Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Effective August 31, 2017, pursuant to the merger of equals transactions contemplated by the Agreement and Plan of Merger, dated as of December 11, 2015, as amended on March 31, 2017 ("DWDP Merger Agreement"), The Dow Chemical Company ("Historical Dow") and E. I. du Pont de Nemours and Company ("Historical EID") each merged with subsidiaries of DowDuPont Inc. ("DowDuPont") and, as a result, Historical Dow and Historical EID became subsidiaries of DowDuPont (the "Merger"). Prior to the Merger, DowDuPont did not conduct any business activities other than those required for its formation and matters contemplated by the DWDP Merger Agreement. Historical Dow was determined to be the accounting acquirer in the Merger.

As discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, DowDuPont previously announced its intent to separate into three, independent, publicly traded companies - one for each of its agriculture, materials science and specialty products businesses. DowDuPont formed two wholly owned subsidiaries: Dow Inc. ("Dow", formerly known as Dow Holdings Inc.), to serve as a holding company for its materials science business, and Corteva, Inc. ("Corteva"), to serve as a holding company for its agriculture business.

Effective as of 5:00 p.m. on April 1, 2019, DowDuPont completed the separation of its materials science business into a separate and independent public company by way of a distribution of Dow through a pro rata dividend in-kind of all of the then-issued and outstanding shares of Dow’s common stock, par value $0.01 per share (the “Dow Common Stock”), to holders of the Company’s common stock, par value $0.01 per share (the “DowDuPont common stock”), as of the close of business on March 21, 2019 (the “Dow Distribution”).

Effective as of 12:01 a.m. on June 1, 2019, DuPont de Nemours, Inc. (formerly known as DowDuPont Inc.), completed the separation of its agriculture business into a separate and independent public company by way of a distribution of Corteva through a pro rata dividend in-kind of all of the then-issued and outstanding shares of Corteva’s common stock, par value $0.01 per share (the “Corteva Common Stock”), to holders of the Company’s common stock, par value $0.01 per share, as of the close of business on May 24, 2019 (the “Corteva Distribution” and, together with the Dow Distribution, the “Distributions”).

Following the Corteva Distribution, the Company holds the specialty products business. On June 1, 2019, DowDuPont changed its registered name from "DowDuPont Inc." to "DuPont de Nemours, Inc." doing business as "DuPont" (the "Company"). Beginning on June 3, 2019, the Company's common stock is traded on the NYSE under the ticker symbol "DD".

These Consolidated Financial Statements present the consolidated financial position of DuPont as of December 31, 2019 and December 31, 2018 and the results of operations of DuPont for the years ended December 31, 2019, 2018 and 2017 giving effect to the Distributions, with the historical financial results of Dow and Corteva reflected as discontinued operations. The cash flows related to Dow and Corteva have not been segregated and are included, as applicable, in the Consolidated Statements of Cash Flows for all periods presented. Unless otherwise indicated, the information included in Management's Discussion and Analysis refer only to DuPont's continuing operations and do not include discussion of balances or activity of Dow or Corteva.

The statements of operations and pro forma statements of operations included in this report and as discussed below include costs previously allocated to the materials science and agriculture businesses that did not meet the definition of expenses related to discontinued operations in accordance with Financial Accounting Standards Codification 205, "Presentation of Financial Statements" ("ASC 205") and thus are reflected in the Company's results of continuing operations. A significant portion of these costs relate to Historical Dow and consist of leveraged services provided through service centers, as well as other corporate overhead costs related to information technology, finance, manufacturing, research & development, sales & marketing, supply chain, human resources, sourcing & logistics, legal and communications, public affairs & government affairs functions. These costs are no longer incurred by the Company following the Distributions.

ANALYSIS OF OPERATIONS

Portfolio Changes: Business Separations and Distribution

Intended Nutrition & Biosciences Separation

DuPont and International Flavors & Fragrances Inc. ("IFF") announced on December 15, 2019, the entry into a definitive agreement for the merger of IFF and DuPont’s Nutrition & Biosciences business (the "N&B Business"). The combination will be executed through a Reverse Morris Trust transaction (the "Proposed N&B Transaction"). The Proposed N&B Transaction is expected to be tax-free to DuPont and its shareholders for U.S. federal income tax purposes. Upon completion of the proposed transaction with IFF, DuPont shareholders will own 55.4% of the combined company and IFF’s shareholders will own 44.6%. In addition, as part of the proposed transaction, DuPont will receive a one-time $7.3 billion cash payment, subject to adjustment, (the “Special Cash Payment”). The Special Cash Payment is subject to adjustment due to, among other things, variances in net working capital, and, therefore, could be less or more than anticipated. The Proposed N&B Transaction is expected to close by the end of the first quarter of 2021, subject to approval by IFF stockholders and other customary closing conditions, including regulatory approvals and receipt by DuPont of an opinion of tax counsel. See Item 1 for additional information. See discussion of Nutrition & Biosciences Financing under Liquidity & Capital Resources below for information regarding actions in connection with the Proposed N&B Transaction and Special Cash Payment.

Dow and Corteva Distributions

In connection with the Dow Distribution and Corteva Distribution, DuPont has entered into certain agreements that provide for the allocation of DuPont’s assets, employees, liabilities and obligations (including its investments, property, employee benefits and tax-related assets and liabilities) among DuPont, Dow, and Corteva (together, the “Parties” and each a “Party”), and provides a framework for DuPont’s relationship with Dow and Corteva following the Distributions. Effective April 1, 2019, the Parties entered into the following agreements:

•

Separation and Distribution Agreement - The Parties entered into an agreement that sets forth, among other things, the agreements among the Parties regarding the principal transactions necessary to effect the Distributions. It also sets forth other agreements that govern certain aspects of the Parties’ ongoing relationships after the completion of the Distributions (the "Separation and Distribution Agreement").

•	Tax Matters Agreement - The Parties entered into an agreement that governs their respective rights, responsibilities and obligations with respect to tax liabilities and benefits, tax attributes, the preparation and filing of tax returns, the control of audits and other tax proceedings and other matters regarding taxes.

•	Employee Matters Agreement - The Parties entered into an agreement that identifies employees and employee-related liabilities (and attributable assets) to be allocated (either retained, transferred and accepted, or assigned and assumed, as applicable) to the Parties as part of the Distributions and describes when and how the relevant transfers and assignments will occur.

•

Intellectual Property Cross-License Agreement - DuPont entered into an Intellectual Property Cross-License Agreement with Dow (the “DowDuPont-Dow IP Cross-License Agreement”). The DowDuPont-Dow IP Cross-License Agreement sets forth the terms and conditions under which the applicable Parties may use in their respective businesses, following each of the Distributions, certain know-how (including trade secrets), copyrights, software, and certain patents and standards, allocated to another Party pursuant to the Separation and Distribution Agreement.

In addition to the agreements above, DuPont has entered into certain various supply agreements with Dow. These agreements provide for different pricing than the historical intercompany and intracompany practices prior to the Distributions.

Effective June 1, 2019, in connection with the Corteva Distribution, DuPont and Corteva entered into the following agreements:

•

Intellectual Property Cross-License Agreement - DuPont and Corteva entered into an Intellectual Property Cross-License Agreement (the “DuPont-Corteva IP Cross-License Agreement”). The DuPont-Corteva IP Cross-License Agreement sets forth the terms and conditions under which the applicable parties may use in their respective businesses, following the Corteva Distribution, certain know-how (including trade secrets), copyrights, software, and certain patents and standards, allocated to another Party pursuant to the Separation and Distribution Agreement.

•

Letter Agreement - The Company entered into a letter agreement (the "Letter Agreement") with Corteva that sets forth certain additional terms and conditions related to the Corteva Distribution, including certain limitations on DuPont’s and Corteva's ability to transfer certain businesses and assets to third parties without assigning certain of such Party’s indemnification obligations under the Separation and Distribution Agreement to the other Party to the transferee of such businesses and assets or meeting certain other alternative conditions. The Letter Agreement further outlines the allocation between DuPont and Corteva of liabilities associated with certain legal and environmental matters, including liabilities associated with discontinued and/or divested operations and businesses of Historical EID. See Note 16 to the Consolidated Financial Statements for more information regarding the allocation.

•

Amended and Restated Tax Matters Agreement - The Parties entered into an amendment and restatement of the Tax Matters Agreement, between DuPont, Corteva and Dow, effective as of April 1, 2019 (as so amended and restated, the “Amended and Restated Tax Matters Agreement”). The Amended and Restated Tax Matters Agreement governs the Parties’ rights, responsibilities and obligations with respect to tax liabilities and benefits, tax attributes, the preparation and filing of tax returns, the control of audits and other tax proceedings and other matters regarding taxes. The Parties amended and restated the Tax Matters Agreement in connection with the Corteva Distribution in order to allocate between the DuPont and Corteva certain rights and obligations of the Company provided in the original form of the Tax Matters Agreement.

Other Divestitures

In the third quarter of 2019, the Company completed the sale and separation of its Sustainable Solutions business unit, a part of the Non-Core segment, to Gyrus Capital. The sale resulted in a pre-tax gain of $28 million ($22 million net of tax) which was recorded in "Sundry income (expense) - net" in the Company's Consolidated Statements of Operations.

In September 2019, DuPont announced an agreement to sell its compound semiconductor solutions business, a part of the Electronics & Imaging segment, to SK Siltron for approximately $450 million. The transaction is expected to close in the first quarter of 2020, pending satisfaction of customary closing conditions, including receipt of regulatory approval.

Acquisitions

During the fourth quarter of 2019, DuPont completed acquisitions of the following, all within the Safety & Construction segment:

•	inge GmbH, an ultrafiltration membrane business from BASF,

•	Memcor, the ultrafiltration and membrane bioreactor technologies division from Evoqua Water Technologies Corp.,

•	OxyMem Limited, a company that develops and produces Membrane Aerated Biofilm Reactor technology.

The aggregate purchase price of the above acquisitions was approximately $175 million and was primarily allocated to goodwill, other intangibles and property, plant and equipment.

Segment & Product Line Realignments

Effective June 1, 2019, DuPont changed its management and reporting structure resulting in the creation of a new Non-Core segment ("Second Quarter Segment Realignment").

These changes result in the following being realigned to Non-Core:

•	Photovoltaic and Advanced Materials business unit (including the HSC Group joint ventures: DC HSC Holdings LLC and Hemlock Semiconductor L.L.C) from the Electronics & Imaging segment;

•	Biomaterials and Clean Technologies business units from the Nutrition & Biosciences segment;

•	DuPont Teijin Films joint venture from the Transportation & Industrial (formerly Transportation & Advanced Polymers) segment; and

•	Sustainable Solutions business unit from the Safety & Construction segment.

In addition, the following changes occurred:

•	Consolidation of the Nutrition & Health business with the Industrial Biosciences business within the Nutrition & Biosciences reportable segment. Previously, Nutrition & Health and Industrial Biosciences were separate operating segments which did not meet the quantitative thresholds.

•	Pre-commercial activities related to the Biomaterials business unit was realigned from Corporate to Non-Core, with the remaining pre-commercial activities realigned to the Nutrition & Biosciences segment.

Effective October 1, 2019, Electronics & Imaging realigned its product lines as Image Solutions, Interconnect Solutions and Semiconductor Technologies.

Refer to Notes 5 and 24 to the Consolidated Financial Statements for additional information.

Nutrition & Biosciences and Non-Core Goodwill Impairments

During the second quarter of 2019, the Company was required to perform interim impairment tests of its goodwill due to the internal distribution of the specialty products legal entities from Historical EID to DowDuPont (the "Internal SP Distribution") and the Second Quarter Segment Realignment. As a result of the analyses performed, the Company recorded pre-tax, non-cash impairment charges during the year ended December 31, 2019, totaling $1,175 million, of which $933 million related to the Nutrition & Biosciences segment and $242 million related to the Non-Core segment. The charges were recognized in "Goodwill impairment charges" in the Consolidated Statements of Operations. Refer to Note 14 of the Consolidated Financial Statements.

Equity Method Investment Impairment

During the second quarter of 2019, in connection with the Internal SP Distribution and the impairment of the Industrial Biosciences reporting unit, the Company performed an impairment analysis on the reporting unit's equity method investments. As a result of the analysis performed, the Company recorded pre-tax, non-cash impairment charges of $63 million to write-down the value of an equity method investment. The charge was recognized in "Restructuring and asset related charges - net" in the Consolidated Statements of Operations. Refer to Note 6 of the Consolidated Financial Statements.

Reverse Stock Split

On May 23, 2019, stockholders of DowDuPont approved a 1-for-3 reverse stock split of DowDuPont shares of common stock with par value of $0.01 per share, which became effective immediately following the Corteva Distribution on June 1, 2019. All comparable periods presented have been retrospectively revised to reflect this change.

Share Buyback Program

On June 1, 2019, the Company's Board of Directors approved a new $2 billion share buyback program, which expires on June 1, 2021. At December 31, 2019, the Company had repurchased 10.8 million shares under the program at a total cost of $750 million.

Dividends

On February 14, 2019, the Company announced a pro rata dividend of $851 million, paid on March 15, 2019, to shareholders of record on February 28, 2019. On March 8, 2019, the Company announced a pro rata dividend of $325 million, paid on May 28, 2019, to shareholders of record on April 26, 2019. On June 27, 2019, the Company announced that its Board of Directors declared a third quarter dividend of $0.30 per share paid on September 13, 2019, to shareholders of record on July 31, 2019. On October 10, 2019, the Company announced that its Board of Directors declared a fourth quarter dividend of $0.30 per share paid on December 13, 2019, to shareholders of record on November 29, 2019. On February 12, 2020, the Board of Directors declared a first quarter dividend of $0.30 per share payable on March 16, 2020, to shareholders of record on February 28, 2020.

2019 Restructuring Program

During the second quarter of 2019 and in connection with the ongoing integration activities, DuPont approved restructuring actions to simplify and optimize certain organizational structures following the completion of the Distributions. For the year ended December 31, 2019, DuPont recorded pre-tax charges of $138 million, recognized in "Restructuring and asset related charges - net" in the Company's Consolidated Statements of Operations. At December 31, 2019, total liabilities related to the program were $86 million, which represents expected future cash payments related to this program for the payment of severance and related benefits and contract termination costs.

DowDuPont Cost Synergy Program

In September and November 2017, the Company approved post-merger restructuring actions under the DowDuPont Cost Synergy Program (the “Synergy Program”), adopted by the DowDuPont Board of Directors. The Synergy Program was designed to integrate and optimize the organization following the Merger and in preparation for the Distributions. The Company recorded pre-tax restructuring charges of $485 million inception-to-date, consisting of severance and related benefit costs of $215 million, asset related charges of $209 million and contract termination charges of $61 million. The Company does not expect to incur further significant charges related to the DowDuPont Cost Synergy program and at December 31, 2019 the program is considered substantially complete.

FMC Transactions

On March 31, 2017, the Company and FMC Corporation ("FMC") entered into a definitive agreement (the "FMC Transaction Agreement"). Under the FMC Transaction Agreement, and effective upon the closing of the transaction on November 1, 2017, FMC acquired the crop protection business and R&D assets that Historical EID was required to divest in order to obtain European Commission approval of the Merger Transaction, (the "Divested Ag Business") and Historical EID agreed to acquire certain assets relating to FMC’s Health and Nutrition segment, excluding its Omega-3 products (the "H&N Business") (collectively, the "FMC Transactions"). The FMC Transactions were completed on November 1, 2017. The sale of the Divested Ag Business meets the criteria for discontinued operations and as such, earnings are included within (loss) income from discontinued operations after income taxes for all periods presented. Refer to Notes 3 and 4 to the Consolidated Financial Statements for further information.

RESULTS OF OPERATIONS

Summary of Sales Results	For the Years Ended December 31,
In millions	2019			2018			2017
Net sales	$	21,512		$	22,594		$	11,672
Pro forma net sales							$	21,000

Sales Variances by Segment and Geographic Region - As Reported
	For the Year Ended December 31, 2019										For the Year Ended December 31, 2018
Percentage change from prior year	Local Price & Product Mix		Currency		Volume		Portfolio & Other		Total		Local Price & Product Mix		Currency		Volume		Portfolio & Other		Total
Electronics & Imaging	—	%	(1	)%	(1	)%	—	%	(2	)%	(1	)%	—	%	4	%	31	%	34	%
Nutrition & Biosciences	1		(2	)	—		(1	)	(2	)	2		(1	)	1		139		141
Transportation & Industrial	3		(2	)	(10	)	—		(9	)	6		(1	)	(2	)	117		120
Safety & Construction	3		(1	)	—		(4	)	(2	)	2		1		2		74		79
Non-Core	1		(2	)	(11	)	(3	)	(15	)	—		—		(4	)	116		112
Total	2	%	(2	)%	(4	)%	(1	)%	(5	)%	2	%	—	%	1	%	91	%	94	%
U.S. & Canada	2	%	—	%	(3	)%	—	%	(1	)%	2	%	—	%	1	%	91	%	94	%
EMEA 1	3		(5	)	(4	)	(4	)	(10	)	4		—		(3	)	109		110
Asia Pacific	1		(1	)	(4	)	—		(4	)	1		—		3		75		79
Latin America	3		(3	)	(3	)	(1	)	(4	)	2		(4	)	1		134		133
Total	2	%	(2	)%	(4	)%	(1	)%	(5	)%	2	%	—	%	1	%	91	%	94	%

1. Europe, Middle East and Africa.

2019 versus 2018

The Company reported net sales for the year ended December 31, 2019 of $21.5 billion, down 5 percent from $22.6 billion for the year ended December 31, 2018, due to a 4 percent decrease in volume, a 2 percent unfavorable currency impact and a 1 percent decline in portfolio actions slightly offset by a 2 percent increase in local price. Volume declined across all geographic regions and all segments with the exception of Nutrition & Biosciences and Safety & Construction which were both flat. The most notable volume decreases were in Non-Core (down 11 percent) and Transportation & Industrial (down 10 percent). Currency was down 2 percent compared with last year, driven primarily by EMEA currencies (down 5 percent). Local price was up 2 percent compared with last year. Local price increased in all geographic regions and in all segments except Electronics & Imaging (flat). Portfolio and other changes contributed 1 percent of the sales decrease which impacted Safety & Construction (down 4 percent; within EMEA), Non-Core (down 3 percent) and Nutrition & Biosciences (down 1 percent).

2018 versus 2017

Net sales for the year ended December 31, 2018 were $22.6 billion, up 94 percent from $11.7 billion for the year ended December 31, 2017, due to a 91 percent increase in portfolio actions, primarily reflecting the Merger, a 2 percent increase in local price and a 1 percent increase in volume. Volume increases in Electronics & Imaging (up 4 percent), Safety & Construction (up 2 percent) and Nutrition & Biosciences (up 1 percent) more than offset volume declines in Non-Core (down 4 percent) and Transportation & Industrial (down 2 percent). Local price was up 2 percent compared with the prior year. Local price increased in all geographic regions and in most segments except Electronics & Imaging (down 1 percent) and Non-core (flat). Currency was flat compared with the prior year.

Sales Variances by Segment and Geographic Region - Pro Forma
	For the Year Ended December 31, 2018 1
Percentage change from prior year	Local Price & Product Mix		Currency		Volume		Portfolio & Other		Total
Electronics & Imaging	(1	)	1		4		(3	)	1	%
Nutrition & Biosciences	1		—		3		11		15
Transportation & Industrial	6		1		2		—		9
Safety & Construction	2		1		3		—		6
Non-Core	1		—		(3	)	—		(2	)
Total	2	%	1	%	3	%	2	%	8	%
U.S. & Canada	1	%	—	%	2	%	3	%	6	%
EMEA 2	3		5		—		3		11
Asia Pacific	2		—		4		1		7
Latin America	3		(4	)	3		4		6
Total	2	%	1	%	3	%	2	%	8	%

1. As reported 2018 net sales compared with 2017 pro forma net sales.

2. Europe, Middle East and Africa.

2018 versus 2017 (Pro Forma)

Net sales for the year ended December 31, 2018 were $22.6 billion, up 8 percent from pro forma net sales of $21.0 billion for the year ended December 31, 2017, due to a 3 percent increase in volume, a 2 percent increase in portfolio actions, a 2 percent increase in local price, and a 1 percent favorable currency impact. Volume increased across most geographic regions, except EMEA (flat), and in most segments with the exception of Non-Core (down 3 percent). Volume increases were in Electronics & Imaging (up 4 percent), Nutrition & Biosciences (up 3 percent), Safety & Construction (up 3 percent) and Transportation & Industrial (up 2 percent). Portfolio and other changes increased 2 percent primarily due to a 11 percent increase in Nutrition and Biosciences related to the acquisition of FMC’s Health & Nutrition business. Local price was up 2 percent compared with the prior year. Local price increased in all geographic regions and in most segments except Electronics & Imaging (down 1 percent). Currency was up 1 percent compared with prior year, driven by EMEA currencies (up 5 percent) which was partially offset by Latin America currencies (down 4 percent).

Cost of Sales

Cost of sales was $14.1 billion for the year ended December 31, 2019, down from $15.3 billion for the year ended December 31, 2018. Cost of sales decreased for the year ended December 31, 2019 primarily due to lower sales volume, cost synergies, portfolio actions related to current year divestitures, currency impacts, and lower costs previously allocated to the materials science and agriculture businesses that did not meet the definition of expenses related to discontinued operations in accordance with ASC 205 and therefore remained as costs of continuing operations for periods prior to the Distributions.

Cost of sales as a percentage of net sales for the year ended December 31, 2019 was 65 percent compared with 68 percent for the year ended December 31, 2018.

For the year ended December 31, 2018, cost of sales was $15.3 billion, up from $9.6 billion for the year ended December 31, 2017. Cost of sales increased for the year ended December 31, 2018 primarily due to the Merger partially offset by cost synergies and currency impacts.

Cost of sales as a percentage of net sales for the year ended December 31, 2018 was 68 percent compared with 82 percent for the year ended December 31, 2017.

Cost of sales for the years ended December 31, 2018 and December 31, 2017 was negatively impacted by a $77 million and $1,355 million charge, respectively, related to amortization of the fair value step-up in Historical EID's inventories as a result of the Merger and the acquisition of FMC Corporation's Health and Nutrition business in November 2017.

Research and Development Expense ("R&D")

R&D expense was $955 million for the year ended December 31, 2019 and $1,070 million for the year ended December 31, 2018. The decrease for the year ended December 31, 2019 was primarily due to lower R&D costs previously allocated to the materials science and agriculture businesses that did not meet the definition of expenses related to discontinued operations in accordance with ASC 205 and therefore remained as costs of continuing operations for periods prior to the Distributions. R&D as a percentage of net sales was 4 percent and 5 percent for the years ended December 31, 2019 and 2018, respectively.

R&D expense was $1,070 million and $657 million for the years ended December 31, 2018 and 2017, respectively. The change was primarily due to the Merger. R&D as a percentage of net sales was 5 percent and 6 percent for the years ended December 31, 2018 and 2017, respectively.

Selling, General and Administrative Expenses ("SG&A")

For the year ended December 31, 2019, SG&A expenses totaled $2,663 million, down from $3,028 million in the year ended December 31, 2018. SG&A as a percentage of net sales was 12 percent and 13 percent for the years ended December 31, 2019 and 2018, respectively.

The decrease for the year ended December 31, 2019 as compared with the prior year was primarily due to lower SG&A costs previously allocated to the materials science and agriculture businesses that did not meet the definition of expenses related to discontinued operations in accordance with ASC 205 and therefore remained as costs of continuing operations for periods prior to the Distributions. In addition, SG&A decreased due to cost synergies.

SG&A expense was $3,028 million and $1,615 million for the years ended December 31, 2018 and 2017, respectively. The change was primarily due to the Merger. SG&A as a percentage of net sales was 13 percent and 14 percent for the years ended December 31, 2018 and 2017, respectively.

Amortization of Intangibles

Amortization of intangibles was $1,050 million for the year ended December 31, 2019, $1,044 million for the year ended December 31, 2018 and $505 million for the year ended December 31, 2017. Amortization in 2019 compared with 2018 was relatively flat. The increase in amortization in 2018 compared with 2017 was primarily due to the Merger. See Notes 3 and 14 to the Consolidated Financial Statements for additional information on intangible assets.

Restructuring and Asset Related Charges - Net

Restructuring and asset related charges - net were $314 million, $147 million, and $288 million for the years ended December 31, 2019, 2018 and 2017, respectively.

The activity for the year ended December 31, 2019 includes $138 million of charges related to the 2019 Restructuring Program, $113 million of charges related to the Synergy Program and a $63 million asset impairment charge related to an equity method investment. The charges for the year ended December 31, 2018 related to the Synergy Program. The charges for the year ended December 31, 2017 were comprised of $217 million related to the Synergy Program and $71 million related to other asset related impairments.

See Note 6 to the Consolidated Financial Statements for additional information.

Goodwill Impairment Charges

Goodwill impairments charges were $1,175 million during the year ended December 31, 2019. The goodwill impairment charges relate to the Nutrition & Biosciences and Non-Core segments. There were no goodwill related impairments in the years ended December 31, 2018 or 2017. See Note 14 to the Consolidated Financial Statements for additional information.

Integration and Separation Costs

Integration and separation costs, primarily reflecting costs related to the Merger, post-Merger integration, the Distributions, and beginning in the fourth quarter of 2019, the intended separation of the Nutrition & Biosciences business, were $1,342 million in 2019, $1,887 million in 2018 and $1,007 million in 2017.

Equity in Earnings of Nonconsolidated Affiliates

The Company's share of the earnings of nonconsolidated affiliates was $84 million, $447 million, and $367 million for the years ended December 31, 2019, 2018 and 2017, respectively. The decrease in 2019 was primarily due to lower equity earnings from the HSC Group which was mainly attributable to asset impairment charges partially offset by benefits associated with customer contract settlements. The increase in earnings of nonconsolidated affiliates for the year ended December 31, 2018 compared to the year ended December 31, 2017 is primarily due to the Merger. The year ended December 31, 2018 represents a full year of equity affiliate earnings for the Historical EID affiliates, compared to four months for the year ended December 31, 2017.

Sundry Income (Expense) - Net

Sundry income (expense) - net includes a variety of income and expense items such as foreign currency exchange gains or losses, interest income, dividends from investments, gains and losses on sales of investments and assets, non-operating pension and other post employment benefit plan credits or costs, and certain litigation matters. Sundry income (expense) - net for the year ended December 31, 2019 was $153 million compared with $92 million and $66 million in the years ended December 31, 2018 and 2017, respectively.

The year ended December 31, 2019 included a net gain on sale of assets and investments of $157 million, income related to non-operating pension and other post employment benefit plans of $74 million, and interest income of $55 million partially offset by foreign currency exchange losses of $110 million and miscellaneous expenses of $23 million which includes a $48 million charge reflecting a reduction in gross proceeds from lower withholding taxes related to a prior year legal settlement. The net gain on sale of assets includes income of $92 million related to a sale of assets within the Electronics & Imaging segment and as well as a gain of $28 million related to the sale of the Sustainable Solutions business unit within the Non-Core segment.

The year ended December 31, 2018 included income related to non-operating pension and other post employment benefit plans of $96 million, miscellaneous income of $83 million and interest income of $39 million, partially offset by foreign currency exchange losses of $93 million and loss on divestiture and change in joint venture ownership of $41 million. The foreign currency exchange losses included a $50 million foreign currency exchange loss related to adjustments to foreign currency exchange contracts as a result of U.S. tax reform. The loss on divestitures and change in joint venture ownership include a $14 million loss on the divestiture of the European XPS STYROFOAMTM business (related to Safety & Construction) and a $27 million negative impact for adjustments related to the Dow Silicones ownership restructure (related to Non-Core).

The year ended December 31, 2017 include a net gain on sale of assets and investments of $65 million and income related to non-operating pension and other post employment benefit plans of $35 million, partially offset by foreign currency exchange losses of $54 million.

See Notes 7 and 20 to the Consolidated Financial Statements for additional information.

Interest Expense

Interest expense was $668 million and $55 million for the years ended December 31, 2019 and 2018, respectively. There was no interest expense related to continuing operations for year ended December 31, 2017 and less than one quarter of interest expense for the year ended December 31, 2018 as the Company did not have outstanding borrowings until the 2018 Senior Notes issuance in the fourth quarter of 2018. Refer to Note 15 to the Consolidated Financial Statements for additional information.

Provision for Income Taxes on Continuing Operations

The Company's effective tax rate fluctuates based on, among other factors, where income is earned and the level of income relative to tax attributes. For the year ended December 31, 2019, the Company's effective tax rate was (29.5) percent on a pre-tax loss from continuing operations of $474 million. The negative tax rate for the year ended December 31, 2019, was principally the result of the non-tax-deductible goodwill impairment charges impacting the Nutrition & Biosciences and Non-Core segments. See Note 14 for more information regarding the goodwill impairment charges. The underlying factors affecting the Company’s overall tax rate are summarized in Note 8 to the Consolidated Financial Statements.

For the year ended December 31, 2018, the Company's effective tax rate was 32.6 percent on pre-tax income from continuing operations of $600 million. The effective tax was favorably impacted by the geographic mix of earnings but was more than offset by a $67 million charge associated with a valuation allowance recorded against the net deferred tax asset position of the Company’s legal entity in Brazil related to the separated agriculture business.

For the year ended December 31, 2017, the Company's effective tax rate was 115.3 percent on a pre-tax loss from continuing operations of $1,525 million. The tax rate for 2017 was primarily impacted by the impact of the enactment of the Tax Cuts and Jobs Act (“Act”). The Act resulted in a one-time transition tax and required the Company to remeasure its U.S. federal deferred tax assets and liabilities. See Note 8 to the Consolidated Financial Statements for more information regarding the impact of the Act on the Company.

Income from Discontinued Operations, Net of Tax

Income from discontinued operations, net of tax was $1,214 million, $3,595 million and $1,058 million for the years ended December 31, 2019, 2018 and 2017, respectively. The decrease in 2019 is attributable to the timing of the Distributions. The increase from 2017 to 2018 is attributable to the timing of the Merger.

Refer to Note 4 to the Consolidated Financial Statements for additional information.

Net Income Attributable to Noncontrolling Interests

Net income attributable to noncontrolling interests, including the portion attributable to discontinued operations, was $102 million, $155 million, and $132 million, for the years ended December 31, 2019, 2018, and 2017 respectively.

Net income attributable to noncontrolling interests of continuing operations was $30 million, $39 million, and $16 million, for the years ended December 31, 2019, 2018, and 2017 respectively.

SUPPLEMENTAL UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION

The following supplemental unaudited pro forma financial information (the “unaudited pro forma financial statements”) was derived from DuPont’s Consolidated Financial Statements, adjusted to give effect to certain events directly attributable to the Merger and the Distributions. In contemplation of the Distributions and to achieve the respective credit profiles of each of the current companies, in the fourth quarter of 2018, DowDuPont borrowed $12.7 billion under the 2018 Senior Notes and entered the Term Loan Facilities with an aggregate principal amount of $3.0 billion. Additionally, DuPont issued approximately $1.4 billion in commercial paper in May 2019 in anticipation of the Corteva Distribution (the “Funding CP Issuance” together with the 2018 Senior Notes and the Term Loan Facilities, the "Financings"). The unaudited pro forma financial statements below were prepared in accordance with Article 11 of Regulation S-X. The historical consolidated financial information has been adjusted to give effect to pro forma events that are (1) directly attributable to the Merger, the Distributions and the Financings (collectively the "Transactions"), (2) factually supportable and (3) with respect to the statements of operations, expected to have a continuing impact on the results. The unaudited pro forma statements of operations for the years ended December 31, 2019, 2018 and 2017 give effect to the pro forma events as if the Transactions had occurred on January 1, 2017.

Restructuring or integration activities or other costs following the Distributions that may be incurred to achieve cost or growth synergies of DuPont are not reflected. The unaudited pro forma statements of operations provides shareholders with summary financial information and historical data that is on a basis consistent with how DuPont reports current financial information.

The unaudited pro forma financial statements are presented for informational purposes only, and do not purport to represent what DuPont's results of operations or financial position would have been had the Transactions occurred on the dates indicated, nor do they purport to project the results of operations or financial position for any future period or as of any future date.

	Unaudited Pro Forma Combined Statement of Operations	2019									2018
	In millions, except per share amounts	DuPont 1			Pro Forma Adjustments**2			Pro Forma			DuPont 1			Pro Forma Adjustments**2			Pro Forma
	Net sales	$	21,512		$	—		$	21,512		$	22,594		$	—		$	22,594
	Cost of sales	14,056			22			14,078			15,302			74			15,376
	Research and development expenses	955			—			955			1,070			—			1,070
	Selling, general and administrative expenses	2,663			—			2,663			3,028			—			3,028
	Amortization of intangibles	1,050			—			1,050			1,044			—			1,044
	Restructuring and asset related charges - net	314			—			314			147			—			147
	Goodwill impairment charges	1,175			—			1,175			—			—			—
	Integration and separation costs	1,342			(173		)	1,169			1,887			(493		)	1,394
	Equity in earnings of nonconsolidated affiliates	84			—			84			447			—			447
	Sundry income (expense) - net	153			—			153			92			—			92
	Interest expense	668			29			697			55			629			684
	(Loss) Income from continuing operations before income taxes	(474		)	122			(352		)	600			(210		)	390
	Provision for income taxes on continuing operations	140			30			170			195			(42		)	153
	(Loss) Income from continuing operations, net of tax	(614		)	92			(522		)	405			(168		)	237
	Net income attributable to noncontrolling interests of continuing operations	30			—			30			39			—			39
	Net (loss) income from continuing operations attributable to DuPont	$	(644	)	$	92		$	(552	)	$	366		$	(168	)	$	198
	Per common share data:
	(Loss) Income per common share from continuing operations - basic	$	(0.86	)				$	(0.74	)	$	0.46					$	0.24
	(Loss) Income per common share from continuing operations - diluted	$	(0.86	)				$	(0.74	)	$	0.45					$	0.23
	Weighted-average common shares outstanding - basic	746.3						746.3			767.0						767.0
	Weighted-average common shares outstanding - diluted	746.3						746.3			771.8						771.8

1. See the Company's historical U.S. GAAP Consolidated Statements of Operations.

2.

Certain pro forma adjustments were made to illustrate the estimated effects of the Transactions, assuming that the Transactions had occurred on January 1, 2017. The adjustments include the impact to "Cost of sales" of different pricing than historical intercompany and intracompany practices related to various supply agreements entered into with the Dow Distribution, adjustments to "Integration and separation costs" to eliminate one time transaction costs directly attributable to the Distributions, and adjustments to "Interest expense" to reflect the impact of the Financings.

Unaudited Pro Forma Combined Statement of Operations	2017
DuPont 1			Historical EID as Adjusted (1/1/2017 - 8/31/2017) 2			Merger Pro Forma Adjustments 3			Pro Forma Adjustments 4			Pro Forma
In millions, except per share amounts
Net sales	$	11,672		$	9,334		$	(6	)	$	—		$	21,000
Cost of sales	9,558			6,263			138			59			16,018
Research and development expenses	657			424			9			—			1,090
Selling, general and administrative expenses	1,615			1,349			20			—			2,984
Amortization of intangibles	505			101			404			—			1,010
Restructuring and asset related charges - net	288			311			(9		)	—			590
Integration and separation costs	1,007			356			(148		)	(405		)	810
Equity in earnings of nonconsolidated affiliates	367			58			(15		)	—			410
Sundry income (expense) - net	66			(135		)	—			—			(69		)
Interest expense	—			—			—			684			684
Loss from continuing operations before income taxes	(1,525		)	453			(435		)	(338		)	(1,845		)
Benefit from income taxes on continuing operations	(1,758		)	(284		)	(133		)	(120		)	(2,295		)
Income from continuing operations, net of tax	233			737			(302		)	(218		)	450
Net income attributable to noncontrolling interests of continuing operations	16			15			—			—			31
Net income from continuing operations attributable to DuPont	$	217		$	722		$	(302	)	$	(218	)	$	419
Per common share data:
Income per common share from continuing operations - basic	$	0.39											$	0.52
Income per common share from continuing operations - diluted	$	0.38											$	0.52
Weighted-average common shares outstanding - basic 5	526.6												774.6
Weighted-average common shares outstanding - diluted 5	532.7												782.0

1. See the Company's historical U.S. GAAP Consolidated Statements of Operations.

2. Reflects Historical EID for the pre-merger period from January 1 through August 31, 2017 after giving effect to the distributions of Historical EID's material science and agriculture businesses.

3. Refer to the Summary of Pro Forma Adjustments table on the following page for additional details.

4. Certain pro forma adjustments were made to illustrate the estimated effects of the Transactions, assuming that the Transactions had occurred on January 1, 2017. The adjustments include the impact to "Cost of sales" of different pricing than historical intercompany and intracompany practices related to various supply agreements entered into with the Dow Distribution, adjustments to "Integration and separation costs" to eliminate one time transaction costs directly attributable to the Distributions, and adjustments to "Interest expense" to reflect the impact of the Financings.

5. As a result of the Merger, share amounts for the year ended December 31, 2017, reflect a weighted average effect of Historical Dow shares outstanding prior to August 31, 2017 and DowDuPont shares outstanding on and after August 31, 2017. As such, for purposes of calculating pro forma basic and diluted earnings per share, the impact of the shares issued to Historical EID stockholders as part of the Merger, have been included as if the Merger had been consummated on January 1, 2017.

Summary of Pro Forma Adjustments	2017
In millions (Unaudited)
Net sales
Intercompany transactions 1	$	(6	)
Cost of sales
Intercompany transactions 1	$	(6	)
Policy harmonization 2	(3		)
Depreciation expense 3	147
Total cost of sales	$	138
Research and development expenses:
Depreciation expense 3	$	9
Selling, general and administrative expenses
Depreciation expense 3	$	20
Amortization of intangibles
Amortization expense 4	$	404
Restructuring and asset related charges - net
Restructuring charge 5	$	(9	)
Integration and separation costs
Transaction costs 5	$	(148	)
Equity in earnings of nonconsolidated affiliates
Fair value of nonconsolidated affiliates 6	$	(15	)
Total pro forma adjustments to (loss) income from continuing operations before income taxes	$	(435	)
Provision for income taxes on continuing operations
Policy harmonization 2	$	1
Depreciation expense 3	(56		)
Amortization expense 4	(125		)
Restructuring charge 5	3
Transaction costs 5	49
Fair value of nonconsolidated affiliates 6	5
Total provision for income taxes on continuing operations7	$	(133	)
Total pro forma adjustments to (loss) income from continuing operations, net of tax	$	(302	)

1.	Transactions between Historical Dow and Historical EID have been eliminated as if they were consolidated affiliates for the period January 1 through August 31, 2017. Adjustments reflect the elimination of intercompany net sales and cost of sales.

2.	Represents a reduction to cost of sales for the period January 1 through August 31, 2017, due to conforming Historical EID’s accounting policy of deferring and amortizing expenses for planned major maintenance activities to Historical EID’s accounting policy of directly expensing the costs as incurred.

3.	Represents estimated additional depreciation expense in cost of sales, research and development expenses and selling, general and administrative expenses, resulting from the fair value adjustment to net property for the period January 1 through August 31, 2017 related to Historical EID.

4.	Represents estimated additional amortization expense resulting from the fair value adjustment to intangibles for the period January 1 through August 31, 2017 reflected in amortization of intangibles related to Historical EID.

5.	Represents the elimination of one-time Merger related transaction costs from integration and separation and restructuring and asset-related charges-net costs for the period January 1 through August 31, 2017.

6.	Represents a reduction to equity in earnings of nonconsolidated affiliates for the period January 1 through August 31, 2017 related to the amortization of the fair value adjustment to Historical EID’s investments in nonconsolidated affiliates.

7.	Represents the income tax effect of the Merger pro forma adjustments calculated using enacted statutory rates applicable in each period at the legal entity in which the pretax adjustments were made.

SEGMENT RESULTS

The Company's measure of profit/loss for segment reporting purposes is pro forma Operating EBITDA as this is the manner in which the Company's chief operating decision maker ("CODM") assessed performance and allocates resources. The Company defines pro forma Operating EBITDA as pro forma earnings (i.e. pro forma "Income (loss) from continuing operations before income taxes") before interest, depreciation, amortization, non-operating pension / other post employment benefits (“OPEB”) / charges, and foreign exchange gains/losses, excluding the impact of costs historically allocated to the materials science and agriculture businesses that did not meet the criteria to be recorded as discontinued operations and adjusted for significant items.

Pro forma adjustments were determined in accordance with Article 11 of Regulation S-X. Pro forma financial information is based on the Consolidated Financial Statements of DuPont, adjusted to give effect to the impact of certain items directly attributable to the Merger, the Distributions, and the Term Loan Facilities, the 2018 Senior Notes and the Funding CP Issuance (together, the "Financings"), including the use of proceeds from such Financings (collectively the "Transactions"). The historical consolidated financial information has been adjusted to give effect to pro forma events that are (1) directly attributable to the Transactions, (2) factually supportable and (3) with respect to the statements of operations, expected to have a continuing impact on the results. Events that are not expected to have a continuing impact on the combined results are excluded from the pro forma adjustments. Those pro forma adjustments include the impact of various supply agreements entered into in connection with the Dow Distribution ("supply agreements") and are adjustments to "Cost of sales." The impact of these supply agreements are reflected in pro forma Operating EBITDA for the periods noted above as they are included in the measure of profit/loss reviewed by the CODM in order to show meaningful comparability among periods while assessing performance and making resource allocation decisions. Refer to the Supplemental Unaudited Pro Forma Combined Financial Information section for further information.

ELECTRONICS & IMAGING

The Electronics & Imaging segment is a leading global supplier of differentiated materials and systems for a broad range of consumer electronics including mobile devices, television monitors, personal computers and electronics used in a variety of industries. The segment is a leading provider of materials and solutions for the fabrication of semiconductors and integrated circuits, and also provides innovative metallization processes for metal finishing, decorative, and industrial applications. Electronics & Imaging in the advanced printing and packaging graphics industry provides flexographic printing inks, photopolymer plates, and platemaking systems used in digital printing applications for textile, commercial and home-office use. In addition, the segment provides cutting-edge materials for the manufacturing of rigid and flexible displays for advanced-matrix organic light emitting diode ("AMOLED"), and other display applications.

Electronics & Imaging	For the Years Ended December 31,
In millions	2019			2018			2017 1
Net sales	$	3,554		$	3,635		$	3,592
Pro forma operating EBITDA	$	1,147		$	1,210		$	1,190
Equity earnings	$	24		$	23		$	20

1.	Amounts for the year ended December 31, 2017 are presented on a pro forma basis.

Electronics & Imaging	For the Years Ended December 31,
Percentage change from prior year	2019		2018 1
Change in Net Sales from Prior Period due to:
Local price & product mix	—	%	(1	)%
Currency	(1	)	1
Volume	(1	)	4
Portfolio & other	—		(3	)
Total	(2	)%	1	%

1.	Net sales for the year ended December 31, 2018 compared with pro forma net sales for the year ended December 31, 2017.

2019 Versus 2018

Electronics & Imaging net sales were $3,554 million for the year ended December 31, 2019, down from $3,635 million for the year ended December 31, 2018 due to a 1 percent volume decline and a 1 percent unfavorable currency impact, primarily in Asia Pacific and EMEA. Volume decreased overall as Semiconductor Technologies and Interconnect Solutions declines more than offset volume gains in Image Solutions. Within Semiconductor Technologies, weakened demand in the memory sector was partially offset by increased volumes related to semiconductor packaging materials. Demand for advanced materials for smartphones remained strong but overall volumes in Interconnect Solutions were down due to soft circuit board demand. Volume growth in Image Solutions reflects increased demand for organic light emitting diode ("OLED") materials partially offset by volume declines in flexographic printing.

Pro forma operating EBITDA was $1,147 million for the year ended December 31, 2019, down 5 percent compared with $1,210 million for the year ended December 31, 2018, as higher raw material costs, volume declines and an unfavorable currency impact more than offset cost synergies and income associated with an asset sale.

2018 Versus 2017

Electronics & Imaging net sales were $3,635 million for the year ended December 31, 2018, up from pro forma net sales of $3,592 million for the year ended December 31, 2017. Net sales increased due to a 4 percent volume increase and a 1 percent favorable currency impact, partially offset by a 3 percent portfolio decrease, primarily related to the prior year divestiture of the SKC Haas Display Films business, and a 1 percent decrease in local price. Volume growth in the segment was driven by gains in Semiconductor Technologies, Image Solutions and Interconnect Solutions, primarily in Asia Pacific.

Pro forma Operating EBITDA was $1,210 million for the year ended December 31, 2018, up 2 percent compared with $1,190 million for the year ended December 31, 2017 as cost synergies and volume growth more than offset higher raw material costs.

Electronics & Imaging Outlook for 2020

Electronics & Imaging's 2020 sales are expected to benefit from stronger volumes partially offset by lower pricing gains. In addition, cost savings partially offset by the absence of gains associated with an asset sale are expected to favorably impact the segment.

NUTRITION & BIOSCIENCES

The Nutrition & Biosciences segment is an innovation-driven and customer-focused segment that provides solutions for the global food and beverage, dietary supplements, home and personal care, energy, animal nutrition and pharma markets. The segment is one of the world's largest producers of specialty ingredients, developing and manufacturing solutions for the global food and beverage, dietary supplements, enzymes and pharmaceutical excipient markets. Additionally, the segment is an industry pioneer and innovator that works with customers to improve the performance, productivity and sustainability of their products and processes, through differentiated technology in ingredients applications, fermentation, biotechnology, chemistry and manufacturing process excellence.

Nutrition & Biosciences	For the Years Ended December 31,
In millions	2019			2018			2017 1
Net sales	$	6,076		$	6,216		$	5,389
Pro forma operating EBITDA	$	1,427		$	1,445		$	1,162
Equity earnings	$	(1	)	$	(1	)	$	(2	)

1.	Amounts for the year ended December 31, 2017 are presented on a pro forma basis.

Nutrition & Biosciences	For the Years Ended December 31,
Percentage change from prior year	2019		2018 1
Change in Net Sales from Prior Period due to:
Local price & product mix	1	%	1	%
Currency	(2	)	—
Volume	—		3
Portfolio & other	(1	)	11
Total	(2	)%	15	%

1.	Net sales for the year ended December 31, 2018 compared with pro forma net sales for the year ended December 31, 2017.

2019 Versus 2018

Nutrition & Biosciences net sales were $6,076 million for the year ended December 31, 2019, down from $6,216 million for the year ended December 31, 2018, due to a 2 percent unfavorable currency impact, primarily in EMEA and Latin America, and a 1 percent decrease from portfolio actions partially offset by a 1 percent increase in local price. Volume was flat year over year as volume gains in Food & Beverage, primarily in cellulosics from growing demand in the meat alternatives and high protein nutritional beverages, was offset by declines in Health & Biosciences due to continued market-driven softness in biorefineries and decreased volume related to home and personal care applications which were partially offset by strength in food enzymes.

Pro forma operating EBITDA was $1,427 million for the year ended December 31, 2019, down 1 percent compared with $1,445 million for the year ended December 31, 2018 as unfavorable impacts related to product mix and currency were partially offset by cost synergies, productivity actions and pricing gains.

2018 Versus 2017

Nutrition & Biosciences net sales were $6,216 million for the year ended December 31, 2018, up from pro forma net sales of $5,389 million for the year ended December 31, 2017. The increase was due to a 11 percent increase from portfolio actions due to the acquisition of FMC’s Health & Nutrition business, a 3 percent increase in volume and a 1 percent increase in local price. Volume growth in the segment was led by gains in probiotics, specialty proteins, systems and texturants and pharmaceutical excipients, driven by demand in Asia Pacific. Demand for bioactives in home and personal care applications and animal nutrition also contributed to volume growth. Pricing gains were led by microbial control and systems and texturants.

Pro forma Operating EBITDA was $1,445 million for the year ended December 31, 2018, up 24 percent compared with $1,162 million for the year ended December 31, 2017, driven by favorable portfolio actions, cost synergies and volume growth, partially offset by higher costs due to growth investments.

Nutrition & Biosciences Outlook for 2020

Nutrition & Biosciences’ 2020 sales are expected to benefit from stronger volumes partially offset by decreases in local price. In addition, the segment is expected to benefit from productivity and cost savings.

TRANSPORTATION & INDUSTRIAL

The Transportation & Industrial segment provides high-performance engineering resins, adhesives, silicones, lubricants and parts to engineers and designers in the transportation, electronics, healthcare, industrial and consumer end-markets to enable systems solutions for demanding applications and environments. The segment 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. In addition, the segment produces innovative engineering polymer solutions, high performance parts, specialty silicones and differentiated adhesive technologies to meet customer specifications in automotive, aerospace, electronics, industrial, healthcare and consumer markets. Transportation & Industrial is a global leader of advanced materials that provides technologies that differentiate customers’ products with improved performance characteristics enabling the transition to hybrid-electric-connected vehicles, high speed high frequency connectivity and smart healthcare.

Transportation & Industrial	For the Years Ended December 31,
In millions	2019			2018			2017 1
Net sales	$	4,950		$	5,422		$	4,958
Pro forma operating EBITDA	$	1,313		$	1,518		$	1,235
Equity earnings	$	4		$	1		$	5

1.	Amounts for the year ended December 31, 2017 are presented on a pro forma basis.

Transportation & Industrial	For the Years Ended December 31,
Percentage change from prior year	2019		2018 1
Change in Net Sales from Prior Period due to:
Local price & product mix	3	%	6	%
Currency	(2	)	1
Volume	(10	)	2
Portfolio & other	—		—
Total	(9	)%	9	%

1.	Net sales for the year ended December 31, 2018 compared with pro forma net sales for the year ended December 31, 2017.

2019 Versus 2018

Transportation & Industrial net sales were $4,950 million for the year ended December 31, 2019, down from $5,422 million for the year ended December 31, 2018. The change in net sales was due to a 10 percent decrease in volume and a 2 percent unfavorable currency impact, primarily in EMEA and Asia Pacific, which more than offset a 3 percent increase in local price. Volume declines were primarily due to destocking in the automotive channel and decreased demand in automotive and electronics markets in Asia Pacific and EMEA. Local price increased across all regions and primarily in Mobility Solutions.

Pro forma operating EBITDA was $1,313 million for the year ended December 31, 2019, down 14 percent compared with $1,518 million for the year ended December 31, 2018 as volume declines, higher raw material costs and an unfavorable currency impact were partially offset by pricing gains and cost synergies.

2018 Versus 2017

Transportation & Industrial net sales were $5,422 million for the year ended December 31, 2018, up from pro forma net sales of $4,958 million for the year ended December 31, 2017 due to a 6 percent increase in local price, 2 percent volume growth and a 1 percent benefit from currency, driven by EMEA. The increase in local price, primarily in Mobility Solutions, was driven by tight polymer supply and higher feedstock costs. Volume growth in the segment was primarily due to Healthcare & Specialty, led by growth in KALREZ® and VESPEL® high-performance parts in the electronics and aerospace markets, Industrial & Consumer, due to growth in DELRIN® and HYTREL® in the automotive market, and in Mobility Solutions due to growth in ZYTEL®. Broad based volume growth was led by U.S & Canada and Asia Pacific.

Pro forma Operating EBITDA was $1,518 million for the year ended December 31, 2018, up 23 percent compared with $1,235 million for the year ended December 31, 2017 due to price and volume gains, cost synergies and favorable currency impacts, partially offset by higher raw material costs.

Transportation & Industrial Outlook for 2020

Transportation & Industrial's 2020 sales are expected to decline as decreases in local price, primarily related to nylon, are anticipated to more than offset stronger volumes. The segment is expected to benefit from cost savings.

SAFETY & CONSTRUCTION

The Safety & Construction segment is a leading provider of engineered products and integrated systems for a number of industries including worker safety, water purification and separation, aerospace, energy, medical packaging and building materials. The segment satisfies the growing global needs of businesses, governments, and consumers for solutions that make life safer, healthier, and better. By uniting market-driven science with the strength of highly regarded brands, the segment strives to bring new products and solutions to solve customers' needs faster, better and more cost effectively.

Safety & Construction	For the Years Ended December 31,
In millions	2019			2018			2017 1
Net sales	$	5,201		$	5,294		$	5,003
Pro forma operating EBITDA	$	1,419		$	1,283		$	1,178
Equity earnings	$	27		$	24		$	18

1.	Amounts for the year ended December 31, 2017 are presented on a pro forma basis.

Safety & Construction	For the Years Ended December 31,
Percentage change from prior year	2019		2018 1
Change in Net Sales from Prior Period due to:
Local price & product mix	3	%	2	%
Currency	(1	)	1
Volume	—		3
Portfolio & other	(4	)	—
Total	(2	)%	6	%

1.	Net sales for the year ended December 31, 2018 compared with pro forma net sales for the year ended December 31, 2017.

2019 Versus 2018

Safety & Construction net sales were $5,201 million for the year ended December 31, 2019, down from $5,294 million for the year ended December 31, 2018 as portfolio declines of 4 percent and a 1 percent unfavorable impact from currency in all regions more than offset a 3 percent increase in local price. The portfolio impact reflects the prior year divestiture of the European XPS STYROFOAM™ business on December 1, 2018. Local price increased across all businesses and in all regions.

Volume was flat compared with the prior year as volume growth in Water Solutions was offset by declines in Safety Solutions and Shelter Solutions. Water Solutions volume gains were driven by strong demand for ion exchange and reverse osmosis membranes mainly in the industrial market. Safety Solutions volume declined as a result of supply constraints and planned maintenance downtime which more than offset TYVEK® volume gains from increased demand in the personal protection market. Volume declines in Shelter Solutions were primarily due to weakness in the construction market.

Pro forma operating EBITDA was $1,419 million for the year ended December 31, 2019, up 11 percent compared with $1,283 million for the year ended December 31, 2018 due to local price gains, cost synergies, productivity improvements and volume gains partially offset by an unfavorable impact from currency.

2018 Versus 2017

Safety & Construction net sales were $5,294 million for the year ended December 31, 2018, up from pro forma net sales of $5,003 million for the year ended December 31, 2017 due to 3 percent volume growth, a 2 percent increase in local price and a 1 percent benefit from currency.

Volume growth in the segment was driven by broad based demand in industrial applications, with strength across all lines of business, particularly in Safety Solutions, as well as gains in Shelter Solutions and Water Solutions. The increase in local price was due to price gains across most businesses.

Pro forma Operating EBITDA was $1,283 million for the year ended December 31, 2018, up 9 percent compared with $1,178 million for the year ended December 31, 2017, due to cost synergies, volume and price gains and a favorable impact of currency, partially offset by the absence of prior year one-time gains and higher raw material and freight costs.

Safety & Construction Outlook for 2020

Safety & Construction's 2020 sales are expected to benefit primarily from increased volumes and favorable impacts related to the acquisitions in Water Solutions. Cost savings and higher local price partially offset by manufacturing headwinds in the first quarter of 2020 are expected to benefit the segment.

NON-CORE

The Non-Core segment is a leading global supplier of key materials for the manufacturing of photovoltaic cells and panels, including innovative metallization pastes, backsheet materials and silicone encapsulants and adhesives. The segment also includes the Company's share of the results of the HSC Group, a U.S.-based group of companies that manufacture and sell polycrystalline silicon products for the photovoltaic and semiconductor industries. Additionally, the segment provides materials used in components and films for consumer electronics, automotive, and aerospace markets. The segment also provides sustainable materials and services for sulfuric acid production and regeneration technologies, alkylation technology for production of clean, high-octane gasoline, and a comprehensive suite of aftermarket service and solutions offerings, including safety consulting and services, to improve the safety, productivity, and sustainability of organizations across a range of industries. The Non-Core segment is also a leading producer of specialty biotechnology materials for carpet and apparel markets as well as polyester films for the healthcare, photovoltaics, electronics, packaging and labels, and electrical insulation industries.

Non-Core	For the Years Ended December 31,
In millions	2019			2018			2017 1
Net sales	$	1,731		$	2,027		$	2,058
Pro forma operating EBITDA	$	491		$	677		$	661
Equity earnings 2	$	258		$	400		$	369

1. Amounts for the year ended December 31, 2017 are presented on a pro forma basis.

2. Excludes a net charge primarily related to a joint venture in the Non-Core segment.

Non-Core	For the Years Ended December 31,
Percentage change from prior year	2019		2018 1
Change in Net Sales from Prior Period due to:
Local price & product mix	1	%	1	%
Currency	(2	)	—
Volume	(11	)	(3	)
Portfolio & other	(3	)	—
Total	(15	)%	(2	)%

1.	Net sales for the year ended December 31, 2018 compared with pro forma net sales for the year ended December 31, 2017.

2019 Versus 2018

Non-Core net sales were $1,731 million for the year ended December 31, 2019, down from $2,027 million for the year ended December 31, 2018 due to a 11 percent decrease in volume, a 3 percent portfolio decline and a 2 percent unfavorable impact from currency, primarily in Asia Pacific, which more than offset a 1 percent increase in local price. Portfolio declines were due to the sale of the Sustainable Solutions business in the third quarter of 2019. Volume declines in Photovoltaic & Advanced Materials were driven by weak demand for trichlorosilanes due to low polysilicon production and lower paste sales in electronic component end markets. Biomaterials volume declines were primarily a result of a slow-down in demand in the carpet and apparel markets.

Pro forma operating EBITDA was $491 million for the year ended December 31, 2019, down 27 percent compared with $677 million for the year ended December 31, 2018 as a result of volume declines, lower HSC Group equity earnings due to lower customer settlements, and unfavorable impacts from currency and portfolio actions, which were partially offset by cost synergies and a gain on the sale of the Sustainable Solutions business.

2018 Versus 2017

Non-Core net sales were $2,027 million for the year ended December 31, 2018, down from pro forma net sales of $2,058 million for the year ended December 31, 2017. Net sales declined due to a 3 percent decrease in volume partially offset by a 1 percent increase in local price. Volume declines were primarily due to a decline in Photovoltaic & Advanced Materials demand related to metallization pastes and TEDLAR® backsheet materials, which were partially offset by volume increases in Clean Tech as a result of higher catalyst, alkylation, brinks and acid equipment sales.

Pro forma Operating EBITDA was $677 million for the year ended December 31, 2018, up 2 percent compared with $661 million for the year ended December 31, 2017 as volume declines and higher raw material and production costs were partially offset by higher HSC Group equity earnings due to higher customer settlements.

Non-Core Outlook for 2020

Non-Core's 2020 sales are expected to be down due to an unfavorable impact from portfolio declines due to the sale of the Sustainable Solutions business in the third quarter of 2019 and anticipated declines in volume and local price. The segment is also expected to be unfavorably impacted by lower HSC Group equity earnings due to lower customer settlements and the absence of a gain from the sale of the Sustainable Solutions business, partially offset by cost savings.

Liquidity & Capital Resources

The Company continually reviews its sources of liquidity and debt portfolio and occasionally may make adjustments to one or both to ensure adequate liquidity. The Company’s primary source of incremental liquidity is cash flows from operating activities. Management expects the generation of cash from operations and the ability to access the debt capital markets and other sources of liquidity will continue to provide sufficient liquidity and financial flexibility to meet the Company’s and its subsidiaries obligations as they come due.

In millions	December 31, 2019			December 31, 2018
Cash, cash equivalents and marketable securities	$	1,540		$	8,577
Total debt	$	17,447		$	12,639

In November 2018, DuPont consummated the offering of the senior unsecured notes (the "2018 Senior Notes") in an aggregate principal amount of $12.7 billion. The offering consisted of $0.5 billion in floating rate notes due November 2020, $0.3 billion in floating rate notes due November 2023, and six tranches of fixed-rate notes: $1.5 billion due November 2020, $2.5 billion due November 2023, $1.85 billion due November 2025, $2.25 billion due November 2028, $1.65 billion due November 2038 and $2.15 billion due November 2048. The net proceeds of the offering after the underwriting discount was $12.6 billion. See Note 15 to the Consolidated Financial Statements for additional information on the interest related to the 2018 Senior Notes.

Pending receipt of the proceeds from the Special Cash Payment, the Company expects to refinance the November 2020 maturities for the interim period.

Term Loan and Revolving Credit Facilities

In November 2018, the Company entered into a term loan agreement that establishes two term loan facilities in the aggregate principal amount of $3 billion, (the “Term Loan Facilities”) as well as a five-year $3 billion revolving credit facility (the “Five-Year Revolving Credit Facility”). Effective May 2, 2019, the Company fully drew the two Term Loan Facilities in the aggregate principal amount of $3.0 billion and the Five-Year Revolving Credit Facility became effective and available. In June 2019, the Company entered into a 364-day $750 million revolving credit facility (the “364-Day Revolving Credit Facility”). The Five-Year Revolving Credit Facility is generally expected to remain undrawn, and serve as a backstop to the Company’s commercial paper and letter of credit issuance. The 364-Day Revolving Credit Facility may be drawn against for general corporate purposes, including but not limited to net working capital, costs and expenses. The Company intends to renew the 364-Day Revolving Credit Facility on or prior to expiration.

Commercial Paper

In April 2019, DuPont authorized a $3 billion commercial paper program (the “DuPont Commercial Paper Program”). As of December 31, 2019, the Company issued $1.8 billion of commercial paper. The Company’s issuance under the Commercial Paper Program included the issuance of $1.4 billion (the “Funding CP Issuance”) in May 2019 in anticipation of the Corteva Distribution, as well as borrowings for general corporate purposes.

The net proceeds from the 2018 Senior Notes, Term Loan Facilities, and commercial paper together with cash from operations were used to fund cash contributions to Dow and Corteva, and DowDuPont’s November 2018 $3.0 billion share repurchase program, which was completed in the first quarter of 2019. The remaining proceeds were used to reduce outstanding liabilities of Historical EID that would otherwise be attributed to Corteva; and further pay any related premiums, fees and expenses.

Nutrition & Biosciences Financing

In connection with the Proposed N&B Transaction, N&B Inc. entered into a Bridge Commitment Letter in an aggregate principal amount of $7.5 billion, (the “Bridge Loans”) to secure committed financing for the Special Cash Payment and related financing fees and expenses. The aggregate commitment under the Bridge Letter is reduced by, among other things, (1) the amount of net cash proceeds received by N&B Inc. from any issuance of senior unsecured notes pursuant to a Rule 144A offering or other private placement, (the "N&B Notes Offering") and (2) certain qualifying term loan commitments under senior unsecured term loan facilities.

In January 2020, N&B Inc. entered into a senior unsecured term loan agreement in the amount of $1.25 billion split evenly between three- and five-year facilities. As a result of entry into the term loan agreement, the commitments under the Bridge Commitment Letter were reduced to $6.25 billion. The remaining $6.25 billion is expected to be funded through the N&B Notes Offering and/or the Bridge Loans. The proceeds from drawdowns on the term loan facilities and the N&B Notes Offering, if any, and/or the Bridge Loans would be used to make the Special Cash Payment and to pay the related financing fees and expenses. The commitments under the Bridge Commitment Letter and the availability of funding under the term loan agreement are subject to customary closing conditions including among others, the satisfaction of substantially all the conditions to the consummation of the proposed transaction with IFF.

Borrowing under the term loan agreement and, if any, under the Bridge Loans would occur immediately prior to the closing of the Proposed N&B Transaction. Any issuance of the N&B Note Offering for some or all the remaining $6.25 billion would likely occur in advance of the closing.

Pursuant to the Merger Agreement, the fees and expenses associated with the financing, including fees associated with any prepayment will be borne A) entirely by N&B Inc. if the transaction closes; and (B) equally by DuPont and IFF if the Merger Agreement terminates. However, if the Merger Agreement is terminated by IFF, in accordance with its terms, for breach by DuPont, such fees and expenses will be borne entirely by DuPont; and if terminated by DuPont in accordance with its terms for breach by IFF, such fees and expenses will be borne entirely by IFF.

Credit Ratings

The Company's credit ratings impact its access to the debt capital markets and cost of capital. The Company remains committed to maintaining a strong financial position with a balanced financial policy focused on maintaining a strong investment-grade rating and driving shareholder value and remuneration. At January 31, 2020, DuPont's credit ratings were as follows:

Credit Ratings	Long-Term Rating	Short-Term Rating	Outlook
Standard & Poor’s	A-	A-2	Negative Watch
Moody’s Investors Service	Baa1	P-2	Stable
Fitch Ratings	BBB+	F-2	Stable

The Company's indenture covenants include customary limitations on liens, sale and leaseback transactions, and mergers and consolidations, subject to certain limitations. The 2018 Senior Notes also contain customary default provisions. The Term Loan Facilities, the Five-Year Revolving Credit Facility and the 364-Day Revolving Credit Facility contain a financial covenant, typical for companies with similar credit ratings, requiring that the ratio of Total Indebtedness to Total Capitalization for the Company and its consolidated subsidiaries not exceed 0.60. At December 31, 2019, the Company was in compliance with this financial covenant.

The Company's cash, cash equivalents and marketable securities at December 31, 2019 and December 31, 2018 were $1.5 billion and $8.6 billion, respectively, of which $1.4 billion at December 31, 2019 and $2.1 billion at December 31, 2018 were held by subsidiaries in foreign countries, including United States territories. The decrease in cash and cash equivalents held by subsidiaries in foreign countries is due to repatriation activities. For each of its foreign subsidiaries, the Company makes an assertion regarding the amount of earnings intended for permanent reinvestment, with the balance available to be repatriated to the United States.

Summary of Cash Flows

The Company’s cash flows from operating, investing and financing activities, as reflected in the Consolidated Statements of Cash Flows, are summarized in the following table. The cash flows related to Dow and Corteva have not been segregated and are included in the Consolidated Statements of Cash Flows for all periods presented, as applicable.

Cash Flow Summary	2019			2018			2017
In millions
Cash provided by (used for):
Operating activities	$	1,409		$	4,731		$	(765	)
Investing activities	$	(2,313	)	$	(2,462	)	$	14,325
Financing activities	$	(11,550	)	$	(1,918	)	$	(6,554	)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	$	9		$	(344	)	$	297
Cash, cash equivalents and restricted cash in discontinued operations	$	—		$	5,431		$	9,574

Cash Flows from Operating Activities

Cash provided by operating activities was $1,409 million and $4,731 million for the years ended December 31, 2019 and 2018, respectively. Cash provided by operating activities decreased in 2019 compared with 2018, primarily due to the impact of the Dow and Corteva Distributions to period earnings, partially offset by a decrease in the use of cash for net working capital versus the prior period. Cash used for operating activities for the year ended December 31, 2017 was $765 million. Cash provided by operating activities increased in 2018 compared to 2017, primarily driven by a decrease in cash used for working capital requirements and higher cash earnings, which were partially offset by increased pension contributions, higher integration and separation costs, and the absence of certain cash receipts in 2017.

Net Working Capital 1	December 31, 2019			December 31, 2018
In millions (except ratio)
Current assets	$	9,999		$	16,380
Current liabilities	8,346			3,878
Net working capital	$	1,653		$	12,502
Current ratio	1.20:1			4.22:1

1. Net working capital has been restated to exclude the assets and liabilities related to the Distributions which are presented as assets and liabilities of discontinued operations, respectively, in the Consolidated Balance Sheets for all periods presented.

Cash Flows from Investing Activities

Cash used for investing activities in 2019 was $2,313 million compared to cash used for investing of $2,462 million in 2018. The decrease in cash used was primarily attributable to lower capital expenditures, partially offset by a decrease in proceeds from sales and maturities of investments, net of purchases of investments, as well as a decline in proceeds from interests in trade accounts receivable conduits. Cash used for investing activities in 2018 was primarily for capital expenditures and purchases of investments, which were partially offset by proceeds from sales and maturities of investments and proceeds from interests in trade accounts receivable conduits. Cash provided by investing activities in 2017 was $14,325 million primarily from proceeds from interests in trade accounts receivable conduits, cash acquired in the Merger, proceeds from sales and maturities of investments and divestitures related primarily to businesses within Corteva and Dow. These items were partially offset by capital expenditures, purchases of investments and loans to nonconsolidated affiliates.

Cash Flows from Financing Activities

Cash used for financing activities in 2019 was $11,550 million compared with $1,918 million in 2018. The primary driver of the increased use of cash is the cash held by Dow and Corteva at the respective Distributions, reflecting cash on the balance sheet of each at the time of their respective spinoff; as well as payments of long-term debt of Historical Dow and Historical EID prior to the Distributions. These uses were partly offset by issuance of long-term debt in the form of the Term Loan Facilities draw in May 2019. Cash used for financing activities in 2018 included payments of notes payable and long-term debt, repurchases of DowDuPont common stock and dividends paid to stockholders. These items were largely offset by proceeds from the issuance of long-term debt. Cash used for financing activities was $6,554 million in 2017 and included dividends paid to stockholders, repurchases of DowDuPont common stock and payments of notes payable and long-term debt.

Dividends

The following table provides dividends paid to common shareholders for the years ended December 31, 2019, 2018, and 2017:

Dividends Paid	December 31, 2019			December 31, 2018			December 31, 2017
In millions
Dividends paid, per common share 1	$	2.16		$	4.56		$	6.66
Dividends paid to common stockholders 2	$	1,611		$	3,491		$	3,394

1. The 2017 dividend is comprised of $0.38 per share of DowDuPont dividends declared and paid in the fourth quarter of 2017 and the remaining amount relates to payments of Historical Dow dividends declared prior to the Merger.

2. The 2017 dividend consists of $885 million paid to DowDuPont common stockholders for dividends declared after the Merger, as well as $2,179 million paid to Historical Dow common stockholders for dividends declared prior to the Merger, and $330 million paid to Historical EID common stockholders after the Merger for dividends declared prior to the Merger.

On February 12, 2020, the DuPont Board of Directors declared a first quarter dividend of $0.30 per share payable on March 16, 2020, to shareholders of record on February 28, 2020.

Share Buyback Programs

On June 1, 2019, the Company's Board of Directors authorized a new $2 billion share buyback program, which expires on June 1, 2021. At December 31, 2019, the Company had repurchased 10.8 million shares under this program at a total cost of $750 million.

See Part II, Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities and Note 18 to the Consolidated Financial Statements, for additional information.

Pension and Other Post Employment Plans

Historical Dow and Historical EID did not merge their pension plans and other post employment benefit plans as a result of the Merger. Historical Dow and Historical EID had defined benefit pension plans in the United States and a number of other countries. Subsequent to the Distributions, the Company retained defined benefit pension plans in a number of other countries but does not have any qualified defined benefit pension plan in the United States.

The Company's funding policy is to contribute to defined benefit pension plans based on pension funding laws and local country requirements. Contributions exceeding funding requirements may be made at the Company's discretion. The Company expects to contribute approximately $85 million to its pension plans in 2020. The amount and timing of the Company’s actual future contributions will depend on applicable funding requirements, discount rates, investment performance, plan design, and various other factors, separations and distributions. See Note 20 to the Consolidated Financial Statements for additional information concerning the Company’s pension plans.

Historical Dow's funding policy was to contribute to plans when pension laws and/or economics either require or encourage funding. Prior to the Dow Distribution, Historical Dow made discretionary contributions exceeding funding requirements. In 2018 and 2017, Historical Dow contributed $1,656 million and $1,676 million to its pension plans, respectively, including contributions to fund benefit payments for its non-qualified pension plans. In the third quarter of 2018, Historical Dow made $1,100 million discretionary contributions to their principal U.S. pension plans, which are included in the 2018 contribution amounts above. The discretionary contributions were based on Historical Dow's funding policies, which permit discretionary contributions to defined benefit pension plans when economics encourage funding, and reflected considerations relating to tax deductibility and capital structure. During the three months of 2019, Historical Dow made contributions of $103 million to Historical Dow plans that were separated with Dow after the Distributions.

Historical EID's funding policy was to contribute to defined benefit pension plans based on pension funding laws and local country requirements. Prior to the Corteva Distribution, Historical EID made discretionary contributions exceeding funding requirements. Historical EID contributed $1,308 million, including discretionary contributions of $1,100 million to its principal U.S. pension plans, in 2018 and $68 million post-Merger in 2017 to its pension plans. These contributions included contributions to fund benefit payments for non-qualified pension plans. The discretionary contributions were based on Historical EID's funding policies, which permit discretionary contributions to defined benefit pension plans when economics encourage funding, and reflected considerations relating to tax deductibility and capital structure. During the five months of 2019, Historical EID made $36 million contributions to plans that were separated from the Company in conjunction with the Corteva Distribution.

Restructuring

In June 2019, DuPont approved restructuring actions to simplify and optimize certain organizational structures following the completion of the Distributions (the "2019 Restructuring Program"). As a result of these actions, the Company has recorded pre-tax restructuring charges of $138 million inception-to-date, consisting of severance and related benefit costs of $104 million, and asset related charges of $34 million. The Company expects actions related to this program to be substantially complete by the second half of 2020. Future cash payments related to the 2019 Restructuring Program are anticipated to $86 million and relate to the payment of severance and related benefits.

In September and November 2017, the Company approved post-merger restructuring actions under the DowDuPont Cost Synergy Program, adopted by the DowDuPont Board of Directors. The Synergy Program was designed to integrate and optimize the organization following the Merger and in preparation for the Distributions whereby the Company has recorded pre-tax restructuring charges attributable to the continuing operations of DuPont of $485 million inception-to-date, consisting of severance and related benefit costs of $215 million, asset related charges of $209 million and contract termination charges of $61 million. The activities related to the Synergy Program are expected to result in additional cash expenditures of $76 million and relate primarily to the payment of severance and related benefit costs. Actions associated with the Synergy Program, including employee separations, are considered substantially complete (see Note 6 to the Consolidated Financial Statements).

Off-balance Sheet Arrangements

Guarantees arise in the ordinary course of business from relationships with customers and nonconsolidated affiliates when the Company undertakes an obligation to guarantee the performance of others if specific triggering events occur. At December 31, 2019 and December 31, 2018, the Company had directly guaranteed $187 million and $199 million, respectively, of such obligations. Additional information related to the guarantees of the Subsidiaries can be found in the “Guarantees” section of Note 16 to the Consolidated Financial Statements.

OUTLOOK

The Company anticipates a macro environment similar to 2019 with modest demand improvement in select areas, most notably for next generation smart phones, probiotics, and in semiconductor markets, to be offset by challenging nylon market dynamics and continued weakness in automotive markets. In addition, the Company expects productivity improvements and cost actions to be more than offset by increased amortization of intangible assets and integration and separation costs related to the intended separation of the N&B Business. The Company continues to closely monitor macroeconomic and geopolitical developments.

Recent Accounting Pronouncements

See Note 2 to the Consolidated Financial Statements for a description of recent accounting pronouncements.

Critical Accounting Estimates

The Company's significant accounting policies are more fully described in Note 1 to the Consolidated Financial Statements. Management believes that the application of these policies on a consistent basis enables the Company to provide the users of the financial statements with useful and reliable information about the Company's operating results and financial condition.

The preparation of the Consolidated Financial Statements in conformity with generally accepted accounting principles ("GAAP") in the United States of America requires management to make estimates and assumptions that affect the reported amounts, including, but not limited to, receivable and inventory valuations, impairment of tangible and intangible assets, long-term employee benefit obligations, income taxes, restructuring liabilities, environmental matters and litigation. Management's estimates are based on historical experience, facts and circumstances available at the time and various other assumptions that are believed to be reasonable. The Company reviews these matters and reflects changes in estimates as appropriate. Management believes that the following represent some of the more critical judgment areas in the application of the Company's accounting policies which could have a material effect on the Company's financial position, liquidity or results of operations.

Pension Plans

Accounting for employee benefit plans involves numerous assumptions and estimates. Discount rate and expected return on plan assets are two critical assumptions in measuring the cost and benefit obligation of the Company's pension plans. Management reviews these two key assumptions when plans are re-measured. These and other assumptions are updated periodically to reflect the actual experience and expectations on a plan specific basis as appropriate. As permitted by GAAP, actual results that differ from the assumptions are accumulated on a plan by plan basis and to the extent that such differences exceed 10 percent of the greater of the plan's benefit obligation or the applicable plan assets, the excess is amortized over the average remaining service period of active employees or the average remaining life expectancy of the inactive participants if all or almost all of a plan’s participants are inactive.

For the majority of the benefit plans, the Company utilizes the Aon AA corporate bond yield curves to determine the discount rate, applicable to each country, at the measurement date.

The Company establishes strategic asset allocation percentage targets and appropriate benchmarks for significant asset classes in accordance with the laws and practices of those countries. Where appropriate, asset-liability studies are also taken into consideration. For plans, the long-term expected return on plan assets pension expense is determined using the fair value of assets.

The following table highlights the potential impact on the Company's pre-tax earnings due to changes in certain key assumptions with respect to the Company's pension plans based on assets and liabilities at December 31, 2019:

Pre-tax Earnings Benefit (Charge) (Dollars in millions)	1/4 Percentage Point Increase			1/4 Percentage Point Decrease
Discount rate	$	1		$	1
Expected rate of return on plan assets	9			(9		)

Additional information with respect to pension plans, liabilities and assumptions is discussed under "Long-term Employee Benefits" beginning on page 59 and in Note 20 to the Consolidated Financial Statements.

Legal Contingencies

The Company's results of operations could be affected by significant litigation adverse to the Company, including product liability claims, patent infringement and antitrust claims, and claims for third party property damage or personal injury stemming from alleged environmental torts. The Company records accruals for legal matters when the information available indicates that it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Management makes adjustments to these accruals to reflect the impact and status of negotiations, settlements, rulings, advice of counsel and other information and events that may pertain to a particular matter. Predicting the outcome of claims and lawsuits and estimating related costs and exposure involves substantial uncertainties that could cause actual costs to vary materially from estimates. In making determinations of likely outcomes of litigation matters, management considers many factors. These factors include, but are not limited to, the nature of specific claims including unasserted claims, the Company's experience with similar types of claims, the jurisdiction in which the matter is filed, input from outside legal counsel, the likelihood of resolving the matter through alternative dispute resolution mechanisms, and the matter's current status. Considerable judgment is required in determining whether to establish a litigation accrual when an adverse judgment is rendered against the Company in a court proceeding. In such situations, the Company will not recognize a loss if, based upon a thorough review of all relevant facts and information, management believes that it is probable that the pending judgment will be successfully overturned on appeal. A detailed discussion of significant litigation matters is contained in Note 16 to the Consolidated Financial Statements.

Income Taxes

The breadth of the Company's operations and the global complexity of tax regulations require assessments of uncertainties and judgments in estimating taxes the Company will ultimately pay. The final taxes paid are dependent upon many factors, including negotiations with taxing authorities in various jurisdictions, outcomes of tax litigation and resolution of disputes arising from federal, state and international tax audits in the normal course of business. The resolution of these uncertainties may result in adjustments to the Company's tax assets and tax liabilities. 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.

Deferred income 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. Significant judgment is required in evaluating the need for and magnitude of appropriate valuation allowances against deferred tax assets. The realization of these assets is dependent on generating future taxable income, as well as successful implementation of various tax planning strategies. For example, changes in facts and circumstances that alter the probability that the Company will realize deferred tax assets could result in recording a valuation allowance, thereby reducing the deferred tax asset and generating a deferred tax expense in the relevant period. In some situations, these changes could be material.

At December 31, 2019, the Company had a net deferred tax liability balance of $3.3 billion, net of a valuation allowance of $0.6 billion. Realization of deferred tax assets is expected to occur over an extended period of time. As a result, changes in tax laws, assumptions with respect to future taxable income, and tax planning strategies could result in adjustments to deferred tax assets. See Note 8 to the Consolidated Financial Statements for additional details related to the deferred tax liability balance.

Goodwill

The assets and liabilities of acquired businesses are measured at their estimated fair values at the dates of acquisition. The excess of the purchase price over the estimated fair value of the net assets acquired, including identified intangibles, is recorded as goodwill. The determination and allocation of fair value to the assets acquired and liabilities assumed is based on various assumptions and valuation methodologies requiring considerable management judgment, including estimates based on historical information, current market data and future expectations. The principal assumptions utilized in the Company's valuation

methodologies include the projected revenue, earnings before interest, depreciation and amortization (EBITDA) margins, the weighted average costs of capital, the terminal growth rates, and other market data. Although the estimates are deemed reasonable by management based on information available at the dates of acquisition, those estimates are inherently uncertain.

Assessment of the potential impairment of goodwill, other intangible assets, property, plant and equipment, investments in nonconsolidated affiliates, and other assets is an integral part of the Company's normal ongoing review of operations. Testing for potential impairment of these assets is significantly dependent on numerous assumptions and reflects management's best estimates at a particular point in time. The dynamic economic environments in which the Company's diversified product lines operate, and key economic and product line assumptions with respect to projected selling prices, market growth and inflation rates, can significantly affect the outcome of impairment tests. Estimates based on these assumptions may differ significantly from actual results. Changes in factors and assumptions used in assessing potential impairments can have a significant impact on the existence and magnitude of impairments, as well as the time in which such impairments are recognized. In addition, the Company continually reviews its diverse portfolio of assets to ensure they are achieving their greatest potential and are aligned with the Company's growth strategy. Strategic decisions involving a particular group of assets may trigger an assessment of the recoverability of the related assets. Such an assessment could result in impairment losses.

The Company performs goodwill impairment testing at the reporting unit level which is defined as the operating segment or one level below the operating segment. One level below the operating segment, or component, is a business in which discrete financial information is available and regularly reviewed by segment management. The Company aggregates certain components into reporting units based on economic similarities. Subsequent to the Distributions and as part of the Second Quarter Segment Realignment, the Company assessed and redefined certain reporting units effective June 1, 2019. The Company tests goodwill for impairment annually (during the fourth quarter), or more frequently when events or circumstances indicate it is more likely than not that the fair value of the reporting unit has declined below its carrying value. As of the date of the annual impairment test, the Company identified nine reporting units, of which seven have goodwill assigned.

For purposes of goodwill impairment testing, the Company has the option to first perform qualitative testing to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. Qualitative factors assessed at the Company level include, but are not limited to, GDP growth rates, long-term commodity prices, equity and credit market activity, discount rates, foreign exchange rates, and overall financial performance. Qualitative factors assessed at the reporting unit level include, but are not limited to, changes in industry and market structure, competitive environments, planned capacity and new product launches, cost factors such as raw material prices, and financial performance of the reporting unit. If the Company chooses not to complete a qualitative assessment for a given reporting unit or if the initial assessment indicates that it is more likely than not that the carrying value of a reporting unit exceeds its estimated fair value, additional quantitative testing is required.

If additional quantitative testing is performed, the reporting unit’s fair value is compared with its carrying amount, and an impairment charge, if any, is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value. The Company determined fair values for each of the reporting units using a combination of the income approach and market approach.

Under the income approach, fair value is determined based on the present value of estimated future cash flows, discounted at an appropriate risk-adjusted rate. The Company uses its internal forecasts to estimate future cash flows and includes an estimate of long-term future growth rates based on its most recent views of the long-term outlook for each reporting unit. The discounted cash flow valuations are completed using the following key assumptions: projected revenue growth rates; discount rates; tax rates; and terminal values. These key assumptions are determined through evaluation of the Company as a whole and underlying business fundamentals and industry risk. Actual results may differ from those assumed in the Company’s forecasts. The Company derives its discount rates using a capital asset pricing model and analyzing published rates for industries relevant to its reporting units to estimate the cost of equity financing. The Company uses discount rates that are commensurate with the risks and uncertainty inherent in the respective reporting units and in its internally developed forecasts. Discount rates used in the Company’s reporting unit valuations ranged from 7.25% to 9.75%.

Under the market approach, the Company used the Guideline Public Company Method ("GPCM"). The selected peer sets were based on close competitors and reviews of analysts' reports, public filings, and industry research related to firms operating in the respective reporting units industries. In selecting the EBIT/EBITDA multiples and determining the fair value, the Company considered the size, growth, and profitability of each reporting unit versus the relevant guideline public companies.

Estimating the fair value of reporting units requires the use of estimates and significant judgments that are based on a number of factors including actual operating results. It is reasonably possible that the judgments and estimates described above could change in future periods.

2019 Interim Goodwill Impairment Testing

During the second quarter of 2019, the Internal SP Distribution and the Second Quarter Segment Realignment served as triggering events requiring the Company to perform impairment analyses related to goodwill. This analysis resulted in an aggregate pre-tax, non-cash impairment charge of $1,175 million impacting the Nutrition & Biosciences and Non-Core segments.

The Company performed an interim impairment analysis for all reporting units using a discounted cash flow model (a form of the income approach), utilizing Level 3 unobservable inputs. The Company’s significant estimates in this analysis include, but are not limited to, future cash flow projections, the weighted average cost of capital, the terminal growth rate, and the tax rate. The Company believes the assumptions and estimates utilized are both reasonable and appropriate. The key assumption driving the change in fair value was the lower financial projections resulting from developing market conditions, events and circumstances that evolved throughout 2019. Future cash flow estimates are, by their nature, subjective and actual results may differ materially from the Company’s estimates. If the Company’s ongoing estimates of future cash flows are not met, the Company may have to record additional impairment charges in future periods. The Company’s estimates of future cash flows are based on current regulatory and economic climates, recent operating results, and planned business strategy. These estimates could be negatively affected by changes in federal, state, or local regulations or economic downturns. The impairment charges impacting the Non-Core segment were determined through utilization of the market approach which was considered most appropriate as the Company continues to evaluate strategic options for these businesses. The assumptions and estimates used in determining the fair values of the reporting units contain uncertainties, and any changes to these assumptions and estimates could have a negative impact and result in a future impairment. For further information see Note 14 to the Consolidated Financial Statements.

2019 Annual Goodwill Impairment Testing

In the fourth quarter of 2019, quantitative testing was performed on all of the Company’s reporting units that carry goodwill. Based on the results of the testing, the estimated fair value of each of the reporting units exceeded their carrying values. The dynamic economic environments in which the Company's diversified product lines operate, and key economic and product line assumptions with respect to projected selling prices, market growth and inflation rates, can significantly affect the outcome of impairment tests. Estimates based on these assumptions may differ significantly from actual results. Certain reporting units within the Non-Core segment have limited headroom and changes in factors, circumstances and assumptions used in assessing potential impairments can have a significant impact on the existence and magnitude of impairments, as well as the time in which such impairments are recognized.

Contractual Obligations

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

				Payments Due In
In millions	Total at December 31, 2019			2020			2021-2022			2023-2024			2025 and beyond
Long-term debt obligations 1,2	$	15,710		$	2,004		$	3,006		$	2,800		$	7,900
Expected cash requirements for interest 3	7,234			666			1,133			902			4,533
Finance lease obligations	4			1			2			—			1
Operating leases	615			148			221			100			146
Pension and other post employment benefits	1,225			85			151			133			856
Purchase obligations 4	728			402			279			18			29
Other liabilities 5	183			44			46			31			62
Total contractual obligations	$	25,699		$	3,350		$	4,838		$	3,984		$	13,527

1.	Included in the Consolidated Financial Statements.

2.	Includes long-term debt due within one year, but excludes unamortized debt fees of $95 million.

3.	Cash requirement for interest on long-term debt was calculated using current interest rates at December 31, 2019 and includes $255 million of various floating rate notes and debt instruments.

4.	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.

5.

Includes liabilities related to environmental remediation, legal settlements, and other noncurrent liabilities. The table excludes uncertain tax positions due to uncertainties in the timing of the effective settlement of tax positions with the respective taxing authorities and deferred tax liabilities as it is impractical to determine whether there will be a cash impact related to these liabilities. The table also excludes deferred revenue as it does not represent future cash requirements arising from contractual payment obligations.

The Company expects to meet its contractual obligations through its normal sources of liquidity and believes it has the financial resources to satisfy the contractual obligations that arise in the ordinary course of business.

Long-term Employee Benefits

The Company has various obligations to its employees and retirees. The Company maintains retirement-related programs in many countries that have a long-term impact on the Company's earnings and cash flows. These plans are typically defined benefit pension plans. The Company has a few medical, dental and life insurance benefits for employees, pensioners and survivors and for employees (other post employment benefits or "OPEB" plans).

Pension coverage for employees of the Company's non-U.S. consolidated subsidiaries is provided, to the extent deemed appropriate, through separate plans. The Company regularly explores alternative solutions to meet its global pension obligations in the most cost effective manner possible as demographics, life expectancy and country-specific pension funding rules change. Where permitted by applicable law, the Company reserves the right to change, modify or discontinue its plans that provide pension, medical, dental and life insurance. Benefits under defined benefit pension plans are based primarily on years of service and employees' pay near retirement.

Pension benefits are paid primarily from trust funds established to comply with applicable laws and regulations of the sovereign country in which the pension plan operates. Unless required by law, the Company does not make contributions that are in excess of tax deductible limits. The actuarial assumptions and procedures utilized are reviewed periodically by the plans' actuaries to provide reasonable assurance that there will be adequate funds for the payment of benefits. Thus, there is not necessarily a direct correlation between pension funding and pension expense. In general, however, improvements in plans' funded status tends to moderate subsequent funding needs.

The Company contributed $487 million, $93 million, and $30 million to its funded pension plans for the years ended December 31, 2019, December 31, 2018, and December 31, 2017, respectively.

The Company does maintain one U.S. pension benefit plan. This plan is a separate unfunded plan and these benefits are paid to employees from operating cash flows. The Company's remaining pension plans with no plan assets are paid from operating cash flows. The Company made benefit payments of $71 million, $61 million, and $21 million to its unfunded plans for the years ended December 31, 2019, December 31, 2018, and December 31, 2017, respectively.

The Company's OPEB plans are unfunded and the cost is paid from operating cash flows. Pre-tax cash requirements to cover payments for the Company's OPEB plans was $1 million for the years ended December 31, 2019 and December 31, 2018. For the year ended December 31, 2017, the pre-tax cash requirement was immaterial.

In 2020, the Company expects to contribute approximately $85 million to its funded pension plans and its remaining plans with no plan assets, and about $1 million for its OPEB plans. The amount and timing of actual future contributions will depend on applicable funding requirements, discount rates, investment performance, plan design, and various other factors.

The Company's income can be significantly affected by pension and defined contribution charges/(benefits) as well as OPEB costs. The following table summarizes the extent to which the Company's income for the years ended December 31, 2019, December 31, 2018, and December 31, 2017 was affected by pre-tax charges related to long-term employee benefits:

	For the Years Ended
In millions	December 31, 2019			December 31, 2018			December 31, 2017
Long-term employee benefit plan charges (benefit)	$	98		$	75		$	98

The above charges (benefit) for pension and OPEB are determined as of the beginning of each period. See "Pension Plans and Other Post Employment Benefits" under the Critical Accounting Estimates section beginning on page 55 of this report for additional information on determining annual expense.

For 2020, long term employee benefit expense from continuing operations is expected to increase by about $35 million. The increase is mainly due to lower expected return on plan assets.

Environmental Matters

The Company operates global manufacturing, product handling and distribution facilities that are subject to a broad array of environmental laws and regulations. Such rules are subject to change by the implementing governmental agency, and the Company monitors these changes closely. Company policy requires that all operations fully meet or exceed legal and regulatory requirements. In addition, the Company implements voluntary programs to reduce air emissions, minimize the generation of hazardous waste, decrease the volume of water use and discharges, increase the efficiency of energy use and reduce the generation of persistent, bioaccumulative and toxic materials. Management has noted a global upward trend in the amount and complexity of proposed chemicals regulation. The costs to comply with complex environmental laws and regulations, as well as internal voluntary programs and goals, are significant and will continue to be significant for the foreseeable future.

Pre-tax environmental expenses charged to income from continuing operations are summarized below:

(Dollars in millions)	For the Year Ended December 31, 2019			For the Year Ended December 31, 2018			For the Year Ended December 31, 2017
Environmental operating costs	$	183		$	182		$	61
Environmental remediation costs	28			15			3
	$	211		$	197		$	64

Based on existing facts and circumstances, management does not believe that year-over-year changes, if any, in environmental expenses charged to current operations will have a material impact on the Company's financial position, liquidity or results of operations. Annual expenditures in the near term are not expected to vary significantly from the range of such expenditures experienced in the past few years. Longer term, expenditures are subject to considerable uncertainty and may fluctuate significantly.

Environmental Operating Costs

As a result of its operations, the Company incurs costs for pollution abatement activities including waste collection and disposal, installation and maintenance of air pollution controls and wastewater treatment, emissions testing and monitoring, and obtaining permits. The Company also incurs costs related to environmental related research and development activities including environmental field and treatment studies as well as toxicity and degradation testing to evaluate the environmental impact of products and raw materials.

Remediation Accrual

Changes in the remediation accrual balance are summarized below:

(Dollars in millions)
Balance at December 31, 2017	$	51
Remediation payments	(15		)
Net increase in remediation accrual	15
Balance at December 31, 2018	$	51
Remediation payments	(12		)
Net increase in remediation accrual	28
Net change, indemnification 1	10
Balance at December 31, 2019	$	77

1.	Represents the net change in indemnified remediation obligations based on activity pursuant to the Separation and Distribution Agreement and Letter Agreement as discussed below and in Notes 4 and 16 to the Consolidated Financial Statements.

Considerable uncertainty exists with respect to environmental remediation costs, and, under adverse changes in circumstances, the potential liability may range up to $170 million above the amount accrued as of December 31, 2019. However, based on existing facts and circumstances, management does not believe that any loss, in excess of amounts accrued, related to remediation activities at any individual site will have a material impact on the financial position, liquidity or results of operations of the Company.

Pursuant to the Separation and Distribution Agreement and the Letter Agreement discussed in Notes 4 and 16 to the Consolidated Financial Statements, the Company indemnifies Dow and Corteva for certain environmental matters. The Company has recorded an indemnification liability of $42 million corresponding to the Company's accrual balance related to these matters at December 31, 2019. The indemnification liability is included in the total remediation accrual liability of $77 million.

Environmental Capital Expenditures

Capital expenditures for environmental projects, either required by law or necessary to meet the Company’s internal environmental goals, were $33 million for the year ended December 31, 2019. The Company currently estimates expenditures for environmental-related capital projects to be approximately $35 million in 2020.

Climate Change

The Company believes that climate change is an important global issue that presents risks and opportunities. For instance, the Company continuously evaluates opportunities for existing and new product and service offerings to meet the anticipated demands of a low-carbon economy. In 2019, the Company announced nine new sustainability goals, including an Acting on Climate goal to achieve a 30 percent reduction in absolute greenhouse gas (GHG) emissions by 2030 and carbon neutral operations by 2050. DuPont reports on its progress against these goals in its annual sustainability report.

The Company is actively engaged in efforts to develop constructive public policies to reduce GHG emissions and encourage lower-carbon forms of energy. Such policies may bring higher operating costs as well as greater revenue and margin opportunities. Legislative efforts to control or limit GHG emissions could affect the Company's energy source and supply choices as well as increase the cost of energy and raw materials derived from fossil fuels. Such efforts are also anticipated to provide the business community with greater certainty for the regulatory future, help guide investment decisions, and drive growth in demand for low-carbon and energy-efficient products, technologies, and services. Similarly, demand is expected to grow for products that facilitate adaptation to a changing climate. However, the current unsettled policy environment in the U.S., where many company facilities are located, adds an element of uncertainty to business decisions, particularly those relating to long-term capital investments.

In addition, significant differences in regional or national approaches could present challenges in a global marketplace. An effective global climate policy framework will help drive the market changes that are needed to stimulate and efficiently deploy new innovations in science and technology, while maintaining open and competitive global markets.