dow-20230930

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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, 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 701,397,006 shares of common stock, $0.01 par value, outstanding at September 30, 2023. The Dow Chemical Company had 100 shares of common stock, $0.01 par value, outstanding at September 30, 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.

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Dow Inc. and Subsidiaries

The Dow Chemical Company and Subsidiaries

QUARTERLY REPORT ON FORM 10-Q

For the quarterly period ended September 30, 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.	35

	Results of Operations.	36

	Changes in Financial Condition.	42

	Other Matters.	48

Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	49

Item 4.	Controls and Procedures.	49

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings.	50

Item 1A.	Risk Factors.	50

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	50

Item 4.	Mine Safety Disclosures.	50

Item 5.	Other Information.	50

Item 6.	Exhibits.	51

SIGNATURE		52

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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; any global and regional economic impacts of a pandemic or other public health-related risks and events on Dow’s business; any 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, 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.

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PART I – FINANCIAL INFORMATION


ITEM 1. FINANCIAL STATEMENTS

Dow Inc. and Subsidiaries

Consolidated Statements of Income


	Three Months Ended				Nine Months Ended
In millions, except per share amounts (Unaudited)	Sep 30, 2023		Sep 30, 2022		Sep 30, 2023		Sep 30, 2022
Net sales	$	10,730	$	14,115	$	34,001	$	45,043
Cost of sales	9,592		12,381		30,096		37,682
Research and development expenses	197		191		616		626
Selling, general and administrative expenses	380		356		1,216		1,289
Amortization of intangibles	81		83		243		256
Restructuring and asset related charges - net	—		—		549		186
Equity in earnings (losses) of nonconsolidated affiliates	(7)		(58)		(112)		311
Sundry income (expense) - net	92		69		202		292
Interest income	44		41		186		105
Interest expense and amortization of debt discount	192		155		549		487
Income before income taxes	417		1,001		1,008		5,225
Provision for income taxes	90		241		253		1,232
Net income	327		760		755		3,993
Net income attributable to noncontrolling interests	25		21		61		24
Net income available for Dow Inc. common stockholders	$	302	$	739	$	694	$	3,969

Per common share data:
Earnings per common share - basic	$	0.43	$	1.03	$	0.97	$	5.45
Earnings per common share - diluted	$	0.42	$	1.02	$	0.97	$	5.41

Weighted-average common shares outstanding - basic	704.0		714.3		706.4		724.9
Weighted-average common shares outstanding - diluted	707.5		718.1		709.7		729.8

Depreciation	$	484	$	482	$	1,443	$	1,459
Capital expenditures	$	597	$	452	$	1,598	$	1,224

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
In millions (Unaudited)	Sep 30, 2023		Sep 30, 2022		Sep 30, 2023		Sep 30, 2022
Net income	$	327	$	760	$	755	$	3,993
Other comprehensive income (loss), net of tax
Unrealized gains (losses) on investments	(20)		(122)		72		(371)
Cumulative translation adjustments	(147)		(403)		(149)		(1,081)
Pension and other postretirement benefit plans	(2)		125		—		356
Derivative instruments	(25)		22		(45)		491
Total other comprehensive loss	(194)		(378)		(122)		(605)
Comprehensive income	133		382		633		3,388
Comprehensive income attributable to noncontrolling interests, net of tax	25		21		61		24
Comprehensive income attributable to Dow Inc.	$	108	$	361	$	572	$	3,364

See Notes to the Consolidated Financial Statements.

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Dow Inc. and Subsidiaries

Consolidated Balance Sheets


In millions, except share amounts (Unaudited)	Sep 30, 2023		Dec 31, 2022
Assets
Current Assets
Cash and cash equivalents	$	3,080	$	3,886
Accounts and notes receivable:
Trade (net of allowance for doubtful receivables - 2023: $80; 2022: $110)	5,343		5,611
Other	2,039		2,144
Inventories	6,211		6,988
Other current assets	1,625		1,848
Total current assets	18,298		20,477
Investments
Investment in nonconsolidated affiliates	1,289		1,589
Other investments (investments carried at fair value - 2023: $1,929; 2022: $1,757)	2,904		2,793
Noncurrent receivables	555		666
Total investments	4,748		5,048
Property
Property	59,525		58,055
Less: Accumulated depreciation	38,965		37,613
Net property	20,560		20,442
Other Assets
Goodwill	8,580		8,644
Other intangible assets (net of accumulated amortization - 2023: $5,279; 2022: $5,022)	2,132		2,442
Operating lease right-of-use assets	1,288		1,227
Deferred income tax assets	1,248		960
Deferred charges and other assets	1,434		1,363
Total other assets	14,682		14,636
Total Assets	$	58,288	$	60,603
Liabilities and Equity
Current Liabilities
Notes payable	$	223	$	362
Long-term debt due within one year	110		362
Accounts payable:
Trade	4,293		4,940
Other	2,025		2,276
Operating lease liabilities - current	325		287
Income taxes payable	393		334
Accrued and other current liabilities	2,879		2,770
Total current liabilities	10,248		11,331
Long-Term Debt	14,592		14,698
Other Noncurrent Liabilities
Deferred income tax liabilities	668		1,110
Pension and other postretirement benefits - noncurrent	3,617		3,808
Asbestos-related liabilities - noncurrent	804		857
Operating lease liabilities - noncurrent	1,020		997
Other noncurrent obligations	7,259		6,555
Total other noncurrent liabilities	13,368		13,327
Stockholders’ Equity
Common stock (authorized 5,000,000,000 shares of $0.01 par value each; issued 2023: 775,630,092 shares; 2022: 771,678,525 shares)	8		8
Additional paid-in capital	8,722		8,540
Retained earnings	22,376		23,180
Accumulated other comprehensive loss	(7,261)		(7,139)
Treasury stock at cost (2023: 74,233,086 shares; 2022: 66,798,605 shares)	(4,278)		(3,871)
Dow Inc.’s stockholders’ equity	19,567		20,718
Noncontrolling interests	513		529
Total equity	20,080		21,247
Total Liabilities and Equity	$	58,288	$	60,603

See Notes to the Consolidated Financial Statements.

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Dow Inc. and Subsidiaries

Consolidated Statements of Cash Flows


In millions (Unaudited)	Nine Months Ended
	Sep 30, 2023		Sep 30, 2022
Operating Activities
Net income	$	755	$	3,993
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	1,954		2,104
Provision (credit) for deferred income tax	(817)		124
Earnings of nonconsolidated affiliates less than dividends received	300		517
Net periodic pension benefit cost (credit)	(69)		19
Pension contributions	(111)		(156)
Net gain on sales of assets, businesses and investments	(49)		(11)
Restructuring and asset related charges - net	549		186
Other net loss	588		159
Changes in assets and liabilities, net of effects of acquired and divested companies:
Accounts and notes receivable	365		323
Inventories	777		(254)
Accounts payable	(859)		(860)
Other assets and liabilities, net	153		(736)
Cash provided by operating activities - continuing operations	3,536		5,408
Cash provided by (used for) operating activities - discontinued operations	4		(11)
Cash provided by operating activities	3,540		5,397
Investing Activities
Capital expenditures	(1,598)		(1,224)
Investment in gas field developments	(175)		(134)
Purchases of previously leased assets	(5)		(5)
Proceeds from sales of property, businesses and consolidated companies, net of cash divested	66		16
Acquisitions of property and businesses, net of cash acquired	(103)		(54)
Investments in and loans to nonconsolidated affiliates	(4)		(69)
Distributions and loan repayments from nonconsolidated affiliates	2		10
Proceeds from sales of ownership interests in nonconsolidated affiliates	63		11
Purchases of investments	(1,291)		(445)
Proceeds from sales and maturities of investments	1,244		596

Other investing activities, net	(45)		(41)
Cash used for investing activities	(1,846)		(1,339)
Financing Activities
Changes in short-term notes payable	(122)		72

Payments on short-term debt greater than three months	—		(14)
Proceeds from issuance of long-term debt	76		82
Payments on long-term debt	(355)		(957)
Collections on securitization programs	8		—
Purchases of treasury stock	(500)		(2,200)
Proceeds from issuance of stock	63		99
Transaction financing, debt issuance and other costs	(1)		(8)
Employee taxes paid for share-based payment arrangements	(41)		(34)
Distributions to noncontrolling interests	(51)		(42)

Dividends paid to stockholders	(1,481)		(1,511)

Cash used for financing activities	(2,404)		(4,513)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(130)		(261)

Summary
Decrease in cash, cash equivalents and restricted cash	(840)		(716)
Cash, cash equivalents and restricted cash at beginning of period	3,940		3,033
Cash, cash equivalents and restricted cash at end of period	$	3,100	$	2,317
Less: Restricted cash and cash equivalents, included in "Other current assets"	20		101
Cash and cash equivalents at end of period	$	3,080	$	2,216

See Notes to the Consolidated Financial Statements.

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Dow Inc. and Subsidiaries

Consolidated Statements of Equity


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


Additional Paid-in Capital
Balance at beginning of period	8,661		8,343		8,540		8,151
Common stock issued/sold	8		2		63		99
Stock-based compensation and allocation of ESOP shares	77		79		217		198
Treasury stock issuances - compensation and benefit plans	(24)		(28)		(98)		(52)

Balance at end of period	8,722		8,396		8,722		8,396
Retained Earnings
Balance at beginning of period	22,570		22,827		23,180		20,623
Net income available for Dow Inc. common stockholders	302		739		694		3,969
Dividends to stockholders	(492)		(493)		(1,481)		(1,511)
Other	(4)		(5)		(17)		(13)
Balance at end of period	22,376		23,068		22,376		23,068
Accumulated Other Comprehensive Loss
Balance at beginning of period	(7,067)		(9,204)		(7,139)		(8,977)
Other comprehensive loss	(194)		(378)		(122)		(605)
Balance at end of period	(7,261)		(9,582)		(7,261)		(9,582)
Unearned ESOP Shares
Balance at beginning of period	—		—		—		(15)
Allocation of ESOP shares	—		—		—		15
Balance at end of period	—		—		—		—
Treasury Stock
Balance at beginning of period	(4,175)		(3,001)		(3,871)		(1,625)
Treasury stock purchases	(127)		(800)		(505)		(2,200)
Treasury stock issuances - compensation and benefit plans	24		28		98		52
Balance at end of period	(4,278)		(3,773)		(4,278)		(3,773)
Dow Inc.'s stockholders' equity	19,567		18,117		19,567		18,117
Noncontrolling Interests	513		512		513		512
Total Equity	$	20,080	$	18,629	$	20,080	$	18,629

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

See Notes to the Consolidated Financial Statements.

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The Dow Chemical Company and Subsidiaries

Consolidated Statements of Income


	Three Months Ended				Nine Months Ended
In millions (Unaudited)	Sep 30, 2023		Sep 30, 2022		Sep 30, 2023		Sep 30, 2022
Net sales	$	10,730	$	14,115	$	34,001	$	45,043
Cost of sales	9,591		12,379		30,093		37,676
Research and development expenses	197		191		616		626
Selling, general and administrative expenses	380		357		1,216		1,289
Amortization of intangibles	81		83		243		256
Restructuring and asset related charges - net	—		—		549		186
Equity in earnings (losses) of nonconsolidated affiliates	(7)		(58)		(112)		311
Sundry income (expense) - net	71		73		169		287
Interest income	47		45		194		111
Interest expense and amortization of debt discount	192		155		549		487
Income before income taxes	400		1,010		986		5,232
Provision for income taxes	90		242		253		1,233
Net income	310		768		733		3,999
Net income attributable to noncontrolling interests	25		21		61		24
Net income available for The Dow Chemical Company common stockholder	$	285	$	747	$	672	$	3,975

Depreciation	$	484	$	482	$	1,443	$	1,459
Capital expenditures	$	597	$	452	$	1,598	$	1,224

See Notes to the Consolidated Financial Statements.

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The Dow Chemical Company and Subsidiaries

Consolidated Statements of Comprehensive Income


	Three Months Ended				Nine Months Ended
In millions (Unaudited)	Sep 30, 2023		Sep 30, 2022		Sep 30, 2023		Sep 30, 2022
Net income	$	310	$	768	$	733	$	3,999
Other comprehensive income (loss), net of tax
Unrealized gains (losses) on investments	(20)		(122)		72		(371)
Cumulative translation adjustments	(147)		(403)		(149)		(1,081)
Pension and other postretirement benefit plans	(2)		125		—		356
Derivative instruments	(25)		22		(45)		491
Total other comprehensive loss	(194)		(378)		(122)		(605)
Comprehensive income	116		390		611		3,394
Comprehensive income attributable to noncontrolling interests, net of tax	25		21		61		24
Comprehensive income attributable to The Dow Chemical Company	$	91	$	369	$	550	$	3,370

See Notes to the Consolidated Financial Statements.

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The Dow Chemical Company and Subsidiaries

Consolidated Balance Sheets


In millions, except share amounts (Unaudited)	Sep 30, 2023		Dec 31, 2022
Assets
Current Assets
Cash and cash equivalents	$	3,080	$	3,886

Accounts and notes receivable:
Trade (net of allowance for doubtful receivables - 2023: $80; 2022: $110)	5,343		5,611
Other	2,050		2,211
Inventories	6,211		6,988
Other current assets	1,578		1,815
Total current assets	18,262		20,511
Investments
Investment in nonconsolidated affiliates	1,289		1,589
Other investments (investments carried at fair value - 2023: $1,929; 2022: $1,757)	2,904		2,793
Noncurrent receivables	517		650
Total investments	4,710		5,032
Property
Property	59,525		58,055
Less accumulated depreciation	38,965		37,613
Net property	20,560		20,442
Other Assets
Goodwill	8,580		8,644
Other intangible assets (net of accumulated amortization - 2023: $5,279; 2022: $5,022)	2,132		2,442
Operating lease right-of-use assets	1,288		1,227
Deferred income tax assets	1,248		960
Deferred charges and other assets	1,434		1,363
Total other assets	14,682		14,636
Total Assets	$	58,214	$	60,621
Liabilities and Equity
Current Liabilities
Notes payable	$	223	$	362
Long-term debt due within one year	110		362
Accounts payable:
Trade	4,293		4,940
Other	2,044		2,349
Operating lease liabilities - current	325		287
Income taxes payable	393		334

Accrued and other current liabilities	2,730		2,613
Total current liabilities	10,118		11,247
Long-Term Debt	14,592		14,698
Other Noncurrent Liabilities
Deferred income tax liabilities	668		1,110
Pension and other postretirement benefits - noncurrent	3,617		3,808
Asbestos-related liabilities - noncurrent	804		857
Operating lease liabilities - noncurrent	1,020		997
Other noncurrent obligations	7,117		6,415
Total other noncurrent liabilities	13,226		13,187
Stockholder's Equity
Common stock (authorized and issued 100 shares of $0.01 par value each)	—		—
Additional paid-in capital	8,907		8,627
Retained earnings	18,119		19,472
Accumulated other comprehensive loss	(7,261)		(7,139)


The Dow Chemical Company’s stockholder's equity	19,765		20,960
Noncontrolling interests	513		529
Total equity	20,278		21,489
Total Liabilities and Equity	$	58,214	$	60,621

See Notes to the Consolidated Financial Statements.

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The Dow Chemical Company and Subsidiaries

Consolidated Statements of Cash Flows


In millions (Unaudited)	Nine Months Ended
	Sep 30, 2023		Sep 30, 2022
Operating Activities
Net income	$	733	$	3,999
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	1,954		2,104
Provision (credit) for deferred income tax	(817)		125
Earnings of nonconsolidated affiliates less than dividends received	300		517
Net periodic pension benefit cost (credit)	(69)		19
Pension contributions	(111)		(156)
Net gain on sales of assets, businesses and investments	(49)		(11)
Restructuring and asset related charges - net	549		186
Other net loss	589		167
Changes in assets and liabilities, net of effects of acquired and divested companies:
Accounts and notes receivable	365		323
Inventories	777		(254)
Accounts payable	(859)		(860)
Other assets and liabilities, net	205		(718)
Cash provided by operating activities	3,567		5,441
Investing Activities
Capital expenditures	(1,598)		(1,224)
Investment in gas field developments	(175)		(134)
Purchases of previously leased assets	(5)		(5)
Proceeds from sales of property, businesses and consolidated companies, net of cash divested	66		16
Acquisitions of property and businesses, net of cash acquired	(103)		(54)
Investments in and loans to nonconsolidated affiliates	(4)		(69)
Distributions and loan repayments from nonconsolidated affiliates	2		10
Proceeds from sales of ownership interests in nonconsolidated affiliates	63		11
Purchases of investments	(1,291)		(445)
Proceeds from sales and maturities of investments	1,244		596
Other investing activities, net	(45)		(41)
Cash used for investing activities	(1,846)		(1,339)
Financing Activities
Changes in short-term notes payable	(122)		72

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

Proceeds from issuance of long-term debt	76		82
Payments on long-term debt	(355)		(957)
Collections on securitization programs	8		—
Proceeds from issuance of stock	63		99
Transaction financing, debt issuance and other costs	(1)		(8)
Employee taxes paid for share-based payment arrangements	(41)		(34)
Distributions to noncontrolling interests	(51)		(42)

Dividends paid to Dow Inc.	(2,008)		(3,755)

Cash used for financing activities	(2,431)		(4,557)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(130)		(261)

Summary
Decrease in cash, cash equivalents and restricted cash	(840)		(716)
Cash, cash equivalents and restricted cash at beginning of period	3,940		3,033
Cash, cash equivalents and restricted cash at end of period	$	3,100	$	2,317
Less: Restricted cash and cash equivalents, included in "Other current assets"	20		101
Cash and cash equivalents at end of period	$	3,080	$	2,216

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
In millions (Unaudited)	Sep 30, 2023		Sep 30, 2022		Sep 30, 2023		Sep 30, 2022
Common Stock
Balance at beginning and end of period	$	—	$	—	$	—	$	—
Additional Paid-in Capital
Balance at beginning of period	8,822		8,375		8,627		8,159
Issuance of parent company stock - Dow Inc.	8		2		63		99
Stock-based compensation and allocation of ESOP shares	77		79		217		198

Balance at end of period	8,907		8,456		8,907		8,456
Retained Earnings
Balance at beginning of period	18,469		20,049		19,472		19,288
Net income available for The Dow Chemical Company common stockholder	285		747		672		3,975
Dividends to Dow Inc.	(630)		(1,301)		(2,008)		(3,755)
Other	(5)		(4)		(17)		(17)
Balance at end of period	18,119		19,491		18,119		19,491
Accumulated Other Comprehensive Loss
Balance at beginning of period	(7,067)		(9,204)		(7,139)		(8,977)
Other comprehensive loss	(194)		(378)		(122)		(605)
Balance at end of period	(7,261)		(9,582)		(7,261)		(9,582)
Unearned ESOP Shares
Balance at beginning of period	—		—		—		(15)

Allocation of ESOP shares	—		—		—		15
Balance at end of period	—		—		—		—
The Dow Chemical Company's stockholder's equity	19,765		18,365		19,765		18,365
Noncontrolling Interests	513		512		513		512
Total Equity	$	20,278	$	18,877	$	20,278	$	18,877

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

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Note		Page
1	Consolidated Financial Statements	15
2	Recent Accounting Guidance	16
3	Revenue	16
4	Restructuring and Asset Related Charges - Net	18
5	Supplementary Information	20
6	Earnings Per Share Calculations	21
7	Inventories	21
8	Commitments and Contingencies	22
9	Leases	23
10	Accumulated Other Comprehensive Loss	24
11	Noncontrolling Interests	25
12	Pension and Other Postretirement Benefit Plans	25
13	Stock-Based Compensation	26
14	Financial Instruments	27
15	Fair Value Measurements	31
16	Segments and Geographic Regions	33

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 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, 2022 ("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.

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

In the 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." The ASU, issued in September 2022, requires disclosures intended to enhance the transparency of supplier finance programs. Specifically, the amendments 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 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 September 30, 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 on the consolidated financial statements.

NOTE 3 – REVENUE

Revenue Recognition

The majority of the Company's revenue is derived from product sales. The Company's revenue related to product sales was