Good morning. My name is Curtis and I'll be your conference operator today. At this time, I would like to welcome everyone to the DuPont Third 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]. We do ask that you limit yourself to one question and one follow-up question and please pick up your handset to allow optimal sound quality. To listen to the webcast, please go to www.dupont.com. Thank you. It is now pleasure to turn the floor over to your host, Karen Fletcher, Vice President of Investor Relations. Ma'am, you may now begin your conference.

Thank you, Curtis. Good morning and welcome. I'm pleased to be hosting this call. With me this morning are Chad Holliday, Chairman and CEO; Ellen Kullman, President and CEO Designate and Jeff Keefer, our Chief Financial Officer. Also joining us is Jim Borel, Group Vice President of DuPont's Production Agriculture business who we've asked to join us for the Q&A session today. Before we begin, I'd like to remind you that we're webcasting this call and you can access it through our website, www.dupont.com. We will be using slides today which are posted on the website along with the press release that we issued earlier their morning. I invite you to 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 will also refer to non-GAAP measures and request that you please refer to the reconciliations to GAAP statements provided with our earnings news release and on our website. We have also posted supplemental information on our website that we hope is helpful to your understanding of our company's performance. With that, I'll turn the call over to our CFO, Jeff Keefer.

Thanks very much Karen. First, I want to thank all the investors who are taking time to participate in our call today. Market conditions are difficult and we appreciate your time and interest. The entire nation and now the world are embroiled in the credit crisis, the unprecedented market volatility impairing [ph] the long-term economic impacts that may ensue. With this backdrop, I can confirm our credit profile is very strong and even a competitive advantage. Our performance in the quarter, the hurricane impacted quarter was solid and our outlook is focused on taking quick actions in response to continuously changing environment. My review today will be very detailed, covering all of these topics, allowing as much clarity as possible upon our company's position and priorities for the coming months. I will start with a review of our credit profile on slide 3. We have long lived by a rigorous and prudent financial discipline policy with the first principle being to maintain a strong balance sheet. Due to this active strategy, today, our liquidity is solid and our cost of borrowing remains low. Specifically, we have over $2 billion in cash positioned throughout the world, we have about 2 billion in commercial paper of which our CP borrowing costs are well below the average rates of A1/P1 issuers. And finally, we have $2.7 billion in untapped credit lines with a broad and diverse institutional make up. Simply said, we enjoy the benefits of being a flight to quality [ph] and rightfully so. In addition to having a strong position, we are taking actions around the world to ensure we build on this position. And I will detail out for you specifics during our review of the third quarter and outlook. Now if you'll please turn to slide number 4. Before…

Okay. Thanks Jeff. I'll now go through our traditional segment reviews, sharing key highlights that explain third quarter results and our outlook for each. Just a reminder that all references to individual platform earnings are excluding significant items. So turning to slide 10. Our Ag & Nutrition segment delivered strong seasonal results. The fundamentals for growth in production agriculture continue to be outstanding despite the global credit crisis. Global demand for grain and oilseeds is high, pending stocks are low, commodity prices remain attractive even in light of the recent declines and the financial help for farmers is strong as measured by record net income per acre returned. Our Ag & Nutrition revenues grew 22% over last year and underlying earnings improved 45% when you exclude the $49 million gain from closing soybean contracts that Jeff discussed earlier and a $25 million gain from last year from a contract settlement. Higher average selling prices and volume increases drove our revenues up a record $236 million to $1.3 billion in the quarter. We continued our fixed cost productivity improvements in the platform while maintaining strategic growth investments in seed research and our global sales force. Our growth in crop protection product earnings and working capital improvement contributed an estimated 200% increase in free cash flow in the quarter. Let's take a closer look at the results from our crop protection products. Revenue increased significantly on strong global insecticide and fungicide sales and herbicide pricing in Latin America. Earnings were up substantially on higher variable margins, favorable product mix and fixed cost improvements. Higher average selling prices more than offset increased raw material and energy costs. Sales in Brazil were early and volume is driven by strong demand for [indiscernible] fungicide and Lannate insecticide. Acres increased in sugarcane and soybean. Fruits and…

Thank you, Karen. Please turn to slide 15. DuPont had a solid third quarter. Key elements of our business strategy continue to deliver results despite the rapidly changing economic environment. We performed well in targeted growth markets such as production, agriculture, photovoltaics and emerging markets and overall performance benefited from cost productivity work and new product acceleration. But we have to do more. Recognizing the new reality I described last quarter, we are dynamically redirecting resources and production plans to respond to changing demands. Our efforts are supported by a strong balance sheet and cash position. The current financial crisis has not impacted DuPont's liquidity or cost of funding. I commend Jeff and his team, particularly our Treasury Group led by Susan Stalnecker for their diligent work to closely monitor financial markets and maintain strict discipline about how our cash is managed at DuPont. From that foundation, our leadership team is focused on ensuring that we stabilize and strengthen those factors within our control in these rapidly changing times. Let me highlight four points. First, key elements of our business strategies are working and we will continue to drive them hard. Those include positioning in growth markets such as agriculture, electronics and energy conservation. In addition, we are even more diligent on our cost productivity. We are accelerating the delivery of our $1.7 billion goal. Second, our focus on the customer. In addition to serving customers needs with valued products and services, we are working with customers to understand their liquidity and their ability to continue operation in today's financial environment. We approach each situation individually to understand and anticipate issues before they hit us in the face. Third, we remain a-market driven science company. Our R&D pipelines are the fuel for our success. We continue to make the investments…

Okay. Thanks Chad. So Curtis, we're ready to open our lines for Q&A. Question And Answer

Thanks ma'am. [Operator Instructions]. Our first question comes from Don Carson with Merrill Lynch. Your line is now open.

Thank you. Couple questions for of you Jim Borel on Ag. Jim very strong Ag performance driven by Brazil, I know in a verity of products we've seen a lot of pre-buying ahead of the currency decline there. Just wondering to what extend you think you might have pulled sales from Q4 into Q3? And also I know there is credit issues down there, if you can comment on that. And then not that were, partway though the harvest in the U.S. are you seeing evidence that... with your new germplasm that you're closing the yield gap with your competitor, which would obviously be the key to next year's corn seed share in the U.S.?

Thanks Don. Sure, let me talk about Brazil first. There was some earlier than expected sales on both that you see in the chemistry side. I'd say... it's hard to quantify... but I'd say maybe in the range of 50 million of revenue that was above of what we expected. Despite that, we had a great quarter. Even if you took that out and the soy hedge out, we grew top line and bottom line in all the businesses. So great quarter on all fronts. In terms of credit, we are not seeing any issues evident in the market right now. But I've been in this industry for 30 years and talking about Brazil, over those years, I have seen just about anything you can imagine happen down there. So we are keeping a very close eye. We've got a very professional team that helps us with our credit exposure. Collections in Brazil are actually a little ahead of schedule so far this year. So so far so good and we're just keeping a close eye on it. You also asked about yield. The harvest is about three weeks behind normal. And so there is some very early stuff going on, but it's a little... everything we've seen looks on track, but it's just a little early to say we will back to you in a few weeks as normal with what the results are after we have it.

And then just to clarify Brazil. So you would expect Brazil to be up significantly year-over-year in the fourth quarter despite the pre-buying and currency issues down there?

We're still expecting strong sales in Brazil for the year.

Okay.

And our next question comes from Frank Mitsch with BB&T Capital Markets. Your line is now open. Frank Mitsch - BB&T Capital Markets: Thank you, good morning. If I remember history correctly, I think Katrina hurt you by a dime in the third quarter of '05, and that happened late August. Ike was in the middle of September, and the hurricane impact you're saying is $0.16 a share. Can you add some granularity to that number and talk about what capital costs are included or not included in that number? It seems rather large.

Well the business interruption for the third quarter was $0.02 a share and that's lost sales basically from three weeks on those product lines. The larger is a $0.16 a share one-time cost, which includes $227 million of one-time repair and replace. This is rewinding motors, reworking equipment that's been damaged by salt water. There was a tremendous four feet of water across the site for a week, takes it toll. In addition to that, we will be spending capital expenditures of about $120 million between the third and fourth quarter on items that need to be replaced as opposed to repair. So I don't have the Katrina numbers with me. The Katrina repaired numbers were quite large, about $0.10 may have been just part of it, so. But we can get the details on that and give you an exact comparison. Frank Mitsch - BB&T Capital Markets: The $0.16 a share does include $120 million of CapEx?

No, it does not. That is just the repair and replace.

And our next question comes from Robert Koort with Goldman Sachs. Your line is now open.

Thank you, good morning. A question for Jim. I know you guys were targeting something like 0.5 million acres of biotech sales down in Brazil this year. I was wondering how you came in relative to that. I think Karen said you were sold out. And then two, strategically, how do you think about selling your competitors' technology when hopefully yours get approved over the next year down there in terms of seeding a market with somebody else's technology and asking your customers to switch? Thanks.

Thanks Bob. Yes, we have sold out the technology down there. It's just been a very good launch and we met our targets and in fact are ahead of plan. So we are feeling good about that. Yes, whether it's competitor technology or ours, the point is we are trying to first deliver what the customer needs. And we can do that with the products we have now and over time. If we can do that even better and have them be proprietary trade, that's clearly the intention. But focus first is delivering real value to the farmer.

Our next question comes from Kevin McCarthy with Banc of America. Your line is now open.

Yes, good morning. Given the tougher macroeconomic environment, do you see potential for incremental cost savings or productivity initiatives relative to what you might have been planning say six months ago? And if so, can you quantify and elaborate on those or is it perhaps too early?

Kevin, thanks for the question. We are really intensely focused on our cost structure and particularly fixed costs and really combing every... through every unit in the company to make sure that we've got our costs in line with the current economic reality. So we are working very, very hard to intensify our efforts there. I would say it's too early to size all of that, but we will meet our $400 million cost productivity target this year.

Kevin, this is Chad. Just to add, what Ellen and I were doing I was referring to in my remarks is we've got to get our costs in line with market reality everywhere in the world. And that's what I was trying to imply my comments that we are well and away [ph] to do that.

Chad, given your strong balance sheet and the volatility recently in the equity markets, do you see any potential for change in your M&A activity over the next one year say?

Well, we've been extremely disciplined in our activity, and I think that looks pretty smart right now compared to what the prices were... what the prices are now. Bulking up for bulking up's sake has never been our objective. We want to have strategic additions. I think the acquisition that Ellen announced earlier this week in the Safety Protection area, the little consulting company we bought is a great example of what we're trying to do: bringing things that make sense that are clearly on our radar screen. They'll be more affordable now. As that affordability comes in the face, we'll do the right thing for the shareholders.

Thanks very much.

Our next question comes from Mark Connelly with Credit Suisse. Your line is now open.

Thank you. Just a broad question. As you think about the pricing power that you've seen and the typical ability of more specialized products to hold pricing power, but energy coming down, what are you assuming in your forecast about your ability to hold price? What I am trying to get to is is it the most specialized part of your portfolio that's getting priced or is it the stuff that's sort of in the middle and quasi-commodity?

Thank you very much for that question. First, I'd like to point it out, we have achieved exactly what we set out to do: to more than recover our raw material and energy costs. And as I mentioned, we now have a year to-date spread of $0.07. We are by far the... if you look across our largest products in the portfolio, the majority we do is value and used pricing. And we're going to continue to do that, and that's from our product innovation, application development that drives that. A very small percentage is passed through. Of course, those prices will go up and down with the pass through economics. And then we've got a portion that is a little less differentiated, primarily in some of our Performance Materials segments. Those costs have been primarily driven by ingredients as well as some value in used pricing. Those tend to be a little sticky on the way up and a little stickier on the way down. And that's what I anticipate looking forward.

Okay, that's helpful. Thank you.

Our next question comes from P.J. Juvekar. Your line is now open.

Yes, thank you. Good morning. One more question for Jim. Jim, your y-series soybeans, can you talk about how you're positioning them in terms of pricing? And are you positioning them to compete with the second generation soybean offering by the competitor?

Thanks P.J. First of all, kind of following on with what Jeff just said, with price per value y-series soybeans are really exciting in terms of what they're going to deliver in terms of value to farmers. We are seeing... we already have a yield advantage over the competition and the y-series extends that. So we'll expect to price them for value and we'll deliver a lot of value to farmers. And we're competing with what's already on the market and I am pretty confident we'll be very competitive with whatever else they can throw out there.

Okay. And quickly, one quick question for Jeff. I was just a little confused about the cash flow comment from operations. I think you also mentioned that cash flow from Ag was strong. So it was... for the first nine months, it's lower year by a billion dollars compared to last year. Can you just walk us through the pieces of that, how much is working capital and all that?

Yes, thanks P.J. I'll be glad to. So you're correct, we're about down a $1 billion if you look year-over-year. I didn't mean to confuse on the Ag comment if I did. Our cash flow is going to be stronger as we go to the fourth quarter. My point was is we will collect the receivables in Ag. And so we're anticipating with strong collections as we always have, and of course we've redoubled our efforts there as well as tight inventory management, we're going to hit about $4 billion of cash flow from operations for the year.

Our next question comes from Jeff Zekauskas with JPMorgan. Your line is now open.

Hi, good morning. If I remember correctly that pension benefit this year was about $0.14 per share, do you have any idea what it might be for next year, what the pension change might be?

Yes, thanks Jeff. You are correct in your statement for this year. We do... we will not remeasure until December 31st. I really can't estimate that now you know how volatile these markets are and so we'll let you know after all the facts are in and we see how that turns out. I do want to assure everyone that right now, we do not foresee a scenario requiring a cash payment and a cash contribution in 2009.

And then secondly, a question for Ellen. I realized that you're early in the planning process for next year, but do you see 2009 as the year of expansion or retrenchment? That is, you are spending heavily for CapEx this year, maybe it'll be close to a couple of billion dollars. And your R&D is now going up at a rapid rate. Do you see a rough continuation of those trends next year or do you see a departure because of economic conditions?

As we look at our '09 planning our process, we are looking very detailed at individual businesses, what their market conditions are, what their competitive positions are, benchmarking against what we need to be there and understanding. That's going to be a very individual plan for business. There are strong... some strong markets out there, and certainly we are well positioned from a science standpoint to take advantage of it; we will. And there are areas where we will need to be very cost focused, very productivity focused in order to be able to do the right thing and create that plan. So I don't think there is one broad answer to that. In the mid-December timeframe, we'll be bringing out the plan, and I think you'll be able to see that then.

So in the aggregate, is it business as usual or are you going to retrench?

Well I don't... I couldn't imagine a term today 'business as usual'. Business is not as usual today, I mean with the volatility in the markets and what we're seeing. But we have a very different set of portfolio today and we're going to do... take actions very commensurate with the opportunities or the issues that we see.

Okay. Thank you very much.

Our next question comes from David Begleiter with Deutsche Bank. Your line is now open.

Thank you. Ellen, I believe when you look at North American or in the [ph] housing, it was about $0.20 earnings hit... or headwind in '07. What's the current update for that impact in '08 and perhaps even '09 given what's happening heading into the end of the year?

David, this is Jeff. Let me take that question. Just to kind of frame it for you, if you look at U.S. housing and construction, we believe that was down about 15% in the third quarter, probably approaching 20% in the fourth quarter. If I had to size it for you, earlier this year, we said $0.20. It's probably $0.25 or a little bit greater right now as we kind of look out for the balance of the year.

And I assume it negative as well in '09?

We're going to comeback to you in December and kind of give you a holistic view of '09. I don't want to comment one-off on any individual market view for next year.

And Jeff, just on FX, I believe it was about a $0.29 tailwind in the first nine months of the year, what will what should be based on current exchange rates in Q4, as the key current exchange rates flat, what were will head wind be in 2009?

Well, let me just comment on the fourth quarter, currencies are moving around pretty dramatically but clearly that's going to be headwind dated in the fourth quarter. If I had to size it, probably around $0.05 or so. But clearly, with all the volatility that's a very difficult forecast and we'll just have see how that plays out. Again for 2009, with all the volatility, we will come back in mid December and we'll give you a holistic view of our best view of what 2009 looks like that.

And just lastly, given the large cash balance, any thoughts on share buybacks once credit markets stabilize?

Well I think again, our record speaks for itself. We have, as I think I have commented before, about over the last four or five years, returned greater than two thirds of our cash to shareholders and so I am not going to comment specifically about buybacks. But I think our record speaks for itself, David

Thank you.

Our next question comes from Chris Shaw with UBS. Your line is now open.

Hi, good morning guys. Just quickly following up on David's last question, did you buy any shares back during the quarter?

No, we did not.

Okay. And so you haven't bought any back for the full year, right?

No, we have not.

And sort of also following then up on Mark's question from earlier on pricing. Pricing was pretty significant in the quarter. I think it was 9% higher. So obviously driving a lot of growth. What... sort of trying to drill down a little bit more, what percentage of that do you think is maintainable, that's not associated with sort of more pass throughs or more commodity like products.

Again, the vast majority of our products in businesses are value in used pricing. So supported by strong pricing discipline. So I think we've got in place what we need to and the vast majority the pass through is very small and the other that I've described is relatively a small portion as well. Vast majority in value in used pricing.

Curtis, I think we have time for one more question.

And it appears our final question comes from Mark Gulley with Soleil Securities. Your line is now open.

Good morning, two questions. One, Jim, this is for you. Switching to North America now, we get the impression with the acceleration [ph] tailwind gone, farmers are more prone to kind of sit on their hands in terms pre-buying for all their Ag inputs for next year. Are you seeing that in your two key businesses, seeds and traits and crop protection chemicals? I have a follow-up question.

In terms of probably based on the seeds and so far for North America, things are on track. Farmers are still in the middle of harvest, so there is still not as much. You can make a lot of decisions for a few more weeks. But we're picking up that there's going to be a significant delay. I think it will depend once they get the harvest done, then they will start focusing on making decisions for next year.

My second question, Chad, this is for you, if I may. Obviously, you lived through the '01 recession. Looking at the slide deck, you guys do provide the volume declines in '01 down about 7%. I know you're going to talk about this in six weeks, but still does this recession that's facing us now feel us bad, worse than or better than the '01 recession in terms of the volume declines that DuPont should expect to see?

Mark, the reason I through in prepared comments and described the company going into the last recession and the company going into this discussion is we are a very, very different company. And I think that's the most important thing you can take away from where we are today and with our used leverage we have and the competitive condition we have to outperform in whatever this economic environment is. And we are just not... don't have any unique insight into what this next recession is going to look like except it sure looks like it's coming.

Okay, thanks Chad, and clearly, we're at the end of our time. But I would like to turn the floor over to Ellen so she can provide some final comments.

Great. Thanks Karen. There are three points I want to close with. First, DuPont's economic health and growth potential are both excellent. We have a robust growth profile in production, agriculture and photovoltaics, large growing positions in emerging markets from many DuPont products, a highly profitable and growing safety and protection franchise, an R&D pipeline that remains strong and productive and a continued, reliable farm income for 2009. We are laser focused on cost control while continuing to invest for growth. Second, with the latest sell off in the market, we're paying our shareholders a dividend yield of 4.5%. We're proud of our 416 quarters of uninterrupted dividends. It's important to us and I'm sure to you also. We have a strong balance sheet, cash position, cash flow from operations and an enviable credit rating. And finally, you've got my commitment that we intend to work through the short-term challenges of slower macroeconomic growth and raise the long-term fundamental growth rate of DuPont. Our direction is unchanged. I'm working intensely with our business teams and look forward to sharing with you by mid-December our 2009 expectations and outlook. Thanks for your time and your continued interest in DuPont.

Okay, Curtis. Thank you everybody on the call and that completes our call this morning.

This concludes today's DuPont third quarter earnings conference call. You may now disconnect your lines at anytime and have a wonderful day. .