Good morning. Thank you for joining Dow's third quarter earnings call. This call is available via webcast and we have prepared slides to supplement our comments today. They are posted on the Investor Relations section of Dow's website and through the link to our webcast. I am Pankaj Gupta, Dow Investor Relations Vice President. And joining me on the call today are Jim Fitterling, Dow's Chairman and Chief Executive Officer, and Howard Ungerleider, President and Chief Financial Officer. Please read the forward-looking statement disclaimer contained in the earnings news release and slides. During our call, we will make forward-looking statements regarding our expectations or predictions about the future. Because these statements are based on current assumptions and factors that involve risks and uncertainties, our actual performance and results may differ materially from our forward-looking statements. Dow forms 10-Q, and 10-K include detailed discussions of principal risks and uncertainties which may cause such differences. 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 is contained in the Dow earnings release, in the slides that supplement our comments today, and on the Dow website. On Slide 2, you will see our agenda for the call. Jim will begin by reviewing our third quarter highlights and operating segment performance, Howard will share our modeling guidance and outlook, and then Jim will recap our strategy for disciplined value growth that we outlined at our Investor Day earlier this month and why Dow continues to be a compelling investment opportunity. Following that, we will take your questions. Now, let me turn the call to Jim.

Thank you, Pankaj, and thanks everyone for joining us today. Starting on Slide 3. In the third quarter, Dow achieved top and bottom line growth, both year-over-year and sequentially. I'm incredibly proud of the Dow team for delivering these results and doing so safely, despite industry supply disruptions from hurricanes on the U.S. Gulf Coast. Our proactive storm preparations enabled us to maintain the safety of our team and community and recover quickly. We delivered a 53% sales increase year-over-year with double-digit gains in every segment, business, and region. We also recorded a 7% increase in sales over the prior quarter. We captured strong price momentum driven by tight supply-demand balances across our key value chain. And we achieved volume growth of 2%, both year-over-year and sequentially, supported by continued strong end-market demand despite supply and logistics constraints. We increased operating EBITDA by more than $2.1 billion year-over-year, with improvements in all segments and businesses and $58 million higher sequentially. Key contributors included year-over-year margin expansion of 1,170 basis points, driven by price momentum and demand growth, and increased equity earnings up $189 million from margin expansion at our Sadara and Kuwait joint ventures. Our continued focus on cash generation and our balanced disciplined capital allocation enabled us to deliver cash flow from operations of $2.7 billion, up $958 million year-over-year, driven by margin expansion from price momentum in key value chains. We returned a total of $918 million to shareholders through our industry-leading dividend of $518 million, plus $400 million in share repurchases, and we also reduced gross debt by more than $1.1 billion in the quarter. Our proactive liability management actions to tender existing notes have resulted in no long-term debt maturities due until 2026, and we've reduced annual interest expense by more than $60 million. Overall, Dow continues to deliver on its priorities and we see further strength ahead as we benefit from a favorable macro backdrop and execute our disciplined strategy to decarbonize our footprint and grow earnings, driving significant value for all stakeholders. Moving to our segment performance on Slide 4. In the Packaging and Specialty Plastics segment, operating EBIT was $2 billion compared to $647 million in the year-ago period. Sequentially, operating EBIT was down $60 million. Price gains in both businesses and in all regions led to margin improvement in the core business and increased equity earnings. On a sequential basis, operating EBIT margins declined by 300 basis points on higher feedstock and energy costs. The Packaging & Specialty Plastics business reported a net sales increase year-over-year, led by local price gains in industrial and consumer packaging, and flexible food and beverage packaging applications. Volumes declined year-over-year due to lower polyethylene supply, as a result of planned maintenance turnarounds and weather-related outages in the quarter. Compared to the prior quarter, the business delivered price and volume gains on strong demand in industrial and consumer packaging applications, which were partly offset by hurricane-related outages.

Thank you, Jim, and good morning, everyone. Turning to Slide 5. In the fourth quarter, we see a continuation of robust demand growth across our packaging, infrastructure, consumer, and mobility end markets. Brand owner inventory levels remain low, and as a result, we anticipate higher seasonal demand continuing into the holiday season this year. In Packaging & Specialty Plastics, we continue to see resilient demand for packaging applications and for our differentiated functional polymers. Global polyethylene supply remains constrained as the industry completes higher turnaround activity and supply chains recover from weather events on the U.S. Gulf Coast. We exited the third quarter experiencing higher raw material and energy costs, which we anticipate will likely persist through the fourth quarter. We expect these costs to be at approximately $350 million headwind sequentially. Dow will continue to utilize our broad geographic footprint and best-in-class feedstock flexibility to help mitigate these impacts. We also anticipate $175 million tailwind from turnarounds in the quarter as we completed our planned maintenance at our cracker in Canada. In Industrial Intermediates & Infrastructure, continued consumer demand for furniture and bedding, appliances, pharma, and home care, are expected to keep supply tight in our key value chains. Due to the weather-related outages in the third quarter, some of our planned turnaround activity was moved to the fourth quarter. Sadara will also start a turnaround at its isocyanates facility in the fourth quarter as well. Altogether, we anticipate a $100 million in this segment from turnaround impacts. Short-term increased energy costs in the U.S. Gulf Coast and Europe are expected to be an additional $100 million headwind in the quarter. We continue to see sequential recovery in industrial activity, particularly for heavy original equipment (HOG) applications. We anticipate this recovery will continue at least through the fourth quarter as industrial production continues to ramp up from very low inventory levels to meet demand and performance materials and coatings demand for electronics, mobility, building construction continues to outpace supply. Demand for architectural coatings is also expected to remain elevated due to persistently low inventory levels across the value chain. Global production for silicone has been impacted by the recent dual control policy enforcement actions in China, with silicon metal prices almost three times their previous highs.

Thank you, Howard. Turning to Slide 9. The strategy we outlined at our Investor Day builds on our long history of industry leadership. Our plan enables us to capture demand from sustainability drivers, achieve zero scope 1 and 2 carbon emissions, and deliver meaningful, underlying earnings, and cash flow growth for years to come. Our path to decarbonize our footprint and grow earnings is a phased, side-by-side approach that both retrofits and replaces end-of-life assets with low carbon emission facilities, while also expanding our capacity. This plan will deliver a 30% reduction in our CO2 emissions between 2005 and 2030 through a disciplined approach that manages timing based on affordability, macro and regulatory drivers around the world. Overall, the project has a 65% lower conversion cost, is running consistently at more than 110% of nameplate capacity and has delivered greater than 15% return on invested capital since startup. We will leverage key learning from Texas 9 as we plan to build the world's first ever net zero carbon emissions ethylene cracker and derivatives complex in Fort Saskatchewan, Alberta, delivering approximately $1 billion in EBITDA, as Howard outlined earlier.

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

Good morning, Jim. Jim, as I take a look at your guidance, sequentially, you seem to be guiding to a $500 million downtick in EBITDA. So $3.6 billion comes down to $3.1 billion. But just reading through the guidance, you don't break out the impact of IDA. So is it fair to assume that you guys are guiding to sort of north of $3.1 billion in EBITDA for Q4?

Thank you, Hassan. That's an important question. The total impact of IDA was approximately $100 million, distributed between the third and fourth quarters. That's the perspective to keep in mind. The remaining guidance mostly reflects the effects of increased feedstock and raw material costs that we anticipate for the fourth quarter. Despite this, I believe demand will remain strong, and I expect our operating rates to exceed those of the third quarter due to the influence of IDA. I don't foresee the opportunity to significantly build inventory, but our plan is to operate at full capacity until the year's end, as our customers require this demand and we need to stay ahead.

Thanks. Good morning, everyone. Maybe just a little more color within the Packaging & Specialty Plastics sales guidance and in particular, what you're expecting for volume sequentially? And then is there any sort of impact on the top line from feedstocks or hydrocarbons? You can obviously tell I'm trying to back out your polyethylene price assumptions.

Good morning Vince. I expect the volumes will be better. We had St. Charles, obviously, out in the month of September, and it came back here earlier in October. So I expect fourth quarter will have the strong run. And remember, we had the turnaround in the fourth that was happening in the third quarter as well, and we're out of that. So the fourth will be back. We'll see some additional ethylene out of the fourth because the back half of that expansion started up. And I think you'll see higher volumes for the year. We're looking at volume increases for plastics like 8%, 9% for the industry. I think for fourth quarter, we manage 2% in the quarter. In third quarter, I think for fourth quarter, it will be higher than that. I do expect prices will moderate at some point. I don't know exactly when that's going to be because right now, inventories are low, but I don't think it's going to fall as precipitously as some of the forecast estimates.

Yes. Good morning, Jim and Howard. Can you discuss the demand for siloxane and downstream silicone? What is currently happening in the siloxane merchant market? How is this change influenced by raw materials? Jim, you mentioned that silicone costs increased in China, leading to the shutdown of a plant. Can you provide more details on that? Lastly, what will occur with the new siloxane capacity that was announced in China in light of the recent dual control policies?

PJ, good question. I'm going to walk through several things. I would say in the near-term, the impact on silicon metal has been in China due to the restrictions from dual control. And as you know, that was driven by the higher coal prices, really pushing up the costs for the electricity producers. And the electricity producers are capped on their electricity prices, so some of them didn't run and that forced the industry curtailment. Typically, as you're going into cold weather months, industry takes the hit versus homeowners and consumers. You try to keep your people warm and so that hit silicon metals. For that reason, things became tight. We've moved some silicon metals from Brazil over to China to offset that. And we'll run through the fourth quarter book. We decided to pull a turnaround in Zhangjiagang into the fourth quarter. We had originally planned it for first quarter. We decided to do it now, that takes a little pressure off the dual control situation. That turnaround will cost us, I think on Slide 5, it's in there, $75 million in the fourth quarter. I expect we're going to see about $50 million higher cost. That's both downstream G3 silicones demand and siloxane demand are very strong. And so siloxane prices have gone up significantly. And so I think we're going to be in that situation for all of fourth quarter, and I would expect into first quarter as well.

Hi. Good morning. I have a two-part question. The first part has to do with your expansion in Alberta in the late decade. That seems to be your sole large ethylene polyethylene expansion. And by my calculation, what that means is that over the next 10 years or so, your capacity will expand 1% to 2% per year. And presumably the industry grows faster than that. And so, is this approach an example of your disciplined capital approach where you really only want to have high return projects? And what you'll do is you'll sacrifice volume growth in service of that higher return. Second part is for Howard. The net debt to EBITDA, you say, will go to 2 to 2.5 times. That makes a difference because if your EBITDA is $10 billion, that's a $5 billion difference. So was it 2 or 2.5 times? And are you going to get there quickly? Or are you going to dawdle? Because if what you're going to do is lever up by another, I don't know, $9 billion or $10 billion to buy back stock or increase dividends, how quickly are you going to get there? Is it 2022 or '25 or somewhere in between?

Good morning, Jeff. The first part of the Alberta expansion comes on in 2007. That brings on most of the new cracker capacity. The cracker will be expandable. And it also brings on the derivatives. And then we retrofit the existing cracker, so we can tie in the back-end into the auto thermal reformer and that will come on in 2009. So that will be the largest mega project that we do. We do have investments in the near-term on the bottleneck and existing assets that will help us between now and 2007. And we have the ethylene capacity to add some downstream capacity as well. So there will be a little bit more than 1% to 2% in growth. But our focus on Alberta is obviously to take advantage of the situation there, to decarbonize and have a good carbon capture location and take that whole site to net zero. Howard, do you want to get the net debt to EBITDA?

Yes. Sure. Good morning Jeff. Your point about disciplined balance on the capital allocation side, it goes to the debt as well. I mean, when you think about what we get in the third quarter, it was very balanced. It was more than $500 million in dividends. It was doing another $400 million of stock buyback, and then we took out $1.1 billion of debt. To your point on the 2 to 2.5 ratio, I would say, some of our peers have a 1% swing between their low and high. So we're already giving you a better than peer view with saying our range is only a half a turn. But if you'd like me to narrow that further, I would say use the midpoint. So our long-term average is 2 to 2.5. I would say through the economic cycle, if what you want to use 2.25, that's a reasonable proxy for where we want to be, but we have the corridor there to recognize that it's a long-term target. Punctually today, using the rating agency methodology through the end of the third quarter, we're probably around 2.4, 2.5. So we have about a quarter of a turn left to go to hit that midpoint of the 2 to 2.5.

Good morning. This is Mike actually, sitting in for Bob. Just wanted to give me a couple of comments about inventories still being tight. And I guess from a polyethylene perspective, could you perhaps maybe quantify what you're seeing in terms of days of inventory and how, perhaps, that may compare to what you would consider more normal?

Mike, good morning. Industry inventory and DDI have decreased. In September, industry inventories fell by about 120 million pounds, and days of inventory have also dropped, indicating strong demand. Export demand surpasses domestic demand, which was affected by storms. We observed declines in high density and linear low inventories, with a minor build in low density that isn’t significant. When looking at the five-year trends, the order backlog is approximately 30% above normal, and the inventory-to-sales ratio has decreased by about 10%. I expect this trend to continue through most of the fourth quarter. As capacity returns from the hurricanes, we are still facing supply and logistics challenges, resulting in bottlenecks, particularly with marine pack cargo and truck shipments. Currently, if a truck driver doesn't show up, shipments get delayed. I believe we will continue to experience this situation for the remainder of the year and into the first quarter.

I'm just giving you some Dow numbers. Our DSI was down 7 days in the third quarter versus a year ago, and our overall cash conversion cycle was better by a day sequentially. So we're tightly managing our working capital.

Thank you. Good morning. Jim, the consultants have a pretty sharp decline in ethylene chain margins through February. Do you agree with that or are they being a little too bearish given the tightness right now in the marketplace?

Good morning, David. I think they are a little bit bearish, the way I would categorize it. I think they are underestimating the demand that's going to be there because there still is a significant inventory restock and continued strong demand that we see coming. And I think they are overestimating how much supply is coming in. And if I go back to the China situation, remember that about half of those CTO/MTO capacities are out of the money right now. 60% of all the new capacity coming on in the world is in Northeast Asia, which will still be a net importer for a long time, and it's all naphta or higher cost base. And so I think those things are going to soften this. I do expect prices to moderate a bit, but I think we could see a pretty strong 2022 with higher volumes yet slightly lower prices. Operating rates were always going to be in the high 80s to low 90s for the full year. So I don't see a change there. And remember that the U.S. structural advantage, the Canadian structural advantage, our position in Argentina, and our position in the Middle East are still going to remain strong.

Hey, good morning and nice results. You said data sequentially tick up your buybacks here to that $400 million level in the third quarter. How should investors think about the pace of buybacks in 4Q and 2022?

Yes. Thanks. Frank, good morning. So the guidance we gave for the fourth quarter is 745 million shares outstanding. So if you look at where we ended the third quarter or the average for the third quarter, that's about a 5 million share reduction, which would equate to another 400 million plus or minus on stock buybacks, so essentially keeping pace with the third quarter. With that said, look, we continue to be disciplined and balanced on the capital allocation and we will continue to be opportunistic. We're staying true to our 65% of our net income going back to shareholders. Long-term 45% of the earnings growth will and the net income will go in the form of dividends. And then we'll use stock buyback to top that up to 65%.

Thank you. We see all the container ships out in the harbors and all the containers stacked up on the docks and the warehouses are full with drivers waiting to take product to the final customers. Your earlier comment was about polyethylene producer inventories. Do you worry about contained product downstream where it would seem like there's a lot of inventory in the channel downstream of the converters?

Good morning, John. It’s difficult to gauge visibility at the moment. However, I believe the recent actions taken by the government to enable 24/7 operations at major ports will help alleviate the backlog. When there’s congestion at these ports, it usually affects others as well. While we don’t rely heavily on Long Beach, any traffic overflow impacts us. Almost every value chain is feeling the effects, particularly when it comes to getting materials out. We are starting to experience congestion and competing demands for incoming products. In some cases, it’s quicker to reload empty containers back to China, which competes with other outgoing materials. This isn’t something we see every quarter, but it is noticeable on the west coast right now. Almost every value chain and application we handle is experiencing product shortages. I don’t believe that the amount of inventory currently floating or stored in warehouses is enough to meet the existing demand. The consumer remains strong, and there are other markets recovering from COVID that will contribute to this demand.

Good morning, everyone. It was a strong quarter. I'm interested in your thoughts about 2022, especially since you have positive market fundamentals for your three main segments. I'm also curious about your views on natural gas pricing, feedstock costs, and rising oil prices. How are you incorporating those inflation factors into your outlook?

So we're starting to see some improvement in production, drilling, and completion of wells. We're going to bring more NGOs as we move out of the winter season. I believe what we're seeing short-term here is a knock-on effect as coal really ratcheted much higher in China. The first fuel that you go to that could replace coal in the fuel grid is natural gas. And then LNG obviously went right up after coal. And then the next fuel is oil. And oil came right up. And so that could cost up to $80 a barrel. I think we're going to see things will stabilize a little bit as we go into winter. Inventories are a little light of the five-year average going into winter. But you've seen prices unwind a little bit in the forward market by about $1, a million BTU, because weather plays a significant factor. So if we have a warmer fall, that's going to take a little bit of sting out of natural gas prices. Even with them the oil to gas ratio, but more importantly, the oil to gas spreads are good. And so I think that's going to continue. And if we get through winter without a really, really cold snap then I think you're going to see prices to moderate. Long term or medium term, I would say $2.50 to $4.50 for U.S. production. And long term, about $2.75 a million BTU for natural gas.

Great. Thanks. Good morning. This is Mike Delay on behalf of Duffy. I have a two-part question for Howard. First, could you clarify Jeff's earlier question? Is the 2 to 2.5 debt target for gross debt to EBITDA based on net debt? It seems like you mentioned you want to pay down a bit more debt from this point.

On a debt to EBITDA ratio of 2 to 2.5, that's an adjusted target according to rating agencies. This is a long-term outlook. Typically, rating agencies consider a few years of past data, the current year, and then create a two-year forecast. When we refer to that 2 to 2.5 range, specifically targeting the midpoint of 2.25 in response to Jeff’s questions, that is evaluated over a 5 to 10 year span. As I mentioned to Jeff, we are currently at the higher end of that range, so you can expect that over the coming years, we will gradually work to bring that number down to the midpoint of 2.25. Depending on how circumstances develop, we may aim for the lower end of that range.

Hi, good morning, Jim. This is John. Question on your equity earnings from the GDs? It looks like each of your II&I and TNXP segments is on track to deliver around $0.5 billion of earnings. Now, quite a few unique regional dynamics and feedstock arrangements that play here but broadly, could you discuss where these businesses are in the cycle and perhaps any color on where you see the earnings of these businesses for the next year?

Yeah. Good question on II&I and Polyurethane, I do believe that the demand and the operating rates for isocyanates will continue to stay strong into next year. Maybe a little bit lower operating rates on polyols, but the key demand drivers and value drivers are going to be those systems and solutions that are going into things like mobility, like construction, like appliances, and some extent furniture and bedding and things that are driven by consumer growth. And that'll continue to remain strong. The only thing that we've got coming that would be a detractor from those earnings would be, we've got a turnaround in this quarter on isocyanates and Sadara. But that's been planned and they'll manage that. They've been running very well. I expect to see them in good shape next year. And as you know, their fixed costs are quite low. And so I think they will be a very good source for us to fulfill that demand.

Good morning. Two questions. In the period with the tighter supply constraints, have you seen a mix, be it net positive or negative across the portfolio? Or in other words, how do you see things playing out when the supply constraints ease? And secondly, with respect to the decarbonization, so long as you could see a path to hitting your return on capital hurdles, how broadly would you consider vertically integrating in decarbonization platforms?

On the mix, I think any time you get a tight situation like this, there's a natural gravitation for the mix to move up. I would also say though that we've been trying, customers are in close communication and we're trying to obviously to keep everybody running. There's a lot of juggling going on. There are some specialty grades where it's hard to shift the mix up because things are so tight right now, especially in some of our elastomeric products. On decarbonization, I think it's just going to depend on the situation in the geographies that we're looking at, the investments. In Canada, we don't need to do the bank investment into CO2 capture and sequestration. And I think there are a lot of players that are out there that have capabilities to do that. So if we can keep our investments focused on assets that generate revenue for us and generate growth for us and our zero carbon emitting, I think there's plenty of room for third parties and others to play to help us to handle the CO2.

Thank you. Good morning, everyone. I have a question about Slide 8 where you detail in-flight investments for 1.7 and 2.1 billion EBITDA contribution. In my math, this implies fairly high single-digit growth versus your base EBITDA. So can you give it a high level explaining why investors can have confidence in this target? What are you doing differently from traditional Dow's growth rate here? So anything that can at a high level explain why this growth is achievable.

I'll begin with silicones, which is a sector that is expected to grow at twice the GDP rate. Mobility, electronics, and consumer applications will continue to expand, along with our silicone products being used in construction, sealants, and glass glazing for large buildings. This indicates strong GDP growth in Industrial Solutions, not only delivering substantial returns from ethylene but also high-value downstream growth driven mainly by consumer applications. We are also seeing a recovery in the oil and gas sector, where our products help lower CO2 emissions in midstream production. Additionally, our ECOFAST Pure partnership with Ralph Lauren has allowed us to make a technology available that encourages textile mills using cotton to switch to a product that requires 90% less chemicals, 50% less water, and 50% less energy, promoting sustainability in a challenging environmental area. In the PM sector, our downstream systems have maintained growth exceeding 11% per year for a long time, and we will keep investing in them. Our downstream coating business has ambitious targets to meet demand, particularly in traffic and architectural applications, which are leading our growth. Packaging and Specialty Plastics are also growing faster than GDP, approximately 1.4 times it, according to our forecasts. The anticipated $3 billion of EBITDA growth over this period is fairly evenly distributed across all three segments, with about $200 to $300 million expected next year from projects that are either completed or nearing completion by year-end.

Very good. I think that's all the time we have for Q&A. Thank you, everyone, for joining our call. We appreciate your interest in Dow. For your reference, a copy of our transcript will be posted on Dow's website within the next 24 hours. This concludes our call. Thank you.

And again, that does conclude today's conference. We thank you all for your participation. You may now disconnect.