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Dow Reports Fourth Quarter And Full-Year Results

The Dow Chemical Company (NYSE: DOW):

Fourth Quarter 2013 Highlights

  • The Company reported earnings of $0.79 per share, or $0.65 per share on an adjusted basis (1). This compares with a loss of $0.61 per share in the year-ago period, or earnings of $0.33 per share on an adjusted basis.
  • EBITDA (2) was $2.3 billion, or $2.1 billion on an adjusted basis (3), an increase of 31 percent versus the year-ago period with gains in every operating segment. Adjusted EBITDA margin (4) expanded more than 300 basis points, led by Performance Plastics, Performance Materials, and Coatings and Infrastructure Solutions.
  • Sales were $14.4 billion, up 3 percent versus the same quarter last year or up 4 percent on an adjusted basis (5). Sales increased in all operating segments, excluding Feedstocks and Energy. Gains were led by record fourth quarter revenue in Agricultural Sciences (up 13 percent), Coatings and Infrastructure Solutions (up 10 percent) and Performance Plastics (up 8 percent) on an adjusted basis.
  • Volume rose 2 percent, or 3 percent on an adjusted basis versus the same quarter last year. Gains were reported in most operating segments and geographic areas. Volume growth was led by emerging geographies, which increased 7 percent, driven by Latin America (up 13 percent). Volume gains were also reported in the United States (up 3 percent).
  • Price increased 1 percent, primarily due to gains in Performance Plastics (up 7 percent) and Performance Materials (up 1 percent) partially offset by declines in Feedstocks and Energy (down 6 percent).
  • The Company’s previously announced cost actions gained further traction in the quarter, enabling Dow to exceed its $500 million target for the year.
  • Cash flow from operations was $2.2 billion for the quarter, bringing full-year cash flow from operations to $7.8 billion. Excluding the K-Dow award, full-year cash flow from operations was a record $6 billion.
  • The Company reduced gross debt in the quarter nearly $660 million, bringing Dow’s net debt to EBITDA (6) to 1.4x and net debt to capitalization to 30 percent – both well below the Company’s historical average.
  • The Company demonstrated its ongoing commitment to shareholder remuneration, returning more than $550 million to shareholders in the quarter through declared dividends and share repurchases (7). For the full year, Dow has returned $1.8 billion to shareholders, representing a nearly 30 percent increase versus 2012.

Comment

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

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