Dow (DOW) 26 Jan 232022 Q4 Earnings call transcript

[Call Starts Abruptly] 2022 earnings conference call. [Operator Instructions] As a reminder, this conference is being recorded.

I will now turn it over to Dow Investor Relations Vice President, Pankaj Gupta. Mr. Gupta, you may begin.

morning. Good joining earnings for fourth Dow's you call. quarter Thank webcast, have today. prepared call is to we via available comments This slides and supplement our They to Investor and are the of posted website Dow's Relations through webcast. our section link the on

I'm President joining today Pankaj Officer. and Fitterling, Chairman Chief on And Officer; Executive Jim me and are Financial Gupta, Chief Relations call and President. Investor Dow's Dow Vice the Howard Ungerleider,

in the Please earnings release read disclaimer the forward-looking and contained statement slides. news

our factors we expectations Because our call, During risks may will from forward-looking results the based statements regarding differ and and predictions make future. our or our statements. these on forward-looking about current that uncertainties, are statements performance materially assumptions actual and involve

and all may otherwise Dow's differences. Unless where uncertainties, financials such Forms items. and principal which include XX-Q cause specified, XX-K exclude detailed applicable significant discussions risks of

A refer that well in the measure the other associated measures. We disclosures GAAP Dow as release, will the directly non-GAAP earnings financial contained reconciliation today also website. as comparable our Dow comments in and of is on to most supplement the slides

will outlook the And close, X, segment you position competitive results creation. Jim Howard then value operating Jim share our fourth see by guidance. Slide agenda quarter and call. for performance. then outline our will will and On modeling begin our our reviewing will to for long-term

your that, we will questions. take Following

over call the Jim. turn to me let Now

in and well remained prioritized mitigation performance Dow continued plans operational demand proactively challenging cost to mobility, proactive functional higher-value Pankaj. you, including energy take energy as In renewable pharma We in customer polymers Beginning the where products Thank to and as operating lowered and end destocking. on Team Slide to rates quarter, and GDP markets capital, navigate measures fourth saving effectively silicones resilient, actions our working implemented slower markets. growth, manage X. and

flow on financial on $X.X reflects shareholders. our and dynamic conversion continued in the Slide actions, was with Dow's generation to $XXX see Cash of to million as operations important cash focus year quarter. and navigated extremely as billion our cash we focus we flow in returned you XXXX, X. on cash from discipline, us These which operational was enabled continued combined deliver XXX%, an

first year, we demand our higher lockdowns pandemic rising mitigate material diverse in year, record China capitalized inflation, our and half energy and tensions. second to of leveraging the positions economic portfolio and driven geopolitical and deteriorated In while the strong ongoing feedstock conditions by the of across costs. on the global continued rates, derivative half In low-cost flexibility interest raw

of face In year. was Dow the $X.X these for full billion flow evolving market operations of resilient, the dynamics, cash generating from

as on While executing our to our and prioritized lower target, capital disciplined of risk delivered the above we We economic invested across cycle approach capital return, allocation. higher payback faster and investments. balanced returns XX% XX%,

$X billion We rating balance shareholders, $X.X our have of a XXXX. we And until in returned of achieved credit and in no including strengthened result share billion repurchases debt billion sheet, outlook due substantive as and total $X.X to we maturities a upgrades dividends. and

how Decarbonize strategy for demand same growing see highlights those the sustainable communities carbon to you Grow shareholder drive advance Dow I'm and At more our neutrality a toward long-term as of continue can solutions. number circularity meet depicted target, we slide. on this deliver and value customer support XXXX as time, continues to our customers, for progress our proud and create we we shareholder our value to and of accelerate Team

olefin regions gains were more prices. $X.X across lower year-over-year billion, polyethylene offset operating Specialty price than were turning performance net to Now the functional our by XX% as polymers on Slide Plastics and segment, all and X. & segment In Packaging down sales

demand hydrocarbon was net in and packaging by Volume polymers. lower partly resilient olefins driven were demand by sales declines a offset Sequentially, XX% were driven Europe, sales global functional down primarily prices. which polyethylene and lower for by

primarily Operating the EBIT lower lower lower $XXX for period, in Sequentially, to EBIT material than polyethylene operating integrated raw offset and were the segment margins. down operating was energy $XXX due to was $X.X million prices ago more costs million compared year as polyethylene and by billion rates.

consumer and XX% net for durables and Industrial year fluid the primarily as lower sales building in Net XX% due and demand seasonal $X.X Infrastructure for to durables declined the segment. applications. to construction, in Sequentially, were were building deicing were Moving & down period. than Europe by from declines Volumes and Intermediates construction sales increases industrial ago billion, more industrial, consumer demand applications. down offset

volumes. Operating EBIT lower energy costs the year-ago versus million demand period, million points in increasing compared $XXX Europe. for operating expanded in basis EBIT the energy lower by costs, by by prior margins as offset lower to $XXX Sequentially, were driven particularly XX partly segment quarter and was the

was to of Performance segment, coatings, resilient price siloxanes architectural than billion, for for as building by monomers. acrylic down markets. year-over-year sales and reported and mobility down gains acrylic declines offset and more Coatings we price and lower more was silicones than end $X.X by local lower and local and construction performance declines XX% in demand monomers. the Materials in building well were prices for & Sequentially, for seasonally net in were net applications due And siloxanes sales offset primarily down industrial as construction as coatings as demand XX% Volume

in lower demand of and operating declines Operating the rates. operating declined quarter. by earnings loss million, $XXX in siloxane EBIT Sequentially, local $XXX was prices, lower period in rates to a $XXX for EBIT million compared of driven million the operating price year-ago the and to segment primarily due

to Howard review X. to Slide I'll and outlook it turn over on now actions our

everyone. Thank you, Jim, and good morning,

XXXX We dynamics to expect experienced late continue early the into in market we 'XX.

is and the on of inflation cost continued sentiment. parts moderated, and weighing monetary pace business remain most levels which world has investment tighter to the overall in elevated, While has trigger both policy of consumer

relative we see for globally signs dynamics by of growth calling growth. although Europe in with demand destocking differ forecasts U.S., the still economic year-on-year to continuation GDP positive regions trends slower of region, most year-end moderating forecasting In and quarter. of the the early except XXXX, majority The are

construction than been by Building have housing starts year-over-year inflation declining in December. particularly XX% more with rising end by rates impacted markets and interest and

confidence, Europe, expect Manufacturing regional is consumer light levels PMI inflation contracted remain demand for improvements the the consecutive prices. from energy third in to of vehicle the were in for constrained points. late improving to X in XX, sales XXXX, percentage year month we spending In resilient. recent depressed down by while Easing despite U.S. remains consumer while albeit leading full

highs to positive a volatility weather production. and lowest construction changing five-year its PMI level industrial are on to spending and move gas markets. PMI since in May. since been tensions reached continue July, forecasts and in the futures is storage December manufacturing geopolitical consumer weigh inflation While the contracting High sign, to leading has

Year. by recovery potential up In COVID the has economic following New of an orders, some This expect we're the very policy we in source time area while it to provide China, to recent these restrictions take improve and monitoring encouraged demand closely ships to open actions significant Lunar to a as ease activity. we're is

Latin tensions, inflation America, driven in by monetary high policy. restrictive is and to political overall And expected economic slow, growth

approach backdrop, the to adapting to our managing region, dynamic to operations will take businesses realities. this our Given a continue we and evolving market region business-by-business by

X. Turning to Slide

operating costs, call, our highlighted serve with playbook last low we deliver current to we of in a cost billion at approximately implementing to responding reduction workforce our proactively environment targeted including and begins cost economic to service As are savings. actions with maintaining model of optimize X,XXX global the earnings labor roles. to actions a $X a This by

foundation to also we will ensure assets in place, our particularly Europe while also end-to-end our with productivity actions base, evaluating our improvements We will now global shut down continue and long-term in while cost competitiveness that to further efficiency. increase enhancing additional process asset across is digital select

structural These to savings year. are of million deliver actions EBITDA a this in $XXX total expected

to of costs. materials, another spend, Additionally, expenses. utilities while logistics $XXX cash This million reducing includes our raw flow savings purchased deliver through turnaround and actions maximize will decreasing we operational

These Importantly, while focus. to the our we maintaining while uncertainty structure and in as cost this our do our remains will operations, actions value-creation optimize top safe macroeconomic near-term response proactive reliable which, long-term priority. maintaining always, will

chain X. for costs rates led through rates operating our and the of quarter U.S. operating are polymer Packaging in ongoing the to polyethylene functional December. for outlook lower improving strength destocking impacting month inventory global the consecutive continuing first Slide in and the feedstock & In Reduced fifth value Specialty on down Turning drive to Europe. to with and Plastics logistics input declines demand segment,

the to demand total, a prior impact be a sequential will earnings. we headwind costs impact segment licensing in activity will nonrecurring million from sequentially. turnaround and lower we levels for earnings lower Asia equity expect While the quarter expect $XX In lower tailwind,

for remains the And we're a average Industrial stable winter. monitoring demand energy than with demand for deicing & warmer fluids markets, Intermediates Infrastructure segment, and

pressures inflationary markets. industrial construction continue in lower impact in PMIs However, and we building end demand, to contracting seasonal volumes expect

approximately U.S. is on winter due headwind the supply third-party $XX an storm anticipate causing also a million a We which to Elliott. outage, Gulf disruption from Coast

performance segment, silicones Coatings lower as costs. the availability for customer supply demand well we as And improved Materials recovery following Performance in year-end expect & and destocking

supply. However, anticipate we increased to see lower the pressure as in quarter continue industry pricing siloxane we from also

with discrete performance at monitors. costs mentioned. our the in Deer we in in, the we quarter All $XX expect line million tailwind anticipate with headwinds segment in fourth Park I We acrylic expect million performance segment. to in higher for planned site turnaround quarter a monomer first In $XX total, maintenance the be the this

continuing I year-over-year a several to estimates our and income drivers. will Turning inputs. We're cash best the notable statement few year. highlight full provide of to flow

approximately in while $XXX as anticipated spending $XXX operations. safe year to earnings equity actions by savings of to million. the lower cost turnaround we be expect reliable is down implement Total our down playbook million $XXX and We maintaining million

well finally, remain expect to as continue higher to strategy. flat our execute expenditures faster dilution. continue plan $X.X D&A of we count And billion relatively our as on and We projects we we billion, to to share to continue increasing payback anticipate and $X.X decarbonized our growth capital return, our within advance covering

backdrop gas following XXXX, Overall, constraints. higher New the supply in we China oil chain spreads, in the additional potential remains upside reopening Lunar and dynamic Year to and the inflation macroeconomic see from easing for

to geopolitical higher PMI of from a construction, attention energy markets continue rates range close also indicators, levels, to interest and global pressure including on pay building dynamics. We and

we based well solutions and flexibility positioned on customers. remains footprint, the our global feedstock sustainable provide for our Dow

continue advantages to shareholders. to will value long-term We our for leverage deliver these competitive

back it to turn Jim. I'll that, With

Thank Howard. you,

to Slide Moving XX.

our our Decarbonize of flow to cash resilient advancing are packaging, opportunities. profile, generation While we and see across these challenging, market the strong near-term attractive mobility. we and infrastructure, continue to With positioned secular a and remains credit strategy environment verticals on Grow to trends well capitalize consumer continue

In on the began rate XXXX. We of in generate collectively our in $X expected EBITDA & completed Plastics, to outlined are growth middle investment mechanically this by decade. Delivered Packaging commitments early and These run investments Specialty final capital commissioning This we XX% greenhouse to by of our up conventional features the technology emissions usage reducing fourth FCDh while in XX% FCDh gas energy breakthrough units. and in quarter. versus up Louisiana unit propylene to lower billion outlay

Infrastructure, the These in in start. alkoxylates completed this care was first will are & our our high-value in serve year. in next the XXXX, United Intermediates and a completed home Industrial In pharma of just will quarter States of in and markets the investment capacity Europe further and quarter third projects latest be

remain Our next alkoxylates on capacity investments track. wave of

fact, customers Dow to and locking several support of successfully supply consumer In in growth. next with pharmaceutical wave the already contracts has begun

Materials Performance mobility applications. personal in demand & to construction, meet XXXX high And downstream completed care projects debottleneck XX silicone for Coatings, performance, and we building and in

of accelerated rate end we digitalization the well and million of of Additionally, XXXX, EBITDA delivery our to target materialize the $XXX of by XXXX. ahead now prior run expect fully initiatives our full the

As we comprise sales digital total XXXX. our by anticipate of result, a XX% to revenue

and systems projects growth silicon additional our debottlenecking incremental to ethylene we forward, investments projects. downstream, expect continued operations, and alkoxylate including to in derivative expand Looking capacity in global and continue polyurethane investments coatings high-value capacity, higher-margin key capital

continue also reliability capabilities mix to and our We we higher growth shift as production higher-value markets. product progressing toward and operating will improve investments our

growth significant to Decarbonizing remains for Slide Turning our and Dow. a XX. assets driving circularity opportunity

tons a carbon by have to metric clear road XXXX. another million map We reduce X by emissions

start in innovative, and energy Shell collaborative which efficiency steam XXXX. heat such furnaces, our on up program with We continue is electrically invest cracker to to track in as technologies, to renewable

And end a decision our of by reached project, government Alberta, final that In to Zero working the our past confirm XX% decision XXXX the and as progress and investment by with we can necessary have more map year. making at by XXXX we make a secure and preliminary we this for we partner the to Terneuzen are incentives investment so to carbon Canadian site project, clear a is than road reduce agreements we where subsidies. government emissions

waste We up meet pipeline tons transform of our advancing by production, in annually solutions million positioned in to solutions manner. capital-efficient to metric By target are also and to X demand we renewable XXXX. the of leveraging disciplined scale partnerships and a this strategic commercialize well and invest our growing customer are circular innovative

enabling recently, bold tons directly to curbside and the to program is plastic Dow a be new address films more Most hard-to-recycle placed of XXXX, expected them into than WM from film by announced metric to XXX,XXX recycling. landfills. collaboration divert residential plastic By

track growth. by deliver our improvements to XX% reducing while long-term for our on to XXXX, emissions billion EBITDA $X continue and underlying by in We X compared remain essential sustainability Scope to XXXX baseline. see earnings we as Altogether, X

Slide Turning allocation on our since XX. sheet capital flow we to operating the improving across financial spin taken generation enabling priorities to deliver our us to we've be The more flexibility cycle. actions economic as cash resilient balance while are our strengthen and

in improved $XX more year position reduced cash liability spin. reduction now underfunded our and basis. the $XX allocation, capital XX-month a and tripled flow substantially a ending with combined significantly than pension trailing since disciplined free is through to more we've debt than nearly liquidity net And billion. on profile performance position, We approach balanced with of billion Our our our our

Closing XX, the playbook actions in we resilient clear a Slide to near performance and of long on have term. drive

an structure in to and class. is increase rate we're improvements billion emissions. strong through plans our have maintaining low-cost actions financial recovery that $X dioxide a and disciplined and the advancing and through strategies, efficiency We're on EBITDA with of achieve targeted positioning for We delivering focus economic balanced circularity in run the while allocation, decade, savings continued lowering maintain to Decarbonize end a best capital Grow position our and incremental us a carbon

our leverage As since value us has on served our flow to spin, we long-term focus will for agility shareholders. deliver we competitive and generation well continue advantages, cash that operational

to With open that, Q&A. turn I'll it Pankaj back up the to

Thank you, Jim.

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

[Operator Instructions].

of Your Please Morgan first question go comes from ahead. Vincent Andrews Stanley.

there's just morning right fourth everyone. into parts issues market. but with the reopening, unpack Coatings moving could a Good if bit. Materials lot And for weak Wondering & outlook some now supply now little the Performance you new the China a just it coming sounds with in of like quarter

how how of that about and could this So be could through move how range obviously, reopen. us the wide year, of it we But uncertainty China recover sort representing a far segment will for give outcomes as might you range? the fast

the morning, for question. Good Vince. Sure. Thanks

the back at understand the fourth quarter Performance and to the a Monomers got to Coatings from seasonality very different quarter. that fourth kind important back the supply on see, First, quarter all which associated it's that. winter look of that I fourth and normal everything think else was URI we were because and year we still recovering would was storm ago with from PM&C disruptions

back think they'll come normal in you'll see season XXXX. I So to a that more

businesses, Destocking destocking. slowdown the saw in XX% in the represented, quarter. of across XX% the And and impact that of you about quarter this is we also the the fourth saw fourth to

quarter. think back the get there. in normal So going itself see you'll And is the I through I seasonality to work then think first destocking to us

China positively do think and opening I people China with We're issues think performance up. work. monomers. seeing on for I to coming seeing not coatings we're do

through optimistic government So that I will stimulate we'll to off see to the that think construction we're probably year. start the there, and try the economy take

On obviously, hardest had in that silicones slowing, One hit was impact you prices of China, end siloxanes, the two the market and the of siloxane was the year. things lower which at impacts.

one And to operating all quarter. at fourth siloxanes self-inflicted. happen point down us. silicones the and We lower some have the that pillar X three The was really pillar up hurt back plants, rate all plant They're, in running. other the of

that think issue I So us. is behind

would you'll siloxanes also we the downstream saw in areas all start expect and saw back goods, building personal see silicones, demand destocking up. to So pick consumer I care, in We it, obviously, in construction. and home

that think will rebound year I start the as to progresses.

Please Thank go ahead. question you. next The Bank. Deutsche Begleiter David from of comes

decline going operations in natural Howard, Thank given of gas the and are European thinking the how recent you. the Good forward? you Jim about European competitiveness prices, morning.

on situation morning all good producers the European year. has past tough over Obviously, Good the been Very David. question. European this

you full EBIT the decline year-over-year the performance year, In energy in that situation. related XX% was to about the if for and think for fact, Dow Europe of

Incrementally, very from targeted. and we in done being the gas saw in other the is admirable Russian up. quarter, Germany, natural by change fourth this a job, they've of the So step winter back driven especially to over obviously away an And switching inventory levels sources. warmer

So still at because energy look in competitiveness actions on energy EU from locations now, on a right any going policies and long Europe. say a we've states we decisions long at the and around with that But governments, we're the the scenario work way announced today that I long-term term, and to those. have looked away has restructuring, we'll in take we policies member to helped. are long-term be would challenged take both

work more of able competitive working to positive, what hard through the like energy to continue cracker this that that we're with our we're see can year flow long do large sites, make large governments situation. we and them on term. kind on there analyze We'll to sites, still and But run cash

Alembic Global. ahead. Ahmed go The next of comes question Please from Hassan

your nearer-term around Howard. question morning Jim and Good guidance. A

it First I level you of the as part QX $X.X look question billion. at guiding you're EBITDA segment to is, guys, guidance, seems of

is, And that for parcel then correct? $X.XX part and January that a it pound that first the seems in is So, price question, for that and part U.S. hike polyethylene announcement of there are question with X February.

then, obviously, And these seen natural we've in prices in gas preceptors declines Europe.

much in? gas that about in this polyethylene QX, those for natural guys have EBITDA think QX, good. we you of given in for guidance have U.S. should billion factored in how those price $X.X And factoring are how hikes So, declines you

in margins Good take Hassan. We Good outlook to the at our quarter. would be U.S. margins off. -- is say, come morning about in benefit which up yes, integrated in in question. amount user. natural energy integrated I look Europe, a for they'll We our the $X.XX fair gas a and obviously, the back and have go polyethylene on from Obviously, outlook I a see expectations think large costs PMC, integrated and margins. both would of that,

that so a And Stade. location in helps like

to and gas natural in cracking are some degree big really any in only we Tarragona. But Terneuzen

the limited bit there. naphtha. a So it has are little the of effect Most more economics rest of

quarter do then and quarter, I to got remember, with you've there. to obviously, the up -- we base lower we from think start build quarter first a fourth prices

still quarter So That's then you're going we to to effect And a operating bit expecting and are have it. some of of volume destocking the a bakes into continue rate guidance. into that little perspective. the that from of part also lag

add, So want the Anything Howard? went else things those big to the that you are guidance. into

million. items. a three got much QX At the Thanks, say level, balance would Yes. we number it's to around question. with high QX expect $X.X for really the I on X pretty discrete there's moving thanks like Hassan, I right. look And you mean, parts Jim.

in turnaround with Gulf gas DIS you Deer in Elliott $XX offset lumpy. business, business but of at PM&C, And not on sequential our million supplier the We sequential That's segment. $XX So We're QX. headwind impacting a is asset. dealing level. the sale is tailwind expenses That's Industrial million large that's having enterprise a third-party had tailwind million that in Park a quarter our headwind. which is post a P&SP, storm $XX the Coast $XX as Intermediates positive will still in repeat the that's winter issues in which a $XX by million fourth there's lower million a know, then licensing our in

Thank P.J. Citigroup. of you. The go ahead. next question Please Juverkar comes from

like capacity with polyethylene, you European then Jim, the demand chemical morning. China is that capacity the with agree marginal European in Good it capacity of ups high-cost seems and flexed you reopening And will Would as instead Yes. statement? China and be mentioned, is now positive. downs.

result? recovery Or that do snapback gradual somewhat of in Thank is you. you a Assuming it more first of a expect half? polyethylene in a as

questions. it Yes. in in about would think I Europe, Good say I two morning Both P.J. good ways. would

crackers. competitive First, costs that on the like They and the yes, cracker I would they the assets incrementally like LPGs where a standpoint, probably lower cost think to crack highest are Terneuzen basis, And with I in a utility become about are have say would from Asian that are naphtha economic and Spain. fairly able Tarragona on situation.

a So cracker up we II&I polyurethanes, operations. much into in on and down up We where when STADA at Europe, energy polyols, much cost business bit haven't and much, run the They've rates got and at like are Europe higher. our did the as it in isocyanates flexed pretty Germany down flex throughout. steady

energy then and at higher. amount you that we rate, but competitive some And low is cost, there see so the very is a what is of much would have that increment

think would and what that government. And address front So continues with still have in that that I window run thing rate. to the we is to be the the to competitive we

the part of second remind on question, say would me. I

recovery. China China,

that quarter-over-quarter. even Solutions of there. China. I in then coatings polyurethanes, the so to We The prices places and Yes. that also the, because weakest asset had monomers, plastics packaging, construction, us down mentioned, were siloxane Consumer our as related in to it's although fairly for being chemicals, be Look, and especially building And quarter construction Industrial and was were I and going growth think positive. anything fourth solutions.

most were Industrial construction Solutions, had Solutions we year, XX% Construction impacted. pretty of the For was it stimulate that Consumer XX% good and the And certain that economy. year. how in happen. Packaging and is will businesses it growth is really Plastics, try government & that growth. fast know going again. was I It the to to I'm that off going don't get Specialty China's last

As from are I and right into expected. things as other into work, work, as reporting we're COVID that People CEOs are moving seeing mentioned, hearing I'm well, now. reporting big spreads not any unmanageable are this people

we're I see expect to So do from going positive bit little a move of China.

you. Zekauskas comes next Please from ahead. The Jeff Thank of question go JPMorgan.

Thanks very much. question. Two-part

of in Your of X%. And is you that pricing? about & secondly, and local you price of and $XXX a combination have MDI that Infrastructure kind Industrial capital puts down Was chemicals for $X Intermediates talk for capital that? some million then do were takes, Can what inflow Can can expect was or Howard, working some XXXX? you working benefits chemicals were up size And a billion? you down?

Good Europe much fairly Jeff. footprint has higher that construction there. had a volume offset business and chemicals of the remember, morning Good in it. the that II&I, are polyurethanes was actually large prices and questions. costs that higher in we and and On And part was there was input it so

was up well. again, also that We Industrial that slowed. pricing And Solutions held saw it relatively volume

So a I'll impact. of let little both answer some bit but part of very and slowdown the had prices of that, volume currency saw you second Howard. them resilient

industrial to million That what's really quarter the versus versus volume drive sequentially on year. working some so billion feedstock which be was should with Thanks, costs would move China the growth. quarter expected Jeff. still on capital. And around actually say going year, to quarter, and depends the than certainly of Jim's some especially happen global last with and growth with Yes. some should revenue through growth is as same let's prior reopening. tailwind start growth. the $XXX it on of I We're more positive a and overall, fourth comments X.X%, Look, we expecting drive production $X GDP

that very a capital. been improvement. working couple spin, on days working focused to We're know of since capital target You we've of structural continuing

actually capital When XXXX million very cash I say, at the you $XXX XXXX focus $XXX of million from overall minimum, ops So what spin, on and year, working than on we're of looking through versus million we've XXXX. our since last do Dow improvement been better to bare improved look And I'm billion to every a from team would of XXXX. we at their flow. cash XXXX. able year $X.X proud single $XXX was have cash at ops

do working focused levers. And ways also of of on Dow capital. is Working of $XXX flow to that other unique them. capital, billion on $X We're pulling that is Dow that unique on I working so one million million we work $X we're cash is estimate billion of to of on $XXX the inclusive certainly capital around levers. working to one

the The you in we quarter, fourth in big that we X calendar the resolve of hopeful X saw other one, the one as litigations that have. or solve second We're concluded novo successfully we can the to unique got billion. we as round one of the up And that $X.X Dow $X are another cash that could much few a that other out we've XXXX. in year expect. billion as That then works to be second projects

you. Thank Please John question The ahead. BMO. go McNulty from next of comes

question. Thanks for my taking

kind restock was little really at in a you you that to us as which So the levels of that? even how fourth destocking like we feel quarter. Can the of if it guess balance look be the saw give of you as the expect color change a segments to at you and quarter And that, I -- to phase? in maybe or operating -- we're you side fourth to you're rates you like anything, do the And can accelerated XQ? to even may largely speak a seemed through bit tied

announcement were for our because export December. December time, year in really slowed. of operating John. made the We logistics But the in positive. things would morning was ethylene, marine the December in Good Good month constraints Question. happen. at cargo, last in We pack going it rates that Sure. other saw half some so some of that's December. in best better of same manufacturing that to logistics I accelerated reduce say and we October polyethylene activity

could the that you that pattern. half in slow And see so stayed of the And first January. relatively order

quarter we're back that seeing do think would not order And will volume the We're lot do seeing activity excess that now. say right inventory are But now. and change restocking manufacturing the highest state there of come not typically at is I think progresses, anywhere in we a I a we're yet. right in the quarter I there second third our book. as quarters. because get

do here right but coming, here it isn't I sit we So today. it's now think as

question ahead. next The you. go comes Thank Please Mike from Wells Fargo. Sison of

impact was guys. in from what you would impact you meaning of good that normal fourth quarter the improve were can rates you to similar quarter? What And rates rates, the in at think 'XX? the operating see And do that be? your lower when Hey, the morning operating is EBITDA, for back sort if rates then normal on operating first

Yes.

Just to due give million. numbers, you probably rate would destocking, to of probably destocking. [indiscernible] lower XX% because you think, say, you you saw an operating saw a idea, I where Rough do Howard,

because in you the point seasonal say balance When that was Hemisphere of business. business we're then coatings was seasonal low of that's Northern mean, because would is you this other the EBITDA drop when every the just fourth think really at say decline sequential the it percentage point. our typically I in of look more obviously, a -- XX seasonal And -- in quarter. the a I destocking. And sequential a Yes, Yes, about points. two-thirds decline I probably would And look, Mike. percentage way,

ahead. of from next you. of question Please Byren go comes Thank Bank Steve The America.

can planning Yes, how assets highlight is And thank X,XXX-headcount is just to operations, Or you one other that of then headcount? That or one. commercial you. quick these that what this back-office in much you're Europe reduction, shutter?

pyrolysis with would how feedstock, that partnership when you're the as expect Mura, scale, profitability versus cracker that's Your of using or oil at naphtha you feedstock? the ethane-based

Sure. of headcount Good morning Europe driving that's these us reduction big although Steve, specific questions. good Europe, is a is not the take decline to to earnings actions. X,XXX all part

really scale decisions challenged we smaller the through asset and site smaller are made year. we've The they locations, so be know where locations will far

be will cetera, Works European et we the doing quarter. we're released haven't through we this of We get of list as a that toward end with those that working Councils, the but

two billion that's buckets: and But process cost improvement. really -- $X the That's is structural end-to-end made reductions, is headcount million reductions. $XXX of up the productivity

digital mentioned, leveraging the environment. $XXX and do And million, imbalances the lower this ability work service because $XXX just and and spend, we're that So just asset had and spending, to reduced turnaround on million building processes off would done, materials, some will supply/demand Howard and utilities decisions. that volume we logistics the that we've be customer our purchased tightening improving then belt and raw on really then do work which to see

targeted it's I businesses targeted So of It -- around -- be be to be will say a around need around will headcount. I target Dow X% don't workforce. not not it's targeted, haircut just asset decisions. that we the would tighten. will It and It

We will have at as contractor the sites. reductions well

we'll so it And look at that way.

continue vary technology. excess $X,XXX to waste by the on of talk And Mura, XXXX, now, in target. But and we greater ton. -- out it's the demand demand a Day be right the is our they premiums at about Right transforming now, when the there supply On the metric in than Investor you supply. to

between will think big obviously. owners that, there supply available now imbalance what's consumer want brand the there. the I right as a there's out and increases, pressure be But what on

segment. more you'll but we’re some expansion So the higher be of There cover will will than premiums there I that. costs in think do part think I doing the margin -- see that, that will

Please Research comes The from McCarthy ahead. Vertical go Partners. Kevin next question of

percolate your morning. thoughts weeks. last of the polyethylene. Jim, welcome X start Yes, on over seen I'd or to side supply We've X prices good higher spot the

levels also I lot was And I we September, into rates you on if had at Elliot point? rewind others downstream winter from to converters late December. dovetailed this you a that storm back of where in among maybe comment operating and inventory throttling if So could see wondering Dow of purposeful

on has I think tornado your least one at of competitors force declared majeure all a things. of

disruption supply of to that rebalance we there's kind at here? look do polyethylene higher market if the So enough think from holistically, and move you

Good morning, Kevin.

momentum increases quarter. the think in to obviously, give these to been first I there has good enough, price

And questions. will as we one earlier so the I mentioned the I of other think see expand, margins on

do -- team. have really no took this we to of happens again, it's storm how From worth supply we proud mentioning said, and freeze? Uri, if After I'm that a we storm had playbook winter the we make with winter losses we were standpoint, our this also sure side to crackers. Elliott, polyethylene that And due don't problems navigate any able freeze production do we we with and plants or how

Gulf in off-line. as about the XX% sit ethylene here, now, is still Coast of right we And capacity the

to as kind in advantage so we've for at our same think industrial business. That's with And of only our been Industrial the and an us. one gas I mentioned, work. of only that's supplier the they Howard Louisiana blip, had our an And Solutions is issue don't did sites

impact. China, is in think P.J.'s We China that to do saw an earlier, December. making I question

I see inventory inventory five reduction in are the inventory Inventories managed consecutive the think here, data months pretty That's Inventories of to days. going standard continue is in first ACC that XX we're there to levels. quarter. well.

just the everybody year not the to slower year value of in XXXX, the XXXX, we of converters, into We a end year. in cash end the end but had and slow was managing chain watching kind dynamics. everybody, reverted pretty owners, year of at the more the of think I in a normal the end of And inventories consumers, strong brand and

last off-line eye the do same as We I an the capacity probably amount capacity is on say year for would keep of coming on. have But our outlook to year. about

that demand And well happens, there's here that so some us and up second third back will for quarter. restocking if and kicks up set

mean, capability. XXXX speak marine as but I of our I bright would the out situation is we ability ramped pack that improving have cargo into head also we North add just and certainly, can't to peers, our see I we for America. export certainly the spot that another

that so the increased see as the pack half, QX, in marine balance should QX the U.S. don't of a we And but and cargo really second visibility ramp first of for the year, certainly should not the at be least into the through of have we bottleneck half exports out

The next ahead. John Suisse. Credit comes Please Roberts from go question of

recently. John. on online had that Good morning. Two participates commodities capacity This competitor siloxanes MDI, and is in, come Dow Matt Skowronski have for

commodities out guide it to quarter. talk how just siloxanes about But you can in for these called take first your long you in to weaker You recover? pricing expect for the pricing

question. for Yes, you good morning. And the thank

siloxanes and the see time I little year, demand think fallen But we'll we at of have prices a the at so levels of those in start year end bit improvement. to some their lowest will thing continues be good. we're will I and start don't The the I positive. that think demand it immediate improvement. think to construction Building still any tip downstream the levels. be to expecting the to

the we see pull start building that to good things and lift up. in China, if a things So positive rebound should to and construction in

the typically North America be than the been And to and are that today. slightly same and fairly higher North prices, continues America resilient. has Europe Chinese case

my So I -- on on. outlook siloxanes that's

would On what reported the view, are RTO say biggest you the plants competitions, I difference is just of coming Chinese MDI, the what's in our about that new the on MDI some markets online. in believe between timing of

period that's out be that, stretched view over a longer to of think I is going our time.

would in that's that Most reported spread to coming happen. don't how XXXX. period. the X XXXX be would facilities of to world-scale of that's think all more going our over on I view XXXX-time That what's have MDI

will that take think that I of off MDI. some so And of pressure

MDI are and what coming our and goes for is feel that. new about about for time the -- good worried the your so and systems That's that supply demand coming assumptions purely application online it demand don't into frame or really that -- Downstream new I

Parkinson The ahead. Christopher comes next go Mizuho. from Please of question

Great. so Thank you much.

all a back, there's all lot your But growth take on over regarding step years. have the helpful Slide on polyethylene going You a very the slide few expansions and a the last obviously, been thinking and XX. looking side And just that given when investors even lower 'XX volatility headwinds, the should thinking potentially in we're how or prices. context be earnings about NGL out 'XX now when to macro all the normalized especially perhaps about of given we're we the

any do that? on have Just you. updated Thank you thoughts

last back back earnings obviously, Chris. XXXX. question, and Good is the that year at this together in shared and corridor that basis we slide earnings put I we day the go would of

prices of midrange at NGL the like so look of we the of And And range we prices. those would look target growth. it, for and I mentioned scenarios think oil kind the kind if the growth. would see peak And potential then you when higher being be the lower you we report as at through-the-cycle how you that's what with

that of for half with of kind Now like we peak XXXX, got into was XXXX the and first levels plastics.

start in going of it oil up, three investing that five any low. demand years do before those speculative we've movement see you move to anything inventory oil driving oil bottom exists started the production five-year in to is number. think higher their prices that is pull that be to are inventory do in on the move And would will levels underinvestment because to had so that oil think average. be quickly I possibility price And would production, I it you happens up to continue because is today, at any if going that

good at pretty Meanwhile, to a NGL grow clip. production is continuing

the this to up in States here United substantially I year. be going think it's pretty

on so NGLs. that down And keeps costs

that's And positive. so

about feel about Obviously, Saudi Argentina, there. U.S., the Arabia, Canada, that. I So Kuwait, good positions good feel we have we

news into Our and cracking Spain.

I think positive. that's

plastics, is I watermark range. well. for the And we're delivered line what billion get in to got other with which right of high potential we've to that segments you've EBITDA peak here So seen EBITDA think peak with trying $X in up as potential,

that So we're all make right, make to that's we want are term, the the I one to position. and conditions about where going to investment if wanted in feel good to that also reasons investment the continue long of leverage we Canada,

all a going what's to that say with plays energy big happen to part it. in policy, Hard

governments addressing fantastic a all for technologies, that's great. is the alternative that think package. IRA, for thing one It's new passed that all supportive. that very the correctly I aren't things We're we've

some gas power low need reliable a oil to and the to going provide for we support also reliable are need and We the is carbon because power natural going conventional future. for foreseeable near gas production

want billion $X the about would the the with in right and through just by the and $XX in of X% of middle XX% that's about you view mean, to of making, to then billion you decade, And by that mathematical billion terms I decade. the by normalized middle in average the the that all to corridor the range into the should decade the -- at middle say that, think investments also $XX average, then $X look a of CapEx of be if to the moving I now, cycle. when mathematical OpEx a range we're the of normalized the billion just earnings middle

comes Frank next Please The Mitch go Research. from you. question Thank of Fermium ahead.

number. for And good giving and XX%. to you. X% Thank crunching much average mathematical us for Howard, XX% you having was that I difficulty to thank morning. so X% the And

the I billion. come want $X cost savings, the back to to

you how You perhaps a And give mentioned to non-cash? take suggest I'm will of XXXX that us order does that magnitude can I be above on curious on an And turnarounds? 'XX. could mentioned wondering reducing turnaround that spending in 'XX versus And spend cash the also of then in there? -- see you order if average you're that that much of an $XXX slide, you was going plus. first quarter, that is versus And charge million

take do to want you Howard, it?

I that, that really targeted, my you you The answer make just know the do Nets can sure want previous fans -- welcome. you're question Frank, that was on Jets and math. really let The out all that there. Yes, just -- I to

joke. a Just

should the as run billion about $X exiting XXXX, that billion look become $X of the into the rate billion. year we end Look, at $X.X

set we I turnaround be or do million cracker that revert turnaround the higher obviously. haven't turnaround. XXXX maybe a yet, turnarounds normalized if We could imagine and more just $XXX $XXX the we than could XXXX XXXX be budget -- million potentially could But one for if in to

-- still of order So improving the cost that But that versus XXXX. magnitude be expect. the would overall, improving would I

much how was that? And the charge on cash

of year be to million $XXX roughly XXXX. balance expect XXXX Oh, and the in the cash that outlay the XXXX course to about and billion, half -- range, in we this probably over $X the half other cash then the

today. we the think time for all that's I have

Thanks, for a reference, XX posted our on call. will of concludes within be your Dow's website copy hours. your morning. approximately transcript everyone, For This our this time

lines. and this you disconnect does that for ask conference for conclude gentlemen, call and today. thank the We your please Ladies participation your you