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SEGMENTS AND GEOGRAPHIC REGIONS (Notes)
 9 Months Ended
Sep. 30, 2019
Segment Reporting [Abstract]  
Segments and Geographic Regions [Text Block] SEGMENTS AND GEOGRAPHIC REGIONS
Dow combines one of the broadest technology sets in the industry with asset integration, focused innovation and global scale to achieve profitable growth and become the most innovative, customer centric, inclusive and sustainable materials science company. Dow’s portfolio of performance materials, industrial intermediates and plastics businesses delivers a broad range of differentiated science-based products and solutions for our customers in high-growth segments, such as packaging, infrastructure and consumer care.

Effective with the Merger, TDCC's business activities were components of DowDuPont's business operations and were reported as a single operating segment. Following the separation from DowDuPont, the Company changed the manner in which its business activities were managed. The Company's portfolio now includes six global businesses which are organized into the following operating segments: Packaging & Specialty Plastics, Industrial Intermediates & Infrastructure and Performance Materials & Coatings. Corporate contains the reconciliation between the totals for the operating segments and the Company's totals. The Company did not aggregate any operating segments when determining its reportable segments.

Following the separation from DowDuPont, the Company changed its practice of transferring ethylene to its downstream derivative businesses at cost to transferring ethylene at market prices. The Company also changed certain of its Corporate segment allocation practices including costs previously assigned to AgCo and SpecCo, which are now allocated to the operating segments. These changes have been consistently applied to all periods presented.

Dow reported geographic information for the following regions: U.S. & Canada, Asia Pacific, Latin America and EMEAI. As a result of the separation from DowDuPont, the Company changed the geographic alignment for the country of India to be reflected in EMEAI (previously reported in Asia Pacific).

Dow’s measure of profit/loss for segment reporting purposes is pro forma Operating EBIT (for the nine months ended September 30, 2019 and the three and nine months ended September 30, 2018) and Operating EBIT (for the three months ended September 30, 2019) as this is the manner in which the Company's chief operating decision maker ("CODM") assesses performance and allocates resources. The Company defines pro forma Operating EBIT as earnings (i.e., "Income from continuing operations before income taxes") before interest, plus pro forma adjustments, excluding the impact of significant items. The Company defines Operating EBIT as earnings (i.e., "Income from continuing operations before income taxes") before interest, excluding the impact of significant items. Pro forma Operating EBIT and Operating EBIT by segment include all operating items relating to the businesses; items that principally apply to Dow as a whole are assigned to Corporate. These measures have been reflected retrospectively for all periods presented, and reconciliations of these measures are provided at the end of this footnote. The Company also presents pro forma net sales for the nine months ended September 30, 2019 and the three and nine months ended September 30, 2018 in this footnote as it is included in management's measure of segment performance and is regularly reviewed by the CODM. Pro forma net sales includes the impact of various manufacturing, supply and service related agreements entered into with DuPont and Corteva in connection with the separation which provide for different pricing than the historical intercompany and intracompany pricing practices of TDCC and Historical DuPont.
 

Segment Information
Pack. & Spec. Plastics
Ind. Interm. & Infrast.
Perf. Materials & Coatings
Corp.
Total
In millions
Three months ended Sep 30, 2019
 
 
 
 
 
Net sales
$
5,062

$
3,365

$
2,250

$
87

$
10,764

Equity in earnings (losses) of nonconsolidated affiliates
23

(70
)
2

1

(44
)
Dow Inc. Operating EBIT 1
798

193

200

(74
)
1,117

Three months ended Sep 30, 2018
 
 
 
 
 
Net sales
$
6,144

$
3,910

$
2,505

$
75

$
12,634

Pro forma net sales
6,157

3,913

2,552

75

12,697

Equity in earnings (losses) of nonconsolidated affiliates
83

54

3

(5
)
135

Pro forma Operating EBIT
857

466

398

(110
)
1,611

Nine months ended Sep 30, 2019
 
 
 
 
 
Net sales
$
15,405

$
10,187

$
6,888

$
267

$
32,747

Pro forma net sales
15,405

10,196

6,926

267

32,794

Equity in earnings (losses) of nonconsolidated affiliates
135

(196
)
3

(15
)
(73
)
Dow Inc. pro forma Operating EBIT 2
2,256

624

685

(246
)
3,319

Nine months ended Sep 30, 2018
 
 
 
 
 
Net sales
$
18,306

$
11,677

$
7,456

$
221

$
37,660

Pro forma net sales
18,339

11,688

7,596

221

37,844

Equity in earnings (losses) of nonconsolidated affiliates
250

299

4

(24
)
529

Pro forma Operating EBIT
2,754

1,428

1,045

(280
)
4,947

1.
Operating EBIT for TDCC for the three months ended September 30, 2019 is substantially the same as that of Dow Inc. and therefore has not been disclosed separately in the table above. A reconciliation of "Income from continuing operations, net of tax" to Operating EBIT is provided below.
2.
Pro forma Operating EBIT for TDCC for the nine months ended September 30, 2019 is substantially the same as that of Dow Inc. (same for the three and nine months ended September 30, 2018) and therefore has not been disclosed separately in the table above. A reconciliation of "Income from continuing operations, net of tax" to pro forma Operating EBIT is provided below.

Reconciliation of "Income from continuing operations, net of tax" to Operating EBIT
Three Months Ended
In millions
Sep 30, 2019
Income from continuing operations, net of tax
$
347

+ Provision for income taxes on continuing operations
90

Income from continuing operations before income taxes
$
437

- Interest income
19

+ Interest expense and amortization of debt discount
233

- Significant items
(466
)
Operating EBIT
$
1,117


Reconciliation of "Income from continuing operations, net of tax" to Pro Forma Operating EBIT
Three Months Ended
Nine Months Ended
In millions
Sep 30, 2018
Sep 30, 2019
Sep 30, 2018
Income from continuing operations, net of tax
$
714

$
593

$
2,449

+ Provision for income taxes on continuing operations
280

356

755

Income from continuing operations before income taxes
$
994

$
949

$
3,204

- Interest income
22

58

60

+ Interest expense and amortization of debt discount
258

711

781

+ Pro forma adjustments 1
38

65

134

- Significant items
(343
)
(1,652
)
(888
)
Pro forma Operating EBIT
$
1,611

$
3,319

$
4,947

1.
Pro forma adjustments include (1) the margin impact of various manufacturing, supply and service related agreements entered into with DuPont and Corteva in connection with the separation which provide for different pricing than the historical intercompany and intracompany pricing practices of TDCC and Historical DuPont, (2) the removal of the amortization of ECP's inventory step-up recognized in connection with the Merger, and (3) the elimination of the impact of events directly attributable to the Merger, internal reorganization and business realignment, separation, distribution and other related transactions (e.g., one-time transaction costs).
The following tables summarize the pretax impact of significant items by segment that are excluded from Operating EBIT and pro forma Operating EBIT:

Significant Items by Segment
Three Months Ended Sep 30, 2019
Nine Months Ended Sep 30, 2019
Pack. & Spec. Plastics
Ind. Interm. & Infrast.
Perf. Mat. & Coatings
Corp.
Total
Pack. & Spec. Plastics
Ind. Interm. & Infrast.
Perf. Mat. & Coatings
Corp.
Total
In millions
Indemnification and other transaction related costs 1
$
—

$
—

$
—

$
—

$
—

$
—

$
—

$
—

$
(127
)
$
(127
)
Integration and separation costs 2
—

—

—

(164
)
(164
)
—

—

—

(914
)
(914
)
Restructuring and asset related charges - net 3
(31
)
(5
)
(10
)
(101
)
(147
)
(50
)
(5
)
(32
)
(281
)
(368
)
Loss on divestiture 4
—

—

—

—

—

—

—

—

(44
)
(44
)
Loss on early extinguishment of debt 5
—

—

—

—

—

—

—

—

(44
)
(44
)
Environmental charges 6
(5
)
(8
)
(50
)
(336
)
(399
)
(5
)
(8
)
(50
)
(336
)
(399
)
Warranty accrual adjustment of exited business 7
—

—

—

39

39

—

—

—

39

39

Litigation related charges, awards and adjustments 8
170

—

—

35

205

170

—

—

35

205

Total
$
134

$
(13
)
$
(60
)
$
(527
)
$
(466
)
$
115

$
(13
)
$
(82
)
$
(1,672
)
$
(1,652
)
1.
Includes charges primarily associated with agreements entered into with DuPont and Corteva as part of the separation and distribution which, among other matters, provides for cross-indemnities and allocations of obligations and liabilities for periods prior to, at and after the completion of the separation.
2.
Costs related to post-Merger integration and business separation activities. The nine months ended September 30, 2019 excludes one-time transaction costs directly attributable to the Merger.
3.
Includes Board approved restructuring plans and asset-related charges, which includes other asset impairments. See Note 5 for additional information.
4.
Includes post-closing adjustments on previous divestitures.
5.
The Company retired outstanding long-term debt resulting in a loss on early extinguishment. See Note 12 for additional information.
6.
Related to environmental remediation, primarily resulting from the culmination of long-standing negotiations with regulators and/or agencies and review of additional costs to manage ongoing remediation activities resulting from Dow’s separation from DowDuPont and related agreements with Corteva and DuPont. See Note 13 for additional information.
7.
Includes an adjustment to the warranty accrual of an exited business.
8.
Includes a gain associated with a legal settlement with Nova, as well as a gain related to an adjustment of the Dow Silicones breast implant liability and a charge related to the settlement of the Dow Silicones commercial creditor matters. See Note 13 for additional information.

Significant Items by Segment
Three Months Ended Sep 30, 2018
Nine Months Ended Sep 30, 2018
Pack. & Spec. Plastics
Ind. Interm. & Infrast.
Perf. Mat. & Coatings
Corp.
Total
Pack. & Spec. Plastics
Ind. Interm. & Infrast.
Perf. Mat. & Coatings
Corp.
Total
In millions
Impact of Dow Silicones ownership restructure 1
$
—

$
—

$
—

$
—

$
—

$
—

$
—

$
(20
)
$
—

$
(20
)
Integration and separation costs 2
—

—

—

(289
)
(289
)
—

—

—

(730
)
(730
)
Restructuring and asset related charges - net 3
(7
)
—

—

(41
)
(48
)
(16
)
(11
)
(14
)
(111
)
(152
)
Gain on divestiture 4
—

—

—

—

—

—

20

—

—

20

Loss on early extinguishment of debt 5
—

—

—

(6
)
(6
)
—

—

—

(6
)
(6
)
Total
$
(7
)
$
—

$
—

$
(336
)
$
(343
)
$
(16
)
$
9

$
(34
)
$
(847
)
$
(888
)
1.
Includes a loss related to a post-closing adjustment related to the Dow Silicones ownership restructure.
2.
Costs related to post-Merger integration and business separation activities, and costs related to the ownership restructure of Dow Silicones. Excludes one-time transaction costs directly attributable to the Merger.
3.
Includes Board approved restructuring plans and asset related charges, which include other asset impairments. See Note 5 for additional information. Excludes one-time transaction costs directly attributable to the Merger.
4.
Includes a gain related to the Company's sale of its equity interest in MEGlobal.
5.
The Company retired outstanding long-term debt resulting in a loss on early extinguishment. See Note 12 for additional information.