STOCKHOLDERS' EQUITY (Notes)

12 Months Ended

Dec. 31, 2023

Stockholders' Equity Note [Abstract]

STOCKHOLDERS' EQUITY

STOCKHOLDERS’ EQUITY

Common Stock

The principal market for Dow Inc.'s common stock is the New York Stock Exchange, traded under the symbol “DOW.” Dow Inc. is the direct parent company of The Dow Chemical Company and its consolidated subsidiaries, ("TDCC" and together with Dow Inc., "Dow" or the "Company"), owning all of the outstanding common shares of TDCC.

The Company may issue shares of Dow Inc. common stock out of treasury stock or as new shares of common stock for options exercised and for the release of restricted stock units ("RSUs"), performance stock units ("PSUs"), the Employee Stock Purchase Plan ("ESPP") and the Employees' Savings Plan (the "Savings Plan"). Common stock shares issued to employees and non-employee directors was approximately 6.9 million in 2023 (7.5 million in 2022 and 8.2 million in 2021). See Note 19 for additional information on the Company's equity awards.

Retained Earnings

Dow Inc.

There are no significant restrictions limiting Dow Inc.’s ability to pay dividends. Dow Inc. declared dividends of $2.80 per share in 2023, 2022 and 2021.

Undistributed earnings of nonconsolidated affiliates included in retained earnings was $684 million at December 31, 2023 and $669 million at December 31, 2022.

TDCC

TDCC's Board of Directors determines whether or not there will be a dividend distribution to Dow Inc. TDCC declared and paid dividends to Dow Inc. of $2,510 million in 2023, $4,375 million in 2022 and $3,264 million in 2021.

Employee Stock Ownership Plan

The Dow Employee Stock Ownership Plan (the “ESOP”) allocated the remaining shares in 2022 and no shares remained unallocated at December 31, 2022 and December 31, 2023. Unallocated shares at December 31, 2021, were excluded from the Company's earnings per share calculation.

Compensation expense for allocated shares is recorded at the fair value of the shares on the date of allocation. As all remaining ESOP shares were allocated in 2022, there was no compensation expense recorded in 2023 for allocated ESOP shares. Compensation expense reflected in income before income taxes for ESOP shares allocated was $31 million in 2022 and $77 million in 2021.

Treasury Stock

On April 1, 2019, the Board ratified the share repurchase program originally approved on March 15, 2019, authorizing up to $3.0 billion for the repurchase of the Company's common stock, with no expiration date. The Company completed the April 1, 2019 share repurchase program in the second quarter of 2022. On April 13, 2022, the Board approved a new share repurchase program authorizing up to $3.0 billion for the repurchase of the Company's common stock, with no expiration date. In 2023, the Company repurchased $625 million of its common stock ($2,325 million in 2022 and $1,000 million in 2021). Excise tax for repurchased shares was $2 million in 2023 (zero in 2022 and 2021), and was included in treasury stock at cost. At December 31, 2023, $1,425 million of the share repurchase program authorization remained available for repurchases.

The Company began issuing treasury shares to satisfy its obligations to make matching contributions to plan participants under The Dow Employees' Savings Plan in the first quarter of 2022. The Company issued 2.3 million treasury shares under its compensation and benefit plans in 2023 and 1.5 million in 2022

Compensation expense for issued shares is recorded at the fair value of the shares on the date of issuance. Compensation expense reflected in income before income taxes for treasury shares issued was $120 million in 2023 and $94 million in 2022.

The following table provides a reconciliation of Dow Inc. common stock activity for the years ended December 31, 2023, 2022 and 2021:

Shares of Dow Inc. Common Stock	Issued	Held in Treasury
Balance at Jan 1, 2021	755,993,198	12,803,303
Issued 1	8,233,684	—
Repurchased	—	16,208,270
Balance at Jan 1, 2022	764,226,882	29,011,573
Issued 1	7,451,643	(1,499,610)
Repurchased	—	39,286,642
Balance at Jan 1, 2023	771,678,525	66,798,605
Issued 1	6,916,989	(2,347,747)
Repurchased	—	11,851,223
Balance at Dec 31, 2023	778,595,514	76,302,081

1.Shares issued to employees and non-employee directors under the Company's equity compensation plans.

Accumulated Other Comprehensive Loss

The changes in each component of AOCL for the years ended December 31, 2023, 2022 and 2021 were as follows:

Accumulated Other Comprehensive Loss	2023		2022		2021
In millions
Unrealized Gains (Losses) on Investments
Beginning balance	$	(253)	$	59	$	104
Unrealized gains (losses) on investments	(6)		(326)		(21)
Tax (expense) benefit	54		13		5
Net unrealized gains (losses) on investments	48		(313)		(16)
(Gains) losses reclassified from AOCL to net income 1	(63)		2		(38)
Tax expense (benefit) 2	15		(1)		9
Net (gains) losses reclassified from AOCL to net income	(48)		1		(29)
Other comprehensive income (loss), net of tax	—		(312)		(45)
Ending balance	$	(253)	$	(253)	$	59
Cumulative Translation Adjustment
Beginning balance	$	(1,934)	$	(1,355)	$	(930)
Gains (losses) on foreign currency translation	57		(557)		(375)
Tax (expense) benefit	—		24		(40)
Net gains (losses) on foreign currency translation	57		(533)		(415)
(Gains) losses reclassified from AOCL to net income 3	(14)		(46)		(10)
Other comprehensive income (loss), net of tax	43		(579)		(425)
Ending balance	$	(1,891)	$	(1,934)	$	(1,355)
Pension and Other Postretirement Benefits
Beginning balance	$	(4,877)	$	(7,334)	$	(9,559)
Gains (losses) arising during the period	(1,454)		2,611		2,094
Tax (expense) benefit	349		(630)		(464)
Net gains (losses) arising during the period	(1,105)		1,981		1,630
Amortization of net loss and prior service credits reclassified from AOCL to net income 4	648		622		776
Tax expense (benefit) 2	(152)		(146)		(181)
Net loss and prior service credits reclassified from AOCL to net income	496		476		595
Other comprehensive income (loss), net of tax	(609)		2,457		2,225
Ending balance	$	(5,486)	$	(4,877)	$	(7,334)
Derivative Instruments
Beginning balance	$	(75)	$	(347)	$	(470)
Gains (losses) on derivative instruments	(201)		638		155
Tax (expense) benefit	30		(87)		3
Net gains (losses) on derivative instruments	(171)		551		158
(Gains) losses reclassified from AOCL to net income 5	250		(313)		(38)
Tax expense (benefit) 2	(55)		34		3
Net (gains) losses reclassified from AOCL to net income	195		(279)		(35)
Other comprehensive income (loss), net of tax	24		272		123
Ending balance	$	(51)	$	(75)	$	(347)
Total AOCL ending balance	$	(7,681)	$	(7,139)	$	(8,977)

1.Reclassified to "Net sales" and "Sundry income (expense) - net."

2.Reclassified to "Provision for income taxes."

3.Reclassified to "Sundry income (expense) - net."

4.These AOCL components are included in the computation of net periodic benefit cost of the Company's defined benefit pension and other postretirement benefit plans. See Note 18 for additional information.

5.Reclassified to "Cost of sales," "Sundry income (expense) - net" and "Interest expense and amortization of debt discount."