Commission File Number | Exact Name of Registrant as Specified in its Charter, Principal Office Address and Telephone Number | State of Incorporation or Organization | I.R.S. Employer Identification No. | ||||||||
001-38646 | Dow Inc. | Delaware | 30-1128146 | ||||||||
2211 H.H. Dow Way, Midland, MI 48674 | |||||||||||
(989) 636-1000 | |||||||||||
001-03433 | The Dow Chemical Company | Delaware | 38-1285128 | ||||||||
2211 H.H. Dow Way, Midland, MI 48674 | |||||||||||
(989) 636-1000 |
Registrant | Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||
Dow Inc. | Common Stock, par value $0.01 per share | DOW | New York Stock Exchange | ||||||||
The Dow Chemical Company | 0.500% Notes due March 15, 2027 | DOW/27 | New York Stock Exchange | ||||||||
The Dow Chemical Company | 1.125% Notes due March 15, 2032 | DOW/32 | New York Stock Exchange | ||||||||
The Dow Chemical Company | 1.875% Notes due March 15, 2040 | DOW/40 | New York Stock Exchange | ||||||||
The Dow Chemical Company | 4.625% Notes due October 1, 2044 | DOW/44 | New York Stock Exchange |
Dow Inc. | ☑ | Yes | ☐ | No | The Dow Chemical Company | ☑ | Yes | ☐ | No |
Dow Inc. | ☑ | Yes | ☐ | No | The Dow Chemical Company | ☑ | Yes | ☐ | No |
Dow Inc. | Large accelerated filer | Accelerated filer | ¨ | Non-accelerated filer | ¨ | Smaller reporting company | ¨ | Emerging growth company | ¨ | |||||||||||||||||||||||
The Dow Chemical Company | Large accelerated filer | Accelerated filer | ¨ | Non-accelerated filer | þ | Smaller reporting company | ¨ | Emerging growth company | ¨ |
Dow Inc. | ☐ | The Dow Chemical Company | ¨ |
Dow Inc. | No | The Dow Chemical Company | ¨ | Yes | ☑ | No |
PAGE | |||||||||||
Item 1. | |||||||||||
Dow Inc. and Subsidiaries: | |||||||||||
The Dow Chemical Company and Subsidiaries: | |||||||||||
Dow Inc. and Subsidiaries and The Dow Chemical Company and Subsidiaries: | |||||||||||
Item 2. | |||||||||||
Item 3. | |||||||||||
Item 4. | |||||||||||
Item 1. | |||||||||||
Item 1A. | |||||||||||
Item 2. | |||||||||||
Item 4. | |||||||||||
Item 5. | |||||||||||
Item 6. | |||||||||||
Dow Inc. and Subsidiaries The Dow Chemical Company and Subsidiaries |
PART I – FINANCIAL INFORMATION |
Three Months Ended | |||||||||||||||||
In millions, except per share amounts (Unaudited) | Mar 31, 2020 | Mar 31, 2019 | |||||||||||||||
Net sales | $ | 9,770 | $ | 10,969 | |||||||||||||
Cost of sales | 8,230 | 9,142 | |||||||||||||||
Research and development expenses | 179 | 190 | |||||||||||||||
Selling, general and administrative expenses | 334 | 448 | |||||||||||||||
Amortization of intangibles | 100 | 116 | |||||||||||||||
Restructuring and asset related charges - net | 96 | 156 | |||||||||||||||
Integration and separation costs | 65 | 452 | |||||||||||||||
Equity in losses of nonconsolidated affiliates | (89) | (14) | |||||||||||||||
Sundry income (expense) - net | (81) | 69 | |||||||||||||||
Interest income | 15 | 18 | |||||||||||||||
Interest expense and amortization of debt discount | 215 | 241 | |||||||||||||||
Income from continuing operations before income taxes | 396 | 297 | |||||||||||||||
Provision for income taxes on continuing operations | 138 | 141 | |||||||||||||||
Income from continuing operations, net of tax | 258 | 156 | |||||||||||||||
Income from discontinued operations, net of tax | — | 445 | |||||||||||||||
Net income | 258 | 601 | |||||||||||||||
Net income attributable to noncontrolling interests | 19 | 45 | |||||||||||||||
Net income available for Dow Inc. common stockholders | $ | 239 | $ | 556 | |||||||||||||
Per common share data: | |||||||||||||||||
Earnings per common share from continuing operations - basic | $ | 0.32 | $ | 0.16 | |||||||||||||
Earnings per common share from discontinued operations - basic | — | 0.58 | |||||||||||||||
Earnings per common share - basic | $ | 0.32 | $ | 0.74 | |||||||||||||
Earnings per common share from continuing operations - diluted | $ | 0.32 | $ | 0.16 | |||||||||||||
Earnings per common share from discontinued operations - diluted | — | 0.58 | |||||||||||||||
Earnings per common share - diluted | $ | 0.32 | $ | 0.74 | |||||||||||||
Weighted-average common shares outstanding - basic | 740.2 | 747.2 | |||||||||||||||
Weighted-average common shares outstanding - diluted | 742.0 | 747.2 | |||||||||||||||
Depreciation | $ | 515 | $ | 543 | |||||||||||||
Capital expenditures | $ | 395 | $ | 442 |
Three Months Ended | |||||||||||||||||
In millions (Unaudited) | Mar 31, 2020 | Mar 31, 2019 | |||||||||||||||
Net income | $ | 258 | $ | 601 | |||||||||||||
Other comprehensive income (loss), net of tax | |||||||||||||||||
Unrealized gains (losses) on investments | (100) | 67 | |||||||||||||||
Cumulative translation adjustments | (163) | (31) | |||||||||||||||
Pension and other postretirement benefit plans | 142 | 141 | |||||||||||||||
Derivative instruments | (162) | (75) | |||||||||||||||
Total other comprehensive income (loss) | (283) | 102 | |||||||||||||||
Comprehensive income (loss) | (25) | 703 | |||||||||||||||
Comprehensive income attributable to noncontrolling interests, net of tax | 19 | 51 | |||||||||||||||
Comprehensive income (loss) attributable to Dow Inc. | $ | (44) | $ | 652 |
In millions, except share amounts (Unaudited) | Mar 31, 2020 | Dec 31, 2019 | ||||||
Assets | ||||||||
Current Assets | ||||||||
Cash and cash equivalents (variable interest entities restricted - 2020: $44; 2019: $37) | $ | 3,633 | $ | 2,367 | ||||
Marketable securities | 1 | 21 | ||||||
Accounts and notes receivable: | ||||||||
Trade (net of allowance for doubtful receivables - 2020: $43; 2019: $45) | 4,841 | 4,844 | ||||||
Other | 2,770 | 2,711 | ||||||
Inventories | 6,324 | 6,214 | ||||||
Other current assets | 569 | 658 | ||||||
Total current assets | 18,138 | 16,815 | ||||||
Investments | ||||||||
Investment in nonconsolidated affiliates | 1,235 | 1,404 | ||||||
Other investments (investments carried at fair value - 2020: $1,306; 2019: $1,584) | 2,136 | 2,588 | ||||||
Noncurrent receivables | 697 | 1,063 | ||||||
Total investments | 4,068 | 5,055 | ||||||
Property | ||||||||
Property | 54,942 | 54,910 | ||||||
Less accumulated depreciation | 34,136 | 33,914 | ||||||
Net property (variable interest entities restricted - 2020: $286; 2019: $330) | 20,806 | 20,996 | ||||||
Other Assets | ||||||||
Goodwill | 8,780 | 8,796 | ||||||
Other intangible assets (net of accumulated amortization - 2020: $3,994; 2019: $3,886) | 3,636 | 3,759 | ||||||
Operating lease right-of-use assets | 1,942 | 2,072 | ||||||
Deferred income tax assets | 2,248 | 2,213 | ||||||
Deferred charges and other assets | 1,068 | 818 | ||||||
Total other assets | 17,674 | 17,658 | ||||||
Total Assets | $ | 60,686 | $ | 60,524 | ||||
Liabilities and Equity | ||||||||
Current Liabilities | ||||||||
Notes payable | $ | 1,490 | $ | 586 | ||||
Long-term debt due within one year | 384 | 435 | ||||||
Accounts payable: | ||||||||
Trade | 3,769 | 3,889 | ||||||
Other | 1,815 | 2,064 | ||||||
Operating lease liabilities - current | 384 | 421 | ||||||
Income taxes payable | 468 | 522 | ||||||
Accrued and other current liabilities | 2,811 | 2,762 | ||||||
Total current liabilities | 11,121 | 10,679 | ||||||
Long-Term Debt (variable interest entities nonrecourse - 2020: $30; 2019: $34) | 16,313 | 15,975 | ||||||
Other Noncurrent Liabilities | ||||||||
Deferred income tax liabilities | 352 | 347 | ||||||
Pension and other postretirement benefits - noncurrent | 9,832 | 10,083 | ||||||
Asbestos-related liabilities - noncurrent | 1,048 | 1,060 | ||||||
Operating lease liabilities - noncurrent | 1,622 | 1,739 | ||||||
Other noncurrent obligations | 6,937 | 6,547 | ||||||
Total other noncurrent liabilities | 19,791 | 19,776 | ||||||
Stockholders’ Equity | ||||||||
Common stock (authorized 5,000,000,000 shares of $0.01 par value each; issued 2020: 753,534,116 shares; 2019: 751,228,644 shares) | 8 | 8 | ||||||
Additional paid-in capital | 7,370 | 7,325 | ||||||
Retained earnings | 16,763 | 17,045 | ||||||
Accumulated other comprehensive loss | (10,529) | (10,246) | ||||||
Unearned ESOP shares | (81) | (91) | ||||||
Treasury stock at cost (2020: 12,803,303 shares; 2019: 9,729,834 shares) | (625) | (500) | ||||||
Dow Inc.’s stockholders’ equity | 12,906 | 13,541 | ||||||
Noncontrolling interests | 555 | 553 | ||||||
Total equity | 13,461 | 14,094 | ||||||
Total Liabilities and Equity | $ | 60,686 | $ | 60,524 |
In millions (Unaudited) | Three Months Ended | ||||||||||
Mar 31, 2020 | Mar 31, 2019 | ||||||||||
Operating Activities | |||||||||||
Net income | $ | 258 | $ | 601 | |||||||
Less: Income from discontinued operations, net of tax | — | 445 | |||||||||
Income from continuing operations, net of tax | 258 | 156 | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 724 | 743 | |||||||||
Credit for deferred income tax | (57) | (72) | |||||||||
Earnings of nonconsolidated affiliates less than dividends received | 134 | 775 | |||||||||
Net periodic pension benefit cost | 64 | 41 | |||||||||
Pension contributions | (63) | (99) | |||||||||
Net gain on sales of assets, businesses and investments | (12) | (2) | |||||||||
Restructuring and asset related charges - net | 96 | 156 | |||||||||
Other net loss | 135 | 33 | |||||||||
Changes in assets and liabilities, net of effects of acquired and divested companies: | |||||||||||
Accounts and notes receivable | 128 | 85 | |||||||||
Inventories | (111) | (47) | |||||||||
Accounts payable | (314) | (452) | |||||||||
Other assets and liabilities, net | 254 | (274) | |||||||||
Cash provided by operating activities - continuing operations | 1,236 | 1,043 | |||||||||
Cash provided by operating activities - discontinued operations | 3 | 338 | |||||||||
Cash provided by operating activities | 1,239 | 1,381 | |||||||||
Investing Activities | |||||||||||
Capital expenditures | (395) | (442) | |||||||||
Investment in gas field developments | (5) | (25) | |||||||||
Proceeds from sales of property and businesses, net of cash divested | 11 | — | |||||||||
Investments in and loans to nonconsolidated affiliates | (114) | — | |||||||||
Distributions and loan repayments from nonconsolidated affiliates | 6 | — | |||||||||
Purchases of investments | (128) | (173) | |||||||||
Proceeds from sales and maturities of investments | 472 | 176 | |||||||||
Cash used for investing activities - continuing operations | (153) | (464) | |||||||||
Cash used for investing activities - discontinued operations | — | (34) | |||||||||
Cash used for investing activities | (153) | (498) | |||||||||
Financing Activities | |||||||||||
Changes in short-term notes payable | 838 | (16) | |||||||||
Proceeds from issuance of long-term debt | 2,449 | — | |||||||||
Payments on long-term debt | (2,275) | (81) | |||||||||
Purchases of treasury stock | (125) | — | |||||||||
Proceeds from issuance of stock | 16 | 28 | |||||||||
Transaction financing, debt issuance and other costs | (93) | — | |||||||||
Employee taxes paid for share-based payment arrangements | (26) | (45) | |||||||||
Distributions to noncontrolling interests | (1) | (2) | |||||||||
Dividends paid to stockholders | (518) | — | |||||||||
Dividends paid to DowDuPont Inc. | — | (535) | |||||||||
Settlements and transfers related to separation from DowDuPont Inc. | — | 36 | |||||||||
Cash provided by (used for) financing activities - continuing operations | 265 | (615) | |||||||||
Cash used for financing activities - discontinued operations | — | (18) | |||||||||
Cash provided by (used for) financing activities | 265 | (633) | |||||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (86) | 30 | |||||||||
Cash reclassified as held for sale | — | (97) | |||||||||
Summary | |||||||||||
Increase in cash, cash equivalents and restricted cash | 1,265 | 183 | |||||||||
Cash, cash equivalents and restricted cash at beginning of period | 2,380 | 2,764 | |||||||||
Cash, cash equivalents and restricted cash at end of period | $ | 3,645 | $ | 2,947 | |||||||
Less: Restricted cash and cash equivalents, included in "Other current assets" | 12 | 43 | |||||||||
Cash and cash equivalents at end of period | $ | 3,633 | $ | 2,904 |
Three Months Ended | |||||||||||||||||
In millions (Unaudited) | Mar 31, 2020 | Mar 31, 2019 | |||||||||||||||
Common Stock | |||||||||||||||||
Balance at beginning and end of period | $ | 8 | $ | — | |||||||||||||
Additional Paid-in Capital | |||||||||||||||||
Balance at beginning of period | 7,325 | 7,042 | |||||||||||||||
Common stock issued/sold | 16 | — | |||||||||||||||
Issuance of parent company stock - DowDuPont Inc. | — | 28 | |||||||||||||||
Stock-based compensation and allocation of ESOP shares | 29 | 83 | |||||||||||||||
Balance at end of period | 7,370 | 7,153 | |||||||||||||||
Retained Earnings | |||||||||||||||||
Balance at beginning of period | 17,045 | 35,460 | |||||||||||||||
Net income available for Dow Inc. common stockholders | 239 | 556 | |||||||||||||||
Dividends to stockholders | (518) | — | |||||||||||||||
Dividends to DowDuPont Inc. | — | (535) | |||||||||||||||
Common control transaction | — | 35 | |||||||||||||||
Adoption of accounting standards | — | (111) | |||||||||||||||
Other | (3) | (2) | |||||||||||||||
Balance at end of period | 16,763 | 35,403 | |||||||||||||||
Accumulated Other Comprehensive Loss | |||||||||||||||||
Balance at beginning of period | (10,246) | (9,885) | |||||||||||||||
Other comprehensive income (loss) | (283) | 102 | |||||||||||||||
Balance at end of period | (10,529) | (9,783) | |||||||||||||||
Unearned ESOP Shares | |||||||||||||||||
Balance at beginning of period | (91) | (134) | |||||||||||||||
Allocation of ESOP shares | 10 | 29 | |||||||||||||||
Balance at end of period | (81) | (105) | |||||||||||||||
Treasury Stock | |||||||||||||||||
Balance at beginning of period | (500) | — | |||||||||||||||
Treasury stock purchases | (125) | — | |||||||||||||||
Balance at end of period | (625) | — | |||||||||||||||
Dow Inc.'s stockholders' equity | 12,906 | 32,668 | |||||||||||||||
Noncontrolling Interests | 555 | 1,180 | |||||||||||||||
Total Equity | $ | 13,461 | $ | 33,848 | |||||||||||||
Dividends declared per share of common stock | $ | 0.70 | $ | — |
Three Months Ended | Three Months Ended | ||||||||||||||||||||||
In millions (Unaudited) | Mar 31, 2019 | Mar 31, 2018 | In millions (Unaudited) | Mar 31, 2020 | Mar 31, 2019 | ||||||||||||||||||
Net sales | $ | 13,582 | $ | 14,899 | Net sales | $ | 9,770 | $ | 10,969 | ||||||||||||||
Cost of sales | 10,707 | 11,552 | Cost of sales | 8,230 | 9,142 | ||||||||||||||||||
Research and development expenses | 361 | 386 | Research and development expenses | 179 | 190 | ||||||||||||||||||
Selling, general and administrative expenses | 701 | 751 | Selling, general and administrative expenses | 334 | 448 | ||||||||||||||||||
Amortization of intangibles | 154 | 159 | Amortization of intangibles | 100 | 116 | ||||||||||||||||||
Restructuring and asset related charges - net | 232 | 165 | Restructuring and asset related charges - net | 96 | 156 | ||||||||||||||||||
Integration and separation costs | 408 | 202 | Integration and separation costs | 65 | 452 | ||||||||||||||||||
Equity in earnings of nonconsolidated affiliates | 13 | 243 | |||||||||||||||||||||
Equity in losses of nonconsolidated affiliates | Equity in losses of nonconsolidated affiliates | (89) | (14) | ||||||||||||||||||||
Sundry income (expense) - net | 73 | 83 | Sundry income (expense) - net | (82) | 69 | ||||||||||||||||||
Interest income | Interest income | 16 | 18 | ||||||||||||||||||||
Interest expense and amortization of debt discount | 247 | 270 | Interest expense and amortization of debt discount | 215 | 241 | ||||||||||||||||||
Income before income taxes | 858 | 1,740 | |||||||||||||||||||||
Provision for income taxes | 272 | 363 | |||||||||||||||||||||
Income from continuing operations before income taxes | Income from continuing operations before income taxes | 396 | 297 | ||||||||||||||||||||
Provision for income taxes on continuing operations | Provision for income taxes on continuing operations | 138 | 141 | ||||||||||||||||||||
Income from continuing operations, net of tax | Income from continuing operations, net of tax | 258 | 156 | ||||||||||||||||||||
Income from discontinued operations, net of tax | Income from discontinued operations, net of tax | — | 445 | ||||||||||||||||||||
Net income | 586 | 1,377 | Net income | 258 | 601 | ||||||||||||||||||
Net income attributable to noncontrolling interests | 45 | 35 | Net income attributable to noncontrolling interests | 19 | 45 | ||||||||||||||||||
Net income available for The Dow Chemical Company common stockholder | $ | 541 | $ | 1,342 | Net income available for The Dow Chemical Company common stockholder | $ | 239 | $ | 556 | ||||||||||||||
Depreciation | $ | 598 | $ | 621 | Depreciation | $ | 515 | $ | 543 | ||||||||||||||
Capital expenditures | $ | 514 | $ | 423 | Capital expenditures | $ | 395 | $ | 442 |
Three Months Ended | Three Months Ended | ||||||||||||||||||||||
In millions (Unaudited) | Mar 31, 2019 | Mar 31, 2018 | In millions (Unaudited) | Mar 31, 2020 | Mar 31, 2019 | ||||||||||||||||||
Net income | $ | 586 | $ | 1,377 | Net income | $ | 258 | $ | 601 | ||||||||||||||
Other comprehensive income (loss), net of tax | Other comprehensive income (loss), net of tax | ||||||||||||||||||||||
Unrealized gains (losses) on investments | 67 | (25 | ) | Unrealized gains (losses) on investments | (100) | 67 | |||||||||||||||||
Cumulative translation adjustments | (31 | ) | 376 | Cumulative translation adjustments | (163) | (31) | |||||||||||||||||
Pension and other postretirement benefit plans | 141 | 126 | Pension and other postretirement benefit plans | 142 | 141 | ||||||||||||||||||
Derivative instruments | (75 | ) | 6 | Derivative instruments | (162) | (75) | |||||||||||||||||
Total other comprehensive income | 102 | 483 | |||||||||||||||||||||
Comprehensive income | 688 | 1,860 | |||||||||||||||||||||
Total other comprehensive income (loss) | Total other comprehensive income (loss) | (283) | 102 | ||||||||||||||||||||
Comprehensive income (loss) | Comprehensive income (loss) | (25) | 703 | ||||||||||||||||||||
Comprehensive income attributable to noncontrolling interests, net of tax | 51 | 28 | Comprehensive income attributable to noncontrolling interests, net of tax | 19 | 51 | ||||||||||||||||||
Comprehensive income attributable to The Dow Chemical Company | $ | 637 | $ | 1,832 | |||||||||||||||||||
Comprehensive income (loss) attributable to The Dow Chemical Company | Comprehensive income (loss) attributable to The Dow Chemical Company | $ | (44) | $ | 652 |
In millions, except share amounts (Unaudited) | Mar 31, 2019 | Dec 31, 2018 | In millions, except share amounts (Unaudited) | Mar 31, 2020 | Dec 31, 2019 | |||||||||
Assets | Assets | |||||||||||||
Current Assets | Current Assets | |||||||||||||
Cash and cash equivalents (variable interest entities restricted - 2019: $109; 2018: $82) | $ | 2,969 | $ | 2,669 | ||||||||||
Cash and cash equivalents (variable interest entities restricted - 2020: $44; 2019: $37) | Cash and cash equivalents (variable interest entities restricted - 2020: $44; 2019: $37) | $ | 3,633 | $ | 2,367 | |||||||||
Marketable securities | 101 | 100 | Marketable securities | 1 | 21 | |||||||||
Accounts and notes receivable: | Accounts and notes receivable: | |||||||||||||
Trade (net of allowance for doubtful receivables - 2019: $109; 2018: $106) | 8,428 | 8,246 | ||||||||||||
Trade (net of allowance for doubtful receivables - 2020: $43; 2019: $45) | Trade (net of allowance for doubtful receivables - 2020: $43; 2019: $45) | 4,841 | 4,844 | |||||||||||
Other | 3,947 | 4,136 | Other | 2,770 | 2,716 | |||||||||
Inventories | 9,508 | 9,260 | Inventories | 6,324 | 6,214 | |||||||||
Other current assets | 708 | 852 | Other current assets | 490 | 571 | |||||||||
Total current assets | 25,661 | 25,263 | Total current assets | 18,059 | 16,733 | |||||||||
Investments | Investments | |||||||||||||
Investment in nonconsolidated affiliates | 3,321 | 3,823 | Investment in nonconsolidated affiliates | 1,235 | 1,404 | |||||||||
Other investments (investments carried at fair value - 2019: $1,796; 2018: $1,699) | 2,737 | 2,648 | ||||||||||||
Other investments (investments carried at fair value - 2020: $1,306; 2019: $1,584) | Other investments (investments carried at fair value - 2020: $1,306; 2019: $1,584) | 2,136 | 2,588 | |||||||||||
Noncurrent receivables | 345 | 394 | Noncurrent receivables | 665 | 1,011 | |||||||||
Total investments | 6,403 | 6,865 | Total investments | 4,036 | 5,003 | |||||||||
Property | Property | |||||||||||||
Property | 61,764 | 61,437 | Property | 54,942 | 54,910 | |||||||||
Less accumulated depreciation | 38,272 | 37,775 | Less accumulated depreciation | 34,136 | 33,914 | |||||||||
Net property (variable interest entities restricted - 2019: $718; 2018: $734) | 23,492 | 23,662 | ||||||||||||
Net property (variable interest entities restricted - 2020: $286; 2019: $330) | Net property (variable interest entities restricted - 2020: $286; 2019: $330) | 20,806 | 20,996 | |||||||||||
Other Assets | Other Assets | |||||||||||||
Goodwill | 13,812 | 13,848 | Goodwill | 8,780 | 8,796 | |||||||||
Other intangible assets (net of accumulated amortization - 2019: $5,912; 2018: $5,762) | 4,743 | 4,913 | ||||||||||||
Other intangible assets (net of accumulated amortization - 2020: $3,994; 2019: $3,886) | Other intangible assets (net of accumulated amortization - 2020: $3,994; 2019: $3,886) | 3,636 | 3,759 | |||||||||||
Operating lease right-of-use assets | 2,584 | — | Operating lease right-of-use assets | 1,942 | 2,072 | |||||||||
Deferred income tax assets | 2,183 | 2,031 | Deferred income tax assets | 2,248 | 2,213 | |||||||||
Deferred charges and other assets | 859 | 796 | Deferred charges and other assets | 1,067 | 818 | |||||||||
Total other assets | 24,181 | 21,588 | Total other assets | 17,673 | 17,658 | |||||||||
Total Assets | $ | 79,737 | $ | 77,378 | Total Assets | $ | 60,574 | $ | 60,390 | |||||
Liabilities and Equity | Liabilities and Equity | |||||||||||||
Current Liabilities | Current Liabilities | |||||||||||||
Notes payable | $ | 317 | $ | 305 | Notes payable | $ | 1,490 | $ | 586 | |||||
Long-term debt due within one year | 2,369 | 340 | Long-term debt due within one year | 384 | 435 | |||||||||
Accounts payable: | Accounts payable: | |||||||||||||
Trade | 5,103 | 5,378 | Trade | 3,769 | 3,889 | |||||||||
Other | 3,176 | 3,330 | Other | 1,815 | 2,064 | |||||||||
Operating lease liabilities - current | 477 | — | Operating lease liabilities - current | 384 | 421 | |||||||||
Income taxes payable | 699 | 791 | Income taxes payable | 468 | 522 | |||||||||
Accrued and other current liabilities | 3,232 | 3,611 | Accrued and other current liabilities | 2,314 | 2,233 | |||||||||
Total current liabilities | 15,373 | 13,755 | Total current liabilities | 10,624 | 10,150 | |||||||||
Long-Term Debt (variable interest entities nonrecourse - 2019: $43; 2018: $75) | 17,160 | 19,254 | ||||||||||||
Long-Term Debt (variable interest entities nonrecourse - 2020: $30; 2019: $34) | Long-Term Debt (variable interest entities nonrecourse - 2020: $30; 2019: $34) | 16,313 | 15,975 | |||||||||||
Other Noncurrent Liabilities | Other Noncurrent Liabilities | |||||||||||||
Deferred income tax liabilities | 721 | 664 | Deferred income tax liabilities | 352 | 347 | |||||||||
Pension and other postretirement benefits - noncurrent | 9,103 | 9,226 | Pension and other postretirement benefits - noncurrent | 9,832 | 10,083 | |||||||||
Asbestos-related liabilities - noncurrent | 1,133 | 1,142 | Asbestos-related liabilities - noncurrent | 1,048 | 1,060 | |||||||||
Operating lease liabilities - noncurrent | 2,126 | — | Operating lease liabilities - noncurrent | 1,622 | 1,739 | |||||||||
Other noncurrent obligations | 5,975 | 5,368 | Other noncurrent obligations | 6,555 | 6,174 | |||||||||
Total other noncurrent liabilities | 19,058 | 16,400 | Total other noncurrent liabilities | 19,409 | 19,403 | |||||||||
Stockholders’ Equity | ||||||||||||||
Stockholder's Equity | Stockholder's Equity | |||||||||||||
Common stock (authorized and issued 100 shares of $0.01 par value each) | — | — | Common stock (authorized and issued 100 shares of $0.01 par value each) | — | — | |||||||||
Additional paid-in capital | 7,153 | 7,042 | Additional paid-in capital | 7,378 | 7,333 | |||||||||
Retained earnings | 29,701 | 29,808 | Retained earnings | 16,905 | 17,313 | |||||||||
Accumulated other comprehensive loss | (9,783 | ) | (9,885 | ) | Accumulated other comprehensive loss | (10,529) | (10,246) | |||||||
Unearned ESOP shares | (105 | ) | (134 | ) | Unearned ESOP shares | (81) | (91) | |||||||
The Dow Chemical Company’s stockholders’ equity | 26,966 | 26,831 | ||||||||||||
The Dow Chemical Company’s stockholder's equity | The Dow Chemical Company’s stockholder's equity | 13,673 | 14,309 | |||||||||||
Noncontrolling interests | 1,180 | 1,138 | Noncontrolling interests | 555 | 553 | |||||||||
Total equity | 28,146 | 27,969 | Total equity | 14,228 | 14,862 | |||||||||
Total Liabilities and Equity | $ | 79,737 | $ | 77,378 | Total Liabilities and Equity | $ | 60,574 | $ | 60,390 |
Three Months Ended | |||||||||||||||||
In millions (Unaudited) | In millions (Unaudited) | Three Months Ended | |||||||||||||||
Mar 31, 2019 | Mar 31, 2018 | Mar 31, 2020 | Mar 31, 2019 | ||||||||||||||
Operating Activities | Operating Activities | ||||||||||||||||
Net income | $ | 586 | $ | 1,377 | Net income | $ | 258 | $ | 601 | ||||||||
Adjustments to reconcile net income to net cash provided by (used for) operating activities: | |||||||||||||||||
Less: Income from discontinued operations, net of tax | Less: Income from discontinued operations, net of tax | — | 445 | ||||||||||||||
Income from continuing operations, net of tax | Income from continuing operations, net of tax | 258 | 156 | ||||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||
Depreciation and amortization | 840 | 837 | Depreciation and amortization | 724 | 743 | ||||||||||||
Credit for deferred income tax | (89 | ) | (67 | ) | Credit for deferred income tax | (57) | (72) | ||||||||||
Earnings of nonconsolidated affiliates less than dividends received | 750 | 287 | Earnings of nonconsolidated affiliates less than dividends received | 134 | 775 | ||||||||||||
Net periodic pension benefit cost | 62 | 110 | Net periodic pension benefit cost | 64 | 41 | ||||||||||||
Pension contributions | (103 | ) | (308 | ) | Pension contributions | (63) | (99) | ||||||||||
Net (gain) loss on sales of assets, businesses and investments | 12 | (33 | ) | ||||||||||||||
Net gain on sales of assets, businesses and investments | Net gain on sales of assets, businesses and investments | (12) | (2) | ||||||||||||||
Restructuring and asset related charges - net | 232 | 165 | Restructuring and asset related charges - net | 96 | 156 | ||||||||||||
Other net loss | 39 | 98 | Other net loss | 136 | 33 | ||||||||||||
Changes in assets and liabilities, net of effects of acquired and divested companies: | Changes in assets and liabilities, net of effects of acquired and divested companies: | ||||||||||||||||
Accounts and notes receivable | (58 | ) | (1,524 | ) | Accounts and notes receivable | 128 | 85 | ||||||||||
Inventories | (266 | ) | (1,239 | ) | Inventories | (111) | (47) | ||||||||||
Accounts payable | (468 | ) | 823 | Accounts payable | (314) | (452) | |||||||||||
Other assets and liabilities, net | (111 | ) | (684 | ) | Other assets and liabilities, net | 256 | (274) | ||||||||||
Cash provided by (used for) operating activities | 1,426 | (158 | ) | ||||||||||||||
Cash provided by operating activities - continuing operations | Cash provided by operating activities - continuing operations | 1,239 | 1,043 | ||||||||||||||
Cash provided by operating activities - discontinued operations | Cash provided by operating activities - discontinued operations | — | 338 | ||||||||||||||
Cash provided by operating activities | Cash provided by operating activities | 1,239 | 1,381 | ||||||||||||||
Investing Activities | Investing Activities | ||||||||||||||||
Capital expenditures | (514 | ) | (423 | ) | Capital expenditures | (395) | (442) | ||||||||||
Investment in gas field developments | (25 | ) | (28 | ) | Investment in gas field developments | (5) | (25) | ||||||||||
Proceeds from sales of property and businesses, net of cash divested | 25 | 17 | Proceeds from sales of property and businesses, net of cash divested | 11 | — | ||||||||||||
Proceeds from sale of ownership interests in nonconsolidated affiliates | 21 | — | |||||||||||||||
Investments in and loans to nonconsolidated affiliates | Investments in and loans to nonconsolidated affiliates | (114) | — | ||||||||||||||
Distributions and loan repayments from nonconsolidated affiliates | Distributions and loan repayments from nonconsolidated affiliates | 6 | — | ||||||||||||||
Purchases of investments | (173 | ) | (557 | ) | Purchases of investments | (128) | (173) | ||||||||||
Proceeds from sales and maturities of investments | 180 | 454 | Proceeds from sales and maturities of investments | 472 | 176 | ||||||||||||
Proceeds from interests in trade accounts receivable conduits | — | 445 | |||||||||||||||
Cash used for investing activities - continuing operations | Cash used for investing activities - continuing operations | (153) | (464) | ||||||||||||||
Cash used for investing activities - discontinued operations | Cash used for investing activities - discontinued operations | — | (34) | ||||||||||||||
Cash used for investing activities | (486 | ) | (92 | ) | Cash used for investing activities | (153) | (498) | ||||||||||
Financing Activities | Financing Activities | ||||||||||||||||
Changes in short-term notes payable | (17 | ) | 293 | Changes in short-term notes payable | 838 | (16) | |||||||||||
Proceeds from issuance of long-term debt | Proceeds from issuance of long-term debt | 2,449 | — | ||||||||||||||
Payments on long-term debt | (80 | ) | (54 | ) | Payments on long-term debt | (2,275) | (81) | ||||||||||
Proceeds from issuance of parent company stock | 28 | 63 | |||||||||||||||
Proceeds from issuance of stock | Proceeds from issuance of stock | 16 | 28 | ||||||||||||||
Transaction financing, debt issuance and other costs | Transaction financing, debt issuance and other costs | (93) | — | ||||||||||||||
Employee taxes paid for share-based payment arrangements | (54 | ) | (77 | ) | Employee taxes paid for share-based payment arrangements | (26) | (45) | ||||||||||
Distributions to noncontrolling interests | (9 | ) | (24 | ) | Distributions to noncontrolling interests | (1) | (2) | ||||||||||
Dividends paid to parent | (535 | ) | (1,057 | ) | |||||||||||||
Other financing activities, net | — | 3 | |||||||||||||||
Cash used for financing activities | (667 | ) | (853 | ) | |||||||||||||
Dividends paid to Dow Inc. | Dividends paid to Dow Inc. | (643) | — | ||||||||||||||
Dividends paid to DowDuPont Inc. | Dividends paid to DowDuPont Inc. | — | (535) | ||||||||||||||
Settlements and transfers related to separation from DowDuPont Inc. | Settlements and transfers related to separation from DowDuPont Inc. | — | 36 | ||||||||||||||
Cash provided by (used for) financing activities - continuing operations | Cash provided by (used for) financing activities - continuing operations | 265 | (615) | ||||||||||||||
Cash used for financing activities - discontinued operations | Cash used for financing activities - discontinued operations | — | (18) | ||||||||||||||
Cash provided by (used for) financing activities | Cash provided by (used for) financing activities | 265 | (633) | ||||||||||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 30 | 100 | Effect of exchange rate changes on cash, cash equivalents and restricted cash | (86) | 30 | ||||||||||||
Cash reclassified as held for sale | Cash reclassified as held for sale | — | (97) | ||||||||||||||
Summary | Summary | ||||||||||||||||
Increase (Decrease) in cash, cash equivalents and restricted cash | 303 | (1,003 | ) | ||||||||||||||
Increase in cash, cash equivalents and restricted cash | Increase in cash, cash equivalents and restricted cash | 1,265 | 183 | ||||||||||||||
Cash, cash equivalents and restricted cash at beginning of period | 2,709 | 6,207 | Cash, cash equivalents and restricted cash at beginning of period | 2,380 | 2,764 | ||||||||||||
Cash, cash equivalents and restricted cash at end of period | $ | 3,012 | $ | 5,204 | Cash, cash equivalents and restricted cash at end of period | $ | 3,645 | $ | 2,947 | ||||||||
Less: Restricted cash and cash equivalents, included in "Other current assets" | 43 | 18 | Less: Restricted cash and cash equivalents, included in "Other current assets" | 12 | 43 | ||||||||||||
Cash and cash equivalents at end of period | $ | 2,969 | $ | 5,186 | Cash and cash equivalents at end of period | $ | 3,633 | $ | 2,904 |
Three Months Ended | Three Months Ended | ||||||||||||||||||||||
In millions (Unaudited) | Mar 31, 2019 | Mar 31, 2018 | In millions (Unaudited) | Mar 31, 2020 | Mar 31, 2019 | ||||||||||||||||||
Common Stock | Common Stock | ||||||||||||||||||||||
Balance at beginning and end of period | $ | — | $ | — | Balance at beginning and end of period | $ | — | $ | — | ||||||||||||||
Additional Paid-in Capital | Additional Paid-in Capital | ||||||||||||||||||||||
Balance at beginning of period | 7,042 | 6,553 | Balance at beginning of period | 7,333 | 7,042 | ||||||||||||||||||
Issuance of parent company stock | 28 | 63 | |||||||||||||||||||||
Issuance of parent company stock - Dow Inc. | Issuance of parent company stock - Dow Inc. | 16 | — | ||||||||||||||||||||
Issuance of parent company stock - DowDuPont Inc. | Issuance of parent company stock - DowDuPont Inc. | — | 28 | ||||||||||||||||||||
Stock-based compensation and allocation of ESOP shares | 83 | 142 | Stock-based compensation and allocation of ESOP shares | 29 | 83 | ||||||||||||||||||
Balance at end of period | 7,153 | 6,758 | Balance at end of period | 7,378 | 7,153 | ||||||||||||||||||
Retained Earnings | Retained Earnings | ||||||||||||||||||||||
Balance at beginning of period | 29,808 | 28,050 | Balance at beginning of period | 17,313 | 35,460 | ||||||||||||||||||
Net income available for The Dow Chemical Company common stockholder | 541 | 1,342 | Net income available for The Dow Chemical Company common stockholder | 239 | 556 | ||||||||||||||||||
Dividends to parent | (535 | ) | (1,057 | ) | |||||||||||||||||||
Adoption of accounting standards (Notes 1, 2 and 6) | (111 | ) | (68 | ) | |||||||||||||||||||
Dividends to Dow Inc. | Dividends to Dow Inc. | (643) | — | ||||||||||||||||||||
Dividends to DowDuPont Inc. | Dividends to DowDuPont Inc. | — | (535) | ||||||||||||||||||||
Common control transaction | Common control transaction | — | 35 | ||||||||||||||||||||
Adoption of accounting standards | Adoption of accounting standards | — | (111) | ||||||||||||||||||||
Other | (2 | ) | (6 | ) | Other | (4) | (2) | ||||||||||||||||
Balance at end of period | 29,701 | 28,261 | Balance at end of period | 16,905 | 35,403 | ||||||||||||||||||
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss | ||||||||||||||||||||||
Balance at beginning of period | (9,885 | ) | (8,591 | ) | Balance at beginning of period | (10,246) | (9,885) | ||||||||||||||||
Other comprehensive income | 102 | 483 | |||||||||||||||||||||
Adoption of accounting standards (Note 1) | — | 20 | |||||||||||||||||||||
Other comprehensive income (loss) | Other comprehensive income (loss) | (283) | 102 | ||||||||||||||||||||
Balance at end of period | (9,783 | ) | (8,088 | ) | Balance at end of period | (10,529) | (9,783) | ||||||||||||||||
Unearned ESOP Shares | Unearned ESOP Shares | ||||||||||||||||||||||
Balance at beginning of period | (134 | ) | (189 | ) | Balance at beginning of period | (91) | (134) | ||||||||||||||||
Allocation of ESOP shares | 29 | 39 | Allocation of ESOP shares | 10 | 29 | ||||||||||||||||||
Balance at end of period | (105 | ) | (150 | ) | Balance at end of period | (81) | (105) | ||||||||||||||||
The Dow Chemical Company's stockholders' equity | 26,966 | 26,781 | |||||||||||||||||||||
The Dow Chemical Company's stockholder's equity | The Dow Chemical Company's stockholder's equity | 13,673 | 32,668 | ||||||||||||||||||||
Noncontrolling Interests | 1,180 | 1,190 | Noncontrolling Interests | 555 | 1,180 | ||||||||||||||||||
Total Equity | $ | 28,146 | $ | 27,971 | Total Equity | $ | 14,228 | $ | 33,848 |
Dow Inc. and Subsidiaries The Dow Chemical Company and Subsidiaries (Unaudited) |
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Results of Operations of AgCo and SpecCo | Three Months Ended | ||||
Mar 31, 2019 | |||||
In millions | |||||
Net sales | $ | 2,953 | |||
Cost of sales | 1,804 | ||||
Research and development expenses | 175 | ||||
Selling, general and administrative expenses | 262 | ||||
Amortization of intangibles | 61 | ||||
Restructuring and asset related charges - net | 78 | ||||
Equity in earnings of nonconsolidated affiliates | 28 | ||||
Sundry income (expense) - net | (18) | ||||
Interest income | 3 | ||||
Interest expense and amortization of debt discount | 7 | ||||
Income from discontinued operations before income taxes | $ | 579 | |||
Provision for income taxes | 134 | ||||
Income from discontinued operations, net of tax | $ | 445 |
Net Trade Sales by Segment and Business | Three Months Ended | ||||||||||||||||
In millions | Mar 31, 2020 | Mar 31, 2019 | |||||||||||||||
Hydrocarbons & Energy | $ | 1,219 | $ | 1,404 | |||||||||||||
Packaging and Specialty Plastics | 3,390 | 3,734 | |||||||||||||||
Packaging & Specialty Plastics | $ | 4,609 | $ | 5,138 | |||||||||||||
Industrial Solutions | $ | 1,054 | $ | 1,127 | |||||||||||||
Polyurethanes & Construction Chemicals | 1,988 | 2,350 | |||||||||||||||
Other | 3 | 3 | |||||||||||||||
Industrial Intermediates & Infrastructure | $ | 3,045 | $ | 3,480 | |||||||||||||
Coatings & Performance Monomers | $ | 828 | $ | 902 | |||||||||||||
Consumer Solutions | 1,237 | 1,380 | |||||||||||||||
Performance Materials & Coatings | $ | 2,065 | $ | 2,282 | |||||||||||||
Corporate | $ | 51 | $ | 69 | |||||||||||||
Total | $ | 9,770 | $ | 10,969 |
Net Trade Sales by Principal Product Group | Three Months Ended | |||||
In millions | Mar 31, 2019 | Mar 31, 2018 | ||||
Coatings & Performance Monomers | $ | 904 | $ | 954 | ||
Consumer Solutions | 1,365 | 1,363 | ||||
Crop Protection | 1,124 | 1,122 | ||||
Electronics & Imaging | 625 | 627 | ||||
Hydrocarbons & Energy | 1,380 | 1,779 | ||||
Industrial Biosciences | 119 | 135 | ||||
Industrial Solutions 1 | 1,104 | 1,156 | ||||
Nutrition & Health | 152 | 156 | ||||
Packaging and Specialty Plastics | 3,410 | 3,854 | ||||
Polyurethanes & CAV 1 | 2,297 | 2,557 | ||||
Safety & Construction | 424 | 444 | ||||
Seed | 323 | 371 | ||||
Transportation & Advanced Polymers | 284 | 304 | ||||
Corporate | 69 | 73 | ||||
Other | 2 | 4 | ||||
Total | $ | 13,582 | $ | 14,899 |
Net Trade Sales by Geographic Region | Three Months Ended | Net Trade Sales by Geographic Region | Three Months Ended | ||||||||||||||||||||
In millions | Mar 31, 2019 | Mar 31, 2018 | In millions | Mar 31, 2020 | Mar 31, 2019 | ||||||||||||||||||
U.S. & Canada | $ | 4,884 | $ | 5,468 | U.S. & Canada | $ | 3,550 | $ | 3,933 | ||||||||||||||
EMEA 1 | 4,211 | 4,765 | |||||||||||||||||||||
EMEAI 1 | EMEAI 1 | 3,411 | 3,882 | ||||||||||||||||||||
Asia Pacific | 3,202 | 3,256 | Asia Pacific | 1,845 | 2,101 | ||||||||||||||||||
Latin America | 1,285 | 1,410 | Latin America | 964 | 1,053 | ||||||||||||||||||
Total | $ | 13,582 | $ | 14,899 | Total | $ | 9,770 | $ | 10,969 |
Contract Assets and Liabilities | Mar 31, 2020 | Dec 31, 2019 | ||||||
In millions | ||||||||
Accounts and notes receivable - Trade | $ | 4,841 | $ | 4,844 | ||||
Contract assets - current 1 | $ | 22 | $ | 41 | ||||
Contract assets - noncurrent 2 | $ | 17 | $ | 4 | ||||
Contract liabilities - current 3 | $ | 196 | $ | 193 | ||||
Contract liabilities - noncurrent 4 | $ | 1,602 | $ | 1,607 |
Contract Balances | Mar 31, 2019 | Dec 31, 2018 | ||||
In millions | ||||||
Accounts and notes receivable - Trade | $ | 8,428 | $ | 8,246 | ||
Contract assets - current 1 | $ | 26 | $ | 37 | ||
Contract assets - noncurrent 2 | $ | 47 | $ | 47 | ||
Contract liabilities - current 3 | $ | 233 | $ | 165 | ||
Contract liabilities - noncurrent 4 | $ | 1,739 | $ | 1,390 |
DowDuPont Agriculture Division Program | Severance and Related Benefit Costs | Asset Write-downs and Write-offs | Total | ||||||
In millions | |||||||||
2018 restructuring charges | $ | 24 | $ | 1 | $ | 25 | |||
Charges against the reserve | — | (1 | ) | (1 | ) | ||||
Cash payments | (1 | ) | — | (1 | ) | ||||
Reserve balance at Dec 31, 2018 | $ | 23 | $ | — | $ | 23 | |||
Adjustments to the reserve | (4 | ) | — | (4 | ) | ||||
Cash payments | (8 | ) | — | (8 | ) | ||||
Reserve balance at Mar 31, 2019 | $ | 11 | $ | — | $ | 11 |
DowDuPont Synergy Program | Severance and Related Benefit Costs | Asset Write-downs and Write-offs | Costs Associated with Exit and Disposal Activities | Total | ||||||||||
In millions | ||||||||||||||
Reserve balance at Dec 31, 2018 | $ | 210 | $ | — | $ | 7 | $ | 217 | ||||||
Packaging & Specialty Plastics | $ | — | $ | — | $ | 1 | $ | 1 | ||||||
Corporate | 52 | 76 | 15 | 143 | ||||||||||
Total restructuring charges | $ | 52 | $ | 76 | $ | 16 | $ | 144 | ||||||
Charges against the reserve | — | (76) | — | (76) | ||||||||||
Cash payments | (79) | — | (4) | (83) | ||||||||||
Reserve balance at Mar 31, 2019 | $ | 183 | $ | — | $ | 19 | $ | 202 | ||||||
Performance Materials & Coatings | $ | — | $ | 22 | $ | — | $ | 22 | ||||||
Corporate | 25 | 7 | 5 | 37 | ||||||||||
Total restructuring charges | $ | 25 | $ | 29 | $ | 5 | $ | 59 | ||||||
Charges against the reserve | — | (29) | — | (29) | ||||||||||
Cash payments | (71) | — | (2) | (73) | ||||||||||
Reserve balance at Jun 30, 2019 | $ | 137 | $ | — | $ | 22 | $ | 159 | ||||||
Industrial Intermediates & Infrastructure | $ | — | $ | — | $ | 5 | $ | 5 | ||||||
Performance Materials & Coatings | — | 1 | — | 1 | ||||||||||
Corporate | 46 | 4 | — | 50 | ||||||||||
Total restructuring charges | $ | 46 | $ | 5 | $ | 5 | $ | 56 | ||||||
Charges against the reserve | — | (5) | — | (5) | ||||||||||
Cash payments | (77) | — | (6) | (83) | ||||||||||
Reserve balance at Sep 30, 2019 | $ | 106 | $ | — | $ | 21 | $ | 127 | ||||||
Industrial Intermediates & Infrastructure | $ | — | $ | 2 | $ | — | $ | 2 | ||||||
Performance Materials & Coatings | — | 5 | — | 5 | ||||||||||
Corporate | — | 26 | — | 26 | ||||||||||
Total restructuring charges | $ | — | $ | 33 | $ | — | $ | 33 | ||||||
Charges against the reserve | — | (33) | — | (33) | ||||||||||
Cash payments | (52) | — | (4) | (56) | ||||||||||
Reserve balance at Dec 31, 2019 | $ | 54 | $ | — | $ | 17 | $ | 71 | ||||||
Corporate | $ | 90 | $ | — | $ | — | $ | 90 | ||||||
Total restructuring charges | $ | 90 | $ | — | $ | — | $ | 90 | ||||||
Cash payments | (42) | — | (1) | (43) | ||||||||||
Reserve balance at Mar 31, 2020 | $ | 102 | $ | — | $ | 16 | $ | 118 |
DowDuPont Synergy Program | Severance and Related Benefit Costs | Asset Write-downs and Write-offs | Costs Associated with Exit and Disposal Activities | Total | ||||||||
In millions | ||||||||||||
Reserve balance at Dec 31, 2018 | $ | 262 | $ | — | $ | 65 | $ | 327 | ||||
2019 restructuring charges | 72 | 100 | 52 | 224 | ||||||||
Charges against the reserve | — | (100 | ) | — | (100 | ) | ||||||
Cash payments | (97 | ) | — | (29 | ) | (126 | ) | |||||
Reserve balance at Mar 31, 2019 | $ | 237 | $ | — | $ | 88 | $ | 325 |
Investments in Company-owned Life Insurance | Mar 31, 2020 | Dec 31, 2019 | ||||||
In millions | ||||||||
Gross cash value | $ | 828 | $ | 820 | ||||
Less: Existing drawdowns 1 | $ | 287 | $ | 85 | ||||
Investment in Company-owned life insurance 2 | $ | 541 | $ | 735 |
Net Income for Earnings Per Share Calculations | Three Months Ended | ||||||||||||||||
In millions | Mar 31, 2020 | Mar 31, 2019 | |||||||||||||||
Income from continuing operations, net of tax | $ | 258 | $ | 156 | |||||||||||||
Net income attributable to noncontrolling interests - continuing operations | 19 | 32 | |||||||||||||||
Net income attributable to participating securities - continuing operations 1 | 2 | — | |||||||||||||||
Income from continuing operations attributable to common stockholders | $ | 237 | $ | 124 | |||||||||||||
Income from discontinued operations, net of tax | $ | — | $ | 445 | |||||||||||||
Net income attributable to noncontrolling interests - discontinued operations | — | 13 | |||||||||||||||
Income from discontinued operations attributable to common stockholders | $ | — | $ | 432 | |||||||||||||
Net income attributable to common stockholders | $ | 237 | $ | 556 |
Earnings Per Share Calculations - Basic | Three Months Ended | ||||||||||||||||
Dollars per share | Mar 31, 2020 | Mar 31, 2019 | |||||||||||||||
Income from continuing operations attributable to common stockholders | $ | 0.32 | $ | 0.16 | |||||||||||||
Income from discontinued operations attributable to common stockholders | — | 0.58 | |||||||||||||||
Net income attributable to common stockholders | $ | 0.32 | $ | 0.74 |
Earnings Per Share Calculations - Diluted | Three Months Ended | ||||||||||||||||
Dollars per share | Mar 31, 2020 | Mar 31, 2019 | |||||||||||||||
Income from continuing operations attributable to common stockholders | $ | 0.32 | $ | 0.16 | |||||||||||||
Income from discontinued operations attributable to common stockholders | — | 0.58 | |||||||||||||||
Net income attributable to common stockholders | $ | 0.32 | $ | 0.74 |
Share Count Information | Three Months Ended | ||||||||||||||||
Shares in millions | Mar 31, 2020 | Mar 31, 2019 | |||||||||||||||
Weighted-average common shares - basic 2 | 740.2 | 747.2 | |||||||||||||||
Plus dilutive effect of equity compensation plans | 1.8 | — | |||||||||||||||
Weighted-average common shares - diluted 2 | 742.0 | 747.2 | |||||||||||||||
Stock options and restricted stock units excluded from EPS calculations 3 | 15.5 | — |
Inventories | Mar 31, 2020 | Dec 31, 2019 | ||||||
In millions | ||||||||
Finished goods | $ | 3,607 | $ | 3,505 | ||||
Work in process | 1,080 | 1,122 | ||||||
Raw materials | 590 | 628 | ||||||
Supplies | 860 | 845 | ||||||
Total | $ | 6,137 | $ | 6,100 | ||||
Adjustment of inventories to a LIFO basis | 187 | 114 | ||||||
Total inventories | $ | 6,324 | $ | 6,214 |
Inventories | Mar 31, 2019 | Dec 31, 2018 | ||||
In millions | ||||||
Finished goods | $ | 5,703 | $ | 5,640 | ||
Work in process | 2,239 | 2,214 | ||||
Raw materials | 940 | 941 | ||||
Supplies | 891 | 880 | ||||
Total | $ | 9,773 | $ | 9,675 | ||
Adjustment of inventories to a LIFO basis | (265 | ) | (415 | ) | ||
Total inventories | $ | 9,508 | $ | 9,260 |
Investments in Nonconsolidated Affiliates | Mar 31, 2020 | Dec 31, 2019 | ||||||
In millions | ||||||||
Investment in nonconsolidated affiliates | $ | 1,235 | $ | 1,404 | ||||
Other noncurrent obligations | (317) | (80) | ||||||
Net investment in nonconsolidated affiliates | $ | 918 | $ | 1,324 |
Investments in Nonconsolidated Affiliates | Mar 31, 2019 | Dec 31, 2018 | ||||
In millions | ||||||
Investment in nonconsolidated affiliates | $ | 3,321 | $ | 3,823 | ||
Other noncurrent obligations | (870 | ) | (495 | ) | ||
Net investment in nonconsolidated affiliates | $ | 2,451 | $ | 3,328 |
Investment in the HSC Group | Investment | ||||||
In millions | Balance Sheet Classification | Mar 31, 2019 | Dec 31, 2018 | ||||
Hemlock Semiconductor L.L.C. | Other noncurrent obligations | $ | (658 | ) | $ | (495 | ) |
DC HSC Holdings LLC | Investment in nonconsolidated affiliates | $ | 485 | $ | 535 |
Goodwill | Packaging & Specialty Plastics | Industrial Intermediates & Infrastructure | Performance Materials & Coatings | Total | ||||||||||
In millions | ||||||||||||||
Net goodwill at Dec 31, 2019 | $ | 5,109 | $ | 1,100 | $ | 2,587 | $ | 8,796 | ||||||
Foreign currency impact | (1) | (1) | (14) | (16) | ||||||||||
Net goodwill at Mar 31, 2020 | $ | 5,108 | $ | 1,099 | $ | 2,573 | $ | 8,780 |
Goodwill | |||
In millions | |||
Net goodwill at Dec 31, 2018 | $ | 13,848 | |
Foreign currency impact | (36 | ) | |
Net goodwill at Mar 31, 2019 | $ | 13,812 |
Other Intangible Assets | Mar 31, 2020 | Dec 31, 2019 | ||||||||||||||||||||||||||||||
In millions | Gross Carrying Amount | Accum Amort | Net | Gross Carrying Amount | Accum Amort | Net | ||||||||||||||||||||||||||
Intangible assets with finite lives: | ||||||||||||||||||||||||||||||||
Developed technology | $ | 2,636 | $ | (1,518) | $ | 1,118 | $ | 2,634 | $ | (1,467) | $ | 1,167 | ||||||||||||||||||||
Software | 1,458 | (915) | 543 | 1,449 | (893) | 556 | ||||||||||||||||||||||||||
Trademarks/tradenames | 352 | (342) | 10 | 352 | (342) | 10 | ||||||||||||||||||||||||||
Customer-related | 3,184 | (1,219) | 1,965 | 3,207 | (1,184) | 2,023 | ||||||||||||||||||||||||||
Total other intangible assets, finite lives | $ | 7,630 | $ | (3,994) | $ | 3,636 | $ | 7,642 | $ | (3,886) | $ | 3,756 | ||||||||||||||||||||
In-process research and development | — | — | — | 3 | — | 3 | ||||||||||||||||||||||||||
Total other intangible assets | $ | 7,630 | $ | (3,994) | $ | 3,636 | $ | 7,645 | $ | (3,886) | $ | 3,759 |
Other Intangible Assets | Mar 31, 2019 | Dec 31, 2018 | ||||||||||||||||
In millions | Gross Carrying Amount | Accum Amort | Net | Gross Carrying Amount | Accum Amort | Net | ||||||||||||
Intangible assets with finite lives: | ||||||||||||||||||
Developed technology | $ | 3,253 | $ | (1,996 | ) | $ | 1,257 | $ | 3,255 | $ | (1,934 | ) | $ | 1,321 | ||||
Software | 1,539 | (900 | ) | 639 | 1,529 | (876 | ) | 653 | ||||||||||
Trademarks/tradenames | 680 | (638 | ) | 42 | 688 | (631 | ) | 57 | ||||||||||
Customer-related | 4,898 | (2,211 | ) | 2,687 | 4,911 | (2,151 | ) | 2,760 | ||||||||||
Other | 236 | (167 | ) | 69 | 243 | (170 | ) | 73 | ||||||||||
Total other intangible assets, finite lives | $ | 10,606 | $ | (5,912 | ) | $ | 4,694 | $ | 10,626 | $ | (5,762 | ) | $ | 4,864 | ||||
In-process research and development | 49 | — | 49 | 49 | — | 49 | ||||||||||||
Total other intangible assets | $ | 10,655 | $ | (5,912 | ) | $ | 4,743 | $ | 10,675 | $ | (5,762 | ) | $ | 4,913 |
Amortization Expense from Continuing Operations | Three Months Ended | ||||||||||||||||
In millions | Mar 31, 2020 | Mar 31, 2019 | |||||||||||||||
Other intangible assets, excluding software | $ | 100 | $ | 116 | |||||||||||||
Software, included in “Cost of sales” | $ | 24 | $ | 24 |
Amortization Expense | Three Months Ended | |||||
In millions | Mar 31, 2019 | Mar 31, 2018 | ||||
Other intangible assets, excluding software | $ | 154 | $ | 159 | ||
Software, included in “Cost of sales” | $ | 25 | $ | 23 |
Estimated Amortization Expense from Continuing Operations | ||||||||
In millions | ||||||||
2020 | $ | 491 | ||||||
2021 | $ | 467 | ||||||
2022 | $ | 404 | ||||||
2023 | $ | 372 | ||||||
2024 | $ | 354 | ||||||
2025 | $ | 266 |
Estimated Amortization Expense | |||
In millions | |||
2019 | $ | 659 | |
2020 | $ | 623 | |
2021 | $ | 594 | |
2022 | $ | 525 | |
2023 | $ | 492 | |
2024 | $ | 456 |
Cash Proceeds | Three Months Ended | |||||
In millions | Mar 31, 2019 | Mar 31, 2018 | ||||
Interests in conduits 1 | $ | — | $ | 445 |
Notes Payable | Mar 31, 2020 | Dec 31, 2019 | ||||||
In millions | ||||||||
Commercial paper | $ | 250 | $ | 151 | ||||
Notes payable to banks and other lenders 1 | 1,240 | 435 | ||||||
Total notes payable | $ | 1,490 | $ | 586 | ||||
Period-end average interest rates | 3.78 | % | 6.30 | % |
Long-Term Debt | 2020 Average Rate | Mar 31, 2020 | 2019 Average Rate | Dec 31, 2019 | ||||||||||
In millions | ||||||||||||||
Promissory notes and debentures: | ||||||||||||||
Final maturity 2020 | 8.44 | % | $ | 76 | 8.44 | % | $ | 76 | ||||||
Final maturity 2021 | 8.95 | % | 173 | 8.95 | % | 174 | ||||||||
Final maturity 2022 | 8.64 | % | 121 | 3.50 | % | 1,372 | ||||||||
Final maturity 2023 | 7.64 | % | 325 | 7.64 | % | 325 | ||||||||
Final maturity 2024 | 3.37 | % | 1,397 | 3.37 | % | 1,397 | ||||||||
Final maturity 2025 | 5.26 | % | 662 | 5.26 | % | 662 | ||||||||
Final maturity 2026 and thereafter | 5.73 | % | 8,888 | 5.73 | % | 8,820 | ||||||||
Other facilities: | ||||||||||||||
U.S. dollar loans | 1.74 | % | 1,250 | 2.55 | % | 2,000 | ||||||||
Foreign currency notes and loans, various rates and maturities | 1.41 | % | 3,040 | 3.26 | % | 592 | ||||||||
InterNotes®, varying maturities through 2050 | 3.44 | % | 702 | 3.44 | % | 928 | ||||||||
Finance lease obligations 1 | 418 | 395 | ||||||||||||
Unamortized debt discount and issuance costs | (355) | (331) | ||||||||||||
Long-term debt due within one year 2 | (384) | (435) | ||||||||||||
Long-term debt | $ | 16,313 | $ | 15,975 |
Maturities of Long-Term Debt for Next Five Years at Mar 31, 2020 | ||||||||
In millions | ||||||||
2020 | $ | 359 | ||||||
2021 | $ | 491 | ||||||
2022 | $ | 225 | ||||||
2023 1 | $ | 1,693 | ||||||
2024 | $ | 1,504 | ||||||
2025 | $ | 780 |
Notes Payable | Mar 31, 2019 | Dec 31, 2018 | ||||
In millions | ||||||
Commercial paper | $ | — | $ | 10 | ||
Notes payable to banks and other lenders | 317 | 295 | ||||
Total notes payable | $ | 317 | $ | 305 | ||
Period-end average interest rates | 12.09 | % | 8.61 | % |
Long-Term Debt | 2019 Average Rate | Mar 31, 2019 | 2018 Average Rate | Dec 31, 2018 | ||||||
In millions | ||||||||||
Promissory notes and debentures: | ||||||||||
Final maturity 2019 | 9.80 | % | $ | 7 | 9.80 | % | $ | 7 | ||
Final maturity 2020 | 4.46 | % | 1,547 | 4.46 | % | 1,547 | ||||
Final maturity 2021 | 4.71 | % | 1,424 | 4.71 | % | 1,424 | ||||
Final maturity 2022 | 3.50 | % | 1,372 | 3.50 | % | 1,373 | ||||
Final maturity 2023 | 7.64 | % | 325 | 7.64 | % | 325 | ||||
Final maturity 2024 | 3.50 | % | 896 | 3.50 | % | 896 | ||||
Final maturity 2025 and thereafter | 5.98 | % | 7,963 | 5.98 | % | 7,963 | ||||
Other facilities: | ||||||||||
U.S. dollar loans, various rates and maturities | 3.52 | % | 4,533 | 3.59 | % | 4,533 | ||||
Foreign currency loans, various rates and maturities | 3.19 | % | 714 | 3.21 | % | 713 | ||||
Medium-term notes, varying maturities through 2025 | 3.33 | % | 703 | 3.26 | % | 778 | ||||
Finance lease obligations | 369 | 369 | ||||||||
Unamortized debt discount and issuance costs | (324 | ) | (334 | ) | ||||||
Long-term debt due within one year 1 | (2,369 | ) | (340 | ) | ||||||
Long-term debt | $ | 17,160 | $ | 19,254 |
Maturities of Long-Term Debt for Next Five Years at Mar 31, 2019 | |||
In millions | |||
2019 1 | $ | 2,307 | |
2020 | $ | 1,839 | |
2021 2 | $ | 4,249 | |
2022 | $ | 1,507 | |
2023 | $ | 500 | |
2024 | $ | 968 |
Committed and Available Credit Facilities at Mar 31, 2020 | ||||||||||||||||||||||||||
In millions | Committed Credit | Credit Available | Maturity Date | Interest | ||||||||||||||||||||||
Five Year Competitive Advance and Revolving Credit Facility | $ | 5,000 | $ | 5,000 | October 2024 | Floating rate | ||||||||||||||||||||
Term Loan Facility 1 | 1,250 | — | September 2023 | Floating rate | ||||||||||||||||||||||
European Securitization Facility 2 | 440 | 440 | October 2020 | Floating rate | ||||||||||||||||||||||
Bilateral Revolving Credit Facility | 200 | 200 | July 2020 | Floating rate | ||||||||||||||||||||||
Bilateral Revolving Credit Facility | 100 | 100 | August 2020 | Floating rate | ||||||||||||||||||||||
Bilateral Revolving Credit Facility | 300 | 300 | December 2020 | Floating rate | ||||||||||||||||||||||
Bilateral Revolving Credit Facility | 300 | 300 | December 2021 | Floating rate | ||||||||||||||||||||||
Bilateral Revolving Credit Facility | 150 | 150 | March 2022 | Floating rate | ||||||||||||||||||||||
Bilateral Revolving Credit Facility | 100 | 100 | October 2024 | Floating rate | ||||||||||||||||||||||
Bilateral Revolving Credit Facility | 100 | 100 | October 2024 | Floating rate | ||||||||||||||||||||||
Bilateral Revolving Credit Facility | 200 | 200 | November 2024 | Floating rate | ||||||||||||||||||||||
Bilateral Revolving Credit Facility | 100 | 100 | March 2025 | Floating rate | ||||||||||||||||||||||
Bilateral Revolving Credit Facility | 250 | 250 | March 2025 | Floating rate | ||||||||||||||||||||||
Bilateral Revolving Credit Facility | 275 | 275 | March 2025 | Floating rate | ||||||||||||||||||||||
Total committed and available credit facilities | $ | 8,765 | $ | 7,515 |
Committed and Available Credit Facilities at Mar 31, 2019 | ||||||||
In millions | Committed Credit | Credit Available | Maturity Date | Interest | ||||
Five Year Competitive Advance and Revolving Credit Facility | $ | 5,000 | $ | 5,000 | October 2023 | Floating rate | ||
Term Loan Facility 1 | 2,000 | — | April 2019 | Floating rate | ||||
Term Loan Facility 2 | 2,500 | — | December 2021 | Floating rate | ||||
North American Securitization Facility | 800 | 800 | September 2019 | Floating rate | ||||
European Securitization Facility 3 | 450 | 450 | October 2020 | Floating rate | ||||
Bilateral Revolving Credit Facility | 100 | 100 | October 2019 | Floating rate | ||||
Bilateral Revolving Credit Facility 4 | 100 | 100 | March 2020 | Floating rate | ||||
Bilateral Revolving Credit Facility | 100 | 100 | March 2020 | Floating rate | ||||
Bilateral Revolving Credit Facility | 280 | 280 | March 2020 | Floating rate | ||||
Bilateral Revolving Credit Facility | 100 | 100 | March 2020 | Floating rate | ||||
Bilateral Revolving Credit Facility | 200 | 200 | March 2020 | Floating rate | ||||
Bilateral Revolving Credit Facility | 200 | 200 | May 2020 | Floating rate | ||||
Bilateral Revolving Credit Facility | 200 | 200 | July 2020 | Floating rate | ||||
Bilateral Revolving Credit Facility | 100 | 100 | August 2020 | Floating rate | ||||
Total committed and available credit facilities | $ | 12,130 | $ | 7,630 |
Guarantees | Mar 31, 2020 | Dec 31, 2019 | ||||||||||||||||||||||||||||||
In millions | Final Expiration | Maximum Future Payments | Recorded Liability | Final Expiration | Maximum Future Payments | Recorded Liability | ||||||||||||||||||||||||||
Guarantees | 2023 | $ | 3,950 | $ | 10 | 2023 | $ | 3,952 | $ | 10 |
Guarantees | Mar 31, 2019 | Dec 31, 2018 | ||||||||||||
In millions | Final Expiration | Maximum Future Payments | Recorded Liability | Final Expiration | Maximum Future Payments | Recorded Liability | ||||||||
Guarantees | 2023 | $ | 4,514 | $ | 15 | 2023 | $ | 4,523 | $ | 25 |
Lease Cost | Three Months Ended | ||||||||||
In millions | Mar 31, 2020 | Mar 31, 2019 | |||||||||
Operating lease cost | $ | 120 | $ | 125 | |||||||
Finance lease cost | |||||||||||
Amortization of right-of-use assets - finance | $ | 13 | $ | 6 | |||||||
Interest on lease liabilities - finance | 6 | 6 | |||||||||
Total finance lease cost | $ | 19 | $ | 12 | |||||||
Short-term lease cost | 54 | 50 | |||||||||
Variable lease cost | 64 | 44 | |||||||||
Sublease income | (1) | (1) | |||||||||
Total lease cost | $ | 256 | $ | 230 |
Lease Cost | Three Months Ended Mar 31, 2019 | ||
In millions | |||
Operating lease cost | $ | 147 | |
Finance lease cost | |||
Amortization of right-of-use assets - finance | 6 | ||
Interest on lease liabilities - finance | 6 | ||
Total finance lease cost | $ | 12 | |
Short-term lease cost | 55 | ||
Variable lease cost | 85 | ||
Sublease income | (1 | ) | |
Total lease cost | $ | 298 |
Other Lease Information | Three Months Ended | ||||||||||
In millions | Mar 31, 2020 | Mar 31, 2019 | |||||||||
Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||
Operating cash flows for operating leases | $ | 126 | $ | 133 | |||||||
Operating cash flows for finance leases | $ | 6 | $ | 6 | |||||||
Financing cash flows for finance leases | $ | 8 | $ | 3 | |||||||
Other Lease Information | Three Months Ended Mar 31, 2019 | ||
In millions | |||
Cash paid for amounts included in the measurement of lease liabilities: | |||
Operating cash flows from operating leases | $ | 154 | |
Operating cash flows from finance leases | $ | 6 | |
Financing cash flows from finance leases | $ | 3 |
Lease Position | Balance Sheet Classification | Mar 31, 2020 | Dec 31, 2019 | ||||||||
In millions | |||||||||||
Right-of-use assets obtained in exchange for lease obligations: | |||||||||||
Operating leases 1 | $ | 38 | $ | 2,476 | |||||||
Finance leases | $ | 34 | $ | 89 | |||||||
Assets | |||||||||||
Operating lease assets | Operating lease right-of-use assets | $ | 1,942 | $ | 2,072 | ||||||
Finance lease assets | Property | 526 | 486 | ||||||||
Finance lease amortization | Accumulated depreciation | (179) | (167) | ||||||||
Total lease assets | $ | 2,289 | $ | 2,391 | |||||||
Liabilities | |||||||||||
Current | |||||||||||
Operating | Operating lease liabilities - current | $ | 384 | $ | 421 | ||||||
Finance | Long-term debt due within one year | 49 | 32 | ||||||||
Noncurrent | |||||||||||
Operating | Operating lease liabilities - noncurrent | 1,622 | 1,739 | ||||||||
Finance | Long-Term Debt | 369 | 363 | ||||||||
Total lease liabilities | $ | 2,424 | $ | 2,555 |
Lease Term and Discount Rate | Mar 31, 2020 | Dec 31, 2019 | ||||||
Weighted-average remaining lease term | ||||||||
Operating leases | 8.0 years | 8.0 years | ||||||
Finance leases | 11.5 years | 12.3 years | ||||||
Weighted-average discount rate | ||||||||
Operating leases | 4.10 | % | 4.09 | % | ||||
Finance leases | 6.04 | % | 6.28 | % |
Lease Position | Balance Sheet Classification | Mar 31, 2019 | ||
In millions | ||||
Right-of-use assets obtained in exchange for lease obligations: | ||||
Operating leases 1 | $ | 2,714 | ||
Assets | ||||
Operating lease assets | Operating lease right-of-use assets | $ | 2,584 | |
Finance lease assets | Property | 437 | ||
Finance lease amortization | Accumulated depreciation | (143 | ) | |
Total lease assets | $ | 2,878 | ||
Liabilities | ||||
Current | ||||
Operating | Operating lease liabilities - current | $ | 477 | |
Finance | Long-term debt due within one year | 20 | ||
Noncurrent | ||||
Operating | Operating lease liabilities - noncurrent | 2,126 | ||
Finance | Long-Term Debt | 349 | ||
Total lease liabilities | $ | 2,972 |
Maturities of Lease Liabilities | Mar 31, 2020 | ||||||||||
Operating Leases | Finance Leases | ||||||||||
In millions | |||||||||||
2020 | $ | 338 | $ | 56 | |||||||
2021 | 409 | 64 | |||||||||
2022 | 349 | 57 | |||||||||
2023 | 281 | 82 | |||||||||
2024 | 218 | 29 | |||||||||
2025 and thereafter | 806 | 310 | |||||||||
Total future undiscounted lease payments | $ | 2,401 | $ | 598 | |||||||
Less imputed interest | 395 | 180 | |||||||||
Total present value of lease liabilities | $ | 2,006 | $ | 418 |
Maturities of Lease Liabilities at Mar 31, 2019 | Operating Leases | Finance Leases | ||||
In millions | ||||||
2019 | $ | 437 | $ | 38 | ||
2020 | 515 | 48 | ||||
2021 | 421 | 46 | ||||
2022 | 343 | 44 | ||||
2023 | 291 | 71 | ||||
2024 and thereafter | 1,157 | 309 | ||||
Total future undiscounted lease payments | $ | 3,164 | $ | 556 | ||
Less imputed interest | 561 | 187 | ||||
Total present value of lease liabilities | $ | 2,603 | $ | 369 |
Minimum Lease Commitments at Dec 31, 2018 | |||
In millions | |||
2019 | $ | 412 | |
2020 | 369 | ||
2021 | 328 | ||
2022 | 297 | ||
2023 | 253 | ||
2024 and thereafter | 978 | ||
Total | $ | 2,637 |
Lease Guarantees | Mar 31, 2020 | Dec 31, 2019 | ||||||||||||||||||||||||||||||
In millions | Final Expiration | Maximum Future Payments | Recorded Liability | Final Expiration | Maximum Future Payments | Recorded Liability | ||||||||||||||||||||||||||
Residual value guarantees | 2028 | $ | 788 | $ | — | 2028 | $ | 792 | $ | — |
Lease Guarantees | March 31, 2019 | December 31, 2018 | ||||||||||||
In millions | Final Expiration | Maximum Future Payments | Recorded Liability | Final Expiration | Maximum Future Payments | Recorded Liability | ||||||||
Residual value guarantees | 2028 | $ | 885 | $ | — | 2028 | $ | 885 | $ | 130 |
Accumulated Other Comprehensive Loss | Unrealized Gains (Losses) on Investments | Cumulative Translation Adj | Pension and Other Postretire Benefits | Derivative Instruments | Total Accum Other Comp Loss | ||||||||||
In millions | |||||||||||||||
Balance at Jan 1, 2018 | $ | 17 | $ | (1,481 | ) | $ | (6,998 | ) | $ | (109 | ) | $ | (8,571 | ) | |
Other comprehensive income (loss) before reclassifications | (26 | ) | 376 | — | (16 | ) | 334 | ||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | 1 | — | 126 | 22 | 149 | ||||||||||
Net other comprehensive income (loss) | $ | (25 | ) | $ | 376 | $ | 126 | $ | 6 | $ | 483 | ||||
Balance at Mar 31, 2018 | $ | (8 | ) | $ | (1,105 | ) | $ | (6,872 | ) | $ | (103 | ) | $ | (8,088 | ) |
Balance at Jan 1, 2019 | $ | (51 | ) | $ | (1,813 | ) | $ | (7,965 | ) | $ | (56 | ) | $ | (9,885 | ) |
Other comprehensive income (loss) before reclassifications | 68 | (13 | ) | — | (68 | ) | (13 | ) | |||||||
Amounts reclassified from accumulated other comprehensive loss | (1 | ) | (18 | ) | 141 | (7 | ) | 115 | |||||||
Net other comprehensive income (loss) | $ | 67 | $ | (31 | ) | $ | 141 | $ | (75 | ) | $ | 102 | |||
Balance at Mar 31, 2019 | $ | 16 | $ | (1,844 | ) | $ | (7,824 | ) | $ | (131 | ) | $ | (9,783 | ) |
Accumulated Other Comprehensive Loss | Three Months Ended | ||||||||||||||||
In millions | Mar 31, 2020 | Mar 31, 2019 | |||||||||||||||
Unrealized Gains (Losses) on Investments | |||||||||||||||||
Beginning balance | $ | 64 | $ | (51) | |||||||||||||
Unrealized gains (losses) on investments | (118) | 86 | |||||||||||||||
Less: Tax (expense) benefit | 25 | (18) | |||||||||||||||
Net unrealized gains (losses) on investments | (93) | 68 | |||||||||||||||
(Gains) losses reclassified from AOCL to net income 1 | (9) | (1) | |||||||||||||||
Less: Tax expense (benefit) 2 | 2 | — | |||||||||||||||
Net (gains) losses reclassified from AOCL to net income | (7) | (1) | |||||||||||||||
Other comprehensive income (loss), net of tax | (100) | 67 | |||||||||||||||
Ending balance | $ | (36) | $ | 16 | |||||||||||||
Cumulative Translation Adjustment | |||||||||||||||||
Beginning balance | $ | (1,135) | $ | (1,813) | |||||||||||||
Gains (losses) on foreign currency translation | (161) | (12) | |||||||||||||||
Less: Tax (expense) benefit | 12 | (1) | |||||||||||||||
Net gains (losses) on foreign currency translation | (149) | (13) | |||||||||||||||
(Gains) losses reclassified from AOCL to net income 3 | (14) | (18) | |||||||||||||||
Other comprehensive income (loss), net of tax | (163) | (31) | |||||||||||||||
Ending balance | $ | (1,298) | $ | (1,844) | |||||||||||||
Pension and Other Postretirement Benefits | |||||||||||||||||
Beginning balance | $ | (8,781) | $ | (7,965) | |||||||||||||
Amortization and recognition of net loss and prior service credits 4 | 185 | 166 | |||||||||||||||
Less: Tax expense (benefit) 2 | (43) | (25) | |||||||||||||||
Other comprehensive income (loss), net of tax | 142 | 141 | |||||||||||||||
Ending balance | $ | (8,639) | $ | (7,824) | |||||||||||||
Derivative Instruments | |||||||||||||||||
Beginning balance | $ | (394) | $ | (56) | |||||||||||||
Gains (losses) on derivative instruments | (176) | (95) | |||||||||||||||
Less: Tax (expense) benefit | 10 | 27 | |||||||||||||||
Net gains (losses) on derivative instruments | (166) | (68) | |||||||||||||||
(Gains) losses reclassified from AOCL to net income 5 | 7 | (7) | |||||||||||||||
Less: Tax expense (benefit) 2 | (3) | — | |||||||||||||||
Net (gains) losses reclassified from AOCL to net income | 4 | (7) | |||||||||||||||
Other comprehensive income (loss), net of tax | (162) | (75) | |||||||||||||||
Ending balance | $ | (556) | $ | (131) | |||||||||||||
Total AOCL ending balance | $ | (10,529) | $ | (9,783) |
Tax Benefit (Expense) 1 | Three Months Ended | |||||
In millions | Mar 31, 2019 | Mar 31, 2018 | ||||
Unrealized gains (losses) on investments | $ | (18 | ) | $ | 6 | |
Cumulative translation adjustments | (1 | ) | 5 | |||
Pension and other postretirement benefit plans | (25 | ) | (28 | ) | ||
Derivative instruments | 27 | 3 | ||||
Tax expense from income taxes related to other comprehensive income (loss) items | $ | (17 | ) | $ | (14 | ) |
Reclassifications Out of Accumulated Other Comprehensive Loss | Three Months Ended | Consolidated Statements of Income Classification | |||||
Mar 31, 2019 | Mar 31, 2018 | ||||||
In millions | |||||||
Unrealized (gains) losses on investments | $ | (1 | ) | $ | 2 | See (1) below | |
Tax benefit | — | (1 | ) | See (2) below | |||
After tax | $ | (1 | ) | $ | 1 | ||
Cumulative translation adjustments | $ | (18 | ) | $ | — | See (3) below | |
Pension and other postretirement benefit plans | $ | 166 | $ | 154 | See (4) below | ||
Tax benefit | (25 | ) | (28 | ) | See (2) below | ||
After tax | $ | 141 | $ | 126 | |||
Derivative instruments | $ | (7 | ) | $ | 27 | See (5) below | |
Tax benefit | — | (5 | ) | See (2) below | |||
After tax | $ | (7 | ) | $ | 22 | ||
Total reclassifications for the period, after tax | $ | 115 | $ | 149 |
Noncontrolling Interests | Three Months Ended | |||||||||||||||||||||||||
In millions | Mar 31, 2020 | Mar 31, 2019 | ||||||||||||||||||||||||
Balance at beginning of period | $ | 553 | $ | 1,138 | ||||||||||||||||||||||
Net income attributable to noncontrolling interests - continuing operations | 19 | 32 | ||||||||||||||||||||||||
Net income attributable to noncontrolling interests - discontinued operations | — | 13 | ||||||||||||||||||||||||
Distributions to noncontrolling interests 1 | (1) | (9) | ||||||||||||||||||||||||
Cumulative translation adjustments | (16) | 7 | ||||||||||||||||||||||||
Other | — | (1) | ||||||||||||||||||||||||
Balance at end of period | $ | 555 | $ | 1,180 |
Noncontrolling Interests | Three Months Ended | |||||
In millions | Mar 31, 2019 | Mar 31, 2018 | ||||
Balance at beginning of period | $ | 1,138 | $ | 1,186 | ||
Net income attributable to noncontrolling interests | 45 | 35 | ||||
Distributions to noncontrolling interests | (9 | ) | (24 | ) | ||
Cumulative translation adjustments | 7 | (6 | ) | |||
Other | (1 | ) | (1 | ) | ||
Balance at end of period | $ | 1,180 | $ | 1,190 |
Net Periodic Benefit Cost for All Significant Plans | Three Months Ended | ||||||||||||||||
In millions | Mar 31, 2020 | Mar 31, 2019 | |||||||||||||||
Defined Benefit Pension Plans: | |||||||||||||||||
Service cost | $ | 99 | $ | 112 | |||||||||||||
Interest cost | 192 | 241 | |||||||||||||||
Expected return on plan assets | (414) | (417) | |||||||||||||||
Amortization of prior service credit | (5) | (6) | |||||||||||||||
Amortization of net loss | 192 | 132 | |||||||||||||||
Net periodic benefit cost | $ | 64 | $ | 62 | |||||||||||||
Less: Discontinued operations | — | 21 | |||||||||||||||
Net periodic benefit cost - continuing operations | $ | 64 | $ | 41 | |||||||||||||
Other Postretirement Benefit Plans: | |||||||||||||||||
Service cost | $ | 2 | $ | 2 | |||||||||||||
Interest cost | 9 | 14 | |||||||||||||||
Amortization of net gain | (2) | (6) | |||||||||||||||
Net periodic benefit cost | $ | 9 | $ | 10 |
Net Periodic Benefit Cost for All Significant Plans | Three Months Ended | |||||
In millions | Mar 31, 2019 | Mar 31, 2018 | ||||
Defined Benefit Pension Plans: | ||||||
Service cost | $ | 112 | $ | 133 | ||
Interest cost | 241 | 218 | ||||
Expected return on plan assets | (417 | ) | (406 | ) | ||
Amortization of prior service credit | (6 | ) | (6 | ) | ||
Amortization of net loss | 132 | 171 | ||||
Net periodic benefit cost | $ | 62 | $ | 110 | ||
Other Postretirement Benefits: | ||||||
Service cost | $ | 2 | $ | 3 | ||
Interest cost | 14 | 11 | ||||
Amortization of net gain | (6 | ) | (6 | ) | ||
Net periodic benefit cost | $ | 10 | $ | 8 |
Fair Value of Financial Instruments | Mar 31, 2019 | Dec 31, 2018 | Fair Value of Financial Instruments | Mar 31, 2020 | Dec 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
In millions | Cost | Gain | Loss | Fair Value | Cost | Gain | Loss | Fair Value | In millions | Cost | Gain | Loss | Fair Value | Cost | Gain | Loss | Fair Value | |||||||||||||||||||||||||||||||||||||||||||||||||||
Cash equivalents | $ | 345 | $ | — | $ | — | $ | 345 | $ | 566 | $ | — | $ | — | $ | 566 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash equivalents: | Cash equivalents: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Held-to-maturity securities 1 | Held-to-maturity securities 1 | $ | 1,233 | $ | — | $ | — | $ | 1,233 | $ | 220 | $ | — | $ | — | $ | 220 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Money market funds | Money market funds | 573 | — | — | 573 | 408 | — | — | 408 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total cash equivalents | Total cash equivalents | $ | 1,806 | $ | — | $ | — | $ | 1,806 | $ | 628 | $ | — | $ | — | $ | 628 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Marketable securities | $ | 101 | $ | — | $ | — | $ | 101 | $ | 100 | $ | — | $ | — | $ | 100 | Marketable securities | $ | 1 | $ | — | $ | — | $ | 1 | $ | 21 | $ | — | $ | — | $ | 21 | |||||||||||||||||||||||||||||||||||
Other investments: | Other investments: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt securities: | Debt securities: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Government debt 1 | $ | 694 | $ | 17 | $ | (9 | ) | $ | 702 | $ | 714 | $ | 9 | $ | (23 | ) | $ | 700 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Government debt 2 | Government debt 2 | $ | 458 | $ | 37 | $ | (33) | $ | 462 | $ | 533 | $ | 33 | $ | (11) | $ | 555 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Corporate bonds | 1,051 | 43 | (21 | ) | 1,073 | 1,026 | 20 | (63 | ) | 983 | Corporate bonds | 877 | 43 | (84) | 836 | 944 | 80 | (10) | 1,014 | |||||||||||||||||||||||||||||||||||||||||||||||||
Total debt securities | $ | 1,745 | $ | 60 | $ | (30 | ) | $ | 1,775 | $ | 1,740 | $ | 29 | $ | (86 | ) | $ | 1,683 | Total debt securities | $ | 1,335 | $ | 80 | $ | (117) | $ | 1,298 | $ | 1,477 | $ | 113 | $ | (21) | $ | 1,569 | |||||||||||||||||||||||||||||||||
Equity securities 2 | 16 | 5 | — | 21 | 16 | 1 | (1 | ) | 16 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity securities 3 | Equity securities 3 | 8 | 1 | (1) | 8 | 10 | 6 | (1) | 15 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total other investments | $ | 1,761 | $ | 65 | $ | (30 | ) | $ | 1,796 | $ | 1,756 | $ | 30 | $ | (87 | ) | $ | 1,699 | Total other investments | $ | 1,343 | $ | 81 | $ | (118) | $ | 1,306 | $ | 1,487 | $ | 119 | $ | (22) | $ | 1,584 | |||||||||||||||||||||||||||||||||
Total cash equivalents, marketable securities and other investments | $ | 2,207 | $ | 65 | $ | (30 | ) | $ | 2,242 | $ | 2,422 | $ | 30 | $ | (87 | ) | $ | 2,365 | Total cash equivalents, marketable securities and other investments | $ | 3,150 | $ | 81 | $ | (118) | $ | 3,113 | $ | 2,136 | $ | 119 | $ | (22) | $ | 2,233 | |||||||||||||||||||||||||||||||||
Long-term debt including debt due within one year 3 | $ | (19,529 | ) | $ | 84 | $ | (1,405 | ) | $ | (20,850 | ) | $ | (19,594 | ) | $ | 351 | $ | (971 | ) | $ | (20,214 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Long-term debt including debt due within one year 4 | Long-term debt including debt due within one year 4 | $ | (16,697) | $ | 384 | $ | (1,326) | $ | (17,639) | $ | (16,410) | $ | 7 | $ | (2,258) | $ | (18,661) | |||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives relating to: | Derivatives relating to: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rates | $ | — | $ | — | $ | (181 | ) | $ | (181 | ) | $ | — | $ | — | $ | (64 | ) | $ | (64 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
Interest rates 5 | Interest rates 5 | $ | — | $ | 194 | $ | (331) | $ | (137) | $ | — | $ | 8 | $ | (283) | $ | (275) | |||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency | — | 86 | (14 | ) | 72 | — | 120 | (43 | ) | 77 | Foreign currency | — | 53 | (39) | 14 | — | 101 | (21) | 80 | |||||||||||||||||||||||||||||||||||||||||||||||||
Commodities 4 | — | 88 | (147 | ) | (59 | ) | — | 91 | (178 | ) | (87 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commodities 5 | Commodities 5 | — | 133 | (286) | (153) | — | 59 | (115) | (56) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total derivatives | $ | — | $ | 174 | $ | (342 | ) | $ | (168 | ) | $ | — | $ | 211 | $ | (285 | ) | $ | (74 | ) | Total derivatives | $ | — | $ | 380 | $ | (656) | $ | (276) | $ | — | $ | 168 | $ | (419) | $ | (251) |
Investing Results | Three Months Ended | ||||||||||
In millions | Mar 31, 2020 | Mar 31, 2019 | |||||||||
Proceeds from sales of available-for-sale securities | $ | 248 | $ | 159 | |||||||
Gross realized gains | $ | 16 | $ | 6 | |||||||
Gross realized losses | $ | (7) | $ | (5) |
Contractual Maturities of Debt Securities at Mar 31, 2020 1 | Cost | Fair Value | ||||||
In millions | ||||||||
Within one year | $ | 12 | $ | 11 | ||||
One to five years | 363 | 340 | ||||||
Six to ten years | 467 | 437 | ||||||
After ten years | 493 | 510 | ||||||
Total | $ | 1,335 | $ | 1,298 |
Temporarily Impaired Debt Securities | Less than 12 months | 12 months or more | Total | ||||||||||||||||||||||||||
Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||||||||||||||
In millions | |||||||||||||||||||||||||||||
Mar 31, 2020 | |||||||||||||||||||||||||||||
Government debt 1 | $ | 109 | $ | (22) | $ | 10 | $ | (11) | $ | 119 | $ | (33) | |||||||||||||||||
Corporate bonds | 407 | (66) | 24 | (18) | 431 | (84) | |||||||||||||||||||||||
Total temporarily impaired debt securities | $ | 516 | $ | (88) | $ | 34 | $ | (29) | $ | 550 | $ | (117) | |||||||||||||||||
Dec 31, 2019 | |||||||||||||||||||||||||||||
Government debt 1 | $ | 55 | $ | (3) | $ | 23 | $ | (8) | $ | 78 | $ | (11) | |||||||||||||||||
Corporate bonds | 79 | (3) | 52 | (7) | 131 | (10) | |||||||||||||||||||||||
Total temporarily impaired debt securities | $ | 134 | $ | (6) | $ | 75 | $ | (15) | $ | 209 | $ | (21) |
Investing Results | Three Months Ended | |||||
In millions | Mar 31, 2019 | Mar 31, 2018 | ||||
Proceeds from sales of available-for-sale securities | $ | 159 | $ | 348 | ||
Gross realized gains | $ | 6 | $ | 7 | ||
Gross realized losses | $ | (5 | ) | $ | (9 | ) |
Investments in Equity Securities | Mar 31, 2020 | Dec 31, 2019 | ||||||
In millions | ||||||||
Readily determinable fair value | $ | 8 | $ | 15 | ||||
Not readily determinable fair value | $ | 190 | $ | 189 |
Notional Amounts - Net | Mar 31, 2020 | Dec 31, 2019 | ||||||
In millions | ||||||||
Derivatives designated as hedging instruments: | ||||||||
Interest rate contracts | $ | 921 | $ | 922 | ||||
Foreign currency contracts | $ | 3,472 | $ | 6,253 | ||||
Derivatives not designated as hedging instruments: | ||||||||
Interest rate contracts | $ | 105 | $ | 145 | ||||
Foreign currency contracts | $ | 5,706 | $ | 5,567 |
Commodity Notionals - Net | Mar 31, 2020 | Dec 31, 2019 | Notional Volume Unit | ||||||||
Derivatives designated as hedging instruments: | |||||||||||
Hydrocarbon derivatives | 20.0 | 6.1 | million barrels of oil equivalent | ||||||||
Derivatives not designated as hedging instruments: | |||||||||||
Hydrocarbon derivatives | 0.4 | 0.1 | million barrels of oil equivalent | ||||||||
Power derivatives | 80.5 | 87.5 | thousands of megawatt hours |
Maturity Dates of Derivatives Designated as Hedging Instruments | Year | ||||
Interest rate contracts | 2021 | ||||
Foreign currency contracts | 2021 | ||||
Commodity contracts | 2022 |
Fair Value of Derivative Instruments | Mar 31, 2020 | ||||||||||||||||||||||
In millions | Balance Sheet Classification | Gross | Counterparty and Cash Collateral Netting 1 | Net Amounts Included in the Consolidated Balance Sheets | |||||||||||||||||||
Asset derivatives | |||||||||||||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||||||||
Interest rate contracts | Other current assets | $ | 192 | $ | (156) | $ | 36 | ||||||||||||||||
Foreign currency contracts | Other current assets | 109 | (80) | 29 | |||||||||||||||||||
Commodity contracts | Other current assets | 82 | (32) | 50 | |||||||||||||||||||
Commodity contracts | Deferred charges and other assets | 67 | (3) | 64 | |||||||||||||||||||
Total | $ | 450 | $ | (271) | $ | 179 | |||||||||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||||||||
Interest rate contracts | Deferred charges and other assets | $ | 158 | $ | — | $ | 158 | ||||||||||||||||
Foreign currency contracts | Other current assets | 65 | (41) | 24 | |||||||||||||||||||
Commodity contracts | Other current assets | 22 | (4) | 18 | |||||||||||||||||||
Commodity contracts | Deferred charges and other assets | 1 | — | 1 | |||||||||||||||||||
Total | $ | 246 | $ | (45) | $ | 201 | |||||||||||||||||
Total asset derivatives | $ | 696 | $ | (316) | $ | 380 | |||||||||||||||||
Liability derivatives | |||||||||||||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||||||||
Interest rate contracts | Accrued and other current liabilities | $ | 156 | $ | (156) | $ | — | ||||||||||||||||
Foreign currency contracts | Accrued and other current liabilities | 88 | (80) | 8 | |||||||||||||||||||
Commodity contracts | Accrued and other current liabilities | 152 | (32) | 120 | |||||||||||||||||||
Commodity contracts | Other noncurrent obligations | 148 | (3) | 145 | |||||||||||||||||||
Total | $ | 544 | $ | (271) | $ | 273 | |||||||||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||||||||
Interest rate contracts | Other noncurrent obligations | $ | 331 | $ | — | $ | 331 | ||||||||||||||||
Foreign currency contracts | Accrued and other current liabilities | 71 | (40) | 31 | |||||||||||||||||||
Commodity contracts | Accrued and other current liabilities | 24 | (4) | 20 | |||||||||||||||||||
Commodity contracts | Other noncurrent obligations | 1 | — | 1 | |||||||||||||||||||
Total | $ | 427 | $ | (44) | $ | 383 | |||||||||||||||||
Total liability derivatives | $ | 971 | $ | (315) | $ | 656 |
Fair Value of Derivative Instruments | Mar 31, 2019 | |||||||||
In millions | Balance Sheet Classification | Gross | Counterparty and Cash Collateral Netting 1 | Net Amounts Included in the Consolidated Balance Sheet | ||||||
Asset derivatives: | ||||||||||
Derivatives designated as hedging instruments: | ||||||||||
Foreign currency contracts | Other current assets | $ | 161 | $ | (89 | ) | $ | 72 | ||
Commodity contracts | Other current assets | 31 | (5 | ) | 26 | |||||
Commodity contracts | Deferred charges and other assets | 57 | (4 | ) | 53 | |||||
Total | $ | 249 | $ | (98 | ) | $ | 151 | |||
Derivatives not designated as hedging instruments: | ||||||||||
Foreign currency contracts | Other current assets | $ | 29 | $ | (15 | ) | $ | 14 | ||
Commodity contracts | Other current assets | 8 | (1 | ) | 7 | |||||
Commodity contracts | Deferred charges and other assets | 4 | (2 | ) | 2 | |||||
Total | $ | 41 | $ | (18 | ) | $ | 23 | |||
Total asset derivatives | $ | 290 | $ | (116 | ) | $ | 174 | |||
Liability derivatives: | ||||||||||
Derivatives designated as hedging instruments: | ||||||||||
Interest rate swaps | Other noncurrent obligations | $ | 181 | $ | — | $ | 181 | |||
Foreign currency contracts | Accrued and other current liabilities | 98 | (89 | ) | 9 | |||||
Commodity contracts | Accrued and other current liabilities | 93 | (6 | ) | 87 | |||||
Commodity contracts | Other noncurrent obligations | 60 | (8 | ) | 52 | |||||
Total | $ | 432 | $ | (103 | ) | $ | 329 | |||
Derivatives not designated as hedging instruments: | ||||||||||
Foreign currency contracts | Accrued and other current liabilities | $ | 20 | $ | (15 | ) | $ | 5 | ||
Commodity contracts | Accrued and other current liabilities | 8 | (4 | ) | 4 | |||||
Commodity contracts | Other noncurrent obligations | 7 | (3 | ) | 4 | |||||
Total | $ | 35 | $ | (22 | ) | $ | 13 | |||
Total liability derivatives | $ | 467 | $ | (125 | ) | $ | 342 |
Fair Value of Derivative Instruments | Dec 31, 2019 | ||||||||||||||||||||||
In millions | Balance Sheet Classification | Gross | Counterparty and Cash Collateral Netting 1 | Net Amounts Included in the Consolidated Balance Sheets | |||||||||||||||||||
Asset derivatives | |||||||||||||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||||||||
Interest rate contracts | Other current assets | $ | 21 | $ | (13) | $ | 8 | ||||||||||||||||
Foreign currency contracts | Other current assets | 105 | (36) | 69 | |||||||||||||||||||
Commodity contracts | Other current assets | 44 | (25) | 19 | |||||||||||||||||||
Commodity contracts | Deferred charges and other assets | 28 | (3) | 25 | |||||||||||||||||||
Total | $ | 198 | $ | (77) | $ | 121 | |||||||||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||||||||
Interest rate contracts | Other current assets | $ | 14 | $ | (14) | $ | — | ||||||||||||||||
Foreign currency contracts | Other current assets | 44 | (12) | 32 | |||||||||||||||||||
Commodity contracts | Other current assets | 18 | (3) | 15 | |||||||||||||||||||
Total | $ | 76 | $ | (29) | $ | 47 | |||||||||||||||||
Total asset derivatives | $ | 274 | $ | (106) | $ | 168 | |||||||||||||||||
Liability derivatives | |||||||||||||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||||||||
Interest rate contracts | Accrued and other current liabilities | $ | 23 | $ | (13) | $ | 10 | ||||||||||||||||
Interest rate contracts | Other noncurrent obligations | 1 | — | 1 | |||||||||||||||||||
Foreign currency contracts | Accrued and other current liabilities | 46 | (36) | 10 | |||||||||||||||||||
Commodity contracts | Accrued and other current liabilities | 95 | (29) | 66 | |||||||||||||||||||
Commodity contracts | Other noncurrent obligations | 38 | (4) | 34 | |||||||||||||||||||
Total | $ | 203 | $ | (82) | $ | 121 | |||||||||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||||||||
Interest rate contracts | Accrued and other current liabilities | $ | 136 | $ | (14) | $ | 122 | ||||||||||||||||
Interest rate contracts | Other noncurrent obligations | 150 | — | 150 | |||||||||||||||||||
Foreign currency contracts | Accrued and other current liabilities | 23 | (12) | 11 | |||||||||||||||||||
Commodity contracts | Accrued and other current liabilities | 17 | (3) | 14 | |||||||||||||||||||
Commodity contracts | Other noncurrent obligations | 1 | — | 1 | |||||||||||||||||||
Total | $ | 327 | $ | (29) | $ | 298 | |||||||||||||||||
Total liability derivatives | $ | 530 | $ | (111) | $ | 419 |
Fair Value of Derivative Instruments | Dec 31, 2018 | |||||||||
In millions | Balance Sheet Classification | Gross | Counterparty and Cash Collateral Netting 1 | Net Amounts Included in the Consolidated Balance Sheet | ||||||
Asset derivatives: | ||||||||||
Derivatives designated as hedging instruments: | ||||||||||
Foreign currency contracts | Other current assets | $ | 98 | $ | (42 | ) | $ | 56 | ||
Commodity contracts | Other current assets | 47 | (13 | ) | 34 | |||||
Commodity contracts | Deferred charges and other assets | 18 | (3 | ) | 15 | |||||
Total | $ | 163 | $ | (58 | ) | $ | 105 | |||
Derivatives not designated as hedging instruments: | ||||||||||
Foreign currency contracts | Other current assets | $ | 128 | $ | (64 | ) | $ | 64 | ||
Commodity contracts | Other current assets | 41 | (1 | ) | 40 | |||||
Commodity contracts | Deferred charges and other assets | 4 | (2 | ) | 2 | |||||
Total | $ | 173 | $ | (67 | ) | $ | 106 | |||
Total asset derivatives | $ | 336 | $ | (125 | ) | $ | 211 | |||
Liability derivatives: | ||||||||||
Derivatives designated as hedging instruments: | ||||||||||
Interest rate swaps | Other noncurrent obligations | $ | 64 | $ | — | $ | 64 | |||
Foreign currency contracts | Accrued and other current liabilities | 46 | (42 | ) | 4 | |||||
Commodity contracts | Accrued and other current liabilities | 111 | (18 | ) | 93 | |||||
Commodity contracts | Other noncurrent obligations | 86 | (9 | ) | 77 | |||||
Total | $ | 307 | $ | (69 | ) | $ | 238 | |||
Derivatives not designated as hedging instruments: | ||||||||||
Foreign currency contracts | Accrued and other current liabilities | $ | 103 | $ | (64 | ) | $ | 39 | ||
Commodity contracts | Accrued and other current liabilities | 7 | (4 | ) | 3 | |||||
Commodity contracts | Other noncurrent obligations | 8 | (3 | ) | 5 | |||||
Total | $ | 118 | $ | (71 | ) | $ | 47 | |||
Total liability derivatives | $ | 425 | $ | (140 | ) | $ | 285 |
Effect of Derivative Instruments | Amount of gain (loss) recognized in OCI 1 | Amount of gain (loss) recognized in income 2 | Income Statement Classification | ||||||||||||||||||||
Three months ended | Three months ended | ||||||||||||||||||||||
In millions | Mar 31, 2020 | Mar 31, 2019 | Mar 31, 2020 | Mar 31, 2019 | |||||||||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||||||||
Fair value hedges: | |||||||||||||||||||||||
Interest rate contracts | $ | — | $ | — | $ | 24 | $ | — | Interest expense and amortization of debt discount 3 | ||||||||||||||
Excluded components 4 | 3 | — | — | — | Interest expense and amortization of debt discount | ||||||||||||||||||
Cash flow hedges: | |||||||||||||||||||||||
Interest rate contracts | — | (106) | — | — | Interest expense and amortization of debt discount | ||||||||||||||||||
Foreign currency contracts | 8 | 7 | 4 | 8 | Cost of sales | ||||||||||||||||||
Foreign currency contracts | — | 1 | — | — | Sundry income (expense) - net | ||||||||||||||||||
Commodity contracts | (87) | 55 | (11) | — | Cost of sales | ||||||||||||||||||
Net foreign investment hedges: | |||||||||||||||||||||||
Foreign currency contracts | 22 | 30 | — | — | |||||||||||||||||||
Excluded components 4 | 22 | 86 | 14 | 25 | Sundry income (expense) - net | ||||||||||||||||||
Total derivatives designated as hedging instruments | $ | (32) | $ | 73 | $ | 31 | $ | 33 | |||||||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||||||||
Interest rate contracts | $ | — | $ | — | $ | (6) | $ | — | Interest expense and amortization of debt discount | ||||||||||||||
Foreign currency contracts | — | — | (19) | (32) | Sundry income (expense) - net | ||||||||||||||||||
Commodity contracts | — | — | 11 | (12) | Cost of sales | ||||||||||||||||||
Total derivatives not designated as hedging instruments | $ | — | $ | — | $ | (14) | $ | (44) | |||||||||||||||
Total derivatives | $ | (32) | $ | 73 | $ | 17 | $ | (11) |
Expected Reclassifications from AOCL within the next 12 months | Mar 31, 2020 | ||||
In millions | |||||
Cash flow hedges: | |||||
Interest rate contracts | $ | 1 | |||
Commodity contracts | $ | (32) | |||
Foreign currency contracts | $ | 9 | |||
Net foreign investment hedges: | |||||
Excluded components | $ | 10 |
Basis of Fair Value Measurements on a Recurring Basis | Mar 31, 2019 | Dec 31, 2018 | Basis of Fair Value Measurements on a Recurring Basis | Mar 31, 2020 | Dec 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Quoted Prices in Active Markets for Identical Items (Level 1) | Significant Other Observable Inputs (Level 2) | Total | Quoted Prices in Active Markets for Identical Items (Level 1) | Significant Other Observable Inputs (Level 2) | Total | Quoted Prices in Active Markets for Identical Items (Level 1) | Significant Other Observable Inputs (Level 2) | Total | Quoted Prices in Active Markets for Identical Items (Level 1) | Significant Other Observable Inputs (Level 2) | Total | |||||||||||||||||||||||||||||||||||||||||||||
In millions | In millions | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets at fair value: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash equivalents 1 | $ | — | $ | 345 | $ | 345 | $ | — | $ | 566 | $ | 566 | ||||||||||||||||||||||||||||||||||||||||||||
Assets at fair value | Assets at fair value | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash equivalents | Cash equivalents | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Held-to-maturity securities 1 | Held-to-maturity securities 1 | $ | — | $ | 1,233 | $ | 1,233 | $ | — | $ | 220 | $ | 220 | |||||||||||||||||||||||||||||||||||||||||||
Money market funds | Money market funds | — | 573 | 573 | — | 408 | 408 | |||||||||||||||||||||||||||||||||||||||||||||||||
Marketable securities | — | 101 | 101 | — | 100 | 100 | Marketable securities | — | 1 | 1 | — | 21 | 21 | |||||||||||||||||||||||||||||||||||||||||||
Equity securities 2 | 21 | — | 21 | 16 | — | 16 | Equity securities 2 | 8 | — | 8 | 15 | — | 15 | |||||||||||||||||||||||||||||||||||||||||||
Debt securities: 2 | Debt securities: 2 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Government debt 3 | — | 702 | 702 | — | 700 | 700 | Government debt 3 | — | 462 | 462 | — | 555 | 555 | |||||||||||||||||||||||||||||||||||||||||||
Corporate bonds | 19 | 1,054 | 1,073 | — | 983 | 983 | Corporate bonds | 20 | 816 | 836 | 22 | 992 | 1,014 | |||||||||||||||||||||||||||||||||||||||||||
Derivatives relating to: 4 | Derivatives relating to: 4 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rates | Interest rates | — | 350 | 350 | — | 35 | 35 | |||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency | — | 189 | 189 | — | 226 | 226 | Foreign currency | — | 174 | 174 | — | 149 | 149 | |||||||||||||||||||||||||||||||||||||||||||
Commodities | 10 | 90 | 100 | 17 | 93 | 110 | Commodities | 31 | 141 | 172 | 23 | 67 | 90 | |||||||||||||||||||||||||||||||||||||||||||
Total assets at fair value | $ | 50 | $ | 2,481 | $ | 2,531 | $ | 33 | $ | 2,668 | $ | 2,701 | Total assets at fair value | $ | 59 | $ | 3,750 | $ | 3,809 | $ | 60 | $ | 2,447 | $ | 2,507 | |||||||||||||||||||||||||||||||
Liabilities at fair value: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Liabilities at fair value | Liabilities at fair value | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term debt including debt due within one year 5 | $ | — | $ | 20,850 | $ | 20,850 | $ | — | $ | 20,214 | $ | 20,214 | Long-term debt including debt due within one year 5 | $ | — | $ | 17,639 | $ | 17,639 | $ | — | $ | 18,661 | $ | 18,661 | |||||||||||||||||||||||||||||||
Derivatives relating to: 4 | Derivatives relating to: 4 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rates | — | 181 | 181 | — | 64 | 64 | Interest rates | — | 487 | 487 | — | 310 | 310 | |||||||||||||||||||||||||||||||||||||||||||
Foreign currency | — | 117 | 117 | — | 149 | 149 | Foreign currency | — | 159 | 159 | — | 69 | 69 | |||||||||||||||||||||||||||||||||||||||||||
Commodities | 13 | 155 | 168 | 23 | 189 | 212 | Commodities | 18 | 307 | 325 | 14 | 137 | 151 | |||||||||||||||||||||||||||||||||||||||||||
Total liabilities at fair value | $ | 13 | $ | 21,303 | $ | 21,316 | $ | 23 | $ | 20,616 | $ | 20,639 | Total liabilities at fair value | $ | 18 | $ | 18,592 | $ | 18,610 | $ | 14 | $ | 19,177 | $ | 19,191 |
1. The Company's held-to-maturity securities primarily included treasury bills and time deposits. 2. The Company’s investments in debt securities, which are primarily available-for-sale, and equity securities are included in “Other investments” in the consolidated balance sheets. 3. U.S. Treasury obligations, U.S. agency obligations, U.S. agency mortgage-backed securities and other municipalities’ obligations. 4. See Note 18 for the classification of derivatives in the consolidated balance sheets. 5. See Note 18 for information on fair value measurements of long-term debt. |
Assets and Liabilities of Consolidated VIEs | Mar 31, 2020 | Dec 31, 2019 | ||||||
In millions | ||||||||
Cash and cash equivalents | $ | 44 | $ | 37 | ||||
Other current assets | 52 | 51 | ||||||
Net property | 286 | 330 | ||||||
Other noncurrent assets | 16 | 18 | ||||||
Total assets 1 | $ | 398 | $ | 436 | ||||
Current liabilities | $ | 115 | $ | 141 | ||||
Long-term debt | 30 | 34 | ||||||
Other noncurrent obligations | 19 | 21 | ||||||
Total liabilities 2 | $ | 164 | $ | 196 |
Assets and Liabilities of Consolidated VIEs | Mar 31, 2019 | Dec 31, 2018 | ||||
In millions | ||||||
Cash and cash equivalents | $ | 109 | $ | 82 | ||
Other current assets | 116 | 114 | ||||
Net property | 718 | 734 | ||||
Other noncurrent assets | 60 | 45 | ||||
Total assets 1 | $ | 1,003 | $ | 975 | ||
Current liabilities | $ | 318 | $ | 334 | ||
Long-term debt | 43 | 75 | ||||
Other noncurrent obligations | 46 | 31 | ||||
Total liabilities 2 | $ | 407 | $ | 440 |
Carrying Amounts of Assets Related to Nonconsolidated VIEs | Mar 31, 2020 | Dec 31, 2019 | |||||||||
In millions | Description of asset | ||||||||||
Silicon joint ventures | Equity method investments 1 | $ | 102 | $ | 100 |
Carrying Amounts of Assets and Liabilities Related to Nonconsolidated VIEs | Mar 31, 2019 | Dec 31, 2018 | |||||
In millions | Description of asset or liability | ||||||
Hemlock Semiconductor L.L.C. | Equity method investment 1 | $ | (658 | ) | $ | (495 | ) |
Silicon joint ventures | Equity method investments 2 | $ | 96 | $ | 100 | ||
AgroFresh Solutions, Inc. | Equity method investment 2 | $ | 45 | $ | 48 | ||
Other receivable 3 | $ | 8 | $ | 8 |
Balances Due To or Due From DuPont and its Affiliates | Mar 31, 2019 | Dec 31, 2018 | ||||
In millions | ||||||
Accounts and notes receivable - Other | $ | 201 | $ | 288 | ||
Accounts payable - Other | $ | 112 | $ | 201 |
Sales to Historical DuPont and its Affiliates | Three months ended | ||||||||||
In millions | Mar 31, 2019 | ||||||||||
Net sales | $ | 12 | |||||||||
Cost of sales | $ | 9 |
Sales to DuPont and its Affiliates | Three Months Ended | |||||
In millions | Mar 31, 2019 | Mar 31, 2018 | ||||
Net sales | $ | 106 | $ | 43 | ||
Cost of sales | $ | 65 | $ | 26 |
Segment Information | Pack. & Spec. Plastics | Ind. Interm. & Infrast. | Perf. Materials & Coatings | Corp. | Total | ||||||||||||
In millions | |||||||||||||||||
Three months ended Mar 31, 2020 | |||||||||||||||||
Net sales | $ | 4,609 | $ | 3,045 | $ | 2,065 | $ | 51 | $ | 9,770 | |||||||
Equity in earnings (losses) of nonconsolidated affiliates | 5 | (76) | 1 | (19) | (89) | ||||||||||||
Dow Inc. Operating EBIT 1 | 580 | 175 | 162 | (74) | 843 | ||||||||||||
Three months ended Mar 31, 2019 | |||||||||||||||||
Net sales | $ | 5,138 | $ | 3,480 | $ | 2,282 | $ | 69 | $ | 10,969 | |||||||
Pro forma net sales | 5,138 | 3,489 | 2,320 | 69 | 11,016 | ||||||||||||
Equity in earnings (losses) of nonconsolidated affiliates | 38 | (48) | — | (4) | (14) | ||||||||||||
Dow Inc. pro forma Operating EBIT 2 | 690 | 277 | 271 | (95) | 1,143 | ||||||||||||
Reconciliation of "Income from continuing operations, net of tax" to Operating EBIT | Three Months Ended | ||||
In millions | Mar 31, 2020 | ||||
Income from continuing operations, net of tax | $ | 258 | |||
+ Provision for income taxes on continuing operations | 138 | ||||
Income from continuing operations before income taxes | $ | 396 | |||
- Interest income | 15 | ||||
+ Interest expense and amortization of debt discount | 215 | ||||
- Significant items | (247) | ||||
Operating EBIT | $ | 843 |
Reconciliation of "Income from continuing operations, net of tax" to Pro Forma Operating EBIT | Three Months Ended | ||||
In millions | Mar 31, 2019 | ||||
Income from continuing operations, net of tax | $ | 156 | |||
+ Provision for income taxes on continuing operations | 141 | ||||
Income from continuing operations before income taxes | $ | 297 | |||
- Interest income | 18 | ||||
+ Interest expense and amortization of debt discount | 241 | ||||
+ Pro forma adjustments 1 | 65 | ||||
- Significant items | (558) | ||||
Pro forma Operating EBIT | $ | 1,143 |
Significant Items by Segment | Three Months Ended Mar 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||
Pack. & Spec. Plastics | Ind. Interm. & Infrast. | Perf. Mat. & Coatings | Corp. | Total | ||||||||||||||||||||||||||||||||||||||||
In millions | ||||||||||||||||||||||||||||||||||||||||||||
Integration and separation costs 1 | $ | — | $ | — | $ | — | $ | (65) | $ | (65) | ||||||||||||||||||||||||||||||||||
Restructuring and asset related charges - net 2 | (6) | — | — | (90) | (96) | |||||||||||||||||||||||||||||||||||||||
Loss on early extinguishment of debt 3 | — | — | — | (86) | (86) | |||||||||||||||||||||||||||||||||||||||
Total | $ | (6) | $ | — | $ | — | $ | (241) | $ | (247) |
Significant Items by Segment | Three Months Ended Mar 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||
Pack. & Spec. Plastics | Ind. Interm. & Infrast. | Perf. Mat. & Coatings | Corp. | Total | ||||||||||||||||||||||||||||||||||||||||
In millions | ||||||||||||||||||||||||||||||||||||||||||||
Integration and separation costs 1 | $ | — | $ | — | $ | — | $ | (402) | $ | (402) | ||||||||||||||||||||||||||||||||||
Restructuring and asset related charges - net 2 | (13) | — | — | (143) | (156) | |||||||||||||||||||||||||||||||||||||||
Total | $ | (13) | $ | — | $ | — | $ | (545) | $ | (558) |
Selected Financial Data | Three Months Ended | |||||
In millions | Mar 31, 2019 | Mar 31, 2018 | ||||
Net sales | $ | 13,582 | $ | 14,899 | ||
Cost of sales ("COS") | $ | 10,707 | $ | 11,552 | ||
Percent of net sales | 78.8 | % | 77.5 | % | ||
Research and development expenses ("R&D") | $ | 361 | $ | 386 | ||
Percent of net sales | 2.7 | % | 2.6 | % | ||
Selling, general and administrative expenses ("SG&A") | $ | 701 | $ | 751 | ||
Percent of net sales | 5.2 | % | 5.0 | % | ||
Effective tax rate | 31.7 | % | 20.9 | % | ||
Net income available for common stockholder | $ | 541 | $ | 1,342 |
Selected Financial Data - Dow Inc. and TDCC | Three Months Ended | ||||||||||||||||
In millions | Mar 31, 2020 | Mar 31, 2019 | |||||||||||||||
Net sales | $ | 9,770 | $ | 10,969 | |||||||||||||
Cost of sales ("COS") | $ | 8,230 | $ | 9,142 | |||||||||||||
Percent of net sales | 84.2 | % | 83.3 | % | |||||||||||||
R&D | $ | 179 | $ | 190 | |||||||||||||
Percent of net sales | 1.8 | % | 1.7 | % | |||||||||||||
SG&A | $ | 334 | $ | 448 | |||||||||||||
Percent of net sales | 3.4 | % | 4.1 | % | |||||||||||||
Effective tax rate | 34.8 | % | 47.5 | % | |||||||||||||
Net income available for common stockholder(s) | $ | 239 | $ | 556 |
Summary of Sales Results | Three Months Ended | ||||||||||||||||
In millions | Mar 31, 2020 | Mar 31, 2019 | |||||||||||||||
Net sales | $ | 9,770 | $ | 10,969 | |||||||||||||
Pro forma net sales | $ | 11,016 |
Sales Variances by Geographic Region | Three Months Ended Mar 31, 2019 | |||||||||
Local Price & Product Mix | Currency | Volume | Portfolio & Other | Total | ||||||
Percentage change from prior year | ||||||||||
U.S. & Canada | (7 | )% | — | % | (4 | )% | — | % | (11 | )% |
EMEA 1 | (7 | ) | (5 | ) | 1 | (1 | ) | (12 | ) | |
Asia Pacific | (9 | ) | (2 | ) | 9 | — | (2 | ) | ||
Latin America | (10 | ) | (1 | ) | 2 | — | (9 | ) | ||
Total | (8 | )% | (2 | )% | 1 | % | — | % | (9 | )% |
Sales Variances by Segment and Geographic Region - As Reported | |||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended Mar 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||
Local Price & Product Mix | Currency | Volume | Portfolio & Other 1 | Total | |||||||||||||||||||||||||||||||||||||||||||
Percentage change from prior year | |||||||||||||||||||||||||||||||||||||||||||||||
Packaging & Specialty Plastics | (9) | % | (1) | % | — | % | — | % | (10) | % | |||||||||||||||||||||||||||||||||||||
Industrial Intermediates & Infrastructure | (9) | (1) | (3) | — | (13) | ||||||||||||||||||||||||||||||||||||||||||
Performance Materials & Coatings | (8) | (1) | (4) | 3 | (10) | ||||||||||||||||||||||||||||||||||||||||||
Total | (9) | % | (1) | % | (2) | % | 1 | % | (11) | % | |||||||||||||||||||||||||||||||||||||
U.S. & Canada | (10) | % | — | % | (2) | % | 2 | % | (10) | % | |||||||||||||||||||||||||||||||||||||
EMEAI | (7) | (2) | (3) | — | (12) | ||||||||||||||||||||||||||||||||||||||||||
Asia Pacific | (8) | (1) | (4) | 1 | (12) | ||||||||||||||||||||||||||||||||||||||||||
Latin America | (13) | — | 5 | — | (8) | ||||||||||||||||||||||||||||||||||||||||||
Total | (9) | % | (1) | % | (2) | % | 1 | % | (11) | % |
Sales Variances by Segment and Geographic Region - Pro Forma Basis | ||||||||||||||||||||||||||||||||||||||||||||
Three months ended Mar 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||
Local Price & Product Mix | Currency | Volume | Total | |||||||||||||||||||||||||||||||||||||||||
Percentage change from prior year | ||||||||||||||||||||||||||||||||||||||||||||
Packaging & Specialty Plastics | (9) | % | (1) | % | — | % | (10) | % | ||||||||||||||||||||||||||||||||||||
Industrial Intermediates & Infrastructure | (9) | (1) | (3) | (13) | ||||||||||||||||||||||||||||||||||||||||
Performance Materials & Coatings | (7) | (1) | (3) | (11) | ||||||||||||||||||||||||||||||||||||||||
Total | (8) | % | (1) | % | (2) | % | (11) | % | ||||||||||||||||||||||||||||||||||||
Total, excluding the Hydrocarbons & Energy business | (9) | % | (1) | % | (1) | % | (11) | % | ||||||||||||||||||||||||||||||||||||
U.S. & Canada | (9) | % | — | % | (1) | % | (10) | % | ||||||||||||||||||||||||||||||||||||
EMEAI | (7) | (2) | (3) | (12) | ||||||||||||||||||||||||||||||||||||||||
Asia Pacific | (7) | (1) | (4) | (12) | ||||||||||||||||||||||||||||||||||||||||
Latin America | (13) | — | 4 | (9) | ||||||||||||||||||||||||||||||||||||||||
Total | (8) | % | (1) | % | (2) | % | (11) | % |
Packaging & Specialty Plastics | Three Months Ended | ||||||||||||||||
In millions | Mar 31, 2020 | Mar 31, 2019 | |||||||||||||||
Net sales | $ | 4,609 | $ | 5,138 | |||||||||||||
Pro forma net sales | $ | 5,138 | |||||||||||||||
Operating EBIT | $ | 580 | |||||||||||||||
Pro forma Operating EBIT | $ | 690 | |||||||||||||||
Equity earnings | $ | 5 | $ | 38 |
Packaging & Specialty Plastics | Three Months Ended | |||||||
Percentage change from prior year | Mar 31, 2020 | |||||||
Change in Net Sales from Prior Period due to: | ||||||||
Local price & product mix | (9) | % | ||||||
Currency | (1) | |||||||
Volume | — | |||||||
Portfolio & other | — | |||||||
Total | (10) | % | ||||||
Change in Pro Forma Net Sales from Prior Period due to: 1 | ||||||||
Local price & product mix | (9) | % | ||||||
Currency | (1) | |||||||
Volume | — | |||||||
Total | (10) | % |
Industrial Intermediates & Infrastructure | Three Months Ended | ||||||||||||||||
In millions | Mar 31, 2020 | Mar 31, 2019 | |||||||||||||||
Net sales | $ | 3,045 | $ | 3,480 | |||||||||||||
Pro forma net sales | $ | 3,489 | |||||||||||||||
Operating EBIT | $ | 175 | |||||||||||||||
Pro forma Operating EBIT | $ | 277 | |||||||||||||||
Equity losses | $ | (76) | $ | (48) |
Industrial Intermediates & Infrastructure | Three Months Ended | |||||||
Percentage change from prior year | Mar 31, 2020 | |||||||
Change in Net Sales from Prior Period due to: | ||||||||
Local price & product mix | (9) | % | ||||||
Currency | (1) | |||||||
Volume | (3) | |||||||
Portfolio & other | — | |||||||
Total | (13) | % | ||||||
Change in Pro Forma Net Sales from Prior Period due to: 1 | ||||||||
Local price & product mix | (9) | % | ||||||
Currency | (1) | |||||||
Volume | (3) | |||||||
Total | (13) | % |
Performance Materials & Coatings | Three Months Ended | ||||||||||||||||
In millions | Mar 31, 2020 | Mar 31, 2019 | |||||||||||||||
Net sales | $ | 2,065 | $ | 2,282 | |||||||||||||
Pro forma net sales | $ | 2,320 | |||||||||||||||
Operating EBIT | $ | 162 | |||||||||||||||
Pro forma Operating EBIT | $ | 271 | |||||||||||||||
Equity earnings | $ | 1 | $ | — |
Performance Materials & Coatings | Three Months Ended | |||||||
Percentage change from prior year | Mar 31, 2020 | |||||||
Change in Net Sales from Prior Period due to: | ||||||||
Local price & product mix | (8) | % | ||||||
Currency | (1) | |||||||
Volume | (4) | |||||||
Portfolio & other | 3 | |||||||
Total | (10) | % | ||||||
Change in Pro Forma Net Sales from Prior Period due to: 1 | ||||||||
Local price & product mix | (7) | % | ||||||
Currency | (1) | |||||||
Volume | (3) | |||||||
Total | (11) | % |
Corporate | Three Months Ended | ||||||||||||||||
In millions | Mar 31, 2020 | Mar 31, 2019 | |||||||||||||||
Net sales | $ | 51 | $ | 69 | |||||||||||||
Pro forma net sales | $ | 69 | |||||||||||||||
Operating EBIT | $ | (74) | |||||||||||||||
Pro forma Operating EBIT | $ | (95) | |||||||||||||||
Equity losses | $ | (19) | $ | (4) |
Cash Flow Summary | Dow Inc. | TDCC | ||||||||||||||||||
Three Months Ended | Three Months Ended | |||||||||||||||||||
Mar 31, 2020 | Mar 31, 2019 | Mar 31, 2020 | Mar 31, 2019 | |||||||||||||||||
In millions | ||||||||||||||||||||
Cash provided by (used for): | ||||||||||||||||||||
Operating activities - continuing operations | $ | 1,236 | $ | 1,043 | $ | 1,239 | $ | 1,043 | ||||||||||||
Operating activities - discontinued operations | 3 | 338 | — | 338 | ||||||||||||||||
Operating activities | 1,239 | 1,381 | 1,239 | 1,381 | ||||||||||||||||
Investing activities - continuing operations | (153) | (464) | (153) | (464) | ||||||||||||||||
Investing activities - discontinued operations | — | (34) | — | (34) | ||||||||||||||||
Investing activities | (153) | (498) | (153) | (498) | ||||||||||||||||
Financing activities - continuing operations | 265 | (615) | 265 | (615) | ||||||||||||||||
Financing activities - discontinued operations | — | (18) | — | (18) | ||||||||||||||||
Financing activities | 265 | (633) | 265 | (633) | ||||||||||||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (86) | 30 | (86) | 30 | ||||||||||||||||
Cash reclassified as held for sale | — | (97) | — | (97) | ||||||||||||||||
Summary | ||||||||||||||||||||
Increase in cash, cash equivalents and restricted cash | 1,265 | 183 | 1,265 | 183 | ||||||||||||||||
Cash, cash equivalents and restricted cash at beginning of period | 2,380 | 2,764 | 2,380 | 2,764 | ||||||||||||||||
Cash, cash equivalents and restricted cash at end of period | $ | 3,645 | $ | 2,947 | $ | 3,645 | $ | 2,947 | ||||||||||||
Less: Restricted cash and cash equivalents, included in "Other current assets" | 12 | 43 | 12 | 43 | ||||||||||||||||
Cash and cash equivalents at end of period | $ | 3,633 | $ | 2,904 | $ | 3,633 | $ | 2,904 |
Cash Flow Summary | Three Months Ended | |||||
In millions | Mar 31, 2019 | Mar 31, 2018 | ||||
Cash provided by (used for): | ||||||
Operating activities | $ | 1,426 | $ | (158 | ) | |
Investing activities | (486 | ) | (92 | ) | ||
Financing activities | (667 | ) | (853 | ) | ||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 30 | 100 | ||||
Summary | ||||||
Increase (Decrease) in cash, cash equivalents and restricted cash | $ | 303 | $ | (1,003 | ) | |
Cash, cash equivalents and restricted cash at beginning of period | 2,709 | 6,207 | ||||
Cash, cash equivalents and restricted cash at end of period | $ | 3,012 | $ | 5,204 | ||
Less: Restricted cash and cash equivalents, included in "Other current assets" | 43 | 18 | ||||
Cash and cash equivalents at end of period | $ | 2,969 | $ | 5,186 |
Net Working Capital | Dow Inc. | TDCC | ||||||||||||||||||
Mar 31, 2020 | Mar 31, 2019 | Mar 31, 2020 | Mar 31, 2019 | |||||||||||||||||
In millions | ||||||||||||||||||||
Current assets | $ | 18,138 | $ | 19,651 | $ | 18,059 | $ | 19,651 | ||||||||||||
Current liabilities | 11,121 | 12,737 | 10,624 | 12,737 | ||||||||||||||||
Net working capital | $ | 7,017 | $ | 6,914 | $ | 7,435 | $ | 6,914 | ||||||||||||
Current ratio | 1.63:1 | 1.54:1 | 1.70:1 | 1.54:1 |
Working Capital Metrics | Three Months Ended | ||||||||||
Mar 31, 2020 | Mar 31, 2019 | ||||||||||
Days sales outstanding in receivables 1 | 45 | 47 | |||||||||
Days sales in inventory | 69 | 68 | |||||||||
Days payables outstanding 2 | 63 | 66 |
Cash Flows from Operating Activities Excluding Impact of ASU 2016-15 and Additional Interpretive Guidance (non-GAAP) | Three Months Ended | ||
In millions | Mar 31, 2018 | ||
Cash flows from operating activities - Updated for impact of ASU 2016-15 and additional interpretive guidance (GAAP) | $ | (158 | ) |
Less: Impact of ASU 2016-15 and additional interpretive guidance | 445 | ||
Cash flows from operating activities - Excluding impact of ASU 2016-15 and additional interpretive guidance (non-GAAP) | $ | 287 |
Reconciliation of Free Cash Flow | Three Months Ended | ||||||||||
Mar 31, 2020 | Mar 31, 2019 | ||||||||||
In millions | |||||||||||
Cash provided by operating activities - continuing operations (GAAP) | $ | 1,236 | $ | 1,043 | |||||||
Capital expenditures | (395) | (442) | |||||||||
Free cash flow (Non-GAAP) | $ | 841 | $ | 601 |
Reconciliation of Cash Flow Conversion (Operating EBITDA or Pro Forma Operating | Three Months Ended | ||||||||||
EBITDA to Cash Flow From Operations) | Mar 31, 2020 | Mar 31, 2019 1 | |||||||||
In millions | |||||||||||
Income from continuing operations, net of tax (GAAP) | $ | 258 | $ | 156 | |||||||
+ Provision for income taxes on continuing operations | 138 | 141 | |||||||||
Income from continuing operations before income taxes | $ | 396 | $ | 297 | |||||||
- Interest income | 15 | 18 | |||||||||
+ Interest expense and amortization of debt discount | 215 | 241 | |||||||||
+ Pro forma adjustments ² | — | 65 | |||||||||
- Significant items ³ | (247) | (558) | |||||||||
Operating EBIT (Non-GAAP) | $ | 843 | $ | 1,143 | |||||||
+ Depreciation and amortization | 724 | 743 | |||||||||
Operating EBITDA (Non-GAAP) | $ | 1,567 | $ | 1,886 | |||||||
Cash flows from operating activities - continuing operations (GAAP) | $ | 1,236 | $ | 1,043 | |||||||
Cash flow conversion (Operating EBITDA or pro forma Operating EBITDA to cash flow from operations) (Non-GAAP) | 78.9 | % | 55.3 | % |
Total Debt | Dow Inc. | TDCC | ||||||||||||||||||
Mar 31, 2020 | Dec 31, 2019 | Mar 31, 2020 | Dec 31, 2019 | |||||||||||||||||
In millions | ||||||||||||||||||||
Notes payable | $ | 1,490 | $ | 586 | $ | 1,490 | $ | 586 | ||||||||||||
Long-term debt due within one year | 384 | 435 | 384 | 435 | ||||||||||||||||
Long-term debt | 16,313 | 15,975 | 16,313 | 15,975 | ||||||||||||||||
Gross debt | $ | 18,187 | $ | 16,996 | $ | 18,187 | $ | 16,996 | ||||||||||||
- Cash and cash equivalents | 3,633 | 2,367 | 3,633 | 2,367 | ||||||||||||||||
- Marketable securities | 1 | 21 | 1 | 21 | ||||||||||||||||
Net debt | $ | 14,553 | $ | 14,608 | $ | 14,553 | $ | 14,608 | ||||||||||||
Total equity | $ | 13,461 | $ | 14,094 | $ | 14,228 | $ | 14,862 | ||||||||||||
Gross debt as a percent of total capitalization | 57.5 | % | 54.7 | % | 56.1 | % | 53.3 | % | ||||||||||||
Net debt as a percent of total capitalization | 51.9 | % | 50.9 | % | 50.6 | % | 49.6 | % |
Total Debt | Mar 31, 2019 | Dec 31, 2018 | ||||
In millions | ||||||
Notes payable | $ | 317 | $ | 305 | ||
Long-term debt due within one year | 2,369 | 340 | ||||
Long-term debt | 17,160 | 19,254 | ||||
Gross debt | $ | 19,846 | $ | 19,899 | ||
- Cash and cash equivalents | 2,969 | 2,669 | ||||
- Marketable securities | 101 | 100 | ||||
Net debt | $ | 16,776 | $ | 17,130 | ||
Gross debt as a percent of total capitalization | 41.4 | % | 41.6 | % | ||
Net debt as a percent of total capitalization | 37.3 | % | 38.0 | % |
Credit Ratings | Long-Term Rating | Short-Term Rating | Outlook | ||||||||
Standard & Poor’s | A-3 | Stable | |||||||||
Moody’s Investors Service | Baa2 | P-2 | Stable | ||||||||
Fitch Ratings | BBB+ | Negative |
Contractual Obligations at Mar 31, 2020 | Payments Due In | |||||||||||||||||||||||||
In millions | 2020 | 2021-2022 | 2023-2024 | 2025 and beyond | Total | |||||||||||||||||||||
Long-term debt obligations 1 | $ | 359 | $ | 716 | $ | 3,197 | $ | 12,780 | $ | 17,052 | ||||||||||||||||
Expected cash requirements for interest 2 | $ | 571 | $ | 1,442 | $ | 1,326 | $ | 7,736 | $ | 11,075 | ||||||||||||||||
Operating leases 3 | $ | 338 | $ | 758 | $ | 499 | $ | 806 | $ | 2,401 | ||||||||||||||||
Contractual Obligations at Mar 31, 2019 | Payments Due In | ||||||||||||||
In millions | 2019 | 2020-2021 | 2022-2023 | 2024 and beyond | Total | ||||||||||
Long-term debt obligations 1 | $ | 2,307 | $ | 6,088 | $ | 2,007 | $ | 9,451 | $ | 19,853 | |||||
Expected cash requirements for interest 2 | $ | 673 | $ | 1,629 | $ | 1,168 | $ | 6,907 | $ | 10,377 | |||||
Operating leases | $ | 437 | $ | 936 | $ | 634 | $ | 1,157 | $ | 3,164 |
Asbestos-Related Claim Activity | 2020 | 2019 | ||||||
Claims unresolved at Jan 1 | 11,117 | 12,780 | ||||||
Claims filed | 1,296 | 1,383 | ||||||
Claims settled, dismissed or otherwise resolved | (1,269) | (1,569) | ||||||
Claims unresolved at Mar 31 | 11,144 | 12,594 | ||||||
Claimants with claims against both Union Carbide and Amchem | (3,809) | (4,509) | ||||||
Individual claimants at Mar 31 | 7,335 | 8,085 |
Asbestos-Related Claim Activity | 2019 | 2018 | ||
Claims unresolved at Jan 1 | 12,780 | 15,427 | ||
Claims filed | 1,383 | 1,932 | ||
Claims settled, dismissed or otherwise resolved | (1,569 | ) | (3,026 | ) |
Claims unresolved at Mar 31 | 12,594 | 14,333 | ||
Claimants with claims against both Union Carbide and Amchem | (4,509 | ) | (5,148 | ) |
Individual claimants at Mar 31 | 8,085 | 9,185 |
Dow Inc. and Subsidiaries The Dow Chemical Company and Subsidiaries PART II – OTHER INFORMATION |
Issuer Purchases of Equity Securities | Total number of shares purchased as part of the Company's publicly announced share repurchase program | Approximate dollar value of shares that may yet be purchased under the Company's publicly announced share repurchase program 1 (In millions) | ||||||||||||||||||
Period | Total number of shares purchased | Average price paid per share | ||||||||||||||||||
January 2020 | — | $ | — | — | $ | 2,500 | ||||||||||||||
February 2020 | 1,044,550 | $ | 47.87 | 1,044,550 | $ | 2,450 | ||||||||||||||
March 2020 | 2,028,919 | $ | 36.97 | 2,028,919 | $ | 2,375 | ||||||||||||||
First quarter 2020 | 3,073,469 | $ | 40.67 | 3,073,469 | $ | 2,375 |
EXHIBIT NO. | DESCRIPTION | ||||||||||
4.3 | |||||||||||
Dow Inc. agrees to provide the SEC, on request, copies of all other such indentures and instruments that define the rights of holders of long-term debt of Dow Inc. and its consolidated subsidiaries, including The Dow Chemical Company, pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K. | |||||||||||
Ankura Consulting Group, LLC's Consent. | |||||||||||
31.1 * | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||||||||||
31.2 * | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||||||||||
32.1 * | Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||||||||||
32.2 * | Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||||||||||
101.INS | The instance document does not appear in the Interactive Data File because its XBRL | ||||||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document. | ||||||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | ||||||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. | ||||||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. | ||||||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | ||||||||||
104 | Cover Page Interactive Data File. The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
Dow Inc. The Dow Chemical Company and Subsidiaries Trademark Listing |
Dow Inc. and Subsidiaries The Dow Chemical Company and Subsidiaries Signature |
/s/ RONALD C. EDMONDS | ||
Ronald C. Edmonds | ||
Controller and Vice President | ||
of Controllers and Tax |