Dow Inc.

07/24/2026 | Press release | Distributed by Public on 07/24/2026 05:42

Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
This Quarterly Report on Form 10-Q is a combined report being filed by Dow Inc. and The Dow Chemical Company and its consolidated subsidiaries ("TDCC" and together with Dow Inc., "Dow" or the "Company") due to the parent/subsidiary relationship between Dow Inc. and TDCC. The information reflected in the report is equally applicable to both Dow Inc. and TDCC, except where otherwise noted. Each of Dow Inc. and TDCC is filing information in this report on its own behalf and neither company makes any representation to the information relating to the other company.
Pursuant to General Instruction H(1)(a) and (b) for Form 10-Q "Omission of Information by Certain Wholly-Owned Subsidiaries," TDCC is filing this Form 10-Q with the reduced disclosure format.
Except as otherwise indicated by the context, the term "Union Carbide" means Union Carbide Corporation, a wholly owned subsidiary of the Company. Additionally, the term "Diamond Infrastructure Solutions" means Dow InfraCo, LLC, an entity that owns and operates infrastructure assets at certain Dow locations on the U.S. Gulf Coast and became a consolidated variable interest entity upon the sale of a portion of the entity's membership interests on May 1, 2025. The term "EMEAI" refers to the geographic region of Europe, Middle East, Africa and India.
Dow's website and its content are not deemed incorporated by reference into this report.
STATEMENT ON MIDDLE EAST CONFLICT
During 2026, geopolitical instability in the Middle East, including the conflict involving Iran, Israel, and the United States and related tensions affecting maritime transit through the Strait of Hormuz, has disrupted global energy and petrochemical supply chains. The Strait of Hormuz remains a critical shipping corridor for crude oil, refined products, natural gas, and chemical feedstocks. Although the intensity and nature of the conflict have changed over time and diplomatic efforts continue, periodic security incidents, shipping restrictions and uncertainty regarding access to regional ports and trade routes have continued to affect global markets. These conditions have contributed to volatility in energy and feedstock prices, disruptions to regional production and logistics networks, longer transit times, and shifts in global trade flows as production and sourcing have been rebalanced to alternative regions. As a result, portions of the global chemical industry have experienced supply constraints, increased transportation and operating costs, and reduced supply chain reliability, particularly in Asia Pacific and Europe. Additionally, the Company's joint ventures located in the Middle East have been directly impacted by the conflict.
The Company operates in cost-advantaged geographic regions, including the U.S. & Canada and Latin America, which have not been directly impacted by the Middle East conflict. Additionally, the Company's feedstock flexibility has allowed the Company to operate its European assets competitively, despite the volatile energy and feedstock environment.
TRANSFORM TO OUTPERFORM
In 2026, the Company announced Transform to Outperform, a comprehensive set of actions designed to improve near-term Operating EBITDA by simplifying the Company's operating model, reducing its cost structure and delivering faster growth. Transform to Outperform is expected to deliver at least $2 billion near-term Operating EBITDA improvement from productivity improvements and growth and is accretive to the $1 billion structural cost reductions announced in the first quarter of 2025. In the first half of 2026, the Company delivered $190 million in Operating EBITDA improvement from Transform to Outperform.
OUTLOOK
In the second half of 2026, Dow will continue to build a more agile and resilient company that sets a new competitive standard. The Company will do so by advancing three priorities: growth and innovation in attractive end markets, investing in and strengthening its portfolio, and ensuring balanced capital allocation. Aligned to this, Transform to Outperform is delivering improvements in both growth and productivity, and the Company expects the impact of these efforts to ramp significantly throughout the remainder of this year and into 2027. Taken together, Dow's collective actions are focused on enhancing the long-term value the Company delivers across the cycle.
OVERVIEW
The following is a summary of the results for the three months ended June 30, 2026:
•The Company reported net sales in the second quarter of 2026 of $12.1 billion, up 20 percent from $10.1 billion in the second quarter of 2025; Packaging & Specialty Plastics (up 27 percent), Industrial Intermediates & Infrastructure (up 14 percent) and Performance Materials & Coatings (up 11 percent). Net sales increased in all geographic regions; Latin America (up 41 percent), the U.S. & Canada and EMEAI (both up 20 percent), and Asia Pacific (up 5 percent).
•Local price increased 20 percent compared with the second quarter of 2025 and was up in all operating segments; Packaging & Specialty Plastics (up 30 percent), Industrial Intermediates & Infrastructure (up 15 percent) and Performance Materials & Coatings (up 4 percent). Local price was up in all geographic regions; Latin America (up 32 percent), EMEAI (up 21 percent), the U.S. & Canada (up 17 percent) and Asia Pacific (up 14 percent).
•Currency had a favorable impact of 1 percent on net sales compared with the second quarter of 2025, driven by EMEAI (up 3 percent).
•Volume decreased 1 percent compared with the second quarter of 2025 and was mixed by operating segment; Packaging & Specialty Plastics (down 4 percent), Industrial Intermediates & Infrastructure (down 2 percent) and Performance Materials & Coatings (up 6 percent). Volume increased in Latin America (up 9 percent) and in the U.S. & Canada (up 3 percent) and was more than offset by a decrease in Asia Pacific (down 9 percent) and EMEAI (down 4 percent).
•Restructuring and asset related charges - net was $503 million in the second quarter of 2026, compared with $591 million in the second quarter of 2025. The second quarter of 2026 included pretax charges related to severance and related benefit costs associated with Transform to Outperform, as well as exit and disposal costs and asset write-downs and write-offs associated with the 2025 Restructuring Program. The second quarter of 2025 included asset write-downs and write-offs, severance and related benefits costs, and exit and disposal costs related to asset actions associated with the 2025 Restructuring Program.
•Equity in earnings (losses) of nonconsolidated affiliates was earnings of $36 million in the second quarter of 2026, compared with equity in losses of nonconsolidated affiliates of $30 million in the second quarter of 2025. The increase in equity earnings was primarily driven by the Company's suspension of the recognition of its share of equity losses from the Sadara joint venture in 2026.
•Net income attributable to noncontrolling interests was $81 million in the second quarter of 2026, compared with $34 million in the second quarter of 2025. The increase reflects the ownership interest in Diamond Infrastructure Solutions held by InfraPark Holdings, LLC ("InfraPark"), a subsidiary of a fund managed by Macquarie Asset Management. InfraPark purchased 40 percent of the membership interests in Diamond Infrastructure Solutions in the second quarter of 2025 and an additional 9 percent in the third quarter of 2025.
•Net income (loss) available for Dow Inc. and TDCC common stockholder(s) was income of $721 million and $715 million, respectively, in the second quarter of 2026, compared with a loss of $835 million and $816 million, respectively, in the second quarter of 2025. Earnings (loss) per share for Dow Inc. was earnings of $0.99 per share in the second quarter of 2026, compared with a loss of $1.18 per share in the second quarter of 2025.
•Cash provided by operating activities - continuing operations was $1,324 million in the second quarter of 2026, up $1,794 million compared with the second quarter of 2025. The increase is primarily driven by improved earnings in the second quarter of 2026.
•On April 9, 2026, Dow Inc. announced results from the 2026 Annual Stockholder Meeting, including the election of all incumbent directors to its Board of Directors ("Board").
•On April 9, 2026, Dow Inc. announced that its Board declared a dividend of $0.35 per share, payable on June 12, 2026, to shareholders of record as of May 29, 2026. This marks the 459th consecutive dividend paid by the Company or its affiliates since 1912.
•On April 14, 2026, Dow Inc. announced that its Board appointed Karen S. Carter as Chief Executive Officer of the Company, effective July 1, 2026. Ms. Carter succeeded Jim Fitterling, who transitioned from Chief Executive Officer to Executive Chair, effective July 1, 2026. The Board also appointed Karen S. Carter to serve as a Director of the Board, effective July 1, 2026.
•At June 30, 2026, the Company had approximately 32,800 employees.
In addition, the following events occurred subsequent to the second quarter of 2026:
•On July 15, 2026, the Company received a refund from the Canada Revenue Agency of $452 million Canadian dollars (equivalent to approximately $318 million U.S. dollars) associated with withholding taxes on the judgment paid by Nova Chemicals Corporation ("Nova") in connection with a legal matter in the first quarter of 2026.
RESULTS OF OPERATIONS
Net Sales
The following tables summarize net sales and sales variances by operating segment and geographic region from the prior year:
Summary of Sales Results Three Months Ended Six Months Ended
In millions Jun 30, 2026 Jun 30, 2025 Jun 30, 2026 Jun 30, 2025
Net sales $ 12,092 $ 10,104 $ 21,886 $ 20,535
Sales Variances by Operating Segment and Geographic Region
Three Months Ended Jun 30, 2026
Six Months Ended Jun 30, 2026
Local Price & Product Mix Currency Volume Total Local Price & Product Mix Currency Volume Total
Percentage change from prior year
Packaging & Specialty Plastics 30 % 1 % (4) % 27 % 10 % 2 % (3) % 9 %
Industrial Intermediates & Infrastructure 15 1 (2) 14 3 3 (3) 3
Performance Materials & Coatings 4 1 6 11 - 2 4 6
Total 20 % 1 % (1) % 20 % 6 % 2 % (1) % 7 %
Total, excluding the Hydrocarbons & Energy business 18 % 1 % - % 19 % 6 % 2 % - % 8 %
U.S. & Canada 17 % - % 3 % 20 % 5 % - % (1) % 4 %
EMEAI 21 3 (4) 20 7 6 (4) 9
Asia Pacific 14 - (9) 5 3 1 (5) (1)
Latin America 32 - 9 41 12 - 9 21
Total 20 % 1 % (1) % 20 % 6 % 2 % (1) % 7 %
Net sales in the second quarter of 2026 were $12.1 billion, up 20 percent from $10.1 billion in the second quarter of 2025, with local price up 20 percent, a favorable currency impact of 1 percent, and volume down 1 percent. Net sales increased in all operating segments and all geographic regions. Local price increased in all geographic regions and all operating segments, with Packaging & Specialty Plastics up 30 percent, Industrial Intermediates & Infrastructure up 15 percent, and Performance Materials & Coatings up 4 percent. Volume decreased 1 percent, driven by Asia Pacific (down 9 percent) and EMEAI (down 4 percent), partially offset by increases in Latin America (up 9 percent) and U.S. & Canada (up 3 percent). Volume decreased in Packaging & Specialty Plastics (down 4 percent) and Industrial Intermediates & Infrastructure (down 2 percent) and increased in Performance Materials & Coatings (up 6 percent). Currency favorably impacted net sales by 1 percent, driven by EMEAI (up 3 percent). Excluding the Hydrocarbons & Energy business, net sales increased 19 percent.
Net sales in the first six months of 2026 were $21.9 billion, up 7 percent from $20.5 billion in the first six months of 2025, with local price up 6 percent, a favorable currency impact of 2 percent, and volume down 1 percent. Net sales increased in all operating segments and all geographic regions except Asia Pacific. Local price increased in all geographic regions and in Packaging & Specialty Plastics (up 10 percent) and Industrial Intermediates & Infrastructure (up 3 percent) and was flat in Performance Materials & Coatings. Volume decreased 1 percent, driven by Asia Pacific (down 5 percent), EMEAI (down 4 percent) and U.S. & Canada (down 1 percent), partially offset by increases in Latin America (up 9 percent). Volume decreased in Packaging & Specialty Plastics (down 3 percent) and Industrial Intermediates & Infrastructure (down 3 percent) and increased in Performance Materials & Coatings (up 4 percent). Currency favorably impacted net sales by 2 percent, driven by EMEAI (up 6 percent) and Asia Pacific (up 1 percent). Excluding the Hydrocarbons & Energy business, net sales increased 8 percent.
Cost of Sales
Cost of sales ("COS") was $9.9 billion in the second quarter of 2026, compared with $9.5 billion in the second quarter of 2025. COS increased in the second quarter of 2026 primarily due to the impact of performance-based compensation costs, higher logistics costs, and higher raw material, feedstock and energy costs, partially offset by the Company's cost reduction initiatives. For the first six months of 2026, COS was $19.1 billion compared with $19.3 billion in the first six months of 2025. COS for the first six months of 2026 decreased primarily due to the Company's cost reduction initiatives and lower raw material, feedstock and energy costs, partially offset by higher performance-based compensation costs and higher logistics costs. COS as a percentage of net sales was 82.1 percent in the second quarter of 2026 (94.2 percent in the second quarter of 2025) and 87.2 percent for the first six months of 2026 (93.9 percent for the first six months of 2025).
Research and Development Expenses
Research and development ("R&D") expenses totaled $207 million in the second quarter of 2026, compared with $188 million in the second quarter of 2025. R&D expenses increased in the second quarter of 2026 primarily due to higher performance-based compensation costs which more than offset the impact of the Company's cost reduction initiatives. R&D expenses for the first six months of 2026 and 2025 were $388 million as higher performance-based compensation costs were offset by the Company's cost reduction initiatives.
Selling, General and Administrative Expenses
Selling, general and administrative ("SG&A") expenses totaled $535 million in the second quarter of 2026, compared with $347 million in the second quarter of 2025. SG&A expenses increased in the second quarter of 2026 primarily due to costs to achieve Transform to Outperform and higher performance-based compensation costs which more than offset the Company's cost reduction initiatives. For the first six months of 2026, SG&A expenses were $952 million, compared with $713 million in the first six months of 2025. SG&A expenses for the first six months of 2026 increased primarily due to costs to achieve Transform to Outperform and higher performance-based compensation costs, partially offset by the Company's cost reduction initiatives.
Amortization of Intangibles
Amortization of intangibles was $40 million in the second quarter of 2026 compared with $63 million in the second quarter of 2025. In the first six months of 2026, amortization of intangibles was $86 million, compared with $139 million in the first six months of 2025. Amortization of intangibles decreased primarily due to certain intangible assets becoming fully amortized in 2025.
Restructuring and Asset Related Charges - Net
Transform to Outperform
On January 26, 2026, the Dow Inc. Board of Directors ("Board") approved Transform to Outperform, a comprehensive set of actions designed to improve near-term Operating EBITDA by simplifying the Company's operating model, reducing its cost structure and delivering faster growth. As a result of these actions, in the first quarter of 2026, the Company recorded pretax charges of $27 million for severance and related benefit costs, related to Corporate. In the second quarter of 2026, the Company recorded pretax charges of $445 million for severance and related benefit costs, related to Corporate. See Note 4 to the Consolidated Financial Statements for additional information.
2025 Restructuring Program
On January 27, 2025, the Board approved targeted actions to further achieve the Company's cost reduction initiatives in response to ongoing macroeconomic uncertainty, while reinforcing its long-term competitiveness across the economic cycle. As a result of these actions, in the first quarter of 2025, the Company recorded pretax charges of $207 million for severance and related benefits costs, related to Corporate.
On June 30, 2025, the Board approved restructuring actions to rationalize the Company's global asset footprint, including certain actions identified as part of the Company's previously announced strategic review of its European assets and certain corporate and other assets, and to enhance the Company's competitiveness over the economic cycle. The program includes asset write-down and write-off charges, severance and related benefit costs and other exit and disposal costs. As a result of these actions, in the second quarter of 2025, the Company recorded pretax restructuring charges of $591 million, consisting of severance and related benefit costs of $154 million, asset write-downs and write-offs of $334 million and costs associated with exit and disposal activities of $103 million. Restructuring charges by segment were as follows: $158 million in Packaging & Specialty Plastics, $89 million in Industrial Intermediates & Infrastructure, $147 million in Performance Materials & Coatings and $197 million in Corporate. In the second quarter of 2026, the Company recorded additional pretax restructuring charges of
$58 million, consisting of asset write-downs and write-offs of $8 million and costs associated with exit and disposal activities of $50 million. Restructuring charges by segment were as follows: $1 million in Industrial Intermediates & Infrastructure and $57 million in Performance Materials & Coatings. See Note 4 to the Consolidated Financial Statements for additional information.
2023 Restructuring Program
Actions related to the restructuring program approved by the Board on January 25, 2023 were complete at the end of the second quarter of 2025. In the first quarter of 2025, the Company recorded an additional pretax restructuring charge of $5 million for asset write-downs and write-offs and an asset related credit adjustment of $4 million, related to Industrial Intermediates & Infrastructure. See Note 4 to the Consolidated Financial Statements for additional information.
Equity in Earnings (Losses) of Nonconsolidated Affiliates
The Company's share of equity in earnings of nonconsolidated affiliates was $36 million in the second quarter of 2026, compared with equity in losses of nonconsolidated affiliates of $30 million in the second quarter of 2025, driven by the Company's suspension of the recognition of its share of equity losses from the Sadara joint venture in 2026. The Company's share of equity in losses of nonconsolidated affiliates was $267 million for the first six months of 2026, compared with equity in losses of nonconsolidated affiliates of $50 million for the first six months of 2025. The increase was primarily related to an adjustment to the Company's liability associated with its guarantee of Sadara's project financing debt and was related to Packaging & Specialty Plastics ($81 million) and Industrial Intermediates & Infrastructure ($211 million). This was partially offset by the Company suspending recognition of its share of equity losses from Sadara in 2026. Cash dividends from nonconsolidated affiliates were $276 million for the first six months of 2026, compared with $170 million for the first six months of 2025. See Notes 9 and 12 for additional information.
Sundry Income (Expense) - Net
Sundry income (expense) - net for the three months ended June 30, 2026 was income of $125 million and $118 million for Dow Inc. and TDCC, respectively, compared with income of $147 million and $163 million, respectively, for the three months ended June 30, 2025. The second quarter of 2026 included gains on the sales of other assets and investments, foreign currency exchange gains, and non-operating pension and postretirement benefit plan credits. The second quarter of 2025 included a gain from the divestiture of the Company's soil fumigation product line, non-operating pension and postretirement benefit plan credits, and foreign currency exchange gains. See Notes 5 and 16 to the Consolidated Financial Statements for additional information.
Sundry income (expense) - net for the six months ended June 30, 2026 was income of $246 million and $239 million for Dow Inc. and TDCC, respectively, compared with income of $160 million and $176 million, respectively, for the six months ended June 30, 2025. The first six months of 2026 included gains on the sales of other assets and investments, foreign currency exchange gains, non-operating pension and postretirement benefit plan credits, and a gain associated with the Nova ethylene asset matter. The first six months of 2025 included a gain from the divestiture of the Company's soil fumigation product line, non-operating pension and postretirement benefit plan credits, and foreign currency exchange gains, partially offset by a loss on early extinguishment of debt. See Notes 5, 12 and 16 to the Consolidated Financial Statements for additional information.
Interest Expense and Amortization of Debt Discount
Interest expense and amortization of debt discount was $210 million in the second quarter of 2026, compared with $209 million in the second quarter of 2025. Interest expense and amortization of debt discount was $429 million in the first six months of 2026, compared with $425 million in the first six months of 2025. See Liquidity and Capital Resources in Management's Discussion and Analysis of Financial Condition and Results of Operations for additional information.
Provision for Income Taxes
The Company's effective tax rate fluctuates based on, among other factors, where income is earned, the level of income relative to tax attributes and the level of equity earnings, since most earnings from the Company's equity method investments are taxed at the joint venture level. In the second quarter of 2026, the Company reported a provision for income taxes of $69 million, resulting in an effective tax rate of 7.9 percent. In the second quarter of 2025, the Company reported a provision for income taxes of $142 million, resulting in a negative effective tax rate of 21.5 percent. For the first six months of 2026, the Company reported a provision for income taxes of $124 million, resulting in an effective tax rate of 25.8 percent. For the first six months of 2025, the Company reported a provision
for income taxes of $58 million, resulting in a negative effective tax rate of 5.6 percent. The reported provision for income taxes and effective tax rates for TDCC are substantially similar.
The provision for income taxes for the second quarter of 2026 was favorably impacted by changes in the Company's ability to utilize foreign tax credits associated with cash proceeds received in March 2026 related to the Nova ethylene asset matter, partially offset by tax charges related to changes in uncertain tax positions. The provision for income taxes for the first six months of 2026 was primarily impacted by the geographic mix of earnings. The provision for income taxes for the second quarter and first six months of 2025 was unfavorably impacted by the recording of valuation allowances in certain foreign jurisdictions of $242 million and losses attributable to jurisdictions for which no tax benefit can be recognized, partially offset by a tax credit of $89 million related to the sale of a portion of the Company's membership interests in Diamond Infrastructure Solutions, resulting in a negative effective tax rate for both periods.
Net Income Attributable to Noncontrolling Interests
Net income attributable to noncontrolling interests was $81 million in the second quarter of 2026, compared with $34 million in the second quarter of 2025. Net income attributable to noncontrolling interests was $169 million in the first six months of 2026, compared with $51 million for the first six months of 2025. The increase in net income attributable to noncontrolling interests reflects the ownership interest in Diamond Infrastructure Solutions held by InfraPark, which purchased 40 percent of the membership interests in Diamond Infrastructure Solutions in the second quarter of 2025 and an additional 9 percent in the third quarter of 2025. See Notes 15 and 20 to the Consolidated Financial Statements for additional information.
Net Income (Loss) Available for Common Stockholder(s)
Dow Inc.
Net income (loss) available for Dow Inc. common stockholders was income of $721 million, or $0.99 per share, in the second quarter of 2026, compared with a loss of $835 million, or $1.18 per share, in the second quarter of 2025. Net income (loss) available for Dow Inc. common stockholders was income of $188 million, or $0.25 per share, in the first six months of 2026, compared with a loss of $1,142 million, or $1.62 per share, in the first six months of 2025. See Note 7 to the Consolidated Financial Statements for details on Dow Inc.'s earnings per share calculations.
TDCC
Net income (loss) available for the TDCC common stockholder was income of $715 million in the second quarter of 2026, compared with a loss of $816 million in the second quarter of 2025. Net income (loss) available for the TDCC common stockholder was income of $184 million in the first six months of 2026, compared with a loss of $1,121 million in the first six months of 2025. TDCC's common shares are owned solely by Dow Inc.
SEGMENT RESULTS
For further discussion of the Company's segments, see Part I, Item 1. Business of the combined Dow Inc. and TDCC Annual Report on Form 10-K for the fiscal year ended December 31, 2025 ("2025 10-K"), filed with the SEC on February 3, 2026.
Dow's measure of profit/loss for segment reporting purposes is Operating EBIT as this is the manner in which the chief executive officer, chief financial officer, general counsel, and senior vice president of corporate development, together the chief operating decision maker ("CODM"), assesses performance and allocates resources for the three operating segments. The CODM compares quarterly results to both the year-ago and sequential periods to assess performance and allocate resources to each segment. The Company defines Operating EBIT as earnings (i.e., "Income (loss) before income taxes") before interest, excluding the impact of significant items. Operating EBIT by segment includes all operating items relating to the businesses; items that principally apply to Dow as a whole are assigned to Corporate. See Note 21 to the Consolidated Financial Statements for reconciliations of these measures.
PACKAGING & SPECIALTY PLASTICS
Packaging & Specialty Plastics Three Months Ended Six Months Ended
In millions Jun 30, 2026 Jun 30, 2025 Jun 30, 2026 Jun 30, 2025
Net sales $ 6,385 $ 5,025 $ 11,304 $ 10,335
Operating EBIT $ 1,278 $ 71 $ 1,486 $ 413
Equity earnings (losses) 1
$ 19 $ 7 $ (44) $ 46
1.The six months ended June 30, 2026 includes a significant item for $81 million of losses related to an adjustment to the Company's liability associated with its guarantee of Sadara's project financing debt.
Packaging & Specialty Plastics Three Months Ended Six Months Ended
Percentage change from prior year Jun 30, 2026 Jun 30, 2026
Change in Net Sales from Prior Period due to:
Local price & product mix 30 % 10 %
Currency 1 2
Volume (4) (3)
Total 27 % 9 %
Packaging & Specialty Plastics net sales were $6,385 million in the second quarter of 2026, up 27 percent from net sales of $5,025 million in the second quarter of 2025, with local price up 30 percent, currency up 1 percent, and volume down 4 percent. Local price increased in Packaging and Specialty Plastics in all geographic regions, driven by higher polyethylene prices. Local price increased in Hydrocarbons & Energy, driven by olefins and aromatics in the U.S. & Canada and EMEAI. Currency had a favorable impact on sales in both businesses and was driven by EMEAI. Volume decreased in Packaging and Specialty Plastics, driven by polyethylene declines in Asia Pacific and EMEAI impacted by the Middle East conflict. Volume decreased in Hydrocarbons & Energy due to planned maintenance activity in the U.S. Gulf Coast and the impact of idling an ethylene cracker in EMEAI in mid-2025, which successfully restarted in June 2026.
Operating EBIT was $1,278 million in the second quarter of 2026, up $1,207 million from Operating EBIT of $71 million in the second quarter of 2025. Operating EBIT increased primarily due to higher selling prices and the impact of the Company's self-help initiatives, partially offset by higher planned maintenance and performance-based compensation costs.
Packaging & Specialty Plastics net sales were $11,304 million in the first six months of 2026, up 9 percent from net sales of $10,335 million in the first six months of 2025, with local price up 10 percent, currency up 2 percent, and volume down 3 percent. Local price increased in Packaging and Specialty Plastics in all geographic regions, driven by higher pricing of polyethylene. Local price increased in Hydrocarbons & Energy, driven by olefins and aromatics in EMEAI and the U.S. & Canada. Currency had a favorable impact on sales in both businesses and was primarily driven by EMEAI. Volume was flat in Packaging and Specialty Plastics as higher volumes in polyethylene were offset by lower non-recurring licensing sales. Volume decreased in Hydrocarbons & Energy due to planned maintenance activity in the U.S. Gulf Coast and the impact of idling an ethylene cracker in EMEAI in mid-2025, which successfully restarted in June.
Operating EBIT was $1,486 million in the first six months of 2026, up $1,073 million from Operating EBIT of $413 million in the first six months of 2025. Operating EBIT increased primarily due to higher selling prices and the impact of the Company's self-help initiatives, partially offset by higher planned maintenance and performance-based compensation costs.
INDUSTRIAL INTERMEDIATES & INFRASTRUCTURE
Industrial Intermediates & Infrastructure Three Months Ended Six Months Ended
In millions Jun 30, 2026 Jun 30, 2025 Jun 30, 2026 Jun 30, 2025
Net sales $ 3,166 $ 2,786 $ 5,792 $ 5,641
Operating EBIT $ 246 $ (185) $ 128 $ (313)
Equity earnings (losses) 1
$ 15 $ (39) $ (227) $ (97)
1.The six months ended June 30, 2026 includes a significant item for $211 million of losses related to an adjustment to the Company's liability associated with its guarantee of Sadara's project financing debt.
Industrial Intermediates & Infrastructure Three Months Ended Six Months Ended
Percentage change from prior year Jun 30, 2026 Jun 30, 2026
Change in Net Sales from Prior Period due to:
Local price & product mix 15 % 3 %
Currency 1 3
Volume (2) (3)
Total 14 % 3 %
Industrial Intermediates & Infrastructure net sales were $3,166 million in the second quarter of 2026, up 14 percent from net sales of $2,786 million in the second quarter of 2025, with local price up 15 percent, currency up 1 percent, and volume down 2 percent. Local prices increased across both businesses and all geographic regions. Currency had a favorable impact on sales and was driven by EMEAI. Volume decreased in Polyurethanes & Construction Chemicals, primarily in Asia Pacific and EMEAI due to the impact of the Middle East conflict, which more than offset increased volume in industrial market applications. Volume increased in Industrial Solutions, primarily in the U.S. & Canada, driven by increased demand for energy applications and higher volumes from recent alkoxylation investments, which more than offset declines in Asia Pacific and EMEAI primarily due to the impact of the conflict in the Middle East.
Operating EBIT was $246 million in the second quarter of 2026, up $431 million from an Operating EBIT loss of $185 million in the second quarter of 2025. Operating EBIT increased as higher margins, the impact of the Company's self-help initiatives, lower planned maintenance activity and the suspension of the recognition of equity losses from Sadara more than offset the impact of higher performance-based compensation costs.
Industrial Intermediates & Infrastructure net sales were $5,792 million in the first six months of 2026, up 3 percent from net sales of $5,641 million in the first six months of 2025, with local price up 3 percent, currency up 3 percent, and volume down 3 percent. Local price increased in both businesses and across all geographic regions. Currency had a favorable impact on sales in both businesses and was driven by EMEAI. Volume decreased in Polyurethanes & Construction Chemicals due to the impact of the Middle East conflict, which more than offset increased volume in industrial market applications. Volume decreased in Industrial Solutions as the impact of the conflict in the Middle East more than offset increases in energy applications and higher volumes from recent alkoxylation investments.
Operating EBIT was $128 million in the first six months of 2026, up $441 million from Operating EBIT loss of $313 million in the first six months of 2025. Operating EBIT increased primarily due to higher margins, the impact of the Company's self-help initiatives, lower planned maintenance activity and the suspension of the recognition of equity losses from Sadara, which more than offset the impact of higher performance-based compensation costs.
PERFORMANCE MATERIALS & COATINGS
Performance Materials & Coatings Three Months Ended Six Months Ended
In millions Jun 30, 2026 Jun 30, 2025 Jun 30, 2026 Jun 30, 2025
Net sales $ 2,361 $ 2,129 $ 4,441 $ 4,200
Operating EBIT $ 133 $ 152 $ 250 $ 201
Equity earnings $ 1 $ 1 $ 2 $ 1
Performance Materials & Coatings Three Months Ended Six Months Ended
Percentage change from prior year Jun 30, 2026 Jun 30, 2026
Change in Net Sales from Prior Period due to:
Local price & product mix 4 % - %
Currency 1 2
Volume 6 4
Total 11 % 6 %
Performance Materials & Coatings net sales were $2,361 million in the second quarter of 2026, up 11 percent from net sales of $2,129 million in the second quarter of 2025, with volume up 6 percent, local price up 4 percent, and a favorable currency impact of 1 percent. Coatings & Performance Monomers volume increased across all geographic regions, driven by higher demand for acrylic monomers. Volume increased in Consumer Solutions in all geographic regions, primarily in downstream silicones, led by home care and consumer and electronics. Local price in Coatings & Performance Monomers increased across all geographic regions, primarily in acrylic monomers and architectural coatings. Local price was flat in Consumer Solutions with gains in Asia Pacific and EMEAI offset by declines in the U.S. & Canada and Latin America. Local price gains in downstream silicones, driven by consumer and electronics, were offset by declines in upstream siloxanes.
Operating EBIT was $133 million in the second quarter of 2026, down $19 million from Operating EBIT of $152 million in the second quarter of 2025. Operating EBIT decreased as higher performance-based compensation costs, planned maintenance activity, and fixed costs impacted by the closure of the Barry, U.K., siloxanes plant more than offset higher demand, reduced intangible asset amortization expenses in Consumer Solutions, and the impact of the Company's self-help initiatives.
Performance Materials & Coatings net sales were $4,441 million in the first six months of 2026, up 6 percent from net sales of $4,200 million in the first six months of 2025, with volume up 4 percent, a favorable currency impact of 2 percent, and local price flat. Coatings & Performance Monomers volume increased across all geographic regions, driven by higher demand for acrylic monomers. Volume increased in Consumer Solutions in all geographic regions except EMEAI. Volume increased primarily in downstream silicones, led by consumer and electronics and home care. The favorable currency impact was driven by EMEAI and Asia Pacific in both businesses. Local price in Coatings & Performance Monomers increased across all geographic regions except Asia Pacific, primarily in acrylic monomers. Local price decreased in Consumer Solutions due to declines in upstream siloxanes.
Operating EBIT was $250 million in the first six months of 2026, up $49 million from Operating EBIT of $201 million in the first six months of 2025. Operating EBIT increased in both businesses primarily due to higher sales volume, the impact of the Company's self-help initiatives, and reduced intangible asset amortization expenses in Consumer Solutions, which more than offset higher performance-based compensation costs.
CORPORATE
Corporate Three Months Ended Six Months Ended
In millions Jun 30, 2026 Jun 30, 2025 Jun 30, 2026 Jun 30, 2025
Net sales $ 180 $ 164 $ 349 $ 359
Operating EBIT $ (9) $ (59) $ (62) $ (92)
Equity earnings $ 1 $ 1 $ 2 $ -
Net sales for Corporate, which primarily relate to the Company's insurance operations, were $180 million in the second quarter of 2026, an increase from net sales of $164 million in the second quarter of 2025. Net sales were $349 million in the first six months of 2026, a decrease from net sales of $359 million in the first six months of 2025.
Operating EBIT was a loss of $9 million in the second quarter of 2026, compared with a loss of $59 million in the second quarter of 2025. Operating EBIT increased primarily due to increased investment gains and the benefit of the Company's cost reduction initiatives. Operating EBIT was a loss of $62 million in the first six months of 2026, compared with a loss of $92 million in the first six months of 2025. Operating EBIT increased due to increased investment gains and the impact of the Company's cost reduction initiatives, partially offset by higher environmental expenses.
CHANGES IN FINANCIAL CONDITION
The Company had cash and cash equivalents of $3,973 million at June 30, 2026 and $3,816 million at December 31, 2025, of which $1,875 million at June 30, 2026 and $2,636 million at December 31, 2025 was held by subsidiaries in foreign countries, including U.S. territories. For each of its foreign subsidiaries, Dow makes an assertion regarding the amount of earnings intended for permanent reinvestment, with the balance available to be repatriated to the United States.
Cash held by foreign subsidiaries for permanent reinvestment is generally used to finance the subsidiaries' operational activities and future foreign investments. Dow has the ability to repatriate additional funds to the United States, which could result in an adjustment to the tax liability for foreign withholding taxes, foreign and/or U.S. state income taxes and the impact of foreign currency movements. At June 30, 2026, management believed that sufficient liquidity was available in the United States. The Company has and expects to continue repatriating certain funds from its non-U.S. subsidiaries that are not needed to finance local operations; however, these particular repatriation activities have not and are not expected to result in a significant incremental tax liability to the Company.
The Company's cash flows from operating, investing and financing activities, as reflected in the consolidated statements of cash flows, are summarized in the following table:
Cash Flow Summary Dow Inc. TDCC
Six Months Ended Six Months Ended
Jun 30, 2026 Jun 30, 2025 Jun 30, 2026 Jun 30, 2025
In millions
Cash provided by (used for):
Operating activities - continuing operations $ 2,448 $ (366) $ 2,464 $ (384)
Operating activities - discontinued operations 7 (13) - -
Operating activities $ 2,455 $ (379) $ 2,464 $ (384)
Investing activities $ (1,420) $ (962) $ (1,420) $ (962)
Financing activities $ (807) $ 1,341 $ (816) $ 1,346
Cash Flows from Operating Activities
Cash provided by operating activities from continuing operations in the first six months of 2026 was primarily driven by the Company's cash earnings, a cash receipt from Nova related to a judgment on the ethylene asset matter and dividends from equity method investments, partially offset by cash used for working capital, income tax payments and performance-based compensation. Cash used for operating activities from continuing operations in the first six
months of 2025 was primarily driven by cash used for working capital and performance-based compensation, which were partially offset by the Company's cash earnings and dividends from equity method investments.
Net Working Capital Dow Inc. TDCC
Jun 30, 2026 Dec 31, 2025 Jun 30, 2026 Dec 31, 2025
In millions
Current assets $ 20,871 $ 18,062 $ 20,820 $ 18,027
Current liabilities 11,931 9,183 11,816 9,076
Net working capital $ 8,940 $ 8,879 $ 9,004 $ 8,951
Current ratio 1.75:1 1.97:1 1.76:1 1.99:1
Working Capital Metrics Three Months Ended
Jun 30, 2026 Mar 31, 2026 Jun 30, 2025
Days sales outstanding in trade receivables 44 46 47
Days sales in inventory 64 66 64
Days payables outstanding 58 56 64
Cash provided by (used for) operating activities from discontinued operations in the first six months of 2026 and 2025 reflected cash payments and receipts for certain agreements and matters related to the separation from DowDuPont Inc. ("DowDuPont").
Cash Flows from Investing Activities
Cash used for investing activities in the first six months of 2026 and 2025 was primarily for capital expenditures and purchases of investments, which were partially offset by proceeds from sales and maturities of investments. The first six months of 2026 also included cash outflows to nonconsolidated affiliates primarily related to Sadara (see Note 12 for additional information). The first six months of 2025 also included a cash inflow related to the sale of the soil fumigation product line and certain related assets.
The Company's capital expenditures were $1,135 million in the first six months of 2026, compared with $1,347 million in the first six months of 2025. The Company expects full year capital spending to be approximately $2.5 billion, including capital spending related to the construction of the Fort Saskatchewan Path2Zero project. As evidenced across this and prior economic cycles, the Company will proactively adjust its spending as economic conditions evolve.
Cash Flows from Financing Activities
Cash used for financing activities in the first six months of 2026 for Dow Inc. was primarily related to dividends paid to stockholders, payments on long-term debt and distributions to noncontrolling interests. TDCC included cash outflows for dividends paid to Dow Inc. Cash provided by financing activities in the first six months of 2025 was primarily related to proceeds from the sale of a minority stake in the Company's consolidated infrastructure entity and proceeds from the issuance of long-term debt, which were partially offset by payments on long-term debt. In addition, Dow Inc. included cash outflows for dividends paid to stockholders and TDCC included cash outflows for dividends paid to Dow Inc.
Dow Inc. Non-GAAP Cash Flow Measures
Free Cash Flow
Dow defines Free Cash Flow as "Cash provided by operating activities - continuing operations," less capital expenditures. Under this definition, Free Cash Flow represents the cash generated by Dow from operations after investing in its asset base. Free Cash Flow, combined with cash balances and other sources of liquidity, represents the cash available to fund obligations and provide returns to shareholders. Free Cash Flow is an integral financial measure used in the Company's financial planning process.
Operating EBITDA
Dow defines Operating EBITDA as earnings (i.e., "Income (loss) before income taxes") before interest, depreciation and amortization, excluding the impact of significant items.
Cash Flow Conversion (Cash Flow from Operations to Operating EBITDA)
Dow defines Cash Flow Conversion (Cash Flow from Operations to Operating EBITDA) as "Cash provided by (used for) operating activities - continuing operations," divided by Operating EBITDA. Management believes Cash Flow Conversion is an important financial metric as it helps the Company determine how efficiently it is converting its earnings into cash flow.
These financial measures are not recognized in accordance with accounting principles generally accepted in the United States of America ("GAAP") and should not be viewed as alternatives to GAAP financial measures of performance. All companies do not calculate non-GAAP financial measures in the same manner and, accordingly, Dow's definitions may not be consistent with the methodologies used by other companies.
Reconciliation of Free Cash Flow
Six Months Ended
Jun 30, 2026 Jun 30, 2025
In millions
Cash provided by (used for) operating activities - continuing operations (GAAP) $ 2,448 $ (366)
Capital expenditures (1,135) (1,347)
Free Cash Flow (non-GAAP) $ 1,313 $ (1,713)
Reconciliation of Cash Flow Conversion (Cash Flow from Operations to Operating EBITDA)
Six Months Ended
Jun 30, 2026 Jun 30, 2025
In millions
Net income (loss) (GAAP) $ 357 $ (1,091)
+ Provision for income taxes 124 58
Income (loss) before income taxes $ 481 $ (1,033)
- Interest income 80 67
+ Interest expense and amortization of debt discount 429 425
- Significant items ¹ (972) (884)
Operating EBIT (non-GAAP) $ 1,802 $ 209
+ Depreciation and amortization 1,383 1,438
Operating EBITDA (non-GAAP) $ 3,185 $ 1,647
Cash provided by (used for) operating activities - continuing operations (GAAP) $ 2,448 $ (366)
Cash flow from operations to net income (GAAP) 2
685.7 % N/A
Cash Flow Conversion (Cash flow from operations to Operating EBITDA) (non-GAAP) 76.9 % (22.2) %
1.The six months ended June 30, 2026 includes costs to achieve and severance and related benefit costs associated with Transform to Outperform; a loss due to change in fair value of the estimated liability associated with the Company's guarantee of Sadara's project financing debt; asset charges and exit and disposal costs associated with the Company's 2025 Restructuring Program; and implementation costs associated with the Company's 2025 Restructuring Program; partially offset by a gain associated with a legal matter with Nova and amounts associated with agreements entered into with DuPont and Corteva as part of the separation and distribution. The six months ended June 30, 2025 includes severance and related benefit costs and impairment charges related to the 2025 Restructuring Program; implementation costs associated with the Company's 2025 Restructuring Program and the sale of membership interests of Diamond Infrastructure Solutions; a gain on the sale of the Company's soil fumigation product line; a gain associated with the reassessment of liabilities for certain accrued Groundwater Matters, partially offset by the settlement of a separate claim related to Groundwater Matters; charges associated with agreements entered into with DuPont and Corteva as part of the separation and distribution; charges related to an arbitration agreement for historical product claims from a divested business; a loss on early extinguishment of debt; restructuring charges and implementation and efficiency costs associated with the Company's 2023 Restructuring Program. See Note 21 to the Consolidated Financial Statements for additional information.
2.Cash flow from operations to net income is not applicable for the six months ended June 30, 2025 due to a net loss for the period.
Liquidity & Financial Flexibility
The Company's primary source of incremental liquidity is cash flows from operating activities. The generation of cash from operations over the economic cycle and the Company's ability to access capital markets is expected to meet the Company's cash requirements for working capital, capital expenditures, debt maturities, contributions to pension plans, dividend distributions to stockholders, share repurchases and other needs. In addition to cash from operating activities, the Company's current liquidity sources also include TDCC's U.S. and Euromarket commercial paper programs, committed and uncommitted credit facilities, committed accounts receivable facilities, a medium-term notes program, a U.S. retail note program ("InterNotes®") and other debt markets.
The Company continues to maintain a strong financial position with all of its committed credit facilities undrawn and fully available at June 30, 2026. Cash and committed and available forms of liquidity were $13.5 billion at June 30, 2026. The Company also has no substantive long-term debt maturities due until 2029. As a well-known seasoned issuer, the Company has ready access to debt capital markets, subject to market conditions, as an additional source of liquidity. Additional details on sources of liquidity are as follows:
Commercial Paper
TDCC issues promissory notes under its U.S. and Euromarket commercial paper programs. TDCC had no commercial paper outstanding at June 30, 2026. TDCC maintains access to the commercial paper market at competitive rates. Amounts outstanding under TDCC's commercial paper programs during the period may be greater or less than the amount reported at the end of the period. TDCC did not issue commercial paper subsequent to June 30, 2026.
Committed Credit Facilities
The Company also has the ability to access liquidity through TDCC's committed and available credit facilities. At June 30, 2026, TDCC had total committed and available credit facilities of $8.2 billion.
Uncommitted Credit Facilities
The Company has entered into various uncommitted bilateral credit arrangements as a potential source of excess liquidity. These lines can be used to support short-term liquidity needs and for general purposes. The Company had no drawdowns outstanding at June 30, 2026.
Accounts Receivable Securitization Facilities
In addition to the above credit facilities, the Company maintains a committed accounts receivable facility in the United States where eligible trade accounts receivable, up to $900 million, may be sold at any point in time and is set to expire in November 2028. The Company also maintains a committed accounts receivable facility in Europe where eligible trade accounts receivable, up to €400 million, may be sold at any point in time and is set to expire in March 2029. In the first six months of 2026, there were no sales of receivables under the committed accounts receivable facilities ($106 million in sales of receivables in the first six months of 2025). No sold receivables were outstanding with the facilities at June 30, 2026.
In addition, the Company has an uncommitted accounts receivable facility in the United States providing additional liquidity, set to expire in November 2028. The Company also maintains an uncommitted accounts receivable facility in Europe providing additional liquidity, set to expire in March 2029. There were no sales of receivables under the uncommitted accounts receivable facilities in the first six months of 2026 ($147 million in sales of receivables in the first six months of 2025). No sold receivables were outstanding with the facilities at June 30, 2026. See Note 10 to the Consolidated Financial Statements for additional information.
Early Settlement of Letters of Credit
The Company utilizes, from time-to-time, letters of credit discounting programs to manage and expedite the settlement of letters of credit in certain regions. These letters of credit are associated with accounts receivable and the Company retains no interest in the transferred letters of credit or receivables once sold.
Accounts Receivable Discounting Facilities
The Company has access to accounts receivable discounting facilities, under which receivables are transferred with limited recourse. The Company retains no interest in the transferred receivables once sold. There were no sales of receivables under the discounting facilities in the first six months of 2026 ($285 million sales of receivables in the first six months of 2025). No sold receivables were outstanding with the facilities at June 30, 2026. See Note 10 to the Consolidated Financial Statements for additional information.
The Company maintains these facilities and also participates in certain customers' supply chain financing and other early pay programs as a routine source of working capital.
Company-Owned Life Insurance
The Company has investments in company-owned life insurance ("COLI") policies, which are recorded at their cash surrender value as of each balance sheet date. The Company has the ability to monetize its investment in its COLI policies as an additional source of liquidity. At December 31, 2025, the Company had monetized $197 million of its existing COLI policies' surrender value. In the second quarter of 2026, the Company repaid the drawdown against
the cash surrender value, which resulted in no monetization of its existing COLI policies' surrender value at June 30, 2026. See Note 5 to the Consolidated Financial Statements for additional information.
Debt
As the Company continues to maintain its strong balance sheet and financial flexibility, management is focused on net debt (a non-GAAP financial measure), as the Company believes this is the best representation of its financial leverage at this point in time. As shown in the following table, net debt is equal to total gross debt minus "Cash and cash equivalents" and "Marketable securities."
Total Debt Dow Inc. TDCC
Jun 30, 2026 Dec 31, 2025 Jun 30, 2026 Dec 31, 2025
In millions
Notes payable $ 86 $ 90 $ 86 $ 90
Long-term debt due within one year 758 222 758 222
Long-term debt 17,151 17,849 17,151 17,849
Gross debt $ 17,995 $ 18,161 $ 17,995 $ 18,161
- Cash and cash equivalents 3,973 3,816 3,973 3,816
- Marketable securities 1
443 385 443 385
Net debt $ 13,579 $ 13,960 $ 13,579 $ 13,960
Total equity $ 17,367 $ 17,522 $ 17,559 $ 17,726
Gross debt as a percent of total capitalization 50.9 % 50.9 % 50.6 % 50.6 %
Net debt as a percent of total capitalization 43.9 % 44.3 % 43.6 % 44.1 %
1.Included in "Other current assets" in the consolidated balance sheets.
The Company may at any time repurchase certain debt securities in the open market or in privately negotiated transactions subject to: the applicable terms under which any such debt securities were issued, certain internal approvals of the Company, and applicable laws and regulations of the relevant jurisdiction in which any such potential transactions might take place. This in no way obligates the Company to make any such repurchases nor should it be considered an offer to do so.
TDCC's public debt instruments and primary, private credit agreements contain, among other provisions, certain customary restrictive covenant and default provisions. TDCC's most significant debt covenant with regard to its financial position is the obligation to maintain the ratio of its consolidated indebtedness to consolidated capitalization at no greater than 0.70 to 1.00 at any time the aggregate outstanding amount of loans under the Five Year Competitive Advance and Revolving Credit Facility Agreement ("Revolving Credit Agreement") equals or exceeds $500 million. The ratio of TDCC's consolidated indebtedness to consolidated capitalization as defined in the Revolving Credit Agreement was 0.48 to 1.00 at June 30, 2026. Management believes TDCC was in compliance with all of its covenants and default provisions at June 30, 2026. For information on TDCC's debt covenants and default provisions, see Note 14 to the Consolidated Financial Statements included in the 2025 10-K. There were no material changes to the debt covenants and default provisions related to TDCC's outstanding long-term debt and primary, private credit agreements in the first six months of 2026.
In the second quarter of 2026, the Company redeemed $12 million aggregate principal amount of 6.30 percent notes due March 2033, $10 million aggregate principal amount of 5.65 percent notes due March 2036, $20 million aggregate principal amount of 5.25 percent notes due November 2041, $12 million aggregate principal amount of 5.55 percent notes due November 2048, $10 million aggregate principal amount of 6.90 percent notes due May 2053, and $13 million aggregate principal amount of 5.95 percent notes due March 2055. As a result of the redemption, the Company recognized a pretax gain on the early extinguishment of debt of $3 million, included in "Sundry income (expense) - net" in the consolidated statements of income.
In the first six months of 2026, the Company issued an aggregate principal amount of $81 million of InterNotes®. Additionally, the Company repaid $54 million of long-term debt.
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 June 30, 2026, TDCC's credit ratings were as follows:
Credit Ratings Long-Term Rating Short-Term Rating Outlook
Fitch Ratings BBB F2 Stable
Moody's Ratings Baa3 P-3 Negative
Standard & Poor's BBB- A-3 Negative
On February 18, 2026, Standard & Poor's announced a long-term credit rating change for TDCC from BBB to BBB- and a short-term credit rating change from A-2 to A-3, with its outlook remaining negative. On February 27, 2026, Moody's Ratings announced a long-term credit rating change for TDCC from Baa2 to Baa3 and a short-term credit rating change from P-2 to P-3, with its outlook remaining negative. The credit rating agencies' decisions reflect the impact of market conditions on the Company's operating results and cash flow, while recognizing the Company's liquidity, strong asset base and strategic cost actions. On March 16, 2026, Fitch Ratings affirmed TDCC's BBB and F2 rating, with its outlook remaining stable.
Dividends
Dow Inc.
Dow Inc. has paid dividends on a quarterly basis since the separation from DowDuPont and expects to continue to do so, subject to approval by the Board. The following table summarizes dividends declared and paid to common stockholders of record in 2026:
Dow Inc. Dividends Declared and Paid
Declaration Date Record Date Payment Date Amount (per share)
February 12, 2026 February 27, 2026 March 13, 2026 $ 0.35
April 9, 2026 May 29, 2026 June 12, 2026 $ 0.35
TDCC
TDCC has committed to fund Dow Inc.'s dividends paid to common stockholders and share repurchases, as approved by the Board, as well as certain governance expenses. Funding is accomplished through intercompany loans. TDCC's Board reviews and determines a dividend distribution to Dow Inc. to settle the intercompany loans. For the three months ended June 30, 2026, TDCC declared and paid a dividend to Dow Inc. of $257 million ($514 million dividend declared and paid to Dow Inc. for the six months ended June 30, 2026). At June 30, 2026, TDCC's intercompany loan balance with Dow Inc. was insignificant.
Share Repurchase Program
On April 13, 2022, the Board approved a share repurchase program authorizing up to $3 billion for the repurchase of the Company's common stock, with no expiration date. The Company did not repurchase any of its common stock in the first six months of 2026 or 2025. At June 30, 2026, approximately $931 million of the share repurchase program authorization remained available for repurchases. As previously announced, the Company intends to repurchase shares at a minimum to cover dilution over the economic cycle. The Company may from time to time expand its share repurchases beyond dilution, based on a number of factors including macroeconomic conditions, free cash flow generation, and the Dow share price. Any share repurchases, when coupled with the Company's dividends, are intended to implement the long-term strategy of targeting shareholder remuneration of approximately 65 percent of Operating Net Income over the economic cycle.
Pension Plans
The Company has both funded and unfunded defined benefit pension plans in the United States and a number of other countries. The Company's funding policy is to contribute to funded plans when pension laws and/or economics either require or encourage funding. See Note 16 to the Consolidated Financial Statements and Note 19 to the Consolidated Financial Statements included in the 2025 10-K for additional information related to the Company's pension plans.
Restructuring and Transform to Outperform
The 2025 Restructuring Program is expected to result in additional cash expenditures of approximately $405 million primarily over the next three years and consists primarily of severance and related benefits costs, implementation costs related to decommissioning and demolition and additional costs associated with exit and disposal activities.
Restructuring implementation costs totaled $28 million and $49 million for the three and six months ended June 30, 2026, respectively ($5 million for the three and six months ended June 30, 2025).
Transform to Outperform is expected to result in additional cash expenditures of approximately $1 billion over the next two years and consists of severance and related benefit costs, implementation costs, and other costs incurred to achieve the intended uplift in Operating EBITDA. Costs to achieve totaled $81 million and $134 million for the three and six months ended June 30, 2026.
The Company expects to incur additional costs in the future related to its restructuring activities, which will be recognized as incurred. The Company also expects to incur additional employee-related costs, including involuntary termination benefits related to its other optimization activities, including Transform to Outperform. These costs cannot be reasonably estimated at this time. See Note 4 to the Consolidated Financial Statements for additional information on the Company's restructuring activities.
Contractual Obligations
Information related to the Company's contractual obligations, commercial commitments and expected cash requirements for interest can be found in Notes 14, 15, 16 and 19 to the Consolidated Financial Statements included in the 2025 10-K. With the exception of the items noted below, there have been no material changes in the Company's contractual obligations since December 31, 2025.
Contractual Obligations at Jun 30, 2026
Payments Due In
In millions 2026 2027-2028 2029-2030 2031 and beyond Total
Dow Inc.
Expected cash requirements for interest 1
$ 409 $ 1,601 $ 1,450 $ 9,206 $ 12,666
Operating leases 2
202 665 366 504 1,737
Other noncurrent obligations 3
- 756 542 2,377 3,675
Total $ 611 $ 3,022 $ 2,358 $ 12,087 $ 18,078
TDCC
Expected cash requirements for interest 1
$ 409 $ 1,601 $ 1,450 $ 9,206 $ 12,666
Operating leases 2
202 665 366 504 1,737
Other noncurrent obligations 3
- 756 542 2,239 3,537
Total $ 611 $ 3,022 $ 2,358 $ 11,949 $ 17,940
1.Cash requirements for interest on long-term debt was calculated using current interest rates at June 30, 2026, and includes $98 million of various floating rate notes.
2.Includes imputed interest of $303 million.
3.Includes liabilities related to asbestos litigation, environmental remediation, legal matters and other noncurrent liabilities. Also includes the updated fair value of the project financing debt guarantee liability with Sadara, which increased $298 million in the first quarter of 2026. In addition to these items, Dow Inc. includes liabilities related to noncurrent obligations with DuPont de Nemours, Inc. and Corteva, Inc. The table excludes uncertain tax positions due to uncertainties in the timing of the effective settlement of tax positions with the respective taxing authorities. The table also excludes deferred revenue as it does not represent future cash requirements arising from contractual payment obligations.
Fair Value Measurements
See Note 19 to the Consolidated Financial Statements for information concerning fair value measurements.
OTHER MATTERS
Critical Accounting Estimates
The preparation of financial statements and related disclosures in accordance with accounting principles generally accepted in the United States of America requires management to make judgments, assumptions and estimates that affect the amounts reported in the consolidated financial statements and accompanying notes. Note 1 to the Consolidated Financial Statements included in the 2025 10-K describes the significant accounting policies and methods used in the preparation of the consolidated financial statements. The Company's critical accounting policies that are impacted by judgments, assumptions and estimates are described in Management's Discussion and Analysis of Financial Condition and Results of Operations included in the 2025 10-K. Since December 31, 2025, there have been no material changes in the Company's accounting policies that are impacted by judgments, assumptions and estimates.
Asbestos-Related Matters of Union Carbide Corporation
Union Carbide is and has been involved in a large number of asbestos-related suits filed primarily in state courts during the past several decades. These suits principally allege personal injury resulting from exposure to asbestos-containing products and frequently seek both actual and punitive damages. The alleged claims primarily relate to products that Union Carbide sold in the past, alleged exposure to asbestos-containing products located on Union Carbide's premises, and Union Carbide's responsibility for asbestos suits filed against a former Union Carbide subsidiary, Amchem Products, Inc. ("Amchem"). In many cases, plaintiffs are unable to demonstrate that they have suffered any compensable loss as a result of such exposure, or that injuries incurred in fact resulted from exposure to Union Carbide's products.
The table below provides information regarding asbestos-related claims pending against Union Carbide and Amchem based on criteria developed by Union Carbide and its external consultants:
Asbestos-Related Claim Activity 2026 2025
Claims unresolved at Jan 1 7,158 5,813
Claims filed 2,131 2,195
Claims settled, dismissed or otherwise resolved (1,799) (1,456)
Claims unresolved at Jun 30
7,490 6,552
Claimants with claims against both Union Carbide and Amchem (1,117) (1,118)
Individual claimants at Jun 30
6,373 5,434
Plaintiffs' lawyers often sue numerous defendants in individual lawsuits or on behalf of numerous claimants. As a result, the damages alleged are not expressly identified as to Union Carbide, Amchem or any other particular defendant, even when specific damages are alleged with respect to a specific disease or injury. For these reasons and based upon Union Carbide's litigation and settlement experience, Union Carbide does not consider the damages alleged against Union Carbide and Amchem to be a meaningful factor in its determination of any potential asbestos-related liability.
For additional information, see Asbestos-Related Matters of Union Carbide Corporation in Note 12 to the Consolidated Financial Statements; Part II, Item 1. Legal Proceedings; and Note 15 to the Consolidated Financial Statements included in the 2025 10-K.
Dow Inc. published this content on July 24, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on July 24, 2026 at 11:45 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]