SEGMENTS AND GEOGRAPHIC REGIONS (Notes)

6 Months Ended

Jun. 30, 2022

Segments and Geographic Regions [Text Block]

SEGMENTS AND GEOGRAPHIC REGIONS

Dow’s measure of profit/loss for segment reporting purposes is Operating EBIT as this is the manner in which the Company's chief operating decision maker assesses performance and allocates resources. The Company defines Operating EBIT as earnings (i.e., "Income before income taxes") before interest, excluding the impact of significant items. Operating EBIT by segment includes all operating items relating to the businesses; items that principally apply to Dow as a whole are assigned to Corporate.


Segment Information	Pack. & Spec. Plastics		Ind. Interm. & Infrast.		Perf. Materials & Coatings		Corp.		Total
In millions	Pack. & Spec. Plastics		Ind. Interm. & Infrast.		Perf. Materials & Coatings		Corp.		Total
Three months ended Jun 30, 2022
Net sales	$	8,233	$	4,370	$	3,003	$	58	$	15,664
Equity in earnings (losses) of nonconsolidated affiliates	$	138	$	57	$	2	$	(2)	$	195
Dow Inc. Operating EBIT 1	$	1,436	$	426	$	561	$	(48)	$	2,375
Three months ended Jun 30, 2021
Net sales	$	7,121	$	4,215	$	2,465	$	84	$	13,885
Equity in earnings of nonconsolidated affiliates	$	130	$	144	$	—	$	4	$	278
Dow Inc. Operating EBIT 1	$	2,014	$	648	$	225	$	(59)	$	2,828
Six months ended Jun 30, 2022
Net sales	$	15,860	$	8,894	$	6,052	$	122	$	30,928
Equity in earnings (losses) of nonconsolidated affiliates	$	248	$	119	$	5	$	(3)	$	369
Dow Inc. Operating EBIT 1	$	2,670	$	1,087	$	1,156	$	(119)	$	4,794
Six months ended Jun 30, 2021
Net sales	$	13,203	$	7,822	$	4,588	$	154	$	25,767
Equity in earnings of nonconsolidated affiliates	$	236	$	259	$	2	$	5	$	502
Dow Inc. Operating EBIT 1	$	3,242	$	974	$	287	$	(121)	$	4,382

1.Operating EBIT for TDCC for the three and six months ended June 30, 2022 and 2021 is substantially the same as that of Dow Inc. and therefore has not been disclosed separately in the table above. A reconciliation of "Net income" to Operating EBIT is provided in the following table.


Reconciliation of "Net income" to Operating EBIT	Three Months Ended				Six Months Ended
In millions	Jun 30, 2022		Jun 30, 2021		Jun 30, 2022		Jun 30, 2021
Net income	$	1,681	$	1,932	$	3,233	$	2,938
+ Provision for income taxes	488		524		991		841
Income before income taxes	$	2,169	$	2,456	$	4,224	$	3,779
- Interest income	36		13		64		21
+ Interest expense and amortization of debt discount	165		187		332		383
- Significant items	(77)		(198)		(302)		(241)
Operating EBIT	$	2,375	$	2,828	$	4,794	$	4,382

The following tables summarize the pretax impact of significant items by segment excluded from Operating EBIT:


Significant Items by Segment	Three Months Ended Jun 30, 2022										Six Months Ended Jun 30, 2022
	Pack. & Spec. Plastics		Ind. Interm. & Infrast.		Perf. Mat. & Coatings		Corp.		Total		Pack. & Spec. Plastics		Ind. Interm. & Infrast.		Perf. Mat. & Coatings		Corp.		Total
In millions
Digitalization program costs 1	$	—	$	—	$	—	$	(51)	$	(51)	$	—	$	—	$	—	$	(92)	$	(92)
Restructuring, implementation costs and asset related charges - net 2	—		—		—		(10)		(10)		—		—		—		(20)		(20)
Russia / Ukraine conflict charges 3	—		—		—		—		—		(31)		(109)		(16)		(30)		(186)
Loss on early extinguishment of debt 4	—		—		—		(8)		(8)		—		—		—		(8)		(8)
Indemnification and other transaction related costs 5	—		—		—		(8)		(8)		—		—		—		4		4
Total	$	—	$	—	$	—	$	(77)	$	(77)	$	(31)	$	(109)	$	(16)	$	(146)	$	(302)

1.Includes costs associated with implementing the Company's Digital Acceleration program.

2.Includes costs associated with implementing the Company's 2020 Restructuring Program.

3.Asset related charges due to the Russia and Ukraine conflict. See Note 4 for additional information.

4.The Company redeemed outstanding long-term debt resulting in a loss on early extinguishment. See Note 11 for additional information.

5.Primarily related to charges associated with agreements entered into with DuPont de Nemours, Inc. and Corteva, Inc. 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 2 for additional information.


Significant Items by Segment	Three Months Ended Jun 30, 2021										Six Months Ended Jun 30, 2021
Significant Items by Segment	Pack. & Spec. Plastics		Ind. Interm. & Infrast.		Perf. Mat. & Coatings		Corp.		Total		Pack. & Spec. Plastics		Ind. Interm. & Infrast.		Perf. Mat. & Coatings		Corp.		Total
In millions	Pack. & Spec. Plastics		Ind. Interm. & Infrast.		Perf. Mat. & Coatings		Corp.		Total		Pack. & Spec. Plastics		Ind. Interm. & Infrast.		Perf. Mat. & Coatings		Corp.		Total
Digitalization program costs 1	$	—	$	—	$	—	$	(48)	$	(48)	$	—	$	—	$	—	$	(81)	$	(81)
Restructuring, implementation costs and asset related charges - net 2	(8)		(1)		(10)		(24)		(43)		(8)		(1)		(10)		(34)		(53)
Loss on early extinguishment of debt 3	—		—		—		(102)		(102)		—		—		—		(102)		(102)
Indemnification and other transactions related costs 4	—		—		—		(5)		(5)		—		—		—		(5)		(5)
Total	$	(8)	$	(1)	$	(10)	$	(179)	$	(198)	$	(8)	$	(1)	$	(10)	$	(222)	$	(241)

1.Includes costs associated with implementing the Company's Digital Acceleration program.

2.Includes costs associated with implementing the Company's 2020 Restructuring Program.

3.The Company redeemed outstanding long-term debt resulting in a loss on early extinguishment. See Note 11 for additional information.

4.Primarily related to charges associated with agreements entered into with DuPont de Nemours, Inc. and Corteva, Inc. 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 2 for additional information.