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Form 8-K DUPONT E I DE NEMOURS & For: Jul 26

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July 26, 2016 6:30 AM EDT
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 
Date of Report (Date of Earliest Event Reported): July 26, 2016
 
E. I. du Pont de Nemours and Company
(Exact Name of Registrant as Specified in Its Charter)
 
Delaware
 
1-815
 
51-0014090
(State or Other Jurisdiction
 
(Commission
 
(I.R.S. Employer
Of Incorporation)
 
File Number)
 
Identification No.)
 
974 Centre Road
Wilmington, Delaware 19805
(Address of principal executive offices)
 
Registrant’s telephone number, including area code:   (302) 774-1000
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
o    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 



Item 2.02     Results of Operations and Financial Condition
On July 26, 2016, the Registrant announced its consolidated financial results for the quarter ended June 30, 2016. A copy of the Registrant’s press release and related presentation are furnished herewith on Form 8-K as Exhibits 99.1 and 99.2, respectively. The information contained in Item 2.02, including Exhibit 99.1 and Exhibit 99.2, of this report on Form 8-K shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and it will not be incorporated by reference into any registration statement or other document filed by the Registrant under the Securities Act of 1933, as amended, or the Exchange Act except as expressly set forth by specific reference in such a filing.

Item 9.01     Financial Statements and Exhibits
(d) Exhibits:
99.1    Press Release dated July 26, 2016
99.2    DuPont Second Quarter 2016 Earnings Presentation dated July 26, 2016








SIGNATURE
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
E. I. DU PONT DE NEMOURS AND COMPANY
 
(Registrant)
 
 
 
 
 
/s/ Jeanmarie F. Desmond
 
Jeanmarie F. Desmond
 
Vice President and Controller
 
July 26, 2016



 
 
 
 
 
Exhibit 99.1
 
 
 
 
 
 
 
 
 
 
July 26, 2016
 
 
 
Media Contact:
Dan Turner
WILMINGTON, Del.
 
 
 
 
302-996-8372
 
 
 
 
 
 
 
 
 
Investor Contact:
302-774-4994

DuPont Reports Second-Quarter 2016 Results

Volumes Grew due to Strength in Agriculture, Performance Materials, and Nutrition & Health

Operating Margins Expanded in all Reportable Segments

Second-Quarter Highlights

•
GAAP1 earnings per share totaled $1.16 versus $1.06 in prior year. Operating earnings2 per share increased 14 percent to $1.24, including $0.05 per share of negative impact from currency.

•
Sales of $7.1 billion reflected 2-percent volume growth, due to Agriculture, Performance Materials and Nutrition & Health. Local price, currency and portfolio in aggregate negatively impacted sales by 3 percent, resulting in total sales declining 1 percent.

•
Agriculture sales reflected 3-percent volume growth, driven by higher corn seed and insecticide sales, partially offset by lower soybean volumes in North America. Volume growth was offset by negative impacts from currency and portfolio.

•
Total company gross margins expanded more than 100 basis points. Total segment operating margins increased about 250 basis points, as operating margins expanded in all reportable segments.
 
•
Total segment pre-tax operating earnings2 of $1,613 million increased 11 percent, despite approximately $60 million of negative impact from currency.

•
GAAP operating costs3 declined by approximately $160 million. Excluding significant items and non-operating pension/OPEB costs, operating costs2 declined by approximately $220 million, a 12-percent reduction versus prior year.

•
GAAP corporate expenses declined 26 percent versus prior year. Excluding significant items, corporate expenses2 declined by $65 million or 44 percent.

•
DuPont now expects full-year 2016 GAAP earnings to be in the range of $2.70 - $2.75 per share and has increased the low-end of its previous 2016 operating earnings2 range by $0.10 per share to $3.15 - $3.20 per share.

WILMINGTON, Del., July 26, 2016 - DuPont (NYSE: DD), a science company that brings world-class, innovative products, materials, and services to the global marketplace, today announced second-quarter 2016 GAAP earnings of $1.16 per share and operating earnings2 of $1.24 per share. Prior year GAAP and operating earnings2 were $1.06 and $1.09 per share, respectively. Refer to Schedule B for details of significant items.


1 Generally Accepted Accounting Principles (GAAP)
2 See schedules A, C, and D for definitions and reconciliations of non-GAAP measures.
3 GAAP operating costs defined as other operating charges, selling, general & administrative, and research & development costs.

E.I. du Pont de Nemours and Company

2

Second-quarter 2016 sales totaled $7.1 billion, down slightly versus prior year as volume growth of 2 percent was more than offset by pressure from local price, currency and portfolio.

“Our continued focus on our plan delivered strong results. Solid execution enabled volume growth of 2 percent, and we expanded operating margins across all reportable segments. Cost savings, mix enrichment from new technologies and lower product costs contributed to the margin expansion. Continued progress on our cost savings program keeps us on track to reach $1 billion on a run-rate basis by year-end,” said Ed Breen, chair and CEO of DuPont. “We are pleased with the overwhelming vote of approval the merger received from our shareholders. We are preparing to hit the ground running immediately after closing, which we continue to expect later this year as we work closely with regulators in all relevant jurisdictions. We look forward to standing up three strong businesses and enhancing our ability to offer innovative, value-added solutions and increased choice to our customers.”

Global Consolidated Net Sales - 2nd Quarter
 
 
Three Months Ended
 
 
 
 
 
 
June 30, 2016
Percentage Change Due to:
(Dollars in millions)
 
$
 
% Change
 
Local Price and Product Mix **
 
Currency
 
Volume **
 
Portfolio/Other
U.S. & Canada
 
$
3,550

 
(1
)
 
(1
)
 
—

 
1

 
(1
)
EMEA*
 
1,418

 
(4
)
 
—

 
—

 
(3
)
 
(1
)
Asia Pacific
 
1,557

 
3

 
(2
)
 
(2
)
 
6

 
1

Latin America
 
536

 
(1
)
 
(1
)
 
(6
)
 
7

 
(1
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Consolidated Net Sales
 
$
7,061

 
(1
)
 
(1
)
 
(1
)
 
2

 
(1
)
 
 
 
 
 
 
 
 
 
 
 
 
 
* Europe, Middle East & Africa
 
 
 
 
 
 
 
 
 
 
 
 
** Organic sales growth is defined as the sum of local price and product mix and volume.


3

Segment Net Sales - 2nd Quarter
 
 
Three Months Ended
 
 
 
 
June, 2016
Percentage Change Due to:
(Dollars in millions)
 
$
 
% Change
 
Local Price and Product Mix
 
Currency
 
Volume
 
Portfolio/Other
Agriculture
 
$
3,218

 
—

 
—

 
(2
)
 
3

 
(1
)
Electronics & Communications
 
494

 
(6
)
 
(2
)
 
—

 
(4
)
 
—

Industrial Biosciences
 
355

 
(1
)
 
—

 
(1
)
 
—

 
—

Nutrition & Health
 
835

 
1

 
(1
)
 
(1
)
 
3

 
—

Performance Materials
 
1,335

 
—

 
(4
)
 
—

 
4

 
—

Protection Solutions
 
786

 
(2
)
 
—

 
—

 
(2
)
 
—

Other
 
38

 
 
 
 
 
 
 
 
 
 
Consolidated Net Sales
 
$
7,061

 
(1
)
 
(1
)
 
(1
)
 
2

 
(1
)



Operating Earnings (1) - 2nd Quarter
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Change vs. 2015
(Dollars in millions)
 
 
2Q16
 
2Q15
 
$
 
%
Agriculture
 
$
865

 
$
772

 
$
93

 
12
 %
Electronics & Communications
 
93

 
89

 
4

 
4
 %
Industrial Biosciences
 
62

 
50

 
12

 
24
 %
Nutrition & Health
 
130

 
100

 
30

 
30
 %
Performance Materials
 
325

 
301

 
24

 
8
 %
Protection Solutions
 
188

 
181

 
7

 
4
 %
Other
 
(50
)
 
(46
)
 
(4
)
 
-9
 %
Total segment operating earnings (2)
 
1,613

 
1,447

 
166

 
11
 %
 
 
 
 
 
 
 
 

Exchange gains (losses) (2),(3)
 
(15
)
 
11

 
(26
)
 
nm

Corporate expenses (2)
 
(83
)
 
(148
)
 
65

 
-44
 %
Interest expense (2)
 
(93
)
 
(74
)
 
(19
)
 
26
 %
Operating earnings before income taxes (1)
 
1,422

 
1,236

 
186

 
15
 %
 
 
 
 
 
 
 
 
 

Provision for income taxes on operating earnings (1)
 
(325
)
 
(237
)
 
(88
)
 


Less: Net income attributable to noncontrolling interests
 
4

 
5

 
(1
)
 

Operating earnings (1)
 
$
1,093

 
$
994

 
$
99

 
10
 %
 
 
 
 
 
 
 
 
 

Operating earnings per share (1)
 
$
1.24

 
$
1.09

 
$
0.15

 
14
 %
GAAP earnings per share
 
$
1.16

 
$
1.06

 
$
0.10

 
9
 %
 
 
 
 
 
 
 
 
 
 
(1)  See Schedules A, C, and D for reconciliations of non-GAAP measures.
(2)  See Schedules B and C for listing of significant items and their impact by segment.
(3)  See Schedule D for additional information on exchange gains and losses.


4

The following is a summary of business results for each of the company’s reportable segments comparing the second quarter with the prior year, unless otherwise noted.

Agriculture - Operating earnings of $865 million increased $93 million, or 12 percent, on lower product costs, higher volumes and cost savings, partially offset by a $36 million negative currency impact.  Increased corn seed and insecticide volumes were partially offset by lower soybean volumes.  Operating margins expanded by 290 basis points.  Excluding the impact of currency, operating earnings increased 17 percent.
Electronics & Communications - Operating earnings of $93 million increased $4 million, or 4 percent, as cost savings and lower product costs more than offset lower demand in consumer electronics and a $1 million negative impact from currency. Operating margins expanded by 200 basis points. Excluding the impact of currency, operating earnings increased 6 percent.
Industrial Biosciences - Operating earnings of $62 million increased $12 million, or 24 percent, on cost savings partially offset by a $3 million negative impact from currency.  Sales growth in bioactives due to benefits from new product introductions in home and personal care and increased demand in biomaterials were offset by lower volume in CleanTech.  Operating margins expanded by about 350 basis points. Excluding the impact of currency, operating earnings increased 30 percent.
Nutrition & Health - Operating earnings of $130 million increased $30 million, or 30 percent, on cost savings and broad-based volume growth led by probiotics and specialty proteins. Operating margins expanded by about 350 basis points. Excluding a $3 million negative impact from currency, operating earnings increased 33 percent.
Performance Materials - Operating earnings of $325 million increased $24 million, or 8 percent. Cost savings, increased demand in automotive markets (primarily in China and North America) and increased volumes for ethylene due to a prior year unplanned ethylene outage, were partially offset by a $16 million negative impact from currency , as well as costs associated with a contractual claim. Operating margins expanded by over 180 basis points. Excluding the impact of currency, operating earnings increased 13 percent.
Protection Solutions - Operating earnings of $188 million increased $7 million, or 4 percent, driven by lower product costs and cost savings, partially offset by lower volumes and a $4 million negative currency impact. Operating margins expanded by about 150 basis points. Volume declines in Nomex® thermal-resistant fiber and Kevlar® high-strength material were driven by weakness in the oil and gas industry and delays in military spending. Excluding the impact of currency, operating earnings increased 6 percent.
2016 Outlook
The company now expects full-year 2016 GAAP earnings to be in the range of $2.70 to $2.75 per share and operating earnings2 to be in the range of $3.15 to $3.20 per share, an increase of $0.10 per share to the low-end of its previously communicated range. The estimated negative currency impact for full-year 2016 is now expected to be about $0.15 per share.  The company continues to expect a benefit of $0.64 per share from the 2016 global cost savings and restructuring plan and a headwind from a higher base tax rate in 2016 of about $0.10 per share.  The company’s full-year 2016 GAAP earnings includes an expected charge of about $0.45 per share for transaction costs associated with the planned merger with Dow. For third-quarter 2016, the company expects operating earnings per share to be 50 percent higher than the prior year.


5

DuPont will hold a conference call and webcast on Tuesday, July 26, 2016, at 8:00 AM EDT to discuss this news release.  The webcast and additional presentation materials can be accessed by visiting the company’s investor website (Events & Presentations) at www.investors.dupont.com.  A replay of the conference call webcast will be available for 90 days by calling 1-630-652-3042, Passcode 7979114#.  For additional information see the investor center at http://www.dupont.com.

Use of Non-GAAP Measures
This earnings release includes information that does not conform to U.S. generally accepted accounting principles (GAAP) and are considered non-GAAP measures. These measures include the company’s consolidated results and earnings per share on an operating earnings basis, which excludes significant items and non-operating pension and other postretirement employee benefit costs (operating earnings and operating EPS), total segment pre-tax operating earnings, operating costs and corporate expenses on an operating earnings basis. Management uses these measures internally for planning, forecasting and evaluating the performance of the Company’s segments, including allocating resources and evaluating incentive compensation. Management believes that these non-GAAP measurements are meaningful to investors as they provide insight with respect to ongoing operating results of the company and provide a more useful comparison of year-over-year results. Additional non-GAAP measures presented in the earnings release include operating EPS and segment operating earnings excluding currency. Management believes that operating EPS and segment operating earnings excluding currency are useful in providing additional perspective regarding business results and trends. These non-GAAP measurements supplement our GAAP disclosures and should not be viewed as an alternative to GAAP measures of performance. Reconciliations of non-GAAP measures to GAAP are provided in schedules A, C and D. Details of significant items are provided in schedule B.

About DuPont
DuPont (NYSE: DD) has been bringing world-class science and engineering to the global marketplace in the form of innovative products, materials, and services since 1802. The company believes that by collaborating with customers, governments, NGOs, and thought leaders we can help find solutions to such global challenges as providing enough healthy food for people everywhere, decreasing dependence on fossil fuels, and protecting life and the environment. For additional information about DuPont and its commitment to inclusive innovation, please visit http://www.dupont.com.

Forward Looking Statements: This communication contains “forward-looking statements” within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In this context, forward-looking statements often address expected future business and financial performance and financial condition, and often contain words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “see,” “will,” “would,” “target,” similar expressions, and variations or negatives of these words.


6

Forward-looking statements by their nature address matters that are, to different degrees, uncertain, such as statements about the consummation of the proposed transaction and the anticipated benefits thereof. Forward-looking statements are not guarantees of future performance and are based on certain assumptions and expectations of future events which may not be realized. Forward-looking statements also involve risks and uncertainties, many of which are beyond the company’s control. Some of the important factors that could cause the company’s actual results to differ materially from those projected in any such forward-looking statements are: fluctuations in energy and raw material prices; failure to develop and market new products and optimally manage product life cycles; ability to respond to market acceptance, rules, regulations and policies affecting products based on biotechnology and, in general, for products for the agriculture industry; outcome of significant litigation and environmental matters, including realization of associated indemnification assets, if any; failure to appropriately manage process safety and product stewardship issues; changes in laws and regulations or political conditions; global economic and capital markets conditions, such as inflation, interest and currency exchange rates; business or supply disruptions; security threats, such as acts of sabotage, terrorism or war, natural disasters and weather events and patterns which could affect demand as well as availability of products for the agriculture industry; ability to protect and enforce the company’s intellectual property rights; successful integration of acquired businesses and separation of underperforming or non-strategic assets or businesses; and risks related to the agreement entered on December 11, 2015, with The Dow Chemical Company pursuant to which the companies have agreed to effect an all-stock merger of equals, including the completion of the proposed transaction on anticipated terms and timing, the ability to fully and timely realize the expected benefits of the proposed transaction and risks related to the intended business separations contemplated to occur after the completion of the proposed transaction. Important risk factors relating to the proposed transaction and intended business separations include, but are not limited to, (i) the completion of the proposed transaction on anticipated terms and timing, including obtaining regulatory approvals, anticipated tax treatment, unforeseen liabilities, future capital expenditures, revenues, expenses, earnings, synergies, economic performance, indebtedness, financial condition, losses, future prospects, business and management strategies for the management, expansion and growth of the new combined company’s operations and other conditions to the completion of the merger, (ii) the ability of Dow and DuPont to integrate the business successfully and to achieve anticipated synergies, risks and costs and pursuit and/or implementation of the potential separations, including anticipated timing, any changes to the configuration of businesses included in the potential separation if implemented, (iii) the intended separation of the agriculture, material science and specialty products businesses of the combined company post-mergers in one or more tax efficient transactions on anticipated terms and timing, including a number of conditions which could delay, prevent or otherwise adversely affect the proposed transactions, including possible issues or delays in obtaining required regulatory approvals or clearances, disruptions in the financial markets or other potential barriers, (iv) potential litigation relating to the proposed transaction that could be instituted against Dow, DuPont or their respective directors, (v) the risk that disruptions from the proposed transaction will harm Dow’s or DuPont’s business, including current plans and operations, (vi) the ability of Dow or DuPont to retain and hire key personnel, (vii) potential adverse reactions or changes to business relationships resulting from the announcement or completion of the merger, (viii) uncertainty as to the long-term value of DowDuPont common stock, (ix) continued availability of capital and financing and rating agency actions, (x) legislative, regulatory and economic developments, (xi) potential business uncertainty, including changes to existing business relationships, during the pendency of the merger that could affect Dow’s and/or DuPont’s financial performance, (xii) certain restrictions during the pendency of the merger that may impact Dow’s or DuPont’s ability to pursue certain business opportunities or strategic transactions and (xiii) unpredictability and severity of catastrophic events, including, but not limited to, acts of terrorism or outbreak of war or hostilities, as well as management’s response to any of the aforementioned factors. These risks, as well as other risks associated with the proposed merger, are more fully discussed in the joint proxy statement/prospectus included in the registration statement on Form S-4 declared effective by the SEC on June 9, 2016 (File No. 333-209869), as last amended, (the “Registration Statement”) in connection with the proposed merger. While the list of factors presented here is, and the list of factors presented in the Registration Statement are, considered representative, no such list should be considered to be a complete statement of all potential risks and uncertainties. Unlisted factors may present significant additional obstacles to the realization of forward-looking statements. Consequences of material differences in results as compared with those anticipated in the forward-looking statements could include, among other things, business disruption, operational problems, financial loss, legal liability to third parties and similar risks, any of which could have a material adverse effect on Dow’s or DuPont’s consolidated financial condition, results of operations, credit rating or liquidity. Neither Dow nor DuPont assumes any obligation to publicly provide revisions or updates to any forward-looking statements regarding the proposed transaction and intended business separations, whether as a result of new information, future developments or otherwise, should circumstances change, except as otherwise required by securities and other applicable laws. The company undertakes no duty to publicly revise or update any forward-looking statements as a result of future developments, or new information or otherwise, should circumstances change, except as otherwise required by securities and other applicable laws.


# # #
7/26/16


7
E.I. du Pont de Nemours and Company
Consolidated Income Statements
(Dollars in millions, except per share amounts)



SCHEDULE A
 
 
 
 
 
 
 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2016
 
2015
 
2016
 
2015
Net sales
$
7,061

 
$
7,121

 
$
14,466

 
$
14,958

Cost of goods sold
3,990

 
4,103

 
8,232

 
8,619

Other operating charges (1)
143

 
174

 
328

 
322

Selling, general and administrative expenses (1)
1,211

 
1,274

 
2,339

 
2,494

Research and development expense
432

 
495

 
850

 
974

Other income, net (1)
(51
)
 
(255
)
 
(423
)
 
(454
)
Interest expense (1)
93

 
94

 
185

 
178

Employee separation / asset related charges, net (1)
(90
)
 
2

 
(13
)
 
40

 
 
 
 
 
 
 
 
Income from continuing operations before income taxes
1,333

 
1,234

 
2,968

 
2,785

Provision for income taxes on continuing operations (1)
306

 
260

 
712

 
790

Income from continuing operations after income taxes
1,027

 
974

 
2,256

 
1,995

Loss from discontinued operations after income taxes
(3
)
 
(29
)
 
—

 
(15
)
 
 
 
 
 
 
 
 
Net income
1,024

 
945

 
2,256

 
1,980

 
 
 
 
 
 
 
 
Less: Net income attributable to noncontrolling interests
4

 
5

 
10

 
9

 
 
 
 
 
 
 
 
Net income attributable to DuPont
$
1,020

 
$
940

 
$
2,246

 
$
1,971

 
 
 
 
 
 
 
 
Basic earnings (loss) per share of common stock:
 
 
 
 
 
 
 
Basic earnings per share of common stock from continuing operations
$
1.17

 
$
1.07

 
$
2.56

 
$
2.19

Basic loss per share of common stock from discontinued operations
—

 
(0.03
)
 
—

 
(0.02
)
Basic earnings per share of common stock (2)
$
1.16

 
$
1.04

 
$
2.56

 
$
2.17

 
 
 
 
 
 
 
 
Diluted earnings (loss) per share of common stock:
 
 
 
 
 
 
 
Diluted earnings per share of common stock from continuing operations
$
1.16

 
$
1.06

 
$
2.55

 
$
2.17

Diluted loss per share of common stock from discontinued operations
—

 
(0.03
)
 
—

 
(0.02
)
Diluted earnings per share of common stock (2)
$
1.16

 
$
1.03

 
$
2.55

 
$
2.15

 
 
 
 
 
 
 
 
Dividends per share of common stock
$
0.38

 
$
0.49

 
$
0.76

 
$
0.96

 
 
 
 
 
 
 
 
Average number of shares outstanding used in earnings (loss) per share (EPS) calculation:
 
 
 
 
 
 
 
  Basic
875,013,000

 
905,761,000

 
874,269,000

 
906,296,000

  Diluted
879,179,000

 
911,681,000

 
878,214,000

 
912,748,000

 
 
 
 
 
 
 
 
Reconciliation of Non-GAAP Measures
 
 
 
 
 
 
 
 
 
 
 
Summary of Earnings Comparison
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2016
 
2015
 
% Change
 
2016
 
2015
 
% Change
Income from continuing operations after income taxes (GAAP)
$
1,027

 
$
974

 
5
%
 
$
2,256

 
$
1,995

 
13
%
Less: Significant items benefit (charge) included in income from continuing operations after income taxes (per Schedule B)
19

 
32

 
 
 
179

 
(25
)
 
 
Non-operating pension/OPEB costs included in income from continuing operations after income taxes (3)
(89
)
 
(57
)
 
 
 
(135
)
 
(136
)
 
 
Net income attributable to noncontrolling interest from continuing operations
4

 
5

 
 
 
10

 
9

 
 
Operating earnings (Non-GAAP) (4)
$
1,093

 
$
994

 
10
%
 
$
2,202

 
$
2,147

 
3
%
 
 
 
 
 
 
 
 
 
 
 
 
Earnings per share from continuing operations (GAAP)
$
1.16

 
$
1.06

 
9
%
 
$
2.55

 
$
2.17

 
18
%
Less: Significant items benefit (charge) included in EPS (per Schedule B)
0.02

 
0.04

 
 
 
0.20

 
(0.02
)
 
 
Non-operating pension/OPEB costs included in EPS (3)
(0.10
)
 
(0.07
)
 
 
 
(0.15
)
 
(0.16
)
 
 
Operating earnings per share (Non-GAAP) (4)
$
1.24

 
$
1.09

 
14
%
 
$
2.50

 
$
2.35

 
6
%
 
 
 
 
 
 
 
 
 
 
 
 

8
E.I. du Pont de Nemours and Company
Condensed Consolidated Balance Sheets
(Dollars in millions, except per share amounts)

SCHEDULE A (continued)
 
 
 
 
June 30,
2016
 
December 31,
2015
Assets
 
 
 
 
Current assets
 
 
 
 
Cash and cash equivalents
 
$
4,411

 
$
5,300

Marketable securities
 
742

 
906

Accounts and notes receivable, net
 
7,656

 
4,643

Inventories
 
4,756

 
6,140

Prepaid expenses
 
526

 
398

Total current assets
 
18,091

 
17,387

Property, plant and equipment, net of accumulated depreciation
   (June 30, 2016- $14,699; December 31, 2015 - $14,346)
 
9,624

 
9,784

Goodwill
 
4,245

 
4,248

Other intangible assets
 
3,967

 
4,144

Investment in affiliates
 
695

 
688

Deferred income taxes
 
4,474

 
3,799

Other assets
 
1,170

 
1,116

Total
 
$
42,266

 
$
41,166

 
 
 
 
 
Liabilities and Equity
 
 
 
 
Current liabilities
 
 
 
 
Accounts payable
 
$
2,244

 
$
3,398

Short-term borrowings and capital lease obligations
 
2,295

 
1,165

Income taxes
 
164

 
173

Other accrued liabilities
 
3,675

 
5,580

Total current liabilities
 
8,378

 
10,316

Long-term borrowings and capital lease obligations
 
8,119

 
7,642

Other liabilities
 
14,818

 
12,591

Deferred income taxes
 
410

 
417

Total liabilities
 
31,725

 
30,966

 
 
 
 
 
Commitments and contingent liabilities
 
 
 
 
 
 
 
 
 
Stockholders' equity
 
 
 
 
Preferred stock
 
237

 
237

Common stock, $0.30 par value; 1,800,000,000 shares authorized;
   Issued at June 30, 2016 - 961,258,000; December 31, 2015 - 958,388,000
 
288

 
288

Additional paid-in capital
 
11,212

 
11,081

Reinvested earnings
 
16,084

 
14,510

Accumulated other comprehensive loss
 
(10,757
)
 
(9,396
)
Common stock held in treasury, at cost (87,041,000 shares at June 30, 2016 and December 31, 2015)
 
(6,727
)
 
(6,727
)
Total DuPont stockholders' equity
 
10,337

 
9,993

Noncontrolling interests
 
204

 
207

Total equity
 
10,541

 
10,200

Total
 
$
42,266

 
$
41,166


9
E.I. du Pont de Nemours and Company
Condensed Consolidated Statement of Cash Flows
(Dollars in millions)


SCHEDULE A (continued)
 
 
Six Months Ended
June 30,
 
2016
 
2015
Total Company
 
 
 
 
 
 
 
Net income
$
2,256

 
$
1,980

Adjustments to reconcile net income to cash used for operating activities:
 
 
 
Depreciation
473

 
615

Amortization of intangible assets
226

 
257

Net periodic pension benefit cost
320

 
294

Contributions to pension plans
(237
)
 
(204
)
Gain on sale of businesses and other assets
(385
)
 
(22
)
Other operating activities - net
378

 
59

Change in operating assets and liabilities - net
(4,534
)
 
(5,024
)
Cash used for operating activities
(1,503
)
 
(2,045
)
Investing activities
 
 
 
Purchases of property, plant and equipment
(507
)
 
(938
)
Investments in affiliates
(2
)
 
(50
)
Proceeds (payments) from sale of businesses and other assets - net
212

 
(29
)
Net decrease (increase) in short-term financial instruments
174

 
(422
)
Foreign currency exchange contract settlements
(280
)
 
443

Other investing activities - net
(15
)
 
13

Cash used for investing activities
(418
)
 
(983
)
Financing activities
 
 
 
Dividends paid to stockholders
(669
)
 
(875
)
Net increase in borrowings
1,632

 
2,110

Repurchase of common stock
—

 
(353
)
Proceeds from exercise of stock options
88

 
201

Other financing activities - net
(14
)
 
(81
)
Cash provided by financing activities
1,037

 
1,002

Effect of exchange rate changes on cash
(5
)
 
(138
)
Decrease in cash and cash equivalents
(889
)
 
(2,164
)
Cash and cash equivalents at beginning of period
5,300

 
6,910

Cash and cash equivalents at end of period
$
4,411

 
$
4,746

 
 
 
 
Reconciliation of Non-GAAP Measure
 
 
 
Calculation of Free Cash Flow - Total Company
 
 
 
 
Six Months Ended
June 30,
 
2016
 
2015
Cash used for operating activities (GAAP)
$
(1,503
)
 
$
(2,045
)
Purchases of property, plant and equipment
(507
)
 
(938
)
Free cash flow (Non-GAAP)
$
(2,010
)
 
$
(2,983
)
 
 
 
 
(1) See Schedule B for detail of significant items.
(2) The sum of the individual earnings per share amounts from continuing operations and discontinued operations may not equal the total company earnings per share amounts due to rounding.
(3) Year to date June 30, 2015 non-operating pension/OPEB costs includes an after-tax exchange loss on foreign pension balances of $23.
(4) Operating earnings and operating earnings per share are defined as earnings from continuing operations excluding significant items and non-operating pension/OPEB costs. Non-operating pension/OPEB costs includes all of the components of net periodic benefit cost from continuing operations with the exception of the service cost component.

10
E.I. du Pont de Nemours and Company
Schedule of Significant Items from Continuing Operations
(Dollars in millions, except per share amounts)


SCHEDULE B
 
 
 
 
 
 
 
 
 
 
SIGNIFICANT ITEMS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pre-tax
 
After-tax
 
($ Per Share)
 
 
2016
 
2015
 
2016
 
2015
 
2016
 
2015
1st Quarter
 
 
 
 
 
 
 
 
 
 
 
Transaction costs (1)
$
(24
)
 
$
(12
)
 
$
(21
)
 
$
(11
)
 
$
(0.02
)
 
$
(0.01
)
Customer claims adjustment/recovery (2)
23

 
35

 
15

 
22

 
0.02

 
0.02

Gain on sale of entity (3)
369

 
—

 
214

 
—

 
0.24

 
—

Restructuring charges, net (4)
(77
)
 
—

 
(48
)
 
—

 
(0.06
)
 
—

Asset impairment charge (5)
—

 
(37
)
 
—

 
(30
)
 
—

 
(0.03
)
Ukraine devaluation (6)
—

 
(40
)
 
—

 
(38
)
 
—

 
(0.04
)
1st Quarter - Total
$
291

 
$
(54
)
 
$
160

 
$
(57
)
 
$
0.18

 
$
(0.06
)
 
 
 
 
 
 
 
 
 
 
 
 
 
2nd Quarter
 
 
 
 
 
 
 
 
 
 
 
Transaction costs (1)
$
(76
)
 
$
(25
)
 
$
(59
)
 
$
(38
)
 
$
(0.07
)
 
$
(0.04
)
Customer claims recovery (2)
30

 
—

 
19

 
—

 
0.02

 
—

Restructuring adjustments / charges (4)
90

 
(2
)
 
59

 
(2
)
 
0.07

 
—

Litigation settlement (7)
—

 
112

 
—

 
72

 
—

 
0.08

2nd Quarter - Total
$
44

 
$
85

 
$
19

 
$
32

 
$
0.02

 
$
0.04

 
 
 
 
 
 
 
 
 
 
 
 
 
Year-to-date Total (8)
$
335

 
$
31

 
$
179

 
$
(25
)
 
$
0.20

 
$
(0.02
)



11
E.I. du Pont de Nemours and Company
Schedule of Significant Items from Continuing Operations
(Dollars in millions, except per share amounts)



(1)
Second quarter and first quarter 2016 included charges of $(76) and $(24), respectively, recorded in selling, general and administrative expenses related to costs associated with the planned merger with the Dow Chemical Company and related activities.
 
Second quarter 2015 included charges of $(25) associated with transaction costs related to the separation of the Performance Chemicals segment consisting of $(5) recorded in other operating charges and $(20) recorded in interest expense. Second quarter 2015 also includes a tax charge of $(17) due to a state tax rate change associated with the separation. First quarter 2015 included charges of $(12) recorded in other operating charges associated with transaction costs related to the separation of the Performance Chemicals segment.
 
 
(2)
The company recorded insurance recoveries of $30 and $35 in the second quarter 2016 and first quarter 2015, respectively, in other operating charges for recovery of costs for customer claims related to the use of the Agriculture's segment Imprelis® herbicide.
First quarter 2016 included a benefit of $23 in other operating charges for reduction in accrual for customer claims related to the use of the Imprelis® herbicide.
 
 
(3)
First quarter 2016 included a gain of $369 recorded in other income, net associated with the sale of the DuPont (Shenzhen) Manufacturing Limited entity, which held certain buildings and other assets. The gain is reflected as a Corporate item.
 
 
(4)
Second quarter 2016 included a $90 benefit recorded in employee separation/asset related charges, net associated with the 2016 Global Cost Savings and Restructuring Program. This benefit was primarily due to the reduction in severance and related benefit costs due to the elimination of positions at a lower cost than expected. The benefit impacted segment earnings as follows: Agriculture - $5, Electronics & Communications - $8, Industrial Biosciences - $3, Nutrition & Health - $12, Performance Materials - $9, Protection Solutions - $7, and Corporate expenses - $46.
 
First quarter 2016 included a $(2) restructuring charge recorded in employee separation/asset related charges, net associated with the 2016 Global Cost Savings and Restructuring Program. This charge was primarily due to the identification of additional projects in certain segments, offset by reduction in severance and related benefit costs. The net charge impacted segment earnings as follows: Agriculture - $(21), Electronics & Communications - $7, Industrial Biosciences - $1, Nutrition & Health - $1, Performance Materials - $(4), Protection Solutions - $3, Other - $(3), and Corporate expenses - $14.
 
First quarter 2016 included a $(75) restructuring charge recorded in employee separation/asset related charges, net related to the decision to not re-start the Agriculture segment's insecticide manufacturing facility at the La Porte site located in La Porte, Texas. The charge included $(41) of asset related charges, $(18) of contract termination costs, and $(16) of employee severance and related benefit costs.
 
Second quarter 2015 included a $(2) restructuring charge recorded in employee separation/asset related charges, net associated with the 2014 restructuring program. These adjustments were primarily due to the identification of additional projects in certain segments, offset by lower than estimated individual severance costs and workforce reductions achieved through non-severance programs. The net reduction impacted segment earnings for the three months ended as follows: Agriculture - $(4), Electronics & Communications - $11, Industrial Biosciences - $(1), Nutrition & Health - $(4), Performance Materials - $(2), Protection Solutions - $1, and Other - $(3).
 
 
(5)
During first quarter of 2015, a $(37) pre-tax impairment charge was recorded in employee separation / asset related charges, net for a cost basis investment within the Other segment. The assessment resulted from the venture's revised operating plan reflecting underperformance of its European wheat based ethanol facility and deteriorating European ethanol market conditions. One of the primary investors has communicated they would not fund the revised operating plan of the investee. As a result, the carrying value of our 6% equity investment in this venture exceeds its fair value.
 
 
(6)
First quarter 2015 included a charge of $(40) in other income, net associated with remeasuring the company’s Ukrainian hryvnia net monetary assets. Ukraine’s central bank adopted a decision to no longer set the indicative hryvnia exchange rate. The hryvnia became a free-floating exchange rate and lost approximately a third of its value through the quarter.
 
 
(7)
Second quarter 2015 included a gain of $112, net of legal expenses, recorded in other income, net related to the company's settlement of a legal claim. This matter relates to the Protection Solutions segment.
 
 
(8)
Earnings per share for the year may not equal the sum of quarterly earnings per share due to the changes in average share calculations.
 
 



12
E.I. du Pont de Nemours and Company
Consolidated Segment Information
(Dollars in millions)


SCHEDULE C
 
 
 
 
 
 
 
 
 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
SEGMENT NET SALES (1)
 
2016
 
2015
 
2016
 
2015
Agriculture
 
$
3,218

 
$
3,218

 
$
7,004

 
$
7,155

Electronics & Communications
 
494

 
528

 
946

 
1,045

Industrial Biosciences
 
355

 
357

 
707

 
707

Nutrition & Health
 
835

 
826

 
1,636

 
1,639

Performance Materials
 
1,335

 
1,338

 
2,584

 
2,719

Protection Solutions
 
786

 
806

 
1,515

 
1,596

Other
 
38

 
48

 
74

 
97

Consolidated net sales
 
$
7,061

 
$
7,121

 
$
14,466

 
$
14,958

 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
SEGMENT OPERATING EARNINGS (1)
 
2016
 
2015
 
2016
 
2015
Agriculture
 
$
865

 
$
772

 
$
1,966

 
$
1,910

Electronics & Communications
 
93

 
89

 
152

 
168

Industrial Biosciences
 
62

 
50

 
125

 
104

Nutrition & Health
 
130

 
100

 
234

 
186

Performance Materials
 
325

 
301

 
598

 
618

Protection Solutions
 
188

 
181

 
364

 
348

Other
 
(50
)
 
(46
)
 
(109
)
 
(77
)
Total segment operating earnings
 
1,613

 
1,447

 
3,330

 
3,257

Corporate expenses
 
(83
)
 
(148
)
 
(169
)
 
(302
)
Interest expense
 
(93
)
 
(74
)
 
(185
)
 
(158
)
Operating earnings before income taxes and exchange (losses) gains
 
1,437

 
1,225

 
2,976

 
2,797

Net exchange (losses) gains (2)
 
(15
)
 
11

 
(136
)
 
153

Operating earnings before income taxes (Non-GAAP)
 
$
1,422

 
$
1,236

 
$
2,840

 
$
2,950

Non-operating pension/OPEB costs (3)
 
(133
)
 
(87
)
 
(207
)
 
(196
)
Total significant items before income taxes
 
44

 
85

 
335

 
31

Income from continuing operations before income taxes (GAAP)
 
$
1,333

 
$
1,234

 
$
2,968

 
$
2,785

 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
SIGNIFICANT ITEMS BY SEGMENT (PRE-TAX) (1)(4)
 
2016
 
2015
 
2016
 
2015
Agriculture
 
$
35

 
$
(4
)
 
$
(38
)
 
$
31

Electronics & Communications
 
8

 
11

 
15

 
11

Industrial Biosciences
 
3

 
(1
)
 
4

 
(1
)
Nutrition & Health
 
12

 
(4
)
 
13

 
(4
)
Performance Materials
 
9

 
(2
)
 
5

 
(2
)
Protection Solutions
 
7

 
113

 
10

 
113

Other
 
—

 
(3
)
 
(3
)
 
(40
)
Total significant items by segment
 
74

 
110

 
6

 
108

Corporate expenses
 
(30
)
 
(5
)
 
329

 
(17
)
Interest expense
 
—

 
(20
)
 
—

 
(20
)
Net exchange gains (losses)
 
—

 
—

 
—

 
(40
)
Total significant items before income taxes
 
$
44

 
$
85

 
$
335

 
$
31


13
E.I. du Pont de Nemours and Company
Consolidated Segment Information
(Dollars in millions)

SCHEDULE C (continued)
 
 
 
 
 
 
 
 
 
 
Reconciliation of Segment Operating Earnings and Operating Earnings EPS excluding the impact of currency (Non-GAAP)
Segment operating earnings and operating earnings per share excluding the impact of currency assumes current operating earnings results using foreign currency exchange rates in effect for the comparable prior-year period.
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
June 30, 2015
 
Three Months Ended
June 30, 2016
 
 
Segment Operating Earnings
 
Segment Operating Earnings
 
Impact of Currency
 
Segment Operating Earnings Excluding Currency
 
% Change
Agriculture
 
$
772

 
$
865

 
$
(36
)
 
$
901

 
17
 %
Electronics & Communications
 
89

 
93

 
(1
)
 
94

 
6

Industrial Biosciences
 
50

 
62

 
(3
)
 
65

 
30

Nutrition & Health
 
100

 
130

 
(3
)
 
133

 
33

Performance Materials
 
301

 
325

 
(16
)
 
341

 
13

Protection Solutions
 
181

 
188

 
(4
)
 
192

 
6

Other
 
(46
)
 
(50
)
 
—

 
(50
)
 
(9
)
Total segment operating earnings
 
$
1,447

 
$
1,613

 
$
(63
)
 
$
1,676

 
16
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
June 30, 2015
 
Three Months Ended
June 30, 2016
 
 
Operating Earnings per share
 (Non-GAAP) (5)
 
Operating Earnings per share
 (Non-GAAP) (5)
 
 Impact of Currency
 
Operating Earnings per share excluding currency
 (Non-GAAP) (5)
 
 % Change
Operating earnings per share (Non-GAAP) (5)
 
$
1.09

 
$
1.24

 
$
(0.05
)
 
$
1.29

 
18
 %
 
 
 
 
 
 
 
 
 
 
 
Corporate Expenses
 
 
 
 
The reconciliation below reflects GAAP corporate expenses excluding significant items.
 
 
 
 
 
Three Months Ended
June 30,
 
 
2016
 
2015
Corporate expenses (GAAP)
 
$
113

 
$
153

Significant items (4)
 
30

 
5

Corporate expenses (Non-GAAP)
 
$
83

 
$
148

 
 
 
 
 
(1) Segment operating earnings is defined as income (loss) from continuing operations before income taxes excluding significant pre-tax benefits (charges), non-operating pension/OPEB costs, exchange gains (losses), corporate expenses and interest. DuPont Sustainable Solutions, previously within the company's Safety & Protection segment (now Protection Solutions) was comprised of two business units: Clean Technologies (CleanTech) and Consulting Solutions.  Effective January 1, 2016, the CleanTech business is reported in the Industrial Biosciences segment and the Consulting Solutions business unit is reported within Other.  Reclassifications of prior year data have been made to conform to current year classifications.
(2)  See Schedule D for additional information on exchange gains and losses.  Year to date June 30, 2015 exchange gains, on an operating earnings basis (Non-GAAP), excludes the impact of a $23 exchange loss on non-operating pension.
(3) Year to date June 30, 2015, non-operating pension/OPEB costs includes a $23 exchange loss on foreign pension balances.
(4)  See Schedule B for detail of significant items.
(5) See Schedule A for reconciliation of operating earnings per share.



14
E.I. du Pont de Nemours and Company
Reconciliation of Non-GAAP Measures
(Dollars in millions, except per share amounts)

SCHEDULE D
 
 
 
 
 
 
 
 
 
Reconciliations of Adjusted EBIT / EBITDA to Consolidated Income Statements
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
 
 
2016
 
2015
 
2016
 
2015
Income from continuing operations before income taxes (GAAP)
 
$
1,333

 
$
1,234

 
$
2,968

 
$
2,785

Add: Significant items benefit before income taxes
 
(44
)
 
(85
)
 
(335
)
 
(31
)
Add: Non-operating pension/OPEB costs (1)
 
133

 
87

 
207

 
196

Operating earnings before income taxes (Non-GAAP)
 
$
1,422

 
$
1,236

 
$
2,840

 
$
2,950

Less: Net income attributable to noncontrolling interests from continuing operations
 
4

 
5

 
10

 
9

Add: Interest expense (2)
 
 
93

 
74

 
185

 
158

Adjusted EBIT from operating earnings (Non-GAAP)
 
1,511

 
1,305

 
3,015

 
3,099

Add: Depreciation and amortization
 
339

 
362

 
699

 
745

Adjusted EBITDA from operating earnings (Non-GAAP)
 
$
1,850

 
$
1,667

 
$
3,714

 
$
3,844


Reconciliation of Operating Costs to Consolidated Income Statement Line Items
GAAP operating costs is defined as other operating charges, selling, general and administrative expenses, and research and development costs. The reconciliation below reflects operating costs excluding significant items and non-operating pension/OPEB costs.
 
 
 
 
 
Three months ended June 30, 2016
 
Three months ended June 30, 2015
 
As Reported (GAAP)
Less: Significant Items (2)
Less: Non-Operating Pension/OPEB Costs

(Non-GAAP)
 
As Reported (GAAP)
Less: Significant Items (2)
Less: Non-Operating Pension/OPEB Costs

(Non-GAAP)
Other operating charges
$
143

$
(30
)
$
—

$
173

 
$
174

$
5

$
—

$
169

Selling, general and administrative expenses
1,211

76

53

1,082

 
1,274

—

35

1,239

Research and development expense
432

—

20

412

 
495

—

13

482

Total
$
1,786

$
46

$
73

$
1,667

 
$
1,943

$
5

$
48

$
1,890


Reconciliation of Operating Earnings Per Share (EPS) Outlook
The reconciliation below represents the company's outlook on an operating earnings basis, defined as earnings excluding significant items and non-operating pension/OPEB costs.
 
 
 
 
 
 
 
 
 
Year Ended December 31,
 
 
 
2016 Outlook
 
2015 Actual
Operating EPS (Non-GAAP)
 
 
$ 3.15 - 3.20

 
$
2.77

 
 
 
 
 
 
Significant items (2)
 
 
 
 
 
Transaction costs (3) 
 
 
(0.45
)
 
(0.07
)
Gain on sale of entity
 
 
0.24

 
—

Restructuring adjustments / charges
 
 
0.01

 
(0.58
)
Customer claims adjustment/recovery
 
 
0.04

 
0.23

Litigation settlement
 
 
—

 
0.10

Asset impairment charge
 
 
—

 
(0.03
)
Ukraine devaluation
 
 
—

 
(0.04
)
 
 
 
 
 
 
Non-operating pension/OPEB costs - estimate (4)
 
 
(0.29
)
 
(0.29
)
 
 
 
 
 
 
EPS from continuing operations (GAAP)
 
 
$ 2.70 - 2.75

 
$
2.09


15
E.I. du Pont de Nemours and Company
Reconciliation of Non-GAAP Measures
(Dollars in millions, except per share amounts)


SCHEDULE D (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Exchange Gains/Losses on Operating Earnings (2)
 
 
 
 
 
 
 
 
The company routinely uses forward exchange contracts to offset its net exposures, by currency, related to the foreign currency denominated monetary assets and liabilities of its operations. The objective of this program is to maintain an approximately balanced position in foreign currencies in order to minimize, on an after-tax basis, the effects of exchange rate changes. The net pre-tax exchange gains and losses are recorded in other income, net and the related tax impact is recorded in provision for (benefit from) income taxes on the Consolidated Income Statements.
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
 
2016
 
2015
 
2016
 
2015
Subsidiary Monetary Position Gain (Loss)
 
 
 
 
 
 
 
 
Pre-tax exchange gains (losses)
 
$
146

 
$
29

 
$
179

 
$
(87
)
Local tax (expenses) benefits
 
(60
)
 
25

 
(47
)
 
(93
)
Net after-tax impact from subsidiary exchange gains (losses)
 
$
86

 
$
54

 
$
132

 
$
(180
)
 
 
 
 
 
 
 
 
 
Hedging Program Gain (Loss)
 
 
 
 
 
 
 
 
Pre-tax exchange (losses) gains
 
$
(161
)
 
$
(18
)
 
$
(315
)
 
$
240

Tax benefits (expenses)
 
58

 
6

 
113

 
(87
)
Net after-tax impact from hedging program exchange (losses) gains
 
$
(103
)
 
$
(12
)
 
$
(202
)
 
$
153

 
 
 
 
 
 
 
 
 
Total Exchange Gain (Loss)
 
 
 
 
 
 
 
 
Pre-tax exchange (losses) gains (5)
 
$
(15
)
 
$
11

 
$
(136
)
 
$
153

Tax (expenses) benefits
 
(2
)
 
31

 
66

 
(180
)
Net after-tax exchange (losses) gains
 
$
(17
)
 
$
42

 
$
(70
)
 
$
(27
)
 
 
 
 
 
 
 
 
 
As shown above, the "Total Exchange Gain (Loss)" is the sum of the "Subsidiary Monetary Position Gain (Loss)" and the "Hedging Program Gain (Loss)."
 
 
 
 
 
 
 
 
 
Reconciliation of Base Income Tax Rate to Effective Income Tax Rate
 
 
 
 
Base income tax rate is defined as the effective income tax rate less the effect of exchange gains (losses), as defined above, significant items and non-operating pension/OPEB costs.
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
 
2016
 
2015
 
2016
 
2015
Income from continuing operations before income taxes (GAAP)
 
$
1,333

 
$
1,234

 
$
2,968

 
$
2,785

Add: Significant items - benefit (2)
 
(44
)
 
(85
)
 
(335
)
 
(31
)
           Non-operating pension/OPEB costs (1)
 
133

 
87

 
207

 
196

Less: Net exchange (losses) gains (5)
 
(15
)
 
11

 
(136
)
 
153

Income from continuing operations before income taxes, significant items,
    exchange (losses) gains, and non-operating pension/OPEB costs (Non-GAAP)
$
1,437

 
$
1,225

 
$
2,976

 
$
2,797

 
 
 
 
 
 
 
 
 
Provision for income taxes on continuing operations (GAAP)
 
$
306

 
$
260

 
$
712

 
$
790

Add: Tax expenses on significant items
 
(25
)
 
(53
)
 
(156
)
 
(56
)
          Tax benefits on non-operating pension/OPEB costs
 
44

 
30

 
72

 
60

          Tax (expenses) benefits on exchange gains/losses
 
(2
)
 
31

 
66

 
(180
)
Provision for income taxes on continuing earnings, excluding exchange gains (losses) (Non-GAAP)
$
323

 
$
268

 
$
694

 
$
614

 
 
 
 
 
 
 
 
 
Effective income tax rate (GAAP)
 
23.0
 %
 
21.1
 %
 
24.0
 %
 
28.4
 %
Significant items and non-operating pension/OPEB costs effect
 
(0.1
)%
 
(1.9
)%
 
(1.9
)%
 
(1.5
)%
Tax rate, from continuing operations before significant items and non-operating pension/OPEB costs
22.9
 %
 
19.2
 %
 
22.1
 %
 
26.9
 %
Exchange (losses) gains effect
 
(0.4
)%
 
2.7
 %
 
1.2
 %
 
(4.9
)%
Base income tax rate from continuing operations (Non-GAAP)
 
22.5
 %
 
21.9
 %
 
23.3
 %
 
22.0
 %
 
 
 
 
 
 
 
 
 
(1) Year to date June 30, 2015, non-operating pension/OPEB costs includes a $23 exchange loss on foreign pension balances.
(2) See Schedule B for detail of significant items.
(3) The 2016 outlook for significant items includes the current estimate for full year 2016 transaction costs associated with the planned merger with The Dow Chemical Company and related activities.
(4) The 2016 estimate for non-operating pension/OPEB costs does not include additional settlements and curtailments expected during the remainder of the year as a result of actions associated with the 2016 global cost savings and restructuring plan.
(5) Year to date June 30, 2015 exchange gains, on an operating earnings basis (Non-GAAP), excludes a $23 exchange loss on non-operating pension.

0 DuPont Second-Quarter 2016 Earnings CONFERENCE CALL JULY 26, 2016

 
1 Regulation G This document includes information that does not conform to U.S. generally accepted accounting principles (GAAP) and are considered non-GAAP measures. These measures include the company’s consolidated results and earnings per share on an operating earnings basis, which excludes significant items and non-operating pension and other postretirement employee benefit costs (operating earnings and operating EPS), total segment pre-tax operating earnings, operating costs and corporate expenses on an operating earnings basis. Management uses these measures internally for planning, forecasting and evaluating the performance of the Company’s segments, including allocating resources and evaluating incentive compensation. Management believes that these non-GAAP measurements are meaningful to investors as they provide insight with respect to ongoing operating results of the company and provide a more useful comparison of year-over-year results. From a liquidity perspective, management uses free cash flow which is defined as cash provided/used by operating activities less purchases of property, plant and equipment. Free cash flow is useful to investors and management to evaluate the company’s cash flow and financial performance, and is an integral financial measure used in the company’s financial planning process. Additional non-GAAP measures presented in the document include operating EPS and segment operating earnings excluding currency. Management believes that operating EPS and segment operating earnings excluding currency are useful in providing additional perspective regarding business results and trends. These non-GAAP measurements supplement our GAAP disclosures and should not be viewed as an alternative to GAAP measures of performance. This data should be read in conjunction with previously published company reports on Forms 10-K, 10-Q, and 8-K. These reports, along with reconciliations of non-GAAP measures to GAAP are available on the Investor Center of www.dupont.com under Filings and Reports – Reconciliations and Other Data. Reconciliations of non-GAAP measures to GAAP are also included with this presentation. Forward-Looking Statements This communication contains “forward-looking statements” within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In this context, forward-looking statements often address expected future business and financial performance and financial condition, and often contain words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “see,” “will,” “would,” “target,” similar expressions, and variations or negatives of these words. Forward-looking statements by their nature address matters that are, to different degrees, uncertain, such as statements about the consummation of the proposed transaction and the anticipated benefits thereof. Forward-looking statements are not guarantees of future performance and are based on certain assumptions and expectations of future events which may not be realized. Forward-looking statements also involve risks and uncertainties, many of which are beyond the company’s control. Some of the important factors that could cause the company’s actual results to differ materially from those projected in any such forward-looking statements are: fluctuations in energy and raw material prices; failure to develop and market new products and optimally manage product life cycles; ability to respond to market acceptance, rules, regulations and policies affecting products based on biotechnology and, in general, for products for the agriculture industry; outcome of significant litigation and environmental matters, including realization of associated indemnification assets, if any; failure to appropriately manage process safety and product stewardship issues; changes in laws and regulations or political conditions; global economic and capital markets conditions, such as inflation, interest and currency exchange rates; business or supply disruptions; security threats, such as acts of sabotage, terrorism or war, natural disasters and weather events and patterns which could affect demand as well as availability of products for the agriculture industry; ability to protect and enforce the company’s intellectual property rights; successful integration of acquired businesses and separation of underperforming or non-strategic assets or businesses;

 
2 and risks related to the agreement entered on December 11, 2015, with The Dow Chemical Company pursuant to which the companies have agreed to effect an all-stock merger of equals, including the completion of the proposed transaction on anticipated terms and timing, the ability to fully and timely realize the expected benefits of the proposed transaction and risks related to the intended business separations contemplated to occur after the completion of the proposed transaction. Important risk factors relating to the proposed transaction and intended business separations include, but are not limited to, (i) the completion of the proposed transaction on anticipated terms and timing, including obtaining regulatory approvals, anticipated tax treatment, unforeseen liabilities, future capital expenditures, revenues, expenses, earnings, synergies, economic performance, indebtedness, financial condition, losses, future prospects, business and management strategies for the management, expansion and growth of the new combined company’s operations and other conditions to the completion of the merger, (ii) the ability of Dow and DuPont to integrate the business successfully and to achieve anticipated synergies, risks and costs and pursuit and/or implementation of the potential separations, including anticipated timing, any changes to the configuration of businesses included in the potential separation if implemented, (iii) the intended separation of the agriculture, material science and specialty products businesses of the combined company post-mergers in one or more tax efficient transactions on anticipated terms and timing, including a number of conditions which could delay, prevent or otherwise adversely affect the proposed transactions, including possible issues or delays in obtaining required regulatory approvals or clearances, disruptions in the financial markets or other potential barriers, (iv) potential litigation relating to the proposed transaction that could be instituted against Dow, DuPont or their respective directors, (v) the risk that disruptions from the proposed transaction will harm Dow’s or DuPont’s business, including current plans and operations, (vi) the ability of Dow or DuPont to retain and hire key personnel, (vii) potential adverse reactions or changes to business relationships resulting from the announcement or completion of the merger, (viii) uncertainty as to the long-term value of DowDuPont common stock, (ix) continued availability of capital and financing and rating agency actions, (x) legislative, regulatory and economic developments, (xi) potential business uncertainty, including changes to existing business relationships, during the pendency of the merger that could affect Dow’s and/or DuPont’s financial performance, (xii) certain restrictions during the pendency of the merger that may impact Dow’s or DuPont’s ability to pursue certain business opportunities or strategic transactions and (xiii) unpredictability and severity of catastrophic events, including, but not limited to, acts of terrorism or outbreak of war or hostilities, as well as management’s response to any of the aforementioned factors. These risks, as well as other risks associated with the proposed merger, are more fully discussed in the joint proxy statement/prospectus included in the registration statement on Form S-4 declared effective by the SEC on June 9, 2016 (File No. 333-209869), as last amended, (the “Registration Statement”) in connection with the proposed merger. While the list of factors presented here is, and the list of factors presented in the Registration Statement are, considered representative, no such list should be considered to be a complete statement of all potential risks and uncertainties. Unlisted factors may present significant additional obstacles to the realization of forward-looking statements. Consequences of material differences in results as compared with those anticipated in the forward-looking statements could include, among other things, business disruption, operational problems, financial loss, legal liability to third parties and similar risks, any of which could have a material adverse effect on Dow’s or DuPont’s consolidated financial condition, results of operations, credit rating or liquidity. Neither Dow nor DuPont assumes any obligation to publicly provide revisions or updates to any forward-looking statements regarding the proposed transaction and intended business separations, whether as a result of new information, future developments or otherwise, should circumstances change, except as otherwise required by securities and other applicable laws. The company undertakes no duty to publicly revise or update any forward-looking statements as a result of future developments, or new information or otherwise, should circumstances change, except as otherwise required by securities and other applicable laws. Developing Markets Total developing markets is comprised of Developing Asia, Developing Europe, Middle East & Africa, and Latin America. A detailed list of all developing countries is available on the Earnings News Release link on the Investor Center website at www.dupont.com.

 
3 2Q 2016 Financial Results $ in millions, except EPS 2Q16 vs. 2Q15 EPS US GAAP earnings $1.16 9% Operating earnings* $1.24 14% Operating earnings, ex currency* $1.29 18% Segment Operating Earnings* $1,613 11% 2Q16 vs. 2Q15 Consolidated Net Sales $7,061 (1%) Volume** 2% Local Price & Product Mix** (1%) Currency Impact (1%) Portfolio (1%) * See appendix for reconciliations of non-GAAP measures ** Organic sales growth is defined as the sum of local price & product mix and volume.

 
4 2Q 2016 EPS Variance $0.14 $0.04 ($0.06) $0.04 ($0.01) 2Q15 Segment Results Corp & Int Exp Lower Shares Tax Rate EG&L 2Q16 GAAP EPS $1.06 $0.03 2Q15 Sig Items & Non-Op Pension* $0.08 GAAP EPS $1.16 2Q16 Sig Items & Non-Op Pension* Operating EPS* $1.09 Operating EPS* $1.24 $0.14 $0.04 $0.04 ($0.01) ($0.06) • See appendix for details of significant items and reconciliation of non-GAAP measures  Segment results increased $0.14 per share, including a $0.05 per share negative impact from currency. The improvement in segment results is primarily due to cost savings, mix enrichment, and lower product costs.  A net decrease in corporate and interest expense contributed $0.04 per share in the quarter primarily due to cost savings.  Lower average shares outstanding were a $0.04 per share benefit in the quarter primarily due to the $2 billion share repurchase program in 2015.  A higher tax rate as a result of a shift in the geographic mix of earnings negatively impacted results by $0.01 per share.  Net after-tax exchange gains (losses) negatively impacted results by $0.06 per share. Key Factors

 
5 2Q 2016 Segment Operating Earnings Variance ($ in millions) • *See appendix for details of significant items and reconciliation of non-GAAP measures  Agriculture increased as higher corn seed and insecticide volumes, lower product costs, and increased cost savings more than offset lower soybean volumes and the negative impact of currency.  Nutrition & Health increased on broad-based volume growth led by probiotics and specialty proteins and cost savings, partially offset by a negative currency impact.  Performance Materials increased as greater demand in automotive markets, primarily in China and North America; higher volumes for ethylene, due to a prior year unplanned ethylene outage; and cost savings were partially offset by negative currency impact, as well as costs associated with a contractual claim.  Industrial Biosciences growth reflected increased costs savings partially offset by a negative currency impact.  Protection Solutions results increased on lower product costs and increased cost savings, partially offset by lower volumes and a negative currency impact.  Electronics & Communications increased as lower product costs and cost savings more than offset lower demand in consumer electronics and the negative impact from currency. Key Factors $93 $24 $4 $30 ($4) $7 $12 2Q15 Ag N&H PM IB PS E&C Other 2Q16 $1,447 Segment Operating Earnings* $93 $30 $24 $12 $7 $4 ($4) $1,447 Total Segment Operating Earnings* $1,613 Total Segment Operating Earnings*

 
6 Balance Sheet and Cash June 30, 2016 Free Cash Flow • Reflects normal seasonal cash outflow • Year over year improvement of ~$1 billion  Working capital improvement of over $200 million  Capex spend down $200 million, 28 percent  Absence of Chemours net cash outflow of over $200 million Balance Sheet • $5.3 billion in net debt** • Increase since year end due to normal seasonal working capital requirements Expected Uses of Cash for 2016 • $1.3 billion for normal dividends • Capex spend est. $1.1 billion for FY 2016 • Unlikely to complete full $2 billion share repurchase program before end of 2016 -4.0 -3.0 -2.0 -1.0 0.0 2015 2016 $ B il li o n s 0 4 8 12 16 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 $ B ill io n s Gross Debt Cash Net Debt** Free Cash Flow* Cash and Debt * Free Cash Flow is cash used for operating activities of ($1,503MM) and ($2,045MM) less purchases of plant, property and equipment of $507MM and $938MM for the year ended June 30, 2016, and 2015, respectively. ** See appendix for reconciliation of non-GAAP measures.

 
7 Revised Full-Year 2016 Expectations and Outlook * See appendix for reconciliation of Non-GAAP measures • Indicators of the macro economy; the agriculture business, particularly in Latin America; and industrial demand remain challenging • The second half for Ag is expected to bring added pressure from economic conditions in Latin America and a route-to-market change in the southern part of the United States • Currency headwind now expected to be about $0.15 per share Revised FY 2016 Guidance vs. April Guidance GAAP EPS $2.70 - $2.75 Operating EPS* $3.15 - $3.20 + $0.10 from low end of range

 
2013 Highlights Cost Savings Update 2016 Global Cost Savings and Restructuring Plan: $1.0B of run rate cost savings by year-end 2016; represents ~$730 million in cost reductions in 2016 2Q16 QTD ($ in millions) GAAP Basis* Operating Earnings** Basis Operating costs* ($160), down 8% ($220), down 12% SG&A ($60), down 5% ($160), down 13% Corporate expenses Down 26% Down 44% *Operating costs defined as other operating charges, selling, general & administrative, and research & development costs. **See appendix for reconciliation of non-GAAP measures. 8

 
9 Agriculture Pioneer, Crop Protection 2Q14 2Q15 2Q16 6.0% 12.0% 18.0% 24.0% 30.0% 0 250 500 750 1,000 M a rg in $ in M ill io n s 3Q & FY Outlook • Expect continued weakness in the agriculture sector • Planned rapid introduction of Leptra® corn hybrids for Brazil summer season; Crop protection portfolio growing in Asia with the Zorvec™ launch and growth in Cyazypyr® and Rynaxypyr® • 3Q: Sales – Expect sales to be down in the high-single-digits percent primarily due to lower insecticide volumes in Latin America • 3Q: Operating Earnings – Expect to be down in the high-twenty-percent range as cost savings are more than offset by higher seed production costs in Latin America • Full Year: Sales – Expect to be comparable to last year as local price and product mix gains are offset by the negative impact of currency; Higher corn seed volumes offset by lower insecticide and soybean seed volumes • FY: Operating Earnings – Expected to be up high-single-digits percent as cost savings and local price and product mix gains more than offset the negative impact of currency; up low-teens percent excluding currency 2Q Comments • The industry continues to face challenging conditions driven by low commodity prices, declining farm incomes, and tightened credit availability in key markets • Sales – Flat with prior year as higher volumes were offset by currency and portfolio changes • Seed sales were down 1 percent and crop protection sales were up 3 percent • Operating Earnings – Up 12 percent driven by lower product cost, higher volume, and cost savings • Excluding the impact of currency, operating earnings increased 17 percent • Operating margins increased by 290 basis points in the quarter verses prior year 2Q Operating Earnings 2Q Sales Vol 3%, Local Price 0%, Currency -2%, Port./Other -1% 2,000 2,500 3,000 3,500 2Q15 Volume Local Price 2Q16 (ex-curr & portf.) Curr. Portf./ Other 2Q16 (ex-curr & portf.) 3,218 $ in M ill io n s 3,218

 
10 Nutrition & Health 2Q14 2Q15 2Q16 0% 4% 8% 12% 16% 30 60 90 120 150 M a rg in $ i n M il li o n s 2Q Comments • Sales – 1 percent higher as 3 percent higher volumes were partially offset by negative currency impact and lower local price • Continued broad-based volume growth led by probiotics and specialty proteins • Operating Earnings – Increased $30 million, or 30 percent, as cost savings and volume growth more than offset a $3 million negative currency impact • Excluding the impact of currency, operating earnings increased 33 percent • Operating margin improved about 350 basis points; 12 consecutive quarters of year-over-year improvement 3Q & FY Outlook • Market conditions to remain challenging especially in Latin America and Middle East • 3Q: Sales – Expected to be up in the low-single-digit percent range with continued strength in probiotics and cultures partially offset by the negative impact of currency • 3Q: Operating Earnings – Expected to be up in the mid-twenty percent range driven by cost savings and lower product costs • Full Year: Sales – Expected to be up in the low-single-digit percent range with continued strength in probiotics and cultures partially offset by the negative impact of currency • FY: Operating Earnings – Expected to be up in the high-twenty percent range as mix enrichment and cost savings more than offset the negative impact of currency; continuing margin expansion 2Q Operating Earnings 2Q Sales Vol 3%, Local Price -1%, Currency -1%, Port./Other 0% 700 750 800 850 900 2Q15 Volume Local Price 2Q16 (ex-curr & portf.) Curr. Portf./ Other 2Q16 $ in M ill io n s 826 835

 
11 Performance Materials 2Q14 2Q15 2Q16 0% 6% 12% 18% 24% 30% 0 70 140 210 280 350 M a rg in $ in M ill io n s 2Q Operating Earnings 2Q Sales Vol 4%, Local Price -4%, Currency 0%, Port./Other 0% $ in M ill io n s 1,338 1100 1200 1300 1400 1500 2Q15 Volume Local Price 2Q16 (ex-curr… Curr. Portf./ Other 2Q16 1,335 2Q Comments • Sales – Flat as increased volume was offset by lower prices. • Price was down 4 percent, primarily driven by pressure for raw materials pass-through and lower average ethylene spot prices which were down approximately 40 percent year over year. • Volume increased 4 percent driven by increased demand in automotive markets, primarily China and North America, and higher ethylene sales. • Operating Earnings – Operating earnings increased 8 percent as cost savings, increased demand in automotive markets and increased volumes for ethylene were partially offset by a $16 million negative impact from currency, as well as costs associated with a contractual claim. Operating margins expanded by over 180 basis points. Excluding the impact of currency, operating earnings increased 13 percent. 3Q & FY Outlook • 3Q: Sales – Expected to be up mid-single-digits percent driven by higher volume in China markets driven by increased automotive demand. • 3Q: Operating Earnings – Expected to be up low-single-digit percent as volume growth and lower costs are partially offset by weaker pricing and the absence of a $16 million net benefit from a joint venture in 2015. • Full Year: Sales – Anticipated to be about flat as volume growth will be offset by lower local price and the negative impact of currency. • FY: Operating Earnings – Expected to be about flat as volume growth will be offset by lower local price and the negative impact of currency.

 
12 Industrial Biosciences 2Q14 2Q15 2Q16 0.0% 5.0% 10.0% 15.0% 20.0% 0 20 40 60 80 M a rg in $ in M ill io n s Note: DuPont Sustainable Solutions, previously reported within the company’s Safety & Protection segment (now Protection Solutions), was comprised of two business units: clean technologies (CleanTech) and consulting solutions. Effective January 1, 2016, the clean technologies business unit became part of Industrial Biosciences and the consulting business unit became part of Other. 2Q Operating Earnings 2Q Sales Vol 0%, Local Price 0%, Currency -1%, Port./Other 0% 275 300 325 350 375 2Q15 Volume Local Price 2Q16 (ex-curr & portf.) Curr. Portf./ Other 2Q16 $ in M ill io n s 357 355 2Q Comments • Sales – Declined 1 percent due to currency and softness in CleanTech offerings, partly offset by growth in enzymes and biomaterials. • CleanTech sales declined on weak demand from sulfuric acid producers, overshadowing growth in bioactives pricing and biomaterials volume • Operating Earnings – Increased 24 percent due to cost savings. Operating margins expanded by about 350 basis points. Excluding a $3 million negative currency impact, operating earnings increased 30 percent. 3Q & FY Outlook • 3Q: Sales: Growth in the low-single-digits percent due to volume growth in bioactives partly offset by CleanTech declines • 3Q: Operating Earnings – Expected to be up by mid-teens percent due to mix enrichment, cost savings and volume gains • Full Year: Sales – Expected to be flat on stronger volume and pricing improvement related to new product introductions in bioactives as well as biomaterials volume growth, offset by CleanTech declines and currency • FY: Operating Earnings – Expected to rise by mid-teens percent due to mix enrichment, cost savings and volume growth, partly offset by currency

 
13 Protection Solutions 2Q14 2Q15 2Q16 0% 5% 10% 15% 20% 25% 0 50 100 150 200 M a rg in $ in M ill io n s 2Q Operating Earnings 2Q Sales Vol -2%, Local Price 0%, Currency 0%, Port./Other 0% Note: DuPont Sustainable Solutions, previously reported within the company’s Safety & Protection segment (now Protection Solutions), was comprised of two business units: clean technologies (CleanTech) and consulting solutions. Effective January 1, 2016, the clean technologies business unit became part of Industrial Biosciences and the consulting business unit became part of Other. 600 700 800 900 2Q15 Volume Local Price 2Q16 (ex-curr & portf.) Curr. Portf./ Other 2Q16 (ex-curr & portf.) 806 786 $ in M ill io n s 2Q Comments • Sales – Declined 2 percent, due to volume declines • Demand from the oil and gas industry and the military remained soft, impacting sales of Nomex® thermal-resistant fiber and Kevlar® high- strength materials. Demand for Tyvek® was flat as weakness due to comparisons with pandemic-related sales of garments last year was offset by sales growth in construction markets. Corian® surfaces and Zodiaq® surfaces sales rose. • Operating Earnings – Rose 4 percent, driven by lower product costs and cost savings, partly offset by lower volumes, higher manufacturing costs and a $4 million negative currency impact. Operating margin expanded by about 150 basis points. Excluding the impact of currency, operating earnings increased 6 percent. 3Q & FY Outlook • 3Q: Sales – Comparable with the prior year’s quarter with price and volume gains offset by currency. • 3Q: Operating Earnings – Up by the low-teens percent, driven by cost savings • Full Year: Sales – Expected to decline by low-single-digits percent due to volume declines, unfavorable mix and currency pressures • FY: Operating Earnings – Up high-single-digits percent. Lower costs anticipated to drive operating margin expansion, partly offset by currency

 
14 Electronics & Communications 2Q14 2Q15 2Q16 0% 5% 10% 15% 20% 0 25 50 75 100 M a rg in $ in M ill io n s 2Q Comments • Sales – Down 6 percent on lower demand in consumer electronics and lower metals pricing. • Operating Earnings – Increased 4 percent to $93 million as cost savings and lower product costs more than offset lower sales and a $1 million negative impact from currency. Excluding currency, operating earnings increased 6 percent. • Operating margin improved 200 basis points versus prior year 3Q & FY Outlook • Expect PV market demand to remain strong with a modest 2H sequential recovery in consumer electronics markets • New Solamet® paste product launching in the third quarter • 3Q: Sales – Expected to be down low-single-digits percent on continued soft consumer electronics demand and lower Tedlar® sales • 3Q: Operating Earnings – Expected to be up high-single-digits percent as cost savings more than offset lower sales • Full Year: Sales - Expected to be down mid-single-digits percent • FY: Operating Earnings – Expected to be up mid-single-digits percent on cost savings 2Q Operating Earnings 2Q Sales Vol -4%, Local Price -2%, Currency 0%, Port./Other 0% 400 450 500 550 2Q15 Volume Local Price 2Q16 (ex-curr & portf.) Curr. Portf./ Other 2Q16 $ i n M il li o n s 528 494

 
15 Appendix 1 Second Quarter 2016 Segment Commentary This data should be read in conjunction with the Company’s second quarter earnings news release dated July 26, 2016, DuPont’s 2Q 2016 Earnings Conference Call presentation materials and reconciliations of non-GAAP to GAAP measures included in the presentation materials and posted on the DuPont Investor Center website at www.dupont.com.

 
16 Agriculture Agriculture markets continue to face challenges as farmers endure tough economic conditions, seed and crop protection suppliers have elevated inventories, and credit remains tight. We recognized that the agriculture market was entering a challenging period back in 2014 and at that time began taking cost actions to enable us to maintain our competitiveness. Fast forward twenty-four months and our strong results in the first half of the year demonstrate the benefits of those disciplined actions. Our first-half volume rose 1 percent with growth in corn seed partially reduced by lower crop protection volume due to insect resistant soy, weather conditions and higher inventories and lower soybean volumes. Total sales in the first half were 2 percent lower as higher prices and volume gains were more than offset by currency and portfolio changes. In seeds, a stronger mix of Pioneer’s newest corn hybrids resulted in higher net corn price globally led by North America. First-half operating earnings increased 3 percent driven by higher local price and product mix, lower product costs, and cost savings. Excluding currency, operating earnings were up 9 percent. Second-quarter Agriculture segment sales were $3.2 billion, comparable with prior year, as higher volumes were negatively impacted by currency and portfolio changes. Seed sales declined 1 percent and crop protection sales rose 3 percent. In the quarter, we were again able to fully offset the currency headwinds in Latin America for crop protection through increased local pricing. Segment Commentary Second Quarter Earnings 2016

 
17 Agriculture (continued) Second-quarter segment operating earnings increased 12 percent, driven by lower product costs, higher volume, and cost savings from continued execution of our planned restructuring efforts. Excluding currency, operating earnings increased 17 percent. Operating margins increased by about 290 basis points in the quarter versus prior year. Second-quarter results were stronger than we expected in April, primarily due to lower product cost, continued strong sunflower sales in Europe and a benefit from timing at the expense of the third quarter. As we move to the second half of the year the focus turns to Latin America, where the cutoff between third and fourth quarter comes in the middle of the summer season. In seeds, we expect sales growth in our corn business in Brazil driven by the launch of Leptra® corn hybrids -- which we now expect to exceed one-third of summer volume -- reduced by lower soybean volumes. Our third quarter sales growth will be impacted by the shift of sales from the third quarter to the fourth quarter as we expand our direct selling model in Brazil which is a fine tuning of our route-to-market strategy. On the crop protection side, current market sentiment indicates stronger demand in the fourth quarter than the third quarter, driven by delayed purchasing decisions due to commodity prices and credit availability. For the third quarter, we expect sales to be down in the high-single-digits percent primarily due to lower insecticide volume in Latin America. We expect operating earnings to be down in the high-twenty-percent range as cost savings are more than offset by costs associated with the Leptra® launch in Latin America, the absence of $27 million of gains on sales of assets and a $21 million benefit related to an adjustment for prior-period cost of goods sold, which was recorded in 2015. Segment Commentary Second Quarter Earnings 2016

 
18 Agriculture (continued) Full-year results will be impacted by the shift of a portion of our fourth-quarter 2016 seed sales to first- quarter 2017. This shift is the result of enhancements we are making to our Pioneer business as we transition to an agency-based route-to-market in the southern United States, similar to the advantaged approach we take in the Midwest. We anticipate sales for the full year to be comparable to prior year as higher pricing is offset by negative currency. Operating earnings are expected to be up in the high-single digits percent as cost savings and increased local prices are partially offset by the negative impact of currency. Excluding currency, we expect operating earnings to be up in the low-teens percent. While markets continue to be challenging, we are confident in our ability to execute and to deliver results through our robust innovation pipeline. The strength of our pipeline is evidenced by the favorable market reception to our best in class ZorvecTM fungicide and the fast ramp of Leptra® corn hybrids in Brazil following a successful launch this past Safrinha season, which is on record as the fastest technology introduction in Pioneer history. These two successful new product introductions are evidence that despite the current challenging conditions, farmers continue to recognize the value of our technology. Segment Commentary Second Quarter Earnings 2016

 
19 Nutrition & Health In Nutrition & Health, sales were 1 percent higher as continued broad-based volume growth of 3 percent – led by probiotics and specialty proteins – was partially offset by the negative impact from currency and lower local price. Demand for probiotics continued to be strong with 18-percent volume growth in the quarter. Specialty protein volume increased 10 percent in the quarter on increasing consumer demand for high-protein beverages and nutrition bars. From a regional perspective, volumes grew 5 percent in Asia Pacific, led by increased demand in China, where the business continued to grow double-digits year over year. Operating earnings of $130 million increased $30 million, or 30 percent, on cost savings and volume growth. Excluding a $3 million negative impact from currency, operating earnings increased 33 percent. The business delivered about 350 basis points of operating margin improvement and has now grown operating margins year-over-year for twelve consecutive quarters. Segment Commentary Second Quarter Earnings 2016

 
20 Nutrition & Health (continued) Looking to the outlook for the remainder of 2016, market conditions are expected to remain challenging, particularly in Latin America and the Middle East. In the third quarter, we expect sales to be up low-single-digits percent with continued strength in probiotics and cultures partially offset by the negative impact of currency. Operating earnings are expected to be up in the mid-twenty percent range benefitting from cost savings and lower product costs. For the full year, we expect sales to be up low-single-digits percent with continued strength in probiotics and cultures partially offset by the negative impact of currency. Operating earnings are expected to be up in the high-twenty percent range, with continued operating margin expansion, as mix enrichment and cost savings more than offset the negative impact of currency. Segment Commentary Second Quarter Earnings 2016

 
21 Performance Materials Sales of $1.3 billion were essentially flat as increased volume was offset by lower local price. Price declined 4 percent in the quarter, driven primarily by pricing pressures for raw materials pass-through and lower ethylene prices as average spot prices were down approximately 40 percent year over year. Segment volume increased 4 percent driven by increased demand in automotive markets, primarily China and North America, and higher ethylene sales. Prior-year ethylene sales were constrained due to an unplanned outage. According to IHS, global automotive market demand rose about 3 percent in the second quarter, primarily driven by growth in Europe, China, and North America. IHS is forecasting year-over-year growth of 3 percent in 2016, with 6 percent growth in the third quarter versus prior year. Operating earnings increased 8 percent as cost savings, increased demand in automotive markets (primarily in China and North America), and increased volumes for ethylene due to a prior year unplanned ethylene outage, were partially offset by a $16 million negative impact from currency, as well as costs associated with a contractual claim. Operating margins expanded by over 180 basis points. Excluding the impact of currency, operating earnings increased 13 percent. Segment Commentary Second Quarter Earnings 2016

 
22 Performance Materials (continued) Segment Commentary Second Quarter Earnings 2016 For the third quarter, we anticipate sales will rise in the mid-single-digits percent driven by increased demand in China automotive markets. We anticipate earnings to be up low-single-digits percent as volume growth and lower costs are partially offset by weaker pricing and the absence of a $16 million net benefit from a joint venture in 2015. For the full year of 2016, we anticipate sales and operating earnings to be about flat as volume growth will be offset by lower local price and the negative impact of currency. 2015 operating earnings included $49 million of benefits from a joint venture, the sale of a business and realization of tax benefits associated with a manufacturing site.

 
23 Industrial Biosciences* Segment Commentary Second Quarter Earnings 2016 Industrial Biosciences, second-quarter sales declined 1 percent, driven by currency, as growth in enzymes and biomaterials was offset by declines in CleanTech offerings. Bioactives and biomaterials showed modest growth, which was fully offset by weakness in CleanTech and currency. Growth in bioactives included new product launches in home and personal care products, food and animal nutrition. Volume gains in sales of apparel made with biomaterials were partly offset by pricing pressure in flooring made with biomaterials. While CleanTech signings improved sequentially versus the first quarter, sales declined due to a thin backlog of acid contracts, partly offset by growth in refining offerings. Operating earnings of $62 million increased 24 percent ($12 million) in the quarter. Better mix in bioactives and operational improvements in biomaterials helped to mitigate unfavorable mix from CleanTech. Cost savings further contributed to the earnings growth, partially offset by the impact of additional costs from an acquisition. Operating margins improved 350 basis points year over year. Excluding a $3 million negative impact of currency, operating earnings increased 30 percent. Turning to the third quarter, we anticipate sales growing by the low-single-digits percent as volume growth in bioactives is partially offset by lower demand for CleanTech offerings. We expect third-quarter operating earnings to rise versus the prior year’s quarter by the mid-teens percent, as we capture benefits from mix enrichment, cost savings and higher volumes. * On 1/1/2016, the Clean Technologies business unit within DuPont Protection Solutions became part of Industrial Biosciences. Reclassification of prior year data has been made to reflect the current year classification.

 
24 Industrial Biosciences (continued) Segment Commentary Second Quarter Earnings 2016 As for the full-year outlook, we project 2016 sales to be even with the prior year. Volume and pricing improvement from new product introductions in animal nutrition, home and personal care and food enzymes as well as biomaterials volume growth will be offset by lower demand for CleanTech offerings, biomaterials pricing and currency. We anticipate that operating earnings year-over-year will rise by the mid-teens percent, led by mix enrichment, cost savings and volume benefits, partly offset by currency.

 
25 Protection Solutions* Sales of $786 million in the second quarter declined 2 percent, due to a 2-percent negative impact from volume. Demand from the oil and gas industry and the military remained weak, which resulted in lower sales of Nomex® thermal-resistant fiber and Kevlar® high-strength materials. Sales in Surfaces rose, reflecting volume and pricing gains. While Tyvek® sales into the construction market rose, last year’s quarter included added sales of Tyvek® protective garments related to the Ebola and Avian flu pandemics, leading to sales comparable with last year. Second-quarter operating earnings of $188 million increased 4 percent, despite a $4 million negative impact from currency. Lower product costs and cost savings were partly offset by pressure from volume declines, higher manufacturing costs and the negative impact from currency. The operating earnings margin expanded by about 150 basis points. Excluding the impact of currency, operating earnings increased 6 percent. Turning to the third quarter, sales are expected to be comparable with the prior year’s quarter with price and volume gains offset by currency. We anticipate growth in sales of Tyvek® materials to the housing market to be offset by continued weakness in demand for Nomex® thermal-resistant fiber and Kevlar® high-strength materials, due to continued weakness in the oil and gas industry and delays in military tenders. We anticipate that our operating earnings will rise by the low-teens percent, driven by cost savings. Looking ahead to full-year 2016, we project sales declines in the low-single-digits percent due to volume declines, unfavorable mix and currency pressures. Operating earnings are anticipated to grow by the high- single-digits percent, primarily due to lower costs, leading to operating margin expansion for the year. * DuPont Sustainable Solutions, previously within this segment, was comprised of two business units: Clean Technologies and consulting solutions. On 1/1/2016, the Clean Technologies business unit became part of Industrial Biosciences, and consulting solutions became part of Other. Reclassification of prior-year data has been made to reflect the current-year classification. Segment Commentary Second Quarter Earnings 2016

 
26 Electronics & Communications In Electronics & Communications, second-quarter sales declined 6 percent on lower demand in consumer electronics and lower metals pricing. Operating earnings of $93 million increased 4 percent, as cost savings and lower product costs more than offset lower sales and a $1 million negative impact from currency. Operating margins expanded by 200 basis points year over year. Excluding currency, operating earnings increased 6 percent. Looking to the outlook for the remainder of 2016, we expect a modest second-half sequential recovery in consumer electronics markets. The forecast for PV module installations remains at a mid-teens growth rate for the full year. Second-half demand in China is expected to soften as a result of feed-in-tariff decreases at the end of second quarter; however, demand increases in the United States and other parts of the world are expected to offset this softness. For the third quarter we expect sales to be down low-single-digits percent versus prior year on continued soft consumer electronics demand and lower Tedlar® sales due to regional demand shifts in the photovoltaics market. Operating earnings are anticipated to increase high-single-digits percent as cost savings more than offset lower sales. Full year 2016 sales are expected to be down mid-single-digits percent on continued soft consumer electronics demand and competitive pressures impacting sales of Solamet® paste. Operating earnings are anticipated to be up mid-single-digits percent due to cost savings. Segment Commentary Second Quarter Earnings 2016

 
INDEX PAGE SELECTED OPERATING RESULTS 28 SELECTED INCOME STATEMENT DATA 29 SEGMENT NET SALES 30 SEGMENT OPERATING EARNINGS 31 SIGNIFICANT ITEMS BY SEGMENT - PRETAX OPERATING INCOME; DEPRECIATION AND AMORTIZATION BY SEGMENT 32 RECONCILIATION OF NON-GAAP MEASURES 33-37 RECONCILIATION OF BASE INCOME TAX RATE TO EFFECTIVE INCOME TAX RATE 38 Note: Management believes that an analysis of operating earnings (as defined on page 28), a "non-GAAP" measure, is meaningful to investors because it provides insight with respect to ongoing operating results of the company. Such measurements are not recognized in accordance with generally accepted accounting principles (GAAP) and should not be viewed as an alternative to GAAP measures of performance. E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES QUARTERLY SUPPLEMENTAL FINANCIAL DATA AND NON-GAAP RECONCILIATIONS (UNAUDITED) June 30, 2016 DuPont Sustainable Solutions, previously within the company's Safety & Protection segment (now Protection Solutions) was comprised of two business units: clean technologies and consulting solutions. Effective January 1, 2016, the clean technologies business is reported in the Industrial Biosciences segment and the consulting solutions business unit is reported within Other. Reclassifications of prior year data have been made to conform to current year classifications.

 
2Q16 Supplemental Financial Data and Non-GAAP Reconciliations 28 7/26/2016 Year Year Year Year Year Year 2016 2Q16 1Q16 2015 4Q15 3Q15 2Q15 1Q15 2014 4Q14 3Q14 2Q14 1Q14 2013 4Q13 3Q13 2Q13 1Q13 2012 2011 INCOME STATEMENT DATA Consolidated Net Sales 14,466 7,061 7,405 25,130 5,299 4,873 7,121 7,837 28,406 5,849 5,905 8,058 8,594 28,998 6,119 6,000 8,060 8,819 27,610 25,883 Operating Earnings After Income Taxes, 2,202 1,093 1,109 2,503 239 117 994 1,153 3,110 519 361 907 1,323 2,926 392 249 1,003 1,282 2,238 2,210 Attributable to DuPont (1) (Non-GAAP) Significant Items - After-tax 179 19 160 (348) (411) 88 32 (57) 112 79 (9) 44 (2) (377) (292) (27) (78) 20 (657) (238) Non-Operating Pension & OPEB Costs - After-tax (2) (135) (89) (46) (266) (56) (74) (57) (79) (87) (21) (22) (22) (22) (356) (80) (94) (84) (98) (437) (355) Income from Continuing Operations After Income Taxes Attributable to DuPont (GAAP) 2,246 1,023 1,223 1,889 (228) 131 969 1,017 3,135 577 330 929 1,299 2,193 20 128 841 1,204 1,144 1,617 Depreciation 473 235 238 978 248 241 245 244 1,006 248 247 261 250 1,027 258 254 253 262 1,065 941 STATEMENT OF CASH FLOW DATA (3) Cash Provided by (Used for) Operating Activities (1,503) 341 (1,844) 2,316 4,161 200 78 (2,123) 3,712 5,514 269 350 (2,421) 3,179 5,512 298 36 (2,667) 4,849 5,152 Capital Expenditures (4) 507 149 358 1,705 355 362 378 610 2,062 714 544 462 342 1,940 674 478 449 339 1,890 1,910 (2) First quarter 2015 includes the impact of an after-tax exchange loss on non-operating pension of $23. (3) Data is on a total company basis. (4) Includes purchases of property, plant and equipment and investment in affiliates. SELECTED OPERATING RESULTS (UNAUDITED) (dollars in millions) (1) Operating earnings are defined as earnings from continuing operations (GAAP) excluding “significant items” and “non-operating pension and other post-employment benefit (OPEB) costs”. Non-operating pension/OPEB costs includes all of the components of net periodic benefit cost from continuing operations with the exception of the service cost component.

 
2Q16 Supplemental Financial Data and Non-GAAP Reconciliations 29 7/26/2016 E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES Year Year Year Year Year Year 2016 2Q16 1Q16 2015 4Q15 3Q15 2Q15 1Q15 2014 4Q14 3Q14 2Q14 1Q14 2013 4Q13 3Q13 2Q13 1Q13 2012 2011 Consolidated Net Sales 14,466 7,061 7,405 25,130 5,299 4,873 7,121 7,837 28,406 5,849 5,905 8,058 8,594 28,998 6,119 6,000 8,060 8,819 27,610 25,883 Total Segment Operating Earnings(1) 3,330 1,613 1,717 4,243 553 433 1,447 1,810 5,032 788 686 1,516 2,042 4,906 716 603 1,581 2,006 4,389 4,175 Adjusted EBIT (Operating Earnings) (1) (2) 3,015 1,511 1,504 3,757 372 286 1,305 1,794 4,599 806 768 1,283 1,742 4,019 441 332 1,425 1,821 3,311 3,122 Adjusted EBITDA (Operating Earnings) (1) (2) 3,714 1,850 1,864 5,095 675 576 1,667 2,177 5,965 1,122 1,064 1,663 2,116 5,360 766 646 1,763 2,185 4,680 4,308 Operating Earnings Before Income Taxes (1) 2,840 1,422 1,418 3,441 287 204 1,236 1,714 4,232 719 676 1,192 1,645 3,584 333 227 1,314 1,710 2,871 2,714 Operating Earnings Per Share (1) (3) 2.50 1.24 1.26 2.77 0.27 0.13 1.09 1.26 3.36 0.57 0.39 0.98 1.42 3.12 0.42 0.26 1.08 1.37 2.36 2.34 (1) See Reconciliation of Non-GAAP Measures. (2) Adjusted EBIT from operating earnings is operating earnings (as defined on page 28) before income taxes, net income attributable to noncontrolling interests and interest expense. Adjusted EBITDA from operating earnings is adjusted EBIT from operating earnings before depreciation and amortization of intangible assets. (3) Earnings per share for the year may not equal the sum of quarterly earnings per share due to changes in average share calculations. SELECTED INCOME STATEMENT DATA OPERATING EARNINGS (UNAUDITED) (dollars in millions, except per share)

 
2Q16 Supplemental Financial Data and Non-GAAP Reconciliations 30 7/26/2016 E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES Year Year Year Year Year Year 2016 2Q16 1Q16 2015 4Q15 3Q15 2Q15 1Q15 2014 4Q14 3Q14 2Q14 1Q14 2013 4Q13 3Q13 2Q13 1Q13 2012 2011 Agriculture 7,004 3,218 3,786 9,798 1,550 1,093 3,218 3,937 11,296 1,732 1,563 3,610 4,391 11,728 1,804 1,630 3,629 4,665 10,421 9,165 Electronics & Communications 946 494 452 2,070 493 532 528 517 2,381 571 620 613 577 2,534 639 635 648 612 2,684 3,154 Industrial Biosciences 707 355 352 1,478 397 374 357 350 1,624 418 407 404 395 1,631 424 410 416 381 1,604 1,074 Nutrition & Health 1,636 835 801 3,256 807 810 826 813 3,529 843 899 926 861 3,473 872 868 865 868 3,422 2,460 Performance Materials 2,584 1,335 1,249 5,305 1,284 1,302 1,338 1,381 6,059 1,441 1,531 1,567 1,520 6,166 1,505 1,580 1,599 1,482 6,095 6,445 Protection Solutions 1,515 786 729 3,039 720 723 806 790 3,304 784 834 885 801 3,229 807 820 841 761 3,122 3,295 Other 74 38 36 184 48 39 48 49 213 60 51 53 49 237 68 57 62 50 262 290 CONSOLIDATED NET SALES 14,466 7,061 7,405 25,130 5,299 4,873 7,121 7,837 28,406 5,849 5,905 8,058 8,594 28,998 6,119 6,000 8,060 8,819 27,610 25,883 SEGMENT NET SALES SEGMENT NET SALES (UNAUDITED) (dollars in millions)

 
2Q16 Supplemental Financial Data and Non-GAAP Reconciliations 31 7/26/2016 E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES Year Year Year Year Year Year 2016 2Q16 1Q16 2015 4Q15 3Q15 2Q15 1Q15 2014 4Q14 3Q14 2Q14 1Q14 2013 4Q13 3Q13 2Q13 1Q13 2012 2011 Agriculture 1,966 865 1,101 1,646 (54) (210) 772 1,138 2,352 134 (56) 835 1,439 2,480 90 (56) 937 1,509 2,129 1,776 Electronics & Communications 152 93 59 359 87 104 89 79 336 92 90 84 70 314 90 92 90 42 237 420 Industrial Biosciences 125 62 63 243 78 61 50 54 269 69 58 71 71 232 61 58 61 52 228 130 Nutrition & Health 234 130 104 373 85 102 100 86 369 79 99 103 88 286 79 76 59 72 305 201 Performance Materials 598 325 273 1,216 281 317 301 317 1,267 326 366 293 282 1,249 287 357 322 283 1,140 945 Protection Solutions 364 188 176 641 147 146 181 167 672 169 174 181 148 553 161 141 137 114 475 532 Other (109) (50) (59) (235) (71) (87) (46) (31) (233) (81) (45) (51) (56) (208) (52) (65) (25) (66) (125) 171 TOTAL SEGMENT OPERATING EARNINGS 3,330 1,613 1,717 4,243 553 433 1,447 1,810 5,032 788 686 1,516 2,042 4,906 716 603 1,581 2,006 4,389 4,175 Corporate Expenses (169) (83) (86) (573) (160) (111) (148) (154) (677) (134) (167) (174) (202) (773) (206) (164) (198) (205) (842) (801) Interest Expense (185) (93) (92) (322) (82) (82) (74) (84) (377) (87) (93) (94) (103) (448) (108) (108) (115) (117) (464) (447) 2,976 1,437 1,539 3,348 311 240 1,225 1,572 3,978 567 426 1,248 1,737 3,685 402 331 1,268 1,684 3,083 2,927 (694) (323) (371) (712) (7) (91) (268) (346) (692) (13) (56) (279) (344) (680) 24 (36) (290) (378) (685) (544) Net After-tax Exchange (Losses) Gains (1) (70) (17) (53) (127) (68) (32) 42 (69) (166) (35) (8) (59) (64) (66) (34) (43) 29 (18) (136) (134) Less: Net Income Attr. to Noncontrolling Interests 10 4 6 6 (3) - 5 4 10 - 1 3 6 13 - 3 4 6 24 39 OPERATING EARNINGS (Non-GAAP) 2,202 1,093 1,109 2,503 239 117 994 1,153 3,110 519 361 907 1,323 2,926 392 249 1,003 1,282 2,238 2,210 Net Income Attributable to Noncontrolling Interests 10 4 6 6 (3) - 5 4 10 - 1 3 6 13 - 3 4 6 24 39 Non-Operating Pension & OPEB Costs - After-tax (1) (135) (89) (46) (266) (56) (74) (57) (79) (87) (21) (22) (22) (22) (356) (80) (94) (84) (98) (437) (355) Significant Items - After-tax 179 19 160 (348) (411) 88 32 (57) 112 79 (9) 44 (2) (377) (292) (27) (78) 20 (657) (238) INCOME FROM CONTINUING OPERATIONS AFTER INCOME TAXES (GAAP) 2,256 1,027 1,229 1,895 (231) 131 974 1,021 3,145 577 331 932 1,305 2,206 20 131 845 1,210 1,168 1,656 (1) OPERATING EARNINGS (UNAUDITED) (dollars in millions) In the first quarter 2015, the impact of an after-tax exchange loss on non-operating pension of $23 is excluded from Net After-tax Exchange Losses and is included within Non-Operating Pension & OPEB Costs-After tax above. OPERATING EARNINGS BEFORE INCOME TAXES AND EXCHANGE (LOSSES) GAINS (Non-GAAP) Provision For Income Taxes on Operating Earnings, Excluding Taxes on Exchange (Losses) Gains SEGMENT OPERATING EARNINGS

 
2Q16 Supplemental Financial Data and Non-GAAP Reconciliations 32 7/26/2016 E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES SEGMENT PRETAX IMPACT OF Year Year Year Year Year Year SIGNIFICANT ITEMS 2016 2Q16 1Q16 2015 4Q15 3Q15 2Q15 1Q15 2014 4Q14 3Q14 2Q14 1Q14 2013 4Q13 3Q13 2Q13 1Q13 2012 2011 Agriculture (38) 35 (73) 148 (30) 147 (4) 35 316 363 - (47) - (351) (196) (40) (80) (35) (469) (225) Electronics & Communications 15 8 7 (78) (89) - 11 - (84) (16) - (68) - (131) (131) - - - (37) - Industrial Biosciences 4 3 1 (61) (60) - (1) - (20) (16) - (4) - (1) (1) - - - (10) (79) Nutrition & Health 13 12 1 (50) (46) - (4) - (15) (7) - (8) - 6 6 - - - (49) (126) Performance Materials 5 9 (4) (62) (60) - (2) - 292 (70) - 362 - (16) (16) - - - (104) 47 Protection Solutions 10 7 3 105 (8) - 113 - (45) (17) - (28) - 6 6 - - - (51) - Other (3) - (3) (40) - - (3) (37) (10) (7) - (3) - 1 1 - - - (137) - TOTAL SIGNIFICANT ITEMS BY SEGMENT - PRETAX 6 74 (68) (38) (293) 147 110 (2) 434 230 - 204 - (486) (331) (40) (80) (35) (857) (383) DEPRECIATION AND Year Year Year Year Year Year AMORTIZATION 2016 2Q16 1Q16 2015 4Q15 3Q15 2Q15 1Q15 2014 4Q14 3Q14 2Q14 1Q14 2013 4Q13 3Q13 2Q13 1Q13 2012 2011 Agriculture 271 126 145 453 79 74 139 161 436 97 78 121 140 358 79 72 95 112 337 295 Electronics & Communications 44 22 22 100 30 23 24 23 97 23 25 23 26 105 25 27 27 26 113 99 Industrial Biosciences 51 25 26 101 25 26 24 26 102 25 26 26 25 98 26 23 24 25 106 74 Nutrition & Health 115 57 58 236 58 58 58 62 264 64 66 68 66 271 67 66 66 72 288 207 Performance Materials 65 34 31 125 33 30 31 31 139 33 35 35 36 162 41 40 40 41 171 188 Protection Solutions 73 35 38 156 38 40 39 39 168 41 41 43 43 178 47 44 43 44 166 143 Other 4 1 3 6 2 - 3 1 8 1 2 2 3 9 2 1 5 1 10 9 TOTAL DEPRECIATION AND AMORTIZATION BY SEGMENT 623 300 323 1,177 265 251 318 343 1,214 284 273 318 339 1,181 287 273 300 321 1,191 1,015 SIGNIFICANT ITEMS BY SEGMENT - PRETAX OPERATING INCOME (UNAUDITED) (dollars in millions) DEPRECIATION AND AMORTIZATION BY SEGMENT (dollars in millions)

 
2Q16 Supplemental Financial Data and Non-GAAP Reconciliations 33 7/26/2016 E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES Year Year Year Year Year Year 2016 2Q16 1Q16 2015 4Q15 3Q15 2Q15 1Q15 2014 4Q14 3Q14 2Q14 1Q14 2013 4Q13 3Q13 2Q13 1Q13 2012 2011 RECONCILIATION OF DILUTED EARNINGS PER SHARE (EPS) (1) Operating EPS (Non-GAAP) 2.50 1.24 1.26 2.77 0.27 0.13 1.09 1.26 3.36 0.57 0.39 0.98 1.42 3.12 0.42 0.26 1.08 1.37 2.36 2.34 Non-Operating Pension & OPEB Costs (2) (0.15) (0.10) (0.05) (0.29) (0.06) (0.09) (0.07) (0.09) (0.09) (0.03) (0.02) (0.03) (0.03) (0.38) (0.09) (0.10) (0.10) (0.11) (0.46) (0.38) Significant Items 0.20 0.02 0.18 (0.39) (0.47) 0.10 0.04 (0.06) 0.12 0.09 (0.01) 0.05 - (0.40) (0.31) (0.03) (0.08) 0.02 (0.70) (0.25) EPS from continuing operations (GAAP) 2.55 1.16 1.39 2.09 (0.26) 0.14 1.06 1.11 3.39 0.63 0.36 1.00 1.39 2.34 0.02 0.13 0.90 1.28 1.20 1.71 RECONCILIATION OF ADJUSTED EBIT / ADJUSTED EBITDA TO CONSOLIDATED INCOME STATEMENTS Income From Continuing Operations Before Income Taxes (GAAP) 2,968 1,333 1,635 2,591 (421) 227 1,234 1,551 4,313 824 634 1,245 1,610 2,566 (109) 47 1,099 1,529 1,290 1,715 Add: Significant Items - Pretax - (Benefit) / Charge (335) (44) (291) 453 622 (138) (85) 54 (209) (137) 10 (85) 3 485 319 40 91 35 930 467 Add: Non-Operating Pension & OPEB Costs - Pretax (2) 207 133 74 397 86 115 87 109 128 32 32 32 32 533 123 140 124 146 651 532 Operating Earnings Before Income Taxes (Non-GAAP) 2,840 1,422 1,418 3,441 287 204 1,236 1,714 4,232 719 676 1,192 1,645 3,584 333 227 1,314 1,710 2,871 2,714 Less: Net Income Attributable to Noncontrolling Interests 10 4 6 6 (3) - 5 4 10 - 1 3 6 13 - 3 4 6 24 39 Add: Interest Expense 185 93 92 322 82 82 74 84 377 87 93 94 103 448 108 108 115 117 464 447 Adjusted EBIT (Operating Earnings) (Non-GAAP) 3,015 1,511 1,504 3,757 372 286 1,305 1,794 4,599 806 768 1,283 1,742 4,019 441 332 1,425 1,821 3,311 3,122 Add: Depreciation and Amortization 699 339 360 1,338 303 290 362 383 1,366 316 296 380 374 1,341 325 314 338 364 1,369 1,186 Adjusted EBITDA (Operating Earnings) (Non-GAAP) 3,714 1,850 1,864 5,095 675 576 1,667 2,177 5,965 1,122 1,064 1,663 2,116 5,360 766 646 1,763 2,185 4,680 4,308 (1) Earnings per share for the year may not equal the sum of quarterly earnings per share due to changes in average share calculations. (2) First quarter 2015 includes the impact of an exchange loss on non-operating pension of $23. RECONCILIATION OF NON-GAAP MEASURES (UNAUDITED) (dollars in millions, except per share)

 
2Q16 Supplemental Financial Data and Non-GAAP Reconciliations 34 7/26/2016 E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES Jun-16 Mar-16 Dec-15 Sep-15 Jun-15 Mar-15 Dec-14 Sep-14 Jun-14 Mar-14 Dec-13 Sep-13 Jun-13 Mar-13 Dec-12 Dec-11 CALCULATION OF NET DEBT Cash and Cash Equivalents 4,411 4,166 5,300 3,324 4,746 3,622 6,910 3,982 4,174 3,782 8,941 7,005 6,685 6,555 4,284 3,586 Marketable Securities 742 623 906 406 556 125 124 566 173 67 145 184 211 26 123 433 Total Cash 5,153 4,789 6,206 3,730 5,302 3,747 7,034 4,548 4,347 3,849 9,086 7,189 6,896 6,581 4,407 4,019 Short-Term Borrowings and Capital Lease Obligations 2,295 1,625 1,165 1,781 647 1,621 1,422 3,889 2,506 2,019 1,721 4,204 3,315 2,006 1,275 817 Long-Term Borrowings and Capital Lease Obligations 8,119 8,126 7,642 8,155 12,088 8,727 9,233 9,241 9,251 9,259 10,699 10,755 10,765 11,279 10,429 11,691 Total Debt 10,414 9,751 8,807 9,936 12,735 10,348 10,655 13,130 11,757 11,278 12,420 14,959 14,080 13,285 11,704 12,508 Net Debt (Non-GAAP) 5,261 4,962 2,601 6,206 7,433 6,601 3,621 8,582 7,410 7,429 3,334 7,770 7,184 6,704 7,297 8,489 Year Year Year Year Year Year 2016 2Q16 1Q16 2015 4Q15 3Q15 2Q15 1Q15 2014 4Q14 3Q14 2Q14 1Q14 2013 4Q13 3Q13 2Q13 1Q13 2012 2011 CALCULATION OF FREE CASH FLOW(1) Cash (Used for)Provided by Operating Activities (GAAP) (1,503) 341 (1,844) 2,316 4,161 200 78 (2,123) 3,712 5,514 269 350 (2,421) 3,179 5,512 298 36 (2,667) 4,849 5,152 Less: Purchases of Property, Plant and Equipment 507 150 357 1,629 338 353 373 565 2,020 709 530 461 320 1,882 659 466 436 321 1,793 1,843 Free Cash Flow (Non-GAAP) (2,010) 191 (2,201) 687 3,823 (153) (295) (2,688) 1,692 4,805 (261) (111) (2,741) 1,297 4,853 (168) (400) (2,988) 3,056 3,309 (1) Data is on a total company basis. RECONCILIATION OF NON-GAAP MEASURES (UNAUDITED) (dollars in millions)

 
2Q16 Supplemental Financial Data and Non-GAAP Reconciliations 35 7/26/2016 E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES SEGMENT OPERATING EARNINGS MARGIN % Year Year Year Year Year Year (Segment Operating Earnings / Segment Net Sales) (1) 2016 2Q16 1Q16 2015 4Q15 3Q15 2Q15 1Q15 2014 4Q14 3Q14 2Q14 1Q14 2013 4Q13 3Q13 2Q13 1Q13 2012 2011 Agriculture 28.1% 26.9% 29.1% 16.8% -3.5% -19.2% 24.0% 28.9% 20.8% 7.7% -3.6% 23.1% 32.8% 21.1% 5.0% -3.4% 25.8% 32.3% 20.4% 19.4% Electronics & Communications 16.1% 18.8% 13.1% 17.3% 17.6% 19.5% 16.9% 15.3% 14.1% 16.1% 14.5% 13.7% 12.1% 12.4% 14.1% 14.5% 13.9% 6.9% 8.8% 13.3% Industrial Biosciences 17.7% 17.5% 17.9% 16.4% 19.6% 16.3% 14.0% 15.4% 16.6% 16.5% 14.3% 17.6% 18.0% 14.2% 14.4% 14.1% 14.7% 13.6% 14.2% 12.1% Nutrition & Health 14.3% 15.6% 13.0% 11.5% 10.5% 12.6% 12.1% 10.6% 10.5% 9.4% 11.0% 11.1% 10.2% 8.2% 9.1% 8.8% 6.8% 8.3% 8.9% 8.2% Performance Materials 23.1% 24.3% 21.9% 22.9% 21.9% 24.3% 22.5% 23.0% 20.9% 22.6% 23.9% 18.7% 18.6% 20.3% 19.1% 22.6% 20.1% 19.1% 18.7% 14.7% Protection Solutions 24.0% 23.9% 24.1% 21.1% 20.4% 20.2% 22.5% 21.1% 20.3% 21.6% 20.9% 20.5% 18.5% 17.1% 20.0% 17.2% 16.3% 15.0% 15.2% 16.1% 23.0% 22.8% 23.2% 16.9% 10.4% 8.9% 20.3% 23.1% 17.7% 13.5% 11.6% 18.8% 23.8% 16.9% 11.7% 10.1% 19.6% 22.7% 15.9% 16.1% TOTAL SEGMENT OPERATING EARNINGS MARGIN % RECONCILIATION OF NON-GAAP MEASURES (UNAUDITED) (1) Segment Operating Earnings margin %'s for Other (which includes consulting solutions, pre-commercial programs, pharmaceuticals, and non-aligned businesses) are not presented separately above as they are not meaningful; however, the results are included in the Total margin %'s above.

 
2Q16 Supplemental Financial Data and Non-GAAP Reconciliations 36 7/26/2016 E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES Reconciliation of Segment Operating Earnings and Operating Earnings EPS excluding the impact of currency (Non-GAAP) Three months ended June 30, 2015 Segment Operating Earnings Segment Operating Earnings Impact of Currency Segment Operating Earnings excluding currency (Non-GAAP) % Change Agriculture $ 772 865$ (36)$ 901$ 17% Electronics & Communications 89 93 (1) 94 6% Industrial Biosciences 50 62 (3) 65 30% Nutrition & Health 100 130 (3) 133 33% Performance Materials 301 325 (16) 341 13% Protection Solutions 181 188 (4) 192 6% Other (46) (50) - (50) -9% Total Segment Operating Earnings 1,447$ 1,613$ (63)$ 1,676$ 16% Six months ended June 30, 2015 Segment Operating Earnings Segment Operating Earnings Impact of Currency Segment Operating Earnings excluding currency (Non-GAAP) % Change Agriculture $ 1,910 1,966$ (119)$ 2,085$ 9% Electronics & Communications 168 152 (1) 153 -9% Industrial Biosciences 104 125 (4) 129 24% Nutrition & Health 186 234 (6) 240 29% Performance Materials 618 598 (35) 633 2% Protection Solutions 348 364 (10) 374 7% Other (77) (109) (1) (108) -40% Total Segment Operating Earnings 3,257$ 3,330$ (176)$ 3,506$ 8% Three months ended June 30, 2015 Operating Earnings per share (Non-GAAP) (1) Operating Earnings per share (Non-GAAP) (1) Impact of Currency Operating Earnings per share excluding currency (Non-GAAP) % Change Operating Earnings per share (Non-GAAP)(1) $ 1.09 1.24$ (0.05)$ 1.29$ 18% (1) See page 33 for reconciliation of operating earnings per share. Three months ended June 30, 2016 Segment operating earnings and operating earnings per share excluding the impact of currency assumes current operating earnings results using foreign currency exchange rates in effect for the comparable prior-year period. Three months ended June 30, 2016 RECONCILIATION OF NON-GAAP MEASURES (UNAUDITED) (dollars in millions) Six months ended June 30, 2016

 
2Q16 Supplemental Financial Data and Non-GAAP Reconciliations 37 7/26/2016 E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES As Reported (GAAP) Less: Significant Items(1) Less: Non- Operating Pension/OPEB Costs (Non-GAAP) As Reported (GAAP) Less: Significant Items(1) Less: Non- Operating Pension/OPEB Costs (Non-GAAP) Other operating charges 143$ (30)$ -$ 173$ 174$ 5$ -$ 169$ Selling, general and administrative expenses 1,211 76 53 1,082 1,274 - 35 1,239 Research and development expense 432 - 20 412 495 - 13 482 Total 1,786$ 46$ 73$ 1,667$ 1,943$ 5$ 48$ 1,890$ (1) Further information regarding significant items is included in our Quarterly Earnings Release financials. 2016 2015 Corporate expenses (GAAP) 113$ 153$ Significant items(1) 30 5 Corporate expenses (Non-GAAP) 83$ 148$ (1) Further information regarding significant items is included in our Quarterly Earnings Release financials. Coporate expenses The reconciliation below reflects GAAP corporate expenses excluding significant items. Three Months Ended June 30, RECONCILIATION OF NON-GAAP MEASURES (UNAUDITED) (dollars in millions) Three months ended June 30, 2016 Three months ended June 30, 2015 Reconciliation of Operating Costs to Consolidated Income Statement Line Items GAAP operating costs is defined as other operating charges, selling, general and administrative expenses, and research and development costs. The reconciliation below reflects operating costs excluding significant items and non-operating pension/OPEB costs.

 
2Q16 Supplemental Financial Data and Non-GAAP Reconciliations 38 7/26/2016 E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES 2016 2015 2016 Outlook1 2015 Actual Effective income tax rate (GAAP) 23.0% 21.1% 24.3% 26.9% Significant items effect and non-operating pension/OPEB costs effect (0.1%) (1.9%) (1.2%) 0.2% Tax rate, from continuing operations, before significant items and non-operating pension/OPEB costs 22.9% 19.2% 23.1% 27.1% Exchange gains (losses) effect2 (0.4%) 2.7% 0.9% (5.8%) Base income tax rate from continuing operations (Non-GAAP) 22.5% 21.9% 24.00% 21.3% (1) Represents the company's anticipated full year tax rates for 2016. (2) The company does not forecast the impact of exchange gains (losses) on the projected tax rate. Three months ended June 30, RECONCILIATION OF BASE INCOME TAX RATE TO EFFECTIVE INCOME TAX RATE (UNAUDITED) Base income tax rate is defined as the effective income tax rate less the effect of exchange gains (losses), significant items and non-operating pension/OPEB costs. Year ended December 31,

 
27 Appendix 2: DowDuPont Merger of Equals Appendix 2 DowDuPont Merger 39

 
Close 2H16 Signed 12/11/15 Share- holder Vote Approved 7/20/16 S-4 Filing Effective 6/9/16 Hart- Scott- Rodino Filing Filed on 1/27/16 ROW Competi- tion Filings 2Q16/ 3Q16 In process Complete Spins1 Stand Up SpinCos1 Significant Progress on Execution of Planned Merger of Equals 40 4Q15 2016 2017-2018 Drive close of transaction CLOS E Prepare to operate MergeCo Operation of public MergeCo Prepare for intended spins Spin as soon as possible Capture >$3B of cost synergies Plan to operate three business portfolios & ensure synergy capture Achieve 100% run-rate <24 mo. after close 1. Subject to DowDuPont Board Approval. Each Company’s Planning Teams are Making Progress to Expedite Synergy Capture Upon Merger Closing; Carve-out Financial Work Underway

 
29 Copyright © 2016 DuPont. All rights reserved. The DuPont Oval Logo, DuPontTM, The miracles of scienceTM, and all products, unless otherwise noted, denoted with ® or M are trademarks or registered trademarks of E. I. du Pont de Nemours and Company. +Images reproduced by E. I. du Pont de Nemours and Company under license from the National Geographic Society.

 

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