Good morning. My name is John, and I'll be your operator for today's call. At this time, I would like to welcome everyone to the DuPont 2010 Second Quarter Investor Call. [Operator Instructions] It is now my pleasure to turn the floor over to your host, Karen Fletcher, Vice President of Investor Relations. Madame, you may begin your conference.

Thank you, John. Good morning, and welcome. With me this morning are Ellen Kullman, Chair and CEO; and Nick Fanandakis, CFO. The slides for today's call can be found on our website at dupont.com, along with the news release that was issued earlier this morning. If you look at Slide 1, during the 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 refer to the reconciliations to GAAP statements provided with our earnings news release and on our website. And finally, we've posted supplemental information on our website that we hope is helpful to your understanding of our company's performance. Before I turn the call over to Ellen, I'd like to remind everyone that our 2010 Investor Day will be held on December 9. When the date gets closer, we'll share details on location and timing. In the meantime, please mark your calendars, and we hope to see many of you then. Ellen?

Great. Thanks, Karen, and good morning, everyone. I'm pleased with our outstanding second quarter results, with each reporting segment and all regions turning in double-digit top line growth. Our leaders continue to be focused on execution and are delivering high-quality growth and improving the profitability of their businesses. Market-driven product innovation, coupled with strong pricing discipline contributed to impressive top line growth. Ongoing fixed and variable cost productivity and benefits from restructuring actions delivered operating leverage and strong online results. Slide 2 recaps DuPont's 2010 directives. These focus areas are well understood across the company, with business-specific commitments that roll up in support of the metrics you see in this chart. My leadership team engages with the business leaders on a regular basis to review progress and make adjustments to ensure we deliver on our commitments. Now I'd like to take a few minutes talk about some of our key markets. I'll start with Electronics, where sales and earnings results from our Electronics & Communication business surpassed pre-recession peaks. We've often spoken about the strong growth in photovoltaics, and this quarter was no different, with sales in the PV markets growing more than 150%. Sales to markets outside of PV were up more than 25%, with the recovery broad-based across markets including cell phones, PCs and displays. Another indicator of strong markets is that global semiconductor consumption now exceeds pre-recession levels. Automotive markets were also strong with global light vehicle builds up about 26% in the quarter. Businesses such as Coatings and Performance Polymers delivered healthy growth, along with margin expansion from productivity and restructuring initiatives. As expected, our Ag & Nutrition business had an outstanding quarter, thus concluding a very successful selling season for the northern hemisphere. The multi-year investment in our 'right product, right acre' seeds strategy focuses…

Thank you, Ellen, and good morning, everyone. I'm delighted to report that DuPont delivered very strong results for our second quarter. As the global economy continued to recover, we grow volume and price up in all regions of the world. This quarter's results build on the strong foundation we laid during the first quarter in what we expect to be a pivotal year for the DuPont Co. as we replaced pharmaceutical royalties with profitable growth from all other business units. By any measure, the second quarter was outstanding performance. Now I'd like to review the details of the quarter, pointing out our accomplishments versus goals, starting with Slide 3, which is a summary of earnings per share and sales results. Second quarter reported earnings per share were $1.26, which includes a $0.09 benefit relating to prior-year tax settlements. Excluding significant items from both periods, earnings per share were $1.17, a greater than 90% increase from the $0.61 earnings per share in the prior year. Consolidated net sales of $8.6 billion were up 26% compared to the prior year, comprised of 21% volume gains, 5% local price, 1% favorable currency impact and a 1% reduction from portfolio changes. Volume was up in all business segments and in all regions of the world. Local currency pricings were also up in all regions, reflecting our continued pricing discipline. Now let's turn to our segments reviews starting with Ag & Nutrition on Slide 4. Second quarter sales grew 16% to $3 billion, and earnings grew 31% to $762 million. First-half performance sheds light on the successful northern hemisphere planting season. Year to date, Ag & Nutrition segment grew sales 11%, earnings, 19% and pretax margins expanded while continuing key growth investments in this area. Our strong performance was a direct result of differentiated business…

Great. Thank you, Nick. To recap, second quarter performance reflects a mix of fundamental business growth as well as recovery from the global recession with each region recovering at a different pace. China and Latin America are back above pre-recession levels, Europe is lagging and other markets such as the U.S. are partly back to pre-recession peaks. We made prudent choices over the past 18 months in terms of cost and capital productivity, plus very selective and targeted growth investments, all of which position the company to deliver cash in the contraction and growth and the expansion. Just as we did in 2009, our businesses are staying close to our customers. As an example, given the uncertainties in Europe and a significant decline in euro, we responded by shifting resources to markets and opportunities that offered the most promising, sustainable growth. We adjusted sourcing plans and controlled cost and capital spend, and you should continue to expect this type of agile response from DuPont to ongoing changes and market conditions. Turning to China, we expect sales growth to continue along in steady improvement trend line. When looking at year-over-year growth rates, second half growth rate will moderate, not a surprise, given the much tougher comps for the second half compared to the comps we had in the first half. To size it for you, DuPont sales in greater China are up about 70% year-to-date. For the second half, we expect sales growth of a healthy 15% over prior year. What you're seeing is growth returning to a more sustainable pace. We expect full year sales in greater China to include Taiwan to be about $3 billion, a 40% increase over 2009. And for reference, our 2009 sales were up about 6% over 2008. We're not complacent about the global recovery.…

Great. Thanks, Ellen. John, let's open the lines up for questions.

[Operator Instructions] Our first question comes from Jeff Zekauskas from JPMorgan. Jeffrey Zekauskas - JP Morgan Chase & Co: When you assess your overall performance and why your earnings this year will come in much higher than your earlier expectations, is it more the global economies were stronger than you thought or your pricing was better? Can you just assess the difference between your performance and your earlier expectations?

Jeff, I think that the recovery has been stronger, especially in segments like Electronics and Photovoltaics than we had anticipated as we entered the year. Certainly, our innovation that we did not relent on in 2009 has really helped us from a penetration strategy, whether it's Rynaxypyr or Potassium/Sorghum [ph] in Ag or whether it's in Tedlar and other markets. And I think that's really helped us from a standpoint of continuing the volume momentum in this year. The strong recovery helped those volume and price perform the way you see it today. So we're very -- continue to be focused on innovation as a way to continue on momentum. Jeffrey Zekauskas - JP Morgan Chase & Co: And then just a follow-up, when you look at your volume growth through the second quarter, did you see any diminution in various areas on a global basis? And DuPont is in so very many markets, is your impression that the global economy is slowing down or speeding up or growing at a similar pace from the second to the third quarter?

When you look at sequentially, when you integrated all together, there are puts and takes, but we still stand by the statement I've been making about overall sequential slow improvement. You'll see things like in Electronics, which had a tremendous second quarter. PV you'll probably be 50% in the third quarter, not what you saw in the second quarter. Certainly, automotive, as you look on it will -- it had a huge quarter in the second quarter. It will be about smaller than that going forward. From a volume standpoint in all regions, we had very good momentum. And so it's across the board, and we see it in each of our regions. Third quarter and fourth quarter will look different, but just because of where the third and fourth quarter were in 2009 with the improving environment we have then. And so that's where I think you have to integrate a lot of things to really understand how we're going to progress.

Our next question is from Mark Gulley from Soleil Securities.

Terrific quarter, but there wasn't a whole lot of commentary on the housing outlook, and it appears as if that's one of the things that's holding back, getting back to pre-recession levels in your Safety & Protection area. Ellen, can you talk about the housing market please?

Yes, I mean, certainly, we get a lot of information on the housing markets and from both sides of it. Negative one day positive, the other there's still a lot of uncertainty there. We see it in our forecast and what we're experiencing is improving from the standpoint of our product penetration especially in our mix of business. Housing starts, as you all saw, are down, but new housing sales are up. We have actively modified our mix to include more innovation on the commercial side where we had no business before. So we're still seeing improvement even with the market uncertainty because of new products and innovation in areas where we did not participate previously. So we still have our focus on this business, understanding really the lowest of lows right now.

It looks to me as if you're about a year ahead of schedule on the runway for earnings growth that you outlined back in November. When might we see an update on those goals? Do we have to wait till December, or perhaps will you up those goals sometime sooner?

Yes, no, I think December is about as good as it's going to get on that one. I got a lot of work to do to put together because we're talking about a three-year outlook, just not the rest of this year. And so I think that's going to be a time when we can take the time to get together with all of you and really get into detail on each segment and lay that out for you. So our current plan is to share that with you in December.

And our next question comes from P.J. Juvekar from Citigroup.

A question on Ag. How many millions of acres of AcreMax 1 and AcreMax RW do you think you'll have for sale in 2011?

I spent most of last week out in Des Moines. I was out in the fields with farmers. We're really pleased with the progress we're making. Things look very good. We'll share what we think about '11 later this year as we get the results of these field trials that were out there now. But what I saw last week was very positive, P.J.

Your competitors announced a new pricing strategy, and I was just wondering when you talk to your customers, what was the response? And does that have any impact on your decisions for 2011?

Well, I mean, it's a competitive world out there, so obviously what each competitor decides to do has an impact. I was out on a couple of farms last week talking to our customers. This ‘right product, right acre’ strategy, bringing more than just price in a bag to bear is really having an impact for us, and we continue to focus on valuing this pricing. We do it in agriculture as well as we do it in all of our segments, and so we are continuing on our focus strategy there. We bring more than just an individual seed or product, and so we're still focused that our outlook there for this segment continues to be what we have anticipated and talked about over the last few years. So we see us continuing our focus in that area.

Our next question comes from Laurence Alexander from Jefferies. Laurence Alexander - Jefferies & Company, Inc.: Just wanted to inquire, as you move through the quarter and into Q3, can you talk, characterize the order patterns that you're seeing in your early cycle end markets particularly the predominance of rush orders or any extension on lead times and visibility?

Laurence, this is Nick. Why don't I try to start there, and then Ellen can add to that if she choose. What we're seeing on lead orders is similar patterns to what we've seen for the earlier part of the year. We're seeing the, like I said, the sequential steady improvement quarter-over-quarter. Now there could be some destocking occurring in some of the businesses, and we're comparing against tougher comps in the second half of this year, second half of last year. But we're seeing that steady sequential improvement in pretty much all of our businesses.

Yes, and I think if you take that up a level, there's still moments of people on rush orders and things like that, because I think there is uncertainty out there. People, our customers in some sectors, it's very steady order pattern than others. It's a little more variable. But as we integrate that altogether, we're seeing it improved versus what we saw in the first quarter from that standpoint. Laurence Alexander - Jefferies & Company, Inc.: And secondly, just a question on priorities in the Seed business, if your competitors create a situation where you're forced to choose between maintaining market share and maintaining the pace of price increases that you've had over the last few years in terms of higher yields and then pass that through to higher price, how do you prioritize that? How would you face that -- look at that trade-off?

Yes, I think it's going to come down to yield, and we're in it for the long haul. So as we take a look at what's coming out of the fields this year and we understand the performance of our products competitively, we will set the strategy based on what the farmer will see and the value it will provide them. And so that's a question that I think we're going to be talking about more as we end this year as opposed to right now, because we really need to see what comes out of the field. So I think our channel access and that direct to market 'right product, right acre' gives us a lot of confidence in our value when you strategy on pricing. And I think we'll continue to share with you what we see on that coming through the year.

And our next question comes from Frank Mitsch from BB&T Capital Markets. Frank Mitsch - BB&T Capital Markets: Ellen, the discussion regarding the outlook, talked about some uncertainties in Europe, although you did have 20% volume growth. And I know that you said that you think the second half of the year growth will be slower, but that's really "just because it's a tougher comp". Would you say the same thing about Europe? What are you seeing fundamentally for the back half in Europe?

Europe has shown tremendous results through the first half, a lot of that is euro driven and the strength of what we have seen coming out of the automotive industry and we continue in Europe to expect slow sequential recovery. Auto builds were strong, as I said, in the second quarter, up 7% year-over-year. That'll moderate in the second half. There's been tightening of credit in Southern Europe and that has an impact on construction and refinish and agriculture. But at the same time, PV is very strong in Europe, and we expect the continuation of the incentive shows us that, that will continue through the second half of the year. So it's a mixed bag and when we integrate it together, we expect there to be slow sequential improvement. Now the change we saw in the second quarter with Eastern Europe showed up. In the first quarter, Eastern Europe was very slow to recover. We've seen more recovery in Eastern Europe in the second quarter, and I think that's going to help as well. Frank Mitsch - BB&T Capital Markets: And you mentioned Photovoltaic sales up 150%. You articulated a strategy of getting that over $1 billion in 2011 and $2 billion in 2014. Where are you now on an annual sales rate, run rate basis for Photovoltaic?

I think we're better than where we thought we were, Nick?

We're well on our way to achieving the goals that you just mentioned.

So stay tuned.

Our next question comes from Edward Yang from Oppenheimer. Edward Yang - Oppenheimer & Co. Inc.: Ellen, Performance Materials and Performance Chemicals really stood out, most notably on pricing. Were you surprised by the momentum in these two segments, and you're already above your 2012 margin targets for those segments?

So I think that we saw with where raw materials are today and where the marketplace is today and new products that we have introduced in the marketplace that, that really came together to provide a tremendous second quarter results [Audio Gap] and things in those sectors. I think we're going to see higher raws putting pressure on margin. In the Chemical side, tremendous performance by our Titanium Dioxide business, tremendous performance by our Fluorochemicals business. They're right in their season, and so I think that both have performed tremendously well. I think they will continue on their quest towards our 2012 goals, and we continue to make improvements in those businesses coming off of the restructuring and the things that we've done, create a lot of operating leverage for them coming through this part of the year. Edward Yang - Oppenheimer & Co. Inc.: When I look at those two businesses, I tended to view them as a bit more basic versus the more differentiated parts of your portfolio. Are we still in a period where commodity chemicals have some relative pricing power over specialty chemicals?

We don't have many commodity chemicals left. There are certain segments of it that like TiO2, where there's still tremendous volume improvement going on, where there's still opportunities there. So I view our portfolio, yes, it's more basic than the rest of our portfolio, but it's more specialized than what you look out as being basic chemicals out there. So we're kind of in that in between space there, and so we're taking a little better position than many.

Our next question comes from Paul Mann from Morgan Stanley.

Could you break out the price mix and currency benefits you saw between Seeds and Agrochemicals, please?

Nick?

Yes, when you look at the Ag business in aggregate and you look at the 16% increase in revenue that we had, 12% of that was volume. And on a U.S. dollar basis, you had about 4% being price.

And can you break that up between Seeds and Agrochemicals, or is that not possible?

On Seed, you had about 14% increase with about 8% being volume and 6% being U.S. dollar price for the first half of the year.

Our next question comes from Bob Koort from Goldman Sachs.

Ellen, are there any ramifications for you if Europe goes ahead and removes the moratorium on GMO approvals? And then can you talk a little bit about what your margins in the Seed business are there versus North America where you got more trade intensity?

So obviously, any changes in GMO and the regulations there around the world do impact us, but we do have a very strong germplasm and very strong varieties and position in Europe. And if it change, we could move that to our genetically modified product line as well. So I think we have the relationships we have. We're about twice as big as our closest competitor, I think, from a volume standpoint in Europe on the Seed side. And so I think we could use that to our advantage and any transition from having that go-to-market well established and integrated. Your second question, I'm sorry?

I know you have a big business in Europe. I'm curious how the margins would compare there to the U.S. where you have trades as well as germplasm?

From that standpoint, the way we look at it and how we do that is they're very comparable.

Our next question comes from Kevin McCarthy from Bank of America.

Given the strength in your earnings and cash flow, it looks like net debt is down to 1.1x trailing EBITDA. So in that context, would you update us on uses of free cash flow going forward and perhaps comment on future M&A or lack thereof?

Nick?

So let me take that. We've said that for the year, we're going to have free cash flow of greater than $1.7 billion and we're certainly on track to achieving that target. Our work-around working capital productivity continues. We set about $1 billion over the three-year period, and $400 million is going to be realized this year and we're well on track to achieving that. So tremendous success around controlling working capital levels even in this growing environment. As to uses of that free cash flow, our policy is pretty straightforward in this regard. We take any excess cash, and we look to return that to our shareholders unless there's a compelling investment opportunity for growth within the company. Your specific question around M&A, we're always looking at M&A opportunities. But as we've said in the past, they're in very specific areas. They're in areas that support the direction we're going around the mega trends in the world. So they're in areas like Safety & Protection, they're in our Ag & Nutrition, they're in certain areas of the Electronics segment. Those specific areas is where we'd be looking for strategic potential acquisitions, and they would need to be strategic. We're not looking to just bulk up on an acquisition. It's something we'd be looking to do in an area that would provide value and advantages from a technology or a channel market access sort of opportunity.

Would you comment on the level of euro currency and macro growth that's embedded in your revised earnings guidance range, please?

Sure. So when you look at the currency through the first half of the year, it's been a tailwind for us and about $0.13 a share tailwind. As we go into the second half of the year, our expectation is that this will turn into a headwind for us. The range could vary if you're looking at a euro at the current levels of about $1.29. It will be about an $0.08 headwind in the second half, so we'll still have a benefit for the year about $0.05 a share. If it goes down to end in $1.24 range on the exchange, it's a little bit more of a headwind. You're looking at about a $0.12 headwind, so you'd be about flat on a total year basis. And all of those numbers that I just quoted are in our outlook ranges that we have provided you in the updates.

Our next question comes from John Roberts from Buckingham Research.

You had a bullish biofuels meeting back in the spring. I was wondering if you might update us when you thought you might have your first commercial world-scale plant. And do you have any thoughts on whether the EPA will raise the blend limit in the next few months that might help you with that?

So with our biofuels opportunity, there's two elements to that. There's the one element around our cellulosic ethanol being produced. And as you're well aware, we have the facility in Vonore, Tennessee, right now that you actually visited. And that will be commercial in the 2012 time period, a large facility. When you look at the other leg of the stool, the butanol opportunity, that's about one year later in the commercialization plans.

No thoughts on the EPA's upcoming decision on blend level?

Well, I think if the blend level changes were to occur, you'd have to see the additional changes occur on, for example, the butanol levels. So if you change on the ethanol blend wall, you would have a corresponding increase, I believe, on the butanol side of the house.

We have David Begleiter online with Deutsche Bank.

Ellen, in Pioneer, do you have a breakdown between doubles and triples this year? And in terms of U.S. corn seed market share, is there a limit to how high you can go given the competitor pressures that exist?

I guess we're looking right now about triples of about 37-plus-percent, doubles about 36% for the year. As far as share goes, this is a long term. We're in it for the long haul. There's a lot to play out in terms of product performance on the entire market space, and so I think what it's going to come down to is that relative competitive value for the farmer in terms of the entire package. So you can get into those debates in that, but I think for the most part, we're really focused on right product, right strategy, continuing to advance our product line. And I think that we've had a very, very -- we've got good momentum going for us right now.

Ellen, within the company, are you capacity-constrained in any particular businesses or products?

We continue to use DuPont Production System as a way to increase incrementally capacity across our lines. There are certainly areas where we're tight, tighter than others. Things like TiO2 or in some of the PV products, we continue to work -- work 150% increase, it's going to impact your capacity. And so we continue to work towards those incremental rebounds that we get with DuPont Production System. And as you know, in several cases like in PV Tedlar, we're in the midst of a major expansion. So we continue to work through that and use the power of DuPont Production System to deliver not only productivity, but to deliver the incremental capacity expansions to help us continue to supply our markets.

This concludes the Q&A portion of this conference call. I will now turn it back over to Ms. Kullman for closing remarks.

Great. Thank you, John, and thank you all for joining us on this call this morning. I know a lot of you are very interested in our outlook, and so given our diverse portfolio, given the markets in various stages of recovery in our mid-cycle businesses starting to pick up, our large geographic footprint and our ongoing productivity, we see tremendous opportunity going forward. The second quarter was all about execution and delivering on our commitments, and you should expect the same from us next quarter and the quarter after that. And as I said earlier, we'll continue to earn your respect and confidence. So thank you very much, and we look forward to talking to you soon.

This concludes today's DuPont 2010 Second Quarter Investor Call. You may now disconnect your lines at this time, and have a wonderful day.