MIDLAND, Mich.,
Oct. 24,
2023 /PRNewswire/ -- Dow (NYSE: DOW):
FINANCIAL HIGHLIGHTS
- GAAP earnings per share was $0.42; operating earnings per share
(EPS)1 was $0.48, compared
to $1.11 in the year-ago period and
$0.75 in the prior quarter. Operating
EPS excludes significant items in the quarter, totaling
$0.06 per share, primarily related to
costs associated with the Company's 2023 Restructuring
Program.
- Net sales were $10.7 billion,
down 24% versus the year-ago period, reflecting declines in all
operating segments due to slower global macroeconomic activity.
Sales were down 6% sequentially, as volume gains were more than
offset by lower local prices.
- Volume decreased 6% versus the year-ago period, mainly due to
declines in the merchant Hydrocarbons & Energy sales.
Sequentially, volume increased by 1%, and was up 3% excluding
merchant Hydrocarbons & Energy sales, with gains across all
operating segments.
- Local price decreased 18% year-over-year, with declines in all
operating segments and regions, primarily due to lower feedstock
and energy costs. Sequentially, local price was down 7%, primarily
reflecting lower prices in Europe,
the Middle East, Africa, and India (EMEAI).
- Currency was flat year-over-year and sequentially.
- Equity losses were $7 million,
compared to equity losses of $58
million in the year-ago period and $57 million in the prior quarter, with improved
results at all of the Company's principal joint ventures, primarily
Sadara.
- GAAP net income was $327 million.
Operating EBIT1 was $626
million, down from $1.2
billion in the
year-ago period, primarily driven by lower local prices.
Sequentially, Op. EBIT was down $259
million, driven by declines in Packaging & Specialty
Plastics and partially offset by Industrial Intermediates &
Infrastructure and Performance Materials & Coatings.
- Cash provided by operating activities – continuing operations
was $1.7 billion, down $282 million
year-over-year and up $311 million
compared to the prior quarter. The Company delivered cash flow
conversion1 of 103% on a trailing 12-month basis.
- Returns to shareholders totaled $617
million in the quarter, including $492 million in dividends and $125 million in share repurchases.
SUMMARY FINANCIAL RESULTS
|
Three Months Ended
September 30
|
Three Months Ended
June 30
|
In millions,
except per share amounts
|
3Q23
|
3Q22
|
vs. SQLY
[B /
(W)]
|
2Q23
|
vs.
PQ
[B /
(W)]
|
Net
Sales
|
$10,730
|
$14,115
|
$(3,385)
|
$11,420
|
$(690)
|
GAAP Income, Net of
Tax
|
$327
|
$760
|
$(433)
|
$501
|
$(174)
|
Operating
EBIT¹
|
$626
|
$1,195
|
$(569)
|
$885
|
$(259)
|
Operating EBIT
Margin¹
|
5.8 %
|
8.5 %
|
(270)
bps
|
7.7 %
|
(190)
bps
|
Operating
EBITDA¹
|
$1,283
|
$1,863
|
$(580)
|
$1,534
|
$(251)
|
GAAP Earnings Per
Share
|
$0.42
|
$1.02
|
$(0.60)
|
$0.68
|
$(0.26)
|
Operating Earnings
Per Share¹
|
$0.48
|
$1.11
|
$(0.63)
|
$0.75
|
$(0.27)
|
Cash Provided by
Operating
Activities – Cont. Ops
|
$1,658
|
$1,940
|
$(282)
|
$1,347
|
$311
|
- Op. Earnings Per Share, Op. EBIT, Op. EBIT Margin, Op. EBITDA,
and Cash Flow Conversion are non-GAAP measures. See page 6 for
further discussion.
CEO QUOTE
Jim Fitterling, chair and chief
executive officer, commented on the quarter:
"In the third quarter, Team Dow continued to advance our
long-term strategy while also taking proactive actions to reduce
costs and maximize cash generation in a challenging macro
environment. Despite higher sequential feedstock costs, we
continued to implement targeted actions to deliver $1 billion
in cost savings in 2023. Operating cash flow of $1.7 billion improved $311 million
sequentially, and enabled more than $615 million in returns to
shareholders, reflecting our continued disciplined and balanced
approach to capital allocation."
SEGMENT HIGHLIGHTS
Packaging & Specialty Plastics
|
Three Months Ended
September 30
|
Three Months Ended
June 30
|
In millions,
except margin
percentages
|
3Q23
|
3Q22
|
vs.
SQLY
[B /
(W)]
|
2Q23
|
vs.
PQ
[B /
(W)]
|
Net
Sales
|
$5,454
|
$7,327
|
$(1,873)
|
$5,940
|
$(486)
|
Operating
EBIT
|
$476
|
$785
|
$(309)
|
$918
|
$(442)
|
Operating EBIT
Margin
|
8.7 %
|
10.7 %
|
(200)
bps
|
15.5 %
|
(680)
bps
|
Equity
Earnings
|
$50
|
$55
|
$(5)
|
$19
|
$31
|
Packaging & Specialty Plastics segment net sales in the
quarter were $5.5 billion, down 26%
versus the
year-ago period. Local price decreased 20% year-over-year, driven
by lower polyethylene and olefin prices in all regions, primarily
due to lower global energy costs. Currency increased net sales by
1%. Volume declined 7% year-over-year, as polyethylene demand
across all regions was more than offset by lower merchant volume in
the Hydrocarbons & Energy business. On a sequential basis, net
sales decreased by 8%. This was due to declines in olefin and
aromatic merchant sales and lower polyethylene prices primarily in
EMEAI, which were partly offset by higher packaging demand in
Asia Pacific, Latin America and EMEAI.
Equity earnings were $50 million, down $5 million
compared to the year-ago period. Equity earnings were up
$31 million on a sequential basis, primarily due to the
completion of planned maintenance turnaround activity at Sadara in
the second quarter.
Operating EBIT was $476 million, compared to
$785 million in the year-ago period due to lower integrated
polyethylene margins. Sequentially, Op. EBIT decreased by
$442 million, driven by lower integrated polyethylene margins,
increased planned maintenance turnaround activity, and lower
licensing revenue.
Packaging and Specialty Plastics business reported a net sales
decline versus the year-ago period as higher polyethylene demand in
all regions was more than offset by the impact of lower energy
costs on local prices. Sequentially, net sales decreased as higher
demand for industrial, consumer, and flexible food packaging partly
offset polyethylene price declines, primarily in EMEAI.
Hydrocarbons & Energy business reported a net sales decline
compared to the year-ago period, primarily driven by lower olefin
and aromatic sales in EMEAI and the U.S. & Canada. Sequentially, net sales decreased due
to lower merchant hydrocarbon sales, primarily in EMEAI.
Industrial Intermediates & Infrastructure
|
Three Months Ended
September 30
|
Three Months Ended
June 30
|
In millions,
except margin
percentages
|
3Q23
|
3Q22
|
vs.
SQLY
[B /
(W)]
|
2Q23
|
vs.
PQ
[B /
(W)]
|
Net
Sales
|
$3,035
|
$4,059
|
$(1,024)
|
$3,177
|
$(142)
|
Operating
EBIT
|
$21
|
$167
|
$(146)
|
$(35)
|
$56
|
Operating EBIT
Margin
|
0.7 %
|
4.1 %
|
(340)
bps
|
(1.1) %
|
180
bps
|
Equity Earnings
(Losses)
|
$(63)
|
$(114)
|
$51
|
$(83)
|
$20
|
Industrial Intermediates & Infrastructure segment net sales
were $3 billion, down 25% versus the
year-ago period. Local price declined 17% year-over-year and
currency decreased net sales by 1%. Volume was down 7%
year-over-year with declines in both businesses, driven by slower
global demand. On a sequential basis, net sales declined 4% as
volume gains in EMEAI and Asia
Pacific were more than offset by local price declines in all
regions.
Equity losses for the segment were $63 million, compared to
equity losses of $114 million in the year-ago period,
reflecting higher margins at Sadara. Sequentially, equity losses
improved by $20 million primarily driven by increased volumes
at Sadara for propylene oxide derivatives and isocyanates upon the
completion of planned maintenance activity in the second
quarter.
Operating EBIT was $21 million, compared to
$167 million in the year-ago period, driven by lower prices
and demand in both businesses. On a sequential basis, operating
EBIT was up $56 million driven by volume gains and lower
costs, which were partly offset by an unplanned event in Industrial
Solutions at Louisiana Operations.
Polyurethanes & Construction Chemicals business
reported a net sales decrease compared to the year-ago period, with
lower volume from consumer durables demand and declines in local
price for propylene oxide derivatives and isocyanates.
Sequentially, net sales declined as volume gains in all regions
were more than offset by local price declines.
Industrial Solutions business reported a decrease in net sales
compared to the year-ago period driven by local price declines,
lower demand for industrial applications, and reduced supply
availability due to an unplanned event at Louisiana Operations.
Sequentially, net sales declined as higher demand for energy and
mobility applications was more than offset by lower local prices
and lower supply availability.
Performance Materials & Coatings
|
Three Months Ended
September 30
|
Three Months Ended
June 30
|
In millions,
except margin
percentages
|
3Q23
|
3Q22
|
vs.
SQLY
[B /
(W)]
|
2Q23
|
vs.
PQ
[B /
(W)]
|
Net
Sales
|
$2,130
|
$2,654
|
$(524)
|
$2,197
|
$(67)
|
Operating
EBIT
|
$179
|
$302
|
$(123)
|
$66
|
$113
|
Operating EBIT
Margin
|
8.4 %
|
11.4 %
|
(300)
bps
|
3.0 %
|
540 bps
|
Equity
Earnings
|
$5
|
$1
|
$4
|
$6
|
$(1)
|
Performance Materials & Coatings segment net sales in the
quarter were $2.1 billion, down 20%
versus the year-ago period. Local price decreased 17%
year-over-year with declines in both businesses. Volume was down 3%
year-over-year, as volume gains in commercial building &
construction end-markets were more than offset by lower demand for
personal care and coatings applications in residential
construction. On a sequential basis, net sales were down 3% as
volume gains in both businesses and all regions were more than
offset by lower local prices.
Operating EBIT was $179 million, compared to
$302 million in the year-ago period, driven by local price
declines in both businesses. Sequentially, Op. EBIT increased
$113 million, driven by higher operating rates and cost
savings.
Consumer Solutions business reported a decrease in net sales
versus the year-ago period, as volume gains in commercial building
& construction end-markets were more than offset by lower
siloxanes prices. Sequentially,
net sales declined as higher volumes in all regions excluding
Latin America were more than
offset by declines in siloxanes prices.
Coatings & Performance Monomers business reported a
decrease in net sales compared to the year-ago period, led by local
price declines. Sequentially, net sales decreased as higher monomer
demand was more than offset by local price declines.
OUTLOOK
"With our continued focus on operational and financial
discipline, we are navigating challenging market dynamics and
expect to further benefit from rising oil prices that favor our
cost-advantaged asset footprint," said Fitterling. "We remain
committed to our disciplined and balanced capital allocation
priorities as we advance our strategy. By 2030, our Decarbonize and
Grow and Transform the Waste strategies are expected to deliver
more than $3 billion in underlying earnings, reduce greenhouse
gas emissions by 5 million metric tons and commercialize
3 million metric tons of circular and renewable solutions
annually."
Conference Call
Dow will host a live webcast of its quarterly earnings
conference call with investors to discuss its results, business
outlook and other matters today at 8:00 a.m.
ET. The webcast and slide presentation that accompany the
conference call will be posted on the events and presentations page
of investors.dow.com.
About Dow
Dow (NYSE: DOW) combines global breadth; asset integration and
scale; focused innovation and materials science expertise; leading
business positions; and environmental, social and governance
leadership to achieve profitable growth and help 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 manufacturing sites in 31 countries and
employs approximately 37,800 people. Dow delivered sales of
approximately $57 billion in 2022.
References to Dow or the Company mean Dow Inc. and its
subsidiaries. For more information, please
visit www.dow.com or follow @DowNewsroom on
Twitter.
Cautionary Statement about Forward-Looking Statements
Certain statements in this press release 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; any global and
regional economic impacts of a pandemic or 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, 2022 and
the Company's subsequent Quarterly Reports on Form 10-Q. 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 Inc. and The Dow Chemical Company
("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.
Non-GAAP Financial Measures
This earnings release includes information that does not conform
to 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 GAAP disclosures and should not be viewed
as alternatives to 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 GAAP are provided in the Selected Financial Information
and Non-GAAP Measures section starting on page 11. Dow does not
provide forward-looking GAAP financial measures or a reconciliation
of forward-looking non-GAAP financial measures to the most
comparable 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 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 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
|
Nine Months Ended
|
Sep 30,
2023
|
Sep 30,
2022
|
Sep 30,
2023
|
Sep 30,
2022
|
Net sales
|
$
10,730
|
$
14,115
|
$
34,001
|
$
45,043
|
Cost of
sales
|
9,592
|
12,381
|
30,096
|
37,682
|
Research and
development expenses
|
197
|
191
|
616
|
626
|
Selling, general and
administrative expenses
|
380
|
356
|
1,216
|
1,289
|
Amortization of
intangibles
|
81
|
83
|
243
|
256
|
Restructuring and
asset related charges - net
|
—
|
—
|
549
|
186
|
Equity in earnings
(losses) of nonconsolidated affiliates
|
(7)
|
(58)
|
(112)
|
311
|
Sundry income
(expense) - net
|
92
|
69
|
202
|
292
|
Interest
income
|
44
|
41
|
186
|
105
|
Interest expense and
amortization of debt discount
|
192
|
155
|
549
|
487
|
Income before income
taxes
|
417
|
1,001
|
1,008
|
5,225
|
Provision for income
taxes
|
90
|
241
|
253
|
1,232
|
Net income
|
327
|
760
|
755
|
3,993
|
Net income
attributable to noncontrolling interests
|
25
|
21
|
61
|
24
|
Net income available
for Dow Inc. common stockholders
|
$ 302
|
$ 739
|
$ 694
|
$
3,969
|
|
|
|
|
|
Per common share
data:
|
|
|
|
|
Earnings per common
share - basic
|
$ 0.43
|
$ 1.03
|
$ 0.97
|
$ 5.45
|
Earnings per common
share - diluted
|
$ 0.42
|
$ 1.02
|
$ 0.97
|
$ 5.41
|
|
|
|
|
|
Weighted-average common
shares outstanding - basic
|
704.0
|
714.3
|
706.4
|
724.9
|
Weighted-average common
shares outstanding - diluted
|
707.5
|
718.1
|
709.7
|
729.8
|
Dow Inc. and Subsidiaries
Consolidated Balance Sheets
|
|
In millions, except
share amounts (Unaudited)
|
Sep 30,
2023
|
Dec 31,
2022
|
Assets
|
|
|
Current
Assets
|
|
|
Cash and cash
equivalents
|
$
3,080
|
$
3,886
|
Accounts and notes
receivable:
|
|
|
Trade (net of
allowance for doubtful receivables - 2023: $80; 2022:
$110)
|
5,343
|
5,611
|
Other
|
2,039
|
2,144
|
Inventories
|
6,211
|
6,988
|
Other current
assets
|
1,625
|
1,848
|
Total current
assets
|
18,298
|
20,477
|
Investments
|
|
|
Investment in
nonconsolidated affiliates
|
1,289
|
1,589
|
Other investments
(investments carried at fair value - 2023: $1,929; 2022:
$1,757)
|
2,904
|
2,793
|
Noncurrent
receivables
|
555
|
666
|
Total
investments
|
4,748
|
5,048
|
Property
|
|
|
Property
|
59,525
|
58,055
|
Less: Accumulated
depreciation
|
38,965
|
37,613
|
Net
property
|
20,560
|
20,442
|
Other Assets
|
|
|
Goodwill
|
8,580
|
8,644
|
Other intangible
assets (net of accumulated amortization - 2023: $5,279; 2022:
$5,022)
|
2,132
|
2,442
|
Operating lease
right-of-use assets
|
1,288
|
1,227
|
Deferred income tax
assets
|
1,248
|
960
|
Deferred charges and
other assets
|
1,434
|
1,363
|
Total other
assets
|
14,682
|
14,636
|
Total Assets
|
$
58,288
|
$
60,603
|
Liabilities and Equity
|
|
|
Current
Liabilities
|
|
|
Notes
payable
|
$
223
|
$
362
|
Long-term debt due
within one year
|
110
|
362
|
Accounts
payable:
|
|
|
Trade
|
4,293
|
4,940
|
Other
|
2,025
|
2,276
|
Operating lease
liabilities - current
|
325
|
287
|
Income taxes
payable
|
393
|
334
|
Accrued and other
current liabilities
|
2,879
|
2,770
|
Total current
liabilities
|
10,248
|
11,331
|
Long-Term
Debt
|
14,592
|
14,698
|
Other Noncurrent
Liabilities
|
|
|
Deferred income tax
liabilities
|
668
|
1,110
|
Pension and other
postretirement benefits - noncurrent
|
3,617
|
3,808
|
Asbestos-related
liabilities - noncurrent
|
804
|
857
|
Operating lease
liabilities - noncurrent
|
1,020
|
997
|
Other noncurrent
obligations
|
7,259
|
6,555
|
Total other noncurrent
liabilities
|
13,368
|
13,327
|
Stockholders'
Equity
|
|
|
Common stock
(authorized 5,000,000,000 shares of $0.01 par value
each;
issued 2023:
775,630,092 shares; 2022: 771,678,525 shares)
|
8
|
8
|
Additional paid-in
capital
|
8,722
|
8,540
|
Retained
earnings
|
22,376
|
23,180
|
Accumulated other
comprehensive loss
|
(7,261)
|
(7,139)
|
Treasury stock at cost
(2023: 74,233,086 shares; 2022: 66,798,605 shares)
|
(4,278)
|
(3,871)
|
Dow Inc.'s
stockholders' equity
|
19,567
|
20,718
|
Noncontrolling
interests
|
513
|
529
|
Total
equity
|
20,080
|
21,247
|
Total Liabilities and
Equity
|
$
58,288
|
$
60,603
|
Dow Inc. and Subsidiaries
Consolidated Statements of Cash Flows
|
|
In millions
(Unaudited)
|
Nine Months Ended
|
Sep 30,
2023
|
Sep 30,
2022
|
Operating
Activities
|
|
|
Net income
|
$
755
|
$
3,993
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
Depreciation and
amortization
|
1,954
|
2,104
|
Provision (credit) for
deferred income tax
|
(817)
|
124
|
Earnings of
nonconsolidated affiliates less than dividends received
|
300
|
517
|
Net periodic pension
benefit cost (credit)
|
(69)
|
19
|
Pension
contributions
|
(111)
|
(156)
|
Net gain on sales of
assets, businesses and investments
|
(49)
|
(11)
|
Restructuring and
asset related charges - net
|
549
|
186
|
Other net
loss
|
588
|
159
|
Changes in assets and
liabilities, net of effects of acquired and divested
companies:
|
|
|
Accounts and notes
receivable
|
365
|
323
|
Inventories
|
777
|
(254)
|
Accounts
payable
|
(859)
|
(860)
|
Other assets and
liabilities, net
|
153
|
(736)
|
Cash provided by
operating activities - continuing operations
|
3,536
|
5,408
|
Cash provided by (used
for) operating activities - discontinued operations
|
4
|
(11)
|
Cash provided by
operating activities
|
3,540
|
5,397
|
Investing
Activities
|
|
|
Capital
expenditures
|
(1,598)
|
(1,224)
|
Investment in gas
field developments
|
(175)
|
(134)
|
Purchases of
previously leased assets
|
(5)
|
(5)
|
Proceeds from sales of
property, businesses and consolidated companies, net of cash
divested
|
66
|
16
|
Acquisitions of
property and businesses, net of cash acquired
|
(103)
|
(54)
|
Investments in and
loans to nonconsolidated affiliates
|
(4)
|
(69)
|
Distributions and loan
repayments from nonconsolidated affiliates
|
2
|
10
|
Proceeds from sales of
ownership interests in nonconsolidated affiliates
|
63
|
11
|
Purchases of
investments
|
(1,291)
|
(445)
|
Proceeds from sales
and maturities of investments
|
1,244
|
596
|
Other investing
activities, net
|
(45)
|
(41)
|
Cash used for
investing activities
|
(1,846)
|
(1,339)
|
Financing
Activities
|
|
|
Changes in short-term
notes payable
|
(122)
|
72
|
Payments on short-term
debt greater than three months
|
—
|
(14)
|
Proceeds from issuance
of long-term debt
|
76
|
82
|
Payments on long-term
debt
|
(355)
|
(957)
|
Collections on
securitization programs
|
8
|
—
|
Purchases of treasury
stock
|
(500)
|
(2,200)
|
Proceeds from issuance
of stock
|
63
|
99
|
Transaction financing,
debt issuance and other costs
|
(1)
|
(8)
|
Employee taxes paid
for share-based payment arrangements
|
(41)
|
(34)
|
Distributions to
noncontrolling interests
|
(51)
|
(42)
|
Dividends paid to
stockholders
|
(1,481)
|
(1,511)
|
Cash used for
financing activities
|
(2,404)
|
(4,513)
|
Effect of exchange rate
changes on cash, cash equivalents and restricted cash
|
(130)
|
(261)
|
Summary
|
|
|
Decrease in cash, cash
equivalents and restricted cash
|
(840)
|
(716)
|
Cash, cash equivalents
and restricted cash at beginning of period
|
3,940
|
3,033
|
Cash, cash equivalents
and restricted cash at end of period
|
$
3,100
|
$
2,317
|
Less: Restricted cash
and cash equivalents, included in "Other current assets"
|
20
|
101
|
Cash and cash
equivalents at end of period
|
$
3,080
|
$
2,216
|
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,
2023
|
Sep 30,
2022
|
Sep 30,
2023
|
Sep 30,
2022
|
Packaging &
Specialty Plastics
|
$
5,454
|
$
7,327
|
$
17,508
|
$
23,187
|
Industrial
Intermediates & Infrastructure
|
3,035
|
4,059
|
9,590
|
12,953
|
Performance Materials
& Coatings
|
2,130
|
2,654
|
6,603
|
8,706
|
Corporate
|
111
|
75
|
300
|
197
|
Total
|
$
10,730
|
$
14,115
|
$
34,001
|
$
45,043
|
U.S. &
Canada
|
$
3,968
|
$
5,334
|
$
12,667
|
$
16,578
|
EMEAI
1
|
3,398
|
4,634
|
11,225
|
15,823
|
Asia Pacific
|
2,067
|
2,571
|
6,172
|
7,997
|
Latin
America
|
1,297
|
1,576
|
3,937
|
4,645
|
Total
|
$
10,730
|
$
14,115
|
$
34,001
|
$
45,043
|
Net Sales Variance by
Segment and
Geographic Region
|
Three Months Ended Sep 30, 2023
|
Nine Months Ended Sep 30, 2023
|
|
Local
Price &
Product
Mix
|
Currency
|
Volume
|
Total
|
Local
Price &
Product
Mix
|
Currency
|
Volume
|
Total
|
|
Percent change from
prior year
|
|
Packaging &
Specialty
Plastics
|
(20) %
|
1 %
|
(7) %
|
(26) %
|
(18) %
|
— %
|
(6) %
|
(24) %
|
|
Industrial
Intermediates &
Infrastructure
|
(17)
|
(1)
|
(7)
|
(25)
|
(13)
|
(1)
|
(12)
|
(26)
|
|
Performance Materials
&
Coatings
|
(17)
|
—
|
(3)
|
(20)
|
(16)
|
(1)
|
(7)
|
(24)
|
|
Total
|
(18) %
|
— %
|
(6) %
|
(24) %
|
(16) %
|
(1) %
|
(8) %
|
(25) %
|
|
Total, excluding
the
Hydrocarbons & Energy
business
|
(19) %
|
— %
|
(1) %
|
(20) %
|
(15) %
|
(1) %
|
(6) %
|
(22) %
|
|
U.S. &
Canada
|
(18) %
|
— %
|
(8) %
|
(26) %
|
(16) %
|
— %
|
(8) %
|
(24) %
|
|
EMEAI
1
|
(19)
|
1
|
(9)
|
(27)
|
(16)
|
(1)
|
(12)
|
(29)
|
|
Asia Pacific
|
(16)
|
(2)
|
(2)
|
(20)
|
(15)
|
(2)
|
(6)
|
(23)
|
|
Latin
America
|
(22)
|
—
|
4
|
(18)
|
(18)
|
—
|
3
|
(15)
|
|
Total
|
(18) %
|
— %
|
(6) %
|
(24) %
|
(16) %
|
(1) %
|
(8) %
|
(25) %
|
|
Net Sales Variance by Segment and Geographic
Region
|
Three Months Ended Sep 30, 2023
|
|
Local
Price &
Product
Mix
|
Currency
|
Volume
|
Total
|
|
Percent change from
prior quarter
|
|
Packaging &
Specialty Plastics
|
(6) %
|
— %
|
(2) %
|
(8) %
|
|
Industrial
Intermediates & Infrastructure
|
(7)
|
(1)
|
4
|
(4)
|
|
Performance Materials
& Coatings
|
(4)
|
(1)
|
2
|
(3)
|
|
Total
|
(7) %
|
— %
|
1 %
|
(6) %
|
|
Total, excluding the
Hydrocarbons & Energy business
|
(7) %
|
(1) %
|
3 %
|
(5) %
|
|
U.S. &
Canada
|
(5) %
|
— %
|
(2) %
|
(7) %
|
|
EMEAI
1
|
(8)
|
—
|
(2)
|
(10)
|
|
Asia Pacific
|
(6)
|
(2)
|
8
|
—
|
|
Latin
America
|
(6)
|
—
|
3
|
(3)
|
|
Total
|
(7) %
|
— %
|
1 %
|
(6) %
|
|
- Europe, Middle East, Africa and India.
Dow Inc. and Subsidiaries
Selected Financial Information and Non-GAAP
Measures
|
|
Operating EBIT by Segment
|
|
Three Months Ended
|
Nine Months Ended
|
In millions
(Unaudited)
|
|
Sep 30, 2023
|
Sep 30, 2022
|
Sep 30, 2023
|
Sep 30, 2022
|
Packaging &
Specialty Plastics
|
|
$ 476
|
$ 785
|
$
2,036
|
$
3,455
|
Industrial
Intermediates & Infrastructure
|
|
21
|
167
|
109
|
1,254
|
Performance Materials
& Coatings
|
|
179
|
302
|
280
|
1,458
|
Corporate
|
|
(50)
|
(59)
|
(206)
|
(178)
|
Total
|
|
$ 626
|
$
1,195
|
$
2,219
|
$
5,989
|
|
|
|
|
|
|
Depreciation and Amortization by
Segment
|
|
Three Months Ended
|
Nine Months Ended
|
In millions
(Unaudited)
|
|
Sep 30, 2023
|
Sep 30, 2022
|
Sep 30, 2023
|
Sep 30, 2022
|
Packaging &
Specialty Plastics
|
|
$ 321
|
$ 337
|
$ 961
|
$
1,076
|
Industrial
Intermediates & Infrastructure
|
|
134
|
132
|
391
|
418
|
Performance Materials
& Coatings
|
|
193
|
195
|
583
|
592
|
Corporate
|
|
9
|
4
|
19
|
18
|
Total
|
|
$ 657
|
$ 668
|
$
1,954
|
$
2,104
|
|
|
|
|
|
|
Operating EBITDA by Segment
|
|
Three Months Ended
|
Nine Months Ended
|
In millions
(Unaudited)
|
|
Sep 30, 2023
|
Sep 30, 2022
|
Sep 30, 2023
|
Sep 30, 2022
|
Packaging &
Specialty Plastics
|
|
$ 797
|
$
1,122
|
$
2,997
|
$
4,531
|
Industrial
Intermediates & Infrastructure
|
|
155
|
299
|
500
|
1,672
|
Performance Materials
& Coatings
|
|
372
|
497
|
863
|
2,050
|
Corporate
|
|
(41)
|
(55)
|
(187)
|
(160)
|
Total
|
|
$
1,283
|
$
1,863
|
$
4,173
|
$
8,093
|
|
|
|
|
|
|
Equity in Earnings (Losses) of Nonconsolidated
Affiliates by Segment
|
|
Three Months Ended
|
Nine Months Ended
|
In millions
(Unaudited)
|
|
Sep 30, 2023
|
Sep 30, 2022
|
Sep 30, 2023
|
Sep 30, 2022
|
Packaging &
Specialty Plastics
|
|
$
50
|
$
55
|
$
90
|
$ 303
|
Industrial
Intermediates & Infrastructure
|
|
(63)
|
(114)
|
(219)
|
5
|
Performance Materials
& Coatings
|
|
5
|
1
|
14
|
6
|
Corporate
|
|
1
|
—
|
3
|
(3)
|
Total
|
|
$
(7)
|
$
(58)
|
$ (112)
|
$ 311
|
|
|
|
|
|
|
Reconciliation of "Net income" to "Operating
EBIT"
|
Three Months Ended
|
Nine Months Ended
|
In millions
(Unaudited)
|
Jun 30, 2023
|
Sep 30, 2023
|
Sep 30, 2022
|
Sep 30, 2023
|
Sep 30, 2022
|
Net income
|
$ 501
|
$ 327
|
$ 760
|
$ 755
|
$
3,993
|
+ Provision for income
taxes
|
210
|
90
|
241
|
253
|
1,232
|
Income before income
taxes
|
$ 711
|
$ 417
|
$
1,001
|
$
1,008
|
$
5,225
|
- Interest
income
|
66
|
44
|
41
|
186
|
105
|
+ Interest expense and
amortization of debt discount
|
172
|
192
|
155
|
549
|
487
|
- Significant
items
|
(68)
|
(61)
|
(80)
|
(848)
|
(382)
|
Operating EBIT
(non-GAAP)
|
$ 885
|
$ 626
|
$
1,195
|
$
2,219
|
$
5,989
|
Dow Inc. and Subsidiaries
Selected Financial Information and Non-GAAP
Measures
|
|
Significant Items Impacting Results for the Three
Months Ended Sep 30, 2023
|
In millions, except per
share amounts (Unaudited)
|
Pretax 1
|
Net
Income 2
|
EPS 3
|
Income Statement Classification
|
Reported
results
|
$ 417
|
$ 302
|
$ 0.42
|
|
Less: Significant
items
|
|
|
|
|
Restructuring,
implementation and
efficiency costs, and asset related
charges - net 4
|
(82)
|
(64)
|
(0.09)
|
Cost of sales ($52
million);
R&D ($1 million);
SG&A ($29 million)
|
Indemnification and
other transaction
related costs 5
|
21
|
21
|
0.03
|
Sundry income (expense)
- net
|
Total
significant items
|
$ (61)
|
$ (43)
|
$
(0.06)
|
|
Operating results
(non-GAAP)
|
$ 478
|
$ 345
|
$ 0.48
|
|
|
Significant Items Impacting Results for the Three
Months Ended Sep 30, 2022
|
In millions, except per
share amounts (Unaudited)
|
Pretax 1
|
Net
Income 2
|
EPS 3
|
Income Statement Classification
|
Reported
results
|
$
1,001
|
$ 739
|
$ 1.02
|
|
Less: Significant
items
|
|
|
|
|
Digitalization program
costs
|
(62)
|
(47)
|
(0.07)
|
Cost of sales ($55
million);
R&D ($2 million);
SG&A ($5 million)
|
Restructuring,
implementation costs and
asset related charges - net 6
|
(11)
|
(9)
|
(0.01)
|
Cost of sales ($8
million);
R&D ($1 million);
SG&A ($2 million)
|
Indemnification and
other transaction
related costs 5
|
(7)
|
(7)
|
(0.01)
|
Sundry income (expense)
- net
|
Total
significant items
|
$ (80)
|
$ (63)
|
$
(0.09)
|
|
Operating results
(non-GAAP)
|
$
1,081
|
$ 802
|
$ 1.11
|
|
- "Income before income taxes."
- "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.
- "Earnings per common share - diluted," which includes the
impact of participating securities in accordance with the two-class
method.
- Restructuring charges and implementation and efficiency costs
associated with the Company's 2023 Restructuring Program.
- 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.
- Restructuring charges, asset related charges and costs
associated with implementing the Company's 2020 Restructuring
Program.
Dow Inc. and Subsidiaries
Selected Financial Information and Non-GAAP
Measures
|
|
Significant Items Impacting Results for the Nine
Months Ended Sep 30, 2023
|
In millions, except per
share amounts (Unaudited)
|
Pretax 1
|
Net
Income 2
|
EPS 3
|
Income Statement Classification
|
Reported
results
|
$
1,008
|
$ 694
|
$ 0.97
|
|
Less: Significant
items
|
|
|
|
|
Restructuring,
implementation and
efficiency costs, and asset related
charges - net 4
|
(688)
|
(542)
|
(0.76)
|
Cost of sales ($115
million);
R&D ($3 million);
SG&A ($51 million);
Restructuring and asset related
charges - net ($549 million), offset by
Sundry income (expense) - net
($30 million)
|
Litigation related
charges, awards and
adjustments 5
|
(177)
|
(138)
|
(0.19)
|
Cost of
sales
|
Indemnification and
other transaction
related costs 6
|
17
|
20
|
0.03
|
Sundry income (expense)
- net
|
Income tax related
items 7
|
—
|
57
|
0.08
|
Provision for income
taxes
|
Total
significant items
|
$
(848)
|
$
(603)
|
$
(0.84)
|
|
Operating results
(non-GAAP)
|
$
1,856
|
$
1,297
|
$ 1.81
|
|
Significant Items Impacting Results for the Nine
Months Ended Sep 30, 2022
|
In millions, except per
share amounts (Unaudited)
|
Pretax 1
|
Net
Income 2
|
EPS 3
|
Income Statement Classification
|
Reported
results
|
$
5,225
|
$
3,969
|
$ 5.41
|
|
Less: Significant
items
|
|
|
|
|
Digitalization program
costs
|
(154)
|
(119)
|
(0.16)
|
Cost of sales ($137
million);
R&D ($4 million); SG&A ($13 million)
|
Restructuring,
implementation costs and
asset related charges - net 8
|
(31)
|
(25)
|
(0.03)
|
Cost of sales ($23
million);
R&D ($5 million); SG&A ($3 million)
|
Russia / Ukraine
conflict charges 9
|
(186)
|
(142)
|
(0.19)
|
Restructuring and asset
related
charges -
net
|
Loss on early
extinguishment of debt
|
(8)
|
(6)
|
(0.01)
|
Sundry income (expense)
- net
|
Indemnification and
other transaction
related costs 6
|
(3)
|
(3)
|
—
|
Sundry income (expense)
- net
|
Income tax related
items
|
—
|
25
|
0.03
|
Provision for income
taxes
|
Total
significant items
|
$
(382)
|
$
(270)
|
$
(0.36)
|
|
Operating results
(non-GAAP)
|
$
5,607
|
$
4,239
|
$ 5.77
|
|
- "Income before income taxes"
- "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.
- "Earnings per common share - diluted," which includes the
impact of participating securities in accordance with the two-class
method.
- Restructuring charges and implementation and efficiency costs
associated with the Company's 2023 Restructuring Program. Also
includes certain gains and losses associated with previously
impaired equity investments.
- Includes a loss associated with legacy agricultural products
groundwater contamination matters.
- 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.
- Related to deferred tax assets in a foreign jurisdiction
partially offset by a remeasurement of uncertain tax
positions.
- Restructuring charges, asset related charges and costs
associated with implementing the Company's 2020 Restructuring
Program.
- Asset related charges including inventory write-downs, bad debt
reserves and impairments of other assets related to the conflict
between Russia and Ukraine.
Dow Inc. and Subsidiaries
Selected Financial Information and Non-GAAP
Measures
|
|
|
Significant Items Impacting Results for the Three
Months Ended Jun 30, 2023
|
In millions, except per
share amounts (Unaudited)
|
Pretax 1
|
Net
Income 2
|
EPS 3
|
Income Statement Classification
|
Reported
results
|
$ 711
|
$ 485
|
$ 0.68
|
|
Less: Significant
items
|
|
|
|
|
Restructuring,
implementation and
efficiency costs, and asset related
charges - net 4
|
(55)
|
(42)
|
(0.06)
|
Cost of sales ($35
million);
R&D ($1 million);
SG&A ($11 million);
Restructuring and asset related
charges - net ($8 million)
|
Indemnification and
other transaction
related costs 5
|
(13)
|
(10)
|
(0.01)
|
Sundry income (expense)
- net
|
Total
significant items
|
$ (68)
|
$ (52)
|
$
(0.07)
|
|
Operating results
(non-GAAP)
|
$ 779
|
$ 537
|
$ 0.75
|
|
- "Income before income taxes."
- "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.
- "Earnings per common share - diluted," which includes the
impact of participating securities in accordance with the two-class
method.
- Restructuring charges and implementation and efficiency costs
associated with the Company's 2023 Restructuring Program.
- 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.
Reconciliation of Free Cash
Flow
|
Three Months Ended
|
Nine Months Ended
|
In millions
(Unaudited)
|
Sep 30,
2023
|
Sep 30,
2022
|
Sep 30,
2023
|
Sep 30,
2022
|
Cash provided by
operating activities - continuing operations (GAAP)
|
$
1,658
|
$
1,940
|
$
3,536
|
$
5,408
|
Capital
expenditures
|
(597)
|
(452)
|
(1,598)
|
(1,224)
|
Free Cash Flow
(non-GAAP)
|
$
1,061
|
$
1,488
|
$
1,938
|
$
4,184
|
|
Reconciliation of Cash Flow
Conversion
|
Three Months Ended
|
In millions
(Unaudited)
|
Dec 31,
2022
|
Mar 31,
2023
|
Jun 30,
2023
|
Sep 30,
2023
|
Cash provided by
operating activities - continuing operations (GAAP)
|
$ 2,078
|
$
531
|
$ 1,347
|
$ 1,658
|
Operating EBITDA
(non-GAAP)
|
$ 1,255
|
$ 1,356
|
$ 1,534
|
$ 1,283
|
Cash Flow Conversion
(Operating EBITDA to cash flow from
operations) (non-GAAP)
|
165.6 %
|
39.2 %
|
87.8 %
|
129.2 %
|
Cash Flow Conversion -
trailing twelve months (non-GAAP)
|
|
103.4 %
|
For further
information, please contact:
|
|
Investors:
Pankaj Gupta
pgupta@dow.com
+1
989-638-5265
|
Media:
Kyle Bandlow
kbandlow@dow.com
+1
989-638-2417
|
Twitter: https://twitter.com/DowNewsroom
Facebook: https://www.facebook.com/dow/
LinkedIn: http://www.linkedin.com/company/dow-chemical
Instagram: http://instagram.com/dow_official
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SOURCE The Dow Chemical Company