Dow : 2022 Annual Report

2022

ANNUAL REPORT

How

Do We

Imagine

1. Better Future?

For 125 years, Dow has been pushing the boundaries in science and technology, innovating across generations to solve big world challenges, and driving forward as one team to deliver a sustainable future for all. Together, our purpose and ambition inspire us to deliver innovative and sustainable solutions that transform our world. They motivate us to Imagine Better for our communities, for our customers and partners, for our teams, and for our shareholders.

We know materials science drives innovation, and Dow's innovation has been built on creativity and collaboration. When we Imagine Better and combine the power of our materials science expertise with the needs and insights of our diverse partners, it becomes the springboard for our next 125 years of innovation.

Ambition	Purpose	Goal
To be the most	To deliver a sustainable	Value growth and
innovative, customer-	future for the world	best-in-class
centric, inclusive and	through our materials	performance.
sustainable materials	science expertise and
science company in	collaboration with our
the world.	partners.

Values

INTEGRITY	RESPECT	PROTECTING
	FOR PEOPLE	OUR PLANET

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	2022 |	Dow Annual Report
Financial Highlights
In millions, except per share amounts	2022	2021
Net Sales	$56,902	$54,968
Net Income	$4,640	$6,405
Operating EBIT1	$6,590	$9,533
Earnings per Common Share - Diluted	$6.28	$8.38
Operating EPS1	$6.25	$8.98
Cash Provided by Operating Activities - Continuing Operations2	$7,486	$7,069
Free Cash Flow1,2	$5,663	$5,568

Net Sales				Operating EBIT1			Cash Provided by Operating
(dollars in millions)				(dollars in millions)			Activities - Continuing Operations2
								(dollars in millions)
			$56,902			$6,590
2022		2022			2022		$7,486
		$54,968				$9,533			$7,069
2021		2021			2021
	$38,542				$2,715				$6,252
2020			2020			2020

2022 Shareholder Remuneration	2022 Sales by Operating Segment	2022 Sales by Geography
(dollars in millions)	(dollars in millions)	(dollars in millions)

Dividends	$10,764	$10,344	$19,631

$2,006

Performance	Asia Pacific
Materials &
Coatings

Europe, Middle

East, Africa

and India

$4,331			$29,260		$56,902			$56,902
			Packaging
				& Specialty
	Share		Plastics			$16,606	$20,945			$5,982
	Buyback
	$2,325
						Industrial	U.S. & Canada	Latin America
			Corporate: $272			Intermediates &
					Infrastructure

1. Non-GAAPmeasure. For definitions and reconciliation to the most directly comparable U.S. GAAP measure, see supplemental information in the Appendix and located at investors.dow.com under Financial Reporting. See the Appendix for a full list of financial definitions.
2. Excluding a $1 billion voluntary pension contribution, 2021 cash flow from operations would be $8,069 million and free cash flow would be $6,568 million.

Certain statements in this report, other than purely historical information, including estimates, projections, statements relating to business plans, objectives and expected operating results, and the assumptions upon which those statements are based, are "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 conditions 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. Dow Inc. undertakes no obligation to update or revise any forward-looking statements, whether because of new information, future events or otherwise, except as required by securities and other applicable laws. References to "Dow" or the "Company" mean Dow Inc. and its consolidated subsidiaries, unless otherwise expressly noted.

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In direct response to customer and consumer needs, we are investing to advance our circular and low-carbon offerings across our portfolio - which will importantly deliver additional underlying EBITDA1 growth - while driving the company toward zero-carbon emissions across our global asset base.

Dear Stakeholders,

We celebrated Dow's 125th anniversary in 2022. Throughout our company's history, our success has been driven by an unwavering focus on operating safely and reliably, innovating to create solutions for our customers, cultivating the strongest team in our industry, and delivering financial performance for our shareholders.

2022 was no different. We proactively navigated a dynamic macroeconomic environment, while executing on our Decarbonize and Grow strategy and advancing our solutions for a circular economy. I am proud of Team Dow for their continued commitment to deliver for our customers, shareholders and communities as we strive to deliver value growth by becoming the most innovative, customer-centric, inclusive and sustainable materials science company in the world.

RESILIENT PERFORMANCE

In the first half of the year, we capitalized on strong end-market demand across our diverse, global portfolio to achieve year-over-year sales growth, while leveraging our derivative and feedstock flexibility and low-cost positions to mitigate higher raw material and energy costs.

As economic conditions deteriorated in the second half of 2022, particularly in Europe, we took disciplined actions to prioritize our resources, adjust production rates and reduce costs. We ended the year with net sales of $56.9 billion, net income of $4.6 billion, GAAP earnings per share of $6.28 and operating EBIT1 of $6.6 billion.

Building on our earnings foundation, we took specific actions that delivered cash flow from operations of $7.5 billion and free cash flow1 of $5.7 billion, resulting in cash flow conversion1 of 80% of operating EBITDA.1 Our cash generation enabled us to continue to deliver on our financial priorities:

• Our CapEx was $1.8 billion and operating return on invested capital1 (ROIC) was 15% as we maintained our focus on safe and reliable operations, and prioritized higher-return,lower-risk and faster-payback projects.
• We achieved credit rating and outlook upgrades as a result of our strengthened balance sheet. Currently, we have no substantive long-term debt maturities due until 2027.
• We returned $4.3 billion to shareholders, through $2 billion in dividends and $2.3 billion in share repurchases. We have approximately $2 billion remaining on our latest $3 billion open share buyback program.

With a strong cash position and credit profile, we continue to have flexibility to deploy capital in a disciplined and balanced manner. As we advance our Decarbonize and Grow and circularity strategies, we are committed to keeping CapEx at or below depreciation and amortization, driving operating ROIC1 above 13%, and returning 65% of operating net income1 to our shareholders through the economic cycle.

1. Non-GAAPmeasure. See the Appendix for definitions and a reconciliation to the most directly comparable U.S. GAAP measure.
2. Incremental estimated EBITDA on a run-rate basis based on Dow and IHS historical margins and operating rate of 90%.
3. 30% emissions reduction versus 2005 levels.
4. "Zero-carbonemissions" and "carbon neutrality" refer to Scope 1, 2 and 3 carbon emissions, including offsets from product benefits and technology advancements.
5. "Net-zerocarbon" refers to Scope 1 and 2 carbon dioxide emissions, including offsets from technology advancements.

2022 Financial Highlights

Increased net sales	Delivered	Generated	Returned
by nearly	operating EBIT1 of	$7.5B	$4.3B
$2B	$6.6B	in cash flow from	to shareholders through
year-over-year		operations	dividends and share buybacks

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ADVANCING OUR DECARBONIZE AND GROW STRATEGY

The transition to a more sustainable economy presents significant growth opportunities, and lies at the heart of Dow's innovation and operational excellence capabilities. In direct response to customer and consumer needs, we are investing to advance our circular and low- carbon offerings across our portfolio - which will importantly deliver additional underlying EBITDA1 growth - while driving the company toward zero-carbon emissions across our global asset base.

In 2022, we invested in projects that are expected to deliver incremental EBITDA1,2 of $400 million, with $300 million from growth initiatives across our operating segments and $100 million from efficiency levers. Our 150-kiloton UNIFINITY™ FCDh pilot plant in Louisiana - which will produce propylene for coatings, electronics and durables end markets - is mechanically complete and in final commissioning, and our alkoxylation expansion projects will enable us to meet demand for higher-value, differentiated applications across home and consumer care, agricultural and infrastructure end markets. We also completed 16 silicones incremental debottlenecking projects to enable higher-performing, more sustainable solutions targeting mobility, consumer and infrastructure end markets.

We remain on track to improve our underlying EBITDA1,2 by more than $3 billion across the economic cycle, while reducing greenhouse gas emissions by 30% by 20303 and achieving carbon neutrality4 by 2050. In Alberta, we are advancing our plan to build the world's first net-zero5 CO2 emissions ethylene and derivatives cracker complex by 2030. This project will grow our global polyethylene supply by 15% while decarbonizing 20% of our global ethylene capacity, generating an additional $1 billion of underlying EBITDA.1,2

ACCELERATING OUR LEADERSHIP IN CIRCULARITY

Through investments in key technologies, recycling facilities and strategic collaborations across the value chain, we are advancing our circular plastics business platform to meet our customers' and stakeholders' increasing desire for more circular packaging and specialty plastics, in addition to scaling our ability to produce higher-value,higher-return recycled and renewable solutions.

To that end, in 2022 we announced several advanced and mechanical recycling circularity collaborations, including investment in Valoregen's largest single hybrid recycling site in France. We expanded our partnership with Mura Technology to construct multiple world-scale advanced recycling facilities in the U.S. and Europe, which will collectively add as much as 600 kilotons of

Delivered operating ROIC1 of	Achieved
15%,	80%
above our 13% commitment	cash flow conversion
across the cycle	of operating EBITDA1

2022 | Dow Annual Report

annual advanced recycling capacity. And we recently announced a collaboration with WM to improve residential plastic films recycling in the U.S., which is expected to divert more than 120,000 metric tons of plastic film from landfills annually.

We also expanded our "Stop the Waste" sustainability target to a "Transform the Waste" target, with a new commitment to commercialize 3 million metric tons of circular and renewable solutions annually by 2030. When combined with the additional capacity from our project

in Alberta, more than 50% of our global polyethylene capacity will be circular, renewable or zero-carbon emissions by 2030 - positioning Dow to lead the circular economy for plastics.

DELIVERING TODAY, INNOVATING FOR TOMORROW

I am immensely proud of Team Dow. Our company has one of the strongest balance sheets in my nearly 40-year career. We have leading positions across our attractive market verticals, geographies and value chains. And our talented and diverse team is passionate about delivering for our customers and innovating solutions that contribute to a better world. We continue to be well-positioned to capture growth and deliver shareholder value, while leveraging our technologies and product portfolio to help the transition to a more sustainable planet.

Thank you to our customers, suppliers, partners and members of Team Dow for your continued collaboration, and to our shareholders for your support.

Best regards,

Jim Fitterling

Chairman and Chief Executive Officer

Dow Inc.

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