FORM 10-K



(Mark One)
ý		ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, ~~2010~~2013
OR
o		TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 1-815

E. I. DU PONT DE NEMOURS AND COMPANY

(Exact name of registrant as specified in its charter)



DELAWARE (State or Other Jurisdiction of Incorporation or Organization)		51-0014090 (I.R.S. Employer Identification No.)

1007 Market Street

Wilmington, Delaware 19898

(Address of principal executive offices)

Registrant's telephone number, including area code: 302-774-1000

Securities registered pursuant to Section 12(b) of the Act

(Each class is registered on the New York Stock Exchange, Inc.):

Title of Each Class

Common Stock ($.30 par value)

Preferred Stock

(without par value-cumulative)

$4.50 Series

$3.50 Series

No securities are registered pursuant to Section 12(g) of the Act.

Indicate by check mark whether the registrant is a well-known seasoned issuer (as defined in Rule 405 of the Securities Act).

Yes ý No o

Indicate by check mark whether the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No ý

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ýo

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act.



Large accelerated filer ý	Accelerated filer o	Non-accelerated filer o	Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No ý

The aggregate market value of voting stock held by nonaffiliates of the registrant (excludes outstanding shares beneficially owned by directors and officers and treasury shares) as of June 30, ~~2010,~~2013, was approximately ~~$31.3 billion.~~

$48.4 billion.

As of January 31, ~~2011, 921,634,000~~2014, 927,717,000 shares (excludes 87,041,000 shares of treasury stock) of the company's common stock, ~~$.30~~$0.30 par value, were outstanding.

Documents Incorporated by Reference

(Specific pages incorporated are indicated under the applicable Item herein):



		Incorporated By Reference In Part No.
The company's Proxy Statement in connection with the Annual Meeting of Stockholders to be held on April ~~27, 2011~~ 23, 2014.	III

~~Table of Contents~~

E. I. du Pont de Nemours and Company

Form 10-K

Table of Contents

The terms "DuPont" or the "company" as used herein refer to E. I. du Pont de Nemours and Company and its consolidated subsidiaries, or to E. I. du Pont de Nemours and Company, as the context may indicate.

					~~Page~~


~~PART I~~			Page
PART I
	Item 1.	Business	~~Business~~		2
	Item 1A.		Risk Factors		68
	Item 1B.		Unresolved Staff Comments		911
	Item 2.	Properties	11 ~~Properties~~		10
	Item 3.		Legal Proceedings		12
	Item 4.	Mine Safety Disclosures	~~Removed and Reserved~~		12
PART II
	Item 5.		Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		13
	Item 6.		Selected Financial Data		15
	Item 7.		Management's Discussion and Analysis of Financial Condition and Results of Operations		16
	Item 7A.		Quantitative and Qualitative Disclosures About Market Risk		4738
	Item 8.		Financial Statements and Supplementary Data		4939
	Item 9.		Changes Inin and Disagreements With Accountants on Accounting and Financial Disclosure		4939
	Item 9A.		Controls and Procedures		5039
	Item 9B.		Other Information		5039
PART III
	Item 10.		Directors, Executive Officers and Corporate Governance		5140
	Item 11.		Executive Compensation		5241
	Item 12.		Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		5342
	Item 13.		Certain Relationships and Related Transactions, and Director Independence		5442
	Item 14.		Principal Accountant Fees and Services		5442
PART IV
	Item 15.		Exhibits and Financial Statement Schedules	43
SIGNATURES			5546
~~Signatures~~					58

Note on Incorporation by Reference

Information pertaining to certain Items in Part III of this report is incorporated by reference to portions of the company's definitive ~~2011~~2014 Annual Meeting Proxy Statement to be filed within 120 days after the end of the year covered by this Annual Report on Form 10-K, pursuant to Regulation 14A (the Proxy).

~~Table of Contents~~

Part I

ITEM 1. BUSINESS

DuPont was founded in 1802 and was incorporated in Delaware in 1915. DuPont ~~is a world leader in~~brings world-class science and innovation across a range of disciplines, including agriculture and industrial biotechnology, chemistry, biology, materials science and manufacturing. The company operates globally and offers a wide rangeengineering to the global marketplace in the form of innovative products, materials and ~~services~~services. The company believes that by collaborating with customers, governments, non-governmental organizations and thought leaders it can help find solutions to such global challenges as providing healthy food for ~~markets including agriculture~~people everywhere, decreasing dependence on fossil fuels, and ~~food, building~~protecting life and ~~construction, electronics and communications, general industrial, and transportation.~~the environment. Total worldwide employment at December 31, ~~2010,~~2013, was ~~approximately 60,000~~about 64,000 people.

The company consists of 13 businesses which are aggregated into seven reportable segments based on similar economic characteristics, the nature of the products and production processes, end-use markets, channels of distribution and regulatory environment. The company's reportable segments are Agriculture & Nutrition, Electronics & Communications, Performance Chemicals, Performance Coatings, Performance Materials, Safety & Protection, and Pharmaceuticals. The company includes certain embryonic businesses not included in the reportable segments, such as Applied BioSciences, and nonaligned businesses in Other.

~~Information describing the business of the company can be found on the indicated pages of this report:~~

~~Item~~		~~Page~~

~~Segment Reviews~~
	~~Introduction~~	25
	~~Agriculture & Nutrition~~	26
	~~Electronics & Communications~~	28
	~~Performance Chemicals~~	29
	~~Performance Coatings~~	30
	~~Performance Materials~~	31
	~~Safety & Protection~~	32
	~~Pharmaceuticals~~	33
~~Other~~		34
~~Geographic Information – Net Sales and Net Property~~		~~F-47~~
~~Segment Sales, Net Sales, Pre-tax Operating Income and Segment Net Assets~~		~~F-48~~

The company has operations in more than 90 countries worldwide and about 6560 percent of consolidated net sales are made to customers outside the United States of America (U.S.). See Note 21 to the Consolidated Financial Statements for additional details on the location of the company's sales and property.

Subsidiaries and affiliates of DuPont conduct manufacturing, seed production or selling activities and some are distributors of products manufactured by the company.

~~Acquisition~~ As a science and technology based company, DuPont competes on a variety of ~~Danisco~~

~~In January 2011, DuPont~~factors such as product quality and ~~its wholly owned subsidiary, DuPont Denmark Holding ApS, entered into a definitive agreement for~~performance or specifications, continuity of supply, price, customer service and breadth of product line, depending on the ~~acquisition~~characteristics of ~~Danisco A/S (Danisco) for $6.3 billion, which includes $5.8 billion in cash~~the particular market involved and the ~~assumption of $500 million of Danisco's net debt. The transaction~~product or service provided. Most products are marketed primarily through the company's sales force, although in some regions, more emphasis is subject to customary closing conditions, including certain regulatory approvals and the tender of more than 90 percent of Danisco's shares in the tender offer. DuPont has the right to waive such tender offer conditions and accept a lesser number of shares in certain cases. The transaction is expected to close in the second quarter 2011.

Danisco is a leading technology-driven organization, with outstanding research and application development capabilities in biotechnology. Danisco has specialty food ingredients, including enablers, cultures and sweeteners, which generate about 65 percent of its total sales. Genencor, its enzymes division, represents about 35 percent of its total sales. DuPont and Danisco are joint venture partners in the development of cellulosic ethanol technology. (See Applied BioSciences business discussionplaced on page 34 for more information.) Danisco has nearly 7,000 employees globally with operations in 23 countries. Upon completion, the transaction would establish DuPont as a clear leader in industrial biotechnology with science-intensive innovations that address global challenges in food production and reduced fossil fuel consumption.

~~Table of Contents~~

~~Part I~~

~~ITEM 1. BUSINESS,~~~~continued~~

~~Sources of Supply~~

sales through distributors. The company utilizes numerous suppliers as well as internal sources to supply a wide range of raw materials, energy, supplies, services and equipment. To ensure availability, the company maintains multiple sources for fuels and many raw materials, including hydrocarbon feedstocks. Large volume purchases are generally procured under competitively priced supply contracts.

On October 24, 2013, DuPont announced that it intends to separate its Performance Chemicals segment through a U.S. tax-free spin-off to shareholders, subject to customary closing conditions. The company expects to complete the separation about mid-2015.

In third quarter 2012, the company entered into a definitive agreement to sell its Performance Coatings business (which represented a reportable segment). In accordance with generally accepted accounting principles in the U.S. (GAAP), the results of Performance Coatings are presented as discontinued operations and, as such, have been excluded from continuing operations and segment results for all periods presented. On February 1, 2013, the sale of Performance Coatings was completed.

Business Segments

The company consists of 13 businesses which are aggregated into eight reportable segments based on similar economic characteristics, the nature of the products and production processes, end-use markets, channels of distribution and regulatory environment. The company's ~~wholly owned subsidiary, Pioneer Hi-Bred International, Inc. (Pioneer), operates~~reportable segments are Agriculture, Electronics & Communications, Industrial Biosciences, Nutrition & Health, Performance Chemicals, Performance Materials, Safety & Protection and Pharmaceuticals. The company includes certain embryonic businesses not included in the reportable segments, such as pre-commercial programs, and nonaligned businesses in Other. Additional information with respect to business segment results is included in Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, on page 21 of this report and Note 22 to the Consolidated Financial Statements.

Agriculture

Agriculture businesses, DuPont Pioneer and DuPont Crop Protection, leverage the company's technology, customer relationships and industry knowledge to improve the quantity, quality and safety of the global food supply and the global production agriculture industry. Land available for worldwide agricultural production is increasingly limited so production growth will need to be achieved principally through improving crop yields and productivity rather than through increases in planted area. The segment's businesses deliver a broad portfolio of products and services that are specifically targeted to achieve gains in crop yields and productivity, including Pioneer^® brand seed ~~industry~~products and well-established brands of insecticides, fungicides and herbicides. Research and development focuses on leveraging technology to increase grower productivity and enhance the value of grains and soy through improved seed traits, superior seed germplasm and effective use of insecticides, herbicides and fungicides. Agriculture accounted for approximately 50 percent of the company's total research and development expense in 2013.

Sales of the company's products in this segment are affected by the seasonality of global agriculture markets and weather patterns. Sales and earnings performance in the Agriculture segment are significantly stronger in the first versus second half of the year reflecting the northern hemisphere planting season. As a result of the seasonal nature of its business, Agriculture's inventory is at its highest level at the end of the calendar year and is sold down in the first and second quarters. Trade receivables in the Agriculture segment are at a low point at year-end and increase through the northern hemisphere selling season to peak at the end of the second quarter.

Pioneer is a world leader in developing, producing and marketing corn hybrid and soybean varieties which improve the productivity and profitability of its customers. Additionally, Pioneer develops, produces and markets canola, sunflower, sorghum, inoculants,

Part I

ITEM 1. BUSINESS,continued

wheat and rice. As the world's population grows and the middle class expands, the need for crops for animal feed, food, biofuels and industrial uses continues to increase. The business competes with other seed and plant biotechnology companies. Pioneer seed sales amounted to 23 percent, 21 percent and 19 percent of the company's total consolidated net sales for the years ended December 31, 2013, 2012 and 2011, respectively.

Pioneer's research and development focuses on integrating high yielding germplasm with value added proprietary and/or licensed native and biotechnology traits with local environment and service expertise. Pioneer uniquely develops integrated products for specific regional application based on local product advancement and testing of the product concepts. Research and development in this arena requires long-term commitment of resources, extensive regulatory efforts and collaborations, partnerships and business arrangements to successfully bring products to market. To protect its investment, the business employs the use of patents covering germplasm and native and biotechnology traits in accordance with country laws. Pioneer holds multiple long-term biotechnology trait licenses from third parties as a normal course of business. The biotechnology traits licensed by Pioneer from third parties are contained in a variety of Pioneer crops, including corn hybrids and soybean varieties. The majority of Pioneer’s corn hybrids and soybean varieties sold to customers contain biotechnology traits licensed from third parties under these long term licenses.

Pioneer is actively pursuing the development of innovations for corn hybrid, soybean varieties, canola, sunflower, wheat and rice based on market assessments of the most valuable opportunities. In corn hybrids, programs include innovations for drought and nitrogen efficiency, insect protection and herbicide tolerance. In soybean varieties, programs include products with high oleic content, multiple herbicide tolerance and insect protection.

Pioneer has seed production facilities located throughout the world. Seed production is performed directly by the ~~company~~business or contracted with independent growers and conditioners. ~~The company's~~Pioneer's ability to produce seeds primarily depends upon weather conditions and availability of reliable contract growers.

Pioneer markets and sells seed product primarily under the Pioneer^® brand but also sells and distributes products utilizing additional brand names. Pioneer promotes its products through multiple marketing channels around the world. In the corn and soybean markets of the U.S. Corn Belt, Pioneer^® brand products are sold primarily through a specialized force of independent sales representatives. Outside of North America, Pioneer's products are marketed through a network of subsidiaries, joint ventures and independent producer-distributors.

DuPont Crop Protection serves the global production agriculture industry with crop protection products for field crops such as wheat, corn, soybean and rice; specialty crops such as fruit, nut, vine and vegetables; and non-crop segments, including forestry and land management. Principle crop protection products are weed control, disease control and insect control offerings. Crop Protection products are marketed and sold to growers and other end users through a network of wholesale distributors and crop input retailers. The sales growth of the business' insect control portfolio is led by DuPont^TMRynaxypyr^®insecticide, a product that is used across a broad range of core agricultural crops.

The major commodities, raw materials and supplies for the ~~company's reportable segments in 2010 include the following:~~

Agriculture ~~& Nutrition:~~

segment include: benzene derivatives, other aromatics and carbamic acid related ~~intermediates; copper; insect control products; natural gas; soybeans; soy flake; soy lecithin; sulfonamides;~~intermediates, copper, corn and soybean seeds,

insect control products, natural gas and seed treatments.

Agriculture segment sales outside the U.S. accounted for 54 percent of the segment's total sales in 2013.

Electronics & ~~Communications:~~Communications

Electronics & Communications (E&C) is a leading supplier of differentiated materials and systems for photovoltaics (PV), consumer electronics, displays and advanced printing that enable superior performance and lower total cost of ownership for customers. The segment leverages the company's strong materials and technology base to target attractive growth opportunities in PV materials, circuit and semiconductor fabrication and packaging materials, display materials, packaging graphics, and ink-jet printing. In the growing PV market, E&C continues to be an industry-leading innovator and supplier of metallization pastes and backsheet materials that improve the efficiency and lifetime of solar cells and solar modules. Solar modules, which are made up of solar cells and other materials, are installed to generate power. DuPont is a leading global supplier of materials to the PV industry.

In the displays market, E&C has developed solution-process technology, which it licenses, and a growing range of materials for active matrix organic light emitting diode (AMOLED) television displays. The segment has a portfolio of materials for semiconductor fabrication and packaging, as well as innovative materials for circuit applications, to address critical needs of electronic component and device manufacturers. In consumer electronics, E&C materials add value in the high growth hand-held

Part I

ITEM 1. BUSINESS,

continued

device market of tablets and smart phones. In packaging graphics, E&C is a leading supplier of flexographic printing systems, including Cyrel^® photopolymer plates and platemaking systems. The segment is investing in new products to strengthen its market leadership position in advanced printing markets. The segment holds a leadership position in black-pigmented inks and is developing new color-pigmented inks for network printing applications.

The major commodities, raw materials and supplies for E&C include: block ~~co-polymers; copper; hydroxylamine; oxydianiline;~~co-polymers, copper, difluoroethane, hydroxylamine, oxydianiline, polyester ~~film;~~film, precious ~~metals;~~metals and pyromellitic ~~dianhydride~~

dianhydride.

E&C segment sales outside the U.S. accounted for 82 percent of the segment's total sales in 2013.

Industrial Biosciences

~~Performance Chemicals:~~

~~ammonia; benzene; chlorine; chloroform; fluorspar; hydrofluoric acid;~~Industrial Biosciences is a leader in developing and manufacturing a broad portfolio of bio-based products. The segment's enzymes add value and functionality to processes and products across a broad range of markets such as animal nutrition, detergents, food manufacturing, ethanol production and industrial ~~gases; methanol; natural gas; perchloroethylene; sulfur; titanium ore~~

applications. The result is cost and process benefits, better product performance and improved environmental outcomes. Industrial Biosciences also makes DuPont~~Performance Coatings:~~^TM

~~isocyanates; pigments; resins; solvents~~

~~Performance Materials:~~Sorona

~~acrylic monomers; adipic acid; butadiene; butanediol; dimethyl terephthalate; ethane; fiberglass; hexamethylenediamine; methanol; natural gas;~~^® PTT renewably sourced polymer for use in carpet and apparel fibers.

The segment includes a joint venture with Tate & Lyle PLC, DuPont Tate and Lyle Bio Products LLC, to produce BioPDO^TM 1,3 propanediol using a proprietary fermentation and purification process. BioPDO^TM is the key building block for DuPont^TMSorona^®PTT polymer.

The major commodities, raw materials and supplies for the Industrial Biosciences segment include: glucoamylase, glycols, grain products, such as dextrose and glucose, and purified terephthalic acid.

Industrial Biosciences segment sales outside the U.S. accounted for 56 percent of the segment's total sales in 2013.

Nutrition & Health

Nutrition & Health offers a wide range of sustainable, bio-based ingredients and advanced molecular diagnostic solutions, providing innovative solutions for specialty food ingredients, food nutrition, health and safety. The segment's product solutions include the wide-range of DuPont™ Danisco® food ingredients such as cultures and notably Howaru® probiotics, emulsifiers, texturants, natural sweeteners such as Xivia® and Supro® soy-based food ingredients. These ingredients hold leading market positions based on industry leading innovation, knowledge and experience, relevant product portfolios and close-partnering with the world's food manufacturers. Nutrition & Health serves various end markets within the food industry including meat, dairy, beverages and bakery segments. Nutrition & Health has research, production and distribution operations around the world.

Nutrition & Health products are marketed and sold under a variety of brand names and are distributed primarily through its direct route to market. The direct route to market focuses on strong customer collaborations and insights with multinational customers and regional customers alike.

The major commodities, raw materials and supplies for the Nutrition & Health segment include: acetyls, citrus peels, glycerin, grain products, guar, locust bean gum, oils and fats, seaweed, soybean, soy flake, sugar and yeast.

Nutrition & Health segment sales outside the U.S. accounted for 68 percent of the segment's total sales in 2013.

Performance Chemicals

Performance Chemicals businesses, DuPont Titanium Technologies and DuPont Chemicals and Fluoroproducts, deliver customized solutions with a wide range of industrial and specialty chemical products for markets including plastics and coatings, textiles, mining, pulp and paper, water treatment and healthcare.

DuPont Titanium Technologies is the world's largest manufacturer of titanium dioxide, and is dedicated to creating greater value for the coatings, paper, plastics, specialties and minerals markets through service, brand and product. The business' main products include its broad line of DuPont^TM Ti-Pure^® titanium dioxide products. In 2011, the business announced a global expansion to support increased customer demand for titanium dioxide, including a $500 million investment in new production facilities at the company's Altamira, Mexico site scheduled for completion in 2015. In addition, the business continues to invest in facility upgrades to improve productivity at its other global manufacturing sites.

Part I

ITEM 1. BUSINESS,continued

DuPont Chemicals and Fluoroproducts is a leading global manufacturer of industrial and specialty fluorochemicals, fluoropolymers and performance chemicals. The business' broad line of products include refrigerants, lubricants, propellants, solvents, fire extinguishants and electronic gases, which cover a wide range of industries and markets. Key brands include DuPont^TM Teflon^®, Capstone^®, Dymel^®, Opteon^TMyf, Isceon^®, Suva^®, Vertrel^®, Zyron^®, Vazo^® and Virkon^®.

The major commodities, raw materials and supplies for the Performance Chemicals segment include: ammonia, benzene, chlorine, chloroform, fluorspar, hydrofluoric acid,

industrial gases, methanol, natural gas, perchloroethylene, petroleum coke, sodium hydroxide, sulfur and titanium ore.

Performance Chemicals segment sales outside the U.S. accounted for 55 percent of the segment's total sales in 2013.

Performance Materials

Performance Materials businesses, Performance Polymers and Packaging & Industrial Polymers, provide productive, higher performance polymers, elastomers, films, parts, and systems and solutions which improve the uniqueness, functionality and profitability of its customers' offerings. The key markets served by the segment include the automotive original equipment manufacturers (OEMs) and associated after-market industries, as well as electrical, packaging, construction, oil, electronics, photovoltaics, aerospace, chemical processing and consumer durable goods. The segment has several large customers, primarily in the motor vehicle OEM industry supply chain. The company has long-standing relationships with these customers and they are considered to be important to the segment's operating results.

Performance Polymers delivers a broad range of polymer-based high performance materials in its product portfolio, including elastomers and thermoplastic and thermoset engineering polymers which are used by customers to fabricate components for mechanical, chemical and electrical systems. The main products include: DuPont^TM Zytel^® nylon resins, Delrin^® acetal resins, Hytrel^® polyester thermoplastic elastomer resins, Tynex^®filaments, Vespel^® parts and shapes, Vamac^® ethylene acrylic elastomer, Kalrez^® perfluoroelastomer and Viton^® fluoroelastomers. Performance Polymers also includes the DuPont Teijin Films joint venture, whose primary products are Mylar^® and Melinex^® polyester films.

Packaging & Industrial Polymers specializes in resins and films used in packaging and industrial polymer applications, sealants and adhesives, sporting goods, and interlayers for laminated safety glass. Key brands include: DuPont^TM Surlyn^® ionomer resins, Bynel^® coextrudable adhesive resins, Elvax^®EVA resins, SentryGlas^®, Butacite^® laminate interlayers and Elvaloy^®copolymer resins.

In November 2013, DuPont entered into a definitive agreement to sell Glass Laminating Solutions/Vinyls (GLS/Vinyls), a part of Packaging & Industrial Polymers, to Kuraray Co. Ltd. for $543 million, plus the value of the inventories. GLS/Vinyls specializes in interlayers for laminated safety glass and its key brands include SentryGlas^®and Butacite^® laminate interlayers. The sale is expected to close about mid-2014 pending customary closing conditions, including timing of antitrust clearance.

The major commodities, raw materials and supplies for the Performance Materials segment include: acrylic monomers, adipic acid, butadiene, butanediol, dimethyl terephthalate, ethane, fiberglass, hexamethylenediamine, methanol, natural gas and purified terephthalic acid.

Performance Materials segment sales outside the U.S. accounted for 69 percent of the segment's total sales in 2013.

Safety & ~~Protection:~~Protection

Safety & Protection businesses, Protection Technologies, Sustainable Solutions and Building Innovations, satisfy the growing global needs of businesses, governments and consumers for solutions that make life safer, healthier and more secure. By uniting market-driven science with the strength of highly regarded brands, the segment delivers products and services to a large number of markets, including construction, transportation, communications, industrial chemicals, oil and gas, electric utilities, automotive, manufacturing, defense, homeland security and safety consulting.

Protection Technologies is focused on finding solutions to protect people and the environment. With products like DuPont™ Kevlar

~~alumina hydroxide; benzene;~~^®high strength material, Nomex^® thermal resistant material and Tyvek^®protective material, the business continues to hold strong positions in life protection markets and meet the continued demand for body armor and personal protective gear for the military, law enforcement personnel, firefighters and other first responders, as well as for workers in the oil and gas industry around the world.

Part I

ITEM 1. BUSINESS,continued

Sustainable Solutions continues to help organizations worldwide reduce workplace injuries and fatalities while improving operating costs, productivity and quality. Sustainable Solutions is a leader in the safety consulting field, selling training products, as well as consulting services. Additionally, Sustainable Solutions is dedicated to clean air, clean fuel and clean water with offerings that help reduce sulfur and other emissions, formulate cleaner fuels, or dispose of liquid waste. Its goal is to help maintain business continuity and environmental compliance for companies in the refining and petrochemical industries, as well as for government entities. In addition, the business is a leading global provider of process technology, proprietary specialty equipment and technical services to the sulfuric acid industry.

Building Innovations is committed to the building science behind increasing the performance of building systems, helping reduce operating costs and creating more sustainable structures. The business is a market leader of solid surfaces through its DuPont^TM Corian^® and Montelli^® lines of products which offer durable and versatile materials for residential and commercial purposes. DuPont™ Tyvek^® offers industry leading solutions for the protection and energy efficiency of buildings and the business also offers Geotextiles for Professional Landscaping applications.

The major commodities, raw materials and supplies for the Safety & Protection segment include: aluminum trihydrate, benzene, high density ~~polyethylene;~~polyethylene, isophthaloyl ~~chloride; metaphenylenediamine;~~chloride, metaphenylenediamine, methyl ~~methacrylate; paraphenylenediamine;~~methacrylate, paraphenylenediamine, polyester ~~fiber;~~fiber, terephthaloyl ~~chloride;~~chloride and wood ~~pulp~~

~~No commodities or raw materials are purchased~~pulp.

Safety & Protection segment sales outside the U.S. accounted for 62 percent of the ~~Pharmaceutical segment. This segment receives net proceeds~~segment's total sales in 2013.

Pharmaceuticals

On October 1, 2001, DuPont Pharmaceuticals was sold to the Bristol-Myers Squibb Company. DuPont retained its interest in Cozaar^® (losartan potassium) and ~~royalties from licensing arrangements for Cozaar® and Hyzaar® antihypertensive drugs,~~Hyzaar^® (losartan potassium with hydrochlorothiazide), which are ~~manufactured~~used in the treatment of hypertension. DuPont has exclusively licensed worldwide marketing and ~~distributed by Merck Sharp & Dohme Corp., a subsidiary of~~manufacturing rights for Cozaar^® and Hyzaar^® to Merck & Co., Inc. (Merck).

Pharmaceuticals' Cozaar^®/Hyzaar^® income is the sum of two parts: income related to a share of the profits from North American sales and certain markets in Europe, and royalty income derived from worldwide contract net sales linked to the exclusivity term in a particular country. Patents and exclusivity started to expire in prior years and the U.S. exclusivity for Cozaar^® ended in April 2010. The worldwide agreement with Merck expired December 31, 2012. The company expects 2014 earnings to be insignificant and will be reported within the Other segment.

Backlog

In general, the company does not manufacture its products against a backlog of orders and does not consider backlog to be a significant indicator of the level of future sales activity. Production and inventory levels are based on the level of incoming orders as well as projections of future demand. Therefore, the company believes that backlog information is not material to understanding its overall business and should not be considered a reliable indicator of the company's ability to achieve any particular level of revenue or financial performance.

Intellectual Property

As a science and technology based company, DuPont believes that securing intellectual property is an important part of protecting its research. Some DuPont businesses operate in environments in which the availability and protection of intellectual property rights affect competition. (Information on the importance of intellectual property rights to Pioneer is included in Item 1 Agriculture business discussion beginning on page 2 of this report.)

Trade secrets are an important element of the company's intellectual property. Many of the processes used to make DuPont products are kept as trade secrets which, from time to time, may be licensed to third parties. DuPont vigilantly protects all of its intellectual property ~~estate provides~~including its trade secrets. When the company discovers that its trade secrets have been unlawfully taken, it ~~with an important competitive advantage. It~~reports the matter to governmental authorities for investigation and potential criminal action, as appropriate. In addition, the company takes measures to mitigate any potential impact, which may include civil actions seeking redress, restitution and/or damages based on loss to the company and/or unjust enrichment.

Patents & Trademarks: DuPontcontinually applies for and obtains U.S. and foreign patents and has ~~an established global network of attorneys, as well as branding, advertising and licensing professionals,~~access to ~~procure, maintain, protect, enhance and gain value from this estate.~~

~~Table of Contents~~

~~Part I~~

~~ITEM 1. BUSINESS,~~~~continued~~

~~The company has~~ a large patent portfolio, ofboth owned and is licensed under various patents. These definite-lived patents cover many products, processes and product uses. These patents protect many aspects of the company's significant research programs and the goods and services it sells. The actual protection afforded by these patents varies from country to country and depends upon the scope of coverage of each individual patent as well as the availability of legal remedies in each country. DuPont owns about 17,600 worldwide patents and 17,300 worldwide patent applications. In 2010, the company was granted about 700 U.S. patents and about 1,400 international patents. DuPont'slicensed. DuPont’s rights under ~~its~~these patents and licenses, as well as the products made and sold under them, are important to the company in the aggregate. The protection afforded by these patents varies based on country, scope of individual patent coverage, as ~~a whole,~~well as the availability of legal remedies in each country. This significant patent estate may be

Part I

ITEM 1. BUSINESS,continued

leveraged to align with the company’s strategic priorities within and across segments. At December 31, 2013, the company owned over 24,000 patents with various expiration dates over the next twenty years. In addition to ~~varying degrees, important to each reportable segment.~~

~~The environment in which Pioneer competes has been characterized by~~its owned patents, the ~~use among competitors of new patents,~~company owns over 20,000 patent positions and patent lawsuits to gain advantage in commercial markets. Ownership of and access to intellectual property rights, particularly those relating to biotechnology and germplasm, will continue to be important to Pioneer and its competitors. Pioneer has a large collection of patents related to biotechnology and germplasm and also licenses technology from others. Pioneer will continue to address the dynamic environment in which it competes through a variety of means that includes protecting and enforcing its own intellectual property rights, challenging claims made by others and, where appropriate, obtaining licenses to important technologies on commercially reasonable terms. During 2007, Pioneer entered into a business agreement on corn herbicide tolerance and insect control trait technologies with Monsanto Company (Monsanto). Among other provisions, modifications were made to the existing corn license agreements; both parties agreed to exchange certain non-assert and other intellectual property rights; and both parties obtained rights to reference and access certain regulatory data and approvals in which the other has certain interests. For additional information, see Pioneer business discussion beginning on page 26 and the Contractual Obligations table on page 39.

applications.

The company has about ~~2,000~~2,140 unique trademarks for its products and services and approximately ~~19,000~~21,130 registrations for these trademarks worldwide. Ownership rights in trademarks do not expire if the trademarks are continued in use and properly protected. The company has many trademarks that have significant recognition at the consumer retail level and/or business to business level. Significant trademarks at the consumer retail level include the DuPont Oval and DuPont™ (the "DuPont Brand Trademarks"); Pioneer® brand seeds; Teflon® fluoropolymers, films, fabric protectors, fibers and dispersions; Corian® surfaces; Kevlar® high strength material; Nomex® thermal resistant material and Tyvek® protective material. The company actively pursues licensing opportunities for selected trademarks at the retail level.

~~Seasonality~~

Sales of the company's products in the Agriculture & Nutrition segment are affected by seasonal cropping and weather patterns. Sales and earnings performance in the Agriculture & Nutrition segment is strongest in the first half of the year. The segment generally operates at a loss during the third and fourth quarters of the year. As a result of the seasonal nature of its business, Agriculture & Nutrition's inventory is at its highest level at the end of the calendar year and is sold down in the first and second quarters. Trade receivables in the Agriculture & Nutrition segment are at a low point at year-end and increase through the selling season to peak at the end of the second quarter.

~~In general, businesses in the remaining segments are not significantly affected by seasonal factors.~~

~~Marketing~~

With the exception of certain products in the Agriculture & Nutrition segment, most products are marketed primarily through DuPont's sales force, although in some regions, more emphasis is placed on sales through distributors. Pioneer owns or uses a number of brands for its products and promotes them through multiple marketing channels around the world. In the corn and soybean markets of the U.S. Corn Belt, Pioneer® brand products are sold through a specialized force of independent sales representatives. Products that are co-branded or marketed under other Pioneer owned brands are distributed in this region by select seed companies. (See page 27 for a discussion of Pioneer's PROaccess^SM business strategy.) In other North American markets, Pioneer® products are marketed through distributors and crop input retailers. Pioneer® products outside of North America are marketed through a network of subsidiaries, joint ventures and independent producer-distributors. Similarly, Crop Protection products are marketed and sold to growers and other end users through a network of wholesale distributors and crop input retailers. Solae®

~~Table of Contents~~

~~Part I~~

~~ITEM 1. BUSINESS,~~~~continued~~

~~isolated and functional soy proteins are marketed using a combination of outside distributors, joint ventures and direct sales.~~

~~Major Customers~~

The company's sales are not materially dependent on a single customer or small group of customers. However, collectively, Performance Coatings and Performance Materials have several large customers, primarily in the motor vehicle original equipment manufacturer (OEM) industry supply chain. The company has long-standing relationships with these customers and they are considered to be important to the segments' operating results.

~~Competition~~

As a science and technology based company, DuPont competes on a variety of factors such as product quality and performance or specifications, continuity of supply, price, customer service and breadth of product line, depending on the characteristics of the particular market involved and the product or service provided.

Major competitors include diversified industrial companies principally based in the U.S., Western Europe, Japan, China, Korea and India. In the aggregate, these competitors offer a wide range of products from agricultural, commodity and specialty chemicals to plastics, fibers and advanced materials. The company also competes in certain markets with smaller, more specialized firms who offer a narrow range of products or converted products that functionally compete with the company's offerings.

Pioneer sells advanced plant genetics, principally for the global production of corn and soybeans and thus directly competes with other seed and plant biotechnology companies. The Nutrition & Health business also provides food safety equipment and soy-based food ingredients in competition with other major grain and food processors.

Research and Development

The company conducts research ~~in the U.S.~~and development (R&D) at either dedicated research facilities or manufacturing plants. The highest concentration of research is in the Wilmington, Delaware area at several large research centers. Among these, the Experimental Station laboratories engage in investigative and applied research, the Chestnut Run laboratories focus on applied research and the Stine-Haskell Research Center conducts agricultural product research and toxicological research to assure the safe manufacture, handling and use of products and raw materials.

~~Other~~There are eleven major research locations in the U.S. ~~include~~& Canada, with the highest concentration of facilities ~~dedicated to coatings~~at our corporate headquarters in the Wilmington, Delaware area. In addition, DuPont has five major research centers in ~~Mount Clemens, Michigan; Pioneer research facilities~~the Asia Pacific region, four major locations in ~~Johnston, Iowa;~~ the Europe, Middle East and Africa (EMEA) region and one major location is located in Latin America.

The Solae Company facilities in St. Louis, Missouri; polymer research facilities in Richmond, Virginia, and Parkersburg, West Virginia; and electronic materials research facilities in Research Triangle Park, North Carolina, and Santa Barbara, California.

~~DuPont, reflecting the company's global interests, also operates additional~~company’s research and development ~~facilities at locations outside~~objectives are to leverage its unique integrated science capabilities to drive revenue and profit growth. DuPont's R&D organization is fully focused on the U.S., with major facilities located in Sao Paulo, Brazil; Kingston, Canada; Shanghai, China; Wuppertal, Germany; Hyderabad, India; Kanagawa, Japan; Utsunomiya, Japan; Seoul, Korea; and Meyrin, Switzerland.

~~The objectives~~company's strategic priorities: extending its leadership across the high-value, science-driven segments of the ~~company's research~~agriculture and ~~development programs~~food value chains, strengthening its lead as provider of differentiated, high-value advanced industrial materials, and building transformational new bio-based industrial businesses. The company believes that its unique breadth of science, proven R&D engine, broad global reach and deep market penetration are distinctive, competitive advantages that position it to ~~create new technologies, processes~~address demands for more and healthier food, decreasing our dependence on fossil fuel, and protecting people and the environment. Each business ~~opportunities~~ in ~~relevant fields, as well as to improve existing products and processes. Each segment of~~ the company funds research and development activities that support its business ~~mission. Recently, the company has broadened its sustainability commitments beyond environmental footprint reduction to include market-driven targets for~~mission, and a central research and development ~~investment.~~organization supports cross-business and cross-functional growth opportunities. The ~~company~~R&D portfolio is expanding its offerings addressing safety, environment, energy and climate challenges in the global marketplace by developing and commercializing renewable, bio-based materials; advanced biofuels; energy-efficient technologies; enhanced safety and protection products; and alternative energy products and technologies. The goals are tied directly to business growth, including increasing food production, increasing renewable sources for energy and raw materials, and providing greater safety and protection for people and the environment.

~~The corporate research laboratories are responsible for conducting research programs aligned with corporate strategy. All research and development activities are administered~~managed by senior research and development ~~management~~

~~Table of Contents~~

~~Part I~~

~~ITEM 1. BUSINESS,~~~~continued~~

personnel to ensure consistency with the business and corporate strategy and to capitalize on the application of emerging science.

The company continues to protect its R&D investment through its intellectual property strategy. ~~The future of the company is not dependent upon the outcome of any single research program.~~

See discussion under "Intellectual Property".

Additional information with respect to research and development, including the amount incurred during each of the last three fiscal years, is included in Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, on page 19 of this report.

~~Facility Security~~

~~See Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, on page 45 for a discussion of facility security.~~

Environmental Matters

Information related to environmental matters is included in several areas of this report: (1) Environmental Proceedings beginning on page 12, (2) Management's Discussion and Analysis of Financial Condition and Results of Operations beginning on pages ~~23, 41-45~~31, 35-37 and (3) Notes 1 and 1916 to the Consolidated Financial Statements.

Available Information

The company is subject to the reporting requirements under the Securities Exchange Act of 1934. Consequently, the company is required to file reports and information with the Securities and Exchange Commission (SEC), including reports on the following forms: annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934.

The public may read and copy any materials the company files with the SEC at the SEC's Public Reference Room at 100 F Street, NE, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet site at http://www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

The company's annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports are also accessible on the company's website at http://www.dupont.com by clicking on the ~~tab~~section labeled ~~"Investor Center"~~"Investors", then on "Key Financials & Filings" and then on "SEC ~~filings.~~Filings." These reports are made available, without charge, as soon as is reasonably practicable after the company files or furnishes them electronically with the ~~Securities and Exchange Commission.~~

SEC.

Executive Officers of the Registrant

Information related to the company's Executive Officers is included in Item 10, Directors, Executive Officers and Corporate Governance, beginning on page 5140 of this report.

Part I

ITEM 1A. RISK FACTORS

The company's operations could be affected by various risks, many of which are beyond its control. Based on current information, the company believes that the following identifies the most significant risk factors that could affect its businesses. Past financial performance may not be a reliable indicator of future performance and historical trends should not be used to anticipate results or trends in future periods.

Conditions in the global economy and global capital markets may adversely affect the company's results of operations, financial condition, and cash flows.

The company's business and operating results may in the future be adversely affected by global economic conditions, including instability in credit markets, declining consumer and business confidence, fluctuating commodity prices and interest rates, volatile exchange rates, and other challenges such as the changing financial regulatory environment that could affect the global economy. The company's customers may experience deterioration of their businesses, cash flow shortages, and difficulty obtaining financing. As a result, existing or potential customers may delay or cancel plans to purchase products and may not be able to fulfill their obligations in a timely fashion. Further, suppliers could experience similar conditions, which could impact their ability to fulfill their obligations to the company. Adversity within capital markets may impact future return on pension assets, thus resulting in greater future pension costs that impact the company's results. Because the company has significant international operations, there are a large number of currency transactions that result from international sales, purchases, investments and borrowings. The company actively manages currency exposures that are associated with net monetary asset positions, committed currency purchases and sales, foreign currency-denominated revenues and other assets and liabilities created in the normal course of business. Future weakness in the global economy and failure to manage these risks could adversely affect the company's results of operations, financial condition and cash flows in future periods.

Changes in government policies and laws could adversely affect the company's financial results.

Sales to customers outside the U.S. constitute about 60 percent of the company's 2013 revenue. The company anticipates that international sales will continue to represent a substantial portion of its total sales and that continued growth and profitability will require further international expansion, particularly in developing markets. Sales from developing markets represent 33 percent of the company's revenue in 2013 and the company's growth plans include focusing on expanding its presence in developing markets. The company's financial results could be affected by changes in trade, monetary and fiscal policies, laws and regulations, or other activities of U.S. and non-U.S. governments, agencies and similar organizations. These conditions include, but are not limited to, changes in a country's or region's economic or political conditions, trade regulations affecting production, pricing and marketing of products, local labor conditions and regulations, reduced protection of intellectual property rights in some countries, changes in the regulatory or legal environment, restrictions on currency exchange activities, burdensome taxes and tariffs and other trade barriers. International risks and uncertainties, including changing social and economic conditions as well as terrorism, political hostilities and war, could lead to reduced sales and profitability.

Price increases for energy and raw materials could have a significant impact on the company's ability to sustain and grow earnings.

The company's manufacturing processes consume significant amounts of energy and raw materials, the costs of which are subject to worldwide supply and demand as well as other factors beyond the control of the company. Significant variations in the cost of energy, which primarily reflect market prices for oil, ~~and~~ natural gas and raw materials, affect the company's operating results from period to period. In 2013, price increases for energy and raw materials were about $500 million as compared to 2012. Price increases for energy and raw materials were not significant to earnings in 2012 as compared to 2011. Legislation to address climate change by reducing greenhouse gas emissions and establishing a price on carbon could create increases in energy costs and price

~~Table of Contents~~

~~Part I~~

~~ITEM 1A. RISK FACTORS,~~~~continued~~

volatility. When possible, the company purchases raw materials through negotiated long-term contracts to minimize the impact of price fluctuations. Additionally, the company enters into over-the-counter and exchange traded derivative commodity instruments to hedge its exposure to price fluctuations on certain raw material purchases. The company takes actions to offset the effects of higher energy and raw material costs through selling price increases, productivity improvements and cost reduction programs. Success in offsetting higher raw material costs with price increases is largely influenced by competitive and economic conditions and could vary significantly depending on the market served. If the company is not able to fully offset the effects of higher energy and raw material costs, it could have a significant impact on the company's financial results.

The company's results of operations and financial condition could be seriously impacted by business disruptions and security breaches, including cybersecurity incidents.

Business and/or supply chain disruptions, plant and/or power outages and information technology system and/or network disruptions, regardless of cause including acts of sabotage, employee error or other actions, geo-political activity, weather events and natural disasters could seriously harm the company's operations as well as the operations of its customers and suppliers. Failure to ~~develop~~effectively prevent, detect and ~~market new products~~recover from security breaches, including attacks on information technology and ~~manage product life cycles~~infrastructure

Part I

ITEM 1A. RISK FACTORS,continued

by hackers; viruses; breaches due to employee error or actions; or other disruptions could ~~impact~~result in misuse of the company's assets, business disruptions, loss of property including trade secrets and confidential business information, legal claims or proceedings, reporting errors, processing inefficiencies, negative media attention, loss of sales and interference with regulatory compliance. Like most major corporations, DuPont is the target of industrial espionage, including cyber-attacks, from time to time. DuPont has determined that these attacks have resulted, and could result in the future, in unauthorized parties gaining access to at least certain confidential business information. However, to date, the company has not experienced any material financial impact, changes in the competitive ~~position and have an adverse effect on~~environment or business operations that it attributes to these attacks. Although management does not believe that the ~~company's financial results.~~

~~Operating results are largely dependent on the company's assessment and management of its portfolio of current, new and developing products and services and its ability~~company has experienced any material losses to ~~bring those products and services~~date related to market. The company plans to grow earnings by focusing on developing markets and solutions to meet increasing demand for food productivity, decrease dependency on fossil fuels and protect people, assets and the environment. This ability could be adversely affected by difficulties or delays in product development such as the inability to identify viable new products, successfully complete research and development, obtain relevant regulatory approvals, obtain intellectual property protection, or gain market acceptance of new products and services. Because of the lengthy development process, technological challenges and intense competition,security breaches, including cybersecurity incidents, there can be no assurance that it will not suffer such losses in the future. The company actively manages the risks within its control that could lead to business disruptions and security breaches. As these threats continue to evolve, particularly around cybersecurity, the company may be required to expend significant resources to enhance its control environment, processes, practices and other protective measures. Despite these efforts, such events could materially adversely affect the company's business, financial condition or results of operations.

Inability to protect and enforce the company's intellectual property rights could adversely affect the company's financial results.

Intellectual property rights, including patents, plant variety protection, trade secrets, confidential information, trademarks, tradenames and other forms of trade dress, are important to the company's business. The company endeavors to protect its intellectual property rights in jurisdictions in which its products are produced or used and in jurisdictions into which its products are imported. However, the company may be unable to obtain protection for its intellectual property in key jurisdictions. The company has designed and implemented internal controls to restrict access to and distribution of its intellectual property. Despite these precautions, the company's intellectual property is vulnerable to unauthorized access through employee error or actions, theft and cybersecurity incidents, and other security breaches. When unauthorized access and use or counterfeit products are discovered, the company reports such situations to governmental authorities for investigation, as appropriate, and takes measures to mitigate

any potential impact.

Failure to effectively manage acquisitions, divestitures, alliances and other portfolio actions could adversely impact our future results.

From time to time, the company evaluates acquisition candidates that may strategically fit its business and/or growth objectives. If DuPont is unable to successfully integrate and develop acquired businesses, the company could fail to achieve anticipated synergies and cost savings, including any expected increases in revenues and operating results, which could materially and adversely affect the company’s financial results. DuPont continually reviews its diverse portfolio of assets for contributions to the company’s objectives and alignment with its growth strategy. However, the company may not be successful in separating underperforming or non-strategic assets and gains or losses on the divestiture of, or lost operating income from, such assets may affect the company’s earnings. Moreover, DuPont might incur asset impairment charges related to acquisitions or divestitures that reduce its earnings.

In October 2013, DuPont announced its intention to separate its Performance Chemicals segment through a U.S. tax-free spin-off to shareholders. The proposed spin-off is subject to various conditions, complex in nature and may be affected by unanticipated developments or changes in market conditions. Completion of the spin-off will be contingent upon customary closing conditions, including receipt of regulatory approvals.

Market acceptance, government policies, rules or regulations and competition could affect the company's ability to generate sales from products based on biotechnology.

The company is using biotechnology to create and improve products, particularly in its Agriculture and Industrial Biosciences segments. These products enable cost and process benefits, better product performance and improve environmental outcomes to a broad range of products and processes such as seeds, animal nutrition, detergents, food manufacturing, ethanol production and industrial applications. The company's ability to generate sales from such products could be impacted by market acceptance as well as governmental policies, laws and regulations that affect the development, manufacture and distribution of products, including the testing and planting of seeds containing biotechnology traits and the import of commodity grain grown from those seeds. The regulatory environment is lengthy and complex with requirements that can vary by industry and by country. The regulatory environment may be impacted by the activities of non-governmental organizations and special interest groups and stakeholder reaction to actual or perceived impacts of new technology on safety, health and the environment. Obtaining and maintaining regulatory approvals requires submitting a significant amount of information and data, which may require participation from technology providers. The ability to satisfy the requirements of regulatory agencies is essential to be able to continue to sell existing products or commercialize new products containing biotechnology traits.

Part I

ITEM 1A. RISK FACTORS,continued

The company competes with major global companies that have strong intellectual property estates supporting the use of biotechnology to enhance products, particularly agricultural and bio-based products. Speed in discovering, developing and protecting new technologies and bringing related products to market is a significant competitive advantage. Failure to predict and respond effectively to this competition could cause the company's existing or candidate products to become less competitive, adversely affecting sales. Competitors are increasingly challenging intellectual property positions and the outcomes can be highly uncertain. If challenges are resolved adversely, it could negatively impact the company's ability to commercialize new products and generate sales from existing products.

The company's business, including its results of operations and reputation, could be adversely affected by process safety and product stewardship issues.

Failure to appropriately manage safety, human health, product liability and environmental risks associated with the company's products, product life cycles and production processes could adversely impact employees, communities, stakeholders, the environment, the company's reputation and its results of operations. Public perception of the risks associated with the company's products and production processes could impact product acceptance and influence the regulatory environment in which the company ~~is currently developing, or~~operates. While the company has procedures and controls to manage process safety risks, issues could ~~begin to develop in~~be created by events outside of its control including natural disasters, severe weather events, acts of sabotage and substandard performance by the ~~future, will achieve substantial commercial success. Sales~~company's external partners.

As a result of the company's ~~new products~~current and past operations, including operations related to divested businesses, the company could ~~replace sales~~incur significant environmental liabilities.

The company is subject to various laws and regulations around the world governing the environment, including the discharge of ~~some~~pollutants and the management and disposal of hazardous substances. As a result of its ~~current products, offsetting~~operations, including its past operations and operations of divested businesses, the ~~benefit~~company could incur substantial costs, including remediation and restoration costs. The costs of ~~even~~complying with complex environmental laws and regulations, as well as internal voluntary programs, are significant and will continue to be so for the foreseeable future. The ultimate costs under environmental laws and the timing of these costs are difficult to predict. The company's accruals for such costs and liabilities may not be adequate because the estimates on which the accruals are based depend on a ~~successful product introduction.~~

number of factors including the nature of the matter, the complexity of the site, site geology, the nature and extent of contamination, the type of remedy, the outcome of discussions with regulatory agencies and other Potentially Responsible Parties (PRPs) at multi-party sites and the number and financial viability of other PRPs.

The company's results of operations could be adversely affected by litigation and other commitments and contingencies.

The company faces risks arising from various unasserted and asserted litigation matters, including, but not limited to, product liability, patent infringement, antitrust claims, and claims for third party property damage or personal injury stemming from alleged environmental torts. The company has noted a nationwide trend in purported class actions against chemical manufacturers generally seeking relief such as medical monitoring, property damages, off-site remediation and punitive damages arising from alleged environmental torts without claiming present personal injuries. The company also has noted a trend in public and private nuisance suits being filed on behalf of states, counties, cities and utilities alleging harm to the general public. Various factors or developments can lead to changes in current estimates of liabilities such as a final adverse judgment, significant settlement or changes in applicable law. A future adverse ruling or unfavorable development could result in future charges that could have a material adverse effect on the company. An adverse outcome in any one or more of these matters could be material to the company's financial results.

In the ordinary course of business, the company may make certain commitments, including representations, warranties and indemnities relating to current and past operations, including those related to divested businesses and issue guarantees of third party obligations. If the company were required to make payments as a result, they could exceed the amounts accrued, thereby adversely affecting the company's results of operations.

~~The company's business, including its results of operations and reputation, could be adversely affected by process safety and product stewardship issues.~~

Failure to appropriately manage safety, human health, product liability and environmental risks associated with the company's products, product life cycles and production processes could adversely impact employees, communities, stakeholders, the company's reputation and its results of operations. Public perception of the risks associated with the company's products and production processes could impact product acceptance and influence the regulatory environment in which the company operates. While the company has procedures and controls to manage process safety risks, issues could be created by events outside of its control including natural disasters, severe weather events and acts of sabotage.

~~Table of Contents~~

Part I

~~ITEM 1A. RISK FACTORS,~~~~continued~~

~~As a result of the company's current and past operations, including operations related to divested businesses, the company could incur significant environmental liabilities.~~

The company is subject to various laws and regulations around the world governing the environment, including the discharge of pollutants and the management and disposal of hazardous substances. As a result of its operations, including its past operations and operations of divested businesses, the company could incur substantial costs, including cleanup costs. The costs of complying with complex environmental laws and regulations, as well as internal voluntary programs, are significant and will continue to be so for the foreseeable future. The ultimate costs under environmental laws and the timing of these costs are difficult to predict. The company's accruals for such costs and liabilities may not be adequate because the estimates on which the accruals are based depend on a number of factors including the nature of the matter, the complexity of the site, site geology, the nature and extent of contamination, the type of remedy, the outcome of discussions with regulatory agencies and other Potentially Responsible Parties (PRPs) at multi-party sites and the number and financial viability of other PRPs.

The company's ability to generate sales from genetically modified products, particularly seeds and other agricultural products, could be adversely affected by market acceptance, government policies, rules or regulations and competition.

The company is using biotechnology to create and improve products, particularly in its Agriculture & Nutrition segment. The use of biotechnology to characterize the genetic and performance characteristics of Pioneer seeds provides Pioneer with competitive advantages in the development of new products, and in the most effective placement of those products on customer acres. In addition, the company uses biotechnology to enhance the performance of its seed products through the addition of specific transgenes. The company's ability to generate sales from such products could be affected by market acceptance of genetically modified products as well as governmental policies, laws and regulations that affect the development, manufacture and distribution of products, including the testing and planting of seeds containing biotechnology traits and the import of commodity grain grown from those seeds.

The company competes with major global companies that have strong intellectual property estates supporting the use of biotechnology to enhance products, particularly in the agricultural products and production markets. Speed in discovering and protecting new technologies and bringing products based on them to market is a significant competitive advantage. Failure to predict and respond effectively to this competition could cause the company's existing or candidate products to become less competitive, adversely affecting sales.

~~Changes in government policies and laws could adversely affect the company's financial results.~~

Sales outside the U.S. constitute approximately 65 percent of the company's 2010 revenue. The company anticipates that international sales will continue to represent a substantial portion of its total sales and that continued growth and profitability will require further international expansion, particularly in developing markets. Sales from developing markets represent approximately 30 percent of the company's revenue in 2010 and the company's growth plans include focusing on expanding its presence in developing markets. The company's financial results could be affected by changes in trade, monetary and fiscal policies, laws and regulations, or other activities of U.S. and non-U.S. governments, agencies and similar organizations. These conditions include, but are not limited to, changes in a country's or region's economic or political conditions, trade regulations affecting production, pricing and marketing of products, local labor conditions and regulations, reduced protection of intellectual property rights in some countries, changes in the regulatory or legal environment, restrictions on currency exchange activities, burdensome taxes and tariffs and other trade barriers. International risks and uncertainties, including changing social and economic conditions as well as terrorism, political hostilities and war, could lead to reduced sales and profitability.

~~Economic factors, including inflation, deflation and fluctuations in currency exchange rates, interest rates and commodity prices could affect the company's financial results.~~

The company is exposed to fluctuations in currency exchange rates, interest rates and commodity prices. Because the company has significant international operations, there are a large number of currency transactions that result from international sales, purchases, investments and borrowings. The company actively manages currency exposures that are associated with net monetary asset positions, committed currency purchases and sales, foreign currency-

~~Table of Contents~~

~~Part I~~

~~ITEM 1A. RISK FACTORS,~~~~continued~~

denominated revenues and other assets and liabilities created in the normal course of business. Failure to successfully manage these risks could have an adverse impact on the company's financial position, results of operations and cash flows.

~~Conditions in the global economy and global capital markets may adversely affect the company's results of operations, financial condition, and cash flows.~~

~~The company's results of operations and financial condition could be seriously impacted by business disruptions and security threats.~~

Business disruptions, including supply disruptions, increasing costs for energy, temporary plant and/or power outages and information technology system and network disruptions, could seriously harm the company's operations as well as the operations of its customers and suppliers. Like many other multinational organizations, the company faces security threats to its facilities, data and information technology infrastructure. Although it is impossible to predict the occurrences or consequences of business disruptions or security threats, they could result in reduced demand for the company's products, make it difficult or impossible for the company to deliver products to its customers or to receive raw materials from suppliers, and create delays and inefficiencies in the supply chain. The company actively manages the risks within its control that could lead to business disruptions or security breaches in order to mitigate any potential impact from business disruptions regardless of cause including acts of sabotage, terrorism or war, weather events and natural disasters. Despite these efforts, the impact from business disruptions and security breaches could significantly increase the cost of doing business or otherwise adversely impact the company's financial performance.

~~Inability to protect and enforce the company's intellectual property rights could adversely affect the company's financial results.~~

Intellectual property rights are important to the company's business. The company endeavors to protect its intellectual property rights in jurisdictions in which its products are produced or used and in jurisdictions into which its products are imported. However, the company may be unable to obtain protection for its intellectual property in key jurisdictions. Additionally, the company has designed and implemented internal controls to restrict access to and distribution of its intellectual property, including confidential information and trade secrets. Despite these precautions, it is possible that unauthorized parties may access and use such property. When misappropriation is discovered, the company reports such situations to the appropriate governmental authorities for investigation and takes measures to mitigate any potential impact.

ITEM 1B. UNRESOLVED STAFF COMMENTS

~~ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS,~~~~continued~~

For plans other than the principal U.S. pension plan, pension expense is typically determined using the fair value of assets. The fair value of assets in all pension plans was $18.4 billion at December 31, 2010, and the related projected benefit obligations were $23.9 billion. In addition, obligations under the company's unfunded other long-term employee benefit plans were $4.0 billion at December 31, 2010.

~~ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS,~~~~continued~~

Based on the results of the company's annual goodwill impairment test in ~~2010,~~2013, no impairments exist at this time. The company's methodology for estimating the fair value of its ~~businesses~~reporting units is using the income approach based on the present value of future cash flows. The income approach has been generally supported by additional market transaction analyses. There can be no assurance that the company's estimates and assumptions regarding forecasted cash flow and revenue and operating income growth rates made for purposes of the annual goodwill impairment test will prove to be accurate predictions of the future. The company believes the current assumptions and estimates utilized are both reasonable and appropriate. ~~Information with respect to the company's significant accounting policies on long-lived assets is included in Note 1 to the Consolidated Financial Statements.~~

~~Segment Reviews~~

Segment sales include transfers to another business segment. Products are transferred between segments on a basis intended to reflect, as nearly as practicable, the market value of the products. Segment pre-tax operating income (loss) (PTOI) is defined as operating income before income taxes, exchange gains (losses), corporate expenses and interest. A reconciliation of segment sales to consolidated net sales and segment PTOI to income before income taxes for 2010, 2009 and 2008 is included in Note 25 to the Consolidated Financial Statements.

As described in Note 4 to the Consolidated Financial Statements, the company initiated global restructuring programs during 2009 and 2008. The 2009 and 2008 program charges reduced total segment PTOI for 2009 and 2008 by $340 million and $535 million, respectively.

In 2009, the company recorded a $30 million and $100 million net reduction in the estimated costs associated with the 2009 program and 2008 programs, respectively. In 2010, the company recorded a $20 million and $14 million net reduction in the estimated costs associated with the 2009 program and 2008 programs, respectively.

~~Below is a summary of the net impact to each segment related to the activities described above:~~

2010 (Charges)
and Credits

2009 (Charges) and Credits

2008
(Charge)

(Dollars in millions)
2009 and 2008
Net Program
Reductions 2009
Program 2009 Net
Program
Reductions 2008 Net
Program
Reductions 2009 Net
Impact 2008
Program
Agriculture & Nutrition
$ - $ - $ - $ 1 $ 1 $ (18 )
Electronics & Communications
8 (43 ) 6 - (37 ) (37 )
Performance Chemicals
10 (66 ) 9 3 (54 ) (50 )
Performance Coatings
(6 ) (65 ) (11 ) 61 (15 ) (209 )
Performance Materials
16 (110 ) 23 29 (58 ) (94 )
Safety & Protection
5 (55 ) 8 2 (45 ) (96 )
Other
1 (1 ) (5 ) 4 (2 ) (31 )
Total (Charge) Credit
$ 34 $ (340 ) $ 30 $ 100 $ (210 ) $ (535 )

~~Table of Contents~~

Part II

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS,continued

~~AGRICULTURE & NUTRITION~~

Segment Sales
(Dollars in billions)

PTOI
(Dollars in millions)

2010
$ 9.1 $ 1,355
2009
$ 8.3 $ 1,224
2008
$ 8.0 $ 1,087

Agriculture & Nutrition's businesses leverage the company's technology, customer relationships, and industry knowledge to improve the quantity, quality and safety of the global food supply and the global production agriculture industry. Land available for worldwide agricultural production is increasingly limited so production growth will need to be achieved principally through improving crop yields and productivity rather than through increases in planted area. The segment's businesses deliver a broad portfolio of products and services that are specifically targeted to achieve gains in crop yields and productivity, including Pioneer® brand seed products and well-established brands of insecticides, fungicides and herbicides. The segment's businesses operate across the food value chain from inputs for producing agriculture products to global production and distribution of soy-based food ingredients to food quality diagnostic testing equipment. Research and development focuses on leveraging technology to increase grower productivity and enhance the value of grains and soy through improved seed traits, superior seed germplasm and effective use of insecticides, herbicides and fungicides. The following are Agriculture & Nutrition's operating businesses:

~~Pioneer~~ is the world's leading seed brand and a world leader in improving crop yields with hybrid and varietal seeds that improve grower yields and provide effective plant insect protection and herbicide tolerance. The principal products of Pioneer are hybrid seed corn and varietal soybean seed, as well as sunflower, canola, sorghum and rice. Crops grown from Pioneer seed are used to meet the global demand for animal feed, food, biofuels, and fiber. Sales of Pioneer seeds amounted to 17 percent, 18 percent and 13 percent of the company's total consolidated net sales for the years ended December 31, 2010, 2009 and 2008, respectively. Agricultural seed research requires long-term commitment, investment and innovation. Pioneer research is focused on results that deliver higher crop yields and a consistent per acre income advantage for its customers. New product innovation is accomplished through an effective integration of superior germplasm and value added native and biotechnology traits. In 2010, Pioneer benefited from the North America launch of new soybean varieties and new Pioneer® brand corn hybrids. In April 2010, Pioneer received EPA cultivation approval of Optimum® AcreMax™ 1 products, the first product with reduced and integrated corn rootworm refuge with 2011 commercialization in North America. In October 2010, Pioneer received EPA cultivation approval of Optimum® Intrasect™ insect protection products offering that will allow U.S. corn growers to reduce their structured above ground refuge to a level of 5 percent in the Corn Belt. Optimum® Intrasect™ insect protection products will be demonstrated to growers in 2011. Pioneer expects EPA cultivation approval for its next generation integrated refuge insect control products in the second half 2011. These innovative and convenient products would feature single-bag reduced refuge for both corn rootworm and corn borer. Upon EPA cultivation approval, multiple product versions would be available for grower choice including but not limited to: Optimum® AcreMax^TM ~~products for above-ground protection and Optimum® AcreMax~~^TM ~~Xtra products for above- and below-ground protection.~~

In December 2010, Pioneer and Syngenta AG (Syngenta) entered into an agreement to grant Pioneer a non-exclusive, global license to Syngenta's corn rootworm trait MIR604 (Agrisure™ RW) for corn seed. The trait provides protection from below-ground coleopteran insects, including corn rootworm, a major corn pest in the U.S. and around the world. The license gives Pioneer the right to commercialize corn seed containing MIR604, including the right to stack MIR604 with other traits through the expiration of the relevant patents. As part of the agreement, Pioneer is obligated to make milestone and royalty payments assuming certain contingencies, including regulatory approvals, are met. The contingencies related to the first milestone payment are expected to be met in 2011. Minimum payments under the agreement are expected to total about $400 million over the next several years.

In September 2010, as part of the company's strategy to deliver innovations that address the need for increased food production to feed the world's growing population, Pioneer announced that it had entered into an agreement to acquire

~~Table of Contents~~

~~Part II~~

~~ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS,~~~~continued~~

a majority share of Pannar Seed Limited, a South African-based seed company. This investment would allow each business to access additional crop areas, reach more customers and deliver improved seed products quicker than either can do on its own. In December 2010, the South African Competition Commission rejected the acquisition. The company has appealed this decision and expects to receive a final decision in 2011.

~~As announced in December 2008, Pioneer is expanding its reach in North America through its PROaccess~~^SM ~~business strategy in order to bring its seed genetics to more customers. Under the PROaccess~~^SM ~~business strategy, nine companies distribute products on behalf of Pioneer that are co-branded using Pioneer-owned brands together with one of the nine companies' brands. Since launching PROaccess~~^SM~~, six of the nine PROaccess~~^SM ~~partners have become wholly owned subsidiaries of the company.~~

~~In the spring 2009, Monsanto sued the company in U.S. District Court claiming that stacking seed with Pioneer's Optimum® GAT® trait and Monsanto's Roundup Ready®~~¹ herbicide tolerance trait violates its Roundup Ready® license agreements with Monsanto. Monsanto also alleges that sales of Pioneer stacked seeds would infringe a Monsanto patent that expires in 2014. Monsanto seeks declaratory relief, unspecified damages and a permanent injunction to prevent sales of Optimum® GAT®/ Roundup Ready® stacked seeds. DuPont filed an answer and counterclaims, including patent misuse and antitrust claims. In January 2010, the Court ruled that the license agreements between the companies contain an unwritten ("implied") term that prohibits stacking these traits. The Court vacated its ruling regarding the "implied term" in the third quarter 2010, and concluded that the license neither expressly prohibits nor expressly grants the right to stack a second glyphosate tolerance trait with Monsanto's Roundup Ready® trait. The company's separate antitrust and patent fraud claims were not impacted by either ruling and are proceeding. Pioneer continues to develop soybean seed in which these traits are stacked and sales could occur between 2013-2014, subject to regulatory approvals. Neither ruling changes Pioneer's commercialization plans for products with the Optimum® GAT® trait. Furthermore, management believes that the Monsanto lawsuit is unlikely to adversely affect the company's commercial results for soybean and corn seed because Pioneer can continue to sell seed with Roundup Ready® traits that are not stacked with Optimum® GAT® traits.

1: ~~Registered Trademark of Monsanto~~

~~DuPont Crop Protection~~ serves the global production agriculture industry with crop protection products for field crops such as wheat, corn, soybean and rice; specialty crops such as fruit, nut, vine and vegetables; and non-crop segments, including forestry and land management. Principal crop protection products are weed control, disease control, and insect control products. The sales growth of the business' insect control portfolio is led by Rynaxypyr®, a product registered for sale in over 60 countries and sold under four key brands for use across a broad range of core agricultural crops. The business continues to expand its product offerings in the professional pest control, lawn care, golf course, animal health and seed treatment markets.

~~Nutrition & Health~~ operates principally within the specialty food ingredients market, including soy proteins and lecithins through the Solae Company, a majority-owned venture with Bunge Limited. Nutrition & Health global production and distribution capabilities serves various areas within the food industries including meat and poultry products, consumer food products, dairy-alternative products and nutritional products. Nutrition & Health anticipates improved volume growth through offerings in its specialty food ingredients.

~~2010 versus 2009~~ Sales were $9.1 billion, a 10 percent increase versus the prior year, reflecting a 7 percent increase in volume and 4 percent higher United States dollar (USD) selling prices, which were partially offset by portfolio changes of 1 percent. Higher volume was primarily due to higher seed sales in North America with market share gains for corn and soybeans. Higher global sales of Crop Protection products were led by broad-based recovery across most regions and strong demand for Rynaxypyr® in Asia Pacific and Latin America. The higher USD selling prices reflect higher value product mix and pricing actions to offset the increase in raw material costs.

PTOI for 2010 was $1.4 billion, an increase of 11 percent versus the prior year, principally due to the higher sales volume, partially offset by higher spending for growth investments and a $50 million charge in R&D expense for an upfront payment related to a Pioneer licensing agreement for corn seed trait technology, as described above.

~~Table of Contents~~

~~Part II~~

~~ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS,~~~~continued~~

~~2009 versus 2008~~ Sales were $8.3 billion, a 4 percent increase when compared to 2008, reflecting 5 percent higher USD selling prices, partially offset by a 1 percent decrease in volume. The higher USD selling prices is related to Pioneer seeds and Crop Protection proprietary insect, weed and disease control products, partially offset by unfavorable currency impacts in Europe, Canada and Latin America, as well as the impact of significantly lower market-driven pricing for glyphosate resale. The decrease in volume was primarily due to lower sales of Crop Protection disease and insect control products, and lower sales of Nutrition & Health products largely offset by higher Pioneer corn and soybean seed sales market share gains in North America.

~~PTOI was $1.2 billion, an increase of 13 percent versus 2008, principally due to the higher sales and higher value product mix, partially offset by unfavorable currency impacts globally.~~

~~Outlook~~ The segment anticipates sales and earnings growth in 2011. Segment earnings are expected to benefit in particular from continued strong momentum in the Pioneer corn and soybean business. Pioneer anticipates continued growth in volume in key corn and soybean markets including the U.S., Canada and Latin America, as well as value-based pricing gains. The 2011 product line up will include new corn hybrids and soybean varieties as well as Optimum® AcreMax™ 1 products, the industry's first product with reduced and integrated corn rootworm refuge.

In the Crop Protection business, volume driven sales growth combined with continued productivity and business improvement actions are expected to contribute to earnings in 2011. Volume growth is underpinned by a favorable industry outlook, continued regional expansion and new market segment penetration of products such as Rynxypyr® as well as new product introductions such as Streamline® herbicide for land management. In the Nutrition & Health business, volume growth reflecting soy protein penetration and expansion of health and wellness products coupled with continued and intensified productivity actions are anticipated to support earnings and margin expansion.

~~ELECTRONICS & COMMUNICATIONS~~

Segment Sales
(Dollars in billions)

PTOI
(Dollars in millions)

2010
$ 2.8 $ 445
2009
$ 1.9 $ 87
2008
$ 2.2 $ 251

~~Electronics & Communications~~ is a leading supplier of differentiated materials and systems for photovoltaics, consumer electronics, displays and advanced printing that enable superior performance and lower total cost of ownership for customers. The segment leverages DuPont's strong materials and technology base to target attractive growth opportunities in photovoltaic materials, materials for circuit and semiconductor fabrication and packaging, display materials, packaging graphics, and ink-jet printing. In the fast growing photovoltaics market, the company continues to be a leading supplier of metallization pastes and backsheet materials for use in solar cells and modules. In 2010, DuPont Apollo Ltd., a wholly owned subsidiary of the company, started providing total system solutions and production of high-efficiency tandem thin-film photovoltaic modules to meet the needs of this fast growing segment of the solar energy market. Beyond photovoltaics, the segment is investing in its broad portfolio of materials for semiconductor fabrication and packaging, as well as innovative materials for circuit applications, to address critical needs of electronic component and device manufacturers. In the displays market, the segment continues to be a leading materials supplier for plasma displays. In addition, the segment continues to invest in developing a solution-process technology and material set to enable lower cost organic light-emitting diode (OLED) displays. In packaging graphics, DuPont is a leading supplier of flexographic printing systems, including Cyrel® photopolymer plates. The segment is investing in new products such as Cyrel® FAST Round to strengthen its market leadership position in advanced printing markets. DuPont is also expanding its leadership position in black-pigmented inks and developing new color-pigmented inks for network printing applications.

~~Table of Contents~~

~~Part II~~

~~ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS,~~~~continued~~

The segment is on track to complete a $295 million expansion to support the DuPont Tedlar® polyvinyl fluoride films business. This includes a $120 million investment in capacity expansion to produce the raw materials that make the film, which was completed in 2010. A multi-phase $175 million investment of high-performance Tedlar® PV2001 series oriented film production is scheduled for completion in 2011. Tedlar® films serve as the critical component of photovoltaic module backsheets, providing long-term durability and performance in all weather conditions.

~~2010 versus 2009~~ Sales of $2.8 billion were up 44 percent, reflecting 37 percent higher volume and 7 percent higher USD selling prices. Higher volume was driven by strong growth in all regions, particularly in Asia Pacific and Europe, and strong demand across most market segments, particularly in photovoltaics. Higher USD selling prices were primarily due to pass-through of higher precious metals prices.

PTOI was $445 million compared to $87 million in the prior year. The increase in PTOI was driven by substantially higher volume, improved productivity and the absence of a net $37 million restructuring charge in the prior year.

~~2009 versus 2008~~ Sales of $1.9 billion were down 13 percent, reflecting 11 percent volume decline and 2 percent lower USD selling prices. The lower volume reflects the impact of the global economic recession which affected sales for products across all key markets. Sales volume improved throughout 2009, most significantly in Asia Pacific, where sales were essentially flat when compared to 2008. The lower USD selling prices were mainly due to contractual pass-through of lower precious metal prices.

PTOI was $87 million compared to $251 million in 2008. The decline in PTOI was primarily due to the impact of lower sales, lower income from affiliates, and higher charges associated with low capacity utilization of production lines.

~~Outlook~~ For 2011, sales of products into photovoltaics, consumer electronics, displays, and advanced printing markets are expected to increase moderately. The segment continues to make productivity and supply chain improvements, as well as capacity investments to meet global demand. Segment earnings are expected to increase reflecting the impact of higher volume and productivity initiatives, as well as investments for growth.

~~PERFORMANCE CHEMICALS~~

Segment Sales
(Dollars in billions)

PTOI
(Dollars in millions)

2010
$ 6.3 $ 1,081
2009
$ 5.0 $ 547
2008
$ 6.0 $ 687

Performance Chemicals businesses deliver customized solutions with a wide range of industrial and specialty chemical products for markets including plastics & coatings, textiles, mining, pulp and paper, water treatment and healthcare. The following are Performance Chemicals' operating businesses:

~~DuPont Titanium Technologies~~ is the world's largest manufacturer of titanium dioxide, and is dedicated to creating greater, more rewarding value for the coatings, paper, plastics, specialties and minerals markets through service, brand, and product. The business' main products include its broad line of DuPont™ Ti-Pure® titanium dioxide products.

~~DuPont Chemicals and Fluoroproducts~~ is a leading global manufacturer of industrial and specialty fluorochemicals, fluoropolymers, and performance chemicals. The business' broad line of products that include refrigerants, lubricants, propellants, solvents, fire extinguishants and electronic gases, cover a wide range of industries and markets. Key brands include DuPont^TM ~~Teflon®, Dymel®, Isceon®, Suva®, Vertrel®, Zyron®, Vazo® and Virkon®.~~

~~2010 versus 2009~~ Sales of $6.3 billion were 27 percent higher than last year, reflecting 18 percent higher volume and 10 percent higher USD selling prices, which were partially offset by portfolio changes of 1 percent. Broad-based market recovery led to sales increases in all markets and all regions, most significant in Asia Pacific, reflecting strong demand for titanium dioxide, fluoropolymers and refrigerants, with continuing adoption of ISCEON® as a preferred retrofit to R22

~~Table of Contents~~

~~Part II~~

~~ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS,~~~~continued~~

~~refrigerant. Higher USD selling prices reflect favorable pricing for titanium dioxide and pass-through of higher raw material costs for industrial chemicals and fluoroproducts.~~

PTOI was $1,081 million as compared to $547 million in the prior year. The increase in PTOI was driven by higher volume, higher USD selling prices that more than offset increases in raw material costs, improved productivity and the absence of a net $54 million restructuring charge in the prior year.

~~2009 versus 2008~~ Sales of $5.0 billion were 18 percent lower than 2008, due to a 12 percent decline in volume and 6 percent lower USD selling prices. The lower volume principally reflects decreased demand for industrial chemicals and fluoroproducts across all regions reflecting the impact of the economic downturn. Sales of titanium dioxide products recovered during the second half 2009, and were higher than the pre-recession levels in the second half 2007. The lower USD selling prices were mainly due to contractual pass-through of lower raw material prices and unfavorable currency impact in Europe and Asia Pacific.

~~PTOI was $547 million as compared to $687 million in 2008. The decrease in earnings was primarily due to the impact of lower volume, partially offset by fixed costs reductions.~~

~~Outlook~~ Performance Chemicals' sales are expected to increase in 2011 as a result of the continued global economic recovery, higher global demand for titanium dioxide and specialty chemicals, and higher USD selling prices. Total segment earnings are also expected to increase consistent with the higher sales volume, higher USD selling prices and improved fixed cost productivity. This segment manufactures products that could be affected by uncertainties associated with PFOA matters. See the discussion on page 46 under the subheading PFOA for further information.

~~PERFORMANCE COATINGS~~

Segment Sales
(Dollars in billions)

PTOI
(Dollars in millions)

2010
$ 3.8 $ 249
2009
$ 3.4 $ 69
2008
$ 4.4 $ (8 )

~~Performance Coatings~~ is one of the world's leading motor vehicle coatings suppliers. Products offered include high performance liquid and powder coatings for motor vehicle original equipment manufacturers (OEMs), the motor vehicle after-market, and general industrial applications, such as coatings for heavy equipment, pipes and appliances and electrical insulation. After-market coatings products are marketed using the DuPont™ Standox®, Spies Hecker® and Nason® brand names. Standox® and Spies Hecker® are focused on the high-end motor vehicle after-markets, while Nason® is primarily focused on economy coating applications.

In 2009 and 2008, the segment experienced a significant decline in sales, mainly in the OEMs markets, due to the impact of the global economic recession in the automotive industry. In addition, the North American automotive industry continued to experience structural changes, including the loss of U.S. market share by U.S. automakers. In 2009, the global production of automobiles and light trucks declined by 14 percent reflecting declines of 33 percent in North America, and 10 percent in the rest of the world, which was partially offset by an increase in production of 44 percent in Greater China.

In 2010, the segment experienced strong recovery from the economic downturn across most markets and regions. Global automotive markets experienced increased production levels due to improved OEM auto builds as a result of higher demand, most significant in North America and Europe. Automotive builds across the globe increased 22 percent, reflecting an improvement of 37 percent in North America and 20 percent in the rest of the world. The industry production forecast for 2011 projects a global increase of 5 percent, reflecting continued recovery in North America and continued growth in Asia Pacific.

~~Table of Contents~~

~~Part II~~

~~ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS,~~~~continued~~

~~2010 versus 2009~~ Sales of $3.8 billion were up 11 percent when compared to prior year, reflecting 9 percent higher volume and a 2 percent increase in USD selling prices. Higher volume reflects recovery in global automotive OEM markets as a result of higher global motor vehicle builds and strong demand in industrial coatings, particularly in the North American and European heavy duty truck markets. Higher USD selling prices primarily reflect pricing actions taken to offset the increase in raw material costs.

PTOI was $249 million as compared to $69 million in 2009. The increase in PTOI primarily reflects the impact of higher volume, improved productivity and higher USD selling prices, which were partially offset by higher raw material costs.

~~2009 versus 2008~~ Sales of $3.4 billion were down 21 percent when compared to 2008, reflecting a 20 percent decline in volume and 1 percent lower USD selling prices. The decline in volume reflects the impact of fewer motor vehicle and industrial truck builds of motor vehicle OEMs, and lower sales of industrial and after-market products in all regions. Sales to OEMs improved substantially during the second half 2009, mostly due to the impact of government incentives programs and higher sales in Asia Pacific. Sales of after-market and industrial coatings experienced a slower recovery from the inventory destocking experienced in the industry during the fourth quarter 2008 and first quarter 2009. The lower USD selling prices reflect unfavorable currency impacts, partially offset by higher local selling prices.

PTOI was $69 million as compared to a loss of $8 million in 2008. The improvement in PTOI was primarily due to lower fixed costs, and the net year-over-year impact of the 2008 and 2009 restructuring activities, partially offset by the effect of lower volume.

~~Outlook~~ For 2011, the segment expects sales to increase modestly with continued recovery in the global automotive and heavy duty truck markets and market growth in the developing regions. PTOI is expected to improve due to continued productivity efforts and higher sales in all regions.

~~PERFORMANCE MATERIALS~~

Segment Sales
(Dollars in billions)

PTOI
(Dollars in millions)

2010
$ 6.3 $ 994
2009
$ 4.8 $ 287
2008
$ 6.4 $ 128

Performance Materials' businesses provide productive, higher performance polymers, elastomers, films, parts, and systems and solutions which improve the uniqueness, functionality and profitability of its customers' offerings. The key markets served by the segment include the automotive OEM and associated after-market industries, as well as electrical, electronics, packaging, construction, oil, photovoltaics, aerospace, chemical processing and consumer durable goods. The following are Performance Materials' operating businesses:

~~Performance Polymers~~ delivers a broad range of polymer-based high performance materials in its product portfolio, including elastomers and thermoplastic and thermoset engineering polymers which are used by customers to fabricate components for mechanical, chemical and electrical systems. The main products include: DuPont™ Zytel® nylon resins, Delrin® acetal resins, Hytrel® polyester thermoplastic elastomer resins, Tynex® filaments, Vespel® parts and shapes, Vamac® ethylene acrylic elastomer, Kalrez® perfluoroelastomer and Viton® fluoroelastomers. Performance Polymers also includes the DuPont Teijin Films joint venture, whose primary products are Mylar® and Melinex® polyester films.

~~Packaging & Industrial Polymers~~ specializes in resins and films used in packaging and industrial polymer applications, sealants and adhesives, sporting goods, and interlayers for laminated safety glass. Key brands include: DuPont™ Surlyn® ionomer resins, Bynel® coextrudable adhesive resins, Elvax® EVA resins, SentryGlas®, Butacite® laminate interlayers and Elvaloy® copolymer resins.

~~Table of Contents~~

~~Part II~~

~~ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS,~~~~continued~~

~~2010 versus 2009~~ Sales of $6.3 billion were 32 percent higher than prior year, reflecting 27 percent higher volume and a 7 percent increase in USD selling prices, which were partially offset by portfolio changes of 2 percent. The higher volume was led by broad-based demand across all markets, particularly in automotive and electronic markets, with strong volume recovery in all regions, led by Asia Pacific. Higher USD selling prices were a combination of stronger product sales mix and higher USD selling prices in response to higher feedstock costs.

~~2010 PTOI was $994 million compared to $287 million in 2009. The increase in PTOI was primarily driven by higher sales volume, higher USD selling prices and improved productivity.~~

~~2009 versus 2008~~ Sales of $4.8 billion were 26 percent lower reflecting 18 percent lower volume, 6 percent decrease in USD selling prices, and a 2 percent reduction related to portfolio changes. The decrease in volume mainly reflects the effect of the global economic recession and the inventory destocking experienced during the first half 2009. However, sales continuously improved during the second half 2009, both sequentially and when compared to 2008, mainly due to overall economic recovery and higher sales to the motor vehicle industry. The lower USD selling prices were a combination of significantly weaker product sales mix, unfavorable currency impacts, and for certain products, lower USD selling prices in response to lower feedstock costs.

2009 PTOI was $287 million compared to $128 million in 2008. The improvement in PTOI reflects the impact of lower raw material, energy and freight costs, lower fixed costs, the absence of a $216 million hurricane-related charge in 2008, an $82 million benefit in 2009 from hurricane-related insurance recoveries and a reduction in the hurricane-related accrual, and the net year over year impact of the 2008 and 2009 restructuring activities. As of December 31, 2010, the company is aggressively pursuing additional insurance recoveries in the range of $50 – $100 million.

~~Outlook~~ 2011 sales are expected to grow due to anticipated increases in global motor vehicle OEMs builds and continued strength, particularly in Asia Pacific, for most of the markets served by the segment. PTOI is also expected to improve due to the impact of higher sales, improved fixed cost productivity and market-driven innovations for products and processes.

~~SAFETY & PROTECTION~~

Segment Sales
(Dollars in billions)

PTOI
(Dollars in millions)

2010
$ 3.4 $ 454
2009
$ 2.8 $ 260
2008
$ 3.7 $ 661

Safety & Protection's businesses satisfy the growing global needs of businesses, governments and consumers for solutions that make life safer, healthier and more secure. By uniting market-driven science with the strength of highly regarded brands, the segment delivers products and services to a large number of markets including, construction, transportation, communications, industrial chemicals, oil and gas, electric utilities, automotive, manufacturing, defense, homeland security and safety consulting. The following are Safety & Protection's operating businesses:

~~Protection Technologies~~ ~~is focused on finding solutions to protect people and the environment. With products like DuPont~~^TM Kevlar®, Nomex® and Tyvek®, the business continues to hold strong positions in life protection markets and meet the continued demand for body armor and personal protective gear for the military, law enforcement personnel, firefighters and other first responders, as well as for workers in the oil and gas industry around the world.

~~Building Innovations~~ is committed to the building science behind increasing the performance of building systems, helping reduce operating costs and creating more sustainable structures. The business is a market leader of solid surfaces through its Corian® and Montelli® lines of products which offer durable and versatile materials for residential and commercial purposes. Other products such as Tyvek® and Typar® offer leading solutions for the protection and energy efficiency of buildings.

~~Table of Contents~~

~~Part II~~

~~ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS,~~~~continued~~

~~Sustainable Solutions~~ continues to help organizations worldwide reduce workplace injuries and fatalities while improving operating costs, productivity and quality. Sustainable Solutions is a leader in the safety consulting field, selling training products, as well as consulting services. Additionally, Sustainable Solutions is dedicated to clean air, clean fuel and clean water with offerings that help reduce sulfur and other emissions, formulate cleaner fuels, or dispose of liquid waste. Its goal is to help maintain business continuity and environmental compliance for companies in the refining and petrochemical industries, as well as for government entities. In 2010, the business completed the acquisition of MECS, Inc., which is a leading global provider of process technology, proprietary specialty equipment and technical services to the sulfuric acid industry. The acquisition allows the business to expand its clean technologies portfolio by strengthening the business' clean air and clean fuel offerings and provide the company with further access to high-growth market segments, particularly in developing regions like Asia Pacific.

~~2010 versus 2009~~ Sales of $3.4 billion were 20 percent higher than last year, due to higher volume. The increase in volume reflects strong recovery and increased demand across all regions, led by Europe and Asia Pacific, and markets, particularly in aramid and nonwoven products. Further penetration in the U.S. commercial construction markets led to higher sales as recovery in global construction markets remained weak. Sales for consulting and training services improved modestly across most regions, led by Asia Pacific.

PTOI was $454 million compared to $260 million in the prior year. The increase in earnings was primarily due to higher volume and the absence of a net $45 million restructuring charge in prior year, partially offset by higher spending for growth initiatives and higher raw material costs.

~~2009 versus 2008~~ Sales of $2.8 billion were 25 percent lower than 2008, due to a 23 percent decline in volume and 3 percent lower USD selling prices, partially offset by a 1 percent increase from portfolio changes. The lower volume reflects decreased demand for products across all markets and regions due to the impact of the economic downturn. The lower USD selling prices were mainly due to unfavorable currency impact in Europe and Asia Pacific.

PTOI was $260 million compared to $661 million in 2008. The decrease in earnings was primarily due to the impact of lower volume and charges associated with low capacity utilization of production units, partially offset by fixed costs reductions.

~~Outlook~~ For 2011, sales are expected to benefit from improved global market conditions. Demand for Kevlar®, Nomex® and Tyvek® products is expected to increase across all regions with continued strength in industrial, consumer and automotive markets. Sales related to the Building Innovations business are expected to increase due to forecasted improvements in construction markets across most regions. Sales related to the Sustainable Solutions business are expected to increase modestly due to the completion of the MECS, Inc. acquisition in 2010. PTOI is expected to improve due to higher sales.

~~PHARMACEUTICALS~~

Segment Sales
(Dollars in billions)

PTOI
(Dollars in millions)

2010
$ - $ 489
2009
$ - $ 1,037
2008
$ - $ 1,025

On October 1, 2001, DuPont Pharmaceuticals was sold to the Bristol-Myers Squibb Company. DuPont retained its interest in Cozaar® (losartan potassium) and Hyzaar® (losartan potassium with hydrochlorothiazide). These drugs were developed in collaboration with Merck and are used in the treatment of hypertension. The U.S. patents covering the compounds, pharmaceutical formulation and use for the treatment of hypertension, including approval for pediatric use, expired in 2010. DuPont has exclusively licensed worldwide marketing and manufacturing rights for Cozaar® and Hyzaar® to Merck. Pharmaceuticals receive net proceeds and royalties as outlined below. Merck is responsible for manufacturing, marketing and selling Cozaar® and Hyzaar®.

~~Table of Contents~~

~~Part II~~

~~ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS,~~~~continued~~

Pharmaceuticals' Cozaar®/Hyzaar® income is the sum of two parts: income related to a share of the profits from North American sales and certain markets in EMEA, and royalty income derived from worldwide contract net sales linked to the exclusivity term in a particular country. Patents and exclusivity started to expire in prior years and the U.S. exclusivity for Cozaar® ended in April 2010. The worldwide agreement terminates when the following conditions are met: (i) the Canadian exclusivity ends, and (ii) North American sales fall below a certain level. The company experienced its first significant step-down in income from Cozaar®/Hyzaar® in 2010 and expects a continued step-down each subsequent year to zero when the contract ends. In general, management expects a traditional sales, earnings and cash decline for a drug going off patent in the pharmaceutical industry.

In the fourth quarter 2009, the company recorded a $63 million charge to other income, net and a reduction to accounts and notes receivable, net in the Pharmaceuticals segment to reflect increased rebates and other sales deductions related to the Cozaar®/Hyzaar® licensing agreement.

~~Outlook~~ Cozaar®/Hyzaar® income is expected to continue to substantially decrease due to the expiration of a majority of the worldwide patents which occurred in 2010. Earnings contributions to the company from the collaboration with Merck are expected to decline in 2011 about $290 million pre-tax from earnings generated in 2010.

~~OTHER~~

The company includes certain embryonic businesses not included in the reportable segments, such as Applied BioSciences and nonaligned businesses in Other. The potential viability of each embryonic business depends on a number of factors including successful product development, market acceptance and production ramp up capabilities. Using these factors and others, management periodically assesses the potential and fit of these businesses and may make investment adjustments based on such assessments. Applied BioSciences is focused on delivering cost advantaged products with superior performance and a smaller environmental footprint that are based on a unique combination of biological, chemical and material science capabilities. Specific global growth projects across the company are consolidated within Applied BioSciences to capitalize on the market opportunities and technology needs in this high-growth industry, including biomaterials and advanced biofuels products and technologies.

Applied BioSciences is developing two biofuels businesses: one to commercialize non-food, cellulosic ethanol and the second to commercialize biobutanol. DuPont is pursuing commercialization through two joint ventures: DuPont Danisco Cellulosic Ethanol LLC (DDCE) and Butamax™ Advanced Biofuels LLC, respectively. DDCE now operates a demonstration scale facility in Vonore, Tennessee and Butamax™ now operates a demonstration scale facility in Hull, United Kingdom. Both joint ventures are aggressively pursuing commercialization capabilities.

DuPont continues its joint venture with Tate & Lyle PLC, DuPont Tate and Lyle Bio Products LLC, to produce 1,3-propanediol (Bio-PDO™) using a proprietary fermentation and purification process. Bio-PDO™ is the key building block for DuPont™ Sorona® renewably sourced polymer. The joint venture also markets direct sale of Bio-PDO™ under the Zemea® propanediol and Susterra® propanediol brands as a key renewable ingredient in products ranging from industrial to personal care uses. DuPont Tate & Lyle Bio Products LLC is currently expanding capacity to support the production of Bio-PDO™, which is scheduled for completion in 2011.

In 2010, the Applied BioSciences business announced the formation, pending European Union approvals, of Actamax™ Surgical Materials LLC, a joint venture with Royal DSM N.V. Actamax™ will bring to market next-generation biomedical materials.

~~Nonaligned businesses include activities and costs associated with Benlate® fungicide and other discontinued businesses.~~

~~In the aggregate, sales in Other for 2010, 2009 and 2008 represent less than 1 percent of total segment sales.~~

~~2010 pre-tax loss of $205 million compared to a loss of $171 million in 2009, primarily reflecting an increase in litigation charges related to discontinued businesses.~~

~~Table of Contents~~

~~Part II~~

~~ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS,~~~~continued~~

2009 pre-tax loss of $171 million compared to a loss of $181 million in 2008. The lower pre-tax loss for the year was mainly due to the net year over year impact of the 2008 and 2009 restructuring activities, and lower pre-tax loss for Applied BioSciences.

~~Liquidity & Capital Resources~~

Management believes the company's ability to generate cash from operations and access to capital markets will be adequate to meet anticipated cash requirements to fund working capital, capital spending, dividend payments, debt maturities and other cash needs. The company's liquidity needs can be met through a variety of sources, including: cash provided by operating activities, cash and cash equivalents, marketable securities, commercial paper, syndicated credit lines, bilateral credit lines, equity and long-term debt markets and asset sales. The company's current strong financial position, liquidity and credit ratings provide excellent access to the capital markets. In addition, cash generating actions have been implemented including spending and working capital reductions and restructuring to better align expenditures and costs. The company will continue to monitor the financial markets in order to respond to changing conditions.

Pursuant to its cash discipline policy, the company seeks first to maintain a strong balance sheet and second, to return excess cash to shareholders unless the opportunity to invest for growth is compelling. Cash and cash equivalents and marketable securities balances of $6.8 billion as of December 31, 2010, provide primary liquidity to support all short-term obligations. The company has access to approximately $2.6 billion in unused credit lines with several major financial institutions, as additional support to meet short-term liquidity needs.

The company continually reviews its debt portfolio and occasionally may rebalance it to ensure adequate liquidity and an optimum debt maturity schedule. In 2010, the company issued $0.5 billion of 1.95% Senior Notes due January 15, 2016, $1.0 billion of 3.625% Senior Notes due January 15, 2021 and $0.5 billion of 4.90% Senior Notes due January 15, 2041. The company elected to use the net proceeds to redeem $0.5 billion of its 5.00% Senior Notes due January 15, 2013 and $0.8 billion of its 5.875% Senior Notes due January 15, 2014 and pay down commercial paper issued to fund the $0.5 billion voluntary contribution to its principal U.S. pension plan.

The company expects to finance the acquisition of Danisco with about $3.0 billion in existing cash and the remainder in new debt. The completion of the transaction is expected in the second quarter 2011 and is subject to customary closing conditions, including certain regulatory approvals and the tender of more than 90 percent of Danisco shares in the tender offer. In connection with this transaction, the company entered into a $4 billion bridge loan facility and a $2 billion bridge loan facility. The latter requires the company have cash, cash equivalents and marketable securities at least equal to $2 billion on hand at all times and readily available for use to purchase Danisco's shares. The bridge loan facilities terminate when the company completes the financing for the acquisition.

During 2010, Standard & Poor's and Moody's Investors Service revised the company's credit outlook to "Stable" from "Negative". After the announcement of the potential acquisition of Danisco, Moody's Investors Service placed all of the company's credit ratings under review for possible downgrade. Standard & Poor's has responded to the acquisition announcement by placing the company on credit watch with negative implications. Fitch Ratings announced it will take no immediate action with regard to the company's ratings.

~~Table of Contents~~

~~Part II~~

~~ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS,~~~~continued~~

The company remains committed to a strong financial position and strong investment-grade rating. The company's credit ratings impact its access to the debt capital market and cost of capital. The company's long-term and short-term credit ratings are as follows:

	~~Long term~~		~~Outlook~~


~~Standard & Poor's~~	A	~~A-1~~	~~Watch negative~~
~~Moody's Investors Service~~	A2	~~P-1~~	~~Under review for~~ ~~possible downgrade~~
~~Fitch Ratings~~	A	F1	~~Negative~~

(Dollars in millions)
2010 2009 2008
Cash provided by operating activities
$ 4,559 $ 4,741 $ 3,129

The company's cash provided by operating activities was $4.6 billion in 2010, a $0.2 billion decrease compared to 2009. Higher earnings were offset by changes in operating assets and liabilities, mainly due to higher sales and inventory; the stronger dollar, which was hedged with forward exchange contracts reflected in investing activities; and the voluntary contribution to the principal U.S. pension plan.

The company's cash provided by operating activities was $4.7 billion in 2009, a $1.6��billion increase from the $3.1 billion generated in 2008. The increase was primarily due to the benefit of the weaker dollar, which was hedged by forward exchange contracts in investing activities.

(Dollars in millions)
2010 2009 2008
Cash used for investing activities
$ (2,439 ) $ (4,298 ) $ (1,610 )

In 2010, cash used for investing activities totaled $2.4 billion compared to $4.3 billion used in 2009. The $1.9 billion decrease was mainly due to changes in investments in short-term financial instruments and a net increase in proceeds from forward exchange contract settlements, partially offset by an increase in payments for businesses and higher expenditures for the purchases of property, plant and equipment.

In 2009, cash used for investing activities totaled $4.3 billion compared to $1.6 billion used in 2008. The $2.7 billion increase was mainly due to the increase in investments in short-term financial instruments and the change in forward exchange contract settlements, partially offset by decreased capital expenditures.

Purchases of property, plant and equipment totaled $1.5 billion, $1.3 billion and $2.0 billion in 2010, 2009 and 2008, respectively. Spending in 2010 reflects the company's continued investment in capacity expansion to support areas of growth. The company expects 2011 purchases of plant, property and equipment to be $1.8 billion, an increase of $0.3 billion over 2010, driven by continued growth investments aligned with the company's global trends.

(Dollars in millions)
2010 2009 2008
Cash (used for) provided by financing activities
$ (1,829 ) $ (97 ) $ 878

The $1.7 billion increase in cash used for financing activities in 2010 was primarily due to a decrease in borrowings in 2010 as compared to an increase in borrowings in 2009. This was partially offset by an increase in the proceeds from the exercise of stock options net of cash used to repurchase common stock.

~~Table of Contents~~

~~Part II~~

~~ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS,~~~~continued~~

The $1.0 billion decrease in cash provided for financing activities in 2009 compared to 2008 was primarily due to changes in net borrowings. Net borrowings increased $1.4 billion in 2009 as compared to $2.1 billion in 2008.

(Dollars in millions)
2010 2009 2008
Cash provided by operating activities
$ 4,559 $ 4,741 $ 3,129
Purchases of property, plant and equipment
(1,508 ) (1,308 ) (1,978 )
Free cash flow
$ 3,051 $ 3,433 $ 1,151

Free cash flow is a measurement not recognized in accordance with generally accepted accounting principles (GAAP) and should not be viewed as an alternative to GAAP measures of performance. All companies do not calculate non-GAAP financial measures in the same manner and, accordingly, the company's free cash flow definition may not be consistent with the methodologies used by other companies. The company defines free cash flow as cash provided by operating activities less purchases of property, plant and equipment, and therefore indicates operating cash flow available for payment of dividends, other investing activities, and other financing activities. Free cash flow is useful to investors and management to evaluate the company's cash flow and financial performance, and is an integral financial measure used in the company's financial planning process.

~~2010 free cash flow of $3.1 billion exceeded the company's target of greater than $1.7 billion primarily due to higher earnings and working capital productivity.~~

Total debt at December 31, 2010 was $10.3 billion, a $0.7 billion decrease from December 31, 2009. The decrease in debt reflects the company's positive cash flow generated from general business activities.

Total debt at December 31, 2009 was $11.0 billion, a $1.4 billion increase from December 31, 2008. The proceeds from the increased borrowings were primarily invested in short-term financial instruments.

Dividends paid to common and preferred shareholders were $1.5 billion in 2010, 2009 and 2008. Dividends per share of common stock were $1.64 in 2010, 2009 and 2008. The common dividend declared in the first quarter 2011 was the company's 426^th ~~consecutive dividend since the company's first dividend in the fourth quarter 1904.~~

The company's Board of Directors authorized a $2 billion share buyback plan in June 2001. During 2010, the company purchased and retired 5.4 million shares at a total cost of $250 million under this plan. During 2009 and 2008, there were no purchases of stock under this plan. As of December 31, 2010, the company has purchased 25.9 million shares at a total cost of $1.2 billion. Management has not established a timeline for the buyback of the remaining shares of stock under this plan.

~~Cash, Cash Equivalents and Marketable Securities~~

Cash and cash equivalents and marketable securities totaled $6.8 billion at December 31, 2010, $6.1 billion at December 31, 2009 and $3.7 billion at December 31, 2008. The $0.7 billion increase from 2009 to 2010 was primarily due to the company's positive cash flow generated from general business activities. The $2.4 increase from 2008 to 2009 was primarily due to cash proceeds from increased borrowings and cash generated from general business activities.

Off-Balance Sheet Arrangements

Certain Guarantee Contracts

~~Indemnifications~~

In connection with acquisitions and divestitures, the company has indemnified respective parties against certain liabilities that may arise in connection with acquisitions and divestitures and related business activities prior to the completion of the transaction. The term of these indemnifications, which typically pertain to environmental, tax and product liabilities, is generally indefinite. In addition, the company indemnifies its duly elected or appointed directors and officers to the fullest extent permitted by Delaware law, against liabilities incurred as a result of their activities for the

~~Table of Contents~~

~~Part II~~

~~ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS,~~~~continued~~

company, such as adverse judgments relating to litigation matters. If the indemnified party were to incur a liability or have a liability increase as a result of a successful claim, pursuant to the terms of the indemnification, the company would be required to reimburse the indemnified party. The maximum amount of potential future payments is generally unlimited. The carrying amounts recorded for all indemnifications as of December 31, 2010 and 2009 were $100 million. Although it is reasonably possible that future payments may exceed amounts accrued, due to the nature of indemnified items, it is not possible to make a reasonable estimate of the maximum potential loss or range of loss. No assets are held as collateral and no specific recourse provisions exist.

In connection with the 2004 sale of the majority of the net assets of Textiles and Interiors, the company indemnified the purchasers, subsidiaries of Koch Industries, Inc. (INVISTA), against certain liabilities primarily related to taxes, legal and environmental matters and other representations and warranties under the Purchase and Sale Agreement. The estimated fair value of the indemnity obligations under the Purchase and Sale Agreement was $70 million and was included in the indemnifications balance of $100 million at December 31, 2010. Under the Purchase and Sale Agreement, the company's total indemnification obligation for the majority of the representations and warranties cannot exceed $1.4 billion. The other indemnities are not subject to this limit. In March 2008, INVISTA filed suit in the Southern District of New York alleging that certain representations and warranties in the Purchase and Sale Agreement were breached and, therefore, that DuPont is obligated to indemnify it. DuPont disagrees with the extent and value of INVISTA's claims. DuPont has not changed its estimate of its total indemnification obligation under the Purchase and Sale Agreement as a result of the lawsuit.

~~Obligations for Equity Affiliates and Others~~

The company has directly guaranteed various debt obligations under agreements with third parties related to equity affiliates, customers, suppliers and other affiliated companies. At December 31, 2010, the company had directly guaranteed $544 million of such obligations, and $16 million relating to guarantees of obligations for divested subsidiaries. This represents the maximum potential amount of future (undiscounted) payments that the company could be required to make under the guarantees. The company would be required to perform on these guarantees in the event of default by the guaranteed party. At December 31, 2010 and 2009, a liability of $109 million and $146 million, respectively, was recorded for these obligations, representing the amount of payment/performance risk which the company deems probable. This liability is principally related to obligations of the company's polyester films joint venture which are guaranteed by the company.

Existing guarantees for customers and suppliers arose as part of contractual agreements. Existing guarantees for equity affiliates and other affiliated companies arose for liquidity needs in normal operations. In certain cases, the company has recourse to assets held as collateral as well as personal guarantees from customers and suppliers.

The company has guaranteed certain obligations and liabilities related to a divested subsidiary, Conoco, which has indemnified the company for any liabilities the company may incur pursuant to these guarantees. No material loss is anticipated by reason of such agreements and guarantees. At December 31, 2010 and 2009, the company had no liabilities recorded for these obligations.

~~Additional information~~Information with respect to the company's guarantees is included in Note 1916 to the Consolidated Financial Statements. Historically, the company has not had to make significant payments to satisfy guarantee obligations; however, the company believes it has the financial resources to satisfy these guarantees.

~~Table of Contents~~

~~Part II~~

~~ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS,~~~~continued~~

Contractual Obligations

Information related to the company's significant contractual obligations is summarized in the following table:



				Payments Due In										Payments Due In
(Dollars in millions)	(Dollars in millions)		Total at December 31, 2010		2011		2012 – 2013		2014 – 2015		2016 and beyond	Total at December 31, 2013		2014		2015 – 2016		2017 – 2018		2019 and beyond
Long-term debt obligations¹	Long-term debt obligations¹	$	10,137	$	4	$	1,647	$	2,106	$	6,380	$	12,392	$	1,674	$	3,026	$	1,361	$	6,331
Expected cumulative cash requirements for interest payments through maturity	Expected cumulative cash requirements for interest payments through maturity		3,858		431		803		623		2,001	4,047		429		776		648		2,194
Capital leases¹	Capital leases¹		5		1		-		1		3	26		3		6		3		14
Operating leases	Operating leases		982		227		357		219		179	1,524		288		501		388		347
Purchase obligations²	Purchase obligations²
	Information technology infrastructure & services		246		114		116		16		-
	Raw material obligations		282		125		106		40		11
	Utility obligations		241		99		67		22		53
	INVISTA-related obligations³		1,537		124		284		329		800
	Human resource services		72		36		36		-		-
	Other⁴		23		18		5		-		-
Information technology infrastructure & services												174		108		62		4		—
Raw material obligations												740		512		140		65		23
Utility obligations												295		69		98		39		89
INVISTA-related obligations³												1,533		117		282		328		806
Human resource services												62		31		30		1		—
Other												220		153		58		7		2
Total purchase obligations	Total purchase obligations		2,401		516		614		407		864	3,024		990		670		444		920
Other liabilities^1,5
	Workers' compensation		83		14		36		15		18
	Asset retirement obligations		59		2		3		19		35
	Environmental remediation		407		90		154		83		80
	Legal settlements		87		85		2		-		-
	License agreement⁶		413		90		174		149		-
	Other⁷		147		34		24		25		64
Other liabilities^1,4
Workers' compensation												96		14		43		18		21
Asset retirement obligations												63		2		10		4		47
Environmental remediation												458		84		168		67		139
Legal settlements												89		76		5		4		4
License agreements⁵												2,159		326		541		572		720
Other⁶												193		65		29		17		82
Total other long-term liabilities	Total other long-term liabilities		1,196		315		393		291		197	3,058		567		796		682		1,013
Total contractual obligations⁸		$	18,579	$	1,494	$	3,814	$	3,647	$	9,624

Total contractual obligations⁷												$	24,071	$	3,951	$	5,775	$	3,526	$	10,819


^1.	The long-term employee benefit plan charges relating to discontinued operations was $5, $74 and $72 for 2013, 2012 and 2011, respectively.

~~ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK,~~~~continued~~

~~contract period. Derivative instruments having a high correlation to the underlying commodity are used to hedge the commodity price risk involved in compensating growers.~~

The company utilizes derivatives to manage the price volatility of soybean meal. These derivative instruments have a high correlation to the underlying commodity exposure and are deemed effective in offsetting soybean meal feedstock price risk.

~~Additional details on these and other financial instruments are set forth in Note 23 to the Consolidated Financial Statements.~~

~~The following should be read in conjunction with the previously referenced Consolidated Financial Statements:~~

~~E.I. du Pont de Nemours and Company~~

~~Index to the Consolidated Financial Statements~~

(Dollars in ~~millions)~~millions, except per share)

For the year ended December 31,

2010

2009

2008

Operating activities

Net income
$ 3,052 $ 1,769 $ 2,010
Adjustments to reconcile net income to cash provided by operating activities:

Depreciation
1,204 1,251 1,169

Amortization of intangible assets
176 252 275

Other noncash charges and credits – net
809 976 814

Contributions to pension plans
(782 ) (306 ) (252 )

(Increase) decrease in operating assets:

Accounts and notes receivable
(481 ) 69 488

Inventories and other operating assets
(512 ) 481 (663 )

Increase (decrease) in operating liabilities:

Accounts payable and other operating liabilities
1,010 (115 ) (515 )

Accrued interest and income taxes
83 364 (197 )

Cash provided by operating activities
4,559 4,741 3,129
Investing activities

Purchases of property, plant and equipment
(1,508 ) (1,308 ) (1,978 )
Investments in affiliates
(100 ) (124 ) (55 )
Payments for businesses – net of cash acquired
(637 ) (13 ) (144 )
Proceeds from sale of assets – net of cash sold
195 91 50
Net (increase) decrease in short-term financial instruments
(457 ) (2,016 ) 40
Forward exchange contract settlements
176 (927 ) 508
Other investing activities – net
(108 ) (1 ) (31 )

Cash used for investing activities
(2,439 ) (4,298 ) (1,610 )
Financing activities

Dividends paid to stockholders
(1,501 ) (1,492 ) (1,496 )
Net increase (decrease) in short-term (less than 90 days) borrowings
20 (317 ) (891 )
Long-term and other borrowings:

Receipts
2,061 3,685 3,527

Payments
(2,859 ) (1,977 ) (547 )
Repurchase of common stock
(250 ) — —
Proceeds from exercise of stock options
708 1 94
Proceeds from termination of interest rate swap
— — 226
Other financing activities – net
(8 ) 3 (35 )

Cash (used for) provided by financing activities
(1,829 ) (97 ) 878
Effect of exchange rate changes on cash
(49 ) 30 (57 )
Increase in cash and cash equivalents
242 376 2,340
Cash and cash equivalents at beginning of year
4,021 3,645 1,305
Cash and cash equivalents at end of year
$ 4,263 $ 4,021 $ 3,645
Supplemental cash flow information:

Cash paid during the year for

Interest, net of amounts capitalized
$ 623 $ 403 $ 336

Taxes
416 63 609



	Preferred Stock		Common Stock			Additional Paid-in Capital			Reinvested Earnings			Accumulated Other Compre- hensive Loss			Treasury Stock			Non- controlling Interests			Total Equity
2011
Balance January 1, 2011	$	237	$	301		$	9,227		$	12,075		$	(5,790	)	$	(6,727	)	$	477		$	9,800
Sale of a majority interest in a consolidated subsidiary																		(3		)	(3		)
Net income									3,559									40			3,599
Other comprehensive income (loss)												(2,960		)				(18		)	(2,978		)
Common dividends ($1.64 per share)									(1,531		)							(11		)	(1,542		)
Preferred dividends									(10		)										(10		)
Common stock issued - compensation plans			7			1,007															1,014
Common stock repurchased															(672		)				(672		)
Common stock retired			(4		)	(127		)	(541		)				672						—
Balance December 31, 2011	$	237	$	304		$	10,107		$	13,552		$	(8,750	)	$	(6,727	)	$	485		$	9,208
2012
Acquisitions of a noncontrolling interest in consolidated subsidiaries						(2		)										(386		)	(388		)
Net income									2,755									25			2,780
Other comprehensive income (loss)												104						28			132
Common dividends ($1.70 per share)									(1,593		)							(61		)	(1,654		)
Preferred dividends									(10		)										(10		)
Common stock issued - compensation plans			4			627															631
Common stock repurchased															(400		)				(400		)
Common stock retired			(2		)	(77		)	(321		)				400						—
Balance December 31, 2012	$	237	$	306		$	10,655		$	14,383		$	(8,646	)	$	(6,727	)	$	91		$	10,299
2013
Sale of a majority interest in a consolidated subsidiary																		(34		)	(34		)
Acquisitions of a noncontrolling interest in consolidated subsidiaries						4															4
Net income									4,848									14			4,862
Other comprehensive income (loss)												3,205						(2		)	3,203
Common dividends ($1.78 per share)									(1,658		)							(12		)	(1,670		)
Preferred dividends									(10		)										(10		)
Common stock issued - compensation plans			4			628															632
Common stock repurchased															(1,000		)				(1,000		)
Common stock retired			(6		)	(215		)	(779		)				1,000						—
Balance December 31, 2013	$	237	$	304		$	11,072		$	16,784		$	(5,441	)	$	(6,727	)	$	57		$	16,286

See Notes to the Consolidated Financial Statements beginning on page ~~F-8.~~

F-9.

F-7

~~Table of Contents~~

E. I. du Pont de Nemours and Company
Consolidated Financial Statements
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in millions)
For the year ended December 31, 2013 2012 2011
Operating activities

Net income $ 4,862
$ 2,780
$ 3,599
Adjustments to reconcile net income to cash provided by operating activities:

Depreciation 1,280
1,376
1,283
Amortization of intangible assets 323
337
277
Other operating charges and credits – net 859
1,185
991
Contributions to pension plans (313 ) (848 ) (341 )
Gain on sale of business (2,687 ) —
—
(Increase) decrease in operating assets:

Accounts and notes receivable (883 ) 114
(360 )
Inventories and other operating assets (526 ) (812 ) (1,018 )
Increase (decrease) in operating liabilities:

Accounts payable and other operating liabilities 418
1,037
528
Accrued interest and income taxes (154 ) (320 ) 193
Cash provided by operating activities 3,179
4,849
5,152
Investing activities

Purchases of property, plant and equipment (1,882 ) (1,793 ) (1,843 )
Investments in affiliates (58 ) (97 ) (67 )
Payments for businesses – net of cash acquired (133 ) (18 ) (6,459 )
Proceeds from sale of business - net 4,841
—
—
Proceeds from sale of assets – net 142
302
214
Net (increase) decrease in short-term financial instruments (45 ) 315
2,149
Forward exchange contract settlements 40
(40 ) (227 )
Other investing activities – net 40
(15 ) (5 )
Cash provided by (used for) investing activities 2,945
(1,346 ) (6,238 )
Financing activities

Dividends paid to stockholders (1,661 ) (1,594 ) (1,533 )
Net increase (decrease) in short-term (less than 90 days) borrowings 16
(200 ) 185
Long-term and other borrowings:

Receipts 2,013
323
2,539
Payments (1,312 ) (916 ) (1,163 )
Repurchase of common stock (1,000 ) (400 ) (672 )
Proceeds from exercise of stock options 536
550
952
Payments for noncontrolling interest (65 ) (470 ) —
Other financing activities – net (1 ) 10
95
Cash (used for) provided by financing activities (1,474 ) (2,697 ) 403
Effect of exchange rate changes on cash (88 ) (13 ) 6
Cash classified as held for sale —
(95 ) —
Increase (decrease) in cash and cash equivalents 4,562
698
(677 )
Cash and cash equivalents at beginning of year 4,379
3,586
4,263
Cash and cash equivalents at end of year $ 8,941
$ 4,284
$ 3,586
Supplemental cash flow information:

Cash paid during the year for

Interest, net of amounts capitalized $ 489
$ 501
$ 455
Income taxes 1,323
1,054
527
See Notes to the Consolidated Financial Statements beginning on page F-9.

F-8

E. I. du Pont de Nemours and Company
Notes to the Consolidated Financial Statements (continued)
(Dollars in millions, except per share)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The company follows generally accepted accounting principles in the United States of America (GAAP). The significant accounting policies described below, together with the other notes that follow, are an integral part of the Consolidated Financial Statements.

Preparation of Financial Statements

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Basis of Consolidation

The Consolidated Financial Statements include the accounts of the company, subsidiaries in which a controlling interest is maintained and variable interest entities (VIEs) for which DuPont is the primary beneficiary. At December 31, 2010, the assets, liabilities and operations of VIEs for which DuPont is the primary beneficiary were not material to the Consolidated Financial Statements of the company. The company is also involved with other entities that are VIEs for which the company is not currently the primary beneficiary. Future events may require these VIEs to be consolidated if the company becomes the primary beneficiary. At December 31, 2010, the assets and liabilities of the other VIEs were not material to the Consolidated Financial Statements of the company. The company's share of the net income (loss) of these VIEs is included in other income, net, in the Consolidated Income Statements and is not material.

For those consolidated subsidiaries in which the company's ownership is less than 100 percent, the outside stockholders' interests are shown as noncontrolling interests. Investments in affiliates over which the company has significant influence but not a controlling interest are carried on the equity ~~basis. This includes majority-owned entities~~method. At December 31, 2013, the assets, liabilities and operations of VIEs for which DuPont is the primary beneficiary were not material to the Consolidated Financial Statements of the company.

The company is also involved with certain joint ventures accounted for under the equity method of accounting that are VIEs. The company is not the primary beneficiary, as the nature of the company's involvement with the VIEs does not provide it the power to direct the VIEs significant activities. Future events may require these VIEs to be consolidated if the company becomes the primary beneficiary. At December 31, 2013, the maximum exposure to loss related to the unconsolidated VIEs is not considered material to the Consolidated Financial Statements of the company.

Basis of Presentation

Certain reclassifications of prior year's data have been made to conform to current year's presentation, including separately stating cost of goods sold and other operating charges on the Consolidated Income Statements. In the third quarter 2012, the company signed a definitive agreement to sell its Performance Coatings business (which represented a reportable segment). In accordance with GAAP, the results of Performance Coatings are presented as discontinued operations and, as such, have been excluded from continuing operations and segment results for all periods presented. The sum of the individual earnings per share amounts from continuing and discontinued operations may not equal the total company earnings per share amounts due to rounding. The assets and liabilities of Performance Coatings at December 31, 2012 are presented as held for sale in the Consolidated Balance Sheet. The cash flows and comprehensive income related to Performance Coatings have not been segregated and are included in the Consolidated Statements of Cash Flows and Comprehensive Income, respectively, for all periods presented. Amounts related to Performance Coatings are consistently included in or excluded from the Notes to the Consolidated Financial Statements based on the financial statement line item and period of each disclosure.

In November 2013, DuPont entered into a definitive agreement to sell Glass Laminating Solutions/Vinyls (GLS/Vinyls). The assets related to GLS/Vinyls at December 31, 2013 are presented as held for sale in the Consolidated Balance Sheet. The sale of GLS/Vinyls does not ~~consolidate because a minority investor holds substantive participating rights. Investments~~meet the criteria for discontinued operations and as such, earnings are included in ~~affiliates over which~~ the ~~company does not have significant influence are accounted~~company’s income from continuing operations.

See Note 2 to the Consolidated Financial Statements for byfurther information relating to the ~~cost method or as available-for-sale securities.~~

above matters.

F-9

E. I. du Pont de Nemours and Company

Notes to the Consolidated Financial Statements (continued)

(Dollars in millions, except per share)

Revenue Recognition

The company recognizes revenue when the earnings process is complete. The company's revenues are from the sale of a wide range of products to a diversified base of customers around the world. Revenue for product sales is recognized upon delivery, when title and risk of loss have been transferred, collectability is reasonably assured and pricing is fixed or determinable. Substantially all product sales are sold FOB (free on board) shipping point or, with respect to ~~non-U.S.~~non United States of America (U.S.) customers, an equivalent basis. Accruals are made for sales returns and other allowances based on the company's experience. The company accounts for cash sales incentives as a reduction in sales and noncash sales incentives as a charge to cost of goods sold or selling expense, depending on the nature of the incentive. Amounts billed to customers for shipping and handling fees are included in net sales and costs incurred by the company for the delivery of goods are classified as cost of goods sold ~~and other operating charges~~ in the Consolidated Income Statements. Taxes on revenue-producing transactions are excluded from net sales.

The company periodically enters into prepayment contracts with customers in the Agriculture ~~& Nutrition~~ segment and receives advance payments for product to be delivered in future periods. These advance payments are recorded as deferred revenue ~~and are included in~~(classified as other accrued ~~liabilities~~liabilities) or debt, depending on the ~~Consolidated Balance Sheets.~~nature of the program. Revenue associated with advance payments is recognized as shipments are made and title, ownership and risk of loss pass to the ~~customer.~~

customer.

Licensing and royalty income is recognized in accordance with agreed upon terms, when performance obligations are satisfied, the amount is fixed or determinable and collectability is reasonably assured.

~~Table of Contents~~

~~E. I. du Pont de Nemours and Company~~
~~Notes to the Consolidated Financial Statements (continued)~~
~~(Dollars in millions, except per share)~~

Cash and Cash Equivalents

Cash equivalents represent investments with maturities of three months or less from time of purchase. They are carried at cost plus accrued ~~interest, which approximates~~interest. The estimated fair value ~~because~~ of the ~~short-term~~company's cash equivalents was determined using level 1 and level 2 inputs within the fair value hierarchy, as described below. The company held $5,116 and $0 of money market funds (level 1 measurements) as of December 31, 2013 and 2012, respectively. The company held $2,256 and $2,026 of other cash equivalents (level 2 measurements) as of December 31, 2013 and 2012, respectively.

Based on observed net asset values and current interest rates for similar investments with comparable credit risk and time to maturity, the fair value of ~~these instruments.~~

the company's cash equivalents approximates its stated value as of December 31, 2013 and 2012.

Marketable Securities

~~Investments in Securities~~

Marketable securities represent investments in fixed and floating rate financial instruments with maturities greater than three months and up to twelve months at time of purchase. They are classified as held-to-maturity and recorded at amortized cost. The carrying value approximates fair value due to the short-term nature of the investments.

Other assets include long-term investments in securities, which comprise investments for which market values are not readily available (cost investments) and available-for-sale securities that are reported at fair value (see Note 13).

Fair Value Measurements

Under the accounting for fair value measurements and disclosures, a fair value hierarchy was established that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). A financial instrument's level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

The company uses the following valuation techniques to measure fair value for its assets and liabilities:



Level 1		–	Quoted market prices in active markets for identical assets or liabilities;

Level 2	–	–	Significant other observable inputs (e.g. quoted prices for similar items in active markets, quoted prices for identical or similar items in markets that are not active, inputs other than quoted prices that are observable such as interest rate and yield curves, and market-corroborated inputs);

Level 3	–	–	Unobservable inputs for the asset or liability, which are valued based on management's estimates of assumptions that market participants would use in pricing the asset or liability.

Inventories

The ~~majority of the~~ company's ~~inventories are valued at cost, as determined by the last-in, first-out (LIFO) method; in the aggregate, such valuations are not in excess of market. Seed~~ inventories are valued at the lower of cost ~~as determined by the first-in, first-out (FIFO) method,~~ or market.

Elements of cost in inventories include raw materials, direct labor and manufacturing overhead. Stores and supplies are valued at cost or market, whichever is lower; cost is generally determined by the average cost method.

F-10

E. I. du Pont de Nemours and Company

Notes to the Consolidated Financial Statements (continued)

(Dollars in millions, except per share)

As of December 31, 2013 and 2012 approximately 50 percent, 25 percent and 25 percent of the company’s inventories were accounted for under the first-in first out (FIFO), last-in first out (LIFO) and average cost methods, respectively. Inventories accounted for under the FIFO method are primarily comprised of products with shorter shelf lives such as seeds, certain food-ingredients and enzymes.

Change in Accounting Policy

Effective January 1, 2013, the company changed its method of valuing inventory held at a majority of its foreign and certain U.S. locations from the LIFO method to the average cost method. The company believes that the average cost method is preferable to the LIFO method as it more clearly aligns with how the company actually manages its inventory and will improve financial reporting by better matching revenues and expenses, for these inventories. In addition, the change from LIFO to average cost will enhance the comparability of our financial results with our peer companies. As described in the guidance for accounting changes, the comparative Consolidated Financial Statements of prior periods are adjusted to apply the new accounting method retrospectively.

The following line items within the Consolidated Income Statements were affected by the change in accounting policy for the years ended December 31, 2013, 2012 and 2011:



	2013							2012							2011
	As reported		As reported under LIFO		Change: (Decrease)/Increase			As reported		As reported under LIFO		Change: (Decrease)/Increase			As reported		As reported under LIFO		Change: (Decrease)/Increase
Cost of goods sold	$	22,548	$	22,578	$	(30	)	$	21,538	$	21,511	$	27		$	21,264	$	21,362	$	(98	)
Income from continuing operations before income taxes	3,489		3,459		30			3,088		3,115		(27		)	3,879		3,781		98
Provision for income taxes on continuing operations	626		617		9			616		622		(6		)	647		626		21
Income from continuing operations after income taxes	2,863		2,842		21			2,472		2,493		(21		)	3,232		3,155		77
Income from discontinued operations after income taxes	1,999		1,999		—			308		320		(12		)	367		355		12
Net income	$	4,862	$	4,841	$	21		$	2,780	$	2,813	$	(33	)	$	3,599	$	3,510	$	89

Income from noncontrolling interest increased by $4 for the year ended December 31, 2011, as a result of the above accounting policy change.

Basic earnings per share from continuing operations increased/(decreased) by $0.02, $(0.02) and $0.08 for the years ended December 31, 2013, 2012 and 2011 respectively, as a result of the above accounting policy change.

Diluted earnings per share from continuing operations increased/(decreased) by $0.02, $(0.02) and $0.08 for the years ended December 31, 2013, 2012 and 2011 respectively, as a result of the above accounting policy change.

Inventory and Stockholder's Equity increased by $91 and $45, respectively, as of January 1, 2011, as a result of the above accounting policy change.

There was no impact on cash provided by operating activities as a result of the above change.

Property, Plant and Equipment

Property, plant and equipment is carried at cost and is depreciated using the straight-line method. Property, plant and equipment placed in service prior to 1995 is depreciated under the sum-of-the-years' digits method or other substantially similar methods. Substantially all equipment and buildings are depreciated over useful lives ranging from 15 to 25 years. Capitalizable costs associated with computer software for internal use are amortized on a straight-line basis over 5 to 7 years. When assets are surrendered, retired, sold or otherwise disposed of, their gross carrying values and related accumulated depreciation are removed from the accounts and included in determining gain or loss on such disposals.

Maintenance and repairs are charged to operations; replacements and improvements are capitalized.

~~Table of Contents~~

F-11

E. I. du Pont de Nemours and Company

Notes to the Consolidated Financial Statements (continued)

(Dollars in millions, except per share)

Goodwill and Other Intangible Assets

Goodwill represents the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. Goodwill and indefinite-lived intangible assets are tested for impairment at least annually; however, these tests are performed more frequently when events or changes in circumstances indicate that the asset may be impaired. Impairment exists when carrying value ~~may not be recoverable.~~exceeds fair value. The company's fair value methodology is based on prices of similar assets or other valuation methodologies including ~~present value~~discounted cash flow techniques. ~~Impairment losses are included in cost of goods sold and other operating charges.~~

Definite-lived intangible assets, such as purchased and licensed technology, patents and customer lists are amortized over their estimated useful lives, generally for periods ranging from 51 to 20 years. The company continually evaluates the reasonableness of the useful lives of these assets. Once these assets are fully amortized, they are removed from the Consolidated Balance Sheets.

Impairment of Long-Lived Assets

The company evaluates the carrying value of long-lived assets to be held and used when events or changes in circumstances indicate the carrying value may not be recoverable. The carrying value of a long-lived asset is considered impaired when the total projected undiscounted cash flows from the asset are separately identifiable and are less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset. The company's fair value methodology is an estimate of fair market value which is made based on prices of similar assets or other valuation methodologies including present value techniques. Long-lived assets to be disposed of other than by sale are classified as held for use until their disposal. Long-lived assets to be disposed of by sale are classified as held for sale and are reported at the lower of carrying amount or fair market value less cost to sell. Depreciation is discontinued for long-lived assets classified as held for sale.

Research and Development

Research and development costs are expensed as incurred.

Research and development expenses include costs (primarily consisting of employee costs, materials, contract services, research agreements, and other external spend) relating to the discovery and development of new products, enhancement of existing products and regulatory approval of new and existing products.

Environmental

Accruals for environmental matters are recorded in operating expenses when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated. Accrued liabilities do not include claims against third parties and are not discounted.

Costs related to environmental remediation and restoration are charged to expense. Other environmental costs are also charged to expense unless they increase the value of the property or reduce or prevent contamination from future operations, in which case, they are capitalized.

Asset Retirement Obligations

The company records asset retirement obligations at fair value at the time the liability is incurred. Accretion expense is recognized as an operating expense using the credit-adjusted risk-free interest rate in effect when the liability was recognized. The associated asset retirement obligations are capitalized as part of the carrying amount of the long-lived asset and depreciated over the estimated remaining useful life of the asset, generally for periods ranging from 1 to 2025 years.

Litigation

The company accrues for liabilities related to litigation matters when the information available indicates that it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated. Legal costs such as outside counsel fees and expenses are charged to expense in the period incurred.

~~Table of Contents~~

~~E. I. du Pont de Nemours and Company~~
~~Notes to the Consolidated Financial Statements (continued)~~
~~(Dollars in millions, except per share)~~

Insurance/Self-Insurance

The company self-insures certain risks where permitted by law or regulation, including workers' compensation, vehicle liability and employee related benefits. Liabilities associated with these risks are estimated in part by considering historical claims experience, demographic factors and other actuarial assumptions. For other risks, the company uses a combination of insurance and self-insurance, reflecting comprehensive reviews of relevant risks.

A receivable for an insurance recovery is generally recognized when the loss has occurred and collection is considered probable.

F-12

E. I. du Pont de Nemours and Company

Notes to the Consolidated Financial Statements (continued)

(Dollars in millions, except per share)

Income Taxes

The provision for income taxes is determined using the asset and liability approach of accounting for income taxes. Under this approach, deferred taxes represent the future tax consequences expected to occur when the reported amounts of assets and liabilities are recovered or paid. The provision for income taxes represents income taxes paid or payable for the current year plus the change in deferred taxes during the year. Deferred taxes result from differences between the financial and tax basis of the company's assets and liabilities and are adjusted for changes in tax rates and tax laws when changes are enacted. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. Provision has been made for income taxes on unremitted earnings of subsidiaries and affiliates, except for subsidiaries in which earnings are deemed to be indefinitely invested. Investment tax credits or grants are accounted for in the period earned (the flow-through method). Interest accrued related to unrecognized tax benefits is included in miscellaneous income and expenses, net, under other income, net. Income tax related penalties are included in the provision for income taxes.

Foreign Currency Translation

The company's worldwide operations utilize the U.S. dollar ~~(USD) is~~or local currency as the functional currency, ~~of most of the company's worldwide operations.~~where applicable. For subsidiaries where the ~~USD~~U.S. dollar (USD) is the functional currency, all foreign currency asset and liability amounts are remeasured into USD at end-of-period exchange rates, except for inventories, prepaid expenses, property, plant and equipment, goodwill and other intangible assets, which are remeasured at historical rates. Foreign currency income and expenses are remeasured at average exchange rates in effect during the year, except for expenses related to balance sheet amounts remeasured at historical exchange rates. Exchange gains and losses arising from remeasurement of foreign currency-denominated monetary assets and liabilities are included in income in the period in which they occur.

For subsidiaries where the local currency is the functional currency, assets and liabilities denominated in local currencies are translated into USD at end-of-period exchange rates and the resultant translation adjustments are reported, net of their related tax effects, as a component of accumulated other comprehensive income (loss) in ~~stockholders'~~ equity. Assets and liabilities denominated in other than the local currency are remeasured into the local currency prior to translation into USD and the resultant exchange gains or losses are included in income in the period in which they occur. Income and expenses are translated into USD at average exchange rates in effect during the period.

Hedging and Trading Activities

Derivative instruments are reported onin the Consolidated Balance Sheets at their fair values. For derivative instruments designated as fair value hedges, changes in the fair values of the derivative instruments will generally be offset onin the income statement by changes in the fair value of the hedged items. For derivative instruments designated as cash flow hedges, the effective portion of any hedge is reported in accumulated other comprehensive income (loss) until it is cleared to earnings during the same period in which the hedged item affects earnings. The ineffective portion of all hedges is recognized in current period earnings. Changes in the fair values of derivative instruments that are not designated as hedges are recorded in current period earnings.

In the event that a derivative designated as a hedge of a firm commitment or an anticipated transaction is terminated prior to the maturation of the hedged transaction, gains or losses realized at termination are deferred and included in the measurement of the hedged transaction. If a hedged transaction matures, or is sold, extinguished, or terminated prior to the maturity of a derivative designated as a hedge of such transaction, gains or losses associated with the derivative through the date the transaction matured are included in the measurement of the hedged transaction and the derivative is reclassified as for trading purposes. Derivatives designated as a hedge of an anticipated transaction are reclassified as for trading purposes if the anticipated transaction is no longer probable.

~~Table of Contents~~

~~E. I. du Pont de Nemours and Company~~
~~Notes to the Consolidated Financial Statements (continued)~~
~~(Dollars in millions, except per share)~~

Cash flows from derivative instruments accounted for as either fair value hedges or cash flow hedges are reported in the same category as the cash flows from the items being hedged. Cash flows from all other derivative instruments are generally reported as investing activities in the Consolidated Statements of Cash Flows. See Note 2320 for additional discussion regarding the company's objectives and strategies for derivative instruments.

~~Reclassifications~~

~~Certain reclassifications of prior years' data have been made to conform to 2010 classifications.~~

~~2. OTHER INCOME, NET~~

2010

2009

2008

Cozaar®/Hyzaar® income
$ 483 $ 1,032 $ 1,019
Royalty income
146 127 111
Interest income
93 91 138
Equity in earnings of affiliates, excluding exchange gains/losses¹
179 86 117
Net gains on sales of assets
127 63 40
Net exchange gains (losses)¹
(13 ) (205 ) (255 )
Miscellaneous income and expenses, net²
213 25 137
$ 1,228 $ 1,219 $ 1,307

1: The company routinely uses foreign currency exchange contracts to offset its net exposures, by currency, related to the foreign currency-denominated monetary assets and liabilities. The objective of this program is to maintain an approximately balanced position in foreign currencies in order to minimize, on an after-tax basis, the effects of exchange rate changes on net monetary asset positions. The net pre-tax exchange gains and losses are partially offset by the associated tax impact. Exchange gains (losses) related to earnings of affiliates was $(2), $13 and $(36) for 2010, 2009 and 2008, respectively.
2: ~~Miscellaneous income and expenses, net, includes interest items, insurance recoveries, litigation settlements, and other items.~~

~~3. INTEREST EXPENSE~~

2010

2009

2008

Interest incurred
$ 628 $ 455 $ 425
Interest capitalized
(38 ) (47 ) (49 )

$ 590 $ 408 $ 376

~~Interest expense increased in 2010 as a result of the $179 pre-tax charge on the early extinguishment of debt in the fourth quarter 2010 (see Note 17).~~

F-13

~~Table of Contents~~

E. I. du Pont de Nemours and Company

Notes to the Consolidated Financial Statements (continued)

(Dollars in millions, except per share)

2. DIVESTITURES

Glass Laminating Solutions/Vinyls

In November 2013, DuPont entered into a definitive agreement to sell GLS/Vinyls, a part of Packaging & Industrial Polymers, to Kuraray Co. Ltd. for

~~4. EMPLOYEE SEPARATION/ASSET RELATED CHARGES, NET~~$543

At, plus the value of the inventories. The sale is expected to close about mid-2014 pending customary closing conditions, including timing of antitrust clearance.

The assets classified as held for sale at December 31, ~~2010, total liabilities relating~~2013 related to ~~prior restructuring activities were $63.~~

GLS/Vinyls primarily consist of inventory and property, plant and equipment.

Performance Coatings

~~2009 Restructuring Program~~

In ~~the second quarter 2009, in response to the global economic recession,~~February 2013, the company ~~committed~~sold its Performance Coatings business to ~~an initiative~~Flash Bermuda Co. Ltd., a Bermuda exempted limited liability company formed by affiliates of The Carlyle Group (collectively referred to ~~address the steep~~as "Carlyle"). The sale resulted in approximately $4,200 in after-tax proceeds and ~~extended downturn in motor vehicle and construction markets, and the extension~~a pre-tax gain of ~~the downturn into industrial markets.~~$2,687 ($1,962 net of tax). The plan was designed to restructure asset and fixed cost bases in order to improve long-term competitiveness, simplify business processes, and maximize pre-tax operating income. The plan included the elimination of about 2,000 positions by severance principally located in the United States of America (U.S.). As a result, a charge of $340gain was recorded in employee separation/asset related charges, net, which pertains to the following financial statement line items; cost of goods sold and other operating charges – 60 percent, selling, general and administrative expenses – 30 percent, and research and development expense – 10 percent. This charge includes $212 of severance and related benefits costs, $24 of other non-personnel charges and $104 of asset related charges, including $77 for asset shut downs and write-offs, $11 for asset impairments and $16 for accelerated depreciation.

The 2009 restructuring program charge of $340 reduced segment earnings as follows: Electronics & Communications – $43; Performance Chemicals – $66; Performance Coatings – $65; Performance Materials – $110; Safety & Protection – $55; and Other – $1.

~~In the fourth quarter 2009, the company recorded a net reduction of $30~~income from discontinued operations after income taxes in the estimated costs associated with the 2009 restructuring program. This net reduction was primarily due to lower than estimated individual severance costs and work force reductions through non-severance programs. The net reduction of $30 impacted segment earningscompany's Consolidated Income Statements for the ~~twelve months~~year ended December 31, ~~2009~~2013. The results of discontinued operations are summarized below:



For the year ended December 31,	2013		2012		2011
Net sales	$	331	$	4,218	$	4,280
Income before income taxes	$	2,717	$	551	$	518
Provision for income taxes¹	718		243		151
Income from discontinued operations after income taxes	$	1,999	$	308	$	367


^1.	Full year 2012 includes expense of $70 to accrue taxes associated with earnings of certain Performance Coatings subsidiaries that were previously considered permanently reinvested as these entities have been reclassified as held for sale.

The key components of the assets and liabilities classified as ~~follows: Electronics & Communications – $6; Performance Chemicals – $9;~~held for sale at December 31, 2012 related to Performance Coatings ~~– $(11); Performance Materials – $23; Safety & Protection – $8; and Other – $(5).~~

Inconsisted of the fourth quarter 2010, the company recorded a net reduction of $20 in the estimated costs associated with the 2009 restructuring program. This net reduction was primarily due to lower than estimated individual severance costs and work force reductions through non-severance programs. The net reduction of $20 impacted segment earnings for the twelve months ended December 31, 2010 as follows: Electronics & Communications – $8; Performance Chemicals – $10; Performance Coatings – $(16); Performance Materials – $13; and Safety & Protection – $5.

There were $81 of employee separation cash payments related to the 2009 restructuring program during 2010. The actions related to the 2009 restructuring program were substantially completed by the end of 2010 with payments continuing into 2011, primarily in Europe.

following:



	December 31, 2012
Cash and cash equivalents	$	95
Accounts and notes receivable, net	783
Inventories	488
Prepaid expenses	6
Deferred income taxes - current	32
Property, plant and equipment, net of accumulated depreciation	749
Goodwill	808
Other intangible assets	67
Deferred income taxes - noncurrent	14
Other assets - noncurrent	34
Total assets held for sale	$	3,076
Accounts payable	$	408
Income taxes	17
Other accrued liabilities	237
Other liabilities - noncurrent	388
Deferred income taxes - noncurrent	34
Total liabilities related to assets held for sale	$	1,084

F-14

~~Table of Contents~~

E. I. du Pont de Nemours and Company

Notes to the Consolidated Financial Statements (continued)

(Dollars in millions, except per share)

3. EMPLOYEE SEPARATION/ASSET RELATED CHARGES, NET

~~Account balances and activity for the 2009~~December 31, 2013, total liabilities related to restructuring ~~program are summarized below:~~

Asset
Related

Employee
Separation
Costs

Other
Non-personnel
Charges1

Total

Net charges to income in 2009
$ 104 $ 212 $ 24 $ 340
Charges to accounts

Payments
- (33 ) - (33 )

Net translation adjustment
- 1 - 1

Net credits to income
- (30 ) - (30 )

Asset write-offs and adjustments
(104 ) - - (104 )
Balance at December 31, 2009
$ - $ 150 $ 24 $ 174

Payments
- (81 ) (20 ) (101 )

Net translation adjustment
- (6 ) - (6 )

Net credits to income
- (17 ) (3 ) (20 )
Balance at December 31, 2010
$ - $ 46 $ 1 $ 47

1: ~~Other non-personnel charges consist of contractual obligation costs.~~

activities were ~~2008 Restructuring Program~~$57

~~During 2008, in response~~, primarily relating to the ~~challenging economic environment,~~2012 restructuring program. In addition to the company initiated a global restructuring program to reduce costs and improve profitability across its businesses. The program included the elimination of approximately 2,500 positions principally located in Western Europe and the U.S. primarily supporting the motor vehicle and construction markets. As a result,programs discussed below, a charge of ~~$535 was~~$19, which included $9 recorded in employee separation / asset related charges, net ~~which pertains~~and $10 recorded in other income, net, was taken in the fourth quarter 2013. This charge was a result of restructuring actions including employee separation and asset related costs related to a joint venture in the Performance Materials segment.

2012 Restructuring Program

In 2012, the company commenced a restructuring plan to increase productivity, enhance competitiveness and accelerate growth. The plan was designed to eliminate corporate costs previously allocated to the ~~cost~~Performance Coatings business as well as utilize additional cost-cutting actions to improve competitiveness. As a result, pre-tax charges of ~~goods sold and other operating~~$234 were recorded in employee separation / asset related charges, ~~financial statement line item. This charge included $287 related to~~net. The 2012 charges consisted of $157 of employee ~~severance~~separation costs, ~~$18~~$8 of other non-personnel charges, and ~~$230~~$69 of asset related charges, ~~including $111 for~~which included $30 of asset ~~shut-downs~~impairments and ~~$119 for~~$39 of asset ~~impairments.~~

shut downs.

The ~~2008~~2012 restructuring program ~~charge of $535 reduced 2008~~charges impacted segment earnings as follows: Agriculture ~~& Nutrition – $18;~~- $11, Electronics & Communications ~~– $37;~~- $9, Industrial Biosciences - $3, Nutrition & Health - $53, Performance Chemicals ~~– $50; Performance Coatings – $209;~~- $3, Performance Materials ~~– $94;~~- $13, and Safety & Protection ~~– $96; and Other – $31.~~

- $58, as well as Corporate expenses - $84.

In ~~2009,~~the fourth quarter 2013, the company recorded a ~~$100~~ net reduction of $(17) in the estimated costs associated with the ~~2008~~2012 restructuring program. This net reduction was primarily due to lower than estimated individual severance costs and workforce reductions through non-severance programs. The ~~$100~~ net reduction impacted segment earnings for the year ended December 31, ~~2009~~2013 as follows: Agriculture - $(2), Electronics & Communications - $2, Industrial Biosciences - $(1), Nutrition ~~– $1;~~& Health - $(3), Performance Chemicals ~~– $3; Performance Coatings – $61;~~- $1, Performance Materials ~~– $29;~~- $(1), and Safety & Protection ~~– $2; and~~- $(2), Other ~~– $4.~~

In the fourth quarter 2010, the company recorded a net reduction of $14 in the estimated costs associated with the 2008 restructuring program. This net reduction was primarily due to lower than estimated individual severance costs and work force reductions through non-severance programs. - (2), as well as Corporate expenses - $(9).

The ~~net reduction of $14 impacted segment earnings for the twelve months ended December 31, 2010 as follows: Performance Coatings – $10; and Performance Materials – $3; and Other – $1.~~

~~There were $78 of employee separation cash payments related to the 2008 restructuring program during 2010. The program~~actions and payments related to the ~~2008~~2012 restructuring program were substantially ~~completed~~complete as of December 31, ~~2010.~~

2013.

Account balances and activity for the 2012 restructuring program are summarized below:



	Asset Related			Employee Separation Costs			Other Non-Personnel Charges¹			Total
Charges to income in 2012	$	69		$	157		$	8		$	234
Charges to accounts:
Payments	—			(4		)	(1		)	(5		)
Net translation adjustment	—			1			—			1
Asset write-offs and adjustments	(69		)	—			—			(69		)
Balance as of December 31, 2012	$	—		$	154		$	7		$	161
Payments	—			(82		)	(5		)	(87		)
Net translation adjustment	—			(1		)	—			(1		)
Asset write-offs and adjustments	—			(19		)	2			(17		)
Balance as of December 31, 2013	$	—		$	52		$	4		$	56

^1.Other non-personnel charges consist of contractual obligation costs.

Asset Impairments

In the fourth quarter 2013, as a result of strategic decisions related to the thin film photovoltaic market, and during 2012, as a result of deteriorating conditions in the thin film photovoltaic market, the company determined that impairment triggering events had occurred and that assessments of the asset group related to its thin film photovoltaic modules and systems were warranted. These assessments determined that the carrying value of the asset group exceeded its fair value. As a result of the impairment tests, $129 and $150 of pre-tax impairment charges were recorded during 2013 and 2012, respectively, within the Electronics & Communications segment.

F-15

~~Table of Contents~~

E. I. du Pont de Nemours and Company

Notes to the Consolidated Financial Statements (continued)

(Dollars in millions, except per share)

~~Account balances~~

During 2012, as a result of strategic decisions related to deteriorating conditions within a specific industrial chemicals market, the company determined that an impairment triggering event had occurred and ~~activity~~that an assessment of the asset group related to this industrial chemical was warranted. This assessment determined that the carrying value of the asset group exceeded its fair value. As a result of the impairment test, a $33 pre-tax impairment charge was recorded within the Performance Chemicals segment.

During 2012, as a result of deteriorating conditions in an industrial polymer market, the company determined that an impairment triggering event had occurred and that an assessment of the asset group related to this polymer product was warranted. This assessment determined that the carrying value of the asset group exceeded its fair value. As a result of the impairment test, a $92 pre-tax impairment charge was recorded within the Performance Materials segment.

The bases of the fair value for the ~~2008 restructuring program are summarized below:~~

Asset
Related

Employee
Separation
Costs

Other
Non-personnel
Charges1

Total

Net charges to income in 2008
$ 230 $ 287 $ 18 $ 535
Charges to accounts

Net translation adjustment
- 19 1 20

Asset write-offs
(230 ) - (2 ) (232 )

Other
- 3 - 3
Balance at December 31, 2008
$ - $ 309 $ 17 $ 326

Payments
- (110 ) (9 ) (119 )

Net translation adjustment
- 6 1 7

Net credits to income
- (100 ) - (100 )
Balance at December 31, 2009
$ - $ 105 $ 9 $ 114

Payments
- (78 ) (5 ) (83 )

Net translation adjustment
- (6 ) - (6 )

Net credits to income
- (11 ) (3 ) (14 )
Balance at December 31, 2010
$ - $ 10 $ 1 $ 11

1: ~~Other non-personnel~~ charges ~~consist~~above were calculated utilizing a discounted cash flow approach which included assumptions concerning future operating performance and economic conditions that may differ from actual cash flows. In connection with the matters discussed above, as of ~~contractual obligation costs.~~

December 31, 2013 and 2012, the company had long-lived assets with a remaining net book value of approximately $90 and ~~5. PROVISION FOR INCOME TAXES~~$150

2010

2009

2008

Current tax expense (benefit):

U.S. federal
$ (109 ) $ 23 $ 14

U.S. state and local
- (9 ) (3 )

International
454 328 327

Total current tax expense
345 342 338
Deferred tax expense (benefit):

U.S. federal
245 57 210

U.S. state and local
3 1 -

International
66 15 (167 )

Total deferred tax expense
314 73 43
Provision for income taxes
$ 659 $ 415 $ 381
, respectively, accounted for at fair value on a nonrecurring basis after initial recognition. These nonrecurring fair value measurements were determined using level 3 inputs within the fair value hierarchy, as described in Note 1 to the Consolidated Financial Statements.

~~Table~~4. DANISCO ACQUISITION

In January 2011, DuPont and its wholly owned subsidiary, DuPont Denmark Holding ApS (DDHA), entered into a definitive agreement with Danisco A/S (Danisco), a global enzyme and specialty food ingredients company, for DDHA to make a public tender offer for all of ~~Contents~~Danisco's outstanding shares at a price of 665 Danish Kroner (DKK) in cash per share. On April 29, 2011, DDHA increased the price of its tender offer to acquire all of the outstanding shares of Danisco to DKK 700 in cash per share.

On May 19, 2011, the company acquired approximately 92.2 percent of Danisco's outstanding shares, excluding treasury shares, pursuant to the previously announced tender offer. From May 19, 2011 to September 22, 2011, DuPont acquired all of Danisco's remaining outstanding shares. This acquisition has established DuPont as a leader in industrial biotechnology with science-intensive innovations that address global challenges in food production and reduced fossil fuel consumption. The Danisco acquisition was valued at $6,417, plus net debt assumed of $617.

As part of the Danisco acquisition, DuPont incurred $85 in transaction related costs during 2011, which were recorded in other operating charges. In 2011, Danisco contributed net sales of $1,713 and net income attributable to DuPont of $(7), which excludes $30 after-tax ($39 pre-tax) of additional interest expense related to the debt issued to finance the acquisition. Danisco's contributions included a $125 after-tax ($175 pre-tax) charge related to the fair value step-up of inventories acquired and sold during 2011.

5. OTHER INCOME, NET

2013 2012 2011
Cozaar^®/Hyzaar^® income
$ 14
$ 54
$ 282
Royalty income 187
177
189
Interest income 136
109
110
Equity in earnings of affiliates, excluding exchange gains/losses¹
37
99
191
Gain on sale of equity method investment 9
122
—
Net gains on sales of other assets 25
130
89
Net exchange losses¹
(128 ) (215 ) (146 )
Miscellaneous income and expenses, net²
130
22
27
Other income, net

$ 410
$ 498
$ 742

^1.

The company routinely uses foreign currency exchange contracts to offset its net exposures, by currency, related to the foreign currency-denominated monetary assets and liabilities. The objective of this program is to maintain an approximately balanced position in foreign currencies in order to minimize, on an after-tax basis, the effects of exchange rate changes on net monetary asset positions. The net pre-tax exchange gains and losses are recorded in other income, net and the related tax impact is recorded in provision for income taxes on continuing operations on the Consolidated Income Statements. Exchange gains (losses) related to earnings of affiliates was $4, $3 and $1 for 2013, 2012 and 2011, respectively. The $(128) net exchange loss for the year ended December 31, 2013, includes a $(33) exchange loss, associated with the devaluation of the Venezuelan bolivar.


^2.	Miscellaneous income and expenses, net, generally includes interest items, certain insurance recoveries and litigation settlements, and other items.

F-16

E. I. du Pont de Nemours and Company

Notes to the Consolidated Financial Statements (continued)

(Dollars in millions, except per share)

6. PROVISION FOR INCOME TAXES



	2013			2012			2011
Current tax expense (benefit) on continuing operations:
U.S. federal	$	160		$	121		$	353
U.S. state and local	23			16			(20		)
International	677			663			482
Total current tax expense on continuing operations	860			800			815
Deferred tax expense (benefit) on continuing operations:
U.S. federal	(193		)	(105		)	(143		)
U.S. state and local	(65		)	(46		)	(4		)
International	24			(33		)	(21		)
Total deferred tax (benefit) expense on continuing operations	(234		)	(184		)	(168		)
Provision for income taxes on continuing operations	$	626		$	616		$	647

The significant components of deferred tax assets and liabilities at December 31, ~~2010~~2013 and ~~2009,~~2012, are as follows:

2010

2009

Asset

Liability

Asset

Liability

Depreciation
$ - $ 1,614 $ - $ 1,515
Accrued employee benefits
3,731 81 3,899 98
Other accrued expenses
928 369 1,029 366
Inventories
273 154 197 148
Unrealized exchange gains
34 - 5 -
Tax loss/tax credit carryforwards/backs
2,680 - 3,023 -
Investment in subsidiaries and affiliates
41 279 45 275
Amortization of intangibles
53 636 80 558
Other
314 144 291 152
Valuation allowance
(1,666 ) - (1,759 ) -

$ 6,388 $ 3,277 $ 6,810 $ 3,112
Net deferred tax asset
$ 3,111 $ 3,698

~~Deferred taxes are presented in the Consolidated Balance Sheets as of December 31, 2010 and 2009 as follows:~~



	2013					2012
	Asset			Liability		Asset			Liability
Depreciation	$	—		$	1,707	$	—		$	1,696
Accrued employee benefits	3,754			512		5,198			167
Other accrued expenses	818			87		723			65
Inventories	275			151		231			105
Unrealized exchange gains/losses	65			—		—			37
Tax loss/tax credit carryforwards/backs	2,615			—		2,733			—
Investment in subsidiaries and affiliates	189			245		78			92
Amortization of intangibles	109			1,372		58			1,335
Other	316			159		244			265
Valuation allowance	(1,764		)	—		(1,914		)	—
	$	6,377		$	4,233	$	7,351		$	3,762
Net deferred tax asset	$	2,144				$	3,589

Location on the
Balance Sheet

2010

2009

Current deferred tax asset
Deferred income taxes $ 534 $ 612
Non-current deferred tax asset¹
Other assets 2,772 3,240
Current deferred tax liability
Income taxes (80 ) (28 )
Non-current deferred tax liability
Deferred income taxes (115 ) (126 )
Net deferred tax asset
$ 3,111 $ 3,698

1: ~~See Note 13.~~

An analysis of the company's effective income tax rate (EITR) on continuing operations is as follows:

2010

2009

2008

Statutory U.S. federal income tax rate
35.0 % 35.0 % 35.0 %
Exchange gains/losses¹
0.2 (2.6 ) (0.2 )
Domestic operations
(2.0 ) (1.4 ) (2.8 )
Lower effective tax rates on international operations-net
(13.6 ) (11.8 ) (14.3 )
Tax settlements
(1.8 ) (0.2 ) (1.8 )

17.8 % 19.0 % 15.9 %

1: Principally reflects the impact of non-taxable exchange gains and losses resulting from remeasurement of foreign currency-denominated monetary assets and liabilities. Further information about the company's foreign currency hedging program is included in Note 23 under the heading Foreign Currency Risk.



	2013		2012		2011
Statutory U.S. federal income tax rate	35.0	%	35.0	%	35.0	%
Exchange gains/losses¹	0.8		0.1		(0.8	)
Domestic operations	(3.2	)	(2.3	)	(2.5	)
Lower effective tax rates on international operations-net²	(12.3	)	(10.9	)	(11.6	)
Tax settlements	(0.2	)	(2.0	)	(0.2	)
Sale of a business	—		—		(2.3	)
U.S. research & development credit ²	(2.2	)	—		(0.9	)
	17.9	%	19.9	%	16.7	%


^1.	Principally reflects the impact of non-taxable exchange gains and losses resulting from remeasurement of foreign currency-denominated monetary assets and liabilities. Further information about the company's foreign currency hedging program is included in Note 20 under the heading Foreign Currency Risk.


^2.	On January 2, 2013, U.S. tax law was enacted which extended through 2013 (and retroactive to 2012) several expired or expiring temporary business tax provisions. In accordance with GAAP, this extension was taken into account in the quarter in which the legislation was enacted (i.e. first quarter 2013).

F-17

~~Table of Contents~~

E. I. du Pont de Nemours and Company

Notes to the Consolidated Financial Statements (continued)

(Dollars in millions, except per share)

Consolidated income from continuing operations before income taxes for U.S. and international operations was as follows:



	2010		2009		2008		2013		2012		2011
United States (including exports)	$	949	$	171	$	992
U.S. (including exports)							$	962	$	640	$	718
International		2,762		2,013		1,399	2,527		2,448		3,161
	$	3,711	$	2,184	$	2,391	$	3,489	$	3,088	$	3,879

The increase in ~~U.S.~~ pre-tax earnings from ~~2009~~continuing operations from 2013 to ~~2010~~2012 is primarily driven by ~~two factors, the results~~higher worldwide sales volume, lower Imprelis^® herbicide claims, net of ~~the company's hedging program combined with the improvement~~insurance recoveries, and lower employee separation/asset related charges in ~~the U.S. economy.~~2013, partly offset by lower local selling prices and negative currency impact. See Note 16 and Note 3 for additional information relating to Imprelis^® claims and employee separation/asset related charges, respectively. In ~~2009,~~2013 and 2012, the U.S. recorded ~~$485 of~~ exchange ~~losses~~gain (loss) associated with the hedging ~~program. However, in 2010, the~~ program ~~resulted in the company recording $117~~ of ~~exchange gains. This swing in the exchange gains~~$35 and ~~losses year over year combined with the underlying recovery in the U.S. economy accounts for the increase in the U.S. earnings per the chart above.~~$(157), respectively. While the taxation of the amounts reflected on the chart above does not correspond precisely to the jurisdiction of taxation (due to taxation in multiple countries, exchange ~~gains (losses),~~gains/losses, etc.), it represents a reasonable approximation of the income before income taxes split between U.S. and international jurisdictions. See Note 2320 for additional information regarding the company's hedging program.

Under the tax laws of various jurisdictions in which the company operates, deductions or credits that cannot be fully utilized for tax purposes during the current year may be carried forward or back, subject to statutory limitations, to reduce taxable income or taxes payable in future or prior years. At December 31, ~~2010,~~2013, the tax effect of such carryforwards/backs, net of valuation allowance approximated ~~$1,379.~~$1,199. Of this amount, ~~$1,205~~$1,009 has no expiration date, ~~$38~~$19 expires after ~~2010~~2013 but before the end of ~~2015~~2018 and ~~$136~~$171 expires after ~~2015.~~

2018.

At December 31, ~~2010,~~2013, unremitted earnings of subsidiaries outside the U.S. totaling ~~$12,631~~$15,978 were deemed to be indefinitely reinvested. No deferred tax liability has been recognized with regard to the remittance of such earnings. It is not practical to estimate the income tax liability that might be incurred if such earnings were remitted to the U.S.

Each year the company files hundreds of tax returns in the various national, state and local income taxing jurisdictions in which it operates. These tax returns are subject to examination and possible challenge by the taxing authorities. Positions challenged by the taxing authorities may be settled or appealed by the company. As a result, there is an uncertainty in income taxes recognized in the company's financial statements in accordance with accounting for income taxes and accounting for uncertainty in income taxes. It is reasonably possible that changes to the company's global unrecognized tax benefits could be significant, however, due to the uncertainty regarding the timing of completion of audits and possible outcomes, a current estimate of the range of increases or decreases that may occur within the next twelve months cannot be made.

F-18

E. I. du Pont de Nemours and Company

Notes to the Consolidated Financial Statements (continued)

(Dollars in millions, except per share)

The company and/or its subsidiaries files income tax returns in the U.S. federal jurisdiction, and various states and non-U.S. jurisdictions. With few exceptions, the company is no longer subject to U.S. federal, state and local, or

~~Table of Contents~~

~~E. I. du Pont de Nemours and Company~~
~~Notes to the Consolidated Financial Statements (continued)~~
~~(Dollars in millions, except per share)~~

non-U.S. income tax examinations by tax authorities for years before ~~1999.~~2004. A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows:

2010

2009

2008

Total Unrecognized Tax Benefits as of January 1
$ 739 $ 677 $ 825
Gross amounts of decreases in unrecognized tax benefits as a result of tax positions taken during the prior period
(155 ) (60 ) (49 )
Gross amounts of increases in unrecognized tax benefits as a result of tax positions taken during the prior period
169 68 51
Gross amounts of increases in unrecognized tax benefits as a result of tax positions taken during the current period
51 42 59
Amount of decreases in the unrecognized tax benefits relating to settlements with taxing authorities
(90 ) (9 ) (157 )
Reduction to unrecognized tax benefits as a result of a lapse of the applicable statue of limitations
(24 ) (10 ) (14 )
Exchange gain (loss)
3 31 (38 )
Total Unrecognized Tax Benefits as of December 31
$ 693 $ 739 $ 677
Total unrecognized tax benefits that, if recognized, would impact the effective tax rate
$ 545 $ 566 $ 467
Total amount of interest and penalties recognized in the Consolidated Income Statement
$ (70 ) $ 12 $ 7
Total amount of interest and penalties recognized in the Consolidated Balance Sheet
$ 99 $ 125 $ 115



	2013			2012			2011
Total unrecognized tax benefits as of January 1	$	805		$	800		$	693
Gross amounts of decreases in unrecognized tax benefits as a result of tax positions taken during the prior period	(28		)	(94		)	(82		)
Gross amounts of increases in unrecognized tax benefits as a result of tax positions taken during the prior period	76			73			170
Gross amounts of increases in unrecognized tax benefits as a result of tax positions taken during the current period	92			78			79
Amount of decreases in the unrecognized tax benefits relating to settlements with taxing authorities	(19		)	(29		)	(6		)
Reduction to unrecognized tax benefits as a result of a lapse of the applicable statute of limitations	(6		)	(10		)	(32		)
Exchange gain (loss)	(19		)	(13		)	(22		)
Total unrecognized tax benefits as of December 31	$	901		$	805		$	800
Total unrecognized tax benefits that, if recognized, would impact the effective tax rate	$	778		$	693		$	683
Total amount of interest and penalties recognized in the Consolidated Income Statements	$	16		$	4		$	7
Total amount of interest and penalties recognized in the Consolidated Balance Sheets	$	122		$	116		$	113

F-19

E. I. du Pont de Nemours and Company

Notes to the Consolidated Financial Statements (continued)

(Dollars in millions, except per share)

7. EARNINGS PER SHARE OF COMMON STOCK

Set forth below is a reconciliation of the numerator and denominator for basic and diluted earnings per share calculations for the periods indicated:



	2010			2009			2008			2013			2012			2011
Numerator:
Net income attributable to DuPont	$	3,031		$	1,755		$	2,007
Income from continuing operations after income taxes attributable to DuPont										$	2,849		$	2,447		$	3,192
Preferred dividends		(10	)		(10	)		(10	)	(10		)	(10		)	(10		)
Income from continuing operations after income taxes available to DuPont common stockholders										$	2,839		$	2,437		$	3,182

Income from discontinued operations after income taxes										$	1,999		$	308		$	367

Net income available to common stockholders	$	3,021		$	1,745		$	1,997		$	4,838		$	2,745		$	3,549

Denominator:
Weighted-average number of common shares outstanding – Basic		908,860,000			904,395,000			902,415,000		925,984,000			933,275,000			928,417,000
Dilutive effect of the company's employee compensation plans and accelerated share repurchase agreement		12,795,000			4,317,000			4,956,000
Dilutive effect of the company's employee compensation plans										7,163,000			8,922,000			12,612,000
Weighted average number of common shares outstanding – Diluted		921,655,000			908,712,000			907,371,000		933,147,000			942,197,000			941,029,000

~~E. I. du Pont de Nemours and Company~~
~~Notes to the Consolidated Financial Statements (continued)~~
~~(Dollars in millions, except per share)~~

Accounts and notes receivable are carried at amounts that approximate fair ~~value and include amounts due from equity affiliates of $51 and $35 for 2010 and 2009, respectively.~~

~~9. INVENTORIES~~

value.

December 31,

2010

2009

Finished products
$ 3,191 $ 2,893
Semifinished products
2,564 2,231
Raw materials, stores and supplies
855 872
6,610 5,996
Adjustment of inventories to a LIFO basis
(643 ) (616 )

$ 5,967 $ 5,380

Inventory values, before LIFO adjustment, are generally determined by the average cost method, which approximates current cost. Excluding seeds, stores and supplies, inventories valued under the LIFO method comprised 78 percent and 79 percent of consolidated inventories before LIFO adjustment for the periods ended December 31, 2010 and 2009, respectively. Seed inventories of $2,581 and $2,380 at December 31, 2010 and 2009, respectively, were valued under the FIFO method. Stores and supplies inventories of $248 and $239 at December 31, 2010 and 2009, respectively, were valued under the average cost method.

9. INVENTORIES



December 31,	2013			2012
Finished products	$	4,645		$	4,449
Semifinished products	2,576			2,407
Raw materials, stores and supplies	1,360			1,313
	8,581			8,169
Adjustment of inventories to a LIFO basis	(539		)	(604		)
	$	8,042		$	7,565

~~Table of Contents~~

10. PROPERTY, PLANT AND EQUIPMENT

December 31, 2013 2012
Buildings $ 5,283
$ 5,490
Equipment 24,714
24,090
Land 671
691
Construction 1,763
1,555
$ 32,431
$ 31,826

F-21

E. I. du Pont de Nemours and Company

Notes to the Consolidated Financial Statements (continued)

(Dollars in millions, except per share)

~~10. PROPERTY, PLANT AND EQUIPMENT~~

December 31,

2010

2009

Buildings
$ 4,492 $ 4,460
Equipment
23,384 22,809
Land
544 520
Construction
1,547 1,126

$ 29,967 $ 28,915

Property, plant and equipment includes gross assets acquired under capital leases of $30 and $36 at December 31, 2010 and 2009, respectively. Related amounts included in accumulated depreciation were $21 and $24 at December 31, 2010 and 2009, respectively.

11. GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill

~~Goodwill~~

The following table summarizes changes in the carrying amount of goodwill for the years ended December 31, ~~2010~~2013 and ~~2009,~~2012, by reportable segment:



	Balance as of December 31, 2010		Goodwill Adjustments and Acquisitions			Balance as of December 31, 2009		Goodwill Adjustments and Acquisitions			Balance as of December 31, 2008		Balance as of December 31, 2013		Goodwill Adjustments and Acquisitions			Balance as of December 31, 2012		Goodwill Adjustments and Acquisitions			Balance as of December 31, 2011
Agriculture & Nutrition	$	652	$	176		$	476	$	10		$	466
Agriculture													$	330	$	99		$	231	$	(1	)	$	232
Electronics & Communications		117		(2	)		119		(1	)		120	149		—			149		—			149
Industrial Biosciences													898		8			890		24			866
Nutrition & Health													2,315		1			2,314		(8		)	2,322
Performance Chemicals		185		2			183		(1	)		184	185		—			185		—			185
Performance Coatings		809		-			809		-			809	—		—			—		(809		)	809
Performance Materials		410		(3	)		413		(7	)		420	388		(13		)	401		(3		)	404
Safety & Protection		444		307			137		1			136	448		2			446		—			446
Total	$	2,617	$	480		$	2,137	$	2		$	2,135	$	4,713	$	97		$	4,616	$	(797	)	$	5,413

Changes in goodwill in ~~2010~~2013 primarily ~~related~~relate to ~~acquisitions~~goodwill associated with an acquisition in the Agriculture ~~& Nutrition and Safety & Protection segments.~~segment. Changes in goodwill in 2012 primarily relate to goodwill ~~in 2009 resulted from acquisition accounting refinements~~associated with the Performance Coatings business that was reclassified as held for sale (see Note 2). In 2013 and ~~other acquisitions and divestitures. In 2010 and 2009,~~2012, the company performed impairment tests for goodwill and determined that no goodwill impairments existed.

F-22

~~Table of Contents~~

E. I. du Pont de Nemours and Company

Notes to the Consolidated Financial Statements (continued)

(Dollars in millions, except per share)

Other Intangible Assets

The following table summarizes the gross carrying amounts and accumulated amortization of other intangible assets by major class:

December 31, 2010

December 31, 2009

Gross

Accumulated
Amortization

Net

Gross

Accumulated
Amortization

Net

Intangible assets subject to amortization (Definite-lived)¹

Purchased and licensed technology
$ 1,557 $ (765 ) $ 792 $ 1,622 $ (716 ) $ 906

Patents
118 (44 ) 74 169 (57 ) 112

Trademarks
57 (22 ) 35 62 (22 ) 40

Other²
918 (323 ) 595 642 (302 ) 340
2,650 (1,154 ) 1,496 2,495 (1,097 ) 1,398
Intangible assets not subject to amortization (Indefinite-lived)

Trademarks/tradenames
233 - 233 179 - 179

Pioneer germplasm³
975 - 975 975 - 975
1,208 - 1,208 1,154 - 1,154
$ 3,858 $ (1,154 ) $ 2,704 $ 3,649 $ (1,097 ) $ 2,552



	December 31, 2013							December 31, 2012
	Gross		Accumulated Amortization			Net		Gross		Accumulated Amortization			Net
Intangible assets subject to amortization (Definite-lived)
Customer lists	$	1,818	$	(393	)	$	1,425	$	1,847	$	(330	)	$	1,517
Patents	519		(160		)	359		525		(127		)	398
Purchased and licensed technology	1,999		(1,129		)	870		1,929		(1,016		)	913
Trademarks	43		(17		)	26		57		(29		)	28
Other¹	242		(106		)	136		206		(98		)	108
	4,621		(1,805		)	2,816		4,564		(1,600		)	2,964
Intangible assets not subject to amortization (Indefinite-lived)
In-process research and development	43		—			43		62		—			62
Microbial cell factories²	306		—			306		306		—			306
Pioneer germplasm³	1,050		—			1,050		975		—			975
Trademarks/tradenames	881		—			881		819		—			819
	2,280		—			2,280		2,162		—			2,162
Total	$	6,901	$	(1,805	)	$	5,096	$	6,726	$	(1,600	)	$	5,126

1: Changes in the gross carrying amount of intangible assets subject to amortization in 2010 primarily related to acquisitions in the Agriculture & Nutrition and Safety & Protection segments, which were partially offset by the write-off of fully amortized definite-lived intangible assets in the Agriculture & Nutrition segment.
2: ~~Primarily consists of sales and grower networks, customer lists, marketing and manufacturing alliances and noncompetition agreements.~~
3: Pioneer germplasm is the pool of genetic source material and body of knowledge gained from the development and delivery stage of plant breeding. The company recognized germplasm as an intangible asset upon the acquisition of Pioneer. This intangible asset is expected to contribute to cash flows beyond the foreseeable future and there are no legal, regulatory, contractual, or other factors which limit its useful life.

^1.
Primarily consists of sales and grower networks, marketing and manufacturing alliances and noncompetition agreements.
^2.
Microbial cell factories, derived from natural microbes, are used to sustainably produce enzymes, peptides and chemicals using natural metabolic processes. The company recognized the microbial cell factories as an intangible asset upon the acquisition of Danisco. This intangible asset is expected to contribute to cash flows beyond the foreseeable future and there are no legal, regulatory, contractual, or other factors which limit its useful life.
^3.
Pioneer germplasm is the pool of genetic source material and body of knowledge gained from the development and delivery stage of plant breeding. The company recognized germplasm as an intangible asset upon the acquisition of Pioneer. This intangible asset is expected to contribute to cash flows beyond the foreseeable future and there are no legal, regulatory, contractual, or other factors which limit its useful life.

The aggregate pre-tax amortization expense from continuing operations for definite-lived intangible assets was ~~$176, $252~~$323, $312 and ~~$275~~$253 for ~~2010, 2009~~2013, 2012 and ~~2008,~~2011, respectively. The estimated aggregate pre-tax amortization expense from continuing operations for ~~2011, 2012, 2013,~~ 2014, 2015, 2016, 2017 and ~~2015~~2018 is ~~$215, $213, $213, $202~~$371, $377, $339, $212 and ~~$170,~~$209, respectively, which are primarily reported in cost of goods ~~sold and other operating charges.~~

~~12. SUMMARIZED FINANCIAL INFORMATION FOR AFFILIATED COMPANIES~~sold.

Summarized combined financial information for affiliated companies for which the equity method of accounting is used (see Note 1) is shown on a 100 percent basis. The most significant of these affiliates at December 31, 2010, are DuPont Teijin Films, DuPont-Toray Company Ltd. and DuPont-Mitsui, all of which are owned 50 percent by the company. Dividends received from equity affiliates were $103, $49 and $87 in 2010, 2009 and 2008, respectively.

Year Ended December 31,

Results of operations

2010

2009

2008

Net sales¹
$ 4,073 $ 2,924 $ 3,064
Earnings before income taxes
543 235 281
Net income
393 210 190
DuPont's equity in (losses) earnings of affiliates:

Partnerships-pre-tax²
(12 ) (22 ) (4 )

Corporate joint ventures-after-tax
189 121 85
$ 177 $ 99 $ 81

1: ~~Includes sales to DuPont of $652, $412 and $390 in 2010, 2009 and 2008, respectively.~~
2: ~~Income taxes are reflected in the company's provision for income tax.~~

~~Table of Contents~~

~~E. I. du Pont de Nemours and Company~~
~~Notes to the Consolidated Financial Statements (continued)~~
~~(Dollars in millions, except per share)~~

Financial position at December 31,

2010

2009

Current assets
$ 1,972 $ 1,710
Noncurrent assets
1,397 1,416

Total assets
3,369 3,126
Short-term borrowings¹
381 375
Other current liabilities
841 768
Long-term borrowings¹
144 178
Other long-term liabilities
119 111

Total liabilities
1,485 1,432
DuPont's investment in affiliates (includes advances)
$ 1,041 $ 1,014

1: The company's pro rata interest in total borrowings was $236 in 2010 and $253 in 2009, of which $45 in 2010 and $32 in 2009 were guaranteed by the company. These amounts are included in the guarantees disclosed in Note 19.

~~13. OTHER ASSETS~~

December 31,

2010

2009

Long-term investments in securities
$ 104 $ 112
Deferred income taxes (Note 5)
2,772 3,240
Miscellaneous
774 748
$ 3,650 $ 4,100

Included within long-term investments in securities are securities for which market values are not readily available (cost investments) and securities classified as available-for-sale. The company's cost investments totaled $87 and $85 at December 31, 2010 and 2009, respectively. The company's available for sale securities totaled $17 and $27 at December 31, 2010 and 2009, respectively.

~~14. ACCOUNTS PAYABLE~~

December 31,

2010

2009

Trade payables
$ 3,795 $ 3,020
Payables to banks
61 54
Miscellaneous
504 468
$ 4,360 $ 3,542

Trade payables includes $119 in 2010 and $71 for 2009 due to equity affiliates. Payables to banks represent checks issued on certain disbursement accounts but not presented to the banks for payment. The reported amounts shown above approximate fair value because of the short-term maturity of these obligations.

~~Table of Contents~~

~~E. I. du Pont de Nemours and Company~~
~~Notes to the Consolidated Financial Statements (continued)~~
~~(Dollars in millions, except per share)~~

~~15.~~12. SHORT-TERM BORROWINGS AND CAPITAL LEASE OBLIGATIONS


December 31,	2010		2009		2013		2012
Commercial paper	$	-	$	444
Other loans-various currencies		128		80	44		20
Long-term debt payable within one year		4		981	1,674		1,252
Capital lease obligations		1		1	3		3
	$	133	$	1,506	$	1,721	$	1,275

~~E. I. du Pont de Nemours and Company~~
~~Notes to the Consolidated Financial Statements (continued)~~
~~(Dollars in millions, except per share)~~

^1.
The company's pension plans directly held $648 (3 percent of total plan assets) and $449 (2 percent of total plan assets) of DuPont common stock at December 31, 2013 and 2012, respectively.
^2.
Primarily receivables for investment securities sold.
^3.
Primarily payables for investment securities purchased.

The company's pension plans hold Level 3 assets which are primarily ownership interests in investment partnerships and trusts that own private market securities and real estate. Fair value is generally based on the company's units of ownership and net asset value of the investment entity or the company's share of the investment entity's total equity. The table below presents a rollforward of activity for these assets for the years ended December 31, ~~2010~~2013 and ~~2009:~~

~~E. I. du Pont de Nemours and Company~~
~~Notes to the Consolidated Financial Statements (continued)~~
~~(Dollars in millions, except per share)~~

^1.
Cash collateral held as of December 31, 2013 and 2012 represents $17 and $13, respectively, related to interest rate swap derivatives designated as hedging instruments.
²
Cash collateral held as of December 31, 2013 and 2012 represents $13 and $31, respectively, related to foreign currency derivatives not designated as hedging instruments.
³
The company's derivative assets and liabilities subject to enforceable master netting arrangements totaled $54 at December 31, 2013 and $40 at December 31, 2012.


^1.	Pension assets are included in corporate assets.


^2.	See Note 1 for additional information on the presentation of the Performance Coatings which met the criteria for discontinued operations during 2012.



~~Agriculture & Nutrition~~^1.
~~Asia Pacific~~		~~Shanghai, China; Savli, India~~
~~Europe~~		~~Ieper, Belgium; Aarhus, Denmark; Cernay, France; Szarvas, Hungary; Asturias, Spain~~
~~Latin America~~		~~Barra Mansa, Brazil; Camacari, Brazil; Esteio, Brazil; Lerma, Mexico~~
~~U.S.~~		~~Mobile, AL; Valdosta, GA; Johnston, IA; El Paso, IL; Pryor, OK; Manati, Puerto Rico; Memphis, TN; LaPorte, TX~~
~~Electronics & Communications~~
~~Asia Pacific~~		~~Dongguan, China; Shenzhen, China; Hitachi, Japan; Tokai, Japan; Hsinchu, Taiwan; Taoyuan, Taiwan~~
~~Europe~~		~~Neu Isenburg, Germany; Bristol, UK; Ruabon, UK~~
~~U.S.~~		Hayward, CA; Santa Barbara, CA; Torrance, CA; Fort Madison, IA; Louisville, KY; Fayetteville, NC; Research Triangle Park, NC; Parlin, NJ; Buffalo, NY; Rochester, NY; Circleville, OH; Dayton, OH; Towanda, PA; Manati, Puerto Rico; Bayport, TX; Logan, UT
~~Performance Chemicals~~
~~Asia Pacific~~		~~Changshu, China; Shenzhen, China; Madurai, India; Chiba, Japan; Shimizu, Japan; Kuan Yin, Taiwan~~
~~Europe~~		~~Mechelen, Belgium; Villers-St. Paul, France; Dordrecht, The Netherlands; Sudbury, UK~~
~~Latin America~~		~~Altamira, Mexico~~
~~U.S.~~		El Dorado, AR; Edge Moor, DE; Red Lion, DE; Starke, FL; Louisville, KY; Wurtland, KY; Burnside, LA; La Place, LA; De Lisle, MS; Pascagoula, MS; Fayetteville, NC; Chambers Works, NJ; Deepwater, NJ; Linden, NJ; Parlin, NJ; Buffalo, NY; Niagara Falls, NY; Circleville, OH; Fort Hill, OH; Towanda, PA; North Kingstown, RI; Memphis, TN; New Johnsonville, TN; Baytown, TX; Beaumont, TX; Corpus Christi, TX; El Paso, TX; LaPorte, TX; James River, VA; Belle, WV; Parkersburg, WV
~~Performance Coatings~~
~~Asia Pacific~~		~~Changchun, China; Jiading, China~~
~~Europe~~		~~Mechelen, Belgium; Wuppertal, Germany~~
~~Latin America~~		~~Sao Paulo, Brazil~~
~~U.S.~~		~~Mount Clemens, MI; Houston, TX; Front Royal, VA~~Sites that are used by multiple segments are included more than once in the figures above.



~~Performance Materials~~
~~Asia Pacific~~		~~Beijing, China; Shenzhen, China; Wuxi, China; Zhangjigang, China; Madurai, India; Savli, India; Chiba, Japan; Gifu, Japan; Ibaraki, Japan; Otake, Japan; Utsunomiya, Japan; Ulsan, Korea; Singapore~~
~~Canada~~		~~Maitland, Canada; Sarnia, Canada~~
~~Europe~~		~~Antwerp, Belgium; Mechelen, Belgium; Uentrop, Germany; Luxembourg; Dordrecht, The Netherlands; Landgraaf, The Netherlands; Dumfries, UK~~
~~Latin America~~		~~Berazategui, Argentina~~
~~U.S.~~		Newark, DE; La Place, LA; Fayetteville, NC; Deepwater, NJ; Ashland, OH; Circleville, OH; Cleveland, OH; Upper Sandusky, OH; Copper River, SC; Chattanooga, TN; La Porte, TX; Orange, TX; Victoria, TX; Hopewell, VA; Richmond, VA; Parkersburg, WV
~~Safety & Protection~~
~~Asia Pacific~~		~~Guangzhou, China; Ulsan, Korea~~
~~Canada~~		~~Thetford Mines, Canada~~
~~Europe~~		~~Luxembourg; Maydown, UK; Asturias, Spain~~
~~U.S.~~		~~Martinez, CA; Leawood, KS; Parsippany, NJ; Buffalo, NY; Cooper River, SC; Richmond, VA; Virgina Beach, VA~~



		Market Prices					Market Prices
2010	High		Low		Per Share Dividend Declared
Fourth Quarter	$	50.17	$	44.21	$	0.41
Third Quarter		45.87		33.73		0.41
Second Quarter		41.45		33.66		0.41
First Quarter		39.04		31.88		0.41
2009
2013							High		Low		Per Share Dividend Declared
Fourth Quarter	$	35.62	$	30.06	$	0.41	$	65.00	$	56.46	$	0.45
Third Quarter		34.59		23.91		0.41	60.86		52.04		0.45
Second Quarter		30.23		21.62		0.41	57.25		48.21		0.45
First Quarter		27.98		16.05		0.41	50.20		45.11		0.43

2012
Fourth Quarter							$	50.96	$	41.67	$	0.43
Third Quarter							52.33		46.15		0.43
Second Quarter							53.98		46.44		0.43
First Quarter							53.95		45.84		0.41

Month		Average Price Paid per Share			Approximate Value of Shares that May Yet Be Purchased Under the Program (Dollars in millions)


November	5,395,024	$	46.34	5,395,024	$	788
Total	5,395,024			5,395,024



(Dollars in millions, except per share)			2010		2009		2008		2007		2006
Summary of operations
Net sales		$	31,505	$	26,109	$	30,529	$	29,378	$	27,421
Income before income taxes		$	3,711	$	2,184	$	2,391	$	3,743	$	3,329
Provision for income taxes		$	659	$	415	$	381	$	748	$	196
Net income attributable to DuPont		$	3,031	$	1,755	$	2,007	$	2,988	$	3,148
Basic earnings per share of common stock		$	3.32	$	1.93	$	2.21	$	3.25	$	3.41
Diluted earnings per share of common stock		$	3.28	$	1.92	$	2.20	$	3.22	$	3.38
Financial position at year-end
Working capital		$	9,670	$	7,898	$	5,601	$	4,619	$	4,930
Total assets		$	40,410	$	38,185	$	36,209	$	34,131	$	31,777
Borrowings and capital lease obligations
	Short-term	$	133	$	1,506	$	2,012	$	1,370	$	1,517
	Long-term	$	10,137	$	9,528	$	7,638	$	5,955	$	6,013
Total equity		$	9,743	$	7,651	$	7,552	$	11,578	$	9,863
General
For the year
	Purchases of property, plant & equipment and investments in affiliates	$	1,608	$	1,432	$	2,033	$	1,698	$	1,563
	Depreciation	$	1,204	$	1,251	$	1,169	$	1,158	$	1,157
	Research and development expense	$	1,651	$	1,378	$	1,393	$	1,338	$	1,302
Average number of common shares outstanding (millions)
	Basic		909		904		902		917		921
	Diluted		922		909		907		925		929
Dividends per common share		$	1.64	$	1.64	$	1.64	$	1.52	$	1.48
At year-end
	Employees (thousands)		60		58		60		60		59
	Closing stock price	$	49.88	$	33.67	$	25.30	$	44.09	$	48.71
	Common stockholders of record (thousands)		81		85		88		92		84



	Number of Sites
	Agriculture	Electronics & Communications	Industrial Biosciences	Nutrition & Health	Performance Chemicals	Performance Materials	Safety & Protection	Total ¹
Asia Pacific	22	10	1	9	6	19	6	73
EMEA	48	3	7	19	4	11	4	96
Latin America	20	—	1	7	1	1	—	30
U.S. & Canada	57	18	7	12	29	19	11	153
	147	31	16	47	40	50	21	352



		12/31/2005		12/31/2006		12/31/2007		12/31/2008		12/31/2009		12/31/2010	12/31/2008		12/31/2009		12/31/2010		12/31/2011		12/31/2012		12/31/2013
DuPont	$	100	$	119	$	111	$	66	$	94	$	145	$	100	$	141	$	218	$	207	$	211	$	314
S&P 500 Index	$	100	$	116	$	122	$	77	$	97	$	112	100		126		146		149		172		228
Peer Group	$	100	$	119	$	140	$	103	$	124	$	132

Dow Jones Industrial Average													100		123		140		152		167		217


^1.	Information has been restated to reflect the impact of discontinued operations and change in accounting principle, as applicable. See Note 1, Basis of Presentation and Inventories, to the Consolidated Financial Statements for further information.


^2.	At December 31, 2012, working capital included approximately $2.0 billion of net assets related to the Performance Coatings business, of which approximately $1.3 billion was previously considered to be noncurrent and was classified as held for sale as of December 31, 2012. See Note 2 to the Consolidated Financial Statements for further information.


^3.	During 2011, the company acquired approximately $8.8 billion of assets in connection with the Danisco acquisition.



					Percent Change Due to:
(Dollars in billions)	2013 Net Sales		Percent Change vs. 2012		Local Price		Currency Effect		Volume	Portfolio / Other
Worldwide	$	35.7	3		(1	)	(1	)	5	—
U.S. & Canada	14.8		4		1		—		3	—
EMEA	8.4		4		(2	)	1		4	1
Asia Pacific	7.7		(3	)	(6	)	(3	)	6	—
Latin America	4.8		6		—		(3	)	9	—



					Percent Change Due to:
(Dollars in billions)	2012 Net Sales		Percent Change vs. 2011		Local Price		Currency Effect		Volume		Portfolio / Other
Worldwide	$	34.8	3		4		(2	)	(2	)	3
U.S. & Canada	14.2		8		6		—		—		2
EMEA	8.1		(1	)	3		(6	)	(4	)	6
Asia Pacific	8.0		(4	)	(1	)	(1	)	(5	)	3
Latin America	4.5		11		9		(5	)	5		2



(Dollars in millions)	2013		2012		2011
OTHER INCOME, NET	$	410	$	498	$	742



(Dollars in billions)			2010 Net Sales	Percent Change vs. 2009	Local Price	Currency Effect		Volume	Portfolio
Worldwide		$	31.5	21	5	-		17	(1	)
	United States		11.5	17	5	-		13	(1	)
	Europe, Middle East, and Africa (EMEA)		8.1	14	4	(3	)	13	-
	Asia Pacific		7.3	40	6	2		33	(1	)
	Latin America		3.7	17	4	2		13	(2	)
	Canada		0.9	20	3	9		9	(1	)



(Dollars in billions)			2009 Net Sales	Percent Change vs. 2008		Local Price		Currency Effect		Volume		Portfolio
Worldwide		$	26.1	(14	)	1		(3	)	(12	)	-
	United States		9.8	(11	)	2		-		(11	)	(2	)
	EMEA		7.2	(25	)	1		(8	)	(18	)	-
	Asia Pacific		5.2	(5	)	(1	)	-		(4	)	-
	Latin America		3.2	(11	)	2		(4	)	(9	)	-
	Canada		0.7	(16	)	5		(8	)	(13	)	-



(Dollars in millions)	2013 (Charges) and Credits			2012 (Charges) and Credits			2011 (Charges) and Credits
Agriculture	$	1		$	(11	)	$	—
Electronics & Communications	(131		)	(159		)	—
Industrial Biosciences	1			(3		)	(9		)
Nutrition & Health	6			(49		)	(14		)
Performance Chemicals	(2		)	(36		)	—
Performance Materials	(6		)	(104		)	(2		)
Safety & Protection	4			(58		)	—
Other	5			11			(28		)
Corporate expenses	8			(84		)	—
Total (Charges) Credits	$	(114	)	$	(493	)	$	(53	)



	2013		2012
Change in segment sales from prior period due to:
Price	5	%	6	%
Volume	7	%	8	%
Portfolio / Other	1	%	—	%
Total change	13	%	14	%



	Long-term	Short-term	Outlook
Standard & Poor's	A	A-1	Stable
Moody’s Investors Service	A2	P-1	Stable
Fitch Ratings	A	F1	Stable



Principal U.S. Pension Plan (Dollars in billions)		2010		2009		2008
(Dollars in billions)							2013		2012		2011
Market-related value of assets	$	13.9	$	14.0	$	16.2	$	15.5	$	14.8	$	13.9
Fair value of plan assets	$	14.8	$	13.9	$	13.5	16.1		15.1		13.9



Pre-tax Earnings Benefit (Charge) (Dollars in millions)		1/2 Percentage Point Increase		1/2 Percentage Point Decrease		1/2 Percentage Point Increase		1/2 Percentage Point Decrease
Discount Rate	$	81	$	(88	)
Discount rate						$	89	$	94
Expected rate of return on plan assets		84		(84	)	97		(97		)

	2010 (Charges) and Credits														2008 (Charge)

(Dollars in millions)		2009 and 2008 Net Program Reductions			2009 Program			2009 Net Program Reductions			2008 Net Program Reductions		2009 Net Impact			2008 Program
Agriculture & Nutrition	$	-		$	-		$	-		$	1	$	1		$	(18	)
Electronics & Communications		8			(43	)		6			-		(37	)		(37	)
Performance Chemicals		10			(66	)		9			3		(54	)		(50	)
Performance Coatings		(6	)		(65	)		(11	)		61		(15	)		(209	)
Performance Materials		16			(110	)		23			29		(58	)		(94	)
Safety & Protection		5			(55	)		8			2		(45	)		(96	)
Other		1			(1	)		(5	)		4		(2	)		(31	)
Total (Charge) Credit	$	34		$	(340	)	$	30		$	100	$	(210	)	$	(535	)


^2.	Represents enforceable and legally binding agreements in excess of $1 million to purchase goods or services that specify fixed or minimum quantities; fixed, minimum or variable price provisions; and the approximate timing of the agreement.


^4.	Pension and other long-term employee benefit obligations have been excluded from the table as they are discussed below within Long-term Employee Benefits.


^5.	Primarily represents remaining minimum payments under Pioneer license agreements.


^6.	Primarily represents employee-related benefits other than pensions and other long-term employee benefits.


^7.	Due to uncertainty regarding the completion of tax audits and possible outcomes, the estimate of obligations related to unrecognized tax benefits cannot be made. See Note 6 to the Consolidated Financial Statements for additional detail.



(Dollars in millions)
Balance at December 31, 2011	$	416
Remediation payments	(90		)
Increase in remediation accrual	110
Balance at December 31, 2012	$	436
Remediation payments	(68		)
Increase in remediation accrual	90
Balance at December 31, 2013	$	458



(Dollars in millions)
Balance at December 31, 2008	$	379
Remediation Payments		(72	)
Increase in Accrual		89
Balance at December 31, 2009	$	396
Remediation Payments		(82	)
Increase in Accrual		93
Balance at December 31, 2010	$	407



	Fair Value Asset/(Liability)						Fair Value Sensitivity						Fair Value Asset/(Liability)						Fair Value Sensitivity
(Dollars in millions)		2010			2009			2010			2009		2013			2012			2013			2012
Interest rate swaps	$	40		$	-		$	(51	)	$	(60	)	$	29		$	55		$	(18	)	$	(29	)
Foreign currency contracts		53			97			(697	)		(752	)	18			9			(1,000		)	(659		)
Energy feedstocks		(72	)		(101	)		(79	)		(119	)

Commodity contracts													(1		)	(1		)	(2		)	(3		)



		Age		Executive Officer Since		Age	Executive Officer Since
Chair of the Board of Directors and Chief Executive Officer:	Chair of the Board of Directors and Chief Executive Officer:
Ellen J. Kullman	Ellen J. Kullman		55		2006	58	2006
Other Executive Officers:	Other Executive Officers:
James C. Borel	James C. Borel		55		2004	58	2004
	Executive Vice President
Thomas M. Connelly, Jr.			58		2000
	Executive Vice President and Chief Innovation Officer
Executive Vice President
Benito Cachinero-Sánchez						55	2011
Senior Vice President - Human Resources
Thomas M. Connelly, Jr.						61	2000
Executive Vice President and Chief Innovation Officer
Nicholas C. Fanandakis	Nicholas C. Fanandakis		54		2009	57	2009
	Executive Vice President and Chief Financial Officer
Executive Vice President and Chief Financial Officer
Thomas L. Sager	Thomas L. Sager		60		2008	63	2008
	Senior Vice President and General Counsel
Senior Vice President and General Counsel
Mark P. Vergnano	Mark P. Vergnano		53		2009	56	2009
	Executive Vice President
Executive Vice President

Plan Category			Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights2


Equity compensation plans approved by security holders	58,797	¹	$	37.71	22,529
Equity compensation plans not approved by security holders	10,335	⁴	$	44.47	—	⁵
Total	69,132		$	38.82	22,529



Plan Category	Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights		Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights²		Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans³
Equity compensation plans approved by security holders	27,171	¹	$	41.58	51,252
Equity compensation plans not approved by security holders	15	⁴	—		—	⁵
Total	27,186		$	41.58	51,252


^2.	Represents the weighted-average exercise price of the outstanding stock options only; the outstanding stock-settled time-vested and performance-based restricted stock units and deferred stock units are not included in this calculation.


^5.	There is no limit on the number of shares that can be issued under the MDCP and no further shares are available for issuance under the other equity compensation arrangements described in footnote 4 to the above chart.


(a)	Financial Statements, Financial Statement Schedules and Exhibits: