Dow Inc.

02/03/2026 | Press release | Distributed by Public on 02/03/2026 06:54

Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
STATEMENT ON MACROECONOMIC CONDITIONS AND CURRENCY EXCHANGE RATES
Overview of Macroeconomic Conditions and the Company's Response
The Company has continued to face challenging market conditions in 2025, including the significant impact of slower global GDP growth. Industry overcapacity and newer entrants exporting at anti-competitive economics have negatively impacted the Company's results of operations and cash flows and are expected to continue to do so. In addition, the current uncertain geopolitical environment, including the impact of trade policies, has resulted in increased volatility in global markets, also negatively impacting the Company's results of operations and cash flows. The macroeconomic conditions experienced in 2025 are expected to persist in the near term for the Company and the industry alike.
Despite these challenges, the Company has maintained a strong financial position and solid liquidity and has taken actions to mitigate impacts on its supply chain and results of operations. At the time of this filing, the ultimate impact of tariff policies and other evolving global trade measures, coupled with existing macroeconomic challenges, is uncertain. The Company is actively monitoring global trade developments to identify actions necessary to maintain competitiveness while it adapts to these new economic challenges and continuing to work with regulatory bodies to address anti-competitive behavior. More information on these risks and potential impact to the Company can be found in Part I, Item 1A. Risk Factors.
In the first quarter of 2025, Dow announced targeted cost actions to reduce structural costs by $1 billion over the next two years, while its businesses work to balance supply with profitable demand. The cost actions target areas such as third-party spending and include a workforce reduction of approximately 1,500 roles. The Company also announced reductions to its capital expenditures for 2025.
The Company announced further actions to address ongoing macroeconomic volatility and persistently slower global GDP growth in the second quarter of 2025, including the decision to delay construction of its Path2Zero project in Fort Saskatchewan, Alberta, Canada. The Company's expected 2025 enterprise-wide capital expenditures were adjusted to $2.5 billion from the Company's original plan of $3.5 billion after the actions taken in the first and second quarters of 2025.
In January 2026, the Company provided an updated timeline for its Fort Saskatchewan Path2Zero project, delaying completion of the project by two years, and expects the first and second phases of the project to start up by the end of 2029 and 2030, respectively. Dow remains committed to its Path2Zero project and the growth upside it will enable in targeted applications like pressure pipe, wire and cable, and food packaging. The project is expected to be the world's first net-zero Scope 1 and 2 carbon dioxide equivalent emissions integrated ethylene and derivatives complex.
On July 7, 2025, the Company announced additional restructuring actions, approved by its Board of Directors ("Board") on June 30, 2025, to rationalize its global asset footprint, including actions related to the three assets identified as part of the Company's expanded strategic review of its European assets and certain corporate and other assets, and to enhance the Company's competitiveness over the economic cycle. The program includes asset write-down and write-off charges, severance and related benefit costs, contract termination fees and other exit and disposal costs. These actions will be completed by the Company primarily over the next four years, including the asset shut downs and completion of the related decommissioning and demolition activities. Significant actions approved to date include the following:
•Packaging & Specialty Plastics will shut down an ethylene facility in Böhlen, Germany, by the end of 2027.
•Industrial Intermediates & Infrastructure will shut down chlor-alkali and vinyl assets in Schkopau, Germany, by the end of 2027.
•Performance Materials & Coatings will shut down a basics siloxanes plant in Barry, United Kingdom, by mid-year 2026.
•The Company wrote off certain Corporate-aligned owned and leased non-manufacturing facilities and other assets.
More information on the restructuring actions and related charges can be found in Note 5 to the Consolidated Financial Statements.
Beginning with the third quarter of 2025, the Company's Board reduced the dividend by 50 percent to $0.35 per share, in response to the prolonged industry downturn. The adjustment to the size of the dividend reflects the Company's balanced capital allocation approach and enhances financial flexibility amidst a persistently challenging macroeconomic environment.
On January 29, 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 at least $2 billion near-term Operating EBITDA improvement from productivity improvements and growth and will be accretive to the $1 billion structural cost reductions announced in the first quarter of 2025. The Company expects to incur one-time costs and charges related to Transform to Outperform of $1.1 billion to $1.5 billion, including severance and related benefit costs of $600 million to $800 million associated with approximately 4,500 roles. Charges for severance and related benefit costs and the related implementation costs will be incurred primarily over the next two years.
Currency Exchange Rates
The Company's global business operations give rise to market risk exposure related to changes in foreign currency exchange rates and international capital flows that may be affected by extensive regulations and controls, especially in developing or highly inflationary countries such as Argentina. The Company continues to monitor these situations and take appropriate actions as necessary to manage the financial impact pursuant to established guidelines and policies. If the Company is unable to manage certain exposures in a cost-effective manner it could have a significant negative impact on its future results of operations and cash flows. A detailed discussion of these and other principal risks and uncertainties, which may negatively impact the future results of the Company, are included in Part I, Item 1A. Risk Factors.
Table of Contents Page
About Dow
35
Overview
36
Results of Operations
38
Segment Results
41
Packaging & Specialty Plastics
42
Industrial Intermediates & Infrastructure
42
Performance Materials & Coatings
43
Corporate
43
Outlook
44
Liquidity and Capital Resources
45
Other Matters
54
Critical Accounting Estimates
54
Environmental Matters
57
Asbestos-Related Matters of Union Carbide Corporation
64
ABOUT DOW
Dow is one of the world's leading materials science companies, serving customers in high-growth markets such as packaging, infrastructure, mobility and consumer applications. The Company's global breadth, asset integration and scale, customer-focused innovation and leading business positions enable it to achieve profitable growth and help deliver a sustainable future. Dow operates manufacturing sites in 29 countries and employs approximately 34,600 people.
In 2025, the Company had net sales of $40 billion, of which 40 percent were to customers in the U.S. & Canada; 31 percent were in Europe, Middle East, Africa and India ("EMEAI"); while the remaining 29 percent were to customers in Asia Pacific and Latin America.
In 2025, the Company and its consolidated subsidiaries did not operate in countries subject to U.S. economic sanctions and export controls as imposed by the U.S. State Department or in countries designated by the U.S. State Department as state sponsors of terrorism, including Cuba, Iran, the Democratic People's Republic of Korea (North Korea) and Syria. The Company has policies and procedures in place designed to ensure that it and its consolidated subsidiaries remain in compliance with applicable U.S. laws and regulations.
OVERVIEW
The following is a summary of the results for the Company for the year ended December 31, 2025:
The Company reported net sales of $40 billion in 2025, down 7 percent from $43 billion in 2024, with decreases across all operating segments and geographic regions, and driven by a decrease in local price of 7 percent. Net sales decreased in Packaging & Specialty Plastics (down 8 percent), Industrial Intermediates & Infrastructure (down 6 percent) and Performance Materials & Coatings (down 5 percent).
Local price decreased 7 percent compared with 2024, with decreases in all operating segments and geographic regions. Local price decreased in Packaging & Specialty Plastics (down 8 percent), Industrial Intermediates & Infrastructure (down 6 percent) and Performance Materials & Coatings (down 3 percent).
Volume was flat compared with 2024 and mixed by geographic region. Volume increased in the U.S. & Canada (up 2 percent) and Asia Pacific (up 1 percent), and decreased in EMEAI (down 4 percent) and Latin America (down 2 percent).
The impact of currency on net sales was flat compared with 2024.
Restructuring, goodwill impairment and asset related charges - net were $1,856 million in 2025 compared with $103 million in 2024. The restructuring charges recognized in 2025 were related to actions approved by the Board in January and June 2025 and consisted of severance and related benefit costs of $389 million, asset write-downs and write-offs of $349 million and costs associated with exit and disposal activities of $124 million. The Company also reported an impairment charge of $690 million related to goodwill associated with the Polyurethanes & Construction Chemicals reporting unit, a pretax impairment charge of $303 million related to the assets used for chlor-alkali, propylene oxide and brine production in Latin America, and $1 million of asset related charges associated with the Company's 2023 Restructuring Program in 2025.
Equity in losses of nonconsolidated affiliates was $240 million in 2025, compared with losses of $6 million in 2024, primarily driven by continued integrated margin compression at the Company's principal joint ventures.
Sundry income (expense) - net for Dow Inc. and TDCC was income of $140 million and $157 million, respectively, in 2025, compared with income of $415 million and $404 million, respectively, in 2024. Sundry income (expense) - net decreased primarily due to non-cash settlement charges related to the Company's pension derisking activities and lower non-operating pension and postretirement benefit plan credits, partially offset by gains on the divestiture of the Company's ownership in its DowAksa Advanced Composites Holdings BV joint venture ("DowAksa") and the sale of its soil fumigation product line.
Net income attributable to noncontrolling interests was $179 million in 2025, compared with $85 million in 2024. The increase reflects the ownership interest in Diamond Infrastructure Solutions held by InfraPark Holdings, LLC ("InfraPark"), a subsidiary of a fund managed by Macquarie Asset Management. InfraPark purchased 49 percent of the membership interests in Diamond Infrastructure Solutions in 2025.
Net income (loss) available for Dow Inc. and TDCC common stockholder(s) was a loss of $2,623 million and $2,598 million, respectively, in 2025, compared with income of $1,116 million and $1,127 million, respectively, in 2024. Earnings (loss) per share for Dow Inc. was a loss of $3.70 per share in 2025, compared with earnings of $1.57 per share in 2024.
In 2025, Dow Inc. declared and paid dividends to common stockholders of $1,490 million.
Other notable events and highlights from the year ended December 31, 2025 include:
•On January 27, 2025, the Dow Inc. Board approved targeted actions to further achieve the Company's cost reduction initiatives in response to ongoing macroeconomic uncertainty, including a workforce reduction of approximately 1,500 roles. These targeted actions are expected to deliver $1 billion in cost savings by 2026.
•On February 21, 2025, Standard & Poor's affirmed TDCC's BBB and A-2 rating, and revised its outlook to negative from stable.
•On February 25, 2025, TDCC issued $1 billion of senior unsecured notes and announced that the proceeds would be used to complete cash tender offers for certain debt securities.
•On March 13, 2025, the Company completed cash tender offers for certain debt securities. In total, $943 million aggregate principal amount was tendered and retired.
•On April 10, 2025, Dow Inc. announced results from the 2025 Annual Stockholder Meeting, including the election of all incumbent directors, as well as Rebecca B. Liebert, president and chief executive officer of The Lubrizol Corporation, a Berkshire Hathaway company, to its Board.
•On May 1, 2025, the Company completed the sale of 40 percent of the membership interests in its wholly owned subsidiary Diamond Infrastructure Solutions to InfraPark. Dow received initial cash proceeds of approximately $2.4 billion from the sale. The transaction included an option for InfraPark to purchase up to an additional 9 percent of Diamond Infrastructure Solutions' member interests in exchange for additional cash proceeds of up to $600 million within six months of the closing date of the sale.
•On May 1, 2025, the Company announced the completion of the sale of TeloneTM, a soil fumigation product line, to TriCal Soil Solutions, Inc., a distributor and applicator of soil fumigation products for net cash proceeds of $121 million.
•On June 10, 2025, The Court of King's Bench of Alberta, Canada signed a judgment ordering Nova Chemicals Corporation to pay the Company an additional amount of $1.62 billion Canadian dollars (equivalent to approximately $1.2 billion U.S. dollars) for damages the Company incurred through June 2018, which had not been previously quantified.
•On June 30, 2025, the Board approved restructuring actions to rationalize the Company's global asset footprint, including certain actions identified as part of the Company's previously announced strategic review of its European assets, and certain corporate and other assets.
•On July 7, 2025, Moody's Ratings announced a long-term credit rating change for TDCC from Baa1 to Baa2 and affirmed TDCC's P-2 rating and its outlook of negative.
•On July 24, 2025, the Company announced a 50 percent reduction to its dividend declared for the third quarter of 2025.
•On July 31, 2025, Fitch Ratings announced a long-term credit rating change for TDCC from BBB+ to BBB and a short-term credit rating change from F1 to F2, with its outlook remaining stable.
•On August 8, 2025, the Company sold its ownership interest in DowAksa to its joint venture partner, Aksa Akrilik Kimya Sanayii A.Ş., for cash proceeds of $121 million, net of costs to sell and other transaction expenses and subject to customary post-closing adjustments.
•On August 29, 2025, the Company received approximately $540 million of additional proceeds following InfraPark's purchase of an additional 9 percent of the membership interests of Diamond Infrastructure Solutions, increasing its minority equity stake from 40 percent to 49 percent, and bringing the total proceeds from the transaction to approximately $3 billion.
•On September 3, 2025, TDCC issued $1.4 billion of senior unsecured notes.
•Dow was honored by Great Place to Work®and Fortune as one of the World's Best Workplaces. Dow was also certified as a Great Place to Work®in 15 countries and ranked on eight national Best Workplaces lists, including the Fortune 100 Best Companies to Work For®list in the United States for the fifth consecutive year.
•Dow received the first place spot on the Best Workplace in Manufacturing and Production list by Great Place to Work®and Fortune. This is the fifth consecutive year Dow has been named to this prestigious list and the second time atop the ranking.
•Dow received 10 2025 Edison Awards™(one gold, four silver and five bronze), once again earning more awards than any other organization for the eighth consecutive year.
•Dow received six 2025 BIG Innovation Awards from the Business Intelligence Group™, matching the record number of BIG Innovation Awards Dow received in 2024.
•Dow received four prestigious 2025 SEAL (Sustainability, Environmental Achievement and Leadership) Business Sustainability Awards. Dow's RP 101 Trace Solution received a SEAL Sustainable Innovation Award. Dow's DOWSIL™ TC-6040 thermal conductive encapsulants, DOWSIL™ 2102 and DOWSIL™ 2110 adhesive, and EcoSense™ 2470 surfactant each received a SEAL Sustainable Product Award.
In addition to the highlights above, the following events occurred subsequent to December 31, 2025:
•On January 5, 2026, the Company announced that A.N. Sreeram, Senior Vice President and Chief Technology Officer, had elected to retire in June 2026 after 20 years of service with Dow.
•On January 5, 2026, the Company announced that Andre Argenton had been named Chief Technology and Sustainability Officer effective January 1, 2026.
•On January 5, 2026, the Company announced Rebecca B. Liebert resigned from Dow's Board of Directors, effective January 2, 2026.
•On January 26, 2026, the Dow Inc. 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.
RESULTS OF OPERATIONS
For comparison of results of operations for the fiscal years ended December 31, 2024 and 2023, see Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 4, 2025.
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
In millions 2025 2024
Net sales $ 39,968 $ 42,964
Sales Variances by Operating Segment and Geographic Region
2025 2024
Percentage change from prior year Local Price & Product Mix Currency Volume
Portfolio & Other 1
Total Local Price & Product Mix Currency
Volume
Total
Packaging & Specialty Plastics (8) % 1 % - % (1) % (8) % (4) % - % (2) % (6) %
Industrial Intermediates & Infrastructure (6) - - - (6) (6) - 1 (5)
Performance Materials & Coatings (3) - (2) - (5) (3) (1) 5 1
Total (7) % - % - % - % (7) % (4) % - % - % (4) %
Total, excluding the Hydrocarbons & Energy business (6) % - % - % (1) % (7) % (5) % - % 3 % (2) %
U.S. & Canada (6) % - % 2 % - % (4) % (3) % - % 2 % (1) %
EMEAI (7) 2 (4) (1) (10) (4) - - (4)
Asia Pacific (7) - 1 - (6) (6) (1) - (7)
Latin America (8) - (2) (1) (11) (5) - (1) (6)
Total (7) % - % - % - % (7) % (4) % - % - % (4) %
1.Portfolio & Other includes the sales impact of the flexible packaging laminating adhesives business, which was sold to Arkema S.A. in the fourth quarter of 2024.
2025 Versus 2024
The Company reported net sales of $40.0 billion in 2025, down 7 percent from $43.0 billion in 2024, with local price down 7 percent and volume, currency and portfolio & other flat. Net sales decreased across all operating segments and geographic regions. Local price decreased across all operating segments and geographic regions driven by industry supply and demand dynamics and lower global energy and feedstock costs. Local price decreased in Packaging & Specialty Plastics (down 8 percent), Industrial Intermediates & Infrastructure (down 6 percent) and Performance Materials & Coatings (down 3 percent). Volume was flat with gains in the U.S. & Canada (up 2 percent) and in Asia Pacific (up 1 percent) offset by declines in EMEAI (down 4 percent) and in Latin America (down 2 percent). Volume was flat in Packaging & Specialty Plastics and Industrial Intermediates & Infrastructure and declined in Performance Materials & Coatings (down 2 percent). Packaging & Specialty Plastics was favorably impacted by currency (up 1 percent) and unfavorably impacted by portfolio & other (down 1 percent). Excluding the Hydrocarbons & Energy business, net sales decreased 7 percent.
Cost of Sales
Cost of sales ("COS") was $37.4 billion in 2025, compared with $38.4 billion in 2024. COS decreased in 2025 primarily due to lower raw material, feedstock and energy costs, the impact of the Company's cost reduction initiatives, and lower planned maintenance turnaround spending, partially offset by the impact of lower operating rates. COS as a percentage of net sales was 93.7 percent in 2025, compared with 89.3 percent in 2024. The increase in COS as a percentage of net sales was driven by the impact of lower local price on flat net sales volume.
Research and Development Expenses
Research and development ("R&D") expenses were $752 million in 2025, compared with $810 million in 2024. R&D expenses decreased in 2025 primarily due to the Company's cost reduction initiatives and lower performance-based compensation costs.
Selling, General and Administrative Expenses
Selling, general and administrative ("SG&A") expenses were $1,392 million in 2025, compared with $1,581 million in 2024. SG&A expenses decreased in 2025 primarily due to the impact of lower third-party purchased services, the impact of the Company's cost reduction initiatives, lower performance-based compensation costs and decreased bad debt expense.
Amortization of Intangibles
Amortization of intangibles was $231 million in 2025, compared with $310 million in 2024. Amortization of intangibles decreased primarily due to certain intangible assets becoming fully amortized in 2025. See Note 12 to the Consolidated Financial Statements for additional information on intangible assets.
Restructuring, Goodwill Impairment and Asset Related Charges - Net
2025 Restructuring Program
On January 27, 2025, the Board approved targeted actions to further achieve the Company's cost reduction initiatives in response to ongoing macroeconomic uncertainty, while reinforcing its long-term competitiveness across the economic cycle. These actions are expected to be substantially complete by the end of 2026.
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, the Company recorded pretax restructuring charges in 2025 of $862 million, consisting of severance and related benefit costs of $389 million, asset write-downs and write-offs of $349 million and costs associated with exit and disposal activities of $124 million. The restructuring charges by segment were as follows: $165 million in Packaging & Specialty Plastics, $95 million in Industrial Intermediates & Infrastructure, $150 million in Performance Materials & Coatings and $452 million in Corporate. See Note 5 to the Consolidated Financial Statements for additional information.
2023 Restructuring Program
Actions related to the 2023 Restructuring Program were complete at the end of the second quarter of 2025. In 2025, the Company recorded an additional pretax restructuring charge of $5 million for asset write-downs and write-offs and an asset related credit adjustment of $4 million, related to Industrial Intermediates & Infrastructure. See Note 5 to the Consolidated Financial Statements for additional information.
2025 Goodwill Impairment
Upon completion of the annual goodwill impairment testing in the fourth quarter of 2025, the Company determined the fair value of the Polyurethanes & Construction Chemicals reporting unit was lower than its carrying amount. As a result, the Company recorded an impairment charge of $690 million, related to Industrial Intermediates & Infrastructure. See Notes 5, 12 and 22 to the Consolidated Financial Statements for additional information.
Asset Related Charges
In 2025, the Company recognized a $303 million pretax impairment charge related to assets used for chlor-alkali, propylene oxide and brine production in Latin America. Due to challenging economic conditions in the region, the Company performed a held-and-used impairment analysis and the assets were written down to their fair value. The impairment charge was related to Industrial Intermediates & Infrastructure ($232 million) and Packaging & Specialty Plastics ($71 million). See Notes 5 and 22 for additional information.
Equity in Earnings (Losses) of Nonconsolidated Affiliates
The Company's share of equity in losses of nonconsolidated affiliates was $240 million in 2025, compared with losses of $6 million in 2024, primarily driven by continued integrated margin compression at the Company's principal joint ventures.
Sundry Income (Expense) - Net
Sundry income (expense) - net includes a variety of income and expense items such as foreign currency exchange gains and losses, dividends from investments, gains and losses on sales of investments and assets, non-operating pension and other postretirement benefit plan credits or costs, losses on early extinguishment of debt and certain litigation matters.
Sundry income (expense) - net for 2025 was income of $140 million and $157 million for Dow Inc. and TDCC, respectively, compared with income of $415 million and $404 million for Dow Inc. and TDCC, respectively, in 2024. In 2025, sundry income (expense) - net included non-operating pension and postretirement benefit plan credits, a gain from the divestiture of the Company's soil fumigation product line (related to Industrial Intermediates & Infrastructure), a gain from the divestiture of its ownership interest in DowAksa (related to Corporate), foreign currency exchange gains, and gains on the sales of other assets and investments, partially offset by a loss on early extinguishment of debt and pension settlement charges (both related to Corporate). In 2024, sundry income (expense) - net included non-operating pension and postretirement benefit plan credits and gains on the sales of assets and investments, which were partially offset by foreign currency exchange losses. See Notes 4, 6, 19 and 25, to the Consolidated Financial Statements for additional information.
In 2025 and 2024, in addition to the amounts previously discussed above for TDCC, sundry income (expense) - net for Dow Inc. included a net loss of $17 million and a net gain of $13 million, respectively, associated with agreements and matters with DuPont de Nemours, Inc. ("DuPont") and Corteva, Inc. ("Corteva") (related to Corporate).
Interest Expense and Amortization of Debt Discount
Interest expense and amortization of debt discount was $865 million in 2025, compared with $811 million in 2024. The increase in interest expense is primarily due to $1.4 billion of senior unsecured notes issued in the third quarter of 2025 and increased issuances of commercial paper in 2025. See Liquidity and Capital Resources in Management's Discussion and Analysis of Financial Condition and Results of Operations and Note 14 to the Consolidated Financial Statements for additional information related to debt financing activity.
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. The underlying factors affecting the Company's overall tax rate are summarized in Note 7 to the Consolidated Financial Statements.
The Company reported a tax credit of $67 million in 2025, resulting in an effective tax rate of 2.7 percent, compared with a tax provision of $399 million in 2024, resulting in an effective tax rate of 24.9 percent and 24.8 percent for Dow Inc. and TDCC, respectively. The credit for income taxes was favorably impacted by the sale of a portion of the Company's membership interest in its wholly owned subsidiary, Diamond Infrastructure Solutions, as well as the recording of a tax benefit stemming from the U.S. Tax Court's decision in Varian Medical Systems Inc. v.
Commissioner. These benefits were partially offset by the geographic mix of earnings, valuation allowances recorded in certain foreign jurisdictions, losses attributable to jurisdictions for which no tax benefit can be recognized, and non-deductible goodwill impairment.
The provision for income taxes and higher effective tax rate in 2024 was primarily due to the geographic mix of earnings, partially offset by adjustments and the reassessment of interest and penalties on a tax matter in foreign jurisdictions.
The Company continues to monitor and evaluate legislative developments related to the Global Anti-Base Erosion Proposal Regime ("GloBE") established by the Organization of Economic Cooperation and Development's ("OECD") Pillar Two framework. Several countries in which the Company operates have adopted those rules into their legislation and several others are expected to implement in the future. To date, such legislation has not materially impacted the Company's effective tax rate.
On July 4, 2025, U.S. legislation formally titled "An Act to Provide for Reconciliation Pursuant to Title II of H. Con. Res. 14" ("the Act") and commonly referred to as the One Big Beautiful Bill Act was signed into law. The Act, among other things, extended key provisions of the 2017 Tax Cuts and Jobs Act and introduced targeted changes to the U.S. federal income tax regime. The Act has not materially impacted the Company's effective tax rate.
Net Income Attributable to Noncontrolling Interests
Net income attributable to noncontrolling interests was $179 million in 2025, compared with $85 million in 2024. The increase in net income attributable to noncontrolling interests was primarily driven by the sale of 49 percent of the membership interests of Diamond Infrastructure Solutions in 2025. See Notes 18 and 23 to the Consolidated Financial Statements for additional information.
Net Income (Loss) Available for Common Stockholder(s)
Dow Inc.
Net income (loss) available for Dow Inc. common stockholders was a loss of $2,623 million in 2025, compared with income of $1,116 million in 2024. Earnings (loss) per share of Dow Inc. was a loss of $3.70 per share in 2025, compared with earnings of $1.57 per share in 2024. See Note 8 to the Consolidated Financial Statements for details on Dow Inc.'s earnings per share calculations.
TDCC
Net income (loss) available for the TDCC common stockholder was a loss of $2,598 million in 2025, compared with income of $1,127 million in 2024. TDCC's common shares are owned solely by Dow Inc.
SEGMENT RESULTS
The Company conducts its worldwide operations through six global businesses which are organized into the following operating segments: Packaging & Specialty Plastics, Industrial Intermediates & Infrastructure and Performance Materials & Coatings. Corporate contains the reconciliation between the totals for the operating segments and the Company's totals. The Company did not aggregate any operating segments when determining its reportable segments. The Company reports geographic information for the following regions: U.S. & Canada, EMEAI, Asia Pacific and Latin America. The Company transfers ethylene to its downstream derivative businesses at market prices. See Part I, Item 1. Business for further discussion of the Company's segments.
Dow's measure of profit/loss for segment reporting purposes is Operating EBIT as this is the manner in which the chief executive officer, chief operating officer, chief financial officer, general counsel and corporate secretary, and senior vice president of corporate development, together the "executive committee" and chief operating decision maker ("CODM"), assesses performance and allocates resources. The CODM compares quarterly results to both the year-ago and sequential periods to assess performance and allocate resources to each segment. The Company defines Operating EBIT as earnings (i.e., "Income 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 25 to the Consolidated Financial Statements for reconciliations of these measures.
For comparison of segment results for the fiscal years ended December 31, 2024 and 2023, see Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 4, 2025.
PACKAGING & SPECIALTY PLASTICS
Packaging & Specialty Plastics
In millions 2025 2024
Net sales $ 19,970 $ 21,776
Operating EBIT $ 827 $ 2,373
Equity earnings $ 35 $ 81
Packaging & Specialty Plastics
Percentage change from prior year 2025 2024
Change in Net Sales from Prior Period due to:
Local price & product mix (8) % (4) %
Currency 1 -
Volume - (2)
Portfolio & other 1
(1) -
Total (8) % (6) %
1.Portfolio & other includes the sales impact of the flexible packaging laminating adhesives business, which was sold to Arkema S.A. in the fourth quarter of 2024.
2025 Versus 2024
Packaging & Specialty Plastics net sales were $19,970 million in 2025, down 8 percent from net sales of $21,776 million in 2024, with local price down 8 percent, portfolio & other down 1 percent, currency up 1 percent, and volume flat. Local price decreased in Packaging and Specialty Plastics in all geographic regions, driven by lower pricing of polyethylene and functional polymers. Local price decreased in Hydrocarbons & Energy, driven by olefins and aromatics in EMEAI and the U.S. & Canada. Currency had a favorable impact on sales, driven by EMEAI. Volume was flat in Packaging and Specialty Plastics as higher volumes in polyethylene were offset by lower functional polymers volumes. Volume increased in Hydrocarbons & Energy, primarily due to higher energy sales in the U.S. & Canada, partially offset by lower merchant olefin sales in EMEAI due to the Company's decision to temporarily idle an ethylene cracker.
Operating EBIT was $827 million in 2025, down $1,546 million from Operating EBIT of $2,373 million in 2024. Operating EBIT decreased primarily due to lower integrated margins and equity earnings at the Company's EQUATE and Thai joint ventures, partially offset by lower planned maintenance costs and the impact of the Company's cost reduction initiatives.
INDUSTRIAL INTERMEDIATES & INFRASTRUCTURE
Industrial Intermediates & Infrastructure
In millions 2025 2024
Net sales $ 11,163 $ 11,869
Operating EBIT $ (561) $ 125
Equity losses $ (282) $ (102)
Industrial Intermediates & Infrastructure
Percentage change from prior year 2025 2024
Change in Net Sales from Prior Period due to:
Local price & product mix (6) % (6) %
Currency - -
Volume - 1
Total (6) % (5) %
2025 Versus 2024
Industrial Intermediates & Infrastructure net sales were $11,163 million in 2025, down 6 percent from $11,869 million in 2024, with local price down 6 percent, and both volume and currency flat. Local price decreased in both businesses and across all geographic regions, led by declines in industrial, consumer durables and building and construction applications. Volume increased in Industrial Solutions, with higher volumes in all geographic regions except Latin America, primarily in energy and industrial applications. Volume decreased in Polyurethanes & Construction Chemicals, driven by declines in EMEAI and Latin America, primarily in consumer durables and industrial applications.
Operating EBIT was a loss of $561 million in 2025, down $686 million from Operating EBIT of $125 million in 2024. Operating EBIT decreased primarily due to margin compression, the impact of lower operating rates and lower results at the EQUATE and Sadara joint ventures, partially offset by the impact of the Company's cost reduction initiatives.
PERFORMANCE MATERIALS & COATINGS
Performance Materials & Coatings
In millions 2025 2024
Net sales $ 8,134 $ 8,574
Operating EBIT $ 306 $ 318
Equity earnings $ 5 $ 11
Performance Materials & Coatings
Percentage change from prior year 2025 2024
Change in Net Sales from Prior Period due to:
Local price & product mix (3) % (3) %
Currency - (1)
Volume (2) 5
Total (5) % 1 %
2025 Versus 2024
Performance Materials & Coatings net sales were $8,134 million in 2025, down 5 percent from net sales of $8,574 million in 2024, with local price down 3 percent, volume down 2 percent, and currency flat. Coatings & Performance Monomers local price decreased across all geographic regions, primarily in acrylic monomers and architectural coatings, due to lower raw material costs and competitive pricing pressures. Local price decreased in Consumer Solutions in all geographic regions and was broad-based across end-markets. Volume decreased in Coatings & Performance Monomers in all geographic regions, driven by lower demand for coatings applications and competitive dynamics in EMEAI limiting opportunistic acrylic monomers sales. Volume decreased in Consumer Solutions, in all geographic regions except Asia Pacific, driven by lower upstream siloxanes volumes and lower demand in building and construction end-markets, partially offset by increased demand in consumer and electronics applications.
Operating EBIT was $306 million in 2025, down $12 million from Operating EBIT of $318 million in 2024. Operating EBIT decreased primarily due to margin compression, lower volumes and the impact of lower operating rates, partially offset by the impact of the Company's cost reduction initiatives and reduced intangible asset amortization expenses in Consumer Solutions.
CORPORATE
Corporate
In millions 2025 2024
Net sales $ 701 $ 745
Operating EBIT $ (150) $ (228)
Equity earnings $ 2 $ 4
2025 Versus 2024
Net sales for Corporate, which primarily relate to the Company's insurance operations, were $701 million in 2025, down from net sales of $745 million in 2024, largely driven by reduced premiums received for insurance policies covering third parties.
Operating EBIT was a loss of $150 million in 2025, compared with a loss of $228 million in 2024. Operating EBIT improved primarily due to lower environmental costs.
OUTLOOK
Operating Segments & End-Market Expectations
Team Dow remains focused on delivering near-term cost savings, navigating an unprecedented industry downturn and its long-standing cultural values of safety and reliability. At the same time, by reducing complexity, adopting the best available technologies and streamlining end-to-end processes, Transform to Outperform is expected to provide step-change productivity gains while enabling consistent growth. The Company will make breakthrough improvements to fundamentally simplify Dow's operating model, which will position the Company to work more efficiently, better serve customers and deliver improved shareholder returns.
In Packaging & Specialty Plastics, continued volume growth is expected driven by an increase in global polyethylene demand as well as the full year benefit of the Company's new polyethylene train located in the U.S. Gulf Coast that came online in the second half of 2025. Local prices will be impacted by market supply and demand dynamics as well as competitor capacity rationalizations. The Company's feedstock flexibility, low cost, and advantaged integrated regional footprint will continue to position the segment to navigate market dynamics throughout the year.
In Industrial Intermediates & Infrastructure, improved volume growth is expected based on the full year impact of the recent growth investment in alkoxylation capacity as well as underlying growth in key end-markets which will more than offset the loss of volume from the shutdown of a propylene oxide and propylene glycol plant in Freeport, Texas. The upgraded capacity supports increasing demand across a wide range of fast-growing end-markets including home and personal care, energy, and pharmaceuticals. The investments are backed by supply agreements with customers, including leading consumer brands. Local prices are expected to remain similar to 2025 levels.
In Performance Materials & Coatings, the Company will continue to prioritize key end-markets in performance silicones in which its innovation and footprint can drive value and volume growth above GDP. While demand in consumer and electronics is expected to benefit from continued investments in artificial intelligence, data centers, and advanced devices, other sectors face a more challenging environment. Pricing for specialty products is expected to remain relatively stable due to anticipated modest and uneven economic expansion as consumer sentiment remains subdued. Dow will complete the shutdown of a basics siloxanes plant in Barry, United Kingdom, by mid-year 2026 to rationalize its global footprint. Market conditions impacting sales of coatings are expected to improve compared with recent years due to global central bank rate cut activity across the second half of 2025.
Other factors impacting operating segment profitability include an expected increase in planned maintenance turnaround spending of approximately $200 million compared with 2025.
Projected Sources and Uses of Cash
Items that may impact the consolidated statements of cash flows in 2026 include:
•Capital expenditures are expected to be approximately $2.5 billion.
•Cash contributions to pension plans are expected to be approximately $180 million.
•Cash outflows related to the Company's 2025 Restructuring Program are expected to be approximately $260 million.
•Cash inflows related to the judgment with Nova Chemicals Corporation are expected to be approximately $1.3 billion.
•Cash outflows for dividends paid to noncontrolling interests are expected to be approximately $250 million.
•Cash outflows associated with Transform to Outperform are expected to be approximately $0.8 billion to $1.0 billion.
LIQUIDITY AND CAPITAL RESOURCES
The Company had cash and cash equivalents of $3,816 million at December 31, 2025 and $2,189 million at December 31, 2024, of which $2,636 million at December 31, 2025 and $1,427 million at December 31, 2024, was held by subsidiaries in foreign countries, including U.S. territories. For each of its foreign subsidiaries, the Company 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 December 31, 2025, management believed that sufficient liquidity was available in the United States. The Company has and expects to continue repatriating certain funds from its non-U.S. subsidiaries that are not needed to finance local operations; however, these particular repatriation activities have not and are not expected to result in a significant incremental tax liability to the Company.
For comparison of cash flows for the fiscal years ended December 31, 2024 and 2023, see Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 4, 2025.
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
In millions
2025 2024 2025 2024
Cash provided by (used for):
Operating activities - continuing operations $ 1,062 $ 2,903 $ 1,045 $ 2,939
Operating activities - discontinued operations (30) 11 - -
Operating activities $ 1,032 $ 2,914 $ 1,045 $ 2,939
Investing activities $ (2,126) $ (2,368) $ (2,126) $ (2,368)
Financing activities $ 2,508 $ (1,168) $ 2,495 $ (1,193)
Cash Flows from Operating Activities
Cash provided by operating activities from continuing operations in 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, which were partially offset by cash used for working capital, performance-based compensation, pension contributions and severance payments related to the 2025 Restructuring Program. Cash provided by operating activities from continuing operations in 2024 was primarily driven by the Company's cash earnings and dividends from equity method investments, which were partially offset by cash used for working capital, performance-based compensation payments, pension contributions and severance payments related to the 2023 Restructuring Program.
Net Working Capital and Current Ratio at Dec 31 Dow Inc. TDCC
In millions 2025 2024 2025 2024
Current assets $ 18,062 $ 16,590 $ 18,027 $ 16,565
Current liabilities 9,183 10,288 9,076 10,210
Net working capital $ 8,879 $ 6,302 $ 8,951 $ 6,355
Current ratio 1.97:1 1.61:1 1.99:1 1.62:1
Working Capital Metrics Twelve Months Ended
Dec 31, 2025 Dec 31, 2024
Days sales outstanding in trade receivables 43 40
Days sales in inventory 64 60
Days payables outstanding 59 60
Cash provided by (used for) operating activities from discontinued operations reflected cash payments and receipts for certain agreements and matters related to the Company's separation from DowDuPont Inc.
Cash Flows from Investing Activities
Cash used for investing activities in 2025 and 2024 was primarily for capital expenditures and purchases of investments, which were partially offset by proceeds from sales and maturities of investments. In addition, 2025 included a cash inflow related to proceeds from incentives related to capital expenditures, the sale of the soil fumigation product line and certain related assets and the divestiture of the Company's ownership interest in DowAksa. Cash used for investing activities in 2024 also included a cash inflow for the sale of the flexible packaging laminating adhesives business and a cash outflow for the acquisition of Circulus Holdings, LLC, a U.S. mechanical recycling company.
The Company's capital expenditures were $2,479 million in 2025 and $2,940 million in 2024. Capital spending was lower in 2025 as the Company reduced its full year capital spending plan to approximately $2.5 billion. The primary driver for the decrease was the Company's decision to delay construction of the Fort Saskatchewan Path2Zero project. The Company now expects to start up the first and second phases of the project by the end of 2029 and 2030, respectively. The Company expects capital spending for this key growth project to average approximately $1.5 billion annually through 2030. In total, the Company expects capital spending in 2026 to be approximately $2.5 billion, including capital spending related to the construction of the Fort Saskatchewan Path2Zero project. As evidenced across the current and prior economic cycles, the Company will adjust its spending as economic conditions evolve.
Capital spending in recent years has included the construction of a world-scale polyethylene unit on the U.S. Gulf Coast, which was completed in 2025; a new reactor to expand alkoxylation capacity in Europe, mechanically completed in 2025 and expected to begin product qualification and ramp-up activities in early 2026; and construction of the world's first net-zero Scope 1 and 2 carbon dioxide equivalent ("CO2e") emissions integrated ethylene and derivatives complex in Alberta, Canada.
Cash Flows from Financing Activities
Cash provided by financing activities in 2025 for Dow Inc. 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. Cash used for financing activities in 2024 was primarily related to dividends paid to stockholders, purchases of treasury stock and payments on long-term debt, which were partially offset by proceeds from the issuance of long-term debt. TDCC included cash outflows for dividends paid to Dow Inc. See Notes 14 and 17 to the Consolidated Financial Statements for additional information related to the issuance and retirement of debt and the Company's share repurchases and dividends.
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 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 Non-GAAP Cash Flow Measures
Dow Inc.
In millions
2025 2024
Cash provided by operating activities - continuing operations (GAAP) $ 1,062 $ 2,903
Capital expenditures (2,479) (2,940)
Free Cash Flow (non-GAAP) $ (1,417) $ (37)
Reconciliation of Cash Flow Conversion (Cash Flow From Operations to Operating EBITDA) Dow Inc.
In millions 2025 2024
Net income (loss) (GAAP) $ (2,444) $ 1,201
+ Provision (credit) for income taxes (67) 399
Income (loss) before income taxes $ (2,511) $ 1,600
- Interest income 152 200
+ Interest expense and amortization of debt discount 865 811
- Significant items 1
(2,220) (377)
Operating EBIT (non-GAAP) $ 422 $ 2,588
+ Depreciation and amortization 2,834 2,894
Operating EBITDA (non-GAAP) $ 3,256 $ 5,482
Cash provided by operating activities - continuing operations (GAAP) $ 1,062 $ 2,903
Cash flow from operations to net income (GAAP) 2
N/A 241.7 %
Cash Flow Conversion (Cash flow from operations to Operating EBITDA) (non-GAAP) 32.6 % 53.0 %
1.The year ended December 31, 2025, includes severance and related benefit costs, costs associated with exit and disposal activities and impairment charges related to the 2025 Restructuring Program; an impairment charge related to goodwill associated with the Polyurethanes & Construction Chemicals reporting unit, non-cash settlement charges related to the termination of certain Company pension plans in the United States and the United Kingdom, an impairment charge related to assets used for chlor-alkali, propylene oxide and brine production in Latin America, charges related to an arbitration agreement for historical product claims from a divested business, charges associated with agreements entered into with DuPont de Nemours, Inc. and Corteva, Inc. as part of the separation and distribution, a loss on early extinguishment of debt, the settlement of a claim related to water storage groundwater contamination matters, implementation costs associated with the Company's 2025 Restructuring Program and the sale of membership interests of Diamond Infrastructure Solutions and restructuring charges and implementation and efficiency costs associated with the Company's 2023 Restructuring Program; partially offset by a gain on the sale of the soil fumigation product line and divestiture of ownership interest in DowAksa and a gain associated with the reassessment of liabilities for certain accrued Groundwater Matters. 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. See Note 25 to the Consolidated Financial Statements for additional information.
2.Cash flow from operations to net income is not applicable for the year ended December 31, 2025 due to a net loss for the period.
Liquidity & Financial Flexibility
The Company's primary source of incremental liquidity is cash flows from operating activities. The generation of cash from operations over the economic cycle and the Company's ability to access capital markets is expected to meet the Company's cash requirements for working capital, capital expenditures, debt maturities, contributions to pension plans, dividend distributions to stockholders, restructuring payments, 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, 2025. Cash and committed and available forms of liquidity were $13.6 billion at December 31, 2025, an increase of $1.6 billion from December 31, 2024. The Company also has no substantive long-term debt maturities due until 2029. 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, 2025 and 2024. 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, 2025, TDCC issued commercial paper with none outstanding at February 3, 2026.
Committed Credit Facilities
The Company also has the ability to access liquidity through TDCC's committed and available credit facilities. At December 31, 2025, TDCC had total committed and available credit facilities of $8.3 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, 2025.
Accounts Receivable Securitization Facilities
In addition to the above credit facilities, the Company maintains a committed accounts receivable facility in the United States where eligible trade accounts receivable, up to $900 million, may be sold at any point in time and expires in November 2028. 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. This facility expires in March 2026, with renegotiations expected to be completed prior to the expiration. In 2025, there were $106 million in sales of receivables under the U.S. and Europe committed accounts receivable facilities ($290 million in sales of receivables in 2024). At December 31, 2025 and 2024, no material balances of sold receivables remained outstanding.
In addition, the Company has an uncommitted accounts receivable facility in the United States providing additional liquidity, set to expire in November 2028. In 2025, sales of receivables under this facility were $147 million ($378 million in sales of receivables in 2024). At December 31, 2025 and 2024, no material balances of sold receivables remained outstanding. 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 2025, sales of receivables under these facilities were $285 million ($865 million in sales of receivables in 2024). At December 31, 2025, no material balances of sold receivables remained outstanding ($287 million remained outstanding at December 31, 2024). 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. At December 31, 2025, the Company had monetized $197 million of its existing COLI polices' surrender value (zero at December 31, 2024). See Note 6 to the Consolidated Financial Statements for additional information.
Shelf Registration - United States
On June 13, 2025, Dow Inc. and TDCC filed a shelf registration statement with the U.S. Securities and Exchange Commission. The shelf indicates that Dow Inc. may offer common stock; preferred stock; depositary shares; debt securities; guarantees; warrants to purchase common stock, preferred stock and debt securities; and stock purchase contracts and stock purchase units, with pricing and availability of any such offerings depending on market conditions. The shelf also indicates that TDCC may offer debt securities, guarantees and warrants to purchase debt securities, with pricing and availability of any such offerings depending on market conditions. In 2025, TDCC filed a prospectus supplement under this shelf registration to register an undetermined amount of securities for issuance under InterNotes®. Also, in 2025, TDCC filed a prospectus supplement under this shelf registration to register an undetermined amount of securities for issuance under a medium-term notes program.
Debt
As the Company continues to maintain its strong balance sheet and financial flexibility, management is focused on net debt (a non-GAAP financial measure), as the Company believes this is the best representation of its financial leverage at this point in time. As shown in the following table, net debt is equal to total gross debt minus "Cash and cash equivalents" and "Marketable securities."
Total Debt at Dec 31 Dow Inc. TDCC
In millions
2025 2024 2025 2024
Notes payable $ 90 $ 135 $ 90 $ 135
Long-term debt due within one year 222 497 222 497
Long-term debt 17,849 15,711 17,849 15,711
Gross debt $ 18,161 $ 16,343 $ 18,161 $ 16,343
- Cash and cash equivalents 3,816 2,189 3,816 2,189
- Marketable securities 1
385 383 385 383
Net debt (non-GAAP) $ 13,960 $ 13,771 $ 13,960 $ 13,771
Total equity $ 17,522 $ 17,851 $ 17,726 $ 18,032
Gross debt as a percentage of total capitalization 50.9 % 47.8 % 50.6 % 47.5 %
Net debt as a percentage of total capitalization (non-GAAP) 44.3 % 43.5 % 44.1 % 43.3 %
1.Included in "Other current assets" in the consolidated balance sheets.
In the first quarter of 2025, the Company completed debt neutral liability management activities. The Company issued $1 billion of senior unsecured notes. This offering included $400 million aggregate principal amount of 5.35 percent notes due 2035 and $600 million aggregate principal amount of 5.95 percent notes due 2055. The Company used the proceeds to complete cash tender offers for certain debt securities. In total, $943 million aggregate principal amount was tendered and retired. As a result, the Company recognized a pretax loss of $60 million on the early extinguishment of debt, included in "Sundry income (expense) - net" in the consolidated statements of income, related to Corporate.
In the third quarter of 2025, the Company issued $1.4 billion of senior unsecured notes. This offering included $750 million aggregate principal amount of 4.80 percent notes due 2031 and $650 million aggregate principal amount of 5.65 percent notes due 2036. Additionally, the Company redeemed $55 million aggregate principal amount of 9.40 percent notes due 2039. As a result of the redemption, the Company recognized a pretax loss of $18 million on the early extinguishment of debt, included in "Sundry income (expense) - net" in the consolidated statements of income, related to Corporate.
In 2025, the Company issued an aggregate principal amount of $378 million of InterNotes®. Additionally, the Company repaid $334 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 0.48 to 1.00 at December 31, 2025. Management believes TDCC was in compliance with all of its covenants and default provisions at December 31, 2025. 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 2025.
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, 2026 were as follows:
Credit Ratings Long-Term Rating Short-Term Rating Outlook
Fitch Ratings BBB F2 Stable
Moody's Ratings Baa2 P-2 Negative
Standard & Poor's BBB A-2 Negative
On February 21, 2025, Standard & Poor's affirmed TDCC's BBB and A-2 rating, and revised its outlook to negative from stable. Standard & Poor's decision was made as part of their annual review process and reflects the Company's supportive financial policies, scale, liquidity and cost-advantaged footprint.
On July 7, 2025, Moody's Ratings announced a long-term credit rating change for TDCC from Baa1 to Baa2 and affirmed TDCC's P-2 rating and its outlook of negative. On July 31, 2025, Fitch Ratings announced a long-term credit rating change for TDCC from BBB+ to BBB and a short-term credit rating change from F1 to F2, with its outlook remaining stable. The credit rating agencies' decisions were made to reflect the impact of current market conditions on the Company's operating results and cash flow, including the impact of global trade policy uncertainty and capacity additions in the industry, while recognizing the Company's strong asset base, strategic cost actions and long-term commitment to maintaining investment-grade quality.
Dividends
Dow Inc.
Dow Inc. has paid dividends on a quarterly basis and expects to continue to do so, subject to approval by the Board. On July 24, 2025, the Company announced a 50 percent reduction to its quarterly dividend. The following tables provide information on dividends declared and paid to common stockholders:
Dividends Paid for the Years Ended Dec 31 2025 2024
In millions, except per share amounts
Dividends paid, per common share $ 2.10 $ 2.80
Dividends paid to common stockholders $ 1,490 $ 1,966
Dow Inc. Cash Dividends Declared and Paid
Declaration Date Record Date Payment Date Amount (per share)
February 13, 2025 February 28, 2025 March 14, 2025 $ 0.70
April 10, 2025 May 30, 2025 June 13, 2025 $ 0.70
July 24, 2025 August 29, 2025 September 12, 2025 $ 0.35
October 9, 2025 November 28, 2025 December 12, 2025 $ 0.35
TDCC
TDCC has committed to fund Dow Inc.'s dividends paid to common stockholders and share repurchases, as approved by the Board from time to time, as well as certain governance expenses. Funding is accomplished through intercompany loans. TDCC's Board of Directors reviews and determines a dividend distribution to Dow Inc. to settle the intercompany loans. For the year ended December 31, 2025, TDCC declared $1,491 million of dividends and paid $1,503 million of dividends to Dow, Inc. ($2,578 million of dividends declared and $2,485 million of dividends paid to Dow, Inc. for the year ended December 31, 2024). At December 31, 2025, TDCC's intercompany loan balance with Dow Inc. was insignificant. See Note 24 to the Consolidated Financial Statements for additional information.
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 2025. At December 31, 2025, approximately $931 million of the share repurchase program authorization remained available for repurchases. As previously announced, the Company intends to repurchase shares at a minimum to cover dilution over the economic cycle. The Company may from time to time expand its share repurchases beyond dilution, based on a number of factors including macroeconomic conditions, free cash flow generation, and the Dow share price. Any share repurchases, when coupled with the Company's dividends, are intended to implement the long-term strategy of targeting shareholder remuneration of approximately 65 percent 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 funded plans when pension laws and/or economics either require or encourage funding. In 2025 and 2024, the Company contributed $209 million and $121 million to its pension plans, respectively, including contributions to fund benefit payments for its unfunded pension plans. Additionally, in the second quarter of 2024, the Company received a pension plan reversion of approximately $70 million for a portion of the excess funding of one of its plans in Europe, included in "Other assets and liabilities, net" in the consolidated statements of cash flows. The Company expects to contribute approximately $180 million to its pension plans in 2026.
In the fourth quarter of 2025, as part of its ongoing pension derisking initiatives, the Company terminated certain U.S. tax-qualified pension plans, which included 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, participants were provided with various benefit payment or distribution options. The Company also terminated a certain European pension plan, with the plan purchasing nonparticipating annuity contracts for the benefit of plan participants. These transactions were funded with existing plan assets and did not require any cash funding from the Company. These actions resulted in non-cash settlement
charges of $323 million, primarily related to the accelerated recognition of the accumulated actuarial losses of the plans. Additional actions by the Company resulted in total noncash settlement charges across all plans of $342 million for the year ended December 31, 2025.
See Note 19 to the Consolidated Financial Statements for additional information related to the Company's pension plans, including pension plan terminations.
Restructuring
The 2025 Restructuring Program is expected to result in additional cash expenditures of approximately $625 million primarily over the next four years and consist primarily 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 $53 million for the year ended December 31, 2025.
Restructuring implementation and efficiency costs related to the 2023 Restructuring Program were $50 million for the year ended December 31, 2025 ($230 million for the year ended December 31, 2024).
The Company expects to incur additional costs in the future related to its restructuring activities, which will be recognized as incurred. The Company also expects to incur additional employee-related costs, including involuntary termination benefits related to its other optimization activities. These costs cannot be reasonably estimated at this time. See Note 5 to the Consolidated Financial Statements for additional information on the Company's restructuring activities.
Contractual Obligations
The following table summarizes the Company's contractual obligations, commercial commitments and expected cash requirements for interest at December 31, 2025. Additional information related to these obligations can be found in Notes 14, 15, 16 and 19 to the Consolidated Financial Statements.
Contractual Obligations at Dec 31, 2025
Payments Due In
In millions 2026 2027-2028 2029-2030 2031 and beyond Total
Dow Inc.
Long-term debt obligations 1
$ 222 $ 1,560 $ 2,116 $ 14,399 $ 18,297
Expected cash requirements for interest 2
884 1,706 1,528 9,370 13,488
Pension and other postretirement benefits 255 422 417 3,264 4,358
Operating leases 3
397 603 301 418 1,719
Purchase obligations 4
2,673 4,264 3,191 17,181 27,309
Other noncurrent obligations 5
- 756 542 2,079 3,377
Total $ 4,431 $ 9,311 $ 8,095 $ 46,711 $ 68,548
TDCC
Long-term debt obligations 1
$ 222 $ 1,560 $ 2,116 $ 14,399 $ 18,297
Expected cash requirements for interest 2
884 1,706 1,528 9,370 13,488
Pension and other postretirement benefits 255 422 417 3,264 4,358
Operating leases 3
397 603 301 418 1,719
Purchase obligations 4
2,673 4,264 3,191 17,181 27,309
Other noncurrent obligations 5
- 756 542 1,941 3,239
Total $ 4,431 $ 9,311 $ 8,095 $ 46,573 $ 68,410
1.Excludes unamortized debt discount and issuance costs of $226 million. Includes finance lease obligations of $1,126 million and net fair value hedge adjustment gains of $27 million.
2.Cash requirements for interest on long-term debt was calculated using current interest rates at December 31, 2025, and includes $130 million of various floating rate notes.
3.Includes imputed interest of $282 million.
4.Includes a $1.3 billion purchase commitment for the use of a water supply reservoir asset expected to commence in 2028, as discussed in Note 15 to the Consolidated Financial Statements, and outstanding purchase orders and other commitments greater than $1 million obtained through a survey conducted within the Company. The increase from December 31, 2024 was primarily due to supply agreements related to the Company's Fort Saskatchewan Path2Zero project and contract term extensions.
5.Includes liabilities related to asbestos litigation, environmental remediation, legal matters and other noncurrent liabilities. 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.
The Company expects to meet its contractual obligations through its normal sources of liquidity and believes it has the financial resources to satisfy these contractual obligations.
Off-Balance Sheet Arrangements
Off-balance sheet arrangements are obligations the Company has with nonconsolidated entities related to transactions, agreements or other contractual arrangements. The Company holds variable interests in joint ventures accounted for under the equity method of accounting. The Company is not the primary beneficiary of these joint ventures and therefore is not required to consolidate these entities (see Note 23 to the Consolidated Financial Statements). In addition, see Note 13 to the Consolidated Financial Statements for information regarding the transfer of financial assets.
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 if specific triggering events occur. Additional information related to guarantees can be found in the "Guarantees" section of Note 15 to the Consolidated Financial Statements.
Fair Value Measurements
See Note 19 to the Consolidated Financial Statements for information related to fair value measurements of pension and other postretirement benefit plan assets; see Note 21 for information related to other-than-temporary impairments; and, see Note 22 for additional information concerning fair value measurements.
OTHER MATTERS
Recent Accounting Guidance
See Note 2 to the Consolidated Financial Statements for a summary of recent accounting guidance.
Critical Accounting Estimates
The preparation of financial statements and related disclosures in accordance with U.S. GAAP 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 describes the significant accounting policies and methods used in the preparation of the consolidated financial statements. Following are the Company's accounting policies 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"). Each year, Ankura Consulting Group, LLC ("Ankura") performs a review for Union Carbide based upon historical asbestos claims, resolution and asbestos-related defense and processing costs, through the terminal year of 2049. Union Carbide compares current asbestos claim and resolution activity, including asbestos-related defense and processing costs, to the results of the most recent Ankura study at each balance sheet date to determine whether the asbestos-related liability continues to be appropriate.
For additional information, see Part I, Item 3. Legal Proceedings; Asbestos-Related Matters of Union Carbide Corporation in Management's Discussion and Analysis of Financial Condition and Results of Operations; and Notes 1 and 15 to the Consolidated Financial Statements.
Environmental Matters
The Company determines the costs of environmental remediation of its facilities and formerly owned facilities based on evaluations of current law and existing technologies. Inherent uncertainties exist in such evaluations primarily due to unknown environmental conditions, changing governmental regulations and legal standards regarding liability, and emerging remediation technologies. The recorded liabilities are adjusted periodically as remediation efforts progress, or as additional technical or legal information becomes available. At December 31, 2025, the Company had accrued obligations of $1,011 million for probable environmental remediation and restoration costs, including $221 million for the remediation of Superfund sites. 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. For further discussion, see Environmental Matters in Management's Discussion and Analysis of Financial Condition and Results of Operations and Notes 1 and 15 to the Consolidated Financial Statements.
Pension and Other Postretirement Benefits
The amounts recognized in the consolidated financial statements related to pension and other postretirement benefits are determined from actuarial valuations. Inherent in these valuations are assumptions including expected return on plan assets, discount rates at which the liabilities could have been settled at December 31, 2025, rate of increase in future compensation levels, mortality rates and health care cost trend rates. These assumptions are updated annually and are disclosed in Note 19 to the Consolidated Financial Statements. In accordance with U.S. GAAP, actual results that differ from the assumptions are accumulated and amortized over future periods and, therefore, affect expense recognized and obligations recorded in future periods. The U.S. pension plans represent 73 percent of the Company's pension plan assets and 72 percent of the pension obligations. The U.S. pension plans are frozen and, therefore, participants do not accrue additional benefits for future service and compensation.
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 following information relates primarily to the U.S. plans; a similar approach is used for the Company's non-U.S. plans.
The Company determines the expected long-term rate of return on assets by performing a detailed analysis of historical and expected returns based on the strategic asset allocation approved by the Company's Investment Committee and the underlying return fundamentals of each asset class. The Company's historical experience with the pension fund asset performance is also considered. The expected return of each asset class is derived from a forecasted future return confirmed by historical experience. The expected long-term rate of return is an assumption and not what is expected to be earned in any one particular year. The weighted-average long-term rate of return assumption used for determining net periodic pension expense for 2025 was 7.04 percent. The weighted-average assumption to be used for determining 2026 net periodic pension expense is 7.22 percent. Future actual pension expense will depend on future investment performance, changes in future discount rates and various other factors related to the population of participants in the Company's pension plans.
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 weighted average discount rate utilized to measure pension obligations decreased to 5.48 percent at December 31, 2025, from 5.74 percent at December 31, 2024.
At December 31, 2025, the net underfunded status of the U.S. tax-qualified plans on a projected benefit obligation basis was $1,301 million. The net underfunded amount decreased $59 million compared with December 31, 2024. The Company uses a generational mortality table to determine the duration of its pension and other postretirement obligations.
The following discussion relates to the Company's significant pension plans.
The Company bases the determination of pension expense on a market-related valuation of plan assets that reduces year-to-year volatility. This market-related valuation recognizes investment gains or losses over a five-year period from the year in which they occur. Investment gains or losses for this purpose represent the difference between the expected return calculated using the market-related value of plan assets and the actual return based on the market value of plan assets. Since the market-related value of plan assets recognizes gains or losses over a five-year period, the future value will be impacted when previously deferred gains or losses are recorded. Over the life of the plans, both gains and losses have been recognized and amortized. At December 31, 2025, net losses of $1,757 million remain to be recognized in the calculation of the market-related value of plan assets. These net losses will result in increases in future pension expense or reduced credits as they are recognized in the market-related value of assets.
The net decrease in the market-related value of assets due to the recognition of prior losses (gains) is presented in the following table:
Net Decrease in Market-Related Asset Value Due to Recognition of Prior Losses (Gains)
In millions
2026 $ 1,262
2027 261
2028 238
2029 (4)
Total $ 1,757
Excluding the impact of the Company's 2025 derisking activities and other one-time events, the Company expects net periodic benefit cost ("NPBC") credit to decrease in 2026 by approximately $66 million compared with 2025. The reduction in the NPBC credit is primarily due to the recognition of prior losses under the market-related valuation of plan assets methodology described above.
A 25 basis point increase or decrease in the long-term return on assets assumption would change the Company's NPBC credit for 2026 by $46 million. A 25 basis point increase in the discount rate assumption would increase the Company's NPBC credit for 2026 by $8 million. A 25 basis point decrease in the discount rate assumption would decrease the Company's NPBC credit for 2026 by $5 million.
Income Taxes
Deferred tax assets and liabilities are determined based on temporary differences between the financial reporting and tax bases of assets and liabilities, applying enacted tax rates expected to be in effect for the year in which the differences are expected to reverse. Based on the evaluation of available evidence, both positive and negative, the Company recognizes future tax benefits, such as net operating loss carryforwards and tax credit carryforwards, to the extent that realizing these benefits is considered to be more likely than not.
At December 31, 2025, the Company had a net deferred tax asset balance of $1,147 million, after valuation allowances of $3,049 million. In evaluating the ability to realize the deferred tax assets, the Company relies on, in order of increasing subjectivity, taxable income in prior carryback years, the future reversals of existing taxable temporary differences, tax planning strategies and forecasted taxable income using historical and projected future operating results.
The Company files tax returns in multiple jurisdictions and is subject to examination by taxing authorities throughout the world. Tax authorities have the ability to review and challenge matters that could be subject to differing interpretation of applicable tax laws and regulations as they relate to the amount, character, timing or inclusion of revenue and expenses or the sustainability of tax attributes. The ultimate resolution of such uncertainties could last several years. When an uncertain tax position is identified, the Company considers and interprets complex tax laws and regulations in order to determine the need for recognizing a provision in its financial statements. Significant judgment is required in determining the timing and measurement of uncertain tax positions. The Company utilizes internal and external expertise in interpreting tax laws to support the Company's tax positions. The Company recognizes the financial statement effects of an uncertain income tax position when it is more likely than not, based on technical merits, that the position will be sustained upon examination. At December 31, 2025, the Company had uncertain tax positions for both domestic and foreign issues of $509 million and $334 million for interest and penalties.
Goodwill
The Company performs goodwill impairment testing at the reporting unit level. Reporting units are the level at which discrete financial information is available and reviewed by business management on a regular basis. The Company tests goodwill for impairment annually (in the fourth quarter), or more frequently when events or changes in circumstances indicate it is more likely than not that the fair value of a reporting unit has declined below its carrying value. Goodwill is evaluated for impairment using qualitative and/or quantitative testing procedures. At December 31, 2025, goodwill was carried by four out of six of the Company's reporting units.
The Company has the option to first perform qualitative testing to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. Qualitative factors assessed at the Company level include, but are not limited to, GDP growth rates, long-term hydrocarbon and energy prices, equity and credit market activity, discount rates, foreign exchange rates and overall financial performance. Qualitative factors assessed at the reporting unit level include, but are not limited to, changes in industry and market structure, competitive environments, planned capacity and new product launches, cost factors such as raw material prices, and financial performance of the reporting unit. If the Company chooses not to complete a qualitative assessment for a given reporting unit or if the initial assessment indicates that it is more likely than not that the estimated fair value of a reporting unit is less than its carrying value, additional quantitative testing is required.
Quantitative testing requires the fair value of the reporting unit to be compared with its carrying value. If the reporting unit's carrying value exceeds its fair value, an impairment charge is recognized for the difference. The Company utilizes a discounted cash flow methodology to calculate the fair value of its reporting units. This valuation technique has been selected by management as the most meaningful valuation method due to the limited number of market comparables for the Company's reporting units. However, where market comparables are available, the Company includes EBIT/EBITDA multiples as part of the reporting unit valuation analysis. The discounted cash flow valuations are completed using the following key assumptions: projected revenue growth rates or compounded annual growth rates, discount rates, tax rates, terminal values, currency exchange rates, and forecasted long-term hydrocarbon and energy prices, by geographic region and by year, which include the Company's key feedstocks as well as natural gas and crude oil (due to its correlation to naphtha). Currency exchange rates and long-term
hydrocarbon and energy prices are established for the Company as a whole and applied consistently to all reporting units, while revenue growth rates, discount rates and tax rates are established by reporting unit to account for differences in business fundamentals and industry risk. These key assumptions drive projected EBIT/EBITDA and EBIT/EBITDA margins, which are key elements of management's internal control over the reporting unit valuation analysis.
2025 Goodwill Impairment Testing
In the second quarter of 2025, the Board approved actions to shut down certain upstream manufacturing assets. As a result of the announced actions, the Company identified potential indicators of goodwill impairment and evaluated whether the fair value of any reporting unit may be less than its carrying amount. The Company identified one reporting unit for which a quantitative interim goodwill impairment test was required. The results of the quantitative impairment test concluded that no goodwill impairment existed, as the fair value exceeded the carrying value of the reporting unit.
In the third quarter of 2025, as a result of continued macroeconomic challenges, the Company evaluated whether the fair value of any reporting unit may be less than its carrying amount. The Company identified one reporting unit for which a quantitative interim goodwill impairment test was required. The results of the quantitative impairment test concluded that no goodwill impairment existed, as the fair value exceeded the carrying value of the reporting unit.
In the fourth quarter of 2025, qualitative testing was performed for all reporting units carrying goodwill as part of the Company's annual goodwill impairment testing. Based on the results of the qualitative testing, quantitative testing was performed on one reporting unit. For the qualitative assessments, management considered factors at both the Company level and the reporting unit level. For the reporting units where only qualitative testing was performed, management concluded it is more likely than not that the carrying value of the reporting unit is less than the fair value of the reporting unit.
Upon completion of the quantitative testing in the fourth quarter of 2025, the Company determined the Polyurethanes & Construction Chemicals reporting unit was impaired. During 2025, the reporting unit did not consistently meet expected financial performance targets, primarily due to significant over supply in the industry, which led to volume reductions and compressed margins for products across the portfolio due to changes in customer buying patterns and supply and demand balances. As a result of these trends and third-party market data, which now project sustained pressure on pricing and volume, and a more moderate growth outlook, the reporting unit reduced its future revenue and profitability projections. The fair value of the reporting unit was estimated using a discounted cash flow model that incorporated current market conditions and reflected reductions in projected revenue growth rates due to lower sales volume and price assumptions. Key assumptions included projected revenue growth, discount rate, tax rate, terminal value, currency exchange rates, and long-term raw material and energy price forecasts. These discounted cash flows did not support the carrying value of the reporting unit. As a result, the Company recorded a goodwill impairment charge of $690 million in the fourth quarter of 2025. The Polyurethanes & Construction Chemicals reporting unit did not carry a goodwill balance at December 31, 2025.
Environmental Matters
Environmental Policies
Dow is committed to world-class environmental, health and safety ("EH&S") performance, as demonstrated by industry-leading results, a long-standing commitment to the American Chemistry Council's Responsible Care®program, and a strong commitment to deliver against its targets around a circular economy and climate protection. These targets set the standard for sustainability in the chemical industry, focusing on improvements in the Company's local corporate citizenship and product stewardship, and by actively pursuing methods to reduce the Company's environmental impact.
To continue to meet the Company's public commitments, as well as the stringent laws and government regulations related to environmental protection and remediation to which its global operations are subject, the Company has well-defined policies, requirements and management systems. The Company's EH&S Management System ("EMS") defines the "who, what, when and how" needed for the businesses to implement the Company's policies and requirements and meet performance objectives, leadership expectations and public commitments. To ensure effective utilization, the EMS is integrated into a company-wide management system for EH&S, Operations, Quality and Human Resources.
The Company believes third-party verification and transparent public reporting are cornerstones of world-class EH&S performance and building public trust. Numerous Dow sites in the U.S. & Canada, EMEAI, Asia Pacific and Latin America have received third-party verification of the Company's compliance with Responsible Care®and with outside specifications such as ISO-14001. The Company continues to be a global champion of Responsible Care®and has worked to broaden the application and impact of Responsible Care®around the world through engagement with suppliers, customers and joint venture partners.
Dow manages environmental data for reporting with a waste, water and emissions inventory system. All emitting manufacturing sites globally record their emissions and water use in the system annually. The data sets are reviewed at the facility level and then by global coordinators before being aggregated for corporate environmental reporting purposes.
Dow's EH&S policies help to ensure the Company achieves its annual health and safety performance targets and the Company seeks to continuously improve performance through process and personal safety project implementations. Improvement in these areas, as well as environmental compliance, remains a top management priority, as the Company continues to implement its progressive, multi-decade sustainability targets that include advancing a circular economy and climate protection. Progress is reviewed annually by management and with the Environment, Health, Safety & Technology ("EHS&T") Committee of the Board.
Detailed information on Dow's performance regarding environmental matters and goals is accessible through the Company's Purpose in Action webpage at www.corporate.dow.com/en-us/purpose-in-action. Dow's website and its content are not deemed incorporated by reference into this report.
Chemical Security
Public and political attention continues to be placed on the protection of critical infrastructure, including the chemical industry, from security threats. Sabotage, terrorism, war, natural disasters and cybersecurity incidents have increased global concerns about the security and safety of chemical production and distribution. Many, including the Company and the American Chemistry Council, have called for uniform risk-based and performance-based national standards for securing the U.S. chemical industry. The Company is subject to U.S. regulations with established risk-based and performance-based standards that must be met at U.S. Coast Guard-regulated facilities promulgated by the U.S. Department of Homeland Security. The Company is also subject to the requirements of the Rail Transportation Security Rule issued by the U.S. Transportation Security Administration. The Company continues to support uniform risk-based national standards for securing the chemical industry.
The Company maintains a comprehensive, multi-level security plan that focuses on security, emergency planning, preparedness and response. This plan, which has been activated in response to significant world and national events, is reviewed on an annual basis. The Company continues to improve its security plans, placing emphasis on the safety of Dow communities and people by being prepared to meet risks at any level and to address both internal and external identifiable risks. The security plan includes regular vulnerability assessments, security audits, mitigation efforts and physical security upgrades designed to reduce vulnerability. As discussed in Part I, Item 1C. Cybersecurity, the Company also maintains a comprehensive cybersecurity and information security framework, which includes and is not limited to risk assessments, mitigation through a threat intelligence-driven approach, application controls, and a defense-in-depth strategy to safeguard critical assets. This framework leverages International Organization for Standardizations 27001/27002 standards for general information technology controls, International Society of Automation/International Electrotechnical Commission standards for industrial automation, the National Institute of Standards and Technology Cyber Security Framework ("NIST CSF") for measuring overall readiness to respond to cybersecurity threats. The Company's security plans are also designed to avert interruptions of normal business operations that could materially and adversely affect the Company's results of operations, financial condition and cash flows.
The Company played a key role in the development and implementation of the American Chemistry Council's Responsible Care®Security Code ("Security Code"), which requires that all aspects of security - including facility, transportation and cyberspace - be assessed and gaps addressed. Through the global implementation of the Security Code, the Company has permanently heightened the level of security - not just in the United States, but worldwide. The Company employs several hundred employees and contractors in its Emergency Services and Security department worldwide. In 2019, the Company established its Global Security Operations Center ("GSOC") to provide 24-hour/day, 365-day/year real-time monitoring of global risks to Dow assets and people. The GSOC employs state-of-the-art social media monitoring, threat reporting and geo-fencing capabilities to analyze global risks and report those risks, facilitating decision-making and actions to prevent Dow crises.
Through the implementation of the Security Code, including voluntary security enhancements and upgrades, the Company is well-positioned to comply with U.S. chemical facility regulations and other regulatory security frameworks. The Company participates with the American Chemistry Council to periodically review and update the Security Code.
The Company continues to work collaboratively across the supply chain on Responsible Care®, supply chain design, emergency preparedness, shipment visibility and transportation of hazardous materials. The Company cooperated with public and private entities to lead the implementation of advanced tank car design, and track and trace technologies. Further, the Company's Distribution Risk Review process addresses potential threats in all modes of transportation across the Company's supply chain. To reduce vulnerabilities, the Company maintains security measures that meet or exceed regulatory and industry security standards in all areas in which they operate.
The Company's initiatives relative to chemical security, emergency preparedness and response, Community Awareness and Emergency Response and crisis management are implemented consistently at all Dow sites on a global basis. Each Dow site has established outreach programs designed to engage community stakeholders with objectives centered around awareness of Dow operations, products, and efforts to protect worker and community health and the environment. These programs also educate community members on emergency planning and response, emissions and waste, future site plans to reduce waste and emissions, and process safety systems. Finally, these outreach efforts establish an opportunity for Dow site leaders to hear about community stakeholder expectations and address questions and concerns about safety, health, environmental or other issues. The Company participates with chemical associations globally and participates as an active member of the Global Congress on Chemical Security and Emerging Threats and in positions of leadership in the U.S. Chemical Sector Coordinating Council.
Climate Protection
Evaluation of climate-related risks and opportunities continues to be a catalyst for the development of the Company's Decarbonize & Grow strategy (Dow's climate transition plan) and its broad water stewardship and habitat conservation efforts. Dow's science-based strategy includes a phased approach to decarbonize while meeting the growing demand for Dow's products and contributing to a low-emissions future through continued investment in new products, technologies and processes, and a focus on water resilience in key watersheds and positive impact on biodiversity through habitat conservation.
In 2020, Dow set a target to be carbon neutral by 2050 across Scopes 1, 2 and 3, as defined by the Greenhouse Gas Protocol Corporate Accounting and Reporting Standard, plus product benefits. Dow's Protect the Climate goals include reducing net annual greenhouse gas ("GHG") emissions by 5 million metric tons by 2030 versus its 2020 baseline, representing approximately a 15 percent reduction versus 2020 and a nearly 30 percent reduction since 2005. Dow has a multi-generational plan to replace end-of-life emissions-intensive assets with higher-efficiency, lower-emissions assets. Dow has continued its near-term progression in its Decarbonize & Grow strategy by starting construction of its Fort Saskatchewan Path2Zero project which will be the world's first net-zero Scope 1 and 2 emissions ethylene complex, when completed, and will decarbonize approximately 20 percent of Dow's global ethylene production capacity. While Dow remains committed to this project and the growth upside it will enable, the Company now expects to complete construction of the project with a two-year delay, with the first and second phases expected to start up by the end of 2029 and 2030, respectively. Dow has also continued to advance a project with X-energy, a nuclear energy innovation company, to commercialize an advanced small modular nuclear reactor that will generate GHG emissions-free process heat and energy at its site in Seadrift, Texas. Energy reduction and optimization projects will provide continuous progress toward Dow's carbon-neutral ambitions.
Dow is also committed to advancing water stewardship within the Company's operations and supply chain and with downstream customers and to working collaboratively to enhance water management at the watershed level. In 2024, Dow announced a robust 2050 water resilience strategy as well as a 50,000 acre habitat conservation target to address these key elements of climate adaptation.
Despite these commitments, climate change-related risks and uncertainties, legal or regulatory responses to climate change, and failure to meet climate change commitments could negatively impact Dow's results of operations, financial condition and/or reputation. Climate-related risks include both physical and transition risks.
Physical Risks
Climate-related physical risks include more frequent severe weather events, potential changes in precipitation patterns, water scarcity and extreme variability in weather patterns, which can disrupt the operations of the Company as well as those of its customers, partners and vendors.
To evaluate physical risks, Dow partnered with S&P Global Trucost ("Trucost") to assess the Company's exposure to physical risks based on the geographic location of its manufacturing operations. The risks assessed included water stress, flood, heat waves, cold waves, hurricanes, wildfires and sea level rise. The analysis included an assessment of the physical risks using a baseline year of 2020 with time periods for medium- (year 2030) and long-term (year 2050) using the Intergovernmental Panel on Climate Change representative concentration pathways. These pathways represent varying degrees of global atmospheric GHG concentrations (low, medium and high), and thus different expectations on global temperature rise. Results are incorporated into Dow's long-term assessments of its manufacturing sites, which are key inputs into Dow's capital approval process.
Transition Risks
Climate-related transition risks include the availability, development and affordability of lower GHG emissions technology, the effects of CO2e pricing, and changes in public sentiment, regulations, taxes, public mandates or requirements as they relate to CO2e, water or land use.
Climate-related risks, including both physical and transition risks, are assessed with input from internal and external sources including corporate, business, function and geographic leaders; subject matter experts; investors; and other stakeholders. The evaluation of climate-related risks and opportunities is integrated into an annual company-wide risk management process, known as enterprise risk management ("ERM"). ERM identifies significant or major risks to the Company and develops action plans to modify or mitigate risks.
To ensure its processes and plans are resilient, Dow uses climate-related scenarios to assess physical and transition risks. Dow's periodic climate scenario analysis considers a longer time frame (currently to 2050) for magnitude of impact. Every few years, Dow also utilizes a robust scenario analysis to assess the long-term materiality and impact of climate-related risks and opportunities. Scenario analysis is used to challenge business-as-usual assumptions and strengthen the resiliency of the Company's Decarbonize & Grow strategy. Scenarios are used to evaluate both physical and transition risk and are particularly useful in evaluating the potential and impact of emerging risks. Dow selected several climate scenarios relevant for physical and transition risks, to cover a range of assumptions regarding policy development and to build resiliency for a variety of outcomes in its strategy.
Managing Climate Risks
Management of climate risk is assigned to Dow's Climate Steering Team ("CST"), which is accountable for developing and implementing plans to mitigate risk and for tracking actions and progress against those plans. With oversight and accountability by the CST, specific carbon-related risks are managed by Dow's Carbon Program Management Office ("PMO"). Water and nature risks are managed by the Water and Nature PMO, which is also accountable to the CST. The PMOs partner with subject matter experts to develop and implement strategies to mitigate or eliminate climate-related risks. The teams develop specific action plans and ensure owners are assigned to drive forward progress to reduce Dow's risk exposure. Risk mitigation status updates are provided to executive leaders on a regular basis and discussions include risk time horizons or magnitude of impact to confirm that the strategy remains solid.
Decarbonize & Grow
The Company continuously works to decarbonize while driving value growth. Dow's Decarbonize & Grow strategy spans nearly every aspect of Dow's business with an approach that focuses on five key areas. These include:
•Optimizing Manufacturing Facilities and Processes for Sustainability: In addition to implementing near-term growth and efficiency investments, Dow is replacing end-of-life assets with low-GHG-emissions technologies, such as hydrogen-ready next-generation capabilities, clean hydrogen use, carbon capture and storage and advanced nuclear.
•Investing in Transformative, Next Generation Manufacturing Technologies: Dow is investing in next-generation, low-GHG-emissions manufacturing technologies that are critical in the decarbonization of the Company's manufacturing. As part of these efforts, the Company safely constructed and energized an electric furnace (e-furnace) test unit to validate the concept of converting steam-cracking furnaces from gas-
fired to electric. This milestone marks a critical juncture on Dow's journey to decarbonize ethylene production, one of the most carbon-intensive aspects of petrochemical manufacturing.
•Building a Value-Generating Scope 3 Decarbonization Pathway: Approximately 70 percent of Dow's emissions footprint fall into Scope 3 categories and more than half of those emissions derive from the raw materials, transportation and other services purchased as a company. Dow is actively validating and developing Scope 3 emissions reduction and mitigation efforts. Collaboration with the Company's partners along the entire value chain is key to lowering Scope 3 carbon emissions.
•Developing Low-GHG-Emissions Products and Services: Through Dow's materials science expertise and collaboration, the Company designs products and services that support its customers in lowering their GHG emissions, including products that facilitate energy efficiency, lightweighting, fuel transition, circularity, increased operational efficiency and resource reductions.
•Increasing Use of Clean Energy and Steam: As a major user and producer of energy, Dow is committed to integrating clean energy, including both renewables and low-GHG-emissions sources, into its operations.
Water Resilience
Water is Dow's largest dependency on nature and water stewardship is a critical component of the Company's strategy. Water-related risk considers water availability (too much, too little), water quality (intake and effluents), access to safe drinking water, health of ecosystems and reputational and regulatory challenges. Dow's approach to identifying water-related risks and impacts includes identification of physical, regulatory and reputational risks. Dow's methodology uses scientifically robust external tools such as the World Resources Institute Aqueduct tool and the World Wildlife Fund water risk filter tool. Dow's actions are also informed by the Trucost physical risk assessment, wherein water scarcity is recognized and addressed as the biggest climate-related threat to corporate assets with potential substantive financial or strategic impact on business.
In 2024, Dow set new water stewardship goals for 2030, 2035, and 2050 as part of its Protect the Climate target. Recognizing the impact of climate change on water and nature, Dow's Water & Nature strategy aims to make its sites and surrounding ecosystems more resilient to conditions like drought and flooding. Dow's water risk management ensures every site and business is accountable for water use, with extra measures for specific water-stressed areas. As part of Dow's Water & Nature strategy, the Company is focused on 20 priority water basins. Regular analysis of water stress is essential to monitor its progression and ensure effective management.
In addition to site water stewardship efforts, Dow will work with suppliers to understand and mitigate water and biodiversity impacts and dependencies in its supply chain and will continue to innovate products that enable society to have reduced impacts on water bodies and other ecosystems.
Accountability for operational water stewardship begins at the site level where the operating permits exist. The Company's progress against its broader water and nature targets is reviewed regularly by management and with the EHS&T Committee of the Board.
Advancing a Circular Economy
As one important part of the materials ecosystem, Dow advocates for the adoption of policies to accelerate the broader pathway to circularity. Circularity-enabling policies such as national targets for recyclability; recycling mandates; mandates for recycled content in products; extended producer responsibility systems to finance state-of-the-art local access to collection, sorting and recycling; and policies to incentivize investments in innovative circular technologies are all critical to ensure that post-use products are diverted away from landfilling, incineration, open dumps and open burning and instead enter the circular economy. To accelerate the materials ecosystem, Dow is working toward its voluntary circularity targets collectively with partners. The goal is to boost recycling rates globally for materials by developing the associated ecosystems to increase collection, sorting and recycling, thereby enabling circularity across entire value chains. As part of Dow's sustainability targets and in response to growing customer demand, Dow intends to transform waste and alternative feedstocks to commercialize 3 million metric tons per year of circular and renewable solutions by 2030.
Although the volume base is fairly modest today, circular products are seeing increasing promise with commercially attractive growth rates, and Dow expects this market to gain an increasingly larger market share over the coming decades as supporting policies, technology and economics improve. Dow is partnering to build industrial ecosystems to collect, reuse or recycle waste and expand its portfolio to meet rapidly growing demand for circular
solutions. Further, Dow is redesigning product formulations to use circular feedstocks such as waste and renewable materials, thereby reducing reliance on virgin fossil feedstocks.
A circular economy requires embedding circularity in all parts of the value chains downstream from Dow. This includes product design for recyclability, accessible collection, sorting and recycling facilities, and appropriate economic incentives to make recycling economically viable. Through innovative developments, combined with partnerships and value chain collaboration, Dow is assisting its customers to design downstream applications for recyclability.
Prioritizing Safer Materials
Dow has been a pioneer in the practice of product stewardship since 1970 and is committed to ensuring that the materials it offers are designed for the safety of people and the planet. Dow monitors regulatory trends and uses cutting-edge science to develop materials that meet the needs of its customers and the value chain.
Dow leverages the Company's strong innovation pipeline to develop sustainable alternatives and reduce or eliminate priority substances in its products. Dow also invests in clean upstream manufacturing technologies to reduce facility emissions and, where necessary, restricts downstream uses of some substances.
Dow is working to deliver a sustainable future through its materials science expertise and collaboration with its customers. By constantly innovating how it sources, manufactures and delivers material solutions, Dow helps customers achieve their goals and create a better tomorrow. Dow has an impact on safer materials directly through the manufacture and delivery of solutions and indirectly through the chemicals that are sourced. Dow continues to assess products across their life cycle using life cycle assessments and digital, in vitro, and in vivotoxicology testing. Dow also transparently communicates information on substances to customers via safety data sheets, regulatory data sheets and, in some cases, product handling guides.
Prioritizing safer materials is a key aspect of Dow's sustainability strategy. Dow is committed to demonstrating the value of chemistry and materials science to society and improving the way the world understands and considers science in decision-making to maximize benefits to businesses, society and the planet. Through Dow's 2025 Safe Materials for a Sustainable Planet goal, the Company has made progress toward this vision by innovating sustainable materials of tomorrow, leading candid conversations about product safety and committing to the advancement of open and transparent chemistry with value chain partners, customers and the public.
Environmental Remediation
For comparison of environmental remediation-related matters for the fiscal years ended December 31, 2024 and 2023, see Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 4, 2025.
The Company accrues the costs of remediation of its facilities and formerly owned facilities based on current law and regulatory requirements. The nature of such remediation can include management of soil and groundwater contamination. The accounting policies adopted to properly reflect the monetary impacts of environmental matters are discussed in Note 1 to the Consolidated Financial Statements. To assess the impact on the financial statements, environmental experts review currently available facts to evaluate the probability and scope of potential liabilities. Inherent uncertainties exist in such evaluations primarily due to unknown environmental conditions, changing governmental regulations and legal standards regarding liability, and the ability to apply remediation technologies. These liabilities are adjusted periodically as remediation efforts progress or as additional technical or legal information becomes available. The Company had an accrued liability of $790 million at December 31, 2025, related to the remediation of current or former Dow-owned sites. At December 31, 2024, the liability related to remediation was $879 million.
In addition to current and former Dow-owned sites, under the federal Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA") and equivalent state laws (hereafter referred to collectively as "Superfund Law"), the Company is liable for remediation of other hazardous waste sites where the Company allegedly disposed of, or arranged for the treatment or disposal of, hazardous substances. Because Superfund Law imposes joint and several liability upon each party at a site, the Company has evaluated its potential liability in light of the number of other companies that have also been named potentially responsible parties ("PRPs") at each site, the estimated apportionment of costs among all PRPs, and the financial ability and commitment of each to pay its
expected share. The Company's remaining liability for the remediation of Superfund sites was $221 million at December 31, 2025 ($234 million at December 31, 2024). The Company has not recorded any third-party recovery related to these sites as a receivable.
Information regarding environmental sites is provided below:
Environmental Sites
Dow-owned Sites 1
Superfund Sites 2
2025 2024 2025 2024
Number of sites at Jan 1 156 154 131 133
Sites added during year - 2 7 1
Sites closed during year (10) - (6) (3)
Number of sites at Dec 31 146 156 132 131
1.Dow-owned sites are sites currently or formerly owned by the Company. In the United States, remediation obligations are imposed by the Resource Conservation and Recovery Act or analogous state law. At December 31, 2025, 24 of these sites (25 sites at December 31, 2024) were formerly owned by Dowell Schlumberger, Inc., a group of companies in which the Company previously owned a 50 percent interest. The Company sold its interest in Dowell Schlumberger in 1992.
2.Superfund sites are sites, including sites not owned by the Company, where remediation obligations are imposed by Superfund Law.
Additional information is provided below for the Company's Midland, Michigan, manufacturing site and Midland off-site locations (collectively, the "Midland sites"), as well as a Superfund site in Wood-Ridge, New Jersey, the locations for which the Company has the largest potential environmental liabilities.
In the early days of operations at the Midland manufacturing site, wastes were usually disposed of on-site, resulting in soil and groundwater contamination, which has been contained and managed on-site under a series of Resource Conservation and Recovery Act permits and regulatory agreements.The Hazardous Waste Operating License for the Midland manufacturing site, issued in 2003, and renewed and replaced in September 2015, also included provisions for the Company to conduct an investigation to determine the nature and extent of off-site contamination from historic Midland manufacturing site operations. In January 2010, the Company, the U.S. Environmental Protection Agency ("EPA") and the State of Michigan ("State") entered into an Administrative Order on Consent 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 CERCLA. See Note 15 to the Consolidated Financial Statements for further information relating to Midland off-site environmental matters.
Rohm and Haas, a wholly owned subsidiary of the Company, is a PRP at the Wood-Ridge, New Jersey, Ventron/Velsicol Superfund Site, and the adjacent Berry's Creek Study Area ("BCSA") (collectively, the "Wood-Ridge sites"). Rohm and Haas is a successor in interest to a company that owned and operated a mercury processing facility, where wastewater and waste handling resulted in contamination of soils and adjacent creek sediments. In 2018, the Berry's Creek Study Area Potentially Responsible Party Group ("PRP Group"), consisting of over 100 PRPs, completed a Remedial Investigation/Feasibility Study for the BCSA. During that time, the EPA concluded that an "iterative or adaptive approach" was appropriate for cleaning up the BCSA. Thus, each phase of remediation will be followed by a period of monitoring to assess its effectiveness and determine if there is a need for more work. In September 2018, the EPA signed a Record of Decision ("ROD 1") which describes the initial phase of the EPA's plan to clean-up the BCSA. ROD 1 will remediate waterways and major tributaries in the most contaminated part of the BCSA. The PRP Group has signed agreements with the EPA to design the selected remedy. Although there is currently much uncertainty as to what will ultimately be required to remediate the BCSA and Rohm and Haas's share of these costs has yet to be determined, the range of activities that are required in the interim Record of Decision is known in general terms. The PRP Group is engaged in discussions with the EPA and the State of New Jersey regarding a Remedial Action Consent Decree to implement the ROD 1 remedy for the BCSA. The EPA has approved the 100 percent design for the ROD 1 remedy.
At December 31, 2025, the Company had accrued liabilities totaling $277 million ($303 million at December 31, 2024) for environmental remediation at the Midland and Wood-Ridge sites. In 2025, the Company spent $40 million ($45 million in 2024) for environmental remediation at the Midland and Wood-Ridge sites.
In total, the Company's accrued liability for probable environmental remediation and restoration costs was $1,011 million at December 31, 2025, compared with $1,113 million at December 31, 2024. 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 and cash flows.
The amounts charged to income on a pretax basis related to environmental remediation totaled $63 million in 2025 and $197 million in 2024. The amounts charged to income on a pretax basis related to operating the Company's current pollution abatement facilities, excluding internal recharges, totaled $819 million in 2025 and $823 million in 2024. Capital expenditures for environmental protection were $226 million in 2025 and $208 million in 2024.
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. 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.
For comparison of asbestos-related matters of Union Carbide Corporation for the fiscal years ended December 31, 2024 and 2023, see Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 4, 2025.
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 2025 2024
Claims unresolved at Jan 1 5,813 6,367
Claims filed 4,615 4,568
Claims settled, dismissed or otherwise resolved (3,270) (5,122)
Claims unresolved at Dec 31 7,158 5,813
Claimants with claims against both Union Carbide and Amchem (1,277) (1,005)
Individual claimants at Dec 31 5,881 4,808
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 Part I, Item 3. Legal Proceedings and Asbestos-Related Matters of Union Carbide Corporation in Note 15 to the Consolidated Financial Statements.
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