Dow at J.P. Morgan Industrials Conference: Strategic Moves Amid Down Cycle

On Thursday, 13 March 2025, Dow Inc. (NYSE: DOW) presented at the J.P. Morgan Industrials Conference 2025, focusing on financial discipline amidst challenging market conditions. Led by CFO Jeff Tate, the company outlined strategic actions to support cash flow and adapt to market realities, while maintaining a commitment to its dividend. Despite macroeconomic headwinds, Dow’s proactive measures aim to strengthen its position.

Key Takeaways

• Dow announced a $1 billion debt issuance and plans to sell a minority stake in U.S. Gulf Coast infrastructure assets.
• A $1 billion cost reduction program is underway, targeting productivity and operational efficiencies.
• The Path to Zero project in Alberta is expected to add $1 billion in incremental EBITDA annually.
• Dow remains committed to its dividend, despite challenging economic conditions.

Financial Results

• Debt Issuance: Dow issued $1 billion in senior unsecured notes.
• NOVA Judgment: Expected recovery surpasses previous estimates of $500 million, impacting 2025 cash flow.
• Cost Reduction Program: Targeting $1 billion in savings with full implementation by 2026, including a reduction of 1,500 roles.
• Capex Reduction: Planned spending cut by $300 million to $500 million from the previous target of $3.5 billion.
• Macquarie Asset Management Agreement: Anticipated to generate $2.4 billion in initial cash proceeds, with potential to increase to $3 billion.

Operational Updates

• Asset Actions: Over 20 actions since 2023, including shutting down a propylene oxide unit in Texas.
• European Operations: Volumes remain 20% below pre-COVID levels, with energy costs significantly higher than in North America.
• Path to Zero Project: Construction in Alberta is on track, with government incentives expected to exceed $1.5 billion.

Future Outlook

• Macroeconomic Perspective: Demand remains soft with stable global manufacturing PMI around 50.
• Strategic Priorities for 2025: Focus on capital allocation and optimizing global footprint, especially in high-cost regions like Europe.

Q&A Highlights

• NOVA Decision: Recovery amount is higher than expected, with legal expense reimbursement.
• European Asset Footprint: Strategic review underway, particularly for energy-intensive, commoditized products.
• Macquarie Venture: Expected to close in Q2 2025, with an option for additional equity stake.
• Alberta Project: Positive customer conversations, with potential premium not yet included in financials.

For more detailed insights, readers are encouraged to refer to the full conference call transcript.

Full transcript - J.P. Morgan Industrials Conference 2025:

Jeff Sokoskis, Analyst, JPMorgan: Hi, good morning. I’m Jeff Sokoskis. I analyze chemicals for JPMorgan. It’s my pleasure this morning to introduce the management of Dow Chemical. And representing Dow is Jeff Tate, who is the Chief Financial Officer.

Jeff is a longstanding Dow executive, though he took a break for a few years and went to Leggett and Platt to be CFO. And he’s back and he’s been back since late twenty twenty three, and we’re very pleased to have him. The format we’ll have is roughly a fireside chat, but I think Dow may have a few slides to go through first. Jeff, welcome.

Jeff Tate, Chief Financial Officer, Dow Chemical: Great. Thank you, Jeff, and it’s really nice to be here. And I’ll just go through just a few comments before we jump into the Q and A. The first thing I really want to start with is the fact that Dow continues to emphasize our commitment to financial discipline. And if we go to the first slide here, the thing that we really want to focus on is we have a strong financial foundation.

And our capital allocation priorities remain consistent with safety and reliability and Dallas industry leading dividend being at the top of the list. Now as we continue to operate through this prolonged down cycle, our teams are taking strategic, proactive as well as intentional actions to support our cash flow and align our businesses to the current market realities. For example, last month, we issued $1,000,000,000 in debt neutral senior unsecured notes at very attractive spreads, further extending our debt maturity profile. We also signed a definitive agreement with the fund managed by Macquarie Asset Management for the sale of a minority stake in select U. S.

Gulf Coast infrastructure assets. And I’ll unpack that a little bit more as we get into the conversation. But today, I’m also really, really pleased to share that we have recently received confidential draft decisions around our NOVA judgment. And that’s something that’s really important to us. There will have to be some more calculations made to determine the final damages awarded to Dow, but we’re extremely confident that the total amount significantly surpasses our prior expectations of approximately $500,000,000 and it will be a 2025 cash flow item for the company.

Now we expect that a public decision will be released in the coming weeks and we’ll share more related to this at this time. Now the positioning of this particular case allows us to recover our costs from a decades long legal process, creating an additional cash tailwind for Dow in 2025. So next, I’ll share some details on the actions we’ve outlined in our last two earnings calls. Moving to Slide three, at our fourth quarter earnings call, we announced an additional $1,000,000,000 in targeted cost actions focused in areas like productivity, third party spending and a reduction in approximately 1,500 DAO roles. Now we’re making really good progress and expect to deliver $300,000,000 of benefit in 2025 and expect to have full implementation in 2026.

Now this builds on our $20.23 $1,000,000,000 cost reduction program, which included a structural reduction of approximately 2,000 Dow rolls at that time. So together combined, these programs will result in a nearly 10% Dow workforce reduction compared to year end 2022. In addition, we remain committed to continuously reviewing our asset footprint and matching supply to profitable demand. Doing so is consistent with our best owner mindset, which you’ve heard us talk about quite often and has led to more than 20 asset actions since 2023. Now this includes shutting down our propylene oxide unit in Freeport, Texas in the second half of this year to reduce lower value merchant PO and derivative exposure.

And we plan to provide decisions from our strategic review of our select European assets at our first quarter earnings call in April. Now collectively, these asset actions represent things that must be done at the bottom of the cycle, Because when demand picks up, which it will, Dow will be well positioned to achieve higher earnings from the improved cost competitiveness. Now to support the near term cash flow, we have also recalibrated our CapEx deployment by reducing our planned 2025 spending by $300,000,000 to $500,000,000 compared to our previously disclosed target of $3,500,000,000 And we’ll keep our CapEx spending roughly at these levels until we see clear recovery materialize across broad portions of the end markets that we serve. And finally, our signed agreement with Macquarie Asset Management, which is expected to close in the second quarter of this year, is consistent with our track record of delivering unique to Dow cash flow levers to mitigate cyclical volatility. Now we expect to generate approximately $2,400,000,000 of initial cash proceeds and Macquarie Asset Management has the option to increase their minority equity stake to 49% within six months of closing, which would increase the total cash proceeds to approximately $3,000,000,000 for Dow if exercised.

Now our collective actions support Dow strong relative performance. And as you can see on the right of the slide, despite continued macro weakness and our unplanned events in 2024, Dow was able to outperform our competition in both three year average operating EBITDA margin at a company level, as well as on a per pound of polyolethic capacity at a Packaging and Specialty Plastics segment level. Now this enabled this is enabled by our cost advantage footprint in The Americas and our on purpose built feedstock flexibility around the globe. So these were some of the bright spots in the portfolio, but there were also areas where we continue to to face pressure. Notably, those exposed to key end markets like durable goods, automotive as well as building and construction.

And we’ll share more at our first quarter earnings call when we publish our annual benchmarking report. Moving to the next slide. From a macroeconomic perspective, demand remains soft. The economic deceleration that began in the second half of last year across most regions as well as end markets is persisting into the first quarter with no signs of inflection, at least through February. Global manufacturing PMI remains stable around 50, five-zero, but was in contractionary territory for five of the last eight months.

In addition, the housing market continues to disappoint both in The U. S. As well as China. Now we’re also monitoring the impacts of a reacceleration of inflation and the potential for tariffs on consumer confidence, which recently saw its largest drop in The U. S.

Since August of twenty twenty one. Now the reality is our industry continues to experience margin pressure globally, which is largely driven by higher energy and feedstock cost in both The U. S, Gulf Coast as well as Europe. The elevated levels of feedstock and energy are persisting throughout the quarter contrary to our initial guide expectations. The price increases we’ve announced for March are necessary to offset the continued pressure from input costs while providing high quality products and services to our customers.

In addition, the first quarter guidance that we shared in January did not include any impact from recent winter storms in The U. S. Gulf Coast, primarily Enzo. And while we managed the storms operationally well and had no major asset impacts, we did proactively take units down through the storm. As a result, we lost some production time.

Now this will drive an approximately $50,000,000 five-zero negative impact to EBITDA in the quarter. As a reminder, March has historically represented an outsized portion of Dow’s first quarter earnings, and our quarterly performance will be largely driven by this month. So as we continue to monitor these macro indicators, we’re focused on leveraging our cost advantage position and diverse portfolio to capture areas of near term demand strength in the quarter. So closing on Slide five, our strategic priorities for 2025 are consistent and clear. As we navigate a challenging macroeconomic environment, we remain committed to our capital allocation priorities.

And the unique to Dow cash flow levers that we’re delivering and that I mentioned earlier help to further strengthen Dow’s financial flexibility. At the same time, we continue to take proactive strategic actions to optimize our global footprint, especially in higher cost Europe. And construction in our Path to Zero project in Alberta remains on track and on budget. This project is being built at an existing Dow site in a significantly cost advantaged region. And when completed, it’s expected to deliver an additional $1,000,000,000 in incremental EBITDA annually at full run rates with returns on invested capital in line or better than our Texas Nine project.

We also anticipate over $1,500,000,000 in cash and tax incentives from government support. And importantly, we have not built a potential upside we anticipate from commercializing low to zero emissions products into the project financials. Now this is something we’re actively negotiating with customers and we’ll share additional updates when we’re able to. And finally, we’ll complete several of our near term growth investments this year. For example, this quarter, the plant maintenance activity at our ethylene oxide asset in Texas will enable the startup of additional oxalate capacity in The U.

S. Gulf Coast. So looking ahead to the remainder of the year, we remain focused on navigating these near term headwinds while advancing Dow’s strategic priorities. And with that, Jeff, I’m happy to take your questions.

Jeff Sokoskis, Analyst, JPMorgan: Thanks very much. There’s a lot in your slides. Maybe the place to begin is the NOVA decision. In listening to your commentary, it seemed that there were two features. That is the award amount, which is confidential is higher than you expected.

And then there was also a legal expense reimbursement dimension. Is that fair that and that both numbers are meaningful numbers?

Jeff Tate, Chief Financial Officer, Dow Chemical: Short, that is fair, Jeff. And I would say that that’s accurate. And as I mentioned in the comments, we’ll definitely have more to share as the calculation is good fine tuned. But based on the initial confidential data that has been received, it will be well above the initial numbers that we’ve shared in the past.

Jeff Sokoskis, Analyst, JPMorgan: But not more than $1,000,000,000

Jeff Tate, Chief Financial Officer, Dow Chemical: More to come on that.

Jeff Sokoskis, Analyst, JPMorgan: Okay. So it’s an open question. More to come on that. Okay. All right.

The second thing is you’re restructuring I’m sorry, you’re thinking through your asset footprint in Europe. And I think you said that you’re making some initial decisions or initial assessments in the March. And then in the second quarter, you’ll have more definitive things to say. Can you unpack that a little bit for us?

Jeff Tate, Chief Financial Officer, Dow Chemical: Sure. And thanks for bringing that up, Jeff, because for us, one of the things that we’ve been talking about going back to third quarter of last year is really doing an overall evaluation of Europe. Because when you think about Europe, from our vantage point, Europe is twenty percent below pre COVID levels as it stands right now from a volume twenty percent From a volume standpoint. From a volume standpoint. Yes.

And we look at energy consumption for Europe, comparing to the average of 2019 through 2021, about 20% to 25% below on energy consumption. And when we look at the energy cost, at least four to five times higher than U. S, North American energy costs. So with the number of those structural challenges that we face, the industry faces, looking at right now continued softness and demand overall and some of those overall structural challenges, we feel it’s prudent to take actions around our footprint in Europe because we don’t see that recovering anytime soon. So one of the things that we have said coming out of our third quarter earnings call is that we would definitely look at our overall strategic review, especially in more commoditized products that are especially and particularly energy intensive for a number of those reasons that I just shared.

And so when you think about the portfolio and the businesses criteria, you think of polyurethanes in particular. We’ve also had some discussions around our Soloxanes options as well in Europe. And if you think about what’s in scope, I would say that fits fits the criteria overall of what we’re looking at, those things that are more commoditized and energy intensive. And we also get the follow-up question around, well, is olefins and packaging, especially plastics, part of that? And it’s not directly in scope, but you’ve also seen from our last quarter earnings call that we did highlight the decision we’ve made around Ternus in three, which because we have a shutdown that was planned, we’ve been able to idle that plant and that asset to be able to avoid those turnaround costs as well, but still be able to supply our customers from the existing asset base in Europe.

So what we will share in our April phone call or April earnings call will be an update of where we stand with our European decisions, and we will announce some decisions at that time. But we will also provide another update at our second quarter earnings call mid year.

Jeff Sokoskis, Analyst, JPMorgan: So the language that you have in your slide is that you’re going to right size the high cost you’re going to discuss the right sizing of the high cost parts of footprint. So it sounds like initially you’re going to say, well, maybe we need to be smaller in these particular areas. And then in the second quarter, it’s of the things we have, what should we keep and what should we separate? Is that the idea?

Jeff Tate, Chief Financial Officer, Dow Chemical: There will be incremental updates of the decisions based on, again, the criteria that I just shared that shows the progress we’re making through each phase of the decision making related to those projects. Again, more commoditized energy intensive and those that will allow us to still tighten the rationalizations. If you think about it as well, Jeff, there has been 10% of Western Europe rationalization announcements already on the C2 side. So with that, I think you’re going to start to see things continue to consolidate, and we’re going to do our part in those areas that again help to improve our earnings.

Jeff Sokoskis, Analyst, JPMorgan: In the Of course, Wyndell is exiting and or not exiting, they’re downsizing their presence in Europe or thinking through their asset base. And we’ve seen ExxonMobil make decisions. We’ve seen Shell make some decisions. Why do you think that this is not just sort of cyclical weakness, but is more of a structural event for the industry where it feels that it really needs to take steps? Is it the demand side or the regulatory side?

Jeff Tate, Chief Financial Officer, Dow Chemical: I definitely think, again, the consumer demand and the softness that it’s been prolonged for quite some time. I think you’ve got the geopolitical uncertainty that has obviously affected the higher energy costs that we discussed earlier. You look at some of the regulatory challenges of having so many different regulatory bodies, which makes the overall global competitiveness tough in that region. And I think when you don’t see a tailwind that would say that things are going to sizably and significantly improve in the near term, most of us are looking at what that could mean in terms of our asset asset footprint, while still being able to supply across the region. For example, for us, if you look at our Chinoosin and Tarragona assets, those are still top quartile in the region, right?

And we will continue to take advantage of that in our packaging, especially space.

Jeff Sokoskis, Analyst, JPMorgan: You made a comment about your siloxanes operation in Europe. Can you tell us a little bit of the size or the positioning of that asset and why you may be rethinking your position there?

Jeff Tate, Chief Financial Officer, Dow Chemical: Yes. So when we look at our overall silicones and siloxanes business and you think about the global nature of it, silicones for us, we are heavily focused on investing downstream because there’s higher margin opportunity, obviously, from a silicones perspective, and we’re the largest silicone producer. But if you look over the past several years from a siloxane standpoint upstream, there’s been a sizable amount of capacity that’s come online, especially out of Asia and China, right? But we’ve seen that start to slow down in terms of that new capacity and the pace of that new capacity. So what we’re looking to do is to do our part by investing in more silicones to absorb some of that additional capacity.

And as the pace of those additional capacity slows down, and we look to rationalize in certain areas like our operation over in Europe that will allow the operating rates to continue to tighten up. Okay.

Jeff Sokoskis, Analyst, JPMorgan: You mentioned the Macquarie venture. And I couldn’t tell whether there was something that was new. New. That is, I think that Macquarie, the idea was that they could spend $2,400,000,000 and there would be an option that could take them up to $3,000,000,000 Is that a reiteration of what’s gone before? Or is there a new element to that?

Jeff Tate, Chief Financial Officer, Dow Chemical: I would say that the biggest new element is the outlook that we will close the transaction in the second quarter for that initial phase, which will be that $2,400,000,000 dollars which then positions well to be able to look at the option on the additional 9% that could bring in another $600,000,000 before year end of twenty twenty five.

Jeff Sokoskis, Analyst, JPMorgan: Do we know the EBITDA effects on the $2,400,000,000 That is how much EBITDA you lose from putting the assets into the venture?

Jeff Tate, Chief Financial Officer, Dow Chemical: Yes, it will be consolidated, right, from that vantage point. So you’ll see most of the impact coming more on the EPS line from a financial statement perspective, and we’ll share more about that once the deal closes.

Jeff Sokoskis, Analyst, JPMorgan: So again, I think there are a couple of more things that were in your slides. What you said was that there was $50,000,000 of increased hurricane costs. And if I remember, maybe the fourth quarter EBITDA was $1,200,000,000 and maybe there was a $200,000,000 deduction from various events and now there’s another $50,000,000 So where we are now is we’re about $950,000,000 for the first quarter plus or minus a little better depending on the nature of Monarch.

Jeff Tate, Chief Financial Officer, Dow Chemical: Is that correct? Correct. That’s fair. That’s fair. If you recall, when we came out with our first quarter guide, we also talked about there would be higher turnaround spend from fourth quarter to first quarter as well.

And again, we did not at that time know about the impact of Enzo. And so we wanted to provide that update of right now approximately $50,000,000

Jeff Sokoskis, Analyst, JPMorgan: Okay. And then I think last almost lastly, your CapEx will be lower. And I think you said $300,000,000 to $500,000,000 lower, so call it $400,000,000 And I think your CapEx was $300,000,000 to 3.2 for this year, so that’s 3.1. So we’re like 2.6 or 2.7 for 2025, is that the

Jeff Tate, Chief Financial Officer, Dow Chemical: No. So if you look at our initial guide for CapEx was 3.5.

Jeff Sokoskis, Analyst, JPMorgan: Was 3.5.

Jeff Tate, Chief Financial Officer, Dow Chemical: Was 3.5. And so we’re saying now that we’re going to recalibrate that to a lower number of 300 to 500. So let’s call it 400.

Jeff Sokoskis, Analyst, JPMorgan: So

Jeff Tate, Chief Financial Officer, Dow Chemical: that would get to it in the 3.1 range versus the 2.9 that we had in 2024.

Jeff Sokoskis, Analyst, JPMorgan: In your remarks, Jeff, you talked about what isn’t included in the possibilities of the Alberta project. That is you’re going to make a premium product and you talked about being in negotiations with your customers. Can you talk about this premium or opportunity that’s not included in your returns right now?

Jeff Tate, Chief Financial Officer, Dow Chemical: No, absolutely. And first of all, I would say that the conversations with our customers are going extremely well in terms of they recognize maybe because one of the questions, Jeff, that we tend to get is because we’re in this political environment that we’re in today, are you seeing customers maybe slow down in that space? And the short answer is no, because most of our customers, when they look across their value chain, they’re making these ambitious commitments for decades long, right? So they’re looking out 02/1940, they’re looking out 02/1950, ’2 thousand and ’30 and beyond. And with their commitments around that ambition, they recognize that Dow will have a first mover advantage by being able to provide this product.

And so at a minimum, what we share publicly is that you’re talking maybe greater than $100 per ton premium that could be here, but we have not included that in the project financials, as I mentioned earlier. So right now, we’re assuming without that, that the project would have a return in the 15 plus percent range, which is similar to what we have for Texas 9 on The U. S. Gulf Coast.

Jeff Sokoskis, Analyst, JPMorgan: And the reason why it would receive a premium has to do with its lower carbon output. Is that correct?

Jeff Tate, Chief Financial Officer, Dow Chemical: That’s correct.

Jeff Sokoskis, Analyst, JPMorgan: Are there particular credits that can be calculated that the users of this product would receive?

Jeff Tate, Chief Financial Officer, Dow Chemical: There will be. And I think that’s one of the opportunities that we see in the industry is how will those credits be from a standardized perspective calculated so that there’s consistency across the industry, which is why we’ve been a strong proponent of having this carbon footprint ledger that can make sure that there is some consistency and standardization around how that’s calculated.

Jeff Sokoskis, Analyst, JPMorgan: In your negotiations with potential customers, are these the end users? Are these companies like Pepsi or Coke or rather than a company like Berry or Amcor or somebody who’s in the middle?

Jeff Tate, Chief Financial Officer, Dow Chemical: Yes. I would say I would describe them as fast moving consumer brands. Fast moving consumer brands.

Jeff Sokoskis, Analyst, JPMorgan: So one of your competitors has a product and what they do is they take plastics and they melt them down and reduce them to a product and then they will eventually make polyethylene from this and it has lower carbon footprint. In the world of competition, is your zero carbon product a competing product to Moratek or something like that? Or is it a different product?

Jeff Tate, Chief Financial Officer, Dow Chemical: Yes. I’m not sure to speak on all the competitors’ product, obviously. But from our vantage point, again, we see the timing of our Alberta path to zero project as being a first mover. Advantage opportunity for us with low to zero carbon emissions, which gives us, we see, as a tremendous outlook here for the customer base.

Jeff Sokoskis, Analyst, JPMorgan: And when you now you’re in Western Canada. So does your do you have ideas about detaching the carbon credits from the physical product? I would imagine Western Canadian polyethylene goes to Asia, but maybe that’s not the place where the carbon credits go. How does that work?

Jeff Tate, Chief Financial Officer, Dow Chemical: Yes, it’ll be interesting to see, but I think that’s part of this whole carbon standardization when you look at the carbon credit ledger, because we see it as an opportunity when you’ve got such a broad network like we have from an Olyphant’s perspective that you may be able to produce it in Alberta, Canada, but you may necessarily source it from a different location. But I think that’s all to be better defined as we get this ledger in place.

Jeff Sokoskis, Analyst, JPMorgan: Is the real target market for that product or for those credits Europe or The United States?

Jeff Tate, Chief Financial Officer, Dow Chemical: Yes. I would say when we look at where we’ve traditionally had a lot of the product out of our existing asset base in Alberta, that a lot of that has been exported to Asia.

Jeff Sokoskis, Analyst, JPMorgan: Yes. And the credits, do they go to The U. S. Or Europe? Where do you where are you focusing there?

Jeff Tate, Chief Financial Officer, Dow Chemical: Yes. We haven’t necessarily discussed that broadly yet, but more to come in that space.

Jeff Sokoskis, Analyst, JPMorgan: More to come. So, Jeff, there have been proposed tariffs. So the first thing, now that you’re investing the money in Alberta, like do you does this change the way you does the tariff discussion change the way you think about the Alberta project?

Jeff Tate, Chief Financial Officer, Dow Chemical: No. We see the Alberta project standing on its own in terms of the investment thesis, Jeff, because if we think about the ethane advantage that we have in Canada, even with our existing asset base, we’re building this complex at an existing Dow site. So there will be tremendous infrastructure savings that we’ll get from that vantage point. And again, looking at the product and the first mover advantage, all those things fit well with our ability to be able to take our conversion cost, advantage from Texas nine, take the advantages around the ethane, being able to utilize that to source around the world provides a significant opportunity for us. On the tariff side, we’re thinking about we’re looking at first phase is 2027.

Yes. Right. So who knows where we’ll be from a a tariff environment perspective at that point. But I will say as we think about today and our existing asset base and where the tariff discussions land, our intentions is to ensure that we are making sure that our price increases reflect those tariff impacts along with higher energy and feedstock cost impacts as well. So I think there are multiple dynamics to the pricing activity and the pricing strategy that we have, while at the same time, since the U.

S. Elections, our teams have been doing a tremendous job of scenario planning in terms of logistics, looking at our sourcing capabilities as well as taking advantage of the broad network we have around the globe to be able to source as much locally as we possibly we possibly can. So at the end of the day, our intent is to try to make sure this is as much of a zero impact gain as it can be, ultimately, no matter how the tariff situation plays out. With the different announcements and tariffs that have been made,

Jeff Sokoskis, Analyst, JPMorgan: has decisions about changing the flows of its products?

Jeff Tate, Chief Financial Officer, Dow Chemical: Short answer is no, not at this point. But again, we are very well prepared to manage through that once we see what ultimately gets implemented.

Jeff Sokoskis, Analyst, JPMorgan: So the thing about the Alberta project is you’ll spend, I don’t know, roughly with your regular CapEx, you’ll spend, I don’t know, $3,000,000,000 a year in CapEx. And you’ve got a couple of billion in dividend payments. And so that’s a significant draw on cash flow. And what you’ve done is you’ve got some NOVA proceeds you’ll have some NOVA proceeds, you’ll have some Macquarie proceeds. Are there other steps or other levers that you might pull over the next several years or are we done?

Jeff Tate, Chief Financial Officer, Dow Chemical: We’re never done. I would definitely say that we continue to look across our portfolio, whether it’s wholly owned assets as well as looking across our joint ventures as well. And we’ve talked about consistently delivering on average $1,000,000,000 of unique to Dow cash flow levers. And that’s the commitment that we’ll continue to make. When you look at what we just discussed earlier in my prepared remarks between the Nova judgment as well as the Macquarie impact, you’re looking at well over $3,500,000,000 of cash tailwinds that we will deliver in 2025 alone.

So to your earlier point, when you look at our CapEx, you look at our dividend, and I wanted to be crystal clear for us, and I mentioned this in my opening comments, our dividend is important to our owners, and we recognize and appreciate that. And that dividend is very important to us as a management team. So we remain committed to our dividend moving forward. And with these cash flow levers that I just highlighted as well as our really solid balance sheet and where we stand from a liquidity perspective, we’re in a really good position to be able to support our dividend for the next several years.

Jeff Sokoskis, Analyst, JPMorgan: So the dividend is really the foundation of the Dow value proposition with its shareholders?

Jeff Tate, Chief Financial Officer, Dow Chemical: In addition to obviously operating safe and reliable operations. Yes.

Jeff Sokoskis, Analyst, JPMorgan: So Dow has different ideas about its cash flow relative to its operating EBITDA in that historically it’s been a priority to have a relatively high ratio. Is there a target? Do you want to be at 80% or 70%? And where do we stand in 2025 in terms of puts and takes?

Jeff Tate, Chief Financial Officer, Dow Chemical: Sure. So yes, the average that we would state over an economic cycle, Jeff, is for us to be in that 80%. Eighty %. Eighty %, right, on average. And for us, I would say the target in 2025 would more than likely be in that 70 plus percent range.

Jeff Sokoskis, Analyst, JPMorgan: Dow has always had very capable people procuring energy and feedstocks for them. And I’m interested in their opinions these days. In that when I look out at the projects that are planned, I see Lyondell wanting to build things in joint ventures in Saudi Arabia. ICU building things in Western Canada. And what I don’t see is I don’t see any more projects in The U.

S. Now I get it. There’s the Qatari project that’s coming up with CPChem. But when you take a step back, it certainly seems that oil demand in China has slowed. And there are all kinds of ideas about The U.

S. Exporting natural gas and different data centers being built and that being a pull on gas demand. Like do you think that the that we’ve kind of come to the twilight of The United States as an advantaged place to build integrated plastics. It’s not bad, but maybe it’s peaked. Would you agree or what do your doubt people say about

Jeff Tate, Chief Financial Officer, Dow Chemical: that? I would say this, Jeff. When we look at our portfolio, 75% of our wholly owned polyethylene and ethylene footprint is in The Americas, right? So you think about U. S.

Gulf Coast, Canada and Argentina. And out of that 75%, the large majority is in The U. S, right? And our Project Gulfstream, our Texas nine project in that fleet came online in 2017. So we’re still fairly new with some those assets.

Jeff Sokoskis, Analyst, JPMorgan: They are

Jeff Tate, Chief Financial Officer, Dow Chemical: our best run top quartile, first quartile from a cost position perspective. So our team is very proud of those assets and those investments that we made. And I know you’ve been covering the industry and us for a long time. And we invested in that kind of cyclically,

Jeff Sokoskis, Analyst, JPMorgan: Yes.

Jeff Tate, Chief Financial Officer, Dow Chemical: Right. So very similar to what we’re doing right now with Alberta, as well because we positioned and the team did a really good job of positioning us and understanding what the outlook could be. So we don’t see there being, quote unquote, a twilight on America and the manufacturing and the building in that space. In fact, we see it as more opportunity, which is why we still feel very constructive around our packaging, especially plastics and our ethylene chain coming out of The Americas. And again, having 75% of our footprint in that base positions us really well.

Jeff Sokoskis, Analyst, JPMorgan: So from your point of view, you’ve pivoted a little bit to Canada, but maybe down the road, what you’ll do is you’ll return to expansion possibilities in The United States.

Jeff Tate, Chief Financial Officer, Dow Chemical: What we’ll do is we’ll continue to look at our assets and where they are from an end of life perspective and ensure that as we make replacements, that is going to put us in a better advantage position from a cost standpoint.

Jeff Sokoskis, Analyst, JPMorgan: Okay. Thanks very much, Jeff, for your for our discussion. Thanks very much.

Jeff Tate, Chief Financial Officer, Dow Chemical: Great. Thank you, Jeff. Okay. Thank you.

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