Dow Inc.

Greetings and welcome to the Dow 4th Quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the form of presentation. If you would like to ask a question at that time, please press star followed by 1 on your telephone keypad. As a reminder, this conference is being recorded. I will now turn it over to Dow Investor Relations Vice President, Andrew Riker. Mr. Riker, you may begin.

Good morning. Thank you for joining today. The accompanying slides are provided through this webcast and posted on our website. I am Andrew Riker, Dow's Investor Relations Vice President. Leading today's call are Jim Federling, Chair and Chief Executive Officer, Jeff Tate, Chief Financial Officer, and Dow's recently appointed Chief Operating Officer, Karen S. Carter. Please note our comments contain forward-looking statements and are subject to the related cautionary statement contained in the earnings news release and slides. Please refer to our public filings for further information about principal risk and uncertainties. Unless otherwise specified, all financials, where applicable, exclude significant items. We will also refer to non-GAAP measures. A reconciliation of the most directly comparable GAAP financial measure and other associated disclosures are contained in the earnings news release that is posted on our website. On slide two is our agenda for today's call. If you will review our fourth quarter and full year results, Aaron will provide an overview of our operating segment performance, and Jeff will share an update on the macroeconomic environment and our modeling guidance for the first quarter. Jim will then provide details on the intentional actions DAO is taking to navigate the prolonged economic downturn and close out the call. Following that, we will take your questions. Now, let me turn the call over to Jim.

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