Welcome to the DuPont First Quarter 2016 Conference Call. My name is John and I will 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 this conference is being recorded. I'm going to now 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 first quarter 2016 performance. Joining me today are Ed Breen, Chair and CEO, Nick Fanandakis, Executive Vice President and CFO and Jim Collins, Executive Vice President responsible for our Agriculture segment. The slides for today’s presentation and corresponding segment commentary can be found on our website along with our news release. During the course of this conference call, we will make forward-looking statements and I direct you to slide one 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 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. We request that you review the reconciliations to GAAP statements provided with our earnings news release and today’s slides, which are posted on our website. Our agenda today, we’ll start with Ed providing his perspective on this morning’s then Nick will review our first quarter financial performance and 2016 guidance. Third, Jim will discuss our agriculture business. We will then take your questions. With that introduction, it’s now my pleasure to turn the call over to Ed.

Thank you, Greg and good morning everyone. I would like to share my perspective on the first quarter, then I’ll update you on our progress with our three critical initiatives as well as our plan merger equals with Dow. Overall, I was pleased with how the business performed in the first quarter. Despite continued challenges in the macroeconomic environment, we delivered operating earnings of $1.26 per share even with last year’s quarter. Excluding $0.10 per share of negative currency, operating earnings rose 8%. Sales decline 2%, excluding currency reflecting the current environment. The weakening U.S. dollar gave us some relief. I don’t want to steal any thunder from Jim, but it’s worth saying a couple of things about Ag’s first quarter. Much of the quarter’s strength was due to Ag. Solid execution in Ag, our largest segment enabled a strong start to the North American corn season. I’m also very pleased with our results in this Safrinha season as we delivered strong volume growth. Nick and Jim will comment more on all that in a moment. Looking beyond Ag, as I mentioned most of our other segments performed well. One we’re calling out is Nutrition & Health, where we had broad based volume growth and significant operating margin expansion. Let me give you a couple of examples of new products are contributed to our growth N&H. First, [Supero] (Ph) our new best-in-class protein isolated soy protein for dry-powdered beverages and second, our new long life Greek yogurts in China. Probiotics increased sales 30% as our productivity efforts have freed up capacity to respond to strong customer demand. I was pleased to see operating margins expand in four of our six segments including progress with our global cost savings and restructuring plan. In some, most of our businesses exceeded our expectations…

Thank you Ed. Let’s start with the details of the first quarter on Slide 3. Operating earnings of a $1.26 per share were even with prior year and up 8% year-over-year when adjusted for currency. Solid execution in a tough macro environment particularly on cost savings and a strong start to the North American corn season in Ag positively impacted the quarter. Excluding currency, consolidated net sales for the quarter declines 2%. Local pricing gains in Ag and industrial bioscience and volume growth in Nutrition & Health were more than offset by declines in most of the remaining segments. Currency continued to negatively impact sales by an additional four percentage points in the quarter. I would like to highlight where we’ve seen some positives from a regional perspective particularly in our developing markets, which represented above 30% of our first quarter sales. In the quarter, sales in developing markets were up 5% year-over-year excluding currency. The volume growth was primarily driven by Agriculture and Nutrition & Health in Europe and Asia Pacific principally China. Local pricing gains in Latin America and Europe were a result of mix enrichments and actions to offset currency primarily within Agriculture. Turning to Slide 4, consistent with prior quarters currency was a significant headwind to segment results. Segment results when you exclude currency were up $0.02 per share in the quarter on cost savings, local price and product mix gains in agriculture and industrial biosciences and volume growth in Nutrition & Health. Lower corporate expenses and interest contributed $0.05 to earnings in the quarter. Corporate expenses on an operating earnings basis were 44% lower than the prior year as a result of our 2016 cost savings program. A lower share count benefitted the quarter by $0.05. In 2015, we completed a $2 billion accelerated share…

Thanks Nick. Overall, agricultural markets are playing out pretty much as we expected with famers facing challenging economic conditions and seed and crop protection suppliers having plenty of inventory globally. So we’re not seeing anything significantly different in market conditions from what we shared with you earlier this year, but even in this difficult environment, we remain focused in our executing on the variables that are within our control and I think our first quarter performance clearly illustrates that. I'm focused on three very clear priorities. First, delivering on our 2016 cost savings and operating earnings commitments and our results for the quarter indicate we’re firmly on-track to do that. Secondly, I’ve been personally spending significant time reviewing our R&D programs with our research team to ensure we’re delivering on our exciting pipeline of new genetics, biotech traits and crop protection products on schedule. Lastly, from our announced merger with Dow, our teams are working with great urgency to create a world leading production Ag business and we’re developing detailed plans to capture the $1.3 million of cost synergies. Even though, this is challenging work, you can feel the excitement of the teams. In addition to these three priorities, I also spend my time minimizing distractions, ensuring our teams keep their focus on delivering results or our stakeholders during this exciting time of change. As I mentioned, our results in the first quarter demonstrated strong execution in challenging market conditions. Results were better than we expected primarily due to higher corn area in North America. Earlier timing of shipments to customer is consistent with the strong start we had in the fourth quarter of 2015 and stronger sunflower sales in Europe based on the performance of our newest products. Currency, while still a significant headwind compared to last year was…

Thanks Jim. We will now open the lines for the questions. John if you could please provide the instructions.

We will now begin the question-and-answer session [Operator Instructions] Our first question comes from David Begleiter of Deutsche Bank.

Thank you, good morning. There has been some talk about aggressive seed prices discounting in the U.S. this season. Could you address those concerns and how you are addressing that issues?

Yes, great, thanks for that questions. We know those comments are out there. As we said back in January, we just weren’t seeing much change in the conditions in the marketplace from where we launched, back in August or September. So we've had our pricing cards out there for a number of months. So when I look at pricing, I think of it in that area I think of it in three specific ways. First is card price and that’s that the year-over-year same technology, same market card pricing and as we said back in January, our card pricing in generally flat year-over-year. The second impact in our numbers then would be due to mix and we’re seeing strong demand in our order book for our newest technology. About 50% of our line-up in North America is from genetics that we’ve put in the market in the last two years. So as growers have a chance to look at that two consecutive years in our yield trials they really jumped on that. So we’re seeing a nice lift in overall mix. And then last would be in the discounting area and so these discounts come in a number of different area whether its early or early buy discounts or cash discounts and overall I would say we’re seeing maybe a slightly elevated level of discounts, but nothing really out of the ordinary that you might expect. Folks took a good advantage of some of programs that we had out there. I would also remind you that our direct sales model in North America gives us great visibility of our products and our pricing, especially at that net price levels. So we see almost on a real-time basis purchases and what is going there. So I think overall what this speaks to is a strong focus by our organization and a execution intensity in really driving the plan that we put out there back in August and September.

Very good. Ed and Nick Just on performance materials. Can you look at the business ex-ethylene of underlying business due this quarter?

Yes, when you look at the performance materials business, ethylene obviously did have a impact because spot prices were so much lower David as you know on a year-over-year basis like 50% down. But if you would have take that out the automotive segment was up slightly in Asia, almost a point, Europe up 1.7, North America was kind of flattish auto bills, but we did see a fairly good demand outside of the ethylene impact that you saw within that segment.

Thank you very much.

Our next question is from Jeff Zekauskas from JP Morgan.

Hi good morning. Ed it sounded like you are optimistic about the working capital for the year and agriculture is coming in pretty much the way you thought it was. So do you have a working capital target, how much you think things will be better year-over-year either inclusive of the titanium dioxide separation or without it?

We just introduced our working capital program in the first quarter, so we just got those launch, we were studying in detail in the fourth quarter what we thought the opportunity was. And over the medium term, I think we said last time, the opportunity looks like it’s a good $1 billion dollars to a $1.3 billion somewhere in that range, what I call more best-in-class performance. So we have a big opportunity there, mostly it’s the biggest piece in inventory, so we’re very, very focused there. And you know we are going to have some headwind this year, as I mentioned in my prepared remarks, because of severance cost and all that. So again that’s for the benefit of the company going forward, but if this won’t happen just this year, we clearly will have traction this year. I think if you saw in the first quarter, we had slight improvement already in working capital and generated additional $300 million of free cash flow over this year over last year also because CapEx the way was lower by 14% year-over-year. So, we’re starting to get really good focus Nick and I had operating reviews with every business over the last week and working capital was a big part of the conversation with the teams. So I feel that confident will build momentum as the year goes.

The CapEx for the year is supposed to be $1.1 billion, but you spent 360 in the first quarter. So you are annualizing at 1.4. Why was the CapEx so high in the first quarter? What did you spend on? And then do you really expect it to sharply drop in the second?

Okay. Now if you look back at last year, our first quarter is always our high quarter the way we account for. Even having said that with us at the higher, this number, this quarter, we’re still were 14% below last year. So we’re trending properly, we said we will be down 21% for the year on CapEx. So when you look at our second quarter, there is a major drop off in CapEx spending in the plan. We’re more front-end loaded, because the maintenance work that happens end of year, beginning a year and it’s just the seasonality of it. So we will definitely nail the $1.1 million.

Okay, great. Thank you so much.

Thank you.

Our next question is from Don Carson from Susquehanna Financial.

Thank you. Follow-up for Jim on Ag. Jim, crop protection was down 18% sales year-over-year in Q1. How do you expect that to unfold over the year and as you look at the year as a whole are you expecting corn seed share to be up in North America, or are you just being up in line with the increased market acreage?

Well let’s talk about the crop protection first. You are right, you did see some pretty significant declines in volume in the first quarter that was mostly tied to the insecticide business and a bulk of that in Brazil and we’re still chasing two consecutive years of low pest pressure there. We’re feeling the impact of insect protected varieties of soybeans that are in that market. And overall, I would say channel inventories there are still pretty elevated based on the two-years. Our insecticide business as well and crop protection we’re feeling the impact of the LaPorte shutdown that we had. Most of that is related to Vydate. We’ve essentially replaced all of the methanol that we have been selling in previous years now through third-parties, but it’s just been really tough to find good quality sources of [oxymill] (Ph). So you are seeing some of that year-over-year. As we get into the second half of the year, we continue to drive the launches of Cyazypyr around the world. If I separate Brazil, Rynaxypyr sales growth has grown volumes every year since its launch and we expect to see good in roads. And I would say our crop protection business in North America started off pretty strong here this year, looking at the on-the-ground sales versus our out-the-door business, we feel really good about our penetration there. It’s still early in the season to talk about full-year, we still have a lot to go and when I think about corn share now again, a little early to call share. Agree with you, no doubt we’re seeing volume increases in North America consistent with that USDA report on the 94 essentially million acres. We’re seeing volume growth based on our new technology and our teams are going to stay really focused. But like I said, it’s way too early to talk about seed share. As of today, we’re about 30% planted in North America. That is elevated. Normally we would be about 16% for this time of the year and again you saw some of that volume increase flow through in our first quarter, but we will see how things shake out around share for the full-year.

Jim, just to clarify, so you think crop protection will still be down for the year at double-digits, so are you gaining more and Ag operating income is coming from seed side?

A little early to size the crop protection overall full-year, but I would expect it to be down year-over-year, again primarily we’re still working to replace the optimal volumes and we’re still struggling in that Brazil around insecticide.

Okay. Thank you.

Our next question is from Jonas Oxgaard from Bernstein.

Hi guys congrats. Nicely done.

Thank you.

A question, your R&D seems to be down about 10%-ish. Wondered if you had some color on what are you targeting and how is that paying out?

Yes Jonas. It is down about the 10% that was part of our whole program in our cost reduction plans. And I mean look just to tell you high level, we reviewed every major projects then and the R&D management teams made those decisions as we went, but we also kept in mind with the impending merger coming down the road. We really looked at programs, we also saw we were going to be double counting, double working on things like that to get there. Interesting, and I’ve made this point before, our R&D and ramped up the last 2.5-years.I would say fairly significantly in such a short period of time. The reductions we’ve made which were mostly done within R&D really put us about the run rate, this company has historically run at on R&D, which I’m very comfortable with kind of like 10-year average run rate on a percentage of sales basis is about rate where we’ve always been. So that’s kind of where we’re ending up.

Very good. any particular programs you discontinued or its just across the board?

It was programs in each of the businesses that we were concerned with the payback on and that’s really how we looked at it on returns and looked at each business, all major programs and that’s how we got there.

Okay good. Thank you.

Thank you Jon.

Next questions is from Frank Mitsch from Wells Fargo Securities.

Good morning gentlemen. Given the nice results Nick I’m guessing that takes the sting out of the Brady ruling for you.

That’s only a rumor Frank.

As I think about the commentary regarding the tough market environment and the global IP slowing. Taking a look at your volumes down materially in Q3, down just 1% in Q4 and here down 2%. It’s looking like you have a little easier comps in Q2 and certainly Q3 is stepping up in front of us. So how should we be thinking about DuPont’s ability to maintain volumes or perhaps even grow volumes, but or is it just two [tough] (Ph) of an environment out there and how would you answer that question?

Well look a bunch of angles, it depends by business, some of the businesses looks like growth is going to be very nice in the year and some product introductions in the second half of the year. Let me just start by overall saying to you, we’re still counting on the year being relatively flat from volume price or an organic standpoint as we move forward. So if we had a minus two in the first quarter, just some slight improvement kind of in the second half of the year and then it really depends by business as you look at what it whether it’s going to be, Nutrition & Health obviously good, we’re seeing really broad based growth there. And by the way the probiotics area is really hot like 30% growth and we’re actually getting more product out the door, more efficiency in our facility. So that’s a good sign, it should continue not just this year, but into the future and then on the IB side we’re still counting on growth for the year in that business. And we have launches in a bunch of other businesses like Leptra and other products. So we’re feeling good as we look at the pipeline that you know will actually pick up a little bit more here and be running more flat on a revenue line basis. And I'm not planning or looking at anything pass that. I want the company to plan around that, I don’t think its overly conservative, but if we plan around it we’ll make some smart decision as we see upside later in the year more than better.

Okay. So the view point is it’s not overly conservative, but it will - you have lot of things moving up and I guess a little bit down. Hey Ed in describing the Dow transaction and the shareholder vote coming in Q3, which I think may have been a little bit later than what I had originally thought. So certainly closing before the end of the year, does this give you an up - I’m curious what would be the lag between when the shareholder vote takes place and when you actually close the transaction. And are you looking to complete the $2 billion share buyback within that window or is that just something that can be executed until December 31 regardless of DowDuPont or just DuPont alone.

I’ll take the first one and let Nick handle share repurchase part. Just to clarify the dates, we’re looking at shareholder vote at the end of second quarter somewhere in that timeframe. It looks like the timeline along with S-4 filings and all that where we just made our comments back. So that looks like it’s around that timeframe and then I need to put an exact date on it, but I would say we’re shooting for October, November kind of close of the transaction. So both the second quarter shareholder votes are both Dow and DuPont’s shareholders October November close. We’re in great shape on all our filings in the key jurisdictions around the world you know the big ones, China, Europe, Brazil and obviously the U.S. all that’s in motion. So for the timeline where we needed to be to try to hit those dates, we’re in good shape.

And for the amount Frank, like Ed said, we’re going have the vote and then we’ll evaluate the opportunities to enter the market and our plans obviously is to make those repurchases. We are going to be limited by trading windows even after the vote from normal black-out periods relating to earnings. So the end state of when that merger takes place will influence the amount of time we have available to us to make those purchases. We can make the purchases as long as we are a DuPont company and once it forms DowDuPont well then obviously that would be a decision would have to made by the Board of that company.

Okay. Alright, thank you.

Thank you.

Our next question is from Vincent Andrews from Morgan Stanley.

Thanks and good morning everyone. Jim just wondering the 93 million or 94 million acres of corn in the U.S., I mean obviously it’s going to be helpful of volume metrically this year, but how do you sort of access the potential hangover from that if we have decent weather over the summer. Are you at all worried about having lower commodity prices in the fall and into next spring and given that’s already a pretty competitive operating environment, I guess I'm just curious what your thoughts are there.

Yes, I think it’s a really great question. There is no doubt that our order book and our volumes in the first quarter indicated stronger increases in corn areas in the U.S. and that’s consistent with that USDA report. Now our original guidance for the year assumed a slight increase. So I would agree with you, we’re feeling some of that lift. However, the weather is always a big element here and we’ve seen a wet period here in the Midwest. Last couple of days have been great, we’ve seen planting jump, I think we’re about 30% planted as of today and that would be consistent again with what we’re hearing that we’re probably slightly earlier this season than the historical average which would be more about 16%. Historically tough, planted acres doesn’t always equate to yield, we could still see some issues to summer especially during pollination where we know we can really take the top off of yield on any of those crops. So kind of like you, we’re in a wait and see mode, if the weather is perfect and we get 94 million acres, you are right we’ll continue to see commodity prices at that low end of - I would say what I’m calling the new normal range of that 320 to 420 kind of operating range. And that will continue to put stress on that farm income and keep farmers really focused on how do they get the most productivity off of everyone of their acres.

Okay. And then may be just a follow-up on Solamet. I heard that volume was up in the quarter but it seems like pricing is still weak from competitive perspective. If I remember back to 4Q, I think you said there were sort of a dual track of innovation coming this year where some came I think in the first quarter and more was coming later on. So how do you access your performance so far and what should the slope of the line be through the balance of the year?

Yes the Solamet, if you look at it year-over-year it’s still down very significantly from a shares standpoint. That compares as it a big part of the performance difference you see in electronics and communication over the year, but on a sequential basis, we did have market share proven, we thought we bottomed out in the fourth quarter and we did bottom out in the fourth quarter. We did have a product introduction at the end of the year and that’s what we’re picking up here on. We are expecting the next introduction by mid-year and we think that will put in the lead here from a technology standpoint than continue to gain share. So again, very off from a year-ago, but now picking up and starting to pick up share.

Thank you very much.

Next questions is from Steve Byrne from Bank of America.

Yes, thank you. Our corn belt channel checks has indicated that Pioneer has gained some traction this year, tying the financing on seed sales to crop protection, chemical sales. Can you comment on how much of a benefit that’s been for you given our channel checks indicate pricing is broadly down and yet you are reporting corn seed pricing to be modestly up?

Yes Steve, so you are right. We’re always looking for opportunities to collaborate between our Pioneer and our crop protection organizations. If you remember back from the Bank of America Ag Conference, I talked a little bit about that collaboration. This is about looking at our crop protection share with our key Pioneer customers and being able to offer a broad portfolio of solutions. So collaborating with them upfront to think about how do we connect the best technology we can to that acre opportunity for grower productivity. If you do look at North America, you are right our price is up in the market and as we said to you we’re attributing that to a couple of areas, mostly we think it’s on new technology. About half of our line-up in North America is brand new in the last two years and you will know that we do impact trialing and even on farm trialing for a couple of years ahead of time. So growers get the chance to take a good look at new genetics before they commit fully and so a big part of our lift in North America is that they went all in on a lot of that new technology this season.

And would you say that lift could be accelerated post the merger with Dow where your crop protection chemical platform would be broader at that point?

There is no doubt that we’re excited about a broader portfolio of offerings, we’ll be able to offer much more choices to growers out there in the marketplace. So it’s a little too early for us to begin to speculate on how we might execute against that but yes no doubt that there will be more choices out there.

Thank you.

Our next question is from P.J. Juvekar from Citigroup.

Hi good morning. In electronics you saw 9% volume drop and you talked a little bit about Solamet paste. How much of the decline was in solar versus how much of it was in consumer electronics? And then in consumer electronics what are the products where you are seeing these declines?

So if you look at the pieces in PV, P.J., there is an element of the photovoltaic that was very strong. Our Tedlar film volume grew in the Tedlar film side of the house. Now there is no doubt as Ed already mentioned that from the Solamet paste side on a year-over-year basis a significant change in volume on that product line. Consumer electronics was weaker, we did see weaker demand and we actually anticipate that to continue in quarter two and start to turn in the second half of the year. The exact breakdown of how much is electronics versus how much is PV, I don’t have that at my fingertips right now.

Okay. Thank you. And then generally at the free cash flow, if its back free cash flow defined as operating cash flow minus CapEx and it has declined materially in the last three-years compared to prior levels. So given that and given your significant new cost cutting, do you have any specific goals for free cash flow this year? Thank you.

Specific targets, is that what you said P.J.?

Yes. Specific targets for this year.

What we have is a very active plant in place now around working capital improvements, which is going to be a key element to generating additional cash flow from operations as we look at that and as you already heard, we have reductions in our CapEx. So all of those programs that are in place are going to be generating improvements around the free cash flow line. We haven’t quantified the total impact in the current year yet, we’ve talked about it more in the medium time period of the impact those programs are going to have.

One last question?

Our final question is from Sandy Klugman from Vertical Research Partners.

Thank you. Ed, do you still expect to be able to achieve a split into three businesses within 18-months to 24-months of the mergers close. And then you have made comments in the past that the corporate overhead the three separate entities would not be higher than that at the parent. I’m wondering if that’s still your expectation?

Yes, we’re definitely planning Sandy the 18-month to 24-months period. We’ve have a lot of teams going that are already doing some of the work to help us out on that timeline, as I think we mentioned before we’ve already started the financial carve out work, so we’ll get way ahead on that part of schedule. So yes, the timing in the 18-months to 24-months were very comfortable, then obviously we would all like to pull that in if we can, but that’s the timeline rolling now and we’ll keep working that as we go forward. Our plan is with the reductions we’ve done here, our plan would be and by the way I did this in my prior life, but we’re going to keep the overhead percent of sales down where we’re getting them to with the reductions of both companies are making as we speak. So to me a more of a world class percent, the corporate overhead is approaching 1% of sales and we’re as I think Nick mentioning, we’re down to 1.3% of sales with the actions we’ve taken. So we’re kind of getting in that zip code and that’s where we plan to be with each of the companies.

Okay great, thank you and then a follow-up on Ag, you mentioned losing out on some insecticide sales in Latin America, due to the presence of traded corn, outside of Latin America are you seeing the crop chemical category loseout theseed just giving how takeover margins are? Have you seen that dynamic anywhere outside?

Outside of Latin America, not that it would remarkable here, as I think about how the season is unfolding. We’re excited about the start to North America, we’re seeing as I mentioned good flow through to on-the-ground sales versus out-the-door and our business in Europe, especially in Eastern Europe had a strong start to the year. So a little early for Asia, little more seasonal effect on Asia as we get further into the year, but right now it’s all about Brazil.

Okay, thank you very much.

Thank you very much. This now concludes our call. Thank you for your interest in DuPont and thank you for joining us today.

Thank you ladies and gentlemen. You may all disconnect at this time.