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E. I. du Pont de Nemours and Company (DuPont) (NYSE:DD)

Investor Day Conference Call

May 2, 2013 9:00 AM ET




Carl Lukach

Welcome. Please have a seat. Good morning, couple or more seconds to sit down. Okay let’s get started. Welcome to all of you here at the DuPont's Corporate Headquarters in Wilmington Delaware and also welcome to those of you connecting on the webcast. Thank you for joining us. We appreciate your interest in DuPont and welcome to our 2013 Investor Day. I am Carl Lukach and I'll be your host for today’s program.

I have got some opening comments to get us underway. Throughout the day in today’s event, we will be making forward-looking statements. These are based on management's current expectations, estimates and projections. All statements that address projections about the future, including the company's strategy for growth, product development, market position, expected expenditures and financial results are all forward-looking statements. These statements are not guarantees of future performance and involve a number of risks and assumptions. Many factors, including those discussed more fully in reports filed with the SEC, could cause results to differ materially from those stated. We strongly encourage you to review these filings and obtain additional information about our risk factors.

Next word is about your safety. In the unlikely event of an emergency, there are 2 exit doors behind me, and there also are exits at the back, up the first flight of stairs and turn left. You don't have to go up the second flight of steps into the hotel lobby.

Let me turn now to the agenda for today, and I want to especially thank those of you in the audience, who are on the web that contributed your thoughts to us on how best to design this meeting so that we met the key interests of the investment community. You asked us to provide a clear explanation where DuPont is going and how we are going to get there, and you suggested that we do this in a way that addresses your key issues, important topics like Ti02, the PB market, more insights on the nutrition and health after our acquisition Danisco, our R&D Pipeline, our agricultural business, future trends in safety and protection for activity gains, pension, cash, debt, and long term growth rate. Lastly, you also told us clearly to provide plenty of time for Q&A. So with all of that in mind we designed a four hour program for you that includes all of these things in more.

First our Chair and CEO Ellen Kullman will present our strategic and operational priorities and investors can expect going forward including our long term process. Then, our Executive Vice President and Chief Financial Officer Nick Fanandakis will focus on our operational priorities and share with you insights of resource allocation process, leverage and segment growth and margin targets.

Following Nick will be Tom Connelly, our Executive Vice President and Chief Innovation Officer. Tom will present an update on DuPont’s R&D pipeline and details on our new business segment Industrial biosciences and review with you our performance material segment. After Tom will have a short intermission and then resume with Executive Vice President Jim Borel, who would provide you with insights of better agriculture and our nutrition and health segments. And following Jim would be Executive Vice President Mark Vergnano who will share with you insights about electronics and communication segment, our safety and protection segment and our performance chemical segment.

We have designed four question and answer sessions for about 20 minutes each after Tom, Jim, and Mark, with a final Q&A session at the end for all of the presenters. All of the business presidents will join a presenter on stage to join in the Q&A. That’s about 80 minutes of Q&A and I am sure you’re going to take great advantage of that. After the final Q&A sessions, we will have lunch available for you at the back of this room, and most of our senior leaders would join you in that lunch period from one until about two.

This event is being webcast accessible at A replay will be available later today. If you do not have a presentation booklet, please raise your hand now and we will bring one down to you. My special request is that you please complete the short survey that is included in there. We are asking you very specific questions, and your responses would be most valuable to us especially in designing future events. So with that intro it’s now my pleasure and my privilege to turn the program over to DuPont’s Chair and CEO Ellen Kullman. Ellen?

Ellen Kullman

Good morning and thank you for joining us today, and we really appreciate you taking the time today to be here. It’s been about a year and a half since our last investor day and a lot has happened since then, both here is DuPont and around the world. Since we were last together, the global economy has gone through a lot of change and we have gone through a lot of change at DuPont.

As we look ahead, we are cautiously optimistic about the economic outlook. But we acknowledge that we have to adjust and find new ways to create value in a slower growing global economy.

So today I will share with you what’s next to DuPont and what you, as investors can expect. I will discuss our strategic priorities to increase the value of DuPont and our operational priorities for getting there. We are very mindful of your expectations for a meaningful return on your investment in our company and we have taken steps to make sure that our priorities are aligned with market realities and aligned with our commitment to deliver value to you.

We stand on a strong foundation. We will leverage those strengths to grow the value of each of our businesses and drive total shareholder returns through our disciplined approach to capital allocation. Let me take a minute to update you on our foundation and highlight the progress we have made since last met 18 months ago.

The first point is that we are better positioned in growth markets than just a few years ago. The global population growth and the resulting megatrends continue to create opportunities and we differentially allocated resources to focus and increase our capability to win. In agriculture, our market share is up in corn and soybeans. We’ve brought hundreds of new products to farmers including a blockbuster in crop protection product. We have a very high value, high potential pipeline of new products to help meet the growing demands for food globally.

In nutritional health and food markets, we now have a meaningful presence in this attractive fast growing sector. Our customer list after the Danisco acquisition includes the largest, most recognized and advanced food and dairy companies in the world. Also with Danisco, we created a world leading industrial biosciences capability, and market position in enzymes and proprietary microbes. These are the building blocks of the new advances in food, in fuel, and industrial material.

In automotive markets, our ability to bring light weighting solutions to customers has reinforced this space as a growth market for us. In mobile devices, personal computing and displays, we have advanced our position as an innovative supplier of enabling material technology for solutions that not only improve functionality, they reduce power usage and produce vivid color displays.

In the photovoltaic market, in spite of the upheavals currently going on the module manufacturing set at the value chain, we strengthened our position as a lead innovator. We have done it by delivering better pace in Kapton films that boost conversion efficiency, prolonged module life and increase return on investment for solar panel installation. In protection, we’ve added new offering such as process safety consulting, to help companies meet the increasing standards in developing countries. And lighter weight Kevlar fabrics to better protect law enforcers in dangerous settings. These offerings use the current knowledge in science to make our world a safer place.

In emerging markets, our capability and presence is broader, it’s deeper, and it’s stronger. Our brands recognition is improving rapidly in the fast growing and developing economies. We have on boarded and trained more than 9000 local employees in the past four years to build up our sales force and application development capabilities, in countries like Vietnam, India, Indonesia, Russia and The Ukraine.

The next point is about our portfolio. We have made important enhancements. Between 2011 and 2012, we made two major portfolio moves, our $7 billion acquisition of Danisco and our $5 billion sale of Performance Coating. And although they happened at different times, we consider them together in the context of making our portfolio more capable of growing the total value of DuPont.

Today you will hear more about how Danisco will help catalyze our ability to accelerate, expand and grow some of the most attractive parts of our business. It presents growth opportunity across multiple DuPont businesses and we are working to capture these new synergies. Coatings by comparison was not earning in adequate cash margin. We had higher value creating opportunities available to us in our portfolio. So we decided to monetize it.

The way I look at it, we were able to pay for nearly all of Danisco with the internal funds from the sale of our coatings business and from the $2.6 billion in permanently eliminated working capital we generated from our productivity project. The pairing of these two transactions has positioned us for growth and for value creation going forward.

Now staying with the portfolio for a minute; I know there has been a lot of discussion about our Ti02 business. So let me clear that. Other than the cyclicality and other than the difficulty in predicting return, it’s the strong business with exceptional cash returns on investment. Our proprietary manufacturing process technology gives us a significant low cost advantage. Our Ti02 business earned well in excess of the cost of capital even at the top and the peak of the cycle, even better. We used the cash from this business to fund R&D in gross investments in other businesses in our portfolio.

Counter balancing the positives is the magnitude and the volatility that this business has shown. Mark will go into more detail on that, but I wanted to address it directly. My message to you is that we continuously review and assess the role of each of our businesses in accomplishing the overall value creation goals, we will choose the right path for our shareholders. The next point is our improved cost position. In the past four years we have captured a cumulative $2.2 billion in fixed cost savings and this is more than offset inflation than help to fund growth investment. Our productivity initiatives are ongoing and we announced the restructuring program last year to deal with the residual cost from coating sale.

We are confident we will continue to generate productivity savings and focus our fixed costs on targeted growth investments in R&D and selling expense. As for working capital productivity we freed over $2.6 billion in previously lost cash on our balance sheet by improving our work processes and executing against our plans. So I described the strong foundation we stand on. Now let’s talk about what is next and how we will increase the value of DuPont going forward. So how do we create value for our shareholders? Well it starts with the purpose of our company which we have summed up in the statement. DuPont is a science company. We work collaboratively to find sustainable innovative market driven solutions to solve some of the world’s biggest and ever increasing challenges, making life better safer and healthier for people everywhere. Our purpose and our core value are constant. They all emanate from who we are as a company from what we do and how we create value. We discover and deliver science based innovation that solves real problems for our customers creating value for them and for you, our shareholders.

Given our purpose what is our strategy to grow the value at DuPont? It is to generate superior shareholder returns by building world leading positions in three attractive spaces where we have strong science that is valued and rewarded by our customers. These spaces should come as no surprise to you they are Ag & Nutrition, bio-based industrials and advanced materials. And each of these offers are of the opportunities to continue to build a distinctive portfolio of high margins growth businesses. The scope of our portfolio also enables us to leverage a broad set of scientific capabilities across our businesses, and access many markets providing significant opportunities to drive innovation across these spaces. While this over arching goal, we have three clear strategic priorities. The first is to become the clear leader in the high value science driven segment of the agriculture to food value chain, and to leverage the linkages across these segments. As Jim will describe, we are already uniquely positioned in this space and have tremendous opportunities and momentum to advance further.

Our second strategic priority is to strengthen and grow our leading position as a provider of differentiated high value advance materials through science based solutions this has been a historic strength of DuPont, and we will extend our lead here. And Mark and Tom will tell you more about how we will do so. Our third strategic priority is to build on our leadership position in industrial bio technology, and create transformational new bio based businesses in areas such as biofuels and biomaterials. We will achieve our goal by leveraging world class capabilities in critical enabling technologies such as designing and operating cell factories and microbial pathway engineering. Our application development capability and market access of our advanced materials businesses along with the value chain relationships and feedstock knowledge of our Ag & Nutrition businesses are providing critical advantages to our success in industrial biosciences. And Tom will provide an update on our progress here.

With these strategic priorities clearly in front of us we have also defined operational priorities to make sure we deliver results in the short term. These include innovation, increasing our return on R&D, global reach, capitalizing on what exists and extending it, and execution, driving it to the next level. Innovation is the top priority and increasing return on our R&D investments it is how we deliver value. Science is at the core of who we are as a company. Science differentiates us and gives us competitive advantage. We bring that science to the world to help our customers succeed.

We will deliver new products faster and with greater return on our investment. Now we receive a lot recognition for innovation as you see here, and that is a start. But our jobs is to continue to increase the financial return on our scientific knowledge and capability. Our R&D investments are the engines that drive our sustainable top line growth. We have a number of metrics and are continuing to drive the connectivity between these metrics and the bottom line value they create. The new products that come from these investments open new markets, bring us markets share gains and improve margins. For example, over the last five years we increased our seed business market share by six points in corn and over 10 points in soybeans. Our total net pace continues to gain share with each new product introduction.

In 2012, we had $10 billion in sales from products introduced over the past four years. And we introduced in 2012 a record number of new products. Our businesses grow on the strength of our science and the choices that we make in directing our R&D investments to areas of greatest potential. Now our businesses do this through an evaluation of markets, competition, and on science’s capability to differentiate us. Now this results in projects that the businesses prioritize for investments, and all projects are tracked by a gated process that assesses progress against goals. We combine strong portfolio of management disciplined execution and project tracking all with transparency. The top 100 projects for the company are directly overseen by the office of the chief executive. That is the top seven people in the company. And these projects comprise about 50% of our research and development investment. And this will provide more detail here and Tom will share some examples.

Our second operating priority is our global reach, and how we will extend it. As you know 32% of our $35 billion in sales in 2012, about $12 billion came from developing markets. And our revenue growth rate in those markets over the past five years has average 14%. We have invested in our footprint for the last decade and we are expanding that footprint into new growth areas in nutrition and health, and industrial bio sciences. We are driving penetration in these high growing developing economies. And let me give you a couple of examples. Two years ago we indentified India to really differentiate our growth there. We needed to act differently. We have been incrementally investing there for years but we saw opportunities coming out of the global financial crisis and we created teams to focus on accelerating growth by creating specific local capability to the very specific needs in six key market opportunities, in areas like automotive and agriculture. And these teams are delivering increased penetration and helping us grow the India market.

Now we are accelerating our progress with other specific programs around the world. In China we have a Go West program, which aligns with the Chinese government’s actions to industrialize the center and west of China. Our ASEAN program, where the rising middle class, now this is a territory that has twice the population of the U.S. It presents a great opportunity for us not only in food and agriculture but all in our businesses. Our Russia and Eastern Europe programs hold attractive growth opportunities for many businesses including Ag, where we are adding seed production facilities in The Ukraine and we are extending our sales capability across all our businesses by opening new offices in the Rostov and the Krasnodarregions. In Africa, we have announced our plans to acquire the Pannar Seed company. Now this will give us a strategic position to supply the increasing needs of farmers with more technologically advanced seeds. In Nigeria and Kenya, we are opening branch offices with a focus on agriculture and nutrition. And in Latin America, we have been very successful over the years at tailoring our products to local market needs. And our market penetration there for certain products in Brazil and Mexico are higher than our market penetration in the U.S. But here we are building on our capabilities in food and industrial biosciences to continue our growth.

Our third operating priority is simply execution.We continue to build on our strength here and for those of you that know me well, know this is a passion of mine. I use data to drive this vision. I set clear targets, use metrics to monitor progress and hold people accountable. I get the competitive benchmark, and I continuously raise the bar. One element of execution has thorough work to gain productivity as an ongoing ever present expectation. The productivity is not a program, it is part of every business, it is part of every function, and it is part of every region’s game plan it has to produce the productivity both fixed cost and working capital and we use this additionally in things like capital expenditures, and yes, even in research and development. It’s about being more effective while being more efficient. The plant production systems, we call it DPS, is added to the center and has been instrumental in building this capability into our manufacturing site. We continue to see great benefits from it every year. And on the supply chain side, we’re using the plant integrated business management to drive productivity into the supply chain and other transactional processes. So our productivity efforts are ongoing and embedded into our execution process.

Another aspect of execution that we’re driving is our comprehensive approach to resource allocation. Making sure, we choose the right opportunities for value creation. We allocate resources, capital and research and development to each business annually and adjusted based on performance and opportunity. It all starts with the corporate level and includes how we make funding decisions for acquisitions, debt reductions, dividends and share repurchases.

As a business level each year, we rigorously accept all of our value creation capability, in terms of their market opportunity, in terms of their competitive dynamics, and the strength of their value proposition in the market. We look at their capital requirements, their return on that capital and we look at their track record of performance.

To drive execution, we define specific missions for each business and tailor metrics to match that mission. We also look top down at the total portfolio to make sure it is performing to meet the commitments to our shareholders and to deliver on our company strategy.

We determine what each business must do to improve and the bar goes up every year. We look to see where we need to invest. The allocation goes to the project that provides the greatest magnitude of value creation. We’re more intensely focused on cash returns on the capital in our decision making. And it was through this process that we decided to sell our (codings) business.

In addition, we’re looking for acquisitions to augment the organic growth we expect from the portfolio. We look at adjacent spaces that could align and synergize with our businesses and with our direction. We look for companies that we can combine in ways to accelerate discovery and science total solutions for our customers, or which includes market access. Such acquisitions have to create trajectory. They have to create an enhanced future for our company.

Additional uses of the capital such as debt reduction dividend, share repurchase are also integrated into the overall resource allocation process. And we’re committed to weigh in all of our options on a scale that balances both the short term and long term outlook for increasing returns to DuPont shareholders.

I have said many times that DuPont is a market driven Science Company. And one way I visualize that, as the way we are as a company, is by parting our seven business segments across our three scientific areas. Material science, biosciences and agricultural sciences. These scientific capabilities are integrated across our company and leverage to discover and deliver solutions to our stakeholder problem.

The vertical access just represents markets. The important part of this chart is at the intersection of market and science, that’s where we find the opportunities to deliver the new and to discover solutions for our customers. That’s were science meets demands.

All three of our strategic priorities, innovation, global reach and execution are built on a foundation of leveraging scientific capability and market knowledge and business deployed across our Company.

We continuously strive to capitalize on a potential differentiator that only we are capable of, and we call that one DuPont. A good example of leveraging our innovation, global reach and execution for value can be seen in our new DuPont innovation centers. We opened our 11th center just last month in Istanbul. All 11 opened in the past 20 months. And they are low cost, but they have high impact.

The operative message here is to connect and collaborate. Connect more directly to the local market and customers, and collaborate to solve problems. It’s also means to connect internally among our business where they can share customer knowledge, scientific knowledge and tapping the previously undiscovered growth opportunities.

So, you can see in this slide how we link and network our research resources, including our products specific application development resources with individual customers in market. Our goal is to identifying new areas we can focus on profitably, increase our pace of innovation and increase our success rate.

We use these centers to directly connect locally with customers and to localize our science. We bring our 10,000 scientists and engineers to bare on that local problem, no matter where they are in the world. We’re able to increase our success rate in offering them solutions for their specific opportunities by leveraging our knowledge.

In addition, we’re creating a natural forum for all our businesses to participate in addressing a single customer problem. And that’s where we find opportunities and leverage. An example here will be CP Food group in Thailand. CP is one of the largest food producers operating across 15 countries in China. They employ about 280,000 people and they have more than $30 billion in sales.

Now we were selling them just nutrition and health products last year. And we invited their senior management team to join us in our innovation center in Bangkok. And we discovered we have opportunities to sell multiple products in many of our businesses like Pioneer Seed in China, packaging polymers and even further voltaic materials. This is now developed into a more strategic relationship between our companies. And we’re just getting started with our new innovation centers. But we’re already working on a 169 new growth projects that have the potential to deliver about $400 million in sustainable incremental revenue and commercialize.

The last point I’ll make on leverage and synergies across the company is it has to deal with our support cost as well. The goal here is simple, low cost per units support. The only way we can do that is to leverage our scale, and this is an area where we are finding the next opportunities in productivity gains.

So to summarize what you can expect from us, we’re building off our strength, we will grow the value of DuPont by building world leading position in agriculture and nutrition, advanced material and industrial biosciences. We will increase our return on research and development, capitalize on our global reach and we will execute in ways that are visible to you on our top and bottom line.

We’ll continue to invest differentially across our portfolio at our most promising value creating opportunities. This includes acquisitions to increase our organic growth rate. And we will execute successfully against our defined value creation strategies.

Finally, since we met 18 months ago, we re-measured our capability to grow and adjusted it for market changes. And we’re reporting today our long term, five year, well in growth target of 7% average annual revenue growth and 12% average annual operating earnings per share growth.

Now, we recognized these are challenging growth rates and a slower growing economy, given the strength of our portfolio, our global reach, our integrated science and our ability to execute we will achieve these goals and increase our return to your shareholders.

So on closing, we appreciate your investment in DuPont…

We will continue to earn your confidence by growing the total value of your investments. So again, thank you for joining us and I’ll turn it back over to Carl.

Carl Lukach

Thank you, Ellen. It’s my pleasure now to introduce you to, no stranger, Nick Fanandakis, our Executive Vice President and Chief Financial Officer. Nick?

Nick Fanandakis

Thank you, Carl. Good morning everyone. I want to thank all of you here with us in the room and those joining us through webcast for being with us today and your continued interest in the DuPont Company.

We have a great program for you this morning. And let’s get started with slide 2. Today I’m going to provide more inside on the three operational priorities that Ellen has just addressed, and how that help us deliver superior returns to our shareholders. We’re focused on increasing returns of our R&D spend, capitalizing on global reach by driving penetration and fast growing developing markets and driving execution including delivering on ongoing productivity efforts and optimizing our resource allocations.

Looking at slide 3, staring with our first operational priority, innovation. As a science company, innovation is the growth engine that connects market insights to a broad range of technologies, allowing us to create new opportunities for our business and our customers. As shown on slide 4, we’ve increased our R&D investments by approximately 50% over the last five years. However, it’s not just about spending more R&D dollars, but ensuring that we’re investing these dollars in the appropriate place.

As this chart shows, we’ve been increasing our R&D investment in those businesses which have generated the greatest potential for growth. For example, over the past five years, our Ag segment sales have increased at a 13% compounded annual growth rate, while earnings increased at a 19% compounded annual growth rate. And over the same time we have nearly doubled environment of R&D investment in our Ag segment. This will create even greater value for our company and for our shareholders.

To ensure that we’re investing our R&D dollars in the right places, our annual budget is based on a bottom-up, top-down approach. We run what we call a prioritization of initiatives, or POI process. Each business submits a POI plan to the office of the Chief Executive for the projects that they would most slike to have funded. For funding purposes, we analyze these plans to determine which projects would generate the highest cash returns. One of my priorities as CFO, is to make sure that the wide financial rigor is in place to clearly understand all these opportunities that are being presented by each business and to ensure that we're maximizing the value generated from the R&D investment. Moving to slide 5, one of the metrics I review is the amount of sales that we're generating from new products, which are those products that have been introduced in the last four years. These new products keep us relevant in the market place, and enable us to maintain or extend our leadership positions, this allows us to continue to provide more value to our customers and results in faster growth and higher margins. Last year about 29% of our sales were from new products that were introduced in the last four years and this is in line with our very aggressive target of 30%.

As you can see on the graph, sales from new products have increased at a 6% compounded annual growth rate over the past five years. And during the global financial crisis, it would have been very easy for us to turn back that knob and reduce our spending to help weather the storm. But in the DuPont company, we did just the opposite, we kept our level the same and we've continued to grow it since then, and you can see clearly see these investments are paying off as a compound annual growth rate of sales from new products with 11% over the past three years. This is what we mean in DuPont when we say science meets demands.

Turning to slide 6, I now want to discuss our second operational priority - global reach. Greater than 60% of our sales are generated outside the United States. Additionally in 2012 approximately 32% of our sales were in fast growing developing markets. Our margins on these sales have been steadily increasing and are nearly at parity with the margins we generate in developed regions. Our plan is to aggressively drive our penetration in these developing markets around the world and capitalize on the expanded footprint to generate growth for the company and for our shareholders. As you can see on slide 7 our sales in developing markets have grown at a compound annual growth rate of 14% over the past five years. In particular, China has a terrific example of growth driver for us and that sales there increased in a compound annual growth rate of 19% over the same time period. And as Ellen discussed we've been investing more in developing markets in the past several years included the opening of our innovation centers many of them in these developing regions. You can see these regions from paying dividends for us as our sales and developing markets have grown at a 22% compounded annual growth rate over the past three years.

As these economies continue to grow, I am confident that we will even more opportunities to solve our customer problems with our advantage science. It is at this intersection, where science meets the needs of those customers in the markets that we are able to provide unique solutions, often at higher margins for our companies.

Our ability to connect our local customers and collaborate to solve problems to the competitive advantage for us and that we will continue to drive growth for du Pont across the globe for many years to come. Now, let's move to slide eight and discuss with more details, the third operational priority execution.

As Ellen mentioned this incorporates the number of capabilities that we have been building over the past few years. Everyday, all of our businesses are held accountable to execute against their individual performance target while outperforming the competition.

Additionally, we are focused on delivering ongoing productivity gains in our business and optimizing the allocation of our resources. Beginning on slide nine, our growth productivity has been the area of focus within de Pont over the last decade.

We instituted a more disciplined process over few years ago during the global financial crisis. We embedded these processes which we called, de Pont Integrated Business Management or DIBM and de Pont Production Systems or (NYSE:DPS). We embedded these systems within each of our businesses.

And today, we are more focused than ever on achieving, and more importantly, sustaining those productivity gains. Productivity is ingrained in the DNA's of each and every one of our businesses. Let me give you a reference point or proof point if you will around this; from 2009 to 2012, we delivered greater than $2.2 billion of six cross savings and another $2.6 billion of working capital productivities.

We view as much this cost in cash savings to re invest and growth projects such as the Danisco acquisition as well as to offset ongoing inflations. Although we are pleased with the progress we have made in the area of productivity, we are not finished. There is more we can do and there is more we will do.

Last year, we implemented a re-structuring program to eliminate the corporate costs previously allocated to our performance codings business. This re-structuring plan was designed to improve the efficiency and enhance the competitiveness of our businesses and it’s expected to achieve pre tax cost savings of approximately $300 million this year, and $400 million per year in subsequent years. Beyond this initiative, we also committed to at least $300 million of ongoing productivity for this year.

The cost on productivity, I want reiterate one key point that Ellen highlighted just a moment ago. Productivity is in everyday business requirement. It’s not a special onetime event within the du Pont company.

Turning to slide 10, I’d like to switch gears and talk about how we’re going about optimizing our allocation of resources within the company. Beginning with evaluating the portfolio, we continually are assessing the value creation capability of each of our businesses based on the pro-activeness of the markets that they serve as well as assessing their competitive advantage in their technological and science competencies.

We also review each businesses sales and earnings growth potential as well as the cash returns on investment capital including our R&D dollars. This is done not only at the corporate level, but for twelve businesses but it also is done within each business at the business unit level at each President if asked to address.

Each President evaluates their planning unit on a continuing basis using much of the same criteria that I just described. The information that we gathered from this ongoing evaluation helps us to identify those businesses or planning units that represent our strongest growth and highest cash return opportunities. We then maximize our allocation of those resources including our R&D, CapEx, and M&A to those projects that have the ability to create the greatest value for the company and for our shareholders.

I have already addressed how we’re investing more R&D in higher growth businesses. Similar to R&D, we utilize our portfolio of evaluation or POI process to decide where to investment our capital. As shown here on slide 11, we have been reallocating where we invest our capital over the five years and keeping with our operational priortity around the execution, we’re investing more today in those businesses that have proven they can generate faster, higher cash returns such as our Ag segment.

We also run a very discipline review process to make certain that were generating the returns that expect from our capital investments. Every business and every functional president is held accountable for ensuring that the financial turns for each of their capital projects is meeting or exceeding our expectations. For those projects that are not meeting expectations, a detailed analysis is performed and an action plan is implemented to get the projects back on track. We also capture key lessons learned, so we can avoid any similar issue in the future; additionally the results of this process are reviewed annually with the office of the Chief Executive for all capital projects exceeding $10 million.

Now let's talk about M&A, beginning on slide 12. We have and we'll continue to build our scientific strength through M&A. We look for growth opportunities that are aligned with our strategic direction and can advance or enable core capabilities in our Ag & Nutrition, bio based materials or advanced materials. While our focus is primarily on smaller both on acquisition in businesses that are in adjacent marketplaces or those that provide access to complementary technologies. We will also consider larger cross business or transformational opportunities if they are compelling. We're a science company focused on addressing some the world's toughest challenges including feeding the world, decreasing the dependence on fossil fuel and protecting people and the environment. However we can’t solve all these challenges along.

For this reason in addition to acquiring companies we look to develop strategic joint ventures or alliances. Or acquire or license technologies. We have a disciplined approach with our M&A process. We set high financial hurdles that must be met before we even consider an acquisition. As you might expect the financial metrics that I most focus on is the expected cash return on investments. Additionally, I want an acquisition that we make to be earning and cash accretive within a very short period of time, ideally within one year. And certainly that is what we showed in our results with the Danisco acquisition.

Moving to slide 13, over the past four years we've been very active with M&A transaction. Of course the two transactions that have gotten the most attention are the Danisco acquisition and the performance coatings divestiture. However, you can see here we've completed many other transactions as shown on the slide. Although we've divested more annual sales than we've acquired, these transactions have dramatically improved the quality of our portfolio including adding higher growth, higher returning businesses that build on our scientific strength. These transactions have also allowed us to continue to strengthen our M&A competency. This includes our ability to quickly and effectively integrate acquisitions and our ability to aggressively address to any cost with any divestitures. At the past this month, we are celebrating our two year anniversary of the purchase of Danisco. I would like to take this occasion, to just take a moment and give you a quick update on how I view the success of this acquisition.

In 2012, we outperformed our plan of achieving greater than $130 million of synergies and I am happy to say we accomplished that one year ahead of the original plan. Even better, while 2012 was a significant year of integration activities, the businesses we acquired were both earnings and cash accretive. So I am very proud of the process we have made with acquisition in the value it continues to bring us.

Turning now to slide 14. In order to be able to fund our goal projects we need to continue to exercise sound financial disciplines which include maintaining a strong balance sheet. This has enabled us to execute our strategic priories, its enabled us to weather the severe economic downturn one that occurred and its enabled us to take advantage of growth opportunities such as Danisco are continuing to return strong shareholder returns.

I am often asked by investors, what’s the white capital structure to DuPont. My view is given the industry that we serve in the level of asset and technology intensity, the optimal capital structure for us is one that allows to maintaining our A to A2 credit rating. Maintaining this credit rating provides us with excellent access to short term commercial paper markets and long term debt capital markets which ensures our liquidity. But most a good rating gives us a flexibility to execute and potentially then drive some of these compelling opportunities within the company.

Although Dupont, today we have a very strong balance sheet some of our financial metrics will come in through with the AA2 rating as we close that last year. This is why we use about $3 billion of our after tax proceeds from a performance coating divestiture to reduce our adjusted net debt levels.

And like many other companies, Dupont is a multinational the substantial majority of our cash is held by foreign subsidiaries they grew greater than 60% of our sales to occur outside the United States which generates significant cash beyond the U.S. boarder. We typically use this cash to fund local operating and capital expenditure activities including in developing markets which allows us to further capitalize on our second operational priority of global market reach.

Part of the reason we needed to strengthen our financial metrics is because credit agencies include the global unfunded postretirement in their calculation of adjusted net debt. Today, historically low interest rates are driving an increase in the unfunded postretirement liabilities and as you can see on slide 15, our U.S. principal pension plan was an overfunded status in 2007 when the discount rate 6.25%.

And you can also see however that historically low interest rates have contributed to the plan now being only 7% funded with the discount rate at 4.1%. Occasionally, I get asked with interest rates that historical low, “Why don’t you go out and borrow money to fund those pension contributions?”

My answer is we typically do not prefund contributions because the discontent rates and the return on the plan assets can change which could lead an overfunding position and thereby tracking the cash in the plan such as we had in 2007.

My view is there is no incremental value to our shareholders in prefunding these contributions. The benefits just simply don’t outweigh the risks. Therefore we make the necessary contribution at the appropriate time as required. Additionally we actively manage the plans assets. We are weighted more towards equity securities and other higher return in investments. In fact our U.S. principal pension plan has achieved double digit returns in the last three out of the four years and it’s averaged about 10% return over the last 10 years.

Moving to slide 16; the three operational priorities that we’ve discussed are the enablers to deliver superior return to our shareholders. Driving these priorities will help the company to achieve long term sales and earnings growth targets and continue to return capital to our shareholders.

As shown here on side 17, our long term five year rolling growth target are 7% for sales and 12% for operating earnings. These targets reflect the realities of the current operating environment as low as the changes that we have continued to make to our portfolio. Today, we’re operating the slower growth environment. Economic conditions in Western Europe continue to be recession like. Growth in North America is still largely soft with some bright spots. And while China’s growth is steady it is not the double digit growth rates that we saw in the past.

Offsetting the slower growth environment is the recent portfolio movements that we have completed and improved our growth profile fully integrating the business as well as divesting the performance coding business. Today, a greater percentage of our businesses are in the secular growth markets. Additionally, this chart showed the long term sales growth and margin targets for each of our segments. These margin targets have been updated to reflect the reporting change to operating earnings that was made in the first quarter of this year. And to provide you contextual basis, we have also included on this chart the 2012 margins on the same basis.

As you can see from the chart, the margins at the end of last year for performance chemicals and performance materials are higher than the long term targets. This is because the current long term performance chemicals targets reflects the expected margins over the full Ti02 cycle where last year 2012 margin reflects a market which was at peak level.

The performance materials last year’s margin reflected a very favorable feedstock environment that we expect to normalize over the long term.

Each of our today’s presenters will provide you with more details on the segment growth drivers that will help them achieve these long term sales and margin targets.

Now, let’s move to slide 18. Our plan is to grow the dividend in line with earnings growth. As always any dividend payments are subject to board approval and you can see from this chart paying dividends to our shareholders is and has been a top priority. Just last week our board approved a 5% increase to our dividends and since 1904, we have never missed a quarterly dividend and unlike some companies, we did not suspend or decrease our dividend during the global financial crises.

In addition to our dividend policy, we have also returned cash to our shareholders through share repurchases. As you can see on slide 19, we have repurchased about $2.3 billion worth of shares over the past 2+ years. In April, we just completed our $1 billion repurchase program using a portion of the performance coatings divestiture proceeds.

So in summary, on slide 20, we have a clear path to deliver greater shareholder value. Our continued focus on the three operational priorities, innovation, global reach and execution will enable us to achieve our long term rolling five year growth targets of 7% top line and 12% operating earnings growth.

In addition, we will continue to invest differentially across the portfolio in our most promising value creation opportunities.

Lastly, returning cash to shareholders has and will continue to be a key priority within the company. So this ends my included remarks, look forward to answering any question you might have during the executive Q and A session, let me turn it back over to Carl.

Carl Lukach

Thank you, Nick. A reminder everyone that Ellen and Nick will be participating in the Q&A session as the last segment of our program. We'll now hear from Tom Connelly, our Executive Vice President and Chief Innovation Officer. Joining Tom on stage will be Doug Muzyka, Senior Vice President and Chief Science and Technology Officer, Diane Gulyas President of DuPont Performance Polymers and Jim Collins, President of DuPont Industrial Biosciences.

Tom Connelly

Thank you Carl and good morning everyone. I'm pleased to provide an overview of DuPont R&D and then to present our growth plans for Performance Materials and Industrial Biosciences. So let’s begin on chart 2. Throughout DuPont's history our science and innovation have been sources of competitive advantage, enabling us to thrive for more than two centuries. In today's global environment however, we must invest in R&D with a different mindset as markets are more dynamic, more competitive and fast changing. Innovation must be faster, better integrated, more localized and it must generate a robust return on our investments. Investors are demanding more details on our R&D direction and processes and greater insights into the strength of our pipeline. Today I will share with you our approach for ensuring a strong return and for accelerating innovation while providing an update on our exciting pipeline. Rest assured we are moving decisively to maximize the value of our innovation growth engine, let's look now at our key markets on chart 3.

Our acquisition of Danisco and the divestiture of performance coatings have reshaped our portfolio. This chart reflects our current emphasis and market direction. Our areas of scientific focus include Ag & Nutrition, bio based industrial and advanced material. In 2012 we generated over $10 billion of revenue from new products which we defined as products introduced within the past four years. More than $5 billion of new product sales came from the Ag and the Nutrition and Health segments alone. This is meaningful progress and a strong payback, but our customers and shareholders are demanding even more.

DuPont is a science company and science powered innovation is our growth engine. Beyond meeting customer and sizable needs on the global scale, we used such science to generate the growth, earnings and cash that powers our company.

To achieve this, we must continually adapt our approach and leverage the strengths of our R&D across our entire portfolio. Chart four shows the description of how we are advancing our innovation model. Within DuPont, we are applying our science to some of the world's biggest challenges, in ways that create value for our company. This goal inspires us, every resource we need, we used and every dollar we invest is deployed to achieve this objective.

Our objective remains unchanged, but our approach is evolving. For example, in the past two years, we evolved in the 11 innovation centers around the world of with the most recent one being last month in Turkey. The goal of this center is to collaborate more closely with customers and local markets while harnishining the creativity and imagination and science to meet global challenges disassociated with food, energy and protection.

At the innovation centers, we tapped the power of our science by linking with any of our 150 labs in 35 countries totaling more than 10,000 scientists and engineers and all. Our innovations are accelerated when we leverage global resources to local needs and bring market driven science through partnerships with our customers. To grow quickly innovation must be targeted and tailored to specific markets and regions.

Our innovation centers are low cost highly effective vehicle to achieve this subjective. Our performance owners business is a great example of innovating for local market. Our Shanghai R&D center has played a critical role to meet the local needs of the China automotive industry. In 2008, our polymers sales in China were about 75 million.

Five years later we have nearly tripled those sales, $220 million. Our polymer's growth rate has been 50% higher than the growth rate of the automotive industry in China. This has been achieved through local innovation and application developments. On Chart five, we present the science competencies that will fill better returns on our investments and grow the value of our R&D engine.

This chart illustrates DuPont sciences including chemistry, material science and biology that during the past fifteen years, we have significantly strengthened our biology capabilities through internal developments, acquisition of key technologies and collaboration with other companies, universities and government lavatories.

With this portfolio of foundational sciences, the critical success factor to accelerate innovation lies in our ability to look across the boundaries of those scientific discipline, we call our approach integrated science. We pull together the right combination of chemistry, biology, and material science from the competencies you see here. Du Pont uses this strength to deliver faster better and even transformation solutions for our customers.

While we have strong capabilities and strong and capable competitors in specific scientific discipline DuPont integrated science is unique simply stated we’re advantaged like no other company to meet customer needs while delivering value for our company and shareholder.

Chart six highlights another example of integrated science delivering value this time are Sorona polymer. Now, I know that many of you are familiar with our Bio-PDO in Sorona enterprise with this chart demonstrates that integrated science is not just a taking point. By pairing chemical and material science with biology, we have created a thriving business that is delivering over $300 million new revenue for our company.

Our unique science enables and enhanced performance sustainability and lower system cost while delivering reduce environmental footprint. Bio 1, 3-Propanediol or Bio-PDO starts with corn that includes pioneer high yielding hybrids. The corn is transformed in the sugar using enzymes developed by DuPont’s Genencor science. The sugars fermented into bio-PDO using a production microorganism developed by DuPont. Bio-PDO monomer is polymerized into Sorona using a DuPont proprietary process.

At every step we use DuPont’s science then we leverage our global reach in our market access through customer facing team into areas such as automatic. Our applications space is growing so in addition to automatic bio-PDO and Sorona find new uses and carpet apparel and personal care markets. Sorona is growing quite simply because it is a better product not just because it is green.

Our Sorona success demonstrates how integrated science is a differentiator for DuPont. This approach is being replicated our on broader scale to deliver even more innovation and deliver it faster. On chart 7, we reviewed our revenue growth from new product during the past four years. Revenue growth is essential to DuPont’s success and its one way we measured the impact of our science.

As I mentioned earlier in 2012, DuPont recorded over $10 billion of sales of new product as you can see on the right of this chart all of our segments are contributing new product sales with Ag having the largest share.

Some examples include new fungicide for disease control and production agriculture, new formulations of Nomex fabric for protective garments and new application of Zytel, high performance plastic.

Our new products sales are mix of new generation products designs to replace our existing offerings and products that capture revenue growth in new markets with adjacent spaces and to add for example 15% to 20% of our seed offerings are new each year. These products are introduced to deliver improved yield for durability and often replace previous varietals or hybrids. AQUAmax corn hybrids are great example. Growers who planted AQUAmax products in 2012 saw nearly a 9% yield advantage in their fields versus competitive products in water limited environments. Even under favorable growing conditions, growers who planned AQUAmax product still benefited from yield advantage.

We are also beginning to leverage this native trait technology to Europe and we expect sales of this product to more than triple to 7 million acres in 2013. The marketplace is the best measure of the value of our science. We have gained share in corn and soya and eggs, made major strides in industrial biosciences in nutrition and health and we have strengthened our leadership positions in areas such as photovoltaic.

Let’s move now to chart 8 for examples of projects in our R&D pipeline. This chart represents about a quarter of our top 100 projects and as Ellen mentioned these critical projects are reviewed regularly to assure and measure progress and to ensure a strong return. The size to this circle is estimated peak revenue for each product and the color of this circle represents the industry group, Ag&Nutrition, bio-based industrials and advanced materials. Overall, we have a strong and balanced pipeline across our portfolio.

We are particularly proud of our blockbuster crop protection product Rynaxypyr that recently emerged from our pipeline. We launched this product in a very different way. We move faster and with greater global coordination. During its rollout annual sales grew to $750 million in four years, the fastest time in DuPont’s history for a product to reach the sales level.

Within our pipeline we have exciting developments like our next generation refrigerant Opteon YF, our OLEDs, our seed treatment which Mark and Jim will talks about later. The DuPont’s pipeline is well positioned to bring future innovation and value to our global customers. Risk adjusted portfolio will deliver $7 billion in top line growth by the 2016 timeframe. In summary increasing return on our R&D investment and maximizing our pipeline are our key priorities. By leveraging our innovation centers in innovative science, we are making meaningful progress today against those objectives, and I am confident that we will deliver even more in the future. And on this note I will conclude my overview of DuPont R&D.

Now, I will focus on Performance material and industrial biosciences segment. Then Jim and Mark will follow to present the rest of the portfolio. I will begin on chart 9 with Performance material. As a reminder, Performance material comprises Performance polymers and our packaging and industrial polymers.

Let’s turn to chart 10 for a review of their key products and geographies. Within Performance material, growth comes from innovative material and expert applications development that enhance our customers’ product performance and sustainability and we reduce the total system cost. We leverage our four competencies to meet the needs of global customer base, while delivering strong cash and earnings for the company. As the chart demonstrates Performance materials is diverse and we take advantage of our global reach to capture growth in high growth countries such as China.

On chart 11, we review key trends and market dynamics. Outlined here are the key markets that grab our business. Packaging is the core market. Our high value polymers function as sealants, barriers, and adhesive in multilayer flexible films. By meeting customer needs through applications development we generate attractive margin. And innovation is highly valued in the segment.

Automotive is another top segment for Performance polymers with more than three billion vehicles on the roads in the near future, mobility, emissions, fuel economy and safety are critical. Automotive OEMs and their first tier suppliers look for high performance plastic to help increase fuel economy by reducing vehicle weight. Our Zytel and Vamac products integrate multiple parts at lower cost while enduring the higher temperatures in under the hood applications on turbo charged engines.

While the growth rate in Performance materials are modest, growth is stable and generate cash and earnings to support investments in our faster growth businesses.

Turning to chart 12, I would like to talk briefly about the role of renewable polymers in this portfolio. Our Performance polymer business has the broadest offerings of renewable resource engineering polymers in the industry. Our new generation of materials are derived from biomass instead of petroleum and they reduce the environmental footprints without compromising performance. We have been an innovator and we knew about, and we plan to maintain our leadership position through cross business collaboration. This is just another example of our approach to the integrated science. And polymers our renewable portfolio delivers today about $100 million in revenue, a number that we expect to grow steadily, up our $4 billion portfolio of engineering polymers, about half could be renewable resource in the years to come.

Let’s summarize on chart 13. Performance polymers have the clear understanding of the growth drivers and a strong record of executing our strategic plan. As the margin line indicates we delivered a 400 basis point improvement in 2012. We took a damage of a favorable feedstock environment so we are currently ahead of our long term margin target. While we expect natural gas prices to remain low, we do anticipate some margin pressure in the future; however, by remaining focused on delivering innovation and expert applications knowhow we remain confident in our ability to deliver cash earnings and a strong return on invest capital. The bottom line results are cleared. Performance material is a strong success story.

I will turn now to our bright future in industrial biosciences starting on chart 14. The industrial biosciences segment has a simple mission; to create the leading industrial biotech business by delivering transformative innovation and driving sustainability. We are at the early stages of dynamic growth. We have plans to build out our platforms into accelerated growth and to deliver strong revenue and earnings. We start with our broad technology foundation in bio processing and protein engineering and link to DuPont’s capabilities in production, agriculture, and a well established presence in advanced material.

This is another example of integrated science. As you can see on chart 15, we supply a diverse set of industries and geographies regardless of the industry or region or applications the development knowhow; our geographic reach and our pipeline of new products are the drivers of our growth.

On chart 16, provide some insights into how our businesses are structured to maximize growth. We organize our business in three bio based segment. We call them bio-actives, bio-materials, and bio-refineries. The first segment is focused on bioactive products such as enzymes and protein that play an important role in the production of animal protein and food processing, household cleaning, and personal care. Examples include feed-enzymes for animal nutrition or baking enzymes that increase the shelf life of bread.

The second category is biomaterial and biochemical like the Sorona polymer I’ve already talked about and the third category contains product that enabled the further processing of sugar into fuels and carbohydrates it also includes transformative technology to convert biomass to ethanol and butanol. The key end markets for industrial biosciences are diverse this is evidenced from the spread that you see in our growth rate.

High income levels around the world drive demands for protein-rich diet and convenient items for automatic washing and processed food these trend fuel our growth and bioactive and biomaterials we’re capturing and capitalizing on a superior product performance and growing consumer preferences for sustainable materials.

And bio-refineries are largest opportunities bio fuels it has attractive growth rates but fuel margins can be low therefore we are developing multiple sources of income from bio fuels value chain. We have (collected) spaces where we can license technology excel and science in fermentation, microbes, and participate in actual field cell.

In our core enzymes market highlighted on chart 17, we combined strong customer relationships with our science. We are the world’s leading suppliers of enzymes and other additives to help animal to digest a variety of feed products. Under the active brand, we have launched two new feed enzyme products that are tailored to the needs of the poultry industry.

In detergents, we are working collaboratively with both global and local brands to provide detergent enzymes that allow consumers to remove tough stains while saving money by washing in cold water. On chart 18, we illustrate some of our collaborative efforts and biomaterials. Mark industry is the great example of strategic partnership in action with the smart streamline of carpeting using Sorona polymer.

Mohawk SmartStrand Silk line is the softest residential carpets on the market and the performance in the static advantage of Sorona have a lot of Mohawk to take market share from their competitor. We are also excited about our work with Goodyear on bio-isoprene as many of you know isoprene is already an important raw material in the production of tires and adhesive.

Going commercial, we will have the strong value proposition as an excellent replacement for natural rubber. We’re making great progress and we have hit all of our technical millstones in the past year. Now, I would like to provide an update on bio fuels starting with chart 19. Last November DuPont moved into commercial phase of advanced bio fuels by breaking grounds on our cellulosic ethanol facility in Nevada, Iowa.

Following its completion in the second half from next year, the $200 million facility will be among the first and the largest commercial scale cellulosic biorefineries in the world. Once fully operational, the facility will produce 30 million gallons per year of cellulosic ethanol. Our innovative plan will showcase the strong competitive advantages that we enjoy.

First, we bring unparallel knowledge of feedstock supply chain through our pioneer agronomist, our deep relationships with growers and the experience that we developed with our seed corn value chain. Secondly, we bring a fully integrated technology package that has been optimized to deliver on the quality, quantity and economic for our customers.

We have not just the best processed elements, we have optimized the complete system. Finally, we are a company that now decide produce the key consumables that is the end-science and the fermentation microbes on an industrial scale and at that a cost that make our customers economically viable.

Our intent is to globally license this fully integrated end to end production system. We continue to advance our biobutanol program with Butamax our joint venture with BP. We have strong interest and early adoption from a group of corn ethanol producers who now produce about 1 billion annual gallons of first generation ethanol. They want to be among the first to convert their plans to biobutanol and we expect the first phase of implementation to be begin in 2014. Both of our biofuels programs aim to deliver fully integrated lowest cost, lowest capital technology. We will provide nations around the world with a pathway to meet renewable fuel goals to reduce greenhouse gas emission, to create jobs and energy independence.

I will now outline our plans to deliver a strong return on our investments in biofuels as detailed on chart 20. Already more than 50 countries have enacted mandate for biofuels. In the U.S. the renewable fuels standards or RFS creates a predictable ramp up for second generation fields that are required to meet the mandate.

Based on the demand projections, we are going to need a substantial number of new cellulose based plants to be built. DuPont’s strategy is not to build or invest in these facilities but we do intent to be the technology in side most of them.

Our higher fuel technology moves forward, we will have three revenue streams, licensing of engineering, design and technology, supply of enzymes and fermentation microbes, as well as some direct participation in fuel production and sales. No other company brings these capabilities to cellulosic ethanol and butanol that is the DuPont advantage.

By 2017, we expect to generate approximately $100 million of earnings from our licensing and sales of enzymes into bio fuels. We anticipate earnings will grow to over $500 million per year by 2022.

Now let's move to chart 21, in conclusion DuPont industrial biosciences growth story is still in its early stages; we have a solid foundation of earnings with lots of run rate growth. The drivers of this growth are innovation and new technologies along with market and geographic expansion. We anticipate annual sales growth in the 7% to 9% range and we will increase our margins from 14% today to the 16% to 18% range by delivering on our innovative new products, by realizing the Danisco synergy, our pricing actions and further productivity efforts. Now I've highlighted sampling of a growth program but it's important to emphasize that growth of our base business, this is the business that we enjoy today and know well will also play a key role in hitting our growth targets, that's one more reason why I'm excited and confident about our future in industrial biosciences. I'll sum up on chart 22.

Let me close be reaffirming my commitments that DuPont innovation will be the key growth engine for the company, I'm confident in our pipeline and I'm confident in our ability to generate attractive returns. I am equally confident that performance materials will continue to achieve its mission of delivering cash and earning through innovation and applications know how. For industrial biosciences we have a great future and we are already the most compelling industrial biosciences business in the world. And on that note I will send the floor back to Carl, so that leadership panel can entertain your question. Carl.

Carl Lukach

Okay we'll now have our first Q&A session. Just process wise please raise your hand, if you have a question the microphone will be passed to you and please introduce yourself and your company name before asking your question. Don.

Question-and-Answer Session

Don Carson - Susquehanna

Don Carson, Susquehanna, question for you Jim on the viability of the advanced bio fuels business, we've seen some pressure, both from oil companies and corn based ethanol producers to cut the RFS for advanced and cellulosic ethanol and obviously there's always concerns over subsidy. So how viable is this business with both the RFS threat and when will your technology be economic without subsidies?

Jim Borel

Thanks Don, clearly we think the RFS when it was enacted, was a very visionary piece of legislation and it did exactly what it was designed to do, it created one of the world's largest bio fuels industry in the U.S. but the work is not done, that was Phase one getting into the second generation and advanced power bio-fuels so we certainly a strong component of the RFS is doing its job and its remaining impact has been a core support from our company. At the same time, we have developed technology as we know overtime subsidies and incentives will have a tendency to some set. So, they do a nice job of encouraging new businesses and so our approach is that over the long term, our technology would be competitive without those subsidies.

But we need this early support in order to get this business up and running on underground. So, we are counting on continued support by Congress and the administration and we are working with other industry partners to show our strong support for the RFS.

Second question here.

Mark Connelly - CLSA

Mark Connelly from CLSA. Tom a couple of investor days back, you cheered a panel of global leaders and talked about de-centralizing decision making to drive innovation faster. Can you tell us couple of years later, what if you had accomplished those goals and how you bench market against it?

Tom Connelly

Absolutely, I remember that it was quite a good interaction and I would say we have continued to pursue the innovation on a global level and with more local decision making. You heard from Nick about the great progress we have made in terms of our sales into the developing markets. Now, comprised about assertive of our total sale, they have continued to ramp and those strong growth rates that Nick showed you I think are direct consequences. We have taken that step within technology, but regional technology leaders, they need to the regions. You've noticed that most of our innovation centers are into developing parts of the world. They have been great links to depart science and technology into the regions. And I will say our own vision of how we run our businesses is to really encourage stronger regional decision making. All of those trends I think are contributing to the kind of growth that continues into the numbers that Nick showed you in the morning.

Dave Begleiter - Deutsche Bank

For Diane, Diane tell me about your track record in growing your performance polymers. Is that faster you appear as always to grow that, maintain that, increasing share going forward versus people like BASF and (Sellmes).

Diane Gulyas

I think as you know and many of you know our game plan is the same. It's always about bringing our innovative new products which we think we do better and faster than our competition. It's about our applications development where we work every step of the value chain. And starting with the OEM's and all the way back to work on creating value at every step of the chain. Our global reach is unparallel that we think versus our competition. We are well positioned in many countries. I am so proud of what we do with the innovation centers. Many of our customers both OEMs and tier-ones are global. And so those innovation centers become video connections.

So our engineers and designers and our partners all over the world. And my team uses them extensively, some 15% to 20% of those 169 projects Ellen talked about come from Performance polymers. And last but not least we are absolutely obsessed with productivity. And I think that game plan gives this competitive advantage versus our global competition.

Chris Wallace - Impala Asset Management

You pointed out that you had roughly $10 billion of sales in 2012 from new product introductions over the last four years. Can you give us a rough idea what the profit margins might be on this $10 billion of sales?

Carl Lukach

We certainly can and maybe I'll ask Douglas Muzyka, our chief technology officer who runs those processes to comment on that.

Douglas Muzyka

In our development portfolio process, we really look at the competitive position as we direct our product development process and we look at the revenue and margin potential of those sale with them are, so for the most part in that portfolio we didn’t actually have the net effect on the company to have a margin improvement. And that every single one of those product result in a margin improvement, because we are very often replace products, in order to stay competitive, but on the whole that group the portraits that you saw on this chart that shows improving margins versus the products that they either replace or the product that drive top line growth with.

Carl Lukach

And maybe took that to add the process there on a segment by segment, say, that our new products are above those segment averages than we test that time and time again.

Michael Ritzenthaler - Piper Jaffray

One of the slides you had shown the next gen refrigerants are coming out and my question is, in order to hit the revenue bubble for those next gen refrigerant, how much help is needed from the EPA to get down the version volumes of the legacy products? And as a follow up, were there very high expectations stemming from the work with Honeywell, some of the European OEMs?

Unidentified Company Representative

Let me take that question, a clearly adoption of Opteon yf is an important step, and environmentally sound step, for the rest of the audience who may not be as familiar. Opteon yf has extremely low global warming potential, grabs 1/10th of 1% of the global warming potential of the product that it replaces. This technology has been adopted by the European commission. It’s within Japan, there are strong indication that will be adopted, it will spread to Asia in connection with our new (Cap Ex) requirements, U.S. automotive OEMs who see a ropeway to play even without the refrigerant legislation. So we see very strong momentum clearly starting in Europe with its environmental continents. We’re counting on it’s as spreading beyond that but we don’t need total world by adoption to hit the target that we set for ourselves.

Brian Maguire - Goldman Sachs

Tom, it’s a question on your bio-PDO Sorona and bio-isoprene products, are they cost competitive with traditional petroleum based chemistry or are you just substituting one volatile raw material for another corn and kind of related, are you getting a price premium for them for being biobased?

Tom Connelly

Bio-PDO Sorona is a great story and I think I let Jim comment on it.

Jim Borel

Oh, it’s a great example, you know, PDO has been an article commerce or commodity that have been out there before our program came along. And you know carpet fibers and polymers made from PDO were prohibitively expensive from oil, so as Tom said one of the solutions that we brought was first of all to produce a product at a much lower cost from renewable sources. And bring some enabling performance characteristics to other markets that were unavailable to oil-based PDO. So it’s a great example of your question in action, it actually solved cost issue.

Bio-isoprene today as we’re working to our development cycle, you know, we have a target or a goal to be competitive but this isn’t necessarily about cost competitiveness as much as it is about an additional source of a key raw material for the rubber adhesives industries that are out other, so with bioisoprene and PDO while we can’t claim that we get a substantial premium for any kind of renewable attribute today. I think as we move forward and the global forces continue to push us toward more sustainable supply chains and that will be recognizable attribute that will certainly look to extract the value from.

Brian Maguire - Goldman Sachs

Can you give us an update on your industrial biotech expected CapEx over the next five years and you haven’t had that many new products or bubbles added to the pipeline, should we expect more chemicals to be added as target areas or are you going to put this away from carbohydrate feed stocks or something else?

Tom Connelly

So let me talk that, that entire question was specific to the bio based industrials, just be clear. Certainly as we mentioned those charts don’t represent everything that we’re working on. If you notice the bubbles in my pipeline chart are more dense towards the outlet end, there is a lot going in the early stages but there is certain point at which we are really willing to talk about things externally. So there is more going on than it’s represented those 25 programs were only one quarter of our top 100 across the whole company. So there is certainly more going on and we do see additional opportunities in industrial biosciences as across our whole portfolio and Jim do you want to make a comment on that.

Jim Borel

Yes I’ll just add is, as Tom said at the end we are at early stages of our growth story and really at the early stage, Nick mentioned the Danisco integration as we start to now look across all of those three strategic areas that Nick and Ellen highlighted, we are starting now to identify other biomaterial and biochemical opportunities and Diane and I are great examples of that collaboration and action. We have a steering committee now, our teams need monthly and we have a number of programs that didn’t show off on the bubble chart at this point but they are coming. So, Diane why don’t say something about your view of renewable in your business.

Diane Gulyas

Sure, I am happy to. Clearly, going back to your, I think the original question, but our goal is class competitive, we are not going and assuming we are getting at a premium. As Jim pointed if we get one that’s awesome, functionally equivalent or superior and sustainable and that’s the target for the product of my business. We are looking at our entire portfolio and we think over the next decade we could replace may be half of our products probably because of our partnership that I have with Doug and with Kim, we actually have a managing process where the three of us meet quarterly and we look for targets where Jim’s enzymes and Doug’s science capability together with my market access can create new opportunities for DuPont and it’s a partnership that we have been working on for about last 12 to 18 months and we are starting to see some really interesting things. Some of which were ready to share with some of which were not.

Jim Borel

I think you also asked a question about the CapEx and may be just two quick comments, obviously this business competes with other businesses and DuPont the process that Nick mentioned with FDOCE for our share of that capital budget. So we have to bring projects that are competitive that receive and earn well above the returns that are in the expectations, and as a business leader, I have to do my job to bring efficient usage of those capital programs. So, again we are sort of at the early stages of developing that capital plan, some of that capacity to support our core business growth in our enzyme implementation capacity. But then capital as you know we announced the 200 million investment in our Nevada facility for cellulosic ethanol that’s sort of a start, reinforce the message that Tom said, is we don’t intend to invest in all of those ethanol facilities going forward but we felt the first one when we did step out with…

But we felt the first one, we need to discuss out with DuPont support to demonstrate the commercial viability and then overtime we expect to be in a licensing or a royalty model.

P.J. Juvekar - Citigroup

Hi, P.J. Juvekar, good morning, Tom. You know there's a lot of innovation that's taking place here with Shell Oil and Shell Gas. You can talk about that but what do you plan to do to benefit from that? And the second question related to that is, let's say oil and gas prices come down because of the Shell innovation, how do these bio based materials compete with that, in that environment.

Tom Connelly

Let me make a comment and Jim may want to jump in as well. So Shell Gas was a great thing for the country it's a great thing for the environment, we're very supportive of what's going on in that regard and we are benefiting from that, certainly within our performance materials business, low natural gas prices translates into some of the advantage that we're seeing there in terms of raw material. At the same time the low natural gas is providing opportunities to our industrial biosciences business because if you know the C1 and C2 molecules are becoming more abundant, the C3s, 4s and 5s are becoming less abundant less available and part of the Bioisoprene story is related to that. So we definitely see it as a very positive thing for our businesses, from the standpoint of transportation fuels, the density, energy density of liquid transportation fuels makes them the materials of choice for quite a while. You may some LNG show up here or there, but the kind of cars we drive around in are going to be powered by liquid transportation fuel. So I don't think it really changes our views very much of those markets, P.J. Jim do you want to add?

Jim Borel

Exactly those two points, you're aware that natural gas powered vehicles are 1/10th of 1% of the total fuel used in the U.S. today, if that grows, let's assume it most likely will displace diesel because a lot of that natural gas will go to short haul delivery vehicles or for public transportation, buses and those type of things. So we think it would be positive again for the future of cellulosic based or butanol based fuels. The third point I mentioned is the fact that it actually helps the bio fuels industry, lower natural gas, because many of the first gen plants out in the countryside today are powered on natural gas to get steam and energy, matter of fact our own cellulosic facility, when it starts up will be powered on natural gas, so this is actually helping the industry and the margins associated with it.

John Roberts - UBS

Tom, I think you said there's a billion dollars of that for ethanol, looking to potential be a leading edge converter to biobutanol. What do they have to do to convert like the spending required or the process of conversion and does that tie it all to your $100 million in 2017 or 500 million in 2022 or is that the kind of gallonage that we need to see for this business to earn that kind of money?

So, the first part is we are still developing the final capital aspect of the conversion to be able to sit down with this early adopters who you've have mentioned and talked about the conversion clients but we have been generally talking about their financial and their returns and the opportunity for revenue and margin on the sale of ethanol and that really about the group all signed up based on understanding those financials so part one of your question, this is a little opportunity for that group.

In those financial numbers, yes you have started to see the front edge of that conversion. We would expect to start the first conversion in 2015 and the actual installed equipment has to do with some separation equipment, has to do with changes to fermentation and clearly the separation of ethanol is a little bit different and the extraction of ethanol so there are some changes to the back end from a disdolation perspective.

But all pretty available today type of manufacturing technology that would be easily operatable biobutanol slowly. So here also, opposed to the programming, anything else you would have?

Duffy Fischer- Barclays Capital

Duffy Fischer from Barclay's; I was wondering Tom if you could just on slide eight, it's kind of an interesting lay out, you talk about the bio-Isoprene, the biobutanol, the cellulosic and just the time lack between the three and if I think back we've heard about biobutanol and so it was probably five, six years ago when you guys. So can you go back and talk about what you have got when you first got those products out towards five, six years ago. What's going on right-what's going on wrong? And how we should we think about timelines going forward as some of these new products on in the bio area?

Tom Connelly

Duffy if you would go back to a report from the; go back to say as far as 2007 so more than five years ago, we are about five years toward this point, we said that we would be moving; first of all, that the study logistics are slightly more advanced than biobutanol that's still true today. And we have said that we would be moving into commercialization space. In 2012, we made our announcement, in 2012 our plans for the innovative facility. So I think we are pretty much tracking along the timeline so we take those timelines pretty seriously and we're moving towards commercialization, more or less than the time frame set that we laid out truly provide a fuel but also to the programs that we have been discussing.

Duffy Fischer- Barclays Capital

But I guess the quarter would by raise pretty kind of on the same timeline that we should think about it, actual commercial sales being 7 years down the road from here and we would follow that same kind of pattern when you first got out the bio butanol, and the cellulosic as far as commercialization?

Unidentified Company Representative

I think about that timeframe we have two critical milestones coming up in the next 24 months around the design and operation of that power plant to demonstrate the fully integrated technology. At that point as Tom said, we’re working with a partner and we have some discussion they have with them about the timing for the full scale commercial facility.

I would say on our technology milestones our teams have actually done very, very well in 2012 and then we had a good year last year technically around basically.

Unidentified Analyst

First performance materials and the industrial biosciences are showing a bit higher margins for your target now than you had year and a half ago. And each are showing lower growth, sales growth target than you expected year an half ago. Can you just do a little attribution analysis to help us understand what are, what factors are driving those changes for example with margin, how much is attributable to the pension accounting change and the share gain and other factors and what’s driving the change on the sales growth outlook?

Unidentified Company Representative

In terms of margins at the economic change really accounts for shift that you’re seeing. So, we’ve not received down our expectations. These businesses are tracking; they’re delivering what we say we are going to do. Jim’s growing into his long term targets as IB ramped up. With regards to the growth rates I think Nick summed it up well, we look at on it the micro environment what’s going in Europe, China is growing well but it’s not China of the significant double-digit growth that we’re seeing. So, what we’re seeing is those growth rates represent our view with the micro reality rather than any specific things. Obviously we are doing what we can to achieve those rates. Ellen, any comments?

James Collins

I would say on IB, the margin improvement is also attributable to the integration synergies. As Nick said, we delivered those synergies up full year earlier. So, we’re getting those to the bottom line so that’s improving operating and as Tom mentioned our pipeline is beginning to accelerate. We talk a lot about our material programs we have we a number of projects in our core enzymes business at then one that was highlighted around cold water with Procter & Gamble. These are new enzymes and these enzymes have good margins so it is the mix affect as well that is improving that operating margin. I am sorry last question in this segment, thank you.

Vincent Andrews - Morgan Stanley

Thank you. Vincent Andrews from Morgan Stanley. Could you just talk a little bit about on the

technology licensing part of the cellulosic ethanol piece how well formed do you think the potential licensers of that technology are and if we think back to sort of plain old corn and ethanol and when all those transfer they will way back went prognosis for profitability of those looked pretty good and then the market changed for a variety of reasons. So how and there will be a mandate and all that but how well formed and what is your backlog of conversation and so forth?

James Collins

Probably a little too early to talk about any specific conversations I can tell you we are engaged in a number of those and they have been very positive I think the recent uncertainly around the regulatory environment around the RFS has created a little bit of a pause in a few of those which is again why we are certainly so supportive of that legislation and we send messages all the time that stability and policy is one of the key drivers for the ramp up of this business. So if tomorrow there was an absolute 100% assurance of the presence of that it would not be long before we could be out announcing some relationships.

Carl Lukach

Okay ladies and gentlemen we will take a 10 minute break and resume with Jim Borel on our agriculture and nutrition and health businesses.

Okay we will get started here. That was a request. Here they come, okay. Okay, this is going to be one of those moving restarts I could see. Okay ladies and gentle men we will restart the program now by hearing from Jim Borel, our Executive Vice President, who will address our agriculture and nutrition and health segment. Joining Jim on the stage now for the Q&A session afterwards will be Rik Miller, President of DuPont Crop Protection, Paul Schickler, President of DuPont Pioneer, and Craig Binetti, President of DuPont Nutrition & Health.

Jim I will turn it over to you now.

Jim Borel

Thank you and good morning to all of you in the room as well as on the webcast. I am pleased to give you an overview of our agriculture and our nutrition and health segment and it is a great time to be in the food and production agriculture businesses. Micro fundamentals remain strong and at DuPont we have an important role to play in helping the world to feed a growing population in the world but the challenge is its sustainability.

Let’s start first about our Nutrition & Health Segment. Nutrition and Health has performed extremely well since our acquisitions at Danisco and Solae growing sales and expanding margins to over 9% in the 2012 despite a 4 percent point negative impact from purchase amortization.

We’ve completed the structural integration of Danisco, Solae and the legacy DuPont NH business and we’re ahead planned on achieve the cost synergies.

We are very excited about the science and application capabilities that Dansico has brought to define including enzyme, nutrition and food science. Our experience since the acquisition confirms that Danisco provided a great business today and a good strategic build on for the future.

Today I’m going to share with you what we make and sell in this business to help you better understand the strategic rational of the Danisco addition and our plans to grow 79% sales and improve our margins to 12% to 14%.

To familiarize you with the segment, let’s start with the brief snapshot of the business on slide 3. We grew sales in 2012 to $3.4 billion comprised of three businesses. Enablers, a combinations of the multipliers, Texturants and system. They get their name because they provide fundamentals around taste, texture, mouth feel, shelf life and appearance.

They enable of different food formulations and dairy, bakery needs and they allow for the reduction of fats, sugars and salts creating healthy and nutritional solutions. We’re market leaders and protein solutions and strengthened our position in 2012 with the acquisition of the remaining portion of Solae. Soy proteins, an important building block of nutrition and ingredients are found in many products from infant formulas to sports drinks.

Health and protection is the unique blend of sophisticated bio-ingredients for active nutrition and bio-protection such as cultures, co-biotics and pre-biotics, functional sweeteners and food safety diagnostics. They require strong capacities in Micro and molecular biology and fermentation.

Geographically, you can see that U.S. and Europe are largest markets today. However we also have a significant expanding footprint in the developing economies of Asia and Latin America allowing us to create and customize product offerings to meet local taste.

We expect growth in developing markets to accelerate over the planning horizon as income raise and diet improve.

On slide 4, you can see the food value chain. You’ve chosen to play it two points with the highest growth in margins and I’ll discuss our input provider business as seen in crop texturants in a few minutes. But in Nutrition and Health we are leading supplier of high value specialty ingredients to global packaged food companies such as Nestle Kellogg Unilever General Mills we do not participate in the lower margin commodity segments, things like starch sugars and syrups. Specialty food ingredients are a great space with the play. It is $40 billion industry today growing at about 6% per year which is above the packaged food industry because of the unique advantages the specialty food ingredients provide in taste texture food safety and health to consumers. There is also as a segment in the food value chain where our science and our application know how can make a real difference and create new value.

On slide five, the trends which will drive market growth in the coming decades are secular in nature by 2050 it is expected that the population will increase by 2 billion people and that population will be increasingly urbanized changing where people get their food urbanization is going to increase the importance of packaged and productive foods and protecting foods as consumption moves farther from the source of production. Rising incomes, particularly in the development world, will change the number of calories people consume as well as their taste as income raises consumers shift from satisfying basic caloric needs and begin to demand more nutritious tastier and healthier food products. Noticing a population where one in six people go to bed hungry every night, while at the same time 20% of the world population is obese and over 30% of all edible food is wasted presents a large challenge we have strong science combined with knowledge of local markets to be able to address these challenges so whether we are working in Kenya on extending raw milk freshness or in Switzerland on a special protein formula for the ag we have the capability to provide local solutions.

And moving to slide six our products play an important role in feeding the world today we participate in all the major segments of the food industry including dairy meat bakery and beverages. Our ingredients make the bread fresher ice cream and cream cheese creamier yogurt healthier energy bars crunchier and jams and mayonnaise lower in calories. We are making people healthier and food safer and more affordable you will find our products in every second ice cream nutrition bar and specialty infant formulae in the world as well as in every third cheese and every fourth loaf of bread. Almost every meal you whether it is at home or in a restaurant contains our high quality food ingredients.

Turning to slide seven, our nutrition and health teams have developed some great innovative products let me share just a few example our fiber line ingredient help food companies create rye bread that has the taste and appearance of wheat bread and stimulates society and reduces cholesterol and blood sugar level our HOWARU probiotics are a unique blend of clinically documented ingredients that provide adjusted benefits to older adults, helping them to maintain natural immunity and efficient digestion.

Solae® Soy products help fight heart disease by lowering blood pressure to lower levels, to finally improved protection. A great example is BioVia, a natural antimicrobial compliant extract, that’s a valuable alternative to traditional chemical treatment against molds and yeast. Here, we have substantially help prevent food spoilage and weight for our customers. These are just a few examples of how our customers utilize our industry leading innovation and our broad portfolio of products services and application technique to be able to differentiate their product offering in a global market place.

We are assembling a very strong competitive position shown on slide 8 and we expect our advantages that will enable us to grow faster than the market over the long term. First we have industry relating science capabilities in areas such as nutrition science and immunology and together with our colleagues in agriculture and industrial biosciences; DuPont is the leader in genomics, and molecular biology and fermentation.

Secondly we have very strong application knowhow to use our science to solve specific needs of our customers. Integrated local sales and application development teams leveraging the power of 22 global food application centers; a better position than anyone to address region specific food formulation needs.

Third, we have a broad relevant portfolio of products. We provide food formulation capability across a variety of food applications. And, finally, our route to market’s advantage. We have strong partnerships with the expanding global food companies that I mentioned earlier and with the emerging regional and local companies. Our direct approach to customer sales and our single point of contact allows us to be a trusted integral partner with food companies. No other specialty food ingredients supplier in the industry has our integrated capabilities which is why we believe we will continue to strengthen our position in this exciting market.

Underlying these capabilities is our commitment to productivity. In roughly 2 years as we purchased Danisco, we have made material improvement in margins utilizing tools such as DuPont Production Systems and DuPont Integrated Business Management and Six Sigma to improve operational discipline. We are ahead of plan on the realization of the Danisco cost synergies and we continue to working at improving effectiveness.

On slide 9, you find nutrition and health is committed to growing sales 7% to 9% over time, are continuing to improve margins 12% to 14%. We participate in an attractive growing market where our product and application innovation will allow us to differentiate ourselves. Our strong customer interface and position in developing markets allows us to take advantage of growth trends in these fast changing economies.

And finally we are committed to continue margin expansion through mix enrichment fueled by product innovation differential management and commitment to productivity.

Now let’s shift the discussion to our agriculture segment consisting of our seed business DuPont Pioneer and crop protection business on slide 10.

Agriculture has delivered exceptional results over the past few years sales have grown at 13% since 2007 and at a rate 15% since 2010 growing faster than the overall market and of our primary competitors over this timeframe and at the same time we have been able to expand margins from 18% in 2010 to 21% in 2012 consistent with our promises while continuing to make strategic investments in commercial production and research capabilities. And while Ag market has been robust during this timeframe our execution has been strong and that is allowing us to outperform the market as I review the business and plans over the next few minutes you will understand why I am excited that we are increasing our margin targets to 22% to 24% while expecting to grow sales at least 8% to 10% over the planning horizon.

Moving to slide 11 you can see the major products we sell in agriculture corn seeds are clearly the largest product group followed by soybean seeds our crop protection portfolio has become increasingly diversified and renewed from the successful introduction of insect and disease control products like Rynaxypyr and Picoxystrobin. Geographically just over half of our agriculture sales occur in the U.S. and Canada but we have a strong and growing market position in Eastern Europe and in the developing markets of Latin America and Asia.

On slide 12; in the coming decades, we need to continue to push agricultural productivity higher by 2050. Global population is expected to top 9 billion rising income in a rapidly merging middle class which is expected to grow by over 1 billion people in this decade alone. We’ll drive people to improve their diets in order to grow enough food adequately notice those billions we need to double the amount of food produced today by 2050 in a sustainable way and that will not come by doubling the hectors in production it has to be from to be more productive on the existing production land base that is going to require a more science based sustainable solutions for our farmer customers.

If you look at the timeline of our recent product introductions on slide 13, you see the results of a research pipeline in the last five years alone we delivered year over year with innovative technologies in agriculture including Optimum AcreMax Insect Protection Y Series Soybeans and Rynaxypyr insect control products to name a few. And these new technologies alone with our continued advancements in breading have driven our business growth allowing our Ag segment to achieve strong pricing gains to grow volume and significantly strengthen our market position over this timeframe.

Looking forward on slide 14, we’re excited about our near term seed and crop protection pipelines. We have made significant improvements and investments in recent years to strengthen the capabilities in our biotech and areas such as portfolio management, trade discovery, bio informatics and regulatory affairs.

In crop protection, we have our focused research efforts that’s built the most productive R&D pipeline in the industry. We have several exciting products in our prelaunch phase and you should watch us future group points of our continued momentum.

Our corn seed trait Events DP 4114 will deliver additional value by offering growers higher yielding products with proven above and below ground insect protection technology. After all, that’s what growers want, they want maximum yield potential with the peace of mind of solid insect protection.

Delivering multiple traits in a single event is efficient and then ensures that the performance characteristics and yield potential of our industry leading genetics shows up on a growers farm and as the grain elevator, that’s what DP 4114 does.

Products containing both above and below ground insect protection are planted on about half of the North American corn acres, so we expect this trait to have significant penetration in our lineup.

We expect to commercialize 4114 early in the second half of this decade sending regulatory approval. It made tremendous progress in our development of seed treatment technology and we see this is a significant compliment to what we’re doing with our germplasm and traits. We’ve found ways to extend both Rynaxyypyr and Cyazypyr into the field of seed treatment, we’ll launch new DuPont Lumigen Seed Treatment Technologies in 2014 in the U.S., Canada and Brazil for corn, canola and soybeans.

In this technology portfolio, we’ll provide new standards of insect control for both above and below on ground test. Proprietary pioneer brand Optimum GLY canola will replace our current brand of ready technology in our canola hybrids often growers increased application flexibility and enhance marketplace choice and collaborating with bio-crop science to add LibertyLink to our canola, opens up pioneer genetic options to the other half of the 21 million acres herbicide market in Canada.

We’ll second notice both of these technologies to canola that was early in the second half of this decade sending regulatory approvals. In our crop protection pipeline it’s also been very productive, delivering products like Rynaxypyr and Cyazypyr. Our R&D team is producing more innovation for dollar investment in any other crop protection company in the world, we expect to deliver on average one new active ingredient every year.

Many other products in our crop protection pipeline offer modes of actions creating an opportunities to display it’s competitive products and after new market space is to gain share. We’ve also been very successful in renewing existing technology like our so familiar via herbicide franchise and as we look to the future, we don’t expect that anyone company will develop every technology internally to be successful, we’ll need to have a strong internal pipeline of genetics, biotech traits, and crop protection solutions but also key collaborations for stack again mixture rise and strong trait integration capabilities. In fact, today, each of the leading seed and crop protection company sell products that include proprietary technologies as well as license technologies and we continue to see new collaborations in the industry.

With our strong internal capability and important collaborations like our recently announced licensing agreement with Montero and our industry leading customer focus were very well positioned to create the best product options for our customers. On slide 15, you can see the evolution of our innovative insect control product offerings in corn.

The foundations of our corn product offerings are Herculex trait which we developed in collaboration with the Dow and MicroGen. The industry leading insect control traits enables our AcreMax integrated and reduce refused products. In addition, we have accessed the other leading technologies like Agrisure Viptera from Syngenta.

Our ability to integrate best in class trait into our leading germplasm brings growers of broad range of insect control option today. Beyond our current AcreMax trait package, we’re working hard on several pipeline program to enhance the ill performance broaden test bactrim and extend durability with the next generation modes of action. We’re excited about the recent Cyazypyr registration and the continued penetration of Rynaxypy.

As you can see on slide 15, we anticipate these low environmental insect control products from the same noble plastic chemistry but we’d like to see the billion dollar combined sales of maturity that we had planned. Rynaxypy grew again by 30% in 2012 and we expect sale to be over $800 million in 2013. Full year applied Cyazypyr is a strong component to Rynaxypy operating a broader spectrum insect control for use on additional crops in a different time in the growing cycle.

Our Rynaxypy based seed treatment known previously as Dermacor registered today and corn in Mexico and rice in the U.S. and Italy. We’re preparing for major launches in soybeans and corns in Brazil and Argentina and Canola in Canada in 2014 under our new Lumigen seed treatment technologies brand.

Early results from our testing last summer on corn and soybeans in Brazil are confirming outstanding soil pest control as well as excellent early season control of broad spectrum of Lepidoptera and pest that’s superior standard establishment and enhanced vigor is also staying off and we’ve seen yield increases in the range of 3% to 5% in our soybean research trial and a positive yield response also in corn and we will continue testing this coming summer to confirm the consistency of these very exciting early results.

Looking to the future, we have a broad range of insect control programs for curing and piercing insect pests as well as nematodes. Many of these products will contain new space, we will create new space for us in the market giving us strong confidence in our ability to sustain above market growth.

On slide 17, DuPont Pioneer takes an integrated approach to product development to deliver the right product on the right acre. We are closely with our customers to develop product to fit their local needs. Our products combine Pioneer Elite genetics and native traits like AcreMax with the best biotech trade options protected with Seed-applied technologies including fungicide and insecticides and biological seed treatments.

We can test each product extensively in local environment to ensure that they will perform as expected where it matters most in our customers fields. We take this approach everywhere where do business around the world.

Moving to slide 18, we have superior roots in market to deliver our products performance and we continue to make investments around the world to strengthen it’s advantage.

In North America, our sales reps are exclusive to Pioneer brands and sale direct to farmers. In other parts of the world, our regional market may take different forms from sales rep to retail to cooperative but all have the right product right acre approach in common, know the grower, know the environment, know the product and provide advice and approach that’s unmatched in the industry.

In crop protection, we have strong relationships with our partners and distribution and retail, Pioneer in crop protection, cooperate and many parts of the world where we see some great success with our go-to-market approach working together in the U.S. corn and soybean market expanding our weed control on our fungicide their penetration.

In addition to the plant, Pioneer is leading seed products, we offer a variety of services to farmers to help provide core farm management including planting and harvest mapping, grain marketing crop insurance and financial services as shown on slide 19. The plant Pioneer has provide it’s thousands of growers with harvest mapping services exceeding 10 million acres map annually.

We launched our precision agricultural program more than 15 years ago and we are building on this work to expand our services offering to support a wide variety of farming decision including seeds selection, in season crop management and water and fertility management all at the grower’s fingertips.

Now, I’d like to share a brief video that highlight the services that we provide to farmers today. If we can roll that video.

(Video playing)

Now moving to slide 20, over the next five years we expect that over half our growth in the agriculture segment will occur outside of North America, focused specifically on key markets of Russia, Ukraine, China, India and Brazil. These are markets we know well and we have a strong position today on which to grow. In Brazil we have great momentum in both the seeds and the crop protection businesses, we see consistent corn share gains in Brazil and our soybean business is adding additional capacity to meet the demand for high quality varieties. We've grown organically in Brazil by deploying research across the country, advancing locally developed and tested products. Investing in production facility and creating a route to market approach that differentiates Pioneer in Brazil.

We're expecting rapid adoption of our Lumigen seed treatment technologies in both corn and soybeans based on the performance we're seeing in a lot of trials this season. Russia and the Ukraine combined represent 14% of the world's arable land and account for about 10% of the world's grain production.

Farmers in these countries are rapidly adopting new seed, crop protection and seed treatment technologies in our key crops of corn, sunflower and oil seed (rates) combined with ambitious government policies to increase grain production. The potential for growth in this region is enormous. And our long standing customer and industry relationships in Eastern Europe and our prominent market position leave us well positioned to lead this growth.

Moving to slide 21, as we increase our margin goal, we affirm our long-term target of 8-10% sales growth and we see solid growth over the planning horizon driven by continued innovation from our breeding Ag biotech and crop protection research engine, our strong market position in developing markets and past and future strategic investments, position as well as capture this opportunities.

Growers around the world have quickly adapted new technology to improve yield and their profitability even if commodity prices moderate from today's heights; farmers are going to look to technology to be the niche on their competitors and to improve yield.

Longer term, the trends of population growth, rising income and a rich dive are going to drive the need for productivity making a strong case for continued investment. So, today we're increasing our agriculture segment margin goals to 22% to 24%. We see this growth coming from improvement in gross margins based on value creation and productivity improvement or we continue to make strategic investments in our global, commercial reach production capacity and research and development.

At DuPont, we have three solid businesses with strong momentum in our own rights in pioneer crop protection and nutrition and health as long as shown as slide 22. But in addition, where you neatly positioned to cross the food value chain? No other company can match the breath of capabilities from production agriculture, to nutrition, science and food production.

And we are already beginning to see value; the value that can be created by the linkages across these businesses through collaboration of our scientist and our business team. Let me share this two quick examples; first nutrition and health has been able to leverage a strong relationship with global food companies, it reduce the health and flying benefits of Pioneer's Plenish high (oleic) soybeans.

And second, our industrial bioscience businesses, as Jim covered earlier broke ground on a 30 million gallon cellulosic ethanol plant Nevada, Iowa last fall. Working together with the team at pioneer, we developed environmentally sustainable plants to be able to move (coras) over that will benefit the farmer, give the ethanol plant to consistent source of stock or strengthening pioneers relationship with the farmer.

In addition, we recently signed a collaboration agreement with the natural resources conservation service that USDA to create a frame work for sustainable silver collection for use by farmers in the industry going forward. And we are excited about our portfolio today to continue to look to enhance our science capabilities in our customer's access as well as improve our return on capital.

We have a robust portfolio management process. We actively evaluate internal investment opportunities, collaborations and hope on acquisition like I recently announced agreement to acquire Pannar seas in Africa. In conclusion, we are very excited about each one of this businesses on our own and the value that they can create together. So, Rick, Paul, Criag and I will certainly welcome any of your questions. Thank you Paul.

Question-and-Answer Session

Carl Lukach

Okay, second Q&A session, same process, please raise your hand, identify your name.

Bill Young - McKenzie

Question about wheat, you had a chart in there, showing the world and a lot of major crop listed, wheat wasn’t in there. I was wondering how does DuPont feel about wheat as a potential growth market, incremental crop protection or seed well.

Rik Miller

I’ll make a quick comment Bill, and I'll let Paul expand on it. First of all we see wheat as a significant opportunity and the way that we can make a difference is with some unique technology that we think we can bring to be able to hybridize wheat but Paul, maybe you can talk a little bit about where we are in the plan.

Paul Schickler

We have been in the wheat business long time. We're the leading wheat breeder in the United States and the (inaudible) wheat market. So we have got experience with a strong germplasm base but if you look to the future the real opportunity is to improve productivity, longer term breeding technology to that crop, so that we can increase the competitiveness with other crops throughout the world. And as the top pioneer I think we have got the leading reproductive biology program in the world in order to bring hybridization to wheat for cost-effective as well as to deliver the increased yield that are needed for hybridization. So we are excited about our current position, but we are even more excited about what the future would offer in wheat. And I think we should look to crop protection to add to this. Because they have a strong business worldwide in the fungicide market for wheat.

Kevin McCarthy - Bank of America Merrill Lynch

A few questions on Pioneer Field360; can you talk about, basically the penetration of that, where you stand? What the ramp looks like? Also how it might differ from your competitors’ field script program and a little bit about the business model. How do you expect to get paid what that looks like?

Paul Schickler

Okay thanks, Kevin, good question. We are excited about this new offering. As you know we have always had a very close relationship with the farmer/grower, that relationship has always involved, advise and knowledge so that maximum advantage can be achieved from our product and our technology, this takes us to another stop. Because now we are in the game of not just providing what I would call discrete information at various periods of the year like planting advice or what to do at harvest or to provide yield map but it is really linking it altogether so that it is dynamic process. So that growers can adjust at planting fertility chemistry applications harvesting timing they can adapt their management practices throughout the year dynamically based upon the conditions that exist and also make marketing decisions through connections that we provide direct to grain merchandisers so they can take advantage of the best prices that are available this combination of services that was announced a couple of months ago is being piloted right now it is being offered to select roles throughout Unites States and Canada and will be in the market this fall with an offering it will be subscription based we have not yet set a price but it will be we will get a nice return on this service.

Mark Gulley - BGC Partners

Yes. Mark Gulley BGC Partners actually a three part question with respect to crop protection chemicals first of all you talked about one AI per year as your goal is that a genuine brand new molecule or maybe placed on some existing molecule’s another applications. Two, a $1 billion goal for this family but I think you are $800 million already so when is the billion dollar goal to be achieved and then three, Syngenta has some issues with respect to some of the seed treatment AIs don’t know how that is going to play out with respect to Bee Colony Collapse nowhere but to your new products maybe address a hole in the market that might be created by some issues there? Thank you.

Jim Borel

Three good questions Mark I think Rik can answer most of them maybe Paul can add a comment about the seed treatment aspect.

Rik Miller

First of all in regard to the new active ingredient introduction per year out of that pipeline that is a new active ingredient that we have committed to developing out of that pipeline. Some of those active ingredients will replace the existing products in the marketplace today and that is what we are seeing some of the growth that we are seeing from our pipelines entering new markets and new spaces with our new innovative molecules that are coming out of that pipeline. In regards to the second question you are asking specifically about the, yes exactly so as Jim has indicated we will be well over a $1 billion with that what we termed the family of Rynaxypyr, Cyazypyr and our Lumigen seed treat technologies that we are launching with the trajectory that we are on we have committed to be over a $1 billion with that family of products and with the recent introductions of positive year and the ramp up this year with new ready integration we look to meet that commitment.

In terms of the on going issue that’s we’re dealing with as an industry in Europe specifically I'm assuming on talking about new mix, I would say first and foremost we’re disappointed in the position that commission and the number of stakes that taken on them, certainly we are strongly in support of science based regulatory standards and the evaluations, of our chemistries on find face regulatory standards it appears that the commission or the number of stakes we’re taking has a base throughout there and so we spend following committed to supporting physicians of crop life international in the industry have taken around the acceptance of the science based standards relative to whether it be either be toxicity or the other associated issues that we think are related to canola flat disorders that we’re seeing in the market today.

Paul Schickler

And maybe to ramp up on the opportunity in seed treatments clearly in the pioneer business, seed treatment is been important part of our offering to provide the protection that it provides to seeds as well as the additional figure in yield potential that is generated. We are very solidly in and in both synthetic chemistry as well as biological in our seed treatment. The pioneer premium seed treatment offer that we make to grow over that comes through pioneer sales rep in North America is a very important part of our offering and again it kept back the uniqueness of our relationship with grower, we have the ability to put together the right combination of a premium seed treatment for the conditions on it’s specific farm for a specific customer.

Jim Borel

May I add just a quick addition to what Rik said about the new AI’s, Mark. Two things are very important, Rik’s team doesn’t put anything into the pipeline it is in the material difference in terms of performance and environmental safety et cetera. So there is a combination of factors that which is why things like Rynaxypyr got great market acceptance and very regulatory support as they work the way to do systems. So, that’s one. This is a just new molecule that take apart these are going to be important changes for the industry.

Second things is because of our position, we’ve invested the research engine and the pipeline rather than just getting bigger and so the fact is the vast majority of sales of new product cycle are coming out of the competitors sales rather than just replace now. There is obviously some kind of validation at any point. So, we feel really good about this strong pipeline we have and have now helped us to continue to drive growth.

Carl Lukach

Okay. Next question, but before we do we’re getting some feedback that’s folks on the web, cannot hear the question that clearly so please slowdown and ask your question clearly. I think Don is next and then Jeff and then…

Don Carson - Susquahanna Financial

Question on R&D productivity and levels it’s for your Jim. Now, you’re sending about 10% of the segment on R&D you’ve had good success in crop protection, success in breeding, but you’re primarily in licensee of traits so you question is, are you satisfy with the productivity roughly 350 million to 400 million a year you’re spending on biotech R&D, have you changed the process at all so that will be more productive going forward and come up with more price rate traits or you’ve made decision to be primarily in license of other party traits?

Jim Borel

So the first question is bottom line as we’re very pleased with return but let me talk a little about that. We invested in biotechnology you can think of its three primary areas we’ve increased regulatory and the work around traits that in progression which you need to be able to do whether you’re in licensing or user proprietary traits, so the reasonable chunk of our biotech investment is going to be those kinds of things but you look specifically at our biotech trait discovery work and I’ve gone back to 1995 since the day we’ve started and if you look it from then through 2013, it’s returned more than the cost of capital and we expect with the pipeline we have that is even higher return.

You saw the pipeline that we have, things like SBT I mean Herculex itself is foundation that we were key in developing and finish and etc, so we had things that have been successful already and we’ve got a pretty exciting pipeline, so yes, we feel good about the return but we do track it closely.

Rik Miller

And then Don, you know, I might add couple of more components to that. The advanced technology is come from breeding biotechnology program; do have directly impact on our germplasm development as well, you know, all you need to do is look at the AcreMax hybrids that are out in the marketplace, those were delivered through molecular breeding technique. On the soybean side, we’ve got Y series and T series soybeans that are market leaders again developed through that suite of technologies that come from our biotechnology program.

And then as Jim mentioned, you know, not only we delivered Herculex and AcreMax and Plenish and seed production technology but I’m really excited about our pipeline with 4114 coming out and also the Optimum Y technology for canola.

Jeff Zekauskas - JP Morgan

Can you talk a little bit more about your DP 4114 trait, that is the duet at second generation trait or is it new trait? What’s the incremental market opportunity, can you size it in revenue terms and when do you expect to introduce to them to the market or things being equal?

Jim Borel

Thanks. We are excited about 4114 basically what it is, it’s a molecular stack technology for above ground and below ground insects they are proven. So we are excited about protection that they provide but doing so through a molecular stack instead of through breeding provide tremendous efficiency as we add additional technology to 4114 and also drive a yield benefits as compare to the existing technologies that are delivered through breeding approaches. Commercially in the market, we expect you know it has completed public common period through the USDA and EPA so we would expect early second half of the decade of commercialization.

Jeff Zekauskas - JP Morgan

And the market size?

Jim Borel

When you look at the acres throughout the North America in the United States and Canada, anywhere that a double and triple stack applies itself this product will work, so one would size that somewhere around 80% of the market about 40% is what we feel in triples and about 40% as what we sale in double so this product has that potential.

David Begleiter - Deutsche Bank Research

Paul, on Monsanto's and taxed products, how do you start to compete in the insect protection market for soybeans in Brazil going forward.

Paul Schickler

I will make some comments, get to Rik with a little bit more science behind the opportunity we have certainly with Rynaxypyr treatment family product, we are excited about. We have been looking at this product for a number of year. the summer season has just passed in Brazil, it was tremendously exciting. What it does is it provide the broader spectrum of protection and other options that are not in market place today and we are also excited about the length of coverage through flowering that it provide. So we expect 2014 for that product to be in the market place, excited about it but then also we have a very robust biotechnology insect protection program that we will compliment.

Rik Miller

I think Paul has said as well. If you look at the spectrum of control that we are going to be able to provide with the Lumigen Seed treatment technology on that seed and the above and below ground protection that effectively control will essentially provide us with an advantage for that seed.

John Roberts - UBS

The largest area of specialty food ingredients is the flavors market. If the opportunity presented itself do you view that as an attractive part of that industry or because it's connected to fragrances and kind of leads to other things maybe it's not an area that you have an interest in.

Paul Schickler

Thanks John, for your question, now if you really look at our portfolio we have today, we really have a breadth of a portfolio is what the food companies such as Nestle, Kellogg, Unilever, so if you look at whether it's our neighbor's business or health and protection approaches, we offer a pretty wide and broad portfolio and the ability to do food formulations across multiple segments, dairy, bakery, meat. We're pretty satisfied with our portfolio, we do have some partnerships in the flavor area and we utilize those partnerships where we need to when a flavor has to come into the formulation.

Carl Lukach

Final question this segment.

Vincent Andrews - Morgan Stanley

Thank you, Vincent Andrews from Morgan Stanley. Could you talk about China a little bit, you have it on your map on slide 20 just sort of where you are now and where do think that can go, over maybe the next 3-5-10 years and then also you mentioned earlier about increasing R&D spending relates to regulatory and could you talk a little bit about how you think China is thinking about sort of the continuing influx of foreign biotech products into China, is that something they're accepting our word or just any update there would be great.

Jim Borel

Okay I’ll let Paul and Rik add to this but we think China is a major opportunity, we're already the largest international corn seed supplier, we got commercial joint ventures, we've had great growth, we make profitable sales there so, it's a good platform to grow from and we see significant opportunity to we've got some good momentum.

And on the crop protection side, it's a tough market but we also have a good business, Rynaxypyr has done well in China in its early days as well. Rik and Paul maybe you could add some color to what you see going forward.

Rik Miller

So, Jim's spot on, if you look at the growth that we do within China today, they're looking for innovation so the things that we have coming out of the pipeline in terms of disease control, insect control, even herbicides that will go on the number of crops that we have there. They're looking for innovations to enhance yield and quality. Also would, it's not just about the corn, it's about fruit, nut, vine and vegetable crops and you see an enhanced production of those crops and a larger greater consumption as diets are enriched in China, so we're enjoying that growth as well.

Paul Schickler

As Jim said, we already have a very successful and growing leadership position in the China market for seed, what I would say I'm excited for the future is that what we're doing for China is exactly what China needs, local development, products that are right for the market but equally as

important; the rural development, the Chinese needs so badly, the migration of the current from rural to urban; all of what we are doing fits exactly in the China plan for long term agriculture improved sustainability.

With technology, clearly China is going to be a market in agriculture to accept and adopt technology very-very quickly. The exciting thing of IC barrier, we DuPont have a great relationship at multiple levels of the government so we're very well connected and I think we will be ready to move quickly once technology will be regulated.

Okay that concludes our segment on the agriculture and nutrition and health segment, our final presentation today will be made by our executive Vice President, Mark Vergnano. Mark will share with you his insights and plans that he has for our electronics and communications segment and our safety and protection segment and performance chemical segment.

Joining Mark on stage are Dave Miller, President of DuPont Electronics and Communications, Tom Powell President of DuPont Safety and Protection and DC Chang President of DuPont Titanium technologies.

Mark Vergnano

I plan to cover the growth plans electronic communication safety and protection performance chemicals and hopefully we will address some of your top of mind question. So, lets start with electronics and communications, as you can see here on slide three, ENC had 2012 sales of about $2.7 billion led by revenue from affordable tech materials.

Almost two-thirds of our sales come from Asia; a number that continues to grow and it is the highest of any reporting segment within DuPont. When it comes to the markets we have served a you see on slide four, we have four strategic areas of focus, Photovoltaics consumer electronics advanced printing and flat panel displays.

These areas have a unique intersection of market opportunity and our technological capabilities. You can see that the growth rate are compelling for PV and consumer electronic. The displays organic growth rate is less impressive. However, our technology to replace LCD's creates a very large opportunity for DuPon.

So, I will focus my comments on these three market areas. Moving to slide five, our view of the PV industries is that gigawatt installations will grow at a rate of about 20% over the next five to ten year. However, we have said in the past, this is an industry that is in its infant years and growth is going to be lumpy at certain times. The Giga watt increase translates into about 15% growth for material as the trend of innovation is to efficiently use fewer materials to drive down cost, to achieve good parity. Even with all the growth we have seen in the market during the past couple of years PV represents a very small fraction of the electricity generated globally.

As you can see on the top right of this chart PV represents only about 0.5% of the electricity generated each year. There is some near term growing themes effecting the ability to drive greater penetration. Currently there is an over capacity of solar module manufacturers particularly in China which is pressuring the margins for these module producers, many of which are already financially distressed.

In addition the U.S. established an anti-dumping tariff on Chinese module producers a 40%. And the European Union have announced an investigation into dumping with the possibility of a retroactive tariff. Since more than 80% of solar modules are produced in China, the threat of retroactive tariff has created a great deal of uncertainty in the industry. We expect these industry issue including the consolidation of the module manufacturers to be resolved in the next year or so.

So while penetration is low we see very high PV project returns, which are driving installation growth in TPV markets. As great parity continues to expand on a broader scale, we expect the investment growth trajectory to accelerate. As you can see at the bottom of the chart, 15% of the world’s residential markets are at grid parity today. We see this increasing to 50% of the world’s residential markets by 2015.

For the PV industry to reach a good parity, broadly, we need to improve the efficiency, lifetime and clock of the module. Our science including our Solmate paste and Tedlar backsheet are responsible for a large portion of the industries progress in the last few years. Our continued new product extensions and innovations will continue to do so in the future.

As we look at the cost drivers on slide 6 that will drive the industry to broad grid parity we believe that our materials are very well positioned to enable these advancements for improved efficiency, lifetime, and cost. PV has a market with very attractive future growth rates. The PV industry roardmap is continually evolving and we are well positioned to capture the future growth with our unique and enabling materials.

Another market with an attractive growth rate is consumer electronics in slide 7. As consumer devices have evolved and designed needs have increased, we have used the power of our science to create new generations of materials that help designers move the industry forward products like Capson, Pyrolux, and Riston help make the lighter smaller and smarter devices like tablets and smartphones which will have vey growth rates over the next couple of years.

Let me highlight an example of the need for science based solutions in smartphones consumer demand for smart cellular phones required ever increasing needs for more technology in shrinking circuit space as portable phones continue to add more capabilities as a result cellular phone technology is becoming increasingly reliant on material solutions that enable thinner more flexible components with improved heat dissipation in the limited real estate available in today’s cellular devices.

Our materials provide high performance electrical reliability while allowing for low profile unique packaging capability this provides greater design flexibility for smartphone manufacturers next on slide eight we believe that organic light-emitting diodes or OLEDs are the future of displays and will be the core technology of the next-generation TVs our proprietary solution printing technology is the most advanced in the industry and enables the lowest cost manufacturing roughly 30% lower than the existing LCD displays this step change improvement is the key for driving OLED TV production we have received validation of our technology as one of the largest Asian manufacturers is currently licensing our technology today and we are in the final stages of licensing discussions with other manufacturers.

Importantly we just do not derive value from the licensing of our process technology we also gain additional revenue through supplying our proprietary materials that are essential for the OLED display as the TV market converts to OLED a 10% penetration into the global PV market would represent a $2 billion materials opportunity. I am please to say that our technology transfer is on target and we are accelerating our plane to add material capability and capacity to meet the market demand. Estimates from independent third party research indicates OLED TV sales to begin in 2015 with 27 million units sold by 2018.

So in summary on slide nine the drivers of growth in this segment are innovation and new technologies as well as market expansion we expect the E&C segment to grow 7% and 9% on the top line with margins of 16% to 18% margin expansion will occur as our innovative product pipeline is commercialized and PV market improves in addition our cost and capital investment for (tedblo back sheaths) are behind us. We are confident that we can return to the margins that achieved just a few years ago.

Next summary recover safety and protection beginning with our sales summary on slide 11. 2012 sales were about $3.8 billion, as a reminder this segment consist of three businesses, building innovations, sustainable pollution and protection technologies. Although construction product only count for about 12% of our total sales in the reporting segment, we do see some solid uplift in our Tyvek in Korean based U.S. business is going forward due to an improvement in the U.S. residential housing market.

Within sustainable solutions, our clean technology licensing unit has been both stood from our MECS acquisition two years ago and is really growing nicely. Primarily in developing markets as the need for the removal of sulfur and fuel in the other streams continues to be a strong growth driver.

Moving to slide 12, Safety and Protection sales are very heavily weighted to the industrial markets with over 60% of 2012 sales going into these markets. Growth in these industrial markets have been weaker versus what we projected a couple of years ago due to an overall slow down in global infrastructure investment, particularly resulting from both China and Europe’s economic issues. Consistent with these economic realities, we have taken actions to reignite growth and improve our margins. These specifics are highlighted on slide 13.

We are driving product innovation and application development, investing in down stream marketing and brands and improving our cost structure to gain profitable share. To adjust the first action, we have after gain and product innovation and application development allowing us to price the majority of our offerings in each of the market segment on a value basis.

A good recent examples from our Tyvek product line were large global pharmaceutical company has adopted the DuPont Tyvek air cargo cover solution for the global shipments, pictured on the top of this chart.

Tyvek was selected for this multiyear agreement for air cargo single use covers because of the unparallel mix of properties that the product delivers. Light lead strength, visibility, water resistance and superior thermal protection. These properties provide protections to the high value pharmaceuticals as well as adding distinct value to the shipper, much better value than in combine and full refrigeration alternatives.

To further explain our next two actions of down stream marketing and cost reduction, I’m going to focus on examples from our Kevlar product line. First, let me give you a backdrop, and lets take a closer look at what’s happening in the parallel Aramids industry globally and you can see that on slide 14. Global needs for advanced material that offer high strength in the lightweight protection continue to provide attractive growth opportunities for the para-aramid industry. This is an industry that DuPont created with the introduction of Kevlar over 40 years ago.

Over the past five years our emerging competitors from Asia have acquired the base para-aramid technology and have entered the space with small scale investments and mostly low annuity product. Today, these competitors account for less than 10% of sales into the market. Global demand for para-aramid is down roughly 4% from the 2008 peak. We believe that industry demand will return to between 5% and 8% annual growth rates as infrastructure and global spending will resume after being relative pattern the past two years.

With that as backdrop let’s talk about the second action investing in downstream marketing and using our strong brand, despite the increase competitive intensity DuPont Kevlar and Nomex continued to be the most recognized and valued brand in the year of this industry. Focusing on downstream marketing allow DuPont and our value chain partners to command the premium even in those markets segments where competitive intensity is highest and prices under pressure.

Using this strength, we’ve gained market share for each of the past two years and are well positioned in the customer demand for many years with the industry’s most advanced technology. For example, we have moved farther downstream in the value chain with offering such as our Kevlar XP fabric. This proprietary fabric allows us to offer body armor manufacturers a high performing more complete solution that gives them more design flexibility than emerging competitors who are just offering yarn and bottom.

Innovations like Kevlar XP allow us to work directly with body armor maker to better protect our brands in best position of products with the key decision maker located in the marketplace. The third action in this list is really focused on our cost structure. We have significantly reduced cost in this business both in manufacturing operation and en routes to market to improve our overall competitive advantage. This improves our cost leverage first specialized products and allows us to be more aggressively competing in less differentiated market spaces to both improve our margins and gain share.

These cost actions will have us improved utilization rates at our manufacturing facilities while continuing to drive mix enrichment actions. A good example of this is the investment in our Cooper River Kevlar plant, which provides us with technology to develop higher performing light than fibers that will be the highest growth product in the future. The new technology and the use of this facility allows us to develop and produce these fibers at a significant cost advantage versus all of our competition.

We’ve had great reception from our customers on the products from this facility and our on track with qualification which are helping us to gain valuable market share globally.

So in summary on slide 15, the new reality for SNP is that we are using our technology advantage to increase the weight of new product commercialization, expanding our downstream presence in positions in our value change and we are taking advantage of our improved cost structure.

As we complete our repositioning, we are confident that we will achieve our top line targets of 5% to 7% with margins of 21% to 23%. This six point margin expansion will be based one third on new products, about a third on asset utilization and another third on our in flight cost reductions.

Next I am going to cover performance chemicals, beginning with our sale summary on slide 17. Roughly half of performance chemicals, $7.2 billion in sales last year or from TiO2. With chemicals and fluro products accounting for the remainder.

The key market we sale into are on slide 18, where we have unique competitive advantages in each. About 60% of our TiO2 sales are in construction while chemical and fluro products sales are more weighted towards the industrial chemical and specialty markets.

Turning to slide 19, the largest growth program for DC&F is our new family of DuPont Opteon brand product that will include refrigerants, foam expansion agents and specialty fluids, all with low global warming potential.

DuPont co-developed the Opteon product family in response to Europe’s mobile air conditioning directive which created a demand for an auto-refrigerant with the global warming potential of less than 150.

Developing commercializing this product was a collaborative efforts with industry groups, government, NGO, OEM and the development partner. This collaborative approach created our innovative refrigerant that has a global warming potential of four which is 99.7% lower than the current incumbent. This is also a near-drop in solution which offer significant savings to automakers and downstream consumers versus all other alternatives considered.

We estimate revenues for this product could reach the $300 million to $500 million within the next five years depending on adoption timing in the EU North America and parts of Asia.

Switching gear, I will now talk about our DTT business beginning on slide…

Talk about our DTT business beginning on slide 20, let's begin with a quick overview of Ti02 market, as you can see from the graph on the top right of this slide the underlying growth rate for Ti02 by volume is well correlated with global GDP rate. I want to highlight two points implicit in this growth. First the steadiness in the long term growth rate exists because there really is no significant credible not in kind competitive substitute for Ti02. We continue to see less efficient materials and extenders in the market place; however they are not affecting the overall Ti02 growth rate. Second Ti02 global demand is early cycle versus the swings in the global economy, true to point our DTT business felt the global financial crisis earlier than many of our other businesses and subsequently recovered earlier. As a basic ingredient Ti02 swing are amplified by value chain inventory. When demand for consumer paint falls we feel a larger cutback of the value chain destock and in turn when demand recovers we feel the full weight of restocking. As you can see from the graph on the lower right these swings were even more amplified during the 2008-2012 timeframe. After a deep plunge in demand in 2008 and 2009 Ti02 demand essentially overheated, growing at a much faster rate than GDP in 2010 and 2011. Beginning in late 2011 through this year we've been going through a destocking period, our Ti02 volume in the first quarter of 2013 was essentially flat on a year over year basis, an increase about 8% from the 4th quarter of 2012.

While demand patterns remain dynamic and evolving we anticipate supply and demand in the global markets stabilize around the middle of this year and from that point resume a growth trajectory which has historically tracked GDP. Let's move to slide 21, Ti02 facilities throughout the world, produce pigment using one of two processes, technologies properly known in the industry as chloride or sulfate roots, the choice of technology has a significant bearing on the environmental footprint of the process, the quality of the product and consumer preference for it. The industry has added about a million tons of nameplate capacity over the past four years with the majority of that being sulfate capacity located in China. This new sulfate capacity predominantly serves the lower end of their domestic markets, there are significant implications when using sulfate process technology including pigment quality a higher amount of process (inaudible) and greater energy consumption than the chloride process, that is why we see many multinational producers abandon the Sulfate process for chloride based production.

China producers shows the sulfate technology due to it's availability, their excess to cheap labor and lower environmental requirements.

This gave them short-term cost structure advantage that we expect to change in the coming years as labor and energy costs increase and greater environmental requirements are amended in China.

That being said, there are hand full of Chinese produces that can produce a pigment of a quality that can be exported out of China into the global market. However, this export quality

TiO2 accounting for only about 10% of global capacity is really used in the highest end application such as automotive top coats and marine coating.

Slide 22 shows our competitive position in the global market. We deliver the highest value at the lowest cost of manufacturing in the entire industry. Our technology, decades of application know-how and cost structure provide us with an extremely unique and differentiated position in this market.

To maintain this competitive position of the world leader in this industry, we are focused on two strategic priorities, slide 23 highlights, the first strategic priority which is to provide our customers with offerings to meet our highest value application.

These applications are more demanding; require greater opacity and UV protection. In many cases, lot to lot product consistency is an absolute must due to the highly tuned processes of our customer and the quality that they are customers required.

Our decades of industry knowledge provide us with the capability to help improve our customer's process efficiencies in these demanding applications. Now, I want to go in more detail regarding the second competitive advantage.

Our industry leading cost position; beginning on slide 24, the DuPont chloride technology process provide a higher degree of oral feed stock flexibility higher energy efficiency and higher scale to yield better costs and capital productivity.

The results of many years of science and investment in our process technology have yielded the lowest costs position in our industry. Based on third party evaluations and our own estimates, we believe we have about a 30% cost advantage versus the other major global producers. This is enabled through our proprietary technology process where we are able to purchase a wide range of award; with PL to content as low as 60%.

However, our competitors using the core eye technology must purchase a more narrow range of ores from 85% to 95%. Some of these ores are naturally occurring but most often these are manufactured ores purchased from mineral companies that invest capital, energy, and fixed cost to beneficiate an ore and a furnace to produce a slag or a synthetic rutile. These additional processing costs are reflected in the large price difference that you can see between an ilmenite ore, slag or natural rutile.

As you could see on the slide, the spread of the price difference has increased dramatically in the past couple of years. The more expensive ores do contain more titanium, but when the prices are normalized for Ti to content the value of the ilmenite feedstock remains very clear. Our unique ability to use a broad spectrum of ores clearly provides a distinct competitive advantage.

DuPont facilities on average are larger than our competitors providing significant scale opportunities. Our long experience curve in Ti02 manufacturing provides the knowhow for high conversion efficiency and the energy efficiency of a one-step process is much higher than our competitors.

Lastly, DuPont benefits from much better capital and cost productivity with larger average line sizes allowing for a lot less steel and equipment for each kind of segment produced.

Moving to slide 25, these cost advantages create the opportunity for our DTT business to reinvest to reliably serve our customers. Including our planned Altamira Mexico expansion, as you may recall, we plan to add another 200,000 ton line to our existing facility. Our plan is to time this additional capacity to meet customer demand.

This additional capacity will only strengthen our advantage cost position due to two factors. First it’s a Brownfield expansion, so we require a less capital to install as we will be able to take advantage of the infrastructure we already have in place. Secondly and more importantly our Altamira site is our lowest cost producing facility on our entire circuit.

We are able to utilize the widest ranges of ores on this site, adding to our industry leading cost position, we can fully justify our investment in this facility purely on total cost benefits alone. In summary on slide 26, expect the performance chemical segment to deliver sales growth of 3% to 5% over the long term including the Ti02 cycle. Our long term operating earnings margin targets for the segment are 18% to 20%, returning to more historical norms.

So now let’s move to slide 27. We will take a critical eye in investing growth opportunities within advanced materials that provide high cash returns and further strengthen our unique competitive advantages these investments will include our own innovations focused bolt on acquisitions and joint developments from recent examples of these types of investments include the Innovalight acquisition within electronics and communications enhancing our PV portfolio and leading to a series of new product introductions. The MECS acquisition in S&P providing technology licensing capability and access to key developing region accounts. And the co-development of Opteon YF in performance chemicals introducing a new sustainable chemistry to the global refrigerants market these are just some great examples of what you should continue to expect from these businesses.

So with that overview I will hand it back to Carl and we can begin the Q&A session.

Carl Lukach

Okay we will go to our next Q&A session then same procedure.

Unidentified Analyst

But just curious as or if the potential for more bankruptcies in the solar panel space increases what you might be doing to de-risk your counterparty risk there depending?

Mark Vergnano

Let me ask Dave to answer that because there is obviously something he deals with everyday.

Dave Miller

When you mean counterparties you come at getting paid yes so we manage that very aggressively actually most of our sales in (inaudible) are actually cash in advance or a letter of credit so we have a pretty low exposure there that something we had to manage very aggressively as you might guess from the last couple of years, I do believe that consolidation will obviously strengthen the health of the remaining companies that is going on at a reasonable pace we would like to see it go faster because the probability of our customers is four it is a larger module manufacturers lost money last year and the year before made money in 2010 so that probably should take place you they get their cost down as they implement more of technology feel I can get help and consolidation is part of that.

Carl Lukach

Okay next question Kevin.

Kevin McCarthy - BofA Merrill Lynch

Kevin McCarthy, Bank of America Merrill Lynch Mark it seems to me you had previously have attenuated the timeline associated with the expansion of Altamura given the market conditions just this morning I saw a story that indicated that you ordered an E&C contract there that was 130 million in the story can you confirm that and maybe give us an update on the current timeline for that project and when we might see that capacity coming online.

Mark Vergnano

What we said before, we said we’re going to bring that online in 2015, that’s still the plan and yes you are right we have (NYSE:BC) and his team have been working with our partners and we did award the contract for onsite work.

Brian Maguire - Goldman Sachs

Question for (BC) just wanted to note you had an estimate for how much TiO2 demand was lost for good based on increase substitution and drifting from the price increases of last couple years and also increase acceptance of the Chinese part for last couple years and how long will it take the long term trend in demand to kind of recover that loss value.

Tom Powell

First, Chinese product supports TiO2 so there’s is really a no change in that TiO2 molecule for that. So, as Mark mentioned earlier on the our expectations is that the TiO2 market will continue grow GDP numbers and from then reason is because of the affect that as we know other better solutions for capacity for (inaudible) TiO2 molecule brings.

So no question, there is also a lot of opportunity they would describe on paper of about replacements attention and so on but those ideas have always been there, I mean it has been there 10 years ago, 20 years ago, 30 years ago. So, the number that are projected on the GDP base grow of idea really is based on the fact that they are good in the GDP based reason and on top of that there is also other new product been added to new applications noted for example use of eliminating and so on.

Above the fact that developing country actually grow TiO2 demand higher than (inaudible) reason the all pluses and minuses, the long term 30, 40 years trend TiO2 goes with the market as GDP. Therefore we do not see any permanent destruction of the demand or we see that by the stocking, destocking and over time that we’ll watch up and longer term there would be different GDP growth.

Brian Maguire - Goldman Sachs

Mark mentioned the million tones of Chinese capacity based on sulfate that has been added but there is another 1 million or 2 million tones that is potential in the next three four years out line. BC to comment, I know he is pretty close to the ground that is after capacity probable, what would you put the probable number of new Chinese capacity.

BC Chong

It’s going to be really has to be certain about this so (inaudible) lots of announcements and we are excepting some of these announcements to come through in our projection to the north discounting affect that will be a significant announcement, we’re projecting for the above 200,000 tons per year of addition into the industry. DuPont technology however I think has been officially not discouraging by the Chinese government. They have, you know, fighter planes (inaudible) that they preferred industry not investing southeast facility and on top of that they ask me because you know labor cost escalation that we’re applying China, electricity is higher in (inaudible) process, environment issue is (inaudible) the due (inaudible) product, so for all these reasons we believe that not all the announced expansion (inaudible) another 200,000 tons of (inaudible) will be coming through every year in our projection, it’s something that we look at every day and we accidently you know very conscious about that fact and our planes remain that we’re always the much lower cost in the healthy producers in China.

On top of that we’re going to be driving our value adding to our customers so that our product command also at premium in a pricing as well, so I think having said that you now not I’m Chinese by race and my second generation is in Singapore and I have lot of respect for Chinese of course but I really think that we’ve got a really good hand in BDT and with the low cost position we have there is branding more powerful in the market, we have got innovation that not that just in BDT but across the use of technology across for example we come up things like easy clean you know combing technology from Teflon in the DuPont so lot of things we have brought and I really feel like our hand is pretty good here.

PJ Juvekar - Citigroup

Two related questions on electronic. The first one is on photovoltaic it seems that it’s taking a little longer to turnaround and if China (inaudible) dumping duties on some of these products where do you see this business going. And secondly on OLEDS, I think you’ve mentioned if you get 10% penetration in the TV market it will be a $10 billion market opportunity, so why is you display growth only 3% to 5% a year?

Dave Miller

On TV dumping so the TV in Chinese dumping case is against poly silicon, assuming out on the dumping in general, the dumping right now is creating some discontinuity in the global supply chain, so if you look at the global capacity to about 50 giga watts TV module capacity, 40 GW for that is in China. So, the U.S. market where the dumping has not mentioned, the dumping was found last year, there is an issue they often back to and then Europe was in the middle of studying theirs as well. So if Chinese modules can’t make it into those two markets that leaves 40 GW chasing you know a much smaller problem for market. The U.S. market, the law was written that Chinese sourced sales are not, would have duties in the U.S., Chinese modules not I know it’s too complicate but the point is that it’s a backdoor approach. So, Chinese can source itself from outside China, make modules, sale in the U.S., no duty. So in the U.S., they have work around and they can change their supply chain they are okay. The Europe has written a lot later we don’t know how that will come but the entire Chinese modules and sales will be covered. So, there is a lot going on, it does create a lot of discontinuities that’s why we have said this year we see growth in GW as flat, there are people out there with the higher growth numbers than us and the big difference is in China. We have got 6 GW projected in China, some people said 10GW for China, that’s a pretty big number so as these dumping case get resolved this year, I think Mark mentioned this, its going to take about a year to get the stuff get lined out but getting pass that we still see GW grows 20%, materials 15%. On all leads, we mark this as a $2 billion not much at least a 10 but the $ 2 billion materials opportunity in 2018 based on 27 million TV. So, the growth rate of 3 to 5 we have showed is for TVs in general, so class as they are going away LCDs we believe will obviously start losing share over the time, so the overall growth rate TV is low. But if you look at the penetration of the all in the TVs its probably very-very high, so again the growth rate (inaudible) for TVs in general with GPS all its penetration very high.

Jeffrey Zekauskas - JPMorgan

I have a question on safety and protection, in that safety and protection margins that you show are 21% to 23% which is what they were 18 months ago but you now exclude your pension cost and I think the pension benefit is a little bit more than 500 basis points. So, for that business you are lowering your annualized PTOI by about 200 million. So (inaudible) your growth rate tamps down a little bit but that's not enough is it really pressure in aramids margins that lead you to lower your margin expectations or is it in some other part the business? Or can you explain that large dislocation?

Mark Vergnano

You're right Kev, the margin is lower between 400 and 500 basis points from that standpoint, it's primarily in the (inaudible) side I’ll let Tom talk you through that because it's in our DPT business and it's primarily in the aramid side as we realized it's a little more of a competitive market. We still think they're very good margin but it's a little bit more competitive and I'll let Tom talk to you about it, as well as the actions that we're doing (inaudible).

Tom Powell

Yes the aramid industry as Mark mentioned has actually shrunk over the last four years, so primarily on the industrial side industrial applications where aramids are used as we've seen fallout from China and from Europe it slowed down the growth of that industry, there has been emerging completion coming in but as Mark mentioned they are still pretty small, but it has put pressure on the margins for the next few years.

Mark Vergnano

From that standpoint, you know, that's primarily we've driving the actions that we’re doing we talked about whether it's new products into the market place or significant cost reduction, so as you all might remember in the third quarter last year we had a significant restructuring charge, primarily because as you moved DPC out of the company, we dealt with all that overhang. But in addition to that we used it as an opportunity to take out costs in other places, one of those places was in SMP primarily in DPT, and so we had a significant cost reduction there to be able to be a little bit more leaner and be able to be more competitive around it.

David Begleiter - Deutsche Bank

Mark, again on Kevlar, is it the ability to innovate in that space has it slowed over the last few years. You're sold out to (inaudible) the expansion the market shrinks from the past you've been able to innovate despite the market, have you lost that innovation ability and if you have how do you get back in Kevlar.

Tom Powell

I'll take that. No I don't believe we've lost it at all, now we have put a lot more resources into ramping that up. You know we've ramped up resources particularly in developing economies in China and in Eastern Europe around growth. The underlying issue we’ve had is the slowdown in the market over the past four years driven by that industrial peak, as well as the part in the US military which ties back to sequestration but we haven’t lost that capability, we're going to invest more in it going forward. We still think that underlying growth in that market's going to be in the 5-8% kind of range. It's just we've been through a four year flat period here, which we've seen a couple of times in our history, going back into the 1980's there had been three periods where we get this four or five flat period; that's what we're going through right now.

Mark Vergnano

David the only thing I've add is; I think there has been a little bit of a change in that; we always have high application development especially on a capital side sort of that lightweight of that business. But a lot of it was focused as Tom said in the US and Europe and we have now gone from more of our people out into Asia where we're seeing it; Southern India and China and other parts of Asia, where we see the highest growth rates and in Eastern Europe as well; that's where the growth is really happening so we have the shift, our balance of power if you will of our application development and shifted away as we were ramping up our (inaudible) facility. We focused a lot of attention on process technology because it is a very unique new process that we have and shifting it back over to the product side so I say it’s a geographic shift that you are seeing in right now.

David Begleiter - Deutsche Bank Research

Okay last question in this section; over the last few presentation, we keep hearing that you're evaluating business is based on the global prospects from here and cash returns. On those two criteria, could you rank the TiO2 aramids and PV businesses? Mark.

Mark Vergnano

I don’t think I can rank those Lawrence from that stand point, I think we look at opportunities holistically from that standpoint in terms of we're making investments as I mentioned on the TiO2 side, the investment we are making from a; if not for our capacity reason; it's really for; really we're getting a huge benefit out of cost and that business has a very distinct mission or us.

It generates cash right? So it throws off cash for the rest of the company. The other businesses we have, all have their distinct missions, whether its Tom's business in protection technologies or Dave in ENC; and inside of that mission, they have their own portfolios they managed. So, I think we do really good portfolio management as a company and then inside of each business, we try to manage those portfolio's as well.

And it's about where do we get the best return inside of it so it's hard to holistically rank those because you have to really look inside.

We have time for one more question in this section and I think Duffy you have had your hand up.

Duffy Fischer- Barclays Capital

Couple of questions on TiO2; if you held price steady today and costs steady today; raw material where you got normal volumes. Would your contribution be higher than what you have got; back into your 18-20% of long term margin goals? So your whole price steady with today, so basically to spread per unit of same cost in price of the same that you're going back to normal volumes with the contribution be higher than what you have got back into your normalized numbers overtime?

Mark Vergnano

BC is doing the math.

BC Chong

It’s really hard to - going through the question, that mean, and I think it is really important to recognize that, well I don’t think your question, but I think for price to steady and for the volume to stay steady is not as common; because it’s a bit unusual event. So I don’t think they have ever done the math to say that this is the case that is likely. Yes, the thing I will say to you is that I think that’s really important you know in this business is that, our cost position; like through public available data, from the quarterly report from our competition and so on, we benchmark them all the time. And we know that we have got as good as a 30% cost advantage over them. So I think the way we thing about it is that as long as your cost advantage is substantial I think any price level, as long they are sustainable and obviously within it we are very-very strong in this industry. And the last thing I will say that as far as volume is concerned I think given that you have got a very-very strong cost position that you have and plus the effect that our market position is very strong to in terms of our innovation, in terms of our ability to work with customers and so on. And we are the most recognized brand the market; we are a standard in terms of quality and service. So I think we got high confident that we can grow this market and on top of that we can grow it profitably because our cost position is substantially better than competition and that includes the Chinese EP by the way.

Duffy Fischer- Barclays Capital

So then you have talked about 30% cost advantage versus the other chloride western guys. If that bubble you put on there with a five top Chinese guys that are Sulfate, what would you guess your advantages in cost versus them?

Mark Vergnano

Versus the southeast producers from China; a couple of things (inaudible). One is that there are about 50 plus different producers in China so that’s one thing that’s we got to recognize. Many of them are actually very small producers. There are 15,000 tons, 20,000 tons, 30,000 ton producers. So out of the majority of those having a very-very big position, much better than our position; and then as you goes back to earlier question as you have mentioned that loss of investment as we are now, actually more than half of those investments (inaudible) but actually from the smaller players end up on that large players and that’s (inaudible) speak to the likelihood of all the capacity coming on screen. Even they do, how likely are they going to be competitive? So we got them - so whether the top five which you now questioned we do not have audit data in the public basis, so it’s really hard to give you a definite answer. I will see that our positions on average basis, based on what we know and from published data, for IPLs and so on; we got a position that’s relatively stronger in the range of 10% today. And that range will only increase for a couple of reason because labor cost is going to increase substantially, faster than where DTT is located. Electrical cost is going to, electricity cost will increase faster as well environment probably increased cost as well so for all those reasons I think we only believe that our advantage will actually stretch overtime and that is why we feel very comfortable with the position that we are in.

Dave Miller

I think probably just a follow up I think Ellen said it well before I think we are very confident of our position with this business from a standpoint we are industry leader we have the cost position we believe we have advantage products we think we have an advantage process and as you are sort of alluding to the issue that we are trying to manage as a management team is the volatility of that business that is a negative of this business that we are trying to sort through so from the fundamentals of the business we believe we have distinct competitive advantages and what we have to work on as a management team is how do we not let that volatility of that business affect the volatility of DuPont.

BC Chong

And if I just maybe add one more thing which I think is very helpful to remember I think Ellen mentioned that through the year cycle even at the bottom of the cycle this business returned substantially more than the cost of capital and at the same time from published data of the results so you can see that many of the suppliers of (inaudible) see the majors or even the Chinese producers so many of them are pretty much in the first quarter this year at a breakeven level while (inaudible) is still continuing to deliver well above cost of capital (inaudible) to the extent of level of cost competitiveness that the DTT brings to the industry.

Carl Lukach

Thank you all team that concludes this section of the program we will now move to the last section which is about 25 minute Q&A with all of the presenters today Ellen and Nick if you would come forward and Jim and Tom and join Mark up here and we will have 25 minutes more of Q&A. Okay our first question is right here in the middle.

Unidentified Analyst

(Inaudible) Capital I am wondering after this episode in China with the theft of the plans of your plant you are not the only company this has happened to excuse me I follow another company that was really destroyed by a similar event so in terms of China being a critical part of your growth plans can you discuss how you are going to revise how you are doing business in China as a result of that and can you give us an update on the suit or whatever that’s going on?

So in general as you know we are very active in defending our intellectual property from anybody and everybody who would like to misuse it. There is republication in TiO2 that’s yet did not occurred in China, that’s have occurred in the United States and hence court cases is in the state of California.

So, in changing how we do business, we do business in China in a very exact way by each business determining what technology we use, determining how we access the market and who are partners are and that’s something that we take and spend a lot of high demand to make sure that we’re building on our position in the right way. As probably property protection does everybody has had up their gain over the last decade, whether it’s in from the standpoint of retire age or ex-employees, from the standpoint of our on IT system.

There is just a tremendous amount of investment and focus on not only the responsibility of our employees but also in creating the appropriate defenses in our IT system. The network we’ve worked that we are involved in everyday, we take it very seriously and as I have been very public and saying is that we will aggressively go after anyone, anywhere in the world who we believe is misusing our technology.

Mark Vergnano, you have update on that specific issue.

Mark Vergnano

No. I think obviously it’s a legal process that we’re going through and I think Ellen said it extremely well, we work very hard to make sure we don’t lose technology and if for some reason we do, we’re very aggressive in terms of how we have to deal with that and wherever that (inaudible).

Unidentified Analyst

Two questions, one on overall earnings good and a couple of segments questions. Ellen you’re guiding up to 2% to 7 % increase for the overall year yet you’re down in the first half, so what gives you the confidence that you’re going to have some industrial recovery in the second half of the year that would give you up earnings year-over-year and so you somewhat backend loaded there. And from the improvement in S&P and also in Ag, are those also backend loaded over the five year timeframe what kind of industrial growth you need to get that six point improvement in S&P margins.

And Jim, what drives that 2 point difference in ag margins?

Ellen Kullman

The second half of the year, it become year-over-year or certainly easier in the first half the year, we have very strong performance and electronic and communications and in performance come up over in the first half of the year and obviously we do not have that in second half of the year. So, to take a look from the comp standpoint, the year-over-year gets better, here environmental there macro areas that are also improving the second half of the year if you look at what automobile are doing, as you look at (inaudible) versus what they’ve got, so there were lot of indicators that indicates that the volume is coming through the third quarter or fourth quarter will be higher in order to be able to make the yearend number for whether it’s an automotive growth or industrial production, induction production you know lags in first quarter and its effected to catch us, so Nick why don’t you talk about…

Nick Fanandakis

I think that’s right I mean when you look at industrial production we’re still anticipating 2.5% growth in industrial production for the full year in the first quarter when you look at we’re at 1% sort of annualized kind of rig, you look at automobile down 1.5% in the first quarter growing now up twice add in the second quarter and about 2% to 3%, 4% for the year, so lot of things from a macro perspective are going to improving in that second half of the year.

Jim Borel

You know on the Ag market (inaudible) wouldn’t affect those (inaudible) the couple of things first of all the primary driver is going to be bringing that new technology to that new value (inaudible) and that’s a key part of the margin expansion overtime and you saw the pipeline. The second thing is the - you would have a bit margin headwind as you know with the (inaudible) seeds side with lower seeds and high commodity prices last year. If you assume some return more normal season that should help mitigate things in the near term, so with we so much expected that can be loaded this year.

Unidentified Company Representative

And then Don on that SMP side, as I mentioned the third is that cost reduction which we have completed and now it’s flowing through. The biggest next piece will be the asset utilization as we see our volumes increase and we’re starting to see a slight steady increase in that volume so we’re half at the second half better as I mentioned before with the asset that we have in SNP, asset unitization is very important in terms of getting those margin.

Unidentified Analyst

Nick, we all know the challenges related to pension from the accountings whether reported earnings or cash flow, how much consideration has been given to shift one way another (inaudible) define contribution plan versus define benefit plans?

Nick Fanandakis

We’ve made that shift. We’ve made that shift in 2007 where we discontinued on the shift into defined contribution. There is still some accumulation in the define benefit but its minor dispute of the grandfather portion of it, so we’ve already made that shift.

Unidentified Company Representative

In the U.S. and around the world we continue to shift country by country as we are able to move those program so this a trend that is going to be complete in the next year or two from a global prospective.

Unidentified Company Representative

And over the time, you will start to see that liability drop as a result of this.

Carl Lukach


Mike Ritzenthaler - Piper Jaffray & Co.

From margins in developing result, Nick, you have mentioned increasing penetration for volume growth. What has been specifically done to drive up margins in developing regions to parity? Is that a goal and is it just volumes to grow into the structure that’s already in place, or is there something more fundamental like a sales mechanism?

Nick Fanandakis

If we put the innovation centers in additional geographies we are doing value selling, we are doing application development and the business in the developing economy that starting to look more and more like a business in other parts of the world. We understand the value we create, we share that value in a way that we capture more for ourselves. So the business and the way we go about doing the business in the new geographies is looking a lot like they were doing in (inaudible) more than we’ve seen that in the margins and the numbers.

Ellen Kullman

Well I think Tom is being a little modest here. I mean he has driven a lot of the innovation centers, the 11 centers that I have talked about and I did this one in Bangkok two months ago, and the CP foods example and saw firsthand how those centers were connecting locally to customers and bring all our businesses together to help CP become a more successful company is really driving our penetration and also the advancement in terms of the sophistication of the application on an increasing rate. So I think this innovation centers are really critical to our continued progress there.

Kevin McCarthy - BofA Merrill Lynch

Nick, in your prepared remarks you discussed some criteria for M&A and you highlighted high cash returns on investment and high growth. My question is what are your criteria for divestment, is it simply the opposite of those two things or are there other factors such as volatility, commoditization that are meaningful in your view and maybe you can elaborate on the nature of your process for evaluating this, is it a formal process, how frequently is it done.

Nick Fanandakis

So it’s a continuous process. When we look and evaluate our portfolio of businesses we're doing this all the time. And we're doing it versus our competitive set we're doing it as to how well they're being benchmarked and how well they're performing against that competitive set. Are they achieving all of the objectives that we have set for them, and not only are they achieving most objectives but again back to the competition because, we may see, set an objective and if the competitive set is doing even better we look for the businesses to do even better in that regard. Ultimately it comes down to what provides the greatest shareholder value, so when a decision is being made, when we looked at performance coatings, we were looking at performance coatings over a period of time, like I said this is a continuous process and when it reaches a point where greater shareholder value can be created through a divestiture then you have to move forward in that regard, and so that's what catalyzed us to make the decision in performance coatings as when greater values can be achieved through the divestiture versus continuing to run the facilities.

Ellen Kullman

And our expectation is that we in the office of Chief Executives do it from an overall company portfolio, the business presidents are responsible for doing it within their portfolio, a product line that's commoditizing. Does it create more value by exiting that and using those resources someplace else? I mean crop protection chemical had several examples of that in the last couple of years, where they're in that active product line management, a lot of that you don't really see unless it's in actual sales; some of that are exits; some of that are maybe licensing deals and things like that. But we expect a portfolio to be managed very in a defined way at the product level and then at the corporate level and I think it's that pace that we used that we continue to drive that really gives us great understanding into where the strengths of the companies are and where we want to go.

Mark Gulley-BGC Partners

Two questions with respect to electronics and PV; the biggest margin boost in your plan is in electronics and communication; back to historical levels; what gives you the confidence particularly given the having a margin in the last just the best two years and then secondly with respect to PV; is the 15% goal, sales or volumes? To suffice down to PV, I think it is going to be pretty significant to acknowledge that you need good parody to do if the data costs come down. So not a great environment for pricing I wouldn’t think.

Unidentified company representative

So, I think the first piece of that is we'll get those confidences is really those three areas that we talked about for consumer electronics as well as PV as well as this play side and I think all of them. I think Dave mentioned, I think there is a compelling case for PV, I think there is an absolute compelling case of why that's going to grow as an industry over the next five, ten, twenty years. So we feel very confident about that. We feel very confident about our position in there and we really about it as from a material side of volume from that perspective to your other piece. But don’t underestimate the display side that we talked about, we have some unique enabling technology on the display side as always that its really going to kick into another year as always become to standards for TV's and then the third piece is consumer electronics; so I think we have three legs; three very solid legs for growth and that gives us a lot of confidence going forward.

P.J. Juvekar- Citi Group

Hi, P.J. Juvekar from Citi Group; Ellen you just mentioned something I was going to ask about was that you can use this free cash flow from some of the cash comp businesses; to grow your high growth businesses. This is a fine strategy but it depresses your multiples; you start getting consumer at multiple. If you get a clean break, you will get a better multiple, so how does that multiple sort of factor come into your decision making?

Ellen Kullman

Obviously each business depending on what industry you’re in has its own unique set of characteristics and competitive sets, right, that establishes a value there; right, or multiple there. And we do take a look at that as we make projections out; I think one important part is that if you look at the decision like on the codings business; we couldn't figure how science could make, be it differentiating factor to allow it to produce extraordinary results in its competitive set, right? It was an average player. And so from that standpoint, there are probably others who would evaluate more than we did and that's what we found out if we went through the processs.

So I think you have take it all into consideration because even in industries, you know that have different multiples, you can get other leverage points in terms of our margins, in terms of things like that where we can put a superior result. So we do take that into account. We do understand the impact that has as we look for short terms and long terms on how we are going to create shareholder value.

Mark Conelly - CLSA

Ellen, if we could strip out macro and just think about productivity and innovation, which of your businesses are meaningfully ahead of where you thought they would be on those two metrics and which were meaningfully behind versus 18 months to go. And I know it’s hard to strip out the macro, but this is an innovation company.

Ellen Kullman

You know actually my team would probably tell you that I am never satisfied though, that they are always behind. But I don’t think I am quite that harsh. I think I am really, first of all I think that they have all made progress. I think we have made tremendous progress at an accelerated rate in agriculture. And I think that’s the fundamentals of what we have been investing in over the last decade. And the team that we have there, between the pipeline in crop protection and the advances that we have at pioneer. So tremendous progress there. I always believe they can do more. I think the Danisco acquisition was really critical at establishing that solid base in nutrition and health and in the industrial biosciences. I know we have been talking about industrial biosciences for a while. I mean now we have got real revenue, and we got real program, and we have got real confidence in our ability to make that, make a meaningful difference in our company; not only in that segment, but also in Diane’s segment and in other places like that in a company.

I think that they can go faster, I always do. And they have those goals, I mean both Craig and Jim understand exactly what our expectations, my expectation is there. I think on the safety and protection side, yes, I am disappointed. I think even if you strip away the macros, I think we could have done something differently and faster, I mean poor Dave, you know and from electronics and communication side as well. You know lumpy business isn’t something that we can enjoy, well he does enjoy. But I will tell you from a technology side, I think the progress is made, and unless it’s been significant, and I think it will be impactful from our company.

I think if you look at Performance chemicals, you have got Opteon, I mean new generation of technology, and the new generation technology and core polymers that are going well, I don’t think the macros are helping us there in Ti02 to maintain that cost position, and maintain that difference between us and our competitive set is critical for us to continue to generate the cash. So the bar gets raised every year and I think and anytime I learn something right you got to adjust it is hard to strip out the macros. But I do think one thing that I demand is that we use the key learnings from whether it is a research programs or capital program or go to market program that did not turn our as we expected and we learn from it we adjust and we go forward to beat the competition. Because at the end of the day if we can use our science to beat the competition we will do very well and I think that has to be that is part of our process that we continually use.

Unidentified Analyst

This is a more general question about what disclosures you are going to make going forward because there is no doubt this is an innovation story. But if you look across the chemical industry and the other industry there are few examples of companies that have actually generated great returns through aggressive R&D programs. Any metric you give us is a full year sales from new products which I think isn’t terribly helpful because as you readily admit it includes cannibalization of existing products. Have you given some thought to providing more granularity around your R&D programs so that we can get a better sense for the incremental returns you are making on the significant investment that is going into these products?

Nick Fanandakis

Okay absolutely that is the direction that we are going. We talked about a significant number on our pipeline chart today; 25 of our top 100 projects. We talked about the incremental revenue that we expect over the next four years time horizon coming from those projects and we will continue to talk more about that we are highly differentiated and we report our expenditure on a segment by segment basis so that you have a sense of where the money is going. It is certainly heavy investment in the agriculture space where as Jim said, we are quite happy with the return we are getting there. We talked what we are doing in nutrition and health what we are doing in industrial biosciences. So we intend to get more granular in the way we approach it including adding new metrics to allow you to make that assessment more clearly. And certainly it has been a major focus of Doug Muzyka as he has come in to the role Chief Technology Officer to help you to make those judgments and make your own assessment.

Ellen Kullman

Yes so we have shown a glimpse of that and you can see it in share in places like in Pioneer very clearly and what we have done in soy and corn. You can see it in the kind of numbers that Tom talked about whether it is 7 billion on a risk adjusted basis in new revenue new revenue by 2016. You can see it in what Mark talked about, about what we would expect in revenue from OLEDs or that we have given you proof points today around that hopefully as we continue to advance the science and understand what it truly can deliver.

Unidentified Analyst

If I could follow up with just Nick said in his first slide which is about the return on the R&D. So, just talking about sales and often disguised what’s really going on underneath. But you’ve got the cost of the R&D, you’ve got cost of whatever capital was substituted or taken offline. So, understanding that you’re getting a real return on that investment, I think is what we’re missing.

Tom Connelly

That maybe just a comment there, we can take a look on any individual project, we do look at projected economics about it, what we’re going to spend, what we expected to be return. You can only really come to a conclusion on it individual project at the end of the project. So it’s not very helpful when you things in place. But you’re good in taking a measure in everything we measure is one way or another a surrogate looking to answer the question, are we getting an attractive return on R&D expense everyone of metrics is really targeted towards helping us get an asset back.

On an individual project we can only do that estimate back. When you take a look at the whole portfolio in the (inaudible), you know how much you’re spending, you know how much new revenue is coming from that, you know what’s margin is on that, you can get essence of whether or not you’re generating an attractive return from the overall portfolio and that’s really what we spend our time doing and that’s what we try to measure.

Nick Fanandakis

Let me add one more thing, Tom if I could. So, as Tom said, every individual project we’re looking at in detail, all the metrics around the return of that, in R&D project to any significance would be looking at that. So, we have the detail metrics in between, when you look at proof point for the investment community to see, I would refer to the margin change we’re talking about from our 12 base now and what we’re talking about those long term margins. Because those margin improvements are been driven through that innovation, and through that R&D, that’s the main driver there. And so, as you see a start to realize those margins, those long term targets, it’s a proof point of our R&D paying off for us.

Unidentified Analyst

I have a Ag question for either Ellen or Jim. Over the last couple of months, industry wide things like we’ve seen in increasing the cross licensing and collaboration. So, my question is do you think we’re entering a period of sort of reduced competitive pressure in the industry and do you think that will allow you to offset some of the increased royalty should happen some of the licensing.

Ellen Kullman

I don’t think there is going to be any reduced competitive pressure but Jim, why don’t you (multiple speakers).

Jim Borel

Yes. I agree with Ellen, I don’t see any reduction in competitive pressure. But, as I think I mentioned, we’ve a (inaudible) announced recently so it seems like comment to everybody but this is not on comment. Everybody out there is marketing something that’s in licensing and I think everybody has something that's proprietary as well. So it’s I think hopefully increased collaboration on getting technology to the market. But at the end of the day the real competition is product to deliver value to farmers, whether that's through crop protection of seeds, and that's where the real competition is happening and that's why we feel good about our growth prospects.

Ron Fisher - U.S. Steel & Carnegie Pension Fund

Ron Fisher, U.S. Steel & Carnegie Pension Fund. As you look at your mix of businesses, the secular growers, the more cyclical type of play, do you have today, do you have the mix down where you're wanted. The growers require cash, but if you don’t have enough of them, it doesn’t move the needle in the top line. If you don’t have enough on the cyclical side, maybe you don’t have enough cash to invest in the grower. So I guess based on what you've got today, are you happy with that or if that still needs work?

Ellen Kullman

No, I don’t think the portfolio is done, if that's the question. And I'm not sure if it's ever done, because it's not about the same rate and we continue to have to generate the earnings in cash even if you’re growing. There's no dig in a big hole. I do think it's the mix of that, more importantly can we really bring science to differentiate it in the competitive landscape, and can we generate the peer returns to the competition? So I don’t think the portfolio is done, we continue to look at it in terms of what we should bring in, what is not maybe achieving its goal and we'll continue to adjust and that is a very big part of job that the senior leadership team of the company is engaged in.

Chris Nocella - RBC

Nick, you have a lot of cash in the balance sheet, so you mentioned most of its overseas. So can this cash be used to make an acquisition? And if not, how do you view your body to increase your leverage and maintain a A rating if the right opportunity came about?

Nick Fanandakis

Firstly cash that's overseas certainly can be used for a lot of things. It can be used for acquisitions, it could be used for construction of the innovation centers that we've been building across the globe. It can be used for additional capital projects beyond just innovation so as in production facilities. So certainly the cash that is overseas has a definite need and use, and is being fully utilized. And what was the second part Chris?

Chris Nocella - RBC

Your ability to increase leverage if the right opportunity came about.

Nick Fanandakis

Well, the strong balance sheet position that we have enables us to have access to capital right now at very attractive rates. And our ability to increase leverages certainly there for us because of the strong balance sheet, I mean, you look at the fact that we went through in this co-acquisition, $7 billion acquisition and we’re able to maintain our A/A2 rating, I think it speaks a lot about the strength of the balance sheet.

John Roberts - UBS

If anyone can find a way to enjoy a long-peak business it’s Dave Miller. The Ethylene Copolymer business you’ve mentioned earlier kind of coming down off the chief feed stock advantage that you had little bit here. But can you grow that business faster over the next 2-5 years that is going to be a fair amount of ethylene capacity coming into North America and I haven’t heard any plans related to step up the growth rate in the ethylene copolymer portfolio?

Unidentified Company Representative

Sure excellent we’re interested in growing that business and we have been growing that business outside the US. Keep mind that we don’t produce commodity polyethylene or polypropylene, we don’t have business in our portfolio that index the feed stock price. We’re value sellers with specialty ethylene copolymers, so it’s a great business for it. A lot of differentiation. It’s used in packaging, in food packaging, high valued uses in multi layer packaging. As developing economies develop, there is the interest in convenience in packaged food increases. These are huge opportunities for us, so we definitely have a growth orientation. We don’t think that growth orientation translates into the need for a lot of investments and successes. There may be a time down the road where called on due that but we see opportunities that continue to grow including our volume without substantial requirements for new large investments.

Unidentified Company Representative

Okay thank you everyone, this does conclude our program for the day. I want to thank all of our for being here and specially the 100s or so we heard on the web. I’d like to alert you to the fact we’re participating in five investor conferences over the next 4 weeks, all in New York. We hope to see you there and hope you take advantage of the time with our executives there. A special thank you, there is a gentleman in the room who has followed DuPont for 30 years and has just recently announced his retirement. And I want to call him out and say a special thanks from the management team at DuPont Bob (Goodoff) from Boston. Thank you Bob.

Please stay for lunch. Lunch is in the backroom and you can go around with our executives and we’ll see you in the New York, thank you.

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