Stock Code: 300048

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Dow Reports Fourth Quarter and Full-Year Results

Number of visits: Date:2/5/2012 10:39:12

Fourth Quarter 2011 Highlights

  • The Company reported a loss of $0.02 per share, or earnings of $0.25 per share excluding certain items(1). This compares with earnings of $0.37 per share in the year-ago period, or $0.47 per share excluding certain items. Earnings for the quarter were reduced by certain items totaling $0.27 per share, including the recognition of a valuation allowance in Brazil that increased income taxes by $264 million, equivalent to $0.23 per share, resulting in a 76.6 percent effective tax rate.
  • Sales were $14.1 billion, up 2 percent versus the same quarter last year. Sales excluding the impact of divestitures increased 5 percent versus the year-ago period, with increases in all geographic areas and in all operating segments except Electronic and Functional Materials, which was flat.
  • Sales in emerging geographies were $5 billion, reaching a new quarterly record and representing 35 percent of Dow’s global sales. Sales excluding divestitures rose 10 percent in these regions, with growth across all operating segments.
  • Volume declined 3 percent, but was flat excluding the impact of divestitures. On the same basis, volume in emerging geographies grew 7 percent led by China, which was up 12 percent. This increase fully offset declines in Western Europe (down 5 percent) and the United States (down 2 percent).
  • Price was up 5 percent, more than offsetting a $476 million increase in purchased feedstock and energy costs. Price was up in all operating segments and in all geographic areas.
  • The Company’s operating rate was 72 percent for the quarter, down 9 percentage points year-over-year, reflecting weak demand and customer destocking, particularly in Western Europe.
  • Equity earnings were $259 million. For the full year equity earnings totaled $1.2 billion, representing the highest level in the Company’s history.
  • EBITDA(2) was $1.4 billion, or $1.6 billion excluding certain items. Agricultural Sciences reported record fourth quarter EBITDA driven by demand growth in Latin America (up 16 percent).
  • Net debt(3) to total capitalization declined to 40.8 percent, on target to reach the Company’s 2012 goal. This was primarily due to Dow’s actions during the quarter to improve working capital and operating rates, resulting in the generation of $2.0 billion of cash flow from operating activities.

Comment

Andrew N. Liveris, Dow’s chairman and chief executive officer, stated:

“Dow saw deterioration in the macro environment mid-quarter and, in line with our stated commitments, we purposefully intervened. In the midst of uncertainty and significant destocking across customer supply chains, we maintained our focus on financial discipline and operating efficiency – evidenced by our tight management of working capital, focus on improving operating rates and significant cash flow generation.

“We derived strong benefit from our geographic footprint – delivering broad-based top-line gains and achieving record sales for both the quarter and the year in emerging regions, balancing considerable weakness in Western Europe. In addition, our significant U.S. market and feedstock advantage positioned us for success in the quarter and will continue to provide substantial value moving forward.

“Times like these demand a focused approach and strong resolve, and Dow’s firm operating discipline, cost control and productivity will continue throughout 2012. This, together with our broad geographic footprint, balanced and integrated portfolio of businesses, technology-rich innovation engine and world-class feedstock advantage, will enable us to continue to deliver shareholder value.”

2011 Full-Year Highlights

  • Dow reported full-year 2011 earnings of $2.05 per share, up 19 percent versus prior-year earnings of $1.72 per share. Excluding certain items, Dow’s full-year 2011 earnings were $2.54 per share, up 29 percent versus the prior-year result on a comparable basis of $1.97 per share.
  • Sales reached $60 billion, up 12 percent versus the prior year and a record for the Company. Excluding the impact of divestitures, sales were up 18 percent versus the prior year, with double-digit gains in every geographic area and every operating segment except Electronic and Functional Materials, which was up 9 percent.
  • Sales in emerging geographies surpassed $19 billion for the year, achieving a new record for the Company. Sales in Asia Pacific exceeded $10 billion for the first time in the Company’s history. Excluding the impact of divestitures, sales in this region were up 16 percent.
  • Volume was down 1 percent. Excluding the impact of divestitures, volume was up 4 percent, with increases in all geographic areas, led by Latin America (up 9 percent) and Asia Pacific (up 6 percent).
  • Price was up 13 percent, or 14 percent excluding the impact of divestitures. Double-digit gains were reported in all operating segments except Electronic and Functional Materials (up 6 percent) and Agricultural Sciences (up 5 percent).
  • Price gains more than offset a $4.3 billion increase in purchased feedstock and energy costs.
  • For the full year, the Company reported EBITDA of $7.8 billion. Excluding certain items, EBITDA totaled $8.4 billion, a 12 percent increase versus 2010. Full-year EBITDA records were achieved in Electronic and Functional Materials, Agricultural Sciences, Performance Materials and Feedstocks and Energy.
  • The Company generated nearly $4 billion of cash from operating activities in the year, and reduced its net debt to total capitalization ratio 180 basis points below year-end 2010.

Industry: Industry Express

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