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 ~~March 31,~~September 30, 2020

☐ 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

~~Securities registered pursuant to Section 12(g) of the Act: None~~

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

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 ~~740,730,813~~741,751,762 shares of common stock, $0.01 par value, outstanding at ~~March 31,~~September 30, 2020. The Dow Chemical Company had 100 shares of common stock, $0.01 par value, outstanding at ~~March 31,~~September 30, 2020, all of which were held by the registrant’s parent, Dow Inc.

Table of Contents

Dow Inc. and Subsidiaries

The Dow Chemical Company and Subsidiaries

QUARTERLY REPORT ON FORM 10-Q

For the quarterly period ended ~~March 31,~~September 30, 2020

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.	4654

	Results of Operations.	5160

	Changes in Financial Condition.	5869

	Other Matters.	6475

Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	6576

Item 4.	Controls and Procedures.	6576

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings.	6677

Item 1A.	Risk Factors.	6677

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	6778

Item 4.	Mine Safety Disclosures.	6778

Item 5.	Other Information.	6778

Item 6.	Exhibits.	6778

SIGNATURE			6980

Table of Contents


Dow Inc. and Subsidiaries The Dow Chemical Company and Subsidiaries

This Quarterly Report on Form 10-Q is a combined report being filed by Dow Inc. and The Dow Chemical Company and its consolidated subsidiaries (“TDCC” and together with Dow Inc., “Dow” or the "Company"). This Quarterly Report on Form 10-Q reflects the results of Dow and its consolidated subsidiaries, after giving effect to the distribution to DowDuPont Inc. (“DowDuPont” and effective June 3, 2019, n/k/a DuPont de Nemours, Inc. or "DuPont") of TDCC’s agricultural sciences business (“AgCo”) and specialty products business (“SpecCo”) and the receipt of E. I. du Pont de Nemours and Company and its consolidated subsidiaries' (“Historical DuPont”) ethylene and ethylene copolymers business (other than its ethylene acrylic elastomers business) ("ECP"). The U.S. GAAP consolidated financial results of Dow Inc. and TDCC reflect the distribution of AgCo and SpecCo as discontinued operations for the applicable periods presented as well as the receipt of ECP as a common control transaction from the closing of the merger with Historical DuPont on August 31, 2017. In addition, following the separation from DowDuPont, the Company changed the manner in which its business activities were managed. The Company's portfolio now includes six global businesses which are organized into the following operating segments: Packaging & Specialty Plastics, Industrial Intermediates & Infrastructure and Performance Materials & Coatings. Corporate contains the reconciliation between the totals for the operating segments and the Company's totals. 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. 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.

Background

On April 1, 2019, DowDuPont completed the separation of its materials science business and Dow Inc. became the direct parent company of TDCC, owning all of the outstanding common shares of TDCC. For filings related to the period commencing April 1, 2019 and thereafter, TDCC was deemed the predecessor to Dow Inc., and the historical results of TDCC are deemed the historical results of Dow Inc. for periods prior to and including March 31, 2019.

The separation was contemplated by the merger of equals transaction effective August 31, 2017, under the Agreement and Plan of Merger, dated as of December 11, 2015, as amended on March 31, 2017. TDCC and Historical DuPont each merged with subsidiaries of DowDuPont and, as a result, TDCC and Historical DuPont became subsidiaries of DowDuPont (the “Merger”). Subsequent to the Merger, TDCC and Historical DuPont engaged in a series of internal reorganization and realignment steps to realign their businesses into three subgroups: agriculture, materials science and specialty products. Dow Inc. was formed as a wholly owned subsidiary of DowDuPont to serve as the holding company for the materials science business.

FORWARD-LOOKING STATEMENTS

This report contains “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. In this context, forward-looking statements often address expected future business and financial performance, financial condition, and other matters, and often contain words 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. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements.

Forward-looking statements include, but are not limited to: expectations as to future sales of Dow’s products; the ability to protect Dow’s intellectual property in the United States and abroad; estimates regarding Dow’s capital requirements and need for and availability of financing; estimates of Dow’s expenses, future revenues and profitability; estimates of the size of the markets for Dow’s products and services and Dow’s ability to compete in such markets; expectations related to the rate and ~~degree~~degree of market acceptance of Dow’s products; the outcome of certain Dow contingencies, such as litigation and environmental matters; estimates of the success of competing technologies that may become available; the ~~actual~~continuing global and ~~potential~~regional economic impacts of the coronavirus disease 2019 ("COVID-19") ~~pandemic and the recent excess oil supply~~pandemic; estimates regarding benefits achieved through contemplated restructuring activities, such as workforce reduction, manufacturing facility and/or asset closure and related ~~drop in oil prices;~~exit and disposal activities; and expectations regarding the benefits and costs associated with each of the foregoing.

Table of Contents

Forward-looking statements by their nature address matters that are, to different degrees, uncertain. Forward-looking statements are based on certain assumptions and expectations of future events which may not be realized and speak only as of the date the statements were made. In addition, forward-looking statements also involve risks, uncertainties and other factors that are beyond Dow’s control that could cause Dow’s actual results to differ materially from those projected, anticipated or implied in the forward-looking statements. These factors include, but are not limited to: fluctuations in energy and raw material prices; failure to develop and market new products and optimally manage product life cycles; significant litigation and environmental matters; failure to appropriately manage process safety and product stewardship issues; changes in laws and regulations or political conditions; 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; weather events and natural disasters; ability to protect, defend and enforce Dow’s intellectual property rights; increased competition; changes in relationships with Dow’s significant customers and suppliers; unanticipated expenses such as litigation or legal settlement expenses; unanticipated business disruptions; Dow’s ability to predict, identify and interpret changes in consumer preferences and demand; Dow’s ability to complete proposed divestitures or acquisitions; Dow’s ability to realize the expected benefits of acquisitions if they are completed; the availability of financing to Dow in the future and the terms and conditions of such financing; disruptions in Dow’s information technology networks and systems; ~~and~~the continuing risks related to the ~~actual~~COVID-19 pandemic; and ~~potential impacts~~Dow's ability to realize the expected benefits of ~~the COVID-19 pandemic and the recent excess oil supply~~restructuring activities, such as workforce reduction, manufacturing facility and/or asset closure and related ~~drop in oil prices.~~exit and disposal activities. Additionally, 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.

Risks related to achieving the anticipated benefits of Dow's separation from DowDuPont include, but are not limited to, a number of conditions outside the control of Dow, including risks related to: (i) Dow's inability to achieve some or all of the benefits that it expects to receive from the separation from DowDuPont; (ii) certain tax risks associated with the separation; (iii) the failure of Dow's pro forma financial information to be a reliable indicator of Dow's future results; (iv) Dow's inability to receive third-party consents required under the separation agreement; (v) non-compete restrictions under the separation agreement; (vi) receipt of less favorable terms in the commercial agreements Dow entered into with DuPont and Corteva, Inc. ("Corteva"), including restrictions under intellectual property cross-license agreements, than Dow would have received from an unaffiliated third party; and (vii) Dow's obligation to indemnify DuPont and/or Corteva 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. For a more detailed discussion of Dow’s risks and uncertainties, see the section titled “Risk Factors” contained in Part II, Item 1A of this Quarterly Report on Form 10-Q and the combined Dow Inc. and TDCC Quarterly Report on Form 10-Q for the quarters ended March 31, 2020 and June 30, 2020, and Part I, Item 1A of the combined Dow Inc. and TDCC Annual Report on Form 10-K for the fiscal year ended December 31, 2019. Dow Inc. and TDCC assume no obligation to update or revise publicly any forward-looking statements whether because of new information, future events or otherwise, except as required by securities and other applicable laws.

Table of Contents


PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Dow Inc. and Subsidiaries

Consolidated Statements of Income


		Three Months Ended							Three Months Ended						Nine Months Ended
In millions, except per share amounts (Unaudited)	In millions, except per share amounts (Unaudited)	Mar 31, 2020		Mar 31, 2019		In millions, except per share amounts (Unaudited)	Sep 30, 2020		Sep 30, 2019		Sep 30, 2020		Sep 30, 2019
Net sales	Net sales	$	9,770	$	10,969	Net sales	$	9,712	$	10,764	$	27,836	$	32,747
Cost of sales	Cost of sales	8,230		9,142		Cost of sales	8,371		9,377		24,211		27,939
Research and development expenses	Research and development expenses	179		190		Research and development expenses	193		194		554		592
Selling, general and administrative expenses	Selling, general and administrative expenses	334		448		Selling, general and administrative expenses	372		388		1,063		1,258
Amortization of intangibles	Amortization of intangibles	100		116		Amortization of intangibles	100		100		300		320
Restructuring and asset related charges - net	Restructuring and asset related charges - net	96		156		Restructuring and asset related charges - net	617		147		719		368
Integration and separation costs	Integration and separation costs	65		452		Integration and separation costs	63		164		174		964
Equity in losses of nonconsolidated affiliates		(89)		(14)
Equity in earnings (losses) of nonconsolidated affiliates						Equity in earnings (losses) of nonconsolidated affiliates	60		(44)		(124)		(73)
Sundry income (expense) - net	Sundry income (expense) - net	(81)		69		Sundry income (expense) - net	182		301		154		369
Interest income	Interest income	15		18		Interest income	6		19		27		58
Interest expense and amortization of debt discount	Interest expense and amortization of debt discount	215		241		Interest expense and amortization of debt discount	202		233		617		711
Income from continuing operations before income taxes	Income from continuing operations before income taxes	396		297		Income from continuing operations before income taxes	42		437		255		949
Provision for income taxes on continuing operations	Provision for income taxes on continuing operations	138		141		Provision for income taxes on continuing operations	43		90		215		356
Income from continuing operations, net of tax		258		156
Income (loss) from continuing operations, net of tax						Income (loss) from continuing operations, net of tax	(1)		347		40		593
Income from discontinued operations, net of tax	Income from discontinued operations, net of tax	—		445		Income from discontinued operations, net of tax	0		0		0		445
Net income		258		601
Net income (loss)						Net income (loss)	(1)		347		40		1,038
Net income attributable to noncontrolling interests	Net income attributable to noncontrolling interests	19		45		Net income attributable to noncontrolling interests	24		14		51		74
Net income available for Dow Inc. common stockholders		$	239	$	556
Net income (loss) available for Dow Inc. common stockholders						Net income (loss) available for Dow Inc. common stockholders	$	(25)	$	333	$	(11)	$	964

Per common share data:	Per common share data:					Per common share data:
Earnings per common share from continuing operations - basic		$	0.32	$	0.16
Earnings (loss) per common share from continuing operations - basic						Earnings (loss) per common share from continuing operations - basic	$	(0.04)	$	0.45	$	(0.02)	$	0.71
Earnings per common share from discontinued operations - basic	Earnings per common share from discontinued operations - basic	—		0.58		Earnings per common share from discontinued operations - basic	0		0		0		0.58
Earnings per common share - basic		$	0.32	$	0.74
Earnings per common share from continuing operations - diluted		$	0.32	$	0.16
Earnings (loss) per common share - basic						Earnings (loss) per common share - basic	$	(0.04)	$	0.45	$	(0.02)	$	1.29
Earnings (loss) per common share from continuing operations - diluted						Earnings (loss) per common share from continuing operations - diluted	$	(0.04)	$	0.45	$	(0.02)	$	0.71
Earnings per common share from discontinued operations - diluted	Earnings per common share from discontinued operations - diluted	—		0.58		Earnings per common share from discontinued operations - diluted	0		0		0		0.58
Earnings per common share - diluted		$	0.32	$	0.74
Earnings (loss) per common share - diluted						Earnings (loss) per common share - diluted	$	(0.04)	$	0.45	$	(0.02)	$	1.29

Weighted-average common shares outstanding - basic	Weighted-average common shares outstanding - basic	740.2		747.2		Weighted-average common shares outstanding - basic	740.5		739.8		740.0		743.3
Weighted-average common shares outstanding - diluted	Weighted-average common shares outstanding - diluted	742.0		747.2		Weighted-average common shares outstanding - diluted	740.5		743.0		740.0		746.1

Depreciation	Depreciation	$	515	$	543	Depreciation	$	526	$	540	$	1,558	$	1,621
Capital expenditures	Capital expenditures	$	395	$	442	Capital expenditures	$	287	$	472	$	955	$	1,384

See Notes to the Consolidated Financial Statements.

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Dow Inc. and Subsidiaries

Consolidated Statements of Comprehensive Income


		Three Months Ended							Three Months Ended						Nine Months Ended
In millions (Unaudited)	In millions (Unaudited)	Mar 31, 2020		Mar 31, 2019		In millions (Unaudited)	Sep 30, 2020		Sep 30, 2019		Sep 30, 2020		Sep 30, 2019
Net income		$	258	$	601
Net income (loss)						Net income (loss)	$	(1)	$	347	$	40	$	1,038
Other comprehensive income (loss), net of tax	Other comprehensive income (loss), net of tax					Other comprehensive income (loss), net of tax
Unrealized gains (losses) on investments	Unrealized gains (losses) on investments	(100)		67		Unrealized gains (losses) on investments	8		11		(16)		111
Cumulative translation adjustments	Cumulative translation adjustments	(163)		(31)		Cumulative translation adjustments	91		(216)		(9)		(180)
Pension and other postretirement benefit plans	Pension and other postretirement benefit plans	142		141		Pension and other postretirement benefit plans	147		108		430		355
Derivative instruments	Derivative instruments	(162)		(75)		Derivative instruments	38		(134)		(100)		(413)
Total other comprehensive income (loss)	Total other comprehensive income (loss)	(283)		102		Total other comprehensive income (loss)	284		(231)		305		(127)
Comprehensive income (loss)		(25)		703
Comprehensive income						Comprehensive income	283		116		345		911
Comprehensive income attributable to noncontrolling interests, net of tax	Comprehensive income attributable to noncontrolling interests, net of tax	19		51		Comprehensive income attributable to noncontrolling interests, net of tax	24		7		51		79
Comprehensive income (loss) attributable to Dow Inc.		$	(44)	$	652
Comprehensive income attributable to Dow Inc.						Comprehensive income attributable to Dow Inc.	$	259	$	109	$	294	$	832

See Notes to the Consolidated Financial Statements.

Table of Contents

Dow Inc. and Subsidiaries

Consolidated Balance Sheets


In millions, except share amounts (Unaudited)	In millions, except share amounts (Unaudited)	Mar 31, 2020		Dec 31, 2019		In millions, except share amounts (Unaudited)	Sep 30, 2020		Dec 31, 2019
Assets	Assets					Assets
Current Assets	Current Assets					Current Assets
Cash and cash equivalents (variable interest entities restricted - 2020: $44; 2019: $37)		$	3,633	$	2,367
Marketable securities		1		21
Cash and cash equivalents (variable interest entities restricted - 2020: $53; 2019: $37)						Cash and cash equivalents (variable interest entities restricted - 2020: $53; 2019: $37)	$	4,549	$	2,367

Accounts and notes receivable:	Accounts and notes receivable:					Accounts and notes receivable:
Trade (net of allowance for doubtful receivables - 2020: $43; 2019: $45)		4,841		4,844
Trade (net of allowance for doubtful receivables - 2020: $45; 2019: $45)						Trade (net of allowance for doubtful receivables - 2020: $45; 2019: $45)	4,689		4,844
Other	Other	2,770		2,711		Other	2,383		2,711
Inventories	Inventories	6,324		6,214		Inventories	5,609		6,214
Other current assets	Other current assets	569		658		Other current assets	559		679
Total current assets	Total current assets	18,138		16,815		Total current assets	17,789		16,815
Investments	Investments					Investments
Investment in nonconsolidated affiliates	Investment in nonconsolidated affiliates	1,235		1,404		Investment in nonconsolidated affiliates	1,281		1,404
Other investments (investments carried at fair value - 2020: $1,306; 2019: $1,584)		2,136		2,588
Other investments (investments carried at fair value - 2020: $1,374; 2019: $1,584)						Other investments (investments carried at fair value - 2020: $1,374; 2019: $1,584)	2,183		2,588
Noncurrent receivables	Noncurrent receivables	697		1,063		Noncurrent receivables	739		1,063
Total investments	Total investments	4,068		5,055		Total investments	4,203		5,055
Property	Property					Property
Property	Property	54,942		54,910		Property	56,132		54,910
Less accumulated depreciation	Less accumulated depreciation	34,136		33,914		Less accumulated depreciation	35,719		33,914
Net property (variable interest entities restricted - 2020: $286; 2019: $330)		20,806		20,996
Net property (variable interest entities restricted - 2020: $230; 2019: $330)						Net property (variable interest entities restricted - 2020: $230; 2019: $330)	20,413		20,996
Other Assets	Other Assets					Other Assets
Goodwill	Goodwill	8,780		8,796		Goodwill	8,854		8,796
Other intangible assets (net of accumulated amortization - 2020: $3,994; 2019: $3,886)		3,636		3,759
Other intangible assets (net of accumulated amortization - 2020: $4,276; 2019: $3,886)						Other intangible assets (net of accumulated amortization - 2020: $4,276; 2019: $3,886)	3,442		3,759
Operating lease right-of-use assets	Operating lease right-of-use assets	1,942		2,072		Operating lease right-of-use assets	1,809		2,072
Deferred income tax assets	Deferred income tax assets	2,248		2,213		Deferred income tax assets	2,273		2,213
Deferred charges and other assets	Deferred charges and other assets	1,068		818		Deferred charges and other assets	1,162		818
Total other assets	Total other assets	17,674		17,658		Total other assets	17,540		17,658
Total Assets	Total Assets	$	60,686	$	60,524	Total Assets	$	59,945	$	60,524
Liabilities and Equity	Liabilities and Equity					Liabilities and Equity
Current Liabilities	Current Liabilities					Current Liabilities
Notes payable	Notes payable	$	1,490	$	586	Notes payable	$	329	$	586
Long-term debt due within one year	Long-term debt due within one year	384		435		Long-term debt due within one year	347		435
Accounts payable:	Accounts payable:					Accounts payable:
Trade	Trade	3,769		3,889		Trade	3,400		3,889
Other	Other	1,815		2,064		Other	1,964		2,064
Operating lease liabilities - current	Operating lease liabilities - current	384		421		Operating lease liabilities - current	405		421
Income taxes payable	Income taxes payable	468		522		Income taxes payable	354		522

Accrued and other current liabilities	Accrued and other current liabilities	2,811		2,762		Accrued and other current liabilities	3,408		2,762
Total current liabilities	Total current liabilities	11,121		10,679		Total current liabilities	10,207		10,679
Long-Term Debt (variable interest entities nonrecourse - 2020: $30; 2019: $34)		16,313		15,975
Long-Term Debt (variable interest entities nonrecourse - 2020: $19; 2019: $34)						Long-Term Debt (variable interest entities nonrecourse - 2020: $19; 2019: $34)	16,698		15,975
Other Noncurrent Liabilities	Other Noncurrent Liabilities					Other Noncurrent Liabilities
Deferred income tax liabilities	Deferred income tax liabilities	352		347		Deferred income tax liabilities	337		347
Pension and other postretirement benefits - noncurrent	Pension and other postretirement benefits - noncurrent	9,832		10,083		Pension and other postretirement benefits - noncurrent	9,759		10,083
Asbestos-related liabilities - noncurrent	Asbestos-related liabilities - noncurrent	1,048		1,060		Asbestos-related liabilities - noncurrent	1,027		1,060
Operating lease liabilities - noncurrent	Operating lease liabilities - noncurrent	1,622		1,739		Operating lease liabilities - noncurrent	1,488		1,739
Other noncurrent obligations	Other noncurrent obligations	6,937		6,547		Other noncurrent obligations	7,497		6,547
Total other noncurrent liabilities	Total other noncurrent liabilities	19,791		19,776		Total other noncurrent liabilities	20,108		19,776
Stockholders’ Equity	Stockholders’ Equity					Stockholders’ Equity
Common stock (authorized 5,000,000,000 shares of $0.01 par value each; issued 2020: 753,534,116 shares; 2019: 751,228,644 shares)		8		8
Common stock (authorized 5,000,000,000 shares of $0.01 par value each; issued 2020: 754,555,065 shares; 2019: 751,228,644 shares)						Common stock (authorized 5,000,000,000 shares of $0.01 par value each; issued 2020: 754,555,065 shares; 2019: 751,228,644 shares)	8		8
Additional paid-in capital	Additional paid-in capital	7,370		7,325		Additional paid-in capital	7,497		7,325
Retained earnings	Retained earnings	16,763		17,045		Retained earnings	15,472		17,045
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(10,529)		(10,246)		Accumulated other comprehensive loss	(9,941)		(10,246)
Unearned ESOP shares	Unearned ESOP shares	(81)		(91)		Unearned ESOP shares	(57)		(91)
Treasury stock at cost (2020: 12,803,303 shares; 2019: 9,729,834 shares)	Treasury stock at cost (2020: 12,803,303 shares; 2019: 9,729,834 shares)	(625)		(500)		Treasury stock at cost (2020: 12,803,303 shares; 2019: 9,729,834 shares)	(625)		(500)
Dow Inc.’s stockholders’ equity	Dow Inc.’s stockholders’ equity	12,906		13,541		Dow Inc.’s stockholders’ equity	12,354		13,541
Noncontrolling interests	Noncontrolling interests	555		553		Noncontrolling interests	578		553
Total equity	Total equity	13,461		14,094		Total equity	12,932		14,094
Total Liabilities and Equity	Total Liabilities and Equity	$	60,686	$	60,524	Total Liabilities and Equity	$	59,945	$	60,524

See Notes to the Consolidated Financial Statements.

Table of Contents

Dow Inc. and Subsidiaries

Consolidated Statements of Cash Flows


In millions (Unaudited)	In millions (Unaudited)	Three Months Ended						In millions (Unaudited)	Nine Months Ended
				Mar 31, 2020		Mar 31, 2019					Sep 30, 2020	Sep 30, 2019
Operating Activities	Operating Activities					Operating Activities
Net income	Net income	$	258	$	601	Net income	$	40	$	1,038
Less: Income from discontinued operations, net of tax	Less: Income from discontinued operations, net of tax	—		445		Less: Income from discontinued operations, net of tax	0		445
Income from continuing operations, net of tax	Income from continuing operations, net of tax	258		156		Income from continuing operations, net of tax	40		593
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:					Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	Depreciation and amortization	724		743		Depreciation and amortization	2,148		2,225
Credit for deferred income tax	Credit for deferred income tax	(57)		(72)		Credit for deferred income tax	(198)		(146)
Earnings of nonconsolidated affiliates less than dividends received	Earnings of nonconsolidated affiliates less than dividends received	134		775		Earnings of nonconsolidated affiliates less than dividends received	515		927
Net periodic pension benefit cost	Net periodic pension benefit cost	64		41		Net periodic pension benefit cost	195		101
Pension contributions	Pension contributions	(63)		(99)		Pension contributions	(188)		(206)
Net gain on sales of assets, businesses and investments	Net gain on sales of assets, businesses and investments	(12)		(2)		Net gain on sales of assets, businesses and investments	(283)		(48)

Restructuring and asset related charges - net	Restructuring and asset related charges - net	96		156		Restructuring and asset related charges - net	719		368
Other net loss	Other net loss	135		33		Other net loss	288		143
Changes in assets and liabilities, net of effects of acquired and divested companies:	Changes in assets and liabilities, net of effects of acquired and divested companies:					Changes in assets and liabilities, net of effects of acquired and divested companies:
Accounts and notes receivable	Accounts and notes receivable	128		85		Accounts and notes receivable	339		994
Inventories	Inventories	(111)		(47)		Inventories	587		483
Accounts payable	Accounts payable	(314)		(452)		Accounts payable	(560)		(926)
Other assets and liabilities, net	Other assets and liabilities, net	254		(274)		Other assets and liabilities, net	994		(715)
Cash provided by operating activities - continuing operations	Cash provided by operating activities - continuing operations	1,236		1,043		Cash provided by operating activities - continuing operations	4,596		3,793
Cash provided by operating activities - discontinued operations	Cash provided by operating activities - discontinued operations	3		338		Cash provided by operating activities - discontinued operations	0		187
Cash provided by operating activities	Cash provided by operating activities	1,239		1,381		Cash provided by operating activities	4,596		3,980
Investing Activities	Investing Activities					Investing Activities
Capital expenditures	Capital expenditures	(395)		(442)		Capital expenditures	(955)		(1,384)
Investment in gas field developments	Investment in gas field developments	(5)		(25)		Investment in gas field developments	(5)		(71)

Purchases of previously leased assets						Purchases of previously leased assets	(4)		(9)
Proceeds from sales of property and businesses, net of cash divested	Proceeds from sales of property and businesses, net of cash divested	11		—		Proceeds from sales of property and businesses, net of cash divested	295		47

Acquisitions of property and businesses, net of cash acquired						Acquisitions of property and businesses, net of cash acquired	(130)		0
Investments in and loans to nonconsolidated affiliates	Investments in and loans to nonconsolidated affiliates	(114)		—		Investments in and loans to nonconsolidated affiliates	(280)		(333)
Distributions and loan repayments from nonconsolidated affiliates	Distributions and loan repayments from nonconsolidated affiliates	6		—		Distributions and loan repayments from nonconsolidated affiliates	7		0
Purchases of investments	Purchases of investments	(128)		(173)		Purchases of investments	(582)		(784)
Proceeds from sales and maturities of investments	Proceeds from sales and maturities of investments	472		176		Proceeds from sales and maturities of investments	1,009		973

Other investing activities, net						Other investing activities, net	29		0
Cash used for investing activities - continuing operations	Cash used for investing activities - continuing operations	(153)		(464)		Cash used for investing activities - continuing operations	(616)		(1,561)
Cash used for investing activities - discontinued operations	Cash used for investing activities - discontinued operations	—		(34)		Cash used for investing activities - discontinued operations	0		(34)
Cash used for investing activities	Cash used for investing activities	(153)		(498)		Cash used for investing activities	(616)		(1,595)
Financing Activities	Financing Activities					Financing Activities
Changes in short-term notes payable	Changes in short-term notes payable	838		(16)		Changes in short-term notes payable	(267)		149
Proceeds from issuance of short-term debt greater than three months						Proceeds from issuance of short-term debt greater than three months	163		0
Payments on short-term debt greater than three months						Payments on short-term debt greater than three months	(163)		0
Proceeds from issuance of long-term debt	Proceeds from issuance of long-term debt	2,449		—		Proceeds from issuance of long-term debt	4,649		2,146
Payments on long-term debt	Payments on long-term debt	(2,275)		(81)		Payments on long-term debt	(4,347)		(4,271)
Purchases of treasury stock	Purchases of treasury stock	(125)		—		Purchases of treasury stock	(125)		(406)
Proceeds from issuance of stock	Proceeds from issuance of stock	16		28		Proceeds from issuance of stock	53		39
Transaction financing, debt issuance and other costs	Transaction financing, debt issuance and other costs	(93)		—		Transaction financing, debt issuance and other costs	(175)		(61)
Employee taxes paid for share-based payment arrangements	Employee taxes paid for share-based payment arrangements	(26)		(45)		Employee taxes paid for share-based payment arrangements	(26)		(54)
Distributions to noncontrolling interests	Distributions to noncontrolling interests	(1)		(2)		Distributions to noncontrolling interests	(19)		(16)

Purchases of noncontrolling interests						Purchases of noncontrolling interests	0		(131)
Dividends paid to stockholders	Dividends paid to stockholders	(518)		—		Dividends paid to stockholders	(1,552)		(1,033)
Dividends paid to DowDuPont Inc.	Dividends paid to DowDuPont Inc.	—		(535)		Dividends paid to DowDuPont Inc.	0		(535)
Settlements and transfers related to separation from DowDuPont Inc.	Settlements and transfers related to separation from DowDuPont Inc.	—		36		Settlements and transfers related to separation from DowDuPont Inc.	0		1,935

Cash provided by (used for) financing activities - continuing operations		265		(615)
Cash used for financing activities - continuing operations						Cash used for financing activities - continuing operations	(1,809)		(2,238)
Cash used for financing activities - discontinued operations	Cash used for financing activities - discontinued operations	—		(18)		Cash used for financing activities - discontinued operations	0		(18)
Cash provided by (used for) financing activities		265		(633)
Cash used for financing activities						Cash used for financing activities	(1,809)		(2,256)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	Effect of exchange rate changes on cash, cash equivalents and restricted cash	(86)		30		Effect of exchange rate changes on cash, cash equivalents and restricted cash	4		(54)
Cash reclassified as held for sale		—		(97)

Summary	Summary					Summary
Increase in cash, cash equivalents and restricted cash	Increase in cash, cash equivalents and restricted cash	1,265		183		Increase in cash, cash equivalents and restricted cash	2,175		75
Cash, cash equivalents and restricted cash at beginning of period	Cash, cash equivalents and restricted cash at beginning of period	2,380		2,764		Cash, cash equivalents and restricted cash at beginning of period	2,380		2,764
Cash, cash equivalents and restricted cash at end of period	Cash, cash equivalents and restricted cash at end of period	$	3,645	$	2,947	Cash, cash equivalents and restricted cash at end of period	$	4,555	$	2,839
Less: Restricted cash and cash equivalents, included in "Other current assets"	Less: Restricted cash and cash equivalents, included in "Other current assets"	12		43		Less: Restricted cash and cash equivalents, included in "Other current assets"	6		16
Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	3,633	$	2,904	Cash and cash equivalents at end of period	$	4,549	$	2,823

See Notes to the Consolidated Financial Statements.

Table of Contents

Dow Inc. and Subsidiaries

Consolidated Statements of Equity


		Three Months Ended							Three Months Ended						Nine Months Ended
In millions (Unaudited)	In millions (Unaudited)	Mar 31, 2020		Mar 31, 2019		In millions (Unaudited)	Sep 30, 2020		Sep 30, 2019		Sep 30, 2020		Sep 30, 2019
Common Stock	Common Stock					Common Stock

Balance at beginning and end of period		$	8	$	—
Balance at beginning of period						Balance at beginning of period	$	8	$	7	$	8	$	0
Common stock issued						Common stock issued	0		0		0		7
Balance at end of period						Balance at end of period	8		7		8		7
Additional Paid-in Capital	Additional Paid-in Capital					Additional Paid-in Capital
Balance at beginning of period	Balance at beginning of period	7,325		7,042		Balance at beginning of period	7,431		7,186		7,325		7,042
Common stock issued/sold	Common stock issued/sold	16		—		Common stock issued/sold	23		5		53		4
Issuance of parent company stock - DowDuPont Inc.	Issuance of parent company stock - DowDuPont Inc.	—		28		Issuance of parent company stock - DowDuPont Inc.	0		0		0		28
Stock-based compensation and allocation of ESOP shares	Stock-based compensation and allocation of ESOP shares	29		83		Stock-based compensation and allocation of ESOP shares	43		55		119		202

Other						Other	0		(7)		0		(37)
Balance at end of period	Balance at end of period	7,370		7,153		Balance at end of period	7,497		7,239		7,497		7,239
Retained Earnings	Retained Earnings					Retained Earnings
Balance at beginning of period	Balance at beginning of period	17,045		35,460		Balance at beginning of period	16,017		20,110		17,045		35,460
Net income available for Dow Inc. common stockholders		239		556
Net income (loss) available for Dow Inc. common stockholders						Net income (loss) available for Dow Inc. common stockholders	(25)		333		(11)		964
Dividends to stockholders	Dividends to stockholders	(518)		—		Dividends to stockholders	(518)		(516)		(1,552)		(1,033)
Dividends to DowDuPont Inc.	Dividends to DowDuPont Inc.	—		(535)		Dividends to DowDuPont Inc.	0		0		0		(535)
Common control transaction	Common control transaction	—		35		Common control transaction	0		(50)		0		(14,861)
Adoption of accounting standards	Adoption of accounting standards	—		(111)		Adoption of accounting standards	0		0		0		(111)
Other	Other	(3)		(2)		Other	(2)		(4)		(10)		(11)
Balance at end of period	Balance at end of period	16,763		35,403		Balance at end of period	15,472		19,873		15,472		19,873
Accumulated Other Comprehensive Loss	Accumulated Other Comprehensive Loss					Accumulated Other Comprehensive Loss
Balance at beginning of period	Balance at beginning of period	(10,246)		(9,885)		Balance at beginning of period	(10,225)		(8,988)		(10,246)		(9,885)
Other comprehensive income (loss)	Other comprehensive income (loss)	(283)		102		Other comprehensive income (loss)	284		(231)		305		(127)
Common control transaction						Common control transaction	0		0		0		793
Balance at end of period	Balance at end of period	(10,529)		(9,783)		Balance at end of period	(9,941)		(9,219)		(9,941)		(9,219)
Unearned ESOP Shares	Unearned ESOP Shares					Unearned ESOP Shares
Balance at beginning of period	Balance at beginning of period	(91)		(134)		Balance at beginning of period	(69)		(99)		(91)		(134)

ESOP shares acquired						ESOP shares acquired	0		(2)		0		(2)
Allocation of ESOP shares	Allocation of ESOP shares	10		29		Allocation of ESOP shares	12		6		34		41
Balance at end of period	Balance at end of period	(81)		(105)		Balance at end of period	(57)		(95)		(57)		(95)
Treasury Stock	Treasury Stock					Treasury Stock
Balance at beginning of period	Balance at beginning of period	(500)		—		Balance at beginning of period	(625)		(305)		(500)		0
Treasury stock purchases	Treasury stock purchases	(125)		—		Treasury stock purchases	0		(101)		(125)		(406)
Balance at end of period	Balance at end of period	(625)		—		Balance at end of period	(625)		(406)		(625)		(406)
Dow Inc.'s stockholders' equity	Dow Inc.'s stockholders' equity	12,906		32,668		Dow Inc.'s stockholders' equity	12,354		17,399		12,354		17,399
Noncontrolling Interests	Noncontrolling Interests	555		1,180		Noncontrolling Interests	578		587		578		587
Total Equity	Total Equity	$	13,461	$	33,848	Total Equity	$	12,932	$	17,986	$	12,932	$	17,986

Dividends declared per share of common stock	Dividends declared per share of common stock	$	0.70	$	—	Dividends declared per share of common stock	$	0.70	$	0.70	$	2.10	$	1.40

See Notes to the Consolidated Financial Statements.

Table of Contents

The Dow Chemical Company and Subsidiaries

Consolidated Statements of Income


		Three Months Ended							Three Months Ended						Nine Months Ended
In millions (Unaudited)	In millions (Unaudited)	Mar 31, 2020		Mar 31, 2019		In millions (Unaudited)	Sep 30, 2020		Sep 30, 2019		Sep 30, 2020		Sep 30, 2019
Net sales	Net sales	$	9,770	$	10,969	Net sales	$	9,712	$	10,764	$	27,836	$	32,747
Cost of sales	Cost of sales	8,230		9,142		Cost of sales	8,371		9,377		24,209		27,938
Research and development expenses	Research and development expenses	179		190		Research and development expenses	193		194		554		592
Selling, general and administrative expenses	Selling, general and administrative expenses	334		448		Selling, general and administrative expenses	372		389		1,062		1,255
Amortization of intangibles	Amortization of intangibles	100		116		Amortization of intangibles	100		100		300		320
Restructuring and asset related charges - net	Restructuring and asset related charges - net	96		156		Restructuring and asset related charges - net	617		147		719		368
Integration and separation costs	Integration and separation costs	65		452		Integration and separation costs	63		164		174		940
Equity in losses of nonconsolidated affiliates		(89)		(14)
Equity in earnings (losses) of nonconsolidated affiliates						Equity in earnings (losses) of nonconsolidated affiliates	60		(44)		(124)		(73)
Sundry income (expense) - net	Sundry income (expense) - net	(82)		69		Sundry income (expense) - net	181		284		150		462
Interest income	Interest income	16		18		Interest income	7		19		28		58
Interest expense and amortization of debt discount	Interest expense and amortization of debt discount	215		241		Interest expense and amortization of debt discount	202		238		617		728
Income from continuing operations before income taxes	Income from continuing operations before income taxes	396		297		Income from continuing operations before income taxes	42		414		255		1,053
Provision for income taxes on continuing operations	Provision for income taxes on continuing operations	138		141		Provision for income taxes on continuing operations	43		90		215		356
Income from continuing operations, net of tax		258		156
Income (loss) from continuing operations, net of tax						Income (loss) from continuing operations, net of tax	(1)		324		40		697
Income from discontinued operations, net of tax	Income from discontinued operations, net of tax	—		445		Income from discontinued operations, net of tax	0		0		0		445
Net income		258		601
Net income (loss)						Net income (loss)	(1)		324		40		1,142
Net income attributable to noncontrolling interests	Net income attributable to noncontrolling interests	19		45		Net income attributable to noncontrolling interests	24		14		51		74
Net income available for The Dow Chemical Company common stockholder		$	239	$	556
Net income (loss) available for The Dow Chemical Company common stockholder						Net income (loss) available for The Dow Chemical Company common stockholder	$	(25)	$	310	$	(11)	$	1,068

Depreciation	Depreciation	$	515	$	543	Depreciation	$	526	$	540	$	1,558	$	1,621
Capital expenditures	Capital expenditures	$	395	$	442	Capital expenditures	$	287	$	472	$	955	$	1,384

See Notes to the Consolidated Financial Statements.

Table of Contents

The Dow Chemical Company and Subsidiaries

Consolidated Statements of Comprehensive Income


		Three Months Ended							Three Months Ended						Nine Months Ended
In millions (Unaudited)	In millions (Unaudited)	Mar 31, 2020		Mar 31, 2019		In millions (Unaudited)	Sep 30, 2020		Sep 30, 2019		Sep 30, 2020		Sep 30, 2019
Net income		$	258	$	601
Net income (loss)						Net income (loss)	$	(1)	$	324	$	40	$	1,142
Other comprehensive income (loss), net of tax	Other comprehensive income (loss), net of tax					Other comprehensive income (loss), net of tax
Unrealized gains (losses) on investments	Unrealized gains (losses) on investments	(100)		67		Unrealized gains (losses) on investments	8		11		(16)		111
Cumulative translation adjustments	Cumulative translation adjustments	(163)		(31)		Cumulative translation adjustments	91		(216)		(9)		(180)
Pension and other postretirement benefit plans	Pension and other postretirement benefit plans	142		141		Pension and other postretirement benefit plans	147		108		430		355
Derivative instruments	Derivative instruments	(162)		(75)		Derivative instruments	38		(134)		(100)		(413)
Total other comprehensive income (loss)	Total other comprehensive income (loss)	(283)		102		Total other comprehensive income (loss)	284		(231)		305		(127)
Comprehensive income (loss)		(25)		703
Comprehensive income						Comprehensive income	283		93		345		1,015
Comprehensive income attributable to noncontrolling interests, net of tax	Comprehensive income attributable to noncontrolling interests, net of tax	19		51		Comprehensive income attributable to noncontrolling interests, net of tax	24		7		51		79
Comprehensive income (loss) attributable to The Dow Chemical Company		$	(44)	$	652
Comprehensive income attributable to The Dow Chemical Company						Comprehensive income attributable to The Dow Chemical Company	$	259	$	86	$	294��	$	936

See Notes to the Consolidated Financial Statements.

Table of Contents

The Dow Chemical Company and Subsidiaries

Consolidated Balance Sheets


In millions, except share amounts (Unaudited)	In millions, except share amounts (Unaudited)	Mar 31, 2020		Dec 31, 2019		In millions, except share amounts (Unaudited)	Sep 30, 2020		Dec 31, 2019
Assets	Assets					Assets
Current Assets	Current Assets					Current Assets
Cash and cash equivalents (variable interest entities restricted - 2020: $44; 2019: $37)		$	3,633	$	2,367
Marketable securities		1		21
Cash and cash equivalents (variable interest entities restricted - 2020: $53; 2019: $37)						Cash and cash equivalents (variable interest entities restricted - 2020: $53; 2019: $37)	$	4,549	$	2,367

Accounts and notes receivable:	Accounts and notes receivable:					Accounts and notes receivable:
Trade (net of allowance for doubtful receivables - 2020: $43; 2019: $45)		4,841		4,844
Trade (net of allowance for doubtful receivables - 2020: $45; 2019: $45)						Trade (net of allowance for doubtful receivables - 2020: $45; 2019: $45)	4,689		4,844
Other	Other	2,770		2,716		Other	2,384		2,716
Inventories	Inventories	6,324		6,214		Inventories	5,609		6,214
Other current assets	Other current assets	490		571		Other current assets	484		592
Total current assets	Total current assets	18,059		16,733		Total current assets	17,715		16,733
Investments	Investments					Investments
Investment in nonconsolidated affiliates	Investment in nonconsolidated affiliates	1,235		1,404		Investment in nonconsolidated affiliates	1,281		1,404
Other investments (investments carried at fair value - 2020: $1,306; 2019: $1,584)		2,136		2,588
Other investments (investments carried at fair value - 2020: $1,374; 2019: $1,584)						Other investments (investments carried at fair value - 2020: $1,374; 2019: $1,584)	2,183		2,588
Noncurrent receivables	Noncurrent receivables	665		1,011		Noncurrent receivables	706		1,011
Total investments	Total investments	4,036		5,003		Total investments	4,170		5,003
Property	Property					Property
Property	Property	54,942		54,910		Property	56,132		54,910
Less accumulated depreciation	Less accumulated depreciation	34,136		33,914		Less accumulated depreciation	35,719		33,914
Net property (variable interest entities restricted - 2020: $286; 2019: $330)		20,806		20,996
Net property (variable interest entities restricted - 2020: $230; 2019: $330)						Net property (variable interest entities restricted - 2020: $230; 2019: $330)	20,413		20,996
Other Assets	Other Assets					Other Assets
Goodwill	Goodwill	8,780		8,796		Goodwill	8,854		8,796
Other intangible assets (net of accumulated amortization - 2020: $3,994; 2019: $3,886)		3,636		3,759
Other intangible assets (net of accumulated amortization - 2020: $4,276; 2019: $3,886)						Other intangible assets (net of accumulated amortization - 2020: $4,276; 2019: $3,886)	3,442		3,759
Operating lease right-of-use assets	Operating lease right-of-use assets	1,942		2,072		Operating lease right-of-use assets	1,809		2,072
Deferred income tax assets	Deferred income tax assets	2,248		2,213		Deferred income tax assets	2,273		2,213
Deferred charges and other assets	Deferred charges and other assets	1,067		818		Deferred charges and other assets	1,161		818
Total other assets	Total other assets	17,673		17,658		Total other assets	17,539		17,658
Total Assets	Total Assets	$	60,574	$	60,390	Total Assets	$	59,837	$	60,390
Liabilities and Equity	Liabilities and Equity					Liabilities and Equity
Current Liabilities	Current Liabilities					Current Liabilities
Notes payable	Notes payable	$	1,490	$	586	Notes payable	$	329	$	586
Long-term debt due within one year	Long-term debt due within one year	384		435		Long-term debt due within one year	347		435
Accounts payable:	Accounts payable:					Accounts payable:
Trade	Trade	3,769		3,889		Trade	3,400		3,889
Other	Other	1,815		2,064		Other	1,964		2,064
Operating lease liabilities - current	Operating lease liabilities - current	384		421		Operating lease liabilities - current	405		421
Income taxes payable	Income taxes payable	468		522		Income taxes payable	354		522

Accrued and other current liabilities	Accrued and other current liabilities	2,314		2,233		Accrued and other current liabilities	2,784		2,233
Total current liabilities	Total current liabilities	10,624		10,150		Total current liabilities	9,583		10,150
Long-Term Debt (variable interest entities nonrecourse - 2020: $30; 2019: $34)		16,313		15,975
Long-Term Debt (variable interest entities nonrecourse - 2020: $19; 2019: $34)						Long-Term Debt (variable interest entities nonrecourse - 2020: $19; 2019: $34)	16,698		15,975
Other Noncurrent Liabilities	Other Noncurrent Liabilities					Other Noncurrent Liabilities
Deferred income tax liabilities	Deferred income tax liabilities	352		347		Deferred income tax liabilities	337		347
Pension and other postretirement benefits - noncurrent	Pension and other postretirement benefits - noncurrent	9,832		10,083		Pension and other postretirement benefits - noncurrent	9,759		10,083
Asbestos-related liabilities - noncurrent	Asbestos-related liabilities - noncurrent	1,048		1,060		Asbestos-related liabilities - noncurrent	1,027		1,060
Operating lease liabilities - noncurrent	Operating lease liabilities - noncurrent	1,622		1,739		Operating lease liabilities - noncurrent	1,488		1,739
Other noncurrent obligations	Other noncurrent obligations	6,555		6,174		Other noncurrent obligations	7,254		6,174
Total other noncurrent liabilities	Total other noncurrent liabilities	19,409		19,403		Total other noncurrent liabilities	19,865		19,403
Stockholder's Equity	Stockholder's Equity					Stockholder's Equity
Common stock (authorized and issued 100 shares of $0.01 par value each)	Common stock (authorized and issued 100 shares of $0.01 par value each)	—		—		Common stock (authorized and issued 100 shares of $0.01 par value each)	0		0
Additional paid-in capital	Additional paid-in capital	7,378		7,333		Additional paid-in capital	7,505		7,333
Retained earnings	Retained earnings	16,905		17,313		Retained earnings	15,606		17,313
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(10,529)		(10,246)		Accumulated other comprehensive loss	(9,941)		(10,246)
Unearned ESOP shares	Unearned ESOP shares	(81)		(91)		Unearned ESOP shares	(57)		(91)

The Dow Chemical Company’s stockholder's equity	The Dow Chemical Company’s stockholder's equity	13,673		14,309		The Dow Chemical Company’s stockholder's equity	13,113		14,309
Noncontrolling interests	Noncontrolling interests	555		553		Noncontrolling interests	578		553
Total equity	Total equity	14,228		14,862		Total equity	13,691		14,862
Total Liabilities and Equity	Total Liabilities and Equity	$	60,574	$	60,390	Total Liabilities and Equity	$	59,837	$	60,390

See Notes to the Consolidated Financial Statements.

Table of Contents

The Dow Chemical Company and Subsidiaries

Consolidated Statements of Cash Flows


In millions (Unaudited)	In millions (Unaudited)	Three Months Ended						In millions (Unaudited)	Nine Months Ended
				Mar 31, 2020		Mar 31, 2019					Sep 30, 2020	Sep 30, 2019
Operating Activities	Operating Activities					Operating Activities
Net income	Net income	$	258	$	601	Net income	$	40	$	1,142
Less: Income from discontinued operations, net of tax	Less: Income from discontinued operations, net of tax	—		445		Less: Income from discontinued operations, net of tax	0		445
Income from continuing operations, net of tax	Income from continuing operations, net of tax	258		156		Income from continuing operations, net of tax	40		697
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:					Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	Depreciation and amortization	724		743		Depreciation and amortization	2,148		2,225
Credit for deferred income tax	Credit for deferred income tax	(57)		(72)		Credit for deferred income tax	(198)		(146)
Earnings of nonconsolidated affiliates less than dividends received	Earnings of nonconsolidated affiliates less than dividends received	134		775		Earnings of nonconsolidated affiliates less than dividends received	515		927
Net periodic pension benefit cost	Net periodic pension benefit cost	64		41		Net periodic pension benefit cost	195		101
Pension contributions	Pension contributions	(63)		(99)		Pension contributions	(188)		(206)
Net gain on sales of assets, businesses and investments	Net gain on sales of assets, businesses and investments	(12)		(2)		Net gain on sales of assets, businesses and investments	(283)		(48)

Restructuring and asset related charges - net	Restructuring and asset related charges - net	96		156		Restructuring and asset related charges - net	719		368
Other net loss	Other net loss	136		33		Other net loss	291		157
Changes in assets and liabilities, net of effects of acquired and divested companies:	Changes in assets and liabilities, net of effects of acquired and divested companies:					Changes in assets and liabilities, net of effects of acquired and divested companies:
Accounts and notes receivable	Accounts and notes receivable	128		85		Accounts and notes receivable	339		994
Inventories	Inventories	(111)		(47)		Inventories	587		483
Accounts payable	Accounts payable	(314)		(452)		Accounts payable	(560)		(926)
Other assets and liabilities, net	Other assets and liabilities, net	256		(274)		Other assets and liabilities, net	999		(860)
Cash provided by operating activities - continuing operations	Cash provided by operating activities - continuing operations	1,239		1,043		Cash provided by operating activities - continuing operations	4,604		3,766
Cash provided by operating activities - discontinued operations	Cash provided by operating activities - discontinued operations	—		338		Cash provided by operating activities - discontinued operations	0		371
Cash provided by operating activities	Cash provided by operating activities	1,239		1,381		Cash provided by operating activities	4,604		4,137
Investing Activities	Investing Activities					Investing Activities
Capital expenditures	Capital expenditures	(395)		(442)		Capital expenditures	(955)		(1,384)
Investment in gas field developments	Investment in gas field developments	(5)		(25)		Investment in gas field developments	(5)		(71)

Purchases of previously leased assets						Purchases of previously leased assets	(4)		(9)
Proceeds from sales of property and businesses, net of cash divested	Proceeds from sales of property and businesses, net of cash divested	11		—		Proceeds from sales of property and businesses, net of cash divested	295		47

Acquisitions of property and businesses, net of cash acquired						Acquisitions of property and businesses, net of cash acquired	(130)		0
Investments in and loans to nonconsolidated affiliates	Investments in and loans to nonconsolidated affiliates	(114)		—		Investments in and loans to nonconsolidated affiliates	(280)		(333)
Distributions and loan repayments from nonconsolidated affiliates	Distributions and loan repayments from nonconsolidated affiliates	6		—		Distributions and loan repayments from nonconsolidated affiliates	7		0
Purchases of investments	Purchases of investments	(128)		(173)		Purchases of investments	(582)		(784)
Proceeds from sales and maturities of investments	Proceeds from sales and maturities of investments	472		176		Proceeds from sales and maturities of investments	1,009		973

Other investing activities, net						Other investing activities, net	29		0
Cash used for investing activities - continuing operations	Cash used for investing activities - continuing operations	(153)		(464)		Cash used for investing activities - continuing operations	(616)		(1,561)
Cash used for investing activities - discontinued operations	Cash used for investing activities - discontinued operations	—		(34)		Cash used for investing activities - discontinued operations	0		(34)
Cash used for investing activities	Cash used for investing activities	(153)		(498)		Cash used for investing activities	(616)		(1,595)
Financing Activities	Financing Activities					Financing Activities
Changes in short-term notes payable	Changes in short-term notes payable	838		(16)		Changes in short-term notes payable	(267)		149

Proceeds from issuance of short-term debt greater than three months						Proceeds from issuance of short-term debt greater than three months	163		0
Payments on short-term debt greater than three months						Payments on short-term debt greater than three months	(163)		0
Changes in notes payable with Dow Inc.						Changes in notes payable with Dow Inc.	0		400
Proceeds from issuance of long-term debt	Proceeds from issuance of long-term debt	2,449		—		Proceeds from issuance of long-term debt	4,649		2,146
Payments on long-term debt	Payments on long-term debt	(2,275)		(81)		Payments on long-term debt	(4,347)		(4,271)

Proceeds from issuance of stock	Proceeds from issuance of stock	16		28		Proceeds from issuance of stock	53		39
Transaction financing, debt issuance and other costs	Transaction financing, debt issuance and other costs	(93)		—		Transaction financing, debt issuance and other costs	(175)		(61)
Employee taxes paid for share-based payment arrangements	Employee taxes paid for share-based payment arrangements	(26)		(45)		Employee taxes paid for share-based payment arrangements	(26)		(54)
Distributions to noncontrolling interests	Distributions to noncontrolling interests	(1)		(2)		Distributions to noncontrolling interests	(19)		(16)

Purchases of noncontrolling interests						Purchases of noncontrolling interests	0		(131)
Dividends paid to Dow Inc.	Dividends paid to Dow Inc.	(643)		—		Dividends paid to Dow Inc.	(1,685)		0
Dividends paid to DowDuPont Inc.	Dividends paid to DowDuPont Inc.	—		(535)		Dividends paid to DowDuPont Inc.	0		(535)
Settlements and transfers related to separation from DowDuPont Inc.	Settlements and transfers related to separation from DowDuPont Inc.	—		36		Settlements and transfers related to separation from DowDuPont Inc.	0		(61)

Cash provided by (used for) financing activities - continuing operations		265		(615)
Cash used for financing activities - continuing operations						Cash used for financing activities - continuing operations	(1,817)		(2,395)
Cash used for financing activities - discontinued operations	Cash used for financing activities - discontinued operations	—		(18)		Cash used for financing activities - discontinued operations	0		(18)
Cash provided by (used for) financing activities		265		(633)
Cash used for financing activities						Cash used for financing activities	(1,817)		(2,413)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	Effect of exchange rate changes on cash, cash equivalents and restricted cash	(86)		30		Effect of exchange rate changes on cash, cash equivalents and restricted cash	4		(54)
Cash reclassified as held for sale		—		(97)

Summary	Summary					Summary
Increase in cash, cash equivalents and restricted cash	Increase in cash, cash equivalents and restricted cash	1,265		183		Increase in cash, cash equivalents and restricted cash	2,175		75
Cash, cash equivalents and restricted cash at beginning of period	Cash, cash equivalents and restricted cash at beginning of period	2,380		2,764		Cash, cash equivalents and restricted cash at beginning of period	2,380		2,764
Cash, cash equivalents and restricted cash at end of period	Cash, cash equivalents and restricted cash at end of period	$	3,645	$	2,947	Cash, cash equivalents and restricted cash at end of period	$	4,555	$	2,839
Less: Restricted cash and cash equivalents, included in "Other current assets"	Less: Restricted cash and cash equivalents, included in "Other current assets"	12		43		Less: Restricted cash and cash equivalents, included in "Other current assets"	6		16
Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	3,633	$	2,904	Cash and cash equivalents at end of period	$	4,549	$	2,823

See Notes to the Consolidated Financial Statements.

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The Dow Chemical Company and Subsidiaries

Consolidated Statements of Equity


		Three Months Ended							Three Months Ended						Nine Months Ended
In millions (Unaudited)	In millions (Unaudited)	Mar 31, 2020		Mar 31, 2019		In millions (Unaudited)	Sep 30, 2020		Sep 30, 2019		Sep 30, 2020		Sep 30, 2019
Common Stock	Common Stock					Common Stock
Balance at beginning and end of period	Balance at beginning and end of period	$	—	$	—	Balance at beginning and end of period	$	0	$	0	$	0	$	0
Additional Paid-in Capital	Additional Paid-in Capital					Additional Paid-in Capital
Balance at beginning of period	Balance at beginning of period	7,333		7,042		Balance at beginning of period	7,439		7,192		7,333		7,042
Issuance of parent company stock - Dow Inc.	Issuance of parent company stock - Dow Inc.	16		—		Issuance of parent company stock - Dow Inc.	23		5		53		11
Issuance of parent company stock - DowDuPont Inc.	Issuance of parent company stock - DowDuPont Inc.	—		28		Issuance of parent company stock - DowDuPont Inc.	0		0		0		28
Stock-based compensation and allocation of ESOP shares	Stock-based compensation and allocation of ESOP shares	29		83		Stock-based compensation and allocation of ESOP shares	43		55		119		202

Other						Other	0		(7)		0		(38)
Balance at end of period	Balance at end of period	7,378		7,153		Balance at end of period	7,505		7,245		7,505		7,245
Retained Earnings	Retained Earnings					Retained Earnings
Balance at beginning of period	Balance at beginning of period	17,313		35,460		Balance at beginning of period	16,147		19,575		17,313		35,460
Net income available for The Dow Chemical Company common stockholder		239		556
Net income (loss) available for The Dow Chemical Company common stockholder						Net income (loss) available for The Dow Chemical Company common stockholder	(25)		310		(11)		1,068
Dividends to Dow Inc.	Dividends to Dow Inc.	(643)		—		Dividends to Dow Inc.	(513)		0		(1,685)		0
Dividends to DowDuPont Inc.	Dividends to DowDuPont Inc.	—		(535)		Dividends to DowDuPont Inc.	0		0		0		(535)
Common control transaction	Common control transaction	—		35		Common control transaction	0		(32)		0		(16,022)
Adoption of accounting standards	Adoption of accounting standards	—		(111)		Adoption of accounting standards	0		0		0		(111)
Other	Other	(4)		(2)		Other	(3)		(4)		(11)		(11)
Balance at end of period	Balance at end of period	16,905		35,403		Balance at end of period	15,606		19,849		15,606		19,849
Accumulated Other Comprehensive Loss	Accumulated Other Comprehensive Loss					Accumulated Other Comprehensive Loss
Balance at beginning of period	Balance at beginning of period	(10,246)		(9,885)		Balance at beginning of period	(10,225)		(8,988)		(10,246)		(9,885)
Other comprehensive income (loss)	Other comprehensive income (loss)	(283)		102		Other comprehensive income (loss)	284		(231)		305		(127)
Common control transaction						Common control transaction	0		0		0		793
Balance at end of period	Balance at end of period	(10,529)		(9,783)		Balance at end of period	(9,941)		(9,219)		(9,941)		(9,219)
Unearned ESOP Shares	Unearned ESOP Shares					Unearned ESOP Shares
Balance at beginning of period	Balance at beginning of period	(91)		(134)		Balance at beginning of period	(69)		(99)		(91)		(134)

ESOP shares acquired						ESOP shares acquired	0		(2)		0		(2)
Allocation of ESOP shares	Allocation of ESOP shares	10		29		Allocation of ESOP shares	12		6		34		41
Balance at end of period	Balance at end of period	(81)		(105)		Balance at end of period	(57)		(95)		(57)		(95)

The Dow Chemical Company's stockholder's equity	The Dow Chemical Company's stockholder's equity	13,673		32,668		The Dow Chemical Company's stockholder's equity	13,113		17,780		13,113		17,780
Noncontrolling Interests	Noncontrolling Interests	555		1,180		Noncontrolling Interests	578		587		578		587
Total Equity	Total Equity	$	14,228	$	33,848	Total Equity	$	13,691	$	18,367	$	13,691	$	18,367

See Notes to the Consolidated Financial Statements.

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

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Table of Contents


Note	Note		Page	Note		Page
1	1	Consolidated Financial Statements	15	1	Consolidated Financial Statements	15
2	2	Recent Accounting Guidance	16	2	Recent Accounting Guidance	16
3	3	Separation from DowDuPont	17	3	Separation from DowDuPont	17
4	4	Revenue	19	4	Revenue	19
5	5	Restructuring and Asset Related Charges - Net	21	5	Divestitures	20
6	6	Supplementary Information	22	6	Restructuring and Asset Related Charges - Net	21
7	7	Earnings Per Share Calculations	23	7	Supplementary Information	24
8	8	Inventories	24	8	Earnings Per Share Calculations	26
9	9	Nonconsolidated Affiliates	24	9	Inventories	27
10	10	Goodwill and Other Intangible Assets	25	10	Nonconsolidated Affiliates	27
11	11	Notes Payable, Long-Term Debt and Available Credit Facilities	26	11	Goodwill and Other Intangible Assets	28
12	12	Commitments and Contingent Liabilities	28	12	Notes Payable, Long-Term Debt and Available Credit Facilities	29
13	13	Leases	31	13	Commitments and Contingent Liabilities	31
14	14	Accumulated Other Comprehensive Loss	34	14	Leases	36
15	15	Noncontrolling Interests	35	15	Accumulated Other Comprehensive Loss	38
16	16	Pension and Other Postretirement Benefit Plans	35	16	Noncontrolling Interests	39
17	17	Stock-Based Compensation	36	17	Pension and Other Postretirement Benefit Plans	40
18	18	Financial Instruments	36	18	Stock-Based Compensation	40
19	19	Fair Value Measurements	42	19	Financial Instruments	41
20	20	Variable Interest Entities	43	20	Fair Value Measurements	48
21	21	Related Party Transactions	43	21	Variable Interest Entities	50
22	22	Segments and Geographic Regions	44	22	Related Party Transactions	50
23				23	Segments and Geographic Regions	51

NOTE 1 – CONSOLIDATED FINANCIAL STATEMENTS

Merger and Separation

On April 1, 2019, DowDuPont Inc. (“DowDuPont” and effective June 3, 2019, n/k/a DuPont de Nemours, Inc. or "DuPont") completed the separation of its materials science business and Dow Inc. became the direct parent company of The Dow Chemical Company and its consolidated subsidiaries (“TDCC” and together with Dow Inc., “Dow” or the “Company”). The separation was contemplated by the merger of equals transaction effective August 31, 2017, under the Agreement and Plan of Merger, dated as of December 11, 2015, as amended on March 31, 2017. TDCC and E. I. du Pont de Nemours and Company and its consolidated subsidiaries (“Historical DuPont”) each merged with subsidiaries of DowDuPont and, as a result, TDCC and Historical DuPont became subsidiaries of DowDuPont (the “Merger”). Subsequent to the Merger, TDCC and Historical DuPont engaged in a series of internal reorganization and realignment steps to realign their businesses into three subgroups: agriculture, materials science and specialty products. Dow Inc. was formed as a wholly owned subsidiary of DowDuPont to serve as the holding company for the materials science business. See Note 3 for additional information.

Basis of Presentation

The unaudited interim consolidated financial statements of Dow Inc. and TDCC were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and reflect all adjustments (including normal recurring accruals) which, in the opinion of management, are considered necessary for the fair presentation of the results for the periods presented. These statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the combined Dow Inc. and TDCC Annual Report on Form 10-K for the year ended December 31, 2019.

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Effective April 1, 2019, Dow Inc. owns all of the outstanding common shares of TDCC. TDCC is deemed the predecessor to Dow Inc. and the historical results of TDCC are deemed the historical results of Dow Inc. for periods prior to and including March 31, 2019. 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.

As of the effective date and time of the distribution, DowDuPont does not beneficially own any equity interest in Dow and no longer consolidates Dow and its consolidated subsidiaries into its financial results. The consolidated financial results of Dow for all periods presented reflect the distribution of TDCC’s agricultural sciences business (“AgCo”) and specialty products business (“SpecCo”) as discontinued operations, as well as the receipt of Historical DuPont’s ethylene and ethylene copolymers businesses (other than its ethylene acrylic elastomers business) (“ECP”) as a common control transaction from the closing of the Merger on August 31, 2017. See Note 3 for additional information.

From the Merger date through the separation, transactions between DowDuPont, TDCC and Historical DuPont and their affiliates were treated as related party transactions. Transactions between TDCC and Historical DuPont primarily consisted of the sale and procurement of certain raw materials that were consumed in each company's manufacturing process. Transactions between TDCC and Dow Inc. are treated as related party transactions for TDCC. See Note 2122 for additional information.

Throughout this Quarterly Report on Form 10-Q, unless otherwise indicated, amounts and activity are presented on a continuing operations basis.

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

Adoption of Accounting Standards

In the first quarter of 2019, the Company adopted Accounting Standards Update ("ASU") 2016-02, "Leases (Topic 842)", and the associated ASUs (collectively, "Topic 842"). The net impact to “Retained earnings” was an increase of $72 million and was primarily a result of the recognition of a deferred gain associated with a prior sale-leaseback transaction. See Note 1314 for additional information.

Additionally, at January 1, 2019, certain nonconsolidated affiliates of the Company, which were subsequently distributed as part of the separation from DowDuPont, adopted ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)" and the associated ASUs (collectively, "Topic 606"). The net impact to "Retained earnings" was a reduction of $183 million at January 1, 2019.

Change in Financial Statement Presentation

The Company reclassified "Marketable securities" to "Other current assets" in the consolidated balance sheets and, as a result, the prior period amounts have been reclassified to conform to current year presentation. Changes made to the consolidated balance sheets were as follows:


Changes to the Consolidated Balance Sheets	Dec 31, 2019
	Dow Inc.						TDCC
In millions	As Filed		Updated		As Filed		Updated
Marketable securities	$	21	$	0	$	21	$	0
Other current assets	$	658	$	679	$	571	$	592

NOTE 2 – RECENT ACCOUNTING GUIDANCE

Recently Adopted Accounting Guidance

In the first quarter of 2020, the Company adopted ASU 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement," which is part of the Financial Accounting Standards Board's ("FASB") disclosure framework project to improve the effectiveness of disclosures in the notes to the financial statements. The amendments in the new guidance remove, modify and add certain disclosure requirements related to fair value measurements covered in Topic 820, "Fair Value Measurement." The adoption of this guidance did not have a material impact on the consolidated financial statements. See Note 1920 for additional information.

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In the first quarter of 2020, the Company adopted ASU 2018-15, "Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract," which requires a customer in a cloud computing arrangement that is a service contract to follow the internal-use software guidance in Topic 350, "Intangibles - Goodwill and Other" to determine which implementation costs to capitalize as assets or expense as incurred. The adoption of this guidance did not have a material impact on the consolidated financial statements.

~~Table of Contents~~

In the first quarter of 2020, the Company adopted ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" and the associated ASUs (collectively, “Topic 326”). The amendments replace the incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. Accordingly, companies are required to consider forward-looking information to estimate credit losses expected to occur over the estimated life of an asset, including losses that may be incurred in future periods. The adoption of this guidance did not have a material impact on the consolidated financial statements.

In the third quarter of 2020, the Company adopted ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The amendments provide optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The new standard is effective March 12, 2020 through December 31, 2022, with the adoption date dependent upon the Company’s election. The Company has elected to apply the optional expedients and exceptions provided by the new guidance as modifications are made to relevant contracts, hedging relationships and other transactions during the reference rate reform transition period. As the amendments are intended to ease the potential burden in accounting for, or recognizing the effects of, reference rate reform on financial reporting, the application of this guidance has not and will not have a material impact on the consolidated financial statements.

Accounting Guidance Issued But Not Adopted at ~~March 31,~~September 30, 2020

In December 2019, the FASB issued ASU 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes." The amendments simplify the accounting for income taxes by removing certain exceptions to the general principles of Topic 740, "Income Taxes" and improve consistent application by clarifying and amending existing guidance. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption is permitted, with the amendments to be applied on a retrospective, modified retrospective or prospective basis, depending on the specific amendment. The Company ~~is currently evaluating~~will adopt the ~~impact~~new guidance in the first quarter of ~~adopting this guidance.~~

In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The amendments provide optional expedients2021 and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments are intended to ease the potential burden in accounting for, or recognizing the effects of, reference rate reform on financial reporting. The new standard is effective March 12, 2020 through December 31, 2022, with the adoption ~~date being dependent upon~~of this guidance is not expected to have a material impact on the ~~Company’s election. The Company is currently evaluating the impact of adopting this guidance.~~consolidated financial statements.

NOTE 3 – SEPARATION FROM DOWDUPONT

On April 1, 2019, DowDuPont completed the previously announced separation of its materials science business. The separation was effected by way of a pro rata distribution of all of the then-issued and outstanding shares of Dow Inc. common stock to DowDuPont stockholders of record as of the close of business, Eastern Time, on March 21, 2019 (the “Record Date”). The shareholders of record of DowDuPont received one share of Dow Inc. common stock, par value $0.01 per share, for every three shares of DowDuPont common stock, par value $0.01 per share, held as of the Record ~~Date ("Distribution Ratio").~~Date. No fractional shares of Dow Inc. common stock were issued. Instead, cash in lieu of any fractional shares was paid to DowDuPont registered shareholders. The number of shares of Dow Inc. common stock issued on April 1, 2019 was 748.8 million shares.

On April 1, 2019, Dow Inc. received a cash contribution of $2,024 million from DowDuPont as part of the internal reorganization and business realignment steps between Dow Inc., TDCC and DowDuPont. Dow Inc. recognized a reduction to "Retained earnings" of ~~$14,806~~$50 million in the third quarter of 2019 ($14,861 million in the nine months ended September 30, 2019) as a result of the cash contribution, the distribution of AgCo and SpecCo, and other separation related adjustments. TDCC recognized a reduction to "Retained earnings" of ~~$16,009~~$32 million in the third quarter of 2019 ($16,022 million in the nine months ended September 30, 2019) as a result of the distribution of AgCo and SpecCo.

Receipt of ECP

As the receipt of ECP was accounted for as a transfer between entities under common control, the consolidated financial statements have been retrospectively adjusted to reflect the receipt of ECP from the closing of the Merger on August 31, 2017. All intercompany transactions have been eliminated in consolidation. The ECP assets received and liabilities assumed were recorded at DowDuPont's historical cost basis.

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Distribution of AgCo and SpecCo

Upon distribution, the Company retrospectively adjusted the previously issued consolidated financial statements and presented AgCo and SpecCo as discontinued operations based on the guidance in Accounting Standards Codification ~~(“ASC”)~~ 205-20 “Discontinued Operations.” The results of operations of AgCo and SpecCo are presented as discontinued operations in the consolidated statements of income and are summarized in the table that follows:


Results of Operations of AgCo and SpecCo	~~Three~~Nine Months Ended
	~~Mar 31,~~Sep 30, 2019
In millions
Net sales	$	2,953
Cost of sales	1,804
Research and development expenses	175
Selling, general and administrative expenses	262
Amortization of intangibles	61
Restructuring and asset related charges - net	78

Equity in earnings of nonconsolidated affiliates	28
Sundry income (expense) - net	(18)
Interest income	3
Interest expense and amortization of debt discount	7
Income from discontinued operations before income taxes	$	579
Provision for income taxes	134
Income from discontinued operations, net of tax	$	445

Agreements Related to the Separation and Distribution

In connection with the separation, Dow Inc. entered into certain agreements with DuPont and/or Corteva Inc. ("Corteva"), including the following: Separation and Distribution Agreement, Tax Matters Agreement and Employee Matters Agreement (collectively, the "Agreements"). In addition to establishing the terms of the separation, the Agreements provide a framework for Dow’s interaction with DuPont and Corteva after the separation and also provide for the allocation among Dow, DuPont and Corteva of assets, liabilities and obligations attributable to periods prior to, at and after the completion of the separation. The Agreements also contain certain indemnity and/or cross-indemnity provisions that are intended to set forth each party’s respective rights, responsibilities and obligations for matters subject to indemnification. Except in certain instances, the parties’ indemnification obligations are uncapped. Certain indemnification obligations will be subject to reduction by insurance proceeds or other third-party proceeds of the indemnified party that reduces the amount of the loss. In addition, indemnifiable losses will be subject to, in certain cases, “de minimis” threshold amounts and, in certain cases, deductible amounts.

The impacts of indemnifications and other post-separation matters relating to the Agreements were primarily reflected in the consolidated financial statements of Dow Inc. In the second quarter of 2019, the Company recorded pretax charges related to the Agreements of $24 million in "Integration and separation costs" and $52 million in "Sundry income (expense) - net" in the consolidated statements of income of Dow Inc. and related to the Corporate segment. At ~~March 31,~~September 30, 2020, the Company had assets of ~~$51~~$58 million ($58 million at December 31, 2019) included in "Other current assets" and ~~$32~~$33 million ($52 million at December 31, 2019) included in "Noncurrent receivables," and liabilities of ~~$319~~$333 million ($352 million at December 31, 2019) included in "Accrued and other current liabilities" and ~~$105~~$100 million ($96 million at December 31, 2019) included in "Other noncurrent obligations" in the consolidated balance sheets of Dow Inc. related to the Agreements. Any adjustments to these assets and liabilities in subsequent periods will be recorded in Dow Inc.'s results of operations. In addition, the Company deferred approximately $400 million of the cash distribution received from DowDuPont at separation and recorded an associated liability in "Other noncurrent obligations," with an offset to "Retained earnings" in the consolidated balance sheets of Dow Inc. At ~~March 31,~~September 30, 2020,~~$130~~ $264 million ($130 million at December 31, 2019) of this liability was recorded in "Accrued and other current liabilities" and ~~$270~~$136 million ($270 million at December 31, 2019) was recorded in "Other noncurrent obligations" in the consolidated balance sheets. The final resolution of this liability is uncertain and any subsequent adjustments to the carrying value of this liability will be reflected in equity of Dow Inc. In the first quarter of 2020, Dow Inc. received a net payment of $6 million related to the Agreements, with $3 million recorded in "Cash flows from operating activities - discontinued operations" and $3 million recorded in "Other assets and liabilities, net" within "Cash flows from operating activities - continuing operations" in the Dow Inc. consolidated statements of cash flows.

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Integration and Separation Costs

Integration and separation costs, which reflect costs related to business separation activities, were ~~$65~~$63 million for Dow Inc. and TDCC in the third quarter of 2020, compared with $164 million in the third quarter of 2019. Integration and separation costs were $174 million for Dow Inc. and TDCC in the first ~~quarter~~nine months of 2020, compared with ~~$452~~$964 million and $940 million for Dow Inc. and TDCC, respectively, in the first ~~quarter~~nine months of 2019. Integration and separation costs related to business separation activities are expected to be substantially complete by the end of 2020.

NOTE 4 – REVENUE

Revenue Recognition

The majority of Dow's revenue is derived from product sales. ~~In the three months ended March 31, 2020, 99 percent of~~ Dow's revenue related to product sales ~~(99~~was 99 percent for the three and nine months ended ~~March 31,~~September 30, 2020 (98 percent for the three and nine months ended September 30, 2019), with the remaining balance primarily related to the Company's insurance operations and licensing of patents and technologies. Product sales consist of sales of Dow's products to manufacturers and distributors and considers order confirmations or purchase orders, which in some cases are governed by master supply agreements, to be contracts with a customer. Dow enters into licensing arrangements in which it licenses certain rights of its patents and technology to customers. Revenue from Dow’s licenses for patents and technology is derived from sales-based royalties and licensing arrangements based on billing schedules established in each contract.

Remaining Performance Obligations

Remaining performance obligations represent the transaction price allocated to unsatisfied or partially unsatisfied performance obligations. At ~~March 31,~~September 30, 2020, Dow had unfulfilled performance obligations of ~~$829~~$915 million ($826 million at December 31, 2019) related to the licensing of technology. Dow expects revenue to be recognized for the remaining performance obligations over the next seven years.

The remaining performance obligations are for product sales that have expected durations of one year or less, product sales of materials delivered through a pipeline for which Dow has elected the right to invoice practical expedient, or variable consideration attributable to royalties for licenses of patents and technology. Dow has received advance payments from customers related to long-term supply agreements that are deferred and recognized over the life of the contract, with remaining contract terms that range up to 21 years. Dow will have rights to future consideration for revenue recognized when product is delivered to the customer. These payments are included in "Accrued and other current liabilities" and "Other noncurrent obligations" in the consolidated balance sheets.

Disaggregation of Revenue

Dow disaggregates its revenue from contracts with customers by operating segment and business, as the Company believes it best depicts the nature, amount, timing and uncertainty of its revenue and cash flows.


Net Trade Sales by Segment and Business	Net Trade Sales by Segment and Business	Three Months Ended						Net Trade Sales by Segment and Business	Three Months Ended						Nine Months Ended
In millions	In millions	Mar 31, 2020		Mar 31, 2019		In millions	Sep 30, 2020		Sep 30, 2019		Sep 30, 2020		Sep 30, 2019
Hydrocarbons & Energy	Hydrocarbons & Energy	$	1,219	$	1,404	Hydrocarbons & Energy	$	1,021	$	1,325	$	3,027	$	4,078
Packaging and Specialty Plastics	Packaging and Specialty Plastics	3,390		3,734		Packaging and Specialty Plastics	3,544		3,737		10,148		11,327
Packaging & Specialty Plastics	Packaging & Specialty Plastics	$	4,609	$	5,138	Packaging & Specialty Plastics	$	4,565	$	5,062	$	13,175	$	15,405
Industrial Solutions	Industrial Solutions	$	1,054	$	1,127	Industrial Solutions	$	931	$	1,066	$	2,879	$	3,263
Polyurethanes & Construction Chemicals	Polyurethanes & Construction Chemicals	1,988		2,350		Polyurethanes & Construction Chemicals	2,124		2,295		5,632		6,914
Other	Other	3		3		Other	3		4		9		10
Industrial Intermediates & Infrastructure	Industrial Intermediates & Infrastructure	$	3,045	$	3,480	Industrial Intermediates & Infrastructure	$	3,058	$	3,365	$	8,520	$	10,187
Coatings & Performance Monomers	Coatings & Performance Monomers	$	828	$	902	Coatings & Performance Monomers	$	844	$	900	$	2,438	$	2,749
Consumer Solutions	Consumer Solutions	1,237		1,380		Consumer Solutions	1,158		1,350		3,484		4,139
Performance Materials & Coatings	Performance Materials & Coatings	$	2,065	$	2,282	Performance Materials & Coatings	$	2,002	$	2,250	$	5,922	$	6,888
Corporate	Corporate	$	51	$	69	Corporate	$	87	$	87	$	219	$	267
Total	Total	$	9,770	$	10,969	Total	$	9,712	$	10,764	$	27,836	$	32,747

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Net Trade Sales by Geographic Region	Net Trade Sales by Geographic Region	Three Months Ended						Net Trade Sales by Geographic Region	Three Months Ended						Nine Months Ended
In millions	In millions	Mar 31, 2020		Mar 31, 2019		In millions	Sep 30, 2020		Sep 30, 2019		Sep 30, 2020		Sep 30, 2019
U.S. & Canada	U.S. & Canada	$	3,550	$	3,933	U.S. & Canada	$	3,391	$	3,932	$	9,885	$	11,937
EMEAI ¹	EMEAI ¹	3,411		3,882		EMEAI ¹	3,272		3,621		9,394		11,228
Asia Pacific	Asia Pacific	1,845		2,101		Asia Pacific	2,073		2,193		5,850		6,464
Latin America	Latin America	964		1,053		Latin America	976		1,018		2,707		3,118
Total	Total	$	9,770	$	10,969	Total	$	9,712	$	10,764	$	27,836	$	32,747

1.Europe, Middle East, Africa and India.

Contract Assets and Liabilities

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

Revenue recognized in the first ~~three~~nine months of 2020 from amounts included in contract liabilities at the beginning of the period was approximately ~~$35~~$110 million (approximately ~~$55~~$100 million in the first ~~three~~nine months of 2019). In the first ~~three~~nine months of 2020, the amount of contract assets reclassified to receivables as a result of the right to the transaction consideration becoming unconditional was approximately ~~$10~~$25 million ~~($15~~(approximately $15 million in the first ~~three~~nine months of 2019).

The following table summarizes the contract assets and liabilities at ~~March 31,~~September 30, 2020 and December 31, 2019:


Contract Assets and Liabilities	Contract Assets and Liabilities	Mar 31, 2020		Dec 31, 2019		Contract Assets and Liabilities	Sep 30, 2020		Dec 31, 2019
In millions	In millions	Mar 31, 2020		Dec 31, 2019			Sep 30, 2020		Dec 31, 2019		Sep 30, 2020	Dec 31, 2019
Accounts and notes receivable - Trade	Accounts and notes receivable - Trade	$	4,841	$	4,844	Accounts and notes receivable - Trade	$	4,689	$	4,844	Sep 30, 2020	Dec 31, 2019
Contract assets - current ¹	Contract assets - current ¹	$	22	$	41	Contract assets - current ¹	$	17	$	41
Contract assets - noncurrent ²	Contract assets - noncurrent ²	$	17	$	4	Contract assets - noncurrent ²	$	43	$	4
Contract liabilities - current ³	Contract liabilities - current ³	$	196	$	193	Contract liabilities - current ³	$	310	$	193
Contract liabilities - noncurrent ⁴	Contract liabilities - noncurrent ⁴	$	1,602	$	1,607	Contract liabilities - noncurrent ⁴	$	2,004	$	1,607

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

2.Included in "Deferred charges and other assets" in the consolidated balance sheets.

3.Included in "Accrued and other current liabilities" in the consolidated balance sheets.

4.Included in "Other noncurrent obligations" in the consolidated balance sheets. The increase from December 31, 2019 to September 30, 2020 was due to an advance payment from a customer related to a long-term product supply agreement.

NOTE 5– DIVESTITURES

Divestiture of Rail Infrastructure Operations and Assets

On September 30, 2020, TDCCsold its rail infrastructure operations and assets, including existing agreements to provide rail services to unrelated third parties, at six sites in the U.S. & Canada to an affiliate of Watco Companies, L.L.C. for cash proceeds of $303 million, net of costs to sell and other adjustments and subject to customary post-closing adjustments. These assets are located at TDCC’s sites in Plaquemine and St. Charles, Louisiana; Freeport and Seadrift, Texas; and Fort Saskatchewan and Prentiss, Alberta, Canada. Divested operations included property with a net book value of $68 million and goodwill of $2 million ($16 million related to Packaging & Specialty Plastics and $54 million related to Corporate). TDCC retained ownership of the sites and underlying real property where the divested operations are located. TDCC and the buyer entered into mutual long-term service agreements designed to ensure the continuation of rail services for TDCC's existing operations at each site. The rail-service agreements include variable fees that have an initial term of 25 years. TDCC recognized a pretax gain of $233 million on the sale ($48 million related to Packaging & Specialty Plastics and $185 million related to Corporate), included in "Sundry income (expense) - net" in the consolidated statements of income.

The Company evaluated the divestiture of the rail infrastructure operations and assets and determined it did not represent a strategic shift that had a major effect on the Company’s operations and financial results and did not qualify as an individually significant component of the Company. As a result, the divestiture is not reported as discontinued operations.

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Divestiture of Marine and Terminal Operations and Assets

On September 14, 2020, TDCC announced that it entered into a definitive agreement to divest certain U.S. Gulf Coast marine and terminal operations and assets for expected cash proceeds of $620 million. These operations and assets are located at TDCC's sites in Plaquemine and St. Charles, Louisiana, and Freeport, Texas. In addition, TDCC has entered into mutual long-term service agreements with the buyer, effective upon closing of the transaction, designed to ensure the continuation of marine and terminal services for TDCC's existing operations at the impacted sites. The transaction is expected to close in the fourth quarter of 2020, subject to customary regulatory approvals and other closing conditions, and the Company expects to record a gain on the transaction.

NOTE 56 – RESTRUCTURING AND ASSET RELATED CHARGES - NET

Charges for restructuring programs and other asset related charges, which includes other asset impairments, were ~~$96~~$617 million for the three months ended ~~March 31,~~September 30, 2020 ($~~156~~147 million for the three months ended ~~March 31,~~September 30, 2019) and $719 million for the nine months ended September 30, 2020 ($368 million for the nine months ended September 30, 2019). These charges were recorded in "Restructuring and asset related charges - net" in the consolidated statements of income.

Restructuring Plans

2020 Restructuring Program

On September 29, 2020, the Board of Directors ("Board") of Dow Inc. approved restructuring actions to achieve the Company's structural cost improvement initiatives in response to the continued economic impact from the coronavirus disease 2019 ("COVID-19") pandemic. The restructuring program is designed to reduce structural costs and enable the Company to further enhance competitiveness while the COVID-19 economic recovery gains traction. This program includes a global workforce cost reduction of approximately 6 percent and actions to rationalize the Company's manufacturing assets, which include asset write-down and write-off charges, related contract termination fees and environmental remediation costs ("2020 Restructuring Program"). These actions are expected to be substantially complete by the end of 2021.

As a result of these actions, in the third quarter of 2020 the Company recorded pretax restructuring charges of $575 million, consisting of severance and related benefit costs of $297 million, asset write-downs and write-offs of $197 million and costs associated with exit and disposal activities of $81 million. The impact of these charges is shown as "Restructuring and asset related charges - net" in the consolidated statements of income. The following table summarizes the activities related to the 2020 Restructuring Program:


2020 Restructuring Program	Severance and Related Benefit Costs		Asset Write-downs and Write-offs		Costs Associated with Exit and Disposal Activities		Total
In millions
Packaging & Specialty Plastics	$	0	$	11	$	0	$	11
Industrial Intermediates & Infrastructure	0		22		0		22
Performance Materials & Coatings	0		117		57		174
Corporate	297		47		24		368
Total restructuring charges	$	297	$	197	$	81	$	575
Charges against the reserve	0		(197)		0		(197)
Cash payments	(1)		0		0		(1)
Reserve balance at Sep 30, 2020	$	296	$	0	$	81	$	377

At September 30, 2020, $166 million of the reserve balance was included in "Accrued and other current liabilities" and $211 million was included in "Other noncurrent obligations" in the consolidated balance sheets.

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Severance and Related Benefit Costs

Severance benefits are provided to employees primarily under Dow's ongoing benefit arrangements and are accrued against the Corporate segment once management commits to a plan of termination. The 2020 Restructuring Program included a charge for severance and related benefit costs of $297 million for a global workforce cost reduction of approximately 6 percent, with separations occurring primarily through the end of 2021, and impacting Corporate. At September 30, 2020, $1 million in severance payments had been made.

Asset Write-downs and Write-offs

The restructuring charge related to the write-down and write-off of assets in the third quarter of 2020 totaled $197 million. Details regarding the asset write-downs and write-offs are as follows:

•Packaging & Specialty Plastics recorded a charge of $11 million to rationalize its production capacity by shutting down a small-scale production unit. The production unit will be shut down by the end of the third quarter of 2022.

•Industrial Intermediates & Infrastructure recorded a charge of $22 million to rationalize its asset footprint by shutting down certain amines and solvents facilities in the United States and Europe as well as select, small-scale downstream polyurethanes manufacturing facilities. The facilities will be shut down by the end of 2021.

•Performance Materials & Coatings recorded a charge of $117 million to shut down manufacturing assets, primarily related to small-scale coatings reactors, and will also rationalize its upstream asset footprint in Europe and the U.S. & Canada by adjusting the supply of siloxane and silicon metal to balance to regional needs. The impacted facilities will be shut down by the end of 2021.

•Corporate recorded a charge of $47 million related to the write-down of leased, non-manufacturing facilities and the write-down of miscellaneous assets.

Costs Associated with Exit and Disposal Activities

The 2020 Restructuring Program included a charge of $81 million for costs associated with exit and disposal activities, which included $25 million for contract termination fees related to the asset actions listed above, impacting Performance Materials & Coatings ($5 million) and Corporate ($20 million), as well as $56 million for environmental remediation, impacting Performance Materials & Coatings ($52 million) and Corporate ($4 million).

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DowDuPont Cost Synergy Program

In September and November 2017, DowDuPont approved post-merger restructuring actions under the DowDuPont Cost Synergy Program (the "Synergy Program") which was designed to integrate and optimize the organization following the Merger and in preparation for the business separations. InFor the ~~first quarter of~~nine months ended September 30, 2020, the Company recorded pretax restructuring charges of $90 million for severance and related benefit costs. ~~These are~~In the ~~final~~third quarter of 2020, the Company reduced the Synergy Program reserve for severance and related benefit costs by $4 million. The impact of this adjustment is shown in "Restructuring and asset related charges ~~related to restructuring actions under~~- net" in the ~~DowDuPont Cost Synergy Program.~~consolidated statements of income and reflected in Corporate. The Company expects cash expenditures related to the Synergy Program to be substantially complete by the end of 2020. The following table summarizes the activities related to the Synergy Program, which are reflected on a continuing operations ~~basis:~~basis:


DowDuPont Synergy Program	DowDuPont Synergy Program	Severance and Related Benefit Costs		Asset Write-downs and Write-offs		Costs Associated with Exit and Disposal Activities		Total		DowDuPont Synergy Program	Severance and Related Benefit Costs		Asset Write-downs and Write-offs		Costs Associated with Exit and Disposal Activities		Total
In millions	In millions	Severance and Related Benefit Costs		Asset Write-downs and Write-offs		Costs Associated with Exit and Disposal Activities		Total			Severance and Related Benefit Costs		Asset Write-downs and Write-offs		Costs Associated with Exit and Disposal Activities		Total		Severance and Related Benefit Costs	Asset Write-downs and Write-offs	Costs Associated with Exit and Disposal Activities	Total
																			Severance and Related Benefit Costs	Asset Write-downs and Write-offs	Costs Associated with Exit and Disposal Activities	Total
Reserve balance at Dec 31, 2018	Reserve balance at Dec 31, 2018	$	210	$	—	$	7	$	217	Reserve balance at Dec 31, 2018	$	210	$	0	$	7	$	217
Packaging & Specialty Plastics	Packaging & Specialty Plastics	$	—	$	—	$	1	$	1	Packaging & Specialty Plastics	$	0	$	0	$	1	$	1
Corporate	Corporate	52		76		15		143		Corporate	52		76		15		143
Total restructuring charges	Total restructuring charges	$	52	$	76	$	16	$	144	Total restructuring charges	$	52	$	76	$	16	$	144
Charges against the reserve	Charges against the reserve	—		(76)		—		(76)		Charges against the reserve	0		(76)		0		(76)
Cash payments	Cash payments	(79)		—		(4)		(83)		Cash payments	(79)		0		(4)		(83)
Reserve balance at Mar 31, 2019	Reserve balance at Mar 31, 2019	$	183	$	—	$	19	$	202	Reserve balance at Mar 31, 2019	$	183	$	0	$	19	$	202
Performance Materials & Coatings	Performance Materials & Coatings	$	—	$	22	$	—	$	22	Performance Materials & Coatings	$	0	$	22	$	0	$	22
Corporate	Corporate	25		7		5		37		Corporate	25		7		5		37
Total restructuring charges	Total restructuring charges	$	25	$	29	$	5	$	59	Total restructuring charges	$	25	$	29	$	5	$	59
Charges against the reserve	Charges against the reserve	—		(29)		—		(29)		Charges against the reserve	0		(29)		0		(29)
Cash payments	Cash payments	(71)		—		(2)		(73)		Cash payments	(71)		0		(2)		(73)
Reserve balance at Jun 30, 2019	Reserve balance at Jun 30, 2019	$	137	$	—	$	22	$	159	Reserve balance at Jun 30, 2019	$	137	$	0	$	22	$	159
Industrial Intermediates & Infrastructure	Industrial Intermediates & Infrastructure	$	—	$	—	$	5	$	5	Industrial Intermediates & Infrastructure	$	0	$	0	$	5	$	5
Performance Materials & Coatings	Performance Materials & Coatings	—		1		—		1		Performance Materials & Coatings	0		1		0		1
Corporate	Corporate	46		4		—		50		Corporate	46		4		0		50
Total restructuring charges	Total restructuring charges	$	46	$	5	$	5	$	56	Total restructuring charges	$	46	$	5	$	5	$	56
Charges against the reserve	Charges against the reserve	—		(5)		—		(5)		Charges against the reserve	0		(5)		0		(5)
Cash payments	Cash payments	(77)		—		(6)		(83)		Cash payments	(77)		0		(6)		(83)
Reserve balance at Sep 30, 2019	Reserve balance at Sep 30, 2019	$	106	$	—	$	21	$	127	Reserve balance at Sep 30, 2019	$	106	$	0	$	21	$	127
Industrial Intermediates & Infrastructure	Industrial Intermediates & Infrastructure	$	—	$	2	$	—	$	2	Industrial Intermediates & Infrastructure	$	0	$	2	$	0	$	2
Performance Materials & Coatings	Performance Materials & Coatings	—		5		—		5		Performance Materials & Coatings	0		5		0		5
Corporate	Corporate	—		26		—		26		Corporate	0		26		0		26
Total restructuring charges	Total restructuring charges	$	—	$	33	$	—	$	33	Total restructuring charges	$	0	$	33	$	0	$	33
Charges against the reserve	Charges against the reserve	—		(33)		—		(33)		Charges against the reserve	0		(33)		0		(33)
Cash payments	Cash payments	(52)		—		(4)		(56)		Cash payments	(52)		0		(4)		(56)
Reserve balance at Dec 31, 2019	Reserve balance at Dec 31, 2019	$	54	$	—	$	17	$	71	Reserve balance at Dec 31, 2019	$	54	$	0	$	17	$	71
Corporate	Corporate	$	90	$	—	$	—	$	90	Corporate	$	90	$	0	$	0	$	90
Total restructuring charges	Total restructuring charges	$	90	$	—	$	—	$	90	Total restructuring charges	$	90	$	0	$	0	$	90

Cash payments	Cash payments	(42)		—		(1)		(43)		Cash payments	(42)		0		(1)		(43)
Reserve balance at Mar 31, 2020	Reserve balance at Mar 31, 2020	$	102	$	—	$	16	$	118	Reserve balance at Mar 31, 2020	$	102	$	0	$	16	$	118
Cash payments										Cash payments	(21)		0		(1)		(22)
Reserve balance at Jun 30, 2020										Reserve balance at Jun 30, 2020	$	81	$	0	$	15	$	96
Adjustment to the reserve										Adjustment to the reserve	(4)		0		0		(4)
Cash payments										Cash payments	(44)		0		0		(44)
Reserve balance at Sep 30, 2020										Reserve balance at Sep 30, 2020	$	33	$	0	$	15	$	48

~~Table of Contents~~

At ~~March 31,~~September 30, 2020, ~~$104~~$35 million of the reserve balance was included in "Accrued and other current liabilities" ($52 million at December 31, 2019) and ~~$14~~$13 million was included in "Other noncurrent obligations" ($19 million at December 31, 2019) in the consolidated balance sheets.

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The Company recorded pretax restructuring charges of ~~$965~~$961 million inception-to-date under the Synergy Program on a continuing operations basis, consisting of severance and related benefit costs of ~~$657~~$653 million, asset write-downs and write-offs of $263 million and costs associated with exit and disposal activities of $45 million.

~~Asset Write-downs and Write-offs~~

The restructuring charges related to the write-down and write-off of assets related primarily to miscellaneous asset write-downs and write-offs, including the shutdown of several small manufacturing facilities and the write-off of non-manufacturing assets and certain corporate facilities.

~~Costs Associated with Exit and Disposal Activities~~

~~The restructuring charges for costs associated with exit and disposal activities included contract cancellation penalties and environmental remediation liabilities.~~

The Company expects to incur additional costs in the future related to its restructuring activities. Future costs are expected to include demolition costs related to closed facilities and restructuring plan implementation costs; these costs will be recognized as incurred. The Company also expects to incur additional employee-related costs, including involuntary termination benefits, related to its other optimization activities. These costs cannot be reasonably estimated at this time.

Asset Related Charges

The Company recognized ~~an additional~~ pretax impairment ~~charge~~charges of $6$46 million and $58 million for the three and nine months ended September 30, 2020, respectively. Pretax impairment charges for the three months ended ~~March 31,~~September 30, 2020 included a $15 million charge for the write-down of a non-manufacturing asset and the write-off of a capital project (related to Performance Materials & Coatings), a $24 million charge associated with the write-down of certain corporate leased equipment (related to Corporate) and additional pretax impairment charges of $7 million related to capital additions made to a ~~biopolymers~~bio-ethanol manufacturing facility in Santa Vitoria, Minas Gerais, Brazil, which was impaired in 2017 ~~(charge of $12~~($19 million for the ~~three~~nine months ended ~~March 31, 2019)~~September 30, 2020, related to Packaging & Specialty Plastics). On September 29, 2020, the Company divested the bio-ethanol manufacturing facility. Pretax impairment charges for the three and nine months ended September 30, 2019 primarily related to the bio-ethanol manufacturing facility were $16 million and $34 million, respectively (related to Packaging & Specialty Plastics and Performance Materials & Coatings). The impairment ~~charge was~~charges were included in “Restructuring and asset related charges - net” in the consolidated statements of income.

In addition, in the third quarter of 2019 the Company recognized a pretax impairment charge of $75 million related to the then-planned divestiture of its acetone derivatives business, which closed on November 1, 2019. The charge was included in "Restructuring and asset related charges - net" in the consolidated statements of income and related to Packaging & Specialty ~~Plastics.~~Plastics ($24 million) and Corporate ($51 million). See Note 1920 for additional ~~information.~~information on asset related charges.

NOTE 67 – SUPPLEMENTARY INFORMATION

The Company uses "Sundry income (expense) – net" to record a variety of income and expense items such as foreign currency exchange gains and losses, dividends from investments, gains and losses on sales of investments and assets, non-operating pension and other postretirement benefit plan credits or costs, and certain litigation matters.

~~For the~~


Dow Inc. Sundry Income (Expense) – Net	Three Months Ended						Nine Months Ended
In millions	Sep 30, 2020		Sep 30, 2019		Sep 30, 2020		Sep 30, 2019
Non-operating pension and other postretirement benefit plan net credits ¹	$	26	$	44	$	81	$	161
Foreign exchange gains (losses)	(24)		17		(42)		65
Gain on divestiture of rail infrastructure ²	233		0		233		0
Loss on early extinguishment of debt ³	(63)		0		(149)		(44)
Loss on divestitures ⁴	(13)		0		(13)		(44)
Gains on sales of other assets and investments	2		26		7		33
Indemnification and other transaction related costs ⁵	0		0		0		(52)
Gain related to Nova ethylene asset matter ⁶	0		170		6		170
Dow Silicones breast implant liability adjustment ⁶	0		85		5		85
Loss on Dow Silicones commercial creditor matters ⁶	0		(50)		0		(50)
Other - net	21		9		26		45
Total sundry income (expense) – net	$	182	$	301	$	154	$	369

1.See Note 17 for additional information.

2.See Note 5 for additional information.

3.See Note 12 for additional information.

4.The three and nine months ended ~~March~~September 30, 2020 includes a loss on the divestiture of a bio-ethanol manufacturing facility in Brazil, related to Packaging and Specialty Plastics. The nine months ended September 30, 2019 includes post-closing adjustments on previous divestitures, related to Corporate.

5.See Note 3 for additional information.

6.See Note 13 for additional information.

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TDCC Sundry Income (Expense) – Net	Three Months Ended						Nine Months Ended
In millions	Sep 30, 2020		Sep 30, 2019		Sep 30, 2020		Sep 30, 2019
Non-operating pension and other postretirement benefit plan net credits ¹	$	26	$	44	$	81	$	161
Foreign exchange gains (losses)	(22)		3		(45)		51
Gain on divestiture of rail infrastructure ²	233		0		233		0
Loss on early extinguishment of debt ³	(63)		0		(149)		(44)
Gain (loss) on divestitures ⁴	(13)		(5)		(13)		9
Gains on sales of other assets and investments	2		26		7		33
Gain related to Nova ethylene asset matter ⁵	0		170		6		170
Dow Silicones breast implant liability adjustment ⁵	0		85		5		85
Loss on Dow Silicones commercial creditor matters ⁵	0		(50)		0		(50)
Other - net	18		11		25		47
Total sundry income (expense) – net	$	181	$	284	$	150	$	462

1.See Note 17 for additional information.

2.See Note 5 for additional information.

3.See Note 12 for additional information.

4.The three and nine months ended September 30, 2020 includes a loss on the divestiture of a bio-ethanol manufacturing facility in Brazil, related to Packaging and Specialty Plastics. The three and nine months ended September 30, 2019 includes post-closing adjustments on previous divestitures, related to Corporate.

5.See Note 13 for additional information.

Accrued and Other Current Liabilities

“Accrued and other current liabilities” were $3,408 million and $2,784 million at September 30, 2020 and $2,762 million and $2,233 million at December 31, ~~2020, "Sundry income (expense) - net" was expense of $81 million~~2019, for Dow Inc. and ~~expense~~TDCC, respectively. Accrued payroll, which is a component of ~~$82~~"Accrued and other current liabilities" and includes liabilities related to payroll, incentive compensation and severance, was $677 million ~~for TDCC compared with income of $69~~at September 30, 2020 and $284 million ~~for the three months ended March~~at December 31, 2019. ~~"Sundry income (expense) - net" decreased primarily due to an $86 million loss on the early extinguishment~~No other components of ~~debt (related to Corporate)~~"Accrued and foreign currency exchange losses for the three months ended March 31, 2020 compared with foreign currency exchange gains for the three months ended March 31, 2019, as well as a decrease in non-operating pension and postretirement benefit plan credits. See Notes 11, 16 and 22 for additional information.other current liabilities" were more than 5 percent of total current liabilities.

Other Investments

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, as provided below:


Investments in Company-owned Life Insurance		Mar 31, 2020		Dec 31, 2019
Investments in Company-Owned Life Insurance						Investments in Company-Owned Life Insurance	Sep 30, 2020		Dec 31, 2019
In millions	In millions	Mar 31, 2020		Dec 31, 2019							Sep 30, 2020	Dec 31, 2019
Gross cash value	Gross cash value					Gross cash value	$	817	$	820
Less: Existing drawdowns ¹	Less: Existing drawdowns ¹	$	287	$	85	Less: Existing drawdowns ¹	296		85
Investment in Company-owned life insurance²		$	541	$	735
Investments in company-owned life insurance²						Investments in company-owned life insurance²	$	521	$	735

1.Classified as "Proceeds from sales and maturities of investments" in the consolidated statements of cash flows.

2.Classified as "Other investments" in the consolidated balance sheets.

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NOTE 78 - EARNINGS PER SHARE CALCULATIONS

The following tables provide earnings per share calculations for Dow Inc. for the three and nine months ended ~~March 31,~~September 30, 2020 and 2019. Earnings per share of TDCC is not presented as this information is not required in financial statements of wholly owned subsidiaries.


Net Income for Earnings Per Share Calculations		Three Months Ended
Net Income (Loss) for Earnings Per Share Calculations						Net Income (Loss) for Earnings Per Share Calculations	Three Months Ended						Nine Months Ended
In millions	In millions	Mar 31, 2020		Mar 31, 2019		In millions	Sep 30, 2020		Sep 30, 2019		Sep 30, 2020		Sep 30, 2019
															Sep 30, 2019	Sep 30, 2020	Sep 30, 2019
Income from continuing operations, net of tax		$	258	$	156
Income (loss) from continuing operations, net of tax						Income (loss) from continuing operations, net of tax	$	(1)	$	347	$	40	$	593
Net income attributable to noncontrolling interests - continuing operations	Net income attributable to noncontrolling interests - continuing operations	19		32		Net income attributable to noncontrolling interests - continuing operations	24		14		51		61
Net income attributable to participating securities - continuing operations ¹	Net income attributable to participating securities - continuing operations ¹	2		—		Net income attributable to participating securities - continuing operations ¹	3		2		7		4
Income from continuing operations attributable to common stockholders		$	237	$	124
Income (loss) from continuing operations attributable to common stockholders						Income (loss) from continuing operations attributable to common stockholders	$	(28)	$	331	$	(18)	$	528
Income from discontinued operations, net of tax	Income from discontinued operations, net of tax	$	—	$	445	Income from discontinued operations, net of tax	$	0	$	0	$	0	$	445
Net income attributable to noncontrolling interests - discontinued operations	Net income attributable to noncontrolling interests - discontinued operations	—		13		Net income attributable to noncontrolling interests - discontinued operations	0		0		0		13

Income from discontinued operations attributable to common stockholders	Income from discontinued operations attributable to common stockholders	$	—	$	432	Income from discontinued operations attributable to common stockholders	$	0	$	0	$	0	$	432
Net income attributable to common stockholders		$	237	$	556
Net income (loss) attributable to common stockholders						Net income (loss) attributable to common stockholders	$	(28)	$	331	$	(18)	$	960

Earnings Per Share Calculations - Basic Three Months Ended
Dollars per share Mar 31, 2020 Mar 31, 2019
Income from continuing operations attributable to common stockholders $ 0.32 $ 0.16
Income from discontinued operations attributable to common stockholders — 0.58
Net income attributable to common stockholders $ 0.32 $ 0.74


Earnings (Loss) Per Share Calculations - Basic	Three Months Ended						Nine Months Ended
Dollars per share	Sep 30, 2020		Sep 30, 2019		Sep 30, 2020		Sep 30, 2019

Income (loss) from continuing operations attributable to common stockholders	$	(0.04)	$	0.45	$	(0.02)	$	0.71
Income from discontinued operations attributable to common stockholders	0		0		0		0.58
Net income (loss) attributable to common stockholders	$	(0.04)	$	0.45	$	(0.02)	$	1.29

Earnings Per Share Calculations - Diluted Three Months Ended
Dollars per share Mar 31, 2020 Mar 31, 2019
Income from continuing operations attributable to common stockholders $ 0.32 $ 0.16
Income from discontinued operations attributable to common stockholders — 0.58
Net income attributable to common stockholders $ 0.32 $ 0.74


Earnings (Loss) Per Share Calculations - Diluted	Three Months Ended						Nine Months Ended
Dollars per share	Sep 30, 2020		Sep 30, 2019		Sep 30, 2020		Sep 30, 2019

Income (loss) from continuing operations attributable to common stockholders	$	(0.04)	$	0.45	$	(0.02)	$	0.71
Income from discontinued operations attributable to common stockholders	0		0		0		0.58
Net income (loss) attributable to common stockholders	$	(0.04)	$	0.45	$	(0.02)	$	1.29


Share Count Information	Share Count Information	Three Months Ended				Share Count Information	Three Months Ended			Nine Months Ended
Shares in millions	Shares in millions	Mar 31, 2020	Mar 31, 2019	Shares in millions	Sep 30, 2020		Sep 30, 2019	Sep 30, 2020	Sep 30, 2019
										Sep 30, 2019	Sep 30, 2020	Sep 30, 2019
Weighted-average common shares - basic ²		740.2	747.2
Plus dilutive effect of equity compensation plans		1.8	—
Weighted-average common shares - diluted ²		742.0	747.2
Weighted-average common shares outstanding - basic				Weighted-average common shares outstanding - basic	740.5		739.8	740.0	743.3
Plus dilutive effect of equity compensation plans ²				Plus dilutive effect of equity compensation plans ²	0		3.2	0	2.8
Weighted-average common shares outstanding - diluted ²				Weighted-average common shares outstanding - diluted ²	740.5		743.0	740.0	746.1
Stock options and restricted stock units excluded from EPS calculations ³	Stock options and restricted stock units excluded from EPS calculations ³	15.5	—	Stock options and restricted stock units excluded from EPS calculations ³	26.9		12.9	27.1	6.4

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

2. ~~Share amounts for the~~The three and nine months ended ~~March 31, 2019, were based~~September 30, 2020 reflect a loss from continuing operations, and as such, the basic share count was used for purposes of calculating earnings per share on 2,246.3 million DowDuPont common shares outstanding as of the Record Date for the April 1, 2019 distribution, less 4.6 million Employee Stock Ownership Plan ("ESOP") shares that had not been released and were not considered outstanding, adjusted for the Distribution Ratio. There was no dilutive effect for the three months ended March 31, 2019, as the Company did not engage in activities giving rise to dilution.a diluted basis.

3.These outstanding options to purchase shares of common stock and restricted stock units were excluded from the calculation of diluted earnings per share because the effect of including them would have been antidilutive. ~~For the three months ended March 31, 2019, the Company did not engage in activities giving rise to dilution.~~

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NOTE 89 – INVENTORIES

The following table provides a breakdown of inventories:


Inventories	Inventories	Mar 31, 2020		Dec 31, 2019		Inventories	Sep 30, 2020		Dec 31, 2019
In millions	In millions										Sep 30, 2020	Dec 31, 2019
Finished goods	Finished goods	$	3,607	$	3,505	Finished goods	$	3,052	$	3,505
Work in process	Work in process	1,080		1,122		Work in process	935		1,122
Raw materials	Raw materials	590		628		Raw materials	587		628
Supplies	Supplies	860		845		Supplies	908		845
Total	Total	$	6,137	$	6,100	Total	$	5,482	$	6,100
Adjustment of inventories to a LIFO basis	Adjustment of inventories to a LIFO basis	187		114		Adjustment of inventories to a LIFO basis	127		114
Total inventories	Total inventories	$	6,324	$	6,214	Total inventories	$	5,609	$	6,214

NOTE 910 – NONCONSOLIDATED AFFILIATES

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


Investments in Nonconsolidated Affiliates	Investments in Nonconsolidated Affiliates	Mar 31, 2020		Dec 31, 2019		Investments in Nonconsolidated Affiliates	Sep 30, 2020		Dec 31, 2019
In millions	In millions										Sep 30, 2020	Dec 31, 2019
Investment in nonconsolidated affiliates	Investment in nonconsolidated affiliates	$	1,235	$	1,404	Investment in nonconsolidated affiliates	$	1,281	$	1,404
Other noncurrent obligations	Other noncurrent obligations	(317)		(80)		Other noncurrent obligations	(305)		(80)
Net investment in nonconsolidated affiliates	Net investment in nonconsolidated affiliates	$	918	$	1,324	Net investment in nonconsolidated affiliates	$	976	$	1,324

In March 2020, The Kuwait Styrene Company K.S.C.C. paid a dividend of $42 million, reflected in "Earnings of nonconsolidated affiliates less than dividends received" in the consolidated statements of cash flows. ~~At March 31,~~In June and September 2020, ~~the Company had $276 million included in "Accounts and notes receivable - Other" in the consolidated balance sheets related to the Company's share of dividends declared by~~ EQUATE Petrochemical Company K.S.C.C. ~~("EQUATE"~~(“EQUATE”) and The Kuwait Olefins Company K.S.C.C. ("TKOC") paid dividends of $157 million and $115 million, respectively. At ~~March 31,~~September 30, 2020, the Company had a negative investment balance in EQUATE of ~~$225~~$202 million (negative $80 million at ~~December~~December 31, 2019), classified as "Other noncurrent obligations" in the consolidated balance sheets.

At ~~March 31,~~September 30, 2020, the Company had a negative investment balance in Sadara Chemical Company (“Sadara”) of ~~$92~~$103 million (0 at December 31, 2019) classified as “Other noncurrent obligations” in the Company’s consolidated balance sheets, primarily related to the Company’s share of Sadara’s accumulated other comprehensive loss from the first ~~quarter~~nine months of 2020. The Company’s investment in Sadara was other-than-temporarily impaired in the fourth quarter of 2019 and Dow will continue to recognize its share of equity losses reported by Sadara due to funding commitments. For additional information, see Note 13 to the Consolidated Financial Statements included in the combined Dow Inc. and TDCC Annual Report on Form 10-K for the year ended December 31, 2019.

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NOTE 1011 – GOODWILL AND OTHER INTANGIBLE ASSETS

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


Goodwill	Goodwill	Packaging & Specialty Plastics		Industrial Intermediates & Infrastructure		Performance Materials & Coatings		Total		Goodwill	Packaging & Specialty Plastics		Industrial Intermediates & Infrastructure		Performance Materials & Coatings		Total
In millions	In millions																		Packaging & Specialty Plastics	Industrial Intermediates & Infrastructure	Performance Materials & Coatings	Total
Net goodwill at Dec 31, 2019	Net goodwill at Dec 31, 2019	$	5,109	$	1,100	$	2,587	$	8,796	Net goodwill at Dec 31, 2019	$	5,109	$	1,100	$	2,587	$	8,796
Sale of rail infrastructure										Sale of rail infrastructure	(2)		0		0		(2)
Foreign currency impact	Foreign currency impact	(1)		(1)		(14)		(16)		Foreign currency impact	5		2		53		60
Net goodwill at Mar 31, 2020		$	5,108	$	1,099	$	2,573	$	8,780
Net goodwill at Sep 30, 2020										Net goodwill at Sep 30, 2020	$	5,112	$	1,102	$	2,640	$	8,854

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


Other Intangible Assets	Other Intangible Assets	Mar 31, 2020										Dec 31, 2019										Other Intangible Assets	Sep 30, 2020				Dec 31, 2019
In millions	In millions	Gross Carrying Amount		Accum Amort		Net		Gross Carrying Amount		Accum Amort		Net		In millions	Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net
Intangible assets with finite lives:	Intangible assets with finite lives:													Intangible assets with finite lives:
Developed technology	Developed technology	$	2,636	$	(1,518)	$	1,118	$	2,634	$	(1,467)	$	1,167	Developed technology	$	2,637	$	(1,624)	$	1,013	$	2,634	$	(1,467)	$	1,167
Software	Software	1,458		(915)		543		1,449		(893)		556		Software	1,482		(966)		516		1,449		(893)		556
Trademarks/tradenames	Trademarks/tradenames	352		(342)		10		352		(342)		10		Trademarks/tradenames	352		(343)		9		352		(342)		10
Customer-related	Customer-related	3,184		(1,219)		1,965		3,207		(1,184)		2,023		Customer-related	3,247		(1,343)		1,904		3,207		(1,184)		2,023

Total other intangible assets, finite lives	Total other intangible assets, finite lives	$	7,630	$	(3,994)	$	3,636	$	7,642	$	(3,886)	$	3,756	Total other intangible assets, finite lives	$	7,718	$	(4,276)	$	3,442	$	7,642	$	(3,886)	$	3,756
In-process research and development	In-process research and development	—		—		—		3		—		3		In-process research and development	0		0		0		3		0		3
Total other intangible assets	Total other intangible assets	$	7,630	$	(3,994)	$	3,636	$	7,645	$	(3,886)	$	3,759	Total other intangible assets	$	7,718	$	(4,276)	$	3,442	$	7,645	$	(3,886)	$	3,759

The following table provides information regarding amortization expense from continuing operations related to intangible assets:


Amortization Expense from Continuing Operations	Amortization Expense from Continuing Operations	Three Months Ended						Amortization Expense from Continuing Operations	Three Months Ended						Nine Months Ended
In millions	In millions	Mar 31, 2020		Mar 31, 2019		In millions	Sep 30, 2020		Sep 30, 2019		Sep 30, 2020		Sep 30, 2019
Other intangible assets, excluding software	Other intangible assets, excluding software	$	100	$	116	Other intangible assets, excluding software	$	100	$	100	$	300	$	320
Software, included in “Cost of sales”	Software, included in “Cost of sales”	$	24	$	24	Software, included in “Cost of sales”	$	24	$	23	$	72	$	70

Total estimated amortization expense from continuing operations for 2020 and the five succeeding fiscal years, including amounts expected to be capitalized, is as follows:


Estimated Amortization Expense from Continuing Operations	Estimated Amortization Expense from Continuing Operations					Estimated Amortization Expense from Continuing Operations
In millions	In millions					In millions
2020	2020	$	491	2020	$	495
2021	2021	$	467	2021	$	471
2022	2022	$	404	2022	$	408
2023	2023	$	372	2023	$	376
2024	2024	$	354	2024	$	358
2025	2025	$	266	2025	$	268

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NOTE 1112 – NOTES PAYABLE, LONG-TERM DEBT AND AVAILABLE CREDIT FACILITIES


Notes Payable	Notes Payable	Mar 31, 2020			Dec 31, 2019			Notes Payable	Sep 30, 2020		Dec 31, 2019
In millions	In millions												Sep 30, 2020	Dec 31, 2019
Commercial paper	Commercial paper	$	250		$	151		Commercial paper	$	0	$	151
Notes payable to banks and other lenders ¹		1,240			435
Notes payable to banks and other lenders								Notes payable to banks and other lenders	329		435

Total notes payable	Total notes payable	$	1,490		$	586		Total notes payable	$	329	$	586
Period-end average interest rates	Period-end average interest rates	3.78		%	6.30		%	Period-end average interest rates	3.07%		6.30%

1.~~Includes $800 million drawn from uncommitted facilities in the first quarter of 2020.~~


Long-Term Debt	Long-Term Debt	2020 Average Rate		Mar 31, 2020		2019 Average Rate		Dec 31, 2019		Long-Term Debt	2020 Average Rate	Sep 30, 2020		2019 Average Rate	Dec 31, 2019
In millions	In millions																2020 Average Rate	Sep 30, 2020	2019 Average Rate	Dec 31, 2019
Promissory notes and debentures:	Promissory notes and debentures:									Promissory notes and debentures:
Final maturity 2020	Final maturity 2020	8.44	%	$	76	8.44	%	$	76	Final maturity 2020	0%	$	0	8.44%	$	76
Final maturity 2021	Final maturity 2021	8.95	%	173		8.95	%	174		Final maturity 2021	8.95%	173		8.95%	174
Final maturity 2022	Final maturity 2022	8.64	%	121		3.50	%	1,372		Final maturity 2022	8.64%	121		3.50%	1,372
Final maturity 2023	Final maturity 2023	7.64	%	325		7.64	%	325		Final maturity 2023	7.63%	250		7.64%	325
Final maturity 2024		3.37	%	1,397		3.37	%	1,397
Final maturity 2024 ¹										Final maturity 2024 ¹	3.43%	1,017		3.37%	1,397
Final maturity 2025	Final maturity 2025	5.26	%	662		5.26	%	662		Final maturity 2025	5.13%	625		5.26%	662
Final maturity 2026 and thereafter		5.73	%	8,888		5.73	%	8,820
Final maturity 2026 and thereafter ¹										Final maturity 2026 and thereafter ¹	5.22%	10,887		5.73%	8,820
Other facilities:	Other facilities:									Other facilities:
U.S. dollar loans	U.S. dollar loans	1.74	%	1,250		2.55	%	2,000		U.S. dollar loans	0%	0		2.55%	2,000
Foreign currency notes and loans, various rates and maturities	Foreign currency notes and loans, various rates and maturities	1.41	%	3,040		3.26	%	592		Foreign currency notes and loans, various rates and maturities	2.09%	3,231		3.26%	592
InterNotes®, varying maturities through 2050	InterNotes®, varying maturities through 2050	3.44	%	702		3.44	%	928		InterNotes®, varying maturities through 2050	3.52%	620		3.44%	928

Finance lease obligations ¹				418				395
Finance lease obligations ²										Finance lease obligations ²		496			395
Unamortized debt discount and issuance costs	Unamortized debt discount and issuance costs			(355)				(331)		Unamortized debt discount and issuance costs		(375)			(331)
Long-term debt due within one year ²				(384)				(435)
Long-term debt due within one year ³										Long-term debt due within one year ³		(347)			(435)
Long-term debt	Long-term debt			$	16,313			$	15,975	Long-term debt		$	16,698		$	15,975

1.Cost includes net fair value hedge adjustment gains of $67 million at September 30, 2020 ($1 million at December 31, 2019). See Note 1319 for additional information.

2.See Note 14 for additional information.

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

Maturities of Long-Term Debt for Next Five Years at Mar 31, 2020
In millions
2020 $ 359
2021 $ 491
2022 $ 225
2023¹
$ 1,693
2024 $ 1,504
2025 $ 780

1.~~Assumes the option to extend will be exercised for the $1.25 billion Dow Silicones Term Loan Facility.~~


Maturities of Long-Term Debt for Next Five Years at Sep 30, 2020
In millions
2020	$	101
2021	$	500
2022	$	270
2023	$	415
2024	$	1,075
2025	$	788

2020 Activity

In February 2020, the Company issued €2.25 billion aggregate principal amount of notes (“Euro Notes”). The Euro Notes included €1.0 billion aggregate principal amount of 0.50 percent notes due 2027, €750 million aggregate principal amount of 1.125 percent notes due 2032 and €500 million aggregate principal amount of 1.875 percent notes due 2040. The Euro Notes have a weighted average coupon rate of approximately 1.0 percent. With the net proceeds from the issuance of the Euro Notes, Dow Silicones voluntarily repaid $750 million of principal under a certain third party credit agreement, (“("Term Loan Facility”). In addition, the Company redeemed $1.25 billion of 3.0 percent notes issued by the Company with maturity in 2022. As a result, the Company recognized a pretax loss of $85 million on the early extinguishment of debt, included in “Sundry income (expense) – net” in the consolidated statements of income and related to ~~the Corporate segment.~~Corporate.

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~~At March 31,~~In the first quarter of 2020, the ~~Company's outstanding withdrawal amount~~Company withdrew $800 million under various uncommitted bilateral credit arrangements, which were subsequently repaid in the second quarter of 2020.

In July 2020, the Company's accounts receivable securitization facility in Europe was ~~$800~~amended and the terms of the agreement changed from a secured borrowing arrangement to an accounts receivable facility. Under the terms of the new agreement, the Company may sell certain eligible trade accounts receivable, up to €400 million, at any point in time. The Company continues to service the receivables from the customer, but retains no interest in the receivables, and remits payment to the financial institutions. The Company also provides a guarantee to the financial institutions for the creditworthiness and collection of the receivables in satisfaction of the facility. There were no receivables sold in the third quarter of 2020. See Note 13 for additional information related to guarantees.

In August 2020, the Company issued $2.0 billion aggregate principal amount of notes. The notes included $850 million aggregate principal amount of 2.1 percent notes due 2030 and $1.15 billion aggregate principal amount of 3.6 percent notes due 2050 (together, the "Notes"). With the net proceeds from the issuance of the Notes, Dow Silicones voluntarily repaid the remaining $1.25 billion outstanding principal balance under the Term Loan Facility. In September 2020, the Company also used $556 million of aggregate proceeds from the Notes to fund cash tender offers for certain of its debt securities and certain debt securities of Union Carbide. In total, $493 million aggregate principal amount was tendered and retired. These actions resulted in a pretax loss of $62 million on the early extinguishment of debt included in ~~"Notes payable"~~"Sundry income (expense) – net" in the consolidated ~~balance sheets.~~statements of income and related to Corporate.

In the first ~~three~~nine months of 2020, the Company also issued an aggregate principal amount of ~~$37~~$167 million of InterNotes®, and redeemed an aggregate principal amount of ~~$62~~$166 million at maturity. In addition, the Company voluntarily repaid an aggregate principal amount of ~~$200~~$307 million of InterNotes® with various maturities. As a result, the Company recognized a pretax loss ~~of $1 million~~ on the early extinguishment of debt for the three months ended September 30, 2020 of $1 million ($2 million for the nine months ended September 30, 2020), included in “Sundry income (expense) – net” in the consolidated statements of income and related to Corporate.

Additionally, in the ~~Corporate segment.~~first nine months of 2020, the Company repaid $76 million of long-term debt at maturity and approximately $17 million of long-term debt was repaid by consolidated variable interest entities.

2019 Activity

In the first ~~three~~nine months of 2019, the Company issued $2.0 billion of senior unsecured notes in an offering under Rule 144A of the Securities Act of 1933. The offering included $750 million aggregate principal amount of 4.80 percent notes due 2049; $750 million aggregate principal amount of 3.625 percent notes due 2026; and $500 million aggregate principal amount of 3.15 percent notes due 2024. In the fourth quarter of 2019, TDCC launched exchange offers for the outstanding, unregistered senior notes for identical, registered notes under the Securities Act of 1933 (the "Exchange Offers"). The Exchange Offers fulfilled the Company's obligations contained in the registration rights agreements entered into in connection with the issuance of the aforementioned notes. In addition, the Company redeemed $1.5 billion of 4.25 percent notes issued by the Company with maturity in 2020. As a result, the Company recognized a pretax loss of $42 million on the early extinguishment of debt, included in "Sundry income (expense) - net" in the consolidated statements of income and related to Corporate. The Company also issued an aggregate principal amount of $136 million of InterNotes®, and redeemed an aggregate principal amount of ~~$72~~$117 million at maturity. Approximately $136 million of ~~InterNotes® at maturity.~~long-term debt (net of $16 million of issuances) was repaid by consolidated variable interest entities.

In the second quarter of 2019, Dow Silicones voluntarily repaid $2.5 billion of principal under the Term Loan Facility. As a result, Dow Silicones recognized a pretax loss of $2 million on the early extinguishment of debt, included in "Sundry income (expense) - net" in the consolidated statements of income and related to Corporate.

Table of Contents

Available Credit Facilities

The following table summarizes the Company's credit facilities:

Committed and Available Credit Facilities at Mar 31, 2020

Committed and Available Credit Facilities at Sep 30, 2020

In millions

Committed Credit

Credit Available

Maturity Date

Interest

In millions

Committed Credit

Credit Available

Maturity Date

Interest

Five Year Competitive Advance and Revolving Credit Facility

5,000

October 2024

Floating rate

Five Year Competitive Advance and Revolving Credit Facility

5,000

October 2024

Floating rate

Term Loan Facility ¹

1,250

—

September 2023

Floating rate

European Securitization Facility ²

440

October 2020

Floating rate

Bilateral Revolving Credit Facility ¹

300

December 2021

Floating rate