What changed in this filing

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Item 1A. Risk Factors

2025-02-04 compared with 2024-01-31 · 56 added, 52 removed, 147 unchanged (42% of the section changed)

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These risks and uncertainties may also directly or indirectly impact decisions to invest in the construction and/or renovation of new or existing manufacturing sites and other Company facilities and locations.

The transition to lower greenhouse gas emissions technology, the effects of carbon pricing and changes in public sentiment, regulations, taxes, public mandates or requirements and increases in climate-related lawsuits, insurance premiums and implementation of more robust disaster recovery and business continuity plans could increase costs to maintain or resume the Company’s operations or achieve its sustainability commitments in the expected timeframes, which would negatively impact the Company’s results of operations.

In 2020, the Company announced commitments to reduce its net annual Scope 1 and 2 CO 2 e emissions by an additional 5 million metric tons, or 15 percent compared with its 2020 baseline, by 2030 (the 2020 baseline represents a 15 percent reduction in greenhouse gas emissions since 2005) and its intention to be carbon neutral by 2050 (Scope 1+2+3, as defined by the Greenhouse Gas Protocol Corporate Accounting and Reporting Standard, plus product benefits).

The transition to lower greenhouse gas emissions technology, the effects of carbon pricing and changes in public sentiment, incentives, regulations, taxes, public mandates or requirements and increases in climate-related lawsuits, insurance premiums and implementation of more robust disaster recovery and business continuity plans could increase costs to maintain or resume the Company’s operations or achieve its sustainability commitments in the expected timeframes, which would negatively impact the Company’s results of operations.

In 2020, the Company announced commitments to reduce its net annual Scope 1 and 2 carbon dioxide equivalent ("CO 2 e") emissions by an additional 5 million metric tons, approximately a 15 percent reduction compared with its 2020 baseline, by 2030 (the 2020 baseline represents a 15 percent reduction in greenhouse gas emissions since 2005) and its intention to be carbon neutral by 2050 (Scope 1+2+3, as defined by the Greenhouse Gas Protocol Corporate Accounting and Reporting Standard, plus product benefits).

In November 2023, the Board approved the final investment decision to build the world's first net-zero Scope 1 and 2 CO 2 e emissions integrated ethylene cracker and derivatives facility in Alberta, Canada, a key element for the Company to achieve its 2030 greenhouse gas emissions reduction commitment.

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adapting products to customer preferences and customer acceptance of sustainable supply chain solutions;

changes in public sentiment and political leadership;

changes in public sentiment and political leadership, including government incentives and tax credits to promote emission reductions;

and the Company’s ability to comply with changing regulations, taxes, mandates or requirements related to greenhouse gas emissions or other climate-related matters, including prescriptive reporting of climate-related matters.

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Given the focus on sustainable investing, if the Company fails to meet its climate change commitments within the committed timeframe, coupled with its significant investments to meet those commitments, and adopt policies and practices to enhance sustainability, the Company’s reputation and its customer and other stakeholder relationships could be negatively impacted, reducing demand for the Company's products, and it may be more difficult for the Company to compete effectively or gain access to financing on acceptable terms when needed, which could negatively impact the Company’s financial condition, results of operations and cash flows.

PANDEMIC - RELATED RISKS

Public Health Crisis:

A public health crisis or global outbreak of disease could have a negative effect on the Company's manufacturing operations, supply chain and workforce, creating business disruptions that could have a substantial negative impact on the Company’s results of operations, financial condition and cash flows.

A public health crisis, including a pandemic similar in nature to coronavirus disease 2019, could impact all geographic regions where Dow products are produced and sold.

mask and vaccination mandates, restrictions on large gatherings and restricted access to certain corporate facilities and manufacturing sites.

Business disruptions and market volatility resulting from a public health crisis could have a substantial negative impact on the Company’s results of operations, financial condition and cash flows.

The adverse impact of a pandemic could include, and in the past has included, without limitation, fluctuations in the Company’s stock price due to market volatility;

a decrease in demand for certain Company products;

price declines;

reduced profitability;

supply chain disruptions impeding the Company’s ability to ship and/or receive product;

temporary idling or permanent closure of select manufacturing facilities and/or manufacturing assets;

asset impairment charges;

interruptions or limitations to manufacturing operations imposed by local, state or federal governments;

reduced market liquidity and increased borrowing costs;

workforce absenteeism and distraction;

labor shortages;

customer credit concerns;

increased cybersecurity risk and data accessibility disruptions due to remote working arrangements;

workforce reductions and fluctuations in foreign currency markets.

Additional risks may include, but are not limited to:

shortages of key raw materials;

potential impairment in the carrying value of goodwill;

additional asset impairment charges;

increased obligations related to the Company’s pension and other postretirement benefit plans;

and tax valuation allowance;

and may also have the effect of heightening many of the other risks described in this "Risk Factors" section.

MACROECONOMIC RISKS

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Market conditions could reduce the Company's flexibility to respond to changing business conditions or fund capital needs.

Adverse economic conditions, such as high interest rates, could reduce the Company’s flexibility to respond to changing business and economic conditions or to fund capital expenditures or working capital needs.

The economic environment could result in a contraction in the availability of credit in the marketplace and reduce sources of liquidity for the Company.

Adverse economic conditions, such as fluctuating interest rates, could reduce the Company’s flexibility to respond to changing business and economic conditions or to fund capital expenditures or working capital needs.

environment could result in a contraction in the availability of credit in the marketplace and reduce sources of liquidity for the Company.

This could result in higher borrowing costs.

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The imposition of additional regulations, controls, taxes and 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.

Economic conditions around the world, and in certain industries in which the Company does business, also impact sales price and volume and affect the efficacy of the Company's supply chain.

For example, market uncertainty and an economic downturn driven by inflationary pressures have recently reduced demand for the Company's products, resulting in decreased sales volume.

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 affect the efficacy of the Company's supply chain.

For example, market uncertainty and an economic downturn driven by inflationary pressures, higher input costs and margin compression have reduced demand for the Company's products, resulting in decreased sales volume in recent years which has yet to fully recover.

Adverse economic conditions also caused supply chain constraints.

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In February 2022, Russia invaded Ukraine resulting in the United States, Canada, the European Union and other countries imposing economic sanctions on Russia.

Dow suspended purchases of feedstocks and energy from Russia and has significantly reduced its operations and product offerings in the country.

Dow has also stopped all investments in Russia and is only supplying limited essential goods to Russia.

Dow suspended purchases of feedstocks and energy from Russia.

Investments in and flow of Dow's materials into Russia have been stopped.

These actions have not had and are not expected to have a material impact on the Company's financial condition or results of operations.

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Further, the intensity and duration of the conflict in the Middle East and potential expansion of the 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 customers’ ability 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.

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.

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and foreign issuers and alternative investments, including investments in real estate, private equity and absolute return strategies.

Changes in the market value of plan assets, investment returns, discount rates, mortality rates and regulations may affect the funded status of the Company's plans and could cause volatility in the net periodic benefit cost, future funding requirements of the plans and the funded status of the plans.

A significant increase in the Company's obligations or future funding requirements could have a negative impact on the Company's results of operations and cash flows for a particular period and on the Company's financial condition.

A significant increase in the Company's obligations or future funding requirements could

have a negative impact on the Company's results of operations and cash flows for a particular period and on the Company's financial condition.

Supply/Demand Balance:

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Moreover, changes in environmental regulations could inhibit or interrupt the Company’s operations, or require modifications to its facilities.

Further, additional environmental disclosure obligations require and may continue to require the Company to implement new practices and reporting processes, and have created and will continue to create additional compliance risk.

Accordingly, environmental, health or safety regulatory matters could result in significant unanticipated costs or liabilities.

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Concerns regarding the safe use of chemicals and plastics in commerce and their potential impact on health and the environment reflect a growing trend in societal demands for increasing levels of product safety and environmental protection.

These concerns could manifest themselves in stockholder proposals, preferred purchasing, delays or failures in obtaining or retaining regulatory approvals, delayed product launches, lack of

market acceptance and continued pressure for more stringent regulatory intervention and litigation.

These concerns could manifest themselves in stockholder proposals, preferred purchasing, delays or failures in obtaining or retaining regulatory approvals, delayed product launches, lack of market acceptance and continued pressure for more stringent regulatory intervention and litigation.

These concerns could also influence public perceptions, the viability or continued sales of certain of the Company's products, its reputation and the cost to comply with regulations.

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With the exception of the possible effect of the asbestos-related liability of Union Carbide Corporation (“Union Carbide”) as described below, it is the opinion of the Company’s management that the possibility is remote that the aggregate of all such claims and lawsuits will have a material adverse impact on the Company’s consolidated financial statements.

Union Carbide is and has been involved in a large number of asbestos-related suits filed primarily in state courts during the past four decades.

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.

At December 31, 2024, Union Carbide's total asbestos-related liability, including future defense and processing costs, was $791 million ($867 million at December 31, 2023).

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relationships with new, local partners;

funding commitments and guarantees;

expropriation, military actions, war, terrorism and political instability;

project funding commitments and guarantees;

expropriation, military actions, war, terrorism, sanctions and political instability;

uninsurable risks;

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and determining raw material supply and other details regarding product movement.

The Company also makes strategic investments in emerging companies.

While the Company pursues strategic investments because it expects them to yield longer-term benefits, they could adversely affect the Company’s near-term results of operations.

These investments may not yield the business benefits, synergies or financial benefits anticipated by management.

Additionally, disruptions to supply chains, distribution chains and/or public and private infrastructure and services, including those caused by industry capacity constraints, material availability, global logistics delays, and third party service and material providers;

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and/or disruptions to the Company's site operations caused by tenant and neighboring manufacturing operations, as well as the Company's ability to attract and retain a talented workforce, could materially and adversely impact the Company's business operations.

If the manufacturing operations, supply chains, sales and marketing activities are not reliable and/or the implementation of the Company's projects is not successful, it could adversely affect the Company’s financial condition, cash flows and results of operations.

If the manufacturing operations, supply chains, sales and marketing activities, investments in emerging companies and joint venture operations are not reliable and/or the implementation of the Company's projects is not successful, it could adversely affect the Company’s financial condition, cash flows and results of operations.

Cybersecurity Threat:

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and the risk of loss or security of the private data of the Company, its customers and its employees could negatively impact the Company’s business strategy, results of operations, financial condition and reputation.

The Company relies on various information systems, including information systems operated by third-parties, to support safe, efficient and reliable business and operating processes and activities and to safeguard its proprietary information assets, including trade secrets, know-how and other sensitive, business critical information.

The Company relies on various information systems, including information systems operated by third-parties which may also include embedded artificial intelligence ("AI"), to support safe, efficient and reliable business and operating processes and activities and to safeguard its proprietary information assets, including trade secrets, know-how and other sensitive, business critical information.

These systems are critical to the Company's process to accurately report financial results for management and external reporting purposes and to ensure compliance with financial reporting, legal and tax requirements in the United States and around the world.

These systems may also be used to collect and process sensitive customer and personal employee data the Company may be legally required to protect.

Increased global cybersecurity vulnerabilities, threats and more sophisticated and targeted cyberattacks continue to pose risks to the Company’s products, systems and networks, and the confidentiality, availability and integrity of the Company’s data.

Increased global cybersecurity vulnerabilities, threats and targeted cyberattacks, which are becoming more sophisticated as attackers increase their utilization of developing techniques and tools, including AI, continue to pose risks to the Company’s products, systems and networks, and the confidentiality, availability and integrity of the Company’s data.

These vulnerabilities also expose the Company’s customers, suppliers and third-party service providers to loss.

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As a result, cyberattacks, internal and external security breaches, and attacks and security breaches of third-party systems could disrupt the Company's operations, compromise Dow’s proprietary and confidential, business critical information, jeopardize the Company's ability to safeguard and maintain accurate data, including personal data, and harm the Company's reputation which could result in litigation, enforcement actions, including fines, penalties and disruption of the Company's right to operate in certain jurisdictions, and significant remediation costs.

Additionally, the Company’s use of artificial intelligence software may create additional risks related to the unintentional disclosure of proprietary, confidential, personal or otherwise sensitive information.

Additionally, the Company’s use of AI software may create additional risks related to the unintentional disclosure of proprietary, confidential, personal or otherwise sensitive information.

While the Company has a comprehensive cybersecurity program that is continuously reviewed, maintained and upgraded, cyberattacks by nation-state organizations, crime organizations and other hackers have become increasingly sophisticated, and it is possible for such attacks to remain undetected for an extended period of time.

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A significant operational event could negatively impact the Company's results of operations.

As a diversified chemical manufacturing company, the Company's operations at each site, including maintenance of its facilities, the transportation of supplies and products, cyberattacks, pandemics and other public health-related events or severe weather conditions and other natural phenomena (such as freezing, drought, hurricanes, earthquakes, tsunamis, floods, etc.) could result in an unplanned event that could be significant in scale and could negatively impact operations, neighbors or the public at large, which could have a negative impact on the Company's results of operations.

As a diversified chemical manufacturing company, the Company's operations at each site, including maintenance of its facilities, the transportation of supplies and products, cyberattacks, the Company's limited utilization of AI in its operations, pandemics and other public health-related events or severe weather conditions and other natural phenomena (such as freezing, drought, hurricanes, earthquakes, tsunamis, floods, etc.) could result in an unplanned or unintended event that could be significant in scale and could negatively impact operations, neighbors or the public at large, which could have a negative impact on the Company's results of operations.

Major hurricanes and other weather-related events have caused significant disruption in the Company's operations on the U.S.

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Gulf Coast, similar severe weather conditions or other natural phenomena in the future could negatively impact the Company's results of operations.

Other non-weather-related unplanned events have also caused disruptions in the Company’s operations at various sites.

Other non-weather-related unplanned events have also caused disruptions in the

Company’s operations at various sites.

While the Company has processes in place to minimize the risks and impacts of such events, such unplanned future events could negatively impact the Company’s results of operations.

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Purchased feedstock and energy costs account for a substantial portion of the Company’s total production costs and operating expenses.

The Company purchases hydrocarbon raw materials including ethane, propane, butane, naphtha and condensate as feedstocks and purchases certain monomers, primarily ethylene and propylene, to supplement internal production, as well as other raw materials.

The Company purchases hydrocarbon-based raw materials including ethane, propane, butane, naphtha and condensate as feedstocks and purchases certain monomers, primarily ethylene and propylene, to supplement internal production, as well as other raw materials.

The Company also purchases natural gas, primarily to generate electricity, electric power to supplement internal generation, and steam.

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Also, if the Company’s key suppliers of feedstock and energy are unable to provide the raw materials required for production, it could have a negative impact on the Company’s results of operations.

PANDEMIC - RELATED RISKS

Public Health Crisis:

A public health crisis, including a pandemic similar in nature to coronavirus disease 2019, could impact all geographic regions where Dow products are produced and sold.

The global, regional and local spread of a public health crisis could result in, and in the past has resulted in, significant global mitigation measures, including government-directed quarantines, social distancing and shelter-in-place mandates, travel restrictions and/or bans, mask and vaccination mandates, restrictions on large gatherings and restricted access to certain corporate facilities and manufacturing sites.

Business disruptions and market volatility resulting from a public health crisis could have a substantial negative impact on the Company’s results of operations, financial condition and cash flows.

The adverse impact of a pandemic could include, and in the past has included, without limitation, fluctuations in the Company’s stock price due to market volatility;

a decrease in demand for certain Company products;

price declines;

reduced profitability;

supply chain disruptions impeding the Company’s ability to ship and/or receive product;

temporary idling or permanent closure of select manufacturing facilities and/or manufacturing assets;

asset impairment charges;

interruptions or limitations to manufacturing operations imposed by local, state or federal governments;

reduced market liquidity and increased borrowing costs;

workforce absenteeism and distraction;

labor shortages;

customer credit concerns;

increased cybersecurity risk and data accessibility disruptions due to remote working arrangements;

workforce reductions and fluctuations in foreign currency markets.

Additional risks may include, but are not limited to:

shortages of key raw materials;

potential impairment in the carrying value of goodwill;

additional asset impairment charges;

increased obligations related to the Company’s pension and other postretirement benefit plans;

and tax valuation allowance;

and may also have the effect of heightening many of the other risks described in this "Risk Factors" section.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors