Q3 2025 Dow Inc Earnings Call

We are in a listen only mode. A brief question and answer session will follow the formal presentation.

If he would like to ask a question at that time. Please press star followed by one on your telephone keypad.

And as a reminder, this conference is being recorded I will now turn it over to Dow Investor Relations Vice President Andrew Reicher, Mr. Reicher, you may begin.

Good morning, Thank you for joining today.

And slides are provided through this webcast and posted on our website.

I'm, Andrew Reicher, Dow's Investor Relations Vice President, leading today's call are Jim federally Chair and Chief Executive Officer, Karen <unk> Carter, Chief operating Officer, and Jeff Tate Chief Financial Officer. Please note our comments contain forward looking statements and are subject to the related cautionary statements contained in the earnings news release and slides. Please.

Refer to our public filings for further information about principal risks and uncertainties.

Unless otherwise specified all financials, where applicable exclude significant items.

We'll also refer to non-GAAP measures a reconciliation of the most directly comparable GAAP financial measure and other associated disclosures are contained in the earnings news release is posted on our website.

On slide two is our agenda for today's call Jimmy.

Jim and Karen will review our results and discuss how we are navigating current market conditions to restore our core earnings and will also provide an overview of our operating segment performance.

Jeff will share an update on our in flight actions to provide near term cash support as well as some details on the macroeconomic environment and our modeling guidance for the fourth quarter Jim.

Jim and Karen will close the prepared remarks with Dow's view on current industry actions, while demonstrating how Dow is well positioned to win in a recovery. Following that we will take your questions now let me turn the call over to Jim.

Thank you Andrew beginning on slide three in the third quarter, we executed against our strategic priorities to deliver sequential earnings and cash flow improvement despite continued pressure across the industry.

These results reflect our focus on navigating the near term while positioning the company for profitable growth in our industry recovers.

In the third quarter, we delivered net sales of $10 billion.

<unk> gains in our industrial intermediates <unk> infrastructure segment were more than offset by declines in packaging and specialty plastics and performance materials and coatings.

EBITDA was $868 million and while this is lower than the same period last year, our earnings reflect an improvement over second quarter. This was driven by volume gains stemming from our new growth investments in the U S Gulf Coast.

Planned maintenance activity and the progress, we're making on our cost reduction actions.

Cash provided by operating activities was up $1 $6 billion sequentially, primarily driven by working capital improvements and advanced payments for low carbon solutions and other long term supply agreements. We also delivered $249 million of dividends, reflecting our commitment to competitive shareholder.

<unk> returns over the cycle.

Nextera and we will provide some additional context around the more than $6 5 billion and actions that we have completed or currently have in flight.

Thank you Jim we.

We advanced several strategic actions in the third quarter.

We announced an expansion of our strategic agreement with any global to formalize the contractual offtake of an additional 100 kt of ethylene supply at attractive economics for both parties.

We closed the second and final phase of our strategic infrastructure assets partnership in the U S Gulf Coast delivering $3 billion in total proceeds for <unk> This year.

We completed the second of two previously announced noncore divestitures, delivering a total of approximately $250 million.

<unk> EBITDA multiples of around <unk>.

And we issued an additional $1 4 billion dollar bonds to take advantage of tight credit spreads providing added financial flexibility.

We are progressing the delivery of at least $1 billion in targeted cost savings by the end of 2026.

We are on track to deliver approximately $400 million of the <unk>.

Savings this year, which was clearly visible in our third quarter performance.

We have also lowered our capex spending and alignment with our $1 billion reduction target this year compared to our original plan of $3 $5 billion.

The reduction is largely due to our decision to delay the Alberta projects until market conditions improve.

As we announced in April this decision supports our near term cash flow and adjust our timing to align with the market recovery.

We remain committed to the long term strategic rationale of the upward of project, which further improves our industry, leading cost position and the growth upside that it will enable and targeted applications like pressure pipe wire and cable and food packaging.

However, our expectations for when this capacity will be needed have changed given the prolonged down cycle our industry is facing.

As we committed we will provide an update on this during our fourth quarter earnings call in January.

The decisions related to the project timeline will remain centered on maximizing value.

So taken altogether these new.

Near term strategic actions, demonstrating <unk> continued efforts to adjust our cost structure in response to the current operating environment.

Actions also support our overarching goal to build a more simplified modern dow that consistently delivers strong performance profitable growth and lasting competitiveness.

Next I'll turn to our operating segment performance on slide four.

In the third quarter, we continued to focus on margin improvement, while prioritizing volume growth in attractive end markets, such as food packaging electronics healthcare and pharma.

Also took decisive actions to lower our cost base and progressed our cost savings actions.

So starting with the results for our packaging and specialty plastics segment.

Net sales were down compared to the year ago period.

Higher demand for flexible packaging applications was more than offset by lower downstream polymer prices lower merchant olefin sales and lower licensing revenue.

Sequentially net sales decline driven by lower prices for downstream polymers and all of that.

Volume decreased 1% year over year and 2% sequentially.

Notably the polyethylene volumes increased in both comparison periods, particularly in flexible packaging applications and as a result of our new polyethylene unit in the U S Gulf Coast.

These items were more than offset by lower olefins volumes in Europe. Following our earlier decision to idle one of our crackers inter knew that.

Operating EBIT was $199 million, reflecting a decrease compared to the year ago period.

This was primarily driven by lower integrated margins.

Operating EBIT increased sequentially due to higher integrated margins and operating rates lower fixed costs from our cost reduction actions and the benefit of the startup of our new polyethylene unit in the U S Gulf Coast, which is helping Dow to realize the full benefit of our integration.

Next turning to our industrial intermediates and infrastructure segment on slide five.

Net sales were down 4% year over year, driven by continued pricing pressures globally.

Hosting and an 8% impact on revenue.

Sequentially net sales increased reflecting volume gains in both businesses in all regions.

This was supported by lower planned maintenance activity and the startup of one of our near term growth projects, which partly offset lower prices.

Volume increased 2% compared to the year ago period, driven by gains in the U S and Canada in both businesses as well as in energy applications.

Sequentially volume increased 5% with improved supply availability following planned maintenance activities in both businesses.

As well as additional volumes from our new our constellation unit in Seadrift, Texas.

Karen S. Carter: Sales increased, reflecting volume gain in both businesses and all regions. This was supported by lower planned maintenance activity and the startup of one of our near-term growth projects, which partly offset lower prices. Volume increased 2% compared to the year-ago period, driven by gains in the U.S. and Canada in both businesses, as well as in energy applications. Sequentially, volume increased 5%, with improved supply availability following planned maintenance activities in both businesses, as well as additional volumes from our new Alcoxylation unit in Cedariff, Texas. Operating EBIT for the segment increased versus the year-ago period, driven by higher volumes and operating rates, as well as lower fixed costs, which were partly offset by lower prices. Sequentially, operating EBIT increased by $138 million. This was driven by lower planned maintenance activity and higher volumes in both businesses.

Operating EBIT for the segment increased versus a year ago period, driven by higher volumes and operating rates as well as lower fixed costs, which were partly offset by lower prices.

Sequentially operating EBIT increased by $138 million.

This was driven by lower planned maintenance activity and higher volume in both businesses.

This volume growth was enabled by the startup of our new constellation units in the U S Gulf Coast.

It's more of a zoning at home and personal care end markets.

Quenchy volume increased 5% with improved Supply availability. Following planed maintenance activities in both businesses as well as additional volumes from our new alox, Texas.

Moving to the performance materials and coatings segment on slide six.

Net sales in the quarter were $2 $1 billion down 6% versus the year ago period, and 2% sequentially driven by pricing pressures on the upstream areas of the segment.

Operating ebit for the segment increased versus a year ago, period driven by higher volumes and operating rates as well as lower fixed costs which were partly offset by lower prices.

And the third corner architectural coatings experienced normal seasonal pattern, but downstream silicones remain a bright spot both compared to the year ago period, and prior quarter, particularly in high value applications, such as home care and electronics.

Sequentially, operating income increased by $138 million.

This was driven by lower plan maintenance activity and higher volumes in both businesses.

Karen S. Carter: This volume growth was enabled by the startup of our new Alcoxylation unit in the U.S. Gulf Coast, which serves more resilient home and personal care markets. Moving to the performance materials and coatings segment on slide six. Net sales in the quarter were $2.1 billion, down 6% versus the year-ago period and 2% sequentially, driven by pricing pressures on the upstream areas of the segment. In the third quarter, architectural coatings experienced normal seasonal patterns, but downstream silicones remained a bright spot, both compared to the year-ago period and prior quarter, particularly in high-value applications such as home care and electronics. Operating EBIT decreased both year over year and sequentially, driven by upstream margin compression, partly offset by lower fixed costs from our cost reduction actions.

Operating EBIT decreased both year over year and sequentially driven by upstream margin compression.

This volume growth was enabled by the startup of our new Alto unit and the US Gulf Coast, which serves more resilient home and personal care in markets.

We offset by lower fixed costs from our cost reduction actions.

Moving to the performance materials and coding segments on slide 6.

To conclude team that was focused on continuing to take actions to help navigate the challenges our industry is facing while driving a streamlined more modern and more simplified enterprise.

Net sales in the quarter were 2.1 billion dollars down 6% versus a year ago period and 2% sequentially driven by pricing pressures on the Upstream areas of the segment.

We are protecting and growing our position in high value markets. While also realizing the benefit from our targeted and accelerated actions to deliver at least $1 billion in cost savings by 2026.

In the third quarter, architectural coatings experienced normal seasonal patterns, but downstream silicones remained a bright spot.

Both compared to the year ago period and prior quarter particularly in high-value applications such as home care and electronics.

We also continue to optimize our global manufacturing footprint.

Evidence last quarter, when we announced the outcome of our strategic review in Europe, resulting in the shutdown of three upstream assets in the region.

Operating ebit decreased both year-over-year and sequentially driven by Upstream margin compression. Partly offset by lower fixed costs. From our cost reduction actions.

Karen S. Carter: To conclude, Team DOW is focused on continuing to take actions to help navigate the challenges our industry is facing while driving a streamlined, more modern, and more simplified enterprise. We are protecting and growing our positions in high-value markets while also realizing the benefits from our targeted and accelerated actions to deliver at least $1 billion in cost savings by 2026. We also continue to optimize our global manufacturing footprint, as evidenced last quarter when we announced the outcome of our strategic review in Europe, resulting in the shutdown of three upstream assets in the region. I will now turn the call over to Jeff, who will share more on the actions we are taking to ensure DOW's financial flexibility, as well as some macro-economic insights and our outlook for the fourth quarter.

I will now turn the call over to Jeff who will share more on the actions we are taking to ensure Dallas financial flexibility as well as some macroeconomic insights and our outlook for the fourth quarter.

To conclude, Team Dow was focused on continuing to take action to help navigate the challenges our industry is facing while driving a streamlined, more modern, and more simplified enterprise.

Thank you Karen good morning to everyone participating in today's call turning to slide seven.

Continued to advance several strategic priorities to support our near term cash flow further enhance our balance sheet and deliver structural improvements.

We are protecting and growing our positions and high-value markets. While also realizing the benefits from our targeted and accelerated actions to deliver at least 1 billion dollars in cost savings by 2026.

This positions the company for growth and better profitability in the recovery.

For example, this quarter, we completed the second phase of our strategic partnership with Macquarie for the sale of a 49% equity stake in select U S Gulf coast infrastructure assets.

We also continue to optimize our Global manufacturing footprint as evident last quarter, when we announced the outcome of our strategic review. In Europe, resulting in the shutdown of 3 Upstream Assets in the region.

<unk> approximately $3 billion in total cash proceeds this year.

I will now turn the call over to Jeff who will share more on the actions. We are taking to ensure Dow's Financial flexibility as well as some macroeconomic insights and our outlook for the fourth quarter.

Jeffrey Tate: Thank you, Karen. Good morning to everyone participating in today's call. Turning to slide seven, we continue to advance several strategic priorities to support Dow Inc.'s near-term cash flow, further enhance our balance sheet, and deliver structural improvements. This positions the company for growth and better profitability in the recovery. For example, this quarter we completed the second phase of our strategic partnership with Macquarie for the sale of a 49% equity stake in select U.S. Gulf Coast infrastructure assets, receiving approximately $3 billion in total cash proceeds this year. We're making solid progress on several additional actions that support our near-term cash generation. This includes optimizing working capital, which we expect to be an approximately $200 to $300 million release of cash in the second half of the year compared to the first half.

And we're making solid progress on several additional actions that support our near term cash generation.

Thank you, Karen. Good morning to everyone participating in today's call turning to slide 7

This includes optimizing working capital, which we expect to be in approximately $200 million to $300 million release of cash in the second half of the year compared to the first half.

In addition to these items, we have completed two bond issuances at attractive spread for a total of $2 $4 billion. This year.

We continue to advance several strategic priorities to support those near-term. Cash flow further. Enhance our balance sheet and deliver structural improvements, this positions, the companies for growth and better profitability in the recovery.

Doing so provides added flexibility and support while maintaining our commitment to investment grade credit profile.

And it extends our material debt maturities out to 2029.

For example, this quarter we completed the second phase of our strategic partnership with McQuarrie for the sale of a 49% equity stake and select us Gulf Coast. Infrastructure assets, receiving approximately 3 billion dollars and total cash proceeds this year.

As of the end of the third quarter, our cash and cash equivalent balance is above $4 5 billion.

And we're making solid progress on several additional actions that support our near-term cash generation.

We have an additional approximately $10 billion of available liquidity.

<unk> revolving credit facility that we recently renewed through 2030.

Jeffrey Tate: In addition to these items, we've completed two bond issuances at attractive spreads for a total of $2.4 billion this year. Doing so provides added flexibility and support while maintaining our commitment to investment-grade credit profile. It extends our material debt maturities out to 2029. As of the end of the third quarter, our cash and cash equivalents balance is above $4.5 billion. We have an additional approximately $10 billion of available liquidity, including a revolving credit facility that we recently renewed through 2030. With all these actions, we're building on our long history of navigating the cycles our industry faces. As we've demonstrated in the past, we will continue to take additional actions when and where warranted. With that, I'll share some of the key indicators we're continuing to track on slide eight. The broader macroeconomic landscape remains largely unchanged since our last update.

This includes optimizing working capital, which we expect to be an approximately 200 to 300 million release of cash and the second half of the year, compared to the first half.

With all of these actions we are building on our long history of navigating the cycles our industry faces.

In addition to these items, we've completed 2 Bond edition, with this at attractive, spread for a total of 2.4 billion this year.

We've demonstrated in the past, we will continue to take additional actions when and where warranted.

With that I'll share some of the key indicators were continuing to track on slide eight.

Doing so provides added flexibility and support while maintaining our commitment to an investment grade credit profile.

And it extends our material debt maturities out to 2029.

The broader macroeconomic landscape remains largely unchanged since our last update.

As it relates to Dallas key market verticals, while we are seeing some pockets of stability a broader recovery to take hold.

As of the end of the third quarter, our cash and cash equivalents balance is above 4.5 billion.

Based on the visibility we have from current customer orders, we continue to see a cautious operating environment.

We have an additional approximately 10 billion dollars of available liquidity. Including a revolving credit facility that we recently renewed through 2030.

Business investment and consumer spending are subdued due to ongoing economic uncertainty and affordability challenges.

With all these actions we're building on our long history of navigating the Cycles, our industry faces.

These dynamics are impacting demand across several key end markets served.

As we've demonstrated in the past, we will continue to take additional actions when and where warranted.

At the same time recent monetary policy shifts and the beginning of a rate cutting cycle third began to more positively influence demand.

With that. I'll share some of the key indicators. We're continuing to track on slide 8.

Jeffrey Tate: As it relates to Dow Inc.'s key market verticals, while we are seeing some pockets of stability, a broader recovery has yet to take hold. Based on the visibility we have through current customer orders, we continue to see a cautious operating environment. Business investment and consumer spending are subdued due to ongoing economic uncertainty and affordability challenges. These dynamics are impacting demand across several key end markets Dow Inc. serves. At the same time, recent monetary policy shifts and the beginning of a rate-cutting cycle could begin to more positively influence demand. In our packaging market vertical, global demand remains steady. Industry growth in North America was supported by record September domestic and export volumes. Manufacturing activity in China continues to be modest, while Europe contracted in September. In the infrastructure sector, market conditions remain soft across the U.S., Europe, and China.

Li unchanged since our last update.

And our packaging market vertical global demand remains steady.

Industry growth in North America was supported by record September domestic and export volumes.

As it relates to Dallas' key market verticals, while we are seeing some pockets of stability, a broader recovery has yet to take hold.

Manufacturing activity in China continues to be modest while Europe contracted in September.

Based on the visibility, we have through current customer orders, we continue to see a cautious operating environment.

The infrastructure sector market conditions remained soft across the United States Europe and China.

Business investment and consumer spending are subdued due to ongoing economic uncertainty and affordability challenges.

In the U S 30 year mortgage rates have eased modestly but remain above 6% this month.

These dynamics are impacting the demand across several key markets. Now, let's discuss how this serves.

Demand is unlikely to increase in the near term due to limited affordability, but lower mortgage rates could spur a recovery in 2026 as conditions improve.

at the same time, recent monetary policy shifts and the beginning of a rate cutting cycle, could begin to more positively influence demand.

And in our packaging market vertical, global demand remains steady.

Consumer spending has remained resilient.

Industry growth in North America was supported by record September domestic and export volumes.

But with that confidence is low.

It's been driving value seeking behaviors.

In September U S consumer confidence declines was lowest levels since April and sentiment in the EU remains below historical averages.

Manufacturing activity in China continues to be modest while Europe, contracted in September.

Jeffrey Tate: In the U.S., 30-year mortgage rates have eased modestly but remain above 6% this month. Demand is unlikely to increase in the near term due to limited affordability, but lower mortgage rates could spur a recovery in 2026 as conditions improve. Consumer spending has remained resilient, but with that, confidence is low, which has been driving value-seeking behaviors. In September, U.S. consumer confidence declined to its lowest level since April, and sentiment in the EU remains below historical averages. In China, retail sales grew year over year in August, but at its slowest pace since last November. In mobility, we continue to see mixed demand signals across the industry and regions. In the U.S., auto sales rose in August as consumers moved ahead of the EV tax credit expiration. In China, government incentives for EVs also continue to support higher auto sales and production.

And the infrastructure sector market conditions, remain soft across the United States Europe and China.

And China retail sales grew year over year in August, but at its slowest pace since last November.

And the US, 30-year mortgage rates have eased modestly but remain above 6% this month.

And then mobility, we continue to see mixed demand signals across the industry and regions.

In the U S auto sales roles in August as consumers moved ahead of the <unk> tax credit exploration.

Demand is unlikely to increase in the near term due to limited affordability, but lower mortgage rates could for a recovery in 2026 as conditions improved.

Consumer spending has remained resilient.

And then China government incentives for Evs also continued to support higher auto sales and production.

But with that confidence is low.

Which has been driving value seeking behaviors.

This strength helped offset weakness in internal combustion vehicles, including in Europe, where new car registrations are down year to date.

In September us consumer confidence declined to its lowest level since April and sentiment in the EU remains below average.

Given this backdrop, we will continue to focus on the actions within our control.

China's retail sales grew year-over-year in August, but at its slowest pace since last November.

Doing so helps out to navigate the complexities of this down cycle, while strategically positioning the company to capitalize when the market conditions do improve.

and in Mobility, we continue to see mixed demand signals across the industry and regions.

Next I'll turn to our outlook for the fourth quarter on slide nine.

In the U.S. auto sales roles in August, as consumers moved ahead of the EV tax credit expiration.

The macroeconomic dynamics that I described continue to limit visibility into customer buying patterns, making projections challenging.

And in China, government incentives for EVs continue to support higher auto sales and production.

Jeffrey Tate: This strength has helped offset weakness in internal combustion vehicles, including in Europe, where new car registrations are down year to date. Given this backdrop, we will continue to focus on the actions within our control. Doing so helps Dow Inc. to navigate the complexities of this down cycle while strategically positioning the company to capitalize when the market conditions do improve. Next, I'll turn to our outlook for the fourth quarter on slide nine. The macroeconomic dynamics that I described continue to limit visibility into customer buying patterns, making projections challenging. As always, we're committed to maintaining transparency and will provide timely updates if they become available. Based on current indicators and normal seasonality, we anticipate our fourth quarter EBITDA to be approximately $725 million. Our discipline and targeted cost actions and lower planned maintenance activities are expected to provide sequential tailwinds.

As always we're committed to maintaining transparency and will provide timely updates if they become available.

This strength has helped offset weakness and internal combustion Vehicles including in Europe where new car registrations are down year to date.

Based on current indicators and normal seasonality, we anticipate our fourth quarter EBITDA to be approximately $725 million.

Given this backdrop, we will continue to focus on the actions within our control.

Our disciplined and targeted cost actions and lower plant maintenance activities are expected to provide sequential tailwind.

doing so helped out to navigate the complexities of this down cycle while strategically positioning the company to capitalize, when the market conditions do improve,

Next, I'll turn to our outlook for the fourth quarter on slide 9.

Normal seasonality, especially in building and construction end markets should be a headwind for our performance materials and coatings and industrial intermediates <unk> infrastructure segments.

the macroeconomic Dynamics that I described continue to limit visibility into customer buying patterns, making projections challenging

Additionally, we anticipate some margin compression from our feedstock costs in the fourth quarter.

As always, we're committed to maintaining transparency and will provide timely updates if they become available.

In packaging and specialty plastics lower plant maintenance in the U S Gulf Coast, and Europe will provide a $25 million sequential tailwind.

based on current indicators and normal seasonality, we anticipate our fourth quarter, ibida, to be approximately 725 million,

Along with another approximately $25 million and support from our cost reduction actions.

Higher feedstock and energy costs are expected to be a headwind for the fourth quarter, despite anticipating higher downstream volumes.

Our discipline and targeted cost actions and lower plan. Maintenance activities are expected to provide sequential Tailwind.

Jeffrey Tate: Normal seasonality, especially in building and construction markets, should be a headwind for our performance materials and coatings and industrial intermediates and infrastructure segments. Additionally, we anticipate some margin compression from our feedstock costs in the fourth quarter. In Packaging and Specialty Plastics, lower planned maintenance in the U.S. Gulf Coast and Europe will provide a $25 million sequential tailwind, along with another approximately $25 million in support from our cost reduction actions. Higher feedstock and energy costs are expected to be a headwind for the fourth quarter, despite anticipating higher downstream volumes. Globally, we expect approximately $0.01 per pound of margin contraction in the quarter. This will be partly offset by higher equity earnings following an unplanned outage at Sadara in July, as the impacted asset is now back up and running.

Globally, we expect approximately one per pound of margin contraction in the quarter.

Normaly is anality, especially in building and construction and markets should be a headwind for our performance, materials and Coatings and Industrial intermediates and infrastructure segments.

This will be partly offset by higher equity earnings following an unplanned outage at the Dara in July at the impacted asset is now back up and running.

Additionally, we anticipate some margin compression from our feed stock costs in the fourth quarter.

Additionally, following a fire at our polysilicon polyethylene unit in Texas. This month, we anticipate a $25 million unfavorable impact for the fourth quarter.

And packaging and specialty plastics lower plant maintenance in the U.S. Gulf Coast and Europe will provide a $25 million sequential tailwind.

Along with another approximately $25 million in support from our cost reduction actions.

Initially the event required us to bring down three polyethylene units at the site.

Two of those units have already resumed operations.

Higher fee, stock and energy costs are expected to be a headwind for the fourth quarter, despite anticipating higher Downstream volumes.

However, we expect the polysilicon will remain offline for the remainder of the year.

Globally, we expect approximately $0.01 per pound of margin contraction in the quarter.

We are leveraging our global flexible asset footprint to mitigate impact and meet our customers' needs.

In industrial intermediates and infrastructure, we expect fourth quarter EBITDA to be approximately $20 million lower than the third quarter.

This will be partly offset by higher equity earnings following an unplanned outage at Sedara in July. The impacted asset is now backed up and running.

Jeffrey Tate: Additionally, following a fire at our PolySix polyethylene unit in Texas this month, we anticipate a $25 million unfavorable impact for the fourth quarter. Initially, the event required us to bring down three polyethylene units at the site. Two of those units have already resumed operations. However, we expect that PolySix will remain offline for the remainder of the year. We are leveraging our global flexible asset footprint to mitigate impacts and meet our customers' needs. In Industrial Intermediates and Infrastructure, we expect fourth quarter EBITDA to be approximately $20 million lower than the third quarter. This is largely driven by seasonally lower demand in building and construction. Additionally, we anticipate margin compression from higher energy costs and pricing pressures. We will see this primarily in Europe, the Middle East, Africa, and India, as Asian exporters redirect volumes into the region from prior U.S.

This is largely driven by seasonally lower demand and building and construction.

Additionally, we anticipate margin compression from higher energy cost and pricing pressures.

Additionally, following a fire at our poly 6, polyethylene unit in Texas this month, we anticipate a 25 million dollar unfavorable impact for the fourth quarter.

Initially the event required us to bring down 3, polyethylene units at the site.

We will see there is primarily in Europe, the Middle East Africa, and India as agent exporters redirect volumes into the region from prior U S locations with those volumes would now be subject to dumping duties.

Two of those units have already resumed operations.

However, we expect that poly. 6 will remain offline for the remainder of the year.

Sequential tailwind are expected to be provided by higher demand for deicing fluids, lower turnaround spending and our cost reduction actions.

Tax and meet our customers needs.

And in performance materials, and coatings, we expect lower sequential EBITDA of approximately $100 million.

An industrial, intermediates and infrastructure. We expect fourth quarter ebida to be approximately 20 million dollars lower than the third quarter.

This is largely driven by seasonally lower demand and building and construction.

Normal seasonally driven decreases in demand for building and construction and infrastructure end markets reflected approximately $100 million headwind in the quarter.

Additionally, we anticipate margin compression from higher energy costs and pricing pressures.

We expect this to be partly offset by continued strength for downstream silicones applications and electronics and home care.

Jeffrey Tate: locations, where those volumes would now be subject to dumping duties. Sequential tailwinds are expected to be provided by higher demand for deicing fluids, lower turnaround spending, and our cost reduction actions. In Performance Materials and Coatings, we expect lower sequential EBITDA of approximately $100 million. Normal seasonally driven decreases in demand for building and construction and infrastructure in markets reflect an approximately $100 million headwind in the quarter. We expect this to be partly offset by continued strength for downstream silicones applications in electronics and home care. The incremental tailwinds from our cost reduction actions will be partly offset by planned maintenance at our Deer Park, Texas site. In summary, as we look ahead, Dow Inc. remains committed to delivering accelerated cost savings actions across the enterprise, as we've demonstrated throughout the year. Doing so will help offset the impact of higher feedstock costs and normal seasonality.

We'll see this primarily in Europe, the Middle East, Africa, and India. Asian exporters will redirect volumes into the region from prior U.S. locations, where those volumes would now be subject to dumping duties.

Finally, the incremental tailwind from our cost reduction actions will be partly offset by planned maintenance at our Deer Park, Texas site.

Sequential Tailwinds are expected to be provided by higher demand for deicing. Fluids lower turnaround spending and our cost reduction actions.

So in summary.

We look ahead Dow remains committed to delivering accelerated cost savings actions across the enterprise as we've demonstrated throughout the year.

And in performance materials and Coatings we expect lower sequential, EBA of approximately 100 million dollars.

Doing so will help offset the impact of higher feedstock costs and normal seasonality.

Normal seasonally driven decreases in demand for building and construction and infrastructure in markets reflecting approximately $100 million headwind in the quarter.

Now I will turn the call back to Jim.

Thank you, Jeff turning to slide 10.

We expect this to be partly offset by continued strength for Downstream silicones, applications and electronics and Home Care.

The prolonged down cycle continues to weigh on our entire industry, but we're starting to see some encouraging actions and response, most notably around addressing industry oversupply spin.

Finally, the incremental tailwind from our cost reduction actions will be partly offset by plant maintenance at our Deer Park, Texas, site.

so, in summary,

Specifically announcements to date include significant rationalization of global ethylene propylene oxide and siloxane capacities each.

As we look ahead, dial remains committed to delivering accelerated cost savings actions across the Enterprise as we've demonstrated throughout the year.

Two of which will benefit <unk> diversified portfolio.

The vast majority of our occurring in Asia, and Europe targeting assets that sit high on the global cost curve.

Doing so will help offset the impact of our feeds stock cost and normal seasonality.

Jeffrey Tate: Now, I'll turn the call back to Jim.

Now, I'll turn the call back to Jim.

Jim Fitterling: Thank you, Jeff. Turning to slide 10, the prolonged down cycle continues to weigh on our entire industry, but we're starting to see some encouraging actions in response, most notably around addressing industry oversupply. Specifically, announcements to date include significant rationalization of global ethylene, propylene oxide, and siloxane capacities, each of which will benefit Dow Inc.'s diversified portfolio. The vast majority are occurring in Asia and Europe, targeting assets that sit high on the global cost curve.

Thank you, Jeff.

This includes Dallas decision to shutdown three European assets across each of our operating segments.

Turning this light 10.

In order to rightsize upstream regional capacity reduced merchant sales exposure and remove higher cost energy intensive parts of our portfolio.

The prolonged down cycle continues to weigh on our entire industry, but we're starting to see some encouraging actions in response, most notably around addressing industry oversupply.

Dow's rationalization announcements and those from industry peers have exceeded the majority of the consultant projections paving the way for improved operating rates, which will also be supported by anticipated polyethylene demand growth remaining above GDP for the foreseeable future.

Specifically announcements to date include significant rationalization of global ethylene propylene, oxide, and Sy capacities. Each of which will benefit Dow's Diversified portfolio.

Jim Fitterling: This includes Dow Inc.'s decision to shut down three European assets across each of our operating segments in order to right-size upstream regional capacity, reduce merchant sale exposure, and remove higher-cost energy-intensive parts of our portfolio. Dow Inc.'s rationalization announcements and those from industry peers have exceeded the majority of consultant projections, paving the way for improved operating rates, which will also be supported by anticipated polyethylene demand growth remaining above GDP for the foreseeable future. As we have experienced through prior down cycles, we expect to see additional announcements and actions until more visible signs of a recovery begin to materialize. As it relates to anti-competitive oversupply activities, our teams continue to be actively engaged in conversations with governments around the world to mitigate impact, aggressively defend local production, and to ensure a fair trade environment remains.

The vast majority are occurring in Asia and Europe targeting assets that sit high on the global cost curve.

As we have experienced through prior down cycles, we expect to see additional announcements and actions until more visible signs of a recovery begin to materialize.

This includes Dow's decision to shut down 3, European assets across each of our operating segments.

As it relates to anti competitive oversupply activities. Our teams continue to be actively engaged in conversations with governments around the world to mitigate impact to aggressively defend local production and to ensure a fair trade environment remains.

In order to rightsize, Upstream Regional capacity, reduce Merchant sale exposure and remove higher cost energy, intensive parts of our portfolio.

These discussions have led to various actions and duties to protect local industries, including MDI in the United States <unk> in Brazil and more.

Dow's rationalization announcements and those from industry peers, have exceeded the majority of consultant projections. Paving the way for improved operating rates, which will also be supported by anticipated polyethylene. Demand growth remaining above GDP or the foreseeable future.

<unk> global asset footprint and product portfolio position us well to win in the key markets that we serve particularly as purchasing patterns trend or buying local products and materials to mitigate any potential tariff headwinds.

As we have experienced through prior down Cycles, we expect to see additional announcements and actions until more visible signs of recovery began to materialize.

Next Karen is going to unpack some of these advantages in more detail.

Thank you Jim we.

We are pleased to see several of the industry action that you described beginning to unfold.

Jim Fitterling: These discussions have led to various actions and duties to protect local industries, including MDI in the U.S., polyols in Brazil, and more. Dow Inc.'s global asset footprint and product portfolio position us well to win in the key markets that we serve, particularly as purchasing patterns trend toward buying local products and materials to mitigate any potential tariff headwinds. Next, Karen is going to unpack some of these advantages in more detail.

As it relates to anti-competitive. Oversupply activities, our teams continue to be actively engaged in conversations with governments around the world to mitigate impact progressively, defend, local production. And to ensure a fair trade environment remains

We continue to monitor both supply and demand signals and we're staying close to our customers and key external stakeholders to understand their unique challenges, while identifying opportunities to drive profitable growth.

these discussions have led to various actions and duties to protect local Industries, including MDI, and the United States polio in Brazil, and more.

At the same time, our teams are working to lower gas cost structure enhance our cash position and strengthen our manufacturing footprint through the shutdown of higher cost assets and the startup of our advantaged growth investments serving high value end markets.

Dallas Global asset footprint and product portfolio position as well to win in the key markets that we serve particularly is purchasing patterns Trend or buying local products and materials to mitigate any potential tariff, headwinds

Karen S. Carter: Thank you, Jim. We are pleased to see several of the industry actions that you described beginning to unfold. We continue to monitor both supply and demand signals, and we're staying close to our customers and key external stakeholders to understand their unique challenges while identifying opportunities to drive profitable growth. At the same time, our teams are working to lower Dow Inc.'s cost structure, enhance our cash position, and strengthen our manufacturing footprint through the shutdown of higher-cost assets and the startup of our advantaged growth investments serving high-value end markets. As the macro-economic environment improves, our actions will ensure Dow Inc. is best positioned to beat our competition, capitalizing on our key advantages. First and foremost, we are committed to being a low-cost producer. Currently, more than 75% of our global cracking capacity is in a top quartile cost position.

Next Karen is going to unpack some of these advantages in more detail.

And as the macroeconomic environment improves our actions will ensure Dow is best positioned to beat our competition capitalizing on our key advantages.

Thank you, Jim.

Of the industry actions that you described beginning to unfold.

We continue to monitor both supply and demand signals.

First and foremost we are committed to being a low cost producer.

Currently more than 75% of our global cracking capacity isn't a top quartile cost position.

And we're staying close to our customers and key external stakeholders to understand their unique challenges while identifying opportunities to drive profitable growth.

Number will increase to approximately 80% once we complete the announced shutdown of our Berlin Cracker.

In addition, we continue to upgrade our world class asset footprint.

Right sizing higher cost capacity across a variety of value chain.

At the same time our teams are working to lower down cost structure and enhance our cash position and strengthen our manufacturing footprint through the shutdown of higher cost assets and the startup of our advantage, growth Investments, serving high value and markets.

Including the shutdowns of 500, Casey Apio capacity in North America.

150, Kt of upstream siloxane production in the U K and one of our CIB units in Germany.

And as the macroeconomic environment, improves our actions will ensure Dao is best positioned to beat our competition. Capitalizing on our key advantages.

First and foremost, we are committed to being a low-cost producer.

Our downstream specialties capacity helps to differentiate and improve gas performance across the economic cycle, which will become more evident when our previously announced shutdowns are completed.

Karen S. Carter: This number will increase to approximately 80% once we complete the announced shutdown of our Bohlen cracker. In addition, we continue to upgrade our world-class asset footprint by right-sizing higher-cost capacity across a variety of value chains, including the shutdowns of 500 KT of PO capacity in North America, 150 KT of upstream siloxane production in the UK, and one of our CAV units in Germany. Our downstream specialties capacity helps to differentiate and improve Dow Inc.'s performance across the economic cycle, which will become more evident when our previously announced shutdowns are completed. Our innovation capabilities also enable strong earnings compared to our peers over the cycle, as evidenced in this year's annual benchmarking report. To summarize, with the addition of our US Gulf Coast investments, broad product range, leading cost efficiency, and global scale, Dow Inc.

Currently, more than 75% of our global cracking capacity is in a top-quartile cost position.

This number will increase to Approximately 80% once we complete the announced shutdown of our bowling cracker

And our innovation capabilities also enabled strong earnings compared to our peers over the cycle as evidenced in this year's annual benchmarking report.

In addition, we continue to upgrade our world-class asset footprint by right-sizing higher-cost capacity across a variety of value chains.

So to summarize with the addition of our U S. Gulf Coast investments broad product range, leading cost efficiency and global scale that was set to gain share in premiums in markets that traditionally grow above GDP like packaging electronics mobility and consumer goods.

Including the shutdowns of 500 KT of Po capacity in North America.

150 Katie of Upstream Sloan's production in the UK and 1 of our cab units in Germany.

And we are confident that doubt differentiated portfolio paired with our team's strong execution will position us to outperform the industry recovers.

Our Downstream Specialties capacity helps to differentiate and improve Dow's performance across the economic cycle, which will become more evident when our previously announced shutdowns are completed.

In closing on slide 11.

Our priorities are clear and our teams remain focused on restoring core earnings.

And our Innovation capabilities, also enable strong earnings compared to our peers over the cycle as evidenced in this year's annual, benchmarking report.

Enhancing our long term competitiveness and delivering more than $6 5 billion and strategic actions and cash support items to positioned well for profitable growth and value creation in the recovery.

Karen S. Carter: is set to gain share and premiums in markets that traditionally grow above GDP, like packaging, electronics, mobility, and consumer goods. We are confident that Dow Inc.'s differentiated portfolio, paired with our team's strong execution, will position us to outperform as the industry recovers.

As a reminder, this includes the $3 billion, we received for our strategic partnership with Macquarie as well as accelerating our in year savings from the $1 billion and cost actions that we announced in January.

So to summarize, with the addition of our us Gulf Coast Investments Broad product range, leading cost, efficiency and global scale that is set to gain, share in premiums and markets. That traditionally grow above, GDP, like packaging Electronics, mobility, and consumer goods.

Jim Fitterling: In closing, on slide 11, our priorities are clear, and our teams remain focused on restoring core earnings, enhancing our long-term competitiveness, and delivering more than $6.5 billion in strategic actions and cash support items to position Dow Inc. well for profitable growth and value creation in the recovery. As a reminder, this includes the $3 billion we received for our strategic partnership with Macquarie, as well as accelerating our in-year savings from the $1 billion in cost actions that we announced in January. In addition, our diverse product portfolio, strategically advantaged asset footprint, and global scale will help Dow Inc. to capture demand in attractive end markets growing above GDP. Our new Alcoxylation and polyethylene units in the U.S. Gulf Coast are already delivering returns, providing further evidence of the value of our integration and low-cost asset footprint in the Americas.

And we are confident that Dow's differentiated portfolio paired with our team's strong execution will position us to outperform as the industry recovers.

In addition, our diverse product portfolio strategically advantaged asset footprint and global scale will help out and capture demand in attractive end markets growing above GDP.

In closing on slide, 11.

And our new our constellation in polyethylene units in the U S. Gulf Coast are already delivering returns providing further evidence of the value of our integration and low cost asset footprint in the Americas.

Our priorities are clear and our teams remain focused on restoring core earnings enhancing, our long-term, competitiveness, and delivering more than 6.5 billion dollars in strategic actions and cash support items to position. Dow well for profitable growth and value Creation in the recovery.

Importantly, we continue to engage in positive and productive conversations with several governments around the world as it relates to anti competitive behaviors as well as changing trade and tariff policies. We remain confident that we're in a strong position to mitigate the impact of tariff costs in summary, we're.

As a reminder, this includes the 3 billion dollars, we received for our strategic partnership with McQuarrie as well as accelerating, our in-ear savings from the 1 billion dollars in cost actions that we announced in January.

<unk> and we're taking strong actions to navigate the current environment, while advancing our long term strategic priorities.

In addition, our diverse product portfolio, strategically advantaged asset footprint, and global scale will help us capture demand in attractive markets growing above GDP.

We remain committed to delivering strong performance profitable growth and lasting competitiveness in key value chain and as we have demonstrated in the past we will continue to identify and implement the right actions that help us stay closer to our customers while outperforming the competition.

Jim Fitterling: Importantly, we continue to engage in positive and productive conversations with several governments around the world as it relates to anti-competitive behaviors, as well as changing trade and tariff policies. We remain confident that we're in a strong position to mitigate the impact of tariff costs. In summary, we're focused, and we're taking strong actions to navigate the current environment while advancing our long-term strategic priorities. We remain committed to delivering strong performance, profitable growth, and lasting competitiveness in key value chains. As we have demonstrated in the past, we will continue to identify and implement the right actions that help us stay closer to our customers while outperforming the competition. With that, I'll turn it back to Andrew to get us started with the Q&A.

And our new alox and polyethylene units in the US Gulf. Coast are already delivering returns providing further evidence of the value of our integration and low-cost asset footprint in the Americas.

With that I'll turn it back to Andrew to get US started with the Q&A.

Thank you Jim now, let's move on to your questions I would like to remind you that our forward looking statements apply to both our prepared remarks and the following Q&A.

Importantly, we continue to engage in positive and productive conversations with several governments around the world as it relates to anti-competitive behaviors, as well as changing trade and tariff policies. We remain confident that we're in a strong position to mitigate the impact of tariff costs.

Operators, please provide the Q&A instructions.

In summary we're focused and we're taking strong actions to navigate the current environment while advancing our long-term strategic priorities.

Thank you, ladies and gentlemen, we will now begin our Q&A session. If you have dialed in and we'd like to ask a question. Please press star followed by one on your telephone keypad. If you would like to withdraw your question. Please press star one again.

Kindly ask that everyone limit themselves to one question.

We remain committed to delivering strong performance, profitable growth, and lasting competitiveness in key value chains. And as we have demonstrated in the past, we will continue to identify and implement the right actions that help us stay closer to our customers while outperforming the competition.

Your first question comes from Vincent Andrews with Morgan Stanley. Please go ahead.

With that, I'll turn it back to Andrew to get us started with the Q&A.

Andrew Riker: Thank you, Jim. Now let's move on to your questions. I would like to remind you that our forward-looking statements apply to both our prepared remarks and the following Q&A. Operator, please provide the Q&A instructions.

Thank you and good morning, everyone. I'm wondering if we could just get a bit of a reconciliation about the third quarter. Ultimately the results came in nicely ahead of what you expected.

Thank you, Jim. Now, let's move on to your questions. I would like to remind you that our forward-looking statements apply to both our prepared remarks and the following Q&A.

Operator. Please provide the Q&A instructions.

Operator: Thank you. Ladies and gentlemen, we will now begin our Q&A session. If you have dialed in and would like to ask a question, please press star followed by one on your telephone keypad. If you would like to withdraw your question, please press star one again. We kindly ask that everyone limit themselves to one question. Your first question comes from Vincent Andrews with Morgan Stanley. Please go ahead.

When you gave the original guidance at <unk>.

Obviously about a month ago, you were anticipating things were going to fall short of that particularly in packaging and specialty plastics, but you wound up being able to exceed your original estimate there likewise in AAA. So just wondering what happened.

In September came in better than expected or were you better on costs or just what allowed the sales tend to take to take shape. Thank you.

Thank you, ladies and gentlemen, we will now begin our Q&A session if you have dialed in and would like to ask a question, please press star. Followed by 1 on your telephone keypad, if you would like to withdraw your question, please press star 1 again we kindly ask that everyone limit themselves to 1 question.

Good morning, Vincent let me ask Karen to walk through the business results and then maybe just a comment on how things came in on cost and cash yes. Thank you for the question. There were really two areas that I would like to highlight in terms of the.

Your first question comes from Vincent Andrews with Morgan Stanley. Please go ahead.

[Analyst]: Thank you, and good morning, everyone. Wondering if we could just get a bit of a reconciliation about the third quarter. Ultimately, the results came in nicely ahead of what you expected when you gave the original guidance at Q2. Obviously, about a month ago, you were anticipating things were going to fall short of that, particularly in Packaging and Specialty Plastics, but you wound up being able to exceed your original estimate there, likewise in triple-I. Just wondering what happened. Was it just that September came in better than expected? Were you better on costs? What allowed this outcome to take shape? Thank you.

The sequential improvement higher integrated margins and NSP and ini and that was in part driven by earnings both asset. So volume did come in better than we expected and then the second thing is really around our cost up a can of course, we committed to those earlier in the year. The $1 billion. Originally we thought that three <unk>.

Hundred million would be the number in 2025, we accelerated that to $400 million and have clear line of sight to that and that actually showed up in the bottom line in third quarter in a visible way. So I would say that those two things.

Uh, thank you and good morning, everyone. Um, wondering if we could just get a bit of a Reconciliation about the third quarter. Um, you know, ultimately, the results came in nicely ahead of what you expected. Uh, when you gave the original guidance to 2q, um, you know, obviously about a month ago, uh, you were anticipating things were going to fall short of that, uh, particularly in packaging, especially Plastics, but you wound up being able to, to exceed your original estimate there, likewise in in triple I. So just just wondering what happened, you know, was, was it just in September came in better than expected? Or were you better on costs or just what what what allowed this outcome to take to take shape? Thank you.

Jim Fitterling: Morning, Vincent. Let me ask Karen to walk through the business results, and then maybe Jeff to comment on how things came in on cost and cash.

Karen S. Carter: Thank you for the question. There were really two areas that I would like to highlight in terms of the sequential improvement: higher integrated margins in both PNSP and IINI, and that was in part driven by our new growth assets. Volume did come in better than we expected. The second thing is really around our cost efforts. Of course, we committed to those earlier in the year, the billion dollars. Originally, we thought that $300 million would be the number in 2025. We've since accelerated that to $400 million and have a clear line of sight to that. That actually showed up in the bottom line in third quarter in a visible way. I would say that those two things were really the difference in terms of how we not only exceeded expectations from the last guide, but also, you know, sequential improvements quarter over quarter.

A comment on how things came in on cost and cash. Yeah, thank you for the question.

Really the difference in terms of how we not only exceeded expectations from the last guide, but also sequential improvement quarter over quarter.

There were really 2 areas that I would like to highlight

<unk>. Good morning. This is Jeff I'll, just make a couple of additional comments here related to cash flow and even on the on the cost reductions that Karen was just mentioning initially in our guide for <unk>, we expect it to be approximately $50 million tailwind.

Tailwind for us and it was actually better than that of September came in a little bit stronger on the cost reduction side at about $75 million. So about a $25 million improvement there I do want to spend a second on the cash flow as well, though because you will notice that our cash from operations came in at $1 1 billion and third quarter, which is an improved.

Sequentially of one 6 billion and that was really driven by by three different areas here sizable improvement in our working capital. The team has done a phenomenal job of continuing to really double down on the working capital improvement going into the second half of the year.

Jeffrey Tate: Vincent, good morning. This is Jeff. I'll just make a couple of additional comments here related to cash flow. Even on the cost reductions that Karen was just mentioning, initially in our guide for Q3, we expected it to be approximately $50 million tailwind for us, and it was actually better than that as September came in a little bit stronger on the cost reduction side at about $75 million. That is about a $25 million improvement there. I do want to spend a second on the cash flow as well, because you'll notice that our cash from operations came in at $1.1 billion in the third quarter, which is an improvement sequentially of $1.6 billion. That was really driven by three different areas here. Sizable improvement in our working capital.

The margins and both PNP. And I and I uh and that was uh in part driven by our new growth assets. So volume did come in better than we expected and then the the second thing is really around our cost cost effort and of course, we committed to those earlier in the year, the billion dollars. Uh, originally we thought that 300 million would be the number in 2025, we sent accelerated that to 400 million and have clear line of sight to that, um, and that actually showed up in the bottom line, in third quarter in a visible way. So I would say that those 2 things um, were really the difference. Um, in terms of, of how we not only exceeded expectations, um, from the, the last guide, but also, you know, sequential improvements quarter over quarter.

In fact as you heard in my prepared remarks, we're expecting in the second half of the year, our working capital to deliver a release of cash of $200 million to $300 million and we saw $80 million of that working capital improvement in terms of a source of cash during the third quarter. We also had the two long term strategic supply agreements that Karen.

And in her prepared remarks as well as the improved earnings that we have sequentially from second quarter to third quarter.

And that's a good morning. This is Jeff. I'll just make a couple of additional comments here related to cash flow and even on the on the cost reductions, that Karen was just mentioning, you know, initially in our guide for 3 Q, we expect it to be approximately $50 million Tailwind force and it was actually better than that. As September came in a little bit stronger on the cost reduction side at about 75 million so about a 25 million dollar Improvement there. I do want to spend a second on the on the cash flow as well though because you'll notice that our our cash from operations came in at 1.1 billion and third quarter, which is an improvement sequentially of 1.6 billion.

Jeffrey Tate: The team has done a phenomenal job of continuing to really double down on the working capital improvement going into the second half of the year. In fact, as you heard in my prepared remarks, we're expecting in the second half of the year our working capital to deliver a release of cash of $200 to $300 million. We saw $80 million of that working capital improvement in terms of a source of cash during the third quarter. We also had the two long-term strategic supply agreements that Karen mentioned in her prepared remarks, as well as the improved earnings that we had sequentially from second quarter to third quarter.

Your next question comes from the line of Hassan Ahmed with Alembic Global Advisors. Please go ahead.

Good morning, Jim.

Jim really appreciate the industry sort of outlook you guys provided in slide 10.

Just a broader question around rationalization and.

New project cancellations.

The rationalization side of things obviously.

The South Korean side, the Japanese side in the European side, you can assign projects you can see which capacity is being shut down what's less clear is the anti involution side.

And that was really driven by by 3 different areas here, sizable improvement in our working capital. The team has done a, a phenomenal job of continuing to really double down on the working capital Improvement, going into the second half of the year. Um in fact, as you heard in my prepared remarks we're expecting in the second half of the Year, our working capital to deliver a release of cash of 200 to 300 million dollars and we saw 80 million dollars of that working capital Improvement in terms of a source of cash during the third quarter, we also had the 2 Longleaf

Operator: Your next question comes from the line of Hassan Hamad with Olympic Global Advisors. Please go ahead.

China in particular, what cancellations may transpire over there so I really appreciate it if you could.

[Analyst]: Morning, Jim. Jim, really appreciate the industry sort of outlook you guys provided in slide 10. Just a broader question around rationalization and new project cancellations. On the rationalization side of things, obviously, the South Korean side, the Japanese side, and the European side, you can assign projects. You can see which capacity is being shut down. What's less clear is the anti-involution side. China in particular, what cancellations may transpire over there. I'd really appreciate if you could sort of provide your thoughts around that. Part and parcel with that, I keep hearing that, look, I mean, once China announces new facilities, they never cancel those projects. I mean, they have a long track record of that. Is that also changing?

Your next question comes from the line of Hassan Hamad with Olympic Global advisors. Please go ahead.

Could sort of provide you.

Thoughts around that and part and parcel with that can I keep hearing that look I mean, once China announces new facilities. They never canceled those projects I mean, they have a long track record of that so is that also changing.

Good morning Hassan.

Thanks for the question I would say a couple of things on the ethylene supply outlook and I think most of your questions were geared towards that.

We've got <unk>.

Right now line of sight to about 9300 kilo tonnes of global capacity, which is being rationalized.

Morning. Jim, um, I really appreciate the industry sort of, uh, outlook you guys provided in slide 10. Um, so just a broader question, you know, around rationalization and, uh, new project cancellations. Um, you know, on the rationalization side of things, obviously, you know, the South Korean side, the Japanese side, and the European side, you know, you can assign, you know, projects. You know, you can see which capacity is being shut down. What's less clear is the anti-inflation side. Um, you know, China in particular, what cancellations may transpire over there? So, I I'd really appreciate, you know,

<unk> got about 4400 tons in the Europe Middle East and Africa.

And those have been announced and I think are well documented and that includes our bowl announcement.

If you could sort of provide, uh, your thoughts around that and part and parcel with that, you know, I keep hearing that. Look, I mean, you know, once China announces new facilities, they never cancel those projects. I mean, they have a long track record of that. So is that also changing

Got 4900 kilo tons in Asia Pacific.

Jim Fitterling: Good morning, Hassan. Thanks for the question. I would say a couple of things on the ethylene supply outlook, and I think most of your questions were geared toward that. We've got right now a line of sight to about 9,300 kilotons of global capacity, which is being rationalized. You've got about 4,400 kilotons in Europe, Middle East, and Africa. Those have been announced and I think are well documented. That includes our Bohlen asset. You've got 4,900 kilotons in Asia Pacific. That includes China, obviously, Japan, China, Singapore, and about 1,000 kilotons across the rest of Asia. We've got speculation on closures of about 13 million metric tons from a combination of additional capacity in Asia, Japan, and Korea to the tune of about 5 million tons, and China from the anti-involution policies to the tune of about 7 million tons. That's what's out there.

That includes China, obviously about Japan.

Japan, China, Singapore.

<unk> 1000 tons kilotons across the rest of Asia.

Good morning, Hassan. Thank you for the question. I would say a couple of things on the ethylene supply outlook, and I think most of your questions were geared toward that.

We've got the speculation on the closures of about 13 million metric tons from our combination.

You know, we've got uh, right now line of sight to about 9300 kilotons of global capacity.

which is being, um, rationalized

Additional capacity in Asia, Japan, and Korea to the tune of about 5 million tonnes.

You've got about 4,400 kilotons in the Europe, Middle East and Africa.

And China from the anti involution policies to the tune of about 7 million tons. So that's what's out there.

See the 9300 Kilotons that I've mentioned.

I would say much more confirmed then the $13 million.

And those have been announced, and I think are well documented. That includes our bowl and asset. You've got 4,900 kilotons in Asia Pacific. Um, but that includes China, obviously about Japan, China, Singapore.

All of that together.

Sabrina you toward 10% of the global capacity and when you get into Europe, It's probably bring you more into the 20% of European capacity range, and I think thats right in line with what the industry is.

And about a thousand tons uh kilotons across the rest of Asia.

We've got speculation on closures of about 13 million metric. Tons.

<unk> you comment on China in terms of once announced completed.

From a combination of additional capacity in Asia, Japan, and Korea, to the tune of about 5 million tons.

Don't have any data to counter that I would say I think you might see some delays in some announced capacity in China just from the standpoint that the market in China is slow.

Jim Fitterling: Obviously, the 9,300 kilotons that I mentioned, I would say are much more confirmed than the 13 million. All of that together starts to bring you toward 10% of the global capacity. When you get into Europe, it's probably bringing you more into the 20% of European capacity range. I think that's right in line with what the industry is seeing. Your comment on China in terms of, once announced, completed, I don't have any data to counter that. I would say I think you might see some delays in some announced capacity in China just from the standpoint that the market in China is slow. For certain grades of product, we're not as big in something like high-density polyethylene, for example. For certain grades, they've reached self-sufficiency, and they really don't have the cost position to export them.

And China from the anti-immigrant tons. So that's what's out there. Obviously the 9300 kilotons that I mentioned

And for certain grades of products.

We're not as big in something like high density polyethylene for example, but for certain grades reached self sufficiently self sufficiency and they really don't have the cost position to export them and as the world pushes back with antidumping duties and other measures to keep.

Great Fair, that's going to put pressure on them and so I think they'll look at the timing on those.

Your next question comes from the line of Michael <unk> with Wells Fargo. Please go ahead.

Capacity range, and I think that's right in line with what the industry is saying. Your comment on China, in terms of, you know, once announced completed, I don't have any data to counter that. I would say, I think you might see some delays and some announced capacity in China, just from a standpoint that the market in China is slow.

Hey, good morning nice quarter.

In terms of.

PST I think you noted global integrated margins could be down a penny.

And for certain grades of product, we're not, we're not as big in something like high density. Polyethylene, for example.

In the fourth quarter can you bifurcate that.

From whether pricing or cost in the U S Europe and export and then just a quick follow up.

Jim Fitterling: As the world pushes back with anti-dumping duties and other measures to keep trade fair, that's going to put pressure on them. I think they'll look at the timing on those.

Slide eight.

But for certain grades, they've reached self-sufficiently self-sufficiency and they really don't have the cost position to export them. And as the world pushes, back with anti-dumping duties and and other measures to to keep

The pretty colors, really havent changed whether or not that pretty but.

If those if the global demand backdrop stay similar in the first half of 'twenty six.

Trade Fair. That's going to put pressure on them and so I think they'll look at the timing on those.

Operator: Your next question comes from the line of Michael Sison with Wells Fargo. Please go ahead.

Does EBITDA improve and I know you have more cost savings next year can you maybe just talk about what happens in the event that we have this same colors.

Your next question comes from the line of Michael Cyson with Wells Fargo. Please go ahead.

[Analyst]: Hey, good morning. Nice quarter. In terms of PSP, I think you noted global integrated margins would be down $0.01 in the fourth quarter. Can you bifurcate that, you know, from whether pricing or cost in the U.S., Europe, and export? Just a quick follow-up. You know, slide eight, the pretty colors really haven't changed. They're not that pretty. If the global demand backdrop stays similar in the first half of 2026, you know, does EBITDA improve? I know you have more cost savings next year. Can you maybe just talk about what happens in the event that we have these same colors heading into next year?

Heading into next year.

Hey, good morning, nice quarter. Um in terms of um PSP I think you noted Global integrated. Margins would be down a penny

Thanks, Michael do you want to hit the P&L.

Cover slightly.

Yes. So so it's important to note first of all in third quarter.

Uh, in the fourth quarter, can you bifurcate that, you know, from whether pricing or cost in the US, Europe and Export and then just a quick follow-up.

<unk> taken a look at how we ended the quarter from an industry perspective. So when we came in the third quarter. We expected the prices would move out would move up and of course as you know they felt flat, even though we thought the market fundamentals, where they are and so if you look at the ACC data in September both domestic and export demand set record for the mine.

Um you know slide 8 the the the the pretty colors really have it changed? Well they're not that pretty but if those if the global demand backdrop stays similar

in the first half of 26,

But then also industry inventories drew down it was the second largest truck of the year.

You know how EBITDA improves, and I know you have more cost savings next year. Can you maybe just talk about what happens in the event that we have this, uh, same colors heading into next year?

So that's why we expect and we anticipate the price should go up in October we have five cents on the table.

Jim Fitterling: Thanks, Michael. Karen, you want to hit PNSP, and I'll try to cover slide eight?

Karen S. Carter: Yeah, so it's important to note that, first of all, in the third quarter, you know, take a look at how we ended the quarter from an industry perspective. When we came into the third quarter, we expected that prices would move up. Of course, as you know, they settled flat, even though we thought the market fundamentals were there. If you look at the ACC data in September, both domestic and export demand set records for the month, but also industry inventories drew down. It was the second largest draw of the year. That's why, you know, we expect and we anticipate that prices should go up in October. We have $0.05 on the table, and that should continue to occur, even though it's a challenging market environment.

And that should continue to occur even though it's a challenging market environment. So when you look at why.

Thanks Michael. Uh, Karen, do you want to hit PNP and I'll try to cover sliding?

Yeah. So so

something to note that for some

Our integrated margins are predicted to be down by a penny I am it's really because of the higher feedstock costs that are expected based on frankly, so natural gas and ethane are both expected to go up at the beginning of the month that was a spike on ethane it has since and since come down so we could get some relief on that but right now our view.

With that integrated margins.

Will decline by about a penny globally, but that also should provide some support for prices going up in October and again, we've got five cents per pound on the table.

You know, take a look at how we ended the quarter from an industry perspective. So when we came in at third quarter, we expected that prices, uh, would move out. Would move up. Um, and of course, as you know, they settled flat, even though we thought the market fundamentals were there. And so if you look at the ACC data in September, um, both domestic and Export demand set record for the month, but then also industry inventories Dru Down. It was the second largest drop of the year.

And Michael if I could touch on slide eight I think the main reason for the no change that you see there is.

Karen S. Carter: When you look at why our integrated margins are predicted to be down by a penny, it's really because of the higher feedstock costs that are expected based on weather, frankly. Natural gas and ethane are both expected to go up. At the beginning of the month, there was a spike on ethane. It has since come down, and we could get some relief on that. Right now, our view is that integrated margins, you know, will decline by about a penny globally. That also should provide, you know, some support for prices going up in October. Again, we've got $0.05 per pound on the table.

Theres just a lot of uncertainty in the marketplace right now and we don't have settlement yet on all of the trade deals that have been announced.

And you see in the market.

Everybody feels that every time there is a swing at it announced spud from from either side on one of the trade deals.

Usually a bit of a pullback and everybody is trying to figure out what the impact is going to be we've seen.

Without the year, our own supply chain team, who has been doing a phenomenal job.

And so that's why you know we expect and and we anticipate the prices should go up in October, we have 5 cents on the table um and that should continue to to occur um even though it's a challenging Market environment. So when you look at why, um our our integrated margins are predicted to be down by a penny. Um, It's really because of the uh higher feed stock costs uh that are expected based on whether frankly, so natural gas. And ethane are both expected to go up at the beginning of the month. There was a spike on ethane, it has since, and since come down and so, we could get some relief on that. Um, but right now our view is that integrated margins. Um, you know, will decline by about a penny globally, but that also should provide, you know, some support for prices going up in October. And again, we've got 5 cents per pound on the table.

Jim Fitterling: Michael, if I could touch on slide eight, I think the main reason for the no change that you see there is there's just a lot of uncertainty in the marketplace right now. We don't have settlement yet on all of the trade deals that have been announced. You see in the market, and I think everybody feels that every time there's a swing in an announcement from either side on one of the trade deals, there's usually a bit of a pullback, and everybody's trying to figure out what the impact is going to be. We've seen throughout the year our own supply chain team, who's been doing a phenomenal job really shifting gears to try to make sure that we don't get caught out and product keeps moving. That's the hardest part to project going forward. The industries that are driving the demand are still good.

Really shifting gears to try to make sure that we don't get caught out in product keeps moving.

So thats the hardest part to project going forward. The industries that are driving the demand are still good. If you if you look at electronics.

And and Michael, if I could touch on slide 8, I I think the main reason for the no change that you see there is, um, there's just a lot of uncertainty, uh, in the marketplace right now and we don't have settlement yet on all of the trade deals that have been announced.

Electronics, if you look at data centers Tech.

And really in the construction side of things.

That is what's driving the construction markets today.

And you see in the market. And I think everybody feels that every time there's a swing in an announcement from from either side on 1 of the trade deals.

As government spending on infrastructure, we've seen more government.

Support for infrastructure projects, that's helping to drive demand than we have seen for example in China, you see really no support for the housing industry. There, so thats, having a pretty heavy weight on the Chinese market.

There's usually a a bit of a pullback and everybody's trying to figure out what the impact is going to be. We've seen throughout the year, our own supply chain team who's been doing a phenomenal job

And here we've got.

I would say some interest rate declines in housing like Jeff mentioned, but nothing yet that has caused an uptick.

Jim Fitterling: If you look at electronics, if you look at data centers, tech, AI, and really in the construction side of things, that is what's driving the construction markets today. There's government spending on infrastructure. We've seen more government support for infrastructure projects that's helping to drive demand than we have seen. For example, in China, you see really no support for the housing industry there. That's having a pretty heavy weight on the Chinese market. Here we've got, I would say some interest rate declines in housing, like Jeff mentioned, but nothing yet that has caused an uptick in new mortgages or existing home sales or anything that would drive demand. We're optimistic that things are moving in the right direction. I think if we could see some completion of some of these trade deals by the end of the year, that should bode well for next year.

And new mortgages or <unk>.

Existing home sales or anything that would drive demand.

Really shifting gears to try to make sure that we don't get caught out and and product keeps moving. So that's the hardest part uh to project going forward. The industries that are driving. The demand are are still good if you if you look at um Electronics. If you look at data centers Tech Ai and really in the construction side of things,

No.

Domestic that things are moving in the right direction and I think if we can see some completion of some of these trade deals by the end of the year.

That is what's driving, the construction markets today. Um, there's government spending on infrastructure, we've seen more government.

That should bode well for next year.

And if this lingers into next year, then obviously, we need some of that certainty.

We were able to have people make decisions.

Support for infrastructure projects, that's helping to drive demand. Then we have seen for example in China, you see really no support for the Housing Industry there. So that's having a pretty heavy weight on the Chinese market.

<unk> sitting on the sidelines.

and here we've got

And move forward with investment plans I think tech AI data centers that utility construction for power.

That's all going to continue because that's new capacity thats needed. Those are decisions that can be made right now and people are ready to move fast in that space and there is liquidity and so there's good money to chase those projects, but I think when it comes to rebounds in some of the existing long established global.

if we can see some completion of some of these trade deals by the end of the year,

Jim Fitterling: If this lingers into next year, then obviously we need some of that certainty to be able to have people make decisions, stop sitting on the sidelines, and move forward with investment plans. I think tech, AI, data centers, utility construction for power, I think that's all going to continue because that's new capacity that's needed. Those are decisions that can be made right now, and people are ready to move fast in that space, and there's liquidity. There's good money to chase those projects. I think when it comes to rebounds in some of the existing long-established global supply chains, we need to see some certainty.

The change we need to see some certainty.

that should bode well for next year. Um, if this lingers into next year, then obviously we need some of that certainty.

Your next question comes from the line of Josh Spector with UBS. Please go ahead.

Yeah.

Yeah, Hey, good morning, I was wondering if you could talk a little bit more about kind of the range of Capex. As you think about 2026, I think you made the comment that youre not going to make a decision on alberta or at least you're not going to announce it until.

So January and February call, but can you help us think about maybe a low end range. If you decide that youre not going to do it and bring basically everything down versus the high end range. If you say, we are going to kind of continue with that ramp up will look like.

To be able to have people make decisions um stop sitting on the sidelines and and move forward with investment plans. I I think Tech Ai, and data centers that, you know, utility, uh, construction for power. I think that's all going to continue because that's new capacity. That's needed. Those are decisions that can be made right now and and people are ready to move fast in that space and there's liquidity and so there's good money to chase those projects. But I think when it comes to rebounds in some of the existing long established Global Supply chains, we need to see some certainty.

Operator: Your next question comes from the line of Josh Specter with UBS. Please go ahead.

Yes, I think the simple answer Josh is if we continue the way we are you could see another $2 $5 billion next year and we can manage that.

Your next question comes from the line of Josh Spectre with UBS. Please go ahead.

[Analyst]: Yeah, hey, good morning. I was wondering if you could talk a little bit more about kind of the range of CapEx as you think about 2026. I mean, I think you made the comment that you're not going to make a decision on Alberta, or at least you're not going to announce it until the January or February call. Can you help us think about maybe a low-end range if you decide that you're not going to do it and bring basically everything down versus the high-end range if you say we are going to kind of continue what that ramp-up would look like?

Within that you've got about a $1 billion of maintenance Capex.

We've obviously got less.

Just started up a unit down in Texas.

Constellation unit as well so those come off the docket going into next year, we have some downstream silicones projects that are very good that'll be on the docket.

But we're not starting anything else right now until we get a little bit better line of sight to demand and the question.

Yeah. Hey, good morning. Um, I was wondering if you could talk a little bit more about kind of the range of capex as you think about 2026. I mean, I think you made the comment that you're not going to make a decision on Alberta or at least you're not going to announce it until um, the January or February call, but can you help us? Think about maybe a low-end range if you decide that you're not going to do it and bring basically everything down versus the high-end range. If you say, we are going to kind of continue what that ramp up would look like

Jim Fitterling: Yeah, I think the simple answer, Josh, is if we continue the way we are, you could see another $2.5 billion next year, and we can manage that. Within that, you've got about $1 billion of maintenance CapEx. We've obviously got less. We just started up a unit down in Texas and an Alcoxylation unit as well. Those come off the docket going into next year. We have some downstream silicones projects that are very good that'll be on the docket. We're not starting anything else right now until we get a little bit better line of sight to demand and the question that Michael raised just previously. I think we could land it in that range. We will come back in January.

Michael raised previously.

So I think we could land in that range.

We will come back in January I think we've got teams working really hard.

And on the triggers.

Yeah, I think the simple answer Josh is if we uh continue the way we are, you could see another 2.5 billion dollars next year and we can manage that and and within that you've got about a billion of maintenance capex.

Wood.

Cause us too.

Declare when the start of construction would be on path to zero.

Your next question comes from the line of Jeff Zekauskas with Morgan Stanley. Please go ahead.

Um we've obviously got less. Um we just started up a unit down in Texas and and now coxal Asian unit as well. So those come off the docket going into next year. We have some Downstream silicones projects that are very good that that'll be on the docket.

Hi, good morning.

One of the things that Dow hasn't really talked about joint venturing the Alberta Crocker.

Why wouldn't that make sense.

Nick pressure off that.

Jim Fitterling: I think we've got teams working really hard on the triggers and what would, you know, cause us to declare when the start of construction would be on path to zero.

Cash flows of the company.

Um but we're not starting anything else right now until we get a little bit better, line of sight to demand and and the question that um, Michael raised just previously, so I think we could land it in that in that range, um, and we will come back in January. I think we've got the teams working really hard.

And then.

Is that something that you're considering or why wouldn't you consider it and then secondly, what's polyethylene demand and like for you.

and on the triggers and and what would, you know, cause us to

Declare when the start of construction would be on path to zero.

Operator: Your next question comes from the line of Jeff Zakoskis with Morgan Stanley. Please go ahead.

In the third quarter and year to date.

Okay.

Good morning, Jeff, Let me ask Karen to talk about polyethylene demand and then I'll come back and talk about Alberta.

Your next question comes from the line of Jeff. Zakus with Morgan Stanley. Please go ahead.

[Analyst]: Hi, good morning. One of the things that Dow Inc. hasn't really talked about is joint venturing the Alberta cracker. Why wouldn't that make sense and take pressure off the cash flows of the company? Is that something that you're considering, or why wouldn't you consider it? Secondly, what's polyethylene demand been like for you in the third quarter and year to date?

Uh, hi. Good morning.

Good morning, Jeff for US polyethylene demand has been stable I mean, if you look at the market segments that that we plan to packaging has remained relatively stable I know, there's been discussion around our consumer and although consumer sentiment is weaker.

What we are hearing from both brands and our customers is that they are actually shifting down some shifting from them of.

Of course, the consumer branded label Tampa private labels, but that's still good for us we sell into all of our segments. So packaging has been stable.

Um, one of the things that Dow hasn't really talked about is joint venturing. The Alberta Crocker. Um, why wouldn't that make sense and take pressure off the cash flows of the company? And then, um, is that something that you're considering or why wouldn't you consider it? And then, secondly, what's polyethylene demand been like for you in the third quarter year to date?

Jim Fitterling: Morning, Jeff. Let me ask Karen to talk about polyethylene demand, and then I'll come back and talk about Alberta.

Personal care for US is another space, that's been stable for us in packaging as well.

Heard me say earlier that the industry set a quarter a record in September both for domestic sales as well as exports until we continue to see those exports flow and.

Morning Jeff. Um let me ask Karen to talk about polyethylene demand and then I'll come back and talk about Alberta.

Karen S. Carter: Good morning, Jeff. For us, polyethylene demand has been stable. If you look at the market segments that we play into, packaging has remained relatively stable. I know there's been discussion around the consumer, and although consumer sentiment is weaker, what we are hearing from both brands and our customers is that they are actually shifting down. Shifting from the consumer-branded labels down to private labels, but that's still good for us. We sell into all of those segments. Packaging has been stable. Personal care for us is another space that's been stable for us in packaging as well. You heard me say earlier that the industry set a record in September, both for domestic sales as well as exports. We continue to see those exports flow, and we grew in the third quarter.

Good morning, Jeff. Uh, you know for us polyethylene demand has been

We grew in the third quarter. So we expect that packaging demand for US we'll continue to be stable to relatively strong depending on the segment.

Other thing I would just highlight again is probably seven only brought up colleagues seven early in the quarter and third quarter and it's already sold out and we expect that to continue to occur.

And I know in Alberta, Jeff I don't have anything specific to say and I don't have a pushback on your question on.

Joint venturing.

You look back at Texas nine at the time, when we did it.

Our partners from Kuwait Global came in and made an investment to consume up to 30% of that Cracker. That's worked extremely well in fact, we just contractual is the last increment of that in the third quarter.

planned to packaging. Um, has remained relatively stable. I know there's been discussion around the consumer and although consumer sentiment you know, is weaker uh you know, what we are hearing from both Brands and our customers is that they are actually shifting down. So shifting from um, uh, you know, of course, the consumer branded labels down to private labels, but that's still good for us, we sell into all of those segments. So, packaging has been stable, um, personal care for us is is another space that's been stable um for us in packaging as well. Um you heard me say earlier that the industry set a quarter a record in September um both for domestic sales as well as exports and so we continue to see those exports flow um and we

Karen S. Carter: We expect that packaging demand for us will continue to be stable to relatively strong, depending on the segment. The other thing I would just highlight again is Poly7. We brought up Poly7 early in the quarter and third quarter, and it's already sold out. We expect that to continue to occur.

So that's worked extremely well so we have experience to do something like that I think a couple of things I would say about Alberta.

Through and the third quarter. So we expect that packaging demand for us will will continue to be, um, stable to relatively strong depending on the segment. The other thing I would just highlight again, is poly 7. So we brought up Polly 7, uh, early in the quarter and third quarter and it's already sold out.

And we expect that to continue to occur.

Jim Fitterling: On Alberta, Jeff, I don't have anything specific to say, and I don't have a pushback on your question on joint venturing. If you look back at Texas 9 at the time when we did it, our partners from Kuwait, ME Global, came in and made an investment to consume up to 30% of that cracker, and that's worked extremely well. In fact, we just contractualized the last increment of that in the third quarter. That's worked extremely well. We have experience to do something like that. I think a couple of things I would say about Alberta: still a delay, not a cancellation. It's still an asset from an investor standpoint that you want in the fleet longer term.

Still a delay not a cancellation, it's still an asset from an investor standpoint that you want in the fleet longer term.

And and on Alberta Jeff I I don't have anything specific to say and I I don't have a a push back on your question on.

It has the scale it has the cost position.

Joint venturing. Uh, if you look back at the Texas 98,

And you are bringing on additional.

Asset cracker and derivatives up into that pocket in Alberta, which has.

Really a cost advantage on ethane over a long period of time.

Decades.

That you can lock in where where the Gulf coast is a little more exposed to market swings.

Contractualization.

I think thats, a big advantage so.

So that's worked extremely well. We have experience doing something like that. I think a couple of things I would say about Alberta.

We're looking at how to time it we're looking at obviously the best value creation for it we don't want to bring it on well ahead of demand do you want to bring it on with the market. Those are some of the things that would factor in and.

Jim Fitterling: It has the scale, it has the cost position, and you're bringing an additional asset cracker and derivatives up into that pocket in Alberta, which has really a cost advantage on ethane over a long period of time, decades, that you can lock in where the US Gulf Coast is a little more exposed to market swings. I think that's a big advantage. We're looking at how to time it. We're looking at, obviously, the best value creation for it. We don't want to bring it on well ahead of demand. We want to bring it on with the market. Those are some of the things that we're factoring in. I don't have anything to talk about in terms of the JV, but certainly, all possibilities are things that we would consider.

Still a delay, not a cancellation. It's still an asset from an investor standpoint that you want in the fleet longer term.

Don't have anything to talk about in terms of the JV, but certainly all possibilities or are things that we would consider.

It has the scale, it has the cost position and you're bringing an additional

you know, asset cracker and derivatives up into that pocket in Alberta, which has

Yeah.

Your next question comes from the line of Matthew Blair with T. P. H. Please go ahead.

Thank you and good morning, I was hoping you could talk a little bit more about some of the moving parts in your polyurethane business.

Really a cost advantage on ethane over a long period of time, you know, decades um, that you can lock in where where the Gulf Coast is a little more exposed to Market swings.

And so, I think that's a big advantage.

Are you seeing any benefits to U S. MDI margins from tariff impacts that have reduced imports from places like China.

Also on the just on the construction end market side I think you mentioned that rates are coming lower but is it fair to say, that's not really coming through in the market yet and then finally do you.

We're looking at how to time it we're looking at obviously the best value creation for it. We don't want to bring it on. Well ahead of demand. You want to bring it on with the market? Those are some of the things that we factored in and, um,

Don't have anything to talk about in terms of the JV, but certainly all possibilities are are things that we would consider.

But any sort of commentary you can provide on the.

Operator: Your next question comes from the line of Matthew Blair with PPH. Please go ahead.

The relative strength with your <unk> business versus your isocyanate businesses, one holding up a little bit better than the other thank you.

Your next question comes from the line of Matthew Blair with TP H, please go ahead.

[Analyst]: Thank you, and good morning. I was hoping you could talk a little bit more about some of the moving parts in your polyurethane business. Are you seeing any benefits to U.S. MDI margins from tariff impacts that have reduced imports from places like China? Also, just on the construction end market side, I think you mentioned that rates are coming lower, but is it fair to say that's not really coming through in the market yet? Finally, do you have any sort of commentary you can provide on the relative strength with your polyols business versus your isocyanates business? Is one holding up a little bit better than the other? Thank you.

Thanks, Matthew Karen you want to tackle that sure. So let me start.

Just with the building and construction market because you're right. We did see rates come down, but I would definitely believe that they need to come down further.

For us to see really a recovery in that space and are currently sitting in the mid 6% range. We believe they'll probably need to have a five handle on them on before we see any reasonable recovery and that's something and of course as we said before about 40% of our products are aligned to infrastructure across our entire portfolio. So you know there.

It's a good start but it's not good enough for us to see a recovery.

Uh thank you and and good morning. I was hoping you could talk a little bit more about some of the moving Parts in your polyurethane business. Uh are you seeing any benefits to us MDI margins from tariff impacts that have reduced imports from from places like China? Um, also on the, just on the construction and Market side, I think you mentioned that rates are coming lower, but is it fair to say that? That's not really coming through in the market yet? And then finally, um, do you have a any sort of commentary you can provide on the relative strengths with your polyols business? Versus your ISO? Inh business is 1 holding up a little bit better than the other thank you.

Jim Fitterling: Thanks, Matthew. Karen, you want to tackle that?

Let me answer your second question or maybe it was your first on MTI because we are encouraged by some of the recent rulings that we seen around anti dumping and so in September.

Karen S. Carter: Sure. Let me start just with the building and construction market, because you're right. We did see rates come down, but we definitely believe that they need to come down further for us to see really a recovery in that space. They're currently sitting in the mid-6% range. We believe they'll probably need to have a five-handle on them before we see any reasonable recovery in that segment. Of course, as we said before, about 40% of our products are aligned to infrastructure across our entire portfolio. It's a good start, but it's not good enough for us to see a recovery. Let me answer your second question, or maybe it was your first on MDI, because we are encouraged by some of the recent rulings that we've seen around anti-dumping. In September, the U.S.

The U S Department of Commerce made a preliminary finding them concluding that MDI dumping was occurring by Chinese producers in the United States.

Chinese imports account for about 20% of the MDI MDI market here.

So industry imports are reporting that on top of the pre existing.

Judy that now that we're already there.

Thanks, Matthew Karen. You want to tackle that? Sure. So so let me start, uh, you know, just with the building and construction Market because you're right, you know, we did see rates come down, but we're definitely, uh, believe that they need to come down further um, for us to see, really a recovery. Um, in that space. The currently sitting, um, in the midst 6% range, We Believe they'll probably need to have a 5 handle on them. Um, before we see any reasonable recovery and and that segment, and of course, as we said before about 40% of our products are aligned to infrastructure across our entire portfolio. So you know there it's it's a good start, um, but it's not good enough for us to see a recovery.

The market for China Chinese imports is dissipating quite quickly and so we are seeing some starts of additional volume I'm not yet a lot of pricing there, but we are seeing comes from additional volume and again have been encouraged by those those initial findings.

Karen S. Carter: Department of Commerce made a preliminary finding concluding that MDI dumping was occurring by Chinese producers in the United States. Chinese imports account for about 20% of the MDI market here. Industry imports are reporting that on top of the pre-existing duties that were already there, the market for Chinese imports is dissipating quite quickly. We are seeing some starts of additional volume. Not yet a lot of pricing there, but we are seeing some additional volume. Again, have been encouraged by those initial findings.

Your next question comes from the line of Kevin Mccarthy with vertical Research partners. Please go ahead.

Yes, Thank you and good morning.

Jim I was wondering if you could comment or elaborate a little bit more on the here and now in terms of the demand function.

How.

How are your October and November order books shaping up relative to normal seasonal patterns, just trying to get a sense for.

Your fourth quarter guide of $9 4 billion in sales 725 on EBITDA.

Um, let me answer your second question or maybe it was your first on on MTI because we, we are encouraged by by some of the recent rulings that we've seen, um, around anti-dumping and so in September, uh, the, the US Department of Commerce made a preliminary finding, um, concluding that MDI dumping was occurring by Chinese producers and the United States, uh, Chinese Imports account for about, 20% of the ndi MDI Market here. Um, and so, you know, industry Imports are, are reporting, um, that on top of the pre-existing, uh, duties that, that, that were already there, um, that the market for China Chinese Imports, is, is dissipating quite quickly. And so, you know, we are seeing some starts of additional volume, um, not yet a lot of pricing there, but, but we are seeing some, some additional volume and again have been encouraged, um, by those those initial findings.

Conservative or not you think those levels are.

Operator: Your next question comes from the line of Kevin McCarthy with Vertical Research Partners. Please go ahead.

Relative to the normal seasonal year end movements.

Your next question comes from the line of Kevin McCarthy, with vertical, research Partners, please go ahead.

[Analyst]: Yes, thank you, and good morning. Jim, I was wondering if you could comment or elaborate a little bit more on the here and now in terms of the demand function. How are your October and November order books shaping up relative to normal seasonal patterns? Just trying to get a sense for your fourth quarter guide of $9.4 billion in sales, $7.25 billion on EBITDA. How conservative or not you think those levels are relative to the normal seasonal year-end movements?

Good morning, Kevin.

I'd say a couple of things and then I'll get into the order pattern stuff here in a second.

GDP. There is there was a report out I think Harvard put a report out recently that.

If you looked at the U S economy, and you back out growth from data centers and all of the related investments that are going into that space. The rest of the economy grew at about 1% GDP for the year. So I think that tells you that in some manufacturing sectors, what you're up against.

Yes, thank you. And good morning. Um, Jim. I was wondering if you could comment or elaborate a little bit more on the here. And now uh, in terms of the demands function, uh, how uh, how are your October and November order books shaping up relative to normal seasonal patterns and just trying to get a sense for, you know, your fourth quarter guide, uh, of 9.4 billion in sales, 725 on ebit.

Uh, you know how how conservative or not, you know, you think those levels are um relative to uh the normal seasonal uh year-end movements.

And we know China's domestic.

Jim Fitterling: Good morning, Kevin. I'd say a couple of things, then I'll get into the order pattern stuff here in a second. GDP, there was a report out, I think Harvard put a report out recently that if you looked at the U.S. economy and you backed out the growth from data centers and all of the related investments that are going into that space, the rest of the economy grew at about 0.1% GDP for the year. I think that tells you that in some manufacturing sectors, what you're up against, and we know China's gross domestic product has been under pressure as well because their domestic economy hasn't shown the kind of resilience that they saw. Karen just mentioned what's going on with the MDI anti-dumping duties here. While that means that MDI coming into the U.S. is down about 80%, the product's going somewhere, right?

Gross domestic product has been under pressure as well because of the domestic economy has shown the kind of resilience that they saw.

Good morning, Kevin. Um, I'd say a couple of things, and then I'll get into the order pattern stuff here in a second.

Karen just mentioned, what's going on with <unk>.

MDI.

Anti dumping duties here and while that means that MDI coming into the U S is down about 80%.

Uh, GDP. There's there's a report out. I think Harvard put a report out recently that

Other products going somewhere right is showing up in Europe, and showing up in other areas.

um, if you looked at the US economy and you backed out the growth from data centers and all of the related Investments that are going into that space,

Probably more than likely being dumped there and so we have to pursue those same kind of cases around the world.

And so that's that's the thing that we've got to look at is how does the rest of the GDP to recover when do we start to see durable goods. When we see automotive automobiles move account appliances again some of the other things that are really going to drive.

so, I think that tells you that in some manufacturing sectors, what what you're up against and we know China,

Is domestic.

Gross domestic product has been under pressure as well, because they're domestic. Economy hasn't shown the kind of resilience that they saw.

Some of this economy.

Karen just mentioned, you know, what's going on with MDI? Anti-dumping duties here.

September was a strong month in I think October order books look good.

A little bit early to call November usually when we get to the beginning of the month, we have a really good line of sight to the order books.

And while that means that, you know, MDI coming into the US is down about 80%.

Jim Fitterling: It's showing up in Europe. It's showing up in other areas, and it's probably more than likely being dumped there. We have to pursue those same kind of cases around the world. That's the thing that we've got to look at, is how does the rest of the GDP recover? When do we start to see durable goods move? When do we see automobiles move again, appliances move again, some of the other things that are really going to drive some of this economy? September was a strong month, and I think October order books look good. A little bit early to call November. Usually, when we get to the beginning of the month, we have a really good line of sight to the order books, and way too early to call December. So far, so good on the order books.

Of the products going somewhere, right? It's showing up in Europe, it's showing up in other areas and it's

And way too early to call December.

But so far so good on the order book, So I don't think.

Probably more than likely being dumped there. And so we have to pursue those same kind of cases around the world.

I wouldn't lean into too conservative or too optimistic I'd say.

It kind of right down the middle with our experienced year to date.

Your next question comes from the line of Chris Parkinson with Wolfe Research. Please go ahead.

Um, and so that's that's the thing that we've got to look at is, is how does the rest of the GDP recover? What when do we start to see durable? Goods move when we see Automotive automobiles move again, appliances move again.

some of the other things that are really going to drive,

Uh, some of this economy.

Great. Thank you so much Jim on Slide 10, we can all see that the cost the cost curve is pretty steep when it gets to the third and the fourth quartile then.

We continue to see is some of the rationalization of the asset footprint, presumably in the fourth quartile on an ongoing basis, but.

But at the same time that means certain third quartile assets become the operational fourth quartile assets and the cost curve the perceived cost curve could actually be a little bit flatter than.

Jim Fitterling: I don't think I wouldn't lean into too conservative or too optimistic. I'd say kind of right down the middle with our experience year to date.

Um, September was a strong month, and I think October order books look good. Um, it's a little bit early to call November. Usually, when we get to the beginning of the month, we have a really good line of sight to the order books, and it’s way too early to call December. Um, but so far, so good on the order books. I don't think.

I wouldn't lean into too conservative or too optimistic. I'd I'd say kind of right down the middle with our experience here to date.

Previously previous estimate how if any way whatsoever does that filter in.

Operator: Your next question comes from the line of Chris Perkinson with Wolf Research. Please go ahead.

To your return assumptions your longer term a term or assumptions.

Your next question comes from the line of Chris Perkinson with wolf research. Please go ahead.

[Analyst]: Great. Thank you so much. Jim, on slide 10, we can all see that the cost curve is pretty steep when it gets to the third and the fourth quartiles. We continue to see some of the rationalization of the asset footprint, presumably in the fourth quartile on an ongoing basis. At the same time, that means certain third quartile assets become the operational fourth quartile assets, and the cost curve, the perceived cost curve, could actually be a little bit flatter than previous estimates. How, if any way whatsoever, does that filter in to your return assumptions, your longer-term return assumptions on Alberta? How does that help you triangulate your decision-making process over the next 6 to 12 months? Is it simply just too early to tell?

On Alberta, and how does that help.

Help you triangulate your decision making process over the next six months to 12 months or is it simply just too early to tell.

Yes, Chris it's a good question I mean, you know these curves change over time that gets deeper they flattened out of different periods of time I'd say, it's been pretty steady in this kind of range. Just recently I think you've seen some moves that naphtha that brought some things down.

But at the same time propane comes down as well.

So that gives us a little bit of pro nap advantage in Europe, so things move around.

What I would say is that in any scenario that Canadian asset will be a low cost asset that would be a first quartile assets I think we look at it that way and then we look at the rest of the footprint and through the cycle peak to peak trough to trough.

Great, thank you so much. Um, Jim on, slide 10, we can all see that the costs, you know, the cost curve is pretty steep when it gets to the third and the fourth quartiles. And you know, we continue to see some of the rationalization, the asset footprint, presumably in the fourth quartile and on ongoing basis, you know, but at the same time that means certain third quartile assets become the operational. Fourth quartile assets, and the cost curve that perceived cost curve could actually be a little bit flatter than, you know, previous, you know, previous estimates. How if any way whatsoever does that filter in um to your return assumptions, your longer term of term assumptions uh on you know Alberta and how does that help? You know help you triangulate your decision-making process over the next you know, 6 to 12 months or is it simply just too early to tell

Jim Fitterling: Yeah, Chris, it's a good question. I mean, you know, these curves change over time. They get steep, and they flatten out at different periods of time. I'd say it's been pretty steady in this kind of range. Just recently, I think you've seen some moves in naphtha that have brought some things down. At the same time, you know, propane's come down as well, and that gives us a little bit of pro-naphtha advantage in Europe. Things move around. What I would say is that in any scenario, that Canadian asset will be a low-cost asset, and it'll be a first quartile asset. I think we look at it that way. Then we look at the rest of the footprint, and through the cycle, peak to peak, trough to trough, you want to try to make sure you're in a position to maximize the next peak for the shareholders.

You want to try to make sure you're in a position to maximize the next peak for the shareholders.

And when you get to the next trough you've got your high cost assets out of there and that's the next trough you've got <unk>.

Ya Chris, it's a good question. I mean you know these curves change over time uh they get Steep and they they flatten out a different periods of time. I'd say it's been pretty steady in this kind of range. Just recently, I think you've seen some moves and Napa that are brought some things down.

More assets to the left of the center point of that line and so thats our decision making right now.

But at the same time, you know, propane's come down as well. And so, you know, that gives us a little bit of a pricing advantage in Europe. So things move around.

The focus in Europe has been right sized to the European market.

And I think the big question, Mark is going to be our loan with the European market continues to stay at that size will continue to do well.

Stop or continued to shrink.

Uh, what I would say is that in any scenario uh that Canadian asset will be a low cost asset and it'll be a first quartile asset. So I think we look at it that way and then we look at the rest of the footprint and through the cycle

And then China I think the other factor that comes into us.

Peak to peak, trough to trough.

The trade and how trade is going to be regulated.

Jim Fitterling: When you get to the next trough, you've got your high-cost assets out of there. At the next trough, you've got more assets to the left of the center point of that line. That's our decision-making right now. The focus in Europe has been right-sizing it to the European market. I think the big question mark is going to be how long will the European market continue to stay at that size. Will it continue to stop or continue to shrink? Then, you know, China, I think the other factor that comes in is the trade and how trade is going to be regulated because a lot of capacity that's been built there is not low-cost. If countries around the world are trying to keep their manufacturing industries, they're going to have to put up some protection barriers to keep product from being dumped.

You want to try to make sure you're in a position to maximize the next Peak for the shareholders.

Because a lot of capacity that's been built there is not a low cost.

Countries around the world are trying to keep their manufacturing industries, they're going to have to put up some protection barriers to keep products being dumped and we're starting to see that happen now as a result.

And when you get to the next trough, you've got your high cost assets out of there and at the next trough you've got more assets to the left of the center point of that line. And so that's our decision-making right now.

Uh, the focus in Europe has been right size in it to the European market.

Those are the big factors and I think we've tried to factor in that and then the timing of the demand come back.

Um and I think the big question mark is going to be how long will the European market continue to stay at that size? Will it continue to will it stop or continue to shrink

Think about what we were talking about on supply demand rationalization before.

um, and then, you know, China, I think the other factor that comes in is

You have got 10% of global capacity, either announced or talked.

The trade and and how trade is going to be regulated.

<unk> talked about in terms of coming out.

That would be a significant bump up in ethylene operating rate.

Karen mentioned polyethylene demand, which has been for a low slow growth economy has been pretty good volume we have.

Jim Fitterling: We're starting to see that happen now as a result. Those are the big factors. I think we try to factor in that and then the timing of the demand to come back. If you think about what we were talking about on supply-demand rationalization before, you've got 10% of global capacity either announced or talked about in terms of coming out. That would be a significant bump up in ethylene operating rate. Karen mentioned polyethylene demand, which has been, for a low slow-growth economy, pretty good volume. We haven't seen the pricing power yet. I do think the world's not going to sit at this slow-growth place forever. That capacity comes out, that demand rate kicks up. Pretty quickly, you get yourself into that 85+% operating rate, and then you start to see a price power, and you start to see move-up that's going to really benefit the investors.

Um, because a lot of capacity has been built, there is not low cost and if um, countries around the world are trying to keep their manufacturing Industries, they're going to have to put up some protection. Barriers to keep product from being dumped.

Haven't seen the pricing power yet.

And we're starting to see that happen now as a result.

I do think the world isn't going to say that the slow growth place forever. So that capacity comes out that demand rate ticks up.

Those, those are the big factors and and I think we try to factor in that.

Pretty quickly you get yourself into that 85 plus percent operating rate and then you start to see price power and you start to see move up that's going to really benefit.

And then the timing of the demand to come back. So if you think about what we were talking about on Supply demand rationalization before,

You've got 10% of global capacity.

<unk>.

Either announced or or talked about in terms of coming out.

Your next question comes from the line of Duffy Fischer with Goldman Sachs. Please go ahead.

That would be a significant bump up in ethylene, operating rate.

Yes, good morning.

Question two questions, maybe one just to be explicit your guide for Q4.

Karen mentioned, polyethylene demand, which has been for a low slow growth. Economy has been pretty good volume.

What are you baking in for ethane pricing doing in the U S. How much of that <unk> baked in and then your sequential operating rates do they stay flat would be question. One just around the fourth quarter and then second question is have you guys done work or do you have a view on what you think happens with natural gas pricing.

But I do think the world's not going to sit at this slow growth Place forever. So that capacity comes out that demand rate kicks up.

Pretty quickly, you get yourself into that 85 Plus percent operating rate, and then you start to see a price power, and you start to see move up that's going to really benefit the investors.

In the U S. As we start to export more natural gas so.

Operator: Your next question comes from the line of Duffy Fischer with Goldman Sachs. Please go ahead.

Our view on where 26 natural gas price goes.

Your next question comes from the line of Duffy Fischer with Goldman Sachs. Please go ahead.

[Analyst]: Good morning. Two questions maybe. One, just to be explicit, your guide for Q4, what are you baking in for ethane pricing doing in the U.S.? How much of that $0.05 do you have baked in? Your sequential operating rates, do they stay flat? That would be question one, just around the fourth quarter. The second question is, have you guys done work, or do you have a view on what you think happens with natural gas pricing in the U.S. as we start to export more natural gas? A view on where 2026 natural gas price goes.

Good morning Duffy.

On ethane.

<unk>.

On the ethane in the quarter.

Things are moving as you see but I mean natural gas production is good the U S has plenty of natural gas liquids. So that's all going to be a function of operating rates. Our view on operating rates as the assets are going to run or in the Americas. So I think that will come through natural gas.

Weather is going to be a big factor always is this time of year.

<unk> seen it it has come off.

Strip was for the beginning of the quarter, it's come off because we're still producing products still going into inventory there hasnt been as much demand for heating and so we've had this kind of warmer September October I think which has helped into the strip starting to cool off a little bit now so we'll watch the IND.

Yeah, good morning. Um, question, well 2 questions, maybe so 1 just to be explicit your guide for Q4. Um, what are you baking in for ethane pricing doing in the US? Uh, how much of that 5 cents? Do you have baked in and then your sequential operating rates do they? Stay flat would be question. 1 just around the fourth quarter and then second question is, have you guys done work? Or do you have a view on what you think happens with natural gas pricing? Uh, in the us as we start to export more natural gas. So, you know, a view on where 26 natural gas price goes.

Jim Fitterling: Good morning, Duffy. On ethane, we got $0.04 on the ethane in the quarter. Ethane's moving, as you see, but I mean, natural gas production is good. The U.S. has plenty of natural gas liquids. It's all going to be a function of operating rates. Our view on operating rates is the assets are going to run hard in the Americas. I think that'll come through. Natural gas, weather is going to be a big factor, always is this time of year. You've seen it. It has come off, you know, where the strip was for the beginning of the quarter. It's come off because we're still producing products, still going into inventory. There hasn't been as much demand for heating. We've had this kind of warmer September, October, I think, which has helped into this strip, starting to cool off a little bit now. We'll watch the inventory levels.

Good morning. Duffy um on ethane. Uh we got 4 cents in on the ethane in the in the quarter.

And Tory levels that will be the biggest factor there.

But the near term moves on gas have been positive and as gas moves down you'll probably see the frac spreads will stay about the same.

Hey, bring ethane down the other wildcard to watch.

Does that then get in the middle of a trade negotiations between U S and China. It did.

Previous round and so what happens with.

Ethane exports.

Not advocating for anything here I'm, just saying that.

China is a big receiver of ethane exports and.

Jim Fitterling: That'll be the biggest factor there. The near-term moves on gas have been positive. As gas moves down, you'll probably see the frac spreads will stay about the same. That may bring ethane down. The other wild card to watch is, does ethane get in the middle of a trade negotiation between the U.S. and China? It did in the previous round. What happens with ethane exports? I'm not advocating for anything here. I'm just saying that China is a big receiver of ethane exports. It got treated a little bit like rare earths in the last discussion, and we have to watch that.

So it got treated a little bit like rare Earths in the last discussion that we have to watch that.

Your next question comes from the line of Patrick Cunningham with Citi. Please go ahead.

Everything's moving as as you see. But I mean, natural gas. Production is good. The US has plenty of Natural Gas Liquids. So it's all going to be a function of operating rates. Our view on operating rates, is the assets are going to run hard in the Americas. So I think that'll come through natural gas. Um, weather is going to be a big factor. Always is this time of year. Um, and you've seen it, it has come off, you know, where, where the strip was for the beginning of the quarter. It's come off because, um, we're still producing, uh, products still going into inventory. There hasn't been as much demand for heating and so, you know, we've had this, you know, kind of warmer September October. I think, which is helped into this strip starting to cool off a little bit now. So we'll watch the inventory levels. That'll be the biggest Factor there, um but the near-term moves on gas have been positive and as gas moves down you'll probably see the Frac spreads will stay about the same so that maybe may bring ethane down the other wild card to watch.

Hi, Good morning, you talked quite a bit about volume gains for new investments in the U S Gulf coast and wrap things picking up share in better markets. I guess first can you help quantify the run rate earnings contribution from some of these growth investments and are there any other incremental investments or tailwind we should be aware of.

Is does that thing get in the middle of a trade negotiation between us and China? It did.

In the previous round. And so what happens with the...

Additional uplift next year.

Maybe ask Darren to make a few comments on the run rate investments yeah, absolutely. Thanks for the question. So just to clarify that the two.

FN exports. Um, you know, I'm not advocating for anything here. I'm just saying that, um, you know, China's a big receiver of ethane exports and you know, so it got treated a little bit, like rare Earths in the last discussion that we have to watch that.

Operator: Your next question comes from the line of Patrick Cunningham with CITI. Please go ahead.

Both assets that are now up and running are the poly seven units down in the U S. Gulf Coast and then Dr. Capsulation capacity. That's also down in the U S. Gulf Coast. So we expect that from a full run rate perspective on an annualized basis that that will deliver $100 million to $200 million.

Your next question comes from the line of Patrick Cunningham with City. Please go ahead.

[Analyst]: Hi, good morning. You talked quite a bit about volume gains from new investments in the US Gulf Coast and referenced picking up share in better markets. Can you help quantify the run-rate earnings contribution from some of these growth investments? Are there any other incremental investments or tailwinds we should be aware of that give additional uplift next year?

And so far this year and so I'll talk about third quarter in particular, its around $40 million in the quarter and we expect that continue into fourth quarter.

Hi, good morning. Uh, you talked quite a bit about the volume games from new investments in the US Gulf Coast and, and reference picking up, Sharon better markets, I guess, first, can you help quantify the Run rate earnings contribution from some of these growth Investments? And are there any other incremental Investments or Tailwind? We should be aware of that gives additional uplift next year.

Jim Fitterling: Maybe ask Karen S. Carter to make a few comments on the run-rate investments.

And then the.

Karen S. Carter: Yeah, absolutely. Thanks for the question. Just to clarify, the two growth assets that are now up and running are the Poly7 unit down in the U.S. Gulf Coast and then the Alcoxylation capacity that's also down in the U.S. Gulf Coast. We expect that from a full run-rate perspective on an annualized basis, that will deliver $100 to $200 million. So far this year, and I'll talk about third quarter in particular, it's around $40 million in the quarter. We expect that to continue into the fourth quarter.

The other factor Patrick that I would just add in as well.

We're balanced now on ethylene in the marketplace and so what that allows us to do is capturing the full integrated margin on that ethylene versus solid merchant ethylene yes.

Yeah.

Your next question comes from the line of Matthew D O.

With Bank of America. Please go ahead.

Good morning.

I appreciate the view that P/e demand was going to go.

Maybe I'll ask Aaron to make a few comments on the run rate investments. Yeah, absolutely. Um, thanks for the question. So, just to clarify, the two growth assets that are now up and running are the Poly 7 units down, and the US Gulf Coast, and then the YCAP (Yacht Capsulation) capacity, that's also down in the US Gulf Coast. So, you know, we expect that from a full run rate perspective, on an annualized basis, that will deliver $100 million to $200 million. And so far this year, and so I'll talk about the third quarter in particular, it's around $40 million in the quarter, and we expect that to continue into the fourth quarter.

ROE in excess of GDP, but.

Jim Fitterling: The other factor, Patrick, that I would just add in is, you know, we're balanced now on ethylene in the marketplace. That allows us to capture the full integrated margin on that ethylene versus selling merchant ethylene.

As you look across.

Sorry, a lot of the chemical chain.

And trends Youre seeing in China is it possible the multiplier has been diluted because.

and then the other fact, the other Factor Patrick that I would just add in is

Domestic sales year to date are up 1%, which is below expectations and below GDP, but I know theres a lot of noise.

Karen S. Carter: Yes.

You know we were balanced now on ethylene in the marketplace. And so what that allows us to do is capture the full integrated margin on that ethylene versus selling merchant ethylene. Yes.

Just to put it in context, I guess, a higher level inventories are down in September.

Operator: Your next question comes from the line of Matthew Dio with Bank of America. Please go ahead.

For polyethylene, but that's because the industry took rates down.

Your next question comes from the line of Matthew do.

But how do I rashly or plan or the expectation for that to keep going at lower rates because I know there's also the view that the U S will run harder and.

With Bank of America, please go ahead.

[Analyst]: Morning. I appreciate the view that PE demand is going to grow in excess of GDP. As we look across a lot of the chemical chain and trends you're seeing in China, is it possible the multiplier has been diluted? Because domestic sales year-to-date are up 1%, which is below expectation, below GDP. I know there's a lot of noise. To put in context, at a higher level, inventories are down in September for polyethylene, but that's because the industry took rates down. How do I rationalize? Is the plan or the expectation for that to keep going at lower rates? I know there's also the view that the U.S. will run harder. I ask this because it reflects a larger question that we have. If we're still going to be adding capacity in things like MDI and polyethylene, is it possible that U.S.

Morning. Um,

I, I appreciate the view that PE demand is going to grow in excess of GDP, but

I guess I ask this because it reflects a larger question that we have.

As we look across, sorry, a lot of the chemical change.

If we're still going to be adding capacity in things like MDI in polyethylene is.

Is it possible that U S assets just half the day rate, if we can't take capacity out in Europe anymore.

Yes, there's a lot there's a lot there Matthew let me take a couple of steps on it so domestic sales and production are two different things and I think as I mentioned before the U S. GDP ex data centers and that has been relatively low.

Been contacts. I guess a higher level, right? A inventories are down in September.

For polyethylene, but that's because the industry took rates down.

But how do I rationalize? Like, is this a plan or the expectation for that to keep going at lower rates? Because I know there's also the view that the U.S. will run harder and...

I think the multiplier is still there.

It's been in around a one four X GDP multiplier feels like it's still there.

I guess I asked this because it reflects a larger question that we have. It's like.

if we're still going to be adding capacity and things like MDI, and polyester, and

[Analyst]: assets just have to derate if we can't take capacity out in Europe anymore?

The Hay day of the big ramp up in plastics. It was probably in the one five range.

Is it possible that us assets just have to derate? If, if we can't take capacity out in Europe anymore?

<unk>.

I've seen estimates from third parties that could go as low as $1 two that wouldn't be surprising as the industry matures.

Jim Fitterling: Yeah, there's a lot there, Matthew. Let me take a couple of stabs at it. Domestic sales and production are two different things. I think, you know, as I mentioned before, the U.S. GDP ex-data centers, and that has been relatively low. I think the multiplier is still there. It's been in around the 1.4x GDP multiplier. Feels like it's still there. I mean, at the heyday of the big ramp-up in plastics, it was probably in the 1.5 range. I've seen estimates from third parties that could go as low as 1.2. That wouldn't be surprising as the industry matures. I think product mix is the other thing that factors in. You know, we're geared more towards elastomers, about 30% of the capacity being in functional polymers. Obviously, a lot in flexible packaging, linear low density is a big part of what we do.

And then I think product mix is the other thing that factors in.

We are geared more towards elastomers about 30% of the capacity being in functional polymers.

And then obviously a lot in flexible packaging and linear low density is a big part of what we do low density is a big part of what we do.

Yeah, there's a lot there's a lot there. Matthew, let me take a couple of of stabs at it. So domestic sales and production are are 2 different things. And I think you know, as I mentioned before the US GDP X data centers and that has been relatively low. So I think the multiplier is still there.

We are pushing for a lot of capacity adds in isocyanate is here.

The world is enough isocyanate capacity, so I don't think youre seeing that coming on I think it's more.

More a question of rebalancing of the trade.

And then taking people off the sidelines because theres a lot of people on the sidelines right now I'd say the supply chain is more hand to mouth and theres not a lot of inventory build anywhere.

Um, it's been in around the 1.4 X GDP multiplier feels like it's still there. I mean, it's at the Heyday of the big ramp up in Plastics. It was probably in the 1.5 range. Um, I've seen estimates uh from third parties that could could go as low as 1.2. That wouldn't be surprising as as the industry matures. Um, and then I think product mix is the other thing that factors in, you know, we're, we're geared more towards elastomer

Maybe maybe in the year, we've seen a little bit of.

Jim Fitterling: Low density is a big part of what we do. I think we're pushing for a lot of capacity adds in isocyanates here. I think the world has enough isocyanates capacity. I don't think you're seeing that coming on. I think it's more a question of rebalancing of the trade and then taking people off the sidelines because there's a lot of people on the sidelines right now. I'd say the supply chain is more hand-to-mouth. There's not a lot of inventory build anywhere. Maybe in the year, we've seen a little bit of early moves on imports and exports because people are trying to get ahead of tariff dates like the 1st of October. You see that drive certain shifts. We saw it in China with their production rates and exports. Those are the things. At the high level, I don't think the GDP multiplier has shifted.

Early moves on imports and exports because people are trying to get ahead of tariff data by the first of October.

Is about 30% of the capacity being in functional polymers. Um, and then obviously a lot and flexible packaging, linear low, density is a big part of what we do low density is a big part of what we do.

You see that drive certain shifts we saw it in China with their production rates and exports.

But those are the things, but at the high level I don't think the GDP multiplier has shifted.

I think we're pushing for a lot of capacity ads in isocyanates here. I think the world has enough isocyanate capacity, so I don't think you're seeing that coming on. I think it's more a question of rebalancing the trade.

This concludes our Q&A session I will now turn the conference back over to Andrew Reicher for closing remarks.

Thank you everyone for joining our call and we appreciate your interest in Dow for your reference a copy of our transcript will be posted on dows website within 48 hours. This concludes our call.

And then taking people off the sidelines because there's a lot of people on the sidelines. Right now, I'd say the supply chain is more hand to mouth, you know, there's not a lot of inventory build anywhere.

Maybe, maybe in the year, we've seen a little bit of.

This concludes today's conference call you may now disconnect.

Early moves on imports and exports because people are trying to get ahead of tariff dates like the 1st of October, you know, you see that drive certain shifts and we saw it in China, with their production, rates and exports.

But those are the things but at the high level I don't think the GDP multiplier has shifted.

Operator: This concludes our Q&A session. I will now turn the conference back over to Andrew Riker for closing remarks.

This concludes our Q&A session, I will now turn the conference back over to Andrew Riker for closing remarks.

Andrew Riker: Thank you, everyone, for joining our call, and we appreciate your interest in Dow Inc. For your reference, a copy of our transcript will be posted on Dow Inc.'s website within 48 hours, which concludes our call.

Operator: This concludes today's conference call. You may now disconnect.

Thank you everyone, for joining our call and we appreciate your interest in da for your reference. A copy of a transcript will be posted on Dallas website within 48 hours which concludes our call.

This concludes today's conference call. You may now disconnect.