SEGMENTS AND GEOGRAPHIC REGIONS (Notes)

12 Months Ended

Dec. 31, 2021

Segment Reporting [Abstract]

Segments and Geographic Regions [Text Block]

SEGMENTS AND GEOGRAPHIC REGIONS

Dow combines global breadth; asset integration and scale; focused innovation and materials science expertise; leading business positions; and environmental, social and governance (ESG) leadership to achieve profitable growth and deliver a sustainable future. The Company’s ambition is to become the most innovative, customer centric, inclusive and sustainable materials science company in the world. Dow’s portfolio of plastics, industrial intermediates, coatings and silicones businesses delivers a broad range of differentiated, science-based products and solutions for its customers in high-growth market segments, such as packaging, infrastructure, mobility and consumer applications. Dow operates 104 manufacturing sites in 31 countries and employs approximately 35,700 people.

The Company conducts its worldwide operations through 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. The Company reports geographic information for the following regions: U.S. & Canada, Asia Pacific, Latin America and EMEAI. The Company transfers ethylene to its downstream derivative businesses at market prices. The Company also allocated costs previously assigned to AgCo and SpecCo ("stranded costs") to the operating segments.

Dow’s measure of profit/loss for segment reporting purposes is Operating EBIT (for the years ended December 31, 2021 and 2020) and pro forma Operating EBIT (for the year ended December 31, 2019) as this is the manner in which the Company's chief operating decision maker ("CODM") assesses performance and allocates resources. The Company defines Operating EBIT as earnings (i.e., "Income (loss) from continuing operations before income taxes") before interest, excluding the impact of significant items. The Company defines pro forma Operating EBIT as earnings (i.e., "Income (loss) from continuing operations before income taxes") before interest, plus pro forma adjustments, excluding the impact of significant items. Operating EBIT and pro forma 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. The Company also presents pro forma net sales for the year ended December 31, 2019 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.

Corporate Profile

Dow conducts its worldwide operations through global businesses which are reflected in the following reportable segments:

Packaging & Specialty Plastics

The Packaging & Specialty Plastics operating segment consists of two highly integrated global businesses: Hydrocarbons & Energy and Packaging and Specialty Plastics. The segment employs the industry’s broadest polyolefin product portfolio, supported by the Company’s proprietary catalyst and manufacturing process technologies. These differentiators, plus collaboration at the customer’s design table, enable the segment to deliver more reliable, durable, higher-performing solutions designed for recyclability and enhanced plastics circularity and sustainability. The segment serves customers, brand owners and ultimately consumers in key markets including food and specialty packaging; industrial and consumer packaging; health and hygiene; caps, closures and pipe applications; consumer durables; mobility and transportation; and infrastructure. This segment includes the results of The Kuwait Styrene Company K.S.C.C. and The SCG-Dow Group, as well as a portion of the results of EQUATE, The Kuwait Olefins Company K.S.C.C. ("TKOC"), Map Ta Phut and Sadara, all joint ventures of the Company.

Industrial Intermediates & Infrastructure

The Industrial Intermediates & Infrastructure operating segment consists of two customer-centric global businesses - Industrial Solutions and Polyurethanes & Construction Chemicals - that develop important intermediate chemicals that are essential to manufacturing processes, as well as downstream, customized materials and formulations that use advanced development technologies. These businesses primarily produce and market ethylene oxide and propylene oxide derivatives that are aligned to market segments as diverse as appliances, coatings, electronics, surfactants for cleaning and sanitization, infrastructure and oil and gas. The businesses' global scale and reach, world-class technology, research and development capabilities and materials science expertise enable the Company to be a premier solutions provider offering customers value-add sustainable solutions to enhance comfort, energy efficiency, product effectiveness and durability across a wide range of home comfort and appliance, building and construction, mobility and transportation, adhesive and lubricant applications, among others. This segment includes a portion of the Company's share of the results of EQUATE, TKOC, Map Ta Phut and Sadara.

Performance Materials & Coatings

The Performance Materials & Coatings operating segment includes industry-leading franchises that deliver a wide array of solutions into consumer, infrastructure and mobility end-markets. The segment consists of two global businesses: Coatings & Performance Monomers and Consumer Solutions. These businesses primarily utilize the Company's acrylics-, cellulosics- and silicone-based technology platforms to serve the needs of the architectural and industrial coatings; home care and personal care; consumer and electronics; mobility and transportation; industrial and chemical processing; and building and infrastructure end-markets. Both businesses employ materials science capabilities, global reach and unique products and technology to combine chemistry platforms to deliver differentiated, market-driven and sustainable innovations to customers.

Corporate

Corporate includes certain enterprise and governance activities (including insurance operations, environmental operations, etc.); non-business aligned joint ventures; non-business aligned litigation expenses; and discontinued or non-aligned businesses.

Sales are attributed to geographic region based on customer location; long-lived assets are attributed to geographic region based on asset location.

Geographic Region Information	United  States		EMEAI		Rest of  World		Total
In millions
2021
Sales to external customers	$	18,083	$	19,746	$	17,139	$	54,968
Long-lived assets	$	14,425	$	2,703	$	3,427	$	20,555
2020
Sales to external customers	$	12,547	$	12,969	$	13,026	$	38,542
Long-lived assets	$	13,833	$	2,813	$	3,593	$	20,239
2019
Sales to external customers	$	14,437	$	14,612	$	13,902	$	42,951
Long-lived assets	$	14,571	$	2,649	$	3,776	$	20,996

Segment Information	Pack. & Spec. Plastics		Ind. Interm. & Infrast.		Perf. Materials & Coatings		Corp.		Total
In millions
2021
Net sales	$	28,128	$	16,851	$	9,672	$	317	$	54,968
Restructuring and asset related charges (credits) - net 1	8		1		10		(13)		6
Equity in earnings of nonconsolidated affiliates	490		471		7		7		975
Operating EBIT 2	6,638		2,282		866		(253)		9,533
Depreciation and amortization	1,358		612		842		30		2,842
Total assets	30,556		13,750		13,810		4,874		62,990
Investments in nonconsolidated affiliates	1,230		670		111		34		2,045
Capital expenditures	808		359		334		—		1,501
2020
Net sales	$	18,301	$	12,021	$	7,951	$	269	$	38,542
Restructuring and asset related charges - net 1	30		22		192		464		708
Equity in earnings (losses) of nonconsolidated affiliates	173		(166)		6		(31)		(18)
Operating EBIT 2	2,325		355		314		(279)		2,715
Depreciation and amortization	1,372		605		870		27		2,874
Total assets	30,069		12,220		13,915		5,266		61,470
Investments in nonconsolidated affiliates	661		531		108		27		1,327
Capital expenditures	678		268		306		—		1,252
2019
Net sales	$	20,245	$	13,440	$	8,923	$	343	$	42,951
Pro forma net sales	20,245		13,449		8,961		343		42,998
Restructuring, goodwill impairment and asset related charges - net 1	439		1,175		1,076		529		3,219
Equity in earnings (losses) of nonconsolidated affiliates	162		(241)		5		(20)		(94)
Pro forma Operating EBIT 3	2,904		845		918		(315)		4,352
Depreciation and amortization	1,435		594		877		32		2,938
Total assets	29,522		11,753		14,059		5,190		60,524
Investments in nonconsolidated affiliates	675		568		101		60		1,404
Capital expenditures	1,039		452		470		—		1,961

1.See Note 6 for information regarding the Company's restructuring programs, goodwill impairment and other asset related charges.

2.Operating EBIT for TDCC in 2021 and 2020 is substantially the same as that of Dow Inc. and therefore is not disclosed separately in the table above. A reconciliation of "Income from continuing operations, net of tax" to Operating EBIT is provided on the following page.

3.Pro forma Operating EBIT for TDCC in 2019 is substantially the same as that of Dow Inc. and therefore is not disclosed separately in the table above. A reconciliation of "Income (loss) from continuing operations, net of tax" to pro forma Operating EBIT is provided on the following page.

Reconciliation of "Income from continuing operations, net of tax" to Operating EBIT	2021		2020
In millions
Income from continuing operations, net of tax	$	6,405	$	1,294
+ Provision for income taxes on continuing operations	1,740		777
Income from continuing operations before income taxes	$	8,145	$	2,071
- Interest income	55		38
+ Interest expense and amortization of debt discount	731		827
- Significant items	(712)		145
Operating EBIT	$	9,533	$	2,715

Reconciliation of "Income (loss) from continuing operations, net of tax" to Pro Forma Operating EBIT	2019
In millions
Income (loss) from continuing operations, net of tax	$	(1,717)
+ Provision for income taxes on continuing operations	470
Income (loss) from continuing operations before income taxes	$	(1,247)
- Interest income	81
+ Interest expense and amortization of debt discount	933
+ Pro forma adjustments 1	65
- Significant items	(4,682)
Pro forma Operating EBIT	$	4,352

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 for 2021	Pack. & Spec. Plastics		Ind. Interm. & Infrast.		Perf. Materials & Coatings		Corp.		Total
In millions
Digitalization program costs 1	$	—	$	—	$	—	$	(169)	$	(169)
Restructuring, implementation costs and asset related charges - net 2	(8)		(1)		(10)		(50)		(69)
Loss on early extinguishment of debt 3	—		—		—		(574)		(574)
Net gain on divestitures and asset sale 4	16		—		—		—		16
Litigation related charges, awards and adjustments 5	—		54		—		—		54
Indemnification and other transaction related costs 6	—		—		—		30		30
Total	$	8	$	53	$	(10)	$	(763)	$	(712)

1.Includes costs associated with implementing the Company's digital acceleration program.

2.Includes Board approved restructuring plans, including costs associated with implementing the Company's 2020 Restructuring Program, and asset-related charges, which include other asset impairments. See Note 6 for additional information.

3.The Company redeemed outstanding long-term debt resulting in a loss on early extinguishment. See Note 15 for additional information.

4.Includes post-closing adjustments on a previous divestiture.

5.Related to an arbitration award received from Luxi Chemical Group Co., Ltd. See Note 16 for additional information.

6.Primarily related to charges 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. See Note 3 for additional information.

Significant Items by Segment for 2020	Pack. & Spec. Plastics		Ind. Interm. & Infrast.		Perf. Materials & Coatings		Corp.		Total
In millions
Integration and separation costs 1	$	—	$	—	$	—	$	(239)	$	(239)
Restructuring, implementation costs and asset related charges - net 2	(30)		(22)		(192)		(474)		(718)
Warranty accrual adjustment of exited business 3	—		—		—		11		11
Net gain on divestitures and asset sale 4	52		61		—		604		717
Litigation related charges, awards and adjustments 5	544		—		—		—		544
Loss on early extinguishment of debt 6	—		—		—		(149)		(149)
Indemnification and other transaction related costs 7	—		—		—		(21)		(21)
Total	$	566	$	39	$	(192)	$	(268)	$	145

1.Costs related to business separation activities.

2.Includes Board approved restructuring plans, including costs associated with implementing the Company's 2020 Restructuring Program, and asset-related charges, which include other asset impairments. See Note 6 for additional information.

3.Includes an adjustment to the warranty accrual of an exited business.

4.Primarily related to a gain on the sale of rail infrastructure in the U.S. and Canada and a gain on the sale of marine and terminal operations and assets in the U.S. See Notes 5 and 7 for additional information.

5.Includes recognition of gains associated with a legal matter with Nova. See Note 16 for additional information.

6.The Company retired outstanding long-term debt resulting in a loss on early extinguishment. See Note 15 for additional information.

7.Primarily related to charges 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. See Note 3 for additional information.

Significant Items by Segment for 2019	Pack. & Spec. Plastics		Ind. Interm. & Infrast.		Perf. Materials & Coatings		Corp.		Total
In millions
Integration and separation costs 1	$	—	$	—	$	—	$	(1,013)	$	(1,013)
Restructuring, goodwill impairment and asset related charges - net 2	(439)		(1,175)		(1,076)		(529)		(3,219)
Warranty accrual adjustment of exited business 3	—		—		—		39		39
Environmental charges 4	(5)		(8)		(50)		(336)		(399)
Loss on divestitures 5	—		(5)		—		(44)		(49)
Loss on early extinguishment of debt 6	—		—		—		(102)		(102)
Litigation related charges, awards and adjustments 7	170		—		—		35		205
Indemnification and other transaction related costs 8	—		—		—		(144)		(144)
Total	$	(274)	$	(1,188)	$	(1,126)	$	(2,094)	$	(4,682)

1.Costs related to post-Merger integration and business separation activities. Excludes one-time transaction costs directly attributable to the Merger.

2.Includes Board approved restructuring plans and asset related charges (see Note 6 for additional information); a charge related to Sadara (see Note 12 for additional information) and an impairment charge related to goodwill associated with the Coatings & Performance Monomers reporting unit (see Note 13 for additional information).

3.Includes an adjustment to the warranty accrual of an exited business.

4.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 16 for additional information.

5.Includes post-closing adjustments on previous divestitures.

6.The Company retired outstanding long-term debt resulting in a loss on early extinguishment. See Note 15 for additional information.

7.Includes a gain associated with a legal matter with Nova, as well as a gain related to an adjustment of the Implant Liability and a charge related to the settlement of the Commercial Creditor matters. See Note 16 for additional information.

8.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.