Slide 1: Dow 4Q 2021 Results
Dow 4Q 2021 Results January 27, 2022
Slide 2: Agenda
AGENDA Quarterly & Full Year Operating Segment 1. Highlights 2. Performance Earnings 3. Outlook 4. Growth Drivers & Value Creation Priorities 2
Slide 3: 4Q 2021 Highlights
4Q | 2021 HIGHLIGHTS ▪ Delivered top- and bottom-line growth YoY Net Sales ▪ Net Sales up 34% YoY with gains in every operating segment, business and region $14.4B ➢ Price increased 39% YoY, with gains across all operating segments, businesses and regions $2.3B ➢ Volume declined 4% YoY driven by sup
Slide 4: 2021 Full-Year Financial & ESG Performance Highlights
2021 | FULL-YEAR FINANCIAL & ESG PERFORMANCE HIGHLIGHTS Financial Highlights ESG Performance Delivered record Decreased gross debt by Returned Generated Clear path to reduce All 4 new operating EBIT of carbon emissions Directors added $9.5B $2.4B >$3B $7.1B 30% to the Board in last 2 years are and r
Slide 5: 4Q 2021 Operating Segment Performance
4Q | 2021 OPERATING SEGMENT PERFORMANCE REVENUE ($MM) Sales ↑ 40%; Volume ↓ 3%; Price ↑ 44% Op. EBIT ($MM) & Op. EBIT Margin % Op. EBIT ↑ 85%; Margin ↑ 490 bps Specialty Plastics Y-o-Y Y-o-Y 8,0 00 Price gains in both businesses and all regions; 1,954 Improvement in core business and equity Packagin
Slide 6: Dow's Portfolio Advantaged to Capture High-Value, Sustainable Growth
DOW’S PORTFOLIO ADVANTAGED TO CAPTURE HIGH-VALUE, SUSTAINABLE GROWTH Participation in Attractive Market Verticals Growing with Sustainability Trends Packaging Infrastructure Consumer Mobility ▪ Resilient and growing global ▪ Robust demand in the Americas & ▪ Global demand for appliances & ▪ Semicond
Slide 7: Strong Demand Growth Expected to Continue in 2022
STRONG DEMAND GROWTH EXPECTED TO CONTINUE IN 2022 Consumer-Driven Demand Growth Remains Robust ▪ Global GDP growth forecasts continue to Above Average Consumer Spending U.S. Consumer Confidence Rebounding remain well above historical averages Growth Expected in 2022 on Improving Expectations for 202
Slide 8: 1Q22 Modeling Guidance
1Q22 MODELING GUIDANCE Dow Remains Well Positioned to Capture Global Demand Strength Net Sales ~$14.0 – $14.5B Depreciation & Amortization ~$715MM Quarterly Operational Tax Rate ~20 – 24% Net Interest Expense (Net of Int. Income) ~$150MM Net Income Attrib. to Non-Controlling Int. ~$25MM Share Count
Slide 9: FY 2022 Modeling Considerations
FY 2022 MODELING CONSIDERATIONS Cash Flow Considerations in 2022 Operating EBIT Drivers vs. FY21 Dividends from ~$550MM (up ~$250MM YoY) Equity Earnings Down ~$300-400MM YoY (net of T/As) Equity Companies Pension Expense ~$FLAT YoY Pension ~$250MM (~$1B lower YoY) Corporate Op. EBIT of ~$(275)MM and
Slide 10: Growth and Efficiency Programs Drive Earnings
GROWTH AND EFFICIENCY PROGRAMS DRIVE EARNINGS Earnings Growth Enables Increased Participation in Attractive Downstream End Markets In-Flight Actions Increase Underlying EBITDA by >$3B Near-Term Growth Levers P&SP: Fort Supporting lower- Saskatchewan carbon and circular cracker expansion packaging so
Slide 11: Progressing Targets to Capture Growth & Improve Earnings Quality
PROGRESSING TARGETS TO CAPTURE GROWTH & IMPROVE EARNINGS QUALITY A Clear Path to Decarbonize & Grow Advancing Plastics Circularity 2005 – 2020 Announced world’s 1st CO2 15% | Volume ~30%1 Enable Six of Dow’s largest sites received 40 net-zero carbon emissions ISCC Plus recognition related to 100
Slide 12: Consistent Strategic Priorities for Long-Term Value Creation
CONSISTENT STRATEGIC PRIORITIES FOR LONG-TERM VALUE CREATION DISCIPLINED LOW-COST PROFITABLE BEST-OWNER CAPITAL OPERATING ESG LEADERSHIP GROWTH MINDSET ALLOCATION MODEL Decarbonize assets to Prioritize lower-risk, Maintain and grow Maintain top-quartile Maintain culture of zero-carbon emissions fast
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Slide 14: Appendix
Appendix 14
Slide 15: 4Q 2021 Financial Highlights
4Q 2021 FINANCIAL HIGHLIGHTS YoY Operating EPS Reconciliation Key Drivers in the Quarter YoY • Price gains in all operating $2.15 segments, businesses and regions • Improved margins at Kuwait, $0.81 Thailand and Sadara joint ventures 4Q20 Margin Turnarounds Volume Tax Rate Equity Interest/ 4Q21 Expa
Slide 16: Principal Joint Venture Detail
PRINCIPAL JOINT VENTURE DETAIL Dow’s Proportional Share of Principal JV Financial Results Drivers of 4Q 2021 4Q 2020 3Q 2021 JV Performance Kuwait Thai Kuwait Thai Kuwait Thai $ millions (unaudited) Sadara JVs JVs Sadara JVs JVs Sadara JVs JVs ▪ Sadara: Margin expansion in key value chains offset by
Slide 17: Operating Earnings Per Share (EPS) Reconciliation
OPERATING EARNINGS PER SHARE (EPS) RECONCILIATION Significant Items Impacting Results for the Three Months Ended Dec 31, 2021 In millions, except per share amounts (Unaudited) Pretax 1 Net Income 2 EPS 3 Reported results $ 2,118 $ 1,736 $ 2.32 Less: Significant items Digitalization program costs (48
Slide 18: Operating (EPS) Reconciliation (Continued)
OPERATING (EPS) RECONCILIATION (CONTINUED) Significant Items Impacting Results for the Twelve Months Ended Dec 31, 2021 1 2 3 In millions, except per share amounts (Unaudited) Pretax Net Income EPS Reported results $ 8,145 $ 6,311 $ 8.38 Less: Significant items Digitalization program costs (169) (13
Slide 19: Operating (EPS) Reconciliation (Continued)
OPERATING (EPS) RECONCILIATION (CONTINUED) Significant Items Impacting Results for the Three Months Ended Sep 30, 2021 1 2 3 In millions, except per share amounts (Unaudited) Pretax Net Income EPS Reported results $ 2,248 $ 1,683 $ 2.23 Less: Significant items Digitalization program costs (40) (32)
Slide 20: Reconciliation of Net Income to Operating EBIT & Operating EBITDA
RECONCILIATION OF NET INCOME TO OPERATING EBIT & OPERATING EBITDA Reconciliation of "Net income" to "Operating EBIT" and Three Months Ended Twelve Months Ended "Operating EBITDA" In millions (Unaudited) Dec 31, 2020 Mar 31, 2021 Jun 30, 2021 Sep 30, 2021 Dec 31, 2021 Dec 31, 2021 Dec 31, 2020 Net in
Slide 21: Segment Information
SEGMENT INFORMATION Net Sales by Segment Three Months Three Months Ended Twelve Months Ended Ended In millions (Unaudited) Sep 30, 2021 Dec 31, 2021 Dec 31, 2020 Dec 31, 2021 Dec 31, 2020 Packaging & Specialty Plastics $ 7,736 $ 7,189 $ 5,126 $ 28,128 $ 18,301 Industrial Intermediates & Infrastructu
Slide 22: Segment Information (Continued)
SEGMENT INFORMATION (CONTINUED) Adjusted Operating EBIT by Segment Three Months Three Months Ended Twelve Months Ended Ended In millions (Unaudited) Sep 30, 2021 Dec 31, 2021 Dec 31, 2020 Dec 31, 2021 Dec 31, 2020 Packaging & Specialty Plastics $ 1,830 $ 1,312 $ 703 $ 6,148 $ 2,152 Industrial Interm
Slide 23: Cash Conversion and Free Cash Flow Reconciliation
CASH CONVERSION AND FREE CASH FLOW RECONCILIATION Reconciliation of Cash Flow Conversion Three Months Ended In millions Dec 31, 2020 Mar 31, 2021 Jun 30, 2021 Sep 30, 2021 Dec 31, 2021 Cash provided by (used for) operating activities - continuing operations (GAAP) $ 1,656 $ (228) $ 2,021 $ 2,719 $ 2
Slide 24: Reconciliation of Net Debt
RECONCILIATION OF NET DEBT Reconciliation of Net Debt In millions (Unaudited) Dec 31, 2021 Dec 31, 2020 Notes payable $ 161 $ 156 Long-term debt due within one year 231 460 Long-term debt 14,280 16,491 Gross debt (GAAP) $ 14,672 $ 17,107 - Cash and cash equivalents 2,988 5,104 - Marketable securitie
Slide 25: Safe Harbor & General Comments
SAFE HARBOR & GENERAL COMMENTS 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 Sec
Slide 26: 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