
increasing demand for low-carbon, sustainable and circular
innovations."
Conference Call
Dow will host a live webcast of its first quarter earnings
conference call with investors to discuss its results, business
outlook and other matters today at 8:00 a.m.
ET. The webcast and slide presentation that accompany the
conference call will be posted on the events and presentations page
of investors.dow.com.
About Dow
Dow (NYSE: DOW) combines global breadth; asset integration and
scale; focused innovation and materials science expertise; leading
business positions; and environmental, social and governance (ESG)
leadership to achieve profitable growth and deliver a sustainable
future. The Company's ambition is to become the most innovative,
customer centric, inclusive and sustainable materials science
company in the world. Dow's portfolio of plastics, industrial
intermediates, coatings and silicones businesses delivers a broad
range of differentiated, science-based products and solutions for
its customers in high-growth market segments, such as packaging,
infrastructure, mobility and consumer applications. Dow operates
104 manufacturing sites in 31 countries and employs approximately
35,700 people. Dow delivered sales of approximately $55 billion in 2021. References to Dow or the
Company mean Dow Inc. and its subsidiaries. For more information,
please visit www.dow.com or follow @DowNewsroom on
Twitter.
Cautionary Statement about
Forward-Looking Statements
Certain statements in this report are "forward-looking
statements" within the meaning of the federal securities laws,
including Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended.
Such statements often address expected future business and
financial performance, financial condition, and other matters, and
often contain words or phrases such as "anticipate," "believe,"
"estimate," "expect," "intend," "may," "opportunity," "outlook,"
"plan," "project," "seek," "should," "strategy," "target," "will,"
"will be," "will continue," "will likely result," "would" and
similar expressions, and variations or negatives of these words or
phrases.
Forward-looking statements are based on current assumptions and
expectations of future events that are subject to risks,
uncertainties and other factors that are beyond Dow's control,
which may cause actual results to differ materially from those
projected, anticipated or implied in the forward-looking statements
and speak only as of the date the statements were made. These
factors include, but are not limited to: sales of Dow's products;
Dow's expenses, future revenues and profitability; the continuing
global and regional economic impacts of the coronavirus disease
2019 ("COVID-19") pandemic and other public health-related risks
and events on Dow's business; any sanctions, export restrictions,
supply chain disruptions or increased economic uncertainty related
to the ongoing conflict between Russia and Ukraine; capital requirements and need for and
availability of financing; unexpected barriers in the development
of technology, including with respect to Dow's contemplated capital
and operating projects; Dow's ability to realize its commitment to
carbon neutrality on the contemplated timeframe; size of the
markets for Dow's products and services and ability to compete in
such markets; failure to develop and market new products and
optimally manage product life cycles; the rate and degree of market
acceptance of Dow's products; significant litigation and
environmental matters and related contingencies and unexpected
expenses; the success of competing technologies that are or may
become available; the ability to protect Dow's intellectual
property in the United States and
abroad; developments related to contemplated restructuring
activities and proposed divestitures or acquisitions such as
workforce reduction, manufacturing facility and/or asset closure
and related exit and disposal activities, and the benefits and
costs associated with each of the foregoing; fluctuations in energy
and raw material prices; management of process safety and product
stewardship; changes in relationships with Dow's significant
customers and suppliers; changes in consumer preferences and
demand; changes in laws and regulations, political conditions or
industry development; global economic and capital markets
conditions, such as inflation, market uncertainty, interest and
currency exchange rates, and equity and commodity prices; business
or supply disruptions; security threats, such as acts of sabotage,
terrorism or war including the ongoing conflict between
Russia and Ukraine; weather events and natural disasters;
disruptions in Dow's information technology networks and systems;
and risks related to Dow's separation from DowDuPont Inc. such as
Dow's obligation to indemnify DuPont de Nemours, Inc. and/or
Corteva, Inc. for certain liabilities.
Where, in any forward-looking statement, an expectation or
belief as to future results or events is expressed, such
expectation or belief is based on the current plans and
expectations of management and expressed in good faith and believed
to have a reasonable basis, but there can be no assurance that the
expectation or belief will result or be achieved or accomplished. A
detailed discussion of principal risks and uncertainties which may
cause actual results and events to differ materially from such
forward-looking statements is included in the section titled "Risk
Factors" contained in the Company's Annual Report on Form 10-K for
the year ended December 31, 2021.
These are not the only risks and uncertainties that Dow faces.
There may be other risks and uncertainties that Dow is unable to
identify at this time or that Dow does not currently expect to have
a material impact on its business. If any of those risks or
uncertainties develops into an actual event, it could have a
material adverse effect on Dow's business. Dow and TDCC assume no
obligation to update or revise publicly any forward-looking
statements whether because of new information, future events, or
otherwise, except as required by securities and other applicable
laws.
®TM Trademark of The Dow Chemical Company ("Dow") or
an affiliated company of
Dow
Non-GAAP Financial
Measures
This earnings release includes information that does not conform
to U.S. GAAP and are considered non-GAAP measures. Management uses
these measures internally for planning, forecasting and evaluating
the performance of the Company's segments, including allocating
resources. Dow's management believes that these non-GAAP measures
best reflect the ongoing performance of the Company during the
periods presented and provide more relevant and meaningful
information to investors as they provide insight with respect to
ongoing operating results of the Company and a more useful
comparison of year-over-year results. These non-GAAP measures
supplement the Company's U.S. GAAP disclosures and should not be
viewed as alternatives to U.S. GAAP measures of performance.
Furthermore, such non-GAAP measures may not be consistent with
similar measures provided or used by other companies. Non-GAAP
measures included in this release are defined below.
Reconciliations for these non-GAAP measures to U.S. GAAP are
provided in the Selected Financial Information and Non-GAAP
Measures section starting on page 11. Dow does not provide
forward-looking U.S. GAAP financial measures or a reconciliation of
forward-looking non-GAAP financial measures to the most comparable
U.S. GAAP financial measures on a forward-looking basis because the
Company is unable to predict with reasonable certainty the ultimate
outcome of pending litigation, unusual gains and losses, foreign
currency exchange gains or losses and potential future asset
impairments, as well as discrete taxable events, without
unreasonable effort. These items are uncertain, depend on various
factors, and could have a material impact on U.S. GAAP results for
the guidance period.
Operating earnings per share is defined as "Earnings per common
share - diluted" excluding the after-tax impact of significant
items.
Operating EBIT is defined as earnings (i.e., "Income before
income taxes") before interest, excluding the impact of significant
items.
Operating EBIT margin is defined as Operating EBIT as a
percentage of net sales.
Operating EBITDA is defined as earnings (i.e., "Income before
income taxes") before interest, depreciation and amortization,
excluding the impact of significant items.
Free cash flow is defined as "Cash provided by (used for)
operating activities - continuing operations," less capital
expenditures. Under this definition, free cash flow represents the
cash generated by the Company from operations after investing in
its asset base. Free cash flow, combined with cash balances and
other sources of liquidity, represent the cash available to fund
obligations and provide returns to shareholders. Free cash flow is
an integral financial measure used in the Company's financial
planning process.
Cash flow conversion is defined as "Cash provided by operating
activities - continuing operations," divided by Operating EBITDA.
Management believes cash flow conversion is an important financial
metric as it helps the Company determine how efficiently it is
converting its earnings into cash flow.
Operating return on capital (ROC) is defined as net operating
profit after tax, excluding the impact of significant items,
divided by total average capital, also referred to as ROIC.
Dow Inc. and
Subsidiaries
Consolidated
Statements of Income
|
|
In millions, except per
share amounts (Unaudited)
|
Three Months Ended
|
Mar 31,
2022
|
Mar 31,
2021
|
Net sales
|
$
15,264
|
$
11,882
|
Cost of sales
|
12,402
|
10,062
|
Research and development expenses
|
218
|
194
|
Selling, general and administrative expenses
|
498
|
366
|
Amortization of intangibles
|
88
|
101
|
Restructuring and asset related charges - net
|
186
|
—
|
Equity in earnings of nonconsolidated affiliates
|
174
|
224
|
Sundry income (expense) - net
|
148
|
128
|
Interest income
|
28
|
8
|
Interest expense and amortization of debt discount
|
167
|
196
|
Income before income
taxes
|
2,055
|
1,323
|
Provision for income taxes
|
503
|
317
|
Net income
|
1,552
|
1,006
|
Net
income (loss) attributable to noncontrolling interests
|
(17)
|
15
|
Net income available
for Dow Inc. common stockholders
|
$ 1,569
|
$ 991
|
|
|
—
|
Per common share
data:
|
|
|
Earnings per common share - basic
|
$ 2.12
|
$ 1.32
|
Earnings per common share - diluted
|
$ 2.11
|
$ 1.32
|
|
|
|
Weighted-average common
shares outstanding - basic
|
734.6
|
744.8
|
Weighted-average common
shares outstanding - diluted
|
739.8
|
749.8
|
Dow Inc. and
Subsidiaries
Consolidated
Balance Sheets
|
|
In millions, except
share amounts (Unaudited)
|
Mar 31,
2022
|
Dec 31,
2021
|
Assets
|
|
|
Current
Assets
|
|
|
Cash and cash equivalents
|
$
3,143
|
$
2,988
|
Accounts and notes receivable:
|
|
|
Trade (net of allowance for
doubtful receivables - 2022: $215; 2021: $54)
|
7,423
|
6,841
|
Other
|
2,536
|
2,713
|
Inventories
|
7,760
|
7,372
|
Other current assets
|
1,303
|
934
|
Total current assets
|
22,165
|
20,848
|
Investments
|
|
|
Investment in nonconsolidated affiliates
|
1,821
|
2,045
|
Other investments (investments carried at fair value - 2022:
$1,962; 2021: $2,079)
|
3,067
|
3,193
|
Noncurrent receivables
|
454
|
478
|
Total investments
|
5,342
|
5,716
|
Property
|
|
|
Property
|
57,707
|
57,604
|
Less: Accumulated depreciation
|
37,360
|
37,049
|
Net
property
|
20,347
|
20,555
|
Other Assets
|
|
|
Goodwill
|
8,716
|
8,764
|
Other intangible assets (net of accumulated amortization -
2022: $4,790; 2021: $4,725)
|
2,761
|
2,881
|
Operating lease right-of-use assets
|
1,339
|
1,412
|
Deferred income tax assets
|
1,160
|
1,358
|
Deferred charges and other assets
|
1,505
|
1,456
|
Total other assets
|
15,481
|
15,871
|
Total Assets
|
$
63,335
|
$
62,990
|
Liabilities and Equity
|
|
|
Current
Liabilities
|
|
|
Notes payable
|
$
92
|
$
161
|
Long-term debt due within one year
|
355
|
231
|
Accounts payable:
|
|
|
Trade
|
5,769
|
5,577
|
Other
|
2,772
|
2,839
|
Operating lease liabilities - current
|
306
|
314
|
Income taxes payable
|
527
|
623
|
Accrued and other current liabilities
|
3,233
|
3,481
|
Total current liabilities
|
13,054
|
13,226
|
Long-Term
Debt
|
14,108
|
14,280
|
Other Noncurrent
Liabilities
|
|
|
Deferred income tax liabilities
|
654
|
506
|
Pension and other postretirement benefits -
noncurrent
|
7,320
|
7,557
|
Asbestos-related liabilities - noncurrent
|
915
|
931
|
Operating lease liabilities - noncurrent
|
1,092
|
1,149
|
Other noncurrent obligations
|
6,767
|
6,602
|
Total other noncurrent liabilities
|
16,748
|
16,745
|
Stockholders'
Equity
|
|
|
Common stock (authorized 5,000,000,000 shares of $0.01 par
value each;
issued 2022: 767,064,055 shares; 2021: 764,226,882
shares)
|
8
|
8
|
Additional paid-in capital
|
8,217
|
8,151
|
Retained earnings
|
21,672
|
20,623
|
Accumulated other comprehensive loss
|
(8,796)
|
(8,977)
|
Unearned ESOP shares
|
—
|
(15)
|
Treasury stock at cost (2022: 38,962,213 shares; 2021:
29,011,573 shares)
|
(2,221)
|
(1,625)
|
Dow
Inc.'s stockholders' equity
|
18,880
|
18,165
|
Noncontrolling interests
|
545
|
574
|
Total equity
|
19,425
|
18,739
|
Total Liabilities and
Equity
|
$
63,335
|
$
62,990
|
Dow Inc. and
Subsidiaries
Consolidated
Statements of Cash Flows
|
|
In millions
(Unaudited)
|
Three Months Ended
|
Mar 31,
2022
|
Mar 31,
2021
|
Operating
Activities
|
|
|
Net
income
|
$
1,552
|
$
1,006
|
Adjustments to reconcile net income to net cash provided by
(used for) operating activities:
|
|
|
Depreciation and
amortization
|
752
|
717
|
Provision for deferred income
tax
|
253
|
144
|
Earnings of nonconsolidated
affiliates less than (in excess of) dividends received
|
374
|
(46)
|
Net periodic pension benefit
cost
|
7
|
23
|
Pension
contributions
|
(55)
|
(1,061)
|
Net gain on sales of assets,
businesses and investments
|
(6)
|
(38)
|
Restructuring and asset related
charges - net
|
186
|
—
|
Other net loss
|
140
|
55
|
Changes in assets and liabilities, net of effects of acquired
and divested companies:
|
|
|
Accounts and notes
receivable
|
(741)
|
(866)
|
Inventories
|
(443)
|
(478)
|
Accounts payable
|
86
|
611
|
Other assets and liabilities,
net
|
(493)
|
(295)
|
Cash provided by (used for) operating activities - continuing
operations
|
1,612
|
(228)
|
Cash used for operating activities - discontinued
operations
|
(9)
|
(63)
|
Cash provided by (used for) operating activities
|
1,603
|
(291)
|
Investing
Activities
|
|
|
Capital expenditures
|
(315)
|
(289)
|
Investment in gas field developments
|
(37)
|
(9)
|
Purchases of previously leased assets
|
(2)
|
(2)
|
Proceeds from sales of property and businesses, net of cash
divested
|
4
|
9
|
Investments in and loans to nonconsolidated
affiliates
|
(6)
|
—
|
Proceeds from sales of ownership interests in nonconsolidated
affiliates
|
11
|
—
|
Purchases of investments
|
(148)
|
(150)
|
Proceeds from sales and maturities of investments
|
141
|
428
|
Other investing activities, net
|
(15)
|
—
|
Cash used for investing activities
|
(367)
|
(13)
|
Financing
Activities
|
|
|
Changes in short-term notes payable
|
(21)
|
(47)
|
Payments on short-term debt greater than three
months
|
(14)
|
—
|
Proceeds from issuance of long-term debt
|
16
|
29
|
Payments on long-term debt
|
(25)
|
(164)
|
Collections on securitization programs
|
141
|
—
|
Purchases of treasury stock
|
(600)
|
—
|
Proceeds from issuance of stock
|
35
|
127
|
Transaction financing, debt issuance and other
costs
|
—
|
(1)
|
Employee taxes paid for share-based payment
arrangements
|
(35)
|
(10)
|
Distributions to noncontrolling interests
|
(1)
|
(8)
|
Dividends paid to stockholders
|
(513)
|
(521)
|
Cash used for financing activities
|
(1,017)
|
(595)
|
Effect of exchange rate
changes on cash, cash equivalents and restricted cash
|
(45)
|
(48)
|
Summary
|
|
|
Increase (decrease) in cash, cash equivalents and restricted
cash
|
174
|
(947)
|
Cash, cash equivalents and restricted cash at beginning of
period
|
3,033
|
5,108
|
Cash, cash equivalents and
restricted cash at end of period
|
$
3,207
|
$
4,161
|
Less: Restricted cash and cash equivalents, included in
"Other current assets"
|
64
|
28
|
Cash and cash equivalents at
end of period
|
$
3,143
|
$
4,133
|
Dow Inc. and
Subsidiaries
Net Sales by
Segment and Geographic Region
|
|
Net Sales by Segment
|
Three Months Ended
|
In millions
(Unaudited)
|
Mar 31,
2022
|
Mar 31,
2021
|
Packaging &
Specialty Plastics
|
$ 7,627
|
$ 6,082
|
Industrial
Intermediates & Infrastructure
|
4,524
|
3,607
|
Performance Materials
& Coatings
|
3,049
|
2,123
|
Corporate
|
64
|
70
|
Total
|
$
15,264
|
$
11,882
|
U.S. &
Canada
|
$ 5,537
|
$ 4,028
|
EMEAI
1
|
5,512
|
4,329
|
Asia Pacific
|
2,753
|
2,365
|
Latin
America
|
1,462
|
1,160
|
Total
|
$
15,264
|
$
11,882
|
Net Sales Variance by Segment and Geographic
Region
|
Three Months Ended Mar 31, 2022
|
|
Local
Price &
Product
Mix
|
Currency
|
Volume
|
Total
|
|
Percent change from
prior year
|
|
Packaging &
Specialty Plastics
|
24 %
|
(3) %
|
4 %
|
25 %
|
|
Industrial
Intermediates & Infrastructure
|
29
|
(5)
|
1
|
25
|
|
Performance Materials
& Coatings
|
39
|
(3)
|
8
|
44
|
|
Total
|
28 %
|
(3) %
|
3 %
|
28 %
|
|
Total, excluding the
Hydrocarbons & Energy business
|
29 %
|
(3) %
|
1 %
|
27 %
|
|
U.S. &
Canada
|
24 %
|
— %
|
13 %
|
37 %
|
|
EMEAI
1
|
37
|
(8)
|
(2)
|
27
|
|
Asia Pacific
|
19
|
(1)
|
(2)
|
16
|
|
Latin
America
|
24
|
—
|
2
|
26
|
|
Total
|
28 %
|
(3) %
|
3 %
|
28 %
|
|
Net Sales Variance by Segment and Geographic
Region
|
Three Months Ended Mar 31, 2022
|
|
Local
Price &
Product
Mix
|
Currency
|
Volume
|
Total
|
|
Percent change from
prior quarter
|
|
Packaging &
Specialty Plastics
|
— %
|
(1) %
|
7 %
|
6 %
|
|
Industrial
Intermediates & Infrastructure
|
2
|
(1)
|
(2)
|
(1)
|
|
Performance Materials
& Coatings
|
9
|
(1)
|
11
|
19
|
|
Total
|
2 %
|
(1) %
|
5 %
|
6 %
|
|
Total, excluding the
Hydrocarbons & Energy business
|
2 %
|
(1) %
|
4 %
|
5 %
|
|
U.S. &
Canada
|
1 %
|
— %
|
6 %
|
7 %
|
|
EMEAI
1
|
8
|
(2)
|
2
|
8
|
|
Asia Pacific
|
(3)
|
—
|
8
|
5
|
|
Latin
America
|
(1)
|
—
|
—
|
(1)
|
|
Total
|
2 %
|
(1) %
|
5 %
|
6 %
|
|
1.
|
Europe, Middle East,
Africa and India.
|
Dow Inc. and
Subsidiaries
Selected Financial
Information and Non-GAAP Measures
|
|
Operating EBIT by Segment
|
Three Months Ended
|
In millions
(Unaudited)
|
Mar 31,
2022
|
Mar 31,
2021
|
Packaging &
Specialty Plastics
|
$ 1,234
|
$ 1,228
|
Industrial
Intermediates & Infrastructure
|
661
|
326
|
Performance Materials
& Coatings
|
595
|
62
|
Corporate
|
(71)
|
(62)
|
Total
|
$ 2,419
|
$ 1,554
|
|
|
|
Depreciation and Amortization by
Segment
|
Three Months Ended
|
In millions
(Unaudited)
|
Mar 31,
2022
|
Mar 31,
2021
|
Packaging &
Specialty Plastics
|
$ 395
|
$ 336
|
Industrial
Intermediates & Infrastructure
|
150
|
156
|
Performance Materials
& Coatings
|
200
|
218
|
Corporate
|
7
|
7
|
Total
|
$ 752
|
$ 717
|
|
|
|
Operating EBITDA by Segment
|
Three Months Ended
|
In millions
(Unaudited)
|
Mar 31,
2022
|
Mar 31,
2021
|
Packaging &
Specialty Plastics
|
$ 1,629
|
$ 1,564
|
Industrial
Intermediates & Infrastructure
|
811
|
482
|
Performance Materials
& Coatings
|
795
|
280
|
Corporate
|
(64)
|
(55)
|
Total
|
$ 3,171
|
$ 2,271
|
|
|
|
Equity in Earnings (Losses) of Nonconsolidated
Affiliates by Segment
|
Three Months Ended
|
In millions
(Unaudited)
|
Mar 31,
2022
|
Mar 31,
2021
|
Packaging &
Specialty Plastics
|
$ 110
|
$ 106
|
Industrial
Intermediates & Infrastructure
|
62
|
115
|
Performance Materials
& Coatings
|
3
|
2
|
Corporate
|
(1)
|
1
|
Total
|
$ 174
|
$ 224
|
|
|
|
Reconciliation of "Net income" to "Operating
EBIT"
|
Three Months Ended
|
In millions
(Unaudited)
|
Mar 31,
2022
|
Mar 31,
2021
|
Net income
|
$ 1,552
|
$ 1,006
|
+ Provision for income
taxes
|
503
|
317
|
Income before income
taxes
|
$ 2,055
|
$ 1,323
|
- Interest
income
|
28
|
8
|
+ Interest expense and
amortization of debt discount
|
167
|
196
|
- Significant
items
|
(225)
|
(43)
|
Operating EBIT
(non-GAAP)
|
$ 2,419
|
$ 1,554
|
Dow Inc. and
Subsidiaries
Selected Financial
Information and Non-GAAP Measures
|
|
Significant Items Impacting Results for the Three
Months Ended Mar 31, 2022
|
In millions, except per
share amounts (Unaudited)
|
Pretax 1
|
Net
Income 2
|
EPS 3
|
Income Statement Classification
|
Reported
results
|
$
2,055
|
$
1,569
|
$ 2.11
|
|
Less: Significant
items
|
|
|
|
|
Digitalization program costs 4
|
(41)
|
(32)
|
(0.04)
|
Cost of sales ($38
million);
R&D ($1
million); SG&A ($2 million)
|
Restructuring, implementation costs and
asset related charges - net
5
|
(10)
|
(8)
|
(0.01)
|
Cost of sales ($7
million);
R&D ($2
million); SG&A ($1 million)
|
Russia / Ukraine conflict charges 6
|
(186)
|
(142)
|
(0.19)
|
Restructuring and asset
related charges
- net
|
Indemnification and other transaction
related costs 7
|
12
|
12
|
0.01
|
Sundry income (expense)
- net
|
Total significant items
|
$
(225)
|
$
(170)
|
$
(0.23)
|
|
Operating results
(non-GAAP)
|
$
2,280
|
$
1,739
|
$ 2.34
|
|
Significant Items Impacting Results for the Three
Months Ended Mar 31, 2021
|
In millions, except per
share amounts (Unaudited)
|
Pretax 1
|
Net
Income 2
|
EPS 3
|
Income Statement Classification
|
Reported
results
|
$
1,323
|
$ 991
|
$ 1.32
|
|
Less: Significant
items
|
|
|
|
|
Digitalization program costs 4
|
(33)
|
(25)
|
(0.03)
|
Cost of sales ($29
million);
SG&A ($4
million)
|
Restructuring, implementation costs and
asset related charges - net
5
|
(10)
|
(8)
|
(0.01)
|
Cost of sales ($9
million);
R&D ($1
million)
|
Total significant items
|
$ (43)
|
$ (33)
|
$
(0.04)
|
|
Operating results
(non-GAAP)
|
$
1,366
|
$
1,024
|
$ 1.36
|
|
1.
|
"Income before income
taxes."
|
2.
|
"Net income available
for Dow Inc. common stockholders." The income tax effect on
significant items was calculated based upon the enacted tax laws
and statutory income tax rates applicable in the tax
jurisdiction(s) of the underlying non-GAAP adjustment.
|
3.
|
"Earnings per common
share - diluted," which includes the impact of participating
securities in accordance with the two-class method.
|
4.
|
Costs associated with
implementing the Company's Digital Acceleration program.
|
5.
|
Costs associated with
implementing the Company's 2020 Restructuring Program.
|
6.
|
Asset related charges
including inventory write-downs, bad debt reserves, and impairments
of other assets related to the conflict between Russia and
Ukraine.
|
7.
|
Primarily related to
charges associated with agreements entered into with DuPont and
Corteva as part of the separation and distribution which, among
other matters, provides for cross-indemnities and allocations of
obligations and liabilities for periods prior to, at and after the
completion of the separation.
|
Dow Inc. and
Subsidiaries
Selected Financial
Information and Non-GAAP Measures
|
|
Significant Items Impacting Results for the Three
Months Ended Dec 31, 2021
|
In millions, except per
share amounts (Unaudited)
|
Pretax 1
|
Net
Income 2
|
EPS 3
|
Income Statement Classification
|
Reported
results
|
$
2,118
|
$
1,736
|
$ 2.32
|
|
Less: Significant
items
|
|
|
|
|
Digitalization program costs 4
|
(48)
|
(38)
|
(0.05)
|
Cost of sales ($40
million);
R&D ($2 million); SG&A ($6 million)
|
Restructuring, implementation costs and
asset related charges - net
5
|
—
|
—
|
—
|
Cost of sales ($11
million);
R&D ($3 million); SG&A ($2 million);
offset by Restructuring, goodwill
impairment and asset related
charges - net $16 million
|
Net
gain on divestitures and asset sale
|
16
|
16
|
0.02
|
Sundry income (expense)
- net
|
Indemnification and other transaction
related costs 6
|
35
|
35
|
0.05
|
Sundry income (expense)
- net
|
Income tax related items 7
|
—
|
111
|
0.15
|
Provision for income
taxes on
continuing operations
|
Total significant items
|
$
3
|
$ 124
|
$ 0.17
|
|
Operating results
(non-GAAP)
|
$
2,115
|
$
1,612
|
$ 2.15
|
|
1.
|
"Income before income
taxes"
|
2.
|
"Net income available
for Dow Inc. common stockholders." The income tax effect on
significant items was calculated based upon the enacted tax laws
and statutory income tax rates applicable in the tax
jurisdiction(s) of the underlying non-GAAP adjustment.
|
3.
|
"Earnings per common
share - diluted," which includes the impact of participating
securities in accordance with the two-class method.
|
4.
|
Costs associated with
implementing the Company's Digital Acceleration program.
|
5.
|
Restructuring charges
and costs associated with implementing the Company's 2020
Restructuring Program.
|
6.
|
Primarily related to
charges associated with agreements entered into with DuPont and
Corteva as part of the separation and distribution which, among
other matters, provides for cross-indemnities and allocations of
obligations and liabilities for periods prior to, at and after the
completion of the separation.
|
7.
|
Includes reversals of
certain tax valuation allowances partially offset by charges
related to uncertain tax positions.
|
Reconciliation of Free Cash
Flow
|
Three Months Ended
|
In millions
(Unaudited)
|
Mar 31,
2022
|
Mar 31,
2021
|
Cash provided by (used
for) operating activities - continuing operations (GAAP)
|
$ 1,612
|
$ (228)
|
Capital
expenditures
|
(315)
|
(289)
|
Free cash flow
(non-GAAP) 1
|
$ 1,297
|
$ (517)
|
1.
|
Free cash flow in the
first quarter of 2021 reflects a $1 billion elective pension
contribution.
|
Reconciliation of Cash Flow
Conversion
|
Three Months Ended
|
In millions
(Unaudited)
|
Jun 30,
2021
|
Sep 30,
2021
|
Dec 31,
2021
|
Mar 31,
2022
|
Cash provided by
operating activities - continuing operations (GAAP)
|
$
2,021
|
$
2,719
|
$
2,557
|
$
1,612
|
Operating EBITDA
(non-GAAP)
|
3,573
|
3,611
|
2,920
|
3,171
|
Cash flow conversion
(Operating EBITDA to cash flow from
operations) (non-GAAP)
|
56.6
%
|
75.3
%
|
87.6
%
|
50.8
%
|
Cash flow conversion -
trailing twelve months (non-GAAP)
|
|
67.1
%
|
For further
information, please contact:
|
|
Investors:
Pankaj Gupta
pgupta@dow.com
+1
989-638-5265
|
Media:
Kyle Bandlow
kbandlow@dow.com
+1
989-638-2417
|
|
|
Twitter: https://twitter.com/DowNewsroom
Facebook: https://www.facebook.com/dow/
LinkedIn: http://www.linkedin.com/company/dow-chemical
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SOURCE The Dow Chemical Company