Welcome to the DuPont Fourth Quarter 2015 Conference Call. My name is John, and I'll be your operator for today's call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session. Please note that the conference is being recorded. Now I’ll turn the call over to Greg Friedman, Vice President of Investor Relations. Greg, you may begin.

Thank you, John. Good morning everyone and welcome. Thank you for joining us to cover DuPont's fourth quarter and full year 2014 performance. Joining me are Ellen Kullman, Chair and CEO; and Nick Fanandakis, Executive Vice President and CFO. The slides for today's presentation and corresponding segment commentary can be found on our Web site along with our news release. During the course of this conference call, we will make reference to forward-looking statements, and I direct you to Slide 1 for our disclaimers. 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 our 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 review the reconciliations to GAAP statements provided with our earnings news release in today's slides posted on our Web site. For today's agenda, Ellen will speak briefly about our accomplishments of the last year and our growth strategy going forward. Nick will review our fourth quarter and full year 2014 financial performance as well as our 2015 outlook. I will provide business segment insights, and Ellen will speak again with concluding remarks followed by your questions. As you know Trian Fund Management has invested in DuPont stock and proposed a plan to break up the company, a spin upon a spin. Our Board of Directors and Management are anonymous in their belief that the plan we’re pursuing will continue to deliver superior value for all DuPont shareholders. On January 8th, Trian announced that it has nominated four individuals for elections for the Company’s Board of Directors at our 2015 Annual Meeting of Shareholders. As we said at the time of that announcement, the Corporate Governance Committee of the DuPont Board will review Trian’s candidates and present its recommended fleet of director nominees in the company’s definitive proxy statement. In the meantime, we remain focused on continuing to execute our transformative strategic plan which has already delivered and continued to drive superior value for shareholders. We look forward to ongoing discussion and engagement with our shareholders and as always appreciate their views and perspective. Please note that the subject of today’s call is the Company’s fourth quarter earnings. We will not be taking questions on the topic of Trian’s plan or fleet. With that introduction, I direct you to Slide number 2 and it’s now my pleasure to turn the call over to Ellen.

Thank you, Greg and good morning everyone. DuPont made important progress on our strategic plan in 2014 and we’re looking ahead with excitement to a year of continued transformation that will enhance our prospects for the future. Our fourth quarter results reflect our continued focus on execution with volume and margin improvements in almost every segments and operating EPS increasing 20% year-over-year despite market and macro challenges. We achieved several significant milestones in 2014. These include the ongoing refinement of our portfolio with 10 strategic portfolio actions during the year and our Form 10 filing in December reflecting steady progress towards the mid-year spinoff of Chemours. We initiated a redesigned program last July and already exceeded our second half cost reduction targets, and we continued to act on our commitment to return capital to shareholders through $2 billion of share repurchases and increasing the common stock dividends 4% in July for a total of 3.7 billion returned to shareholders in 2014 alone. In 2015 DuPont will continue its transformation as a dynamic science company driven by innovation, executions and global reach. Our focus on creating shareholder value and leveraging advanced science and technology, market and value chain knowledge, global scale and disciplined management has delivered 266% total shareholder return and $14 billion of cumulative capital returned to shareholders since our leadership change in 2009. We’re executing on key initiatives that will continue to deliver shareholder value going forward. Before Nick and Greg take you through the details of our results, I want to highlight two key elements that underscore our commitment to increasing shareholder value. Over the course of this year, you will continue to see a major contribution from our operational redesign. I have more to say about this important program, but I’m also pleased to note that we’ve…

Thank you, Ellen. Let's start with the details of the fourth quarter on Slide 3. We delivered $0.71 operating earnings per share versus $0.59 in the prior year. The 20% increase in the fourth quarter reflects gains from strategic portfolio actions, continued productivity and cost reductions related to the Company’s operational redesign initiative, lower performance based compensation expense and share repurchases. The improvement is a direct result of disciplined execution in innovation despite macroeconomic and market headwinds including a weaker ag economy, stronger dollar and a difficult market pricing environment. Consolidated net sales were $7.4 billion; volume growth of 3% was more than offset by a 4% impact form portfolio and a 3% negative currency impact. The Company continued to execute on its strategy to enhance the value creation of the portfolio finalizing five divestitures in the fourth quarter and 10 portfolio actions for the full year. While these product line divestitures reduced our revenue by 2% in 2014, they remain the right strategic choices to unlock shareholder value over the long-term, enabling our future growth by allowing us to focus on higher growth opportunities, margin improvements and less cyclicality. From a currency perspective, the dollar continued to strengthen against most currencies particularly the euro, Brazilian real and the Japanese yen. Currency for the quarter was a $0.07 hit impacting segment results. For the full year, we had a $0.26 per share currency headwind comprised of $0.11 impacting segment results and an after tax exchange loss of $0.15. Volume growth of 3% across most segments was led by agriculture and performance materials which grew volumes 5% and 4% respectively. The agriculture volume increased reflects higher crop protection volumes in the timing of seed shipments. Performance Materials volume growth was driven by demand in the automotive sector in North America and…

I’d now like to provide some brief segment insights focused on our full year 2014 results and the first quarter and full year segment outlook. As a reminder, the slides with complete segment commentary are posted on the Investor Center Web site under Events & Presentation along with other materials for today’s call. Starting with Slide 11, in agriculture full year operating earnings decreased 5% as higher crop protection volumes, higher local seed prices and lower costs including seed input were more than offset by lower corn seed volume, a negative impact of currency and portfolio impacts. During the year, we took disciplined actions to streamline our cost structure, further focus our investment on the highest growth opportunities and better position ourselves for the current economic environment. As we look to the near future, we expect the economic environment in the agriculture sector to remain challenged. Farmer net income has declined and growers in Brazil’s Safrinha season and in North America are likely to reduce corn pricings again in 2015 putting pressure on volumes in the first half of year. Our seed order book reflects the shift in acres. In addition, lower insect pressure in Brazil and continued elevated distributor inventories in the Americas will present headwinds in 2015 in crop protection markets. Farmers are increasing demand in our newest corn seed genetics, our AcreMax integrated refuge corn products and our new T Series soybean variety. However, with profits coming down, farmers are sharpening their pencils when it comes to input purchases. Coupled with strong industry seed supplies, 2015 continues to be a very dynamic and competitive season. We anticipate currencies will remain volatile and headwinds to be substantial in markets like Europe, Brazil and Canada where we have seen strong growth in our market position in recent years. For…

Thanks Greg. Overall we made strong progress on our strategic plans in 2014; our decisive actions across the company enabled us to deliver volume, margin and earnings growth in the majority of our segments even in an environment of significant market and macroeconomic headwinds. As we look ahead we're focused on strategic choices that will position DuPont for higher growth and higher value. While we are very focused on cost reductions our transformation goes far beyond that. As you know over the past six years our actions have been guided by a clear plan to dramatically refine the portfolio to focus investments in areas of significant opportunity and secular growth, fueled our innovation platform in good times and bad to deliver substantial revenues from the new product synergies over the prior four years, instituted our focus on efficiency, cost discipline and accountability as a way of life. Expanded our global penetration and demonstrated our commitments to shareholders by returning approximately $14 billion to shareholders. We consider that over a three year period we will soon have divested of our two largest legacy businesses representing over $11 billion in total sales, you will begin to understand the magnitude of change we're driving. As we step before the spinoff of Chemours is a major inflection point on this path. In preparation for that event last July we launched a sweeping operational redesign with the advice of a leading consulting firm. Through our work we've created a blueprint for the new DuPont and we're making sure that we start out with foundation that aligns a highly effective innovation driven operating and business model with a significantly reduced cost structure. Our partners have helped us conduct a top down and bottom up analysis. We’re upgrading and modernizing everything from our management reporting structures to…

Thanks, Ellen. We’ll now open the lines for questions. Also joining us for Q&A is Jim Borel, Executive Vice President. As a reminder, the purpose of today’s call is to discuss our operating earnings. We ask that you keep your questions focused on our results and outlook.

Thank you. We will now begin the question-and-answer session. All lines have been placed on mute to prevent any background noise. [Operator Instructions] And our first question is from David Begleiter from Deutsche Bank.

Ellen, can you comment on the pace of 4 billion buybacks, why it was 18 months wanted something little bit quicker?

So, a couple of things I should mention David, I mean first I qualify the $4 billion as I mentioned on the call the value of the midnight dividend will obviously be depended upon once we get in front of the credit rating agencies with the Chemours business outlook at the time. And in order to maintain that BB rating, we’re determined what level of debt we’re really going to be able to put on there. Right now we’re estimating that to be $4 billion. Now there are some IRS rules that come into play here around the length of time one would have to return that value to the shareholders and has to be done in this 18 month period in order to maintain the tax free status of it. And so we’re projecting somewhere in that 12 to 18 month period is when we would look to return substantially all of that estimated $4 billion to the shareholders.

Yes, David and as we get closer to knowing exactly what the number is and looking at going forward we’ll be more definitive on the timing of that what would occur in ‘15 and what would occur in ‘16.

And Ellen just on the corporate expenses we’ve seen nice decline in the last couple of years to $700 million in 2014. Where do you expect corporate expense to be in 2015?

So obviously they are going to be lower and obviously with fresh start and we’ve sized that for you, that fresh start hits not only corporate expense it hits the segment expenses and even product costs as we’re doing some things around like warehouses and things like that. So, we continue to drive that very efficiently and we’ve been very proud of the work that we did in the last quarter to identify another $300 million in savings and be able to achieve that savings by the end of ‘17.

Our next question is from Frank Mitsch from Wells Fargo.

We’re about six weeks since the Form 10 came out on Chemours, and I know Nick that you had said in the past that would set the base case in terms of a spinout or if there were other avenues of sale or what have you that might be considered, can you talk about the interest that you’ve seen there or how that has been trending and what’s your best guess in terms of does this go spinout or not?

Well you characterized it right Frank that we said that we’re going to have Form 10 out there to essentially build the box if you will of what would be the base case and how we would proceed. And I’ve always said that we’re going at pace to execute against that spin separation. We do remain open to explore opportunities, I am not going to get into specifics in that regard, but we would remain open to explore opportunity. But I’ve also said many times that I find it very difficult to imagine something that’s going to take me of the spin path, I think the value that would have to be there in the way of the upside versus the speed and risk that one would take from going off of this spin path that we’re on, we have to be significant enough but I just find it hard to imagine that, that’s going to be possible Frank.

And if I could follow-up on fresh start, obviously a nice bump in the program here and a nice acceleration in terms of when you realize that I think you said $0.30 to $0.35 would be realized here in 2015 which at that $1 billion run rate suggests $0.50 or so to be realized in 2016 and incremental $0.50 that’s realized in 2016, is there anything that might be deflating that in terms of stranded cost or something like that, that might be an offset to that $0.50 positive from fresh start in 2016?

It's not going to be stranded cost Frank, but obviously as you go into 2016 there will be inflation that that’s going to occur on some of the cost items. There is also growth efforts that we continue to expand upon and drive. So there is going to be some increases in the cost element that this is going to be going against that sort of an increase. But it's not going to be something like stranded cost that's going to be there that's going to cause any kind of reduction against our projections. Our number as you said is we believe we will realize about $0.35 in 2015, and at the end of ‘15 we will be at a run rate of about $1 billion. Now that run rate of $1 billion includes the run rate of $1 billion, includes the amount of cost that would be going over to P Chem part of the separation. The $0.35 does not, that's just $0.35 of value created within DuPont itself without the money going over to P Chem.

Our next question is from Jeff Zekauskas from JP Morgan.

I was looking at the fund flow statement and your change in operating assets and liabilities was the use of $1.3 billion and the previous year was $1.4 billion. What’s behind that change? And ht your receivables and inventories don't really change that much but there is something that's using up cash and do you have a forecast of 2015 for that number?

Yes, Jeff. So you have a knack for going to a very specific place and Nick has just now told me he has figured it out, so Nick.

Jeff I think the biggest thing there is the absence of the tax payment for the coating sale. We had about $700 million of tax payment that shows as part of that free cash flow but the inflow of cash is below the free cash flow line in the investments area. So that's the biggest reason for the delta on a year-over-year basis.

And I guess secondly the currency hit of $0.60 seems a lot, I was wondering what it translates to in terms of a change in sales? I mean my guess was that if your consolidated sales decreased 5% from currency but that would be $0.30 not $0.60 are there currency positions that are jeopardized? Is that what makes the number so large or is the sales impact bigger?

Yes. So if you look at it we only have 37% of our revenue last year within the United States. So we have a very large revenue base outside. If you look at the total impact on the revenue lines for 2015, we’re looking now at about 3.5% and then when you translate that down our position and in all of our businesses it does come out $0.60 a share. So it is large, it's obviously why we wanted to get it out there and we’ve seen this coming to the fourth quarter because you saw the currency start to move there but January has been tremendously volatile.

The other thing I would add to what Ellen said and fully in line with what she just told you Jeff. But the other piece I would add is, think about the timing of all this, those exchange rates may change throughout the year but we're most heavily exposed especially against the euro in that first half of the year with the ag business. So our mix and timing of that mix and when those sales are going to take place is going to have a significant impact on our company.

Our next question is from Bob Koort from Goldman Sachs.

I was wondering if you could give me a little more color on the comps that I think you sized it at 175 in the quarter? And it seems you have made your guidance that you had rejiggered mid-year, so is it just a function of you need to wait to the end of the year to true up that expense line? And what were the specific metrics that were failed or ones that resulted in that big comp hit?

We set aggressive performance targets at the beginning of the year for each one of our businesses and for the company. And our results did not meet the aggressive targets that we set this time last year and therefore the performance based compensation is hit accordingly and we threw it up at the end of the year from that standpoint. So I mean it is paper performance the performance based culture we’re driving this company, and I think that's reflective of it.

And my follow-up on Solamet you mentioned that it’s maybe becoming somewhat commoditized, you have intensified competition; you are going through new product developments. Can you talk about what those new products offer that might get your customers to switch from a deflating product towards something that might cost them more but add some value?

Yes, so obviously with increased competition and in that segment, I mean we've upped our game on the innovation side coming through 2014. There is innovation left in that market space and we have the line on new products that we're testing now in small quantities with our customers that we will be commercializing in 2015. So we still think there is attractive space and we think that innovation still matters. I don't consider it commoditized, I just think that the competition is intensified in terms of creating new performance products and so people have caught up with us and we're going to focus our efforts on pulling ahead again in 2015.

Our next question is from PJ Juvekar from Citigroup.

PJ you’re on mute.

I can go to the next question, if you wish.

Yes, that’s great, thank you.

And our next question is from Don Carson from Susquehanna Financial.

A question on your domestic agricultural business. Can you just size the impact for the full year on the shift from corn to soya in the U.S.? And as you move forward in somewhere around Grade 2seed, will you be expensing more of Monsanto royalties? Is that going to be a drag on earnings as well?

Yes, Jim why don’t you take that one?

Yes so as we look at ‘15 clearly we’re expecting corn acres that the soybean corn price still favors soybean, so we’re expecting corn acres to be down, but it’s very difficult to size and those final decisions are being made by growers closer and closer to the season. So it’s hard to size the shift, but we do expect the decline in corn acres and a slight increase in soybeans. Regarding the royalties, the royalties will be higher as we continue to increase the penetration around a few into the lineup, so that’ll be expensed as those things increase into the portfolio. For example in ‘15 we’d expect around the Grade 2 sales to be about double what they were in ‘14.

But Jim overall so you’re saying a shift from corn to soy is negative for you, you just don’t have the exact amount?

Yes at this point, the shift to come from corn to soy is negative for us. We are going to make good money on both of them, but corn is a bit more profitable last few years.

And that’s a part of our guidance that we’ve put out for you today, Don.

And our next question is from Vincent Andrews from Morgan Stanley.

Just on the Performance Chemicals business and maybe specific to Ti02. I just was trying to reconcile how we get, in 4Q look volume was up price was down both sequentially and year-over-year, and then you’re talking about 1Q profits being down 35% I see there’s a lot of currency in there. But how do we ultimately get the year to be flat with that as the backdrop?

Yes so the first quarter is specifically problematic because of sequential price versus year-over-year price specifically in Ti02. So sequentially if price in the first quarter is about flat, it is down by high single-digits from last year. And that along with flat volume because the first quarter really there isn’t a lot of volume improvements typically kind of results in that kind of earnings profile and you expected the volumes improve throughout the year as specifically also in Chemicals & Fluoroproducts as their volumes -- the season and refrigerants in the second quarter and things like that you’d start to see that improvement come throughout the year, so the first quarter is specifically problematic for Performance Chemicals.

And then if I could just ask a question around PV, I mean I know solar and oil have very different purposes, but are you seeing or hearing anything that that suggests the sort of runaway for solar is going to change in the lower oil price environment?

We haven’t heard that yet and I think first of all solar is still pretty small, so having growth rates of 20% still can occur. They’re also being put in the places where it is from a grid parity standpoint in places like China where they are just a -- and they have come out to say that by 2030 they’re going to be capping CO2 emissions and some of that start to come from an increase in their renewable energy sources, and solar is a big part of that as they’re the largest producer of solar modules. So we don’t see that, a short-term blip in oil is taking the PV industry office long-term kind of projection.

So we’ll take one more question.

From John Roberts from UBS. Please go ahead.

Nick each year you give tax guidance in October and then in the final two months of the year you seem to discover a lot of new tax info. This seasonality the ag business caused that or is it perhaps your integrated tax and currency hedging that causes these big swings in the last two months of the year in your tax outlook?

The last couple of years, a big part of that has been driven by the enactments around the legislation for the expenders package that were held out and then all of a sudden we saw brought back in certainly that happened this year held out until very late in the year and then ramped it for 2014. And as you know in ‘15 it’s not in place. So I cannot use in my base tax rate the assumption that that is going to occur. I’ve got to keep that out and run my books if it’s not there and then if it gets enacted by year-end then I have to adjust for the full year at that point in time. So that’s a big part of it. And then the other piece is it is difficult to get exactly the mix right of all the places over 90 different countries that we’re operating in, exactly what the tax in those jurisdiction is going to be based on the actual sales that are going to accrue this. So the geographic mix does play a part in that, and you have to through that up as year-end, so we go through that final through up at year-end on that piece. So those are the main drivers.

And as a follow-up, has the higher pension liability effect the 2015 earnings at all or is that all incorporated into the fourth quarter adjustment?

The higher pension liability will be part of the non-op pension costs. So you’ll see impacted, they won’t be part of the operating earnings fee. And really what we’re talking about here is on the funding the unfunded portion that really took that step up of close to $4 billion, $3.7 billion. It's funny it doesn’t take much in the way of discount rate change to have a significant impact. Our rate assumptions for the calculations change by 80 basis points and we saw $2.8 billion impact of that alone. So small movements, as we saw last year when it helped us small movements can have a big impact on that unfunded position.

Well I’d like to thank everyone for joining the call. If you have any follow-up questions please do reach out to the Investor Relations team. Thank you.

Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.