Dow Q4 2025 Dow Inc Earnings Call | AllMind AI Earnings | AllMind AI
Q4 2025 Dow Inc Earnings Call
And answer session, we'll follow the formal presentation.
If you would like to ask a question during that time, please press star followed by 1 on your telephone keypad.
As a reminder, this conference is being recorded.
I would now like to turn the call over to Dao investor relations Vice President. Andrew Riker Mr. Riker, you may begin.
Good morning. Thank you for joining today. The accompanying slides are provided through this webcast and posted on our website. I am Andrew rker thousand, investor relations. Vice president leading, today's call are Jim Fed. Chair and chief executive officer, karen s, Carter Chief Operating Officer and Geoff, Tate Chief Financial Officer.
We will 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 that is posted on our website.
On slide 2 is our agenda. For today's call, Jim will review our fourth quarter and full year results, Karen will provide an overview of our operating segment performance, and Jeff will share some details on the macroeconomic environment and our modeling guidance for the first quarter.
We will also provide updates on several of our strategic priorities including the transformational work that we announced earlier today an update on Alberta project and several of our in-flight actions that aim to provide near-term, cash support and ensure we maintain our financial flexibility.
Following that we will take your questions now, let me turn the call over to Jim.
Thank you, Andrew beginning on slide 3, team. Now, continued to execute with discipline, during a year marked by persistent macroeconomic challenges and trade and policy volatility, as well as anti-competitive behaviors by certain industry players.
In the face of external pressures, we manage what was within our control.
Our fourth quarter, operating IBA de was 741 million.
Reflecting an expected sequential decline from lower seasonal, demand and typical margin compression across many end markets.
Located in across 2025, we accomplished several impactful near and longer term Milestones. All, while the market wasn't providing many Tailwind,
We identified more than 6.5 billion dollars at near-term. Cash support items and delivered. Well over half in 2025 including the accelerated delivery of our in-ear cost savings from our 1 billion dollar cost out program.
And we further strengthen our Global manufacturing footprint.
This concludes our announced plans to shut down Upstream high-cost assets as well as the completion of our remaining incremental growth Investments, which served Downstream higher value markets, that are growing above GDP.
We are also once again recognized as 1 of the world's best workplaces.
This reflects direct feedback from our employees about the culture and talent that continues to drive down forward.
As we move into 2026, we recognize that many markets are fundamentally shifting.
Geopolitical Dynamics rapid advances in Ai and Automation and economic volatility. Require new breakthrough approaches greater agility and continued technological adoption.
That's why we announced our transform to outperform program earlier today.
This work Builds on our track record of taking proactive measures to help Dow and it represents a fundamental change in how we will operate and serve our customers.
We believe this will strengthen our long-term competitive position through every part of the economic cycle.
And lastly, we have finalized a value maximizing path forward for our path to zero project in for Saskatchewan.
We'll share more details on all of this later in the call. But before that Aaron will cover our fourth quarter, operating segment performance.
And good morning to everyone joining today.
Of cost savings measures gained significant traction across every business in the second half of 2025.
Pressures.
We are delivering on our commitments and self-help actions.
Beginning with our packaging and Specialty Plastics, segment, on slide 4.
Volume decreased 2% year-over-year.
Due to lower Merchant, olifant sales in Europe, the Middle East Africa, and India following our previously announced decision to idle 1 of our crackers in the Netherlands.
Polyethylene sales volume increased year-over-year and grew sequentially driven by continued Global demand growth.
Operating evit was 215 million down from the year ago, period driven by lower integrated margins.
Sequentially. Operating ebit and increase by 16 million.
This was driven by the company's cost savings efforts throughout the quarter.
Which more than offset margin compression.
In addition, to lower fixed costs.
Packaging and Specialty Plastics benefited from higher licensing, Revenue increased energy sales and higher, sequential volumes and polyethylene.
Through a challenging environment team Dow set an annual ethylene production record for the third consecutive year.
This High, the strength of our cost Advantage asset footprint. Our focus on operational excellence.
And the early impact from the startup of our new poly 7 polyethylene train in the US Gulf Coast, which serves high value Downstream markets.
Next turning to our industrial intermediate and infrastructure. Segment on slide 5.
Overall demand for industrial applications remains challenged which continues to pressure the industry and our businesses.
Karen S. Carter: Driven by lower integrated margins. Sequentially, operating EBIT increased by $16 million. This was driven by the company's cost-savings efforts throughout the quarter, which more than offset margin compression. In addition to lower fixed costs, packaging and specialty plastics benefited from higher licensing revenue, increased energy sales, and higher sequential volumes in polyethylene. Through a challenging environment, Team Dow set an annual ethylene production record for the third consecutive year. This highlights the strength of our cost-advantaged asset footprint, our focus on operational excellence, and the early impact from the startup of our new Poly 7 polyethylene train in the U.S. Gulf Coast, which serves high-value downstream markets. Next, turning to our industrial, intermediate, and infrastructure segment on slide 5. Overall demand for industrial applications remains challenged, which continues to pressure the industry and our businesses.
Karen Carter: Driven by lower integrated margins. Sequentially, operating EBIT increased by $16 million. This was driven by the company's cost-savings efforts throughout the quarter, which more than offset margin compression. In addition to lower fixed costs, packaging and specialty plastics benefited from higher licensing revenue, increased energy sales, and higher sequential volumes in polyethylene. Through a challenging environment, Team Dow set an annual ethylene production record for the third consecutive year. This highlights the strength of our cost-advantaged asset footprint, our focus on operational excellence, and the early impact from the startup of our new Poly 7 polyethylene train in the U.S. Gulf Coast, which serves high-value downstream markets. Next, turning to our industrial, intermediate, and infrastructure segment on slide 5. Overall demand for industrial applications remains challenged, which continues to pressure the industry and our businesses.
Net sales for the segment or 2.7 billion dollars down 9% versus the same period last year.
Sequentially, net sales decreased 5%, mainly due to lower local prices and seasonally lower building and construction volume.
Volume decreased, 1% year-over-year primarily driven by lower volumes and polyurethane and construction chemicals.
this was partly offset by higher than typical seasonal demand for deicing fluids, which have continued into 2026
Through a challenging environment, the team set and annual ethylene production records for the third consecutive year.
Operating ebit decreased 285 million versus the same quarter last year and 154 million sequentially driven by lower integrated margins.
This High, the strength of our cost Advantage asset footprint. Our focus on operational excellence.
Our cost Savings in both businesses, help, offset some of the decline.
And the early impact from the startup of our new poly 7 polyethylene, train, and the US Gulf Coast, which serves high value Downstream markets.
We also completed the shutdown of our higher cost Upstream propylene oxide unit and Freeport Texas.
Next turning to our industrial intermediate and infrastructure. Segment on slide 5.
Rationalizing. Approximately 20% of North American Poe industry capacity.
Moving to the performance materials and coding segments on slide 6.
Karen S. Carter: Net sales for the segment were $2.7 billion, down 9% versus the same period last year. Sequentially, net sales decreased 5%, mainly due to lower local prices and seasonally lower building and construction volumes. Volume decreased 1% year-over-year, primarily driven by lower volumes in polyurethanes and construction chemicals. This was partly offset by higher-than-typical seasonal demand for deicing fluids, which have continued into 2026. Operating EBIT decreased $285 million versus the same quarter last year and $154 million sequentially, driven by lower integrated margins. Our cost savings in both businesses helped offset some of the decline. We also completed the shutdown of our higher-cost upstream propylene oxide unit in Freeport, Texas, rationalizing approximately 20% of North American PO industry capacity. Moving to the performance materials and coating segment on slide six. Net sales were $1.9 billion, representing a 6% decrease compared to the same period last year.
Net sales for the segment were $2.7 billion, down 9% versus the same period last year. Sequentially, net sales decreased 5%, mainly due to lower local prices and seasonally lower building and construction volumes. Volume decreased 1% year-over-year, primarily driven by lower volumes in polyurethanes and construction chemicals. This was partly offset by higher-than-typical seasonal demand for deicing fluids, which have continued into 2026. Operating EBIT decreased $285 million versus the same quarter last year and $154 million sequentially, driven by lower integrated margins. Our cost savings in both businesses helped offset some of the decline. We also completed the shutdown of our higher-cost upstream propylene oxide unit in Freeport, Texas, rationalizing approximately 20% of North American PO industry capacity. Moving to the performance materials and coating segment on slide six. Net sales were $1.9 billion, representing a 6% decrease compared to the same period last year.
Overall demand for industrial applications remains challenged which continues to pressure the industry and our businesses.
Net sales were 1.9 billion dollars, representing a 6% decrease compared to the same period last year.
Net sales for the segment or 2.7 billion dollars down 9% versus the same period last year.
This decline was primarily driven by a 4% reduction in local prices across both businesses.
Sequentially, net sales decreased 5%, mainly due to lower local prices and seasonally lower building and construction volume.
Sequentially, net sales, decline reflecting, typical seasonal slowdowns, particularly in building and construction and markets.
Volume decreased 1% year-over-year, primarily driven by lower volumes in polyurethanes and construction chemicals.
Volumes decreased 2% year-over-year.
This was partly offset by higher-than-typical seasonal demand for deicing fluids, which has continued into 2026.
In lower Supply availability from planned maintenance and codings and performance monomers while volumes and consumer Solutions were flat.
Operating EBIT decreased $285 million versus the same quarter last year and $154 million sequentially, driven by lower integrated margins.
Even with the impacts from tariffs uncertainties we delivered. Increased volumes in 2025 marking the second consecutive year of growth for our Downstream silicons franchise.
Our cost savings in both businesses helped offset some of the decline.
The business remains focused on shifting, our mix towards higher value products, while reducing Upstream capacity.
We also completed the shutdown of our higher cost Upstream propylene oxide unit in Freeport Texas.
Rationalizing approximately 20% of North American POE industry capacity.
The strategy advances are previously announced European asset actions, including plans to shut down. Our basic philosophies plant and bury UK by mid 2026.
Moving to the performance materials and coding segments on slide 6.
Karen S. Carter: This decline was primarily driven by a 4% reduction in local prices across both businesses. Sequentially, net sales declined, reflecting typical seasonal slowdowns, particularly in building and construction end markets. Volumes decreased 2% year-over-year, driven by lower supply availability from planned maintenance and coatings and performance monomers, while volumes and consumer solutions were flat. Even with the impacts from tariff uncertainties, we delivered increased volumes in 2025, marking the second consecutive year of growth for our downstream silicones franchise. The business remains focused on shifting our mix towards higher-value products while reducing upstream capacity. This strategy advances our previously announced European asset actions, including plans to shut down our basic siloxanes plant in Barry, UK, by mid-2026. Operating EBIT for the segment increased by $34 million compared to the year-ago period, driven by strong demand for our electronics and mobility applications, as well as our ongoing efforts to reduce costs.
This decline was primarily driven by a 4% reduction in local prices across both businesses. Sequentially, net sales declined, reflecting typical seasonal slowdowns, particularly in building and construction end markets. Volumes decreased 2% year-over-year, driven by lower supply availability from planned maintenance and coatings and performance monomers, while volumes and consumer solutions were flat. Even with the impacts from tariff uncertainties, we delivered increased volumes in 2025, marking the second consecutive year of growth for our downstream silicones franchise. The business remains focused on shifting our mix towards higher-value products while reducing upstream capacity. This strategy advances our previously announced European asset actions, including plans to shut down our basic siloxanes plant in Barry, UK, by mid-2026. Operating EBIT for the segment increased by $34 million compared to the year-ago period, driven by strong demand for our electronics and mobility applications, as well as our ongoing efforts to reduce costs.
Net sales were $1.9 billion, representing a 6% decrease compared to the same period last year.
Operating ebit for the segment, increased by 34 million, compared to the year ago, period driven by strong demand for our electronics and Mobility applications as well as our ongoing efforts to reduce costs.
This decline was primarily driven by a 4% reduction in local prices across both businesses.
Sequentially, net sales, decline reflecting, typical seasonal slowdowns, particularly in building and construction and Market.
On a sequential basis. Operating ebit was down, 55 million, largely driven by lower monomer Supply, availability from our planned turnaround and Deer Park Texas, as well as typical low seasonal demand.
To summarize our fourth quarter performance.
Volumes decreased 2% year-over-year, driven by lower supply availability from planned maintenance and Coatings and Performance Monomers, while volumes in Consumer Solutions were flat.
Even with continued industry, challenges and normal seasonality throughout our portfolio. Our self-help actions enabled us to deliver results ahead of expectations.
Even with the impacts from tariff uncertainty, we delivered increased volumes in 2025, marking the second consecutive year of growth for our Downstream Silicones franchise.
In 2026, we will continue to operate with discipline, while taking decisive measures to adapt to Market realities, and transform our business for long-term resilience.
The business remains focused on shifting, our mix towards higher value products, while reducing Upstream capacity.
but the first, I'll turn the call over to Jeff, who will share some macroeconomic insights, and our outlook for the first quarter,
Thank you, Karen. Good morning to everyone participating on today's call.
The strategy advances are previously announced European asset actions, including plans to shut down our basic, philos plant and bury UK by mid 2026.
57 shows that across the broader macroeconomic landscape. There are mixed signals.
Karen S. Carter: On a sequential basis, operating EBIT was down $55 million, largely driven by lower monomer supply availability from our planned turnaround in Deer Park, Texas, as well as typical low seasonal demand. To summarize our Q4 performance, even with continued industry challenges and normal seasonality throughout our portfolio, our self-help actions enabled us to deliver results ahead of expectations. In 2026, we will continue to operate with discipline while taking decisive measures to adapt to market realities and transform our business for long-term resilience. I will touch on all of that shortly, but first, I'll turn the call over to Jeff, who will share some macroeconomic insights and our outlook for Q1.
On a sequential basis, operating EBIT was down $55 million, largely driven by lower monomer supply availability from our planned turnaround in Deer Park, Texas, as well as typical low seasonal demand. To summarize our Q4 performance, even with continued industry challenges and normal seasonality throughout our portfolio, our self-help actions enabled us to deliver results ahead of expectations. In 2026, we will continue to operate with discipline while taking decisive measures to adapt to market realities and transform our business for long-term resilience. I will touch on all of that shortly, but first, I'll turn the call over to Jeff, who will share some macroeconomic insights and our outlook for Q1.
Operating EBIT for the segment increased by $34 million compared to the year-ago period, driven by strong demand for our electronics and mobility applications as well as our ongoing efforts to reduce costs.
And several of our end Market verticals and key geographies recent developments are showing some encouraging signals in response to structural industry challenges as well as trade and tariff uncertainty.
This includes several announcements of further ethylene capacity rationalizations.
As well as the elimination of vat, export rebates on select products in China.
On a sequential basis, operating EBIT was down $55 million, largely driven by lower monomer supply availability from our planned turnaround in Deer Park, Texas, as well as typical low seasonal demand.
To summarize our fourth quarter performance.
Across our packaging Market vertical. Global polyethylene. Fundamentals are expected to remain stable heading into 2026.
From a price standpoint ACC inventory. Shows a net draw in 2025
Even with continued industry, challenges and normal seasonality throughout our portfolio. Our self-help actions enabled us to deliver results ahead of expectations.
which should provide support for the price increases we've announced for January and February.
And 2026, we will continue to operate with discipline, while taking decisive measures to adapt to Market realities, and transform our business for long-term resilience.
Across the infrastructure sector building and construction conditions are likely to gradually improve as interest rate, Cuts over the past 12 months, gained traction.
Jeff Tate: Thank you, Karen. Good morning to everyone participating on today's call. Slide 7 shows that across the broader macroeconomic landscape, there are mixed signals in several of our end market verticals and key geographies. Recent developments are showing some encouraging signals in response to structural industry challenges, as well as trade and tariff uncertainties. This includes several announcements of further ethylene capacity rationalizations, as well as the elimination of VAT export rebates on select products in China. Across our packaging market vertical, global polyethylene fundamentals are expected to remain stable heading into 2026. From a price standpoint, ACC inventory shows a net draw in 2025, which should provide support for the price increases we've announced for January and February. Across the infrastructure sector, building and construction conditions are likely to gradually improve as interest rate cuts over the past 12 months gain traction.
Jeff Tate: Thank you, Karen. Good morning to everyone participating on today's call. Slide 7 shows that across the broader macroeconomic landscape, there are mixed signals in several of our end market verticals and key geographies. Recent developments are showing some encouraging signals in response to structural industry challenges, as well as trade and tariff uncertainties. This includes several announcements of further ethylene capacity rationalizations, as well as the elimination of VAT export rebates on select products in China. Across our packaging market vertical, global polyethylene fundamentals are expected to remain stable heading into 2026. From a price standpoint, ACC inventory shows a net draw in 2025, which should provide support for the price increases we've announced for January and February. Across the infrastructure sector, building and construction conditions are likely to gradually improve as interest rate cuts over the past 12 months gain traction.
I will touch on all of that shortly. But first, I'll turn the call over to Jeff, who will share some macroeconomic insights and our outlook for the first quarter.
Housing starts and existing home sales, remain, well, below, historical averages.
Thank you, Karen. Good morning to everyone participating on today's call.
But the are some signs of positive momentum with existing home sales, increasing for 4 months in a row.
57 shows that across the broader macroeconomic landscape, there are mixed signals.
Consumer confidence has improved slightly but remains near historic lows continuing to weigh on overall demand.
In response to structural industry challenges.
As well as trade and tariff uncertainty.
At the same time us retail spending is holding steady in several categories with resilient sales of electronics as a bright spot.
This includes several announcements of further ethylene capacity rationalizations.
As well as the elimination of BAT export, rebates on select products in China.
Mobility remains mixed and China. EV sales are anticipated to moderate as subsidies expire and government support Narrows. But growth rates are still expected to remain strong.
Across our packaging market vertical, global polyethylene fundamentals are expected to remain stable heading into 2026.
And in the US auto manufacturers anticipate a softer Market in 2026 due to increasing costs.
From a price standpoint, ACC inventories show a net draw in 2025.
Overall, our teams are continuing to navigate a variety of Dynamics across the key markets that thou serves.
This should provide support for the price increases we've announced for January and February.
Reinforcing the importance of our discipline cost actions.
Diversified Market exposure and strategically Advantage manufacturing footprints.
Jeff Tate: Housing starts and existing home sales remain well below historical averages, but there are some signs of positive momentum with existing home sales increasing for four months in a row. Consumer confidence has improved slightly but remains near historic lows, continuing to weigh on overall demand. At the same time, US retail spending is holding steady in several categories, with resilient sales of electronics as a bright spot. Mobility remains mixed. In China, EV sales are anticipated to moderate as subsidies expire and government support narrows, but growth rates are still expected to remain strong. In the US, auto manufacturers anticipate a softer market in 2026 due to increasing costs. Overall, our teams are continuing to navigate a variety of dynamics across the key markets that Dow serves, reinforcing the importance of our disciplined cost actions, diversified market exposure, and strategically advantaged manufacturing footprint.
Jeff Tate: Housing starts and existing home sales remain well below historical averages, but there are some signs of positive momentum with existing home sales increasing for four months in a row. Consumer confidence has improved slightly but remains near historic lows, continuing to weigh on overall demand. At the same time, US retail spending is holding steady in several categories, with resilient sales of electronics as a bright spot. Mobility remains mixed. In China, EV sales are anticipated to moderate as subsidies expire and government support narrows, but growth rates are still expected to remain strong. In the US, auto manufacturers anticipate a softer market in 2026 due to increasing costs. Overall, our teams are continuing to navigate a variety of dynamics across the key markets that Dow serves, reinforcing the importance of our disciplined cost actions, diversified market exposure, and strategically advantaged manufacturing footprint.
Across the infrastructure sector, building and construction conditions are likely to gradually improve as interest rate cuts over the past 12 months gained traction.
As we've demonstrated in the past, we will continue to maximize value while making appropriate trade-offs.
Housing starts and existing home sales remain, well, below historical averages.
But the r some signs of positive momentum with existing home sales, increasing for 4 months in a row.
Throughout 2026 and Beyond. We will build on this momentum to enable even further improvements in our top and bottom line performance.
Next, I'll cover our outlook on slide 8.
Consumer confidence has improved slightly, but remains near historic lows, continuing to weigh on overall demand.
Our expectations for first quarter Eva is approximately 750 million.
At the same time us retail spending is holding steady and several categories with resilient sales of electronics as a bright spot.
This sequential Improvement accounts for anticipated margin expansion as well as the normal seasonal. Uplift following typically low fourth quarter market demand conditions
We also expect continued Tailwind from our efforts to reduce costs across every business function and region.
Mobility remains mixed in China. EV sales are anticipated to moderate as subsidies expire and government support narrows. But growth rates are still expected to remain strong.
And in the U.S., auto manufacturers anticipate a softer market in 2026 due to an increase in cost.
With that, some of these games should be offset by higher plan spending on turnaround activities, as well as lower Equity earnings.
Turning to our operating segments.
Overall, our teams are continuing to navigate a variety of dynamics across the key markets that Dow serves.
And packaging and Specialty Plastics, we anticipate that price increases and lower fees. Stock costs will provide higher sequential integrated margins.
Jeff Tate: As we've demonstrated in the past, we will continue to maximize value while making appropriate trade-offs. Throughout 2026 and beyond, we will build on this momentum to enable even further improvements in our top- and bottom-line performance. Next, I'll cover our outlook on slide 8. Our expectations for Q1 EBITDA is approximately $750 million. This sequential improvement accounts for anticipated margin expansion as well as the normal seasonal uplift following typically low Q4 market demand conditions. We also expect continued tailwinds from our efforts to reduce costs across every business, function, and region. With that, some of these gains should be offset by higher planned spending on turnaround activities as well as lower equity earnings. Turning to our operating segments, in packaging and specialty plastics, we anticipate that price increases and lower feedstock costs will provide higher sequential integrated margins.
As we've demonstrated in the past, we will continue to maximize value while making appropriate trade-offs. Throughout 2026 and beyond, we will build on this momentum to enable even further improvements in our top- and bottom-line performance. Next, I'll cover our outlook on slide 8. Our expectations for Q1 EBITDA is approximately $750 million. This sequential improvement accounts for anticipated margin expansion as well as the normal seasonal uplift following typically low Q4 market demand conditions. We also expect continued tailwinds from our efforts to reduce costs across every business, function, and region. With that, some of these gains should be offset by higher planned spending on turnaround activities as well as lower equity earnings. Turning to our operating segments, in packaging and specialty plastics, we anticipate that price increases and lower feedstock costs will provide higher sequential integrated margins.
Reinforcing the importance of our discipline cost actions Diversified Market exposure and strategically Advantage. Manufacturing footprint.
As we've demonstrated in the past, we will continue to maximize value while making appropriate trade-offs.
Lower Equity earnings from a cracker turnaround at our Kuwait joint ventures as well. As lower licensing, activity will represent a collective headwind of approximately 75 million in the quarter.
Throughout 2026 and beyond, we will build on this momentum to enable even further improvements in our top 10 and bottom-line performance.
Finally planned maintenance at 1 of our crackers. In Louisiana represents another headwind of approximately 125 million dollars.
Next, I'll cover our outlook on slide 8.
Moving to Industrial intermediate and infrastructure.
Our expectations for first quarter evida is approximately 750 million.
We expect normal seasonal improvements in building and Construction in markets.
Additionally, positive demand momentum for the icing, fluids should continue into the first quarter. Providing a Tailwind for the segment.
This sequential improvement accounts for anticipated margin expansion, as well as the normal seasonal uplift following typically low fourth quarter market demand conditions.
We also expect continued tailwind from our efforts to reduce costs across every business function and region.
Our call savings efforts will provide an additional 10 million Tailwind while approximately 15 million dollars per plant maintenance activity throughout the quarter is expected to offset these gains.
With that, some of these gains should be offset by higher planned spending on turnaround activities, as well as lower equity earnings.
Turning to operating segments.
And in the performance materials in coding segment, we anticipate typical seasonal improvements for architectural coatings.
As well as higher Sloane pricing following the increased market prices. That happened in China late last year.
Jeff Tate: Lower equity earnings from a cracker turnaround at our Kuwait Joint Ventures, as well as lower licensing activity, will represent a collective headwind of approximately $75 million in the quarter. Finally, planned maintenance at one of our crackers in Louisiana represents another headwind of approximately $125 million. Moving to industrial, intermediate, and infrastructure, we expect normal seasonal improvements in building and construction end markets. Additionally, positive demand momentum for the deicing fluids should continue into Q1, providing a tailwind for the segment. Our cost-savings efforts will provide an additional $10 million tailwind, while approximately $15 million for planned maintenance activity throughout the quarter is expected to offset these gains. And in the performance materials and coating segment, we anticipate typical seasonal improvements for architectural coatings, as well as higher siloxanes pricing following the increased market prices that happened in China late last year.
Lower equity earnings from a cracker turnaround at our Kuwait Joint Ventures, as well as lower licensing activity, will represent a collective headwind of approximately $75 million in the quarter. Finally, planned maintenance at one of our crackers in Louisiana represents another headwind of approximately $125 million. Moving to industrial, intermediate, and infrastructure, we expect normal seasonal improvements in building and construction end markets. Additionally, positive demand momentum for the deicing fluids should continue into Q1, providing a tailwind for the segment. Our cost-savings efforts will provide an additional $10 million tailwind, while approximately $15 million for planned maintenance activity throughout the quarter is expected to offset these gains. And in the performance materials and coating segment, we anticipate typical seasonal improvements for architectural coatings, as well as higher siloxanes pricing following the increased market prices that happened in China late last year.
And packaging and Specialty Plastics, we anticipate that price increases and lower fees. Stock costs will provide higher sequential integrated margins.
Selectively, this will provide roughly 80 million dollars of sequential Tailwind this quarter.
Completion of a planned turnaround at our Deer Park, Texas site.
Lower equity earnings from a cracker turnaround at our Kuwait joint ventures as well, as lower licensing activity will represent a collective headwind of approximately $75 million in the quarter.
As well as continued contributions from our cost reduction actions.
Finally planned maintenance at 1 of our crackers. In Louisiana represents another headwind of approximately 125 million.
Across the portfolio. This combination of factors results in improved operational results for the quarter.
Moving to Industrial intermediate and infrastructure.
We expect normal seasonal improvements in building and construction and markets.
Our continued efforts to structurally reduce costs and every area of the company paired with seasonal demand improvements and expectations for margin related Tailwinds are meaningful.
Additionally, positive demand momentum for the icing fluids should continue into the first quarter, providing a tailwind for the segment.
However, higher plan turnarounds spending will wait on first quarter results.
Our cost savings efforts will provide an additional $10 million tailwind, while approximately $15 million per plant in maintenance activity throughout the quarter is expected to offset these gains.
Looking at our transformational work and continue cost reduction actions progressed. Our teams will remain focused on managing what's within our control to preserve our financial flexibility.
And in the performance materials, encoding segment.
Now, I'll hand the call back to Jim.
Thank you, Jeff.
Anticipate typical seasonal, improvements for architectural, codings.
Slide 9 outlines the key areas where we're focused on strengthening Dow's earnings power to ensure that we remain resilient through every cycle.
Jeff Tate: Collectively, this will provide roughly $80 million of sequential tailwinds this quarter. We'll also see a small uplift from lower maintenance activity following the completion of a planned turnaround at our Deer Park, Texas site, as well as continued contributions from our cost reduction actions. Across the portfolio, this combination of factors results in improved operational results for the quarter. Our continued efforts to structurally reduce costs in every area of the company, paired with seasonal demand improvements and expectations for margin-related tailwinds, are meaningful. However, higher planned turnaround spending will weigh on Q1 results. Looking ahead, as our transformational work and continued cost reduction actions progress, our teams will remain focused on managing what's within our control to preserve our financial flexibility. Now, I'll hand the call back to Jim.
Collectively, this will provide roughly $80 million of sequential tailwinds this quarter. We'll also see a small uplift from lower maintenance activity following the completion of a planned turnaround at our Deer Park, Texas site, as well as continued contributions from our cost reduction actions. Across the portfolio, this combination of factors results in improved operational results for the quarter. Our continued efforts to structurally reduce costs in every area of the company, paired with seasonal demand improvements and expectations for margin-related tailwinds, are meaningful. However, higher planned turnaround spending will weigh on Q1 results. Looking ahead, as our transformational work and continued cost reduction actions progress, our teams will remain focused on managing what's within our control to preserve our financial flexibility. Now, I'll hand the call back to Jim.
As well as higher Sloane pricing following the increased market prices. That happened in China late last year.
Selectively, this will provide roughly a million dollars of sequential tailwind this quarter.
First week, expect to deliver the remaining more than 500 million dollars in cost savings. By the end of this year from our previously announced 1 billion dollar program.
we're also executing a series of strategic moves that will uniquely position down to when
We'll also see a small uplift from lower maintenance activities, following the completion of a planned turnaround at our Deer Park, Texas site.
As well as continued contributions from our cost reduction actions.
Across the portfolio.
This combination.
This includes the startup of our remaining incremental growth investments in cost advantaged regions as well as our announced shutdowns of Upstream higher cost assets.
Additionally, transformed to outperform is expected to deliver at least 2 billion dollars in near-term. Ibidi Improvement.
To Tailwind are meaningful.
About 2/3 of that will come from productivity gains and the remaining 1/3 from growth.
However, higher plan, turnaround spending will wait on first quarter results.
This work will radically simplify how we operate streamline, our end-to-end processes, reset our cost structure and modernize how we serve our customers.
Looking ahead as our transformational work and continued cost reduction actions progress, our teams will remain focused on managing what's within our control to preserve our financial flexibility.
we anticipate the outcomes to deliver step change improvements in productivity more growth with our customers and greater shareholder returns
Jeff Tate: Thank you, Jeff. Slide nine outlines the key areas where we're focused on strengthening Dow's earnings power to ensure that we remain resilient through every cycle. First, we expect to deliver the remaining more than $500 million in cost savings by the end of this year from our previously announced $1 billion program. We're also executing a series of strategic moves that will uniquely position Dow to win. This includes the startup of our remaining incremental growth investments in cost-advantaged regions, as well as our announced shutdowns of upstream higher-cost assets. Additionally, Transform to Outperform is expected to deliver at least $2 billion in near-term EBITDA improvement. About two-thirds of that will come from productivity gains and the remaining one-third from growth. This work will radically simplify how we operate, streamline our end-to-end processes, reset our cost structure, and modernize how we serve our customers.
Jim Fitterling: Thank you, Jeff. Slide nine outlines the key areas where we're focused on strengthening Dow's earnings power to ensure that we remain resilient through every cycle. First, we expect to deliver the remaining more than $500 million in cost savings by the end of this year from our previously announced $1 billion program. We're also executing a series of strategic moves that will uniquely position Dow to win. This includes the startup of our remaining incremental growth investments in cost-advantaged regions, as well as our announced shutdowns of upstream higher-cost assets. Additionally, Transform to Outperform is expected to deliver at least $2 billion in near-term EBITDA improvement. About two-thirds of that will come from productivity gains and the remaining one-third from growth. This work will radically simplify how we operate, streamline our end-to-end processes, reset our cost structure, and modernize how we serve our customers.
Now, I'll hand the call back to Jim.
Thank you, Jeff. Slide 9 outlines the key areas where we're focused on strengthening Dow's earnings power to ensure that we remain resilient through every cycle.
And lastly, a refined timeline for our cost Advantage, path to zero project in Alberta will enable us to align Capital deployment with market conditions, and maximize project returns when demand improved.
First, we expect to deliver the remaining, more than $500 million in cost savings by the end of this year from our previously announced $1 billion program.
The underlying enabler to all of this work is our focus on maintaining Financial flexibility while preserving our investment grade credit rating.
We're also executing a series of strategic moves that will uniquely position Dow to win.
Together, these actions form, a cohesive roadmap that aims to strengthen our near and long-term competitiveness.
Next, Karen has more details about several of these Keys strategic priorities.
This includes the startup of our remaining incremental growth investments in cost Advantage regions as well as our announced shutdowns of Upstream higher cost assets.
Thank you.
Turning to slide 10.
Attempt mention.
Additionally, Transformed to Outperform is expected to deliver at least $2 billion in the near term. Ibidi improvement.
More than 500 million dollars in cost savings.
Representing the remainder of our 20251 billion dollar cost Savings Program.
About two-thirds of that will come from productivity gains, and the remaining one-third from growth.
Jeff Tate: We anticipate the outcomes to deliver step-change improvements in productivity, more growth with our customers, and greater shareholder returns. Lastly, a refined timeline for our cost-advantaged Path2Zero project in Alberta will enable us to align capital deployment with market conditions and maximize project returns when demand improves. The underlying enabler to all of this work is our focus on maintaining financial flexibility while preserving our investment-grade credit rating. Together, these actions form a cohesive roadmap that aims to strengthen our near and long-term competitiveness. Next, Karen has more details about several of these key strategic priorities.
We anticipate the outcomes to deliver step-change improvements in productivity, more growth with our customers, and greater shareholder returns. Lastly, a refined timeline for our cost-advantaged Path2Zero project in Alberta will enable us to align capital deployment with market conditions and maximize project returns when demand improves. The underlying enabler to all of this work is our focus on maintaining financial flexibility while preserving our investment-grade credit rating. Together, these actions form a cohesive roadmap that aims to strengthen our near and long-term competitiveness. Next, Karen has more details about several of these key strategic priorities.
This work will radically simplify how we operate, streamline our end-to-end processes, reset our cost structure, and modernize how we serve our customers.
This bills on our demonstrated ability to deliver higher than expected savings. Last year when we realized more than 400 million dollars versus our original Target of 3 million,
We anticipate the outcomes to deliver step-change improvements in productivity, more growth with our customers, and greater shareholder returns.
In addition to that, we are executing several strategic moves that will uniquely position down the win. Many of which will begin to materialize in 2026.
for example in packaging and Specialty Plastics, we completed the startup of our poly 7 worlds, scale, polyethylene trained last year,
And lastly, a refined timeline for our cost advantage, Path to Zero project in Alberta will enable us to align capital deployment with market conditions, and maximize project returns when demand improves.
The underlying enabler to all of this work is our focus on maintaining Financial flexibility while preserving our investment grade credit rating.
Using dowels for proprietary solution, technology. Poly 7 is designed for lower cost and increased production capacity as well as improved efficiency and flexibility.
Together, these actions form a cohesive roadmap that aims to strengthen our near- and long-term competitiveness.
The new asset is supporting customer-driven demand and specialty packaging, health and hygiene and Industrial and consumer, packaging applications.
Karen S. Carter: Thank you. Turning to slide 10, as Jim mentioned, we are well on our way to delivering more than $500 million in cost savings, representing the remainder of our 2025 $1 billion cost savings program. This builds on our demonstrated ability to deliver higher-than-expected savings last year when we realized more than $400 million versus our original target of $300 million. In addition to that, we are executing several strategic moves that will uniquely position Dow to win, many of which will begin to materialize in 2026. For example, in packaging and specialty plastics, we completed the startup of our Poly7 world-scale polyethylene train last year. Using Dow's proprietary solution technology, Poly7 is designed for lower cost and increased production capacity, as well as improved efficiency and flexibility. The new asset is supporting customer-driven demand in specialty packaging, health and hygiene, and industrial and consumer packaging applications.
Karen Carter: Thank you. Turning to slide 10, as Jim mentioned, we are well on our way to delivering more than $500 million in cost savings, representing the remainder of our 2025 $1 billion cost savings program. This builds on our demonstrated ability to deliver higher-than-expected savings last year when we realized more than $400 million versus our original target of $300 million. In addition to that, we are executing several strategic moves that will uniquely position Dow to win, many of which will begin to materialize in 2026. For example, in packaging and specialty plastics, we completed the startup of our Poly7 world-scale polyethylene train last year. Using Dow's proprietary solution technology, Poly7 is designed for lower cost and increased production capacity, as well as improved efficiency and flexibility. The new asset is supporting customer-driven demand in specialty packaging, health and hygiene, and industrial and consumer packaging applications.
Next, Karen has more details about several of these Keys strategic priorities.
Thank you.
Turning to slide 10.
Additionally, the completion of our new alox capacity will support growth in industrial Solutions which serves attractive in markets, such as Home Care, Pharma and energy.
Attempt mentioned we are well on our way to delivering more than dollars of cost savings, representing the remainder of our 2025 $1 billion cost savings program.
We're also progressing our plans to shut down higher cost, Upstream assets, including 3 in Europe, largely due to the ongoing structural challenges in the region.
Each of these assets represents a meaningful portion of our regional capacity and a high on our cost curve.
It's built on our demonstrated ability to deliver higher than expected. Savings last year when we realized more than 400 million dollars versus our original Target of million dollars.
The shutdowns are cash accredited and expected to result in an annual event. Not uplift of $200 million by 2029
In addition to that, we are executing several strategic moves that will uniquely position Dow to win, many of which will begin to materialize in 2026.
with Benefits beginning in 2026 with the shutdown of our basic Sloan's capacity and bury UK by mid this year,
For example in packaging and Specialty Plastics we completed the startup of our poly 7 world scale. Polyethylene train last year.
Next on slide 11, a walkthrough additional details about some of the work that is already underway as well as what's next.
Using Dow's proprietary solution technology, how a 7 is designed for lower cost and increased production capacity, as well as improved efficiency and flexibility.
Karen S. Carter: Additionally, the completion of our new alkoxylation capacity will support growth in industrial solutions, which serves attractive end markets such as home care, pharma, and energy. We're also progressing our plans to shut down higher-cost upstream assets, including three in Europe, largely due to the ongoing structural challenges in the region. Each of these assets represents a meaningful portion of our regional capacity and a high on our cost curve. These shutdowns are cash accretive and expected to result in an annual EBITDA uplift of $200 million by 2029, with benefits beginning in 2026, with the shutdown of our basic siloxanes capacity in Barry, UK, by mid this year. Next, on slide 11, I'll walk through additional details about some of the work that is already underway, as well as what's next. Transform to Outperform builds upon the self-help actions that we have implemented over the past few years.
Additionally, the completion of our new alkoxylation capacity will support growth in industrial solutions, which serves attractive end markets such as home care, pharma, and energy. We're also progressing our plans to shut down higher-cost upstream assets, including three in Europe, largely due to the ongoing structural challenges in the region. Each of these assets represents a meaningful portion of our regional capacity and a high on our cost curve. These shutdowns are cash accretive and expected to result in an annual EBITDA uplift of $200 million by 2029, with benefits beginning in 2026, with the shutdown of our basic siloxanes capacity in Barry, UK, by mid this year. Next, on slide 11, I'll walk through additional details about some of the work that is already underway, as well as what's next. Transform to Outperform builds upon the self-help actions that we have implemented over the past few years.
The new asset is supporting customer-driven demand and specialty packaging, health and hygiene, and industrial and consumer packaging applications.
Structural re-engineering of our operating model and cost base.
Additionally, the completion of our new Alox capacity will support growth in Industrial Solutions.
The goal of this transformation is to achieve significant growth and productivity gains that elevate Dow's competitive position.
Which serves attractive in markets such as Home Care, Pharma and energy.
And while this transformation aims to simplify the way we work, it will not impact our long-standing commitment to our core values of safe and reliable operations.
We're also progressing our plans to shut down higher cost, Upstream assets, including 3 in Europe, largely due to the ongoing structural challenges in the region.
In addition to simplification, we will focus on streamlining all of our end-to-end work processes and resetting, our cost structure.
Each of these assets represents a meaningful portion of our regional capacity and a high on our cost curve.
And will continue to utilize the power of Leading Edge practices and Technologies to modernize how our teams serve customers and key fast growing markets.
The shutdowns or cash accruals are expected to result in an annual EBIT uplift of $200 million by 2029, with benefits beginning in 2026 with the shutdown of our Basic Chemicals by locking capacity and Barry, UK by mid this year.
We are bringing a full 360 degree view to this work. Inclusive of external viewpoints lessons from other Industries and robust, benchmarking. In addition to our own expertise
Next on slide 11. I'll walk through additional details about some of the work that is already underway as well as what's next.
And we have established a dedicated Dow team to drive our transformation efforts across every part of the company.
Karen S. Carter: But importantly, it goes a lot further, representing a structural reengineering of our operating model and cost base. The goal of this transformation is to achieve significant growth and productivity gains that elevate Dow's competitive position. And while this transformation aims to simplify the way we work, it will not impact our long-standing commitment to our core values of safe and reliable operations. In addition to simplification, we will focus on streamlining all of our end-to-end work processes and resetting our cost structure. And we'll continue to utilize the power of leading-edge practices and technologies to modernize how our teams serve customers in key fast-growing markets. We are bringing a full 360-degree view to this work, inclusive of external viewpoints, lessons from other industries, and robust benchmarking, in addition to our own expertise.
But importantly, it goes a lot further, representing a structural reengineering of our operating model and cost base. The goal of this transformation is to achieve significant growth and productivity gains that elevate Dow's competitive position. And while this transformation aims to simplify the way we work, it will not impact our long-standing commitment to our core values of safe and reliable operations. In addition to simplification, we will focus on streamlining all of our end-to-end work processes and resetting our cost structure. And we'll continue to utilize the power of leading-edge practices and technologies to modernize how our teams serve customers in key fast-growing markets. We are bringing a full 360-degree view to this work, inclusive of external viewpoints, lessons from other industries, and robust benchmarking, in addition to our own expertise.
Transform to Outperform builds upon the self-help actions that we have implemented over the past few years. But importantly, it goes a lot further—representing a structural re-engineering of our operating model and cost base.
We anticipate at least 2 billion dollars of near-term. Eva uplift from this work and we've outlined a clear timeline and understanding of the costs to achieve it which we will hold ourselves accountable to
The goal of this transformation is to achieve significant growth and productivity gains that elevate Dow's competitive position.
And the third of this will come from New Growth and the remaining 2/3 of the benefits will be in the form of productivity improvements.
And while this transformation aims to simplify the way we work, it will not impact our long-standing commitment to our core values of safe and reliable operations.
This year, we expect to deliver approximately 500 million dollars in value. And as a reminder, this is on top of the more than 500 million dollars. We will deliver in 2026 to round out our 2025 cost Savings Program.
We will focus on streamlining, all of our end-to-end work processes and resetting our cost structure.
We anticipate 1-time costs of approximately 1.1 to 1.5 billion.
Including 600 to 800 million dollars of severance.
And we'll continue to utilize the power of leading-edge practices and technologies to modernize how our teams serve customers and key, fast-growing markets.
And 500 to 700 million dollars of other 1-time costs.
Next, I'll share a few examples of the early opportunities that we have already identified and are taking action on.
Karen S. Carter: We have established a dedicated Dow team to drive our transformation efforts across every part of the company. We anticipate at least $2 billion of near-term EBITDA uplift from this work, and we've outlined a clear timeline and understanding of the costs to achieve it, which we will hold ourselves accountable to. 1/3 of this will come from new growth, and the remaining 2/3 of the benefits will be in the form of productivity improvements. This year, we expect to deliver approximately $500 million in value. And as a reminder, this is on top of the more than $500 million we will deliver in 2026 to round out our 2025 cost savings program. We anticipate one-time costs of approximately $1.1 to $1.5 billion, including $600 to $800 million of severance and $500 to $700 million of other one-time costs.
We have established a dedicated Dow team to drive our transformation efforts across every part of the company. We anticipate at least $2 billion of near-term EBITDA uplift from this work, and we've outlined a clear timeline and understanding of the costs to achieve it, which we will hold ourselves accountable to. 1/3 of this will come from new growth, and the remaining 2/3 of the benefits will be in the form of productivity improvements. This year, we expect to deliver approximately $500 million in value. And as a reminder, this is on top of the more than $500 million we will deliver in 2026 to round out our 2025 cost savings program. We anticipate one-time costs of approximately $1.1 to $1.5 billion, including $600 to $800 million of severance and $500 to $700 million of other one-time costs.
We are bringing a full 360-degree view to this work, inclusive of external viewpoints, lessons from other industries, and robust benchmarking, in addition to our own expertise.
First, as part of our commitment, to operational excellence. We will simplify Dow's operating model.
And we have established a dedicated DAO team to drive our transformation efforts across every part of the company.
We do anticipate, this will include a global Dow Workforce reduction of 4,500 rolls.
It will also result in a reduction of third-party roles and resources.
We anticipate at least 2 billion dollars of near-term. Eva uplift from this work and we've outlined a clear timeline and understanding of the costs to achieve it which we will hold ourselves accountable to
As the way we work evolved. So will our expectations for where, and how work gets done.
And a third of this will come from new growth, and the remaining two-thirds of the benefits will be in the form of productivity improvements.
This will allow us to speed up decision-making and put the right role in the right areas of the company to better align with the changing Market landscape and with where our customers are investing.
We will also adopt new ways of working.
This year, we expect to deliver approximately $500 million in value. And as a reminder, this is on top of the more than $500 million we will deliver in 2026 to round out our 2025 Cost Savings Program.
This includes streamlining all of our end-to-end work processes by leveraging. The power of Automation, and AI, which we expect will result in lower cost and improved efficiency of the entire organization.
We anticipate one-time costs of approximately $1.1 to $1.5 billion, including $600 to $800 million of severance.
Karen S. Carter: Next, I'll share a few examples of the early opportunities that we have already identified and are taking action on. First, as part of our commitment to operational excellence, we will simplify Dow's operating model. We do anticipate this will include a global Dow workforce reduction of 4,500 roles. It will also result in a reduction of third-party roles and resources. As the way we work evolves, so will our expectations for where and how work gets done. This will allow us to speed up decision-making and put the right roles in the right areas of the company to better align with the changing market landscape and with where our customers are investing. We will also adopt new ways of working.
Next, I'll share a few examples of the early opportunities that we have already identified and are taking action on. First, as part of our commitment to operational excellence, we will simplify Dow's operating model. We do anticipate this will include a global Dow workforce reduction of 4,500 roles. It will also result in a reduction of third-party roles and resources. As the way we work evolves, so will our expectations for where and how work gets done. This will allow us to speed up decision-making and put the right roles in the right areas of the company to better align with the changing market landscape and with where our customers are investing. We will also adopt new ways of working.
And $500 to $700 million of other one-time costs.
We will modernize the way in which we grow with our customers, through our industry-leading, Innovation capabilities, and deeper insights into customer and End Market needs.
Finally, we will fundamentally reset our cost structure.
Next, I'll share a few examples of the early opportunities that we have already identified and are taking action on.
This work will result in A Renewed focus on improved, raw material sourcing and Logistics to drive further efficiencies.
First, as part of our commitment to operational excellence, we will simplify Dow's operating model.
We do anticipate, this will include a global Dow Workforce reduction of 4,500 rolls.
These are just a few examples of how transformed to outperform will deliver step change improvements in both growth and productivity.
It will also result in a reduction of third-party roles and resources.
We're committed to providing you with updates every quarter as the work and value delivery progresses.
As the way we work evolved. So will our expectations for where, and how work gets done.
And we are confident that these efforts will create a Dao that raises the competitive Benchmark is more resilient across the cycle, and consistently delivers growth, customer success and shareholder value.
This will allow us to speed up decision-making and put the right roles in the right areas of the company to better align with the changing Market landscape and with where our customers are investing.
Karen S. Carter: This includes streamlining all of our end-to-end work processes by leveraging the power of automation and AI, which we expect will result in lower costs and improved efficiency across the entire organization. We will modernize the way in which we grow with our customers through our industry-leading innovation capabilities and deeper insights into customer and end-market needs. Finally, we will fundamentally reset our cost structure. This work will result in a renewed focus on improved raw material sourcing and logistics to drive further efficiencies. These are just a few examples of how Transform to Outperform will deliver step-change improvements in both growth and productivity. We're committed to providing you with updates every quarter as the work and value delivery progresses.
This includes streamlining all of our end-to-end work processes by leveraging the power of automation and AI, which we expect will result in lower costs and improved efficiency across the entire organization. We will modernize the way in which we grow with our customers through our industry-leading innovation capabilities and deeper insights into customer and end-market needs. Finally, we will fundamentally reset our cost structure. This work will result in a renewed focus on improved raw material sourcing and logistics to drive further efficiencies. These are just a few examples of how Transform to Outperform will deliver step-change improvements in both growth and productivity. We're committed to providing you with updates every quarter as the work and value delivery progresses.
Next, Jim will provide an update on our path to zero project.
We will also adopt new ways of working.
Her name is slide 12 in April. Last year, we announced that we would be delaying construction of our path to zero project in Fort Saskatchewan.
This includes streamlining all of our end-to-end work processes by leveraging the power of automation and AI, which we expect will result in lower costs and improved efficiency for the entire organization.
This decision supported our near-term cash flow while also assuring the project timing would better align with a market recovery.
We will modernize the way in which we grow with our customers. So our industry-leading, Innovation, capabilities and deeper insights into customer and End Market needs.
Finally, we will fundamentally reset our cost structure.
After careful, analysis and collaboration. With all of our project Partners, we have determined the completing. The project with the 2-year delay is the most value creating option. This moves Phase 1 startup to late 2029 and Remains the best option in support of our long-term value creation goals.
This work will result in a renewed focus on improved raw material sourcing and logistics to drive further efficiencies.
These are just a few examples of how Transformed to Outperform will deliver step changes in both growth and productivity.
We remain committed to the Strategic rationale of the project and the upside that it will enable in targeted applications, like pressure, pipe, wiring, cable, and food packaging.
Karen S. Carter: We are confident that these efforts will create a Dow that raises the competitive benchmark, is more resilient across the cycle, and consistently delivers growth, customer success, and shareholder value. Next, Jim will provide an update on our Path2Zero project.
We are confident that these efforts will create a Dow that raises the competitive benchmark, is more resilient across the cycle, and consistently delivers growth, customer success, and shareholder value. Next, Jim will provide an update on our Path2Zero project.
We're committed to providing you with updates every quarter as the work and value delivery progresses.
and we're confident, the Dow can capture outsized growth in these markets for years to come, which will create value for shareholders,
And we are confident that these efforts will create a Dao that raises the competitive Benchmark is more resilient across the cycle, and consistently delivers growth, customer success and shareholder value.
Jane Palmieri: Turning to slide 12, in April last year, we announced that we would be delaying construction of our Path2Zero project in Fort Saskatchewan. This decision supported our near-term cash flow while also assuring the project timing would better align with a market recovery. After careful analysis and collaboration with all of our project partners, we have determined that completing the project with a two-year delay is the most value-creating option. This moves phase one startup to late 2029 and remains the best option in support of our long-term value creation goals. We remain committed to the strategic rationale of the project and the upside that it will enable in targeted applications like pressure pipe, wiring cable, and food packaging. We're confident that Dow can capture outsized growth in these markets for years to come, which will create value for shareholders.
Jim Fitterling: Turning to slide 12, in April last year, we announced that we would be delaying construction of our Path2Zero project in Fort Saskatchewan. This decision supported our near-term cash flow while also assuring the project timing would better align with a market recovery. After careful analysis and collaboration with all of our project partners, we have determined that completing the project with a two-year delay is the most value-creating option. This moves phase one startup to late 2029 and remains the best option in support of our long-term value creation goals. We remain committed to the strategic rationale of the project and the upside that it will enable in targeted applications like pressure pipe, wiring cable, and food packaging. We're confident that Dow can capture outsized growth in these markets for years to come, which will create value for shareholders.
Next, Jim will provide an update on our Path to Zero project.
New asset will be first quartile globally, further, enhancing our low-cost footprint. And importantly, we do not expect any material impact to the cache and tax incentives, associated with this timeline.
Her name is Slide 12 in April. Last year, we announced that we would be delaying construction of our Path to Zero project in Fort Saskatchewan.
On the execution, front. Several Milestones have been achieved. This includes heavy equipment, procurement and detailed engineering design.
This decision supported our near-term cash flow, while also ensuring the project timing would better align with a market recovery.
As we begin to ramp up Workforce labor, for the project, our robust risk, mitigation strategies will help us ensure that it remains on track with current cost projections.
With the project delay and resulting incremental capex, increased associated with it. We now expect returns of at least 8 to 10%.
After careful analysis and collaboration with all of our project partners, we have determined that completing the project with a two-year delay is the most value-creating option. This moves Phase 1 startup to late 2029 and remains the best option in support of our long-term value creation goals.
We remain committed to the strategic rationale of the project and the upside that it will enable in targeted applications, like pressure, pipe, wiring, cable, and food packaging.
We anticipate there are efforts to reduce and mitigate costs will provide further upside and we continue to advance several additional levers within our control. That could further improve our returns. For example, the value from low carbon product premiums is not included in our base model.
Representing potential further, upside of 100 to 200 basis points?
Jane Palmieri: We are taking deliberate steps to ensure the new asset will be first quartile globally, further enhancing our low-cost footprint. Importantly, we do not expect any material impact to the cash and tax incentives associated with this timeline. On the execution front, several milestones have been achieved. This includes heavy equipment procurement and detailed engineering design. As we begin to ramp up workforce labor for the project, our robust risk mitigation strategies will help us ensure that it remains on track with current cost projections. With the project delay and resulting incremental CapEx increase associated with it, we now expect returns of at least 8% to 10%. We anticipate that our efforts to reduce and mitigate costs will provide further upside, and we continue to advance several additional levers within our control that could further improve our returns.
We are taking deliberate steps to ensure the new asset will be first quartile globally, further enhancing our low-cost footprint. Importantly, we do not expect any material impact to the cash and tax incentives associated with this timeline. On the execution front, several milestones have been achieved. This includes heavy equipment procurement and detailed engineering design. As we begin to ramp up workforce labor for the project, our robust risk mitigation strategies will help us ensure that it remains on track with current cost projections. With the project delay and resulting incremental CapEx increase associated with it, we now expect returns of at least 8% to 10%. We anticipate that our efforts to reduce and mitigate costs will provide further upside, and we continue to advance several additional levers within our control that could further improve our returns.
And we're confident the Dow can capture outsized growth in these markets for years to come, which will create value for shareholders.
The low carbon Supply agreement that we signed last year is a testament to the value of the brand owners and consumers, place on decarbonized products. And we have more in the queue,
We are taking deliberate steps to ensure the new asset will be first quartile globally, further enhancing our low-cost footprint. Importantly, we do not expect any material impact to the cash and tax incentives associated with this timeline.
Approximately 30% of the total project capex. Spend is complete and we anticipate that Dallas capex spending will remain at or below DNA until we see mid-cycle earnings.
On the execution front, several milestones have been achieved. This includes heavy equipment procurement and detailed engineering design.
And while Our intention is to continue this project on a standalone basis, we remain open to all options that could enhance value provided, they benefit Dow strategy, and support shareholder returns
Workforce labor for the project. Our robust risk, mitigation strategies will help us ensure that it remains on track with current cost projections.
Market conditions, remain challenging. But the industry is made significant progress in 2025 including accelerating capacity rationalizations
With the project delay and resulting incremental CapEx increased associated with it, we now expect returns of at least 8% to 10%.
Jane Palmieri: For example, the value from low-carbon product premiums is not included in our base model, representing potential further upside of 100 to 200 basis points. The low-carbon supply agreement that we signed last year is a testament to the value that brand owners and consumers place on decarbonized products, and we have more in the queue. Approximately 30% of the total project CapEx spend is complete, and we anticipate that Dow's CapEx spending will remain at or below DNA until we see mid-cycle earnings. And while our intention is to continue this project on a standalone basis, we remain open to all options that could enhance value, provided they benefit Dow's strategy and support shareholder returns. Market conditions remain challenging, but the industry has made significant progress in 2025, including accelerating capacity rationalizations.
For example, the value from low-carbon product premiums is not included in our base model, representing potential further upside of 100 to 200 basis points. The low-carbon supply agreement that we signed last year is a testament to the value that brand owners and consumers place on decarbonized products, and we have more in the queue. Approximately 30% of the total project CapEx spend is complete, and we anticipate that Dow's CapEx spending will remain at or below DNA until we see mid-cycle earnings. And while our intention is to continue this project on a standalone basis, we remain open to all options that could enhance value, provided they benefit Dow's strategy and support shareholder returns. Market conditions remain challenging, but the industry has made significant progress in 2025, including accelerating capacity rationalizations.
We anticipate that the startup of the Alberta project will align well with these industry operating rate. Improvements ahead of the next cycle. Peak with that, I'll hand it off to Jeff to share more about how we're preserving near-term Financial flexibility.
We anticipate that our efforts to reduce and mitigate costs will provide further upside, and we continue to advance several additional levers within our control that could further improve our returns. For example, the value from low carbon product premiums is not included in our base model.
Representing potential further upside of 100 to 200 basis points.
Thank you. Jim on slide 13. Looking ahead the strong financial actions. We initiated in 2025 will help us. Continue to navigate a still challenging macro environment. While executing with discipline and consistency.
The low-carbon supply agreement that we signed last year is a testament to the value that brand owners and consumers place on decarbonized products. And we have more in the queue.
Taken together. These actions. Give us line of sight to More Than 3 billion dollars in near-term earnings uplift potential.
Before the phase 1 startup of our past to zero project.
Approximately 30% of the total project capex spend is complete, and we anticipate that Dallas capex spending will remain at or below DNA until we see mid-cycle earnings.
In addition to this our cash and cash equivalents balance was above 3.8 billion at the end of 2025.
And while our intention is to continue this project on a standalone basis, we remain open to all options that could enhance value, provided they benefit Dow's strategy and support shareholder returns.
And now has approximately 14 billion dollars of available liquidity. Including a revolving credit facility that was recently renewed through 2030.
Jane Palmieri: We anticipate that the startup of the Alberta project will align well with these industry operating rate improvements ahead of the next cycle peak. With that, I'll hand it off to Jeff to share more about how we're preserving near-term financial flexibility.
We anticipate that the startup of the Alberta project will align well with these industry operating rate improvements ahead of the next cycle peak. With that, I'll hand it off to Jeff to share more about how we're preserving near-term financial flexibility.
Market conditions remain challenging, but the industry has made significant progress in 2025, including accelerating capacity rationalizations.
And in 2025, we completed multiple actions to strengthen down near-term. Cash flow further, reinforce our balance sheet and Achieve lasting operational improvements.
For example.
James Fitterling: Thank you, Jim. On slide 13, looking ahead, the strong financial actions we initiated in 2025 will help us continue to navigate a still challenging macro environment while executing with discipline and consistency. Taken together, these actions give us line of sight to more than $3 billion in near-term earnings uplift potential before the phase one startup of our Path2Zero project. In addition to this, our cash and cash equivalent balance was above $3.8 billion at the end of 2025. Dow has approximately $14 billion of available liquidity, including a revolving credit facility that was recently renewed through 2030. In 2025, we completed multiple actions to strengthen Dow's near-term cash flow, further reinforce our balance sheet, and achieve lasting operational improvements.
Jeff Tate: Thank you, Jim. On slide 13, looking ahead, the strong financial actions we initiated in 2025 will help us continue to navigate a still challenging macro environment while executing with discipline and consistency. Taken together, these actions give us line of sight to more than $3 billion in near-term earnings uplift potential before the phase one startup of our Path2Zero project. In addition to this, our cash and cash equivalent balance was above $3.8 billion at the end of 2025. Dow has approximately $14 billion of available liquidity, including a revolving credit facility that was recently renewed through 2030. In 2025, we completed multiple actions to strengthen Dow's near-term cash flow, further reinforce our balance sheet, and achieve lasting operational improvements.
We anticipate that the startup of the Alberta project will align well with these industry operating rate. Improvements ahead of the next cycle. Peak with that, I'll hand it off to Jeff to share more about how we're preserving near-term Financial flexibility.
we received approximately 3 billion dollars in total cash proceeds for our strategic partnership with McQuarrie, for the sale of a 49% equity stake and select us Gulf Coast, infrastructure assets,
We lowered our cost by more than $400 million in the year.
And we learned our capex plans by 1 billion dollars.
Thank you. Jim, on slide 13—looking ahead, the strong financial actions we initiated in 2025 will help us continue to navigate a still challenging macro environment, while executing with discipline and consistency.
In addition to that, we completed 2 Bond issuances, at attractive, spreads, for a total of 2.4 billion.
pushing our next material maturity to 2029
Taken together. These actions. Give us line of sight to More Than 3 billion dollars in near-term earnings uplift potential.
Before the phase 1 startup of our past to zero project.
And we made The Prudent decision to implement a 50% dividend reduction.
In addition to this, our cash and cash equivalents balance was above $3.8 billion at the end of 2025.
Collectively the actions we took provide near-term Financial flexibility and support while maintaining our commitment to an investment grade credit profile.
Our teams will continue this momentum into 2026.
And thou has approximately $14 billion of available liquidity, including a revolving credit facility that was recently renewed through 2030.
This starts with delivering approximately 1 billion dollars of benefits this year.
As a reminder, this includes the more than 500 million dollars of cost savings that remains in our 2025 program.
James Fitterling: For example, we received approximately $3 billion in total cash proceeds for our strategic partnership with Macquarie for the sale of a 49% equity stake in select U.S. Gulf Coast infrastructure assets. We lowered our cost by more than $400 million in the year, and we lowered our CapEx plans by $1 billion. In addition to that, we completed two bond issuances at attractive spreads for a total of $2.4 billion, pushing our next material maturity to 2029. We made the prudent decision to implement a 50% dividend reduction. Collectively, the actions we took provide near-term financial flexibility and support while maintaining our commitment to an investment-grade credit profile. Our teams will continue this momentum into 2026. This starts with delivering approximately $1 billion of benefits this year.
For example, we received approximately $3 billion in total cash proceeds for our strategic partnership with Macquarie for the sale of a 49% equity stake in select U.S. Gulf Coast infrastructure assets. We lowered our cost by more than $400 million in the year, and we lowered our CapEx plans by $1 billion. In addition to that, we completed two bond issuances at attractive spreads for a total of $2.4 billion, pushing our next material maturity to 2029. We made the prudent decision to implement a 50% dividend reduction. Collectively, the actions we took provide near-term financial flexibility and support while maintaining our commitment to an investment-grade credit profile. Our teams will continue this momentum into 2026. This starts with delivering approximately $1 billion of benefits this year.
And then, in 2025, we completed multiple actions to strengthen DS. Near-term cash flow will further reinforce our balance sheet and achieve lasting operational improvements.
For example.
As well as an additional 500 million dollars in operating, Evita benefits from transform to outperform.
And we remain focused on completing the remainder of our more than 6.5 billion dollars in near-term. Cash support actions.
we received approximately 3 billion dollars in total cash proceeds for our strategic partnership with McQuarrie, for the sale of a 49% equity stake and select us Gulf Coast, infrastructure assets,
We lowered our cost by more than $400 million in the year.
And we learned our capex plans by 1 billion dollars.
Our discipline, operating model commitment to Capital efficiency and the decisive actions, we've taken over the last few years, ensure Dow is well positioned to continue navigating near-term volatility.
In addition to that, we completed 2 Bond issuances, at attractive, spreads, for a total of 2.4 billion.
Pushing our next material maturity to 2029.
next general, provide closing remarks on slide, 14,
And we made the prudent decision to implement a 50% dividend reduction.
Collectively the actions we took provide near-term Financial flexibility and support while maintaining our commitment to an investment grade credit profile.
Thank you. Jeff in summary 2026 represents an inflection point for our long-term vision and the steps we've taken to navigate a challenging down cycle. Come together to position down for stronger, more resilient growth.
Our teams will continue this momentum into 2026.
James Fitterling: As a reminder, this includes the more than $500 million of cost savings that remains in our 2025 program, as well as an additional $500 million in operating EBITDA benefits from Transform to Outperform. We remain focused on completing the remainder of our more than $6.5 billion in near-term cash support actions. Our discipline operating model, commitment to capital efficiency, and the decisive actions we've taken over the last few years ensure Dow is well positioned to continue navigating near-term volatility. At the same time, Transform to Outperform will enable us to build toward sustained earnings power in a recovery. Next, Jim will provide closing remarks on slide 14.
As a reminder, this includes the more than $500 million of cost savings that remains in our 2025 program, as well as an additional $500 million in operating EBITDA benefits from Transform to Outperform. We remain focused on completing the remainder of our more than $6.5 billion in near-term cash support actions. Our discipline operating model, commitment to capital efficiency, and the decisive actions we've taken over the last few years ensure Dow is well positioned to continue navigating near-term volatility. At the same time, Transform to Outperform will enable us to build toward sustained earnings power in a recovery. Next, Jim will provide closing remarks on slide 14.
This starts with delivering approximately 1 billion dollars of benefits this year.
First and foundational to everything. We do is our commitment to safe and reliable operations and financial flexibility.
Transformed to outperform will become a central driver of new value creation.
As a reminder, this includes the more than million dollars of cost savings that remains in our 2025 program.
As well as an additional $500 million in operating EBITDA benefits from transformed South as well.
It builds on our core strengths and positions us to operate with greater speed and efficiency while also enhancing our focus on Innovation and value Creation with our customers.
And we remain focused on completing the remainder of our more than 6.5 billion dollars in near-term. Cash support action.
And with a revised timeline, our path to zero project will enable growth in high-value packaging infrastructure and wiring cable applications.
The project represents a growth opportunity that is unique to Dow.
Our discipline, operating model, commitment to capital efficiency, and the decisive actions we've taken over the last few years ensure Dow is well positioned to continue navigating near-term volatility.
It adds a first quartile, cost asset in a globally. Competitive NGO based in, and gives us the best portfolio of low carbon product offerings.
At the same time, Transformed to Outperform will enable us to build towards sustained earnings power in a recovery.
Jim Fitterling: Thank you, Jeff. In summary, 2026 represents an inflection point where our long-term vision and the steps we've taken to navigate a challenging down cycle come together to position Dow for stronger, more resilient growth. First and foundational to everything we do is our commitment to safe and reliable operations and financial flexibility. Transform to Outperform will become a central driver of new value creation. It builds on our core strengths and positions us to operate with greater speed and efficiency while also enhancing our focus on innovation and value creation with our customers. And with a revised timeline, our Path2Zero project will enable growth in high-value packaging, infrastructure, and wire and cable applications. The project represents a growth opportunity that is unique to Dow. It adds a first quartile cost asset in a globally competitive NGL basin and gives us the best portfolio of low-carbon product offerings.
Jim Fitterling: Thank you, Jeff. In summary, 2026 represents an inflection point where our long-term vision and the steps we've taken to navigate a challenging down cycle come together to position Dow for stronger, more resilient growth. First and foundational to everything we do is our commitment to safe and reliable operations and financial flexibility. Transform to Outperform will become a central driver of new value creation. It builds on our core strengths and positions us to operate with greater speed and efficiency while also enhancing our focus on innovation and value creation with our customers. And with a revised timeline, our Path2Zero project will enable growth in high-value packaging, infrastructure, and wire and cable applications. The project represents a growth opportunity that is unique to Dow. It adds a first quartile cost asset in a globally competitive NGL basin and gives us the best portfolio of low-carbon product offerings.
Next, Jim will provide closing remarks on slide 14.
We also expect to fully realize the benefits of our near-term incremental growth projects which expand our ability to survive value markets from cost Advantage positions.
And lastly, as Jeff just outlined, we're progressing, several cash and cost support actions to give us even further Financial flexibility in the near term.
Thank you. Jeff, in summary, 2026 represents an inflection point where our long-term vision and the steps we've taken to navigate a challenging down cycle come together to position Dow for stronger, more resilient growth.
In summary, we're revamping our operating model, resetting our cost structure and enabling new growth.
Operations and financial flexibility.
Transformed to outperform will become a central driver of new value creation.
It builds on our core strengths and positions us to operate with greater speed and efficiency while also enhancing our focus on Innovation and value Creation with our customers.
Our strategic priorities are clear. We are delivering a near-term. Cash and cost savings. Levers, we're investing where we have lasting structural advantages. We are simplifying streamlining, and modernizing to enable greater agility, and we are building a more competitive. Dow, that is positioned to innovate faster and grow more effectively with customers.
And with a revised timeline, our path to zero project will enable growth in high-value packaging infrastructure and wiring cable applications.
These are not new priorities. They are part of Dow's DNA.
The project represents a growth opportunity that is unique to Dow.
But it is a step change in how we operate that is especially critical in today's environment.
Jim Fitterling: We also expect to fully realize the benefits of our near-term incremental growth projects, which expand our ability to serve high-value markets from cost-advantage positions. Lastly, as Jeff just outlined, we're progressing several cash and cost support actions to give us even further financial flexibility in the near term. In summary, we're revamping our operating model, resetting our cost structure, and enabling new growth. Our strategic priorities are clear. We are delivering on near-term cash and cost savings levers. We're investing where we have lasting structural advantages. We are simplifying, streamlining, and modernizing to enable greater agility, and we are building a more competitive Dow that is positioned to innovate faster and grow more effectively with customers. These are not new priorities. They are part of Dow's DNA. But it is a step change in how we operate that is especially critical in today's environment.
We also expect to fully realize the benefits of our near-term incremental growth projects, which expand our ability to serve high-value markets from cost-advantage positions. Lastly, as Jeff just outlined, we're progressing several cash and cost support actions to give us even further financial flexibility in the near term. In summary, we're revamping our operating model, resetting our cost structure, and enabling new growth. Our strategic priorities are clear. We are delivering on near-term cash and cost savings levers. We're investing where we have lasting structural advantages. We are simplifying, streamlining, and modernizing to enable greater agility, and we are building a more competitive Dow that is positioned to innovate faster and grow more effectively with customers. These are not new priorities. They are part of Dow's DNA. But it is a step change in how we operate that is especially critical in today's environment.
It adds a first-quartile, cost asset in a globally competitive NGL basin, and gives us the best portfolio of low-carbon product offerings.
2026 will be about execution, discipline and accelerating the work. We've already begun. And with that, I'll turn it back to Andrew to get us started with the Q&A.
We also expect to fully realize the benefits of our near-term incremental growth projects which expand our ability to survive value markets from cost Advantage positions.
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.
And lastly, as Jeff just outlined, we're progressing, several cash and cost support actions to give us even further Financial flexibility in the near term.
In summary, we're revamping our operating model, resetting our cost structure, and enabling new growth.
Our strategic priorities are clear.
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 their sales to 1 question.
We are delivering on near-term cash and cost savings levers. We're investing where we have lasting, structural advantages. We're simplifying, streamlining, and modernizing to enable greater agility, and we are building a more competitive Dow that is positioned to innovate faster and grow more effectively with customers.
Your first question comes from Hassan Ahmed with Olympic global.
Jim Fitterling: 2026 will be about execution, discipline, and accelerating the work we've already begun. And with that, I'll turn it back to Andrew to get us started with the Q&A.
2026 will be about execution, discipline, and accelerating the work we've already begun. And with that, I'll turn it back to Andrew to get us started with the Q&A.
These are not new priorities; they are part of Dow's DNA, but it is a step change in how we operate that is especially critical in today's environment.
2026 will be about execution, discipline, and accelerating the work. We've already begun.
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.
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.
And with that, I'll turn it back to Andrew to get us started with the Q&A.
Morning Jim. Um, you know, Jim a question around. Well, a 2-part question around capacity curtailment. Um, you know, in the last call, you guys, obviously talked at length about, um, you know, seeing roughly 20 million tons of, uh, capacity rationalization, so would love to sort of get an update with regards to where we stand, uh, on that figure. And then part, and parcel with that, you know, about your decision to carry forward with the Alberta project.
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 Hassan Ahmed with Alembic Global Advisors.
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 Hassan Ahmed with Alembic Global Advisors.
I mean, how do you I mean, obviously the returns seemed favourable to dou, but in the broader landscape, you know, what compelled you to sort of go through with that decision? Um, you know, the fair obviously, being that any sort of future upcycle, um, you know, if, if there's sort of quote, unquote, this Phantom capacity that lingers on that may impede the sustainability of any sort of future upcycle. So we would love to hear your thoughts about that as well.
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 ourselves to 1 question.
Good morning, Asin. Thanks for the question. Uh, I don't think there's
James Fitterling: Morning, Jim. You know, Jim, a question around, well, a two-part question around capacity curtailments. You know, in the last call, you guys obviously talked at length about seeing roughly 20 million tons of capacity rationalization. So we'd love to sort of get an update with regards to where we stand on that figure. And then part and parcel with that, you know, about your decision to carry forward with the Alberta project. I mean, how do you, I mean, obviously the returns seem favorable to Dow, but in the broader landscape, you know, what compelled you to sort of go through with that decision? You know, the fear obviously being that any sort of future up cycle, you know, if there's sort of quote unquote this phantom capacity that lingers on, that may impede the sustainability of any sort of future up cycle.
Hassan Ahmed: Morning, Jim. You know, Jim, a question around, well, a two-part question around capacity curtailments. You know, in the last call, you guys obviously talked at length about seeing roughly 20 million tons of capacity rationalization. So we'd love to sort of get an update with regards to where we stand on that figure. And then part and parcel with that, you know, about your decision to carry forward with the Alberta project. I mean, how do you, I mean, obviously the returns seem favorable to Dow, but in the broader landscape, you know, what compelled you to sort of go through with that decision? You know, the fear obviously being that any sort of future up cycle, you know, if there's sort of quote unquote this phantom capacity that lingers on, that may impede the sustainability of any sort of future up cycle.
Your first question comes from Hassan Ahmed with Olympic Global.
That are happening, are are going to lead to the next upcycle?
Morning Jim. Um, you know, Jim a question around. Well, a 2-part question around capacity curtailment. Um, you know, in the last call, you guys, obviously talked at length about, um, you know, seeing roughly 20 million tons of, uh, capacity rationalization, so would love to sort of get an update with regards to where we stand, uh, on that figure. And then part, and parcel with that, you know, about your decision to carry forward with the Alberta project.
We're at a point right now and you've made this comment before in some of your writing that demand has been relatively lackluster. Um, and we know what the supply situation is and where Supply is going.
James Fitterling: So we'd love to hear your thoughts about that as well.
So we'd love to hear your thoughts about that as well.
And demand in some of the higher volume markets has been where things are solved. So as we see housing, construction, infrastructure other things, pick up. That's typically where you see things start to take off and operating rates
But how do you? I mean, obviously the returns seemed favourable to dou, but in the broader landscape, you know, what compelled you to sort of go through with that decision? Um, you know, the fair obviously, being that any sort of future upcycle, um, you know, if, if there's sort of quote, unquote, this Phantom capacity that lingers on, that may impede the sustainability of any sort of future upcycle, so would love to hear your thoughts about that as well.
Jim Fitterling: Morning, Hassan. Thanks for the question. I don't think there's dramatically new data on the number of ethylene capacity rationalizations that have come out. We've seen more firm announcements out there. I think the total amount now is in the 15 to 20% of the European capacity that's coming out. I haven't seen anything substantive on anti-involution in China, so nothing has changed there. On Path to Zero, I think several things. In our view, the changes that are happening are going to lead to the next up cycle. We're at a point right now, and you've made this comment before in some of your writing, that demand has been relatively lackluster, and we know what the supply situation is and where supply is going. And demand in some of the higher volume markets has been where things are soft.
Jim Fitterling: Morning, Hassan. Thanks for the question. I don't think there's dramatically new data on the number of ethylene capacity rationalizations that have come out. We've seen more firm announcements out there. I think the total amount now is in the 15 to 20% of the European capacity that's coming out. I haven't seen anything substantive on anti-involution in China, so nothing has changed there. On Path to Zero, I think several things. In our view, the changes that are happening are going to lead to the next up cycle. We're at a point right now, and you've made this comment before in some of your writing, that demand has been relatively lackluster, and we know what the supply situation is and where supply is going. And demand in some of the higher volume markets has been where things are soft.
Um, as we mentioned the low cost assets um we ran them hard, we sent an ethylene production record even with uh cracker idle the good cracker Idols in Europe. Uh so I think it speaks to, you know, running the low cost assets hard
At the zero will put another cracker in the first quartile for us while we exit positions that are in the fourth quartile.
I think that's something that we have to do in every cycle.
We gave a guidance on the return on path to zero, which is at the low end and there are some up signs in their
Morning, Osan. Thanks for the question. Uh, I don't think there's dramatically new data on the number of ethylene capacity rationalizations that have come out. We've seen more firm announcements out there. I think the total amount now is in the 15–20% of the European, uh, capacity that's coming out. I haven't seen anything, uh, substantive on anti-invasion in China. So nothing has changed there, uh, on path to zero. I think several things, in our view, the changes that are happening are going to lead to the next upcycle.
And those will be driven by things that we can do to mitigate costs. Uh and obviously continued success on bringing in the premiums for the low carbon product that's coming out of there.
And we're we're able so far uh to see a a good outlook on the cost picture. We've got the detailed engineering design.
We're at a point right now and you've made this comment before and some of your writing that demand has been relatively lackluster. Um, and we know what the supply situation is and where Supply is going.
Jim Fitterling: So as we see housing, construction, infrastructure, and other things pick up, that's typically where you see things start to take off on operating rates. As we mentioned, the low-cost assets, we ran them hard. We set an ethylene production record even with a cracker idled, a good cracker idled in Europe. So I think it speaks to, you know, running the low-cost assets hard. Path2Zero will put another cracker in the first quartile for us while we exit positions that are in the fourth quartile. I think that's something that we have to do in every cycle. We gave guidance on the return on Path2Zero, which is at the low end, and there are some upsides in there.
So as we see housing, construction, infrastructure, and other things pick up, that's typically where you see things start to take off on operating rates. As we mentioned, the low-cost assets, we ran them hard. We set an ethylene production record even with a cracker idled, a good cracker idled in Europe. So I think it speaks to, you know, running the low-cost assets hard. Path2Zero will put another cracker in the first quartile for us while we exit positions that are in the fourth quartile. I think that's something that we have to do in every cycle. We gave guidance on the return on Path2Zero, which is at the low end, and there are some upsides in there.
Infrastructure other things. Pick up.
Essentially done. We've got the long lead time items procured. So we got a pretty good handle on how the costs are coming in the remainder uh is going to be the labor when we start to ramp that up.
That's typically where you see things start to take off an operating rates.
Your next question comes from Vincent Andrews with Morgan Stanley.
Um, as we mentioned, the low-cost assets, um, we ran them hard, we set an ethylene production record even with—
A cracker Idol, the good cracker Idol in Europe.
Uh, so I think it speaks to, you know, running the low-cost assets hard path. The Zero will put another cracker in the first quartile for us while we exit positions that are in the fourth quartile.
I think that's something that we have to do in every cycle.
Jim Fitterling: And those will be driven by things that we can do to mitigate the costs, and obviously continued success on bringing in the premiums for the low-carbon product that's coming out of there. And we're able so far to see a good outlook on the cost picture. We've got the detailed engineering design essentially done. We've got the long lead time items procured. So we've got a pretty good handle on how the costs are coming in. The remainder is going to be the labor when we start to ramp that up.
And those will be driven by things that we can do to mitigate the costs, and obviously continued success on bringing in the premiums for the low-carbon product that's coming out of there. And we're able so far to see a good outlook on the cost picture. We've got the detailed engineering design essentially done. We've got the long lead time items procured. So we've got a pretty good handle on how the costs are coming in. The remainder is going to be the labor when we start to ramp that up.
We gave a guidance on the return on path to zero, which is at the low end and there are some upsides in there.
Uh, thank you and uh, good morning everyone. Um Jim on on Alberta. Uh just a few clarifications this this is it 1 more year delay and then, 100% moving forward. Or is there any potential off-ramp or other opportunity there and then, secondarily on that? Um, it sounded like you, you, you were, maybe saying you'd be interested in bringing a partner in, um, maybe I'm putting words in your mouth or or looking at projects for an answer or something else. But maybe you could just expand on, um, other sort of things you might look at there and, and whether you're you're getting incoming, uh, interests around that.
Good morning, Vincent.
And those will be driven by things that we can do to mitigate costs. Uh and obviously continued success, on bringing in the premiums for the low carbon product that's coming out of there. And we're we're able so far uh to see a a good outlook on the cost picture. We've got the detailed engineering design.
Yeah. Uh the 2-year delay I think um, as we look at it, most of the change in the cost picture and the reduction in the returns is the capitalized interest on on what happens with that delay.
And so, you know, we had some of that in our partners had some of that as well.
Essentially done. We've got the long wait, time items procured. So we got a pretty good handle on how the costs are coming in the remainder, uh, is going to be the labor when we start to ramp that up.
Operator: Your next question comes from Vincent Andrews with Morgan Stanley.
Operator: Your next question comes from Vincent Andrews with Morgan Stanley.
Um, so yes, I think that is it. I mean, you'd have to have a, a very Armageddon scenario to look at something different. We don't anticipate that happening.
Your next question comes from Vincent Andrews with Morgan Stanley.
[Analyst] (Morgan Stanley): Thank you, and good morning, everyone. Jim, on Alberta, just a few clarifications. This is it, one more year of delay, and then 100% moving forward, or is there any potential off ramp or other opportunity there? And then secondarily on that, it sounded like you were maybe saying you'd be interested in bringing a partner in, maybe I'm putting words in your mouth or looking at project finance or something else, but maybe you could just expand on other sort of things you might look at there and whether you're getting incoming interest around that.
Vincent Andrews: Thank you, and good morning, everyone. Jim, on Alberta, just a few clarifications. This is it, one more year of delay, and then 100% moving forward, or is there any potential off ramp or other opportunity there? And then secondarily on that, it sounded like you were maybe saying you'd be interested in bringing a partner in, maybe I'm putting words in your mouth or looking at project finance or something else, but maybe you could just expand on other sort of things you might look at there and whether you're getting incoming interest around that.
when uh I mentioned about um flexible Arrangements, we haven't had any
Any serious inquiry from a partner standpoint. Um, I mentioned on the last call. Um, we're always open the value creating opportunities and we still remain that way. I think there may be some creative Finance opportunities to their, as long as those are good return for shareholders, we'd be open to talk about those.
Your next question comes from Mike scyon with Wells Fargo.
Uh, thank you and good morning everyone. Um, Jim on on Alberta, uh, just a few clarifications it. This this is it 1 more year of delay and then, 100% moving forward. Or is there any potential off-ramp or other opportunity there and then, secondarily on that? Um, it sounded like you, you you may be saying you'd be interested in bringing a partner in, um, maybe I'm putting words in your mouth or, or looking at projects financed or something else. But maybe you could just expand on, um, other sort of things you might look at there and, and whether you're you're getting incoming, uh, interests around that.
Hey, good morning. Um
Jim Fitterling: Good morning, Vincent. Yeah, the two-year delay, I think as we look at it, most of the change in the cost picture and the reduction in the returns is the capitalized interest on what happens with that delay. And so, you know, we had some of that, and our partners had some of that as well. So yes, I think that is it. I mean, you'd have to have a very Armageddon scenario to look at something different. We don't anticipate that happening. When I mentioned about flexible arrangements, we haven't had any serious inquiry from a partner standpoint. I mentioned on the last call, we're always open to value creating opportunities, and we still remain that way. I think there may be some creative finance opportunities there. As long as those are good return for shareholders, we'd be open to talk about those.
Jim Fitterling: Good morning, Vincent. Yeah, the two-year delay, I think as we look at it, most of the change in the cost picture and the reduction in the returns is the capitalized interest on what happens with that delay. And so, you know, we had some of that, and our partners had some of that as well. So yes, I think that is it. I mean, you'd have to have a very Armageddon scenario to look at something different. We don't anticipate that happening. When I mentioned about flexible arrangements, we haven't had any serious inquiry from a partner standpoint. I mentioned on the last call, we're always open to value creating opportunities, and we still remain that way. I think there may be some creative finance opportunities there. As long as those are good return for shareholders, we'd be open to talk about those.
Good morning, Vincent.
Yeah, uh, the two-year delay, I think, um,
As we look at it, most of the change in the cost picture and the reduction in the returns is the capitalized interest on on what happens with that delay.
And so, you know, we had some of that in our partners had some of that as well.
So, you know, the the export markets has continued to be um, a continued to have really low margins. Zero margins in most cases for polyethylene. Can you help me? Understand how much of your PSD capacity goes to the export market? And, you know, some companies have opted to reduce their capacity in the States because, you know, the the
Um, so yes, I think that is it. I mean, you’d have to have a very Armageddon scenario to look at something different. We don’t anticipate that happening.
The the those markets remain low for quite some time and any thoughts on, you know, how much of your capacity you want to be in the export market and any any thoughts about reducing that over time?
Yeah, good morning Michael um about 30 to 40% of our PSP volumes currently from our North American assets. Go to the export Market.
Um, I think as we look forward uh 2 things that we have to take into consideration is the cost position.
1. Uh I mentioned about um flexible Arrangements. We haven't had any any serious inquiry from a partner standpoint. Um, I mentioned on the last call. Um we're always open the value creating opportunities and we still remain that way. I think there may be some creative Finance opportunities there. As long as those are good return for shareholders, we'd be open to talk about those.
Operator: Your next question comes from Michael Sison with Wells Fargo.
Operator: Your next question comes from Michael Sison with Wells Fargo.
[Analyst] (Wells Fargo): Hey, good morning. So, you know, the export markets continue to have really low margins, zero margins in most cases for polyethylene. Can you help me understand how much of your P&SP capacity goes to the export market? And, you know, some companies have opted to reduce their capacity in the States because, you know, those markets remain low for quite some time. And any thoughts on, you know, how much of your capacity you want to be in the export market and any thoughts about reducing that over time?
Mike Sison: Hey, good morning. So, you know, the export markets continue to have really low margins, zero margins in most cases for polyethylene. Can you help me understand how much of your P&SP capacity goes to the export market? And, you know, some companies have opted to reduce their capacity in the States because, you know, those markets remain low for quite some time. And any thoughts on, you know, how much of your capacity you want to be in the export market and any thoughts about reducing that over time?
Your next question comes from Mike cyon with Wells Fargo.
Hey, good morning. Um
Uh, ethane cracking and and the great cost Advantage. We get from that is especially important. The second is the product mix when you look at the product mix that we put on the assets and are all of those products available globally. And in many cases, they are not
So you know, the the export Market says continue to be um a continued to have really low margins. Zero margins in most cases for polyethylene
You're going to be a a shift, obviously there's a lot of shifts coming, uh, with all the trade talks, with all the geopolitical tensions that are going on.
But from our Viewpoint long-term.
Can you help me understand how much of your PSD capacity goes to the export market? And, you know, some companies have opted to reduce their capacity in the States because, you know, the—
The Americas are going to be advantaged from a gas cost position. The supply is there. They will be low cost, Middle East, will continue to be advantaged.
The the the the those markets remain low for quite some time and any thoughts on, you know, how much of your capacity you want to be in the expert market? And any any thoughts about reducing that over time?
Jim Fitterling: Yeah, good morning, Michael. About 30% to 40% of our PSP volumes currently from our North American assets go to the export market. I think as we look forward, two things that we have to take into consideration is the cost position, ethane cracking, and the great cost advantage we get from that is especially important. The second is the product mix. When you look at the product mix that we put on the assets, and are all of those products available globally? And in many cases, they are not. That has a big difference on the returns that we get on some of the exports. There's going to be a shift. Obviously, there's a lot of shifts coming with all the trade talks, with all the geopolitical tensions that are going on.
Jim Fitterling: Yeah, good morning, Michael. About 30% to 40% of our PSP volumes currently from our North American assets go to the export market. I think as we look forward, two things that we have to take into consideration is the cost position, ethane cracking, and the great cost advantage we get from that is especially important. The second is the product mix. When you look at the product mix that we put on the assets, and are all of those products available globally? And in many cases, they are not. That has a big difference on the returns that we get on some of the exports. There's going to be a shift. Obviously, there's a lot of shifts coming with all the trade talks, with all the geopolitical tensions that are going on.
And um, our position in Argentina looks to be continued to be advantaged. So that's where we want to maximize and that's where our investments. If you look at our investments not just Plastics, but across the board, they've been our in our home bases that are in those low cost positions.
Yeah, good morning Michael. About 30% to 40% of our PSP volumes currently from our North American assets go to the export market.
Our next question comes from Jeff. It's AOS with JP Morgan.
Um, I think as we look forward uh 2 things that we have to take into consideration is the cost position.
Uh, thanks very much.
Um, your cash flow from operations was a billion. And in reading your slides, I guess, slide 13.
Uh, ethane cracking and the great cost advantage we get from that is especially important. The second is the product mix. When you look at the product mix that we put on the assets, and are all of those products available globally? In many cases, they are not. That has a big difference on the returns that we get on some of the exports.
It looks like you got 450 from long-term Supply agreements in 250 from domestic churches. So excluding that cash flow from operations.
300 million.
What what are your expectations for?
Jim Fitterling: But from our viewpoint, long term, the Americas are going to be advantaged from a gas cost position. The supply is there. They will be low cost. The Middle East will continue to be advantaged. And our position in Argentina looks to continue to be advantaged. So that's where we want to maximize. And that's where our investments, if you look at our investments, not just plastics, but across the board, they've been in our home bases that are in those low cost positions.
But from our viewpoint, long term, the Americas are going to be advantaged from a gas cost position. The supply is there. They will be low cost. The Middle East will continue to be advantaged. And our position in Argentina looks to continue to be advantaged. So that's where we want to maximize. And that's where our investments, if you look at our investments, not just plastics, but across the board, they've been in our home bases that are in those low cost positions.
2026. And is that a correct assessment of what happened this year?
There's going to be a a shift, obviously there's a lot of shifts coming, uh, with all the trade talks, with all the geopolitical tensions that are going on but from our Viewpoint long term.
The Americas are going to be advantaged from a gas cost position. The supply is there. They will be low cost, Middle East, will continue to be advantaged.
Yes, maybe I'll ask you to make some comments on the cash flow Outlook. But, uh, Jeff Z 1 of the things I would say is,
Tina looks to be continued to be advantaged. So that's where we want to maximize and that's where our investments. If you look at our investments not just Plastics, but across the board, they've been our in our home bases that are in those low cost positions.
Operator: Your next question comes from Jeffrey Zekauskas with J.P. Morgan.
Operator: Your next question comes from Jeffrey Zekauskas with J.P. Morgan.
[Analyst] (Goldman Sachs): Thanks very much. Your cash flow from operations was $1 billion. In reading your slides, I guess slide 13, it looks like you got $450 million from long-term supply agreements and $250 million from divestitures. Excluding that, cash flow from operations, $300 million. What are your expectations for 2026? And is that a correct assessment of what happened this year?
Jeff Zekauskas: Thanks very much. Your cash flow from operations was $1 billion. In reading your slides, I guess slide 13, it looks like you got $450 million from long-term supply agreements and $250 million from divestitures. Excluding that, cash flow from operations, $300 million. What are your expectations for 2026? And is that a correct assessment of what happened this year?
Our next question comes from Jeff Sulskis with JP Morgan.
Uh, thanks very much.
Um, your cash flow from operations was a billion. And in reading your slides, I guess, slides, 13.
It looks like you got 450 from long-term Supply agreements in 250 from the best trips. So excluding that cash flow from operations.
300 million.
What what are your expectations for?
Clearly, uh, we're working hard on restoring margins. So that's 1 of the first priorities. And then, obviously the cost out actions that we mentioned, which are, uh, worth about a billion dollars for this year. On self-help actions. Yeah, yeah. Good morning. Jeff. Um, couple comments I would make is just recognize, you know, we're closing out 2025 with a really solid cash balance of almost 4 billion dollars. If you add in those year-over-year, earnings Improvement opportunities that Jim just mentioned, you know, 1 is the 500 million dollars, close out of the billion dollars of cost reductions. Secondly would be the second the the transformed to outperform Eva uplift of 500 million dollars. We've also got our growth Investments and our asset actions that will deliver at least a hundred million dollars of earnings uplift year-over-year. In addition to that, Jeff, we'll have the 1.2 billion dollars from the Nova proceeds, as well as we're expecting a networking Capital efficiency game with the release of cash.
2026. And it, is that a correct assessment of what happened this year?
Jim Fitterling: Jeff, maybe I'll ask you to make some comments on the cash flow outlook. But Jeff Z, one of the things I would say is clearly we're working hard on restoring margins. So that's one of the first priorities. And then obviously the cost out actions that we mentioned, which are worth about $1 billion for this year on self-help actions.
Jim Fitterling: Jeff, maybe I'll ask you to make some comments on the cash flow outlook. But Jeff Z, one of the things I would say is clearly we're working hard on restoring margins. So that's one of the first priorities. And then obviously the cost out actions that we mentioned, which are worth about $1 billion for this year on self-help actions.
Yeah, maybe I'll ask you to make some comments on the cash flow Outlook. But, uh, Jeff Z 1 of the things I would say is,
500 million during the course of 2026. So with each 1 of those actions from an IBA uplift perspective as well as Direct Cash Flow um infusion. We're in a good position to be able to support our cash flow needs going through 2026 Beyond
Your next question comes from Chris Parkinson, with Wolfe research.
James Fitterling: Yeah, good morning, Jeff. A couple of comments I would make as you recognize, you know, we're closing out 2025 with a really solid cash balance of almost $4 billion. If you add in those year-over-year earnings improvement opportunities that Jim just mentioned, you know, one is the $500 million closeout of the $1 billion of cost reductions. Secondly would be the Transform to Outperform EBITDA uplift of $500 million. We've also got our growth investments and our asset actions that will deliver at least $100 million of earnings uplift year-over-year. In addition to that, Jeff, we'll have the $1.2 billion from the NOVA proceeds, as well as we're expecting a network and capital efficiency gain with the release of cash of $500 million during the course of 2026.
Jeff Tate: Yeah, good morning, Jeff. A couple of comments I would make as you recognize, you know, we're closing out 2025 with a really solid cash balance of almost $4 billion. If you add in those year-over-year earnings improvement opportunities that Jim just mentioned, you know, one is the $500 million closeout of the $1 billion of cost reductions. Secondly would be the Transform to Outperform EBITDA uplift of $500 million. We've also got our growth investments and our asset actions that will deliver at least $100 million of earnings uplift year-over-year. In addition to that, Jeff, we'll have the $1.2 billion from the NOVA proceeds, as well as we're expecting a network and capital efficiency gain with the release of cash of $500 million during the course of 2026.
Great, thank you so much. Um, Jim. If you could just take a a step back just given, you know, the 6 billion quoted in the PowerPoint and you know what? You're seeing current polyethylene integrated margins, you know, how do you see that evolving over? Let's say, the first half of 26, through 27/28, you know, just giving where we are on the cycle. Um, what under underpins those assumptions and what do you think, perhaps the street is missing? If you believe people are, let's say, you know, particularly too low. Um just your updated thoughts on, that would be greatly appreciated. Thank you so much.
Clearly, uh, we're working hard on restoring margins. So that's 1 of the first priorities. And then, obviously the cost out actions that we mentioned, which are, uh, worth about a billion dollars for this year on self-help actions. Yep. Yeah. Good morning. Jeff. Um, couple comments, I would make, as you recognize, you know, we're closing out 2025 with a really solid cash balance of almost 4 billion dollars. If you add in those year-over-year, earnings Improvement opportunities that Jim just mentioned, you know, 1 is the 500 million dollars, close out of the billion dollars of cost reductions. Secondly would be the second the the transformed to outperform Eva uplift of 500 million dollars. We've also got our growth Investments and our asset actions that will deliver at least a hundred million dollars of earnings uplift year-over-year. In addition to that, Jeff, we'll have the 1.2 billion dollars from the Nova proceeds, as well as we're expecting a networking Capital efficiency game with the release of cash.
Yeah thank you Chris, good question. I think we do expect integrated margins to improve um even with the weather situation. So we've had here, I think um the input costs especially in the Americas have been very stable
James Fitterling: So with each one of those actions from an EBITDA uplift perspective, as well as direct cash flow infusion, we're in a good position to be able to support our cash flow needs going through 2026 and beyond.
So with each one of those actions from an EBITDA uplift perspective, as well as direct cash flow infusion, we're in a good position to be able to support our cash flow needs going through 2026 and beyond.
500 million dollars during the course of 2026. So with each 1 of those actions from an Eva uplift perspective as well as Direct Cash Flow. Um in Fusion we're in a good position to be able to support our cash flow needs going through 2026 Beyond
Operator: Your next question comes from Chris Parkinson with Wolfe Research.
Operator: Your next question comes from Chris Parkinson with Wolfe Research.
Your next question comes from Chris Parkinson, with Wolfe research.
Andrew Riker: Great. Thank you so much. Jim, if you could just take a step back, just given, you know, the $6 billion quoted in the PowerPoint and, you know, what you're seeing from polyethylene integrated margins, you know, how do you see that evolving over, let's say, the first half of 2026 through 2027, 2028, you know, just given where we are in the cycle? What underpins those assumptions? And what do you think perhaps the street is missing if you believe people are, let's say, you know, particularly too low? Just your updated thoughts on that would be greatly appreciated. Thank you so much.
Chris Parkinson: Great. Thank you so much. Jim, if you could just take a step back, just given, you know, the $6 billion quoted in the PowerPoint and, you know, what you're seeing from polyethylene integrated margins, you know, how do you see that evolving over, let's say, the first half of 2026 through 2027, 2028, you know, just given where we are in the cycle? What underpins those assumptions? And what do you think perhaps the street is missing if you believe people are, let's say, you know, particularly too low? Just your updated thoughts on that would be greatly appreciated. Thank you so much.
Jim Fitterling: Yeah, thank you, Chris. Good question. I think we do expect integrated margins to improve. Even with the weather situations that we've had here, I think the input costs, especially in the Americas, have been very stable. The drawdown in inventories at the end of the year in North America has really helped as we lean into Q1. We're getting some pricing power moving things up. So I think one of the things we've got to be careful is that we're not extrapolating from a Q4, Q1 data point, which typically are not the strong parts of the quarter. So we're talking about bottom of the cycle integrated margins. And, you know, you don't want to extrapolate those forward. And we will see demand improvement as we continue to move through this and see the rationalizations come.
Jim Fitterling: Yeah, thank you, Chris. Good question. I think we do expect integrated margins to improve. Even with the weather situations that we've had here, I think the input costs, especially in the Americas, have been very stable. The drawdown in inventories at the end of the year in North America has really helped as we lean into Q1. We're getting some pricing power moving things up. So I think one of the things we've got to be careful is that we're not extrapolating from a Q4, Q1 data point, which typically are not the strong parts of the quarter. So we're talking about bottom of the cycle integrated margins. And, you know, you don't want to extrapolate those forward. And we will see demand improvement as we continue to move through this and see the rationalizations come.
Great, thank you so much. Um, Jim. If you could just take a a step back just given, you know, the 6 billion quoted in the PowerPoint. And you know what you're seeing from. Polyethylene, integrated margins, you know, how do you see that evolving over, let's say, the first half of 26 through 2728, you just given where we are on the cycle, um, what under underpins those assumptions and what do you think, perhaps the street is missing? If you believe people are, let's say, you know, particularly too low. Um just your updated thoughts on, that would be greatly appreciated. Thank you so much.
Um, the draw down in inventory. Is at the end of the year. In North America has really helped as we lean into first quarter. We've gained some pricing power and moving things up. So, I think 1 of the things we got to be careful is that we're not extrapolating from a fourth quarter. First quarter data point, which typically are not the strong parts of the quarter. So, we're talking about bottom of the cycle, integrated margins. And, you know, you don't want to extrapolate those forward, and we will see, demand Improvement as we continue to move through this and see the rationalizations come Karen, any specific comments on what you're seeing in the marketplace right now and integrated margins. Yeah, I think the the other thing I'd add Jim is that, from a polyethylene, demand perspective, you know, it remains resilient, it's still growing above GDP. You mentioned, you know, towards the end of the year that through know that through November we saw in Industry inventories, come down by 400 million pounds. I think the other important data point is that November, you know, was the highest
Yeah, thank you Chris, good question. I think we do expect integrated margins to improve. Um even with the weather situations that we've had here, I think um the input costs especially in the Americas have been very stable
Exports out of the low-cost regions uh in north in North America continued to be strong and so we absolutely expect coming into the first quarter that integrated margins will improve. Um prices will go up in January. And even before the the recent spike in the feed stocks that you referenced Jen. Um, the situation was already there, the conditions were there for prices to co-op and the other thing I last thing I'd mention is we have to keep in mind that industry integrated margins have been at this low level for a while uh and so there's a lot of motivation to and reason to move them up.
Um the draw down in inventories, at the end of the year in North America has really helped as we lean into first quarter. We've getting some pricing power and moving things up. So I think 1 of the things we got to be careful is that we're not extrapolating from a fourth quarter. First quarter data point where it's typically or not the strong parts of the quarter. So we're talking about bottom of the cycle, integrated margins. And, you know, you don't want to extrapolate those forward, and we will see demand Improvement as we continue to move.
Jim Fitterling: Karen, any specific comments on what you're seeing in the marketplace right now on integrated margins?
Karen, any specific comments on what you're seeing in the marketplace right now on integrated margins?
your next question comes from Kevin McCarthy, with vertical, research partners,
Jane Palmieri: Yeah, I think the other thing I'd add, Jim, is that from a polyethylene demand perspective, you know, it remains resilient. It's still growing above GDP. You mentioned, you know, towards the end of the year that through November we saw industry inventories come down by 400 million pounds. I think the other important data point is that November, you know, was the highest monthly volume of 2025 and actually set a total sales record, both from a domestic perspective, as well as exports. So exports out of the low-cost regions in North America continued to be strong. And so we absolutely expect coming into Q1 that integrated margins will improve. Prices will go up in January. And even before the recent spike in the feedstocks that you referenced, Jim, the situation was already there. The conditions were there for prices to go up.
Karen Carter: Yeah, I think the other thing I'd add, Jim, is that from a polyethylene demand perspective, you know, it remains resilient. It's still growing above GDP. You mentioned, you know, towards the end of the year that through November we saw industry inventories come down by 400 million pounds. I think the other important data point is that November, you know, was the highest monthly volume of 2025 and actually set a total sales record, both from a domestic perspective, as well as exports. So exports out of the low-cost regions in North America continued to be strong. And so we absolutely expect coming into Q1 that integrated margins will improve. Prices will go up in January. And even before the recent spike in the feedstocks that you referenced, Jim, the situation was already there. The conditions were there for prices to go up.
Yes, thank you and good morning, uh, your III and I segment. Um, trended a little bit weaker uh than I, I think you and and I both expected uh, 2 or 3 months ago, so maybe a 2-part question. Can you can you talk about the variances that manifested, uh, in that segment versus your prior expectations? And then, uh, the second part would be on polyurethanes, I, I think in the past you had discussed the Strategic review of that business. Is there any, uh, update on the efforts? There is it, is it active, or or dormant? I appreciate any color there.
Karen, do you want to touch on II and I and then I can come back on polyurethanes
Jane Palmieri: The other thing, last thing I'd mention is we have to keep in mind that industry integrated margins have been at this low level for a while. And so there's a lot of motivation and reason to move them up.
The other thing, last thing I'd mention is we have to keep in mind that industry integrated margins have been at this low level for a while. And so there's a lot of motivation and reason to move them up.
Industry integrated margins have been at this low level for a while, uh, and so there's a lot of motivation, so you can reason to move them up.
Operator: Your next question comes from Kevin McCarthy with Vertical Research Partners.
Operator: Your next question comes from Kevin McCarthy with Vertical Research Partners.
Jeff Tate: Yeah, thank you, and good morning. Your I&I segment trended a little bit weaker than I think you and I both expected two or three months ago. So maybe a two-part question. Can you talk about the variances that manifested in that segment versus your prior expectations? And then the second part would be on polyurethanes. I think in the past you had discussed a strategic review of that business. Is there any update on the efforts there? Is it active or dormant? Appreciate any color there.
Kevin McCarthy: Yeah, thank you, and good morning. Your I&I segment trended a little bit weaker than I think you and I both expected two or three months ago. So maybe a two-part question. Can you talk about the variances that manifested in that segment versus your prior expectations? And then the second part would be on polyurethanes. I think in the past you had discussed a strategic review of that business. Is there any update on the efforts there? Is it active or dormant? Appreciate any color there.
your next question comes from Kevin McCarthy, with vertical, research partners,
Sure. You know, in the fourth quarter, we did see normal seasonal, demand declines, uh, particularly in the building and the construction Market. Uh, and the reality is that that market just continues to be under pressure, uh, not just domestically, but but around the world and of course, that is uh, putting downward pressure on pricing, uh, you know, but also if you, if you think about housing, um, if you think about Automotive, those markets are are just weak around the world. Um and and so you know, as we went into fourth quarter, we we saw that we had some lower fixed costs as well as lower plan maintenance but uh the building I Construction in markets and durables just just really upset that
Um, as we think about first quarter, we, we do expect to see some modest seasonal demand improvements and also Tailwind from cost actions. Uh, but we have a bit of plan maintenance that's going to offset that. And again, um, just continue downward pressure, particularly, and the building and construction Market.
Yes, thank you and good morning. Uh, your II and I segment um trended a little bit weaker uh than I, I think you and and I both expected uh 2 or 3 months ago, so maybe a 2-part question. Could you can you talk about the variances that manifested, uh, in that segment versus your prior expectations? And then, uh, the second part would be on polyurethanes. I, I think in the past, you had discussed a strategic review of that business. Is there any, uh, update on the efforts? There is it is it active, or or dormant, appreciate any color there?
Jim Fitterling: Karen, do you want to touch on II&I, and then I can come back on polyurethanes?
Jim Fitterling: Karen, do you want to touch on II&I, and then I can come back on polyurethanes?
Jane Palmieri: Sure. You know, in Q4, we did see normal seasonal demand declines, particularly in the building and construction market. The reality is that that market just continues to be under pressure, not just domestically, but around the world. Of course, that is putting downward pressure on pricing. You know, but also if you think about housing, if you think about automotive, those markets are just weak around the world. So, you know, as we went into Q4, we saw that we had some lower fixed costs as well as lower planned maintenance. But the building and construction and markets and durables just really offset that. As we think about Q1, we do expect to see some modest seasonal demand improvements and also tailwinds from cost actions. But we have a bit of planned maintenance that's going to offset that.
Sure. You know, in Q4, we did see normal seasonal demand declines, particularly in the building and construction market. The reality is that that market just continues to be under pressure, not just domestically, but around the world. Of course, that is putting downward pressure on pricing. You know, but also if you think about housing, if you think about automotive, those markets are just weak around the world. So, you know, as we went into Q4, we saw that we had some lower fixed costs as well as lower planned maintenance. But the building and construction and markets and durables just really offset that. As we think about Q1, we do expect to see some modest seasonal demand improvements and also tailwinds from cost actions. But we have a bit of planned maintenance that's going to offset that.
I'm Paula urethanes. We continue to look for the best options. Kevin on on a go forward basis for the polyurethane franchise. We're obviously making a lot of changes. We noted that we took out 20% of North American Poe capacity at the end of first quarter.
Karen, do you want to touch on? I I and I and then I can come back on polyurethane.
Uh, so we're having some rationalization uh in the industry and higher cost assets to kind of address the oversupply situation there.
Sure. You know, in the fourth quarter, we did see normal seasonal, demand declines, uh, particularly in the building and the construction Market. Uh, and the reality is that that market just continues to be under pressure.
I would say additionally, uh, the team's been very busy on the trade front. I mentioned and I competitive practices before, but Europe is special has been hit, very, very hard.
Uh, from dumping of material into the European continent.
And this comes from regions that don't have any particular cost advantage to Bringing In.
Um, and so we've seen some actions, I think are going to have positive impact
Not just domestically but but around the world and of course, that is, uh, putting downward pressure on pricing, uh, you know, but also if you, if you think about housing, um, if you think about Automotive, those markets are are just weak around the world. Um and and so you know, as we went into fourth quarter, we we saw that we had some lower fixed costs as well as lower plan maintenance but uh the building I Construction in markets and durables, just just really offset that.
Jane Palmieri: Again, just continued downward pressure, particularly in the building and construction market.
Again, just continued downward pressure, particularly in the building and construction market.
Uh, in China, for example, the announcement that the 13%, uh, Duty drawback for exports out of China is going away at the end of first quarter in April, I believe it's when it goes away.
Jim Fitterling: On polyurethanes, we continue to look for the best options, Kevin, on a go-forward basis for the polyurethanes franchise. We're obviously making a lot of changes. We noted that we took out 20% of North American PO capacity at the end of Q1. So we're having some rationalization in the industry and higher cost assets to kind of address the oversupply situation there. I would say additionally, the team has been very busy on the trade front. I mentioned anti-competitive practices before, but Europe especially has been hit very, very hard from dumping of material into the European continent. And this comes from regions that don't have any particular cost advantage to bring it in. And so we've seen some actions I think are going to have positive impact.
Jim Fitterling: On polyurethanes, we continue to look for the best options, Kevin, on a go-forward basis for the polyurethanes franchise. We're obviously making a lot of changes. We noted that we took out 20% of North American PO capacity at the end of Q1. So we're having some rationalization in the industry and higher cost assets to kind of address the oversupply situation there. I would say additionally, the team has been very busy on the trade front. I mentioned anti-competitive practices before, but Europe especially has been hit very, very hard from dumping of material into the European continent. And this comes from regions that don't have any particular cost advantage to bring it in. And so we've seen some actions I think are going to have positive impact.
Um, as we think about first quarter, we, we do expect to see some modest seasonal demand improvements and also Tailwind from cost actions. Uh, but we have a bit of plan maintenance that's going to offset that. And again, um, just continue downward pressure particularly in the building and construction Market.
So there were companies that don't have the cost position to be able to export under Free Trade Fair Trade rules that we're getting 13% Duty drawbacks for all their exports.
I'm Paula urethanes. We continue to look for the best options. Kevin on, on a go forward basis for the polyurethanes franchise. We're obviously making a lot of changes. We noted that we took out 20% of North America's Poe capacity at the end of first quarter,
Uh, so we're having some rationalization uh in the industry and higher cost to assets to kind of address the oversupply situation there.
That's going to go away. Um and you've got a whole host of cases on anti-dumping that are starting to take hold um there's been more traction in the Americas than there has been in Europe. Europe has a bit slower to respond but it is on the radar screen and it is going to attention in Europe.
Your next question comes from Matthew. Blair with tph.
I would say, additionally, uh, the team's been very busy on the trade front, I mentioned and I competitive practices before but Europe is actually has been hit very, very hard.
Uh, from dumping of material into the European continent.
And this comes from regions that don't have any particular cost advantage to Bringing In.
Jim Fitterling: In China, for example, the announcement that the 13% duty drawback for exports out of China is going away at the end of Q1 in April, I believe, is when it goes away. So there were companies that don't have the cost position to be able to export under free trade, fair trade rules that were getting 13% duty drawbacks for all their exports. That's going to go away. And you've got a whole host of cases on anti-dumping that are starting to take hold. There's been more traction in the Americas than there has been in Europe. Europe is a bit slower to respond, but it is on the radar screen and is getting attention in Europe.
In China, for example, the announcement that the 13% duty drawback for exports out of China is going away at the end of Q1 in April, I believe, is when it goes away. So there were companies that don't have the cost position to be able to export under free trade, fair trade rules that were getting 13% duty drawbacks for all their exports. That's going to go away. And you've got a whole host of cases on anti-dumping that are starting to take hold. There's been more traction in the Americas than there has been in Europe. Europe is a bit slower to respond, but it is on the radar screen and is getting attention in Europe.
Um, and so we've seen some actions I think are going to have a positive impact.
Uh, in China, for example, the announcement that the 13%, uh, Duty drawback for exports out of China is going away. At the end of first quarter in April, I believe is when it goes away.
Uh, thank you and good morning. Um, could you talk a little bit more about your outlook for feed stock costs for your us cracking business? I think you mentioned that q1 should benefit from lower ethane costs which you know makes sense based on just a quarter date numbers. But are you concerned that ethane uh might rise later in 2026 with the startup of 3, new natural gas pipelines from the peryam and then long term. How do you feel about the overall availability and pricing uh, for natural gas and ethane given all this, you know, competing demand from Ai and and LG thank you.
So there were companies that don't have the cost positions to be able to export under Free Trade Fair Trade rules that we're getting 13% Duty drawbacks for all their exports.
That's going to go away. Um and you've got a whole host of cases on anti-dumping that are starting to take hold um there's been more traction in the Americas than there has been in Europe.
General. I would say the electricity demand that drives, you know, that that power demand for AI and Tech is a good thing. Um, America has the production capability.
Uh, and it will drive the natural gas production.
Europe is a bit slower to respond, but it is on the radar screen and it is going to attention in Europe.
Operator: Your next question comes from Matthew Blair with TPH.
Operator: Your next question comes from Matthew Blair with TPH.
Your next question comes from Matthew. Blair with tph.
[Analyst] (Goldman Sachs): Thank you and good morning. Could you talk a little bit more about your outlook for feedstock costs for your US cracking business? I think you mentioned that Q1 should benefit from lower ethane costs, which, you know, makes sense based on just the quarter-to-date numbers. But are you concerned that ethane might rise later in 2026 with the startup of three new natural gas pipelines from the Permian? And then long term, how do you feel about the overall availability and pricing for natural gas and ethane given all this, you know, competing demand from AI and LNG? Thank you.
Matthew Blair: Thank you and good morning. Could you talk a little bit more about your outlook for feedstock costs for your US cracking business? I think you mentioned that Q1 should benefit from lower ethane costs, which, you know, makes sense based on just the quarter-to-date numbers. But are you concerned that ethane might rise later in 2026 with the startup of three new natural gas pipelines from the Permian? And then long term, how do you feel about the overall availability and pricing for natural gas and ethane given all this, you know, competing demand from AI and LNG? Thank you.
And as the natural gas needs, uh, rise, obviously, people will want to take the Natural Gas, Liquids out to get the maximum return they can and we've we see about 8% growth in the fractionation capacity, coming.
Uh, at the end of, uh, 2026 and into 2027. So I think there's going to be plenty of ability to take that ethane out, and we'll have pretty good NGO prices through there, we've got 20 to 23 cents right now. Um, in the price Outlook, which is a fra spread of about 25 cents. A million btu, you know, 0 to 25 cents. It's pretty normal.
Uh, thank you and good morning. Um, could you talk a little bit more about your outlook for feedback costs for your us cracking business? If you mentioned that q1 should benefit from lower ethane costs? Which you know makes sense based on just a quarter date numbers, but are you concerned that ethane uh might rise later in 2026 with the startup of 3, new natural gas pipelines from the peryam and then long term. How do you feel about the overall availability and pricing uh, for natural gas and ethane given all this, you know, competing demand from Ai and and LG thank you.
Jim Fitterling: Hey, Matthew, good question. I mean, energy sector is one we watch pretty closely. In general, I would say the electricity demand that drives, you know, that power demand for AI and tech is a good thing. America has the production capability, and it will drive the natural gas production. And as the natural gas needs rise, obviously, people will want to take the natural gas liquids out to get the maximum return they can. And we see about 8% growth in the fractionation capacity coming at the end of 2026 and into 2027. So I think there's going to be plenty of ability to take that ethane out, and we'll have pretty good NGL prices through there. We've got $0.20 to 0.23 right now in the price outlook, which is a frac spread of about $0.25 a million BTU, you know, $0 to 0.25.
Jim Fitterling: Hey, Matthew, good question. I mean, energy sector is one we watch pretty closely. In general, I would say the electricity demand that drives, you know, that power demand for AI and tech is a good thing. America has the production capability, and it will drive the natural gas production. And as the natural gas needs rise, obviously, people will want to take the natural gas liquids out to get the maximum return they can. And we see about 8% growth in the fractionation capacity coming at the end of 2026 and into 2027. So I think there's going to be plenty of ability to take that ethane out, and we'll have pretty good NGL prices through there. We've got $0.20 to 0.23 right now in the price outlook, which is a frac spread of about $0.25 a million BTU, you know, $0 to 0.25.
Um and then I think the other thing that we have to watch is just what happens with LNG exports and so LNG has been moving because of the exports. So we have to watch LG export capacity and approve. What was been timeline when those come on?
Hey Matthew, good question. I mean energy. Uh, sector is 1. We watch Pretty closely in general. I would say the electricity demand that drives, you know that that power demand for AI and Tech is a good thing. Um, America has the production capability.
uh, the short-term Spike that we just uh witnessed was because of freeze offs on in the Haynesville and and some of the other basins that were pretty cold
Uh, and it will drive the natural gas production.
And so that creates a kind of a short-term Supply disruption and in a very cold weather environment, where we're drawn down natural gas. So we've seen some pretty
wild movements in that market.
But that market clears pretty quickly, and I think is this weather moderates. Uh, you'll see things come back to normal,
Your next question comes from Matthew d.
Of America.
Morning. Um,
2 billion. It's a, it's a really big number. Um,
I think 1 of the issues that we kind of see with,
Jim Fitterling: It's pretty normal. And then I think the other thing that we have to watch is just what happens with LNG exports. And so LNG has been moving because of the exports. So we have to watch LNG export capacity, approvals, and timeline when those come on. The short-term spike that we just witnessed was because of freeze-offs in the Haynesville and some of the other basins that were pretty cold. And so that creates a kind of a short-term supply disruption and a very cold weather environment where we're drawing down natural gas. So we've seen some pretty wild movements in that market. But that market clears pretty quickly. And I think as this weather moderates, you'll see things come back to normal.
It's pretty normal. And then I think the other thing that we have to watch is just what happens with LNG exports. And so LNG has been moving because of the exports. So we have to watch LNG export capacity, approvals, and timeline when those come on. The short-term spike that we just witnessed was because of freeze-offs in the Haynesville and some of the other basins that were pretty cold. And so that creates a kind of a short-term supply disruption and a very cold weather environment where we're drawing down natural gas. So we've seen some pretty wild movements in that market. But that market clears pretty quickly. And I think as this weather moderates, you'll see things come back to normal.
We we see about 8% growth in the fractionation capacity coming uh at the end of uh, 2026 and into 2027. So I think there's going to be plenty of ability to take that essay out and we'll have pretty good NGO prices through there, we've got 20 to 23 cents right now. Um, in the price Outlook, which is a fra spread of about 25 cents. A million btu, you know, 0 to 25 cents. It's pretty normal.
With productivity initiatives. Sometimes in commodity companies is like
Um and then I think the other thing that we have to watch is just what happens with LNG exports and so LNG has been moving because of the exports. So we have to watch, LG, export capacity and approval has been timeline when those come on.
It just kind of gets lost to the cycle and we often hear, you know, you should have seen how bad things would have been if we didn't, you know, cut costs. So as we try to grade the curve, where we begin to see the tangible evidence, like there's 400 million Savings in 2025.
The short-term spike that we just witnessed was because of freeze-offs in the Haynesville and some of the other basins that were pretty cold.
Where was that registering across the line items? I know you had mentioned II and I, uh, saw some benefits, but it's Candle hard to tell. And then there was comments about lower cost quarter over quarter. And PNP, is that where we're seeing some of the, the 400 million and the fixed cost. And
And so that creates a kind of a short-term Supply disruption and, and a very cold weather environment, where we're drawn down natural gas. So we've seen some pretty
Wild movements in that market.
as we look ahead with the 2, the 2 billion does sgna move lower on an absolute basis. You know what, what segments will we see? The most tangible uplift.
For that market, clears pretty quickly. And I think is this weather moderates. Uh, you'll see things come back to normal,
Operator: Your next question comes from Matthew DeYoe with Bank of America.
Operator: Your next question comes from Matthew DeYoe with Bank of America.
Your next question comes from Matthew, with Bank of America.
James Fitterling: Morning. $2 billion, it's a really big number. I think one of the issues that we kind of see with productivity initiatives sometimes in commodity companies is like it just kind of gets lost to the cycle. And we often hear, you know, you should have seen how bad things would have been if we didn't, you know, cut costs. So as we try to grade the curve, where will we begin to see the tangible evidence? Like there's $400 million savings in 2025. Where was that registering across the line items? I know you had mentioned I&I. I&I saw some benefits, but it's candidly hard to tell. And then there were comments about lower costs quarter-over-quarter in P&SP. Is that where we're seeing some of the $400 million and the fixed costs?
Matthew DeYoe: Morning. $2 billion, it's a really big number. I think one of the issues that we kind of see with productivity initiatives sometimes in commodity companies is like it just kind of gets lost to the cycle. And we often hear, you know, you should have seen how bad things would have been if we didn't, you know, cut costs. So as we try to grade the curve, where will we begin to see the tangible evidence? Like there's $400 million savings in 2025. Where was that registering across the line items? I know you had mentioned I&I. I&I saw some benefits, but it's candidly hard to tell. And then there were comments about lower costs quarter-over-quarter in P&SP. Is that where we're seeing some of the $400 million and the fixed costs?
Morning.
It's a good question, Matt. And you know it's the 2 billion dollar transformed outperformed Target is 2/3 from productivity and a third from growth. And so I think it's important to split those out.
Uh, 2 billion. It's
a really big number. Um,
I think one of the issues that we kind of see with,
with productivity initiatives, sometimes in commodity companies like
If I look back at last year and the cost out, of course, we had significant margin pressure and we saw that on price. A lot of the savings that we saw came through came from cost to manufacturer and so, when you look at our cost of goods sold, it would have come out in there. But obviously in the face of the declining margin environment.
you just kind of gets lost to the cycle and we often hear, you know, you should have seen how bad things would have been if we didn't, you know, cut costs. So as we try to grade the curve, where we begin to see the tangible evidence, like there's 400 million Savings in 2025.
Um, and I think we've also been in a low oil environment and and in general for us,
James Fitterling: As we look ahead with the $2 billion, does SG&A move lower on an absolute basis? You know, what segments will we see the most tangible uplift?
As we look ahead with the $2 billion, does SG&A move lower on an absolute basis? You know, what segments will we see the most tangible uplift?
Where was that registered in across the line items? I know you had mentioned. I I and I, uh, saw some benefits but it's Candle hard to tell. And then there was comments about lower costs quarter over quarter and tnsp is that where we're seeing some of the, the 400 million and the fixed costs. And
Higher oil is a more constructive environment and I think that's going to take some demand snap back and some of these bigger volume markets to see that Karen, maybe you want to unpack a little bit about what's different about the approach on transformed outperformed than what we've done in the past.
Yeah, thanks Jim, you know?
As we look ahead with the $2 billion, does SG&A move lower on an absolute basis? You know, what segments will we see the most tangible uplift?
Jim Fitterling: It's a good question, Matt. You know, it's the $2 billion Transform to Outperform target is 2/3 from productivity and 1/3 from growth. So I think it's important to split those out. If I look back at last year and the cost out, of course, we had significant margin pressure, and we saw that on price. A lot of the savings that we saw come through came from cost to manufacture. So when you look at our cost of goods sold, it would have come out in there, but obviously in the face of a declining margin environment. I think we've also been in a low oil environment. In general, for us, higher oil is a more constructive environment. I think that's going to take some demand to snap back in some of these bigger volume markets to see that.
Jim Fitterling: It's a good question, Matt. You know, it's the $2 billion Transform to Outperform target is 2/3 from productivity and 1/3 from growth. So I think it's important to split those out. If I look back at last year and the cost out, of course, we had significant margin pressure, and we saw that on price. A lot of the savings that we saw come through came from cost to manufacture. So when you look at our cost of goods sold, it would have come out in there, but obviously in the face of a declining margin environment. I think we've also been in a low oil environment. In general, for us, higher oil is a more constructive environment. I think that's going to take some demand to snap back in some of these bigger volume markets to see that.
This is not just about productivity but it's also about growth. Um, just a couple of other things that that are going to be different about this versus even the 1 billion dollar. Uh,
It's a good question, Matt. And, you know, it's the 2 billion dollar transformed outperformed Target is 23 from productivity and a third from growth. And so, I think it's important to split those out if I look back at last year. And the cost out, of course, we had significant margin pressure and we saw that on price.
A lot of the savings that we saw came through came from cost to manufacturer and so, when you look at our cost of goods sold, it would have come out in there, but obviously in the face of declining margin environment.
um, and I think we've also been in a low oil environment and and in general for us,
Jim Fitterling: Karen, maybe you want to unpack a little bit about what's different about the approach on Transform to Outperform than what we've done in the past?
Karen, maybe you want to unpack a little bit about what's different about the approach on Transform to Outperform than what we've done in the past?
Jane Palmieri: Yeah, thanks, Jim. You know, I think it's important to just highlight what Jim mentioned is that this is not just about cost out. This is not just about productivity, but it's also about growth. Just a couple of other things that are going to be different about this versus even the $1 billion cost restructuring that we announced in 2025. First, it's really the scale and the speed at which we intend to deliver. So, you know, at least $2 billion between now and the end of 2028. This is about our entire operation. So this is going to touch every aspect of the company. We expect to see the benefits in all of the businesses. You know, we're also being proactive about ensuring that when we achieve the gains, that we sustain the gains. We have a dedicated team at Dow that's driving these efforts.
Karen Carter: Yeah, thanks, Jim. You know, I think it's important to just highlight what Jim mentioned is that this is not just about cost out. This is not just about productivity, but it's also about growth. Just a couple of other things that are going to be different about this versus even the $1 billion cost restructuring that we announced in 2025. First, it's really the scale and the speed at which we intend to deliver. So, you know, at least $2 billion between now and the end of 2028. This is about our entire operation. So this is going to touch every aspect of the company. We expect to see the benefits in all of the businesses. You know, we're also being proactive about ensuring that when we achieve the gains, that we sustain the gains. We have a dedicated team at Dow that's driving these efforts.
Higher oil is a more constructive environment and I think that's going to take some demand, uh, snap back and some of these bigger volume markets to see that Karen, maybe you want to unpack a little bit about what's different about the approach on transformed outperformed than what we've done in the past.
Yeah, thanks Jim. You know, I think it's important.
Opening governance in place to ensure that there's complete alignment and accountability across the entire organization, and that we are focusing focusing on things that are going to drive shareholder value. Um, you know, so this is really a, a reset of our cost structure. Um, it's also about streamlining, our end-to-end processes and simplifying, how we operate uh including looking at the management structure, the management layers to reduce bureaucracy and complexity.
Our next question comes from Debbie Fischer with Goldman checks.
To to just highlight what Jim mentioned is that this is not just about cost out. This is not just about productivity but it's also about growth. Um, just a couple of other things that that are going to be different about this versus even the 1 billion dollar, uh, cost restructuring, that we announced in 2025, um, first. It's really the scale and the speed at which we intend to deliver. So, you know, at least 2 billion dollars between now and
Jane Palmieri: We are fundamentally looking at how we change the way we work, but also being careful about preserving the best parts of our culture and shifting where we need to. Then we're also putting governance in place to ensure that there's complete alignment and accountability across the entire organization, and that we are focusing on things that are going to drive shareholder value. You know, so this is really a reset of our cost structure. It's also about streamlining our end-to-end processes and simplifying how we operate, including looking at the management structure, the management layers to reduce bureaucracy and complexity.
We are fundamentally looking at how we change the way we work, but also being careful about preserving the best parts of our culture and shifting where we need to. Then we're also putting governance in place to ensure that there's complete alignment and accountability across the entire organization, and that we are focusing on things that are going to drive shareholder value. You know, so this is really a reset of our cost structure. It's also about streamlining our end-to-end processes and simplifying how we operate, including looking at the management structure, the management layers to reduce bureaucracy and complexity.
Yeah, good morning guys. Maybe I can sneak into first 1, I believe, sedara is up for its debt refi, uh, mid year this year. So can you just give us some details about operationally, how sedara is looking and what does that debt refund mean for Dao? And then just the second 1 is it gave us a billion dollars on the Canada project at mid-cycle. What would that project be making in today's environment?
Good morning, Duffy. Um, yeah. On sedara, uh, we we continue to keep a close eye on sedara. It's running safely and reliably. I, I'd say we had 1, um, small incident at the Cracker, uh, this year. But
The assets are in a good position on the global cash cost curve. Um, most of it has been around the financial structure.
Reduce bureaucracy and complexity.
Operator: Your next question comes from Duffy Fischer with Goldman Sachs.
Operator: Your next question comes from Duffy Fischer with Goldman Sachs.
And down in a ramco are conducting an ongoing strategic review of sedara which is targeted to be completed during the first half of 2026.
[Analyst] (Goldman Sachs): Yeah, good morning, guys. Maybe I can sneak in too. First one, I believe Sadara is up for its debt refi mid-year this year. So can you just give us some details about operationally how Sadara is looking, and what does that debt refi mean for Dow? And then just the second one is you gave us $1 billion on the Canada project at mid-cycle. What would that project be making in today's environment?
Duffy Fischer: Yeah, good morning, guys. Maybe I can sneak in too. First one, I believe Sadara is up for its debt refi mid-year this year. So can you just give us some details about operationally how Sadara is looking, and what does that debt refi mean for Dow? And then just the second one is you gave us $1 billion on the Canada project at mid-cycle. What would that project be making in today's environment?
Your next question comes from Debbie Fischer with Goldman Sachs.
And the JV, uh, obviously operates, very safely and very reliably and we'll look at the value and evaluate the opportunity to enhance the long-term resilience of the joint venture.
I don't anticipate. Um, any cash payments to sedara lenders in 2026. Sedara has got
Yeah, good morning guys. Maybe I can sneak into first 1, I believe, sedara is up for its debt refi, uh, mid year this year. So can you just give us some details about operationally, how sedara is looking and what does that debt refund mean for Dao? And then just the second 1 is it gave us a billion dollars on the Canada project at mid cycle. What would that project be making in today's environment?
Jim Fitterling: Morning, Duffy. Yeah, on Sadara, we continue to keep a close eye on Sadara. It's running safely and reliably. I'd say we had one small incident at the cracker this year, but the assets are in a good position on the global cash cost curve. Most of it has been around the financial structure. Dow and Aramco are conducting an ongoing strategic review of Sadara, which is targeted to be completed during the first half of 2026. The JV obviously operates very safely and very reliably. We'll look at the evaluation and evaluate the opportunities to enhance the long-term resilience of the joint venture. I don't anticipate any cash payments to Sadara lenders in 2026. Sadara has got ample liquidity through their facilities, including, you know, some that they utilize in Q4.
Jim Fitterling: Morning, Duffy. Yeah, on Sadara, we continue to keep a close eye on Sadara. It's running safely and reliably. I'd say we had one small incident at the cracker this year, but the assets are in a good position on the global cash cost curve. Most of it has been around the financial structure. Dow and Aramco are conducting an ongoing strategic review of Sadara, which is targeted to be completed during the first half of 2026. The JV obviously operates very safely and very reliably. We'll look at the evaluation and evaluate the opportunities to enhance the long-term resilience of the joint venture. I don't anticipate any cash payments to Sadara lenders in 2026. Sadara has got ample liquidity through their facilities, including, you know, some that they utilize in Q4.
Ample liquidity uh through their facilities um and including you know uh some that they utilize as a fourth quarter and of course Dow and aramco have support behind that. Comparing guarantees behind that.
On, um, on the second part. I I don't have a number for you on what that would be.
Instantaneously. But I can ask the team to talk with you and see if they can't get you an estimate of what that would look like. Uh, I do have the forward look, which we put in the slides, which is, we still see the ability to generate a billion dollars of uplift, out of that project.
Good morning, Duffy. Um, yeah. On Sedara, uh, we continue to keep a close eye on Sedara. It's running safely and reliably. I, I'd say, we had one, um, small incident at the cracker, uh, this year. But the assets are in a good position on the global cash cost curve. Um, most of it has been around the financial structure.
Your next question comes from Frank Mitch with fermium research.
And down at a ramco are conducting an ongoing strategic review of sedara which is targeted to be completed during the first half of 2026.
In the JV, uh, obviously operates, very safely and very reliably and we'll look at the eval and evaluate the opportunities to enhance the long-term resilience of the joint venture.
I don't anticipate any cash payments to Sedara lenders in 2026. Sedara has got
Hey, good morning. Um yeah. Just uh just touching base again on this um uh transform to outperform, you know, obviously. Uh, it's been a very difficult uh, past couple of years and now you're unveiling this uh this big project and I understand that it's going to touch everything that you uh, you know that you do. Um, and you mentioned earlier, you know how much AI is playing a role? Uh, and this is uh, is the fact that, um, that you know, that you are are you getting confident on?
Jim Fitterling: Of course, Dow and Aramco have support behind that and varying guarantees behind that. On the second part, I don't have a number for you on what that would be instantaneously, but I can ask the team to talk with you and see if they can get you an estimate of what that would look like. I do have the forward look, which we put in the slides, which is we still see the ability to generate $1 billion of uplift out of that project.
Of course, Dow and Aramco have support behind that and varying guarantees behind that. On the second part, I don't have a number for you on what that would be instantaneously, but I can ask the team to talk with you and see if they can get you an estimate of what that would look like. I do have the forward look, which we put in the slides, which is we still see the ability to generate $1 billion of uplift out of that project.
ample liquidity uh through their facilities um and including you know uh some that they utilize as a fourth quarter. And of course that 1 around Co have support behind that, repairing guarantees behind that.
On, um, on the second part—I don't have a number for you on what that would be.
The ability of AI to help achieve these productivity savings and um, uh, in terms of uh, uh, how much you're spending on, uh, on the AI, you know, have you seen a return as of yet? I mean, how how is AI being integrated into this whole, uh, into the, uh, transformed to outperform. And obviously, when the man comes back, I would imagine that you were anticipate seeing all of this drop to the bottom line is, is that, is that the current thinking?
Yeah, good morning Frank good. It's a good question and
Uh, instantaneously. But I can ask the team to talk with you and see if they can't get you an estimate of what that would look like. Uh, I do have the forward look, which we put in the slides, which is, we still see the ability to generate $1 billion of uplift out of that project.
Operator: Your next question comes from Frank Mitsch with Fermium Research.
Operator: Your next question comes from Frank Mitsch with Fermium Research.
I just want to make sure that we're clear that it's not all AI. Um so you know there are ALS going to be some fundamental changes.
[Analyst] (Deutsche Bank): Hey, good morning. Yeah, just touching base again on this Transform to Outperform. You know, obviously, it's been a very difficult past couple of years, and now you're unveiling this big project. And I understand that it's going to touch everything that you, you know, that you do. And you mentioned earlier, you know, how much AI is playing a role in this. Is the fact that, you know, that are you getting confident on the ability of AI to help achieve these productivity savings? And in terms of how much you're spending on the AI, you know, have you seen a return as of yet? I mean, how is AI being integrated into this whole, into the Transform to Outperform? And obviously, when demand comes back, I would imagine that you anticipate seeing all of this drop to the bottom line. Is that the current thinking?
Frank Mitsch: Hey, good morning. Yeah, just touching base again on this Transform to Outperform. You know, obviously, it's been a very difficult past couple of years, and now you're unveiling this big project. And I understand that it's going to touch everything that you, you know, that you do. And you mentioned earlier, you know, how much AI is playing a role in this. Is the fact that, you know, that are you getting confident on the ability of AI to help achieve these productivity savings? And in terms of how much you're spending on the AI, you know, have you seen a return as of yet? I mean, how is AI being integrated into this whole, into the Transform to Outperform? And obviously, when demand comes back, I would imagine that you anticipate seeing all of this drop to the bottom line. Is that the current thinking?
Your next question comes from Frank Mitch with fermium research.
We're going to look at all of our integrated work processes from end to end, um, and simplify those. So for example, in previous
in previous changes, we've looked at, um,
Trimming third-party costs we've looked at obviously always look at uh procurement and what we can do to to do better in procurement and bring costs down for what we pay out to third parties.
Hey, good morning. Um yeah. Just uh just touching base again on this uh uh transform to outperform, you know, obviously. Uh, it's been a very difficult, uh, past couple of years and now you're unveiling this uh, this big project and I understand that it's going to touch everything that you, uh, you know, that you do. Um, and you mentioned earlier, you know how much AI is playing a role, uh, in
This is uh, is the fact that um that you know that you are are you getting confident on?
Um but in this case, we're looking at how things are built into our system and how we do our work end to end and how can we take steps out, how can we automate things that are done, either manually, or handoffs within the system today and AI is going to give us a lot of possibilities there.
The ability of AI to help achieve these productivity savings and um, uh, in terms of uh, uh, how much you're spending on on the AI, you know, have you seen a return as of yet? I mean, how, how is AI being integrated into this whole, uh, into the, uh, transformed outperform. And obviously, when the man comes back, I would imagine that you were anticipate seeing all of this drop to the bottom line is, is that, is that the current thinking?
Jim Fitterling: Yeah, good morning, Frank. It's a good question. I just want to make sure that we're clear that it's not all AI. So, you know, there are also going to be some fundamental changes. We're going to look at all of our integrated work processes from end to end and simplify those. So, for example, in previous changes, we've looked at trimming third-party costs. We've looked at, obviously, always look at procurement and what we can do to do better in procurement and bring costs down for what we pay out to third parties. In this case, we're looking at how things are built into our system and how we do our work end-to-end and how can we take steps out? How can we automate things that are done either manually or handoffs within the system today?
Jim Fitterling: Yeah, good morning, Frank. It's a good question. I just want to make sure that we're clear that it's not all AI. So, you know, there are also going to be some fundamental changes. We're going to look at all of our integrated work processes from end to end and simplify those. So, for example, in previous changes, we've looked at trimming third-party costs. We've looked at, obviously, always look at procurement and what we can do to do better in procurement and bring costs down for what we pay out to third parties. In this case, we're looking at how things are built into our system and how we do our work end-to-end and how can we take steps out? How can we automate things that are done either manually or handoffs within the system today?
Digital capabilities in its 1 of the things that we have.
Yeah, good morning Frank good. It's a good question and
Just want to make sure that we're clear that it's not all AI.
Um so, you know, there are also going to be some fundamental changes.
Is we have a lot of high quality data. We've got an intelligent data Hub that we've built inside the company that AI on top of that will allow us to take a look at these work processes and really take steps out and streamline the whole thing. So, we call it a re-engineering or
We're going to look at all of our integrated work processes from end to end, um, and simplify those. So, for example, in previous—
a rewiring of the way we do business globally.
And then that can be, you know, baked into the system and automated and that's 1 of the ways. We'll keep cost out as we go forward.
In previous changes, we've looked at trimming third-party costs. We've looked at—obviously, always look at procurement and what we can do to do better in procurement and bring costs down for what we pay out to third parties.
We're seeing progress um, in many functions right now. Uh many different functions are using AI um in ways that are speeding things up or reducing the cost to do things. We see it in
legal, for example, um,
Jim Fitterling: AI is going to give us a lot of possibilities there. Over the last couple of years, and in the first, you know, we had a, not 2025, but we had a billion-dollar cost-out program before that. Some of the money from that program actually went into digital capabilities and IT. One of the things that we have is we have a lot of high-quality data. We've got an intelligent data hub that we've built inside the company that AI on top of that will allow us to take a look at these work processes and really take steps out and streamline the whole thing. We call it a re-engineering or a rewiring of the way we do business globally. Then that can be, you know, baked into the system and automated.
AI is going to give us a lot of possibilities there. Over the last couple of years, and in the first, you know, we had a, not 2025, but we had a billion-dollar cost-out program before that. Some of the money from that program actually went into digital capabilities and IT. One of the things that we have is we have a lot of high-quality data. We've got an intelligent data hub that we've built inside the company that AI on top of that will allow us to take a look at these work processes and really take steps out and streamline the whole thing. We call it a re-engineering or a rewiring of the way we do business globally. Then that can be, you know, baked into the system and automated.
patent research work.
But in this case, we're looking at how things are built into our system and how we do our work end to end, and how we can take steps out—how we can automate things that are done either manually or through handoffs within the system today. AI is going to give us a lot of possibilities there.
Um, you know, doing discovery on on cases on legal um as a big cost savings there.
We're seeing it in a lot of other applications so I think it's going to I think it's going to be there and we haven't really started to get into yet.
um,
Over the last couple of years and in the first you know we had a knot in 2025 but we had a billion dollar cost out program before that and some of the money from that program actually went into digital capabilities and its. So 1 of the things that we have
Robots, and Ai, and Robotics together.
I think, at some point we will
On traditional AI, we've seen great progress. Obviously from using
Technology.
to make things safer and eliminate certain costs from turnarounds and things like,
Cost of scaffolding is a a big cost in a turnaround.
A rewiring of the way we do business globally.
Jim Fitterling: That's one of the ways we'll keep costs out as we go forward. We're seeing progress in many functions right now. Many different functions are using AI in ways that are speeding things up or reducing the cost to do things. We see it in legal, for example, patent research work. You know, I'm doing discovery on cases on legal. There's a big cost savings there. We're seeing it in a lot of other applications. So I think it's going to, I think it's going to be there. We haven't really started to get into yet robots and AI and robotics together. I think at some point we will. On traditional AI, we've seen great progress, obviously, from using technology to make things safer and eliminate certain costs from turnarounds, and things like cost of scaffolding is a big cost in a turnaround.
That's one of the ways we'll keep costs out as we go forward. We're seeing progress in many functions right now. Many different functions are using AI in ways that are speeding things up or reducing the cost to do things. We see it in legal, for example, patent research work. You know, I'm doing discovery on cases on legal. There's a big cost savings there. We're seeing it in a lot of other applications. So I think it's going to, I think it's going to be there. We haven't really started to get into yet robots and AI and robotics together. I think at some point we will. On traditional AI, we've seen great progress, obviously, from using technology to make things safer and eliminate certain costs from turnarounds, and things like cost of scaffolding is a big cost in a turnaround.
Um, by using drones and crawlers with cameras and other kinds of Technologies.
And then that can be, you know, baked into the system and automated and that's 1 of the ways. We'll keep cost out as we go forward.
We can eliminate big costs, out of having to scaffold parts of plants to go in and do those turnarounds. So their real numbers and uh, we're pretty confident that we can bring it to the all of it to the bottom line.
We're seeing progress um, in many functions right now. Uh many different functions are using AI um in ways that are speeding things up or reducing the cost to do things. We see it in
legal, for example, um,
patent research work.
On the growth side um also be some refocus on where we have our people positioned I would say the focus will be on still boots on the ground. On the sales Side Sales tech service application development. Our model is you've got to be at the design table with your customers and you got to be on the ground to do that.
So we'll look at how those are deployed. Are they in the right geographies in the geographies that are growing?
Um you know I'm doing discovery on on cases on legal um as a big cost savings there, we're seeing it in a lot of other applications. So I think it's going to I think it's going to be there and we haven't really started to get into yet.
Um,
And then how we support that from behind the scenes inside the shop.
robots and Ai and Robotics together, I think, at some point we will
Uh, see what we can do to automate to help them, and bring better data to their fingertips.
On traditional AI, we've seen great progress. Obviously from using
Technology.
Our next question comes from David big letter with glitchy Bank.
Thank you. Um,
to make things safer and, and eliminate certain costs from turnarounds and things like,
Jim Fitterling: By using drones and crawlers with cameras and other kinds of technologies, we can eliminate big costs out of having to scaffold parts of plants to go in and do those turnarounds. So there are real numbers, and we're pretty confident that we can bring it to them, all of it to the bottom line. On the growth side, there will also be some refocus on where we have our people positioned. I would say the focus will be on still boots on the ground on the sales side, sales, tech service, application development. Our model is you've got to be at the design table with your customers, and you've got to be on the ground to do that. So we'll look at how those are deployed. Are they in the right geographies, in the geographies that are growing?
By using drones and crawlers with cameras and other kinds of technologies, we can eliminate big costs out of having to scaffold parts of plants to go in and do those turnarounds. So there are real numbers, and we're pretty confident that we can bring it to them, all of it to the bottom line. On the growth side, there will also be some refocus on where we have our people positioned. I would say the focus will be on still boots on the ground on the sales side, sales, tech service, application development. Our model is you've got to be at the design table with your customers, and you've got to be on the ground to do that. So we'll look at how those are deployed. Are they in the right geographies, in the geographies that are growing?
Cost of scaffolding is a a big cost in a turnaround.
Um, by using drones and crawlers with cameras and other kinds of Technologies.
Just on capex, can you discuss how you will be able to keep cap back below? DNA, as you ramp up the spending on the path zero project and just on the in is that due to any timing from the Canadian cash and tax incentives. Thank you.
We can eliminate big costs, out of having to scaffold parts of plants to go in and do those turnarounds. So their real numbers and uh, we're pretty confident that we can bring it to them all of it to the bottom line.
Yeah, good morning, David. Um, well, obviously, we're finished up in Flight, uh, growth projects. And so, we've got a few of them rolling off.
Our outlook for capex for this year is still 2 and a half billion. Like we spent last year
Um, so there will be some most of what we've spent on path to zero. This year is receiving long lead, time items that will be delivered into the site.
On the growth side um also be some refocus on where we have our people positioned I would say the focus will be on still boots on the ground. On the sales Side Sales tech service application development. Our model is you've got to be at the design table with your customers and you got to be on the ground to do that.
Most of the engineering.
Jim Fitterling: And then how we support that from behind the scenes inside the shop, see what we can do to automate to help them and bring better data to their fingertips.
And then how we support that from behind the scenes inside the shop, see what we can do to automate to help them and bring better data to their fingertips.
So we'll look at how those are deployed. Are they in the right geographies in the geographies that are growing?
Work will get finished by the middle of the year, uh, and so detailed engineering will be done.
And then how we support that from behind the scenes inside the shop.
we'll have the roll off obviously of some of the growth projects that are already up and and operating
Uh, see what we can do to automate to help them, and bring better data to their fingertips.
Operator: Your next question comes from David Begleiter with Deutsche Bank.
Operator: Your next question comes from David Begleiter with Deutsche Bank.
Our next question comes from David.
and we have some small incremental growth projects that come along like in silicons that we need to support.
flutter with
[Analyst] (Deutsche Bank): Thank you. Jim, just on CapEx, can you discuss how you will be able to keep CapEx below D&A as you ramp up the spending on the path to zero project? And just on the, is that due to any timing from the Canadian cash and tax incentives? Thank you.
David Begleiter: Thank you. Jim, just on CapEx, can you discuss how you will be able to keep CapEx below D&A as you ramp up the spending on the path to zero project? And just on the, is that due to any timing from the Canadian cash and tax incentives? Thank you.
And so that will we'll get us through 2026. And then as we look at,
27 2829. And that's where path to zero will ramp up.
We'll keep a a pretty tight control on the rest of the capex spending and maintenance spending.
Thank you. Um, Jim just on capex. Can you discuss how you will be able to keep cap back below? DNA as you ramp up the spending on the path zero project and just on the and is that due to any timing from the Canadian cash and tax incentives. Thank you.
Jim Fitterling: Yeah, good morning, David. Well, obviously, we've finished up in-flight growth projects, and so we've got a few of them rolling off. Our outlook for CapEx for this year is still $2.5 billion like we spent last year. So there will be some; most of what we'll spend on Path2Zero this year is receiving long lead time items that will be delivered into the site. Most of the engineering work will get finished by the middle of the year. And so detailed engineering will be done. We'll have the roll-off, obviously, of some of the growth projects that are already up and operating. And we have some small incremental growth projects that come along, like in silicones that we need to support. And so that will; we'll get us through 2026.
Jim Fitterling: Yeah, good morning, David. Well, obviously, we've finished up in-flight growth projects, and so we've got a few of them rolling off. Our outlook for CapEx for this year is still $2.5 billion like we spent last year. So there will be some; most of what we'll spend on Path2Zero this year is receiving long lead time items that will be delivered into the site. Most of the engineering work will get finished by the middle of the year. And so detailed engineering will be done. We'll have the roll-off, obviously, of some of the growth projects that are already up and operating. And we have some small incremental growth projects that come along, like in silicones that we need to support. And so that will; we'll get us through 2026.
Yeah, good morning, David. Um, well obviously we've finished up in Flight, um, growth projects and so we've got a few of them rolling off.
Our outlook for capex for this year is still 2 and a half billion. Like we spent last year
And as you can see, from maintenance spending, uh, we're right in line with our traditional levels. Uh, wanted to make sure, obviously, that we keep our asset footprint on the lowcost assets, um, and keep them reliable. That's what's carried us through. So, it helped us as well deliver in the fourth quarter. And so we want to continue to do that, make sure that they're in good shape.
Um, so there will be some most of what we spent on path to zero. This year is receiving long lead, time items that will be delivered into the site.
No change on the Canadian, uh, receipt of the goods. Uh,
Mostly engineering.
Work will get finished by the middle of the year, uh, and so detailed engineering will be done.
Canada's been very positive and and continues to be very supportive. So as we as we near that time frame, obviously we'll have discussions about timing Etc on that.
we'll have the roll off obviously of some of the growth projects that are already up and and operating
This concludes our Q&A session, I will now turn the conference back over to Andrew Riker for closing remarks.
and we have some small incremental growth projects that come along like in silicons that we need to support.
Jim Fitterling: And then as we look at 2027, 2028, 2029, and that's where Path2Zero will ramp up, we'll keep a pretty tight control on the rest of the CapEx spending and maintenance spending. And as you can see from maintenance spending, we're right in line with our traditional levels. Wanting to make sure, obviously, that we keep our asset footprint on the low-cost assets and keep them reliable. That's what's carried us through. That's what helped us as well deliver in the Q4. And so we want to continue to do that, make sure that they're in good shape. No change on the Canadian receipt of the goods. Canada has been very positive and continues to be very supportive. So as we near that timeframe, obviously, we'll have discussions about timing, et cetera, on that.
And then as we look at 2027, 2028, 2029, and that's where Path2Zero will ramp up, we'll keep a pretty tight control on the rest of the CapEx spending and maintenance spending. And as you can see from maintenance spending, we're right in line with our traditional levels. Wanting to make sure, obviously, that we keep our asset footprint on the low-cost assets and keep them reliable. That's what's carried us through. That's what helped us as well deliver in the Q4. And so we want to continue to do that, make sure that they're in good shape. No change on the Canadian receipt of the goods. Canada has been very positive and continues to be very supportive. So as we near that timeframe, obviously, we'll have discussions about timing, et cetera, on that.
And so that will will get us through 2026. And then as we look at,
Thank you everyone, for joining our call today and we appreciate your interest in dal for your reference. A copy of a transcript will be posted on Dallas website within 48 hours. This concludes our call
272829. And that's where path to zero or ramp up.
concludes, today's conference call, you may now disconnect
We'll keep a pretty tight control on the rest of the capex spending and maintenance spending.
And as you can see, from maintenance spending, uh, we're right in line with our traditional levels. Uh, we wanted to make sure obviously that we keep our asset footprint on the lowcost assets, um, and keep them reliable. That's what's carried us through. So it helped us as well deliver in the fourth quarter. And so,
We want to continue to do that. Make sure that they're in good shape.
No change on the Canadian, uh, receipt of the goods. Uh,
Canada's been very positive and and continues to be very supportive. So as we as we near that time frame, obviously we'll have discussions about timing Etc on that.
Operator: This concludes our Q&A session. I will now turn the conference back over to Andrew Riker for closing remarks.
Operator: This concludes our Q&A session. I will now turn the conference back over to Andrew Riker for closing remarks.
Concludes our Q&A session. I will now turn the conference back over to Andrew Riker for closing remarks.
Jeff Tate: Thank you, everyone, for joining our call today. We appreciate your interest in Dow. For your reference, a copy of our transcript will be posted on Dow's website within 48 hours. This concludes our call.
Andrew Riker: Thank you, everyone, for joining our call today. We appreciate your interest in Dow. For your reference, a copy of our transcript will be posted on Dow's website within 48 hours. This concludes our call.
Thank you everyone, for joining our call today and we appreciate your interest in Dao for your reference. A copy of a transcript will be posted on Dallas website within 48 hours. This concludes our call
Operator: This concludes today's conference call. You may now disconnect.
Operator: This concludes today's conference call. You may now disconnect.
