7 unchanged sentences
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 4, 2022, expressed an unqualified opinion on the Company's internal control over financial reporting.
−Removed: Changes in Accounting Principles
−Removed: As discussed in Note 1 to the financial statements, in the first quarter of 2019, the Company changed its method of accounting for leases due to the adoption of Accounting Standards Codification (ASC) Topic 842, Leases .
Basis for Opinion
1 unchanged sentence
Our responsibility is to express an opinion on the Company's financial statements based on our audits.
−Removed: We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.
+Added: We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.
federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
6 unchanged sentences
Critical Audit Matters
−Removed: The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.
+Added: The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.
The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.
−Removed: Goodwill – Annual Impairment Assessment – Refer to Note 1 and Note 13 to the financial statements
+Added: Uncertain Tax Positions — Refer to Notes 1 and 8 to the financial statements
Critical Audit Matter Description
−Removed: The Company tests goodwill for impairment annually (in the fourth quarter), or more frequently when events or changes in circumstances indicate it is more likely than not that the fair value of a reporting unit has declined below its carrying value.
−Removed: The Company utilizes a discounted cash flow methodology to calculate the fair value of its reporting units, which requires management to make significant estimates and assumptions related to projected revenue growth rates, discount rates, and earnings before interest, taxes, depreciation and amortization (“EBITDA”).
−Removed: Changes in these assumptions could have a significant impact on the fair value of the reporting unit and the amount of any goodwill impairment charge.
−Removed: As of December 31, 2020, the Company has six reporting units, all but one of which have goodwill.
−Removed: Throughout 2020, the Coronavirus (COVID-19) has had substantial negative impact on the results of the Company’s operations and financial performance of its reporting units.
−Removed: With unprecedented volatility in global financial and commodities markets, the Company’s reporting units experienced decreased demand in certain end-customer markets, changes in supply and demand fundamentals, and margin compression caused by lowering of global energy prices.
−Removed: Given the uncertainty as to the ultimate severity and duration of the COVID-19 pandemic, the volatility in the value of Company’s shares, and uneven course of economic recovery, leading up to its annual goodwill impairment test in the fourth quarter the Company continuously monitored the impact of the pandemic on its reporting units to determine if it was more likely than not that the fair value was less than the carrying value for any of its reporting units.
−Removed: Based on the results of qualitative assessments completed as part of the annual impairment test for all reporting units, the Company moved to performing a quantitative test for one reporting unit.
−Removed: The discounted cash flows of this reporting unit supported a fair value in excess of the carrying value and as such no goodwill impairment charges were recorded.
−Removed: Given the significant judgments made by management to estimate the fair value of the reporting unit, performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions related to projected revenue growth rates, discount rates, EBITDA and EBITDA margin required a high degree of auditor judgment and an increased extent of effort, including the assistance of our fair value specialists.
+Added: The Company has a complex legal structure involving numerous domestic and foreign locations with constantly changing tax laws, regulations, and legal interpretations.
+Added: The Company’s management is required to interpret and apply these tax laws and regulations in determining the amount of its income tax liability and provision.
+Added: When an uncertain tax position is identified by management, the Company must evaluate if it is more likely than not, based on the technical merits, that the uncertain tax position will be sustained upon examination.
+Added: The Company recognizes a benefit for tax positions using the highest cumulative tax benefit that is more likely than not to be realized.
+Added: The Company establishes a liability for unrecognized tax benefits that do not meet this threshold.
+Added: evaluation of each uncertain tax position requires management to apply specialized skill, knowledge, and significant judgment related to the identified position.
+Added: The Company’s liability for unrecognized tax benefits and related accrued interest and penalties as of December 31, 2021 was $580 million and $502 million, respectively.
+Added: Because of the complexity of tax laws, regulations and legal interpretations relevant to numerous taxing jurisdictions in which the Company operates, auditing uncertain tax positions and the determination of whether the more likely than not threshold was met requires a high degree of auditor judgment and increased extent of effort, including the involvement of our income tax specialists.
How the Critical Audit Matter Was Addressed in the Audit
−Removed: Our audit procedures related to management’s estimates and assumptions related to projected revenue growth rates, discount rates, EBITDA and EBITDA margin for the reporting unit subject to the quantitative test included the following, among other procedures:
−Removed: • With the assistance of our fair value specialists, we tested the effectiveness of internal controls over the goodwill impairment evaluation, including controls over the selection of the discount rates and over forecasts of future revenue growth rates, EBITDA, and EBITDA margin.
−Removed: • We performed a retrospective review comparing actual revenue and EBITDA results of the reporting unit for 2020 to the forecasted results from 2019.
−Removed: • We performed a retrospective review comparing management’s estimates and assumptions relating to revenue, EBITDA, and EBITDA margin projections for the reporting unit used for the purpose of current year’s annual impairment test to the projections previously used in connection with the prior year annual impairment test.
−Removed: • We evaluated the consistency of estimates and assumptions relating to revenue and EBITDA growth inherent in the discounted cash flow model for the reporting unit to those used by management in other annual forecasting activities.
−Removed: • With the assistance of our fair value specialists, we performed a benchmarking exercise comparing management’s estimates and assumptions related to revenue growth, EBITDA and EBITDA margin for the reporting unit as of the measurement date to the revenue growth, EBITDA and EBITDA margins of a peer group of public companies for the most recent three years and the projection period.
−Removed: • With the assistance of our fair value specialists, we evaluated (1) the valuation methodology used and (2) the projections of long-term revenue growth and the discount rates by testing the underlying source information, and by developing a range of independent estimates and comparing those to the rates selected by management.
+Added: Our audit procedures related to uncertain tax positions included the following, among others:
+Added: • We tested the effectiveness of internal controls over income taxes, including those over identifying uncertain tax positions and measuring liabilities.
+Added: • We evaluated, with the assistance of our income tax specialists, the Company’s uncertain tax positions by performing the following:
+Added: – Obtaining Company and third-party opinions or memoranda regarding the uncertain tax positions.
+Added: – Identifying key judgements underlying the Company’s position and evaluating whether the conclusions are consistent with our interpretation of the relevant laws and regulations.
+Added: – Evaluating the Company’s method of measuring its liability for unrecognized tax benefits, including underlying data and assumptions.
+Added: – Evaluating the basis for certain intercompany transactions, such as transfer pricing, by comparison to economic studies performed by management and third-party data.
+Added: – Evaluating matters raised by taxing authorities in former and ongoing tax audits.
+Added: – Assessing changes and interpretation of applicable tax law.
/s/ DELOITTE & TOUCHE LLP
8 unchanged sentences
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 4, 2022, expressed an unqualified opinion on the Company's internal control over financial reporting.
−Removed: Changes in Accounting Principles
−Removed: As discussed in Note 1 to the financial statements, in the first quarter of 2019, the Company changed the method of accounting for leases due to the adoption of Accounting Standards Codification (ASC) Topic 842, Leases .
Basis for Opinion
11 unchanged sentences
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.
−Removed: The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which they relate.
−Removed: Goodwill – Annual Impairment Assessment – Refer to Note 1 and Note 13 to the financial statements
+Added: The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.
+Added: Uncertain Tax Positions — Refer to Notes 1 and 8 to the financial statements
Critical Audit Matter Description
−Removed: The Company tests goodwill for impairment annually (in the fourth quarter), or more frequently when events or changes in circumstances, indicate it is more likely than not that the fair value of a reporting unit has declined below its carrying value.
−Removed: In performing quantitative assessments, the Company utilizes a discounted cash flow methodology to calculate the fair value of its reporting units, which requires management to make significant estimates and assumptions related to projected revenue growth rates, discount rates, and earnings before interest, taxes, depreciation and amortization (“EBITDA”), and EBITDA margin.
−Removed: Changes in these assumptions could have a significant impact on the fair value of the reporting unit and the amount of any goodwill impairment charge.
−Removed: At December 31, 2020, the Company has six reporting units, all but one of which have goodwill.
−Removed: Throughout 2020, the Coronavirus (COVID-19) has had substantial negative impact on the results of the Company’s operations and financial performance of its reporting units.
−Removed: With unprecedented volatility in global financial and commodities markets, the Company’s reporting units experienced decreased demand in certain end-customer markets, changes in supply and demand fundamentals, and margin compression caused by lowering of global energy prices.
−Removed: Given the uncertainty as to the ultimate severity and duration of the COVID-19 pandemic, the volatility in the value of Company’s shares, and uneven course of economic recovery, leading up to its annual goodwill impairment test in the fourth quarter the Company continuously monitored the impact of the pandemic on its reporting units to determine if it was more likely than not that the fair value was less than the carrying value for any of its reporting units.
−Removed: Based on the results of qualitative assessments completed as part of the annual impairment test for all reporting units, the Company moved to performing a quantitative test for one reporting unit.
−Removed: The discounted cash flows of this reporting unit supported a fair value in excess of the carrying value and as such no goodwill impairment charges were recorded.
−Removed: Given the significant judgments made by management to estimate the fair value of the reporting unit, performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions related to projected revenue growth rates, discount rates, EBITDA and EBITDA margin required a high degree of auditor judgment and an increased extent of effort, including the assistance of our fair value specialists.
+Added: The Company has a complex legal structure involving numerous domestic and foreign locations with constantly changing tax laws, regulations, and legal interpretations.
+Added: The Company’s management is required to interpret and apply these tax laws and regulations in determining the amount of its income tax liability and provision.
+Added: When an uncertain tax position is identified by management, the Company must evaluate if it is more likely than not, based on the technical merits, that the uncertain tax position will be sustained upon examination.
+Added: The Company recognizes a benefit for tax positions using the highest cumulative tax benefit that is more likely than not to be realized.
+Added: The Company establishes a liability for unrecognized tax benefits that do not meet this threshold.
+Added: The evaluation of each uncertain tax position requires management to apply specialized skill, knowledge, and significant
+Added: judgment related to the identified position.
+Added: The Company’s liability for unrecognized tax benefits and related accrued interest and penalties as of December 31, 2021 was $580 million and $502 million, respectively.
+Added: Because of the complexity of tax laws, regulations and legal interpretations relevant to numerous taxing jurisdictions in which the Company operates, auditing uncertain tax positions and the determination of whether the more likely than not threshold was met requires a high degree of auditor judgment and increased extent of effort, including the involvement of our income tax specialists.
How the Critical Audit Matter Was Addressed in the Audit
−Removed: Our audit procedures related to management’s estimates and assumptions related to projected revenue growth rates, discount rates, EBITDA and EBITDA margin for the reporting unit subject to the quantitative test included the following, among other procedures:
−Removed: • With the assistance of our fair value specialists, we tested the effectiveness of internal controls over the goodwill impairment evaluation, including quarterly impairment monitoring controls and controls over the selection of the discount rates and over forecasts of future revenue growth rates, EBITDA, and EBITDA margin.
−Removed: • We performed a retrospective review comparing actual revenue and EBITDA results of the reporting unit for 2020 to the forecasted results from 2019.
−Removed: • We performed a retrospective review comparing management’s estimates and assumptions relating to revenue, EBITDA, and EBITDA margin projections for the reporting unit used for the purpose of current year’s annual impairment test to the projections previously used in connection with the prior year annual impairment test.
−Removed: • We evaluated the consistency of estimates and assumptions relating to revenue and EBITDA growth inherent in the discounted cash flow model for the reporting unit to those used by management in other annual forecasting activities.
−Removed: • With the assistance of our fair value specialists, we performed a benchmarking exercise comparing management’s estimates and assumptions related to revenue growth, EBITDA and EBITDA margin for the reporting unit as of the measurement date to the revenue growth, EBITDA and EBITDA margins of a peer group of public companies for the most recent three years and the projection period.
−Removed: • With the assistance of our fair value specialists, we evaluated (1) the valuation methodology used and (2) the projections of long-term revenue growth and the discount rates by testing the underlying source information, and by developing a range of independent estimates and comparing those to the rates selected by management.
+Added: Our audit procedures related to uncertain tax positions included the following, among others:
+Added: • We tested the effectiveness of internal controls over income taxes, including those over identifying uncertain tax positions and measuring liabilities.
+Added: • We evaluated, with the assistance of our income tax specialists, the Company’s uncertain tax positions by performing the following:
+Added: – Obtaining Company and third-party opinions or memoranda regarding the uncertain tax positions.
+Added: – Identifying key judgements underlying the Company’s position and evaluating whether the conclusions are consistent with our interpretation of the relevant laws and regulations.
+Added: – Evaluating the Company’s method of measuring its liability for unrecognized tax benefits, including underlying data and assumptions.
+Added: – Evaluating the basis for certain intercompany transactions, such as transfer pricing, by comparison to economic studies performed by management and third-party data.
+Added: – Evaluating matters raised by taxing authorities in former and ongoing tax audits.
+Added: – Assessing changes and interpretation of applicable tax law.
/s/ DELOITTE & TOUCHE LLP
43 unchanged sentences
Derivative instruments 123 ( 76 ) ( 338 )
−Removed: Total other comprehensive loss ( 609 ) ( 1,154 ) ( 257 )
+Added: Total other comprehensive income (loss) 1,878 ( 609 ) ( 1,154 )
Comprehensive income (loss) 8,283 685 ( 2,426 )
7 unchanged sentences
Current Assets
−Removed: Cash and cash equivalents (variable interest entities restricted - 2020:
−Removed: $ 5,104 $ 2,367
+Added: Cash and cash equivalents $ 2,988 $ 5,104
Accounts and notes receivable:
10 unchanged sentences
Accumulated depreciation 37,049 36,086
−Removed: Net property (variable interest entities restricted - 2020:
−Removed: 20,239 20,996
+Added: Net property 20,555 20,239
Goodwill 8,764 8,908
16 unchanged sentences
Total current liabilities 13,226 11,108
−Removed: Long-Term Debt (variable interest entities nonrecourse - 2020:
−Removed: 16,491 15,975
+Added: Long-Term Debt 14,280 16,491
Other Noncurrent Liabilities
33 unchanged sentences
Provision (credit) for deferred income tax 278 258 ( 228 )
−Removed: Earnings of nonconsolidated affiliates less than dividends received 443 1,114 108
+Added: Earnings of nonconsolidated affiliates less than (in excess of) dividends received ( 651 ) 443 1,114
Net periodic pension benefit cost 39 266 144
21 unchanged sentences
Proceeds from sales and maturities of investments 759 1,122 1,252
−Removed: Proceeds from interests in trade accounts receivable conduits — — 657
Other investing activities, net ( 10 ) 29 —
16 unchanged sentences
Dividends paid to DowDuPont Inc.
−Removed: — ( 535 ) ( 3,711 )
Settlements and transfers related to separation from DowDuPont Inc.
−Removed: — 1,935 ( 240 )
−Removed: Other financing activities, net — — 3
Cash used for financing activities - continuing operations ( 6,071 ) ( 2,764 ) ( 4,077 )
26 unchanged sentences
Dividends to DowDuPont Inc.
−Removed: — ( 535 ) ( 3,711 )
Common control transaction 46 177 ( 14,806 )
−Removed: Adoption of accounting standards (Note 1) — ( 151 ) 989
+Added: Adoption of accounting standards — — ( 151 )
Other ( 22 ) ( 15 ) ( 14 )
2 unchanged sentences
Balance at beginning of year ( 10,855 ) ( 10,246 ) ( 9,885 )
−Removed: Other comprehensive loss ( 609 ) ( 1,154 ) ( 257 )
+Added: Other comprehensive income (loss) 1,878 ( 609 ) ( 1,154 )
Common control transaction — — 793
−Removed: Adoption of accounting standards (Note 1) — — ( 1,037 )
Balance at end of year ( 8,977 ) ( 10,855 ) ( 10,246 )
44 unchanged sentences
Derivative instruments 123 ( 76 ) ( 338 )
−Removed: Total other comprehensive loss ( 609 ) ( 1,154 ) ( 257 )
+Added: Total other comprehensive income (loss) 1,878 ( 609 ) ( 1,154 )
Comprehensive income (loss) 8,246 695 ( 2,304 )
6 unchanged sentences
Current Assets
−Removed: Cash and cash equivalents (variable interest entities restricted - 2020:
−Removed: $ 5,104 $ 2,367
+Added: Cash and cash equivalents $ 2,988 $ 5,104
Accounts and notes receivable:
10 unchanged sentences
Accumulated depreciation 37,049 36,086
−Removed: Net property (variable interest entities restricted - 2020:
−Removed: 20,239 20,996
+Added: Net property 20,555 20,239
Goodwill 8,764 8,908
16 unchanged sentences
Total current liabilities 13,046 10,574
−Removed: Long-Term Debt (variable interest entities nonrecourse - 2020:
−Removed: 16,491 15,975
+Added: Long-Term Debt 14,280 16,491
Other Noncurrent Liabilities
27 unchanged sentences
Provision (credit) for deferred income tax 278 258 ( 228 )
−Removed: Earnings of nonconsolidated affiliates less than dividends received 443 1,114 108
+Added: Earnings of nonconsolidated affiliates less than (in excess of) dividends received ( 651 ) 443 1,114
Net periodic pension benefit cost 39 266 144
21 unchanged sentences
Proceeds from sales and maturities of investments 759 1,122 1,252
−Removed: Proceeds from interests in trade accounts receivable conduits — — 657
Other investing activities, net ( 10 ) 29 —
14 unchanged sentences
Dividends paid to DowDuPont Inc.
−Removed: — ( 535 ) ( 3,711 )
Dividends paid to Dow Inc.
1 unchanged sentence
Settlements and transfers related to separation from DowDuPont Inc.
−Removed: — ( 61 ) ( 240 )
−Removed: Other financing activities, net — — 3
Cash used for financing activities - continuing operations ( 6,262 ) ( 2,801 ) ( 4,224 )
25 unchanged sentences
Dividends to DowDuPont Inc.
−Removed: — ( 535 ) ( 3,711 )
Common control transaction — — ( 16,009 )
−Removed: Adoption of accounting standards (Note 1) — ( 151 ) 989
+Added: Adoption of accounting standards — — ( 151 )
Other ( 22 ) ( 15 ) ( 14 )
2 unchanged sentences
Balance at beginning of year ( 10,855 ) ( 10,246 ) ( 9,885 )
−Removed: Other comprehensive loss ( 609 ) ( 1,154 ) ( 257 )
+Added: Other comprehensive income (loss) 1,878 ( 609 ) ( 1,154 )
Common control transaction — — 793
−Removed: Adoption of accounting standards (Note 1) — — ( 1,037 )
Balance at end of year ( 8,977 ) ( 10,855 ) ( 10,246 )
24 unchanged sentences
15 Notes Payable, Long-Term Debt and Available Credit Facilities
−Removed: 16 Commitments and Contingent Liabilities
+Added: 16 Commitments and Contingencies
18 Stockholders' Equity
7 unchanged sentences
26 Segments and Geographic Regions
−Removed: 27 Selected Quarterly Financial Data
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
15 unchanged sentences
Intercompany transactions and balances are eliminated in consolidation.
−Removed: Investments in nonconsolidated affiliates (20-50 percent owned companies or less than 20 percent owned companies over which significant influence is exercised) are accounted for using the equity method.
+Added: Investments in nonconsolidated affiliates (20-50 percent owned companies or less than 20 percent owned companies over which significant influence is exercised) are primarily accounted for using the equity method.
Effective April 1, 2019, Dow Inc.
8 unchanged sentences
As of the effective date and time of the distribution, DowDuPont no longer beneficially owned 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 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 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 for additional information.
9 unchanged sentences
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 term "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.
+Added: Certain reclassifications of prior period amounts have been made to conform with the current year presentation.
Use of Estimates in Financial Statement Preparation
53 unchanged sentences
Impairment and Disposal of Long-Lived Assets
−Removed: The Company evaluates long-lived assets and certain identifiable intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.
+Added: The Company evaluates long-lived assets (property, finite-lived intangible assets and right-of-use assets) for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.
When undiscounted future cash flows are not expected to be sufficient to recover an asset’s carrying amount, the asset is written down to its fair value based on bids received from third parties or a discounted cash flow analysis based on market participant assumptions.
−Removed: Long-lived assets to be disposed of by sale, if material, are classified as held for sale and reported at the lower of carrying amount or fair value less cost to sell, and depreciation is ceased.
−Removed: Long-lived assets to be disposed of other than by sale are classified as held and used until they are disposed of and reported at the lower of carrying amount or fair value, and depreciation is recognized over the remaining useful life of the assets.
+Added: Long-lived assets to be disposed of by sale, if material, are classified as held for sale and reported at the lower of carrying amount or fair value less cost to sell, and depreciation/amortization is ceased.
+Added: Long-lived assets to be disposed of other than by sale are classified as held and used until they are disposed of and reported at the lower of carrying amount or fair value, and depreciation/amortization is recognized over the remaining useful life of the assets.
Goodwill and Other Intangible Assets
7 unchanged sentences
Finite-lived intangible assets such as developed technology, customer-related, trademarks, tradenames and software, are amortized over their estimated useful lives, generally on a straight-line basis for periods ranging primarily from 3 to 20 years.
−Removed: Indefinite-lived intangible assets are reviewed for impairment or obsolescence annually, or more frequently when events or changes in circumstances indicate that the carrying amount of an intangible asset may not be recoverable.
−Removed: If impaired, intangible assets are written down to fair value based on discounted cash flows.
Asset Retirement Obligations
35 unchanged sentences
Integration and Separation Costs
−Removed: The Company classifies expenses related to the Merger and separation and the ownership restructure of Dow Silicones as "Integration and separation costs" in the consolidated statements of income.
+Added: The Company classifies expenses related to the Merger and separation as "Integration and separation costs" in the consolidated statements of income.
Merger and separation related costs include:
post-Merger integration expenses, costs incurred for the separation of AgCo and SpecCo and costs related to the integration of ECP.
−Removed: The Dow Silicones-related costs include integration expenses incurred after the close of the ownership restructure.
Integration and separation costs primarily consist of financial adviser, information technology, legal, accounting, consulting and other professional advisory fees associated with preparation and execution of these activities.
−Removed: Integration and separation costs related to the Dow Silicones ownership restructure were completed as of May 31, 2018.
Integration and separation costs related to the Merger and separation were completed as of December 31, 2020.
3 unchanged sentences
The Company uses the portfolio approach for releasing income tax effects from AOCL.
−Removed: Effective with the Merger, TDCC and Historical DuPont were subsidiaries of DowDuPont.
−Removed: Prior to the separation, TDCC was included in DowDuPont's consolidated tax groups and related income tax returns within certain jurisdictions.
−Removed: The Company recorded a separate tax liability for its share of the taxable income and tax attributes and obligations on DowDuPont’s consolidated income tax returns following a formula consistent with the economic sharing of tax attributes and obligations.
−Removed: The Company and Historical DuPont computed the amount due to DowDuPont for their share of taxable income and tax attributes and obligations on DowDuPont’s consolidated tax return.
−Removed: The amounts reported as income tax payable or receivable represent the Company’s payment obligation (or refundable amount) to DowDuPont based on a theoretical tax liability calculated based on the methodologies agreed, elected or required in each combined or consolidated filing jurisdiction.
−Removed: Since April 1, 2019, the Company no longer has consolidated income tax return filings with Historical DuPont entities.
The Company recognizes the financial statement effects of an uncertain income tax position when it is more likely than not, based on the technical merits, that the position will be sustained upon examination.
14 unchanged sentences
The impact is reflected in the "Adoption of accounting standards" line in the consolidated statements of equity of both Dow Inc.
−Removed: The adoption of Topic 606, ASU 2016-01, "Financial Instruments - Overall (Subtopic 825-10):
−Removed: Recognition and Measurement of Financial Assets and Financial Liabilities" and ASU 2016-16, "Income Taxes (Topic 740):
−Removed: Intra-Entity Transfers of Assets Other Than Inventory" in the first quarter of 2018 resulted in a net decrease of $ 68 million to "Retained earnings" and a decrease of $ 20 million to AOCL in the consolidated statements of equity at January 1, 2018.
−Removed: In the second quarter of 2018, the Company early adopted ASU 2018-02, "Income Statement - Reporting Comprehensive Income (Topic 220):
−Removed: Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income ("ASU 2018-02")." The adoption of this standard resulted in a $ 1,057 million increase to "Retained earnings" due to the reclassification from AOCL in the consolidated statements of equity at April 1, 2018.
−Removed: The impacts are reflected in the "Adoption of accounting standards" line in the consolidated statements of equity.
−Removed: Change in Financial Statement Presentation
−Removed: Consolidated Balance Sheets
−Removed: In 2020, the Company elected to reclassify "Marketable securities" to "Other current assets" in the consolidated balance sheets and, as a result, the prior period amounts have been reclassified to conform to current year presentation.
−Removed: Changes made to the consolidated balance sheets were as follows:
−Removed: Changes to the Consolidated Balance Sheets Dec 31, 2019
−Removed: In millions As Filed Updated As Filed Updated
−Removed: Marketable securities $ 21 $ — $ 21 $ —
−Removed: Other current assets $ 658 $ 679 $ 571 $ 592
TDCC Dividends
6 unchanged sentences
Recently Adopted Accounting Guidance
−Removed: In the first quarter of 2020, the Company adopted ASU 2018-13, "Fair Value Measurement (Topic 820):
−Removed: Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement," which is part of the Financial Accounting Standards Board's ("FASB") disclosure framework project to improve the effectiveness of disclosures in the notes to the financial statements.
−Removed: The amendments in the new guidance remove, modify and add certain disclosure requirements related to fair value measurements covered in Topic 820, "Fair Value Measurement," with certain requirements applied prospectively and all other requirements applied retrospectively.
−Removed: The adoption of this guidance did not have a material impact on the consolidated financial statements.
−Removed: See Note 23 for additional information.
−Removed: In the first quarter of 2020, the Company adopted ASU 2018-15, "Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40):
−Removed: Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract," which requires a customer in a cloud computing arrangement that is a service contract to follow the internal-use software guidance in Topic 350, "Intangibles - Goodwill and Other" to determine which implementation costs to capitalize as assets or expense as incurred.
−Removed: The Company elected to apply the standard prospectively and the adoption of this guidance did not have a material impact on the consolidated financial statements.
−Removed: In the first quarter of 2020, the Company adopted ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326):
−Removed: Measurement of Credit Losses on Financial Instruments" and the associated ASUs.
−Removed: The amendments replace the incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates.
−Removed: Accordingly, companies are required to consider forward-looking information to estimate credit losses expected to occur over the estimated life of an asset, including losses that may be incurred in future periods.
−Removed: The amendments in the standard required application through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted.
+Added: In the first quarter of 2021, the Company adopted Accounting Standards Update 2019-12, "Income Taxes (Topic 740):
+Added: Simplifying the Accounting for Income Taxes." The amendments simplify the accounting for income taxes by removing certain exceptions to the general principles of Topic 740, "Income Taxes" and improve consistent application by clarifying and amending existing guidance.
The adoption of this guidance did not have a material impact on the consolidated financial statements.
−Removed: In the third quarter of 2020, the Company adopted ASU 2020-04, “Reference Rate Reform (Topic 848):
−Removed: Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The amendments provide optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met.
−Removed: The new standard is effective March 12, 2020 through December 31, 2022, with the adoption date dependent upon the Company’s election.
−Removed: The Company has elected to apply the optional expedients and exceptions provided by the new guidance as modifications are made to relevant contracts, hedging relationships and other transactions during the reference rate reform transition period.
−Removed: As the amendments are intended to ease the potential burden in accounting for, or recognizing the effects of, reference rate reform on financial reporting, the application of this guidance has not and will not have a material impact on the consolidated financial statements.
−Removed: Accounting Guidance Issued But Not Adopted at December 31, 2020
−Removed: In December 2019, the FASB issued ASU 2019-12, "Income Taxes (Topic 740):
−Removed: Simplifying the Accounting for Income Taxes." The amendments simplify the accounting for income taxes by removing certain exceptions to the general principles of Topic 740, "Income Taxes" and also improve consistent application by clarifying and amending existing guidance.
−Removed: The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020.
−Removed: Early adoption is permitted, with the amendments to be applied on a retrospective, modified retrospective or prospective basis, depending on the specific amendment.
−Removed: The Company will adopt the new guidance in the first quarter of 2021 and the adoption of this guidance is not expected to have a material impact on the consolidated financial statements.
NOTE 3 – SEPARATION FROM DOWDUPONT
12 unchanged sentences
The shareholders of record of DowDuPont received one share of Dow Inc.
−Removed: common stock, par value $ 0.01 per share, for every three shares of DowDuPont common stock, par value $ 0.01 per share, held as of the Record Date ("Distribution Ratio").
+Added: common stock, par value $ 0.01 per share, for every three shares of DowDuPont common stock, par value $ 0.01 per share, held as of the Record Date.
No fractional shares of Dow Inc.
47 unchanged sentences
The impacts of indemnifications and other post-separation matters relating to the Agreements are primarily reflected in the consolidated financial statements of Dow Inc.
−Removed: In 2019, the Company recorded pretax charges related to the Agreements of $ 24 million in "Integration and separation costs" and $ 69 million in "Sundry income (expense) - net" in the consolidated statements of income of Dow Inc., related to Corporate.
−Removed: At December 31, 2020, the Company had assets of $ 77 million ($ 58 million at December 31, 2019) included in "Other current assets" and $ 33 million ($ 52 million at December 31, 2019) included in "Noncurrent receivables" and liabilities of $ 412 million ($ 352 million at December 31, 2019) included in "Accrued and other current liabilities" and $ 46 million ($ 96 million at December 31, 2019) included in "Other noncurrent obligations" in the consolidated balance sheets of Dow Inc.
−Removed: related to the Agreements.
+Added: In 2019, the Company recorded pretax charges related to the Agreements of $ 69 million in "Sundry income (expense) - net" and $ 24 million in "Integration and separation costs" in the consolidated statements of income of Dow Inc., related to Corporate.
+Added: At December 31, 2021, the Company had no assets ($ 77 million at December 31, 2020) included in "Other current assets" and $ 20 million ($ 33 million at December 31, 2020) included in "Noncurrent receivables" and liabilities of $ 148 million ($ 412 million at December 31, 2020) included in "Accrued and other current liabilities" and $ 39 million ($ 46 million at December 31, 2020) included in "Other noncurrent obligations" in the consolidated balance sheets of Dow Inc.
Any adjustments to these assets and liabilities in subsequent periods will be recorded in Dow Inc.'s results of operations.
1 unchanged sentence
At December 31, 2021, $ 15 million ($ 103 million at December 31, 2020) of this liability was recorded in "Accrued and other current liabilities" and $ 96 million ($ 96 million at December 31, 2020) was recorded in "Other noncurrent obligations" in the consolidated balance sheets of Dow Inc.
+Added: In the fourth quarter of 2021, due to changes in certain underlying exposures, Dow Inc.
+Added: reversed $ 46 million of the liability.
Based on notices received in the fourth quarter of 2020, Dow Inc.
−Removed: reversed $ 177 million of the liability and the impact is reflected in the "Common control transaction" line in the consolidated statements of equity of Dow Inc.
+Added: reversed $ 177 million of the liability.
+Added: The impact of the reversals are reflected in the "Common control transaction" line in the consolidated statements of equity of Dow Inc.
The final resolution of the remaining liability is uncertain and any subsequent adjustments to the carrying value of this liability will be reflected in equity of Dow Inc.
In 2021, Dow Inc.
−Removed: made net cash payments of $ 18 million ($ 215 million in 2019) related to the Agreements, recorded in "Cash flows from operating activities - discontinued operations" in the Dow Inc.
+Added: made net cash payments of $ 60 million ($ 18 million in 2020 and $ 215 million in 2019) related to the Agreements, recorded in "Cash flows from operating activities - discontinued operations" in the Dow Inc.
consolidated statements of cash flows.
−Removed: The Company also received $ 98 million in 2019 related to the Agreements, recorded in "Other assets and liabilities, net" within "Cash flows from operating activities - continuing operations" in the Dow Inc.
+Added: The Company also received $ 144 million in 2021 (insignificant in 2020 and $ 98 million in 2019) related to the Agreements, recorded in "Other assets and liabilities, net" within "Cash flows from operating activities - continuing operations" in the Dow Inc.
consolidated statements of cash flows.
4 unchanged sentences
Integration and Separation Costs
−Removed: Integration and separation costs, which reflect costs related to post-Merger integration and business separation activities, as well as the ownership restructure of Dow Silicones (through May 31, 2018), were $ 239 million in 2020, compared with $ 1,063 million and $ 1,039 million for Dow Inc.
−Removed: and TDCC, respectively, in 2019 and $ 1,179 million in 2018.
+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 separation costs related to post-Merger integration and business separation activities were completed as of December 31, 2020.
30 unchanged sentences
Remaining performance obligations represent the transaction price allocated to unsatisfied or partially unsatisfied performance obligations.
−Removed: At December 31, 2020, the Company had unfulfilled performance obligations of $ 977 million ($ 826 million at December 31, 2019) related to the licensing of technology and expects revenue to be recognized for the remaining performance obligations over the next seven years.
+Added: At December 31, 2021, the Company had unfulfilled performance obligations of $ 829 million ($ 977 million at December 31, 2020) related to the licensing of technology and expects revenue to be recognized for the remaining performance obligations over the next six years.
The remaining performance obligations are for product sales that have expected durations of one year or less, product sales of materials delivered through a pipeline for which the Company has elected the right to invoice practical expedient, or variable consideration attributable to royalties for licenses of patents and technology.
30 unchanged sentences
Contract liabilities include payments received in advance of performance under the contract and are recognized in revenue when the performance obligations are met.
−Removed: "Contract liabilities - current" primarily reflects deferred revenue from prepayments from customers for product to be delivered in 12 months or less.
+Added: "Contract liabilities - current" primarily reflects deferred revenue from prepayments from customers for product to be delivered in 12 months or less and royalty payments that are deferred and will be recognized in 12 months or less.
"Contract liabilities - noncurrent" includes advance payments that the Company has received from customers related to long-term supply agreements and royalty payments that are deferred and recognized over the life of the contract.
−Removed: Revenue recognized in 2020 from amounts included in contract liabilities at the beginning of the period was approximately $ 145 million (approximately $ 145 million in 2019 and $ 205 million in 2018).
+Added: Revenue recognized in 2021 from amounts included in contract liabilities at the beginning of the period was approximately $ 295 million (approximately $ 145 million in 2020 and 2019).
In 2021, the amount of contract assets reclassified to receivables as a result of the right to the transaction consideration becoming unconditional was approximately $ 35 million (approximately $ 25 million in 2020).
1 unchanged sentence
The following table summarizes the contract assets and liabilities at December 31, 2021 and 2020:
−Removed: Contract Assets and Liabilities at Dec 31 2020 2019
−Removed: Accounts and notes receivable - Trade $ 4,839 $ 4,844
−Removed: Contract assets - current 1
−Removed: Contract assets - noncurrent 2
+Added: Contract Assets and Liabilities at Dec 31 Balance Sheet Classification 2021 2020
+Added: Accounts and notes receivable - trade Accounts and notes receivable - Trade $ 6,841 $ 5,090
+Added: Contract assets - current Other current assets $ 34 $ 58
+Added: Contract assets - noncurrent Deferred charges and other assets $ 26 $ 11
Contract liabilities - current 1
−Removed: Contract liabilities - noncurrent 4
−Removed: $ 1,915 $ 1,607
−Removed: Included in "Other current assets" in the consolidated balance sheets.
−Removed: Included in "Deferred charges and other assets" in the consolidated balance sheets.
−Removed: Included in "Accrued and other current liabilities" in the consolidated balance sheets.
−Removed: The increase from December 31, 2019 to December 31, 2020 was primarily due to advance payments from customers related to royalty agreements.
−Removed: Included in "Other noncurrent obligations" in the consolidated balance sheets.
−Removed: The increase from December 31, 2019 to December 31, 2020 was due to an advance payment from a customer related to a long-term product supply agreement.
+Added: Accrued and other current liabilities $ 209 $ 349
+Added: Contract liabilities - noncurrent Other noncurrent obligations $ 1,925 $ 1,915
+Added: The decrease from December 31, 2020 to December 31, 2021 was due to recognition of deferred royalty payments.
NOTE 5 – DIVESTITURES
33 unchanged sentences
approved restructuring actions to achieve the Company's structural cost improvement initiatives in response to the continued economic impact from the coronavirus disease 2019 ("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: This program includes a global workforce cost reduction of approximately 6 percent and actions to rationalize the Company's manufacturing assets, which include asset write-down and write-off charges, related contract termination fees and environmental remediation costs ("2020 Restructuring Program").
−Removed: These actions are expected to be substantially complete by the end of 2021.
−Removed: As a result of these actions, in the third quarter of 2020 the Company recorded pretax restructuring charges of $ 575 million, consisting of severance and related benefit costs of $ 297 million, asset write-downs and write-offs of $ 197 million and costs associated with exit and disposal activities of $ 81 million.
−Removed: The impact of these charges is shown as "Restructuring, goodwill impairment and asset related charges - net" in the consolidated statements of income.
+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: This program included a global workforce cost reduction of approximately 6 percent and actions to rationalize the Company's manufacturing assets, which included asset write-down and write-off charges, related contract termination fees and environmental remediation costs ("2020 Restructuring Program").
+Added: Severance benefits are provided to employees primarily under Dow's ongoing benefit arrangements and are accrued against the Corporate segment once management commits to a plan of termination.
+Added: The actions related to the 2020 Restructuring Program were substantially complete by the end of 2021, except for certain cash payments expected to be made in 2022.
+Added: In the third quarter of 2020, the Company recorded pretax restructuring charges of $ 575 million, consisting of severance and related benefit costs of $ 297 million, asset write-downs and write-offs of $ 197 million and costs associated with exit and disposal activities of $ 81 million.
In the fourth quarter of 2020, the Company recorded net favorable pretax restructuring credits of $ 1 million related to asset write-downs and write-offs and $ 1 million related to costs associated with exit and disposal activities (related to Performance Materials & Coatings and Corporate).
1 unchanged sentence
See Note 20 for additional information.
+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: In addition, the Company reduced pretax restructuring charges by $ 10 million for severance and related benefit costs.
The following table summarizes the activities related to the 2020 Restructuring Program:
8 unchanged sentences
Reserve balance at Dec 31, 2020 $ 289 $ — $ 75 $ 364
−Removed: At December 31, 2020, $ 227 million of the reserve balance was included in "Accrued and other current liabilities" and $ 137 million was included in "Other noncurrent obligations" in the consolidated balance sheets.
−Removed: Severance and Related Benefit Costs
−Removed: Severance benefits are provided to employees primarily under Dow's ongoing benefit arrangements and are accrued against the Corporate segment once management commits to a plan of termination.
−Removed: The 2020 Restructuring Program included a charge for severance and related benefit costs of $ 297 million for a global workforce cost reduction of approximately 6 percent, with separations occurring primarily through the end of 2021, and impacting Corporate.
−Removed: At December 31, 2020, $ 8 million in severance payments had been made.
+Added: Packaging & Specialty Plastics $ — $ — $ 8 $ 8
+Added: Industrial Intermediates & Infrastructure — 1 — 1
+Added: Performance Materials & Coatings — 8 2 10
+Added: Corporate ( 10 ) 3 — ( 7 )
+Added: Total restructuring charges $ ( 10 ) $ 12 $ 10 $ 12
+Added: Charges against the reserve — ( 12 ) — ( 12 )
+Added: Cash payments ( 175 ) — ( 21 ) ( 196 )
+Added: Reserve balance at Dec 31, 2021 $ 104 $ — $ 64 $ 168
+Added: At December 31, 2021, $ 112 million ($ 227 million at December 31, 2020) of the reserve balance was included in "Accrued and other current liabilities" and $ 56 million ($ 137 million at December 31, 2020) was included in "Other noncurrent obligations" in the consolidated balance sheets.
+Added: The Company recorded pretax restructuring charges of $ 585 million inception-to-date under the 2020 Restructuring Program, consisting of severance and related benefit costs of $ 287 million, asset write-downs and write-offs of $ 208 million and costs associated with exit and disposal activities of $ 90 million.
Asset Write-downs and Write-offs
−Removed: The 2020 Restructuring Program included charges related to the write-down and write-off of assets totaling $ 196 million.
+Added: The 2020 Restructuring Program included charges related to the write-down and write-off of assets totaling $ 196 million in 2020.
Details regarding the asset write-downs and write-offs are as follows:
• Packaging & Specialty Plastics recorded a charge of $ 11 million to rationalize its production capacity by shutting down a small-scale production unit.
−Removed: The production unit will be shut down by the end of the third quarter of 2022.
• Industrial Intermediates & Infrastructure recorded a charge of $ 22 million to rationalize its asset footprint by shutting down certain amines and solvents facilities in the United States and Europe as well as select, small-scale downstream polyurethanes manufacturing facilities.
−Removed: The facilities will be shut down by the end of 2021.
• Performance Materials & Coatings recorded a charge of $ 116 million to shut down manufacturing assets, primarily related to small-scale coatings reactors, and will also rationalize its upstream asset footprint in Europe and the U.S.
& Canada by adjusting the supply of siloxane and silicon metal to balance to regional needs.
−Removed: The impacted facilities will be shut down by the end of 2021.
• Corporate recorded a charge of $ 47 million related to the write-down of leased, non-manufacturing facilities and the write-down of miscellaneous assets.
+Added: The 2020 Restructuring Program included charges related to the write-down and write-off of assets totaling $ 12 million in 2021, which included additional write-down and write-off of assets related to the actions listed above, impacting Industrial Intermediates & Infrastructure ($ 1 million) and Performance Materials & Coatings ($ 8 million), and the write-down of an additional non-manufacturing facility impacting Corporate ($ 3 million).
+Added: Shut down related activities for impacted facilities were substantially complete by the end of 2021.
Costs Associated with Exit and Disposal Activities
−Removed: The 2020 Restructuring Program included charges of $ 80 million for costs associated with exit and disposal activities, which included $ 19 million for contract termination fees related to the asset actions listed above, impacting Performance Materials & Coatings ($ 9 million) and Corporate ($ 10 million), as well as $ 56 million for environmental remediation, impacting Performance Materials & Coatings ($ 52 million) and Corporate ($ 4 million) and $ 5 million related to curtailment costs associated with a defined benefit pension plan, impacting Corporate.
+Added: The 2020 Restructuring Program included charges of $ 80 million for costs associated with exit and disposal activities in 2020, which included $ 19 million for contract termination fees related to the asset actions listed above, impacting Performance Materials & Coatings ($ 9 million) and Corporate ($ 10 million), as well as $ 56 million for environmental remediation, impacting Performance Materials & Coatings ($ 52 million) and Corporate ($ 4 million) and $ 5 million related to curtailment costs associated with a defined benefit pension plan, impacting Corporate.
+Added: The 2020 Restructuring Program included charges of $ 10 million for costs associated with exit and disposal activities in 2021, which included contract termination fees and environmental remediation, impacting Packaging & Specialty Plastics ($ 8 million) and Performance Materials & Coatings ($ 2 million).
DowDuPont Cost Synergy Program
2 unchanged sentences
The restructuring charges below reflect charges from continuing operations.
−Removed: The impact of the charges are shown as "Restructuring, goodwill impairment and asset related charges ‑ net" in the consolidated statements of income.
−Removed: 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.
The Company recorded pretax restructuring charges of $ 292 million in 2019, consisting of severance and related benefit costs of $ 123 million, assets write-downs and write-offs of $ 143 million and costs associated with exit and disposal activities of $ 26 million.
−Removed: For the year ended December 31, 2020, the Company recorded pretax restructuring charges of $ 86 million for severance and related benefit costs.
+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.
Cash expenditures related to the Synergy Program were substantially complete at December 31, 2020.
−Removed: The following table summarizes the activities related to the Synergy Program.
At December 31, 2021, $ 4 million was included in "Accrued and other current liabilities" ($ 21 million at December 31, 2020) and $ 10 million ($ 13 million at December 31, 2020) was included in "Other noncurrent obligations" in the consolidated balance sheets.
−Removed: DowDuPont Synergy Program Severance and Related Benefit Costs Asset Write-downs and Write-offs Costs Associated with Exit and Disposal Activities Total
−Removed: Reserve balance at Dec 31, 2017 $ 270 $ — $ 5 275
−Removed: 2018 restructuring charges
−Removed: Packaging & Specialty Plastics $ — $ 10 $ 3 $ 13
−Removed: Industrial Intermediates & Infrastructure — — 11 11
−Removed: Performance Materials & Coatings — 7 — 7
−Removed: Corporate 137 16 — 153
−Removed: Total 2018 restructuring charges $ 137 $ 33 $ 14 $ 184
−Removed: Charges against the reserve — ( 33 ) — ( 33 )
−Removed: Cash payments ( 197 ) — ( 12 ) ( 209 )
−Removed: Reserve balance at Dec 31, 2018 $ 210 $ — $ 7 $ 217
−Removed: 2019 restructuring charges
−Removed: Packaging & Specialty Plastics $ — $ — $ 1 $ 1
−Removed: Industrial Intermediates & Infrastructure — 2 5 7
−Removed: Performance Materials & Coatings — 28 — 28
−Removed: Corporate 123 113 20 256
−Removed: Total 2019 restructuring charges $ 123 $ 143 $ 26 $ 292
−Removed: Charges against the reserve — ( 143 ) — ( 143 )
−Removed: Cash payments ( 279 ) — ( 16 ) ( 295 )
−Removed: Reserve balance at Dec 31, 2019 $ 54 $ — $ 17 $ 71
−Removed: 2020 restructuring charges
−Removed: Corporate 90 — — 90
−Removed: Total 2020 restructuring charges $ 90 $ — $ — $ 90
−Removed: Charges against the reserve ( 4 ) — — ( 4 )
−Removed: Cash payments ( 121 ) — ( 2 ) ( 123 )
−Removed: Reserve balance at Dec 31, 2020 $ 19 $ — $ 15 $ 34
The Company recorded pretax restructuring charges of $ 955 million inception-to-date under the Synergy Program on a continuing operations basis, consisting of severance and related benefit costs of $ 647 million, asset write-downs and write-offs of $ 263 million and costs associated with exit and disposal activities of $ 45 million.
1 unchanged sentence
The restructuring charges related to the write-down and write-off of assets in 2019 under the Synergy Program were as follows:
−Removed: • The Company recorded a charge of $ 33 million for other miscellaneous asset write-downs and write-offs, including the shutdown of several small manufacturing facilities and the write-off of leased, non-manufacturing assets and certain corporate facilities.
−Removed: The charge related to Packaging & Specialty Plastics ($ 10 million), Performance Materials & Coatings ($ 7 million) and Corporate ($ 16 million).
−Removed: These manufacturing facilities were shut down by the end of 2019.
−Removed: The restructuring charges related to the write-down and write-off of assets in 2019 under the Synergy Program were as follows:
• The Company recorded a charge of $ 143 million for other miscellaneous asset write-downs and write-offs, including the shutdown of several small manufacturing facilities and the write-off of non-manufacturing assets and certain corporate facilities.
1 unchanged sentence
These manufacturing facilities were substantially shut down by the end of 2020.
−Removed: There were no restructuring charges related to the write-down and write-off of assets in 2020 under the Synergy Program.
+Added: There were no restructuring charges related to the write-down and write-off of assets in 2020 and 2021 under the Synergy Program.
Costs Associated with Exit and Disposal Activities
−Removed: The restructuring charges for costs associated with exit and disposal activities, including contract cancellation penalties and environmental remediation liabilities, totaled $ 14 million in 2018, $ 26 million in 2019 and zero in 2020.
+Added: The restructuring charges for costs associated with exit and disposal activities, including contract cancellation penalties and environmental remediation liabilities, totaled $ 26 million in 2019 and zero in 2020 and 2021.
The Company expects to incur additional costs in the future related to its restructuring activities.
5 unchanged sentences
Upon completion of the goodwill impairment testing in the fourth quarter of 2019, the Company determined the fair value of the Coatings & Performance Monomers reporting unit was lower than its carrying amount.
−Removed: As a result, the Company recorded an impairment charge of $ 1,039 million in the fourth quarter of 2019, included in "Restructuring, goodwill impairment and asset related charges - net" in the consolidated statements of income and related to Performance Materials & Coatings.
+Added: As a result, the Company recorded an impairment charge of $ 1,039 million in the fourth quarter of 2019, related to Performance Materials & Coatings.
See Note 13 for additional information.
1 unchanged sentence
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: The impairment charges related to Packaging & Specialty Plastics ($ 19 million), Performance Materials & Coatings ($ 15 million) and Corporate ($ 15 million).
See Note 23 for additional information.
2 unchanged sentences
The Company remains at the Institute site as a tenant.
−Removed: As a result of the planned transaction, the Company recognized a pretax impairment charge of $ 75 million in the third quarter of 2019, included in "Restructuring, goodwill impairment and asset related charges - net" in the consolidated statements of income and related to Packaging & Specialty Plastics ($ 24 million) and Corporate ($ 51 million).
+Added: As a result of the planned transaction, the Company recognized a pretax impairment charge of $ 75 million in the third quarter of 2019, related to Packaging & Specialty Plastics ($ 24 million) and Corporate ($ 51 million).
See Note 23 for additional information.
1 unchanged sentence
Additionally, as part of Dow's evaluation of Sadara, the Company reserved certain of its notes and accounts receivable with Sadara due to uncertainty on the timing of collection.
−Removed: As a result, the Company recorded a $ 1,755 million charge related to Sadara, included in “Restructuring, goodwill impairment and asset related charges - net" in the consolidated statements of income and related to Packaging & Specialty Plastics ($ 370 million), Industrial Intermediates & Infrastructure ($ 1,168 million) and Corporate ($ 217 million).
+Added: As a result, the Company recorded a $ 1,755 million charge, related to Packaging & Specialty Plastics ($ 370 million), Industrial Intermediates & Infrastructure ($ 1,168 million) and Corporate ($ 217 million).
See Notes 12 and 23 for additional information.
−Removed: In 2019, the Company recognized additional pretax impairment charges of $ 58 million related primarily to capital additions at Santa Vitoria.
−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 ($ 44 million), Performance Materials & Coatings ($ 9 million) and Corporate ($ 5 million).
−Removed: See Note 23 for additional information.
−Removed: In 2018, the Company recognized an additional pretax impairment charge of $ 34 million related primarily to capital additions at Santa Vitoria.
−Removed: The impairment charge was included in “Restructuring, goodwill impairment and asset related charges - net” in the consolidated statements of income and related to the Packaging & Specialty Plastics segment.
+Added: In 2019, the Company recognized pretax impairment charges of $ 58 million related primarily to capital additions at Santa Vitoria, and related to Packaging & Specialty Plastics ($ 44 million), Performance Materials & Coatings ($ 9 million) and Corporate ($ 5 million).
See Note 23 for additional information.
NOTE 7 – SUPPLEMENTARY INFORMATION
−Removed: Sundry Income (Expense) – Net 1
+Added: Sundry Income (Expense) – Net Dow Inc.
In millions 2021 2020 2019 2021 2020 2019
2 unchanged sentences
Foreign exchange gains (losses) ( 8 ) ( 62 ) 91 ( 13 ) ( 65 ) 77
−Removed: Gain on divestiture of marine and terminal operations and assets 3
+Added: Loss on early extinguishment of debt 2
( 574 ) ( 149 ) ( 102 ) ( 574 ) ( 149 ) ( 102 )
−Removed: Gain on divestiture of rail infrastructure operations and assets 3
+Added: Gain on sales of other assets and investments 105 48 67 105 48 67
+Added: Luxi arbitration award 3
54 — — 54 — —
−Removed: Loss on early extinguishment of debt 4
+Added: Indemnification and other transaction related credits (costs) 4
30 ( 21 ) ( 69 ) ( 2 ) ( 11 ) 6
1 unchanged sentence
16 ( 15 ) ( 49 ) 16 ( 15 ) 2
+Added: Gain on divestiture of rail infrastructure operations and assets 6
+Added: — 233 — — 233 —
+Added: Gain on divestiture of marine and terminal operations and assets 6
+Added: — 499 — — 499 —
Gain related to Nova ethylene asset matter 3
— 544 170 — 544 170
−Removed: Gain on sales of other assets and investments 48 67 18 48 67 18
Dow Silicones breast implant liability adjustment 3
— 5 85 — 5 85
−Removed: Indemnification and other transaction related credits (costs) 7
−Removed: ( 21 ) ( 69 ) — ( 11 ) 6 —
Loss on Dow Silicones commercial creditor matters 3
— — ( 50 ) — — ( 50 )
−Removed: Post-closing adjustments related to Dow Silicones ownership restructure — — ( 20 ) — — ( 20 )
−Removed: Post-closing adjustments on divestiture of MEGlobal — — 20 — — 20
Other - net 10 84 113 3 82 113
Total sundry income (expense) – net $ ( 35 ) $ 1,269 $ 461 $ ( 79 ) $ 1,274 $ 573
−Removed: Prior period amounts were updated to conform with the current year presentation.
See Note 20 for additional information.
1 unchanged sentence
See Note 16 for additional information.
+Added: See Note 3 for additional information.
+Added: The year ended December 31, 2021 includes post-closing adjustments on a previous divestiture, related to Packaging & Specialty Plastics.
The year ended December 31, 2020 primarily relates to a loss on the divestiture of a bio-ethanol manufacturing facility in Brazil, related to Packaging & Specialty Plastics.
1 unchanged sentence
See Note 5 for additional information.
−Removed: See Note 3 for additional information.
Accrued and Other Current Liabilities
1 unchanged sentence
and TDCC, respectively.
−Removed: Accrued payroll, which is a component of "Accrued and other current liabilities" and includes liabilities related to payroll, incentive compensation and severance, was $ 866 million at December 31, 2020 and $ 284 million at December 31, 2019.
+Added: Accrued payroll, which is a component of "Accrued and other current liabilities" and includes liabilities related to payroll, performance-based compensation and severance, was $ 1,030 million at December 31, 2021 and $ 866 million at December 31, 2020.
No other components of "Accrued and other current liabilities" were more than 5 percent of total current liabilities.
Other Investments
−Removed: The Company has investments in company-owned life insurance policies ("COLI"), which are recorded at their cash surrender value as of each balance sheet date, as provided below:
−Removed: Investments in Company-Owned Life Insurance Dec 31, 2020 Dec 31, 2019
−Removed: Gross cash value $ 807 $ 820
−Removed: Existing drawdowns 1
−Removed: Investments in company-owned life insurance 2
−Removed: Classified as "Proceeds from sales and maturities of investments" in the consolidated statements of cash flows.
−Removed: Classified as "Other investments" in the consolidated balance sheets.
+Added: The Company has investments in company-owned life insurance policies ("COLI"), which are recorded at their cash surrender value as of each balance sheet date.
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.
+Added: In the first quarter of 2021, the Company monetized $ 200 million of its existing COLI policies' 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.
+Added: In the first nine months of 2020, the Company monetized $ 211 million of its existing COLI policies' value.
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.
−Removed: The repayment was reflected in "Purchases of investments" in the consolidated statements of cash flows.
+Added: The repayments were reflected in "Purchases of investments" in the consolidated statements of cash flows.
Supplemental Cash Flow Information
20 unchanged sentences
Deferred tax expense (benefit)
−Removed: $ 184 $ 52 $ ( 318 )
+Added: Federal $ 130 $ 184 $ 52
State and local 26 19 19
7 unchanged sentences
See Note 12 for additional information.
−Removed: The 2018 amount reflects the tax impact of the Tax Cuts and Jobs Act which accelerated the utilization of tax credits and required remeasurement of all U.S.
−Removed: deferred tax assets and liabilities.
Reconciliation to U.S.
5 unchanged sentences
federal income tax rate ( 1.3 ) ( 2.3 ) ( 14.8 )
−Removed: 1.7 ( 14.8 ) 6.7
tax effect of foreign earnings and dividends 1.7 3.9 1.9
1 unchanged sentence
Divestitures 2
−Removed: ( 5.1 ) — 0.8
Changes in valuation allowances 2.6 12.6 —
Impact of tax reform 3
−Removed: — 11.1 ( 3.4 )
Federal tax accrual adjustment 4
+Added: ( 5.3 ) 0.3 10.4
State and local income taxes 0.2 0.3 ( 4.4 )
3 unchanged sentences
Effective tax rate 21.4 % 37.5 % ( 37.7 ) %
−Removed: Includes the impact of valuation allowances and interest and penalties associated with uncertain tax positions in foreign jurisdictions.
−Removed: The 2020 impact from interest and penalties increased the effective tax rate by approximately 4 percent.
+Added: Certain prior year rates have been adjusted to conform with the current year presentation.
The 2020 impact relates to the divestiture of a bio-ethanol manufacturing facility in Brazil.
1 unchanged sentence
Includes the impact of tax reform in Switzerland and the United States.
−Removed: Primarily related to the favorable impact of the restoration of tax basis in assets, driven by a court judgment that did not involve the Company.
+Added: The 2021 impact represents a capital loss incurred on an internal restructuring fully offset by a valuation allowance reported in "Changes in valuation allowances" line item.
+Added: The 2019 impact primarily relates to the favorable impact of the restoration of tax basis in assets, driven by a court judgment that did not involve the Company.
See Note 12 for additional information.
1 unchanged sentence
The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted on March 27, 2020 in the United States.
−Removed: While the CARES Act has had no significant impact on the Company's provision for income taxes on continuing operations in 2020, the Company filed a tax loss carryback claim for $ 291 million in accordance with the provisions of the CARES Act.
+Added: While the CARES Act had no significant impact on the Company's provision for income taxes on continuing operations in 2020, the Company filed a tax loss carryback claim for $ 291 million in accordance with the provisions of the CARES Act in 2020.
This resulted in an increase in "Accounts and notes receivable - other" and a decrease in "Deferred income tax assets" in the consolidated balance sheets.
+Added: In 2021, the Company received $ 247 million of the tax loss carryback claim with the residual balance expected to be received in 2022.
In the fourth quarter of 2020, a valuation allowance of $ 260 million was recorded in the United States, primarily due to filing of the final combined Dow and DuPont tax return and related unutilized foreign tax credits.
−Removed: The Company projects it is more likely than not that a portion of these foreign tax credits and other tax attributes will remain unutilized prior to their expiration.
−Removed: On December 22, 2017, the Tax Cuts and Jobs Act ("The Act") was enacted.
−Removed: The Act reduced the U.S.
−Removed: federal corporate income tax rate from 35 percent to 21 percent, required companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously deferred, created new provisions related to foreign sourced earnings, eliminated the domestic manufacturing deduction and moved to a hybrid territorial system.
−Removed: While the Company made a reasonable estimate of the effects of The Act on its deferred tax balances and the one-time transition tax at December 31, 2017, in accordance with Staff Accounting Bulletin 118, the income tax effects of The Act were refined upon obtaining, preparing and analyzing additional information during the measurement period as follows:
−Removed: • In 2018, the Company completed the remeasurement of its U.S.
−Removed: federal deferred tax assets and liabilities based on rates at which they are expected to reverse in the future, which is generally 21 percent, and recorded a benefit of $ 79 million to “Provision for income taxes on continuing operations” in the consolidated statements of income with respect to the remeasurement of the Company's deferred tax balances.
−Removed: • The Company adjusted the impact of the mandatory deemed repatriation of post-1986 undistributed foreign earnings and profits, which resulted in a one-time transition tax, and recorded a benefit in 2018 of $ 85 million to "Provision for income taxes on continuing operations" in the consolidated statements of income with respect to the one-time transition tax.
−Removed: The Company had sufficient tax credits to offset the tax liability associated with the one-time transition tax.
−Removed: • In 2018, the Company recorded an indirect impact of The Act related to prepaid tax on the intercompany sale of inventory.
−Removed: The amount recorded related to inventory was a charge of $ 38 million to "Provision for income taxes on continuing operations" in the consolidated statements of income.
+Added: In 2021, the Company's strong earnings and revised projections resulted in a reversal of the valuation allowance.
Deferred Tax Balances at Dec 31 2021 2020 1
11 unchanged sentences
Total $ 5,382 $ 4,530 $ 6,558 $ 4,748
+Added: Certain prior year balances have been adjusted to conform with the current year presentation.
Operating Loss and Tax Credit Carryforwards at Dec 31 2021 2020
8 unchanged sentences
Total tax credit carryforwards $ 330 $ 699
−Removed: Total operating loss and tax credit carryforwards $ 2,004 $ 1,920
+Added: Capital loss carryforwards
+Added: Expire within 5 years $ 397 $ —
+Added: Total tax loss and tax credit carryforwards $ 1,784 $ 2,004
Undistributed earnings of foreign subsidiaries and related companies that are deemed to be permanently invested amounted to $ 7,769 million at December 31, 2021 and $ 7,401 million at December 31, 2020.
1 unchanged sentence
It is not practicable to calculate the unrecognized deferred tax liability on undistributed earnings.
+Added: Prior to the separation, TDCC and its consolidated subsidiaries were included in DowDuPont's consolidated federal income tax group and consolidated tax return.
+Added: Generally, the consolidated tax liability of the DowDuPont U.S.
+Added: tax group for each year was apportioned among the members of the consolidated group based on each member’s separate taxable income.
+Added: TDCC and DuPont intend that, to the extent federal and/or state corporate income tax liabilities are reduced through the utilization of tax attributes of the other, settlement of any receivable and payable generated from the use of the other party’s sub-group attributes will be in accordance with a tax sharing agreement and/or tax matters agreement.
+Added: At December 31, 2021, the Company had a receivable of zero related to the tax sharing agreement ($ 261 million at December 31, 2020), included in "Other current assets" in the consolidated balance sheets.
+Added: Balances related to the tax matters agreement are further discussed in Note 3.
The following table provides a reconciliation of the Company's unrecognized tax benefits:
12 unchanged sentences
Total accrual for interest and penalties recognized in the consolidated balance sheets $ 502 $ 144 $ 100
−Removed: Prior to the separation, TDCC and its consolidated subsidiaries were included in DowDuPont's consolidated federal income tax group and consolidated tax return.
−Removed: Generally, the consolidated tax liability of the DowDuPont U.S.
−Removed: tax group for each year was apportioned among the members of the consolidated group based on each member’s separate taxable income.
−Removed: TDCC and DuPont intend that, to the extent federal and/or state corporate income tax liabilities are reduced through the utilization of tax attributes of the other, settlement of any receivable and payable generated from the use of the other party’s sub-group attributes will be in accordance with a tax sharing agreement and/or tax matters agreement.
−Removed: At December 31, 2020, the Company had a receivable of $ 261 million related to the tax sharing agreement, which is included in "Other current assets" in the consolidated balance sheets ($ 312 million included in "Noncurrent receivables" at December 31, 2019).
−Removed: Each year, the Company files tax returns in the various national, state and local income taxing jurisdictions in which it operates.
−Removed: These tax returns are subject to examination and possible challenge by the tax authorities.
−Removed: Positions challenged by the tax authorities may be settled or appealed by the Company.
−Removed: As a result, there is an uncertainty in income taxes recognized in the Company’s financial statements in accordance with accounting for income taxes and accounting for uncertainty in income taxes.
−Removed: The ultimate resolution of such uncertainties is not expected to have a material impact on the Company's results of operations.
−Removed: Tax years that remain subject to examination for the Company’s major tax jurisdictions are shown below:
+Added: The 2021 impacts primarily relate to an increase in uncertain tax positions due to controversy in multiple jurisdictions related to various prior year cross-border matters.
+Added: The Company files tax returns in the multiple jurisdictions.
+Added: These returns are subject to examination and possible challenge by the tax authorities.
+Added: Open tax years are indicated in the table below.
Tax Years Subject to Examination by Major Tax Jurisdiction at Dec 31, 2021 Earliest Open Year
5 unchanged sentences
State and local income tax 2004
−Removed: The reserve for non-income tax contingencies related to issues in the United States and foreign locations was $ 33 million at December 31, 2020 ($ 44 million at December 31, 2019).
−Removed: This is management’s best estimate of the potential liability for non-income tax contingencies.
−Removed: Inherent uncertainties exist in estimates of tax contingencies due to changes in tax law, both legislated and concluded through the various jurisdictions’ tax court systems.
−Removed: It is the opinion of the Company’s management that the possibility is remote that costs in excess of those accrued will have a material impact on the Company’s consolidated financial statements.
+Added: Open years contain matters that could be subject to differing interpretations of applicable tax laws and regulations as they relate to the amount, character, timing or inclusion of revenue and expenses or the sustainability of income tax credits for a given audit cycle.
+Added: The ultimate resolution of such uncertainties is not expected to have a material impact on the Company's results of operations.
NOTE 9 - EARNINGS PER SHARE CALCULATIONS
25 unchanged sentences
Weighted-average common shares outstanding - basic 743.6 740.5 742.5
−Removed: 740.5 742.5 747.2
Plus dilutive effect of equity compensation plans 2
2 unchanged sentences
Stock options and restricted stock units excluded from EPS calculations 3
+Added: 5.8 14.2 20.8
Restricted stock units are considered participating securities due to the Company's practice of paying dividend equivalents on unvested shares.
−Removed: Share amounts for the year ended December 31, 2018 were based on 2,246.3 million DowDuPont common shares outstanding as of the Record Date for the April 1, 2019 distribution, less 4.6 million Employee Stock Ownership Plan ("ESOP") shares that had not been released and were not considered outstanding, adjusted for the Distribution Ratio.
−Removed: There was no dilutive effect for the year ended December 31, 2018 as the Company did not engage in activities giving rise to dilution.
The year ended December 31, 2019 reflected a loss from continuing operations, and as such, the basic share count was used for purposes of calculating earnings per share on a diluted basis.
These outstanding options to purchase shares of common stock and restricted stock units were excluded from the calculation of diluted earnings per share because the effect of including them would have been antidilutive.
−Removed: For the year ended December 31, 2018, the Company did not engage in activities giving rise to dilution.
NOTE 10 – INVENTORIES
21 unchanged sentences
Construction in progress — 1,538 1,604
−Removed: — 1,604 1,986
Total property $ 57,604 $ 56,325
−Removed: The decrease is primarily related to the Company proactively reducing capital spending in 2020 to focus on cash and maintaining financial strength during the COVID-19 pandemic.
In millions 2021 2020 2019
2 unchanged sentences
NOTE 12 – NONCONSOLIDATED AFFILIATES
−Removed: The Company’s investments in companies accounted for using the equity method (“nonconsolidated affiliates”) and dividends received from nonconsolidated affiliates are shown in the following tables:
+Added: The Company’s investments in companies accounted for using the equity method (“nonconsolidated affiliates”), by classification in the consolidated balance sheets, and dividends received from nonconsolidated affiliates are shown in the following tables:
Investments in Nonconsolidated Affiliates at Dec 31 2021 1
2 unchanged sentences
Net investment in nonconsolidated affiliates $ 2,045 $ 1,158
−Removed: The carrying amount of the Company’s investments in nonconsolidated affiliates at December 31, 2020, was $ 55 million less than its share of the investees’ net assets, ($ 51 million less at December 31, 2019), exclusive of additional differences relating to Sadara, EQUATE Petrochemical Company K.S.C.C.
+Added: The carrying amount of the Company’s investments in nonconsolidated affiliates at December 31, 2021 and 2020 was $ 55 million less than its share of the investees’ net assets, exclusive of additional differences relating to Sadara, EQUATE Petrochemical Company K.S.C.C.
("EQUATE") and AgroFresh Solutions Inc.
2 unchanged sentences
Dividends from nonconsolidated affiliates 1
+Added: $ 324 $ 425 $ 1,020
+Added: Included in "Earnings of nonconsolidated affiliates less than (in excess of) dividends received" in the consolidated statements of cash flows.
Except for AFSI, the nonconsolidated affiliates in which the Company has investments are privately held companies;
2 unchanged sentences
The Company has a 35 percent equity interest in this joint venture and has been, and continues to be, responsible for marketing the majority of Sadara’s products through the Company’s established sales channels.
+Added: In 2021, Dow and the Saudi Arabian Oil Company agreed to and began transitioning the marketing rights and responsibilities for Sadara’s finished products to levels more consistent with each partner’s equity ownership.
The Company’s investment in Sadara was $ 1,541 million less than Dow’s proportionate share of the carrying value of the underlying net assets held by Sadara at December 31, 2021 ($ 1,618 million less at December 31, 2020).
This basis difference is primarily attributed to the long-lived assets of Sadara and is being amortized over the remaining useful lives of the assets.
−Removed: At December 31, 2020, the Company had a negative investment balance in Sadara of $ 22 million ( zero at December 31, 2019) classified as “Other noncurrent obligations” in the Company’s consolidated balance sheets, related to the Company’s share of Sadara’s AOCL in 2020 offset by the basis difference amortization.
−Removed: The Company expects to continue to recognize its share of potential future losses reported by Sadara.
+Added: At December 31, 2021, the Company had an investment balance in Sadara of $ 416 million included in “Investment in nonconsolidated affiliates” (negative $ 22 million at December 31, 2020 included in “Other noncurrent obligations”) in the Company’s consolidated balance sheets.
See Note 16 for additional information related to guarantees.
10 unchanged sentences
In addition, the Company reserved certain accounts and notes receivable and accrued interest balances associated with Sadara due to uncertainty around the timing of collection.
−Removed: In total, the Company recorded a $ 1,755 million pretax charge in the fourth quarter of 2019 related to Sadara, included in “Restructuring, goodwill impairment and asset related charges - net” in the consolidated statements of income and related to Packaging & Specialty Plastics ($ 370 million), Industrial Intermediates & Infrastructure ($ 1,168 million) and Corporate ($ 217 million).
+Added: In total, the Company recorded a $ 1,755 million pretax charge in the fourth quarter of 2019 related to Sadara, included in “Restructuring, goodwill impairment and asset related charges - net” in the consolidated statements of
+Added: income and related to Packaging & Specialty Plastics ($ 370 million), Industrial Intermediates & Infrastructure ($ 1,168 million) and Corporate ($ 217 million).
In 2020, the Company loaned $ 333 million to Sadara that was accounted for as in substance common stock and classified as "Investment in nonconsolidated affiliates" in the Company's consolidated balance sheets.
The Company loaned $ 473 million to Sadara and converted $ 380 million of the notes and accounts receivable into equity during 2019.
−Removed: In 2018, the Company converted $ 382 million of outstanding notes and accounts receivable with Sadara into equity, primarily due to a shareholder loan reduction agreement with Sadara.
At December 31, 2021 and 2020, the Company's note receivable with Sadara was zero .
−Removed: The Company had a negative investment balance in EQUATE of $ 147 million at December 31, 2020 (negative $ 80 million at December 31, 2019), classified as "Other noncurrent obligations" in the consolidated balance sheets.
+Added: At December 31, 2021, the Company had an investment balance in EQUATE of $ 115 million included in “Investment in nonconsolidated affiliates” (negative $ 147 million at December 31, 2020 included in "Other noncurrent obligations") in the consolidated balance sheets.
The Company's investment in EQUATE was $ 458 million less than the Company's proportionate share of EQUATE's underlying net assets at December 31, 2021 ($ 475 million less at December 31, 2020), which represents the difference between the fair values of certain MEGlobal assets acquired by EQUATE and the Company's related valuation on a U.S.
A basis difference of $ 140 million at December 31, 2021 ($ 155 million at December 31, 2020) is being amortized over the remaining useful lives of the assets and the remainder is considered a permanent difference.
−Removed: At December 31, 2020, the Company had an investment in AFSI of zero ($ 35 million at December 31, 2019), classified as "Investment in nonconsolidated affiliates" in the consolidated balance sheets.
+Added: At December 31, 2021 and 2020, the Company had an investment balance in AFSI of zero .
At December 31, 2021, the Company's investment in AFSI was $ 96 million less than the Company's proportionate share of AFSI's underlying net assets ($ 108 million less at December 31, 2020).
This amount primarily relates to an other-than-temporary decline in the Company's investment in AFSI.
−Removed: At December 31, 2020, the Company held a 40 percent ownership interest in AFSI ( 41 percent at December 31, 2019).
+Added: At December 31, 2021 and 2020, the Company held a 40 percent ownership interest in AFSI.
Transactions with Nonconsolidated Affiliates
5 unchanged sentences
Sales of these products to MEGlobal represented 1 percent of total net sales in 2021, 2020 and 2019.
−Removed: Sales of ethylene to MEGlobal are reflected in the Packaging & Specialty Plastics segment and represented 2 percent of the segment's sales in 2020 ( 1 percent in 2019 and 2018).
−Removed: Sales of ethylene glycol to MEGlobal are reflected in the Industrial Intermediates & Infrastructure segment and represented 1 percent of the segment's sales in 2020 ( 1 percent in 2019 and 2 percent in 2018).
+Added: Sales of ethylene to MEGlobal are reflected in the Packaging & Specialty Plastics segment and represented 2 percent of the segment's sales in 2021 ( 2 percent in 2020 and 1 percent in 2019).
+Added: Sales of ethylene glycol to MEGlobal are reflected in the Industrial Intermediates & Infrastructure segment and represented 1 percent of the segment's sales in 2021, 2020 and 2019.
The Company is responsible for marketing the majority of Sadara products outside of the Middle East zone through the Company’s established sales channels.
Under this arrangement, the Company purchases and sells Sadara products for a marketing fee.
−Removed: Purchases of Sadara products represented 8 percent of "Cost of sales" in 2020 ( 8 percent in 2019 and 9 percent in 2018).
+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.
+Added: Purchases of Sadara products represented 9 percent of "Cost of sales" in 2021 ( 8 percent in 2020 and 2019).
The Company purchases products from The SCG-Dow Group, primarily for marketing and distribution in Asia Pacific.
−Removed: Purchases of products from The SCG-Dow Group represented 3 percent of "Cost of sales" in 2020 ( 2 percent in 2019 and 2018).
+Added: Purchases of products from The SCG-Dow Group represented 3 percent of "Cost of sales" in 2021 ( 3 percent in 2020 and 2 percent in 2019).
Sales to and purchases from other nonconsolidated affiliates were not material to the consolidated financial statements.
23 unchanged sentences
The Company's effective ownership of Map Ta Phut Olefins Company Limited ("Map Ta Phut") is 32.77 percent, of which the Company directly owns 20.27 percent and indirectly owns 12.5 percent through its equity interest in Siam Polyethylene Company Limited.
−Removed: The Company’s investment in and equity earnings from its principal nonconsolidated affiliates are shown in the tables below:
+Added: The Company’s investment in and equity earnings from its principal nonconsolidated affiliates are as follows:
Investment in Principal Nonconsolidated Affiliates at Dec 31 2021 2020
18 unchanged sentences
Income (loss) from continuing operations, net of tax $ 2,013 $ ( 461 ) $ ( 277 )
−Removed: The results in this table reflect purchase and sale activity between certain principal nonconsolidated affiliates and the Company, as previously discussed in the "Transactions with Nonconsolidated Affiliates" section.
+Added: The results in this table include purchase and sale activity between certain principal nonconsolidated affiliates and the Company, as previously discussed in the "Transactions with Nonconsolidated Affiliates" section.
NOTE 13 – GOODWILL AND OTHER INTANGIBLE ASSETS
3 unchanged sentences
Foreign currency impact 12 4 106 122
−Removed: Goodwill Impairment — — ( 1,039 ) ( 1,039 )
−Removed: Other — ( 1 ) — ( 1 )
−Removed: Balance at Dec 31, 2019 $ 5,109 $ 1,100 $ 2,587 $ 8,796
−Removed: Foreign currency impact 12 4 106 122
Sale of rail infrastructure ( 2 ) — — ( 2 )
1 unchanged sentence
Balance at Dec 31, 2020 $ 5,115 $ 1,100 $ 2,693 $ 8,908
+Added: Foreign currency impact ( 10 ) ( 4 ) ( 130 ) ( 144 )
+Added: Balance at Dec 31, 2021 $ 5,105 $ 1,096 $ 2,563 $ 8,764
The separation from DowDuPont did not impact the composition of the Company's six reporting units:
6 unchanged sentences
The Company performs an impairment test of goodwill annually in the fourth quarter.
−Removed: In 2020, the Company performed qualitative assessments for all reporting units that carried goodwill.
−Removed: Based on the results of the qualitative assessments, the Company performed quantitative testing for one reporting unit ( two in 2019 and one in 2018).
−Removed: The qualitative assessments on the remaining reporting units indicated that it was not more likely than not that fair value was less than the carrying value for those reporting units.
−Removed: The quantitative testing conducted in 2020 and 2018 concluded that no goodwill impairments existed.
+Added: In 2021, the Company performed qualitative testing for all reporting units that carried goodwill.
+Added: Based on the results of the qualitative testing, the Company did not perform quantitative testing on any reporting units ( one in 2020 and two in 2019).
+Added: The qualitative testing on the reporting units indicated that it was not more likely than not that fair value was less than the carrying value for the reporting units.
+Added: The quantitative testing conducted in 2020 concluded that no goodwill impairments existed.
Upon completion of the quantitative testing in the fourth quarter of 2019, the Company determined the C&PM reporting unit was impaired.
39 unchanged sentences
There were no receivables sold under the Programs during the years ended December 31, 2021 and 2020.
−Removed: Accounts Receivable Securitization Facilities
−Removed: The Company historically sold trade accounts receivable of select North American entities and qualifying trade accounts receivable of select European entities on a revolving basis to certain multi-seller commercial paper conduit entities ("conduits").
−Removed: The proceeds received were comprised of cash and interests in specified assets of the conduits (the receivables sold by the Company) that entitled the Company to the residual cash flows of such specified assets in the conduits after the commercial paper had been repaid.
−Removed: Neither the conduits nor the investors in those entities had recourse to other assets of the Company in the event of nonpayment by the debtors.
−Removed: In the fourth quarter of 2017, the Company suspended further sales of trade accounts receivable through these facilities and began reducing outstanding balances through collections of trade accounts receivable previously sold to such conduits.
−Removed: In 2018, the Company recognized a loss of $ 7 million on the sale of these receivables, which is included in “Interest expense and amortization of debt discount” in the consolidated statements of income.
−Removed: The Company's interests in the conduits were reflected in "Investing Activities" in the consolidated statements of cash flows and were $ 657 million in 2018.
−Removed: In September and October 2018, the North American and European facilities, respectively, were amended and the terms of the agreements changed from off-balance sheet arrangements to secured borrowing arrangements.
−Removed: In November 2019 and July 2020, the North American and European facilities, respectively, were amended and are no longer secured borrowing arrangements.
−Removed: These facilities were not drawn upon during the period they were secured borrowing arrangements.
−Removed: See Note 15 for additional information on the secured borrowing arrangements.
NOTE 15 – NOTES PAYABLE, LONG-TERM DEBT AND AVAILABLE CREDIT FACILITIES
1 unchanged sentence
In millions 2021 2020
−Removed: Commercial paper $ — $ 151
Notes payable to banks and other lenders $ 161 $ 156
−Removed: Total notes payable $ 156 $ 586
Year-end average interest rates 5.78 % 3.89 %
6 unchanged sentences
Final maturity 2025 5.63 % 333 5.13 % 625
−Removed: 3.43 % 1,017 3.37 % 1,397
Final maturity 2026 3.63 % 750 3.63 % 750
2 unchanged sentences
Other facilities:
−Removed: dollar loans — % — 2.55 % 2,000
Foreign currency notes and loans, various rates and maturities 1.17 % 2,730 1.41 % 3,189
11 unchanged sentences
2021 Activity
+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: As a result of the redemptions, the Company recognized a pretax loss of $ 101 million on the early extinguishment of debt, included in "Sundry income (expense) - net" in the consolidated statements of income and related to Corporate.
+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: As a result, the Company recognized a pretax loss of $ 472 million on the early extinguishment of debt, included in "Sundry income (expense) – net" in the consolidated statements of income and related to Corporate.
+Added: In addition, the Company voluntarily repaid $ 81 million of long-term debt due within one year.
+Added: In 2021, the Company issued an aggregate principal amount of $ 109 million of InterNotes®, and redeemed an aggregate principal amount of $ 31 million at maturity.
+Added: In addition, the Company voluntarily repaid an aggregate principal amount of $ 213 million of InterNotes® with various maturities.
+Added: As a result, the Company recognized a pretax loss of $ 1 million on the early extinguishment of debt, included in "Sundry income (expense) - net" in the consolidated statements of income and related to Corporate.
+Added: Additionally, the Company repaid $ 259 million of long-term debt at maturity and approximately $ 25 million of long-term debt was repaid by consolidated variable interest entities.
+Added: 2020 Activity
In February 2020, the Company issued € 2.25 billion aggregate principal amount of notes (“Euro Notes”).
15 unchanged sentences
Additionally, the Company repaid $ 134 million of long-term debt at maturity and approximately $ 29 million of long-term debt was repaid by consolidated variable interest entities.
−Removed: Subsequent Event
−Removed: On January 15, 2021, the Company announced a call for $ 118 million of InterNotes® with various maturities, which will settle on February 15, 2021.
2019 Activity
11 unchanged sentences
The Exchange Offers were with respect to the Company’s 3.15 percent notes due 2024, 4.55 percent notes due 2025, 3.625 percent notes due 2026, 4.80 percent notes due 2028, 5.55 percent notes due 2048 and 4.80 percent notes due 2049, and fulfilled the Company’s obligations contained in the registration rights agreements entered into in connection with the issuance of the aforementioned notes.
−Removed: 2018 Activity
−Removed: In 2018, the Company redeemed $ 333 million of 5.70 percent notes at maturity and an aggregate principal amount of $ 91 million of InterNotes® at maturity.
−Removed: In addition, approximately $ 138 million of long-term debt was repaid by consolidated variable interest entities.
−Removed: The Company also called an aggregate principal amount of $ 343 million tax-exempt bonds of various interest rates and maturities in 2029, 2033 and 2038.
−Removed: As a result of these redemptions, the Company recognized a pretax loss of $ 6 million on the early extinguishment of debt, included in “Sundry income (expense) - net” in the consolidated statements of income and related to Corporate.
−Removed: In November 2018, the Company issued $ 2 billion of senior unsecured notes in an offering under Rule 144A of the Securities Act of 1933.
−Removed: The offering included $ 900 million aggregate principal amount of 5.55 percent notes due
−Removed: $ 600 million aggregate principal amount of 4.80 percent notes due 2028;
−Removed: and $ 500 million aggregate principal amount of 4.55 percent notes due 2025.
−Removed: In December 2018, the Company tendered and redeemed $ 2.1 billion of 8.55 percent notes issued by the Company with maturity in 2019.
−Removed: As a result, the Company recognized a pretax loss of $ 48 million on the early extinguishment of debt, included in "Sundry income (expense) - net" in the consolidated statements of income and related to Corporate.
Available Credit Facilities
2 unchanged sentences
In millions Committed Credit Credit Available Maturity Date Interest
−Removed: Five Year Competitive Advance and Revolving Credit Facility $ 5,000 $ 5,000 October 2024 Floating rate
−Removed: Bilateral Revolving Credit Facility 200 200 November 2021 Floating rate
−Removed: Bilateral Revolving Credit Facility 300 300 December 2021 Floating rate
−Removed: Bilateral Revolving Credit Facility 300 300 December 2021 Floating rate
+Added: Five Year Competitive Advance and Revolving Credit Facility $ 5,000 $ 5,000 November 2026 Floating rate
Bilateral Revolving Credit Facility 150 150 March 2022 Floating rate
1 unchanged sentence
Bilateral Revolving Credit Facility 200 200 September 2022 Floating rate
+Added: Bilateral Revolving Credit Facility 200 200 November 2022 Floating rate
Bilateral Revolving Credit Facility 200 200 September 2023 Floating rate
1 unchanged sentence
Bilateral Revolving Credit Facility 300 300 September 2023 Floating rate
−Removed: Bilateral Revolving Credit Facility 100 100 October 2024 Floating rate
+Added: Bilateral Revolving Credit Facility 300 300 December 2023 Floating rate
+Added: Bilateral Revolving Credit Facility 300 300 December 2023 Floating rate
Bilateral Revolving Credit Facility 100 100 October 2024 Floating rate
3 unchanged sentences
Bilateral Revolving Credit Facility 350 350 March 2025 Floating rate
+Added: Bilateral Revolving Credit Facility 100 100 October 2026 Floating rate
Total Committed and Available Credit Facilities $ 8,100 $ 8,100
−Removed: Secured Borrowings
−Removed: In September 2018, the Company renewed its North American accounts receivable securitization facility for a one year term and amended the terms of the agreement from an off-balance sheet arrangement to a secured borrowing arrangement, with a borrowing capacity up to $ 800 million.
−Removed: Under the structure of the amended agreement, the Company had the option to use select trade accounts receivable to collateralize the credit facility with certain lenders.
−Removed: In November 2019, the facility was amended and is no longer a secured borrowing arrangement.
−Removed: It was not drawn upon during its term as a secured borrowing arrangement.
−Removed: In October 2018, the Company renewed its European accounts receivable securitization facility for a two year term and amended the terms of the agreement from an off-balance sheet arrangement to a secured borrowing arrangement, with a borrowing capacity up to € 400 million.
−Removed: Under the structure of the amended agreement, the Company had the option to use select trade accounts receivable to collateralize the credit facility with certain lenders.
−Removed: In July 2020, the facility was amended and is no longer a secured borrowing arrangement.
−Removed: It was not drawn upon during its term as a secured borrowing arrangement.
−Removed: See Note 14 for additional information related to the accounts receivable programs.
Letters of Credit
1 unchanged sentence
While the terms and amounts of letters of credit change, the Company 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 a guarantee of the Company’s share of one future debt service schedule payment for Sadara.
−Removed: See Note 16 for additional information related to guarantees.
Debt Covenants and Default Provisions
8 unchanged sentences
Significant other restrictive covenants and default provisions related to these agreements include:
−Removed: (a) the obligation to maintain the ratio of TDCC’s consolidated indebtedness to consolidated capitalization at no greater than 0.65 to 1.00 at any time the aggregate outstanding amount of loans under the Five Year Competitive Advance and Revolving Credit Facility Agreement ("Revolving Credit Agreement") dated October 30, 2018, equals or exceeds $ 500 million,
+Added: (a) the obligation to maintain the ratio of TDCC’s consolidated indebtedness to consolidated capitalization at no greater than 0.70 to 1.00 at any time the aggregate outstanding amount of loans under the Five Year Competitive Advance and Revolving Credit Facility Agreement ("Revolving Credit Agreement") dated November 23, 2021, equals or exceeds $ 500 million,
(b) a default if TDCC or an applicable subsidiary fails to make any payment, including principal, premium or interest, under the applicable agreement on other indebtedness of, or guaranteed by, TDCC or such applicable subsidiary in an aggregate amount of $ 100 million or more when due, or any other default or other event under the applicable agreement with respect to such indebtedness occurs which permits or results in the acceleration of $ 400 million or more in the aggregate of principal, and
11 unchanged sentences
No such events have occurred or have been triggered at the time of the filing of this Annual Report on Form 10-K.
−Removed: NOTE 16 – COMMITMENTS AND CONTINGENT LIABILITIES
+Added: NOTE 16 – COMMITMENTS AND CONTINGENCIES
Environmental Matters
Accruals for environmental matters are recorded when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated based on current law and existing technologies.
−Removed: At December 31, 2020, the Company had accrued obligations of $ 1,244 million for probable environmental remediation and restoration costs, including $ 248 million for the remediation of Superfund sites.
−Removed: These obligations are included in "Accrued and other current liabilities" and "Other noncurrent obligations" in the consolidated balance sheets.
−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: At December 31, 2021, the Company had accrued obligations of $ 1,220 million for probable environmental remediation and restoration costs ($ 1,244 million at December 31, 2020), including $ 237 million for the remediation of Superfund sites ($ 248 million at December 31, 2020).
+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.
2 unchanged sentences
As new or additional information becomes available and/or certain spending trends become known, management will evaluate such information in determination of the current estimate of the environmental liability.
−Removed: At December 31, 2019, the Company had accrued obligations of $ 1,155 million for probable environmental remediation and restoration costs, including $ 207 million for the remediation of Superfund sites.
As part of the Company's 2020 Restructuring Program, in the third quarter of 2020, the Company recorded a pretax charge related to environmental remediation matters.
30 unchanged sentences
In January 2015, the Company and the EPA entered into an order to address remediation of the Floodplain.
−Removed: The remedial work is expected to continue over the next two years.
+Added: The remedial work is expected to continue over the next two years as river levels allow.
The remainder of the Saginaw River and the Saginaw Bay are designated as a second Operable Unit and the work associated with that unit may also be geographically segmented.
17 unchanged sentences
The consent decree further requires the Company to complete 13 additional environmental restoration projects which are valued by the trustees at approximately $ 77 million, to be conducted over the next several years.
+Added: In 2021, the Company, working with the trustees, advanced the design plans for several of the Company required environmental restoration projects with implementation in progress for one of the projects.
At December 31, 2021, the accrual for these off-site matters was $ 104 million (included in the total accrued obligation of $ 1,220 million).
16 unchanged sentences
Each October, Union Carbide requests Ankura to review its historical asbestos claim and resolution activity through the third quarter of the current year, including asbestos-related defense and processing costs, to determine the appropriateness of updating the most recent study.
−Removed: In December 2018, Ankura completed a study of Union Carbide's historical asbestos claim and resolution activity through September 30, 2018, including asbestos-related defense and processing costs, and provided estimates for the undiscounted cost of disposing of pending and future claims against Union Carbide and Amchem through the terminal year of 2049.
−Removed: Based on the study and Union Carbide's internal review process, it was determined that no adjustment to the accrual was required.
In December 2019, Ankura stated that an update of its December 2018 study would not provide a more likely estimate of future events than the estimate reflected in the study and, therefore, the estimate in the study remained applicable.
Based on Union Carbide's internal review process and Ankura's response, Union Carbide determined that no change to the accrual was required.
−Removed: At December 31, 2019, the asbestos-related liability for pending and future claims against Union Carbide and Amchem, including future asbestos-related defense and processing costs, was $ 1,165 million, and approximately 18 percent of the recorded liability related to pending claims and approximately 82 percent related to future claims.
In December 2020, Ankura completed a study of Union Carbide's historical asbestos claim and resolution activity through September 30, 2020, including asbestos-related defense and processing costs, and provided estimates for the undiscounted cost of disposing of pending and future claims against Union Carbide and Amchem through the terminal year of 2049.
1 unchanged sentence
At December 31, 2020, the asbestos-related liability for pending and future claims against Union Carbide and Amchem, including future asbestos-related defense and processing costs, was $ 1,098 million, and approximately 22 percent of the recorded liability related to pending claims and approximately 78 percent related to future claims.
+Added: In December 2021, Ankura stated that an update of its December 2020 study would not provide a more likely estimate of future events than the estimate reflected in the study and, therefore, the estimate in the study remained applicable.
+Added: Based on Union Carbide's internal review process and Ankura's response, Union Carbide determined that no change to the accrual was required.
+Added: At December 31, 2021, the asbestos-related liability for pending and future claims against Union Carbide and Amchem, including future asbestos-related defense and processing costs, was $ 1,016 million, and approximately 25 percent of the recorded liability related to pending claims and approximately 75 percent related to future claims.
The Company's management believes the amounts recorded by Union Carbide for the asbestos-related liability, including defense and processing costs, reflect reasonable and probable estimates of the liability based upon current, known facts.
12 unchanged sentences
Product liability claimants rejecting the settlement program in favor of pursuing litigation must bring suit against a litigation facility (the “Litigation Facility”).
−Removed: Under the Plan, total payments committed by Dow Silicones to resolving product liability claims are capped at a maximum $ 2,350 million net present value (“NPV”) determined as of the Effective Date using a discount rate of seven percent (approximately $ 4,081 million undiscounted at December 31, 2020).
+Added: Under the Plan, total payments committed by Dow Silicones to resolving product liability claims are capped at a maximum $ 2,350 million net present value (“NPV”) determined as of the Effective Date using a discount rate of 7 percent (approximately $ 4,081 million undiscounted at December 31, 2021).
Of this amount, no more than $ 400 million NPV determined as of the Effective Date can be used to fund the Litigation Facility.
Dow Silicones had an obligation to fund the Settlement Facility and the Litigation Facility over a 16-year period, commencing at the Effective Date.
−Removed: At December 31, 2020, Dow Silicones and its insurers have made life-to-date payments of $ 1,762 million to the Settlement Facility and the Settlement Facility reported an unexpended balance of $ 58 million.
+Added: At December 31, 2021, Dow Silicones and its insurers have made life-to-date payments of $ 1,792 million to the Settlement Facility and Dow Silicones is currently making payments to fund the Settlement Facility.
In accordance with ASC Topic 450 "Accounting for Contingencies," the Company records a liability for breast implant and other product liability claims (“Implant Liability”), which reflects the estimated impact of the settlement of pending claims.
1 unchanged sentence
All claims have been received and are being processed.
−Removed: Based on the claims filed at and before the deadline, Dow Silicones estimates that it will be obligated to contribute an additional $ 160 million after the Settlement Facility balance is exhausted.
+Added: Based on the claims filed at and before the deadline, Dow Silicones estimates that it will be obligated to contribute an additional $ 130 million to the Settlement Facility at December 31, 2021 ($ 160 million at December 31, 2020) which was included in “Accrued and other current liabilities” and "Other noncurrent obligations" in the consolidated balance sheets.
In the third quarter of 2019, with the assistance of a third party consultant ("Consultant"), Dow Silicones updated its Implant Liability estimate, primarily reflecting a decrease in Class 16 claims, a decrease resulting from the passage of time, decreased claim filing activity and administrative costs compared with the previous estimate, and an increase in investment income resulting from insurance proceeds.
2 unchanged sentences
The estimate was updated again in the second quarter of 2020 with the assistance of the Consultant, which primarily reflected decreased administrative costs compared with the previous estimate and an increase in investment income resulting from insurance proceeds.
−Removed: Dow Silicones' Implant Liability was $ 160 million at December 31, 2020 ($ 165 million at December 31, 2019), of which $ 46 million ($ 20 million at December 31, 2019) was included in “Accrued and other current liabilities” and $ 114 million ($ 145 million at December 31, 2019) was included in "Other noncurrent obligations" in the consolidated balance sheets.
Dow Silicones is not aware of circumstances that would change the factors used in estimating the Implant Liability and believes the recorded liability reflects the best estimate of the remaining funding obligations under the Plan;
26 unchanged sentences
Indemnified losses are capped at $ 1 billion between May 31, 2018 and May 31, 2023, and no recoveries are permitted after May 31, 2023.
−Removed: The Company had indemnification assets of $ 115 million at December 31, 2020 ($ 100 million at December 31, 2019), of which zero ($ 37 million at December 31, 2019) was included in "Other current assets" and $ 115 million ($ 63 million at December 31, 2019) was included in "Noncurrent receivables" in the consolidated balance sheets.
+Added: The Company had indemnification assets of $ 95 million at December 31, 2021 ($ 115 million at December 31, 2020), which was included in "Other current assets" and "Noncurrent receivables" in the consolidated balance sheets.
Gain Contingency - Dow v.
14 unchanged sentences
In November 2020, Nova filed an application for leave to appeal this decision to the Court.
−Removed: Briefing is expected to be completed in early 2021 and the Company anticipates a decision in the first half of 2021 as to whether the Court will accept the appeal.
−Removed: The Court has complete discretion on whether to grant leave applications.
−Removed: At December 31, 2020, the Company had $ 341 million ( zero at December 31, 2019) included in "Accrued and other current liabilities" and zero ($ 341 million at December 31, 2019) included in "Other noncurrent obligations" related to the disputed portion of the damages judgment.
−Removed: The Company is confident of its chances to continue to defend the entire judgment if the Court agrees to review it, particularly the trial and appellate courts' determinations on important factual issues, which will be accorded deferential review on appeal.
+Added: In May 2021, the Court granted Nova's application for leave and agreed to review the damages judgment.
+Added: The Court will hear oral argument on the matter in the first half of 2022 and the Company expects a decision by the end of 2022.
+Added: The Company is confident of its chances to continue to defend the entire judgment, particularly the trial and appellate courts' determinations on important factual issues, which will be accorded deferential review on appeal.
+Added: At December 31, 2021, the Company had $ 341 million ($ 341 million at December 31, 2020) included in "Accrued and other current liabilities" related to the disputed portion of the damages judgment.
Gain Contingency - Dow v.
17 unchanged sentences
Dow continues to seek an award of additional damages for the period from 2013 through 2018.
+Added: The damages hearing began in the trial court in November 2021 that would resolve the impact of the appellate ruling and quantify Dow's damages for the 2013-2018 period.
+Added: Luxi Chemical Group Breach of Contract Matter
+Added: In November 2017, an arbitration panel of the Stockholm Chamber of Commerce held that Luxi Chemical Group Co., Ltd.
+Added: (“Luxi”), based in Shandong Province, China, violated a secrecy and non-use agreement related to the Dow and Johnson Matthey Davy Technologies Limited (“JM”) LP Oxo SM Process by using Dow and JM protected information in the design, construction, and operation of its butanol and 2-ethylhexanol plants, awarding damages, fees and costs, plus interest, to both Dow and JM.
+Added: In September 2021, Luxi paid the arbitration award and interest assessment and, as a result, Dow recorded a pretax gain of $ 54 million included in “Sundry income (expense) – net” in the consolidated statements of income and related to Industrial Intermediates & Infrastructure.
+Added: Brazilian Tax Credits
+Added: In March 2017, the Federal Supreme Court of Brazil (“Brazil Supreme Court”) ruled in a leading case that a Brazilian value-added tax ("ICMS") should not be included in the base used to calculate a taxpayer's federal contribution on total revenue known as PIS/COFINS (the “2017 Decision”).
+Added: Previously, three of the Company’s Brazilian subsidiaries filed lawsuits challenging the inclusion of ICMS in their calculation of PIS/COFINS, seeking recovery of excess taxes paid.
+Added: In response to the 2017 Decision, the Brazilian tax authority filed an appeal seeking clarification of the amount of ICMS tax to exclude from the calculation of PIS/COFINS.
+Added: In May 2021, the Brazil Supreme Court ruled in a leading case related to the amount of ICMS tax to exclude from the calculation of PIS/COFINS, which resolved two of the lawsuits filed by the Company.
+Added: As a result, in 2021, the Company recorded a pretax gain of $ 67 million for certain excess PIS/COFINS paid from 2009 to 2019, plus applicable interest, which the Company expects to apply to future required federal tax payments, and the reversal of related liabilities.
+Added: The pretax gain was recorded in “Cost of sales” in the consolidated statements of income.
+Added: At December 31, 2021, related tax credits available and expected to be applied to future required federal tax payments totaled $ 52 million.
+Added: The Company has not received a final ruling related to its remaining lawsuit.
Purchase Commitments
4 unchanged sentences
In millions Final
−Removed: Expiration Maximum Future Payments Recorded Liability Final
+Added: Expiration Maximum Future Payments 1
+Added: Recorded Liability Final
Expiration Maximum Future Payments Recorded Liability
Guarantees 2038 $ 1,273 $ 220 2023 $ 251 $ 2
+Added: In addition, TDCC has provided guarantees, in proportion to the Company's 35 percent ownership interest, of all future interest payments that will become due on Sadara’s project financing debt during the grace period, which Dow's share is estimated to be $ 446 million at December 31, 2021.
+Added: Based on Sadara's current forecasted cash flows, the Company does not expect to be required to perform under the guarantees.
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 (via delivery of cash or other assets) if specified triggering events occur.
With guarantees, such as commercial or financial contracts, non-performance by the guaranteed party triggers the obligation of the Company to make payments to the beneficiary of the guarantee.
−Removed: The majority of the Company’s guarantees relate to debt of nonconsolidated affiliates, which have expiration dates ranging from less than one year to less than three years.
+Added: The majority of the Company’s guarantees relate to debt of nonconsolidated affiliates, which have expiration dates ranging from less than one year to less than 17 years.
The Company’s current expectation is that future payment or performance related to the non-performance of others is considered remote.
−Removed: The Company has entered into guarantee agreements related to Sadara, a nonconsolidated affiliate.
−Removed: The total of an Islamic bond and additional project financing (collectively “Total Project Financing”) obtained by Sadara was approximately $ 12.5 billion.
−Removed: Sadara had $ 10.8 billion of Total Project Financing debt outstanding at December 31, 2019.
+Added: TDCC has entered into guarantee agreements related to Sadara, a nonconsolidated affiliate.
+Added: The total of an Islamic bond and additional project financing (collectively “Total Project Financing”) obtained by Sadara was approximately $ 12.5 billion, of which $ 9.6 billion of Total Project Financing debt was outstanding at December 31, 2021 ($ 9.9 billion at December 31, 2020).
In November 2020, the remaining project completion conditions related to the Total Project Financing guarantees were fulfilled and the Company's guarantee obligations terminated.
Subsequently, the Company provided a new guarantee in the form of a letter of credit for its share of one future debt service schedule payment up to $ 220 million.
−Removed: The guarantee is in proportion to the Company’s 35 percent ownership interest in Sadara and is expected to remain in effect until the re-profiling of Sadara’s debt is completed which is expected in the first quarter of 2021.
+Added: The guarantee was in proportion to the Company’s 35 percent ownership interest in Sadara and was in effect until Sadara reached an agreement with its lenders to re-profile its outstanding project financing debt in the first quarter of 2021, at which time it was cancelled.
+Added: In conjunction with the completion of Sadara's debt re-profiling, TDCC entered into a new guarantee of up to approximately $ 1.3 billion of Sadara’s debt, proportionate to the Company's 35 percent ownership interest.
+Added: The debt re-profiling includes a grace period until June 2026, during which Sadara is obligated to make interest-only payments which are guaranteed by TDCC in proportion to the Company's 35 percent ownership interest.
+Added: In addition, as part of the debt re-profiling, Sadara established a new $ 500 million revolving credit facility guaranteed by Dow, which will be used to fund Dow’s pro-rata share of any potential shortfall during the grace period.
+Added: Based on Sadara's current forecasted cash flows,
+Added: the Company does not expect Sadara to draw on the facility.
+Added: As a result of these actions, TDCC does not expect to provide any shareholder loans or equity contributions to Sadara in 2022.
See Note 12 for additional information.
−Removed: In January 2021, Sadara reached an agreement in principle with its lenders to re-profile Sadara's outstanding project financing debt.
−Removed: In conjunction with completion of the Sadara debt re-profiling, the Company expects to guarantee approximately $ 1.3 billion of Sadara’s debt.
−Removed: The debt re-profiling is expected to include a grace period until June 2026, during which Sadara is obligated to make interest-only payments.
−Removed: Dow will also 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 during the grace period will be funded by a new $ 500 million revolving credit facility guaranteed by Dow,
−Removed: 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 upon completion of the full re-profiling of Sadara's debt.
−Removed: All guarantees related to the debt re-profile and revolving credit facility are in proportion to Dow’s 35 percent ownership interest in Sadara.
−Removed: As a result of these actions, the Company does not expect to provide any shareholder loans or equity contributions to Sadara in 2021.
Asset Retirement Obligations
14 unchanged sentences
The Company has recognized asset retirement obligations for the following activities:
−Removed: demolition and remediation activities at manufacturing sites primarily in Europe, United States, Japan, United Arab Emirates, Canada and Argentina;
+Added: demolition and remediation activities at manufacturing sites primarily in Europe, Canada, United States, Japan, United Arab Emirates and Brazil;
and capping activities at landfill sites in the United States, Brazil and Canada.
−Removed: The Company has also recognized conditional asset retirement obligations related to asbestos encapsulation as a result of planned demolition and remediation activities at manufacturing and administrative sites primarily in the United States, Europe, Argentina and Japan.
+Added: The Company has also recognized conditional asset retirement obligations related to asbestos encapsulation as a result of planned demolition and remediation activities at manufacturing and administrative sites primarily in the United States, Europe, Japan and Argentina.
The aggregate carrying amount of conditional asset retirement obligations recognized by the Company (included in the asset retirement obligations balance shown below) was $ 13 million at December 31, 2021 ($ 14 million at December 31, 2020).
13 unchanged sentences
Therefore, without a plan to demolish the assets or the expectation of a plan, such as shortening the useful life of assets for depreciation purposes in accordance with the accounting guidance related to property, plant and equipment, the Company is unable to reasonably forecast a time frame to use for present value calculations.
−Removed: As such, the Company has not recognized obligations for individual plants/buildings at its manufacturing sites where
−Removed: estimates of potential settlement dates cannot be reasonably made.
+Added: As such, the Company has not recognized obligations for individual plants/buildings at its manufacturing sites where estimates of potential settlement dates cannot be reasonably made.
In addition, the Company has not recognized conditional asset retirement obligations for the capping of its approximately 36 underground storage wells and 128 underground brine mining and other wells at Company-owned sites when there are no plans or expectations of plans to exit the sites.
18 unchanged sentences
Total lease cost $ 1,210 $ 974 $ 994
−Removed: The following table provides supplemental cash flow information related to leases:
+Added: The following table provides supplemental cash flow and other information related to leases:
Other Lease Information 2021 2020 2019
3 unchanged sentences
Financing cash flows for finance leases $ 74 $ 58 $ 34
−Removed: The following table summarizes the lease-related assets and liabilities recorded in the consolidated balance sheets at December 31, 2020 and 2019.
−Removed: Lease Position Balance Sheet Classification Dec 31, 2020 Dec 31, 2019
Right-of-use assets obtained in exchange for lease obligations:
2 unchanged sentences
Finance leases 1
+Added: $ 512 $ 178 $ 89
+Added: In 2021, $ 193 million of leased assets were reclassified from Operating leases to Finance leases due to an amendment that extended the term of the agreement.
+Added: 2019 includes $ 2.3 billion related to the adoption of Topic 842.
+Added: See Note 1 for additional information.
+Added: The following table summarizes the lease-related assets and liabilities recorded in the consolidated balance sheets at December 31, 2021 and 2020.
+Added: Lease Position Balance Sheet Classification Dec 31, 2021 Dec 31, 2020
Operating lease assets Operating lease right-of-use assets $ 1,412 $ 1,856
7 unchanged sentences
Total lease liabilities $ 2,332 $ 2,455
−Removed: Includes $ 2.3 billion for the period ended December 31, 2019 related to the adoption of Topic 842.
−Removed: See Note 1 for additional information.
+Added: In 2021, the Company executed buy-outs of certain leased assets for $ 687 million.
+Added: The lease buy-outs reduced “Operating lease right-of-use assets” by $ 166 million and reduced “Operating lease liabilities - current” and “Operating lease liabilities - noncurrent” by $ 44 million and $ 158 million, respectively.
+Added: The Company recognized a pretax loss related to the lease buy-outs of $ 37 million included in “Sundry income (expense) - net” in the consolidated statements of income.
+Added: The lease buy-outs are included in “Purchases of previously leased assets” in the consolidated statements of cash flows.
+Added: Additionally, in 2021, the Company amended an agreement to extend leases of certain assets.
+Added: The amendment and related remeasurement resulted in a reclassification of $ 73 million from “Operating lease liabilities – noncurrent” to “Long-Term Debt” and $ 34 million from “Operating lease liabilities - current” to “Long-term debt due within one year." In addition to the reclassifications, the amendment increased “Long-Term Debt” by $ 152 million and decreased “Long-term debt due within one year" by $ 2 million.
The weighted-average remaining lease term and discount rate for leases recorded in the consolidated balance sheets at December 31, 2021 and 2020 are provided below:
13 unchanged sentences
Total present value of lease liabilities $ 1,463 $ 869
−Removed: At December 31, 2020, Dow had additional leases of approximately $ 56 million, primarily for buildings and equipment, which had not yet commenced.
+Added: At December 31, 2021, Dow had additional leases of approximately $ 113 million, primarily for equipment, which had not yet commenced.
These leases are expected to commence in 2022 and 2025, with lease terms of up to 16 years.
1 unchanged sentence
The following table provides a summary of the final expiration, maximum future payments and recorded liability reflected in the consolidated balance sheets for residual value guarantees at December 31, 2021 and 2020.
−Removed: There was $ 22 million of recorded liability related to these residual value guarantees at December 31, 2020 ( zero at December 31, 2019), as payment of such residual value guarantees was determined to be probable.
The lease agreements do not contain any material restrictive covenants.
9 unchanged sentences
The Company may issue shares of Dow Inc.
−Removed: common stock out of treasury stock or as new shares of common stock for options exercised and for the release of restricted stock units ("RSUs"), performance stock units ("PSUs") and restricted stock.
−Removed: Common stock shares issued to employees and non-employee directors was approximately 4.8 million in 2020.
+Added: common stock out of treasury stock or as new shares of common stock for options exercised and for the release of restricted stock units ("RSUs"), performance stock units ("PSUs") and the Employee Stock Purchase Plan ("ESPP") program.
+Added: Common stock shares issued to employees and non-employee directors was approximately 8.2 million in 2021 ( 4.8 million in 2020).
Subsequent to the separation from DowDuPont, the number of new Dow Inc.
6 unchanged sentences
There are no significant restrictions limiting Dow Inc.’s ability to pay dividends.
−Removed: declared dividends of $ 2.80 per share in 2020 ($ 2.10 per share in 2019, subsequent to the separation from DowDuPont).
+Added: declared dividends of $ 2.80 per share in 2021 ($ 2.80 per share in 2020 and $ 2.10 per share in 2019, subsequent to the separation from DowDuPont).
Undistributed earnings of nonconsolidated affiliates included in retained earnings were $ 1,155 million at December 31, 2021 and $ 716 million at December 31, 2020.
3 unchanged sentences
and TDCC's Board determines whether or not there will be a dividend distribution to Dow Inc.
−Removed: In 2020 and 2019, TDCC declared and paid dividends to Dow Inc.
−Removed: of $ 2,233 million and $ 201 million, respectively.
−Removed: In 2019 and 2018, TDCC declared and paid dividends to DowDuPont of $ 535 million and $ 3,711 million, respectively.
+Added: TDCC declared and paid dividends to Dow Inc.
+Added: of $ 3,264 million in 2021, $ 2,233 million in 2020 and $ 201 million in 2019.
+Added: In 2019, TDCC declared and paid dividends to DowDuPont of $ 535 million.
Employee Stock Ownership Plan
8 unchanged sentences
In connection with the acquisition of Rohm and Haas on April 1, 2009, the Rohm and Haas Employee Stock Ownership Plan (the "Rohm and Haas ESOP") was merged into the Savings Plan, and the Company assumed the $ 78 million balance of debt at 9.8 percent interest with final maturity in 2020 that was used to finance share purchases by the Rohm and Haas ESOP in 1990.
−Removed: The debt was fully repaid in 2020 which resulted in an outstanding balance of zero at December 31, 2020 ($ 3 million at December 31, 2019).
+Added: The debt was fully repaid in 2020 which resulted in an outstanding balance of zero at December 31, 2020.
Dividends on unallocated shares held by the ESOP are used by the ESOP to make debt service payments and to purchase additional shares if dividends exceed the debt service payments.
10 unchanged sentences
In 2021, Dow Inc.
−Removed: repurchased $ 125 million of Dow Inc.
−Removed: common stock ($ 500 million in 2019).
+Added: repurchased $ 1.0 billion of Dow Inc.
+Added: common stock ($ 125 million in 2020 and $ 500 million in 2019).
At December 31, 2021, $ 1.4 billion of the share repurchase program authorization remained available for repurchases.
The Company may issue shares of Dow Inc.
−Removed: common stock out of treasury stock or as new shares of common stock for options exercised and for the release of RSUs, PSUs and restricted stock.
+Added: common stock out of treasury stock or as new shares of common stock for options exercised and for the release of RSUs, PSUs and ESPP.
The Company did not issue any treasury shares to employees and non-employee directors under its stock-based compensation programs for the years ended December 31, 2021, 2020 and 2019.
9 unchanged sentences
Repurchased — 3,073,469
+Added: Balance at Jan 1, 2021 755,993,198 12,803,303
+Added: Repurchased — 16,208,270
Balance at Dec 31, 2021 764,226,882 29,011,573
13 unchanged sentences
Other comprehensive income (loss), net of tax ( 45 ) 40 115
−Removed: Reclassification of stranded tax effects 3
Ending balance $ 59 $ 104 $ 64
8 unchanged sentences
Impact of common control transaction 4
−Removed: Reclassification of stranded tax effects 3
Ending balance $ ( 1,355 ) $ ( 930 ) $ ( 1,135 )
4 unchanged sentences
Net gains (losses) arising during the period 1,630 ( 1,358 ) ( 1,286 )
−Removed: Amortization and recognition of net loss and prior service credits 6
+Added: Amortization of net loss and prior service credits reclassified from AOCL to net income 5
Tax expense (benefit) 2
3 unchanged sentences
Impact of common control transaction 4
−Removed: Reclassification of stranded tax effects 3
Ending balance $ ( 7,334 ) $ ( 9,559 ) $ ( 8,781 )
9 unchanged sentences
Other comprehensive income (loss), net of tax 123 ( 76 ) ( 338 )
−Removed: Reclassification of stranded tax effects 3
Ending balance $ ( 347 ) $ ( 470 ) $ ( 394 )
2 unchanged sentences
Reclassified to "Provision for income taxes on continuing operations."
−Removed: Amounts reclassified to "Retained earnings" as a result of the adoption of ASU 2018-02.
Reclassified to "Sundry income (expense) - net."
19 unchanged sentences
Balance at Dec 31 $ 574 $ 570 $ 553
−Removed: Distributions to noncontrolling interests are net of $ 7 million in 2020 ($ 7 million in 2019 and $ 27 million in 2018) in dividends paid to a joint venture, which were reclassified to "Equity in earnings (losses) of nonconsolidated affiliates" in the consolidated statements of income.
−Removed: Also includes amounts attributable to discontinued operations of $ 7 million in 2019 and $ 37 million in 2018.
+Added: Distributions to noncontrolling interests are net of $ 7 million in 2021 ($ 7 million in 2020 and 2019) in dividends paid to a joint venture, which were reclassified to "Equity in earnings (losses) of nonconsolidated affiliates" in the consolidated statements of income.
+Added: Also includes amounts attributable to discontinued operations of $ 7 million in 2019.
Related to the separation from DowDuPont.
4 unchanged sentences
Related to the divestiture of the Company's interest in a cogeneration facility in Brazil in the third quarter of 2020.
−Removed: See Note 24 for additional information.
NOTE 20 – PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS
1 unchanged sentence
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: qualified plan covering the parent company is the largest plan.
+Added: tax-qualified plan covering the parent company is the largest plan.
Benefits for employees hired before January 1, 2008, are based on length of service and the employee’s three highest consecutive years of compensation.
Employees hired after January 1, 2008, earn benefits that are based on a set percentage of annual pay, plus interest.
+Added: On March 4, 2021, the Company announced changes to its U.S.
+Added: tax-qualified and non-qualified pension plans.
+Added: Effective December 31, 2023 ("Effective Date"), the Company will freeze the pensionable compensation and credited service amounts used to calculate pension benefits for employees who participate in its U.S.
+Added: tax-qualified and non-qualified retirement programs (collectively, the "U.S.
+Added: As a result, at the Effective Date and subject to any bargaining obligations required by law, active participants of the U.S.
+Added: Plans will not accrue additional benefits for future service and compensation.
+Added: In connection with these plan amendments, the Company remeasured its U.S.
+Added: Plans effective February 28, 2021, which resulted in a pretax actuarial gain of $ 1,268 million, included in other comprehensive income and inclusive of a $ 345 million reduction in the projected benefit obligation resulting from the plan amendments, and a pretax curtailment gain of $ 19 million, recognized in the first quarter of 2021.
The Company's funding policy is to contribute to the plans when pension laws and/or economics either require or encourage funding.
−Removed: In 2020, the Company contributed $ 299 million to its pension plans, including contributions to fund benefit payments for the Company's unfunded pension plans.
+Added: On March 4, 2021, the Company elected to contribute $ 1 billion to its U.S.
+Added: tax-qualified pension plans.
+Added: Total global pension contributions were $ 1,219 million in 2021, which includes contributions necessary to fund benefit payments for the Company's unfunded pension plans.
The Company expects to contribute approximately $ 180 million to its pension plans in 2022.
1 unchanged sentence
Weighted-Average Assumptions for All Pension Plans Benefit Obligations
−Removed: at Dec 31 Net Periodic Costs
+Added: at Dec 31 Net Periodic Benefit Costs
for the Year Ended
8 unchanged sentences
Pension Plans Benefit Obligations
−Removed: at Dec 31 Net Periodic Costs
+Added: at Dec 31 Net Periodic Benefit Costs
for the Year Ended
21 unchanged sentences
Other Postretirement Benefits Plans Benefit Obligations
−Removed: at Dec 31 Net Periodic Costs
+Added: at Dec 31 Net Periodic Benefit Costs
for the Year Ended
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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 Company utilizes a modified version of the Society of Actuaries’ mortality tables released in 2014 and a modified version of the generational mortality improvement scale released in 2018 for purposes of measuring the U.S.
−Removed: pension and other postretirement obligations, based on an evaluation of the mortality experience of the Company’s pension plans.
−Removed: Separation from DowDuPont
−Removed: As a result of the Company’s separation from DowDuPont in 2019, 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.
+Added: The Company’s mortality assumption used for the US plans is a benefit-weighted version of the Society of Actuaries’ RP-2014 base table with future rates of mortality improvement based on a modified version of the assumptions used in the Social Security Administration’s 2021 trustees report.
Summarized information on the Company's pension and other postretirement benefit plans is as follows:
3 unchanged sentences
Benefit obligations at beginning of year $ 35,309 $ 32,621 $ 1,464 $ 1,535
−Removed: Impact of plans transferred to DowDuPont at separation — ( 331 ) — —
Service cost 387 399 7 7
12 unchanged sentences
Fair value of plan assets at beginning of year $ 26,406 $ 24,908 $ — $ —
−Removed: Impact of plans transferred to DowDuPont at separation — ( 61 ) — —
Actual return on plan assets 2,501 2,877 — —
22 unchanged sentences
through the purchase of annuity contracts from an insurance company.
−Removed: The 2019 impact includes the divestiture of a business with pension benefit obligations of $ 53 million.
+Added: The 2021 impact primarily relates to the freeze of pensionable compensation and credited service amounts for employees that participate in the U.S.
The 2020 impact relates to pension plan curtailments of a European plan resulting from the 2020 Restructuring Program and the settlement of certain plan obligations of a U.S.
non-qualified pension plan resulting from lump-sum payments.
−Removed: The 2019 impact relates to plan curtailments and associated special termination benefits resulting from the reduction in plan participation due to the separation from DowDuPont.
The 2020 impact relates to the purchase of annuity contracts associated with the transfer of benefit obligations to an insurance company.
−Removed: A significant component of the overall increase in the Company's benefit obligation for the year ended December 31, 2020 was due to the change in weighted-average discount rates, which decreased from 2.81 percent at December 31, 2019 to 2.20 percent at December 31, 2020.
+Added: A significant component of the overall decrease in the Company's benefit obligation for the year ended December 31, 2021 was due to the change in weighted-average discount rates, which increased from 2.20 percent at December 31, 2020 to 2.57 percent at December 31, 2021.
A significant component of the overall increase in the Company's benefit obligation for the year ended December 31, 2020 was due to the change in weighted-average discount rates, which decreased from 2.81 percent at December 31, 2019 to 2.20 percent at December 31, 2020.
30 unchanged sentences
Total recognized in net periodic benefit cost and other comprehensive (income) loss $ ( 2,721 ) $ 1,269 $ 1,132 $ ( 68 ) $ 55 $ 202
+Added: The 2021 impact primarily relates to the freeze of pensionable compensation and credited service amounts for employees that participate in the U.S.
The 2020 impact relates to pension plan curtailments of a European plan resulting from the 2020 Restructuring Program and the settlement of certain plan obligations of a U.S.
1 unchanged sentence
The 2019 impact relates to plan curtailments and associated special termination benefits resulting from the reduction in plan participation due to the separation from DowDuPont.
−Removed: The 2019 impact is the result of the separation from DowDuPont.
+Added: The 2019 impact is the result of the Company's separation from DowDuPont.
Except for plan curtailment costs related to the 2020 Restructuring Program, which are included in "Restructuring, goodwill impairment and asset related charges - net" in the consolidated statements of income, non-service cost components of net periodic benefit cost are included in "Sundry income (expense) - net" in the consolidated statements of income.
13 unchanged sentences
Plan assets totaled $ 28.2 billion at December 31, 2021 and $ 26.4 billion at December 31, 2020 and included no directly held common stock of Dow Inc.
−Removed: The Company's investment strategy for the plan assets is to manage the assets in relation to the liability in order to pay retirement benefits to plan participants over the life of the plans.
+Added: The Company's investment strategy for plan assets is to manage the assets in relation to the liability in order to pay retirement benefits to plan participants over the life of the plans.
This is accomplished by identifying and managing the exposure to various market risks, diversifying investments across various asset classes and earning an acceptable long-term rate of return consistent with an acceptable amount of risk, while considering the liquidity needs of the plans.
13 unchanged sentences
plans, which from time to time can represent a significant investment.
−Removed: plan, approximately 31 percent of the liability is covered by a participating group annuity issued by Prudential Insurance Company.
The weighted-average target allocation for plan assets of the Company's pension plans is summarized as follows:
60 unchanged sentences
Purchases, sales and settlements, net ( 19 ) ( 1 ) 5 3 ( 12 )
+Added: Transfers out of Level 3, net 3 1 — — 4
Balance at Dec 31, 2020 $ 10 $ 2 $ 13 $ 2 $ 27
Actual return on assets:
−Removed: Relating to assets sold during 2020 — — ( 11 ) — ( 11 )
Relating to assets held at Dec 31, 2021 1 — ( 11 ) — ( 10 )
Purchases, sales and settlements, net ( 5 ) ( 1 ) 3 ( 2 ) ( 5 )
−Removed: Transfers into Level 3, net 3 1 — — 4
Balance at Dec 31, 2021 $ 6 $ 1 $ 5 $ — $ 12
1 unchanged sentence
employees may participate in defined contribution plans by contributing a portion of their compensation, which is partially matched by the Company.
−Removed: Defined contribution plans also cover employees in some subsidiaries in other countries, including China, Brazil, Canada, Belgium, Spain and the United Kingdom.
+Added: Defined contribution plans also cover employees in some subsidiaries in other countries, including China, Brazil, The Netherlands, Canada, Korea, Spain and the United Kingdom.
Expense of continuing operations recognized for all defined contribution plans was $ 165 million in 2021, $ 156 million in 2020 and $ 163 million in 2019.
+Added: On March 4, 2021, the Company announced changes to its U.S.
+Added: tax-qualified and non-qualified defined contribution plans.
+Added: Effective January 1, 2022, contributions to U.S.
+Added: tax-qualified and non-qualified defined contribution plans will be harmonized across the Company's U.S.
+Added: eligible employee population.
+Added: The new matching contribution will allow all eligible U.S.
+Added: employees to receive matching contributions of up to 5 percent of their eligible compensation.
+Added: In addition, beginning on January 1, 2024, all eligible U.S.
+Added: employees will receive an automatic non-elective contribution of 4 percent of eligible compensation to their respective defined contribution plans.
NOTE 21 – STOCK-BASED COMPENSATION
−Removed: The Company grants stock-based compensation to employees and non-employee directors in the form of stock incentive plans, which include stock options, stock appreciation rights, RSUs and restricted stock.
−Removed: The Company also provides stock-based compensation in the form of PSUs.
+Added: The Company provides stock-based compensation in the form of the Employee Stock Purchase Plan, which grants eligible employees the right to purchase shares of the Company's common stock at a discounted price.
+Added: The Company also grants stock-based compensation to employees and non-employee directors under stock incentive plans, in the form of stock options, stock appreciation rights, PSUs and RSUs.
In connection with the Merger, on August 31, 2017 ("Conversion Date"), all outstanding TDCC stock options and RSU awards were converted into stock options and RSU awards with respect to DowDuPont common stock.
19 unchanged sentences
The fair value of equity and liability instruments is expensed over the vesting period or, in the case of retirement, from the grant date to the date on which retirement eligibility provisions have been met and additional service is no longer required.
−Removed: The Company estimates expected forfeitures.
+Added: The Company estimates expected forfeitures based on historical activity.
The Company uses the Black-Scholes option valuation model to estimate the fair value of stock options.
5 unchanged sentences
Expected life of stock options granted during period (years) 6.25 6.1 6.1
−Removed: The dividend yield assumption was equal to the dividend yield on the grant date, which reflected the Company's quarterly dividend payments of $ 0.70 per share in 2020 on Dow Inc.
−Removed: Common Stock ($ 0.70 per share in 2019 on Dow Inc.
−Removed: Common Stock and $ 0.38 per share in 2018 on DowDuPont Common Stock).
+Added: The dividend yield assumption was equal to the dividend yield on the grant date, which reflected the Company's quarterly dividend payments of $ 0.70 per share in 2021, 2020 and 2019 on Dow Inc.
+Added: Common Stock.
The expected volatility assumptions for the 2021, 2020 and 2019 stock options were based on an equal weighting of the historical daily volatility for the expected term of the awards and current implied volatility from exchange-traded options.
9 unchanged sentences
The Prior Plans were superseded by the 2012 Plan and the 2012 Restated Plan (collectively, the "2012 Plan").
−Removed: Under the 2012 Plan, the Company may grant options, RSUs, PSUs, restricted stock, stock appreciation rights and stock units to employees and non-employee directors until the tenth anniversary of the 2012 Plan Effective Date, subject to an aggregate limit and annual individual limits.
−Removed: The terms of the grants are fixed at the grant date.
+Added: Under the 2012 Plan, the Company granted options, RSUs, PSUs, restricted stock, stock appreciation rights and stock units to employees and non-employee directors, subject to an aggregate limit and annual individual limits.
+Added: The terms of the grants were fixed at the grant date.
TDCC's stock-based compensation programs were assumed by DowDuPont and continued in place with the ability to grant and issue DowDuPont common stock until separation.
6 unchanged sentences
The exercise price of each stock option equals the market price of the common stock on the grant date.
−Removed: Options vest from one to three years and have a maximum term of ten years .
+Added: Options vest from one year to three years and have a maximum term of ten years .
The following table summarizes stock option activity for 2021:
44 unchanged sentences
Includes the fair value of shares vested in prior years and delivered in the reporting year.
−Removed: In 2020, the Company paid $ 4 million in cash, equal to the value of the stock award on the date of delivery, to certain executive employees to settle approximately 85,000 RSUs ( 341,000 RSUs settled in cash for $ 19 million in 2019 and 625,000 RSUs settled in cash for $ 45 million in 2018).
+Added: In 2021, the Company did not settle any RSU's in cash (approximately 85,000 RSUs settled in cash for $ 4 million in 2020 and 341,000 RSUs settled in cash for $ 19 million in 2019).
Total unrecognized compensation cost related to RSU awards of $ 71 million at December 31, 2021 is expected to be recognized over a weighted-average period of 1.64 years.
At December 31, 2021, approximately 1.8 million RSUs with a grant date weighted-average fair value per share of $ 52.92 had previously vested, but were not issued.
−Removed: These shares are scheduled to be issued to employees within six months to three years or upon retirement.
+Added: These shares are scheduled to be issued to employees within six months to three years or to non-employee directors upon retirement.
Performance Stock Units
The Company grants PSUs to certain employees.
−Removed: The grants vest when the Company attains specified performance targets, such as return on capital and relative total shareholder return, over a predetermined period, generally one to three years .
−Removed: In November 2017, the Company granted PSUs to senior leadership measured on the realization of cost savings in connection with cost synergy commitments, as well as the Company’s ability to complete the business separations.
+Added: The grants vest when the Company attains specified performance targets, such as return on capital, cumulative cash from operations and relative total shareholder return, over a predetermined period, generally one year to three years .
Performance and payouts are determined independently for each metric.
6 unchanged sentences
2021 Jan 1, 2021 – Dec 31, 2023 1,223 $ 61.48
−Removed: 2019 Apr 1, 2019 – Dec 31, 2021 1,173 $ 57.58
−Removed: 2017 Sep 1, 2017 – Aug 31, 2019 232 $ 71.16
2020 Jan 1, 2020 – Dec 31, 2022 1,426 $ 48.35
−Removed: At the end of the performance period, the actual number of shares issued can range from zero to 200 percent of target shares granted.
+Added: 2019 Apr 1, 2019 – Dec 31, 2021 1,173 $ 57.58
+Added: At the end of the performance period, the actual number of shares issued can range from zero to 200 percent of target shares granted for the 2019 and 2021 awards and can range from zero to 100 percent of the target shares granted for the 2020 award.
Weighted-average per share.
−Removed: Converted to RSUs as a result of the Merger.
The following table shows changes in nonvested PSUs:
17 unchanged sentences
Total unrecognized compensation cost related to PSU awards of $ 49 million at December 31, 2021, is expected to be recognized over a weighted-average period of 1.66 years.
−Removed: Restricted Stock
−Removed: Under the 2012 Plan, the Company granted shares (including options, stock appreciation rights, stock units and restricted stock) to non-employee directors over the 10-year duration of the program, subject to the plan's aggregate limit as well as annual individual limits.
−Removed: The restricted stock issued under this plan cannot be sold, assigned, pledged or otherwise transferred by the non-employee director, until retirement or termination of service to the Company.
−Removed: In 2018, 36,000 shares of restricted stock with a weighted average fair value of $ 62.82 were issued under this plan.
−Removed: In 2019 and 2020, there were no restricted stock shares issued under this plan.
+Added: Employee Stock Purchase Plan
+Added: The Board unanimously approved the Dow Inc.
+Added: 2021 Employee Stock Purchase Plan (the "2021 ESPP"), which was approved by the Company's stockholders at the 2021 Annual Meeting of Stockholders held on April 15, 2021.
+Added: Under the 2021 ESPP offering, most employees were eligible to purchase shares of common stock of Dow Inc.
+Added: valued at up to 10 percent of their annual total base salary or wages.
+Added: The number of shares purchased was determined using the amount contributed by the employee divided by the plan price.
+Added: The plan price of the stock was equal to 85 percent of the fair market value (closing price) of the common stock at June 1, 2021 (beginning) or December 3, 2021 (ending) of the offering period, whichever was lower.
+Added: In 2021, employees subscribed to the right to purchase approximately 2.3 million shares at a weighted-average price of $ 45.11 per share, under the 2021 ESPP.
+Added: The plan price was fixed upon the close of the offering period.
+Added: The shares were delivered to employees in the fourth quarter of 2021.
+Added: Additional Information about Employee Stock Purchase Plan
+Added: In millions, except per share amounts
+Added: Weighted-average fair value per share of purchase rights granted $ 16.26
+Added: Total compensation expense for ESPP $ 30
+Added: Related tax benefit $ 7
+Added: Total amount of cash received from the exercise of purchase rights $ 103
+Added: Total intrinsic value of purchase rights exercised 1
+Added: Related tax benefit $ 4
+Added: Difference between the market price at exercise and the price paid by the employee to exercise the purchase rights .
NOTE 22 – FINANCIAL INSTRUMENTS
34 unchanged sentences
Equity securities with a readily determinable fair value.
−Removed: Cost includes fair value hedge adjustment gains of $ 69 million at December 31, 2020 and losses of $ 1 million at December 31, 2019 on $ 3,314 million of debt at December 31, 2020 and $ 3,490 million of debt at December 31, 2019.
+Added: Cost includes fair value hedge adjustment gains of $ 47 million at December 31, 2021 and $ 69 million at December 31, 2020 on $ 2,279 million of debt at December 31, 2021 and $ 3,314 million of debt at December 31, 2020.
Presented net of cash collateral where master netting arrangements allow.
39 unchanged sentences
There were no material adjustments to the carrying value of the not readily determinable investments for impairment or observable price changes for the year ended December 31, 2021.
−Removed: The net unrealized gain recognized in earnings on equity securities totaled $ 32 million for the year ended December 31, 2020 ($ 5 million net unrealized gain for the year ended December 31, 2019).
+Added: The net unrealized loss recognized in earnings on equity securities totaled $ 13 million for the year ended December 31, 2021 ($ 32 million net unrealized gain for the year ended December 31, 2020).
Investments in Equity Securities Dec 31, 2021 Dec 31, 2020
4 unchanged sentences
To manage such risks effectively, the Company enters into hedging transactions, pursuant to established guidelines and policies that enable it to mitigate the adverse effects of financial market risk.
−Removed: Derivatives used for this purpose are designated as hedges per
−Removed: the accounting guidance related to derivatives and hedging activities, where appropriate.
+Added: Derivatives used for this purpose are designated as hedges per the accounting guidance related to derivatives and hedging activities, where appropriate.
A secondary objective is to add value by creating additional non-specific exposure within established limits and policies;
68 unchanged sentences
The Company designates derivatives that qualify as effective net foreign investment hedges, the results of which are presented in the effect of derivative instruments table.
−Removed: In addition, the Company utilizes non-derivative instruments as net foreign investment hedges.
+Added: The Company also utilizes non-derivative instruments as net foreign investment hedges.
The Company had outstanding foreign-currency denominated debt designated as a hedge of net foreign investment of $ 174 million at December 31, 2021 ($ 194 million at December 31, 2020).
2 unchanged sentences
In millions Balance Sheet Classification Gross Counterparty and Cash Collateral Netting 1
−Removed: Net Amounts Included in the Consolidated Balance Sheets
+Added: Net Amounts Included in Consolidated Balance Sheets
Asset derivatives
1 unchanged sentence
Interest rate contracts Other current assets $ 14 $ ( 14 ) $ —
+Added: Interest rate contracts Deferred charges and other assets 130 ( 130 ) —
Foreign currency contracts Other current assets 24 ( 13 ) 11
+Added: Foreign currency contracts Deferred charges and other assets 117 ( 89 ) 28
Commodity contracts Other current assets 305 ( 173 ) 132
2 unchanged sentences
Derivatives not designated as hedging instruments
−Removed: Interest rate contracts Deferred charges and other assets $ 41 $ — $ 41
+Added: Interest rate contracts Other current assets $ 1 $ — $ 1
Foreign currency contracts Other current assets 23 ( 16 ) 7
+Added: Foreign currency contracts Deferred charges and other assets 1 ( 1 ) —
Commodity contracts Other current assets 8 ( 5 ) 3
4 unchanged sentences
Interest rate contracts Accrued and other current liabilities $ 33 $ ( 14 ) $ 19
+Added: Interest rate contracts Other noncurrent obligations 192 ( 130 ) 62
Foreign currency contracts Accrued and other current liabilities 15 ( 13 ) 2
+Added: Foreign currency contracts Other noncurrent obligations 90 ( 89 ) 1
Commodity contracts Accrued and other current liabilities 267 ( 192 ) 75
2 unchanged sentences
Derivatives not designated as hedging instruments
−Removed: Interest rate contracts Other noncurrent obligations $ 178 $ — $ 178
+Added: Interest rate contracts Accrued and other current liabilities $ 59 $ — $ 59
Foreign currency contracts Accrued and other current liabilities 31 ( 16 ) 15
+Added: Foreign currency contracts Other noncurrent obligations 1 ( 1 ) —
Commodity contracts Accrued and other current liabilities 25 ( 8 ) 17
4 unchanged sentences
In millions Balance Sheet Classification Gross Counterparty and Cash Collateral Netting 1
−Removed: Net Amounts Included in the Consolidated Balance Sheets
+Added: Net Amounts Included in Consolidated Balance Sheets
Asset derivatives
6 unchanged sentences
Derivatives not designated as hedging instruments
−Removed: Interest rate contracts Other current assets $ 14 $ ( 14 ) $ —
+Added: Interest rate contracts Deferred charges and other assets $ 41 $ — $ 41
Foreign currency contracts Other current assets 74 ( 25 ) 49
5 unchanged sentences
Interest rate contracts Accrued and other current liabilities $ 7 $ ( 3 ) $ 4
−Removed: Interest rate contracts Other noncurrent obligations 1 — 1
Foreign currency contracts Accrued and other current liabilities 93 ( 19 ) 74
3 unchanged sentences
Derivatives not designated as hedging instruments
−Removed: Interest rate contracts Accrued and other current liabilities $ 136 $ ( 14 ) $ 122
Interest rate contracts Other noncurrent obligations $ 178 $ — $ 178
1 unchanged sentence
Commodity contracts Accrued and other current liabilities 9 ( 3 ) 6
−Removed: Commodity contracts Other noncurrent obligations 1 — 1
Total $ 222 $ ( 28 ) $ 194
4 unchanged sentences
The Company posted cash collateral of $ 71 million at December 31, 2021 ($ 7 million at December 31, 2020).
−Removed: No cash collateral was posted by counterparties with the Company at December 31, 2020 ($ 3 million at December 31, 2019).
+Added: No cash collateral was posted by counterparties with the Company at December 31, 2021 and December 31, 2020).
The following table summarizes the gain (loss) of derivative instruments in the consolidated statements of income and comprehensive income for the years ended December 31, 2021, 2020 and 2019:
40 unchanged sentences
Basis of Fair Value Measurements on a Recurring Basis Dec 31, 2021 Dec 31, 2020
−Removed: Level 1 Level 2 Total Level 1 Level 2 Total
+Added: Level 1 Level 2 Level 3 Total Level 1 Level 2 Total
Assets at fair value:
19 unchanged sentences
$ — $ 17,125 $ — $ 17,125 $ — $ 20,604 $ 20,604
+Added: Guarantee liability 7
+Added: — — 220 220 — — —
Derivatives relating to:
11 unchanged sentences
See Note 22 for information on fair value measurements of long-term debt.
+Added: Estimated liability for TDCC's guarantee of Sadara's debt which is included in "Other noncurrent obligations" in the consolidated balance sheets.
+Added: See Note 16 for additional information.
For assets and liabilities classified as Level 1 measurements (measured using quoted prices in active markets), total fair value is either the price of the most recent trade at the time of the market close or the official close price, as defined by the exchange on which the asset is most actively traded on the last trading day of the period, multiplied by the number of units held without consideration of transaction costs.
7 unchanged sentences
There were no transfers between Levels 1 and 2 in the years ended December 31, 2021 and 2020.
−Removed: For assets classified as Level 3 measurements, the fair value is based on significant unobservable inputs including assumptions where there is little, if any, market activity.
−Removed: The fair value of the Company’s interests held in trade accounts receivable conduits is determined by calculating the expected amount of cash to be received using the key input of anticipated credit losses in the portfolio of receivables sold that have not yet been collected.
−Removed: Given the short-term nature of the underlying receivables, discount rate and prepayments are not factors in determining the fair value of the interests.
−Removed: See Note 14 for further information on assets classified as Level 3 measurements.
−Removed: For equity securities calculated at net asset value per share (or its equivalent), the Company had $ 111 million in private equity and $ 19 million in real estate at December 31, 2020 ($ 117 million in private equity and $ 18 million in real estate at December 31, 2019).
−Removed: There are no redemption restrictions and the unfunded commitments on these investments were $ 63 million at December 31, 2020 ($ 76 million at December 31, 2019).
+Added: For liabilities classified as Level 3 measurements, the fair value is based on significant unobservable inputs including assumptions where there is little, if any, market activity.
+Added: The fair value of the Company’s accrued liability related to the guarantee of Sadara's debt is in proportion to the Company's 35 percent ownership interest in Sadara.
+Added: The estimated fair value of the guarantee was calculated using a "with" and "without" method.
+Added: The fair value of the debt was calculated "with" the guarantee less the fair value of the debt "without" the guarantee.
+Added: The "with" and "without" values were calculated using a discounted cash flow method based on contractual cash flows as well as projected prepayments made on the debt by Sadara.
+Added: See Note 16 for further information on guarantees classified as Level 3 measurements.
The following table summarizes the changes in fair value measurements using Level 3 inputs for the year ended December 31, 2021:
−Removed: Fair Value Measurements Using Level 3 Inputs for Interests Held in Trade Accounts Receivable Conduits 2018
+Added: Fair Value Measurements Using Level 3 Inputs for Accrued Liability of Sadara Guarantee
+Added: at Dec 31, 2021
Balance at Jan 1 $ —
−Removed: Gain (loss) included in earnings 1
−Removed: Settlements 2
+Added: Recognition of liability 1
+Added: Gain included in earnings 2
Balance at Dec 31 $ ( 220 )
−Removed: Included in "Selling, general and administrative expenses" in the consolidated statements of income.
−Removed: Includes noncash transactions of $ 23 million for the year ended December 31, 2018.
+Added: Included in "Other noncurrent obligations" in the consolidated balance sheets.
+Added: Included in "Equity in earnings (losses) of nonconsolidated affiliates" in the consolidated income statements.
+Added: For equity securities calculated at net asset value per share (or its equivalent), the Company had $ 106 million in private equity and $ 22 million in real estate at December 31, 2021 ($ 111 million in private equity and $ 19 million in real estate at December 31, 2020).
+Added: There are no redemption restrictions and the unfunded commitments on these investments were $ 59 million at December 31, 2021 ($ 63 million at December 31, 2020).
Fair Value Measurements on a Nonrecurring Basis
6 unchanged sentences
Goodwill $ — $ ( 1,039 )
−Removed: Assets at fair value:
−Removed: Long-lived assets and other assets $ — $ ( 67 )
2021 Fair Value Measurements on a Nonrecurring Basis
+Added: The Company's fair value measurements on a nonrecurring basis were insignificant in 2021.
+Added: 2020 Fair Value Measurements on a Nonrecurring Basis
As part of the 2020 Restructuring Program, the Company has or will shut down and write off several small manufacturing facilities and miscellaneous assets around the world.
1 unchanged sentence
In addition, impairments of leased, non-manufacturing facilities, which were classified as Level 3 measurements, resulted in a write-down of right-of-use assets to a fair value of $ 110 million using unobservable inputs.
−Removed: The impairment charges related to the 2020 Restructuring Program, totaling $ 196 million, were included in "Restructuring, goodwill impairment and asset related charges - net" in the consolidated
−Removed: statements of income and related to Packaging & Specialty Plastics ($ 11 million), Industrial Intermediates & Infrastructure ($ 22 million), Performance Materials & Coatings ($ 116 million) and Corporate ($ 47 million).
+Added: The impairment charges related to the 2020 Restructuring Program, totaling $ 196 million, were included in "Restructuring, goodwill impairment and asset related charges - net" in the consolidated statements of income and related to Packaging & Specialty Plastics ($ 11 million), Industrial Intermediates & Infrastructure ($ 22 million), Performance Materials & Coatings ($ 116 million) and Corporate ($ 47 million).
In 2020, the Company recognized impairment charges of $ 30 million related to the write-down of a non-manufacturing asset and certain corporate leased equipment and the write-off of a capital project.
29 unchanged sentences
See Note 12 for additional information.
−Removed: 2018 Fair Value Measurements on a Nonrecurring Basis
−Removed: The Company has or will shut down a number of manufacturing and other non-manufacturing facilities and corporate facilities around the world as part of its restructuring programs.
−Removed: In 2018, the manufacturing facilities and related assets and corporate facilities associated with these programs were written down to zero.
−Removed: The impairment charges related to the restructuring programs, totaling $ 33 million, were included in "Restructuring, goodwill impairment and asset related charges - net" in the consolidated statements of income and related to Packaging & Specialty Plastics ($ 10 million), Performance Materials & Coatings ($ 7 million) and Corporate ($ 16 million).
−Removed: In 2018, the Company recognized an additional pretax impairment charge of $ 34 million related primarily to capital additions made to Santa Vitoria, which was impaired in 2017.
−Removed: The assets were written down to zero in 2018.
−Removed: The impairment charge was included in “Restructuring, goodwill impairment and asset related charges - net” in the consolidated statements of income and related to the Packaging & Specialty Plastics segment.
See Note 6 for additional information on the Company's restructuring activities.
9 unchanged sentences
The transaction closed on October 1, 2019, for a cash purchase price of $ 331 million.
−Removed: Approximately half of the purchase price was attributed to the Company’s proportionate equity interest in the entity that owned the PO manufacturing joint venture, which is accounted for under the equity method of accounting, and was classified as "Investments in and loans to nonconsolidated affiliates" in the consolidated statements of cash flows.
+Added: Approximately half of the purchase price was attributed to the Company’s proportionate equity interest in the entity that owned the PO manufacturing joint venture, which was accounted for under the equity method of accounting, and was classified as "Investments in and loans to nonconsolidated affiliates" in the consolidated statements of cash flows.
The remaining $ 166 million was classified as "Purchases of noncontrolling interests" in the consolidated statements of cash flows.
4 unchanged sentences
The Company provides the joint venture with operation and maintenance services and utilities.
−Removed: Cogeneration in Brazil
−Removed: The Company held variable interests in a cogeneration facility in Brazil that provided power to the Company's bio-ethanol manufacturing facility.
−Removed: The Company's variable interests were the result of a tolling arrangement where it provided fuel to the entity and purchased a majority of the cogeneration facility’s output on terms that ensured a return to the entity’s equity holders.
−Removed: On September 29, 2020, the Company divested its bio-ethanol manufacturing facility and is no longer a party to the tolling arrangement with the cogeneration facility.
Assets and Liabilities of Consolidated VIEs
35 unchanged sentences
to settle the intercompany loans.
−Removed: In 2020 and 2019, TDCC declared and paid dividends to Dow Inc.
−Removed: of $ 2,233 million and $ 201 million, respectively.
+Added: The following table summarizes cash dividends TDCC declared and paid to Dow Inc.
+Added: for the years ended 2021, 2020 and 2019.
+Added: TDCC Cash Dividends Declared and Paid 2021 2020 2019
+Added: Cash dividends declared and paid $ 3,264 $ 2,233 $ 201
At December 31, 2021 and 2020, TDCC's intercompany loan balance with Dow Inc.
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Pursuant to the Agreement and Plan of Merger, dated as of December 11, 2015, as amended on March 31, 2017, and prior to the separation from DowDuPont, 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.
−Removed: In 2019, TDCC declared and paid dividends to DowDuPont of $ 535 million ($ 3,711 million in 2018).
+Added: In 2019, TDCC declared and paid dividends to DowDuPont of $ 535 million.
Historical DuPont and its Affiliates
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Cost of sales $ 9
−Removed: Purchases from Historical DuPont and its affiliates were insignificant for 2019 and 2018.
+Added: Purchases from Historical DuPont and its affiliates were insignificant for 2019.
NOTE 26 – SEGMENTS AND GEOGRAPHIC REGIONS
−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.
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The Company also allocated costs previously assigned to AgCo and SpecCo ("stranded costs") to the operating segments.
−Removed: Dow’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: Dow’s measure of profit/loss for segment reporting purposes is Operating EBIT (for the years ended December 31, 2021 and 2020) and pro forma Operating EBIT (for the year ended December 31, 2019) as this is the manner in which the Company's chief operating decision maker ("CODM") assesses performance and allocates resources.
The Company defines Operating EBIT as earnings (i.e., "Income (loss) from continuing operations before income taxes") before interest, excluding the impact of significant items.
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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 in this footnote 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 in this footnote as it is included in management's measure of segment performance and is regularly reviewed by the CODM.
Pro forma net sales includes the impact of various manufacturing, supply and service related agreements entered into with DuPont and Corteva in connection with the separation which provide for different pricing than the historical intercompany and intracompany pricing practices of TDCC and Historical DuPont.
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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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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, research and development capabilities and materials science expertise enable the Company to be a premier solutions provider offering customers value-add sustainable solutions to enhance comfort, energy efficiency, product effectiveness and durability across a wide range of home comfort and appliance, building and construction, mobility and transportation, adhesive and lubricant applications, among others.
This segment includes a portion of the Company's share of the results of EQUATE, TKOC, Map Ta Phut and Sadara.
Performance Materials & Coatings
−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.
Corporate includes certain enterprise and governance activities (including insurance operations, environmental operations, etc.);
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Net sales $ 28,128 $ 16,851 $ 9,672 $ 317 $ 54,968
−Removed: Restructuring and asset related charges - net 1
+Added: Restructuring and asset related charges (credits) - net 1
8 1 10 ( 13 ) 6
−Removed: Equity in earnings (losses) of nonconsolidated affiliates 173 ( 166 ) 6 ( 31 ) ( 18 )
+Added: Equity in earnings of nonconsolidated affiliates 490 471 7 7 975
Operating EBIT 2
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Net sales $ 18,301 $ 12,021 $ 7,951 $ 269 $ 38,542
−Removed: Pro forma net sales 20,245 13,449 8,961 343 42,998
−Removed: Restructuring, goodwill impairment and asset related charges - net 1
+Added: Restructuring and asset related charges - net 1
30 22 192 464 708
Equity in earnings (losses) of nonconsolidated affiliates 173 ( 166 ) 6 ( 31 ) ( 18 )
−Removed: Pro forma Operating EBIT 3
+Added: Operating EBIT 2
2,325 355 314 ( 279 ) 2,715
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Total assets 29,522 11,753 14,059 5,190 60,524
−Removed: 30,279 14,092 16,050 3,378 63,799
Investments in nonconsolidated affiliates 675 568 101 60 1,404
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See Note 6 for information regarding the Company's restructuring programs, goodwill impairment and other asset related charges.
−Removed: Operating EBIT for TDCC in 2020 is substantially the same as that of Dow Inc.
+Added: Operating EBIT for TDCC in 2021 and 2020 is substantially the same as that of Dow Inc.
and therefore is not disclosed separately in the table above.
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Pro forma Operating EBIT for TDCC in 2019 is substantially the same as that of Dow Inc.
−Removed: (same for 2018) and therefore is not disclosed separately in the table above.
+Added: and therefore is not disclosed separately in the table above.
A reconciliation of "Income (loss) from continuing operations, net of tax" to pro forma Operating EBIT is provided on the following page.
−Removed: Excludes assets of discontinued operations of $ 19,900 million.
Reconciliation of "Income from continuing operations, net of tax" to Operating EBIT 2021 2020
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Pro forma adjustments include:
−Removed: (1) the margin impact of various manufacturing, supply and service related agreements entered into with DuPont and Corteva in connection with the separation which provide for different pricing than the historical intercompany and intracompany pricing practices of TDCC and Historical DuPont (included for 2019 and 2018 only), (2) the removal of the amortization of ECP's inventory step-up recognized in connection with the Merger and (3) the elimination of the impact of events directly attributable to the Merger, internal reorganization and business realignment, separation, distribution and other related transactions (e.g., one-time transaction costs).
+Added: (1) the margin impact of various manufacturing, supply and service related agreements entered into with DuPont and Corteva in connection with the separation which provide for different pricing than the historical intercompany and intracompany pricing practices of TDCC and Historical DuPont, (2) the removal of the amortization of ECP's inventory step-up recognized in connection with the Merger and (3) the elimination of the impact of events directly attributable to the Merger, internal reorganization and business realignment, separation, distribution and other related transactions (e.g., one-time transaction costs).
The following tables summarize the pretax impact of significant items by segment that are excluded from Operating EBIT and pro forma Operating EBIT:
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Materials & Coatings Corp.
+Added: Digitalization program costs 1
+Added: $ — $ — $ — $ ( 169 ) $ ( 169 )
+Added: Restructuring, implementation costs and asset related charges - net 2
+Added: ( 8 ) ( 1 ) ( 10 ) ( 50 ) ( 69 )
+Added: Loss on early extinguishment of debt 3
+Added: — — — ( 574 ) ( 574 )
+Added: Net gain on divestitures and asset sale 4
+Added: Litigation related charges, awards and adjustments 5
+Added: Indemnification and other transaction related costs 6
+Added: Total $ 8 $ 53 $ ( 10 ) $ ( 763 ) $ ( 712 )
+Added: Includes costs associated with implementing the Company's digital acceleration program.
+Added: Includes Board approved restructuring plans, including costs associated with implementing the Company's 2020 Restructuring Program, and asset-related charges, which include other asset impairments.
+Added: See Note 6 for additional information.
+Added: The Company redeemed outstanding long-term debt resulting in a loss on early extinguishment.
+Added: See Note 15 for additional information.
+Added: Includes post-closing adjustments on a previous divestiture.
+Added: Related to an arbitration award received from Luxi Chemical Group Co., Ltd.
+Added: See Note 16 for additional information.
+Added: Primarily related to charges associated with agreements entered into with DuPont and Corteva as part of the separation and distribution which, among other matters, provides for cross-indemnities and allocations of obligations and liabilities for periods prior to, at and after the completion of the separation.
+Added: See Note 3 for additional information.
+Added: Significant Items by Segment for 2020 Pack.
+Added: Plastics Ind.
+Added: Materials & Coatings Corp.
Integration and separation costs 1
$ — $ — $ — $ ( 239 ) $ ( 239 )
−Removed: Restructuring and asset related charges - net 2
+Added: Restructuring, implementation costs and asset related charges - net 2
( 30 ) ( 22 ) ( 192 ) ( 474 ) ( 718 )
Warranty accrual adjustment of exited business 3
−Removed: Restructuring implementation costs 4
−Removed: — — — ( 10 ) ( 10 )
Net gain on divestitures and asset sale 4
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Costs related to business separation activities.
−Removed: Includes Board approved restructuring plans and asset-related charges, which include other asset impairments.
+Added: Includes Board approved restructuring plans, including costs associated with implementing the Company's 2020 Restructuring Program, and asset-related charges, which include other asset impairments.
See Note 6 for additional information.
Includes an adjustment to the warranty accrual of an exited business.
−Removed: Includes costs associated with implementing the Company's 2020 Restructuring Program.
Primarily related to a gain on the sale of rail infrastructure in the U.S.
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Primarily related to charges associated with agreements entered into with DuPont and Corteva as part of the separation and distribution which, among other matters, provides for cross-indemnities and allocations of obligations and liabilities for periods prior to, at and after the completion of the separation.
+Added: See Note 3 for additional information.
Significant Items by Segment for 2019 Pack.
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Includes charges primarily associated with agreements entered into with DuPont and Corteva as part of the separation and distribution which, among other matters, provides for cross-indemnities and allocations of obligations and liabilities for periods prior to, at and after the completion of the separation.
−Removed: Significant Items by Segment for 2018 Pack.
−Removed: Plastics Ind.
−Removed: Materials & Coatings Corp.
−Removed: Impact of Dow Silicones ownership restructure 1
−Removed: $ — $ — $ ( 20 ) $ — $ ( 20 )
−Removed: Integration and separation costs 2
−Removed: — — — ( 1,074 ) ( 1,074 )
−Removed: Restructuring and asset related charges - net 3
−Removed: ( 46 ) ( 11 ) ( 21 ) ( 120 ) ( 198 )
−Removed: Gain on divestiture 4
−Removed: Loss on early extinguishment of debt 5
−Removed: — — — ( 54 ) ( 54 )
−Removed: Total $ ( 46 ) $ 9 $ ( 41 ) $ ( 1,248 ) $ ( 1,326 )
−Removed: Includes a loss related to a post-closing adjustment related to the Dow Silicones ownership restructure.
−Removed: Costs related to post-Merger integration and separation and distribution activities, and costs related to the Dow Silicones ownership restructure.
−Removed: Includes Board approved restructuring plans and asset-related charges, which include other asset impairments.
−Removed: See Note 6 for additional information.
−Removed: Includes a gain related to the Company's sale of its equity interest in MEGlobal.
−Removed: The Company retired outstanding notes payable resulting in a loss on early extinguishment.
−Removed: See Note 15 for additional information.
−Removed: NOTE 27 - SELECTED QUARTERLY FINANCIAL DATA
−Removed: In millions, except per share amounts (Unaudited) 1st 2nd 3rd 4th Year
−Removed: Net sales $ 9,770 $ 8,354 $ 9,712 $ 10,706 $ 38,542
−Removed: Cost of sales $ 8,230 $ 7,610 $ 8,371 $ 9,135 $ 33,346
−Removed: Gross margin $ 1,540 $ 744 $ 1,341 $ 1,571 $ 5,196
−Removed: Restructuring and asset related charges (credits) - net 1
−Removed: $ 96 $ 6 $ 617 $ ( 11 ) $ 708
−Removed: Integration and separation costs 2
−Removed: $ 65 $ 46 $ 63 $ 65 $ 239
−Removed: Net income (loss) 3
−Removed: $ 258 $ ( 217 ) $ ( 1 ) $ 1,254 $ 1,294
−Removed: Net income (loss) attributable to Dow Inc.
−Removed: $ 239 $ ( 225 ) $ ( 25 ) $ 1,236 $ 1,225
−Removed: Earnings (loss) per common share from continuing operations - basic 4
−Removed: $ 0.32 $ ( 0.31 ) $ ( 0.04 ) $ 1.66 $ 1.64
−Removed: Earnings (loss) per common share from continuing operations - diluted 4
−Removed: $ 0.32 $ ( 0.31 ) $ ( 0.04 ) $ 1.65 $ 1.64
−Removed: Dividends declared per share of common stock $ 0.70 $ 0.70 $ 0.70 $ 0.70 $ 2.80
−Removed: Market price range of common stock:
−Removed: High $ 53.75 $ 45.90 $ 51.07 $ 57.73 $ 57.73
−Removed: Low $ 22.00 $ 27.04 $ 39.44 $ 45.18 $ 22.00
−Removed: Net sales $ 9,770 $ 8,354 $ 9,712 $ 10,706 $ 38,542
−Removed: Cost of sales $ 8,230 $ 7,608 $ 8,371 $ 9,134 $ 33,343
−Removed: Gross margin $ 1,540 $ 746 $ 1,341 $ 1,572 $ 5,199
−Removed: Restructuring and asset related charges (credits) - net 1
−Removed: $ 96 $ 6 $ 617 $ ( 11 ) $ 708
−Removed: Integration and separation costs 2
−Removed: $ 65 $ 46 $ 63 $ 65 $ 239
−Removed: Net income (loss) 3
−Removed: $ 258 $ ( 217 ) $ ( 1 ) $ 1,264 $ 1,304
−Removed: Net income (loss) attributable to The Dow Chemical Company $ 239 $ ( 225 ) $ ( 25 ) $ 1,246 $ 1,235
−Removed: See Note 6 for additional information.
−Removed: See Note 3 for additional information.
−Removed: See Notes 5, 7, 15 and 16 for information on additional items materially impacting "Net income (loss)." The fourth quarter of 2020 includes a gain related to the sale of marine and terminal operations and assets and a gain associated with a legal matter with Nova.
−Removed: The third quarter of 2020 includes a gain related to the sale of rail infrastructure operations and assets and a loss on the early extinguishment of debt.
−Removed: The first quarter of 2020 includes a loss on the early extinguishment of debt.
−Removed: Earnings per common share amounts relate only to Dow Inc.
−Removed: as TDCC common shares are not publicly traded and are all owned by Dow Inc.
−Removed: Due to quarterly changes in the share count and the allocation of income to participating securities, the sum of the four quarters does not equal the earnings per share amount calculated for the year.
−Removed: In millions, except per share amounts (Unaudited) 1st 2nd 3rd 4th Year
−Removed: Net sales $ 10,969 $ 11,014 $ 10,764 $ 10,204 $ 42,951
−Removed: Cost of sales $ 9,142 $ 9,420 $ 9,377 $ 8,718 $ 36,657
−Removed: Gross margin $ 1,827 $ 1,594 $ 1,387 $ 1,486 $ 6,294
−Removed: Restructuring, goodwill impairment and asset related charges - net 1
−Removed: $ 156 $ 65 $ 147 $ 2,851 $ 3,219
−Removed: Integration and separation costs 2
−Removed: $ 452 $ 348 $ 164 $ 99 $ 1,063
−Removed: Income (loss) from continuing operations, net of tax $ 156 $ 90 $ 347 $ ( 2,310 ) $ ( 1,717 )
−Removed: Income from discontinued operations net of tax $ 445 $ — $ — $ — $ 445
−Removed: Net income (loss) 3
−Removed: $ 601 $ 90 $ 347 $ ( 2,310 ) $ ( 1,272 )
−Removed: Net income (loss) attributable to Dow Inc.
−Removed: $ 556 $ 75 $ 333 $ ( 2,323 ) $ ( 1,359 )
−Removed: Earnings (loss) per common share from continuing operations - basic 4
−Removed: $ 0.16 $ 0.10 $ 0.45 $ ( 3.14 ) $ ( 2.42 )
−Removed: Earnings (loss) per common share from continuing operations - diluted 4
−Removed: $ 0.16 $ 0.10 $ 0.45 $ ( 3.14 ) $ ( 2.42 )
−Removed: Dividends declared per share of common stock 5
−Removed: N/A $ 0.70 $ 0.70 $ 0.70 $ 2.10
−Removed: Market price range of common stock:
−Removed: N/A $ 59.71 $ 52.79 $ 55.99 $ 59.71
−Removed: N/A $ 46.76 $ 40.71 $ 43.85 $ 40.71
−Removed: Net sales $ 10,969 $ 11,014 $ 10,764 $ 10,204 $ 42,951
−Removed: Cost of sales $ 9,142 $ 9,419 $ 9,377 $ 8,719 $ 36,657
−Removed: Gross margin $ 1,827 $ 1,595 $ 1,387 $ 1,485 $ 6,294
−Removed: Restructuring, goodwill impairment and asset related charges - net 1
−Removed: $ 156 $ 65 $ 147 $ 2,851 $ 3,219
−Removed: Integration and separation costs 2
−Removed: $ 452 $ 324 $ 164 $ 99 $ 1,039
−Removed: Income (loss) from continuing operations, net of tax $ 156 $ 217 $ 324 $ ( 2,292 ) $ ( 1,595 )
−Removed: Income from discontinued operations net of tax $ 445 $ — $ — $ — $ 445
−Removed: Net income (loss) 3
−Removed: $ 601 $ 217 $ 324 $ ( 2,292 ) $ ( 1,150 )
−Removed: Net income (loss) attributable to The Dow Chemical Company $ 556 $ 202 $ 310 $ ( 2,305 ) $ ( 1,237 )
−Removed: See Note 6 for additional information.
−Removed: See Note 3 for additional information.
−Removed: See Notes 3, 8, 15 and 16 for information on additional items materially impacting "Net income (loss)." The fourth quarter of 2019 included a gain related to the effects of Swiss tax reform and a loss on the early extinguishment of debt.
−Removed: The third quarter of 2019 included a charge related to environmental remediation, a charge related to the settlement of the Commercial Creditor matters, a gain related to an adjustment to the Implant Liability and a gain associated with a legal matter with Nova.
−Removed: The second quarter of 2019 included charges associated with agreements entered into with DuPont and Corteva as part of the separation from DowDuPont.
−Removed: Earnings per common share amounts relate only to Dow Inc.
−Removed: as TDCC common shares are not publicly traded and are all owned by Dow Inc.
−Removed: Due to quarterly changes in the share count and the allocation of income to participating securities, the sum of the four quarters does not equal the earnings per share amount calculated for the year.
−Removed: Dow Inc.'s common stock was solely owned by DowDuPont through March 31, 2019, and on April 1, 2019, Dow Inc.
−Removed: became an independent, publicly traded company.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
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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.