Q1 2026 Dow Inc Earnings Call

April 23, 2026

Speaker #1: To listen-only mode. A brief question-and-answer session will follow the formal presentation. If you'd like to ask a question at that time, please press star, followed by the number 1 on your telephone keypad.

Speaker #1: As a reminder, this is a conference call that is being recorded. I'll now turn it over to DOW Investor Relations Vice President Andrew Riker.

Speaker #1: Mr. Riker, you may begin.

Speaker #2: Good morning. Thank you for joining today. The accompanying slides are provided through this webcast and posted on our website. I'm Andrew Riker, DOW's Investor Relations Vice President, leading today's call are Jim Fitterling, Chair and Chief Executive Officer; Karen S.

Speaker #2: Carter, Chief Operating Officer; and Jeff Tate, Chief Financial Officer. Please note our comments contain forward-looking statements and are subject to the related cautionary statement contained in the earnings news release and slides.

Speaker #2: Please refer to our public filings for further information about principal risk and uncertainties. Unless otherwise specified, all financials, where applicable, exclude significant items. We will also refer to non-GAAP measures, a reconciliation of the most directly comparable GAAP financial measure and other associated disclosures or contained in the earnings news release that is posted on our website.

Speaker #2: On slide 2 is our agenda for today's call. Jim and Karen will start with a summary of our first quarter performance, including details on each of our three operating segments.

Speaker #2: Karen will then provide an update on current industry dynamics, including how global supply disruptions are influencing market conditions. She will also discuss DOW's competitive advantages, particularly our purpose-built asset footprint and advantaged feedstock positions.

Speaker #2: We will then outline several actions underway to deliver a step-change improvement in earnings across the cycle, including progress on transformed outperform and our other self-help initiatives.

Speaker #2: Jeff will close with our outlook for the second quarter and an overview of our capital allocation priorities and focus areas for disciplined financial management.

Speaker #2: Both in 2026 and across the cycle. Following the prepared remarks, we'll open the call for Q&A. Now let me turn the call over to Jim.

Speaker #3: Thank you, Andrew. I'd like to first take a moment to step back and recognize our colleagues, neighbors, customers, and partners in the Middle East.

Speaker #3: We are facing significant turmoil and uncertainty. Our thoughts are with everyone affected by this conflict, and we wish for their safety and well-being during these difficult times.

Speaker #3: On slide 3, I'll now cover additional details from the first quarter. The solid results we delivered reflect our commitment to controlling what we can control.

Speaker #3: While January and February order books were solid, we experienced a sharp positive inflection in March with the beginning of the conflict in the Middle East.

Speaker #3: We expect this supply disruption will persist throughout 2026. During this quarter, we focused on DOW's strengths of prioritizing our customers, managing costs aggressively, and operating with safety, reliability, and long-term value creation.

Speaker #3: We delivered 3% sequential volume growth, net sales of $9.8 billion, and operating EBITDA of $873 million. And with our self-help actions well underway, we delivered approximately $193 million in period cost savings.

Speaker #3: As we look ahead to the second quarter and beyond, we are taking actions to enhance DOW's agility and resilience. We're also entering a seasonally high demand period, providing additional tailwinds as we move through the next couple of quarters.

Speaker #3: In addition, an increasingly positive margin backdrop continues to unfold, and we expect the pricing momentum that began in March to continue across every business and every region in DOW's portfolio.

Speaker #3: On the supply side, the conflict in the Middle East has created constraints that are clearly evident in the near term. This includes supply chain disruption for an extended period of time.

Speaker #3: We also anticipate impact to future investments. Including potential delays or cancellations of planned industry capacity additions, as well as increased pressure for capacity rationalization.

Speaker #3: And lastly, we expect that the higher global oil and NAFTA prices will steepen the global cost curve. Against this backdrop, our in-flight actions serve to further strengthen DOW's competitiveness and position us to drive margin improvement and capture earnings upside.

Jim Fitterling: The margin backdrop continues to unfold, and we expect the pricing momentum that began in March to continue across every business and every region in Dow's portfolio. On the supply side, the conflict in the Middle East has created constraints that are clearly evident in the near term. This includes supply chain disruption for an extended period of time. We also anticipate impact to future investments, including potential delays or cancellations of planned industry capacity additions, as well as increased pressure for capacity rationalization. Lastly, we expect that the higher global oil and naphtha prices will steepen the global cost curve. Against this backdrop, our in-flight actions serve to further strengthen Dow's competitiveness and position us to drive margin improvement and capture earnings upside. First, our incremental growth investments are delivering returns, like our new world scale polyethylene train in Freeport, Texas.

And in March to continue across every business and every region in Dallas portfolio.

Speaker #3: First, our incremental growth investments are delivering returns. Like our new world-scale polyethylene train in Freeport, Texas. And we're making progress on our Alberta project where the overarching merits of this investment in the cost advantaged Americas are further reinforced by the current global dynamics.

On the supply side.

Put in the Middle East has created constraints that are clearly evident in the near term.

Jim Fitterling: This includes supply chain disruption for an extended period of time. We also anticipate impact to future investments, including potential delays or cancellations of planned industry capacity additions, as well as increased pressure for capacity rationalization. Lastly, we expect that the higher global oil and naphtha prices will steepen the global cost curve. Against this backdrop, our in-flight actions serve to further strengthen Dow's competitiveness and position us to drive margin improvement and capture earnings upside. First, our incremental growth investments are delivering returns, like our new world scale polyethylene train in Freeport, Texas.

This includes supply chain disruption for an extended period of time.

We also anticipate impact to future investments, including potential delays or cancellations of planned industry capacity additions as well as the increased pressure for capacity rationalization.

Speaker #3: In addition, the benefits from our previously announced European asset shutdowns begin this year. And lastly, we are building a DOW that is more agile and resilient through any cycle.

And lastly, we expect that our higher global oil prices will steepen, the global cost curve.

Speaker #3: A company that delivers through periods of volatility. And one that focuses on capturing upside and improving margins and outperforming our peers to effectively reset the competitive benchmark.

Against this backdrop, our in flight actions serve to further strengthen <unk> competitiveness and position us to drive margin improvement and capture earnings upside.

Speaker #3: We'll share more details on all of this later in the call. And Karen is going to cover our first quarter operating segment performance. But before that, I'd like to briefly address our recent leadership announcement.

First our incremental growth investments are delivering returns like our new world scale polyethylene train in Freeport, Texas.

Jim Fitterling: We're making progress on our Alberta project, where the overarching merits of this investment in the cost-advantaged Americas are further reinforced by the current global dynamics. In addition, the benefits from our previously announced European asset shutdowns begin this year. Lastly, we are building a Dow that is more agile and resilient through any cycle. A company that delivers through periods of volatility, and one that focuses on capturing upside, improving margin, and outperforming our peers to effectively reset the competitive benchmark. We'll share more details on all of this later in the call, and Karen is going to cover our Q1 operating segment performance. Before that, I'd like to briefly address our recent leadership announcement. Effective 1 July, Karen will assume the role of Chief Executive Officer, and I will move to the role of Executive Chair.

And we're making progress on our project, whereas the overarching merit this investment and the cost advantaged Americas are further reinforced by current global dynamics.

Speaker #3: Effective July 1, Karen will assume the role of Chief Executive Officer and I will move to the role of Executive Chair. This announcement follows a deliberate, multi-year succession process in partnership with our board, and ensures continuity as we execute our strategy.

The benefits from our previously announced European FX shutdowns began this year.

And lastly, we are building a more agile and resilient through any cycle.

Speaker #3: Serving as CEO of DOW has been the privilege of a lifetime, and I'm incredibly proud of what our team has accomplished together. This transition comes at the right time as we transform our company for its next phase of growth.

A company that delivers superior to the volatility and one that focuses on capturing upside improving margins and outperforming our peers effectively reset the competitive benchmark.

Speaker #3: I have full confidence in Karen's leadership, her deep operational experience, and her ability to drive performance and value creation. As CEO, she will continue our efforts to transform DOW, positioning us for greater agility and resiliency through any phase of the cycle.

Share more details on all of this later in the call.

Karen is going to cover our first quarter operating segment performance.

But before that I'd like to briefly address our recent leadership announcements.

Effective July 1st Karen will assume the role of Chief Executive Officer.

Speaker #3: She is exactly the right leader to guide our company and deliver on our strategic priorities with the discipline, and rigor.

And I will move to the role of executive Chair.

Jim Fitterling: This announcement follows a deliberate multi-year succession process in partnership with our board and ensures continuity as we execute our strategy. Serving as CEO of Dow has been the privilege of a lifetime, and I'm incredibly proud of what our team has accomplished together. This transition comes at the right time as we transform our company for its next phase of growth. I have full confidence in Karen's leadership, her deep operational experience, and her ability to drive performance and value creation. As CEO, she will continue our efforts to transform Dow, positioning us for greater agility and resiliency through any phase of the cycle. She is exactly the right leader to guide our company and deliver on our strategic priorities with the discipline and rigor.

This announcement follows a deliberate multiyear succession process in partnership with our board.

Speaker #2: Thank you, Jim. And good morning to everyone joining today. I'm honored to step into the role of CEO of DOW. Having spent my entire career with the company, I have a deep appreciation for our people, our innovation capabilities, and the critical role we play in enabling our customers' growth.

And then ensures continuity as we execute our strategy.

Serving as CEO of data has been a privilege of a lifetime and I'm incredibly proud of what our team has accomplished together.

This transition comes at the right time as we transform our company for its next phase of growth.

Speaker #2: As we look ahead, our priorities remain consistent. We will continue to drive operational excellence, maintain disciplined capital allocation, and advance high-value growth in our core markets.

I have full confidence in <unk>.

Aaron's leadership.

Deep operational experience and her ability to drive performance and value creation.

As CEO. She will continue our efforts to transform down positioning us for greater agility and resiliency through any phase of the cycle.

Speaker #2: DOW is well positioned with our advantaged global portfolio, a strong balance sheet, and a talented global team. My focus will be on driving execution, delivering value for our customers, and ensuring consistent, long-term value for our shareholders.

She is exactly the right leader.

Guide, our company and to deliver on our strategic priorities with discipline and rigor.

Karen Carter: Thank you, Jim, and good morning to everyone joining today. I'm honored to step into the role of CEO of Dow. Having spent my entire career with the company, I have a deep appreciation for our people, our innovation capabilities, and the critical role we play in enabling our customers' growth. As we look ahead, our priorities remain consistent. We will continue to drive operational excellence, maintain disciplined capital allocation, and advance high value growth in our core markets. Dow is well positioned with our advantaged global portfolio, a strong balance sheet, and a talented global team. My focus will be on driving execution, delivering value for our customers, and ensuring consistent long-term value for our shareholders. I'm excited about the opportunities ahead and confident in our ability to continue to deliver for all stakeholders. Turning now to our Q1 results by segment.

Speaker #2: I'm excited about the opportunities ahead and confident in our ability to continue to deliver for all stakeholders. Turning now to our first quarter results by segment.

Thank you Jim and good morning, everyone.

Okay.

I'm honored to step into the role as CEO about having.

Having spent my entire career with the company I have a deep appreciation for our people our innovation capability.

Speaker #2: As Jim mentioned, Team DOW remains focused on disciplined execution in every business throughout the first quarter. As the situation in the Middle East unfolded in March, we continue to manage costs and cash tightly while also prioritizing our customers.

Raleigh play in enabling our customers grow.

As we look ahead.

Priorities remain consistent.

We will continue to drive operational excellence, maintaining disciplined capital allocation and advanced high growth in our core markets.

Speaker #2: We delivered solid results in January and February, and then dynamics in the Middle East quickly impacted industry supply-demand conditions. In fact, our operations outside the region experienced the largest percent sales gain from February to March that we've seen in our company's history.

Dow is well positioned.

Global portfolio.

And a talented global team.

My focus will be on driving execution and delivering value for customers and ensuring consistent long term value for our shareholders.

Speaker #2: Our teams remain focused on balancing near-term dynamics with discipline, while also progressing our long-term objectives, and this agility continues to be a key differentiator for DOW.

I'm excited about the opportunities ahead.

I'm confident in our ability to continue to deliver for all stakeholders.

Turning now to first quarter.

Okay.

Karen Carter: As Jim mentioned, Team Dow remains focused on disciplined execution in every business throughout Q1. As the situation in the Middle East unfolded in March, we continued to manage costs and cash tightly while also prioritizing our customers. We delivered solid results in January and February, and then dynamics in the Middle East quickly impacted industry supply-demand conditions. In fact, our operations outside the region experienced the largest percent sales gain from February to March that we've seen in our company's history. Our teams remain focused on balancing near-term dynamics with discipline while also progressing our long-term objectives, and this agility continues to be a key differentiator for Dow. In Packaging and Specialty Plastics on slide four, Q1 net sales were $4.9 billion, reflecting price declines versus the same period last year.

Yes.

Speaker #2: In packaging and specialty plastics on slide 4. First quarter net sales were $4.9 billion, reflecting price declines versus the same period last year. Polyethylene volumes increased in all regions, both versus the prior year and last quarter, supported by continued global growth and flexible food and specialty packaging applications.

Team Dow remains focused on disciplined execution and every business.

The first quarter.

And the situation in the Middle East unfolded in March.

To manage cost and cash.

While also prioritizing customer.

We delivered solid results in January and February and then dynamics of middle each quickly impacted inch supply demand condition.

Speaker #2: Polyethylene volume gains were offset by lower merchant olefins sales following a turnaround in the US Gulf Coast and lower licensing at the forefront of our priorities, this turnaround is now complete.

Our operations outside the region experienced the largest percent sales gain from February to March that we've seen in company history.

Our teams remain focused on balancing near term dynamic discipline, while also progressing our long term objectives.

Speaker #2: The unit is fully operational, and our team is shifting their focus to completing our second cracker turnaround for the year, which is planned for the second quarter.

Agility continues to be achieved differentiator for now.

And packaging and specialty plastics on slide four.

Speaker #2: Operating EBIT was $208 million, driven by lower integrated margins and higher planned maintenance activity. This was partly offset by higher polyethylene volumes, as well as tailwinds from the company's cost reduction efforts.

First quarter net sales were $4 $9 billion, reflecting price decline versus the same period last year.

Karen Carter: Polyethylene volumes increased in all regions, both versus the prior year and last quarter, supported by continued global growth in flexible food and specialty packaging applications. Polyethylene volume gains were offset by lower merchant olefins sales following a turnaround in the US Gulf Coast and lower licensing revenue. With safety and reliability at the forefront of our priorities, this turnaround is now complete. The unit is fully operational, and our team is shifting their focus to completing our second cracker turnaround for the year, which is planned for Q2. Operating EBIT was $208 million, driven by lower integrated margins and higher planned maintenance activity. This was partly offset by higher polyethylene volume, as well as tailwinds from the company's cost reduction efforts.

Polyethylene volume increased in all regions, both part of the prior year and last quarter supported by continued global growth.

Speaker #2: Looking ahead, our significant Americas footprint, including our new Poly7 asset, will enable our teams to capture improved margins. Next, turning to our industrial intermediates and infrastructure segment on slide 5.

Food and specialty packaging applications.

Polyethylene volume gains were offset by lower merchant olefin sales following a turnaround in the U S Gulf coast and lower licensing revenue.

With safety and reliability at the forefront of our priorities with turnaround is now complete.

Speaker #2: Net sales were $2.6 billion, down 8% year over year. This was largely due to lower prices in both businesses, as well as lower volumes in polyurethanes, as a result of impacts from the Middle East conflict.

It's fully operational.

Shifting their focus to completing our second cracker turnaround for the year, which is planned for the second quarter.

Speaker #2: Our proactive cost savings actions in both businesses provided tailwinds that offset some of the declines. Volume declined in the quarter as well, primarily due to our actions to reset our competitiveness by shutting down our higher-cost upstream propylene oxide asset late last year.

Operating EBIT was $208 million.

Driven by lower integrated margins and higher plant maintenance activity there.

This was partly offset by higher polyethylene volume.

Well, it's still win from the company's cost reduction efforts.

Karen Carter: Looking ahead, our significant Americas footprint, including our new Poly-7 asset, will enable our teams to capture improved margins. Next, turning to our Industrial Intermediates & Infrastructure segment on Slide 5. Net sales were $2.6 billion, down 8% year over year. This was largely due to lower prices in both businesses, as well as lower volumes in polyurethanes as a result of impacts from the Middle East conflict. Our proactive cost savings actions in both businesses provided tailwinds that offset some of the decline. Volume declined in the quarter as well, primarily due to our actions to reset our competitiveness by shutting down our higher cost upstream propylene oxide asset late last year. As a reminder, this action rationalized approximately 20% of North American PO industry capacity.

Looking ahead, our signet.

Americas.

Including our new colleagues seven asset will enable our teams to capture improved remarks.

Speaker #2: As a reminder, this action rationalized approximately 20% of North American PO industry capacity. And while we are experiencing a prolonged weak demand landscape across building and construction, our new alkoxylation assets are driving growth in industrial solutions, which serves attractive end markets such as home care, pharma, and energy.

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

Net sales for $2 billion down 8% year over year. This was partially due to lower prices and both benefit.

Lower volume in parts of Europe.

As a result of impacts from the middle East conflict.

Speaker #2: Moving to the performance materials and coating segment on slide 6. Net sales were $2.1 billion, which is flat compared to the same period last year, with higher volumes in both businesses.

Our proactive.

Atkins and both of them.

By the tailwind that offset some of the pie.

Volume declines in the port as well.

Due to our actions to reset our competitiveness.

Speaker #2: Volume increased 2% year over year, largely in downstream silicones, particularly in electronic and home and personal care and markets. Notably, downstream silicones continue to be a growth engine for the business, delivering high single-digit volume improvement versus last quarter.

By shutting down our higher cost upstream polling.

Late last year.

As a reminder, this and rationalize approximately 20% of North American industry capacity.

And while we are experiencing a prolonged demand landscape across building and construction.

Karen Carter: While we are experiencing a prolonged weak demand landscape across building and construction, our new alkoxylation assets are driving growth in industrial solutions, which serve attractive end markets such as home care, pharma, and energy. Moving to the Performance Materials & Coatings segment on Slide 6. Net sales were $2.1 billion, which is flat compared to the same period last year, with higher volumes in both businesses. Volume increased 2% year-over-year, largely in downstream silicones, particularly in electronic and home and personal care end markets. Notably, downstream silicones continue to be a growth engine for the business, delivering high single-digit volume improvement versus last quarter. The business remains focused on advancing our multi-year asset and market strategy, which will help us grow with key customers.

Speaker #2: The business remains focused on advancing our multi-year asset and market strategy, which will help us grow with key customers. The strategy includes shifting our mix towards higher-value products in markets like electronics and mobility, while right-sizing higher-cost upstream capacity.

Our new <unk>.

Rising growth in industrial solutions.

Serve attractive end markets, such as home care pharma and energy.

Moving to the performance material coatings segment on slide six.

Net sales were $2 $1 billion, which is flat compared to the same period last year with higher volume in both businesses.

Speaker #2: In this work is further advanced by our previously announced European asset actions, including the shutdown of our basics phylloxanes plant in Barry, UK, by the middle of this year.

<unk> increased 2% year over year, largely downstream silicones, particularly in electronics and home and personal care end market.

Speaker #2: This capacity represents approximately 25% of European phylloxane industry capacity. Next, on slide 7, I'll take a step back to frame further details on the current macroeconomic environment.

Notably downstream telecom continued to be a growth engine for the business.

Delivering high single digit volume improvement versus last quarter.

The business remains focused on advancing our multiyear.

Speaker #2: The headline is this: Demand across many markets is steady. At the same time, supply is short, and arbitrage is increasing. On the demand side, for our core polyethylene packaging markets, conditions remain resilient.

That strategy, which will help us grow with your customers.

Karen Carter: The strategy includes shifting our mix towards higher value products in markets like electronics and mobility, while right sizing higher cost upstream capacity. This work is further advanced by our previously announced European asset actions, including the shutdown of our basic siloxanes plant in Barry, UK, by the middle of this year. This capacity represents approximately 25% of European siloxane industry capacity. Next, on Slide 7, I'll take a step back to frame further details on the current macroeconomic environment. The headline is this. Demand across many markets is steady. At the same time, supply is short and arbitrage is increasing. On the demand side, for our core polyethylene packaging markets, conditions remain resilient, but we are seeing mixed signals in other key markets that Dow serves. For example, in the US, inflationary pressures and higher interest rates are still weighing on existing home sales.

The strategy includes shifting our mix towards high value products, and multiply for electronics and mobility, while emphasizing higher costs upstream capacity.

Speaker #2: But we are seeing mix signals in other key markets that DOW serves. For example, in the US, inflationary pressures and higher interest rates are still weighing on existing home sales.

And that work is further out.

<unk> previously announced European asset Atkins.

Including the shutdown of our business.

Plant Barry Okay by the middle of this year.

Speaker #2: This continues to be reflected in our industrial intermediates and infrastructure, and performance materials and coating segments, both of which serve the building and construction market.

This capacity represents approximately 25% of European philosophies industry capacity.

Next on slide seven.

Speaker #2: Consumer spending has shown some modest improvement, but the landscape and behaviors are likely to remain cautious until we see a significant inflection in macroeconomic conditions.

Take a step back to find further details on the current macroeconomic environment.

The headlines.

Demand across many markets.

At the same time supply assurance and arbitrage is increasing.

Speaker #2: Moving to supply dynamics. We anticipate that shutdowns, feedstock limitations, and logistical constraints will continue to reshape polyethylene product availability across regions. These conditions are creating ripple effects well beyond the Middle East, including significant impacts to logistics costs and transit times.

On the demand side for our core probably guessing packaging market conditions remained resilient.

But your mix.

Mix at all in other key markets and the desktop.

For example, in the U S inflationary pressures and higher interest rates are still waiting on existing home sales.

Speaker #2: Supply and feedstocks into Asia and Europe are constrained, which is triggering price increases globally. It is also leading to increased production in the Americas and is providing DOW the opportunity to capture new business in Europe.

Karen Carter: This continues to be reflected in our Industrial Intermediates & Infrastructure and Performance Materials & Coatings segments, both of which serve the building and construction market. Consumer spending has shown some modest improvement, but the landscape and behaviors are likely to remain cautious until we see a significant inflection in macroeconomic conditions. Moving to supply dynamics. We anticipate that shutdowns, feedstock limitations, and logistical constraints will continue to reshape polyethylene product availability across regions. These conditions are creating ripple effects well beyond the Middle East, including significant impacts to logistics costs and transit time. Supply and feedstock into Asia and Europe are constrained, which is triggering price increases globally. It is also leading to increased production in the Americas and is providing Dow the opportunity to capture new business in Europe.

<unk> continues to be reflected in our industrial intermediates <unk> infrastructure performance materials and coatings segment.

Both of which serve the building and construction market.

Consumer spending has shown modest improvement, but the landscape and behaviors are likely to remain cautious.

Speaker #2: The duration and severity of these constraints increases the likelihood of lasting industry impacts. Including the potential for accelerated capacity rationalization as well as delays or cancellation of planned capacity additions.

Until we see a significant proportion and macroeconomic conditions.

Move to five.

We anticipate that checking account feedstock limitations and logistical constraints.

We will continue to reshape polyethylene product availability across regions.

Speaker #2: In this context, expectations for higher US supply are helping to ease some of the pressure and provide stability. North American LNG markets remain well-supplied and regionally insulated from these disruptions.

These conditions are creating ripple effects, well beyond the middle east, including significant impacts to logistics costs and transit time.

Speaker #2: In addition, US Gulf Coast NGOs, including Ethane, continue to be largely unimpacted. All of these factors underscore the benefits of DOW's cost-advantaged footprint in the Americas.

Supply and feedstock into Asia, and Europe are constrained, which is triggering price increases globally.

It is also leading to increased production in the Americas.

And is providing the opportunity to capture new business in Europe.

Speaker #2: Next on slide 8, we'll unpack some of the current regional and industry impacts in more detail. In the two months since the conflict began, the scale of disruption we have seen is unprecedented.

The duration and severity of these constraints increases our likelihood of lapping industry impact.

Karen Carter: The duration and severity of these constraints increases the likelihood of lasting industry impacts, including the potential for accelerated capacity rationalization, as well as delays or cancellation of planned capacity additions. In this context, expectations for higher US supply are helping to ease some of the pressure and provide stability. North American LNG markets remain well supplied and regionally insulated from these disruptions. In addition, US Gulf Coast NGLs, including ethane, continue to be largely unimpacted. All of these factors underscore the benefits of Dow's cost advantage footprint in the Americas. Next, on Slide 8, we'll unpack some of the current regional and industry impacts in more detail. In the two months since the conflict began, the scale of disruption we have seen is unprecedented. Roughly 20% of global oil capacity is currently offline, and approximately half of global ethylene and polyethylene supply is either offline, constrained, or directly impacted.

We think the potential for accelerated capacity rationalization as well as delays or cancellation of planned capacity additions.

Speaker #2: Roughly 20% of global oil capacity is currently offline, and approximately half of global ethylene and polyethylene supply is either offline constrained or directly impacted.

In that context.

Patients for hired less supply are helping to eat some of the pressure and provide stability.

North American LNG markets remained well supplied and regionally Italy.

Speaker #2: These are unparalleled numbers, reflecting a combination of physical infrastructure damage, feedstock limitations, and severe logistics disruptions. Transit through the region remains significantly impaired, largely driven by the ongoing disruption in the Strait of Hormuz.

Disruption.

Is it.

U S Gulf Coast, NGL, including ethane and you seem to be largely uninterrupted.

These factors underscore the benefit of doubt cost advantaged footprint in the Americas.

Speaker #2: And the disruption has been amplified across Asia and Europe, tightening feedstock availability, and pushing producers to reduce production or increase prices to cover the rapidly escalating costs occurring from the conflict.

Next on slide eight well I'm actually kind of correct regional and industry impact in more detail.

And the two months that the conflict again.

Scale disruption, we have seen unprecedented roughly.

Speaker #2: Looking across regions, a large portion of Middle East capacity remains offline, with increasing risk of lasting infrastructure damage. In Asia Pacific, feedstock constraints are limiting operating rates and reducing export availability, challenging producers who are operating at uncompetitive levels.

Roughly 20% of global oil capacity is currently offline and approximately half of global ethylene and polyethylene supply is.

Awesome awesome constrained directly impact.

Karen Carter: These are unparalleled numbers reflecting a combination of physical infrastructure damage, feedstock limitations, and severe logistics disruptions. Transit through the region remains significantly impaired, largely driven by the ongoing disruptions in the Strait of Hormuz. The disruption has been amplified across Asia and Europe, tightening feedstock availability and pushing producers to reduce production or increase prices to cover the rapidly escalating costs occurring from the conflict. Looking across regions, a large portion of Middle East capacity remains offline, with increasing risk of lasting infrastructure damage. In Asia Pacific, feedstock constraints are limiting operating rates and reducing export availability, challenging producers who are operating at uncompetitive levels. In Europe, high costs will require continued price increases to justify additional production. In contrast, the Americas continues to operate at high rates, highlighting the importance of Dow's cost and feedstock advantages in the region.

These are unparalleled numbers, reflecting a compensation a physical infrastructure damage feedstock limitations and severe logistics disruption.

Speaker #2: And in Europe, high costs will require continued price increases to justify additional production. In contrast, the Americas continue to operate at high rates highlighting the importance of DOW's cost and feedstock advantages in the region.

Is it through the region remains significantly impair largely driven by the ongoing disruption in the strike.

And it is rather than have an amplified across Asia and Europe.

Lightning feedstock availability and producers to reduce production or increased pricing to cover the rapidly escalating costs occurring from conflict.

Speaker #2: Currently, it is estimated that roughly three-quarters of announced global capacity additions would be either directly impacted by the conflict or dependent on supply chains that remain highly constrained.

Okay Cross region, a large part in the middle of the Leach capacity remained offline with MPC risks of laughing infrastructure damage.

Speaker #2: The longer these conditions persist, the greater the potential for further industry changes. And lastly, it is not likely that the pricing impact of these events will be temporary.

In Asia Pacific feedstock constraints are limiting operating rates and reducing export they liability challenging producers who are operating at uncompetitive level.

Speaker #2: We expect rising global production costs and a steepening global cost curve to continue influencing pricing and spreads. Next, I'll turn to slide 9, where we will discuss how DOW's specific advantages drive near-term value.

In Europe high cost will require continued price increases to justify additional production.

In contrast, the Americas continued to operate at high rates highlight any important.

Speaker #2: At the beginning of the Middle East conflict, petrochemical prices, especially polyethylene, were at multi-year unsustainable lows. Despite broader near-term market volatility, we anticipate packaging demand will remain resilient, providing meaningful pricing potential as evidenced by recent March settlements.

And feedstock advantages in a region.

Currently it is estimated at least three quarters of announced capacity additions would be directly impacted by conflicts or dependent on supply chain that remain highly constrained.

Karen Carter: Currently, it is estimated that roughly three quarters of announced global capacity additions would be either directly impacted by the conflict or dependent on supply chains that remain highly constrained. The longer these conditions persist, the greater the potential for further industry changes. Lastly, it is not likely that the pricing impact of these events will be temporary. We expect rising global production costs and a steepening global cost curve to continue influencing pricing and spreads. Next, I'll turn to slide nine, where we will discuss how Dow's specific advantages drive near-term value. At the beginning of the Middle East conflict, petrochemical prices, especially polyethylene, were at multiyear unsustainable lows. Despite broader near-term market volatility, we anticipate packaging demand will remain resilient, providing meaningful pricing potential as evidenced by recent March settlements. That brings me to our advantaged global asset footprint.

The longer these conditions persist the greater the potential for further industry changes.

Speaker #2: That brings me to our advantaged global asset footprint. DOW operates a large portion of our light cracking capacity in the cost-advantaged Americas with assets in the US, Canada, and Argentina, all of which continue to operate at high rates.

Lastly.

It is not likely that the pricing impact of these events will be temporary.

We expect rising global production.

Steepening global copper continue influencing pricing.

Speaker #2: Our consistent focus on investing in the Americas gives us reliability, feedstock security, and cost stability at a time when global supply chains are strained.

Next I'll turn to slide nine.

How 'bout specific advantages of near term value.

At the beginning of the middle East conflict petrochemical prices, especially polyethylene.

Speaker #2: In Europe, our feedstock flexibility remains a critical differentiator. With NAFTA supplies impaired and PRONAFT spreads increasing, DOW's ability to optimize across feedstocks provides a clear cost and availability advantage versus peers.

Multiyear unsustainable levels.

Broader near term Mark voluntarily, we anticipate packaging debate will remain resilient, providing meaningful pricing potential.

I read March settlement.

Speaker #2: This allows us to protect and expand margins through running our assets competitively even in a volatile energy and feedstock environment. And specific to our packaging and specialty plastics segment, DOW has higher North American capacity than our closest peer, further supported by the 2025 startup of our Poly 7 polyethylene train in Freeport, Texas.

That brings me to our advantaged global asset.

Now operates a large proportion of our light cracking capacity and the cost advantages of America.

Karen Carter: Dow operates a large portion of our light cracking capacity in the cost-advantaged Americas with assets in the US, Canada, and Argentina, all of which continue to operate at high rates. Our consistent focus on investing in the Americas gives us reliability, feedstock security, and cost advantage at a time when global supply chains are strained. In Europe, our feedstock flexibility remains a critical differentiator. With naphtha supplies impaired and prop-nap spreads increasing, Dow's ability to optimize across feedstocks provides a clear cost and availability advantage versus peers. This allows us to protect and expand margins through running our assets competitively, even in a volatile energy and feedstock environment. Specific to our Packaging and Specialty Plastics segment, Dow has higher North American capacity than our closest peer, further supported by the 2025 startup of our Poly-7 polyethylene train in Freeport, Texas.

With assets in the U S, Canada, and Argentina, all of which continue to operate at high rates are.

Our consistent focus on investing in America.

Reliability feedstock security and cost stability at a time when the global supply chain our strength.

Speaker #2: Additionally, approximately 80% of our PNSP product sales go into higher-value, resilient applications including packaging, consumer, and health and hygiene. These in markets have historically demonstrated lower risk of demand destruction.

And in Europe, our feedstock flexibility.

Critical differentiator.

With not satisfied impaired.

Spreads and be safe.

Optimize feedstocks provides a clear cost and availability advantage versus peers.

Speaker #2: The built over time give us confidence in DOW's ability to manage through volatility, while capturing value at any point in the cycle. In addition to these portfolio advantages, slide 10 outlines the key areas where we remain committed to self-help actions that will strengthen DOW's earnings power.

This allows us to protect and defend margin through running our assets competitively.

Our total energy and feedstock environment.

And specific to our packaging and specialty classics.

That has higher north American capacity than our closest peer.

Speaker #2: First, we are on track to deliver the remaining cost savings from our previously announced $1 billion program by the end of this year. We are also executing a series of strategic moves that will uniquely position DOW to win.

Supported by the 20th by the startup of our colleagues set of polyethylene train in Freeport, Texas.

Additionally, approximately 80% of the PSP product sale going into higher value resilient application, including packaging consumer and health and hygiene.

Karen Carter: Additionally, approximately 80% of our P&SP product sales go into higher value resilient applications, including packaging, consumer, and health and hygiene. These end markets have historically demonstrated lower risk of demand destruction. The structural advantages we have deliberately built over time give us confidence in Dow's ability to manage through volatility while capturing value at any point in the cycle. In addition to these portfolio advantages, slide 10 outlines the key areas where we remain committed to self-help actions that will strengthen Dow's earnings power. First, we are on track to deliver the remaining cost savings from our previously announced $1 billion program by the end of this year. We are also executing a series of strategic moves that will uniquely position Dow to win.

Speaker #2: This includes earnings upside following the completion of our remaining incremental growth investments and cost-advantaged region, as well as benefits this year from the beginning of our European asset shutdown.

These end markets have historically demonstrated lower risk of demand destruction.

Our structural advantages we have deliberately built over time give us confidence and our ability to manage volatility while capturing value at any point in the cycle.

Speaker #2: Additionally, transform to outperform is expected to deliver at least $2 billion in near-term EBITDA improvement. As a reminder, we expect approximately two-thirds of that to come from productivity gains, and the remaining one-third from growth.

In addition to these portfolio and energy side.

Slide 10 outlines the key area, where we remain committed to self help actions that will strengthen earnings power.

Speaker #2: Next, I'll share a few examples of early opportunities that we have identified and are taking action on. First, we have begun transformation assessments at approximately 25% of our large sites with a goal to deliver sustained improvements and returns from all of them over the next two years.

First we are on track to deliver the main cost savings from our previously announced $1 billion program by the end of this year.

We're also achieving a series of strategic moves.

That will uniquely position Dow to win.

Karen Carter: This includes earnings upside following the completion of our remaining incremental growth investments in cost-advantaged regions, as well as benefits this year from the beginning of our European asset shutdowns. Additionally, Transform to Outperform is expected to deliver at least $2 billion in near-term EBITDA improvement. As a reminder, we expect approximately two-thirds of that to come from productivity gains and the remaining one-third from growth. Next, I'll share a few examples of early opportunities that we have identified and are taking action on. First, we have begun transformation assessments at approximately 25% of our large sites with a goal to deliver sustained improvements and returns from all of them over the next two years.

This concludes earnings.

Following the completion of our remaining incremental growth.

Speaker #2: We are evaluating and driving improvements in production yields, asset utilization, maintenance productivity, energy efficiency, and third-party spending, and we expect this work will result in more than $400 million of the $1.3 billion in productivity improvements that we committed transformation identified approximately $80 million in run-rate EBITDA improvements well exceeding our initial projections.

And cost advantage region as well as benefits from here from the beginning of our European shutdown.

Additionally, transport outperform is expected to deliver.

$2 billion in near term EBITDA improvement.

As a reminder, we expect approximately two thirds of that to come from productivity gains and the remaining one third from growth.

Next I'll share a few examples of early opportunities we have identified and are taking action on.

Speaker #2: We're also seeing early growth gains from expanded use of digital commercial capabilities and more disciplined opportunity management. Pilot efforts in these areas have meaningfully improved the quality size and value capture from new opportunities.

First we have begun a transformation of seven at approximately 25% of our large site with a goal to deliver sustained improvements in returns from all of them over the next two years.

Speaker #2: Learnings are quickly being scaled to support and accelerate targeted growth across the portfolio. And since completing comprehensive evaluations, our dedicated end-to-end process owners have shifted from assessment to execution.

We are evaluating and driving improvement in production you added utilization maintenance productivity.

Karen Carter: We are evaluating and driving improvements in production yields, asset utilization, maintenance productivity, energy efficiency, and third-party spending, and we expect this work will result in more than $400 million of the $1.3 billion in productivity improvements that we committed to. The first site transformation identified approximately $80 million in run rate EBITDA improvements, well exceeding our initial projections. We're also seeing early growth gains from expanded use of digital commercial capabilities and more disciplined opportunity management. Pilot efforts in these areas have meaningfully improved the quality, size, and value capture from new opportunities. Learnings are quickly being scaled to support and accelerate targeted growth across the portfolio. Since completing comprehensive evaluations, our dedicated end-to-end process owners have shifted from assessment to execution.

You can see in third party spending and.

And we expect this work will result in more than $400 million of.

Speaker #2: For example, in our plan to fulfill work process, we defined a clear end state from demand planning to manufacturing operations all the way through to customer delivery.

One $3 billion and productivity improvements we admit issue.

The first type of information identified approximately $80 million and run rate EBITDA improvement well exceeding our internal projections.

Speaker #2: We are now redesigning work and leveraging technology to simplify workflows. This enables increased efficiency for DOW and service reliability to our customers. Additionally, in the first quarter, we announced a series of senior leadership changes that delivered an approximately 20% reduction in both headcount and cost at that level.

We're also seeing early broking unexpected use of digital commercial capabilities and more disciplined opportunity advantage that I live and efforts in these areas have meaningfully improved quality style and.

And value capture from new opportunity learns.

<unk> are quickly being scaled to support and accelerate targeted growth across the portfolio.

Speaker #2: We remain confident that our collective efforts and transform to outperform will ramp sharply to $400 million in the second half of the year, creating a DOW that is more resilient across the cycle, while consistently delivering growth, customer success, and improved shareholder value.

And then completing comprehensive evaluation.

Decade, and see an office or have shifted from assessment.

Thank you Shannon.

Karen Carter: For example, in our plan to fulfill work process, we defined a clear end state from demand planning to manufacturing operations all the way through to customer delivery. We are now redesigning work and leveraging technology to simplify workflows. This enables increased efficiency for Dow and service reliability to our customers. Additionally, in Q1, we announced a series of senior leadership changes that delivered an approximately 20% reduction in both headcount and cost at that level. We remain confident that our collective efforts in Transform to Outperform will ramp sharply to $400 million in H2 of the year, creating a Dow that is more resilient across the cycle while consistently delivering growth, customer success, and improved shareholder value. As an important reminder, all of our self-help actions and the upside they provide are additive to the potential upside we anticipate going into Q2.

For example, in our plan to fulfill our process, we've defined a clear instinct from demand planning to manufacturing operations, all the way through to customer delivery we.

Speaker #2: And as an important reminder, all of our self-help actions and the upside they provide are additive to the potential upside we anticipate going into the second quarter.

We are now redesign work and leveraging technology to simplify workflow.

You have enabled increased efficiency for Dallas and service reliability to our customers.

Speaker #2: Next, I'll turn the call over to Jeff, who will cover our second-quarter modeling guidance and DOW's key financial strengths.

Additionally.

Last quarter, we announced a series of senior leadership changes that delivered an approximately 20% reduction in both head count and costs at that level.

Speaker #1: Thank you, Karen. As we look ahead, I'd like to provide some context around our earnings expectations for the second quarter and for the remainder of the year.

We remain confident that our collective efforts and for them to outperform well got to try.

Speaker #1: As we've noted throughout today's prepared remarks, the situation in the Middle East has introduced volatility, and uncertainty into the broader market environment. Including how customers secure products.

So $400 million in the second half of the year, creating a doubt that is more resilient across the cycle, while consistently delivering growth customer success improves shareholder value.

Speaker #1: We remain committed to taking actions to position DOW for success amidst this ongoing turmoil. Karen shared the ways in which we are quickly pivoting to several of the areas that are directly within our control.

And as an important reminder, all of our self help actions and the upside they provide.

Attitude to the potential upside, we anticipate going into the second quarter.

Speaker #1: This includes leveraging our advantaged manufacturing footprint and activating pricing levers across all businesses and all geographies. Including our largest operating segment, packaging and specialty plastics.

Next I'll turn the call over to Jeff, who will cover our second quarter modeling guidance and Dan <unk> Chief financial strength.

Karen Carter: Next, I'll turn the call over to Jeff, who will cover our Q2 modeling guidance and Dow's key financial strengths.

Thank you Karen.

Jeff Tate: Thank you, Karen. As we look ahead, I'd like to provide some context around our earnings expectations for Q2 and for the remainder of the year. As we've noted throughout today's prepared remarks, the situation in the Middle East has introduced volatility and uncertainty into the broader market environment, including how customers secure product. We remain committed to taking actions to position Dow for success amidst this ongoing turmoil. Karen shared the ways in which we are quickly pivoting to several of the areas that are directly within our control. This includes leveraging our advantaged manufacturing footprint and activating pricing levers across all businesses and all geographies, including our largest operating segment, Packaging and Specialty Plastics. These levers give Dow significant near-term advantages. Our expectation for Q2 are approximately $12 billion of revenue and EBITDA of $2 billion.

Speaker #1: These levers give DOW significant near-term advantages. Our expectation for second quarter are approximately $12 billion of revenue, and EBITDA of $2 billion. This sequential improvement is driven by pricing gains, expanding margins, increased asset utilization, typical seasonal demand improvement, and our continued focus on reducing cost.

Looking ahead I want to provide some context around our expectations for the second quarter and for the remainder of the year.

We've noted prepay.

Prepared remarks, the situation in the middle East introduced volatility.

And uncertainty and to the broader market environment, including how customers secure product.

We remain committed to taking actions to position <unk> for success amidst this ongoing turmoil.

Speaker #1: All of which are expected to more than offset rising feedstock and energy costs plant maintenance activity and expected sequential decreases in licensing revenue. And packaging and specialty plastics are global pricing strategies especially for polyethylene are designed to capture value in key markets.

Sure at the wisdom, which were quickly pivoting to several of the areas.

Within our control.

This includes leveraging our advanced manufacturing footprint and activating pricing levers.

Businesses and all geographies.

Speaker #1: Helping to mitigate external pressures. We expect this to drive significant sequential improvement versus the first quarter. For industrial intermediates and infrastructure, we expect normal seasonality and improved margins to provide sequential gains.

Our largest operating segment packaging <unk> specialty plastics.

Thinking about significant near term advantages.

Our expectation for second quarter by approximately $12 billion of revenue.

EBITDA of $2 billion.

Speaker #1: With that, higher plant maintenance and lower licensing activity in the second quarter are expected to mute these tailwinds. And in the performance materials and coating segment, we anticipate a modest impact from the Middle East conflict.

This sequential improvement is driven by price again.

Jeff Tate: This sequential improvement is driven by pricing gains, expanding margins, increased asset utilization, typical seasonal demand improvement, and our continued focus on reducing costs. All of which are expected to more than offset rising feedstock and energy costs, plant maintenance activity, and expected sequential decreases in licensing revenue. In Packaging and Specialty Plastics, our global pricing strategies, especially for polyethylene, are designed to capture value in key markets, helping to mitigate external pressures. We expect this to drive significant sequential improvement versus Q1. For Industrial Intermediates & Infrastructure, we expect normal seasonality and improved margins to provide sequential gains. With that, higher plant maintenance and lower licensing activity in Q2 are expected to mute these tailwinds. In the Performance Materials & Coatings segment, we anticipate a modest impact from the Middle East conflict.

Expanding margins.

Asset utilization typical seasonal demand improvements and our continued focus on reducing costs.

All of which are expected to more than offset rising feedstock and energy costs.

Speaker #1: However, rising propylene costs are likely to delay seasonal demand uplifts that we would normally see across building and construction in markets. On equity earnings, several factors will impact DOW's sequential earnings expectations.

Activity and expected sequential decreases in licensing revenue.

In packaging and specialty plastics, our global pricing strategy, especially for polyethylene are designed to capture value in key markets, helping to mitigate external pressures.

Speaker #1: First, we anticipate a headwind from the safe, proactive shutdown of our facilities in Kuwait as a result of the Middle East conflict. Lower feedstock availability at our Thailand joint ventures will also be a headwind.

This to drive significant sequential improvement versus the first quarter.

For industrial intermediates and infrastructure, we expect normal seasonality to improve margins to provide sequential gain.

Speaker #1: Additionally, beginning this quarter, we suspended SEDARA equity loss recognition in accordance with US GAAP. The carrying value of all liabilities on the balance sheet reached a total of DOW's existing relevant obligations and commitments.

With that plant maintenance and lower licensing activity in the second quarter are expected to do so.

And then the performance materials and coating segment, we anticipate a modest impact from the middle East conflict.

Speaker #1: This is also reflected in our updated full-year equity earnings expectations, which can be found in the appendix of today's presentation. In summary, predicting global macroeconomic and end-market dynamics in this period will continue to be difficult.

However, rising land costs are likely to be delayed seasonal demand uplift that we would normally see a building and construction end markets.

Jeff Tate: However, rising propylene costs are likely to delay seasonal demand uplifts that we would normally see across building and construction end markets. On equity earnings, several factors will impact Dow's sequential earnings expectations. First, we anticipate a headwind from the safe, proactive shutdown of our facilities in Kuwait as a result of the Middle East conflict. Lower feedstock availability at our Thailand joint ventures will also be a headwind. Additionally, beginning this quarter, we suspended Sadara equity loss recognition in accordance with US GAAP. The carrying value of all liabilities on the balance sheet reached a total of Dow's existing relevant obligations and commitments. This is also reflected in our updated full-year equity earnings expectations, which can be found in the appendix of today's presentation.

Our equity earnings several factors will impact our sequential earnings expectations.

Speaker #1: But we expect more potential upside to these projections than downside. All of this represents our best assessment during a period of rapid change. We will provide updates later in the quarter if there are any significant developments compared to our current expectations.

First we anticipate a headwind from the same.

One of our facilities.

As a result of the middle East conflict.

Lower feedstock availability at our Thailand joint ventures.

Okay.

Additionally, beginning this quarter, we suspended the Dara equity loss recognition in accordance with U S. GAAP.

Speaker #1: Next, on slide 12, I'll spend a few minutes on our consistent approach to disciplined financial management, which remains another core differentiator for DOW. Especially in environments like we've faced over the past few years.

Carrying value of liabilities on the balance sheet reached a total of that was existing relevant obligations and commitments.

This is also reflected in our updated for your equity earnings expectations, which can be found in the appendix of today's presentation.

Speaker #1: First and foremost, our capital allocation framework remains consistent. Everything starts with safe and reliable operations. In addition, we continue to maintain a solid balance sheet as well as our long-standing commitment to an investment-grade credit profile.

In summary, predicting global macroeconomic and end market dynamics in this period, we will continue to be difficult.

Jeff Tate: In summary, predicting global macroeconomic and end market dynamics in this period will continue to be difficult, but we expect more potential upside to these projections than downside. All of this represents our best assessment during a period of rapid change. We will provide updates later in the quarter if there are any significant developments compared to our current expectations. Next, on slide 12, I'll spend a few minutes on our consistent approach to disciplined financial management, which remains another core differentiator for Dow, especially in environments like we've faced over the past few years. First and foremost, our capital allocation framework remains consistent. Everything starts with safe and reliable operations. In addition, we continue to maintain a solid balance sheet, as well as our longstanding commitment to an investment-grade credit profile.

But we expect more potential upside to these projections I'm sorry.

Speaker #1: On capital deployment, we remain focused on high-quality organic investments. With capital expenditures expected to be at or below depreciation in amortization across the cycle.

All of this our best assessment during a period of rapid change.

We will provide updates later in the quarter. If there are any significant developments compared to our current expectations.

Speaker #1: This includes prioritizing advantaged assets, regions, high-return projects, and investments that strengthen our cost position and earnings durability. With our near-term growth investments behind us, half to zero remains our only planned major project.

On slide 12, I'll spend a few minutes on our consistent approach to densify our network.

Which remains.

<unk>.

Especially in environments like.

Over the past few years.

First and foremost our capital allocation framework remains consistent.

Speaker #1: Returning cash to shareholders through dividends and share repurchases also remains a clear priority across the cycle. Looking ahead to the balance of the year, our cash priorities are clear.

Everything starts with safe and reliable operations.

In addition, we continue to maintain a solid balance sheet as well as our longstanding commitment to an investment grade credit profile.

Speaker #1: In March, we received a cash payment from the Noble Litigation and we expect to receive the remaining tax withholdings of approximately $300 million later this year.

On capital deployment, we remain focused on high quality organic investments.

Jeff Tate: On capital deployment, we remain focused on high-quality organic investments, with capital expenditures expected to be at or below depreciation and amortization across the cycle. This includes prioritizing advantaged assets, regions, high return projects, and investments that strengthen our cost position and earnings durability. With our near-term growth investments behind us, Path2Zero remains our only planned major project. Returning cash to shareholders through dividends and share repurchases also remains a clear priority across the cycle. Looking ahead to the balance of the year, our cash priorities are clear. In March, we received a cash payment from the NOVA litigation, and we expect to receive the remaining tax withholdings of approximately $300 million later this year. At the same time, we remain focused on delivering the full benefits of our self-help actions, which we expect to total approximately $1.1 billion this year.

Capital expenditures are expected to be at or below depreciation and amortization across the cycle.

Speaker #1: At the same time, we remain focused on delivering the full benefits of our self-help actions. Which we expect to total approximately $1.1 billion this year.

This includes prioritizing advantaged asset regions high return projects and investments that strengthen our cost position and earning durability.

Speaker #1: This includes the remaining $600 million from our 2025 program, as well as $500 million in growth and productivity improvements from TRANSFORM to OUTPERFORM. As we mobilize the teams, and complete several assessments in the immediate term, we expect to demonstrate a significant portion of the end-year value in the second half of this year.

With our near term growth investments behind us passenger remained our only by that major project.

Turning cash to shareholders through dividends and share repurchases.

Our clear priority across the cycle.

Looking ahead to the balance of the year.

Speaker #1: We will also continue to take a disciplined approach to working capital. Making prudent trade-offs to support customers and operations while protecting our cash position as earnings improve.

<unk>.

In March.

We received a cash payment from the <unk> litigation and we expect to receive the remaining tax withholding of approximately $300 million.

This year.

Speaker #1: This was evident in the first quarter as we saw a year-over-year improvement in working capital of greater than $300 million. Importantly, all of this is underpinned by our strong liquidity position and well-laddered debt profile.

At the same time, we remain focused on delivering.

Okay.

Which we expect to spend approximately 1.1 dollars this year.

This concludes remaining Thanksgiving.

Jeff Tate: This includes the remaining $600 million from our 2025 program, as well as $500 million in growth and productivity improvements from Transform to Outperform. As we mobilize the teams and complete several assessments in the immediate term, we expect to demonstrate a significant portion of the end-year value in the H2 of this year. We will also continue to take a disciplined approach to working capital, making prudent trade-offs to support customers and operations while protecting our cash position as earnings improve. This was evident in Q1 as we saw a year-over-year improvement in working capital of greater than $300 million. Importantly, all of this is underpinned by our strong liquidity position and well-laddered debt profile, with no substantive maturities until 2029. We have approximately $14 billion of total liquidity, inclusive of cash on hand and committed bilateral credit lines.

25, okay.

Speaker #1: With no substantive maturities until 2029. We have approximately $14 billion of total liquidity. Inclusive of cash on hand and committed bilateral credit lines. Our revolving credit facility was recently renewed through 2030.

Well, it's a 500 million.

Good luck.

Contrast.

Yeah.

As mobilize the team completed several assessment in the immediate term, we expect to demonstrate a significant proportion of the engineered.

Okay.

Speaker #1: And our committed accounts receivable securitization includes the recent renewal of our European facility through 2029. We also ended first quarter with over $4 billion of cash on hand.

We will also take a disciplined approach to working capital.

Hum.

And the operation protecting our cash position.

Okay.

This was evident in the first quarter.

Speaker #1: This liquidity positions us well to manage through macro or industry volatility without compromising our near-term priorities or DOW's long-term strategy. Our intentional actions give us confidence that DOW can continue to navigate the current environment, invest in the right opportunities, and deliver sustained value to shareholders across the cycle.

Year over year.

And working capital of greater than 300 million.

Yes.

And importantly, all of this is underpinned by our strong liquidity position and we'll manage that profile.

With no maturities.

Right.

Yes, approximately $14 billion.

Speaker #1: Next, I'll turn the call back to Jim to provide closing remarks on slide 13.

Inclusive of cash on hand.

And committed credit lines.

Speaker #2: Thank you, Jeff. As I look at slide 13, it really captures how we position DOW. Not just for this quarter or this year, but for long-term value creation through the cycle.

Our revolving credit facility was recently.

Jeff Tate: Our revolving credit facility was recently renewed through 2030, and our committed accounts receivable securitization includes the recent renewal of our European facility through 2029. We also ended Q1 with over $4 billion of cash on hand. This liquidity positions us well to manage through macro or industry volatility without compromising our near-term priorities or Dow's long-term strategy. Our intentional actions give us confidence that Dow can continue to navigate the current environment, invest in the right opportunities, and deliver sustained value to shareholders across the cycle. Next, I'll turn the call back to Jim to provide closing remarks on slide 13.

30.

And our committee.

<unk> recently.

A recent renewal of our European facility through 2029.

Speaker #2: First, even in a disrupted industry environment, we are well-positioned to navigate market dynamics, which was apparent in our first quarter results. Our order books were solid in January and February, and we saw a sharp positive inflection in March.

We also ended the quarter with over 4 million.

Cash on hand.

This liquidity.

Well to manage through macro.

Utilities without compromising our near term priorities or strategy.

Strategy.

Speaker #2: And we expect that to continue throughout 2026. As a result, the positive momentum from announced pricing actions across every business and every region is taking hold and building.

And as you can give us.

The Dow can continue to navigate the current environment invest in the right opportunities.

Sustained value to shareholders.

Cycle.

Next I will turn the call back to Jim to provide.

Speaker #2: At the same time, our mix continues to shift toward higher value sales including functional polymers where DOW's differentiation clearly shows up in our pound per polyolefins benchmarking.

Closing remarks on slide 13.

Jim Fitterling: Thank you, Jeff. As I look at slide 13, it really captures how we position Dow, not just for this quarter or this year, but for long-term value creation through the cycle. First, even in a disrupted industry environment, we are well-positioned to navigate market dynamics, which was apparent in our Q1 results. Our order books were solid in January and February, and we saw a sharp positive inflection in March, and we expect that to continue throughout 2026. As a result, the positive momentum from announced pricing actions across every business and every region is taking hold and building. At the same time, our mix continues to shift toward higher value sales, including functional polymers, where Dow's differentiation clearly shows up in our P4P polyolefins benchmarking. We published this peer benchmarking today on our investor relations website.

Thank you Scott.

Slide 13, it really captures how this nation.

Just this quarter or this year, but for long term value creation through the cycle.

Speaker #2: We published this peer benchmarking today on our investor relations website. This annual process provides important insights into our performance and that of the broader industry.

First even into the industry.

Industry environment, we are well positioned to navigate market dynamics, which was apparent in our first quarter results.

Speaker #2: And it is what ultimately led to DOW's actions to effectively reset the competitive benchmark through TRANSFORM to OUTPERFORM, which is underway. This year's results demonstrate that DOW is delivering consistent outperformance in many areas.

Our order books were solid January and February and we saw sharp.

<unk> in March and we expect that to continue throughout 2026.

As a result.

Momentum from announced pricing actions across every business and every region is taking hold and building.

Speaker #2: This includes superior performance in our advantaged polyolefins portfolio, as well as outperforming the peer median on EBITDA growth for downstream silicons across all markets.

At the same time.

Mix continues to shift towards higher value sales, including functional polymers for dow's differentiation clearly shows up in our portfolio.

Speaker #2: That's not accidental. It's the result of disciplined execution and a focus on value. Our teams understand DOW's strengths and have aligned our R&D and innovation to the areas of our portfolio where DOW wins and our customers value it the most.

Olefins bench market.

We published the Springer benchmarking today on our Investor Relations website.

Jim Fitterling: This annual process provides important insights into our performance and that of the broader industry, and it is what ultimately led to Dow's actions to effectively reset the competitive benchmark through Transform to Outperform, which is underway. This year's results demonstrate that Dow is delivering consistent outperformance in many areas. This includes superior performance in our advantage polyolefins portfolio, as well as outperforming the peer median on EBITDA growth for downstream silicones across all markets. That's not accidental. It's the result of disciplined execution and a focus on value. Our teams understand Dow's strengths and have aligned our R&D and innovation to the areas of our portfolio where Dow wins and our customers value it the most. Second, we focused relentlessly on building long-term agility and resilience. We are acting thoughtfully but decisively to improve the quality of our portfolio and improve our long-term earnings.

Animal process provides important insights into our performance and that of the broader industry.

Speaker #2: Second, we've focused relentlessly on building long-term agility and resilience. We are acting, thoughtfully but decisively, to improve the quality of our portfolio and improve our long-term earnings.

And it is what ultimately led to Dallas to effectively reset our competitive benchmark to transform to outperform which is underway.

This year's results demonstrate the dose to delivering consistent outperformance in many areas.

Speaker #2: And we are not backing off. TRANSFORM to OUTPERFORM is already driving new value that is additive to near-term market upside. We are leveraging our strengths to enable faster, more efficient operations, improve innovation, and modernize how we serve our customers in high-value markets.

This concludes superior performance.

Polyolefin portfolio.

As well as outperforming the peer median on EBITDA growth for downstream silicones across all markets.

That is not accidental.

<unk> disciplined execution and the focus on value.

Speaker #2: At the same time, we're seeing tangible benefits from decisive portfolio actions, including the completion of our incremental investments in high-growth areas of our portfolio as well as the shutdown of higher-cost upstream assets in Europe, that will begin later this year.

Our teams understand Dallas strengths and have aligned our R&D, an invitation to the areas of our portfolio.

And our customers value the most.

Okay Super relentlessly on building long term agility and resilience.

Speaker #2: And with a revised timeline, our Alberta project will enable growth and resilient high-value applications like fresher pipe, wire and cable, and food packaging. We remain confident that DOW can capture outsized growth in these markets for years to come, which will create additional value for shareholders.

We're acting decisively.

Decisively.

Improve the quality of our portfolio and improve our long term earnings.

Jim Fitterling: We are not backing off. Transform to Outperform is already driving new value that is additive to near-term market upside. We are leveraging our strengths to enable faster, more efficient operations, improve innovation, and modernize how we serve our customers in high-value markets. At the same time, we're seeing tangible benefits from decisive portfolio actions, including the completion of our incremental investments in high-growth areas of our portfolio, as well as the shutdown of higher cost upstream assets in Europe that will begin later this year. With a revised timeline, our Alberta project will enable growth in resilient, high-value applications like pressure pipe, wire and cable, and food packaging. We remain confident that Dow can capture outsized growth in these markets for years to come, which will create additional value for shareholders.

Backing off.

For them to outperform is already driving new users.

Near term market upsides.

We are leveraging our strengths to enable faster more efficient operations improve innovation and modernize how we serve our customers in high value markets.

Speaker #2: And lastly, foundational to everything we do is the financial discipline and flexibility that we have built. That discipline matters. It's what allows us to be steady when others are reactive and to keep investing when it counts.

At the same time, we're seeing tangible benefits from decisive portfolio actions, including the completion of our incremental investments in high growth areas of our portfolio as well as the shutdown of higher cost upstream assets in Europe that will begin later this year.

Speaker #2: So when we say DOW remains a compelling investment opportunity, we say it with confidence grounded in actions. We entered 2026 in a strong position, and we remain on solid footing.

And with the revised timeline.

The project will enable growth in resilient high value applications like pressure pipe wiring cable and food packaging.

Speaker #2: Our long-term vision, our strategic priorities, and the steps we've taken to navigate a challenging down cycle inflected in a way that positions our company for stronger, more resilient growth for years to come.

We remain confident the Dow can capture outsized growth in these markets for years to come which will create additional value for shareholders.

Speaker #2: I'm incredibly proud of how Team DOW has navigated all the challenges that we've encountered over the years. They've adapted quickly to changing market signals, while staying focused on cash generation and improving margins.

Jim Fitterling: Lastly, foundational to everything we do is the financial discipline and flexibility that we have built. That discipline matters. It's what allows us to be steady when others are reactive and to keep investing when it counts. When we say Dow remains a compelling investment opportunity, we say it with confidence, grounded in actions. We entered 2026 in a strong position, and we remain on solid footing. Our long-term vision, our strategic priorities, and the steps we've taken to navigate a challenging down cycle inflected in a way that positions our company for stronger, more resilient growth for years to come. I'm incredibly proud of how Team Dow has navigated all the challenges that we've encountered over the years. They've adapted quickly to changing market signals while staying focused on cash generation and improving margins. Thank you for your continued interest and support of Dow.

And Leslie foundational to everything we do.

Financial discipline and flexibility.

Got it.

That discipline matters implement allows us to be study when others are reactive and to keep investing.

Speaker #2: Thank you for your continued interest and support of DOW, now I'll turn the call back to Andrew to get us started with the Q&A.

So when we say Dow remains a compelling investment opportunity, we say it with companies.

Actions we.

Speaker #3: 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.

We entered 2026 and our strong position and we remain on solid footing.

Our long term vision, our strategic priorities and steps, we've taken to navigate a challenging down cycle infected in a way that positions our company for a stronger more resilient growth for years to come.

Speaker #3: Operator, please provide the Q&A instructions.

Speaker #4: Thank you. Ladies and gentlemen, we will now begin our question-and-answer session. If you have dialed in and you'd like to ask a question, please press star, followed by the number one on your telephone keypad.

I'm incredibly proud of team.

Speaker #4: If you'd 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 the line of Hassan Ahmed from Allenbeck Global.

Needed all the challenges that we've encountered over the years.

David DAP too quickly to changing market signals.

Okay.

On cash generation and improving market.

Thank you for your continued interest and support.

Speaker #4: Your line is live.

Speaker #3: Morning, Jim and Karen. First of all, congratulations to both of you on your new roles. You know, a question around just the timelines associated with the normalization of supply chains, you know, in a, you know, let's hypothesize sort of post-peace declaration sort of an environment, and also the sustainability of some of these pricing initiatives, particularly for polyethylene that you guys have announced.

Now I'll turn the call back to Andrew to get started with Q&A.

Jim Fitterling: Now, I'll turn the call back to Andrew to get us started with the Q&A.

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

Thank you Jim Allison laundry question I would like to remind you that our forward looking statements.

Remarks, and the following Q&A operator, please provide Q&A instructions.

Okay.

Operator: Thank you. Ladies and gentlemen, we will now begin our question and answer session. If you have dialed in and you'd like to ask a question, please press star followed by the number one on your telephone keypad. If you'd 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 the line of Hassan Ahmed from Alembic Global Advisors. Your line is live.

Thank you, ladies and gentlemen, we will now begin our question and answer session.

Have dialed in and you'd like to ask a question. Please press star followed by the number one on your telephone keypad.

Speaker #3: I mean, you know, just to me, it seems that, you know, in a no-damage-to-facilities environment, you know, it would take at least probably three quarters, maybe, for supply chains to normalize.

Your question. Please press star one again, we yes.

Okay.

Gotcha.

Your first question comes from the line of Hassan Ahmed.

Speaker #3: And then, you know, there's obviously the questions around how much damage to facilities has actually been done, what impact that that may have on the availability of supply.

Olympics global.

Thank you Kevin.

Hassan Ahmed: Morning, Jim and Karen. First of all, congratulations to both of you on your new roles. A question around just the timelines associated with the normalization of supply chains, in a let's hypothesize sort of post-peace declaration sort of an environment, and also the sustainability of some of these pricing initiatives, particularly for Polyethylene that you guys have announced. Just to me, it seems that in a no damage to facilities environment, it would take at least probably 3 quarters maybe, for supply chains to normalize. Then, there's obviously the questions around how much damage to facilities has actually been done, what impact that may have on the availability of supply. Obviously then there's numerous questions around availability of feedstocks as well, and what rationalization sort of may happen. Would it be accelerated in a sort of higher oil, higher Naphtha sort of pricing environment?

Congratulations to both you on your new roles.

Speaker #3: And obviously, then there's, you know, numerous questions around availability of feedstocks as well. And, you know, what rationalization sort of may happen, you know, would it be accelerated in a sort of higher oil, higher NAFTA sort of pricing environment?

A quick question around just the timelines associated with the normalization of supply chains.

Yeah lets hypothesize sort of.

Lease exploration.

And the sustainability.

The ability of.

Speaker #3: So would love to sort of hear your views about, you know, the sustainability of pricing, timelines associated with this normalization, particularly, you know, as I sit there and see consensus estimates for you guys, some of your competitors and the like, they seem to be just, you know, factoring in a V-shaped sort of normalization of these supply chains.

Some of these initiatives.

I mean the places.

Just to me it seems that.

No I meant to say.

It is an environment.

Can you just probably three quarters.

For supply chains.

Daniel.

Questions around how much.

Speaker #3: So would love to hear your thoughts around that.

Philippines is actually done what impact that may have on <unk>.

Speaker #5: Morning, Hassan. I'll take a shot and then I'll ask Karen to talk about the pricing. When I was at Sarah Week, really at the very beginning of the conflict, early March, I mentioned that we did some modeling at that time, that it would be 275 days or longer for the supply chain disruption to unwind.

The ability of the supply.

Dan.

Northwest around availability of feedstocks as well.

Alright.

Uh huh.

Okay.

So hi, Bill.

Hi, Eric.

And vitamin <unk>.

Hassan Ahmed: Would love to sort of hear your views about the sustainability of pricing timelines associated with this normalization. Particularly, as I sit there and see consensus estimates for you guys, some of your competitors, and the like, they seem to be just factoring in a V-shaped sort of normalization of these supply chains. Would love to hear your thoughts around that.

Yeah.

Speaker #5: And a lot's changed since then. There's been more attacks in the Middle East. There's been more assets that have to be shut down. This week, the last cargoes of crude to go to refiners landed at refiners.

It's been all the sustainability of pricing.

Associated with this normalization.

But the key to.

Yeah.

Consensus estimates.

Some of your competitors.

This seems to be just youre factoring in.

Speaker #5: So the way I look at that is the first ripple effects of the shutdown of the straits hits the shores this month. Two months later.

This shifts sort of normalization.

So would love to hear your thoughts on that.

Speaker #5: And we don't have any sign in place that the straits are going to reopen. In fact, any ships that have attempted have been turned back.

Good morning.

Jim Fitterling: Morning, Hassan. I'll take a shot and then I'll ask Karen to talk about the pricing. When I was at CERAWeek, really at the very beginning of the conflict early March, I mentioned that we did some modeling at that time, that it would be 275 days or longer, for the supply chain disruption to unwind. A lot's changed since then. There's been more attacks in the Middle East. There's been more assets have to be shut down. This week, the last cargoes of crude to go to refiners landed at refiners. The way I look at that is the first ripple effects of the shutdown of the Straits hits the shores this month, two months later. We don't have any sign in place that the Straits are going to reopen. In fact, any ships that have attempted have been turned back.

Okay.

Aaron you talked about the pricing.

When I was at Cera week really at the beginning of the call.

Speaker #5: The straits moved over 130, probably close to 150 cargoes a day. And very different cargoes, very large crude carriers, LNG cargoes, marine-packed cargo for moving plastics, bulk chemical shipments, refined fuel shipments, all of that stopped and all of that tankage is full and sitting in the Arabian Gulf.

Currently.

I mentioned, we did some modeling at that time.

275 days or longer.

Okay.

The pace of change.

And a lot's changed since then there's been more attacks in the middle East there's anymore.

Yeah.

This week the last cargos.

Speaker #5: And so we have to clear that. And I just gave you a pretty good estimate of what it takes to clear it and get it out to markets, and then you've got to get vessels back in and get them offloaded.

Dakota refinery.

Fine.

Look that is the first ripple effects of the shutdown.

Surely this month two months later.

Speaker #5: You're going to have to get a lot of empty vessels back in the Gulf before you can restart plants because the plants are at tank tops.

I don't have any sign that the states are going to reopen in fact ships cubic attempted and.

Speaker #5: So when we looked at it, we said, shipments that go out of the straits are going to be prioritized. I don't think it's very likely that petrochemical and plastic shipments will be prioritized first.

<unk> been scaling back.

Jim Fitterling: The Straits moved over 130, probably close to 150 cargoes a day, and very different cargoes, very large crude carriers, LNG cargoes, marine packed cargo for moving plastics, bulk chemical shipments, refined fuel shipments. All that stopped, and all that tankage is full and sitting in the Arabian Gulf. We have to clear that, and I just gave you a pretty good estimate of what it takes to clear it and get it out to markets, and then you've got to get vessels back in and get them offloaded. You're going to have to get a lot of empty vessels back in the Gulf before you can restart plants because the plants are at tank tops. When we looked at it, we said shipments that go out of the Straits are going to be prioritized.

<unk> moved over 130, probably close to 150.

Today.

And very different cargos.

Speaker #5: I think it's more likely that crude oil, fuel, fertilizers would be prioritized first because those affect national security, those affect food security for a lot of countries.

Carriers LNG cargoes marine packs.

Plastics <unk>.

Chemical shipments refined fuels.

Oh, that's tough.

Paul and sitting in the Arabian Gulf.

Speaker #5: You've got repairs that have to be made in some cases. The repairs may be made because of the duration of this, before the straits reopen.

And so we have to clear that.

You gave a pretty good estimate of what it takes to get it out to market.

Speaker #5: So I think if there's anything good here, you know, you've got some time to get repairs made before the straits reopen. But you have to have human capital and you have to be able to get the equipment in that you need to repair some things.

This is back in and get them off loaded.

You're going to have to get a lot of empty vessels back before.

Before you can restart.

Lance.

Alright, Thanks, Tom.

So when we look at it.

Speaker #5: The logistics of the 275 days I mentioned was the logistics unwind from talking to our logistics providers. And I just turn it to Karen.

We said.

Shipments.

To say, we're going to be prioritized.

Jim Fitterling: I don't think it's very likely that petrochemical and plastic shipments will be prioritized first. I think it's more likely that crude oil, fuel, fertilizers would be prioritized first because those affect national security, those affect food security for a lot of countries. You've got repairs that have to be made. In some cases, the repairs may be made because of the duration of this before the Straits reopen. I think if there's anything good here, you've got some time to get repairs made before the Straits reopen. You have to have human capital, and you have to be able to get the equipment in that you need to repair some things. The logistics of the 275 days I mentioned was the logistics unwind from talking to our logistics providers. I just turn it to Karen.

It is very likely that petrochemical plastic shipments will be prioritized first I think it's more likely that crude.

Speaker #5: We were going into this in March, at the end of February, low inventories, pricing momentum, good order books, we had 3% volume growth, sequentially in first quarter.

Oil field.

It should be prioritized first because.

National Security.

As a security for a lot of countries.

Speaker #5: And now we're seeing a tick up. So I think everything is poised for strong demand and really tight supply. And I think that bodes well for price and outlook.

You bet.

It would have to be made in some cases that may be made because of the duration of this before.

We opened so I think if theres anything here.

Some time to get repairs made before the Straits.

Speaker #6: Yeah, exactly, Jim. And on the pricing side, Hassan, thanks for the question. I mean, I think we should go back to January and remember that you got 5 cents in January and then in March, you know, in relation to the Middle East crisis, there was another 10 cent settlement.

You have capital and you have to be able to get the equipment.

Repairs and maintenance.

Logistics is the 275 days.

Logistics unwind from talking to our logistics providers.

Speaker #6: If you look at ACC data for the month of March, the way I would couch it is that it was a record month, you know, demand has remained steady, but both exports and domestic sales set second highest month ever records.

And I was just curious.

Karen.

Jim Fitterling: We were going into this in March, at the end of February, low inventories, pricing momentum, good order books. We had 3% volume growth sequentially in Q1, and now we're seeing a tick up. I think everything is poised for strong demand and really tight supply, and I think that bodes well for pricing outlook.

Going into this in the end of February.

Employees pricing momentum good order books.

Speaker #6: And then if you look at overall total sales, it was also a record as well. Industry operating rates, surged to 97% while DDI declined.

3% volume growth.

First quarter.

And now we're seeing.

So I think everything is poised for <unk>.

Speaker #6: So all of that sets us up for, you know, strong price momentum. If you look at the announcements for the month of April, we have 30 cents per pound on the table.

Strong demand.

Real tight supply.

Bodes well for pricing outlook.

Speaker #6: And then we have another price increase out there for the month of May of 20 cents. So when you look at the $2 billion guide that we have for second quarter, there's 26 cents per pound of margin improvement globally that's baked into that.

Yes.

Karen Carter: Yeah, exactly, Jim. On the pricing side, Hassan, for the question, I think we should go back to January and remember that you were at $0.05 in January, and then in March, in relation to the Middle East crisis, there was another $0.10 settlement. If you look at ACC data for the month of March, the way I would couch it is that it was a record month. Demand has remained steady, but both exports and domestic sales set second highest month ever record. If you look at overall total sales, it was also a record as well. Industry operating rates surged to 97% while DDI declined. All of that sets us up for strong price momentum.

Okay.

The question I mean, we can go back to January and I remember that.

Five and.

In January and then in March.

In relation to the 95.

Speaker #6: And that's also aligned with CMA views. So based on Jim's comment around the duration, we believe that there's more room for prices to move up.

There was another 10 settlement it looked at ACC data for the month.

The way I'll couch it as that month.

Speaker #6: And as we do that, that will present upside to the $2 billion guide.

Demand has remained steady but exports domestic sales second highest ever and then if you look at overall.

Speaker #1: Your next question comes from the line of Mike Sison, from Wells Fargo. Your line is live.

Well industry operating rates.

97%.

Hi.

All of that.

Speaker #7: Hey, good morning. Congrats on as well to Karen and Jim. When you think about the 1.75 billion for PSP and 2Q, can you sort of frame?

That four strong momentum.

Operator: If you look at the announcements for the month of April, we have 30 cents per pound on the table, and then we have another price increase out there for the month of May of 20 cents. When you look at the $2 billion guide that we have for Q2, there's 26 cents per pound of margin improvement globally that's baked into that, and that's also aligned with Sam and Vu's. Based on Jim's comment around the duration, we believe that there's more room for prices to move up. As we do that will present upside to the $2 billion guide.

Karen Carter: If you look at the announcements for the month of April, we have 30 cents per pound on the table, and then we have another price increase out there for the month of May of 20 cents. When you look at the $2 billion guide that we have for Q2, there's 26 cents per pound of margin improvement globally that's baked into that, and that's also aligned with Sam and Vu's. Based on Jim's comment around the duration, we believe that there's more room for prices to move up. As we do that will present upside to the $2 billion guide.

If you look at the.

For the month of April.

On the table.

And then we have another.

Quite frankly, it's out there.

Speaker #7: I mean, do you think that's kind of a mid-cycle EBITDA? Is it a peak EBITDA and then? When you think about the sustainability of these integrated margins into 27 as supply chains come back, where do you think we could sort of end up, you know, post all this?

'twenty two.

$2 billion that we have for second quarter.

Six pound of margin improvement globally that are baked into that and that's also in line with yourself So based on Jim.

And we believe there's more work.

Speaker #7: Thank you.

Preference to move up.

And if we do that that will present, a batch of $15 billion.

Speaker #5: Karen, do you want to take it?

Speaker #6: Sure. So I'll go back to the 26 per pound integrated margin improvement that we expect to get here in the second quarter. You know, that's mid-cycle.

Got it.

Your next question comes from.

Operator: Your next question comes from the line of Michael Sison from Wells Fargo. Your line is live.

Your line of Mike Tyson from Wells Fargo. Your line is live.

Speaker #6: Perhaps a bit above mid-cycle. You know, I think it's important to go back to the impact of this, which is really 3X what we saw in 2021 from winter storm Yuri.

Hey, good morning, Congrats on.

Michael Sison: Hey, good morning. Congrats as well to Karen and Jim. When you think about the $1.75 billion for PSP in Q2, can you sort of frame, do you think that's kind of a mid-cycle EBITDA? Is it a peak EBITDA? When you think about the sustainability of these integrated margins into 2027 as supply chains come back, where do you think we could sort of end up post all this? Thank you.

Okay.

When you think about the 175 billion for <unk> can you sort of frame that.

Speaker #6: And there you really did see us move over about a six-month period, you know, to mid-cycle and above prices. And so, you know, my response to that is it sits mid-cycle.

I mean do you think.

Mid cycle EBITDA.

Speaker #6: You know, moving to peak levels but with the supply shock overnight, that is why you're seeing the ramp in price increases. Go faster, then even what we saw in 2021.

Yeah.

Then.

When you think about the sustainability.

27.

Our supply chain has come back what do you think we could sort of end up.

Speaker #6: And again, as I indicated, in my last answer, we expect that this environment is going to continue in alignment with the duration of the recovery that we believe is going to take, you know, six months anywhere to 18 months to resolve.

Yes post all this thank you.

Okay.

Jim Fitterling: Karen, do you want to take it?

Karen Carter: Sure. I'll go back to the $26 per pound integrated margin improvement that we expect to get here in Q2. That's mid-cycle, perhaps a bit above mid-cycle. I think it's important to go back to the impact of this, which is really 3x what we saw in 2021 from Winter Storm Uri, and there you really did see us move over about a 6-month period to mid-cycle and above prices. My response to that is it's mid-cycle moving to peak levels, but with a supply shock overnight. That is why you're seeing the ramp and price increases go faster than even what we saw in 2021.

Sure.

The 26 integrated margin improvement that we expect to get here in the second quarter, you know that that mid cycle.

Perhaps a bit above mid cycle, you know I think it's important to go back to the impact of this which is really three at what we saw in 2021.

Speaker #1: Your next question comes from the line of Vincent Andrews, from Morgan Stanley. Your line is live.

Speaker #8: Thank you, good morning. And I echo the sentiment on the leadership transition. Could I ask, Jim, if you think if we get to the other side of the conflict, do you think there could be any changes in the cost curve on a sustainable basis and in particular, do you think Europe's position can improve at all on the other side?

It's a storm here and there.

US move over about a six month period.

No.

And about prices and.

My response to that is it mid cycle moving to peak level, but with a supply shock overnight, that's why you're seeing that.

Okay.

Faster than even we thought Anthony in 'twenty, one and you kind of indicated.

Speaker #8: And then within that, in a more near term, how are you thinking about the profitability of your own European assets over the course of the next couple of quarters?

Karen Carter: Again, as I indicated in my last answer, we expect that this environment is going to continue in alignment with the duration of the recovery that we believe is going to take 6 months anywhere to 18 months to resolve.

On my last answer we expect that this environment is going to continue.

And your alignment with durations.

Speaker #8: Do you think prices will improve enough to really reset profitability there? Or how are you thinking about it?

But we believe it's been a day.

I apologize.

I'll turn it off.

Speaker #5: Yeah, good morning, Vince. I think on Europe, a couple of things that are having an impact on Europe right now. The tightness in the marketplace from the shutdown of the straits is not just, you know, the inability to move the product, but it's the magnitude of the impact.

The next question comes from the line of Vince.

Operator: Your next question comes from the line of Vincent Andrews from Morgan Stanley. Your line is live.

From Morgan Stanley Your line is live.

Okay. Thank you.

Vincent Andrews: Thank you. Good morning, and I echo the sentiment on the leadership transition. Could I ask, Jim, if you think we get to the other side of the conflict, do you think there are going to be any changes in the cost curve on a sustainable basis? In particular, do you think Europe's position can improve at all on the other side? Within that, in the more nearer term, how are you thinking about the profitability of your own European assets over the course of the next couple of quarters? Do you think prices will improve enough to really reset profitability there? How are you thinking about it?

And I Echo your sentiment.

The leadership transition.

Jim If you think if we get the other side of the conflict I think there'd be any changes in the cost curve on a sustainable basis in particular, I think Europe's decision.

Speaker #5: So we talk about 20% of U.S. oil production being shut in in the straits. About 40% of Asian NAFTA production was shut in in the straits.

Can improve.

At all on the other side and then within that the.

Speaker #5: And so you saw that effect of that being forced measures in Asia of the high-cost producers because they couldn't get feedstock. On top of that, we're seeing in China right now restrictions on the refiners.

The more nearer term.

How are you thinking about profitability of your own European assets over the next couple of quarters do you think prices will improve.

Two really.

Speaker #5: They're being forced to produce fuel and jet fuel at the expense of something like NAFTA. And so that's going to continue to keep pressure on the availability of NAFTA there.

Reset profitability, there or how are you thinking about it.

Yes, good morning, Vince.

Jim Fitterling: Yeah. Good morning, Vince. I think on Europe, a couple of things that are having an impact on Europe right now, the tightness in the marketplace from the shutdown of the Straits is not just the inability to move the product, but it's the magnitude of the impact. We talk about 20% of US oil production being shut in the Straits. About 40% of Asian naphtha production was shut in the Straits. You saw the effect of that being forced closures in Asia of the high-cost producers because they couldn't get feedstock. On top of that, we're seeing in China right now restrictions on the refiners. They're being forced to produce fuel and jet fuel at the expense of something like naphtha, and so that's going to continue to keep pressure on the availability of naphtha there. That has helped in Europe.

On Europe, a couple of things.

Speaker #5: So that has helped in Europe. I mean, Europe has a little bit closer access to some NAFTA and they have some refining capacity. I'd say the biggest help on margins right now has been the tightness in byproducts.

On Europe right now.

Tightness in the marketplace from the shutdown of the Straits is not just.

Yes.

You can move the product.

The magnitude of the impact.

Speaker #5: So you're starting to see positive byproduct credits in the crackers. And as you know, on NAFTA cracker, it makes a third ethylene and two-thirds byproducts.

We talk about 20% of U S oil production being shut in interest rates.

About 40%.

Asia production.

Speaker #5: So byproduct credits can be a big contribution to improve margins there. I think it will hold, obviously, through second quarter and third quarter. I think longer term, a lot is going to depend on decisions that countries and people make.

Illustrates and so you saw that affect.

Does that mean for Caesars and the high cost producers because it could be a feedstock.

What we're seeing in China, right now restrictions on the refineries.

Speaker #5: I talked about 40% of Asian NAFTA, 90% of Japan's LNG came through the straits. So I think it's logical to expect that countries are going to step in and make some changes, like we saw after Russia-Ukraine when the Germans worked hard to diversify and get five LNG facilities going to diversify their natural gas supplies.

<unk>.

Jesse.

<unk> expenses.

So that's going to continue to keep pressure on availability.

That is helpful.

Europe in Europe.

Jim Fitterling: Europe has a little bit closer access to some naphtha, and they have some refining capacity. I'd say the biggest help on margins right now has been the tightness in byproducts. You're starting to see positive byproduct credits in the crackers. As you know, a naphtha cracker makes a third ethylene and two-thirds byproducts. Byproduct credits can be a big contribution to improved margins there. I think it will hold obviously through Q2 and Q3. I think longer term, a lot is going to depend on decisions that countries and people make. I talked about 40% of Asian naphtha, 90% of Japan's LNG came through the Straits.

A little bit closer access to Sam Adams and refining capacity.

Say on margins right now has been tightened.

Byproducts.

Speaker #5: I think you're going to see some things like that. Those will take, obviously, time to shake out. You can't get any of that in place in a, you know, one to two-year period.

Thanks Keith.

Credits in the crackers and as you know.

Naphtha Cracker make a third ethylene and two thirds byproduct credits.

Speaker #5: But there will be decisions that will be made that will have a longer-lasting impact on that. Europe, we're return to profitability. Karen, maybe a little bit on margins there and demand there?

Credits can be a biggie.

To improve margins there I think it was a whole obviously through second quarter and third quarter.

Okay.

It's going to depend on decisions by countries.

Speaker #6: Yeah, so demand for our assets definitely has moved up. The pro-NAFTA spread has widened. And we have, you know, more flexibility from a cracking perspective than any of our peers in the region.

Omega talked about 40% of Asian, naphtha on 90% of the LNG.

On the streets.

Jim Fitterling: I think it's logical to expect that countries are going to step in and make some changes like we saw after Russia, Ukraine, when the Germans worked hard to diversify and get five LNG facilities going to diversify their natural gas supplies. I think you're going to see some things like that. Those will take, obviously, time to shake out. You can't get any of that in place in a 1- to 2-year period. There'll be decisions that'll be made that'll have a longer-lasting impact on that. Europe will return to profitability. Karen, maybe a little bit on margins there and demand there.

It's logical to expect that countries.

I'm going to step in.

Speaker #6: So we've increased our operating rates. And we are helping to fill the gap from a supply perspective that you just referenced, Jim. So we anticipate that margins in the second quarter are also going to go up in Europe for us.

Makes some changes like we saw after the Russia Ukraine.

When the Germans.

Hard to diversify and get five LNG facilities is going.

To diversify their natural gas supplies, I think youre going to be like.

Speaker #5: I think Europe will be under pressure when the Middle East supply comes back because with that being shut in now, obviously, it has to be supplied from domestic Europe.

That those.

Those are the only company.

Jim.

You can't get any of that in place.

One to two year period.

Speaker #5: So when that comes back, I think obviously the cost position in Europe will move back. So I don't think it changes our long-term outlook on Europe.

These decisions will be made that will have a longer lasting impact in Europe.

Returned to profitability, Kevin maybe a little bit on the margins there and the demand.

Speaker #5: I think it gives us a little breathing room in the short term. And some time to do things wisely. And get it shut down in a really smooth fashion.

Operator: Demand for our assets definitely has moved up. The pro-nap spread has widened, and we have more flexibility from a cracking perspective than any of our peers in the region. We've increased our operating rate, and we are helping to fill the gap from a supply perspective that you just referenced, Jim. We anticipate that margins in Q2 are also going to go up in Europe for us.

Karen Carter: Demand for our assets definitely has moved up. The pro-nap spread has widened, and we have more flexibility from a cracking perspective than any of our peers in the region. We've increased our operating rate, and we are helping to fill the gap from a supply perspective that you just referenced, Jim. We anticipate that margins in Q2 are also going to go up in Europe for us.

Demand.

Definitely.

The spread has widened.

Speaker #5: Thanks, Vince.

More flexibility from a crash.

Ben.

Speaker #1: Your next question comes from the line of Jeff Zekauskas from JPMorgan. Your line is live.

So.

Operating rate.

And we are helping to fill the gap.

Thank you gentlemen.

Speaker #7: Thanks very much. Two-part question. The export price of polyethylene from Houston today is about $17.75 a ton, FOB. But the delivered price to Asia for polyethylene is less than $1,300 a ton.

So we have that.

Yeah.

Jim Fitterling: I think Europe will be under pressure when the Middle East supply comes back because with that being shut in now, obviously it has to be supplied from domestic Europe. When that comes back, I think obviously the cost position in Europe will move back. I don't think it changes our long-term outlook on Europe. I think it gives us a little breathing room in the short term and some time to do things wisely and get it shut down in a really smooth fashion. Thanks, Vince.

Europe will be under pressure when the middle East supply comes back because without being shut in.

Okay.

The supply and demand so when it comes back.

Obviously the cost position.

So I don't I don't think it changes our long term outlook on Europe.

Speaker #7: Can you describe what's going on in terms of why our general export price is so high? But Asia seems to be a weaker region for pricing in the scheme of things.

I think it gives us a little breathing room in the short term and some time to do things wisely.

And going to shut down.

Uh huh.

Smooth fashion.

Speaker #7: And for Jeff, could you let us know what the relationship that you expect between operating cash flow and EBITDA is in 2026? And what the real cash commitments are to Saudara?

Your next question comes from the line of Jeff Zekauskas from Jpmorgan.

Operator: Your next question comes from the line of Jeff Zekauskas from J.P. Morgan. Your line is live.

Yes.

Thanks very much.

Jeff Zekauskas: Thanks very much. A two-part question. The export price of Polyethylene from Houston today is about $1,775 a ton FOB, but the delivered price to Asia for Polyethylene is less than $1,300 a ton. Can you describe what's going on in terms of why our general export price is so high, but Asia seems to be a weaker region for pricing in the scheme of things? For Jeff, could you let us know what the relationship that you expect between operating cash flow and EBITDA is in 2026, and what the real cash commitments are to Sadara?

Two part question.

The export price of polyethylene from Houston today.

Pat.

17 of the tunnel.

Speaker #5: Yeah, do you want to touch on what's going on with Asian prices of polyethylene?

But the.

The delivered price to eight.

Speaker #6: Yeah, Ted, thanks for the question. You know, what I can say is that our prices around the world are going up. You know, the export price is the indication of real demand.

For polyethylene.

$13 a ton okay can you describe.

What's going on.

Speaker #6: Not local price. And as Jim just indicated, you know, in China in particular, they are starting to restrict the feedstock that is going to pet chem production.

In terms of why.

Export prices, so high but Asia seems to be a weaker week for price in the scheme of things.

Yeah.

Speaker #6: So we continue to expect prices there to go up as well.

Yes.

Could you, let us know what the relationship that you expect between.

Speaker #5: Yep.

Speaker #7: Yeah, Jeff, on the cash side of things in terms of operating EBITDA relationship, a couple of things I would mention there. You know, we entered and exited first quarter with a very strong cash position at slightly over $4 billion and as we look at our outlook for not only second quarter, but for the full year, we continue to see not only the self-help actions, but also all of the activities related to our pricing momentum, building as we work our way through the year and through the quarter.

Operating cash flow and EBITDA is in 2026, and what the real cash commitments to.

Dara.

Yes.

Jim Fitterling: Yeah. Karen Carter, you want to touch on what's going on with Asia prices of Polyethylene?

Yes. Thank you.

Alright.

Prices of polyethylene.

Operator: Yeah, Jeff Tate, thanks for the question. What I can say is that our prices around the world are going up. The export price is the indication of real demand from not local price. As Jim Fitterling just indicated, in China in particular, they are starting to restrict the feedstock that is going to petchem production. We continue to expect prices there to go up as well.

Karen Carter: Yeah, Jeff Tate, thanks for the question. What I can say is that our prices around the world are going up. The export price is the indication of real demand from not local price. As Jim Fitterling just indicated, in China in particular, they are starting to restrict the feedstock that is going to petchem production. We continue to expect prices there to go up as well.

Yes, hi, thank you for that.

What I can say that goes around the globe.

Right.

Speaker #7: So with that, we would expect our cash conversion rate to steadily improve as we go from one quarter to the next here. So we're in a really good position to see that EBITDA to cash flow and free cash flow increase from a cash conversion perspective.

Patients.

Man.

Local price.

Jim just indicated.

In China.

To restrict.

Thank you.

So we can sort of expect.

Speaker #7: In terms of your second or third question around the Saudara cash commitments, I'd like to make a couple of comments there. You will notice that in first quarter, you know, Dow's cumulative equity losses for Saudara reached $1.4 billion.

As well.

Jim Fitterling: Jeff?

Yes.

Jeff Tate: Yeah, Jeff, on the cash side of things in terms of operating EBITDA relationship, a couple of things I would mention there. We entered and exited Q1 with a very strong cash position at slightly over $4 billion. As we look at our outlook for not only Q2, but for the full year, we continue to see not only the self-help actions, but also all of the activities related to our pricing momentum building as we work our way through both the year and through the quarter. With that, we would expect our cash conversion rate to steadily improve as we go from one quarter to the next here. We're in a really good position to see that EBITDA to cash flow and free cash flow increase from a cash conversion perspective.

On the cash side of things.

EBITDA relationship.

We entered and exited.

Speaker #7: This matches our existing relevant obligations and commitments and so accordingly under US gap, we're in a position to suspend further recognition of the Saudara equity losses.

First quarter with a very strong cash position slightly over $4 billion.

Our outlook for the second quarter for the full year, we continue to see not only by itself.

Speaker #7: Now, the $1.4 billion of commitments that we have from a relevant obligation perspective is comprised of $1.2 billion of debt. We have approximately $100 million related to our revolving credit facility and then approximately another $100 million related to our letter of credit.

Also all of the activities related to our pricing momentum building.

Working our way through the year.

This quarter, so with that we would have.

Conversion rate instead of the <unk> <unk>.

So from one quarter to the next few years. So we're in a position to see that EBITDA.

Speaker #7: Specific to your question around the cash commitments for 2026, and also through 2038, that would be approximately $100 million per year.

Cash flow and free cash flow.

And cash conversion perspective.

Jeff Tate: In terms of your third question around the Sadara cash commitments, I'd like to make a couple of comments there. You will notice that in Q1, Dow's cumulative equity losses for Sadara reached $1.4 billion. This matches our existing relevant obligations and commitments, and so accordingly under US GAAP, we're in a position to suspend further recognition of the Sadara equity losses. Now, the $1.4 billion of commitments that we have from a relevant obligation perspective is comprised of $1.2 billion of debt. We have approximately $100 million related to our revolving credit facility, and then approximately another $100 million related to our letter of credit. Specific to your question around the cash commitment for 2026 and also through 2038, that would be approximately $100 million per year.

In terms of your second question around book.

If I could make a couple of comments.

Speaker #1: Your next question comes from the line of Kevin McCarthy from Vertical Research Partners. Your line is live.

Yeah.

For Dow chemical.

Yes.

Alright.

This matches, our existing relevant obligation bank commitments and supposedly under us GAAP, we are in a position to sustain.

Speaker #7: Thank you and good morning. Jim, one of the most common questions that we field from investors is along the lines of assessing the durable supply side impacts from the conflict.

So dara.

The $1 $4 billion.

That we have from our railroad Robin obligation perspective.

Speaker #7: So we'd love your thoughts on that subject in terms of, you know, physical damage to assets in the Middle East, new plants that we thought might be starting up that are, in fact, unable to do so and I think you also made a comment that you would expect increased rationalization of assets because of the conflict.

At one point the intelligence that we have approximately $100 million latest revolving credit facility and approximately another $100 million.

Great.

Question around the cash commitments for 2026, and also through 2038 that will be approximately $100 million per year.

Speaker #7: So how would you frame out the lasting impact as opposed to the impacts related to feedstock and traffic through the Strait?

The next question comes from the line of.

Operator: Your next question comes from the line of Kevin McCarthy from Vertical Research Partners. Your line is live.

Mccarthy from vertical research partners. Your line is live.

Speaker #5: Yeah, good morning, Kevin. Look, and I don't have all of the insight to what has happened there. But I can go based on the incidents that I'm aware of and the things that have been shared that are public.

Thank you and good morning.

Kevin McCarthy: Thank you, and good morning. Jim, one of the most common questions that we field from investors is along the lines of assessing the durable supply side impacts from the conflict. Would love your thoughts on that subject in terms of physical damage to assets in the Middle East, new plants that we thought might be starting up that are in fact unable to do so. I think you also made a comment that you would expect increased rationalization of assets because of the conflict. How would you frame out the lasting impact as opposed to the impacts related to feedstock and traffic through the strait?

One of the most common questions that we feel from investors.

It's along the lines that <unk> seen a durable supply side impact.

Alex So would love your thoughts on that subject in terms of physical damage to assets.

Speaker #5: I think most of the attacks were relatively you know, we saw information about like the East-West pipeline in Saudi, which is a pump station was attacked.

East.

Plants that.

We thought might be starting up.

Unable to do so.

Speaker #5: We saw some situations in Kuwait where some upstream assets were attacked. And I think in most of those cases, they have the capabilities, the people, and the wherewithal to get that repaired and back up.

So I think you also made a comment that you expect increased rationalization of assets because of conflicts.

Could you frame out the lasting impact as opposed to the.

Speaker #5: So if you look at what I said about, you know, 275 days plus to reopen the Straits and get things back to normal, I think a lot of that is going to be able to be repaired within that timeframe.

<unk> related to feedstock if traffic through the street.

Yes, good morning, Kevin.

Jim Fitterling: Yeah. Good morning, Kevin. Look, and I don't have all of the insight to what has happened there, but I can go based on the incidents that I'm aware of and the things that have been shared that are public. I think most of the attacks were relatively. We saw information about the East-West Pipeline in Saudi, which a pump station was attacked. We saw some situations in Kuwait where some upstream assets were attacked. I think in most of those cases, they have the capabilities, the people, and the wherewithal to get that repaired and back up. If you look at what I said about 275+ days to reopen the straits and get things back to normal, I think a lot of that is going to be able to be repaired within that timeframe. You had the situation with Qatar, with the LNG plant.

Hello.

I don't have all been to the site.

Speaker #5: You had the situation with Qatar with the LNG plant. What got hit there was a very critical piece of equipment that takes two and a half to three years to rebuild and then, of course, it's got to get installed.

What has happened.

What I can build based on incidents that I'm aware of.

Things have been shared that are public.

I think most of the attacks.

We're relatively.

Speaker #5: And so that's the most significant attack that I've heard of and there's not a lot that I think they're going to be able to do to fix that.

We have some information about like the east West pipeline, Cincinnati, which pumps.

Pump station was impact.

Some situations in Kuwait.

Speaker #5: But that doesn't have as much impact on the petrochemical side of things. And just talking with our partners, I think they are actively working on repairs and I don't hear anything from them that leads me to believe it's going to extend, you know, longer than this duration of this logistics constraint.

Some upstream assets under attack.

Most of those cases, they have the capabilities of the people and the wherewithal to get that repaired and back.

If you look at what I said about 275 days plus too.

Stretching to get things back to normal I think.

That is going to be able to be prepared in that timeframe.

The situation with Qatar LNG plant.

Speaker #1: Your next question comes from the line of Patrick Cunningham from Citi. Your line is live.

What got you there was a very critical piece.

Jim Fitterling: What it got hit there was a very critical piece of equipment that takes 2.5 to 3 years to rebuild, and then of course, it's got to get installed. That's the most significant attack that I've heard of, and there's not a lot I think they're going to be able to do to fix that. That doesn't have as much impact on the petrochemical side of things. Just talking with our partners, I think they are actively working on repairs, and I don't hear anything from them that leads me to believe it's going to extend longer than this duration of this logistics constraint.

Speaker #8: Hi, good morning. Thanks for taking my question. Could you perhaps walk through, you know, any impacts of the conflict on maybe the, you know, 10 to 15 percent of non-polyolefin derivatives that are exposed to some of these tightening market dynamics?

Thanks, and a half to three years.

And then of course as we install.

And so that.

The most significant.

Okay.

There's not a lot.

Speaker #8: And where you might see the biggest potential for additional export opportunities or, you know, advantage footprint taking advantage of some of the higher margins?

We're gonna be able it will be.

Are you able to fix that.

No.

Jim.

The chemicals side of things.

And just talking about.

I think.

Actively working on repairs I don't hear anything from them.

Speaker #5: Well, as Wayne polyethylene polyethylene ethylene glycol is probably been the biggest impact of all of it. And so you see that already showing up in the market response and what's happening.

David Thanks, gentlemen, along again.

<unk> logistics infrastructure.

Operator: Your next question comes from the line of Patrick Cunningham from Citi. Your line is live.

The next question comes from the line.

Speaker #5: And those should be able to repair quickly. It's also one of the things you see in the results with Kuwait's earnings in the first quarter was remember the Kuwait has operations in Canada and Texas and so they have a global footprint on MEG, so they're able to supply their customers and also take advantage of, you know, the price increases and that more than offsets the situation that they have to deal with locally.

Got it.

Your line is live.

Hi, Good morning, Thanks for taking my question could you perhaps walk through.

Patrick Cunningham: Hi. Good morning. Thanks for taking my question. Could you perhaps walk through any impacts of the conflict on maybe the 10% to 15% of non-polyolefin derivatives that are exposed to some of these tightening market dynamics? Where you might see the biggest potential for additional export opportunities or advantage footprint taking advantage of some of the higher margins?

With the conflict on maybe the.

Percent of non holiday olefin derivatives that are.

Tightening market dynamics, and where you might be the biggest potential for additional acquisition opportunities or advance footprint.

Some of the higher margins.

Speaker #5: But they'll be able to get that back up and moving once the roadblock clears. I would say on propylene derivatives, there are some, obviously, we have some in the polyurethane business, some that will be impacted.

Well.

Jim Fitterling: Well, ethylene, polyethylene, ethylene glycol has probably been the biggest impact of all of it. You see that already showing up in the market response and what's happening. Those should be able to repair quickly. It's also one of the things you see in the results with Kuwait's earnings in Q1 was. Remember, Kuwait has operations in Canada and Texas, and so they have a global footprint on MEG, so they're able to supply their customers and also take advantage of the price increases, and that more than offsets the situation that they have to deal with locally. They'll be able to get that back up and moving once the roadblock clears. I would say on propylene derivatives, there are some. Obviously, we have some in the polyurethanes business that will be impacted. There's some polypropylene that will be impacted.

Oh definitely ethylene polyethylene ethylene glycol is probably been the biggest impact.

<unk>.

And so.

So we see that already showing up in the market response and what's happening.

Speaker #5: There's some polypropylene that will be impacted. I think in polypro, you had a little bit different situation in downstream demand dynamics, auto being slow, appliances being slow kind of takes a little demand pressure off of polypro.

There should be able to.

Please.

Also one of the things you're seeing results.

<unk> earnings in the first quarter was remember equally has operations in Canada exclusivity. So they have a global footprint.

Speaker #5: So we haven't seen the same kind of dynamics there, MDI. Similar. Other things you want to bring in, Karen?

We're able.

To support our customers and also take advantage of it.

Price increases than that.

Speaker #2: No, I think you're absolutely right. I mean, on the EO side, in particular, MDI working to get, you know, those prices up above the cost and increases.

More than offsets.

So two questions. Thanks.

Hopefully.

But they will be able to get that done.

Speaker #2: And MEG, as you referenced, you know, those prices are moving up as well. You know, I'd say on the siloxane side or in the silicone side, for sure, you know, less impact.

<unk>.

The global health.

I would say on propylene derivatives.

Some obviously, we have some in the polyurethane.

Speaker #2: But there, I would just highlight, particularly on siloxane, prices are moving up there, you know, as an early indication of what we're seeing on anti-involution in China.

That will be impacted.

Polypropylene that will give them.

Thank you.

Jim Fitterling: I think in polypro, you had a little bit different situation in downstream demand dynamics, auto being slow, clients being slow, kind of takes a little demand pressure off of polypro. We haven't seen-

Speaker #2: Which we believe is a positive sign. And so we are working to move prices up across the board. Most of it is because of the Middle East crisis, but then in the silicones and siloxane side, it's a bit of a different story.

You had a little different.

Situation.

Downstream demand dynamics.

It means slow clients.

Thanks, Chris.

First of all the poly pro so we haven't seen.

Speaker #2: But their prices are moving up as well.

Operator: MDI

Jim Fitterling: ... the same kind of dynamics there. MDI, similar. Other things you want to bring in, Karen?

Okay.

The dynamics there.

Other things do you want to bring in Durham North Carolina.

Operator: No, I think you're absolutely right. On the EO side, in particular, MDI, working to get those prices up above the cost increases. MEG, as you referenced, those prices are moving up as well. I'd say on the siloxane side or in the silicone side for sure, less impact. There, I would just highlight particularly on siloxane, prices are moving up there as an early indication of what we're seeing on the evolution in China, which we believe is a positive sign. We are working to move prices up across the board. Most of it is because of the Middle East crisis, but then in the silicones and siloxane side, it's a bit of a different story, but their prices are moving up as well.

Karen Carter: No, I think you're absolutely right. On the EO side, in particular, MDI, working to get those prices up above the cost increases. MEG, as you referenced, those prices are moving up as well. I'd say on the siloxane side or in the silicone side for sure, less impact. There, I would just highlight particularly on siloxane, prices are moving up there as an early indication of what we're seeing on the evolution in China, which we believe is a positive sign. We are working to move prices up across the board. Most of it is because of the Middle East crisis, but then in the silicones and siloxane side, it's a bit of a different story, but their prices are moving up as well.

Speaker #1: Your next question comes from the line of Frank Mitch from Fermium Research. Your line is live.

On the <unk>.

Particular.

Thank you Doug.

Speaker #8: Thank you. And also let me offer my congratulations to Jim and Karen. Coming back to Sidara, I was just curious if you could speak to the future of what your expectations are for Sidara over the next couple of years?

Okay.

As you reference some of those questions.

Im going up as well.

Okay.

But on the silicon side for sure.

Pat.

There I would just highlight particularly on satellite practice are moving up there as an early occasions.

Speaker #8: You know, can you speak to whatever damage may have been sustained so far to that facility? And also, Jeff, you know, when you were speaking to the changes on a gap basis for Sidara, you know, that unit had been running at a negative 120 million or so per quarter equity earnings to Dow.

Hum.

China, which we believe is a positive sign.

Okay.

Across the board.

It is because of private <unk>.

Teleconference, a lot things got a bit of a different story with their prices are moving up as well.

Speaker #8: I would imagine that that might have been higher had you not made the adjustment to gap. Can you comment on that? Thank you.

The next question comes from the line of Frank.

Operator: Your next question comes from the line of Frank Mitsch from Fermium Research. Your line is live.

Mhm research.

Speaker #5: Yeah, Frank, I'll take the first part. I mean, one of the things I will continue to do as Karen takes over, CEO role, is finish up these negotiations with Saudi Aramco on the restructuring of Sidara.

Thanks.

Alright, Thank you and let me welcome and congratulations.

Frank Mitsch: Thank you, and also let me offer my congratulations to Jim and Karen. Coming back to Sadara, I was just curious if you could speak to the future of what your expectations are for Sadara over the next couple of years. Can you speak to whatever damage may have been sustained so far to that facility? Jeff, when you were speaking to the changes on a GAAP basis for Sadara, that unit had been running at -$120 million or so per quarter equity earnings to Dow. I would imagine that that might have been higher had you not made the adjustment to GAAP. Can you comment on that? Thank you.

Jim.

Coming back to <unk> I was just curious if you could speak to the future of.

What your expectations are for.

Appreciate it.

Speaker #5: And trying to address some of the challenges that we've faced there. I think the asset itself, we've sustained a little bit of damage I think most of it's pretty straightforward.

A couple of years.

Can you speak to what our damage there may have been sustained foreign to that facility and also.

When you were speaking to.

Speaker #5: We're able to manage it. A lot of, you know, what was fired at that coast was intercepted and protected very well. A few stray things that got through, but we have a good team on the ground and they've gone through all the damage assessments and they'll be able to get things back up and running.

The changes.

On a GAAP basis for Sudan.

And it had been running at negative $120 million or so per quarter.

Now I would imagine that that might be.

Sure.

Mid C. Maybe adjustments GAAP can you comment on that.

Thank you.

Yeah.

Speaker #5: I would say that, you know, our focus is going to be on getting the restructuring right, getting the participation of Sidara right. And it's not really an operating problem.

Jim Fitterling: Yeah, Frank, I'll take the first part. One of the things I will continue to do, as Karen takes over the CEO role, is finish up these negotiations with Saudi Aramco on the restructuring of Sadara and trying to address some of the challenges that we face there. I think the asset itself, we've sustained a little bit of damage. I think most of it's pretty straightforward. We're able to manage it. A lot of what was fired at that coast was intercepted and protected very well. A few stray things that got through, but we have a good team on the ground, and they've gone through all the damage assessments, and they'll be able to get things back up and running. I would say that our focus is going to be on getting the restructuring right, getting the participation of Sadara right. It's not really an operating problem.

First of all I mean, one of.

Thanks.

Continue to do.

Thanks.

Oh.

Finish up these negotiations with.

Speaker #5: It's more of a leverage issue and balance sheet issue that we've got to get right. And that's what we're working through with Aramco. And I, as I promised, I'll have more of an update for you mid-year when we come back for earnings then.

Paul.

On the restructuring.

I'm just trying to address.

Some of the challenges.

It's there.

Set itself.

We sustained a little bit of damage.

Speaker #5: Jeff, you want to comment on that last part?

It's pretty straightforward.

Speaker #8: Yeah, Frank. In terms of looking at first quarter specifically, your spot on, you know, the equity loss impact, there was 115 million. And if you're looking on a full year basis, we would estimate that to be in the approximately 400 million range.

We were able to manage it.

A lot of.

What was.

That was their steps.

Very well thank you.

Great. Thanks.

Speaker #8: From a Sidara impact perspective for Dow.

But we have a good team.

Ghansham.

Speaker #5: I hope we get the royals and Mets back into the World Series, Frank. We have unfinished business.

<unk>.

Be able to get things back up and running.

I would say that our focus is going to be on getting the restructuring right.

Getting them.

Speaker #1: Your next question comes from the line of Dave Bagleiter. From Deutsche Bank. Your line is live.

Patients that are behind us.

Not really an operating problem, it's more of a.

Jim Fitterling: It's more of a leverage issue and a balance sheet issue that we've got to get right. That's what we're working through with Aramco. As I promised, I'll have more of an update for you mid-year when we come back for earnings then. Jeff, you want to comment on that last part?

Leverage issue a balance sheet issue.

Speaker #7: Thank you. Good morning, and again to Jim and Karen, congrats on the new roles. Karen, just back to Q1 guidance, what does that 26 cents of global margin expansion imply for the 30 cents you have announced for May, for April, and the 20 cents for May?

Right.

Working through with Aramco.

Okay.

On April.

When we come back for earnings.

Jeff you want to comment on that last month.

Jeff Tate: Yeah, Frank, in terms of looking at Q1 specifically, you're spot on. The equity loss impact there was $115 million. If you're looking on a full year basis, we would estimate that to be in the approximately $400 million range from a Sadara impact perspective for Dow.

In terms of.

Specifically youre spot on.

There was $115 million, if you're looking on a full year basis.

Speaker #7: Does that include a portion of those or all those that would be helpful? Thank you.

We estimate that to be in that range.

Speaker #2: So it includes our April price increase that's on the table, but it does not include May. So May would present upside to the guide that we have in second quarter.

Yes.

Thank you Dara.

Got it.

I hope we get the royalty.

Jim Fitterling: I hope we get the Royals and Mets back into the World Series, Frank. We have unfinished business.

Sorry.

Evans visits.

Okay.

Speaker #1: This concludes our question and answer session. I'll now turn the conference back over to Andrew Riker for closing remarks.

Operator: The next question comes from the line of David Begleiter from Deutsche Bank. Your line is live.

The next question comes from.

Dave.

David Begleiter from Deutsche.

Please disconnect your lines.

Thank you good morning, and again to Jim.

David Begleiter: Thank you. Good morning, and again to Jim and Karen, congrats on the new roles. Karen, just back to Q1 guidance, what does that $0.26 of global margin expansion imply for the $0.30 you have announced for April and the $0.20 for May? Does that include a portion of those or all those? That would be helpful. Thank you.

Speaker #5: Thank you, everyone, for joining our call. And we appreciate your interest in Dow. For your reference, a copy of our transcript will be posted on our Dow's website within 48 hours.

Congrats on the new roles.

Curtis back to Q1 guidance, what does that six cents.

<unk> margin expansion.

Speaker #5: This concludes our call.

For the 30 tapping.

For May so for April 20th century.

<unk>.

A portion of those are all of them.

That would be helpful. Thank you.

So it includes our April price increase and on the table, but does not include the <unk>.

Operator: It includes our April price increase that's on the table, but it does not include May. May would present upside to the guide that we have in Q2.

Karen Carter: It includes our April price increase that's on the table, but it does not include May. May would present upside to the guide that we have in Q2.

Thank you Brian.

Second quarter.

This concludes our question and answer session I will now turn the conference back over to Michael.

Operator: This concludes our question and answer session. I'll now turn the conference back over to Andrew Riker for closing remarks.

Mike or for closing remarks.

Thank you everyone for joining our call and we appreciate your consistent now for your reference a copy of our transfer center website within 48 hours.

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

To conclude the call.

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

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

Thank you.

Yes.

Okay.

Yeah.

Okay.

Yeah.

Q1 2026 Dow Inc Earnings Call

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