Good day and welcome to the Dow Chemical Company’s Third Quarter 2014 Earnings Results Conference Call. (Operator Instructions) Also, today’s call is being recorded. I would now like to turn the call over to Mr. Jack Broodo, Vice President of Investor Relations. Please go ahead, sir.

Thank you, Lauren. Good morning everyone and welcome. I am Jack Broodo, Dow’s new Vice President of Investor Relations. I am pleased to be joining you on my first earnings call and look forward to meeting many of you in person in the not too distant future. As usual, we’re making this call available to investors and the media via webcast. This call is the property of the Dow Chemical Company. Any redistribution, retransmission or rebroadcast of this call in any form without Dow’s express written consent is strictly prohibited. On the call with me today are Andrew Liveris, Dow’s Chairman and Chief Executive Officer, Bill Weideman, outgoing Executive Vice President and Chief Financial Officer, Howard Ungerleider, Executive Vice President and our new Chief Financial Officer and Doug May, outgoing Vice President, Investor Relations and recently made President of Dow’s Olefins & Aromatics business. Around 7:00 am this morning, October 22, our earnings release went out on business wire and was posted on the internet on dow.com. We have prepared slides to supplement our comments on this conference call. These slides are posted on our website and through the link to our website. Some of our comments today include statements about our expectations for the future. Those expectations involve risks and uncertainties. We cannot guarantee the accuracy of any forecast or estimates, and we don’t plan to update any forward-looking statements during the quarter. If you’d like more information on the risks involved with forward-looking statements, please see our SEC filings. In addition, some of our comments reference non-GAAP financial measures. A reconciliation to the most directly comparable GAAP financial measure and other associated disclosures are contained in our earnings release and on our website. Unless otherwise specified, all comparisons presented today will be on a year-over-year basis. Sales comparisons exclude divestitures, EBITDA, EBITDA margins, return on capital, and earnings comparisons exclude certain items. We will begin today’s call on Slide 3. I will now hand the call over to Andrew.

Thank you, Jack and good morning everyone and thank you all for joining us. This is another strong quarter for Dow and our results on the top and bottom line and they reflect deliberate actions we have taken, and continue to take, to focus on execution, control what we can control, and drive a full array of productivity measures, what we’ve called our self-help measures. These actions demonstrate the advantage of our integrated and diversified business model and how we are successfully leveraging our scale, geographic reach, technology expertise and physical integration to achieve targeted growth at our priority market sectors, especially in times of great volatility. It’s with great pleasure that I introduce, not one but two CFOs and two investor relations VPs in the room with me today. With the luxury of having both Howard and Bill present, I will be handling over a substantial portion of the commentary over to the two of them to address this quarter's outstanding results. The first, Bill, I know I speak on behalf of our colleagues, when I extend my sincere appreciation for your service to Dow, notably your leadership in the company’s Chief Financial Officer role. We have achieved many financial milestones during your tenure in the seat. Thank you for your leadership and for your values. Howard, welcome. You’ve demonstrated significant leadership as a member of my core leadership team over these past many years. I have strong confidence with you in this critical role for Dow. Bill, you’re first.

Thank you, Andrew. Turning to Slides 4 and 5 where I will review the highlights – financial highlights for the quarter. Earnings per share rose to $0.72 on an adjusted basis, up 44% versus the same quarter last year. This represents the eighth consecutive quarter of year-over-year growth in earnings-per-share. We delivered broad-based revenue gains, particularly in performance plastics, performance materials and electronic and functional materials, demonstrating the value of our integrated value chains. In a volatile global environment that we’ve faced again this quarter, our global footprint shine as sales rose in all geographic areas. Most notable was our strength in the Americas, where we are further investing in our industry-leading feedstock advantage and deep integration in downstream value-added products. The benefits of our sharp productivity focus drove EBITDA up 24% to $2.3 billion. Also, adjusted EBITDA margins expanded again this quarter, up more than 240 basis points. In fact, both performance plastics and electronic and functional materials achieved a record third quarter EBITDA. While continued productivity actions and improving market fundamentals across performance materials resulted in a year-over-year EBITDA increase of 61% in this segment, demonstrated the continued positive impact of the company's self-help actions. These factors more than offset the impact of a decline in equity earnings due to higher Sadara spending and the negative impact associated with our ethylene production facility outage in Fort Saskatchewan as we previously announced. Our advantaged positions, our drive for productivity and our geographic diversification, all helped to drive our operating rate to 88% this quarter, a level not seen since 2007. All of this enabled us to return value to you, our shareholders, evidenced by the 4.4 billion in declared dividends and share repurchases we have completed year-to-date. In short, we are focused on maintaining our momentum of further enhancing our OC [ph], increasing profitability, generating cash and maximizing shareholder value. Before I turn the call over to Howard, I’d like to pause for a moment. As you know and as Andrew already mentioned, I have announced my plans to retire from Dow after 38 years of wonderful experience at the company. Howard and I will continue the transition process through the end of the year, but today represents my final earnings call as CFO. I'm very pleased to transition the CFO responsibilities to Howard. Howard’s strong business leadership experience and passion for finance will be a great asset. It has truly been my pleasure to work for such a great company and to work with Andrew and with the other leadership members, Jim, Joe and Howard and all my Dow colleagues. I have been extremely fortunate and I have built lifelong relationships at Dow that I will cherish forever. With that, I’d like to turn it over to Howard.

Thank you very much, Bill and thank you for your leadership as our CFO but also thank you for the many significant contributions that you’ve added so much value over the decades to Dow. I gladly but humbly accept the baton. It's been a real pleasure of getting the opportunity to work with you over the many years and please know that we will all miss you a great deal. Good morning everyone. Now let's walk through some of the insights and what we expect to see in the fourth quarter. We are not planning for any improvement in the macroeconomic environment. That said, we’re positive on fundamentals in performance plastics, even with the headwinds of lower oil. In performance materials, we expect our ongoing focus on self-help actions to enable continued steady improvements for the segment versus the same quarter last year. On a sequential basis, we expect typical downward seasonality within both electronic and functional materials and coatings and infrastructure. While seasonality in ag sciences picks up, we expect full year growth in ag despite weak seed prices. Turnarounds are expected to be higher by approximately 50 million versus the prior quarter and approximately 75 million versus the year ago period. Sequentially, equity earnings are expected to be lower associated with turnarounds at our Kuwait and Prentiss and in addition, we’re expecting higher spending in Fedora [ph] as the joint venture ramps toward first product in the second half of next year. We continue to carefully monitor the current hydrocarbon pricing environment and will leverage our feedstock flexibility to mitigate pricing volatility. Over the long term our view on oil remains constructive and we'll talk about that in a few minutes. In the near-term, however, the situation is volatile and we are well prepared to adapt as needed. On 2015, we will be providing our modeling assumptions at our upcoming investor forum in November in Houston. So yet one more reason to join us in Texas, next month. As you can see in our results, Dow delivered another solid performance, another proof point of our ongoing execution and the outcome of focused actions we continued to take on the top and the bottom line to drive higher profitability, leveraging our integrated value chains. The targeted actions we continue to drive across our portfolio are firmly rooted in this value chain focus. By applying a combination of best owner mindset, capturing opportunities for organic growth, taking advantage of the differentiation enabled by our integration and our geographic reach, and importantly, driving higher returns on capital, we’re leveraging Dow’s capabilities segment by segment and business by business to deliver higher returns. We’re consistently seeing the results of this focus, as you can see on Slide 7, even in a quarter where macroeconomic volatility was amplified. This is most notable in performance materials, a segment where we have committed to improve and where our actions over the last many quarters continue to gain traction. Particularly in polyurethanes and epoxy, here we’ve implemented a broader productivity focus, running a leaner, more efficient model and reducing costs. During the quarter, these actions led to higher volume and increased utilization, enabling stronger results. In areas of our portfolio where fundamentals remain strong, our productivity mindset is providing an additional source of upside on top of end market growth. For example, in electronic and functional materials and in performance plastics, the company achieved record quarterly EBITDA as higher revenues in key businesses were bolstered by aggressive actions we took to capture growing demand. In ag sciences, we achieved a major milestone in the quarter with back-to-back approvals for our Enlist weed control system. Results reflect softening market conditions in a seasonally weak quarter. However our technology investments and our commercialization of new molecules position us well for future growth in this attractive sector. Collectively we continue to pull strategic, operational and financial levers to navigate market uncertainty and to deliver increasing year-over-year results, all while reinforcing our foundation to strengthen returns over the long term. So what are we seeing in our segments? Beginning with electronic materials on Slide 8. While demand for Dow solutions in this sector remained strong, revenues declined slightly versus the year ago period. This was driven primarily by lower sales in films and filters and OLED materials. We do see continued upside on strength [ph] in semiconductor materials, particularly associated with our CMP pads and slurries. Looking forward, we expect market fundamentals in our electronic materials business to remain strong as consumer demand for continuous connectivity and brighter displays and widespread applications ranging from automobiles to homes drive ongoing innovation and growth into 2015. In functional materials, our businesses are delivering customized solutions built on close customer relationships. Dow Microbial Control and Dow Pharma and Food Solutions, both delivered double-digit growth with innovative products targeted at key sectors, including water, energy and pharmaceuticals. Moving forward we expect increased global demand for high-value solutions that require science-driven expertise. Turning to coatings and infrastructure solutions. In Dow Coating Materials, broad-based sales gains reflected the outcome of a combination of operational and strategic actions. This quarter also represented the seventh consecutive quarter of sales gains for this business. In epoxy coatings, for example, ongoing self-help enabled improved results. And while overall coatings market growth has slowed marginally in the third quarter, we do expect positive momentum for the full-year compared with 2013. This, of course, will be tempered slightly by the typical seasonal reduction in demand in the fourth quarter. In Dow Water and Process Solutions, we continue to see strong demand for reverse osmosis and ion exchange technologies. Our outlook for this business remains positive as we expect our leading technology position in this sector to enable top and bottom line growth for 2014 and into next year. Turning to Dow Building and Construction, self-help remains a key area focus and an important driver looking ahead, particularly in Europe, for example, where we have delivered multiple quarters of cost improvement despite lower demand. Shifting now to ag sciences on Slide 10. Our growth fundamentals remained solid and although sales in the quarter were flat, the segment reported record year-to-date sales. EBITDA performance was down versus the same quarter last year due to lower commodity pricing, resulting in fewer ag can [ph] applications. Our advances in innovation are helping to mitigate these current challenging market conditions. For example, year-to-date our sales of new crop protection products were up 18%, led by Isoclast insecticide. Seeds achieved record sales for the third quarter, led by soybeans and sunflower growth in North America and Latin America. Looking forward, North America acres are expected to shift to soybeans, while record acres and inventories are anticipated in the sector. Shifting to performance materials, where our productivity mindset and our ongoing focus on key end markets, such as transportation and oil and gas continues to strengthen this portfolio. For example, polyurethane achieved double-digit sales growth, driven by demand in key sectors, such as consumer comfort, appliance and industrial applications. In the specialty areas of this portfolio, Dow Oil, Gas and Mining delivered record sales due to double-digit growth on strong shale dynamics in North America, as well as project-related demand. And sales gains in Dow Automotive were driven by the adoption of innovative adhesive products, such as our breakthrough BETAMATE technology. Turning to performance materials where we continue to deliver growth across the value chain. In this segment, our low-cost advantage, coupled with higher demand in key sectors, enabled strong sales. Upstream supply tightened on the US Gulf Coast due primarily to scheduled turnarounds and strong derivative demand. Downstream, market demand in packaging, transportation and in hot melt adhesives drove increased sales all of which contributed to record profitability in this segment. Turning now to our six area of strategic focus. They have served as our compass, none more important than maximizing value for you, our shareholders. We have demonstrated over the last many quarters our firm commitment to these plans and factoring the previous three-months we have updated you on each one of these priorities. A critical part of this drive to return value includes our ongoing focus on productivity. By taking actions to reduce our structural costs and streamline our operations we have reduced fixed costs by 3% per year since 2012 compared to the impact of inflation. Additionally, this productivity drive has enabled us to increase operating rates to a level not seen since 2007, as Bill noted earlier. Our focus moving forward leverages our scale and our low-cost production, resulting in increasing sales to the market driven by higher productivity on our assets. We will have much more to say on this at our upcoming investor forum. Looking ahead into 2015, you can think about these priorities moving into the next phase; expanding our view toward longer-term accelerators of value while delivering our results in the short-term. To build upon the offering discussion, I’d like to pause for a moment and step through the performance plastics dynamics, the foundation of which serves as a key source of momentum for our company and addresses several of the priorities on this list. So turning to slide 15, we have best-in-class flexibility and advantaged low-cost positions in the Americas and in Europe. Despite the recent market correction to declining oil prices, lower oil on the whole should help the world economy, particularly in the US, the UK, Japan and China and we would expect this positive impact to become more apparent as we move through 2015. Lower oil prices will certainly to some degree trigger margin compression for the world’s ethane-based crackers. However modeling indicates that even at $80 oil, ethane-based crackers in the Americas will maintain their advantage cost status, as well as their first and second quartile low-cost positions. Lower oil is also a positive for our highly flexible crackers integrated complexes in Europe, where our best-in-class flexibility supports a regional advantaged low-cost position. From a global growth perspective, global GDP is forecast to be 3.4% or perhaps higher in 2015, up from 2.8% this year. Based on this, ethylene operating rates reach pricing power levels in the 2015 and 2016 timeframe. Reflecting this global growth, operating rates are improving, rising from just over 88% at the beginning of this year and heading toward 90% in 2015. Operating rates have been growing about 1% per year. Barring a global slowdown and with industry balances where they are, we would expect this trend to continue, taking operating rates above 91% as we move into 2016, continuing the march toward increasing pricing power for producers. The bottom line is this: we’ve consistently said that feedstock flexibility remains an important aspect of our capabilities, and with high volatility in the oil market, our investments on the US Gulf Coast and our capabilities in Europe have historically and, I expect will again, prove to be a strong structured hedge protecting our low-cost advantages. The benefits of our strength are evident in our performance plastics results where tight supply and demand fundamentals for our advantaged product portfolio in North America, Latin America and Europe are delivering significant profitability. Moving to Slide 16, we continue to apply a best owner lens across our portfolio, driving progress and are committed to actions as a means to enable maximum value creation. Earlier this month we announced that our ANGUS Chemical Company, Sodium Borohydride and AgroFresh businesses are being actively marketed for divestment. As indicated, we expect to complete signing of these transactions by year-end 2014 and close early next year. Collectively these businesses are expected to yield proceeds of approximately $2 billion. In addition, during the quarter we completed the sale of a substantial portion of our North America railcar fleet, an action we committed to last quarter. This strategic step generated more than $400 million in cash proceeds and further, it firmly reinforces the company's commitment to deploy capital to areas where we can generate higher returns. We also continued to make steady progress on the planned carve-out of our chlorine chain, which as we have indicated is expected to generate EBITDA in the range of $500 million annually on a standalone basis. We've taken a number of actions to streamline this value chain and the businesses are demonstrating rising profitability as a result. We have received strong interest and are engaging directly with buyers. In fact, financials are now in the market. The project team is working diligently to stand up the carveout within a separate structure and remains firmly on track to have signed agreements in place by the second quarter of 2015. In all cases, transaction options will be examined to ensure Dow generates maximum value for the businesses and for our shareholders. As we have indicated, we will not sacrifice long-term returns for short-term gains. On top of all these actions, we continue to assess our opportunities to enhance the value created through our major joint ventures, either consolidating or deconsolidating to optimize the value these properties bring for our shareholders. The first step in this drive included the announcement we made earlier this month on our definitive agreement with ExxonMobil which will result in Univation Technologies becoming a wholly-owned subsidiary of Dow. A valuable high-margin business, Univation will enhance our industry-leading performance plastics franchise and further strengthen our leadership position with the UNIPOL PE process which is a high demand technology. To date, our completed divestiture actions totaled $1.3 billion and the expected proceeds of the entire program will now be at the higher end of our $4.5 billion to $6 billion range. Turning to cash on Slide 17. We continue generating returns that exceed the cost of capital. In fact, the return on capital has increased by more than 150 basis points versus the same quarter last year. We’re using this cash to fund our organic growth investment and reward shareholders. Case in point, we rewarded shareholders with $1.3 billion in declared dividends already this year and $3.4 billion in share repurchases in our current program to date. We’re on track to complete this program by the end of this year. Dow’s balance sheet is solid and our capital investments are on track. These investments once completed will serve as a significant new source of cash, allowing us to fund more organic growth and further enhance our ability to reward shareholders. And on that note, I'd like to turn the call back over to Andrew.

Thank you, Howard and if you look at Slide 18, we obviously are going to be talking about our investor forum but before that, it’s been a terrific quarter with our self-help programs delivering in the face of extreme volatility. The market actually is showing us what it's been showing us for several years, that geopolitical unpredictability, speculation, and a jobless recovery are here to stay. That companies need to be agile to respond and they should respond by doing the basic blocking and tackling and doing it faster than their competition. And that the world is commoditizing and to meet this head on, we need to be aggressive portfolio managers, reliable and efficient operators and focus on our strengths while delivering cash for future growth and shareholder remuneration. Our superior integrated global low-cost manufacturing position in chemicals and plastics, with advantaged products in key markets, whether they be in plastics packaging, agriculture, or electronics with presence in key geographies is enviable, because it delivers both short and long-term value. We are relentless in our focus on cost and productivity, where we will sell out our efforts and sell up their product value with innovation. We have a strong balance sheet, getting stronger as our large projects start up next year. So next month, on November 12 and 13 at our investor forum in Freeport and Houston, we will unpack the next phase of Dow strategic execution. We will discuss and reveal increased transparency with our segments, our next phase of productivity, so further to Howard’s comments, we’ve reduced underlying fixed costs enabling us to invest in growth to the tune of more than $1 billion, while reducing overall cost by 3% per year versus inflation since 2012. So today we are announcing that we are committing to a further 1 billion productivity target over the next three years. And we’re going to provide granularity on what this program will look like at our investor forum. We also will discuss our continued address to joint ventures and their future. A sharpened and more targeted market focus, especially in advanced materials and with the resultant decisions on R&D. Granularity on our key divestments, as well as on our growth programs, including but not limited to our Enlist launch. Details on our view of the ethylene cycle and how much cash we will generate in these next few years, and our next phase of shareholder remuneration. We will show our aligned team, organized to execute. We will discuss our metrics and how we are and will continue to be accountable to deliver short and long-term value creation. This is a company where with eight straight quarters of execution behind us, there is no gap between what we say and what we do. Come join us in Houston and Freeport, we will continue that drumbeat. With that, Jack, let's turn to Q&A.

Thank you, Andrew. Now we will move on to your questions. But however I would like to remind you that my comments regarding forward-looking statements and non-GAAP financial measures apply to both our prepared remarks and the following Q&A. Lauren, would you please explain the Q&A procedure?

(Operator Instructions) Our first question comes from Cooley May with Macquarie.

Now despite an operating line result that beat expectations, equity earnings were down 30% year-over-year and corporate costs were up 35% year-over-year, which combined you cut 170 million out of your consolidated profit, if I am looking at it correctly. Howard, how do you think each of [indiscernible] footprint in the 2015 and what do you view as a normal level for corporate costs?

Hi Cooley, you’re not going to throw that to Bill, uh? It’s his last call. Now just kidding Cooley, good to talk to you. I would say that look, on corporate, yeah, corporate was a little bit higher than usual. There was really – the primary reason was some insurance operations which was a benefit a year ago and there was a cost in the quarter. There was also some divestiture expenses and a couple of one-time litigation issues. I would say for modeling purposes going forward on corporate, our guidance remains in the $250 million a quarter range and we will have more to say about corporate at investor day. In terms of equity earnings, I would say that the equity earnings were down, a couple of drivers -- Dow Corning actually increased on improved volumes across both polysilicon and silicon but that was more than offset with the higher spending in Sadara as well as our Kuwait JVs decreased due to lower Kuwait volumes and an impact to MEG in Canada because of a mechanical failure that we had. So those are the two big issues.

Okay. Andrew, my question is for you. Looking out two years, what part of Dow’s business do you think is currently being ignored and offers the most upside potential to your profit base relative to investor expectations at this point?

Well, I think these last few weeks of oil price decline one more time showed – and just a little footnote on oil price, Cooley, if you look at the Brent, actually Brent had a steeper decline, was steeper decline from June to September as it did in the last few weeks. But the fact that we’ve got into the 80s is spooking people. When people do look at us, and then look to next year and the year following, they are not seeing the ethane cycle upside and it’s not being reflected yet in our equity price. I mean that to me is the biggest myth and what people seem to be confusing often is we're making record margins, we just had record margin in this quarter, but that’s off a low-cost base. US shale did not exist in the previous cycle and so we are all making more money, it doesn’t mean that the cycle isn’t here to come based on demand – based on supply demand and therefore price uplift, and as Slide 15 showed, we’ve been having price uplift now for some time based on outages. And outages tell you a lot about what’s going to happen here as demand continues to improve. Low oil price means more demand in the GDP. That actually will help the cycle and they are missing that, only are they missing that, they’re not counting in the big start-ups next year of Sadara, okay that will feed our ability to make more money off a low-cost base with pricing power. Of course they also don’t – and this is of course a problem with everyone, innovation is a hard thing to factor in, and what we're doing and what we’ll do at investor forum is unpack some of our innovation especially around Agro Sciences and especially around Enlist and last but not least, this ongoing productivity self-help drive, I think people are now starting to see it and this announcement that I just made five minutes ago is our relentless drive on productivity will continue and that should be a factor in our ability to continue to expand earnings.

Our next question comes from [Hasan Amit with Allenbacks Global]

You know, a nice bump-up in sort of company like operating rates, good 6% year on year. My question is – and I know it’s a bit broad question but how much of that uplift was a result of sort of declining non-ethane-based feedstock cost through the quarter? So let me ask it slightly differently. So let’s say that if oil prices were at $90 a barrel, or a $100 a barrel, in the next coming quarters, would you still have these elevated operating rates?

Yeah, I mean yes, I think the Americas, for us, are firing on all cylinders. I mean I think our low-cost base in the US, Canada and Argentina, we shouldn't ignore Argentina, is meaning that those operating rates – I mean we’re running a pretty much sold out engine based on low-cost. And so the rest of the world has had to catch up, a low naphtha cost is actually going to help our European and our small exposure in Asia. So now the only foreshadowing again that it’s just going to help our competition as well, but back to my demand point I made on the previous answer to Cooley, ultimately that will help. It’s just something that people aren’t really noticing is what’s happening in propane and what's going to – that’s going to mean a PDH, for example and propane is about to enter our crack slate based on pricing comparative. So much for export terminals, Hasan, I mean and for that matter so much for ethane export terminals. It just takes two weeks of low oil price to get everyone to re-evaluate where low-cost is. Our flexibility on the crack slate is everything and it comes to play right this moment, so advantage those who have got flexible furnaces which is us.

Now obviously say that the currency moves, dollar strengthening and the like, as you think about the net and targets, call it, 10 billion in EBITDA, how should we be thinking about the FX side of things?

Really, from a currency impact, it doesn’t have a significant impact on us, so that’s why we don’t spend a lot of time talking about currency. Actually this quarter there were some movements as you know and the dollar strengthened throughout this quarter but actually the currency impact on our sales line was fairly small. Don't forget that the currency move impacts the both the top line but also your cost. And so the net impact is not very resizable. It did have a little bit of impact on our equity this quarter – on our balance sheet, I am sorry because of the translation impact but really from an income statement not a lot of impact.

Just to add on to Bill’s point, I would say that the headwind was about $0.04 a share versus the prior quarter. So you could expect it to also be a headwind as we head into the fourth quarter here with the move. But hopefully I will continue in Bill’s tradition and the long-standing CFO tradition that we don't really talk about currency as a headwind or a tailwind.

Our next question comes from John Roberts with UBS.

I would agree with low oil prices should help stimulate demand in the intermediate term but in the short-term do you think we have an inventory correction especially around year-end that might depress volume temporarily?

John, that’s a fair point. I mean I think Howard said it in his remarks, when we were dwelling on Slide 15, and again – who is perfect in the forecasting world here but as far as we see the supply-chains and value chains, given that year-end, given that people look at December in a certain way, we always see this O shaped quarters and inventory is a big factor in all of these conversations. People do in fact clear the books in December; factories do come down, inventory clearing does happen. But you remember inventory is a very low across the value chains right now. And so that’s at the polymer end, and at the monomer end too. So look, I think your point is fair in the very short term but again you got to look at 2015 and start feeling confident about cycle. I want to keep reminding all of us as you ask these sort of questions, we’ve been working on this for eight straight quarters, as sustainable profits. This isn’t come in this quarter and the fact that there’s some margin expansion going on, that’s actually a sustained margin expansion conversation and we've always talked about self-help as the tailwind but then adds another tailwind called margin expansion based on the product cycle, and I think one quarter, this next quarter, I think there will be some maybe slight depression or compression based on the fact that there may be slower demand and the oil price effect. But it will rewrite itself next year.

And at the investor day do you think you'll know the structure of the chlorine transaction whether it's one or more deals and whether it involves JVs?

As our slide said that financials are in the market, we've always said strong interest, people are now receiving their books and – but it’s too early point but they do unpack to that degree but we will unpack as much as we can. We know everyone like you is hungry for more details on that. We are quite confident on our upper end of that target because of what we’re seeing is very strong buyer interest.

Our next question comes from Bob Koort with Goldman Sachs.

Andrew, you mentioned when you come down here to Houston, you’re going to have, one of the discussion topics would be increased transparency within the segments; can you give us a better sense of what you mean and what you expect or hope to achieve from doing that?

So why don’t I let Howard have a shot at it and then I will add as required. Go ahead, Howard.

Hey Bob, hopefully you get the weather good for us down there because we’re definitely heading into the colder season here in Michigan. It's really all about improving our transparency and improving our granularity and trying to really line it up based on markets and based on value chains and based on our integration. So that’s how we are thinking about it and we will have a lot more to say when we see you next month.

We will show you more information in terms of the – our view of those segments going forward, in terms of what our expectations are. So again with this drumbeat in terms of delivering what we say we are going to deliver.

I would add – look, Bob, I am very conscious of the other side of your question, what you did not ask, which is companies like ours and competitive sets, we want to be as good as our competitors are and slightly better at transparency but not a whole lot better because we don't want to give away competitive information. And we get a lot of inventory feedback on this question by the way. We have been out in the road a lot this year, asking exactly the question you are asking.

I guess maybe the heard of my question is the revelation of this additional detail is going to result in some inspiration for your shareholders, will there be things they learn that put Dow on a better light or that show more effective management of the business, or what do you expect to get from that granularity and transparency?

Well, I will tell you what we are not looking for. We’re not looking to confuse you or anyone. We’re not looking to make it harder for you to follow-ups, so in the spirit of moving in the right direction we want transparency but not to a fault, so people understand how and where we make money, about how and where we make money over a cycle.

And add to that, Bob, so, and to really give you more information so you can understand the company. So we will plan to show you more level of detail in our corporate segment, what’s in there, how do our costs and allocation work, how do we assign cost to businesses, how do we transfer, our transfer pricing etc. So with the spirit of trying to give you more information to understand, you understand the company.

Our next question comes from Jeff Zekauskas with JPMorgan.

When you sell your assets and hopefully next year you will get your $6 billion, what do you plan to do with it and I guess there are two cases if you can buyback your preferred or if you can’t, so in the case of being able to buy back the preferred, what do you do with the extra 2 billion, do you contract the company by buying shares or do you acquire? And if you can’t buy back the preferred what do you do with 6 billion?

I would say – the first priorities remain shareholder remuneration, you can think about that both in dividend growth as well as continued stock buyback. I would also say organic growth in finishing our projects and getting those projects up to speed. Obviously the preferreds have been on Bill’s mind, they will continue to be on my mind and you know we’re going to continue to try to find a path where those -- we can take those out of the structure at the right moment for a fair value for all of our shareholders and then fundamentally – I think the last question where you were leading is Andrew said repeatedly there is going to be no major M&A in our near-term future.

Shareholder remuneration through share buyback, start to – you saw the slide, if you get the number out, the next of the last slide that had this last 12 months profitable quarters, slide number 17, you should think about that way. We are very shareholder remuneration oriented, the way we’re going to give money back to the holders as the preferred, not the financials – because fundamentally we believe that improvement in ROC, improvement in EBA, improvement in ROE, and Howard and I are going to be working very hard on talking about financial goals going forward. This is a cash machine that’s going to be rewarding shareholders, so we’ve got plenty of growth, that we’re spending quite a lot on investment for future earnings growth. The US Gulf Coast investments, EnList in case in point but shareholder -- friendly shareholder remuneration, that’s the drumbeat.

I know that there's been so much controversy over whether the ag business should be monetized but should the ag business be grown via acquisition, or do you think that that's not something – it doesn't need that extra strength or scale?

It’s got an scale of being part of Dow Chemical Company, 40% of R&D goes to ag. They’ve proven their worth, they have proven to double the business the last five years, the pipeline is rich, very robust, soon to generate much more EBITDA at both cross protection and seeds and traits, and next year or two very key. So I think we’ve got the time to answer your question, I think there's a lot of what I call internal – this is why I say, what Howard said, we don’t need external M&A, we’ve got plenty of internal M&A, which is to acquire more revenue streams by funding – funding electronics, on funding plastic packaging, we’re going deeper and more vertical into markets and businesses that we can grow. Ag has earned its right to play to do out scale in their innovation.

Our next question comes from Peter Butler with Glen Hill Investments.

On the same topic, Andrew, you have been predicting for some time at least one more major consolidation step in the ag chemical sector, do you think Dow would be a player in this and if so, how much does the Enlist approval enhance your negotiations?

Thanks Peter. Yeah Enlist does enhance our leverage on any value creation because its approval which of course is a key approval of the last few weeks have been – to know what we consider the launch, and the launch is next year and this launch is a controlled launch leading to bigger year, the following year in ‘16 as we go into soybeans etc. This is a very big step for our future pipeline value manifesting itself in the current EBITDA. We are no talking NPVs – we are talking about EBITDA coming next year and the following year not just from Enlist but also all the crop protection launches that they have got going on. So these things would transfer now from a pipeline to actual EBITDA stream, the consequence of that means that the value of [dazz] increases substantially and that means – and we’ve always said these two points, no sacred cows, if the future value can be brought to current numbers, then you know we would look at all options and if it is around the consolidation, we would love to be a part of that for more value creation than owning it ourselves. So the best owner mindset applies. Having said that we’ve got pipeline going to EBITDA. We’d like to get that value. Okay. And that’s why we’ve always said what we’ve said. If there is a round of consolidation out there, you can count us being at the table.

In regard to-- we’re getting creeping closer and closer to the uptake on this ethylene cycle and when you look back at some of the previous cycles starting with the one in 1973, a lot of the analysts that follow your stock today weren’t even born probably during that period, before that period. Could you maybe summarize what happens as operating rates edge towards the 90% zone and your customer start getting nervous and start adding the pipeline inventory? Has this process started where are we and what you see happening?

Yeah, the process and there is always a lead indicator called the outages, when outages start affecting pricing as they’re having now and Howard showed at the slide 15, that’s the harbinger of upcoming operating rate that hits the 90s for the industry and as we’ve already indicated Dow’s already there in the Americas. And so it’s really the rest of world getting up there. Predicting the cycle based on outages is a fools darn because if it’s just outages driving up prices temporary, the resiliency of those price increases really comes back to demand and lack of supply. The lack of supply is well documented but there is no fear factor based on supply demand studies that we’ve done and others have done including our competitors that the capacity coming on the U.S. will be enough and soon enough to interrupt that cycle, the cycle that we will see a 15-16 cycle who knows what we would call the cycle whether it be as big as the one in the late 80s or the one that happened a decade ago in ’05 which was shorter. This one looks a little longer. The area under the curve looks quite big based on supply shortage and that because of outages we might get it earlier than maybe otherwise and it could start earlier. We’re not particularly forecasting that. In general low oil, if it impacts positive demand, there may be some price margin compression the very near term John Roberts’ question, but that’s just the head fact. Oil price should go up from here based on healthy economic demand out there whether it be China or Japan or the U.S. or the U.K. needing as that’s a tax break for them, so that will help consumption. So we think this cycle is going to be quite a good cycle and we’re very positioned to get price powers we have been getting based on the outages.

Hi, Peter. This is Howard. I would just say that two other things – one on the supply side and one on the demand side. As we head into an ethylene up cycle uptick, the assets tend to run harder and then they tend to break. I mean every year further the grid becomes a year older and so when you try to run assets really hard to maximize production across the industry, you tend to see more outages as you head in and then on the demand side, the people in the industry spend a lot of time in plastics over the years. You talked about 11-month years. From a demand standpoint you talked about 13-month years and so in an up-cycle where people expect prices to be higher tomorrow, you tend to get 13-month years and maybe one or two or three in a row depending on all the other variables that Andrew talked about.

Our next question comes from Kevin McCarthy with Bank of America Merrill Lynch.

Yes, good morning. Andrew, propane is down about $0.20 a gallon on the U.S. Gulf for over the last 20 days. Can you discuss how much of your feedstock mix you’re able to shift in to propane trying to get a handle on how much you might be able to hammer down U.S. cost to preserve your margins if the high-end of the curve does indeed come down on the back of Brent crude oil?

Propane flexed in the U.S. in terms of substitutability of ethane slate. As you know we’ve all been heavy ethane and very low naphtha, we believe that we can get up to 30%, 40%, as a company 60% in Europe which is a very big one. And from memory, I’m just looking over to Jack over here. I think it’s a little low in the United States. It’s a low 60% as well Jack tells me. That’s a handiness of having the previous hydrocarbon guy. That’s a very helpful question because that actually speaks to what’s going to happen here on low oil price.

I would also say that – you raised a key point because a lot of people in the industry talk about feedstock flexibility and what they really mean is they are switching from propane or other feed to ethane only. We have very much been focused on feedstock flexibility for many, many years. I think we have leading edge flexibility versus the industry on propane and as we do our additional ethane projects, we are not losing or giving up any other flexibility propane or other.

Then you know as a follow-up on the financial side, we’re about two and half months away from the end of the year and presumably completion of your existing share repurchase authorization. When you take into account your prospect of the divestiture proceeds and the progress you have made on the balance sheet, how would it handicap a new authorization at this juncture?

Howard?

We’ll have a lot more to say, Kevin, about that at investor day. I mean as our earnings ramped, we have historically talked about the 45%, 50% payout ratio. And I think as we get these divestiture proceeds you should think about shareholder remuneration being a key part of that. That is our top priority and that you should think about it both from additional stock buyback as well as dividends.

Our next question comes from--

Kevin, thank you. We got time for one or two more calls -- one or two more questions on the call.

Thank you, Sir. Our next question comes from PJ Juvekar with Citi.

Yes, hi, good morning.

Good morning, PJ.

Andrew, if oil space even declines from here, do you think some of the announced ethylene projects in the outer year in 2018 and ’19? Do you think they are at the risks of getting pushed out or even cancelled?

Look, I don’t think so, PJ. I think firstly we’d given you a view on oil as we see it. I do think the journey for oil through ’80 down into the 70s will find its way back to the 100s. I think this is why I think everyone is looking at this from the point of view of supply and demand. It’s being well written. The breakeven price in Middle East and produces, the incremental cost of the marginal producers to produce like tar sands or for that matter U.S. shale. You’ve got to look at this and say look, U.S. ethane advantage is here to stay, it’s going to be here a decade or more based on supply. It could affect LNG projects, though. I think that will be the bigger effect and for that matter ethane exports. I do think that’s the more likely effect, PJ.

Okay. And then secondly you are seeing some declines in crop protection sales. Can you talk about the dynamic going into next year? Do you think with low green prices that crop protection pricing could go down? Thank you.

Yes, look I think there is a-- the crop—camaraderie price of this crop-- this corn harvest, the fact that we’ve had the weather issues. I mean weather are almost impossible to predict. But look we’re watching the prices very, very closely. There is some corn acreage decrease, soy acreage increase. So there’s a rotation going on. Lower prices will result in fewer planted acres and loss of some marginal application volume. So we’re not overly concerned about it right now, but we are watching it very closely. What we get help by is all about new product launches which obviously on patent and it will give us margin expansion even if there is in the more what I would call generic word some price compression.

And our final question comes from Frank Mitsch with Wells Fargo Securities.

Good morning. Hi. Just respond to Peter’s comment, I was actually around in 1973 and I don’t remember the chemical cycle but I do remember the Mets dropped Game 7 of the World Series and I was very upset about that. Hey, congrats to Bill on your pending retirement and obviously to the other gentleman on their new positions. Andrew, you said earlier that we’re not paying enough attention to the self-help and some of the projects that you have coming on and I was wondering if you could give an update on the timing as well as the potential cost versus expectations for the Freeport PDH project, the ethane flexibility project and of course Sadara.

Yes. So mid-2015 port PDH is on track, on schedule, on budget. Feel very, very good about that projects, very close now. LA3, the ethane flexibility project will be Q4 and Sadara is the early start up shale will be as you know that will come in phases. It will be mid-2015, probably the tail end of the Q2, Q3 timeframe. So, very big start-ups for us, a very big impact of the EBITDA lines given this dynamic that we’ve been describing.

Let's keep it in the two-question mode. And look, on the last call, I believe the topic of MLPs came up. And there was some discussion about railcar or pipeline infrastructure. Obviously, you did the sale lease back on the railcar. Where do you stand on the whole MLP discussion?

Well it’s very interesting to see what’s going on now with one of our competitors right now and their MLP float price and where they are. So look as everything tax efficient structures have pluses and minuses, it does for companies like ours pretty limit you much to the new projects, if you now look at them, we’ve looked at the new projects quite a lot and frankly we're not a huge fan -- I mean I think it's going to create complications and it is going to make it very much more difficult especially with all this volatility. So Bill, do you want to –

Yes, we have looked at those Frank, Howard will continue to look at those, there is obviously pros and cons, but you also need to understand also the best ones are to fix return ones but it add more volatility back in your base earnings. Having said that, we are open mind we will continue to look at those as we go forward but as Andrew mentioned they need to -- it would only make sense as some of our new assets that are -- that have a high tax basis.

That ends our question period, we’re going to turn the call over to Andrew for some closing comments.

Yes, so I think in close, a strong for us, eight quarters in a row now. Strong cash flows in the quarter, more to come, the cycle question is a great question in terms of the cash coming and we are already starting to see it, more productivity come, the divestiture questions, we will have lot more granularity at investor day and all of that portfolio moves of the get out of low ROC businesses and bulk up in the organic growth programs that some of the questions were asking about finding ways to continue to grow through internal M&A, no big M&A of the outside type, we don't have any need for it, we have plenty of growth in this company, shareholder enumeration -- remuneration we are going to be very shareholder friendly, have been, we will continue to be and that’s where our cash is going to go. We are listening to our investors and we'd love for you all to come to our investor forum to hear more about how our cash story is going to benefit our investors for the short, medium and long-term.

Thank you everyone for your questions today. As always we appreciate your interest in the Dow Chemical Company. For your reference a copy of our prepared comments will be posted on Dow’s website later today. This concludes our call for today. We look forward to speaking with you again soon.

This concludes today’s conference. Thank you for your participation.