Slide 1: 2Q 2022 Results
22S 2Q 2022 RESULTS July 21, 2022
Slide 2: Agenda
AGENDA • Quarterly Results 2Q 2022 • Operating Segment Performance R E S U LT S • Outlook • Advancing “Decarbonize & Grow” 2
Slide 3: 2Q 2022 Performance Highlights
2Q 2022 PERFORMANCE HIGHLIGHTS ▪ Team Dow delivered top-line growth, both YoY and QoQ ▪ Net sales up 13% YoY, with gains in all operating segments and regions $15.7B ➢ Local price increased 16% YoY and 6% QoQ NET SALES ➢ Volume was consistent YoY and down 2% QoQ ▪ Generated $1.9B of cash flow from o
Slide 4: 2Q 2022 Operating Segment Performance
2Q 2022 OPERATING SEGMENT PERFORMANCE REVENUE ($MM) Sales ↑ 16%; Volume ↑ 5%; Price ↑ 14% Op. EBIT ($MM) & Op. EBIT Margin % Op. EBIT ↓ 29%; Margins ↓ 1090 bps Specialty Plastics Y-o-Y Y-o-Y 2,014 9,0 00 Price gains in both businesses and all regions; Price gains more than offset by rapidly Packagin
Slide 5: Competitively Advantaged to Navigate Market Dynamics
COMPETITIVELY ADVANTAGED TO NAVIGATE MARKET DYNAMICS USGC Feedstock Advantage Remains Robust + China Imports up in both May and June Packaging + U.S. Retail Sales, excluding auto, increased 1% in June Oil-to-Gas Spreads ($/boe) - Global GDP for FY22 revised down to 2.5 – 3.0% 2022 YTD Avg. ~70 2019
Slide 6: 3Q22 Modeling Guidance
3Q22 MODELING GUIDANCE Navigating Near-Term Supply Imbalances Net Sales ~$14.3 – $14.8B Depreciation & Amortization ~$700MM Quarterly Operational Tax Rate ~20 – 24% Net Interest Expense (Net of Int. Income) ~$125MM Net Income Attrib. to Non-Controlling Int. ~$25MM Average Share Count ~720MM Top-Line
Slide 7: FY 2022 Modeling Considerations & Latest Updates
FY 2022 MODELING CONSIDERATIONS & LATEST UPDATES [POSITIVE / NEGATIVE] Cash Flow Considerations in 2022 Dividends from Operating EBIT Drivers vs. FY21 ~$900MM (up ~$600MM YoY) Equity Companies Equity Earnings Down ~$300-400MM YoY (net of T/As) Pension ~$250MM (~$1B lower YoY) Pension Expense ~$FLAT
Slide 8: Advancing Our 2030 Decarbonize & Grow Roadmap
ADVANCING OUR 2030 DECARBONIZE & GROW ROADMAP Expect to grow capacity and underlying earnings by >$3B/year while reducing CO2 emissions by ~30%1 Renewable Energy EDH Renewable energy, asset & Efficiency Innovation, FCDh LA3 E-cracking EDH pilot plant ~2025 optimization, efficiency actions Commercial
Slide 9: Progressing on Our Path to Grow Underlying Earnings
PROGRESSING ON OUR PATH TO GROW UNDERLYING EARNINGS Ramping Higher-Return, Accelerating Circularity Capability Delivering on Efficiency Levers Faster-Payback Investments EBITDA Run-Rate Growth Investments Add Partnerships “Stop the Waste” Digital and Restructuring (%) Mechanical Recycling 1MM mta Ta
Slide 10: Capital Structure
DISCIPLINED EXECUTION ENABLES RESILIENCY ACROSS DYNAMIC ENVIRONMENTS Enhanced Financial Performance and Capital Structure $6.0 Near-Term Debt Maturities Reduced by ~$7B In $B ~$8B Near-Term Maturities At Spin3 Key Metrics At Spin 2Q22 At Spin Today $4.0 EBITDA (3-Year Avg.)1 $8.2B $9.3B CASH FLOW EA
Slide 11: Appendix
APPENDIX
Slide 12: 2Q 2022 Financial Highlights
2Q 2022 FINANCIAL HIGHLIGHTS YoY Operating EPS Reconciliation Key Drivers in the Quarter YoY • Margin expansion due to pricing gains $2.72 $2.31 for silicones and coatings applications • Growth and efficiency levers improving underlying earnings 2Q21 PM&C Growth Equity Turnarounds Raw Below the 2Q22
Slide 13: Principal Joint Venture Detail
PRINCIPAL JOINT VENTURE DETAIL Dow’s Proportional Share of Principal JV Financial Results Drivers of 2Q 2022 2Q 2021 1Q 2022 JV Performance $ millions (unaudited) Kuwait Thai Kuwait Thai Kuwait Thai ▪ All YoY and QoQ: Impacted by Sadara JVs JVs Sadara JVs JVs Sadara JVs JVs pandemic-related lockdown
Slide 14: Operating Earnings Per Share (EPS) Reconciliation
OPERATING EARNINGS PER SHARE (EPS) RECONCILIATION Significant Items Impacting Results for the Three Months Ended Jun 30, 2022 In millions, except per share amounts (Unaudited) Pretax 1 Net Income 2 EPS 3 Reported results $ 2,169 $ 1,661 $ 2.26 Less: Significant items Digitalization program costs (51
Slide 15: Operating (EPS) Reconciliation (Continued)
OPERATING (EPS) RECONCILIATION (CONTINUED) Significant Items Impacting Results for the Six Months Ended Jun 30, 2022 In millions, except per share amounts (Unaudited) Pretax 1 Net Income 2 EPS 3 Reported results $ 4,224 $ 3,230 $ 4.37 Less: Significant items Digitalization program costs (92) (72) (0
Slide 16: Operating (EPS) Reconciliation (Continued)
OPERATING (EPS) RECONCILIATION (CONTINUED) Significant Items Impacting Results for the Three Months Ended Mar 31, 2022 In millions, except per share amounts (Unaudited) Pretax 1 Net Income 2 EPS 3 Reported results $ 2,055 $ 1,569 $ 2.11 Less: Significant items Digitalization program costs (41) (32)
Slide 17: Reconciliation of Net Income to Operating EBIT & Operating EBITDA
RECONCILIATION OF NET INCOME 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 Jun 30, 2021 Sep 30, 2021 Dec 31, 2021 Mar 31, 2022 Jun 30, 2022 Jun 30, 2022 Ju
Slide 18: Reconciliation of Income from Continuing Operations to Pro Forma Operating EBIT and EBITDA
RECONCILIATION OF "INCOME (LOSS) FROM CONTINUING OPERATIONS, NET OF TAX" TO "PRO FORMA OPERATING EBIT" AND "PRO FORMA OPERATING EBITDA" Reconciliation of "Income (Loss) from Continuing Operations, net of Twelve Months Ended tax" to "Pro Forma Operating EBIT" and "Pro Forma Operating EBITDA" In milli
Slide 19: Segment Information
SEGMENT INFORMATION Net Sales by Segment Three Months Three Months Ended Six Months Ended Ended In millions (Unaudited) Mar 31, 2022 Jun 30, 2022 Jun 30, 2021 Jun 30, 2022 Jun 30, 2021 Packaging & Specialty Plastics $ 7,627 $ 8,233 $ 7,121 $ 15,860 $ 13,203 Industrial Intermediates & Infrastructure
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, 2022 Jun 30, 2022 Jun 30, 2021 Jun 30, 2022 Jun 30, 2021 Packaging & Specialty Plastics $ 1,124 $ 1,298 $ 1,884 $ 2,422 $ 3,006 Industrial Interme
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 (Unaudited) Mar 31, 2019 Jun 30, 2021 Sep 30, 2021 Dec 31, 2021 Mar 31, 2022 Jun 30, 2022 Cash provided by operating activities - continuing operations (GAAP) $ 1,043 $ 2,021 $ 2,7
Slide 22: Free Cash Flow Reconciliation (Continued)
FREE CASH FLOW RECONCILIATION (CONTINUED) Reconciliation of Free Cash Flow Twelve Months Ended In millions (Unaudited) Dec 31, 2017 Dec 31, 2018 Dec 31, 2019 Cash provided by (used for) operating activities - continuing operations (GAAP) $ (6,443) $ 3,096 $ 5,713 Impact of ASU 2016-15 and additional
Slide 23: Reconciliation of Operating Return on Capital (ROC)
RECONCILIATION OF OPERATING RETURN ON CAPITAL (ROC) Reconciliation of Operating Return on Capital (ROC) Three Months Ended In millions (Unaudited) Jun 30, 2022 Jun 30, 2021 Net income $ 1,661 $ 1,901 - Significant items, after tax (37) (160) Operating Net Income (non-GAAP) $ 1,698 $ 2,061 Net income
Slide 24: Reconciliation of Net Debt
RECONCILIATION OF NET DEBT Reconciliation of Net Debt In millions (Unaudited) Jun 30, 2022 Dec 31, 2021 Notes payable $ 295 $ 161 Long-term debt due within one year 361 231 Long-term debt 13,065 14,280 Gross debt (GAAP) $ 13,721 $ 14,672 - Cash and cash equivalents 2,367 2,988 - Marketable securitie
Slide 25: 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 26: Safe Harbor
SAFE HARBOR Cautionary Statement about Forward-Looking Statements Certain statements in this report are “forward-looking statements” within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1
Slide 27: 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