Dow Inc.
10/23/2026 | Press release | Distributed by Public on 10/23/2026 05:45
Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)
| MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. |
This Quarterly Report on Form 10-Q is a combined report being filed by Dow Inc. and The Dow Chemical Company and its consolidated subsidiaries ("TDCC" and together with Dow Inc., "Dow" or the "Company") due to the parent/subsidiary relationship between Dow Inc. and TDCC. The information reflected in the report is equally applicable to both Dow Inc. and TDCC, except where otherwise noted. Each of Dow Inc. and TDCC is filing information in this report on its own behalf and neither company makes any representation to the information relating to the other company.
Pursuant to General Instruction H(1)(a) and (b) for Form 10-Q "Omission of Information by Certain Wholly-Owned Subsidiaries," TDCC is filing this Form 10-Q with the reduced disclosure format.
Except as otherwise indicated by the context, the term "Union Carbide" means Union Carbide Corporation, a wholly owned subsidiary of the Company. Additionally, the term "Diamond Infrastructure Solutions" means Dow InfraCo, LLC, an entity that owns and operates infrastructure assets at certain Dow locations on the U.S. Gulf Coast and became a consolidated variable interest entity upon the sale of a portion of the entity's membership interests on May 1, 2025. The term "EMEAI" refers to the geographic region of Europe, Middle East, Africa and India.
Dow's website and its content are not deemed incorporated by reference into this report.
STATEMENT ON MIDDLE EAST CONFLICT
During 2026, the ongoing conflict involving Iran, Israel, and the United States and the resulting regional instability have disrupted global energy and petrochemical supply chains. The Strait of Hormuz remains a critical shipping corridor for crude oil, refined products, liquefied natural gas, and chemical feedstocks. Although diplomatic efforts continue and the intensity and nature of the conflict have varied, no comprehensive resolution has been reached. Continuing attacks and other security incidents involving commercial vessels, severe restrictions on maritime transit, and limitations on access to certain regional ports and trade routes have continued to affect global markets. These conditions have contributed to volatility in energy and feedstock prices, disruptions to regional production and logistics networks, longer transit times, and shifts in global trade flows as production and sourcing have been rebalanced to alternative regions. As a result, portions of the global chemical industry have experienced supply constraints, increased transportation and operating costs, and reduced supply chain reliability, particularly in Asia Pacific and Europe. Additionally, the Company's joint ventures located in the Middle East have been directly impacted by the conflict.
The Company operates in cost-advantaged geographic regions, including the U.S. & Canada and Latin America, which have not been directly impacted by the Middle East conflict. Additionally, the Company's feedstock flexibility has allowed the Company to operate its European assets competitively, despite the volatile energy and feedstock environment.
TRANSFORM TO OUTPERFORM
In 2026, the Company announced Transform to Outperform, a comprehensive set of actions designed to improve near-term Operating EBITDA by simplifying the Company's operating model, reducing its cost structure and delivering faster growth. Transform to Outperform is expected to deliver approximately $2 billion near-term Operating EBITDA improvement from productivity improvements and growth and is accretive to the $1 billion structural cost reductions announced in the first quarter of 2025. In the first nine months of 2026, the Company delivered approximately $450 million in Operating EBITDA improvement from Transform to Outperform.
OUTLOOK
Dow is building a more resilient and competitive company that is positioned to create long-term value through continued focus on three priorities. First, driving growth and innovation in higher-value areas of its businesses where demand is growing well above GDP - including applications for AI infrastructure, home and personal care, electronics, flexible packaging and mobility. Second, the Company is taking action to strengthen the competitiveness of its portfolio by investing in differentiated low-cost positions while shutting down higher-cost upstream capacity. And third, Dow is maintaining a disciplined and balanced approach to capital allocation that supports long-term shareholder value creation. These priorities are underpinned by the Company's self-help actions, which are on track to deliver more than $1 billion of Operating EBITDA uplift in both 2026 and 2027.
OVERVIEW
The following is a summary of the results for the three months ended September 30, 2026:
•The Company reported net sales in the third quarter of 2026 of $11.3 billion, up 13 percent from $10.0 billion in the third quarter of 2025; Packaging & Specialty Plastics (up 18 percent), Industrial Intermediates & Infrastructure and Performance Materials & Coatings (both up 8 percent). Net sales increased in all geographic regions except Asia Pacific; EMEAI (up 18 percent), the U.S. & Canada (up 16 percent), Latin America (up 15 percent), partially offset by Asia Pacific (down 3 percent).
•Local price increased 14 percent compared with the third quarter of 2025 and was up in all operating segments; Packaging & Specialty Plastics (up 17 percent), Industrial Intermediates & Infrastructure (up 16 percent) and Performance Materials & Coatings (up 5 percent). Local price was up in all geographic regions; EMEAI (up 17 percent), the U.S. & Canada (up 14 percent), Latin America (up 12 percent) and Asia Pacific (up 9 percent).
•The impact of currency on net sales compared with the third quarter of 2025 was flat.
•Volume decreased 1 percent compared with the third quarter of 2025 and was mixed by operating segment; Packaging & Specialty Plastics (up 1 percent), Industrial Intermediates & Infrastructure (down 7 percent) and Performance Materials & Coatings (up 3 percent). Volume decreased in Asia Pacific (down 12 percent) and was partially offset by increases in Latin America (up 3 percent) and the U.S. & Canada and EMEAI (both up 2 percent).
•Restructuring and asset related charges - net was $9 million in the third quarter of 2026, compared with $23 million in the third quarter of 2025. The third quarter of 2026 included pretax charges related to severance and related benefit costs associated with Transform to Outperform. The third quarter of 2025 included asset write-downs and write-offs and exit and disposal costs related to asset actions associated with the 2025 Restructuring Program.
•Equity in earnings (losses) of nonconsolidated affiliates was earnings of $12 million in the third quarter of 2026, compared with equity in losses of nonconsolidated affiliates of $72 million in the third quarter of 2025. The increase in equity earnings was primarily driven by the Company's suspension of the recognition of its share of equity losses from the Sadara joint venture in 2026.
•Net income available for Dow Inc. and TDCC common stockholder(s) was $458 million and $459 million, respectively, in the third quarter of 2026, compared with $62 million in the third quarter of 2025. Earnings per share for Dow Inc. was $0.62 per share in the third quarter of 2026, compared with $0.08 per share in the third quarter of 2025.
•Cash provided by operating activities - continuing operations was $1,839 million in the third quarter of 2026, up $709 million compared with the third quarter of 2025. The increase is primarily driven by improved earnings and a higher release of working capital in the third quarter of 2026.
•On July 1, 2026, Karen S. Carter became Chief Executive Officer and Director of Dow Inc. and TDCC. She succeeded Jim Fitterling, who transitioned from Chief Executive Officer to Executive Chair of Dow Inc., effective July 1, 2026.
•On July 15, 2026, the Company received a refund from the Canada Revenue Agency of $452 million Canadian dollars (equivalent to $318 million U.S. dollars) associated with withholding taxes on the judgment paid by Nova Chemicals Corporation ("Nova") in connection with a legal matter in the first quarter of 2026.
•On July 30, 2026, Standard & Poor's affirmed TDCC's BBB- and A-3 rating, and revised its outlook to stable from negative.
•On August 3, 2026, the Company announced that Nestor de Mattos had been named President of Industrial Intermediates & Infrastructure.
•On August 12, 2026, Dow Inc. announced that its Board declared a dividend of $0.35 per share, payable on September 11, 2026, to shareholders of record on August 31, 2026. This marks the 460th consecutive dividend paid by the Company or its affiliates since 1912.
•At September 30, 2026, the Company had approximately 31,600 employees.
In addition, the following events occurred subsequent to the third quarter of 2026:
•On October 15, 2026, Dow Inc. announced that its Board declared a dividend of $0.35 per share, payable on December 11, 2026, to shareholders of record on November 30, 2026. This marks the 461st consecutive dividend paid by the Company or its affiliates since 1912.
•On October 16, 2026, the Company announced that Charles Zimmer, Jr. had been named President of Performance Materials & Coatings.
RESULTS OF OPERATIONS
Net Sales
The following tables summarize net sales and sales variances by operating segment and geographic region from the prior year:
| Summary of Sales Results | Three Months Ended | Nine Months Ended | ||||||||||||
| In millions | Sep 30, 2026 | Sep 30, 2025 | Sep 30, 2026 | Sep 30, 2025 | ||||||||||
| Net sales | $ | 11,267 | $ | 9,973 | $ | 33,153 | $ | 30,508 | ||||||
| Sales Variances by Operating Segment and Geographic Region |
Three Months Ended Sep 30, 2026
|
Nine Months Ended Sep 30, 2026
|
||||||||||||||||||||||||
| Percentage change from prior year | Local Price & Product Mix | Currency | Volume | Total | Local Price & Product Mix | Currency | Volume | Total | ||||||||||||||||||
| Packaging & Specialty Plastics | 17 | % | - | % | 1 | % | 18 | % | 12 | % | 1 | % | (1) | % | 12 | % | ||||||||||
| Industrial Intermediates & Infrastructure | 16 | (1) | (7) | 8 | 8 | 1 | (5) | 4 | ||||||||||||||||||
| Performance Materials & Coatings | 5 | - | 3 | 8 | 2 | 1 | 4 | 7 | ||||||||||||||||||
| Total | 14 | % | - | % | (1) | % | 13 | % | 9 | % | 1 | % | (1) | % | 9 | % | ||||||||||
| Total, excluding the Hydrocarbons & Energy business | 12 | % | - | % | (2) | % | 10 | % | 8 | % | 1 | % | (1) | % | 8 | % | ||||||||||
| U.S. & Canada | 14 | % | - | % | 2 | % | 16 | % | 8 | % | - | % | - | % | 8 | % | ||||||||||
| EMEAI | 17 | (1) | 2 | 18 | 10 | 4 | (2) | 12 | ||||||||||||||||||
| Asia Pacific | 9 | - | (12) | (3) | 5 | 1 | (8) | (2) | ||||||||||||||||||
| Latin America | 12 | - | 3 | 15 | 12 | - | 7 | 19 | ||||||||||||||||||
| Total | 14 | % | - | % | (1) | % | 13 | % | 9 | % | 1 | % | (1) | % | 9 | % | ||||||||||
Net sales in the third quarter of 2026 were $11.3 billion, up 13 percent from $10.0 billion in the third quarter of 2025, with local price up 14 percent and volume down 1 percent. Net sales increased in all operating segments and all geographic regions except Asia Pacific. Local price increased in all geographic regions and all operating segments, with Packaging & Specialty Plastics up 17 percent, Industrial Intermediates & Infrastructure up 16 percent, and Performance Materials & Coatings up 5 percent. Volume decreased 1 percent, driven by Asia Pacific (down 12 percent), partially offset by increases in Latin America (up 3 percent) and the U.S. & Canada and EMEAI (both up 2 percent). Volume increased in Packaging & Specialty Plastics (up 1 percent), decreased in Industrial Intermediates & Infrastructure (down 7 percent), and increased in Performance Materials & Coatings (up 3 percent). Excluding the Hydrocarbons & Energy business, net sales increased 10 percent.
Net sales in the first nine months of 2026 were $33.2 billion, up 9 percent from $30.5 billion in the first nine months of 2025, with local price up 9 percent, volume down 1 percent, and favorable currency impact of 1 percent. Net sales increased in all operating segments and all geographic regions except Asia Pacific. Local price increased in all geographic regions and all operating segments, with Packaging & Specialty Plastics up 12 percent, Industrial Intermediates & Infrastructure up 8 percent, and Performance Materials & Coatings up 2 percent. Volume decreased 1 percent, driven by Asia Pacific (down 8 percent) and EMEAI (down 2 percent), partially offset by increases in Latin America (up 7 percent) with the U.S. & Canada flat. Volume decreased in Packaging & Specialty Plastics (down 1 percent) and Industrial Intermediates & Infrastructure (down 5 percent) and increased in Performance Materials & Coatings (up 4 percent). Currency favorably impacted net sales by 1 percent, driven by EMEAI (up 4 percent) and Asia Pacific (up 1 percent). Excluding the Hydrocarbons & Energy business, net sales increased 8 percent.
Cost of Sales
Cost of sales ("COS") was $9.9 billion in the third quarter of 2026, compared with $9.2 billion in the third quarter of 2025. COS increased in the third quarter of 2026 primarily due to higher raw material, feedstock and energy costs, higher logistics costs, and increased planned maintenance turnaround spending, partially offset by the Company's cost reduction initiatives. For the first nine months of 2026, COS was $29.0 billion compared with $28.5 billion in the first nine months of 2025. COS for the first nine months of 2026 increased primarily due to the impact of performance-based compensation costs, higher logistics costs, higher raw material, feedstock and energy costs, and increased planned maintenance turnaround spending, partially offset by the Company's cost reduction initiatives. COS as a percentage of net sales was 87.8 percent in the third quarter of 2026 (92.7 percent in the third quarter of 2025) and 87.4 percent for the first nine months of 2026 (93.5 percent for the first nine months of 2025).
Research and Development Expenses
Research and development ("R&D") expenses totaled $180 million in the third quarter of 2026, compared with $191 million in the third quarter of 2025. R&D expenses decreased in the third quarter of 2026 primarily due to the impact of the Company's cost reduction initiatives. R&D expenses for the first nine months of 2026 were $568 million, compared with $579 million for the first nine months of 2025. R&D expenses for the first nine months of 2026 decreased primarily due to the Company's cost reduction initiatives, partially offset by higher performance-based compensation costs.
Selling, General and Administrative Expenses
Selling, general and administrative ("SG&A") expenses totaled $408 million in the third quarter of 2026, compared with $340 million in the third quarter of 2025. SG&A expenses increased in the third quarter of 2026 primarily due to costs to achieve Transform to Outperform which more than offset the Company's cost reduction initiatives. For the first nine months of 2026, SG&A expenses were $1,360 million, compared with $1,053 million in the first nine months of 2025. SG&A expenses for the first nine months of 2026 increased primarily due to costs to achieve Transform to Outperform and higher performance-based compensation costs, partially offset by the Company's cost reduction initiatives. Costs to achieve Transform to Outperform will continue to be incurred through 2027.
Amortization of Intangibles
Amortization of intangibles was $40 million in the third quarter of 2026 compared with $46 million in the third quarter of 2025. In the first nine months of 2026, amortization of intangibles was $126 million, compared with $185 million in the first nine months of 2025. Amortization of intangibles decreased primarily due to certain intangible assets becoming fully amortized in 2025.
Restructuring and Asset Related Charges - Net
Transform to Outperform
On January 26, 2026, the Dow Inc. Board of Directors ("Board") approved Transform to Outperform, a comprehensive set of actions designed to improve near-term Operating EBITDA by simplifying the Company's operating model, reducing its cost structure and delivering faster growth. As a result of these actions, the Company recorded pretax charges of $27 million and $445 million in the first and second quarters of 2026, respectively, for severance and related benefit costs, related to Corporate. In the third quarter of 2026, the Company recorded pretax charges of $9 million for severance and related benefit costs, related to Corporate. See Note 4 to the Consolidated Financial Statements for additional information.
2025 Restructuring Program
On January 27, 2025, the Board approved targeted actions to further achieve the Company's cost reduction initiatives in response to ongoing macroeconomic uncertainty, while reinforcing its long-term competitiveness across the economic cycle. As a result of these actions, in the first quarter of 2025, the Company recorded pretax charges of $207 million for severance and related benefit costs, related to Corporate.
On June 30, 2025, the Board approved restructuring actions to rationalize the Company's global asset footprint, including certain actions identified as part of the Company's previously announced strategic review of its European assets and certain corporate and other assets, and to enhance the Company's competitiveness over the economic cycle. The program includes asset write-down and write-off charges, severance and related benefit costs and other exit and disposal costs. As a result of these actions, in the second quarter of 2025, the Company recorded pretax restructuring charges of $591 million, consisting of severance and related benefit costs of $154 million, asset write-downs and write-offs of $334 million and costs associated with exit and disposal activities of $103 million. Restructuring charges by segment were as follows: $158 million in Packaging & Specialty Plastics, $89 million in Industrial Intermediates & Infrastructure, $147 million in Performance Materials & Coatings and $197 million in
Corporate. In the third quarter of 2025, the Company recorded additional pretax restructuring charges of $23 million, consisting of asset write-downs and write-offs of $8 million and costs associated with exit and disposal activities of $15 million. The additional restructuring charges by segment were as follows: $3 million in Packaging & Specialty Plastics, $6 million in Industrial Intermediates & Infrastructure, $3 million in Performance Materials & Coatings and $11 million in Corporate. In the second quarter of 2026, the Company recorded additional pretax restructuring charges of $58 million, consisting of asset write-downs and write-offs of $8 million and costs associated with exit and disposal activities of $50 million. Restructuring charges by segment were as follows: $1 million in Industrial Intermediates & Infrastructure and $57 million in Performance Materials & Coatings. See Note 4 to the Consolidated Financial Statements for additional information.
2023 Restructuring Program
Actions related to the restructuring program approved by the Board on January 25, 2023 were complete at the end of the second quarter of 2025. In the first quarter of 2025, the Company recorded an additional pretax restructuring charge of $5 million for asset write-downs and write-offs and an asset related credit adjustment of $4 million, related to Industrial Intermediates & Infrastructure. See Note 4 to the Consolidated Financial Statements for additional information.
Equity in Earnings (Losses) of Nonconsolidated Affiliates
The Company's share of equity in earnings (losses) of nonconsolidated affiliates was earnings of $12 million in the third quarter of 2026, compared with equity in losses of nonconsolidated affiliates of $72 million in the third quarter of 2025, driven by the Company's suspension of the recognition of its share of equity losses from the Sadara joint venture in 2026. The Company's share of equity in losses of nonconsolidated affiliates was $255 million for the first nine months of 2026, compared with equity in losses of nonconsolidated affiliates of $122 million for the first nine months of 2025. The increase in equity in losses of nonconsolidated affiliates was primarily related to an adjustment to the Company's liability associated with its guarantee of Sadara's project financing debt, related to Packaging & Specialty Plastics ($81 million) and Industrial Intermediates & Infrastructure ($211 million), and lower results at the Company's Kuwait joint ventures. This was partially offset by the Company suspending recognition of its share of equity losses from Sadara in 2026. Cash dividends from nonconsolidated affiliates were $279 million for the first nine months of 2026, compared with $190 million for the first nine months of 2025. See Notes 9 and 12 to the Consolidated Financial Statements for additional information.
Sundry Income (Expense) - Net
Sundry income (expense) - net in the third quarter of 2026 was income of $50 million for Dow Inc. and TDCC, compared with income of $185 million and $184 million, respectively, in the third quarter of 2025. The third quarter of 2026 included a gain associated with the Nova ethylene asset matter, non-operating pension and postretirement benefit plan credits, and foreign currency exchange gains, partially offset by a loss on early extinguishment of debt. The third quarter of 2025 included a gain from the divestiture of the Company's ownership interest in a nonconsolidated affiliate, non-operating pension and postretirement benefit plan credits and foreign currency exchange gains, partially offset by a loss on early extinguishment of debt. See Notes 5, 12, and 16 to the Consolidated Financial Statements for additional information.
Sundry income (expense) - net for the first nine months of 2026 was income of $296 million and $289 million for Dow Inc. and TDCC, respectively, compared with income of $345 million and $360 million, respectively, for the first nine months of 2025. The first nine months of 2026 included a gain associated with the Nova ethylene asset matter, foreign currency exchange gains, gains on the sales of other assets and investments, and non-operating pension and postretirement benefit plan credits, partially offset by a loss on early extinguishment of debt. The first nine months of 2025 included gains from the divestiture of the Company's soil fumigation product line and its ownership interest in a nonconsolidated affiliate, non-operating pension and postretirement benefit plan credits, and foreign currency exchange gains, partially offset by a loss on early extinguishment of debt. See Notes 5, 12, and 16 to the Consolidated Financial Statements for additional information.
Interest Expense and Amortization of Debt Discount
Interest expense and amortization of debt discount was $211 million in the third quarter of 2026, compared with $221 million in the third quarter of 2025. Interest expense and amortization of debt discount was $640 million in the first nine months of 2026, compared with $646 million in the first nine months of 2025. See Liquidity and Capital Resources in Management's Discussion and Analysis of Financial Condition and Results of Operations for additional information.
Provision (Credit) for Income Taxes
The Company's effective tax rate fluctuates based on, among other factors, where income is earned, the level of income relative to tax attributes and the level of equity earnings, since most earnings from the Company's equity method investments are taxed at the joint venture level. In the third quarter of 2026, the Company reported a provision for income taxes of $117 million, resulting in an effective tax rate of 18.2 percent. In the third quarter of 2025, the Company reported a credit for income taxes of $54 million, resulting in a negative effective tax rate of 77.1 percent. For the first nine months of 2026, the Company reported a provision for income taxes of $241 million, resulting in an effective tax rate of 21.5 percent. For the first nine months of 2025, the Company reported a provision for income taxes of $4 million, resulting in a negative effective tax rate of 0.4 percent. The reported provision (credit) for income taxes and effective tax rates for TDCC are substantially similar.
The credit for income taxes in the third quarter of 2025 was impacted by the recording of a tax benefit stemming from the U.S. Tax Court's decision in Varian Medical Systems Inc. v. Commissioner of $100 million and a tax benefit of $20 million related to the sale of an additional portion of the Company's membership interests in Diamond Infrastructure Solutions, partially offset by losses attributable to jurisdictions for which no tax benefit can be recognized. The provision for income taxes for the first nine months of 2025 was also impacted by the recording of valuation allowances in certain foreign jurisdictions of $242 million and losses attributable to jurisdictions for which no tax benefit can be recognized, partially offset by a tax benefit of $89 million related to the initial sale of a portion of the Company's membership interests in Diamond Infrastructure Solutions. These factors resulted in a negative effective tax rate for both periods.
Net Income Attributable to Noncontrolling Interests
Net income attributable to noncontrolling interests was $67 million in the third quarter of 2026, compared with $62 million in the third quarter of 2025. Net income attributable to noncontrolling interests was $236 million in the first nine months of 2026, compared with $113 million for the first nine months of 2025. The increase in net income attributable to noncontrolling interests reflects the ownership interest in Diamond Infrastructure Solutions held by InfraPark Holdings, LLC, which purchased 40 percent of the membership interests in Diamond Infrastructure Solutions in the second quarter of 2025 and an additional 9 percent in the third quarter of 2025. See Notes 15 and 20 to the Consolidated Financial Statements for additional information.
Net Income (Loss) Available for Common Stockholder(s)
Dow Inc.
Net income available for Dow Inc. common stockholders was $458 million, or $0.62 per share, in the third quarter of 2026, compared with $62 million, or $0.08 per share, in the third quarter of 2025. Net income (loss) available for Dow Inc. common stockholders was income of $646 million, or $0.88 per share, in the first nine months of 2026, compared with a loss of $1,080 million, or $1.53 per share, in the first nine months of 2025. See Note 7 to the Consolidated Financial Statements for details on Dow Inc.'s earnings per share calculations.
TDCC
Net income available for the TDCC common stockholder was $459 million in the third quarter of 2026, compared with $62 million in the third quarter of 2025. Net income (loss) available for the TDCC common stockholder was income of $643 million in the first nine months of 2026, compared with a loss of $1,059 million in the first nine months of 2025. TDCC's common shares are owned solely by Dow Inc.
SEGMENT RESULTS
For further discussion of the Company's segments, see Part I, Item 1. Business of the combined Dow Inc. and TDCC Annual Report on Form 10-K for the fiscal year ended December 31, 2025 ("2025 10-K"), filed with the SEC on February 3, 2026.
Dow's measure of profit/loss for segment reporting purposes is Operating EBIT as this is the manner in which the chief executive officer, chief financial officer, general counsel, and senior vice president of corporate development, together the chief operating decision maker ("CODM"), assesses performance and allocates resources for the three operating segments. The CODM compares quarterly results to both the year-ago and sequential periods to assess performance and allocate resources to each segment. The Company defines Operating EBIT as earnings (i.e., "Income (loss) before income taxes") before interest, excluding the impact of significant items. Operating EBIT by segment includes all operating items relating to the businesses; items that principally apply to Dow as a whole are assigned to Corporate. See Note 21 to the Consolidated Financial Statements for reconciliations of these measures.
PACKAGING & SPECIALTY PLASTICS
| Packaging & Specialty Plastics | Three Months Ended | Nine Months Ended | ||||||||||||
| In millions | Sep 30, 2026 | Sep 30, 2025 | Sep 30, 2026 | Sep 30, 2025 | ||||||||||
| Net sales | $ | 5,778 | $ | 4,891 | $ | 17,082 | $ | 15,226 | ||||||
| Operating EBIT | $ | 585 | $ | 199 | $ | 2,071 | $ | 612 | ||||||
|
Equity earnings (losses) 1
|
$ | (3) | $ | (6) | $ | (47) | $ | 40 | ||||||
1.The nine months ended September 30, 2026 includes a significant item for $81 million of losses related to an adjustment to the Company's liability associated with its guarantee of Sadara's project financing debt.
| Packaging & Specialty Plastics | Three Months Ended | Nine Months Ended | ||||||
| Percentage change from prior year | Sep 30, 2026 | Sep 30, 2026 | ||||||
| Change in Net Sales from Prior Period due to: | ||||||||
| Local price & product mix | 17 | % | 12 | % | ||||
| Currency | - | 1 | ||||||
| Volume | 1 | (1) | ||||||
| Total | 18 | % | 12 | % | ||||
Packaging & Specialty Plastics net sales were $5,778 million in the third quarter of 2026, up 18 percent from net sales of $4,891 million in the third quarter of 2025, with local price up 17 percent and volume up 1 percent. Local price increased in Packaging and Specialty Plastics in all geographic regions, driven by higher polyethylene prices. Local price increased in Hydrocarbons & Energy, driven by olefins and aromatics in EMEAI and the U.S. & Canada. Volume decreased in Packaging and Specialty Plastics, driven by polyethylene, which was impacted by the Middle East conflict. Volume increased in Hydrocarbons & Energy, driven by olefins and aromatics in EMEAI, which benefited from the restart of an ethylene cracker that was idled in mid-2025.
Operating EBIT was $585 million in the third quarter of 2026, up $386 million from Operating EBIT of $199 million in the third quarter of 2025. Operating EBIT increased primarily due to higher selling prices and the impact of the Company's self-help initiatives, partially offset by higher raw material and planned maintenance activity costs.
Packaging & Specialty Plastics net sales were $17,082 million in the first nine months of 2026, up 12 percent from net sales of $15,226 million in the first nine months of 2025, with local price up 12 percent, currency up 1 percent, and volume down 1 percent. Local price increased in Packaging and Specialty Plastics in all geographic regions, driven by higher polyethylene prices. Local price increased in Hydrocarbons & Energy, driven by olefins and aromatics in EMEAI and the U.S. & Canada. Currency had a favorable impact on sales in both businesses and was primarily driven by EMEAI. Volume was flat in Packaging and Specialty Plastics as higher volumes in polyethylene were offset by lower nonrecurring licensing sales. Volume decreased in Hydrocarbons & Energy due to planned maintenance activity in the U.S. Gulf Coast.
Operating EBIT was $2,071 million in the first nine months of 2026, up $1,459 million from Operating EBIT of $612 million in the first nine months of 2025. Operating EBIT increased primarily due to higher selling prices and the impact of the Company's self-help initiatives, partially offset by higher raw material, planned maintenance activity and performance-based compensation costs.
INDUSTRIAL INTERMEDIATES & INFRASTRUCTURE
| Industrial Intermediates & Infrastructure | Three Months Ended | Nine Months Ended | ||||||||||||
| In millions | Sep 30, 2026 | Sep 30, 2025 | Sep 30, 2026 | Sep 30, 2025 | ||||||||||
| Net sales | $ | 3,058 | $ | 2,834 | $ | 8,850 | $ | 8,475 | ||||||
| Operating EBIT | $ | 176 | $ | (47) | $ | 304 | $ | (360) | ||||||
|
Equity earnings (losses) 1
|
$ | 11 | $ | (68) | $ | (216) | $ | (165) | ||||||
1.The nine months ended September 30, 2026 includes a significant item for $211 million of losses related to an adjustment to the Company's liability associated with its guarantee of Sadara's project financing debt.
| Industrial Intermediates & Infrastructure | Three Months Ended | Nine Months Ended | ||||||
| Percentage change from prior year | Sep 30, 2026 | Sep 30, 2026 | ||||||
| Change in Net Sales from Prior Period due to: | ||||||||
| Local price & product mix | 16 | % | 8 | % | ||||
| Currency | (1) | 1 | ||||||
| Volume | (7) | (5) | ||||||
| Total | 8 | % | 4 | % | ||||
Industrial Intermediates & Infrastructure net sales were $3,058 million in the third quarter of 2026, up 8 percent from net sales of $2,834 million in the third quarter of 2025, with local price up 16 percent, currency down 1 percent, and volume down 7 percent. Local price increased across both businesses and all geographic regions. Currency had an unfavorable impact on sales and was driven by EMEAI. Volume decreased in Polyurethanes & Construction Chemicals, primarily in Asia Pacific and EMEAI due to the impact of the Middle East conflict. Volume increased in Industrial Solutions, primarily in the U.S. & Canada, driven by increased demand for artificial intelligence infrastructure and energy applications as well as higher catalyst sales, which more than offset declines in Asia Pacific and EMEAI primarily due to the impact of the Middle East conflict.
Operating EBIT was $176 million in the third quarter of 2026, up $223 million from an Operating EBIT loss of $47 million in the third quarter of 2025. Operating EBIT increased due to higher selling prices, the impact of the Company's self-help initiatives and the suspension of the recognition of equity losses from Sadara, partially offset by higher raw material and energy costs.
Industrial Intermediates & Infrastructure net sales were $8,850 million in the first nine months of 2026, up 4 percent from net sales of $8,475 million in the first nine months of 2025, with local price up 8 percent, currency up 1 percent, and volume down 5 percent. Local price increased in both businesses and across all geographic regions. Currency had a favorable impact on sales in both businesses and was driven by EMEAI. Volume decreased in Polyurethanes & Construction Chemicals due to the impact of the Middle East conflict. Volume decreased in Industrial Solutions as the impact of the Middle East conflict more than offset increases in energy applications and higher volumes from recent alkoxylation investments.
Operating EBIT was $304 million in the first nine months of 2026, up $664 million from an Operating EBIT loss of $360 million in the first nine months of 2025. Operating EBIT increased primarily due to higher selling prices, the impact of the Company's self-help initiatives, the suspension of the recognition of equity losses from Sadara and lower planned maintenance activity, partially offset by higher performance-based compensation, raw material and energy costs in EMEAI.
PERFORMANCE MATERIALS & COATINGS
| Performance Materials & Coatings | Three Months Ended | Nine Months Ended | ||||||||||||
| In millions | Sep 30, 2026 | Sep 30, 2025 | Sep 30, 2026 | Sep 30, 2025 | ||||||||||
| Net sales | $ | 2,250 | $ | 2,082 | $ | 6,691 | $ | 6,282 | ||||||
| Operating EBIT | $ | 154 | $ | 80 | $ | 404 | $ | 281 | ||||||
| Equity earnings | $ | 2 | $ | 1 | $ | 4 | $ | 2 | ||||||
| Performance Materials & Coatings | Three Months Ended | Nine Months Ended | ||||||
| Percentage change from prior year | Sep 30, 2026 | Sep 30, 2026 | ||||||
| Change in Net Sales from Prior Period due to: | ||||||||
| Local price & product mix | 5 | % | 2 | % | ||||
| Currency | - | 1 | ||||||
| Volume | 3 | 4 | ||||||
| Total | 8 | % | 7 | % | ||||
Performance Materials & Coatings net sales were $2,250 million in the third quarter of 2026, up 8 percent from net sales of $2,082 million in the third quarter of 2025, with local price up 5 percent and volume up 3 percent. Coatings & Performance Monomers local price increased across all geographic regions, driven by acrylic monomers and architectural coatings. Local price increased in Consumer Solutions in all geographic regions and both businesses, led by consumer and electronics applications. Volume increased in Coatings & Performance Monomers across all geographic regions, driven by higher demand for acrylic monomers and architectural coatings. Volume increased in Consumer Solutions, primarily in the U.S. & Canada. Volume increased in downstream silicones, led by home care and consumer and electronics applications, partially offset by declines in upstream siloxanes following the recent shutdown of the Barry, U.K. basics siloxanes plant.
Operating EBIT was $154 million in the third quarter of 2026, up $74 million from Operating EBIT of $80 million in the third quarter of 2025. Operating EBIT increased in both businesses primarily due to higher selling prices and volumes and the impact of the Company's self-help initiatives, partially offset by increased logistics and raw material costs.
Performance Materials & Coatings net sales were $6,691 million in the first nine months of 2026, up 7 percent from net sales of $6,282 million in the first nine months of 2025, with volume up 4 percent, local price up 2 percent, and a favorable currency impact of 1 percent. Coatings & Performance Monomers volume increased across all geographic regions, primarily in acrylic monomers and architectural coatings. Volume increased in Consumer Solutions, primarily in the U.S. & Canada. Volume increased in downstream silicones, driven by consumer and electronics and home care, partially offset by declines in upstream siloxanes following the recent shutdown of the Barry, U.K. basics siloxanes plant. Local price in Coatings & Performance Monomers increased across all geographic regions, led by acrylic monomers and architectural coatings. Local price was flat in Consumer Solutions as price gains in downstream silicones, driven by consumer and electronics, were offset by declines in upstream siloxanes. The favorable currency impact was driven by EMEAI and Asia Pacific in both businesses.
Operating EBIT was $404 million in the first nine months of 2026, up $123 million from Operating EBIT of $281 million in the first nine months of 2025. Operating EBIT increased in both businesses primarily due to higher selling prices and volumes, the impact of the Company's self-help initiatives, and reduced intangible asset amortization expenses in Consumer Solutions, partially offset by higher logistics and performance-based compensation costs.
CORPORATE
| Corporate | Three Months Ended | Nine Months Ended | ||||||||||||
| In millions | Sep 30, 2026 | Sep 30, 2025 | Sep 30, 2026 | Sep 30, 2025 | ||||||||||
| Net sales | $ | 181 | $ | 166 | $ | 530 | $ | 525 | ||||||
| Operating EBIT | $ | (28) | $ | (52) | $ | (90) | $ | (144) | ||||||
| Equity earnings | $ | 2 | $ | 1 | $ | 4 | $ | 1 | ||||||
Net sales for Corporate, which primarily relate to the Company's insurance operations, were $181 million in the third quarter of 2026, an increase from net sales of $166 million in the third quarter of 2025. Net sales were $530 million in the first nine months of 2026, an increase from net sales of $525 million in the first nine months of 2025.
Operating EBIT was a loss of $28 million in the third quarter of 2026, compared with a loss of $52 million in the third quarter of 2025. Operating EBIT increased primarily due to the benefit of the Company's cost reduction initiatives and the absence of nonrecurring expense items from the prior year. Operating EBIT was a loss of $90 million in the first nine months of 2026, compared with a loss of $144 million in the first nine months of 2025. Operating EBIT increased due to increased investment gains, the impact of the Company's cost reduction initiatives and the absence of nonrecurring expense items from the prior year, partially offset by higher environmental expenses.
CHANGES IN FINANCIAL CONDITION
The Company had cash and cash equivalents of $4,142 million at September 30, 2026 and $3,816 million at December 31, 2025, of which $2,742 million at September 30, 2026 and $2,636 million at December 31, 2025 was held by subsidiaries in foreign countries, including U.S. territories. For each of its foreign subsidiaries, Dow makes an assertion regarding the amount of earnings intended for permanent reinvestment, with the balance available to be repatriated to the United States.
Cash held by foreign subsidiaries for permanent reinvestment is generally used to finance the subsidiaries' operational activities and future foreign investments. Dow has the ability to repatriate additional funds to the United States, which could result in an adjustment to the tax liability for foreign withholding taxes, foreign and/or U.S. state income taxes and the impact of foreign currency movements. At September 30, 2026, management believed that sufficient liquidity was available in the United States. The Company has and expects to continue repatriating certain funds from its non-U.S. subsidiaries that are not needed to finance local operations; however, these particular repatriation activities have not and are not expected to result in a significant incremental tax liability to the Company.
The Company's cash flows from operating, investing and financing activities, as reflected in the consolidated statements of cash flows, are summarized in the following table:
| Cash Flow Summary | Dow Inc. | TDCC | ||||||||||||
| Nine Months Ended | Nine Months Ended | |||||||||||||
|
In millions
|
Sep 30, 2026 | Sep 30, 2025 | Sep 30, 2026 | Sep 30, 2025 | ||||||||||
| Cash provided by (used for): | ||||||||||||||
| Operating activities - continuing operations | $ | 4,287 | $ | 764 | $ | 4,306 | $ | 746 | ||||||
| Operating activities - discontinued operations | 6 | (16) | - | - | ||||||||||
| Operating activities | $ | 4,293 | $ | 748 | $ | 4,306 | $ | 746 | ||||||
| Investing activities | $ | (2,292) | $ | (1,457) | $ | (2,292) | $ | (1,457) | ||||||
| Financing activities | $ | (1,605) | $ | 2,941 | $ | (1,618) | $ | 2,943 | ||||||
Cash Flows from Operating Activities
Cash provided by operating activities from continuing operations in the first nine months of 2026 was primarily driven by the Company's cash earnings, cash received related to a judgment on the ethylene asset matter with Nova, dividends from equity method investments and advance payments received from customers related to long-term supply contracts, partially offset by cash used for working capital, cash paid for severance and related benefit costs, income tax payments and performance-based compensation. Cash provided by operating activities from
continuing operations in the first nine months of 2025 was primarily driven by the Company's cash earnings, advance payments received from customers related to long-term supply contracts and dividends from equity method investments, partially offset by cash used for working capital and performance-based compensation.
| Net Working Capital | Dow Inc. | TDCC | ||||||||||||
| In millions | Sep 30, 2026 | Dec 31, 2025 | Sep 30, 2026 | Dec 31, 2025 | ||||||||||
| Current assets | $ | 20,177 | $ | 18,062 | $ | 20,124 | $ | 18,027 | ||||||
| Current liabilities | 11,493 | 9,183 | 11,379 | 9,076 | ||||||||||
| Net working capital | $ | 8,684 | $ | 8,879 | $ | 8,745 | $ | 8,951 | ||||||
| Current ratio | 1.76:1 | 1.97:1 | 1.77:1 | 1.99:1 | ||||||||||
| Working Capital Metrics | Three Months Ended | ||||||||||
| Sep 30, 2026 | Jun 30, 2026 | Sep 30, 2025 | |||||||||
| Days sales outstanding in trade receivables | 50 | 44 | 48 | ||||||||
| Days sales in inventory | 66 | 64 | 67 | ||||||||
| Days payables outstanding | 65 | 58 | 64 | ||||||||
Cash provided by (used for) operating activities from discontinued operations in the first nine months of 2026 and 2025 reflected cash payments and receipts for certain agreements and matters related to the separation from DowDuPont Inc. ("DowDuPont").
Cash Flows from Investing Activities
Cash used for investing activities in the first nine months of 2026 and 2025 was primarily for capital expenditures and purchases of investments, which were partially offset by proceeds from sales and maturities of investments. The first nine months of 2026 also included cash outflows to nonconsolidated affiliates, primarily related to Sadara (see Note 12 for additional information). The first nine months of 2025 also included a cash inflow related to the sale of the Company's soil fumigation product line and certain related assets, proceeds from incentives related to capital expenditures and the divestiture of the Company's ownership interest in a nonconsolidated affiliate.
The Company's capital expenditures were $1,841 million in the first nine months of 2026, compared with $1,911 million in the first nine months of 2025. The Company expects full year capital spending to be approximately $2.5 billion, including capital spending related to the construction of the Alberta project. As evidenced across this and prior economic cycles, the Company will proactively adjust its spending as economic conditions evolve.
Cash Flows from Financing Activities
Cash used for financing activities in the first nine months of 2026 for Dow Inc. was primarily related to dividends paid to stockholders, payments on long-term debt and distributions to noncontrolling interests. TDCC included cash outflows for dividends paid to Dow Inc. Cash provided by financing activities in the first nine months of 2025 was primarily related to proceeds from the sale of a minority stake in Diamond Infrastructure Solutions and proceeds from the issuance of long-term debt, which were partially offset by dividends paid to stockholders and payments on long-term debt. TDCC included cash outflows for dividends paid to Dow Inc.
Dow Inc. Non-GAAP Cash Flow Measures
Free Cash Flow
Dow defines Free Cash Flow as "Cash provided by operating activities - continuing operations," less capital expenditures. Under this definition, Free Cash Flow represents the cash generated by Dow from operations after investing in its asset base. Free Cash Flow, combined with cash balances and other sources of liquidity, represents the cash available to fund obligations and provide returns to shareholders. Free Cash Flow is an integral financial measure used in the Company's financial planning process.
Operating EBITDA
Dow defines Operating EBITDA as earnings (i.e., "Income (loss) before income taxes") before interest, depreciation and amortization, excluding the impact of significant items.
Cash Flow Conversion (Cash Flow from Operations to Operating EBITDA)
Dow defines Cash Flow Conversion (Cash Flow from Operations to Operating EBITDA) as "Cash provided by (used for) operating activities - continuing operations," divided by Operating EBITDA. Management believes Cash Flow Conversion is an important financial metric as it helps the Company determine how efficiently it is converting its earnings into cash flow.
These financial measures are not recognized in accordance with accounting principles generally accepted in the United States of America ("GAAP") and should not be viewed as alternatives to GAAP financial measures of performance. All companies do not calculate non-GAAP financial measures in the same manner and, accordingly, Dow's definitions may not be consistent with the methodologies used by other companies.
|
Reconciliation of Free Cash Flow
|
Nine Months Ended
|
|||||||
|
In millions
|
Sep 30, 2026 | Sep 30, 2025 | ||||||
| Cash provided by operating activities - continuing operations (GAAP) | $ | 4,287 | $ | 764 | ||||
| Capital expenditures | (1,841) | (1,911) | ||||||
| Free Cash Flow (non-GAAP) | $ | 2,446 | $ | (1,147) | ||||
|
Reconciliation of Cash Flow Conversion (Cash Flow from Operations to Operating EBITDA)
|
Nine Months Ended
|
|||||||
|
In millions
|
Sep 30, 2026 | Sep 30, 2025 | ||||||
| Net income (loss) (GAAP) | $ | 882 | $ | (967) | ||||
| + Provision for income taxes | 241 | 4 | ||||||
| Income (loss) before income taxes | $ | 1,123 | $ | (963) | ||||
| - Interest income | 130 | 114 | ||||||
| + Interest expense and amortization of debt discount | 640 | 646 | ||||||
| - Significant items ¹ | (1,056) | (820) | ||||||
| Operating EBIT (non-GAAP) | $ | 2,689 | $ | 389 | ||||
| + Depreciation and amortization | 2,049 | 2,126 | ||||||
| Operating EBITDA (non-GAAP) | $ | 4,738 | $ | 2,515 | ||||
| Cash provided by operating activities - continuing operations (GAAP) | $ | 4,287 | $ | 764 | ||||
|
Cash flow from operations to net income (GAAP) 2
|
486.1 | % | N/A | |||||
| Cash Flow Conversion (Cash flow from operations to Operating EBITDA) (non-GAAP) | 90.5 | % | 30.4 | % | ||||
1.The nine months ended September 30, 2026 includes severance and related benefit costs and costs to achieve associated with Transform to Outperform; a loss due to change in fair value of the estimated liability associated with the Company's guarantee of Sadara's project financing debt; asset charges; implementation costs, costs associated with exit and disposal activities and impairment charges related to the Company's 2025 Restructuring Program and a loss on early extinguishment of debt; partially offset by gains associated with a legal matter with Nova and amounts associated with agreements entered into with DuPont de Nemours, Inc. ("DuPont") and Corteva, Inc. ("Corteva") as part of the separation and distribution. The nine months ended September 30, 2025 includes severance and related benefit costs, costs associated with exit and disposal activities and impairment charges related to the 2025 Restructuring Program; implementation costs associated with the Company's 2025 Restructuring Program and the sale of membership interests of Diamond Infrastructure Solutions; gains on the sale of the Company's soil fumigation product line and divestiture of the Company's ownership interest in a nonconsolidated affiliate; a gain associated with the reassessment of liabilities for certain accrued legacy agricultural products groundwater contamination matters, partially offset by the settlement of a separate claim related to water storage district legacy groundwater contamination matters; charges associated with agreements entered into with DuPont and Corteva as part of the separation and distribution; charges related to an arbitration agreement for historical product claims from a divested business; a loss on early extinguishment of debt; and restructuring charges and implementation and efficiency costs associated with the Company's 2023 Restructuring Program. See Note 21 to the Consolidated Financial Statements for additional information.
2.Cash flow from operations to net income is not applicable for the nine months ended September 30, 2025 due to a net loss for the period.
Liquidity & Financial Flexibility
The Company's primary source of incremental liquidity is cash flows from operating activities. The generation of cash from operations over the economic cycle and the Company's ability to access capital markets is expected to meet the Company's cash requirements for working capital, capital expenditures, debt maturities, payments associated with Transform to Outperform, contributions to pension plans, dividend distributions to stockholders, share repurchases and other needs. In addition to cash from operating activities, the Company's current liquidity sources also include TDCC's U.S. and Euromarket commercial paper programs, committed and uncommitted credit facilities, committed accounts receivable facilities, a medium-term notes program, a U.S. retail note program ("InterNotes®") and other debt markets.
The Company continues to maintain a strong financial position with all of its committed credit facilities undrawn and fully available at September 30, 2026. Cash and committed and available forms of liquidity were $13.7 billion at September 30, 2026. The Company also has no substantive long-term debt maturities due until 2029. As a well-known seasoned issuer, the Company has ready access to debt capital markets, subject to market conditions, as an additional source of liquidity. Additional details on sources of liquidity are as follows:
Commercial Paper
TDCC issues promissory notes under its U.S. and Euromarket commercial paper programs. TDCC had no commercial paper outstanding at September 30, 2026. 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. TDCC did not issue commercial paper subsequent to September 30, 2026.
Committed Credit Facilities
The Company also has the ability to access liquidity through TDCC's committed and available credit facilities. At September 30, 2026, TDCC had total committed and available credit facilities of $8.2 billion.
Uncommitted Credit Facilities
The Company has entered into various uncommitted bilateral credit arrangements as a potential source of excess liquidity. These lines can be used to support short-term liquidity needs and for general purposes. The Company had no drawdowns outstanding at September 30, 2026.
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 and is set to expire in November 2028. The Company also maintains a committed accounts receivable facility in Europe where eligible trade accounts receivable, up to €400 million, may be sold at any point in time and is set to expire in March 2029. In the first nine months of 2026, there were no sales of receivables under the committed accounts receivable facilities ($106 million in sales of receivables in the first nine months of 2025). No sold receivables were outstanding with the facilities at September 30, 2026.
In addition, the Company has an uncommitted accounts receivable facility in the United States providing additional liquidity, set to expire in November 2028. The Company also maintains an uncommitted accounts receivable facility in Europe providing additional liquidity, set to expire in March 2029. Sales of receivables under the facility in Europe were $6 million in the first nine months of 2026 ($147 million in sales of receivables in the first nine months of 2025). No sold receivables were outstanding with the facilities at September 30, 2026. See Note 10 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. There were no sales of receivables under the discounting facilities in the first nine months of 2026 ($285 million sales of receivables in the first nine months of 2025). No sold receivables were outstanding with the facilities at September 30, 2026. See Note 10 to the Consolidated Financial Statements for additional information.
The Company maintains these facilities and also participates in certain customers' supply chain financing and other early pay programs as a routine source of working capital.
Company-Owned Life Insurance
The Company has investments in company-owned life insurance ("COLI") policies, which are recorded at their cash surrender value as of each balance sheet date. The Company has the ability to monetize its investment in its COLI policies as an additional source of liquidity. At December 31, 2025, the Company had monetized $197 million of its existing COLI policies' cash surrender value. The Company repaid the drawdown against the cash surrender value in 2026 and there was no outstanding monetization of the Company's existing COLI policies' cash surrender value at September 30, 2026. See Note 5 to the Consolidated Financial Statements for additional information.
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 | Dow Inc. | TDCC | ||||||||||||
|
In millions
|
Sep 30, 2026 | Dec 31, 2025 | Sep 30, 2026 | Dec 31, 2025 | ||||||||||
| Notes payable | $ | 16 | $ | 90 | $ | 16 | $ | 90 | ||||||
| Long-term debt due within one year | 745 | 222 | 745 | 222 | ||||||||||
| Long-term debt | 16,778 | 17,849 | 16,778 | 17,849 | ||||||||||
| Gross debt | $ | 17,539 | $ | 18,161 | $ | 17,539 | $ | 18,161 | ||||||
| - Cash and cash equivalents | 4,142 | 3,816 | 4,142 | 3,816 | ||||||||||
|
- Marketable securities 1
|
558 | 385 | 558 | 385 | ||||||||||
| Net debt | $ | 12,839 | $ | 13,960 | $ | 12,839 | $ | 13,960 | ||||||
| Total equity | $ | 17,632 | $ | 17,522 | $ | 17,820 | $ | 17,726 | ||||||
| Gross debt as a percent of total capitalization | 49.9 | % | 50.9 | % | 49.6 | % | 50.6 | % | ||||||
| Net debt as a percent of total capitalization | 42.1 | % | 44.3 | % | 41.9 | % | 44.1 | % | ||||||
1.Included in "Other current assets" in the consolidated balance sheets.
The Company may at any time repurchase certain debt securities in the open market or in privately negotiated transactions subject to: the applicable terms under which any such debt securities were issued, certain internal approvals of the Company, and applicable laws and regulations of the relevant jurisdiction in which any such potential transactions might take place. This in no way obligates the Company to make any such repurchases nor should it be considered an offer to do so.
TDCC's public debt instruments and primary, private credit agreements contain, among other provisions, certain customary restrictive covenant and default provisions. TDCC's most significant debt covenant with regard to its financial position is the obligation to maintain the ratio of its consolidated indebtedness to consolidated capitalization at no greater than 0.70 to 1.00 at any time the aggregate outstanding amount of loans under the Five Year Competitive Advance and Revolving Credit Facility Agreement ("Revolving Credit Agreement") equals or exceeds $500 million. The ratio of TDCC's consolidated indebtedness to consolidated capitalization as defined in the Revolving Credit Agreement was 0.47 to 1.00 at September 30, 2026. Management believes TDCC was in compliance with all of its covenants and default provisions at September 30, 2026. For information on TDCC's debt covenants and default provisions, see Note 14 to the Consolidated Financial Statements included in the 2025 10-K. There were no material changes to the debt covenants and default provisions related to TDCC's outstanding long-term debt and primary, private credit agreements in the first nine months of 2026.
In the second quarter of 2026, the Company redeemed $12 million aggregate principal amount of 6.30 percent notes due March 2033, $10 million aggregate principal amount of 5.65 percent notes due March 2036, $20 million aggregate principal amount of 5.25 percent notes due November 2041, $12 million aggregate principal amount of 5.55 percent notes due November 2048, $10 million aggregate principal amount of 6.90 percent notes due May 2053, and $13 million aggregate principal amount of 5.95 percent notes due March 2055. As a result of the redemption, the Company recognized a pretax gain on the early extinguishment of debt of $3 million, included in "Sundry income (expense) - net" in the consolidated statements of income.
In the third quarter of 2026, the Company redeemed $63 million aggregate principal amount of 7.38 percent notes due November 2029, $13 million aggregate principal amount of 7.85 percent notes due July 2029, $125 million aggregate principal amount of 9.40 percent notes due May 2039, and $99 million aggregate principal amount of 6.90 percent notes due May 2053. As a result of the redemption, the Company recognized a pretax loss on the early extinguishment of debt of $53 million, included in "Sundry income (expense) - net" in the consolidated statements of income, related to Corporate.
In the first nine months of 2026, the Company issued an aggregate principal amount of $100 million of InterNotes®. Additionally, the Company repaid $83 million of long-term debt at maturity.
While taking into consideration the current economic environment, management expects that the Company will continue to have sufficient liquidity and financial flexibility to meet all of its business obligations.
Credit Ratings
At September 30, 2026, TDCC's credit ratings were as follows:
| Credit Ratings | Long-Term Rating | Short-Term Rating | Outlook | ||||||||
| Fitch Ratings | BBB | F2 | Stable | ||||||||
| Moody's Ratings | Baa3 | P-3 | Negative | ||||||||
| Standard & Poor's | BBB- | A-3 | Stable | ||||||||
On February 18, 2026, Standard & Poor's announced a long-term credit rating change for TDCC from BBB to BBB- and a short-term credit rating change from A-2 to A-3, with its outlook remaining negative. On February 27, 2026, Moody's Ratings announced a long-term credit rating change for TDCC from Baa2 to Baa3 and a short-term credit rating change from P-2 to P-3, with its outlook remaining negative. The credit rating agencies' decisions reflect the impact of market conditions on the Company's operating results and cash flow, while recognizing the Company's liquidity, strong asset base and strategic cost actions. On March 16, 2026, Fitch Ratings affirmed TDCC's BBB and F2 rating, with its outlook remaining stable.
On July 30, 2026, Standard & Poor's affirmed TDCC's BBB- and A-3 rating, and revised its outlook to stable from negative. Standard & Poor's decision reflects expectations for improved earnings, credit metrics, and continued progress in the Company's strategic cost actions.
Dividends
Dow Inc.
Dow Inc. has paid dividends on a quarterly basis since the separation from DowDuPont and expects to continue to do so, subject to approval by the Board. The following table summarizes dividends declared and paid to common stockholders of record in 2026:
| Dow Inc. Dividends Declared and Paid | |||||||||||
| Declaration Date | Record Date | Payment Date | Amount (per share) | ||||||||
| February 12, 2026 | February 27, 2026 | March 13, 2026 | $ | 0.35 | |||||||
| April 9, 2026 | May 29, 2026 | June 12, 2026 | $ | 0.35 | |||||||
| August 12, 2026 | August 31, 2026 | September 11, 2026 | $ | 0.35 | |||||||
| October 15, 2026 | November 30, 2026 | December 11, 2026 | $ | 0.35 | |||||||
TDCC
TDCC has committed to fund Dow Inc.'s dividends paid to common stockholders and share repurchases, as approved by the Board, as well as certain governance expenses. Funding is accomplished through intercompany loans. TDCC's Board reviews and determines a dividend distribution to Dow Inc. to settle the intercompany loans. For the three months ended September 30, 2026, TDCC declared and paid a dividend to Dow Inc. of $257 million ($771 million dividend declared and paid to Dow Inc. for the nine months ended September 30, 2026). At September 30, 2026, TDCC's intercompany loan balance with Dow Inc. was insignificant.
Share Repurchase Program
On April 13, 2022, the Board approved a share repurchase program authorizing up to $3 billion for the repurchase of the Company's common stock, with no expiration date. The Company did not repurchase any of its common stock in the first nine months of 2026 or 2025. At September 30, 2026, approximately $931 million of the share repurchase program authorization remained available for repurchases. As previously announced, the Company intends to repurchase shares at a minimum to cover dilution over the economic cycle. The Company may from time to time expand its share repurchases beyond dilution, based on a number of factors including macroeconomic conditions, free cash flow generation, and the Dow share price. Any share repurchases, when coupled with the Company's dividends, are intended to implement the long-term strategy of targeting shareholder remuneration of approximately 65 percent of Operating Net Income over the economic cycle.
Pension Plans
The Company has both funded and unfunded defined benefit pension plans in the United States and a number of other countries. The Company's funding policy is to contribute to plans when pension laws and/or economics either require or encourage funding. The Company expects to contribute approximately $220 million to its pension plans in 2026, of which $138 million has been contributed through September 30, 2026. See Note 16 to the Consolidated Financial Statements and Note 19 to the Consolidated Financial Statements included in the 2025 10-K for additional information related to the Company's pension plans.
Transform to Outperform and Restructuring
Transform to Outperform is expected to result in additional cash expenditures of approximately $800 million over the next two years and consists of severance and related benefit costs, implementation costs, and other costs incurred to achieve the intended uplift in Operating EBITDA. Costs to achieve totaled $60 million and $194 million for the three and nine months ended September 30, 2026, respectively.
The 2025 Restructuring Program is expected to result in additional cash expenditures of approximately $370 million primarily over the next three years and consists of severance and related benefit costs, implementation costs related to decommissioning and demolition and additional costs associated with exit and disposal activities. Restructuring implementation costs totaled $31 million and $80 million for the three and nine months ended September 30, 2026, respectively ($5 million and $10 million for the three and nine months ended September 30, 2025, respectively).
The Company expects to incur additional costs in the future related to its restructuring activities, which will be recognized as incurred. The Company also expects to incur additional employee-related costs, including involuntary termination benefits related to its other optimization activities, including Transform to Outperform. These costs cannot be reasonably estimated at this time. See Note 4 to the Consolidated Financial Statements for additional information on the Company's restructuring activities.
Contractual Obligations
Information related to the Company's contractual obligations, commercial commitments and expected cash requirements for interest can be found in Notes 14, 15, 16 and 19 to the Consolidated Financial Statements included in the 2025 10-K. With the exception of the items noted below, there have been no material changes in the Company's contractual obligations since December 31, 2025.
|
Contractual Obligations at Sep 30, 2026
|
Payments Due In | ||||||||||||||||
| In millions | 2026 | 2027-2028 | 2029-2030 | 2031 and beyond | Total | ||||||||||||
| Dow Inc. | |||||||||||||||||
|
Expected cash requirements for interest 1
|
$ | 211 | $ | 1,659 | $ | 1,488 | $ | 9,109 | $ | 12,467 | |||||||
|
Operating leases 2
|
102 | 680 | 371 | 506 | 1,659 | ||||||||||||
|
Other noncurrent obligations 3
|
- | 756 | 542 | 2,377 | 3,675 | ||||||||||||
| Total | $ | 313 | $ | 3,095 | $ | 2,401 | $ | 11,992 | $ | 17,801 | |||||||
| TDCC | |||||||||||||||||
|
Expected cash requirements for interest 1
|
$ | 211 | $ | 1,659 | $ | 1,488 | $ | 9,109 | $ | 12,467 | |||||||
|
Operating leases 2
|
102 | 680 | 371 | 506 | 1,659 | ||||||||||||
|
Other noncurrent obligations 3
|
- | 756 | 542 | 2,239 | 3,537 | ||||||||||||
| Total | $ | 313 | $ | 3,095 | $ | 2,401 | $ | 11,854 | $ | 17,663 | |||||||
1.Cash requirements for interest on long-term debt was calculated using current interest rates at September 30, 2026, and includes $76 million of various floating rate notes.
2.Includes imputed interest of $290 million.
3.Includes liabilities related to asbestos litigation, environmental remediation, legal matters and other noncurrent liabilities. Also includes the updated fair value of the project financing debt guarantee liability with Sadara, which increased $298 million in the first quarter of 2026. In addition to these items, Dow Inc. includes liabilities related to noncurrent obligations with DuPont and Corteva. The table excludes uncertain tax positions due to uncertainties in the timing of the effective settlement of tax positions with the respective taxing authorities. The table also excludes deferred revenue as it does not represent future cash requirements arising from contractual payment obligations.
Fair Value Measurements
See Note 19 to the Consolidated Financial Statements for information concerning fair value measurements.
OTHER MATTERS
Critical Accounting Estimates
The preparation of financial statements and related disclosures in accordance with accounting principles generally accepted in the United States of America requires management to make judgments, assumptions and estimates that affect the amounts reported in the consolidated financial statements and accompanying notes. Note 1 to the Consolidated Financial Statements included in the 2025 10-K describes the significant accounting policies and methods used in the preparation of the consolidated financial statements. The Company's critical accounting policies that are impacted by judgments, assumptions and estimates are described in Management's Discussion and Analysis of Financial Condition and Results of Operations included in the 2025 10-K. Since December 31, 2025, there have been no material changes in the Company's accounting policies that are impacted by judgments, assumptions and estimates.
Asbestos-Related Matters of Union Carbide Corporation
Union Carbide is and has been involved in a large number of asbestos-related suits filed primarily in state courts during the past several decades. These suits principally allege personal injury resulting from exposure to asbestos-containing products and frequently seek both actual and punitive damages. The alleged claims primarily relate to products that Union Carbide sold in the past, alleged exposure to asbestos-containing products located on Union Carbide's premises, and Union Carbide's responsibility for asbestos suits filed against a former Union Carbide subsidiary, Amchem Products, Inc. ("Amchem"). In many cases, plaintiffs are unable to demonstrate that they have suffered any compensable loss as a result of such exposure, or that injuries incurred in fact resulted from exposure to Union Carbide's products.
The table below provides information regarding asbestos-related claims pending against Union Carbide and Amchem based on criteria developed by Union Carbide and its external consultants:
| Asbestos-Related Claim Activity | 2026 | 2025 | ||||||
| Claims unresolved at Jan 1 | 7,158 | 5,813 | ||||||
| Claims filed | 3,614 | 3,407 | ||||||
| Claims settled, dismissed or otherwise resolved | (4,193) | (2,719) | ||||||
|
Claims unresolved at Sep 30
|
6,579 | 6,501 | ||||||
| Claimants with claims against both Union Carbide and Amchem | (1,097) | (1,192) | ||||||
|
Individual claimants at Sep 30
|
5,482 | 5,309 | ||||||
Plaintiffs' lawyers often sue numerous defendants in individual lawsuits or on behalf of numerous claimants. As a result, the damages alleged are not expressly identified as to Union Carbide, Amchem or any other particular defendant, even when specific damages are alleged with respect to a specific disease or injury. For these reasons and based upon Union Carbide's litigation and settlement experience, Union Carbide does not consider the damages alleged against Union Carbide and Amchem to be a meaningful factor in its determination of any potential asbestos-related liability.
For additional information, see Asbestos-Related Matters of Union Carbide Corporation in Note 12 to the Consolidated Financial Statements; Part II, Item 1. Legal Proceedings; and Note 15 to the Consolidated Financial Statements included in the 2025 10-K.
Dow Inc. published this content on October 23, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on October 23, 2026 at 11:46 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]