Good morning.My name is Jackie and I will be your conference operator today. At this time, I would like to welcome everyone to the DuPont Second Quarter 2008 Investor Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer period. [Operator Instructions]. For listening to the webcast, please go to www.dupont.com. Thank you. It is now my pleasure to turn the floor over to your host, Carl Lukach, Vice President of Investor Relations. Sir, you may begin your conference.

Thank you, Jackie and good morning everyone. Thank you for joining today's webcast covering DuPont's second quarter 2008 financial results and outlook. We apologize for the 10-minute delay to start this morning due to some technical difficulties on our phone lines. Remind you that a replay of today's call is available afterwards on our website. So let's get started. With me today are Chad Holliday, Chairman and CEO of DuPont; Jeff Keefer, our Chief Financial Officer; and Jim Borel, Group Vice President of DuPont's Production Agriculture businesses. Since growth in agriculture was a key factor in our second quarter results, and there is lots of news this time of year in production agriculture, we've asked Jim to join the call and share with you his insights on his businesses and their performances in the quarter and outlook. The first administrative items for those of you accessing this call through our website dupont.com, we will be using slides today. Please turn to slide 2. During the course of this conference call, we will make forward-looking statements. All statements that address expectations or projections about the future are forward-looking statements. Although they reflect our current expectations, these statements are not guarantees of future performance but involve a number of risks and assumptions. We urge you to review DuPont's SEC filings for a discussion of some of the factors that could cause actual results to differ materially. We also will refer to non-GAAP measures and request that you please refer to the reconciliations to GAAP measures or GAAP statements provided with the earnings news release and on our website. We have also posted on our website supplemental information that we hope is helpful to your understanding of our company's performance. So with that, I'm pleased to turn the call over to your Chairman and CEO, Chad Holliday.

Thank you, Carl. Good morning and thank you for joining us today. DuPont had a solid second quarter with record underlying earnings per share and our second half outlook projects a record underlying earnings year. Our agricultural businesses were very strong. All of our businesses in emerging markets had another great quarter. Our pricing actions produced the highest quarterly gain in the past four years. And we had excellent fixed cost productivity results from our ongoing projects we described to you in the past. The combination of these positive factors, plus excellent execution by our teams, was more than enough to offset the weak demand in U.S. markets and the accelerated increases in the price of national gas and petroleum feedstocks that we buy as raw materials. We also had some help this quarter from currency in a few items we could not project in our guidance, three months ago. Jeff will cover all the details next, but the bottom line is our earnings per share for the quarter ended up 13% higher than last year. And for the first half we grew earnings per share 18% versus last year. Five years ago, we could not have delivered these results in this environment. We are a very different company today and I hope you'll see that in our results. Let me turn it over to Jeff, who will take you through the quarter and the outlook. And I'll come back at the end to share closing thoughts. Jeff?

Thanks Chad. Before covering the details of the quarter, let me frame for you how we view the results. In short, we had a strong performance in the second quarter, with earnings per share up 13% versus last year. The $1.18 earnings per share in the second quarter had about $0.07 of benefits from items we could not predict, when we gave you our guidance. The $0.07 is comprised of a litigation settlement and one-time tax settlement. We had resources working diligently on these items for sometime. And their efforts resulted in successful resolutions in the quarter. After accounting for those items, our strong performance was a result of better-than-expected Agriculture & Nutrition results, as well as strong performance across all our businesses. We are executing very effectively to meet our commitments in a challenging macro-economic environment. Turning now to slide 3, which summarizes earnings per share and sales results. Second quarter reported earnings per share grew 13% to $1.18 versus prior year quarter. For the first half, reported earnings per share grew 18%. Second quarter consolidated net sales increased 12%, a positive 7% local price, 5% currency benefit, 1% increase in volume and a negative 1% due to portfolio changes. Turning to slide 4, all segments increased sales by 8% or better. The standout in the quarter was Agriculture & Nutrition posting 23% sales growth. These results were underpinned by strong global agriculture markets, price gains in crop protection products and seed holding corn share in North America and gaining share in other seed markets. While Agriculture & Nutrition results were outstanding, all of our businesses turned in solid results reflecting global positions, the first five end markets, brand strength and technology advantages. Carl and Jim will cover the segments in detail but I want to highlight a few…

Thanks Jeff. Let's move to our Ag & Nutrition platform on slide 8. They reflect on where we are as a company and in this platform, it underscores how uniquely positioned we are to combine seed, breeding and trait technologies, quality inputs and sound farming practices to increase both the quantity and quality of food supply globally and really make a difference for economies around the world. And that we can deliver strong results along the way. We had a strong quarter. Our revenue for the platform increased $467 million, up 23% to $2.5 billion. The growth was across all units, with corn seed sales up 16%, soybean seed sales up 26%, crop protection sales up 21% and our nutrition and health sales up 34%. We now expect that for the full year 2008, Pioneer seed sales will exceed $4 billion, compared to $3.3 billion last year, and our platform sales will exceed $8 billion, compared to $6.8 billion last year. Both will be sales records. Earnings for the platform grew 18% to $504 million. This reflects strong sales growth across all products and regions, including both price and volume gains, partially offset by our ongoing seed investments in R&D and sales and marketing as well as significantly higher commodity prices. Marketplace fundamentals for growth are outstanding. Growers are investing more in technology to protect their crops and maximize yields. For the first half, we delivered 20% revenue and 20% earnings growth, well ahead of the 15% per year commitment that Tom outlined in March. And I'm pleased to say, we now expect to deliver 20% PTOI growth for the full year 2008. I'm really proud of our team and the results they delivered. Let me share some of the details. Crop protection delivered another impressive quarter and closed out…

Okay, thank you, Jim. I'll now cover our remaining businesses and then turn things back to Chad. Moving now to slide 11, Coatings & Color Technologies segment sales increased 10% and earnings increased 9%. Platform margins were essentially flat with last year, through good cost control, pricing gains, favorable currency and successful sales efforts. Titanium dioxide sales were up modestly, on flat global volumes and improved U.S. dollar price. Volumes in North America were weak for architectural paint, but importantly, we achieved a third quarter of sequential price increase, as well as achieved a price increase versus the prior year quarter. Sales grew outside of North America driven by strong demand, particularly in Latin America and higher U.S. dollar prices. Due to these actions and aggressive cost controls, earnings grew modestly, despite the weak domestic markets and higher raw material and transportation costs. Our Performance Coatings businesses delivered moderate sales growth and significant earnings growth. The results reflected diversity of our coatings franchise and our ability to execute in these market conditions. Our industry leading refinished paint growth with industrial paint growth, coupled with OEM paint businesses' tight control on costs, more than offset the pressure created by the weak auto market in the United States. Looking ahead for Coatings & Color technologies, we expect modest second half sales and earnings growth based on the favorable impact of pricing actions, continued growth in emerging markets and cost control efforts, mitigating continued weakness in North American markets. From a product perspective, our TiO2 business is operating at high utilization rates, as end users seek a reliable supply source. We expect coatings growth will be tampered by continued weak OEM markets. Please turn to slide 12, for Electronic & Communication Technologies. Sales grew 10% to $1.1 billion on higher prices and continued…

Thank you, Carl. To conclude our presentation today, I'd like to put our company's current performance and future growth in the context of four major changes we're seeing today. Please turn to slide 16. Specifically there are three industries that over time and with adjustments will recover and revert to the norm. More importantly, we see one that won't. We think of this is the new reality ahead and due to change as a catalyst for growth for our company that we've been planning for. First, the U.S. housing market. While currently in a depressed condition, it will correct over time. We don't see the volume of new residential homes getting back to the 2005 peak of 2.1 million new homes anytime soon. But what's important to DuPont, however, is that new homes will be much more energy efficient and will focus more on protection for family. We think the demand for energy saving material and solutions for the construction industry is going to rise dramatically. And therefore the value of future market for DuPont is greater than today. This is the perfect position for DuPont and a suite of new existing products we are introducing for this market. Let me give you two examples. First, DuPont StormRoom, the only in-home shelter reinforced with DuPont Kevlar to protect people in a tornado. Our new Evergreen systems for the interior walls and ceilings of homes and building to store heat during the in the day and release at night to reduce energy use. Our expanding offering of Barrier products such as the Steel X system with DuPont Tyvek Tekgraf [ph] and increasing the installed or valuable wall system with DuPont Tyvek ThermaWrap and DuPont Tyvek Silver and future products to improve the lifetime and efficiency of photovoltaic module, both crystal and…

Okay. Thanks, Chad. Jackie, in light of the delayed start, I think we better go right to question, question-and-answer session now. Question And Answer

Thank you. [Operator Instructions]. Your first question is from David Begleiter of Deutsche Bank. Please go ahead.

Thank you. Good morning. Jim, now that we're through the '08 season, what are your expectations for corn seed share and soybean share in March in '09?

Thanks Dave. We expect share to increase on corn in the... in North America we think we've hit the inflection point, and we feel great about the line-up. So we expect it to start increasing. And as I mentioned earlier, we increased soybean share this year, and with what we're going to do with the Y series, next year we expect share to grow up again.

Any numbers on corn seed share next year, 1%, 2%?

Up. I am not going to say a percentage, but we expect to gain.

Thank you. Your next question is from Sergey Vasnetsov of Lehman Brothers. Please go ahead.

Good morning. How do you see a flow-through of energy cost accrued on natural gas, for you given typically DuPont has a little bit of a delay, what it used to have historically?

Sergey, thanks, this is Jeff. If you look at the first half, we have covered our raw material and energy cost increase with pricing. And so we really got out in front of the curve there on our pricing and standing us in good stead. And as I said earlier, we are going to be very vigilant on pricing as we go forward to make sure we are keeping up with the raw material flow through.

Okay. Thanks --

And Sergey, I would add to that, what Jeff said early in the call that we expect about 15%. Again inflation in cost is our best guess in the third quarter.

Okay. Thanks.

Thank you. Your next question is from Kevin McCarthy with Banc of America. Please go ahead.

Yes, good morning. Chad, the chemical industry has seen two large multibillion deals so far this month. You mentioned in your prepared markets that the credit market dislocations may provide some opportunity. So I wondered if you could comment on the activity industry wide and elaborate on DuPont's latest thoughts with regard to external growth over the next year or so.

Thanks for the question. As we outlined in March, we believe these... both of acquisitions particularly in Agriculture & Nutrition, Safety & Protection and other selected places across the company, including in these fast growing markets of China and India, developed parts of the world that we think are going to be very much available to us. And as this year plays out. And given our cash good position, we are looking for those that are on target with our goals. If you look at our 2010 forecast, what we're trying to accomplish, we'll be looking for acquisitions related to that. We have been more of a net divesture over the last years as we clean up our both portfolio and focus on higher growth businesses. So now we think the right time is to adjust for that, but again we are not talking about some big massive acquisition. We think that will be very disruptive to delivery with the consistence earnings pattern we show.

Thanks very much.

Thank you. Your next question is from Jeff Zekauskas with JP Morgan. Please go ahead.

Hi, good morning. All things being equal, energy prices are probably higher than you expected for the second half. And auto and housing demand is probably lower, but you raised your guidance. So in general, in the second half, what do you expect to be much better that's offsetting those weaknesses?

Jeff, we continue to expect strong emerging market growth, continued pricing gains. And we will continue our productivity efforts, those that stood us in good stead. And we are going to continue those in the second half.

Okay. And for my follow up, how many triples domestic, triple stack acres in corn did you achieve? And what's the size of the rollout in Optimum GAT in soy in 2011 and why is that late?

On the triples we were about 30% this year as we said. And we expect that to be no issues going forward. I am sorry; your other question was on Optimum GAT and soy? And that... we just got the USDA approval. If I go back to the Y series launch, first thing is we've got great technology in that product line already. But we're going to bring out the Y series. And we intend to bring Optimum GAT and integrate it into that line so that we've got the best yielding, best performing varieties going forward from where we are. We're timing that to make sure that we continue to have leading soybean position overall.

Thank you. Your next question is from Mark Connelly of Credit Suisse. Please go ahead

Thank you. Just one big picture question. When you talked about the reversion to the mean in some of your core businesses like housing and auto, how does that play out in practical terms with the management incentive changes that you've made recently to try to accelerate growth in earnings? I'm just curious if we do experience a couple of years of subdued growth how do you manage to embed incentive program through that period of this long [ph]?

Hey Mark, it's Chad. Great question. One of the things in the changes that we described for you back in March that we implemented for this year, something we call dynamic planning factor. We think that's probably unique to run other businesses, so we can uniquely incent people based on changing economic conditions. So if we do see a change, we don't follow people to either to get a windfall or necessarily lose our hope because there's no way to do it. We have that adjustment. We think we've got that balance across our units where it's very much in line with the shareholding out, because our performance stock shares are how we compare to our new frame of reference companies on top of shareholder returns. So we believe we have a management incentive better to perform for the shareholders than I have ever seen in the company.

Thank you. Your next question is from Bob Koort with Goldman Sachs. Please go ahead.

Thanks very much. Jeff, I was wondering given the $2 reversal in soybeans, will there be a favorable mark-to-market in the third quarter and then for June? You mentioned the Y series has some pretty nice yield improvement. Can you talk generally about what your pricing strategy is in the seed business going into '09 given the escalation in commodity prices over the last couple of years?

Bob, this is Jeff on your question on the hedge. We have put into place instruments to impact the negative volatility. I don't know what as we look forward exactly with that hedge is going to do but that's what we've done.

Bob on pricing, couple of key things: first of all, we're bringing a lot of technology to the market. And this is a market where farmers are really looking to protect and maximize yield and they're willing to pay for that. We price per value. So we're expecting pricing to go up on the product line to reflect that value that we're going to be delivering. In general, we could anticipate important price increases. We're price leader in soybeans and in corn, I'd anticipate double-digit prices again in '09 based on where we are.

Thank you. Your next question is from Don Carson with Merrill Lynch. Please go ahead.

Yes. Jim, a question on Optimum GAT, you just got your approval for soybeans. You're going to have relatively margin reductions over the next few years. But my question is on Optimum GAT and corn, and do you feel more confident about regulatory approval now that's got in soybeans? And more importantly, is that going to be in elite germplasm from your initial launch in 2010 and maybe you could just describe what skill that launch will be on?

Sure, Don. We are on track for commercial introduction in 2010. We'll ramp up aggressively beyond that, and as we've said before, we expect to be largely converted by 2015. And the intent here is to bring Optimum GAT into corn with our... as we bring out new leading hybrids. And so, I can't size the acres for 2010 exactly, but it'll be a commercial introduction and leading hybrids there and it'll be ramped up aggressively over the next several years beyond that.

And just as follow up on Optimum GAT, you described some of the new SU mix as you'll have for Optimum GAT beans. I know you've recently signed an agreement with Syngenta to get access the two active ingredients for corn. What benefit do you see to the SU franchise from a) these new mixtures and b) introduction of Optimum GAT in both corn and soy?

This is a real opportunity, Don because first of all, there are weed shifts and other things, Mother Nature at work and Optimum GAT gives us the ability to put a range of sulfonylurea herbicide products in combination with other things that may be useful for the farmers. So we can really make sure we're getting the right products on the right acre. So it just opens up an important opportunity for us to make sure we're giving the farmer what they need when they need it.

Thank you. Your next question is from Mike Judd with Greenwich Consultants. Please go ahead. Mr. Judd, your line is live. Please proceed, with your question.

Yes, thanks for the opportunity. I just had a question about the mark-to-market loss you said that you're pretty much hedged for the rest of the year. Could you just talk... provide a little bit more detail on that please?

Well,again, we've used in our seed business for many, many years hedging tools. They are primarily used to help us manage the price risk on the commodities we purchase. Normally the gains and losses on those are small but with the run up in the soybeans we had the negative $50 million that you saw. Going forward, to minimize that volatility we have put into place instruments that will minimize that negative earnings volatility.

Just to follow up to that, it appears that corn and soybean seed, probably have come down fairly sharply in the last couple of weeks or so. Could there be a potential benefits or just too early to tell?

It's too early to tell. I can't speculate on that.

Thank you. Your next question is from P. J. Juvekar with Citi. Please go ahead.

Yes. Hi good morning. Question for Jeff. The cash conversion of earnings lagged a little bit, cash flow from operations was negative in the first half. Can you just talk about that and did you finance any purchases for the farmers?

So, let me take your first question. P.J., yes cash flow from operations was negative, that's primarily due to the increase in working capital, which was primarily accounts receivable. You've seen the large increase in our sales and the success we had on pricing. Obviously the currency is a positive there too. So I can assure you that our day sales outstanding and our inventory days supply are under control in line with where we would expect them to be. And as we make those collections, we're seeing no high here in terms of account receivable, because we do not collect the... the ag collections until the end of the year. So we expect to be on target for our cash for the year

Okay. And just to follow up on bioplatform. What is your latest timeline on EPS impact from your bioplatform, your biofuels and biomaterials? Thank you.

Well I guess the first one P.J. that we mentioned today was late next year, the Omega-3 program. We expect to bring revenues to the income statement late next year. All of the other timelines that we outlined for you at the November bioday here remain the same on track. Significant income statement impact out about after 2010, out about 2012. That's for the fuels program and the materials program. Materials program, though as you know, is commercial today, with Sorona and it's in the capacity increase phase

P.J.it's Chad. Let me just add. As I've said in my comments, this partner with Danisco around the cellulosic ethanol is the speed about to get to market. I have no question we have the best team. We've got the right pieces of technology. We are moving very rapidly towards the top power plant to work. So, we see nothing in the environment except great demand for the cellulosic technology flow-through from government... and for consumer way. And our work with BP on biobutanol, I just could not be more pleased with the progress we are making. So we are not in a position to update the numbers we gave you in March. But we are seeing everything is kind of fallen into place like we hoped in the market demand. I just can't imagine being best.

Thank you. Your next question is from Steve Schuman with New Vernon Associates. Please go ahead.

Good morning. You have mentioned that you're more of on a divestiture mode. When do you think the right time is to divest some of your ethylene cracker assets and related businesses?

Steve, I am sorry, if we said we are in a divesture mode that was a misstatement. That is not where we are. We are on a acquisition mode. And we have no currently planned divestitures. Unlike this portfolio we had a chance when we divested our fibers business, if there is anything that we didn't see was good long term, I was drawing in that to give me the coke [ph]. So we are very happy with the portfolio. We will always be making small ups and downs. And if we are not doing that every year, we'll be not doing right thing to shareholders but if we like, dismiss the businesses.

Steve, I would add to that, if you look back at the March 14, Investor Day we had in New York we had a specific slide on key areas of interest that we might, we hope to find some opportunities for in the acquisition area.

Great thank you.

Thank you. Your next question is from Mark Gulley with Gulley. Please go ahead.

Just a couple of questions. First of all Chad, with respect to biobutanol in Europe, recently there has been some pushback in Europe for perspective of the economics of that period. Do you see that affecting your joint venture with BP?

I've been in Europe in the last three weeks and met with a series of government officials for multiple countries. I think we have a very good fix on that situation. There's a lot of politics around this, a lot of stuff in press, but the government officials I've met with clearly see the values and particularly like the biobutanol piece. And my guess is there will be a lot of press back and forth until we have commercial products but we still remain quite encouraging.

There's a follow up with your pricing actions across the board, I would imagine you're probably doing more walking away from business. Is the weak volume growth that this 1% reflects the price increase well in this to walk away from low margin business? And if so, do you see that continuing?

That market is not the primary driver. We're a value news price. So we're continuing to do that. That's primarily how we're getting our pricing up. I think the only place that's occurring is a little bit in our performance materials platform. But I would caution you that, that volume decline you saw in performance materials is more related to you for this quarter... is more related to the ethylene plant shutdown which was a planned scheduled maintenance shutdown.

Thank you. Your next question is from John Roberts with Buckingham Research. Please go ahead.

Good morning, guys.

Good morning, John.

I thought the majority of the cellulosic ethanol income was going to come mainly through royalties and maybe small minority interest in projects. So do you think we need to have profitability improved materially in the existing biofuels industry for those companies who want either life insured technology or take even a small partner?

John, if you've seen, there's been a lot of press particularly in the last 90 days, kind of anti-ethanol via corn grain. We think that's probably been over done. But remember ethanol is the commodity. And so what we're shooting for is a lower cost position, absolute they can be achieved by the grain, that's what we only described for you previously. Did we avoid that food versus fuel debate and we focus on a lower cost position, that's our goal. We haven't seen anything to think that we can't get to that goal today. Of course we've described before a very logical step where we'd take any of the grain ethanol of plants that are out there today and convert with cellulosic feedstock. So we think it's a win-win-win position and we're getting a lot of encouragement from multiple governments including the United States.

Where do you think the capital for that investment will come from? Because if I remember right I don't think DuPont was going to put a lot of its own capital into this growth.

Well... if we've been successful as we could be and I'm not predicting that today. We'll go into these steps of rapid phase up a bit it just would not smart for anyone caught me to do it on capital and just our capacity to handle that. So we must be operators of some plants because we got to keep reflecting the technology and bringing out. But I think our step would be to license the technology as we described before exact details of how to do that. We're premature to get into it but we are not looking for the gigantic cash hole here from DuPont. We've got different rate multiple years to get cash back.

Thank you.

Jackie, I think we have to leave. We've run out of time, and we greatly apologize to all for running over because of the delayed starts and technical difficulties. IR team is available for all of you to take care... take follow up questions and we will get a reminder notice out to you shortly about the investor event coming up at the end of August. Thank you very much for your interest in DuPont. That concludes our call today.

Thank you. This concludes today's DuPont conference call. You may now disconnect your lines and have a wonderful day.