DOW Inc.: Form 10-Q for the period ended Jun 30, 2025

This Quarterly Report on Form 10-Q is a combined report being filed by Dow Inc. and The Dow Chemical Company and its consolidated subsidiaries (“TDCC” and together with Dow Inc., “Dow” or the "Company") due to the parent/subsidiary relationship between Dow Inc. and TDCC. The information reflected in the report is equally applicable to both Dow Inc. and TDCC, except where otherwise noted. Each of Dow Inc. and TDCC is filing information in this report on its own behalf and neither company makes any representation to the information relating to the other company.

Pursuant to General Instruction H(1)(a) and (b) for Form 10-Q "Omission of Information by Certain Wholly-Owned Subsidiaries," TDCC is filing this Form 10-Q with a reduced disclosure format.

Except as otherwise indicated by the context, the term "Union Carbide" means Union Carbide Corporation, a wholly owned subsidiary of the Company. Additionally, the term "Diamond Infrastructure Solutions" means Dow InfraCo, LLC, an entity that owns and operates infrastructure assets at certain Dow locations on the U.S. Gulf Coast and became a consolidated variable interest entity effective May 1, 2025. The term "EMEAI" refers to the geographic region of Europe, Middle East, Africa and India.

Dow's website and its content are not deemed incorporated by reference into this report.

STATEMENT ON MACROECONOMIC CONDITIONS AND THIRD QUARTER OUTLOOK

Overview of Macroeconomic Conditions and the Company’s Response

The Company has continued to face challenging market conditions, including the significant impact of slower global GDP growth, through the second quarter of 2025. Industry overcapacity due to newer entrants exporting at anti-competitive economics has, and is expected to continue to, negatively impact the Company’s results of operations and cash flows. In addition, the current uncertain geopolitical environment, including the impact of trade policies, has resulted in increased volatility in global markets, also negatively impacting the Company’s results of operations and cash flows. The macroeconomic conditions and volatility experienced in the first six months of 2025 are expected to persist in the near term for the Company and the industry alike.

Despite these challenges, the Company has maintained a strong financial position and solid liquidity and has taken actions to mitigate impacts on its supply chain and results of operations. At the time of this filing, the ultimate impact of tariff policies and other rapidly evolving global trade measures, coupled with existing macroeconomic challenges, is uncertain. The Company is actively monitoring global trade developments to identify actions necessary to maintain competitiveness while it adapts to these new economic challenges. More information on the risks of tariffs and potential impact to the Company can be found in Part II, Item 1A. Risk Factors.

In the first quarter of 2025, Dow announced targeted cost actions to reduce structural costs by $1 billion over the next two years, while its businesses work to balance supply with profitable demand. The cost actions target areas such as third-party spending and include a workforce reduction of approximately 1,500 roles. The Company also announced reductions to its capital expenditures for 2025.

The Company announced further actions to address ongoing macroeconomic volatility and persistently slower global GDP growth in the second quarter of 2025, including the decision to delay construction of its Path2Zero project in Fort Saskatchewan, Alberta, Canada, until market conditions improve, reducing the Company’s expected 2025 enterprise-wide capital expenditures to $2.5 billion, a reduction from the Company's original plan of $3.5 billion. Dow remains committed to its Path2Zero project and the growth upside it will enable in targeted applications like pressure pipe, wire and cable, and food packaging. The Path2Zero project is expected to be the world’s first net-zero Scope 1 and 2 carbon dioxide equivalent emissions integrated ethylene and derivatives complex.

On July 7, 2025, the Company announced additional restructuring actions, approved by its Board of Directors ("Board") on June 30, 2025, to rationalize its global asset footprint, including actions related to the three assets identified as part of the Company’s expanded strategic review of its European assets and certain corporate and other assets, and to enhance the Company’s competitiveness over the economic cycle. The program includes asset write-down and write-off charges, severance and related benefit costs, contract termination fees and other exit and disposal costs. These actions will be completed by the Company primarily over the next four years, including the asset shut downs and completion of the related decommissioning and demolition activities. Significant actions approved to date include the following:

• Packaging & Specialty Plastics will shut down an ethylene facility in Böhlen, Germany by the end of 2027.
• Industrial Intermediates & Infrastructure will shut down chlor-alkali and vinyl assets in Schkopau, Germany by the end of 2027.
• Performance Materials & Coatings will shut down a basics siloxanes plant in Barry, United Kingdom by mid-year 2026.
• The Company will write-off certain Corporate-aligned owned and leased non-manufacturing facilities and other assets.

More information on the restructuring actions and related charges can be found in Note 5 to the Consolidated Financial Statements.

On July 24, 2025, the Company’s Board declared a quarterly dividend of $0.35 per share, adjusting the dividend by 50 percent in response to the prolonged industry downturn. The adjustment to the size of the dividend reflects the Company’s balanced capital allocation approach and enhances financial flexibility amidst a persistently challenging macroeconomic environment.

Outlook

Dow's strategic actions enable it to mitigate the dynamic factors that its industry is facing. However, signs of oversupply from newer market entrants who are exporting to various regions at anti-competitive economics require broader industry engagement and additional regulatory action to restore competitive dynamics. The commissioning of the Company's near-term growth projects, which are all operational in the third quarter of 2025, paired with its longer-term strategic investments, will increase Dow's position in higher-value applications in attractive end markets that are not exposed to this same level of anti-competitive activity. This will enable more resilient earnings and leading shareholder returns. Additionally, Dow is focused on structurally improving its cost base, optimizing its global asset footprint, and maintaining its track record of operational excellence to further strengthen the Company's competitive advantages.

OVERVIEW

The following is a summary of the results for the three months ended June 30, 2025:

• The Company reported net sales in the second quarter of 2025 of $10.1 billion, down 7 percent from $10.9 billion in the second quarter of 2024, and down in all operating segments; Packaging & Specialty Plastics (down 9 percent), Industrial Intermediates & Infrastructure (down 6 percent) and Performance Materials & Coatings (down 5 percent). Net sales decreased in all geographic regions; the U.S. & Canada (down 5 percent), EMEAI (down 8 percent), Latin America (down 12 percent) and Asia Pacific (down 9 percent).
• Local price decreased 7 percent compared with the second quarter of 2024, and was down in all operating segments; Packaging & Specialty Plastics (down 10 percent), Industrial Intermediates & Infrastructure (down 5 percent) and Performance Materials & Coatings (down 3 percent). Local price was down in all geographic regions; Latin America and Asia Pacific (both down 8 percent), EMEAI (down 7 percent) and the U.S. & Canada (down 6 percent).
• Volume decreased 1 percent compared with the second quarter of 2024 and was mixed by operating segment; Packaging & Specialty Plastics (up 1 percent), Industrial Intermediates & Infrastructure (down 2 percent) and Performance Materials & Coatings (down 3 percent). Volume increased in the U.S. & Canada (up 2 percent), and was more than offset by a decrease in EMEAI and Latin America (both down 3 percent) and Asia Pacific (down 1 percent).
• Currency had a favorable impact of 1 percent on net sales compared with the second quarter of 2024, driven by EMEAI (up 2 percent) and Asia Pacific (up 1 percent).
• Restructuring and asset related charges - net were $591 million in the second quarter of 2025. The restructuring charges primarily consisted of asset write-downs and write-offs of $334 million, severance and related benefit costs of $154 million and exit and disposals costs of $103 million related to asset actions, primarily in Europe, approved by the Board on June 30, 2025.
• Equity in losses of nonconsolidated affiliates was $30 million in the second quarter of 2025, compared with equity in earnings of nonconsolidated affiliates of $26 million in the second quarter of 2024, primarily due to lower results at the Company's Thai, Kuwait and non-principal joint ventures, partially offset by improved results at the Sadara joint venture.
• Net income (loss) available for Dow Inc. and TDCC common stockholder(s) was a loss of $835 million and $816 million, respectively, in the second quarter of 2025, compared with income of $439 million and $441 million, respectively, in the second quarter of 2024. Earnings (loss) per share for Dow Inc. was a loss of $1.18 per share in the second quarter of 2025, compared with earnings of $0.62 per share in the second quarter of 2024.
• Cash provided by (used for) operating activities - continuing operations was a use of $470 million in the second quarter of 2025, compared with a source of $832 million in the second quarter of 2024. Cash provided by (used for) operating activities - continuing operations was down $574 million compared with the first quarter of 2025.
• On April 10, 2025, Dow Inc. announced that its Board declared a dividend of $0.70 per share, payable on June 13, 2025, to shareholders of record as of May 30, 2025. This marks the 455th consecutive dividend paid by the Company or its affiliates since 1912.
• On April 10, 2025, Dow Inc. announced results from the 2025 Annual Stockholder Meeting, including the election of all incumbent directors, as well as Rebecca B. Liebert, president and chief executive officer of The Lubrizol Corporation, a Berkshire Hathaway company, to its Board.
• On May 1, 2025, the Company completed the sale of 40 percent of the membership interests in its wholly owned subsidiary Diamond Infrastructure Solutions to InfraPark Holdings, LLC ("InfraPark"), a subsidiary of a fund managed by Macquarie Asset Management. Dow received initial cash proceeds of approximately $2.4 billion from the sale. InfraPark has the option to purchase up to an additional 9 percent of Diamond Infrastructure Solutions' member interests in exchange for additional cash proceeds of up to $600 million within six months of the closing date of the sale.
• On May 1, 2025, the Company announced the completion of the sale of TeloneTM, a soil fumigation product line, to TriCal Soil Solutions, Inc., a distributor and applicator of soil fumigation products for net cash proceeds of $121 million.
• On June 2, 2025, the Company announced it signed a sale and purchase agreement to sell its 50 percent interest in DowAksa Advanced Composites Holdings BV ("DowAksa") to its joint venture partner, Aksa Akrilik Kimya Sanayii A.Ş., for approximately $125 million. The Company is targeting to close the transaction in the third quarter of 2025.
• On June 10, 2025, The Court of King's Bench of Alberta, Canada signed a judgment ordering Nova Chemicals Corporation to pay the Company an additional amount of $1.62 billion Canadian dollars (equivalent to approximately $1.2 billion U.S. dollars) for damages the Company incurred through June 2018, which had not been previously quantified.
• On June 30, 2025, the Board approved restructuring actions to rationalize the Company's global asset footprint, including certain actions identified as part of the Company's previously announced strategic review of its European assets, and certain corporate and other assets.

In addition, the following events occurred subsequent to the second quarter of 2025:

• On July 7, 2025, Moody's Ratings announced a long-term credit rating change for TDCC from Baa1 to Baa2 and affirmed TDCC's P-2 rating and its outlook of negative.
• On July 24, 2025, Dow Inc. announced that its Board declared a dividend of $0.35 per share, payable on September 12, 2025, to shareholders of record as of August 29, 2025. This marks the 456th consecutive dividend paid by the Company or its affiliates since 1912.

RESULTS OF OPERATIONS

Net Sales

The following tables summarize net sales and sales variances by operating segment and geographic region from the prior year:

In millions

1. Portfolio & Other includes the sales impact of the flexible packaging laminating adhesives business, which was sold to Arkema S.A. in the fourth quarter of 2024.

Net sales in the second quarter of 2025 were $10.1 billion, down 7 percent from $10.9 billion in the second quarter of 2024, with local price down 7 percent, volume down 1 percent, and a favorable currency impact of 1 percent. Net sales decreased in all operating segments and all geographic regions. Local price decreased in all geographic regions and in Packaging & Specialty Plastics (down 10 percent), Industrial Intermediates & Infrastructure (down 5 percent), and Performance Materials & Coatings (down 3 percent). Volume decreased 1 percent, driven by EMEAI and Latin America (both down 3 percent) and Asia Pacific (down 1 percent), partially offset by an increase in the U.S. & Canada (up 2 percent). Volume increased in Packaging & Specialty Plastics (up 1 percent) and decreased in Industrial Intermediates & Infrastructure (down 2 percent) and Performance Materials & Coatings (down 3 percent). Currency favorably impacted net sales by 1 percent, driven by EMEAI (up 2 percent) and Asia Pacific (up 1 percent). Portfolio & other unfavorably impacted net sales in Packaging & Specialty Plastics (down 1 percent). Excluding the Hydrocarbons & Energy business, net sales decreased 8 percent.

Net sales for the first six months of 2025 were $20.5 billion, down 5 percent from $21.7 billion in the same period last year, with local price down 5 percent, portfolio & other down 1 percent, and volume up 1 percent. Net sales decreased in all operating segments and all geographic regions. Local price decreased in all geographic regions and in Packaging & Specialty Plastics (down 7 percent), Industrial Intermediates & Infrastructure (down 4 percent), and Performance Materials & Coatings (down 2 percent). Volume increased 1 percent, driven by the U.S. & Canada (up 3 percent) and Asia Pacific (up 1 percent), partially offset by declines in Latin America (down 4 percent) and EMEAI (down 1 percent). Volume increased in Packaging & Specialty Plastics (up 2 percent) and decreased in Industrial Intermediates & Infrastructure (down 1 percent) and Performance Materials & Coatings (down 2 percent). Excluding the Hydrocarbons & Energy business, net sales decreased 6 percent.

Cost of Sales

Cost of sales ("COS") was $9.5 billion in the second quarter of 2025, compared with $9.6 billion in the second quarter of 2024. COS decreased in the second quarter of 2025 primarily due to lower raw material and feedstock costs, decreased planned maintenance turnaround spending, adjustments to legacy groundwater contamination matters and the impact of the Company's cost reduction initiatives, partially offset by the impact of lower operating rates. For the first six months of 2025, COS was $19.3 billion, compared with $19.1 billion in the first six months of 2024. COS for the first six months of 2025 increased primarily due to the impact of lower operating rates and a charge related to an arbitration settlement agreement for historical product claims from a divested business, partially offset by adjustments to legacy groundwater contamination matters, lower raw material and feedstock costs and decreased planned maintenance turnaround spending. COS as a percentage of net sales was 94.2 percent in the second quarter of 2025 (87.9 percent in the second quarter of 2024) and 93.9 percent for the first six months of 2025 (88.0 percent for the first six months of 2024).

Research and Development Expenses

Research and development ("R&D") expenses totaled $188 million in the second quarter of 2025, compared with $196 million in the second quarter of 2024. R&D expenses for the first six months of 2025 were $388 million, compared with $400 million in the first six months of 2024. R&D expenses for the three and six months ended June 30, 2025 decreased primarily due to the Company's cost reduction initiatives.

Selling, General and Administrative Expenses

Selling, general and administrative ("SG&A") expenses totaled $347 million in the second quarter of 2025, compared with $390 million in the second quarter of 2024. SG&A expenses decreased in the second quarter of 2025 primarily due to the impact of lower third-party purchased services. For the first six months of 2025, SG&A expenses were $713 million, compared with $832 million in the first six months of 2024. SG&A expenses for the first six months of 2025 decreased primarily due to lower third-party purchased services and decreased bad debt expense, including the impact of a favorable resolution of a dispute with a customer.

Amortization of Intangibles

Amortization of intangibles was $63 million in the second quarter of 2025 compared with $77 million in the second quarter of 2024. In the first six months of 2025, amortization of intangibles was $139 million, compared with $158 million in the first six months of 2024. Amortization of intangibles decreased primarily due to certain intangible assets becoming fully amortized in 2025.

Restructuring and Asset Related Charges - Net

2025 Restructuring Program

On January 27, 2025, the Board approved targeted actions to further achieve the Company's cost reduction initiatives in response to ongoing macroeconomic uncertainty, while reinforcing its long-term competitiveness across the economic cycle. As a result of these actions, in the first quarter of 2025 the Company recorded pretax charges of $207 million for severance and related benefits costs, related to Corporate. These actions are expected to be substantially complete by the end of 2026. See Note 5 to the Consolidated Financial Statements for additional information.

On June 30, 2025, the Board approved restructuring actions to rationalize the Company's global asset footprint, including certain actions identified as part of the Company's previously announced strategic review of its European assets and certain corporate and other assets, and to enhance the Company's competitiveness over the economic cycle. The program includes asset write-down and write-off charges, severance and related benefit costs and other exit and disposal costs. As a result of these actions, in the second quarter of 2025 the Company recorded pretax restructuring charges of $591 million, consisting of severance and related benefit costs of $154 million, asset write-downs and write-offs of $334 million and costs associated with exit and disposal activities of $103 million. Restructuring charges by segment were as follows: $158 million in Packaging & Specialty Plastics, $89 million in Industrial Intermediates & Infrastructure, $147 million in Performance Materials & Coatings and $197 million in Corporate. See Note 5 to the Consolidated Financial Statements for additional information.

2023 Restructuring Program

Actions related to the restructuring program approved by the Board on January 25, 2023 were complete at the end of the second quarter of 2025. In the first quarter of 2025, the Company recorded an additional pretax restructuring charge of $5 million for asset write-downs and write-offs and an asset related credit adjustment of $4 million, related to Industrial Intermediates & Infrastructure. See Note 5 to the Consolidated Financial Statements for additional information.

Equity in Earnings (Losses) of Nonconsolidated Affiliates

The Company's share of equity in losses of nonconsolidated affiliates was $30 million in the second quarter of 2025, compared with equity in earnings of nonconsolidated affiliates of $26 million in the second quarter of 2024. The Company's share of equity in losses of nonconsolidated affiliates was $50 million for the first six months of 2025, compared with equity in earnings of nonconsolidated affiliates of $43 million for the first six months of 2024. The decrease in both periods was primarily driven by lower results at the Company's Thai, Kuwait and non-principal joint ventures, partially offset by improved results at the Sadara joint venture. Cash dividends from nonconsolidated affiliates were $170 million for the first six months of 2025, compared with $199 million for the first six months of 2024.

Sundry Income (Expense) – Net

Sundry income (expense) - net for the three months ended June 30, 2025 was income of $147 million and $163 million for Dow Inc. and TDCC, respectively, compared with income of $76 million and $74 million, respectively, for the three months ended June 30, 2024. The second quarter of 2025 included a gain from the divestiture of the Company's soil fumigation product line, non-operating pension and postretirement benefit plan credits, and foreign currency exchange gains. The second quarter of 2024 included non-operating pension and postretirement benefit plan credits, gains on the sales of assets and investments and foreign currency exchange losses. See Note 6 to the Consolidated Financial Statements for additional information.

Sundry income (expense) - net for the six months ended June 30, 2025 was income of $160 million and $176 million for Dow Inc. and TDCC, respectively, compared with income of $137 million and $135 million, respectively, for the six months ended June 30, 2024. The first six months of 2025 included a gain from the divestiture of the Company's soil fumigation product line, non-operating pension and postretirement benefit plan credits, and foreign currency exchange gains, partially offset by a loss on early extinguishment of debt. The first six months of 2024 included non-operating pension and postretirement benefit plan credits and gains on the sales of assets and investments, partially offset by foreign currency exchange losses. See Note 6 to the Consolidated Financial Statements for additional information.

Interest Expense and Amortization of Debt Discount

Interest expense and amortization of debt discount was $209 million in the second quarter of 2025, compared with $197 million in the second quarter of 2024. Interest expense and amortization of debt discount was $425 million in the first six months of 2025, compared with $396 million in the first six months of 2024. The increase in interest expense is primarily due to increased issuances of commercial paper during the first six months of 2025. See Liquidity and Capital Resources in Management's Discussion and Analysis of Financial Condition and Results of Operations and Note 13 to the Consolidated Financial Statements for additional information.

Provision for Income Taxes

The Company's effective tax rate fluctuates based on, among other factors, where income is earned, the level of income relative to tax attributes and the level of equity earnings, since most earnings from the Company's equity method investments are taxed at the joint venture level. In the second quarter of 2025, the Company reported a provision for income taxes of $142 million, resulting in a negative effective tax rate of 21.5 percent and 22.2 percent for Dow Inc. and TDCC, respectively. In the second quarter of 2024, the Company reported a provision for income taxes of $150 million, resulting in an effective tax rate of 24.7 percent and 24.6 percent for Dow Inc. and TDCC, respectively. For the first six months of 2025, the Company reported a provision for income taxes of $58 million, resulting in a negative effective tax rate of 5.6 percent and 5.7 percent for Dow Inc. and TDCC, respectively. For the first six months of 2024, the Company reported a provision for income taxes of $61 million, resulting in an effective tax rate of 5.8 percent and 5.7 percent for Dow Inc. and TDCC, respectively.

The provision for income taxes for the three and six months ended June 30, 2025 was unfavorably impacted by the recording of valuation allowances in certain foreign jurisdictions of $242 million as well as losses attributable to jurisdictions for which no tax benefit can be recognized, and a tax credit of $89 million related to the sale of a portion of the Company's membership interest in its wholly owned subsidiary, Diamond Infrastructure Solutions, resulting in a negative effective tax rate for both periods. See Note 17 to the Consolidated Financial Statements for additional information related to the Diamond Infrastructure Solutions transaction. In the first quarter of 2024, the Company recorded a tax credit of $194 million related to a reassessment of interest and penalties on a tax matter in a foreign jurisdiction, resulting in a reduced effective tax rate for the first six months of 2024.

The Company continues to monitor and evaluate legislative developments related to the Global Anti-Base Erosion Proposal Regime ("GloBE") established by the Organization of Economic Cooperation and Development’s ("OECD") Pillar Two framework. Several countries in which the Company operates have adopted GloBE into their legislation and several others are expected to enact these rules in the future. To date, such legislation has not materially impacted the Company's effective tax rate.

On July 4, 2025, U.S. legislation formally titled "An Act to Provide for Reconciliation Pursuant to Title II of H. Con. Res. 14” (“The Act”) and commonly referred to as the One Big Beautiful Bill Act was signed into law. The Act, among other things, extended key provisions of the 2017 Tax Cuts and Jobs Act and introduced targeted changes to the U.S. federal income tax regime. The Company is currently evaluating the impact of The Act on its results of operations and will recognize the related tax impacts in the period of enactment.

Net Income Attributable to Noncontrolling Interests

Net income attributable to noncontrolling interests was $34 million in the second quarter of 2025, compared with $19 million in the second quarter of 2024. Net income attributable to noncontrolling interests was $51 million in the first six months of 2025, compared with $41 million for the first six months of 2024. The increase in net income attributable to noncontrolling interests was primarily driven by the sale of 40 percent of the membership interests of the Company's wholly owned subsidiary, Diamond Infrastructure Solutions, in the second quarter of 2025. See Notes 17 and 22 to the Consolidated Financial Statements for additional information.

Net Income (Loss) Available for Common Stockholder(s)

Dow Inc.

Net income (loss) available for Dow Inc. common stockholders was a loss of $835 million, or $1.18 per share, in the second quarter of 2025, compared with income of $439 million, or $0.62 per share, in the second quarter of 2024. Net income (loss) available for Dow Inc. common stockholders was a loss of $1,142 million, or $1.62 per share, in the first six months of 2025, compared with income of $955 million, or $1.35 per share, in the first six months of 2024. See Note 8 to the Consolidated Financial Statements for details on Dow Inc.'s earnings per share calculations.

TDCC

Net income (loss) available for the TDCC common stockholder was a loss of $816 million in the second quarter of 2025, compared with income of $441 million in the second quarter of 2024. Net income (loss) available for the TDCC common stockholder was a loss of $1,121 million in the first six months of 2025, compared with income of $962 million in the first six months of 2024. TDCC's common shares are owned solely by Dow Inc.

SEGMENT RESULTS

For further discussion of the Company's segments, see Part I, Item 1. Business of the combined Dow Inc. and TDCC Annual Report on Form 10-K for the fiscal year ended December 31, 2024 ("2024 10-K"), filed with the SEC on February 4, 2025.

Dow’s measure of profit/loss for segment reporting purposes is Operating EBIT as this is the manner in which the chief executive officer, chief operating officer, chief financial officer, general counsel and corporate secretary, and senior vice president of corporate development, together the "executive committee" and chief operating decision maker ("CODM"), assesses performance and allocates resources. The CODM compares quarterly results to both the year-ago and sequential periods to assess performance and allocate resources to each segment. The Company defines Operating EBIT as earnings (i.e., "Income (loss) before income taxes") before interest, excluding the impact of significant items. Operating EBIT by segment includes all operating items relating to the businesses; items that principally apply to Dow as a whole are assigned to Corporate. See Note 23 to the Consolidated Financial Statements for reconciliations of these measures.

PACKAGING & SPECIALTY PLASTICS

In millions

1. Portfolio & other includes the sales impact of the flexible packaging laminating adhesives business, which was sold to Arkema S.A. in the fourth quarter of 2024.

Packaging & Specialty Plastics net sales were $5,025 million in the second quarter of 2025, down 9 percent from net sales of $5,515 million in the second quarter of 2024, with local price down 10 percent, portfolio & other down 1 percent and both volume and currency up 1 percent. Local price decreased in Packaging and Specialty Plastics in all geographic regions, driven by lower pricing of polyethylene and functional polymers. Local price decreased in Hydrocarbons & Energy, driven by EMEAI and the U.S. & Canada and primarily in aromatics. Volume decreased in Packaging and Specialty Plastics, in all geographic regions except EMEAI, driven by lower volumes in functional polymers and a decrease in nonrecurring licensing sales, partially offset by higher polyethylene volumes. Volume increased in Hydrocarbons & Energy, primarily due to higher energy sales in the U.S. & Canada. Currency had a favorable impact on sales in both businesses and was primarily driven by EMEAI.

Operating EBIT was $71 million in the second quarter of 2025, down $632 million from Operating EBIT of $703 million in the second quarter of 2024. Operating EBIT decreased primarily due to lower integrated margins and equity earnings at the Company's non-principal, EQUATE and Thai joint ventures, which were partially offset by the impact of the Company's cost reduction initiatives and lower planned maintenance costs.

Packaging & Specialty Plastics net sales were $10,335 million in the first six months of 2025, down 6 percent from net sales of $10,945 million in the first six months of 2024, with local price down 7 percent, portfolio & other down 1 percent, and volume up 2 percent. Local price decreased in Packaging and Specialty Plastics in all geographic regions, primarily driven by lower pricing of polyethylene and functional polymers. Local price decreased in Hydrocarbons & Energy, driven by EMEAI and the U.S. & Canada and primarily in aromatics. Volume increased in Packaging and Specialty Plastics, with higher volumes in Asia Pacific and EMEAI partially offset by a decline in Latin America, driven by an increase in nonrecurring licensing sales partially offset by lower functional polymers volumes. Volume increased in Hydrocarbons & Energy, primarily due to higher energy sales in the U.S. & Canada.

Operating EBIT was $413 million in the first six months of 2025, down $895 million from Operating EBIT of $1,308 million in the first six months of 2024. Operating EBIT decreased primarily due to lower integrated margins, partially offset by lower planned maintenance costs.

INDUSTRIAL INTERMEDIATES & INFRASTRUCTURE

In millions

Industrial Intermediates & Infrastructure net sales were $2,786 million in the second quarter of 2025, down 6 percent from net sales of $2,951 million in the second quarter of 2024, with local price down 5 percent, volume down 2 percent and a favorable currency impact of 1 percent. Local price decreased in both businesses, led by declines in Asia Pacific and EMEAI and in consumer durables, industrial, and building and construction applications. Volume decreased in Polyurethanes & Construction Chemicals, primarily in EMEAI, and was driven by lower demand, particularly in industrial applications. Volume increased in Industrial Solutions, with higher volumes in the U.S. & Canada and EMEAI partially offset by a decline in Asia Pacific, and was primarily driven by increased demand for energy applications. Currency had a favorable impact on sales in both businesses and was driven by EMEAI and Asia Pacific.

Operating EBIT was a loss of $185 million in the second quarter of 2025, down $192 million from Operating EBIT of $7 million in the second quarter of 2024. Operating EBIT decreased primarily driven by lower selling prices in both businesses and higher planned maintenance activity, partially offset by the impact of the Company's cost reduction initiatives.

Industrial Intermediates & Infrastructure net sales were $5,641 million in the first six months of 2025, down 5 percent from net sales of $5,959 million in the first six months of 2024, with local price down 4 percent and volume down 1 percent. Local price decreased in both businesses and across all geographic regions, led by industrial, consumer durables and building and construction applications. Volume decreased in Polyurethanes & Construction Chemicals, driven by declines in EMEAI and Latin America, primarily in industrial, mobility and consumer durables applications. Volume increased in Industrial Solutions, with higher volumes in the U.S. & Canada and EMEAI primarily in energy and industrial applications..

Operating EBIT was a loss of $313 million in the first six months of 2025, down $407 million from Operating EBIT of $94 million in the first six months of 2024. Operating EBIT decreased primarily due to margin compression, higher planned maintenance activity and lower results at the EQUATE and Sadara joint ventures.

PERFORMANCE MATERIALS & COATINGS

In millions

Performance Materials & Coatings net sales were $2,129 million in the second quarter of 2025, down 5 percent from net sales of $2,243 million in the second quarter of 2024, with local price and volume both down 3 percent and a favorable currency impact of 1 percent. Consumer Solutions local price decreased across all geographic regions, led by consumer and electronics and building and infrastructure applications. Local price decreased in Coatings & Performance Monomers in all geographic regions, led by acrylic monomers. Volume decreased in Consumer Solutions, driven by EMEAI and Asia Pacific. Volume declined in upstream siloxanes, partially offset by gains in downstream silicones, led by consumer and electronics applications. Volume decreased in Coatings & Performance Monomers in all geographic regions, primarily driven by lower demand for coatings applications, as building and construction end-markets continue to be challenged. The favorable currency impact was driven by EMEAI and Asia Pacific in both businesses.

Operating EBIT was $152 million in the second quarter of 2025, up $6 million from Operating EBIT of $146 million in the second quarter of 2024. Operating EBIT increased primarily due to margin expansion from lower input costs and the impact of the Company's cost reduction initiatives, partially offset by lower volumes in both businesses.

Performance Materials & Coatings net sales were $4,200 million in the first six months of 2025 compared with net sales of $4,395 million in the first six months of 2024, with local price and volume both down 2 percent. Consumer Solutions local price decreased across all geographic regions and was broad-based across end-markets. Local price decreased in Coatings & Performance Monomers in all geographic regions, primarily in acrylic monomers and architectural coatings. Volume decreased in Consumer Solutions with declines in EMEAI and Asia Pacific, while the U.S. & Canada and Latin America were flat. Volume decreased in upstream siloxanes, partially offset by an increase in downstream silicones, led by consumer and electronics applications. Volume decreased in Coatings & Performance Monomers in all geographic region except the U.S. & Canada, driven by lower demand for acrylic monomers and architectural coatings.

Operating EBIT was $201 million in the first six months of 2025, up $14 million from Operating EBIT of $187 million in the first six months of 2024. Operating EBIT increased primarily due to lower selling, general and administrative and research and development expenses and lower planned maintenance costs, partially offset by margin compression in both businesses and lower equity earnings.

CORPORATE

In millions

Net sales for Corporate, which primarily relate to the Company's insurance operations, were $164 million in the second quarter of 2025, a decrease from net sales of $206 million in the second quarter of 2024. Net sales were $359 million in the first six months of 2025, a decrease from net sales of $381 million in the first six months of 2024.

Operating EBIT was a loss of $59 million in the second quarter of 2025, compared with a loss of $37 million in the second quarter of 2024. Operating EBIT decreased primarily due to lower income from insurance operations. Operating EBIT was a loss of $92 million in the first six months of 2025, compared with a loss of $96 million in the first six months of 2024. Operating EBIT improved primarily due to lower environmental costs.

CHANGES IN FINANCIAL CONDITION

The Company had cash and cash equivalents of $2,399 million at June 30, 2025 and $2,189 million at December 31, 2024, of which $1,344 million at June 30, 2025 and $1,427 million at December 31, 2024 was held by subsidiaries in foreign countries, including U.S. territories. For each of its foreign subsidiaries, Dow makes an assertion regarding the amount of earnings intended for permanent reinvestment, with the balance available to be repatriated to the United States.

Cash held by foreign subsidiaries for permanent reinvestment is generally used to finance the subsidiaries' operational activities and future foreign investments. Dow has the ability to repatriate additional funds to the United States, which could result in an adjustment to the tax liability for foreign withholding taxes, foreign and/or U.S. state income taxes and the impact of foreign currency movements. At June 30, 2025, management believed that sufficient liquidity was available in the United States. The Company has and expects to continue repatriating certain funds from its non‑U.S. subsidiaries that are not needed to finance local operations; however, these particular repatriation activities have not and are not expected to result in a significant incremental tax liability to the Company.

The Company's cash flows from operating, investing and financing activities, as reflected in the consolidated statements of cash flows, are summarized in the following table:

In millions

Cash Flows from Operating Activities

Cash used for operating activities from continuing operations in the first six months of 2025 was primarily driven by cash used for working capital and performance-based compensation, which were partly offset by the Company's cash earnings and dividends from equity method investments. Cash provided by operating activities from continuing operations in the first six months of 2024 was primarily driven by the Company's cash earnings and dividends from equity method investments, which were partially offset by cash used for working capital and performance-based compensation payments.

In millions

Cash provided by operating activities from discontinued operations in the first six months of 2025 and 2024 reflected cash payments and receipts for certain agreements and matters related to the separation from DowDuPont Inc. ("DowDuPont").

Cash Flows from Investing Activities

Cash used for investing activities in the first six months of 2025 and 2024 was primarily for capital expenditures and purchases of investments, which were partially offset by proceeds from sales and maturities of investments. The first six months of 2025 also included a cash inflow related to the sale of the soil fumigation product line and certain related assets.

The Company's capital expenditures were $1,347 million in the first six months of 2025, compared with $1,437 million in the first six months of 2024. The Company has reduced its expected full year capital spending to approximately $2.5 billion. The primary driver for the decrease is the Company’s decision to delay construction of the Fort Saskatchewan Path2Zero project until market conditions improve. As evidenced across this and prior economic cycles, the Company will proactively adjust its spending as economic conditions evolve.

Cash Flows from Financing Activities

Cash provided by financing activities in the first six months of 2025 was primarily related to proceeds from the sale of a minority stake in the Company's consolidated infrastructure entity and proceeds from the issuance of long-term debt, which were partially offset by payments on long-term debt. In addition, Dow Inc. included cash outflows for dividends paid to stockholders and TDCC included cash outflows for dividends paid to Dow Inc. Cash used for financing activities in the first six months of 2024 for Dow Inc. was primarily related to dividends paid to stockholders, purchases of treasury stock and payments on long-term debt, which were partially offset by proceeds from issuance of long-term debt. Cash used for financing activities in the first six months of 2024 for TDCC was primarily related to dividends paid to Dow Inc. and payments on long-term debt, which were partially offset by proceeds from issuance of long-term debt.

Dow Inc. Non-GAAP Cash Flow Measures

Free Cash Flow

Dow defines Free Cash Flow as "Cash provided by (used for) operating activities - continuing operations," less capital expenditures. Under this definition, Free Cash Flow represents the cash generated by Dow from operations after investing in its asset base. Free Cash Flow, combined with cash balances and other sources of liquidity, represents the cash available to fund obligations and provide returns to shareholders. Free Cash Flow is an integral financial measure used in the Company's financial planning process.

Operating EBITDA

Dow defines Operating EBITDA as earnings (i.e., "Income (loss) before income taxes") before interest, depreciation and amortization, excluding the impact of significant items.

Cash Flow Conversion (Cash Flow from Operations to Operating EBITDA)

Dow defines Cash Flow Conversion (Cash Flow from Operations to Operating EBITDA) as "Cash provided by (used for) operating activities - continuing operations," divided by Operating EBITDA. Management believes Cash Flow Conversion is an important financial metric as it helps the Company determine how efficiently it is converting its earnings into cash flow.

These financial measures are not recognized in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and should not be viewed as alternatives to GAAP financial measures of performance. All companies do not calculate non-GAAP financial measures in the same manner and, accordingly, Dow's definitions may not be consistent with the methodologies used by other companies.

In millions

In millions

1. The six months ended June 30, 2025 includes: severance and related benefit costs and impairment charges related to the 2025 Restructuring Program; implementation costs associated with the Company's 2025 Restructuring Program and the sale of membership interests of the Company's wholly owned subsidiary, Diamond Infrastructure Solutions; a gain on the sale of the soil fumigation product line; a gain associated with the reassessment of liabilities for certain accrued Groundwater Matters, partially offset by the settlement of a separate claim related to Groundwater Matters; charges associated with agreements entered into with DuPont and Corteva as part of the separation and distribution; charges related to an arbitration agreement for historical product claims from a divested business; a loss on early extinguishment of debt; restructuring charges and implementation and efficiency costs associated with the Company's 2023 Restructuring Program. The six months ended June 30, 2024 includes restructuring charges and implementation and efficiency costs associated with the Company's 2023 Restructuring Program and impairment charges related to write-downs of certain manufacturing assets. See Note 23 to the Consolidated Financial Statements for additional information.

2. Cash flow from operations to net income is not applicable for the six months ended June 30, 2025 due to a net loss for the period.

Liquidity & Financial Flexibility

The Company’s primary source of incremental liquidity is cash flows from operating activities. The generation of cash from operations over the economic cycle and the Company's ability to access capital markets is expected to meet the Company’s cash requirements for working capital, capital expenditures, debt maturities, contributions to pension plans, dividend distributions to stockholders, share repurchases and other needs. In addition to cash from operating activities, the Company’s current liquidity sources also include TDCC's U.S. and Euromarket commercial paper programs, committed and uncommitted credit facilities, committed accounts receivable facilities, a medium-term notes program, a U.S. retail note program (“InterNotes®”) and other debt markets.

The Company continues to maintain a strong financial position with all of its committed credit facilities undrawn and fully available at June 30, 2025. Cash and committed and available forms of liquidity were $12.3 billion at June 30, 2025. The Company also has no substantive long-term debt maturities due until 2027. As a well-known seasoned issuer, the Company may issue debt at any time as an additional source of liquidity. Additional details on sources of liquidity are as follows:

Commercial Paper

TDCC issues promissory notes under its U.S. and Euromarket commercial paper programs. TDCC had no commercial paper outstanding at June 30, 2025. TDCC maintains access to the commercial paper market at competitive rates. Amounts outstanding under TDCC's commercial paper programs during the period may be greater or less than the amount reported at the end of the period. Subsequent to June 30, 2025, TDCC issued commercial paper and had approximately $2 billion of commercial paper outstanding at July 25, 2025.

Committed Credit Facilities

The Company also has the ability to access liquidity through TDCC's committed and available credit facilities. At June 30, 2025, TDCC had total committed and available credit facilities of $8.4 billion.

Uncommitted Credit Facilities

The Company has entered into various uncommitted bilateral credit arrangements as a potential source of excess liquidity. These lines can be used to support short-term liquidity needs and for general purposes. The Company had no drawdowns outstanding at June 30, 2025.

Accounts Receivable Securitization Facilities

In addition to the above credit facilities, the Company maintains a committed accounts receivable facility in the United States where eligible trade accounts receivable, up to $900 million, may be sold at any point in time. The Company also maintains a committed accounts receivable facility in Europe where eligible trade accounts receivable, up to €500 million, may be sold at any point in time. These facilities are set to expire in November 2025. In the first six months of 2025, there were $106 million in sales of receivables under the U.S. and Europe committed accounts receivable facilities ($264 million in sales of receivables in the first six months of 2024). At June 30, 2025, approximately $9 million of sold receivables were outstanding.

In addition, the Company has an uncommitted accounts receivable facility in the United States providing additional liquidity. This facility is set to expire in November 2025. Sales of receivables under this facility were $147 million in the first six months of 2025 ($378 million in sales of receivables in the first six months of 2024). At June 30, 2025, approximately $13 million of sold receivables were outstanding. See Note 12 to the Consolidated Financial Statements for additional information.

Early Settlement of Letters of Credit

The Company utilizes, from time-to-time, letters of credit discounting programs to manage and expedite the settlement of letters of credit in certain regions. These letters of credit are associated with accounts receivable and the Company retains no interest in the transferred letters of credit or receivables once sold.

Accounts Receivable Discounting Facilities

The Company has access to accounts receivable discounting facilities, under which receivables are transferred with limited recourse. The Company retains no interest in the transferred receivables once sold. Sales of receivables under this facility were $285 million in the first six months of 2025 ($408 million sales of receivables in the first six months of 2024). At June 30, 2025, approximately $12 million of sold receivables were outstanding. See Note 12 to the Consolidated Financial Statements for additional information.

The Company maintains these facilities and also participates in certain customers’ supply chain financing and other early pay programs as a routine source of working capital.

Company-Owned Life Insurance

The Company has investments in company-owned life insurance ("COLI") policies, which are recorded at their cash surrender value as of each balance sheet date. The Company has the ability to monetize its investment in its COLI policies as an additional source of liquidity. At June 30, 2025, the Company had monetized $200 million of its existing COLI policies' surrender value (zero at December 31, 2024). See Note 6 to the Consolidated Financial Statements for additional information.

Shelf Registration - U.S.

On June 13, 2025, Dow Inc. and TDCC filed a shelf registration statement with the U.S. Securities and Exchange Commission. The shelf indicates that Dow Inc. may offer common stock; preferred stock; depositary shares; debt securities; guarantees; warrants to purchase common stock, preferred stock and debt securities; and stock purchase contracts and stock purchase units, with pricing and availability of any such offerings depending on market conditions. The shelf also indicates that TDCC may offer debt securities, guarantees and warrants to purchase debt securities, with pricing and availability of any such offerings depending on market conditions. In the third quarter of 2025, TDCC intends to file a prospectus supplement under this shelf registration to register an undetermined amount of securities for issuance under InterNotes®. Also, in the third quarter of 2025, TDCC intends to file a prospectus supplement under this shelf registration to register an undetermined amount of securities for issuance under a medium-term notes program.

Debt

As the Company continues to maintain its strong balance sheet and financial flexibility, management is focused on net debt (a non-GAAP financial measure), as the Company believes this is the best representation of its financial leverage at this point in time. As shown in the following table, net debt is equal to total gross debt minus "Cash and cash equivalents" and "Marketable securities."

In millions

1. Included in "Other current assets" in the consolidated balance sheets.

The Company may at any time repurchase certain debt securities in the open market or in privately negotiated transactions subject to: the applicable terms under which any such debt securities were issued, certain internal approvals of the Company, and applicable laws and regulations of the relevant jurisdiction in which any such potential transactions might take place. This in no way obligates the Company to make any such repurchases nor should it be considered an offer to do so.

TDCC's public debt instruments and primary, private credit agreements contain, among other provisions, certain customary restrictive covenant and default provisions. TDCC's most significant debt covenant with regard to its financial position is the obligation to maintain the ratio of its consolidated indebtedness to consolidated capitalization at no greater than 0.70 to 1.00 at any time the aggregate outstanding amount of loans under the Five Year Competitive Advance and Revolving Credit Facility Agreement ("Revolving Credit Agreement") equals or exceeds $500 million. The ratio of TDCC's consolidated indebtedness to consolidated capitalization as defined in the Revolving Credit Agreement was 0.45 to 1.00 at June 30, 2025. Management believes TDCC was in compliance with all of its covenants and default provisions at June 30, 2025. For information on TDCC's debt covenants and default provisions, see Note 14 to the Consolidated Financial Statements included in the 2024 10-K. There were no material changes to the debt covenants and default provisions related to TDCC’s outstanding long-term debt and primary, private credit agreements in the first six months of 2025.

In the first quarter of 2025, the Company completed debt neutral liability management activities. The Company issued $1 billion of senior unsecured notes. The offering included $400 million aggregate principal amount of 5.35 percent notes due 2035 and $600 million aggregate principal amount of 5.95 percent notes due 2055. The Company used the proceeds to complete cash tender offers for certain debt securities. In total, $943 million aggregate principal amount was tendered and retired. As a result, the Company recognized a pretax loss of $60 million on the early extinguishment of debt, included in "Sundry income (expense) - net" in the consolidated statements of income, related to Corporate.

In the first six months of 2025, the Company issued an aggregate principal amount of $107 million of InterNotes®. Additionally, the Company repaid $125 million of long-term debt at maturity.

While taking into consideration the current economic environment, management expects that the Company will continue to have sufficient liquidity and financial flexibility to meet all of its business obligations.

Credit Ratings

At June 30, 2025, TDCC's credit ratings were as follows:

On February 21, 2025, Standard & Poor's affirmed TDCC's BBB and A-2 rating, and revised its outlook to negative from stable. Standard & Poor's decision was made as part of their annual review process and reflects the Company's supportive financial policies, scale, liquidity and cost-advantaged footprint. On July 7, 2025, Moody's Ratings announced a long-term credit rating change for TDCC from Baa1 to Baa2 and affirmed TDCC's P-2 rating and its outlook of negative. Moody's Ratings decision was made to reflect the impact of current market conditions on the Company's earnings, including the impact of global trade policy uncertainty and capacity additions in the industry, while recognizing the Company's strong asset base, strategic cost actions and long-term commitment to maintaining investment-grade quality.

Dividends

Dow Inc.

Dow Inc. has paid dividends on a quarterly basis since the separation from DowDuPont and expects to continue to do so, subject to approval by the Board. On July 24, 2025, the Company announced a 50 percent reduction to its dividend declared for the third quarter of 2025. The following table summarizes dividends declared and paid to common stockholders of record in 2025:

Dow Inc. Dividends Declared and Paid

TDCC

TDCC has committed to fund Dow Inc.'s dividends paid to common stockholders and share repurchases, as approved by the Board, as well as certain governance expenses. Funding is accomplished through intercompany loans. TDCC's Board reviews and determines a dividend distribution to Dow Inc. to settle the intercompany loans. For the three months ended June 30, 2025, TDCC declared and paid a dividend of $470 million to Dow Inc. ($985 million for the six months ended June 30, 2025). At June 30, 2025, TDCC's intercompany loan balance with Dow Inc. was insignificant.

Share Repurchase Program

On April 13, 2022, the Board approved a share repurchase program authorizing up to $3 billion for the repurchase of the Company's common stock, with no expiration date. The Company did not repurchase any of its common stock in the second quarter of 2025 (zero in the first six months of 2025). At June 30, 2025, approximately $931 million of the share repurchase program authorization remained available for repurchases. As previously announced, the Company intends to repurchase shares at a minimum to cover dilution over the economic cycle. The Company may from time to time expand its share repurchases beyond dilution, based on a number of factors including macroeconomic conditions, free cash flow generation, and the Dow share price. Any share repurchases, when coupled with the Company's dividends, are intended to implement the long-term strategy of targeting shareholder remuneration of approximately 65 percent of Operating Net Income over the economic cycle.

Pension Plans

The Company has both funded and unfunded defined benefit pension plans that cover employees in the United States and a number of other countries. The Company's funding policy is to contribute to funded plans when pension laws and/or economics either require or encourage funding.

As part of its ongoing pension de-risking initiatives, the Company initiated the termination of certain U.S. tax-qualified pension plans which include the tax-qualified benefit obligations for substantially all employees hired after January 1, 2008, who earned benefits based on a set percentage of annual pay, plus interest. As part of the plan termination process, the Company will offer participants of these plans annuity or lump sum distribution options. Final asset distributions are expected to be paid from plan assets in the fourth quarter of 2025. The Company anticipates that these asset distributions will result in pension settlement charges, with the amounts dependent on various factors, including interest rates, plan asset returns, annuity pricing and participant distribution elections.

See Note 18 to the Consolidated Financial Statements and Note 19 to the Consolidated Financial Statements included in the 2024 10-K for additional information related to the Company's pension plans.

Restructuring

The 2025 Restructuring Program is expected to result in additional cash expenditures of $700 million primarily over the next four years and consist primarily of severance and related benefits costs, implementation costs related to decommissioning and demolition and additional costs associated with exit and disposal activities. Restructuring implementation costs totaled $5 million for the three and six months ended June 30, 2025.

Restructuring implementation and efficiency costs related to the 2023 Restructuring Program were zero and $50 million for the three and six months ended June 30, 2025, respectively ($56 million and $102 million for the three and six months ended June 30, 2024, respectively).

The Company expects to incur additional costs in the future related to its restructuring activities, which will be recognized as incurred. The Company also expects to incur additional employee-related costs, including involuntary termination benefits related to its other optimization activities. These costs cannot be reasonably estimated at this time. See Note 5 to the Consolidated Financial Statements for additional information on the Company's restructuring activities.

Contractual Obligations

Information related to the Company’s contractual obligations, commercial commitments and expected cash requirements for interest can be found in Notes 14, 15, 16 and 19 to the Consolidated Financial Statements included in the 2024 10-K. With the exception of the items noted below, there have been no material changes in the Company’s contractual obligations since December 31, 2024.

In millions

1. Cash requirements for interest on long-term debt was calculated using current interest rates at June 30, 2025, and includes $130 million of various floating rate notes.

2. Includes outstanding purchase orders and other commitments greater than $1 million obtained through a survey conducted within the Company. The increase from December 31, 2024 was primarily due to supply agreements related to the Company's Fort Saskatchewan Path2Zero project and contract term extensions.

Fair Value Measurements

See Note 21 to the Consolidated Financial Statements for information concerning fair value measurements.

OTHER MATTERS

Critical Accounting Estimates

The preparation of financial statements and related disclosures in accordance with accounting principles generally accepted in the United States of America requires management to make judgments, assumptions and estimates that affect the amounts reported in the consolidated financial statements and accompanying notes. Note 1 to the Consolidated Financial Statements included in the 2024 10-K describes the significant accounting policies and methods used in the preparation of the consolidated financial statements. The Company’s critical accounting policies that are impacted by judgments, assumptions and estimates are described in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the 2024 10-K. Since December 31, 2024, there have been no material changes in the Company’s accounting policies that are impacted by judgments, assumptions and estimates.

2025 Goodwill Impairment Testing

In the second quarter of 2025, the Board approved actions to shut down certain upstream manufacturing assets. As a result of the announced actions, the Company identified potential indicators of goodwill impairment and evaluated whether the fair value of any reporting unit may be less than its carrying amount. The Company identified one reporting unit for which a quantitative interim goodwill impairment test was required. The results of the quantitative impairment test concluded that no goodwill impairment existed, as the fair value exceeded the carrying value of the reporting unit. Management will continue to monitor macroeconomic conditions and industry-specific developments that may impact the Company’s financial performance and the recoverability of goodwill. For additional information, see Notes 5 and 11 to the Consolidated Financial Statements.

Asbestos-Related Matters of Union Carbide Corporation

Union Carbide is and has been involved in a large number of asbestos-related suits filed primarily in state courts during the past several decades. These suits principally allege personal injury resulting from exposure to asbestos‑containing products and frequently seek both actual and punitive damages. The alleged claims primarily relate to products that Union Carbide sold in the past, alleged exposure to asbestos-containing products located on Union Carbide’s premises, and Union Carbide’s responsibility for asbestos suits filed against a former Union Carbide subsidiary, Amchem Products, Inc. (“Amchem”). In many cases, plaintiffs are unable to demonstrate that they have suffered any compensable loss as a result of such exposure, or that injuries incurred in fact resulted from exposure to Union Carbide’s products.

The table below provides information regarding asbestos-related claims pending against Union Carbide and Amchem based on criteria developed by Union Carbide and its external consultants:

Plaintiffs’ lawyers often sue numerous defendants in individual lawsuits or on behalf of numerous claimants. As a result, the damages alleged are not expressly identified as to Union Carbide, Amchem or any other particular defendant, even when specific damages are alleged with respect to a specific disease or injury. For these reasons and based upon Union Carbide’s litigation and settlement experience, Union Carbide does not consider the damages alleged against Union Carbide and Amchem to be a meaningful factor in its determination of any potential asbestos-related liability.

For additional information, see Asbestos-Related Matters of Union Carbide Corporation in Note 14 to the Consolidated Financial Statements; Part II, Item 1. Legal Proceedings; and Note 15 to the Consolidated Financial Statements included in the 2024 10-K.

See Note 20 to the Consolidated Financial Statements and Part II, Item 7A. Quantitative and Qualitative Disclosures About Market Risk in the combined Dow Inc. and TDCC Annual Report on Form 10-K for the year ended December 31, 2024, for information on the Company's utilization of financial instruments and an analysis of the sensitivity of these instruments.

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this Quarterly Report on Form 10-Q, Dow Inc. and The Dow Chemical Company (the "Companies") carried out an evaluation, under the supervision and with the participation of the Companies' Disclosure Committee and the Companies' management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of the Companies' disclosure controls and procedures pursuant to paragraph (b) of Exchange Act Rules 13a-15 and 15d-15. Based upon that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that the Companies' disclosure controls and procedures were effective.

Changes in Internal Control Over Financial Reporting

There were no changes in the Companies' internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 and 15d-15 that was conducted during the quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, the Companies' internal control over financial reporting.

Dow Inc. and Subsidiaries The Dow Chemical Company and Subsidiaries PART II – OTHER INFORMATION

Since December 31, 2024, there have been no material changes to the Company's Risk Factors, except as noted below, which was updated in the first and second quarters of 2025:

Global Economic Considerations: The Company operates in a global, competitive environment which gives rise to operating and market risk exposure.

The Company sells its broad range of products and services in a competitive, global environment, and competes worldwide for sales on the basis of product quality, price, technology and customer service. Increased levels of competition could result in lower prices or lower sales volume, which could have a negative impact on the Company’s results of operations. Sales of the Company's products are also subject to extensive federal, state, local and foreign laws and regulations; trade agreements; import and export controls; taxes; and duties and tariffs. The imposition of additional regulations, controls, taxes, duties and tariffs or changes to bilateral and regional trade agreements could result in lower sales volume, which could negatively impact the Company’s results of operations.

In early 2025, the United States made significant changes to its long-standing trade policies and announced significant new tariffs on virtually all imported goods, with the exception of certain goods that are compliant with the United States-Mexico-Canada Agreement, a trade agreement which became effective in 2020. The United States subsequently announced a reduction of the new tariffs, with certain exceptions, as it negotiates trade agreements. However, the resulting average U.S. tariff rate rose to the highest level since the 1930s. In July 2025, the United States announced it will impose higher tariff rates, effective August 1, 2025, on imports from certain specified trading partners where trade negotiations have not satisfactorily progressed. In response to these actions, certain U.S. trading partners imposed or are publicly considering retaliatory tariffs on U.S. imports. Shifts in tariffs, import/export restrictions, trade sanctions, sector specific trade barriers, and other governmental trade actions, whether enacted by the United States or other countries, and the associated uncertainty of long-term trade policies, could impact the Company's sales volume, sales price, and production and other costs. Changes in trade policies may also cause disruptions to material sourcing and availability, global supply chains and logistics and access to end markets. Additionally, changes in U.S. trade policy may create shifts in global market dynamics, disrupt the long-term planning process for governments and private enterprises and result in continued global financial market volatility. The impact of these changes in trade policies and the resulting trade and market uncertainty could have a negative impact on the Company’s results of operations.

Economic conditions around the world, and in certain industries and geographic regions in which the Company does business, also impact sales price and volume and the efficacy of the Company's supply chain. For example, long-term market uncertainty, an economic downturn driven by trade policies and inflationary pressures, and higher input costs have reduced demand for the Company's products, resulting in decreased sales price and volume in recent years which have yet to recover. Adverse economic conditions have also caused supply chain constraints. These factors have had a negative impact on the Company's results of operations. Additionally, political tensions; war, including the ongoing conflicts in the Middle East and between Russia and Ukraine with the related sanctions and export restrictions; terrorism; epidemics; pandemics; or political instability in the geographic regions or industries in which the Company sells its products could further reduce demand for the Company's products and result in decreased sales price and volume or supply chain disruptions, which could have a negative impact on the Company’s results of operations.

The United States, Canada, the European Union and other countries imposed economic sanctions on Russia in response to its February 2022 invasion of Ukraine. As a result, Dow suspended purchases of feedstocks and energy from Russia and stopped all investments in Russia. Additionally, Dow reduced its product offerings and is currently supplying Russia with only limited non-sanctioned goods. These actions have not had and are not expected to have a material impact on the Company's financial condition or results of operations. However, the fluidity and continuation of the conflict may result in additional economic sanctions and other impacts which could have a negative impact on the Company’s financial condition, results of operations and cash flows. These include decreased sales; supply chain and logistics disruptions; volatility in foreign exchange rates and interest rates; inflationary pressures on and availability of raw materials and energy, most notably in Europe; and heightened cybersecurity threats. Further, the intensity and duration of conflicts in the Middle East and potential expansion of hostilities in the region are difficult to predict and could disrupt the Company's supply chain operations, which could have a negative impact on the Company's results of operations.

In addition, volatility and disruption of financial markets could limit the ability of Dow's customers and suppliers to obtain adequate financing to maintain operations, which could result in a decrease in sales volume and have a negative impact on the Company’s results of operations. The Company’s global business operations also give rise to market risk exposure related to changes in inflation, foreign currency exchange rates, including the impact of foreign currency exchange rates resulting from highly inflationary economies such as Argentina, interest rates, commodity prices and other market factors such as equity prices. To manage such risks, the Company enters into hedging and other investment transactions, where deemed appropriate, pursuant to established guidelines and policies. If the Company fails to effectively manage such risks, it could have a negative impact on its results of operations.