Dow reports first quarter 2022 results
Dow reported a robust first quarter with GAAP EPS of $2.11 and operating EPS of $2.34, reflecting a 28% increase in net sales to $15.3 billion. Equity earnings stood at $174 million, while operating EBIT rose $865 million year-over-year to $2.4 billion. The company announced a $3 billion share repurchase program, highlighting strong performance despite rising energy costs. Cash flow from operations totaled $1.6 billion, up significantly from the previous year, although it decreased sequentially. Dow looks to sustain these gains amidst ongoing geopolitical challenges.
- Net sales increased 28% year-over-year to $15.3 billion.
- Operating EBIT rose $865 million year-over-year to $2.4 billion.
- Operating EPS increased to $2.34 from $1.36 a year ago.
- Announced a $3 billion share repurchase program.
- Cash flow from operations was $1.6 billion, significantly up from the previous year.
- Equity earnings declined by $50 million year-over-year.
- Operating EBIT margins decreased in several segments due to higher raw material costs.
MIDLAND, Mich., April 21, 2022 /PRNewswire/ --
- 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 , up28% versus the year-ago period, reflecting gains in all operating segments, businesses and regions. Sequentially, net sales were up6% , 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 increased2% , 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 up5% , 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 increased7% , 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 billion 2 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 | |||||
GAAP Income, Net of Tax | |||||
Operating EBIT¹ | |||||
Operating EBIT Margin¹ | 280 bps | 10 bps | |||
Operating EBITDA¹ | |||||
GAAP Earnings Per Share | |||||
Operating Earnings Per Share¹ | |||||
Cash Provided by (Used for) | |||||
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 |
®TM Trademark of The Dow Chemical Company ("Dow") or an affiliated company of Dow | |
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
SEGMENT HIGHLIGHTS
Packaging & Specialty Plastics
Three Months Ended March 31 | Three Months Ended December 31 | ||||
In millions, except margin | 1Q22 | 1Q21 | vs. SQLY [B / (W)] | 4Q21 | vs. PQ [B / (W)] |
Net Sales | |||||
Operating EBIT | |||||
Operating EBIT Margin | 16.2 % | (400) bps | (390) bps | ||
Equity Earnings | |||||
Packaging & Specialty Plastics segment net sales in the quarter were
Equity earnings were
Operating EBIT was
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 | 1Q22 | 1Q21 | vs. SQLY [B / (W)] | 4Q21 | vs. PQ [B / (W)] |
Net Sales | |||||
Operating EBIT | |||||
Operating EBIT Margin | 560 bps | 150 bps | |||
Equity Earnings | |||||
Industrial Intermediates & Infrastructure segment net sales in the quarter were
Equity earnings were
Operating EBIT was
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 | 1Q22 | 1Q21 | vs. SQLY [B / (W)] | 4Q21 | vs. PQ [B / (W)] |
Net Sales | |||||
Operating EBIT | |||||
Operating EBIT Margin | 1,660 bps | 800 bps | |||
Equity Earnings | |||||
Performance Materials & Coatings segment net sales in the quarter were
Operating EBIT was
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.
"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
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.
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
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
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, | Mar 31, | |||
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, | Dec 31, | ||
Assets | ||||
Current Assets | ||||
Cash and cash equivalents | $ 3,143 | $ 2,988 | ||
Accounts and notes receivable: | ||||
Trade (net of allowance for doubtful receivables - 2022: | 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: | 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: | 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 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, | Mar 31, | |||
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, | Mar 31, | ||
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 | 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 | 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, | Mar 31, | ||
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, | Mar 31, | ||
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, | Mar 31, | ||
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, | Mar 31, | ||
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, | Mar 31, | ||
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 | 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 ( R&D ( | ||||
Restructuring, implementation costs and | (10) | (8) | (0.01) | Cost of sales ( R&D ( | ||||
Russia / Ukraine conflict charges 6 | (186) | (142) | (0.19) | Restructuring and asset related charges | ||||
Indemnification and other transaction | 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 | 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 ( SG&A ( |
Restructuring, implementation costs and | (10) | (8) | (0.01) | Cost of sales ( R&D ( |
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 | 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 ( | ||||
Restructuring, implementation costs and | — | — | — | Cost of sales ( | ||||
Net gain on divestitures and asset sale | 16 | 16 | 0.02 | Sundry income (expense) - net | ||||
Indemnification and other transaction | 35 | 35 | 0.05 | Sundry income (expense) - net | ||||
Income tax related items 7 | — | 111 | 0.15 | Provision for income taxes on | ||||
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, | Mar 31, |
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 |
Reconciliation of Cash Flow Conversion | Three Months Ended | |||
In millions (Unaudited) | Jun 30, | Sep 30, | Dec 31, | Mar 31, |
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 | 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 +1 989-638-5265 | Media: Kyle Bandlow +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
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