What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-02-04 compared with 2024-01-31 · 400 added, 262 removed, 2258 unchanged (23% of the section changed)

6 unchanged sentences

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated January 31, 2024, expressed an unqualified opinion on the Company's internal control over financial reporting.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 4, 2025, expressed an unqualified opinion on the Company's internal control over financial reporting.

Basis for Opinion

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Midland, Michigan

January 31, 2024

February 4, 2025

We have served as the Company's auditor since 1905.

4 unchanged sentences

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 4, 2025, expressed an unqualified opinion on the Company's internal control over financial reporting.

Basis for Opinion

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The Company establishes a liability for unrecognized tax benefits that do not meet this threshold.

evaluation of each uncertain tax position requires management to apply specialized skill, knowledge, and significant judgment related to the identified position.

The evaluation of each uncertain tax position requires management to apply specialized skill, knowledge, and significant

judgment related to the identified position.

The Company’s liability for unrecognized tax benefits and related accrued interest and penalties as of December 31, 2024 was $ 422 million and $ 327 million, respectively.

12 unchanged sentences

Midland, Michigan

January 31, 2024

February 4, 2025

We have served as the Company's auditor since 1905.

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Other comprehensive income (loss), net of tax

Unrealized losses on investments — ( 312 ) ( 45 )

Unrealized gains (losses) on investments 10 — ( 312 )

Cumulative translation adjustments ( 172 ) 43 ( 579 )

75 unchanged sentences

Provision (credit) for deferred income tax 135 ( 1,222 ) 79

Earnings of nonconsolidated affiliates less than (in excess of) dividends received 387 696 ( 651 )

Net periodic pension benefit cost 548 23 39

Earnings of nonconsolidated affiliates less than dividends received 348 387 696

Net periodic pension benefit cost (credit) ( 210 ) 548 23

Pension contributions ( 121 ) ( 142 ) ( 235 )

29 unchanged sentences

Payments on long-term debt ( 267 ) ( 446 ) ( 1,006 )

Collections on securitization programs 18 — —

Collections on securitization programs, net of remittances ( 9 ) 18 —

Purchases of treasury stock ( 494 ) ( 625 ) ( 2,325 )

72 unchanged sentences

Other comprehensive income (loss), net of tax

Unrealized losses on investments — ( 312 ) ( 45 )

Unrealized gains (losses) on investments 10 — ( 312 )

Cumulative translation adjustments ( 172 ) 43 ( 579 )

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Earnings of nonconsolidated affiliates less than (in excess of) dividends received 348 387 696

Net periodic pension benefit cost 548 23 39

Net periodic pension benefit cost (credit) ( 210 ) 548 23

Pension contributions ( 121 ) ( 142 ) ( 235 )

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Payments on long-term debt ( 267 ) ( 446 ) ( 1,006 )

Collections on securitization programs 18 — —

Collections on securitization programs, net of remittances ( 9 ) 18 —

Proceeds from issuance of stock 166 188 212

46 unchanged sentences

2 Recent Accounting Guidance

4 Restructuring and Asset Related Charges - Net

4 Acquisitions and Divestitures

5 Restructuring and A sset Related Charges - Net

6 Supplementary Information

77 unchanged sentences

Derivatives not designated as hedging instruments are marked-to-market at the end of each accounting period with the results included in income.

Accounts Receivable Programs

The Company maintains accounts receivable securitization and discounting facilities with various financial institutions, which allow for the sale of eligible trade accounts receivable at any point in time.

The securitized accounts receivable are isolated in wholly owned special purpose entities and support the securities issued by those entities.

The Company derecognizes the eligible trade receivables upon sale and retains no interest in the sold trade receivables.

The Company continues to service the trade receivables and remit payments received from customers to the financial institutions.

Amounts collected from customers but not yet remitted to the applicable financial institution are included in “Accrued and other current liabilities” in the consolidated balance sheets.

When previously sold trade receivables are repurchased, they are included in “Accounts and notes receivable – Other” in the consolidated balance sheets.

See Note 13 for additional information.

Inventories are stated at the lower of cost or net realizable value.

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See Note 9 for additional information.

The Company routinely exchanges and swaps raw materials and finished goods with other companies to reduce delivery time, freight and other transportation costs.

The Company routinely utilizes exchange, swap and tolling arrangements with other companies for raw materials and finished goods to increase sourcing options, shorten delivery times, and reduce freight and other transportation costs.

These transactions are treated as non-monetary exchanges and are valued at cost.

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Goodwill is tested for impairment at the reporting unit level annually in the fourth quarter, or more frequently when events or changes in circumstances indicate that the fair value of a reporting unit has more likely than not declined below its carrying value.

When testing goodwill for impairment, the Company may first assess qualitative factors.

When testing goodwill for

impairment, the Company may first assess qualitative factors.

If an initial qualitative assessment identifies that it is more likely than not that the fair value of a reporting unit is less than its carrying value, additional quantitative testing is performed.

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The Company primarily utilizes a discounted cash flow methodology to calculate the fair value of its reporting units.

Finite-lived intangible assets such as developed technology, customer-related, trademarks, tradenames and software, are amortized over their estimated useful lives, generally on a straight-line basis for periods ranging primarily from 3 to 20 years.

Finite-lived intangible assets such as developed technology, customer-related assets, trademarks, tradenames and software, are amortized over their estimated useful lives, generally on a straight-line basis for periods ranging primarily from 3 to 20 years.

Asset Retirement Obligations

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The Company receives grants, subsidies and incentives (collectively "incentives") from governments in various jurisdictions in support of its operations and capital projects.

The incentives are recorded when there is reasonable assurance that the Company will comply with the terms and conditions attached to the incentives and that the incentives will be received.

The incentives are recorded when it is probable that the Company will comply with the terms and conditions attached to the incentives and that the incentives will be received.

Incentives are recognized on a systematic basis over the periods in which the related cost or expenditures occur and are included in the Company's financial statements as reductions of "Cost of sales" or "Research and development expenses" in the Company’s consolidated statements of income or as a reduction of "Property" in the consolidated balance sheets.

In 2023, the Company received $ 183 million of government incentives primarily related to the cost of energy used in the Company’s production processes ($ 260 million in 2022).

In 2024, the Company received $ 272 million of government incentives ($ 183 million in 2023 and $ 260 million in 2022) primarily related to the cost of energy used in the Company’s production processes.

These incentives, from various governments, are typically based on level of energy consumption and are recorded as a reduction to "Cost of sales" in the consolidated statements of income and as "Accounts and notes receivable - Other" until received or as a reduction to "Accounts payable - Trade" in the consolidated balance sheets.

In 2024, the Company recognized $ 56 million in government incentives ( zero in 2023 and 2022) related to the construction of certain energy assets in the United States.

These incentives are recorded as a reduction of “Property” in the consolidated balance sheets and will lower depreciation expense over the useful lives of the related energy assets through a reduction to “Cost of sales” in the consolidated statements of income.

Other forms of government assistance received by the Company in 2024, 2023 and 2022 were not material.

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Recently Adopted Accounting Guidance

In 2023, the Company adopted the disclosure requirements of Accounting Standards Update ("ASU") 2022-04, "Liabilities — Supplier Finance Programs (Subtopic 405-50):

Disclosure of Supplier Finance Program Obligations," including early adoption of the requirement to disclose rollforward information on a prospective basis.

The ASU, which is intended to enhance the transparency of supplier finance programs, requires buyers in a supplier finance program to disclose sufficient information about the program to allow a user of financial statements to understand the program’s nature, activity during the period, changes from period to period, and potential magnitude.

See Note 5 for disclosures related to the Company's supplier finance program.

On January 1, 2024, the Company adopted the amendments in Accounting Standards Update ("ASU") 2023-02, "Investments — Equity Method and Joint Ventures (Topic 323):

Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method" and elected to account for certain tax equity investments using the proportional amortization method, as provided by the ASU.

Under the proportional amortization method, an entity amortizes the initial cost of tax equity investments in proportion to the income tax credits and other income tax benefits received and recognizes the net amortization and income tax credits and other income tax benefits in the income statement as a component of income tax expense (benefit).

The adoption of the ASU did not have a material impact on the Company's consolidated financial statements.

In the fourth quarter of 2024, the Company adopted the annual and interim disclosure requirements of ASU 2023-07, "Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures." The amendments expand a public business entity's segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the CODM, clarifying when an entity may report one or more additional measures to assess segment performance, requiring enhanced interim disclosures, providing new disclosure requirements for entities with a single reportable segment, and requiring other new disclosures.

See Note 25 for applicable reportable segment disclosures required by this guidance.

Accounting Guidance Issued But Not Adopted at December 31, 2024

In March 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-02, "Investments — Equity Method and Joint Ventures (Topic 323):

Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method." The amendments permit reporting entities to elect to account for their tax equity investments using the proportional amortization method if certain conditions are met.

Under the proportional amortization method, an entity amortizes the initial cost of the investment in proportion to the income tax credits and other income tax benefits received and recognizes the net amortization and income tax credits and other income tax benefits in the income statement as a component of income tax expense (benefit).

The amendments also require certain disclosures in annual and interim reporting periods about an entity's tax credit programs.

The new standard is effective for public companies for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, and the amendments must be applied on either a modified retrospective or a retrospective basis.

Early adoption is permitted.

The adoption of this guidance is not expected to have a material impact on the consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, "Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures," which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses, allowing financial statement users to better understand the components of a segment's profit or loss to assess potential future cash flows for each reportable segment and the entity as a whole.

The amendments expand a public entity's segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker ("CODM"), clarifying when an entity may report one or more additional measures to assess segment performance, requiring enhanced interim disclosures, providing new disclosure requirements for entities with a single reportable segment, and requiring other new disclosures.

The amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and early adoption is permitted.

Although the ASU only requires additional disclosures about the Company's operating segments, the Company is currently evaluating the impact of adopting this guidance on the consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740):

In December 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-09, "Income Taxes (Topic 740):

Improvements to Income Tax Disclosures," which is intended to enhance the transparency, decision usefulness and effectiveness of income tax disclosures.

The amendments in this ASU require a public entity to disclose a tabular tax rate reconciliation, using both percentages and currency, with specific categories.

A public entity is also required to provide a qualitative description of the states and local jurisdictions that make up the majority of the effect of the state and local income tax category and the net amount of income taxes paid, disaggregated by federal, state and foreign taxes and also disaggregated by individual jurisdictions.

The amendments in this ASU require a public business entity to disclose a tabular tax rate reconciliation, using both percentages and currency, with specific categories.

A public business entity is also required to provide a qualitative description of the states and local jurisdictions that make up the majority of the effect of the state and local income tax category and the net amount of income taxes paid, disaggregated by federal, state and foreign taxes and also disaggregated by individual jurisdictions.

The amendments also remove certain disclosures that are no longer considered cost beneficial.

The amendments are effective prospectively for annual periods beginning after December 15, 2024, and early adoption and retrospective application are permitted.

Although the ASU only modifies the Company's required income tax disclosures, the Company is currently evaluating the impact of adopting this guidance on the consolidated financial statements.

The adoption of the ASU is not expected to have a material impact on the Company's consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, "Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses," which is intended to improve disclosures about a public business entity's expenses and address requests from investors for more detailed information about the types of expenses in commonly presented expense captions.

Such information should allow investors to better understand an entity's performance, assess future cash flows, and compare performance over time and with other entities.

The amendments will require public business entities to disclose in the notes to the financial statements, at each interim and annual reporting period, specific information about certain costs and expenses, including purchases of inventory, employee compensation, depreciation, and intangible asset amortization included in each expense caption presented on the face of the income statement, and the total amount of an entity's selling expenses.

The amendments are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, and may be applied either prospectively or retrospectively.

Early adoption is permitted.

The Company is currently evaluating the impact of adopting this guidance on the consolidated financial statements.

SEC Final Rules Not Adopted at December 31, 2024

In March 2024, the U.S.

Securities and Exchange Commission ("SEC") adopted final rules under SEC Release Nos.

33-11275 and 34-99678, "The Enhancement and Standardization of Climate-Related Disclosures for Investors," which requires registrants to disclose certain climate related information in registration statements and annual reports.

The final rules include requirements to disclose material climate-related risks;

activities to mitigate or adapt to such risks;

information about the board of directors' oversight of climate-related risks and management’s role in managing material climate-related risks;

and information on any climate-related targets or goals that are material to the registrant's business, results of operations, or financial condition.

Registrants are also required to disclose the financial statement effects of severe weather events and other natural conditions in the notes to the financial statements.

Certain large registrants are also required to disclose Scope 1 and Scope 2 greenhouse gas ("GHG") emissions, when material.

The final rules include a phased-in compliance period for all registrants.

As a large accelerated filer, most disclosure requirements are effective for the Company beginning with the year ending December 31, 2025.

GHG emissions disclosures are required for the year ending December 31, 2026.

The Company will also be required to obtain limited assurance on its Scope 1 and Scope 2 GHG emissions disclosures beginning with the year ending December 31, 2029, with reasonable assurance required beginning with the year ending December 31, 2033.

In April 2024, the SEC informed the U.S.

Court of Appeals for the Eighth Circuit ("Court") that it would voluntarily stay the final rules until various legal challenges are resolved by the Court.

The Company is currently evaluating the impact of the final rules on its consolidated financial statements and annual disclosures.

NOTE 3 – REVENUE

The majority of the Company's revenue is derived from product sales.

In 2023, 98 percent of the Company's revenue related to product sales ( 99 percent in 2022 and 2021).

In 2024, 98 percent of the Company's revenue related to product sales ( 98 percent in 2023 and 99 percent in 2022).

The remaining sales were primarily related to the Company's insurance operations and licensing of patents and technologies.

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Remaining performance obligations represent the transaction price allocated to unsatisfied or partially unsatisfied performance obligations.

At December 31, 2023, the Company had unfulfilled performance obligations of $ 744 million ($ 840 million at December 31, 2022) related to the licensing of technology and expects revenue to be recognized for the remaining performance obligations over the next seven years.

At December 31, 2024, the Company had unfulfilled performance obligations of $ 759 million ($ 744 million at December 31, 2023) related to the licensing of technology and expects revenue to be recognized for the remaining performance obligations over the next five years.

The Company has additional remaining performance obligations for product sales that have expected durations of one year or less, product sales of materials delivered through a pipeline for which the Company has elected the "right to invoice" practical expedient, and variable consideration attributable to royalties for licenses of patents and technology.

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Revenue recognized in 2024 from amounts included in contract liabilities at the beginning of the period was approximately $ 190 million (approximately $ 315 million in 2023 and $ 250 million in 2022).

In 2023, the amount of contract assets reclassified to receivables as a result of the right to the transaction consideration becoming unconditional was approximately $ 45 million (approximately $ 15 million in 2022).

The Company did not recognize any asset impairment charges related to contract assets in 2023 (immaterial in 2022 and no impairment charges in 2021).

In 2024, the amount of contract assets reclassified to receivables as a result of the right to the transaction consideration becoming unconditional was insignificant (approximately $ 45 million in 2023).

The Company did not recognize any asset impairment charges related to contract assets in 2024 (no impairment charges in 2023 and immaterial in 2022).

The following table summarizes contract assets and liabilities at December 31, 2024 and 2023:

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Other noncurrent obligations $ 1,480 $ 1,642

The decrease from December 31, 2022 to December 31, 2023 was primarily due to recognition of deferred royalty payments.

The decrease from December 31, 2022 to December 31, 2023 was primarily due to recognition of revenue on long-term product supply agreements.

The increase from December 31, 2023 to December 31, 2024 was primarily due to the reclassification of deferred royalty payments from noncurrent to current, partially offset by recognition of deferred royalty payments.

The decrease from December 31, 2023 to December 31, 2024 was primarily due to recognition of revenue on long-term product supply agreements and the reclassification of deferred royalty payments from noncurrent to current, partially offset by deferred royalty payments.

NOTE 4 – ACQUISITIONS AND DIVESTITURES

Divestiture of the Flexible Packaging Laminating Adhesives Business

On December 2, 2024, the Company sold its flexible packaging laminating adhesives business, within Packaging & Specialty Plastics, to Arkema S.A.

for cash proceeds of $ 115 million, net of working capital adjustments, costs to sell and other transaction expenses and subject to customary post-closing adjustments.

The divestiture included five manufacturing sites in the United States, Italy and Mexico as well as the associated inventory, customer contracts and lists, process technology and certain intellectual property.

Divested assets included inventory of $ 51 million, property with a net book value of $ 51 million, and goodwill of $ 16 million.

The Company recognized a pretax gain of $ 1 million in the fourth quarter of 2024, included in "Sundry income (expense) - net" in the consolidated statements of income.

Additionally, the Company recognized impairment charges related to write-downs of certain manufacturing assets included in this divestiture.

See Notes 5 and 22 for additional information.

The Company evaluated the divestiture of its flexible packaging laminating adhesives business and determined it did not represent a strategic shift that had a major effect on the Company’s operations and financial results and did not qualify as an individually significant component of the Company.

As a result, the divestiture is not reported as discontinued operations.

Acquisition of North American Polyethylene Recycler

On August 1, 2024, the Company acquired Circulus Holdings, LLC, a U.S.

mechanical recycling company that converts plastic waste into post-consumer resin, for a cash purchase of approximately $ 130 million.

The acquisition includes two facilities in the United States with a total recycling capacity of 50,000 metric tons per year and supports Dow's efforts to transform plastic waste and other forms of alternative feedstocks into 3 million metric tons of circular and renewable solutions annually by 2030.

The assets acquired and liabilities assumed as part of the acquisition were recorded at their estimated fair value as of the acquisition date and consisted primarily of property of $ 74 million and intangible assets, primarily technology and know-how, of $ 22 million, with the excess of purchase price over the fair value of net assets acquired of $ 37 million allocated to goodwill.

NOTE 5 – RESTRUCTURING AND ASSET RELATED CHARGES - NET

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On January 25, 2023, the Board approved restructuring actions to achieve the Company's structural cost improvement initiatives in response to the continued economic impact from the global recessionary environment and to enhance its agility and long-term competitiveness across the economic cycle.

These actions are expected to be substantially complete by the end of the first quarter of 2025.

As a result of these actions the Company recorded pretax restructuring charges of $ 541 million in the first quarter of 2023, additional pretax restructuring charges of $ 8 million in the second quarter of 2023, and a $ 14 million net credit adjustment in the fourth quarter of 2023.

These actions are expected to be substantially complete by the end of 2024.

In the first quarter of 2024, the Company recorded additional pretax restructuring charges of $ 8 million for asset write-downs and write-offs related to the shutdown of certain polyurethanes assets within the Industrial Intermediates & Infrastructure segment.

In the third quarter of 2024, the Company recorded additional pretax restructuring charges of $ 7 million for asset write-downs and write-offs related to the shutdown of certain silicones assets within the Performance Materials & Coatings segment.

The impacted facilities are expected to be shutdown by the end of 2025.

Additionally, the Company recorded a pretax restructuring charge of $ 16 million for severance and related benefit costs and a pretax restructuring charge of $ 1 million for additional asset write-downs and write-offs, related to Corporate.

In the fourth quarter of 2024, the Company recorded a pretax restructuring charge of $ 25 million for severance and related benefit costs and a pretax restructuring charge of $ 9 million for costs associated with exit and disposal activities, related to Corporate.

The following table summarizes the activities related to the 2023 Restructuring Program, including segment information:

2023 Restructuring Program Severance and Related Benefit Costs Asset Write-downs and Write-offs Total

2023 Restructuring Program Severance and Related Benefit Costs Asset Write-downs and Write-offs Costs Associated with Exit and Disposal Activities Total

Packaging & Specialty Plastics $ — $ 1 $ — $ 1

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Reserve balance at Dec 31, 2023 $ 122 $ — $ — $ 122

At December 31, 2023, $ 101 million of the reserve balance was included in "Accrued and other current liabilities" and $ 21 million was included in "Other noncurrent obligations" in the consolidated balance sheets.

The Company recorded pretax restructuring charges of $ 535 million inception-to-date under the 2023 Restructuring Program, consisting of severance and related benefit costs of $ 344 million and asset write-downs and write-offs of $ 191 million.

Packaging & Specialty Plastics $ — $ — $ — $ —

Industrial Intermediates & Infrastructure — 8 — 8

Performance Materials & Coatings — 7 — 7

Corporate 41 1 9 51

Total restructuring charges $ 41 $ 16 $ 9 $ 66

Charges against the reserve — ( 16 ) ( 9 ) ( 25 )

Cash payments ( 103 ) — — ( 103 )

Reserve balance at Dec 31, 2024 $ 60 $ — $ — $ 60

At December 31, 2024, $ 60 million of the reserve balance was included in "Accrued and other current liabilities" ($ 101 million at December 31, 2023) and zero was included in "Other noncurrent obligations" ($ 21 million at December 31, 2023) in the consolidated balance sheets.

The Company recorded pretax restructuring charges of $ 601 million inception-to-date under the 2023 Restructuring Program, consisting of severance and related benefit costs of $ 385 million, asset write-downs and write-offs of $ 207 million, and costs associated with exit and disposal activities of $ 9 million.

Severance and Related Benefit Costs

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The 2023 Restructuring Program included a charge for severance and related benefit costs of $ 385 million for a global workforce reduction of approximately 2,000 employees.

The majority of separations occurred by the end of the second quarter of 2023 with the remaining occurring primarily through the end of 2024.

The majority of separations occurred by the end of the second quarter of 2023 with the remaining occurring primarily through the first quarter of 2025.

Asset Write-downs and Write-offs

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• Corporate recorded charges related to the write-down of Company owned and leased, non-manufacturing facilities, primarily related to office space rationalization.

Restructuring implementation costs, primarily decommissioning and demolition activities related to asset actions and costs associated with the Company's productivity and efficiency actions, are expected to result in additional cash expenditures of approximately $ 285 million, primarily through the end of 2024.

Costs Associated with Exit and Disposal Activities

The 2023 Restructuring program included a net pretax charge of $ 9 million for the net cost of benefit settlement, curtailment and special termination benefits related to participants of a pension plan in Europe that were impacted by the restructuring program, related to Corporate.

Restructuring implementation and efficiency costs totaled $ 230 million in 2024 ($ 243 million in 2023).

Asset Related Charges

In 2024, the Company recognized pretax impairment charges of $ 37 million primarily related to write-downs of certain manufacturing assets in the United States and Italy included in the Company's planned divestiture of its flexible packaging laminating adhesives business.

The impairment charges were included in "Restructuring and asset related charges - net" in the consolidated statements of income and related to Packaging & Specialty Plastics.

See Notes 4 and 22 for additional information.

In 2023, the Company recorded pretax asset related credits of $ 7 million in Corporate related to a prior restructuring program.

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$ 8 million in Packaging & Specialty Plastics, $ 73 million in Industrial Intermediates & Infrastructure, $ 6 million in Performance Materials & Coatings and $ 31 million in Corporate.

Subsequent Event

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.

This program includes a workforce reduction of approximately 1,500 roles.

The Company will record a charge in the first quarter of 2025 for costs associated severance and related benefit costs.

In total, these costs are expected to be in the range of $ 250 million to $ 325 million and have future cash payments to be paid out primarily over the next two years.

In addition, the Company will incur costs to implement these actions, which will be expensed as incurred and range from $ 20 million to $ 30 million over the life of the program.

NOTE 6 – SUPPLEMENTARY INFORMATION

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Gain on sales of other assets and investments 3

Asset impairments and related costs 4

Gain (loss) on early extinguishment of debt 4

5 ( 8 ) ( 574 )

Indemnification and other transaction related costs 5

Asset impairments and related costs 6

Gain related to Nova legal matter 7

Dow Silicones breast implant liability adjustment — — 60

Luxi arbitration award 7

Gain on divestitures and asset sale 8

Other - net 100 125 31

2 unchanged sentences

See Note 19 for additional information about the Company's pension and other postretirement plans, including pension settlement charges.

Foreign exchange losses in 2023 relate primarily to exposures in the Argentine peso, including $ 109 million related to the devaluation of the Argentine peso by the Argentina government in December 2023.

Foreign exchange losses in 2022 relate primarily to exposures in the Argentine peso.

Foreign exchange losses in 2024 relate primarily to exposures in the Argentine peso and Egyptian pound, while 2023 and 2022 relate primarily to exposures in the Argentine peso.

In addition, 2023 includes a loss of $ 109 million related to the devaluation of the Argentine peso by the Argentina government in December 2023.

The year ended December 31, 2024, includes a gain of $ 25 million associated with a warehouse sale.

The year ended December 31, 2023, includes gains associated with the sale of shares of a previously impaired equity method investment.

Certain obligations associated with a previously impaired equity method investment.

See Note 14 for additional information.

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("Corteva") as part of the separation and distribution.

The year ended December 31, 2024 and 2023, includes certain obligations and subsequent reversals associated with a previously impaired equity method investment.

See Note 15 for additional information.

The year ended December 31, 2021, includes post-closing adjustments on a previous divestiture, related to Packaging & Specialty Plastics.

Sundry income (expense) - net for TDCC for the years ended December 31, 2024, 2023 and 2022, is substantially the same as that of Dow Inc., with the primary difference related to indemnification and other transaction related costs recorded on Dow Inc.

Therefore, TDCC sundry income (expense) - net is not disclosed separately.

Therefore, Sundry income (expense) - net for TDCC is not disclosed separately.

Other Investments

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The Company has the ability to monetize its investment in its COLI policies as an additional source of liquidity.

At December 31, 2023, the Company had monetized $ 97 million of its existing COLI policies' value ( zero at December 31, 2022).

At December 31, 2024, the Company had no outstanding monetization of its existing COLI policies' surrender value ($ 97 million at December 31, 2023).

Supplier Finance Program

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At December 31, 2024, outstanding obligations confirmed as valid under the SCF program were $ 291 million ($ 285 million at December 31, 2023), included in “Accounts payable – Trade” in the consolidated balance sheets.

The following table summarizes the outstanding obligations confirmed as valid under the SCF program for the year ended December 31, 2023:

The following table summarizes the activity of the SCF program for the years ended December 31, 2024 and 2023:

Supplier Finance Program Activity 2024 2023

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and TDCC, respectively.

Accrued payroll, which is a component of "Accrued and other current liabilities" and includes liabilities related to payroll, performance-based compensation and severance, was $ 714 million at December 31, 2023 and $ 650 million at December 31, 2022.

No other components of "Accrued and other current liabilities" were more than 5 percent of total current liabilities.

No components of "Accrued and other current liabilities" were more than 5 percent of "Total current liabilities" at December 31, 2024.

At December 31, 2023, accrued payroll, which is a component of "Accrued and other current liabilities" and includes liabilities related to payroll, performance-based compensation and severance, was $ 714 million.

No other components of "Accrued and other current liabilities" were more than 5 percent of "Total current liabilities" at December 31, 2023.

Supplemental Cash Flow Information

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The financial statements for Dow Inc.

and TDCC are substantially similar, including the reporting of current and deferred tax expense (benefit), provision for income taxes, and deferred tax asset and liability balances.

and TDCC are substantially similar, including the reporting of current and deferred tax expense (benefit), provision (credit) for income taxes, and deferred tax asset and liability balances.

As a result, the following income tax discussion pertains to Dow Inc.

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Change in tax basis in foreign assets 2

8.3 ( 54.9 ) —

Foreign permanent items ( 5.7 ) ( 1.1 ) ( 0.6 )

Other - net 3.0 1.2 2.9

Effective tax rate 24.9 % ( 0.6 ) % 23.8 %

Certain prior year rates have been adjusted to conform with the current year presentation.

The 2023 impact primarily represents the initial recognition of tax basis in intangible assets in foreign jurisdictions and the related valuation allowance.

6 unchanged sentences

Intangibles 1,972 261 2,090 331

2,090 331 36 415

Inventory 137 227 114 272

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Valuation allowances ( 2,748 ) — ( 2,948 ) —

( 2,948 ) — ( 1,269 ) —

Total $ 4,789 $ 3,924 $ 5,219 $ 4,132

The change in 2023 primarily represents the initial recognition of tax basis in intangible assets in foreign jurisdictions and the related valuation allowance.

Operating Loss and Tax Credit Carryforwards at Dec 31 2024 2023

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Total unrecognized tax benefits that, if recognized, would impact the effective tax rate $ 422 $ 513 $ 520

Total amount of interest and penalties expense (benefit) recognized in "Provision for income taxes" $ 126 $ ( 27 ) $ 359

Total amount of interest and penalties expense (benefit) recognized in "Provision (credit) for income taxes" $ ( 234 ) $ 126 $ ( 27 )

Total accrual for interest and penalties recognized in the consolidated balance sheets $ 327 $ 561 $ 498

24 unchanged sentences

Stock options and restricted stock units excluded from EPS calculations 1

These outstanding options to purchase shares of common stock and restricted stock units were excluded from the calculation of diluted earnings per share because the effect of including them would have been antidilutive.

These outstanding stock units were excluded from the calculation of diluted earnings per share because the effect of including them would have been antidilutive.

NOTE 9 – INVENTORIES

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Net investment in nonconsolidated affiliates $ 698 $ 1,038

The carrying amount of the Company’s investments in nonconsolidated affiliates at December 31, 2023 and 2022, was $ 55 million less than its share of the investees’ net assets, exclusive of additional differences relating to Sadara, EQUATE Petrochemical Company K.S.C.C.

("EQUATE") and AgroFresh Solutions Inc.

("AFSI"), which are discussed separately in the disclosures that follow.

The carrying amount of the Company’s investments in nonconsolidated affiliates at December 31, 2024 and 2023, was $ 55 million less than its share of the investees’ net assets, exclusive of additional differences relating to Sadara and EQUATE Petrochemical Company K.S.C.C.

("EQUATE"), which are discussed separately in the disclosures that follow.

Dividends Received from Nonconsolidated Affiliates 2024 2023 2022

1 unchanged sentence

$ 342 $ 268 $ 964

Included in "Earnings of nonconsolidated affiliates less than (in excess of) dividends received" in the consolidated statements of cash flows.

Included in "Earnings of nonconsolidated affiliates less than dividends received" in the consolidated statements of cash flows.

The nonconsolidated affiliates in which the Company has investments are privately held companies;

therefore, quoted market prices are not available.

In 2011, the Company and Saudi Arabian Oil Company formed Sadara - a joint venture between the two companies that subsequently constructed and now operates a world-scale, fully integrated chemicals complex in Jubail Industrial City, Kingdom of Saudi Arabia.

The Company has a 35 percent equity interest in this joint venture and has been, and continues to be, responsible for marketing the majority of Sadara’s products through the Company’s established sales channels.

In 2021, Dow and the Saudi Arabian Oil Company agreed to and began transitioning the marketing rights and responsibilities for Sadara’s finished products to levels more consistent with each partner’s equity ownership, which is being implemented through 2026.

This transition will not impact equity earnings, but is expected to reduce the Company's sales of Sadara products over the five year period.

In 2011, the Company and Saudi Arabian Oil Company formed Sadara - a joint venture between the two companies that constructed and operates a world-scale, fully integrated chemicals complex in Jubail Industrial City, Kingdom of Saudi Arabia.

The Company has a 35 percent equity interest in this joint venture and continues to be responsible for marketing a significant portion of Sadara’s products through the Company’s established sales channels.

In 2021, Dow and the Saudi Arabian Oil Company agreed to a marketing rights transition plan.

Execution of the transition plan is ongoing and progressing towards aligning marketing rights and responsibilities to levels more consistent with each partner's equity ownership.

This transition will not impact equity earnings, but is expected to reduce the Company's sales of Sadara products over the transition period.

The Company’s investment in Sadara was $ 1,280 million less than Dow’s proportionate share of the carrying value of the underlying net assets held by Sadara at December 31, 2024 ($ 1,387 million less at December 31, 2023).

This basis difference, which resulted from the 2019 impairment of the investment, is primarily attributed to the long-lived assets of Sadara and is being amortized over the remaining useful lives of the assets.

At December 31, 2023, the Company had a negative investment balance in Sadara of $ 128 million classified as "Other noncurrent obligations" ($ 322 million at December 31, 2022 included in “Investment in nonconsolidated affiliates”) in the Company’s consolidated balance sheets.

At December 31, 2024, the Company had a negative investment balance in Sadara of $ 517 million classified as "Other noncurrent obligations" (negative $ 128 million at December 31, 2023) in the Company’s consolidated balance sheets.

The negative investment in Sadara Chemical Company at December 31, 2024 is primarily due to the equity losses generated during the year.

See Note 15 for additional information related to guarantees.

At December 31, 2023, the Company had a negative investment balance in EQUATE of $ 101 million classified as "Other noncurrent obligations" ($ 144 million at December 31, 2022) in the consolidated balance sheets.

At December 31, 2024, the Company had a negative investment balance in EQUATE of $ 51 million classified as "Other noncurrent obligations" (negative $ 101 million at December 31, 2023) in the consolidated balance sheets.

The reduction in the negative investment was driven by improved results during the year.

The Company's investment in EQUATE was $ 417 million less than the Company's proportionate share of EQUATE's underlying net assets at December 31, 2024 ($ 432 million less at December 31, 2023), which represents the difference between the fair values of certain MEGlobal assets acquired by EQUATE and the Company's related valuation on a U.S.

GAAP basis at the acquisition date.

A basis difference of $ 97 million at December 31, 2024 ($ 111 million at December 31, 2023), is being amortized over the remaining useful lives of the assets and the remainder is considered a permanent difference.

At March 31, 2023, the Company's previously impaired investment in AFSI was converted to cash upon completion of the AFSI shareholder-approved go-private transaction.

The Company had an investment balance in AFSI of zero at December 31, 2023 and 2022.

At December 31, 2022, the Company's investment in AFSI was $ 72 million less than the Company's proportionate share of AFSI's underlying net assets.

At December 31, 2023, the Company held no ownership interest in AFSI ( 40 percent ownership interest in AFSI at December 31, 2022).

AgroFresh Solutions Inc.

As of March 31, 2023, the Company no longer holds an investment in AFSI.

Transactions with Nonconsolidated Affiliates

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Principal Nonconsolidated Affiliates

The Company had an ownership interest in 38 nonconsolidated affiliates at December 31, 2023 ( 37 at December 31, 2022).

The Company had an ownership interest in 38 nonconsolidated affiliates at December 31, 2024 and 2023.

The Company's principal nonconsolidated affiliates and its ownership interest (direct and indirect) for each at December 31, 2024, 2023 and 2022, are as follows:

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Foreign currency impact ( 6 ) ( 2 ) ( 89 ) ( 97 )

Purchase of Circulus Holdings, LLC 37 — — 37

Sale of laminating adhesives business ( 16 ) — — ( 16 )

Balance at Dec 31, 2024 $ 5,118 $ 1,092 $ 2,355 $ 8,565

The Company has six reporting units in total:

Coatings & Performance Monomers, Consumer Solutions, Hydrocarbons & Energy, Industrial Solutions, Packaging and Specialty Plastics and Polyurethanes & Construction

At December 31, 2024, goodwill was carried by all reporting units except Coatings & Performance Monomers.

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The Company performs an impairment test of goodwill annually in the fourth quarter.

In 2023, the Company performed qualitative testing for all reporting units that carried goodwill.

Based on the results of the qualitative testing, the Company did not perform quantitative testing on any reporting units in 2023, 2022, and 2021.

The qualitative testing on the reporting units indicated that it was not more likely than not that fair value was less than the carrying value for the reporting units.

In 2024, the Company performed qualitative assessments for all reporting units that carried goodwill.

Based on the results of the qualitative testing, the Company performed quantitative testing for one reporting unit in 2024 ( zero in 2023 and 2022).

The qualitative assessments on the remaining reporting units indicated that it was more likely than not that carrying value was less than the fair value for the reporting units.

The quantitative testing conducted in 2024 concluded that no goodwill impairment existed.

Other Intangible Assets

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Accounts Receivable Programs

The Company maintains accounts receivable facilities with various financial institutions, with committed and uncommitted facilities in the United States and a committed accounts receivable facility in Europe (collectively, "the Programs"), which are both set to expire in November 2025.

The Company maintains accounts receivable facilities with various financial institutions, with committed and uncommitted facilities in the United States and a committed facility in Europe (collectively, "the Programs"), which are set to expire in November 2025.

Under the terms of the Programs, the Company may sell certain eligible trade accounts receivable at any point in time, up to $ 900 million for the U.S.

committed facility, and € 500 million for the Europe committed facility.

committed facility and up to € 500 million for the Europe committed facility.

Under the terms of the Programs, the Company continues to service the receivables from the customer, but retains no interest in the receivables, and remits payment to the financial institutions.

Losses on transfers of receivables were insignificant for the years ended December 31, 2024, 2023 and 2022.

The Company also provides a guarantee to the financial institutions for the creditworthiness and collection of the receivables in satisfaction of the facility.

See Note 15 for additional information related to guarantees.

In 2023, the Company sold $ 112 million of receivables under the Programs ($ 391 million in 2022).

Beginning in 2023, the Company has access to an accounts receivable discounting facility that covers receivables generated from sales in EMEAI.

Under the terms of the discounting facility, the Company retains no interest in the transferred receivables once sold and receivables are transferred with limited recourse.

In 2023, the Company sold $ 91 million of receivables into the facility.

Beginning in 2023, the Company has access to accounts receivable discounting facilities that cover certain receivables generated from sales in EMEAI, Asia Pacific and Canada (collectively, the "Facilities").

Under the terms of the Facilities, the Company retains no interest in the transferred receivables once sold and receivables are transferred with limited recourse.

The Company continues to service the receivables from the customer and remits payment to the Facilities.

Losses on transfers of receivables were insignificant for the years ended December 31, 2024 and 2023.

The following table provides a summary of cash flows related to the Programs and the Facilities for the years ended December 31, 2024, 2023 and 2022:

Cash Flows Related to Transfers of Accounts Receivable

In millions 2024 2023 2022

Proceeds received from new transfers $ 1,533 $ 203 $ 391

The following table provides the balances related to the Programs and the Facilities at December 31, 2024 and 2023:

Balances Related to Transfers of Accounts Receivable at Dec 31

In millions 2024 2023

Balance outstanding $ 287 $ 170

Accounts receivable derecognized $ 278 $ 152

Amounts recognized in the consolidated balance sheets:

Accrued and other current liabilities 1

Represents amounts collected from customers and not yet remitted by the Company.

NOTE 14 – NOTES PAYABLE, LONG-TERM DEBT AND AVAILABLE CREDIT FACILITIES

1 unchanged sentence

In millions 2024 2023

Commercial paper $ — $ 299

Notes payable to banks and other lenders $ 135 $ 62

Total notes payable $ 62 $ 362

Year-end average interest rates 36.03 % 33.84 %

33.84 % 6.55 %

The average interest rate increase from 2022 to 2023 is primarily due to interest rates in Argentina.

Long-Term Debt at Dec 31 2024 Average Rate 2024 2023

9 unchanged sentences

4.31 % 661 4.12 % 595

Medium-term notes, maturity 2025 4.75 % 1 — % —

Finance lease obligations 2

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2024 Activity

In the first quarter of 2024, the Company issued $ 1.25 billion of senior unsecured notes.

This offering included $ 600 million aggregate principal amount of 5.150 percent notes due 2034 and $ 650 million aggregate principal amount of 5.600 percent notes due 2054.

The issuance was completed in connection with the Company's Green Finance Framework.

The Company distributed the proceeds toward projects that support the execution of its sustainability strategy and achieve its targets focused on climate protection and a circular economy, including applicable expenditures and investments related to the Company's Fort Saskatchewan Path2Zero project.

In the second quarter of 2024, the Company redeemed $ 10 million aggregate principal amount of 2.100 percent notes due November 2030, $ 30 million aggregate principal amount of 4.250 percent notes due October 2034, $ 8 million aggregate principal amount of 5.250 percent notes due November 2041 and $ 12 million aggregate principal amount of 4.375 percent notes due November 2042.

As a result of the redemption, the Company recognized a pretax gain on the early extinguishment of debt of $ 5 million, included in "Sundry income (expense) - net" in the consolidated statements of income and related to Corporate.

In 2024, the Company issued an aggregate principal amount of $ 94 million of InterNotes ® .

The Company also issued $ 122 million of foreign currency loans.

Additionally, the Company repaid $ 83 million of long-term debt at maturity.

2023 Activity

In the fourth quarter of 2023, the Company redeemed $ 23 million aggregate principal amount of 2.100 percent notes due November 2030, $ 14 million aggregate principal amount of 4.625 percent notes due October 2044, and $ 1 million aggregate principal amount of 4.375 percent notes due November 2042.

9 unchanged sentences

Additionally, the Company repaid $ 121 million of long-term debt at maturity and approximately $ 3 million of long-term debt was repaid by consolidated variable interest entities.

2021 Activity

In the second quarter of 2021, the Company redeemed $ 208 million aggregate principal amount of 3.15 percent notes due May 2024 and $ 811 million aggregate principal amount of 3.50 percent notes due October 2024.

As a result of the redemptions, the Company recognized a pretax loss of $ 101 million on the early extinguishment of debt, included in "Sundry income (expense) - net" in the consolidated statements of income and related to Corporate.

In the third quarter of 2021, the Company completed cash tender offers for certain debt securities.

In total, $ 1,042 million aggregate principal amount was tendered and retired.

As a result, the Company recognized a pretax loss of $ 472 million on the early extinguishment of debt, included in "Sundry income (expense) – net" in the consolidated statements of income and related to Corporate.

In addition, the Company voluntarily repaid $ 81 million of long-term debt due within one year.

In 2021, the Company issued an aggregate principal amount of $ 109 million of InterNotes ® , and redeemed an aggregate principal amount of $ 31 million at maturity.

In addition, the Company voluntarily repaid an aggregate principal amount of $ 213 million of InterNotes ® with various maturities.

As a result, the Company recognized a pretax loss of $ 1 million on the early extinguishment of debt, included in "Sundry income (expense) - net" in the consolidated statements of income and related to Corporate.

Additionally, the Company repaid $ 259 million of long-term debt at maturity and approximately $ 25 million of long-term debt was repaid by consolidated variable interest entities.

Available Credit Facilities

3 unchanged sentences

Five Year Competitive Advance and Revolving Credit Facility $ 5,000 $ 5,000 November 2028 Floating rate

Bilateral Revolving Credit Facility 375 375 October 2024 Floating rate

Bilateral Revolving Credit Facility 100 100 March 2025 Floating rate

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Bilateral Revolving Credit Facility 100 100 March 2026 Floating rate

Bilateral Revolving Credit Facility 375 375 October 2026 Floating rate

Bilateral Revolving Credit Facility 150 150 November 2026 Floating rate

59 unchanged sentences

This work will be performed in a largely upriver to downriver sequence for eight geographic segments of the Tittabawassee and upper Saginaw Rivers.

In the first quarter of 2012, the EPA requested the Company address the Tittabawassee River floodplain ("Floodplain") as an additional segment.

In the first quarter of 2012, the EPA

requested the Company address the Tittabawassee River floodplain ("Floodplain") as an additional segment.

In January 2015, the Company and the EPA entered into an order to address remediation of the Floodplain.

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Dow has received from the EPA a Notice of Completion of Work for three of these six orders and the Company continues the long-term monitoring requirements.

In 2023, Dow started evaluation of the final geographic segment of the first Operable Unit.

Dow also has entered into a separate order to perform a limited remedial action for certain properties located within the second Operable Unit.

In 2022, the Company implemented the limited remedial action in the second Operable Unit and, in 2023, submitted a Completion Report for those limited remedial actions.

In 2024, Dow continued its evaluation of the final geographic segment of the first Operable Unit and completed the implementation of the remedial actions for the three open orders for other areas in the first Operable Unit.

Alternative Dispute Resolution Process

10 unchanged sentences

The consent decree further requires the Company to complete or fund 13 additional environmental restoration projects which are valued by the trustees at approximately $ 77 million, to be conducted over the next several years.

To date, three projects have been completed, including two environmental restoration projects/public amenities opened to the public.

To date, five of the eight Dow-led projects have been completed, including four environmental restoration projects/public amenities opened to the public.

The Company continues to work with the trustees on the remaining projects.

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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 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.

These suits principally allege personal injury resulting from exposure to asbestos-containing products and frequently seek both actual and punitive damages.

6 unchanged sentences

At each balance sheet date, Union Carbide also compares current asbestos claim and resolution activity, including asbestos-related defense and processing costs, to the results of the most recent Ankura study to determine whether the accrual continues to be appropriate.

In December 2021, Ankura stated that an update of its December 2020 study would not provide a more likely estimate of future events than the estimate reflected in that study and, therefore, the estimate in that study remained applicable.

Based on Union Carbide's internal review process and Ankura's response, Union Carbide determined that no change to the accrual was required.

In December 2022, Ankura completed a study of Union Carbide's historical asbestos claim and resolution activity through September 30, 2022, including asbestos-related defense and processing costs, and provided estimates for the undiscounted cost of disposing of pending and future claims against Union Carbide and Amchem through the terminal year of 2049.

Based on the study and Union Carbide's internal review process, it was determined that no adjustment to the accrual was required.

At December 31, 2022, the asbestos-related liability for pending and future claims against Union Carbide and Amchem, including future asbestos-related defense and processing costs, was $ 947 million, and approximately 23 percent of the recorded liability related to pending claims and approximately 77 percent related to future claims.

In December 2023, Ankura stated that an update of its December 2022 study would not provide a more likely estimate of future events than the estimate reflected in that study and, therefore, the estimate in that study remained applicable.

1 unchanged sentence

At December 31, 2023, the asbestos-related liability for pending and future claims against Union Carbide and Amchem, including future asbestos-related defense and processing costs, was $ 867 million, and approximately 25 percent of the recorded liability related to pending claims and approximately 75 percent related to future claims.

In December 2024, Ankura completed a study of Union Carbide's historical asbestos claim and resolution activity through September 30, 2024, including asbestos-related defense and processing costs, and provided estimates for the undiscounted cost of disposing of pending and future claims against Union Carbide and Amchem through the terminal year of 2049.

Based on the study and Union Carbide's internal review process, it was determined that no adjustment to the accrual was required.

At December 31, 2024, the asbestos-related liability for pending and future claims against Union Carbide and Amchem, including future asbestos-related defense and processing costs, was $ 791 million, and approximately 23 percent of the recorded liability related to pending claims and approximately 77 percent related to future claims.

The Company's management believes the amounts recorded by Union Carbide for the asbestos-related liability, including defense and processing costs, reflect reasonable and probable estimates of the liability based upon current, known facts.

3 unchanged sentences

As a result, it is reasonably possible that an additional cost of disposing of Union Carbide's asbestos-related claims, including future defense and processing costs, could have a material impact on the Company's results of operations and cash flows for a particular period and on the consolidated financial position.

Groundwater Contamination

The Company is the subject of various complaints related to alleged groundwater contamination based on decades-old sales and applications of certain agricultural chemical products ("Legacy Liabilities").

The costs associated with these Legacy Liabilities were previously covered by insurance policies that have since been depleted.

In the first quarter of 2023, the Company completed a study of the Legacy Liabilities now deemed to be probable and estimable based on the public reporting of sampling data and historical information to develop a reasonable estimate of the cost of pending and future claims.

Legacy Matters

The costs associated with these Groundwater Matters were previously covered by insurance policies that have since been depleted.

In the first quarter of 2023, the Company completed a study of the Groundwater Matters now deemed to be probable and estimable based on the public reporting of sampling data and historical information to develop a reasonable estimate of the cost of pending and future claims.

As a result, the Company recorded a pretax charge of $ 177 million, included in "Cost of sales" in the consolidated statements of income and related to Industrial Intermediates & Infrastructure.

At December 31, 2023, the total liability related to such alleged Legacy Liabilities settlements was $ 232 million, which was included in “Accrued and other current liabilities” and "Other noncurrent obligations" in the consolidated balance sheets.

At December 31, 2024, the total liability related to such alleged Groundwater Matters settlements was $ 155 million ($ 232 million at December 31, 2023), which was included in “Accrued and other current liabilities” and "Other noncurrent obligations" in the consolidated balance sheets.

The Company is also the subject of other groundwater contamination complaints, including claims related to 1,4-dioxane.

The Company continues to defend itself in this litigation and it has determined that the Company's exposure to liability, if any, is not currently probable or estimable.

The Company continues to defend itself in this litigation and it has determined that the Company's exposure to liability, if any, is not currently probable or estimable at December 31, 2024.

Separately, on October 10, 2024, the Company executed a settlement agreement related to arbitration for historical product claims from a divested business.

As a result, the Company recorded a pretax charge of $ 75 million in the third quarter of 2024, which is included in "Cost of sales" in the consolidated statements of income, related to Corporate, and was paid in the fourth quarter of 2024.

This is management's best estimate of loss, although the amount is subject to further arbitration and it is reasonably possible that the total loss could range up to approximately three times that amount.

Other Litigation Matters

2 unchanged sentences

All such claims are being contested.

The Company has an active risk management program consisting of numerous insurance policies

secured from many carriers at various times.

The Company has an active risk management program consisting of numerous insurance policies secured from many carriers at various times.

These policies may provide coverage that could be utilized to minimize the financial impact, if any, of certain contingencies described above.

39 unchanged sentences

the parties are awaiting the court's ruling.

Dow has also filed a new lawsuit in the same Alberta, Canada court to account for damages due to lost ethylene after June 2018.

Luxi Chemical Group Breach of Contract Matter

In November 2017, an arbitration panel of the Stockholm Chamber of Commerce held that Luxi Chemical Group Co., Ltd.

(“Luxi”), based in Shandong Province, China, violated a secrecy and non-use agreement related to the Dow and Johnson Matthey Davy Technologies Limited (“JM”) LP OXO SM Process by using Dow and JM protected information in the design, construction, and operation of its butanol and 2-ethylhexanol plants, awarding damages, fees and costs, plus interest, to both Dow and JM.

In September 2021, Luxi paid the arbitration award and interest assessment and, as a result, Dow recorded a pretax gain of $ 54 million included in “Sundry income (expense) – net” in the consolidated statements of income and related to Industrial Intermediates & Infrastructure.

Dow has also filed another lawsuit in the same Alberta, Canada court to account for damages due to lost ethylene after June 2018.

Brazilian Tax Credits

2 unchanged sentences

In response to the 2017 Decision, the Brazilian tax authority filed an appeal seeking clarification of the amount of ICMS tax to exclude from the calculation of PIS/COFINS.

In May 2021, the Brazil Supreme Court ruled in a leading case related to the amount of ICMS tax to exclude from the calculation of PIS/COFINS, which resolved two of the lawsuits filed by the Company and, in May 2022, a court decision related to the remaining lawsuit, ruling in favor of the Company's Brazilian subsidiary, became final and unappealable.

As a result, the Company recorded pretax gains of $ 112 million in 2022 and $ 67 million in 2021 for certain excess PIS/COFINS paid from 2009 to 2019, plus applicable interest, which the Company expects to apply to future required federal tax payments, and the reversal of related liabilities.

In May 2021, the Brazil Supreme Court ruled in a leading case related to the amount of ICMS tax to exclude from the calculation of PIS/COFINS, which resolved two of the lawsuits filed by the Company.

In May 2022, a court decision related to the remaining lawsuit, ruling in favor of the Company's Brazilian subsidiary, became final and unappealable and the Company recorded pretax gains of $ 112 million for certain excess PIS/COFINS paid, plus applicable interest, which the Company expects to apply to future required federal tax payments, and the reversal of related liabilities.

The pretax gains were recorded in “Cost of sales” in the consolidated statements of income.

1 unchanged sentence

Purchase Commitments

The Company has outstanding purchase commitments and various commitments for take-or-pay or throughput agreements.

The Company was not aware of any purchase commitments that were negotiated as part of a financing arrangement for the facilities that will provide the contracted goods or services or for the costs related to those goods or services at December 31, 2023 and 2022.

In the third quarter of 2024, the Company entered into a commitment for the use of a reservoir asset that will be used to supply water to one of Dow’s main U.S.

Gulf Coast manufacturing locations.

The related contract became effective in the fourth quarter of 2024, with a 35 year contract period expected to commence in 2028 upon completion of construction.

The aggregate value of the fixed and determinable portion over the expected contract period is $ 1.3 billion (approximately $ 650 million on a present value basis) at December 31, 2024.

The following table provides a summary of the final expiration, maximum future payments and recorded liability reflected in the consolidated balance sheets for guarantees:

11 unchanged sentences

The majority of the Company’s guarantees relate to debt of nonconsolidated affiliates, which have expiration dates ranging from less than one year to 14 years.

Company’s current expectation is that future payment or performance related to the non-performance of others is considered remote.

The Company’s current expectation is that future payment or performance related to the non-performance of others is considered remote.

The Company maintains accounts receivable facilities with various financial institutions, with committed and uncommitted facilities in the United States and a committed facility in Europe.

Under the terms of the Programs, the Company continues to service the receivables from the customers, but retains no interest in the receivables, and remits payment to the financial institutions.

The Company also has access to accounts receivable discounting facilities, under which receivables are transferred with limited recourse.

The Company’s maximum guaranteed liability for the accounts receivable facilities is $ 239 million at December 31, 2024 ($ 150 million at December 31, 2023).

The Company expects receivable collections and remittances to occur within the next six months.

TDCC has entered into guarantee agreements related to Sadara, a nonconsolidated affiliate.

19 unchanged sentences

The Company routinely reviews all changes to items under consideration for demolition to determine if an adjustment to the value of the asset retirement obligation is required.

The Company has recognized asset retirement obligations for the demolition and remediation activities at manufacturing sites primarily in Europe, the United States, Canada, Japan, Brazil, China, Singapore and United Arab Emirates, and capping activities at landfill sites in the United States, Brazil and Canada.

The Company has recognized asset retirement obligations for the demolition and remediation activities at manufacturing sites primarily in Europe, the United States, Brazil, Argentina, Canada and Japan, and capping activities at landfill sites in the United States, Brazil and Canada.

The Company has also recognized conditional asset retirement obligations related to asbestos encapsulation as a result of planned demolition and remediation activities at manufacturing and administrative sites primarily in the United States and Europe.

47 unchanged sentences

In 2023, $ 98 million of leased assets were reclassified from Operating leases to Finance leases due to an amendment that extended the term of the agreement.

In 2021, $ 193 million of leased assets were reclassified from Operating leases to Finance leases due to an amendment that extended the term of the agreement.

The following table summarizes the lease-related assets and liabilities recorded in the consolidated balance sheets at December 31, 2024 and 2023:

9 unchanged sentences

Total lease liabilities $ 2,241 $ 2,234

In 2023, the Company amended an agreement to extend leases of certain assets.

The amendment and related remeasurement resulted in a reclassification of $ 47 million from "Operating lease liabilities - noncurrent" to "Long-Term Debt" and $ 10 million from "Operating lease liabilities - current" to "Long-term debt due within one year." In addition to the reclassifications, the amendment increased "Long-Term Debt" by $ 61 million and decreased "Long-term debt due within one year" by $ 4 million.

The weighted-average remaining lease term and discount rate for leases recorded in the consolidated balance sheets at December 31, 2024 and 2023 are provided below:

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TDCC's Board of Directors determines whether or not there will be a dividend distribution to Dow Inc.

TDCC declared and paid dividends to Dow Inc.

of $ 2,510 million in 2023, $ 4,375 million in 2022 and $ 3,264 million in 2021.

TDCC declared $ 2,578 million of dividends to Dow Inc.

and paid $ 2,485 million of dividends to Dow Inc.

in 2024 (declared and paid $ 2,510 million in 2023 and $ 4,375 million in 2022).

Employee Stock Ownership Plan

The Dow Employee Stock Ownership Plan (the “ESOP”) allocated the remaining shares in 2022 and no shares remained unallocated at December 31, 2022 and December 31, 2023.

Unallocated shares at December 31, 2021, were excluded from the Company's earnings per share calculation.

The Dow Employee Stock Ownership Plan (the “ESOP”) allocated the remaining shares in 2022 and no shares remained unallocated at December 31, 2024, 2023 and 2022.

Compensation expense for allocated shares is recorded at the fair value of the shares on the date of allocation.

As all remaining ESOP shares were allocated in 2022, there was no compensation expense recorded in 2023 for allocated ESOP shares.

Compensation expense reflected in income before income taxes for ESOP shares allocated was $ 31 million in 2022 and $ 77 million in 2021.

As all remaining ESOP shares were allocated in 2022, there was no compensation expense recorded in 2024 or 2023 for allocated ESOP shares.

Compensation expense reflected in income before income taxes for ESOP shares allocated was $ 31 million in 2022.

Treasury Stock

3 unchanged sentences

In 2024, the Company repurchased $ 494 million of its common stock ($ 625 million in 2023 and $ 2,325 million in 2022).

Excise tax for repurchased shares was $ 2 million in 2023 ( zero in 2022 and 2021), and was included in treasury stock at cost.

Excise tax for repurchased shares was zero in 2024 ($ 2 million in 2023 and zero in 2022), and was included in treasury stock at cost.

At December 31, 2024, $ 931 million of the share repurchase program authorization remained available for repurchases.

The Company began issuing treasury shares to satisfy its obligations to make matching contributions to plan participants under The Dow Employees' Savings Plan in the first quarter of 2022.

The Company issued 2.3 million treasury shares under its compensation and benefit plans in 2023 and 1.5 million in 2022

The Company began issuing treasury shares to satisfy its obligations to make matching contributions to plan participants under the Savings Plan in the first quarter of 2022.

In addition, beginning on January 1, 2024, all eligible U.S.

employees also received an automatic non-elective contribution of 4 percent of eligible compensation to their respective defined contribution plans.

The Company issued 4.3 million treasury shares under its compensation and benefit plans in 2024, 2.3 million in 2023 and 1.5 million in 2022.

Compensation expense for issued shares is recorded at the fair value of the shares on the date of issuance.

Compensation expense reflected in income before income taxes for treasury shares issued was $ 120 million in 2023 and $ 94 million in 2022.

Compensation expense reflected in income before income taxes for treasury shares issued was $ 229 million in 2024, $ 120 million in 2023 and $ 94 million in 2022.

The following table provides a reconciliation of Dow Inc.

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Balance at Jan 1, 2022 764,226,882 29,011,573

7,451,643 ( 1,499,610 )

Repurchased — 39,286,642

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Balance at Dec 31, 2024 784,471,939 80,859,145

Shares issued to employees and non-employee directors under the Company's equity compensation plans.

Shares issued to employees and non-employee directors under the Company's equity compensation and defined contribution plans.

Accumulated Other Comprehensive Loss

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Tax expense (benefit) 2

( 4 ) ( 55 ) 34

Net (gains) losses reclassified from AOCL to net income 10 195 ( 279 )

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Reclassified to "Net sales" and "Sundry income (expense) - net."

Reclassified to "Provision for income taxes."

Reclassified to "Provision (credit) for income taxes."

Reclassified to "Sundry income (expense) - net."

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Cumulative translation adjustments ( 20 ) ( 19 ) ( 28 )

Other ( 1 ) 1 1

Balance at Dec 31 $ 496 $ 501 $ 529

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See Note 5 for additional information.

Distributions to noncontrolling interests are net of $ 8 million in 2023 ($ 7 million in 2022 and 2021) in dividends paid to a joint venture, which were reclassified to "Equity in earnings (losses) of nonconsolidated affiliates" in the consolidated statements of income.

Distributions to noncontrolling interests are net of $ 8 million in 2024 ($ 8 million in 2023 and $ 7 million in 2022) in dividends paid to a joint venture, which were reclassified to "Equity in earnings (losses) of nonconsolidated affiliates" in the consolidated statements of income.

On December 8, 2024, TDCC entered into a sale and purchase agreement with InfraPark Holdings, LLC ("InfraPark"), a subsidiary of a fund managed by Macquarie Asset Management, whereby TDCC will sell 40 percent of the membership interests in its wholly owned subsidiary Dow InfraCo, LLC in exchange for cash proceeds of approximately $ 2.4 billion (the "Transaction").

Under the terms of the sale and purchase agreement, InfraPark has the option to purchase up to an additional 9 percent of Dow InfraCo, LLC's membership interests in exchange for additional cash proceeds of up to $ 600 million within six months of the closing date of the Transaction.

The Company is targeting to close the Transaction in mid-2025, subject to regulatory approval and other closing conditions.

Upon closing the Transaction, InfraPark's ownership is expected to be accounted for as a noncontrolling interest in Dow InfraCo, LLC.

Dow InfraCo, LLC and its subsidiaries operate certain non-product producing energy, environmental, pipeline and infrastructure assets located at five of the Company's manufacturing sites in the U.S.

NOTE 19 – PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS

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The Company has both funded and unfunded defined benefit pension plans in the United States and a number of other countries.

tax-qualified plan administered by the parent company is the largest plan.

On March 4, 2021, the Company announced changes to its U.S.

tax-qualified and non-qualified pension plans, which covered substantially all U.S.

As a result, effective December 31, 2023, the Company froze the pensionable compensation and credited service amounts used to calculate pension benefits for substantially all employees who participate in its U.S.

tax-qualified and non-qualified retirement programs (collectively, the "U.S.

Plans"), and, therefore, impacted employees will not accrue additional benefits for future service and compensation.

In connection with these plan amendments, the Company remeasured its U.S.

Plans in the first quarter of 2021, which resulted in a pretax actuarial gain of $ 1,268 million, included in other comprehensive income and a pretax curtailment gain of $ 19 million.

tax-qualified plans administered by the parent company are the largest plans.

In 2021, the Company announced changes to the design of its U.S.

tax-qualified and non-qualified pension plans (collectively, the "U.S.

Plans"), which covered substantially all U.S.

Separately, in the fourth quarter of 2023, certain Company pension plans in the United States and Canada purchased or converted to nonparticipating group annuity contracts from certain insurance companies, irrevocably transferring approximately $ 1,681 million of benefit obligations and $ 1,617 million of related plan assets to the insurers.

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As a result of these transactions, the Company recognized pretax, non-cash settlement charges of $ 642 million in 2023, primarily related to the accelerated recognition of a portion of the accumulated actuarial losses of the plans, recorded in “Sundry income (expense) – net” in the consolidated statements of income and related to Corporate.

In the second quarter of 2024, 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.

These employees 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's funding policy is to contribute to the plans when pension laws and/or economics either require or encourage funding.

Total global pension contributions were $ 121 million in 2024, which includes contributions necessary to fund benefit payments for the Company's unfunded pension plans.

Additionally, in the second quarter of 2023, the Company received a pension plan reversion of approximately $ 90 million for a portion of the excess funding of one of its plans in Europe, included in "Other assets and liabilities, net" in the consolidated statements of cash flows.

Additionally, in the second quarter of 2024, the Company received a pension plan reversion of approximately $ 70 million (approximately $ 90 million in the second quarter of 2023) for a portion of the excess funding of one of its plans in Europe, included in "Other assets and liabilities, net" in the consolidated statements of cash flows.

The Company expects to contribute approximately $ 175 million to its pension plans in 2025.

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Rate of compensation increase 1

— % 4.25 % 4.25 % 4.25 % 4.25 %

Expected return on plan assets 7.07 % 7.46 % 7.95 %

The rate of compensation increase assumption is not relevant for the U.S.

Plans at December 31, 2024, due to the freezing of plan benefits.

What changed 10-K

Item 8. Financial Statements and Supplementary Data