Dow Chemical Co (NYSE:DOW) Q2 2020 Earnings Conference Call - Final Transcript
Jul 23, 2020 • 08:00 am ET
Good day, and welcome to the Dow second-quarter 2020 earnings call. [Operator instructions] Also, today's call is being recorded. I would now like to turn the call over to Colleen Kay, vice president of investor relations. Please go ahead, ma'am.
Good morning, everyone. Thank you for joining us to discuss the second quarter financial results for Dow. We're making this call available via webcast and we have prepared slides to supplement our comments during this conference call. They are posted on the Investor Relations section of Dow's website and through the link to our webcast.
I'm Colleen Kay, investor relations vice president for Dow. And joining me on the call today are Jim Fitterling, Dow's chairman and chief executive officer; and Howard Ungerleider, president and chief financial officer. Please read the forward-looking statement disclaimer contained in the earnings news release and slides. During our call, we will make forward-looking statements regarding our expectations or predictions about the future.
Because these statements are based on current assumptions and factors that involve risks and uncertainties, our actual performance and results may differ materially from our forward-looking statements. Dow's Forms 10-Q and 10-K include detailed discussions of principal risks and uncertainties, which may cause such differences. Unless otherwise specified, all financials, where applicable, exclude significant items. We'll also refer to non-GAAP measures.
A reconciliation to the most directly comparable GAAP financial measure and other associated disclosures is contained in the Dow earnings release, in the slides that supplement our comments today and on the Dow website. On Slide 2, you'll see our agenda for the call. Jim will begin with the second-quarter highlights and discuss the operating performance of the segment. Howard will provide a financial overview of the quarter and an update on Sadara.
He will share the additional actions we are taking to address current market conditions and then move into modeling guidance. Jim will close with some remarks on our outlook and Dow's competitive advantages for growth. Following that, we will take your questions. With that, I'll turn the call over to Jim.
Thank you, Colleen, and thanks to everyone joining us this morning. On behalf of the Dow team, we hope that each of you and your families are healthy and safe. Turning on Slide 3. Despite the impact the COVID-19 pandemic had on Dow's financial results this quarter, the Dow team continued to stay focused, prioritizing cash and maintaining our financial strength.
We electively lowered our operating rates to meet demand, reduced inventory and focused on cash to deliver on our priorities. Importantly, we generated $1.6 billion in cash flow from operations, up more than $600 million year over year, and free cash flow of $1.3 billion, up more than $800 million year over year. Our discipline to focus on cash generation has resulted in an improved cash flow conversion every quarter since spin, delivering 110% conversion on a trailing 12-month basis. Once again, we ended the quarter with approximately $12 billion in cash and committed liquidity, and we