DOW
$53.13
Dow
($.14)
(.26%)
Earnings Details
3rd Quarter September 2019
Thursday, October 24, 2019 6:00:00 AM
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Summary

Dow Beats

Dow (DOW) reported 3rd Quarter September 2019 earnings of $0.91 per share on revenue of $10.8 billion. The consensus earnings estimate was $0.72 per share on revenue of $10.7 billion. The Earnings Whisper number was $0.75 per share.

Dow Chemical Co is as an integrated science and technology company. The Company operates in five segments: Agricultural Sciences, Consumer Solutions, Infrastructure Solutions, Performance Materials & Chemicals and Performance Plastics.

Results
Reported Earnings
$0.91
Earnings Whisper
$0.75
Consensus Estimate
$0.72
Reported Revenue
$10.76 Bil
Revenue Estimate
$10.74 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Dow reports third quarter 2019 results

MIDLAND, Mich.--(BUSINESS WIRE)--Dow (NYSE: DOW):

FINANCIAL HIGHLIGHTS

  • GAAP EPS from continuing operations of $0.45; Operating EPS¹ of $0.91 versus pro forma results of $1.34 in the year-ago period. Operating EPS excludes significant items in the quarter, totaling $0.46 per share, primarily related to: environmental charges; integration and separation costs; and a gain associated with litigation matters.
  • GAAP Net Income of $347 million; Operating EBIT¹ of $1.1 billion versus pro forma results of $1.6 billion in the year-ago period.
  • Net Sales were $10.8 billion, down 15% versus pro forma results in the year-ago period, driven by lower local prices primarily due to declines in global energy prices.
  • Volume declined 2% versus pro forma results in the year-ago period. Demand growth in packaging, polyurethanes and silicones applications was more than offset by lower hydrocarbon co-product sales, resulting from a lighter feedstock slate in Europe, and increased ethylene integration from the startup of new U.S. Gulf Coast assets. Excluding the Hydrocarbons & Energy business, volume rose 1%.
  • Local price declined 12% versus pro forma results in the year-ago period, driven primarily by decreases in polyethylene, hydrocarbon co-products, siloxanes and isocyanates. Currency decreased sales by 1%.
  • Equity losses were $44 million, compared to pro forma equity earnings of $135 million in the year-ago period. The reduction was primarily due to lower results at the Kuwait joint ventures, driven by margin compression in monoethylene glycol (MEG) and polyethylene.
  • Operating EBIT was $1.1 billion, down from pro forma results of $1.6 billion in the year-ago period, reflecting margin compression and the impact from lost production in Argentina. These factors were partly offset by savings from cost synergies and stranded cost removal, as well as new capacity on the U.S. Gulf Coast. Sequentially, Operating EBIT rose $58 million and Operating EBIT Margin expanded 80 basis points (bps), driven by lower planned maintenance spending in the Industrial Solutions business and margin expansion in Packaging & Specialty Plastics.
  • Completed the Materials Science Division $1.365 billion cost synergy program and removed $40 million of stranded costs in the quarter.
  • Cash provided by operating activities – continuing operations was $1.8 billion, up $1.6 billion versus the year-ago period. Capital expenditures in the quarter were $472 million and free cash flow2 was $1.3 billion.
  • Returned $0.6 billion to shareholders in the quarter, including $0.5 billion in dividends and $0.1 billion in share repurchases.

SUMMARY FINANCIAL RESULTS

 

Three Months Ended September 30

Three Months Ended June 30

In millions, except per share amounts

3Q19

As Reported

3Q183

Pro Forma

vs. SQLY

[B / (W)]

2Q19

As Reported

vs. PQ

[B / (W)]

Net Sales

$10,764

$12,697

$(1,933)

$11,014

$(250)

Operating EBIT¹

$1,117

$1,611

$(494)

$1,059

$58

Operating EBIT Margin¹

10.4%

12.7%

(230) bps

9.6%

80 bps

Operating EBITDA¹

$1,856

$2,343

$(487)

$1,802

$54

Operating EPS¹

$0.91

$1.34

$(0.43)

$0.86

$0.05

Cash provided by operating activities – continuing ops

$1,790

$203

$1,587

$960

$830

  1. Op. EPS, Op. EBIT, Op. EBIT Margin and Op. EBITDA are non-GAAP measures. See page 13 for further discussion.
  2. Free cash flow is defined as cash flows from operating activities - continuing operations, excluding the impact of ASU 2016-15, less capital expenditures.
  3. Financial information for the three months ended September 30, 2018 was prepared on a pro forma basis and determined in accordance with
    Article 11 of Regulation S-X.

CEO QUOTE

Jim Fitterling, chief executive officer, commented on the quarter:

“Our results this quarter demonstrated the Dow team’s focus on managing operational levers in response to a difficult business environment. We grew volume in our packaging, polyurethanes and silicones businesses, and once again successfully leveraged our industry-leading feedstock flexibility in the U.S. and Europe. Our team also took actions to improve pricing – with notable improvements in the Packaging and Specialty Plastics business toward the end of the quarter. Further, we continued to drive down our cost structure, completing the $1.365 billion cost synergy program and removing $40 million of stranded costs. Together, these factors delivered sequential earnings, margins and free cash flow improvements. Overall, our results showcased the strengths of the Dow portfolio and team.”

SEGMENT HIGHLIGHTS

Packaging & Specialty Plastics

 

Three Months Ended September 30

Three Months Ended June 30

In millions, except margin percentages

3Q19

3Q18

vs. SQLY

[B / (W)]

2Q19

vs. PQ

[B / (W)]

Net Sales

$5,062

$6,157

$(1,095)

$5,205

$(143)

Operating EBIT

$798

$857

$(59)

$768

$30

Operating EBIT Margin

15.8%

13.9%

190 bps

14.8%

100 bps

Equity Earnings (Losses)

$23

$83

$(60)

$74

$(51)

Packaging & Specialty Plastics net sales were $5.1 billion, down $1.1 billion versus pro forma results in the year-ago period. Volume declined 4% as growth in Packaging and Specialty Plastics was more than offset by a decline in Hydrocarbons & Energy. Local price declined 13%, and currency decreased net sales by 1%.

Packaging and Specialty Plastics reported a decline in net sales as volume growth was more than offset by reduced prices. Volume gains were reported in Asia Pacific and Europe, Middle East, Africa & India. Lower volume in Latin America was due to restricted monomer supply as ethylene operations in Argentina were offline through the quarter. The business reported the strongest end-market growth in industrial and consumer packaging, flexible food and specialty packaging, and health and hygiene applications.

Hydrocarbons & Energy reported a net sales decline on lower volume and price. The sales volume decline was driven primarily by: lighter feedstock usage in Europe, leading to lower co-product production volumes; increased ethylene integration (lower merchant sales) from the startup of new U.S. Gulf Coast assets; and planned turnaround activity in Europe.

Equity earnings for the segment were $23 million, down from pro forma equity earnings of $83 million in the year-ago period. The decline was primarily driven by lower earnings from the Kuwait joint ventures and increased equity losses from Sadara.

Operating EBIT was $798 million, down $59 million versus pro forma results in the year-ago period. Margin expansion, contributions from new capacity and cost synergy savings were more than offset by lower equity earnings.

In September, a judgment was entered by The Court of the Queen’s Bench in Alberta, Canada ordering Nova Chemicals to pay the Company approximately CAD$1.43 billion (equivalent to approximately USD$1.08 billion). The judgment relates to an initial ruling in June 2018 where the court found that Nova violated several contractual agreements related to ethane allocation and ethylene production under a jointly-owned ethylene asset. The judgment is subject to appeal. On October 10, 2019, Dow received the related cash payment (net of tax withholding) of USD$0.8 billion. Subsequently, the Company issued a make whole call for the full redemption of $1.25 billion of notes due in 2021, further reducing debt.

Industrial Intermediates & Infrastructure

 

Three Months Ended September 30

Three Months Ended June 30

In millions, except margin percentages

3Q19

3Q18

vs. SQLY

[B / (W)]

2Q19

vs. PQ

[B / (W)]

Net Sales

$3,365

$3,913

$(548)

$3,342

$23

Operating EBIT

$193

$466

$(273)

$154

$39

Operating EBIT Margin

5.7%

11.9%

(620) bps

4.6%

110 bps

Equity Earnings (Losses)

$(70)

$54

$(124)

$(78)

$8

Industrial Intermediates & Infrastructure net sales were $3.4 billion, down $548 million versus pro forma results in the year-ago period. Volume was flat, local price declined 13%, and currency decreased net sales by 1%.

Polyurethanes & Construction Chemicals reported a net sales decline, as modest volume growth was more than offset by price declines, led by lower components (isocyanates and polyols) prices. Local price declines were reported in all geographic regions. Volume growth was led by the U.S. & Canada on improved supply of methylene diphenyl diisocyanate (MDI), as the year-ago period was impacted by planned turnaround activity. In addition, volume growth continued in polyurethane systems, as the business marked 25 consecutive quarters of year-over-year volume growth.

Industrial Solutions reported lower net sales, primarily driven by price declines that reflected lower feedstock costs. The business reported a modest decline in volume, driven by reduced demand in energy, agricultural and automotive end-markets, which more than offset growth in catalyst applications and pharma end-markets.

Equity losses for the segment were $70 million, down from pro forma equity earnings of $54 million in the year-ago period, primarily due to margin compression in isocyanates at Sadara and MEG at the Kuwait joint ventures.

Operating EBIT was $193 million, down $273 million versus pro forma results in the year-ago period, primarily due to lower equity earnings and margin compression in isocyanates and MEG.

Performance Materials & Coatings

 

Three Months Ended September 30

Three Months Ended June 30

In millions, except margin percentages

3Q19

3Q18

vs. SQLY

[B / (W)]

2Q19

vs. PQ

[B / (W)]

Net Sales

$2,250

$2,552

$(302)

$2,356

$(106)

Operating EBIT

$200

$398

$(198)

$214

$(14)

Operating EBIT Margin

8.9%

15.6%

(670) bps

9.1%

(20) bps

Equity Earnings (Losses)

$2

$3

$(1)

$1

$1

Performance Materials & Coatings net sales were $2.3 billion, down $302 million versus pro forma results in the year-ago period. Local price declined 10%, volume declined by 1%, and currency decreased net sales by 1%.

Consumer Solutions reported a decline in net sales as volume growth in Asia Pacific and the U.S. & Canada was more than offset by local price declines in all geographic regions, led by lower siloxanes prices. The business reported year-over-year volume growth in the infrastructure end-market, as well as improved demand for siloxanes in Asia Pacific. These more than offset demand contraction in automotive and consumer electronics end-markets.

Coatings & Performance Monomers reported lower net sales on declines in local price and volume. Coatings volume declined, primarily driven by lower demand in U.S. & Canada architectural coatings and in Asia Pacific industrial coatings end-markets. Performance Monomers volume declined, primarily due to lower merchant sales of acrylates in North America.

Operating EBIT was $200 million, down $198 million versus pro forma results in the year-ago period, primarily due to margin compression in siloxanes and lower coatings and monomers demand.

OUTLOOK

“Over the past year, we have made strong progress on our operational and financial playbook for the new Dow,” said Fitterling. “We have taken prudent actions to adapt quickly to the macro environment and to preserve our financial strength. Moving forward, we will continue to leverage our feedstock flexibility; advance lower-risk, higher-return growth investments; and achieve our stranded cost removal target. We will also remain steadfast in driving improvements to our free cash flow – demonstrated by our recent debt redemption announcement, which will use the cash payment from the Nova judgment. These actions enable us to manage the current environment and place us in a strong competitive position when the industrial economy rebounds.”

Conference Call

Dow will host a live webcast of its third 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 one of the broadest technology sets in the industry with asset integration, focused innovation and global scale to achieve profitable growth and become the most innovative, customer centric, inclusive and sustainable materials science company. Dow’s portfolio of performance materials, industrial intermediates and plastics businesses delivers a broad range of differentiated science-based products and solutions for our customers in high-growth segments, such as packaging, infrastructure and consumer care. Dow operates 113 manufacturing sites in 31 countries and employs approximately 37,000 people. Dow delivered pro forma sales of approximately $50 billion in 2018. 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

This press release contains “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. In this context, forward-looking statements often address expected future business and financial performance, financial condition, and other matters, and often contain words 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. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements.

Forward-looking statements include, but are not limited to, expectations as to future sales of Dow’s products; the ability to protect Dow’s intellectual property in the United States and abroad; estimates regarding Dow’s capital requirements and need for and availability of financing; estimates of Dow’s expenses, future revenues and profitability; estimates of the size of the markets for Dow’s products and services and Dow’s ability to compete in such markets; expectations related to the rate and degree of market acceptance of Dow’s products; the outcome of certain Dow contingencies, such as litigation and environmental matters; estimates of the success of competing technologies that may become available and expectations regarding the benefits and costs associated with each of the foregoing.

Forward-looking statements by their nature address matters that are, to different degrees, uncertain. Forward-looking statements are based on certain assumptions and expectations of future events which may not be realized and speak only as of the date the statements were made. In addition, forward-looking statements also involve risks, uncertainties and other factors that are beyond Dow’s control that could cause Dow’s actual results to differ materially from those projected, anticipated or implied in the forward-looking statements. These factors include, but are not limited to: fluctuations in energy and raw material prices; failure to develop and market new products and optimally manage product life cycles; significant litigation and environmental matters; failure to appropriately manage process safety and product stewardship issues; changes in laws and regulations or political conditions; 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; ability to protect, defend and enforce Dow’s intellectual property rights; increased competition; changes in relationships with Dow’s significant customers and suppliers; unanticipated expenses such as litigation or legal settlement expenses; unanticipated business disruptions; Dow’s ability to predict, identify and interpret changes in consumer preferences and demand; Dow’s ability to complete proposed divestitures or acquisitions; Dow’s ability to realize the expected benefits of acquisitions if they are completed; the availability of financing to Dow in the future and the terms and conditions of such financing; and disruptions in Dow’s information technology networks and systems. Additionally, 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.

Risks related to achieving the anticipated benefits of our separation from DowDuPont Inc. include, but are not limited to, a number of conditions including risks outside the control of Dow including risks related to (i) Dow’s inability to achieve some or all of the benefits that it expects to receive from the separation from DowDuPont, (ii) certain tax risks associated with the separation, (iii) Dow’s inability to make necessary changes to operate as a stand-alone company, (iv) the failure of Dow’s pro forma financial information to be a reliable indicator of Dow’s future results, (v) Dow’s inability to enjoy the same benefits of diversity, leverage and market reputation that it enjoyed as a combined company, (vi) Dow’s inability to receive third-party consents required under the separation agreement, (vii) Dow’s customers, suppliers and others' perception of Dow’s financial stability on a stand-alone basis, (viii) non-compete restrictions under the separation agreement, (ix) receipt of less favorable terms in the commercial agreements we entered into with E. I. du Pont de Nemours and Company n/k/a/ 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 (x) 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. For a more detailed discussion of Dow’s risks and uncertainties, see the section titled “Risk Factors” contained in Dow Inc. and TDCC’s combined Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2019, in the Current Report on Form 8-K of Dow Inc. and TDCC, filed with the SEC on July 25, 2019, recasting portions of the TDCC 10-K for the fiscal year ended December 31, 2018, and in Part I, Item 1A of the Annual Report on Form 10-K of TDCC for the fiscal year ended December 31, 2018. Dow Inc. 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.

Separation from DowDuPont

On April 1, 2019, DowDuPont Inc. ("DowDuPont" and effective June 3, 2019, n/k/a DuPont de Nemours, Inc. or "DuPont") completed the separation of its materials science business and Dow Inc. became the direct parent company of The Dow Chemical Company and its consolidated subsidiaries ("TDCC" and together with Dow Inc., "Dow" or the "Company"), owning all of the outstanding common shares of TDCC. For filings related to the period commencing April 1, 2019 and thereafter, TDCC was deemed the predecessor to Dow Inc., and the historical results of TDCC are deemed the historical results of Dow Inc. for periods prior to and including March 31, 2019. The information in this report reflects the results of Dow and its consolidated subsidiaries, after giving effect to the distribution to DowDuPont of TDCC’s agricultural sciences business (“AgCo”) and specialty products business (“SpecCo”) and the receipt of E. I. du Pont de Nemours and Company and its consolidated subsidiaries' (“Historical DuPont”) ethylene and ethylene copolymers business (other than its ethylene acrylic elastomers business) ("ECP").

The separation was contemplated by the merger of equals transaction effective August 31, 2017, under the Agreement and Plan of Merger, dated as of December 11, 2015, as amended on March 31, 2017. TDCC and Historical DuPont each merged with subsidiaries of DowDuPont and, as a result, TDCC and Historical DuPont became subsidiaries of DowDuPont (the “Merger”). Subsequent to the Merger, TDCC and Historical DuPont engaged in a series of internal reorganization and realignment steps to realign their businesses into three subgroups: agriculture, materials science and specialty products. Dow Inc. was formed as a wholly owned subsidiary of DowDuPont to serve as the holding company for the materials science business.

Unaudited Pro Forma Financial Information

In order to provide the most meaningful comparison of results of operations and results by segment, supplemental unaudited pro forma financial information has been included in the following financial schedules. The unaudited pro forma financial information is based on the consolidated financial statements of TDCC, adjusted to give effect to the separation from DowDuPont as if it had been consummated on January 1, 2017. For the nine months ended September 30, 2019 and the three and nine months ended September 30, 2018, pro forma adjustments have been made for (1) the margin impact of various manufacturing, supply and service related agreements entered into with DuPont and Corteva in connection with the separation which provide for different pricing than the historical intercompany and intracompany pricing practices of TDCC and Historical DuPont, (2) the removal of the amortization of ECP's inventory step-up recognized in connection with the Merger, and (3) the elimination of the impact of events directly attributable to the Merger, internal reorganization and business realignment, separation, distribution and other related transactions (e.g., one-time transaction costs). The results for the three months ended September 30, 2019, are presented under accounting principles generally accepted in the United States of America ("U.S. GAAP").

The unaudited pro forma financial information has been presented for informational purposes only and is not necessarily indicative of what Dow's results of operations actually would have been had the separation from DowDuPont been completed as of January 1, 2017, nor is it indicative of the future operating results of Dow. The unaudited pro forma information does not reflect restructuring or integration activities or other costs following the separation from DowDuPont that may be incurred to achieve cost or growth synergies of Dow. For further information on the unaudited pro forma financial information, please refer to the Company's Current Report on Form 8-K dated June 3, 2019.

Non-GAAP Financial Measures

This earnings release includes information that does not conform to U.S. GAAP and are considered non-GAAP measures. These measures include the Company's pro forma consolidated results and pro forma earnings per share on an adjusted basis. 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 13. 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 from continuing operations - diluted" excluding the after-tax impact of significant items. Pro forma operating earnings per share is defined as "Pro Forma earnings per common share from continuing operations - diluted" excluding the after-tax impact of significant items.

Operating EBIT is defined as earnings (i.e., "Income from continuing operations before income taxes") before interest, excluding the impact of significant items. Pro forma operating EBIT is defined as pro forma earnings (i.e., "Pro Forma income from continuing operations 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. Pro forma Operating EBIT margin is defined as pro forma Operating EBIT as a percentage of pro forma net sales.

Operating EBITDA is defined as earnings (i.e., "Income from continuing operations before income taxes") before interest, depreciation and amortization, excluding the impact of significant items. Pro forma operating EBITDA is defined as pro forma earnings (i.e., "Pro Forma income from continuing operations before income taxes") before interest, depreciation and amortization, excluding the impact of significant items.

Cash flows from operating activities - continuing operations, excluding the impact of Accounting Standards Update 2016-15, "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments" ("ASU 2016-15"), is defined as cash provided by (used in) operating activities - continuing operations, excluding the impact of ASU 2016-15 and related interpretive guidance. Management believes this non-GAAP financial measure is relevant and meaningful as it presents cash flows from operating activities inclusive of all trade accounts receivable collection activity, which Dow utilizes in support of its operating activities.

Free cash flow is defined as cash flows from operating activities - continuing operations, excluding the impact of ASU 2016-15, 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.

Dow Inc. and Subsidiaries

Consolidated Statements of Income

In millions, except per share amounts (Unaudited)

Three Months Ended

Nine Months Ended

Sep 30,
2019

Sep 30,
2018

Sep 30,
2019

Sep 30,
2018

Net sales

$

10,764

 

$

12,634

 

$

32,747

 

$

37,660

 

Cost of sales

9,377

 

10,456

 

27,939

 

30,976

 

Research and development expenses

194

 

193

 

592

 

622

 

Selling, general and administrative expenses

388

 

409

 

1,258

 

1,376

 

Amortization of intangibles

100

 

117

 

320

 

353

 

Restructuring and asset related charges - net

147

 

48

 

368

 

175

 

Integration and separation costs

164

 

313

 

964

 

799

 

Equity in earnings (losses) of nonconsolidated affiliates

(44

)

135

 

(73

)

529

 

Sundry income (expense) - net

301

 

(3

)

369

 

37

 

Interest income

19

 

22

 

58

 

60

 

Interest expense and amortization of debt discount

233

 

258

 

711

 

781

 

Income from continuing operations before income taxes

437

 

994

 

949

 

3,204

 

Provision for income taxes on continuing operations

90

 

280

 

356

 

755

 

Income from continuing operations, net of tax

347

 

714

 

593

 

2,449

 

Income from discontinued operations, net of tax

 

335

 

445

 

1,403

 

Net income

347

 

1,049

 

1,038

 

3,852

 

Net income attributable to noncontrolling interests

14

 

36

 

74

 

102

 

Net income available for Dow Inc. common stockholders

$

333

 

$

1,013

 

$

964

 

$

3,750

 

 

 

 

 

 

Per common share data:

 

 

 

 

Earnings per common share from continuing operations - basic

$

0.45

 

$

0.91

 

$

0.71

 

$

3.17

 

Earnings per common share from discontinued operations - basic

 

0.45

 

0.58

 

1.85

 

Earnings per common share - basic

$

0.45

 

$

1.36

 

$

1.29

 

$

5.02

 

Earnings per common share from continuing operations - diluted

$

0.45

 

$

0.91

 

$

0.71

 

$

3.17

 

Earnings per common share from discontinued operations - diluted

 

0.45

 

0.58

 

1.85

 

Earnings per common share - diluted

$

0.45

 

$

1.36

 

$

1.29

 

$

5.02

 

 

 

 

 

 

Weighted-average common shares outstanding - basic

739.8

 

747.2

 

743.3

 

747.2

 

Weighted-average common shares outstanding - diluted

743.0

 

747.2

 

746.1

 

747.2

 

Dow Inc. and Subsidiaries

Consolidated Balance Sheets

In millions, except share amounts (Unaudited)

Sep 30,
2019

Dec 31,
2018

Assets

 

 

Current Assets

 

 

Cash and cash equivalents (variable interest entities restricted - 2019: $36; 2018: $71)

$

2,823

 

$

2,724

 

Marketable securities

11

 

100

 

Accounts and notes receivable:

 

 

Trade (net of allowance for doubtful receivables - 2019: $49; 2018: $42)

5,125

 

5,646

 

Other

3,683

 

3,389

 

Inventories

6,416

 

6,899

 

Other current assets

891

 

712

 

Assets of discontinued operations - current

 

19,900

 

Total current assets

18,949

 

39,370

 

Investments

 

 

Investment in nonconsolidated affiliates

3,007

 

3,320

 

Other investments (investments carried at fair value - 2019: $1,709; 2018: $1,699)

2,737

 

2,646

 

Noncurrent receivables

881

 

360

 

Total investments

6,625

 

6,326

 

Property

 

 

Property

54,890

 

53,984

 

Less accumulated depreciation

33,887

 

32,566

 

Net property (variable interest entities restricted - 2019: $621; 2018: $683)

21,003

 

21,418

 

Other Assets

 

 

Goodwill

9,785

 

9,846

 

Other intangible assets (net of accumulated amortization - 2019: $3,748; 2018: $3,379)

3,859

 

4,225

 

Operating lease right-of-use assets

2,130

 

 

Deferred income tax assets

1,765

 

1,779

 

Deferred charges and other assets

821

 

735

 

Total other assets

18,360

 

16,585

 

Total Assets

$

64,937

 

$

83,699

 

Liabilities and Equity

 

 

Current Liabilities

 

 

Notes payable

$

517

 

$

298

 

Long-term debt due within one year

378

 

338

 

Accounts payable:

 

 

Trade

3,855

 

4,456

 

Other

2,025

 

2,479

 

Operating lease liabilities - current

418

 

 

Income taxes payable

490

 

557

 

Accrued and other current liabilities

3,518

 

2,931

 

Liabilities of discontinued operations - current

 

4,488

 

Total current liabilities

11,201

 

15,547

 

Long-Term Debt (variable interest entities nonrecourse - 2019: $44; 2018: $75)

17,213

 

19,253

 

Other Noncurrent Liabilities

 

 

Deferred income tax liabilities

380

 

501

 

Pension and other postretirement benefits - noncurrent

8,447

 

8,926

 

Asbestos-related liabilities - noncurrent

1,087

 

1,142

 

Operating lease liabilities - noncurrent

1,735

 

 

Other noncurrent obligations

6,888

 

4,709

 

Total other noncurrent liabilities

18,537

 

15,278

 

Stockholders’ Equity

 

 

Common stock (authorized 5,000,000,000 shares of $0.01 par value each;
issued 2019: 749,025,762 shares; 2018: 100 shares)

7

 

 

Additional paid-in capital

7,239

 

7,042

 

Retained earnings

19,873

 

35,460

 

Accumulated other comprehensive loss

(9,219

)

(9,885

)

Unearned ESOP shares

(95

)

(134

)

Treasury stock at cost (2019: 7,961,732 shares; 2018: zero shares)

(406

)

 

Dow Inc.’s stockholders’ equity

17,399

 

32,483

 

Noncontrolling interests

587

 

1,138

 

Total equity

17,986

 

33,621

 

Total Liabilities and Equity

$

64,937

 

$

83,699

 

 

Dow Inc. and Subsidiaries

Consolidated Statements of Cash Flows

In millions (Unaudited)

Nine Months Ended

Sep 30,
2019

Sep 30,
2018

Operating Activities

 

 

Net income

$

1,038

 

$

3,852

 

Less: Income from discontinued operations, net of tax

445

 

1,403

 

Income from continuing operations, net of tax

593

 

2,449

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

Depreciation and amortization

2,225

 

2,183

 

Provision (credit) for deferred income tax

(146

)

5

 

Earnings of nonconsolidated affiliates less than dividends received

927

 

81

 

Net periodic pension benefit cost

101

 

252

 

Pension contributions

(206

)

(1,533

)

Net gain on sales of assets, businesses and investments

(48

)

(24

)

Adjustment to gain on step acquisition of nonconsolidated affiliate

 

20

 

Restructuring and asset related charges - net

368

 

175

 

Other net loss

143

 

327

 

Changes in assets and liabilities, net of effects of acquired and divested companies:

 

 

Accounts and notes receivable

994

 

(1,422

)

Inventories

483

 

(1,120

)

Accounts payable

(926

)

1,453

 

Other assets and liabilities, net

(715

)

(1,139

)

Cash provided by operating activities - continuing operations

3,793

 

1,707

 

Cash provided by operating activities - discontinued operations

187

 

817

 

Cash provided by operating activities

3,980

 

2,524

 

Investing Activities

 

 

Capital expenditures

(1,384

)

(1,445

)

Investment in gas field developments

(71

)

(82

)

Purchases of previously leased assets

(9

)

 

Proceeds from sales of property and businesses, net of cash divested

47

 

15

 

Acquisitions of property and businesses, net of cash acquired

 

(20

)

Investments in and loans to nonconsolidated affiliates

(333

)

(11

)

Distributions and loan repayments from nonconsolidated affiliates

 

55

 

Purchases of investments

(784

)

(1,301

)

Proceeds from sales and maturities of investments

973

 

1,025

 

Proceeds from interests in trade accounts receivable conduits

 

657

 

Cash used for investing activities - continuing operations

(1,561

)

(1,107

)

Cash used for investing activities - discontinued operations

(34

)

(203

)

Cash used for investing activities

(1,595

)

(1,310

)

Financing Activities

 

 

Changes in short-term notes payable

149

 

425

 

Proceeds from issuance of long-term debt

2,146

 

 

Payments on long-term debt

(4,271

)

(859

)

Purchases of treasury stock

(406

)

 

Proceeds from issuance of parent company stock

39

 

106

 

Transaction financing, debt issuance and other costs

(61

)

 

Employee taxes paid for share-based payment arrangements

(54

)

(76

)

Distributions to noncontrolling interests

(16

)

(41

)

Purchases of noncontrolling interests

(131

)

 

Dividends paid to stockholders

(1,033

)

 

Dividends paid to DowDuPont Inc.

(535

)

(3,158

)

Settlements and transfers related to separation from DowDuPont Inc.

1,935

 

(276

)

Other financing activities, net

 

2

 

Cash used for financing activities - continuing operations

(2,238

)

(3,877

)

Cash used for financing activities - discontinued operations

(18

)

(44

)

Cash used for financing activities

(2,256

)

(3,921

)

Effect of exchange rate changes on cash, cash equivalents and restricted cash

(54

)

(59

)

Summary

 

 

Increase (decrease) in cash, cash equivalents and restricted cash

75

 

(2,766

)

Cash, cash equivalents and restricted cash at beginning of period

2,764

 

6,208

 

Cash, cash equivalents and restricted cash at end of period

$

2,839

 

$

3,442

 

Less: Restricted cash and cash equivalents, included in "Other current assets"

16

 

31

 

Cash and cash equivalents at end of period

$

2,823

 

$

3,411

 

 

Dow Inc. and Subsidiaries

Pro Forma Consolidated Statements of Income

 

Three Months Ended

Nine Months Ended

In millions, except per share amounts (Unaudited)

Sep 30,
2019

Sep 30,
2018

Sep 30,
2019

Sep 30,
2018

As Reported

Pro Forma

Pro Forma

Pro Forma

Net sales

$

10,764

 

$

12,697

 

$

32,794

 

$

37,844

 

Cost of sales

9,377

 

10,505

 

27,971

 

31,118

 

Research and development expenses

194

 

191

 

592

 

621

 

Selling, general and administrative expenses

388

 

409

 

1,258

 

1,377

 

Amortization of intangibles

100

 

118

 

320

 

353

 

Restructuring and asset related charges - net

147

 

48

 

368

 

152

 

Integration and separation costs

164

 

289

 

914

 

730

 

Equity in earnings (losses) of nonconsolidated affiliates

(44

)

135

 

(73

)

529

 

Sundry income (expense) - net

301

 

(4

)

369

 

37

 

Interest income

19

 

21

 

59

 

60

 

Interest expense and amortization of debt discount

233

 

258

 

710

 

781

 

Income from continuing operations before income taxes

437

 

1,031

 

1,016

 

3,338

 

Provision for income taxes on continuing operations

90

 

288

 

371

 

785

 

Income from continuing operations, net of tax

347

 

743

 

645

 

2,553

 

Net income attributable to noncontrolling interests

14

 

20

 

61

 

78

 

Net income from continuing operations available for Dow Inc.

common stockholders

$

333

 

$

723

 

$

584

 

$

2,475

 

 

 

 

 

 

Per common share data:

 

 

 

 

Earnings per common share from continuing operations - basic

$

0.45

 

$

0.97

 

$

0.78

 

$

3.31

 

Earnings per common share from continuing operations - diluted

$

0.45

 

$

0.97

 

$

0.78

 

$

3.31

 

 

 

 

 

 

Weighted-average common shares outstanding - basic 1

739.8

 

747.2

 

743.3

 

747.2

 

Weighted-average common shares outstanding - diluted 1

743.0

 

747.2

 

746.1

 

747.2

 

  1. The weighted-average common shares outstanding - basic and diluted for the nine months ended September 30, 2019, are the same under both U.S. GAAP and on a pro forma basis.

Dow Inc. and Subsidiaries

Net Sales by Segment and Geographic Region

Net Sales by Segment

Three Months Ended

Nine Months Ended

In millions (Unaudited)

Sep 30,
2019

Sep 30,
2018

Sep 30,
2019

Sep 30,
2018

As Reported

Pro Forma

Pro Forma

Pro Forma

Packaging & Specialty Plastics

$

5,062

 

$

6,157

 

$

15,405

 

$

18,339

 

Industrial Intermediates & Infrastructure

3,365

 

3,913

 

10,196

 

11,688

 

Performance Materials & Coatings

2,250

 

2,552

 

6,926

 

7,596

 

Corporate

87

 

75

 

267

 

221

 

Total

$

10,764

 

$

12,697

 

$

32,794

 

$

37,844

 

U.S. & Canada

$

3,932

 

$

4,658

 

$

11,970

 

$

13,744

 

EMEAI 1

3,621

 

4,390

 

11,234

 

13,270

 

Asia Pacific

2,193

 

2,372

 

6,471

 

7,056

 

Latin America

1,018

 

1,277

 

3,119

 

3,774

 

Total

$

10,764

 

$

12,697

 

$

32,794

 

$

37,844

 

Pro Forma Net Sales Variance by Segment and Geographic Region

Three Months Ended Sep 30, 2019 2

Nine Months Ended Sep 30, 2019

Local Price & Product Mix

Currency

Volume

Portfolio / Other

Total

Local Price & Product Mix

Currency

Volume

Portfolio / Other

Total

Percent change from prior year

Packaging & Specialty Plastics

(13

)%

(1

)%

(4

)%

%

(18

)%

(11

)%

(2

)%

(3

)%

%

(16

)%

Industrial Intermediates & Infrastructure

(13

)

(1

)

 

 

(14

)

(12

)

(2

)

1

 

 

(13

)

Performance Materials & Coatings

(10

)

(1

)

(1

)

 

(12

)

(5

)

(2

)

(2

)

 

(9

)

Total

(12

)%

(1

)%

(2

)%

%

(15

)%

(10

)%

(2

)%

(1

)%

%

(13

)%

Total, excluding the Hydrocarbons & Energy business

(12

)%

(1

)%

1

%

%

(12

)%

(10

)%

(2

)%

1

%

%

(11

)%

U.S. & Canada

(13

)%

%

(2

)%

(1

)%

(16

)%

(10

)%

%

(3

)%

%

(13

)%

EMEAI 1

(10

)

(3

)

(5

)

 

(18

)

(8

)

(4

)

(3

)

 

(15

)

Asia Pacific

(14

)

(1

)

7

 

 

(8

)

(12

)

(1

)

5

 

 

(8

)

Latin America

(14

)

 

(6

)

 

(20

)

(14

)

 

(3

)

 

(17

)

Total

(12

)%

(1

)%

(2

)%

%

(15

)%

(10

)%

(2

)%

(1

)%

%

(13

)%

  1. Europe, Middle East, Africa and India.
  2. As reported net sales for the three months ended September 30, 2019 compared with pro forma net sales for the three months ended September 30, 2018

Dow Inc. and Subsidiaries

Selected Financial Information and Non-GAAP Measures

Operating EBIT by Segment

Three Months Ended

Nine Months Ended

 

Sep 30,
2019

Sep 30,
2018

Sep 30,
2019

Sep 30,
2018

In millions (Unaudited)

As Reported

Pro Forma

Pro Forma

Pro Forma

Packaging & Specialty Plastics

$

798

 

$

857

 

$

2,256

 

$

2,754

 

Industrial Intermediates & Infrastructure

193

 

466

 

624

 

1,428

 

Performance Materials & Coatings

200

 

398

 

685

 

1,045

 

Corporate

(74

)

(110

)

(246

)

(280

)

Total

$

1,117

 

$

1,611

 

$

3,319

 

$

4,947

 

 

 

 

 

 

Depreciation and Amortization by Segment

Three Months Ended

Nine Months Ended

 

Sep 30,
2019

Sep 30,
2018

Sep 30,
2019

Sep 30,
2018

In millions (Unaudited)

As Reported

Pro Forma

Pro Forma

Pro Forma

Packaging & Specialty Plastics

$

366

 

$

352

 

$

1,103

 

$

1,048

 

Industrial Intermediates & Infrastructure

149

 

149

 

441

 

448

 

Performance Materials & Coatings

217

 

222

 

655

 

664

 

Corporate

7

 

9

 

26

 

23

 

Total

$

739

 

$

732

 

$

2,225

 

$

2,183

 

 

 

 

 

 

Operating EBITDA by Segment

Three Months Ended

Nine Months Ended

 

Sep 30,
2019

Sep 30,
2018

Sep 30,
2019

Sep 30,
2018

In millions (Unaudited)

As Reported

Pro Forma

Pro Forma

Pro Forma

Packaging & Specialty Plastics

$

1,164

 

$

1,209

 

$

3,359

 

$

3,802

 

Industrial Intermediates & Infrastructure

342

 

615

 

1,065

 

1,876

 

Performance Materials & Coatings

417

 

620

 

1,340

 

1,709

 

Corporate

(67

)

(101

)

(220

)

(257

)

Total

$

1,856

 

$

2,343

 

$

5,544

 

$

7,130

 

 

 

 

 

 

Equity in Earnings (Losses) of Nonconsolidated Affiliates by Segment

Three Months Ended

Nine Months Ended

 

Sep 30,
2019

Sep 30,
2018

Sep 30,
2019

Sep 30,
2018

In millions (Unaudited)

As Reported

Pro Forma

Pro Forma

Pro Forma

Packaging & Specialty Plastics

$

23

 

$

83

 

$

135

 

$

250

 

Industrial Intermediates & Infrastructure

(70

)

54

 

(196

)

299

 

Performance Materials & Coatings

2

 

3

 

3

 

4

 

Corporate

1

 

(5

)

(15

)

(24

)

Total

$

(44

)

$

135

 

$

(73

)

$

529

 

 

 

 

 

 

Reconciliation of "Income from continuing operations, net of tax" to "Operating EBIT"

Three Months Ended

Nine Months Ended

Sep 30,
2019

Sep 30,
2018

Sep 30,
2019

Sep 30,
2018

In millions (Unaudited)

As Reported

Pro Forma

Pro Forma

Pro Forma

Income from continuing operations, net of tax

$

347

 

$

743

 

$

645

 

$

2,553

 

+ Provision for income taxes on continuing operations

90

 

288

 

371

 

785

 

Income from continuing operations before income taxes

$

437

 

$

1,031

 

$

1,016

 

$

3,338

 

- Interest income

19

 

21

 

59

 

60

 

+ Interest expense and amortization of debt discount

233

 

258

 

710

 

781

 

- Significant items

(466

)

(343

)

(1,652

)

(888

)

Operating EBIT

$

1,117

 

$

1,611

 

$

3,319

 

$

4,947

 

+ Depreciation and amortization

739

 

732

 

2,225

 

2,183

 

Operating EBITDA

$

1,856

 

$

2,343

 

$

5,544

 

$

7,130

 

 

Dow Inc. and Subsidiaries

Selected Financial Information and Non-GAAP Measures

Significant Items Impacting Results for the Three Months Ended Sep 30, 2019

In millions, except per share amounts (Unaudited)

Pretax 1

Net Income 2

EPS 3

Income Statement Classification

Reported results

$

437

 

$

333

 

$

0.45

 

 

Less: Significant items

 

 

 

 

Integration and separation costs

(164

)

(132

)

(0.18

)

Integration and separation costs

Restructuring and asset related charges - net

(147

)

(115

)

(0.15

)

Restructuring and asset related charges - net

Warranty accrual adjustment of exited business

39

 

30

 

0.04

 

Cost of sales

Environmental charges 4

(399

)

(311

)

(0.42

)

Cost of sales

Litigation related charges, awards and adjustments 5

205

 

178

 

0.24

 

Sundry income (expense) - net

Loss on divestitures

 

4

 

0.01

 

Provision for income taxes on continuing operations

Total significant items

$

(466

)

$

(346

)

$

(0.46

)

 

Operating results (non-GAAP)

$

903

 

$

679

 

$

0.91

 

 

Significant Items Impacting Results for the Three Months Ended Sep 30, 2018

In millions, except per share amounts (Unaudited)

Pretax 1

Net Income 2

EPS 3

Income Statement Classification

Pro forma results

$

1,031

 

$

723

 

$

0.97

 

 

Less: Significant items

 

 

 

 

Integration and separation costs

(289

)

(251

)

(0.33

)

Integration and separation costs

Restructuring and asset related charges - net

(48

)

(37

)

(0.05

)

Restructuring and asset related charges - net

Loss on early extinguishment of debt

(6

)

(5

)

(0.01

)

Sundry income (expense) - net

Income tax related items 6

 

17

 

0.02

 

Provision for income taxes on continuing operations

Total significant items

$

(343

)

$

(276

)

$

(0.37

)

 

Operating pro forma results (non-GAAP)

$

1,374

 

$

999

 

$

1.34

 

 

  1. "Income from continuing operations before income taxes" or pro forma "Income from continuing operations before income taxes."
  2. "Net income available for Dow Inc. common stockholders" or pro forma "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 from continuing operations - diluted" or pro forma "Earnings per common share from continuing operations - diluted."
  4. Related to environmental remediation, primarily resulting from the culmination of long-standing negotiations with regulators and/or agencies and review of additional costs to manage ongoing remediation activities resulting from Dow’s separation from DowDuPont and related agreements with Corteva and DuPont.
  5. Includes a gain associated with a legal settlement with Nova, as well as a gain related to an adjustment of the Dow Silicones breast implant liability and a charge related to the settlement of the Dow Silicones commercial creditor matters.
  6. Related to effects of U.S. Tax Reform.

Dow Inc. and Subsidiaries

Selected Financial Information and Non-GAAP Measures

Significant Items Impacting Results for the Nine Months Ended Sep 30, 2019

In millions, except per share amounts (Unaudited)

Pretax 1

Net Income 2

EPS 3

Income Statement Classification

Pro forma results

$

1,016

 

$

584

 

$

0.78

 

 

Less: Significant items

 

 

 

 

Integration and separation costs

(914

)

(735

)

(0.99

)

Integration and separation costs

Restructuring and asset related charges - net

(368

)

(318

)

(0.42

)

Restructuring and asset related charges - net

Loss on divestitures

(44

)

(43

)

(0.05

)

Sundry income (expense) - net

Loss on early extinguishment of debt

(44

)

(34

)

(0.04

)

Sundry income (expense) - net

Litigation related charges, awards and

adjustments 4

205

 

178

 

0.24

 

Sundry income (expense) - net

Environmental charges 5

(399

)

(311

)

(0.42

)

Cost of sales

Indemnification and other transaction related costs 6

(127

)

(240

)

(0.32

)

Cost of sales ($75 million); Sundry income (expense) - net ($52 million); Provision for income taxes on continuing operations ($113 million)

Warranty accrual adjustment of exited business

39

 

30

 

0.04

 

Cost of sales

Total significant items

$

(1,652

)

$

(1,473

)

$

(1.96

)

 

Operating pro forma results (non-GAAP)

$

2,668

 

$

2,057

 

$

2.74

 

 

Significant Items Impacting Results for the Nine Months Ended Sep 30, 2018

In millions, except per share amounts (Unaudited)

Pretax 1

Net Income 2

EPS 3

Income Statement Classification

Pro forma results

$

3,338

 

$

2,475

 

$

3.31

 

 

Less: Significant items

 

 

 

 

Impact of Dow Silicones ownership restructure 7

(20

)

(18

)

(0.02

)

Sundry income (expense) - net

Integration and separation costs

(730

)

(613

)

(0.82

)

Integration and separation costs

Restructuring and asset related charges - net

(152

)

(125

)

(0.17

)

Restructuring and asset related charges - net

Gain on divestiture 8

20

 

15

 

0.02

 

Sundry income (expense) - net

Loss on early extinguishment of debt

(6

)

(5

)

(0.01

)

Sundry income (expense) - net

Income tax related items 9

 

10

 

0.01

 

Provision for income taxes on continuing operations

Total significant items

$

(888

)

$

(736

)

$

(0.99

)

 

Operating pro forma results (non-GAAP)

$

4,226

 

$

3,211

 

$

4.30

 

 

  1. Pro forma "Income from continuing operations before income taxes."
  2. Pro forma "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. Pro forma "Earnings per common share from continuing operations - diluted."
  4. Includes a gain associated with a legal settlement with Nova, as well as a gain related to an adjustment of the Dow Silicones breast implant liability and a charge related to the settlement of the Dow Silicones commercial creditor matters.
  5. Related to environmental remediation, primarily resulting from the culmination of long-standing negotiations with regulators and/or agencies and review of additional costs to manage ongoing remediation activities resulting from Dow’s separation from DowDuPont and related agreements with Corteva and DuPont.
  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. Post-closing adjustments related to the Dow Silicones ownership restructure.
  8. Reflects a pretax gain related to the sale of equity interests in MEGlobal.
  9. Related to effects of U.S. Tax Reform.

Reconciliation of Non-GAAP Cash Flow Measures

Three Months Ended

Nine Months Ended

In millions

Sep 30,
2019

Sep 30,
2018

Sep 30,
2019

Sep 30,
2018

Cash provided by operating activities - continuing operations (GAAP)

$

1,790

 

$

203

 

$

3,793

 

$

1,707

 

Impact of ASU 2016-15 and related interpretive guidance

 

1

 

 

657

 

Cash flows from operating activities - continuing operations, excluding impact of ASU 2016-15 (non-GAAP)

$

1,790

 

$

204

 

$

3,793

 

$

2,364

 

Capital expenditures

(472

)

(577

)

(1,384

)

(1,445

)

Free cash flow (non-GAAP)

$

1,318

 

$

(373

)

$

2,409

 

$

919

 

 

For further information, please contact:

Investors:
Neal Sheorey
nrsheorey@dow.com
+1 989-636-6347

Media:
Kyle Bandlow
kbandlow@dow.com
+1 989-638-2417

Source: Dow