SEGMENTS AND GEOGRAPHIC REGIONS (Notes)

9 Months Ended

Sep. 30, 2021

Segments and Geographic Regions [Text Block]

SEGMENTS AND GEOGRAPHIC REGIONS

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


Segment Information	Pack. & Spec. Plastics		Ind. Interm. & Infrast.		Perf. Materials & Coatings		Corp.		Total
In millions	Pack. & Spec. Plastics		Ind. Interm. & Infrast.		Perf. Materials & Coatings		Corp.		Total
Three months ended Sep 30, 2021
Net sales	$	7,736	$	4,481	$	2,526	$	94	$	14,837
Equity in earnings of nonconsolidated affiliates	$	124	$	122	$	3	$	—	$	249
Dow Inc. Operating EBIT 1	$	1,954	$	713	$	284	$	(65)	$	2,886

Three months ended Sep 30, 2020
Net sales	$	4,565	$	3,058	$	2,002	$	87	$	9,712
Equity in earnings (losses) of nonconsolidated affiliates	$	71	$	(13)	$	1	$	1	$	60
Dow Inc. Operating EBIT 1	$	647	$	104	$	75	$	(65)	$	761
Nine months ended Sep 30, 2021
Net sales	$	20,939	$	12,303	$	7,114	$	248	$	40,604

Equity in earnings of nonconsolidated affiliates	$	360	$	381	$	5	$	5	$	751
Dow Inc. Operating EBIT 1	$	5,196	$	1,687	$	571	$	(186)	$	7,268

Nine months ended Sep 30, 2020
Net sales	$	13,175	$	8,520	$	5,922	$	219	$	27,836

Equity in earnings (losses) of nonconsolidated affiliates	$	96	$	(202)	$	4	$	(22)	$	(124)
Dow Inc. Operating EBIT 1	$	1,545	$	59	$	264	$	(207)	$	1,661

1.Operating EBIT for TDCC for the three and nine months ended September 30, 2021 and 2020 is substantially the same as that of Dow Inc. and therefore has not been disclosed separately in the table above. A reconciliation of "Net income" to Operating EBIT is provided in the following table.


Reconciliation of "Net income (loss)" to Operating EBIT	Three Months Ended				Nine Months Ended
In millions	Sep 30, 2021		Sep 30, 2020		Sep 30, 2021		Sep 30, 2020
Net income (loss)	$	1,706	$	(1)	$	4,644	$	40
+ Provision for income taxes	542		43		1,383		215
Income before income taxes	$	2,248	$	42	$	6,027	$	255
- Interest income	14		6		35		27
+ Interest expense and amortization of debt discount	178		202		561		617
- Significant items	(474)		(523)		(715)		(816)
Operating EBIT	$	2,886	$	761	$	7,268	$	1,661

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


Significant Items by Segment	Three Months Ended Sep 30, 2021										Nine Months Ended Sep 30, 2021
	Pack. & Spec. Plastics		Ind. Interm. & Infrast.		Perf. Mat. & Coatings		Corp.		Total		Pack. & Spec. Plastics		Ind. Interm. & Infrast.		Perf. Mat. & Coatings		Corp.		Total
In millions


Digitalization program costs 1	$	—	$	—	$	—	$	(40)	$	(40)	$	—	$	—	$	—	$	(121)	$	(121)
Restructuring, implementation costs and asset related charges - net 2	—		—		—		(16)		(16)		(8)		(1)		(10)		(50)		(69)
Loss on early extinguishment of debt 3	—		—		—		(472)		(472)		—		—		—		(574)		(574)
Litigation related charges, awards and adjustments 4	—		54		—		—		54		—		54		—		—		54
Indemnification and other transaction related costs 5	—		—		—		—		—		—		—		—		(5)		(5)
Total	$	—	$	54	$	—	$	(528)	$	(474)	$	(8)	$	53	$	(10)	$	(750)	$	(715)

1.Includes costs associated with implementing the Company's digital acceleration program.

2.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 5 for additional information.

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

4.Related to an arbitration award received from Luxi Chemical Group Co., Ltd. See Note 12 for additional information.

5.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. See Note 3 for additional information.


Significant Items by Segment	Three Months Ended Sep 30, 2020										Nine Months Ended Sep 30, 2020
	Pack. & Spec. Plastics		Ind. Interm. & Infrast.		Perf. Mat. & Coatings		Corp.		Total		Pack. & Spec. Plastics		Ind. Interm. & Infrast.		Perf. Mat. & Coatings		Corp.		Total
In millions

Integration and separation costs 1	$	—	$	—	$	—	$	(63)	$	(63)	$	—	$	—	$	—	$	(174)	$	(174)
Restructuring, implementation costs and asset-related charges, net 2	(18)		(22)		(189)		(388)		(617)		(30)		(22)		(189)		(478)		(719)

Litigation related charges, awards and adjustments 3	—		—		—		—		—		6		—		—		—		6

Net gain on divestitures 4	35		—		—		185		220		35		—		—		185		220
Loss on early extinguishment of debt 5	—		—		—		(63)		(63)		—		—		—		(149)		(149)
Total	$	17	$	(22)	$	(189)	$	(329)	$	(523)	$	11	$	(22)	$	(189)	$	(616)	$	(816)

1.Costs related to business separation activities.

2.Includes Board approved restructuring plans and asset related charges, which include other asset impairments. See Note 5 for additional information.

3.Includes a gain associated with a legal matter with Nova. See Note 12 for additional information.

4.Primarily related to a gain on the sale of rail infrastructure in the U.S. & Canada. See Note 6 for additional information.

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