DOW CHEMICAL CO /DE/

For the period ended Dec 31, 2025. Filed Feb 3, 2026.

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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.

FY2025 · Filed Feb 3, 2026

DOW$31.48+1.7%Stored close · as of Nov 10, 2026

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Contents

Income Taxes

NOTE 7 –INCOME TAXES

The financial statements for Dow Inc. and TDCC are substantially similar, including the reporting of current and deferred tax expense (benefit), provision (credit) for income taxes, and deferred tax asset and liability balances. As a result, the following income tax discussion pertains to Dow Inc. only.

The Company's effective tax rate fluctuates based on, among other factors, where income is earned, the level of income relative to tax attributes and the level of equity earnings, since most earnings from the Company's equity method investments are taxed at the joint venture level.

Geographic Allocation of Income and Provision (Credit) for Income Taxes
In millions	2025	2024	2023
Income (loss) before income taxes
Domestic	$(1,814)	$492	$(602)
Foreign	(697)	1,108	1,258
Income (loss) before income taxes	$(2,511)	$1,600	$656
Current tax expense (benefit)
Federal	$(132)	$(137)	$249
State and local	5	12	18
Foreign	401	389	951
Total current tax expense	$274	$264	$1,218
Deferred tax expense (benefit)
Federal	$(484)	$218	$(445)
State and local	(7)	51	3
Foreign	150	(134)	(780)
Total deferred tax expense (benefit)	$(341)	$135	$(1,222)
Provision (credit) for income taxes	$(67)	$399	$(4)
Net income (loss)	$(2,444)	$1,201	$660

Reconciliation to U.S. Statutory Rate 1	2025
Amounts in millions	Amount	Percent
U.S. federal statutory tax rate	$(527)	21.0%
State and local income taxes, net of federal income tax effect	9	(0.3)
Foreign tax effects
Argentina
Foreign currency related items	47	(1.9)
Other	(5)	0.2
Brazil
Changes in valuation allowances	107	(4.3)
Statutory tax rate difference	(47)	1.9
Other	25	(1.0)
China	27	(1.1)
Germany	31	(1.2)
The Netherlands
Foreign currency related items	(34)	1.4
Other	2	(0.1)
Singapore
Changes in valuation allowances	117	(4.7)
Other	8	(0.3)
Switzerland
Changes in valuation allowances	95	(3.8)
Statutory tax rate difference	44	(1.8)
Nondeductible interest expense	36	(1.4)
Other	36	(1.4)
Other foreign jurisdictions	122	(4.9)
Equity losses	53	(2.1)
Effect of cross-border tax laws	60	(2.4)
Tax credits
General business credits	(26)	1.0
Foreign tax credits 2	(294)	11.7
Changes in valuation allowances	37	(1.5)
Nontaxable or nondeductible items
Goodwill impairment	81	(3.2)
Other	2	(0.1)
Changes in unrecognized tax benefits	108	(4.3)
Other adjustments
Sale of membership interests in Diamond Infrastructure Solutions	(112)	4.5
Other	(69)	2.8
Effective tax rate	$(67)	2.7%

Disaggregated in accordance with ASU 2023-09, which was adopted prospectively in 2025.
Primarily related to a tax credit stemming from the U.S. Tax Court's decision in Varian Medical Systems Inc. v. Commissioner.

Reconciliation to U.S. Statutory Rate 1	2024	2023
Statutory U.S. federal income tax rate	21.0%	21.0%
Equity earnings effect	—	4.2
Foreign income taxed at rates other than the statutory U.S. federal income tax rate	4.6	8.3
U.S. tax effect of foreign earnings and dividends	3.9	(13.0)
Unrecognized tax benefits	(10.2)	33.1
Changes in valuation allowances	(4.4)	18.8
Federal tax accrual adjustment	(1.0)	(21.2)
State and local income taxes	5.4	3.0
Change in tax basis in foreign assets 2	8.3	(54.9)
Foreign permanent items	(5.7)	(1.1)
Other - net	3.0	1.2
Effective tax rate	24.9%	(0.6)%

As presented prior to adoption of ASU 2023-09, which was adopted prospectively in 2025.
The 2023 impact primarily represents the initial recognition of tax basis in intangible assets in foreign jurisdictions and the related valuation allowance.

Deferred Tax Balances at Dec 31	2025		2024
In millions	Assets	Liabilities	Assets	Liabilities
Property	$281	$2,485	$178	$2,550
Tax loss and credit carryforwards	1,653	—	1,732	—
Postretirement benefit obligations	880	215	949	187
Other accruals and reserves	1,997	382	1,881	572
Intangibles	2,207	225	1,972	261
Inventory	141	103	137	227
Investments	145	234	102	31
Other – net	627	91	586	96
Subtotal	$7,931	$3,735	$7,537	$3,924
Valuation allowances	(3,049)	—	(2,748)	—
Total	$4,882	$3,735	$4,789	$3,924

Operating Loss and Tax Credit Carryforwards at Dec 31	2025	2024
In millions	Assets	Assets
Operating loss carryforwards
Expire within 5 years	$268	$390
Expire after 5 years or indefinite expiration	777	567
Total operating loss carryforwards	$1,045	$957
Tax credit carryforwards
Expire within 5 years	$118	$121
Expire after 5 years or indefinite expiration	362	244
Total tax credit carryforwards	$480	$365
Capital loss carryforwards
Expire within 5 years	$128	$410
Total tax loss and tax credit carryforwards	$1,653	$1,732

Undistributed earnings of foreign subsidiaries and related companies that are deemed to be permanently invested amounted to $5,319 million at December 31, 2025 and $7,125 million at December 31, 2024. Undistributed earnings are subject to certain taxes upon repatriation, primarily where foreign withholding taxes apply. It is not practicable to calculate the unrecognized deferred tax liability on undistributed earnings.

The following table provides a reconciliation of the Company's unrecognized tax benefits:

Total Gross Unrecognized Tax Benefits
In millions	2025	2024	2023
Total unrecognized tax benefits at Jan 1	$422	$513	$520
Decreases related to positions taken on items from prior years	(21)	(3)	(58)
Increases related to positions taken on items from prior years	4	—	89
Increases related to positions taken in the current year	132	47	77
Settlement of uncertain tax positions with tax authorities	(24)	(118)	(109)
Decreases due to expiration of statutes of limitations	(7)	(12)	(11)
Foreign exchange loss (gain)	3	(5)	5
Total unrecognized tax benefits at Dec 31	$509	$422	$513
Total unrecognized tax benefits that, if recognized, would impact the effective tax rate	$509	$422	$513
Total amount of interest and penalties expense (benefit) recognized in "Provision (credit) for income taxes"	$13	$(234)	$126
Total accrual for interest and penalties recognized in the consolidated balance sheets	$334	$327	$561

The Company files tax returns in multiple jurisdictions. These returns are subject to examination and possible challenge by the tax authorities. Open years contain matters that could be subject to differing interpretations of applicable tax laws and regulations as they relate to the amount, character, timing or inclusion of revenue and expenses or the sustainability of income tax credits for a given audit cycle. The ultimate resolution of such uncertainties is not expected to have a material impact on the Company's results of operations. The earliest open tax years are 2004 for state income taxes and 2007 for federal income taxes in the United States and 2010 for taxes in foreign jurisdictions.

On July 4, 2025, U.S. legislation formally titled "An Act to Provide for Reconciliation Pursuant to Title II of H. Con. Res. 14” (“the Act”) and commonly referred to as the One Big Beautiful Bill Act was signed into law. The Act, among other things, extended key provisions of the 2017 Tax Cuts and Jobs Act and introduced targeted changes to the U.S. federal income tax regime. The Act has not materially impacted the Company's effective tax rate.

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