Commission File Number | Exact Name of Registrant as Specified in its Charter, Principal Office Address and Telephone Number | State of Incorporation or Organization | I.R.S. Employer Identification No. | ||||||||
( |
Registrant | Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||
Emerging growth company |
Exhibit No. | Exhibit Description | ||||
Press release issued by Dow Inc. on | |||||
104 | Cover Page Interactive Data File. The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded with the Inline XBRL document. |
Signature |
/s/ RONALD C. EDMONDS | ||
Ronald C. Edmonds Controller and Vice President of Controllers and Tax |
Three Months Ended September 30 | Three Months Ended June 30 | ||||||||||||||||
In millions, except per share amounts | 3Q22 | 3Q21 | vs. SQLY [B / (W)] | 2Q22 | vs. PQ [B / (W)] | ||||||||||||
Net Sales | $ | 14,115 | $ | 14,837 | $ | (722) | $ | 15,664 | $ | (1,549) | |||||||
GAAP Income, Net of Tax | $ | 760 | $ | 1,706 | $ | (946) | $ | 1,681 | $ | (921) | |||||||
Operating EBIT1 | $ | 1,195 | $ | 2,886 | $ | (1,691) | $ | 2,375 | $ | (1,180) | |||||||
Operating EBIT Margin1 | 8.5 | % | 19.5 | % | (1,100) bps | 15.2 | % | (670) bps | |||||||||
Operating EBITDA1 | $ | 1,863 | $ | 3,611 | $ | (1,748) | $ | 3,059 | $ | (1,196) | |||||||
GAAP Earnings Per Share | $ | 1.02 | $ | 2.23 | $ | (1.21) | $ | 2.26 | $ | (1.24) | |||||||
Operating Earnings Per Share1 | $ | 1.11 | $ | 2.75 | $ | (1.64) | $ | 2.31 | $ | (1.20) | |||||||
Cash Provided by Operating Activities - Cont. Ops | $ | 1,940 | $ | 2,719 | $ | (779) | $ | 1,856 | $ | 84 |
Three Months Ended September 30 | Three Months Ended June 30 | ||||||||||||||||
In millions, except margin percentages | 3Q22 | 3Q21 | vs. SQLY [B / (W)] | 2Q22 | vs. PQ [B / (W)] | ||||||||||||
Net Sales | $ | 7,327 | $ | 7,736 | $ | (409) | $ | 8,233 | $ | (906) | |||||||
Operating EBIT | $ | 785 | $ | 1,954 | $ | (1,169) | $ | 1,436 | $ | (651) | |||||||
Operating EBIT Margin | 10.7 | % | 25.3 | % | (1,460) bps | 17.4 | % | (670) bps | |||||||||
Equity Earnings | $ | 55 | $ | 124 | $ | (69) | $ | 138 | $ | (83) |
Three Months Ended September 30 | Three Months Ended June 30 | ||||||||||||||||
In millions, except margin percentages | 3Q22 | 3Q21 | vs. SQLY [B / (W)] | 2Q22 | vs. PQ [B / (W)] | ||||||||||||
Net Sales | $ | 4,059 | $ | 4,481 | $ | (422) | $ | 4,370 | $ | (311) | |||||||
Operating EBIT | $ | 167 | $ | 713 | $ | (546) | $ | 426 | $ | (259) | |||||||
Operating EBIT Margin | 4.1 | % | 15.9 | % | (1,180) bps | 9.7 | % | (560) bps | |||||||||
Equity Earnings (Losses) | $ | (114) | $ | 122 | $ | (236) | $ | 57 | $ | (171) |
Three Months Ended September 30 | Three Months Ended June 30 | ||||||||||||||||
In millions, except margin percentages | 3Q22 | 3Q21 | vs. SQLY [B / (W)] | 2Q22 | vs. PQ [B / (W)] | ||||||||||||
Net Sales | $ | 2,654 | $ | 2,526 | $ | 128 | $ | 3,003 | $ | (349) | |||||||
Operating EBIT | $ | 302 | $ | 284 | $ | 18 | $ | 561 | $ | (259) | |||||||
Operating EBIT Margin | 11.4 | % | 11.2 | % | 20 bps | 18.7 | % | (730) bps | |||||||||
Equity Earnings | $ | 1 | $ | 3 | $ | (2) | $ | 2 | $ | (1) |
Investors: | Media: | ||||
Pankaj Gupta | Kyle Bandlow | ||||
pgupta@dow.com | kbandlow@dow.com | ||||
+1 989-638-5265 | +1 989-638-2417 |
In millions, except per share amounts (Unaudited) | Three Months Ended | Nine Months Ended | ||||||||||||
Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2022 | Sep 30, 2021 | |||||||||||
Net sales | $ | 14,115 | $ | 14,837 | $ | 45,043 | $ | 40,604 | ||||||
Cost of sales | 12,381 | 11,611 | 37,682 | 32,413 | ||||||||||
Research and development expenses | 191 | 210 | 626 | 632 | ||||||||||
Selling, general and administrative expenses | 356 | 403 | 1,289 | 1,209 | ||||||||||
Amortization of intangibles | 83 | 100 | 256 | 301 | ||||||||||
Restructuring and asset related charges - net | — | — | 186 | 22 | ||||||||||
Equity in earnings (losses) of nonconsolidated affiliates | (58) | 249 | 311 | 751 | ||||||||||
Sundry income (expense) - net | 69 | (350) | 292 | (225) | ||||||||||
Interest income | 41 | 14 | 105 | 35 | ||||||||||
Interest expense and amortization of debt discount | 155 | 178 | 487 | 561 | ||||||||||
Income before income taxes | 1,001 | 2,248 | 5,225 | 6,027 | ||||||||||
Provision for income taxes | 241 | 542 | 1,232 | 1,383 | ||||||||||
Net income | 760 | 1,706 | 3,993 | 4,644 | ||||||||||
Net income attributable to noncontrolling interests | 21 | 23 | 24 | 69 | ||||||||||
Net income available for Dow Inc. common stockholders | $ | 739 | $ | 1,683 | $ | 3,969 | $ | 4,575 | ||||||
— | — | |||||||||||||
Per common share data: | ||||||||||||||
Earnings per common share - basic | $ | 1.03 | $ | 2.25 | $ | 5.45 | $ | 6.11 | ||||||
Earnings per common share - diluted | $ | 1.02 | $ | 2.23 | $ | 5.41 | $ | 6.06 | ||||||
Weighted-average common shares outstanding - basic | 714.3 | 744.5 | 724.9 | 745.4 | ||||||||||
Weighted-average common shares outstanding - diluted | 718.1 | 750.0 | 729.8 | 750.9 |
In millions, except share amounts (Unaudited) | Sep 30, 2022 | Dec 31, 2021 | ||||||
Assets | ||||||||
Current Assets | ||||||||
Cash and cash equivalents | $ | 2,216 | $ | 2,988 | ||||
Accounts and notes receivable: | ||||||||
Trade (net of allowance for doubtful receivables - 2022: $212; 2021: $54) | 6,407 | 6,841 | ||||||
Other | 2,123 | 2,713 | ||||||
Inventories | 7,571 | 7,372 | ||||||
Other current assets | 1,460 | 934 | ||||||
Total current assets | 19,777 | 20,848 | ||||||
Investments | ||||||||
Investment in nonconsolidated affiliates | 1,785 | 2,045 | ||||||
Other investments (investments carried at fair value - 2022: $1,685; 2021: $2,079) | 2,732 | 3,193 | ||||||
Noncurrent receivables | 499 | 478 | ||||||
Total investments | 5,016 | 5,716 | ||||||
Property | ||||||||
Property | 56,931 | 57,604 | ||||||
Less: Accumulated depreciation | 36,899 | 37,049 | ||||||
Net property | 20,032 | 20,555 | ||||||
Other Assets | ||||||||
Goodwill | 8,524 | 8,764 | ||||||
Other intangible assets (net of accumulated amortization - 2022: $4,888; 2021: $4,725) | 2,483 | 2,881 | ||||||
Operating lease right-of-use assets | 1,231 | 1,412 | ||||||
Deferred income tax assets | 1,136 | 1,358 | ||||||
Deferred charges and other assets | 1,358 | 1,456 | ||||||
Total other assets | 14,732 | 15,871 | ||||||
Total Assets | $ | 59,557 | $ | 62,990 | ||||
Liabilities and Equity | ||||||||
Current Liabilities | ||||||||
Notes payable | $ | 185 | $ | 161 | ||||
Long-term debt due within one year | 364 | 231 | ||||||
Accounts payable: | ||||||||
Trade | 5,008 | 5,577 | ||||||
Other | 2,599 | 2,839 | ||||||
Operating lease liabilities - current | 277 | 314 | ||||||
Income taxes payable | 579 | 623 | ||||||
Accrued and other current liabilities | 3,303 | 3,481 | ||||||
Total current liabilities | 12,315 | 13,226 | ||||||
Long-Term Debt | 12,921 | 14,280 | ||||||
Other Noncurrent Liabilities | ||||||||
Deferred income tax liabilities | 716 | 506 | ||||||
Pension and other postretirement benefits - noncurrent | 6,541 | 7,557 | ||||||
Asbestos-related liabilities - noncurrent | 868 | 931 | ||||||
Operating lease liabilities - noncurrent | 1,012 | 1,149 | ||||||
Other noncurrent obligations | 6,555 | 6,602 | ||||||
Total other noncurrent liabilities | 15,692 | 16,745 | ||||||
Stockholders’ Equity | ||||||||
Common stock (authorized 5,000,000,000 shares of $0.01 par value each; issued 2022: 768,611,564 shares; 2021: 764,226,882 shares) | 8 | 8 | ||||||
Additional paid-in capital | 8,396 | 8,151 | ||||||
Retained earnings | 23,068 | 20,623 | ||||||
Accumulated other comprehensive loss | (9,582) | (8,977) | ||||||
Unearned ESOP shares | — | (15) | ||||||
Treasury stock at cost (2022: 64,852,295 shares; 2021: 29,011,573 shares) | (3,773) | (1,625) | ||||||
Dow Inc.’s stockholders’ equity | 18,117 | 18,165 | ||||||
Noncontrolling interests | 512 | 574 | ||||||
Total equity | 18,629 | 18,739 | ||||||
Total Liabilities and Equity | $ | 59,557 | $ | 62,990 |
In millions (Unaudited) | Nine Months Ended | |||||||
Sep 30, 2022 | Sep 30, 2021 | |||||||
Operating Activities | ||||||||
Net income | $ | 3,993 | $ | 4,644 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 2,104 | 2,187 | ||||||
Provision for deferred income tax | 124 | 488 | ||||||
Earnings of nonconsolidated affiliates less than (in excess of) dividends received | 517 | (519) | ||||||
Net periodic pension benefit cost | 19 | 34 | ||||||
Pension contributions | (156) | (1,166) | ||||||
Net gain on sales of assets, businesses and investments | (11) | (67) | ||||||
Restructuring and asset related charges - net | 186 | 22 | ||||||
Other net loss | 159 | 874 | ||||||
Changes in assets and liabilities, net of effects of acquired and divested companies: | ||||||||
Accounts and notes receivable | 323 | (2,222) | ||||||
Inventories | (254) | (1,502) | ||||||
Accounts payable | (860) | 1,487 | ||||||
Other assets and liabilities, net | (736) | 252 | ||||||
Cash provided by operating activities - continuing operations | 5,408 | 4,512 | ||||||
Cash used for operating activities - discontinued operations | (11) | (78) | ||||||
Cash provided by operating activities | 5,397 | 4,434 | ||||||
Investing Activities | ||||||||
Capital expenditures | (1,224) | (1,035) | ||||||
Investment in gas field developments | (134) | (44) | ||||||
Purchases of previously leased assets | (5) | (5) | ||||||
Proceeds from sales of property and businesses, net of cash divested | 16 | 15 | ||||||
Acquisitions of property and businesses, net of cash acquired | (54) | (107) | ||||||
Investments in and loans to nonconsolidated affiliates | (69) | — | ||||||
Distributions and loan repayments from nonconsolidated affiliates | 10 | 11 | ||||||
Proceeds from sales of ownership interests in nonconsolidated affiliates | 11 | — | ||||||
Purchases of investments | (445) | (1,004) | ||||||
Proceeds from sales and maturities of investments | 596 | 644 | ||||||
Other investing activities, net | (41) | (10) | ||||||
Cash used for investing activities | (1,339) | (1,535) | ||||||
Financing Activities | ||||||||
Changes in short-term notes payable | 72 | (44) | ||||||
Proceeds from issuance of short-term debt greater than three months | — | 144 | ||||||
Payments on short-term debt greater than three months | (14) | — | ||||||
Proceeds from issuance of long-term debt | 82 | 95 | ||||||
Payments on long-term debt | (957) | (2,638) | ||||||
Purchases of treasury stock | (2,200) | (600) | ||||||
Proceeds from issuance of stock | 99 | 212 | ||||||
Transaction financing, debt issuance and other costs | (8) | (536) | ||||||
Employee taxes paid for share-based payment arrangements | (34) | (11) | ||||||
Distributions to noncontrolling interests | (42) | (35) | ||||||
Dividends paid to stockholders | (1,511) | (1,561) | ||||||
Cash used for financing activities | (4,513) | (4,974) | ||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (261) | (57) | ||||||
Summary | ||||||||
Decrease in cash, cash equivalents and restricted cash | (716) | (2,132) | ||||||
Cash, cash equivalents and restricted cash at beginning of period | 3,033 | 5,108 | ||||||
Cash, cash equivalents and restricted cash at end of period | $ | 2,317 | $ | 2,976 | ||||
Less: Restricted cash and cash equivalents, included in "Other current assets" | 101 | 65 | ||||||
Cash and cash equivalents at end of period | $ | 2,216 | $ | 2,911 |
Net Sales by Segment | Three Months Ended | Nine Months Ended | ||||||||||||
In millions (Unaudited) | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2022 | Sep 30, 2021 | ||||||||||
Packaging & Specialty Plastics | $ | 7,327 | $ | 7,736 | $ | 23,187 | $ | 20,939 | ||||||
Industrial Intermediates & Infrastructure | 4,059 | 4,481 | 12,953 | 12,303 | ||||||||||
Performance Materials & Coatings | 2,654 | 2,526 | 8,706 | 7,114 | ||||||||||
Corporate | 75 | 94 | 197 | 248 | ||||||||||
Total | $ | 14,115 | $ | 14,837 | $ | 45,043 | $ | 40,604 | ||||||
U.S. & Canada | $ | 5,334 | $ | 5,476 | $ | 16,578 | $ | 14,431 | ||||||
EMEAI 1 | 4,634 | 5,229 | 15,823 | 14,660 | ||||||||||
Asia Pacific | 2,571 | 2,579 | 7,997 | 7,423 | ||||||||||
Latin America | 1,576 | 1,553 | 4,645 | 4,090 | ||||||||||
Total | $ | 14,115 | $ | 14,837 | $ | 45,043 | $ | 40,604 |
Net Sales Variance by Segment and Geographic Region | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2022 | ||||||||||||||||||||||||
Local Price & Product Mix | Currency | Volume | Total | Local Price & Product Mix | Currency | Volume | Total | |||||||||||||||||||
Percent change from prior year | ||||||||||||||||||||||||||
Packaging & Specialty Plastics | (2) | % | (3) | % | — | % | (5) | % | 12 | % | (3) | % | 2 | % | 11 | % | ||||||||||
Industrial Intermediates & Infrastructure | 5 | (5) | (9) | (9) | 15 | (5) | (5) | 5 | ||||||||||||||||||
Performance Materials & Coatings | 15 | (5) | (5) | 5 | 29 | (4) | (3) | 22 | ||||||||||||||||||
Total | 3 | % | (4) | % | (4) | % | (5) | % | 16 | % | (4) | % | (1) | % | 11 | % | ||||||||||
Total, excluding the Hydrocarbons & Energy business | 4 | % | (4) | % | (8) | % | (8) | % | 15 | % | (4) | % | (3) | % | 8 | % | ||||||||||
U.S. & Canada | (5) | % | — | % | 2 | % | (3) | % | 12 | % | — | % | 3 | % | 15 | % | ||||||||||
EMEAI 1 | 11 | (10) | (12) | (11) | 24 | (9) | (7) | 8 | ||||||||||||||||||
Asia Pacific | 2 | (4) | 2 | — | 12 | (3) | (1) | 8 | ||||||||||||||||||
Latin America | 1 | — | — | 1 | 11 | — | 3 | 14 | ||||||||||||||||||
Total | 3 | % | (4) | % | (4) | % | (5) | % | 16 | % | (4) | % | (1) | % | 11 | % |
Net Sales Variance by Segment and Geographic Region | Three Months Ended Sep 30, 2022 | |||||||||||||
Local Price & Product Mix | Currency | Volume | Total | |||||||||||
Percent change from prior quarter | ||||||||||||||
Packaging & Specialty Plastics | (7) | % | (1) | % | (3) | % | (11) | % | ||||||
Industrial Intermediates & Infrastructure | (5) | (2) | — | (7) | ||||||||||
Performance Materials & Coatings | (3) | (2) | (7) | (12) | ||||||||||
Total | (6) | % | (1) | % | (3) | % | (10) | % | ||||||
Total, excluding the Hydrocarbons & Energy business | (5) | % | (2) | % | (3) | % | (10) | % | ||||||
U.S. & Canada | (4) | % | — | % | (3) | % | (7) | % | ||||||
EMEAI 1 | (7) | (3) | (8) | (18) | ||||||||||
Asia Pacific | (7) | (2) | 5 | (4) | ||||||||||
Latin America | (4) | — | 2 | (2) | ||||||||||
Total | (6) | % | (1) | % | (3) | % | (10) | % |
Operating EBIT by Segment | Three Months Ended | Nine Months Ended | |||||||||||||||
In millions (Unaudited) | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2022 | Sep 30, 2021 | |||||||||||||
Packaging & Specialty Plastics | $ | 785 | $ | 1,954 | $ | 3,455 | $ | 5,196 | |||||||||
Industrial Intermediates & Infrastructure | 167 | 713 | 1,254 | 1,687 | |||||||||||||
Performance Materials & Coatings | 302 | 284 | 1,458 | 571 | |||||||||||||
Corporate | (59) | (65) | (178) | (186) | |||||||||||||
Total | $ | 1,195 | $ | 2,886 | $ | 5,989 | $ | 7,268 | |||||||||
Depreciation and Amortization by Segment | Three Months Ended | Nine Months Ended | |||||||||||||||
In millions (Unaudited) | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2022 | Sep 30, 2021 | |||||||||||||
Packaging & Specialty Plastics | $ | 337 | $ | 354 | $ | 1,076 | $ | 1,042 | |||||||||
Industrial Intermediates & Infrastructure | 132 | 157 | 418 | 481 | |||||||||||||
Performance Materials & Coatings | 195 | 207 | 592 | 642 | |||||||||||||
Corporate | 4 | 7 | 18 | 22 | |||||||||||||
Total | $ | 668 | $ | 725 | $ | 2,104 | $ | 2,187 | |||||||||
Operating EBITDA by Segment | Three Months Ended | Nine Months Ended | |||||||||||||||
In millions (Unaudited) | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2022 | Sep 30, 2021 | |||||||||||||
Packaging & Specialty Plastics | $ | 1,122 | $ | 2,308 | $ | 4,531 | $ | 6,238 | |||||||||
Industrial Intermediates & Infrastructure | 299 | 870 | 1,672 | 2,168 | |||||||||||||
Performance Materials & Coatings | 497 | 491 | 2,050 | 1,213 | |||||||||||||
Corporate | (55) | (58) | (160) | (164) | |||||||||||||
Total | $ | 1,863 | $ | 3,611 | $ | 8,093 | $ | 9,455 | |||||||||
Equity in Earnings (Losses) of Nonconsolidated Affiliates by Segment | Three Months Ended | Nine Months Ended | |||||||||||||||
In millions (Unaudited) | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2022 | Sep 30, 2021 | |||||||||||||
Packaging & Specialty Plastics | $ | 55 | $ | 124 | $ | 303 | $ | 360 | |||||||||
Industrial Intermediates & Infrastructure | (114) | 122 | 5 | 381 | |||||||||||||
Performance Materials & Coatings | 1 | 3 | 6 | 5 | |||||||||||||
Corporate | — | — | (3) | 5 | |||||||||||||
Total | $ | (58) | $ | 249 | $ | 311 | $ | 751 | |||||||||
Reconciliation of "Net income" to "Operating EBIT" | Three Months Ended | Nine Months Ended | |||||||||||||||
In millions (Unaudited) | Jun 30, 2022 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2022 | Sep 30, 2021 | ||||||||||||
Net income | $ | 1,681 | $ | 760 | $ | 1,706 | $ | 3,993 | $ | 4,644 | |||||||
+ Provision for income taxes | 488 | 241 | 542 | 1,232 | 1,383 | ||||||||||||
Income before income taxes | $ | 2,169 | $ | 1,001 | $ | 2,248 | $ | 5,225 | $ | 6,027 | |||||||
- Interest income | 36 | 41 | 14 | 105 | 35 | ||||||||||||
+ Interest expense and amortization of debt discount | 165 | 155 | 178 | 487 | 561 | ||||||||||||
- Significant items | (77) | (80) | (474) | (382) | (715) | ||||||||||||
Operating EBIT (non-GAAP) | $ | 2,375 | $ | 1,195 | $ | 2,886 | $ | 5,989 | $ | 7,268 | |||||||
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 4 | (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 5 | (11) | (9) | (0.01) | Cost of sales ($8 million); R&D ($1 million); SG&A ($2 million) | ||||||||||
Indemnification and other transaction related costs 6 | (7) | (7) | (0.01) | Sundry income (expense) - net | ||||||||||
Total significant items | $ | (80) | $ | (63) | $ | (0.09) | ||||||||
Operating results (non-GAAP) | $ | 1,081 | $ | 802 | $ | 1.11 |
Significant Items Impacting Results for the Three Months Ended Sep 30, 2021 | ||||||||||||||
In millions, except per share amounts (Unaudited) | Pretax 1 | Net Income 2 | EPS 3 | Income Statement Classification | ||||||||||
Reported results | $ | 2,248 | $ | 1,683 | $ | 2.23 | ||||||||
Less: Significant items | ||||||||||||||
Digitalization program costs 4 | (40) | (32) | (0.04) | Cost of sales ($36 million); R&D ($1 million); SG&A ($3 million) | ||||||||||
Restructuring, implementation costs and asset related charges - net 5 | (16) | (13) | (0.02) | Cost of sales ($13 million); R&D ($2 million); SG&A ($1 million) | ||||||||||
Loss on early extinguishment of debt | (472) | (387) | (0.52) | Sundry income (expense) - net | ||||||||||
Litigation related charges, awards and adjustments | 54 | 42 | 0.06 | Sundry income (expense) - net | ||||||||||
Total significant items | $ | (474) | $ | (390) | $ | (0.52) | ||||||||
Operating results (non-GAAP) | $ | 2,722 | $ | 2,073 | $ | 2.75 |
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 4 | (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 5 | (31) | (25) | (0.03) | Cost of sales ($23 million); R&D ($5 million); SG&A ($3 million) | ||||||||||
Russia / Ukraine conflict charges 6 | (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 7 | (3) | (3) | — | Sundry income (expense) - net | ||||||||||
Income tax related items | — | 25 | 0.03 | Provision for income taxes on continuing operations | ||||||||||
Total significant items | $ | (382) | $ | (270) | $ | (0.36) | ||||||||
Operating results (non-GAAP) | $ | 5,607 | $ | 4,239 | $ | 5.77 |
Significant Items Impacting Results for the Nine Months Ended Sep 30, 2021 | ||||||||||||||
In millions, except per share amounts (Unaudited) | Pretax 1 | Net Income 2 | EPS 3 | Income Statement Classification | ||||||||||
Reported results | $ | 6,027 | $ | 4,575 | $ | 6.06 | ||||||||
Less: Significant items | ||||||||||||||
Digitalization program costs 4 | (121) | (94) | (0.12) | Cost of sales ($106 million); R&D ($2 million); SG&A ($13 million) | ||||||||||
Restructuring, implementation costs and asset related charges - net 5 | (69) | (55) | (0.07) | Cost of sales ($39 million); R&D ($5 million); SG&A ($3 million); Restructuring and asset related charges - net ($22 million) | ||||||||||
Loss on early extinguishment of debt | (574) | (471) | (0.63) | Sundry income (expense) - net | ||||||||||
Litigation related charges, awards and adjustments | 54 | 42 | 0.06 | Sundry income (expense) - net | ||||||||||
Indemnification and other transaction related costs 7 | (5) | (5) | (0.01) | Sundry income (expense) - net | ||||||||||
Total significant items | $ | (715) | $ | (583) | $ | (0.77) | ||||||||
Operating results (non-GAAP) | $ | 6,742 | $ | 5,158 | $ | 6.83 |
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 | Income Statement Classification | ||||||||||
Reported results | $ | 2,169 | $ | 1,661 | $ | 2.26 | ||||||||
Less: Significant items | ||||||||||||||
Digitalization program costs 4 | (51) | (40) | (0.05) | Cost of sales ($44 million); R&D ($1 million); SG&A ($6 million) | ||||||||||
Restructuring, implementation costs and asset related charges - net 5 | (10) | (8) | (0.01) | Cost of sales ($8 million); R&D ($2 million) | ||||||||||
Loss on early extinguishment of debt | (8) | (6) | (0.01) | Sundry income (expense) - net | ||||||||||
Indemnification and other transaction related costs 6 | (8) | (8) | (0.01) | Sundry income (expense) - net | ||||||||||
Income tax related items | — | 25 | 0.03 | Provision for income taxes on continuing operations | ||||||||||
Total significant items | $ | (77) | $ | (37) | $ | (0.05) | ||||||||
Operating results (non-GAAP) | $ | 2,246 | $ | 1,698 | $ | 2.31 |
Reconciliation of Free Cash Flow | Three Months Ended | Nine Months Ended | ||||||||||||
In millions (Unaudited) | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2022 | Sep 30, 2021 | ||||||||||
Cash provided by operating activities - continuing operations (GAAP) | $ | 1,940 | $ | 2,719 | $ | 5,408 | $ | 4,512 | ||||||
Capital expenditures | (452) | (413) | (1,224) | (1,035) | ||||||||||
Free Cash Flow (non-GAAP) 1 | $ | 1,488 | $ | 2,306 | $ | 4,184 | $ | 3,477 |
Reconciliation of Cash Flow Conversion | Three Months Ended | |||||||||||||
In millions (Unaudited) | Dec 31, 2021 | Mar 31, 2022 | Jun 30, 2022 | Sep 30, 2022 | ||||||||||
Cash provided by operating activities - continuing operations (GAAP) | $ | 2,557 | $ | 1,612 | $ | 1,856 | $ | 1,940 | ||||||
Operating EBITDA (non-GAAP) | $ | 2,920 | $ | 3,171 | $ | 3,059 | $ | 1,863 | ||||||
Cash Flow Conversion (Operating EBITDA to cash flow from operations) (non-GAAP) | 87.6 | % | 50.8 | % | 60.7 | % | 104.1 | % | ||||||
Cash Flow Conversion - trailing twelve months (non-GAAP) | 72.3 | % |
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