Summary
Dow Inc. (DOW) announced a significant legal victory on September 23, 2019, with the Court of Queen's Bench in Alberta, Canada, ordering Nova Chemicals Corporation to pay CAD $1.43 billion (approximately USD $1.08 billion) to certain Dow subsidiaries. This judgment relates to damages incurred by Dow through 2012 concerning their jointly-owned ethylene asset in Joffre, Alberta. While this is a substantial award, investors should note that the judgment is subject to appeal by Nova Chemicals. Dow expects to recognize an accounting gain from this award in the third quarter of 2019. However, the company plans to treat this gain as a significant non-recurring item when reporting non-GAAP financial measures, such as operating earnings per share, meaning it will likely be excluded from adjusted earnings calculations.
Key Highlights
- 1Dow Inc. received a favorable judgment of CAD $1.43 billion (approx. USD $1.08 billion) from the Court of Queen's Bench in Alberta, Canada.
- 2The judgment is against Nova Chemicals Corporation and relates to damages from a jointly-owned ethylene asset in Joffre, Alberta, incurred through 2012.
- 3Dow expects to record an accounting gain in the third quarter of 2019 related to this judgment.
- 4The judgment is subject to appeal by Nova Chemicals.
- 5Dow plans to treat the gain from this judgment as a non-recurring item in its non-GAAP financial measures, including operating earnings per share.
- 6This filing is an 8-K Current Report, indicating a material event has occurred.