Dow Inc.
10/24/2025 | Press release | Distributed by Public on 10/24/2025 05:49
Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)
| MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. |
This Quarterly Report on Form 10-Q is a combined report being filed by Dow Inc. and The Dow Chemical Company and its consolidated subsidiaries ("TDCC" and together with Dow Inc., "Dow" or the "Company") due to the parent/subsidiary relationship between Dow Inc. and TDCC. The information reflected in the report is equally applicable to both Dow Inc. and TDCC, except where otherwise noted. Each of Dow Inc. and TDCC is filing information in this report on its own behalf and neither company makes any representation to the information relating to the other company.
Pursuant to General Instruction H(1)(a) and (b) for Form 10-Q "Omission of Information by Certain Wholly-Owned Subsidiaries," TDCC is filing this Form 10-Q with a reduced disclosure format.
Except as otherwise indicated by the context, the term "Union Carbide" means Union Carbide Corporation, a wholly owned subsidiary of the Company. Additionally, the term "Diamond Infrastructure Solutions" means Dow InfraCo, LLC, an entity that owns and operates infrastructure assets at certain Dow locations on the U.S. Gulf Coast and became a consolidated variable interest entity upon the sale of a portion of the entity's membership interests on May 1, 2025. The term "EMEAI" refers to the geographic region of Europe, Middle East, Africa and India.
Dow's website and its content are not deemed incorporated by reference into this report.
STATEMENT ON MACROECONOMIC CONDITIONS AND FOURTH QUARTER OUTLOOK
Overview of Macroeconomic Conditions and the Company's Response
The Company has continued to face challenging market conditions, including the significant impact of slower global GDP growth, through the third quarter of 2025. Industry overcapacity due to newer entrants exporting at anti-competitive economics has, and is expected to continue to, negatively impact the Company's results of operations and cash flows. 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 the first nine months of 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 II, 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, until market conditions improve, reducing the Company's expected 2025 enterprise-wide capital expenditures to $2.5 billion, a reduction from the Company's original plan of $3.5 billion. 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 Path2Zero 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 will write-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.
On July 24, 2025, the Company's Board declared a quarterly dividend of $0.35 per share, reducing the dividend by 50 percent compared with the dividend declared in second quarter 2025, 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. The Company's fourth quarter dividend of $0.35 per share was declared by the Board on October 9, 2025.
Outlook
The Company is staying close with its customers, maintaining the financial flexibility it has built, and strengthening its competitiveness to drive higher earnings. While the near-term market backdrop remains largely unchanged across the end markets Dow serves, the Company continues to take actions to build on its strong foundation and enable greater long-term shareholder returns when macroeconomic conditions improve. Dow is focused on resilient areas of its portfolio where it can capture share and premiums. And, the Company is delivering increased cost savings, rationalizing higher-cost areas of its asset footprint, primarily in Europe, and applying a disciplined approach to its balance sheet and cash flow. As it has demonstrated, Dow is committed to identifying and implementing additional targeted initiatives designed to enhance its earnings and further optimize its cost structure.
OVERVIEW
The following is a summary of the results for the three months ended September 30, 2025:
•The Company reported net sales in the third quarter of 2025 of $10.0 billion, down 8 percent from $10.9 billion in the third quarter of 2024, and down in all operating segments; Packaging & Specialty Plastics (down 11 percent), Industrial Intermediates & Infrastructure (down 4 percent) and Performance Materials & Coatings (down 6 percent). Net sales decreased in all geographic regions; the U.S. & Canada (down 6 percent), EMEAI (down 13 percent), Latin America (down 11 percent) and Asia Pacific (down 3 percent).
•Local price decreased 8 percent compared with the third quarter of 2024, and was down in all operating segments; Packaging & Specialty Plastics (down 10 percent), Industrial Intermediates & Infrastructure (down 8 percent) and Performance Materials & Coatings (down 5 percent). Local price was down in all geographic regions; the U.S. & Canada and Asia Pacific (both down 9 percent) and EMEAI and Latin America (both down 8 percent).
•Volume decreased 1 percent compared with the third quarter of 2024 and was mixed by operating segment; Packaging & Specialty Plastics (down 1 percent), Industrial Intermediates & Infrastructure (up 2 percent) and Performance Materials & Coatings (down 2 percent). Volume increased in Asia Pacific (up 6 percent) and the U.S. & Canada (up 3 percent), and was more than offset by a decrease in EMEAI (down 8 percent) and Latin America (down 3 percent).
•Currency had a favorable impact of 1 percent on net sales compared with the third quarter of 2024, driven by EMEAI (up 4 percent).
•Equity in losses of nonconsolidated affiliates was $72 million in the third quarter of 2025, compared with equity in earnings of nonconsolidated affiliates of $2 million in the third quarter of 2024, primarily due to lower results at the Company's principal joint ventures, including the impact of an unplanned event at Sadara.
•Net income attributable to noncontrolling interests was $62 million in the third quarter of 2025, compared with $26 million in the third quarter of 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 40 percent of the membership interests in Diamond Infrastructure Solutions in the second quarter of 2025 and an additional 9 percent in the third quarter of 2025.
•Net income available for Dow Inc. and TDCC common stockholder(s) was $62 million in the third quarter of 2025, compared with $214 million and $224 million, respectively, in the third quarter of 2024. Earnings per share for Dow Inc. was $0.08 per share in the third quarter of 2025, compared with $0.30 per share in the third quarter of 2024.
•Cash provided by operating activities - continuing operations was $1,130 million in the third quarter of 2025, compared with $800 million in the third quarter of 2024. Cash provided by operating activities - continuing operations was up $1,600 million compared with the second quarter of 2025, primarily driven by working capital improvements and advance payments received from customers for low carbon solutions and other long-term supply agreements.
•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, Dow Inc. announced that its Board declared a dividend of $0.35 per share, payable on September 12, 2025, to shareholders of record as of August 29, 2025. This marks the 456th consecutive dividend paid by the Company or its affiliates since 1912.
•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 Advanced Composites Holdings BV ("DowAksa"), a nonconsolidated affiliate, 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.
In addition, the following events occurred subsequent to the third quarter of 2025:
•On October 9, 2025, Dow Inc. announced that its Board declared a dividend of $0.35 per share, payable on December 12, 2025, to shareholders of record as of November 28, 2025. This marks the 457th consecutive dividend paid by the Company or its affiliates since 1912.
RESULTS OF OPERATIONS
Net Sales
The following tables summarize net sales and sales variances by operating segment and geographic region from the prior year:
| Summary of Sales Results | Three Months Ended | Nine Months Ended | ||||||||||||
| In millions | Sep 30, 2025 | Sep 30, 2024 | Sep 30, 2025 | Sep 30, 2024 | ||||||||||
| Net sales | $ | 9,973 | $ | 10,879 | $ | 30,508 | $ | 32,559 | ||||||
| Sales Variances by Operating Segment and Geographic Region |
Three Months Ended Sep 30, 2025
|
Nine Months Ended Sep 30, 2025
|
||||||||||||||||||||||||||||||
| Local Price & Product Mix | Currency | Volume |
Portfolio & Other 1
|
Total | Local Price & Product Mix | Currency | Volume |
Portfolio & Other1
|
Total | |||||||||||||||||||||||
| Percentage change from prior year | ||||||||||||||||||||||||||||||||
| Packaging & Specialty Plastics | (10) | % | 1 | % | (1) | % | (1) | % | (11) | % | (8) | % | - | % | 1 | % | (1) | % | (8) | % | ||||||||||||
| Industrial Intermediates & Infrastructure | (8) | 2 | 2 | - | (4) | (5) | - | - | - | (5) | ||||||||||||||||||||||
| Performance Materials & Coatings | (5) | 1 | (2) | - | (6) | (3) | - | (2) | - | (5) | ||||||||||||||||||||||
| Total | (8) | % | 1 | % | (1) | % | - | % | (8) | % | (6) | % | - | % | - | % | - | % | (6) | % | ||||||||||||
| Total, excluding the Hydrocarbons & Energy business | (8) | % | 1 | % | - | % | - | % | (7) | % | (6) | % | - | % | - | % | (1) | % | (7) | % | ||||||||||||
| U.S. & Canada | (9) | % | - | % | 3 | % | - | % | (6) | % | (5) | % | - | % | 3 | % | (1) | % | (3) | % | ||||||||||||
| EMEAI | (8) | 4 | (8) | (1) | (13) | (6) | 1 | (3) | (1) | (9) | ||||||||||||||||||||||
| Asia Pacific | (9) | - | 6 | - | (3) | (8) | - | 3 | - | (5) | ||||||||||||||||||||||
| Latin America | (8) | - | (3) | - | (11) | (8) | - | (4) | - | (12) | ||||||||||||||||||||||
| Total | (8) | % | 1 | % | (1) | % | - | % | (8) | % | (6) | % | - | % | - | % | - | % | (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.
Net sales in the third quarter of 2025 were $10.0 billion, down 8 percent from $10.9 billion in the third quarter of 2024, with local price down 8 percent, volume down 1 percent, and a favorable currency impact of 1 percent. Net sales decreased in all operating segments and all geographic regions. Local price decreased in all geographic regions and all operating segments, with Packaging & Specialty Plastics down 10 percent, Industrial Intermediates & Infrastructure down 8 percent, and Performance Materials & Coatings down 5 percent. Volume decreased 1 percent, driven by EMEAI (down 8 percent) and Latin America (down 3 percent), partially offset by increases in Asia Pacific (up 6 percent) and the U.S. & Canada (up 3 percent). Volume decreased in Packaging & Specialty Plastics (down 1 percent), increased in Industrial Intermediates & Infrastructure (up 2 percent) and decreased in Performance Materials & Coatings (down 2 percent). Currency favorably impacted net sales by 1 percent, driven by EMEAI (up 4 percent). Portfolio & other unfavorably impacted net sales in Packaging & Specialty Plastics (down 1 percent). Excluding the Hydrocarbons & Energy business, net sales decreased 7 percent.
Net sales for the first nine months of 2025 were $30.5 billion, down 6 percent from $32.6 billion in the same period last year, with local price down 6 percent, and volume and currency both flat. Net sales decreased in all operating segments and all geographic regions. Local price decreased in all geographic regions and all operating segments, with Packaging & Specialty Plastics down 8 percent, Industrial Intermediates & Infrastructure down 5 percent, and Performance Materials & Coatings down 3 percent. Volume was flat, with gains in Asia Pacific and the U.S. & Canada (both up 3 percent) offset by declines in Latin America (down 4 percent) and EMEAI (down 3 percent). Volume increased in Packaging & Specialty Plastics (up 1 percent), was flat in Industrial Intermediates & Infrastructure, and declined in Performance Materials & Coatings (down 2 percent). Portfolio & other unfavorably impacted net sales in Packaging & Specialty Plastics (down 1 percent). Excluding the Hydrocarbons & Energy business, net sales decreased 7 percent.
Cost of Sales
Cost of sales ("COS") was $9.2 billion in the third quarter of 2025, compared with $9.8 billion in the third quarter of 2024. COS decreased in the third quarter of 2025 primarily due to lower raw material, feedstock and energy costs, lower planned maintenance turnaround spending, the impact of the Company's cost reduction initiatives and the absence of a charge in the third quarter of 2024 related to an arbitration settlement agreement for historical product claims from a divested business. For the first nine months of 2025, COS was $28.5 billion, compared with $28.9 billion in the first nine months of 2024. COS for the first nine months of 2025 decreased primarily due to lower raw material, feedstock and energy costs, lower planned maintenance turnaround spending, adjustments to legacy groundwater contamination matters and the absence of a charge in the third quarter of 2024 related to an arbitration settlement agreement for historical product claims from a divested business. COS as a percentage of net sales was 92.7 percent in the third quarter of 2025 (90.2 percent in the third quarter of 2024) and 93.5 percent for the first nine months of 2025 (88.7 percent for the first nine months of 2024).
Research and Development Expenses
Research and development ("R&D") expenses totaled $191 million in the third quarter of 2025, compared with $208 million in the third quarter of 2024. R&D expenses for the first nine months of 2025 were $579 million, compared with $608 million in the first nine months of 2024. R&D expenses for the three and nine months ended September 30, 2025 decreased primarily due to the Company's cost reduction initiatives.
Selling, General and Administrative Expenses
Selling, general and administrative ("SG&A") expenses totaled $340 million in the third quarter of 2025, compared with $396 million in the third quarter of 2024. For the first nine months of 2025, SG&A expenses were $1,053 million, compared with $1,228 million in the first nine months of 2024. SG&A expenses for the three and nine months ended September 30, 2025 decreased primarily due to the impact of lower third-party purchased services, the impact of the Company's cost reduction initiatives, as well as decreased bad debt expense. The first nine months of 2025 also included the impact of a favorable resolution of a dispute with a customer.
Amortization of Intangibles
Amortization of intangibles was $46 million in the third quarter of 2025 compared with $76 million in the third quarter of 2024. In the first nine months of 2025, amortization of intangibles was $185 million, compared with $234 million in the first nine months of 2024. Amortization of intangibles decreased primarily due to certain intangible assets becoming fully amortized in 2025.
Restructuring 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. As a result of these actions, in the first quarter of 2025 the Company recorded pretax charges of $207 million for severance and related benefits costs, related to Corporate. 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, in the second quarter of 2025 the Company recorded pretax restructuring charges of $591 million, consisting of severance and related benefit costs of $154 million, asset write-downs and write-offs of $334 million and costs associated with exit and disposal activities of $103 million. Restructuring charges by segment were as follows: $158 million in Packaging & Specialty Plastics, $89 million in Industrial Intermediates & Infrastructure, $147 million in Performance Materials & Coatings and $197 million in Corporate. In the third quarter of 2025, the Company recorded additional pretax restructuring charges of $23 million, consisting of asset write-downs and write-offs of $8 million and costs associated with exit and disposal activities of $15 million. The additional restructuring charges by segment were as follows: $3 million in Packaging & Specialty Plastics, $6 million in Industrial Intermediates & Infrastructure, $3 million in Performance Materials & Coatings and $11 million in Corporate. See Note 5 to the Consolidated Financial Statements for additional information.
2023 Restructuring Program
Actions related to the restructuring program approved by the Board on January 25, 2023 were complete at the end of the second quarter of 2025. In the first quarter of 2025, the Company recorded an additional pretax restructuring charge of $5 million for asset write-downs and write-offs and an asset related credit adjustment of $4 million, related to Industrial Intermediates & Infrastructure. See Note 5 to the Consolidated Financial Statements for additional information.
Equity in Earnings (Losses) of Nonconsolidated Affiliates
The Company's share of equity in losses of nonconsolidated affiliates was $72 million in the third quarter of 2025, compared with equity in earnings of nonconsolidated affiliates of $2 million in the third quarter of 2024. The Company's share of equity in losses of nonconsolidated affiliates was $122 million for the first nine months of 2025, compared with equity in earnings of nonconsolidated affiliates of $45 million for the first nine months of 2024. The decrease in both periods was primarily driven by lower results at the Company's Thai, Kuwait and Sadara joint ventures. Cash dividends from nonconsolidated affiliates were $190 million for the first nine months of 2025, compared with $266 million for the first nine months of 2024.
Sundry Income (Expense) - Net
Sundry income (expense) - net for the three months ended September 30, 2025 was income of $185 million and $184 million for Dow Inc. and TDCC, respectively, compared with income of $119 million and $118 million, respectively, for the three months ended September 30, 2024. The third quarter of 2025 included a gain from the divestiture of the Company's ownership interest in DowAksa, non-operating pension and postretirement benefit plan credits and foreign currency exchange gains, partially offset by a loss on early extinguishment of debt. The third quarter of 2024 included non-operating pension and postretirement benefit plan credits, gains on the sales of assets and investments and foreign currency exchange losses. See Note 6 to the Consolidated Financial Statements for additional information.
Sundry income (expense) - net for the nine months ended September 30, 2025 was income of $345 million and $360 million for Dow Inc. and TDCC, respectively, compared with income of $256 million and $253 million, respectively, for the nine months ended September 30, 2024. The first nine months of 2025 included a gain from the divestiture of the Company's soil fumigation product line and its ownership interest in DowAksa, non-operating pension and postretirement benefit plan credits, and foreign currency exchange gains, partially offset by a loss on early extinguishment of debt. The first nine months of 2024 included non-operating pension and postretirement benefit plan credits and gains on the sales of assets and investments, partially offset by foreign currency exchange losses. See Note 6 to the Consolidated Financial Statements for additional information.
Interest Expense and Amortization of Debt Discount
Interest expense and amortization of debt discount was $221 million in the third quarter of 2025, compared with $199 million in the third quarter of 2024. Interest expense and amortization of debt discount was $646 million in the first nine months of 2025, compared with $595 million in the first nine months of 2024. The increase in interest expense was primarily due to increased issuances of commercial paper during the first nine months of 2025. See Liquidity and Capital Resources in Management's Discussion and Analysis of Financial Condition and Results of Operations and Note 13 to the Consolidated Financial Statements for additional information.
Provision (Credit) for Income Taxes
The Company's effective tax rate fluctuates based on, among other factors, where income is earned, the level of income relative to tax attributes and the level of equity earnings, since most earnings from the Company's equity method investments are taxed at the joint venture level. In the third quarter of 2025, the Company reported a credit for income taxes of $54 million, resulting in a negative effective tax rate of 77.1 percent. In the third quarter of 2024, the Company reported a provision for income taxes of $84 million, resulting in an effective tax rate of 25.9 percent and 25.1 percent for Dow Inc. and TDCC, respectively. For the first nine months of 2025, the Company reported a provision for income taxes of $4 million, resulting in a negative effective tax rate of 0.4 percent. For the first nine months of 2024, the Company reported a provision for income taxes of $145 million, resulting in an effective tax rate of 10.5 percent and 10.4 percent for Dow Inc. and TDCC, respectively.
The credit for income taxes for the third quarter of 2025 was impacted by the recording of a tax benefit stemming from the U.S. Tax Court's decision in Varian Medical Systems Inc. v. Commissionerof $100 million and a tax benefit of $20 million related to the sale of an additional portion of the Company's membership interests in Diamond Infrastructure Solutions, partially offset by losses attributable to jurisdictions for which no tax benefit can be recognized. The provision for income taxes for the first nine months of 2025 was also impacted by the initial sale of
a portion of the Company's membership interests in Diamond Infrastructure Solutions resulting in a tax benefit of $89 million, which was offset by valuation allowances in certain foreign jurisdictions of $242 million. See Note 17 to the Consolidated Financial Statements for additional information related to the Diamond Infrastructure Solutions transaction. In the first quarter of 2024, the Company recorded a tax credit of $194 million related to a reassessment of interest and penalties on a tax matter in a foreign jurisdiction, resulting in a reduced effective tax rate for the first nine months of 2024.
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 GloBE into their legislation and several others are expected to enact these rules 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. Based on the analysis performed by the Company to date, the Act is not expected to have a material impact on the effective tax rate.
Net Income Attributable to Noncontrolling Interests
Net income attributable to noncontrolling interests was $62 million in the third quarter of 2025, compared with $26 million in the third quarter of 2024. Net income attributable to noncontrolling interests was $113 million in the first nine months of 2025, compared with $67 million for the first nine months of 2024. The increase in net income attributable to noncontrolling interests was primarily driven by the initial sale of 40 percent of the membership interests of Diamond Infrastructure Solutions in the second quarter of 2025 and the sale of an additional 9 percent in the third quarter of 2025. See Notes 17 and 22 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 income of $62 million, or $0.08 per share, in the third quarter of 2025, compared with income of $214 million, or $0.30 per share, in the third quarter of 2024. Net income (loss) available for Dow Inc. common stockholders was a loss of $1,080 million, or $1.53 per share, in the first nine months of 2025, compared with income of $1,169 million, or $1.65 per share, in the first nine months of 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 income of $62 million in the third quarter of 2025, compared with income of $224 million in the third quarter of 2024. Net income (loss) available for the TDCC common stockholder was a loss of $1,059 million in the first nine months of 2025, compared with income of $1,186 million in the first nine months of 2024. TDCC's common shares are owned solely by Dow Inc.
SEGMENT RESULTS
For further discussion of the Company's segments, see Part I, Item 1. Business of the combined Dow Inc. and TDCC Annual Report on Form 10-K for the fiscal year ended December 31, 2024 ("2024 10-K"), filed with the SEC on February 4, 2025.
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 (loss) before income taxes") before interest, excluding the impact of significant items. Operating EBIT by segment includes all operating items relating to the businesses; items that principally apply to Dow as a whole are assigned to Corporate. See Note 23 to the Consolidated Financial Statements for reconciliations of these measures.
PACKAGING & SPECIALTY PLASTICS
| Packaging & Specialty Plastics | Three Months Ended | Nine Months Ended | ||||||||||||
| In millions | Sep 30, 2025 | Sep 30, 2024 | Sep 30, 2025 | Sep 30, 2024 | ||||||||||
| Net sales | $ | 4,891 | $ | 5,516 | $ | 15,226 | $ | 16,461 | ||||||
| Operating EBIT | $ | 199 | $ | 618 | $ | 612 | $ | 1,926 | ||||||
| Equity earnings (losses) | $ | (6) | $ | 16 | $ | 40 | $ | 96 | ||||||
| Packaging & Specialty Plastics | Three Months Ended | Nine Months Ended | ||||||
| Percentage change from prior year | Sep 30, 2025 | Sep 30, 2025 | ||||||
| Change in Net Sales from Prior Period due to: | ||||||||
| Local price & product mix | (10) | % | (8) | % | ||||
| Currency | 1 | - | ||||||
| Volume | (1) | 1 | ||||||
|
Portfolio & other 1
|
(1) | (1) | ||||||
| Total | (11) | % | (8) | % | ||||
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.
Packaging & Specialty Plastics net sales were $4,891 million in the third quarter of 2025, down 11 percent from net sales of $5,516 million in the third quarter of 2024, with local price down 10 percent, both volume and portfolio & other down 1 percent and currency up 1 percent. 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. Volume decreased in Packaging and Specialty Plastics due to nonrecurring licensing sales in the year ago period, partially offset by higher polyethylene volumes. Volume decreased in Hydrocarbons & Energy, primarily due to lower merchant olefins sales in EMEAI. Currency had a favorable impact on sales in both businesses and was primarily driven by EMEAI.
Operating EBIT was $199 million in the third quarter of 2025, down $419 million from Operating EBIT of $618 million in the third quarter of 2024. Operating EBIT decreased primarily due to lower integrated margins and equity earnings at the EQUATE and Sadara joint ventures, which were partially offset by the impact of the Company's cost reduction initiatives and lower planned maintenance costs.
Packaging & Specialty Plastics net sales were $15,226 million in the first nine months of 2025, down 8 percent from net sales of $16,461 million in the first nine months of 2024, with local price down 8 percent, portfolio & other down 1 percent, and volume up 1 percent. Local price decreased in Packaging and Specialty Plastics in all geographic regions, primarily 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. Volume increased in Packaging and Specialty Plastics, with higher volumes in Asia Pacific partially offset by a decline in EMEAI and Latin America, driven by higher volumes in polyethylene and nonrecurring licensing sales partially offset by lower functional polymers volumes. Volume increased in Hydrocarbons & Energy, primarily due to higher energy sales in the U.S. & Canada.
Operating EBIT was $612 million in the first nine months of 2025, down $1,314 million from Operating EBIT of $1,926 million in the first nine months of 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.
INDUSTRIAL INTERMEDIATES & INFRASTRUCTURE
| Industrial Intermediates & Infrastructure | Three Months Ended | Nine Months Ended | ||||||||||||
| In millions | Sep 30, 2025 | Sep 30, 2024 | Sep 30, 2025 | Sep 30, 2024 | ||||||||||
| Net sales | $ | 2,834 | $ | 2,962 | $ | 8,475 | $ | 8,921 | ||||||
| Operating EBIT | $ | (47) | $ | (53) | $ | (360) | $ | 41 | ||||||
| Equity losses | $ | (68) | $ | (17) | $ | (165) | $ | (63) | ||||||
| Industrial Intermediates & Infrastructure | Three Months Ended | Nine Months Ended | ||||||
| Percentage change from prior year | Sep 30, 2025 | Sep 30, 2025 | ||||||
| Change in Net Sales from Prior Period due to: | ||||||||
| Local price & product mix | (8) | % | (5) | % | ||||
| Currency | 2 | - | ||||||
| Volume | 2 | - | ||||||
| Total | (4) | % | (5) | % | ||||
Industrial Intermediates & Infrastructure net sales were $2,834 million in the third quarter of 2025, down 4 percent from net sales of $2,962 million in the third quarter of 2024, with local price down 8 percent, and both volume and currency up 2 percent. Local price decreased in both businesses and across all geographic regions, led by declines in industrial and building and construction applications. Volume increased in Industrial Solutions, driven by higher volumes from improved supply availability following planned maintenance activity and the startup of a new alkoxylation unit in Seadrift, Texas, and was led by energy applications. Volume was flat in Polyurethanes & Construction Chemicals as increased methylene diphenyl diisocyanate volumes following a third-party supplier outage in the prior year were offset by declines in consumer durables applications. Currency had a favorable impact on sales in both businesses and was driven by EMEAI.
Operating EBIT was a loss of $47 million in the third quarter of 2025, up $6 million from an Operating EBIT loss of $53 million in the third quarter of 2024. Operating EBIT increased primarily driven by lower raw material and energy costs, lower planned maintenance activity, increased volume, and the impact of the Company's cost reduction initiatives, mostly offset by lower selling prices in both businesses and lower results at the Sadara and EQUATE joint ventures.
Industrial Intermediates & Infrastructure net sales were $8,475 million in the first nine months of 2025, down 5 percent from net sales of $8,921 million in the first nine months of 2024, with local price down 5 percent. 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 the U.S. & Canada and EMEAI, 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 $360 million in the first nine months of 2025, down $401 million from Operating EBIT of $41 million in the first nine months of 2024. Operating EBIT decreased primarily due to margin compression 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 | Three Months Ended | Nine Months Ended | ||||||||||||
| In millions | Sep 30, 2025 | Sep 30, 2024 | Sep 30, 2025 | Sep 30, 2024 | ||||||||||
| Net sales | $ | 2,082 | $ | 2,214 | $ | 6,282 | $ | 6,609 | ||||||
| Operating EBIT | $ | 80 | $ | 140 | $ | 281 | $ | 327 | ||||||
| Equity earnings | $ | 1 | $ | 1 | $ | 2 | $ | 9 | ||||||
| Performance Materials & Coatings | Three Months Ended | Nine Months Ended | ||||||
| Percentage change from prior year | Sep 30, 2025 | Sep 30, 2025 | ||||||
| Change in Net Sales from Prior Period due to: | ||||||||
| Local price & product mix | (5) | % | (3) | % | ||||
| Currency | 1 | - | ||||||
| Volume | (2) | (2) | ||||||
| Total | (6) | % | (5) | % | ||||
Performance Materials & Coatings net sales were $2,082 million in the third quarter of 2025, down 6 percent from net sales of $2,214 million in the third quarter of 2024, with local price down 5 percent, volume down 2 percent and a favorable currency impact of 1 percent. Coatings & Performance Monomers local price decreased across all geographic regions, primarily in acrylic monomers and architectural coatings. 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 except the U.S. & Canada, driven by lower demand for coatings applications. Volume decreased in Consumer Solutions in all geographic regions except Asia Pacific. Volume decreased in upstream siloxanes, partially offset by an increase in downstream consumer and electronics and home care applications. The favorable currency impact was driven by EMEAI in both businesses.
Operating EBIT was $80 million in the third quarter of 2025, down $60 million from Operating EBIT of $140 million in the third quarter of 2024. Operating EBIT decreased in both businesses primarily due to margin compression and lower volumes, partially offset by the impact of the Company's cost reduction initiatives.
Performance Materials & Coatings net sales were $6,282 million in the first nine months of 2025, down 5 percent from net sales of $6,609 million in the first nine months of 2024, with local price down 3 percent and volume down 2 percent. Coatings & Performance Monomers local price decreased across all geographic regions, primarily in acrylic monomers and architectural coatings. Local price deceased in Consumer Solutions in all geographic regions and was broad-based across end-markets. Volume decreased in Coatings & Performance Monomers in all geographic regions except the U.S. & Canada, driven by lower demand for coatings applications. Volume decreased in Consumer Solutions in all geographic regions except Asia Pacific. Volume decreased in upstream siloxanes, partially offset by an increase in downstream silicones, led by consumer and electronics applications.
Operating EBIT was $281 million in the first nine months of 2025, down $46 million from Operating EBIT of $327 million in the first nine months of 2024. Operating EBIT decreased primarily due to margin compression and lower volumes, partially offset by the impact of the Company's cost reduction initiatives and lower selling, general and administrative expenses.
CORPORATE
| Corporate | Three Months Ended | Nine Months Ended | ||||||||||||
| In millions | Sep 30, 2025 | Sep 30, 2024 | Sep 30, 2025 | Sep 30, 2024 | ||||||||||
| Net sales | $ | 166 | $ | 187 | $ | 525 | $ | 568 | ||||||
| Operating EBIT | $ | (52) | $ | (64) | $ | (144) | $ | (160) | ||||||
| Equity earnings | $ | 1 | $ | 2 | $ | 1 | $ | 3 | ||||||
Net sales for Corporate, which primarily relate to the Company's insurance operations, were $166 million in the third quarter of 2025, a decrease from net sales of $187 million in the third quarter of 2024. Net sales were $525 million in the first nine months of 2025, a decrease from net sales of $568 million in the first nine months of 2024.
Operating EBIT was a loss of $52 million in the third quarter of 2025, compared with a loss of $64 million in the third quarter of 2024. Operating EBIT was a loss of $144 million in the first nine months of 2025, compared with a loss of $160 million in the first nine months of 2024. Operating EBIT improved primarily due to lower environmental costs.
CHANGES IN FINANCIAL CONDITION
The Company had cash and cash equivalents of $4,609 million at September 30, 2025 and $2,189 million at December 31, 2024, of which $2,335 million at September 30, 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, Dow makes an assertion regarding the amount of earnings intended for permanent reinvestment, with the balance available to be repatriated to the United States.
Cash held by foreign subsidiaries for permanent reinvestment is generally used to finance the subsidiaries' operational activities and future foreign investments. Dow has the ability to repatriate additional funds to the United States, which could result in an adjustment to the tax liability for foreign withholding taxes, foreign and/or U.S. state income taxes and the impact of foreign currency movements. At September 30, 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.
The Company's cash flows from operating, investing and financing activities, as reflected in the consolidated statements of cash flows, are summarized in the following table:
| Cash Flow Summary | Dow Inc. | TDCC | ||||||||||||
| Nine Months Ended | Nine Months Ended | |||||||||||||
| Sep 30, 2025 | Sep 30, 2024 | Sep 30, 2025 | Sep 30, 2024 | |||||||||||
|
In millions
|
||||||||||||||
| Cash provided by (used for): | ||||||||||||||
| Operating activities - continuing operations | $ | 764 | $ | 2,092 | $ | 746 | $ | 2,116 | ||||||
| Operating activities - discontinued operations | (16) | 8 | - | - | ||||||||||
| Operating activities | $ | 748 | $ | 2,100 | $ | 746 | $ | 2,116 | ||||||
| Investing activities | $ | (1,457) | $ | (1,456) | $ | (1,457) | $ | (1,456) | ||||||
| Financing activities | $ | 2,941 | $ | (723) | $ | 2,943 | $ | (739) | ||||||
Cash Flows from Operating Activities
Cash provided by operating activities from continuing operations in the first nine months of 2025 was primarily driven by the Company's cash earnings, advance payments received from customers related to long-term supply contracts and dividends from equity method investments, partially offset by cash used for working capital and performance-based compensation. Cash provided by operating activities from continuing operations in the first nine months of 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 and performance-based compensation payments.
| Net Working Capital | Dow Inc. | TDCC | ||||||||||||
| Sep 30, 2025 | Dec 31, 2024 | Sep 30, 2025 | Dec 31, 2024 | |||||||||||
| In millions | ||||||||||||||
| Current assets | $ | 19,646 | $ | 16,590 | $ | 19,610 | $ | 16,565 | ||||||
| Current liabilities | 10,104 | 10,288 | 9,986 | 10,210 | ||||||||||
| Net working capital | $ | 9,542 | $ | 6,302 | $ | 9,624 | $ | 6,355 | ||||||
| Current ratio | 1.94:1 | 1.61:1 | 1.96:1 | 1.62:1 | ||||||||||
| Working Capital Metrics | Three Months Ended | ||||||||||
| Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | |||||||||
| Days sales outstanding in trade receivables | 48 | 47 | 44 | ||||||||
| Days sales in inventory | 67 | 64 | 62 | ||||||||
| Days payables outstanding | 64 | 64 | 64 | ||||||||
Cash provided by (used for) operating activities from discontinued operations in the first nine months of 2025 and 2024 reflected cash payments and receipts for certain agreements and matters related to the separation from DowDuPont Inc. ("DowDuPont").
Cash Flows from Investing Activities
Cash used for investing activities in the first nine months of 2025 and 2024 was primarily for capital expenditures and purchases of investments, which were partially offset by proceeds from sales and maturities of investments. The first nine months of 2025 also included a cash inflow related to the sale of the soil fumigation product line and certain related assets, proceeds from incentives related to capital expenditures and the divestiture of the Company's ownership interest in DowAksa. The first nine months of 2024 also included the acquisition of Circulus Holdings, PBLLC, a U.S. mechanical recycling company.
The Company's capital expenditures were $1,911 million in the first nine months of 2025, compared with $2,173 million in the first nine months of 2024. The Company has reduced its expected full year capital spending to approximately $2.5 billion. The primary driver for the decrease is the Company's decision to delay construction of the Fort Saskatchewan Path2Zero project until market conditions improve. As evidenced across this and prior economic cycles, the Company will proactively adjust its spending as economic conditions evolve.
Cash Flows from Financing Activities
Cash provided by financing activities in the first nine months of 2025 was primarily related to proceeds from the sale of a minority stake in the Company's consolidated infrastructure entity and proceeds from the issuance of long-term debt, which were partially offset by payments on long-term debt. In addition, Dow Inc. included cash outflows for dividends paid to stockholders, including the impact of a 50 percent reduction to dividends paid in the third quarter of 2025, and TDCC included cash outflows for dividends paid to Dow Inc. Cash used for financing activities in the first nine months of 2024 for Dow Inc. 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 issuance of long-term debt. Cash used for financing activities in the first nine months of 2024 for TDCC was primarily related to dividends paid to Dow Inc. and payments on long-term debt, which were partially offset by proceeds from issuance of long-term debt.
Dow Inc. Non-GAAP Cash Flow Measures
Free Cash Flow
Dow defines Free Cash Flow as "Cash provided by operating activities - continuing operations," less capital expenditures. Under this definition, Free Cash Flow represents the cash generated by Dow from operations after investing in its asset base. Free Cash Flow, combined with cash balances and other sources of liquidity, represents the cash available to fund obligations and provide returns to shareholders. Free Cash Flow is an integral financial measure used in the Company's financial planning process.
Operating EBITDA
Dow defines Operating EBITDA as earnings (i.e., "Income (loss) before income taxes") before interest, depreciation and amortization, excluding the impact of significant items.
Cash Flow Conversion (Cash Flow from Operations to Operating EBITDA)
Dow defines Cash Flow Conversion (Cash Flow from Operations to Operating EBITDA) as "Cash provided by operating activities - continuing operations," divided by Operating EBITDA. Management believes Cash Flow Conversion is an important financial metric as it helps the Company determine how efficiently it is converting its earnings into cash flow.
These financial measures are not recognized in accordance with accounting principles generally accepted in the United States of America ("GAAP") and should not be viewed as alternatives to GAAP financial measures of performance. All companies do not calculate non-GAAP financial measures in the same manner and, accordingly, Dow's definitions may not be consistent with the methodologies used by other companies.
|
Reconciliation of Free Cash Flow
|
Nine Months Ended
|
|||||||
| Sep 30, 2025 | Sep 30, 2024 | |||||||
|
In millions
|
||||||||
| Cash provided by operating activities - continuing operations (GAAP) | $ | 764 | $ | 2,092 | ||||
| Capital expenditures | (1,911) | (2,173) | ||||||
| Free Cash Flow (non-GAAP) | $ | (1,147) | $ | (81) | ||||
|
Reconciliation of Cash Flow Conversion (Cash Flow from Operations to Operating EBITDA)
|
Nine Months Ended
|
|||||||
| Sep 30, 2025 | Sep 30, 2024 | |||||||
|
In millions
|
||||||||
| Net income (loss) (GAAP) | $ | (967) | $ | 1,236 | ||||
| + Provision for income taxes | 4 | 145 | ||||||
| Income (loss) before income taxes | $ | (963) | $ | 1,381 | ||||
| - Interest income | 114 | 143 | ||||||
| + Interest expense and amortization of debt discount | 646 | 595 | ||||||
| - Significant items ¹ | (820) | (301) | ||||||
| Operating EBIT (non-GAAP) | $ | 389 | $ | 2,134 | ||||
| + Depreciation and amortization | 2,126 | 2,143 | ||||||
| Operating EBITDA (non-GAAP) | $ | 2,515 | $ | 4,277 | ||||
| Cash provided by operating activities - continuing operations (GAAP) | $ | 764 | $ | 2,092 | ||||
|
Cash flow from operations to net income (GAAP) 2
|
N/A | 169.3 | % | |||||
| Cash Flow Conversion (Cash flow from operations to Operating EBITDA) (non-GAAP) | 30.4 | % | 48.9 | % | ||||
1.The nine months ended September 30, 2025 includes: severance and related benefit costs, costs associated with exit and disposal activities and impairment charges related to the 2025 Restructuring Program; implementation costs associated with the Company's 2025 Restructuring Program and the sale of membership interests of Diamond Infrastructure Solutions; a gain on the sale of the soil fumigation product line and divestiture of ownership interest in DowAksa; a gain associated with the reassessment of liabilities for certain accrued Groundwater Matters, partially offset by the settlement of a separate claim related to Groundwater Matters; charges associated with agreements entered into with DuPont de Nemours, Inc. and Corteva, Inc. as part of the separation and distribution; charges related to an arbitration agreement for historical product claims from a divested business; a loss on early extinguishment of debt; restructuring charges and implementation and efficiency costs associated with the Company's 2023 Restructuring Program. The nine months ended September 30, 2024 includes restructuring charges and implementation and efficiency costs associated with the Company's 2023 Restructuring Program and impairment charges related to write-downs of certain manufacturing assets. See Note 23 to the Consolidated Financial Statements for additional information.
2.Cash flow from operations to net income is not applicable for the nine months ended September 30, 2025 due to a net loss for the period.
Liquidity & Financial Flexibility
The Company's primary source of incremental liquidity is cash flows from operating activities. The generation of cash from operations over the economic cycle and the Company's ability to access capital markets is expected to meet the Company's cash requirements for working capital, capital expenditures, debt maturities, contributions to pension plans, dividend distributions to stockholders, share repurchases and other needs. In addition to cash from operating activities, the Company's current liquidity sources also include TDCC's U.S. and Euromarket commercial paper programs, committed and uncommitted credit facilities, committed accounts receivable facilities, a medium-term notes program, a U.S. retail note program ("InterNotes®") and other debt markets.
The Company continues to maintain a strong financial position with all of its committed credit facilities undrawn and fully available at September 30, 2025. Cash and committed and available forms of liquidity were $14.5 billion at September 30, 2025. The Company also has no substantive long-term debt maturities due until 2027. As a well-known seasoned issuer, the Company has ready access to debt capital markets, subject to market conditions, as an additional source of liquidity. Additional details on sources of liquidity are as follows:
Commercial Paper
TDCC issues promissory notes under its U.S. and Euromarket commercial paper programs. TDCC had no commercial paper outstanding at September 30, 2025. TDCC maintains access to the commercial paper market at competitive rates. Amounts outstanding under TDCC's commercial paper programs during the period may be greater or less than the amount reported at the end of the period. TDCC did not issue commercial paper subsequent to September 30, 2025.
Committed Credit Facilities
The Company also has the ability to access liquidity through TDCC's committed and available credit facilities. At September 30, 2025, TDCC had total committed and available credit facilities of $8.4 billion.
Uncommitted Credit Facilities
The Company has entered into various uncommitted bilateral credit arrangements as a potential source of excess liquidity. These lines can be used to support short-term liquidity needs and for general purposes. The Company had no drawdowns outstanding at September 30, 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. 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. These facilities are set to expire in November 2025 and are expected to be renewed in the fourth quarter. In the first nine months of 2025, there were $106 million in sales of receivables under the U.S. and Europe committed accounts receivable facilities ($289 million in sales of receivables in the first nine months of 2024). No sold receivables were outstanding with the facilities at September 30, 2025.
In addition, the Company has an uncommitted accounts receivable facility in the United States providing additional liquidity. This facility is set to expire in November 2025 and is expected to be renewed in the fourth quarter. Sales of receivables under this facility were $147 million in the first nine months of 2025 ($378 million in sales of receivables in the first nine months of 2024). No sold receivables were outstanding with the facility at September 30, 2025. See Note 12 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. Sales of receivables under this facility were $285 million in the first nine months of 2025 ($581 million sales of receivables in the first nine months of 2024). At September 30, 2025, approximately $6 million of sold receivables were outstanding. See Note 12 to the Consolidated Financial Statements for additional information.
The Company maintains these facilities and also participates in certain customers' supply chain financing and other early pay programs as a routine source of working capital.
Company-Owned Life Insurance
The Company has investments in company-owned life insurance ("COLI") policies, which are recorded at their cash surrender value as of each balance sheet date. The Company has the ability to monetize its investment in its COLI policies as an additional source of liquidity. At September 30, 2025, the Company had monetized $197 million of its existing COLI policies' surrender value (zero at December 31, 2024). See Note 6 to the Consolidated Financial Statements for additional information.
Shelf Registration - U.S.
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. On July 25, 2025, TDCC filed a prospectus supplement under this shelf registration to register an undetermined amount of securities for issuance under InterNotes®. Also, on July 25, 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 | Dow Inc. | TDCC | ||||||||||||
| Sep 30, 2025 | Dec 31, 2024 | Sep 30, 2025 | Dec 31, 2024 | |||||||||||
|
In millions
|
||||||||||||||
| Notes payable | $ | 133 | $ | 135 | $ | 133 | $ | 135 | ||||||
| Long-term debt due within one year | 413 | 497 | 413 | 497 | ||||||||||
| Long-term debt | 17,709 | 15,711 | 17,709 | 15,711 | ||||||||||
| Gross debt | $ | 18,255 | $ | 16,343 | $ | 18,255 | $ | 16,343 | ||||||
| - Cash and cash equivalents | 4,609 | 2,189 | 4,609 | 2,189 | ||||||||||
|
- Marketable securities 1
|
497 | 383 | 497 | 383 | ||||||||||
| Net debt | $ | 13,149 | $ | 13,771 | $ | 13,149 | $ | 13,771 | ||||||
| Total equity | $ | 19,064 | $ | 17,851 | $ | 19,280 | $ | 18,032 | ||||||
| Gross debt as a percent of total capitalization | 48.9 | % | 47.8 | % | 48.6 | % | 47.5 | % | ||||||
| Net debt as a percent of total capitalization | 40.8 | % | 43.5 | % | 40.5 | % | 43.3 | % | ||||||
1.Included in "Other current assets" in the consolidated balance sheets.
The Company may at any time repurchase certain debt securities in the open market or in privately negotiated transactions subject to: the applicable terms under which any such debt securities were issued, certain internal approvals of the Company, and applicable laws and regulations of the relevant jurisdiction in which any such potential transactions might take place. This in no way obligates the Company to make any such repurchases nor should it be considered an offer to do so.
TDCC's public debt instruments and primary, private credit agreements contain, among other provisions, certain customary restrictive covenant and default provisions. TDCC's most significant debt covenant with regard to its financial position is the obligation to maintain the ratio of its consolidated indebtedness to consolidated capitalization at no greater than 0.70 to 1.00 at any time the aggregate outstanding amount of loans under the Five Year Competitive Advance and Revolving Credit Facility Agreement ("Revolving Credit Agreement") equals or exceeds $500 million. The ratio of TDCC's consolidated indebtedness to consolidated capitalization as defined in the Revolving Credit Agreement was 0.46 to 1.00 at September 30, 2025. Management believes TDCC was in compliance with all of its covenants and default provisions at September 30, 2025. For information on TDCC's debt covenants and default provisions, see Note 14 to the Consolidated Financial Statements included in the 2024 10-K. There were no material changes to the debt covenants and default provisions related to TDCC's outstanding long-term debt and primary, private credit agreements in the first nine months of 2025.
In the first quarter of 2025, the Company completed debt neutral liability management activities. The Company issued $1 billion of senior unsecured notes. The 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. The 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 the first nine months of 2025, the Company issued an aggregate principal amount of $252 million of InterNotes®. Additionally, the Company repaid $125 million of long-term debt at maturity.
While taking into consideration the current economic environment, management expects that the Company will continue to have sufficient liquidity and financial flexibility to meet all of its business obligations.
Credit Ratings
At September 30, 2025, TDCC's credit ratings 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 since the separation from DowDuPont 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 table summarizes dividends declared and paid to common stockholders of record in 2025:
| Dow Inc. 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, as well as certain governance expenses. Funding is accomplished through intercompany loans. TDCC's Board reviews and determines a dividend distribution to Dow Inc. to settle the intercompany loans. For the three months ended September 30, 2025, TDCC declared a dividend of $240 million and paid a dividend of $252 million to Dow Inc. ($1,225 million of dividend declared and $1,237 million of dividend paid for the nine months
ended September 30, 2025). At September 30, 2025, TDCC's intercompany loan balance with Dow Inc. was insignificant.
Share Repurchase Program
On April 13, 2022, the Board approved a share repurchase program authorizing up to $3 billion for the repurchase of the Company's common stock, with no expiration date. The Company did not repurchase any of its common stock in the third quarter of 2025 (zero in the first nine months of 2025). At September 30, 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 of Operating Net Income over the economic cycle.
Pension Plans
The Company has both funded and unfunded defined benefit pension plans that cover employees 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.
As part of its ongoing pension derisking initiatives, the Company initiated the termination of certain U.S. tax-qualified pension plans which include the tax-qualified benefit obligations for substantially all employees hired after January 1, 2008, who earned benefits based on a set percentage of annual pay, plus interest. As part of the plan termination process, the Company offered participants of these plans annuity or lump sum distribution options. Final asset distributions are expected to be paid from plan assets in the fourth quarter of 2025. The Company is also pursuing other pension derisking opportunities, including annuitization and risk transfer of certain other pension liabilities. These actions, if executed and inclusive of the termination of certain U.S. tax-qualified pension plans discussed above, are expected to result in non-operating and non-cash settlement charges in the range of $275 million to $350 million in the fourth quarter of 2025.
See Note 18 to the Consolidated Financial Statements and Note 19 to the Consolidated Financial Statements included in the 2024 10-K for additional information related to the Company's pension plans.
Restructuring
The 2025 Restructuring Program is expected to result in additional cash expenditures of approximately $650 million primarily over the next four years and consist primarily of severance and related benefits costs, implementation costs related to decommissioning and demolition and additional costs associated with exit and disposal activities. Restructuring implementation costs totaled $5 million and $10 million for the three and nine months ended September 30, 2025.
Restructuring implementation and efficiency costs related to the 2023 Restructuring Program were zero and $50 million for the three and nine months ended September 30, 2025, respectively ($55 million and $157 million for the three and nine months ended September 30, 2024, respectively).
The Company expects to incur additional costs in the future related to its restructuring activities, which will be recognized as incurred. The Company also expects to incur additional employee-related costs, including involuntary termination benefits related to its other optimization activities. These costs cannot be reasonably estimated at this time. See Note 5 to the Consolidated Financial Statements for additional information on the Company's restructuring activities.
Contractual Obligations
Information related to the Company's contractual obligations, commercial commitments and expected cash requirements for interest can be found in Notes 14, 15, 16 and 19 to the Consolidated Financial Statements included in the 2024 10-K. With the exception of the items noted below, there have been no material changes in the Company's contractual obligations since December 31, 2024.
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Contractual Obligations at Sep 30, 2025
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Payments Due In | ||||||||||||||||
| In millions | 2025 | 2026-2027 | 2028-2029 | 2030 and beyond | Total | ||||||||||||
| Dow Inc. | |||||||||||||||||
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Long-term debt obligations 1
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$ | 245 | $ | 989 | $ | 1,811 | $ | 15,308 | $ | 18,353 | |||||||
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Expected cash requirements for interest 2
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271 | 1,733 | 1,626 | 10,173 | 13,803 | ||||||||||||
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Operating leases 3
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102 | 666 | 384 | 481 | 1,633 | ||||||||||||
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Purchase obligations 4
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706 | 4,721 | 3,667 | 15,983 | 25,077 | ||||||||||||
| Total | $ | 1,324 | $ | 8,109 | $ | 7,488 | $ | 41,945 | $ | 58,866 | |||||||
1.Excludes unamortized debt discount and issuance costs of $231 million. Includes finance lease obligations of $1,079 million and net fair value hedge adjustment gains of $35 million.
2.Cash requirements for interest on long-term debt was calculated using current interest rates at September 30, 2025, and includes $134 million of various floating rate notes.
3.Includes imputed interest of $263 million.
4.Includes 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.
Fair Value Measurements
See Note 21 to the Consolidated Financial Statements for information concerning fair value measurements.
OTHER MATTERS
Critical Accounting Estimates
The preparation of financial statements and related disclosures in accordance with accounting principles generally accepted in the United States of America requires management to make judgments, assumptions and estimates that affect the amounts reported in the consolidated financial statements and accompanying notes. Note 1 to the Consolidated Financial Statements included in the 2024 10-K describes the significant accounting policies and methods used in the preparation of the consolidated financial statements. The Company's critical accounting policies that are impacted by judgments, assumptions and estimates are described in Management's Discussion and Analysis of Financial Condition and Results of Operations included in the 2024 10-K. Since December 31, 2024, there have been no material changes in the Company's accounting policies that are impacted by judgments, assumptions and estimates.
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.
The Company continues to monitor key factors that could impact the fair value of its reporting units, including changes in macroeconomic conditions or industry-specific trends, deterioration in financial performance, increases in market interest rates or adverse changes in regulatory or competitive environments. If these, or other adverse events occur, it may be necessary to perform additional impairment testing, which could result in a future goodwill impairment charge. For additional information, see Notes 5 and 11 to the Consolidated Financial Statements.
Asbestos-Related Matters of Union Carbide Corporation
Union Carbide is and has been involved in a large number of asbestos-related suits filed primarily in state courts during the past several decades. These suits principally allege personal injury resulting from exposure to asbestos-containing products and frequently seek both actual and punitive damages. The alleged claims primarily relate to products that Union Carbide sold in the past, alleged exposure to asbestos-containing products located on Union Carbide's premises, and Union Carbide's responsibility for asbestos suits filed against a former Union Carbide subsidiary, Amchem Products, Inc. ("Amchem"). In many cases, plaintiffs are unable to demonstrate that they have suffered any compensable loss as a result of such exposure, or that injuries incurred in fact resulted from exposure to Union Carbide's products.
The table below provides information regarding asbestos-related claims pending against Union Carbide and Amchem based on criteria developed by Union Carbide and its external consultants:
| Asbestos-Related Claim Activity | 2025 | 2024 | ||||||
| Claims unresolved at Jan 1 | 5,813 | 6,367 | ||||||
| Claims filed | 3,407 | 3,472 | ||||||
| Claims settled, dismissed or otherwise resolved | (2,719) | (4,469) | ||||||
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Claims unresolved at Sep 30
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6,501 | 5,370 | ||||||
| Claimants with claims against both Union Carbide and Amchem | (1,192) | (963) | ||||||
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Individual claimants at Sep 30
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5,309 | 4,407 | ||||||
Plaintiffs' lawyers often sue numerous defendants in individual lawsuits or on behalf of numerous claimants. As a result, the damages alleged are not expressly identified as to Union Carbide, Amchem or any other particular defendant, even when specific damages are alleged with respect to a specific disease or injury. For these reasons and based upon Union Carbide's litigation and settlement experience, Union Carbide does not consider the damages alleged against Union Carbide and Amchem to be a meaningful factor in its determination of any potential asbestos-related liability.
For additional information, see Asbestos-Related Matters of Union Carbide Corporation in Note 14 to the Consolidated Financial Statements; Part II, Item 1. Legal Proceedings; and Note 15 to the Consolidated Financial Statements included in the 2024 10-K.
Dow Inc. published this content on October 24, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on October 24, 2025 at 11:50 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]