Good morning, everyone. I appreciate you joining us here today. You know, we're excited to have with us Jim Fitterling, Chairman and CEO of Dow. In the audience, we have Pankaj Gupta, Head of IR, and Juan Ilaria from his team. Jim was named CEO of Dow in 2018. He was elected board chair in April 2020. Before becoming CEO, he served as the COO. During his tenure at Dow, Jim has held leadership positions in many of the company's business units, in corporate development, and in operations. He's a passionate advocate for inclusion and diversity. Jim has played a key role in transforming Dow to a company with a deep focus on high-growth, consumer-driven end markets and its next-generation sustainability goals, which I'm sure we will discuss today.
Please join me in welcoming Jim, who will provide some opening remarks, and then we will get into our Q&A.
All right. Thank you, Patrick, and good morning or good afternoon, everyone. I'll begin by recapping our fourth quarter outlook, and then I'll discuss progress on our long-term strategy, which includes today's announcement of reaching final investment decision for our Alberta project. Then I'll close on how we're well positioned to drive shareholder value. If you look at the second slide, during our third quarter earnings call, we outlined our expectations for slower global industrial activity, weak demand in Europe, and a slower than expected recovery in China. Since the call, we've largely seen those trends continue in line with our expectations. Polyethylene prices in the U.S. settled flat in October. However, we have seen lower feedstock costs in the U.S., which have moderated from third quarter levels.
We expect fourth quarter net sales to be near the midpoint of the $10-$10.5 billion range that we provided at third quarter earnings. We also expect fourth quarter earnings to be in line with our previously provided modeling guidance. Despite the slow macroeconomic environment, positive trends in the third quarter lead us to remain cautiously optimistic across our key product chains as we enter next year. Our Decarbonize and Grow and our Transform to Waste strategies uniquely position us to meet demand for more sustainable and circular solutions. Altogether, by 2030, these investments position us to deliver more than $3 billion increase to our underlying earnings through the cycle, while reducing greenhouse gas emissions by 5 million metric tons, as well as commercializing 3 million metric tons of circular and renewable solutions annually.
We continue to make meaningful progress, and today I'm pleased to announce that we reached the final investment decision for our Path2Zero project in Fort Saskatchewan, Alberta. Let me just provide a few more details about that project. Our Alberta project will build upon the strong foundation and the learnings from our Texas-9 cracker, where we have proven best-in-class execution, capital efficiency, reliability, and emissions reduction. Texas-9's delivered more than 15% returns on invested capital since startup in 2017. That project was delivered at a 20% lower capital cost per ton, and it has conversion costs that are more than 65% lower compared to our Dow fleet. It has the lowest CO2 intensity in our fleet, with approximately 60% less CO2 per metric ton than our average cracker, and that is without any decarbonization assets.
We plan to apply all of these learnings to Alberta to drive underlying earning growth improvement of more than $1 billion per year, while eliminating Scope 1 and Scope 2 emissions at the Fort Saskatchewan site. The Alberta advantages give us confidence in our ability to deliver an additional $1 billion in incremental EBITDA annually over the cycle, with returns on invested capital in line or better than the Texas-9 project. First, Canada's feedstock advantage provides Dow with lower cash costs compared to the rest of the world, even more advantage than the US Gulf. In addition, the region has ample existing cost-advantaged ethane supply to support our project. We've leveraged this advantage by securing 20-year contracts with staggered start dates, which help us to mitigate recontracting risks over time.
By leveraging engineering efficiencies, site optimizations, larger scale facilities, and improved construction techniques, Alberta is expected to have a lower capital intensity than Texas-9 , even when including the decarbonization assets. We're also partnering with established and trusted industry leaders, which will further enhance our project execution while reducing Dow's capital outlay. These include Linde as our industrial gas partner for the supply of clean hydrogen and nitrogen, using their world-scale air separation and autothermal reformer complex. Fluor has been contracted to provide front-end engineering and design, procurement, and construction management services. Wolf Midstream will provide a 20-year contract for CO2 transportation along the Alberta trunk line, and Ravago will provide third-party logistics for the finished product.
In addition, ethylene and polyethylene demand is expected to continue to grow at approximately 1.2x-1.4x GDP through 2050, supported by growing population and an increasing need by our customers for low emissions and circular products across high growth segments. I want to highlight that we expect additional upside and value capture from commercializing low and zero emissions product that is not included in the $1 billion earnings growth number that I gave you. As global ethylene and polyethylene demand continues to grow, no new cost advantage ethylene capacity is expected to come online in North America until the 2026-2027 timeframe. Dow will begin construction next year, with phase one startup expected in 2027, and phase two expected in 2029.
The total CapEx spend is expected to be $6.5 billion on this key growth project, with Dow's total enterprise CapEx to ramp to 2024 to approximately $3 billion, and then exceed depreciation and amortization levels annually in 2025, 2026, and 2027. In those years, it'll be in the ballpark of $3 billion-$3.5 billion. We also expect to receive governmental support for this project, totaling more than $1.5 billion in cash and tax incentives for Dow. The majority of these incentives are expected to be received by Dow through 2030, which is closely aligned with our CapEx deployment for the project. We will be executing the project with a disciplined, cost-focused mindset to achieve our targeted startup dates, just like we did with Texas-9.
Over the long run, we remain committed to keeping our CapEx within D&A across the economic cycle, and expect to return to those levels as we complete the project. Dow has a decades-long, robust project execution capability, with an internal EPCM organization that provides thorough oversight and has a consistent focus on cost-effective engineering, procurement, and construction services. Our teams have unique experience with site labor mobilization, optimization through these types of mega projects, which drives productivity, efficiency, and safety, from construction of the cracker through to utilities and derivatives. A program labor agreement has been established with all union and non-union organizations for the Alberta Path2 Zero project, and a focused effort is underway to ensure that Dow provides the site of choice for the Albertan workforce.
The Alberta project will also leverage Dow's large buyer and global sourcing competitiveness, with more than 40 leveraged global program agreements for our material supply contracts being put in place. 100% of the large equipment requiring local fabrication and all other long lead time equipment items have already been placed on order. These orders will help drive cost efficiencies for the project. The project will have a very positive impact on our employees in the community of Fort Saskatchewan, and our collaboration with government officials, our Indigenous neighbors, Alexander First Nation, and other partner companies have been key for this investment to move forward. Our performance year to date demonstrates our continued focus on financial and operational discipline. We remain on track to deliver $1 billion in cost savings in 2023, and remain focused on maximizing cash flow in the current macroeconomic environment.
We've also taken significant action since spin to enhance our financial flexibility, including reducing net debt and pension liabilities by more than $10 billion, with no substantive debt maturities due until 2027, and lowering our cash commitments by approximately $1 billion, driven by significantly lower cash interest and pension liabilities, reduced share count, and no joint venture cash contributions. And while we have ample liquidity to deliver on our capital allocation priorities, we have over $1 billion in additional unique to Dow cash flow levers. These include approximately $500 million from the pending NOVA litigation, continued structural working capital improvements, and other best owner mindset intervention actions.
Our commitment to financial and operational discipline gives us confidence to continue to drive shareholder value, invest in our decarbonize and grow, and Transform the Waste strategies, and maintain a strong balance sheet while proactively navigating the near-term macro challenges. Our consistent execution and commitment to financial and operational discipline since spin have served us well and support our capital allocation priorities across the economic cycle. As a reminder, when Dow merged with DuPont to form DowDuPont, the new Dow transferred approximately $3 billion of earnings to the new DuPont and Corteva companies before spin. The new Dow has already generated a peak earnings level in 2021 that was more than $3 billion higher than the old Dow's prior peak in 2018 on a pro forma basis.
Since spin, the new Dow has demonstrated a track record of a disciplined and balanced capital allocation and focused growth investments across our operating segments. Our cash conversion rate has doubled on a trailing twelve-month basis since spin, and we've returned more than 80% of our operating income to our shareholders, well above our 65% target across the economic cycle. We've also grown operating EBITDA by $1 billion, demonstrating the impact of our focused CapEx investment, and our balance sheet is the strongest it's ever been, driven by our intentional actions since 2018, giving us the flexibility to invest in our Alberta project, which will drive earnings and cash flow higher at or above our enterprise-wide ROC target.
Our long-term decarbonize and grow and transform the waste strategies are expected to increase Dow's underlying EBITDA by more than $3 billion by 2030, with a peak earnings potential of approximately $15 billion by 2030, while also reducing net annual greenhouse gas emissions by 5 million metric tons from Dow's 2020 baseline. So with that, Patrick, I'll turn it over to you, and we can field some questions.
Yeah. Thanks very much. No, very, very exciting announcement on the Alberta Path2Zero project. So maybe I'll just jump on that-
Okay
... so we don't bury the lead. So, you know, you gave a little bit of rationale for why this was, you know, right place, you know, right time, and at the right cost. So maybe I just wanna narrow in on the cost here.
Sure.
So, you know, net of subsidies, it sounds like something in the range of about $5 billion. So maybe remind us, you know, what's the ramp-up gonna be there? You know, how are those, you know, economics potentially de-risked by, you know, premium economics or other forward things that we're not thinking about?
Right. So, two phases to the project, 2027, 2029. The first is an investment in a new cracker: 1.2 million metric tons, and then an expansion of that to bring it up to a grand total of about 1.9 million metric tons total. All the polyethylene derivatives, utilities that go in place. Remember, there's an additional $2 million-$2 billion of investments that are made by third parties.
Right.
Linde, Wolf, others that are gonna support the infrastructure on site. Then your net comment is the $1.5 billion-
Right
... of incentives that we'll get from the government through various different programs that Canada has in place. The other thing I would mention, and I, I talked about it a little bit, this will be as competitive, if not more competitive, than Texas-9, with the added benefit of having zero Scope 1 and 2 emissions. When you think about Texas-9, we, we really achieved a lot in that project. We were able to get it started up first in that wave of expansions. It was the best performance from a capital standpoint in that whole wave. Remember, we had not built a lot of capacity in the United States for more than a decade. So we'll take the learnings from construction techniques and other things that we did right up into Alberta.
You know, these projects don't happen overnight, so there's been a lot of work going on to get us to this point. In our process, when we make final investment decision, we've done enough of the engineering, then we have firm bids in place for more than 85% of the content that goes into the project. So we have very good line of sight to what the CapEx will be for the project, and then our focus shifts towards execution risk, and that's where our own EPCM in-house capability allows us to be. If you think about it, as we are like the supervisor of the project, we don't just hand it over to somebody else to manage it. We are actively in there managing it, mitigating risk with them all the time.
Yeah, I mean, and it sounds, you know, it sounds pretty attractive both on sort of a standalone basis, and you add in the-
Yeah
... you add in the subsidies as well. But, you know, is there any potential for, you know, premium economics? Or in the past you maybe talked about a price on carbon as well.
There is, and we're working through that right now. Our team's actively working on looking at how that low-carbon ethylene would translate into market pricing. And I'd say two things that are underway is very actively working on the standards from an accounting standpoint. So our brand owners actually desire these products, but they also need the auditability, the traceability, and the proof for the low CO2 numbers. This is all done with technology, so there's, you know, the new cracker will have zero Scope 1 and 2 emissions, and then once it's up and running, we will retrofit the existing cracker to have zero Scope 1 and 2 emissions as well. So we'll have enough hydrogen capability to do that.
So that whole site will produce something like 3.2 million metric tons of zero carbon Scope 1 and 2 ethylene, and that has value to the brand owners. They, they will need to make commitments on their products. They need to put it on the labels, make claims, and we're working through the standard systems right now, so they can do that. And we have the capabilities, we have the IT system capabilities to be able to measure that, track it, trace it, get it audited, and provide them the proof that they need for their products.
Got it. That's helpful. And then maybe, you know, we'll definitely go back to, you know, some of the more, you know, circular and, you know, sustainable products.
Sure.
But then I wanna just go to, you know, what everyone's talking about-
Mm-hmm
... right now is the macro. So you just gave the sort of helpful guide where-
Right
... pretty much at expectations for 4Q. So maybe just looking to 2024, we've heard a number of companies talk today and, you know, maybe cautiously optimistic at best is, is the way to describe it.
Yeah.
You know, what are you seeing, you know, makes you more or less confident for next year?
You know, we have a lot of experience going through these cycles and, and we started to see things slow down middle of last year, and so we're... Depending on your math, we're 12-15 months into this. Historically, in the 12-18 months timeframe, you usually start to see things turn, and you see yourself pull out of it. I would say China has not come back as quickly as we thought, but it is starting to come back. The things that give me optimism is, in third quarter, we saw our third consecutive quarter of volume growth in our downstream derivatives on a quarter-by-quarter basis. And then in the third quarter, we saw our first year-over-year volume growth.
So those are positive signs to me that things like destocking are behind us, and that the economy, as we start to see demand pull out, you're gonna see an immediate pull on our chain. And that, that typically happens. We typically. Our industry typically goes into a recession first-
Yeah
... and comes out first, and usually when the destocking happens, there's a big whip saw effect that hits us, and then, you know, when the demand pull comes, it kind of hits us all of a sudden. I would expect, you know, things may start with a gradual improvement, but I think 2024 is gonna be better, and I would say by 2025, we should—by the end of 2024 into the beginning of 2025, you're gonna start to see probably mid-cycle earnings out of the portfolio.
Got it. That's helpful. And just, you know, maybe more specifically on Polyethylene. So, you know, on the one hand, we have elevated oil, it's gas spreads, you know-
Right
... we've been, you know, export strength has been there, but, you know, prices rolled over flat in October.
Yeah.
You know, maybe there's still some signs of, you know, underlying demand weakness. So where, where do we see, you know, polyethylene heading into next year, and, you know, where—which point of the cycle are we at in?
Yeah, volume is moving, so I would say, I don't see real demand weakness. I see obviously, with oil price coming off, you see some-
Yeah
... price off, pressure on price, which I think caused an October rollover. There are still price increases out there for November. But, you know, typically, fourth quarter is not the strongest-
Right
Quarter of the year. So in this kind of season, when you're, you know, between, you know, the peak winter months for heating and oil and gas demand, you can see a bit of a lull in here. So hard to predict from fourth quarter, but my sense is that the volume is there. We've seen export shipments out of the U.S. consecutively every month here for the past several months hit new record levels, so we don't see the supply chain constraints that kind of hampered us a lot during COVID. That availability is there. We don't see a lot of inventory in the chain. We think people have been managing cash pretty closely and have been more hand-to-mouth. And so I think when you see any demand pull, that's gonna come up.
We do see pockets of strength in some other areas, like in our functional polymers area. Those of you who follow, like, chip and semiconductors, and data centers, and what's going on there, demand for wiring cable products is very high right now. Demand for silicones going into manufacturing of chips, and routers, and servers is very high, and that looks like that's gonna be the case for the next few years. Infrastructure is driving things like piping for plastics, and that looks like it's gonna continue. I'd say the biggest drag has been housing and home construction, not just here, but China as well, Europe as well, and we're starting to see some green shoots, I'd say, coming in housing, even though mortgage rates are so tremendously high.
If you believe that interest rates are at the top and may start to decline into next year, then that would start to create a little optimism around housing. We might start to see some positive moves there.
I mean, just across, you know, the context of the whole portfolio, if you do see sort of a, you know, flat to slightly improving housing market next year, do you think there's, you know, been enough sort of destocking across, you know, that part, those end markets, that you'll have some benefit from restock, just on pure normalization in there?
Well, I do think so. I mean, I think, the places where housing hits hard, obviously insulation-
Yeah
... building products, appliances, consumer electronics. You know, those—I mean, you're finding great deals, for example, right now on consumer electronics for the holiday season. So I think you're gonna see a tremendous push there. I think as you start to see new home builds or more people coming in to be first-time home buyers, that tends to pull demand for those products. I don't get the sense that there's a lot of inventory in that part of the chain. I think automotive, which has been a strong suit for most of the year, in fact, here in the U.S. as well as in China, especially EVs in China, continues to look good, and even the OEMs, during the labor negotiations.
Right
... did not slow down. They wanted to keep their workforce moving because they knew that they would reach a contract agreement. I think we're gonna see some positive momentum going into next year.
So you guys have executed a number of investments and, you know, you had some near-term cost actions this year to support, you know-
Right
... support that mid-cycle target that you've talked about, you know, the $3 billion number. So let's start with those $3 billion in savings this year. You know, can you help us understand how much of that was structural versus maybe things like deferred spend that comes back next year?
Well, most all of it was targeted at structural, so there was a little bit on the maintenance side of things that was deferred out. But I would say we have a pretty strong target for next year on maintenance budget as well, so I don't expect a lot of that to snap right back. You know, headcount reduction was an action that we took, so that's still in place. We did a lot on services, and of course, we've got a lot of leverage coming back in from the procurement side, so those things, I think, are still with us. And then the one-time spending item. So it was about $500 million of structural, about $500 million of OpEx, is the way I would look at it.
And I'd say, of the $500 million of OpEx, we should be able to keep almost all of that going into next year. And we are at, right now, we are at kind of the full run rate of in the ballpark of $300-$350 million this quarter. So you're already seeing the full-
Yep
... quarterly run rate from the cost savings. And I think that's one of. Having been through a number of cycles, I think one of the things that we did positively, as soon as we saw the volume decline start to come mid-2022, we said, "We've got to take action and get ahead of it early." And I think that's what's helped underpin quarterly earnings this year.
Maybe just on the 2024 outlook on, you know, things in your control. You've had a number of near-term growth investments, you know, things like debottlenecking. You know, what sort of impact do you expect on 2024 earnings, and if there are any sort of projects that you'd like to highlight?
You got about $250 million of year-over-year EBITDA improvement in 2024 earnings coming from investments that we've already made. These would be in areas like Dow Industrial Solutions, downstream and consumer solutions, some debottlenecking work that we've done in plastics. Those are all additive. We started up the FCDh process, which was a low CO2 process, to go from propane to propylene. It's not a large-scale unit, but it's a 125,000-ton unit at our Plaquemine site, so that's going relatively well. It'll have a full year of operations next year, so that'll be positive. Those benefits will show up in the integration for our polyurethanes business at the Plaquemine site. So I think you've got those things that are in flight.
We continue to invest in our industrial solutions business and our consumer solutions business. And one of the reasons the CapEx will reach the $3 billion-$3.5 billion during that 2025, 2026, 2027, is I don't wanna slow those growth investments in those businesses at the same time we're doing Alberta. And we have the, we have the cash flow and the flexibility to be able to do that and still protect the balance sheet during that time frame.
And then just beyond that, you know, are there any other cost or structural levers you're looking at? Maybe additional asset rationalization in Europe or other regions?
Sure. You know, we had success last year in selling off some infrastructure assets in our U.S. Gulf Coast operations.
Yep.
These are around rail and marine terminals, and that has been a very positive experience. So we were able to keep our own cost structure in terms of those services, but a third-party infrastructure company bought those and provides those services to us, and also now provides services to others in the region. So they've been able to leverage that into growth. We're currently looking at the same kind of structure for more infrastructure assets on the Gulf Coast, including some pipeline assets that we have. And obviously, existing pipeline assets today to grow from is a very positive opportunity, and so we think we're gonna get some high interest in that. So that's a near-term thing that we can do. And then we always constantly look at the portfolio for best owner mindset.
Is there a better alternative for any of the businesses that are inside?
That's helpful. And I'd like to maybe touch on some of the other parts of the decarbonization and growth strategy. You know, one of the things you've talked about is decarbonization of your existing asset fleet. So what's the timeline for decarbonizing some of these assets? And, you know, what would you need to see in terms of maybe it's taxes, incentives to, you know, bring forward some of these investments?
Right. I'll use Canada as an example. Canada's got an existing market price on carbon. I think that's something that... And you've heard a lot of talk about that here in the U.S. I think having a price on carbon incentivizes the investment that needs to happen to make decarbonization work. You also have to have the policies to support it. You have to permit the carbon pipelines, you have to permit the hydrogen pipelines. In our case, in our industry, we did some work with the American Chemistry Council that said 6-8 hydrogen carbon capture hubs in the United States could decarbonize 85% of the industry. And so one of the, one of the beauties of the Canadian project is you're not talking about transporting hydrogen long distances, but the volume that we produce there.
We take ethane, we make ethylene, and we make two byproducts, methane and hydrogen. Off the back of the cracker, we take the methane and hydrogen immediately to an autothermal reformer, make pure hydrogen, and that feeds the furnace for the cracker. So I don't have to have hydrogen storage, I just have a closed-loop system. It's a pretty elegant, simple design, and I don't have to transport hydrogen a long way. I do have to transport CO₂. The autothermal reformer allows you to scrub the CO₂ out more cost effectively, and then the Wolf carbon capture trunk line is there within a few kilometers of our site. We'll tie into that, and we'll take that through them, and they'll work with partners to sequester that underground.
So you need the policies to make that happen, and that's what's happening in the United States right now, is we're trying to get those policies and that infrastructure in place. So Canada had a first-mover advantage. They obviously had the gas supply-
Right
... and availability. We've got a great infrastructure there. They've got a price on carbon. They had a program, very similar to what we have with the IRA, called, a Net Zero Accelerator program, which was to support hydrogen carbon capture. So investments in new technologies, R&D tax credits, to be able to get, recovery of that. The CapEx for actually doing the decarbonization on that big project is about 10% more than the CapEx if that was a standalone project-
Right
... with no decarbonization. So that is not mind-boggling.
Right.
Like, if I was talking to you about green hydrogen, we might be talking about prices that are 4, 5, or many times higher for green hydrogen, but this is incrementally higher. And so a little bit of tax incentive and a price on carbon-
Yep
... goes a long way to close that gap. And then, obviously, the brand owners have a high demand for the product, and they are willing to pay for that. You think of a world today where people are paying more than $100 a ton for offsets that are questionable quality offsets, versus a technology solution, where when we retrofit the existing cracker, we will reduce 1-1.2 million metric tons of CO₂. Verifiable, auditable, can be proved, that is a real reduction in CO₂. The new capacity will have zero CO₂. The retrofit capacity will be a real reduction. When we apply that capability to our other sites in the fleet, by 2050, we can get there. Half of our CO₂ footprint is in ethylene production, half of it is in power and steam.
Mm.
Power and steam, it's a little bit different at every site. Some sites, obviously, can use wind or solar, small sites, standalone sites, so that, that works. Some might use heat pump technology. Some, as we get to the end of life, they may go to a hydrogen-fired boiler, in which case, they may have a very low cost and reliable steam supply at the site. We are looking at some larger sites that don't have crackers, like our Seadrift, Texas site for on-site small modular nuclear. And so those are a range of solutions. We have a pilot plant going with Shell in the Netherlands right now to look at electric cracking furnace coils. That's a little bit longer range.
I'd say the big, the big challenge there, the two big challenges are a material that will stand up to the heat that you need to be able to crack hydrocarbons and have any kind of life to it. So one's a materials challenge, and second is you need low carbon energy to drive that whole thing, and having enough low carbon electricity 24/7 to drive that is gonna be the other big challenge. But we felt like it was worthwhile to do the research on that, to see if that was an option that could work.
So the underlying sort of technical challenge is still sort of there for e-cracking. It's not just the low carbon electricity?
It is. There's still a little materials of construction that we've got to get through. But I think once we prove that out... I mean, look, we can figure out how to make, you know, fighter jets that can handle 3,000 degrees Fahrenheit exhaust gas and stuff, so I think we can figure it out. It's what it's gonna cost us, I think is gonna be the question.
Sure. Yeah. And then maybe just, you know, on the, you know, electricity, you know, power side, you know, you've been open to potentially using small modular nuclear. You have the LOI with X-energy and, you know, Seadrift and-
Right.
So but we've seen some major setbacks for small modular here in the U.S., you know, with delays and CapEx blowouts. So has your thinking changed at all on the prospects for nuclear there? And, you know, how does it fit into broader plans, or is it just one standalone asset there?
I want to go back to process for a minute. So one of the reasons that we got engaged with X-energy was to bring our own project capability in place. And in our industry, compared to, say, the utility industry, where if you have a CapEx overrun, you're gonna roll that into the rate base for the ratepayers. So your focus and your pressure on cost to serve is maybe a little bit different than ours is. You know, we can't be off by $100 a ton. We can't be uncompetitive and still be in the market, so we have to be able to figure out how to do this. So we're working with X-energy to kind of divide and focus our efforts here.
They're obviously focused on the nuclear core of the project, and we're focused on the non-nuclear side of the project, trying to bring our project management capabilities to bear, to say, "How do we get the cost of this whole package down to where industrial users will look at this and say, 'It's a low-cost alternative, and I can make this work?'" And then I'd say the second big challenge is we're working on the fuel supply. I feel good about the ability to get it permitted. I mean, it's a process that you have to go through, and you just have to be very methodical and very focused to go through it, but I think the two of us will get through that fine.
But it's a different fuel type, and so having the fuel supply and sourcing is important. The funding is there for that. You've started to see investments taking shape. There's a company in Ohio now that started up to do high-assay, low-enriched uranium purification. And so there may be potential for another one to go. That's where DOE comes in and is working with us to get the fuel supply set up. So it's longer term, but I feel like we have a, a very good shot to get this up and running by 2030, and it has to be able to be low cost for the industrial side to look at it as a viable option.
Got it. That's helpful. And then maybe just, you know, putting this all together, you know, let's talk about, you know, the balance of the capital allocation strategy. You know, much stronger balance sheet, you know, better free cash flow yield versus prior cycles and... But you now have these substantial growth investments. So how should investors think about, you know, potential shareholder remuneration?
Right. Well, our target is, has been, obviously, we want to support our organic growth investments, run the asset safely and reliably, support that dividend, have enough flexibility to have, you know, be able to do some share buyback to cover dilution and more. I mean, this year we're probably close to $1 billion. I look at Pankaj, $500 million so far this year of share buybacks, so we more than covered dilution already. So we want the flexibility to be able to do that. So we, we kind of go through every year, and we look at a three-year, five-year outlook and say: What are our CapEx needs? What are our priorities on our projects? What are our earnings look like? What's our cash flow look like? And then we set an affordability target, and we make our decisions, and we move forward.
I feel good about our capability to continue to do that. We've got the debt structure in a good place. All of our debt, we don't have any maturities due till 2027. All of our debt is fixed rate funded. We went through a lot of refunding of that debt during the low interest rate time period, so we've got a very good interest rate exposure. We're not exposed on the short-term interest rate side of things. Our pension liabilities are down. As Howard mentioned on the call, in third quarter, we're actively working to retire more of those through annuitization and also, you know, immunizing the pensions in different countries that are already fully funded. So I feel good that we have a good path to be able to do this.
We have to make sure that the investments are accretive, and the investments are accretive on EBITDA basis, and we can manage our affordability, you know, once we get through the project, keeping that CapEx within D&A. I think it's gonna be a pretty strong proposition for people.
Got it. All right, well, we'll finish on that note. So I really appreciate your time today.
Thank you. Thanks, everybody.
Please join me in thanking our speaker, Jim Fitterling.