DuPont de Nemours 10-Q 2023-03-31

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2023

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 001-38196

DUPONT DE NEMOURS, INC.

(Exact name of registrant as specified in its charter)

(302) 774-3034

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

☑ Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

☑ Yes ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

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

The registrant had 459,016,772 shares of common stock, $0.01 par value, outstanding at May 1, 2023.

DuPont de Nemours, Inc.

QUARTERLY REPORT ON FORM 10-Q

For the quarterly period ended March 31, 2023

TABLE OF CONTENTS

DuPontTM and all products, unless otherwise noted, denoted with TM, SM or ® are trademarks, service marks or registered trademarks of affiliates of DuPont de Nemours, Inc.

FORWARD-LOOKING STATEMENTS

This communication contains "forward-looking statements" within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In this context, forward-looking statements often address expected future business and financial performance and financial condition, and often contain words such as "expect," "anticipate," "intend," "plan," "believe," "seek," "see," "will," "would," "target," and similar expressions and variations or negatives of these words. Capitalized terms used in this section but not defined below have the meanings assigned in the Notes to the Consolidated Financial Statements of this Quarterly Report on Form 10-Q.

Forward-looking statements address matters that are, to varying degrees, uncertain and subject to risks, uncertainties, and assumptions, many of which that are beyond DuPont's control, that could cause actual results to differ materially from those expressed in any forward-looking statements. Forward-looking statements are not guarantees of future results. Some of the important factors that could cause DuPont's actual results to differ materially from those projected in any such forward-looking statements include, but are not limited to: (i) the possibility that the Company may fail to realize the anticipated benefits of the $5 billion share repurchase program announced on November 8, 2022 and that the program may be suspended, discontinued or not completed prior to its termination on June 30, 2024; (ii) ability to achieve anticipated tax treatments in connection with mergers, acquisitions, divestitures, and other portfolio changes and the impact of changes in relevant tax and other laws; (iii) indemnification of certain legacy liabilities; (iv) risks and costs related to each of the parties respective performance under and the impact of the arrangement to share future eligible PFAS costs by and between DuPont, Corteva and Chemours; (v) failure to timely close on anticipated terms (or at all), realize expected benefits and effectively manage and achieve anticipated synergies and operational efficiencies in connection with mergers, acquisitions, divestitures and other portfolio changes, including the acquisition of Spectrum; (vi) risks and uncertainties, including increased costs and the ability to obtain raw materials, related to operational and supply chain impacts or disruptions, which may result from, among other events, pandemics and responsive actions, timing and recovery from demand decline in consumer-facing markets, including in China, and geo-political and weather related events; (vii) ability to offset increases in cost of inputs, including raw materials, energy and logistics; (viii) risks from continuing or expanding trade disputes or restrictions, including on exports to China of U.S.-regulated products and technology impacting the semiconductor business; (ix) risks, including ability to achieve, and costs associated with DuPont’s sustainability strategy including the actual conduct of the company’s activities and results thereof, and the development, implementation, achievement or continuation of any goal, program, policy or initiative discussed or expected; and (x) other risks to DuPont's business, operations; each as further discussed in DuPont’s most recent annual report and subsequent current and periodic reports filed with the U.S. Securities and Exchange Commission. Unlisted factors may present significant additional obstacles to the realization of forward-looking statements. Consequences of material differences in results as compared with those anticipated in the forward-looking statements could include, among other things, business or supply chain disruption, operational problems, financial loss, legal liability to third parties and similar risks, any of which could have a material adverse effect on DuPont’s consolidated financial condition, results of operations, credit rating or liquidity. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. DuPont assumes no obligation to publicly provide revisions or updates to any forward-looking statements whether as a result of new information, future developments or otherwise, should circumstances change, except as otherwise required by securities and other applicable laws.

DuPont de Nemours, Inc.

Consolidated Statements of Operations

See Notes to the Consolidated Financial Statements.

DuPont de Nemours, Inc.

Consolidated Statements of Comprehensive Income

See Notes to the Consolidated Financial Statements.

DuPont de Nemours, Inc.

Condensed Consolidated Balance Sheets

See Notes to the Consolidated Financial Statements.

DuPont de Nemours, Inc.

Consolidated Statements of Cash Flows

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Management’s discussion and analysis of financial condition and results of operations is provided as a supplement to, and should be read in conjunction with, the interim Consolidated Financial Statements and related notes to enhance the understanding of the Company’s operations and present business environment. Components of management’s discussion and analysis of financial condition and results of operations include:

• Overview

• Result of Operations

• Segment Results

• Changes in Financial Condition

OVERVIEW

DuPont is a global innovation leader with technology-based materials and solutions that help transform industries and everyday life by applying diverse science and expertise to help customers advance their best ideas and deliver essential innovations in key markets including electronics, transportation, building and construction, healthcare and worker safety.

As of March 31, 2023, the Company has $6.6 billion of working capital and approximately $4.8 billion in cash and cash equivalents. The Company expects its cash and cash equivalents, cash generated from operations, and ability to access the debt capital markets to provide sufficient liquidity and financial flexibility to meet the liquidity requirements associated with its continuing operations.

Outlined below are recent developments and material historical transactions impacting this Quarterly Report on Form 10-Q.

Mobility & Materials Divestitures

On November 1, 2022, DuPont completed the divestiture of the majority of its historical Mobility & Materials segment, including the Engineering Polymers business line and select product lines within the Advanced Solutions and Performance Resins business lines (the “M&M Divestiture”), to Celanese Corporation (“Celanese”). The divestiture was pursuant to the Transaction Agreement (the "Transaction Agreement") with Celanese entered on February 17, 2022 and announced on February 18, 2022. The Company also announced on February 18, 2022, that its Board of Directors approved the divestiture of the Delrin® acetal homopolymer (H-POM) business (the “Delrin® Divestiture”), subject to entry into a definitive agreement and satisfaction of customary closing conditions, (the Delrin® Divestiture and together with the M&M Divestiture, collectively the "M&M Divestitures” and the businesses in scope of the M&M Divestitures collectively the "M&M Businesses"). As of March 31, 2023, the Company anticipates a closing date for the sale of Delrin® by the end of 2023. The Company determined that the M&M Businesses met the criteria to be classified as held for sale and that the sale represents a strategic shift that has a major effect on the Company’s operations and results.

The financial position of DuPont as of March 31, 2023 and December 31, 2022, present the businesses to be divested as part of the Delrin® Divestiture, as discontinued operations. The results of operations for the three months ended March 31, 2023, present the financial results of Delrin® as discontinued operations. The results of operations for the three months ended March 31, 2022, present the financial results of the M&M Businesses as discontinued operations. The cash flows and comprehensive income of the M&M Businesses have not been segregated and are included in the interim Consolidated Statements of Cash Flows and interim Consolidated Statements of Comprehensive Income, respectively, for all periods presented. Unless otherwise indicated, the information in the notes to the interim Consolidated Financial Statements refer only to DuPont's continuing operations and do not include discussion of balances or activity of the M&M Businesses. See Note 3 to the interim Consolidated Financial Statements for additional information.

Recent Developments

Macroeconomic Conditions

In the first quarter 2023, DuPont continued to experience the impact of adverse macroeconomic factors including an inflationary environment and demand declines in consumer facing markets, including China. The ultimate extent to which these macroeconomic factors will continue to impact DuPont's results is not known.

Dividends

On February 6, 2023, the Board of Directors declared a first quarter 2023 dividend of $0.36 per share, which was paid on March 15, 2023, to shareholders of record on February 28, 2023.

On April 19, 2023, the Company announced that its Board declared a second quarter dividend of $0.36 per share payable on June 15, 2023, to shareholders of record on May 31, 2023.

RESULTS OF OPERATIONS

The following table summarizes sales variances by segment and geographic region from the prior year:

1.Corporate & Other includes activities of the Retained Businesses, Biomaterials and previously divested businesses.

2.Europe, Middle East and Africa.

The Company reported net sales for the three months ended March 31, 2023 of $3.0 billion, down 8 percent from $3.3 billion for the three months ended March 31, 2022, due to a 7 percent decrease in volume, a 3 percent unfavorable currency impact, and a 2 percent decrease in portfolio actions, partially offset by a 4 percent increase in local price and product mix. Volume decrease was driven by Electronics & Industrial (down 15 percent). Currency was down 3 percent compared with the same period last year, driven by EMEA (down 4 percent) and Asia Pacific (down 4 percent). Portfolio and other changes decreased by 2 percent driven by declines within Corporate & Other (down 14 percent) primarily due to the sale of Biomaterials in May 2022. Local price and product mix increase was driven by Water & Protection (up 6 percent) Corporate & Other (up 5 percent) and Electronics & Industrial (up 2 percent). Local price and product mix increased across all regions.

Cost of Sales

Cost of sales was $2.0 billion for the three months ended March 31, 2023, down slightly from $2.1 billion for the three months ended March 31, 2022. Cost of sales decreased for the three months ended March 31, 2023 primarily due to decreased sales volume and currency impacts, primarily within the Asia Pacific and EMEA regions, partially offset by higher raw material costs globally.

Cost of sales as a percentage of net sales for the three months ended March 31, 2023 was 66 percent compared with 64 percent for the three months ended March 31, 2022.

Research and Development Expenses ("R&D")

R&D expenses totaled $127 million in the first quarter of 2023, down from $143 million in the first quarter of 2022. R&D as a percentage of net sales was consistent period over period at 4 percent for the three months ended March 31, 2023 and 2022.

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

SG&A expenses were $340 million in the first quarter of 2023, down from $389 million in the first quarter of 2022. SG&A as a percentage of net sales was fairly consistent period over period at 11 percent and 12 percent for the three months ended March 31, 2023 and 2022, respectively.

Amortization of Intangibles

Amortization of intangibles was $147 million in the first quarter of 2023, down from $153 million in the first quarter of 2022. The decrease for the three months ended March 31, 2023 as compared with the same period of the prior year was primarily due to currency fluctuations.

Restructuring and Asset Related Charges - Net

Restructuring and asset related charges - net were $14 million in the first quarter of 2023, down from $101 million in the first quarter of 2022. The activity in the first quarter of 2023 is primarily related to the 2022 Restructuring Program. The charges in the first quarter of 2022 include a $94 million impairment charge of an equity method investment and a $7 million charge related to the 2021 Restructuring Actions.

See Note 5 to the interim Consolidated Financial Statements for additional information.

Acquisition, Integration and Separation Costs

Acquisition, integration and separation costs, primarily consist of financial advisory, information technology, legal, accounting, consulting and other professional advisory fees. The Company recorded no costs related to continuing operations for the three months ended March 31, 2023 and recorded costs of $8 million for the three months ended March 31, 2022*.* For the three months ended March 31, 2022, these costs were primarily associated with the execution of activities related to strategic initiatives including the acquisition of Laird PM and the now terminated previously announced agreement to acquire the outstanding shares of Rogers Corporation ("Terminated Intended Rogers Acquisition").

See Note 3 to the interim Consolidated Financial Statements for additional information.

Equity in Earnings of Nonconsolidated Affiliates

The Company's share of the earnings of nonconsolidated affiliates was $15 million in the first quarter of 2023, down from $26 million in the first quarter of 2022. The decrease for the three months ended March 31, 2023 compared to 2022 is primarily due to lower equity earnings across the portfolio.

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 in the first quarter of 2023 was income of $29 million compared with income of $3 million in the first quarter of 2022. The first quarter of 2023 primarily related to a benefits related to the finalization of a gain on sale of a business of $6 million, interest income of $46 million, partially offset by foreign currency exchange losses of $20 million. The first quarter of 2022 included income related to non-operating pension and other post-employment benefit credits of $7 million, partially offset by foreign currency exchange losses of $5 million.

Interest Expense

Interest expense was $95 million and $120 million for the three months ended March 31, 2023 and 2022, respectively. The decrease in interest expense is primarily due to the redemption of $2.5 billion fixed-rate long-term senior unsecured notes due 2023 in November 2022.

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 attribute. The effective tax rate on continuing operations for the first quarter of 2023 was 23.3 percent, compared with an effective tax rate of 16.8 percent for the first quarter of 2022. The lower effective tax rate for the first quarter of 2022 principally the resulted of a $94 million impairment charge on an equity method investment which resulted in a tax benefit of $29 million.

SEGMENT RESULTS

Effective February 2022, the revenues and certain expenses of the M&M Businesses are classified as discontinued operations in the current and historical periods. In addition, the Auto Adhesives & Fluids, MultibaseTM and Tedlar® product lines within the historical Mobility & Materials segment (the "Retained Businesses") are not included in the scope of the M&M Divestitures. Effective with the signing of the Transaction Agreement, the Retained Businesses were realigned to Corporate & Other. The reporting changes have been retrospectively reflected for all periods presented.

The costs of the M&M Businesses that are classified as discontinued operations include only direct operating expenses incurred prior to the November 1, 2022 M&M Divestiture and costs which the Company will no longer incur upon the close of the Delrin® Divestiture. Indirect costs, such as those related to corporate and shared service functions previously allocated to the M&M Businesses, do not meet the criteria for discontinued operations and remain reported within continuing operations. A portion of these indirect costs related to activities the Company continues to undertake post-closing of the M&M Divestiture, and for which it is and will be reimbursed (“Future Reimbursable Indirect Costs”). In addition, a portion of these indirect costs relate to activities the Company intends to perform post the close of the Delrin® Divestiture and for which it will be reimbursed. Future Reimbursable Indirect Costs are reported within continuing operations but are excluded from operating EBITDA as defined below. The remaining portion of these indirect costs are not subject to future reimbursement (“Stranded Costs”). Stranded Costs are reported within continuing operations in Corporate & Other and are included within Operating EBITDA.

The Company's measure of profit/loss for segment reporting purposes is Operating EBITDA as this is the manner in which the Company's chief operating decision maker ("CODM") assesses performance and allocates resources. The Company defines Operating EBITDA as earnings (i.e., “Income from continuing operations before income taxes") before interest, depreciation, amortization, non-operating pension / OPEB benefits / charges, and foreign exchange gains / losses, excluding Future Reimbursable Indirect Costs, and adjusted for significant items. Reconciliations of these measures can be found in Note 20 to the interim Consolidated Financial Statements.

ELECTRONICS & INDUSTRIAL

The Electronics & Industrial 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 and packaging of semiconductors and integrated circuits and provides innovative solutions for thermal management and electromagnetic shielding as well as metallization processes for metal finishing, decorative, and industrial applications. Electronics & Industrial is a leading provider of platemaking systems and photopolymer plates for the packaging graphics industry, digital printing inks and cutting-edge materials for the manufacturing of displays for organic light emitting diode ("OLED"). In addition, the segment produces innovative engineering polymer solutions, high performance parts, medical silicones and specialty lubricants.

Electronics & Industrial net sales were $1,296 million for the three months ended March 31, 2023, down 16 percent from $1,536 million for the three months ended March 31, 2022. Net sales decreased due to a 15 percent volume decline, 2 percent unfavorable currency impact, and a 1 percent decrease in portfolio, partially offset by a 2 percent increase in local price. Volume declines in Interconnect Solutions related to decreased consumer spending on consumer electronics, channel inventory destocking and slower recovery in China. Volume declines in Semiconductor Technologies were driven by reduced semiconductor fab utilization rates and channel inventory destocking. Within Industrial Solutions, volume gains in aerospace and healthcare industrial-end markets were partially offset by lower demand in printing and packaging end-markets, as well as weakness in display and LED applications.

Operating EBITDA was $362 million for the three months ended March 31, 2023, down 24 percent compared with $476 million for the three months ended March 31, 2022, primarily due to volume declines.

WATER & PROTECTION

The Water & Protection 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.

Water & Protection net sales were $1,449 million for the three months ended March 31, 2023, up 1 percent from $1,429 million for the three months ended March 31, 2022. Net sales increased due to a 6 percent increase in local price, partially offset by a 3 percent unfavorable currency impact, and a 2 percent decline in volume. Portfolio remained flat. Local price & product mix gains are the result of broad-based actions taken in 2022 across all lines of business to offset cost inflation. Volume gains in Water Solutions are due to continued strong demand within Reverse Osmosis and Ultrafiltration and volume gains in Safety Solutions primarily within Kevlar, were more than offset by volume declines in construction markets impacting all businesses within Shelter Solutions.

Operating EBITDA was $344 million for the three months ended March 31, 2023, up 1 percent compared with $341 million for the three months ended March 31, 2022 driven by pricing gains which were mostly offset by higher raw material and energy costs, lower volumes and unfavorable currency impacts.

CORPORATE AND OTHER

Corporate & Other includes sales and activity of the Auto Adhesives & Fluids, MultibaseTM and Tedlar® product lines, (the "Retained Businesses"). The results of Corporate & Other for the three months ended March 31, 2022 also includes the sales and activity of the Biomaterials business through its divestiture in May 2022. Corporate & Other also includes certain enterprise and governance activities including non-allocated corporate overhead costs and support functions, leveraged services, non-business aligned litigation expenses and other costs not absorbed by reportable segments. Related to the M&M Divestitures, Corporate & Other includes Future Reimbursable Indirect Costs.

Corporate & Other net sales were $273 million for the three months ended March 31, 2023, down from $309 million for the three months ended March 31, 2022. Net sales primarily decreased due to the divestiture of the Biomaterials business, partially offset by an increase in the net sales of the Retained Businesses.

CHANGES IN FINANCIAL CONDITION

Liquidity & Capital Resources

Information related to the Company's liquidity and capital resources can be found in the Company's 2022 Annual Report, Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations, Liquidity and Capital Resources. Discussion below provides the updates to this information for the three months ended March 31, 2023.

The Company continually reviews its sources of liquidity and debt portfolio and may make adjustments to one or both to ensure adequate liquidity and increase the Company’s optionality and financing efficiency as it relates to financing cost and balancing terms/maturities. 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. However, DuPont is unable to predict the extent of macroeconomic related impacts which depend on uncertain and unpredictable future developments. In light of this uncertainty, the Company has taken steps to further ensure liquidity and capital resources, as discussed below.

The Company's cash, cash equivalents and marketable securities at March 31, 2023 and December 31, 2022 were $4.8 billion and $5.0 billion, respectively, of which $1.1 billion at March 31, 2023 and $1.2 billion at December 31, 2022 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 operating cash flows during the period, partly offset by repatriation. 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.

Total debt at March 31, 2023 and December 31, 2022 was approximately $8.1 billion. The slight increase was primarily due to the changes in the fair value of interest rate swaps designated as fair value hedges.

As of March 31, 2023, the Company is contractually obligated to make future cash payments of $8.2 billion and $5.3 billion associated with principal and interest, respectively, on debt obligations. Related to the principal, $300 million will be due in the next twelve months, and the remainder will be due subsequent to March 31, 2024. Related to interest, $408 million will be due in the next twelve months, and the remainder will be due subsequent to March 31, 2024.

Revolving Credit Facilities

In April 2023, the Company's $1 billion 364-day revolving credit facility expired. The Company is in the process standing a new $1 billion 364-day revolving credit facility with an expected effective date in May 2023.

Commercial Paper

In April 2022, DuPont downsized its authorized commercial paper program from $3.0 billion to $2.5 billion (the “DuPont Commercial Paper Program”). At March 31, 2023 the Company had no commercial paper outstanding.

Proposed Spectrum Acquisition

On May 2, 2023, the Company announced that it had entered into a definitive agreement to acquire Spectrum Plastics Group (“Spectrum”) from AEA Investors for $1.75 billion, $1.72 billion net purchase price after certain tax attributes (the “Proposed Spectrum Acquisition”). The Proposed Spectrum Acquisition is expected to close by the end of the third quarter of 2023, subject to regulatory approvals and other customary closing conditions, and will be part of the Electronic & Industrials segment. The Company intends to pay for the acquisition from existing cash balances.

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 April 30, 2023, DuPont's credit ratings were as follows:

The Company's indenture covenants include customary limitations on liens, sale and leaseback transactions, and mergers and consolidations, subject to certain limitations. The senior unsecured notes (the "2018 Senior Notes") also contain customary default provisions. The Five-Year Revolving Credit Facility and the 2022 $1B Revolving Credit Facilities 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 March 31, 2023, the Company was in compliance with this financial covenant.

Summary of Cash Flows

The Company’s cash flows from operating, investing and financing activities, as reflected in the interim Consolidated Statements of Cash Flows, are summarized in the following table.

Cash Flows from Operating Activities

In the first three months of 2023, cash provided by operating activities was $343 million, compared with $209 million in the same period last year. The increase in cash provided by operating activities is primarily due to the release of cash from accounts and notes receivable, inventory and other assets and liabilities partially offset by lower net income and cash used by accounts payable.

The table below reflects net working capital on a continuing operations basis:

1.Net working capital has been presented to exclude the assets and liabilities related to the Delrin Divestiture. The assets and liabilities related to the Delrin Divestiture are presented as assets of discontinued operations and liabilities of discontinued operations, respectively.

Cash Flows from Investing Activities

In the first three months of 2023, cash used for investing activities was $259 million, compared with cash used for investing activities of $229 million in the first three months of 2022. The increase in cash used for investing activities is primarily attributable to an increase in cash used in the purchases of investments and the absence of cash proceeds from the sale of businesses.

Cash Flows from Financing Activities

In the first three months of 2023, cash used for financing activities was $213 million compared with cash used for financing activities of $258 million in the same period last year. The decrease in cash used for financing activities is primarily attributable to the decrease in cash used for purchases common stock partially offset by the decrease in cash provided by short-term borrowings and proceeds from issuance of Company stock.

Dividends

On February 6, 2023, the Board of Directors declared a first quarter 2023 dividend of $0.36 per share, paid on March 15, 2023, to shareholders of record on February 28, 2023.

On April 19, 2023, the Company announced that its Board declared a second quarter dividend of $0.36 per share payable on June 15, 2023, to shareholders of record on May 31, 2023.

Share Buyback Programs

In November 2022, DuPont’s Board of Directors approved a new share repurchase program authorizing the repurchase and retirement of up to $5 billion of common stock (the “$5B Share Buyback Program"). The $5B Share Buyback Program expires on June 30, 2024, unless extended or shortened by the Board of Directors.

In the fourth quarter 2022, DuPont entered into accelerated share repurchase ("ASR") agreements with three financial counterparties. DuPont paid an aggregate of $3.25 billion to the counterparties and received initial deliveries of 38.8 million shares in aggregate of DuPont common stock, which were retired immediately and recorded as a reduction to retained earnings of $2.6 billion. The remaining $650 million was evaluated as an unsettled forward contract indexed to DuPont common stock, classified within stockholders’ equity. The final number of shares to be repurchased will be based on the volume-weighted average stock price for DuPont common stock during the term of the ASR transaction, less an agreed upon discount. The ASR transaction is being funded with cash on hand and is expected to be completed in the third quarter 2023.

For the three months ended March 31, 2023, there were no purchases of the Company's common stock. At March 31, 2023, $2 billion is the approximate dollar value of shares that remain authorized for repurchases under the $5B Share Buyback Program repurchase authorization. Any additional repurchases under the $5B Share Buyback program will be made from time to time on the open market at prevailing market prices or in privately negotiated transactions off the market, which may include additional accelerated share repurchase agreements. The timing and number of shares to be repurchased will depend on factors such as the share price, economic and market conditions, and corporate and regulatory requirements.

See Part II, Item 2. Unregistered Sales of Equity Securities and Use of Proceeds, for additional information.

Pension and Other Post-Employment Plans

DuPont expects to make additional contributions in the aggregate of approximately $55 million by year-end 2023 to pension and other post-employment benefit plans, including plans held in discontinued operations. Any such contribution could be funded by existing cash balances and/or cash from other available sources of liquidity.

Restructuring

In October 2022, the Company approved targeted restructuring actions to capture near-term cost reductions and to further simplify certain organizational structures following the M&M Divestitures (the "2022 Restructuring Program"). As a result in the fourth quarter 2022, the Company recorded pre-tax restructuring charges of $71 million inception to date, comprised of $68 million of severance and related benefit costs and $3 million of asset related charges. At March 31, 2023, total liabilities related to the 2022 Restructuring Program were $53 million for severance and related benefit costs, recognized in "Accrued and other current liabilities" in the Consolidated Balance Sheet.

See Note 5 to the interim Consolidated Financial Statements for more information on the Company's restructuring programs.

See Note 18 to the interim Consolidated Financial Statements. See also Part II, Item 7A. Quantitative and Qualitative Disclosures About Market Risk, of the Company's 2022 Annual Report on Form 10-K for information on the Company's utilization of financial instruments and an analysis of the sensitivity of these instruments.

Evaluation of Disclosure Controls and Procedures

The Company maintains a system of disclosure controls and procedures to give reasonable assurance that information required to be disclosed in the Company's reports filed or submitted under the Securities Exchange Act of 1934 (Exchange Act) is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. These controls and procedures also give reasonable assurance that information required to be disclosed in such reports is accumulated and communicated to management to allow timely decisions regarding required disclosures.

As of March 31, 2023, the Company's Chief Executive Officer (CEO) and Chief Financial Officer (CFO), together with management, conducted an evaluation of the effectiveness of the Company's disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) of the Exchange Act. Based on that evaluation, the CEO and CFO concluded that these disclosure controls and procedures are effective.

Changes in Internal Control Over Financial Reporting

There were no changes in the Company's internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 and 15d-15 that was conducted during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

ITEM 1. LEGAL PROCEEDINGS

The Company and its subsidiaries are subject to various litigation matters, including, but not limited to, product liability, patent infringement, antitrust claims, and claims for third party property damage or personal injury stemming from alleged environmental torts. Information regarding certain of these matters is set forth below and in Note 13 to the interim Consolidated Financial Statements.

Litigation

See Note 13 to the interim Consolidated Financial Statements.

Environmental Proceedings

The Company believes it is remote that the following matters will have a material impact on its financial position, liquidity or results of operations. The description is included per Regulation S-K, Item 103(c) of the Securities Exchange Act of 1934.

Divested Neoprene Facility, La Place, Louisiana - EPA Compliance Inspection

In 2016, the EPA conducted a focused compliance investigation at the Denka Performance Elastomer LLC (“Denka”) neoprene manufacturing facility in La Place, Louisiana. EIDP sold the neoprene business, including this manufacturing facility, to Denka in the fourth quarter of 2015. Subsequent to this inspection, the U.S. Environmental Protection Agency (“EPA”), the U.S. Department of Justice (“DOJ”), the Louisiana Department of Environmental Quality (“DEQ”), the Company (originally through EIDP), and Denka began discussions in the spring of 2017 relating to the inspection conclusions and allegations of noncompliance arising under the Clean Air Act, including leak detection and repair. DuPont, Denka, EPA, DOJ and DEQ are continuing these discussions, which include potential settlement options.

New Jersey Directive PFAS

On March 25, 2019, the New Jersey Department of Environmental Protection (“NJDEP”) issued a Directive and Notice to Insurers to a number of companies, including Chemours, DowDuPont, EIDP, and certain DuPont subsidiaries. NJDEP’s allegations relate to former operations of EIDP involving poly- and perfluoroalkyl substances, (“PFAS”), including PFOA and PFOA- replacement products. The NJDEP seeks past and future costs of investigating, monitoring, testing, treating, and remediating New Jersey’s drinking water and waste systems, private drinking water wells and natural resources including groundwater, surface water, soil, sediments and biota. The Directive seeks certain information as to future costs and information related to the historical uses of PFAS and replacement chemicals including “information ranging from use and discharge of the chemicals through wastewater treatment plants, air emissions, and sales of products containing the chemicals to current development, manufacture, use and release of newer chemicals in the state.”

There have been no material changes in the Company's risk factors discussed in Part I, Item 1A, Risk Factors, in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer Purchases of Equity Securities

For the three months ended March 31, 2023, there were no purchases of the Company’s common stock. At March 31, 2023, $2 billion is the approximate dollar value of shares that remain authorized for repurchase under the $5B Share Buyback Program repurchase authorization.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

None.

*Filed herewith

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

DUPONT DE NEMOURS, INC.

Registrant

Date: May 3, 2023