Dow 3Q Sales Up 1%

The company generated more than $1.4 billion in cash flow from operations in the quarter, representing a nearly $300 million, or 27 percent, increase versus the year-ago period. Year to date, Dow has generated $5.6 billion in cash flow from operations, representing an improvement of nearly $3.1 billion compared with the prior year.

Midland, MI - The Dow Chemical Company reported earnings of $0.49 per share or $0.50 per share on an adjusted basis (1). This compares with earnings of $0.42 per share in the same quarter last year. This represents the fourth consecutive quarter of year-over-year adjusted earnings growth.

The company generated more than $1.4 billion in cash flow from operations in the quarter, representing a nearly $300 million, or 27 percent, increase versus the year-ago period. Year to date, Dow has generated $5.6 billion in cash flow from operations, representing an improvement of nearly $3.1 billion compared with the prior year.

Sales were $13.7 billion, up 1 percent, or up 2 percent on an adjusted basis (2), with increases led by Agricultural Sciences (up 8 percent), and Coatings and Infrastructure Solutions and Performance Plastics (each up 6 percent). Sales also increased in most geographic areas, with emerging geographies delivering sales growth of 5 percent, led by Latin America.

Volume declined 2 percent, or 1 percent excluding the impact of divestitures. Gains were reported in Electronic and Functional Materials (up 6 percent), as well as Coatings and Infrastructure Solutions and Agricultural Sciences (each up 5 percent). This was offset by lower volume in hydrocarbon-sensitive operating segments, led by Feedstocks and Energy.

Price increased 3 percent with gains achieved in most operating segments, led by Performance Plastics (up 9 percent) and Agricultural Sciences (up 3 percent).

EBITDA (3) was $1.8 billion, led by Performance Plastics (up 32 percent). Increases were also reported in Coatings and Infrastructure Solutions and Electronic and Functional Materials, up 15 percent and 5 percent, respectively.

Equity earnings were $322 million, versus $175 million in the year-ago period, led by the Company’s joint ventures in Kuwait.

Dow reduced gross debt by $200 million in the quarter and $2.4 billion year to date, resulting in a nearly $120 million decline in interest expense year to date. Since 2010, Dow has reduced its debt by $5.2 billion, and its interest expense by more than $300 million. The Company’s net debt (4) to total capitalization now stands at 34.7 percent.

Andrew N. Liveris, Dow’s chairman and chief executive officer, stated: “Dow continued to demonstrate positive momentum with our drive to execute self-help measures in a slow-growth world, achieving strong cash flow, as well as year-over-year earnings growth for the fourth consecutive quarter. Through our integrated value chains and the diversity of our targeted end markets, we continue to demonstrate strong performance – particularly in emerging geographies, in our equity earnings, and in key downstream businesses such as Electronics, Coatings and Infrastructure, and Packaging. We continue to prioritize our resources to focus on these and other high-growth markets.

“Over the last 12 months, using return on capital as our lens, we have pruned non-strategic businesses such as the recently announced divestiture of our Polypropylene Licensing and Catalysts business, and deemphasized low-growth, commoditizing businesses, such as the announcements we have made on the chlorine value chain. We have identified targets and are moving forward with defined divestiture plans – actions valued at a minimum of $3 - $4 billion. The proceeds of these divestitures will create further capacity for the Company to generate returns to shareholders.

“Our cash priorities remain intact: rewarding our shareholders, reducing interest payments from our debt structure and funding organic growth.”

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