The Corporation has a defined benefit pension plan that covers substantially all employees in the United States. Benefits are based on length of service and the employee's three highest consecutive years of compensation. Employees hired on or after January 1, 2008, earn benefits that are based on a set percentage of annual pay, plus interest. The Corporation also has a non-qualified supplemental pension plan.

The Corporation's funding policy is to contribute to the plan when pension laws or economics either require or encourage funding. In 2019, UCC contributed $2 million to its pension plans, including contributions to fund benefit payments for its non-qualified supplemental plan. UCC expects to contribute approximately $2 million to its pension plans in 2020.



Pension Plan Assumptions	Benefit Obligations at Dec 31				Net Periodic Costs for the Year Ended
	2019		2018		2019		2018		2017
Discount rate	3.29	%	4.32	%	4.32	%	3.59	%	4.00	%
Interest crediting rate for applicable benefits	4.50	%	4.50	%	4.50	%	4.50	%	4.50	%
Rate of compensation increase	4.25	%	4.25	%	4.25	%	4.25	%	4.25	%
Expected return on plan assets	—		—		6.80	%	6.80	%	6.80	%

The Corporation provides certain health care and life insurance benefits to retired U.S. employees and survivors. The plan provides health care benefits, including hospital, physicians' services, drug and major medical expense coverage and life insurance benefits. The Corporation and the retiree share the cost of these benefits, with the Corporation portion increasing as the retiree has increased years of credited service, although there is a cap on the Corporation portion. The Corporation has the ability to change these benefits at any time. Employees hired after January 1, 2008, are not covered under this plan.



Other Postretirement Benefit Plan Assumptions	Benefit Obligations at Dec 31				Net Periodic Costs for the Year Ended
	2019		2018		2019		2018		2017
Discount rate	3.17	%	4.23	%	4.23	%	3.51	%	3.88	%
Health care cost trend rate assumed for next year	6.25	%	6.50	%	6.50	%	6.75	%	7.00	%
Rate to which the cost trend rate is assumed to decline (the ultimate health care cost trend rate)	5.00	%	5.00	%	5.00	%	5.00	%	5.00	%
Year that the rate reaches the ultimate health care cost trend rate	2025		2025		2025		2025		2025

The Corporation determines the expected long-term rate of return on plan assets by performing a detailed analysis of key economic and market factors driving historical returns for each asset class and formulating a projected return based on factors in the current environment. Factors considered include, but are not limited to, inflation, real economic growth, interest rate yield, interest rate spreads, and other valuation measures and market metrics. The expected long-term rate of return for each asset class is then weighted based on the strategic asset allocation approved by the governing body for each plan. The Corporation's historical experience with the pension fund asset performance is also considered.

The Corporation uses the spot rate approach to determine the discount rate utilized to measure the service cost and interest cost components of net periodic pension and other postretirement benefit costs. Under the spot rate approach, the Corporation calculates service cost and interest cost by applying individual spot rates from the Willis Towers Watson U.S. RATE:Link 60-90 corporate yield curve (based on 60th to 90th percentile high-quality corporate bond yields) to the separate expected cash flow components of service cost and interest cost.

The discount rates utilized to measure the pension and other postretirement obligations of the U.S. qualified plans were based on the yield on high-quality corporate fixed income investments at the measurement date. Future expected actuarially determined cash flows for the plans are individually discounted at the spot rates under the Willis Towers Watson U.S. RATE:Link 60-90 corporate yield curve (based on 60th to 90th percentile high-quality corporate bond yields) to arrive at the plan’s obligations as of the measurement date.

The Corporation utilizes a modified version of the Society of Actuaries’ mortality tables released in 2014 and a modified version of the generational mortality improvement scale released in 2018 for purposes of measuring the U.S. pension and other postretirement obligations, based on an evaluation of the mortality experience of its pension plans.



Change in Projected Benefit Obligations, Plan Assets and Funded Status for All Plans	Defined Benefit Pension Plans						Other Postretirement Benefit Plan
In millions	2019			2018			2019			2018
Change in projected benefit obligations:
Benefit obligation at beginning of year	$	3,786		$	4,150		$	215		$	224
Service cost	34			39			1			1
Interest cost	145			128			7			6
Actuarial changes in assumptions and experience	453			(249		)	12			(2		)
Benefits paid	(280		)	(278		)	(15		)	(14		)
Other	(41		)	(4		)	—			—
Benefit obligation at end of year	$	4,097		$	3,786		$	220		$	215

Change in plan assets:
Fair value of plan assets at beginning of year	$	3,005		$	3,307		$	—		$	—
Actual return on plan assets	464			(62		)	—			—
Employer contributions	2			42			—			—
Asset transfers	(43		)	(4		)	—			—
Benefits paid	(280		)	(278		)	—			—
Fair value of plan assets at end of year	$	3,148		$	3,005		$	—		$	—

Funded status at end of year	$	(949	)	$	(781	)	$	(220	)	$	(215	)



Net amounts recognized in the consolidated balance sheets at Dec 31:
Accrued and other current liabilities	$	(2	)	$	(2	)	$	(17	)	$	(19	)
Pension and other postretirement benefits - noncurrent	(947		)	(779		)	(203		)	(196		)
Net amount recognized	$	(949	)	$	(781	)	$	(220	)	$	(215	)

Pretax amounts recognized in accumulated other comprehensive loss at Dec 31:
Net loss (gain)	$	2,137		$	2,019		$	(60	)	$	(79	)
Prior service credit	(10		)	(11		)	—			—
Pretax balance in accumulated other comprehensive loss at end of year	$	2,127		$	2,008		$	(60	)	$	(79	)

A significant component of the overall increase in the Corporation's benefit obligation for the year ended December 31, 2019 was due to the change in weighted-average discount rates, which decreased from 4.32 percent at December 31, 2018 to 3.29 percent at December 31, 2019. A significant component of the overall decrease in the Corporation's benefit obligation for the year ended December 31, 2018 was due to the change in weighted-average discount rates, which increased from 3.59 percent at December 31, 2017 to 4.32 percent at December 31, 2018.



Net Periodic Benefit Cost for All Plans for the Year Ended Dec 31	Defined Benefit Pension Plans									Other Postretirement Benefit Plan
	Defined Benefit Pension Plans									Other Postretirement Benefit Plan
In millions	2019			2018			2017			2019			2018			2017
Net Periodic Benefit Cost:
Service cost	$	34		$	39		$	38		$	1		$	1		$	1
Interest cost	145			128			129			7			6			8
Expected return on plan assets	(210		)	(218		)	(221		)	—			—			—
Amortization of prior service credit	(1		)	(1		)	(1		)	—			—			—
Amortization of net (gain) loss	84			95			83			(8		)	(9		)	(6		)
Net periodic benefit cost	$	52		$	43		$	28		$	—		$	(2	)	$	3
Changes in plan assets and benefit obligations recognized in other comprehensive (income) loss:
Net (gain) loss	$	202		$	31		$	131		$	11		$	(2	)	$	(23	)
Amortization of prior service credit	1			1			1			—			—			—
Amortization of net gain (loss)	(84		)	(95		)	(83		)	8			9			6
Total recognized in other comprehensive (income) loss	$	119		$	(63	)	$	49		$	19		$	7		$	(17	)
Total recognized in net periodic benefit cost and other comprehensive (income) loss	$	171		$	(20	)	$	77		$	19		$	5		$	(14	)

Plan assets consist primarily of equity and fixed income securities of U.S. and foreign issuers, and include alternative investments such as real estate, private equity and other absolute return strategies. At December 31, 2019, plan assets totaled $3.1 billion and included no directly held common stock of Dow Inc. At December 31, 2018, plan assets totaled $3.0 billion and included no directly held common stock of DowDuPont.

The Corporation's investment strategy for the plan assets is to manage the assets in relation to the liability in order to pay retirement benefits to plan participants over the life of the plans. This is accomplished by identifying and managing the exposure to various market risks, diversifying investments across various asset classes and earning an acceptable long-term rate of return consistent with an acceptable amount of risk, while considering the liquidity needs of the plan.

The plan is permitted to use derivative instruments for investment purposes, as well as for hedging the underlying asset and liability exposures and rebalancing the asset allocation. The plan uses value-at-risk, stress testing, scenario analysis and Monte Carlo simulation to monitor and manage both the risk within the portfolios and the surplus risk of the plan.

Equity securities primarily include investments in large- and small-cap companies located in both developed and emerging markets around the world. Fixed income securities are primarily U.S. dollar based and include U.S. treasuries and investment grade corporate bonds of companies diversified across industries. Alternative investments primarily include investments in real estate, private

The Corporation mitigates the credit risk of investments by establishing guidelines with the investment managers that limit investment in any single issue or issuer to an amount that is not material to the portfolio being managed. These guidelines are monitored for compliance both by the Corporation and the external managers. Credit risk for hedging activity is mitigated by utilizing multiple counterparties, collateral support agreements, and centralized clearing where appropriate.

The Northern Trust Collective Government Short Term Investment money market fund is utilized as the sweep vehicle for the pension plan, which from time to time can represent a significant investment. Approximately 34 percent of the liability of the pension plan is covered by a participating group annuity issued by Prudential Insurance Company.

Fair value calculations may not be indicative of net realizable value or reflective of future fair values. Furthermore, although the Corporation believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

For assets classified as Level 1 measurements (measured using quoted prices in active markets), the total fair value is either the price of the most recent trade at the time of the market close or the official close price, as defined by the exchange on which the asset is most actively traded on the last trading day of the period, multiplied by the number of units held without consideration of transaction costs.

For assets classified as Level 2 measurements, where the security is frequently traded in less active markets, fair value is based on the closing price at the end of the period; where the security is less frequently traded, fair value is based on the price a dealer would pay for the security or similar securities, adjusted for any terms specific to that asset or liability. Market inputs are obtained from well-established and recognized vendors of market data and subjected to tolerance and quality checks. For derivative assets and liabilities, standard industry models are used to calculate the fair value of the various financial instruments based on significant observable market inputs such as foreign exchange rates, commodity prices, swap rates, interest rates, and implied volatilities obtained from various market sources. For other assets for which observable inputs are used, fair value is derived through the use of fair value models, such as a discounted cash flow model or other standard pricing models.

Certain pension plan assets are held in funds where fair value is based on an estimated net asset value per share (or its equivalent) as of the most recently available fund financial statements which are received on a monthly or quarterly basis. These valuations are reviewed for reasonableness based on applicable sector, benchmark and company performance. Adjustments to valuations are made where appropriate to arrive at an estimated net asset value per share at the measurement date. These funds are not classified within the fair value hierarchy.



Basis of Fair Value Measurements	Dec 31, 2019										Dec 31, 2018
In millions	Total			Level 1		Level 2			Level 3		Total		Level 1		Level 2		Level 3
Cash and cash equivalents	$	160		$	148	$	12		$	—	$	189	$	189	$	—	$	—
Equity securities:
U.S. equity securities	$	346		$	344	$	2		$	—	$	277	$	275	$	2	$	—
Non - U.S. equity securities	369			325		40			4		321		269		46		6
Total equity securities	$	715		$	669	$	42		$	4	$	598	$	544	$	48	$	6
Fixed income securities:
Debt - government-issued	$	812		$	7	$	805		$	—	$	812	$	8	$	804	$	—
Debt - corporate-issued	455			9		446			—		413		11		402		—
Debt - asset-backed	13			—		13			—		30		—		30		—
Total fixed income securities	$	1,280		$	16	$	1,264		$	—	$	1,255	$	19	$	1,236	$	—
Alternative investments:
Private market securities	$	5		$	—	$	—		$	5	$	—	$	—	$	—	$	—
Derivatives - asset position	—			—		—			—		12		—		12		—
Derivatives - liability position	(3		)	—		(3		)	—		—		—		—		—
Total alternative investments	$	2		$	—	$	(3	)	$	5	$	12	$	—	$	12	$	—
Other investments	$	2		$	5	$	(3	)	$	—	$	—	$	—	$	—	$	—
Subtotal	$	2,159		$	838	$	1,312		$	9	$	2,054	$	752	$	1,296	$	6
Investments measured at net asset value:
Hedge funds	$	266									$	287
Private market securities	389										335
Real estate	341										327
Total investments measured at net asset value	$	996									$	949
Items to reconcile to fair value of plan assets:
Pension trust receivables ¹	$	—									$	2
Pension trust payables ²	(7		)								—
Total	$	3,148									$	3,005



Fair Value Measurement of Level 3 Pension Plan Assets	Equity Securities			Alternative Investments			Total
In millions	Equity Securities			Alternative Investments			Total
Balance at Jan 1, 2018	$	7		$	—		$	7
Actual return on plan assets:
Relating to assets held at Dec 31, 2018	(1		)	—			(1		)
Balance at Dec 31, 2018	$	6		$	—		$	6
Actual return on plan assets:
Relating to assets held at Dec 31, 2019	—			(5		)	(5		)
Purchases, sales and settlements	(2		)	10			8
Balance at Dec 31, 2019	$	4		$	5		$	9

In addition to the qualified defined benefit pension plan, U.S. employees may participate in defined contribution plans (Employee Savings Plans or 401(k) plans) by contributing a portion of their compensation, which is partially matched by the Corporation. Expense recognized for all defined contribution plans was $9 million in 2019, $15 million in 2018 and $21 million in 2017.