Business Context and Reporting Period
This Form 8-K, dated June 3, 2019, is filed by Dow Inc. and The Dow Chemical Company (TDCC). It provides supplemental unaudited pro forma financial information following the separation of Dow Inc. from DowDuPont Inc. on April 1, 2019. TDCC is deemed the predecessor to Dow Inc., and its historical results prior to April 1, 2019, are treated as the historical results of Dow Inc.
Key Financial Metrics
The filing does not contain specific numerical values for revenue, profit, cash flow, margins, debt, or liquidity. Instead, it references Exhibits 99.1 and 99.2, which contain the unaudited pro forma combined statements of income, segment information, and supplemental cash flow data adjusted for the separation.
Material Changes and Adjustments
The pro forma financial information reflects significant structural changes resulting from the separation:
- Discontinued Operations: Distribution of Historical Dow's agricultural sciences business (AgCo) and specialty products business (SpecCo).
- Acquisitions: Receipt of Historical DuPont's ethylene and ethylene copolymers businesses (ECP), excluding ethylene acrylic elastomers.
- Operational Adjustments: Impact of manufacturing, supply, and service agreements with DowDuPont and Corteva, Inc.
- Accounting Policy Changes: Shift from transferring ethylene to downstream businesses at cost to transferring at market-based prices.
Guidance, Outlook, and Risks
The filing states that the provided information is furnished under Regulation FD to ensure consistency with future reporting standards. It explicitly notes that this information is not "filed" for purposes of Section 18 of the Exchange Act and is not subject to its liabilities. Investors are directed to read this information in conjunction with TDCC's historical Form 10-Q and 10-K reports, as well as Dow Inc.'s April 2, 2019, Form 8-K and March 8, 2019, Form 10 Amendment No. 4. No specific forward-looking guidance or risk factors are detailed within the text of this specific filing.
Investor Verification Checklist
- Review Exhibit 99.1 for the specific unaudited pro forma income statements and segment data.
- Review Exhibit 99.2 for the supplemental cash flow information adjusted for the separation.
- Verify the impact of the shift to market-based pricing for ethylene transfers on future margins.
- Consult the referenced historical Form 10-Q and 10-K filings for TDCC to compare pre-separation performance.
- Confirm the terms of the supply and service agreements with DowDuPont and Corteva, Inc. mentioned in the adjustments.