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2024 Versus 2023
Packaging & Specialty Plastics net sales were $21,776 million in 2024, down 6 percent from net sales of $23,149 million in 2023, with local price down 4 percent, volume down 2 percent and currency flat. Local price decreased in Packaging and Specialty Plastics in all geographic regions, primarily driven by lower pricing of downstream polymers. Local price was flat in Hydrocarbons & Energy. Volume increased in Packaging and Specialty Plastics, primarily in EMEAI and the U.S. & Canada, due to higher downstream polymers and polyethylene demand. Volume decreased in Hydrocarbons & Energy in all geographic regions, led by EMEAI, primarily driven by higher internal derivative demand and lighter feedslate cracking.
Operating EBIT was $2,373 million in 2024, down $327 million from Operating EBIT of $2,700 million in 2023. Operating EBIT decreased primarily due to lower selling prices, lower volumes in Hydrocarbons & Energy, higher planned maintenance costs, and the impact of an unplanned ethylene facility outage, which were partially offset by lower raw material, energy and feedstock costs.
INDUSTRIAL INTERMEDIATES & INFRASTRUCTURE
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2024 Versus 2023
Industrial Intermediates & Infrastructure net sales were $11,869 million in 2024, down 5 percent from $12,538 million in 2023, with local price down 6 percent, volume up 1 percent and currency flat. Local price
decreased in both businesses and across all geographic regions, led by industrial and building and construction applications. Volume in Industrial Solutions increased, led by industrial and coatings applications, and in all geographic regions except the U.S. & Canada, which was flat, reflecting the impacts of an outage in 2023 at the Louisiana Operations Glycol-2 unit in Plaquemine, Louisiana, which successfully restarted in June 2024. Volume in Polyurethanes & Construction Chemicals decreased in all geographic regions, except EMEAI, driven by lower demand, particularly in consumer durables and industrial applications, which were partially offset by an increase in building and construction applications.
Operating EBIT was $125 million in 2024, up $1 million from Operating EBIT of $124 million in 2023. Operating EBIT increased primarily due to lower raw material and feedstock costs and improved results at the EQUATE and Sadara joint ventures, which were offset by lower selling prices in both businesses and the impact of an outage in 2023 at the Louisiana Operations Glycol-2 unit in Plaquemine, Louisiana, which successfully restarted in June 2024.
PERFORMANCE MATERIALS & COATINGS
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2024 Versus 2023
Performance Materials & Coatings net sales were $8,574 million in 2024, up 1 percent from net sales of $8,497 million in 2023, with volume up 5 percent, local price down 3 percent and an unfavorable currency impact of 1 percent. Volume increased in both businesses. In Coatings & Performance Monomers, volume increased in all geographic regions except EMEAI, led by acrylic monomers. Volume increased in Consumer Solutions in all geographic regions, primarily in downstream silicones, led by consumer and electronics and home and personal care applications. Local price decreased in both businesses and was broad-based. In Coatings & Performance Monomers, local price decreased in all geographic regions except Asia Pacific, and in Consumer Solutions local price decreased in all geographic regions. Currency was flat in Coatings & Performance Monomers and had an unfavorable impact on sales in Consumer Solutions, driven by Asia Pacific.
Operating EBIT was $318 million in 2024, up $99 million from Operating EBIT of $219 million in 2023. Operating EBIT increased primarily due to improved demand and higher operating rates, which were partially offset by lower selling prices and higher raw material costs.
CORPORATE
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1.The year ended December 31, 2024, includes restructuring charges and implementation and efficiency costs associated with the Company's 2023 Restructuring Program, gains associated with a previously impaired equity investment, impairment charges related to the write-down of certain manufacturing assets, a charge related to an arbitration settlement agreement for historical product claims from a divested business and activity related to the separation from DowDuPont. The year ended December 31, 2023, includes restructuring charges and implementation and efficiency costs associated with the Company's 2023 Restructuring Program, certain gains and losses associated with previously impaired equity investments, a loss associated with legacy agricultural products groundwater contamination matters, a gain associated with a legal matter with Nova Chemicals Corporation, foreign currency losses and inventory valuation impacts related to the devaluation of the Argentine peso, non-cash settlement charges related to the purchase of nonparticipating group annuity contracts for certain Company pension plans in the United States and Canada and activity related to the separation from DowDuPont. See Note 25 to the Consolidated Financial Statements for additional information.
Liquidity & Financial Flexibility
The Company’s primary source of incremental liquidity is cash flows from operating activities. The generation of cash from operations and the Company's ability to access capital markets is expected to meet the Company’s cash requirements for working capital, capital expenditures, debt maturities, contributions to pension plans, dividend distributions to stockholders, share repurchases and other needs. In addition to cash from operating activities, the Company’s current liquidity sources also include TDCC's U.S. and Euromarket commercial paper programs, committed and uncommitted credit facilities, committed and uncommitted accounts receivable facilities, a medium-term notes program, a U.S. retail note program (“InterNotes®”) and other debt markets.
The Company continues to maintain a strong financial position with all of its committed credit facilities undrawn and fully available at December 31, 2024. Cash and committed and available forms of liquidity were $12.0 billion at December 31, 2024, a decrease of $800 million from December 31, 2023. The Company also has no substantive long-term debt maturities due until 2027. Additional details on sources of liquidity are as follows:
Commercial Paper
TDCC issues promissory notes under its U.S. and Euromarket commercial paper programs. TDCC had no commercial paper outstanding at December 31, 2024 and 2023. TDCC maintains access to the commercial paper market at competitive rates. Amounts outstanding under TDCC's commercial paper programs during the period may be greater or less than the amount reported at the end of the period. Subsequent to December 31, 2024, TDCC issued commercial paper and had approximately $2.1 billion of commercial paper outstanding at February 4, 2025.
Committed Credit Facilities
The Company also has the ability to access liquidity through TDCC's committed and available credit facilities. At December 31, 2024, TDCC had total committed and available credit facilities of $8.4 billion. See Note 14 to the Consolidated Financial Statements for additional information on committed and available credit facilities.
Uncommitted Credit Facilities
The Company has entered into various uncommitted bilateral credit arrangements as a potential source of excess liquidity. These lines can be used to support short-term liquidity needs and for general purposes. The Company had no drawdowns outstanding at December 31, 2024.
Accounts Receivable Securitization Facilities
In addition to the above credit facilities, the Company maintains a committed accounts receivable facility in the United States where eligible trade accounts receivable, up to $900 million, may be sold at any point in time. The Company also maintains a committed accounts receivable facility in Europe where eligible trade accounts receivable, up to €500 million, may be sold at any point in time. In 2024, there were $290 million in sales of receivables under the U.S. and Europe committed accounts receivable facilities ($39 million in sales of receivables in 2023). At December 31, 2024, no material balances of sold receivables remained outstanding ($5 million remained outstanding at December 31, 2023).
In addition, the Company has an uncommitted accounts receivable facility in the United States providing additional liquidity. In 2024, sales of receivables under this facility were $378 million ($73 million in sales of receivables in 2023). At December 31, 2024, no material balances of sold receivables remained outstanding ($73 million remained outstanding at December 31, 2023). See Note 13 to the Consolidated Financial Statements for additional information.
Early Settlement of Letters of Credit
The Company utilizes, from time-to-time, letters of credit discounting programs to manage and expedite the settlement of letters of credit in certain regions. These letters of credit are associated with accounts receivable and the Company retains no interest in the transferred letters of credit or receivables once sold.
Accounts Receivable Discounting Facilities
The Company has access to accounts receivable discounting facilities, under which receivables are transferred with limited recourse. The Company retains no interest in the transferred receivables once sold. In 2024, sales of receivables under these facilities were $865 million ($91 million in sales of receivables in 2023). At December 31, 2024, approximately $287 million of sold receivables were outstanding ($91 million remained outstanding at December 31, 2023). See Note 13 to the Consolidated Financial Statements for additional information.
The Company maintains these facilities and also participates in certain customers’ supply chain financing and other early pay programs as a routine source of working capital.
Letters of Credit
TDCC utilizes letters of credit to support commitments made in the ordinary course of business. While the terms and amounts of letters of credit change, TDCC generally has approximately $600 million of outstanding letters of credit at any given time.
Company-Owned Life Insurance
The Company has investments in company-owned life insurance ("COLI") policies, which are recorded at their cash surrender value as of each balance sheet date. The Company has the ability to monetize its investment in its COLI policies as an additional source of liquidity. The Company had no outstanding monetization of its existing COLI policies' surrender value at December 31, 2024 ($97 million at December 31, 2023). See Note 6 to the Consolidated Financial Statements for additional information.
Shelf Registration - United States
On June 13, 2022, Dow Inc. and TDCC filed a shelf registration statement with the U.S. Securities and Exchange Commission. The shelf indicates that Dow Inc. may offer common stock; preferred stock; depositary shares; debt securities; guarantees; warrants to purchase common stock, preferred stock and debt securities; and stock purchase contracts and stock purchase units, with pricing and availability of any such offerings depending on market conditions. The shelf also indicates that TDCC may offer debt securities, guarantees and warrants to purchase debt securities, with pricing and availability of any such offerings depending on market conditions.
In 2022, TDCC filed a prospectus supplement under this shelf registration to register an undetermined amount of securities for issuance under InterNotes®. Also, in 2022, TDCC filed a prospectus supplement under this shelf registration to register an undetermined amount of securities for issuance under a medium-term notes program. In 2024, TDCC filed a prospectus supplement under this shelf registration to register $1.25 billion of securities for issuance in connection with its Green Finance Framework. The shelf registration expires on June 13, 2025. The Company expects to renew the shelf registration.
Debt
As the Company continues to maintain its strong balance sheet and financial flexibility, management is focused on net debt (a non-GAAP financial measure), as the Company believes this is the best representation of its financial leverage at this point in time. As shown in the following table, net debt is equal to total gross debt minus "Cash and cash equivalents" and "Marketable securities."
| | | | | | | | | | | | | | |
| Total Debt at Dec 31 | Dow Inc. | TDCC |
In millions | 2024 | 2023 | 2024 | 2023 |
| Notes payable | $ | 135 | $ | 62 | $ | 135 | $ | 62 |
| Long-term debt due within one year | 497 | 117 | 497 | 117 |
| Long-term debt | 15,711 | 14,907 | 15,711 | 14,907 |
| Gross debt | $ | 16,343 | $ | 15,086 | $ | 16,343 | $ | 15,086 |
| - Cash and cash equivalents | 2,189 | 2,987 | 2,189 | 2,987 |
- Marketable securities 1 | 383 | 1,300 | 383 | 1,300 |
| Net debt (non-GAAP) | $ | 13,771 | $ | 10,799 | $ | 13,771 | $ | 10,799 |
| Total equity | $ | 17,851 | $ | 19,108 | $ | 18,032 | $ | 19,406 |
| Gross debt as a percentage of total capitalization | 47.8 | % | 44.1 | % | 47.5 | % | 43.7 | % |
| Net debt as a percentage of total capitalization (non-GAAP) | 43.5 | % | 36.1 | % | 43.3 | % | 35.8 | % |
1.Included in "Other current assets" in the consolidated balance sheets.
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.
The Company may at any time repurchase certain debt securities in the open market or in privately negotiated transactions subject to: the applicable terms under which any such debt securities were issued, certain internal approvals of the Company, and applicable laws and regulations of the relevant jurisdiction in which any such potential transactions might take place. This in no way obligates the Company to make any such repurchases nor should it be considered an offer to do so.
TDCC’s public debt instruments and primary, private credit agreements contain, among other provisions, certain customary restrictive covenant and default provisions. TDCC’s most significant debt covenant with regard to its financial position is the obligation to maintain the ratio of its consolidated indebtedness to consolidated capitalization at no greater than 0.70 to 1.00 at any time the aggregate outstanding amount of loans under the Five Year Competitive Advance and Revolving Credit Facility Agreement ("Revolving Credit Agreement") equals or exceeds
$500 million. The ratio of TDCC’s consolidated indebtedness as defined in the Revolving Credit Agreement was 0.45 to 1.00 at December 31, 2024. Management believes TDCC was in compliance with all of its covenants and default provisions at December 31, 2024. For information on TDCC's debt covenants and default provisions, see Note 14. There were no material changes to the debt covenants and default provisions related to TDCC’s outstanding long-term debt and primary, private credit agreements in 2024.
Dow Inc. is obligated, substantially concurrently with the issuance of any guarantee in respect of outstanding or committed indebtedness under the Revolving Credit Agreement, to enter into a supplemental indenture with TDCC and the trustee under TDCC’s existing 2008 base indenture governing certain notes issued by TDCC. Under such supplemental indenture, Dow Inc. will guarantee all outstanding debt securities and all amounts due under such existing base indenture and will become subject to certain covenants and events of default under the existing base indenture.
In addition, the Revolving Credit Agreement includes an event of default which would be triggered in the event Dow Inc. incurs or guarantees third party indebtedness for borrowed money in excess of $250 million or engages in any material activity or directly owns any material assets, in each case, subject to certain conditions and exceptions. Dow Inc. may, at its option, cure the event of default by delivering an unconditional and irrevocable guarantee to the administrative agent within thirty days of the event or events giving rise to such event of default.
No such events have occurred or have been triggered at the time of the filing of this Annual Report on Form 10-K. See Note 14 to the Consolidated Financial Statements for information related to TDCC’s notes payable and long-term debt activity and information on TDCC’s debt covenants and default provisions.
While taking into consideration the current economic environment, management expects that the Company will continue to have sufficient liquidity and financial flexibility to meet all of its business obligations.
Credit Ratings
TDCC's credit ratings at January 31, 2025 were as follows:
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| Credit Ratings | Long-Term Rating | Short-Term Rating | Outlook |
| Fitch Ratings | BBB+ | F1 | Stable |
| Moody’s Ratings | Baa1 | P-2 | Negative |
| Standard & Poor’s | BBB | A-2 | Stable |
Fitch Ratings affirmed TDCC's BBB+ and F1 rating and its outlook of stable on July 1, 2024. Standard & Poor's affirmed TDCC's BBB and A-2 rating and its outlook of stable on July 1, 2024 and December 9, 2024. Moody's Ratings affirmed TDCC's Baa1 and P-2 rating and its outlook of stable on August 6, 2024, and re-affirmed TDCC's Baa1 and P-2 rating and revised its outlook to negative from stable on October 28, 2024. These credit agencies' decisions were made as part of their annual review process and reflect the Company's supportive financial policies, scale, liquidity and cost-advantaged footprint.
Dividends
Dow Inc.
Dow Inc. has paid dividends on a quarterly basis and expects to continue to do so, subject to approval by the Board. The dividends declared by the Board align to the Company's strategy announced in 2018 of returning approximately 45 percent of Operating Net Income to shareholders through dividends and total shareholder remuneration of approximately 65 percent, when including share repurchases, over the economic cycle. The Company defines Operating Net Income, a non-GAAP measure, as "Net income available for Dow Inc. common stockholders," excluding the impact of significant items. The following tables provide information on dividends declared and paid to common stockholders:
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| Total current liabilities | | | | |
| Long-Term Debt | | | | |
| Other Noncurrent Liabilities | | |
| Deferred income tax liabilities | | | | |
| Pension and other postretirement benefits - noncurrent | | | | |
| Asbestos-related liabilities - noncurrent | | | | |
| Operating lease liabilities - noncurrent | | | | |
| Other noncurrent obligations | | | | |
| Total other noncurrent liabilities | | | | |
| Stockholders’ Equity | | |
Common stock (authorized shares of $ par value each; issued 2024: shares; 2023: shares) | | | | |
| Additional paid-in capital | | | | |
| Retained earnings | | | | |
| Accumulated other comprehensive loss | () | | () | |
Treasury stock at cost (2024: shares; 2023: shares) | () | | () | |
| Dow Inc.’s stockholders’ equity | | | | |
| Noncontrolling interests | | | | |
| Total equity | | | | |
| Total Liabilities and Equity | $ | | | $ | | |
See Notes to the Consolidated Financial Statements.
Dow Inc. and Subsidiaries
Consolidated Statements of Cash Flows
| | | | | | | | | | | |
| (In millions) For the years ended Dec 31, | 2024 | 2023 | 2022 |
| Operating Activities | | | |
| Net income | $ | | | $ | | | $ | | |
| Adjustments to reconcile net income to net cash provided by operating activities: | | | |
| Depreciation and amortization | | | | | | |
| Provision (credit) for deferred income tax | | | () | | | |
| Earnings of nonconsolidated affiliates less than dividends received | | | | | | |
| Net periodic pension benefit cost (credit) | () | | | | | |
| Pension contributions | () | | () | | () | |
| Net gain on sales of assets, businesses and investments | () | | () | | () | |
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| Restructuring and asset related charges - net | | | | | | |
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| Other net loss | | | | | | |
| Changes in assets and liabilities, net of effects of acquired and divested companies: | | | |
| Accounts and notes receivable | () | | | | | |
| Inventories | () | | | | | |
| Accounts payable | | | () | | () | |
| Other assets and liabilities, net | () | | () | | () | |
| Cash provided by operating activities - continuing operations | | | | | | |
| Cash provided by (used for) operating activities - discontinued operations | | | | | () | |
| Cash provided by operating activities | | | | | | |
| Investing Activities | | | |
| Capital expenditures | () | | () | | () | |
| Investment in gas field developments | () | | () | | () | |
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| Purchases of previously leased assets | | | () | | () | |
| Proceeds from sales of property, businesses and consolidated companies, net of cash divested | | | | | | |
| Acquisitions of property and businesses, net of cash acquired | () | | () | | () | |
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| Investments in and loans to nonconsolidated affiliates | () | | () | | () | |
| Distributions and loan repayments from nonconsolidated affiliates | | | | | | |
| Proceeds from sales of ownership interests in nonconsolidated affiliates | | | | | | |
| Purchases of investments | () | | () | | () | |
| Proceeds from sales and maturities of investments | | | | | | |
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| Other investing activities, net | () | | () | | () | |
| Cash used for investing activities | () | | () | | () | |
| Financing Activities | | | |
| Changes in short-term notes payable | () | | () | | | |
| Proceeds from issuance of short-term debt greater than three months | | | | | | |
| Payments on short-term debt greater than three months | () | | | | () | |
| Proceeds from issuance of long-term debt | | | | | | |
| Payments on long-term debt | () | | () | | () | |
| Collections on securitization programs, net of remittances | () | | | | | |
| Purchases of treasury stock | () | | () | | () | |
| Proceeds from issuance of stock | | | | | | |
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| Transaction financing, debt issuance and other costs | () | | () | | () | |
| Employee taxes paid for share-based payment arrangements | () | | () | | () | |
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| Distributions to noncontrolling interests | () | | () | | () | |
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| Dividends paid to stockholders | () | | () | | () | |
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| Cash used for financing activities | () | | () | | () | |
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | () | | () | | () | |
| Summary | | | |
| Increase (decrease) in cash, cash equivalents and restricted cash | () | | () | | | |
| Cash, cash equivalents and restricted cash at beginning of year | | | | | | |
| Cash, cash equivalents and restricted cash at end of year | $ | | | $ | | | $ | | |
| Less: Restricted cash and cash equivalents, included in "Other current assets" | | | | | | |
| Cash and cash equivalents at end of year | $ | | | $ | | | $ | | |
See Notes to the Consolidated Financial Statements.
Dow Inc. and Subsidiaries
Consolidated Statements of Equity
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| (In millions, except per share amounts) For the years ended Dec 31, | 2024 | 2023 | 2022 |
| Common Stock | | | |
| Balance at beginning and end of year | $ | | | $ | | | $ | | |
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| Additional Paid-in Capital | | | |
| Balance at beginning of year | | | | | | |
| Common stock issued / sold | | | | | | |
| Stock-based compensation and allocation of ESOP shares | | | | | | |
| Treasury stock issuances - compensation and benefit plans | () | | () | | () | |
| Other | | | | | () | |
| Balance at end of year | | | | | | |
| Retained Earnings | | | |
| Balance at beginning of year | | | | | | |
| Net income available for Dow Inc.'s common stockholders | | | | | | |
| Dividends to stockholders | () | | () | | () | |
| Common control transaction | | | | | | |
| Other | () | | () | | () | |
| Balance at end of year | | | | | | |
| Accumulated Other Comprehensive Loss | | | |
| Balance at beginning of year | () | | () | | () | |
| Other comprehensive income (loss) | () | | () | | | |
| Balance at end of year | () | | () | | () | |
| Unearned ESOP Shares | | | |
| Balance at beginning of year | | | | | () | |
| Allocation of ESOP shares | | | | | | |
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| Balance at end of year | | | | | | |
| Treasury Stock | | | |
| Balance at beginning of year | () | | () | | () | |
| Treasury stock purchases | () | | () | | () | |
| Treasury stock issuances - compensation and benefit plans | | | | | | |
| Balance at end of year | () | | () | | () | |
| Dow Inc.'s stockholders' equity | | | | | | |
| Noncontrolling Interests | | | | | | |
| Total Equity | $ | | | $ | | | $ | | |
| | | |
| Dividends declared per share of common stock | $ | | | $ | | | $ | | |
See Notes to the Consolidated Financial Statements.
The Dow Chemical Company and Subsidiaries
Consolidated Statements of Income
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| (In millions) For the years ended Dec 31, | 2024 | 2023 | 2022 |
| Net sales | $ | | | $ | | | $ | | |
| Cost of sales | | | | | | |
| Research and development expenses | | | | | | |
| Selling, general and administrative expenses | | | | | | |
| Amortization of intangibles | | | | | | |
| Restructuring and asset related charges - net | | | | | | |
| Equity in earnings (losses) of nonconsolidated affiliates | () | | () | | | |
| Sundry income (expense) - net | | | () | | | |
| Interest income | | | | | | |
| Interest expense and amortization of debt discount | | | | | | |
| Income before income taxes | | | | | | |
| Provision (credit) for income taxes | | | () | | | |
| Net income | | | | | | |
| Net income attributable to noncontrolling interests | | | | | | |
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| The Dow Chemical Company’s stockholder's equity | | | | |
| Noncontrolling interests | | | | |
| Total equity | | | | |
| Total Liabilities and Equity | $ | | | $ | | |
See Notes to the Consolidated Financial Statements.
The Dow Chemical Company and Subsidiaries
Consolidated Statements of Cash Flows
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| (In millions) For the years ended Dec 31, | 2024 | 2023 | 2022 |
| Operating Activities | | | |
| Net income | $ | | | $ | | | $ | | |
| Adjustments to reconcile net income to net cash provided by operating activities: | | | |
| Depreciation and amortization | | | | | | |
| Provision (credit) for deferred income tax | | | () | | | |
| Earnings of nonconsolidated affiliates less than (in excess of) dividends received | | | | | | |
| Net periodic pension benefit cost (credit) | () | | | | | |
| Pension contributions | () | | () | | () | |
| Net gain on sales of assets, businesses and investments | () | | () | | () | |
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| Restructuring and asset related charges - net | | | | | | |
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| Other net loss | | | | | | |
| Changes in assets and liabilities, net of effects of acquired and divested companies: | | | |
| Accounts and notes receivable | () | | | | | |
| Inventories | () | | | | | |
| Accounts payable | | | () | | () | |
| Other assets and liabilities, net | () | | () | | () | |
| Cash provided by operating activities | | | | | | |
| Investing Activities | | | |
| Capital expenditures | () | | () | | () | |
| Investment in gas field developments | () | | () | | () | |
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| Purchases of previously leased assets | | | () | | () | |
| Proceeds from sales of property, businesses and consolidated companies, net of cash divested | | | | | | |
| Acquisitions of property and businesses, net of cash acquired | () | | () | | () | |
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| Investments in and loans to nonconsolidated affiliates | () | | () | | () | |
| Distributions and loan repayments from nonconsolidated affiliates | | | | | | |
| Proceeds from sales of ownership interests in nonconsolidated affiliates | | | | | | |
| Purchases of investments | () | | () | | () | |
| Proceeds from sales and maturities of investments | | | | | | |
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| Other investing activities, net | () | | () | | () | |
| Cash used for investing activities | () | | () | | () | |
| Financing Activities | | | |
| Changes in short-term notes payable | () | | () | | | |
| Proceeds from issuance of short-term debt greater than three months | | | | | | |
| Payments on short-term debt greater than three months | () | | | | () | |
| Proceeds from issuance of long-term debt | | | | | | |
| Payments on long-term debt | () | | () | | () | |
| Collections on securitization programs, net of remittances | () | | | | | |
| Proceeds from issuance of stock | | | | | | |
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| Transaction financing, debt issuance and other costs | () | | () | | () | |
| Employee taxes paid for share-based payment arrangements | () | | () | | () | |
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| Distributions to noncontrolling interests | () | | () | | () | |
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| Dividends paid to Dow Inc. | () | | () | | () | |
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| Cash used for financing activities | () | | () | | () | |
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | () | | () | | () | |
| Summary | | | |
| Increase (decrease) in cash, cash equivalents and restricted cash | () | | () | | | |
| Cash, cash equivalents and restricted cash at beginning of year | | | | | | |
| Cash, cash equivalents and restricted cash at end of year | $ | | | $ | | | $ | | |
| Less: Restricted cash and cash equivalents, included in "Other current assets" | | | | | | |
| Cash and cash equivalents at end of year | $ | | | $ | | | $ | | |
See Notes to the Consolidated Financial Statements.
The Dow Chemical Company and Subsidiaries
Consolidated Statements of Equity
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| (In millions, except per share amounts) For the years ended Dec 31, | 2024 | 2023 | 2022 |
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| Common Stock | | | |
| Balance at beginning and end of year | $ | | | $ | | | $ | | |
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| Additional Paid-in Capital | | | |
| Balance at beginning of year | | | | | | |
|
| Issuance of parent company stock - Dow Inc. | | | | | | |
| Stock-based compensation and allocation of ESOP shares | | | | | | |
| Other | () | | | | () | |
| Balance at end of year | | | | | | |
| Retained Earnings | | | |
| Balance at beginning of year | | | | | | |
| Net income available for The Dow Chemical Company's common stockholder | | | | | | |
| Dividends to Dow Inc. | () | | () | | () | |
| Other | () | | () | | () | |
| Balance at end of year | | | | | | |
| Accumulated Other Comprehensive Loss | | | |
| Balance at beginning of year | () | | () | | () | |
| Other comprehensive income (loss) | () | | () | | | |
|
|
| Balance at end of year | () | | () | | () | |
| Unearned ESOP Shares | | | |
| Balance at beginning of year | | | | | () | |
| Allocation of ESOP shares | | | | | | |
|
| Balance at end of year | | | | | | |
|
|
|
|
|
|
|
| The Dow Chemical Company's stockholder's equity | | | | | | |
| Noncontrolling Interests | | | | | | |
| Total Equity | $ | | | $ | | | $ | | |
See Notes to the Consolidated Financial Statements.
| | |
Dow Inc. and Subsidiaries
The Dow Chemical Company and Subsidiaries |
| Notes to the Consolidated Financial Statements |
Table of Contents
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1.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.
2.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 –
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 $ million, property with a net book value of $ million, and goodwill of $ million. The Company recognized a pretax gain of $ 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 $ 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 $ million and intangible assets, primarily technology and know-how, of $ million, with the excess of purchase price over the fair value of net assets acquired of $ million allocated to goodwill.
NOTE 5 –
million in the first quarter of 2023, additional pretax restructuring charges of $ million in the second quarter of 2023, and a $ million net credit adjustment in the fourth quarter of 2023.
In the first quarter of 2024, the Company recorded additional pretax restructuring charges of $ 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 $ 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 $ million for severance and related benefit costs and a pretax restructuring charge of $ 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 $ million for severance and related benefit costs and a pretax restructuring charge of $ million for costs associated with exit and disposal activities, related to Corporate.
| $ | | | $ | | | $ | | |
| Industrial Intermediates & Infrastructure | | | | | | | | |
| Performance Materials & Coatings | | | | | | | | |
| Corporate | | | | | | | | |
| Total restructuring charges | $ | | | $ | | | $ | | | $ | | |
| Charges against the reserve | | | () | | | | () | |
| Cash payments | () | | | | | | () | |
| Reserve balance at Dec 31, 2023 | $ | | | $ | | | $ | | | $ | | |
| Packaging & Specialty Plastics | $ | | | $ | | | $ | | | $ | | |
| Industrial Intermediates & Infrastructure | | | | | | | | |
| Performance Materials & Coatings | | | | | | | | |
| Corporate | | | | | | | | |
| Total restructuring charges | $ | | | $ | | | $ | | | $ | | |
| Charges against the reserve | | | () | | () | | () | |
| Cash payments | () | | | | | | () | |
| Reserve balance at Dec 31, 2024 | $ | | | $ | | | $ | | | $ | | |
At December 31, 2024, $ million of the reserve balance was included in "Accrued and other current liabilities" ($ million at December 31, 2023) and was included in "Other noncurrent obligations" ($ million at December 31, 2023) in the consolidated balance sheets.
The Company recorded pretax restructuring charges of $ million inception-to-date under the 2023 Restructuring Program, consisting of severance and related benefit costs of $ million, asset write-downs and write-offs of $ million, and costs associated with exit and disposal activities of $ million.
million for a global workforce reduction of approximately employees. 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
The 2023 Restructuring Program included charges related to the write-down and write-off of assets totaling $ million. Details regarding the asset write-downs and write-offs are as follows:
•Industrial Intermediates & Infrastructure charges relate to the shutdown of certain polyurethanes assets and the write-off of other assets. The majority of the impacted facilities are expected to be shutdown by the end of 2025.
•Performance Materials & Coatings recorded charges to rationalize its asset footprint by shutting down certain coatings assets. These facilities are expected to be shutdown by the end of 2025.
•Corporate recorded charges related to the write-down of Company owned and leased, non-manufacturing facilities, primarily related to office space rationalization.
Costs Associated with Exit and Disposal Activities
The 2023 Restructuring program included a net pretax charge of $ 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 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 $ million, primarily through the first quarter of 2025. Restructuring implementation and efficiency costs totaled $ million in 2024 ($ million in 2023).
Asset Related Charges
In 2024, the Company recognized pretax impairment charges of $ 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 $ million in Corporate related to a prior restructuring program.
In 2022, the Company recorded pretax asset related charges of $ million due to the Russia and Ukraine conflict and the expectation that certain assets would not be recoverable. These charges included the write-down of inventory, the recording of bad debt reserves and the impairment of other assets. Asset related charges by segment in 2022 were as follows: $ million in Packaging & Specialty Plastics, $ million in Industrial Intermediates & Infrastructure, $ million in Performance Materials & Coatings and $ 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 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 $ million to $ 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 $ million to $ million over the life of the program.
NOTE 6 –
| $ | () | | $ | | | Foreign exchange losses 2 | () | | () | | () | |
Gain on sales of other assets and investments 3 | | | | | | |
Gain (loss) on early extinguishment of debt 4 | | | | | () | |
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 | | | | | | |
| Other - net | | | | | | |
| Total sundry income (expense) – net | $ | | | $ | () | | $ | | | 1.The year ended December 31, 2023, includes pretax pension settlement charges of $ million related to the transfer of certain plan benefit obligations to insurance companies. See Note 19 for additional information about the Company's pension and other postretirement plans, including pension settlement charges.
2.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 $ million related to the devaluation of the Argentine peso by the Argentina government in December 2023.
3.The year ended December 31, 2024, includes a gain of $ 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.
4.See Note 14 for additional information.
5.Primarily related to charges associated with agreements entered into with DuPont de Nemours, Inc. ("DuPont") and Corteva, Inc. ("Corteva") as part of the separation and distribution.
6.The year ended December 31, 2024 and 2023, includes certain obligations and subsequent reversals associated with a previously impaired equity method investment.
7.See Note 15 for additional information.
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, Sundry income (expense) - net for TDCC is not disclosed separately.
| $ | | |
Less: Existing drawdowns 1 | | | | |
|
|
|
|
Accrued and Other Current Liabilities
“Accrued and other current liabilities” were $ million and $ million at December 31, 2024 and $ million and $ million at December 31, 2023, for Dow Inc. and TDCC, respectively. 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 $ 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
| $ | | | $ | | |
| Income taxes | $ | | | $ | | | $ | | |
NOTE 7 –
| $ | () | | $ | | | | Foreign | | | | | | |
| Income before income taxes | $ | | | $ | | | $ | | |
| Current tax expense (benefit) | | | |
| Federal | $ | () | | $ | | | $ | | |
| State and local | | | | | | |
| Foreign | | | | | | |
| Total current tax expense | $ | | | $ | | | $ | | |
| Deferred tax expense (benefit) | | | |
| Federal | $ | | | $ | () | | $ | | |
| State and local | | | | | | |
| Foreign | () | | () | | | |
| Total deferred tax expense (benefit) | $ | | | $ | () | | $ | | |
| Provision (credit) for income taxes | $ | | | $ | () | | $ | | |
| Net income | $ | | | $ | | | $ | | |
% | | % | | % | | Equity earnings effect | | | | | () | |
| Foreign income taxed at rates other than the statutory U.S. federal income tax rate | | | | | () | |
| U.S. tax effect of foreign earnings and dividends | | | () | | | |
| Unrecognized tax benefits | () | | | | | |
| Changes in valuation allowances | () | | | | () | |
| Federal tax accrual adjustment | () | | () | | | |
| State and local income taxes | | | | | | |
Change in tax basis in foreign assets 2 | | | () | | | |
| Foreign permanent items | () | | () | | () | |
| Other - net | | | | | | |
| Effective tax rate | | % | () | % | | % |
1.Certain prior year rates have been adjusted to conform with the current year presentation.
2.The 2023 impact primarily represents the initial recognition of tax basis in intangible assets in foreign jurisdictions and the related valuation allowance.
| $ | | | $ | | | $ | | | | Tax loss and credit carryforwards | | | — | | | | — | |
| Postretirement benefit obligations | | | | | | | | |
| Other accruals and reserves | | | | | | | | |
| Intangibles | | | | | | | | |
| Inventory | | | | | | | | |
|
| Investments | | | | | | | | |
|
| Other – net | | | | | | | | |
| Subtotal | $ | | | $ | | | $ | | | $ | | |
| Valuation allowances | () | | — | | () | | — | |
| Total | $ | | | $ | | | $ | | | $ | | |
| $ | | | | Expire after 5 years or indefinite expiration | | | | |
| Total operating loss carryforwards | $ | | | $ | | |
| Tax credit carryforwards | | |
| Expire within 5 years | $ | | | $ | | |
| Expire after 5 years or indefinite expiration | | | | |
| Total tax credit carryforwards | $ | | | $ | | |
| Capital loss carryforwards | | |
| Expire within 5 years | $ | | | $ | | |
| Total tax loss and tax credit carryforwards | $ | | | $ | | |
Undistributed earnings of foreign subsidiaries and related companies that are deemed to be permanently invested amounted to $ million at December 31, 2024 and $ million at December 31, 2023. Undistributed earnings are subject to certain taxes upon repatriation, primarily where foreign withholding taxes apply. It is not practicable to calculate the unrecognized deferred tax liability on undistributed earnings.
| $ | | | $ | | | | Decreases related to positions taken on items from prior years | () | | () | | () | |
| Increases related to positions taken on items from prior years | | | | | | |
| Increases related to positions taken in the current year | | | | | | |
| Settlement of uncertain tax positions with tax authorities | () | | () | | () | |
| Decreases due to expiration of statutes of limitations | () | | () | | | |
| Foreign exchange loss (gain) | () | | | | () | |
| Total unrecognized tax benefits at Dec 31 | $ | | | $ | | | $ | | |
| Total unrecognized tax benefits that, if recognized, would impact the effective tax rate | $ | | | $ | | | $ | | |
| Total amount of interest and penalties expense (benefit) recognized in "Provision (credit) for income taxes" | $ | () | | $ | | | $ | () | |
| Total accrual for interest and penalties recognized in the consolidated balance sheets | $ | | | $ | | | $ | | |
The Company files tax returns in multiple jurisdictions. These returns are subject to examination and possible challenge by the tax authorities. Open years contain matters that could be subject to differing interpretations of applicable tax laws and regulations as they relate to the amount, character, timing or inclusion of revenue and expenses or the sustainability of income tax credits for a given audit cycle. The ultimate resolution of such uncertainties is not expected to have a material impact on the Company's results of operations. The earliest open tax years are for state income taxes and for federal income taxes in the United States and for taxes in foreign jurisdictions.
NOTE 8 -
| $ | | | $ | | | | Net income attributable to noncontrolling interests | | | | | | |
|
Net income attributable to participating securities 1 | | | | | | |
| Net income attributable to common stockholders | $ | | | $ | | | $ | | |
1.Restricted stock units are considered participating securities due to the Company's practice of paying dividend equivalents on unvested shares.
| | | | | | | | | | | |
| Earnings Per Share - Basic and Diluted | 2024 | 2023 | 2022 |
| Dollars per share |
| Earnings per common share - basic | $ | | | $ | | | $ | | |
| Earnings per common share - diluted | $ | | | $ | | | $ | | |
| | | | | | Plus dilutive effect of equity compensation plans | | | | | | |
| Weighted-average common shares outstanding - diluted | | | | | | |
Stock options and restricted stock units excluded from EPS calculations 1 | | | | | | |
1.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 –
| $ | | | | Work in process | | | | |
| Raw materials | | | | |
| Supplies | | | | |
| Total | $ | | | $ | | |
| Adjustment of inventories to the LIFO basis | () | | () | |
| Total inventories | $ | | | $ | | |
percent, percent and percent of the Company's inventories were accounted for under the LIFO, FIFO and average cost methods, respectively. At December 31, 2023, approximately percent, percent and percent of the Company's inventories were accounted for under the LIFO, FIFO and average cost methods, respectively.
NOTE 10 –
-$ | | | $ | | | | Buildings | - | | | | |
| Machinery and equipment | - | | | | |
| Other property | - | | | | |
| Construction in progress | — | | | | | |
| Total property | | $ | | | $ | | |
| | | | | | | | | | | |
| In millions | 2024 | 2023 | 2022 |
| Depreciation expense | $ | | | $ | | | $ | | |
| Capitalized interest | $ | | | $ | | | $ | | |
NOTE 11 –
| $ | | | | Other noncurrent obligations | () | | () | |
| Net investment in nonconsolidated affiliates | $ | | | $ | | |
1.The carrying amount of the Company’s investments in nonconsolidated affiliates at December 31, 2024 and 2023, was $ 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 |
| In millions |
Dividends from nonconsolidated affiliates 1 | $ | | | $ | | | $ | | |
1.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.
Sadara
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 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 $ million less than Dow’s proportionate share of the carrying value of the underlying net assets held by Sadara at December 31, 2024 ($ 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, 2024, the Company had a negative investment balance in Sadara of $ million classified as "Other noncurrent obligations" (negative $ 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.
EQUATE
At December 31, 2024, the Company had a negative investment balance in EQUATE of $ million classified as "Other noncurrent obligations" (negative $ 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 $ million less than the Company's proportionate share of EQUATE's underlying net assets at December 31, 2024 ($ 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 $ million at December 31, 2024 ($ million at December 31, 2023), is being amortized over the remaining useful lives of the assets and the remainder is considered a permanent difference.
AgroFresh Solutions Inc. ("AFSI")
As of March 31, 2023, the Company no longer holds an investment in AFSI.
percent of total net sales in 2024, 2023 and 2022. Sales of ethylene to MEGlobal are reflected in the Packaging & Specialty Plastics segment and represented percent of the segment's sales in 2024, 2023 and 2022. Sales of ethylene glycol to MEGlobal are reflected in the Industrial Intermediates & Infrastructure segment and represented percent of the segment's sales in 2024, 2023 and 2022.
The Company is responsible for marketing the majority of Sadara products outside of the Middle East zone through the Company’s established sales channels. Under this arrangement, the Company purchases and sells Sadara products for a marketing fee. Purchases of Sadara products represented percent of "Cost of sales" in 2024 ( percent in 2023 and percent in 2022).
The Company purchases products from The SCGC-Dow Group, primarily for marketing and distribution in Asia Pacific. Purchases of products from The SCGC-Dow Group represented percent of "Cost of sales" in 2024, 2023 and 2022.
Sales to and purchases from other nonconsolidated affiliates were not material to the consolidated financial statements.
| $ | | | |
|
|
| Accounts payable - Other | $ | | | $ | | |
Principal Nonconsolidated Affiliates
The Company had an ownership interest in nonconsolidated affiliates at December 31, 2024 and 2023.
% | | % | | % |
| The Kuwait Olefins Company K.S.C.C. | Kuwait | | % | | % | | % |
| The Kuwait Styrene Company K.S.C.C. | Kuwait | | % | | % | | % |
Map Ta Phut Olefins Company Limited 1 | Thailand | | % | | % | | % |
|
| Sadara Chemical Company | Saudi Arabia | | % | | % | | % |
| The SCGC-Dow Group: | | | | |
| Siam Polyethylene Company Limited | Thailand | | % | | % | | % |
| Siam Polystyrene Company Limited | Thailand | | % | | % | | % |
| Siam Styrene Monomer Company Limited | Thailand | | % | | % | | % |
| Siam Synthetic Latex Company Limited | Thailand | | % | | % | | % |
| 1.The Company's effective ownership of Map Ta Phut Olefins Company Limited ("Map Ta Phut") is percent, of which the Company directly owns percent and indirectly owns percent through its equity interest in Siam Polyethylene Company Limited.
| $ | | |
| Other noncurrent obligations | () | | () | |
| Net investment in principal nonconsolidated affiliates | $ | | | $ | | |
| | | | | | | | | | | |
| Equity in Earnings (Losses) of Principal Nonconsolidated Affiliates | 2024 | 2023 | 2022 |
| In millions |
| Equity in earnings (losses) of principal nonconsolidated affiliates | $ | () | | $ | () | | $ | | |
percent) of the principal nonconsolidated affiliates.
| | | | | | | | |
| Summarized Balance Sheet Information at Dec 31 | 2024 | 2023 |
| In millions |
| Current assets | $ | | | $ | | |
| Noncurrent assets | | | | |
| Total assets | $ | | | $ | | |
| Current liabilities | $ | | | $ | | |
| Noncurrent liabilities | | | | |
| Total liabilities | $ | | | $ | | |
| Noncontrolling interests | $ | | | $ | | |
| $ | | | $ | | | | Gross profit | $ | | | $ | | | $ | | |
| Income (loss), net of tax | $ | () | | $ | () | | $ | () | |
1.The results in this table include purchase and sale activity between certain principal nonconsolidated affiliates and the Company, as previously discussed in the "Transactions with Nonconsolidated Affiliates" section.
NOTE 12 –
| $ | | | $ | | | $ | | | | Foreign currency impact | | | | | () | | () | |
|
|
| Balance at Dec 31, 2023 | $ | | | $ | | | $ | | | $ | | |
| Foreign currency impact | () | | () | | () | | () | |
| Purchase of Circulus Holdings, LLC | | | | | | | | |
| Sale of laminating adhesives business | () | | | | | | () | |
| Balance at Dec 31, 2024 | $ | | | $ | | | $ | | | $ | | |
The Company has six reporting units in total: Coatings & Performance Monomers, Consumer Solutions, Hydrocarbons & Energy, Industrial Solutions, Packaging and Specialty Plastics and Polyurethanes & Construction
million in Industrial Intermediates & Infrastructure and $ million in Performance Materials & Coatings.
Goodwill Impairment Testing
The Company performs an impairment test of goodwill annually in the fourth quarter. 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 reporting unit in 2024 ( 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
| $ | () | | $ | | | $ | | | $ | () | | $ | | | | Software | | | () | | | | | | () | | | |
| Trademarks/tradenames | | | () | | | | | | () | | | |
| Customer-related | | | () | | | | | | () | | | |
| | |
| Total other intangible assets | $ | | | $ | () | | $ | | | $ | | | $ | () | | $ | | |
| $ | | | $ | | | | Software, included in "Cost of sales" | $ | | | $ | | | $ | | |
| | 2026 | $ | | |
| 2027 | $ | | |
| 2028 | $ | | |
| 2029 | $ | | |
NOTE 13 –
million for the U.S. committed facility and up to € 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.
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.
| $ | | | $ | | | |
$ | |
| Accounts receivable derecognized | $ | | $ | |
| Amounts recognized in the consolidated balance sheets: | | |
|
Accrued and other current liabilities 1 | $ | | $ | |
NOTE 14 –
| $ | | | |
|
|
| Year-end average interest rates | | % | | % |
% | $ | | | | % | $ | | | | Final maturity 2028 | | % | | | | % | | |
| Final maturity 2029 | | % | | | | % | | |
Final maturity 2030 and thereafter 1 | | % | | | | % | | |
| Other facilities: | | | | |
|
| Foreign currency notes and loans, various rates and maturities | | % | | | | % | | |
InterNotes®, varying maturities through 2053 | | % | | | | % | | |
| Medium-term notes, maturity 2025 | | % | | | | % | | |
|
|
| | | $ | | | | |
Letters of Credit
The Company utilizes letters of credit to support commitments made in the ordinary course of business. While the terms and amounts of letters of credit change, the Company generally has approximately $ million of outstanding letters of credit at any given time.
to 1.00 at any time the aggregate outstanding amount of loans under the Five Year Competitive Advance and Revolving Credit Facility Agreement ("Revolving Credit Agreement") dated November 23, 2021, equals or exceeds $ million,(b)a default if TDCC or an applicable subsidiary fails to make any payment, including principal, premium or interest, under the applicable agreement on other indebtedness of, or guaranteed by, TDCC or such applicable subsidiary in an aggregate amount of $ million or more when due, or any other default or other event under the applicable agreement with respect to such indebtedness occurs which permits or results in the acceleration of $ million or more in the aggregate of principal, and
(c)a default if TDCC or any applicable subsidiary fails to discharge or stay within 60 days after the entry of a final judgment against TDCC or such applicable subsidiary of more than $ million.
Failure of TDCC to comply with any of the covenants or default provisions could result in a default under the applicable credit agreement which would allow the lenders to not fund future loan requests and to accelerate the due date of the outstanding principal and accrued interest on any outstanding indebtedness.
Dow Inc. is obligated, substantially concurrently with the issuance of any guarantee in respect of outstanding or committed indebtedness under TDCC's Revolving Credit Agreement, to enter into a supplemental indenture with TDCC and the trustee under TDCC’s existing 2008 base indenture governing certain notes issued by TDCC. Under such supplemental indenture, Dow Inc. will guarantee all outstanding debt securities and all amounts due under such existing base indenture and will become subject to certain covenants and events of default under the existing base indenture.
In addition, the Revolving Credit Agreement includes an event of default which would be triggered in the event Dow Inc. incurs or guarantees third party indebtedness for borrowed money in excess of $ million or engages in any material activity or directly owns any material assets, in each case, subject to certain conditions and exceptions. Dow Inc. may, at its option, cure the event of default by delivering an unconditional and irrevocable guarantee to the administrative agent within thirty days of the event or events giving rise to such event of default.
No such events have occurred or have been triggered at the time of the filing of this Annual Report on Form 10-K.
NOTE 15 –
million for probable environmental remediation and restoration costs ($ million at December 31, 2023), including $ million for the remediation of Superfund sites ($ million at December 31, 2023). This is management’s best estimate of the costs for remediation and restoration with respect to environmental matters for which the Company has accrued liabilities, although it is reasonably possible that the ultimate cost with respect to these particular matters could range up to approximately two times that amount. Consequently, it is reasonably possible that environmental remediation and restoration costs in excess of amounts accrued could have a material impact on the Company’s results of operations, financial condition and cash flows. It is the opinion of the Company’s management, however, that the possibility is remote that costs in excess of the range disclosed will have a material impact on the Company’s results of operations, financial condition or cash flows. Inherent uncertainties exist in these estimates primarily due to unknown conditions, changing governmental regulations and legal standards regarding liability, and emerging remediation technologies for handling site remediation and restoration. As new or additional information becomes available and/or certain spending trends become known, management will evaluate such information in determination of the current estimate of the environmental liability.
| $ | | | | Accrual adjustment | | | | |
| Payments against reserve | () | | () | |
| Foreign currency impact | () | | | |
| Balance at Dec 31 | $ | | | $ | | |
The amounts charged to income on a pretax basis related to environmental remediation totaled $ million in 2024, $ million in 2023 and $ million in 2022. Capital expenditures for environmental protection were $ million in 2024, $ million in 2023 and $ million in 2022.
Midland Off-Site Environmental Matters
On June 12, 2003, the Michigan Department of Environmental Quality ("MDEQ") issued a Hazardous Waste Operating License (the "License") to the Company’s Midland, Michigan, manufacturing site (the “Midland Site”), which was renewed and replaced by the MDEQ on September 25, 2015, and included provisions requiring the Company to conduct an investigation to determine the nature and extent of off-site contamination in the City of Midland soils, the Tittabawassee River and Saginaw River sediment and floodplain soils, and the Saginaw Bay, and, if necessary, undertake remedial action. In 2016, final regulatory approval was received from the MDEQ for the City of Midland and the Company is continuing the long-term monitoring requirements of the Remedial Action Plan.
Tittabawassee and Saginaw Rivers, Saginaw Bay
The Company, the U.S. Environmental Protection Agency (“EPA”) and the State of Michigan ("State") entered into an administrative order on consent (“AOC”), effective January 21, 2010, that requires the Company to conduct a remedial investigation, a feasibility study and a remedial design for the Tittabawassee River, the Saginaw River and the Saginaw Bay, and pay the oversight costs of the EPA and the State under the authority of the Comprehensive Environmental Response, Compensation, and Liability Act. These actions, to be conducted under the lead oversight of the EPA, will build upon the investigative work completed under the State Resource Conservation Recovery Act program from 2005 through 2009.
The Tittabawassee River, beginning at the Midland Site and extending down to the first six miles of the Saginaw River, are designated as the first Operable Unit for purposes of conducting the remedial investigation, feasibility study and remedial design work. 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
million cash settlement to be used for long-term maintenance and trustee-selected remediation projects with an additional $ million to specified local projects managed by third parties. These funds were paid in December 2020. The consent decree further requires the Company to complete or fund 13 additional environmental restoration projects which are valued by the trustees at approximately $ million, to be conducted over the next several years. 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.
At December 31, 2024, the accrual for these off-site matters was $ million (included in the total accrued obligation of $ million). At December 31, 2023, the Company had an accrual for these off-site matters of $ million (included in the total accrued obligation of $ million).
Environmental Matters Summary
It is the opinion of the Company’s management that the possibility is remote that costs in excess of those disclosed will have a material impact on the Company’s results of operations, financial condition or cash flows.
Litigation
Asbestos-Related Matters of Union Carbide Corporation
Introduction
Union Carbide is and has been involved in a large number of asbestos-related suits filed primarily in state courts during the past several decades. These suits principally allege personal injury resulting from exposure to asbestos-containing products and frequently seek both actual and punitive damages. The alleged claims primarily relate to products that Union Carbide sold in the past, alleged exposure to asbestos-containing products located on Union Carbide’s premises and Union Carbide’s responsibility for asbestos suits filed against a former Union Carbide subsidiary, Amchem Products, Inc. ("Amchem"). In many cases, plaintiffs are unable to demonstrate that they have suffered any compensable loss as a result of such exposure, or that injuries incurred in fact resulted from exposure to Union Carbide’s products. Union Carbide expects more asbestos-related suits to be filed against Union Carbide and Amchem in the future, and will aggressively defend or reasonably resolve, as appropriate, both pending and future claims.
million, and approximately percent of the recorded liability related to pending claims and approximately 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 $ million, and approximately percent of the recorded liability related to pending claims and approximately percent related to future claims.
Summary
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. However, future events, such as the number of new claims to be filed and/or received each year, the average cost of defending and disposing of each such claim, as well as the numerous uncertainties surrounding asbestos litigation in the United States over a significant period of time, could cause the actual costs for Union Carbide to be higher or lower than those projected or those recorded. Any such events could result in an increase or decrease in the recorded liability.
Because of the uncertainties described above, Union Carbide cannot estimate the full range of the cost of resolving pending and future asbestos-related claims facing Union Carbide and Amchem. 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.
Legacy Matters
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 ("Groundwater 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 $ million, included in "Cost of sales" in the consolidated statements of income and related to Industrial Intermediates & Infrastructure. At December 31, 2024, the total liability related to such alleged Groundwater Matters settlements was $ million ($ million at December 31, 2023), which was included in “Accrued and other current liabilities” and "Other noncurrent obligations" in the consolidated balance sheets.
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
In addition to the specific matters described above, the Company is party to a number of other claims and lawsuits arising out of the normal course of business with respect to product liability, patent infringement, employment matters, governmental tax and regulation disputes, contract and commercial litigation, and other actions. Certain of these actions purport to be class actions and seek damages in very large amounts. 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. These policies may provide coverage that could be utilized to minimize the financial impact, if any, of certain contingencies described above. It is the opinion of the Company’s management that the possibility is remote that the aggregate of all such other claims and lawsuits will have a material adverse impact on the results of operations, financial condition and cash flows of the Company.
Indemnifications with Corning Incorporated ("Corning")
In connection with the June 1, 2016, ownership restructure of Dow Silicones, the Company is indemnified by Corning for at least percent of future losses associated with certain pre-closing liabilities, subject to certain conditions and limits. The maximum amount of indemnified losses which may be recovered are subject to a cap that declines over time. Indemnified losses are capped at $ billion between May 31, 2018 and May 31, 2023, and recoveries are permitted on claims initially submitted after May 31, 2023. The Company had indemnification assets of $ million at December 31, 2024 ($ million at December 31, 2023), which was included in "Other current assets" and "Noncurrent receivables" in the consolidated balance sheets.
Gain Contingency - Dow v. Nova Chemicals Corporation Patent Infringement Matter
In December 2010, Dow filed suit in the Federal Court in Ontario, Canada ("Federal Court") alleging that Nova Chemicals Corporation ("Nova") was infringing the Company's Canadian polyethylene patent 2,106,705 (the "'705 Patent"). Nova counterclaimed on the grounds of invalidity and non-infringement. In accordance with Canadian practice, the suit was bifurcated into a merits phase, followed by a damages phase. Following trial in the merits phase, in May 2014, the Federal Court ruled that the Company's '705 Patent was valid and infringed by Nova. Nova appealed to the Canadian Federal Court of Appeal, which affirmed the Federal Court decision in August 2016. Nova then sought leave to appeal its loss to the Supreme Court of Canada ("Canadian Supreme Court"), which dismissed Nova’s petition in April 2017. As a result, Nova exhausted all appeal rights on the merits, and it was undisputed that Nova owed the Company the profits it earned from its infringing sales as determined in the trial for the damages phase.
In April 2017, the Federal Court issued a Public Judgment in the damages phase, which detailed its conclusions on how to calculate the profits to be awarded to the Company. In June 2017, the Federal Court ordered Nova to pay $ million Canadian dollars to the Company, plus pre- and post-judgment interest, for which the Company received payment equivalent to $ million U.S. dollars in July 2017. Although Nova was appealing portions of the damages judgment, certain portions of it were indisputable and could be retained by the Company regardless of the outcome of any further appeals by Nova. As a result of these actions and in accordance with ASC Topic 450-30 "Gain Contingencies," the Company recorded a $ million pretax gain in the second quarter of 2017.
On September 15, 2020, the Canadian Federal Court of Appeal dismissed Nova's appeal of the damages judgment, thus affirming the trial court's decision in its entirety. In November 2020, Nova filed an application for leave to appeal this decision to the Canadian Supreme Court. In November 2022, the Canadian Supreme Court dismissed Nova's appeal, thereby exhausting all of Nova's appeal rights for the damages judgment. As a result, the Company recorded a pretax gain of $ million in the fourth quarter of 2022 for the previously disputed portion of the damages judgment, of which $ million was included in "Sundry income (expense) - net," related to Packaging & Specialty Plastics, and $ million was included in "Selling, general and administrative expenses" in the consolidated statements of income.
billion Canadian dollars (equivalent to approximately $ billion U.S. dollars) by October 11, 2019, for damages the Company incurred through 2012 related to the companies’ jointly-owned ethylene asset in Joffre, Alberta, Canada, which has been received by the Company. The Court of the King's Bench in Alberta, Canada, which initially ruled in June 2018, found that Nova failed to operate the ethylene asset at full capacity for more than ten years, and furthermore, that Nova violated several contractual agreements related to the Company receiving its share of the asset’s ethylene production. These actions deprived the Company of millions of pounds of ethylene. Nova appealed the judgment; however, certain portions were no longer in dispute and would be retained by the Company regardless of the outcome of any further appeals by Nova. As a result and in accordance with ASC Topic 450-30 “Gain Contingencies,” the Company recorded a $ million pretax gain in 2019. In 2020 and 2023, further actions by Nova and/or related court decisions upholding the majority of Dow's damages made additional portions of the ruling in Dow's favor final and no longer subject to dispute. As a result, the Company recorded additional pretax gains of $ million in 2020 and $ million in 2023. In 2023, $ million of the pretax gain was included in "Sundry income (expense) - net," related to Packaging & Specialty Plastics, and $ million was included in "Selling, general and administrative expenses" in the consolidated statements of income.
At December 31, 2024, $ million ($ million at December 31, 2023) was included in "Other noncurrent obligations" in the Company's consolidated balance sheets related to the disputed portion of the damages judgment. Dow continues to seek an award of additional damages for the period from 2013 through 2018 to account for the ethylene shortfall during those years. The damages hearing that began in the trial court in November 2021 to resolve the impact of the appellate ruling and quantify Dow's damages for the 2013-2018 period has concluded; the parties are awaiting the court's ruling. 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
In March 2017, the Federal Supreme Court of Brazil (“Brazil Supreme Court”) ruled in a leading case that a Brazilian value-added tax ("ICMS") should not be included in the base used to calculate a taxpayer's federal contribution on total revenue known as PIS/COFINS (the “2017 Decision”). Previously, three of the Company’s Brazilian subsidiaries filed lawsuits challenging the inclusion of ICMS in their calculation of PIS/COFINS, seeking recovery of excess taxes paid. 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. 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 $ 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. At December 31, 2024, related tax credits available and expected to be applied to future required federal tax payments totaled $ million ($ million at December 31, 2023).
Purchase Commitments
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 $ billion (approximately $ million on a present value basis) at December 31, 2024.
| $ | | | 2038 | $ | | | $ | | | | | | 1.In addition, TDCC has provided guarantees, in proportion to the Company's percent ownership interest, of all future interest payments that will become due on Sadara’s project financing debt during the grace period, which Dow's share is estimated to be $ million at December 31, 2024 ($ million at December 31, 2023). The Company does not expect to be required to perform under the guarantees.
Guarantees arise during the ordinary course of business from relationships with customers, committed accounts receivable facilities and nonconsolidated affiliates when the Company undertakes an obligation to guarantee the performance of others (via delivery of cash or other assets) if specified triggering events occur. With guarantees, such as commercial or financial contracts, non-performance by the guaranteed party triggers the obligation of the Company to make payments to the beneficiary of the guarantee. 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. 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 $ million at December 31, 2024 ($ 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. Sadara reached an agreement with its lenders to re-profile its outstanding project financing debt in the first quarter of 2021. In conjunction with the debt re-profiling, TDCC entered into a guarantee of up to approximately $ billion of Sadara’s debt, proportionate to the Company's percent ownership interest. The debt re-profiling includes a grace period until June 2026, during which Sadara is obligated to make interest-only payments which are guaranteed by TDCC in proportion to the Company's percent ownership interest. As part of the debt re-profiling, Sadara established a $ million revolving credit facility guaranteed by Dow, which would be used to fund Dow’s pro-rata share of any potential shortfall during the grace period. See Note 11 for additional information on Dow's investment in Sadara.
Asset Retirement Obligations
The Company has manufacturing sites in countries. Most of these sites contain numerous individual manufacturing operations, particularly at the Company’s larger sites. Asset retirement obligations are recorded as incurred and reasonably estimable, including obligations for which the timing and/or method of settlement are conditional on a future event that may or may not be within the control of the Company. The retirement of assets may involve such efforts as remediation and treatment of asbestos, contractually required demolition, and other related activities, depending on the nature and location of the assets; and retirement obligations are typically realized only upon demolition of those facilities. In identifying asset retirement obligations, the Company considers identification of legally enforceable obligations, changes in existing law, estimates of potential settlement dates and the calculation of an appropriate discount rate to be used in calculating the fair value of the obligations. The Company has a well-established global process to identify, approve and track the demolition of retired or to-be-retired facilities; and no assets are retired from service until this process has been followed. The Company typically forecasts demolition projects based on the usefulness of the assets; environmental, health and safety concerns; and other similar considerations. Under this process, as demolition projects are identified and approved, reasonable estimates are determined for the time frames during which any related asset retirement obligations are expected to be settled. For those assets where a range of potential settlement dates may be reasonably estimated, obligations are recorded. 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.
million at December 31, 2024 ($ million at December 31, 2023).
| $ | | |
| Additional accruals | | | | |
| Liabilities settled | () | | () | |
| Accretion expense | | | | |
| Revisions in estimated cash flows | | | | |
| Other | () | | () | |
| Balance at Dec 31 | $ | | | $ | | |
The discount rate used to calculate the Company’s asset retirement obligations at December 31, 2024, was percent ( percent at December 31, 2023). These obligations are included in the consolidated balance sheets as "Accrued and other current liabilities" and "Other noncurrent obligations."
The Company has not recognized conditional asset retirement obligations for which a fair value cannot be reasonably estimated in its consolidated financial statements. Assets that have not been submitted/reviewed for potential demolition activities are considered to have continued usefulness and are generally still operating normally. Therefore, without a plan to demolish the assets or the expectation of a plan, such as shortening the useful life of assets for depreciation purposes in accordance with the accounting guidance related to property, plant and equipment, the Company is unable to reasonably forecast a time frame to use for present value calculations. As such, the Company has not recognized obligations for individual plants/buildings at its manufacturing sites where estimates of potential settlement dates cannot be reasonably made. In addition, the Company has not recognized conditional asset retirement obligations for the capping of its approximately underground storage wells and underground brine mining and other wells at Company-owned sites when there are no plans or expectations of plans to exit the sites. It is the opinion of the Company’s management that the possibility is remote that such conditional asset retirement obligations, when estimable, will have a material impact on the Company’s consolidated financial statements based on current costs.
NOTE 16 -
years. See Note 1 for additional information on leases.
| $ | | | $ | | | | Finance lease cost | | | |
| Amortization of right-of-use assets - finance | | | | | | |
| Interest on lease liabilities - finance | | | | | | |
| Total finance lease cost | | | | | | |
| Short-term lease cost | | | | | | |
| Variable lease cost | | | | | | |
| Sublease income | () | | () | | () | |
| Total lease cost | $ | | | $ | | | $ | | |
| $ | | | $ | | | | Operating cash flows for finance leases | $ | | | $ | | | $ | | |
| Financing cash flows for finance leases | $ | | | $ | | | $ | | |
| Right-of-use assets obtained in exchange for lease obligations: | | | |
Operating leases 1 | $ | | | $ | | | $ | | |
Finance leases 1 | $ | | | $ | | | $ | | |
1.In 2023, $ million of leased assets were reclassified from Operating leases to Finance leases due to an amendment that extended the term of the agreement.
| $ | | | | Finance lease assets | Property | | | | |
| Finance lease amortization | Accumulated depreciation | () | | () | |
| Total lease assets | | $ | | | $ | | |
| Liabilities | | | |
| Current | | | |
| Operating | Operating lease liabilities - current | $ | | | $ | | |
| Finance | Long-term debt due within one year | | | | |
| Noncurrent | | | |
| Operating | Operating lease liabilities - noncurrent | | | | |
| Finance | Long-Term Debt | | | | |
| Total lease liabilities | | $ | | | $ | | |
years years | | Finance leases | years | years |
| Weighted-average discount rate | | |
| Operating leases | | % | | % |
| Finance leases | | % | | % |
| $ | | | | 2026 | | | | |
| 2027 | | | | |
| 2028 | | | | |
| 2029 | | | | |
| 2030 and thereafter | | | | |
| Total future undiscounted lease payments | $ | | | $ | | |
| Less: Imputed interest | | | | |
| Total present value of lease liabilities | $ | | | $ | | |
At December 31, 2024, Dow had additional leases of approximately $ million, primarily for buildings and equipment, which had not yet commenced. These leases are expected to commence between 2025 and 2027, with lease terms of up to years.
Dow provides guarantees related to certain leased assets, specifying the residual value that will be available to the lessor at lease termination through the sale of the assets to the lessee or third parties. The following table provides a summary of the final expiration, maximum future payments and recorded liability reflected in the consolidated balance sheets for residual value guarantees at December 31, 2024 and 2023. The lease agreements do not contain any material restrictive covenants.
| $ | | | 2031 | $ | | | $ | | |
NOTE 17 –
million in 2024 ( million in 2023 and million in 2022). See Note 20 for additional information on the Company's equity awards.
Retained Earnings
Dow Inc.
There are no significant restrictions limiting Dow Inc.’s ability to pay dividends. Dow Inc. declared dividends of $ per share in 2024, 2023 and 2022.
Undistributed earnings of nonconsolidated affiliates included in retained earnings was $ million at December 31, 2024 and $ million at December 31, 2023.
TDCC
TDCC's Board of Directors determines whether or not there will be a dividend distribution to Dow Inc. TDCC declared $ million of dividends to Dow Inc. and paid $ million of dividends to Dow Inc. in 2024 (declared and paid $ million in 2023 and $ 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, 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 2024 or 2023 for allocated ESOP shares. Compensation expense reflected in income before income taxes for ESOP shares allocated was $ million in 2022.
Treasury Stock
On April 1, 2019, the Board ratified the share repurchase program originally approved on March 15, 2019, authorizing up to $ billion for the repurchase of the Company's common stock, with no expiration date. The Company completed the April 1, 2019 share repurchase program in the second quarter of 2022. On April 13, 2022, the Board approved a new share repurchase program authorizing up to $ billion for the repurchase of the Company's common stock, with no expiration date. In 2024, the Company repurchased $ million of its common stock ($ million in 2023 and $ million in 2022). Excise tax for repurchased shares was in 2024 ($ million in 2023 and in 2022), and was included in treasury stock at cost. At December 31, 2024, $ 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 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 million treasury shares under its compensation and benefit plans in 2024, million in 2023 and 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 $ million in 2024, $ million in 2023 and $ million in 2022.
| | | Issued 1 | | | () | |
| Repurchased | — | | | |
| Balance at Jan 1, 2023 | | | | |
Issued 1 | | | () | |
| Repurchased | — | | | |
| Balance at Jan 1, 2024 | | | | |
Issued 1 | | | () | |
| Repurchased | — | | | |
| Balance at Dec 31, 2024 | | | | |
1.Shares issued to employees and non-employee directors under the Company's equity compensation and defined contribution plans.
) | $ | () | | $ | | | | Unrealized gains (losses) on investments | | | () | | () | |
| Tax (expense) benefit | () | | | | | |
| Net unrealized gains (losses) on investments | | | | | () | |
(Gains) losses reclassified from AOCL to net income 1 | () | | () | | | |
Tax expense (benefit) 2 | | | | | () | |
| Net (gains) losses reclassified from AOCL to net income | () | | () | | | |
| Other comprehensive income (loss), net of tax | | | | | () | |
| Ending balance | $ | () | | $ | () | | $ | () | |
| Cumulative Translation Adjustment | | | |
| Beginning balance | $ | () | | $ | () | | $ | () | |
| Gains (losses) on foreign currency translation | () | | | | () | |
| Tax (expense) benefit | () | | | | | |
| Net gains (losses) on foreign currency translation | () | | | | () | |
(Gains) losses reclassified from AOCL to net income 3 | () | | () | | () | |
| Other comprehensive income (loss), net of tax | () | | | | () | |
| Ending balance | $ | () | | $ | () | | $ | () | |
| Pension and Other Postretirement Benefits | | | |
| Beginning balance | $ | () | | $ | () | | $ | () | |
| Gains (losses) arising during the period | () | | () | | | |
| Tax (expense) benefit | | | | | () | |
| Net gains (losses) arising during the period | () | | () | | | |
Amortization of net loss and prior service credits reclassified from AOCL to net income 4 | | | | | | |
Tax expense (benefit) 2 | () | | () | | () | |
| Net loss and prior service credits reclassified from AOCL to net income | | | | | | |
| Other comprehensive income (loss), net of tax | () | | () | | | |
| Ending balance | $ | () | | $ | () | | $ | () | |
| Derivative Instruments | | | |
| Beginning balance | $ | () | | $ | () | | $ | () | |
| Gains (losses) on derivative instruments | () | | () | | | |
| Tax (expense) benefit | | | | | () | |
| Net gains (losses) on derivative instruments | () | | () | | | |
(Gains) losses reclassified from AOCL to net income 5 | | | | | () | |
Tax expense (benefit) 2 | () | | () | | | |
| Net (gains) losses reclassified from AOCL to net income | | | | | () | |
| Other comprehensive income (loss), net of tax | () | | | | | |
| Ending balance | $ | () | | $ | () | | $ | () | |
| Total AOCL ending balance | $ | () | | $ | () | | $ | () | |
1.Reclassified to "Net sales" and "Sundry income (expense) - net."
2.Reclassified to "Provision (credit) for income taxes."
3.Reclassified to "Sundry income (expense) - net."
4.These AOCL components are included in the computation of net periodic benefit cost of the Company's defined benefit pension and other postretirement benefit plans. See Note 19 for additional information.
5.Reclassified to "Cost of sales," "Sundry income (expense) - net" and "Interest expense and amortization of debt discount."
NOTE 18 –
| $ | | | $ | | | Net income attributable to noncontrolling interests 1 | | | | | | |
Distributions to noncontrolling interests 2 | () | | () | | () | |
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| Cumulative translation adjustments | () | | () | | () | |
| Other | () | | | | | |
| Balance at Dec 31 | $ | | | $ | | | $ | | |
1.2022 includes the portion of asset related charges attributable to noncontrolling interests related to a joint venture in Russia. See Note 5 for additional information.
2.Distributions to noncontrolling interests are net of $ million in 2024 ($ million in 2023 and $ 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 percent of the membership interests in its wholly owned subsidiary Dow InfraCo, LLC in exchange for cash proceeds of approximately $ billion (the "Transaction"). Under the terms of the sale and purchase agreement, InfraPark has the option to purchase up to an additional percent of Dow InfraCo, LLC's membership interests in exchange for additional cash proceeds of up to $ 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. Gulf Coast.
NOTE 19 –
million of benefit obligations and $ million of related plan assets to the insurers. These transactions did not require any cash funding from the Company and did not impact the pension benefits of participants. As a result of these transactions, the Company recognized pretax, non-cash settlement charges of $ 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.
million in 2024, which includes contributions necessary to fund benefit payments for the Company's unfunded pension plans. Additionally, in the second quarter of 2024, the Company received a pension plan reversion of approximately $ million (approximately $ 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 $ million to its pension plans in 2025.
% | | % | | % | | % | | % | | Interest crediting rate for applicable benefits | | % | | % | | % | | % | | % |
| Rate of compensation increase | | % | | % | | % | | % | | % |
| Expected return on plan assets | | | | % | | % | | % |
The weighted-average assumptions used to determine pension plan obligations and net periodic benefit cost for U.S. plans are summarized in the table below:
| | | | | | | | | | | | | | | | | |
| Weighted-Average Assumptions for U.S. Pension Plans | Benefit Obligations
at Dec 31 | Net Periodic Benefit Cost
for the Year Ended |
| 2024 | 2023 | 2024 | 2023 | 2022 |
| Discount rate | | % | | % | | % | | % | | % |
| Interest crediting rate for applicable benefits | | % | | % | | % | | % | | % |
Rate of compensation increase 1 | — | % | | % | | % | | % | | % |
| Expected return on plan assets | | | | % | | % | | % |
1.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.
Other Postretirement Benefit Plans
The Company provides certain health care and life insurance benefits to retired employees and survivors. The Company’s plans outside of the United States are not significant; therefore, this discussion relates to the U.S. plans only. The plans provide health care benefits, including hospital, physicians’ services, drug and major medical expense coverage, and life insurance benefits. In general, for employees hired before January 1, 1993, the plans provide benefits supplemental to Medicare when retirees are eligible for these benefits. The Company and the retiree share the cost of these benefits, with the Company portion increasing as the retiree has increased years of credited service, although there is a cap on the Company portion. The Company has the ability to change these benefits at any time. Employees hired after January 1, 2008, are not covered under the plans.
The Company funds most of the cost of these health care and life insurance benefits as incurred. In 2024, the Company did not make any contributions to its other postretirement benefit plan trusts. The trusts did not hold assets at December 31, 2024. The Company does not expect to contribute assets to its other postretirement benefit plan trusts in 2025.
% | | % | | % | | % | | % | | Health care cost trend rate assumed for next year | | % | | % | | % | | % | | % |
| Rate to which the cost trend rate is assumed to decline (the ultimate health care cost trend rate) | | % | | % | | % | | % | | % |
| Year that the rate reaches the ultimate health care cost trend rate | | | | | |
Assumptions
The Company determines the expected long-term rate of return on plan assets by performing a detailed analysis of key economic and market factors driving historical returns for each asset class and formulating a projected return based on factors in the current environment. Factors considered include, but are not limited to, inflation, real economic growth, interest rate yield, interest rate spreads and other valuation measures and market metrics. The expected long-term rate of return for each asset class is then weighted based on the strategic asset allocation approved by the governing body for each plan. The Company’s historical experience with the pension fund asset performance is also considered.
The Company uses the spot rate approach to determine the discount rate utilized to measure the service cost and interest cost components of net periodic pension and other postretirement benefit costs for the United States and other selected countries, as applicable. Under the spot rate approach, the Company calculates service cost and interest cost by applying individual spot rates from the Willis Towers Watson RATE:Link yield curve (based on high-quality corporate bond yields) for each selected country to the separate expected cash flow components of service cost and interest cost. Service cost and interest cost for all other plans are determined on the basis of the single equivalent discount rates derived in determining those plan obligations.
The discount rates utilized to measure the pension and other postretirement obligations of the U.S. plans are based on the yield on high-quality corporate fixed income investments at the measurement date. Future expected actuarially determined cash flows for the Company’s U.S. plans are individually discounted at the spot rates under the Willis Towers Watson U.S. RATE:Link 60-90 corporate yield curve (based on 60th to 90th percentile high-quality corporate bond yields) to arrive at the plan’s obligations as of the measurement date.
The Company’s mortality assumption used for the U.S. plans is a benefit-weighted version of the Society of Actuaries’ RP-2014 base table with future rates of mortality improvement based on a modified version of the assumptions used in the Social Security Administration’s 2021 trustees report.
| $ | | | $ | | | $ | | | | Service cost | | | | | | | | |
| Interest cost | | | | | | | | |
| Plan participants' contributions | | | | | | | | |
| Actuarial changes in assumptions and experience | () | | | | () | | | |
| Benefits paid | () | | () | | () | | () | |
| Plan amendments | | | | | | | | |
| Other | | | | | | | | |
| Effect of foreign exchange rates | () | | | | () | | | |
Settlements/curtailments/termination benefits 1 | () | | () | | | | | |
| Benefit obligations at end of year | $ | | | $ | | | $ | | | $ | | |
| | | | |
| Change in plan assets: | | | | |
| Fair value of plan assets at beginning of year | $ | | | $ | | | $ | | | $ | | |
| Actual return on plan assets | | | | | | | | |
| Employer contributions | | | | | | | | |
| Plan participants' contributions | | | | | | | | |
| Benefits paid | () | | () | | | | | |
Settlements 2 | () | | () | | | | | |
Other 3 | () | | () | | | | | |
| Effect of foreign exchange rates | () | | | | | | | |
|
| Fair value of plan assets at end of year | $ | | | $ | | | $ | | | $ | | |
| | | | |
| Funded status: | | | | |
| U.S. plans with plan assets | $ | () | | $ | () | | $ | | | $ | | |
| Non-U.S. plans with plan assets | () | | () | | | | | |
| All other plans | () | | () | | () | | () | |
|
| Funded status at end of year | $ | () | | $ | () | | $ | () | | $ | () | |
| | | | |
| Amounts recognized in the consolidated balance sheets at Dec 31: | | | | |
| Deferred charges and other assets | $ | | | $ | | | $ | | | $ | | |
| Accrued and other current liabilities | () | | () | | () | | () | |
| Pension and other postretirement benefits - noncurrent | () | | () | | () | | () | |
|
|
| Net amount recognized | $ | () | | $ | () | | $ | () | | $ | () | |
| | | | |
| Pretax amounts recognized in accumulated other comprehensive loss at Dec 31: | | | | |
| Net loss (gain) | $ | | | $ | | | $ | () | | $ | () | |
| Prior service credit | () | | () | | | | | |
| Pretax balance in accumulated other comprehensive loss at end of year | $ | | | $ | | | $ | () | | $ | () | |
1.The 2024 impact primarily relates to the curtailment, special termination benefits and settlement of certain pension benefit obligations of a European plan resulting from the 2023 Restructuring Program, and the settlement and curtailment impacts of certain pension benefit obligations in Canada, China and Europe. The 2023 impact primarily relates to the transfer of certain pension benefit obligations in the United States and Canada through the purchase of or conversion to annuity contracts from insurance companies, triggering settlement accounting.
2.The 2024 impact primarily relates to the settlement of certain pension benefit obligations of a European plan resulting from the 2023 Restructuring Program and settlement of certain pension benefit obligations in Canada. The 2023 impact primarily relates to the purchase of annuity contracts associated with the transfer of certain pension benefit obligations to insurance companies, triggering settlement accounting.
A significant component of the overall decrease in the Company's benefit obligation for the year ended December 31, 2024, was due to benefits paid and the change in weighted-average discount rates, which increased from percent at December 31, 2023, to percent at December 31, 2024. A significant component of the overall decrease in the Company's benefit obligation for the year ended December 31, 2023, was due to the irrevocable transfer of certain benefit obligations to third-party insurance companies, partially offset by the change in weighted-average discount rates, which decreased from percent at December 31, 2022, to percent at December 31, 2023.
billion and $ billion at December 31, 2024 and 2023, respectively.
| $ | | | | Fair value of plan assets | $ | | | $ | | |
| $ | | | |
| Fair value of plan assets | $ | | | $ | | |
| $ | | | $ | | | $ | | | $ | | | $ | | | | Interest cost | | | | | | | | | | | | |
| Expected return on plan assets | () | | () | | () | | | | | | | |
| Amortization of prior service credit | () | | () | | () | | | | | | | |
| Amortization of unrecognized (gain) loss | | | | | | | () | | () | | () | |
Curtailment/settlement/other 1 | () | | | | | | | | | | | |
| Net periodic benefit cost (credit) | $ | () | | $ | | | $ | | | $ | | | $ | () | | $ | | |
| Changes in plan assets and benefit obligations recognized in other comprehensive (income) loss: | | | | | | |
| Net (gain) loss | $ | | | $ | | | $ | () | | $ | () | | $ | | | $ | () | |
| Prior service cost (credit) | | | | | () | | | | | | | |
| Amortization of prior service credit | | | | | | | | | | | | |
| Amortization of unrecognized gain (loss) | () | | () | | () | | | | | | | |
Curtailment and settlement gain (loss) 1 | | | () | | | | | | | | | |
| Total recognized in other comprehensive (income) loss | $ | | | $ | | | $ | () | | $ | () | | $ | | | $ | () | |
| Total recognized in net periodic benefit cost and other comprehensive (income) loss | $ | | | $ | | | $ | () | | $ | () | | $ | | | $ | () | |
1.The 2024 impact primarily relates to the settlement of certain plan obligations of a European plan resulting from the 2023 Restructuring Program and curtailments and settlement of certain pension benefit obligations in Canada, China and Europe. The 2023 impact relates to the settlement of certain pension benefit obligations in the United States and Canada through the purchase of or conversion to annuity contracts from insurance companies.
Except for curtailment, special termination benefits, and settlement costs related to the 2023 Restructuring Program, which are included in “Restructuring and asset related charges – net” in the consolidated statements of income, non-service cost components of net periodic benefit cost are included in "Sundry income (expense) - net" in the consolidated statements of income. See Notes 5 and 6 for additional information.
| $ | | | | 2026 | | | | |
| 2027 | | | | |
| 2028 | | | | |
| 2029 | | | | |
| 2030-2034 | | | | |
| Total | $ | | | $ | | |
1. Includes benefit payments related to the planned termination of certain U.S. tax qualified pension plans.
Plan Assets
Plan assets consist primarily of equity and fixed income securities of United States and foreign issuers, and include alternative investments, such as real estate, private equity and absolute return strategies. Plan assets totaled $ billion at December 31, 2024 and $ billion at December 31, 2023 and included no directly held common stock of Dow Inc.
The Company's investment strategy for plan assets is to manage the assets in relation to the liability in order to pay retirement benefits to plan participants over the life of the plans. This is accomplished by identifying and managing the exposure to various market risks, diversifying investments across various asset classes and earning an acceptable long-term rate of return consistent with an acceptable amount of risk, while considering the liquidity needs of the plans.
The plans are permitted to use derivative instruments for investment purposes, as well as for hedging the underlying asset and liability exposure and rebalancing the asset allocation. The plans use value-at-risk, stress testing, scenario analysis and Monte Carlo simulations to monitor and manage both the risk within the portfolios and the surplus risk of the plans.
Equity securities primarily include investments in large- and small-cap companies located in both developed and emerging markets around the world. Fixed income securities include investment and non-investment grade corporate bonds of companies diversified across industries, U.S. treasuries, non-U.S. developed market securities, U.S. agency mortgage-backed securities, emerging market securities and fixed income related funds. Alternative investments primarily include investments in real estate, private equity and absolute return strategies. Other significant investment types include various insurance contracts and interest rate, equity, commodity and foreign exchange derivative investments and hedges.
The Company mitigates the credit risk of investments by establishing guidelines with investment managers that limit investment in any single issue or issuer to an amount that is not material to the portfolio being managed. These guidelines are monitored for compliance both by the Company and external managers. Credit risk related to derivative activity is mitigated by utilizing multiple counterparties, collateral support agreements and centralized clearing, where appropriate. A short-term investment money market fund is utilized as the sweep vehicle for the U.S. plans, which from time to time can represent a significant investment.
% | | Fixed income securities | | |
| Alternative investments | | |
| Other investments | | |
| Total | | % |
Fair value calculations may not be indicative of net realizable value or reflective of future fair values. Furthermore, although the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.
For pension plan assets classified as Level 1 measurements (measured using quoted prices in active markets), total fair value is either the price of the most recent trade at the time of the market close or the official close price, as defined by the exchange on which the asset is most actively traded on the last trading day of the period, multiplied by the number of units held without consideration of transaction costs.
For pension plan assets classified as Level 2 measurements, where the security is frequently traded in less active markets, fair value is based on the closing price at the end of the period; where the security is less frequently traded, fair value is based on the price a dealer would pay for the security or similar securities, adjusted for any terms specific to that asset or liability. Market inputs are obtained from well-established and recognized vendors of market data and subjected to tolerance and quality checks. For derivative assets and liabilities, standard industry models are used to calculate the fair value of the various financial instruments based on significant observable market inputs, such as foreign exchange rates, commodity prices, swap rates, interest rates and implied volatilities obtained from various market sources. For other pension plan assets for which observable inputs are used, fair value is derived through the use of fair value models, such as a discounted cash flow model or other standard pricing models.
For pension plan assets classified as Level 3 measurements, total fair value is based on significant unobservable inputs including assumptions where there is little, if any, market activity for the investment.
Certain pension plan assets are held in funds where fair value is based on an estimated net asset value per share (or its equivalent) as of the most recently available fund financial statements which are received on a monthly or quarterly basis. These valuations are reviewed for reasonableness based on applicable sector, benchmark and company performance. Adjustments to valuations are made where appropriate to arrive at an estimated net asset value per share at the measurement date. These funds are not classified within the fair value hierarchy.
| $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | | Equity securities: | | | | | | | | |
| U.S. equity securities | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | |
| Non - U.S. equity securities | | | | | | | | | | | | | | | | |
| Total equity securities | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | |
| Fixed income securities: | | | | | | | | |
| Debt - government-issued | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | |
| Debt - corporate-issued | | | | | | | | | | | | | | | | |
| Debt - asset-backed | | | | | | | | | | | | | | | | |
| Total fixed income securities | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | |
| Alternative investments: | | | | | | | | |
| | | | |
|
| |
)) |
| |
| |
|
| |
)) |
| |
| | |
Defined Contribution Plans
U.S. employees may participate in defined contribution plans by contributing a portion of their compensation, which is partially matched by the Company. In addition, beginning on January 1, 2024, all eligible U.S. employees also received an automatic non-elective contribution of percent of eligible compensation to their respective defined contribution plans. Defined contribution plans also cover employees in some subsidiaries in other countries, including Brazil, The Netherlands, Canada, Korea, Spain, Switzerland and the United Kingdom. Expense recognized for all defined contribution plans was $ million in 2024, $ million in 2023 and $ million in 2022.
NOTE 20 –
million, $ million and $ million in 2024, 2023 and 2022, respectively. The income tax benefits related to stock-based compensation arrangements were $ million, $ million and $ million in 2024, 2023 and 2022, respectively.
Accounting for Stock-Based Compensation
The Company grants stock-based compensation awards that vest over a specified period or upon employees meeting certain performance and/or retirement eligibility criteria. The fair value of equity instruments issued to employees is measured on the grant date. The fair value of liability instruments (granted to executive employees subject to stock ownership requirements, that provide the recipient the option to elect to receive a cash payment equal to the value of the stock award on the date of delivery) is measured at the end of each quarter. The fair value of equity and liability instruments is expensed over the vesting period or, in the case of retirement, from the grant date to the date on which retirement eligibility provisions have been met and additional service is no longer required. The Company estimates expected forfeitures based on historical activity.
The Company uses the Black-Scholes option valuation model to estimate the fair value of stock options.
% | | % | | % | | Expected volatility | | % | | % | | % |
| Risk-free interest rate | | % | | % | | % |
| Expected life of stock options granted during period (years) | | | |
per share in 2024, 2023 and 2022 on Dow Inc. common stock. The expected volatility assumptions for the 2024, 2023 and 2022 stock options were based on an equal weighting of the historical daily volatility for the expected term of the awards and current implied volatility from exchange-traded options. The expected volatility assumption for the market portion of the 2024, 2023 and 2022 PSU awards were based on historical daily volatility for the term of the award. The risk-free interest rate was based on the U.S. Treasury strip rates over the expected life of the 2024, 2023 and 2022 options. The expected life of stock options granted was based on an analysis of historical exercise patterns.
Stock Incentive Plan
The Company has historically granted equity awards under various plans (the "Prior Plans"). On February 9, 2012, the TDCC Board of Directors authorized The Dow Chemical Company 2012 Stock Incentive Plan (the "2012 Plan"), which was approved by stockholders at TDCC's annual meeting on May 10, 2012 ("2012 Plan Effective Date"), and became effective on that date. On February 13, 2014, the TDCC Board of Directors adopted The Dow Chemical Company Amended and Restated 2012 Stock Incentive Plan (the "2012 Restated Plan"). The 2012 Restated Plan was approved by stockholders at TDCC's annual meeting on May 15, 2014, and became effective on that date. The Prior Plans were superseded by the 2012 Plan and the 2012 Restated Plan (collectively, the "2012 Plan"). Under the 2012 Plan, the Company granted options, RSUs, PSUs, restricted stock, stock appreciation rights and stock units to employees and non-employee directors, subject to an aggregate limit and annual individual limits. The terms of the grants were fixed at the grant date. TDCC's stock-based compensation programs were assumed by DowDuPont and continued in place with the ability to grant and issue DowDuPont common stock until separation.
On April 1, 2019 ("Original Effective Date"), in connection with the separation, the Company adopted the 2019 Stock Incentive Plan (the "2019 Plan"). On February 11, 2021, the Board approved the first amendment, which was approved by the Company's stockholders at the 2021 Annual Meeting of Stockholders held on April 15, 2021. Under the 2019 Plan, as amended in 2021, the Company may grant stock options, RSUs, PSUs, stock appreciation rights and stock units to employees and non-employee directors until the tenth anniversary of the Original Effective Date, subject to an aggregate limit and annual individual limits. The terms of the grants are fixed at the grant date. At December 31, 2024, there were approximately million shares of common stock available for grant under the 2019 Plan.
Stock Options
The Company grants stock options to certain employees, subject to certain annual and individual limits, with terms of the grants fixed at the grant date. The exercise price of each stock option equals the market price of the common stock on the grant date. Options vest from to and have a maximum term of .
| $ | | |
| Granted | | | $ | | |
| Exercised | () | | $ | | |
| Forfeited/Expired | () | | $ | | |
| Outstanding at Dec 31, 2024 | | | $ | | |
| Remaining contractual life in years | | |
| Aggregate intrinsic value in millions | $ | | | |
| Exercisable at Dec 31, 2024 | | | $ | | |
| Remaining contractual life in years | | |
| Aggregate intrinsic value in millions | $ | | | |
1. Weighted-average per share.
| $ | | | $ | | | | Total compensation expense for stock option plans | $ | | | $ | | | $ | | |
| Related tax benefit | $ | | | $ | | | $ | | |
| Total amount of cash received from the exercise of options | $ | | | $ | | | $ | | |
Total intrinsic value of options exercised 1 | $ | | | $ | | | $ | | |
| Related tax benefit | $ | | | $ | | | $ | | |
1.Difference between the market price at exercise and the price paid by the employee to exercise the options.
Total unrecognized compensation cost related to unvested stock option awards of $ million at December 31, 2024, is expected to be recognized over a weighted-average period of years.
Restricted Stock Units
for employees and for non-employee directors. The following table shows changes in nonvested RSUs:
| | | | | | | | |
| RSU Awards | 2024 |
| Shares in thousands | Shares | Grant Date Fair Value 1 |
| Nonvested at Jan 1, 2024 | | | $ | | |
| Granted | | | $ | | |
| Vested | () | | $ | | |
| Canceled | () | | $ | | |
| Nonvested at Dec 31, 2024 | | | $ | | |
1.Weighted-average per share.
| $ | | | $ | | | Total fair value of RSUs vested 1 | $ | | | $ | | | $ | | |
| Related tax benefit | $ | | | $ | | | $ | | |
| Total compensation expense for RSU awards | $ | | | $ | | | $ | | |
| Related tax benefit | $ | | | $ | | | $ | | |
|
1.Includes the fair value of shares vested in prior years and delivered in the reporting year.
Total unrecognized compensation cost related to RSU awards of $ million at December 31, 2024 is expected to be recognized over a weighted-average period of years. At December 31, 2024, approximately million RSUs with a grant date weighted-average fair value per share of $ had previously vested, but were not issued. These shares are scheduled to be issued to employees within six months to three years or to non-employee directors upon retirement.
Performance Stock Units
The Company grants PSUs to certain employees. The grants vest when the Company attains specified performance targets, such as return on capital, cumulative cash from operations, environmental, social and governance metrics, and relative total shareholder return, over a predetermined period, generally to . Performance and payouts are determined independently for each metric. Compensation expense related to PSU awards is recognized over the lesser of the service or performance period. Changes in the fair value of liability instruments are recognized as compensation expense each quarter.
| $ | | |
| 2024 | Jan 1, 2024 - Dec 31, 2026 | | | $ | | |
| 2023 | Dec 18, 2023 – Dec 18, 2026 3 | | | $ | | |
| 2023 | Jan 1, 2023 – Dec 31, 2025 | | | $ | | |
| 2022 | Jan 1, 2022 – Dec 31, 2024 | | | $ | | |
|
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.
NOTE 21 –
| $ | | | $ | | |
| Gross realized gains | $ | | | $ | | | $ | | |
| Gross realized losses | $ | | | $ | | | $ | | |
| $ | | | | One to five years | | | | |
| Six to ten years | | | | |
| After ten years | | | | |
| Total | $ | | | $ | | |
Portfolio managers regularly review the Company’s holdings to determine if any investments in debt securities are other-than-temporarily impaired. The analysis includes reviewing the amount of the impairment, as well as the length of time it has been impaired.
The credit rating of the issuer, current credit rating trends, the trends of the issuer’s overall sector, the ability of the issuer to pay expected cash flows and the length of time the security has been in a loss position are considered in
| $ | () | | $ | | | $ | () | | $ | | | $ | () | | | Corporate bonds | | | () | | | | () | | | | () | |
| Total temporarily impaired debt securities | $ | | | $ | () | | $ | | | $ | () | | $ | | | $ | () | |
| 2023 | | | | | | |
Government debt 1 | $ | | | $ | () | | $ | | | $ | () | | $ | | | $ | () | |
| Corporate bonds | | | () | | | | () | | | | () | |
| Total temporarily impaired debt securities | $ | | | $ | () | | $ | | | $ | () | | $ | | | $ | () | |
1.U.S. Treasury obligations, U.S. agency obligations, U.S. agency mortgage-backed securities and other municipalities' obligations.
Equity Securities
There were no material adjustments to the carrying value of the not readily determinable investments for impairment or observable price changes for the year ended December 31, 2024. The net unrealized gain recognized in earnings on equity securities totaled $ million for the year ended December 31, 2024 ($ million net unrealized gain for the year ended December 31, 2023).
| $ | | | | Not readily determinable fair value | $ | | | $ | | |
Risk Management
The Company’s business operations give rise to market risk exposure due to changes in foreign exchange rates, interest rates, commodity prices and other market factors such as equity prices. To manage such risks effectively, the Company enters into hedging transactions, pursuant to established guidelines and policies that enable it to mitigate the adverse effects of financial market risk. Derivatives used for this purpose are designated as hedges per the accounting guidance related to derivatives and hedging activities, where appropriate. A secondary objective is to add value by creating additional non-specific exposure within established limits and policies; derivatives used for this purpose are not designated as hedges. The potential impact of creating such additional exposure is not material to the Company’s results. Accounting guidance requires companies to recognize all derivative instruments as either assets or liabilities at fair value.
The Company’s risk management program for interest rate, foreign currency and commodity risks is based on fundamental, mathematical and technical models that take into account the implicit cost of hedging. Risks created by derivative instruments and the mark-to-market valuations of positions are strictly monitored at all times, using value-at-risk and stress tests. Counterparty credit risk arising from these contracts is not significant because the Company minimizes counterparty concentration, deals primarily with major financial institutions of solid credit quality, and the majority of its hedging transactions mature in less than three months. In addition, the Company minimizes concentrations of credit risk through its global orientation by transacting with large, internationally diversified financial counterparties. It is the Company’s policy to not have credit risk-related contingent features in its derivative instruments. No significant concentration of counterparty credit risk existed at December 31, 2024. The Company does not anticipate losses from credit risk, and the net cash requirements arising from counterparty risk associated with risk management activities are not expected to be material in 2025.
| $ | | | | Foreign currency contracts | $ | | | $ | | |
| Derivatives not designated as hedging instruments | | |
| Interest rate contracts | $ | | | $ | | |
| Foreign currency contracts | $ | | | $ | | |
1.Notional amounts represent the absolute value of open derivative positions at the end of the period. Multi-leg option positions are reflected at the maximum notional position at expiration.
The notional amounts of the Company's commodity derivatives at December 31, 2024 and 2023, were as follows:
| | | | | | | | | | | |
Commodity Notionals 1 | Dec 31, 2024 | Dec 31, 2023 | Notional Volume Unit |
|
| Derivatives designated as hedging instruments | | | |
| Hydrocarbon derivatives | | | | | million barrels of oil equivalent |
|
|
|
|
|
| Derivatives not designated as hedging instruments | | | |
| Hydrocarbon derivatives | | | | | million barrels of oil equivalent |
|
|
|
|
1.Notional amounts represent the net volume of open derivative positions outstanding at the end of the period.
Interest Rate Risk Management
The main objective of interest rate risk management is to reduce the total funding cost to the Company and to alter the interest rate exposure to the desired risk profile. To achieve this objective, the Company hedges using interest rate swaps, “swaptions,” and exchange-traded instruments.
Foreign Currency Risk Management
The global nature of the Company's business requires active participation in the foreign exchange markets. The Company has assets, liabilities and cash flows in currencies other than the U.S. dollar. The primary objective of the Company's foreign currency risk management is to optimize the U.S. dollar value of net assets and cash flows. To achieve this objective, the Company hedges on a net exposure basis using foreign currency forward contracts, over-the-counter option contracts, cross-currency swaps and nonderivative instruments in foreign currencies. Exposures primarily relate to assets, liabilities and bonds denominated in foreign currencies, as well as economic exposure, which is derived from the risk that currency fluctuations could affect the dollar value of future cash flows related to operating activities.
Commodity Risk Management
The Company has exposure to the prices of commodities in its procurement of certain raw materials. The primary purpose of commodity hedging activities is to manage the price volatility associated with these forecasted inventory purchases.
million at December 31, 2024 ($ million at December 31, 2023).
| $ | () | | $ | | | $ | | | $ | () | | $ | | | Interest rate contracts 4 | | | | | | | | | () | | | |
Foreign currency contracts 3 | | | () | | | | | | () | | | |
Foreign currency contracts 4 | | | | | | | | | | | | |
Commodity contracts 3 | | | () | | | | | | () | | | |
Commodity contracts 4 | | | () | | | | | | () | | | |
| Total | $ | | | $ | () | | $ | | | $ | | | $ | () | | $ | | |
| Derivatives not designated as hedging instruments | | | | | | |
Interest rate contracts 3 | $ | | | $ | | | $ | | | $ | | | $ | () | | $ | | |
| | |
Foreign currency contracts 3 | | | () | | | | | | () | | | |
| | |
Commodity contracts 3 | | | () | | | | | | () | | | |
Commodity contracts 4 | | | () | | | | | | | | | |
| | |
| Total | $ | | | $ | () | | $ | | | $ | | | $ | () | | $ | | |
| Total asset derivatives | $ | | | $ | () | | $ | | | $ | | | $ | () | | $ | | |
| Liability derivatives | | | | | | |
| Derivatives designated as hedging instruments | | | | | | |
Interest rate contracts 5 | $ | | | $ | () | | $ | | | $ | | | $ | () | | $ | | |
Interest rate contracts 6 | | | | | | | | | () | | | |
Foreign currency contracts 5 | | | () | | | | | | () | | | |
Foreign currency contracts 6 | | | | | | | | | | | | |
Commodity contracts 5 | | | () | | | | | | () | | | |
Commodity contracts 6 | | | () | | | | | | () | | | |
| Total | $ | | | $ | () | | $ | | | $ | | | $ | () | | $ | | |
| Derivatives not designated as hedging instruments | | | | | | |
Interest rate contracts 5 | $ | | | $ | | | $ | | | $ | | | $ | () | | $ | | |
| | |
Foreign currency contracts 5 | | | () | | | | | | () | | | |
| | |
Commodity contracts 5 | | | () | | | | | | () | | | |
Commodity contracts 6 | | | () | | | | | | | | | |
| Total | $ | | | $ | () | | $ | | | $ | | | $ | () | | $ | | |
| Total liability derivatives | $ | | | $ | () | | $ | | | $ | | | $ | () | | $ | | |
1.Counterparty and cash collateral amounts represent the estimated net settlement amount when applying netting and set-off rights included in master netting arrangements between the Company and its counterparties and the payable or receivable for cash collateral held or placed with the same counterparty.
2.Represents the net amounts included in the consolidated balance sheets.
3.Included in "Other current assets" in the consolidated balance sheets.
4.Included in "Deferred charges and other assets" in the consolidated balance sheets.
5.Included in "Accrued and other current liabilities" in the consolidated balance sheets.
6.Included in "Other noncurrent obligations" in the consolidated balance sheets.
million at December 31, 2024 ($ million at December 31, 2023). cash collateral was posted by counterparties with the Company at December 31, 2024 and December 31, 2023.
| $ | | | $ | | | $ | () | | $ | | | $ | | | Excluded components 3, 5 | | | () | | | | | | | | | |
| Cash flow hedges: | | | | | | |
Interest rate contracts 3 | | | | | | | () | | () | | () | |
Foreign currency contracts 6 | () | | | | | | | | | | | |
| | |
Commodity contracts 6 | | | () | | | | | | () | | | |
Excluded components 5, 6 | () | | () | | | | () | | | | | |
| Net foreign investment hedges: | | | | | | |
| Foreign currency contracts | | | | | | | | | | | | |
Excluded components 5, 7 | | | | | | | | | | | | |
| Total derivatives designated as hedging instruments | $ | | | $ | () | | $ | | | $ | () | | $ | () | | $ | | |
| Derivatives not designated as hedging instruments: | | | | | | |
Interest rate contracts 3 | $ | | | $ | | | $ | | | $ | | | $ | | | $ | () | |
Foreign currency contracts 7 | | | | | | | | | () | | () | |
Commodity contracts 6 | | | | | | | | | | | | |
Total return swap 6 | | | | | | | | | | | | |
| Total derivatives not designated as hedging instruments | $ | | | $ | | | $ | | | $ | | | $ | () | | $ | () | |
| Total derivatives | $ | | | $ | () | | $ | | | $ | | | $ | () | | $ | | |
1.OCI is defined as other comprehensive income (loss).
2.Pretax amounts.
3.Included in "Interest expense and amortization of debt discount" in the consolidated statements of income.
4.Gain (loss) recognized in income of derivatives is offset by gain (loss) recognized in income of the hedged item.
5.The excluded components are related to the time value of the derivatives designated as hedges.
6.Included in "Cost of sales" in the consolidated statements of income.
7.Included in "Sundry income (expense) - net" in the consolidated statements of income.
) | | Commodity contracts | $ | | |
| Foreign currency contracts | $ | | |
| Excluded components | $ | () | |
| Net foreign investment hedges: | |
| Excluded components | $ | | |
NOTE 22 –
| $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | | Money market funds | Level 2 | | | | | | | | | | | | | | | | |
Marketable securities 2 | Level 2 | | | | | () | | | | | | | | () | | | |
Nonconsolidated affiliates 3 | Level 3 | | | | | | | | | | |
| Other investments: | | | | | | | | | |
Debt securities: 4 | | | | | | | | | |
Government debt 5 | Level 2 | | | | | () | | | | | | | | () | | | |
| Corporate bonds | Level 1 | | | | | () | | | | | | | | () | | | |
| Corporate bonds | Level 2 | | | | | () | | | | | | | | () | | | |
| Corporate bonds | Level 3 | | | | | () | | | | | | | | () | | | |
Equity securities 4, 6 | Level 1 | | | | | | | | | | | | | | | | |
Derivatives relating to: 7 | | | | | | | | | |
| Interest rates | Level 2 | — | | | | | | | | — | | | | | | | |
| Foreign currency | Level 2 | — | | | | | | | | — | | | | | | | |
| Commodities | Level 1 | — | | | | | | | | — | | | | | | | |
| Commodities | Level 2 | — | | | | | | | | — | | | | | | | |
| Total assets at fair value | | | | | $ | | | | | | $ | | |
| Liabilities at fair value: | | | | | | | | | |
Long-term debt including debt due within one year 8 | Level 2 | $ | () | | $ | | | $ | () | | $ | () | | $ | () | | $ | | | $ | () | | $ | () | |
Guarantee liability 9 | Level 3 | | | | () | | | | | () | |
Derivatives relating to: 7 | | | | | | | | | |
| Interest rates | Level 2 | — | | | | () | | () | | — | | | | () | | () | |
| Foreign currency | Level 2 | — | | | | () | | () | | — | | | | () | | () | |
| Commodities | Level 1 | — | | | | () | | () | | — | | | | () | | () | |
| Commodities | Level 2 | — | | | | () | | () | | — | | | | () | | () | |
| Total liabilities at fair value | | | | | $ | () | | | | | $ | () | |
1.The Company's held-to-maturity securities primarily relate to treasury bills and time deposits and are included in "Cash and cash equivalents" in the consolidated balance sheets.
2.The Company's investments in marketable securities are included in "Other current assets" in the consolidated balance sheets.
3.Estimated asset for an investment in a limited liability company included in "Investment in nonconsolidated affiliates" in the consolidated balance sheets.
4.The Company's investments in debt securities, which are primarily available-for-sale, and equity securities are included in "Other investments" in the consolidated balance sheets.
5.U.S. Treasury obligations, U.S. agency obligations, U.S. agency mortgage-backed securities and other municipalities' obligations.
6.Equity securities with a readily determinable fair value.
7.See Note 21 for the classification of derivatives in the consolidated balance sheets.
8.Cost includes fair value hedge adjustment gains of $ million at December 31, 2024 and $ million at December 31, 2023 on $ million of debt at December 31, 2024 and $ million of debt at December 31, 2023.
9.Estimated liability for TDCC's guarantee of Sadara's debt which is included in "Other noncurrent obligations" in the consolidated balance sheets. See Note 15 for additional information.
Cost approximates fair value for all other financial instruments.
| $ | | | Recognition of asset 1 | | | | |
Gain (Loss) included in AOCL 2 | | | () | |
| Balance at Dec 31 | $ | | | $ | | |
1.Included in "Other investments" in the consolidated balance sheets.
For liabilities classified as Level 3 measurements, the fair value is based on significant unobservable inputs including assumptions where there is little, if any, market activity. The fair value of the Company’s accrued liability related to the guarantee of Sadara's debt is in proportion to the Company's percent ownership interest in Sadara. The estimated fair value of the guarantee was calculated using a "with" and "without" method. The fair value of the debt was calculated "with" the guarantee less the fair value of the debt "without" the guarantee. The "with" and "without" values were calculated using a discounted cash flow method based on contractual cash flows as well as projected prepayments made on the debt by Sadara. See Note 15 for further information on guarantees classified as Level 3 measurements.
) | $ | () | | |
|
|
|
|
| | | $ | | |
|
|
|
|
2024 Fair Value Measurements on a Nonrecurring Basis
As part of the 2023 Restructuring Program, the Company recorded impairment charges for asset write-downs and write-offs of $ million related to the shutdown of certain polyurethanes assets (Industrial Intermediates & Infrastructure), $ million related to the shutdown of certain silicones assets (Performance Materials & Coatings) and $ million related to Corporate, included in "Restructuring and asset related charges - net" in the consolidated statements of income.
In 2024, the Company recorded impairment charges of $ million related primarily to write-downs of certain manufacturing assets in the United States and Italy. The assets, classified as Level 3 measurements, were valued at $ million using unobservable inputs. The impairment charges were included in "Restructuring and asset related charges - net" in the consolidated statements of income and related to Packaging & Specialty Plastics.
2023 Fair Value Measurements on a Nonrecurring Basis
As part of the 2023 Restructuring Program, the Company has or will shut down a number of manufacturing facilities, corporate facilities and miscellaneous assets around the world. The assets associated with this plan were written down to zero. Impairments of leased, non-manufacturing facilities, which were classified as Level 3 measurements, resulted in a write-down of right-of-use assets to a fair value of $ million using unobservable inputs. The impairment charges related to the 2023 Restructuring Program, totaling $ million, were included in "Restructuring and asset related charges - net" in the consolidated statements of income and related to Packaging & Specialty Plastics ($ million), Industrial Intermediates & Infrastructure ($ million), Performance Materials & Coatings ($ million) and Corporate ($ million).
See Note 5 for additional information on the Company's restructuring activities.
The Company's fair value measurements on a nonrecurring basis were insignificant in 2022.
NOTE 23 –
| $ | | |
| Other current assets | | | | |
| Net property | | | | |
| Other noncurrent assets | | | | |
Total assets 1 | $ | | | $ | | |
| Current liabilities | $ | | | $ | | |
|
| Other noncurrent obligations | | | | |
Total liabilities 2 | $ | | | $ | | |
1.Restricted assets totaled $ million and $ million at December 31, 2024 and 2023, respectively.
2.All liabilities were nonrecourse at December 31, 2024 and 2023.
Amounts presented in the consolidated balance sheets and the table above as restricted assets or nonrecourse obligations relating to consolidated VIEs at December 31, 2024 and 2023, are adjusted for intercompany eliminations.
Upon closing of the transaction discussed in Note 18, Dow InfraCo, LLC is expected to be disclosed as a consolidated VIE of the Company.
million ($ million at December 31, 2023), classified as "Investment in nonconsolidated affiliates" in the consolidated balance sheets, representing the Company's maximum exposure to loss.
NOTE 24 –
| $ | | | $ | | | | Cash dividends paid | $ | | | $ | | | $ | | |
1.Dividends declared for the year ended December 31, 2024 included $ million of non-cash dividends.
At December 31, 2024 and 2023, TDCC's intercompany loan balance with Dow Inc. was insignificant.
NOTE 25 –
| $ | | | $ | | | $ | | | | Long-lived assets | $ | | | $ | | | $ | | | $ | | |
| 2023 | | | | |
| Sales to external customers | $ | | | $ | | | $ | | | $ | | |
| Long-lived assets | $ | | | $ | | | $ | | | $ | | |
| 2022 | | | | |
| Sales to external customers | $ | | | $ | | | $ | | | $ | | |
| Long-lived assets | $ | | | $ | | | $ | | | $ | | |
| $ | | | $ | | | $ | | | | Cost of sales | | | | | | | | |
SARD 2 | | | | | | | | |
| Equity in earnings (losses) of nonconsolidated affiliates | | | () | | | | () | |
Other segment income (expense) items 3 | | | | | () | | | |
Segment Operating EBIT 4 | $ | | | $ | | | $ | | | $ | | |
| 2023 | | | | |
| Net sales | $ | | | $ | | | $ | | | $ | | |
| Cost of sales | | | | | | | | |
SARD 2 | | | | | | | | |
| Equity in earnings (losses) of nonconsolidated affiliates | | | () | | | | () | |
Other segment income (expense) items 3 | () | | | | () | | () | |
Segment Operating EBIT 4 | $ | | | $ | | | $ | | | $ | | |
| 2022 | | | | |
| Net sales | $ | | | $ | | | $ | | | $ | | |
| Cost of sales | | | | | | | | |
SARD 2 | | | | | | | | |
| Equity in earnings (losses) of nonconsolidated affiliates | | | () | | | | | |
Other segment income (expense) items 3 | | | | | () | | | |
Segment Operating EBIT 4 | $ | | | $ | | | $ | | | $ | | |
1.Significant expense categories are presented on an operating basis, net of the impact of significant items.
2.SARD includes selling, general and administrative and research and development expenses.
3.Other segment items includes amortization of intangibles and sundry income (expense) - net.
4.Segment Operating EBIT for TDCC in 2024, 2023 and 2022, is substantially the same as that of Dow Inc. and therefore is not disclosed separately in the table above. A reconciliation of "Segment Operating EBIT" to "Income before income taxes" is provided in the following table.
| $ | | | $ | | | | + Corporate Operating EBIT | () | | () | | () | |
|
| + Interest income | | | | | | |
| - Interest expense and amortization of debt discount | | | | | | |
| + Significant items | () | | () | | () | |
| Income before income taxes | $ | | | $ | | | $ | | |
| $ | | | $ | | | $ | | | $ | | | $ | | | | Depreciation and amortization | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | |
| Capital expenditures | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | |
| Operating EBIT | $ | | | $ | | | $ | | | $ | | | $ | () | | $ | | |
| 2023 | | | | | | |
| Net sales | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | |
| Depreciation and amortization | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | |
| Capital expenditures | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | |
| Operating EBIT | $ | | | $ | | | $ | | | $ | | | $ | () | | $ | | |
| 2022 | | | | | | |
| Net sales | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | |
| Depreciation and amortization | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | |
| Capital expenditures | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | |
| Operating EBIT | $ | | | $ | | | $ | | | $ | | | $ | () | | $ | | |
1.Corporate contains the reconciliation between the totals for the operating segments and the Company's totals. Net sales for Corporate are primarily related to insurance operations. Corporate expenses are primarily related to insurance operations, salaries and wages and non-business aligned environmental and legal costs.
| $ | | | $ | | | $ | | | $ | | | $ | | | Investments in nonconsolidated affiliates 1 | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | |
| 2023 | | | | | | |
| Total assets | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | |
Investments in nonconsolidated affiliates 1 | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | |
| 2022 | | | | | | |
| Total assets | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | |
Investments in nonconsolidated affiliates 1 | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | |
1.See Note 11 for additional information regarding the Company's investments in nonconsolidated affiliates.
) | $ | () | | $ | | | $ | () | | $ | () | | $ | () | | | | |
| | |
| | |
| | |
Indemnification and other transaction related costs 2 | | | | | | | | | () | | () | |
| Total | $ | () | | $ | () | | $ | | | $ | () | | $ | () | | $ | () | |
1.Includes restructuring charges and implementation and efficiency costs associated with the Company's 2023 Restructuring Program. Also includes gains associated with a previously impaired equity investment and impairment charges related to the write-down of certain manufacturing assets. See Note 5 for additional information.
2.Includes charges associated with agreements entered into with DuPont and Corteva as part of the separation and distribution which, among other matters, provides for cross-indemnities and allocations of obligations and liabilities for periods prior to, at and after the completion of the separation. Also includes a charge related to an arbitration settlement agreement for historical product claims from a divested business. See Note 15 for additional information.
) | $ | () | | $ | () | | $ | () | | $ | () | | $ | () | | Litigation related charges, awards and adjustments 2 | | | () | | | | () | | | | () | |
Argentine peso devaluation 3 | () | | () | | | | () | | () | | () | |
Pension settlement charges 4 | | | | | | | | | () | | () | |
Indemnification and other transaction related costs 5 | | | | | | | | | | | | |
| Total | $ | | | $ | () | | $ | () | | $ | () | | $ | () | | $ | () | |
1.Includes restructuring charges and implementation and efficiency costs associated with the Company's 2023 Restructuring Program, partially offset by a credit related to a prior restructuring program. Also includes certain gains and losses associated with previously impaired equity investments.
2.Includes a loss associated with legacy agricultural products groundwater contamination matters, partially offset by a gain associated with a legal matter with Nova Chemicals Corporation. See Note 15 for additional information.
3.Foreign currency losses and inventory valuation impacts related to the devaluation of the Argentine peso by the Argentina government in December 2023.
4.Non-cash settlement charges related to the purchase of nonparticipating group annuity contracts for certain Company pension plans in the United States and Canada. See Note 19 for additional information.
5.Primarily related to charges associated with agreements entered into with DuPont and Corteva as part of the separation and distribution which, among other matters, provides for cross-indemnities and allocations of obligations and liabilities for periods prior to, at and after the completion of the separation.
| | | | | | | | | | | | | | | | | | | | |
Significant Items by Segment for 2022 | Pack. & Spec. Plastics | Ind. Interm. & Infrast. | Perf. Materials & Coatings | Operating Segment Total | Corp. | Total |
| In millions |
Digitalization program costs 1 | $ | | | $ | | | $ | | | $ | | | $ | () | | $ | () | |
Restructuring, implementation costs and asset related charges - net 2 | | | | | | | | | () | | () | |
Russia / Ukraine conflict charges 3 | () | | () | | () | | () | | () | | () | |
Loss on early extinguishment of debt 4 | | | | | | | | | () | | () | |
Litigation related charges, awards and adjustments 5 | | | | | | | | | | | | |
Indemnification and other transaction related costs 6 | | | | | | | | | | | | |
| Total | $ | | | $ | () | | $ | () | | $ | | | $ | () | | $ | () | |
1.Includes costs associated with implementing the Company's Digital Acceleration program.
2.Includes costs associated with implementing the Company's 2020 Restructuring Program.
3.Asset related charges due to the Russia and Ukraine conflict. See Note 5 for additional information.
4.The Company redeemed outstanding long-term debt resulting in a loss on early extinguishment. See Note 14 for additional information.
5.Includes a gain associated with a legal matter with Nova Chemicals Corporation and a gain related to an adjustment of the Dow Silicones breast implant liability. See Note 15 for additional information.
6.Primarily related to charges associated with agreements entered into with DuPont and Corteva as part of the separation and distribution which, among other matters, provides for cross-indemnities and allocations of obligations and liabilities for periods prior to, at and after the completion of the separation.
| | |
| ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE |
Not applicable.
| | |
| ITEM 9A. CONTROLS AND PROCEDURES |
Evaluation of Disclosure Controls and Procedures
As of the end of the period covered by this Annual Report on Form 10-K, Dow Inc. and The Dow Chemical Company (the "Companies") carried out an evaluation, under the supervision and with the participation of the Companies' Disclosure Committee and the Companies' management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of the Companies' disclosure controls and procedures pursuant to paragraph (b) of Exchange Act Rules 13a-15 and 15d-15. Based upon that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that the Companies' disclosure controls and procedures were effective.
Changes in Internal Control Over Financial Reporting
There were no changes in the Companies' internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 and 15d-15 that was conducted during the quarter ended December 31, 2024, that have materially affected, or are reasonably likely to materially affect, the Companies' internal control over financial reporting.
Management’s Report on Internal Control Over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting. The Companies' internal control framework and processes are designed to provide reasonable assurance to management and the Board regarding the reliability of financial reporting and the preparation of the Companies' consolidated financial statements in accordance with accounting principles generally accepted in the United States of America.
The Companies' internal control over financial reporting includes those policies and procedures that:
•pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Companies;
•provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Companies are being made only in accordance with authorizations of management and Directors of the Companies; and
•provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Companies' assets that could have a material effect on the consolidated financial statements.
Because of its inherent limitations, any system of internal control over financial reporting can provide only reasonable assurance and may not prevent or detect misstatements.
Management assessed the effectiveness of the Companies' internal control over financial reporting and concluded that, as of December 31, 2024, such internal control is effective. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control—Integrated Framework (2013).
The Companies' independent auditors, Deloitte & Touche LLP, with direct access to the Board of Directors through the Audit Committee of Dow Inc., have audited the consolidated financial statements prepared by the Companies. Their reports on the consolidated financial statements are included in Part II, Item 8. Financial Statements and Supplementary Data. Deloitte & Touche LLP’s reports on the Companies' internal control over financial reporting are referenced therein and included herein.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and the Board of Directors of Dow Inc.
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of Dow Inc. and subsidiaries (the “Company”) 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 (“COSO”). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements as of and for the year ended December 31, 2024, of the Company and the financial statement schedule listed in the Index at Item 15(a)(2) and our report dated February 4, 2025, expressed an unqualified opinion on those financial statements and financial statement schedule.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
| | |
/S/ DELOITTE & TOUCHE LLP |
| Midland, Michigan |
| February 4, 2025 |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholder and the Board of Directors of The Dow Chemical Company
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of The Dow Chemical Company and subsidiaries (the “Company”) 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 (“COSO”). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements as of and for the year ended December 31, 2024, of the Company and the financial statement schedule listed in the Index at Item 15(a)(2) and our report dated February 4, 2025, expressed an unqualified opinion on those financial statements and financial statement schedule.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
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/S/ DELOITTE & TOUCHE LLP |
| Midland, Michigan |
| February 4, 2025 |
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| ITEM 9B. OTHER INFORMATION |
During the fourth quarter ended December 31, 2024, the Company's directors and officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934, as amended) did not , or modify Rule 10b5-1 or non-rule 10b5-1 trading arrangements (as defined in Item 408 of Regulation S-K).
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| Dow Inc. and Subsidiaries |
| The Dow Chemical Company and Subsidiaries |
| PART III |
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| ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE |
Information relating to Directors, certain executive officers and certain corporate governance matters (including identification of members of the Audit Committee of the Board and financial expert(s)) is contained in the definitive Proxy Statement for the 2025 Annual Meeting of Stockholders of Dow Inc. and is incorporated herein by reference. See also the information regarding executive officers of the registrant set forth in Part I, Item 1. Business under the caption "Executive Officers of the Registrant" in reliance on General Instruction G to Form 10-K.
This information is omitted for The Dow Chemical Company pursuant to General Instruction I of Form 10-K.
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| ITEM 11. EXECUTIVE COMPENSATION |
Information relating to executive compensation and the Company's equity compensation plans is contained in the definitive Proxy Statement for the 2025 Annual Meeting of Stockholders of Dow Inc. and is incorporated herein by reference.
This information is omitted for The Dow Chemical Company pursuant to General Instruction I of Form 10-K.
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| ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |
Information with respect to beneficial ownership of Dow Inc. common stock by each Director and all Directors and executive officers of the Company as a group is contained in the definitive Proxy Statement for the 2025 Annual Meeting of Stockholders of Dow Inc. and is incorporated herein by reference.
Information relating to any person who beneficially owns in excess of 5 percent of the total outstanding shares of Dow Inc. common stock is contained in the definitive Proxy Statement for the 2025 Annual Meeting of the Stockholders of Dow Inc. and is incorporated herein by reference.
Information with respect to compensation plans under which equity securities are authorized for issuance is contained in the definitive Proxy Statement for the 2025 Annual Meeting of Stockholders of Dow Inc. and is incorporated herein by reference.
This information is omitted for The Dow Chemical Company pursuant to General Instruction I of Form 10-K.
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| ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE |
Reportable relationships and related transactions, if any, as well as information relating to director independence are contained in the definitive Proxy Statement for the 2025 Annual Meeting of Stockholders of Dow Inc. and are incorporated herein by reference.
This information is omitted for The Dow Chemical Company pursuant to General Instruction I of Form 10-K.
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| ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES |
Independent Registered Public Accountants
Information with respect to fees and services related to the Company's independent auditors, Deloitte & Touche LLP ("Deloitte"), and the disclosure of the preapproval policies and procedures of the Audit Committee of the Board are contained in the definitive Proxy Statement for the 2025 Annual Meeting of Stockholders of Dow Inc. and are incorporated herein by reference.
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| Dow Inc. and Subsidiaries |
| The Dow Chemical Company and Subsidiaries |
| PART IV |
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| ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES |
(a) The following documents are filed as part of this report:
(1) The Company’s 2024 Consolidated Financial Statements and the Report of Independent Registered Public Accounting Firm (PCAOB ID: ) are included in Part II, Item 8. Financial Statements and Supplementary Data.
(2) Financial Statement Schedules – The following Financial Statement Schedule should be read in conjunction with the Consolidated Financial Statements and Report of Independent Registered Public Accounting Firm included in Part II, Item 8. Financial Statements and Supplementary Data: | | | | | |
| Schedule II | Valuation and Qualifying Accounts |
Schedules other than the one listed above are omitted due to the absence of conditions under which they are required or because the information called for is included in the Consolidated Financial Statements or the Notes to the Consolidated Financial Statements.
(3) The following exhibits are filed with or incorporated by reference into this Annual Report on Form 10-K:
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| Exhibit No. | Description of Exhibit |
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| 2.1 | |
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| 2.2 | |
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| 2.3 | |
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| 2.3.1 | |
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| 3.1 | |
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| 3.2 | |
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| 3.3 | |
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| 3.4 | |
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| 4.1 | |
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| 4.1.1 | |
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| 4.1.2 | |
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| 4.1.3 | |
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| 4.2 | |
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| 4.2.1 | |
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| 4.2.2 | |
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| 4.3 | |
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| 4.4 | Dow Inc. agrees to provide the SEC, on request, copies of all other such indentures and instruments that define the rights of holders of long-term debt of Dow Inc. and its consolidated subsidiaries, including The Dow Chemical Company, pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K. |
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| 4.5 | |
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| 10.1 | |
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| 10.2 | |
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| 10.3 | |
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| 10.4 | |
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| 10.5 | |
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| 10.5.1 | |
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| 10.5.3 | | |
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| 10.5.5 | | |
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| 10.5.6 | | |
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| 10.5.7 | | |
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| 10.5.8 | | |
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| 10.5.9 | | |
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| 10.5.10 | | |
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| 10.5.11 | | |
| 10.6 | | |
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| 10.7 | | |
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| 10.8 | | |
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| 10.9 | | |
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| 10.10 | | |
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| 10.11 | | |
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| 19* | | |
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| 21* | | |
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| 23.1.1* | | |
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| 23.1.2* | | |
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| 23.2* | | |
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| 31.1* | | |
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| 31.2* | | |
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| 32.1* | | |
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| 32.2* | | |
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| 97.1 | | |
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| 97.2* | | |
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| 101.INS | The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |
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| 101.SCH | Inline XBRL Taxonomy Extension Schema Document. | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |
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| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |
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| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. | |
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| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |
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| 104 | The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |
*Filed herewith
A copy of any exhibit can be obtained via the Internet through the Investor Relations section of the Company's website (www.dow.com/investors), or the Company will provide a copy of any exhibit upon receipt of a written request for the particular exhibit or exhibits desired. All requests should be addressed to the Controller and Vice President of Controllers and Tax of the Company at the address of the Company’s principal executive offices. The referenced website and its content are not deemed incorporated by reference into this report.
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| ITEM 16. FORM 10-K SUMMARY |
Not applicable.
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| Dow Inc. and Subsidiaries | |
| The Dow Chemical Company and Subsidiaries | |
| Valuation and Qualifying Accounts | Schedule II |
| $ | | | $ | | | Additions charged to expenses 1 | | | | | | |
|
Deductions from reserves 2 | () | | () | | () | |
| Balance at end of year | $ | | | $ | | | $ | | |
| Inventory - Obsolescence Reserve | | | |
| Balance at beginning of year | $ | | | $ | | | $ | | |
| Additions charged to expenses | | | | | | |
Deductions from reserves 3 | () | | () | | () | |
| Balance at end of year | $ | | | $ | | | $ | | |
| Reserves for Other Investments and Noncurrent Receivables | | | |
| Balance at beginning of year | $ | | | $ | | | $ | | |
Additions charged to expenses 4 | | | | | | |
Deductions from reserves 5 | () | | () | | () | |
| Balance at end of year | $ | | | $ | | | $ | | |
| Deferred Tax Assets - Valuation Allowance | | | |
| Balance at beginning of year | $ | | | $ | | | $ | | |
Additions charged to expenses 6 | | | | | | |
| Deductions from reserves | () | | () | | () | |
| Balance at end of year | $ | | | $ | | | $ | | |
1.Additions included a $ million reclassification from "Reserves for Other Investments and Noncurrent Receivables" in 2024.
2.Deductions included write-offs, recoveries, currency translation adjustments and other miscellaneous items, including a $ million reclassification to "Reserves for Other Investments and Noncurrent Receivables" in 2023.
3.Deductions included disposals and currency translation adjustments.
4.Additions included a $ million reclassification from "Accounts Receivable - Allowance for Doubtful Receivables" in 2023.
5.Deductions included a $ million reclassification to "Accounts Receivable - Allowance for Doubtful Receivables" in 2024, $ million related to the Company's investment in AgroFresh Solutions Inc., which was converted to cash, in 2023, and $ million in 2024, 2023 and 2022 related to the Company's investment in Sadara. See Note 11 to the Consolidated Financial Statements for additional information.
6.Additions in 2023 include increases in valuation allowances related to foreign tax assets that are expected to expire without being utilized.
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| | Dow Inc. and Subsidiaries
The Dow Chemical Company and Subsidiaries | | |
| | Signatures | | |
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized, on February 4, 2025.
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| DOW INC. |
| THE DOW CHEMICAL COMPANY |
|
| /s/ ANDREA L. DOMINOWSKI |
Andrea L. Dominowski, Controller and Vice President of Controllers
(Authorized Signatory and Principal Accounting Officer) |
Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has been signed below on February 4, 2025, by the following persons on behalf of the registrant and in the capacities indicated.
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| /s/ SAMUEL R. ALLEN | | /s/ JEFF M. FETTIG |
| Samuel R. Allen, Director, Dow Inc. | | Jeff M. Fettig, Director, Dow Inc. |
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| /s/ GAURDIE E. BANISTER JR. | | /s/ JIM FITTERLING |
| Gaurdie E. Banister Jr., Director, Dow Inc. | | Jim Fitterling, Director, Chair and Chief Executive Officer, Dow Inc. and TDCC (Principal Executive Officer) |
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| /s/ WESLEY G. BUSH | | /s/ JACQUELINE C. HINMAN |
| Wesley G. Bush, Director, Dow Inc. | | Jacqueline C. Hinman, Director, Dow Inc. |
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| /s/ RICHARD K. DAVIS | | /s/ LUIS ALBERTO MORENO MEJIA |
| Richard K. Davis, Lead Director, Dow Inc. | | Luis Alberto Moreno Mejia, Director, Dow Inc. |
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| /s/ JERRI DEVARD | | /s/ JEFFREY L. TATE |
| Jerri DeVard, Director, Dow Inc. | | Jeffrey L. Tate, Chief Financial Officer, Dow Inc. and TDCC; Director, TDCC
(Principal Financial Officer) |
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| /s/ DEBRA L. DIAL | | /s/ JILL S. WYANT |
| Debra L. Dial, Director, Dow Inc. | | Jill S. Wyant, Director, Dow Inc. |
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| /s/ ANDREA L. DOMINOWSKI | | /s/ DANIEL W. YOHANNES |
| Andrea L. Dominowski, Controller and Vice President of Controllers, Dow Inc. and TDCC (Authorized Signatory and Principal Accounting Officer) | | Daniel W. Yohannes, Director, Dow Inc. |
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Dow Inc. and Subsidiaries
The Dow Chemical Company and Subsidiaries |
| Trademark Listing |
The following trademarks or service marks of The Dow Chemical Company and certain affiliated companies of Dow appear in this report: ACOUSTICRYL, ACRYSOL, ACUSOL, AMPLIFY, AQUASET, AVANSE, CARBOWAX, DECARBIA, DOW, DOWANOL, DOWFROST, DOWSIL, DOWTHERM, ELEVATE, EVOQUE, FASTRACK, FORMASHIELD, MAINCOTE, PRIMAL, RENUVA, REVOLOOP, RHOPLEX, SENTRY, SILASTIC, SPECFLEX, SUNSPHERES, SYL-OFF, TAMOL, TERGITOL, TRITON, UCAR, UCARSOL, UCON, VERSENE, WALOCEL
The following registered service mark of American Chemistry Council in the United States appears in this report:
Responsible Care®
The following trademark of the Business Intelligence Group™ appears in this report: BIG Innovation Awards
The following trademark of Clarivate™ appears in this report: Top 100 Global Innovators™
The following registered trademark of US Business Leadership Network, Inc. appears in this report: Disability Equality Index ®, Best Places to Work for Disability Inclusion®
The following trademark of The Edison Awards™ appears in this report: Edison Awards™
The following trademark of Evonik Operations GmbH appears in this report: HYPROSYN®
The following trademarks and registered trademarks of Great Place to Work® Institute, Inc. appears in this report: Great Place to Work®, Fortune 100 Best Companies to Work For®
The following trademarks of Ti Gotham Inc. appears in this report: PEOPLE®, PEOPLE® Companies that Care
The following registered trademark of InspereX Holdings LLC appears in this report: InterNotes®
® ™ Trademark of The Dow Chemical Company ("TDCC") or an affiliated company, except as otherwise specified.
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