Dow(DOW) - 2025 Q1 - Quarterly Report

Financial Performance - The company reported net sales of $10.4 billion in Q1 2025, down 3$10.8 billion in Q1 2024, with declines across all operating segments [154]. - Cash provided by operating activities was $104 million in Q1 2025, down$356 million compared to Q1 2024 [156]. - The company recorded a net loss of $307 million in Q1 2025, compared to a net income of$516 million in Q1 2024 [154]. - TDCC experienced a net loss of $305 million in Q1 2025, down from a net income of$521 million in Q1 2024 [170]. - Operating EBITDA for the first three months of 2025 was $944 million, down from$1,394 million in the same period of 2024, indicating a significant decline in earnings [196]. - Free Cash Flow for the first three months of 2025 was $(254) million, compared to$(581) million in the same period of 2024, with cash provided by operating activities decreasing from $460 million to$104 million [196]. Sales and Revenue Breakdown - Volume increased by 2% compared to Q1 2024, driven by a 5% increase in the U.S. & Canada, while local prices decreased by 3% across all segments [157]. - Packaging & Specialty Plastics net sales decreased by 2% to $5,310 million in Q1 2025, down from$5,430 million in Q1 2024, with local prices down 4% [174]. - Industrial Intermediates & Infrastructure net sales declined by 5% to $2,855 million in Q1 2025, down from$3,008 million in Q1 2024 [176]. - Performance Materials & Coatings net sales decreased by 4% to $2,071 million in Q1 2025, compared to$2,152 million in Q1 2024 [179]. Cost Management and Restructuring - The company announced targeted cost actions to reduce structural costs by $1 billion over the next two years, including a workforce reduction of approximately 1,500 roles [149]. - Restructuring charges in Q1 2025 amounted to$208 million, primarily related to severance and benefits costs [162]. - The 2025 Restructuring Program is expected to incur additional cash expenditures of $207 million through the end of 2026, primarily for severance and related benefits costs [222]. - The company expects to incur additional costs related to restructuring activities, which cannot be reasonably estimated at this time [224]. Capital Expenditures and Investments - Capital expenditures for 2025 are now expected to be$2.5 billion, down from the original plan of $3.5 billion, due to the delay of the Path2Zero project [150]. - Capital expenditures for the first three months of 2025 were$685 million, a decrease from $714 million in the same period of 2024, with full-year capital spending expected to be approximately$2.5 billion [190]. Debt and Liquidity - The Company maintained cash and committed liquidity of $11.2 billion as of March 31, 2025, with no substantive long-term debt maturities due until 2027 [199]. - Total gross debt as of March 31, 2025, was$16.57 billion, with net debt at $14.77 billion, representing 46.1$1 billion of senior unsecured notes, which included $943 million in debt securities tendered and retired, resulting in a pretax loss of$60 million [213]. Shareholder Returns - Dow Inc. declared and paid dividends of $0.70 per share on February 13, 2025, and April 10, 2025, aligning with its strategy to return approximately 45$515 million to Dow Inc. for the three months ended March 31, 2025, compared to $698 million for the same period in 2024 [217]. - The company aims for total shareholder remuneration of approximately 65$931 million remains available for share repurchases under the $3 billion program approved in April 2022 [218]. Other Financial Metrics - Cost of sales increased to$9.8 billion in Q1 2025, representing 93.6% of net sales, up from 88.1% in Q1 2024 [158]. - Research and development expenses totaled $200 million in Q1 2025, a slight decrease from$204 million in Q1 2024 [159]. - Cash Flow Conversion from operations to Operating EBITDA was 11.0% for the first three months of 2025, compared to 33.0% in the same period of 2024, reflecting reduced efficiency in converting earnings into cash flow [196]. - The Company generated $100 million in sales of receivables under its U.S. and Europe committed accounts receivable facilities in the first three months of 2025 [203]. - The Company has monetized$200 million of its company-owned life insurance policies as of March 31, 2025, compared to zero at December 31, 2024 [208]. Legal and Regulatory Matters - As of March 31, 2025, there were 6,082 unresolved asbestos-related claims against Union Carbide, a decrease from 6,278 claims in 2024 [231]. - The company anticipates pension settlement charges related to the termination of certain U.S. tax-qualified pension plans, with final asset distributions expected in Q4 2025 [220]. - Contractual obligations as of March 31, 2025, total $37.791 billion, including expected cash requirements for interest of$13.266 billion and purchase obligations of $24.525 billion [226].