On this page of StockholderLetter.com we present the 3/3/2023 shareholder letter from DOW INC. — ticker symbol DOW. Reading current and past DOW letters to shareholders can bring important insights into the investment thesis.
2022 ANNUAL REPORT
How Do We Imagine a 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 innovative, customercentric, inclusive and sustainable materials science company in the world. To deliver a sustainable future for the world through our materials science expertise and collaboration with our partners. Value growth and best-in-class performance. Values INTEGRITY 1 RESPECT FOR PEOPLE PROTECTING OUR PLANET
2022 | Dow Annual Report Financial Highlights In millions, except per share amounts Net Sales Net Income 1 Operating EBIT Earnings per Common Share Diluted 1 Operating EPS 2 Cash Provided by Operating Activities Continuing Operations 1,2 Free Cash Flow Net Sales Operating EBIT1 (dollars in millions) (dollars in millions) 2022 2021 $56,902 $54,968 $4,640 $6,405 $6,590 $9,533 $6.28 $8.38 $6.25 $8.98 $7,486 $7,069 $5,663 $5,568 Cash Provided by Operating Activities Continuing Operations2 (dollars in millions) $56,902 2022 $54,968 2021 $38,542 2020 $6,590 2022 $9,533 2021 2020 $7,486 2022 $2,715 $7,069 2021 $6,252 2020 2022 Shareholder Remuneration 2022 Sales by Operating Segment 2022 Sales by Geography (dollars in millions) (dollars in millions) (dollars in millions) Dividends $2,006 $29,260 $4,331 Share Buyback Packaging & Specialty Plastics $10,764 $10,344 Performance Materials & Coatings Asia Paci c $56,902 Corporate: $272 Europe, Middle East, Africa and India $56,902 $16,606 $2,325 $19,631 Industrial Intermediates & Infrastructure $20,945 U.S. & Canada $5,982 Latin America 1 Non-GAAP measure. For de nitions 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 nancial de nitions. 2 Excluding a $1 billion voluntary pension contribution, 2021 cash ow from operations would be $8,069 million and free cash ow 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 nancial performance, nancial 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. 2
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. 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. 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. Non-GAAP measure. See the Appendix for de nitions 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-carbon emissions and carbon neutrality refer to Scope 1, 2 and 3 carbon emissions, including offsets from product bene ts and technology advancements. 5 Net-zero carbon refers to Scope 1 and 2 carbon dioxide emissions, including offsets from technology advancements. 2022 Financial Highlights Increased net sales by nearly Delivered operating EBIT1 of $2B $6.6B year-over-year 3 Generated Returned $7.5B $4.3B in cash flow from operations to shareholders through dividends and share buybacks
2022 | Dow Annual Report 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 lowcarbon 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 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, 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. Jim Fitterling Chairman and Chief Executive Officer Dow Inc. 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 across the cycle cash flow conversion of operating EBITDA1 4
 • shareholder letter icon 3/3/2023 Letter Continued (Full PDF)
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 • Benford's Law Stocks icon DOW Benford's Law Stock Score = 99


DOW 3/3/2023 Shareholder/Stockholder Letter Transcript:

2022
ANNUAL REPORT

How
Do We
Imagine
a 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
innovative, customercentric, inclusive and
sustainable materials
science company in
the world.
To deliver a sustainable
future for the world
through our materials
science expertise and
collaboration with our
partners.
Value growth and
best-in-class
performance.
Values
INTEGRITY
1
RESPECT
FOR PEOPLE
PROTECTING
OUR PLANET

2022 | Dow Annual Report
Financial Highlights
In millions, except per share amounts
Net Sales
Net Income
1
Operating EBIT
Earnings per Common Share     Diluted
1
Operating EPS
2
Cash Provided by Operating Activities     Continuing Operations
1,2
Free Cash Flow
Net Sales
Operating EBIT1
(dollars in millions)
(dollars in millions)
2022
2021
$56,902
$54,968
$4,640
$6,405
$6,590
$9,533
$6.28
$8.38
$6.25
$8.98
$7,486
$7,069
$5,663
$5,568
Cash Provided by Operating
Activities     Continuing Operations2
(dollars in millions)
$56,902
2022
$54,968
2021
$38,542
2020
$6,590
2022
$9,533
2021
2020
$7,486
2022
$2,715
$7,069
2021
$6,252
2020
2022 Shareholder Remuneration
2022 Sales by Operating Segment
2022 Sales by Geography
(dollars in millions)
(dollars in millions)
(dollars in millions)
Dividends
$2,006
$29,260
$4,331
Share
Buyback
Packaging
& Specialty
Plastics
$10,764
$10,344
Performance
Materials &
Coatings
Asia Paci   c
$56,902
Corporate: $272
Europe, Middle
East, Africa
and India
$56,902
$16,606
$2,325
$19,631
Industrial
Intermediates &
Infrastructure
$20,945
U.S. & Canada
$5,982
Latin America
1
Non-GAAP measure. For de   nitions 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    nancial de   nitions.
2
Excluding a $1 billion voluntary pension contribution, 2021 cash    ow from operations would be $8,069 million and free cash    ow 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    nancial performance,    nancial 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.
2

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.
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.
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.
Non-GAAP measure. See the Appendix for de   nitions 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-carbon emissions    and    carbon neutrality    refer to Scope 1, 2 and 3 carbon emissions, including offsets from product
bene   ts and technology advancements.
5
   Net-zero carbon    refers to Scope 1 and 2 carbon dioxide emissions, including offsets from technology advancements.
2022 Financial Highlights
Increased net sales
by nearly
Delivered
operating EBIT1 of
$2B
$6.6B
year-over-year
3
Generated
Returned
$7.5B
$4.3B
in cash flow from
operations
to shareholders through
dividends and share buybacks

2022 | Dow Annual Report
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 lowcarbon 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
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,
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.
Jim Fitterling
Chairman and Chief Executive Officer
Dow Inc.
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
across the cycle
cash flow conversion
of operating EBITDA1
4



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