Operating Cash Flow in FY 2024 is almost **43% lower** than in FY 2023 mainly due to several factors. In FY 2023, the company benefited from a **significant working capital release** from destocking, which positively boosted cash flows—a benefit that was not repeated in FY 2024.  **[0001751788-25-000012_dow-20241231.htm:60]** **[20250130DC07756:0]**  Moreover, **operating earnings declined** from **$2,778 million to $2,588 million** because of lower prices and margins in key segments, further reducing cash generation.  **[0001751788-25-000012_dow-20241231.htm:62]**  Additionally, **higher non-cash adjustments** such as restructuring charges and efficiency costs, along with adverse changes in working capital (including increased accounts receivable and inventories and a smaller increase in accounts payable), collectively led to the substantial decline in cash provided by operating activities.  **[0001751788-25-000012_dow-20241231.htm:60]** **[0001751788-25-000012_dow-20241231.htm:101]** **[0001751788-25-000012_dow-20241231.htm:62]** 

Why is Operating Cash Flow in FY 2024 almost 43% lower than the prior year?

Based on the available documents, there is no information regarding the negative free cash flow in Q1 2024.  **[0001751788-23-000116_dow-20230331.htm:7]** **[0001751788-24-000129_dow-20240331.htm:7]** **[0001751788-24-000129_dow-20240331.htm:41]** 

What caused Free Cash Flow to turn negative in Q1 2024?

The nearly halved operating cash flow in **Q3 2024** was driven by **higher inventory levels**—increased to support sales growth and address labor-related supply chain disruptions—**lower GAAP net income** (decreasing from **$327 million** in Q3 2023 to **$240 million** in Q3 2024), and **unplanned operational disruptions** such as a cracker outage in Texas coupled with higher planned maintenance activities.  **[0001751788-24-000150_dow-20240930.htm:40]** **[20241024DC38877:0]** **[0001751788-24-000147_exhibit991enrschedules3q24.htm:0]** 

What led to Operating Cash Flow nearly halving in Q3 2024?

Why did Capital Expenditures spike in Q1 2024?

The provided documents only discuss **capital expenditures** for Dow Inc. and do not offer any information or explanation regarding a dramatic collapse in **annual Free Cash Flow**.  **[0001751788-24-000010_dow-20231231.htm:89]** **[0001751788-25-000012_dow-20241231.htm:106]** **[0001751788-25-000012_dow-20241231.htm:61]** 

What explains the dramatic collapse in annual Free Cash Flow?

5208ce44540e01faad4c6e2b14eac5bc5afffe75f9df26befaa68633f14dfd19

The sharp decline in cash and cash equivalents in Q4 2024 was primarily driven by a confluence of factors. **Operating activities** contributed to lower cash flows, as cash provided from operating activities dropped significantly due to lower cash earnings and increased cash used for working capital, performance-based compensation, pension contributions, and severance payments. **Investing activities** also played a role, with substantial cash used for capital expenditures, while **financing activities** further reduced cash due to high dividend payments and treasury stock repurchases. Additionally, adverse exchange rate movements negatively impacted the cash balance.  **[0001751788-25-000012_dow-20241231.htm:60]** 

Why did cash and cash equivalents drop so sharply in Q4 2024?

The significant jump in short-term debt in Q4 2024 was primarily caused by the reclassification of long-term debt that is due to mature within the next 12 months. Dow Inc. shifted portions of its long-term obligations into current liabilities, increasing the reported debt from **$117 million** in the previous period to **$497 million** in Q4 2024, driven by **$495 million** of obligations maturing in 2025.  **[0001751788-25-000012_dow-20241231.htm:65]** **[0001751788-25-000012_dow-20241231.htm:70]** 

What caused the significant jump in short-term debt in Q4 2024?

The noticeable reduction in total assets for Q4 2024 is primarily due to significant decreases in **cash and cash equivalents**, which dropped from **$2,987 million** to **$2,189 million**, and **other current assets**, which fell from **$1,937 million** to **$993 million**. Additionally, there was a decline in **other intangible assets** from **$2,072 million** to **$1,721 million**. These declines were only partially offset by increases in **inventories** (from **$6,076 million** to **$6,544 million**) and **net property** (from **$21,066 million** to **$22,004 million**). This overall combination of decreases resulted in a net reduction of **$655 million** in total assets in Q4 2024.  **[0001751788-25-000005_exhibit991enrschedules4q24.htm:8]** **[0001751788-25-000012_dow-20241231.htm:100]** **[20250130DC07756:8]** 

Why are total assets noticeably lower in Q4 2024?

99b7837f2b14f9efd0a2d25e3b56ddbfd47cb2fe74b358b69bbeac00bc81534b

The net income turned negative in Q4 2024 primarily due to significant non-recurring items that heavily impacted the financial results. In that quarter, **significant items had a pretax impact of $76 million**, which translated into a **net income impact of $55 million**. These items included expenses related to restructuring, implementation, efficiency costs, indemnifications, and other transaction-related costs. Additionally, despite an improvement in underlying operating performance, a **higher provision for income taxes ($254 million)** further contributed to the negative net income outcome.  **[20250130DC07756:11]** **[0001751788-25-000005_exhibit991enrschedules4q24.htm:7]** 

Why did Net Income turn negative in Q4 2024?

In Q4 2024, EPS turned negative primarily because **significant items**—mainly restructuring and efficiency costs—diminished earnings by **$(0.08) per share**, and this, coupled with a **GAAP net loss** of **$(35) million** due to lower operating EBIT (reflecting impacts from lower prices and seasonal demand declines), drove EPS into negative territory.  **[20250130DC07756:11]** **[0001751788-25-000005_exhibit991enrschedules4q24.htm:0]** 

What drove EPS into negative territory in Q4 2024?

Dow Inc.'s **Income Before Income Taxes** in Q4 2024 was relatively low at **$219 million** because several factors worked against a higher figure. Specifically, the company incurred **$89 million** in restructuring, implementation, and efficiency costs, which weighed on the results despite a significant positive effect from **$159 million** in improved sundry income. Moreover, while the operating performance remained robust, with an EBIT of **$454 million**, it was slightly lower compared to the previous year, further contributing to the modest tax-line result.  **[20250130DC07756:11]** **[20250130DC07756:8]** **[0001751788-25-000005_exhibit991enrschedules4q24.htm:7]** 

Why was Income Before Income Taxes so low in Q4 2024?

8ffbbf9309f854770eddae6a3c6afcbfe77933e9af88e6e8936ee9b63290e10d

cf38cd6747aec42a707a9de9bad58f51f89fd0f2d9d437adca1466e219e9f9da

608014d48e4d42dfddfd2742f50137456feb9eeb4a0788b3bee39cfb279467c8

Net Sales (USD, millions)

Cost of Sales (USD, millions)

Research and Development Expenses (USD, millions)

Selling, General and Administrative Expenses (USD, millions)

Amortization of Intangibles (USD, millions)

Restructuring and Asset Related Charges - Net (USD, millions)

Equity in Earnings (Losses) of Nonconsolidated Affiliates (USD, millions)

Sundry Income (Expense) - Net (USD, millions)

Interest Income (USD, millions)

Interest Expense and Amortization of Debt Discount (USD, millions)

Income Before Income Taxes (USD, millions)

Provision (Credit) for Income Taxes (USD, millions)

Net Income (USD, millions)

Net Income Attributable to Noncontrolling Interests (USD, millions)

Net Income Available for Dow Inc. Common Stockholders (USD, millions)

Earnings per Common Share - Basic (USD)

Earnings per Common Share - Diluted (USD)

Weighted-Average Common Shares Outstanding - Basic (Millions)

Weighted-Average Common Shares Outstanding - Diluted (Millions)

90b7438601db52f65ff6f05a66f84669c9ef875eb482f501cc7d4c56bd9e2d46

Total Revenue [USD, Millions]

Cost of Goods Sold (COGS) [USD, Millions]

Selling, General, and Administrative Expenses (SG&A) [USD, Millions]

Research and Development (R&D) [USD, Millions]

Depreciation and Amortization (D&A) [USD, Millions]

Interest Expense [USD, Millions]

Operating Income (EBIT) [USD, Millions]

Net Income [USD, Millions]

Earnings Per Share (EPS) - Basic [USD, Units]

Earnings Per Share (EPS) - Diluted [USD, Units]

a25bddbf4ae90e212c872f1325fc04f8e70898d39ab439db33a315db140efbbd

Current Assets [USD, Millions]

Cash and Cash Equivalents [USD, Millions]

Accounts Receivable [USD, Millions]

Inventory [USD, Millions]

Non-Current Assets [USD, Millions]

Property, Plant, and Equipment (PP&E) [USD, Millions]

Goodwill [USD, Millions]

Intangible Assets [USD, Millions]

Current Liabilities [USD, Millions]

Accounts Payable [USD, Millions]

Short-term Debt [USD, Millions]

Accrued Expenses [USD, Millions]

Non-Current Liabilities [USD, Millions]

Long-term Debt [USD, Millions]

Lease Liabilities [USD, Millions]

Deferred Tax Liabilities [USD, Millions]

Shareholders' Equity [USD, Millions]

Retained Earnings [USD, Millions]

Common Stock [USD, Millions]

Additional Paid-in Capital [USD, Millions]

51f0c2f5eb9b1d8604e3381447da4501b977c936c1696c80baec7a401b0d8b08

Adjustments for Non-Cash Items [USD, Millions]

Stock-Based Compensation [USD, Millions]

Changes in Working Capital [USD, Millions]

Capital Expenditures (CapEx) [USD, Millions]

Proceeds from / Repayments of Debt [USD, Millions]

Share Repurchases [USD, Millions]

Dividend Payments [USD, Millions]

Net Change in Cash [USD, Millions]

32234729eea0e6b2392110476e302c298edb78729e46909809f6bc7ad5c016e3

Percentage change in Net Sales from prior period due to Currency for Packaging & Specialty Plastics (percentage)

Percentage change in Net Sales from prior period due to Volume for Packaging & Specialty Plastics (percentage)

Percentage change in Net Sales from prior period due to Total for Packaging & Specialty Plastics (percentage)

Percentage change in Net Sales from prior period due to Local price & product mix for Industrial Intermediates & Infrastructure (percentage)

Percentage change in Net Sales from prior period due to Currency for Industrial Intermediates & Infrastructure (percentage)

Percentage change in Net Sales from prior period due to Volume for Industrial Intermediates & Infrastructure (percentage)

Percentage change in Net Sales from prior period due to Total for Industrial Intermediates & Infrastructure (percentage)

Percentage change in Net Sales from prior period due to Local price & product mix for Performance Materials & Coatings (percentage)

Percentage change in Net Sales from prior period due to Currency for Performance Materials & Coatings (percentage)

Percentage change in Net Sales from prior period due to Volume for Performance Materials & Coatings (percentage)

Percentage change in Net Sales from prior period due to Total for Performance Materials & Coatings (percentage)

Percentage change in Net Sales from prior period due to Local price & product mix for Total (percentage)

Percentage change in Net Sales from prior period due to Currency for Total (percentage)

Percentage change in Net Sales from prior period due to Volume for Total (percentage)

Percentage change in Net Sales from prior period due to Total for Total (percentage)

Percentage change in Net Sales from prior period due to Local price & product mix for Total, excluding the Hydrocarbons & Energy business (percentage)

Percentage change in Net Sales from prior period due to Currency for Total, excluding the Hydrocarbons & Energy business (percentage)

Percentage change in Net Sales from prior period due to Volume for Total, excluding the Hydrocarbons & Energy business (percentage)

Percentage change in Net Sales from prior period due to Total for Total, excluding the Hydrocarbons & Energy business (percentage)

Percentage change in Net Sales from prior period due to Local price & product mix for U.S. & Canada (percentage)

Percentage change in Net Sales from prior period due to Currency for U.S. & Canada (percentage)

Percentage change in Net Sales from prior period due to Volume for U.S. & Canada (percentage)

Percentage change in Net Sales from prior period due to Total for U.S. & Canada (percentage)

Percentage change in Net Sales from prior period due to Local price & product mix for EMEAI (percentage)

Percentage change in Net Sales from prior period due to Currency for EMEAI (percentage)

Percentage change in Net Sales from prior period due to Volume for EMEAI (percentage)

Percentage change in Net Sales from prior period due to Total for EMEAI (percentage)

Percentage change in Net Sales from prior period due to Local price & product mix for Asia Pacific (percentage)

Percentage change in Net Sales from prior period due to Currency for Asia Pacific (percentage)

Percentage change in Net Sales from prior period due to Volume for Asia Pacific (percentage)

Percentage change in Net Sales from prior period due to Total for Asia Pacific (percentage)

Percentage change in Net Sales from prior period due to Local price & product mix for Latin America (percentage)

Percentage change in Net Sales from prior period due to Currency for Latin America (percentage)

Percentage change in Net Sales from prior period due to Volume for Latin America (percentage)

Percentage change in Net Sales from prior period due to Total for Latin America (percentage)

Days sales outstanding in trade receivables (days)

Days sales in inventory (days)

Days payables outstanding (days)

40e3373b531ec42d2553f49b093e237a0b05d00be983dc6967fcec52531bdc1d

U.S. & Canada

EMEAI

Asia Pacific

Latin America

Total Revenue

746eb2c2c86ed39c482710894cdc26328c329896f9a42f5f9d96266ba0d44366

Packaging & Specialty Plastics

- Hydrocarbons & Energy

- Packaging and Specialty Plastics

Industrial Intermediates & Infrastructure

- Industrial Solutions

- Polyurethanes & Construction Chemicals

- Other

Performance Materials & Coatings

- Coatings & Performance Monomers

- Consumer Solutions

Corporate

13cabb2b4c809a443b8d28955e636c4982246e78fb451f7ca01626fd44d45f8a

DOW (DOW)

Financials