Slide 1: Dow 2Q 2021 Results
Dow 2Q 2021 Results July 22, 2021 1
Slide 2: Agenda
AGENDA Operating Segment 1. Quarterly Highlights 2. Performance Uniquely Positioned to Compelling Investment 3. Capture Value 4. Opportunity 2
Slide 3: 2Q 2021 Highlights
2Q | 2021 HIGHLIGHTS Delivered strongest quarterly earnings performance in Company history with Net Sales up YoY substantial growth in Net Sales and Op. EBIT, both YoY and sequentially Net Sales up double-digits with gains in all operating segments and businesses 66% Increases led by local pri
Slide 4: 2Q21 Operating Segment Performance
2Q21 OPERATING SEGMENT PERFORMANCE REVENUE ($MM) Sales ↑ 78%; Volume ↑ 4%; Price ↑ 70% Op. EBIT ($MM) & Op. EBIT Margin % Op. EBIT ↑ 533%; Margin ↑ 2,040 bps Specialty Plastics Y-o-Y Y-o-Y 2,014 Price gains in both businesses and in all 7,5 00 Price gains in packaging applications; volume Packaging
Slide 5: 3Q21 Modeling Guidance
3Q21 MODELING GUIDANCE Demand Strength on Continued Economic Recovery Favors Dow’s Consumer-Driven Portfolio Net Sales ~$13.75 – $14.25B Depreciation & Amortization ~$745MM Quarterly Operational Tax Rate ~20 – 24% Net Interest Expense (Net of Int. Income) ~$165MM Net Income Attrib. to Non-Controllin
Slide 6: Continuing Economic Recovery Drives Earnings Potential
CONTINUING ECONOMIC RECOVERY DRIVES EARNINGS POTENTIAL Continuing Demand Strength on Improving Indicators Positive momentum in leading indicators suggest several sectors and Industrial Production Index1 Air Passenger Demand3 regions offer additional boost Pre-pandemic level Pre-pandemic level Co
Slide 7: Capturing Value in Sustainability-Focused Growth Markets
CAPTURING VALUE IN SUSTAINABILITY-FOCUSED GROWTH MARKETS Unique participation in attractive, high-growth market verticals with a $650 billion addressable market Packaging Infrastructure Mobility Consumer ~1.5x GDP ~1.3x GDP ~1.5x GDP ~1.5x GDP We will share more about our strategic and financial pri
Slide 8: Market Fundamentals, Incremental Investments Drive ~$1B Earnings Growth
MARKET FUNDAMENTALS, INCREMENTAL INVESTMENTS DRIVE ~$1B EARNINGS GROWTH Packaging & Specialty Plastics Ind. Intermediates & Infrastructure Perf. Materials & Coatings Polyethylene 16,000 MDI 100% 6,000 Siloxane 100% 250,000 100% 90% 90% Key Product Fundamentals 90% 5,000 200,000 80% 80% 12,000 80% 70
Slide 9: Dow Continues to Be a Compelling Investment Opportunity
DOW CONTINUES TO BE A COMPELLING INVESTMENT OPPORTUNITY Proven Foundation & Track Record Earnings & Value Growth Drivers • Continued economic recovery with • Superior feedstock position and flexibility • Leading scale with global reach, differentiated Differentiated Portfolio differentiated product
Slide 10: Seek Together”
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Slide 11: Appendix
Di Appendix
Slide 12: 2Q 2021 Financial Highlights
2Q 2021 FINANCIAL HIGHLIGHTS YoY Operating EPS Reconciliation Key Drivers in the Quarter YoY $2.72 • Pricing gains in all operating segments, businesses and regions • Demand recovery in polyurethanes and ($0.26) silicones coupled with resilient demand for packaging and coatings applications 2Q20 Mar
Slide 13: Principal Joint Venture Detail
PRINCIPAL JOINT VENTURE DETAIL Dow’s Proportional Share of Principal JV Financial Results Drivers of 2Q 2021 2Q 2020 1Q 2021 YoY and PQ Changes Kuwait Thai Kuwait Thai Kuwait Thai Kuwait JVs: Pricing increases for $ millions (unaudited) Sadara JVs JVs Sadara JVs JVs Sadara JVs JVs MEG supporting h
Slide 14: FY 2021 Modeling Considerations & Latest Updates
FY 2021 MODELING CONSIDERATIONS & LATEST UPDATES [POSITIVE / NEGATIVE] Operating EBIT Drivers vs. FY20 Cash Flow Considerations in 2021 Equity Earnings Up ~$700-800MM YoY (net of T/As) Dividends from ~$200MM (down ~$200MM YoY) Equity Companies Pension Expense ~$200MM tailwind YoY No cash outflow (~$
Slide 15: Operating Earnings Per Share (EPS) Reconciliation
OPERATING EARNINGS (LOSS) PER SHARE (EPS) RECONCILIATION Significant Items Impacting Results for the Three Months Ended Jun 30, 2021 In millions, except per share amounts (Unaudited) Pretax 1 Net Income 2 EPS 3 Reported results $ 2,456 $ 1,901 $ 2.51 Less: Significant items Digitalization program co
Slide 16: Operating (EPS) Reconciliation (Continued)
OPERATING (EPS) RECONCILIATION (CONTINUED) Significant Items Impacting Results for the Six Months Ended Jun 30, 2021 In millions, except per share amounts (Unaudited) Pretax 1 Net Income 2 EPS 3 Reported results $ 3,779 $ 2,892 $ 3.83 Less: Significant items Digitalization program costs (81) (62) (0
Slide 17: Operating (EPS) Reconciliation (Continued)
OPERATING (EPS) RECONCILIATION (CONTINUED) Significant Items Impacting Results for the Three Months Ended Mar 31, 2021 In millions, except per share amounts (Unaudited) Pretax 1 Net Income 2 EPS 3 Reported results $ 1,323 $ 991 $ 1.32 Less: Significant items Restructuring, implementation costs and a
Slide 18: Reconciliation of Net Income (Loss) to Operating EBIT & EBITDA
RECONCILIATION OF NET INCOME (LOSS) TO OPERATING EBIT & OPERATING EBITDA Reconciliation of "Net income (loss)" to "Operating EBIT" Three Months Ended Six Months Ended and "Operating EBITDA" In millions (Unaudited) Jun 30, 2020 Sep 30, 2020 Dec 31, 2020 Mar 31, 2020 Jun 30, 2021 Jun 30, 2021 Jun 30,
Slide 19: Segment Information
SEGMENT INFORMATION Net Sales by Segment Three Months Three Months Ended Six Months Ended Ended In millions (Unaudited) Mar 31, 2021 Jun 30, 2021 Jun 30, 2020 Jun 30, 2021 Jun 30, 2020 Packaging & Specialty Plastics $ 6,082 $ 7,121 $ 4,001 $ 13,203 $ 8,610 Industrial Intermediates & Infrastructure 3
Slide 20: Segment Information (Continued)
SEGMENT INFORMATION (CONTINUED) Adjusted Operating EBIT by Segment Three Months Three Months Ended Six Months Ended Ended In millions (Unaudited) Mar 31, 2021 Jun 30, 2021 Jun 30, 2020 Jun 30, 2021 Jun 30, 2020 Packaging & Specialty Plastics $ 1,122 $ 1,884 $ 298 $ 3,006 $ 873 Industrial Interm edia
Slide 21: Cash Conversion and Free Cash Flow Reconciliation
CASH CONVERSION AND FREE CASH FLOW RECONCILIATION Reconciliation of Cash Flow Conversion Three Months Ended In millions Jun 30, 2020 Sep 30, 2020 Dec 31, 2020 Mar 31, 2021 Jun 30, 2021 Cash provided by (used for) operating activities - continuing operations (GAAP) $ 1,599 $ 1,761 $ 1,656 $ (228) $ 2
Slide 22: Reconciliation of Net Debt
RECONCILIATION OF NET DEBT Reconciliation of Net Debt In millions (Unaudited) Dec 31, 2018 Dec 31, 2019 Dec 31, 2020 Jun 30, 2021 Notes payable $ 298 $ 586 $ 156 $ 203 Long-term debt due within one year 338 435 460 445 Long-term debt 19,253 15,975 16,491 15,093 Gross debt (GAAP) $ 19,889 $ 16,996 $
Slide 23: General Comments
GENERAL COMMENTS Background On April 1, 2019, DowDuPont completed the separation of its materials science business and Dow Inc. became the direct parent company of TDCC, owning all of the outstanding common shares of TDCC. For filings related to the period commencing April 1, 2019 and thereafter, TD
Slide 24: Safe Harbor
SAFE HARBOR Cautionary Statement about Forward-Looking Statements Certain statements in this presentation are “forward-looking statements” within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Ac
Slide 25: Non-GAAP & Definitions
NON-GAAP & DEFINITIONS Non-GAAP Financial Measures This presentation includes information that does not conform to U.S. GAAP and are considered non-GAAP measures. Management uses these measures internally for planning, forecasting and evaluating the performance of the Company's segments, including a