TIDMDOW
Dow Reports Second Quarter Results
Dow Generates Higher Cash Flow Despite Lower Revenue In
Challenging Global Economic Conditions; Sales Decline Led by
Europe, with a More Than $400 Million Impact Due to Currency
The Dow Chemical Company (NYSE: DOW):
Second Quarter 2012 Highlights
-- Dow reported earnings of $0.55 per share. This compares with earnings
of $0.84 per share in the same quarter last year, or adjusted
earnings
of $0.85 per share(1).
-- Sales were $14.5 billion, down 10 percent, or 6 percent on an adjusted
sales(2) basis. The decline was led by Europe, which
decreased 10 percent, driven by adverse currency conditions
totaling
more than $400 million, or 8 percent. Sales in Agricultural
Sciences
grew 12 percent, achieving a new second quarter record.
-- Volume declined 5 percent, or 1 percent on an adjusted basis, as
increasingly volatile economic conditions and related
customer
de-stocking occurred throughout most value chains. Volume
increases
were reported in Agricultural Sciences (up 10 percent) and
Performance
Plastics (up 3 percent), as well as in Asia Pacific (up 2
percent).
-- Price declined 5 percent, and purchased feedstock and energy costs
decreased by nearly $1 billion versus the same quarter last
year.
Price declined in all geographic areas, led by Europe, which was
down
8 percent.
-- EBITDA(3) was nearly $2 billion. Agricultural Sciences
EBITDA reached a new record for the first half of the year,
surpassing
$750 million.
-- The Company's operating rate was 78 percent for the quarter, down 6
percentage points versus the year-ago period, reflecting soft
demand
coupled with a high number of planned turnarounds. These
turnarounds
had an impact of approximately 3 percentage points on operating
rate
in the quarter.
-- Equity earnings were $148 million, versus $291 million in the year-ago
period. The decline was due primarily to planned turnarounds
at
MEGlobal, as well as ongoing silicon value chain weakness for
Dow
Corning.
-- The Company made further progress against its commitments related to
generating cash. Management interventions contributed to a
nearly
$700 million improvement in cash from operations in the quarter
versus
the year-ago period.
-- Net debt(4) to total capitalization declined to
40.4 percent, remaining on target to reach the Company's
year-end 2012
goal.
Comment
Andrew N. Liveris, Dow's chairman and chief executive officer,
stated:
"Sustained uncertainty in the world economy continues to present
a challenging operating environment, and this quarter was no
exception. Weak demand due to a slowdown in global growth drove
declining prices. This, coupled with an unusually high turnaround
season for Dow and a large currency effect, pressured margins in
the quarter. We have all of our pre-stated levers in place and are
driving a full array of efficiency and cost reduction measures -
tightly managing operations to generate cash flow improvements. Dow
remains intensely focused on execution - maximizing our
world-leading feedstock advantage, driving operating rate
improvements in our integrated portfolio, tailoring growth
investments to reflect macroeconomic realities, and ensuring
prudent use of cash."
Three Months Ended
In millions, except per share amounts June 30, June 30,
2012 2011
Net Sales $14,513 $16,046
Adjusted Sales $14,513 $15,459
Net Income Available for Common Stockholders $649 $982
Net Income Available for Common Stockholders,
excluding Certain Items $649 $989
Earnings per Common Share - diluted $0.55 $0.84
Adjusted Earnings per Share $0.55 $0.85
Review of Second Quarter Results
The Dow Chemical Company (NYSE: DOW) reported sales of $14.5
billion, down 10 percent, or 6 percent on an adjusted sales
basis.The decline was led by Europe, where sales decreased 10
percent driven by adverse currency conditions totaling more than
$400 million, or 8 percent. Sales in Agricultural Sciences grew 12
percent, achieving a new second quarter record.
Volume declined 5 percent, or 1 percent on an adjusted basis, as
increasingly volatile economic conditions and related customer
de-stocking occurred throughout most value chains. However, volume
increases were reported in Agricultural Sciences (up 10 percent)
and Performance Plastics (up 3 percent), as well as in Asia Pacific
(up 2 percent).
Price declined 5 percent, and purchased feedstock and energy
costs decreased by nearly $1 billion versus the same quarter last
year. Price declined in all geographic areas, led by Europe, Middle
East and Africa (EMEA), which was down 8 percent.
The Company reported EBITDA of nearly $2 billion for the
quarter. Agricultural Sciences EBITDA reached a new record for the
first half of the year, surpassing $750 million.
Earnings for the quarter were $0.55 per share, compared with
$0.84 per share or adjusted earningsof $0.85 per share in the same
period last year.
Dow's global operating rate was 78 percent for the quarter, down
6 percentage points versus the year-ago period, reflecting soft
demand coupled with a high number of planned turnarounds in the
quarter. These turnarounds had an impact of approximately 3
percentage points on operating rate in the quarter.
Research and Development (R&D) expenses declined 1 percent
versus the same period last year, despite increased technology
pipeline investments - primarily in Advanced Materials and
Agricultural Sciences - as other cost-reduction initiatives took
effect.
Selling, General and Administrative (SG&A) expenses declined
3 percent from the same period last year despite an increase in
Agricultural Sciences, which was driven by new product launches and
commercial activities.
Equity earnings were $148 million, versus $291 million in the
year-ago period. The decline was due primarily to planned
turnarounds at MEGlobal, as well as ongoing silicon value chain
weakness for Dow Corning.
Net debt to total capitalization declined to 40.4 percent and
remains on target to reach the Company's year-end 2012 goal.
"Sustained uncertainty in the world economy continues to present
a challenging operating environment, and this quarter was no
exception," said Andrew N. Liveris, Dow's chairman and chief
executive officer. "Weak demand due to a slowdown in global growth
drove declining prices. This, coupled with an usually high
turnaround season for Dow and a large currency effect, pressured
margins in the quarter. We have all of our pre-stated levers in
place and are driving a full array of efficiency and cost reduction
measures - tightly managing operations to generate cash flow
improvements. Dow remains intensely focused on execution -
maximizing our world-leading feedstock advantage, driving operating
rate improvements in our integrated portfolio, tailoring growth
investments to reflect macroeconomic realities, and ensuring
prudent use of cash."
Electronic and Functional Materials
Sales in Electronic and Functional Materials were $1.2 billion,
down 4 percent from the same quarter last year as price and volume
each declined 2 percent. Dow Electronic Materials reported sales
declines across most businesses, largely due to continued soft
demand in the electronics industry. However, the business reported
broad-based volume gains in Semiconductor Technologies, partly
driven by improving foundry utilization rates. Display Technologies
reported significant revenue growth in organic light-emitting diode
materials, however this was more than offset by declines in
backlight film applications. Dow Electronic Materials recorded
several key customer wins on advanced nodes for both memory and
logic applications.
Functional Materials revenue declined overall, with mixed
performance within its business units. Dow Microbial Control
generated volume gains by focusing on energy and water
applications, while gains in Dow Wolff Cellulosics were driven by
pharmaceutical and food applications. Dow Home and Personal Care
revenue was adversely impacted by weakening sales to global brand
owners. Higher costs associated with turnarounds in Functional
Materials dampened bottom-line results.
Equity earnings were $35 million, up from $25 million versus the
year-ago period. EBITDA for the segment was $287 million, flat with
the same period last year.
Coatings and Infrastructure Solutions
Coatings and Infrastructure Solutions sales were $1.9 billion,
down 6 percent compared with the same period last year. Volume was
flat versus the prior year, and price declined 6 percent.
Dow Water and Process Solutions reported record quarterly sales,
driven by volume gains. Demand continued to be particularly strong
in reverse osmosis membranes in industrial water applications.
Sales declines in Dow Building and Construction were principally
driven by volume contraction in Europe, where the business recently
announced cost reduction actions to improve profitability in the
region. Dow Coating Materials reported a decrease in sales as solid
volume gains, driven by double-digit growth in North America, were
offset by price declines. Weak demand in Asia for less
differentiated epoxy-based products caused significant price
erosion across all geographic areas. Dow Coating Materials' hiding
platform recorded several wins with EVOQUEtm technology as
customers continue to reformulate paints to enhance performance and
improve the efficiency of titanium dioxide usage.
Equity earnings were $45 million, down from $79 million in the
same period last year. The decline was principally due to results
at Dow Corning, which was adversely impacted by weakness in the
silicon value chain. EBITDA for the segment was $337 million. This
compares with EBITDA of $368 million in the year-ago period.
Agricultural Sciences
Agricultural Sciences posted record second quarter sales with
revenue of $1.7 billion, up 12 percent versus the year-ago period.
Volume increased 10 percent and price rose 2 percent. North
America, Latin America, and Asia Pacific all posted double-digit
sales growth driven by customer adoption of new products and
healthy agricultural market fundamentals. Agricultural Sciences set
new first half sales records in both Crop Protection and Seeds,
Traits and Oils (ST&O).
Second quarter sales of Crop Protection products rose 8 percent
versus the prior year, driven by strong sales growth in North
America, Latin America, and Asia Pacific. Sales of new Crop
Protection products grew 17 percent, led by gains in aminopyralid
and pyroxsulam herbicides and spinetoram insecticide.
Seeds, Traits and Oils (ST&O) reported sales gains of more
than 30 percent versus the year-ago period. Increased corn sales in
North America and Latin America were a key driver of growth, with
increased penetration of SmartStax® hybrids and Refuge Advanced® in
North America, and further adoption of Herculex® technology in
Latin America.
EBITDA for the segment was $307 million, compared with $287
million in the year-ago period. Agricultural Sciences set a new
EBITDA record for the first six months of the year of $758 million,
up 9 percent from the first half of 2011.
Performance Materials
Sales in Performance Materials were $3.4 billion, down 11
percent on an adjusted sales basis as volume declined 5 percent and
price declined 6 percent. Volume declined in all geographic areas
led by Latin America, primarily due to the shutdown of toluene
diisocyanate capacity in Brazil.
Polyurethanes recorded demand growth in Asia Pacific driven by
new propylene oxide capacity in Thailand. However, these gains were
more than offset by price declines. Epoxy sales contracted in the
quarter due to continued softness in allylics and phenolics,
compared with record-level sales in the year-ago period. Dow
Automotive Systems reported price increases in most geographic
areas, partially offsetting demand declines in Latin America and
EMEA.
Sales in Oxygenated Solvents were significantly impacted by
supplier production issues in Asia Pacific, along with weak demand
in coating and electronic end-markets. Polyglycols, Surfactants and
Fluids reported price gains in North America, Asia Pacific and
Latin America, as well as double-digit demand growth in Latin
America. However, this was offset by weak demand in Asia Pacific.
Dow Oil and Gas reported double-digit sales gains driven by strong
sector fundamentals, particularly in North America due to continued
shale gas dynamics.
EBITDA for the segment was $350 million, compared with EBITDA of
$481 million in the year-ago period. The decline was primarily
driven by soft demand coupled with lower market pricing levels and
high turnaround activity versus the year ago period.
Performance Plastics
Sales in Performance Plastics were $3.7 billion, down 6 percent
on an adjusted sales basis, as volume rose 3 percent and price
declined 9 percent versus the year-ago period. Double-digit volume
gains in Asia Pacific were more than offset by declining prices
across all geographic areas.
Dow Elastomers achieved new first-half records for both sales
and EBITDA. The business drove double-digit sales gains in Asia
Pacific, Latin America and North America, which partially offset
declines in EMEA.
Dow Electrical and Telecommunications sales grew versus the
year-ago period, with double-digit revenue and volume gains in Asia
Pacific. Sales in Performance Packaging declined as volume growth
in Asia Pacific, EMEA and Latin America was more than offset by
price declines in all geographic areas. Dow Hygiene and Medical
also posted volume gains in Asia Pacific, EMEA and Latin America,
however this was offset by pricing headwinds in all geographic
areas.
Equity earnings were $39 million, down from $59 million in the
year-ago period. EBITDA for the segment was $760 million, compared
with $958 million in the same period last year. The decline was
primarily driven by high turnaround activity in the quarter, which
resulted in increased maintenance expenses and sourcing costs
compared with the year-ago period.
Feedstocks and Energy
Sales in Feedstocks and Energy were $2.7 billion, down 10
percent from the same period last year. Volume decreased 7 percent
and price declined 3 percent. Lower sales in the
Chlor-Alkali/Chlor-Vinyl business were driven by price declines,
coupled with weak demand in the vinyl chloride monomer (VCM) sector
in North America. Volume declines also reflected the year-ago
shutdown of the Company's VCM asset in Louisiana. Caustic soda
recorded strong demand growth for the third consecutive quarter
year-over-year. Ethylene Oxide reported higher sales due to pricing
strength driven by continued tight market conditions in North
America, while ethylene glycol sales declined on weak demand.
Equity Earnings were $52 million, down from $138 million from
the same period last year due primarily to planned turnarounds in
MEGlobal. EBITDA for the segment was $134 million, compared with
$254 million in the same period last year.
Outlook
Commenting on the Company's outlook, Liveris said:
"World economic activity saw marked deterioration throughout the
second quarter, driven primarily by Europe's persistent
recessionary conditions. Activity in China and elsewhere in the
emerging world has decelerated, and recovery in the United States
is moderating from its momentum earlier this year, due to weakening
consumer confidence, softer trade flows and high unemployment.
"Entering the second half of 2012, the global macro environment
is not improving at the rate previously anticipated, and we have
structured our business plans accordingly. In the midst of this
challenging and volatile environment, we will accelerate our cost
reduction and efficiency programs to meet these conditions head on.
And as a result we remain squarely focused on managing our
operations: implementing disciplined price and volume management,
further reducing costs and capital spending, continuing to
de-leverage our balance sheet, and generating strong cash flow.
"Despite these near-term headwinds, Dow has the right strategy
in place to deliver over the long term. The scale and breadth of
our integrated portfolio, coupled with our world-class feedstock
advantage and our innovation pipeline, will drive higher returns
and value for our shareholders."
Dow will host a live Webcast of its second quarter earnings
conference call with investors to discuss its results, business
outlook and other matters today at 9:00 a.m. ET on www.dow.com.
(1) "Adjusted earnings per share" is defined
as earnings per share excluding the
impact of "Certain Items." See Supplemental
Information at the end of
the release for a description of these
items, as well as a reconciliation
of adjusted earnings per share to "Earnings
per common share - diluted."
(2) "Adjusted sales" is defined as "Net Sales" excluding
sales related to prior-period divestitures.
(3) EBITDA is defined as earnings (i.e.,
"Net Income") before interest,
income taxes, depreciation and amortization. A reconciliation of
EBITDA to "Net Income Available for
The Dow Chemical Company Common
Stockholders" is provided following the Operating Segments table.
(4) Net debt equals total debt ("Notes payable" plus "Long-term
debt due within one year" plus "Long-Term
Debt") minus "Cash and cash equivalents," and "Marketable
securities and interest-bearing deposits."
®The SMARTSTAX multi-event technology is developed by Dow
AgroSciences LLC and Monsanto. SMARTSTAX is a registered trademark
of Monsanto Technology LLC.
®REFUGE ADVANCED and the REFUGE ADVANCED logo are registered
trademarks of Dow AgroSciences LLC.
®HERCULEX and the HERCULEX Shield logo are trademarks of Dow
AgroSciences LLC.
About Dow
Dow (NYSE: DOW) combines the power of science and technology to
passionately innovate what is essential to human progress. The
Company connects chemistry and innovation with the principles of
sustainability to help address many of the world's most challenging
problems such as the need for clean water, renewable energy
generation and conservation, and increasing agricultural
productivity. Dow's diversified industry-leading portfolio of
specialty chemical, advanced materials, agrosciences and plastics
businesses delivers a broad range of technology-based products and
solutions to customers in approximately 160 countries and in high
growth sectors such as electronics, water, energy, coatings and
agriculture. In 2011, Dow had annual sales of $60 billion and
employed approximately 52,000 people worldwide. The Company's more
than 5,000 products are manufactured at 197 sites in 36 countries
across the globe. References to "Dow" or the "Company" mean The Dow
Chemical Company and its consolidated subsidiaries unless otherwise
expressly noted. More information about Dow can be found at
www.dow.com.
Use of non-GAAP financial measures: Dow's management believes
that measures of income adjusted to exclude certain items
("non-GAAP" financial measures) provide relevant and meaningful
information to investors about the ongoing operating results of the
Company. Such financial measures are not recognized in accordance
with accounting principles generally accepted in the United States
of America ("GAAP") and should not be viewed as an alternative to
GAAP financial measures of performance. Reconciliations of non-GAAP
financial measures to GAAP financial measures are provided in the
Supplemental Information tables.
Note: The forward-looking statements contained in this document
involve risks and uncertainties that may affect the Company's
operations, markets, products, services, prices and other factors
as discussed in filings with the Securities and Exchange
Commission. These risks and uncertainties include, but are not
limited to, economic, competitive, legal, governmental and
technological factors. Accordingly, there is no assurance that the
Company's expectations will be realized. The Company assumes no
obligation to provide revisions to any forward-looking statements
should circumstances change, except as otherwise required by
securities and other applicable laws.
Financial Statements
(Note A)
The Dow Chemical
Company
and Subsidiaries
Consolidated
Statements
of Income
Three Months Ended Six Months Ended
In millions, except Jun 30, Jun 30, Jun 30, Jun 30,
per share 2012 2011 2012 2011
amounts (Unaudited)
Net Sales $ 14,513 $ 16,046 $ 29,232 $ 30,779
Cost of sales 12,200 13,551 24,485 25,668
Research and 406 411 811 811
development
expenses
Selling, general and 674 695 1,381 1,395
administrative
expenses
Amortization of 122 125 244 248
intangibles
Restructuring charges -- -- 357 --
(Note B)
Acquisition-related -- -- -- 31
integration
expenses (Note C)
Equity in earnings 148 291 317 589
of nonconsolidated
affiliates
Sundry income 27 80 44 (369 )
(expense)
- net (Note D)
Interest income 10 10 16 17
Interest expense 312 328 641 705
and amortization
of debt discount
Income Before 984 1,317 1,690 2,158
Income Taxes
Provision for 244 240 430 360
income taxes
Net Income 740 1,077 1,260 1,798
Net income attributable 6 10 29 21
to
noncontrolling
interests
Net Income Attributable 734 1,067 1,231 1,777
to
The Dow Chemical
Company
Preferred stock 85 85 170 170
dividends
Net Income Available $ 649 $ 982 $ 1,061 $ 1,607
for The Dow Chemical
Company Common
Stockholders
Per Common Share Data:
Earnings per common $ 0.55 $ 0.84 $ 0.90 $ 1.39
share - basic
Earnings per common $ 0.55 $ 0.84 $ 0.90 $ 1.37
share - diluted
Common stock dividends $ 0.32 $ 0.25 $ 0.57 $ 0.40
declared
per share of
common stock
Weighted-average 1,169.7 1,149.6 1,165.3 1,144.6
common shares
outstanding - basic
Weighted-average 1,176.6 1,160.9 1,172.7 1,156.2
common shares
outstanding - diluted
Depreciation $ 506 $ 526 $ 1,016 $ 1,085
Capital Expenditures $ 581 $ 564 $ 983 $ 969
Notes to the Consolidated Financial Statements:
Note A:The unaudited interim consolidated financial statements
reflect all adjustments which, in the opinion of management, are
considered necessary for a fair presentation of the results for the
periods covered. These statements should be read in conjunction
with the audited consolidated financial statements and notes
thereto included in the Company's Annual Report on Form 10-K for
the year ended December 31, 2011. Except as otherwise indicated by
the context, the terms "Company" and "Dow" as used herein mean The
Dow Chemical Company and its consolidated subsidiaries.
Note B:On March 27, 2012, the Company's Board of Directors
approved a restructuring plan as part of a series of actions to
optimize its portfolio, respond to changing and volatile economic
conditions, particularly in Western Europe, and to advance the
Company's Efficiency for Growth program. The restructuring plan
includes the shutdown of a number of manufacturing facilities and a
workforce reduction. As a result, in the first quarter of 2012, the
Company recorded pretax restructuring charges of $357 million that
included asset write-downs and write-offs, severance and costs
associated with exit and disposal activities.
Note C: During the first quarter of 2011, pretax charges
totaling $31 million were recorded for integration costs related to
the April 1, 2009 acquisition of Rohm and Haas Company.
Note D: In the first quarter of 2012, the Company recognized a
pretax loss of $24 million on the early extinguishment of debt. In
the second quarter of 2011, the Company recognized a pretax loss of
$10 million on the early extinguishment of debt ($482 million year
to date).
The Dow Chemical Company and Subsidiaries
Consolidated Balance Sheets
In millions (Unaudited) Jun 30, Dec 31,
2012 2011
Assets
Current Assets
Cash and cash equivalents (variable $ 4,128 $ 5,444
interest entities
restricted - 2012: $174; 2011: $170)
Marketable securities and interest-bearing 2 2
deposits
Accounts and notes receivable:
Trade (net of allowance for 5,251 4,900
doubtful receivables
- 2012: $134; 2011: $121)
Other 4,636 4,726
Inventories 8,380 7,577
Deferred income tax assets - current 462 471
Other current assets 339 302
Total current assets 23,198 23,422
Investments
Investment in nonconsolidated affiliates 3,190 3,405
Other investments (investments carried at fair 2,554 2,508
value - 2012: $2,063; 2011: $2,008)
Noncurrent receivables 1,229 1,144
Total investments 6,973 7,057
Property
Property 52,924 52,216
Less accumulated depreciation 35,571 34,917
Net property (variable interest 17,353 17,299
entities restricted
- 2012: $2,324; 2011: $2,169)
Other Assets
Goodwill 12,896 12,930
Other intangible assets (net 4,898 5,061
of accumulated amortization
- 2012: $2,605; 2011: $2,349)
Deferred income tax assets - noncurrent 2,582 2,559
Asbestos-related insurance 167 172
receivables - noncurrent
Deferred charges and other assets 775 724
Total other assets 21,318 21,446
Total Assets $ 68,842 $ 69,224
Liabilities and Equity
Current Liabilities
Notes payable $ 473 $ 541
Long-term debt due within one year 1,880 2,749
Accounts payable:
Trade 4,586 4,778
Other 2,262 2,216
Income taxes payable 375 382
Deferred income tax liabilities - current 117 129
Dividends payable 462 376
Accrued and other current liabilities 2,474 2,463
Total current liabilities 12,629 13,634
Long-Term Debt (variable interest entities 18,304 18,310
nonrecourse - 2012: $1,308; 2011: $1,138)
Other Noncurrent Liabilities
Deferred income tax liabilities - noncurrent 1,009 1,091
Pension and other postretirement 8,775 9,034
benefits - noncurrent
Asbestos-related liabilities - noncurrent 581 608
Other noncurrent obligations 3,173 3,109
Total other noncurrent liabilities 13,538 13,842
Redeemable Noncontrolling Interest 147 147
Stockholders' Equity
Preferred stock, series A 4,000 4,000
Common stock 2,996 2,961
Additional paid-in capital 3,018 2,663
Retained earnings 19,473 19,087
Accumulated other comprehensive loss (5,967 ) (5,996 )
Unearned ESOP shares (399 ) (434 )
The Dow Chemical Company's 23,121 22,281
stockholders' equity
Noncontrolling interests 1,103 1,010
Total equity 24,224 23,291
Total Liabilities and Equity $ 68,842 $ 69,224
See Notes to the Consolidated Financial Statements.
The Dow Chemical
Company
and Subsidiaries
Operating Segments
Three Months Ended Six Months Ended
In Jun 30, Jun 30, Jun 30, Jun 30,
millions (Unaudited) 2012 2011 2012 2011
Sales by operating
segment
Electronic and $ 1,151 $ 1,197 $ 2,272 $ 2,331
Functional
Materials
Coatings 1,888 2,002 3,591 3,734
and Infrastructure
Solutions
Agricultural Sciences 1,676 1,500 3,514 3,106
Performance Materials 3,369 3,858 6,842 7,399
Performance Plastics 3,711 4,441 7,302 8,484
Feedstocks and Energy 2,657 2,963 5,592 5,551
Corporate 61 85 119 174
Total $ 14,513 $ 16,046 $ 29,232 $ 30,779
EBITDA (1) by
operating
segment
Electronic and $ 287 $ 287 $ 530 $ 544
Functional
Materials
Coatings 337 368 541 618
and Infrastructure
Solutions
Agricultural Sciences 307 287 758 693
Performance Materials 350 481 682 1,045
Performance Plastics 760 958 1,478 1,939
Feedstocks and Energy 134 254 332 502
Corporate (215 ) (303 ) (653 ) (1,067 )
Total $ 1,960 $ 2,332 $ 3,668 $ 4,274
Certain items
decreasing
EBITDA
by operating
segment (2)
Electronic and $ -- $ -- $ (17 ) $ --
Functional
Materials
Coatings -- -- (41 ) --
and Infrastructure
Solutions
Agricultural Sciences -- -- -- --
Performance Materials -- -- (186 ) --
Performance Plastics -- -- -- --
Feedstocks and Energy -- -- -- --
Corporate -- (10 ) (137 ) (513 )
Total $ -- $ (10 ) $ (381 ) $ (513 )
EBITDA excluding
certain items
by operating segment
Electronic and $ 287 $ 287 $ 547 $ 544
Functional
Materials
Coatings 337 368 582 618
and Infrastructure
Solutions
Agricultural Sciences 307 287 758 693
Performance Materials 350 481 868 1,045
Performance Plastics 760 958 1,478 1,939
Feedstocks and Energy 134 254 332 502
Corporate (215 ) (293 ) (516 ) (554 )
Total $ 1,960 $ 2,342 $ 4,049 $ 4,787
Continued
The Dow Chemical
Company
and Subsidiaries
Operating Segments
(Continued)
Three Months Ended Six Months Ended
In Jun 30, Jun 30, Jun 30, Jun 30,
millions (Unaudited) 2012 2011 2012 2011
Equity in earnings
(losses) of
nonconsolidated
affiliates
by operating
segment
(included in EBITDA)
Electronic and $ 35 $ 25 $ 54 $ 49
Functional
Materials
Coatings 45 79 67 147
and Infrastructure
Solutions
Agricultural (1 ) -- -- 3
Sciences
Performance (20 ) (4 ) (37 ) (9 )
Materials
Performance Plastics 39 59 73 121
Feedstocks 52 138 177 293
and Energy
Corporate (2 ) (6 ) (17 ) (15 )
Total $ 148 $ 291 $ 317 $ 589
(1) The Company uses EBITDA (which Dow defines
as earnings (i.e., "Net Income")
before interest, income taxes, depreciation and amortization)
as its measure of profit/loss for segment reporting purposes. EBITDA
by operating segment includes all operating items relating
to the businesses, except depreciation and
amortization; items that principally
apply to the Company as a whole are assigned to Corporate.
A reconciliation of EBITDA to "Net Income Available for The
Dow Chemical Company Common Stockholders" is provided below.
Reconciliation of
EBITDA to "Net
Income Available
for The Dow
Chemical Company Three Months Ended Six Months Ended
Common
Stockholders"
In Jun 30, Jun 30, Jun 30, Jun 30,
millions (Unaudited) 2012 2011 2012 2011
EBITDA $ 1,960 $ 2,332 $ 3,668 $ 4,274
- Depreciation and 674 697 1,353 1,428
amortization
+ Interest income 10 10 16 17
- Interest expense 312 328 641 705
and amortization
of debt discount
Income Before $ 984 $ 1,317 $ 1,690 $ 2,158
Income Taxes
- Provision for 244 240 430 360
income taxes
- Net income 6 10 29 21
attributable
to
noncontrolling
interests
- Preferred stock 85 85 170 170
dividends
Net Income Available
for The
Dow Chemical Company
Common
Stockholders $ 649 $ 982 $ 1,061 $ 1,607
(2) See Supplemental Information for a description of certain
items affecting results in 2012 and 2011.
Sales by Geographic
Area
Three Months Ended Six Months Ended
In Jun 30, Jun 30, Jun 30, Jun 30,
millions (Unaudited) 2012 2011 2012 2011
North America $ 5,341 $ 5,814 $ 10,678 $ 11,098
Europe, Middle 4,867 5,713 10,234 11,071
East
and Africa
Asia Pacific 2,645 2,741 5,065 5,226
Latin America 1,660 1,778 3,255 3,384
Total $ 14,513 $ 16,046 $ 29,232 $ 30,779
Sales Volume
and Price
by Operating
Segment and
Geographic
Area
Three Months Ended Six Months Ended
Jun 30, 2012 Jun 30, 2012
Percentage Volume Price Total Volume Price Total
change
from prior year
Electronic and (2 )% (2 )% (4 )% (2 )% (1 )% (3 )%
Functional
Materials
Coatings -- (6 ) (6 ) 1 (5 ) (4 )
and
Infrastructure
Solutions
Agricultural 10 2 12 11 2 13
Sciences
Performance (7 ) (6 ) (13 ) (3 ) (4 ) (7 )
Materials
Performance (9 ) (7 ) (16 ) (10 ) (4 ) (14 )
Plastics
Feedstocks (7 ) (3 ) (10 ) -- 1 1
and Energy
Total (5 )% (5 )% (10 )% (3 )% (2 )% (5 )%
North America (5 )% (3 )% (8 )% (4 )% -- % (4 )%
Europe, Middle (7 ) (8 ) (15 ) (3 ) (5 ) (8 )
East
and Africa
Asia Pacific 2 (5 ) (3 ) 1 (4 ) (3 )
Latin America (6 ) (1 ) (7 ) (4 ) -- (4 )
Total (5 )% (5 )% (10 )% (3 )% (2 )% (5 )%
Sales Volume
and Price
by Operating
Segment and
Geographic
Area
Excluding
Divestitures
(3)
Three Months Ended Six Months Ended
Jun 30, 2012 Jun 30, 2012
Percentage Volume Price Total Volume Price Total
change
from prior year
Electronic and (2 )% (2 )% (4 )% (2 )% (1 )% (3 )%
Functional
Materials
Coatings -- (6 ) (6 ) 1 (5 ) (4 )
and
Infrastructure
Solutions
Agricultural 10 2 12 11 2 13
Sciences
Performance (5 ) (6 ) (11 ) (1 ) (4 ) (5 )
Materials
Performance 3 (9 ) (6 ) 2 (5 ) (3 )
Plastics
Feedstocks (7 ) (3 ) (10 ) -- 1 1
and Energy
Total (1 )% (5 )% (6 )% 1 % (2 )% (1 )%
North America (2 )% (3 )% (5 )% -- % -- % -- %
Europe, Middle (1 ) (8 ) (9 ) 3 (5 ) (2 )
East
and Africa
Asia Pacific 2 (5 ) (3 ) 1 (4 ) (3 )
Latin America (4 ) (1 ) (5 ) (3 ) -- (3 )
Total (1 )% (5 )% (6 )% 1 % (2 )% (1 )%
(3) Excludes sales of the Polypropylene business
divested on September 30,
2011 and sales of Dow Haltermann which was divested during 2011.
Supplemental Information
Description of Certain Items Affecting Results:
The following table summarizes the impact of certain items
recorded in the three-month periods ended June 30, 2012 and June
30, 2011:
Certain Pretax Impact (1) Net Income (2) EPS - Diluted (3)
Items
Impacting
Results
Three Months Ended Three Months Ended Three Months Ended
In Jun 30, Jun 30, Jun 30, Jun 30, Jun 30, Jun 30,
millions, 2012 2011 2012 2011 2012 2011
except
per share
amounts
(Unaudited)
Adjusted $ 649 $ 989 $ 0.55 $ 0.85
to
exclude
certain
items
(non-GAAP
measures)
Certain
items:
Loss $ -- $ (10 ) -- (7 ) -- (0.01 )
on
early
extinguishment
of debt
Total $ -- $ (10 ) $ -- $ (7 ) $ -- $ (0.01 )
certain
items
Reported $ 649 $ 982 $ 0.55 $ 0.84
(GAAP
amounts)
(1) Impact on "Income Before Income Taxes."
(2) "Net Income Available for The Dow Chemical
Company Common Stockholders."
(3) "Earnings per common share - diluted."
Results in the second quarter of 2011 were impacted by one
item:
-- Pretax loss of $10 million on the early extinguishment of debt,
included in "Sundry income (expense) - net" and reflected in
Corporate.
The following table summarizes the impact of certain items
recorded in the six-month periods ended June 30, 2012 and June 30,
2011:
Certain Items Pretax Impact (1) Net Income (2) EPS - Diluted (3)
Impacting
Results
Six Months Ended Six Months Ended Six Months Ended
In millions, Jun 30, Jun 30, Jun 30, Jun 30, Jun 30, Jun 30,
except 2012 2011 2012 2011 2012 2011
per share
amounts
(Unaudited)
Adjusted to $ 1,363 $ 1,941 $ 1.16 $ 1.66
exclude
certain
items
(non-GAAP
measures)
Certain items:
Restructuring $ (357 ) $ -- (287 ) -- (0.25 ) --
charges
Acquisition-related -- (31 ) -- (20 ) -- (0.02 )
integration
expenses
Loss (24 ) (482 ) (15 ) (314 ) (0.01 ) (0.27 )
on
early
extinguishment
of debt
Total certain $ (381 ) $ (513 ) $ (302 ) $ (334 ) $ (0.26 ) $ (0.29 )
items
Reported (GAAP $ 1,061 $ 1,607 $ 0.90 $ 1.37
amounts)
(1) Impact on "Income Before Income Taxes."
(2) "Net Income Available for The Dow Chemical
Company Common Stockholders."
(3) "Earnings per common share - diluted."
Results for the six-month period ended June 30, 2012 were
unfavorably impacted by two items:
-- Pretax restructuring charges of $357 million. On March 27, 2012, the
Company's Board of Directors approved a restructuring plan as
part of
a series of actions to optimize its portfolio, respond to
changing and
volatile economic conditions, particularly in Western Europe,
and to
advance the Company's Efficiency for Growth program, initiated
by the
Company in the second quarter of 2011. The restructuring plan
includes
the shutdown of a number of manufacturing facilities and a
workforce
reduction. As a result of these activities, the Company
recorded
pretax restructuring charges of $357 million in the first
quarter of
2012 consisting of costs associated with exit and disposal
activities
of $150 million, severance costs of $113 million and costs
associated
with asset write-downs and write-offs of $94 million. The impact
of
the charges is shown as "Restructuring charges" in the
consolidated
statements of income and is reflected in the Company's segment
results
as follows: $17 million in Electronic and Functional Materials,
$41
million in Coatings and Infrastructure Solutions, $186 million
in
Performance Materials and $113 million in Corporate.
-- Pretax loss of $24 million on the early extinguishment of debt,
included in "Sundry income (expense) - net" in the
consolidated
statements of income and reflected in Corporate.
In addition to the item described above for the second quarter
of 2011, results for the six-month period ended June 30, 2011 were
impacted by the following items:
-- Pretax charges totaling $31 million for integration costs related to
the April 1, 2009 acquisition of Rohm and Haas Company. The
charges
are included in "Acquisition-related integration expenses" in
the
consolidated statements of income and reflected in
Corporate.
-- Pretax loss of $472 million on the early extinguishment of debt,
included in "Sundry income (expense) - net" and reflected in
Corporate.
Rebecca Bentley, +1 989 638 8568rmbentley@dow.com
Dow Chem. (LSE:DOW)
과거 데이터 주식 차트
부터 5월(5) 2024 으로 6월(6) 2024
Dow Chem. (LSE:DOW)
과거 데이터 주식 차트
부터 6월(6) 2023 으로 6월(6) 2024
