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.
|
001-38646
|
Dow Inc.
|
Delaware
|
30-1128146
|
|
2211 H.H. Dow Way, Midland, MI 48674
|
|
|
|
(989) 636-1000
|
|
|
001-03433
|
The Dow Chemical Company
|
Delaware
|
38-1285128
|
|
2211 H.H. Dow Way, Midland, MI 48674
|
|
|
|
(989) 636-1000
|
|
|
Registrant
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Dow Inc.
|
Common Stock, par value $0.01 per share
|
DOW
|
New York Stock Exchange
|
The Dow Chemical Company
|
4.625% Notes due October 1, 2044
|
DOW/44
|
New York Stock Exchange
|
Dow Inc.
|
☑
|
Yes
|
☐
|
No
|
The Dow Chemical Company
|
☑
|
Yes
|
☐
|
No
|
Dow Inc.
|
☐
|
Yes
|
☑
|
No
|
The Dow Chemical Company
|
☐
|
Yes
|
☑
|
No
|
Dow Inc.
|
☑
|
Yes
|
☐
|
No
|
The Dow Chemical Company
|
☑
|
Yes
|
☐
|
No
|
Dow Inc.
|
☑
|
Yes
|
☐
|
No
|
The Dow Chemical Company
|
☑
|
Yes
|
☐
|
No
|
Dow Inc.
|
Large accelerated filer þ
|
Accelerated
filer ¨
|
Non-accelerated filer ¨
|
Smaller reporting company ¨
|
Emerging growth company ¨
|
The Dow Chemical Company
|
Large accelerated filer ¨
|
Accelerated
filer ¨
|
Non-accelerated filer þ
|
Smaller reporting company ¨
|
Emerging growth company ¨
|
Dow Inc.
|
☐
|
|
The Dow Chemical Company
|
☐
|
|
Dow Inc.
|
☐
|
Yes
|
☑
|
No
|
The Dow Chemical Company
|
☐
|
Yes
|
☑
|
No
|
PAGE
|
||
|
|
|
|
||
|
Dow Inc. and Subsidiaries:
|
|
|
||
|
||
|
||
|
||
|
||
|
The Dow Chemical Company and Subsidiaries:
|
|
|
||
|
||
|
||
|
||
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
Dow Inc. and Subsidiaries
The Dow Chemical Company and Subsidiaries
|
|
Business
|
Applications/Market Segments
|
Major Products
|
Key Raw Materials
|
Key Competitors
|
Hydrocarbons & Energy
|
Purchaser of feedstocks; production of cost competitive hydrocarbon monomers utilized by Dow's derivative businesses; and energy, principally for use in Dow’s global operations
|
Ethylene, propylene, benzene, butadiene, octene, aromatics co-products, power, steam, other utilities
|
Butane, condensate, ethane, naphtha, natural gas, propane
|
Chevron Phillips Chemical, ExxonMobil, INEOS, LyondellBasell, SABIC, Shell, Sinopec
|
Packaging and Specialty Plastics
|
Adhesives; automotive; caps, closures and pipe applications; construction; cosmetics; electrical transmission and distribution; food and supply chain packaging; footwear; health and hygiene; housewares; industrial specialty applications using polyolefin elastomers, ethylene copolymers, and ethylene propylene diene monomer ("EPDM") elastomers; irrigation pipe; photovoltaic encapsulants; sporting goods; telecommunications infrastructure; toys and infant products
|
Acrylics, bio-based plasticizers, copolymer, elastomers, ethylene copolymer resins, EPDM, ethylene vinyl acetate ("EVA"), methacrylic acid copolymer resins, polyethylene ("PE"), high-density polyethylene ("HDPE"), low-density polyethylene ("LDPE"), linear low-density polyethylene ("LLDPE"), polyolefin plastomers, resin additives and modifiers, semiconductive and jacketing compound solutions and wire and cable insulation
|
Aliphatic solvent, butene, ethylene, hexene, octene, propylene
|
Borealis, ExxonMobil, INEOS, Lanxess, LyondellBasell, Nova, SABIC
|
•
|
EQUATE Petrochemical Company K.S.C.C. (“EQUATE”) - a Kuwait-based company that manufactures ethylene, polyethylene and ethylene glycol, and manufactures and markets monoethylene glycol, diethylene glycol and polyethylene terephthalate resins; owned 42.5 percent by the Company.
|
•
|
The Kuwait Olefins Company K.S.C.C. (“TKOC”) - a Kuwait-based company that manufactures ethylene and ethylene glycol; owned 42.5 percent by the Company.
|
•
|
Map Ta Phut Olefins Company Limited (“Map Ta Phut”) - a Thailand-based company that manufactures propylene and ethylene; the Company has an effective ownership of 32.77 percent (of which 20.27 percent is owned directly by the Company and aligned with the Industrial Intermediates & Infrastructure segment and 12.5 percent is owned indirectly through the Company’s equity interest in Siam Polyethylene Company Limited, an entity that is part of The SCG-Dow Group and aligned with the Packaging & Specialty Plastics segment).
|
•
|
Sadara Chemical Company ("Sadara") - a Saudi Arabian company that manufactures chlorine, ethylene, propylene and aromatics for internal consumption and manufactures and sells polyethylene, ethylene oxide and propylene oxide derivative products, and isocyanates; owned 35 percent by the Company. The Company is responsible for marketing a majority of Sadara products outside of the Middle East zone through the Company’s established sales channels. As part of this arrangement, the Company purchases and sells Sadara products for a marketing fee.
|
•
|
The Kuwait Styrene Company K.S.C.C. (“TKSC”) - a Kuwait-based company that manufactures styrene monomer; owned 42.5 percent by the Company.
|
•
|
The SCG-Dow Group - a group of Thailand-based companies (consisting of Siam Polyethylene Company Limited; Siam Polystyrene Company Limited; Siam Styrene Monomer Company Limited; and Siam Synthetic Latex Company Limited) that manufacture polyethylene, polystyrene, styrene, latex and specialty elastomers; owned 50 percent by the Company.
|
•
|
Expansion of the capacity of the Company’s new ethylene production facility in Freeport, TX, bringing the facility’s total ethylene capacity to 2,000 kilotonnes per annum ("KTA") and making it the largest ethylene cracker in the world.
|
•
|
Incremental debottleneck projects across its global asset network that will deliver approximately 350 KTA of additional polyethylene, the majority of which will be in U.S. & Canada.
|
•
|
Construction of a world-scale polyethylene unit on the U.S. Gulf Coast based on Dow’s proprietary process technologies, to meet consumer-driven demand in specialty packaging, health and hygiene, and industrial and consumer packaging applications.
|
•
|
A new catalyst production facility for key catalysts licensed by Univation Technologies, LLC, a wholly owned subsidiary of the Company.
|
•
|
On January 29, 2020, the Company announced plans to add another furnace to its ethylene production facility in Alberta, Canada, incrementally expanding capacity by approximately 130,000 metric tons. Dow will co-invest in the expansion with a regional customer, evenly sharing project costs and ethylene output, with the additional ethylene to be consumed by existing polyethylene manufacturing assets in the region. The expansion is expected to come online in the first half of 2021.
|
•
|
An agreement with the Fuenix Ecogy Group, based in Weert, The Netherlands, for the supply of pyrolysis oil feedstock, which is made from recycled plastic waste. The feedstock will be used to produce virgin polymers at Dow’s production facilities in Terneuzen, The Netherlands. This is an important step forward to increase feedstock recycling - the process of breaking down mixed waste plastics into their original form to manufacture new virgin polymers. The polymers produced from this pyrolysis oil will be identical to products produced from traditional feedstocks, and as such, they can be used in the same applications, including food packaging.
|
•
|
An agreement with UPM Biofuels, a producer of biofuels, for the supply and integration of wood-based UPM Bio Verno renewable naphtha - a key raw material used to develop plastics - into Dow's slate of raw materials, creating an alternative source for plastics production. The feedstock will be used to produce bio-based polyethylene at Dow's production facilities in Terneuzen, The Netherlands, for use in packaging applications such as food packaging, to reduce food waste.
|
•
|
The retrofit of one of its Louisiana steam crackers with Dow’s proprietary fluidized catalytic dehydrogenation ("FCDh") technology to produce on-purpose propylene. The FCDh technology retrofit further improves Dow’s ability to continue to source the most advantaged feedstocks, while also producing reliable and cost-efficient on-purpose propylene to supply its integrated derivative units in Louisiana. The technology reduces capital outlay by up to 25 percent and lowers energy usage and GHG by up to 20 percent, thereby improving overall sustainability when compared with conventional propane dehydrogenation technologies. The project is expected to begin producing on-purpose propylene by the end of 2021.
|
Remaining Life of Patents Owned at Dec 31, 2019
|
United States
|
Foreign
|
||
Within 5 years
|
900
|
|
3,800
|
|
6 to 10 years
|
1,000
|
|
6,400
|
|
11 to 15 years
|
1,600
|
|
8,300
|
|
16 to 20 years
|
200
|
|
600
|
|
Total
|
3,700
|
|
19,100
|
|
Principal Nonconsolidated Affiliate
|
Country
|
Ownership Interest
|
Business Description
|
|
EQUATE Petrochemical Company K.S.C.C.
|
Kuwait
|
42.50
|
%
|
Manufactures ethylene, polyethylene and ethylene glycol, and manufactures and markets monoethylene glycol, diethylene glycol and polyethylene terephthalate resins
|
The Kuwait Olefins Company K.S.C.C.
|
Kuwait
|
42.50
|
%
|
Manufactures ethylene and ethylene glycol
|
The Kuwait Styrene Company K.S.C.C.
|
Kuwait
|
42.50
|
%
|
Manufactures styrene monomer
|
Map Ta Phut Olefins Company Limited 1
|
Thailand
|
32.77
|
%
|
Manufactures propylene and ethylene
|
Sadara Chemical Company 2
|
Saudi Arabia
|
35.00
|
%
|
Manufactures chlorine, ethylene, propylene and aromatics for internal consumption and manufactures and sells polyethylene, ethylene oxide and propylene oxide derivative products, and isocyanates
|
The SCG-Dow Group:
|
|
|
|
|
Siam Polyethylene Company Limited
|
Thailand
|
50.00
|
%
|
Manufactures polyethylene
|
Siam Polystyrene Company Limited
|
Thailand
|
50.00
|
%
|
Manufactures polystyrene
|
Siam Styrene Monomer Company Limited
|
Thailand
|
50.00
|
%
|
Manufactures styrene
|
Siam Synthetic Latex Company Limited
|
Thailand
|
50.00
|
%
|
Manufactures latex and specialty elastomers
|
1.
|
The Company's effective ownership of Map Ta Phut is 32.77 percent, of which the Company directly owns 20.27 percent and indirectly owns 12.5 percent through its equity interest in Siam Polyethylene Company Limited.
|
2.
|
The Company is responsible for marketing the majority of Sadara products outside of the Middle East zone through the Company's established sales channels. Under this arrangement, the Company purchases and sells Sadara products for a marketing fee.
|
Name - Age
|
Present Position with Registrant
|
Year Elected to be an Officer
|
Other Business Experience since January 1, 2015
|
Karen S. Carter, 49
|
Chief Human Resources Officer
|
2019
|
Dow Inc.: Chief Human Resources Officer since April 1, 2019.
TDCC: Chief Human Resources Officer since October 2018; Chief Inclusion Officer since July 2017; North America Commercial Vice President, Dow Packaging and Specialty Plastics from February 2016 to July 2017; Global Business Director, Low Density & Slurry Polyethylene, Packaging & Specialty Plastics from April 2015 to January 2016; and Global Marketing Director Value Chain, New Business Development & Sustainability, Performance Plastics from September 2011 to April 2015.
|
Ronald C. Edmonds, 62
|
Controller and Vice President of Controllers and Tax
|
2019
|
Dow Inc.: Controller and Vice President of Controllers and Tax since April 1, 2019.
TDCC: Controller and Vice President since November 2009; Vice President of Tax since January 2016.
|
Jim Fitterling, 58
|
Chief Executive Officer
|
2018
|
Dow Inc.: Chief Executive Officer since August 2018.
TDCC: Chief Executive Officer since July 2018; President and Chief Operating Officer from February 2016 to July 2018; Vice Chairman and Chief Operating Officer from October 2015 to February 2016; Vice Chairman, Business Operations from October 2014 to October 2015.
|
Peter Holicki, 59
|
Senior Vice President, Operations - Manufacturing & Engineering and Environment, Health and Safety Operations
|
2019
|
Dow Inc.: Senior Vice President, Operations - Manufacturing & Engineering and Environment, Health and Safety Operations since April 1, 2019.
TDCC: Senior Vice President, Operations - Manufacturing & Engineering and Environment, Health and Safety Operations since October 2015; responsible for oversight of the Emergency Services and Security Expertise Center since September 2014; Corporate Vice President of Manufacturing & Engineering and Environment, Health & Safety Operations January 2014 to October 2015.
|
A. N. Sreeram, 52
|
Senior Vice President of Research & Development and Chief Technology Officer
|
2019
|
Dow Inc.: Senior Vice President of Research & Development and Chief Technology Officer since April 1, 2019.
TDCC: Chief Technology Officer since October 2015; Senior Vice President of Research & Development since August 2013; Corporate Vice President, Research & Development from August 2013 to October 2015.
|
Howard Ungerleider, 51
|
President and Chief Financial Officer
|
2018
|
Dow Inc.: President and Chief Financial Officer since August 2018.
TDCC: Chief Financial Officer since October 2014; President since July 2018; Vice Chairman from October 2015 to July 2018; Executive Vice President from October 2014 to October 2015.
|
Amy E. Wilson, 49
|
General Counsel and Corporate Secretary
|
2018
|
Dow Inc.: General Counsel and Corporate Secretary since April 1, 2019; Secretary from August 2018 to April 1, 2019.
TDCC: General Counsel since October 2018; Corporate Secretary since February 2015; Associate General Counsel from April 2017 to September 2018; Assistant General Counsel from February 2015 to April 2017; Assistant Corporate Secretary from 2008 to February 2015; Director of the Office of the Corporate Secretary from August 2013 to October 2018.
|
Major Manufacturing Sites by Segment
|
Packaging & Specialty Plastics
|
Industrial Intermediates & Infrastructure
|
Performance Materials & Coatings
|
Location
|
|||
Bahia Blanca, Argentina
|
X
|
|
|
Candeias, Brazil
|
X
|
X
|
|
Canada:
|
|
|
|
Fort Saskatchewan, Alberta
|
X
|
|
|
Prentiss, Alberta
|
X
|
|
|
Zhangjiagang, China
|
X
|
X
|
X
|
Germany:
|
|
|
|
Boehlen
|
X
|
X
|
X
|
Leuna
|
X
|
|
|
Schkopau
|
X
|
X
|
|
Stade
|
|
X
|
|
Terneuzen, The Netherlands
|
X
|
X
|
|
Tarragona, Spain
|
X
|
X
|
|
Map Ta Phut, Thailand
|
X
|
X
|
X
|
Barry, United Kingdom
|
|
|
X
|
United States:
|
|
|
|
Carrollton, Kentucky
|
|
|
X
|
Hahnville, Louisiana
|
X
|
X
|
X
|
Plaquemine, Louisiana
|
X
|
X
|
|
Midland, Michigan
|
|
|
X
|
Deer Park, Texas
|
|
X
|
X
|
Freeport, Texas
|
X
|
X
|
X
|
Orange, Texas
|
X
|
|
|
Seadrift, Texas
|
X
|
X
|
|
Manufacturing Sites by Region
|
|
Asia Pacific
|
19 manufacturing sites in 10 countries
|
EMEAI
|
37 manufacturing sites in 15 countries
|
Latin America
|
18 manufacturing sites in 4 countries
|
U.S. & Canada
|
35 manufacturing sites in 2 countries
|
Issuer Purchases of Equity Securities
|
Total number of shares purchased as part of the Company's publicly announced share repurchase program
|
Approximate dollar value of shares that may yet be purchased under the Company's publicly announced share repurchase program 1
(In millions)
|
|||||||||
Period
|
Total number of shares purchased
|
Average price paid per share
|
|||||||||
October 2019
|
—
|
|
$
|
—
|
|
—
|
|
$
|
2,594
|
|
|
November 2019
|
735,600
|
|
$
|
53.84
|
|
735,600
|
|
$
|
2,555
|
|
|
December 2019
|
1,032,502
|
|
$
|
53.17
|
|
1,032,502
|
|
$
|
2,500
|
|
|
Fourth quarter 2019
|
1,768,102
|
|
$
|
53.45
|
|
1,768,102
|
|
$
|
2,500
|
|
1.
|
On April 1, 2019, Dow Inc.'s Board of Directors ratified the share repurchase program originally approved on March 15, 2019, authorizing up to $3.0 billion to be spent on the repurchase of the Company's common stock, with no expiration date.
|
Selected Financial Data - Dow Inc.
|
|
|
|
|
|
||||||||||
In millions, except as noted (Unaudited)
|
2019
|
2018
|
2017
|
2016
|
2015
|
||||||||||
Summary of Operations
|
|
|
|
|
|
||||||||||
Net sales 1
|
$
|
42,951
|
|
$
|
49,604
|
|
$
|
43,730
|
|
$
|
36,264
|
|
$
|
37,101
|
|
Income (loss) from continuing operations, net of tax 2
|
$
|
(1,717
|
)
|
$
|
2,940
|
|
$
|
(1,287
|
)
|
$
|
1,478
|
|
$
|
6,462
|
|
Per share of common stock (in dollars):
|
|
|
|
|
|
||||||||||
Earnings (loss) per common share from continuing operations - basic 2
|
$
|
(2.42
|
)
|
$
|
3.80
|
|
$
|
(1.88
|
)
|
$
|
1.57
|
|
$
|
8.64
|
|
Earnings (loss) per common share from continuing operations - diluted 2
|
$
|
(2.42
|
)
|
$
|
3.80
|
|
$
|
(1.88
|
)
|
$
|
1.55
|
|
$
|
8.31
|
|
Cash dividends declared per share of common stock 3
|
$
|
2.10
|
|
$
|
—
|
|
$
|
1.38
|
|
$
|
1.84
|
|
$
|
1.72
|
|
Year-end Financial Position
|
|
|
|
|
|
||||||||||
Total assets
|
$
|
60,524
|
|
$
|
83,699
|
|
$
|
85,852
|
|
$
|
79,511
|
|
$
|
67,938
|
|
Long-term debt
|
$
|
15,975
|
|
$
|
19,253
|
|
$
|
19,757
|
|
$
|
20,444
|
|
$
|
16,202
|
|
|
|
|
|
|
|
||||||||||
Financial Ratios
|
|
|
|
|
|
||||||||||
Research and development expenses as percent of net sales
|
1.8
|
%
|
1.6
|
%
|
1.8
|
%
|
2.1
|
%
|
2.0
|
%
|
|||||
Income (loss) from continuing operations before income taxes as percent of net sales 2
|
(2.9
|
)%
|
7.6
|
%
|
0.5
|
%
|
3.5
|
%
|
21.8
|
%
|
|||||
Return on stockholders' equity 2
|
(10.0
|
)%
|
14.3
|
%
|
1.5
|
%
|
15.3
|
%
|
28.2
|
%
|
|||||
Gross debt as a percent of total capitalization
|
54.7
|
%
|
37.2
|
%
|
39.1
|
%
|
43.9
|
%
|
39.5
|
%
|
|||||
Net debt as a percent of total capitalization
|
50.9
|
%
|
33.7
|
%
|
31.1
|
%
|
35.1
|
%
|
24.6
|
%
|
Selected Financial Data - TDCC
|
|
|
|
|
|
||||||||||
In millions, except as noted (Unaudited)
|
2019
|
2018
|
2017
|
2016
|
2015
|
||||||||||
Summary of Operations
|
|
|
|
|
|
||||||||||
Net sales 1
|
$
|
42,951
|
|
$
|
49,604
|
|
$
|
43,730
|
|
$
|
36,264
|
|
$
|
37,101
|
|
Income (loss) from continuing operations, net of tax 2
|
$
|
(1,595
|
)
|
$
|
2,940
|
|
$
|
(1,287
|
)
|
$
|
1,478
|
|
$
|
6,462
|
|
Year-end Financial Position
|
|
|
|
|
|
||||||||||
Total assets
|
$
|
60,390
|
|
$
|
83,699
|
|
$
|
85,852
|
|
$
|
79,511
|
|
$
|
67,938
|
|
Long-term debt
|
$
|
15,975
|
|
$
|
19,253
|
|
$
|
19,757
|
|
$
|
20,444
|
|
$
|
16,202
|
|
|
|
|
|
|
|
||||||||||
Financial Ratios
|
|
|
|
|
|
||||||||||
Research and development expenses as percent of net sales
|
1.8
|
%
|
1.6
|
%
|
1.8
|
%
|
2.1
|
%
|
2.0
|
%
|
|||||
Income (loss) from continuing operations before income taxes as percent of net sales 2
|
(2.6
|
)%
|
7.6
|
%
|
0.5
|
%
|
3.5
|
%
|
21.8
|
%
|
|||||
Return on stockholders' equity 2
|
(8.6
|
)%
|
14.3
|
%
|
1.5
|
%
|
15.3
|
%
|
28.2
|
%
|
|||||
Gross debt as a percent of total capitalization
|
53.3
|
%
|
37.2
|
%
|
39.1
|
%
|
43.9
|
%
|
39.5
|
%
|
|||||
Net debt as a percent of total capitalization
|
49.6
|
%
|
33.7
|
%
|
31.1
|
%
|
35.1
|
%
|
24.6
|
%
|
1.
|
The Company has certain product and service agreements with DuPont and Corteva that were considered intercompany transactions prior to the separation, but are trade transactions subsequent to the separation. Treatment of these transactions as trade transactions have been reflected in the tables above for 2019, 2018, 2017 and 2016. The amounts for 2015 were not updated as the impact to "Net sales" for this period was not significant.
|
2.
|
See Notes 4, 7, 8, 9, 13, 14, 16, 17 and 21 to the Consolidated Financial Statements for information on items materially impacting the results for the years ended December 31, 2019, 2018 and 2017, including the effects of the U.S. Tax Cuts and Jobs Act, enacted on December 22, 2017; Swiss tax reform; loss on early redemption of debt; integration and separation costs; charges related to restructuring programs; goodwill impairment and other asset related charges (including charges related to Sadara Chemical Company); a charge related to environmental remediation; a charge related to payment of plan obligations to certain participants of a U.S. non-qualified pension plan; litigation related charges, awards and adjustments; and charges associated with agreements entered into with DuPont and Corteva as part of the separation from DowDuPont.
|
3.
|
Amount shown for 2019 represents dividends declared by Dow Inc. Amounts shown for 2017, 2016 and 2015 represent cash dividends declared by TDCC prior to the Merger. Subsequent to the Merger, TDCC has no common shares outstanding.
|
Table of Contents
|
Page
|
•
|
On April 1, 2019, Dow successfully completed its separation from DowDuPont, becoming a more focused and streamlined materials science company.
|
•
|
In April 2019, Dow Inc. was named to the Dow Jones Industrial Average.
|
•
|
On April 25, 2019, the Company announced plans to expand its alkoxylation capacity at its existing facility in Tarragona, Spain, directly benefiting the EMEAI region.
|
•
|
On August 13, 2019, Dow announced that it reached an agreement for the divestiture of its acetone derivatives business to ALTIVIA Ketones & Additives, LLC, an affiliate of ALTIVIA, a privately held producer of chemicals headquartered in Houston, Texas. The transaction closed on November 1, 2019, and included the Company's acetone derivatives related inventory and production assets located in Institute, West Virginia, in addition to the site infrastructure, land and utilities.
|
•
|
On August 20, 2019, as part of the Company's current slate of low capital intensity, high-return incremental growth investments, Dow announced it will retrofit proprietary fluidized catalytic dehydrogenation technology into one of its mixed-feed crackers in Plaquemine, Louisiana, to produce on-purpose propylene.
|
•
|
Dow announced two new agreements that contribute to its commitment to incorporate at least 100,000 tonnes of recycled plastics in its product offerings sold in the European Union by 2025. The first was announced on August 29, 2019 with the Fuenix Ecogy Group for the supply of pyrolysis oil feedstock, which is made from plastic waste. The second agreement was announced on September 24, 2019 with UPM Biofuels for the supply of wood-based UPM BioVerno renewable naphtha. These feedstocks will be used to produce new polymers and bio-based polyethylene at Dow's production facilities in Terneuzen, The Netherlands.
|
•
|
Dow was named to the Dow Jones Sustainability World Index - marking the 20th time the Company has been named to this global benchmark.
|
•
|
Dow was named to Fortune's 2019 Change the World list, recognizing the Company's program to pilot the use of recycled plastics in roads as part of the Company's long-standing commitment to reduce plastic waste and drive sustainable solutions.
|
•
|
Dow was named to the 2019 Disability Equality Index® "Best Places to Work," by receiving the top score for the third year in a row.
|
•
|
Dow received four R&D 100 Awards from R&D Magazine for innovative technologies including: IMAGIN3DTM Polyethylene OBC, SYL-OFFTM SL-25 Release Modifier, SILASTICTM MS-4007 Moldable Optical Silicone and GREAT STUFFTM SMART DISPENSERTM.
|
•
|
Dow received four 2019 Sustainability Awards from the Business Intelligence Group, including the Sustainability Initiative of the Year Award for the RENUVATM Mattress Project and the Sustainability Products of the Year Award for Dow PRIMALTM Bio-based Acrylic Emulsion, DOWSILTM TC-3015 Re-workable Thermal Conductive Silicone Gel and RENUVATM Polyols.
|
•
|
Dow received five prestigious Edison Awards for breakthrough technologies, setting a record for the Company, with two gold, two silver and one bronze award including: gold to ENGAGETM PV Polyolefin Elastomers, gold to Tenter Frame Biaxially Orientable Polyethylene Resin, silver to ECOFASTTM Pure Sustainable Textile Treatment, silver to VORARADTM Downhole Radium Sequestration Technology and bronze to OPULUXTM HGT.
|
•
|
On June 13, 2019, Samuel R. Allen was elected to Dow's Board of Directors, effective August 1, 2019.
|
•
|
On January 29, 2020, the Company announced plans to add another furnace to its ethylene production facility in Alberta, Canada, incrementally expanding capacity by approximately 130,000 metric tons. Dow will co-invest in the expansion with a regional customer, evenly sharing project costs and ethylene output, with the additional ethylene to be consumed by existing polyethylene manufacturing assets in the region. The expansion is expected to come online in the first half of 2021.
|
Summary of Sales Results
|
|
|
|
||||||
In millions
|
2019
|
2018
|
2017
|
||||||
Net sales
|
$
|
42,951
|
|
$
|
49,604
|
|
$
|
43,730
|
|
Pro forma net sales
|
$
|
42,998
|
|
$
|
49,852
|
|
$
|
44,772
|
|
1.
|
Portfolio & Other includes the sales 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.
|
Sales Variances by Operating Segment and Geographic Region - As Reported
Percentage change from prior year
|
2017
|
|||||||||
Local Price & Product Mix
|
Currency
|
Volume
|
Portfolio & Other 1
|
Total
|
||||||
Packaging & Specialty Plastics
|
8
|
%
|
—
|
%
|
6
|
%
|
3
|
%
|
17
|
%
|
Industrial Intermediates & Infrastructure
|
10
|
|
1
|
|
6
|
|
—
|
|
17
|
|
Performance Materials & Coatings
|
8
|
|
1
|
|
2
|
|
26
|
|
37
|
|
Total
|
9
|
%
|
—
|
%
|
6
|
%
|
6
|
%
|
21
|
%
|
U.S. & Canada
|
8
|
%
|
—
|
%
|
5
|
%
|
6
|
%
|
19
|
%
|
EMEAI
|
12
|
|
1
|
|
6
|
|
5
|
|
24
|
|
Asia Pacific
|
6
|
|
—
|
|
8
|
|
13
|
|
27
|
|
Latin America
|
4
|
|
—
|
|
—
|
|
3
|
|
7
|
|
Total
|
9
|
%
|
—
|
%
|
6
|
%
|
6
|
%
|
21
|
%
|
1.
|
Portfolio & Other primarily reflects sales related to the receipt of ECP as a common control transaction from the closing of the Merger on August 31, 2017, and the divestiture of the global Ethylene Acrylic Acid copolymers and ionomers business ("EAA Business"), divested on September 1, 2017 (both impacting Packaging & Specialty Plastics). In addition, Portfolio & Other includes the ownership restructure of Dow Silicones announced on June 1, 2016 (impacting Performance Materials & Coatings).
|
1.
|
Portfolio & Other includes the sales 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.
|
Packaging & Specialty Plastics
|
|
|
|
|||
Percentage change from prior year
|
2019
|
2018
|
2017
|
|||
Change in Net Sales from Prior Period due to:
|
|
|
|
|||
Local price & product mix
|
(12
|
)%
|
1
|
%
|
8
|
%
|
Currency
|
(1
|
)
|
2
|
|
—
|
|
Volume
|
(3
|
)
|
5
|
|
6
|
|
Portfolio & other
|
—
|
|
5
|
|
3
|
|
Total
|
(16
|
)%
|
13
|
%
|
17
|
%
|
Change in Pro Forma Net Sales from Prior Period due to:
|
|
|
|
|||
Local price & product mix
|
(12
|
)%
|
1
|
%
|
|
|
Currency
|
(1
|
)
|
1
|
|
|
|
Volume
|
(3
|
)
|
5
|
|
|
|
Portfolio & other
|
—
|
|
—
|
|
|
|
Total
|
(16
|
)%
|
7
|
%
|
|
Industrial Intermediates & Infrastructure
|
|
|
|
|||
Percentage change from prior year
|
2019
|
2018
|
2017
|
|||
Change in Net Sales from Prior Period due to:
|
|
|
|
|||
Local price & product mix
|
(12
|
)%
|
5
|
%
|
10
|
%
|
Currency
|
(1
|
)
|
1
|
|
1
|
|
Volume
|
—
|
|
13
|
|
6
|
|
Portfolio & other
|
—
|
|
—
|
|
—
|
|
Total
|
(13
|
)%
|
19
|
%
|
17
|
%
|
Change in Pro Forma Net Sales from Prior Period due to:
|
|
|
|
|||
Local price & product mix
|
(12
|
)%
|
5
|
%
|
|
|
Currency
|
(2
|
)
|
1
|
|
|
|
Volume
|
1
|
|
13
|
|
|
|
Portfolio & other
|
—
|
|
—
|
|
|
|
Total
|
(13
|
)%
|
19
|
%
|
|
Performance Materials & Coatings
|
|
|
|
|||
Percentage change from prior year
|
2019
|
2018
|
2017
|
|||
Change in Net Sales from Prior Period due to:
|
|
|
|
|||
Local price & product mix
|
(6
|
)%
|
10
|
%
|
8
|
%
|
Currency
|
(2
|
)
|
1
|
|
1
|
|
Volume
|
(3
|
)
|
(2
|
)
|
2
|
|
Portfolio & other
|
3
|
|
—
|
|
26
|
|
Total
|
(8
|
)%
|
9
|
%
|
37
|
%
|
Change in Pro Forma Net Sales from Prior Period due to:
|
|
|
|
|||
Local price & product mix
|
(6
|
)%
|
10
|
%
|
|
|
Currency
|
(2
|
)
|
1
|
|
|
|
Volume
|
(1
|
)
|
(2
|
)
|
|
|
Portfolio & other
|
—
|
|
2
|
|
|
|
Total
|
(9
|
)%
|
11
|
%
|
|
Corporate
|
|
|
|
||||||
In millions
|
2019
|
2018
|
2017
|
||||||
Net sales
|
$
|
343
|
|
$
|
285
|
|
$
|
383
|
|
Pro forma net sales
|
$
|
343
|
|
$
|
285
|
|
$
|
383
|
|
Pro forma Operating EBIT
|
$
|
(315
|
)
|
$
|
(370
|
)
|
$
|
(422
|
)
|
Equity losses
|
$
|
(20
|
)
|
$
|
(20
|
)
|
$
|
(8
|
)
|
•
|
Planned maintenance turnaround spending is expected to be approximately flat compared with 2019.
|
•
|
Equity losses in nonconsolidated affiliates are expected to be slightly unfavorable compared with 2019. With respect to Sadara, which impacts the Packaging & Specialty Plastics and Industrial Intermediates & Infrastructure operating segments, the Company expects to continue to record equity losses due to anticipated funding commitments with the joint venture.
|
•
|
The service cost component of pension expense is expected to be flat compared with 2019. The non-operating pension benefit is expected to be a headwind of approximately $125 million compared with 2019.
|
•
|
Interest expense and amortization of debt discount is expected to be approximately $850 million in 2020, reflecting lower gross debt compared with 2019.
|
•
|
Integration and separation spending is expected to be approximately $200 million to $250 million. Year over year reductions in integration and separation spending as well as cash payments related to the DowDuPont Cost Synergy Program will result in reduced cash spending of approximately $1 billion compared with 2019.
|
•
|
Cash contributions to global pension plans are expected to be limited to mandatory minimum contributions. The total cash outflow is projected to be approximately $250 million.
|
•
|
Capital expenditures are expected to be $1.5 billion to $1.75 billion. The Company will adjust its spending within this range through the year as economic conditions develop.
|
•
|
The Company expects to loan approximately $500 million to Sadara and all or a portion of the loan could potentially be converted into equity.
|
•
|
The Company expects to preferentially deploy its free cash flow1 in a balanced way between shareholder returns and debt reduction.
|
Cash Flow Summary
|
Dow Inc.
|
TDCC
|
||||||||||||||||
In millions
|
2019
|
2018
|
2017 1
|
2019
|
2018
|
2017 1
|
||||||||||||
Cash provided by (used for):
|
|
|
|
|
|
|
||||||||||||
Operating activities - continuing operations
|
$
|
5,713
|
|
$
|
3,096
|
|
$
|
(6,443
|
)
|
$
|
5,706
|
|
$
|
3,096
|
|
$
|
(6,443
|
)
|
Operating activities - discontinued operations
|
217
|
|
1,158
|
|
1,514
|
|
371
|
|
1,158
|
|
1,514
|
|
||||||
Operating activities
|
5,930
|
|
4,254
|
|
(4,929
|
)
|
6,077
|
|
4,254
|
|
(4,929
|
)
|
||||||
Investing activities - continuing operations
|
(2,158
|
)
|
(1,826
|
)
|
6,793
|
|
(2,158
|
)
|
(1,826
|
)
|
6,793
|
|
||||||
Investing activities - discontinued operations
|
(34
|
)
|
(369
|
)
|
725
|
|
(34
|
)
|
(369
|
)
|
725
|
|
||||||
Investing activities
|
(2,192
|
)
|
(2,195
|
)
|
7,518
|
|
(2,192
|
)
|
(2,195
|
)
|
7,518
|
|
||||||
Financing activities - continuing operations
|
(4,077
|
)
|
(5,351
|
)
|
(3,275
|
)
|
(4,224
|
)
|
(5,351
|
)
|
(3,275
|
)
|
||||||
Financing activities - discontinued operations
|
(18
|
)
|
(53
|
)
|
(50
|
)
|
(18
|
)
|
(53
|
)
|
(50
|
)
|
||||||
Financing activities
|
(4,095
|
)
|
(5,404
|
)
|
(3,325
|
)
|
(4,242
|
)
|
(5,404
|
)
|
(3,325
|
)
|
||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(27
|
)
|
(99
|
)
|
320
|
|
(27
|
)
|
(99
|
)
|
320
|
|
||||||
Summary
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Decrease in cash, cash equivalents and restricted cash
|
(384
|
)
|
(3,444
|
)
|
(416
|
)
|
(384
|
)
|
(3,444
|
)
|
(416
|
)
|
||||||
Cash, cash equivalents and restricted cash at beginning of year
|
2,764
|
|
6,208
|
|
6,624
|
|
2,764
|
|
6,208
|
|
6,624
|
|
||||||
Cash, cash equivalents and restricted cash at end of year
|
$
|
2,380
|
|
$
|
2,764
|
|
$
|
6,208
|
|
$
|
2,380
|
|
$
|
2,764
|
|
$
|
6,208
|
|
Less: Restricted cash and cash equivalents, included in "Other current assets"
|
13
|
|
40
|
|
19
|
|
13
|
|
40
|
|
19
|
|
||||||
Cash and cash equivalents at end of year
|
$
|
2,367
|
|
$
|
2,724
|
|
$
|
6,189
|
|
$
|
2,367
|
|
$
|
2,724
|
|
$
|
6,189
|
|
1.
|
Updated for ASU 2016-15, "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments" ("ASU 2016-15") (including related SEC interpretive guidance) and ASU 2016-18, "Statement of Cash Flows (Topic 230): Restricted Cash," which the Company adopted in 2018.
|
Net Working Capital at Dec 31
|
Dow Inc.
|
TDCC
|
||||||||||
In millions
|
2019
|
2018
|
2019
|
2018
|
||||||||
Current assets 1
|
$
|
16,815
|
|
$
|
19,470
|
|
$
|
16,733
|
|
$
|
19,470
|
|
Current liabilities 1
|
10,679
|
|
11,059
|
|
10,150
|
|
11,059
|
|
||||
Net working capital
|
$
|
6,136
|
|
$
|
8,411
|
|
$
|
6,583
|
|
$
|
8,411
|
|
Current ratio
|
1.57:1
|
|
1.76:1
|
|
1.65:1
|
|
1.76:1
|
|
1.
|
Amounts exclude assets and liabilities of discontinued operations.
|
Working Capital Metrics
|
Twelve Months Ended
|
|||
|
Dec 31, 2019
|
Dec 31, 2018
|
||
Days sales outstanding in trade receivables 1
|
45
|
|
41
|
|
Days sales in inventory 2
|
65
|
|
58
|
|
Days payables outstanding 3
|
65
|
|
58
|
|
1.
|
The increase in days sales outstanding in receivables was primarily due to an increase in accounts receivable as a result of the Company’s accounts receivable securitization facilities moving from off-balance sheet arrangements to secured borrowing arrangements in the second half of 2018.
|
2.
|
The increase in days sales in inventory is primarily due to a decrease in COS, driven by lower sales and raw material costs, in addition to an increase in average ending inventory.
|
3.
|
The increase in days payables outstanding is primarily due to a decrease in average accounts payable and a decrease in COS, which were partially offset by an increase in average ending inventory.
|
Reconciliation of Non-GAAP Cash Flow Measures
|
Dow Inc.
|
||||||||
In millions
|
2019
|
2018
|
2017
|
||||||
Cash provided by (used for) operating activities - continuing operations (GAAP)
|
$
|
5,713
|
|
$
|
3,096
|
|
$
|
(6,443
|
)
|
Impact of ASU 2016-15 and related interpretive guidance
|
—
|
|
657
|
|
9,462
|
|
|||
Cash flows from operating activities - continuing operations - excluding impact of ASU 2016-15 (Non-GAAP)
|
$
|
5,713
|
|
$
|
3,753
|
|
$
|
3,019
|
|
Capital expenditures
|
(1,961
|
)
|
(2,091
|
)
|
(2,807
|
)
|
|||
Free cash flow (Non-GAAP)
|
$
|
3,752
|
|
$
|
1,662
|
|
$
|
212
|
|
Reconciliation of Cash Flow Conversion (Pro Forma Operating EBITDA to Cash Flow From Operations)
|
Dow Inc.
|
||||||||
In millions
|
2019
|
2018
|
2017
|
||||||
Income (loss) from continuing operations, net of tax (GAAP)
|
$
|
(1,717
|
)
|
$
|
2,940
|
|
$
|
(1,287
|
)
|
+ Provision for income taxes on continuing operations
|
470
|
|
809
|
|
1,524
|
|
|||
Income (loss) from continuing operations before income taxes
|
$
|
(1,247
|
)
|
$
|
3,749
|
|
$
|
237
|
|
- Interest income
|
81
|
|
82
|
|
66
|
|
|||
+ Interest expense and amortization of debt discount
|
933
|
|
1,063
|
|
914
|
|
|||
+ Pro forma adjustments 1
|
65
|
|
180
|
|
1,120
|
|
|||
- Significant items
|
(4,682
|
)
|
(1,326
|
)
|
(3,372
|
)
|
|||
Pro forma Operating EBIT
|
$
|
4,352
|
|
$
|
6,236
|
|
$
|
5,577
|
|
+ Pro forma depreciation and amortization
|
2,938
|
|
2,909
|
|
2,684
|
|
|||
Pro forma Operating EBITDA
|
$
|
7,290
|
|
$
|
9,145
|
|
$
|
8,261
|
|
Cash flows from operating activities - continuing operations - excluding impact of ASU 2016-15 (Non-GAAP)
|
$
|
5,713
|
|
$
|
3,753
|
|
$
|
3,019
|
|
Cash flow conversion (Pro Forma Operating EBITDA to cash flow from operations) (Non-GAAP)
|
78.4
|
%
|
41.0
|
%
|
36.5
|
%
|
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 (included for 2019 and 2018 only), (2) the inclusion of ECP for the period of January 1, 2017 through August 31, 2017, (3) the removal of the amortization of ECP's inventory step-up recognized in connection with the Merger (4) 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) and (5) the elimination of the effect of a consummated divestiture agreed to with certain regulatory agencies as a condition of approval for the Merger. See Note 27 to the Consolidated Financial Statements for additional information.
|
Total Debt at Dec 31
|
Dow Inc.
|
TDCC
|
||||||||||
In millions
|
2019
|
2018
|
2019
|
2018
|
||||||||
Notes payable
|
$
|
586
|
|
$
|
298
|
|
$
|
586
|
|
$
|
298
|
|
Long-term debt due within one year
|
435
|
|
338
|
|
435
|
|
338
|
|
||||
Long-term debt
|
15,975
|
|
19,253
|
|
15,975
|
|
19,253
|
|
||||
Gross debt
|
$
|
16,996
|
|
$
|
19,889
|
|
$
|
16,996
|
|
$
|
19,889
|
|
- Cash and cash equivalents
|
2,367
|
|
2,724
|
|
2,367
|
|
2,724
|
|
||||
- Marketable securities
|
21
|
|
100
|
|
21
|
|
100
|
|
||||
Net debt
|
$
|
14,608
|
|
$
|
17,065
|
|
$
|
14,608
|
|
$
|
17,065
|
|
Gross debt as a percent of total capitalization
|
54.7
|
%
|
37.2
|
%
|
53.3
|
%
|
37.2
|
%
|
||||
Net debt as a percent of total capitalization
|
50.9
|
%
|
33.7
|
%
|
49.6
|
%
|
33.7
|
%
|
Credit Ratings
|
Long-Term Rating
|
Short-Term Rating
|
Outlook
|
Standard & Poor’s
|
BBB
|
A-2
|
Stable
|
Moody’s Investors Service
|
Baa2
|
P-2
|
Stable
|
Fitch Ratings
|
BBB+
|
F2
|
Stable
|
Dividends Paid for the Years Ended Dec 31
|
2019 1
|
2018 2
|
2017 3
|
||||
In millions, except per share amounts
|
|||||||
Dividends paid, per common share
|
$
|
2.10
|
|
N/A
|
$
|
1.84
|
|
Dividends paid to common stockholders
|
$
|
1,550
|
|
N/A
|
$
|
2,179
|
|
1.
|
Reflects Dow Inc. activity subsequent to the separation from DowDuPont.
|
2.
|
In 2018, the common stock of Dow Inc. and TDCC was owned solely by DowDuPont and therefore the Company did not have publicly traded stock.
|
3.
|
Reflects TDCC activity prior to the Merger.
|
Contractual Obligations at Dec 31, 2019
|
Payments Due In
|
|
|||||||||||||
In millions
|
2020
|
2021-2022
|
2023-2024
|
2025 and beyond
|
Total
|
||||||||||
Dow Inc.
|
|
|
|
|
|
||||||||||
Long-term debt obligations 1
|
$
|
435
|
|
$
|
2,024
|
|
$
|
4,036
|
|
$
|
10,246
|
|
$
|
16,741
|
|
Expected cash requirements for interest 2
|
799
|
|
1,529
|
|
1,289
|
|
7,479
|
|
11,096
|
|
|||||
Pension and other postretirement benefits
|
379
|
|
909
|
|
1,944
|
|
7,214
|
|
10,446
|
|
|||||
Operating leases 3
|
492
|
|
777
|
|
504
|
|
803
|
|
2,576
|
|
|||||
Purchase obligations 4
|
2,548
|
|
4,162
|
|
3,664
|
|
4,737
|
|
15,111
|
|
|||||
Other noncurrent obligations 5
|
—
|
|
1,390
|
|
795
|
|
1,062
|
|
3,247
|
|
|||||
Total
|
$
|
4,653
|
|
$
|
10,791
|
|
$
|
12,232
|
|
$
|
31,541
|
|
$
|
59,217
|
|
TDCC
|
|
|
|
|
|
||||||||||
Long-term debt obligations 1
|
$
|
435
|
|
$
|
2,024
|
|
$
|
4,036
|
|
$
|
10,246
|
|
$
|
16,741
|
|
Expected cash requirements for interest 2
|
799
|
|
1,529
|
|
1,289
|
|
7,479
|
|
11,096
|
|
|||||
Pension and other postretirement benefits
|
379
|
|
909
|
|
1,944
|
|
7,214
|
|
10,446
|
|
|||||
Operating leases 3
|
492
|
|
777
|
|
504
|
|
803
|
|
2,576
|
|
|||||
Purchase obligations 4
|
2,548
|
|
4,162
|
|
3,664
|
|
4,737
|
|
15,111
|
|
|||||
Other noncurrent obligations 5
|
—
|
|
1,180
|
|
633
|
|
1,061
|
|
2,874
|
|
|||||
Total
|
$
|
4,653
|
|
$
|
10,581
|
|
$
|
12,070
|
|
$
|
31,540
|
|
$
|
58,844
|
|
1.
|
Excludes unamortized debt discount and issuance costs of $331 million. Includes finance lease obligations of $395 million. Assumes the option to extend will be exercised for the $2 billion Dow Silicones Term Loan Facility.
|
2.
|
Cash requirements for interest on long-term debt was calculated using current interest rates at December 31, 2019, and includes $2,344 million of various floating rate notes.
|
3.
|
Includes imputed interest of $416 million.
|
4.
|
Includes outstanding purchase orders and other commitments greater than $1 million obtained through a survey conducted within the Company.
|
5.
|
Includes liabilities related to asbestos litigation, environmental remediation, legal settlements and other noncurrent liabilities. In addition to these items, Dow Inc. includes liabilities related to noncurrent obligations with DuPont and Corteva. The table excludes uncertain tax positions due to uncertainties in the timing of the effective settlement of tax positions with the respective taxing authorities and deferred tax liabilities as it is impractical to determine whether there will be a cash impact related to these liabilities. The table also excludes deferred revenue as it does not represent future cash requirements arising from contractual payment obligations.
|
Net Increase in Market-Related Asset Value Due to Recognition of Prior Gains (Losses)
|
|||
In millions
|
|||
2020
|
$
|
93
|
|
2021
|
129
|
|
|
2022
|
(48
|
)
|
|
2023
|
392
|
|
|
Total
|
$
|
566
|
|
•
|
Conserve - aggressively pursue energy efficiency and conservation
|
•
|
Optimize - increase and diversify energy resources
|
•
|
Accelerate - develop cost-effective, clean, renewable and alternative energy sources
|
•
|
Transition - to a sustainable energy future
|
Environmental Sites
|
Dow-owned Sites 1
|
Superfund Sites 2
|
||||||
|
2019
|
2018
|
2019
|
2018
|
||||
Number of sites at Jan 1
|
178
|
|
181
|
|
131
|
|
131
|
|
Sites added during year
|
7
|
|
3
|
|
6
|
|
2
|
|
Sites closed during year
|
(7
|
)
|
(6
|
)
|
(4
|
)
|
(2
|
)
|
Number of sites at Dec 31
|
178
|
|
178
|
|
133
|
|
131
|
|
1.
|
Dow-owned sites are sites currently or formerly owned by the Company. In the United States, remediation obligations are imposed by the Resource Conservation and Recovery Act or analogous state law. At December 31, 2019, 28 of these sites (32 sites at December 31, 2018) were formerly owned by Dowell Schlumberger, Inc., a group of companies in which the Company previously owned a 50 percent interest. The Company sold its interest in Dowell Schlumberger in 1992.
|
2.
|
Superfund sites are sites, including sites not owned by the Company, where remediation obligations are imposed by Superfund Law.
|
Asbestos-Related Claim Activity
|
2019
|
2018
|
2017
|
|||
Claims unresolved at Jan 1
|
12,780
|
|
15,427
|
|
16,141
|
|
Claims filed
|
5,743
|
|
6,599
|
|
7,010
|
|
Claims settled, dismissed or otherwise resolved
|
(7,406
|
)
|
(9,246
|
)
|
(7,724
|
)
|
Claims unresolved at Dec 31
|
11,117
|
|
12,780
|
|
15,427
|
|
Claimants with claims against both Union Carbide and Amchem
|
(3,837
|
)
|
(4,675
|
)
|
(5,530
|
)
|
Individual claimants at Dec 31
|
7,280
|
|
8,105
|
|
9,897
|
|
Total Daily VAR by Exposure Type at Dec 31
|
2019
|
2018
|
||||||||||
In millions
|
Year-end
|
Average
|
Year-end
|
Average
|
||||||||
Commodities
|
$
|
7
|
|
$
|
12
|
|
$
|
26
|
|
$
|
30
|
|
Equity securities
|
10
|
|
11
|
|
12
|
|
7
|
|
||||
Foreign exchange
|
43
|
|
36
|
|
26
|
|
28
|
|
||||
Interest rate
|
77
|
|
69
|
|
81
|
|
80
|
|
||||
Composite
|
$
|
137
|
|
$
|
128
|
|
$
|
145
|
|
$
|
145
|
|
•
|
We tested the effectiveness of internal controls over the goodwill impairment evaluation, including controls over the selection of the discount rates and over forecasts of future revenue growth rates, EBITDA, and EBITDA margin.
|
•
|
We performed a retrospective review comparing actual revenue and EBITDA results of the reporting unit for 2019 to the forecasted results from 2018.
|
•
|
We performed a retrospective review comparing management’s estimates and assumptions relating to revenue, EBITDA, and EBITDA margin projections for the reporting unit used for the purpose of current year’s annual impairment test to the projections previously used in connection with the prior year annual impairment test.
|
•
|
We evaluated the consistency of estimates and assumptions relating to revenue and EBITDA growth inherent in the discounted cash flow model for the reporting unit to those used by management in other annual forecasting activities.
|
•
|
With the assistance of our fair value specialists, we performed a benchmarking exercise comparing management’s estimates and assumptions related to revenue growth, EBITDA and EBITDA margin for the reporting unit as of the measurement date to the revenue growth, EBITDA and EBITDA margins of a peer group of public companies for the most recent three years and the projection period.
|
•
|
With the assistance of our fair value specialists, we evaluated (1) the valuation methodology used and (2) the projections of long-term revenue growth and the discount rates by testing the underlying source information, and by developing a range of independent estimates and comparing those to the rates selected by management.
|
•
|
We tested the effectiveness of internal controls over management’s evaluation of the Sadara investment for other-than-temporary impairment, including management’s evaluation of the assumptions used such as discount rate, terminal value, and long-term growth rate.
|
•
|
We evaluated the consistency of the assumptions and judgments relating to the discount rate, terminal value, and long-term growth rates by comparing to:
|
◦
|
Agreements in place between Sadara and Dow
|
◦
|
Independent third-party pricing study
|
•
|
We read external information included in press releases, earnings releases, regulatory filings, and other Sadara communications to search for contradictory information.
|
•
|
With the assistance of our fair value specialists, we evaluated (1) the valuation methodology used and model being used (2) the assumptions used such as the discount rate, terminal value, and the long-term growth rate by testing the underlying source information, and by developing a range of independent estimates and comparing those to the rates selected by management.
|
/s/ DELOITTE & TOUCHE LLP
|
•
|
We tested the effectiveness of internal controls over the goodwill impairment evaluation, including controls over the selection of the discount rates and over forecasts of future revenue growth rates, EBITDA, and EBITDA margin.
|
•
|
We performed a retrospective review comparing actual revenue and EBITDA results of the reporting unit for 2019 to the forecasted results from 2018.
|
•
|
We performed a retrospective review comparing management’s estimates and assumptions relating to revenue, EBITDA, and EBITDA margin projections for the reporting unit used for the purpose of current year’s annual impairment test to the projections previously used in connection with the prior year annual impairment test.
|
•
|
We evaluated the consistency of estimates and assumptions relating to revenue and EBITDA growth inherent in the discounted cash flow model for the reporting unit to those used by management in other annual forecasting activities.
|
•
|
With the assistance of our fair value specialists, we performed a benchmarking exercise comparing management’s estimates and assumptions related to revenue growth, EBITDA and EBITDA margin for the reporting unit as of the measurement date to the revenue growth, EBITDA and EBITDA margins of a peer group of public companies for the most recent three years and the projection period.
|
•
|
With the assistance of our fair value specialists, we evaluated (1) the valuation methodology used and (2) the projections of long-term revenue growth and the discount rates by testing the underlying source information, and by developing a range of independent estimates and comparing those to the rates selected by management.
|
•
|
We tested the effectiveness of internal controls over management’s evaluation of the Sadara investment for other-than-temporary impairment, including management’s evaluation of the assumptions used such as discount rate, terminal value, and long-term growth rate.
|
•
|
We evaluated the consistency of the assumptions and judgments relating to the discount rate, terminal value, and long-term growth rates by comparing to:
|
◦
|
Agreements in place between Sadara and Dow
|
◦
|
Independent third-party pricing study
|
•
|
We read external information included in press releases, earnings releases, regulatory filings, and other Sadara communications to search for contradictory information.
|
•
|
With the assistance of our fair value specialists, we evaluated (1) the valuation methodology used and model being used (2) the assumptions used such as the discount rate, terminal value, and the long-term growth rate by testing the underlying source information, and by developing a range of independent estimates and comparing those to the rates selected by management.
|
/s/ DELOITTE & TOUCHE LLP
|
(In millions, except per share amounts) For the years ended Dec 31,
|
2019
|
2018
|
2017
|
||||||
Net sales
|
$
|
42,951
|
|
$
|
49,604
|
|
$
|
43,730
|
|
Cost of sales
|
36,657
|
|
41,074
|
|
36,350
|
|
|||
Research and development expenses
|
765
|
|
800
|
|
803
|
|
|||
Selling, general and administrative expenses
|
1,590
|
|
1,782
|
|
1,795
|
|
|||
Amortization of intangibles
|
419
|
|
469
|
|
400
|
|
|||
Restructuring, goodwill impairment and asset related charges - net
|
3,219
|
|
221
|
|
2,739
|
|
|||
Integration and separation costs
|
1,063
|
|
1,179
|
|
798
|
|
|||
Equity in earnings (losses) of nonconsolidated affiliates
|
(94
|
)
|
555
|
|
394
|
|
|||
Sundry income (expense) - net
|
461
|
|
96
|
|
(154
|
)
|
|||
Interest income
|
81
|
|
82
|
|
66
|
|
|||
Interest expense and amortization of debt discount
|
933
|
|
1,063
|
|
914
|
|
|||
Income (loss) from continuing operations before income taxes
|
(1,247
|
)
|
3,749
|
|
237
|
|
|||
Provision for income taxes on continuing operations
|
470
|
|
809
|
|
1,524
|
|
|||
Income (loss) from continuing operations, net of tax
|
(1,717
|
)
|
2,940
|
|
(1,287
|
)
|
|||
Income from discontinued operations, net of tax
|
445
|
|
1,835
|
|
1,882
|
|
|||
Net income (loss)
|
(1,272
|
)
|
4,775
|
|
595
|
|
|||
Net income attributable to noncontrolling interests
|
87
|
|
134
|
|
130
|
|
|||
Net income (loss) available for Dow Inc. common stockholders
|
$
|
(1,359
|
)
|
$
|
4,641
|
|
$
|
465
|
|
|
|
|
|
||||||
|
|
|
|
||||||
Per common share data:
|
|
|
|
||||||
Earnings (loss) per common share from continuing operations - basic
|
$
|
(2.42
|
)
|
$
|
3.80
|
|
$
|
(1.88
|
)
|
Earnings per common share from discontinued operations - basic
|
0.58
|
|
2.41
|
|
2.48
|
|
|||
Earnings (loss) per common share - basic
|
$
|
(1.84
|
)
|
$
|
6.21
|
|
$
|
0.60
|
|
Earnings (loss) per common share from continuing operations - diluted
|
$
|
(2.42
|
)
|
$
|
3.80
|
|
$
|
(1.88
|
)
|
Earnings per common share from discontinued operations - diluted
|
0.58
|
|
2.41
|
|
2.48
|
|
|||
Earnings (loss) per common share - diluted
|
$
|
(1.84
|
)
|
$
|
6.21
|
|
$
|
0.60
|
|
|
|
|
|
|
|
||||
Weighted-average common shares outstanding - basic
|
742.5
|
|
747.2
|
|
744.8
|
|
|||
Weighted-average common shares outstanding - diluted
|
742.5
|
|
747.2
|
|
744.8
|
|
(In millions) For the years ended Dec 31,
|
2019
|
2018
|
2017
|
||||||
Net income (loss)
|
$
|
(1,272
|
)
|
$
|
4,775
|
|
$
|
595
|
|
Other comprehensive income (loss), net of tax
|
|
|
|
||||||
Unrealized gains (losses) on investments
|
115
|
|
(67
|
)
|
(46
|
)
|
|||
Cumulative translation adjustments
|
(32
|
)
|
(225
|
)
|
900
|
|
|||
Pension and other postretirement benefit plans
|
(899
|
)
|
(40
|
)
|
391
|
|
|||
Derivative instruments
|
(338
|
)
|
75
|
|
(14
|
)
|
|||
Total other comprehensive income (loss)
|
(1,154
|
)
|
(257
|
)
|
1,231
|
|
|||
Comprehensive income (loss)
|
(2,426
|
)
|
4,518
|
|
1,826
|
|
|||
Comprehensive income attributable to noncontrolling interests, net of tax
|
99
|
|
97
|
|
172
|
|
|||
Comprehensive income (loss) attributable to Dow Inc.
|
$
|
(2,525
|
)
|
$
|
4,421
|
|
$
|
1,654
|
|
(In millions, except share amounts) At Dec 31,
|
2019
|
2018
|
||||
Assets
|
|
|
||||
Current Assets
|
|
|
||||
Cash and cash equivalents (variable interest entities restricted - 2019: $37; 2018: $71)
|
$
|
2,367
|
|
$
|
2,724
|
|
Marketable securities
|
21
|
|
100
|
|
||
Accounts and notes receivable:
|
|
|
||||
Trade (net of allowance for doubtful receivables - 2019: $45; 2018: $42)
|
4,844
|
|
5,646
|
|
||
Other
|
2,711
|
|
3,389
|
|
||
Inventories
|
6,214
|
|
6,899
|
|
||
Other current assets
|
658
|
|
712
|
|
||
Assets of discontinued operations - current
|
—
|
|
19,900
|
|
||
Total current assets
|
16,815
|
|
39,370
|
|
||
Investments
|
|
|
||||
Investment in nonconsolidated affiliates
|
1,404
|
|
3,320
|
|
||
Other investments (investments carried at fair value - 2019: $1,584; 2018: $1,699)
|
2,588
|
|
2,646
|
|
||
Noncurrent receivables
|
1,063
|
|
360
|
|
||
Total investments
|
5,055
|
|
6,326
|
|
||
Property
|
|
|
||||
Property
|
54,910
|
|
53,984
|
|
||
Less accumulated depreciation
|
33,914
|
|
32,566
|
|
||
Net property (variable interest entities restricted - 2019: $330; 2018: $683)
|
20,996
|
|
21,418
|
|
||
Other Assets
|
|
|
||||
Goodwill
|
8,796
|
|
9,846
|
|
||
Other intangible assets (net of accumulated amortization - 2019: $3,886; 2018: $3,379)
|
3,759
|
|
4,225
|
|
||
Operating lease right-of-use assets
|
2,072
|
|
—
|
|
||
Deferred income tax assets
|
2,213
|
|
1,779
|
|
||
Deferred charges and other assets
|
818
|
|
735
|
|
||
Total other assets
|
17,658
|
|
16,585
|
|
||
Total Assets
|
$
|
60,524
|
|
$
|
83,699
|
|
Liabilities and Equity
|
|
|
||||
Current Liabilities
|
|
|
||||
Notes payable
|
$
|
586
|
|
$
|
298
|
|
Long-term debt due within one year
|
435
|
|
338
|
|
||
Accounts payable:
|
|
|
||||
Trade
|
3,889
|
|
4,456
|
|
||
Other
|
2,064
|
|
2,479
|
|
||
Operating lease liabilities - current
|
421
|
|
—
|
|
||
Income taxes payable
|
522
|
|
557
|
|
||
Accrued and other current liabilities
|
2,762
|
|
2,931
|
|
||
Liabilities of discontinued operations - current
|
—
|
|
4,488
|
|
||
Total current liabilities
|
10,679
|
|
15,547
|
|
||
Long-Term Debt (variable interest entities nonrecourse - 2019: $34; 2018: $75)
|
15,975
|
|
19,253
|
|
||
Other Noncurrent Liabilities
|
|
|
||||
Deferred income tax liabilities
|
347
|
|
501
|
|
||
Pension and other postretirement benefits - noncurrent
|
10,083
|
|
8,926
|
|
||
Asbestos-related liabilities - noncurrent
|
1,060
|
|
1,142
|
|
||
Operating lease liabilities - noncurrent
|
1,739
|
|
—
|
|
||
Other noncurrent obligations
|
6,547
|
|
4,709
|
|
||
Total other noncurrent liabilities
|
19,776
|
|
15,278
|
|
||
Stockholders’ Equity
|
|
|
||||
Common stock (2019: authorized 5,000,000,000 shares and issued 751,228,644 shares of $0.01 par value each;
2018: authorized and issued 100 shares of $0.01 par value each)
|
8
|
|
—
|
|
||
Additional paid-in capital
|
7,325
|
|
7,042
|
|
||
Retained earnings
|
17,045
|
|
35,460
|
|
||
Accumulated other comprehensive loss
|
(10,246
|
)
|
(9,885
|
)
|
||
Unearned ESOP shares
|
(91
|
)
|
(134
|
)
|
||
Treasury stock at cost (2019: 9,729,834 shares; 2018: zero shares)
|
(500
|
)
|
—
|
|
||
Dow Inc.’s stockholders’ equity
|
13,541
|
|
32,483
|
|
||
Noncontrolling interests
|
553
|
|
1,138
|
|
||
Total equity
|
14,094
|
|
33,621
|
|
||
Total Liabilities and Equity
|
$
|
60,524
|
|
$
|
83,699
|
|
(In millions) For the years ended Dec 31,
|
2019
|
2018
|
2017
|
||||||
Operating Activities
|
|
|
|
||||||
Net income (loss)
|
$
|
(1,272
|
)
|
$
|
4,775
|
|
$
|
595
|
|
Less: Income from discontinued operations, net of tax
|
445
|
|
1,835
|
|
1,882
|
|
|||
Income (loss) from continuing operations, net of tax
|
(1,717
|
)
|
2,940
|
|
(1,287
|
)
|
|||
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:
|
|
|
|
||||||
Depreciation and amortization
|
2,938
|
|
2,909
|
|
2,546
|
|
|||
Provision (credit) for deferred income tax
|
(228
|
)
|
(429
|
)
|
1,413
|
|
|||
Earnings of nonconsolidated affiliates less than dividends received
|
1,114
|
|
108
|
|
253
|
|
|||
Net periodic pension benefit cost
|
144
|
|
279
|
|
1,032
|
|
|||
Pension contributions
|
(261
|
)
|
(1,651
|
)
|
(1,672
|
)
|
|||
Net gain on sales of assets, businesses and investments
|
(81
|
)
|
(38
|
)
|
(419
|
)
|
|||
Restructuring, goodwill impairment and asset related charges - net
|
3,219
|
|
221
|
|
2,739
|
|
|||
Other net loss
|
198
|
|
415
|
|
451
|
|
|||
Changes in assets and liabilities, net of effects of acquired and divested companies:
|
|
|
|
|
|
|
|||
Accounts and notes receivable
|
1,253
|
|
(855
|
)
|
(11,431
|
)
|
|||
Inventories
|
668
|
|
(859
|
)
|
(891
|
)
|
|||
Accounts payable
|
(948
|
)
|
787
|
|
1,081
|
|
|||
Other assets and liabilities, net
|
(586
|
)
|
(731
|
)
|
(258
|
)
|
|||
Cash provided by (used for) operating activities - continuing operations
|
5,713
|
|
3,096
|
|
(6,443
|
)
|
|||
Cash provided by operating activities - discontinued operations
|
217
|
|
1,158
|
|
1,514
|
|
|||
Cash provided by (used for) operating activities
|
5,930
|
|
4,254
|
|
(4,929
|
)
|
|||
Investing Activities
|
|
|
|
|
|
||||
Capital expenditures
|
(1,961
|
)
|
(2,091
|
)
|
(2,807
|
)
|
|||
Investment in gas field developments
|
(76
|
)
|
(114
|
)
|
(121
|
)
|
|||
Purchases of previously leased assets
|
(9
|
)
|
(26
|
)
|
(187
|
)
|
|||
Proceeds from sales of property and businesses, net of cash divested
|
84
|
|
47
|
|
522
|
|
|||
Acquisitions of property and businesses, net of cash acquired
|
—
|
|
(20
|
)
|
47
|
|
|||
Investments in and loans to nonconsolidated affiliates
|
(638
|
)
|
(18
|
)
|
(749
|
)
|
|||
Distributions and loan repayments from nonconsolidated affiliates
|
89
|
|
55
|
|
69
|
|
|||
Purchases of investments
|
(899
|
)
|
(1,530
|
)
|
(642
|
)
|
|||
Proceeds from sales and maturities of investments
|
1,252
|
|
1,214
|
|
1,165
|
|
|||
Proceeds from interests in trade accounts receivable conduits
|
—
|
|
657
|
|
9,462
|
|
|||
Other investing activities, net
|
—
|
|
—
|
|
34
|
|
|||
Cash provided by (used for) investing activities - continuing operations
|
(2,158
|
)
|
(1,826
|
)
|
6,793
|
|
|||
Cash provided by (used for) investing activities - discontinued operations
|
(34
|
)
|
(369
|
)
|
725
|
|
|||
Cash provided by (used for) investing activities
|
(2,192
|
)
|
(2,195
|
)
|
7,518
|
|
|||
Financing Activities
|
|
|
|
|
|
|
|||
Changes in short-term notes payable
|
307
|
|
(178
|
)
|
268
|
|
|||
Proceeds from issuance of long-term debt
|
2,287
|
|
1,999
|
|
—
|
|
|||
Payments on long-term debt
|
(5,561
|
)
|
(3,054
|
)
|
(617
|
)
|
|||
Purchases of treasury stock
|
(500
|
)
|
—
|
|
—
|
|
|||
Proceeds from issuance of parent company stock
|
93
|
|
112
|
|
66
|
|
|||
Proceeds from sales of common stock
|
—
|
|
—
|
|
423
|
|
|||
Transaction financing, debt issuance and other costs
|
(119
|
)
|
(70
|
)
|
—
|
|
|||
Employee taxes paid for share-based payment arrangements
|
(60
|
)
|
(77
|
)
|
(81
|
)
|
|||
Distributions to noncontrolling interests
|
(77
|
)
|
(135
|
)
|
(101
|
)
|
|||
Purchases of noncontrolling interests
|
(297
|
)
|
—
|
|
—
|
|
|||
Dividends paid to stockholders
|
(1,550
|
)
|
—
|
|
(2,179
|
)
|
|||
Dividends paid to DowDuPont Inc.
|
(535
|
)
|
(3,711
|
)
|
(1,056
|
)
|
|||
Settlements and transfers related to separation from DowDuPont Inc.
|
1,935
|
|
(240
|
)
|
6
|
|
|||
Other financing activities, net
|
—
|
|
3
|
|
(4
|
)
|
|||
Cash used for financing activities - continuing operations
|
(4,077
|
)
|
(5,351
|
)
|
(3,275
|
)
|
|||
Cash used for financing activities - discontinued operations
|
(18
|
)
|
(53
|
)
|
(50
|
)
|
|||
Cash used for financing activities
|
(4,095
|
)
|
(5,404
|
)
|
(3,325
|
)
|
|||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(27
|
)
|
(99
|
)
|
320
|
|
|||
Summary
|
|
|
|
|
|
|
|||
Decrease in cash, cash equivalents and restricted cash
|
(384
|
)
|
(3,444
|
)
|
(416
|
)
|
|||
Cash, cash equivalents and restricted cash at beginning of year
|
2,764
|
|
6,208
|
|
6,624
|
|
|||
Cash, cash equivalents and restricted cash at end of year
|
$
|
2,380
|
|
$
|
2,764
|
|
$
|
6,208
|
|
Less: Restricted cash and cash equivalents, included in "Other current assets"
|
13
|
|
40
|
|
19
|
|
|||
Cash and cash equivalents at end of year
|
$
|
2,367
|
|
$
|
2,724
|
|
$
|
6,189
|
|
(In millions, except per share amounts) For the years ended Dec 31,
|
2019
|
2018
|
2017
|
||||||
Common Stock
|
|
|
|
||||||
Balance at beginning of year
|
$
|
—
|
|
$
|
—
|
|
$
|
3,107
|
|
Merger impact
|
—
|
|
—
|
|
(3,107
|
)
|
|||
Common stock issued
|
8
|
|
—
|
|
—
|
|
|||
Balance at end of year
|
8
|
|
—
|
|
—
|
|
|||
Additional Paid-in Capital
|
|
|
|
||||||
Balance at beginning of year
|
7,042
|
|
6,553
|
|
4,262
|
|
|||
Common stock issued / sold
|
57
|
|
—
|
|
423
|
|
|||
Issuance of parent company stock - DowDuPont Inc.
|
28
|
|
112
|
|
66
|
|
|||
Stock-based compensation and allocation of ESOP shares
|
235
|
|
377
|
|
(368
|
)
|
|||
Merger impact
|
—
|
|
—
|
|
2,172
|
|
|||
Other
|
(37
|
)
|
—
|
|
(2
|
)
|
|||
Balance at end of year
|
7,325
|
|
7,042
|
|
6,553
|
|
|||
Retained Earnings
|
|
|
|
||||||
Balance at beginning of year
|
35,460
|
|
33,742
|
|
30,338
|
|
|||
Adoption of accounting standards (Note 1)
|
(151
|
)
|
989
|
|
—
|
|
|||
Net income (loss) available for Dow Inc.'s common stockholders
|
(1,359
|
)
|
4,641
|
|
465
|
|
|||
Dividends to stockholders
|
(1,550
|
)
|
—
|
|
(1,673
|
)
|
|||
Dividends to DowDuPont Inc.
|
(535
|
)
|
(3,711
|
)
|
(1,056
|
)
|
|||
Common control transaction
|
(14,806
|
)
|
(182
|
)
|
5,693
|
|
|||
Other
|
(14
|
)
|
(19
|
)
|
(25
|
)
|
|||
Balance at end of year
|
17,045
|
|
35,460
|
|
33,742
|
|
|||
Accumulated Other Comprehensive Loss
|
|
|
|
||||||
Balance at beginning of year
|
(9,885
|
)
|
(8,591
|
)
|
(9,822
|
)
|
|||
Adoption of accounting standards (Note 1)
|
—
|
|
(1,037
|
)
|
—
|
|
|||
Other comprehensive income (loss)
|
(1,154
|
)
|
(257
|
)
|
1,231
|
|
|||
Common control transaction
|
793
|
|
—
|
|
—
|
|
|||
Balance at end of year
|
(10,246
|
)
|
(9,885
|
)
|
(8,591
|
)
|
|||
Unearned ESOP Shares
|
|
|
|
||||||
Balance at beginning of year
|
(134
|
)
|
(189
|
)
|
(239
|
)
|
|||
Stock-based compensation and allocation of ESOP shares
|
45
|
|
55
|
|
50
|
|
|||
ESOP shares acquired
|
(2
|
)
|
—
|
|
—
|
|
|||
Balance at end of year
|
(91
|
)
|
(134
|
)
|
(189
|
)
|
|||
Treasury Stock
|
|
|
|
||||||
Balance at beginning of year
|
—
|
|
—
|
|
(1,659
|
)
|
|||
Common stock issued/sold
|
—
|
|
—
|
|
724
|
|
|||
Treasury stock purchases
|
(500
|
)
|
—
|
|
—
|
|
|||
Merger impact
|
—
|
|
—
|
|
935
|
|
|||
Balance at end of year
|
(500
|
)
|
—
|
|
—
|
|
|||
Dow Inc.'s stockholders' equity
|
13,541
|
|
32,483
|
|
31,515
|
|
|||
Noncontrolling Interests
|
553
|
|
1,138
|
|
1,186
|
|
|||
Total Equity
|
$
|
14,094
|
|
$
|
33,621
|
|
$
|
32,701
|
|
|
|
|
|
||||||
Dividends declared per share of common stock
|
$
|
2.10
|
|
$
|
—
|
|
$
|
1.38
|
|
(In millions) For the years ended Dec 31,
|
2019
|
2018
|
2017
|
||||||
Net sales
|
$
|
42,951
|
|
$
|
49,604
|
|
$
|
43,730
|
|
Cost of sales
|
36,657
|
|
41,074
|
|
36,350
|
|
|||
Research and development expenses
|
765
|
|
800
|
|
803
|
|
|||
Selling, general and administrative expenses
|
1,585
|
|
1,782
|
|
1,795
|
|
|||
Amortization of intangibles
|
419
|
|
469
|
|
400
|
|
|||
Restructuring, goodwill impairment and asset related charges - net
|
3,219
|
|
221
|
|
2,739
|
|
|||
Integration and separation costs
|
1,039
|
|
1,179
|
|
798
|
|
|||
Equity in earnings (losses) of nonconsolidated affiliates
|
(94
|
)
|
555
|
|
394
|
|
|||
Sundry income (expense) - net
|
573
|
|
96
|
|
(154
|
)
|
|||
Interest income
|
81
|
|
82
|
|
66
|
|
|||
Interest expense and amortization of debt discount
|
952
|
|
1,063
|
|
914
|
|
|||
Income (loss) from continuing operations before income taxes
|
(1,125
|
)
|
3,749
|
|
237
|
|
|||
Provision for income taxes on continuing operations
|
470
|
|
809
|
|
1,524
|
|
|||
Income (loss) from continuing operations, net of tax
|
(1,595
|
)
|
2,940
|
|
(1,287
|
)
|
|||
Income from discontinued operations, net of tax
|
445
|
|
1,835
|
|
1,882
|
|
|||
Net income (loss)
|
(1,150
|
)
|
4,775
|
|
595
|
|
|||
Net income attributable to noncontrolling interests
|
87
|
|
134
|
|
130
|
|
|||
Net income (loss) available for The Dow Chemical Company common stockholder
|
$
|
(1,237
|
)
|
$
|
4,641
|
|
$
|
465
|
|
(In millions) For the years ended Dec 31,
|
2019
|
2018
|
2017
|
||||||
Net income (loss)
|
$
|
(1,150
|
)
|
$
|
4,775
|
|
$
|
595
|
|
Other comprehensive income (loss), net of tax
|
|
|
|
||||||
Unrealized gains (losses) on investments
|
115
|
|
(67
|
)
|
(46
|
)
|
|||
Cumulative translation adjustments
|
(32
|
)
|
(225
|
)
|
900
|
|
|||
Pension and other postretirement benefit plans
|
(899
|
)
|
(40
|
)
|
391
|
|
|||
Derivative instruments
|
(338
|
)
|
75
|
|
(14
|
)
|
|||
Total other comprehensive income (loss)
|
(1,154
|
)
|
(257
|
)
|
1,231
|
|
|||
Comprehensive income (loss)
|
(2,304
|
)
|
4,518
|
|
1,826
|
|
|||
Comprehensive income attributable to noncontrolling interests, net of tax
|
99
|
|
97
|
|
172
|
|
|||
Comprehensive income (loss) attributable to The Dow Chemical Company
|
$
|
(2,403
|
)
|
$
|
4,421
|
|
$
|
1,654
|
|
(In millions, except share amounts) At Dec 31,
|
2019
|
2018
|
||||
Assets
|
|
|
||||
Current Assets
|
|
|
||||
Cash and cash equivalents (variable interest entities restricted - 2019: $37; 2018: $71)
|
$
|
2,367
|
|
$
|
2,724
|
|
Marketable securities
|
21
|
|
100
|
|
||
Accounts and notes receivable:
|
|
|
||||
Trade (net of allowance for doubtful receivables - 2019: $45; 2018: $42)
|
4,844
|
|
5,646
|
|
||
Other
|
2,716
|
|
3,389
|
|
||
Inventories
|
6,214
|
|
6,899
|
|
||
Other current assets
|
571
|
|
712
|
|
||
Assets of discontinued operations - current
|
—
|
|
19,900
|
|
||
Total current assets
|
16,733
|
|
39,370
|
|
||
Investments
|
|
|
||||
Investment in nonconsolidated affiliates
|
1,404
|
|
3,320
|
|
||
Other investments (investments carried at fair value - 2019: $1,584; 2018: $1,699)
|
2,588
|
|
2,646
|
|
||
Noncurrent receivables
|
1,011
|
|
360
|
|
||
Total investments
|
5,003
|
|
6,326
|
|
||
Property
|
|
|
||||
Property
|
54,910
|
|
53,984
|
|
||
Less accumulated depreciation
|
33,914
|
|
32,566
|
|
||
Net property (variable interest entities restricted - 2019: $330; 2018: $683)
|
20,996
|
|
21,418
|
|
||
Other Assets
|
|
|
||||
Goodwill
|
8,796
|
|
9,846
|
|
||
Other intangible assets (net of accumulated amortization - 2019: $3,886; 2018: $3,379)
|
3,759
|
|
4,225
|
|
||
Operating lease right-of-use assets
|
2,072
|
|
—
|
|
||
Deferred income tax assets
|
2,213
|
|
1,779
|
|
||
Deferred charges and other assets
|
818
|
|
735
|
|
||
Total other assets
|
17,658
|
|
16,585
|
|
||
Total Assets
|
$
|
60,390
|
|
$
|
83,699
|
|
Liabilities and Equity
|
|
|
||||
Current Liabilities
|
|
|
||||
Notes payable
|
$
|
586
|
|
$
|
298
|
|
Long-term debt due within one year
|
435
|
|
338
|
|
||
Accounts payable:
|
|
|
||||
Trade
|
3,889
|
|
4,456
|
|
||
Other
|
2,064
|
|
2,479
|
|
||
Operating lease liabilities - current
|
421
|
|
—
|
|
||
Income taxes payable
|
522
|
|
557
|
|
||
Accrued and other current liabilities
|
2,233
|
|
2,931
|
|
||
Liabilities of discontinued operations - current
|
—
|
|
4,488
|
|
||
Total current liabilities
|
10,150
|
|
15,547
|
|
||
Long-Term Debt (variable interest entities nonrecourse - 2019: $34; 2018: $75)
|
15,975
|
|
19,253
|
|
||
Other Noncurrent Liabilities
|
|
|
||||
Deferred income tax liabilities
|
347
|
|
501
|
|
||
Pension and other postretirement benefits - noncurrent
|
10,083
|
|
8,926
|
|
||
Asbestos-related liabilities - noncurrent
|
1,060
|
|
1,142
|
|
||
Operating lease liabilities - noncurrent
|
1,739
|
|
—
|
|
||
Other noncurrent obligations
|
6,174
|
|
4,709
|
|
||
Total other noncurrent liabilities
|
19,403
|
|
15,278
|
|
||
Stockholder's Equity
|
|
|
||||
Common stock (authorized and issued 100 shares of $0.01 par value each)
|
—
|
|
—
|
|
||
Additional paid-in capital
|
7,333
|
|
7,042
|
|
||
Retained earnings
|
17,313
|
|
35,460
|
|
||
Accumulated other comprehensive loss
|
(10,246
|
)
|
(9,885
|
)
|
||
Unearned ESOP shares
|
(91
|
)
|
(134
|
)
|
||
The Dow Chemical Company’s stockholder's equity
|
14,309
|
|
32,483
|
|
||
Noncontrolling interests
|
553
|
|
1,138
|
|
||
Total equity
|
14,862
|
|
33,621
|
|
||
Total Liabilities and Equity
|
$
|
60,390
|
|
$
|
83,699
|
|
(In millions) For the years ended Dec 31,
|
2019
|
2018
|
2017
|
||||||
Operating Activities
|
|
|
|
||||||
Net income (loss)
|
$
|
(1,150
|
)
|
$
|
4,775
|
|
$
|
595
|
|
Less: Income from discontinued operations, net of tax
|
445
|
|
1,835
|
|
1,882
|
|
|||
Income (loss) from continuing operations, net of tax
|
(1,595
|
)
|
2,940
|
|
(1,287
|
)
|
|||
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:
|
|
|
|
||||||
Depreciation and amortization
|
2,938
|
|
2,909
|
|
2,546
|
|
|||
Provision (credit) for deferred income tax
|
(228
|
)
|
(429
|
)
|
1,413
|
|
|||
Earnings of nonconsolidated affiliates less than dividends received
|
1,114
|
|
108
|
|
253
|
|
|||
Net periodic pension benefit cost
|
144
|
|
279
|
|
1,032
|
|
|||
Pension contributions
|
(261
|
)
|
(1,651
|
)
|
(1,672
|
)
|
|||
Net gain on sales of assets, businesses and investments
|
(81
|
)
|
(38
|
)
|
(419
|
)
|
|||
Restructuring, goodwill impairment and asset related charges - net
|
3,219
|
|
221
|
|
2,739
|
|
|||
Other net loss
|
213
|
|
415
|
|
451
|
|
|||
Changes in assets and liabilities, net of effects of acquired and divested companies:
|
|
|
|
|
|
|
|||
Accounts and notes receivable
|
1,253
|
|
(855
|
)
|
(11,431
|
)
|
|||
Inventories
|
668
|
|
(859
|
)
|
(891
|
)
|
|||
Accounts payable
|
(948
|
)
|
787
|
|
1,081
|
|
|||
Other assets and liabilities, net
|
(730
|
)
|
(731
|
)
|
(258
|
)
|
|||
Cash provided by (used for) operating activities - continuing operations
|
5,706
|
|
3,096
|
|
(6,443
|
)
|
|||
Cash provided by operating activities - discontinued operations
|
371
|
|
1,158
|
|
1,514
|
|
|||
Cash provided by (used for) operating activities
|
6,077
|
|
4,254
|
|
(4,929
|
)
|
|||
Investing Activities
|
|
|
|
|
|
|
|||
Capital expenditures
|
(1,961
|
)
|
(2,091
|
)
|
(2,807
|
)
|
|||
Investment in gas field developments
|
(76
|
)
|
(114
|
)
|
(121
|
)
|
|||
Purchases of previously leased assets
|
(9
|
)
|
(26
|
)
|
(187
|
)
|
|||
Proceeds from sales of property and businesses, net of cash divested
|
84
|
|
47
|
|
522
|
|
|||
Acquisitions of property and businesses, net of cash acquired
|
—
|
|
(20
|
)
|
47
|
|
|||
Investments in and loans to nonconsolidated affiliates
|
(638
|
)
|
(18
|
)
|
(749
|
)
|
|||
Distributions and loan repayments from nonconsolidated affiliates
|
89
|
|
55
|
|
69
|
|
|||
Purchases of investments
|
(899
|
)
|
(1,530
|
)
|
(642
|
)
|
|||
Proceeds from sales and maturities of investments
|
1,252
|
|
1,214
|
|
1,165
|
|
|||
Proceeds from interests in trade accounts receivable conduits
|
—
|
|
657
|
|
9,462
|
|
|||
Other investing activities, net
|
—
|
|
—
|
|
34
|
|
|||
Cash provided by (used for) investing activities - continuing operations
|
(2,158
|
)
|
(1,826
|
)
|
6,793
|
|
|||
Cash provided by (used for) investing activities - discontinued operations
|
(34
|
)
|
(369
|
)
|
725
|
|
|||
Cash provided by (used for) investing activities
|
(2,192
|
)
|
(2,195
|
)
|
7,518
|
|
|||
Financing Activities
|
|
|
|
|
|
|
|||
Changes in short-term notes payable
|
307
|
|
(178
|
)
|
268
|
|
|||
Proceeds from issuance of long-term debt
|
2,287
|
|
1,999
|
|
—
|
|
|||
Payments on long-term debt
|
(5,561
|
)
|
(3,054
|
)
|
(617
|
)
|
|||
Proceeds from issuance of parent company stock
|
93
|
|
112
|
|
66
|
|
|||
Proceeds from sales of common stock
|
—
|
|
—
|
|
423
|
|
|||
Transaction financing, debt issuance and other costs
|
(119
|
)
|
(70
|
)
|
—
|
|
|||
Employee taxes paid for share-based payment arrangements
|
(60
|
)
|
(77
|
)
|
(81
|
)
|
|||
Distributions to noncontrolling interests
|
(77
|
)
|
(135
|
)
|
(101
|
)
|
|||
Purchases of noncontrolling interests
|
(297
|
)
|
—
|
|
—
|
|
|||
Dividends paid to stockholders
|
—
|
|
—
|
|
(2,179
|
)
|
|||
Dividends paid to DowDuPont Inc.
|
(535
|
)
|
(3,711
|
)
|
(1,056
|
)
|
|||
Dividends paid to Dow Inc.
|
(201
|
)
|
—
|
|
—
|
|
|||
Settlements and transfers related to separation from DowDuPont Inc.
|
(61
|
)
|
(240
|
)
|
6
|
|
|||
Other financing activities, net
|
—
|
|
3
|
|
(4
|
)
|
|||
Cash used for financing activities - continuing operations
|
(4,224
|
)
|
(5,351
|
)
|
(3,275
|
)
|
|||
Cash used for financing activities - discontinued operations
|
(18
|
)
|
(53
|
)
|
(50
|
)
|
|||
Cash used for financing activities
|
(4,242
|
)
|
(5,404
|
)
|
(3,325
|
)
|
|||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(27
|
)
|
(99
|
)
|
320
|
|
|||
Summary
|
|
|
|
|
|
|
|||
Decrease in cash, cash equivalents and restricted cash
|
(384
|
)
|
(3,444
|
)
|
(416
|
)
|
|||
Cash, cash equivalents and restricted cash at beginning of year
|
2,764
|
|
6,208
|
|
6,624
|
|
|||
Cash, cash equivalents and restricted cash at end of year
|
$
|
2,380
|
|
$
|
2,764
|
|
$
|
6,208
|
|
Less: Restricted cash and cash equivalents, included in "Other current assets"
|
13
|
|
40
|
|
19
|
|
|||
Cash and cash equivalents at end of year
|
$
|
2,367
|
|
$
|
2,724
|
|
$
|
6,189
|
|
(In millions, except per share amounts) For the years ended Dec 31,
|
2019
|
2018
|
2017
|
||||||
Common Stock
|
|
|
|
||||||
Balance at beginning of year
|
$
|
—
|
|
$
|
—
|
|
$
|
3,107
|
|
Merger impact
|
—
|
|
—
|
|
(3,107
|
)
|
|||
Balance at end of year
|
—
|
|
—
|
|
—
|
|
|||
Additional Paid-in Capital
|
|
|
|
||||||
Balance at beginning of year
|
7,042
|
|
6,553
|
|
4,262
|
|
|||
Common stock issued / sold
|
—
|
|
—
|
|
423
|
|
|||
Issuance of parent company stock - Dow Inc.
|
65
|
|
—
|
|
—
|
|
|||
Issuance of parent company stock - DowDuPont Inc.
|
28
|
|
112
|
|
66
|
|
|||
Stock-based compensation and allocation of ESOP shares
|
235
|
|
377
|
|
(368
|
)
|
|||
Merger impact
|
—
|
|
—
|
|
2,172
|
|
|||
Other
|
(37
|
)
|
—
|
|
(2
|
)
|
|||
Balance at end of year
|
7,333
|
|
7,042
|
|
6,553
|
|
|||
Retained Earnings
|
|
|
|
||||||
Balance at beginning of year
|
35,460
|
|
33,742
|
|
30,338
|
|
|||
Adoption of accounting standards (Note 1)
|
(151
|
)
|
989
|
|
—
|
|
|||
Net income (loss) available for The Dow Chemical Company's common stockholder
|
(1,237
|
)
|
4,641
|
|
465
|
|
|||
Dividends to stockholders
|
—
|
|
—
|
|
(1,673
|
)
|
|||
Dividends to DowDuPont Inc.
|
(535
|
)
|
(3,711
|
)
|
(1,056
|
)
|
|||
Dividends to Dow Inc.
|
(201
|
)
|
—
|
|
—
|
|
|||
Common control transaction
|
(16,009
|
)
|
(182
|
)
|
5,693
|
|
|||
Other
|
(14
|
)
|
(19
|
)
|
(25
|
)
|
|||
Balance at end of year
|
17,313
|
|
35,460
|
|
33,742
|
|
|||
Accumulated Other Comprehensive Loss
|
|
|
|
||||||
Balance at beginning of year
|
(9,885
|
)
|
(8,591
|
)
|
(9,822
|
)
|
|||
Adoption of accounting standards (Note 1)
|
—
|
|
(1,037
|
)
|
—
|
|
|||
Other comprehensive income (loss)
|
(1,154
|
)
|
(257
|
)
|
1,231
|
|
|||
Common control transaction
|
793
|
|
—
|
|
—
|
|
|||
Balance at end of year
|
(10,246
|
)
|
(9,885
|
)
|
(8,591
|
)
|
|||
Unearned ESOP Shares
|
|
|
|
||||||
Balance at beginning of year
|
(134
|
)
|
(189
|
)
|
(239
|
)
|
|||
Stock-based compensation and allocation of ESOP shares
|
45
|
|
55
|
|
50
|
|
|||
ESOP shares acquired
|
(2
|
)
|
—
|
|
—
|
|
|||
Balance at end of year
|
(91
|
)
|
(134
|
)
|
(189
|
)
|
|||
Treasury Stock
|
|
|
|
||||||
Balance at beginning of year
|
—
|
|
—
|
|
(1,659
|
)
|
|||
Common stock issued/sold
|
—
|
|
—
|
|
724
|
|
|||
Merger impact
|
—
|
|
—
|
|
935
|
|
|||
Balance at end of year
|
—
|
|
—
|
|
—
|
|
|||
The Dow Chemical Company's stockholder's equity
|
14,309
|
|
32,483
|
|
31,515
|
|
|||
Noncontrolling Interests
|
553
|
|
1,138
|
|
1,186
|
|
|||
Total Equity
|
$
|
14,862
|
|
$
|
33,621
|
|
$
|
32,701
|
|
Note
|
|
Page
|
1
|
||
2
|
||
3
|
||
4
|
||
5
|
||
6
|
||
7
|
||
8
|
||
9
|
||
10
|
||
11
|
||
12
|
||
13
|
||
14
|
||
15
|
||
16
|
||
17
|
||
18
|
||
19
|
||
20
|
||
21
|
||
22
|
||
23
|
||
24
|
||
25
|
||
26
|
||
27
|
||
28
|
•
|
TDCC divested its global Ethylene Acrylic Acid copolymers and ionomers business ("EAA Business") to SK Global Chemical Co., Ltd., on September 1, 2017, as part of a divestiture commitment given to the European Commission ("EC") in connection with the EC's conditional approval of the Merger granted on March 27, 2017. See Note 6 for additional information on this transaction.
|
•
|
Historical DuPont divested its Cereal Broadleaf Herbicides and Chewing Insecticides portfolios as well as its Crop Protection research and development ("R&D") pipeline and organization (excluding seed treatment, nematicides, late-stage R&D programs and certain personnel needed to support marketed products and R&D programs that remained with Historical DuPont) (collectively, the "DuPont Divested Assets") to FMC Corporation ("FMC") on November 1, 2017, as part of the EC's conditional approval granted on March 27, 2017. Also on November 1, 2017, Historical DuPont completed its acquisition of FMC's Health and Nutrition business, excluding its Omega-3 products.
|
•
|
On May 2, 2017, TDCC and Historical DuPont announced that China's Ministry of Commerce ("MOFCOM") granted conditional regulatory approval for the companies' proposed merger of equals which included commitments already made to the EC including Historical DuPont's divestiture of the DuPont Divested Assets and TDCC's divestiture of the EAA Business. In addition, TDCC and Historical DuPont made commitments related to the supply and distribution in China of certain herbicide and insecticide ingredients and formulations for rice crops for five years after the closing of the Merger.
|
•
|
TDCC divested a select portion of Dow AgroSciences' corn seed business in Brazil to CITIC Agri Fund on November 30, 2017. The divestiture was part of the commitment given to Brazil's Administrative Council for Economic Defense ("CADE") in connection with the CADE's conditional approval of the Merger granted on May 17, 2017, which was incremental to commitments already made to the EC, China and regulatory agencies in other jurisdictions. This divestiture was included in discontinued operations of the Company.
|
•
|
On June 15, 2017, TDCC and Historical DuPont announced that a proposed agreement had been reached with the Antitrust Division of the United States Department of Justice that permitted the companies to proceed with the proposed merger of equals transaction. The proposed agreement was consistent with commitments already made to the EC.
|
Results of Operations of AgCo and SpecCo
|
2019 1
|
2018
|
2017
|
||||||
In millions
|
|||||||||
Net sales
|
$
|
2,953
|
|
$
|
12,187
|
|
$
|
12,337
|
|
Cost of sales
|
1,804
|
|
7,668
|
|
7,769
|
|
|||
Research and development expenses
|
175
|
|
761
|
|
854
|
|
|||
Selling, general and administrative expenses
|
262
|
|
1,108
|
|
1,143
|
|
|||
Amortization of intangibles
|
61
|
|
249
|
|
255
|
|
|||
Restructuring and asset related charges - net
|
78
|
|
411
|
|
376
|
|
|||
Integration and separation costs
|
—
|
|
—
|
|
18
|
|
|||
Equity in earnings of nonconsolidated affiliates
|
28
|
|
400
|
|
372
|
|
|||
Sundry income (expense) - net
|
(18
|
)
|
(13
|
)
|
245
|
|
|||
Interest income
|
3
|
|
26
|
|
40
|
|
|||
Interest expense and amortization of debt discount
|
7
|
|
56
|
|
61
|
|
|||
Income from discontinued operations before income taxes
|
$
|
579
|
|
$
|
2,347
|
|
$
|
2,518
|
|
Provision for income taxes
|
134
|
|
512
|
|
636
|
|
|||
Income from discontinued operations, net of tax
|
$
|
445
|
|
$
|
1,835
|
|
$
|
1,882
|
|
Carrying Values of AgCo and SpecCo 1
|
Dec 31, 2018
|
||
In millions
|
|||
Accounts and notes receivable - Trade
|
$
|
2,768
|
|
Accounts and notes receivable - Other
|
773
|
|
|
Inventories
|
2,826
|
|
|
Other current assets
|
151
|
|
|
Investment in nonconsolidated affiliates
|
612
|
|
|
Other investments
|
2
|
|
|
Noncurrent receivables
|
35
|
|
|
Net property
|
3,014
|
|
|
Goodwill
|
7,590
|
|
|
Other intangible assets
|
1,830
|
|
|
Deferred income tax assets
|
239
|
|
|
Deferred charges and other assets
|
60
|
|
|
Total assets of discontinued operations
|
$
|
19,900
|
|
Notes payable
|
$
|
7
|
|
Long-term debt due within one year
|
4
|
|
|
Accounts payable - Trade
|
1,118
|
|
|
Accounts payable - Other
|
868
|
|
|
Income taxes payable
|
234
|
|
|
Accrued and other current liabilities
|
716
|
|
|
Long-Term Debt
|
5
|
|
|
Deferred income tax liabilities
|
568
|
|
|
Pension and other postretirement benefits - noncurrent
|
306
|
|
|
Other noncurrent obligations
|
662
|
|
|
Total liabilities of discontinued operations
|
$
|
4,488
|
|
1.
|
Includes assets and liabilities of consolidated variable interest entities related to discontinued operations.
|
Net Trade Sales by Segment and Business
|
2019
|
2018
|
||||
In millions
|
||||||
Hydrocarbons & Energy
|
$
|
5,357
|
|
$
|
7,587
|
|
Packaging and Specialty Plastics
|
14,888
|
|
16,608
|
|
||
Packaging & Specialty Plastics
|
$
|
20,245
|
|
$
|
24,195
|
|
Industrial Solutions
|
$
|
4,310
|
|
$
|
4,812
|
|
Polyurethanes & Construction Chemicals
|
9,117
|
|
10,615
|
|
||
Others
|
13
|
|
20
|
|
||
Industrial Intermediates & Infrastructure
|
$
|
13,440
|
|
$
|
15,447
|
|
Coatings & Performance Monomers
|
$
|
3,517
|
|
$
|
3,979
|
|
Consumer Solutions
|
5,406
|
|
5,698
|
|
||
Performance Materials & Coatings
|
$
|
8,923
|
|
$
|
9,677
|
|
Corporate
|
$
|
343
|
|
$
|
285
|
|
Total
|
$
|
42,951
|
|
$
|
49,604
|
|
DowDuPont Synergy Program
|
Severance and Related Benefit Costs
|
Asset Write-downs and Write-offs
|
Costs Associated with Exit and Disposal Activities
|
Total
|
||||||||
In millions
|
||||||||||||
2017 restructuring charges
|
|
|
|
|
||||||||
Packaging & Specialty Plastics
|
$
|
—
|
|
$
|
33
|
|
$
|
3
|
|
$
|
36
|
|
Industrial Intermediates & Infrastructure
|
—
|
|
12
|
|
—
|
|
12
|
|
||||
Performance Materials & Coatings
|
—
|
|
9
|
|
2
|
|
11
|
|
||||
Corporate
|
307
|
|
33
|
|
—
|
|
340
|
|
||||
Total 2017 restructuring charges
|
$
|
307
|
|
$
|
87
|
|
$
|
5
|
|
$
|
399
|
|
Charges against the reserve
|
—
|
|
(87
|
)
|
—
|
|
(87
|
)
|
||||
Cash payments
|
(37
|
)
|
—
|
|
—
|
|
(37
|
)
|
||||
Reserve balance at Dec 31, 2017
|
$
|
270
|
|
$
|
—
|
|
$
|
5
|
|
$
|
275
|
|
2018 restructuring charges
|
|
|
|
|
||||||||
Packaging & Specialty Plastics
|
$
|
—
|
|
$
|
10
|
|
$
|
3
|
|
$
|
13
|
|
Industrial Intermediates & Infrastructure
|
—
|
|
—
|
|
11
|
|
11
|
|
||||
Performance Materials & Coatings
|
—
|
|
7
|
|
—
|
|
7
|
|
||||
Corporate
|
137
|
|
16
|
|
—
|
|
153
|
|
||||
Total 2018 restructuring charges
|
$
|
137
|
|
$
|
33
|
|
$
|
14
|
|
$
|
184
|
|
Charges against the reserve
|
—
|
|
(33
|
)
|
—
|
|
(33
|
)
|
||||
Cash payments
|
(197
|
)
|
—
|
|
(12
|
)
|
(209
|
)
|
||||
Reserve balance at Dec 31, 2018
|
$
|
210
|
|
$
|
—
|
|
$
|
7
|
|
$
|
217
|
|
2019 restructuring charges
|
|
|
|
|
||||||||
Packaging & Specialty Plastics
|
$
|
—
|
|
$
|
—
|
|
$
|
1
|
|
$
|
1
|
|
Industrial Intermediates & Infrastructure
|
—
|
|
2
|
|
5
|
|
7
|
|
||||
Performance Materials & Coatings
|
—
|
|
28
|
|
—
|
|
28
|
|
||||
Corporate
|
123
|
|
113
|
|
20
|
|
256
|
|
||||
Total 2019 restructuring charges
|
$
|
123
|
|
$
|
143
|
|
$
|
26
|
|
$
|
292
|
|
Charges against the reserve
|
—
|
|
(143
|
)
|
—
|
|
(143
|
)
|
||||
Cash payments
|
(279
|
)
|
—
|
|
(16
|
)
|
(295
|
)
|
||||
Reserve balance at Dec 31, 2019
|
$
|
54
|
|
$
|
—
|
|
$
|
17
|
|
$
|
71
|
|
•
|
The Company recorded a charge of $22 million for asset write-downs and write-offs aligned with an energy project, including the write-off of capital projects and other non-manufacturing assets in Packaging & Specialty Plastics.
|
•
|
The Company recorded a charge of $65 million for other miscellaneous asset write-downs and write-offs, including the shutdown of several small manufacturing facilities and the write-off of non-manufacturing assets, certain corporate facilities and data centers. The charge related to Packaging & Specialty Plastics ($11 million), Industrial Intermediates & Infrastructure ($12 million), Performance Materials & Coatings ($9 million) and Corporate ($33 million). These manufacturing facilities were shut down primarily by the end of 2019.
|
•
|
The Company recorded a charge of $33 million for other miscellaneous asset write-downs and write-offs, including the shutdown of several small manufacturing facilities and the write-off of leased, non-manufacturing assets and certain corporate facilities. The charge related to Packaging & Specialty Plastics ($10 million), Performance Materials & Coatings ($7 million) and Corporate ($16 million). These manufacturing facilities were shut down by the end of 2019.
|
•
|
The Company recorded a charge of $143 million for other miscellaneous asset write-downs and write-offs, including the shutdown of several small manufacturing facilities and the write-off of non-manufacturing assets and certain corporate facilities. The charge related to Industrial Intermediates & Infrastructure ($2 million), Performance Materials & Coatings ($28 million) and Corporate ($113 million). These manufacturing facilities will be shut down by the end of the second quarter of 2020.
|
Sundry Income (Expense) – Net
|
Dow Inc.
|
TDCC
|
||||||||||||||||
In millions
|
2019
|
2018
|
2017
|
2019
|
2018
|
2017
|
||||||||||||
Non-operating pension and other postretirement benefit plan net credits (costs) 1
|
$
|
205
|
|
$
|
123
|
|
$
|
(676
|
)
|
$
|
205
|
|
$
|
123
|
|
$
|
(676
|
)
|
Foreign exchange gains (losses)
|
91
|
|
(119
|
)
|
(72
|
)
|
77
|
|
(119
|
)
|
(72
|
)
|
||||||
Gain related to Nova ethylene asset matter 2
|
170
|
|
—
|
|
—
|
|
170
|
|
—
|
|
—
|
|
||||||
Dow Silicones breast implant liability adjustment 2
|
85
|
|
—
|
|
—
|
|
85
|
|
—
|
|
—
|
|
||||||
Gain (loss) on Dow Silicones commercial creditor matters 2
|
(50
|
)
|
—
|
|
33
|
|
(50
|
)
|
—
|
|
33
|
|
||||||
Indemnification and other transaction related costs 3
|
(69
|
)
|
—
|
|
—
|
|
6
|
|
—
|
|
—
|
|
||||||
Loss on early extinguishment of debt 4
|
(102
|
)
|
(54
|
)
|
—
|
|
(102
|
)
|
(54
|
)
|
—
|
|
||||||
Gain (loss) on divestitures 5
|
(49
|
)
|
—
|
|
7
|
|
2
|
|
—
|
|
7
|
|
||||||
Gain on sales of other assets and investments
|
67
|
|
18
|
|
117
|
|
67
|
|
18
|
|
117
|
|
||||||
Reclassification of cumulative translation adjustments
|
10
|
|
4
|
|
8
|
|
10
|
|
4
|
|
8
|
|
||||||
Post-closing adjustments related to Dow Silicones ownership restructure
|
—
|
|
(20
|
)
|
—
|
|
—
|
|
(20
|
)
|
—
|
|
||||||
Post-closing adjustments on divestiture of MEGlobal
|
—
|
|
20
|
|
—
|
|
—
|
|
20
|
|
—
|
|
||||||
Gain on divestiture of the EAA business 6
|
—
|
|
—
|
|
227
|
|
—
|
|
—
|
|
227
|
|
||||||
Gain related to Nova patent infringement award 2
|
—
|
|
—
|
|
137
|
|
—
|
|
—
|
|
137
|
|
||||||
Other - net
|
103
|
|
124
|
|
65
|
|
103
|
|
124
|
|
65
|
|
||||||
Total sundry income (expense) – net
|
$
|
461
|
|
$
|
96
|
|
$
|
(154
|
)
|
$
|
573
|
|
$
|
96
|
|
$
|
(154
|
)
|
1.
|
See Note 21 for additional information.
|
2.
|
See Note 17 for additional information.
|
3.
|
See Note 4 for additional information.
|
4.
|
See Note 16 for additional information.
|
5.
|
Primarily related to post-closing adjustments on previous divestitures.
|
6.
|
See Note 6 for additional information.
|
Supplemental Cash Flow Information
|
2019
|
2018
|
2017
|
||||||
In millions
|
|||||||||
Cash paid during year for:
|
|
|
|
||||||
Interest, net of amounts capitalized
|
$
|
993
|
|
$
|
1,143
|
|
$
|
1,115
|
|
Income taxes
|
$
|
881
|
|
$
|
1,193
|
|
$
|
1,259
|
|
Geographic Allocation of Income and Provision for Income Taxes on Continuing Operations
|
|
|
|
||||||
In millions
|
2019
|
2018
|
2017
|
||||||
Income (loss) from continuing operations before income taxes
|
|
|
|
||||||
Domestic 1
|
$
|
(1,196
|
)
|
$
|
745
|
|
$
|
(2,226
|
)
|
Foreign 2
|
(51
|
)
|
3,004
|
|
2,463
|
|
|||
Income (loss) from continuing operations before income taxes
|
$
|
(1,247
|
)
|
$
|
3,749
|
|
$
|
237
|
|
Current tax expense (benefit)
|
|
|
|
||||||
Federal
|
$
|
(287
|
)
|
$
|
324
|
|
$
|
(864
|
)
|
State and local
|
25
|
|
13
|
|
4
|
|
|||
Foreign
|
960
|
|
901
|
|
971
|
|
|||
Total current tax expense
|
$
|
698
|
|
$
|
1,238
|
|
$
|
111
|
|
Deferred tax expense (benefit)
|
|
|
|
||||||
Federal 3
|
$
|
52
|
|
$
|
(318
|
)
|
$
|
1,499
|
|
State and local
|
19
|
|
(32
|
)
|
85
|
|
|||
Foreign
|
(299
|
)
|
(79
|
)
|
(171
|
)
|
|||
Total deferred tax expense (benefit)
|
$
|
(228
|
)
|
$
|
(429
|
)
|
$
|
1,413
|
|
Provision for income taxes on continuing operations
|
$
|
470
|
|
$
|
809
|
|
$
|
1,524
|
|
Income (loss) from continuing operations, net of tax
|
$
|
(1,717
|
)
|
$
|
2,940
|
|
$
|
(1,287
|
)
|
1.
|
The 2019 amount includes approximately $1.4 billion of expense related to goodwill impairment and environmental matters. The 2017 amount includes approximately $1.4 billion of expense related to goodwill impairment and litigation settlements. See Notes 14 and 17 for additional information.
|
2.
|
The 2019 amount includes approximately $1.8 billion of expense related to Sadara related charges. See Note 13 for additional information.
|
3.
|
The 2018 and 2017 amounts reflect the tax impact of The Act which accelerated the utilization of tax credits and required remeasurement of all U.S. deferred tax assets and liabilities.
|
1.
|
Includes the impact of valuation allowances in foreign jurisdictions.
|
2.
|
See Note 6 for additional information.
|
3.
|
Includes the impact of tax reform in Switzerland and the U.S.
|
4.
|
Primarily related to the favorable impact of the restoration of tax basis in assets, driven by a recent court judgment that did not involve the Company.
|
5.
|
See Note 13 for additional information.
|
6.
|
See Note 14 for additional information.
|
•
|
As a result of The Act, the Company remeasured its U.S. federal deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21 percent. The Company recorded a cumulative benefit of $81 million ($79 million benefit in 2018 and $2 million benefit in 2017) to “Provision for income taxes on continuing operations” in the consolidated statements of income with respect to the remeasurement of the Company's deferred tax balances.
|
•
|
The Act required a mandatory deemed repatriation of post-1986 undistributed foreign earnings and profits, which resulted in a one-time transition tax. The Company recorded a cumulative charge of $789 million ($85 million benefit in 2018 and $874 million charge in 2017) to "Provision for income taxes on continuing operations" in the consolidated statements of income with respect to the one-time transition tax.
|
•
|
In 2018, the Company recorded an indirect impact of The Act related to prepaid tax on the intercompany sale of inventory. The amount recorded related to inventory was a charge of $38 million to "Provision for income taxes on continuing operations" in the consolidated statements of income.
|
•
|
For tax years beginning after December 31, 2017, The Act introduced new provisions for U.S. taxation of certain global intangible low-taxed income (“GILTI”). The Company has made the policy election to record any liability associated with GILTI in the period in which it is incurred.
|
Deferred Tax Balances at Dec 31
|
2019
|
2018
|
||||||||||
In millions
|
Assets
|
Liabilities
|
Assets
|
Liabilities
|
||||||||
Property
|
$
|
494
|
|
$
|
3,177
|
|
$
|
406
|
|
$
|
2,519
|
|
Tax loss and credit carryforwards
|
1,920
|
|
—
|
|
2,079
|
|
—
|
|
||||
Postretirement benefit obligations
|
2,432
|
|
210
|
|
2,115
|
|
143
|
|
||||
Other accruals and reserves
|
1,678
|
|
43
|
|
1,220
|
|
151
|
|
||||
Intangibles
|
120
|
|
688
|
|
157
|
|
954
|
|
||||
Inventory
|
28
|
|
234
|
|
53
|
|
239
|
|
||||
Investments
|
125
|
|
48
|
|
190
|
|
84
|
|
||||
Other – net
|
851
|
|
120
|
|
620
|
|
247
|
|
||||
Subtotal
|
$
|
7,648
|
|
$
|
4,520
|
|
$
|
6,840
|
|
$
|
4,337
|
|
Valuation allowances
|
(1,262
|
)
|
—
|
|
(1,225
|
)
|
—
|
|
||||
Total
|
$
|
6,386
|
|
$
|
4,520
|
|
$
|
5,615
|
|
$
|
4,337
|
|
Operating Loss and Tax Credit Carryforwards at Dec 31
|
2019
|
2018
|
||||
In millions
|
Assets
|
Assets
|
||||
Operating loss carryforwards
|
|
|
||||
Expire within 5 years
|
$
|
263
|
|
$
|
245
|
|
Expire after 5 years or indefinite expiration
|
1,133
|
|
1,196
|
|
||
Total operating loss carryforwards
|
$
|
1,396
|
|
$
|
1,441
|
|
Tax credit carryforwards
|
|
|
||||
Expire within 5 years
|
$
|
32
|
|
$
|
32
|
|
Expire after 5 years or indefinite expiration
|
492
|
|
606
|
|
||
Total tax credit carryforwards
|
$
|
524
|
|
$
|
638
|
|
Total operating loss and tax credit carryforwards
|
$
|
1,920
|
|
$
|
2,079
|
|
Total Gross Unrecognized Tax Benefits
|
|
|
|
||||||
In millions
|
2019
|
2018
|
2017
|
||||||
Total unrecognized tax benefits at Jan 1
|
$
|
314
|
|
$
|
255
|
|
$
|
231
|
|
Decreases related to positions taken on items from prior years
|
(1
|
)
|
(8
|
)
|
(4
|
)
|
|||
Increases related to positions taken on items from prior years
|
16
|
|
68
|
|
37
|
|
|||
Increases related to positions taken in the current year
|
10
|
|
2
|
|
12
|
|
|||
Settlement of uncertain tax positions with tax authorities
|
(19
|
)
|
—
|
|
(12
|
)
|
|||
Decreases due to expiration of statutes of limitations
|
—
|
|
(1
|
)
|
(9
|
)
|
|||
Foreign exchange gain
|
(1
|
)
|
(2
|
)
|
—
|
|
|||
Total unrecognized tax benefits at Dec 31
|
$
|
319
|
|
$
|
314
|
|
$
|
255
|
|
Total unrecognized tax benefits that, if recognized, would impact the effective tax rate
|
$
|
234
|
|
$
|
235
|
|
$
|
245
|
|
Total amount of interest and penalties (benefit) recognized in "Provision for income taxes on continuing operations"
|
$
|
(11
|
)
|
$
|
(12
|
)
|
$
|
2
|
|
Total accrual for interest and penalties recognized in the consolidated balance sheets
|
$
|
100
|
|
$
|
109
|
|
$
|
110
|
|
Tax Years Subject to Examination by Major Tax Jurisdiction at Dec 31, 2019
|
Earliest Open Year
|
Jurisdiction
|
|
Argentina
|
2013
|
Brazil
|
2006
|
Canada
|
2012
|
China
|
2009
|
Germany
|
2010
|
Italy
|
2015
|
The Netherlands
|
2016
|
Switzerland
|
2016
|
United States:
|
|
Federal income tax
|
2004
|
State and local income tax
|
2004
|
Net Income (Loss) for Earnings Per Share Calculations
|
2019
|
2018
|
2017
|
||||||
In millions
|
|||||||||
Income (loss) from continuing operations, net of tax
|
$
|
(1,717
|
)
|
$
|
2,940
|
|
$
|
(1,287
|
)
|
Net income attributable to noncontrolling interests - continuing operations
|
(74
|
)
|
(102
|
)
|
(102
|
)
|
|||
Net income attributable to participating securities - continuing operations 1
|
(6
|
)
|
—
|
|
(8
|
)
|
|||
Income (loss) from continuing operations attributable to common stockholders
|
$
|
(1,797
|
)
|
$
|
2,838
|
|
$
|
(1,397
|
)
|
Income from discontinued operations, net of tax
|
$
|
445
|
|
$
|
1,835
|
|
$
|
1,882
|
|
Net income attributable to noncontrolling interests - discontinued operations
|
(13
|
)
|
(32
|
)
|
(28
|
)
|
|||
Net income attributable to participating securities - discontinued operations 1
|
—
|
|
—
|
|
(6
|
)
|
|||
Income from discontinued operations attributable to common stockholders
|
$
|
432
|
|
$
|
1,803
|
|
$
|
1,848
|
|
Net income (loss) attributable to common stockholders
|
$
|
(1,365
|
)
|
$
|
4,641
|
|
$
|
451
|
|
Earnings Per Share Calculations - Basic
|
2019
|
2018
|
2017
|
||||||
Dollars per share
|
|||||||||
Income (loss) from continuing operations attributable to common stockholders
|
$
|
(2.42
|
)
|
$
|
3.80
|
|
$
|
(1.88
|
)
|
Income from discontinued operations, net of tax
|
0.58
|
|
2.41
|
|
2.48
|
|
|||
Net income (loss) attributable to common stockholders
|
$
|
(1.84
|
)
|
$
|
6.21
|
|
$
|
0.60
|
|
Earnings Per Share Calculations - Diluted
|
2019
|
2018
|
2017
|
||||||
Dollars per share
|
|||||||||
Income (loss) from continuing operations attributable to common stockholders
|
$
|
(2.42
|
)
|
$
|
3.80
|
|
$
|
(1.88
|
)
|
Income from discontinued operations, net of tax
|
0.58
|
|
2.41
|
|
2.48
|
|
|||
Net income (loss) attributable to common stockholders
|
$
|
(1.84
|
)
|
$
|
6.21
|
|
$
|
0.60
|
|
Share Count Information
|
2019
|
2018
|
2017
|
|||
Shares in millions
|
||||||
Weighted-average common shares - basic 2, 3
|
742.5
|
|
747.2
|
|
744.8
|
|
Plus dilutive effect of equity compensation plans
|
—
|
|
—
|
|
—
|
|
Weighted-average common shares - diluted 2, 3, 4
|
742.5
|
|
747.2
|
|
744.8
|
|
Stock options and restricted stock units excluded from EPS calculations 5
|
20.8
|
|
—
|
|
1.1
|
|
1.
|
Restricted stock units (formerly termed deferred stock) are considered participating securities due to the Company's practice of paying dividend equivalents on unvested shares.
|
2.
|
Share amounts for the year ended December 31, 2018 were based on 2,246.3 million DowDuPont common shares outstanding as of the Record Date for the April 1, 2019 distribution, less 4.6 million Employee Stock Ownership Plan ("ESOP") shares that had not been released and were not considered outstanding, adjusted for the Distribution Ratio. There was no dilutive effect for the year ended December 31, 2018 as the Company did not engage in activities giving rise to dilution.
|
3.
|
Share amounts for the year ended December 31, 2017 were based on 2,246.3 million DowDuPont common shares outstanding as of the Record Date for the April 1, 2019 distribution, less 4.6 million ESOP shares that had not been released and were not considered outstanding, adjusted for the Distribution Ratio and further adjusted by 2.4 million shares for the effect of TDCC basic common shares outstanding during the pre-Merger period. The year ended December 31, 2017 reflected a loss from continuing operations, and as such, the basic share count was used for purposes of calculating earnings per share on a diluted basis.
|
4.
|
The year ended December 31, 2019 reflected a loss from continuing operations, and as such, the basic share count was used for purposes of calculating earnings per share on a diluted basis.
|
5.
|
These outstanding options to purchase shares of common stock and restricted stock units were excluded from the calculation of diluted earnings per share because the effect of including them would have been antidilutive. For the year ended December 31, 2018, the Company did not engage in activities giving rise to dilution.
|
Inventories at Dec 31
|
|
|
||||
In millions
|
2019
|
2018
|
||||
Finished goods
|
$
|
3,505
|
|
$
|
4,313
|
|
Work in process
|
1,122
|
|
1,335
|
|
||
Raw materials
|
628
|
|
674
|
|
||
Supplies
|
845
|
|
826
|
|
||
Total
|
$
|
6,100
|
|
$
|
7,148
|
|
Adjustment of inventories to a LIFO basis
|
114
|
|
(249
|
)
|
||
Total inventories
|
$
|
6,214
|
|
$
|
6,899
|
|
Property at Dec 31
|
Estimated Useful
Lives (Years)
|
2019
|
2018
|
|||||
In millions
|
||||||||
Land and land improvements
|
0-25
|
|
$
|
2,177
|
|
$
|
2,059
|
|
Buildings
|
5-50
|
|
4,742
|
|
4,745
|
|
||
Machinery and equipment
|
3-25
|
|
40,651
|
|
40,250
|
|
||
Other property
|
3-50
|
|
5,354
|
|
5,084
|
|
||
Construction in progress
|
—
|
|
1,986
|
|
1,846
|
|
||
Total property
|
|
$
|
54,910
|
|
$
|
53,984
|
|
In millions
|
2019
|
2018
|
2017
|
||||||
Depreciation expense
|
$
|
2,156
|
|
$
|
2,174
|
|
$
|
1,955
|
|
Capitalized interest
|
$
|
80
|
|
$
|
88
|
|
$
|
240
|
|
Investments in Nonconsolidated Affiliates at Dec 31
|
2019 1
|
2018 1
|
||||
In millions
|
||||||
Investment in nonconsolidated affiliates
|
$
|
1,404
|
|
$
|
3,320
|
|
Other noncurrent obligations
|
(80
|
)
|
—
|
|
||
Net investment in nonconsolidated affiliates
|
$
|
1,324
|
|
$
|
3,320
|
|
1.
|
The carrying amount of the Company’s investments in nonconsolidated affiliates at December 31, 2019, was $51 million less than its share of the investees’ net assets, ($39 million less at December 31, 2018), exclusive of additional differences relating to EQUATE Petrochemical Company K.S.C.C. ("EQUATE"), Sadara and AgroFresh Solutions Inc. ("AFSI"), which are discussed separately in the disclosures that follow.
|
Dividends Received from Nonconsolidated Affiliates
|
2019
|
2018
|
2017 1
|
||||||
In millions
|
|||||||||
Dividends from nonconsolidated affiliates
|
$
|
1,020
|
|
$
|
663
|
|
$
|
654
|
|
1.
|
Includes a non-cash dividend of $7 million.
|
Principal Nonconsolidated Affiliates at Dec 31
|
Country
|
Ownership Interest
|
|||||
|
2019
|
2018
|
2017
|
||||
EQUATE Petrochemical Company K.S.C.C.
|
Kuwait
|
42.5
|
%
|
42.5
|
%
|
42.5
|
%
|
The Kuwait Olefins Company K.S.C.C.
|
Kuwait
|
42.5
|
%
|
42.5
|
%
|
42.5
|
%
|
The Kuwait Styrene Company K.S.C.C.
|
Kuwait
|
42.5
|
%
|
42.5
|
%
|
42.5
|
%
|
Map Ta Phut Olefins Company Limited 1
|
Thailand
|
32.77
|
%
|
32.77
|
%
|
32.77
|
%
|
Sadara Chemical Company
|
Saudi Arabia
|
35
|
%
|
35
|
%
|
35
|
%
|
The SCG-Dow Group:
|
|
|
|
|
|||
Siam Polyethylene Company Limited
|
Thailand
|
50
|
%
|
50
|
%
|
50
|
%
|
Siam Polystyrene Company Limited
|
Thailand
|
50
|
%
|
50
|
%
|
50
|
%
|
Siam Styrene Monomer Company Limited
|
Thailand
|
50
|
%
|
50
|
%
|
50
|
%
|
Siam Synthetic Latex Company Limited
|
Thailand
|
50
|
%
|
50
|
%
|
50
|
%
|
1.
|
The Company's effective ownership of Map Ta Phut Olefins Company Limited ("Map Ta Phut") is 32.77 percent, of which the Company directly owns 20.27 percent and indirectly owns 12.5 percent through its equity interest in Siam Polyethylene Company Limited.
|
Equity Earnings from Principal Nonconsolidated Affiliates
|
2019
|
2018
|
2017
|
||||||
In millions
|
|||||||||
Equity in earnings of principal nonconsolidated affiliates
|
$
|
21
|
|
$
|
561
|
|
$
|
347
|
|
Summarized Income Statement Information 1
|
2019
|
2018
|
2017
|
||||||
In millions
|
|||||||||
Sales
|
$
|
10,905
|
|
$
|
14,461
|
|
$
|
11,629
|
|
Gross profit
|
$
|
644
|
|
$
|
2,320
|
|
$
|
1,992
|
|
Income (loss) from continuing operations, net of tax
|
$
|
(277
|
)
|
$
|
1,173
|
|
$
|
689
|
|
1.
|
The results in this table reflect purchase and sale activity between certain principal nonconsolidated affiliates and the Company, as previously discussed in the "Transactions with Nonconsolidated Affiliates" section.
|
Goodwill
|
Packaging & Specialty Plastics
|
Industrial Intermediates & Infrastructure
|
Performance Materials & Coatings
|
Total
|
||||||||
In millions
|
||||||||||||
Balance at Jan 1, 2018
|
$
|
5,043
|
|
$
|
1,101
|
|
$
|
3,689
|
|
$
|
9,833
|
|
Foreign currency impact
|
(24
|
)
|
(6
|
)
|
(39
|
)
|
(69
|
)
|
||||
Measurement period adjustment - ECP 1
|
82
|
|
—
|
|
—
|
|
82
|
|
||||
Balance at Dec 31, 2018
|
$
|
5,101
|
|
$
|
1,095
|
|
$
|
3,650
|
|
$
|
9,846
|
|
Foreign currency impact
|
8
|
|
6
|
|
(24
|
)
|
(10
|
)
|
||||
Goodwill impairment
|
—
|
|
—
|
|
(1,039
|
)
|
(1,039
|
)
|
||||
Other
|
—
|
|
(1
|
)
|
—
|
|
(1
|
)
|
||||
Balance at Dec 31, 2019
|
$
|
5,109
|
|
$
|
1,100
|
|
$
|
2,587
|
|
$
|
8,796
|
|
Other Intangible Assets at Dec 31
|
2019
|
2018
|
||||||||||||||||
In millions
|
Gross
Carrying
Amount
|
Accum
Amort
|
Net
|
Gross
Carrying
Amount
|
Accum
Amort
|
Net
|
||||||||||||
Intangible assets with finite lives:
|
|
|
|
|
|
|
||||||||||||
Developed technology
|
$
|
2,634
|
|
$
|
(1,467
|
)
|
$
|
1,167
|
|
$
|
2,634
|
|
$
|
(1,252
|
)
|
$
|
1,382
|
|
Software
|
1,449
|
|
(893
|
)
|
556
|
|
1,404
|
|
(805
|
)
|
599
|
|
||||||
Trademarks/tradenames
|
352
|
|
(342
|
)
|
10
|
|
352
|
|
(329
|
)
|
23
|
|
||||||
Customer-related
|
3,207
|
|
(1,184
|
)
|
2,023
|
|
3,211
|
|
(993
|
)
|
2,218
|
|
||||||
Total other intangible assets, finite lives
|
$
|
7,642
|
|
$
|
(3,886
|
)
|
$
|
3,756
|
|
$
|
7,601
|
|
$
|
(3,379
|
)
|
$
|
4,222
|
|
In-process research and development
|
3
|
|
—
|
|
3
|
|
3
|
|
—
|
|
3
|
|
||||||
Total other intangible assets
|
$
|
7,645
|
|
$
|
(3,886
|
)
|
$
|
3,759
|
|
$
|
7,604
|
|
$
|
(3,379
|
)
|
$
|
4,225
|
|
Amortization Expense from Continuing Operations
|
2019
|
2018
|
2017
|
||||||
In millions
|
|||||||||
Other intangible assets, excluding software
|
$
|
419
|
|
$
|
469
|
|
$
|
400
|
|
Software 1
|
$
|
96
|
|
$
|
93
|
|
$
|
82
|
|
1.
|
Included in "Cost of sales" in the consolidated statements of income.
|
Estimated Amortization Expense for Next Five Years
|
|||
In millions
|
|||
2020
|
$
|
492
|
|
2021
|
$
|
472
|
|
2022
|
$
|
411
|
|
2023
|
$
|
380
|
|
2024
|
$
|
364
|
|
Cash Proceeds
|
|
|
||||
In millions
|
2018
|
2017
|
||||
Sale of receivables
|
$
|
—
|
|
$
|
1
|
|
Collections reinvested in revolving receivables
|
$
|
—
|
|
$
|
21,293
|
|
Interests in conduits 1
|
$
|
657
|
|
$
|
9,462
|
|
1.
|
Presented in "Investing Activities" in the consolidated statements of cash flows.
|
Notes Payable at Dec 31
|
|
|
||||
In millions
|
2019
|
2018
|
||||
Commercial paper
|
$
|
151
|
|
$
|
10
|
|
Notes payable to banks and other lenders
|
435
|
|
288
|
|
||
Total notes payable
|
$
|
586
|
|
$
|
298
|
|
Year-end average interest rates
|
6.30
|
%
|
8.28
|
%
|
Long-Term Debt at Dec 31
|
2019 Average Rate
|
2019
|
2018
Average
Rate
|
2018
|
||||||
In millions
|
||||||||||
Promissory notes and debentures:
|
|
|
|
|
||||||
Final maturity 2019
|
—
|
%
|
$
|
—
|
|
9.80
|
%
|
$
|
7
|
|
Final maturity 2020
|
8.44
|
%
|
76
|
|
4.46
|
%
|
1,547
|
|
||
Final maturity 2021
|
8.95
|
%
|
174
|
|
4.71
|
%
|
1,424
|
|
||
Final maturity 2022
|
3.50
|
%
|
1,372
|
|
3.50
|
%
|
1,373
|
|
||
Final maturity 2023
|
7.64
|
%
|
325
|
|
7.64
|
%
|
325
|
|
||
Final maturity 2024
|
3.37
|
%
|
1,397
|
|
3.50
|
%
|
896
|
|
||
Final maturity 2025 and thereafter
|
5.70
|
%
|
9,482
|
|
5.98
|
%
|
7,963
|
|
||
Other facilities:
|
|
|
|
|
||||||
U.S. dollar loans, various rates and maturities
|
2.55
|
%
|
2,000
|
|
3.59
|
%
|
4,533
|
|
||
Foreign currency loans, various rates and maturities
|
3.26
|
%
|
592
|
|
3.20
|
%
|
708
|
|
||
InterNotes®, varying maturities through 2049
|
3.44
|
%
|
928
|
|
3.26
|
%
|
778
|
|
||
Finance lease obligations 1
|
|
395
|
|
|
371
|
|
||||
Unamortized debt discount and issuance costs
|
|
(331
|
)
|
|
(334
|
)
|
||||
Long-term debt due within one year 2
|
|
(435
|
)
|
|
(338
|
)
|
||||
Long-term debt
|
|
|
$
|
15,975
|
|
|
|
$
|
19,253
|
|
1.
|
See Note 18 for additional information.
|
2.
|
Presented net of current portion of unamortized debt issuance costs.
|
Maturities of Long-Term Debt for Next Five Years at Dec 31, 2019
|
|||
In millions
|
|||
2020
|
$
|
435
|
|
2021
|
$
|
511
|
|
2022
|
$
|
1,513
|
|
2023 1
|
$
|
2,508
|
|
2024
|
$
|
1,528
|
|
1.
|
Assumes the option to extend maturity to 2023 will be exercised for the $2 billion Dow Silicones Term Loan Facility.
|
Committed and Available Credit Facilities at Dec 31, 2019
|
||||||||
In millions
|
Committed Credit
|
Credit Available
|
Maturity Date
|
Interest
|
||||
Five Year Competitive Advance and Revolving Credit Facility
|
$
|
5,000
|
|
$
|
5,000
|
|
October 2024
|
Floating rate
|
Term Loan Facility 1
|
2,000
|
|
—
|
|
September 2023
|
Floating rate
|
||
European Securitization Facility 2
|
448
|
|
448
|
|
October 2020
|
Floating rate
|
||
Bilateral Revolving Credit Facility
|
100
|
|
100
|
|
March 2020
|
Floating rate
|
||
Bilateral Revolving Credit Facility
|
100
|
|
100
|
|
March 2020
|
Floating rate
|
||
Bilateral Revolving Credit Facility
|
280
|
|
280
|
|
March 2020
|
Floating rate
|
||
Bilateral Revolving Credit Facility
|
200
|
|
200
|
|
May 2020
|
Floating rate
|
||
Bilateral Revolving Credit Facility
|
200
|
|
200
|
|
July 2020
|
Floating rate
|
||
Bilateral Revolving Credit Facility
|
100
|
|
100
|
|
August 2020
|
Floating rate
|
||
Bilateral Revolving Credit Facility
|
300
|
|
300
|
|
December 2020
|
Floating rate
|
||
Bilateral Revolving Credit Facility
|
300
|
|
300
|
|
December 2021
|
Floating rate
|
||
Bilateral Revolving Credit Facility
|
100
|
|
100
|
|
October 2024
|
Floating rate
|
||
Bilateral Revolving Credit Facility
|
100
|
|
100
|
|
October 2024
|
Floating rate
|
||
Bilateral Revolving Credit Facility
|
200
|
|
200
|
|
November 2024
|
Floating rate
|
||
Total Committed and Available Credit Facilities
|
$
|
9,428
|
|
$
|
7,428
|
|
|
|
1.
|
Assumes the option to extend the Term Loan Facility will be exercised.
|
2.
|
Equivalent to Euro 400 million.
|
(a)
|
the obligation to maintain the ratio of TDCC’s consolidated indebtedness to consolidated capitalization at no greater than 0.65 to 1.00 at any time the aggregate outstanding amount of loans under the Five Year Competitive Advance and Revolving Credit Facility Agreement ("Revolving Credit Agreement") dated October 30, 2018, equals or exceeds $500 million,
|
(b)
|
a default if TDCC or an applicable subsidiary fails to make any payment, including principal, premium or interest, under the applicable agreement on other indebtedness of, or guaranteed by, TDCC or such applicable subsidiary in an aggregate amount of $100 million or more when due, or any other default or other event under the applicable agreement with respect to such indebtedness occurs which permits or results in the acceleration of $400 million or more in the aggregate of principal, and
|
(c)
|
a default if TDCC or any applicable subsidiary fails to discharge or stay within 60 days after the entry of a final judgment against TDCC or such applicable subsidiary of more than $400 million.
|
Guarantees
|
Dec 31, 2019
|
Dec 31, 2018
|
||||||||||||
In millions
|
Final
Expiration
|
Maximum
Future Payments
|
Recorded
Liability
|
Final
Expiration
|
Maximum
Future Payments
|
Recorded
Liability
|
||||||||
Guarantees
|
2023
|
$
|
3,952
|
|
$
|
10
|
|
2023
|
$
|
4,273
|
|
$
|
22
|
|
Asset Retirement Obligations
|
2019
|
2018
|
||||
In millions
|
||||||
Balance at Jan 1
|
$
|
109
|
|
$
|
100
|
|
Additional accruals
|
10
|
|
9
|
|
||
Liabilities settled
|
(7
|
)
|
(3
|
)
|
||
Accretion expense
|
2
|
|
3
|
|
||
Revisions in estimated cash flows
|
3
|
|
—
|
|
||
Other
|
(13
|
)
|
—
|
|
||
Balance at Dec 31
|
$
|
104
|
|
$
|
109
|
|
Lease Cost
|
Year Ended Dec 31, 2019
|
||
In millions
|
|||
Operating lease cost
|
$
|
532
|
|
Finance lease cost
|
|
||
Amortization of right-of-use assets - finance
|
$
|
39
|
|
Interest on lease liabilities - finance
|
25
|
|
|
Total finance lease cost
|
$
|
64
|
|
Short-term lease cost
|
$
|
204
|
|
Variable lease cost
|
198
|
|
|
Sublease income
|
(4
|
)
|
|
Total lease cost
|
$
|
994
|
|
Other Lease Information
|
Year Ended Dec 31, 2019
|
||
In millions
|
|||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
||
Operating cash flows for operating leases
|
$
|
544
|
|
Operating cash flows for finance leases
|
$
|
25
|
|
Financing cash flows for finance leases
|
$
|
34
|
|
Lease Position
|
Balance Sheet Classification
|
Dec 31, 2019
|
||
In millions
|
||||
Right-of-use assets obtained in exchange for lease obligations:
|
|
|
||
Operating leases 1
|
|
$
|
2,476
|
|
Finance leases
|
|
$
|
89
|
|
Assets
|
|
|
||
Operating lease assets
|
Operating lease right-of-use assets
|
$
|
2,072
|
|
Finance lease assets
|
Property
|
486
|
|
|
Finance lease amortization
|
Accumulated depreciation
|
(167
|
)
|
|
Total lease assets
|
|
$
|
2,391
|
|
Liabilities
|
|
|
||
Current
|
|
|
||
Operating
|
Operating lease liabilities - current
|
$
|
421
|
|
Finance
|
Long-term debt due within one year
|
32
|
|
|
Noncurrent
|
|
|
||
Operating
|
Operating lease liabilities - noncurrent
|
1,739
|
|
|
Finance
|
Long-Term Debt
|
363
|
|
|
Total lease liabilities
|
|
$
|
2,555
|
|
1.
|
Includes $2.3 billion related to the adoption of Topic 842. See Note 2 for additional information.
|
Lease Term and Discount Rate
|
Dec 31, 2019
|
|
Weighted-average remaining lease term
|
|
|
Operating leases
|
8.0 years
|
|
Finance leases
|
12.3 years
|
|
Weighted-average discount rate
|
|
|
Operating leases
|
4.09
|
%
|
Finance leases
|
6.28
|
%
|
Minimum Lease Commitments at Dec 31, 2018
|
|
||
In millions
|
|
||
2019
|
$
|
366
|
|
2020
|
329
|
|
|
2021
|
296
|
|
|
2022
|
269
|
|
|
2023
|
227
|
|
|
2024 and thereafter
|
855
|
|
|
Total
|
$
|
2,342
|
|
Lease Guarantees
|
Dec 31, 2019
|
Dec 31, 2018
|
||||||||||||
In millions
|
Final Expiration
|
Maximum Future Payments
|
Recorded Liability
|
Final Expiration
|
Maximum Future Payments
|
Recorded Liability
|
||||||||
Residual value guarantees
|
2028
|
$
|
792
|
|
$
|
—
|
|
2028
|
$
|
885
|
|
$
|
130
|
|
Treasury Shares Issued Under Stock-Based Compensation Programs
|
2019 1
|
2018
|
2017 2
|
||
To employees and non-employee directors
|
—
|
|
N/A
|
14,194,282
|
|
1.
|
Reflects Dow Inc. activity subsequent to the separation from DowDuPont.
|
2.
|
Reflects TDCC activity prior to the Merger.
|
Shares of Dow Inc. Common Stock
|
Issued
|
Held in Treasury
|
||
|
||||
Balance at Jan 1, 2018
|
—
|
|
—
|
|
Issued 1
|
100
|
|
—
|
|
Balance at Jan 1, 2019
|
100
|
|
—
|
|
Impact of recapitalization
|
748,771,140
|
|
—
|
|
Issued 2
|
2,457,404
|
|
—
|
|
Repurchased
|
—
|
|
9,729,834
|
|
Balance at Dec 31, 2019
|
751,228,644
|
|
9,729,834
|
|
1.
|
Dow Inc. was incorporated in 2018 with 100 authorized and issued shares of common stock, par value $0.01 per share.
|
2.
|
Shares issued to employees and non-employee directors under the Company's equity compensation plans.
|
Accumulated Other Comprehensive Loss
|
2019
|
2018
|
2017
|
||||||
In millions
|
|||||||||
Unrealized Gains (Losses) on Investments
|
|
|
|
||||||
Beginning balance 1
|
$
|
(51
|
)
|
$
|
17
|
|
$
|
43
|
|
Unrealized gains (losses) on investments
|
178
|
|
(93
|
)
|
38
|
|
|||
Less: Tax (expense) benefit
|
(38
|
)
|
19
|
|
(13
|
)
|
|||
Net unrealized gains (losses) on investments
|
140
|
|
(74
|
)
|
25
|
|
|||
(Gains) losses reclassified from AOCL to net income 2
|
(33
|
)
|
9
|
|
(110
|
)
|
|||
Less: Tax expense (benefit) 3
|
8
|
|
(2
|
)
|
39
|
|
|||
Net (gains) losses reclassified from AOCL to net income
|
(25
|
)
|
7
|
|
(71
|
)
|
|||
Other comprehensive income (loss), net of tax
|
115
|
|
(67
|
)
|
(46
|
)
|
|||
Reclassification of stranded tax effects 4
|
—
|
|
(1
|
)
|
—
|
|
|||
Ending balance
|
$
|
64
|
|
$
|
(51
|
)
|
$
|
(3
|
)
|
Cumulative Translation Adjustment
|
|
|
|
||||||
Beginning balance
|
$
|
(1,813
|
)
|
$
|
(1,481
|
)
|
$
|
(2,381
|
)
|
Gains (losses) on foreign currency translation
|
59
|
|
(215
|
)
|
1,006
|
|
|||
Less: Tax (expense) benefit
|
(2
|
)
|
(6
|
)
|
(98
|
)
|
|||
Net gains (losses) on foreign currency translation
|
57
|
|
(221
|
)
|
908
|
|
|||
(Gains) losses reclassified from AOCL to net income 5
|
(89
|
)
|
(4
|
)
|
(8
|
)
|
|||
Other comprehensive income (loss), net of tax
|
(32
|
)
|
(225
|
)
|
900
|
|
|||
Impact of common control transaction 6
|
710
|
|
—
|
|
—
|
|
|||
Reclassification of stranded tax effects 4
|
—
|
|
(107
|
)
|
—
|
|
|||
Ending balance
|
$
|
(1,135
|
)
|
$
|
(1,813
|
)
|
$
|
(1,481
|
)
|
Pension and Other Postretirement Benefits
|
|
|
|
||||||
Beginning balance
|
$
|
(7,965
|
)
|
$
|
(6,998
|
)
|
$
|
(7,389
|
)
|
Gains (losses) arising during the period
|
(1,699
|
)
|
(625
|
)
|
(3
|
)
|
|||
Less: Tax (expense) benefit
|
413
|
|
130
|
|
(20
|
)
|
|||
Net gains (losses) arising during the period
|
(1,286
|
)
|
(495
|
)
|
(23
|
)
|
|||
Amortization and recognition of net loss and prior service credits 7
|
504
|
|
594
|
|
607
|
|
|||
Less: Tax expense (benefit) 3
|
(117
|
)
|
(139
|
)
|
(193
|
)
|
|||
Net loss and prior service credits reclassified from AOCL to net income
|
387
|
|
455
|
|
414
|
|
|||
Other comprehensive income (loss), net of tax
|
(899
|
)
|
(40
|
)
|
391
|
|
|||
Impact of common control transaction 6
|
83
|
|
—
|
|
—
|
|
|||
Reclassification of stranded tax effects 4
|
—
|
|
(927
|
)
|
—
|
|
|||
Ending balance
|
$
|
(8,781
|
)
|
$
|
(7,965
|
)
|
$
|
(6,998
|
)
|
Derivative Instruments
|
|
|
|
||||||
Beginning balance
|
$
|
(56
|
)
|
$
|
(109
|
)
|
$
|
(95
|
)
|
Gains (losses) on derivative instruments
|
(470
|
)
|
6
|
|
2
|
|
|||
Less: Tax (expense) benefit
|
101
|
|
(2
|
)
|
(1
|
)
|
|||
Net gains (losses) on derivative instruments
|
(369
|
)
|
4
|
|
1
|
|
|||
(Gains) losses reclassified from AOCL to net income 8
|
44
|
|
89
|
|
(13
|
)
|
|||
Less: Tax expense (benefit) 3
|
(13
|
)
|
(18
|
)
|
(2
|
)
|
|||
Net (gains) losses reclassified from AOCL to net income
|
31
|
|
71
|
|
(15
|
)
|
|||
Other comprehensive income (loss), net of tax
|
(338
|
)
|
75
|
|
(14
|
)
|
|||
Reclassification of stranded tax effects 4
|
—
|
|
(22
|
)
|
—
|
|
|||
Ending balance
|
$
|
(394
|
)
|
$
|
(56
|
)
|
$
|
(109
|
)
|
Total AOCL ending balance
|
$
|
(10,246
|
)
|
$
|
(9,885
|
)
|
$
|
(8,591
|
)
|
1.
|
The beginning balance of "Unrealized gains (losses) on investments" for 2018 was increased by $20 million to reflect the impact of adoption of ASU 2016-01.
|
2.
|
Reclassified to "Net sales" and "Sundry income (expense) - net."
|
3.
|
Reclassified to "Provision for income taxes."
|
4.
|
Amounts reclassified to "Retained earnings" as a result of the adoption of ASU 2018-02.
|
5.
|
Reclassified to "Sundry income (expense) - net."
|
6.
|
Reclassified to "Retained earnings" as a result of the separation from DowDuPont on April 1, 2019. See Note 4 for additional information.
|
Noncontrolling Interests
|
|
|
|
||||||
In millions
|
2019
|
2018
|
2017
|
||||||
Balance at Jan 1
|
$
|
1,138
|
|
$
|
1,186
|
|
$
|
1,242
|
|
Net income attributable to noncontrolling interests - continuing operations
|
74
|
|
102
|
|
102
|
|
|||
Net income attributable to noncontrolling interests - discontinued operations
|
13
|
|
32
|
|
28
|
|
|||
Distributions to noncontrolling interests 1
|
(77
|
)
|
(145
|
)
|
(109
|
)
|
|||
Impact of common control transaction 2
|
(353
|
)
|
—
|
|
—
|
|
|||
Purchase of noncontrolling interests 3
|
(254
|
)
|
—
|
|
—
|
|
|||
Deconsolidation of noncontrolling interests 4
|
—
|
|
—
|
|
(119
|
)
|
|||
Cumulative translation adjustments
|
12
|
|
(39
|
)
|
41
|
|
|||
Other
|
—
|
|
2
|
|
1
|
|
|||
Balance at Dec 31
|
$
|
553
|
|
$
|
1,138
|
|
$
|
1,186
|
|
1.
|
Distributions to noncontrolling interests are net of $7 million in 2019 ($27 million in 2018 and $20 million in 2017) in dividends paid to a joint venture, which were reclassified to "Equity in earnings of nonconsolidated affiliates" in the consolidated statements of income. Also includes amounts attributable to discontinued operations of $7 million in 2019 ($37 million in 2018 and $28 million in 2017)
|
2.
|
Related to the separation from DowDuPont. See Note 4 for additional information.
|
3.
|
Relates to the acquisition of full ownership in a propylene oxide manufacturing joint venture, which occurred on October 1, 2019. See Note 25 for additional information. As a result of this arrangement, the carrying value of the noncontrolling interest was removed, and “Additional paid-in capital” was adjusted by $38 million.
|
4.
|
On June 30, 2017, the Company sold its ownership interest in the SKC Haas Display Films group of companies.
|
Weighted-Average Assumptions for All Pension Plans
|
Benefit Obligations
at Dec 31
|
Net Periodic Costs
for the Year Ended
|
||||||||
|
2019
|
2018
|
2019
|
2018
|
2017
|
|||||
Discount rate
|
2.81
|
%
|
3.69
|
%
|
3.50
|
%
|
3.17
|
%
|
3.52
|
%
|
Interest crediting rate for applicable benefits
|
3.51
|
%
|
3.72
|
%
|
3.72
|
%
|
3.61
|
%
|
3.45
|
%
|
Rate of compensation increase
|
3.92
|
%
|
3.84
|
%
|
3.92
|
%
|
3.88
|
%
|
3.90
|
%
|
Expected return on plan assets
|
—
|
|
—
|
|
7.11
|
%
|
7.11
|
%
|
7.16
|
%
|
Weighted-Average Assumptions for U.S. Pension Plans
|
Benefit Obligations
at Dec 31
|
Net Periodic Costs
for the Year Ended
|
||||||||
|
2019
|
2018
|
2019
|
2018
|
2017
|
|||||
Discount rate
|
3.41
|
%
|
4.39
|
%
|
4.15
|
%
|
3.66
|
%
|
4.11
|
%
|
Interest crediting rate for applicable benefits
|
4.50
|
%
|
4.50
|
%
|
4.50
|
%
|
4.50
|
%
|
4.50
|
%
|
Rate of compensation increase
|
4.25
|
%
|
4.25
|
%
|
4.25
|
%
|
4.25
|
%
|
4.25
|
%
|
Expected return on plan assets
|
—
|
|
—
|
|
7.92
|
%
|
7.92
|
%
|
7.91
|
%
|
Weighted-Average Assumptions for U.S. Other Postretirement Benefits Plans
|
Benefit Obligations
at Dec 31
|
Net Periodic Costs
for the Year Ended
|
||||||||
|
2019
|
2018
|
2019
|
2018
|
2017
|
|||||
Discount rate
|
3.19
|
%
|
4.24
|
%
|
4.01
|
%
|
3.51
|
%
|
3.83
|
%
|
Health care cost trend rate assumed for next year
|
6.25
|
%
|
6.50
|
%
|
6.50
|
%
|
6.75
|
%
|
7.00
|
%
|
Rate to which the cost trend rate is assumed to decline (the ultimate health care cost trend rate)
|
5.00
|
%
|
5.00
|
%
|
5.00
|
%
|
5.00
|
%
|
5.00
|
%
|
Year that the rate reaches the ultimate health care cost trend rate
|
2025
|
2025
|
2025
|
2025
|
2025
|
Change in Projected Benefit Obligations, Plan Assets and Funded Status of All Significant Plans
|
Defined Benefit Pension Plans
|
Other Postretirement Benefit Plans
|
||||||||||
In millions
|
2019
|
2018
|
2019
|
2018
|
||||||||
Change in projected benefit obligations:
|
|
|
|
|
||||||||
Benefit obligations at beginning of year
|
$
|
29,600
|
|
$
|
31,851
|
|
$
|
1,478
|
|
$
|
1,567
|
|
Impact of plans transferred to DowDuPont at separation
|
(331
|
)
|
—
|
|
—
|
|
—
|
|
||||
Service cost
|
396
|
|
520
|
|
8
|
|
12
|
|
||||
Interest cost
|
921
|
|
886
|
|
49
|
|
45
|
|
||||
Plan participants' contributions
|
12
|
|
19
|
|
—
|
|
—
|
|
||||
Actuarial changes in assumptions and experience
|
3,904
|
|
(1,754
|
)
|
148
|
|
(13
|
)
|
||||
Benefits paid
|
(1,684
|
)
|
(1,476
|
)
|
(148
|
)
|
(123
|
)
|
||||
Plan amendments
|
—
|
|
17
|
|
—
|
|
—
|
|
||||
Acquisitions/divestitures/other 1
|
(37
|
)
|
(45
|
)
|
—
|
|
—
|
|
||||
Effect of foreign exchange rates
|
14
|
|
(418
|
)
|
3
|
|
(10
|
)
|
||||
Termination benefits/curtailments/settlements
|
(174
|
)
|
—
|
|
(3
|
)
|
—
|
|
||||
Benefit obligations at end of year
|
$
|
32,621
|
|
$
|
29,600
|
|
$
|
1,535
|
|
$
|
1,478
|
|
|
|
|
|
|
||||||||
Change in plan assets:
|
|
|
|
|
||||||||
Fair value of plan assets at beginning of year
|
$
|
22,544
|
|
$
|
23,401
|
|
$
|
—
|
|
$
|
—
|
|
Impact of plans transferred to DowDuPont at separation
|
(61
|
)
|
—
|
|
—
|
|
—
|
|
||||
Actual return on plan assets
|
3,790
|
|
(742
|
)
|
—
|
|
—
|
|
||||
Employer contributions
|
266
|
|
1,656
|
|
—
|
|
—
|
|
||||
Plan participants' contributions
|
12
|
|
19
|
|
—
|
|
—
|
|
||||
Benefits paid
|
(1,684
|
)
|
(1,476
|
)
|
—
|
|
—
|
|
||||
Effect of foreign exchange rates
|
41
|
|
(314
|
)
|
—
|
|
—
|
|
||||
Fair value of plan assets at end of year
|
$
|
24,908
|
|
$
|
22,544
|
|
$
|
—
|
|
$
|
—
|
|
|
|
|
|
|
||||||||
Funded status:
|
|
|
|
|
||||||||
U.S. plans with plan assets
|
$
|
(4,768
|
)
|
$
|
(4,066
|
)
|
$
|
—
|
|
$
|
—
|
|
Non-U.S. plans with plan assets
|
(2,207
|
)
|
(2,041
|
)
|
—
|
|
—
|
|
||||
All other plans
|
(738
|
)
|
(695
|
)
|
(1,535
|
)
|
(1,478
|
)
|
||||
Plans of discontinued operations
|
—
|
|
(254
|
)
|
—
|
|
—
|
|
||||
Funded status at end of year
|
$
|
(7,713
|
)
|
$
|
(7,056
|
)
|
$
|
(1,535
|
)
|
$
|
(1,478
|
)
|
|
|
|
|
|
||||||||
Amounts recognized in the consolidated balance sheets at Dec 31:
|
|
|
|
|
||||||||
Deferred charges and other assets
|
$
|
623
|
|
$
|
491
|
|
$
|
—
|
|
$
|
—
|
|
Accrued and other current liabilities
|
(49
|
)
|
(50
|
)
|
(128
|
)
|
(131
|
)
|
||||
Pension and other postretirement benefits - noncurrent
|
(8,287
|
)
|
(7,227
|
)
|
(1,407
|
)
|
(1,347
|
)
|
||||
Liabilities of discontinued operations - current
|
—
|
|
(270
|
)
|
—
|
|
—
|
|
||||
Net amount recognized
|
$
|
(7,713
|
)
|
$
|
(7,056
|
)
|
$
|
(1,535
|
)
|
$
|
(1,478
|
)
|
|
|
|
|
|
||||||||
Pretax amounts recognized in accumulated other comprehensive loss at Dec 31:
|
|
|
|
|
||||||||
Net loss (gain)
|
$
|
11,761
|
|
$
|
10,841
|
|
$
|
(147
|
)
|
$
|
(315
|
)
|
Prior service credit
|
(177
|
)
|
(224
|
)
|
—
|
|
—
|
|
||||
Pretax balance in accumulated other comprehensive loss at end of year
|
$
|
11,584
|
|
$
|
10,617
|
|
$
|
(147
|
)
|
$
|
(315
|
)
|
1.
|
The 2019 impact includes the divestiture of a business with pension benefit obligations of $53 million.The 2018 impact includes the divestiture of a business with pension benefit obligations of $37 million.
|
Pension Plans with Projected Benefit Obligations in Excess of Plan Assets at Dec 31
|
2019
|
2018
|
||||
In millions
|
||||||
Projected benefit obligations
|
$
|
28,013
|
|
$
|
26,599
|
|
Fair value of plan assets
|
$
|
19,677
|
|
$
|
19,051
|
|
Net Periodic Benefit Costs for All Significant Plans for the Year Ended Dec 31
|
Defined Benefit Pension Plans
|
Other Postretirement Benefit Plans
|
||||||||||||||||
In millions
|
2019
|
2018
|
2017
|
2019
|
2018
|
2017
|
||||||||||||
Net Periodic Benefit Costs:
|
|
|
|
|
|
|
||||||||||||
Service cost
|
$
|
396
|
|
$
|
520
|
|
$
|
506
|
|
$
|
8
|
|
$
|
12
|
|
$
|
14
|
|
Interest cost
|
921
|
|
886
|
|
883
|
|
49
|
|
45
|
|
54
|
|
||||||
Expected return on plan assets
|
(1,679
|
)
|
(1,644
|
)
|
(1,548
|
)
|
—
|
|
—
|
|
—
|
|
||||||
Amortization of prior service credit
|
(20
|
)
|
(24
|
)
|
(25
|
)
|
—
|
|
—
|
|
—
|
|
||||||
Amortization of unrecognized (gain) loss
|
574
|
|
642
|
|
638
|
|
(20
|
)
|
(24
|
)
|
(6
|
)
|
||||||
Curtailment/settlement/other 1
|
(27
|
)
|
—
|
|
683
|
|
(3
|
)
|
—
|
|
—
|
|
||||||
Net periodic benefit costs
|
$
|
165
|
|
$
|
380
|
|
$
|
1,137
|
|
$
|
34
|
|
$
|
33
|
|
$
|
62
|
|
Less: discontinued operations
|
21
|
|
101
|
|
105
|
|
—
|
|
3
|
|
3
|
|
||||||
Net periodic benefit costs - continuing operations
|
$
|
144
|
|
$
|
279
|
|
$
|
1,032
|
|
$
|
34
|
|
$
|
30
|
|
$
|
59
|
|
Changes in plan assets and benefit obligations recognized in other comprehensive (income) loss:
|
|
|
|
|
|
|
||||||||||||
Net (gain) loss
|
$
|
1,606
|
|
$
|
584
|
|
$
|
845
|
|
$
|
145
|
|
$
|
(13
|
)
|
$
|
(199
|
)
|
Prior service cost
|
—
|
|
17
|
|
14
|
|
—
|
|
—
|
|
—
|
|
||||||
Amortization of prior service credit
|
20
|
|
24
|
|
25
|
|
—
|
|
—
|
|
—
|
|
||||||
Amortization of unrecognized gain (loss)
|
(574
|
)
|
(642
|
)
|
(638
|
)
|
20
|
|
24
|
|
6
|
|
||||||
Common control transaction 2
|
(112
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||
Curtailment and settlement (gain) loss 1
|
27
|
|
—
|
|
(687
|
)
|
3
|
|
—
|
|
—
|
|
||||||
Total recognized in other comprehensive (income) loss
|
$
|
967
|
|
$
|
(17
|
)
|
$
|
(441
|
)
|
$
|
168
|
|
$
|
11
|
|
$
|
(193
|
)
|
Total recognized in net periodic benefit cost and other comprehensive (income) loss
|
$
|
1,132
|
|
$
|
363
|
|
$
|
696
|
|
$
|
202
|
|
$
|
44
|
|
$
|
(131
|
)
|
1.
|
The 2019 impact relates to plan curtailments and associated special termination benefits resulting from the reduction in plan participation due to the separation of the Company from DowDuPont. The 2017 impact relates to the settlement of a U.S. non-qualified plan triggered by a change in control provision.
|
2.
|
The 2019 impact is the result of the separation of the Company from DowDuPont.
|
Estimated Future Benefit Payments at Dec 31, 2019
|
Defined Benefit Pension Plans
|
Other Postretirement Benefit Plans
|
||||
In millions
|
||||||
2020
|
$
|
1,561
|
|
$
|
129
|
|
2021
|
1,571
|
|
124
|
|
||
2022
|
1,603
|
|
121
|
|
||
2023
|
1,636
|
|
118
|
|
||
2024
|
1,646
|
|
114
|
|
||
2025-2029
|
8,523
|
|
496
|
|
||
Total
|
$
|
16,540
|
|
$
|
1,102
|
|
Target Allocation for Plan Assets at Dec 31, 2019
|
Target Allocation
|
|
Asset Category
|
||
Equity securities
|
35
|
%
|
Fixed income securities
|
36
|
|
Alternative investments
|
28
|
|
Other investments
|
1
|
|
Total
|
100
|
%
|
Basis of Fair Value Measurements
|
Dec 31, 2019
|
Dec 31, 2018
|
||||||||||||||||||||||
In millions
|
Total
|
Level 1
|
Level 2
|
Level 3
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||||||
Cash and cash equivalents
|
$
|
754
|
|
$
|
675
|
|
$
|
79
|
|
$
|
—
|
|
$
|
877
|
|
$
|
818
|
|
$
|
59
|
|
$
|
—
|
|
Equity securities:
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S. equity securities 1
|
$
|
3,844
|
|
$
|
3,752
|
|
$
|
91
|
|
$
|
1
|
|
$
|
3,493
|
|
$
|
3,251
|
|
$
|
241
|
|
$
|
1
|
|
Non - U.S. equity securities
|
4,646
|
|
3,819
|
|
801
|
|
26
|
|
4,242
|
|
3,497
|
|
707
|
|
38
|
|
||||||||
Total equity securities
|
$
|
8,490
|
|
$
|
7,571
|
|
$
|
892
|
|
$
|
27
|
|
$
|
7,735
|
|
$
|
6,748
|
|
$
|
948
|
|
$
|
39
|
|
Fixed income securities:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Debt - government-issued
|
$
|
4,992
|
|
$
|
197
|
|
$
|
4,795
|
|
$
|
—
|
|
$
|
4,751
|
|
$
|
285
|
|
$
|
4,466
|
|
$
|
—
|
|
Debt - corporate-issued
|
3,697
|
|
607
|
|
3,089
|
|
1
|
|
2,929
|
|
411
|
|
2,518
|
|
—
|
|
||||||||
Debt - asset-backed
|
70
|
|
—
|
|
69
|
|
1
|
|
90
|
|
—
|
|
89
|
|
1
|
|
||||||||
Total fixed income securities
|
$
|
8,759
|
|
$
|
804
|
|
$
|
7,953
|
|
$
|
2
|
|
$
|
7,770
|
|
$
|
696
|
|
$
|
7,073
|
|
$
|
1
|
|
Alternative investments:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Private market securities
|
$
|
11
|
|
$
|
—
|
|
$
|
—
|
|
$
|
11
|
|
$
|
1
|
|
$
|
—
|
|
$
|
—
|
|
$
|
1
|
|
Real estate
|
25
|
|
25
|
|
—
|
|
—
|
|
19
|
|
19
|
|
—
|
|
—
|
|
||||||||
Derivatives - asset position
|
574
|
|
2
|
|
572
|
|
—
|
|
451
|
|
17
|
|
434
|
|
—
|
|
||||||||
Derivatives - liability position
|
(513
|
)
|
(2
|
)
|
(511
|
)
|
—
|
|
(506
|
)
|
(19
|
)
|
(487
|
)
|
—
|
|
||||||||
Total alternative investments
|
$
|
97
|
|
$
|
25
|
|
$
|
61
|
|
$
|
11
|
|
$
|
(35
|
)
|
$
|
17
|
|
$
|
(53
|
)
|
$
|
1
|
|
Other investments
|
$
|
411
|
|
$
|
28
|
|
$
|
383
|
|
$
|
—
|
|
$
|
380
|
|
$
|
47
|
|
$
|
333
|
|
$
|
—
|
|
Subtotal
|
$
|
18,511
|
|
$
|
9,103
|
|
$
|
9,368
|
|
$
|
40
|
|
$
|
16,727
|
|
$
|
8,326
|
|
$
|
8,360
|
|
$
|
41
|
|
Investments measured at net asset value:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Hedge funds
|
$
|
1,595
|
|
|
|
|
$
|
1,637
|
|
|
|
|
||||||||||||
Private market securities
|
2,794
|
|
|
|
|
2,196
|
|
|
|
|
||||||||||||||
Real estate
|
2,110
|
|
|
|
|
2,080
|
|
|
|
|
||||||||||||||
Total investments measured at net asset value
|
$
|
6,499
|
|
|
|
|
$
|
5,913
|
|
|
|
|
||||||||||||
Items to reconcile to fair value of plan assets:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Pension trust receivables 2
|
$
|
70
|
|
|
|
|
|
|
|
$
|
29
|
|
|
|
|
|
|
|
||||||
Pension trust payables 3
|
(172
|
)
|
|
|
|
|
|
|
(125
|
)
|
|
|
|
|
|
|
||||||||
Total
|
$
|
24,908
|
|
|
|
|
|
|
|
$
|
22,544
|
|
|
|
|
|
|
|
1.
|
No Dow Inc. common stock was directly held at December 31, 2019. No DowDuPont common stock was directly held at December 31, 2018.
|
2.
|
Primarily receivables for investment securities sold.
|
3.
|
Primarily payables for investment securities purchased.
|
Fair Value Measurement of Level 3 Pension Plan Assets
|
Equity Securities
|
Fixed Income Securities
|
Alternative Investments
|
Other Investments
|
Total
|
||||||||||
In millions
|
|||||||||||||||
Balance at Jan 1, 2018
|
$
|
40
|
|
$
|
16
|
|
$
|
—
|
|
$
|
—
|
|
$
|
56
|
|
Actual return on assets:
|
|
|
|
|
|
||||||||||
Relating to assets sold during 2018
|
—
|
|
4
|
|
(1
|
)
|
1
|
|
4
|
|
|||||
Relating to assets held at Dec 31, 2018
|
(3
|
)
|
(4
|
)
|
—
|
|
—
|
|
(7
|
)
|
|||||
Purchases, sales and settlements, net
|
2
|
|
(15
|
)
|
2
|
|
(1
|
)
|
(12
|
)
|
|||||
Balance at Dec 31, 2018
|
$
|
39
|
|
$
|
1
|
|
$
|
1
|
|
$
|
—
|
|
$
|
41
|
|
Actual return on assets:
|
|
|
|
|
|
||||||||||
Relating to assets sold during 2019
|
(2
|
)
|
—
|
|
—
|
|
—
|
|
(2
|
)
|
|||||
Relating to assets held at Dec 31, 2019
|
1
|
|
—
|
|
(14
|
)
|
—
|
|
(13
|
)
|
|||||
Purchases, sales and settlements, net
|
(11
|
)
|
1
|
|
24
|
|
—
|
|
14
|
|
|||||
Balance at Dec 31, 2019
|
$
|
27
|
|
$
|
2
|
|
$
|
11
|
|
$
|
—
|
|
$
|
40
|
|
Weighted-Average Assumptions
|
2019
|
2018
|
2017
|
|||
Dividend yield
|
5.10
|
%
|
2.13
|
%
|
3.01
|
%
|
Expected volatility
|
26.10
|
%
|
23.34
|
%
|
23.71
|
%
|
Risk-free interest rate
|
2.43
|
%
|
2.83
|
%
|
1.28
|
%
|
Expected life of stock options granted during period (years)
|
6.1
|
|
6.2
|
|
7.5
|
|
Life of Employee Stock Purchase Plan (months)
|
0
|
|
0
|
|
3
|
|
Stock Options
|
2019
|
|||||
Shares in thousands
|
Shares
|
Exercise
Price 1
|
||||
Outstanding at Jan 1, 2019
|
28,846
|
|
$
|
46.70
|
|
|
Granted
|
1,588
|
|
$
|
54.89
|
|
|
Exercised
|
(3,196
|
)
|
$
|
30.02
|
|
|
Forfeited/Expired
|
(239
|
)
|
$
|
60.77
|
|
|
Conversion impact 2
|
(5,734
|
)
|
$
|
59.62
|
|
|
Outstanding at Dec 31, 2019
|
21,265
|
|
$
|
45.96
|
|
|
Remaining contractual life in years
|
|
|
4.62
|
|
||
Aggregate intrinsic value in millions
|
$
|
237
|
|
|
|
|
Exercisable at Dec 31, 2019
|
18,248
|
|
$
|
43.34
|
|
|
Remaining contractual life in years
|
|
|
3.99
|
|
||
Aggregate intrinsic value in millions
|
$
|
237
|
|
|
|
Additional Information about Stock Options
|
|
|
|
||||||
In millions, except per share amounts
|
2019
|
2018
|
2017
|
||||||
Weighted-average fair value per share of options granted
|
$
|
7.99
|
|
$
|
15.38
|
|
$
|
14.44
|
|
Total compensation expense for stock option plans
|
$
|
23
|
|
$
|
68
|
|
$
|
37
|
|
Related tax benefit
|
$
|
5
|
|
$
|
15
|
|
$
|
14
|
|
Total amount of cash received from the exercise of options
|
$
|
93
|
|
$
|
112
|
|
$
|
310
|
|
Total intrinsic value of options exercised 1
|
$
|
77
|
|
$
|
160
|
|
$
|
286
|
|
Related tax benefit
|
$
|
17
|
|
$
|
36
|
|
$
|
106
|
|
RSU Awards
|
2019
|
||||
Shares in thousands
|
Shares
|
Grant Date
Fair Value 1
|
|||
Nonvested at Jan 1, 2019
|
9,735
|
|
$
|
57.41
|
|
Granted
|
1,821
|
|
$
|
54.78
|
|
Vested
|
(7,045
|
)
|
$
|
53.22
|
|
Canceled
|
(156
|
)
|
$
|
60.84
|
|
Conversion impact 2
|
(1,901
|
)
|
$
|
65.87
|
|
Nonvested at Dec 31, 2019
|
2,454
|
|
$
|
59.98
|
|
Additional Information about RSUs
|
|
|
|
||||||
In millions, except per share amounts
|
2019
|
2018
|
2017
|
||||||
Weighted-average fair value per share of RSUs granted
|
$
|
54.78
|
|
$
|
71.46
|
|
$
|
61.29
|
|
Total fair value of RSUs vested 1
|
$
|
375
|
|
$
|
382
|
|
$
|
179
|
|
Related tax benefit
|
$
|
84
|
|
$
|
86
|
|
$
|
66
|
|
Total compensation expense for RSU awards
|
$
|
110
|
|
$
|
144
|
|
$
|
178
|
|
Related tax benefit
|
$
|
25
|
|
$
|
32
|
|
$
|
66
|
|
1.
|
Includes the fair value of shares vested in prior years and delivered in the reporting year.
|
1.
|
At the end of the performance period, the actual number of shares issued can range from zero to 200 percent of target shares granted.
|
2.
|
Weighted-average per share.
|
Additional Information about PSUs
|
|
|
|
||||||
In millions, except share amounts
|
2019
|
2018
|
2017
|
||||||
Total fair value of PSUs vested and delivered 1
|
$
|
18
|
|
$
|
—
|
|
$
|
202
|
|
Related tax benefit
|
$
|
4
|
|
$
|
—
|
|
$
|
75
|
|
Total compensation expense for PSU awards
|
$
|
25
|
|
$
|
12
|
|
$
|
106
|
|
Related tax benefit
|
$
|
6
|
|
$
|
3
|
|
$
|
39
|
|
Shares of PSUs settled in cash (in thousands) 2
|
162
|
|
—
|
|
616
|
|
|||
Total cash paid to settle PSUs 3
|
$
|
13
|
|
$
|
—
|
|
$
|
38
|
|
1.
|
Includes the fair value of shares vested in prior years and delivered in the reporting year.
|
2.
|
PSU awards vested in prior years and delivered in the reporting year.
|
3.
|
Cash paid to certain executive employees for PSU awards vested in prior periods and delivered in the reporting year, equal to the value of the stock award on the date of delivery.
|
Restricted Stock
|
Shares Issued
(in thousands)
|
Weighted-Average Fair Value
|
|||
Year
|
|||||
2019
|
N/A
|
|
N/A
|
|
|
2018
|
36
|
|
$
|
62.82
|
|
2017
|
33
|
|
$
|
62.04
|
|
Additional Information about Employee Stock Purchase Plan
|
|
||
In millions, except per share amounts
|
2017
|
||
Weighted-average fair value per share of purchase rights granted
|
$
|
10.70
|
|
Total compensation expense for ESPP
|
$
|
38
|
|
Related tax benefit
|
$
|
14
|
|
Total amount of cash received from the exercise of purchase rights
|
$
|
179
|
|
Total intrinsic value of purchase rights exercised 1
|
$
|
48
|
|
Related tax benefit
|
$
|
18
|
|
1.
|
Difference between the market price at exercise and the price paid by the employee to exercise the purchase rights.
|
Fair Value of Financial Instruments at Dec 31 1
|
2019
|
2018
|
||||||||||||||||||||||
In millions
|
Cost
|
Gain
|
Loss
|
Fair Value
|
Cost
|
Gain
|
Loss
|
Fair Value
|
||||||||||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Held to maturity securities 2
|
$
|
220
|
|
$
|
—
|
|
$
|
—
|
|
$
|
220
|
|
$
|
410
|
|
$
|
—
|
|
$
|
—
|
|
$
|
410
|
|
Money market funds
|
408
|
|
—
|
|
—
|
|
408
|
|
156
|
|
—
|
|
—
|
|
156
|
|
||||||||
Total cash equivalents
|
$
|
628
|
|
$
|
—
|
|
$
|
—
|
|
$
|
628
|
|
$
|
566
|
|
$
|
—
|
|
$
|
—
|
|
$
|
566
|
|
Marketable securities
|
$
|
21
|
|
$
|
—
|
|
$
|
—
|
|
$
|
21
|
|
$
|
100
|
|
$
|
—
|
|
$
|
—
|
|
$
|
100
|
|
Other investments:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Debt securities:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Government debt 3
|
$
|
533
|
|
$
|
33
|
|
$
|
(11
|
)
|
$
|
555
|
|
$
|
714
|
|
$
|
9
|
|
$
|
(23
|
)
|
$
|
700
|
|
Corporate bonds
|
944
|
|
80
|
|
(10
|
)
|
1,014
|
|
1,026
|
|
20
|
|
(63
|
)
|
983
|
|
||||||||
Total debt securities
|
$
|
1,477
|
|
$
|
113
|
|
$
|
(21
|
)
|
$
|
1,569
|
|
$
|
1,740
|
|
$
|
29
|
|
$
|
(86
|
)
|
$
|
1,683
|
|
Equity securities 4
|
10
|
|
6
|
|
(1
|
)
|
15
|
|
16
|
|
1
|
|
(1
|
)
|
16
|
|
||||||||
Total other investments
|
$
|
1,487
|
|
$
|
119
|
|
$
|
(22
|
)
|
$
|
1,584
|
|
$
|
1,756
|
|
$
|
30
|
|
$
|
(87
|
)
|
$
|
1,699
|
|
Total cash equivalents, marketable securities and other investments
|
$
|
2,136
|
|
$
|
119
|
|
$
|
(22
|
)
|
$
|
2,233
|
|
$
|
2,422
|
|
$
|
30
|
|
$
|
(87
|
)
|
$
|
2,365
|
|
Long-term debt including debt due within one year 5
|
$
|
(16,410
|
)
|
$
|
7
|
|
$
|
(2,258
|
)
|
$
|
(18,661
|
)
|
$
|
(19,591
|
)
|
$
|
351
|
|
$
|
(972
|
)
|
$
|
(20,212
|
)
|
Derivatives relating to:
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest rates 6
|
$
|
—
|
|
$
|
8
|
|
$
|
(283
|
)
|
$
|
(275
|
)
|
$
|
—
|
|
$
|
—
|
|
$
|
(64
|
)
|
$
|
(64
|
)
|
Foreign currency
|
—
|
|
101
|
|
(21
|
)
|
80
|
|
—
|
|
120
|
|
(43
|
)
|
77
|
|
||||||||
Commodities 6
|
—
|
|
59
|
|
(115
|
)
|
(56
|
)
|
—
|
|
91
|
|
(178
|
)
|
(87
|
)
|
||||||||
Total derivatives
|
$
|
—
|
|
$
|
168
|
|
$
|
(419
|
)
|
$
|
(251
|
)
|
$
|
—
|
|
$
|
211
|
|
$
|
(285
|
)
|
$
|
(74
|
)
|
1.
|
Prior period amounts were updated to conform with the current year presentation.
|
2.
|
The Company had held-to-maturity securities (primarily treasury bills and time deposits) classified as cash equivalents.
|
3.
|
U.S. Treasury obligations, U.S. agency obligations, agency mortgage-backed securities and other municipalities’ obligations.
|
4.
|
Equity securities with a readily determinable fair value.
|
5.
|
Cost includes fair value hedge adjustment gains of $1 million at December 31, 2019 and losses of $18 million at December 31, 2018 on $3,490 million of debt at December 31, 2019 and $2,290 million of debt at December 31, 2018.
|
6.
|
Presented net of cash collateral where master netting arrangements allow.
|
Investing Results
|
|
|
|
||||||
In millions
|
2019
|
2018
|
2017
|
||||||
Proceeds from sales of available-for-sale securities
|
$
|
1,138
|
|
$
|
1,053
|
|
$
|
245
|
|
Gross realized gains
|
$
|
51
|
|
$
|
21
|
|
$
|
5
|
|
Gross realized losses
|
$
|
18
|
|
$
|
30
|
|
$
|
—
|
|
Temporarily Impaired Debt Securities at
Dec 31
|
Less than 12 months
|
12 months or more
|
Total
|
|||||||||||||||
Fair
Value
|
Unrealized
Losses
|
Fair
Value |
Unrealized
Losses |
Fair Value
|
Unrealized Losses
|
|||||||||||||
In millions
|
||||||||||||||||||
2019
|
|
|
|
|
|
|
||||||||||||
Government debt 1
|
$
|
55
|
|
$
|
(3
|
)
|
$
|
23
|
|
$
|
(8
|
)
|
$
|
78
|
|
$
|
(11
|
)
|
Corporate bonds
|
79
|
|
(3
|
)
|
52
|
|
(7
|
)
|
131
|
|
(10
|
)
|
||||||
Total temporarily impaired debt securities
|
$
|
134
|
|
$
|
(6
|
)
|
$
|
75
|
|
$
|
(15
|
)
|
$
|
209
|
|
$
|
(21
|
)
|
2018
|
|
|
|
|
|
|
||||||||||||
Government debt 1
|
$
|
287
|
|
$
|
(17
|
)
|
$
|
187
|
|
$
|
(6
|
)
|
$
|
474
|
|
$
|
(23
|
)
|
Corporate bonds
|
724
|
|
(58
|
)
|
64
|
|
(5
|
)
|
788
|
|
(63
|
)
|
||||||
Total temporarily impaired debt securities
|
$
|
1,011
|
|
$
|
(75
|
)
|
$
|
251
|
|
$
|
(11
|
)
|
$
|
1,262
|
|
$
|
(86
|
)
|
1.
|
U.S. Treasury obligations, U.S. agency obligations, agency mortgage-backed securities and other municipalities' obligations.
|
Notional Amounts - Net
|
Dec 31, 2019
|
Dec 31, 2018
|
||||
In millions
|
||||||
Derivatives designated as hedging instruments:
|
|
|
||||
Interest rate contracts
|
$
|
922
|
|
$
|
2,049
|
|
Foreign currency contracts
|
$
|
6,253
|
|
$
|
4,457
|
|
Derivatives not designated as hedging instruments:
|
|
|
||||
Interest rate contracts
|
$
|
145
|
|
$
|
5
|
|
Foreign currency contracts
|
$
|
5,567
|
|
$
|
19,285
|
|
Commodity Notionals - Net
|
Dec 31, 2019
|
Dec 31, 2018
|
Notional Volume Unit
|
||
|
|||||
Derivatives designated as hedging instruments:
|
|
|
|
||
Hydrocarbon derivatives
|
6.1
|
|
39.9
|
|
million barrels of oil equivalent
|
Derivatives not designated as hedging instruments:
|
|
|
|
||
Hydrocarbon derivatives
|
0.1
|
|
1.2
|
|
million barrels of oil equivalent
|
Power derivatives
|
87.5
|
|
73.9
|
|
thousands of megawatt hours
|
Maturity Dates of Derivatives Designated as Hedges
|
Year
|
|
|
Interest rate contracts
|
2021
|
Foreign currency contracts 1
|
2020
|
Commodity contracts
|
2022
|
1.
|
The Company had foreign currency contracts primarily through 2020 with a nominal impact into the first quarter of 2021.
|
Fair Value of Derivative Instruments
|
Dec 31, 2019
|
|||||||||
In millions
|
Balance Sheet Classification
|
Gross
|
Counterparty and Cash Collateral Netting 1
|
Net Amounts Included in the Consolidated Balance Sheets
|
||||||
Asset derivatives:
|
|
|
|
|
||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
||||||
Interest rate contracts
|
Other current assets
|
$
|
21
|
|
$
|
(13
|
)
|
$
|
8
|
|
Foreign currency contracts
|
Other current assets
|
105
|
|
(36
|
)
|
69
|
|
|||
Commodity contracts
|
Other current assets
|
44
|
|
(25
|
)
|
19
|
|
|||
Commodity contracts
|
Deferred charges and other assets
|
28
|
|
(3
|
)
|
25
|
|
|||
Total
|
|
$
|
198
|
|
$
|
(77
|
)
|
$
|
121
|
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
||||||
Interest rate contracts
|
Other current assets
|
$
|
14
|
|
$
|
(14
|
)
|
$
|
—
|
|
Interest rate contracts
|
Deferred charges and other assets
|
—
|
|
—
|
|
—
|
|
|||
Foreign currency contracts
|
Other current assets
|
44
|
|
(12
|
)
|
32
|
|
|||
Commodity contracts
|
Other current assets
|
18
|
|
(3
|
)
|
15
|
|
|||
Commodity contracts
|
Deferred charges and other assets
|
—
|
|
—
|
|
—
|
|
|||
Total
|
|
$
|
76
|
|
$
|
(29
|
)
|
$
|
47
|
|
Total asset derivatives
|
|
$
|
274
|
|
$
|
(106
|
)
|
$
|
168
|
|
|
|
|
|
|
||||||
Liability derivatives:
|
|
|
|
|
||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
||||||
Interest rate contracts
|
Accrued and other current liabilities
|
$
|
23
|
|
$
|
(13
|
)
|
$
|
10
|
|
Interest rate contracts
|
Other noncurrent obligations
|
1
|
|
—
|
|
1
|
|
|||
Foreign currency contracts
|
Accrued and other current liabilities
|
46
|
|
(36
|
)
|
10
|
|
|||
Commodity contracts
|
Accrued and other current liabilities
|
95
|
|
(29
|
)
|
66
|
|
|||
Commodity contracts
|
Other noncurrent obligations
|
38
|
|
(4
|
)
|
34
|
|
|||
Total
|
|
$
|
203
|
|
$
|
(82
|
)
|
$
|
121
|
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
||||||
Interest rate contracts
|
Accrued and other current liabilities
|
$
|
136
|
|
$
|
(14
|
)
|
$
|
122
|
|
Interest rate contracts
|
Other noncurrent obligations
|
150
|
|
—
|
|
150
|
|
|||
Foreign currency contracts
|
Accrued and other current liabilities
|
23
|
|
(12
|
)
|
11
|
|
|||
Commodity contracts
|
Accrued and other current liabilities
|
17
|
|
(3
|
)
|
14
|
|
|||
Commodity contracts
|
Other noncurrent obligations
|
1
|
|
—
|
|
1
|
|
|||
Total
|
|
$
|
327
|
|
$
|
(29
|
)
|
$
|
298
|
|
Total liability derivatives
|
|
$
|
530
|
|
$
|
(111
|
)
|
$
|
419
|
|
1.
|
Counterparty and cash collateral amounts represent the estimated net settlement amount when applying netting and set-off rights included in master netting arrangements between the Company and its counterparties and the payable or receivable for cash collateral held or placed with the same counterparty.
|
Fair Value of Derivative Instruments
|
Dec 31, 2018
|
|||||||||
In millions
|
Balance Sheet Classification
|
Gross
|
Counterparty and Cash Collateral Netting 1
|
Net Amounts Included in the Consolidated Balance Sheets
|
||||||
Asset derivatives:
|
|
|
|
|
||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
||||||
Foreign currency contracts
|
Other current assets
|
$
|
98
|
|
$
|
(42
|
)
|
$
|
56
|
|
Commodity contracts
|
Other current assets
|
47
|
|
(13
|
)
|
34
|
|
|||
Commodity contracts
|
Deferred charges and other assets
|
18
|
|
(3
|
)
|
15
|
|
|||
Total
|
|
$
|
163
|
|
$
|
(58
|
)
|
$
|
105
|
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
||||||
Foreign currency contracts
|
Other current assets
|
$
|
128
|
|
$
|
(64
|
)
|
$
|
64
|
|
Commodity contracts
|
Other current assets
|
41
|
|
(1
|
)
|
40
|
|
|||
Commodity contracts
|
Deferred charges and other assets
|
4
|
|
(2
|
)
|
2
|
|
|||
Total
|
|
$
|
173
|
|
$
|
(67
|
)
|
$
|
106
|
|
Total asset derivatives
|
|
$
|
336
|
|
$
|
(125
|
)
|
$
|
211
|
|
|
|
|
|
|
||||||
Liability derivatives:
|
|
|
|
|
||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
||||||
Interest rate contracts
|
Other noncurrent obligations
|
$
|
64
|
|
$
|
—
|
|
$
|
64
|
|
Foreign currency contracts
|
Accrued and other current liabilities
|
46
|
|
(42
|
)
|
4
|
|
|||
Commodity contracts
|
Accrued and other current liabilities
|
111
|
|
(18
|
)
|
93
|
|
|||
Commodity contracts
|
Other noncurrent obligations
|
86
|
|
(9
|
)
|
77
|
|
|||
Total
|
|
$
|
307
|
|
$
|
(69
|
)
|
$
|
238
|
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
||||||
Foreign currency contracts
|
Accrued and other current liabilities
|
$
|
103
|
|
$
|
(64
|
)
|
$
|
39
|
|
Commodity contracts
|
Accrued and other current liabilities
|
7
|
|
(4
|
)
|
3
|
|
|||
Commodity contracts
|
Other noncurrent obligations
|
8
|
|
(3
|
)
|
5
|
|
|||
Total
|
|
$
|
118
|
|
$
|
(71
|
)
|
$
|
47
|
|
Total liability derivatives
|
|
$
|
425
|
|
$
|
(140
|
)
|
$
|
285
|
|
1.
|
Counterparty and cash collateral amounts represent the estimated net settlement amount when applying netting and set-off rights included in master netting arrangements between the Company and its counterparties and the payable or receivable for cash collateral held or placed with the same counterparty.
|
Effect of Derivative Instruments
|
Amount of gain (loss) recognized in OCI 1
|
Amount of gain (loss) recognized in income 2
|
|
||||||||||||||||
In millions
|
2019
|
2018
|
2017
|
2019
|
2018
|
2017
|
Income Statement Classification
|
||||||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||||||||
Fair value hedges:
|
|
|
|
|
|
|
|
||||||||||||
Interest rate contracts
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
17
|
|
$
|
—
|
|
$
|
(2
|
)
|
Interest expense and amortization of debt discount 3
|
Excluded components 4
|
(3
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
||||||
Cash flow hedges:
|
|
|
|
|
|
|
|
||||||||||||
Interest rate contracts
|
(316
|
)
|
26
|
|
2
|
|
1
|
|
(3
|
)
|
4
|
|
Interest expense and amortization of debt discount
|
||||||
Foreign currency contracts
|
16
|
|
19
|
|
(30
|
)
|
28
|
|
(18
|
)
|
7
|
|
Cost of sales
|
||||||
Foreign currency contracts
|
10
|
|
(3
|
)
|
(5
|
)
|
8
|
|
—
|
|
(17
|
)
|
Sundry income (expense) - net
|
||||||
Commodity contracts
|
(6
|
)
|
(46
|
)
|
37
|
|
(81
|
)
|
(69
|
)
|
10
|
|
Cost of sales
|
||||||
Net investment hedges:
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency contracts
|
(52
|
)
|
116
|
|
(73
|
)
|
—
|
|
—
|
|
—
|
|
|
||||||
Excluded components 4
|
162
|
|
—
|
|
—
|
|
99
|
|
—
|
|
—
|
|
Sundry income (expense) - net
|
||||||
Total derivatives designated as hedging instruments
|
$
|
(189
|
)
|
$
|
112
|
|
$
|
(69
|
)
|
$
|
72
|
|
$
|
(90
|
)
|
$
|
2
|
|
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||||||||
Interest rate contracts
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(4
|
)
|
$
|
—
|
|
$
|
—
|
|
Interest expense and amortization of debt discount
|
Foreign currency contracts
|
—
|
|
—
|
|
—
|
|
45
|
|
101
|
|
(289
|
)
|
Sundry income (expense) - net
|
||||||
Commodity contracts
|
—
|
|
—
|
|
—
|
|
(28
|
)
|
(12
|
)
|
(9
|
)
|
Cost of sales
|
||||||
Total derivatives not designated as hedging instruments
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
13
|
|
$
|
89
|
|
$
|
(298
|
)
|
|
Total derivatives
|
$
|
(189
|
)
|
$
|
112
|
|
$
|
(69
|
)
|
$
|
85
|
|
$
|
(1
|
)
|
$
|
(296
|
)
|
|
1.
|
OCI is defined as other comprehensive income (loss).
|
2.
|
Pretax amounts.
|
3.
|
Gain (loss) recognized in income of derivatives is offset by gain (loss) recognized in income of the hedged item.
|
4.
|
The excluded components are related to the time value of the derivatives designated as hedges.
|
Expected Reclassifications from AOCL within the next 12 months
|
Dec 31,
2019 |
||
|
|||
Cash flow hedges
|
|
||
Interest rate contracts
|
$
|
2
|
|
Commodity contracts
|
$
|
(23
|
)
|
Foreign currency contracts
|
$
|
5
|
|
Net investment hedges
|
|
||
Excluded components
|
$
|
26
|
|
Basis of Fair Value Measurements on a Recurring Basis 1
|
Dec 31, 2019
|
Dec 31, 2018
|
||||||||||||||||
In millions
|
Level 1
|
Level 2
|
Total
|
Level 1
|
Level 2
|
Total
|
||||||||||||
Assets at fair value:
|
|
|
|
|
|
|
||||||||||||
Cash equivalents
|
|
|
|
|
|
|
||||||||||||
Held to maturity securities 2
|
$
|
—
|
|
$
|
220
|
|
$
|
220
|
|
$
|
—
|
|
$
|
410
|
|
$
|
410
|
|
Money market funds
|
—
|
|
408
|
|
408
|
|
—
|
|
156
|
|
156
|
|
||||||
Marketable securities
|
—
|
|
21
|
|
21
|
|
—
|
|
100
|
|
100
|
|
||||||
Equity securities 3
|
15
|
|
—
|
|
15
|
|
16
|
|
—
|
|
16
|
|
||||||
Debt securities: 3
|
|
|
|
|
|
|
||||||||||||
Government debt 4
|
—
|
|
555
|
|
555
|
|
—
|
|
700
|
|
700
|
|
||||||
Corporate bonds
|
22
|
|
992
|
|
1,014
|
|
—
|
|
983
|
|
983
|
|
||||||
Derivatives relating to: 5
|
|
|
|
|
|
|
||||||||||||
Interest rates
|
—
|
|
35
|
|
35
|
|
—
|
|
—
|
|
—
|
|
||||||
Foreign currency
|
—
|
|
149
|
|
149
|
|
—
|
|
226
|
|
226
|
|
||||||
Commodities
|
23
|
|
67
|
|
90
|
|
17
|
|
93
|
|
110
|
|
||||||
Total assets at fair value
|
$
|
60
|
|
$
|
2,447
|
|
$
|
2,507
|
|
$
|
33
|
|
$
|
2,668
|
|
$
|
2,701
|
|
Liabilities at fair value:
|
|
|
|
|
|
|
||||||||||||
Long-term debt including debt due within one year 6
|
$
|
—
|
|
$
|
18,661
|
|
$
|
18,661
|
|
$
|
—
|
|
$
|
20,212
|
|
$
|
20,212
|
|
Derivatives relating to: 5
|
|
|
|
|
|
|
||||||||||||
Interest rates
|
—
|
|
310
|
|
310
|
|
—
|
|
64
|
|
64
|
|
||||||
Foreign currency
|
—
|
|
69
|
|
69
|
|
—
|
|
149
|
|
149
|
|
||||||
Commodities
|
14
|
|
137
|
|
151
|
|
23
|
|
189
|
|
212
|
|
||||||
Total liabilities at fair value
|
$
|
14
|
|
$
|
19,177
|
|
$
|
19,191
|
|
$
|
23
|
|
$
|
20,614
|
|
$
|
20,637
|
|
1.
|
Prior period amounts were updated to conform with the current year presentation.
|
2.
|
The Company had held-to-maturity securities (primary treasury bills and time deposits) classified as cash equivalents.
|
3.
|
The Company’s investments in debt securities, which are primarily available-for-sale, and equity securities are included in “Other investments” in the consolidated balance sheets.
|
4.
|
U.S. Treasury obligations, U.S. agency obligations, agency mortgage-backed securities and other municipalities’ obligations.
|
5.
|
See Note 23 for the classification of derivatives in the consolidated balance sheets.
|
6.
|
See Note 23 for information on fair value measurements of long-term debt.
|
Fair Value Measurements Using Level 3 Inputs for Interests Held in Trade Accounts Receivable Conduits 1
|
2018
|
||
In millions
|
|||
Balance at Jan 1
|
$
|
677
|
|
Gain (loss) included in earnings 2
|
3
|
|
|
Settlements 3
|
(680
|
)
|
|
Balance at Dec 31
|
$
|
—
|
|
1.
|
Included in "Accounts and notes receivable – Other" in the consolidated balance sheets. See Note 15 for additional information.
|
2.
|
Included in "Selling, general and administrative expenses" in the consolidated statements of income.
|
3.
|
Includes noncash transactions of $23 million for the year ended December 31, 2018.
|
Basis of Fair Value Measurements on a Nonrecurring Basis at Dec 31
|
(Level 3)
|
Total Losses
|
||||
In millions
|
||||||
2019
|
|
|
||||
Assets at fair value:
|
|
|
||||
Long-lived assets, other assets and equity method investments
|
$
|
162
|
|
$
|
(2,031
|
)
|
Goodwill
|
$
|
—
|
|
$
|
(1,039
|
)
|
2018
|
|
|
||||
Assets at fair value:
|
|
|
||||
Long-lived assets and other assets
|
$
|
—
|
|
$
|
(67
|
)
|
2017
|
|
|
||||
Assets at fair value:
|
|
|
||||
Long-lived assets, intangible assets, other assets and equity method investments
|
$
|
61
|
|
$
|
(955
|
)
|
Goodwill
|
$
|
—
|
|
$
|
(1,491
|
)
|
1.
|
All assets were restricted at December 31, 2019 and 2018.
|
2.
|
All liabilities were nonrecourse at December 31, 2019 and 2018.
|
Sales to Historical DuPont and its Affiliates
|
2019
|
2018
|
||||
In millions
|
||||||
Net sales
|
$
|
12
|
|
$
|
55
|
|
Cost of sales
|
$
|
9
|
|
$
|
42
|
|
Geographic Region Information
|
United
States
|
EMEAI
|
Rest of
World
|
Total
|
||||||||
In millions
|
||||||||||||
2019
|
|
|
|
|
||||||||
Sales to external customers
|
$
|
14,437
|
|
$
|
14,612
|
|
$
|
13,902
|
|
$
|
42,951
|
|
Long-lived assets
|
$
|
14,571
|
|
$
|
2,649
|
|
$
|
3,776
|
|
$
|
20,996
|
|
2018
|
|
|
|
|
||||||||
Sales to external customers
|
$
|
16,613
|
|
$
|
17,406
|
|
$
|
15,585
|
|
$
|
49,604
|
|
Long-lived assets
|
$
|
14,750
|
|
$
|
2,657
|
|
$
|
4,011
|
|
$
|
21,418
|
|
2017
|
|
|
|
|
||||||||
Sales to external customers
|
$
|
15,316
|
|
$
|
15,226
|
|
$
|
13,188
|
|
$
|
43,730
|
|
Long-lived assets
|
$
|
14,771
|
|
$
|
2,547
|
|
$
|
4,266
|
|
$
|
21,584
|
|
Segment Information
|
Pack. & Spec. Plastics
|
Ind. Interm. & Infrast.
|
Perf. Materials & Coatings
|
Corp.
|
Total
|
||||||||||
In millions
|
|||||||||||||||
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 2
|
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
|
|
|||||
2018
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
24,195
|
|
$
|
15,447
|
|
$
|
9,677
|
|
$
|
285
|
|
$
|
49,604
|
|
Pro forma net sales
|
24,237
|
|
15,465
|
|
9,865
|
|
285
|
|
49,852
|
|
|||||
Restructuring, goodwill impairment and asset related charges - net 1
|
46
|
|
11
|
|
21
|
|
143
|
|
221
|
|
|||||
Equity in earnings (losses) of nonconsolidated affiliates
|
287
|
|
284
|
|
4
|
|
(20
|
)
|
555
|
|
|||||
Pro forma Operating EBIT 2
|
3,593
|
|
1,767
|
|
1,246
|
|
(370
|
)
|
6,236
|
|
|||||
Depreciation and amortization
|
1,385
|
|
607
|
|
888
|
|
29
|
|
2,909
|
|
|||||
Total assets 3
|
30,279
|
|
14,092
|
|
16,050
|
|
3,378
|
|
63,799
|
|
|||||
Investments in nonconsolidated affiliates
|
1,278
|
|
1,850
|
|
99
|
|
93
|
|
3,320
|
|
|||||
Capital expenditures
|
1,231
|
|
433
|
|
427
|
|
—
|
|
2,091
|
|
|||||
2017
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
21,504
|
|
$
|
12,951
|
|
$
|
8,892
|
|
$
|
383
|
|
$
|
43,730
|
|
Pro forma net sales
|
22,546
|
|
12,951
|
|
8,892
|
|
383
|
|
44,772
|
|
|||||
Restructuring, goodwill impairment and asset related charges - net 1
|
716
|
|
17
|
|
1,578
|
|
428
|
|
2,739
|
|
|||||
Equity in earnings (losses) of nonconsolidated affiliates
|
190
|
|
172
|
|
40
|
|
(8
|
)
|
394
|
|
|||||
Pro forma Operating EBIT 2
|
3,712
|
|
1,470
|
|
817
|
|
(422
|
)
|
5,577
|
|
|||||
Depreciation and amortization
|
1,055
|
|
572
|
|
885
|
|
34
|
|
2,546
|
|
|||||
Total assets 3
|
30,633
|
|
14,115
|
|
17,483
|
|
4,342
|
|
66,573
|
|
|||||
Investments in nonconsolidated affiliates
|
1,184
|
|
1,700
|
|
103
|
|
120
|
|
3,107
|
|
|||||
Capital expenditures
|
2,034
|
|
310
|
|
463
|
|
—
|
|
2,807
|
|
1.
|
See Note 7 for information regarding the Company's restructuring programs, goodwill impairment and other asset related charges.
|
2.
|
Pro forma Operating EBIT for TDCC in 2019 is substantially the same as that of Dow Inc. (same for 2018 and 2017) 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.
|
3.
|
Excludes assets of discontinued operations of $19,900 million and $19,279 million for 2018 and 2017, respectively.
|
Reconciliation of "Income (loss) from continuing operations, net of tax" to Pro Forma Operating EBIT
|
2019
|
2018
|
2017
|
||||||
In millions
|
|||||||||
Income (loss) from continuing operations, net of tax
|
$
|
(1,717
|
)
|
$
|
2,940
|
|
$
|
(1,287
|
)
|
+ Provision for income taxes on continuing operations
|
470
|
|
809
|
|
1,524
|
|
|||
Income (loss) from continuing operations before income taxes
|
$
|
(1,247
|
)
|
$
|
3,749
|
|
$
|
237
|
|
- Interest income
|
81
|
|
82
|
|
66
|
|
|||
+ Interest expense and amortization of debt discount
|
933
|
|
1,063
|
|
914
|
|
|||
+ Pro forma adjustments 1
|
65
|
|
180
|
|
1,120
|
|
|||
- Significant items
|
(4,682
|
)
|
(1,326
|
)
|
(3,372
|
)
|
|||
Pro forma Operating EBIT
|
$
|
4,352
|
|
$
|
6,236
|
|
$
|
5,577
|
|
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 (included for 2019 and 2018 only), (2) the inclusion of ECP for the period of January 1, 2017 through August 31, 2017, (3) the removal of the amortization of ECP's inventory step-up recognized in connection with the Merger (4) 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) and (5) the elimination of the effect of a consummated divestiture agreed to with certain regulatory agencies as a condition of approval for the Merger.
|
Significant Items by Segment for 2019
|
Pack. & Spec. Plastics
|
Ind. Interm. & Infrast.
|
Perf. Materials & Coatings
|
Corp.
|
Total
|
||||||||||
In millions
|
|||||||||||||||
Indemnification and other transaction related costs 1
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(144
|
)
|
$
|
(144
|
)
|
Integration and separation costs 2
|
—
|
|
—
|
|
—
|
|
(1,013
|
)
|
(1,013
|
)
|
|||||
Restructuring, goodwill impairment and asset related charges - net 3
|
(439
|
)
|
(1,175
|
)
|
(1,076
|
)
|
(529
|
)
|
(3,219
|
)
|
|||||
Loss on divestitures 4
|
—
|
|
(5
|
)
|
—
|
|
(44
|
)
|
(49
|
)
|
|||||
Loss on early extinguishment of debt 5
|
—
|
|
—
|
|
—
|
|
(102
|
)
|
(102
|
)
|
|||||
Environmental charges 6
|
(5
|
)
|
(8
|
)
|
(50
|
)
|
(336
|
)
|
(399
|
)
|
|||||
Warranty accrual adjustment of exited business 7
|
—
|
|
—
|
|
—
|
|
39
|
|
39
|
|
|||||
Litigation related charges, awards and adjustments 8
|
170
|
|
—
|
|
—
|
|
35
|
|
205
|
|
|||||
Total
|
$
|
(274
|
)
|
$
|
(1,188
|
)
|
$
|
(1,126
|
)
|
$
|
(2,094
|
)
|
$
|
(4,682
|
)
|
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. Excludes one-time transaction costs directly attributable to the Merger.
|
3.
|
Includes Board approved restructuring plans and asset-related charges (see Note 7 for additional information); a charge related to Sadara (see Note 13 for additional information) and an impairment charge related to goodwill associated with the Coatings & Performance Monomers reporting unit (see Note 14 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 16 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 17 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 17 for additional information.
|
Significant Items by Segment for 2018
|
Pack. & Spec. Plastics
|
Ind. Interm. & Infrast.
|
Perf. Materials & Coatings
|
Corp.
|
Total
|
||||||||||
In millions
|
|||||||||||||||
Impact of Dow Silicones ownership restructure 1
|
$
|
—
|
|
$
|
—
|
|
$
|
(20
|
)
|
$
|
—
|
|
$
|
(20
|
)
|
Integration and separation costs 2
|
—
|
|
—
|
|
—
|
|
(1,074
|
)
|
(1,074
|
)
|
|||||
Restructuring, goodwill impairment and asset related charges - net 3
|
(46
|
)
|
(11
|
)
|
(21
|
)
|
(120
|
)
|
(198
|
)
|
|||||
Gain on divestiture 4
|
—
|
|
20
|
|
—
|
|
—
|
|
20
|
|
|||||
Transaction costs and productivity actions 5
|
—
|
|
—
|
|
—
|
|
(54
|
)
|
(54
|
)
|
|||||
Total
|
$
|
(46
|
)
|
$
|
9
|
|
$
|
(41
|
)
|
$
|
(1,248
|
)
|
$
|
(1,326
|
)
|
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 separation and distribution activities, and costs related to the Dow Silicones ownership restructure.
|
3.
|
Includes Board approved restructuring plans and asset-related charges, which include other asset impairments. See Note 7 for additional information.
|
4.
|
Includes a gain related to the Company's sale of its equity interest in MEGlobal.
|
5.
|
The Company retired outstanding notes payable resulting in a loss on early extinguishment. See Note 16 for additional information.
|
Significant Items by Segment for 2017
|
Pack. & Spec. Plastics
|
Ind. Interm. & Infrast.
|
Perf. Materials & Coatings
|
Corp.
|
Total
|
||||||||||
In millions
|
|||||||||||||||
Litigation related charges, awards and adjustments 1
|
$
|
137
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
137
|
|
Integration and separation costs 2
|
—
|
|
—
|
|
—
|
|
(716
|
)
|
(716
|
)
|
|||||
Restructuring, goodwill impairment and asset related charges - net 3
|
(716
|
)
|
(17
|
)
|
(1,578
|
)
|
(431
|
)
|
(2,742
|
)
|
|||||
Gain on divestiture 4
|
—
|
|
—
|
|
—
|
|
7
|
|
7
|
|
|||||
Transaction costs and productivity actions 5
|
—
|
|
—
|
|
—
|
|
(58
|
)
|
(58
|
)
|
|||||
Total
|
$
|
(579
|
)
|
$
|
(17
|
)
|
$
|
(1,578
|
)
|
$
|
(1,198
|
)
|
$
|
(3,372
|
)
|
1.
|
Includes a gain associated with a patent infringement matter with Nova. See Note 17 for additional information.
|
2.
|
Costs related to post-Merger integration, separation and distribution activities, and costs related to the Dow Silicones ownership restructure.
|
3.
|
Includes Board approved restructuring plans, goodwill impairment and asset-related charges, which includes other asset impairments. See Note 7 for additional information.
|
4.
|
Includes post-closing adjustments related to the split-off of the Company's chlorine value chain.
|
5.
|
Includes implementation costs associated with the Company's restructuring programs and other productivity actions.
|
2019
|
|
|
|
|
|
||||||||||
In millions, except per share amounts (Unaudited)
|
1st 1
|
2nd
|
3rd
|
4th
|
Year
|
||||||||||
Dow Inc.
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
10,969
|
|
$
|
11,014
|
|
$
|
10,764
|
|
$
|
10,204
|
|
$
|
42,951
|
|
Cost of sales
|
$
|
9,142
|
|
$
|
9,420
|
|
$
|
9,377
|
|
$
|
8,718
|
|
$
|
36,657
|
|
Gross margin
|
$
|
1,827
|
|
$
|
1,594
|
|
$
|
1,387
|
|
$
|
1,486
|
|
$
|
6,294
|
|
Restructuring, goodwill impairment and asset related charges - net 2
|
$
|
156
|
|
$
|
65
|
|
$
|
147
|
|
$
|
2,851
|
|
$
|
3,219
|
|
Integration and separation costs 3
|
$
|
452
|
|
$
|
348
|
|
$
|
164
|
|
$
|
99
|
|
$
|
1,063
|
|
Income (loss) from continuing operations, net of tax
|
$
|
156
|
|
$
|
90
|
|
$
|
347
|
|
$
|
(2,310
|
)
|
$
|
(1,717
|
)
|
Income from discontinued operations net of tax
|
$
|
445
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
445
|
|
Net income (loss) 4
|
$
|
601
|
|
$
|
90
|
|
$
|
347
|
|
$
|
(2,310
|
)
|
$
|
(1,272
|
)
|
Net income (loss) attributable to Dow Inc.
|
$
|
556
|
|
$
|
75
|
|
$
|
333
|
|
$
|
(2,323
|
)
|
$
|
(1,359
|
)
|
Earnings (loss) per common share from continuing operations - basic 5
|
$
|
0.16
|
|
$
|
0.10
|
|
$
|
0.45
|
|
$
|
(3.14
|
)
|
$
|
(2.42
|
)
|
Earnings (loss) per common share from continuing operations -
diluted 5
|
$
|
0.16
|
|
$
|
0.10
|
|
$
|
0.45
|
|
$
|
(3.14
|
)
|
$
|
(2.42
|
)
|
Dividends declared per share of common stock 6
|
N/A
|
|
$
|
0.70
|
|
$
|
0.70
|
|
$
|
0.70
|
|
$
|
2.10
|
|
|
Market price range of common stock:
|
|
|
|
|
|
||||||||||
High 6
|
N/A
|
|
$
|
59.71
|
|
$
|
52.79
|
|
$
|
55.99
|
|
$
|
59.71
|
|
|
Low 6
|
N/A
|
|
$
|
46.76
|
|
$
|
40.71
|
|
$
|
43.85
|
|
$
|
40.71
|
|
|
TDCC
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
10,969
|
|
$
|
11,014
|
|
$
|
10,764
|
|
$
|
10,204
|
|
$
|
42,951
|
|
Cost of sales
|
$
|
9,142
|
|
$
|
9,419
|
|
$
|
9,377
|
|
$
|
8,719
|
|
$
|
36,657
|
|
Gross margin
|
$
|
1,827
|
|
$
|
1,595
|
|
$
|
1,387
|
|
$
|
1,485
|
|
$
|
6,294
|
|
Restructuring, goodwill impairment and asset related charges - net 2
|
$
|
156
|
|
$
|
65
|
|
$
|
147
|
|
$
|
2,851
|
|
$
|
3,219
|
|
Integration and separation costs
|
$
|
452
|
|
$
|
324
|
|
$
|
164
|
|
$
|
99
|
|
$
|
1,039
|
|
Income (loss) from continuing operations, net of tax
|
$
|
156
|
|
$
|
217
|
|
$
|
324
|
|
$
|
(2,292
|
)
|
$
|
(1,595
|
)
|
Income from discontinued operations net of tax
|
$
|
445
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
445
|
|
Net income (loss) 3
|
$
|
601
|
|
$
|
217
|
|
$
|
324
|
|
$
|
(2,292
|
)
|
$
|
(1,150
|
)
|
Net income (loss) attributable to The Dow Chemical Company
|
$
|
556
|
|
$
|
202
|
|
$
|
310
|
|
$
|
(2,305
|
)
|
$
|
(1,237
|
)
|
1.
|
The amounts presented for the first quarter of 2019 have been updated from the amounts reported in the Company's Quarterly Report on Form 10-Q for the period ended March 31, 2019, to reflect the effects of the separation from DowDuPont. See reconciliation on the following page.
|
2.
|
See Note 7 for additional information.
|
3.
|
See Note 4 for additional information.
|
4.
|
See Notes 4, 9, 16 and 17 for information on additional items materially impacting "Net income (loss)." The fourth quarter of 2019 included a gain related to the effects of Swiss tax reform and a loss on the early extinguishment of debt. The third quarter of 2019 included a charge related to environmental remediation, a charge related to the settlement of the Dow Silicones commercial creditor matters, a gain related to an adjustment to the Dow Silicones breast implant liability and a gain associated with a legal settlement with Nova. The second quarter of 2019 included charges associated with agreements entered into with DuPont and Corteva as part of the separation from DowDuPont.
|
5.
|
Earnings per common share amounts relate only to Dow Inc. as TDCC common shares are not publicly traded and are all owned by Dow Inc. Due to quarterly changes in the share count and the allocation of income to participating securities, the sum of the four quarters does not equal the earnings per share amount calculated for the year.
|
6.
|
Dow Inc.'s common stock was solely owned by DowDuPont through March 31, 2019, and on April 1, 2019, Dow Inc. became an independent, publicly traded company.
|
2018
|
|
|
|
|
|
||||||||||
In millions, except per share amounts (Unaudited)
|
1st
|
2nd
|
3rd
|
4th
|
Year
|
||||||||||
Net sales
|
$
|
12,237
|
|
$
|
12,789
|
|
$
|
12,634
|
|
$
|
11,944
|
|
$
|
49,604
|
|
Cost of sales
|
$
|
9,980
|
|
$
|
10,540
|
|
$
|
10,456
|
|
$
|
10,098
|
|
$
|
41,074
|
|
Gross margin
|
$
|
2,257
|
|
$
|
2,249
|
|
$
|
2,178
|
|
$
|
1,846
|
|
$
|
8,530
|
|
Restructuring, goodwill impairment and asset related charges - net 1
|
$
|
87
|
|
$
|
40
|
|
$
|
48
|
|
$
|
46
|
|
$
|
221
|
|
Integration and separation costs 2
|
$
|
224
|
|
$
|
262
|
|
$
|
313
|
|
$
|
380
|
|
$
|
1,179
|
|
Income from continuing operations, net of tax
|
$
|
925
|
|
$
|
810
|
|
$
|
714
|
|
$
|
491
|
|
$
|
2,940
|
|
Income from discontinued operations, net of tax
|
$
|
514
|
|
$
|
554
|
|
$
|
335
|
|
$
|
432
|
|
$
|
1,835
|
|
Net income 3
|
$
|
1,439
|
|
$
|
1,364
|
|
$
|
1,049
|
|
$
|
923
|
|
$
|
4,775
|
|
Net income attributable to Dow Inc. and The Dow Chemical Company
|
$
|
1,404
|
|
$
|
1,333
|
|
$
|
1,013
|
|
$
|
891
|
|
$
|
4,641
|
|
Earnings per common share from continuing operations - basic 4
|
$
|
1.21
|
|
$
|
1.05
|
|
$
|
0.91
|
|
$
|
0.63
|
|
$
|
3.80
|
|
Earnings per common share from continuing operations -
diluted 4
|
$
|
1.21
|
|
$
|
1.05
|
|
$
|
0.91
|
|
$
|
0.63
|
|
$
|
3.80
|
|
1.
|
See Note 7 for additional information.
|
2.
|
See Note 4 for additional information.
|
3.
|
Includes tax adjustments related to The Act, enacted on December 22, 2017. See Note 9 for additional information.
|
4.
|
Earnings per common share amounts relate only to Dow Inc. as TDCC common shares are not publicly traded and are all owned by Dow Inc.
|
Reconciliation - First Quarter 2019
|
As Filed
|
Distribution of AgCo and SpecCo
|
Receipt of ECP
|
Updated
|
||||||||
In millions (Unaudited)
|
||||||||||||
Net sales
|
$
|
13,582
|
|
$
|
(2,954
|
)
|
$
|
341
|
|
$
|
10,969
|
|
Cost of sales
|
$
|
10,707
|
|
$
|
(1,805
|
)
|
$
|
240
|
|
$
|
9,142
|
|
Gross margin
|
$
|
2,875
|
|
$
|
(1,149
|
)
|
$
|
101
|
|
$
|
1,827
|
|
Restructuring, goodwill impairment and asset related charges - net
|
$
|
232
|
|
$
|
(78
|
)
|
$
|
2
|
|
$
|
156
|
|
Integration and separation costs
|
$
|
408
|
|
$
|
—
|
|
$
|
44
|
|
$
|
452
|
|
Income from continuing operations, net of tax
|
$
|
586
|
|
$
|
(445
|
)
|
$
|
15
|
|
$
|
156
|
|
Income from discontinued operations, net of tax
|
$
|
—
|
|
$
|
445
|
|
$
|
—
|
|
$
|
445
|
|
Net income
|
$
|
586
|
|
$
|
—
|
|
$
|
15
|
|
$
|
601
|
|
Net income available for common stockholders
|
$
|
541
|
|
$
|
—
|
|
$
|
15
|
|
$
|
556
|
|
•
|
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Companies;
|
•
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Companies are being made only in accordance with authorizations of management and Directors of the Companies; and
|
•
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Companies' assets that could have a material effect on the consolidated financial statements.
|
/s/ JIM FITTERLING
|
|
/s/ HOWARD UNGERLEIDER
|
Jim Fitterling
|
|
Howard Ungerleider
|
Chief Executive Officer
|
|
President and Chief Financial Officer
|
|
|
|
|
|
|
/s/ RONALD C. EDMONDS
|
|
|
Ronald C. Edmonds
|
|
|
Controller and Vice President of Controllers and Tax
|
|
|
/S/ DELOITTE & TOUCHE LLP
|
Deloitte & Touche LLP
|
Midland, Michigan
|
February 7, 2020
|
/S/ DELOITTE & TOUCHE LLP
|
Deloitte & Touche LLP
|
Midland, Michigan
|
February 7, 2020
|
Type of Fees
|
|
|
||||
In thousands
|
2019
|
2018
|
||||
Audit Fees 1
|
$
|
25,142
|
|
$
|
26,199
|
|
Audit-Related Fees 2
|
4,438
|
|
6,976
|
|
||
Tax Fees 3
|
2,780
|
|
600
|
|
||
Total
|
$
|
32,360
|
|
$
|
33,775
|
|
1.
|
The aggregate fees billed for the integrated audit of the Company's annual financial statements and internal control over financial reporting, the reviews of the financial statements in quarterly reports on Form 10-Q, comfort letters, consents, statutory audits, and other regulatory filings. For 2019, the fees include $850,000 associated with supporting the DuPont de Nemours, Inc. SEC filings for the period prior to the separation from DowDuPont Inc.
|
2.
|
The aggregate fees billed primarily for audits of carve-out financial statements, assessment of controls relating to outsourced services, audits and reviews supporting divestiture activities, and agreed-upon procedures engagements.
|
3.
|
The aggregate fees billed primarily for corporate tax consulting services, the preparation of expatriate employees' tax returns and tax compliance services.
|
(a)
|
The following documents are filed as part of this report:
|
(1)
|
The Company’s 2019 Consolidated Financial Statements and the Report of Independent Registered Public Accounting Firm are included in Part II, Item 8. Financial Statements and Supplementary Data.
|
(2)
|
Financial Statement Schedules – The following Financial Statement Schedule should be read in conjunction with the Consolidated Financial Statements and Report of Independent Registered Public Accounting Firm included in Part II, Item 8. Financial Statements and Supplementary Data:
|
Schedule II
|
Valuation and Qualifying Accounts
|
(3)
|
The following exhibits are filed with or incorporated by reference into this Annual Report on Form 10-K:
|
Exhibit No.
|
Description of Exhibit
|
2.1
|
2.2
|
2.2.1
|
2.3
|
2.3.1
|
3.1
|
3.2
|
3.3
|
3.4
|
4.1
|
4.1.1
|
4.1.2
|
4.1.3
|
4.2
|
4.2.1
|
4.2.2
|
4.3*
|
4.4
|
Dow Inc. agrees to provide the SEC, on request, copies of all other such indentures and instruments that define the rights of holders of long-term debt of Dow Inc. and its consolidated subsidiaries, including The Dow Chemical Company, pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K.
|
4.5*
|
10.1
|
10.2
|
10.3
|
10.4
|
10.5
|
10.5.1
|
10.5.2
|
10.5.3
|
10.5.4
|
10.5.5
|
10.5.6
|
10.6
|
10.6.1
|
10.7
|
10.8
|
10.9
|
10.10
|
10.11
|
21*
|
23.1.1*
|
23.1.2*
|
23.2*
|
31.1*
|
31.2*
|
32.1*
|
32.2*
|
99.1
|
101.INS
|
The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
|
101.SCH
|
Inline XBRL Taxonomy Extension Schema Document.
|
101.CAL
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document.
|
101.DEF
|
Inline XBRL Taxonomy Extension Definition Linkbase Document.
|
101.LAB
|
Inline XBRL Taxonomy Extension Label Linkbase Document.
|
101.PRE
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document.
|
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 within the Inline XBRL document.
|
|
Dow Inc. and Subsidiaries
|
|
|
The Dow Chemical Company and Subsidiaries
|
|
|
Valuation and Qualifying Accounts
|
Schedule II
|
(In millions) For the years ended Dec 31,
|
2019
|
2018
|
2017
|
||||||
Accounts Receivable - Allowance for Doubtful Receivables
|
|
|
|
||||||
Balance at beginning of year
|
$
|
42
|
|
$
|
59
|
|
$
|
51
|
|
Additions charged to expenses 1
|
24
|
|
10
|
|
23
|
|
|||
Additions charged to other accounts 2
|
—
|
|
4
|
|
2
|
|
|||
Deductions from reserves 3
|
(21
|
)
|
(31
|
)
|
(17
|
)
|
|||
Balance at end of year
|
$
|
45
|
|
$
|
42
|
|
$
|
59
|
|
Inventory - Obsolescence Reserve
|
|
|
|
||||||
Balance at beginning of year
|
$
|
23
|
|
$
|
18
|
|
$
|
34
|
|
Additions charged to expenses
|
19
|
|
7
|
|
5
|
|
|||
Deductions from reserves 4
|
(7
|
)
|
(2
|
)
|
(21
|
)
|
|||
Balance at end of year
|
$
|
35
|
|
$
|
23
|
|
$
|
18
|
|
Reserves for Other Investments and Noncurrent Receivables
|
|
|
|
||||||
Balance at beginning of year
|
$
|
460
|
|
$
|
430
|
|
$
|
350
|
|
Additions charged to expenses 1
|
1,758
|
|
44
|
|
83
|
|
|||
Deductions from reserves
|
(3
|
)
|
(14
|
)
|
(3
|
)
|
|||
Balance at end of year
|
$
|
2,215
|
|
$
|
460
|
|
$
|
430
|
|
Deferred Tax Assets - Valuation Allowance
|
|
|
|
||||||
Balance at beginning of year
|
$
|
1,225
|
|
$
|
1,255
|
|
$
|
936
|
|
Additions charged to expenses
|
140
|
|
152
|
|
369
|
|
|||
Deductions from reserves
|
(103
|
)
|
(182
|
)
|
(50
|
)
|
|||
Balance at end of year
|
$
|
1,262
|
|
$
|
1,225
|
|
$
|
1,255
|
|
1.
|
In 2019, additions charged to expenses for "Accounts Receivable - Allowance for Doubtful Receivables" included $2 million and additions charged to expenses for "Reserves for Other Investments and Noncurrent Receivables" included $1,753 million related to the Company's investment in Sadara Chemical Company. See Note 13 to the Consolidated Financial Statements for additional information.
|
2.
|
Additions to allowance for doubtful accounts charged to other accounts were classified as "Accounts and notes receivable - Other" in the consolidated balance sheets. These reserves relate to the Company's sale of trade accounts receivable. Anticipated credit losses in the portfolio of receivables sold were used to fair value the Company's interests held in trade accounts receivable conduits. See Notes 15 and 24 to the Consolidated Financial Statements for additional information.
|
3.
|
Deductions included write-offs, recoveries, currency translation adjustments and other miscellaneous items.
|
4.
|
Deductions included disposals and currency translation adjustments.
|
DOW INC.
|
THE DOW CHEMICAL COMPANY
|
|
/s/ RONALD C. EDMONDS
|
Ronald C. Edmonds, Controller and Vice President of Controllers and Tax
|
February 7, 2020
|
|
|
|
/s/ SAMUEL R. ALLEN
|
|
/s/ JEFF M. FETTIG
|
Samuel R. Allen, Director, Dow Inc.
|
|
Jeff M. Fettig, Non-Executive Chairman, Dow Inc.
|
February 7, 2020
|
|
February 7, 2020
|
|
|
|
/s/ AJAY BANGA
|
|
/s/ JIM FITTERLING
|
Ajay Banga, Director, Dow Inc.
|
|
Jim Fitterling, Director and Chief Executive Officer, Dow Inc. and TDCC
|
February 7, 2020
|
|
February 7, 2020
|
|
|
|
/s/ JACQUELINE K. BARTON
|
|
/s/ JACQUELINE C. HINMAN
|
Jacqueline K. Barton, Director, Dow Inc.
|
|
Jacqueline C. Hinman, Director, Dow Inc.
|
February 7, 2020
|
|
February 7, 2020
|
|
|
|
/s/ JAMES A. BELL
|
|
/s/ RUTH G. SHAW
|
James A. Bell, Director, Dow Inc.
|
|
Ruth G. Shaw, Director, Dow Inc.
|
February 7, 2020
|
|
February 7, 2020
|
|
|
|
/s/ WESLEY G. BUSH
|
|
/s/ HOWARD UNGERLEIDER
|
Wesley G. Bush, Director, Dow Inc.
|
|
Howard Ungerleider, President and Chief Financial Officer, Dow Inc. and TDCC; Director, TDCC
|
February 7, 2020
|
|
February 7, 2020
|
|
|
|
/s/ RICHARD K. DAVIS
|
|
/s/ DANIEL W. YOHANNES
|
Richard K. Davis, Director, Dow Inc.
|
|
Daniel W. Yohannes, Director, Dow Inc.
|
February 7, 2020
|
|
February 7, 2020
|
|
|
|
/s/ RONALD C. EDMONDS
|
|
|
Ronald C. Edmonds, Controller and Vice President of Controllers and Tax
|
|
|
February 7, 2020
|
|
|
Dow Inc. and Subsidiaries
The Dow Chemical Company and Subsidiaries
|
Trademark Listing
|
|
|
|
|
EXHIBIT 4.3
|
Section of the Act
|
|
Section of Indenture
|
310(a)
|
|
6.9 and 11.7
|
310(b)
|
|
6.8 and 6.10
|
311(a)
|
|
6.13
|
311(b)
|
|
6.13
|
312(a)
|
|
4.1 and 4.2(a)
|
312(b)
|
|
4.2(a) and (b)
|
312(c)
|
|
4.2(c)
|
313(a)
|
|
4.4(a)
|
313(b)(1)
|
|
Inapplicable
|
313(b)(2)
|
|
4.4
|
313(c)
|
|
4.4
|
313(d)
|
|
4.4
|
314(a)
|
|
4.3
|
314(b)
|
|
Inapplicable
|
314(c)(1) and (2)
|
|
11.5
|
314(c)(3)
|
|
Inapplicable
|
314(d)
|
|
Inapplicable
|
314(e)
|
|
11.5
|
314(f)
|
|
Inapplicable
|
315(a), (c) and (d)
|
|
6.1
|
315(b)
|
|
5.11
|
315(e)
|
|
5.12
|
316(a)(1)
|
|
5.9 and 5.10
|
316(a)(2)
|
|
Inapplicable
|
316(a) (last sentence)
|
|
7.4
|
316(b)
|
|
5.7
|
316(c)
|
|
7.6
|
317(a)
|
|
5.2
|
317(b)
|
|
3.4(a) and (b)
|
318(a)
|
|
11.7
|
|
|
|
|
|
|
Page
|
|
ARTICLE ONE DEFINITIONS
|
1
|
|
||
|
Section 1.1
|
Certain Terms Defined
|
1
|
|
ARTICLE TWO SECURITIES
|
7
|
|
||
|
Section 2.1
|
Forms Generally
|
7
|
|
|
Section 2.2
|
Form of Trustee’s Certificate of Authentication
|
7
|
|
|
Section 2.3
|
Amount Unlimited; Issuable in Series
|
8
|
|
|
Section 2.4
|
Authentication and Delivery of Securities
|
10
|
|
|
Section 2.5
|
Execution of Securities
|
12
|
|
|
Section 2.6
|
Certificate of Authentication
|
12
|
|
|
Section 2.7
|
Denomination and Date of Securities; Payments of Interest
|
12
|
|
|
Section 2.8
|
Registration, Transfer and Exchange
|
14
|
|
|
Section 2.9
|
Mutilated, Defaced, Destroyed, Lost and Stolen Securities
|
17
|
|
|
Section 2.10
|
Cancellation of Securities, Destruction Thereof
|
18
|
|
|
Section 2.11
|
Temporary Securities
|
18
|
|
|
Section 2.12
|
Compliance with Certain Laws and Regulations
|
18
|
|
|
Section 2.13
|
Appointment of Agents With Respect to Certain Calculations
|
20
|
|
|
Section 2.14
|
CUSIP Numbers
|
20
|
|
ARTICLE THREE
|
21
|
|
||
A. COVENANTS OF THE ISSUER
|
21
|
|
||
|
Section 3.1
|
Payment of Principal and Interest
|
21
|
|
|
Section 3.2
|
Offices for Payment, etc.
|
21
|
|
|
Section 3.3
|
Appointment to Fill a Vacancy in Office of Trustee
|
22
|
|
|
Section 3.4
|
Paying Agents
|
22
|
|
|
Section 3.5
|
[Reserved]
|
23
|
|
|
Section 3.6
|
Limitation on Liens
|
23
|
|
|
Section 3.7
|
Limitation on Sale and Lease-Back Transactions
|
25
|
|
|
Section 3.8
|
Additional Amounts
|
26
|
|
B. GUARANTEE COVENANT OF DOW INC.
|
26
|
|
||
ARTICLE FOUR SECURITYHOLDERS’ LISTS AND REPORTS BY THE ISSUER AND THE TRUSTEE
|
27
|
|
||
|
Section 4.1
|
Company to Furnish Trustee Information as to Names and Addresses of Securityholders
|
27
|
|
|
Section 4.2
|
Preservation and Disclosure of Securityholders’ Lists
|
27
|
|
|
Section 4.3
|
Reports by the Company
|
28
|
|
|
Section 4.4
|
Reports by the Trustee
|
29
|
|
ARTICLE FIVE REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT
|
30
|
|
||
|
Section 5.1
|
Event of Default Defined; Acceleration of Maturity; Waiver of Default
|
30
|
|
|
Section 5.2
|
Collection of Indebtedness by Trustee; Trustee May Prove Debt
|
32
|
|
|
Section 5.3
|
Application of Proceeds
|
34
|
|
|
Section 5.4
|
Suits for Enforcement
|
35
|
|
|
Section 5.5
|
Restoration of Rights on Abandonment of Proceedings
|
35
|
|
|
Section 5.6
|
Limitations on Suits by Securityholders
|
35
|
|
|
Section 5.7
|
Unconditional Right of Securityholders to Institute Certain Suits
|
36
|
|
|
Section 5.8
|
Powers and Remedies Cumulative; Delay or Omission Not Waiver of Default
|
36
|
|
|
Section 5.9
|
Control by Securityholders
|
36
|
|
|
Section 5.10
|
Waiver of Past Defaults
|
37
|
|
|
Section 5.11
|
Trustee to Give Notice of Default, But May Withhold in Certain Circumstances
|
37
|
|
|
Section 5.12
|
Right of Court to Require Filing of Undertaking to Pay Costs
|
37
|
|
ARTICLE SIX CONCERNING THE TRUSTEE
|
38
|
|
||
|
Section 6.1
|
Duties and Responsibilities of the Trustee; Prior to Default; During Default
|
38
|
|
|
Section 6.2
|
Certain Rights of the Trustee
|
39
|
|
|
Section 6.3
|
Trustee Not Responsible for Recitals, Disposition of Securities or Application of Proceeds Thereof
|
40
|
|
|
Section 6.4
|
Trustee and Agents May Hold Securities; Collections, etc.
|
41
|
|
|
Section 6.5
|
Moneys Held by Trustee
|
41
|
|
|
Section 6.6
|
Compensation and Indemnification of Trustee and Its Prior Claim
|
41
|
|
|
Section 6.7
|
Right of Trustee to Rely on Officer’s Certificate, etc.
|
42
|
|
|
Section 6.8
|
Disqualification of Trustee; Conflicting Interests
|
42
|
|
|
Section 6.9
|
Persons Eligible for Appointment as Trustee
|
42
|
|
|
Section 6.10
|
Resignation and Removal; Appointment of Successor Trustee
|
42
|
|
|
Section 6.11
|
Acceptance of Appointment by Successor Trustee
|
44
|
|
|
Section 6.12
|
Merger, Conversion, Consolidation or Succession to Business of Trustee
|
45
|
|
|
Section 6.13
|
Preferential Collection of Claims Against the Company
|
45
|
|
|
Section 6.14
|
Appointment of Authenticating Agent
|
45
|
|
ARTICLE SEVEN CONCERNING THE SECURITYHOLDERS
|
46
|
|
||
|
Section 7.1
|
Evidence of Action Taken by Securityholders
|
46
|
|
|
Section 7.2
|
Proof of Execution of Instruments
|
47
|
|
|
Section 7.3
|
Holders to Be Treated as Owners
|
47
|
|
|
Section 7.4
|
Securities Owned by Company Deemed Not Outstanding
|
47
|
|
|
Section 7.5
|
Right of Revocation of Action Taken
|
48
|
|
|
Section 7.6
|
Record Date for Determination of Holders Entitled to Vote
|
48
|
|
ARTICLE EIGHT SUPPLEMENTAL INDENTURES
|
48
|
|
||
|
Section 8.1
|
Supplemental Indentures Without Consent of Securityholders
|
48
|
|
|
Section 8.2
|
Supplemental Indentures With Consent of Securityholders
|
50
|
|
|
Section 8.3
|
Effect of Supplemental Indenture
|
51
|
|
|
Section 8.4
|
Documents to Be Given to Trustee
|
51
|
|
|
Section 8.5
|
Notation on Securities in Respect of Supplemental Indentures
|
51
|
|
ARTICLE NINE CONSOLIDATION, MERGER, SALE OR CONVEYANCE
|
51
|
|
||
|
Section 9.1
|
Company May Consolidate, etc., on Certain Terms
|
51
|
|
|
Section 9.2
|
Successor Corporation Substituted
|
51
|
|
|
Section 9.3
|
Opinion of Counsel to Trustee
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52
|
|
ARTICLE TEN SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONEYS
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52
|
|
||
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Section 10.1
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Satisfaction and Discharge of Indenture
|
52
|
|
|
Section 10.2
|
Application by Trustee of Funds Deposited for Payment of Securities
|
54
|
|
|
Section 10.3
|
Repayment of Moneys Held by Paying Agent
|
55
|
|
|
Section 10.4
|
Return of Unclaimed Moneys Held by Trustee and Paying Agent
|
55
|
|
|
Section 10.5
|
Reinstatement of Company’s Obligations
|
55
|
|
ARTICLE ELEVEN MISCELLANEOUS PROVISIONS
|
55
|
|
||
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Section 11.1
|
Incorporators, Stockholders, Officers and Directors of Company Exempt from Individual Liability
|
55
|
|
|
Section 11.2
|
Provisions of Indenture for the Sole Benefit of Parties and Securityholders
|
56
|
|
|
Section 11.3
|
Successors and Assigns of Company Bound by Indenture
|
56
|
|
|
Section 11.4
|
Notices and Demands on Company, Trustee and Securityholders
|
56
|
|
|
Section 11.5
|
Officer’s Certificates and Opinions of Counsel; Statements to Be Contained Therein
|
57
|
|
|
Section 11.6
|
Payments Due on Saturdays, Sundays and Holidays
|
58
|
|
|
Section 11.7
|
Conflict of Any Provision of Indenture with Trust Indenture Act
|
58
|
|
|
Section 11.8
|
New York Law to Govern; Waiver of Jury Trial
|
58
|
|
|
Section 11.9
|
Counterparts
|
58
|
|
|
Section 11.10
|
Effect of Headings
|
58
|
|
|
Section 11.11
|
Determination of Principal Amount; Calculation of Original Issue Discount
|
58
|
|
|
Section 11.12
|
Force Majeure
|
59
|
|
ARTICLE TWELVE REDEMPTION OF SECURITIES AND SINKING FUNDS
|
59
|
|
||
|
Section 12.1
|
Applicability of Article
|
59
|
|
|
Section 12.2
|
Notice of Redemption; Partial Redemptions
|
59
|
|
|
Section 12.3
|
Payment of Securities Called for Redemption
|
60
|
|
|
Section 12.4
|
Exclusion of Certain Securities from Eligibility for Selection for Redemption
|
61
|
|
|
Section 12.5
|
Mandatory and Optional Sinking Funds
|
61
|
|
(a)
|
Securities theretofore cancelled by the Trustee or delivered to the Trustee for cancellation;
|
(b)
|
Securities, or portions thereof, for the payment or redemption of which moneys in the necessary amount shall have been deposited in trust with the Trustee or with any paying agent (other than the Company) or shall have been set aside, segregated and held in trust by the Company for the holders of such Securities (if the Company shall act as its own paying agent), provided that if such Securities, or portions thereof, are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given as herein provided, or provision satisfactory to the Trustee shall have been made for giving such notice; and
|
(c)
|
Securities in substitution for which other Securities shall have been authenticated and delivered, or which shall have been paid, pursuant to the terms of Section 2.9 (except with respect to any such Security as to which proof satisfactory to the Trustee is presented that such Security is held by a person in whose hands such Security is a legal, valid and binding obligation of the Company).
|
The Bank of New York Mellon Trust Company, N.A.,
|
|
|
as Trustee
|
|
|
By:
|
|
|
Authorized Signatory
|
Dated:
|
|
(1)
|
the title of the Securities of the Series (which title shall distinguish the Securities of the Series from all other Securities issued by the Company) and whether such Securities are senior or subordinated;
|
(2)
|
any limit upon the aggregate principal amount of the Securities of the Series that may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the Series pursuant to Sections 2.8, 2.9, 2.11 or 12.3);
|
(3)
|
whether Securities of the Series are to be issuable as Registered Securities, Unregistered Securities or both, whether any Securities of the Series are to be issuable initially in temporary global form and whether any Securities of the Series are to be issuable in permanent global form with or without Coupons and, if so, (i) whether beneficial owners of interest in any such permanent global Security may exchange such interest for Securities of such Series and of like tenor of any authorized form and denomination and the circumstances under which any such exchanges may occur, if other than in the manner provided in Section 2.8 and (ii) the name of the depositary with respect to any global Security; if Securities are to be issuable as Unregistered Securities, the form of any required certifications
|
(4)
|
the Person to whom any interest in any Registered Security of the Series shall be payable, if other than the Person in whose name the Security (or one or more predecessor Securities) is registered at the close of business on the record date for such interest, the manner in which, or the Person to whom, any interest on any Unregistered Security of the Series shall be payable, if otherwise than upon presentation and surrender of the Coupons appertaining thereto as they severally mature, and the extent to which, or the manner in which, any interest payable on a temporary global Security on an interest payment date will be paid if other than in the manner provided in Section 2.11;
|
(5)
|
the date or dates on which the principal of the Securities of the Series is payable;
|
(6)
|
the rate or rates (or formula for determining such rates) at which the Securities of the Series shall bear interest, if any, the date or dates from which such interest shall accrue, the interest payment dates on which such interest shall be payable and the record dates for the determination of Holders to whom interest is payable; and the circumstances, if any, in which the Company may defer interest payments;
|
(7)
|
whether the interest rate or interest rate formula, as the case may be, for Securities of the Series may be reset at the option of the Company and, if so, the date or dates on which such interest rate or interest rate formula, as the case may be, may be reset;
|
(8)
|
the place or places where the principal and interest on Securities of the Series shall be payable (if other than as provided in Section 3.2), any Registered Securities of the Series may be surrendered for registration of transfer, Securities of the Series may be surrendered for exchange and notices and demands to or upon the Company in respect of the Securities of the Series and this Indenture may be served;
|
(9)
|
the price or prices at which, the period or periods within which and the terms and conditions upon which Securities of the Series may be redeemed or repurchased, in whole or in part, at the option of the Company or repaid at the option of the Holders;
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(10)
|
the obligation, if any, of the Company to redeem, purchase or repay Securities of the Series pursuant to any sinking fund or analogous provisions or at the option of a Holder thereof and the price or prices at which and the period or periods within which and the terms and conditions upon which Securities of the Series shall be redeemed, purchased or repaid, in whole or in part, pursuant to such obligation;
|
(11)
|
the denominations in which any Registered Securities of the Series may be issued, if other than denominations of $1,000 and any integral multiple thereof, and the denomination or denominations in which any Unregistered Securities of the Series may be issued, if other than the denomination of $5,000;
|
(12)
|
the form of the Securities (or forms thereof if Unregistered and Registered Securities shall be issuable in such Series), including such legends as required by law or as the Company deems necessary or appropriate, the form of any Coupons or Temporary Global Security which may be issued and the forms of any certificates which may be required hereunder or which the Company may require in connection with the offering, sale, delivery or exchange of Unregistered Securities;
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(13)
|
the currency or currencies, including composite currencies, in which payments of interest or principal are payable with respect to the Securities of the Series if other than the currency of the United States of America;
|
(14)
|
if the amount of payments of principal of or interest on the Securities of any Series may be determined with reference to the differences in the price of or rate of exchange between any indexes, currencies or commodities, the manner in which such amounts shall be determined;
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(15)
|
if other than the principal amount thereof, the portion of the principal amount of Securities of the Series which thereof pursuant to Section 5.1 or provable in bankruptcy pursuant to Section 5.2;
|
(16)
|
any additional Events of Default or restrictive covenants with respect to the Securities of such Series which are not set forth herein;
|
(17)
|
whether Securities of the Series are issuable in tranches;
|
(18)
|
any other terms or conditions upon which the Securities of the Series are to be issued (which terms shall not be inconsistent with the provisions of this Indenture); and
|
(19)
|
any trustees, authenticating or paying agents, transfer agents or registrars or any other agents with respect to the Securities of such Series.
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(1)
|
an Company Order requesting such authentication and setting forth delivery instructions if the Securities are not to be delivered to the Company;
|
(2)
|
any Board Resolution, Officer’s Certificate and/or supplemental indenture referred to in Sections 2.1 and 2.3 by or pursuant to which the forms of the Securities of any such Series were established;
|
(3)
|
an Officer’s Certificate setting forth the form and terms of the Securities stating that the form and terms of the Securities have been, or, in the case of a Periodic Offering, will be when established in accordance with such procedures as shall be referred to therein, established pursuant to Section 2.1 and 2.3 and comply with this Indenture, and covering such other matters as the Trustee may reasonably request;
|
(4)
|
an Opinion of Counsel to the effect that:
|
(a)
|
the form or forms and terms of such Securities have been, or, in the case of a Periodic Offering, will be when established in accordance with such procedures as shall be referred to therein, established pursuant to Sections 2.1 and 2.3 and comply with this Indenture;
|
(b)
|
the authentication and delivery of such Securities by the Trustee are authorized under the provisions of this Indenture;
|
(c)
|
such Securities, when authenticated and delivered by the Trustee and issued by the Company in the manner and subject to any conditions specified in such Opinion of Counsel, will constitute valid and binding obligations of the Company;
|
(d)
|
all laws and requirements in respect of the execution and delivery by the Company have been complied with; and
|
(e)
|
covering such other matters as the Trustee may reasonably request.
|
(1)
|
The Company may elect to make payment of any defaulted interest to the persons in whose names any such Registered Securities (or their respective predecessor Securities) are registered at the close of business on a special record date for the payment of such defaulted interest, which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of defaulted interest proposed to be paid on each Security of such Series and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such defaulted interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the persons entitled to such defaulted interest as in this clause provided. Thereupon, the Trustee, in consultation with the Company, shall fix a special record date for the payment of such defaulted interest in respect of Registered Securities of such Series which shall be not more than 15 nor less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such special record date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such defaulted interest and the special record date thereof to be mailed, first class postage prepaid, to each Registered Holder at his address as it appears in the Security register, not less than 10 days prior to such special record date. Notice of the proposed payment of such defaulted interest and the special record date therefor having been mailed as aforesaid, such defaulted interest in respect of Registered
|
(2)
|
The Company may make payment of any defaulted interest on the Securities of any Series in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of that Series may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this clause, such payment shall be deemed practicable by the Trustee.
|
A.
|
COVENANTS OF THE ISSUER
|
(a)
|
that it will hold all sums received by it as such Agent for the payment of the principal of or interest on the Securities of such Series or Coupons (whether such sums have been paid to it by the Company or by any other obligor on the Securities
|
(b)
|
that it will give the Trustee written notice of any failure by the Company (or by any other obligor on the Securities of such Series) to make any payment of the principal of or interest on the Securities of such Series or Coupons when the same shall be due and payable, and
|
(c)
|
that it will give the Trustee written notice of any change of address of any Holder of which it is aware.
|
(i)
|
liens on Principal Property existing at the time of acquisition of such Principal Property or to secure the payment of all or any part of the purchase price of such Principal Property or any addition thereto or to secure any indebtedness incurred at the time of, or within 120 days after, the acquisition of such Principal Property or any addition thereto for the purpose of financing all or any part of the purchase price thereof (provided such liens are limited to such Principal Property or additions thereto);
|
(ii)
|
liens existing on the date of this Indenture;
|
(iii)
|
liens on property or shares of capital stock, or arising out of any indebtedness of any corporation existing at the time such corporation became or was merged into the Company or a Restricted Subsidiary;
|
(iv)
|
liens executed by any Restricted Subsidiary and exclusively securing indebtedness or evidences of indebtedness incurred or issued by such Restricted Subsidiary either to the Company or to any Subsidiary;
|
(v)
|
liens arising from assignments of money due and to become due under contracts between the Company or any Restricted Subsidiary and the United States or any State, or any department, agency or political subdivision thereof;
|
(vi)
|
liens of carriers, warehousemen, mechanics and materialmen incurred in the ordinary course of business for sums not yet due or being contested in good faith;
|
(vii)
|
liens arising by reason of any judgment, decree or order of any court, so long as any appropriate legal proceedings which may have been duly initiated for the review of such judgment, decree or order shall not have been finally terminated or so long as the period within which such proceedings may be initiated shall not have expired; or pledges or deposits to secure payment of workmen’s compensation or other insurance, good faith deposits in connection with tenders, contracts (other than contracts for the payment of money) or leases, deposits to secure public or statutory obligations, deposits to secure public or statutory obligations, deposits to secure or in lieu of surety or appeal bonds, or deposits as security for the payment of taxes;
|
(viii)
|
liens in connection with the issuance of tax-exempt industrial development or pollution control bonds or other similar bonds issued pursuant to Section 103(b) of the Internal Revenue Code of 1986, as amended, or as hereafter amended (the “Internal Revenue Code”), to finance all or any part of the purchase price of or the cost of constructing, equipping or improving property; provided that such liens shall be limited to such property acquired (including personal property) or constructed or such improvement and to thereto substantially unimproved real property on which such construction
|
(ix)
|
liens in favor of any customer arising in respect of partial, progress, advance or other payments made by or on behalf of such customer for goods produced for or services rendered to such customer in the ordinary course of business not exceeding the amount of such payments;
|
(x)
|
extensions, renewals or replacements, in whole or in part, of any lien referred to in the foregoing clauses (i) to (ix), inclusive, provided that the principal amount of indebtedness secured thereby shall not exceed the principal amount of indebtedness so secured at the time of such extension, renewal or replacement and that such extension, renewal or replacement shall be limited to all or any part of the same property that secured the lien extended, renewed or replaced (plus improvements on such property); and
|
(xi)
|
(A) liens for taxes or assessments or governmental charges or levies not yet due or delinquent, or which can thereafter be paid without penalty, or which are being contested in good faith by appropriate proceedings; (B) landlord’s liens on property held under lease, and tenants’ rights under leases; (C) easements; and (D) any other liens of a nature similar to those hereinabove described in this clause (xi); in each case, which do not, in the opinion of the Company, materially impair the use of such property subject to such lien or covenant in the operation of the business of the Company or a Restricted Subsidiary or the value of such property for the purposes of such business.
|
(b)
|
Notwithstanding the provisions of paragraph (a) of this Section 3.6, the Company or any Restricted Subsidiary may create or assume liens; provided that at the time of such creation or assumption, and after giving effect thereto, Exempted Indebtedness does not exceed 15 percent of Consolidated Net Tangible Assets at such time.
|
b.
|
Notwithstanding the provisions of paragraph (a) of this Section 3.7, the Company or any Restricted Subsidiary may enter into Sale and Lease-Back Transactions, provided that at the time of such entering into, and after giving effect thereto, Exempted Indebtedness does not exceed 15 percent of Consolidated Net Tangible Assets at such time.
|
(a)
|
semiannually and not more than 10 days after each record date for the payment of interest on such Securities, as hereinabove specified, as of such record date and on dates to be determined pursuant to Section 2.3 for non-interest bearing securities in each year, and
|
(b)
|
at such other times as the Trustee may request in writing, within 30 days after receipt by the Company of any such request as of a date not more than 15 days prior to the time such information is furnished,
|
(b)
|
In case three or more Holders of Securities (hereinafter referred to as “applicants”) apply in writing to the Trustee and furnish to the Trustee reasonable proof that each such applicant has owned a Security for a period of at least six months preceding the date of such application, and such application states that the applicants desire to communicate with other Holders of Securities of a particular Series (in which case the applicants must all hold Securities of such Series) or with Holders of all Securities with respect to their rights under this Indenture or under such Securities and such application is accompanied by a copy of the form of proxy or other communication which such applicants propose to transmit, then the Trustee shall, within five business days after the receipt of such application, at its election, either
|
(i)
|
afford to such applicants access to the information preserved at the time by the Trustee in accordance with the provisions of subsection (a) of this Section, or
|
(ii)
|
inform such applicants as to the approximate number of Holders of Securities of such Series or all Securities, as the case may be, whose names and addresses appear in the information preserved at the time by the Trustee, in accordance with the provisions of subsection (a) of this Section, and as to the approximate cost of mailing to such Securityholders the form of proxy or other communication, if any, specified in such application.
|
(c)
|
Each and every Holder of Securities, by receiving and holding the same, agrees with the Company and the Trustee that neither the Company nor the Trustee nor any agent of the Company or the Trustee shall be held accountable by reason of the disclosure of any such information as to the names and addresses of the Holders of Securities in accordance with the provisions of subsection (b) of this Section, regardless of the source from which such information was derived, and that the Trustee shall not be held accountable by reason of mailing any material pursuant to a request made under such subsection (b).
|
(a)
|
to file with the Trustee, within 15 days after the Company files the same with the Commission, copies of the annual reports and of the information, documents, and other reports (or copies of such portions of any of the foregoing as the Commissioner may from time to time by rules and regulations prescribe) which the Company may be required to file with the Commission pursuant to Section 13 or Section 15(d) of the Exchange Act, and if the Company is not required to file
|
(b)
|
to file with the Trustee and the Commission, in accordance with rules and regulations prescribed from time to time by the Commission, such additional information, documents, and reports with respect to compliance by the Company with the conditions and covenants provided for in this Indenture as may be required from time to time by such rules and regulations; and
|
(c)
|
to transmit by mail to the Holders of Securities in the manner required by Section 11.4, within 30 days after the filing thereof with the Trustee, such summaries of any information, documents, and reports required to be filed by the Company pursuant to subsection (a) and (b) of this Section as may be required to be transmitted to such Holders by rules and regulations prescribed from time to time by the Commission; and
|
(d)
|
to furnish to the Trustee, not less often than annually, commencing on May 15, 2020, a brief certificate from the principal executive officer, principal financial officer or principal accounting officer of the Company as to his or her knowledge of the Company’s compliance with all conditions and covenants under this Indenture. For purposes of this paragraph, such compliance shall be determined without regard to any period of grace or requirement of notice provided under this Indenture.
|
(b)
|
A copy of each such report shall, at the time of such transmission to Securityholders, be furnished to the Company and be filed by the Trustee with each stock exchange upon which the Securities of any applicable Series are listed and also with the Commission. The Company agrees to promptly notify the Trustee with respect to any Series when and as the Securities of such Series become
|
(a)
|
default in the payment of any installment of interest upon any of the Securities of such Series as and when the same shall become due and payable, and continuance of such default for a period of 30 days; or
|
(b)
|
default in the payment of all or any part of the principal on any of the Securities of such Series as and when the same shall become due and payable either at maturity, upon redemption, by declaration or otherwise; or
|
(c)
|
default in the payment of any sinking fund installment as and when the same shall become due and payable by the terms of the Securities of such Series; or
|
(d)
|
default in the performance, or breach, of any covenant or warranty of the Company in respect of the Securities of such Series (other than a covenant or warranty in respect of the Securities of such Series a default in whose performance or whose breach is elsewhere in this Section specifically dealt with), and continuance of such default or breach for a period of 90 days after notice thereof has been received by the Company from the Trustee or the Holders of at least 25% in principal amount of the Outstanding Securities of such Series affected thereby, a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder; or
|
(e)
|
a court having jurisdiction in the premises shall enter a decree or order for relief in respect of the Company in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee or sequestrator (or similar official) of the Company or for any substantial part of its property or ordering the winding up or liquidation of its affairs, and such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or
|
(f)
|
the Company shall commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or consent to the entry of an order for relief in an involuntary case under any such law, or consent to the appointment of or taking possession by a receiver, liquidator, assignee, custodian,
|
(g)
|
default by Dow in the performance, or breach by Dow, of the covenant to issue a guarantee pursuant to Article 3.B; or
|
(h)
|
any other Event of Default provided in the supplemental indenture or Board Resolution under which such Series of Securities is issued or in the form of Security for such Series.
|
(a)
|
to file and prove a claim or claims for the whole amount of principal and interest owing and unpaid in respect of the Securities of any Series, and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for compensation to the Trustee and each predecessor Trustee, and their respective agents, attorneys and counsel, and for reimbursement of all fees and expenses and liabilities incurred, and all advances made, by the Trustee and each predecessor Trustee, except as a result of negligence or bad faith) and of the Securityholders and the Holders of any Coupons appertaining thereto allowed in any judicial proceedings relative to the Company or other obligor upon all Securities of any Series, or to the creditors or property of the Company or such other obligor,
|
(b)
|
unless prohibited by applicable law and regulations, to vote on behalf of the holders of the Securities of any Series in any election of a trustee or a standby trustee in arrangement, reorganization, liquidation or other bankruptcy or insolvency proceedings or person performing similar functions in comparable proceedings, and
|
(c)
|
to collect and receive any moneys or other property payable or deliverable on any such claims, and to distribute all amounts received with respect to the claims of the Securityholders and of the Trustee on their behalf; and any trustee, receiver, or liquidator, custodian or other similar official is hereby authorized by each of the Holders to make payments to the Trustee, and, in the event that the Trustee shall consent to the making of payments directly to the Securityholders, to pay to the Trustee such amounts as shall be sufficient to cover compensation to the Trustee, each predecessor Trustee and their respective agents, attorneys and counsel, and all other fees and expenses and liabilities incurred, and all advances made, by the Trustee and each predecessor Trustee except as a result of negligence or bad faith and all other amounts due to the Trustee or any predecessor Trustee pursuant to Section 6.6.
|
(a)
|
prior to the occurrence of an Event of Default with respect to the Securities of any Series and after the curing or waiving of all such Events of Default with respect to such Series which may have occurred:
|
(i)
|
the duties and obligations of the Trustee with respect to the Securities of any Series shall be determined solely by the express provisions of this Indenture, and the Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and
|
(ii)
|
in the absence of bad faith on the part of the Trustee, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any statements, certificates or opinions furnished to the Trustee and conforming to the requirements of this
|
(b)
|
the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer or Responsible Officers of the Trustee, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts; and
|
(c)
|
the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders pursuant to Section 5.9 relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture.
|
(a)
|
the Trustee may conclusively rely and shall be protected in acting or refraining from acting upon any resolution, Officer’s Certificate or any other certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, debenture, note, coupon, security or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties;
|
(b)
|
any request, direction, order or demand of the Company mentioned herein shall be sufficiently evidenced by an Officer’s Certificate (unless other evidence in respect thereof be herein specifically prescribed); and any resolution of the Board of Directors may be evidenced to the Trustee by a copy thereof certified by the secretary or any assistant secretary of the Company;
|
(c)
|
the Trustee may consult with counsel of its selection and any advice or Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted to be taken by it hereunder in good faith and in accordance with such advice or Opinion of Counsel;
|
(d)
|
the Trustee shall be under no obligation to exercise any of the trusts or powers vested in it by this Indenture at the request, order or direction of any of the Securityholders pursuant to the provisions of this Indenture, unless such Securityholders shall have offered to the Trustee reasonable security or indemnity satisfactory to the Trustee against the costs, expenses and liabilities which might be incurred therein or thereby;
|
(e)
|
the Trustee shall not be liable for any action taken or omitted by it in good faith and believed by it to be authorized or within the discretion, rights or powers conferred upon it by this Indenture;
|
(f)
|
the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys not regularly in its employ and the Trustee shall not be responsible for any misconduct or negligence on the part of any such agent or attorney appointed with due care by it hereunder;
|
(g)
|
whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, conclusively rely upon an Officer’s Certificate;
|
(h)
|
the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney at the sole cost of the Company and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation;
|
(i)
|
in no event shall the Trustee be responsible or liable for special, indirect, punitive or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action;
|
(j)
|
the Trustee shall not be deemed to have notice of any Default or Event of Default unless a written notice of any event which is in fact such a default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Securities and this Indenture; and
|
(k)
|
the rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder.
|
(b)
|
In case at any time any of the following shall occur:
|
(i)
|
the Trustee shall fail to comply with the provisions of Section 6.8 with respect to any Series of Securities after written request therefor by the Company or by any Securityholder who has been a bona fide Holder of a Security or Securities of such Series for at least six months; or
|
(ii)
|
the Trustee shall cease to be eligible in accordance with the provisions of Section 6.9 and shall fail to resign after written request therefor by the Company or by any Securityholder; or
|
(iii)
|
the Trustee shall become incapable of acting with respect to any Series of the Securities, or shall be adjudged a bankrupt or insolvent, or a receiver or liquidator of the Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation;
|
(c)
|
The Holders of a majority in aggregate principal amount of the Securities of each Series at the time Outstanding may at any time remove the Trustee with respect to Securities of such Series and appoint a successor trustee with respect to the Securities of such Series by delivering to the Trustee so removed, to the successor trustee so appointed and to the Company the evidence provided for in Section 7.1 of the action in that regard taken by the Securityholders.
|
(d)
|
Any resignation or removal of the Trustee with respect to any Series and any appointment of a successor trustee with respect to such Series pursuant to any of the provisions of this Section 6.10 shall become effective upon acceptance of appointment by the successor trustee as provided in Section 6.11.
|
The Bank of New York Mellon Trust Company, N.A.,
|
|
|
as Trustee
|
|
|
By:
|
|
|
As Authenticating Agent
|
|
|
By:
|
|
|
Authorized Signatory
|
|
|
Dated:
|
|
(b)
|
The ownership of Registered Securities shall be proved by the Security register.
|
(c)
|
The amount of Unregistered Securities held by any Person executing any instrument or writing as a Securityholder, the numbers of such Unregistered
|
(a)
|
to convey, transfer, assign, mortgage or pledge to the Trustee as security for the Securities of one or more Series any property or assets;
|
(b)
|
to evidence the succession of another corporation to the Company, or successive successions, and the assumption by the successor corporation of the covenants, agreements and obligations of the Company pursuant to Article Nine;
|
(c)
|
to add to the covenants of the Company, or of any guarantor of the Securities, such further covenants, restrictions, conditions or provisions as its Board of Directors and the Trustee shall consider to be for the protection of the Holders of Securities, and to make the occurrence, or the occurrence and continuance, of a default in any such additional covenants, restrictions, conditions or provisions an Event of Default permitting the enforcement of all or any of the several remedies provided in this Indenture as herein set forth; provided, that in respect of any such additional covenant, restriction, condition or provision such supplemental indenture may provide for a particular period of grace after default (which period may be shorter or longer than that allowed in the case of other defaults) or may provide for an immediate enforcement upon such an Event of Default or may limit the remedies available to the Trustee upon such an Event of Default or may limit the right of the Holders of a majority in aggregate principal amount of the Securities of such Series to waive such an Event of Default;
|
(d)
|
to cure any ambiguity or to correct or supplement any provision contained herein or in any supplemental indenture which may be defective or inconsistent with any other provision contained herein or in any supplemental indenture; or to make such other provisions in regard to matters or questions arising under this Indenture or under any supplemental indenture as the Board of Directors may deem necessary or desirable and which shall not materially and adversely affect the interests of the Holders of the Securities or the Holders of any Coupons;
|
(e)
|
to establish the form or terms of Securities of any Series as permitted by Sections 2.1 and 2.3;
|
(f)
|
to evidence and provide for the acceptance of appointment hereunder by a successor trustee with respect to the Securities of one or more Series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than the one trustee, pursuant to the requirements of Section 6.11;
|
(g)
|
to evidence the Guarantee by Dow pursuant to Article 3.B; or
|
(h)
|
to evidence a guarantee by any other entity that issues a guarantee in respect of the Securities.
|
(a)
|
If at any time (i) the Company shall have paid or caused to be paid the principal of and interest on all the Securities of any Series and Coupons, if any, appertaining thereto Outstanding hereunder (other than Securities and Coupons which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 2.9) as and when the same shall have become due and payable, or (ii) the Company shall have delivered to the Trustee for cancellation all Securities of any Series and Coupons theretofore authenticated (other than any Securities of such Series and Coupons which have been destroyed, lost or stolen and which shall have been replaced or paid as provided in Section 2.9) or (iii)(A) all the Securities of such Series and Coupons not theretofore delivered to the Trustee for cancellation shall have become due and payable, or are by their terms to become due and payable within one year or are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption, and (B) the Company shall have irrevocably deposited or caused to be deposited with
|
(b)
|
In addition to the provisions of Section 10.1(a), the Company may terminate its obligations under the Securities of any Series and this Indenture with respect to such Series, except those obligations referred to in the penultimate paragraph of this Section 10.1, if the Company has irrevocably deposited or caused to be deposited with the Trustee, under the terms of an irrevocable trust agreement in form and substance satisfactory to the Trustee, as trust funds in trust solely for the benefit of the Securityholders of such Series for that purpose, (i) cash or (ii) direct noncallable obligations of, or noncallable obligations guaranteed by, the United States of America or an agency thereof for the payment of which guarantee or obligation the full faith and credit of the United States of America is pledged (“U.S. Government Obligations”), or a combination thereof, maturing as to principal and interest in such amounts and at such times as are sufficient, without consideration of any reinvestment of such principal or interest, to pay the principal of and interest
|
THE DOW CHEMICAL COMPANY
|
|
as Issuer
|
|
|
|
By:
|
/s/Gary McGuire
|
|
Name: Gary McGuire
|
|
Title: Vice President and Treasurer
|
|
|
|
|
DOW INC.
|
|
as party with respect to sections described herein
|
|
|
|
By:
|
/s/Gary McGuire
|
|
Name: Gary McGuire
|
|
Title: Vice President and Treasurer
|
|
|
|
|
THE BANK OF NEW YORK MEELON TRUST COMPANY, N.A.
|
|
as Trustee
|
|
|
|
By:
|
/s/ Karen Yu
|
|
Name: Karen Yu
|
|
Title: Vice President
|
(a)
|
capitalized terms used herein without definition shall have the meanings specified in the Indenture;
|
(b)
|
all references herein to Articles and Sections, unless otherwise specified, refer to the corresponding Articles and Sections of this [l] Supplemental Indenture;
|
(c)
|
the terms “herein,” “hereof,” “hereunder” and other words of similar import refer to this [l] Supplemental Indenture; and
|
(d)
|
in the event of a conflict with the definition of terms in the Indenture, the definitions in this [l] Supplemental Indenture shall control.
|
THE DOW CHEMICAL COMPANY
|
|
|
|
By:
|
|
Name:
|
|
Title:
|
|
|
|
|
|
DOW INC.
|
|
|
|
By:
|
|
Name:
|
|
Title:
|
|
|
|
|
|
THE BANK OF NEW YORK MEELON TRUST COMPANY, N.A.,
|
|
|
|
as Trustee
|
|
|
|
By:
|
|
Name:
|
|
Title:
|
|
|
|
|
|
EXHIBIT 4.5
|
•
|
surplus; or
|
•
|
net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year, if there is no surplus.
|
•
|
not later than the close of business on the 90th day or earlier than the close of business on the 120th day prior to the anniversary date on which Dow Inc. first distributed its proxy materials for the prior year’s annual meeting; or
|
•
|
if the annual meeting is more than 30 days before or after the anniversary date of the prior year’s annual meeting, not earlier than the close of business on the 120th day prior to such annual meeting and not later than the close of business on the later of the 90th day prior to such annual meeting or the 10th day after the date on which public disclosure, as defined in Dow Inc.’s amended and restated bylaws, of the date of the annual meeting is first made by Dow Inc.
|
•
|
all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to and in accordance with Regulation 14A under the Exchange Act;
|
•
|
such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected and a representation by the nominee to the effect that, if elected, the nominee will agree to and abide by all policies of the board of directors as may be in place at any time and from time to time; and
|
•
|
any information required to be disclosed in the third following paragraph below if such person were a stockholder purporting to make a nomination or propose business.
|
•
|
a brief description of the business desired to be brought before the meeting;
|
•
|
the text of the proposal or business (including the text of any resolutions proposed for consideration and, in the event that such business includes a proposal to amend Dow Inc.’s amended and restated bylaws, the language of the proposed amendment);
|
•
|
the reasons for conducting such business at the meeting;
|
•
|
any substantial interest (within the meaning of Item 5 of Schedule 14A under the Exchange Act) in such business of such stockholder and the beneficial owner (within the meaning of Section 13(d) of the Exchange Act), if any, on whose behalf the business is being proposed;
|
•
|
any other information relating to such stockholder and beneficial owner, if any, required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for the proposal and pursuant to and in accordance with Section 14(/a) of the Exchange Act and the rules and regulations promulgated thereunder; and
|
•
|
a description of all agreements, arrangements, or understandings between or among such stockholder, or any affiliates or associates of such stockholder, and any other person or persons (including their names) in connection with the proposal of such business and any material interest of such stockholder or any affiliates or associates of such stockholder, in such business, including any anticipated benefit therefrom to such stockholder, or any affiliates or associates of such stockholder.
|
•
|
the name and address of such stockholder, as they appear on Dow Inc.’s books, and the name and address of such beneficial owner;
|
•
|
the class and number of shares of Dow Inc.’s capital stock which are owned (beneficially or of record) by such stockholder and such beneficial owner as of the date of the notice and a representation that such stockholder will promptly notify Dow Inc. in writing of the same as of the record date for the meeting promptly following the later of the record date or the date notice of the record date is first publicly disclosed;
|
•
|
a written representation that the stockholder is the holder of record of Dow Inc.’s shares entitled to vote at the meeting and intends to appear in person or by proxy at the meeting to propose such nomination or other business;
|
•
|
a description of any agreement, arrangement or understanding (including any derivative or short positions, profit interests, options, hedging transactions, and borrowed or loaned shares) that has been entered into as of the date of the stockholder’s notice by, or on behalf of, such stockholder or beneficial owner, the effect or intent of which is to mitigate loss, manage risk or benefit from changes in the share price of any class of Dow Inc.’s capital stock, or maintain, increase or decrease the voting power of the stockholder or beneficial owner with respect to shares of Dow Inc. stock and a representation that such stockholder will promptly notify Dow Inc. in writing of the same as of the record date for the meeting promptly following the later of the record date or the date notice of the record date is first publicly disclosed;
|
•
|
a representation that the stockholder is a holder of record of Dow Inc.’s shares entitled to vote at the meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice and that such stockholder will promptly notify Dow Inc. in writing of the same as of the record date for the meeting promptly following the later of the record date or the date notice of the record date is first publicly disclosed; and
|
•
|
a representation whether such stockholder intends to deliver a proxy statement and/or form of proxy to holders of at least the percentage of Dow Inc.’s outstanding capital stock required to approve the election of the nominee and/or otherwise to solicit proxies from stockholders in support of such election.
|
•
|
the class and number of shares of Dow Inc.’s capital stock which are beneficially owned (as defined in Dow Inc.’s amended and restated bylaws) as of the date of the notice, by the stockholder or the beneficial owner on whose behalf the notice is given and a representation that the stockholder shall notify Dow Inc. in writing within five business days after the record date for such meeting of the class and number of shares of Dow Inc.’s capital stock beneficially owned by such stockholder or beneficial owner as of the record date for the meeting;
|
•
|
a description of any agreement, arrangement or understanding with respect to the nomination or other business between or among such stockholder or beneficial owner and any other person, including without limitation any agreements that would be required to be disclosed pursuant to Item 5 or Item 6 of Exchange Act Schedule 13D (regardless of whether the requirement to file a Schedule 13D is applicable to the stockholder or beneficial owner) and a representation that the stockholder shall notify Dow Inc. in writing within five business days after the record date for such meeting of any such agreement, arrangement or understanding in effect as of the record date for the meeting; and
|
•
|
a description of any agreement, arrangement or understanding (including any derivative or short positions, profit interests, options, hedging transactions, and borrowed or loaned shares) that has been entered into as of the date of the stockholder’s notice by, or on behalf of, such stockholder or beneficial owner, the effect or intent of which is to mitigate loss, manage risk or benefit from changes in the share price of any class of Dow Inc.’s capital stock, or maintain, increase or decrease the voting power of the stockholder or beneficial owner with respect to shares of Dow Inc. stock and a representation that the stockholder shall notify Dow Inc. in writing within five business days after the record date for such meeting of any such agreement, arrangement or understanding in effect as of the record date for the meeting;
|
•
|
be delivered to, or mailed to and received by Dow Inc.’s Secretary at Dow Inc.’s principal executive offices;
|
•
|
be signed by each stockholder requesting the special meeting, or a duly authorized agent thereof;
|
•
|
set forth the purpose of the special meeting; and
|
•
|
include the same information required to be included in a stockholder’s notice for proposals to be brought before an annual meeting of stockholders (see “-Advance Notice Provisions for Director Nominations and Stockholder Proposals at an Annual or Special Stockholders’ Meeting”).
|
•
|
before the stockholder became interested, the board of directors approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder;
|
•
|
upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding, shares owned by persons who are directors and also officers, and employee stock plans, in some instances, but not the outstanding voting stock owned by the interested stockholder; or
|
•
|
at or after the time the stockholder became interested, the business combination was approved by the board of directors and authorized at an annual or special meeting of the stockholders by the affirmative vote of at least two-thirds of the outstanding voting stock which is not owned by the interested stockholder.
|
•
|
any merger or consolidation involving the corporation and the interested stockholder;
|
•
|
any sale, transfer, lease, pledge or other disposition involving the interested stockholder of 10% or more of the assets of the corporation;
|
•
|
subject to exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder;
|
•
|
subject to exceptions, any transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any class or series of the corporation beneficially owned by the interested stockholder; and
|
•
|
the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation.
|
•
|
accept for payment all notes or portions of notes (in a minimum principal amount of $2,000 and integral multiples of $1,000 above that amount) properly tendered pursuant to our offer;
|
•
|
deposit with the paying agent an amount equal to the aggregate purchase price in respect of all notes or portions of notes properly tendered; and
|
•
|
deliver or cause to be delivered to the trustee the notes properly accepted, together with an officer’s certificate stating the aggregate principal amount of notes being purchased by us.
|
•
|
DTC is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code and a “clearing agency” registered under Section 17A of the Exchange Act.
|
•
|
DTC holds securities that its participants deposit with DTC and facilitates the settlement among participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book-entry changes in participants’ accounts, thereby eliminating the need for physical movement of securities certificates.
|
•
|
Direct participants include securities brokers and dealers, banks, trust companies, clearing corporations and other organizations, some of whom, and/or their representatives, own DTC.
|
•
|
DTC is owned by a number of its direct participants and by The New York Stock Exchange, Inc., the American Stock Exchange LLC and the National Association of Securities Dealers, Inc.
|
•
|
Access to the DTC system is also available to others such as securities brokers and dealers, banks and trust companies that clear through or maintain a custodial relationship with a direct participant, either directly or indirectly.
|
•
|
The rules applicable to DTC and its direct and indirect participants are on file with the SEC.
|
•
|
upon deposit of the global notes with DTC or its custodian, DTC will credit on its internal system the accounts of direct participants designated by the underwriters with portions of the principal amounts of the global notes; and
|
•
|
ownership of the notes will be shown on, and the transfer of ownership thereof will be effected only through, records maintained by DTC or its nominee, with respect to interests of direct participants, and the records of direct and indirect participants, with respect to interests of persons other than participants.
|
•
|
DTC notifies us that it is no longer willing or able to act as a depositary for such global note or ceases to be a clearing agency registered under the Exchange Act, and we have not appointed a successor depositary within 90 days of that notice or becoming aware that DTC is no longer so registered;
|
•
|
an event of default has occurred and is continuing, and DTC requests the issuance of certificated notes; or
|
•
|
we determine not to have the notes of such series represented by a global note.
|
•
|
liens on principal property existing at the time of its acquisition or to secure the payment of all or part of the purchase price or any additions thereto or to secure any indebtedness incurred at the time of, or within 120 days after, the acquisition of such principal property or any addition thereto;
|
•
|
liens existing on the date of the indenture;
|
•
|
liens on property or shares of capital stock, or arising out of any indebtedness of any corporation existing at the time the corporation becomes or is merged into Dow or a restricted subsidiary;
|
•
|
liens which exclusively secure debt owing to Dow or a subsidiary by a restricted subsidiary;
|
•
|
liens of carriers, warehousemen, mechanics and materialmen incurred in the ordinary course of business for sums not yet due or being contested in good faith;
|
•
|
liens arising by reason of any judgment, decree or order of any court, so long as any appropriate legal proceedings which may have been duly initiated for the review of such judgment, decree or order shall not have been finally terminated or so long as the period within which such proceedings may be initiated shall not have expired; or pledges or deposits to secure payment of workmen’s compensation or other insurance, good faith deposits in connection with tenders, contracts (other than contracts for the payment of money) or leases, deposits to secure public or statutory obligations, deposits to secure public or statutory obligations, deposits to secure or in lieu of surety or appeal bonds, or deposits as security for the payment of taxes;
|
•
|
liens in connection with the issuance of tax-exempt industrial development or pollution control bonds or other similar bonds issued pursuant to Section 103(b) of the Internal Revenue Code to finance all or any part of the purchase price of or the cost of construction, equipping or improving property; provided that those liens are limited to the property acquired or constructed or the improvement and to substantially unimproved real property on which the construction or improvement is located; provided further, that Dow and its restricted subsidiaries may further secure all or any part of such purchase price or the cost of construction of any improvements and personal property by an interest on additional property of Dow and restricted subsidiaries only to the extent necessary for the construction, maintenance and operation of, and access to, the property so acquired or constructed or the improvement;
|
•
|
liens arising from assignments of money due under contracts of Dow or a restricted subsidiary with the United States or any State, or any department, agency or political subdivision of the United States or any State;
|
•
|
liens in favor of any customer arising in respect of payments made by or on behalf of a customer for goods produced for or services rendered to customers in the ordinary course of business not exceeding the amount of those payments;
|
•
|
any extension, renewal or replacement of any lien referred to in any of the previous clauses; and
|
•
|
statutory liens, liens for taxes or assessments or governmental charges or levies not yet due or delinquent or which can be paid without penalty or are being contested in good faith, landlord’s liens on leased property, easements and liens of a similar nature as those described above.
|
•
|
all current liabilities, excluding current liabilities that could be classified as long-term debt under generally accepted accounting principles and current liabilities that are by their terms extendible or renewable at the obligor’s option to a time more than 12 months after the time as of which the amount of current liabilities is being computed;
|
•
|
advances to entities accounted for on the equity method of accounting; and
|
•
|
intangible assets.
|
•
|
all trade names, trademarks, licenses, patents, copyrights and goodwill;
|
•
|
organizational and development costs;
|
•
|
deferred charges, other than prepaid items such as insurance, taxes, interest, commissions, rents and similar items and tangible assets being amortized; and
|
•
|
amortized debt discount and expense, less unamortized premium.
|
•
|
of which substantially all of the property of is located, and substantially all of the business is carried on, within the United States, excluding its territories and possessions and Puerto Rico; and
|
•
|
that owns or operates one or more principal properties;
|
•
|
the successor corporation is Dow or is a domestic corporation that assumes Dow’s obligations on the debt securities and under the indenture; and
|
•
|
after giving effect to the transaction, Dow or the successor corporation would not be in default under the indenture.
|
•
|
payment of all the debt securities of that series; or
|
•
|
the deposit with the trustee of cash or U.S. government obligations or a combination of cash and U.S. government obligations sufficient for the payment or redemption in accordance with the TDCC indenture and the terms of the debt securities of that series.
|
•
|
extend the final maturity of, reduce the rate or extend the time of payment of interest on, reduce the principal amount of, or reduce any amount payable on any redemption of, any debt securities; or
|
•
|
reduce the percentage in principal amount of outstanding debt securities of any series, the consent of whose holders is required for any supplemental indenture.
|
|
|
|
|
|
|
|
Subsidiaries of Dow Inc.
|
EXHIBIT 21
|
||||||||
|
|
|
|
|
|
|
At December 31, 2019
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Location*
|
This list includes companies for which the effective ownership by Dow Inc. is 50 percent or more.
|
||||||||||||||||
Dow Inc.
|
Delaware
|
|||||||||||||||
|
The Dow Chemical Company
|
Delaware
|
||||||||||||||
|
|
AM Robin LLC
|
Delaware
|
|||||||||||||
|
|
|
Warbler I LLC
|
Delaware
|
||||||||||||
|
|
American Mortell Corporation
|
Texas
|
|||||||||||||
|
|
|
Mortell Company
|
Delaware
|
||||||||||||
|
|
Arabian Chemical Company (Latex) Ltd. (1)
|
Saudi Arabia
|
|||||||||||||
|
|
Arabian Chemical Company (Polystyrene) Limited (1)
|
Saudi Arabia
|
|||||||||||||
|
|
Battleground Water Company
|
Texas
|
|||||||||||||
|
|
Chemars III LLC
|
Delaware
|
|||||||||||||
|
|
Chemtech II L.P.
|
Delaware
|
|||||||||||||
|
|
DCOMCO, Inc.
|
Delaware
|
|||||||||||||
|
|
Dow Chemical (China) Investment Company Limited
|
China
|
|||||||||||||
|
|
|
Dow Chemical (Guangzhou) Company Limited
|
China
|
||||||||||||
|
|
|
Dow Chemical (Shanghai) Company Limited
|
China
|
||||||||||||
|
|
|
Dow Chemical (Sichuan) Co., Ltd.
|
China
|
||||||||||||
|
|
|
Dow Chemical (Zhangjiagang) Company Limited
|
China
|
||||||||||||
|
|
|
Zhejiang Pacific Chemical Corporation
|
China
|
||||||||||||
|
|
Dow Chemical (Singapore) Private Limited
|
Singapore
|
|||||||||||||
|
|
Dow Chemical China Holdings Pte. Ltd.
|
Singapore
|
|||||||||||||
|
|
Dow Chemical Costa Rica S.A.
|
Costa Rica
|
|||||||||||||
|
|
Dow Chemical Delaware Corp.
|
Delaware
|
|||||||||||||
|
|
|
Chemtech II L.P.
|
Delaware
|
||||||||||||
|
|
|
|
Chemtech Portfolio Inc.
|
Texas
|
|||||||||||
|
|
|
|
Chemtech Portfolio II Inc.
|
Michigan
|
|||||||||||
|
|
Dow Chemical International Ltd.
|
Delaware
|
|||||||||||||
|
|
|
Dow Chemical Costa Rica S.A.
|
Costa Rica
|
||||||||||||
|
|
|
Dow Chemical Thailand Ltd.
|
Thailand
|
||||||||||||
|
|
|
|
MTP HPPO Manufacturing Company Limited
|
Thailand
|
|||||||||||
|
|
|
Dow International Holdings Company
|
Delaware
|
||||||||||||
|
|
|
Petroquimica-Dow S.A. (Petrodow)
|
Chile
|
||||||||||||
|
|
|
Univation Technologies, LLC
|
Delaware
|
||||||||||||
|
|
|
|
Univation Technologies (Hong Kong) Limited
|
Hong Kong
|
|||||||||||
|
|
|
|
|
Univation (Zhangjiagang) Chemical Company Limited
|
China
|
||||||||||
|
|
|
|
Univation Technologies International, LLC
|
Delaware
|
|||||||||||
|
|
Dow Chemical Kuwait B.V.
|
Netherlands
|
|||||||||||||
|
|
Dow Chemical Singapore Holdings Pte. Ltd.
|
Singapore
|
|||||||||||||
|
|
Dow Chemical Telecommunications Corp.
|
Delaware
|
|||||||||||||
|
|
Dow Silicones Corporation
|
Michigan
|
|||||||||||||
|
|
|
AM Robin LLC
|
Delaware
|
||||||||||||
|
|
|
DC Alabama, Inc.
|
Delaware
|
||||||||||||
|
|
|
DCC Litigation Facility, Inc.
|
Delaware
|
||||||||||||
|
|
|
Devonshire Underwriters Ltd.
|
District of Columbia
|
||||||||||||
|
|
|
Dow (Shanghai) Management Co., Ltd.
|
China
|
||||||||||||
|
|
|
Dow (Zhangjiagang) Holding Co., Ltd.
|
China
|
||||||||||||
|
|
|
Dow Chemical International Private Limited
|
India
|
||||||||||||
|
|
|
Dow Corning (Thailand) Limited
|
Thailand
|
||||||||||||
|
|
|
Dow Corning China Limited
|
Hong Kong
|
||||||||||||
|
|
|
Dow Luxembourg Spectrum Holding S.a.r.l.
|
Luxembourg
|
|
|
|
|
|
|
|
Subsidiaries of Dow Inc.
|
EXHIBIT 21
|
||||||||
|
|
|
|
|
|
|
At December 31, 2019
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Location*
|
This list includes companies for which the effective ownership by Dow Inc. is 50 percent or more.
|
||||||||||||||||
|
|
|
Dow Netherlands Tulip Holding B.V.
|
Netherlands
|
||||||||||||
|
|
|
Dow Silicones (Zhangjiagang) Co., Ltd.
|
China
|
||||||||||||
|
|
|
Dow Silicones Deutschland GmbH
|
Germany
|
||||||||||||
|
|
|
Valley Asset Leasing, LLC
|
Delaware
|
||||||||||||
|
|
Dow Deutschland Inc.
|
Delaware
|
|||||||||||||
|
|
|
Dow Chemical Inter-American Limited
|
Delaware
|
||||||||||||
|
|
|
|
Dow Quimica de Colombia S.A.
|
Colombia
|
|||||||||||
|
|
Dow Engineering Company
|
Delaware
|
|||||||||||||
|
|
|
Dow Engineering, Inc.
|
Michigan
|
||||||||||||
|
|
Dow Financial Services Inc.
|
Delaware
|
|||||||||||||
|
|
Dow Global Financial Management, Inc.
|
Delaware
|
|||||||||||||
|
|
Dow Global Technologies LLC
|
Delaware
|
|||||||||||||
|
|
|
Chemtech Portfolio Inc.
|
Texas
|
||||||||||||
|
|
|
Dow Technology Investments LLC
|
Delaware
|
||||||||||||
|
|
Dow Hydrocarbons and Resources LLC
|
Delaware
|
|||||||||||||
|
|
|
Cayuse Pipeline, Inc.
|
Texas
|
||||||||||||
|
|
|
Dow Intrastate Gas Company
|
Louisiana
|
||||||||||||
|
|
|
Dow Pipeline Company
|
Texas
|
||||||||||||
|
|
|
Fort Saskatchewan Ethylene Storage Corporation (1)
|
Canada
|
||||||||||||
|
|
|
|
Fort Saskatchewan Ethylene Storage Limited Partnership
|
Canada
|
|||||||||||
|
|
|
K/D/S Promix, LLC (1)
|
Texas
|
||||||||||||
|
|
Dow Internacional Mexicana S.A. de C.V.
|
Mexico
|
|||||||||||||
|
|
Dow International Holdings Company
|
Delaware
|
|||||||||||||
|
|
|
Dow Luxembourg Spectrum Holding S.a.r.l.
|
Luxembourg
|
||||||||||||
|
|
|
|
Dow Luxembourg Galaxy Holding S.a.r.l.
|
Luxembourg
|
|||||||||||
|
|
|
|
|
Dow Switzerland Holding GmbH
|
Switzerland
|
||||||||||
|
|
|
|
|
|
Dow (Shanghai) Holding Co., Ltd.
|
China
|
|||||||||
|
|
|
|
|
|
Dow Corning Silicones Malaysia Sdn. Bhd.
|
Malaysia
|
|||||||||
|
|
|
|
|
|
Dow Corning Singapore Pte. Ltd.
|
Singapore
|
|||||||||
|
|
|
|
|
|
|
Dow Corning (Thailand) Limited
|
Thailand
|
||||||||
|
|
|
|
|
|
Dow International Holdings S.A.
|
Switzerland
|
|||||||||
|
|
|
|
|
|
|
Dow Europe Holding B.V.
|
Netherlands
|
||||||||
|
|
|
|
|
|
|
|
BASF DOW HPPO B.V. (1)
|
Netherlands
|
|||||||
|
|
|
|
|
|
|
|
BASF DOW HPPO Technology B.V. (1)
|
Netherlands
|
|||||||
|
|
|
|
|
|
|
|
DoNedPa B.V.
|
Netherlands
|
|||||||
|
|
|
|
|
|
|
|
Dow Austria Gesellschaft m.b.H.
|
Austria
|
|||||||
|
|
|
|
|
|
|
|
Dow Belgium B.V.B.A.
|
Belgium
|
|||||||
|
|
|
|
|
|
|
|
Dow Benelux B.V.
|
Netherlands
|
|||||||
|
|
|
|
|
|
|
|
|
Polyol Belgium B.V.B.A.
|
Belgium
|
||||||
|
|
|
|
|
|
|
|
|
Terneuzen Partnership Services B.V.
|
Netherlands
|
||||||
|
|
|
|
|
|
|
|
|
|
Valuepark Terneuzen C.V. (1)
|
Netherlands
|
|||||
|
|
|
|
|
|
|
|
|
Valuepark Terneuzen Beheer B.V. (1)
|
Netherlands
|
||||||
|
|
|
|
|
|
|
|
|
|
Valuepark Terneuzen C.V. (1)
|
Netherlands
|
|||||
|
|
|
|
|
|
|
|
Dow Chemical Company Limited
|
United Kingdom
|
|||||||
|
|
|
|
|
|
|
|
|
Dow Chemical Services UK Limited
|
United Kingdom
|
||||||
|
|
|
|
|
|
|
|
|
Dow Limited
|
United Kingdom
|
||||||
|
|
|
|
|
|
|
|
|
Dow Services Trustees UK Limited
|
United Kingdom
|
||||||
|
|
|
|
|
|
|
|
|
Dow Trent Limited
|
United Kingdom
|
||||||
|
|
|
|
|
|
|
|
|
|
Dow Thames Limited
|
United Kingdom
|
|
|
|
|
|
|
|
Subsidiaries of Dow Inc.
|
EXHIBIT 21
|
||||||||
|
|
|
|
|
|
|
At December 31, 2019
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Location*
|
This list includes companies for which the effective ownership by Dow Inc. is 50 percent or more.
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
Hyperlast Limited
|
United Kingdom
|
||||||
|
|
|
|
|
|
|
|
|
Dow UK Limited
|
United Kingdom
|
||||||
|
|
|
|
|
|
|
|
Dow Chemical East Africa Limited
|
Kenya
|
|||||||
|
|
|
|
|
|
|
|
Dow Chemical Iberica S.L.
|
Spain
|
|||||||
|
|
|
|
|
|
|
|
|
Terminal de Atraque de Productos Petroquimicos, A.I.E. (1)
|
Spain
|
||||||
|
|
|
|
|
|
|
|
|
Transformadora de Etileno A.I.E. (1)
|
Spain
|
||||||
|
|
|
|
|
|
|
|
Dow Chemical Korea Limited
|
Korea
|
|||||||
|
|
|
|
|
|
|
|
Dow Chemical OOO
|
Russia
|
|||||||
|
|
|
|
|
|
|
|
Dow Chemical Romania S.R.L.
|
Romania
|
|||||||
|
|
|
|
|
|
|
|
Dow Chemical West Africa Limited
|
Ghana
|
|||||||
|
|
|
|
|
|
|
|
Dow Corning Australia Pty. Ltd.
|
Australia
|
|||||||
|
|
|
|
|
|
|
|
|
Dow Corning (Thailand) Limited
|
Thailand
|
||||||
|
|
|
|
|
|
|
|
Dow Corning de Argentina S.R.L.
|
Argentina
|
|||||||
|
|
|
|
|
|
|
|
Dow Danmark A/S
|
Denmark
|
|||||||
|
|
|
|
|
|
|
|
Dow Europe GmbH
|
Switzerland
|
|||||||
|
|
|
|
|
|
|
|
|
Dow Chemical IMEA GmbH
|
Switzerland
|
||||||
|
|
|
|
|
|
|
|
|
Dow Egypt Services Limited
|
Egypt
|
||||||
|
|
|
|
|
|
|
|
|
Dow International Finance S.a.r.l.
|
Luxembourg
|
||||||
|
|
|
|
|
|
|
|
|
Dow Mideast Systems S.A.E. (JSC)
|
Egypt
|
||||||
|
|
|
|
|
|
|
|
Dow Hellas A.E.
|
Greece
|
|||||||
|
|
|
|
|
|
|
|
Dow Hungary Kft.
|
Hungary
|
|||||||
|
|
|
|
|
|
|
|
Dow Industrial Chemical Products Nigeria Limited
|
Nigeria
|
|||||||
|
|
|
|
|
|
|
|
Dow InterBranch B.V.
|
Netherlands
|
|||||||
|
|
|
|
|
|
|
|
|
Dow Benelux Integrated Center B.V.
|
Netherlands
|
||||||
|
|
|
|
|
|
|
|
|
Dow Chemical East Africa Limited
|
Kenya
|
||||||
|
|
|
|
|
|
|
|
|
Dow Industrial Chemical Products Nigeria Limited
|
Nigeria
|
||||||
|
|
|
|
|
|
|
|
|
Dow Material Sciences Ltd.
|
Israel
|
||||||
|
|
|
|
|
|
|
|
|
Dow Materials Science Saudi Arabia Limited
|
Saudi Arabia
|
||||||
|
|
|
|
|
|
|
|
|
Dow Mideast Systems S.A.E. (JSC)
|
Egypt
|
||||||
|
|
|
|
|
|
|
|
|
Dow Morocco SARL
|
Morocco
|
||||||
|
|
|
|
|
|
|
|
|
Dow Norge A/S
|
Norway
|
||||||
|
|
|
|
|
|
|
|
|
Dow Quimica de Colombia S.A.
|
Colombia
|
||||||
|
|
|
|
|
|
|
|
|
Dow Silicones Belgium SPRL
|
Belgium
|
||||||
|
|
|
|
|
|
|
|
|
PT Rohm and Haas Indonesia
|
Indonesia
|
||||||
|
|
|
|
|
|
|
|
|
Rohm and Haas International SNC
|
France
|
||||||
|
|
|
|
|
|
|
|
|
Rohm and Haas Latinoamerica, S. de R.L. de C.V.
|
Mexico
|
||||||
|
|
|
|
|
|
|
|
|
Rohm and Haas Mexico, S. de R.L. de C.V.
|
Mexico
|
||||||
|
|
|
|
|
|
|
|
|
Santa Vitoria Acucar e Alcool Ltda.
|
Brazil
|
||||||
|
|
|
|
|
|
|
|
Dow Italia s.r.l.
|
Italy
|
|||||||
|
|
|
|
|
|
|
|
|
Dow Italia Divisione Commerciale s.r.l.
|
Italy
|
||||||
|
|
|
|
|
|
|
|
|
Rohm and Haas Italia S.r.l.
|
Italy
|
||||||
|
|
|
|
|
|
|
|
Dow Material Sciences Ltd.
|
Israel
|
|||||||
|
|
|
|
|
|
|
|
Dow Mideast Systems S.A.E. (JSC)
|
Egypt
|
|||||||
|
|
|
|
|
|
|
|
|
Dow Egypt Services Limited
|
Egypt
|
||||||
|
|
|
|
|
|
|
|
Dow Morocco SARL
|
Morocco
|
|||||||
|
|
|
|
|
|
|
|
Dow Olefinverbund GmbH
|
Germany
|
|||||||
|
|
|
|
|
|
|
|
|
Dow Deutschland Anlagengesellschaft mbH
|
Germany
|
||||||
|
|
|
|
|
|
|
|
|
Dow Deutschland Verwaltungs Vertriebs GmbH
|
Germany
|
||||||
|
|
|
|
|
|
|
|
|
|
Dow Produktions und Vertriebs GmbH & Co. OHG
|
Germany
|
|
|
|
|
|
|
|
Subsidiaries of Dow Inc.
|
EXHIBIT 21
|
||||||||
|
|
|
|
|
|
|
At December 31, 2019
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Location*
|
This list includes companies for which the effective ownership by Dow Inc. is 50 percent or more.
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
Dow Stade Produktions GmbH & Co. OHG
|
Germany
|
|||||
|
|
|
|
|
|
|
|
|
Dow MF Verwaltungs GmbH
|
Germany
|
||||||
|
|
|
|
|
|
|
|
|
|
Dow Produktions und Vertriebs GmbH & Co. OHG
|
Germany
|
|||||
|
|
|
|
|
|
|
|
|
|
Dow Stade Produktions GmbH & Co. OHG
|
Germany
|
|||||
|
|
|
|
|
|
|
|
|
Dow Pipeline Gesellschaft mbH & Co. KG
|
Germany
|
||||||
|
|
|
|
|
|
|
|
|
Dow Pipeline Verwaltungsgesellschaft mbH
|
Germany
|
||||||
|
|
|
|
|
|
|
|
|
Dow Silicones Deutschland GmbH
|
Germany
|
||||||
|
|
|
|
|
|
|
|
|
ROH Venture GmbH
|
Germany
|
||||||
|
|
|
|
|
|
|
|
Dow Performance Materials (Australia) Pty Ltd
|
Australia
|
|||||||
|
|
|
|
|
|
|
|
Dow Polska Sp.z.o.o.
|
Poland
|
|||||||
|
|
|
|
|
|
|
|
Dow Portugal - Produtos Quimicos, Sociedade Unipessoal, Lda.
|
Portugal
|
|||||||
|
|
|
|
|
|
|
|
Dow Saudi Arabia Holding B.V.
|
Netherlands
|
|||||||
|
|
|
|
|
|
|
|
Dow Saudi Arabia Investment B.V.
|
Netherlands
|
|||||||
|
|
|
|
|
|
|
|
|
Dow Materials Science Saudi Arabia Limited
|
Saudi Arabia
|
||||||
|
|
|
|
|
|
|
|
Dow Saudi Arabia Product Marketing B.V.
|
Netherlands
|
|||||||
|
|
|
|
|
|
|
|
Dow Silicones Belgium SPRL
|
Belgium
|
|||||||
|
|
|
|
|
|
|
|
Dow Silicones UK Limited
|
United Kingdom
|
|||||||
|
|
|
|
|
|
|
|
Dow Southern Africa (Pty) Ltd
|
South Africa
|
|||||||
|
|
|
|
|
|
|
|
Dow Starfish Holding B.V.
|
Netherlands
|
|||||||
|
|
|
|
|
|
|
|
Dow Suomi OY
|
Finland
|
|||||||
|
|
|
|
|
|
|
|
Dow Sverige AB
|
Sweden
|
|||||||
|
|
|
|
|
|
|
|
Dow Turkiye Kimya Sanayi ve Ticaret Limited Sirketi
|
Turkey
|
|||||||
|
|
|
|
|
|
|
|
|
Rohm and Haas Kimya Sanayi Limited Sirketi
|
Turkey
|
||||||
|
|
|
|
|
|
|
|
DowAksa Advanced Composites Holdings B.V. (1)
|
Netherlands
|
|||||||
|
|
|
|
|
|
|
|
EQUATE Marketing Company E.C. (1)
|
Bahrain
|
|||||||
|
|
|
|
|
|
|
|
Finndisp Ltd.
|
Russia
|
|||||||
|
|
|
|
|
|
|
|
HPPO Holding & Finance C.V. (1)
|
Netherlands
|
|||||||
|
|
|
|
|
|
|
|
MTP HPJV C.V.
|
Netherlands
|
|||||||
|
|
|
|
|
|
|
|
MTP HPJV Management B.V.
|
Netherlands
|
|||||||
|
|
|
|
|
|
|
|
Palmyra do Brasil Indústria e Comércio de Silício Metálico e Recursos Naturais Ltda.
|
Brazil
|
|||||||
|
|
|
|
|
|
|
|
Polyol Belgium B.V.B.A.
|
Belgium
|
|||||||
|
|
|
|
|
|
|
|
Rohm and Haas (UK) Limited
|
United Kingdom
|
|||||||
|
|
|
|
|
|
|
|
Rohm and Haas Denmark Holding Company ApS
|
Denmark
|
|||||||
|
|
|
|
|
|
|
|
|
Rohm and Haas Espana Production Holding, S.L.
|
Spain
|
||||||
|
|
|
|
|
|
|
|
|
|
Rohm and Haas Espana, S.L.
|
Spain
|
|||||
|
|
|
|
|
|
|
|
|
Rohm and Haas Europe Services ApS
|
Denmark
|
||||||
|
|
|
|
|
|
|
|
|
Rohm and Haas Europe Trading ApS
|
Denmark
|
||||||
|
|
|
|
|
|
|
|
|
Rohm and Haas Kimyasal Urunler Uretim Dagitim ve Ticaret A.S.
|
Turkey
|
||||||
|
|
|
|
|
|
|
|
Rohm and Haas Electronic Materials Europe Ltd.
|
United Kingdom
|
|||||||
|
|
|
|
|
|
|
|
Rohm and Haas International SNC
|
France
|
|||||||
|
|
|
|
|
|
|
|
|
Dow France S.A.S.
|
France
|
||||||
|
|
|
|
|
|
|
|
Rohm and Haas Nederland B.V.
|
Netherlands
|
|||||||
|
|
|
|
|
|
|
|
RUS Polyurethanes Holding B.V.
|
Netherlands
|
|||||||
|
|
|
|
|
|
|
|
|
Dow Izolan OOO
|
Russia
|
||||||
|
|
|
|
|
|
|
|
|
Dow Izolan Ukraine LLC
|
Ukraine
|
||||||
|
|
|
|
|
|
Dow Silicones (Shanghai) Co., Ltd.
|
China
|
|||||||||
|
|
|
|
|
|
Dow Silicones Holding Japan G.K.
|
Japan
|
|||||||||
|
|
|
|
|
|
|
Dow Toray Co., Ltd.
|
Japan
|
||||||||
|
|
|
|
|
|
|
|
Site Services Japan, Co., Ltd.
|
Japan
|
|
|
|
|
|
|
|
Subsidiaries of Dow Inc.
|
EXHIBIT 21
|
||||||||
|
|
|
|
|
|
|
At December 31, 2019
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Location*
|
This list includes companies for which the effective ownership by Dow Inc. is 50 percent or more.
|
||||||||||||||||
|
|
|
|
|
|
Dow Silicones Netherlands Holding B.V.
|
Netherlands
|
|||||||||
|
|
|
|
|
|
|
Dow Chemical Silicones Korea Ltd.
|
Korea
|
||||||||
|
|
|
|
|
|
Dow Siloxane (Zhangjiagang) Holding Co. Private Ltd.
|
Singapore
|
|||||||||
|
|
|
|
|
|
|
Dow Siloxanes (Zhangjiagang) Co., Ltd.
|
China
|
||||||||
|
|
|
DowBrands Inc.
|
Delaware
|
||||||||||||
|
|
|
Rohm and Haas Company
|
Delaware
|
||||||||||||
|
|
|
|
Charles Lennig & Company LLC
|
Delaware
|
|||||||||||
|
|
|
|
|
Rohm and Haas Chile Limitada
|
Chile
|
||||||||||
|
|
|
|
Dow Japan Holdings K.K.
|
Japan
|
|||||||||||
|
|
|
|
|
Dow Chemical Japan Limited
|
Japan
|
||||||||||
|
|
|
|
|
|
Japan Acrylic Chemical Co., Ltd.
|
Japan
|
|||||||||
|
|
|
|
ROH Holdings 1, LLC
|
Delaware
|
|||||||||||
|
|
|
|
|
Rohm and Haas Equity Corporation
|
Delaware
|
||||||||||
|
|
|
|
|
|
Dow Luxembourg Spectrum Holding S.a.r.l.
|
Luxembourg
|
|||||||||
|
|
|
|
|
|
ROH Holdings 2, LLC
|
Delaware
|
|||||||||
|
|
|
|
|
|
|
Rohm and Haas Chemicals LLC
|
Delaware
|
||||||||
|
|
|
|
|
|
|
|
Morton International, LLC
|
Indiana
|
|||||||
|
|
|
|
|
|
Rohm and Haas (Far East) Limited
|
Hong Kong
|
|||||||||
|
|
|
|
|
|
Rohm and Haas Chemical (Thailand) Limited
|
Thailand
|
|||||||||
|
|
|
|
|
|
Rohm and Haas China, Inc.
|
Delaware
|
|||||||||
|
|
|
|
|
|
|
Beijing Eastern Rohm and Haas Company Limited
|
China
|
||||||||
|
|
|
|
|
|
|
Rohm and Haas International Trading (Shanghai) Co. Ltd.
|
China
|
||||||||
|
|
|
|
|
|
|
Shanghai Eastern Rohm and Haas Co., Ltd.
|
China
|
||||||||
|
|
|
|
|
|
Rohm and Haas Denmark Finance A/S
|
Denmark
|
|||||||||
|
|
|
|
|
|
|
Dow Chemical International Private Limited
|
India
|
||||||||
|
|
|
|
|
|
|
PT Rohm and Haas Indonesia
|
Indonesia
|
||||||||
|
|
|
|
|
|
|
RH DK Mexico Holding ApS
|
Denmark
|
||||||||
|
|
|
|
|
|
|
RH DK Vietnam Holdings ApS
|
Denmark
|
||||||||
|
|
|
|
|
|
|
|
Rohm and Haas Vietnam Co., Ltd.
|
Vietnam
|
|||||||
|
|
|
|
|
|
|
Rohm and Haas (China) Holding Co., Ltd.
|
China
|
||||||||
|
|
|
|
|
|
|
Rohm and Haas (Foshan) Specialty Materials Co., Ltd.
|
China
|
||||||||
|
|
|
|
|
|
|
Rohm and Haas Chemicals Singapore Pte. Ltd.
|
Singapore
|
||||||||
|
|
|
|
|
|
|
Rohm and Haas Denmark China Investment ApS
|
Denmark
|
||||||||
|
|
|
|
|
|
|
Rohm and Haas Latinoamerica, S. de R.L. de C.V.
|
Mexico
|
||||||||
|
|
|
|
|
|
|
Rohm and Haas Singapore (Pte.) Ltd.
|
Singapore
|
||||||||
|
|
|
|
|
|
Rohm and Haas Korea Co., Ltd.
|
Korea
|
|||||||||
|
|
|
|
|
|
Rohm and Haas Malaysia Sdn Bhd
|
Malaysia
|
|||||||||
|
|
|
|
|
|
Rohm and Haas Texas Incorporated
|
Texas
|
|||||||||
|
|
|
|
|
|
|
Battleground Water Company
|
Texas
|
||||||||
|
|
|
|
Rohm and Haas Chile Limitada
|
Chile
|
|||||||||||
|
|
|
|
Rohm and Haas Equity Corporation
|
Delaware
|
|||||||||||
|
|
|
|
Rohm and Haas New Zealand Limited
|
New Zealand
|
|||||||||||
|
|
|
|
Dow Chemical Philippines, Inc.
|
Philippines
|
|||||||||||
|
|
|
|
Rohm and Haas Quimica Ltda.
|
Brazil
|
|||||||||||
|
|
Dow International Technology Corporation
|
Delaware
|
|||||||||||||
|
|
Dow Olefinverbund GmbH
|
Germany
|
|||||||||||||
|
|
Dow Peru S.A.
|
Peru
|
|||||||||||||
|
|
Dow Quimica Chilena S.A.
|
Chile
|
|||||||||||||
|
|
Dow Quimica de Colombia S.A.
|
Colombia
|
|
|
|
|
|
|
|
Subsidiaries of Dow Inc.
|
EXHIBIT 21
|
||||||||
|
|
|
|
|
|
|
At December 31, 2019
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Location*
|
This list includes companies for which the effective ownership by Dow Inc. is 50 percent or more.
|
||||||||||||||||
|
|
|
Rohm and Haas Colombia Ltda
|
Colombia
|
||||||||||||
|
|
Dow Quimica Mexicana S.A. de C.V.
|
Mexico
|
|||||||||||||
|
|
Dow Roofing Systems LLC
|
Delaware
|
|||||||||||||
|
|
Dow South Africa Holdings (Pty) Ltd.
|
South Africa
|
|||||||||||||
|
|
|
Sentrachem Limited
|
South Africa
|
||||||||||||
|
|
|
|
Cisvaal (Proprietary) Limited
|
South Africa
|
|||||||||||
|
|
Dow Verwaltungsgesellschaft mbH
|
Germany
|
|||||||||||||
|
|
DowBrands Inc.
|
Delaware
|
|||||||||||||
|
|
DuPont Asia Pacific Limited
|
Delaware
|
|||||||||||||
|
|
|
DuPont (Taiwan) Electronic Materials Limited
|
Taiwan
|
||||||||||||
|
|
|
DuPont Performance Materials (Shanghai) Co., Ltd.
|
China
|
||||||||||||
|
|
|
Materials Science (India) Private Limited
|
India
|
||||||||||||
|
|
|
Performance Material Products Korea Ltd.
|
Korea
|
||||||||||||
|
|
|
Performance Materials (Australia) Pty Ltd
|
Australia
|
||||||||||||
|
|
|
Performance Materials (Thailand) Limited
|
Thailand
|
||||||||||||
|
|
|
Performance Materials Japan Kabushiki Kaisha
|
Delaware
|
||||||||||||
|
|
|
|
Dow-Mitsui Polychemicals Company, Ltd (1)
|
Japan
|
|||||||||||
|
|
|
|
PM International Holding 3 B.V.
|
Netherlands
|
|||||||||||
|
|
|
|
|
Performance Materials do Brasil Comercio de Plasticos e Polimeros Ltda.
|
Brazil
|
||||||||||
|
|
|
|
|
SP International Holding 5 B.V.
|
Netherlands
|
||||||||||
|
|
|
|
|
|
Performance Materials do Brasil Comercio de Plasticos e Polimeros Ltda.
|
Brazil
|
|||||||||
|
|
|
Performance Specialty Products (Hong Kong) Limited
|
Hong Kong
|
||||||||||||
|
|
|
PM EMEA Holding 2 B.V.
|
Netherlands
|
||||||||||||
|
|
|
|
PM EMEA Holding 3 B.V.
|
Netherlands
|
|||||||||||
|
|
|
PM EMEA Holding 3 B.V.
|
Netherlands
|
||||||||||||
|
|
|
|
Performance Materials Rus LLC
|
Russia
|
|||||||||||
|
|
|
PM International 1 B.V.
|
Netherlands
|
||||||||||||
|
|
|
|
Performance Materials Products (Singapore) Pte. Ltd.
|
Singapore
|
|||||||||||
|
|
|
|
Performance Materials (Thailand) Limited
|
Thailand
|
|||||||||||
|
|
|
PM Japan, Inc.
|
Delaware
|
||||||||||||
|
|
|
PM LATAM, Inc.
|
Delaware
|
||||||||||||
|
|
|
|
Performance Materials Argentina SAU
|
Argentina
|
|||||||||||
|
|
|
|
Performance Materials Colombia S.A.S.
|
Colombia
|
|||||||||||
|
|
Essex Chemical Corporation
|
New Jersey
|
|||||||||||||
|
|
Flexible Products Company
|
Georgia
|
|||||||||||||
|
|
Forbanco Inc.
|
Delaware
|
|||||||||||||
|
|
General Latex and Chemical Corporation
|
Massachusetts
|
|||||||||||||
|
|
GNS Enterprises, LLC
|
Georgia
|
|||||||||||||
|
|
GWN Holding, LLC
|
Delaware
|
|||||||||||||
|
|
|
Dow Netherlands Pacific Holding B.V.
|
Netherlands
|
||||||||||||
|
|
|
|
Dow Netherlands Tulip Holding B.V.
|
Netherlands
|
|||||||||||
|
|
|
|
|
Dow Brasil Industria e Comercio de Produtos Quimicos Ltda.
|
Brazil
|
||||||||||
|
|
|
|
|
Dow Chemical Pacific (Singapore) Private Limited
|
Singapore
|
||||||||||
|
|
|
|
|
|
Dow Chemical (Malaysia) Sdn. Bhd.
|
Malaysia
|
|||||||||
|
|
|
|
|
|
Dow Chemical (Myanmar) Limited
|
Myanmar
|
|||||||||
|
|
|
|
|
|
Dow Chemical Bangladesh Private Limited
|
Bangladesh
|
|||||||||
|
|
|
|
|
|
Dow Chemical International Private Limited
|
India
|
|||||||||
|
|
|
|
|
|
Dow Chemical Pacific Limited
|
Hong Kong
|
|||||||||
|
|
|
|
|
|
Dow Chemical Vietnam Limited Liability Company
|
Vietnam
|
|
|
|
|
|
|
|
Subsidiaries of Dow Inc.
|
EXHIBIT 21
|
||||||||
|
|
|
|
|
|
|
At December 31, 2019
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Location*
|
This list includes companies for which the effective ownership by Dow Inc. is 50 percent or more.
|
||||||||||||||||
|
|
|
|
|
|
PT Dow Indonesia
|
Indonesia
|
|||||||||
|
|
|
|
|
|
Voltas Water Solutions Private Limited (1)
|
India
|
|||||||||
|
|
|
|
|
Rohm and Haas Canada Investments Limited
|
Canada
|
||||||||||
|
|
|
|
|
|
3229809 Nova Scotia Company
|
Canada
|
|||||||||
|
|
|
|
|
|
|
Dow Investment Argentina S.R.L.
|
Argentina
|
||||||||
|
|
|
|
|
|
|
|
Dow Quimica Argentina S.R.L.
|
Argentina
|
|||||||
|
|
|
|
|
|
|
|
PBBPolisur S.R.L.
|
Argentina
|
|||||||
|
|
|
|
|
|
|
|
|
Dow Quimica Argentina S.R.L.
|
Argentina
|
||||||
|
|
|
|
|
|
|
|
|
Rohm and Haas Argentina S.R.L.
|
Argentina
|
||||||
|
|
|
|
|
|
|
|
Rohm and Haas Argentina S.R.L.
|
Argentina
|
|||||||
|
|
|
|
|
|
|
PBBPolisur S.R.L.
|
Argentina
|
||||||||
|
|
|
|
|
|
|
Rohm and Haas Canada LP
|
Canada
|
||||||||
|
|
|
|
|
|
3308597 Nova Scotia Company
|
Canada
|
|||||||||
|
|
|
|
|
|
Dow Investment Argentina S.R.L.
|
Argentina
|
|||||||||
|
|
|
|
|
|
Rohm and Haas Canada LP
|
Canada
|
|||||||||
|
|
|
|
|
|
|
Dow Chemical Canada ULC
|
Canada
|
||||||||
|
|
|
|
|
|
|
|
3308597 Nova Scotia Company
|
Canada
|
|||||||
|
|
|
|
|
|
|
|
|
3294027 Nova Scotia Limited
|
Canada
|
||||||
|
|
|
|
|
|
|
|
|
Dow Netherlands Holding 1 B.V.
|
Netherlands
|
||||||
|
|
|
|
|
|
|
|
|
|
Dow Brasil Industria e Comercio de Produtos Quimicos Ltda.
|
Brazil
|
|||||
|
|
|
|
|
|
|
|
|
|
|
Dow Brasil Sudeste Industrial Ltda.
|
Brazil
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
Dow Especialidades Quimicas Ltda.
|
Brazil
|
|||
|
|
|
|
|
|
|
|
|
|
|
Dow Especialidades Quimicas Ltda.
|
Brazil
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
Dow Brasil Sudeste Industrial Ltda.
|
Brazil
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
Rohm and Haas Quimica Ltda.
|
Brazil
|
||
|
|
|
|
|
|
|
|
Dow Corning de Argentina S.R.L.
|
Argentina
|
|||||||
|
|
|
|
|
|
|
|
Dow Quimica de Colombia S.A.
|
Colombia
|
|||||||
|
|
|
|
|
|
|
|
Fort Saskatchewan Ethylene Storage Limited Partnership
|
Canada
|
|||||||
|
|
|
|
|
|
|
|
Palmyra do Brasil Indústria e Comércio de Silício Metálico e Recursos Naturais Ltda.
|
Brazil
|
|||||||
|
|
|
|
|
|
|
|
Pétromont and Company, Limited Partnership (1)
|
Canada
|
|||||||
|
|
|
|
|
|
|
|
Pétromont Inc. (1)
|
Canada
|
|||||||
|
|
|
|
|
|
SD Group Service Company Limited (1)
|
Thailand
|
|||||||||
|
|
|
|
|
|
Siam Polyethylene Company Limited (1)
|
Thailand
|
|||||||||
|
|
|
|
|
Sentrachem Limited
|
South Africa
|
||||||||||
|
|
Ifco Inc.
|
Delaware
|
|||||||||||||
|
|
|
Chemtech II L.P.
|
Delaware
|
||||||||||||
|
|
Liana Limited
|
Delaware
|
|||||||||||||
|
|
|
Dorinco Reinsurance Company
|
Michigan
|
||||||||||||
|
|
|
Dorintal Reinsurance Limited
|
Vermont
|
||||||||||||
|
|
Materials Science Holding, LLC
|
Delaware
|
|||||||||||||
|
|
|
Rohm and Haas International Holdings Inc.
|
Delaware
|
||||||||||||
|
|
|
|
Dow Chemical Singapore Holdings Pte. Ltd.
|
Singapore
|
|||||||||||
|
|
|
|
|
Dow Chemical (Australia) Pty Ltd
|
Australia
|
||||||||||
|
|
|
|
|
Dow Chemical (Myanmar) Limited
|
Myanmar
|
||||||||||
|
|
|
|
|
Dow Chemical (NZ) Limited
|
New Zealand
|
||||||||||
|
|
|
|
|
Dow Chemical Bangladesh Private Limited
|
Bangladesh
|
||||||||||
|
|
|
|
|
Dow Chemical International Private Limited
|
India
|
||||||||||
|
|
|
|
|
Dow Chemical Korea Limited
|
Korea
|
||||||||||
|
|
|
|
|
PT Dow Indonesia
|
Indonesia
|
|
|
|
|
|
|
|
Subsidiaries of Dow Inc.
|
EXHIBIT 21
|
||||||||
|
|
|
|
|
|
|
At December 31, 2019
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Location*
|
This list includes companies for which the effective ownership by Dow Inc. is 50 percent or more.
|
||||||||||||||||
|
|
|
|
|
Terneuzen Investments Holding B.V.
|
Netherlands
|
||||||||||
|
|
|
|
|
|
Dow Chemical Taiwan Limited
|
Taiwan
|
|||||||||
|
|
|
|
|
|
Rohm and Haas Taiwan, Inc.
|
Taiwan
|
|||||||||
|
|
NuvoSun, Inc.
|
California
|
|||||||||||||
|
|
|
NuvoSun (Shanghai) Co. Ltd.
|
China
|
||||||||||||
|
|
Performance Materials NA, Inc.
|
Delaware
|
|||||||||||||
|
|
Performance Science Materials Company
|
Canada
|
|||||||||||||
|
|
PM EMEA Holding 1 B.V.
|
Netherlands
|
|||||||||||||
|
|
|
Performance Materials Netherlands B.V.
|
Netherlands
|
||||||||||||
|
|
|
|
DuPont Performance Materials Deutschland GmbH
|
Germany
|
|||||||||||
|
|
|
|
DuPont Performance Materials Proprietary Limited
|
South Africa
|
|||||||||||
|
|
|
|
E&C EMEA Holding 1 B.V.
|
Netherlands
|
|||||||||||
|
|
|
|
|
DuPont Performance Materials International Sarl
|
Switzerland
|
||||||||||
|
|
|
|
Material Science de Mexico DDM, S. de R.L. de C.V.
|
Mexico
|
|||||||||||
|
|
|
|
Performance Materials (Thailand) Limited
|
Thailand
|
|||||||||||
|
|
|
|
Performance Materials Belgium BVBA
|
Belgium
|
|||||||||||
|
|
|
|
|
PM EMEA Cooperatief U.A.
|
Netherlands
|
||||||||||
|
|
|
|
Performance Materials Bulgaria EOOD
|
Bulgaria
|
|||||||||||
|
|
|
|
Performance Materials Czech Republic s.r.o.
|
Czech Republic
|
|||||||||||
|
|
|
|
Performance Materials Finland Oy
|
Finland
|
|||||||||||
|
|
|
|
Performance Materials France SAS
|
France
|
|||||||||||
|
|
|
|
Performance Materials Iberica, S.L.
|
Spain
|
|||||||||||
|
|
|
|
Performance Materials Italy srl
|
Italy
|
|||||||||||
|
|
|
|
Performance Materials Poland Sp. z o.o.
|
Poland
|
|||||||||||
|
|
|
|
Performance Materials Ukraine LLC
|
Ukraine
|
|||||||||||
|
|
|
|
Performance Specialty Products Pakistan (Pvt.) Limited
|
Pakistan
|
|||||||||||
|
|
|
|
PM EMEA Cooperatief U.A.
|
Netherlands
|
|||||||||||
|
|
|
|
|
DuPont Performance Materials UK Limited
|
United Kingdom
|
||||||||||
|
|
|
|
|
Performance Materials Belgium BVBA
|
Belgium
|
||||||||||
|
|
|
Performance Materials Ukraine LLC
|
Ukraine
|
||||||||||||
|
|
|
PM EMEA Holding 4 B.V.
|
Netherlands
|
||||||||||||
|
|
|
|
Performance Materials Turkey Endustri Urunleri Limited Sirketi
|
Turkey
|
|||||||||||
|
|
PM Mexico, LLC
|
Delaware
|
|||||||||||||
|
|
|
Material Science de Mexico DDM, S. de R.L. de C.V.
|
Mexico
|
||||||||||||
|
|
|
|
Material Science Servicos de Mexico DDM, S. de R.L. de C.V.
|
Mexico
|
|||||||||||
|
|
|
Material Science Servicos de Mexico DDM, S. de R.L. de C.V.
|
Mexico
|
||||||||||||
|
|
POLY-CARB, Inc.
|
Ohio
|
|||||||||||||
|
|
Rofan Services LLC
|
Delaware
|
|||||||||||||
|
|
|
H Hotel Holding LLC
|
Delaware
|
||||||||||||
|
|
|
|
MVCC Limited Partnership
|
Delaware
|
|||||||||||
|
|
|
MVCC Limited Partnership
|
Delaware
|
||||||||||||
|
|
Rohm and Haas Colombia Ltda
|
Colombia
|
|||||||||||||
|
|
Rohm and Haas Mexico, S. de R.L. de C.V.
|
Mexico
|
|||||||||||||
|
|
Santa Vitoria Acucar e Alcool Ltda.
|
Brazil
|
|||||||||||||
|
|
Sentrachem US, Inc.
|
Delaware
|
|||||||||||||
|
|
|
Hampshire Holdings, Inc.
|
Delaware
|
||||||||||||
|
|
|
|
Hampshire Chemical Corp.
|
Delaware
|
|||||||||||
|
|
Siam Polystyrene Company Limited (1)
|
Thailand
|
|||||||||||||
|
|
Siam Styrene Monomer Company Limited (1)
|
Thailand
|
|
|
|
|
|
|
|
Subsidiaries of Dow Inc.
|
EXHIBIT 21
|
||||||||
|
|
|
|
|
|
|
At December 31, 2019
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Location*
|
This list includes companies for which the effective ownership by Dow Inc. is 50 percent or more.
|
||||||||||||||||
|
|
Siam Synthetic Latex Company Limited (1)
|
Thailand
|
|||||||||||||
|
|
Terra Two Taiwan Limited
|
Taiwan
|
|||||||||||||
|
|
Tianjin Panda Terminal Holdings Pte. Ltd.
|
Singapore
|
|||||||||||||
|
|
|
Tianjin Panda Terminal (Hong Kong) Limited
|
Hong Kong
|
||||||||||||
|
|
Union Carbide Corporation
|
New York
|
|||||||||||||
|
|
|
Amerchol Corporation
|
Delaware
|
||||||||||||
|
|
|
Calidria Corporation
|
Delaware
|
||||||||||||
|
|
|
Carbide Chemical (Thailand) Limited
|
Thailand
|
||||||||||||
|
|
|
Dow Internacional Mexicana S.A. de C.V.
|
Mexico
|
||||||||||||
|
|
|
Dow International Holdings Company
|
Delaware
|
||||||||||||
|
|
|
Dow Quimica Mexicana S.A. de C.V.
|
Mexico
|
||||||||||||
|
|
|
Global Industrial Corporation
|
New York
|
||||||||||||
|
|
|
Peñuelas Technology Park LLC
|
Delaware
|
||||||||||||
|
|
|
Seadrift Pipeline Corporation
|
Delaware
|
||||||||||||
|
|
|
South Charleston Sewage Treatment Company
|
West Virginia
|
||||||||||||
|
|
|
UCAR Louisiana Pipeline Company
|
Delaware
|
||||||||||||
|
|
|
UCAR Pipeline Incorporated
|
Delaware
|
||||||||||||
|
|
|
|
Dow Quimica Chilena S.A.
|
Chile
|
|||||||||||
|
|
|
|
Dow Peru S.A.
|
Peru
|
|||||||||||
|
|
|
|
UCAR Emulsion Systems FZE
|
Dubai
|
|||||||||||
|
|
|
Umetco Minerals Corporation
|
Delaware
|
||||||||||||
|
|
|
|
Predate Properties (Pty) Ltd.
|
South Africa
|
|||||||||||
|
|
|
Union Carbide Asia Limited
|
Hong Kong
|
||||||||||||
|
|
|
Union Carbide Asia Pacific, Inc.
|
Delaware
|
||||||||||||
|
|
|
Union Carbide Chemicals & Plastics Technology LLC
|
Delaware
|
||||||||||||
|
|
|
|
Dow Technology Investments LLC
|
Delaware
|
|||||||||||
|
|
|
Union Carbide Customer Services Pte. Ltd.
|
Singapore
|
||||||||||||
|
|
|
Union Carbide Middle East Limited
|
Delaware
|
||||||||||||
|
|
|
Union Carbide Philippines (Far East), Inc.
|
Philippines
|
||||||||||||
|
|
|
Union Carbide South Africa (Proprietary) Limited
|
South Africa
|
||||||||||||
|
|
|
Westbridge Insurance Ltd.
|
Vermont
|
*
|
Location of incorporation or organization. Primary location of organization is reported for partnerships.
|
1.
|
These companies are 50 percent owned, nonconsolidated affiliates of Dow Inc. and are accounted for using the equity method. Separate financial statements of these companies are not included in this Annual Report on Form 10-K. These companies are not controlled, directly or indirectly, by Dow Inc. Subsidiaries of these companies, if any, are not listed in this Exhibit 21.
|
|
Consent of Independent Registered Public Accounting Firm
|
EXHIBIT 23.1.1
|
|
|
|
Form S-3:
|
|
|
|
No.
|
333-230668
|
|
333-232862
|
|
|
Form S-8:
|
|
|
|
Nos.
|
333-220352-01
|
|
333-230680
|
|
333-230681
|
/s/ DELOITTE & TOUCHE LLP
|
Deloitte & Touche LLP
|
Midland, Michigan
|
February 7, 2020
|
|
Consent of Independent Registered Public Accounting Firm
|
EXHIBIT 23.1.2
|
|
|
|
Form S-3:
|
|
|
|
No.
|
333-232862-01
|
|
|
Form S-4:
|
|
|
|
No.
|
333-88443
|
|
333-234108
|
|
|
Form S-8:
|
|
|
|
Nos.
|
33-61795
|
|
333-40271
|
|
333-91027
|
|
333-103519
|
|
333-220352
|
/s/ DELOITTE & TOUCHE LLP
|
Deloitte & Touche LLP
|
Midland, Michigan
|
February 7, 2020
|
|
Ankura Consulting Group, LLC's Consent
|
EXHIBIT 23.2
|
|
|
|
Form S-3:
|
|
|
|
No.
|
333-230668
|
|
333-232862
|
|
|
Form S-8:
|
|
|
|
Nos.
|
333-220352-01
|
|
333-230680
|
|
333-230681
|
Form S-3:
|
|
|
|
No.
|
333-232862-01
|
|
|
Form S-4:
|
|
|
|
No.
|
333-88443
|
|
333-234108
|
|
|
Form S-8:
|
|
|
|
Nos.
|
33-61795
|
|
333-40271
|
|
333-91027
|
|
333-103519
|
|
333-220352
|
/s/ AMY BROCKMAN
|
Amy Brockman
|
Senior Managing Director
|
Ankura Consulting Group, LLC
|
February 7, 2020
|
|
|
Dow Inc. and Subsidiaries
The Dow Chemical Company and Subsidiaries
|
|
EXHIBIT 31.1
|
1.
|
I have reviewed this Annual Report on Form 10-K of Dow Inc. and The Dow Chemical Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrants as of, and for, the periods presented in this report;
|
4.
|
The registrants' other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrants and have:
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrants, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
evaluated the effectiveness of the registrants' disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
disclosed in this report any change in the registrants' internal control over financial reporting that occurred during the registrants' most recent fiscal quarter (the registrants' fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants' internal control over financial reporting; and
|
5.
|
The registrants' other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants' auditors and the audit committee of registrants' board of directors (or persons performing the equivalent function):
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants' ability to record, process, summarize and report financial information; and
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants' internal control over financial reporting.
|
/s/ JIM FITTERLING
|
Jim Fitterling
|
Chief Executive Officer
|
February 7, 2020
|
|
|
Dow Inc. and Subsidiaries
The Dow Chemical Company and Subsidiaries
|
|
EXHIBIT 31.2
|
1.
|
I have reviewed this Annual Report on Form 10-K of Dow Inc. and The Dow Chemical Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrants as of, and for, the periods presented in this report;
|
4.
|
The registrants' other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrants and have:
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrants, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
evaluated the effectiveness of the registrants' disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
disclosed in this report any change in the registrants' internal control over financial reporting that occurred during the registrants' most recent fiscal quarter (the registrants' fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants' internal control over financial reporting; and
|
5.
|
The registrants' other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants' auditors and the audit committee of registrants' board of directors (or persons performing the equivalent function):
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants' ability to record, process, summarize and report financial information; and
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants' internal control over financial reporting.
|
/s/ HOWARD UNGERLEIDER
|
Howard Ungerleider
|
President and Chief Financial Officer
|
February 7, 2020
|
|
|
Dow Inc. and Subsidiaries
The Dow Chemical Company and Subsidiaries
|
|
EXHIBIT 32.1
|
1.
|
the Annual Report on Form 10-K of the Companies for the year ended December 31, 2019 as filed with the Securities and Exchange Commission (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Companies.
|
/s/ JIM FITTERLING
|
Jim Fitterling
|
Chief Executive Officer
|
February 7, 2020
|
|
|
Dow Inc. and Subsidiaries
The Dow Chemical Company and Subsidiaries
|
|
EXHIBIT 32.2
|
1.
|
the Annual Report on Form 10-K of the Companies for the year ended December 31, 2019 as filed with the Securities and Exchange Commission (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Companies.
|
/s/ HOWARD UNGERLEIDER
|
Howard Ungerleider
|
President and Chief Financial Officer
|
February 7, 2020
|