The corporations on our annual list of the world's 500 largest companies combined to generate $41.7 trillion in revenue over the past year.

Fortune Global 500

Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

Fortune 500

The top companies on our list have one thing in common: Staff largely trust leadership to see them as well-rounded people and reward them for a job well done.

Global Dow Center in Midland, Michigan

Employees say: "Dow is a great place to work because I can always be myself. I have the opportunity to make a big difference not only to Dow's bottom line, but also the community and environment around us. We have many great perks and benefits that are really not comparable to other companies. Dow is led by an outstanding CEO who I feel is really part of the reason that Dow is such a great place to work."

Fortune 100 Best Companies to Work For

Leaders in all industries rely more than ever on Big Tech—and appreciate the giants that deliver, at scale, without drama.

World's Most Admired Companies

Organizations are assessed on their efforts to create great workplaces and positively impact people and communities across multiple countries around the world.

GPTW_World'sBestWorkplaces_2024-Dow_Showcase

Dow ranks No. 20 on the 2024 World’s 25 Best Workplaces list.

World’s 25 Best Workplaces

See which workplaces made this year's list.

GPTW Manufacturing & Production Large 2024-DOW

Employees say:"Dow is a big company but operates like a small, family-oriented company. All of my colleagues are great, and we work so well together for Team Dow!"

Best Large Workplaces in Manufacturing and Production

The corporations on our annual list posted aggregate revenues of $41 trillion for the second year in a row.

Industries included in the sector are diversified and specialty chemical manufacturers.

Fortune Sector Leaders: Chemicals

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

Creating a more empathetic workplace looks like staying loyal to workers, emphasizing D&I initiatives, and paying well.

100 Best Companies 2024-Dow

This is the fourth year Dow has made the list, and it climbed 10 spots this year. The plastics and industrial-supplies manufacturer operates sites in 31 countries, and 60% of its workforce have on-the-ground roles like plant operators, engineers, and maintenance workers. Off the ground, its workers include researchers, scientists, information systems professionals, and sales staff.&nbsp;&nbsp;Dow’s values, namely personal safety, inclusion and diversity, pay equity, and global humanitarian aid, are part of what makes it a great place to work. Dow offers opportunities to all employees to answer questions and voice concerns through 10 employee resource groups, which saw increased employee participation from 15% in 2017 to nearly 60% of employees this year.&nbsp;&nbsp;It also offers employees access to a well-being portal where they can access rewards for healthy habits—in the first half of last year, the company invested more than $5 million in rewards, and employees have redeemed almost $12 million since the portal launched.

The 26th edition of the list shows how much esteem Big Tech giants command among other business leaders.

The 25th Fortune World’s Most Admired Companies list suggests that tech giants’ peers respect them as much as ever.

Building a culture of trust and transparency is essential to help everyone thrive, especially in rocky economic times.

100 BEST COMPANIES 2023-Dow

Inclusivity is an ongoing priority for this manufacturer of plastics, silicones, and more, which has earned Dow a spot on the Best Companies to Work For list for a third year. 
<ul> 
 	<li>To ensure its efforts don’t falter, Dow built a scorecard for diversity and inclusion metrics, which provides transparency for how each segment of the company is progressing. A separate workforce dashboard for leaders gives them visibility into the diversity breakdown of their team.</li> 
 	<li>The company’s Peer Allies program randomly assigns participants a new peer/ally connection each month, encouraging them to meet for at least one 30-minute one-on-one conversation. So far, more than 1,400 people at all levels throughout the company (making up roughly 10% of the workforce) take part in it.</li> 
 	<li>“Dow is a wonderful company to work for,” said one employee. “The management does a wonderful job meeting you where you are in life and being flexible to allow employees to be productive all while managing their lives.”</li> 
</ul>

The corporations on our annual list of the world’s largest companies delivered a record $41 trillion in aggregate revenues.

At winning companies, 88% of employees would recommend their employer to friends and family.

GPTW World's Best 2023-Dow

GPTW Manufacturing Production Large 2023-Dow

Employees say: 
 
"The way the company is engaged in inclusion and diversity is going beyond words, straight into action. It is clear that Dow puts people first. One recent example is the new parental leave policy, offering the same time off to both parents, either birth or adopting parents, including same-sex parents."

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

F500-2023-075-Dow

The Michigan-based chemical producer boasts close to 38,000 employees across 104 manufacturing sites in 31 countries. 
<ul> 
 	<li>Dow fell 11 spots on this year’s Fortune 500, with $56.9 billion in revenue in 2022, a 3.5% increase from 2021.</li> 
 	<li>In 2023, the multinational’s chairman and CEO, Jim Fitterling, said Dow expects to deliver $1 billion in cost savings by enhancing productivity.</li> 
</ul>

Just as it dominates our economy, Big Tech now dominates Fortune’s annual ranking of corporate reputation.

When it comes to supporting employees, flexibility, diversity, and a few extra paid days off go a long way.

100-Best-2022-Dow

Since 2017, Dow has seen its employee resource groups grow exponentially, jumping from 15% to 52% participation rate, including 98% of its people leaders. Last year it launched an “All In” strategy elevating its focus on gender parity in leadership positions and established a global minimum standard of 16 weeks of paid time off for all new parents. Dow also expanded family and caregiver leave policies to provide employees up to three weeks of paid time off to care for sick or injured family members. Some 86% of employees say that “management is honest and ethical in its business practices.”

Aggregate sales hit $37.8 trillion last year—an increase of 19%, the highest annual growth rate in the list’s history.

Employees say: 
 
“The people in Dow are second-to-none. Our team is comprised of the brightest, most motivated professionals in the world, and I believe every day our team members wake up motivated to truly make this a safer, more inclusive and more sustainable world. I've been a Dow employee for nearly 20 years, and I've never been more proud...nor more motivated...to work for this company.”

This year’s Fortune 500 marks the 68th running of the list.

F500 2022-Dow Inc.

The multinational chemical manufacturer weathered supply-chain constraints and inflated raw-materials prices to deliver a very strong 2021. The company announced revenue of $55 billion in 2021, a 42.6% increase over 2020. Most of Dow’s growth came from its packaging and specialty plastics sales, as the company was able to take advantage of supply bottlenecks and maintain high prices for its products. In 2022, however, Dow is expected to face even higher raw-material and energy costs, as well as the ramifications of suspending its purchases of feedstocks and energy from Russia.

Our 2021 list of the 100 best companies to work for, as ranked by their employees. See which companies made the list.

100 Best Companies 2021-100-The-Dow-Chemical-Company

In the war on COVID-19, Dow supplied armaments to the front lines. The company’s plants—it has 109 manufacturing sites across 31 countries—churned out plastics and chemicals crucial in making personal protective equipment and virus-slaying sanitizers. After producing and donating 100,000 face shields to the state of Michigan, Dow made its designs publicly available for download. The company pumped out more than 880,000 eight-ounce bottles of hand sanitizer per week during the pandemic. Dow also designed, manufactured, and donated thousands of hospital gowns and air purifiers to hospitals, and, in recognition of its employees’ efforts, it awarded $1,000 bonuses to approximately 8,200 workers who kept the lights on at its U.S. factories. “Our leadership insured we helped the community with PPE,” one proud worker says.

Total revenue for the world’s biggest companies fell 4.8% to $31.7 trillion this year—the first decline in half a decade.

<span data-sheets-value="{&quot;1&quot;:2,&quot;2&quot;:&quot;The chemicals giant, which debuted as a stand-alone entity on the Fortune 500 last year, had a rocky 2020, sliding four spots on our list and sustaining a more than 10% hit to revenues as the pandemic initially slammed oil prices and demand for some of Dow’s products. The company cut capital spending by over $700 million from the year prior, but posted year-over-year revenue growth in the fourth quarter as demand recovered. Deadly winter storm Uri knocked Texas offline and temporarily halted Dow’s Gulf Coast operations in early 2021, but the firm still managed to report strong earnings to kick off the year. Now, the chemicals titan is facing a new dynamic: keeping up with rising demand for its products amid tight supply and low inventory. That all bodes well for Dow’s business, at least for now, as CEO Jim Fitterling recently predicted prices for the company’s products should remain elevated. &quot;}" data-sheets-userformat="{&quot;2&quot;:12673,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:2,&quot;11&quot;:4,&quot;15&quot;:&quot;Calibri, Arial&quot;,&quot;16&quot;:11}" data-sheets-textstyleruns="{&quot;1&quot;:0}{&quot;1&quot;:66,&quot;2&quot;:{&quot;6&quot;:1}}{&quot;1&quot;:73}">The chemicals giant had a rocky 2020, sustaining a more than 10% hit to revenues as the pandemic initially slammed oil prices and demand for some of Dow’s products. The company cut capital spending by over $700 million from the year prior, but posted year-over-year revenue growth in the fourth quarter as demand recovered. Deadly winter storm Uri knocked Texas offline and temporarily halted Dow’s Gulf Coast operations in early 2021, but the firm still managed to report strong earnings to kick off the year. Now, the chemicals titan is facing a new dynamic: keeping up with rising demand for its products amid tight supply and low inventory. That all bodes well for Dow’s business, at least for now, as CEO Jim Fitterling recently predicted prices for the company’s products should remain elevated.

Companies on this year's list—which span the electrical, automotive, and medical device industries—invest in and trust their employees.

Best-Workplaces-Large-Manufacturing-Production-2021-DOW

Employees say: 
 
“Regardless of degree, Dow provides an opportunity for a diverse career. If you are a hard worker, embrace challenges, and perform, you can have the ability to work in various roles throughout the company."

This year’s Fortune 500 marks the 67th running of the list.

F500-2021-82-Dow-Inc

<span data-sheets-value="{&quot;1&quot;:2,&quot;2&quot;:&quot;The chemicals giant, which debuted as a stand-alone entity on the Fortune 500 last year, had a rocky 2020, sliding four spots on our list and sustaining a more than 10% hit to revenues as the pandemic initially slammed oil prices and demand for some of Dow’s products. The company cut capital spending by over $700 million from the year prior, but posted year-over-year revenue growth in the fourth quarter as demand recovered. Deadly winter storm Uri knocked Texas offline and temporarily halted Dow’s Gulf Coast operations in early 2021, but the firm still managed to report strong earnings to kick off the year. Now, the chemicals titan is facing a new dynamic: keeping up with rising demand for its products amid tight supply and low inventory. That all bodes well for Dow’s business, at least for now, as CEO Jim Fitterling recently predicted prices for the company’s products should remain elevated. &quot;}" data-sheets-userformat="{&quot;2&quot;:12673,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:2,&quot;11&quot;:4,&quot;15&quot;:&quot;Calibri, Arial&quot;,&quot;16&quot;:11}" data-sheets-textstyleruns="{&quot;1&quot;:0}{&quot;1&quot;:66,&quot;2&quot;:{&quot;6&quot;:1}}{&quot;1&quot;:73}">The chemicals giant, which debuted as a stand-alone entity on the Fortune 500 last year, had a rocky 2020, sliding four spots on our list and sustaining a more than 10% hit to revenues as the pandemic initially slammed oil prices and demand for some of Dow’s products. The company cut capital spending by over $700 million from the year prior, but posted year-over-year revenue growth in the fourth quarter as demand recovered. Deadly winter storm Uri knocked Texas offline and temporarily halted Dow’s Gulf Coast operations in early 2021, but the firm still managed to report strong earnings to kick off the year. Now, the chemicals titan is facing a new dynamic: keeping up with rising demand for its products amid tight supply and low inventory. That all bodes well for Dow’s business, at least for now, as CEO Jim Fitterling recently predicted prices for the company’s products should remain elevated.

This year's Fortune Global 500 generated $33.3 trillion in revenues and $2.1 trillion in profits.

G500-2020-283-Dow

The new Dow came into being, at least officially, when behemoth DowDuPont split itself into three publicly traded entities last year. The now-independent chemicals giant posted $42.9 billion in annual revenue. Since striking out on its own, the company, headquartered in Midland, Mich., has taken steps to deleverage, paying down some $3 billion in debt last year. Still, it lost nearly $1.4 billion in 2019, a figure that includes one-time charges related to its spin off. In 2020 the chemicals space has been hit hard by factors related to plunging oil prices, prompting Dow to announce it would cut spending.

This year's Fortune 500 marks the 66th running of the list.

F500-2020-078-Dow Inc

The new Dow came into being, at least officially, when behemoth DowDuPont split itself into three publicly-traded entities last year. And the now-independent chemicals giant has emerged at a relatively lofty spot on the Fortune 500 ranking, posting $42.9 billion in annual revenue. Since striking out on its own, the company, headquartered in Midland, Mich., has taken steps to deleverage, paying down some $3 billion in debt last year. Still, it lost nearly $1.4 billion in 2019, a figure that includes one-time charges related to its spin off. In 2020 the chemicals space has been hit hard by factors related to plunging oil prices, prompting Dow to announce it would cut spending.

Best Workplaces In Manufacturing And Production

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Dow makes and sells materials science solutions for packaging, infrastructure, mobility, and consumer applications. It is among the world’s largest chemical and plastics producers. Dow’s roots go back to the 1890s. The company was created in its current form after chemical companies Dow and DuPont merged in the 2010s to form DowDuPont; in 2019, the materials science division of the company was spun off from that entity to create Dow Inc.

Q2 2025

Q1 2025

Q4 2024

Dow (DOW): Company Profile, Stock Price, News, Rankings

legacy

Greetings, and welcome to the Dow First Quarter twenty twenty five 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 Reicher.

Good morning. Thank you for joining today. The accompanying slides are provided through this webcast and posted on our website. I'm Andrew Reicher, Dow's Investor Relations' Vice President. Leading today's call are Jim Fitterling, Chair and Chief Executive Officer Jeff Tate, Chief Financial Officer and Karen S.

Carter, Chief Operating Officer. Please note our comments contain forward looking statements and are subject to the related cautionary statement contained in the earnings news release and slides. Please refer to our public filings for further information about principal risks 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 two is our agenda for today's call. Jim will review our first quarter results and further actions we are taking to navigate the prolonged downturn. Karen will provide an overview of our operating segment performance and actions we are taking to improve business results through more efficient resource allocation. She will also provide details around how our advantaged footprint once again demonstrated relatively strong performance versus our peers in our full year 2024 benchmark.

This includes how we expect it to provide mitigation levers that are unique to Dow against the recent geopolitical volatility we have seen. Jeff will share an update on the macroeconomic environment, our modeling guidance and details around the progress of our unique cash levers in the near term. We will close with additional comments about our strategic focus areas. Following that, we will take your questions. Now let me turn the call over to Jim.

Thank you, Andrew. Beginning on Slide three. In the face of volatile macroeconomic conditions, Team Dow focused on operational discipline while taking actions to reduce costs and align capacity to the slower GDP conditions that are impacting our industry. We delivered our sixth consecutive quarter of year over year volume growth and net sales were $10,400,000,000 down 3% versus the year ago period. This reflects declines in all operating segments largely due to margin pressures.

Sequentially, net sales were flat. This reflected lower pricing in Industrial Intermediates and Infrastructure and Performance Materials and Coatings, which was offset by downstream growth in silicones as a result of improvements in home and personal care and electronic end markets, as well as seasonally higher demand in building and construction and DIC. EBITDA was $944,000,000 which is down compared to the same period last year as volume gains were more than offset by margin compression. Cash flow from continuing operations was $104,000,000 and returns to shareholders totaled $494,000,000 of dividends in the quarter. We are taking targeted actions to further reduce costs and support near term cash flow in response to the ongoing macroeconomic weakness.

Our actions include at least $1,000,000,000 in annualized cost reductions by 2026 in areas like purchase services, contract labor and the elimination of approximately 1,500 Dow rolls. We're also delaying construction at our Path to Zero project in Fort Saskatchewan, Alberta, Canada. This will accelerate our CapEx spending reductions this year, reflecting a total decrease of $1,000,000,000 for an enterprise spend of approximately $2,500,000,000 versus our plan of $3,500,000,000 In addition, we are expanding the scope of our previously announced review of select European assets, primarily in polyurethanes. Today, we announced that we have identified three initial assets that we expect to idle or shut down. We remain on track to complete the full review by mid-twenty twenty five, including the best options for our polyurethanes business.

We also received regulatory approval from the Committee on Foreign Investment in the United States for our strategic transaction with Macquarie Asset Management for the sale of our minority stake in select U. S. Gulf Coast infrastructure assets. We expect to receive proceeds of approximately $2,400,000,000 upon closing, which is on track to be completed by May 1, with the potential for an additional $600,000,000 later this year. And lastly, we received a final ruling on the pending Nova litigation for which we expect to receive more than $1,000,000,000 later this year.

The reality is our industry is in one of the most protracted down cycles in decades, facing a third consecutive year of below 3% GDP growth. This has been further exacerbated by geopolitical and macroeconomic concerns, which are weighing on demand globally. In response, Team Dow remains agile, taking quick and decisive actions to reduce our costs, adjust our supply chain and protect and improve our margins. These proactive actions will help us to outperform our peers and ensure long term competitiveness. We also remain committed to a balanced capital allocation approach over the cycle.

Let me delve deeper into the actions that we announced today beginning on Slide four. EMDAU remains focused on disciplined execution to improve profitability and support cash flow, as evidenced by the additional actions we announced today. First, following a comprehensive review, we have made the decision to delay construction at our Path to Zero project in Fort Saskatchewan until market conditions improve. This decision supports our near term cash flow and adjusts the project timing to align with the market recovery. We remain committed to the long term strategic rationale of the project and the growth upside that it will enable in targeted applications like pressure pipe, wire and cable and food packaging.

However, we now see a higher probability of a lower for longer earnings environment, which changes our expectations for when the capacity from this project will be needed. We are steadfastly focused on ensuring returns for the project are above our cost of capital. And because of that, now is the time to delay construction before spending ramps up. As a result of this decision, we now expect our 2025 capital expenditures to be $2,500,000 compared to the original plan of $3,500,000,000 In addition, we are expanding our European asset review to address the ongoing demand challenges and regulatory environment in that region. We have identified three initial upstream assets across each of our operating segments where we expect to either idle or shut down capacity.

These actions will help to further enhance Dow's near term cash flow and align our asset base to the realities of our participation in the region. And importantly, they are additive to our previously announced plans to determine the best strategic option for our polyurethanes business in Europe. The assets we announced today include an ethylene cracker in Bohlen, Germany and chlor alkali and vinyl assets in Schopau, Germany that will likely result in an idle or shutdown. Additionally, we expect to shut down our upstream siloxanes plant in Barrie, The United Kingdom to focus that site on specialty downstream silicones production. Each of these assets represents a meaningful portion of our regional capacity, which is either not fully integrated, resulting in excess merchant sale exposure or is high on our cost curve, where we have better options to supply derivative demand and optimize margins.

Next, I'll turn the call over to Karen, who will unpack our first quarter performance across Dow's operating segments. She will also provide an overview of our business in regard to the current tariff environment.

Thank you, Jim. We are moving with urgency to deliver strong operational and financial results through this persistent down cycle. We are taking a hard look at everything across the enterprise with a sharp focus on driving volume growth, capturing price and taking actions in the near term that will enhance profitability and improve margins. We will continue to accelerate our cost savings actions and are looking for additional opportunities to build on what we are already delivering. Now turning to Packaging and Specialty Plastics results on Slide five.

During our January earnings call, we acknowledged that higher feedstock and energy prices would be a headwind for us in the first quarter. Although we expected these prices to moderate throughout the quarter, they remained elevated, leading to margin compression across the segment. Net sales in the quarter were down compared to the year ago period, driven primarily by pricing pressures in functional polymers from increased competition in Asia Pacific. And the return of our PEH unit drove a 4% volume improvement. Sequentially, net sales were flat.

While we benefited from higher olefins prices in the quarter, polyethylene sales were down, primarily driven by lower sequential export sales following record high industry exports in November and December of last year. Operating EBIT was $342,000,000 reflecting a decrease compared to the year ago period. This was primarily driven by lower integrated margin. Sequentially, operating EBIT decreased as higher input costs pressured margins. This was partly offset by higher equity earnings at our principal joint ventures.

Next is our Industrial Intermediates and Infrastructure segment on Slide six. Looking at first quarter results, net sales declined both year over year and sequentially as market conditions in the segment remained difficult, particularly in our polyurethanes and construction chemicals business, which has a high exposure to durables demand. The segment was able to deliver a 1% volume gain year over year, primarily driven by improved supply availability in our Industrial Solutions business. Sequentially, volume increased as a result of seasonally higher building and construction and de icing fluid demand. We continue to experience stable demand across the energy and pharma end markets.

These are key markets where we are positioning our business for growth. This includes our new alkoxylation expansion in Seadrill, Texas, which we expect to be fully operational by mid-twenty twenty five. We anticipate the project will provide earnings upside in the second half of the year, delivering margins in excess of 1,000 basis points higher than MEG. Operating EBIT for the segment decreased $215,000,000 versus the year ago period. Results were primarily driven by lower prices and higher energy costs, which compressed integrated margins as well as lower equity earnings.

On a sequential basis, operating EBIT decreased, driven by margin compression and higher planned maintenance activity, which were partly offset by volume gains. Moving to the Performance Materials and Coatings segment on Slide 7. We delivered a sixth consecutive quarter of downstream silicones growth. However, overall volume decreased for the segment. This was driven by lower volumes in upstream siloxanes and acrylic monomers.

Net sales in the quarter decreased 4% versus last year. Local price also decreased year over year due to continued siloxanes pricing pressure. Sequentially, net sales increased primarily driven by seasonally higher demand in building and construction end markets, which comprises a significant portion of the segment's sales. We also experienced higher demand for electronics and personal care applications, which have been resilient in markets for us. Operating EBIT was up compared to the year ago period, driven by lower fixed costs, which were partly offset by lower prices.

Sequentially, operating EBIT increased, driven by seasonally higher demand for architectural coatings, which was partly offset by higher planned maintenance activity in North America in preparation for the demand high point of the painting season. Now turning to Slide eight. In addition to the comprehensive set of actions underway, we are adjusting our business to current market realities by leveraging our strategic asset footprint, global reach, low cost positions, and unmatched feedstock flexibility. More specifically, we have a leading or low cost position and world class manufacturing sites in every geography with well developed agile regional supply chain and a deep understanding of the needs of our customers. And we are the only company with integrated polyethylene production on four continents.

In addition, Dow's unique feedstock flexibility allows us to optimize our assets based on regional advantages. We have the ability to crack the most optimal seed slate and have the widest range to take advantage of dynamic periods. This ability to capitalize on preferred feedstocks, paired with our breadth of process technologies, enables Dow to optimize what, where and how we produce our products to best serve our customers. And while the tariff environment remains fluid, we estimate greater than 95% of our North American volume is USMCA compliant, which is an advantage for Dow. There are also areas of our portfolio, mainly MDI and silicones in North America, where we expect additional margin support from our local production as significant Chinese oversupply has forced local markets to go long.

Lastly, we have engaged in rigorous scenario planning to identify potential additional cost pressures and mitigation strategies. Altogether, our unmatched cost position and feedstock flexibility, superior product mix, and geographic diversity are strong differentiators that give Dow a competitive edge today and throughout the cycle. Turning to Slide nine. The proof of Dow's competitive edge is in our annual benchmarking results. Our industry leading feedstock flexibility translates to value through our ethylene and propylene derivatives.

This is coupled with our leading SAR deficiency and Dow's portfolio advantages, which enable higher margins. This is clearly illustrated in terms of EBITDA per pound of polyolefin capacity, which continues to deliver superior results versus competition. The breadth of our portfolio also stands out in downstream silicones, where we grew volume year over year in 2024 and outperformed peers on EBITDA growth. This is just one highlight from our annual benchmarking efforts, which we published on our investor website today. These results once again highlight Dow's performance relative to industry peers as we performed in line or ahead of peers across more than 80% of the metrics we track most closely.

This underscores the power of our competitive advantages and track record of solid execution in various market conditions. 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 10. From a macroeconomic perspective, global demand remains well below historical average GDP levels. Recent disruption from tariffs has weighed on expectations for global economic growth as it has on business and consumer sentiment. We are closely monitoring these factors as they are increasing the probability of a longer time line to mid cycle earnings.

This vigilant monitoring is crucial as we navigate the fluctuating market conditions and ensure our actions are aligned with the evolving economic landscape. We still expect demand to be positive for the year. However, the impact from uncertain trade flows could create additional margin pressure for our portfolio, most notably against the one area where we've seen resilience for some time, the North American consumer. Looking across our four market verticals, in packaging, domestic demand continues to grow in North America. Although as mentioned, we are closely monitoring it for changes due to growing inventories and inflation.

We are not seeing any significant pattern changes in Chinese economic activity, and we see continued softness in Europe. Dow's global footprint with low cost assets in all regions should position us well to navigate current market dynamics. Across infrastructure markets, we have yet to see any meaningful inflection in housing demand, including in China as well as Europe. In The U. S, mortgage rates remain high, resulting in subdued demand and the fourteenth consecutive year over year decline in building permits in March.

Increasing risk to the global economy, including the potential for retaliatory tariffs between multiple countries, is also impacting consumer markets. In March, U. S. Consumer confidence declined to its lowest level in more than four years. And while retail sales were up in China, supported by government stimulus, prices have been deflationary for two consecutive months.

And in mobility, higher tariffs are expected to create further affordability concerns in The U. S, although we saw a temporary spike in auto sales in March ahead of these implementations. In The EU, new car registrations in February saw their largest year over year decline in six months. China auto sales benefited from government incentives and were up 8% year over year in March. Now turning to our outlook on Slide 11.

In today's world, there is a high degree of uncertainty in the market, which makes this a difficult quarter to project. Until negotiations on tariffs are finalized, we expect to see delays in both purchase and investment decisions from consumers as well as corporations. Our outlook today is based on everything we have line of sight to, understanding that we're operating through very dynamic market and geopolitical times. Should we gain insights into substantial changes during the quarter, we're committed to maintaining transparency and will provide timely updates accordingly. Before I get into the details by segment, let me share a couple of enterprise level drivers.

Our cost reduction actions will ramp as the second quarter progresses, providing approximately $50,000,000 of overall benefit versus the first quarter across all three operating segments. Additionally, we expect $50,000,000 in sequential upside following recent winter storms, primarily Enzo, that required us to proactively take units down, resulting in lost production. We will see start up costs related to our incremental higher return growth projects in the second quarter as well as higher planned maintenance activity in packaging and specialty plastics and industrial intermediates and infrastructure. We expect these to be completed through the end of the second quarter, creating an earnings tailwind in the third quarter. With our continued commitment to running our plants safely and reliably, we expect full year plant maintenance activity to be roughly in line with twenty twenty four levels.

Next, I'll turn to our outlook and second quarter guidance by segment. In Packaging and Specialty Plastics, we expect sequential EBITDA to be approximately $50,000,000 more. This is primarily driven by higher planned maintenance activity and lower integrated margins, including fewer merchant sales, which we expect to be partly offset by the initial benefits of our cost reduction actions. In the Industrial, Intermediates and Infrastructure segment, we expect second quarter EBITDA to be roughly flat with first quarter. While we expect to see modest seasonal demand improvements and higher margins for MDI, some of this will be offset by lower anticipated pricing for MEG, driven by increased competition in Asia Pacific as naphtha prices come down with oil.

In addition, we will have costs in the quarter related to a planned turnaround and the start up costs associated with our new alkoxylation capacity in Seadrift, Texas. This new capacity is one of the near term growth investments we've spoken about and should support higher earnings beginning in the third quarter. And in the Performance Materials and Coatings segment, we expect higher sequential EBITDA. This will be driven by a $75,000,000 benefit from seasonal demand improvements for coatings end markets. We also expect continued growth for downstream silicones, where our current expectation is to deliver the seventh consecutive quarter of year over year volume growth.

In summary, we expect second quarter EBITDA to be roughly in line with first quarter levels. We anticipate improved volumes primarily from seasonality and improved margins in certain product chains. With that, higher planned maintenance and onetime startup costs of our new assets are expected to be an offset. Now turning to Slide 12. Dow's commitment to financial discipline provides important flexibility in the midst of this low growth environment and increased macroeconomic and geopolitical uncertainty.

We've outlined to date several proactive actions we're taking to effectively manage this extended down cycle. In total, we expect these actions to provide approximately $6,000,000,000 in near term cash support. This includes our strategic infrastructure transaction, to Dow cash levers, additional cost savings and reduced CapEx. More specifically, our signed agreement with Macquarie Asset Management represents a strategic partnership that has been several years in the making. Dow's sale of a minority equity stake in select infrastructure assets is expected to generate $2,400,000,000 of initial cash proceeds with closing expected by May 1.

Macquarie has the option to increase their stake to 49% for an additional $600,000,000 within six months of closing, which would increase total cash proceeds to approximately $3,000,000,000 for Dow in 2025. The newly formed infrastructure focused company named Diamond Infrastructure Solutions is comprised of assets that support a wide range of services from energy and environmental to infrastructure and pipelines for more than 70 long standing customers. With improved operational efficiencies, we expect it will drive growth with new and existing customers while providing near term financial flexibility for Dow. In addition, the Court of Kings Bench in Alberta, Canada issued a ruling awarding Dow additional compensation for damages incurred through 2018 related to the jointly owned ethylene asset with Nova Chemicals in Joffrey, Alberta, Canada. We expect the final resolution to come this year with cash proceeds exceeding $1,000,000,000 allowing Dow to recover costs from a decade long legal process.

And as Jim mentioned earlier, we now expect our total enterprise 2025 CapEx to be $2,500,000,000 a $1,000,000,000 reduction compared to our original plan of $3,500,000,000 This new target builds on the approximately $400,000,000 reduction that we announced in January. And lastly, we also announced in January that Dow would deliver at least $1,000,000,000 in targeted cost savings on an annual run rate basis in response to the ongoing macroeconomic challenges, and we continue to push the number higher and faster. The cost savings actions aim to improve our margins and long term competitiveness across the economic cycle, and we expect approximately $50,000,000 of in period savings supporting second quarter. As previously shared, we achieved the majority of these cost savings through a reduction in direct cost of 500,000,000 to $700,000,000 primarily focused on purchased services and third party contract labor. We're also implementing a workforce reduction of approximately $1,500 roles globally.

Our collective actions to navigate the realities of the current macroeconomic environment and deliver $6,000,000,000 in cash support over the next two years enabled Dow to maintain our financial flexibility. Our balance sheet remains solid with no substantive debt maturities due until 2027. Aligned to our debt towers, we also recently completed some debt neutral liability management to take advantage of tight spreads and extend our maturities at lower rates. We will continue to seek options where Dow can proactively take action to improve our capital structure through this type of activity or derisking as we've done in the past. We remain focused on delivering on our balanced capital allocation approach over the cycle.

We will continue our practice of managing Dow's capital structure and priorities in order to better position the company to create additional shareholder value. Now I'll turn the call back over to Jim to close things out.

Closing on Slide 13. As our industry weathers the current challenging conditions, we're executing several proactive and decisive actions to improve margins, support near term cash flow and optimize our global portfolio. We're doing so today in a manner that is consistent with our best owner mindset and a balanced capital allocation approach. Our purpose built asset footprint and our low cost feedstock positions primarily in The Americas and The Middle East create a meaningful cost advantage for Dow and provide industry leading flexibility to navigate global trade dynamics. We're focused on improving our margins by reducing our spending and matching regional supply to profitable demand.

As we've outlined throughout today's call, we have line of sight to $6,000,000,000 in near term cash flow improvement, including completing the launch of Diamond Infrastructure Solutions, our strategic and growth focused transaction with Macquarie for up to $3,000,000,000 receiving proceeds from the NOVA judgment, which is expected to be more than $1,000,000,000 delivering at least $1,000,000,000 in cost savings by 2026 delaying construction at our Path to Zero project in Fort Saskatchewan to align with market realities, which will result in reducing our total 2025 enterprise CapEx by approximately $1,000,000,000 and expanding the scope of our strategic review of our polyurethanes asset in Europe by identifying three additional assets that we expect to idle or shut down in the region. In addition, we are nearing the completion of our higher return incremental growth investments in regions where we have energy and feedstock advantages. Three of these projects, one in packaging and specialty plastics and two in industrial solutions will begin to come online at the end of second quarter and show benefit in the third quarter and beyond. The Dow team is closely monitoring the current uncertain macro environment and we are taking the necessary actions to further improve our competitive position, including looking for additional ways to reduce costs and increase our competitiveness.

Our near term strategic priorities are focused on navigating the challenges our industry is facing by delaying the Alberta project, maintaining financial flexibility, protecting our balance sheet, rationalizing assets in high cost regions, reducing costs and focusing on profitable growth, we are positioning Dow for long term success through the cycle. With that, I'll turn it back to Andrew to get us started on the Q and A.

to remind you that our forward looking statements apply to both our prepared remarks and the following Q and A. Operator, please provide the Q instructions.

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

Thank you, and and good morning, everyone. Jim, I I'd like to ask you on Alberta to contextualize a couple of things. First, you you noted in your prepared remarks, a lower for longer environment. So I'm I'm curious if the Board came to that conclusion sort of before or after April 2. And sort of as a follow-up to that, when you talk about taking the delay on Alberta off when market conditions improve, how would you define market conditions improving?

Is that a function of where spreads are? Is it a function of your S and D outlook? Is it a function of oil prices? What are the sort of KPIs you're looking for there?

Morning, Vincent. Thank you. Good question. Yeah. So when we look at the market outlook, our original plan for Alberta was to come up in two phases.

The first phase in 2027, second phase in 2029. And our view had been that we would be seeing a cycle recovery, when that first phase come up. I think with the situation that we're in now, with the uncertainty around where tariffs are gonna land, with the impact that's having on demand, That's driving our lower for longer, outlook on the environment. And we're at a point right now where we can make this decision to have minimal impact on the project. So we've done a lot of groundwork.

We're finishing our engineering work. We've got our long lead time items ordered. We can pause now before we have a big ramp up in, labor in the field, and then we can push some of that work out until we see how things land with tariffs. So we're gonna revisit it on a regular basis. I'd say we we won't revisit it until toward the end of this year, trying to make a call if, ramping up next year is the right answer or if we wait after that.

But I'd say we have to start seeing things moving up and the supply demand balance is, tightening up a bit, and understand how the supply chains are gonna work as we adjust to this tariff environment.

Your next question comes from the line of Mike Sison with Wells Fargo. Please go ahead.

Hey. Good morning. I know it's difficult to to give an outlook for for the full year, but, you know, if you're gonna do one eight, one nine or so in the first half, you know, how could EBITDA get better in the second half? I know you have some cost savings. You know, maybe talk about, you know, what volumes what demand environment could be could be worse, could be better.

But, what could happen in general to have a better second half EBITDA than the first half directionally?

Good morning, Michael. Another good question. So I mentioned on the call that we have obviously three projects that are completing in the second half of the second quarter. And so those will start to be accretive third quarter, fourth quarter capacity and packaging and specialty plastics, and also two additions in industrial solutions. And and both of those, are going into markets where we have a need for those products.

And so I think you'll start to see that come through. One of the pressures we saw in the first quarter, was the fact that all the input costs were higher than we'd anticipated because of the winter weather and the drawdown on inventories. We're starting to see that normalize in second quarter, which you would assume. So I think you're gonna see some energy cost advantages roll through the back half of the year. I I would assume, you know, next winter, depending on what the weather forecast looks like, we're gonna see the same pattern again.

We're gonna have cost reductions. We've got 50,000,000 of cost reductions coming in the second quarter. Our target for the year is 300,000,000. Aaron continues to push for more and faster, but you're gonna start to see that ramp up, to where we get to, the run rate for next year, which is full billion dollars. So that's gonna step in.

And then the wildcard, I would say, is having some visibility to where the supply chains are gonna land. We have an advantage in that we have footprint, Canada, US, Argentina, Middle East. We have the ability to flex the supply chain and to mitigate tariff impacts on where we export our materials. So it's very positive. We also have the advantage that greater than 95% of everything we move between The United States and Canada is USMCA compliant.

So I think those things will will have a positive impact. But we just need a little bit better clarity on on where these tariffs land and what that impact is on overall demand.

Your next question comes from the line of David Begleiter with Deutsche Bank. Please go ahead.

Thank you. Good morning. Jim, on the issue of tariffs, how are you thinking about the impact of the Chinese tariffs on imported U. S. Polyethylene?

And how that might impact domestic polyethylene prices going forward if we do lose that export market for U. S. Produced polyethylene? Thank you.

Good morning, David. Take a shot at that, and then I'll maybe ask Karen to comment on some of

That's, I think, the big question is is all trade, you know, not just polyethylene, but all trade between US, China, where is that gonna land? We have a very active tariff and trade team that is engaged on all sides of that. And, of course, a lot comes down to what's gonna be on an exemption list and what isn't gonna be on an exemption list. So we're optimistic that some discussions will start, and we'll get some clarity around that as the quarter develops. In the meantime, we're doing things that we need to do to flex that supply chain.

Yeah. Sure. I mean, we are well on our way on on reconfiguring our our supply chain. The team has been working since really, you know, the middle of first quarter on this. And so we are able to export quite a bit more product out of Canada.

And then, of course, in The United States, our our low cost position, enables us to produce for the local demand. As a matter of fact, the growth project that Jim alluded to, Poly seven, that's going to start up in second quarter, is going to provide us even more flexibility to supply even more of that U. S. Demand right here. And then, of course, we've got four on four continents and sprayed a polyethylene production.

So think about The Middle East as well, as an opportunity for us to supply demand around the world, but also directly in China. So we are well positioned. We feel good about where we are, and able to to mitigate the tariffs directly. But, again, I just wanna reiterate that the indirect impact is really the biggest concern on overall demand, so we'll continue to watch that as we go forward.

Your next question comes from the line of Chris Parkinson with Wolfe Research. Please go ahead.

Great. Thank you so much for taking my question. So on one hand, the China situation, so a corollary of Dave's question. On one hand, one could argue that the current situation could potentially incentivize the Chinese to further, let's say, push a little bit harder in domestic capacity over the intermediate to long term. And on the other hand, in the near term, there's been a lot of debate about Chinese, you know, NGL imports, given that's where a decent amount of their capacity has also been growing, and there's a debate on, obviously, the feedstock side of it.

Dow (DOW) Q1 2025 Earnings Call Transcript

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