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As of the effective date and time of the distribution, DowDuPont did not beneficially own any equity interest in Dow and no longer consolidated Dow and its consolidated subsidiaries into its financial results.
−Removed: The consolidated financial results of Dow for all periods presented reflect the distribution of TDCC’s agricultural sciences business (“AgCo”) and specialty products business (“SpecCo”) as discontinued operations, as well as reflect the receipt of Historical DuPont’s ethylene and ethylene copolymers businesses (other than its ethylene acrylic elastomers business) (“ECP”) as a common control transaction from the closing of the Merger on August 31, 2017 ("Merger Date").
+Added: The consolidated financial results of Dow for the applicable periods presented reflect the distribution of TDCC’s agricultural sciences business (“AgCo”) and specialty products business (“SpecCo”) as discontinued operations, as well as reflect the receipt of Historical DuPont’s ethylene and ethylene copolymers businesses (other than its ethylene acrylic elastomers business) (“ECP”) as a common control transaction from the closing of the Merger on August 31, 2017 ("Merger Date").
See Note 3 to the Consolidated Financial Statements and Dow Inc.'s Amendment No.
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Throughout this Annual Report on Form 10-K, unless otherwise indicated, amounts and activity are presented on a continuing operations basis.
−Removed: Except as otherwise indicated by the context, the terms "Union Carbide" means Union Carbide Corporation, a wholly owned subsidiary of the Company, and "Dow Silicones" means Dow Silicones Corporation, a wholly owned subsidiary of the Company.
+Added: Except as otherwise indicated by the context, the term "Union Carbide" means Union Carbide Corporation and the term "Dow Silicones" means Dow Silicones Corporation, both wholly owned subsidiaries of the Company.
Items Affecting Comparability of Financial Results
−Removed: As a result of the separation from DowDuPont, pro forma net sales and pro forma Operating EBIT for the years ended December 31, 2019 and 2018 are provided in this section and based on the consolidated financial statements of TDCC, adjusted to give effect to the separation from DowDuPont as if it had been consummated on January 1, 2017.
+Added: As a result of the separation from DowDuPont, pro forma net sales and pro forma Operating EBIT for the year ended December 31, 2019 are provided in this section and based on the consolidated financial statements of TDCC, adjusted to give effect to the separation from DowDuPont as if it had been consummated on January 1, 2017.
Pro forma adjustments include (1) the margin impact of various manufacturing, supply and service related agreements entered into with DuPont and Corteva, Inc.
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These adjustments impacted the consolidated results as well as the reportable segments.
−Removed: See Note 26 to the Consolidated Financial Statements for a summary of the pro forma adjustments impacting segment measures for the years ended December 31, 2019 and 2018.
−Removed: STATEMENT ON COVID-19 AND OIL PRICE VOLATILITY
−Removed: Overview of Dow’s Response to COVID-19
+Added: See Note 26 to the Consolidated Financial Statements for a summary of the pro forma adjustments impacting segment measures for the year ended December 31, 2019.
+Added: STATEMENT ON COVID-19 AND U.S.
+Added: GULF COAST FREEZE
The pandemic caused by coronavirus disease 2019 ("COVID-19") has impacted all geographic regions where Dow products are produced and sold.
−Removed: Financial markets were volatile towards the end of the first quarter and early in the second quarter of 2020, primarily due to uncertainty with respect to the severity and duration of the pandemic, coupled with fluctuations in crude oil prices due in part to the global spread of COVID-19.
−Removed: As the second quarter progressed, crude oil prices increased, driven by improved supply and demand fundamentals, which continued into the second half of 2020.
−Removed: Financial markets also continued a gradual and uneven recovery in the second half of 2020.
−Removed: The global, regional and local spread of COVID-19 resulted in significant global mitigation measures, including government-directed quarantines, social distancing and shelter-in-place mandates, travel restrictions and/or bans, and restricted access to certain corporate facilities and manufacturing sites.
−Removed: Most of the Company’s manufacturing facilities have been designated essential operations by local governments.
−Removed: As a result, nearly all of the Company’s manufacturing sites and facilities continue to operate and are doing so safely, having implemented social distancing and enhanced health, safety and sanitization measures as directed by Dow's regional Crisis Management Teams (“CMTs”).
−Removed: The CMTs continue to work closely with site leadership and are adjusting alert levels as warranted on a site by site basis.
−Removed: In the second quarter of 2020, the CMTs initiated implementation of the Company’s comprehensive Return to Workplace ("RTW") plan that is tailored for each site and includes several health and safety measures to be followed in a gradual and phased approach.
−Removed: Employees in Europe, Middle East, Africa, and India ("EMEAI") and Asia Pacific returned to the workplace throughout the third quarter of 2020.
−Removed: In the fourth quarter of 2020, many EMEAI sites once again reduced on-site workforce in accordance with governmental regulations.
−Removed: A significant number of employees in the U.S.
−Removed: & Canada and Latin America continue to work remotely as the Company monitors the pandemic evolution, awaiting acceptable and safe levels to implement its RTW phases.
−Removed: If ongoing mitigation efforts are successful, sites in the U.S.
−Removed: & Canada expect to implement additional RTW phases in the first and second quarters of 2021 and Latin America anticipates RTW during the second quarter of 2021.
+Added: Throughout this public health crisis, the Company has been focused on the health and safety of its employees, contractors, customers and suppliers around the world and maintaining the safe and reliable operations of its manufacturing sites.
+Added: Although supply disruptions and related logistics issues have posed challenges across all modes of transportation, the Company’s manufacturing sites have continued to operate during the COVID-19 pandemic, with no significant impact to manufacturing whether through shutdowns or shortages in labor, raw materials or personal protective equipment.
+Added: Contingency plans remain in place in the event of significant impacts from COVID-19 infection resurgences.
+Added: In January 2022, the Company opened all sites and locations to employees, where permitted by local regulations, and continues to require that several health and safety measures be followed.
+Added: All regions continue to follow on-site workforce restrictions in accordance with government regulations.
At the time of this filing, approximately half of Dow’s global workforce is working remotely.
The Company continues to encourage its workforce to practice safe behaviors in the workplace and while away from work to help prevent community spread of COVID-19.
−Removed: Dow’s materials science expertise and production capabilities are used to develop some of the most vital hygiene and medical products and technologies to fight the COVID-19 pandemic, such as disinfectants, sanitizers, cleansers, plastics used in the production of disposable personal protective equipment for medical professionals, and memory foam for hospital beds.
−Removed: The Company has continued to look for ways to contribute time, talent and materials science expertise to help fight and combat the pandemic while creating some new opportunities for innovation and business.
−Removed: Dow’s contributions to fight the COVID-19 pandemic included the following:
−Removed: • The Company collaborated with nine key partners across a myriad of industries to develop and donate 100,000 isolation gowns to help equip frontline workers in Texas, Louisiana and Mexico.
−Removed: • Dow, Whirlpool Corporation and Reynolds Consumer Products jointly developed a powered, air-purifying respirator which takes the place of a traditional medical face mask and face shield.
−Removed: • Dow developed and shared an open source design for a simplified face shield and donated 100,000 face shields to hospitals in Michigan.
−Removed: • Five Dow sites in the United States, Europe and Latin America produced more than 200 metric tons of hand sanitizer, equivalent to more than 880,000 eight-ounce bottles, which were primarily donated to local health systems and government agencies.
−Removed: • The Company and The Dow Company Foundation committed $4 million to aid COVID-19 relief efforts, with donations going towards global relief organizations, as well as non-profits in communities where Dow operates.
−Removed: During this public health crisis, the Company is focused on the health and safety of its employees, contractors, customers and suppliers around the world and maintaining the safe and reliable operations of its manufacturing sites.
−Removed: Although supply disruptions and related logistical issues have posed challenges across all modes of transportation, the Company’s manufacturing sites have continued to operate during the COVID-19 pandemic, with no significant impact to manufacturing whether through shutdowns or shortages in labor, raw materials or personal protective equipment.
−Removed: Supply chain and logistical challenges are expected to stabilize in 2021.
−Removed: Contingency plans remain in place in the event of significant impacts from COVID-19 infection resurgences.
−Removed: The Company continues to maintain a strong financial position and build further liquidity in the midst of the economic recession triggered by the COVID-19 pandemic.
−Removed: The Company started 2020 with significant committed liquidity facilities.
−Removed: As markets became more volatile and uncertain during the first quarter of 2020, the Company took proactive measures to further bolster liquidity by drawing down certain uncommitted credit facilities, which were subsequently repaid in the second quarter of 2020, and partially monetizing investments in company-owned life insurance policies, which were fully repaid in the fourth quarter of 2020.
−Removed: At December 31, 2020, the Company had cash and committed and available forms of liquidity of $14.6 billion.
−Removed: The Company also has no substantive long-term debt maturities until the second half of 2024.
−Removed: The Company took proactive actions to electively focus on cash and maintain financial strength with a continued emphasis on safe, reliable operations and disciplined capital allocation.
−Removed: These actions included:
−Removed: • Further reduced the 2020 capital expenditures to $1.25 billion.
−Removed: • Decreased operating expenses by $500 million through structural cost improvements.
−Removed: • Unlocked nearly $500 million in structural improvements in working capital.
−Removed: • Temporarily suspended share repurchases.
−Removed: • Delayed planned maintenance turnaround spending, where appropriate, without compromising safety or the ability to serve customer needs.
−Removed: • Temporarily idled select manufacturing facilities to balance production to demand across markets more severely affected by restrained economic activity.
−Removed: This included the idling of three polyethylene production units and two elastomers units;
−Removed: running Dow's polyurethanes assets, including propylene oxide and methylene diphenyl diisocyanate, at reduced operating rates;
−Removed: reducing siloxanes operating rates globally and extending a planned maintenance turnaround at a silicones production unit in Zhangjiagang, China.
−Removed: All of these assets returned to more normalized operating rates in the third quarter of 2020.
−Removed: • Implementing a restructuring program ("2020 Restructuring Program"), which was approved by the Board of Directors ("Board") of Dow Inc.
−Removed: on September 29, 2020, targeting more than $300 million in annualized Operating EBITDA 1 benefit by the end of 2021.
−Removed: This program includes a 6 percent reduction in Dow’s global workforce costs as well as actions to rationalize the Company's manufacturing assets, including asset write-down and write-off charges, related contract termination fees and environmental remediation costs.
−Removed: See Note 6 to the Consolidated Financial Statements for additional information.
−Removed: Review of 2020 Financial Impacts from COVID-19
−Removed: Net sales were $38.5 billion in 2020, down 10 percent from net sales of $43.0 billion in 2019, as the COVID-19 pandemic disrupted the global economy and supply and demand fundamentals.
−Removed: The most significant impacts from the pandemic occurred in the first half of the year, with a gradual yet uneven recovery taking hold as the second half of the year progressed.
−Removed: In the first six months of 2020, the Company's sales declined 18 percent compared with the same period last year, with the most significant impact on demand in the second quarter of 2020.
−Removed: Strong demand in food packaging, health and hygiene, home care and pharma end-markets was more than offset by volume declines for products used in consumer durable good end-markets, including construction, furniture and bedding and automotive, with the most notable impacts in the Industrial Intermediates & Infrastructure and Performance Materials & Coatings operating segments.
−Removed: Demand for products used in consumer durable goods remained lower through the second quarter largely due to the delayed restart in these industries from May to June.
−Removed: Operating EBITDA is a non-GAAP measure.
−Removed: Dow defines Operating EBITDA as earnings (i.e., "Income (loss) from continuing operations before income taxes") before interest, depreciation and amortization, excluding the impact of significant items.
−Removed: Local price declined in the first and second quarters of 2020, largely impacted by lower global energy prices.
−Removed: In March and April 2020, crude oil prices declined significantly, due in part to the COVID-19 pandemic, coupled with increased supply from oil producers.
−Removed: Crude oil prices increased in the latter half of the second quarter as supply and demand fundamentals improved, driving higher feedstock costs, which proved beneficial to product prices and margins in the third and fourth quarters of 2020.
−Removed: In the third quarter of 2020, net sales increased 16 percent compared with the second quarter of 2020, due to increasing demand and higher local prices.
−Removed: Sales increased sequentially in all operating segments and geographic regions, reflecting improved demand trends in furniture and bedding, appliances, packaging, construction and automotive end-markets.
−Removed: Local price also increased sequentially, reflecting higher global energy prices and improved supply and demand fundamentals, with increases in all geographic regions.
−Removed: Local price increases were reported in Packaging & Specialty Plastics and Industrial Intermediates & Infrastructure, which more than offset declines in Performance Materials & Coatings.
−Removed: Operating rates increased from second quarter lows, as the Company raised rates to match demand trends as the global economic recovery gained traction.
−Removed: The Company's deliberate focus on structural cost reductions and prudent cash management resulted in sequentially higher margins and cash flow in the third quarter of 2020.
−Removed: Net sales in the fourth quarter of 2020 increased 10 percent sequentially, with continued demand recovery as the global economy continued to strengthen.
−Removed: Sales increased sequentially in all operating segments and geographic regions, reflecting strong supply and demand fundamentals which drove both price and volume gains.
−Removed: Local price increased in all segments and all geographic regions.
−Removed: Volume increased in all geographic regions and in Packaging & Specialty Plastics and Industrial Intermediates & Infrastructure, reflecting consumer-driven demand and industrial market recovery.
−Removed: Volume declined in Performance Materials & Coatings, primarily due to seasonal demand declines for coating applications.
−Removed: Operating rates continued to increase in the fourth quarter of 2020 and margins expanded.
−Removed: Notably, net sales in the fourth quarter of 2020 increased 5 percent compared with the fourth quarter of 2019, with increases in local price and volume.
−Removed: Local price increased 2 percent compared with the same quarter last year, primarily driven by improved pricing in polyethylene and polyurethane applications.
−Removed: Volume returned to pre-pandemic levels in all operating segments and was led by demand growth in Packaging & Specialty Plastics and Performance Materials & Coatings.
−Removed: The Company enters 2021 with sequential momentum and is well-positioned for continued profitable growth in the ongoing economic recovery and improving industry cycle.
+Added: The Company is well-positioned for continued profitable growth in the ongoing economic recovery and improving industry cycle.
The Company will maintain its disciplined focus on capital allocation priorities as it benefits from an improving cost structure, financial flexibility and a low-cost operating model.
−Removed: As the market recovery broadens, Dow anticipates increasing margins as differentiated parts of the portfolio see improving demand.
−Removed: Longer-term, the Company expects to deliver ongoing significant value through increased innovation, operational efficiencies and a leading environmental, social, and governance profile that will further distinguish Dow from its peers.
−Removed: At the time of this filing, the ultimate severity and duration of the COVID-19 pandemic cannot be reasonably estimated.
−Removed: Th e COVID-19 pandemic has had, and could continue to have, a substantial negative impact on the Company’s results of operations, financial condition and cash flows.
−Removed: The effects of the COVID-19 pandemic for the year ended December 31, 2020 and the additional risks associated with these conditions are more fully discussed in this report in Part I, Item 1A, Risk Factors.
−Removed: The Company is actively monitoring for potential financial impacts from the COVID-19 pandemic and oil price volatility, including, but not limited to:
−Removed: gauging the financial health of its customers;
−Removed: assessing liquidity;
−Removed: evaluating the recoverability of its assets;
−Removed: enhancing cyber security monitoring;
−Removed: and evaluating ongoing appropriateness of its estimates.
−Removed: The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted on March 27, 2020 in the United States.
−Removed: While there have been no significant impacts to the Company's provision for income taxes on continuing operations in 2020 as a result of the CARES Act legislation, the Company filed a tax loss carryback claim for $ 291 million in accordance with the provisions of the CARES Act.
+Added: Through the ongoing market recovery, Dow has experienced increasing margins as differentiated parts of the portfolio see improved demand and underlying market dynamics, which has enabled a return to pre-COVID-19 sales levels and end-market growth across most businesses.
+Added: The Company has continued to maintain a strong financial position and liquidity throughout the economic recession triggered by the COVID-19 pandemic and its ongoing recovery.
+Added: At December 31, 2021, the Company had cash and committed and available forms of liquidity of $12.6 billion.
+Added: The Company also has no substantive long-term debt maturities due until 2026.
+Added: Additional information regarding the risks associated with the COVID-19 pandemic can be found in this report in Part 1, Item 1A, Risk Factors.
+Added: Gulf Coast Freeze
+Added: In the first quarter of 2021, Winter Storm Uri had a broad impact on the U.S.
+Added: Gulf Coast and in particular across the entire state of Texas, which resulted in widespread utility and raw material supply disruptions and industry-wide production outages.
+Added: All Dow ethylene production facilities located on the U.S.
+Added: Gulf Coast were operational by March 31, 2021, along with all sites.
+Added: As a result of the winter storm, the product and supply chain impacts across the industry created very tight supply dynamics and generated pricing momentum for both raw materials and finished goods.
+Added: The Company remains close to its customers and continues to work diligently to meet demand needs.
Table of Contents Page
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Asbestos-Related Matters of Union Carbide Corporation
−Removed: Dow combines global breadth, asset integration and scale, focused innovation and leading business positions to achieve profitable growth.
−Removed: The Company’s ambition is to become the most innovative, customer centric, inclusive and sustainable materials science company, with a purpose to deliver a sustainable future for the world through our materials science expertise and collaboration with our partners .
−Removed: Dow’s portfolio of plastics, industrial intermediates, coatings and silicones businesses delivers a broad range of differentiated science-based products and solutions for its customers in high-growth market segments, such as packaging, infrastructure, mobility and consumer care.
+Added: Dow combines global breadth;
+Added: asset integration and scale;
+Added: focused innovation and materials science expertise;
+Added: leading business positions;
+Added: and environmental, social and governance (ESG) leadership to achieve profitable growth and deliver a sustainable future.
+Added: The Company’s ambition is to become the most innovative, customer centric, inclusive and sustainable materials science company in the world.
+Added: Dow’s portfolio of plastics, industrial intermediates, coatings and silicones businesses delivers a broad range of differentiated, science-based products and solutions for its customers in high-growth market segments, such as packaging, infrastructure, mobility and consumer applications.
Dow operates 104 manufacturing sites in 31 countries and employs approximately 35,700 people.
In 2021, the Company had annual sales of $55 billion, of which 36 percent of the Company’s sales were to customers in the U.S.
−Removed: 34 percent were in EMEAI;
+Added: 36 percent were in Europe, Middle East, Africa and India ("EMEAI");
while the remaining 28 percent were to customers in Asia Pacific and Latin America.
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State Department or in countries designated by the U.S.
−Removed: State Department as state sponsors of terrorism, including Iran, the Democratic People's Republic of Korea (North Korea), Sudan and Syria.
+Added: State Department as state sponsors of terrorism, including Cuba, Iran, the Democratic People's Republic of Korea (North Korea), Sudan and Syria.
The Company has policies and procedures in place designed to ensure that it and its consolidated subsidiaries remain in compliance with applicable U.S.
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The following is a summary of the results from continuing operations for the Company for the year ended December 31, 2021:
−Removed: The Company reported net sales in 2020 of $38.5 billion, down 10 percent from $43.0 billion in 2019, with declines across all geographic regions and operating segments, reflecting the impact of the COVID-19 pandemic on economies and supply and demand fundamentals, most notably in the first half of the year.
−Removed: These declines were due to a decrease in local price of 7 percent and a volume decline of 3 percent.
−Removed: Currency was flat.
−Removed: Local price decreased 7 percent compared with the same period last year, with decreases in all operating segments, including a double-digit decline in Packaging & Specialty Plastics (down 11 percent).
−Removed: Local price decreased in all geographic regions, including a double-digit decline in EMEAI (down 12 percent).
−Removed: Volume decreased 3 percent compared with 2019.
−Removed: Industrial Intermediates & Infrastructure and Performance Materials & Coatings reported volume declines (both down 6 percent) while Packaging & Specialty Plastics volume increased 1 percent.
−Removed: Volume decreased in the U.S.
−Removed: & Canada (down 8 percent), partially offset by an increase in EMEAI (up 1 percent).
−Removed: Volume was flat in Asia Pacific and Latin America.
−Removed: Restructuring and asset related charges - net were $ 708 million in 2020, primarily reflecting actions taken under the 2020 Restructuring Program.
−Removed: Integration and separation costs for Dow Inc.
−Removed: and TDCC were $239 million in 2020, down from $1,063 million and $1,039 million, respectively, in 2019, reflecting the wind-down of post-Merger integration and business separation activities.
−Removed: Integration and separation activities were completed as of December 31, 2020.
−Removed: Equity in earnings (losses) of nonconsolidated affiliates was a loss of $18 million in 2020, compared with a loss of $94 million in 2019.
−Removed: Equity in earnings (losses) of nonconsolidated affiliates improved primarily due to lower equity losses from Sadara Chemical Company ("Sadara") which were partially offset by lower equity earnings from the Kuwait joint ventures.
+Added: The Company reported net sales in 2021 of $55 billion, up 43 percent from $38.5 billion in 2020, with increases across all geographic regions and operating segments, driven by an increase in local price of 40 percent, a volume increase of 1 percent and a favorable currency impact of 2 percent.
+Added: Local price increased 40 percent compared with the same period last year, with increases in all operating segments and geographic regions, primarily reflecting price gains due to tight supply and demand dynamics.
+Added: Local price increased in Packaging & Specialty Plastics (up 50 percent), Industrial Intermediates & Infrastructure (up 40 percent) and Performance Materials & Coatings (up 19 percent).
+Added: Volume increased 1 percent compared with 2020, with increases in Packaging & Specialty Plastics (up 2 percent) and Performance Materials & Coatings (up 1 percent), partially offset by a decrease in Industrial Intermediates & Infrastructure (down 2 percent).
+Added: Volume increased in the U.S.
+Added: & Canada (up 2 percent) and in EMEAI (up 3 percent), partially offset by decreases in Asia Pacific (down 4 percent) and Latin America (down 3 percent).
+Added: Currency had a favorable impact of 2 percent on net sales compared with 2020, driven by EMEAI (up 4 percent) and Asia Pacific (up 2 percent).
+Added: Restructuring and asset related charges - net were $6 million in 2021, compared with $708 million in 2020, primarily reflecting actions taken under the 2020 Restructuring Program.
+Added: Equity in earnings of nonconsolidated affiliates was $975 million in 2021, compared with equity losses of $18 million in 2020, primarily driven by margin expansion at Sadara Chemical Company ("Sadara") and the Kuwait and Thai joint ventures.
Sundry income (expense) - net for Dow Inc.
−Removed: and TDCC was income of $1,269 million and income of $1,274 million, respectively, in 2020 compared with income of $461 million and income of $573 million, respectively, in 2019.
−Removed: Sundry income (expense) - net increased primarily due to gains on the sale of certain rail and marine and terminal operations and assets and gains related to a legal matter, which were partially offset by losses on the early extinguishment of debt.
−Removed: Net income (loss) available for Dow Inc.
−Removed: and TDCC common stockholder(s) was income of $1,225 million and $1,235 million, respectively, in 2020, compared with a loss of $1,359 million and $1,237 million, respectively, in 2019.
−Removed: Earnings (loss) per share for Dow Inc.
−Removed: was earnings of $1.64 per share in 2020, compared with a loss of $1.84 per share in 2019.
+Added: and TDCC was expense of $35 million and $79 million, respectively, in 2021, compared with income of $1,269 million and $1,274 million, respectively, in 2020.
+Added: Sundry income (expense) - net decreased primarily due to losses on the early extinguishment of debt in the current year, compared with gains related to a legal matter, the sale of certain marine and terminal operations and the sale of certain rail infrastructure operations and assets, which were partially offset by losses on the early extinguishment of debt in the prior year.
+Added: Net income available for Dow Inc.
+Added: and TDCC common stockholder(s) was $6,311 million and $6,274 million, respectively, in 2021, compared with $1,225 million and $1,235 million, respectively, in 2020.
+Added: Earnings per share for Dow Inc.
+Added: was $8.38 per share in 2021, compared with $1.64 per share in 2020.
+Added: In 2021, TDCC redeemed more than $1 billion of certain notes due in 2024 and completed cash tender offers resulting in over $1 billion of aggregate principal amount of certain notes being tendered and retired.
+Added: The Company's proactive liability management actions to tender and redeem existing notes have resulted in no substantive long-term debt maturities due until 2026.
+Added: In 2021, the Company executed strategic buy-outs of certain leased assets for approximately $690 million.
In 2021, Dow Inc.
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Other notable events and highlights from the year ended December 31, 2021 include:
−Removed: • Dow was named by the Human Rights Campaign ("HRC") Foundation to its 2020 list of “Best Places to Work” for LGBTQ+ equality.
−Removed: This marks the Company’s 15 th consecutive year receiving a perfect score on HRC’s Corporate Equality Index, a national benchmarking tool on corporate policies and practices pertinent to LGBTQ+ employees.
−Removed: • Dow received two 2020 BIG Innovation Awards from the Business Intelligence Group for DOWSIL™ TC-3015 Reworkable Thermal Gel and ECOFAST™ Pure Sustainable Textile Treatment.
−Removed: • In February 2020, TDCC announced the completion of a public offering of €2.25 billion aggregate principal amount of its notes.
−Removed: • In the first quarter of 2020, TDCC redeemed $1.25 billion of its 3.0 percent notes due November 15, 2022.
−Removed: • In March 2020, Dow announced a commitment of $3 million to aid COVID-19 relief efforts worldwide.
−Removed: This included $2 million for immediate support of impacts caused by COVID-19, including donations to the COVID-19 Solidarity Fund, Direct Relief, and local and regional nonprofit organizations in Dow communities around the globe and $1 million to build community resilience in the recovery phase.
−Removed: • In response to global needs related to COVID-19, in March 2020, the Company announced plans to produce hand sanitizer at five of its manufacturing sites around the world:
−Removed: Auburn, Michigan;
−Removed: South Charleston, West Virginia;
−Removed: Seneffe, Belgium;
−Removed: Hortolandia, Brazil and Stade, Germany.
−Removed: A majority of the hand sanitizer produced was donated to health systems and government agencies for distribution.
−Removed: • In April 2020, Dow announced the Company had developed a simplified face shield design and shared the design through an open-source file to help accelerate production rates of the critically-needed personal protective equipment.
−Removed: • Effective April 9, 2020, following the Company's Annual Meeting of Stockholders ("2020 Meeting") Dow Inc.'s Board elected Jim Fitterling, Dow’s Chief Executive Officer, as Chairman.
−Removed: In connection with that election, the Board elected Jeff M.
−Removed: Fettig to serve as Lead Director until the 2021 Annual Meeting of Stockholders or until a successor is duly elected and qualified.
−Removed: The Company also announced that Jill S.
−Removed: Wyant, currently Executive Vice President of Innovation and Transformation at Ecolab, Inc., was elected to the Board at the 2020 Meeting and Ruth G.
−Removed: Shaw retired from the Board following the 2020 Meeting after 15 years of exemplary leadership, in accordance with director tenure requirements of the Company's Corporate Governance Guidelines.
−Removed: • Effective April 9, 2020, following the 2020 Meeting, Dow Inc.'s Board designated Dow's business presidents Jack Broodo, Diego Donoso, Mauro Gregorio and Jane Palmieri, as Executive Officers of the Company.
−Removed: • On April 30, 2020, the Company announced the temporary idling or operating rate reductions of select manufacturing assets to balance production with demand across markets more severely affected by restrained economic activity.
−Removed: These assets returned to more normalized operating rates in the third quarter of 2020.
−Removed: • Dow published its 2019 Shine Inclusion Report, providing progress on the Company's inclusion and diversity strategy, goals and performance.
−Removed: • Dow was named to the 2020 DiversityInc Top 50 Companies for Diversity list for the third consecutive year.
−Removed: Dow was also included on four of DiversityInc's Specialty Lists including:
−Removed: Top Companies for Employee Resource Groups, Top Companies for Supplier Diversity, Top Companies for People with Disabilities, and Top Companies for LGBT Employees.
−Removed: • In May 2020, the Company’s global headquarters community of Midland, Michigan, experienced widespread devastation caused by heavy rain and two dam failures, which led to extensive flooding and damage to homes and businesses in the area.
−Removed: The Company’s manufacturing facilities were not significantly impacted by the flooding.
−Removed: In response to this natural disaster, Dow pledged $1 million in financial support for immediate relief and long-term recovery efforts associated with the impact of the flooding and its aftermath.
−Removed: • In June 2020, the Company launched Dow ACTs (Advocacy, Community and Talent), a strategic framework that outlined a new set of actions Dow is taking to address systemic racism and racial injustice.
−Removed: In addition, Dow pledged $5 million over the next five years to help advance racial equality and social justice.
−Removed: • In June 2020, Dow published its annual Sustainability Report and announced new sustainability targets, which align to and build upon its 2025 Sustainability Goals, including targets to Protect the Climate, Stop the Waste and Close the Loop.
−Removed: By 2030, Dow expects to reduce its net annual carbon emissions by five million metric tons, or 15 percent from its 2020 baseline.
−Removed: Additionally, Dow intends to be carbon neutral by 2050, in alignment with the Paris Agreement.
−Removed: By 2030, Dow plans to help stop the waste by enabling one million metric tons of plastic to be collected, reused or recycled through its direct actions and partnerships.
−Removed: By 2035, Dow will help close the loop with a target to have 100 percent of its products sold into packaging applications be reusable or recyclable.
−Removed: • Dow was named to the 2020 Disability Equality Index® "Best Places to Work," by receiving the top score for the fourth year in a row.
−Removed: • In July 2020, Dow launched its MobilityScience™ platform, designed to enhance the customer experience by tailoring technologies, products, and services from across Dow businesses to the transportation industry.
−Removed: The platform is pursuing accelerated growth by addressing mobility mega-trends with materials science innovation, and enabling a seamless experience for Dow’s customers and partners.
−Removed: • On August 13, 2020, Gaurdie Banister Jr ., former President and CEO of Aera Energy LLC, an oil and gas exploration and production company jointly owned by Shell Oil Company and ExxonMobil Corporation, was elected to Dow Inc.'s Board.
−Removed: • In August 2020, TDCC announced the completion of a public offering of $2.0 billion aggregate principal amount of its notes.
−Removed: • Dow Silicones voluntarily repaid the full $2.0 billion outstanding principal balance under a certain third party credit agreement.
−Removed: • In September 2020, TDCC and Union Carbide completed cash tender offers for certain debt securities.
−Removed: A total of $493 million aggregate principal amount was tendered and retired.
−Removed: • Dow was named as one of the 2020 PEOPLE's "50 Companies that Care" by Great Place to Work® and PEOPLE.
−Removed: • Dow received four 2020 Sustainability Awards from the Business Intelligence Group, including the Sustainability Initiative of the Year Award for Dow's Carbon Partnership with International Olympic Committee as well as the Sustainability Products of the Year Award for ECOFAST™ Pure Sustainable Textile Treatment and SunSpheres™ BIO SPF Booster.
−Removed: • On September 15, 2020, the Company announced that John Sampson will rejoin Dow as Senior Vice President, Operations, Manufacturing and Engineering, succeeding Peter Holicki, who will retire in 2021 after more than 34 years of service with Dow.
−Removed: • On September 30, 2020, TDCC completed the sale of rail infrastructure operations and assets at six sites in the U.S.
−Removed: & Canada for gross cash proceeds in excess of $310 million.
−Removed: • Dow was named to the Forbes JUST 100 list, recognizing the Company's commitment to serve all stakeholders.
−Removed: Dow was the top scoring chemical company in the workers category.
−Removed: • In October 2020, Dow launched its first digital waste management platform, Rethink+.
−Removed: Rethink+ is a plastics take-back program that aims to prevent post-consumer plastic waste from going to landfills by digitally connecting waste generators, waste aggregators, waste processors and recyclers.
−Removed: • Dow received five R&D 100 Awards from R&D Magazine for innovative technologies including:
−Removed: DOWSIL™ EC-6601 Electrically Conductive Adhesive, DOWSIL™ EI-2888 Primerless Silicone Encapsulant, ENGAGE™ 11000 Polyolefin Elastomers, NEOSEED® NE-8800 Emulsion, and RHOBARR™ 320 Polyolefin Dispersion for Paper and Board.
−Removed: • Dow received the 2020 National Safety Council Green Cross for Safety® Innovation Award for its Aerial Lift Safety Project.
−Removed: • Dow was named to the Dow Jones Sustainability World Index - marking the 21st time the Company has been named to this global benchmark.
−Removed: • On December 1, 2020, TDCC completed the sale of certain U.S.
−Removed: Gulf Coast marine and terminal operations and assets for gross cash proceeds of $620 million.
−Removed: • In December 2020, Dow Inc.’s Board designated John Sampson as an Executive Officer of the Company, effective January 1, 2021.
+Added: • Dow received three 2021 BIG Innovation Awards from the Business Intelligence Group for DOWSIL™ TC-3065 Thermally Conductive Gel;
+Added: DOWSIL™ 993N Structural Glazing Sealant and Catalyst;
+Added: and the world's first commercial polyurethane-carbon fiber spar cap for the new generation of wind blades.
+Added: • Dow was named to Bloomberg’s 2021 Gender-Equality Index.
+Added: • Dow was named by the Human Rights Campaign ("HRC") Foundation to its 2021 list of “Best Places to Work for LGBTQ+ Equality.” This marks the Company’s sixteenth consecutive year receiving a perfect score on HRC’s Corporate Equality Index.
+Added: • On March 4, 2021, TDCC announced changes to the design of its U.S.
+Added: tax-qualified and non-qualified retirement programs.
+Added: Separately, TDCC elected to contribute $1 billion to its U.S.
+Added: tax-qualified pension plans.
+Added: • Dow was recognized with three Manufacturing Leadership Awards by the Manufacturing Leadership Council, a division of the National Association of Manufacturers.
+Added: Dow’s Manufacturing 4.0 received the Enterprise Integration and Technology Award, the E2E Business Planning Program was awarded the Supply Chain Award, and Accelerating Innovation in Instrumentation & Sensors at Dow Texas Operations received the Industrial Internet of Things Award.
+Added: • Dow received a 2021 CIO 100 award from IDG’s CIO for the digitalization of its end-to-end business planning platform.
+Added: • On March 25, 2021, Dow Inc.
+Added: (together with Sadara and the Saudi Arabian Oil Company) completed a debt re-profiling agreement for Sadara with agency creditors and commercial lenders.
+Added: The re-profiled debt repayment schedule is better aligned to match Sadara's expected future cash flow generation.
+Added: • Dow received two 2021 Ringier Technology Innovation Awards in the Plastics Raw Materials & Additives category including:
+Added: Post-Consumer Recycled resin XUS60921.01 and Carpet tile with INFUSE™ polyolefin backing.
+Added: • Dow was named as one of the 2021 Fortune 100 Best Companies to Work For®;
+Added: as well as, being recognized by Great Place to Work® in several other countries around the world including:
+Added: 2021 Best Workplaces™ in Argentina, Colombia and Saudi Arabia.
+Added: • On April 13, 2021, Fitch Ratings ("Fitch") reaffirmed TDCC’s BBB+ and F2 rating, and revised its outlook to stable from negative.
+Added: The decision was made as part of Fitch’s annual review process.
+Added: • Effective April 15, 2021, following the Company's Annual Meeting of Stockholders ("2021 Meeting") Dow Inc.'s Board elected Richard K.
+Added: Davis to serve as Lead Director until the 2022 Annual Meeting of Stockholders.
+Added: The Company also announced that Debra L.
+Added: Dial, senior vice president and controller at AT&T Inc., and Luis Alberto Moreno, managing director at Allen & Co, LLC and former president of Inter-American Development Bank Group, were elected to the Board at the 2021 Meeting.
+Added: Ajay Banga, Jacqueline K.
+Added: Barton and James A.
+Added: Bell retired from the Board following the 2021 Meeting as announced on February 11, 2021.
+Added: • On April 21, 2021, Dow received a 2021 FutureEdge 50 award for its Predictive Intelligence capability, Dow Polyurethanes’ flagship digitalization initiative.
+Added: The FutureEdge 50 awards annually recognize 50 organizations pushing the edge of innovation with breakthrough technologies to advance their business for the future.
+Added: • Dow received 20 American Chemistry Council Responsible Care® awards for exemplary environmental, health and safety performance.
+Added: Dow received awards for site safety, minimizing waste, improving energy efficiency, and its COVID-19 response.
+Added: • Dow received six 2021 Edison Awards, including five Gold Edison Awards, for breakthrough technologies including:
+Added: DOWSIL™ CC-8030 UV and Moisture Dual Cure Conformal Coating;
+Added: DOWSIL™ TC-5515LT Thermally Conductive Gap Filler;
+Added: DOWSIL™ TC-3065 Thermal Conductive Silicone Gel for 5G Optical Access Infrastructure;
+Added: DOWSIL™ VE-8001 Flexible Silicone Adhesive by Dow;
+Added: RHOBARR™ 320 Polyolefin Dispersion;
+Added: and DOWSIL™ Crystal Clear Spacer.
+Added: Dow is the first company to receive five Gold Edison Awards in a single year.
+Added: • Dow was named to the 2021 DiversityInc Top 50 Companies for Diversity list for the fourth consecutive year.
+Added: Dow was also included on three of DiversityInc's Specialty Lists including:
+Added: Top Companies for Employee Resource Groups, Top Companies for People with Disabilities, and Top Companies for ESG.
+Added: • Dow was named 2021 Manufacturer of the Year, Large Enterprise, by the Manufacturing Leadership Council, a division of the National Association of Manufacturers.
+Added: The Manufacturer of the Year Award is given to the company that shows best-in-class achievement.
+Added: • On June 10, 2021, Standard & Poor's ("S&P") announced a credit rating upgrade for TDCC from BBB- and A-3 to BBB and A-2, maintaining stable outlook.
+Added: The decision from S&P reflects the expectation for an ongoing macroeconomic recovery, the Company’s supportive financial policies and the strengthening of its operating performance in 2021 relative to 2020.
+Added: • Dow was named a 2021 honoree and the Materials Sector leader of The Civic 50 by Points of Light, the world’s largest organization committed to inspiring, equipping and engaging people to take action to change their communities and the world.
+Added: • On June 24, 2021, Dow Inc.
+Added: released “INtersections,” its first consolidated Environmental, Social and Governance ("ESG") Report highlighting the Company’s significant progress to fully integrate environmental stewardship and positive social impact throughout its operations, teams, supply chain and communities.
+Added: This marked Dow's eighteenth year of voluntary reporting on sustainability.
+Added: • For the fifth consecutive year, Dow has received a top score on the Disability Equality Index ®, placing the Company among the “Best Places to Work for Disability Inclusion” for 2021.
+Added: • Dow received the “Best in Enterprise Resilience” certification from Everbridge as a part of their Critical Event Management (CEM) Certification™ Program.
+Added: This recognition demonstrates Dow’s commitment to implementing best practices for enterprise resilience that keep employees safe and the company running safely, reliably and efficiently.
+Added: • Dow was named to Seramount’s 2021 Inclusion Index (formerly known as the Diversity Best Practices Inclusion Index).
+Added: This is the first year Dow was recognized on the list which includes a total of 45 organizations recognized for creating an inclusive workplace.
+Added: • Dow was named one of the "2021 PEOPLE Companies that Care®" for the second consecutive year.
+Added: • Great Place to Work® and Fortune magazine have named Dow one of the 2021 Best Workplaces in Manufacturing & Production™.
+Added: This is the first time Dow was named to this prestigious list, ranking third on the list.
+Added: • Dow won two Sustainability Product of the Year awards in the 2021 Sustainability Awards program of Business Intelligence Group for SPECFLEX™ Microcellular Polyurethane and SYNTEGRA™ Polyurethane Dispersions for Microfiber.
+Added: • On October 6, 2021, Dow Inc.
+Added: held an Investor Day event where it announced the following:
+Added: investment plans to deliver more than $3 billion of additional underlying EBITDA growth with a clear path to zero-carbon emissions (with respect to Scope 1, 2 and 3 carbon emissions, including offsets from product benefits and technology advancements);
+Added: new renewable and cleaner power agreements which are expected to reduce Dow's Scope 2 emissions by more than 600,000 metric tons of carbon dioxide equivalent per year;
+Added: a plan to build the world's first net-zero carbon emissions (with respect to Scope 1 and 2 carbon dioxide emissions, including technology advancements) ethylene and derivatives complex;
+Added: and expansion of global capabilities for circular plastics, with initial products available for customers in 2022.
+Added: • Dow earned multiple Critical Guidance Recognitions for recyclability from the Association of Plastic Recyclers ("APR"), in three product categories.
+Added: ROBOND™ Adhesives, OPULUX™ Optical Finishes and SURLYN™ Ionomers were each recognized by APR for solving packaging design challenges.
+Added: • Dow received two R&D 100 Awards from R&D Magazine for innovative technologies including:
+Added: DOWSIL™ TC-4060 Thermal Gel and Multi-functional Sorbent Technology ("MUST").
+Added: • Five additional Dow sites received International Sustainability & Carbon Certification PLUS recognition for their compliance with rigorous tracking of sustainable feedstocks use.
+Added: • DOWSIL™ TC-4060 Thermal Gel was awarded Best Product Innovation and SunSpheres™ BIO SPF Booster was awarded Product with Best Benefit to the Environment and Sustainability from Innovation Commodity Intelligence Services.
+Added: • In 2021, CDP (formerly Carbon Disclosure Project, an international non-profit specialized in environmental reporting) improved Dow's climate change score to an A- from a B.
In addition to the highlights above, the following events occurred subsequent to December 31, 2021:
−Removed: • On January 28, 2021, Dow announced plans to further advance and expand its digitalization efforts to deliver long-term value creation, by accelerating investment in three key areas (“Digital Acceleration”):
−Removed: expanding digital tools to accelerate materials science innovation;
−Removed: further enhancing the e-commerce buying and fulfillment experience for Dow's customers;
−Removed: and adopting real-time digital manufacturing insights, operational data intelligence and demand sensing to enhance the productivity and reliability of Dow’s operations.
−Removed: The Company expects more than $300 million in incremental annual run rate Operating EBITDA generation by the end of 2025 related to Digital Acceleration, with an additional one-time $100 million in structural working capital efficiency gains, driven in part by enhanced planning from digital tools.
−Removed: The activities related to Digital Acceleration are expected to result in additional cash expenditures of approximately $400 million, primarily through the end of 2022.
+Added: • For the third year, Dow was named to the JUST 100 list.
+Added: Dow earned the top spot in the Chemicals sector overall and received the number one position in the Workers and Stakeholders & Governance categories versus industry peers.
+Added: • Dow received three 2021 BIG Innovation Awards from the Business Intelligence Group for DOWSIL™ TC-2035 CV Adhesive, DOWSIL™ TC-6015 Thermally Conductive Encapsulant and UCARE™ Extreme Polymer.
+Added: • Dow was named to Bloomberg’s 2022 Gender-Equality Index for the second consecutive year.
+Added: • Dow was named by the Human Rights Campaign ("HRC") Foundation to its 2022 list of “Best Places to Work for LGBTQ+ Equality.” This marks the Company’s seventeenth consecutive year receiving a perfect score on HRC’s Corporate Equality Index.
RESULTS OF OPERATIONS
5 unchanged sentences
Sales Variances by Operating Segment and Geographic Region - As Reported
−Removed: Percentage change from prior year Local Price & Product Mix Currency Volume Portfolio & Other 1
−Removed: Total Local Price & Product Mix Currency Volume
+Added: Percentage change from prior year Local Price & Product Mix Currency Volume Total Local Price & Product Mix Currency Volume
Portfolio & Other 1
25 unchanged sentences
2021 Versus 2020
+Added: The Company reported net sales of $55 billion in 2021, up 43 percent from $38.5 billion in 2020, with local price up 40 percent, a favorable currency impact of 2 percent and volume up 1 percent.
+Added: Net sales increased in all operating segments and across all geographic regions.
+Added: Local price increased in all operating segments and across all geographic regions, primarily reflecting price gains due to tight supply and demand dynamics driven by logistics constraints and weather events.
+Added: Local price increased in Packaging & Specialty Plastics (up 50 percent), Industrial Intermediates & Infrastructure (up 40 percent) and Performance Materials & Coatings (up 19 percent).
+Added: Volume increased in Packaging & Specialty Plastics (up 2 percent) and Performance Materials & Coatings (up 1 percent).
+Added: Volume decreased in Industrial Intermediates & Infrastructure (down 2 percent).
+Added: Excluding the Hydrocarbons & Energy business, sales increased 37 percent.
+Added: 2020 Versus 2019
The Company reported net sales of $38.5 billion in 2020, down 10 percent from $43.0 billion in 2019, with local price down 7 percent and volume down 3 percent.
−Removed: Net sales decreased in all geographic regions and operating segments, reflecting impacts from the global COVID-19 pandemic on economies and supply and demand fundamentals, most notably in the first half of the year.
+Added: Net sales decreased in all geographic regions and operating segments, reflecting impacts from the global COVID-19 pandemic on economies and supply and demand dynamics, most notably in the first half of the year.
Local price decreased in all operating segments and in all geographic regions, primarily in response to lower global energy prices.
5 unchanged sentences
Excluding the Hydrocarbons & Energy business, sales declined 9 percent.
−Removed: 2019 Versus 2018
−Removed: The Company reported net sales of $43.0 billion in 2019, down 13 percent from $49.6 billion in 2018, driven by a decrease in local price, decreased volume and the unfavorable impact of currency.
−Removed: Sales declines were broad-based and occurred in all segments and geographic regions.
−Removed: Local price decreased 11 percent, primarily in response to lower feedstock and raw material costs and pricing pressures.
−Removed: Local price decreased in Packaging & Specialty Plastics and Industrial Intermediates & Infrastructure (both down 12 percent) and in Performance Materials & Coatings (down 6 percent).
−Removed: Local price decreased in all geographic regions.
−Removed: Volume decreased 2 percent with declines in all geographic regions except Asia Pacific (up 5 percent).
−Removed: Volume declines were primarily driven by lower hydrocarbon co-product sales.
−Removed: Volume decreased in Packaging & Specialty Plastics and Performance Materials & Coatings (both down 3 percent), while Industrial Intermediates & Infrastructure volume was flat.
−Removed: Currency unfavorably impacted net sales by 1 percent compared with the prior year, driven primarily by EMEAI (down 3 percent).
−Removed: Portfolio & Other improved sales by 1 percent.
−Removed: Excluding the Hydrocarbons & Energy business, sales declined 11 percent.
Sales Variances by Operating Segment and Geographic Region - Pro Forma Basis
11 unchanged sentences
As reported net sales for the year ended December 31, 2020 compared with pro forma net sales for the year ended December 31, 2019.
−Removed: Sales Variances by Operating Segment and Geographic Region - Pro Forma Basis
−Removed: Percentage change from prior year
−Removed: Local Price & Product Mix Currency Volume Portfolio & Other 1
−Removed: Packaging & Specialty Plastics 1 % 1 % 5 % — % 7 %
−Removed: Industrial Intermediates & Infrastructure 5 1 13 — 19
−Removed: Performance Materials & Coatings 10 1 (2) 2 11
−Removed: Total 4 % 1 % 6 % — % 11 %
−Removed: Total, excluding the Hydrocarbons & Energy business 4 % 1 % 7 % — % 12 %
−Removed: & Canada 3 % — % 2 % 1 % 6 %
−Removed: EMEAI 5 3 4 — 12
−Removed: Asia Pacific 3 1 18 — 22
−Removed: Latin America 5 — 4 — 9
−Removed: Total 4 % 1 % 6 % — % 11 %
−Removed: 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.
2020 Versus 2019 - Pro Forma
The Company reported net sales of $38.5 billion for 2020, down 10 percent from pro forma net sales of $43.0 billion in 2019, with local price down 7 percent and volume down 3 percent.
−Removed: Net sales decreased in all geographic regions and operating segments, reflecting impacts from the global COVID-19 pandemic on economies and supply and demand fundamentals, most notably in the first half of the year.
+Added: Net sales decreased in all geographic regions and operating segments, reflecting impacts from the global COVID-19 pandemic on economies and supply and demand dynamics, most notably in the first half of the year.
Local price decreased in all operating segments and in all geographic regions, primarily in response to lower global energy prices.
5 unchanged sentences
Excluding the Hydrocarbons & Energy business, sales declined 9 percent.
−Removed: 2019 Versus 2018 - Pro Forma
−Removed: The Company reported pro forma net sales for 2019 of $43.0 billion, down 14 percent from $49.9 billion for 2018, primarily driven by a decrease in local price, decreased volume and the unfavorable impact of currency.
−Removed: Sales declines were broad-based and occurred in all segments and geographic regions.
−Removed: Local price decreased 11 percent, primarily in response to lower feedstock and raw material costs and pricing pressures.
−Removed: Local price decreased in Packaging & Specialty Plastics and Industrial Intermediates & Infrastructure (both down 12 percent) and in Performance Materials & Coatings (down 6 percent).
−Removed: Local price decreased in all geographic regions.
−Removed: Volume decreased 2 percent with declines in all geographic regions, except Asia Pacific (up 5 percent).
−Removed: Volume decreased in Packaging & Specialty Plastics (down 3 percent) and Performance Materials & Coatings (down 1 percent) and increased in Industrial Intermediates & Infrastructure (up 1 percent).
−Removed: Currency unfavorably impacted net sales by 1 percent compared with the prior year, driven primarily by EMEAI (down 3 percent).
−Removed: Excluding the Hydrocarbons & Energy business, sales declined 11 percent.
Cost of Sales
−Removed: Cost of sales ("COS") was $33.3 billion in 2020, down $3.4 billion compared with $36.7 billion in 2019.
+Added: Cost of sales ("COS") was $44.2 billion in 2021, compared with $33.3 billion in 2020.
+Added: COS increased in 2021 primarily due to higher feedstock and energy costs and impacts from Winter Storm Uri, which included higher raw material costs and repair costs.
+Added: In 2021, COS included $146 million of costs associated with implementing the Company's digital acceleration program (related to Corporate).
+Added: COS as a percentage of sales was 80.4 percent in 2021 compared with 86.5 percent in 2020.
+Added: COS was $33.3 billion in 2020, compared with $36.7 billion in 2019.
COS decreased in 2020 primarily due to lower feedstock and other raw material costs, decreased sales volume and lower planned maintenance turnaround costs, which were partially offset by higher performance-based compensation costs.
4 unchanged sentences
COS as a percentage of sales was 86.5 percent in 2020 compared with 85.3 percent in 2019.
−Removed: COS was $36.7 billion in 2019, down $4.4 billion from $41.1 billion in 2018.
−Removed: COS decreased in 2019 primarily due to lower feedstock and other raw material costs, decreased sales volume, cost synergies, stranded cost removal and a favorable adjustment to the warranty accrual of an exited business, which were partially offset by $75 million of transaction-related costs resulting from the separation from DowDuPont (related to Corporate) and $399 million of environmental charges related to Packaging & Specialty Plastics ($5 million), Industrial Intermediates & Infrastructure ($8 million), Performance Materials & Coatings ($50 million) and Corporate ($336 million).
−Removed: COS as a percentage of sales was 85.3 percent in 2019 compared with 82.8 percent in 2018.
Research and Development Expenses
−Removed: R&D expenses were $768 million in 2020, compared with $765 million in 2019 and $800 million in 2018.
−Removed: R&D expenses in 2020 increased compared with 2019 primarily due to higher performance-based compensation costs which were partially offset by cost reductions.
−Removed: R&D expenses in 2019 decreased compared with 2018 primarily due to cost reductions and lower performance-based compensation costs.
+Added: Research and development ("R&D") expenses were $857 million in 2021, compared with $768 million in 2020 and $765 million in 2019.
+Added: R&D expenses in 2021 increased compared with 2020 primarily due to increased performance-based compensation costs and fringe benefit expenses driven by stock market increases compared with the same period last year.
+Added: R&D expenses in 2020 increased compared with 2019 primarily due to increased performance-based compensation costs which were partially offset by cost reductions.
Selling, General and Administrative Expenses
−Removed: Selling, general and administrative ("SG&A") expenses were $1,471 million in 2020, compared with $1,590 million and $1,585 million for Dow Inc.
−Removed: and TDCC, respectively, in 2019 and $1,782 million in 2018.
−Removed: SG&A expenses in 2020 decreased primarily due to cost reductions which were partially offset by higher performance-based compensation costs.
−Removed: SG&A was also favorably impacted by the recovery of legal costs related to the Nova
−Removed: Chemicals Corporation ("Nova") ethylene asset matter and the reversal of a bad debt reserve related to an arbitration judgment.
−Removed: SG&A expenses in 2019 decreased compared with 2018 primarily due to cost reductions, cost synergies, stranded cost removal and lower performance-based compensation costs.
−Removed: SG&A expenses were favorably impacted by a recovery of a portion of legal costs related to the Nova litigation matter in the third quarter of 2019.
+Added: Selling, general and administrative ("SG&A") expenses were $1,645 million in 2021, compared with $1,471 million in 2020 and $1,590 million and $1,585 million for Dow Inc.
+Added: and TDCC, respectively, in 2019.
+Added: SG&A expenses in 2021 increased primarily due to increased performance-based compensation costs and fringe benefit expenses driven by stock market increases compared with the same period last year.
+Added: SG&A expenses in 2020 decreased compared to 2019 primarily due to cost reductions which were partially offset by increased performance-based compensation costs.
+Added: In 2020, SG&A was also favorably impacted by the recovery of legal costs related to the Nova Chemicals Corporation ("Nova") ethylene asset matter and the reversal of a bad debt reserve related to an arbitration judgment.
See Note 16 to the Consolidated Financial Statements for additional information on the Nova litigation matters.
7 unchanged sentences
On September 29, 2020, Dow Inc.'s Board approved restructuring actions to achieve the Company's structural cost improvement initiatives in response to the continued economic impact from the COVID-19 pandemic.
−Removed: The restructuring program is designed to reduce structural costs and enable the Company to further enhance competitiveness while the COVID-19 economic recovery gains traction.
−Removed: These actions are expected to be substantially complete by the end of 2021.
−Removed: As a result of these actions, in 2020 the Company recorded pretax restructuring charges of $573 million, consisting of severance and related benefit costs of $297 million, asset write-downs and write-offs of $196 million and costs associated with exit and disposal activities of $80 million.
−Removed: The restructuring charges by segment were as follows:
+Added: The restructuring program was designed to reduce structural costs and enable the Company to further enhance competitiveness while the COVID-19 economic recovery gained traction.
+Added: These actions were substantially complete by the end of 2021, except for certain cash payments expected to be made in 2022.
+Added: In 2020, the Company recorded pretax restructuring charges of $573 million, consisting of severance and related benefit costs of $297 million, asset write-downs and write-offs of $196 million and costs associated with exit and disposal activities of $80 million.
+Added: Restructuring charges by segment were as follows:
$11 million in Packaging & Specialty Plastics, $22 million in Industrial Intermediates & Infrastructure, $177 million in Performance Materials & Coatings and $363 million in Corporate.
+Added: In 2021, the Company recorded pretax restructuring charges of $12 million for asset write-downs and write-offs and $10 million for costs associated with exit and disposal activities.
+Added: Restructuring charges by segment were as follows:
+Added: $8 million in Packaging & Specialty Plastics, $1 million in Industrial Intermediates & Infrastructure, $10 million in Performance Materials & Coatings and $3 million in Corporate.
+Added: In addition, the Company reduced pretax restructuring charges by $10 million for severance and related benefit costs, related to Corporate.
DowDuPont Cost Synergy Program
1 unchanged sentence
The restructuring charges below reflect charges from continuing operations.
−Removed: As a result of the Synergy Program, the Company recorded pretax restructuring charges of $184 million in 2018, consisting of severance and related benefit costs of $137 million, asset write-downs and write-offs of $33 million and costs associated with exit and disposal activities of $14 million.
−Removed: The restructuring charges by segment were as follows:
−Removed: $13 million in Packaging & Specialty Plastics, $11 million in Industrial Intermediates & Infrastructure, $7 million in Performance Materials & Coatings and $153 million in Corporate.
In 2019, the Company recorded pretax restructuring charges of $292 million, consisting of severance and related benefit costs of $123 million, asset write-downs and write-offs of $143 million and costs associated with exit and disposal activities of $26 million.
−Removed: The restructuring charges by segment were as follows:
+Added: Restructuring charges by segment were as follows:
$1 million in Packaging & Specialty Plastics, $7 million in Industrial Intermediates & Infrastructure, $28 million in Performance Materials & Coatings and $256 million in Corporate.
−Removed: In 2020, the Company recorded pretax restructuring charges of $86 million for severance and related benefit costs, related to Corporate.
−Removed: Cash expenditures related to the Synergy Program were substantially completed at the end of 2020.
+Added: In 2020, the Company recorded pretax restructuring charges of $86 million and reduced pretax restructuring charges by $6 million in 2021, both for severance and related benefit costs (related to Corporate).
+Added: Cash expenditures related to the Synergy Program were substantially complete at December 31, 2020.
2019 Goodwill Impairment
3 unchanged sentences
In 2020, the Company recognized pretax impairment charges of $49 million, including additional pretax impairment charges for capital additions made to a bio-ethanol manufacturing facility in Santa Vitoria, Minas Gerais, Brazil ("Santa Vitoria"), which was impaired in 2017 and divested in 2020, as well as charges for miscellaneous write-offs and write-downs of non-manufacturing assets and the write-down of certain corporate leased equipment.
−Removed: The impairment charges were included in “Restructuring, goodwill impairment and asset related charges - net” in the consolidated statements of income and related to Packaging & Specialty Plastics ($19 million), Performance Materials & Coatings ($15 million) and Corporate ($15 million).
+Added: Impairment charges by segment were as follows:
+Added: Packaging & Specialty Plastics ($19 million), Performance Materials & Coatings ($15 million) and Corporate ($15 million).
See Note 23 for additional information.
+Added: 2019 Asset Related Charges
On August 13, 2019, the Company entered into a definitive agreement to sell its acetone derivatives business to ALTIVIA Ketones & Additives, LLC.
10 unchanged sentences
In 2019, the Company recognized additional pretax impairment charges of $58 million related primarily to capital additions at its Santa Vitoria manufacturing facility, which was impaired in 2017.
−Removed: The impairment charges by segment were as follows:
+Added: Impairment charges by segment were as follows:
$44 million in Packaging & Specialty Plastics, $9 million in Performance Materials & Coatings and $5 million in Corporate.
−Removed: In 2018, the Company recognized additional pretax impairment charges of $34 million related primarily to capital additions at its Santa Vitoria manufacturing facility.
−Removed: The impairment charge was related to Packaging & Specialty Plastics.
See Note 6 to the Consolidated Financial Statements for additional information on restructuring, goodwill impairment and asset related charges.
Integration and Separation Costs
−Removed: Integration and separation costs, which reflect costs related to post-Merger integration and business separation activities (through December 31, 2020) and the ownership restructure of Dow Silicones (through May 31, 2018), were $239 million in 2020, $1,063 million and $1,039 million for Dow Inc.
−Removed: and TDCC, respectively, in 2019 and $1,179 million in 2018.
−Removed: In 2018 and 2019, integration and separation costs were higher as a result of post-Merger integration and business separation activities.
+Added: Integration and separation costs, which reflect costs related to post-Merger integration and business separation activities, were $239 million in 2020 and $1,063 million and $1,039 million for Dow Inc.
+Added: and TDCC, respectively, in 2019.
Integration and business separation activities were completed as of December 31, 2020.
1 unchanged sentence
Equity in Earnings (Losses) of Nonconsolidated Affiliates
−Removed: The Company’s share of equity in earnings (losses) of nonconsolidated affiliates in 2020 was a loss of $18 million, compared with a loss of $94 million in 2019 and earnings of $555 million in 2018.
−Removed: In 2020, equity losses decreased primarily due to lower equity losses from Sadara, driven by improved industry supply and demand fundamentals in the third and fourth quarters of 2020, which were partially offset by lower equity earnings from the Kuwait joint ventures due to lower monoethylene glycol prices.
−Removed: The Company had equity losses in 2019 compared with equity earnings in 2018 primarily due to lower equity earnings from the Kuwait joint ventures due to lower monoethylene glycol and polyethylene prices and the Thai joint ventures and increased equity losses from Sadara.
+Added: The Company’s share of equity in earnings of nonconsolidated affiliates was $975 million in 2021, compared with equity losses of $18 million in 2020 and $94 million in 2019.
+Added: The equity earnings improvement in 2021 compared with 2020 was primarily due to margin expansion at Sadara driven by broad-based price increases, strong MEG prices at the Kuwait joint ventures and improved elastomer and polyethylene margins at the Thai joint ventures.
+Added: In 2020, equity losses decreased compared with 2019 primarily due to lower equity losses from Sadara, driven by improved industry supply and demand dynamics in the third and fourth quarters of 2020, which were partially offset by lower equity earnings from the Kuwait joint ventures due to lower monoethylene glycol prices.
See Note 12 to the Consolidated Financial Statements for additional information on the Company’s evaluation of its equity method investment in Sadara for other-than-temporary impairment in 2019.
Sundry Income (Expense) - Net
−Removed: Sundry income (expense) – net includes a variety of income and expense items such as foreign currency exchange gains and losses, dividends from investments, gains and losses on sales of investments and assets, non-operating pension and other postretirement benefit plan credits or costs, and certain litigation matters.
−Removed: Sundry income (expense) - net for 2020 was income of $1,274 million, compared with income of $573 million in 2019 and $96 million in 2018.
+Added: Sundry income (expense) – net includes a variety of income and expense items such as foreign currency exchange gains and losses, dividends from investments, gains and losses on sales of investments and assets, non-operating pension and other postretirement benefit plan credits or costs, losses on early extinguishment of debt and certain litigation matters.
+Added: Sundry income (expense) - net for 2021 was expense of $79 million, compared with income of $1,274 million in 2020 and $573 million in 2019.
+Added: In 2021, sundry income (expense) - net included a $574 million loss on the early extinguishment of debt (related to Corporate and included in "Other net loss" in the consolidated statements of cash flows), and foreign currency exchange losses.
+Added: These were partially offset by non-operating pension and postretirement benefit plan credits, gains on the sale of assets and investments, a $54 million gain related to an arbitration award (related to Industrial Intermediates & Infrastructure), and a $16 million gain related to post-closing adjustments on the previous divestiture of a bio-ethanol manufacturing facility in Brazil (related to Packaging & Specialty Plastics).
+Added: See Notes 7, 15, 16, 20 and 26 to the Consolidated Financial Statements for additional information.
In 2020, sundry income (expense) - net included a $544 million gain related to the Nova ethylene asset matter (related to Packaging & Specialty Plastics), a $499 million gain related to the sale of certain U.S.
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& Canada ($48 million related to Packaging & Specialty Plastics and $185 million related to Corporate), and non-operating pension and postretirement benefit plan credits.
−Removed: These were partially offset by a $149 million loss on the early extinguishment of debt (related to Corporate), foreign currency exchange losses, $11 million in charges associated with agreements entered into with DuPont and Corteva as part of the separation and distribution, which provides for cross-indemnities and allocations of obligations and liabilities for periods prior to, at and after completion of the separation (related to Corporate), a $13 million loss related to the divestiture of a bio-ethanol manufacturing facility in Brazil (related to Packaging & Specialty Plastics) and a $2 million loss on an asset sale (related to Corporate).
+Added: These were partially offset by a $149 million loss on the early extinguishment of debt (related to Corporate and included in "Other net loss" in the consolidated statements of cash flows), foreign currency exchange losses, $11 million in charges associated with agreements entered into with DuPont and Corteva as part of the separation and distribution, which provides for cross-indemnities and allocations of obligations and liabilities for periods prior to, at and after completion of the separation (related to Corporate), a $13 million loss related to the divestiture of a bio-ethanol manufacturing facility in Brazil (related to Packaging & Specialty Plastics) and a $2 million loss on an asset sale (related to Corporate).
See Notes 5, 7, 15, 16, 20 and 26 to the Consolidated Financial Statements for additional information.
In 2019, sundry income (expense) - net included foreign currency exchange gains, non-operating pension and postretirement benefit plan credits and gains on sales of assets and investments, as well as a net gain of $205 million related to litigation matters, which included a $170 million gain related to a legal matter with Nova (related to Packaging & Specialty Plastics), and an $85 million gain related to an adjustment of the Dow Silicones breast implant liability (related to Corporate), which were partially offset by a $50 million charge (net of indemnifications of $37 million), related to the settlement of the Dow Silicones commercial creditor matters (related to Corporate).
−Removed: In 2019, sundry income (expense) - net also included a $102 million loss on the early extinguishment of debt and a gain of $2 million on post-closing adjustments related to previous divestitures (both related to Corporate).
−Removed: See Notes 7, 15, 16, 20 and 26 to the Consolidated Financial Statements for additional information.
−Removed: In 2018, sundry income (expense) - net included non-operating pension and other postretirement benefit plan credits, a $20 million gain related to the Company's sale of its equity interest in MEGlobal (related to Corporate) and gains on sales of assets and investments, which more than offset foreign currency exchange losses, a loss of $54 million on the early extinguishment of debt (related to Corporate) and a loss of $20 million for post-closing adjustments related to the Dow Silicones ownership restructure (related to Performance Materials & Coatings).
+Added: In 2019, sundry income (expense) - net also included a $102 million loss on the early extinguishment of debt (related to Corporate and included in "Other net loss" in the consolidated statements of cash flows) and a gain of $2 million on post-closing adjustments related to previous divestitures (related to Corporate).
See Notes 7, 15, 16, 20 and 26 to the Consolidated Financial Statements for additional information.
−Removed: Sundry income (expense) - net for 2020 was income of $1,269 million, compared with income of $461 million in 2019 and $96 million in 2018.
+Added: Sundry income (expense) - net for 2021 was expense of $35 million, compared with income of $1,269 million in 2020 and $461 million in 2019.
+Added: In 2021, in addition to the amounts previously discussed above for TDCC, sundry income (expense) - net included $30 million in gains associated with the agreements entered into with DuPont and Corteva as part of the separation and distribution (related to Corporate).
In 2020, in addition to the amounts previously discussed above for TDCC, sundry income (expense) - net included $10 million in charges associated with the agreements entered into with DuPont and Corteva as part of the separation and distribution (related to Corporate).
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Interest Expense and Amortization of Debt Discount
−Removed: Interest expense and amortization of debt discount was $827 million in 2020, down from $933 million in 2019, primarily due to TDCC's redemption of long-term debt in 2019 and debt issuances at lower coupon rates in 2020.
−Removed: Interest expense and amortization of debt discount in 2019 was down from $1,063 million in 2018, primarily due to debt reductions and lower interest bearing notes issued in the fourth quarter of 2018, which replaced higher interest bearing notes redeemed in the fourth quarter of 2018.
−Removed: See Liquidity and Capital Resources in Management's Discussion and Analysis of Financial Condition and Results of Operations and Notes 11 and 15 to the Consolidated Financial Statements for additional information related to debt financing activity.
−Removed: Interest expense and amortization of debt discount was $827 million in 2020, down from $952 million in 2019 and $1,063 million in 2018.
−Removed: In addition to the amounts previously discussed above for Dow Inc., TDCC had interest expense related to an intercompany loan with Dow Inc.
−Removed: See Note 25 to the Consolidated Financial Statements for additional information.
+Added: Interest expense and amortization of debt discount was $731 million in 2021, compared with $827 million in 2020 and $933 million and $952 million for Dow Inc.
+Added: and TDCC, respectively, in 2019.
+Added: Interest expense and amortization of debt discount decreased in 2021 primarily due to lower coupon rates and the redemption of debt.
+Added: The decrease in 2020 is primarily due to TDCC's redemption of long-term debt in 2019 and debt issuances at lower coupon rates in 2020.
+Added: See Liquidity and Capital Resources in Management's Discussion and Analysis of Financial Condition and Results of Operations and Note 15 to the Consolidated Financial Statements for additional information related to debt financing activity.
+Added: In addition, TDCC had interest expense related to an intercompany loan with Dow Inc.
Provision for Income Taxes on Continuing Operations
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The CARES Act was enacted on March 27, 2020 in the United States.
−Removed: There were no significant impacts to the Company's provision for income taxes on continuing operations in 2020 as a result of the CARES Act legislation.
+Added: There were no significant impacts to the Company's provision for income taxes on continuing operations in 2021 or 2020 as a result of the CARES Act legislation.
The provision for income taxes on continuing operations was $1,740 million in 2021, compared with $777 million in 2020 and $470 million in 2019.
+Added: The provision for income taxes in 2021 increased primarily due to an increase in pretax income and the recognition of uncertain tax positions in multiple jurisdictions.
+Added: These factors resulted in an effective tax rate of 21.4 percent for Dow Inc.
The tax rate for 2020 was unfavorably impacted by valuation allowances of $260 million related to foreign tax credits and other attributes that are more likely than not to remain unutilized prior to their expiration.
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As a result, deferred tax assets increased by $92 million.
−Removed: The tax rate for 2018 was favorably impacted by the reduced U.S.
−Removed: federal corporate income tax rate as a result of the Tax Cuts and Jobs Act, which was enacted on December 22, 2017, and benefits related to the issuance of stock-based compensation and unfavorably impacted by non-deductible restructuring costs and increases in statutory income in Latin America and Canada due to local currency devaluations.
−Removed: These factors resulted in an effective tax rate of 21.6 percent in 2018.
Income from Discontinued Operations, Net of Tax
−Removed: Income from discontinued operations, net of tax was $445 million in 2019 and $1,835 million in 2018, related to the distribution of AgCo and SpecCo to DowDuPont as a result of the separation.
+Added: Income from discontinued operations, net of tax was $445 million in 2019, related to the distribution of AgCo and SpecCo to DowDuPont as a result of the separation.
See Note 3 to the Consolidated Financial Statements for additional information.
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Net income attributable to noncontrolling interests was $94 million in 2021, $69 million in 2020 and $87 million in 2019.
−Removed: Net income attributable to noncontrolling interests decreased in 2019 compared with 2018, primarily due to the Company's acquisition of full ownership in a propylene oxide manufacturing joint venture on October 1, 2019 .
−Removed: Net income attributable to noncontrolling interests from discontinued operations of $13 million in 2019 and $32 million in 2018 related to the distribution of AgCo and SpecCo to DowDuPont as a result of the separation are included in the amounts above.
+Added: Net income attributable to noncontrolling interests from discontinued operations of $13 million in 2019 related to the distribution of AgCo and SpecCo to DowDuPont as a result of the separation are included in the amounts above.
See Notes 19 and 24 to the Consolidated Financial Statements for additional information.
Net Income (Loss) Available for the Common Stockholder(s)
−Removed: Net income (loss) available for Dow Inc.
−Removed: common stockholders was income of $1,225 million in 2020, compared with a loss of $1,359 million in 2019 and income of $4,641 million in 2018.
−Removed: Earnings (loss) per share of Dow Inc.
−Removed: was earnings of $1.64 per share in 2020, compared with a loss of $1.84 per share in 2019 and earnings of $6.21 per share in 2018.
+Added: Net income available for Dow Inc.
+Added: common stockholders was $6,311 million in 2021, compared with $1,225 million in 2020 and a net loss of $1,359 million in 2019.
+Added: Earnings per share of Dow Inc.
+Added: was $8.38 per share in 2021, compared with $1.64 per share in 2020 and a loss of $1.84 per share in 2019.
See Note 9 to the Consolidated Financial Statements for details on Dow Inc.'s earnings per share calculations.
−Removed: Net income (loss) available for TDCC common stockholder was income of $1,235 million in 2020, compared with loss of $1,237 million in 2019 and income of $4,641 million in 2018.
+Added: Net income available for TDCC common stockholder was $6,274 million in 2021, compared with $1,235 million in 2020 and a net loss of $1,237 million in 2019.
Following the separation from DowDuPont, TDCC's common shares are owned solely by Dow Inc.
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The Company also allocated costs previously assigned to AgCo and SpecCo ("stranded costs") to the operating segments.
−Removed: The Company’s measure of profit/loss for segment reporting purposes is Operating EBIT (for the year ended December 31, 2020) and pro forma Operating EBIT (for the years ended December 31, 2019 and 2018) as this is the manner in which the Company's chief operating decision maker ("CODM") assesses performance and allocates resources.
+Added: The Company’s measure of profit/loss for segment reporting purposes is Operating EBIT (for the years ended December 31, 2021 and 2020) and pro forma Operating EBIT (for the year ended December 31, 2019) as this is the manner in which the Company's chief operating decision maker ("CODM") assesses performance and allocates resources.
The Company defines Operating EBIT as earnings (i.e., "Income (loss) from continuing operations before income taxes") before interest, excluding the impact of significant items.
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items that principally apply to Dow as a whole are assigned to Corporate.
−Removed: The Company also presents pro forma net sales for the years ended December 31, 2019 and 2018, as it is included in management’s measure of segment performance and is regularly reviewed by the CODM.
+Added: The Company also presents pro forma net sales for the year ended December 31, 2019, as it is included in management’s measure of segment performance and is regularly reviewed by the CODM.
Pro forma net sales includes the impact of various manufacturing, supply and service related agreements entered into with DuPont and Corteva in connection with the separation which provide for different pricing than the historical intercompany and intracompany pricing practices of TDCC and Historical DuPont.
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PACKAGING & SPECIALTY PLASTICS
−Removed: Packaging & Specialty Plastics consists of two highly integrated global businesses:
+Added: The Packaging & Specialty Plastics operating segment consists of two highly integrated global businesses:
Hydrocarbons & Energy and Packaging and Specialty Plastics.
−Removed: The segment employs the industry’s broadest polyolefin product portfolio, supported by the Company’s proprietary catalyst and manufacturing process technologies, to work at the customer’s design table throughout the value chain to deliver more reliable and durable, higher performing, and more sustainable plastics to customers in food and specialty packaging;
+Added: The segment employs the industry’s broadest polyolefin product portfolio, supported by the Company’s proprietary catalyst and manufacturing process technologies.
+Added: These differentiators, plus collaboration at the customer’s design table, enable the segment to deliver more reliable, durable, higher-performing solutions designed for recyclability and enhanced plastics circularity and sustainability.
+Added: The segment serves customers, brand owners and ultimately consumers in key markets including food and specialty packaging;
industrial and consumer packaging;
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As part of this arrangement, the Company purchases and sells Sadara products for a marketing fee.
+Added: In March 2021, Dow and the Saudi Arabian Oil Company agreed to transition the marketing rights and responsibilities for Sadara’s finished products to levels more consistent with each partner’s equity ownership.
+Added: This transition began in July 2021 and is being implemented over the next five years.
Packaging & Specialty Plastics
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Volume 2 1 (3)
−Removed: Portfolio & other — — 5
Total 54 % (10) % (16) %
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Local price & product mix (12) %
−Removed: Currency (1) 1
−Removed: Total (16) % 7 %
2021 Versus 2020
+Added: Packaging & Specialty Plastics net sales were $28,128 million in 2021, up 54 percent from net sales of $18,301 million in 2020, with local price up 50 percent, volume up 2 percent and a favorable currency impact of 2 percent, primarily in EMEAI.
+Added: Local price increased in both businesses and across all geographic regions, driven by tight supply and demand dynamics.
+Added: Local price increased in Hydrocarbons & Energy as prices for co-products are generally correlated to Brent crude oil prices, which, on average, increased 64 percent compared with 2020.
+Added: Local price increased in Packaging and Specialty Plastics driven by favorable supply and demand dynamics in polyethylene, notably in industrial and consumer packaging and flexible food and beverage packaging applications.
+Added: Volume increased in Hydrocarbons & Energy, primarily in the U.S.
+Added: & Canada and EMEAI, more than offsetting decreased volume in Asia Pacific.
+Added: Volume decreased in Packaging and Specialty Plastics, primarily in Asia Pacific and Latin America as supply constraints continue to lower exports, more than offsetting an increase in the U.S.
+Added: Operating EBIT was $6,638 million in 2021, up $4,313 million from Operating EBIT of $2,325 million in 2020.
+Added: Operating EBIT increased primarily due to integrated margin expansion and increased equity earnings at Sadara and the Thai and Kuwait joint ventures.
+Added: 2020 Versus 2019
Packaging & Specialty Plastics net sales were $18,301 million in 2020, down 10 percent from net sales and pro forma net sales of $20,245 million in 2019, with local price down 11 percent and volume up 1 percent.
−Removed: Net sales declined in the first half of the year, reflecting the impact of the COVID-19 pandemic, while strong supply and demand fundamentals took hold in the second half of the year.
+Added: Net sales declined in the first half of the year, reflecting the impact of the COVID-19 pandemic, while strong supply and demand dynamics took hold in the second half of the year.
Local price decreased in both businesses and across all geographic regions, driven by reduced polyethylene prices and lower global energy prices.
6 unchanged sentences
These declines more than offset cost reductions, decreased planned maintenance turnaround costs and increased equity earnings.
−Removed: 2019 Versus 2018
−Removed: Packaging & Specialty Plastics net sales were $20,245 million in 2019, down 16 percent from net sales of $24,195 million in 2018.
−Removed: Pro forma net sales were $20,245 million in 2019, a decrease of 16 percent compared with pro forma net sales of $24,237 million in 2018, with local price down 12 percent, volume down 3 percent, and an unfavorable currency impact of 1 percent, primarily in EMEAI.
−Removed: Local price decreased in both businesses and across all geographic regions driven by reduced polyethylene prices and lower prices for Hydrocarbons & Energy co-products.
−Removed: Volume declined for the segment in all geographic regions, except Asia Pacific.
−Removed: Hydrocarbons & Energy volume declines more than offset volume gains in Packaging and Specialty Plastics.
−Removed: Volume decreased in Hydrocarbons & Energy primarily due to planned maintenance turnaround activity in Europe, increased internal consumption of ethylene on the U.S.
−Removed: Gulf Coast and lighter feedslate usage in Europe, leading to lower co-product production.
−Removed: Volume increased in Packaging and Specialty Plastics in Asia Pacific and EMEAI.
−Removed: Packaging and Specialty Plastics volume growth was driven by strong end-market growth in flexible food and specialty packaging, industrial and consumer packaging, and health and hygiene applications.
−Removed: Pro forma Operating EBIT was $2,904 million in 2019, down 19 percent from pro forma Operating EBIT of $3,593 million in 2018.
−Removed: Pro forma Operating EBIT decreased primarily due to lower selling prices, reduced equity earnings at the Kuwait joint ventures due to lower polyethylene margins, lower sales volume in the Hydrocarbons & Energy business and the impact of an outage in Argentina, which more than offset lower feedstock and other raw material costs, volume gains in the Packaging and Specialty Plastics business and cost synergies.
INDUSTRIAL INTERMEDIATES & INFRASTRUCTURE
−Removed: Industrial Intermediates & Infrastructure consists of two customer-centric global businesses - Industrial Solutions and Polyurethanes & Construction Chemicals - that develop important intermediate chemicals that are essential to manufacturing processes, as well as downstream, customized materials and formulations that use advanced development technologies.
+Added: The Industrial Intermediates & Infrastructure operating segment consists of two customer-centric global businesses - Industrial Solutions and Polyurethanes & Construction Chemicals - that develop important intermediate chemicals that are essential to manufacturing processes, as well as downstream, customized materials and formulations that use advanced development technologies.
These businesses primarily produce and market ethylene oxide and propylene oxide derivatives that are aligned to market segments as diverse as appliances, coatings, electronics, surfactants for cleaning and sanitization, infrastructure and oil and gas.
−Removed: The global scale and reach of these businesses, world-class technology and R&D capabilities and materials science expertise enable the Company to be a premier solutions provider offering customers value-add sustainable solutions to enhance comfort, energy efficiency, product effectiveness and durability across a wide range of home comfort and appliances, building and construction, adhesives and lubricant applications, among others.
+Added: The businesses' global scale and reach, world-class technology, R&D capabilities and materials science expertise enable the Company to be a premier solutions provider offering customers value-add sustainable solutions to enhance comfort, energy efficiency, product effectiveness and durability across a wide range of home comfort and appliance, building and construction, mobility and transportation, adhesive and lubricant applications, among others.
This segment also includes a portion of the results of EQUATE, TKOC, Map Ta Phut and Sadara, all joint ventures of the Company.
1 unchanged sentence
As part of this arrangement, the Company purchases and sells Sadara products for a marketing fee.
+Added: In March 2021, Dow and the Saudi Arabian Oil Company agreed to transition the marketing rights and responsibilities for Sadara’s finished products to levels more consistent with each partner’s equity ownership.
+Added: This transition began in July 2021 and is being implemented over the next five years.
Industrial Intermediates & Infrastructure
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Local price & product mix (12) %
−Removed: Currency (2) 1
−Removed: Portfolio & other — —
−Removed: Total (13) % 19 %
2021 Versus 2020
+Added: Industrial Intermediates & Infrastructure net sales were $16,851 million in 2021, up 40 percent from $12,021 million in 2020, with local price up 40 percent, a favorable currency impact of 2 percent and volume down 2 percent.
+Added: Local price increased in both businesses and across all geographic regions, primarily driven by strong supply and demand dynamics and rising energy prices.
+Added: Currency favorably impacted sales in both businesses.
+Added: Volume in Polyurethanes & Construction Chemicals decreased in the U.S.
+Added: & Canada and Asia Pacific, partially offset by increased volume in EMEAI and Latin America.
+Added: The volume decrease in Polyurethanes & Construction Chemicals was due to a decrease in vinyl chloride monomers mainly related to a planned transition of a low-margin co-producer contract as well as a decrease in isocyanates, which were partially offset by robust consumer demand in polyurethane systems.
+Added: Despite strong consumer demand, volume in Industrial Solutions decreased in all geographic regions, except Latin America and was largely driven by weather-related supply constraints.
+Added: Operating EBIT was $2,282 million in 2021, up $1,927 million from Operating EBIT of $355 million in 2020.
+Added: Operating EBIT increased primarily due to margin expansion from strong supply and demand dynamics in Polyurethanes & Construction Chemicals and higher equity earnings at Sadara and the Kuwait joint ventures.
+Added: 2020 Versus 2019
Industrial Intermediates & Infrastructure net sales were $12,021 million in 2020, down 11 percent from $13,440 million in 2019.
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The overall decrease in equity losses was driven by lower equity losses from Sadara partially offset by decreased equity earnings from EQUATE.
−Removed: 2019 Versus 2018
−Removed: Industrial Intermediates & Infrastructure net sales were $13,440 million in 2019, down 13 percent from $15,447 million in 2018.
−Removed: Pro forma net sales were $13,449 million in 2019, down from pro forma net sales of $15,465 million in 2018.
−Removed: Pro forma net sales decreased 13 percent in 2019, with local price down 12 percent and an unfavorable currency impact of 2 percent, primarily in EMEAI, which were partially offset by a 1 percent increase in volume.
−Removed: Price decreased in both businesses and all geographic regions, driven by lower feedstock and other raw material costs and unfavorable supply and demand fundamentals.
−Removed: Polyurethanes & Construction Chemicals reported volume increases in all geographic regions, primarily reflecting increased supply from Sadara and growth in polyurethanes systems applications, which were partially offset by a decline of caustic soda volume due to planned maintenance turnaround activities.
−Removed: Industrial Solutions volume decreased in EMEAI and the U.S & Canada and was flat in Latin America and Asia Pacific, primarily driven by reduced availability of glycol ethers, performance solvents and monoethylene glycol due to planned and unplanned events that more than offset higher demand for industrial specialties.
−Removed: Pro forma Operating EBIT was $845 million in 2019, down 52 percent from pro forma Operating EBIT of $1,767 million in 2018.
−Removed: Pro forma Operating EBIT decreased as a result of margin compression across both businesses as well as lower equity earnings from the Kuwait joint ventures and increased equity losses from Sadara, which more than offset cost reductions.
PERFORMANCE MATERIALS & COATINGS
−Removed: Performance Materials & Coatings includes industry-leading franchises that deliver a wide array of solutions into consumer and infrastructure end-markets.
+Added: The Performance Materials & Coatings operating segment includes industry-leading franchises that deliver a wide array of solutions into consumer, infrastructure and mobility end-markets.
The segment consists of two global businesses:
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and building and infrastructure end-markets.
−Removed: Both businesses employ materials science capabilities, global reach and unique products and technology to combine chemistry platforms to deliver differentiated offerings to customers.
+Added: Both businesses employ materials science capabilities, global reach and unique products and technology to combine chemistry platforms to deliver differentiated, market-driven and sustainable innovations to customers.
Performance Materials & Coatings
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2021 Versus 2020
+Added: Performance Materials & Coatings net sales were $9,672 million in 2021, up 22 percent from net sales of $7,951 million in 2020, with local price up 19 percent, volume up 1 percent, and a favorable currency impact of 2 percent.
+Added: Local price increased in both businesses and across all geographic regions.
+Added: Consumer Solutions local price increased in both upstream siloxanes and downstream silicones due to favorable supply and demand dynamics and higher raw material costs.
+Added: Local price increased in Coatings & Performance Monomers primarily due to improved supply and demand dynamics and higher raw material costs in acrylic monomers and architectural coatings.
+Added: Volume increased i n the U.S.
+Added: & Canada, Asia Pacific and Latin America, which was partially offset by a decrease in EMEAI.
+Added: Consumer Solutions volume increased due to higher demand in all geographic regions partially offset by planned maintenance turnaround activity.
+Added: Volume decreased in Coatings & Performance Monomers in all geographic regions primarily due to supply availability challenges caused by weather-related outages and third-party supply and logistics constraints.
+Added: The favorable currency impact was driven by Asia Pacific and EMEAI.
+Added: Operating EBIT was $866 million in 2021, up $552 million from Operating EBIT of $314 million in 2020.
+Added: Operating EBIT increased primarily due to margin expansion and higher volume in Consumer Solutions.
+Added: 2020 Versus 2019
Performance Materials & Coatings net sales were $7,951 million in 2020, down 11 percent from net sales of $8,923 million in 2019.
Net sales decreased 11 percent from pro forma net sales of $8,961 million in 2019, with local price down 6 percent and volume down 5 percent.
−Removed: Local price decreased in both businesses and all geographic regions.
−Removed: Consumer Solutions local price declined in all regions, primarily in upstream siloxanes due to weak supply and demand fundamentals.
+Added: Local price decreased in both businesses and across all geographic regions.
+Added: Consumer Solutions local price declined in all regions, primarily in upstream siloxanes due to weak supply and demand dynamics.
Local price decreased in Coatings & Performance Monomers in response to lower feedstock and other raw material costs.
5 unchanged sentences
Operating EBIT decreased primarily due to margin compression, lower demand in siloxanes as a result of the COVID-19 pandemic and higher manufacturing and planned maintenance turnaround costs that more than offset volume gains in Coatings & Performance Monomers and lower SG&A costs.
−Removed: 2019 Versus 2018
−Removed: Performance Materials & Coatings net sales were $8,923 million in 2019, down 8 percent from net sales of $9,677 million in 2018.
−Removed: Pro forma net sales were $8,961 million in 2019, down 9 percent from pro forma net sales of $9,865 million in 2018 with local price down 6 percent, an unfavorable currency impact of 2 percent and volume down 1 percent.
−Removed: Local price decreased in both businesses and all geographic regions.
−Removed: Local price decreased in Consumer Solutions due to lower siloxanes prices, primarily in Asia Pacific and EMEAI.
−Removed: Coatings & Performance Monomers local price declined in all geographic regions in response to lower feedstock and other raw material costs.
−Removed: Volume for the segment declined in all geographic regions, except Asia Pacific.
−Removed: Consumer Solutions volume was flat, with volume growth in Asia Pacific, offset by volume declines in Latin America and EMEAI.
−Removed: Consumer Solutions volume was flat in the U.S.
−Removed: Coatings & Performance Monomers volume declined in all geographic regions.
−Removed: The decline in volume was driven by increased captive use of coatings products which drove soft demand in coating applications, primarily architectural binders, and lower demand for acrylates and methacrylates due to supply and demand balances.
−Removed: Pro forma Operating EBIT was $918 million in 2019, down 26 percent from pro forma Operating EBIT of $1,246 million in 2018.
−Removed: Pro forma Operating EBIT decreased primarily due to margin compression in both businesses, which more than offset lower planned maintenance turnaround spending and cost synergies.
Corporate includes certain enterprise and governance activities (including insurance operations, environmental operations, etc.);
7 unchanged sentences
Pro forma Operating EBIT $ (315)
−Removed: Equity losses $ (31) $ (20) $ (20)
+Added: Equity earnings (losses) $ 7 $ (31) $ (20)
2021 Versus 2020
+Added: Net sales for Corporate, which primarily relate to the Company's insurance operations, were $317 million in 2021, up from net sales of $269 million in 2020.
+Added: Operating EBIT was a loss of $253 million in 2021, compared with Operating EBIT loss of $279 million in 2020.
+Added: Operating EBIT improved primarily due to improved equity earnings.
+Added: 2020 Versus 2019
Net sales for Corporate, which primarily relate to the Company's insurance operations, were $269 million in 2020, down from net sales and pro forma net sales of $343 million in 2019.
1 unchanged sentence
Compared with 2019, Operating EBIT improved primarily due to cost reductions and stranded cost removal throughout 2019.
−Removed: 2019 Versus 2018
−Removed: Net sales and pro forma net sales for Corporate, which primarily relate to the Company's insurance operations, were $343 million in 2019, up from net sales and pro forma net sales of $285 million in 2018.
−Removed: Pro forma Operating EBIT was a loss of $315 million in 2019, compared with a pro forma Operating EBIT loss of $370 million in 2018.
−Removed: Compared with 2018, pro forma Operating EBIT improved primarily due to cost reductions and stranded cost removal.
Operating Segments & End-Market Expectations
−Removed: In 2021, the Company expects continued volatility across crude oil, natural gas and feedstocks, driven by external macroeconomic and geopolitical factors, including the continuation of an uneven recovery from the COVID-19 pandemic.
−Removed: Overall, the Company expects crude oil prices to be, on average, higher than 2020 with an expectation of firming prices in the second half of the year.
−Removed: Crude oil fundamentals suggest global supply will meet or slightly lag demand;
−Removed: however, the uneven pandemic recovery could slow demand, leading to further volatility in prices.
−Removed: The Company expects natural gas prices to remain competitive.
−Removed: The Company expects the U.S.
−Removed: & Canada gas supply to continue to recover through 2021.
−Removed: Robust supplies of natural gas are expected to keep domestic prices globally competitive.
−Removed: exports of liquefied natural gas ("LNG") are expected to remain strong.
−Removed: In Europe, the supply of natural gas is expected to continue to be plentiful, both from pipeline supply and from growing LNG imports.
−Removed: In Packaging & Specialty Plastics, the global economic recovery is expected to drive demand growth, notably for flexible food and specialty packaging, industrial and consumer packaging and functional polymers.
−Removed: Integrated margins are expected to improve, supported by strong supply and demand fundamentals expected in the first half of the year and the Company’s regional feedstock cost advantages.
−Removed: Profitability could vary materially, particularly in the latter part of the year, depending on supply and demand dynamics, global gross domestic product ("GDP") growth rates, industry operating rates, timing of new industry capacity startups and fluctuations in global crude oil, natural gas and feedstock prices.
−Removed: The Hydrocarbons & Energy business expects to bring online approximately 130,000 metric tons of additional ethylene capacity in Canada as part of its suite of incremental growth investments.
−Removed: The new capacity is expected to come online in the first half of 2021.
−Removed: In Industrial Intermediates & Infrastructure, above GDP top line growth is expected, driven by strong demand for products used in furniture and bedding, appliances, automotive, construction, electronics and pharma applications.
−Removed: Prices are expected to increase for most products, including continued recovery in monoethylene glycol pricing.
−Removed: Supply and demand fundamentals for methylene diphenyl diisocyanate and propylene oxide are expected to remain consistent with what was experienced in 2020, with additional industry capacity anticipated to come online in 2021.
−Removed: Margins are also expected to improve, driven by demand growth.
−Removed: In Performance Materials & Coatings, prices for siloxanes are expected to improve compared with 2020, but remain below peak pricing that was seen in 2018.
−Removed: Downstream silicones volume is expected to grow in excess of GDP, particularly for products used in mobility and transportation, high performance building and construction, industrial and consumer and electronics applications.
−Removed: The Company will continue to pursue incremental downstream silicones capacity debottleneck and growth projects to meet expected demand in consumer driven end-markets.
−Removed: Global architectural coatings and industrial coatings demand is anticipated to see continued recovery as the do-it-yourself and retail end-markets remain strong and contractor demand improves.
−Removed: Highly competitive environments in both architectural and industrial coatings are expected to continue, but the Company looks to capture opportunities from customers’ shift to sustainable chemistries where Dow has unique technologies and solutions to compete.
+Added: In 2022, economic forecasts are projecting above average global gross domestic product ("GDP") growth rates due to strong industrial and consumer demand trends which have the potential to positively impact sales volume.
+Added: Inflationary impacts on natural gas and feedstocks, driven by external macroeconomic and geopolitical factors, remain a potential risk in the near-term, but are expected to be moderate as warmer weather lowers demand for heating supply.
+Added: The Company anticipates constructive global demand for crude oil compared with 2021 due to ongoing recovery in travel and mobility.
+Added: Crude oil fundamentals suggest global supply will lag the growing demand that provides support to oil prices and oil-to-gas spreads.
+Added: In Packaging & Specialty Plastics, supply improvements following significant weather-related disruptions in 2021 are expected to drive sales volume on continued underlying demand strength, notably in flexible food and specialty packaging, industrial and consumer packaging and functional polymers.
+Added: Integrated margins are expected to stabilize with recent industry supply additions.
+Added: The Company’s regional feedstock cost advantages will help offset elevated raw material and energy costs.
+Added: Other important factors that will impact performance are raw material and logistics challenges;
+Added: industry operating rates;
+Added: and timing of additional industry capacity startups.
+Added: In Industrial Intermediates & Infrastructure, volume growth is expected across the portfolio, driven by continued underlying demand strength for products used in furniture and bedding, appliances, automotive, construction, electronics and pharma applications.
+Added: The methylene diphenyl diisocyanate value chain is expected to remain tight with industry capacity additions trailing demand growth.
+Added: Propylene oxide is expected to be impacted by new capacity entering the market, particularly in Asia Pacific.
+Added: Ethylene oxide supply is expected to remain tight, with limited industry capacity additions in the near-term and continued demand strength.
+Added: Margins for the segment are expected to benefit from high-value specialties aligned to strategic incremental growth capacity additions.
+Added: In Performance Materials & Coatings, sales growth is expected in downstream silicones, particularly for products used in mobility and transportation, high performance building and construction, industrial, consumer, and electronics applications.
+Added: The Company continues to pursue incremental downstream silicones capacity debottlenecking and growth projects to meet demand growth in consumer-driven end-markets.
+Added: Within siloxanes, increased supply availability is expected to drive sales volume.
+Added: Global demand strength in architectural and industrial coatings is expected to drive sales volume.
+Added: The Company remains well-positioned to benefit from its customers’ shift to sustainable chemistries where Dow has unique technologies and solutions to offer in both business units.
Other factors impacting operating segment profitability include:
−Removed: • Planned maintenance turnaround spending is expected to be approximately $400 million higher, including joint ventures.
−Removed: Spending will be higher in the second and third quarters, as the COVID-19 pandemic delayed certain planned maintenance turnaround activities in 2020.
−Removed: • Equity in earnings (losses) of nonconsolidated affiliates is expected to be flat compared with 2020 as projected margin improvements are expected to be partially offset by increased planned maintenance turnaround spending at joint ventures.
+Added: • Planned maintenance turnaround spending is expected to increase approximately $100 million compared with 2021 due to inflationary pressures on materials and labor.
+Added: • Equity in earnings of nonconsolidated affiliates is expected to decrease compared with 2021 as margins compress on industry supply additions, lower Asian olefins and mono ethylene glycol prices, and increasing raw material costs.
Projected Uses of Cash
Items that may impact the consolidated statements of cash flows in 2022 include:
−Removed: • Required cash contributions to global pension plans are expected to be approximately $300 million.
+Added: • Cash contributions to pension plans are expected to be approximately $250 million.
• Capital expenditures are expected to be approximately $2.2 billion.
−Removed: The Company will adjust its spending through the year as economic conditions develop.
−Removed: • Cash expenditures related to the Digital Acceleration program announced on January 28, 2021 are expected to be approximately $150 million in 2021.
+Added: • Cash expenditures related to the Digital Acceleration program are expected to be $250 million in 2022.
• Cash outflows related to the Company's 2020 Restructuring Program, including restructuring implementation costs, are expected to be approximately $175 million.
−Removed: • Cash dividends from equity companies are expected to be approximately $200 million lower than 2020.
−Removed: • Cash outflows to drive further deleveraging are expected to be $1 billion.
−Removed: Sadara debt re-profile
−Removed: In January 2021, Sadara reached an agreement in principle with its lenders to re-profile Sadara’s outstanding project financing debt.
−Removed: Key features of the Sadara debt re-profile are expected to include:
−Removed: • An extension of the contractual debt maturity from 2029 to 2038.
−Removed: • A modified repayment schedule aligned with Sadara’s projected cash generation profile, including a grace period until June 2026 during which interest-only payments are required, and an excess cash sweep mechanism to prepay debt.
−Removed: • No change to the notional debt amount and no other early repayment requirements.
−Removed: As a result, Sadara is expected to have significantly improved cash flow self-sufficiency.
−Removed: The re-profiling agreements have not been finalized and remain subject to modification until the transaction formally closes, which is expected to occur in the first quarter of 2021.
−Removed: The impacts to Dow’s commitments are expected to include the following, which are in proportion to Dow’s 35 percent ownership interest in Sadara:
−Removed: • Dow will provide guarantees for $1.3 billion of Sadara’s debt, effectively replacing approximately $4.0 billion of prior guarantees.
−Removed: • Additionally, Dow will provide guarantees for its portion of all Sadara interest payments due during the grace period.
−Removed: Dow's pro-rata share of any potential shortfall will be funded by a new $500 million revolving credit facility guaranteed by Dow, which is expected to be established by Sadara in the first quarter of 2021.
−Removed: • Dow’s existing $220 million letter of credit related to the guarantee of one future Sadara debt service schedule payment will be cancelled.
−Removed: As a result of these actions, the Company does not expect to provide any shareholder loans or equity contributions to Sadara in 2021.
−Removed: The impact of the debt re-profiling efforts and related actions taken by the Company are not expected to have a material impact on the Company’s results of operations.
+Added: • Cash dividends from equity companies are expected to increase following increased equity earnings in 2021.
LIQUIDITY AND CAPITAL RESOURCES
The Company had cash and cash equivalents of $2,988 million at December 31, 2021 and $5,104 million at December 31, 2020, of which $1,745 million at December 31, 2021 and $862 million at December 31, 2020, was held by subsidiaries in foreign countries, including United States territories.
−Removed: The decrease in cash and cash equivalents held by subsidiaries in foreign countries is due to repatriation activities.
For each of its foreign subsidiaries, the Company makes an assertion regarding the amount of earnings intended for permanent reinvestment, with the balance available to be repatriated to the United States.
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Cash Flows from Operating Activities
−Removed: Cash provided by operating activities from continuing operations increased in 2020 compared with 2019.
−Removed: The improvement was primarily due to a decrease in integration and separation costs.
−Removed: Also contributing to the improvement from the prior year was a decrease in performance-based compensation payments, a cash receipt for the refund of withholding tax related to the Nova ethylene asset matter and an increase in advance payments from customers, which were partially offset by a decrease in dividends received from nonconsolidated affiliates, a reduction in cash generated from working capital and a cash receipt in 2019 related to the Nova ethylene asset matter.
−Removed: Cash provided by operating activities from continuing operations increased in 2019 compared with 2018.
−Removed: The increase was primarily due to improvements in working capital, a cash receipt related to the Nova ethylene asset matter, advance payments from customers for product supply agreements, lower pension contributions and higher dividends received from nonconsolidated affiliates, which were partially offset by a decrease in cash earnings.
+Added: Cash provided by operating activities from continuing operations in 2021 was primarily driven by the Company's cash earnings and dividends from equity method investments, which were partially offset by cash used for working capital requirements, pension contributions and performance-based compensation payments.
+Added: Cash provided by operating activities from continuing operations in 2020 was primarily driven by the Company's cash earnings, cash receipts related to an advance payment from a customer and the Nova ethylene asset matter, dividends from equity method investments and working capital improvements, which were partially offset by pension contributions.
+Added: Cash provided by operating activities from continuing operations in 2019 was primarily driven by the Company's cash earnings, dividends from equity method investments, working capital improvements, cash receipts related to an advance payment from a customer and the Nova ethylene asset matter, which were partially offset by performance-based compensation payments and pension contributions.
Net Working Capital and Current Ratio at Dec 31 Dow Inc.
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Current ratio 1.58:1 1.72:1 1.60:1 1.80:1
−Removed: Working Capital Metrics Three Months Ended 1
−Removed: Twelve Months Ended
−Removed: Mar 31, 2020 Jun 30, 2020 Sep 30, 2020 Dec 31, 2020 Dec 31, 2020 Dec 31, 2019
+Added: Working Capital Metrics Twelve Months Ended
+Added: Dec 31, 2021 Dec 31, 2020
Days sales outstanding in trade receivables 40 48
1 unchanged sentence
Days payables outstanding 57 66
−Removed: Due to the impacts related to the COVID-19 pandemic, quarterly working capital metrics are presented for 2020.
−Removed: Cash provided by (used for) operating activities from discontinued operations in 2020 and 2019 primarily related to cash payments and receipts the Company had with DuPont and Corteva that related to certain agreements and matters related to the separation from DowDuPont.
−Removed: Cash provided by operating activities from discontinued operations decreased in 2019 compared with 2018, primarily due to the separation of AgCo and SpecCo on April 1, 2019.
+Added: Cash provided by (used for) operating activities from discontinued operations primarily related to cash payments and receipts the Company had with DuPont and Corteva that related to certain agreements and matters related to the separation from DowDuPont.
See Note 3 to the Consolidated Financial Statements for additional information.
Cash Flows from Investing Activities
+Added: Cash used for investing activities from continuing operations in 2021 was primarily for capital expenditures and purchases of investments and previously leased assets, which were partially offset by proceeds from sales and maturities of investments.
Cash used for investing activities from continuing operations in 2020 was primarily for capital expenditures, purchases of investments, investments in and loans to nonconsolidated affiliates (related to Sadara) and acquisitions of property and businesses, which were partially offset by proceeds from sales and maturities of investments and proceeds from sales of property and businesses.
Cash used for investing activities from continuing operations in 2019 was primarily for capital expenditures, purchases of investments and investments in and loans to nonconsolidated affiliates, which were partially offset by proceeds from sales and maturities of investments.
−Removed: Cash used for investing activities from continuing operations in 2018 was primarily for capital expenditures and purchases of investments, which were partially offset by proceeds from sales and maturities of investments and proceeds from interests in trade accounts receivable conduits.
−Removed: The Company loaned Sadara $333 million in 2020 ($473 million in 2019 and zero in 2018).
−Removed: As a result of Sadara's debt re-profiling, the Company does not expect to provide any shareholder loans or equity contributions to Sadara in 2021.
+Added: The Company loaned Sadara $333 million in 2020 and $473 million in 2019.
+Added: As a result of Sadara's debt re-profiling completed in the first quarter of 2021, the Company did not provide any shareholder loans or equity contributions to Sadara in 2021.
See Notes 12 and 16 to the Consolidated Financial Statements for additional information.
−Removed: The Company's capital expenditures related to continuing operations, including capital expenditures of consolidated variable interest entities, were $1,252 million in 2020, $1,961 million in 2019 and $2,091 million in 2018.
−Removed: Capital spending was lower in 2020 as the Company proactively reduced its capital expenditures to focus on cash and maintaining financial strength during the COVID-19 pandemic.
+Added: The Company's capital expenditures related to continuing operations were $1,501 million in 2021, $1,252 million in 2020 and $1,961 million in 2019.
+Added: Capital spending was higher in 2021 as the Company ramped up its growth projects and investments to keep pace with demand recovery.
The Company expects capital spending in 2022 to be approximately $2.2 billion.
−Removed: The Company will adjust its spending through the year as economic conditions develop.
−Removed: Capital spending in 2018, 2019 and 2020, included spending related to certain U.S.
−Removed: Gulf Coast investment projects including:
−Removed: a NORDEL™ Metallocene EPDM production facility, a Low Density Polyethylene ("LDPE") production facility, a High Melt Index ("HMI") AFFINITY™ polymer production facility and debottlenecking of an existing bi-modal gas phase polyethylene production facility, all of which commenced operations in 2018;
−Removed: an expansion of the Company's new ethylene production facility in Freeport, Texas, which commenced operations in 2020, bringing the facility's total ethylene capacity to 2,000 kilotonnes per annum and making it the largest ethylene cracker in the world;
−Removed: the addition of a furnace to the Company's ethylene production facility in Alberta, Canada, which is expected to commence operations in the first half of 2021;
−Removed: and the retrofit of one of the Company's Louisiana steam crackers with Dow's proprietary fluidized catalytic dehydrogenation ("FCDh") technology to produce on-purpose propylene, which is expected by the end of 2021.
+Added: Capital spending in recent years has included an expansion of the Company's new ethylene production facility in Freeport, Texas, which commenced operations in 2020, bringing the facility's total ethylene capacity to 2,000 kilotonnes per annum and making it the largest ethylene cracker in the world;
+Added: the addition of a furnace to the Company's ethylene production facility in Alberta, Canada, which commenced operations in 2021;
+Added: the retrofit of one of the Company's Louisiana steam crackers with Dow's proprietary fluidized catalytic dehydrogenation ("FCDh") technology to produce on-purpose propylene and the addition of a new specialty alkoxylation reactor in Plaquemine, Louisiana, which are both expected to be completed in the second half of 2022;
+Added: and the addition of an integrated MDI distillation and prepolymers facility at its site in Freeport, Texas, which is expected to be completed in 2023.
Cash used for investing activities from discontinued operations in 2019 was primarily for capital expenditures, partially offset by proceeds from the sales of property, businesses and ownership interests in nonconsolidated affiliates.
−Removed: Cash used for investing activities from discontinued operations in 2018 was primarily for capital expenditures, partially offset by proceeds from the sales of property and businesses.
Cash Flows from Financing Activities
+Added: Cash used for financing activities from continuing operations in 2021 included payments on long-term debt and transaction financing, debt issuance and other costs, which were partially offset by proceeds from issuance of common stock.
+Added: In addition, Dow Inc.
+Added: included cash outflows for dividends paid to stockholders and purchases of treasury stock and TDCC included cash outflows for dividends paid to Dow Inc.
Cash used for financing activities from continuing operations in 2020 included payments on long-term debt, changes in short-term notes payable and transaction financing, debt issuance and other costs, which were partially offset by proceeds from issuance of long-term debt.
4 unchanged sentences
received cash as part of the separation from DowDuPont, which was more than offset by dividends paid to stockholders and purchases of treasury stock.
−Removed: Cash used for financing activities in continuing operations in 2018 included dividends paid to DowDuPont and payments of long-term debt, which were partially offset by proceeds from issuance of long-term debt.
See Notes 15 and 18 to the Consolidated Financial Statements for additional information related to the issuance and retirement of debt and the Company's share repurchases and dividends.
−Removed: Cash used for financing activities from discontinued operations in 2019 and 2018 primarily related to distributions to noncontrolling interests and employee taxes paid for share-based payment arrangements.
+Added: Cash used for financing activities from discontinued operations in 2019 primarily related to distributions to noncontrolling interests and employee taxes paid for share-based payment arrangements.
Non-GAAP Cash Flow Measures
−Removed: Cash Flows from Operating Activities - Continuing Operations - Excluding Impact of ASU 2016-15
−Removed: Cash flows from operating activities - continuing operations, excluding the impact of Accounting Standards Update ("ASU") 2016-15, is defined as cash provided by operating activities - continuing operations, excluding the impact of ASU 2016-15 and related interpretive guidance.
−Removed: Management believes this non-GAAP financial measure is relevant and meaningful as it presents cash flows from operating activities inclusive of all trade accounts receivable collection activity, which Dow utilizes in support of its operating activities.
−Removed: This measure is only applicable for the year ended December 31, 2018 as there were no sales of trade accounts receivable under the applicable programs for the years ended December 31, 2020 and 2019.
Free Cash Flow
−Removed: Dow defines free cash flow as cash flows from operating activities - continuing operations, excluding the impact of ASU 2016-15, less capital expenditures.
+Added: Dow defines free cash flow as "Cash provided by operating activities - continuing operations," less capital expenditures.
Under this definition, free cash flow represents the cash generated by Dow from operations after investing in its asset base.
Free cash flow, combined with cash balances and other sources of liquidity, represents the cash available to fund obligations and provide returns to shareholders.
−Removed: Free cash flow is an integral financial measure used in Dow's financial planning process.
+Added: Free cash flow is an integral financial measure used in the Company's financial planning process.
Operating EBITDA and Pro Forma Operating EBITDA
−Removed: Dow defines Operating EBITDA (for the year ended December 31, 2020) as earnings (i.e., "Income from continuing operations before income taxes") before interest, depreciation and amortization, excluding the impact of significant items.
−Removed: Pro forma Operating EBITDA (for the years ended December 31, 2019 and 2018) is defined as earnings (i.e.
+Added: Dow defines Operating EBITDA (for the years ended December 31, 2021 and 2020) as earnings (i.e., "Income from continuing operations before income taxes") before interest, depreciation and amortization, excluding the impact of significant items.
+Added: Pro forma Operating EBITDA (for the year ended December 31, 2019) is defined as earnings (i.e.
"Income (loss) from continuing operations before income taxes") before interest, depreciation and amortization, plus pro forma adjustments, excluding the impact of significant items.
−Removed: Cash Flow Conversion
−Removed: Dow defines cash flow conversion (Operating EBITDA or pro forma Operating EBITDA to cash flow from operations) as cash flows from operating activities - continuing operations, excluding the impact of ASU 2016-15, divided by Operating EBITDA or pro forma Operating EBITDA.
+Added: Cash Flow Conversion (Operating EBITDA or Pro Forma Operating EBITDA to Cash Flow From Operations)
+Added: Dow defines cash flow conversion (Operating EBITDA or pro forma Operating EBITDA to cash flow from operations) as "Cash provided by operating activities - continuing operations," divided by Operating EBITDA or pro forma Operating EBITDA.
Management believes cash flow conversion is an important financial metric as it helps the Company determine how efficiently it is converting its earnings into cash flow.
6 unchanged sentences
Cash provided by operating activities - continuing operations (GAAP) $ 7,069 $ 6,252 $ 5,713
−Removed: Impact of ASU 2016-15 and related interpretive guidance — — 657
−Removed: Cash flows from operating activities - continuing operations - excluding impact of ASU 2016-15 (non-GAAP) $ 6,252 $ 5,713 $ 3,753
Capital expenditures (1,501) (1,252) (1,961)
Free cash flow (non-GAAP) 1
−Removed: Reconciliation of Cash Flow Conversion Dow Inc.
+Added: $ 5,568 $ 5,000 $ 3,752
+Added: Free cash flow for the year ended December 31, 2021 reflects a $1 billion elective pension contribution.
+Added: Reconciliation of Cash Flow Conversion (Operating EBITDA or Pro Forma Operating EBITDA to Cash Flow From Operations) Dow Inc.
In millions 2021 2020 2019 1
9 unchanged sentences
Operating EBITDA (non-GAAP) $ 12,375 $ 5,589 $ 7,290
−Removed: Cash flows from operating activities - continuing operations - excluding impact of ASU 2016-15 (non-GAAP) $ 6,252 $ 5,713 $ 3,753
+Added: Cash provided by operating activities - continuing operations (GAAP) $ 7,069 $ 6,252 $ 5,713
Cash flow conversion (Operating EBITDA or pro forma Operating EBITDA to cash flow from operations) (non-GAAP) 4
−Removed: Operating EBIT, depreciation and amortization and Operating EBITDA for the years ended December 31, 2019 and 2018 are presented on a pro forma basis.
−Removed: Pro forma adjustments for the years ended December 31, 2019 and 2018 include:
+Added: 57.1 % 111.9 % 78.4 %
+Added: Operating EBIT, depreciation and amortization and Operating EBITDA for the year ended December 31, 2019 is presented on a pro forma basis.
+Added: Pro forma adjustments for the year ended December 31, 2019 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 and (2) 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).
−Removed: The year ended December 31, 2020 includes integration and separation costs, restructuring and asset related charges - net, a gain on a warranty accrual adjustment of an exited business, restructuring implementation costs, a net gain on divestitures and asset sale, a gain related to a legal matter with Nova, a loss on early extinguishment of debt and a loss associated with agreements entered into with DuPont and Corteva as part of the separation and distribution.
+Added: The year ended December 31, 2021 includes costs associated with the Company's digital acceleration program;
+Added: restructuring, implementation costs and asset related charges - net;
+Added: a loss on early extinguishment of debt;
+Added: a gain on a previous divestiture, litigation related charges, awards and adjustments;
+Added: and indemnification and other transaction related costs.
+Added: The year ended December 31, 2020 includes integration and separation costs, restructuring, implementation costs and asset related charges - net, a gain on a warranty accrual adjustment of an exited business, a net gain on divestitures and asset sale, a gain related to a legal matter with Nova, a loss on early extinguishment of debt and a loss associated with agreements entered into with DuPont and Corteva as part of the separation and distribution.
The year ended December 31, 2019 includes integration and separation costs, restructuring, goodwill impairment and asset related charges - net, a gain on a warranty accrual adjustment of an exited business, environmental charges, a loss related to previous divestitures, a loss on early extinguishment of debt, a net gain related to litigation matters and a loss associated with agreements entered into with DuPont and Corteva as part of the separation and distribution.
−Removed: The year ended December 31, 2018 includes a post-closing adjustment related to the Dow Silicones ownership restructure, integration and separation costs, restructuring and asset related charges - net, a gain on divestiture and a loss on early extinguishment of debt.
See Note 26 to the Consolidated Financial Statements for additional information.
+Added: Cash flow conversion for the year ended December 31, 2021 reflects a $1 billion elective pension contribution.
Liquidity & Financial Flexibility
6 unchanged sentences
Cash and committed and available forms of liquidity were $12.6 billion at December 31, 2021.
−Removed: The Company also has no substantive long-term debt maturities until the second half of 2024.
+Added: The Company also has no substantive long-term debt maturities due until 2026.
Additional details on sources of liquidity are as follows:
2 unchanged sentences
and Euromarket commercial paper programs.
−Removed: TDCC had no commercial paper outstanding at December 31, 2020 ($151 million at December 31, 2019).
+Added: TDCC had no commercial paper outstanding at December 31, 2021 and 2020.
TDCC maintains access to the commercial paper market at competitive rates.
4 unchanged sentences
At December 31, 2021, TDCC had total committed and available credit facilities of $8.1 billion.
−Removed: In 2020, Dow Silicones voluntarily repaid $2.0 billion of principal under a certain third party credit agreement.
See Note 15 to the Consolidated Financial Statements for additional information on committed and available credit facilities.
3 unchanged sentences
The Company also maintains a committed accounts receivable facility in Europe where eligible trade accounts receivable, up to €500 million, may be sold at any point in time.
+Added: At December 31, 2021, there were no receivables sold under the U.S.
+Added: and Europe committed accounts receivable facilities.
See Note 14 to the Consolidated Financial Statements for additional information .
2 unchanged sentences
The Company has the ability to monetize its investment in its COLI policies as an additional source of liquidity.
−Removed: At December 31, 2019, the Company had monetized $85 million of its existing COLI policies' value.
−Removed: In the first nine months of 2020, the Company monetized an additional $211 million as a proactive measure to bolster liquidity at the onset of the COVID-19 pandemic.
−Removed: In the fourth quarter of 2020, the Company repaid all existing drawdowns against the cash surrender value, which resulted in no monetization of its existing COLI policies' value at December 31, 2020.
+Added: In the first quarter of 2021, the Company monetized $200 million of its existing COLI policies' surrender value.
+Added: In the second quarter of 2021, the Company repaid the drawdown against the cash surrender value.
+Added: The Company had no outstanding monetization of its existing COLI policies' surrender value at December 31, 2021.
See Note 7 to the Consolidated Financial Statements for additional information.
Uncommitted Credit Facilities
−Removed: Dow has entered into various uncommitted bilateral credit arrangements as a potential source of excess liquidity.
+Added: The Company has entered into various uncommitted bilateral credit arrangements as a potential source of excess liquidity.
These lines can be used to support short-term liquidity needs and for general purposes, including letters of credit.
−Removed: In the first quarter of 2020, the Company took proactive measures to further bolster liquidity by drawing down certain uncommitted credit facilities, which were subsequently repaid in the second quarter of 2020.
+Added: The Company had no drawdowns outstanding at December 31, 2021.
Letters of Credit
1 unchanged sentence
While the terms and amounts of letters of credit change, TDCC generally has approximately $400 million of outstanding letters of credit at any given time.
−Removed: In addition, at December 31, 2020, the Company had a $220 million outstanding letter of credit related to the Company’s share of one future debt service schedule payment of Sadara.
−Removed: See Note 16 to the Consolidated Financial Statements for additional information related to guarantees.
+Added: Early Settlement of Letters of Credit
+Added: The Company utilizes, from time-to-time, letters of credit discounting programs to manage and expedite the settlement of letters of credit in certain regions.
+Added: These letters of credit are associated with accounts receivable and the Company retains no interest in the transferred letters of credit or receivables once sold.
Shelf Registration - U.S.
10 unchanged sentences
Also on July 26, 2019, TDCC filed a new prospectus supplement under this shelf registration to register an unlimited amount of securities for issuance under InterNotes®.
+Added: The shelf registration expires on July 26, 2022.
+Added: The Company expects to renew the shelf registration.
As the Company continues to maintain its strong balance sheet and financial flexibility, management is focused on net debt (a non-GAAP financial measure), as the Company believes this is the best representation of its financial leverage at this point in time.
−Removed: As shown in the following table, net debt is equal to total gross debt minus "Cash and cash equivalents" and "Marketable securities." At December 31, 2020, net debt as a percent of total capitalization for Dow Inc.
+Added: As shown in the following table, net debt is equal to total gross debt minus "Cash and cash equivalents" and "Marketable securities." At December 31, 2021, net debt as a percentage of total capitalization for Dow Inc.
and TDCC decreased to 37.9 percent and 37.5 percent, respectively, compared with 47.9 percent and 46.8 percent, respectively, at December 31, 2020.
7 unchanged sentences
- Marketable securities 1
+Added: 245 45 245 45
Net debt $ 11,439 $ 11,958 $ 11,439 $ 11,958
−Removed: Gross debt as a percent of total capitalization 56.8 % 54.7 % 55.8 % 53.3 %
−Removed: Net debt as a percent of total capitalization 47.9 % 50.9 % 46.8 % 49.6 %
+Added: Total equity $ 18,739 $ 13,005 $ 19,029 $ 13,569
+Added: Gross debt as a percentage of total capitalization 43.9 % 56.8 % 43.5 % 55.8 %
+Added: Net debt as a percentage of total capitalization 37.9 % 47.9 % 37.5 % 46.8 %
Included in "Other current assets" in the consolidated balance sheets.
−Removed: In February 2020, the Company issued €2.25 billion aggregate principal amount of notes (“Euro Notes”).
−Removed: The Euro Notes included €1.0 billion aggregate principal amount of 0.50 percent notes due 2027, €750 million aggregate principal amount of 1.125 percent notes due 2032 and €500 million aggregate principal amount of 1.875 percent notes due 2040.
−Removed: The Euro Notes have a weighted average coupon rate of approximately 1.0 percent.
−Removed: In addition, the Company redeemed $1.25 billion of 3.0 percent notes issued by the Company with maturity in 2022.
−Removed: In August 2020, the Company issued $2.0 billion aggregate principal amount of notes.
−Removed: The notes included $850 million aggregate principal amount of 2.1 percent notes due 2030 and $1.15 billion aggregate principal amount of 3.6 percent notes due 2050 (together, the "Notes").
−Removed: In September 2020, TDCC also used $556 million of aggregate proceeds from the Notes to fund cash tender offers for certain of its debt securities and certain debt securities of Union Carbide, of which $493 million aggregate principal amount was tendered and retired.
+Added: In the second quarter of 2021, the Company redeemed $208 million aggregate principal amount of 3.15 percent notes due May 2024 and $811 million aggregate principal amount of 3.50 percent notes due October 2024.
+Added: In the third quarter of 2021, the Company completed cash tender offers for certain debt securities.
+Added: In total, $1,042 million aggregate principal amount was tendered and retired.
+Added: In addition, the Company voluntarily repaid $81 million of long-term debt due within one year.
The Company may at any time repurchase certain debt securities in the open market or in privately negotiated transactions subject to:
5 unchanged sentences
Management believes TDCC was in compliance with all of its covenants and default provisions at December 31, 2021.
+Added: The Revolving Credit Agreement was extended in November 2021 to include favorable updates to the terms and conditions and matures in November 2026.
On April 1, 2019, DowDuPont completed the separation of its materials science business and Dow Inc.
13 unchanged sentences
Credit Ratings Long-Term Rating Short-Term Rating Outlook
−Removed: Standard & Poor’s BBB- A-3 Stable
+Added: Fitch Ratings BBB+ F2 Stable
Moody’s Investors Service Baa2 P-2 Stable
−Removed: Fitch Ratings BBB+ F2 Negative
−Removed: On April 9, 2020, Standard & Poor's ("S&P") announced a credit rating change for TDCC from BBB and A-2 to BBB- and A-3, maintaining stable outlook.
−Removed: The decision was made as part of S&P’s broader review of the chemicals sector, in light of the global impact of COVID-19 and lower oil prices.
−Removed: On April 13, 2020, Fitch Ratings ("Fitch") re-affirmed TDCC’s BBB+ and F2 rating, and revised its outlook to negative from stable.
+Added: Standard & Poor’s BBB A-2 Stable
+Added: On April 13, 2021, Fitch reaffirmed TDCC’s BBB+ and F2 rating, and revised its outlook to stable from negative.
The decision was made as part of Fitch’s annual review process.
−Removed: Downgrades in TDCC’s credit ratings will increase borrowing costs on certain indentures and could impact its ability to access debt capital markets.
−Removed: The following table provides dividends paid to common stockholders for the years ended December 31, 2020, 2019 and 2018:
+Added: On June 10, 2021, S&P announced a credit rating upgrade for TDCC from BBB- and A-3 to BBB and A-2, maintaining stable outlook.
+Added: The decision from S&P reflects the expectation for an ongoing macroeconomic recovery, the Company’s supportive financial policies and the strengthening of its operating performance in 2021 relative to 2020.
+Added: has paid dividends on a quarterly basis since the separation from DowDuPont and expects to continue to do so, subject to approval by the Board.
+Added: The dividends declared by the Board align to the Company's strategy announced in 2018 of returning approximately 45 percent of operating net income 1 to the shareholders through the dividend and total shareholder remuneration of approximately 65 percent, when including share repurchases, over the economic cycle.
+Added: The following tables provide information on dividends declared and paid to common stockholders:
Dividends Paid for the Years Ended Dec 31 2021 2020 2019 1
In millions, except per share amounts
−Removed: Dividends paid, per common share $ 2.80 $ 2.10 N/A
−Removed: Dividends paid to common stockholders $ 2,071 $ 1,550 N/A
+Added: Dividends paid, per common share $ 2.80 $ 2.80 $ 2.10
+Added: Dividends paid to common stockholders $ 2,073 $ 2,071 $ 1,550
Reflects Dow Inc.
activity subsequent to the separation from DowDuPont.
−Removed: In 2018, the common stock of Dow Inc.
−Removed: and TDCC was owned solely by DowDuPont and therefore the Company did not have publicly traded stock.
+Added: Cash Dividends Declared and Paid
+Added: Declaration Date Record Date Payment Date Amount (per share)
+Added: February 11, 2021 February 26, 2021 March 12, 2021 $ 0.70
+Added: April 15, 2021 May 28, 2021 June 11, 2021 $ 0.70
+Added: August 12, 2021 August 31, 2021 September 10, 2021 $ 0.70
+Added: October 14, 2021 November 30, 2021 December 10, 2021 $ 0.70
+Added: Operating net income is a non-GAAP measure that Dow defines as "Net income (loss) available for Dow Inc.
+Added: common stockholders," excluding the impact of significant items.
Effective with the Merger, TDCC no longer has publicly traded common stock.
1 unchanged sentence
Pursuant to the Merger Agreement, TDCC committed to fund a portion of DowDuPont's dividends paid to common stockholders and certain governance expenses.
−Removed: In addition, share repurchases by DowDuPont were partially funded by TDCC through 2018.
Funding was accomplished through intercompany loans.
−Removed: On a quarterly basis, TDCC's Board reviewed and determined a
−Removed: dividend distribution to DowDuPont to settle the intercompany loans.
+Added: On a quarterly basis, TDCC's Board reviewed and determined a dividend distribution to DowDuPont to settle the intercompany loans.
The dividend distribution considered the level of TDCC’s earnings and cash flows and the outstanding intercompany loan balances.
−Removed: TDCC declared and paid dividends to DowDuPont of $535 million for the year ended December 31, 2019 and $3,711 million for the year ended December 31, 2018.
+Added: TDCC declared and paid dividends to DowDuPont of $535 million for the year ended December 31, 2019.
See Note 25 to the Consolidated Financial Statements for additional information.
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For the year ended December 31, 2021, TDCC declared and paid dividends to Dow Inc.
−Removed: of $2,233 million ($201 million for the year ended December 31, 2019).
+Added: of $3,264 million ($2,233 million for the year ended December 31, 2020 and $201 million for the year ended December 31, 2019).
At December 31, 2021, TDCC's intercompany loan balance with Dow Inc.
4 unchanged sentences
In 2021, Dow Inc.
−Removed: repurchased $125 million of the Company's common stock.
+Added: repurchased $1.0 billion of the Company's common stock.
At December 31, 2021, approximately $1.4 billion of the share repurchase program authorization remained available for repurchases.
−Removed: The Company will continue to evaluate the repurchase of additional shares to cover dilution as economic conditions develop.
+Added: As previously announced, the Company intends to, at a minimum, repurchase shares to cover dilution.
+Added: The Company may expand share repurchases beyond dilution as favorable economic conditions develop.
+Added: Any share repurchases, when coupled with the Company's dividends, is intended to implement the long-term strategy of ensuring shareholder remuneration is approximately 65 percent over the economic cycle.
Pension Plans
The Company has both funded and unfunded defined benefit pension plans that cover employees in the United States and a number of other countries.
−Removed: As a result of the Company’s separation from DowDuPont, the number of significant defined benefit pension plans administered by the Company decreased from 45 plans to 35 plans, with approximately $270 million of net unfunded pension liabilities transferred to DowDuPont.
−Removed: Plans administered by other subsidiaries of DowDuPont that were transferred to the Company were not significant.
−Removed: There were no changes in the number of significant other postretirement benefit plans administered by the Company as a result of the separation.
−Removed: Existing Company plans that were significantly impacted by the transfer of active plan participants to DowDuPont were remeasured, resulting in curtailment gains and losses and recognition of special termination benefits.
In 2021, 2020 and 2019, the Company contributed $1,219 million, $299 million and $261 million to its continuing operations pension plans respectively, including contributions to fund benefit payments for its non-qualified pension plans ($1,219 million, $299 million and $266 million, including contributions to plans of discontinued operations).
−Removed: In the third quarter of 2018, the Company made a $1,100 million discretionary contribution to its principal U.S.
−Removed: pension plan, which is included in the 2018 contribution amount above.
−Removed: The discretionary contribution was primarily based on the Company's funding policy, which permits contributions to defined benefit pension plans when economics encourage funding, and reflected considerations relating to tax deductibility and capital structure.
+Added: In the first quarter of 2021, the Company elected to contribute $1 billion to its U.S.
+Added: tax-qualified pension plans, which is included in the 2021 contribution amount above.
+Added: This contribution was based on the Company's funding policy, which is to contribute to defined benefit pension plans when pension laws and/or economics either require or encourage funding.
The Company expects to contribute approximately $180 million to its pension plans in 2022.
+Added: On March 4, 2021, the Company announced changes to the design of its U.S.
+Added: tax-qualified and non-qualified pension plans (collectively, the "U.S.
+Added: Plans") and, effective December 31, 2023, the Company will freeze the pensionable compensation and credited service amounts used to calculate pension benefits for employees who participate in the U.S.
See Note 20 to the Consolidated Financial Statements for additional information concerning the Company’s pension plans.
−Removed: Restructuring Programs
−Removed: The actions related to the 2020 Restructuring Program are expected to result in additional cash expenditures of approximately $365 million, primarily through the first quarter of 2022, consisting of severance and related benefit costs and costs associated with exit and disposal activities, including contract cancellation penalties and environmental remediation.
+Added: Restructuring
+Added: The actions related to the 2020 Restructuring Program are expected to result in additional cash expenditures of $168 million, primarily through the third quarter of 2022, consisting of severance and related benefit costs and costs associated with exit and disposal activities, including contract cancellation penalties and environmental remediation.
Restructuring implementation costs, primarily decommissioning and demolition activities related to asset actions, are expected to result in additional cash expenditures of approximately $50 million, primarily through the third quarter of 2022.
−Removed: The activities related to the Synergy Program are expected to result in additional cash payments of approximately $35 million, primarily through the second quarter of 2021, consisting of severance and related benefit costs and costs associated with exit and disposal activities, including environmental remediation.
+Added: Restructuring implementation costs totaled $63 million in 2021.
The Company expects to incur additional costs in the future related to its restructuring activities, which will be recognized as incurred.
The Company also expects to incur additional employee-related costs, including involuntary termination benefits related to its other optimization activities.
−Removed: These costs cannot be reasonably estimated at this
+Added: These costs cannot be reasonably estimated at this time.
See Note 6 to the Consolidated Financial Statements for additional information on the Company's restructuring activities.
Digital Acceleration
−Removed: On January 28, 2021, Dow announced plans for Digital Acceleration:
+Added: In the first quarter of 2021, Dow announced plans to further advance and expand its digitalization efforts to deliver long-term value creation, by accelerating investment in three key areas:
expanding digital tools to accelerate materials science innovation;
1 unchanged sentence
and adopting real-time digital manufacturing insights, operational data intelligence and demand sensing to enhance the productivity and reliability of Dow’s operations.
+Added: The Company expects more than $300 million in incremental annual run rate Operating EBITDA generation by the end of 2025 related to digital acceleration, with an additional one-time $100 million in structural working capital efficiency gains, driven in part by enhanced planning from digital tools.
The activities related to digital acceleration are expected to result in additional cash expenditures of approximately $250 million, primarily through the end of 2022.
−Removed: Integration and Separation Costs
−Removed: Integration and separation costs, which reflect costs related to post-Merger integration and business separation activities and costs related to the ownership restructure of Dow Silicones, were $239 million in 2020, $1,063 million and $1,039 million for Dow Inc.
−Removed: and TDCC, respectively, in 2019 and $1,179 million in 2018.
−Removed: Integration and separation costs related to post-Merger integration and business separation activities were completed as of December 31, 2020.
+Added: Digital acceleration expenses totaled $169 million in 2021.
Contractual Obligations
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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.
−Removed: The table also excludes deferred revenue and negative investment balances related to equity method investments as these items do not represent future cash requirements arising from contractual payment obligations.
+Added: The table also excludes deferred revenue as it does not represent future cash requirements arising from contractual payment obligations.
The Company expects to meet its contractual obligations through its normal sources of liquidity and believes it has the financial resources to satisfy these contractual obligations.
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Guarantees arise during the ordinary course of business from relationships with customers, committed accounts receivable facilities and nonconsolidated affiliates when the Company undertakes an obligation to guarantee the performance of others if specific triggering events occur.
−Removed: The Company had outstanding guarantees at December 31, 2020 of $251 million, compared with $3,952 million at December 31, 2019.
−Removed: In the fourth quarter of 2020, the remaining project completion conditions related to the Sadara project finance guarantees were fulfilled.
Additional information related to guarantees can be found in the “Guarantees” section of Note 16 to the Consolidated Financial Statements.
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At December 31, 2021, the Company had accrued obligations of $1,220 million for probable environmental remediation and restoration costs, including $237 million for the remediation of Superfund sites.
−Removed: This is management’s best estimate of the costs for remediation and restoration with respect to environmental matters for which the Company has accrued liabilities, although it is reasonably possible that the ultimate cost with respect to these particular matters could range up to approximately one and a half times that amount.
+Added: This is management’s best estimate of the costs for remediation and restoration with respect to environmental matters for which the Company has accrued liabilities, although it is reasonably possible that the ultimate cost with respect to these particular matters could range up to approximately two times that amount.
For further discussion, see Environmental Matters in Management’s Discussion and Analysis of Financial Condition and Results of Operations and Notes 1 and 16 to the Consolidated Financial Statements.
10 unchanged sentences
Qualitative factors assessed at the reporting unit level include, but are not limited to, changes in industry and market structure, competitive environments, planned capacity and new product launches, cost factors such as raw material prices, and financial performance of the reporting unit.
−Removed: If the Company chooses not to complete a qualitative assessment for a given reporting unit or if the initial assessment indicates that it is more likely than not that the estimated fair value of a reporting unit is less than its carrying value, additional quantitative testing is required.
+Added: If the Company chooses not to complete qualitative testing for a given reporting unit or if the initial assessment indicates that it is more likely than not that the estimated fair value of a reporting unit is less than its carrying value, additional quantitative testing is required.
Quantitative testing requires the fair value of the reporting unit to be compared with its carrying value.
10 unchanged sentences
In the fourth quarter of 2021, qualitative testing was performed for all reporting units carrying goodwill.
−Removed: Based on the results of the qualitative testing, quantitative testing was performed on one reporting unit.
−Removed: For the qualitative assessments, management considered factors at both the Company level and the reporting unit level.
−Removed: Based on the qualitative assessments for the reporting units, management concluded it is not more likely than not that the fair value of the reporting unit is less than the carrying value of the reporting unit.
−Removed: For the quantitative testing, the fair value exceeded the carrying value of the reporting unit.
+Added: Based on the results of the qualitative testing, the Company did not perform quantitative testing on any reporting units.
+Added: For the qualitative testing, management considered factors at both the Company level and the reporting unit level.
+Added: Based on the qualitative testing for the reporting units, management concluded it is not more likely than not that the fair value of the reporting unit is less than the carrying value of the reporting unit.
Pension and Other Postretirement Benefits
19 unchanged sentences
The discount rates utilized to measure the pension and other postretirement obligations of the U.S.
−Removed: qualified plans are based on the yield on high-quality corporate fixed income investments at the measurement date.
+Added: plans are based on the yield on high-quality corporate fixed income investments at the measurement date.
Future expected actuarially determined cash flows for the Company’s U.S.
1 unchanged sentence
RATE:Link 60-90 corporate yield curve (based on 60th to 90th percentile high-quality corporate bond yields) to arrive at the plan’s obligations as of the measurement date.
−Removed: The weighted average discount rate utilized to measure pension obligations decreased to 2.71 percent at December 31, 2020, from 3.41 percent at December 31, 2019.
+Added: The weighted average discount rate utilized to measure pension obligations increased to 3.04 percent at December 31, 2021, from 2.71 percent at December 31, 2020.
At December 31, 2021, the U.S.
−Removed: qualified plans were underfunded on a projected benefit obligation basis by $5,873 million.
−Removed: The underfunded amount increased $1,105 million compared with December 31, 2019.
−Removed: The increase in the underfunded amount in 2020 was primarily due to the impact of lower discount rates, which was partially offset by overall favorable asset returns.
−Removed: The Company did not make contributions to the U.S.
−Removed: qualified plans in 2020.
−Removed: The assumption for the long-term rate for the compensation levels for the U.S.
−Removed: qualified plans was unchanged.
+Added: tax-qualified plans were underfunded on a projected benefit obligation basis by $2,585 million.
+Added: The underfunded amount decreased $3,288 million compared with December 31, 2020.
+Added: The decrease in the underfunded amount in 2021 was primarily due to the impact of higher discount rates, overall favorable asset returns, a $1 billion contribution to the U.S.
+Added: tax-qualified pension plans, and plan design changes.
+Added: The assumption for the long-term rate for compensation levels for the U.S.
+Added: tax-qualified plans was unchanged.
The Company uses a generational mortality table to determine the duration of its pension and other postretirement obligations.
10 unchanged sentences
Total $ 1,628
−Removed: At December 31, 2020, the Company expects pension expense to decrease in 2021 by approximately $25 million.
−Removed: The decrease in pension expense is primarily due to the lower interest cost component.
+Added: Exclusive of one-time curtailment gains recognized in 2021, the Company expects pension expense to decrease in 2022 by approximately $25 million.
+Added: The decrease is driven by a reduction in the amortization of actuarial losses.
A 25 basis point increase or decrease in the long-term return on assets assumption would change the Company’s total pension expense for 2022 by $62 million.
−Removed: A 25 basis point increase in the discount rate assumption would lower the Company's total pension expense for 2021 by $55 million.
+Added: A 25 basis point increase in the discount rate assumption would decrease the Company's total pension expense for 2022 by $53 million.
A 25 basis point decrease in the discount rate assumption would increase the Company's total pension expense for 2022 by $55 million.
5 unchanged sentences
At December 31, 2021, the Company had deferred tax assets for tax loss and tax credit carryforwards of $1,784 million, $864 million of which is subject to expiration in the years 2022 through 2026.
−Removed: In order to realize these deferred tax assets for tax loss and tax credit carryforwards, the Company needs taxable income of approximately $27,331 million across multiple jurisdictions.
−Removed: The taxable income needed to realize the deferred tax assets for tax loss and tax credit carryforwards that are subject to expiration from 2021 through 2025 is approximately $6,405 million.
+Added: In order to realize the deferred tax assets for operating tax loss and tax credit carryforwards, the Company needs taxable income of approximately $25,034 million across multiple jurisdictions.
+Added: The taxable income needed to realize the deferred tax assets for operating tax loss and tax credit carryforwards that are subject to expiration from 2022 through 2026 is approximately $14,748 million.
+Added: The Company files tax returns in multiple jurisdictions and is subject to examination by taxing authorities throughout the world.
+Added: Tax authorities have the ability to review and challenge matters that could be subject to differing interpretation of applicable tax laws and regulations as they relate to the amount, character, timing or inclusion of revenue and expenses or the sustainability of tax attributes.
+Added: The ultimate resolution of such uncertainties could last
+Added: several years.
+Added: When an uncertain tax position is identified, the Company considers and interprets complex tax laws and regulations in order to determine the need for recognizing a provision in its financial statements.
+Added: Significant judgment is required in determining the timing and measurement of uncertain tax positions.
+Added: The Company utilizes internal and external expertise in interpreting tax laws to support the Company's tax positions.
The Company recognizes the financial statement effects of an uncertain income tax position when it is more likely than not, based on technical merits, that the position will be sustained upon examination.
−Removed: At December 31, 2020, the Company had uncertain tax positions for both domestic and foreign issues of $373 million.
−Removed: The Company accrues for non-income tax contingencies when it is probable that a liability to a taxing authority has been incurred and the amount of the contingency can be reasonably estimated.
−Removed: At December 31, 2020, the Company had a non-income tax contingency reserve for both domestic and foreign issues of $33 million.
−Removed: Indemnification Assets and Liabilities
−Removed: In connection with the 2019 separation from DowDuPont and the 2016 ownership restructure of Dow Silicones, Dow entered into agreements that established each party’s indemnification obligations for certain tax, environmental, litigation and other matters, subject to certain conditions and limits.
−Removed: The Company records indemnification assets when collection is deemed probable and engages with indemnifying parties and assesses publicly available information to evaluate collectability.
−Removed: The underlying tax, environmental, litigation and other liabilities for which the Company claims indemnification are subject to significant judgment and potential disputes could adversely impact collectability.
−Removed: The Company assesses the collectability of indemnification assets when events or changes in circumstances indicate the carrying values may not be recoverable.
−Removed: At December 31, 2020, indemnification assets were $225 million and $115 million for Dow Inc.
−Removed: and TDCC, respectively ($210 million and $100 million for Dow Inc.
−Removed: and TDCC respectively at December 31, 2019).
−Removed: The Company records indemnification liabilities when it is probable that a liability has been incurred and the amount can be reasonably estimated.
−Removed: At December 31, 2020, indemnification liabilities related to the agreements were $657 million for Dow Inc.
−Removed: and zero for TDCC ($848 million for Dow Inc.
−Removed: and zero for TDCC at December 31, 2019).
−Removed: This represents management’s best estimate of the Company’s obligations under the agreements, although it is reasonably possible that future events could cause the actual values to be higher or lower than those projected or those recorded.
−Removed: For further discussion, see Notes 3 and 16 to the Consolidated Financial Statements.
+Added: At December 31, 2021, the Company had uncertain tax positions for both domestic and foreign issues of $580 million and $502 million for interest and penalties.
Environmental Matters
4 unchanged sentences
To ensure effective utilization, the EMS is integrated into a company-wide management system for EH&S, Operations, Quality and Human Resources.
−Removed: It is the Company's policy to adhere to a waste management hierarchy that minimizes the impact of wastes and emissions on the environment.
−Removed: First, work to eliminate or minimize the generation of waste and emissions at the source through research, process design, plant operations and maintenance.
−Removed: Second, find ways to reuse and recycle materials.
−Removed: Finally, unusable or non-recyclable hazardous waste is treated before disposal to eliminate or reduce the hazardous nature and volume of the waste.
−Removed: Treatment may include destruction by chemical, physical, biological or thermal means.
−Removed: Disposal of waste materials in landfills is considered only after all other options have been thoroughly evaluated.
−Removed: The Company has specific requirements for waste that is transferred to non-Dow facilities, including the periodic auditing of these facilities.
The Company believes third-party verification and transparent public reporting are cornerstones of world-class EH&S performance and building public trust.
2 unchanged sentences
The Company continues to be a global champion of Responsible Care® and has worked to broaden the application and impact of Responsible Care® around the world through engagement with suppliers, customers and joint venture partners.
−Removed: The Company’s EH&S policies helped to achieve health and safety performance targets in 2020.
−Removed: The Company’s safety continued to improve in 2020 based on process and personal safety project implementations.
−Removed: Improvement in these areas, as well as environmental compliance, remains a top management priority, with initiatives underway to further improve performance and compliance in 2021 as the Company continues to implement the 2025 Sustainability Goals and new, progressive, multi-decade sustainability targets around advancing a circular economy and climate protection.
+Added: Dow's EH&S policies help to ensure the Company achieves its annual health and safety performance targets and the Company seeks to continuously improve on these targets through process and personal safety project implementations.
+Added: Improvement in these areas, as well as environmental compliance, remains a top management priority, as the Company continues to implement its 2025 Sustainability Goals and progressive, multi-decade sustainability targets announced in 2020 that include advancing a circular economy and climate protection.
+Added: Progress is reviewed regularly by management and with the Environment, Health, Safety & Technology Committee of the Board.
Detailed information on Dow’s performance regarding environmental matters and goals is accessible through the Company's Science & Sustainability webpage at www.dow.com/sustainability .
−Removed: The website and its content are not deemed incorporated by reference into this report.
+Added: Dow's website and its content are not deemed incorporated by reference into this report.
Chemical Security
13 unchanged sentences
This plan, which has been activated in response to significant world and national events, is reviewed on an annual basis.
−Removed: The Company continues to improve its security plans, placing emphasis on the safety of Dow communities and people by being prepared to meet risks at any level and to address both internal and external identifiable risks.
+Added: The Company continues to improve its security plans, placing emphasis on the safety of Dow communities and people by being prepared to meet risks at any level and to
+Added: address both internal and external identifiable risks.
The security plan includes regular vulnerability assessments, security audits, mitigation efforts and physical security upgrades designed to reduce vulnerability.
12 unchanged sentences
To reduce vulnerabilities, the Company maintains security measures that meet or exceed regulatory and industry security standards in all areas in which they operate.
−Removed: The Company's initiatives relative to chemical security, emergency preparedness and response, Community Awareness and Emergency Responses and crisis management are implemented consistently at all Dow sites on a global basis.
+Added: The Company's initiatives relative to chemical security, emergency preparedness and response, Community Awareness and Emergency Response and crisis management are implemented consistently at all Dow sites on a global basis.
+Added: Each Dow site has established outreach programs designed to engage community stakeholders with objectives centered around awareness of Dow operations, products, and efforts to protect worker and community health and the environment.
+Added: These programs also educate community members on emergency planning and response, emissions and waste, future site plans to reduce waste and emissions, and process safety systems.
+Added: Finally, these outreach efforts establish an opportunity for Dow site leaders to hear about community stakeholder expectations and address questions and concerns about safety, health, environmental or other issues.
The Company participates with chemical associations globally and participates as an active member of the U.S.
−Removed: delegation to the G7 Global Partnership Sub-Working Group on Chemical Security.
+Added: delegation to the G7 Global Partnership Sub-Working Group on Chemical Security and in positions of leadership in the U.S.
+Added: Chemical Sector Coordinating Council.
Climate Change
1 unchanged sentence
Transition Risks
−Removed: Transition Risks include carbon pricing mechanisms, transition to lower emissions technology, increased cost of raw materials, and mandates on and regulation of existing products and services.
−Removed: Carbon pricing is a market-based strategy for lowering global warming emissions by putting a monetary value on carbon emissions, allowing for the costs of climate impacts and opportunities for low-carbon energy options to be reflected in production and consumption choices.
−Removed: Approximately 35 percent of Dow’s carbon emissions are generated from operations in Canada and the European Union (“EU”) where carbon pricing is already in place.
−Removed: As part of the European Green Deal, the European Commission proposed a 2030 greenhouse gas (“GHG”) emissions reduction target of at least 55 percent below 1990 levels, with a goal for the EU to be carbon neutral by 2050.
+Added: Transition Risks include carbon pricing mechanisms, transition to lower greenhouse gas emissions technology, increased cost of raw materials, and mandates on and regulation of existing products and services.
+Added: Carbon pricing is a market-based strategy to address climate change by putting a monetary value on greenhouse gas emissions, allowing for the costs of climate impacts and opportunities for low-carbon energy options to be reflected in production and consumption choices.
+Added: Approximately 35 percent of Dow’s Scope 1 and 2 greenhouse gas emissions are generated from operations in Canada and the European Union (“EU”) where carbon pricing is already in place.
+Added: As part of the European Green Deal, the European Commission proposed a 2030 greenhouse gas emissions reduction target of at least 55 percent below 1990 levels, with a goal for the EU to be carbon neutral by 2050.
In China, an emissions trading system, initially proposed to cover the power sector only, is expected to gradually expand to cover a total of eight sectors, including the petrochemical and chemical industries, though no specific timeline for implementation and expansion has been outlined.
These carbon pricing mechanisms will not only increase Dow’s direct costs to operate but will also result in increased energy costs.
−Removed: Dow mitigates the direct cost impact of existing regulation through research and development projects designed to increase energy efficiency, and capital investment projects that will reduce the Company’s energy usage and carbon footprint.
+Added: Dow mitigates the direct cost impact of existing regulation through research and
+Added: development projects designed to increase energy efficiency, and capital investment projects that will reduce the Company’s energy usage and carbon footprint.
The Company is also exploring options for carbon capture, utilization and storage (“CCUS”) and electrification of Dow’s processes.
−Removed: Dow sees CCUS as a mechanism to help bridge the time period between the onset of increased carbon regulation and the technology available to economically reduce Dow’s GHG emissions.
+Added: Dow sees CCUS as a mechanism to help bridge the time period between the onset of increased carbon regulation and the technology available to economically reduce Dow’s greenhouse gas emissions.
Dow also incorporates a theoretical internal carbon price into its business planning and risk management strategies.
9 unchanged sentences
These measures have historically been in place and these activities and associated costs are driven by normal operational preparedness.
−Removed: In 2019, the most recent period for which data is available, the Company’s greenhouse gas intensity was down approximately 3 percent from 2018 and by a total of approximately 13 percent since the baseline year of 2006.
−Removed: In addition, the Company is on track to meet its target of purchasing 750 megawatts of renewable power by 2025.
−Removed: The Company continues progress toward its defined 2025 Sustainability Goals and is taking further action to lessen its carbon impact moving forward.
−Removed: In June 2020, the Company announced a new, multi-decade carbon target to reduce its net annual carbon emission by 5 million metric tons compared with its 2020 baseline, a reduction of approximately 15 percent, and an intention to be carbon neutral (Scopes 1+2+3, as defined by the Greenhouse Gas Protocol, plus product benefits) by 2050.
−Removed: Dow’s action plan to achieve carbon neutrality by 2050 includes:
+Added: Climate Action
+Added: The transition to a low-carbon economy remains one of society's fundamental challenges.
+Added: The Company continues to progress toward its defined 2025 Sustainability Goals, which are the foundation of Dow's efforts to help lead the transition to a sustainable planet and society, and is taking further action to lessen its carbon impact moving forward.
+Added: In 2020, the Company announced a new, multi-decade target to reduce its net annual greenhouse gas emissions by 5 million metric tons by 2030, compared with its 2020 baseline, a reduction of approximately 15 percent, and announced its intention to be carbon neutral by 2050 (Scopes 1+2+3, as defined by the Greenhouse Gas Protocol, plus product benefits).
+Added: To achieve the 2030 carbon reduction target, Dow developed a climate protection action plan which includes the following elements:
• Optimizing energy efficiency of facilities and processes
2 unchanged sentences
• Developing low-carbon technologies for emission reductions
−Removed: • Deploying materials to enable emissions reductions for customers and industries
−Removed: The Company intends to meet its commitment to implement the recommendations of the Task Force on Climate-related Financial Disclosures ("TCFD") over the next two years.
−Removed: Disclosures aligned with TCFD recommendations will be included in the Company’s annual Sustainability Report.
+Added: • Deploying materials to enable greenhouse gas emissions reductions for customers and industries
+Added: The action plan has resulted in new and expanded renewable power purchase agreements.
+Added: In 2020, Dow increased its existing access to renewable power by more than 50 percent, to over 800 megawatts of renewable power, exceeding its 2025 Sustainability Goal target of 750 megawatts.
+Added: The Company also initiated a joint development agreement with Shell to develop electrified cracking technology, powered by clean energy.
+Added: In 2021, Dow announced additional renewable and cleaner power agreements that increase Dow's access to over 850 megawatts of renewable power and are expected to reduce Scope 2 emissions by more than 600,000 metric tons of carbon dioxide equivalent per year.
+Added: Dow also announced a plan to build the world’s first net-zero carbon emissions (with respect to Scope 1 and 2 carbon dioxide emissions, including technology advancements) site in Alberta, Canada, which will decarbonize 20 percent of Dow’s global ethylene capacity while growing polyethylene supply, with expected completion by 2030.
+Added: At Dow's largest European manufacturing site in Terneuzen, The Netherlands, the Company has outlined a multi-generational plan to reduce current carbon emissions at the site by more than 40 percent by 2030, as part of the Company's goal to reduce Company-wide carbon emissions an additional 15 percent by 2030, and to be carbon neutral by 2050.
+Added: Other steps the Company will take to achieve its 2030 greenhouse gas emissions reduction target include:
+Added: procuring more renewable energy at multiple sites, modernizing Louisiana Operations energy assets, completing U.S.
+Added: Gulf Coast flare recovery projects and advancing silicones feedstock capabilities in Brazil.
+Added: The Company expects to allocate approximately $1 billion of capital expenditures annually to decarbonize its global asset base in a phased, site-by-site approach while driving growth.
+Added: The Task Force on Climate-related Financial Disclosures (“TCFD”) has developed a framework to help organizations more effectively disclose climate-related risks and opportunities through existing reporting processes.
+Added: Dow’s 2020 ESG Report includes disclosures aligned to the TCFD framework, which includes four core pillars:
+Added: governance, strategy, risk management, and metrics and targets.
+Added: The Company intends to meet its commitment to fully implement the recommendations of the TCFD as part of the Company’s 2021 ESG Report, to be published in 2022.
+Added: Advancing a Circular Economy
+Added: Transitioning to a circular economy is vital to both preserving and protecting Earth’s natural resources and to the success of Dow's businesses.
+Added: To help advance a circular economy, Dow invests in new product technology, value chain partnerships, business models and waste management infrastructure to discover and scale sustainable solutions that extend the useful life of materials and the resources that are used to make them.
+Added: In 2020, Dow announced "stop the waste" and "close the loop" goals to address plastic waste.
+Added: Dow's “stop the waste” goal is the Company's commitment to invest and/or collaborate in key technologies and infrastructure to significantly increase global recycling.
+Added: As part of this goal, Dow intends to enable 1 million metric tons of plastic to be collected, reused or recycled through direct actions and partnerships by 2030.
+Added: Dow will further "stop the waste" through application development, where more recycled plastics can be incorporated into key applications;
+Added: through critical partnerships such as Circulate Capital and the Alliance to End Plastic Waste;
+Added: and through incorporating waste into advanced recycling technologies.
+Added: Dow continues to look for market applications for recycled plastics to keep plastic out of landfills.
+Added: One way to help stop the flow of this waste is to use recycled polymer modified asphalt for roads, parking lots, and other pavement.
+Added: Polymer modified asphalt ("PMA") is a proven solution for making better pavement.
+Added: Dow's ELVALOY™ Reactive Elastomeric Terpolymer products have been enhancing PMAs for more than 30 years, resulting in excellent performance, long service life, and lower life cycle costs compared to conventional, neat asphalt.
+Added: Dow's “close the loop” goal is the Company's commitment to work directly with its customers, brand owners and the value chain to help customers redesign and promote reusable or recyclable packaging applications where there is a clear environmental benefit and enable 100 percent of Dow products sold into packaging applications to be reusable or recyclable by 2035.
+Added: Today, Dow enables approximately 80 percent of its products sold into packaging applications to be reusable or recyclable and continues to pursue application development, packaging redesign and infrastructure improvements to deliver on the Company's 100 percent commitment.
+Added: As one of the world’s largest producers of plastic, Dow wants to put an end to plastic waste.
+Added: Eliminating plastic waste is about more than just recycling and reusing.
+Added: It is about creating innovative solutions that are sustainable and investing in the circular economy through recyclability and efficiency for plastic packaging.
+Added: Dow aims to keep plastic waste out of the environment and retain its value as a resource by increasing impact through partnerships and delivering circular economy solutions.
Environmental Remediation
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In total, the Company’s accrued liability for probable environmental remediation and restoration costs was $1,220 million at December 31, 2021, compared with $1,244 million at December 31, 2020.
−Removed: This is management’s best estimate of the costs for remediation and restoration with respect to environmental matters for which the Company has accrued liabilities, although it is reasonably possible that the ultimate cost with respect to these particular matters could range up to approximately one and a half times that amount.
+Added: This is management’s best estimate of the costs for remediation and restoration with respect to environmental matters for which the Company has accrued liabilities, although it is reasonably possible that the ultimate cost with respect to these particular matters could range up to approximately two times that amount.
Consequently, it is reasonably possible that environmental remediation and restoration costs in excess of amounts accrued could have a material impact on the Company’s results of operations, financial condition and cash flows.
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.