-
Intends to issue annual dividend payout of $2.1B and launch $3B
open share repurchase program after separation – targeting shareholder
remuneration of approximately 65% of operating net income across the
cycle
-
Reiterates commitment to deliver cost synergy savings and stranded
cost removal – approximately $800 million remaining to deliver, of
which 75% of those savings will be additive in 2019 versus 2018
-
Confirms near-term CapEx expenditures at or below depreciation and
amortization – in the range of $2.5 billion - $2.8 billion – for at
least the next three years; focused on incremental, high ROIC growth
investments
MIDLAND, Mich.--(BUSINESS WIRE)--
Dow, the world’s leading materials science company, will meet with
sell-side analysts in New York City today. During the meeting, Dow will
discuss its: operational and financial targets, portfolio
differentiation relative to peers, near-term earnings growth
opportunities, and intended capital allocation priorities upon
separation from DowDuPont. The new Dow is expected to separate from
DowDuPont as an independent, publicly traded company on April 1, 2019.
“New Dow will be well positioned to drive best-in-class financial
performance and shareholder returns,” said Jim Fitterling, chief
executive officer of Dow. “We have a focused playbook of cost and growth
drivers, clear and disciplined capital allocation priorities and a
strong balance sheet. Our path to shareholder value creation is
straightforward and in our control.”
During the event, Fitterling and Howard Ungerleider, president and chief
financial officer of Dow, will articulate the investment thesis and
financial goals of the new Dow, including:
-
How Dow’s streamlined portfolio and industry-leading positions will
unlock earnings and cash flow upside, and position the company for
reduced earnings volatility relative to peers;
-
The intent to issue an industry-leading dividend payout of $2.1
billion and launch a $3 billion open market share repurchase program
after separation, with a shareholder remuneration target of
approximately 65 percent of operating net income across the cycle;
-
Capital expenditures at or below depreciation and amortization,
comprised of incremental, high return on invested capital growth
investments, with a near-term spending range of $2.5 billion – $2.8
billion for at least the next three years;
-
A total of approximately $800 million of cost synergy and stranded
cost savings yet to be delivered, of which 75% will be additive in
2019 versus 2018;
-
Progress the company is making toward its targeted capital structure,
with a target adjusted gross debt to EBITDA ratio of 2.5x – 3.0x;
-
Modeling considerations for the new Dow and each of its operating
segments, and additional details on upcoming incremental, high return
on invested capital growth investments.
The presentation slide deck for the event can be found on www.dow-dupont.com.
About Dow
Dow combines science and technology knowledge to develop premier
materials science solutions that are essential to human progress. Dow
has one of the strongest and broadest toolkits in the industry, with
robust technology, asset integration, scale and competitive capabilities
that enable it to address complex global issues. Dow’s market-driven,
industry-leading portfolio of advanced materials, industrial
intermediates, and plastics businesses deliver a broad range of
differentiated technology-based products and solutions for customers in
high-growth markets such as packaging, infrastructure, and consumer
care. Dow is a subsidiary of DowDuPont (NYSE: DWDP), a holding company
comprised of Dow and DuPont with the intent to form three strong,
independent, publicly traded companies in agriculture, materials science
and specialty sectors. More information can be found at www.dow.com.
Cautionary Statement About Forward-Looking Statements
This communication contains “forward-looking statements” within the
meaning of the federal securities laws, including Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. In this context, forward-looking
statements often address expected future business and financial
performance and financial condition, and often contain words such as
“expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “see,”
“will,” “would,” “target,” and similar expressions and variations or
negatives of these words.
DowDuPont plans to separate into three, independent, publicly traded
companies—one for each of its agriculture, materials science and
specialty products businesses (the “Intended Business Separations” and
the transactions to accomplish the Intended Business Separations, the
“separations”).
In furtherance of the Intended Business Separations, DowDuPont is
engaged in a series of reorganization and realignment steps to realign
its businesses so that the assets and liabilities aligned with the
materials science business will be held by legal entities that will
ultimately be subsidiaries of Dow Holdings Inc. (“Dow”) and the assets
and liabilities aligned with the agriculture business will be held by
legal entities that will ultimately be subsidiaries of Corteva Inc.
(“Corteva”). Following this realignment, DowDuPont expects to distribute
its materials science and agriculture businesses through two separate
U.S. federal tax-free spin-offs in which DowDuPont stockholders, at the
time of such spin-offs, will receive pro rata dividends of the shares of
the capital stock of Dow and of Corteva, as applicable (the
“distributions”).
Forward-looking statements by their nature address matters that are, to
varying degrees, uncertain, including statements about the Intended
Business Separations, the separations and distributions. Forward-looking
statements, including those related to the DowDuPont’s ability to
complete, or to make any filing or take any other action required to be
taken to complete, the separations and distributions, are not guarantees
of future results and are subject to risks, uncertainties and
assumptions that could cause actual results to differ materially from
those expressed in any forward-looking statements. Forward-looking
statements also involve risks and uncertainties, many of which are
beyond the DowDuPont’s control. Some of the important factors that could
cause DowDuPont’s, Historical Dow’s or Historical DuPont’s actual
results (including DowDuPont’s agriculture business, materials science
business or specialty products business as conducted by and through
Historical Dow and Historical DuPont) to differ materially from those
projected in any such forward-looking statements include, but are not
limited to: (i) ability and costs to achieve all the expected benefits,
including anticipated cost and growth synergies, from the integration of
Historical Dow and Historical DuPont and the Intended Business
Separations; (either directly or as conducted through Historical Dow and
Historical DuPont), (ii) the incurrence of significant costs in
connection with the integration of Historical Dow and Historical DuPont
and the Intended Business Separations; (iii) risks outside the control
of DowDuPont, Historical Dow and Historical DuPont which could impact
the decision of the DowDuPont Board of Directors to proceed with the
Intended Business Separations, including, among others, global economic
conditions, instability in credit markets, declining consumer and
business confidence, fluctuating commodity prices and interest rates,
volatile foreign currency exchange rates, tax considerations, and other
challenges that could affect the global economy, specific market
conditions in one or more of the industries of the businesses proposed
to be separated, and changes in the regulatory or legal environment and
requirement to redeem $12.7 billion of DowDuPont notes if the Intended
Business Separations are abandoned or delayed beyond May 1, 2020; (iv)
potential liability arising from fraudulent conveyance and similar laws
in connection with the separations and distributions; (v) disruptions or
business uncertainty, including from the Intended Business Separations,
could adversely impact DowDuPont’s business (either directly or as
conducted by and through Historical Dow or Historical DuPont), or
financial performance and its ability to retain and hire key personnel;
(vi) uncertainty as to the long-term value of DowDuPont common stock;
(vii) potential inability to access the capital markets; and (viii)
risks to DowDuPont’s, Historical Dow’s and Historical DuPont’s business,
operations and results of operations from: the availability of and
fluctuations in the cost of feedstocks and energy; balance of supply and
demand and the impact of balance on prices; failure to develop and
market new products and optimally manage product life cycles; ability,
cost and impact on business operations, including the supply chain, of
responding to changes in market acceptance, rules, regulations and
policies and failure to respond to such changes; outcome of significant
litigation, environmental matters and other commitments and
contingencies; failure to appropriately manage process safety and
product stewardship issues; global economic and capital market
conditions, including the continued availability of capital and
financing, as well as inflation, interest and currency exchange rates;
changes in political conditions, including trade disputes and
retaliatory actions; business or supply disruptions; security threats,
such as acts of sabotage, terrorism or war, natural disasters and
weather events and patterns which could result in a significant
operational event for the DowDuPont, adversely impact demand or
production; ability to discover, develop and protect new technologies
and to protect and enforce the DowDuPont’s intellectual property rights;
failure to effectively manage acquisitions, divestitures, alliances,
joint ventures and other portfolio changes; unpredictability and
severity of catastrophic events, including, but not limited to, acts of
terrorism or outbreak of war or hostilities, as well as management’s
response to any of the aforementioned factors. These risks are and will
be more fully discussed in DowDuPont’s current, quarterly and annual
reports and other filings made with the U. S. Securities and Exchange
Commission (the “Commission”) as well as the preliminary registration
statements on Form 10 of each of Dow and Corteva, in each case as may be
amended from time to time in future filings with the Commission.
While the list of factors presented here is considered representative,
no such list should be considered to be a complete statement of all
potential risks and uncertainties. Unlisted factors may present
significant additional obstacles to the realization of forward-looking
statements. Consequences of material differences in results as compared
with those anticipated in the forward-looking statements could include,
among other things, business disruption, operational problems, financial
loss, legal liability to third parties and similar risks, any of which
could have a material adverse effect on DowDuPont’s, Historical Dow’s,
Historical DuPont’s, Dow’s or Corteva’ s consolidated financial
condition, results of operations, credit rating or liquidity. None of
DowDuPont, Historical Dow, Historical DuPont, Dow or Corteva assumes any
obligation to publicly provide revisions or updates to any
forward-looking statements whether as a result of new information,
future developments or otherwise, should circumstances change, except as
otherwise required by securities and other applicable laws. A detailed
discussion of some of the significant risks and uncertainties which may
cause results and events to differ materially from such forward-looking
statements is included in the section titled “Risk Factors” (Part I,
Item 1A) of the 2018 annual reports on Form 10-K of each of DowDuPont,
Historical Dow and Historical DuPont and as set forth in the preliminary
registration statements on Form 10 of each of Dow and Corteva, in each
case as may be amended from time to time in future filings with the
Commission.
Merger of Equals
Effective August 31, 2017, pursuant to the merger of equals transaction
contemplated by the Agreement and Plan of Merger, dated as of December
11, 2015, as amended on March 31, 2017 (the "Merger Agreement"), The Dow
Chemical Company ("Historical Dow") and E. I. du Pont de Nemours &
Company ("Historical DuPont") each merged with subsidiaries of DowDuPont
Inc. ("DowDuPont" or the "Company") and, as a result, Historical Dow and
Historical DuPont became subsidiaries of DowDuPont Inc. (the "Merger").
Historical Dow was determined to be the accounting acquirer in the
Merger and, as a result, the historical financial statements of
Historical Dow, prepared under U.S. generally accepted accounting
principles ("U.S. GAAP"), for the periods prior to the Merger are
considered to be the historical financial statements of DowDuPont.
Non-GAAP Financial Measures
This communication includes information that does not conform to U.S.
GAAP and are considered non-GAAP measures. DowDuPont and Dow’s
management believes that these non-GAAP measures best reflect the
ongoing performance of Dow as well as DowDuPont’s Materials Science
Division during the periods presented and provide more relevant and
meaningful information to investors as they provide insight with respect
to ongoing operating results of Dow and a more useful comparison of
year-over-year results. These non-GAAP measures supplement the
DowDuPont’s and Dow’s U.S. GAAP disclosures and should not be viewed as
an alternative to U.S. GAAP measures of performance. Furthermore, such
non-GAAP measures may not be consistent with similar measures provided
or used by other companies. This data should be read in conjunction with
Dow’s preliminary registration statement on Form 10, as amended from
time to time. DowDuPont and Dow do not provide forward-looking U.S. GAAP
financial measures or a reconciliation of forward-looking non-GAAP
financial measures to the most comparable U.S. GAAP financial measures
on a forward-looking basis because neither DowDuPont nor Dow is able to
predict with reasonable certainty the ultimate outcome of pending
litigation, unusual gains and losses, foreign currency exchange gains or
losses and potential future asset impairments, as well as discrete
taxable events, without unreasonable effort. These items are uncertain,
depend on various factors, and could have a material impact on GAAP
results for the guidance period.
The term “adjusted gross debt” includes the following adjustments to
gross debt: unfunded pension and OPEB liabilities, proportionate share
of JV debt, operating leases and unamortized debt discount.
The term “operating net income” means Net Income available for common
stock holders excluding the impact of significant items.
Trademarks
We own or have rights to various trademarks, service marks and trade
names that we use in connection with the operation of our business. The
Dow Diamond, DuPont Oval logo, DuPont™, the DowDuPont logo and all
products, unless otherwise noted, denoted with ™, ℠ or ® are trademarks,
service marks or registered trademarks of The Dow Chemical Company, E.
I. du Pont de Nemours and Company, DowDuPont Inc. or their respective
subsidiaries or affiliates. Solely for convenience, the trademarks,
service marks and trade names referred to in this communication may
appear without the ™, ℠ or ® symbols, but such references are not
intended to indicate, in any way, that we will not assert, to the
fullest extent under applicable law, our rights or the right of the
applicable licensor to these trademarks, service marks and trade names.
This communication may also contain trademarks, service marks and trade
names of certain third parties, which are the property of their
respective owners. Our use or display of third parties’ trademarks,
service marks, trade names or products in this communication is not
intended to, and should not be read to, imply a relationship with or
endorsement or sponsorship of us.
Correct use of marks should be confirmed with business as appropriate.
Copyright
©2019 DowDuPont. All rights reserved
View source version on businesswire.com:
https://www.businesswire.com/news/home/20190225005489/en/
Media:
Rachelle Schikorra
ryschikorra@dow.com
+1
989-638-4090
Investors:
Neal Sheorey
nrsheorey@dow.com
+1
989-636-6347
Source: DowDuPont