Slide 1: 4Q 2023 Results
4Q 2023 RESULTS January 25, 2024
Slide 2: Agenda
AGENDA 4Q 2023 • Quarterly Results • Operating Segment Performance R ES U LT S • Outlook • Growth and Sustainability Roadmap Drives Shareholder Value 2
Slide 3: 4Q 2023 Performance Overview
4Q 2023 PERFORMANCE OVERVIEW ▪ Net sales were $10.6B ➢ Volume up 2% YoY; down 1% QoQ $10.6B ➢ Price declined 13% YoY; flat QoQ NET SALES ▪ Net loss of $95MM ➢ Primarily due to a one-time non-cash, non-operating settlement charge of $642MM, enabling risk transfer of $1.7B in pension liabilities $1.2B
Slide 4: 2023 Full Year Highlights
2023 FULL YEAR HIGHLIGHTS Financial Highlights Ambition Highlights Launched reduced-carbon, bio-based Achieved Delivered and circular Propylene Glycol DEC, net sales of Operating EBIT of REN, and CIR with ISCC Plus $44.6B $2.8B Great Place to Work® and FORTUNE named certification in Europe Dow one o
Slide 5: 4Q 2023 Operating Segment Performance
4Q 2023 OPERATING SEGMENT PERFORMANCE REVENUE ($MM) Sales ↓ 7%; Price ↓ 11%; Volume ↑ 3% Op. EBIT ($MM) & Op. EBIT Margin % Op. EBIT ↑ $9MM; Margins ↑ 100 bps Specialty Plastics Y-o-Y Y-o-Y 6,5 00 Packaging & 6,0 00 Declines driven by lower prices globally; 100 000% Results driven primarily due to r
Slide 6: Market Conditions Remain Dynamic
MARKET CONDITIONS REMAIN DYNAMIC U.S. – Consumer spending is resilient but industrial activity remains slow U.S. chemical railcar loadings are up 9.6% in January vs. prior year Retail trade sales continued to grow, up 4.8% YoY in December China Rest of NAA LAA EMEAI World S&P Manufacturing PMI decli
Slide 7: Well-Positioned to Deliver Growth Through the Cycle
WELL-POSITIONED TO DELIVER GROWTH THROUGH THE CYCLE Global Reach with Strategically Advantaged Positions On-Track to Deliver ~$2B/year EBITDA1 Growth by Mid-Decade Est. Mid-Cycle Projects Start-Up EBITDA1 Status Europe FS1 cracker expansion, FCDh, Alkoxylates investments, LPG advantage 2022 ~$400MM
Slide 8: 1Q24 Modeling Guidance
1Q24 MODELING GUIDANCE Maintaining Our Operational and Financial Discipline Net Sales ~FLAT QoQ Depreciation & Amortization ~$700MM Quarterly Operational Tax Rate ~24 – 28% Net Interest Expense (Net of Int. Income) ~$125MM Net Income Attrib. to Non-Controlling Int. ~$25MM Average Share Count ~705MM
Slide 9: Our Growth and Sustainability Roadmap to 2030
OUR GROWTH AND SUSTAINABILITY ROADMAP TO 2030 Decarbonize & Grow Transform the Waste Grow underlying earnings by ~$3B/year, while reducing GHG emissions by Disciplined organic Commercialize 3MM mta of ~5MM mta by 20301 circular & renewable solutions growth investments Near-Term Growth and → Strategi
Slide 10: Polyethylene Demand Remains at ~1.2-1.4X GDP
POLYETHYLENE DEMAND REMAINS AT ~1.2 – 1.4X GDP Global Polyethylene Demand (MM MT) ▪ Overall growth ~1.2 – 1.4X GDP— 250–300 demand for PE remains robust Actual Forecast 3.0% Mech. Recycled (MR) ▪ Demand shifting toward circular, Bio-based (bio) low-carbon driven by regulations and 200–250 consumer p
Slide 11: Advancing Progress on Fort Saskatchewan Path2Zero
ADVANCING PROGRESS ON FORT SASKATCHEWAN PATH2ZERO World’s First Cracker & Derivatives Complex with Net-Zero CO2 Emissions Fort Saskatchewan Net-Zero Scope 1 & 2 Emissions Site ▪ Global ethylene (C2) and PE demand continues to grow at ~1.2 – 1.4X GDP with no new ethylene Key Project Milestones capaci
Slide 12: Financial Flexibility to Advance Long-Term Strategy
FINANCIAL FLEXIBILITY TO ADVANCE LONG-TERM STRATEGY Enhanced Financial Performance and Capital Structure Solid Financial Position Key Metrics At Spin 4Q23 No Substantial Debt Maturity Until 2027 ▪ Reduced net debt and pension liabilities Operating EBITDA (3-Year Avg.)1 $8.2B $9.0B ($B) by ~$10B sinc
Slide 13: Appendix
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Slide 14: FY 2024 Modeling Considerations
FY 2024 MODELING CONSIDERATIONS Operating EBIT Drivers vs. FY23 Cash Flow Considerations in 2024 Equity Earnings Up ~$50-100MM YoY Dividends from Equity ~$200MM Companies Pension and Defined ~FLAT YoY Contribution Impact Pension contributions ~$150MM (~Flat YoY) Corporate Op. EBIT of ~$(275)MM and O
Slide 15: 4Q 2023 Financial Highlights
4Q 2023 FINANCIAL HIGHLIGHTS QoQ Operating EPS Reconciliation Key Drivers QoQ • Lower turnaround costs $0.48 • Higher licensing earnings in $0.43 Packaging & Specialty Plastics in 4Q23 3Q23 Turnarounds P&SP Licensing Below the Line Bahia Blanca UPE Lower Volume and 4Q23 Earnings Items Operating Rate
Slide 16: Principal Joint Venture Detail
PRINCIPAL JOINT VENTURE DETAIL Dow’s Proportional Share of Principal JV Financial Results Drivers of 4Q 2023 4Q 2022 3Q 2023 JV Performance Kuwait Thai Kuwait Thai Kuwait Thai ▪ Sadara: Volume growth more $ millions (unaudited) Sadara JVs JVs Sadara JVs JVs Sadara JVs JVs than offset by lower Asian
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, 2023 In millions, except per share amounts (Unaudited) Pretax 1 Net Income 2 EPS 3 Reported results $ (352) $ (105) $ (0.15) Less: Significant items Restructuring, implementation
Slide 18: Operating (EPS) Reconciliation (Continued)
OPERATING (EPS) RECONCILIATION (CONTINUED) Significant Items Impacting Results for the Twelve Months Ended Dec 31, 2023 1 2 3 In millions, except per share amounts (Unaudited) Pretax Net Income EPS Reported results $ 656 $ 589 $ 0.82 Less: Significant items Restructuring, implementation and efficien
Slide 19: Operating (EPS) Reconciliation (Continued)
OPERATING (EPS) RECONCILIATION (CONTINUED) 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 Reported results $ 417 $ 302 $ 0.42 Less: Significant items Restructuring, implementation and efficienc
Slide 20: 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 Twelve Months Ended and "Operating EBITDA" In millions (Unaudited) Dec 31, 2020 Dec 31, 2021 Dec 31, 2022 Mar 31, 2023 Jun 30, 2023 Sep 30, 2023 Dec 3
Slide 21: Reconciliation 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 22: Segment Information
SEGMENT INFORMATION Net Sales by Segment Three Months Three Months Ended Twelve Months Ended Ended In millions (Unaudited) Sep 30, 2023 Dec 31, 2023 Dec 31, 2022 Dec 31, 2023 Dec 31, 2022 Packaging & Specialty Plastics $ 5,454 $ 5,641 $ 6,073 $ 23,149 $ 29,260 Industrial Intermediates & Infrastructu
Slide 23: 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, 2023 Dec 31, 2023 Dec 31, 2022 Dec 31, 2023 Dec 31, 2022 Packaging & Specialty Plastics $ 426 $ 624 $ 599 $ 2,570 $ 3,751 Industrial Intermedia
Slide 24: 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 Dec 31, 2022 Mar 31, 2023 Jun 30, 2023 Sep 30, 2023 Dec 31, 2023 Cash provided by operating activities - continuing operations (GAAP) $ 1,043 $ 2,078 $ 531
Slide 25: 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 26: 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) Dec 31, 2023 Dec 31, 2022 Net income (loss) available for Dow Inc. common stockholders (GAAP) $ (105) $ 613 - Significant items, after tax (411) 289 Oper
Slide 27: Reconciliation of Net Debt
RECONCILIATION OF NET DEBT Reconciliation of Net Debt In millions (Unaudited) Dec 31, 2023 Dec 31, 2022 Notes payable $ 62 $ 362 Long-term debt due within one year 117 362 Long-term debt 14,907 14,698 Gross debt (GAAP) $ 15,086 $ 15,422 - Cash and cash equivalents 2,987 3,886 - Marketable securities
Slide 28: Operating Net Income Returned to Shareholders
OPERATING NET INCOME RETURNED TO SHAREHOLDERS Operating Net Income Returned to Shareholders Three Months Ended Twelve Months Ended In millions (Unaudited) Jun 30, 2019 Sep 30, 2019 Dec 31, 2019 Dec 31, 2020 Dec 31, 2021 Dec 31, 2022 Dec 31, 2023 Net income (loss) available for Dow Inc. common stockh
Slide 29: 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 30: 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 31: Non-GAAP & Definitions
NON-GAAP & DEFINITIONS Non-GAAP Financial Measures This presentation 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 alloca