DOW CHEMICAL CO /DE/

NOTE 21 –FAIR VALUE MEASUREMENTS

A summary of the Company's recurring and nonrecurring fair value measurements can be found in Note 22 to the Consolidated Financial Statements included in the 2024 10-K.

Fair Value Measurements on a Recurring Basis

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

1. The Company's held-to-maturity securities primarily relate to treasury bills and time deposits. At June 30, 2025, $216 million is included in "Cash and cash equivalents" ($96 million at December 31, 2024) and $18 million is included in "Other current assets" (zero at December 31, 2024) in the consolidated balance sheets.

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

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

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

5. Equity securities with a readily determinable fair value.

6. See Note 20 for classification of derivatives in the consolidated balance sheets.

7. Cost includes fair value hedge adjustment gains of $43 million at June 30, 2025 and $9 million at December 31, 2024 on $5,538 million of debt at June 30, 2025 and $5,129 million at December 31, 2024.

8. Estimated liability for TDCC's guarantee of Sadara's debt which is included in "Other noncurrent obligations" in the consolidated balance sheets.

Cost approximates fair value for all other financial instruments.

For equity securities calculated at net asset value per share (or its equivalent), the Company had $83 million in private market securities and $14 million in real estate at June 30, 2025 ($90 million in private market securities and $15 million in real estate at December 31, 2024). There are no redemption restrictions and the unfunded commitments on these investments were $79 million at June 30, 2025 and $81 million at December 31, 2024.

For assets classified as Level 3 measurements, fair value is based on significant unobservable inputs including assumptions where there is little, if any, market activity. The level 3 asset values represent the fair value of an investment in a corporate bond, accounted for as a debt security.

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

Fair Value Measurements on a Nonrecurring Basis

In the second quarter of 2025, the Company recorded a charge for asset write-downs and write-offs, including the write-down of certain manufacturing facilities, corporate assets, leased, non-manufacturing facilities and other miscellaneous assets. The manufacturing facilities, corporate assets and certain leased, non-manufacturing facilities and other miscellaneous assets associated with this plan were written down to zero. In addition, impairments of certain leased, non-manufacturing facilities and other miscellaneous assets, which were classified as Level 3 measurements, resulted in a write-down of right-of-use assets to a fair value of $110 million using unobservable inputs. The Company recorded impairment charges of $334 million for asset write-downs and write-offs, included in "Restructuring and asset related charges - net" in the consolidated statements of income and related to Packaging & Specialty Plastics ($81 million), Industrial Intermediates & Infrastructure ($63 million), Performance Materials & Coatings ($147 million) and Corporate ($43 million).

In the first quarter of 2025, the Company recorded impairment charges of $5 million for asset write-downs and write-offs, included in "Restructuring and asset related charges - net" in the consolidated statements of income and related to Industrial Intermediates & Infrastructure.