Dow Q4 2021 Results
January 27, 2022
Dow reports fourth quarter 2021 results
• GAAP earnings per share (EPS) was $2.32. Operating EPS1 was $2.15, compared to $0.81 in the year-ago
period. Operating EPS excludes certain items, totaling $0.17 per share, primarily due to certain tax-related
• Net sales were $14.4 billion, up 34% versus the year-ago period, with improvement in every operating segment,
business and region. Sequentially, net sales were down 3% primarily driven by decreased polyethylene volume
due to supply constraints as well as lower olefin and co-product prices.
• Local price increased 39% versus the year-ago period, reflecting gains in all operating segments, businesses
and regions. Sequentially, price increased 1% with gains in Performance Materials & Coatings and Industrial
Intermediates & Infrastructure, led by industrial, construction and personal care applications along with
continued tightness in siloxane supply.
• Volume decreased 4% versus the year-ago period and 3% sequentially, primarily driven by supply constraints
from maintenance and lingering effects from Covid and weather-related outages, as well as global logistics
constraints across several key value chains.
• Equity earnings were $224 million, up $118 million from the year-ago period due to margin expansion at Sadara
and the Thai and Kuwait joint ventures. Sequentially, equity earnings were down $25 million driven by impacts
from planned maintenance turnaround activity at Sadara.
• GAAP Net Income was $1.8 billion. Operating EBIT1 was $2.3 billion, up $1.2 billion from the year-ago period,
with gains in every operating segment due to margin expansion and increased equity earnings. Sequentially,
operating EBIT declined $621 million as price gains in Performance Materials & Coatings and Industrial
Intermediates & Infrastructure were more than offset by increased raw material and energy costs and supply
• Cash provided by operating activities – continuing operations was $2.6 billion, up $901 million year-over-year
and a decrease of $162 million compared to the prior quarter. Free cash flow1 was $2.1 billion.
• Returns to shareholders totaled $912 million in the quarter, comprised of $512 million in dividends and
$400 million in share repurchases.
Jim Fitterling, chairman and chief executive officer, commented on the quarter:
“In the fourth quarter, Team Dow once again delivered top- and bottom-line growth year-over-year across all
operating segments. Underlying demand strength and continued operating discipline enabled us to overcome
supply and logistics constraints as well as higher raw material and energy costs.
“Our performance in the fourth quarter capped a record year for Dow in 2021. We achieved full year sales of
$55 billion and operating EBIT of $9.5 billion, with growth and margin expansion across all operating segments, as
well as $7.1 billion of cash flow from operations and annual ROIC of more than 22%. We delivered on our financial
priorities with proactive liability management actions through the year, including reducing gross debt by $2.4 billion
and a $1 billion elective pension contribution, while returning a cumulative $3.1 billion to shareholders. Importantly,
we also announced our plan to decarbonize our assets while growing our earnings, positioning Dow to continue on
a path to deliver more than $3 billion of accretive underlying earnings growth, advance our sustainability leadership,
and create long-term value for our shareholders.”
Industrial Intermediates & Infrastructure segment net sales in the quarter were $4.5 billion, up 30% versus the year ago
period. Local price improved 38% year-over-year with gains in both businesses and in all regions on continued
strong industry demand. Volume declined 7% year-over-year due to a planned transition away from a low-margin
coproducer contract and planned maintenance turnaround activity. On a sequential basis, the segment recorded a
net sales increase of 1%, with local price gains in both businesses and all regions. Volume declined 2% sequentially
as improved supply availability in Industrial Solutions was more than offset by planned maintenance turnaround
activity in Polyurethanes & Construction Chemicals.
Equity earnings were $90 million, an increase of $54 million compared to the year-ago period, driven by margin
expansion at the Kuwait joint ventures. On a sequential basis, equity earnings decreased by $32 million, primarily
from lower supply availability at the Sadara joint venture due to planned maintenance turnaround activity.
Operating EBIT was $595 million, an increase of $299 million compared to the year-ago period, primarily due to
continued price strength in both businesses, driving Op. EBIT margins up 460 basis points year-over-year.
Sequentially, Op. EBIT was down $118 million, and Op. EBIT margins declined by 280 basis points, primarily driven
by energy cost increases in Europe and planned maintenance turnaround activity.
Polyurethanes & Construction Chemicals business increased net sales compared to the year-ago period as tight
supply and demand balances in key value chains led to broad-based price gains in all regions. Volume declines
year-over-year were primarily driven by a planned transition away from a low-margin coproducer contract and our
planned maintenance turnaround activity. Sequentially, net sales declined as local price increases in all regions
were more than offset by planned maintenance turnaround activity.
Industrial Solutions business net sales increased from the year-ago period with local price gains in all regions.
Volume was flat year-over-year as higher volume from a renewable energy contract was offset by fewer licensing
and catalyst sales. Net sales increased sequentially on volume growth from improved supply availability and local
price gains in all regions.
Performance Materials & Coatings segment net sales in the quarter were $2.6 billion, up 26% versus the year-ago
period. Local price increased 30% year-over-year, with gains in both businesses and in all regions. Volume declined
4% year-over-year as stronger demand for performance silicones applications and architectural coatings in the U.S.
& Canada was more than offset by lower siloxane supply availability due to a pull forward of maintenance activity
to coincide with dual-control actions in China. On a sequential basis, net sales were up 1% with local price gains in
both businesses and in all regions. Volume declined 8% sequentially as increased supply availability of acrylic
monomers was more than offset by maintenance activity at a siloxane facility in China and lower seasonal demand
for coatings applications.
Operating EBIT was $295 million, compared to $50 million in the year-ago period, as Op. EBIT margins increased
900 basis points due to strong price momentum for silicones and coatings offerings. Sequentially, Op. EBIT
improved $11 million, as price gains were partly offset by planned maintenance turnaround activity.
Consumer Solutions business achieved higher net sales, with local price gains in all regions and end-market
applications year-over-year. Volume declined versus the year-ago period, as strong demand particularly for
industrial, electronics and personal care applications was offset by lower supply availability due to a pull forward of
maintenance activity to coincide with dual-control actions in China. Sequentially, net sales were up as local price
increases in all regions and end-market applications more than offset volume declines, primarily due to maintenance
activity at a siloxane facility.
Coatings & Performance Monomers business achieved increased net sales compared to the year-ago period, led
by local price gains in all regions on tight supply and demand balances and higher raw material costs. Volume
declined year-over-year as stronger demand for architectural coatings and industrial coatings primarily in the U.S.
& Canada was more than offset by lower merchant sales of acrylic monomers partly due to Dow’s own higher-value
captive use. Sequentially, the business delivered local price gains in all regions. Volume declined sequentially due
to seasonal demand declines for coatings applications in the Northern Hemisphere.
“In 2022, we expect continued demand strength across our end markets, supported by growing industrial production
and sustained consumer spending,” said Fitterling. “We are working hard to normalize operating rates, inventory
and service levels following a year of supply constraints and Covid-related logistics challenges.
“While the global economy continues to be impacted by supply chain pressures, these logistics constraints are
expected to ease throughout the year to fulfill elevated order backlogs and pent-up customer demand. As we
navigate these near-term dynamics, we will continue to be disciplined in the implementation of our strategy and
progress on our higher-return, lower-risk growth projects and efficiency programs. We will also further advance our
key sustainability initiatives to decarbonize our assets and capture increasing demand for lower carbon and circular