Greetings, and welcome to the Dow Fourth Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. I will now turn it over to Dow Investor Relations Vice President, Andrew Riker. Mr. Riker, you may begin.

Good morning. Thank you for joining today. The accompanying slides are provided through this webcast and posted on our website. I am Andrew Riker, Dow's Investor Relations Vice President. Leading today's call are Jim Fitterling, Chair and Chief Executive Officer; Jeff Tate, Chief Financial Officer, and Dow's recently appointed Chief Operating Officer, Karen S. Carter. Please note, our comments contain forward-looking statements and are subject to the related cautionary statement contained in the earnings news release and slides. 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 are contained in the earnings news release that is posted on our website. On Slide 2 is our agenda for today's call. Jim will review our fourth quarter and full year results; Karen will provide an overview of our operating segment performance; and Jeff will share an update on the macroeconomic environment and our modeling guidance for the first quarter. Jim will then provide details on the intentional actions Dow is taking to navigate the prolonged economic downturn and close out the call. Following that, we will take your questions. Now, let me turn the call over to Jim.

Thank you, Andrew. Beginning on Slide 3, there's a lot to unpack in our results this quarter, so let me first walk through the headlines. In the fourth quarter, Team Dow delivered our fifth consecutive quarter of year-over-year volume growth despite continued weak macroeconomic conditions. Net sales were $10.4 billion, which is down 2% versus the year-ago period and reflects pricing pressure seen across the industry in the quarter. Local price was down 3% year-over-year and sequentially with declines across all our operating segments. Operating EBITDA was $1.2 billion, which is approximately flat compared to the same period last year. Cash flow from continuing operations was $811 million, resulting in free cash flow of $44 million. Returns to shareholders totaled $492 million of dividends in the quarter, and our total CapEx spend was $767 million. As you saw in our numbers this quarter, we also had a non-cash tax adjustment impacting net income and EPS. Jeff will provide more details on that later in this call. Throughout the quarter, we announced additional actions that continued to support the optimization of our global portfolio for growth while maintaining a best-owner mindset. For example, we continued to ramp up operating rates at our Texas-8 cracker and Glycol 2 unit. We completed the sale of our flexible packaging laminating adhesive business to Arkema for an enterprise value of approximately $150 million. And we've designed a definitive agreement with Macquarie Asset Management for the sale of a minority stake in select U.S. Gulf Coast infrastructure assets for which we expect to receive cash proceeds of up to $3 billion. Driven by persistently weak global macroeconomic conditions, we announced a strategic review of select European assets, primarily in our polyurethanes business, where demand has been structurally challenged over the past five years, making it the highest cost region for several of our key businesses. We are also postponing a maintenance turnaround at one of our ethylene crackers in Europe. This decision will result in us idling this asset starting in the second quarter until market dynamics improve. And today we announced targeted actions to reduce our costs by $1 billion and our CapEx by $300 million to $500 million. Collectively, the additional actions are focused on reinforcing our long-term competitiveness as we continue to navigate this prolonged economic downturn. Turning to Slide 4. In 2024, Team Dow continued to advance both our near-term priorities and our long-term strategy to become a stronger, more innovative company. We delivered net sales of $43 billion, operating EBIT of $2.6 billion, and year-over-year volume growth of 3%, excluding merchant hydrocarbon sales. Earlier in 2024, we began construction at our Path2Zero investment in Fort Saskatchewan, Alberta. When complete, the project is expected to generate approximately $1 billion in incremental EBITDA annually by 2030. Dow is also recognized externally through industry-leading awards and certifications. Last year, we earned 12 Edison Awards for Innovation and was named one of the top 25 world's best workplaces by Fortune. Team Dow navigated several challenges over the past year, including weather-related and supply chain disruptions and continued uncertainty in many regions and markets that we serve. In response to evolving market dynamics and sluggish demand recovery in Europe, we demonstrated our best-owner mindset with more than 20 proactive actions to address higher cost assets. I remain confident in our company's ability to foster a sustainable future, achieve long-term profitable growth and enhance shareholder returns. Now, I'm pleased to turn it over to Karen S. Carter, Dow's Chief Operating Officer, who will provide an overview of our operating segment performance on Slide 5.

Thank you, Jim. I'm pleased to join you all today. And before I begin, I'd like to mention what an honor it is to be named Dow's Chief Operating Officer. I look forward to engaging with many of you, our owners, in the near future. In my more than 30 years at Dow, I have progressed through the organization to most recently leading PNSP, the company's largest operating segment. I have worked across a broad range of businesses and functions, including global leadership positions within the building and construction and consumer electronics markets, as well as Dow's polyethylene franchise. This has given me a deep appreciation for our company's competitive advantages, the strength of our innovation engine, and our commitment to delivering profitable growth. As COO, my priorities are to further strengthen our customer engagement, accelerate the commercialization of Dow's innovation pipeline, and enhance reliability and productivity. I am committed to driving business and operational results while progressing our strategic priorities to deliver long-term value for our shareholders. Now, let's move to our operating segment results. In the Packaging & Specialty Plastics segment, we entered the fourth quarter with a challenging backdrop of ample industry supply, high feedstock costs, and a typical seasonal slowdown in demand. Segment results reflected a decrease in local price both year-over-year and sequentially. This was primarily driven by lower functional polymers and polyethylene prices as a result of the October price decline reflected in the market indices and other competitive price pressures throughout the quarter. Despite higher demand for flexible food and specialty packaging in all regions except Latin America, volume for this segment was down 1% year-over-year. This was primarily driven by lower third-party hydrocarbon sales and non-recurring licensing revenue. Operating EBIT was $447 million, a decrease of $217 million compared to the year-ago period. This was primarily driven by lower integrated margins and licensing revenue. Moving to the Industrial Intermediates & Infrastructure segment. We benefited from strong global energy demand, as well as stable consumer and pharma demand. We also experienced typical seasonal improvements for deicing, while agricultural and coatings applications saw normal seasonal declines. Looking at fourth quarter results, local price declined 1% year-over-year, while volume was up 1% year-over-year. This was driven by improved supply availability in our Industrial Solutions business as we finished ramping up our Glycol-2 unit ahead of schedule. Those gains were partly offset by continued softness in the Polyurethanes and Construction Chemicals business. Operating EBIT for the segment increased $69 million versus the year-ago period. Results were primarily driven by higher operating rates and improved supply availability in the Industrial Solutions business. In the Performance Materials & Coating segment, volume was up 5% with strong gains across both architectural coatings and downstream silicones. We achieved this despite global weakness in building and construction end-markets as high-interest rates continue to pressure spending in residential markets. Operating EBIT increased $52 million compared to the year-ago period, driven by volume gains and lower fixed costs. Now, I'll turn the call over to Jeff, who will provide an overview of the macros and our outlook.

Thank you, Karen, and good morning to everyone joining our call today. Moving to Slide 6. While global GDP is expected to grow at similar levels to 2024, recent economic activity is primarily being led by the strength in service-related sectors. In contrast, global manufacturing PMI is at contractionary levels with output and new orders declining in December. Ongoing affordability challenges also continue to pressure spending in housing and durable goods sectors. These dynamics have created a two-speed economy, and we continue to monitor key indicators for signs of positive inflection in more challenged end-markets. Notably, this includes the pace of interest rate cuts in the U.S. and Europe and recent stimulus actions in China for any impacts on inflation as well as end-market demand. In addition, we are watching for any impacts from ongoing geopolitical volatility, including potential tariffs. Now looking across our four market verticals, in packaging, we continue to see demand growth, especially in North America with resilient domestic and export polyethylene demand throughout the year. In China, manufacturing activity remains tepid and overall demand in Europe continues to be soft. Infrastructure demand remains weak globally, particularly in residential construction. In the U.S., mortgage rates are now back up above 7%, representing the highest level since May despite lower Fed interest rates. This is driving ongoing affordability issues with U.S. building permits remaining below their three-year average. China new-home prices also declined year-over-year for the 18th consecutive month. Consumer spending continues to be constrained by persistent inflation in the U.S. and Europe with consumer confidence levels declining in December. In China, overall retail sales were up in December, although year-over-year growth in furniture sales decelerated from the prior month. And in mobility, higher auto sales in the U.S. and China were driven by discounts to clear elevated inventories and government stimulus actions, respectively. We also saw new car registrations in the EU decline 13% in the second half of 2024 compared to the first half of the year. Now turning to our outlook on Slide 7. We expect first quarter earnings to be approximately $1 billion, down $200 million quarter-over-quarter. This is largely due to higher anticipated feedstock costs, which have increased due to the severe cold snap. We expect this to pressure margins as we start the quarter. We will also have higher plant maintenance activity in the first quarter across our three operating segments, but expect full-year plant maintenance activity to be roughly in line with the prior year. In addition, we anticipate our operational tax-rate to be in the range of 25% to 29%, in line with our historical rates. This reflects an improvement versus the fourth quarter, which was elevated largely due to higher than expected non-cash tax adjustments. These tax items were primarily related to Argentina, which was amplified by inflation. Audit remeasurements and currency were also drivers for the fourth quarter tax-rate. Next, I'll turn to our outlook and first-quarter guidance by segment. In Packaging & Specialty Plastics, we expect higher feedstocks and energy costs to outpace price increases from a timing perspective in the quarter. As a result, global integrated margins are expected to be lower sequentially. In addition, we anticipate headwinds of approximately $50 million from higher planned maintenance activity, primarily along the U.S. Gulf Coast. In the Industrial Intermediates & Infrastructure segment, we anticipate lower margins in our polyurethanes business from higher energy costs as well as lower catalyst sales in our Industrial Solutions business. In the quarter, we have planned maintenance activity scheduled at our ethylene oxide asset in Freeport, Texas, which will enable the start-up of additional alkoxylation capacity in the U.S. Gulf Coast. This new capacity is one of the near-term growth investments we outlined at our last Investor Day and should support higher sales beginning in the second quarter. In the Performance Materials & Coating segment, building and construction end-markets remain soft with high mortgage rates in the U.S. and sector weakness in China continuing to weigh on demand. However, we expect the seasonal demand uptick in first quarter to provide a tailwind of approximately $75 million. In addition, our regular yearly maintenance at our monomers assets in the U.S. Gulf Coast is expected to be a sequential headwind of approximately $25 million. On a final note, last week the U.S. Gulf Coast was impacted by a powerful winter storm. Our manufacturing sites have managed well, but we continue to monitor any further developments both at our sites, as well as across the industry. The current guidance does not include any impact favorable or unfavorable stemming from the storm. Now, I'll turn the call back over to Jim.

Thank you, Jeff. On Slide 8, in the midst of the prolonged downturn and slower-than-expected economic recovery that our industry is experiencing. Now it's taking several key actions to further reduce our costs and reinforce our long-term competitiveness through the economic cycle. First and foremost, we're taking additional targeted actions aimed at improving our margins. We announced today that we will implement cost reductions of $1 billion on an annual run-rate basis by 2026. These actions will be primarily focused on third-party contract labor and purchase services. In addition, we are targeting the elimination of approximately 1,500 Dow roles. Last quarter, we announced that we would kick-off a strategic evaluation of our European asset footprint, and we're on track to provide an update on this work by mid-2025. Lastly, as we complete our in-flight higher return growth projects this year, we're also taking actions to preserve our strong financial foundation. We intend to recalibrate our CapEx deployment to match the current demand and macroeconomic conditions and we'll do so by reducing our 2025 spending by $300 million to $500 million compared to our previously disclosed target of $3.5 billion. We will keep CapEx spending roughly at these levels until we see a clear recovery materialize across broad portions of the end-markets that we serve. Turning to Slide 9. We continue our ongoing practice of reviewing our global portfolio. Last month, Dow entered into a definitive agreement to sell a 40% equity stake in select infrastructure assets to Macquarie Asset Management, a leading global infrastructure investor. We anticipate the transaction will close by mid-2025. This newly formed infrastructure-focused company named Diamond Infrastructure Solutions is comprised of assets that support a wide range of services at five of Dow's manufacturing sites along the U.S. Gulf Coast. The new company will operate within Dow and has a dedicated management team with priorities in support of Diamond Infrastructure Solutions strategy. Importantly, Dow will maintain operational control to ensure our standards for safe and reliable operations are upheld. This transaction is expected to generate approximately $2.4 billion of initial cash proceeds for Dow. Macquarie Asset Management has the option to increase their minority equity stake to 49% within six months of closing, which would increase cash proceeds to approximately $3 billion for Dow if exercised. The long-term partnership leverages Dow's operational excellence and Macquarie Asset Management's world leading infrastructure positions to generate incremental operational efficiencies, as well as future growth opportunities with existing and new customers. With enhanced financial flexibility from this partnership, Dow is in a strong position to continue to invest in growth and deliver enhanced returns to our shareholders, particularly as market conditions improve. Closing on Slide 10, as we navigate a challenging near-term environment, we are committed to a disciplined and balanced approach to delivering our cash and capital allocation priorities. Our ability to proactively manage in an extended economic downturn will position Dow well for long-term success. As I mentioned earlier, last week we postponed a maintenance turnaround at one of our ethylene crackers in Europe. This decision will result in us idling this asset starting in the second quarter until market dynamics improve. This reduction in planned turnaround spending will keep 2025 turnaround spending levels in line with the prior year. We will continue to match supply with profitable demand until margins improve. We continue to take proactive strategic actions to optimize our global footprint, drive operational performance and reduce our costs and capital expenditures. In 2025, our additional cost actions and reduced CapEx spending will help us to enhance near-term cash flow, margins and earnings growth while remaining committed to our long-term strategic priorities. In addition, our signed agreement with Macquarie Asset Management further strengthens Dow's financial flexibility and the potential to generate up to $3 billion in cash proceeds in 2025. This transaction is consistent with Dow's best owner mindset and track record of delivering unique to Dow cash-flow levers to mitigate cyclical volatility. We're optimistic that we will continue to see demand growth in attractive end-markets such as packaging, energy and electronics. And once completed, our near-term growth investments, representing higher-return and quicker payback projects will enable improved underlying earnings and margins across the cycle. With a differentiated portfolio and proactive actions to support our solid financial foundation, we are confident in our ability to deliver on all of our capital allocation priorities, including our industry-leading dividend. At the same time, we will continue to maintain our focus on operating and financial discipline to drive long-term shareholder value to ensure that we remain well positioned for the cycle recovery. With that, I'll turn it back to Andrew to get us started with the Q&A.

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

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

Just before we get to the first question, I wanted to make a few brief comments about the tragic incident that occurred near Washington, DC, last night. We were saddened by the news of yesterday evening's passenger plane crash. As a company with values centered on people, our hearts are heavy for all those who have been affected by this tragic event. Our thoughts and deepest sympathies are with the passengers, crew members, and their families during this incredibly difficult time. Operator, do we have the first question?

Thank you and good morning. Jim, if I could just ask you to revisit the three bridge items we talked about on the last call, one of which was sort of operating rate or macro improvement. The second was on the year-over-year delta and planned maintenance, which sounds like it's going to be neutral now. And then third was just sort of the startup of Dow projects that were going to contribute. So if you could just update us on where you see those for 2025 at this point? Thank you.

Good morning, Vince. Thank you. Both on operating rate, I would say in fourth quarter, we saw some improvements in overall company operating rate, but on industry operating rate we're still not in an expansionary level yet. Europe has been a big weight on that. Europe continues to be for the industry, about 20% below pre-COVID levels across the board. If you get into other sectors like housing-related polyurethanes, it can even be lower than that. I'd say the operating rates in the Americas continue to be relatively strong. So you're talking about high 80s, low-90s percent types of operating rates. The ethylene chain is stronger than the propylene chain; housing and automotive drive a lot in the propylene chain, and downstream silicone is obviously doing better than siloxane. So siloxane rates are a drag on it, mainly from capacity adds in China. Year-over-year, we've trimmed things. Obviously, it won't show up in first-quarter, but we're targeting to be flat year-over-year on turnarounds and that was a big part of the decision to defer the maintenance on one of the crackers in Europe. Probably people don't realize that we have kind of an integration between the materials. And so in addition to managing the ethylene part of the chain, we have to balance the propylene part of the chain as well. Deferring that maintenance will allow us to save some costs this year. It will also tighten up things from a balanced standpoint around the region. So we think that will be a net positive. And then the startup of the Dow projects in this year, we have several projects that are in-flight. We have projects in polyethylene, which are on-track to start up by the middle of the year. We have a couple of projects in Industrial Solutions that are on-track to start up. Longer-term, we've got our Path2Zero project in Alberta, which is still on schedule for the end of 2027.

Hey, good morning. I guess what we've heard so far is 2026 overall macro or demand? Unfortunately, it doesn't seem like it's going to be much better than 2025. I mean 2025 versus 2024, sorry. You've got some headwinds here for higher feedstock costs in energy. You've got some cost-savings. So if demand is unfortunately similar in 2025 versus 2024, I mean, directionally, should EBITDA be up, down, or flat? I mean, how do you sort of look at that this year?

Good morning, Michael. Good question. On 2025 versus 2024, obviously, a big part of the $1 billion of cost actions we're taking are to underpin improved EBITDA in 2025. So we've got volume growth, and I mentioned the projects that we'll have starting out this year, which all of them will be able to be sold out and be accretive from the point that they start up. So you'll have that. We're obviously not counting on a tremendous amount, although we've shown five consecutive quarters of volume growth. So we're still going to keep taking advantage of our low-cost position and get our share. But I think pricing power is the real question and that's the reason for the cost action is to underpin the improvement in EBITDA. I would say you also have to think about the markets and a lot will depend on demand in the markets. In Packaging & Specialty Plastics, well, I'd say in the ethylene chain, in general, Packaging and Specialty Plastics and ethylene oxide derivatives have continued to be strong. You see that strength in Industrial Solutions. You see that strength. Although we had some pricing slip in the fourth quarter, overall, we see that strength in the integrated margins of Packaging and Specialty Plastics. So I think that will continue to be a positive sign. I think we'll continue to take the actions that we need to take in Europe to tighten things up there. I don't want to be doom and gloom about Europe, but I think we have to be realistic that downstream demand is not coming back. So, we're going to have to take actions there to tighten things up. And then, of course, cash, we're going to manage very carefully, which is why you saw the CapEx reductions that we announced to try to stay in a better cash flow position and keeping our dividend strong is one of the number one priorities.

Good morning, Jim. A question on PNSP. I'm just trying to sort of reconcile the guidance that you guys gave and what sort of polyethylene pricing you guys are baking in there? You're clearly looking for a bit of a margin squeeze over there and we have a variety of polyethylene price hikes on the table in the U.S. contract-wise. And obviously, ethane prices have gone up as well. So I guess a two-part question, what polyethylene prices are you baking in? And what sort of ethane pricing environment are you baking in?

Hassan, great lead-in for me to welcome Karen to the call and ask her to cover PNSP in those two parts.

Yes, good morning, and thank you for the question. I think it's important to go back to the fourth quarter and really look at what happened from a pricing perspective. As you know, we saw market prices go down in October by $0.03 per pound. And then prices continued to decline throughout the quarter, really driven by not market moves, but also contract resets that occur generally at that time of the year. We are coming into 2025 with low prices. But at the same time, as you indicated, we saw input costs increase almost immediately as we got into the year. So we do have $0.07 to $0.12 per pound on the table for price increases in the fourth quarter, $0.07 in January and $0.05 in February. And as you indicated, we are seeing both ethane and natural gas costs come up. Those costs are outpacing the rate at which price increases are being implemented. But I just want to reiterate that it is really important that we are going to stand firm on our price increases. Margins have reached a place that they are unsustainable. So you should expect to see that we are going to be resolute in getting those price increases through.

I believe that in the short term, we often see cost increases at this time of year when winter first arrives, which serves as a reality check for everyone. These costs typically ease as the quarter progresses into the second quarter. Natural gas production remains robust at 106 billion cubic feet per day, and we expect that to continue. The ethane frac spread is at $0.50 per million BTU, which is a solid rate. Additionally, the propane naphtha advantage has slightly declined in the latter part of the year in Europe, but I anticipate it will begin to recover somewhat, though not significantly. This situation emphasizes the need for a balanced approach in the cracker fleet operations in Europe.

Thank you very much. The global polyethylene market is currently oversupplied. Together with CP Chem, you are planning to add another GBP8 billion in North America, and Dow is set to contribute half of that by 2030. Is your intent to proceed with these additions, or do you plan to shut down your European operations to ensure there is no net increase? Looking at Lyondel's results in Europe, they are not generating any profit. I suspect they are earning very little, and I assume your situation is similar. So my first question is whether you truly plan to have a net increase, or will you offset new additions with closures? And for Jeff, what happened to the cash flow? It's a couple of billion dollars lower compared to last year, while EBITDA remains flat. Is this a one-time occurrence? Additionally, how many shares will be issued for management compensation this year, increasing the overall share base? Thank you.

Jeff, thanks for that. I'll take the first part on ethylene and then I'll have Jeff comment on cash flow. So on supply-demand, I think it's important to remember that what we're adding in Alberta is 2 million metric tons of zero Scope 1 and 2 emissions, ethylene and derivatives and will convert 1.5 million tons to zero emissions. So 3.5 million tons of zero Scope 1 and 2 emissions ethylene. We're in negotiations now positively moving forward with customers for the offtake for that material. So it is a different part of the mix than what's available today. I do think your point is valid. We're seeing actions in Europe across the industry, which would depend towards reducing capacity in Europe, which is high-cost. There haven't been any signs. I mean, there's been a lot of good discussion in Europe around the Draghi report and competitiveness, but there have been no actions that indicate that energy costs or competitive positions are going to improve. So I think you're going to see some contraction there. And I think we have to look around the world at places that are not cost-competitive and tighten up there. Our investments are in cost-advantage regions. Like we said in Alberta, you're talking about putting a cracker in the first quartile that has zero Scope 1 and 2 emissions. There's nothing of that scale anywhere in the world for those brand owners and those customers who want that product. Jeff, do you want to cover the cash flow?

Yes. Thanks, Jim, and good morning, Jeff. Yes, a couple of things here on the cash flow. In the fourth quarter, we did generate $800 million in cash from operations. Our cash conversion rate was approximately 67%. One of the things that we did intentionally do in the fourth quarter is because of our first quarter 2025 on heavy turnaround activity, we did purposely and intentionally build some additional inventory, especially as some of those turnarounds are going to be in some of our high-growth areas from a business perspective. So some of that was very intentional, Jeff, in terms of the build of the inventory that we saw. In addition to that, we continue to maintain a really strong cash conversion cycle that we've taken out eight days since last year, and we continue to be very disciplined in our approach to maintaining that ability to not only get the eight days out, but look for opportunities to get maybe another one or two days moving forward.

Thank you. Good morning. Jim, on the cost-savings you announced today on the direct costs, are those permanent or are they somewhat temporary? And of the 1,500 roles that are being reduced or eliminated, what regions are they? I presume mainly Europe and what businesses and functions are they attached to? Thank you.

Good morning, David. On the cost saves, we're trying to get the structural costs down and keep them at a low level. So we're trying to make them as permanent as we can. It's about 75% third-party cost saves. It's about 25% direct, which is a little bit lower on the direct percent than typical. I'd say on the third-party cost saves, we feel pretty good about our ability to get that done. We expect to be at about a 60% run-rate by the fourth quarter and full run-rate by mid-next year. Regions, I would say it's a combination of regions and functions and businesses. So regions that are under economic pressure, obviously, Europe and Asia is a focus of functions where we've not seen productivity improvements is a focus. We haven't announced a lot of site closures here. Our European asset review is still underway. We'll have updates on that by mid-year. But this is not loaded with site closure costs or anything like that, which is why the recharge is relatively nice.

Thank you very much for the opportunity. I would like to revisit the full-year expectations. Are there any additional specific items, aside from the maintenance expenses that are expected to remain unchanged year-on-year, such as the advantage of having the EG2 unit operational for the entire year, that could either support or pose challenges for 2025 compared to 2024? Additionally, could you elaborate on the polyethylene price increases you mentioned earlier? Specifically for January, how do you anticipate the non-market adjustment from certain trade publishers will influence realizations in January in comparison to December, relative to the proposed contract price increases?

Yes. Let me address the first part of your question regarding the full-year outlook. We need to consider some key factors as we assess this. Following that, I'll have Karen discuss polyethylene prices. We anticipate that first-quarter margins will be tight, but I expect an improvement towards the end of the quarter as polyethylene prices stabilize and feedstock costs decrease. We could see quarterly performance in the range of $1.4 billion from the second to the fourth quarter, which aligns more closely with last year's results and the current market conditions. We have identified about $300 million in cost reductions today and are focused on growth opportunities. Texas 8 is ramping back up, and our Glycol-2 unit is fully operational as of the fourth quarter, which will be reflected in our results. We're hopeful for some positive contributions from GDP growth. While we face some pricing pressures in Packaging & Specialty Plastics and turnaround activity, the overall full-year turnaround numbers should remain stable. Karen, could you elaborate on pricing expectations, particularly regarding the non-market aspects?

Yes. So in the first-quarter, a little bit of what we saw in December is we'll continue to see some contract resets, but then also we also expect to see some non-market moves as well. But I think the key thing as you think about first-quarter from a margin compression perspective is really that those feedstock costs are outpacing the rate of price increases. And so, if you think about it this way, we have price increases that we are going to implement over the January and February timeframe, but the higher feedstock costs occurred right at the beginning of the year. You are right, we will continue to see some market non-market moves, but again, a few more contract resets as we continue to grow our share on our volume. The other headwind that Jim just mentioned is that we are going to have a few more turnarounds on the energy side, but also in functional polymers.

Yes, hi, good morning. I was wondering if you could talk about the risk and potential mitigation activities you could do around tariffs, specifically around Canada. I mean, I think I assume that a lot of the tons from your facilities in Canada come into the U.S. versus export markets. I guess, first, can you clarify what that mix is? And if that is right, what can you do to mitigate the impact or how do you plan around this?

Yes, good question, Josh. I mean, I think the most important thing is what we're doing right now, which is engaging with the administration on providing data for ourselves and also for the industry to understand the situation. We're starting to see every day more refinement on what's happening. I think it's pretty clear in the near term that the discussion is around getting control over immigration and the flow of fentanyl into the United States. We're relatively balanced with Canada. We trade both ways with Canada, a little bit more coming into the U.S. from a finished product standpoint, but we've got product that moves both ways. So trying to just have an overall picture of what the energy complex and the petrochemicals complex looks like there so that we don't create unintended consequences. I don't think it's the administration's view to do something that's going to hurt the global economy. I think they want to try to create the situation where we continue to have growth in investment here.

Great. Thank you so much. Jim, I just want to dive a little deeper. I think we discussed it last time, just how you're thinking about some of the EU assets by country. I think last summer you were going over the Netherlands and Germany. There are a lot of strategic reviews going on in Intercontinental Europe right now. Just trying to think about the larger picture in terms of these developments and how they're panning out over the next several years. Thank you.

Sure. That's a great question, Chris. If you look at the EU, obviously, the number one challenge is energy competitiveness. Spain has a pretty decent advantage right now from an energy standpoint. So there, we're looking with our partners at Repsol to reduce the combined cost between us on operations in Spain. When you get to the Netherlands, while we announced the idling of a cracker to avoid turnaround cost this year, I don't want you to assume that that's the answer to the European strategic review. The Netherlands has been pretty competitive throughout, and our cost positions have been good there. We just have to look at the market for ethylene. We're a net merchant ethylene seller; we got to look at those balances and the propylene market and balances will drive what we decide to do there. The Netherlands as a country is still very focused on energy and discussions recently. They still have a focus themselves on adding nuclear power generating capability, which I think is going to help them with their energy costs. On Germany, a lot is going to depend on this election at the end of February. I think it's shaping up that there will be a change in the German government. If you look at what happened post-COVID, Germany moved fast to take action when the Russian supply on gas was stopped and now has five LNG import facilities operating, which really shifted the balance on LNG imports. However, the LNG import costs are $10 to $15 a million BTU into Europe. Longer-term, we have to look at what else can we do in Germany structurally to get the cost down. I think it's going to require state action to make that happen. I don't think the EU will do something that drives this. I think it's going to require the states pushing back, and there's no state that has more heft in this discussion than Germany.

Thank you. Good morning and congratulations, Karen, on your new role. Jim, I would like to ask about the III segment regarding the first quarter. You're mentioning $100 million in sequential headwinds, primarily due to one-off events, not including higher energy costs. Could you share your observations on the business pace between the polyurethanes and Construction and Industrial Solutions segments? Many expected the U.S. Gulf Coast freeze would greatly benefit your de-icing business. So, absent these one-offs, what is truly happening in those businesses as we consider the first quarter?

Karen, why don't you unpack that?

Yes, no, thanks for that question. So if I look at the first-quarter and I'll take polyurethanes and construction chemicals first. We're not really seeing any signs of demand recovering despite the interest-rate cuts in the U.S. and Europe. We have several applications in that business that are really sensitive to interest rates, whether you're talking about betting and furniture but also in housing applications as well. If you think about U.S. home affordability, it remains at its historic lows, but also interest rates are above 7%. We also saw in the fourth quarter automotive start to slow. From a U.S. perspective, those inventories are at 10-year highs. That's one reason that we announced a strategic review of our European footprint, where we're looking at polyurethanes in particular. Overall demand in DIS remains stable, and we're seeing some green shoots in global energy and pharma demand, which is good for us. De-icing, as you indicated, is a seasonal tailwind, so we'll see if the cold weather continues to persist. One notable point in the first-quarter around DIS is that we do have increased turnaround where we're taking our unit down in Seadrift. So that will result in a tailwind for us. Overall, I would say on the polyurethane side, just continuing to see challenging market demand and macros. But on the Industrial Solutions side, with the continued ramp of Glycol-2 that's back, we should see a tailwind there. Some of that is being muted with the turnaround we see in the first quarter.

So I would just add, Frank, on automotive, the shape of automotive last year was a pretty strong start to the year in terms of production units. You saw automotive, I think being positive as we moved through the middle of the year and then towards the end of the year, a lot of pull-down in inventory in automotive. Dealer discounts and things happening, you saw China moving a product in advance at the end of the year because they wanted to get ahead of tariffs. I don't know, but we could see something similar happen this year where automotive starts strong again. We just have to keep an eye on what happens with inventories there and demand in the automotive sector.

Hi, good morning. On the lower siloxane pricing environment, which is impacting PMNC, are China oversupply issues getting better or worse into 2025? And with the focus on more downstream specialties, would you anticipate taking any further actions on upstream assets or do you anticipate others to take action on capacity here?

Good morning, Patrick. Good question. I'd say it's getting better, but the pace of getting better is slow. The business is taking a look at the upstream side and what they want to do in that space. The downstream demand has been good, Karen, maybe make a few comments about how you see things there.

Yes, so thanks, Jim. I mean, downstream continues to grow for us quite significantly. If you look at the last quarter, we grew above GDP, and we expect that to continue as we get into 2025. We are seeing really good downstream growth in our markets like electronics, but also in home and personal care. On the upstream, as you indicated, we did see pretty significant capacity additions, primarily in China in the 2022-2023 timeframe, that have slowed significantly. But we're continuing to see an overcapacity situation there. Overtime, though with the higher than GDP growth in those end-market segments, we expect it to come into balance, but we are staying squarely focused on continuing to grow those downstream applications in silicones.

Yes, thank you and good morning, everyone. Jeff, I was wondering if you'd walk through your view of non-operating sources of cash flow and uses in 2025, specifically, I'm thinking about after-tax cash proceeds from your infrastructure deal. I think you have some pending litigation with Nova, if I'm not mistaken. And then any cash sources or uses associated with your new restructuring announced today as well as the strategic review of your asset base in Europe and other items you may care to call out? Thank you.

Good morning, Kevin. Yes, if you look at our cash flow for 2025, a couple of things to consider here. If you take whatever the expectations are from an EBITDA perspective for the year, I would assume right now an approximately 70% cash conversion rate over the course of the year. We just provided a guide on the CapEx now in the range of $3 billion to $3.2 billion. On average midpoint there, $3.1 billion. The dividend, I would make the assumption there at $2 billion. As we mentioned on the call, from an infrastructure proceeds perspective, that could be anywhere from a minimum of $2.4 billion up to $3 billion during the course of the year. Our net interest expense guide is approximately $600 million on a full-year basis. We are continuing to make good progress on the Nova judgment situation there, and we should have more to say about that throughout the course of the year. I would say, Kevin, those are the primary puts and takes as you think about the cash flow walk from the beginning of the year through the end of 2025.

Thank you. How much EBITDA is involved with the new JV with Macquarie? And your minority interest for 2024 was only $85 million. If Macquarie goes to 49%, how high does that minority interest line-item go to?

Good morning, John. I'll take that one. This is Jeff. There is no EBITDA impact because this enterprise will be consolidated as part of our normal reporting results. The impact will be more on the non-controlling interest line once the transaction closes. The dividend impact on the cash flow statement will be the other sizable change that you will see over time. We'll have more guidance to share once the transaction closes, and you'll be able to quantify the potential impact of that at that particular point. We expect the transaction to close by mid-year.

Yes, good morning. Two more questions on cash flow. So, Jeff, I think you talked earlier about building some inventory for your planned turnarounds in the first half, but working capital ate about $0.5 billion last year when sales and COGS were down pretty meaningfully. So how much release do you think you can get on a full-year basis from working capital this year? And then the second one is that, the other assets and liabilities line was a negative $1.1 billion in cash flow last year. What's in that? And does some of that come back eventually?

Sure. Good morning, Duffy. In regard to the first question around working capital, right now for 2025, we would make the assumption of a use of cash in the $300 million to $400 million range on a full-year basis. If we look at the other liabilities line, and assets, we're down about $900 million year-over-year, and that's really primarily driven by some of the long-term tax payables and related tax audit reassessments that we had throughout the course of the year.

Great. Thank you. Good morning, guys. I'll probably just put a bow on the cash questions. There's obviously been a lot of investor focus lately around the dividend, just given the ongoing trough in your current cash generation. Dow is obviously quite proud of maintaining an industry-leading dividend based on your earlier comments and some of the actions you're taking to free up cash. So can you maybe just lay out why Dow believes maintaining this level of dividend is sort of the best priority of cash here versus, say, using that cash for balance sheet support or even further organic growth investment?

I'll take a shot at it and I'll ask Jeff if he wants to add anything, but north of 65% of our owners count on that dividend. We listen very carefully to what they want to see. We have a lot of experience on how important the dividend is to our shareholders. That's why it's a top priority for us.

Yes, the only thing I would add, Jim, is that we don't have any substantive debt maturities due until 2027. The ones that we have in 2025 are approximately about $0.5 billion, we're in a good position to be able to support on those debt repayments during the course of this year.

Thanks. Good morning, everyone. I wanted to clarify if your $1 billion cost-reduction target includes the European actions that you will be discussing in the middle of 2025, or would those European actions be in addition to the $1 billion?

You'll have them in addition. I think there are some things that will probably have a little bit of overlap, but the asset discussions will be in addition to what we've just announced.

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.

Ladies and gentlemen, that concludes today’s meeting. Thank you for your participation. You may now disconnect.