EPS Forecast
Revenue Forecast
EX-99.1
2
exhibit991enrschedules4q21.htm
EX-99.1
Document
Exhibit 99.1
January 27, 2022
January 27, 2022
Dow reports fourth quarter 2021 results
FINANCIAL HIGHLIGHTS
•GAAP earnings per share (EPS) was $2.32. Operating EPS1 was $2.15, compared to $0.81 in the year-ago period. Operating EPS excludes certain items, totaling $0.17 per share, primarily due to certain tax-related items.
•Net sales were $14.4 billion, up 34% versus the year-ago period, with improvement in every operating segment, business and region. Sequentially, net sales were down 3% primarily driven by decreased polyethylene volume due to supply constraints as well as lower olefin and co-product prices.
•Local price increased 39% versus the year-ago period, reflecting gains in all operating segments, businesses and regions. Sequentially, price increased 1% with gains in Performance Materials & Coatings and Industrial Intermediates & Infrastructure, led by industrial, construction and personal care applications along with continued tightness in siloxane supply.
•Volume decreased 4% versus the year-ago period and 3% sequentially, primarily driven by supply constraints from maintenance and lingering effects from Covid and weather-related outages, as well as global logistics constraints across several key value chains.
•Equity earnings were $224 million, up $118 million from the year-ago period due to margin expansion at Sadara and the Thai and Kuwait joint ventures. Sequentially, equity earnings were down $25 million driven by impacts from planned maintenance turnaround activity at Sadara.
•GAAP Net Income was $1.8 billion. Operating EBIT1 was $2.3 billion, up $1.2 billion from the year-ago period, with gains in every operating segment due to margin expansion and increased equity earnings. Sequentially, operating EBIT declined $621 million as price gains in Performance Materials & Coatings and Industrial Intermediates & Infrastructure were more than offset by increased raw material and energy costs and supply constraints.
•Cash provided by operating activities – continuing operations was $2.6 billion, up $901 million year-over-year and a decrease of $162 million compared to the prior quarter. Free cash flow1 was $2.1 billion.
•Returns to shareholders totaled $912 million in the quarter, comprised of $512 million in dividends and $400 million in share repurchases.
SUMMARY FINANCIAL RESULTS
| Three Months Ended Dec 31 | Three Months Ended Sep 30 | ||||||||||||||||
| In millions, except per share amounts | 4Q21 | 4Q20 | vs. SQLY [B / (W)] | 3Q21 | vs. PQ [B / (W)] | ||||||||||||
| Net Sales | $ | 14,364 | $ | 10,706 | $ | 3,658 | $ | 14,837 | $ | (473) | |||||||
| GAAP Income, Net of Tax | $ | 1,761 | $ | 1,254 | $ | 507 | $ | 1,706 | $ | 55 | |||||||
Operating EBIT1 | $ | 2,265 | $ | 1,054 | $ | 1,211 | $ | 2,886 | $ | (621) | |||||||
Operating EBIT Margin1 | 15.8 | % | 9.8 | % | 600 bps | 19.5 | % | (370) bps | |||||||||
Operating EBITDA1 | $ | 2,920 | $ | 1,780 | $ | 1,140 | $ | 3,611 | $ | (691) | |||||||
| GAAP Earnings Per Share | $ | 2.32 | $ | 1.65 | $ | 0.67 | $ | 2.23 | $ | 0.09 | |||||||
Operating Earnings Per Share1 | $ | 2.15 | $ | 0.81 | $ | 1.34 | $ | 2.75 | $ | (0.60) | |||||||
| Cash Provided by Operating Activities - Cont. Ops | $ | 2,557 | $ | 1,656 | $ | 901 | $ | 2,719 | $ | (162) | |||||||
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.
®™ Trademark of The Dow Chemical Company ("Dow") or an affiliated company of Dow
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Dow reports fourth quarter 2021 results
CEO QUOTE
Jim Fitterling, chairman and chief executive officer, commented on the quarter:
“In the fourth quarter, Team Dow once again delivered top- and bottom-line growth year-over-year across all operating segments. Underlying demand strength and continued operating discipline enabled us to overcome supply and logistics constraints as well as higher raw material and energy costs.
“Our performance in the fourth quarter capped a record year for Dow in 2021. We achieved full year sales of $55 billion and operating EBIT of $9.5 billion, with growth and margin expansion across all operating segments, as well as $7.1 billion of cash flow from operations and annual ROIC of more than 22%. We delivered on our financial priorities with proactive liability management actions through the year, including reducing gross debt by $2.4 billion and a $1 billion elective pension contribution, while returning a cumulative $3.1 billion to shareholders. Importantly, we also announced our plan to decarbonize our assets while growing our earnings, positioning Dow to continue on a path to deliver more than $3 billion of accretive underlying earnings growth, advance our sustainability leadership, and create long-term value for our shareholders.”
SEGMENT HIGHLIGHTS
Packaging & Specialty Plastics
| Three Months Ended Dec 31 | Three Months Ended Sep 30 | ||||||||||||||||
| In millions, except margin percentages | 4Q21 | 4Q20 | vs. SQLY [B / (W)] | 3Q21 | vs. PQ [B / (W)] | ||||||||||||
| Net Sales | $ | 7,189 | $ | 5,126 | $ | 2,063 | $ | 7,736 | $ | (547) | |||||||
| Operating EBIT | $ | 1,442 | $ | 780 | $ | 662 | $ | 1,954 | $ | (512) | |||||||
| Operating EBIT Margin | 20.1 | % | 15.2 | % | 490 bps | 25.3 | % | (520) bps | |||||||||
| Equity Earnings | $ | 130 | $ | 77 | $ | 53 | $ | 124 | $ | 6 | |||||||
Packaging & Specialty Plastics segment net sales in the quarter were $7.2 billion, up 40% versus the year-ago period. Local price increased 44% year-over-year due to tight supply and demand balances, with double-digit gains in both businesses and across all regions. Despite continued robust end-market demand in packaging applications, volume declined 3% year-over-year, as gains in energy sales volume was more than offset by lower polyethylene volume, primarily in Asia Pacific due to supply constraints. Currency decreased net sales by 1%. On a sequential basis, the segment delivered a 7% net sales decline, primarily due to lower olefin and co-product prices and decreased polyethylene volume resulting from supply constraints.
Equity earnings were $130 million, up $53 million compared to the year-ago period due to higher integrated polyethylene margins at the principal joint ventures. On a sequential basis, equity earnings increased by $6 million as a result of gains at Sadara and the Kuwait joint ventures.
Operating EBIT was $1.4 billion, compared to $780 million in the year-ago period, reflecting margin improvement in the core business and increased equity earnings, primarily due to higher margins on tight supply and demand balances, partly offset by lower supply volumes. Sequentially, Op. EBIT was down $512 million and Op. EBIT margins declined by 520 basis points on lower olefin and co-product prices and higher raw material and energy costs.
Packaging and Specialty Plastics business reported a net sales increase versus the year-ago period, led by local price gains in all regions as well as in flexible food & beverage packaging and industrial & consumer packaging applications. Volumes declined year-over-year, primarily in Asia Pacific due to supply constraints. Compared to the prior quarter, the business delivered price gains in Asia Pacific and Europe, Middle East, Africa & India that were more than offset by declines in other regions and lower sales volumes due to supply constraints.
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Dow reports fourth quarter 2021 results
Hydrocarbons & Energy business reported a net sales increase compared to the year-ago period, driven primarily by higher local prices in olefins and aromatics and volume gains in energy. Sequentially, sales declined due to lower olefin and co-product prices, which were partly offset by higher olefin volume primarily in the U.S. & Canada.
Industrial Intermediates & Infrastructure
| Three Months Ended Dec 31 | Three Months Ended Sep 30 | ||||||||||||||||
| In millions, except margin percentages | 4Q21 | 4Q20 | vs. SQLY [B / (W)] | 3Q21 | vs. PQ [B / (W)] | ||||||||||||
| Net Sales | $ | 4,548 | $ | 3,501 | $ | 1,047 | $ | 4,481 | $ | 67 | |||||||
| Operating EBIT | $ | 595 | $ | 296 | $ | 299 | $ | 713 | $ | (118) | |||||||
| Operating EBIT Margin | 13.1 | % | 8.5 | % | 460 bps | 15.9 | % | (280) bps | |||||||||
| Equity Earnings | $ | 90 | $ | 36 | $ | 54 | $ | 122 | $ | (32) | |||||||
Industrial Intermediates & Infrastructure segment net sales in the quarter were $4.5 billion, up 30% versus the year-ago period. Local price improved 38% year-over-year with gains in both businesses and in all regions on continued strong industry demand. Volume declined 7% year-over-year due to a planned transition away from a low-margin coproducer contract and planned maintenance turnaround activity. On a sequential basis, the segment recorded a net sales increase of 1%, with local price gains in both businesses and all regions. Volume declined 2% sequentially as improved supply availability in Industrial Solutions was more than offset by planned maintenance turnaround activity in Polyurethanes & Construction Chemicals.
Equity earnings were $90 million, an increase of $54 million compared to the year-ago period, driven by margin expansion at the Kuwait joint ventures. On a sequential basis, equity earnings decreased by $32 million, primarily from lower supply availability at the Sadara joint venture due to planned maintenance turnaround activity.
Operating EBIT was $595 million, an increase of $299 million compared to the year-ago period, primarily due to continued price strength in both businesses, driving Op. EBIT margins up 460 basis points year-over-year. Sequentially, Op. EBIT was down $118 million, and Op. EBIT margins declined by 280 basis points, primarily driven by energy cost increases in Europe and planned maintenance turnaround activity.
Polyurethanes & Construction Chemicals business increased net sales compared to the year-ago period as tight supply and demand balances in key value chains led to broad-based price gains in all regions. Volume declines year-over-year were primarily driven by a planned transition away from a low-margin coproducer contract and our planned maintenance turnaround activity. Sequentially, net sales declined as local price increases in all regions were more than offset by planned maintenance turnaround activity.
Industrial Solutions business net sales increased from the year-ago period with local price gains in all regions. Volume was flat year-over-year as higher volume from a renewable energy contract was offset by fewer licensing and catalyst sales. Net sales increased sequentially on volume growth from improved supply availability and local price gains in all regions.
Performance Materials & Coatings
| Three Months Ended Dec 31 | Three Months Ended Sep 30 | ||||||||||||||||
| In millions, except margin percentages | 4Q21 | 4Q20 | vs. SQLY [B / (W)] | 3Q21 | vs. PQ [B / (W)] | ||||||||||||
| Net Sales | $ | 2,558 | $ | 2,029 | $ | 529 | $ | 2,526 | $ | 32 | |||||||
| Operating EBIT | $ | 295 | $ | 50 | $ | 245 | $ | 284 | $ | 11 | |||||||
| Operating EBIT Margin | 11.5 | % | 2.5 | % | 900 bps | 11.2 | % | 30 bps | |||||||||
| Equity Earnings | $ | 2 | $ | 2 | $ | 0 | $ | 3 | $ | (1) | |||||||
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Dow reports fourth quarter 2021 results
Performance Materials & Coatings segment net sales in the quarter were $2.6 billion, up 26% versus the year-ago period. Local price increased 30% year-over-year, with gains in both businesses and in all regions. Volume declined 4% year-over-year as stronger demand for performance silicones applications and architectural coatings in the U.S. & Canada was more than offset by lower siloxane supply availability due to a pull forward of maintenance activity to coincide with dual-control actions in China. On a sequential basis, net sales were up 1% with local price gains in both businesses and in all regions. Volume declined 8% sequentially as increased supply availability of acrylic monomers was more than offset by maintenance activity at a siloxane facility in China and lower seasonal demand for coatings applications.
Operating EBIT was $295 million, compared to $50 million in the year-ago period, as Op. EBIT margins increased 900 basis points due to strong price momentum for silicones and coatings offerings. Sequentially, Op. EBIT improved $11 million, as price gains were partly offset by planned maintenance turnaround activity.
Consumer Solutions business achieved higher net sales, with local price gains in all regions and end-market applications year-over-year. Volume declined versus the year-ago period, as strong demand particularly for industrial, electronics and personal care applications was offset by lower supply availability due to a pull forward of maintenance activity to coincide with dual-control actions in China. Sequentially, net sales were up as local price increases in all regions and end-market applications more than offset volume declines, primarily due to maintenance activity at a siloxane facility.
Coatings & Performance Monomers business achieved increased net sales compared to the year-ago period, led by local price gains in all regions on tight supply and demand balances and higher raw material costs. Volume declined year-over-year as stronger demand for architectural coatings and industrial coatings primarily in the U.S. & Canada was more than offset by lower merchant sales of acrylic monomers partly due to Dow’s own higher-value captive use. Sequentially, the business delivered local price gains in all regions. Volume declined sequentially due to seasonal demand declines for coatings applications in the Northern Hemisphere.
OUTLOOK
“In 2022, we expect continued demand strength across our end markets, supported by growing industrial production and sustained consumer spending,” said Fitterling. “We are working hard to normalize operating rates, inventory and service levels following a year of supply constraints and Covid-related logistics challenges.
“While the global economy continues to be impacted by supply chain pressures, these logistics constraints are expected to ease throughout the year to fulfill elevated order backlogs and pent-up customer demand. As we navigate these near-term dynamics, we will continue to be disciplined in the implementation of our strategy and progress on our higher-return, lower-risk growth projects and efficiency programs. We will also further advance our key sustainability initiatives to decarbonize our assets and capture increasing demand for lower carbon and circular solutions.”
Conference Call
Dow will host a live webcast of its fourth 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.
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Dow reports fourth quarter 2021 results
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.
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For further information, please contact:
| Investors: | Media: | ||||
| Pankaj Gupta | Kyle Bandlow | ||||
| pgupta@dow.com | kbandlow@dow.com | ||||
| +1 989-638-5265 | +1 989-638-2417 | ||||
Cautionary Statement about Forward-Looking Statements
Certain statements in this presentation 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; 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; weather events and natural disasters; and disruptions in Dow’s information technology networks and systems.
Risks related to Dow’s separation from DowDuPont Inc. include, but are not limited to: (i) Dow’s failure to achieve in full the anticipated benefits from the separation from DowDuPont Inc.; (ii) certain tax risks associated with the separation; (iii) the failure of Dow’s pro forma financial information to be a reliable indicator of Dow’s future results; (iv) receipt of less favorable terms in the commercial agreements Dow entered into with DuPont de Nemours, Inc. (“DuPont”) and Corteva, Inc. (“Corteva”), including restrictions under intellectual property cross-license agreements, than Dow would have received from an unaffiliated third party; and (v) Dow’s obligation to indemnify DuPont and/or Corteva 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, 2020. 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 assumes 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
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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.
Operating return on invested capital ("ROIC") is defined as net operating profit after tax, excluding the impact of significant items, divided by total average capital.
Free cash flow is defined as "Cash provided by 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.
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Dow Inc. and Subsidiaries
Consolidated Statements of Income
| In millions, except per share amounts (Unaudited) | Three Months Ended | Twelve Months Ended | ||||||||||||
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2021 | Dec 31, 2020 | |||||||||||
| Net sales | $ | 14,364 | $ | 10,706 | $ | 54,968 | $ | 38,542 | ||||||
| Cost of sales | 11,778 | 9,135 | 44,191 | 33,346 | ||||||||||
| Research and development expenses | 225 | 214 | 857 | 768 | ||||||||||
| Selling, general and administrative expenses | 436 | 408 | 1,645 | 1,471 | ||||||||||
| Amortization of intangibles | 87 | 101 | 388 | 401 | ||||||||||
| Restructuring and asset related charges (credits) - net | (16) | (11) | 6 | 708 | ||||||||||
| Integration and separation costs | — | 65 | — | 239 | ||||||||||
| Equity in earnings (losses) of nonconsolidated affiliates | 224 | 106 | 975 | (18) | ||||||||||
| Sundry income (expense) - net | 190 | 1,115 | (35) | 1,269 | ||||||||||
| Interest income | 20 | 11 | 55 | 38 | ||||||||||
| Interest expense and amortization of debt discount | 170 | 210 | 731 | 827 | ||||||||||
| Income before income taxes | 2,118 | 1,816 | 8,145 | 2,071 | ||||||||||
| Provision for income taxes | 357 | 562 | 1,740 | 777 | ||||||||||
| Net income | 1,761 | 1,254 | 6,405 | 1,294 | ||||||||||
| Net income attributable to noncontrolling interests | 25 | 18 | 94 | 69 | ||||||||||
| Net income available for Dow Inc. common stockholders | $ | 1,736 | $ | 1,236 | $ | 6,311 | $ | 1,225 | ||||||
| — | — | — | — | |||||||||||
| Per common share data: | ||||||||||||||
| Earnings per common share - basic | $ | 2.34 | $ | 1.66 | $ | 8.44 | $ | 1.64 | ||||||
| Earnings per common share - diluted | $ | 2.32 | $ | 1.65 | $ | 8.38 | $ | 1.64 | ||||||
| Weighted-average common shares outstanding - basic | 738.1 | 742.1 | 743.6 | 740.5 | ||||||||||
| Weighted-average common shares outstanding - diluted | 743.3 | 745.0 | 749.0 | 742.3 | ||||||||||
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Dow Inc. and Subsidiaries
Consolidated Balance Sheets
In millions, except share amounts (Unaudited) | Dec 31, 2021 | Dec 31, 2020 | ||||||
| Assets | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | 2,988 | $ | 5,104 | ||||
| Accounts and notes receivable: | ||||||||
| Trade (net of allowance for doubtful receivables - 2021: $54; 2020: $51) | 6,841 | 5,090 | ||||||
| Other | 2,713 | 2,300 | ||||||
| Inventories | 7,372 | 5,701 | ||||||
| Other current assets | 934 | 889 | ||||||
| Total current assets | 20,848 | 19,084 | ||||||
| Investments | ||||||||
| Investment in nonconsolidated affiliates | 2,045 | 1,327 | ||||||
| Other investments (investments carried at fair value - 2021: $2,079; 2020: $1,674) | 3,193 | 2,775 | ||||||
| Noncurrent receivables | 478 | 465 | ||||||
| Total investments | 5,716 | 4,567 | ||||||
| Property | ||||||||
| Property | 57,604 | 56,325 | ||||||
| Less: Accumulated depreciation | 37,049 | 36,086 | ||||||
| Net property | 20,555 | 20,239 | ||||||
| Other Assets | ||||||||
| Goodwill | 8,764 | 8,908 | ||||||
| Other intangible assets (net of accumulated amortization - 2021: $4,725; 2020: $4,428) | 2,881 | 3,352 | ||||||
| Operating lease right-of-use assets | 1,412 | 1,856 | ||||||
| Deferred income tax assets | 1,358 | 2,215 | ||||||
| Deferred charges and other assets | 1,456 | 1,249 | ||||||
| Total other assets | 15,871 | 17,580 | ||||||
| Total Assets | $ | 62,990 | $ | 61,470 | ||||
| Liabilities and Equity | ||||||||
| Current Liabilities | ||||||||
| Notes payable | $ | 161 | $ | 156 | ||||
| Long-term debt due within one year | 231 | 460 | ||||||
| Accounts payable: | ||||||||
| Trade | 5,577 | 3,763 | ||||||
| Other | 2,839 | 2,126 | ||||||
| Operating lease liabilities - current | 314 | 416 | ||||||
| Income taxes payable | 623 | 397 | ||||||
| Accrued and other current liabilities | 3,481 | 3,790 | ||||||
| Total current liabilities | 13,226 | 11,108 | ||||||
| Long-Term Debt | 14,280 | 16,491 | ||||||
| Other Noncurrent Liabilities | ||||||||
| Deferred income tax liabilities | 506 | 405 | ||||||
| Pension and other postretirement benefits - noncurrent | 7,557 | 11,648 | ||||||
| Asbestos-related liabilities - noncurrent | 931 | 1,013 | ||||||
| Operating lease liabilities - noncurrent | 1,149 | 1,521 | ||||||
| Other noncurrent obligations | 6,602 | 6,279 | ||||||
| Total other noncurrent liabilities | 16,745 | 20,866 | ||||||
| Stockholders’ Equity | ||||||||
| Common stock (authorized 5,000,000,000 shares of $0.01 par value each; issued 2021: 764,226,882 shares; 2020: 755,993,198 shares) | 8 | 8 | ||||||
| Additional paid-in capital | 8,151 | 7,595 | ||||||
| Retained earnings | 20,623 | 16,361 | ||||||
| Accumulated other comprehensive loss | (8,977) | (10,855) | ||||||
| Unearned ESOP shares | (15) | (49) | ||||||
| Treasury stock at cost (2021: 29,011,573 shares; 2020: 12,803,303 shares) | (1,625) | (625) | ||||||
| Dow Inc.’s stockholders’ equity | 18,165 | 12,435 | ||||||
| Noncontrolling interests | 574 | 570 | ||||||
| Total equity | 18,739 | 13,005 | ||||||
| Total Liabilities and Equity | $ | 62,990 | $ | 61,470 | ||||
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Dow Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(In millions) (Unaudited) For the years ended Dec 31, | 2021 | 2020 | ||||||
| Operating Activities | ||||||||
| Net income | $ | 6,405 | $ | 1,294 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 2,842 | 2,874 | ||||||
| Provision for deferred income tax | 278 | 258 | ||||||
| Earnings of nonconsolidated affiliates less than (in excess of) dividends received | (651) | 443 | ||||||
| Net periodic pension benefit cost | 39 | 266 | ||||||
| Pension contributions | (1,219) | (299) | ||||||
| Net gain on sales of assets, businesses and investments | (105) | (802) | ||||||
| Restructuring and asset related charges - net | 6 | 708 | ||||||
| Other net loss | 921 | 318 | ||||||
| Changes in assets and liabilities, net of effects of acquired and divested companies: | ||||||||
| Accounts and notes receivable | (2,132) | 171 | ||||||
| Inventories | (1,768) | 515 | ||||||
| Accounts payable | 2,458 | (84) | ||||||
| Other assets and liabilities, net | (5) | 590 | ||||||
| Cash provided by operating activities - continuing operations | 7,069 | 6,252 | ||||||
| Cash used for operating activities - discontinued operations | (60) | (26) | ||||||
| Cash provided by operating activities | 7,009 | 6,226 | ||||||
| Investing Activities | ||||||||
| Capital expenditures | (1,501) | (1,252) | ||||||
| Investment in gas field developments | (92) | (5) | ||||||
| Purchases of previously leased assets | (694) | (5) | ||||||
| Proceeds from sales of property and businesses, net of cash divested | 68 | 929 | ||||||
| Acquisitions of property and businesses, net of cash acquired | (129) | (130) | ||||||
| Investments in and loans to nonconsolidated affiliates | — | (333) | ||||||
| Distributions and loan repayments from nonconsolidated affiliates | 51 | 7 | ||||||
| Purchases of investments | (1,366) | (1,203) | ||||||
| Proceeds from sales and maturities of investments | 759 | 1,122 | ||||||
| Other investing activities, net | (10) | 29 | ||||||
| Cash used for investing activities | (2,914) | (841) | ||||||
| Financing Activities | ||||||||
| Changes in short-term notes payable | (48) | (431) | ||||||
| Proceeds from issuance of short-term debt greater than three months | 144 | 163 | ||||||
| Payments on short-term debt greater than three months | (130) | (163) | ||||||
| Proceeds from issuance of long-term debt | 109 | 4,672 | ||||||
| Payments on long-term debt | (2,771) | (4,653) | ||||||
| Purchases of treasury stock | (1,000) | (125) | ||||||
| Proceeds from issuance of stock | 320 | 108 | ||||||
| Transaction financing, debt issuance and other costs | (537) | (175) | ||||||
| Employee taxes paid for share-based payment arrangements | (12) | (27) | ||||||
| Distributions to noncontrolling interests | (73) | (62) | ||||||
| Dividends paid to stockholders | (2,073) | (2,071) | ||||||
| Cash used for financing activities | (6,071) | (2,764) | ||||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | (99) | 107 | ||||||
| Summary | ||||||||
| Increase (decrease) in cash, cash equivalents and restricted cash | (2,075) | 2,728 | ||||||
| Cash, cash equivalents and restricted cash at beginning of year | 5,108 | 2,380 | ||||||
| Cash, cash equivalents and restricted cash at end of year | $ | 3,033 | $ | 5,108 | ||||
| Less: Restricted cash and cash equivalents, included in "Other current assets" | 45 | 4 | ||||||
| Cash and cash equivalents at end of year | $ | 2,988 | $ | 5,104 | ||||
9
Dow Inc. and Subsidiaries
Net Sales by Segment and Geographic Region
| Net Sales by Segment | Three Months Ended | Twelve Months Ended | ||||||||||||
| In millions (Unaudited) | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2021 | Dec 31, 2020 | ||||||||||
| Packaging & Specialty Plastics | $ | 7,189 | $ | 5,126 | $ | 28,128 | $ | 18,301 | ||||||
| Industrial Intermediates & Infrastructure | 4,548 | 3,501 | 16,851 | 12,021 | ||||||||||
| Performance Materials & Coatings | 2,558 | 2,029 | 9,672 | 7,951 | ||||||||||
| Corporate | 69 | 50 | 317 | 269 | ||||||||||
| Total | $ | 14,364 | $ | 10,706 | $ | 54,968 | $ | 38,542 | ||||||
| U.S. & Canada | $ | 5,182 | $ | 3,697 | $ | 19,613 | $ | 13,582 | ||||||
EMEAI 1 | 5,086 | 3,575 | 19,746 | 12,969 | ||||||||||
| Asia Pacific | 2,620 | 2,315 | 10,043 | 8,165 | ||||||||||
| Latin America | 1,476 | 1,119 | 5,566 | 3,826 | ||||||||||
| Total | $ | 14,364 | $ | 10,706 | $ | 54,968 | $ | 38,542 | ||||||
| Net Sales Variance by Segment and Geographic Region | Three Months Ended Dec 31, 2021 | Twelve Months Ended Dec 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||
| Local Price & Product Mix | Currency | Volume | Total | Local Price & Product Mix | Currency | Volume | Total | ||||||||||||||||||||||||||||||||||||||||
| Percent change from prior year | |||||||||||||||||||||||||||||||||||||||||||||||
| Packaging & Specialty Plastics | 44 | % | (1) | % | (3) | % | 40 | % | 50 | % | 2 | % | 2 | % | 54 | % | |||||||||||||||||||||||||||||||
| Industrial Intermediates & Infrastructure | 38 | (1) | (7) | 30 | 40 | 2 | (2) | 40 | |||||||||||||||||||||||||||||||||||||||
| Performance Materials & Coatings | 30 | — | (4) | 26 | 19 | 2 | 1 | 22 | |||||||||||||||||||||||||||||||||||||||
| Total | 39 | % | (1) | % | (4) | % | 34 | % | 40 | % | 2 | % | 1 | % | 43 | % | |||||||||||||||||||||||||||||||
| Total, excluding the Hydrocarbons & Energy business | 37 | % | (1) | % | (7) | % | 29 | % | 37 | % | 2 | % | (2) | % | 37 | % | |||||||||||||||||||||||||||||||
| U.S. & Canada | 39 | % | — | % | 1 | % | 40 | % | 42 | % | — | % | 2 | % | 44 | % | |||||||||||||||||||||||||||||||
EMEAI 1 | 47 | (2) | (3) | 42 | 45 | 4 | 3 | 52 | |||||||||||||||||||||||||||||||||||||||
| Asia Pacific | 26 | — | (13) | 13 | 25 | 2 | (4) | 23 | |||||||||||||||||||||||||||||||||||||||
| Latin America | 42 | — | (10) | 32 | 48 | — | (3) | 45 | |||||||||||||||||||||||||||||||||||||||
| Total | 39 | % | (1) | % | (4) | % | 34 | % | 40 | % | 2 | % | 1 | % | 43 | % | |||||||||||||||||||||||||||||||
| Net Sales Variance by Segment and Geographic Region | Three Months Ended Dec 31, 2021 | |||||||||||||||||||||||||||||||
| Local Price & Product Mix | Currency | Volume | Total | |||||||||||||||||||||||||||||
| Percent change from prior quarter | ||||||||||||||||||||||||||||||||
| Packaging & Specialty Plastics | (4) | % | — | % | (3) | % | (7) | % | ||||||||||||||||||||||||
| Industrial Intermediates & Infrastructure | 4 | (1) | (2) | 1 | ||||||||||||||||||||||||||||
| Performance Materials & Coatings | 10 | (1) | (8) | 1 | ||||||||||||||||||||||||||||
| Total | 1 | % | (1) | % | (3) | % | (3) | % | ||||||||||||||||||||||||
| Total, excluding the Hydrocarbons & Energy business | 3 | % | (1) | % | (5) | % | (3) | % | ||||||||||||||||||||||||
| U.S. & Canada | (5) | % | — | % | — | % | (5) | % | ||||||||||||||||||||||||
EMEAI 1 | 4 | (2) | (5) | (3) | ||||||||||||||||||||||||||||
| Asia Pacific | 8 | — | (6) | 2 | ||||||||||||||||||||||||||||
| Latin America | (1) | — | (4) | (5) | ||||||||||||||||||||||||||||
| Total | 1 | % | (1) | % | (3) | % | (3) | % | ||||||||||||||||||||||||
1.Europe, Middle East, Africa, and India.
10
Dow Inc. and Subsidiaries
Selected Financial Information and Non-GAAP Measures
| Operating EBIT by Segment | Three Months Ended | Twelve Months Ended | |||||||||||||||
| In millions (Unaudited) | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2021 | Dec 31, 2020 | |||||||||||||
| Packaging & Specialty Plastics | $ | 1,442 | $ | 780 | $ | 6,638 | $ | 2,325 | |||||||||
| Industrial Intermediates & Infrastructure | 595 | 296 | 2,282 | 355 | |||||||||||||
| Performance Materials & Coatings | 295 | 50 | 866 | 314 | |||||||||||||
| Corporate | (67) | (72) | (253) | (279) | |||||||||||||
| Total | $ | 2,265 | $ | 1,054 | $ | 9,533 | $ | 2,715 | |||||||||
| Depreciation and Amortization by Segment | Three Months Ended | Twelve Months Ended | |||||||||||||||
| In millions (Unaudited) | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2021 | Dec 31, 2020 | |||||||||||||
| Packaging & Specialty Plastics | $ | 316 | $ | 342 | $ | 1,358 | $ | 1,372 | |||||||||
| Industrial Intermediates & Infrastructure | 131 | 155 | 612 | 605 | |||||||||||||
| Performance Materials & Coatings | 200 | 222 | 842 | 870 | |||||||||||||
| Corporate | 8 | 7 | 30 | 27 | |||||||||||||
| Total | $ | 655 | $ | 726 | $ | 2,842 | $ | 2,874 | |||||||||
| Operating EBITDA by Segment | Three Months Ended | Twelve Months Ended | |||||||||||||||
| In millions (Unaudited) | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2021 | Dec 31, 2020 | |||||||||||||
| Packaging & Specialty Plastics | $ | 1,758 | $ | 1,122 | $ | 7,996 | $ | 3,697 | |||||||||
| Industrial Intermediates & Infrastructure | 726 | 451 | 2,894 | 960 | |||||||||||||
| Performance Materials & Coatings | 495 | 272 | 1,708 | 1,184 | |||||||||||||
| Corporate | (59) | (65) | (223) | (252) | |||||||||||||
| Total | $ | 2,920 | $ | 1,780 | $ | 12,375 | $ | 5,589 | |||||||||
| Equity in Earnings (Losses) of Nonconsolidated Affiliates by Segment | Three Months Ended | Twelve Months Ended | |||||||||||||||
| In millions (Unaudited) | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2021 | Dec 31, 2020 | |||||||||||||
| Packaging & Specialty Plastics | $ | 130 | $ | 77 | $ | 490 | $ | 173 | |||||||||
| Industrial Intermediates & Infrastructure | 90 | 36 | 471 | (166) | |||||||||||||
| Performance Materials & Coatings | 2 | 2 | 7 | 6 | |||||||||||||
| Corporate | 2 | (9) | 7 | (31) | |||||||||||||
| Total | $ | 224 | $ | 106 | $ | 975 | $ | (18) | |||||||||
| Reconciliation of "Net Income" to "Operating EBIT" | Three Months Ended | Twelve Months Ended | |||||||||||||||
| In millions (Unaudited) | Sep 30, 2021 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2021 | Dec 31, 2020 | ||||||||||||
| Net income | $ | 1,706 | $ | 1,761 | $ | 1,254 | $ | 6,405 | $ | 1,294 | |||||||
| + Provision for income taxes | 542 | 357 | 562 | 1,740 | 777 | ||||||||||||
| Income before income taxes | $ | 2,248 | $ | 2,118 | $ | 1,816 | $ | 8,145 | $ | 2,071 | |||||||
| - Interest income | 14 | 20 | 11 | 55 | 38 | ||||||||||||
| + Interest expense and amortization of debt discount | 178 | 170 | 210 | 731 | 827 | ||||||||||||
| - Significant items | (474) | 3 | 961 | (712) | 145 | ||||||||||||
| Operating EBIT (non-GAAP) | $ | 2,886 | $ | 2,265 | $ | 1,054 | $ | 9,533 | $ | 2,715 | |||||||
11
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 | ||||||||||
Indemnifications and other transaction related costs 6 | 35 | 35 | 0.05 | Sundry income (expense) - net | ||||||||||
Income tax related items 9 | — | 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 | ||||||||
| Significant Items Impacting Results for the Three Months Ended Dec 31, 2020 | ||||||||||||||
| In millions, except per share amounts (Unaudited) | Pretax 1 | Net Income 2 | EPS 3 | Income Statement Classification | ||||||||||
| Reported results | $ | 1,816 | $ | 1,236 | $ | 1.65 | ||||||||
| Less: Significant items | ||||||||||||||
| Integration and separation costs | (65) | (50) | (0.07) | Integration and separation costs | ||||||||||
Restructuring, implementation costs and asset related credits - net 5 | 1 | 2 | — | Cost of sales ($7 million); SG&A ($3 million); offset by Restructuring, goodwill impairment and asset related charges - net $11 million | ||||||||||
| Warranty accrual adjustment of exited business | 11 | 8 | 0.01 | Cost of sales | ||||||||||
Net gain on divestiture and asset sale 7 | 497 | 469 | 0.63 | Sundry income (expense) - net | ||||||||||
Litigation related charges, awards and adjustments 8 | 538 | 481 | 0.65 | Sundry income (expense) - net | ||||||||||
Indemnification and other transaction related costs 6 | (21) | (21) | (0.03) | Sundry income (expense) - net | ||||||||||
Income tax related items 9 | — | (260) | (0.35) | Provision for income taxes on continuing operations | ||||||||||
| Total significant items | $ | 961 | $ | 629 | $ | 0.84 | ||||||||
| Operating results (non-GAAP) | $ | 855 | $ | 607 | $ | 0.81 | ||||||||
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.Includes restructuring charges, asset related 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.Primarily related to a gain on the sale of marine and terminal operations and assets in the U.S.
8.Related to a gain associated with a legal matter with Nova Chemicals Corporation ("Nova").
9.2021 includes reversals of certain tax valuation allowances partially offset by charges related to uncertain tax positions. 2020 includes tax valuation allowances recorded in the U.S., primarily due to the filing of the final combined Dow and DuPont tax return.
12
Dow Inc. and Subsidiaries
Selected Financial Information and Non-GAAP Measures
| Significant Items Impacting Results for the Twelve Months Ended Dec 31, 2021 | ||||||||||||||
| In millions, except per share amounts (Unaudited) | Pretax 1 | Net Income 2 | EPS 3 | Income Statement Classification | ||||||||||
| Reported results | $ | 8,145 | $ | 6,311 | $ | 8.38 | ||||||||
| Less: Significant items | ||||||||||||||
Digitalization program costs 4 | (169) | (132) | (0.17) | Cost of sales ($146 million); R&D ($4 million); SG&A ($19 million) | ||||||||||
Restructuring, implementation costs and asset related charges - net 5 | (69) | (55) | (0.07) | Cost of sales ($50 million); R&D ($8 million); SG&A ($5 million); Restructuring, goodwill impairment and asset related charges - net ($6 million) | ||||||||||
| Loss on early extinguishment of debt | (574) | (471) | (0.63) | Sundry income (expense) - net | ||||||||||
| Net gain on divestitures and asset sale | 16 | 16 | 0.02 | Sundry income (expense) - net | ||||||||||
| Litigation related charges, awards and adjustments | 54 | 42 | 0.06 | Sundry income (expense) - net | ||||||||||
Indemnifications and other transaction related costs 6 | 30 | 30 | 0.04 | Sundry income (expense) - net | ||||||||||
Income tax related items 9 | — | 111 | 0.15 | Provision for income taxes on continuing operations | ||||||||||
| Total significant items | $ | (712) | $ | (459) | $ | (0.60) | ||||||||
| Operating results (non-GAAP) | $ | 8,857 | $ | 6,770 | $ | 8.98 | ||||||||
| Significant Items Impacting Results for the Twelve Months Ended Dec 31, 2020 | ||||||||||||||
| In millions, except per share amounts (Unaudited) | Pretax 1 | Net Income 2 | EPS 3 | Income Statement Classification | ||||||||||
| Reported results | $ | 2,071 | $ | 1,225 | $ | 1.64 | ||||||||
| Less: Significant items | ||||||||||||||
| Integration and separation costs | (239) | (186) | (0.25) | Integration and separation costs | ||||||||||
Restructuring, implementation costs and asset related charges - net 5 | (718) | (578) | (0.79) | Cost of sales ($7 million); SG&A ($3 million); Restructuring, goodwill impairment and asset related charges - net ($708 million) | ||||||||||
| Warranty accrual adjustment of exited business | 11 | 8 | 0.01 | Cost of sales | ||||||||||
Net gain on divestitures and asset sale 7 | 717 | 664 | 0.89 | Sundry income (expense) - net | ||||||||||
Litigation related charges, awards and adjustments 8 | 544 | 487 | 0.66 | Sundry income (expense) - net | ||||||||||
| Loss on early extinguishment of debt | (149) | (122) | (0.16) | Sundry income (expense) - net | ||||||||||
Indemnification and other transaction related costs 6 | (21) | (21) | (0.03) | Sundry income (expense) - net | ||||||||||
Income tax related items 9 | — | (260) | (0.35) | Provision for income taxes on continuing operations | ||||||||||
| Total significant items | $ | 145 | $ | (8) | $ | (0.02) | ||||||||
| Operating results (non-GAAP) | $ | 1,926 | $ | 1,233 | $ | 1.66 | ||||||||
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.Includes restructuring charges, asset related 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.Primarily related to a gain on the sale of rail infrastructure in the U.S. & Canada and a gain on the sale of marine and terminal operations and assets in the U.S.
8.Includes a gain associated with a legal matter with Nova.
9.2021 includes reversals of certain tax valuation allowances partially offset by charges related to uncertain tax positions. 2020 includes tax valuation allowances recorded in the U.S., primarily due to the filing of the final combined Dow and DuPont tax return.
13
Dow Inc. and Subsidiaries
Selected Financial Information and Non-GAAP Measures
Reconciliation of Free Cash Flow | Three Months Ended | Twelve Months Ended | ||||||||||||
| In millions (Unaudited) | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2021 | Dec 31, 2020 | ||||||||||
| Cash provided by operating activities - continuing operations (GAAP) | $ | 2,557 | $ | 1,656 | $ | 7,069 | $ | 6,252 | ||||||
| Capital expenditures | (466) | (297) | (1,501) | (1,252) | ||||||||||
Free cash flow (non-GAAP) 1 | $ | 2,091 | $ | 1,359 | $ | 5,568 | $ | 5,000 | ||||||
1.Free cash flow for the twelve months ended December 31, 2021 reflects a $1 billion elective pension contribution.
Reconciliation of Cash Flow Conversion | Three Months Ended | |||||||||||||
| Mar 31, 2021 | Jun 30, 2021 | Sep 30, 2021 | Dec 31, 2021 | |||||||||||
| In millions (Unaudited) | ||||||||||||||
| Cash provided by (used for) operating activities - continuing operations (GAAP) | $ | (228) | $ | 2,021 | $ | 2,719 | $ | 2,557 | ||||||
| Operating EBITDA (non-GAAP) | 2,271 | 3,573 | 3,611 | 2,920 | ||||||||||
Cash flow conversion (Operating EBITDA to cash flow from operations) (non-GAAP) 1 | (10.0) | % | 56.6 | % | 75.3 | % | 87.6 | % | ||||||
| Cash flow conversion - trailing twelve months (non-GAAP) | 57.1 | % | ||||||||||||
1.Cash flow conversion in the first quarter of 2021 reflects a $1 billion elective pension contribution.
14