Good day and welcome to DowDuPont’s First Quarter Earnings Call. At this time, I would like to turn the conference over to Lori Koch. Please go ahead, ma'am.

Good morning, everyone. Thank you for joining us for DowDuPont’s first quarter 2019 earnings conference call. We are making this call available to investors and media via webcast. We have prepared slides to supplement our comments during this conference call. These slides are posted on the Investor Relations section of DowDuPont’s website, and through the link to our webcast. Speaking on the call today are Ed Breen, Chief Executive Officer; Jim Collins and Marc Doyle, Chief Operating Officers for DowDuPont’s Agriculture and Specialty products divisions, and myself and Megan Britt, who will lead IR for DuPont and Corteva. In addition Jean Desmond and Greg Friedman, CFO-elect for DuPont and Corteva will join in the Q&A session. Please read our forward-looking statements disclaimer contained in the news release and slides. During our call, we will make forward-looking statements regarding our expectations or predictions about the future. Because these statements are based on current assumptions and factors that involve risks and uncertainty our actual performance and results may differ materially from our forward-looking statements. Our Form 10-K and DuPont's Form 10-K, as well as Corteva's Form 10 include detailed discussions of principal risks and uncertainties which may cause such differences. Also, we will comment on segment results on a divisional basis, so please take note of the divisional disclaimer in our earnings release and slides. Unless otherwise specified, all historical financial measures presented today exclude significant items. We will also refer to non-GAAP measures. A reconciliation to the most directly comparable GAAP financial measure and other associated disclosures are contained in our earnings release and on our website. Before I turn it over to Ed, I'd like to remind you that our comments will be primarily related to the future DuPont and Corteva companies. Dow will be holding their own call starting at 9:00 a.m. this morning. I will now turn the call over to Ed.

Thanks, Lori and good morning, everyone. Today we reported the final quarter results for DowDuPont. Our teams aggressively managed the levers within their control to deliver results in line with our revised expectations. They addressed challenges, including unprecedented bad weather, currency fluctuations and macro factors driving difficult conditions in select markets. This demonstrates the ability of each of our businesses to respond effectively to challenges due to their market alignment, rigorous cost control and emphasis on innovative products that enable disciplined pricing and margin expansion. Our teams also stayed focused on our longer term goals and accomplished several important milestones in the quarter. We completed the first phase of our commitment to create three transformative companies, each leaders in the markets they serve. As you know we spun the Dow business on April 1 and they're off to a great start. And we are in the final phases of the separation of DuPont and Corteva. We have finalized all the board seats for both Dow and DuPont and have one remaining spot to fill for Corteva. Their respective boards provide them with a strong and diverse set of members that will ensure a continued dedication to driving high returns. Over the next few weeks we intend to complete the final milestones leading up to the June 1 separation, including filing the final Form-10 for Corteva and holding a shareholder meeting to approve a reverse split of DowDuPont shares. Additionally, we completed the 3 billion share buyback program against [ph] total share buyback under DowDuPont to $7 billion. I am truly amazed when I think back on what has been accomplished and the value that stance to be created from these leading organizations. Each one has demonstrated a shareholder value mindset, I couldn't be more excited about the future of these…

Thanks, Ed. Turning to Slide 4. Heading into the quarter, we spoke about the weakness we were seeing in about 25% of our portfolio, primarily encompassing our auto and smartphone businesses. In general these markets performed as we expected. The rest of our portfolio in total was also aligned with expectations, with stronger results in our industrial businesses, within safety construction, offsetting weakness in North America energy markets, negatively impacting our Industrial Biosciences business. All-in, I'm pleased with how the businesses are navigating in this period of soft demand and inventory destocking in a few of our end markets with a commitment to staying focused on the levers within our control, specifically price, aggressive cost management, as well as plant productivity actions which are starting to show up in our results. Our emphasis on value-added innovation supported continued disciplined pricing actions. Together with our diverse portfolio this enabled us to meet our sales commitment for the quarter and exceed our expectations on earnings, driving a 3% increase in the quarter excluding currency. We continue to deliver on our synergy plans to enable sustained earnings growth and strong operating leverage. As anticipated, we did see raw material and freight cost headwinds in the quarter, primarily from escalation in 2018 which we were mostly able to offset with pricing gains. These actions enabled us to expand gross margins by 20 basis points and operating EBITDA margins by 90 basis points bringing our operating EBITDA margin to 30% for the quarter. Turning now to the segments on Slide 5. Let me begin with Electronics & Imaging. Organic sales declined 6% driven primarily by soft smartphone demand and destocking which impacted both Interconnect solutions and Semiconductor Technologies and by lower sales in photovoltaics. In total, smartphones comprise approximately 25% of E&I sales and while…

Thanks, Marc. Turning to Slide 8. Net sales decreased 11% as lower volume and unfavorable currency more than offset local price improvement. First quarter volumes was impacted by severe weather-related conditions and significant growing regions in the United States. March flooding in the Midwestern U.S and generally cool wet conditions in the region overall disrupted farming operations, delaying USC deliveries in the second quarter and preventing early-season crop protection applications. Daily USC deliveries for late March into April are illustrated in the chart in the bottom right-hand corner. As we reported in the April 18th announcement, less than 50% of the planned seed deliveries in the last five days of the quarter occurred, resulting in a greater than anticipated weather impact on the first quarter performance. Now this chart also shows that US corn seed deliveries are now back on track with the 2018 pace and remember our business model of direct delivery to farmers means we recognize most of our revenue when we deliver to the grower, not when shipped to a retailer or distributor like our competitors. Operating EBITDA decreased 25% for the quarter driven by the weather-related volume declines, higher input costs and currency headwinds which more than offset cost synergies. So turning to Slide 9. You can clearly see the effect of weather on the US Corn Belt. However, you can also see that we are driving growth elsewhere. Our teams in Europe Middle East and Africa delivered organic growth of 8% showing growth in both crop protection and seeds. Crop protection new products, such as Zorvec fungicides, Arylex herbicides are being well received by farmers in the region, coupled with strong growth in other insecticides such as the spinosyns and isoclast. Our seed business also drove strong corn volumes across the region. Latin America delivered…

Thank you, Jim. With that, let's move on to your questions. First I would like to remind you that our forward-looking statements apply to our prepared remarks and the following Q&A. Operator, please provide the Q&A instructions.

Thank you. [Operator Instructions] Our first question is from Vincent Andrews with Morgan Stanley.

Thank you. And good morning, everyone. Ed or Marc, could you clarify within DuPont what your expectations are in the second half in terms of a tariff resolution and how reliant your forecast is on the timing of that, as well as improvement in the Chinese economy spilling over into improvement in the EU economy? Just some fence post around what's in the back half number, so that we can follow along would be helpful.

Vincent, probably just a few points. So things that we've been watching, tariff obviously would be nice to resolve that which would play out very nicely over the next few years for us in China because I'm a big believer that consumer confidence will sit pretty bad by that issue. That was one of the issues. But we've been tracking the areas that we were weak in our portfolio was smartphones and auto builds mainly China related which is about 20% of the portfolio. And we've been tracking the inventory levels very closely through the OEMs in all China and we see a pretty drastic drop in inventory levels in China, almost back to normal levels, not quite yet, but almost there. So we've been going through this destocking phase and we’re seeing that normalized to where it should be. So I think that will play out still through the second quarter. We’ll still be kind of flat. We should as we're exiting the second quarter, I would think by what we're seeing from an inventory standpoint that will pick up. And by the way, I don’t look at all third parties and believe the data, but it looks like auto builds will grow in the second half globally with that and smartphones will grow a couple of percent. Also the interesting thing when you look at our European numbers, just to give you another data point, the weakness that we have in Europe is almost all related to the weakness in China So as China improves, I think our numbers specifically in Germany all because [ph] of orders and all that will also improve. So that's the data points we're looking at. If tariffs revolve I think consumer confidence builds. But you know, look the other things in China I think are importantly, the [indiscernible] some lending standards over the last few months. That looks like there might be a stimulus just related to auto that is coming along in the near future. And obviously there's been a lot of stimulus beside the lending standards spin. So I think a lot of things have happened, we’re going to start to see it in the second half of the year and we’ll get some recovery there. And by the way just to give your perspective 75% of our portfolio is just running along just like it has the last few years. All the industrial businesses performed well, you can see it in our SEC numbers. Nutrition and health performing exactly where we thought it would. So it's really this isolate issue to China and the green shoots look like they're now - their tariffs would certainly help that.

And Jim if I could ask you on African swine flu, maybe its too early for there to be material impact, but how do you see that playing out for Corteva over the coming quarters and next year?

Yes. Great, Vincent. We are watching that very, very closely. In addition to some of the trade issues you were asking that about clearly you know, the slower green [ph] and anything that affects demand for that green would put downward pressure on commodity prices. So anything that will cause this glut of soybeans to take may be more than one or two years to accelerate will kind of – will pull back on soy prices. For us, you know, we'll watch it. We'll see whether it will have an effect on corn prices. And longer term 2020 plus it could be a little bit positive for us as we see some acreage shift out of soy and move back towards corn. Yes, we're watching that. I think for the US corn producer, you're already seeing a response in hog prices as global demand for hog shipments, meat shipments is going up and that could help at farm level, lot of the groomers we deal with are integrated growers, they are producing corn and beans, they have either whole hog or cattle operations. And so anything that could help that farm income would be a positive for the US grower and we don't see much of an impact in China as lot of the feed for those animals is imported from either Latin America or the US.

Thanks so much.

Our next question comes from - with JPMorgan, Jeff Zekauskas.

Thanks very much. The specialty products company will be a new company in June and you've got four primary segments. So if you had acquisitions that were equally attractive, but you could only do one, you know, in which division would you do it? That is what's the essence of specialty products or which two divisions are the essence of it, and which ones are more peripheral?

Yeah. Hi, Jeff. It's Marc. I'll take that one and Ed can follow on. For us with respect to M&A, I mean, we’ve said that we want to be real and cautious with respect to ROIC and we’re looking for at most sort of bolt-on strategic acquisitions. So it's really about the strategic connection to the growth themes that are – that really kind of across our portfolio, you know, spaces like microbiome and probiotics, automotive, electrification, those types of heavy growth, sort of secular growth areas would be where we’d be looking for bolt-on capabilities. It's not so much one or the other of the reporting segment that we tend to follow on. But I'd say the bottom line is, we’re looking to be - making really good investment decisions with respect to our cash. And so it would have to be a - of really nice a deal in terms of strategic fit and financial returns for us to jump.

I mean, the only thing I would add to that and Marc, we're looking where is the secular growth trends as Marc said and we're looking at that more than we are, which business it would be – the only one, the higher growth area. But what I would add, with Marc and I and Jean and the team, they’re really looking at is when we do an acquisition, we really want the returns to work on the cost synergies, we would get on the deal even though we're strategically buying it for the growth of secular opportunity. And the growth part that would be our – truly upside to the modelling, we would do when we present it to our Board of Directors. So I'm a big believer, make the numbers work on cost synergy totally within our control and we get the upside by doing the right thing strategically one the growth side.

[Operator Instructions] We'll move to our next caller, David Begleiter with Deutsche Bank.

Thank you. Good morning. Ed of the non-core segment, what is the time line for realizing this – the value of these businesses and how would you expect to use the proceeds from any asset sales that might occur here?

So I’d say – look, I’ll make a couple of points on it. Number one, we’re not in any buy or sale mode here. We're going to take our time. We're going to do the right thing for our shareholders. These are good assets. I would say if I just gave you one word the way I feel about it, they are more volatile assets that I would want in our portfolio. So Marc and the team have really gone through that. That's not the only reason, by the way, but they are really volatile. But they are great businesses for someone to own. So we want to get the right price out of them. I hope we make a lot of progress over the next year, but I would give you on example, its not totally clean to just do it all right away and one of them would be the Hemlock JV, to give you an example because we have partners there. So we got to work our way through some interesting issues there. But we will move expeditiously, but get the price and make sure we take our thoughts and nothing has to happen overnight. But I would, what’s to key to it is, these businesses were going to actually have more focus on them because we put a very senior talented gentlemen John Kemp inn charge [ph] of them, with the right finance leaders and all, that really focused on driving up the returns of this businesses during this interim period. So I'm really happy we’ve got that focus in these businesses.

And I guess in terms of proceeds, I would say we would really be in line with our financial policy. So we've talked about that beware, we're going to fund the internal investment. We'll do bolt-on M&A where it makes sense and otherwise we're going to return cash to shareholders.

Yeah. We're not going to sit on cash for long periods of time if we have it.

Our next question comes from Steve Byrne with Bank of America.

Hi. thank you. Just what was a 2018 EBITDA of that $2 billion of sales is now in non-core and perhaps Marc you could comment on whether you're seeing any traction yet on the revenue side or market share side in your segments from having a much more diverse product portfolio now than you had as a legacy DuPont platform?

Yeah. Thanks, Steve. Just answer the question on the earnings. It was about 700 round about last year and the delta there's really the Hemlock equity earnings and the big settlement that we had last year in the Hemlock JV. And so that's where we get to about 500 this year. In terms of traction on the revenue side, we are continuing to drive the growth synergies that we talked about a couple of times now across the portfolio. And you know, I said it's a little early to quantify it. But you know, I do think it's making a material difference. You know, we ran into the downturn here in the automotive and electronics markets and I think we mitigated a lot of that because as I said earlier the rest of the portfolio has continued to perform well. And so versus maybe previous market downturns I think we're managing the cycles a little bit better now, but hopefully we'll tell you a little bit more about some of the areas of new growth as we go forward.

I think also you know, Steve just to Mac's point, we're very focused on the things we can control in the P&L and I think this quarter with you know, basically zero organic growth, you know, we had plus the real price, minus on three [ph] on volumes, so we kind of came out with zero organic. We had the leverage we wanted through the P&L and our gross margins were up 20 basis points, our EBITDA margins were up 90 basis points. So I think as a management team they did a nice job performing in a little bit of a tougher revenue environment which we know we're going to come out of here in another quarter.

And from Bernstein we'll hear from Jonas Oxgaard.

Morning, guys.

Good morning, Jonas.

So in Q4 earnings you guided to specialty earnings down mid single digits, sorry – mid single percent, and now you have flat. So my math says that's about a $50 million improvement of what you used to think. Most of your - most of the other companies in the space have reported that the quarter seem to improve in March, which seems to fit with your experience here. But you're leaving the annual guidance unchanged and second guidance as well, same as first. So how should I - how should align these two. It feels like opposite statements?

Well, Jonas, let me just high level. I mean, we beat the number that we guided to by literally $25 million, I think you guys on average we're a little - the gap was a little bit bigger $70 million, 80 million or somewhere in that zip code and it's on a $6 dollar base. So there's no reason for us to change anything at this point time. We feel like we had a solid quarter again relative to the revenue softness that we had and you know we'll see how we perform through the second quarter. We did guide flat. And you know we're expecting to see signs as we go through the second quarter that we'll start to see some orders from a smartphone side and on the auto side start to pick up that help us in the third and fourth quarter. Again, we're tracking inventory levels. We're watching all of that. So I mean, I hate to say this, to me it's a rounding error at this point in time and I wouldn't change the guidance that we gave for the year.

Next we'll hear from Christopher Parkinson with Credit Suisse.

Thank you. So just as attention to Jeff’s question, what are the two to three of their primary platforms you plan to organically invest in. Just - can you just re-brief us on the key seculars teams that you find particularly attractive. And then obviously you've already added you provide capacity in some of the subcomponents of an N&H - excuse me, but what are the other key opportunities which fit your future targeted profile in these businesses? Thanks.

Yeah. Its Mark. I'll take that Chris. I mean, there's a couple of big themes, the big themes are as you said sort of probiotics, microbiome we've talked about pretty well in terms of the investments we've made there and we're looking at both capital investments, significant R&D investments. We announced the partnership with Lonza [ph] around the HMO space, which is a pre biotic. We're continuing to make some - some minority equity investments in start-ups. We've got some university partnerships. We talked about last quarter. So lot of activity around that whole space. Auto electrification, I'd say the broader space is smart, everything's smart homes. You know as an example smart cities, industrial electrification is a big area which connects a couple of our industrial businesses. In fact, it kind of connects T&AP with E&I with S&C and we're making there both capital investments in products. We announced this past quarter an investment in Capton [ph] capacity which is playing into 5G, which is the connectivity space and we're making a significant R&D investment. We announced the opening of another innovation center last quarter too in that space. And then the only other area I'd mentioned is we do like the medical devices, health care space and it's smaller for us in terms of the total revenue impact. You know, if you think of probiotics, microbiome as several $100 million and if you think of the auto electrification as closing in on a $1 billion, Health and Medical is less than $0.5 billion. But we see that as an attractive space. Maybe one more thing I'll mention also is, is our water segment which is reverse osmosis membranes and IN [ph] exchange resins and micro filtration and that segment was up about mid teens. Here in the first quarter, we've made a number of incremental capacity expansions there. And so we're doubling down there on our production capability around the world. We had opened up the new RO facility in Saudi Arabia and Sudara [ph] last year and we're seeing really good long term growth dynamics in the whole water sort of environmental clean up space. So those are some of the biggest themes.

Next from Citi we'll hear from P.J. Juvekar.

Yes, hi. Good morning.

Morning, P.J.

You know, your seed pricing was flat in the US and it was up everywhere else and that was better than last couple of years when your competitors were going for market share. So can you tell us what has happened to sort of the competitive dynamic on price versus volume in seeds? Thank you.

Thanks, P.J. So you're right focusing that pricing first on North America and particularly the US. You know I just really started with just a tough farm environment. We've talked low net farm income. And you know we're out pricing our products for the value that they deliver but we're also responsive to the market environment that we're out there pricing into. So we went out with kind of a flat pricing card. And you know, as always in any competitive market, you know, there's lots of challenges and it's a lot of competition out there. But we feel good about where we're sitting right now today and that's kind of showing up in our in our results. Now, we see a mix effect as our new products really do drive a higher mix where we are pricing for that extra yield and sharing some of that back with the grower. At the same time you do have these competitive challenges. You highlighted the rest of the world in places like Latin America and Asia. We've done a real nice job of pricing out ahead of the currency effects that we see in those markets. So we essentially covered currency in Asia and we about covered it in Latin America. So I felt good about the way the teams are executing there. The euro was just such a huge drag. We weren't really able to catch that at this point because a lot of the other competitors are pricing the local currency there as well. But you know, you step back from that. We feel good about share in all of these markets. And so yeah, I think you'd call it - you'd call it pretty well, it's pretty isolated, flattish in North America. It's mostly seed and it's related to the market that we're operating in.

And our next question comes from Frank Mitch with Fermium Research.

Hey, good morning folks. Mr. Collins, long time no see.

Hey, Frank.

As I look at - I like the slide number eight, you know, and you show us how the corn seeds are tracking right on top of 2018 for 2Q. And if I look at your first half guidance you know, there is an expectation that sales and EBITDA are going to grow kind of mid single digits, maybe even a little bit better on the EBITDA side. So corn seed is kind of in line with 2018. How should we think about the drivers to get to increase year-over-year for Corteva?

Yeah. Frank, thanks. So you're right is we're kind of projecting out through the full year that - that second half already had a pretty strong plan. You know, we had about $200 million of greater than $200 million of EBITDA growth already baked into that plan, that's that new product pipeline that we've been talking about. But also the synergy flow through and you know, things like Arylex, Cereal [ph] herbicides had a great start globally. Azaria and Asian Soy Rust in Brazil and Zorvec fungicides both continue to just be stellar. And then as was now really beginning to see the effects of both Isoclast on the insecticides and [indiscernible] on C treatment. So as we think about now that new view of the second half, the new guidance really only adds about $80 million of additional EBITDA and that's partly due to this pipeline again coming in even better than we had in the original plan. And that's a couple of additional star players RIN score [ph] in rice which is a heavy second half Asia-Pacific piece and Pyraxalt, which is brown planthopper product that we've been talking about. It's really showing now nice growth ahead of the plan and that's a very Asia Pacific rice oriented product. And then we're seeing some pricing opportunities. We have a few products that are incredibly high demand and really you know we're having trouble supplying all the demand for those. So we're taking a fresh look at the pricing there for the value that we're delivering. And then you know, some of our synergies that we've been really looking at, finding a way to accelerate those synergies out of 2020 into the second half of 2019. And that's helping contribute to that upside in EBITDA. And then finally, I'll just say look, you know in these market environments we're always looking for ways to take additional productivity actions and kind of just tighten up the ship in light of the markets, that our customers are operating in and just be right with that. So if you add all those things together, I'm actually quite - I feel really good about the plan that we've laid out to add this additional and close that gap and be able to confirm you know about the $2.8 billion full year that we're talking about.

We’ll take our final question from John Roberts with UBS.

Thank you. Back on the Hemlock Semiconductor JV, do you expect any one time income later in 2019. And does the JV have any put called divorce clauses to allow you to either buy out your partners or force them to buy you out if they won't sell?

Well, this is Marc. Let me take the first one. Yeah, we do expect another one timer and we've got a built into the full year outlook. Not exactly sure at this point when it will land, but it will be in the second half. And then in terms of the causes around the JV definitive agreement, we're going to have to get back to you on that one.

Okay. With that, I think we're going to end. Thank you everyone for joining our call. We appreciate your interest in DowDuPont. For your reference a copy of our transcript will be posted on DowDuPont’s website. This concludes our call.

And this concludes today's conference. Thank you for your participation. You may now disconnect.