DOW CHEMICAL CO /DE/

Operating Segments & End-Market Expectations

Team Dow remains focused on delivering near-term cost savings, navigating an unprecedented industry downturn and its long-standing cultural values of safety and reliability. At the same time, by reducing complexity, adopting the best available technologies and streamlining end-to-end processes, Transform to Outperform is expected to provide step-change productivity gains while enabling consistent growth. The Company will make breakthrough improvements to fundamentally simplify Dow’s operating model, which will position the Company to work more efficiently, better serve customers and deliver improved shareholder returns.

In Packaging & Specialty Plastics, continued volume growth is expected driven by an increase in global polyethylene demand as well as the full year benefit of the Company's new polyethylene train located in the U.S. Gulf Coast that came online in the second half of 2025. Local prices will be impacted by market supply and demand dynamics as well as competitor capacity rationalizations. The Company’s feedstock flexibility, low cost, and advantaged integrated regional footprint will continue to position the segment to navigate market dynamics throughout the year.

In Industrial Intermediates & Infrastructure, improved volume growth is expected based on the full year impact of the recent growth investment in alkoxylation capacity as well as underlying growth in key end-markets which will more than offset the loss of volume from the shutdown of a propylene oxide and propylene glycol plant in Freeport, Texas. The upgraded capacity supports increasing demand across a wide range of fast-growing end-markets including home and personal care, energy, and pharmaceuticals. The investments are backed by supply agreements with customers, including leading consumer brands. Local prices are expected to remain similar to 2025 levels.

In Performance Materials & Coatings, the Company will continue to prioritize key end-markets in performance silicones in which its innovation and footprint can drive value and volume growth above GDP. While demand in consumer and electronics is expected to benefit from continued investments in artificial intelligence, data centers, and advanced devices, other sectors face a more challenging environment. Pricing for specialty products is expected to remain relatively stable due to anticipated modest and uneven economic expansion as consumer sentiment remains subdued. Dow will complete the shutdown of a basics siloxanes plant in Barry, United Kingdom, by mid-year 2026 to rationalize its global footprint. Market conditions impacting sales of coatings are expected to improve compared with recent years due to global central bank rate cut activity across the second half of 2025.

Other factors impacting operating segment profitability include an expected increase in planned maintenance turnaround spending of approximately $200 million compared with 2025.

Projected Sources and Uses of Cash

Items that may impact the consolidated statements of cash flows in 2026 include:

•Capital expenditures are expected to be approximately $2.5 billion.

•Cash contributions to pension plans are expected to be approximately $180 million.

•Cash outflows related to the Company's 2025 Restructuring Program are expected to be approximately $260 million.

•Cash inflows related to the judgment with Nova Chemicals Corporation are expected to be approximately $1.3 billion.

•Cash outflows for dividends paid to noncontrolling interests are expected to be approximately $250 million.

•Cash outflows associated with Transform to Outperform are expected to be approximately $0.8 billion to $1.0 billion.