DOW CHEMICAL CO /DE/

NOTE 18 –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 2025 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 March 31, 2026, $94 million is included in "Cash and cash equivalents" ($555 million at December 31, 2025) and $66 million is included in "Other current assets" ($69 million at December 31, 2025) 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 17 for classification of derivatives in the consolidated balance sheets.

7. Cost includes fair value hedge adjustment gains of $27 million at March 31, 2026 and December 31, 2025 on $5,888 million of debt at March 31, 2026 and $5,538 million at December 31, 2025.

8. Estimated liability for TDCC's guarantee of Sadara's debt, of which $430 million is included in "Other noncurrent obligations" ($132 million at December 31, 2025) and $80 million is included in "Accrued and other current liabilities" ($80 million at December 31, 2025) 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 $109 million in private market securities and $12 million in real estate at March 31, 2026 ($109 million in private market securities and $13 million in real estate at December 31, 2025). There are no redemption restrictions and the unfunded commitments on these investments were $95 million at March 31, 2026 and $65 million at December 31, 2025.

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 project financing debt is in proportion to the Company’s 35 percent ownership interest in Sadara. The estimated fair value of the project financing debt 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. During the three months ended March 31, 2026, the fair value of the project financing debt guarantee liability increased by $298 million, which was included in “Equity in losses of nonconsolidated affiliates” in the consolidated statements of income. The increase in fair value was primarily attributable to adverse business conditions impacting Sadara’s operations, including the ongoing conflicts in the Middle East. The Company has also guaranteed Sadara's obligation related to its $500 million revolving credit facility. In 2025, Sadara drew $80 million from this facility. The estimated fair value of the revolving credit facility guarantee was calculated based on a discounted cash flow analysis of the Company's expected obligation to make future payments on behalf of Sadara in the second quarter of 2026. See Note 11 for further information on guarantees classified as Level 3 measurements.