UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September 30, 2022~~March 31, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________to__________


Commission File Number	Exact Name of Registrant as Specified in its Charter, Principal Office Address and Telephone Number	State of Incorporation or Organization	I.R.S. Employer Identification No.
001-38646	Dow Inc.	Delaware	30-1128146
	2211 H.H. Dow Way, Midland, MI 48674
	(989) 636-1000
001-03433	The Dow Chemical Company	Delaware	38-1285128
	2211 H.H. Dow Way, Midland, MI 48674
	(989) 636-1000

Securities registered pursuant to Section 12(b) of the Act:


Registrant	Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Dow Inc.	Common Stock, par value $0.01 per share	DOW	New York Stock Exchange
The Dow Chemical Company	0.500% Notes due March 15, 2027	DOW/27	New York Stock Exchange
The Dow Chemical Company	1.125% Notes due March 15, 2032	DOW/32	New York Stock Exchange
The Dow Chemical Company	1.875% Notes due March 15, 2040	DOW/40	New York Stock Exchange
The Dow Chemical Company	4.625% Notes due October 1, 2044	DOW/44	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Dow Inc.

☑

Yes

☐

The Dow Chemical Company

☑

Yes

☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Dow Inc.

☑

Yes

☐

The Dow Chemical Company

☑

Yes

☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Dow Inc.

Large accelerated filer

☑

Accelerated
filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

The Dow Chemical Company

Large accelerated filer

☐

Accelerated
filer

☐

Non-accelerated filer

☑

Smaller reporting company

☐

Emerging growth company

☐

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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Dow Inc.

☐

The Dow Chemical Company

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Dow Inc.

☐

Yes

☑

The Dow Chemical Company

☐

Yes

☑

Dow Inc. had ~~703,759,269~~707,314,807 shares of common stock, $0.01 par value, outstanding at ~~September 30, 2022.~~March 31, 2023. The Dow Chemical Company had 100 shares of common stock, $0.01 par value, outstanding at ~~September 30, 2022,~~March 31, 2023, all of which were held by the registrant’s parent, Dow Inc.

The Dow Chemical Company meets the conditions set forth in General Instruction H(1)(a) and (b) for Form 10-Q and therefore is filing this form with a reduced disclosure format.

Table of Contents

Dow Inc. and Subsidiaries

The Dow Chemical Company and Subsidiaries

QUARTERLY REPORT ON FORM 10-Q

For the quarterly period ended ~~September 30, 2022~~March 31, 2023

TABLE OF CONTENTS


		PAGE

PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements.	5
	Dow Inc. and Subsidiaries:
	Consolidated Statements of Income.	5
	Consolidated Statements of Comprehensive Income.	6
	Consolidated Balance Sheets.	7
	Consolidated Statements of Cash Flows.	8
	Consolidated Statements of Equity.	9

	The Dow Chemical Company and Subsidiaries:
	Consolidated Statements of Income.	10
	Consolidated Statements of Comprehensive Income.	11
	Consolidated Balance Sheets.	12
	Consolidated Statements of Cash Flows.	13
	Consolidated Statements of Equity.	14

	Dow Inc. and Subsidiaries and The Dow Chemical Company and Subsidiaries:
	Notes to the Consolidated Financial Statements.	15

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	4633

	Results of Operations.	4835

	Changes in Financial Condition.	5539

	Other Matters.	6345

Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	6346

Item 4.	Controls and Procedures.	6446

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings.	6547

Item 1A.	Risk Factors.	6547

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	6647

Item 4.	Mine Safety Disclosures.	6647

Item 5.	Other Information.	6647

Item 6.	Exhibits.	6748

SIGNATURE		6949

Table of Contents


Dow Inc. and Subsidiaries The Dow Chemical Company and Subsidiaries

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.

CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING STATEMENTS

Certain statements in this report are “forward-looking statements” within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements often address expected future business and financial performance, financial condition, and other matters, and often contain words or phrases such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “opportunity,” “outlook,” “plan,” “project,” “seek,” “should,” “strategy,” “target,” “will,” “will be,” “will continue,” “will likely result,” “would” and similar expressions, and variations or negatives of these words or phrases.

Forward-looking statements are based on current assumptions and expectations of future events that are subject to risks, uncertainties and other factors that are beyond Dow’s control, which may cause actual results to differ materially from those projected, anticipated or implied in the forward-looking statements and speak only as of the date the statements were made. These factors include, but are not limited to: sales of Dow’s products; Dow’s expenses, future revenues and profitability; the continuing global and regional economic impacts of the coronavirus disease 2019 (“COVID-19”) pandemic and other public health-related risks and events on Dow’s business; any ~~sanction,~~sanctions, export restrictions, supply chain disruptions or increased economic uncertainty related to the ongoing conflict between Russia and Ukraine; capital requirements and need for and availability of financing; unexpected barriers in the development of technology, including with respect to Dow's contemplated capital and operating projects; Dow's ability to realize its commitment to carbon neutrality on the contemplated timeframe; size of the markets for Dow’s products and services and ability to compete in such markets; failure to develop and market new products and optimally manage product life cycles; the rate and degree of market acceptance of Dow’s products; significant litigation and environmental matters and related contingencies and unexpected expenses; the success of competing technologies that are or may become available; the ability to protect Dow’s intellectual property in the United States and abroad; developments related to contemplated restructuring activities and proposed divestitures or acquisitions such as workforce reduction, manufacturing facility and/or asset closure and related exit and disposal activities, and the benefits and costs associated with each of the foregoing; fluctuations in energy and raw material prices; management of process safety and product stewardship; changes in relationships with Dow’s significant customers and suppliers; changes in consumer preferences and demand; changes in laws and regulations, political conditions or industry development; global economic and capital markets conditions, such as inflation, market uncertainty, interest and currency exchange rates, and equity and commodity prices; business or supply disruptions; security threats, such as acts of sabotage, terrorism or war, including the ongoing conflict between Russia and Ukraine; weather events and natural disasters; disruptions in Dow’s information technology networks and systems; and risks related to Dow’s separation from DowDuPont Inc. such as Dow’s obligation to indemnify DuPont de Nemours, Inc. and/or Corteva, Inc. for certain liabilities.

Where, in any forward-looking statement, an expectation or belief as to future results or events is expressed, such expectation or belief is based on the current plans and expectations of management and expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the expectation or belief will result or be achieved or accomplished. A detailed discussion of principal risks and uncertainties which may cause actual results and events to differ materially from such forward-looking statements is included in the section titled “Risk Factors” contained in Part II, Item 1A of this Quarterly Report on Form 10-Q and in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022. These are not the only risks and uncertainties that Dow faces. There may be other risks and uncertainties that Dow is unable to identify at this time or that Dow does not currently expect to have a material impact on its business. If any of those risks or uncertainties develops into an actual event, it could have a material adverse effect on Dow’s business. Dow Inc. and TDCC assume no obligation to update or revise publicly any forward-looking statements whether because of new information, future events, or otherwise, except as required by securities and other applicable laws.

Table of Contents


PART I – FINANCIAL INFORMATION


ITEM 1. FINANCIAL STATEMENTS

Dow Inc. and Subsidiaries

Consolidated Statements of Income


		Three Months Ended				Nine Months Ended					Three Months Ended
In millions, except per share amounts (Unaudited)	In millions, except per share amounts (Unaudited)	Sep 30, 2022		Sep 30, 2021		Sep 30, 2022		Sep 30, 2021		In millions, except per share amounts (Unaudited)	Mar 31, 2023		Mar 31, 2022
Net sales	Net sales	$	14,115	$	14,837	$	45,043	$	40,604	Net sales	$	11,851	$	15,264
Cost of sales	Cost of sales	12,381		11,611		37,682		32,413		Cost of sales	10,629		12,402
Research and development expenses	Research and development expenses	191		210		626		632		Research and development expenses	214		218
Selling, general and administrative expenses	Selling, general and administrative expenses	356		403		1,289		1,209		Selling, general and administrative expenses	428		498
Amortization of intangibles	Amortization of intangibles	83		100		256		301		Amortization of intangibles	81		88
Restructuring and asset related charges - net	Restructuring and asset related charges - net	—		—		186		22		Restructuring and asset related charges - net	541		186
Equity in earnings (losses) of nonconsolidated affiliates	Equity in earnings (losses) of nonconsolidated affiliates	(58)		249		311		751		Equity in earnings (losses) of nonconsolidated affiliates	(48)		174
Sundry income (expense) - net	Sundry income (expense) - net	69		(350)		292		(225)		Sundry income (expense) - net	79		148
Interest income	Interest income	41		14		105		35		Interest income	76		28
Interest expense and amortization of debt discount	Interest expense and amortization of debt discount	155		178		487		561		Interest expense and amortization of debt discount	185		167
Income before income taxes		1,001		2,248		5,225		6,027
Provision for income taxes		241		542		1,232		1,383
Net income		760		1,706		3,993		4,644
Net income attributable to noncontrolling interests		21		23		24		69
Net income available for Dow Inc. common stockholders		$	739	$	1,683	$	3,969	$	4,575
Income (loss) before income taxes										Income (loss) before income taxes	(120)		2,055
Provision (credit) for income taxes										Provision (credit) for income taxes	(47)		503
Net income (loss)										Net income (loss)	(73)		1,552
Net income (loss) attributable to noncontrolling interests										Net income (loss) attributable to noncontrolling interests	20		(17)
Net income (loss) available for Dow Inc. common stockholders										Net income (loss) available for Dow Inc. common stockholders	$	(93)	$	1,569

Per common share data:	Per common share data:									Per common share data:
Earnings per common share - basic		$	1.03	$	2.25	$	5.45	$	6.11
Earnings per common share - diluted		$	1.02	$	2.23	$	5.41	$	6.06
Earnings (loss) per common share - basic										Earnings (loss) per common share - basic	$	(0.13)	$	2.12
Earnings (loss) per common share - diluted										Earnings (loss) per common share - diluted	$	(0.13)	$	2.11

Weighted-average common shares outstanding - basic	Weighted-average common shares outstanding - basic	714.3		744.5		724.9		745.4		Weighted-average common shares outstanding - basic	708.2		734.6
Weighted-average common shares outstanding - diluted	Weighted-average common shares outstanding - diluted	718.1		750.0		729.8		750.9		Weighted-average common shares outstanding - diluted	708.2		739.8

Depreciation	Depreciation	$	482	$	517	$	1,459	$	1,550	Depreciation	$	475	$	491
Capital expenditures	Capital expenditures	$	452	$	413	$	1,224	$	1,035	Capital expenditures	$	440	$	315

See Notes to the Consolidated Financial Statements.

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Dow Inc. and Subsidiaries

Consolidated Statements of Comprehensive Income


		Three Months Ended				Nine Months Ended					Three Months Ended
In millions (Unaudited)	In millions (Unaudited)	Sep 30, 2022		Sep 30, 2021		Sep 30, 2022		Sep 30, 2021		In millions (Unaudited)	Mar 31, 2023		Mar 31, 2022
Net income		$	760	$	1,706	$	3,993	$	4,644
Net income (loss)										Net income (loss)	$	(73)	$	1,552
Other comprehensive income (loss), net of tax	Other comprehensive income (loss), net of tax									Other comprehensive income (loss), net of tax
Unrealized losses on investments		(122)		(13)		(371)		(45)
Unrealized gains (losses) on investments										Unrealized gains (losses) on investments	31		(96)
Cumulative translation adjustments	Cumulative translation adjustments	(403)		(157)		(1,081)		(345)		Cumulative translation adjustments	101		(164)
Pension and other postretirement benefit plans	Pension and other postretirement benefit plans	125		149		356		1,432		Pension and other postretirement benefit plans	6		109
Derivative instruments	Derivative instruments	22		32		491		148		Derivative instruments	(64)		332
Total other comprehensive income (loss)		(378)		11		(605)		1,190
Total other comprehensive income										Total other comprehensive income	74		181
Comprehensive income	Comprehensive income	382		1,717		3,388		5,834		Comprehensive income	1		1,733
Comprehensive income attributable to noncontrolling interests, net of tax		21		23		24		69
Comprehensive income attributable to Dow Inc.		$	361	$	1,694	$	3,364	$	5,765
Comprehensive income (loss) attributable to noncontrolling interests, net of tax										Comprehensive income (loss) attributable to noncontrolling interests, net of tax	20		(17)
Comprehensive income (loss) attributable to Dow Inc.										Comprehensive income (loss) attributable to Dow Inc.	$	(19)	$	1,750

See Notes to the Consolidated Financial Statements.

Table of Contents

Dow Inc. and Subsidiaries

Consolidated Balance Sheets


In millions, except share amounts (Unaudited)	In millions, except share amounts (Unaudited)	Sep 30, 2022		Dec 31, 2021		In millions, except share amounts (Unaudited)	Mar 31, 2023		Dec 31, 2022
Assets	Assets					Assets
Current Assets	Current Assets					Current Assets
Cash and cash equivalents	Cash and cash equivalents	$	2,216	$	2,988	Cash and cash equivalents	$	3,319	$	3,886
Accounts and notes receivable:	Accounts and notes receivable:					Accounts and notes receivable:
Trade (net of allowance for doubtful receivables - 2022: $212; 2021: $54)		6,407		6,841
Trade (net of allowance for doubtful receivables - 2023: $110; 2022: $110)						Trade (net of allowance for doubtful receivables - 2023: $110; 2022: $110)	5,740		5,611
Other	Other	2,123		2,713		Other	2,072		2,144
Inventories	Inventories	7,571		7,372		Inventories	6,825		6,988
Other current assets	Other current assets	1,460		934		Other current assets	1,400		1,848
Total current assets	Total current assets	19,777		20,848		Total current assets	19,356		20,477
Investments	Investments					Investments
Investment in nonconsolidated affiliates	Investment in nonconsolidated affiliates	1,785		2,045		Investment in nonconsolidated affiliates	1,508		1,589
Other investments (investments carried at fair value - 2022: $1,685; 2021: $2,079)		2,732		3,193
Other investments (investments carried at fair value - 2023: $1,806; 2022: $1,757)						Other investments (investments carried at fair value - 2023: $1,806; 2022: $1,757)	2,815		2,793
Noncurrent receivables	Noncurrent receivables	499		478		Noncurrent receivables	627		666
Total investments	Total investments	5,016		5,716		Total investments	4,950		5,048
Property	Property					Property
Property	Property	56,931		57,604		Property	58,679		58,055
Less: Accumulated depreciation	Less: Accumulated depreciation	36,899		37,049		Less: Accumulated depreciation	38,356		37,613
Net property	Net property	20,032		20,555		Net property	20,323		20,442
Other Assets	Other Assets					Other Assets
Goodwill	Goodwill	8,524		8,764		Goodwill	8,653		8,644
Other intangible assets (net of accumulated amortization - 2022: $4,888; 2021: $4,725)		2,483		2,881
Other intangible assets (net of accumulated amortization - 2023: $5,114; 2022: $5,022)						Other intangible assets (net of accumulated amortization - 2023: $5,114; 2022: $5,022)	2,336		2,442
Operating lease right-of-use assets	Operating lease right-of-use assets	1,231		1,412		Operating lease right-of-use assets	1,257		1,227
Deferred income tax assets	Deferred income tax assets	1,136		1,358		Deferred income tax assets	995		960
Deferred charges and other assets	Deferred charges and other assets	1,358		1,456		Deferred charges and other assets	1,446		1,363
Total other assets	Total other assets	14,732		15,871		Total other assets	14,687		14,636
Total Assets	Total Assets	$	59,557	$	62,990	Total Assets	$	59,316	$	60,603
Liabilities and Equity	Liabilities and Equity					Liabilities and Equity
Current Liabilities	Current Liabilities					Current Liabilities
Notes payable	Notes payable	$	185	$	161	Notes payable	$	278	$	362
Long-term debt due within one year	Long-term debt due within one year	364		231		Long-term debt due within one year	247		362
Accounts payable:	Accounts payable:					Accounts payable:
Trade	Trade	5,008		5,577		Trade	4,575		4,940
Other	Other	2,599		2,839		Other	1,985		2,276
Operating lease liabilities - current	Operating lease liabilities - current	277		314		Operating lease liabilities - current	304		287
Income taxes payable	Income taxes payable	579		623		Income taxes payable	335		334
Accrued and other current liabilities	Accrued and other current liabilities	3,303		3,481		Accrued and other current liabilities	2,765		2,770
Total current liabilities	Total current liabilities	12,315		13,226		Total current liabilities	10,489		11,331
Long-Term Debt	Long-Term Debt	12,921		14,280		Long-Term Debt	14,739		14,698
Other Noncurrent Liabilities	Other Noncurrent Liabilities					Other Noncurrent Liabilities
Deferred income tax liabilities	Deferred income tax liabilities	716		506		Deferred income tax liabilities	744		1,110
Pension and other postretirement benefits - noncurrent	Pension and other postretirement benefits - noncurrent	6,541		7,557		Pension and other postretirement benefits - noncurrent	3,799		3,808
Asbestos-related liabilities - noncurrent	Asbestos-related liabilities - noncurrent	868		931		Asbestos-related liabilities - noncurrent	844		857
Operating lease liabilities - noncurrent	Operating lease liabilities - noncurrent	1,012		1,149		Operating lease liabilities - noncurrent	1,007		997
Other noncurrent obligations	Other noncurrent obligations	6,555		6,602		Other noncurrent obligations	6,979		6,555
Total other noncurrent liabilities	Total other noncurrent liabilities	15,692		16,745		Total other noncurrent liabilities	13,373		13,327
Stockholders’ Equity	Stockholders’ Equity					Stockholders’ Equity
Common stock (authorized 5,000,000,000 shares of $0.01 par value each; issued 2022: 768,611,564 shares; 2021: 764,226,882 shares)		8		8
Common stock (authorized 5,000,000,000 shares of $0.01 par value each; issued 2023: 775,463,877 shares; 2022: 771,678,525 shares)						Common stock (authorized 5,000,000,000 shares of $0.01 par value each; issued 2023: 775,463,877 shares; 2022: 771,678,525 shares)	8		8
Additional paid-in capital	Additional paid-in capital	8,396		8,151		Additional paid-in capital	8,607		8,540
Retained earnings	Retained earnings	23,068		20,623		Retained earnings	22,584		23,180
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(9,582)		(8,977)		Accumulated other comprehensive loss	(7,065)		(7,139)
Unearned ESOP shares		—		(15)
Treasury stock at cost (2022: 64,852,295 shares; 2021: 29,011,573 shares)		(3,773)		(1,625)
Treasury stock at cost (2023: 68,149,070 shares; 2022: 66,798,605 shares)						Treasury stock at cost (2023: 68,149,070 shares; 2022: 66,798,605 shares)	(3,953)		(3,871)
Dow Inc.’s stockholders’ equity	Dow Inc.’s stockholders’ equity	18,117		18,165		Dow Inc.’s stockholders’ equity	20,181		20,718
Noncontrolling interests	Noncontrolling interests	512		574		Noncontrolling interests	534		529
Total equity	Total equity	18,629		18,739		Total equity	20,715		21,247
Total Liabilities and Equity	Total Liabilities and Equity	$	59,557	$	62,990	Total Liabilities and Equity	$	59,316	$	60,603

See Notes to the Consolidated Financial Statements.

Table of Contents

Dow Inc. and Subsidiaries

Consolidated Statements of Cash Flows


In millions (Unaudited)	In millions (Unaudited)	Nine Months Ended				In millions (Unaudited)	Three Months Ended
		Sep 30, 2022		Sep 30, 2021			Mar 31, 2023		Mar 31, 2022
Operating Activities	Operating Activities					Operating Activities
Net income		$	3,993	$	4,644
Adjustments to reconcile net income to net cash provided by operating activities:
Net income (loss)						Net income (loss)	$	(73)	$	1,552
Adjustments to reconcile net income (loss) to net cash provided by operating activities:						Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	Depreciation and amortization	2,104		2,187		Depreciation and amortization	648		752
Provision for deferred income tax		124		488
Earnings of nonconsolidated affiliates less than (in excess of) dividends received		517		(519)
Net periodic pension benefit cost		19		34
Provision (credit) for deferred income tax						Provision (credit) for deferred income tax	(418)		253
Earnings of nonconsolidated affiliates less than dividends received						Earnings of nonconsolidated affiliates less than dividends received	102		374
Net periodic pension benefit cost (credit)						Net periodic pension benefit cost (credit)	(23)		7
Pension contributions	Pension contributions	(156)		(1,166)		Pension contributions	(41)		(55)
Net gain on sales of assets, businesses and investments	Net gain on sales of assets, businesses and investments	(11)		(67)		Net gain on sales of assets, businesses and investments	(49)		(6)

Restructuring and asset related charges - net	Restructuring and asset related charges - net	186		22		Restructuring and asset related charges - net	541		186
Other net loss	Other net loss	159		874		Other net loss	347		140
Changes in assets and liabilities, net of effects of acquired and divested companies:	Changes in assets and liabilities, net of effects of acquired and divested companies:					Changes in assets and liabilities, net of effects of acquired and divested companies:
Accounts and notes receivable	Accounts and notes receivable	323		(2,222)		Accounts and notes receivable	(68)		(741)
Inventories	Inventories	(254)		(1,502)		Inventories	163		(443)
Accounts payable	Accounts payable	(860)		1,487		Accounts payable	(631)		86
Other assets and liabilities, net	Other assets and liabilities, net	(736)		252		Other assets and liabilities, net	33		(493)
Cash provided by operating activities - continuing operations	Cash provided by operating activities - continuing operations	5,408		4,512		Cash provided by operating activities - continuing operations	531		1,612
Cash used for operating activities - discontinued operations		(11)		(78)
Cash provided by (used for) operating activities - discontinued operations						Cash provided by (used for) operating activities - discontinued operations	4		(9)
Cash provided by operating activities	Cash provided by operating activities	5,397		4,434		Cash provided by operating activities	535		1,603
Investing Activities	Investing Activities					Investing Activities
Capital expenditures	Capital expenditures	(1,224)		(1,035)		Capital expenditures	(440)		(315)
Investment in gas field developments	Investment in gas field developments	(134)		(44)		Investment in gas field developments	(55)		(37)
Purchases of previously leased assets	Purchases of previously leased assets	(5)		(5)		Purchases of previously leased assets	(2)		(2)
Proceeds from sales of property and businesses, net of cash divested		16		15
Proceeds from sales of property, businesses and consolidated companies, net of cash divested						Proceeds from sales of property, businesses and consolidated companies, net of cash divested	57		4
Acquisitions of property and businesses, net of cash acquired	Acquisitions of property and businesses, net of cash acquired	(54)		(107)		Acquisitions of property and businesses, net of cash acquired	(23)		—
Investments in and loans to nonconsolidated affiliates	Investments in and loans to nonconsolidated affiliates	(69)		—		Investments in and loans to nonconsolidated affiliates	—		(6)
Distributions and loan repayments from nonconsolidated affiliates	Distributions and loan repayments from nonconsolidated affiliates	10		11		Distributions and loan repayments from nonconsolidated affiliates	1		—
Proceeds from sales of ownership interests in nonconsolidated affiliates	Proceeds from sales of ownership interests in nonconsolidated affiliates	11		—		Proceeds from sales of ownership interests in nonconsolidated affiliates	—		11
Purchases of investments	Purchases of investments	(445)		(1,004)		Purchases of investments	(165)		(148)
Proceeds from sales and maturities of investments	Proceeds from sales and maturities of investments	596		644		Proceeds from sales and maturities of investments	512		141

Other investing activities, net	Other investing activities, net	(41)		(10)		Other investing activities, net	(35)		(15)
Cash used for investing activities	Cash used for investing activities	(1,339)		(1,535)		Cash used for investing activities	(150)		(367)
Financing Activities	Financing Activities					Financing Activities
Changes in short-term notes payable	Changes in short-term notes payable	72		(44)		Changes in short-term notes payable	(91)		(21)
Proceeds from issuance of short-term debt greater than three months		—		144

Payments on short-term debt greater than three months	Payments on short-term debt greater than three months	(14)		—		Payments on short-term debt greater than three months	—		(14)
Proceeds from issuance of long-term debt	Proceeds from issuance of long-term debt	82		95		Proceeds from issuance of long-term debt	13		16
Payments on long-term debt	Payments on long-term debt	(957)		(2,638)		Payments on long-term debt	(156)		(25)

Collections on securitization programs						Collections on securitization programs	—		141
Purchases of treasury stock	Purchases of treasury stock	(2,200)		(600)		Purchases of treasury stock	(125)		(600)
Proceeds from issuance of stock	Proceeds from issuance of stock	99		212		Proceeds from issuance of stock	55		35
Transaction financing, debt issuance and other costs		(8)		(536)

Employee taxes paid for share-based payment arrangements	Employee taxes paid for share-based payment arrangements	(34)		(11)		Employee taxes paid for share-based payment arrangements	(41)		(35)
Distributions to noncontrolling interests	Distributions to noncontrolling interests	(42)		(35)		Distributions to noncontrolling interests	(13)		(1)

Dividends paid to stockholders	Dividends paid to stockholders	(1,511)		(1,561)		Dividends paid to stockholders	(496)		(513)

Cash used for financing activities	Cash used for financing activities	(4,513)		(4,974)		Cash used for financing activities	(854)		(1,017)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	Effect of exchange rate changes on cash, cash equivalents and restricted cash	(261)		(57)		Effect of exchange rate changes on cash, cash equivalents and restricted cash	(41)		(45)

Summary	Summary					Summary
Decrease in cash, cash equivalents and restricted cash		(716)		(2,132)
Increase (decrease) in cash, cash equivalents and restricted cash						Increase (decrease) in cash, cash equivalents and restricted cash	(510)		174
Cash, cash equivalents and restricted cash at beginning of period	Cash, cash equivalents and restricted cash at beginning of period	3,033		5,108		Cash, cash equivalents and restricted cash at beginning of period	3,940		3,033
Cash, cash equivalents and restricted cash at end of period	Cash, cash equivalents and restricted cash at end of period	$	2,317	$	2,976	Cash, cash equivalents and restricted cash at end of period	$	3,430	$	3,207
Less: Restricted cash and cash equivalents, included in "Other current assets"	Less: Restricted cash and cash equivalents, included in "Other current assets"	101		65		Less: Restricted cash and cash equivalents, included in "Other current assets"	111		64
Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	2,216	$	2,911	Cash and cash equivalents at end of period	$	3,319	$	3,143

See Notes to the Consolidated Financial Statements.

Table of Contents

Dow Inc. and Subsidiaries

Consolidated Statements of Equity


		Three Months Ended				Nine Months Ended					Three Months Ended
In millions, except per share amounts (Unaudited)	In millions, except per share amounts (Unaudited)	Sep 30, 2022		Sep 30, 2021		Sep 30, 2022		Sep 30, 2021		In millions, except per share amounts (Unaudited)	Mar 31, 2023		Mar 31, 2022
Common Stock	Common Stock									Common Stock
Balance at beginning and end of period	Balance at beginning and end of period	$	8	$	8	$	8	$	8	Balance at beginning and end of period	$	8	$	8

Additional Paid-in Capital	Additional Paid-in Capital									Additional Paid-in Capital
Balance at beginning of period	Balance at beginning of period	8,343		7,898		8,151		7,595		Balance at beginning of period	8,540		8,151
Common stock issued/sold	Common stock issued/sold	2		11		99		211		Common stock issued/sold	55		35
Stock-based compensation and allocation of ESOP shares	Stock-based compensation and allocation of ESOP shares	79		79		198		182		Stock-based compensation and allocation of ESOP shares	56		35
Treasury stock issuances - compensation and benefit plans	Treasury stock issuances - compensation and benefit plans	(28)		—		(52)		—		Treasury stock issuances - compensation and benefit plans	(44)		(4)

Balance at end of period	Balance at end of period	8,396		7,988		8,396		7,988		Balance at end of period	8,607		8,217
Retained Earnings	Retained Earnings									Retained Earnings
Balance at beginning of period	Balance at beginning of period	22,827		18,200		20,623		16,361		Balance at beginning of period	23,180		20,623
Net income available for Dow Inc. common stockholders		739		1,683		3,969		4,575
Net income (loss) available for Dow Inc. common stockholders										Net income (loss) available for Dow Inc. common stockholders	(93)		1,569
Dividends to stockholders	Dividends to stockholders	(493)		(518)		(1,511)		(1,561)		Dividends to stockholders	(496)		(513)

Other	Other	(5)		(8)		(13)		(18)		Other	(7)		(7)
Balance at end of period	Balance at end of period	23,068		19,357		23,068		19,357		Balance at end of period	22,584		21,672
Accumulated Other Comprehensive Loss	Accumulated Other Comprehensive Loss									Accumulated Other Comprehensive Loss
Balance at beginning of period	Balance at beginning of period	(9,204)		(9,676)		(8,977)		(10,855)		Balance at beginning of period	(7,139)		(8,977)
Other comprehensive income (loss)		(378)		11		(605)		1,190
Other comprehensive income										Other comprehensive income	74		181

Balance at end of period	Balance at end of period	(9,582)		(9,665)		(9,582)		(9,665)		Balance at end of period	(7,065)		(8,796)
Unearned ESOP Shares	Unearned ESOP Shares									Unearned ESOP Shares
Balance at beginning of period	Balance at beginning of period	—		(32)		(15)		(49)		Balance at beginning of period	—		(15)

Allocation of ESOP shares	Allocation of ESOP shares	—		8		15		25		Allocation of ESOP shares	—		15
Balance at end of period	Balance at end of period	—		(24)		—		(24)		Balance at end of period	—		—
Treasury Stock	Treasury Stock									Treasury Stock
Balance at beginning of period	Balance at beginning of period	(3,001)		(825)		(1,625)		(625)		Balance at beginning of period	(3,871)		(1,625)
Treasury stock purchases	Treasury stock purchases	(800)		(400)		(2,200)		(600)		Treasury stock purchases	(126)		(600)
Treasury stock issuances - compensation and benefit plans	Treasury stock issuances - compensation and benefit plans	28		—		52		—		Treasury stock issuances - compensation and benefit plans	44		4
Balance at end of period	Balance at end of period	(3,773)		(1,225)		(3,773)		(1,225)		Balance at end of period	(3,953)		(2,221)
Dow Inc.'s stockholders' equity	Dow Inc.'s stockholders' equity	18,117		16,439		18,117		16,439		Dow Inc.'s stockholders' equity	20,181		18,880
Noncontrolling Interests	Noncontrolling Interests	512		589		512		589		Noncontrolling Interests	534		545
Total Equity	Total Equity	$	18,629	$	17,028	$	18,629	$	17,028	Total Equity	$	20,715	$	19,425

Dividends declared per share of common stock	Dividends declared per share of common stock	$	0.70	$	0.70	$	2.10	$	2.10	Dividends declared per share of common stock	$	0.70	$	0.70

See Notes to the Consolidated Financial Statements.

Table of Contents

The Dow Chemical Company and Subsidiaries

Consolidated Statements of Income


		Three Months Ended				Nine Months Ended					Three Months Ended
In millions (Unaudited)	In millions (Unaudited)	Sep 30, 2022		Sep 30, 2021		Sep 30, 2022		Sep 30, 2021		In millions (Unaudited)	Mar 31, 2023		Mar 31, 2022
Net sales	Net sales	$	14,115	$	14,837	$	45,043	$	40,604	Net sales	$	11,851	$	15,264
Cost of sales	Cost of sales	12,379		11,610		37,676		32,410		Cost of sales	10,628		12,398
Research and development expenses	Research and development expenses	191		210		626		632		Research and development expenses	214		218
Selling, general and administrative expenses	Selling, general and administrative expenses	357		403		1,289		1,209		Selling, general and administrative expenses	428		498
Amortization of intangibles	Amortization of intangibles	83		100		256		301		Amortization of intangibles	81		88
Restructuring and asset related charges - net	Restructuring and asset related charges - net	—		—		186		22		Restructuring and asset related charges - net	541		186
Equity in earnings (losses) of nonconsolidated affiliates	Equity in earnings (losses) of nonconsolidated affiliates	(58)		249		311		751		Equity in earnings (losses) of nonconsolidated affiliates	(48)		174
Sundry income (expense) - net	Sundry income (expense) - net	73		(356)		287		(231)		Sundry income (expense) - net	69		136
Interest income	Interest income	45		15		111		36		Interest income	78		28
Interest expense and amortization of debt discount	Interest expense and amortization of debt discount	155		178		487		561		Interest expense and amortization of debt discount	185		167
Income before income taxes		1,010		2,244		5,232		6,025
Provision for income taxes		242		542		1,233		1,380
Net income		768		1,702		3,999		4,645
Net income attributable to noncontrolling interests		21		23		24		69
Net income available for The Dow Chemical Company common stockholder		$	747	$	1,679	$	3,975	$	4,576
Income (loss) before income taxes										Income (loss) before income taxes	(127)		2,047
Provision (credit) for income taxes										Provision (credit) for income taxes	(47)		503
Net income (loss)										Net income (loss)	(80)		1,544
Net income (loss) attributable to noncontrolling interests										Net income (loss) attributable to noncontrolling interests	20		(17)
Net income (loss) available for The Dow Chemical Company common stockholder										Net income (loss) available for The Dow Chemical Company common stockholder	$	(100)	$	1,561

Depreciation	Depreciation	$	482	$	517	$	1,459	$	1,550	Depreciation	$	475	$	491
Capital expenditures	Capital expenditures	$	452	$	413	$	1,224	$	1,035	Capital expenditures	$	440	$	315

See Notes to the Consolidated Financial Statements.

Table of Contents

The Dow Chemical Company and Subsidiaries

Consolidated Statements of Comprehensive Income

Three Months Ended Nine Months Ended
In millions (Unaudited) Sep 30,
2022 Sep 30,
2021 Sep 30,
2022 Sep 30,
2021
Net income $ 768 $ 1,702 $ 3,999 $ 4,645
Other comprehensive income (loss), net of tax
Unrealized losses on investments (122) (13) (371) (45)
Cumulative translation adjustments (403) (157) (1,081) (345)
Pension and other postretirement benefit plans 125 149 356 1,432
Derivative instruments 22 32 491 148
Total other comprehensive income (loss) (378) 11 (605) 1,190
Comprehensive income 390 1,713 3,394 5,835
Comprehensive income attributable to noncontrolling interests, net of tax 21 23 24 69
Comprehensive income attributable to The Dow Chemical Company $ 369 $ 1,690 $ 3,370 $ 5,766


	Three Months Ended
In millions (Unaudited)	Mar 31, 2023		Mar 31, 2022
Net income (loss)	$	(80)	$	1,544
Other comprehensive income (loss), net of tax
Unrealized gains (losses) on investments	31		(96)
Cumulative translation adjustments	101		(164)
Pension and other postretirement benefit plans	6		109
Derivative instruments	(64)		332
Total other comprehensive income	74		181
Comprehensive income (loss)	(6)		1,725
Comprehensive income (loss) attributable to noncontrolling interests, net of tax	20		(17)
Comprehensive income (loss) attributable to The Dow Chemical Company	$	(26)	$	1,742

See Notes to the Consolidated Financial Statements.

Table of Contents

The Dow Chemical Company and Subsidiaries

Consolidated Balance Sheets


In millions, except share amounts (Unaudited)	In millions, except share amounts (Unaudited)	Sep 30, 2022		Dec 31, 2021		In millions, except share amounts (Unaudited)	Mar 31, 2023		Dec 31, 2022
Assets	Assets					Assets
Current Assets	Current Assets					Current Assets
Cash and cash equivalents	Cash and cash equivalents	$	2,216	$	2,988	Cash and cash equivalents	$	3,319	$	3,886

Accounts and notes receivable:	Accounts and notes receivable:					Accounts and notes receivable:
Trade (net of allowance for doubtful receivables - 2022: $212; 2021: $54)		6,407		6,841
Trade (net of allowance for doubtful receivables - 2023: $110; 2022: $110)						Trade (net of allowance for doubtful receivables - 2023: $110; 2022: $110)	5,740		5,611
Other	Other	2,120		2,712		Other	2,069		2,211
Inventories	Inventories	7,571		7,372		Inventories	6,825		6,988
Other current assets	Other current assets	1,425		924		Other current assets	1,377		1,815
Total current assets	Total current assets	19,739		20,837		Total current assets	19,330		20,511
Investments	Investments					Investments
Investment in nonconsolidated affiliates	Investment in nonconsolidated affiliates	1,785		2,045		Investment in nonconsolidated affiliates	1,508		1,589
Other investments (investments carried at fair value - 2022: $1,685; 2021: $2,079)		2,732		3,193
Other investments (investments carried at fair value - 2023: $1,806; 2022: $1,757)						Other investments (investments carried at fair value - 2023: $1,806; 2022: $1,757)	2,815		2,793
Noncurrent receivables	Noncurrent receivables	489		452		Noncurrent receivables	607		650
Total investments	Total investments	5,006		5,690		Total investments	4,930		5,032
Property	Property					Property
Property	Property	56,931		57,604		Property	58,679		58,055
Less accumulated depreciation	Less accumulated depreciation	36,899		37,049		Less accumulated depreciation	38,356		37,613
Net property	Net property	20,032		20,555		Net property	20,323		20,442
Other Assets	Other Assets					Other Assets
Goodwill	Goodwill	8,524		8,764		Goodwill	8,653		8,644
Other intangible assets (net of accumulated amortization - 2022: $4,888; 2021: $4,725)		2,483		2,881
Other intangible assets (net of accumulated amortization - 2023: $5,114; 2022: $5,022)						Other intangible assets (net of accumulated amortization - 2023: $5,114; 2022: $5,022)	2,336		2,442
Operating lease right-of-use assets	Operating lease right-of-use assets	1,231		1,412		Operating lease right-of-use assets	1,257		1,227
Deferred income tax assets	Deferred income tax assets	1,135		1,358		Deferred income tax assets	995		960
Deferred charges and other assets	Deferred charges and other assets	1,358		1,455		Deferred charges and other assets	1,446		1,363
Total other assets	Total other assets	14,731		15,870		Total other assets	14,687		14,636
Total Assets	Total Assets	$	59,508	$	62,952	Total Assets	$	59,270	$	60,621
Liabilities and Equity	Liabilities and Equity					Liabilities and Equity
Current Liabilities	Current Liabilities					Current Liabilities
Notes payable	Notes payable	$	185	$	161	Notes payable	$	278	$	362
Long-term debt due within one year	Long-term debt due within one year	364		231		Long-term debt due within one year	247		362
Accounts payable:	Accounts payable:					Accounts payable:
Trade	Trade	5,008		5,577		Trade	4,575		4,940
Other	Other	2,599		2,841		Other	1,985		2,349
Operating lease liabilities - current	Operating lease liabilities - current	277		314		Operating lease liabilities - current	304		287
Income taxes payable	Income taxes payable	579		623		Income taxes payable	335		334

Accrued and other current liabilities	Accrued and other current liabilities	3,146		3,299		Accrued and other current liabilities	2,623		2,613
Total current liabilities	Total current liabilities	12,158		13,046		Total current liabilities	10,347		11,247
Long-Term Debt	Long-Term Debt	12,921		14,280		Long-Term Debt	14,739		14,698
Other Noncurrent Liabilities	Other Noncurrent Liabilities					Other Noncurrent Liabilities
Deferred income tax liabilities	Deferred income tax liabilities	716		506		Deferred income tax liabilities	744		1,110
Pension and other postretirement benefits - noncurrent	Pension and other postretirement benefits - noncurrent	6,541		7,557		Pension and other postretirement benefits - noncurrent	3,799		3,808
Asbestos-related liabilities - noncurrent	Asbestos-related liabilities - noncurrent	868		931		Asbestos-related liabilities - noncurrent	844		857
Operating lease liabilities - noncurrent	Operating lease liabilities - noncurrent	1,012		1,149		Operating lease liabilities - noncurrent	1,007		997
Other noncurrent obligations	Other noncurrent obligations	6,415		6,454		Other noncurrent obligations	6,837		6,415
Total other noncurrent liabilities	Total other noncurrent liabilities	15,552		16,597		Total other noncurrent liabilities	13,231		13,187
Stockholder's Equity	Stockholder's Equity					Stockholder's Equity
Common stock (authorized and issued 100 shares of $0.01 par value each)	Common stock (authorized and issued 100 shares of $0.01 par value each)	—		—		Common stock (authorized and issued 100 shares of $0.01 par value each)	—		—
Additional paid-in capital	Additional paid-in capital	8,456		8,159		Additional paid-in capital	8,738		8,627
Retained earnings	Retained earnings	19,491		19,288		Retained earnings	18,746		19,472
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(9,582)		(8,977)		Accumulated other comprehensive loss	(7,065)		(7,139)
Unearned ESOP shares		—		(15)

The Dow Chemical Company’s stockholder's equity	The Dow Chemical Company’s stockholder's equity	18,365		18,455		The Dow Chemical Company’s stockholder's equity	20,419		20,960
Noncontrolling interests	Noncontrolling interests	512		574		Noncontrolling interests	534		529
Total equity	Total equity	18,877		19,029		Total equity	20,953		21,489
Total Liabilities and Equity	Total Liabilities and Equity	$	59,508	$	62,952	Total Liabilities and Equity	$	59,270	$	60,621

See Notes to the Consolidated Financial Statements.

Table of Contents

The Dow Chemical Company and Subsidiaries

Consolidated Statements of Cash Flows


In millions (Unaudited)	In millions (Unaudited)	Nine Months Ended				In millions (Unaudited)	Three Months Ended
		Sep 30, 2022		Sep 30, 2021			Mar 31, 2023		Mar 31, 2022
Operating Activities	Operating Activities					Operating Activities
Net income		$	3,999	$	4,645
Adjustments to reconcile net income to net cash provided by operating activities:
Net income (loss)						Net income (loss)	$	(80)	$	1,544
Adjustments to reconcile net income (loss) to net cash provided by operating activities:						Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	Depreciation and amortization	2,104		2,187		Depreciation and amortization	648		752
Provision for deferred income tax		125		488
Earnings of nonconsolidated affiliates less than (in excess of) dividends received		517		(519)
Net periodic pension benefit cost		19		34
Provision (credit) for deferred income tax						Provision (credit) for deferred income tax	(418)		253
Earnings of nonconsolidated affiliates less than dividends received						Earnings of nonconsolidated affiliates less than dividends received	102		374
Net periodic pension benefit cost (credit)						Net periodic pension benefit cost (credit)	(23)		7
Pension contributions	Pension contributions	(156)		(1,166)		Pension contributions	(41)		(55)
Net gain on sales of assets, businesses and investments	Net gain on sales of assets, businesses and investments	(11)		(67)		Net gain on sales of assets, businesses and investments	(49)		(6)
Restructuring and asset related charges - net	Restructuring and asset related charges - net	186		22		Restructuring and asset related charges - net	541		186
Other net loss	Other net loss	167		878		Other net loss	348		140
Changes in assets and liabilities, net of effects of acquired and divested companies:	Changes in assets and liabilities, net of effects of acquired and divested companies:					Changes in assets and liabilities, net of effects of acquired and divested companies:
Accounts and notes receivable	Accounts and notes receivable	323		(2,222)		Accounts and notes receivable	(68)		(741)
Inventories	Inventories	(254)		(1,502)		Inventories	163		(443)
Accounts payable	Accounts payable	(860)		1,487		Accounts payable	(631)		86
Other assets and liabilities, net	Other assets and liabilities, net	(718)		369		Other assets and liabilities, net	42		(486)
Cash provided by operating activities	Cash provided by operating activities	5,441		4,634		Cash provided by operating activities	534		1,611
Investing Activities	Investing Activities					Investing Activities
Capital expenditures	Capital expenditures	(1,224)		(1,035)		Capital expenditures	(440)		(315)
Investment in gas field developments	Investment in gas field developments	(134)		(44)		Investment in gas field developments	(55)		(37)
Purchases of previously leased assets	Purchases of previously leased assets	(5)		(5)		Purchases of previously leased assets	(2)		(2)
Proceeds from sales of property and businesses, net of cash divested		16		15
Proceeds from sales of property, businesses and consolidated companies, net of cash divested						Proceeds from sales of property, businesses and consolidated companies, net of cash divested	57		4
Acquisitions of property and businesses, net of cash acquired	Acquisitions of property and businesses, net of cash acquired	(54)		(107)		Acquisitions of property and businesses, net of cash acquired	(23)		—
Investments in and loans to nonconsolidated affiliates	Investments in and loans to nonconsolidated affiliates	(69)		—		Investments in and loans to nonconsolidated affiliates	—		(6)
Distributions and loan repayments from nonconsolidated affiliates	Distributions and loan repayments from nonconsolidated affiliates	10		11		Distributions and loan repayments from nonconsolidated affiliates	1		—
Proceeds from sales of ownership interests in nonconsolidated affiliates	Proceeds from sales of ownership interests in nonconsolidated affiliates	11		—		Proceeds from sales of ownership interests in nonconsolidated affiliates	—		11
Purchases of investments	Purchases of investments	(445)		(1,004)		Purchases of investments	(165)		(148)
Proceeds from sales and maturities of investments	Proceeds from sales and maturities of investments	596		644		Proceeds from sales and maturities of investments	512		141
Other investing activities, net	Other investing activities, net	(41)		(10)		Other investing activities, net	(35)		(15)
Cash used for investing activities	Cash used for investing activities	(1,339)		(1,535)		Cash used for investing activities	(150)		(367)
Financing Activities	Financing Activities					Financing Activities
Changes in short-term notes payable	Changes in short-term notes payable	72		(44)		Changes in short-term notes payable	(91)		(21)
Proceeds from issuance of short-term debt greater than three months		—		144

Payments on short-term debt greater than three months	Payments on short-term debt greater than three months	(14)		—		Payments on short-term debt greater than three months	—		(14)

Proceeds from issuance of long-term debt	Proceeds from issuance of long-term debt	82		95		Proceeds from issuance of long-term debt	13		16
Payments on long-term debt	Payments on long-term debt	(957)		(2,638)		Payments on long-term debt	(156)		(25)
Collections on securitization programs						Collections on securitization programs	—		141
Proceeds from issuance of stock						Proceeds from issuance of stock	55		35

Proceeds from issuance of stock		99		212
Transaction financing, debt issuance and other costs		(8)		(536)
Employee taxes paid for share-based payment arrangements	Employee taxes paid for share-based payment arrangements	(34)		(11)		Employee taxes paid for share-based payment arrangements	(41)		(35)
Distributions to noncontrolling interests	Distributions to noncontrolling interests	(42)		(35)		Distributions to noncontrolling interests	(13)		(1)

Dividends paid to Dow Inc.	Dividends paid to Dow Inc.	(3,755)		(2,361)		Dividends paid to Dow Inc.	(620)		(1,121)

Cash used for financing activities	Cash used for financing activities	(4,557)		(5,174)		Cash used for financing activities	(853)		(1,025)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	Effect of exchange rate changes on cash, cash equivalents and restricted cash	(261)		(57)		Effect of exchange rate changes on cash, cash equivalents and restricted cash	(41)		(45)

Summary	Summary					Summary
Decrease in cash, cash equivalents and restricted cash		(716)		(2,132)
Increase (decrease) in cash, cash equivalents and restricted cash						Increase (decrease) in cash, cash equivalents and restricted cash	(510)		174
Cash, cash equivalents and restricted cash at beginning of period	Cash, cash equivalents and restricted cash at beginning of period	3,033		5,108		Cash, cash equivalents and restricted cash at beginning of period	3,940		3,033
Cash, cash equivalents and restricted cash at end of period	Cash, cash equivalents and restricted cash at end of period	$	2,317	$	2,976	Cash, cash equivalents and restricted cash at end of period	$	3,430	$	3,207
Less: Restricted cash and cash equivalents, included in "Other current assets"	Less: Restricted cash and cash equivalents, included in "Other current assets"	101		65		Less: Restricted cash and cash equivalents, included in "Other current assets"	111		64
Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	2,216	$	2,911	Cash and cash equivalents at end of period	$	3,319	$	3,143

See Notes to the Consolidated Financial Statements.

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The Dow Chemical Company and Subsidiaries

Consolidated Statements of Equity


		Three Months Ended				Nine Months Ended					Three Months Ended
In millions (Unaudited)	In millions (Unaudited)	Sep 30, 2022		Sep 30, 2021		Sep 30, 2022		Sep 30, 2021		In millions (Unaudited)	Mar 31, 2023		Mar 31, 2022
Common Stock	Common Stock									Common Stock
Balance at beginning and end of period	Balance at beginning and end of period	$	—	$	—	$	—	$	—	Balance at beginning and end of period	$	—	$	—
Additional Paid-in Capital	Additional Paid-in Capital									Additional Paid-in Capital
Balance at beginning of period	Balance at beginning of period	8,375		7,906		8,159		7,603		Balance at beginning of period	8,627		8,159
Issuance of parent company stock - Dow Inc.	Issuance of parent company stock - Dow Inc.	2		11		99		211		Issuance of parent company stock - Dow Inc.	55		35
Stock-based compensation and allocation of ESOP shares	Stock-based compensation and allocation of ESOP shares	79		79		198		182		Stock-based compensation and allocation of ESOP shares	56		35

Balance at end of period	Balance at end of period	8,456		7,996		8,456		7,996		Balance at end of period	8,738		8,229
Retained Earnings	Retained Earnings									Retained Earnings
Balance at beginning of period	Balance at beginning of period	20,049		17,745		19,288		16,300		Balance at beginning of period	19,472		19,288
Net income available for The Dow Chemical Company common stockholder		747		1,679		3,975		4,576
Net income (loss) available for The Dow Chemical Company common stockholder										Net income (loss) available for The Dow Chemical Company common stockholder	(100)		1,561
Dividends to Dow Inc.	Dividends to Dow Inc.	(1,301)		(919)		(3,755)		(2,361)		Dividends to Dow Inc.	(620)		(1,121)
Other	Other	(4)		(8)		(17)		(18)		Other	(6)		(7)
Balance at end of period	Balance at end of period	19,491		18,497		19,491		18,497		Balance at end of period	18,746		19,721
Accumulated Other Comprehensive Loss	Accumulated Other Comprehensive Loss									Accumulated Other Comprehensive Loss
Balance at beginning of period	Balance at beginning of period	(9,204)		(9,676)		(8,977)		(10,855)		Balance at beginning of period	(7,139)		(8,977)
Other comprehensive income (loss)		(378)		11		(605)		1,190
Other comprehensive income										Other comprehensive income	74		181
Balance at end of period	Balance at end of period	(9,582)		(9,665)		(9,582)		(9,665)		Balance at end of period	(7,065)		(8,796)
Unearned ESOP Shares	Unearned ESOP Shares									Unearned ESOP Shares
Balance at beginning of period	Balance at beginning of period	—		(32)		(15)		(49)		Balance at beginning of period	—		(15)

Allocation of ESOP shares	Allocation of ESOP shares	—		8		15		25		Allocation of ESOP shares	—		15
Balance at end of period	Balance at end of period	—		(24)		—		(24)		Balance at end of period	—		—
The Dow Chemical Company's stockholder's equity	The Dow Chemical Company's stockholder's equity	18,365		16,804		18,365		16,804		The Dow Chemical Company's stockholder's equity	20,419		19,154
Noncontrolling Interests	Noncontrolling Interests	512		589		512		589		Noncontrolling Interests	534		545
Total Equity	Total Equity	$	18,877	$	17,393	$	18,877	$	17,393	Total Equity	$	20,953	$	19,699

See Notes to the Consolidated Financial Statements.

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Dow Inc. and Subsidiaries The Dow Chemical Company and Subsidiaries (Unaudited)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Table of Contents


Note	Note		Page	Note		Page
1	1	Consolidated Financial Statements	15	1	Consolidated Financial Statements	15
2	2	Recent Accounting Guidance	16	2	Recent Accounting Guidance	16
3	3	Separation from DowDuPont	16	3	Revenue	16
4	4	Revenue	16	4	Restructuring and Asset Related Charges - Net	18
5	5	Restructuring and Asset Related Charges - Net	19	5	Supplementary Information	19
6	6	Supplementary Information	20	6	Earnings Per Share Calculations	20
7	7	Earnings Per Share Calculations	21	7	Inventories	20
8	8	Inventories	21	8	Commitments and Contingencies	21
9	9	Nonconsolidated Affiliates	22	9	Leases	22
10	10	Goodwill and Other Intangible Assets	22	10	Accumulated Other Comprehensive Loss	23
11	11	Transfers of Financial Assets	23	11	Noncontrolling Interests	24
12	12	Notes Payable, Long-Term Debt and Available Credit Facilities	24	12	Pension and Other Postretirement Benefit Plans	24
13	13	Commitments and Contingencies	26	13	Stock-Based Compensation	25
14	14	Leases	28	14	Financial Instruments	26
15	15	Stockholders' Equity	30	15	Fair Value Measurements	31
16	16	Noncontrolling Interests	32	16	Segments and Geographic Regions	32
17		Pension and Other Postretirement Benefit Plans	33
18		Stock-Based Compensation	34
19		Financial Instruments	35
20		Fair Value Measurements	41
21		Variable Interest Entities	42
22		Related Party Transactions	43
23		Segments and Geographic Regions	43

NOTE 1 – CONSOLIDATED FINANCIAL STATEMENTS

Basis of Presentation

Dow Inc. is the direct parent company of The Dow Chemical Company and its consolidated subsidiaries ("TDCC" and together with Dow Inc., "Dow" or the "Company"). The unaudited interim consolidated financial statements of Dow Inc. and TDCC were prepared in accordance with accounting principles generally accepted in the United States of America ~~(“U.S. GAAP”)~~ and reflect all adjustments (including normal recurring accruals) which, in the opinion of management, are considered necessary for the fair presentation of the results for the periods presented. These statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the combined Dow Inc. and TDCC Annual Report on Form 10-K for the year ended December 31, ~~2021~~2022 ("~~2021~~2022 10-K").

As a result of the parent/subsidiary relationship between Dow Inc. and TDCC, and considering that the financial statements and disclosures of each company are substantially similar, the companies are filing a combined report for this Quarterly Report on Form 10-Q. The information reflected in the report is equally applicable to both Dow Inc. and TDCC, except where otherwise noted. Transactions between TDCC and Dow Inc. are treated as related party transactions for TDCC. ~~See Note 22 for additional information.~~

Except as otherwise indicated by the context, the term "Union Carbide" means Union Carbide Corporation and the term "Dow Silicones" means Dow Silicones Corporation, both wholly owned subsidiaries of the Company.

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NOTE 2 – RECENT ACCOUNTING GUIDANCE

Recently Adopted Accounting Guidance ~~Issued But Not Adopted at September 30, 2022~~

In ~~September 2022,~~ the ~~Financial Accounting Standards Board issued~~first quarter of 2023, the Company adopted the interim period disclosure requirements of Accounting Standards Update ("ASU") 2022-04, "Liabilities — Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program ~~Obligations,~~Obligations." ~~which~~The ASU, issued in September 2022, requires disclosures intended to enhance the transparency of supplier finance programs. ~~The~~Specifically, the amendments ~~in this ASU~~ require buyers in a supplier finance program to disclose sufficient information about the program to allow a user of financial statements to understand the program’s nature, activity during the period, changes from period to period, and potential magnitude. The amendments are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, except for ~~the~~ disclosure of rollforward information, which is required to be disclosed annually and is effective for fiscal years beginning after December 15, 2023. Early adoption is permitted. The amendments should be applied retrospectively to each period in which a balance sheet is presented, except for disclosure of rollforward information, which should be applied prospectively. The Company expects to early adopt the annual requirement to disclose rollforward information prospectively beginning in the 2023 annual financial statements. See Note 5 for disclosures related to the Company's supplier finance program.

Accounting Guidance Issued But Not Adopted at March 31, 2023

In March 2023, the Financial Accounting Standards Board issued ASU 2023-02, "Investments — Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method." The amendments permit reporting entities to elect to account for their tax equity investments using the proportional amortization method if certain conditions are met. Under the proportional amortization method, an entity amortizes the initial cost of the investment in proportion to the income tax credits and other income tax benefits received and recognizes the net amortization and income tax credits and other income tax benefits in the income statement as a component of income tax expense (benefit). The amendments also require certain disclosures in annual and interim reporting periods about an entity's tax credit programs. The new standard is effective for public companies for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, and the amendments must be applied on either a modified retrospective or a retrospective basis. Early adoption is permitted. The Company is currently evaluating early adoption of the new guidance in 2023 and the adoption is not expected to have a material impact ~~of adopting this guidance~~ on the ~~Company's disclosures.~~consolidated financial statements.

NOTE 3 ~~– SEPARATION FROM DOWDUPONT~~

~~For additional information on the separation from DowDuPont Inc. ("DowDuPont"), see Note 3 to the Consolidated Financial Statements included in the~~ ~~2021~~ ~~10-K.~~

~~Agreements Related to the Separation and Distribution~~

The impacts of indemnifications and other post-separation matters relating to Dow's separation from DowDuPont were primarily included in the consolidated financial statements of Dow Inc. At September 30, 2022, the Company had assets of $23 million (zero at December 31, 2021) included in "Other current assets" and $2 million ($20 million at December 31, 2021) included in "Noncurrent receivables," and liabilities of $128 million ($148 million at December 31, 2021) included in "Accrued and other current liabilities" and $32 million ($39 million at December 31, 2021) included in "Other noncurrent obligations" in the consolidated balance sheets of Dow Inc. related to these agreements.

In addition, the Company deferred a portion of the cash distribution received from DowDuPont at separation and recorded an associated liability with an offset to "Retained earnings" in the consolidated balance sheets of Dow Inc. At September 30, 2022, $10 million ($15 million at December 31, 2021) of this liability was recorded in "Accrued and other current liabilities" and $96 million ($96 million at December 31, 2021) was recorded in "Other noncurrent obligations" in the consolidated balance sheets of Dow Inc.

~~NOTE 4~~ – REVENUE

Revenue Recognition

The majority of the Company's revenue is derived from product sales. The Company's revenue related to product sales was 99 percent for the three ~~and~~ ~~nine~~ months ended ~~September 30, 2022~~March 31, 2023 and ~~(99 percent and 98 percent for the three and nine months ended September 30, 2021, respectively).~~March 31, 2022. The remaining sales were primarily related to the Company's insurance operations and licensing of patents and technologies. Product sales consist of sales of the Company's products to manufacturers and distributors. The Company considers order confirmations or purchase orders, which in some cases are governed by master supply agreements, to be contracts with a customer. The Company enters into licensing arrangements in which it licenses certain rights of its patents and technology to customers. Revenue from the Company’s licenses for patents and technology is derived from sales-based royalties and licensing arrangements based on billing schedules established in each contract.

Remaining Performance Obligations

Remaining performance obligations represent the transaction price allocated to unsatisfied or partially unsatisfied performance obligations. At ~~September 30, 2022,~~March 31, 2023, the Company had unfulfilled performance obligations of ~~$919~~$963 million ($~~829~~840 million at December 31, ~~2021)~~2022) related to the licensing of technology. The Company expects revenue to be recognized for the remaining performance obligations over the next ~~six~~seven years.

~~Table of Contents~~

The remaining performance obligations are for product sales that have expected durations of one year or less, product sales of materials delivered through a pipeline for which the Company has elected the right to invoice practical expedient, or variable consideration attributable to royalties for licenses of patents and technology. The Company has received advance payments from customers related to long-term supply agreements that are deferred and recognized over the life of the contract, with remaining contract terms that range up to 1817 years. The Company will have rights to future consideration for revenue recognized when product is delivered to the customer. These payments are included in "Accrued and other current liabilities" and "Other noncurrent obligations" in the consolidated balance sheets.

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Disaggregation of Revenue

The Company disaggregates its revenue from contracts with customers by operating segment and business, as the Company believes it best depicts the nature, amount, timing and uncertainty of its revenue and cash flows. See details in the tables below:


Net Trade Sales by Segment and Business	Net Trade Sales by Segment and Business	Three Months Ended				Nine Months Ended				Net Trade Sales by Segment and Business	Three Months Ended
In millions	In millions	Sep 30, 2022		Sep 30, 2021		Sep 30, 2022		Sep 30, 2021		In millions	Mar 31, 2023		Mar 31, 2022
Hydrocarbons & Energy	Hydrocarbons & Energy	$	2,509	$	2,251	$	7,704	$	6,010	Hydrocarbons & Energy	$	1,874	$	2,416
Packaging and Specialty Plastics	Packaging and Specialty Plastics	4,818		5,485		15,483		14,929		Packaging and Specialty Plastics	4,240		5,211
Packaging & Specialty Plastics	Packaging & Specialty Plastics	$	7,327	$	7,736	$	23,187	$	20,939	Packaging & Specialty Plastics	$	6,114	$	7,627
Industrial Solutions	Industrial Solutions	$	1,420	$	1,377	$	4,381	$	3,627	Industrial Solutions	$	1,139	$	1,515
Polyurethanes & Construction Chemicals	Polyurethanes & Construction Chemicals	2,636		3,102		8,560		8,670		Polyurethanes & Construction Chemicals	2,234		3,005
Other	Other	3		2		12		6		Other	5		4
Industrial Intermediates & Infrastructure	Industrial Intermediates & Infrastructure	$	4,059	$	4,481	$	12,953	$	12,303	Industrial Intermediates & Infrastructure	$	3,378	$	4,524
Coatings & Performance Monomers	Coatings & Performance Monomers	$	1,052	$	1,110	$	3,256	$	2,975	Coatings & Performance Monomers	$	858	$	1,075
Consumer Solutions	Consumer Solutions	1,602		1,416		5,450		4,139		Consumer Solutions	1,418		1,974
Performance Materials & Coatings	Performance Materials & Coatings	$	2,654	$	2,526	$	8,706	$	7,114	Performance Materials & Coatings	$	2,276	$	3,049
Corporate	Corporate	$	75	$	94	$	197	$	248	Corporate	$	83	$	64
Total	Total	$	14,115	$	14,837	$	45,043	$	40,604	Total	$	11,851	$	15,264


Net Trade Sales by Geographic Region	Net Trade Sales by Geographic Region	Three Months Ended				Nine Months Ended				Net Trade Sales by Geographic Region	Three Months Ended
In millions	In millions	Sep 30, 2022		Sep 30, 2021		Sep 30, 2022		Sep 30, 2021		In millions	Mar 31, 2023		Mar 31, 2022
U.S. & Canada	U.S. & Canada	$	5,334	$	5,476	$	16,578	$	14,431	U.S. & Canada	$	4,450	$	5,537
EMEAI 1	EMEAI 1	4,634		5,229		15,823		14,660		EMEAI 1	4,053		5,512
Asia Pacific	Asia Pacific	2,571		2,579		7,997		7,423		Asia Pacific	2,047		2,753
Latin America	Latin America	1,576		1,553		4,645		4,090		Latin America	1,301		1,462
Total	Total	$	14,115	$	14,837	$	45,043	$	40,604	Total	$	11,851	$	15,264

1.Europe, Middle East, Africa and India.

~~Table of Contents~~

Contract Assets and Liabilities

The Company receives payments from customers based upon contractual billing schedules. Accounts receivable are recorded when the right to consideration becomes unconditional. Contract assets include amounts related to the Company's contractual right to consideration for completed performance obligations not yet invoiced. Contract liabilities include payments received in advance of performance under the contract and are recognized in revenue when the performance obligations are met. "Contract liabilities - current" primarily reflects deferred revenue from prepayments from customers for product to be delivered in 12 months or less and royalty payments that are deferred and will be recognized in 12 months or less. "Contract liabilities - noncurrent" includes advance payments that the Company has received from customers related to long-term supply agreements and royalty payments that are deferred and recognized over the life of the contract.

Revenue recognized in the first ~~nine~~three months of ~~2022~~2023 from amounts included in contract liabilities at the beginning of the period was approximately ~~$165~~$40 million (approximately ~~$250~~$65 million in the first ~~nine~~three months of ~~2021)~~2022). In the first ~~nine~~three months of ~~2022,~~2023, the amount of contract assets reclassified to receivables as a result of the right to the transaction consideration becoming unconditional was ~~insignificant (approximately $5~~approximately $30 million (insignificant in the first ~~nine~~three months of ~~2021)~~2022).

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The following table summarizes contract assets and liabilities at ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021:~~2022:

Contract Assets and Liabilities Balance Sheet Classification Sep 30, 2022 Dec 31, 2021
In millions
Accounts and notes receivable - trade Accounts and notes receivable - trade $ 6,407 $ 6,841
Contract assets - current Other current assets $ 40 $ 34
Contract assets - noncurrent Deferred charges and other assets $ 19 $ 26
Contract liabilities - current 1
Accrued and other current liabilities $ 315 $ 209
Contract liabilities - noncurrent 2
Other noncurrent obligations $ 1,727 $ 1,925

1.~~The increase from December 31, 2021 to September 30, 2022 was due to the reclassification of deferred royalty payments from noncurrent to current.~~

2.The decrease from December 31, 2021 to September 30, 2022 was due to the recognition of revenue on long-term product supply agreements and reclassification of deferred royalty payments from noncurrent to current.


Contract Assets and Liabilities	Balance Sheet Classification	Mar 31, 2023		Dec 31, 2022
In millions	Balance Sheet Classification	Mar 31, 2023		Dec 31, 2022
Accounts and notes receivable - trade	Accounts and notes receivable - trade	$	5,740	$	5,611
Contract assets - current	Other current assets	$	21	$	48
Contract assets - noncurrent	Deferred charges and other assets	$	16	$	16
Contract liabilities - current	Accrued and other current liabilities	$	293	$	275
Contract liabilities - noncurrent	Other noncurrent obligations	$	1,740	$	1,725

~~Table of Contents~~

NOTE 54 – RESTRUCTURING AND ASSET RELATED CHARGES - NET

Charges for restructuring programs and other asset related charges, which includes asset impairments, are recorded in "Restructuring and asset related charges - net" in the consolidated statements of income. For additional information on the Company's restructuring programs, see Note 65 to the Consolidated Financial Statements included in the ~~2021~~2022 10-K.

~~2020~~2023 Restructuring Program

~~Actions related to the restructuring program approved by~~On January 25, 2023, the Dow Inc. Board of Directors ("Board") ~~on September 29, 2020 ("2020 Restructuring Program") were~~approved restructuring actions to achieve the Company's structural cost improvement initiatives in response to the continued economic impact from the global recessionary environment and to enhance its agility and long-term competitiveness across the economic cycle. As a result of these actions the Company recorded pretax restructuring charges of $541 million in the first quarter of 2023. These actions are expected to be substantially complete atby the end of ~~2021, with the exception of certain cash payments that will continue through 2022 and into 2023.~~2024. The following table summarizes the activities related to the ~~2020~~2023 Restructuring Program, ~~since January 1, 2021:~~including segment information:


2020 Restructuring Program		Severance and Related Benefit Costs		Asset Write-downs and Write-offs		Costs Associated with Exit and Disposal Activities		Total
2023 Restructuring Program										2023 Restructuring Program	Severance and Related Benefit Costs		Asset Write-downs and Write-offs			Total
In millions	In millions	Severance and Related Benefit Costs		Asset Write-downs and Write-offs		Costs Associated with Exit and Disposal Activities		Total		In millions					Total
Packaging & Specialty Plastics										Packaging & Specialty Plastics	$	—	$	1		$	1
Industrial Intermediates & Infrastructure										Industrial Intermediates & Infrastructure	—		40			40
Performance Materials & Coatings										Performance Materials & Coatings	—		49			49
Corporate										Corporate	344		107			451
Total restructuring charges										Total restructuring charges	$	344	$	197		$	541
Charges against the reserve										Charges against the reserve	—		(197)			(197)
Cash payments										Cash payments	(11)		—			(11)
Reserve balance at Mar 31, 2023										Reserve balance at Mar 31, 2023	$	333	$	—		$	333

Reserve balance at Jan 1, 2021		$	289	$	—	$	75	$	364

Cash payments		(37)		—		(12)		(49)
Reserve balance at Mar 31, 2021		$	252	$	—	$	63	$	315
Packaging & Specialty Plastics		$	—	$	—	$	8	$	8
Industrial Intermediates & Infrastructure		—		1		—		1
Performance Materials & Coatings		—		8		2		10
Corporate		—		3		—		3
Total restructuring charges		$	—	$	12	$	10	$	22
Charges against the reserve		—		(12)		—		(12)
Cash payments		(53)		—		(3)		(56)
Reserve balance at Jun 30, 2021		$	199	$	—	$	70	$	269

Cash payments		(55)		—		(2)		(57)
Reserve balance at Sep 30, 2021		$	144	$	—	$	68	$	212
Restructuring charges - Corporate		(10)		—		—		(10)
Cash payments		(30)		—		(4)		(34)
Reserve balance at Dec 31, 2021		$	104	$	—	$	64	$	168
Cash payments		(59)		—		(1)		(60)
Reserve balance at Mar 31, 2022		$	45	$	—	$	63	$	108
Cash payments		(8)		—		(2)		(10)
Reserve balance at Jun 30, 2022		$	37	$	—	$	61	$	98
Cash payments		(5)		—		(1)		(6)
Reserve balance at Sep 30, 2022		$	32	$	—	$	60	$	92

At ~~September 30, 2022, $38~~March 31, 2023, $256 million of the reserve balance was included in "Accrued and other current liabilities" ~~($112 million at December 31, 2021)~~ and ~~$54~~$77 million was included in "Other noncurrent obligations" ~~($56 million at December 31, 2021)~~ in the consolidated balance sheets.

Severance and Related Benefit Costs

Severance benefits are provided to employees primarily under Dow's ongoing benefit arrangements and are accrued against the Corporate segment once management commits to a plan of termination. The ~~Company recorded pretax restructuring charges of $585 million inception-to-date under the 2020~~2023 Restructuring Program ~~consisting of~~included a charge for severance and related benefit costs of ~~$287~~$344 million ~~asset write-downs and write-offs~~for a global workforce reduction of ~~$208 million and costs associated~~approximately 2,000 employees. A majority of separations are intended to occur by the end of the second quarter of 2023 with ~~exit and disposal activities~~the remaining occurring primarily through the end of ~~$90 million.~~2024.

The Company expects to incur additional costs in the future related to its restructuring activities. Future costs are expected to include demolition costs related to closed facilities and restructuring implementation costs; these costs 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.

1918

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Asset Write-downs and Write-offs

The restructuring charge related to the write-down and write-off of assets in the first quarter of 2023 totaled $197 million. Details regarding the asset write-downs and write-offs are as follows:

•Industrial Intermediates & Infrastructure charges relate to the shutdown of certain polyurethanes assets and the write-off of other assets. The majority of the impacted facilities are expected to be shutdown by the end of 2024.

•Performance Materials & Coatings recorded charges to rationalize its asset footprint by shutting down certain coatings assets. These facilities are expected to be shutdown by the end of 2024.

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

Restructuring implementation costs, primarily decommissioning and demolition activities related to asset actions, and costs associated with the Company's efficiency actions, are expected to result in additional cash expenditures of approximately $425 million, primarily through the end of 2024.

2022 Asset Related Charges

In the first quarter of 2022, the Company recorded pretax asset related charges of $186 million due to the Russia and Ukraine conflict and the expectation that certain assets will not be recoverable. These charges included the write-down of inventory, the recording of bad debt reserves and the impairment of other assets. Asset related charges by segment were as follows: $31 million in Packaging & Specialty Plastics, $109 million in Industrial Intermediates & Infrastructure, $16 million in Performance Materials & Coatings and $30 million in Corporate.

NOTE 65 – SUPPLEMENTARY INFORMATION


Dow Inc. Sundry Income (Expense) – Net	Dow Inc. Sundry Income (Expense) – Net	Three Months Ended				Nine Months Ended				Dow Inc. Sundry Income (Expense) – Net	Three Months Ended
In millions	In millions	Sep 30, 2022		Sep 30, 2021		Sep 30, 2022		Sep 30, 2021		In millions	Mar 31, 2023		Mar 31, 2022
Non-operating pension and other postretirement benefit plan net credits 1	Non-operating pension and other postretirement benefit plan net credits 1	$	89	$	86	$	267	$	247	Non-operating pension and other postretirement benefit plan net credits 1	$	96	$	89
Foreign exchange losses		(31)		(5)		(46)		(21)
Loss on early extinguishment of debt 2		—		(472)		(8)		(574)
Foreign exchange gains (losses) 2										Foreign exchange gains (losses) 2	(102)		2

Gains on sales of other assets and investments		10		12		53		74
Indemnification and other transaction related costs 3		(7)		—		(3)		(5)
Luxi arbitration award 4		—		54		—		54

Gain on sales of other assets and investments 3										Gain on sales of other assets and investments 3	65		31
Asset impairments and related costs 4										Asset impairments and related costs 4	(18)		—

Indemnification and other transaction related costs 5										Indemnification and other transaction related costs 5	9		12
Other - net	Other - net	8		(25)		29		—		Other - net	29		14
Total sundry income (expense) – net	Total sundry income (expense) – net	$	69	$	(350)	$	292	$	(225)	Total sundry income (expense) – net	$	79	$	148

1.~~See Note 17 for additional information.~~

2.See Note 12 for additional information.

2.Foreign exchange losses for the three months ended March 31, 2023 relate primarily to exposures in the Argentinian peso.

3.~~See Note 3 for additional information.~~Includes gains associated with the sale of shares of a previously impaired equity method investment.

4.~~The three and nine months ended September 30, 2021 includes an arbitration award and interest assessment paid by Luxi Chemical Group Co., Ltd.,~~Certain obligations associatedwith a previously impaired equity method investment.

5.Primarily related to ~~Industrial Intermediates & Infrastructure.~~charges associated with agreements entered into with DuPont and Corteva as part of the separation and distribution.

TDCC Sundry Income (Expense) – Net Three Months Ended Nine Months Ended
In millions Sep 30, 2022 Sep 30, 2021 Sep 30, 2022 Sep 30, 2021
Non-operating pension and other postretirement benefit plan net credits 1
$ 89 $ 86 $ 267 $ 247
Foreign exchange losses (34) (8) (54) (24)
Loss on early extinguishment of debt 2
— (472) (8) (574)
Gains on sales of other assets and investments 10 12 53 74
Luxi arbitration award 3
— 54 — 54
Other - net 8 (28) 29 (8)
Total sundry income (expense) – net $ 73 $ (356) $ 287 $ (231)

1.~~See Note 17~~Sundry income (expense) - net for ~~additional information.~~

2.~~See Note 12~~TDCC for ~~additional information.~~

3.~~The~~the three ~~and nine~~ months ended ~~September 30, 2021 includes an arbitration award~~March 31, 2023 and ~~interest assessment paid by Luxi Chemical Group Co., Ltd., related to Industrial Intermediates & Infrastructure.~~2022 is substantially the same as that of Dow Inc. and therefore is not disclosed separately.

Supplier Finance Program

The Company facilitates a supply chain financing (“SCF”) program in the ordinary course of business in order to extend payment terms with vendors. Under the terms of this program, a vendor can voluntarily enter into an agreement with a participating financial intermediary to sell its receivables due from the Company. The vendor receives payment from the financial intermediary, and the Company pays the financial intermediary on the terms originally negotiated with the vendor, which generally range from 90 to 120 days. The vendor negotiates the terms of the agreements directly with the financial intermediary and the Company is not a party to that agreement. The financial intermediary may allow the participating vendor to utilize the Company’s creditworthiness in establishing credit spreads and associated costs, which may provide the vendor with more favorable terms than they would be able to secure on their own. The Company does not provide guarantees related to the SCF program. At March 31, 2023, outstanding obligations confirmed as valid under the SCF program were $290 million ($267 million at December 31, 2022), included in “Accounts payable – Trade” in the consolidated balance sheets.

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NOTE 76 - EARNINGS PER SHARE CALCULATIONS

The following tables provide earnings per share calculations for Dow Inc. for the three ~~and nine~~ months ended ~~September 30, 2022~~March 31, 2023 and ~~2021.~~2022. Earnings per share of TDCC is not presented as this information is not required in financial statements of wholly owned subsidiaries.

Net Income for Earnings Per Share Calculations Three Months Ended Nine Months Ended
In millions Sep 30, 2022 Sep 30, 2021 Sep 30, 2022 Sep 30, 2021
Net income $ 760 $ 1,706 $ 3,993 $ 4,644
Net income attributable to noncontrolling interests 21 23 24 69
Net income attributable to participating securities 1
4 8 21 23
Net income attributable to common stockholders $ 735 $ 1,675 $ 3,948 $ 4,552


Net Income (Loss) for Earnings Per Share Calculations	Three Months Ended
In millions	Mar 31, 2023		Mar 31, 2022

Net income (loss)	$	(73)	$	1,552
Net income (loss) attributable to noncontrolling interests	20		(17)
Net income attributable to participating securities 1	3		8
Net income (loss) attributable to common stockholders	$	(96)	$	1,561

Earnings Per Share - Basic and Diluted Three Months Ended Nine Months Ended
Dollars per share Sep 30, 2022 Sep 30, 2021 Sep 30, 2022 Sep 30, 2021
Earnings per common share - basic $ 1.03 $ 2.25 $ 5.45 $ 6.11
Earnings per common share - diluted $ 1.02 $ 2.23 $ 5.41 $ 6.06


Earnings (Loss) Per Share - Basic and Diluted	Three Months Ended
Dollars per share	Mar 31, 2023		Mar 31, 2022

Earnings (loss) per common share - basic	$	(0.13)	$	2.12
Earnings (loss) per common share - diluted	$	(0.13)	$	2.11


Share Count Information	Share Count Information	Three Months Ended		Nine Months Ended		Share Count Information	Three Months Ended
Shares in millions	Shares in millions	Sep 30, 2022	Sep 30, 2021	Sep 30, 2022	Sep 30, 2021	Shares in millions	Mar 31, 2023	Mar 31, 2022
									Shares in millions	Mar 31, 2023	Mar 31, 2022
Weighted-average common shares outstanding - basic	Weighted-average common shares outstanding - basic	714.3	744.5	724.9	745.4	Weighted-average common shares outstanding - basic	708.2	734.6
Plus dilutive effect of equity compensation plans		3.8	5.5	4.9	5.5
Plus dilutive effect of equity compensation plans 2						Plus dilutive effect of equity compensation plans 2	—	5.2
Weighted-average common shares outstanding - diluted	Weighted-average common shares outstanding - diluted	718.1	750.0	729.8	750.9	Weighted-average common shares outstanding - diluted	708.2	739.8
Stock options and restricted stock units excluded from EPS calculations 2		9.7	7.2	6.8	5.6
Stock options and restricted stock units excluded from EPS calculations 3						Stock options and restricted stock units excluded from EPS calculations 3	22.1	6.8

1.Restricted stock units are considered participating securities due to the Company's practice of paying dividend equivalents on unvested shares.

2.The three months ended March 31, 2023 reflect a net loss, and as such, the basic share count was used for purposes of calculating earnings per share on a diluted basis.

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

NOTE 87 – INVENTORIES

The following table provides a breakdown of inventories:


Inventories	Inventories	Sep 30, 2022		Dec 31, 2021		Inventories	Mar 31, 2023		Dec 31, 2022
In millions	In millions					In millions
Finished goods	Finished goods	$	4,745	$	4,554	Finished goods	$	3,974	$	4,150
Work in process	Work in process	1,626		1,615		Work in process	1,458		1,476
Raw materials	Raw materials	1,016		822		Raw materials	867		954
Supplies	Supplies	874		866		Supplies	911		892
Total	Total	$	8,261	$	7,857	Total	$	7,210	$	7,472
Adjustment of inventories to a LIFO basis		(690)		(485)
Adjustment of inventories to the LIFO basis						Adjustment of inventories to the LIFO basis	(385)		(484)
Total inventories	Total inventories	$	7,571	$	7,372	Total inventories	$	6,825	$	6,988

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~~NOTE 9 – NONCONSOLIDATED AFFILIATES~~

~~For additional information on the Company’s nonconsolidated affiliates, see Note 12 to the Consolidated Financial Statements included in the~~ ~~2021~~ ~~10-K.~~

The Company's investments in companies accounted for using the equity method ("nonconsolidated affiliates"), by classification in the consolidated balance sheets, and dividends received from nonconsolidated affiliates are shown in the following tables:

Investments in Nonconsolidated Affiliates Sep 30, 2022 Dec 31, 2021
In millions
Investment in nonconsolidated affiliates $ 1,785 $ 2,045
Other noncurrent obligations (148) —
Net investment in nonconsolidated affiliates $ 1,637 $ 2,045

Dividends from Nonconsolidated Affiliates Nine Months Ended
In millions Sep 30, 2022 Sep 30, 2021
Dividends from nonconsolidated affiliates 1
$ 828 $ 232

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

At September 30, 2022, the Company had a negative investment balance in EQUATE Petrochemical Company K.S.C.C of $148 million included in "Other noncurrent obligations" (positive $115 million at December 31, 2021 included in "Investment in nonconsolidated affiliates") in the consolidated balance sheets.

~~NOTE 10 – GOODWILL AND OTHER INTANGIBLE ASSETS~~

~~The following table shows changes in the carrying amount of goodwill by reportable segment:~~

Goodwill Packaging & Specialty Plastics Industrial Intermediates & Infrastructure Performance Materials & Coatings Total
In millions
Net goodwill at Dec 31, 2021 $ 5,105 $ 1,096 $ 2,563 $ 8,764
Foreign currency impact (14) (7) (219) (240)
Net goodwill at Sep 30, 2022 $ 5,091 $ 1,089 $ 2,344 $ 8,524

~~The following table provides information regarding the Company’s other intangible assets:~~

Other Intangible Assets Sep 30, 2022 Dec 31, 2021
In millions Gross Carrying Amount Accum Amort Net Gross Carrying Amount Accum Amort Net
Intangible assets with finite lives:
Developed technology $ 2,633 $ (1,985) $ 648 $ 2,637 $ (1,871) $ 766
Software 1,356 (960) 396 1,396 (945) 451
Trademarks/tradenames 352 (345) 7 352 (344) 8
Customer-related 3,013 (1,598) 1,415 3,204 (1,565) 1,639
Total other intangible assets, finite lives $ 7,354 $ (4,888) $ 2,466 $ 7,589 $ (4,725) $ 2,864
In-process research and development 17 — 17 17 — 17
Total other intangible assets $ 7,371 $ (4,888) $ 2,483 $ 7,606 $ (4,725) $ 2,881

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~~The following table provides information regarding amortization expense related to intangible assets:~~

Amortization Expense Three Months Ended Nine Months Ended
In millions Sep 30, 2022 Sep 30, 2021 Sep 30, 2022 Sep 30, 2021
Other intangible assets, excluding software $ 83 $ 100 $ 256 $ 301
Software, included in “Cost of sales” $ 20 $ 22 $ 60 $ 67

~~Total estimated amortization expense for 2022 and the five succeeding fiscal years, including amounts expected to be capitalized, is as follows:~~

Estimated Amortization Expense
In millions
2022 $ 411
2023 $ 376
2024 $ 357
2025 $ 266
2026 $ 192
2027 $ 159

~~NOTE 11 – TRANSFERS OF FINANCIAL ASSETS~~

~~Accounts Receivable Programs~~

The Company maintains committed accounts receivable facilities with various financial institutions, including in the United States, which expires in November 2022 and is expected to be renewed in the fourth quarter (“U.S. Program”) and in Europe, which expires in July 2023 (“Europe Program” and together with the U.S. Program, "the Programs"). Under the terms of the Programs, the Company may sell certain eligible trade accounts receivable at any point in time, up to $900 million for the U.S. Program and up to €500 million for the Europe Program. Under the terms of the Programs, the Company continues to service the receivables from the customer, but retains no interest in the receivables, and remits payment to the financial institutions. The Company also provides a guarantee to the financial institutions for the creditworthiness and collection of the receivables in satisfaction of the facility. See Note 13 for additional information related to guarantees. In the third quarter of 2022, the Company sold no receivables under the Programs ($391 million in the first nine months of 2022; zero for the three and nine months ended September 30, 2021).

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~~NOTE 12 – NOTES PAYABLE, LONG-TERM DEBT AND AVAILABLE CREDIT FACILITIES~~

Notes Payable Sep 30, 2022 Dec 31, 2021
In millions
Commercial paper $ 100 $ —
Notes payable to banks and other lenders 85 161
Total notes payable $ 185 $ 161
Period-end average interest rates 8.09 % 5.78 %

Long-Term Debt 2022 Average Rate Sep 30, 2022 2021 Average Rate Dec 31, 2021
In millions
Promissory notes and debentures:
Final maturity 2022 — % $ — 8.64 % $ 121
Final maturity 2023 7.63 % 250 7.63 % 250
Final maturity 2025 5.63 % 333 5.63 % 333
Final maturity 2026 — % — 3.63 % 750
Final maturity 2028 and thereafter 1
5.15 % 9,364 5.15 % 9,363
Other facilities:
Foreign currency notes and loans, various rates and maturities 1.16 % 2,339 1.17 % 2,730
InterNotes®, varying maturities through 2052 3.52 % 462 3.37 % 392
Finance lease obligations 2
804 869
Unamortized debt discount and issuance costs (267) (297)
Long-term debt due within one year 3
(364) (231)
Long-term debt $ 12,921 $ 14,280

1.~~Cost includes net fair value hedge adjustment gains of $47 million at September 30, 2022 and December 31, 2021. See Note 19 for additional information.~~

2.~~See Note 14 for additional information.~~

3.~~Presented net of current portion of unamortized debt issuance costs.~~

Maturities of Long-Term Debt for Next Five Years at Sep 30, 2022
In millions
2022 $ 34
2023 $ 390
2024 $ 84
2025 $ 386
2026 $ 79
2027 $ 1,068

~~2022 Activity~~

In the second quarter of 2022, the Company redeemed $750 million aggregate principal amount of 3.625 percent notes due May 2026. As a result of the redemption, the Company recognized a pretax loss on the early extinguishment of debt of $8 million, included in "Sundry income (expense) - net" in the consolidated statements of income and related to Corporate.

In the first nine months of 2022, the Company issued an aggregate principal amount of $82 million of InterNotes®. The Company also repaid approximately $121 million of long-term debt at maturity and approximately $2 million of long-term debt was repaid by consolidated variable interest entities.

~~2021 Activity~~

In the second quarter of 2021, the Company redeemed $208 million aggregate principal amount of 3.15 percent notes due May 2024 and $811 million aggregate principal amount of 3.50 percent notes due October 2024. As a result of the redemptions, the Company recognized a pretax loss on the early extinguishment of debt of

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~~$101 million, included in "Sundry income (expense) - net" in the consolidated statements of income and related to Corporate.~~

In the third quarter of 2021, the Company completed cash tender offers for certain debt securities. In total, $1,042 million aggregate principal amount was tendered and retired. As a result, the Company recognized a pretax loss of $472 million on the early extinguishment of debt, included in "Sundry income (expense) – net" in the consolidated statements of income (related to Corporate) and included in "Other net loss" in the consolidated statements of cash flows. In addition, the Company voluntarily repaid $81 million of long-term debt due within one year.

In the first nine months of 2021, the Company issued an aggregate principal amount of $95 million of InterNotes®, and redeemed an aggregate principal amount of $28 million at maturity. In addition, the Company voluntarily repaid an aggregate principal amount of $213 million of InterNotes® with various maturities. As a result, the Company recognized a pretax loss on the early extinguishment of debt for the nine months ended September 30, 2021 of $1 million, included in "Sundry income (expense) - net" in the consolidated statements of income and related to Corporate. The Company also repaid approximately $173 million of long-term debt at maturity and approximately $14 million of long-term debt was repaid by consolidated variable interest entities.

~~Available Credit Facilities~~

~~The following table summarizes the Company's credit facilities:~~

Committed and Available Credit Facilities at Sep 30, 2022
In millions Committed Credit Available Credit Maturity Date Interest
Five Year Competitive Advance and Revolving Credit Facility $ 5,000 $ 5,000 November 2026 Floating rate
Bilateral Revolving Credit Facility 200 200 November 2022 Floating rate
Bilateral Revolving Credit Facility 200 200 September 2023 Floating rate
Bilateral Revolving Credit Facility 250 250 September 2023 Floating rate
Bilateral Revolving Credit Facility 300 300 September 2023 Floating rate
Bilateral Revolving Credit Facility 300 300 December 2023 Floating rate
Bilateral Revolving Credit Facility 300 300 December 2023 Floating rate
Bilateral Revolving Credit Facility 100 100 October 2024 Floating rate
Bilateral Revolving Credit Facility 100 100 March 2025 Floating rate
Bilateral Revolving Credit Facility 250 250 March 2025 Floating rate
Bilateral Revolving Credit Facility 100 100 March 2025 Floating rate
Bilateral Revolving Credit Facility 100 100 March 2025 Floating rate
Bilateral Revolving Credit Facility 200 200 September 2025 Floating rate
Bilateral Revolving Credit Facility 100 100 March 2026 Floating rate
Bilateral Revolving Credit Facility 100 100 October 2026 Floating rate
Bilateral Revolving Credit Facility 150 150 November 2026 Floating rate
Bilateral Revolving Credit Facility 100 100 May 2027 Floating rate
Bilateral Revolving Credit Facility 350 350 June 2027 Floating rate
Bilateral Revolving Credit Facility 200 200 September 2027 Floating rate
Total committed and available credit facilities $ 8,400 $ 8,400

~~Debt Covenants and Default Provisions~~

There were no material changes to the debt covenants and default provisions related to the Company's outstanding long-term debt and primary, private credit agreements in the first nine months of 2022. For additional information on the Company's debt covenants and default provisions, see Note 15 to the Consolidated Financial Statements included in the 2021 10-K.

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NOTE 138 – COMMITMENTS AND CONTINGENCIES

A summary of the Company's commitments and contingencies can be found in Note 1615 to the Consolidated Financial Statements included in the ~~2021~~2022 10-K, which is incorporated by reference herein.

Environmental Matters

Accruals for environmental matters are recorded when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated, based on current law and existing technologies. At ~~September 30, 2022,~~March 31, 2023, the Company had accrued obligations of ~~$1,197~~$1,233 million for probable environmental remediation and restoration costs ($~~1,220~~1,192 million at December 31, ~~2021)~~2022), including ~~$239~~$254 million for the remediation of Superfund sites ($~~237~~244 million at December 31, ~~2021)~~2022). 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. Inherent uncertainties exist in these estimates primarily due to unknown conditions, changing governmental regulations and legal standards regarding liability, and emerging remediation technologies for handling site remediation and restoration. As new or additional information becomes available and/or certain spending trends become known, management will evaluate such information in determination of the current estimate of environmental liability.

Litigation

Asbestos-Related Matters of Union Carbide Corporation

Each quarter, Union Carbide reviews asbestos-related claims filed, settled and dismissed, as well as average settlement and resolution costs by disease category. Union Carbide also considers additional quantitative and qualitative factors such as the nature of pending claims, trial experience of Union Carbide and other asbestos defendants, current spending for defense and processing costs, significant appellate rulings and legislative developments, trends in the tort system, and their respective effects on expected future resolution costs. Union Carbide's management considers these factors in conjunction with the most recent actuarial study and determines whether a change in the estimate is warranted. Based on Union Carbide's review of ~~2022~~2023 activity, it was determined that no adjustment to the accrual was required at ~~September 30, 2022.~~March 31, 2023.

Union Carbide’s total asbestos-related liability for pending and future claims and defense and processing costs was ~~$958~~$929 million at ~~September 30, 2022~~March 31, 2023 ($~~1,016~~947 million at December 31, ~~2021)~~2022). At ~~September 30, 2022,~~March 31, 2023, approximately 25 percent of the recorded claim liability related to pending claims and approximately 75 percent related to future claims.

~~Dow Silicones Chapter 11 Related Matters~~Groundwater Contamination

~~At September 30, 2022, Dow Silicones~~The Company is the subject of various complaints related to alleged groundwater contamination based on decades-old sales and ~~its insurers~~applications of certain agricultural chemical products ("Legacy Liabilities"). The costs associated with these Legacy Liabilities were previously covered by insurance policies that have ~~made life-to-date payments~~since been depleted. In the first quarter of ~~$1,835~~2023, the Company completed a study of the Legacy Liabilities now deemed to be probable and estimable based on the public reporting of sampling data and historical information to develop a reasonable estimate of the cost of pending and future claims. As a result, the Company recorded a pretax charge of $177 million, to the settlement program administered by an independent claims office (the “Settlement Facility”), created to resolve breast implant and other product liability claims. At September 30, 2022, Dow Silicones estimates that it will be obligated to contribute an additional $87 million to the Settlement Facility which was included in ~~“Accrued and other current liabilities”~~"Cost of sales" in the consolidated ~~balance sheets ($130~~statements of income and related to Industrial Intermediates & Infrastructure. At March 31, 2023, the total liability related to such alleged Legacy Liabilities settlements was $237 million, ~~at December 31, 2021,~~ which was included in “Accrued and other current liabilities” and "Other noncurrent obligations" in the consolidated balance ~~sheets).~~sheets.

Indemnifications with Corning Incorporated

The Company had indemnification assets with Corning Incorporated of $99 million at ~~September 30, 2022~~March 31, 2023 ($9598 million at December 31, ~~2021),~~2022) related to the 2016 ownership restructure of Dow Silicones, which were included ~~primarily~~ in "Noncurrent receivables" in the consolidated balance sheets.

~~Gain Contingency - Dow v. Nova Chemicals Corporation Patent Infringement Matter~~

As a result of a 2017 damages judgment related to the patent infringement matter, Nova Chemicals Corporation ("Nova") was ordered to pay the Company $645 million Canadian dollars, plus pre- and post-judgment interest, for which the Company received payment of $501 million U.S. dollars in July 2017. At September 30, 2022, the Company had $341 million ($341 million at December 31, 2021) included in "Accrued and other current liabilities" in the consolidated balance sheets related to the disputed portion of the damages judgment.

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Gain Contingency - Dow v. Nova Chemicals Corporation Ethylene Asset Matter

As a result of a 2019 damages judgment related to the ethylene asset matter, Nova was ordered to pay the Company $1.43 billion Canadian dollars (equivalent to approximately $1.08 billion U.S. dollars). In October 2019, Nova paid $1.08 billion Canadian dollars (equivalent to approximately $0.8 billion U.S. dollars) directly to the Company, and remitted $347 million Canadian dollars to the Canada Revenue Agency ("CRA"), for ~~the tax account of one of the Company's subsidiaries. In March 2020,~~which the Company received ~~the full refund from the CRA, equivalent to $259 million U.S. dollars.~~payment in October 2019 and March 2020. At ~~September 30, 2022,~~March 31, 2023, $323 million ($323 million at December 31, ~~2021)~~2022) was included in "Other noncurrent obligations" in the Company's consolidated balance sheets related to the disputed portion of the damages judgment.

~~Brazilian Tax Credits~~

In March 2017, the Federal Supreme Court of Brazil (“Brazil Supreme Court”) ruled in a leading case that a Brazilian value-added tax ("ICMS") should not be included in the base used to calculate a taxpayer's federal contribution on total revenue known as PIS/COFINS (the “2017 Decision”). Previously, three of the Company’s Brazilian subsidiaries filed lawsuits challenging the inclusion of ICMS in their calculation of PIS/COFINS, seeking recovery of excess taxes paid. In response to the 2017 Decision, the Brazilian tax authority filed an appeal seeking clarification of the amount of ICMS tax to exclude from the calculation of PIS/COFINS. In May 2021, the Brazil Supreme Court ruled in a leading case related to the amount of ICMS tax to exclude from the calculation of PIS/COFINS, which resolved two of the lawsuits filed by the Company and, in May 2022, a court decision related to the remaining lawsuit, ruling in favor of the Company's Brazilian subsidiary, became final and unappealable. As a result, the Company recorded pretax gains of $112 million in the second quarter of 2022 and $61 million in the second quarter of 2021 for certain excess PIS/COFINS paid from 2009 to 2019, plus applicable interest, which the Company expects to apply to future required federal tax payments, and the reversal of related liabilities. The pretax gains were recorded in “Cost of sales” in the consolidated statements of income. At September 30, 2022, related tax credits available and expected to be applied to future required federal tax payments totaled $129 million ($52 million at December 31, 2021).

~~Guarantees~~

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

Guarantees Sep 30, 2022 Dec 31, 2021
In millions Final
Expiration
Maximum
Future Payments 1
Recorded Liability Final
Expiration
Maximum
Future Payments 1
Recorded Liability
Guarantees 2038 $ 1,249 $ 205 2038 $ 1,273 $ 220

1.In addition, TDCC has provided guarantees, in proportion to the Company's 35 percent ownership interest, of all future interest payments that will become due on Sadara’s project financing debt during the grace period, which Dow's share is estimated to be $480 million at September 30, 2022 ($446 million at December 31, 2021). Based on Sadara's current forecasted cash flows, the Company does not expect to be required to perform under the guarantees.

Guarantees arise during the ordinary course of business from relationships with customers, committed accounts receivable facilities and nonconsolidated affiliates when the Company undertakes an obligation to guarantee the performance of others (via delivery of cash or other assets) if specified triggering events occur. With guarantees, such as commercial or financial contracts, non-performance by the guaranteed party triggers the obligation of the Company to make payments to the beneficiary of the guarantee. The majority of the Company’s guarantees relate to debt of nonconsolidated affiliates, which have expiration dates ranging from less than 1 year to 16 years. The Company’s current expectation is that future payment or performance related to the non-performance of others is considered remote.

TDCC has entered into guarantee agreements related to Sadara, a nonconsolidated affiliate. Sadara reached an agreement with its lenders to re-profile its outstanding project financing debt in the first quarter of 2021. In conjunction with the debt re-profiling, TDCC entered into a guarantee of up to approximately $1.3 billion of Sadara’s debt, proportionate to the Company's 35 percent ownership interest. The debt re-profiling also includes a grace period until June 2026, during which Sadara is obligated to make interest-only payments which are guaranteed by TDCC in proportion to the Company’s 35 percent ownership interest. As part of the debt re-profiling, Sadara established a $500 million revolving credit facility guaranteed by Dow, which would be used to fund Dow’s pro-rata share of any potential shortfall during the grace period. Based on Sadara's forecasted cash flows and no significant scheduled debt repayments until 2026, the Company does not expect Sadara to draw on the facility.

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NOTE 149 - LEASES

For additional information on the Company's leases, see Note 1716 to the Consolidated Financial Statements included in the ~~2021~~2022 10-K.

The components of lease cost for operating and finance leases for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~ were as follows:


Lease Cost	Lease Cost	Three Months Ended				Nine Months Ended				Lease Cost	Three Months Ended
In millions	In millions	Sep 30, 2022		Sep 30, 2021		Sep 30, 2022		Sep 30, 2021		In millions	Mar 31, 2023		Mar 31, 2022
Operating lease cost	Operating lease cost	$	98	$	123	$	294	$	362	Operating lease cost	$	98	$	97
Finance lease cost	Finance lease cost									Finance lease cost
Amortization of right-of-use assets - finance	Amortization of right-of-use assets - finance	$	28	$	19	$	80	$	53	Amortization of right-of-use assets - finance	$	26	$	26
Interest on lease liabilities - finance	Interest on lease liabilities - finance	8		6		25		19		Interest on lease liabilities - finance	8		8
Total finance lease cost	Total finance lease cost	$	36	$	25	$	105	$	72	Total finance lease cost	$	34	$	34
Short-term lease cost	Short-term lease cost	69		57		194		177		Short-term lease cost	66		59
Variable lease cost	Variable lease cost	164		78		412		228		Variable lease cost	181		115
Sublease income	Sublease income	(2)		(2)		(8)		(5)		Sublease income	(2)		(3)
Total lease cost	Total lease cost	$	365	$	281	$	997	$	834	Total lease cost	$	377	$	302

The following table provides supplemental cash flow and other information related to leases:


Other Lease Information	Other Lease Information	Nine Months Ended				Other Lease Information	Three Months Ended
In millions	In millions	Sep 30, 2022		Sep 30, 2021		In millions	Mar 31, 2023		Mar 31, 2022
Cash paid for amounts included in the measurement of lease liabilities:	Cash paid for amounts included in the measurement of lease liabilities:					Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	Operating cash flows for operating leases	$	289	$	364	Operating cash flows for operating leases	$	105	$	101
Operating cash flows for finance leases	Operating cash flows for finance leases	$	25	$	19	Operating cash flows for finance leases	$	8	$	8
Financing cash flows for finance leases	Financing cash flows for finance leases	$	79	$	48	Financing cash flows for finance leases	$	28	$	22
Right-of-use assets obtained in exchange for lease obligations:	Right-of-use assets obtained in exchange for lease obligations:					Right-of-use assets obtained in exchange for lease obligations:
Operating leases	Operating leases	$	93	$	133	Operating leases	$	99	$	16
Finance leases	Finance leases	$	44	$	73	Finance leases	$	6	$	17

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~~The following table summarizes the lease-related assets and liabilities recorded in the consolidated balance sheets at September 30, 2022 and December 31, 2021:~~

Lease Position Balance Sheet Classification Sep 30, 2022 Dec 31, 2021
In millions
Assets
Operating lease assets Operating lease right-of-use assets $ 1,231 $ 1,412
Finance lease assets Property 1,145 1,158
Finance lease amortization Accumulated depreciation (418) (368)
Total lease assets $ 1,958 $ 2,202
Liabilities
Current
Operating Operating lease liabilities - current $ 277 $ 314
Finance Long-term debt due within one year 110 106
Noncurrent
Operating Operating lease liabilities - noncurrent 1,012 1,149
Finance Long-Term Debt 694 763
Total lease liabilities $ 2,093 $ 2,332

~~The weighted-average remaining lease term and discount rate for leases recorded in the consolidated balance sheets at September 30, 2022 and December 31, 2021 are provided below:~~

Lease Term and Discount Rate Sep 30, 2022 Dec 31, 2021
Weighted-average remaining lease term
Operating leases 7.7 years 7.9 years
Finance leases 11.1 years 11.8 years
Weighted-average discount rate
Operating leases 4.21 % 3.72 %
Finance leases 4.19 % 4.17 %

~~The following table provides the maturities of lease liabilities at September 30, 2022:~~

Maturities of Lease Liabilities Sep 30, 2022
In millions Operating Leases Finance Leases
2022 $ 93 $ 40
2023 298 166
2024 230 109
2025 186 76
2026 151 70
2027 and thereafter 590 545
Total future undiscounted lease payments $ 1,548 $ 1,006
Less: Imputed interest 259 202
Total present value of lease liabilities $ 1,289 $ 804

At September 30, 2022, Dow had additional leases of approximately $85 million, primarily for equipment, which had not yet commenced. These leases are expected to commence in 2022 and 2025, with lease terms of up to 16 years.

~~Table of Contents~~

Dow provides guarantees related to certain leased assets, specifying the residual value that will be available to the lessor at lease termination through the sale of the assets to the lessee or third parties. The following table provides a summary of the final expiration, maximum future payments and recorded liability included in the consolidated balance sheets for residual value guarantees at September 30, 2022 and December 31, 2021. The lease agreements do not contain any material restrictive covenants.

Lease Guarantees Sep 30, 2022 Dec 31, 2021
In millions Final Expiration Maximum Future Payments Recorded Liability Final Expiration Maximum Future Payments Recorded Liability
Residual value guarantees 2031 $ 245 $ — 2031 $ 280 $ —

NOTE 1510 – ~~STOCKHOLDERS' EQUITY~~

~~Treasury Stock~~

~~Dow Inc.~~

The Company began issuing treasury shares to satisfy its obligation to make matching contributions to plan participants under The Dow Employees’ Savings Plan in the first quarter of 2022. The Company may satisfy these obligations using shares of Dow Inc. treasury stock or by issuing new shares of common stock.

~~Table of Contents~~

~~Accumulated Other Comprehensive Loss~~ACCUMULATED OTHER COMPREHENSIVE LOSS

The changes in each component of accumulated other comprehensive loss ("AOCL") for the three ~~and nine~~months ended ~~September 30, 2022~~March 31, 2023 and ~~2021~~2022 were as follows:


Accumulated Other Comprehensive Loss	Accumulated Other Comprehensive Loss	Three Months Ended				Nine Months Ended				Accumulated Other Comprehensive Loss	Three Months Ended
In millions	In millions	Sep 30, 2022		Sep 30, 2021		Sep 30, 2022		Sep 30, 2021		In millions	Mar 31, 2023		Mar 31, 2022
Unrealized Gains (Losses) on Investments	Unrealized Gains (Losses) on Investments									Unrealized Gains (Losses) on Investments
Beginning balance	Beginning balance	$	(190)	$	72	$	59	$	104	Beginning balance	$	(253)	$	59
Unrealized gains (losses) on investments	Unrealized gains (losses) on investments	(61)		(10)		(385)		(25)		Unrealized gains (losses) on investments	30		(121)
Tax (expense) benefit	Tax (expense) benefit	(55)		3		12		5		Tax (expense) benefit	—		24
Net unrealized gains (losses) on investments	Net unrealized gains (losses) on investments	(116)		(7)		(373)		(20)		Net unrealized gains (losses) on investments	30		(97)
(Gains) losses reclassified from AOCL to net income 1		(8)		(8)		2		(33)
(Gains) losses reclassified from AOCL to net income (loss) 1										(Gains) losses reclassified from AOCL to net income (loss) 1	1		1
Tax expense (benefit) 2	Tax expense (benefit) 2	2		2		—		8		Tax expense (benefit) 2	—		—
Net (gains) losses reclassified from AOCL to net income		(6)		(6)		2		(25)
Net (gains) losses reclassified from AOCL to net income (loss)										Net (gains) losses reclassified from AOCL to net income (loss)	1		1
Other comprehensive income (loss), net of tax	Other comprehensive income (loss), net of tax	(122)		(13)		(371)		(45)		Other comprehensive income (loss), net of tax	31		(96)
Ending balance	Ending balance	$	(312)	$	59	$	(312)	$	59	Ending balance	$	(222)	$	(37)
Cumulative Translation Adjustment	Cumulative Translation Adjustment									Cumulative Translation Adjustment
Beginning balance	Beginning balance	$	(2,033)	$	(1,118)	$	(1,355)	$	(930)	Beginning balance	$	(1,934)	$	(1,355)
Gains (losses) on foreign currency translation	Gains (losses) on foreign currency translation	(369)		(148)		(1,034)		(298)		Gains (losses) on foreign currency translation	84		(165)
Tax (expense) benefit	Tax (expense) benefit	(17)		(8)		(7)		(43)		Tax (expense) benefit	2		13
Net gains (losses) on foreign currency translation	Net gains (losses) on foreign currency translation	(386)		(156)		(1,041)		(341)		Net gains (losses) on foreign currency translation	86		(152)
(Gains) losses reclassified from AOCL to net income 3		(17)		(1)		(40)		(4)
(Gains) losses reclassified from AOCL to net income (loss) 3										(Gains) losses reclassified from AOCL to net income (loss) 3	15		(12)
Other comprehensive income (loss), net of tax	Other comprehensive income (loss), net of tax	(403)		(157)		(1,081)		(345)		Other comprehensive income (loss), net of tax	101		(164)
Ending balance	Ending balance	$	(2,436)	$	(1,275)	$	(2,436)	$	(1,275)	Ending balance	$	(1,833)	$	(1,519)
Pension and Other Postretirement Benefits	Pension and Other Postretirement Benefits									Pension and Other Postretirement Benefits
Beginning balance	Beginning balance	$	(7,103)	$	(8,276)	$	(7,334)	$	(9,559)	Beginning balance	$	(4,877)	$	(7,334)
Gains (losses) arising during the period 4		6		2		11		1,270
Tax (expense) benefit		—		—		—		(298)
Net gains (losses) arising during the period		6		2		11		972
Amortization of net loss and prior service credits reclassified from AOCL to net income 5		155		191		468		583
Gains (losses) arising during the period										Gains (losses) arising during the period	2		2

Amortization of net loss and prior service credits reclassified from AOCL to net income (loss) 4										Amortization of net loss and prior service credits reclassified from AOCL to net income (loss) 4	3		157
Tax expense (benefit) 2	Tax expense (benefit) 2	(36)		(44)		(123)		(123)		Tax expense (benefit) 2	1		(50)
Net loss and prior service credits reclassified from AOCL to net income		119		147		345		460
Net loss and prior service credits reclassified from AOCL to net income (loss)										Net loss and prior service credits reclassified from AOCL to net income (loss)	4		107
Other comprehensive income (loss), net of tax	Other comprehensive income (loss), net of tax	125		149		356		1,432		Other comprehensive income (loss), net of tax	6		109
Ending balance	Ending balance	$	(6,978)	$	(8,127)	$	(6,978)	$	(8,127)	Ending balance	$	(4,871)	$	(7,225)
Derivative Instruments	Derivative Instruments									Derivative Instruments
Beginning balance	Beginning balance	$	122	$	(354)	$	(347)	$	(470)	Beginning balance	$	(75)	$	(347)
Gains (losses) on derivative instruments	Gains (losses) on derivative instruments	122		55		802		167		Gains (losses) on derivative instruments	(183)		420
Tax (expense) benefit	Tax (expense) benefit	(31)		(9)		(114)		(10)		Tax (expense) benefit	33		(56)
Net gains (losses) on derivative instruments	Net gains (losses) on derivative instruments	91		46		688		157		Net gains (losses) on derivative instruments	(150)		364
(Gains) losses reclassified from AOCL to net income 6		(80)		(16)		(222)		(10)
(Gains) losses reclassified from AOCL to net income (loss) 5										(Gains) losses reclassified from AOCL to net income (loss) 5	109		(34)
Tax expense (benefit) 2	Tax expense (benefit) 2	11		2		25		1		Tax expense (benefit) 2	(23)		2
Net (gains) losses reclassified from AOCL to net income		(69)		(14)		(197)		(9)
Net (gains) losses reclassified from AOCL to net income (loss)										Net (gains) losses reclassified from AOCL to net income (loss)	86		(32)
Other comprehensive income (loss), net of tax	Other comprehensive income (loss), net of tax	22		32		491		148		Other comprehensive income (loss), net of tax	(64)		332
Ending balance	Ending balance	$	144	$	(322)	$	144	$	(322)	Ending balance	$	(139)	$	(15)
Total AOCL ending balance	Total AOCL ending balance	$	(9,582)	$	(9,665)	$	(9,582)	$	(9,665)	Total AOCL ending balance	$	(7,065)	$	(8,796)

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

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

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

4.~~The 2021 impact relates to an interim remeasurement of U.S. pension plans due to the announced freeze of plan benefits in the first quarter of 2021.~~

5.These AOCL components are included in the computation of net periodic benefit cost (credit) of the Company's defined benefit pension and other postretirement benefit plans. See Note 1712 for additional information.

6.5.Reclassified to "Cost of sales," "Sundry income (expense) - net" and "Interest expense and amortization of debt discount."

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NOTE 1611 – NONCONTROLLING INTERESTS

Ownership interests in the Company's subsidiaries held by parties other than the Company are presented separately from the Company's equity in the consolidated balance sheets as "Noncontrolling interests." The amount of consolidated net income attributable to the Company and the noncontrolling interests are both presented on the face of the consolidated statements of income.

The following table summarizes the activity for equity attributable to noncontrolling interests for the three ~~and nine~~ months ended ~~September 30, 2022~~March 31, 2023 and ~~2021:~~2022:


Noncontrolling Interests	Noncontrolling Interests	Three Months Ended				Nine Months Ended				Noncontrolling Interests	Three Months Ended
In millions	In millions	Sep 30, 2022		Sep 30, 2021		Sep 30, 2022		Sep 30, 2021		In millions	Mar 31, 2023		Mar 31, 2022
Balance at beginning of period	Balance at beginning of period	$	534	$	580	$	574	$	570	Balance at beginning of period	$	529	$	574
Net income attributable to noncontrolling interests 1		21		23		24		69
Net income (loss) attributable to noncontrolling interests 1										Net income (loss) attributable to noncontrolling interests 1	20		(17)

Distributions to noncontrolling interests 2		(20)		(7)		(35)		(27)
Distributions to noncontrolling interests										Distributions to noncontrolling interests	(13)		(1)

Cumulative translation adjustments	Cumulative translation adjustments	(24)		(8)		(51)		(23)		Cumulative translation adjustments	(3)		(11)
Other	Other	1		1		—		—		Other	1		—
Balance at end of period	Balance at end of period	$	512	$	589	$	512	$	589	Balance at end of period	$	534	$	545

1.The ~~nine months ended September 30,~~first quarter of 2022 includes the portion of asset related charges attributable to noncontrolling interests related to a joint venture in Russia. See Note 54 for additional information.

2.Distributions to noncontrolling interests are net of $7 million for the three and nine months ended September 30, 2022 ($8 million for the three and nine months ended September 30, 2021) in dividends paid to a joint venture, which were reclassified to "Equity in earnings (losses) of nonconsolidated affiliates" in the consolidated statements of income.

~~Table of Contents~~

NOTE 1712 – PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS

A summary of the Company's pension and other postretirement benefit plans can be found in Note 2019 to the Consolidated Financial Statements included in the ~~2021~~2022 10-K.

The Company's funding policy is to contribute to defined benefit pension plans in the United States and a number of other countries when pension laws and/or economics either require or encourage funding. The Company expects to contribute approximately $250 million to its pension plans in 2022, of which $156 million has been contributed through September 30, 2022.

The following table provides the components of the Company's net periodic benefit cost (credit) for all significant plans:


Net Periodic Benefit Cost for All Significant Plans		Three Months Ended				Nine Months Ended
Net Periodic Benefit Cost (Credit) for All Significant Plans										Net Periodic Benefit Cost (Credit) for All Significant Plans	Three Months Ended
In millions	In millions	Sep 30, 2022		Sep 30, 2021		Sep 30, 2022		Sep 30, 2021		In millions		Mar 31, 2023		Mar 31, 2022
Defined Benefit Pension Plans	Defined Benefit Pension Plans									Defined Benefit Pension Plans
Service cost	Service cost	$	97	$	95	$	295	$	293	Service cost		$	70	$	99
Interest cost	Interest cost	170		151		512		444		Interest cost		279		171
Expected return on plan assets	Expected return on plan assets	(420)		(434)		(1,267)		(1,291)		Expected return on plan assets		(389)		(424)
Amortization of prior service credit	Amortization of prior service credit	(5)		(5)		(16)		(15)		Amortization of prior service credit		(7)		(6)
Amortization of net loss	Amortization of net loss	163		198		495		622		Amortization of net loss		24		167
Curtailment gain		—		—		—		(19)
Net periodic benefit cost		$	5	$	5	$	19	$	34

Net periodic benefit cost (credit)										Net periodic benefit cost (credit)		$	(23)	$	7

Other Postretirement Benefit Plans	Other Postretirement Benefit Plans									Other Postretirement Benefit Plans
Service cost	Service cost	$	1	$	2	$	4	$	6	Service cost		$	1	$	1
Interest cost	Interest cost	6		6		20		17		Interest cost		11		7
Amortization of net gain	Amortization of net gain	(3)		(2)		(11)		(5)		Amortization of net gain		(14)		(4)

Net periodic benefit cost		$	4	$	6	$	13	$	18
Net periodic benefit cost (credit)										Net periodic benefit cost (credit)		$	(2)	$	4

Net periodic benefit cost (credit), other than the service cost component, is included in "Sundry income (expense) - net" in the consolidated statements of income.

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NOTE 1813 – STOCK-BASED COMPENSATION

A summary of the Company's stock-based compensation plans can be found in Note 2120 to the Consolidated Financial Statements included in the ~~2021~~2022 10-K.

Stock Incentive Plan

The Company grants stock-based compensation to employees and non-employee directors under the 2019 Stock Incentive Plan, as amended. Most of the Company's stock-based compensation awards are granted in the first quarter of each year.

In the first quarter of ~~2022,~~2023, Dow Inc. granted the following stock-based compensation awards to employees:

•~~1.2~~1.1 million stock options with a weighted-average exercise price of ~~$60.95~~$59.08 per share and a weighted-average fair value of ~~$11.08~~$12.13 per share;

•~~1.7~~1.8 million restricted stock units with a weighted-average fair value of ~~$60.96~~$59.03 per share; and

•1.2 million performance stock units with a weighted-average fair value of ~~$65.83~~$64.04 per share.

~~There was minimal grant activity in the second and third quarters of 2022.~~

Employee Stock Purchase Plan

The Dow Inc. 2021 Employee Stock Purchase Plan (the "2021 ESPP") was adopted by the Dow Inc. Board on February 11, 2021, and approved by stockholders at the Company's annual meeting on April 15, 2021. Under the ~~2022~~2023 annual offering of the 2021 ESPP, most employees ~~were~~will be eligible to purchase shares of common stock of Dow Inc. valued at up to 10 percent of their annual total base salary or wages. The number of shares purchased is determined using the amount contributed by the employee divided by the plan price. The plan price of the stock is equal to 85 percent of the fair market value (closing price) of the common stock at ~~April~~May 1, ~~2022~~2023 (beginning) or ~~October 7, 2022~~November 3, 2023 (ending) of the offering period, whichever is lower.

~~In the first quarter of 2022, employees subscribed to the right to purchase approximately 2.7 million shares under the 2021 ESPP. The shares were delivered to employees in October 2022.~~

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NOTE 1914 – FINANCIAL INSTRUMENTS

A summary of the Company's financial instruments, risk management policies, derivative instruments and hedging activities can be found in Note 2221 to the Consolidated Financial Statements included in the ~~2021~~2022 10-K.

The following table summarizes the fair value of financial instruments at ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021:~~2022:


Fair Value of Financial Instruments	Fair Value of Financial Instruments	Sep 30, 2022								Dec 31, 2021								Fair Value of Financial Instruments	Mar 31, 2023								Dec 31, 2022
In millions	In millions	Cost		Gain		Loss		Fair Value		Cost		Gain		Loss		Fair Value		In millions	Cost		Gain		Loss		Fair Value		Cost		Gain		Loss		Fair Value
Cash equivalents:	Cash equivalents:																	Cash equivalents:
Held-to-maturity securities 1	Held-to-maturity securities 1	$	327	$	—	$	—	$	327	$	317	$	—	$	—	$	317	Held-to-maturity securities 1	$	714	$	—	$	—	$	714	$	872	$	—	$	—	$	872
Money market funds	Money market funds	735		—		—		735		489		—		—		489		Money market funds	1,273		—		—		1,273		355		—		—		355
Total cash equivalents	Total cash equivalents	$	1,062	$	—	$	—	$	1,062	$	806	$	—	$	—	$	806	Total cash equivalents	$	1,987	$	—	$	—	$	1,987	$	1,227	$	—	$	—	$	1,227
Marketable securities 2	Marketable securities 2	$	136	$	12	$	—	$	148	$	237	$	8	$	—	$	245	Marketable securities 2	$	610	$	9	$	—	$	619	$	927	$	12	$	—	$	939
Other investments:	Other investments:																	Other investments:
Debt securities:	Debt securities:																	Debt securities:
Government debt 3	Government debt 3	$	744	$	1	$	(155)	$	590	$	746	$	17	$	(28)	$	735	Government debt 3	$	762	$	1	$	(122)	$	641	$	754	$	1	$	(133)	$	622
Corporate bonds	Corporate bonds	1,268		5		(188)		1,085		1,251		93		(20)		1,324		Corporate bonds	1,272		9		(134)		1,147		1,274		10		(159)		1,125
Total debt securities	Total debt securities	$	2,012	$	6	$	(343)	$	1,675	$	1,997	$	110	$	(48)	$	2,059	Total debt securities	$	2,034	$	10	$	(256)	$	1,788	$	2,028	$	11	$	(292)	$	1,747
Equity securities 4	Equity securities 4	4		6		—		10		7		13		—		20		Equity securities 4	5		13		—		18		5		5		—		10
Total other investments	Total other investments	$	2,016	$	12	$	(343)	$	1,685	$	2,004	$	123	$	(48)	$	2,079	Total other investments	$	2,039	$	23	$	(256)	$	1,806	$	2,033	$	16	$	(292)	$	1,757
Total cash equivalents, marketable securities and other investments	Total cash equivalents, marketable securities and other investments	$	3,214	$	24	$	(343)	$	2,895	$	3,047	$	131	$	(48)	$	3,130	Total cash equivalents, marketable securities and other investments	$	4,636	$	32	$	(256)	$	4,412	$	4,187	$	28	$	(292)	$	3,923
Long-term debt including debt due within one year 5	Long-term debt including debt due within one year 5	$	(13,285)	$	1,996	$	(333)	$	(11,622)	$	(14,511)	$	27	$	(2,641)	$	(17,125)	Long-term debt including debt due within one year 5	$	(14,986)	$	1,389	$	(642)	$	(14,239)	$	(15,060)	$	1,683	$	(498)	$	(13,875)
Derivatives relating to:	Derivatives relating to:																	Derivatives relating to:
Interest rates 6	Interest rates 6	$	—	$	198	$	—	$	198	$	—	$	1	$	(140)	$	(139)	Interest rates 6	$	—	$	2	$	—	$	2	$	—	$	105	$	—	$	105
Foreign currency	Foreign currency	—		189		(158)		31		—		46		(18)		28		Foreign currency	—		66		(17)		49		—		115		(30)		85
Commodities 6	Commodities 6	—		274		(100)		174		—		142		(92)		50		Commodities 6	—		24		(30)		(6)		—		72		(61)		11
Total derivatives	Total derivatives	$	—	$	661	$	(258)	$	403	$	—	$	189	$	(250)	$	(61)	Total derivatives	$	—	$	92	$	(47)	$	45	$	—	$	292	$	(91)	$	201

1.The Company's held-to-maturity securities primarily included treasury bills and time deposits.

2.The Company’s investments in marketable securities are included in “Other current assets” in the consolidated balance sheets.

3.U.S. Treasury obligations, U.S. agency obligations, U.S. agency mortgage-backed securities and other municipalities’ obligations.

4.Equity securities with a readily determinable fair value.

5.Cost includes fair value hedge adjustment gains of ~~$47~~$49 million at ~~September 30, 2022~~March 31, 2023 and $46 million at December 31, ~~2021~~2022 on $2,729 million of debt at March 31, 2023 and $2,279 million of debt at ~~September 30, 2022 and~~ December 31, ~~2021.~~2022.

6.Presented net of cash collateral where master netting arrangements allow.

Cost approximates fair value for all other financial instruments.

Debt Securities

The Company's investments in debt securities are primarily classified as available-for-sale. The following table provides investing results from available-for-sale securities for the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 and ~~2021:~~2022:


Investing Results	Investing Results	Nine Months Ended				Investing Results	Three Months Ended
In millions	In millions	Sep 30, 2022		Sep 30, 2021		In millions	Mar 31, 2023		Mar 31, 2022
Proceeds from sales of available-for-sale securities	Proceeds from sales of available-for-sale securities	$	449	$	339	Proceeds from sales of available-for-sale securities	$	146	$	113
Gross realized gains	Gross realized gains	$	40	$	41	Gross realized gains	$	8	$	12
Gross realized losses	Gross realized losses	$	(42)	$	(8)	Gross realized losses	$	(9)	$	(13)

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The following table summarizes contractual maturities of the Company's investments in debt securities:

Contractual Maturities of Debt Securities at Sep 30, 2022 1
Cost Fair Value
In millions
Within one year $ 71 $ 66
One to five years 706 627
Six to ten years 710 581
After ten years 525 401
Total $ 2,012 $ 1,675

1.~~Includes marketable securities with maturities of less than one year.~~


Contractual Maturities of Debt Securities at Mar 31, 2023	Cost		Fair Value
In millions
Within one year	$	78	$	76
One to five years	894		814
Six to ten years	550		479
After ten years	512		419
Total	$	2,034	$	1,788

Equity Securities

There were no material adjustments to the carrying value of the not readily determinable investments for impairment or observable price changes for the three months ended ~~September 30, 2022.~~March 31, 2023. There was $2$8 million of net unrealized ~~losses~~gains recognized in earnings on equity securities for the three months ended ~~September 30, 2022~~March 31, 2023 ($63 million net unrealized loss for the three months ended September 30, 2021). There was $8 million of net unrealized losses recognized in earnings on equity securities for the nine months ended September 30, 2022 ($7 million net unrealized loss for the nine months ended September 30, 2021)March 31, 2022).


Investments in Equity Securities	Investments in Equity Securities	Sep 30, 2022		Dec 31, 2021		Investments in Equity Securities	Mar 31, 2023		Dec 31, 2022
In millions	In millions					In millions
Readily determinable fair value	Readily determinable fair value	$	10	$	20	Readily determinable fair value	$	18	$	10
Not readily determinable fair value	Not readily determinable fair value	$	191	$	209	Not readily determinable fair value	$	178	$	186

Derivative Instruments

The notional amounts of the Company's derivative instruments ~~presented on a net basis~~ at ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022 were as follows:


Notional Amounts - Net		Sep 30, 2022		Dec 31, 2021
Notional Amounts 1						Notional Amounts 1	Mar 31, 2023		Dec 31, 2022
In millions	In millions	Sep 30, 2022		Dec 31, 2021		In millions
Derivatives designated as hedging instruments:	Derivatives designated as hedging instruments:					Derivatives designated as hedging instruments:
Interest rate contracts	Interest rate contracts	$	3,000	$	3,000	Interest rate contracts	$	450	$	1,500
Foreign currency contracts	Foreign currency contracts	$	13,131	$	5,300	Foreign currency contracts	$	2,141	$	2,408
Derivatives not designated as hedging instruments:	Derivatives not designated as hedging instruments:					Derivatives not designated as hedging instruments:
Interest rate contracts	Interest rate contracts	$	10	$	36	Interest rate contracts	$	46	$	3
Foreign currency contracts	Foreign currency contracts	$	15,743	$	8,234	Foreign currency contracts	$	12,150	$	8,837

1.Notional amounts represent the absolute value of open derivative positions at the end of the period. Multi-leg option positions are reflected at the maximum notional position at expiration.

The notional amounts of the Company's commodity derivatives ~~presented on a net basis~~ at ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022 were as follows:

Commodity Notionals - Net

Sep 30, 2022

Dec 31, 2021

Notional Volume Unit

Commodity Notionals 1

Mar 31, 2023

Dec 31, 2022

Notional Volume Unit

Derivatives designated as hedging instruments:

Hydrocarbon derivatives

13.5

9.7

million barrels of oil equivalent

Hydrocarbon derivatives

8.5

19.2

million barrels of oil equivalent

Derivatives not designated as hedging instruments:

Hydrocarbon derivatives

—

0.1

million barrels of oil equivalent

Hydrocarbon derivatives

1.0

—

million barrels of oil equivalent

Power derivatives

—

3.3

thousands of megawatt hours

Power derivatives

21.3

—

thousands of megawatt hours

1.Notional amounts represent the net volume of open derivative positions outstanding at the end of the period.

~~Table of Contents~~


Maturity Dates of Derivatives Designated as Hedging Instruments			Year
Interest rate contracts			~~2023~~2024
Foreign currency contracts			~~2023~~2024
Commodity contracts			2026

Table of Contents

The following tables provide the fair value and balance sheet classification of derivative instruments at ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021:~~2022:


Fair Value of Derivative Instruments	Fair Value of Derivative Instruments		Sep 30, 2022						Fair Value of Derivative Instruments		Mar 31, 2023
In millions	In millions	Balance Sheet Classification	Gross		Counterparty and Cash Collateral Netting 1		Net Amounts Included in the Consolidated Balance Sheets		In millions	Balance Sheet Classification	Gross		Counterparty and Cash Collateral Netting 1		Net Amounts Included in the Consolidated Balance Sheets
Asset derivatives	Asset derivatives								Asset derivatives
Derivatives designated as hedging instruments:	Derivatives designated as hedging instruments:								Derivatives designated as hedging instruments:

Interest rate contracts	Interest rate contracts	Other current assets	$	657	$	(459)	$	198	Interest rate contracts	Deferred charges and other assets	$	37	$	(35)	$	2

Foreign currency contracts	Foreign currency contracts	Other current assets	862		(700)		162		Foreign currency contracts	Other current assets	32		(32)		—

Commodity contracts	Commodity contracts	Other current assets	478		(225)		253		Commodity contracts	Other current assets	87		(65)		22
Commodity contracts		Deferred charges and other assets	7		—		7

Total	Total		$	2,004	$	(1,384)	$	620	Total		$	156	$	(132)	$	24
Derivatives not designated as hedging instruments:	Derivatives not designated as hedging instruments:								Derivatives not designated as hedging instruments:

Interest rate contracts									Interest rate contracts	Other current assets	$	2	$	(2)	$	—

Foreign currency contracts	Foreign currency contracts	Other current assets	$	110	$	(83)	$	27	Foreign currency contracts	Other current assets	90		(24)		66

Commodity contracts	Commodity contracts	Other current assets	34		(20)		14		Commodity contracts	Other current assets	2		—		2

Total	Total		$	144	$	(103)	$	41	Total		$	94	$	(26)	$	68
Total asset derivatives	Total asset derivatives		$	2,148	$	(1,487)	$	661	Total asset derivatives		$	250	$	(158)	$	92

Liability derivatives	Liability derivatives								Liability derivatives
Derivatives designated as hedging instruments:	Derivatives designated as hedging instruments:								Derivatives designated as hedging instruments:

Interest rate contracts	Interest rate contracts	Accrued and other current liabilities	$	459	$	(459)	$	—	Interest rate contracts	Other noncurrent obligations	$	35	$	(35)	$	—

Foreign currency contracts	Foreign currency contracts	Accrued and other current liabilities	723		(700)		23		Foreign currency contracts	Accrued and other current liabilities	41		(32)		9

Commodity contracts	Commodity contracts	Accrued and other current liabilities	335		(245)		90		Commodity contracts	Accrued and other current liabilities	147		(119)		28
Commodity contracts		Other noncurrent obligations	1		(1)		—

Total	Total		$	1,518	$	(1,405)	$	113	Total		$	223	$	(186)	$	37
Derivatives not designated as hedging instruments:	Derivatives not designated as hedging instruments:								Derivatives not designated as hedging instruments:

Interest rate contracts									Interest rate contracts	Accrued and other current liabilities	$	2	$	(2)	$	—

Foreign currency contracts	Foreign currency contracts	Accrued and other current liabilities	$	218	$	(83)	$	135	Foreign currency contracts	Accrued and other current liabilities	32		(24)		8

Commodity contracts	Commodity contracts	Accrued and other current liabilities	31		(21)		10		Commodity contracts	Accrued and other current liabilities	2		—		2

Total	Total		$	249	$	(104)	$	145	Total		$	36	$	(26)	$	10
Total liability derivatives	Total liability derivatives		$	1,767	$	(1,509)	$	258	Total liability derivatives		$	259	$	(212)	$	47

1.Counterparty and cash collateral amounts represent the estimated net settlement amount when applying netting and set-off rights included in master netting arrangements between the Company and its counterparties and the payable or receivable for cash collateral held or placed with the same counterparty.

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Fair Value of Derivative Instruments	Fair Value of Derivative Instruments		Dec 31, 2021						Fair Value of Derivative Instruments		Dec 31, 2022
In millions	In millions	Balance Sheet Classification	Gross		Counterparty and Cash Collateral Netting 1		Net Amounts Included in the Consolidated Balance Sheets		In millions	Balance Sheet Classification	Gross		Counterparty and Cash Collateral Netting 1		Net Amounts Included in the Consolidated Balance Sheets
Asset derivatives	Asset derivatives								Asset derivatives
Derivatives designated as hedging instruments:	Derivatives designated as hedging instruments:								Derivatives designated as hedging instruments:
Interest rate contracts	Interest rate contracts	Other current assets	$	14	$	(14)	$	—	Interest rate contracts	Other current assets	$	351	$	(246)	$	105
Interest rate contracts		Deferred charges and other assets	130		(130)		—

Foreign currency contracts	Foreign currency contracts	Other current assets	24		(13)		11		Foreign currency contracts	Other current assets	58		(39)		19
Foreign currency contracts		Deferred charges and other assets	117		(89)		28

Commodity contracts	Commodity contracts	Other current assets	305		(173)		132		Commodity contracts	Other current assets	199		(148)		51
Commodity contracts		Deferred charges and other assets	9		(2)		7

Total	Total		$	599	$	(421)	$	178	Total		$	608	$	(433)	$	175
Derivatives not designated as hedging instruments:	Derivatives not designated as hedging instruments:								Derivatives not designated as hedging instruments:
Interest rate contracts		Other current assets	$	1	$	—	$	1

Foreign currency contracts	Foreign currency contracts	Other current assets	23		(16)		7		Foreign currency contracts	Other current assets	$	146	$	(50)	$	96
Foreign currency contracts		Deferred charges and other assets	1		(1)		—

Commodity contracts	Commodity contracts	Other current assets	8		(5)		3		Commodity contracts	Other current assets	22		(1)		21

Total	Total		$	33	$	(22)	$	11	Total		$	168	$	(51)	$	117
Total asset derivatives	Total asset derivatives		$	632	$	(443)	$	189	Total asset derivatives		$	776	$	(484)	$	292

Liability derivatives	Liability derivatives								Liability derivatives
Derivatives designated as hedging instruments:	Derivatives designated as hedging instruments:								Derivatives designated as hedging instruments:
Interest rate contracts	Interest rate contracts	Accrued and other current liabilities	$	33	$	(14)	$	19	Interest rate contracts	Accrued and other current liabilities	$	246	$	(246)	$	—
Interest rate contracts		Other noncurrent obligations	192		(130)		62

Foreign currency contracts	Foreign currency contracts	Accrued and other current liabilities	15		(13)		2		Foreign currency contracts	Accrued and other current liabilities	58		(39)		19
Foreign currency contracts		Other noncurrent obligations	90		(89)		1

Commodity contracts	Commodity contracts	Accrued and other current liabilities	267		(192)		75		Commodity contracts	Accrued and other current liabilities	258		(198)		60
Commodity contracts		Other noncurrent obligations	2		(2)		—

Total	Total		$	599	$	(440)	$	159	Total		$	562	$	(483)	$	79
Derivatives not designated as hedging instruments:	Derivatives not designated as hedging instruments:								Derivatives not designated as hedging instruments:
Interest rate contracts		Accrued and other current liabilities	$	59	$	—	$	59

Foreign currency contracts	Foreign currency contracts	Accrued and other current liabilities	31		(16)		15		Foreign currency contracts	Accrued and other current liabilities	$	61	$	(50)	$	11
Foreign currency contracts		Other noncurrent obligations	1		(1)		—

Commodity contracts	Commodity contracts	Accrued and other current liabilities	25		(8)		17		Commodity contracts	Accrued and other current liabilities	12		(11)		1
Total	Total		$	116	$	(25)	$	91	Total		$	73	$	(61)	$	12
Total liability derivatives	Total liability derivatives		$	715	$	(465)	$	250	Total liability derivatives		$	635	$	(544)	$	91

Assets and liabilities related to forward contracts, interest rate swaps, currency swaps, options and other conditional or exchange contracts executed with the same counterparty under a master netting arrangement are netted. Collateral accounts are netted with corresponding assets or liabilities, when applicable. The Company posted cash collateral of ~~$54~~$77 million at ~~September 30, 2022~~March 31, 2023 ~~($71~~($80 million at December 31, ~~2021)~~2022). No cash collateral was posted by counterparties with the Company at ~~September 30, 2022 and~~March 31, 2023 ($2 million at December 31, ~~2021.~~2022).

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The following tables summarize the gain (loss) of derivative instruments in the consolidated statements of income and comprehensive income for the three ~~and nine~~ months ended ~~September 30, 2022~~March 31, 2023 and ~~2021:~~2022:


Effect of Derivative Instruments	Effect of Derivative Instruments	Amount of gain (loss) recognized in OCI 1				Amount of gain (loss) recognized in income 2				Income Statement Classification	Effect of Derivative Instruments	Amount of gain (loss) recognized in OCI 1				Amount of gain (loss) recognized in income 2				Income Statement Classification
		Three Months Ended				Three Months Ended						Three Months Ended				Three Months Ended
In millions	In millions	Sep 30, 2022		Sep 30, 2021		Sep 30, 2022		Sep 30, 2021			In millions	Mar 31, 2023		Mar 31, 2022		Mar 31, 2023		Mar 31, 2022
Derivatives designated as hedging instruments:	Derivatives designated as hedging instruments:										Derivatives designated as hedging instruments:
Fair value hedges:											Fair value hedges:

Excluded components 3											Excluded components 3	$	(1)	$	—	$	—	$	—	Interest expense and amortization of debt discount
Cash flow hedges:	Cash flow hedges:										Cash flow hedges:
Interest rate contracts	Interest rate contracts	$	24	$	5	$	(3)	$	(2)	Interest expense and amortization of debt discount	Interest rate contracts	5		99		(2)		(3)		Interest expense and amortization of debt discount
Foreign currency contracts	Foreign currency contracts	2		4		4		(3)		Cost of sales	Foreign currency contracts	—		2		2		3		Cost of sales

Commodity contracts	Commodity contracts	23		37		79		21		Cost of sales	Commodity contracts	(143)		207		(109)		34		Cost of sales
Net foreign investment hedges:	Net foreign investment hedges:										Net foreign investment hedges:
Foreign currency contracts	Foreign currency contracts	88		20		—		—			Foreign currency contracts	(9)		(2)		—		—
Excluded components 3	Excluded components 3	25		12		15		1		Sundry income (expense) - net	Excluded components 3	3		29		—		12		Sundry income (expense) - net
Total derivatives designated as hedging instruments	Total derivatives designated as hedging instruments	$	162	$	78	$	95	$	17		Total derivatives designated as hedging instruments	$	(145)	$	335	$	(109)	$	46
Derivatives not designated as hedging instruments:	Derivatives not designated as hedging instruments:										Derivatives not designated as hedging instruments:
Interest rate contracts	Interest rate contracts	$	—	$	—	$	—	$	(2)	Interest expense and amortization of debt discount	Interest rate contracts	$	—	$	—	$	—	$	(1)	Interest expense and amortization of debt discount
Foreign currency contracts	Foreign currency contracts	—		—		(255)		(84)		Sundry income (expense) - net	Foreign currency contracts	—		—		35		(85)		Sundry income (expense) - net
Commodity contracts	Commodity contracts	—		—		10		(12)		Cost of sales	Commodity contracts	—		—		—		22		Cost of sales
Total return swap											Total return swap	—		—		(7)		—		Cost of sales
Total derivatives not designated as hedging instruments	Total derivatives not designated as hedging instruments	$	—	$	—	$	(245)	$	(98)		Total derivatives not designated as hedging instruments	$	—	$	—	$	28	$	(64)
Total derivatives	Total derivatives	$	162	$	78	$	(150)	$	(81)		Total derivatives	$	(145)	$	335	$	(81)	$	(18)

1.OCI is defined as other comprehensive income (loss).

2.Pretax amounts.

3.~~The excluded components are related to the time value of the derivatives designated as hedges.~~

~~Table of Contents~~

Effect of Derivative Instruments
Amount of gain (loss) recognized in OCI 1
Amount of gain (loss) recognized in income 2
Income Statement Classification
Nine Months Ended Nine Months Ended
In millions Sep 30, 2022 Sep 30, 2021 Sep 30, 2022 Sep 30, 2021
Derivatives designated as hedging instruments:
Fair value hedges:
Interest rate contracts $ — $ — $ — $ (25)
Interest expense and amortization of debt discount 3
Excluded components 4
— 2 — — Interest expense and amortization of debt discount
Cash flow hedges:
Interest rate contracts 231 (39) (8) (7) Interest expense and amortization of debt discount
Foreign currency contracts 8 10 10 (15) Cost of sales
Commodity contracts 310 143 220 32 Cost of sales
Net foreign investment hedges:
Foreign currency contracts 135 33 — —
Excluded components 4
59 20 38 5 Sundry income (expense) - net
Total derivatives designated as hedging instruments $ 743 $ 169 $ 260 $ (10)
Derivatives not designated as hedging instruments:
Interest rate contracts $ — $ — $ (1) $ (5) Interest expense and amortization of debt discount
Foreign currency contracts — — (531) (202) Sundry income (expense) - net
Commodity contracts — — 39 (47) Cost of sales
Total derivatives not designated as hedging instruments $ — $ — $ (493) $ (254)
Total derivatives $ 743 $ 169 $ (233) $ (264)

1.~~OCI is defined as other comprehensive income (loss).~~

2.~~Pretax amounts.~~

3.~~Gain (loss) recognized in income of derivatives is offset by gain (loss) recognized in income of the hedged item.~~

4.The excluded components are related to the time value of the derivatives designated as hedges.

The following table provides the net after-tax gain (loss) expected to be reclassified from AOCL to income within the next 12 months:


Expected Reclassifications from AOCL within the next 12 months	~~Sep 30, 2022~~Mar 31, 2023
In millions
Cash flow hedges:
Interest rate contracts	$	~~(8)~~(7)
Commodity contracts	$	~~170~~ (101)
Foreign currency contracts	$	9—
Net foreign investment hedges:
Excluded components	$	183

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NOTE 2015 – FAIR VALUE MEASUREMENTS

A summary of the Company's recurring and nonrecurring fair value measurements can be found in Note 2322 to the Consolidated Financial Statements included in the ~~2021~~2022 10-K.

Fair Value Measurements on a Recurring Basis

The following table summarizes the bases used to measure certain assets and liabilities at fair value on a recurring basis:


Basis of Fair Value Measurements on a Recurring Basis	Basis of Fair Value Measurements on a Recurring Basis	Sep 30, 2022								Dec 31, 2021								Basis of Fair Value Measurements on a Recurring Basis	Mar 31, 2023								Dec 31, 2022
		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total			Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
In millions	In millions																	In millions
Assets at fair value:	Assets at fair value:																	Assets at fair value:
Cash equivalents:	Cash equivalents:																	Cash equivalents:
Held-to-maturity securities 1	Held-to-maturity securities 1	$	—	$	327	$	—	$	327	$	—	$	317	$	—	$	317	Held-to-maturity securities 1	$	—	$	714	$	—	$	714	$	—	$	872	$	—	$	872
Money market funds	Money market funds	—		735		—		735		—		489		—		489		Money market funds	—		1,273		—		1,273		—		355		—		355
Marketable securities 2	Marketable securities 2	—		148		—		148		—		245		—		245		Marketable securities 2	—		619		—		619		—		939		—		939
Equity securities 3	Equity securities 3	10		—		—		10		20		—		—		20		Equity securities 3	18		—		—		18		10		—		—		10

Nonconsolidated affiliates 4																		Nonconsolidated affiliates 4	—		—		7		7		—		—		7		7
Debt securities: 3	Debt securities: 3																	Debt securities: 3
Government debt 4		—		590		—		590		—		735		—		735
Government debt 5																		Government debt 5	—		641		—		641		—		622		—		622
Corporate bonds	Corporate bonds	35		1,050		—		1,085		44		1,280		—		1,324		Corporate bonds	31		1,116		—		1,147		35		1,090		—		1,125
Derivatives relating to: 5
Derivatives relating to: 6																		Derivatives relating to: 6
Interest rates	Interest rates	—		657		—		657		—		145		—		145		Interest rates	—		39		—		39		—		351		—		351
Foreign currency	Foreign currency	—		972		—		972		—		165		—		165		Foreign currency	—		122		—		122		—		204		—		204
Commodities	Commodities	19		500		—		519		15		307		—		322		Commodities	18		71		—		89		63		158		—		221
Total assets at fair value	Total assets at fair value	$	64	$	4,979	$	—	$	5,043	$	79	$	3,683	$	—	$	3,762	Total assets at fair value	$	67	$	4,595	$	7	$	4,669	$	108	$	4,591	$	7	$	4,706
Liabilities at fair value:	Liabilities at fair value:																	Liabilities at fair value:
Long-term debt including debt due within one year 6		$	—	$	11,622	$	—	$	11,622	$	—	$	17,125	$	—	$	17,125
Guarantee liability 7		—		—		205		205		—		—		220		220
Derivatives relating to: 5
Long-term debt including debt due within one year 7																		Long-term debt including debt due within one year 7	$	—	$	14,239	$	—	$	14,239	$	—	$	13,875	$	—	$	13,875
Guarantee liability 8																		Guarantee liability 8	—		—		194		194		—		—		199		199
Derivatives relating to: 6																		Derivatives relating to: 6
Interest rates	Interest rates	—		459		—		459		—		284		—		284		Interest rates	—		37		—		37		—		246		—		246
Foreign currency	Foreign currency	—		941		—		941		—		137		—		137		Foreign currency	—		73		—		73		—		119		—		119
Commodities	Commodities	37		330		—		367		37		257		—		294		Commodities	68		81		—		149		103		167		—		270
Total liabilities at fair value	Total liabilities at fair value	$	37	$	13,352	$	205	$	13,594	$	37	$	17,803	$	220	$	18,060	Total liabilities at fair value	$	68	$	14,430	$	194	$	14,692	$	103	$	14,407	$	199	$	14,709

1.The Company's held-to-maturity securities primarily included treasury bills and time deposits.

2.The Company’s investments in marketable securities are included in “Other current assets” in the consolidated balance sheets.

3.The Company’s investments in debt securities, which are primarily available-for-sale, and equity securities are included in “Other investments” in the consolidated balance sheets.

4.Estimated asset for an investment in a limited liability company included in "Investment in nonconsolidated affiliates" in the consolidated balance sheets.

5.U.S. Treasury obligations, U.S. agency obligations, U.S. agency mortgage-backed securities and other municipalities’ obligations.

5.6.See Note 1914 for the classification of derivatives in the consolidated balance sheets.

6.7.See Note 1914 for information on fair value measurements of long-term debt.

7.8.Estimated liability for TDCC's guarantee of Sadara's debt which is included in "Other noncurrent obligations" in the consolidated balance sheets. ~~See Note 13 for additional information.~~

For equity securities calculated at net asset value per share (or its equivalent), the Company had ~~$97~~$84 million in private market securities and $20 million in real estate at ~~September 30, 2022~~March 31, 2023 ($~~106~~92 million in private market securities and $2220 million in real estate at December 31, ~~2021)~~2022). There are no redemption restrictions and the unfunded commitments on these investments were $54 million at ~~September 30, 2022 ($59 million at~~March 31, 2023 and December 31, ~~2021).~~2022.

For ~~certain investments~~assets classified as Level 3 measurements, fair value is based on significant unobservable inputs including assumptions where there is little, if any, market activity. The level 3 asset value represents the fair value of an investment in a limited liability ~~companies~~company, accounted for as an investment in nonconsolidated ~~affiliates, the~~affiliates. There was no unfunded commitment on the ~~investments was $72 million~~investment at ~~September 30,~~March 31, 2023 or December 31, 2022.

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For liabilities classified as Level 3 measurements, fair value is based on significant unobservable inputs including assumptions where there is little, if any, market activity. The fair value of the Company’s accrued liability related to the guarantee of Sadara’s debt is in proportion to the Company’s 35 percent ownership interest in Sadara. The estimated fair value of the guarantee was calculated using a "with" and "without" method. The fair value of the debt was calculated "with" the guarantee less the fair value of the debt "without" the guarantee. The "with" and "without" values were calculated using a discounted cash flow method based on contractual cash flows as well as projected prepayments made on the debt by Sadara. ~~See Note 13~~

Fair Value Measurements on a Nonrecurring Basis

As part of the 2023 Restructuring Program, the Company has or will shut down a number of manufacturing facilities, corporate facilities and miscellaneous assets around the world. In the first quarter of 2023, the assets associated with this plan were written down to zero, except for ~~further information on guarantees~~one corporate facility. The remaining corporate facility, which was classified as a level 3 measurement, was written down to a fair value of $16 million using unobservable inputs. In addition, impairments of leased, non-manufacturing facilities, which were classified as Level 3 ~~measurements.~~

~~NOTE 21 – VARIABLE INTEREST ENTITIES~~

~~A summary~~measurements, resulted in a write-down of ~~the Company's variable interest entities ("VIEs") can be found in Note 24~~right-of-use assets to a fair value of $9 million using unobservable inputs. The impairment charges related to the ~~Consolidated Financial Statements~~2023 Restructuring Program, totaling $197 million, were included in ~~the 2021 10-K.~~

~~Assets~~"Restructuring and ~~Liabilities of Consolidated VIEs~~

The Company's consolidated financial statements include the assets, liabilities and results of operations of VIEs for which the Company is the primary beneficiary. The other equity holders’ interests are included in “Net income attributable to noncontrolling interests”asset related charges - net" in the consolidated statements of income and ~~"Noncontrolling interests" in the consolidated balance sheets.~~

~~The following table summarizes the carrying amounts of these entities' assets and liabilities included in the Company’s consolidated balance sheets at September 30, 2022 and December 31, 2021:~~

Assets and Liabilities of Consolidated VIEs Sep 30, 2022 Dec 31, 2021
In millions
Cash and cash equivalents $ 14 $ 40
Other current assets 38 40
Net property 152 184
Other noncurrent assets 15 15
Total assets 1
$ 219 $ 279
Current liabilities $ 35 $ 37
Long-term debt — 3
Other noncurrent obligations 10 13
Total liabilities 2
$ 45 $ 53

1.~~All assets were restricted at September 30, 2022 and December 31, 2021.~~

2.~~All liabilities were nonrecourse at September 30, 2022 and December 31, 2021.~~

Amounts presented in the consolidated balance sheets and the table above as restricted assets or nonrecourse obligations relating to consolidated VIEs at September 30, 2022 and December 31, 2021 are adjusted for intercompany eliminations.

~~Nonconsolidated VIEs~~

~~The following table summarizes the carrying amounts of assets included in the consolidated balance sheets at September 30, 2022 and December 31, 2021,~~ related to ~~variable interests in joint ventures or entities for which the Company is not the primary beneficiary. The Company's maximum exposure to loss is the same as the carrying amounts.~~

Carrying Amounts of Assets Related to Nonconsolidated VIEs Sep 30, 2022 Dec 31, 2021
In millions Description of asset
Silicon joint ventures
Equity method investments 1
$ 113 $ 110

1.~~Included in "Investment in nonconsolidated affiliates" in the consolidated balance sheets.~~

~~Table of Contents~~

~~NOTE 22 – RELATED PARTY TRANSACTIONS~~

~~TDCC has committed to fund Dow Inc.'s dividends paid to common stockholders~~Packaging & Specialty Plastics ($1 million), Industrial Intermediates & Infrastructure ($40 million), Performance Materials & Coatings ($49 million) and share repurchases, as approved by the Dow Inc. Board from time to time, 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. The following table summarizes cash dividends TDCC declared and paid to Dow Inc. for the ~~three~~ ~~and~~ ~~nine months ended September 30, 2022 and 2021:~~

TDCC Cash Dividends Declared and Paid Three Months Ended Nine Months Ended
Sep 30, 2022 Sep 30, 2021 Sep 30, 2022 Sep 30, 2021
In millions
Cash dividends declared and paid $ 1,301 $ 919 $ 3,755 $ 2,361

~~At September 30, 2022 and December 31, 2021, TDCC's outstanding intercompany loan balance with Dow Inc. was insignificant.~~Corporate ($107 million).

NOTE 2316 – SEGMENTS AND GEOGRAPHIC REGIONS

Dow’s measure of profit/loss for segment reporting purposes is Operating EBIT as this is the manner in which the Company's chief operating decision maker assesses performance and allocates resources. 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.


Segment Information	Segment Information	Pack. & Spec. Plastics		Ind. Interm. & Infrast.		Perf. Materials & Coatings		Corp.		Total		Segment Information	Pack. & Spec. Plastics		Ind. Interm. & Infrast.		Perf. Materials & Coatings		Corp.		Total
In millions	In millions	Pack. & Spec. Plastics		Ind. Interm. & Infrast.		Perf. Materials & Coatings		Corp.		Total		In millions	Pack. & Spec. Plastics		Ind. Interm. & Infrast.		Perf. Materials & Coatings		Corp.		Total
Three months ended Sep 30, 2022
Three months ended Mar 31, 2023												Three months ended Mar 31, 2023
Net sales	Net sales	$	7,327	$	4,059	$	2,654	$	75	$	14,115	Net sales	$	6,114	$	3,378	$	2,276	$	83	$	11,851
Equity in earnings (losses) of nonconsolidated affiliates	Equity in earnings (losses) of nonconsolidated affiliates	$	55	$	(114)	$	1	$	—	$	(58)	Equity in earnings (losses) of nonconsolidated affiliates	$	21	$	(73)	$	3	$	1	$	(48)
Dow Inc. Operating EBIT 1	Dow Inc. Operating EBIT 1	$	785	$	167	$	302	$	(59)	$	1,195	Dow Inc. Operating EBIT 1	$	642	$	123	$	35	$	(92)	$	708
Three months ended Sep 30, 2021
Net sales		$	7,736	$	4,481	$	2,526	$	94	$	14,837
Equity in earnings of nonconsolidated affiliates		$	124	$	122	$	3	$	—	$	249
Dow Inc. Operating EBIT 1		$	1,954	$	713	$	284	$	(65)	$	2,886
Nine months ended Sep 30, 2022
Three months ended Mar 31, 2022												Three months ended Mar 31, 2022
Net sales	Net sales	$	23,187	$	12,953	$	8,706	$	197	$	45,043	Net sales	$	7,627	$	4,524	$	3,049	$	64	$	15,264
Equity in earnings (losses) of nonconsolidated affiliates	Equity in earnings (losses) of nonconsolidated affiliates	$	303	$	5	$	6	$	(3)	$	311	Equity in earnings (losses) of nonconsolidated affiliates	$	110	$	62	$	3	$	(1)	$	174
Dow Inc. Operating EBIT 1	Dow Inc. Operating EBIT 1	$	3,455	$	1,254	$	1,458	$	(178)	$	5,989	Dow Inc. Operating EBIT 1	$	1,234	$	661	$	595	$	(71)	$	2,419
Nine months ended Sep 30, 2021
Net sales		$	20,939	$	12,303	$	7,114	$	248	$	40,604
Equity in earnings of nonconsolidated affiliates		$	360	$	381	$	5	$	5	$	751
Dow Inc. Operating EBIT 1		$	5,196	$	1,687	$	571	$	(186)	$	7,268

1.Operating EBIT for TDCC for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~ is substantially the same as that of Dow Inc. and therefore has not been disclosed separately in the table above. A reconciliation of "Net ~~income"~~income (loss)" to Operating EBIT is provided in the following table.


Reconciliation of "Net income (loss)" to Operating EBIT	Three Months Ended
In millions	Mar 31, 2023		Mar 31, 2022
Net income (loss)	$	(73)	$	1,552
+ Provision (credit) for income taxes	(47)		503
Income (loss) before income taxes	$	(120)	$	2,055
- Interest income	76		28
+ Interest expense and amortization of debt discount	185		167
- Significant items	(719)		(225)
Operating EBIT	$	708	$	2,419

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Reconciliation of "Net income" to Operating EBIT Three Months Ended Nine Months Ended
In millions Sep 30, 2022 Sep 30, 2021 Sep 30, 2022 Sep 30, 2021
Net income $ 760 $ 1,706 $ 3,993 $ 4,644
+ Provision for income taxes 241 542 1,232 1,383
Income before income taxes $ 1,001 $ 2,248 $ 5,225 $ 6,027
- Interest income 41 14 105 35
+ Interest expense and amortization of debt discount 155 178 487 561
- Significant items (80) (474) (382) (715)
Operating EBIT $ 1,195 $ 2,886 $ 5,989 $ 7,268

The following tables summarize the pretax impact of significant items by segment excluded from Operating EBIT:

Significant Items by Segment Three Months Ended Sep 30, 2022 Nine Months Ended Sep 30, 2022
Pack. & Spec. Plastics Ind. Interm. & Infrast. Perf. Mat. & Coatings Corp. Total Pack. & Spec. Plastics Ind. Interm. & Infrast. Perf. Mat. & Coatings Corp. Total
In millions
Digitalization program costs 1
$ — $ — $ — $ (62) $ (62) $ — $ — $ — $ (154) $ (154)
Restructuring, implementation costs and asset related charges - net 2
— — — (11) (11) — — — (31) (31)
Russia / Ukraine conflict charges 3
— — — — — (31) (109) (16) (30) (186)
Loss on early extinguishment of debt 4
— — — — — — — — (8) (8)
Indemnification and other transaction related costs 5
— — — (7) (7) — — — (3) (3)
Total $ — $ — $ — $ (80) $ (80) $ (31) $ (109) $ (16) $ (226) $ (382)


Significant Items by Segment	Three Months Ended Mar 31, 2023
	Pack. & Spec. Plastics		Ind. Interm. & Infrast.		Perf. Mat. & Coatings		Corp.		Total
In millions

Restructuring, implementation and efficiency costs, and asset related charges - net 1	$	(1)	$	(40)	$	(67)	$	(443)	$	(551)
Litigation related charges, awards and adjustments 2	—		(177)		—		—		(177)

Indemnification and other transaction related costs 3	—		—		—		9		9
Total	$	(1)	$	(217)	$	(67)	$	(434)	$	(719)

1.Includes restructuring charges and implementation and efficiency costs associated with the Company's 2023 Restructuring Program. Also includes certain gains and losses associated with previously impaired equity investments.

2.Includes a loss associated with legacy agricultural products groundwater contamination matters. See Note 8 for additional information.

3.Primarily related to charges associated with agreements entered into with DuPont and Corteva as part of the separation and distribution which, among other matters, provides for cross-indemnities and allocations of obligations and liabilities for periods prior to, at and after the completion of the separation.


Significant Items by Segment	Three Months Ended Mar 31, 2022
	Pack. & Spec. Plastics		Ind. Interm. & Infrast.		Perf. Mat. & Coatings		Corp.		Total
In millions
Digitalization program costs 1	$	—	$	—	$	—	$	(41)	$	(41)
Restructuring, implementation costs and asset related charges - net 2	—		—		—		(10)		(10)
Russia / Ukraine conflict charges 3	(31)		(109)		(16)		(30)		(186)
Indemnification and other transactions related costs 4	—		—		—		12		12
Total	$	(31)	$	(109)	$	(16)	$	(69)	$	(225)

1.Includes costs associated with implementing the Company's Digital Acceleration program.

2.Includes costs associated with implementing the Company's 2020 Restructuring Program.

3.Asset related charges due to the Russia and Ukraine conflict. See Note 54 for additional information.

4.~~The Company redeemed outstanding long-term debt resulting in a loss on early extinguishment. See Note 12 for additional information.~~

5.Primarily related to charges associated with agreements entered into with DuPont ~~de Nemours, Inc.~~ and Corteva ~~Inc.~~ as part of the separation and distribution which, among other matters, provides for cross-indemnities and allocations of obligations and liabilities for periods prior to, at and after the completion of the separation. ~~See Note 3 for additional information.~~

~~Table of Contents~~

Significant Items by Segment Three Months Ended Sep 30, 2021 Nine Months Ended Sep 30, 2021
Pack. & Spec. Plastics Ind. Interm. & Infrast. Perf. Mat. & Coatings Corp. Total Pack. & Spec. Plastics Ind. Interm. & Infrast. Perf. Mat. & Coatings Corp. Total
In millions
Digitalization program costs 1
$ — $ — $ — $ (40) $ (40) $ — $ — $ — $ (121) $ (121)
Restructuring, implementation costs and asset related charges - net 2
— — — (16) (16) (8) (1) (10) (50) (69)
Loss on early extinguishment of debt 3
— — — (472) (472) — — — (574) (574)
Litigation related charges, awards and adjustments 4
— 54 — — 54 — 54 — — 54
Indemnification and other transactions related costs 5
— — — — — — — — (5) (5)
Total $ — $ 54 $ — $ (528) $ (474) $ (8) $ 53 $ (10) $ (750) $ (715)

1.~~Includes costs associated with implementing the Company's Digital Acceleration program.~~

2.~~Includes costs associated with implementing the Company's 2020 Restructuring Program.~~

3.~~The Company redeemed outstanding long-term debt resulting in a loss on early extinguishment. See Note 12 for additional information.~~

4.~~Related to an arbitration award and interest assessment paid by Luxi Chemical Group Co., Ltd.~~

5.Primarily related to charges associated with agreements entered into with DuPont de Nemours, Inc. and Corteva, Inc. as part of the separation and distribution which, among other matters, provides for cross-indemnities and allocations of obligations and liabilities for periods prior to, at and after the completion of the separation. See Note 3 for additional information.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

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.

~~Russia and Ukraine Conflict~~

In February 2022, Russia invaded Ukraine resulting in the United States, Canada, the European Union and other countries imposing economic sanctions on Russia. Dow is monitoring and evaluating the broader economic impact, including sanctions imposed, the potential for additional sanctions and any responses from Russia that could directly affect the Company’s supply chain, business partners or customers. At the time of this filing, the conflict between Russia and Ukraine has not had and is not expected to have a material impact on the Company's financial condition or results of operations.

~~OUTLOOK~~

In the near-term, Dow expects the macro environment to remain dynamic. As a result, Dow has outlined a playbook of actions that have the potential to deliver more than $1 billion in cost savings in 2023 while Dow continues to leverage its scale, geographic diversity and feedstock and derivative flexibility. Dow remains focused on advancing its decarbonize and grow strategy with higher-return investments that will extend its competitive advantages and industry leadership positions. Dow's strong financial position and balance sheet as well as its continued focus on cash flow generation give it ample flexibility to execute on its capital allocation priorities, including attractive shareholder remuneration, as it maximizes value creation over the longer-term.

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OUTLOOK

Looking to the remainder of the year, Dow's consistent and disciplined execution enhances its ability to navigate the impact of higher inflation on consumer demand and soft global economic activity. Dow expects the benefit of its operational and cost actions to continue to build as it progresses through 2023. Dow will remain flexible, responding quickly as conditions evolve and expects oil and gas spreads to further support its strategic cost-advantaged positions. The underlying long-term growth fundamentals in Dow's market verticals remain intact as Dow advances both its decarbonize and grow and transform the waste strategies to raise its underlying earnings profile by $3 billion across the economic cycle.

OVERVIEW

The following is a summary of the results for the three months ended ~~September 30, 2022:~~March 31, 2023:

•The Company reported net sales in the ~~third~~first quarter of ~~2022~~2023 of ~~$14.1~~$11.9 billion, down 522 percent from ~~$14.8~~$15.3 billion in the third quarter of 2021, with decreases in Packaging & Specialty Plastics and Industrial Intermediates & Infrastructure, partially offset by an increase in Performance Materials & Coatings. Net sales decreased in the U.S. & Canada and Europe, Middle East, Africa and India ("EMEAI"), were flat in Asia Pacific and increased in Latin America. Net sales were down 10 percent from $15.7 billion in the secondfirst quarter of 2022, with decreases across all operating segments and geographic ~~regions.~~

•~~Local price increased 3 percent compared with the third quarter of 2021 with a decrease in~~regions; Packaging & Specialty Plastics (down 220 percent) ~~which was more than offset by increases in~~, Industrial Intermediates & Infrastructure ~~(up 5~~(down 25 percent) and Performance Materials & Coatings ~~(up 15~~(down 25 percent).

•Local price decreased 10 percent compared with the first quarter of 2022 with decreases across all operating segments; Packaging & Specialty Plastics (down 11 percent), Industrial Intermediates & Infrastructure (down 6 percent) and Performance Materials & Coatings (down 12 percent). Local price ~~increased~~decreased in all geographic regions ~~except the U.S. & Canada,~~ compared with the ~~third quarter of 2021. Local price decreased 6 percent compared with the second~~first quarter of 2022.

•Volume decreased 411 percent compared with the ~~third~~first quarter of ~~2021.~~2022. Volume ~~was flat~~decreased in all operating segments; Packaging & Specialty Plastics ~~and decreased in~~(down 8 percent) Industrial Intermediates & Infrastructure (down 917 percent) and Performance Materials & Coatings (down 511 percent). Volume decreased ~~12 percent~~ in ~~EMEAI,~~all geographic regions, except Latin America, which was ~~partially offset by 2 percent increases in the U.S. & Canada and Asia Pacific. Volume decreased 3 percent compared with the second quarter of 2022.~~flat.

•Currency had an unfavorable impact of 41 percent on net sales compared with the ~~third~~first quarter of ~~2021,~~2022, driven by EMEAI (down 103 percent) and Asia Pacific (down 43 percent).

•Restructuring and asset related charges - net were $541 million in the first quarter of 2023, reflecting actions related to the 2023 Restructuring Program, which was approved by the Dow Inc. Board on January 25, 2023. The restructuring charges consisted of severance and related benefit costs of $344 million and asset write-downs and write-offs of $197 million.

•Equity in losses of nonconsolidated affiliates was ~~$58~~$48 million in the ~~third~~first quarter of ~~2022,~~2023, compared with equity in earnings of nonconsolidated affiliates of ~~$249~~$174 million in the ~~third~~first quarter of ~~2021,~~2022, primarily due to ~~margin compression in polyurethanes at Sadara Chemical Company ("Sadara")~~lower integrated polyethylene margins and ~~monoethylene glycol ("MEG")~~lower demand at the ~~Kuwait~~Company's principal joint ventures.

•Net income (loss) available for Dow Inc. and TDCC common stockholder(s) was ~~$739~~a loss of $93 million and ~~$747~~$100 million, respectively, in the ~~third~~first quarter of ~~2022,~~2023, compared with ~~$1,683~~income of $1,569 million and ~~$1,679~~$1,561 million in the ~~third~~first quarter of ~~2021.~~2022. Earnings (loss) per share for Dow Inc. was ~~$1.02~~a loss per share of $0.13 in the ~~third~~first quarter of ~~2022,~~2023, compared with ~~$2.23~~earnings per share of $2.11 in the ~~third~~first quarter of ~~2021.~~2022. These decreases reflect ~~margin compression due~~lower local prices and reduced operating rates to ~~higher energy costs, primarily in EMEAI.~~match market dynamics.

•Cash provided by operating activities - continuing operations was ~~$1.9 billion~~$531 million in the ~~third~~first quarter of ~~2022,~~2023, down ~~$779 million~~$1.1 billion compared with the same period last year. Compared with the ~~second~~fourth quarter of 2022, cash provided by operating activities - continuing operations ~~increased $84 million.~~decreased $1.5 billion.

•Dow Inc. repurchased ~~$800~~$125 million of the Company's common stock in the ~~third~~first quarter of ~~2022.~~2023.

•On ~~August 10, 2022,~~February 9, 2023, Dow Inc. announced that its Board of Directors ("Board") declared a dividend of $0.70 per share, which was paid on ~~September 9, 2022,~~March 10, 2023, to shareholders of record as of ~~August 31, 2022.~~

February 28, 2023.

In addition, ~~to the highlights above,~~ the following events occurred subsequent to the ~~third~~first quarter of ~~2022:~~2023:

•On ~~October~~April 13, ~~2022,~~2023, Dow Inc. announced that its Board declared a dividend of $0.70 per share, payable on ~~December~~June 9, ~~2022,~~2023, to shareholders of record as of ~~November 30, 2022.~~

•On October 17, 2022 Dow Inc. announced it will accelerate the sustainability targets the Company set in 2020 by expanding its Stop the Waste target to a Transform the Waste target. By 2030, Dow will transform plastic waste and other forms of alternative feedstock to commercialize 3 million metric tons of circular and renewable plastics solutions annually.

May 31, 2023.

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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	Summary of Sales Results	Three Months Ended				Nine Months Ended				Summary of Sales Results	Three Months Ended
In millions	In millions	Sep 30, 2022		Sep 30, 2021		Sep 30, 2022		Sep 30, 2021		In millions	Mar 31, 2023		Mar 31, 2022
Net sales	Net sales	$	14,115	$	14,837	$	45,043	$	40,604	Net sales	$	11,851	$	15,264


Sales Variances by Operating Segment and Geographic Region	Sales Variances by Operating Segment and Geographic Region																Sales Variances by Operating Segment and Geographic Region
		Three Months Ended Sep 30, 2022							Nine Months Ended Sep 30, 2022									Three Months Ended Mar 31, 2023
		Local Price & Product Mix		Currency		Volume			Total		Local Price & Product Mix		Currency		Volume				Total			Local Price & Product Mix		Currency		Volume		Total
Percentage change from prior year	Percentage change from prior year							Total									Percentage change from prior year	Local Price & Product Mix
Packaging & Specialty Plastics	Packaging & Specialty Plastics	(2)	%	(3)	%	—	%		(5)	%	12	%	(3)	%	2	%			11	%	Packaging & Specialty Plastics	(11)	%	(1)	%	(8)	%	(20)	%
Industrial Intermediates & Infrastructure	Industrial Intermediates & Infrastructure	5		(5)		(9)			(9)		15		(5)		(5)				5		Industrial Intermediates & Infrastructure	(6)		(2)		(17)		(25)
Performance Materials & Coatings	Performance Materials & Coatings	15		(5)		(5)			5		29		(4)		(3)				22		Performance Materials & Coatings	(12)		(2)		(11)		(25)
Total	Total	3	%	(4)	%	(4)	%		(5)	%	16	%	(4)	%	(1)	%			11	%	Total	(10)	%	(1)	%	(11)	%	(22)	%
Total, excluding the Hydrocarbons & Energy business	Total, excluding the Hydrocarbons & Energy business	4	%	(4)	%	(8)	%		(8)	%	15	%	(4)	%	(3)	%			8	%	Total, excluding the Hydrocarbons & Energy business	(9)	%	(2)	%	(11)	%	(22)	%
U.S. & Canada	U.S. & Canada	(5)	%	—	%	2	%		(3)	%	12	%	—	%	3	%			15	%	U.S. & Canada	(11)	%	—	%	(9)	%	(20)	%
EMEAI	EMEAI	11		(10)		(12)			(11)		24		(9)		(7)				8		EMEAI	(8)		(3)		(15)		(26)
Asia Pacific	Asia Pacific	2		(4)		2			—		12		(3)		(1)				8		Asia Pacific	(11)		(3)		(12)		(26)
Latin America	Latin America	1		—		—			1		11		—		3				14		Latin America	(11)		—		—		(11)
Total	Total	3	%	(4)	%	(4)	%		(5)	%	16	%	(4)	%	(1)	%			11	%	Total	(10)	%	(1)	%	(11)	%	(22)	%

Net sales in the ~~third~~first quarter of 2023 were $11.9 billion, down 22 percent from $15.3 billion in the first quarter of 2022, ~~were $14.1 billion, down 5 percent from $14.8 billion in the third quarter of 2021,~~ with local price ~~up 3~~down 10 percent, volume down 411 percent and an unfavorable currency impact of 41 percent. Net sales decreased in Packaging & Specialty Plastics and Industrial Intermediates & Infrastructure, which were partially offset by an increase in Performance Materials & Coatings. Local price decreased in Packaging & Specialty Plastics (down 2 percent) and increased in Industrial Intermediates & Infrastructure (up 5 percent) and Performance Materials & Coatings (up 15 percent). Volume was flat in Packaging & Specialty Plastics and decreased in Industrial Intermediates & Infrastructure (down 9 percent) and Performance Materials & Coatings (down 5 percent). Volume decreased in EMEAI reflecting the impact of inflation and high energy costs on demand and was partially offset by increases in the U.S. & Canada and Asia Pacific. Currency unfavorably impacted net sales by 4 percent, driven by EMEAI (down 10 percent) and Asia Pacific (down 4 percent). Excluding the Hydrocarbons & Energy business, net sales decreased 8 percent.

Net sales for the first nine months of 2022 were $45.0 billion, up 11 percent from $40.6 billion in the same period last year, with local price up 16 percent, volume down 1 percent and an unfavorable currency impact of 4 percent. Net sales increased in all operating segments and geographic regions. Local price increased in all operating segments and geographic regions, primarily driven by ~~tight supply and demand dynamics and increasing raw material prices.~~slower economic growth. Local price ~~increased~~decreased in Packaging & Specialty Plastics ~~(up 12~~(down 11 percent), Industrial Intermediates & Infrastructure ~~(up 15~~(down 6 percent), and Performance Materials & Coatings ~~(up 29~~(down 12 percent)., driven by industry supply additions. Volume ~~increased~~decreased in all operating segments and geographic regions except Latin America, which was flat. Volume decreased in Packaging & Specialty Plastics ~~(up 2~~(down 8 percent) ~~and decreased in~~, Industrial Intermediates & Infrastructure (down 517 percent) and Performance Materials & Coatings (down 311 percent). ~~Volume decreases in EMEAI and Asia Pacific were partially offset by increases in the U.S. & Canada and Latin America.~~ Currency unfavorably impacted net sales by 41 percent, ~~compared with the same period last year,~~ driven by EMEAI (down 93 percent) and Asia Pacific (down 3 percent). Excluding the Hydrocarbons & Energy business, net sales ~~increased 8~~decreased 22 percent.

~~Table of Contents~~

Cost of Sales

Cost of sales ("COS") was $10.6 billion in the first quarter of 2023, down from $12.4 billion in the ~~third~~first quarter of 2022, ~~up from $11.6 billion in the third quarter of 2021,~~ primarily due to ~~higher feedstocks, energy, other~~lower raw material costs ~~and logistics costs, partially offset by insurance recoveries related to certain weather-related events in the prior year. For the first nine months of 2022,~~on lower volume. COS was $37.7 billion, up from $32.4 billion in the first nine months of 2021, primarily due to higher feedstocks, energy, other raw material costs, and logistics costs, partially offset by insurance recoveries related to certain weather-related events in the prior year. The third quarter of 2022 included $55 million ($36 million in the third quarter of 2021) and $137 million in the first nine months of 2022 ($106 million in the first nine months of 2021) of costs associated with implementing the Company's digital acceleration program (related to Corporate). Cost of sales as a percentage of net sales ~~in the third quarter of 2022~~ was ~~87.7 percent (78.3~~89.7 percent in the ~~third~~first quarter of ~~2021) and 83.7~~2023 compared with 81.2 percent ~~for~~in the first ~~nine months~~quarter of ~~2022 (79.8 percent for the first nine months of 2021).~~2022.

Research and Development Expenses

Research and development ("R&D") expenses totaled ~~$191 million in the third quarter of 2022, compared with $210 million in the third quarter of 2021. R&D expenses for the first nine months of 2022 were $626 million, compared with $632~~$214 million in the first ~~nine months~~quarter of ~~2021. R&D expenses for~~2023, compared with $218 million in the ~~three and nine months ended September 30, 2022 decreased primarily due to lower performance-based compensation costs and a decrease in fringe benefit expenses which reflected stock market declines.~~first quarter of 2022.

Selling, General and Administrative Expenses

Selling, general and administrative ("SG&A") expenses totaled ~~$356~~$428 million in the ~~third~~first quarter of ~~2022,~~2023, compared with ~~$403~~$498 million in the ~~third~~first quarter of ~~2021.~~2022. SG&A expenses decreased in the ~~third~~first quarter of ~~2022~~2023 due to lower

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performance-based compensation costs and ~~a decrease~~bad debt reserve write-offs more than offsetting increases in labor costs as well as fringe benefit expenses ~~which reflected~~tied to stock market declines. In the first nine months of 2022, SG&A expenses were $1,289 million, compared with $1,209 million in the first nine months of 2021. SG&A expenses for the first nine months of 2022 increased primarily due to higher bad debt reserves which more than offset lower performance-based compensation costs and a decrease in fringe benefit expenses which reflected stock market declines.changes.

Amortization of Intangibles

Amortization of intangibles was ~~$83 million in the third quarter of 2022, compared with $100 million in the third quarter of 2021. In the first nine months of 2022, amortization of intangibles was $256 million, compared with $301~~$81 million in the first ~~nine months~~quarter of ~~2021. See Note 10 to~~2023, compared with $88 million in the ~~Consolidated Financial Statements for additional information on intangible assets.~~first quarter of 2022.

Restructuring and Asset Related Charges - Net

2023 Restructuring Program

On January 25, 2023, the Dow Inc. Board approved restructuring actions to achieve the Company's structural cost improvement initiatives in response to the continued economic impact from the global recessionary environment and to enhance its agility and long-term competitiveness across the economic cycle. As a result of these actions, in the first quarter of 2023 the Company recorded pretax restructuring charges of $541 million, consisting of severance and related benefit costs of $344 million and asset write-downs and write-offs of $197 million. Restructuring charges by segment were as follows: $1 million in Packaging & Specialty Plastics, $40 million in Industrial Intermediates & Infrastructure, $49 million in Performance Materials & Coatings and $451 million in Corporate. These actions are expected to be substantially complete by the end of 2024.

Asset Related Charges

~~2020 Restructuring Program~~

Actions related to the restructuring program approved by the Dow. Inc. Board on September 29, 2020 were substantially complete at the end of 2021, with the exception of certain cash payments that will continue through 2022 and into 2023. For the nine months ended September 30, 2021, the Company recorded pretax restructuring charges of $12 million for asset write-downs and write-offs and $10 million for costs associated with exit and disposal activities. Restructuring charges by segment were as follows: $8 million in Packaging & Specialty Plastics, $1 million in Industrial Intermediates & Infrastructure, $10 million in Performance Materials & Coatings and $3 million in Corporate.

Equity in Earnings (Losses) of Nonconsolidated Affiliates

The Company's share of equity in losses of nonconsolidated affiliates was ~~$58~~$48 million in the ~~third~~first quarter of ~~2022,~~2023, compared with equity in earnings of nonconsolidated affiliates of $249 million in the third quarter of 2021, primarily due to margin compression in polyurethanes at Sadara and MEG at the Kuwait joint ventures. Equity in earnings of nonconsolidated affiliates was $311$174 million in the first ~~nine months~~quarter of 2022, ~~compared with $751~~primarily due to lower integrated polyethylene margins and lower demand at the Company's principal joint ventures. Dividends from nonconsolidated affiliates were $53 million in the first ~~nine~~three months of ~~2021, primarily due to lower equity earnings at Sadara due to planned maintenance turnaround activity, pandemic-related lockdowns~~2023, compared with $548 million in ~~China and margin compression in polyurethanes, as well as MEG margin~~

~~Table~~the first three months of ~~Contents~~

~~compression at the Kuwait joint ventures. See Note 9 to the Consolidated Financial Statements for additional information.~~2022.

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.

For the three months ended ~~September 30, 2022,~~March 31, 2023, Sundry income (expense) - net was income of ~~$69~~$79 million and ~~$73~~$69 million for Dow Inc. and TDCC, respectively, compared with ~~expense~~income of ~~$350~~$148 million and ~~$356~~$136 million, respectively, for the three months ended ~~September 30, 2021.~~March 31, 2022. The ~~third~~first quarter of ~~2022~~2023 included non-operating pension and postretirement benefit plan credits and gains on the sales of assets and investments. These were partially offset by foreign currency exchange losses. In addition, Dow Inc. included a $7$9 million ~~loss associated with agreements entered into with~~ ~~DuPont de Nemours, Inc. ("DuPont")~~ and Corteva, Inc. ("Corteva") as part of the separation and distribution (related to Corporate). The third quarter of 2021 included a $472 million loss on the early extinguishment of debt (related to Corporate). This was partially offset by non-operating pension and postretirement benefit plan credits and a $54 million gain ~~related to an arbitration award (related to Industrial Intermediates & Infrastructure).~~

For the nine months ended September 30, 2022, Sundry income (expense) - net was income of $292 million and $287 million for Dow Inc. and TDCC, respectively, compared with expense of $225 million and $231 million for Dow Inc. and TDCC, respectively, for the nine months ended September 30, 2021. The first nine months of 2022 included non-operating pension and postretirement benefit plan credits and gains on the sales of assets and investments. These were partially offset by foreign currency exchange losses and an $8 million loss on the early extinguishment of debt (related to Corporate). In addition, Dow Inc. included a $3 million loss associated with agreements entered into with DuPont de Nemours, Inc. ("DuPont") and Corteva, as part of the separation and distribution (related to Corporate). The first nine months of 2021 included a $574 million loss on the early extinguishment of debt (related to Corporate) and foreign currency exchange losses. These were partially offset by non-operating pension and postretirement benefit plan credits, gains on the sales of assets and investments and a $54 million gain related to an arbitration award (related to Industrial Intermediates & Infrastructure). In addition, Dow Inc. ~~included a $5 million loss associated with agreements entered into with DuPont and Corteva~~("Corteva") as part of the separation and distribution (related to Corporate).

Interest Expense and Amortization of Debt Discount

Interest expense and amortization of debt discount was ~~$155 million in the third quarter of 2022, compared with $178 million in the third quarter of 2021. Interest expense and amortization of debt discount was $487~~$185 million in the first ~~nine months~~quarter of ~~2022,~~2023, compared with ~~$561~~$167 million in the first ~~nine months~~quarter of ~~2021.~~2022. The ~~decrease~~increase in interest expense is primarily due to ~~the liability management actions taken~~higher interest rates in ~~2021.~~2023.

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 Company reported a credit for income taxes of $47 million in the first quarter of 2023, resulting in an effective tax rate ~~for the third quarter~~ of ~~2022 was 24.1~~39.2 percent and ~~24.0~~37.0 percent for Dow Inc. and TDCC, respectively, compared with ~~24.1 percent and 24.2 percent for~~a provision of $503 million in the ~~third~~first quarter of ~~2021. For the first nine months of~~ 2022, ~~the~~resulting in an effective tax rate of 24.5 percent and 24.6 percent. The credit for income taxes in 2023 was ~~23.6 percent for Dow Inc.~~primarily due to negative pretax income and ~~TDCC, compared~~benefits related to deferred tax assets in a foreign jurisdiction, partially offset by a remeasurement of uncertain tax positions. These factors in conjunction with ~~22.9 percent~~geographic mix of earnings resulted in a higher tax rate for the first ~~nine months~~quarter of ~~2021.~~2023 compared with the first quarter of 2022.

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Net Income (Loss) Available for Common Stockholder(s)

Dow Inc.

Net income (loss) available for Dow Inc. common stockholders was ~~$739~~a loss of $93 million, or $1.02 per share, in the third quarter of 2022, compared with $1,683 million, or $2.23 per share, in the third quarter of 2021. Net income available for Dow Inc. common stockholders was $3,969 million, or $5.41$0.13 per share, in the first ~~nine months~~quarter of ~~2022,~~2023, compared with ~~$4,575~~income of $1,569 million, or ~~$6.06~~$2.11 per share, in the first ~~nine months~~quarter of ~~2021.~~2022. See Note 76 to the Consolidated Financial Statements for details on Dow Inc.'s earnings (loss) per share calculations.

~~Table of Contents~~

TDCC

Net income (loss) available for the TDCC common stockholder was ~~$747 million in the third quarter~~a loss of ~~2022, compared with $1,679 million in the third quarter of 2021. Net income available for the TDCC common stockholder was $3,975 millionin the first nine months of 2022, compared with $4,576~~$100 million in the first ~~nine months~~quarter of ~~2021.~~2023, compared with income of $1,561 million in the first quarter of 2022. 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, 2022 ("2022 10-K"), filed with the SEC on February 1, 2023.

PACKAGING & SPECIALTY PLASTICS

The Packaging & Specialty Plastics operating segment consists of two highly integrated global businesses: Hydrocarbons & Energy and Packaging and Specialty Plastics. The segment employs the industry’s broadest polyolefin product portfolio, supported by the Company’s proprietary catalyst and manufacturing process technologies. These differentiators, plus collaboration at the customer’s design table, enable the segment to deliver more reliable, durable, higher-performing solutions designed for recyclability and enhanced plastics circularity and sustainability. The segment serves customers, brand owners and ultimately consumers in key markets including food and specialty packaging; industrial and consumer packaging; health and hygiene; caps, closures and pipe applications; consumer durables; mobility and transportation; and infrastructure. Ethylene is transferred to downstream derivative businesses at market-based prices, which are generally equivalent to prevailing market prices for large volume purchases. This segment also includes the results of The Kuwait Styrene Company K.S.C.C. and The SCG-Dow Group, as well as a portion of the results of EQUATE Petrochemical Company K.S.C.C. ("EQUATE"), The Kuwait Olefins Company K.S.C.C. ("TKOC"), Map Ta Phut Olefins Company Limited ("Map Ta Phut") and Sadara, all joint ventures of the Company.


Packaging & Specialty Plastics	Three Months Ended
In millions	Mar 31, 2023		Mar 31, 2022
Net sales	$	6,114	$	7,627
Operating EBIT	$	642	$	1,234
Equity earnings	$	21	$	110

The Company is responsible for marketing a majority of Sadara products outside of the Middle East zone through the Company's established sales channels. As part of this arrangement, the Company purchases and sells Sadara products for a marketing fee. In 2021, Dow and the Saudi Arabian Oil Company agreed to and began transitioning the marketing rights and responsibilities for Sadara’s finished products to levels more consistent with each partner’s equity ownership, which is being implemented through 2026. This transition will not impact equity earnings but is expected to reduce the Company's sales of Sadara products over the five year period.

Packaging & Specialty Plastics Three Months Ended Nine Months Ended
In millions Sep 30, 2022 Sep 30, 2021 Sep 30, 2022 Sep 30, 2021
Net sales $ 7,327 $ 7,736 $ 23,187 $ 20,939
Operating EBIT $ 785 $ 1,954 $ 3,455 $ 5,196
Equity earnings $ 55 $ 124 $ 303 $ 360

Packaging & Specialty Plastics Three Months Ended Nine Months Ended
Percentage change from prior year Sep 30, 2022 Sep 30, 2022
Change in Net Sales from Prior Period due to:
Local price & product mix (2) % 12 %
Currency (3) (3)
Volume — 2
Total (5) % 11 %


Packaging & Specialty Plastics	Three Months Ended
Percentage change from prior year	Mar 31, 2023
Change in Net Sales from Prior Period due to:
Local price & product mix	(11)	%
Currency	(1)
Volume	(8)
Total	(20)	%

Packaging & Specialty Plastics net sales were ~~$7,327~~$6,114 million in the ~~third~~first quarter of ~~2022,~~2023, down 520 percent from net sales of ~~$7,736~~$7,627 million in the ~~third~~first quarter of ~~2021,~~2022, with local price down 211 percent, volume flat and an unfavorable currency impact of 3 percent, primarily in EMEAI. Local price decreased in both businesses as gains in functional polymers were more than offset by lower polyethylene prices. Local price decreased in Hydrocarbons & Energy in the U.S. & Canada which more than offset increases in EMEAI. Local price decreased in Packaging and Specialty Plastics in the U.S. & Canada and Latin America which more than offset increases in EMEAI and Asia Pacific.

~~Table of Contents~~

Volume increased in Hydrocarbons & Energy, primarily in the U.S. & Canada. Volume decreased in Packaging and Specialty Plastics in EMEAI, the U.S. & Canada and Asia Pacific which more than offset an increase in Latin America.

~~Operating EBIT was $785 million in the third quarter of 2022,~~ down $1,169 million from Operating EBIT of $1,954 million in the third quarter of 2021. Operating EBIT decreased primarily due to higher raw material and energy costs, lower selling prices and decreased equity earnings which were partially offset by insurance recoveries related to certain weather-related events in the prior year.

Packaging & Specialty Plastics net sales were $23,187 million in the first nine months of 2022, up 11 percent from net sales of $20,939 million in the first nine months of 2021, with local price up 12 percent, volume up 28 percent and an unfavorable currency impact of ~~3 percent, primarily in EMEAI.~~1 percent. Local price ~~increased~~decreased in both businesses and across all geographic regions. Local price, ~~increased~~primarily in the U.S. & Canada and EMEAI, decreased in Hydrocarbons & Energy ~~primarily in EMEAI and the U.S. & Canada,~~ as prices for co-products are generally correlated to Brent crude oil prices, which, on average, ~~increased 50~~decreased 15 percent compared with the first ~~nine months~~quarter of ~~2021.~~2022. Local price ~~increased~~decreased in Packaging and Specialty Plastics in all geographic regions, driven by ~~favorable supply and demand dynamics~~lower polyethylene prices, which were partially offset by gains in ~~polyethylene and~~ functional ~~polymers, notably in flexible food and beverage packaging and infrastructure material applications.~~polymers. Volume ~~increased~~decreased in Hydrocarbons & Energy, driven by lower olefins and aromatics sales primarily in ~~the U.S. & Canada and~~ EMEAI. Volume decreased in Packaging and Specialty Plastics primarily due to lower demand in ~~EMEAI, the U.S. & Canada and Asia Pacific which more than offset an increase in~~all geographic regions except for Latin America.

Operating EBIT was ~~$3,455~~$642 million in the first ~~nine months~~quarter of ~~2022,~~2023, down ~~$1,741~~$592 million from Operating EBIT of ~~$5,196~~$1,234 million in the first ~~nine months~~quarter of ~~2021.~~2022. Operating EBIT decreased primarily due to ~~higher feedstock~~lower selling prices and ~~raw material costs~~demand and lower equity earnings, which were partially offset by ~~higher selling prices and insurance recoveries related to certain weather-related events in the prior year.~~

~~INDUSTRIAL INTERMEDIATES & INFRASTRUCTURE~~

The Industrial Intermediates & Infrastructure operating segment consists of two customer-centric global businesses - Industrial Solutions and Polyurethanes & Construction Chemicals - that develop important intermediate chemicals that are essential to manufacturing processes, as well as downstream, customizedlower raw materials and formulations that use advanced development technologies. These businesses primarily produce and market ethylene oxide and propylene oxide derivatives that are aligned to market segments as diverse as appliances, coatings, electronics, surfactants for cleaning and sanitization, infrastructure and oil and gas. The businesses' global scale and reach, world-class technology, R&D capabilities and materials science expertise enable the Company to be a premier solutions provider offering customers value-add sustainable solutions to enhance comfort, energy efficiency, product effectiveness and durability across a wide range of home comfort and appliance, building and construction, mobility and transportation, and adhesive and lubricant applications, among others. This segment also includes a portion of the results of EQUATE, TKOC, Map Ta Phut and Sadara, all joint ventures of the Company.

Industrial Intermediates & Infrastructure Three Months Ended Nine Months Ended
In millions Sep 30, 2022 Sep 30, 2021 Sep 30, 2022 Sep 30, 2021
Net sales $ 4,059 $ 4,481 $ 12,953 $ 12,303
Operating EBIT $ 167 $ 713 $ 1,254 $ 1,687
Equity earnings (losses) $ (114) $ 122 $ 5 $ 381
costs driven by lower volume.

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Industrial Intermediates & Infrastructure Three Months Ended Nine Months Ended
Percentage change from prior year Sep 30, 2022 Sep 30, 2022
Change in Net Sales from Prior Period due to:
Local price & product mix 5 % 15 %
Currency (5) (5)
Volume (9) (5)
Total (9) % 5 %
INDUSTRIAL INTERMEDIATES & INFRASTRUCTURE


Industrial Intermediates & Infrastructure	Three Months Ended
In millions	Mar 31, 2023		Mar 31, 2022
Net sales	$	3,378	$	4,524
Operating EBIT	$	123	$	661
Equity earnings (losses)	$	(73)	$	62


Industrial Intermediates & Infrastructure	Three Months Ended
Percentage change from prior year	Mar 31, 2023
Change in Net Sales from Prior Period due to:
Local price & product mix	(6)	%
Currency	(2)
Volume	(17)
Total	(25)	%

Industrial Intermediates & Infrastructure net sales were ~~$4,059~~$3,378 million in the ~~third~~first quarter of 2023, down 25 percent from $4,524 million in the first quarter of 2022, ~~down 9 percent from $4,481 million in the third quarter of 2021,~~ with local price ~~up 5~~down 6 percent, volume down 917 percent, and an unfavorable currency impact of 52 percent. Local price ~~increased~~decreased in both businesses and across all geographic ~~regions, except Asia Pacific. Currency had an unfavorable impact on sales in both businesses, driven by EMEAI and A~~sia Pacific. Volume declines in Polyurethanes & Construction Chemicals were partially offset by gains in Industrial Solutions. Volume increased in Industrial Solutions in all geographic regions, except Latin America, driven by ~~strong demand in energy, pharmaceutical, and mobility end-markets and increased catalyst sales.~~ Volume declines in Polyurethanes & Construction Chemicals in the U.S. & Canada and EMEAI were driven by inflationary pressure on demand for consumer durables, industrial, and building and construction applications.

~~Operating EBIT was $167 million in the third quarter of 2022, down $546 million from Operating EBIT of $713 million in the third quarter of 2021. Operating EBIT~~ decreased primarily due to lower demand in EMEAI, margin compression due to rising raw material and energy costs and lower equity earnings at Sadara and the Kuwait and Map Ta Phut joint ventures, which were partially offset by higher selling prices and ~~insurance recoveries related to certain weather-related events in the prior year.~~

Industrial Intermediates & Infrastructure net sales were $12,953 million in the first nine months of 2022, up 5 percent from net sales of $12,303 million in the first nine months of 2021, with local price up 15 percent, volume down 5 percent, and an unfavorable currency impact of 5 percent. Local pric~~e increased in both businesses and across all geographic regions, primarily driven by rising raw material and energy prices.~~regions. Currency had an unfavorable impact on sales in both businesses, driven by EMEAI and Asia Pacific. Volume in Industrial Solutions increased in all geographic regions driven by improved supply availability as the year-ago period was impacted by Winter Storm Uri, and by strong demand in agricultural, pharmaceutical and energy related applications. Volume in Polyurethanes & Construction Chemicals decreased in all geographic regions, except Latin America, primarily due to lower demand, particularly for consumer durables, combined with reduced supply from planned maintenance turnaround activity, Sadara and third-party outages.

~~Operating EBIT was $1,254 million in the first nine months of 2022, down $433 million from Operating EBIT of $1,687 million in the first nine months of 2021.~~ Operating EBIT decreased primarily due to inflationary pressure on demand, particularly for consumer durables, margin compression due to higher raw material and energy costs and lower equity earnings at Sadara and the Kuwait and Map Ta Phut joint ventures, combined with reduced supply from planned maintenance turnaround activity and third-party outages, which were partially offset by local price increases in both businesses and insurance recoveries related to certain weather-related events in the prior year.

~~Table of Contents~~

~~PERFORMANCE MATERIALS & COATINGS~~

The Performance Materials & Coatings operating segment includes industry-leading franchises that deliver a wide array of solutions into consumer, infrastructure and mobility end-markets. The segment consists of two global businesses: Coatings & Performance Monomers and Consumer Solutions. These businesses primarily utilize the Company's acrylics-, cellulosics- and silicone-based technology platforms to serve the needs of the architectural and industrial coatings; home care and personal care; consumer and electronics; mobility and transportation; industrial and chemical processing; and building and infrastructure end-markets. Both businesses employ materials science capabilities, global reach and unique products and technology to combine chemistry platforms to deliver differentiated, market-driven and sustainable innovations to customers.

Performance Materials & Coatings Three Months Ended Nine Months Ended
In millions Sep 30, 2022 Sep 30, 2021 Sep 30, 2022 Sep 30, 2021
Net sales $ 2,654 $ 2,526 $ 8,706 $ 7,114
Operating EBIT $ 302 $ 284 $ 1,458 $ 571
Equity earnings $ 1 $ 3 $ 6 $ 5

Performance Materials & Coatings Three Months Ended Nine Months Ended
Percentage change from prior year Sep 30, 2022 Sep 30, 2022
Change in Net Sales from Prior Period due to:
Local price & product mix 15 % 29 %
Currency (5) (4)
Volume (5) (3)
Total 5 % 22 %

Performance Materials & Coatings net sales were $2,654 million in the third quarter of 2022, up 5 percent from net sales of $2,526 million in the third quarter of 2021, with local price up 15 percent, volume down 5 percent and an unfavorable currency impact of 5 percent. Local price increased in both businesses and across all geographic regions. Volume decreased in Polyurethanes & Construction Chemicals, driven by lower demand for building & construction, consumer durables, and industrial applications. Volume decreased in Industrial Solutions, driven by lower demand for coatings and industrial applications.

Operating EBIT was $123 million in the first quarter of 2023, down $538 million from Operating EBIT of $661 million in the first quarter of 2022. Operating EBIT decreased primarily due to lower selling prices and demand, margin compression due to rising energy costs particularly in EMEAI and lower equity earnings at the EQUATE and Sadara joint ventures.

PERFORMANCE MATERIALS & COATINGS


Performance Materials & Coatings	Three Months Ended
In millions	Mar 31, 2023		Mar 31, 2022
Net sales	$	2,276	$	3,049
Operating EBIT	$	35	$	595
Equity earnings	$	3	$	3


Performance Materials & Coatings	Three Months Ended
Percentage change from prior year	Mar 31, 2023
Change in Net Sales from Prior Period due to:
Local price & product mix	(12)	%
Currency	(2)
Volume	(11)
Total	(25)	%

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Performance Materials & Coatings net sales were $2,276 million in the first quarter of 2023, down 25 percent from net sales of $3,049 million in the first quarter of 2022, with local price down 12 percent, volume down 11 percent and an unfavorable currency impact of 2 percent. Local price decreased in both businesses and across all geographic regions. Consumer Solutions local price decreased primarily due to competitive pricing pressure from supply additions in China in upstream siloxanes. Local price decreased in Coatings & Performance Monomers primarily due to lower raw material prices and unfavorable supply and demand dynamics in acrylic monomers and architectural coatings. Volume decreased in Consumer Solutions in EMEAI, ~~and~~ the U.S. & Canada ~~driven by lower demand in siloxanes~~ and ~~planned maintenance turnaround activity, which was~~Latin America, partially offset by ~~increases~~an increase in Asia ~~Pacific and Latin America.~~Pacific. Volume decreased in Coatings & Performance Monomers in ~~EMEAI, Asia Pacific and the U.S. & Canada,~~all regions, driven by lower demand for architectural ~~coatings, which was partially offset by an increase in Latin America.~~coatings. The unfavorable currency impact was driven by EMEAI and Asia Pacific.

Operating EBIT was ~~$302~~$35 million in the ~~third~~first quarter of ~~2022, up $18~~2023, down $560 million from Operating EBIT of $284 million in the third quarter of 2021. Operating EBIT increased due to insurance recoveries related to certain weather-related events in the prior year in Coatings & Performance Monomers and price increases in Consumer Solutions offset by higher raw material costs.

~~Performance Materials & Coatings net sales were $8,706~~$595 million in the first ~~nine months~~quarter of 2022, up 22 percent from net sales of $7,114 million in the first nine months of 2021, with local price up 29 percent, volume down 3 percent and an unfavorable currency impact of 4 percent. Local price increased in both businesses and across all geographic regions due to favorable supply and demand dynamics and higher raw material prices. Volume2022. Operating EBIT decreased in both businesses and in EMEAI, Latin America and Asia Pacific, which was partially offset by an increase in the U.S. & Canada. Volume decreased in Consumer Solutions in EMEAI, the U.S. & Canada and Latin America, which was partially offset by an increase in Asia Pacific. Volume decreased in Coatings & Performance Monomers in Asia Pacific and EMEAI, which was partially offset by an increase in the U.S. & Canada, primarily due to ~~improved supply availability as the year-ago period was impacted by Winter Storm Uri, and Latin America. The unfavorable currency impact was driven by EMEAI and Asia Pacific.~~

Operating EBIT was $1,458 million in the first nine months of 2022, up $887 million from Operating EBIT of $571 million in the first nine months of 2021. Operating EBIT increased primarily due to margin expansionprice decreases in Consumer Solutions and ~~insurance recoveries related to certain weather-related events~~lower demand in ~~the prior year in Coatings & Performance Monomers.~~

~~Table of Contents~~

~~CORPORATE~~

Corporate includes certain enterprise and governance activities (including insurance operations, environmental operations, etc.); non-business aligned joint ventures; non-business aligned litigation expenses; and discontinued or non-alignedboth businesses.

Corporate Three Months Ended Nine Months Ended
In millions Sep 30, 2022 Sep 30, 2021 Sep 30, 2022 Sep 30, 2021
Net sales $ 75 $ 94 $ 197 $ 248
Operating EBIT $ (59) $ (65) $ (178) $ (186)
Equity earnings (losses) $ — $ — $ (3) $ 5

CORPORATE


Corporate	Three Months Ended
In millions	Mar 31, 2023		Mar 31, 2022
Net sales	$	83	$	64
Operating EBIT	$	(92)	$	(71)
Equity earnings (losses)	$	1	$	(1)

Net sales for Corporate, which primarily relate to the Company's insurance operations, were ~~$75~~$83 million in the ~~third~~first quarter of ~~2022, a decrease~~2023, an increase from net sales of ~~$94 million in the third quarter of 2021. Net sales were $197~~$64 million in the first ~~nine months~~quarter of ~~2022, a decrease from net sales of $248 million in the first nine months of 2021.~~2022.

Operating EBIT was a loss of ~~$59~~$92 million in the ~~third~~first quarter of ~~2022,~~2023, compared with a loss of ~~$65 million in the third quarter of 2021. Operating EBIT was a loss of $178~~$71 million in the first ~~nine months~~quarter of ~~2022, compared with a loss of $186 million in the first nine months of 2021.~~2022. Operating EBIT ~~improved~~decreased primarily due to ~~lower~~increased costs.

CHANGES IN FINANCIAL CONDITION

The Company had cash and cash equivalents of ~~$2,216~~$3,319 million at ~~September 30, 2022~~March 31, 2023 and ~~$2,988~~$3,886 million at December 31, ~~2021,~~2022, of which ~~$1,216~~$1,610 million at ~~September 30, 2022~~March 31, 2023 and ~~$1,745~~$1,789 million at December 31, ~~2021~~2022 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 ~~U.S.,~~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, 2022,~~March 31, 2023, 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.

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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	Cash Flow Summary	Dow Inc.				TDCC				Cash Flow Summary	Dow Inc.				TDCC
		Nine Months Ended				Nine Months Ended					Three Months Ended				Three Months Ended
		Sep 30, 2022		Sep 30, 2021		Sep 30, 2022		Sep 30, 2021			Mar 31, 2023		Mar 31, 2022		Mar 31, 2023		Mar 31, 2022
In millions
Cash provided by (used for):	Cash provided by (used for):										Cash provided by (used for):
Operating activities - continuing operations	Operating activities - continuing operations	$	5,408	$	4,512	$	5,441	$	4,634	Operating activities - continuing operations	$	531	$	1,612	$	534	$	1,611
Operating activities - discontinued operations	Operating activities - discontinued operations	(11)		(78)		—		—		Operating activities - discontinued operations	4		(9)		—		—
Operating activities	Operating activities	5,397		4,434		5,441		4,634		Operating activities	535		1,603		534		1,611
Investing activities	Investing activities	(1,339)		(1,535)		(1,339)		(1,535)		Investing activities	(150)		(367)		(150)		(367)
Financing activities	Financing activities	(4,513)		(4,974)		(4,557)		(5,174)		Financing activities	(854)		(1,017)		(853)		(1,025)
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(261)		(57)		(261)		(57)
Summary
Decrease in cash, cash equivalents and restricted cash		(716)		(2,132)		(716)		(2,132)
Cash, cash equivalents and restricted cash at beginning of period		3,033		5,108		3,033		5,108
Cash, cash equivalents and restricted cash at end of period		$	2,317	$	2,976	$	2,317	$	2,976
Less: Restricted cash and cash equivalents, included in "Other current assets"		101		65		101		65
Cash and cash equivalents at end of period		$	2,216	$	2,911	$	2,216	$	2,911

Cash Flows from Operating Activities

Cash provided by operating activities from continuing operations in the first ~~nine~~three months of 2023 was primarily driven by the Company's cash earnings, which were partially offset by cash used for working capital requirements and performance-based compensation payments. Cash provided by operating activities from continuing operations in the first three months of 2022 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 requirements and performance-based compensation payments. Cash provided by operating activities from continuing operations in the first nine months of 2021 was primarily driven by the Company's cash earnings and dividends from equity method investments, which were partially offset by elective pension contributions, cash used for working capital requirements and performance-based compensation payments.


Net Working Capital	Net Working Capital	Dow Inc.				TDCC				Net Working Capital	Dow Inc.				TDCC
		Sep 30, 2022		Dec 31, 2021		Sep 30, 2022		Dec 31, 2021			Mar 31, 2023		Dec 31, 2022		Mar 31, 2023		Dec 31, 2022
In millions	In millions									In millions
Current assets	Current assets	$	19,777	$	20,848	$	19,739	$	20,837	Current assets	$	19,356	$	20,477	$	19,330	$	20,511
Current liabilities	Current liabilities	12,315		13,226		12,158		13,046		Current liabilities	10,489		11,331		10,347		11,247
Net working capital	Net working capital	$	7,462	$	7,622	$	7,581	$	7,791	Net working capital	$	8,867	$	9,146	$	8,983	$	9,264
Current ratio	Current ratio	1.61:1		1.58:1		1.62:1		1.60:1		Current ratio	1.85:1		1.81:1		1.87:1		1.82:1


Working Capital Metrics	Working Capital Metrics	Three Months Ended			Working Capital Metrics	Three Months Ended
		Sep 30, 2022	Jun 30, 2022	Sep 30, 2021		Mar 31, 2023		Mar 31, 2022
							Mar 31, 2022
Days sales outstanding in trade receivables	Days sales outstanding in trade receivables	45	43	43	Days sales outstanding in trade receivables	43		42
Days sales in inventory	Days sales in inventory	59	56	56	Days sales in inventory	58		55
Days payables outstanding	Days payables outstanding	63	58	58	Days payables outstanding	59		60

Cash ~~used for~~provided by (used for) operating activities from discontinued operations in the first ~~nine~~three months of ~~2022~~2023 and ~~2021~~2022 was related to cash payments and receipts Dow Inc. had with DuPont and Corteva that related to certain agreements and matters related to the separation from DowDuPont Inc. ("DowDuPont"). ~~See Note 3 to the Consolidated Financial Statements for additional information.~~

~~Table of Contents~~

Cash Flows from Investing Activities

Cash used for investing activities in the first ~~nine~~three months of 2023 and 2022 ~~was~~were primarily for capital expenditures and purchases of investments, which were partially offset by proceeds from sales and maturities of investments. Cash used for investing activities in the first nine months of 2021 was primarily for capital expenditures, purchases of investments and acquisitions of property and businesses, which were partially offset by proceeds from sales and maturities of investments.

The Company's capital expenditures were ~~$1,224~~$440 million in the first ~~nine~~three months of ~~2022,~~2023, compared with ~~$1,035~~$315 million in the first ~~nine~~three months of ~~2021.~~2022. The Company expects full year capital spending in ~~2022~~2023 to be approximately ~~$1.9~~$2.2 billion. The Company will adjust its spending through the year as economic conditions evolve.

Cash Flows from Financing Activities

Cash used for financing activities in the first ~~nine~~three months of ~~2022~~2023 was primarily for ~~payments on long-term debt.~~debt related activities, partially offset by proceeds from issuance of common stock. In addition, Dow Inc. included cash outflows for dividends paid to stockholders and purchases of treasury stock. TDCC included cash outflows for dividends paid to Dow Inc. Cash used for financing activities in the first ~~nine~~three months of ~~2021~~2022 included ~~payments on long-term~~ debt ~~and transaction financing, debt issuance and other costs, which were~~related activity, partially offset by

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collections related to securitization programs and proceeds from issuance of common ~~stock and proceeds from issuance of short-term debt greater than three months.~~stock. In addition, Dow Inc. included cash outflows for dividends paid to stockholders and purchases of treasury stock. TDCC included cash outflows for dividends paid to Dow Inc. ~~See Note 12 to the Consolidated Financial Statements for additional information related to the issuance and retirement of 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 (Operating EBITDA to Cash Flow from Operations)

Dow defines Cash Flow Conversion (Operating EBITDA to Cash Flow from Operations) 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.

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These financial measures are not recognized in accordance with accounting principles generally accepted in the United States of America (“~~U.S.~~ GAAP”) and should not be viewed as alternatives to ~~U.S.~~ 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, 2022 Sep 30, 2021
In millions
Cash provided by operating activities - continuing operations (GAAP) $ 5,408 $ 4,512
Capital expenditures (1,224) (1,035)
Free Cash Flow (non-GAAP) 1
$ 4,184 $ 3,477

1.~~Free cash flow in the first nine months of 2021 reflects a $1 billion elective pension contribution.~~


Reconciliation of Free Cash Flow	Three Months Ended
	Mar 31, 2023		Mar 31, 2022
In millions
Cash provided by operating activities - continuing operations (GAAP)	$	531	$	1,612
Capital expenditures	(440)		(315)
Free Cash Flow (non-GAAP)	$	91	$	1,297


Reconciliation of Cash Flow Conversion (Operating EBITDA to Cash Flow from Operations)	Reconciliation of Cash Flow Conversion (Operating EBITDA to Cash Flow from Operations)	Nine Months Ended						Reconciliation of Cash Flow Conversion (Operating EBITDA to Cash Flow from Operations)	Three Months Ended
		Sep 30, 2022			Sep 30, 2021				Mar 31, 2023			Mar 31, 2022
In millions
Net income (GAAP)				$	3,993		$	4,644
+ Provision for income taxes		1,232			1,383
Income before income taxes		$	5,225		$	6,027
Net income (loss) (GAAP)								Net income (loss) (GAAP)	$	(73)		$	1,552
+ Provision (credit) for income taxes								+ Provision (credit) for income taxes	(47)			503
Income (loss) before income taxes								Income (loss) before income taxes	$	(120)		$	2,055
- Interest income	- Interest income	105			35			- Interest income	76			28
+ Interest expense and amortization of debt discount	+ Interest expense and amortization of debt discount	487			561			+ Interest expense and amortization of debt discount	185			167
- Significant items ¹	- Significant items ¹	(382)			(715)			- Significant items ¹	(719)			(225)
Operating EBIT (non-GAAP)	Operating EBIT (non-GAAP)	$	5,989		$	7,268		Operating EBIT (non-GAAP)	$	708		$	2,419
+ Depreciation and amortization	+ Depreciation and amortization	2,104			2,187			+ Depreciation and amortization	648			752
Operating EBITDA (non-GAAP)	Operating EBITDA (non-GAAP)	$	8,093		$	9,455		Operating EBITDA (non-GAAP)	$	1,356		$	3,171
Cash provided by operating activities - continuing operations (GAAP)	Cash provided by operating activities - continuing operations (GAAP)	$	5,408		$	4,512		Cash provided by operating activities - continuing operations (GAAP)	$	531		$	1,612
Cash Flow Conversion (Operating EBITDA to cash flow from operations) (non-GAAP) 2		66.8		%	47.7		%
Cash Flow Conversion (Operating EBITDA to cash flow from operations) (non-GAAP)								Cash Flow Conversion (Operating EBITDA to cash flow from operations) (non-GAAP)	39.2		%	50.8		%

1.The ~~nine~~three months ended ~~September 30,~~March 31, 2023 includes restructuring charges and implementation and efficiency costs associated with the Company's 2023 Restructuring Program, certain gains and losses associated with previously impaired equity investments, a loss associated with legacy agricultural products groundwater contamination matters and activity related to the separation from DowDuPont. The three months ended March 31, 2022 includes costs associated with implementing the Company's Digital Acceleration program and 2020 Restructuring Program, asset related charges due to the Russia and Ukraine conflict a loss on the early extinguishment of debt and activity related to the separation from DowDuPont. The nine months ended September 30, 2021 includes costs associated with implementing the Company's Digital Acceleration program and 2020 Restructuring Program, a loss on early extinguishment of debt, litigation related charges, awards and adjustments and activity related to the separation from DowDuPont. See Note 2316 to the Consolidated Financial Statements for additional information.

2.~~Cash flow conversion in the first nine months~~Table of ~~2021 reflects a $1 billion elective pension contribution.~~Contents

Liquidity & Financial Flexibility

The Company’s primary source of incremental liquidity is cash flows from operating activities. The generation of cash from operations and the Company's ability to access capital markets is expected to meet the Company’s cash requirements for working capital, capital expenditures, debt maturities, contributions to pension plans, dividend distributions to stockholders, share repurchases and other needs. In addition to cash from operating activities, the Company’s current liquidity sources also include TDCC's U.S. and Euromarket commercial paper programs, committed and uncommitted credit facilities, committed 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, 2022.~~March 31, 2023. Cash and committed and available forms of liquidity were ~~$12~~$13.2 billion at ~~September 30, 2022.~~March 31, 2023. The Company also has no substantive long-term debt maturities due until 2027. As a well-known seasoned issuer the Company may issue debt at any time 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 ~~$100~~$200 million of commercial paper outstanding at ~~September 30, 2022.~~March 31, 2023. TDCC maintains access to the commercial paper market at competitive rates. Amounts outstanding under TDCC's commercial paper programs during the period may be greater, or less than, the amount reported at the end of the period. ~~Subsequent~~TDCC did not issue commercial paper subsequent to ~~September 30, 2022, TDCC issued approximately $600 million of commercial paper.~~March 31, 2023.

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Committed Credit Facilities

The Company also has the ability to access liquidity through TDCC's committed and available credit facilities. At ~~September 30, 2022,~~March 31, 2023, TDCC had total committed and available credit facilities of $8.4 billion. ~~See Note 12~~

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 ~~the Consolidated Financial Statements~~support short-term liquidity needs and for ~~additional information on committed and available credit facilities.~~general purposes, including letters of credit. The Company had no drawdowns outstanding at March 31, 2023.

Committed Accounts Receivable Facilities

In addition to the above committed credit facilities, the Company maintains a committed accounts receivable facility in the U.S. where eligible trade accounts receivable, up to $900 million, may be sold at any point in time. The Company also maintains a committed accounts receivable facility in Europe where eligible trade accounts receivable, up to €500 million, may be sold at any point in time. In the ~~third~~first quarter of ~~2022,~~2023, the Company sold no receivables under the U.S. and Europe committed accounts receivable facilities ($~~391~~250 million in the first ~~nine~~three months of 2022). ~~See Note 11 to the Consolidated Financial Statements for additional information.~~

Company-Owned Life Insurance

The Company has investments in company-owned life insurance ("COLI") policies, which are recorded at their cash surrender value as of each balance sheet date. The Company has the ability to monetize its investment in its COLI policies as an additional source of liquidity. The Company had no outstanding monetization of its existing COLI policies' surrender value at ~~September 30, 2022. For additional information, see Note 7 to the Consolidated Financial Statements included in the 2021 10-K.~~March 31, 2023.

~~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, including letters of credit. The Company had no drawdowns outstanding at September 30, 2022.

~~Shelf Registration - U.S.~~

On June 13, 2022, Dow Inc. and TDCC filed a shelf registration statement with the U.S. Securities and Exchange Commission. The shelf indicates that Dow Inc. may offer common stock; preferred stock; depositary shares; debt securities; guarantees; warrants to purchase common stock, preferred stock and debt securities; and stock purchase contracts and stock purchase units, with pricing and availability of any such offerings depending on market conditions. The shelf also indicates that TDCC may offer debt securities, guarantees and warrants to purchase debt securities, with pricing and availability of any such offerings depending on market conditions. On July 22, 2022, TDCC filed a prospectus supplement under this shelf registration to register an undetermined amount of securities for issuance under InterNotes®. Also, on July 22, 2022, TDCC filed a prospectus supplement under this shelf registration to register an undetermined amount of securities for issuance under a medium-term notes program.

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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	Total Debt	Dow Inc.						TDCC						Total Debt	Dow Inc.						TDCC
		Sep 30, 2022			Dec 31, 2021			Sep 30, 2022			Dec 31, 2021				Mar 31, 2023			Dec 31, 2022			Mar 31, 2023			Dec 31, 2022
In millions
Notes payable	Notes payable			$	185		$	161		$	185		$	161	Notes payable		$	278		$	362		$	278		$	362
Long-term debt due within one year	Long-term debt due within one year	364			231			364			231			Long-term debt due within one year	247			362			247			362
Long-term debt	Long-term debt	12,921			14,280			12,921			14,280			Long-term debt	14,739			14,698			14,739			14,698
Gross debt	Gross debt	$	13,470		$	14,672		$	13,470		$	14,672		Gross debt	$	15,264		$	15,422		$	15,264		$	15,422
- Cash and cash equivalents	- Cash and cash equivalents	2,216			2,988			2,216			2,988			- Cash and cash equivalents	3,319			3,886			3,319			3,886
- Marketable securities 1	- Marketable securities 1	148			245			148			245			- Marketable securities 1	619			939			619			939
Net debt	Net debt	$	11,106		$	11,439		$	11,106		$	11,439		Net debt	$	11,326		$	10,597		$	11,326		$	10,597
Total equity	Total equity	$	18,629		$	18,739		$	18,877		$	19,029		Total equity	$	20,715		$	21,247		$	20,953		$	21,489

Gross debt as a percent of total capitalization	Gross debt as a percent of total capitalization	42.0		%	43.9		%	41.6		%	43.5		%	Gross debt as a percent of total capitalization	42.4		%	42.1		%	42.1		%	41.8		%
Net debt as a percent of total capitalization	Net debt as a percent of total capitalization	37.3		%	37.9		%	37.0		%	37.5		%	Net debt as a percent of total capitalization	35.3		%	33.3		%	35.1		%	33.0		%

1.Included in "Other current assets" in the consolidated balance sheets.

~~In the second quarter of 2022, the Company redeemed $750 million aggregate principal amount of 3.625 percent notes due May 2026.~~

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 ~~0.39~~0.40 to 1.00 at ~~September 30, 2022.~~March 31, 2023. Management believes TDCC was in compliance with all of its covenants and default provisions at ~~September 30, 2022.~~March 31, 2023. For information on TDCC's debt covenants and default provisions, see Note 1514 to the Consolidated Financial Statements included in the ~~2021~~2022 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~~three months of ~~2022.~~2023.

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, 2022,~~March 31, 2023, TDCC's credit ratings were as follows:


Credit Ratings	Long-Term Rating	Short-Term Rating	Outlook
Fitch Ratings	BBB+	F2	Positive
Moody’s Investors Service	Baa1	P-2	Stable
Standard & Poor’s	BBB	A-2	Positive

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On May 31, 2022, Moody's Investors Service announced a credit rating upgrade for TDCC from Baa2 to Baa1, affirmed its P-2 rating and maintained a stable outlook. On June 8, 2022, Standard & Poor’s affirmed TDCC’s BBB and A-2 rating, and revised its outlook to positive from stable. On June 16, 2022, Fitch Ratings affirmed TDCC’s BBB+ and F2 rating, and revised its outlook to positive from stable. These credit agencies' decisions were made as part of their annual review process and reflect the Company's supportive financial policies and strong operating performance.

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 Dow Inc. Board. Dividends declared by the Board align to the Company's strategy announced in 2018 of returning approximately 45 percent of ~~operating net income~~1Operating Net Income to ~~the~~ shareholders through ~~the dividend~~dividends and total shareholder remuneration of approximately 65 percent, when including share repurchases, over the economic cycle. The Company defines Operating Net Income, a non-GAAP measure, as "Net income (loss) available for Dow Inc. common stockholders," excluding the impact of significant items. The following table summarizes ~~cash~~ dividends declared ~~by the Board~~ and paid to common stockholders of record ~~by Dow Inc.~~ in ~~2022:~~2023:

Dow Inc. ~~Cash~~ Dividends Declared and Paid

Declaration Date

Record Date

Payment Date

Amount (per share)

February ~~10, 2022~~9, 2023

February 28, ~~2022~~2023

March ~~11, 2022~~10, 2023

0.70

April 13, ~~2022~~2023

May 31, ~~2022~~2023

June ~~10, 2022~~9, 2023

0.70

~~August 10, 2022~~

~~August 31, 2022~~

~~September 9, 2022~~

~~0.70~~

~~October 13, 2022~~

~~November 30, 2022~~

~~December 9, 2022~~

~~0.70~~

TDCC

TDCC has committed to fund Dow Inc.'s dividends paid to common stockholders and share repurchases, as approved by the Dow Inc. Board, ~~from time to time,~~ 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, 2022,~~March 31, 2023, TDCC declared and paid a dividend to Dow Inc. of ~~$1,301~~$620 million ($~~3,755~~1,121 million for the ~~nine~~three months ended ~~September 30,~~March 31, 2022). At ~~September 30, 2022,~~March 31, 2023, TDCC's intercompany loan balance with Dow Inc. was insignificant. ~~See Note 22 to the Consolidated Financial Statements for additional information.~~

Share Repurchase Program

On April 1, 2019, the Dow Inc. Board ratified the share repurchase program originally approved on March 15, 2019, authorizing up to $3 billion for the repurchase of the Company's common stock, with no expiration date. The Company completed the April 1, 2019 share repurchase program in the second quarter of 2022. On April 13, 2022, the Dow Inc. Board approved a ~~new~~ share repurchase program authorizing up to $3 billion for the repurchase of the Company's common stock, with no expiration date. The Company repurchased ~~$800~~$125 million of its common stock in the ~~third~~first quarter of ~~2022 ($2,200 million in the first nine months of 2022).~~2023. At ~~September 30, 2022,~~March 31, 2023, approximately ~~$2,175~~$1,925 million of the new share repurchase program authorization remained available for repurchases. As previously announced, the Company intends to repurchase shares to cover dilution over the cycle. ~~With the announcement of the new share repurchase program, the~~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 ~~ensuring~~targeting shareholder remuneration isof approximately 65 percent 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. ~~The Company expects to contribute approximately $250 million to its pension plans in 2022, of which $156 million has been contributed through September 30, 2022.~~ See Note 1712 to the Consolidated Financial Statements and Note 2019 to the Consolidated Financial Statements included in the ~~2021~~2022 10-K for additional information related to the Company's pension plans.

1.~~Operating net income is a non-GAAP measure that Dow defines as "Net income available for Dow Inc. common stockholders," excluding the impact of significant items.~~

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Restructuring

The actions related to the ~~2020~~2023 Restructuring Program are expected to result in additional cash expenditures of ~~$92~~$333 million, primarily through ~~2022~~2024 and ~~into 2023, consisting~~consist primarily of severance and related benefit ~~costs and costs associated with exit and disposal activities, including contract cancellation penalties and environmental remediation.~~costs. Restructuring implementation costs, primarily decommissioning and demolition activities related to asset actions, and costs associated with the Company's productivity and efficiency actions, are expected to result in additional cash expenditures of approximately ~~$10~~$425 million, primarily through the end of ~~2022.~~2024. Restructuring implementation and efficiency costs totaled ~~$11 million in the third quarter of 2022 ($31~~$40 million in the first ~~nine months~~quarter of ~~2022).~~2023.

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 54 to the Consolidated Financial Statements for additional information on the Company's restructuring activities.

~~Digital Acceleration~~

In 2021, Dow announced plans to further advance and expand its digitalization efforts to deliver long-term value creation by accelerating investment in three key areas: expanding digital tools to accelerate materials science innovation; further enhancing the e-commerce buying and fulfillment experience for Dow's customers; and adopting real-time digital manufacturing insights, operational data intelligence and demand sensing to enhance the productivity and reliability

Table of Dow’s operations. The Company expects more than $300 million in incremental annual run rate Operating EBITDA generation by the end of 2025 related to digital acceleration, with an additional one-time $100 million in structural working capital efficiency gains, driven in part by enhanced planning from digital tools. The activities related to digital acceleration are expected to result in additional cash expenditures of approximately $80 million, primarily through the end of 2022. Digital acceleration expenses totaled $62 million in the third quarter of 2022 ($154 million in the first nine months of 2022).Contents

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 17 and 2019 to the Consolidated Financial Statements included in the ~~2021~~2022 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, ~~2021.~~2022.


Contractual Obligations at Sep 30, 2022		Payments Due In
Contractual Obligations at Mar 31, 2023												Contractual Obligations at Mar 31, 2023	Payments Due In
In millions	In millions	2022		2023-2024		2025-2026		2027 and beyond		Total		In millions	2023		2024-2025		2026-2027		2028 and beyond		Total
Dow Inc.	Dow Inc.											Dow Inc.
Long-term debt obligations 1	Long-term debt obligations 1	$	34	$	474	$	465	$	12,579	$	13,552	Long-term debt obligations 1	$	222	$	523	$	1,306	$	13,212	$	15,263
Expected cash requirements for interest 2	Expected cash requirements for interest 2	$	151	$	1,151	$	1,104	$	7,385	$	9,791	Expected cash requirements for interest 2	$	518	$	1,350	$	1,300	$	8,664	$	11,832

1.Excludes unamortized debt discount and issuance costs of ~~$267~~$277 million. Includes finance lease obligations of ~~$804~~$787 million.

2.Cash requirements for interest on long-term debt was calculated using current interest rates at ~~September 30, 2022,~~March 31, 2023, and includes ~~$11~~$6 million of various floating rate notes.

~~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 21 to the Consolidated Financial Statements).

Fair Value Measurements

See Note 2015 to the Consolidated Financial Statements for information concerning fair value measurements.

~~Table of Contents~~

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 ~~2021~~2022 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 ~~2021~~2022 10-K. Since December 31, ~~2021,~~2022, there have been no material changes in the Company’s accounting policies that are impacted by judgments, assumptions and estimates.

Asbestos-Related Matters of Union Carbide Corporation

Union Carbide is and has been involved in a large number of asbestos-related suits filed primarily in state courts during the past four 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	Asbestos-Related Claim Activity	2022	2021	Asbestos-Related Claim Activity	2023	2022
Claims unresolved at Jan 1	Claims unresolved at Jan 1	8,747	9,126	Claims unresolved at Jan 1	6,873	8,747
Claims filed	Claims filed	3,662	3,177	Claims filed	940	1,214
Claims settled, dismissed or otherwise resolved	Claims settled, dismissed or otherwise resolved	(5,823)	(3,340)	Claims settled, dismissed or otherwise resolved	(765)	(1,154)
Claims unresolved at Sep 30		6,586	8,963
Claims unresolved at Mar 31				Claims unresolved at Mar 31	7,048	8,807
Claimants with claims against both Union Carbide and Amchem	Claimants with claims against both Union Carbide and Amchem	(1,502)	(2,312)	Claimants with claims against both Union Carbide and Amchem	(1,479)	(2,072)
Individual claimants at Sep 30		5,084	6,651
Individual claimants at Mar 31				Individual claimants at Mar 31	5,569	6,735

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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. In fact, there are no personal injury cases in which only Union Carbide and/or Amchem are the sole named defendants. 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 138 to the Consolidated Financial Statements; Part II, Item 1. Legal Proceedings; and Note 1615 to the Consolidated Financial Statements included in the ~~2021~~2022 10-K.


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

See Note 1914 to the Consolidated Financial Statements and Part II, Item 7A. Quantitative and Qualitative Disclosures About Market Risk in the combined Dow Inc. and TDCC Annual Report on Form 10-K for the year ended December 31, ~~2021,~~2022, for information on the Company's utilization of financial instruments and an analysis of the sensitivity of these instruments.

~~Table of Contents~~


ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this Quarterly Report on Form 10-Q, Dow Inc. and The Dow Chemical Company (the "Companies") carried out an evaluation, under the supervision and with the participation of the Companies' Disclosure Committee and the Companies' management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of the Companies' disclosure controls and procedures pursuant to paragraph (b) of Exchange Act Rules 13a-15 and 15d-15. Based upon that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that the Companies' disclosure controls and procedures were effective.

Changes in Internal Control Over Financial Reporting

There were no changes in the Companies' internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 and 15d-15 that was conducted during the ~~last fiscal~~ quarter ended March 31, 2023, that have materially affected, or are reasonably likely to materially affect, the Companies' internal control over financial reporting.

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Dow Inc. and Subsidiaries The Dow Chemical Company and Subsidiaries PART II – OTHER INFORMATION


ITEM 1. LEGAL PROCEEDINGS

Asbestos-Related Matters of Union Carbide Corporation

No material developments regarding this matter occurred in the first ~~nine~~three months of ~~2022.~~2023. For a current status of this matter, see Note 138 to the Consolidated Financial Statements.

~~Environmental Proceedings~~

On May 17, 2021, the Company received a civil complaint from the State of Texas ("State") on behalf of the Texas Commission on Environmental Quality. The complaint, filed in the 250th District Court of Travis County, Texas, alleges environmental violations at the Company's Freeport, Texas, site involving 12 discrete air emissions events. The State is seeking monetary relief of no more than $1 million and injunctive relief to prevent recurrence. On August 31, 2021, the State informed the Company that it would be including additional air emissions events in the complaint, which may impact the monetary relief sought by the State. Discussions between the Company and the Texas Office of the Attorney General are ongoing.

On February 3, 2022, the U.S. Environmental Protection Agency (“EPA”) proposed a draft administrative order to resolve alleged violations at the Rohm and Haas Chemicals facility in Kankakee, Illinois, relating to a storage tank at the site that does not have certain control equipment specified by EPA Clean Air Act regulations. This issue was self-disclosed by the facility to the Illinois Environmental Protection Agency in 2015. Negotiations with the agencies are ongoing.


ITEM 1A. RISK FACTORS

Since December 31, ~~2021,~~2022, there have been no material changes to the Company's Risk ~~Factors, except as noted below, which was updated in the first and second quarters of 2022:~~

~~Global Economic Considerations: The Company operates in a global, competitive environment which gives rise to operating and market risk exposure.~~

The Company sells its broad range of products and services in a competitive, global environment, and competes worldwide for sales on the basis of product quality, price, technology and customer service. Increased levels of competition could result in lower prices or lower sales volume, which could have a negative impact on the Company’s results of operations. Sales of the Company's products are also subject to extensive federal, state, local and foreign laws and regulations; trade agreements; import and export controls; taxes; and duties and tariffs. The imposition of additional regulations, controls, taxes and duties and tariffs or changes to bilateral and regional trade agreements could result in lower sales volume, which could negatively impact the Company’s results of operations.

Economic conditions around the world, and in certain industries in which the Company does business, also impact sales price and volume. As a result, market uncertainty or an economic downturn driven by inflationary pressures; political tensions; war, including the ongoing conflict between Russia and Ukraine and the related sanctions and export restrictions;terrorism; epidemics; pandemics; or political instability in the geographic regions or industries in which the Company sells its products could reduce demand for these products and result in decreased sales volume, which could have a negative impact on the Company’s results of operations.

In February 2022, Russia invaded Ukraine resulting in the United States, Canada, the European Union and other countries imposing economic sanctions on Russia. Dow suspended all purchases of feedstocks and energy from Russia and has significantly reduced its operations and product offerings in the country. Dow has also stopped all investments in Russia and is only supplying limited essential goods to Russia. These actions have not had and are not expected to have a material impact on the Company's financial condition or results of operations. However, the fluidity and continuation of the conflict may result in additional economic sanctions and other impacts which could have a negative impact on the Company’s financial condition, results of operations and cash flows. These include decreased sales; supply chain and logistics disruptions; volatility in foreign exchange rates and interest rates; inflationary pressures on raw materials and energy; and heightened cybersecurity threats.

~~Table of Contents~~

In addition, volatility and disruption of financial markets could limit customers’ ability to obtain adequate financing to maintain operations, which could result in a decrease in sales volume and have a negative impact on the Company’s results of operations. The Company’s global business operations also give rise to market risk exposure related to changes in inflation, foreign currency exchange rates, interest rates, commodity prices and other market factors such as equity prices. To manage such risks, the Company enters into hedging transactions, where deemed appropriate, pursuant to established guidelines and policies. If the Company fails to effectively manage such risks, it could have a negative impact on its results of operations.Factors.


ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer Purchases of Equity Securities

The following table provides information regarding purchases of Dow Inc. common stock by the Company during the three months ended ~~September 30, 2022:~~March 31, 2023:

Issuer Purchases of Equity Securities Total number of shares purchased as part of the Company's publicly announced share repurchase program
Approximate dollar value of shares that may yet be purchased under the Company's publicly announced share repurchase program 1
(In millions)
Period Total number of shares purchased Average price paid per share
July 2022 1,850,168 $ 51.52 1,850,168 $ 2,880
August 2022 12,110,900 $ 53.77 12,110,900 $ 2,228
September 2022 1,043,146 $ 51.55 1,043,146 $ 2,175
Third quarter 2022 15,004,214 $ 53.34 15,004,214 $ 2,175


Issuer Purchases of Equity Securities				Total number of shares purchased as part of the Company's publicly announced share repurchase program	Approximate dollar value of shares that may yet be purchased under the Company's publicly announced share repurchase program 1 (In millions)
Period	Total number of shares purchased	Average price paid per share
January 2023	—	$	—	—	$	2,050
February 2023	700,626	$	57.09	700,626	$	2,010
March 2023	1,484,259	$	57.27	1,484,259	$	1,925
First quarter 2023	2,184,885	$	57.21	2,184,885	$	1,925

1.On April 1, 2019, the Dow Inc. Board ratified the share repurchase program originally approved on March 15, 2019, authorizing up to $3.0 billion for the repurchase of the Company's common stock, with no expiration date. The Company completed the April 1, 2019 share repurchase program in the second quarter of 2022. On April 13, 2022, the Dow Inc. Board approved a ~~new~~ share repurchase program authorizing up to $3.0 billion for the repurchase of the Company's common stock, with no expiration date.


ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.


ITEM 5. OTHER INFORMATION

Not applicable.

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ITEM 6. EXHIBITS


			EXHIBIT NO.						DESCRIPTION
			4.3						Dow Inc. agrees to provide the SEC, on request, copies of all other such indentures and instruments that define the rights of holders of long-term debt of Dow Inc. and its consolidated subsidiaries, including The Dow Chemical Company, pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K.
			23 *						Ankura Consulting Group, LLC's Consent.
			31.1 *						Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
			31.2 *						Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
			32.1 *						Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
			32.2 *						Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
			101.INS						The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
			101.SCH						Inline XBRL Taxonomy Extension Schema Document.
			101.CAL						Inline XBRL Taxonomy Extension Calculation Linkbase Document.
			101.DEF						Inline XBRL Taxonomy Extension Definition Linkbase Document.
			101.LAB						Inline XBRL Taxonomy Extension Label Linkbase Document.
			101.PRE						Inline XBRL Taxonomy Extension Presentation Linkbase Document.
			104						Cover Page Interactive Data File. The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

* Filed herewith

~~Table of Contents~~


~~Dow Inc.~~ ~~The Dow Chemical Company and Subsidiaries~~ ~~Trademark Listing~~ TRADEMARK LISTING

The following registered trademark of InspereX Holdings LLC appears in this report: InterNotes®

® ™ Trademark of The Dow Chemical Company ("Dow") or an affiliated company of Dow, except as otherwise specified.

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Dow Inc. and Subsidiaries The Dow Chemical Company and Subsidiaries Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

DOW INC.

THE DOW CHEMICAL COMPANY

Date: ~~October 21, 2022~~April 26, 2023


/s/ RONALD C. EDMONDS
Ronald C. Edmonds Controller and Vice President of Controllers and Tax (Authorized Signatory and Principal Accounting Officer)

6949


TDCC Sundry Income (Expense) – Net	Three Months Ended				Nine Months Ended
In millions	Sep 30, 2022		Sep 30, 2021		Sep 30, 2022		Sep 30, 2021
Non-operating pension and other postretirement benefit plan net credits 1	$	89	$	86	$	267	$	247
Foreign exchange losses	(34)		(8)		(54)		(24)
Loss on early extinguishment of debt 2	—		(472)		(8)		(574)

Gains on sales of other assets and investments	10		12		53		74
Luxi arbitration award 3	—		54		—		54
Other - net	8		(28)		29		(8)
Total sundry income (expense) – net	$	73	$	(356)	$	287	$	(231)


Earnings Per Share - Basic and Diluted	Three Months Ended				Nine Months Ended
Dollars per share	Sep 30, 2022		Sep 30, 2021		Sep 30, 2022		Sep 30, 2021
Dollars per share	Sep 30, 2022		Sep 30, 2021		Sep 30, 2022		Sep 30, 2021
Earnings per common share - basic	$	1.03	$	2.25	$	5.45	$	6.11
Earnings per common share - diluted	$	1.02	$	2.23	$	5.41	$	6.06


Other Intangible Assets	Sep 30, 2022						Dec 31, 2021
In millions	Gross Carrying Amount		Accum Amort		Net		Gross Carrying Amount		Accum Amort		Net
Intangible assets with finite lives:
Developed technology	$	2,633	$	(1,985)	$	648	$	2,637	$	(1,871)	$	766
Software	1,356		(960)		396		1,396		(945)		451
Trademarks/tradenames	352		(345)		7		352		(344)		8
Customer-related	3,013		(1,598)		1,415		3,204		(1,565)		1,639
Total other intangible assets, finite lives	$	7,354	$	(4,888)	$	2,466	$	7,589	$	(4,725)	$	2,864
In-process research and development	17		—		17		17		—		17
Total other intangible assets	$	7,371	$	(4,888)	$	2,483	$	7,606	$	(4,725)	$	2,881


Amortization Expense	Three Months Ended				Nine Months Ended
In millions	Sep 30, 2022		Sep 30, 2021		Sep 30, 2022		Sep 30, 2021
Other intangible assets, excluding software	$	83	$	100	$	256	$	301
Software, included in “Cost of sales”	$	20	$	22	$	60	$	67


Estimated Amortization Expense
In millions
2022	$	411
2023	$	376
2024	$	357
2025	$	266
2026	$	192
2027	$	159


Long-Term Debt	2022 Average Rate		Sep 30, 2022		2021 Average Rate		Dec 31, 2021
In millions
Promissory notes and debentures:
Final maturity 2022	—	%	$	—	8.64	%	$	121
Final maturity 2023	7.63	%	250		7.63	%	250

Final maturity 2025	5.63	%	333		5.63	%	333
Final maturity 2026	—	%	—		3.63	%	750

Final maturity 2028 and thereafter 1	5.15	%	9,364		5.15	%	9,363
Other facilities:

Foreign currency notes and loans, various rates and maturities	1.16	%	2,339		1.17	%	2,730
InterNotes®, varying maturities through 2052	3.52	%	462		3.37	%	392

Finance lease obligations 2			804				869
Unamortized debt discount and issuance costs			(267)				(297)
Long-term debt due within one year 3			(364)				(231)
Long-term debt			$	12,921			$	14,280


Committed and Available Credit Facilities at Sep 30, 2022
In millions	Committed Credit		Available Credit		Maturity Date	Interest
Five Year Competitive Advance and Revolving Credit Facility	$	5,000	$	5,000	November 2026	Floating rate
Bilateral Revolving Credit Facility	200		200		November 2022	Floating rate
Bilateral Revolving Credit Facility	200		200		September 2023	Floating rate
Bilateral Revolving Credit Facility	250		250		September 2023	Floating rate
Bilateral Revolving Credit Facility	300		300		September 2023	Floating rate
Bilateral Revolving Credit Facility	300		300		December 2023	Floating rate
Bilateral Revolving Credit Facility	300		300		December 2023	Floating rate
Bilateral Revolving Credit Facility	100		100		October 2024	Floating rate
Bilateral Revolving Credit Facility	100		100		March 2025	Floating rate
Bilateral Revolving Credit Facility	250		250		March 2025	Floating rate
Bilateral Revolving Credit Facility	100		100		March 2025	Floating rate
Bilateral Revolving Credit Facility	100		100		March 2025	Floating rate
Bilateral Revolving Credit Facility	200		200		September 2025	Floating rate
Bilateral Revolving Credit Facility	100		100		March 2026	Floating rate
Bilateral Revolving Credit Facility	100		100		October 2026	Floating rate
Bilateral Revolving Credit Facility	150		150		November 2026	Floating rate
Bilateral Revolving Credit Facility	100		100		May 2027	Floating rate
Bilateral Revolving Credit Facility	350		350		June 2027	Floating rate
Bilateral Revolving Credit Facility	200		200		September 2027	Floating rate
Total committed and available credit facilities	$	8,400	$	8,400


Guarantees	Sep 30, 2022					Dec 31, 2021
In millions	Final Expiration	Maximum Future Payments 1		Recorded Liability		Final Expiration	Maximum Future Payments 1		Recorded Liability
Guarantees	2038	$	1,249	$	205	2038	$	1,273	$	220


Lease Position	Balance Sheet Classification	Sep 30, 2022		Dec 31, 2021
In millions
Assets
Operating lease assets	Operating lease right-of-use assets	$	1,231	$	1,412
Finance lease assets	Property	1,145		1,158
Finance lease amortization	Accumulated depreciation	(418)		(368)
Total lease assets		$	1,958	$	2,202
Liabilities
Current
Operating	Operating lease liabilities - current	$	277	$	314
Finance	Long-term debt due within one year	110		106
Noncurrent
Operating	Operating lease liabilities - noncurrent	1,012		1,149
Finance	Long-Term Debt	694		763
Total lease liabilities		$	2,093	$	2,332


Lease Term and Discount Rate	Sep 30, 2022		Dec 31, 2021
Weighted-average remaining lease term
Operating leases	7.7 years		7.9 years
Finance leases	11.1 years		11.8 years
Weighted-average discount rate
Operating leases	4.21	%	3.72	%
Finance leases	4.19	%	4.17	%


Maturities of Lease Liabilities	Sep 30, 2022
In millions	Operating Leases		Finance Leases
2022	$	93	$	40
2023	298		166
2024	230		109
2025	186		76
2026	151		70
2027 and thereafter	590		545
Total future undiscounted lease payments	$	1,548	$	1,006
Less: Imputed interest	259		202
Total present value of lease liabilities	$	1,289	$	804


Lease Guarantees	Sep 30, 2022					Dec 31, 2021
In millions	Final Expiration	Maximum Future Payments		Recorded Liability		Final Expiration	Maximum Future Payments		Recorded Liability
Residual value guarantees	2031	$	245	$	—	2031	$	280	$	—