DD - Earnings call transcript Q3 2017 | DuPont de Nemours, Inc.

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Operator

Good day and welcome to the DowDuPont's Third Quarter 2017 Earnings Call. [Operator Instructions] Also today's call is being recorded. I would now like to turn the call over to Mr. Greg Friedman, Vice President of Investor Relations. Please go ahead, Sir.

Gregory Friedman

Rachelle. you, Thank everyone. Good morning, for earnings joining third you for us call. XXXX conference quarter Thank our DowDuPont call making is this via and webcast. media available to investors

are Relations prepared on on and our have slides supplement link comments We to through the the of section which Investor webcast. DowDuPont's website our posted

Jim it presentation Executive Q&A the disclaimers and laws. press Andrew Science, Jim on Chairman. read covered Liveris, for forward-looking Fitterling, Speaking statement the Chief Also by call session the says in room Chief on Doyle, Ungerleider, with Please federal Officer intended Sheorey, Products Investor statements are summary, the Harbor forward-looking today contained release, President under Howard or be the in call expectations in Vice future today Company's Agriculture Divisions; this the securities the Executive press are our that states statements for Financial are Breen, provisions us Marc of release Operating conference and Ed the the Officer; Officer; of Specialty Relations. Collins, predictions Neal that and and management's and Chief and In Material Safe slides. DowDuPont's to

in XX-K, titled well DowDuPont's in included Form section annual included and assumptions may cause statements Risk in proxy and actual Form Forward-looking statements based results such risks uncertainties from which are A most is on principle joint and on current which statement detailed statement subject results to materially. as are and as differ risks may differ that expectations the current S-X. uncertainties both Factors to forward-looking report actual cause discussion materially of to registration or the prospectus Dow's DuPont's

turn on measure call pro on measures our exclude specified, comments and where other forma a non-GAAP our and website. comparable today applicable addition, associated over financial now GAAP reconciliation are I Unless a to Ed. presented some significant and earnings all to measures, are release disclosures financial the our in otherwise the items. most directly contained In financial will basis of referenced

Edward Breen

us update call Thanks our DowDuPont. the the key an joining Slide for Greg, and on On spins. thanks synergies the I'll and everyone drivers; highlights three X, for provide cover strategic merger, first the third and for quarter earnings

making the fronts on are We good all continuing while execute progress to in business.

care pro up soft, X%, grew X%, forma to in include; and were and instruction and Ag the EBITDA due transportation, indicators consumer EPS area. particularly particularly start electronics, the strong, Some operating of was markets. demand planted delay exception An rose for to the highlights XX%. lower in increased packaging, sales quarter Brazil the adjusted season which Overall X%, was corn were expected volume summer

year increased we'll finish a the demand headwinds feedstock hurricanes, EBITDA to cover continue cost bringing higher the and results to several in we expect to However, this further Operating the expenses growth. strong in assets despite meet we business. online for but new Ag are detail segment for including start-up quarter

long-term to with the growth The end the board This months. four businesses analysis based completed enhance realignment billion better Specialty $X.X on of thorough months merger Products realignment two the closed $X significant decisive later potential. actions in completion Division. followed a weeks a sales more and our transaction, formed was the As execution EBITDA complex on Materials you rigorous they in serve, importantly, the and was approximately their August aligned a this milestone work, newly markets and approval by from increased Division hard we unanimously a billion the than XX, Science competitiveness, that approved thoughtful than Less regulatory our strong over a board process. know, of of of their

sale asset remedy with the divestitures, three ethylene along of protection completed copolymer also and FMC yesterday nutrition the to two sale health business. acquisition just our We most crop certain X, of assets of close Dow DuPont on of completed September we we FMC's the and

the corn assets good this team's is shows later progress close transaction, our working Brazil certain once through milestones. our and seed expect sale key on this quarter; Dow of to third We again all the rapidly focus

turn Slide to Now let's synergies. X synergies starting cost with on

First billion, and to of to our $X change expectation. foremost, we target remain committed no that

the global holds, sciences, cost other rate are buildings $XXX to by designed help carefully previously run of to have facilities These year asset synergy the consolidations, us synergy still we create the are targets. in that actions costs we reach stated products, divisions timeline expect the activities. billion three at today strategic announcement, of the integrate XX% run end focus rate cost Due one year for portfolio for synergies, synergies, and review third the each specialty expect and two. the foundations of spent end the three synergies now time reworking Since of by quarter playbook to select million. Our workforce our announced we restructuring remains took target designed deliver clear of strongest already of the accelerated changes Ag $X.X a and procurement include we they This and And capture a for the and action; $XXX companies; post-merger the intended we million the reductions, taking the portfolio change, XXX% and begun $X and charge we material for division billion. divisions. for shutdowns possible cost additional efficient among charge structures to

project the are plans hit a million their of by billion the actions cost XXXX related in not We cost divisions take carefully of will aren't flow be capturing each aside accounting synergies, There also we D&A these and cost before expect of of our $XXX setting and of they billion will associated to expect until CapEx mind with the end Keep synergies CapEx savings of generate that spending charges included rate goods a inventory. run synergies; the XXXX. will to majority CapEx $X which we through our exceed the recognized restructuring of scrutinizing total the portion cost pretax cost synergy the in step-up. we encompasses approximately of $X for

Turning to a begun me work few our billion synergies, now And are have doing. of $X growth the let examples we what give on target. you also we

First years. deliver in five Ag, we products have very a pipeline XX protection XX seed crop the market set new over to strong new the to next and products

market solutions EX We soybeans. to to of of customers. we and this will in An leverage our use the deliver new expand expanded the will Enlist Brazil market these our launch throughout is [ph] our our to Conquista advantage example where access

Dow on of the DuPont the Health just draws Pharma the and FMC. combination we and from Food, Nutrition and example acquired portfolio, Another business

growing serve and to customers Our portfolio emerging one of now now provide broadest release, excipients integrate pharma binding can We capabilities needs. industry. and controlled the has for to blend with solubility, offerings the requirements and

business implement our the excipients plan to bio-based gives our medical integration healthcare new of with combined details initiatives other silicones, from market FMC we you and when pharma Our more medical created also plans. stronger position with We continue to and Dow as products. packaging unit emerging advance the share in in us a and

intended the the complete financial legal businesses intended our complexity and Finally, spends. merger. I to update XX reduced IT to the on spends XX entity said we realignment and new share to an after carves, The expected we Recall of will harmonization, initially requirements. months that recent

our Howard to we spent stated through on months team on several spend are process options teams schedule past assessing begun achieve for the XX work timeline of to our the and walking remain results and In in further remapping XX begun top Our few targets and at and this turn review timing, financial mitigation to over our the plans. executing of scenarios it companies. our stand we've our previously the We weeks I'll looking synergy we're advancing we're accelerate close financial priorities, standing and our our spending timeline. to summary, to merger operating detail. now and risk committed intended delivering plan, the to have

Howard Ungerleider

Thanks, Ed.

billion grew EBITDA conditions Africa, we the fundamentals. Pacific in continued Latin Asia consumer delivered feedstock geography were expenses to prices we and quarter as the Sales the specialty impact digits operating particularly and EBITDA semiconductor as from by and up forma improved as $XX X an joint electronics cost Slide on new to in earnings, of period. was end-markets. costs East raw the lower related driven a purchase and Equity accounting adjusted up markets. $XX.X supply to and which two-thirds in to ramp led quarter well across was and XX% demand, strength costs of approximately Ag grew unfavorable summary in drove to margins a pro with demand Coast. driven key Brazil, ago saw response and X% ventures. on driven million assets increased perspective the year-over-year business industrial earnings higher $X.XX, as the higher from into of pension/OPEB well material benefited Gulf Europe, hurricanes gains. except versus MEG a product the we consumer costs, higher strong more up by these on rose $X.X EPS X% This translate higher a from which offset due Middle billion, results both segments. all as results, broad headwinds to higher than gains grew assets, Moving the pricing Sales These consumer U.S. geographies by Sadara in from America, our volume by price benefit our of year From price Kuwait basis. of We as equity weak double Local strength a initiatives in in and up and range volume tight in demand start-up the

saw forward working each performance additional focus our and the improve to We conversion on for cash will it capital quarter, our in divisions. improvement our opportunities going cycle we continue of during to we also see

few Let in me items touch a on light we provided modeling of guidance September. now in the

who job to the forced [ph] did impacts thank an the businesses mitigating many aftermath. the hurricanes incredible in of First, teams while our I of declared mature want our

and manage the operational supply our dampen on the and effect. operations financial dynamic the and teams situation chain Our ground

the DuPont operating want in of for adjust As gains our these and into which I million. to the rate rate exchange a quarter hedging and of items, forma foreign XX%. provide tax the tax significant intangible by result, in approximately affects, greater transparency losses. the quarter impacted was headwind was assets, we When pro was $XXX also amortization the

Now with turning to our on Ag results segment starting Slide X.

America The our business were volume lower products. continue by as EBITDA as and know from this we low Ag an of elevated declined protection sales typically Brazil. is hold in protection channels Lower Latin primarily faced additional inventory price. sales a you earnings driven to year Operating quarter, levels headwinds weakness perspective; million, crop for seasonally third $XX in due crop to

Additionally, seed for planted to to penetration headwinds season eating these volumes expected across hybrids, start Brazilian soybean of We partially and declined at delayed insecticides corn herbicides, and area. corn the in a offset primarily continued cereal products lower due costs with new product and fungicides, pests. reduction summer SAP

Ag, of up The to approximately return in benefit. XX% Leptra fourth for with the from volumes growth America hybrids, by increased sales, about ahead to driven and Latin pension versus lower continued a prior $XXX up OPEB in and million. penetration the are we EBITDA Looking portfolio sales increases costs year higher anticipate corn fungicide corn quarter and operating

to EBITDA A-series and to corn Enlist is increased new products in single We be operating gains both soybeans. percent, of year of from volume, XX%, full and these feed by hybrids, cotton, sales expect XX% pricing the increase expected will penetration Leptra increase low driven including digits

the today. where grew increases Turning both to local all segments Science division led X; price volume. leadership end in markets Sales geographies by grew with EBITDA X% and hold gains on robust the and Material positions on XX% operating demand Slide segments in in we

and in period. the business in materials system solutions higher impact offset gains of business of billion, and continued silicone margin was by The repair sales market production material enabled higher down had in EMEA Pacific segment costs, related products. Consumer businesses demand The management sales delivered coatings in Asia $XXX in achieved than $XXX equity delivered than growth Packaging Pacific. equity of repair led in pricing as sales strong demand related by end downstream and healthy and largely Polyurethanes demand, million, Plastics price momentum, consumer infrastructure operating million. Food up merchant reported digit primarily earnings segments; in grew geographies, by were and billion EBITDA this were markets million earnings volume as growth, increased to operating applications, EBITDA pricing hurricane in ago demand. intermediates feedstock hygiene and & with from volume Americas continued all which in more as Specialty led to of upstream Asia higher Moving strong health U.S. robust an in The the growth primarily costs up North disciplined double on consumer segments. margin demand significantly local led Demand growth reported well in & the sales pricing by Packaging $X.X particularly of Sadara growth & increase and performance, driven increased and consumer volumes. in most remained cost, higher higher Plastics reflecting increased which raw and Industrial EBITDA volume and in Packaging of gains America. growth the the ramp $XXX increases due together well operating more as and the Volume silicones, applications, hurricane delivered intermediate Specialty and loss broad-based strong Solutions $X.X year production loss Industrial MDI. from price higher offset costs, Specialty

ago gains million Construction achieved declines in operating EBITDA was million and systems offset material plant enrichment million and industrial including gas and Slide imaging EBITDA, of was offset $XXX and lower portfolio aerospace pricing portfolio impact and million digit stronger volume in volume a gains in higher a achieved period and high-strength from particularly year growth in semiconductors, by in $XXX Volume local the on led the actions. higher period to in the and double protein segment $XXX with thermal-resistant actions. broad-based by offset in photovoltaics, than from oil up Volume advanced and electronics, gains growth year X% more Transportation consumer in driven automotive, and than of gains broad-based in $XXX negative electronics price the from to end-markets biomaterials and growth impact The costs. raw primarily the $XXX as consumer from EBITDA million on markets. $XXX in double and gains automotive. semiconductor, by industrial EBITDA Safety display and end-markets the of electronics impact million increased double the achieved operating period. led reported volume Specialty mix raw Nomex ago costs, XX% which & $XXX period volume digit local delivered and the mid-single versus and and and solutions sales in Nutrition continued contributed offset growth with Pacific. and of as probiotics, of negative ago operating strength by price more microbial materials. more $XXX control than textures growth, digit operating Electronics key to coupled Biosciences EBITDA year Asia segment demand compared year X; in quarter operating line [ph], strong from continued solutions, gains demand division million million Products improved growth of garments than the performance Now top Kevlar ago material digit markets, more in polymers

Turning XX, to I'd for a of Slide highlight our to the quarter. fourth few like expectations

disciplined in many line increase forma billion on and management well operating net year-over-year in growth the gains cost and growth to material key mix XX% expected healthy pro drivers top are momentum is to over Ag, forma billion top growth, $XX demand EBITDA X% in $XX.X which the every by range offset as pricing supported businesses. penetrations expect of XX% sales line equates by segment. to be margin We bottom our with as new consumer Pro raw to Volume expected year-over-year. improvement to line increases and notably of for further impacting end-markets and be product key to

to from impact Specialty at benefit we projects Hurricane Maria our million of driven Rico. continue start-ups productive to A decline production to venture & as and well portfolio non-core the the are up joint Plastics margins plant electronics, semiconductors Harvey. the will growth higher to higher as to in imaging sequence from negative U.S. the offset the $XX commissioning of the turnaround activity, carryover electronics expected costs see stake Hurricane the in in ramp related be due segment and the disruption in year, Coast partly as impact this and Gold by a for due the While as in a recently sale in Puerto industry residual Packaging remaining units started our in Coast, earlier Gulf consumer at sales segment by well a

these As early deliver we on in mover package solutions advantage further units, consumer ramp this robust to demand EBITDA our we will differentiated higher capitalize environment. continue to and

$X.XX result in fourth OPEB an share about and of lower and outlook the accounting. pension purchase from a Ag year-on-year products of tailwind EPS expected Our incorporates quarter primarily as portfolios per costs, Specialty

However, about the this expected tax additional of over the the increase quarter Please mix on turn refer earnings in to XX% call segment XX% Slide Andrew. And be in offset due benefit outlook. fourth presentation rate the the commentary an to that, of to I'll with from appendix operational earnings. 'XX the to by to is in for our geographic XX of

Andrew Liveris

Howard. Thank you,

continues expected we for in countries first positive area, see euro on-track decade XX-plus the all across performance seen what is maintaining most is United we notably than grow outlook The economic to a are OECD time change Turning the this our greater major the for many on with the quarters. year. Slide to the in of acceleration have and led trajectory States ongoing The global economies. strength its market XX, by economic in-line consumer

August our that had strength all is operations Class then best sales. year. sold the at alone examples demand the billion and it's its same World we In XX joint achieved the In quarter last commercial that venture. last JV we announced the was significantly units in see Sadara already than the £X.X the period more wrapping by of One of more complex

particular able products customers because due we were India, Sadara's demanded world established strength to but the units are to envelope, in seeing and We market up the Southeast in in Asia only our our China, and polyurethanes channels Europe also and solutions. ramp pre-planning these and Central around not

reaches Packaging, into expect In its We site capabilities. fundamentals continue to the as remain next full this trend year positive. the

We and for the demand of demand largely a slow PE have upside years trends view our be fundamentals GDP nearly growth maintained to the consistent with even environment as global three continues supply to have the matched projections. together robust, growth continue new additions shallow improve. view support taken And to leading a pace capacity delayed supply These expected. short at measured held long coming factors period. online of a more adjustment and have been our than prospects potential

standard importantly, middle urbanization remains of consumer as More outlook class longer greater population a term our emerging in the markets continue to packaging. and growth, the unchanged drive of growing adoption

on forward needs levels on execute near-term has to it Slide Looking priorities. the XX, all DowDuPont

in a company, reporting combined close quarter, quarter You major we quarter. closed with delivered we as the overcoming our in the growth third several we expected a of this divestitures to in bottom can first this headwinds performance two remedy see the delivered three top line and

our intended plans our we'll growth our we expectation within [indiscernible] in the synergy spend to to merger. as the closing the advance plans as cost with XX as achieve began on complete after growth accelerated the East, to progress well that immediately intended projects plans. on spends our well the Coast XX And synergy months commitments, U.S. Gulf and the executing continue Middle as We

are our we assessing ways remain Ed As actively we said, accelerate to timeline to and committed it. original

more call. share this earnings our future on We on will

while to announcing buyback share of we will cover underscoring the authorized external each more share Before our target fourth to one the preserving forward of Board an that I excess multiple to and teams billion with owners. I to intended per Q&A, financial has allocation to step our the shareholders structures capital gauged in initial the Spin a work our Directors today; shareholder turn to a cash commitment approach, remuneration, boarding quarter capital for In the dividend approved DowDuPont's advisors flexibility considering achieve returning are $X.XX establish capital $X coordination program to Co. returns

The three considered announced affordability policies both the of and Additionally, a factors heritage the numerous ways; Board's quarterly dividend flow, with dividend is each its Board average companies. on meaningful the transactions, the today decisions in the dividend decision to dividend ratios quarterly and cash making targeted historical of consistent and company precedent is dividend heritage equivalent heritage for first, payout including its on weighted approach in both companies.

to billion for dividend program. Second, payments by announcing total heritage December, payable XXXX. heritage setting equivalent of cash today in Dow of dividend an And in this the represents Dow through dividend shareholders receive repurchase amount we absolute a a shareholders additional date And five will quarterly increase. XXXX, legacy DuPont are $X a third, the

look As we the result would accomplished both program. to Q&A. to so in two team path proud resuming this We prolonged turn a ability amount you know, a Board began to management as our value industry has heritage shareholder this today. our repurchase companies company's with had review With sustainable years are past and have we the repurchase about that I'm of of merger; to which the Neal creation, and deliver over regulatory firmly for share intent of growth shares forward [ph] limited leading journey on I'll short three that create time. such the

Neal Sheorey

on that move let's your With to Thank Andrew. questions. you,

instructions. would and our that statements the Q&A I apply Q&A. the both, to our First, following remarks please remind Rachelle, you to like forward-looking prepared provide

Operator

Juvekar [Operator from first hear line P.J. Instructions] Citi. with P.J. is We'll your open.

P.J. Juvekar

you. Yes, thank

the impact understand company. prices rising oil the Brent hard up, As of $XX hit on go it's and combined prices oil to

Dow I think side DuPont specialty but was the side. on the I benefited on petrochemical historically think hurt

you. the on as there company? what's change hydrocarbons heading is new combination? Thank And approach in impact to net the any then, what's a the result So of

James Fitterling

is this Jim. P.J., Hi

and the but lag to in sometimes movements we leads what there rise, happens what are and for the us the I do As prices leads taking of Most environment mentioned materials Look, we think hedging what pricing at in products I with probably long-term a positions between financial to our and on on our in position. -- and always up of our shows up a that it advantage to as in you going constructive we're cost materials exposures it company, downstream to XX-XX basis, continue do near-term well looking we'll that. this a company. think physical, need is rightly can mostly as probably show

continuing we're drive that so to And look from our seat.

Marc Doyle

I'll Mark just material when Doyle segment. a Jim's comments of actually number of sort we've build; some from is really watch, also a division. this oil got we into It's products headwinds that but from market specialty sell raw substantial increases

we're balanced net-net, division oil this So well price changes. from pretty in

Operator

next Stanley. I to Andrews Morgan move Vincent with And

Vincent Andrews

Thanks.

out the spends I know, be about Ag, you come was you knew material talked there discuss one time. just question would And co the you options transfer the specialty a now on what for specifically first question to co between a the accelerate, first that because obviously maybe then done you FMC long timing; level? to and the are nothing and guess about could the and Just as thinking there those high

there thoughts be helpful. any would So

Operator

reconnecting question? by, Please this hear Instructions]. as a Please his And stand reconnect. speakers. And are we're we end. response did [Operator stand hearing not you by on the we

Edward Breen

from Difficulty] released originals down [Technical $XXX,XXX that it, that's $X,XXX $XXX,XXX.

area this see claims Continuing bottom to You numbers to to the low. you know, have back bell X.X… go

Operator

as Andrews get to question? speakers his the by need speakers Okay, reconnected. stand And to the need we [Operator re-ask rejoined. And please his question. have you re-ask did Do Andrews you Instructions] Mr. Mr.

Edward Breen

start please Yes, a We of apologies. and technical had We'll again. call little my difficulty. a the bit

we of plenty top make past hour go will also of Q&A. make for We sure the time the to

if we great. would be Rachelle, back could go to Vincent's that question, So

Operator

And line your you. open, Thank question. Mr. is Andrews, your repeat please

Vincent Andrews

on broader you've within a Actually if that of fit multiples think relates low to just by know, the wondering Co? them thoughts of are terms of reflection in your quite question. digits nutrition, high look assess different Co? double Co; those some I'm you I just as pure I biosciences business it just as time sure. Specialty for out -- Ed, mean the the get at in to what you the multiples peer Specialty high and Thanks. are what and I'm that, will wondering industrial the health teens had if with balance full or combined business the And that and Specialty slightly of Okay, EBITDA

Edward Breen

the that presence will market, against been not the from scale that question. and I'm moves that in portfolio the the pleased here health as leading look, ask FMC in And the call, the nutrition revenue DuPont's breaking time. now just with out this nutrition portfolio And we've been we because me on But we give can at mentioned just which comes really in spending R&D excited you're global Dow combined into size market one to you that and earlier Vince, point it's focus to the that company I'm really leading add about and portfolio let us have, first the pharma market. saying, and see the really made division. health start substantially by in we we and a standpoint, the

more of way quarter our in exit we really some to going part but part overall cleanup that portfolio be of or there see in to move will directly that there and be you noticed and our portfolio. reinvest I to nutrition where like our nice you'll the where our add with commoditized So full high, of growth couldn't are not out question; some so point growth more as in very and fourth pleased are guidance, want to we're the do health the be in that business one quarters is growth your in portfolio might I we forward. I business, as other in area would your point get we'd

sitting very got all set there solid for in work a our answer portfolio we'll now, long-term very to for us at we've but is, optionality way we and Specialty to is good path of it's divisions So great at sustainable take cut a And at handle the look, our that's look the will pursue of we and kinds and is and want shareholders would overtime. the have the front is; best to of day end out that I this shareholder value create that how certainly goal the that. it whatever

above the like at. to see things multiples of look XX what see would company XX you that and is the We'll always absolutely look how it. value industry You're even out times trade, we'll to trade specialty they in XX are shareholder right, which to what optimize

Operator

on Jeffrey Zekauskas move to to next with And Morgan. JP

Jeffrey Zekauskas

much. forward; for In of the have pension shutdowns? the company pension the wide to are billion of what what that DuPont's procurement, you divide you up was your does of And facilities, and Also contributions pro funding the going your very in work funding, synergies, how make. workforce, forma of levels Thanks into combined buildings could if assets cash and flow quarter? $X that

Edward Breen

globally merged guidelines contracts working companies, we we together the follow. and is our to the makes have Jeff, on and XX is curves that and we rest. on have procurement because big all the the the that of piece; all related I synergy in on not to in will then and more piece that teams that until headcount companies across procurement do allowed of synergies, up say [ph] working have area a teams and XX% the about type facilities were there you both actions of the you that now over

you So precedent have because type deals procurement; companies our to of intense now two $XXX heard say of the there. north in the come should upside be and have the is, with days billion between extract that we of spend opportunity which billion, from some to we baked going you've think me savings and amount I the some out before, procurement of if we is side had from at and $XX good the the teams all only $X of and these fact look work, is matter really really million able XX of

to Co division, on that the division; procurement one piece. and at multiple we'll again, next So good on we're I would be say stay met there. division, Ag both tuned all the where quarter probably we've we're and Spec these from times progress the teams on going that make updating with But already the Dow

Howard Ungerleider

Jeff, this Howard. is

of me parts the two other Let get question. your

identity on will still remember funding; in-line where so pension in legal Dow the construct, have funding first those so the have expense DuPont they been in the tower, prior tower with pension the we and be So period.

So the from bit in I into funding and about full Ag mentioned On that will Co and to is tower remarks on through in fourth DuPont tailwind; that a year will tailwind looking million a at prepared $XXX basis, tower the funded million that. for the Co the $XXX perspective, a DuPont kind XXXX. Dow the little of continue quarter in range it flow of you're a we've Spec into that be a primarily and

both operations, GAAP I see the that you and tower way increased pro the cash I accounting numbers way Q to flow, the the balance cash the up forma the cash, to week, billion. you. billion would you'll flow, from publish of What we the in the point have an GAAP that's would works. [ph] bank same apples-to-apples relative at tower it's you next if both, forma ago, free positive pro the cash I is, year Dow it's out that breadbox we on Finally published GAAP least just say approximately GAAP for at of because quarter that to cash you with and DuPont early look and not the will north would in positive really see expect $X -- $X merger that of

Operator

David And Bank. next we'll move Deutsche with Begleiter on to

David Begleiter

Thank now might separation on X% might have the overall, bit and be a limiting market to the buyback Thank timeframe discuss Can be what's level? seems cash needs between you. buyback you morning. late you, you cap. completed? to buybacks, the your that the good And it the Ed, for

Edward Breen

one key highlighted an Andrew Remember, initial buyback that was that it's words covered program. when of the was

past billion so fair DuPont a had and we that imagine we've how has and $X already was this get left that again get You we DowDuPont Board can by purchase. wanted repurchase; about the their one mentioned, together happened a it market both year way wanted things taken, amount half, with to And busy the to Dow the we do of on year, had were share going of been going. our the on as out Andrew all share and and actions just

look, cash is now we're in loaded. flows, now get the let's loaded the cash that rating the more at the So look Board do and the want -- matters, into said, just count will to here you we back and just need cash that you in to where lot at for got going marketplace. uses agencies, we as debt purely; don't understand of a do on that synergy we but go that that's than look right work front-end to normally counted get know, we've as they account. short-term our study, in that things that. get we What got go you what's take back-end Remember, But with in we've we'll know, -- we're said with of the conversations it through debt fact at so you

You we BBB know, the a Spec Dow high on to where and BBB somewhere the tower, something Ag. BBB the on minus ratings up at on A Co between want end

get what framework a can in know we year, back half. be, our we to we So initial But the keep we year next then the of it. excess want and on so go we is and just into as cash going is this over can mind, where

Andrew Liveris

add can David. I thought just I

CapEx merge D&A, out Mat the that. not the public from to down think backing will that very view, of we've I been point we off Co before take we're of

affordability in we covered; D&A as structure is going just go Board an especially well board high equal in capital through so the strongly Ed And of we we're as Ed CapEx meetings, into, very XXXX, topic to, spend we of off come so materials. next here have CapEx the to but just the committed remain we've off that the reviews that something get to topic have as couple I at look and

Edward Breen

be that level; therefore the three add D&A three their the Andrew, mentioned, on to do own will going an just and so is divisions good as in to I at/or on be And each shape. will the aggregate of capital spend around for each

that maintain; will balance that a and even so that So by CapEx with growth say nice CapEx plan the future XX% be that of initiative would for is others we've a helpful. and that And growth run in I got together. we've put

Operator

UBS. next with we'll And Roberts John from hear

John Roberts

Has has still Thank splitting been and you segments? us two and and done just far de-integration the the silicones been that between physically de-integrated it business progress. so is congrats the already reporting for ahead or the in

James Fitterling

this Jim. John, is

on work reinforcing as what far the announced going a As would and be of employee the I the will that physical September; [ph] say, in the de-integration that first/second part in on and you've year. also notifications the We've through financials the it's the financial that's forma got done the that so now pro the the the today. in of numbers reporting, end we done population lot of with obviously portfolio week changes of there between as all the shown work we've

they started but and radar businesses great as physical so is contact spending announced that. on in facilities that or not have days those Mark's the we working far are well in that, has our since As looking XX our and are the money work going screen. on teams are at yet businesses side teams been already making i.e. separation, this and silicone to receive progress And that that together,

Andrew Liveris

were the merge a Corning And lot so the to silicones is is It's able Andrew. this works delay of to that the of behind actually of us. positives we stabilize and Dow been one

a next what of just all talked we're So to make step point Jim ready about from that happened. view,

Operator

Partners. Next we'll with McCarthy move on Vertical Research to Kevin

Kevin McCarthy

up expected Yes, running ramp good X from you Sadara Texas through as morning. earnings analogous Would XXXX, well you improvement there? your on contributions from the you're the and comment as as complex as

Edward Breen

come just up I announcement needed you [ph] on, of a course scored and I X Jim tell parts and post-lenders have we post-spin close the ramp be moving merger just comment as we've the been and the lot tell made comment moving you parts reliability well a operational would to the I and And before units has the can might participation would Saudi the Texas want that partner you about a trueing doing. from up on the of so I've on back would that an test. we that and lead of you but huge, talk how Jim, Look, out called doing that. taken are of as lot side engagement,

James Fitterling

Yes.

that all has obviously to move. assets and liquid and Plastic running product -- third year. quarter, the third Through supply see out, starting the ironed the got been through through the we chain of strong So the you're so quarter up chemicals

around of get the You fourth rate the third the the of didn't moving. tanks business got quarter, terminals capacity full hit lot see we've all and you chain that think full a of We've will in operating the in to see that got and supply I chemicals us now world the the quarter.

seeing it So start you're both them. positive performance We're see dollar now from both I expected and or year-over-year. think is infrastructure positive but a Plastics to to to earlier, a is year-over-year to to plan I move more drag materials, a of number a it's I we but right going you we with than starting going tailwind give intermediates at be. But you're going you to see guided year-over-year. to see of what we industrial improvement as on-track this; XXXX, little an see think step-up improvement and of become don't you're to have into point them a this in bit number

Operator

next from Mitsch Fargo with Frank And Wells we'll hear Securities.

Frank Mitsch

back equipment? those is there was of think telecommunications is Good that and wondering morning. programs? of I comprised cost cuts, call conference and the of And thought just about part to aiding as any I synergies what

Edward Breen

in now look going area. we're that Well Frank, for more to

Andrew Liveris

We're just technology, using METs Frank.

Edward Breen

Question?

Operator

question answered? Frank's Is Yes.

Edward Breen

I has But hope he question. No. another

Operator

your line is open. Frank, ahead. Go

Frank Mitsch

where about And or we either you. company thinking know at one should obviously the you any helpful. low operating Thank the about synergies is production and be very as assets; the we that was of rationale; No, that mentioned the very shutdowns would and forth, part asset be rates? color around of so so running what's offices

Edward Breen

year the side from Remember, addition DuPont and facilities, is three me hit over in in house, pretty of way little bit the fairly which last is by Ag Let here consolidating side. shutting from more of footprint significant. specialty the significant to actually the Wilmington the

location. and we're to ago sell production on So, work just in some Cooper just And really exit us another to have of focus we've specialty not strategically cellulosic that overhead proven moving Laport we it's We down structure. announced going announcement initiatives the going that today have, to to announcement we we're an we've [ph], our Again, that, totally facility. in months which existing be of a of that exiting the the -- mode you saw few area Iowa totally been future continue technology shutting of and facility -- to core Nevada, with leverage we going out know the our the out that to River, closure to will our in on the growth the going everything but facility. technology we're now our so you have

numbers this locations. add and much maybe type is you Fitterling, And there moves but in Mat that is course can part smaller example, and there that occurring all many markets So three really major into up comment Ag just on is there Jim with more of Co. local in an rooftops as of the just significant

James Fitterling

Yes. Frank, on Ed look, would just I Co, echo Mat I think what said.

down, have in anything are company take there strategic be that as to locations the we the the I think no footprint new many us reasons and look how we that around we market to at there reasons for some might have support world.

to you downstream combined that. taking or locations side, the asset nature So do ready for merger ready And XX-XX or and step. months to into this like get the last something things of we're next the specialty that look get of some when some assets and get move over we've the at lot a on -- sometimes for a and also done an opportunities,

we're of So think what the biggest driver I here. doing don't it's

Operator

to Bernstein. move with [ph] we on Jonas next And

Unidentified Analyst

Good when there spends thought a was morning. XX less XX if what hear of because said or happened be that XX Did to right consistent months expected and I I the there are now message so, months; you you pretty to before?

Edward Breen

portfolio in Howard the the we're carve it's maybe is do But many so to -- divisions properly, me and -- its but add know, this. part to change. look what which to not Crop out significant moving a of align at but over only when not I I much what only to comment $X we're Dow; let because to is remember, moving of shift task. like revenue wants very cases Yes, you of of billion division you half mean, had it's the few Protection to over division it Crop similar DuPont Protection a more words

Dow now IT multiple to legal doing we're of scenarios in our the end is systems and do. that extra have work entity on out work, harmonization that the So carve work, the we now really

confident at months but felt again, So to what that team XX to originally that we XX can tell XX we're there we we kind update that back hard see work point ensuing worked and where to of guided we [ph], go, make nothing as today it over hard said XX. report some lot XX nights excruciatingly teams de-risk but progress. was we XX to in down we you you're then of can if Jonas months; We're right, before to XX and and are weekends to and the data we'll some hopefully, working trying you else pull and that to our

Operator

Markets. Viswanathan on And next Capital with Arun to we'll move RBC

Arun Viswanathan

morning. Good thanks. Great,

you growth level I that XX% you about note expected curious, potentially -- new couple of into the give I'm around QX, product slides your further startup would guess kind that sustainable if launches EBITDA that outlook So goes? in us Thanks. as implies accelerate as is do think [indiscernible]. march that off anything see to your could far forward you just next costs of I as or quarters that XX% or rolling and --

Edward Breen

and I'll comment Yes, turn let Howard. me make to one over it

got quarters; quarter a sequential just you've the to mind, that you're bear seasonality up to in real down account got quarter. take into when about have going when you You've AG talk so

talk we'll doing rest. we're how about aside, that putting the So

Howard Ungerleider

Ed just introductory remarks. first this think Yes. I look as the I in that quarter mean, I was would say his kicked off

look third well to of we on XX% the that of and do try the feel quarter quarter about DuPont the we more to is operating feel line as numbers. up as EBITDA, can, in about next good you the full do XXXX both really top First quarter give the growth results in the quarter, those quarter to we you we as a really granular give as what fourth so is but we'll north XX% of fourth X%, possibly by of segment and outlook as our good

Operator

with we'll Laurence Alexander Jefferies. next And on move to

Unidentified Analyst

Dan Laurence. is this [ph] Hi, for

you So thoughts outlook for on as Ag? have head early we do American XXXX, North the into any

Edward Breen

we'll this talked some market thanks. also third America summer Yes, some -- had Latin quarter shift season, corn we it's fourth Clearly, delays as the in overseeing in about and of and we here pricing of some American acres. has effect markets [ph], an sit back on really feel well as the commodity they as -- growers Supremia shift and and that are at they planted North look

in pricing So where [ph] probably about are America like, flat. that be it going we're is telegraphing C-tag flat. right North to now probably area Like for Bag corn

hopefully, And pretty we're planning corn ramp well. -- the opportunity season to on continuing acres upgrade we some normal For all more roundup continue our a that us replanted as we'll the our the so a continuing us to replanted ready market, of is aggressive last of with then, it that those year, more of adoption we our uplift. give new to to a to product mixed have soybeans, bring genetics, bit extend side continuing drive technologies A-Series into technologies; the little faced the for mix

Operator

with Bob Sachs. next Koort to we'll move Goldman And

Robert Koort

as up, you the have been any carving proud you thought Thanks some dis-synergies very guys in rightly apart? a outlining benefits, you integration of past and as much. about I of feel the had was I did know efficiency wondering differently, bit that I

Edward Breen

let going take to question. that Howard I'm

Howard Ungerleider

going reduce feel say we we took think verticals can about like would set with is that like on And some looking others, portfolio we faster. with We I based Multi-Base stranded September how going grow the segments costs risk-adjusted to market some aligning I reporting. few segments really and and Molly to Dow a of as and There -- Thanks, was we to in Bob. announcement we the XX portfolio deal to we're essential it, our businesses of what we how up like, that. to out the the that we're most the with to we these costs, forward it mid-September at Spec -- success. on what Look, sheet four we're the say, months the a what these will started value way full announced can further, Corning see will the and based Co with and September, that up early certain with we're be prior with that, verticals spent four we to really committed market doing the there But to set businesses enterprise deal have long-term maximizing would realignment that entire that realignment and is the way and portfolio companies be dis-synergies good clean started verticals, we've market the for I Code, we on paper. the have like that put

Operator

on to And we'll with Carson Susquehanna. Don move

Don Carson

growth the Yes, synergies. question on

really in so what here there? about to timing? -- or what products what synergies, percentage some and talked will that from what's And Ag what launch You chemical example, for billion you there, has the looking ability crop new is $X were is growth growth exactly you already, those the that greater you pipeline for come list gave examples; of the the ability are products DuPont synergies

Edward Breen

in high me touch maybe Spec Co And of to high give now opportunities significant you Ag, the like about. to going especially because level up want because talked let this. and between it a just opened Yes, are the the as change, gross end-markets The lot energies really and on Jim Mark of percentage of Howard just a reside portfolio more

Co. about don't bulk that's So Ag Spec and you then to you the the why them, on working I Jim and it talk turn but of teams

James Fitterling

Great, thanks.

into clearly of of drop the base products offerings kind think loaded You're technology. you synergies, then channel EX Conquesta expanded but so have pipeline the either or and them much be examples a as that take were plan right, of about more would of [ph] we one the of a we technologies those that you Enlist some great into our growth access; already

to this set stronger ever has that since shares, we you So one we've haven't had; retail now about retail. And sell those then, more just that, that going a through we opportunity be the market take that bags from multi-channel about as a will have access we've it than think brand where [indiscernible] start much our market direct channel the of well. now talked to of this in able pioneers, offering and pioneer up route into genetics multi-brand got Dow to and had strategy as whole to been them of route before, put more them open now as

seed doing opportunity America Latin America and but lot expanded have on yet, North we're in background same about those that some broader a to contested that that genetics, talk synergies. with that now access of with to of comment that it's start the of things kind the market chemistries. drive a growth that's And that's view So to we kind we route a really

intensity have we were really that's knowledge good like these had hands launch growth we about around have our the -- [indiscernible] the now of take combined specialty team synergies. with strengths ability the [indiscernible] now companies with different about opportunity service to to that markets, markets team we markets there, the Our that those products right and the in the in we think in years, in source a insecticide that expanded you feel we've of China, another in the side over the broader new world have different

Edward Breen

Mark, why specialty? don't on comment you

Marc Doyle

Tyvek products Dow the our associated and our Styrofoam particular, a polymers portfolio originally said, it in strengths building products the and like the in I offering we construction was electrification. Thanks. around of the synergies is high working leveraging electronics see businesses in have channel the new were the The and FMC with up offerings growth. already of Ed specific portfolio, new a we've suddenly some And number now and of combinations billion are I the these growth and And residential channel, synergies. we're And there. and opportunities performance of electronics kind have original the now and lot there [indiscernible] uplift opened I end-markets really a leveraging plan we lot combination excipients opportunities that on realignment lot we of example of of the of growth business the portfolio actively potential question of the in lot potential with and and and automotive share and industry, think pharmaceutical that space as the lion's pretty was growth those still the Jim combination for upside breakdown share script we Dow's a has I'm on about gain of are which the in think a cellulosic and $X is up seeing But the of in about alignment opened broadest for mentioned and teams again, exciting between excited range early our a there. the focused avenues very

Specialty many growth here synergies on for really So opportunities delivering Co, those forward. across we're and focused moving

Operator

next to And Global. Hassan with move on we'll Ahmed Alembic

Hassan Ahmed

question a utilization slight Co, guys rates online. you about I A this know, obviously, you morning. coming early in around Materials dip all with year, capacity the talked in of maybe Good if heard next call; correctly

muting some time that little part It it virtue cycle the had the a is as hurricanes coming of obviously XXXX side question; very capacity online well. have period? seems seems there also post the sort of sort of on So two on this one, down is the impact that

is part will facility of this considering of methanol methanol any about came facilities that build converting second Iran MTO this announcement talking across sort olefins future of the to that actually and all tied I how So will is be recently their facilities, into [ph]. they

near the as parts So we these of in of pertain medium the to how to about moving sort cycle all term? think they should

Edward Breen

get Hassan. add, I'll and to start I'll Jim

points with I and alignment going think for have than of involved wrong next the demand to months been two show is industry three were years who've in XX what more first forecasted. pundits Your upside supply consistently consultants

far the occurred. Iran, matter China just said, and you consistently what so of and projects lot they've a indicated that's MTO other all you that the way capitalized, we And So they've and consistently been been it. as they've should take for as late, consistently over not

I say President any short so of is something other announcement might whole a thing. take And would Trump that from nothing of out Iran which

balances I worried that tell Jim? that not in supply So the years. would we're about demand next you five in

James Fitterling

use just an as plastics our and our Yes, analytics I'll I just would example. say, say numbers

there probably and is good the demand business although segment. there. that growing segment. to way more diversified in seeing talking maybe pretty by type and on, it I X.X%, so higher trying there, is markets plus good X.X% growth talking like from at growth what coming demand growth, times X.X% And growth pull we're of pretty right is, in environment GDP growth. outlook for for demand about downstream and we're and you're demand we're continues Polyurethanes a in now looks next GDP plastics demand there the our constructive market the think so that of the for You're years, X% about very end X% compete the steady economy, Downstream capacity about and that's demand now, a couple capacity of an is -- X.X in XXXX

agree materialize, with rate environment I very a oil about these you. moves take then. to from at I in different if years making we're on So that they're an that and talking perspective mean and come market they now gas will five

Operator

Investments. Peter move Glen Hill And I'll next with to Butler

Peter Butler

than to on impressive in wondering some Good morning. GDP environment. of your some of slow Dow really in and I'm competitors do? gains volume a the And through how have much a were rather markets as these The of very price help your it in selling is folks ground distributors

James Fitterling

use the a it's customers ground think Jim. be is I example. for I'll us to this always on build Look, we've as helpful relationships Peter, got just the with great Sadara to good selling, and

wave online, qualified said, material to thousand expects is a there all countries know, a XX that XX been and are plants literally for in we've come more there materials those XX plant everybody a out; of than comes to giant as that You over. have customers

selling the have are they any segment don't through to feet DuPont is material I those models. changing Dow these on both that to all something of at when all like in isn't ground have the now, and and it presence see they value the world, all three divisions So and that pulling place demand all the used in global reach and distribution this one market that in you of look and chain. is going actually that

Edward Breen

by Peter, going product future really the way these new a the lot pipelines. other of is in our the important thing add of the growth going which you're I of innovation get because us would in forward; out is divisions to to

way really And the in when or light positive about vehicles compelling spend, we way, next marketplace few give to auto so products in are years. the we growing into above the more it electrification in and innovation, this market and look clearly growing, global other about being you at new the when Ag our putting the And that economy our X% trends you part pipeline and it's that's one continue into our and the very us is both, the by our our just and transportation price, pipeline. we're the lapture products the the launch at I'll you of the by car talked and weighting volume auto-builds of it's R&D where portfolio because And about. area, month DuPont we're dynamics the example all in Dow the but of these this those X% area; above had whether content business, the that's year the and above [ph] past results new look was Ag all

Operator

of Bank Steve America. for from do with one question. Byrne hear last we We'll And have time

Steve Byrne

market. A higher feedstock That meet feedstock you Thank facility Sadara pricing? Sadara. you. given push initiatives questions Saudi product the outlook for to on to comment government's can I appreciate in couple about have squeezing is European of the the that to here. priced And ability you for the move specs polyethylene pricing me into

Edward Breen

why on Jim, bit and that. I'll you a add start don't

James Fitterling

have our I and all products customers all been it's those qualified meet at the would they've the the global accounts. the just On say already to but plastics and product not end, ability specs of

So actually together place. you And as locked-in there deal is an a the won't they positive another still had that's very when supply a and period of put in a for them. which they we those feedstock issue, and see issues know, thing no what we there, is time for see agreement is source costs for

lot for of basis be our projects and moves would see the a and you new happen in capacity. think I So go-forward that new

Edward Breen

we Jim region Most much to important Yes. commitment they is answered doesn't are will Petroleum. I ethane finding all have we new all and that last things from Double of down though that they gives really well available dry tow-in have allocation region, -- enact associated the able the Ministry on be whenever competitive competitor that so Jim the agreements it's edge we of pricing those the grab structures may on which think All have. the gas thing we'll place but would tell have next agreements I matter we put honored, that Sadara you other in of imminent. no previous can the several now the that did are gas the the and is that are really liquids, question. when did kingdom that that for also years big based it's a in known the what which for in it how other and

Operator

question-and-answer like call or I At this Mr. the that Neal would over for back remarks. conclude And will closing to any additional today's time, to Sheorey turn session.

Neal Sheorey

in Thank you, thank you and and your call during today. our our for We your for brief DowDuPont. joining everyone Rachelle delay appreciate interest patience

website later transcript concludes call. reference, This posted For today. your DowDuPont's on our our of copy will a Thank you. be

Operator

We And thank that will you conclude your participation. for today's call.

DuPont de Nemours (DD) 3 Nov 172017 Q3 Earnings call transcript