On this page of StockholderLetter.com we present the 3/1/2024 shareholder letter from DOW INC. — ticker symbol DOW. Reading current and past DOW letters to shareholders can bring important insights into the investment thesis.

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DOW 3/1/2024 Shareholder/Stockholder Letter Transcript:

2023
ANNUAL REPORT

Delivering a
Sustainable Future
For more than 125 years, Dow has been pursuing solutions for
the world   s toughest challenges by asking the right questions.
Together, our purpose and ambition drive us to improve
the sustainability and circularity of the markets we serve,
positively contribute to the development and wellness of our
communities, and embrace and cultivate an inclusive, diverse,
equitable and accountable culture.
We believe materials science drives innovation, and Dow   s
innovation is built on creativity and collaboration     enabling us
to create solutions that transform our world and deliver a more
sustainable future.
Ambition
To be the most innovative, customer-centric,
inclusive and sustainable materials science
company in the world.
Values
Integrity
Purpose
To deliver a sustainable future for the world
through our materials science expertise and
collaboration with our partners.
Goal
Value growth and best-in-class performance.
1
Respect
for People
Protecting
Our Planet

Financial Highlights
In millions, except per share amounts
Net Sales
2023
2022
2021
$44,622
$56,902
$54,968
$660
$4,640
$6,405
$2,778
$6,590
$9,533
$0.82
$6.28
$8.38
$2.24
$6.25
$8.98
$5,164
$7,486
$7,069
$2,808
$5,663
$5,568
Net Income
1
Operating EBIT
Earnings per Common Share     Diluted
1
Operating EPS
Cash Provided by Operating Activities     Continuing Operations
1
Free Cash Flow
Net Sales
Operating EBIT1
(dollars in millions)
(dollars in millions)
Cash Provided by Operating
Activities     Continuing Operations
(dollars in millions)
$44,622
2023
$56,902
2022
$54,968
2021
2023
$2,778
$6,590
2022
$5,164
2023
$9,533
2021
$7,486
2022
$7,069
2021
2023 Shareholder Remuneration
2023 Sales by Operating Segment
2023 Sales by Geography
(dollars in millions)
(dollars in millions)
(dollars in millions)
$8,497
Dividends
Performance
Materials &
Coatings
$1,972
$23,149
$2,597
Share
Buyback
Packaging
& Specialty
Plastics
Corporate: $438
1
Europe, Middle
East, Africa
and India
Asia Paci   c
$44,622
$44,622
$12,538
$625
$14,537
$8,266
Industrial
Intermediates &
Infrastructure
$16,640
U.S. & Canada
$5,179
Latin America
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.
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.
2023 | Dow Annual Report
2

Foundational to our success is the
strength of our people and our culture,
with a deep commitment to safety and
wellbeing, delivering for our customers
and fostering a culture of equity,
inclusion and continuous learning.
Dear Stakeholders,
Over the course of our long history, Dow has remained steadfast in our commitment to differentiated innovation for our customers, a strong
culture of diversity, equity and inclusion, and safe and reliable operations. We achieve this through accountability and disciplined execution.
In 2023, Team Dow once again rose to the occasion, executing with discipline and progressing our Decarbonize & Grow and Transform the
Waste strategies, while continuing to advance our ambition to be the most innovative, customer-centric, inclusive and sustainable materials
science company in the world.
EXECUTING WITH FINANCIAL AND OPERATIONAL
DISCIPLINE
In the face of continued challenging global macroeconomic
activity, we executed with discipline. We leveraged our competitive
strengths to manage costs and adapt the business to evolving
market and geopolitical conditions and customer needs.
In 2023, our diverse, global portfolio, leading cost positions across
key value chains and cost-advantaged assets positioned us well
to navigate the bottom of the economic cycle. We completed our
$1 billion in targeted cost savings in the year. As a result of our
intentional actions, we delivered net sales of $44.6 billion, net
income of $660 million, GAAP earnings per share of $0.82 and
operating EBIT of $2.8 billion.
With a continued focus on cash generation, we implemented
actions to improve working capital and delivered cash flow from
operations of $5.2 billion and free cash flow of $2.8 billion, which
resulted in cash flow conversion1 of 96% of operating EBITDA on a
trailing 12-month basis.
Our cash flow profile, combined with a strong balance sheet,
provides significant financial flexibility as we execute on our capital
allocation priorities to allow us to capture growth across the
economic cycle:
1
Non-GAAP measure     see the Appendix for a full list of    nancial de   nitions.
3
    CapEx was $2.4 billion and operating return on invested capital
(ROIC)1 was 6.4% as we maintained our focus on safe and
reliable operations, while investing in our Decarbonize & Grow
and Transform the Waste strategies.
    Our balance sheet is the strongest it   s been in 40 years,
supported by strong investment-grade credit ratings with no
substantive debt maturities due until 2027.
    We also took additional derisking actions to reduce pension
liabilities, including annuitization and risk transfer of some
pension liabilities.
    In 2023, we returned $2.6 billion to shareholders. This included
$2 billion in dividends and $625 million in shares repurchases.
Since Spin, we have returned approximately 90% of our
cumulative operating net income1 to shareholders, well above our
65% target across the economic cycle.
ADVANCING OUR STRATEGIES TO DECARBONIZE
& GROW AND TRANSFORM THE WASTE
In 2023, we continued to make progress on our Decarbonize &
Grow and Transform the Waste strategies, which by 2030 position
us to deliver more than $3 billion in underlying earnings and
commercialize 3 million metric tons of circular and renewable
solutions annually, while reducing Scope 1 and 2 greenhouse
gas (GHG) emissions by 5 million metric tons.

Decarbonize & Grow
During the year, we continued to progress our near-term growth investments across our
operating segments, which will deliver $400-$500 million in underlying EBITDA, with the goal
of achieving a cumulative $2 billion EBITDA earnings improvement by mid-decade.
    We started operation of our FCDh unit in Plaquemine, Louisiana. Leveraging breakthrough
technology, the unit expands our capacity at lower capital and cost intensity while
reducing energy usage and GHG emissions relative to conventional PDH units.
    We achieved the start-up of a new MDI distillation and pre-polymers facility at our
manufacturing site in Freeport, Texas. The new facility replaces our existing capacity in
La Porte, Texas, and expands supply by an additional 30% at the site to support highvalue demand growth in polyurethane systems while also reducing our GHG emissions by
more than 45% compared to the La Porte asset.
We also achieved a significant milestone for our Fort Saskatchewan Path2Zero project
in Canada with our Board of Directors approving a final investment decision in the fourth
quarter. Partner agreements and subsidies are secured, and construction is on track to begin
next year.
2023
Financial
Highlights
Net sales of
$44.6B
The facility will decarbonize 20% of our global ethylene capacity while growing polyethylene
supply by 15%. Building off the success of our Texas-9 cracker, which has generated
15% ROIC since start-up, we expect bottom-line returns equal to or greater than these
levels, generating more than $1 billion of incremental EBITDA over the cycle by 2030.
Transform the Waste
Through collaboration and our capital-efficient approach, we are leveraging a robust pipeline
of strategic partnerships across the value chain to enable waste management transformation
through mechanical recycling, advanced recycling and bio-based solutions, which will also
allow us to become a major off-taker of circular feedstocks.
Delivered
operating EBIT of
$2.8B
We achieved key milestones, including the mechanical completion of the Valoregen and Mura
recycling facilities in the fourth quarter.
    Valogren   s 15 kiloton per annum (KTA) mechanical recycling plant in France is expected to
process up to 70 KTA of plastic waste by 2025. Dow will be the primary off-taker of postconsumer recycled material to support our REVOLOOP    brand, which serves high-end
technical packaging applications.
    The start-up of Mura   s first-of-its-kind 20 KTA advanced recycling plant in the U.K. is the
first step of our longer-term plans to launch up to 600 KTA of global capacity by 2030.
With demand for circular materials expected to well exceed supply through the end of
the decade, we anticipate our differentiated approach and partnership with innovative
technologies will result in more than $500 million in incremental earnings by 2030 as we
commercialize 3 million metric tons of circular and renewable solutions annually.
Generated
$5.2B
in cash flow from
operations
ADVANCING A CULTURE OF SAFETY, WELLBEING AND INCLUSION
Returned
Foundational to our success is the strength of our people and our culture, with a deep
commitment to safety and wellbeing, delivering for our customers and fostering a culture of
equity, inclusion and continuous learning.
$2.6B
I   m proud that we continue to be recognized externally as a leader in inclusion, diversity and
equity, including advancing to #7 on the DiversityInc Top 50 Companies for Diversity list, and
in the fourth quarter we were named by Great Place to Work   and FORTUNE as one of the
World   s Best Workplaces    in 2023.
I would like to thank Team Dow for their passion, discipline and commitment to delivering for
one another, our customers, partners, communities and shareholders. It is because of each
Dow colleague that I remain confident in our strategy to deliver a sustainable future for the
world through our materials science expertise while also driving long-term shareholder value.
Best regards,
to shareholders
through dividends
and share buybacks
Achieved
96%
cash flow conversion
of operating EBITDA
Jim Fitterling
Chair and Chief Executive Officer, Dow Inc.
2023 | Dow Annual Report
4



 3/1/2024 Letter Continued (Full PDF)