DD - DuPont at Goldman Sachs Basic Materials Conference EVENT DATE/TIME: MAY 21, 2014 / 3:45PM GMT

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1 THOMSON REUTERS STREETEVENTS EDITED TRANSCRIPT DD - DuPont at Goldman Sachs Basic Materials Conference EVENT DATE/TIME: MAY 21, 2014 / 3:45PM GMT

2 CORPORATE PARTICIPANTS Nick Fanandakis Dupont - EVP and CFO PRESENTATION We are very fortunate to have Nick Fanandakis, Chief Financial Officer of DuPont here. And keeping with the format this year, we are keeping it more informal, more Q&A and hoping to get a lot of audience participation as well. Welcome, Nick. Thank you. Pleasure to be here. It seems like this time of year every year there is always a little bit of concern around the global economy for one reason or another and it just always seems our conference you know you the year out optimistic, reality sets in by May and three times out of four lately it has been disappointing kind of global growth. But you have such a broad reach of portfolio and broad reach geographically I was hoping you could maybe help us understand what from a bottoms up level, what you are seeing out there? How is demand looking versus how you thought it would look at the beginning of the year and what is sort of the outlook for the rest of the year from here? Sure. Maybe the best way to do that would be to just walk around the world a little bit on it. So if you start here at home in North America, the quarter started out much as anticipated from some of the macro trends that are out there. So when you look at GDP, expectation being slightly below 3%, 2.7% GDP sort of growth, we are still in line with that in our expectations for the year. Industrial production is slightly better than the 3%, it is about 3.2% and it was better than that in the first quarter as we started out so industrial production index has started out strong. When you look at some of the segments that we are heavily involved in in the ag segment, certainly when you look at prices of the commodity in ag, they are off their peak but I would say they are more towards the normalized levels now, certainly at a level where the farmer has still very attractive economics that they are working under. The levels of the 5 and 12 for soy and for corn and soy are much more in line with normalized levels. If you look at the automotive segment, in the first quarter the automotive segment in North America was about a 4%, 5% sort of increases and we are still looking at for the full year being somewhere in that 4% range for the full year. So started out good in the automotive segment. Housing starts are still looking to be strong, about 15%, maybe a little bit under that but -- and that impacts a lot of our businesses, our safety and protection businesses where building innovations would be, our TiO2 business as well as our industrial bioscience on Sorona carpet applications. So North America is starting out well. This low natural gas prices that obviously helped bolster some of the other industrial businesses as well. If you go to Europe, it is kind of the tale of two things. You've got Western Europe where it is steady and increasing, it isn't going down as it has been. Eastern Europe, still more growth potential. 2

3 On the automotive side, Europe had about similar, about maybe a percentage point lower than the North American market but similar sort of automotive growth. And some of our businesses there, our materials business and our safety and protection business had double-digit growth. Overall when you look at Europe for us, we had a 6% volume growth year-over-year so it was attractive volume growth in the quarter and we see that continuing. In Asia, it is somewhat mixed. In developing Asia, it was more growth opportunities for example in China we grew 12% volume on a year-over-year basis. So we are seeing opportunities still in the China markets. In developed Asia, it was softer. Some of that was driven by the currency valuations but softer in that marketplace. That gives you a sense of the dynamics across the macro sense. And relative to your expectations overall, if you could just summarize it, it seems like fairly in line, a little bit of regional disparity. In line with the expectations overall. A little softer in developed Asia than we had hoped for and anticipated but overall in line. Okay. I think the topic we get asked the most about is the TiO2 and [fluoro] product separation. If you could just update us on how that carveout is going and update us on the timing of that? The separation is very much on track. We are looking at a mid-2015 separation date which is very in-line with other competitive spins of this size, this complexity when we did our benchmarking out there and we are on track to still completing it in that timeframe. Now of course we are proceeding down the spin track and all of the work streams that go with that, the carveouts, the identifying of the assets, the liabilities going over, the debt structure, the dividend load, all those things. And we are identifying the box if you will and then we will determine whether we maintain that path of spin or whether there is enough value creation to potentially entertain other opportunities. You mentioned other opportunities, does that include keeping them in the portfolio or is that --? No, it is not keeping them in the portfolio. There will be the separation and we are going down the spin path as I say but we are open to the possibility of someone coming in with a potential RMT or even a sale, direct purchase opportunity. I believe there are hurdles in those options that are sufficient that it is going to be difficult for someone to offer a value that would make me excited from a preceding standpoint but that opportunity exists and is there. It has got to be of sufficient value though to offset the risk and the uncertainty that we would take in moving forward with that endeavor versus continuing down the spin path. 3

4 When you think about the TiO2 in particular, the industry structure is pretty consolidated. You are the number one player. Just thinking hurdles to a combination with an existing player, from a regulatory perspective, market concentration, do you think it can be done? Are there things that could be done to get around that if that would be an option? Certainly a strategic player would have to address those concerns and issues. But there are ways to address that, there are remedies that could be put in place to deal with that. I think the more significant hurdle to be honest with you is the fact that I have a very low tax basis of these assets and if I was to do a sale, there would be a significant amount of leakage if you will from the tax consequences of a direct sale versus a spin opportunity that would be tax-free in nature. That is where the RMT would be more attractive. RMT could be another potential avenue which would have the same tax advantages as the spin would with the potential for other synergies that could be created with the player that would be involved in an RMT. But when you are introducing the RMT, you are introducing an element of uncertainty and negotiations that could impact the timeline that we are on. And if it is going to impact that timeline and if I'm going to take a risk to doing something that is going to delay the mid-2015 timeline, it has to create enough value on the other side for me to take that risk. And thinking about the margins in that business, (inaudible) to the peaks from a few years ago, do you think that they are at the bottom right now and is there scope for them to improve by mid-2015 such that when you are spinning it is going to be a much improved business from what we see today? So when you look at the margins of this business there is no doubt that it goes through cycles, right? Where is it today in that cycle? What we have seen happen over the last five quarters is increases in volume on a year-over-year basis so we have seen the volume improvements. Last quarter alone, we saw a 7% volume improvement in these businesses. So you are starting to see that volume pick up. I think where I would characterize it is it is a stable industry right now, it hasn't yet turned upward. There is from a manufacturer standpoint of TiO2, my belief is there is probably about a 10-day supply of inventory on hand but this volume year-over-year increase that we are seeing is obviously going to impact that in a favorable way and reduce those levels. And it is a pure commodity. Supply/demand economics are going to drive it here and once they reach a certain point there will be upward pressure on pricing at that point. The journey that DuPont has been on over the last 20 years, you've done a lot of portfolio moves, you got out Conoco, you bought Pioneer more recently, got out of the auto coating business, Axalta. And now with the TiO2 separation, it is going to be a much different company than it was 20, 30 years ago. Is there an overarching vision or theme driving all of this and where do you want to have DuPont positioned going forward, where do you think it will be in a couple of years? 4

5 So most definitely there is an overarching theme and a strategy that we are executing against. When you think about it, we have three strategic priorities that we are driving in the Company. It is around maintaining that leadership position we have in the ag and nutrition segments and continuing to develop and build upon that. It is our around continuing that historical leadership position we have had in advanced materials and bringing new product opportunities into that space that will allow for continued value creation. And it is becoming that leader in the industrial bioscience side of the house and if you think about those three strategic priorities and you now go back and recap some of those large portfolio transitions that we have made, very much aligned around those three strategic priorities and the direction we are going in addressing some of those market needs that we talk about all the time around the discontinuities that exist in the marketplaces. So the Danisco acquisition was certainly a step in that direction, brought with it a lot of capability around the enzyme technology, it brought additional leadership position around the food market space for us. The coatings separation that we had very much aligned with concentrating and focusing our efforts where science is going to make a difference and where we can see the leverage of our science in those product offerings, in those businesses, those are the places we want to focus. There wasn't that opportunity in coatings. And even with chemicals now when we are looking at this spin and the separation that we are doing, the same sort of logic is driving that. If you look at the ability to leverage science into those businesses, it was limited versus other places within the DuPont Company. So I think we are certainly executing well against the strategic direction we are going and feel very good about the active portfolio management that we have been able to be able to do. And if the coatings or the TiO2 transaction ends up being one where you do get a large amount of cash inflow, it wouldn't be the spin in that case it would be something different. But would you look to redeploy that by getting bigger in some of your existing markets? Do you see opportunities that would require capital to try and get into a new market you are not already in or would you simply kind of look to return that to shareholders? You said something about a spin not having that. The spin will generate a lot of cash internally as well because as we put the debt load on the spun entity, we would look to dividend back that cash to DuPont and so the spin itself will have a significant amount of cash inflow to the Company as well. There will also be the opportunity with the spin that we will be putting some of the dividend load onto the Spinco as well so that is some of the cash usage on a year in, year out basis that would also be moving over. So there are significant cash implications back to DuPont parent even with the spin option. Now I grant you that a sale or some other things might have even greater impact but there will be some even with that. And so what would we do with that cash? Well we have always said that our position around that topic is we want to maintain a strong balance sheet first and foremost and a strong balance sheet for us is maintaining that Aa2 sort of rating. We then look to return excess cash to shareholders unless we have a compelling investment opportunity and that could be potential acquisitions, that could be other capital investments, that could be a lot of different things that is going to generate a significant amount of value for the shareholders by reinvesting in the Company as well. So we use all the tools is the point, we would use potential around share buybacks, potential around acquisitions or other capital uses. 5

6 And then the topic of stranded costs comes up every time there is one of these portfolio moves or separations. And I think there was a fair amount of it when you got out of the auto coatings business and you have been working on pulling those out. With the separation of TiO2, there is another opportunity to look at how the business is run, ways to make those back-office functions more efficient. Is that something that you are taking a bigger look at now in advance of that as part of your carveout move and how quickly do you think you could execute that to pull any stranded costs out? So we are doing that and more I guess is the best way to answer it. You are right, when we did the coatings separation, the sale there, we looked at the residual costs that was going to be trapped if you will in the Company and we put a very active effort in place to eliminate that cost within that first year after the transition. We were successful, we did it earlier than the first year and we did it for a greater amount. So that part was very successful. With the spin we are looking at it differently. We are saying yes, there is going to be that element of residual costs that we are going to have to deal with but we are going far greater than that. We are saying that this is 18% to 20% of the Company's revenue base that is going to be leaving and so we are taking a really fresh look at the cost across the whole Company, all of the functional cost in support of the Company and saying with 20% less revenue base, how do we do things differently? What are the things we could be doing differently that could simplify, standardize, reduce the complexity and cost levels within these functional support organizations? So we are going to look at this as very much an opportunity to make some additional moves in the way of reorganizing, restructuring the Company such that we will be able to support the new DuPont in a much more efficient and effective way. And then just talk about the ag business for a little bit and the highlight for the last couple of years for sure, this year the weather caused a little bit of havoc in Latin America plus North America and delayed some plantings, I think you also saw some shifts from corn to soy as the result of the tighter planning window. But could you give an update on a lot of seed has been planted, how do you think that the year shaped up and your expectations in that business, you talked about it a little bit up front which is drilling down just to the ag business, you had some successful commercial launches of insecticides, herbicides but also just how has the season and the planting gone and pricing as well? Sure. So the plantings at this point in time are certainly above last year levels but they are in line with about the five-year average both in corn and in soy, maybe slightly better but they are in line with the five-year average. What we are seeing from our position is continued value being created through the innovation we are bringing into the marketplace. So prices for us are growing up modestly 4% to 7% sort of price increases and that is driven by the value around the product innovation that we are bringing into the marketplace. For example, if you look at our AcreMax product, it represented about 40% of our offering last year. This year it is going to be about two-thirds of our offering in the marketplace. Our AQUAmax drought tolerance is going to be on 10,000,000 acres this year. Our T-series for soy is going to be on one-third of our acres this year. So you can see the significant traction we are getting around the product offerings which is allowing us not only to get the volumes that we want to get there but also the pricing value through the innovation that we are bringing. 6

7 As you look at the soybean platform, the move to license in (inaudible) two products. Has that competitively changed your ability to go out there and market? You have great varieties of germplasm -- the genetic breeding is phenomenal with the T-series you said. You were probably a little bit disadvantaged from the trade package before but does having that now make you even more competitive in the market? It opens up more optionality for us. So it gives us the ability to provide the farmer with the best products that would be available and we can take that product and we can stack it with other things, we can provide the farmer the seed and the product that is going to give them the most productivity. So it really opens up our optionality within the Company by having that license arrangement in place. It is a small piece of our overall soy business right now, probably in the 5% range at most but it does provide the optionality for further opportunities for growth in providing the farmer the best products available. We will open up to the audience for any questions you might have. Maybe sticking with ag, you could talk about precision planting, even broader than that, you have branded a new opportunity called Encirca business that you have. Could you talk a little bit about that potential opportunity and what kind of value you are bringing to the farmer there? From a business model point of view, how is that different from your traditional ag businesses? Sure. Here is an area where we have been a player for quite some time. We have developed a strong leadership position in this space. We have a collaborative effort that has been in place now for awhile with DTN, where they provide the weather stations at the farm that would help monitor not only the weather patterns. We have changed our offering, enhanced our offerings over time. We have plotted over 20 million acres already, both harvested and planted acres and the offering continues to develop and continues to improve and we have changed how we are going about it so now it is a service offering where someone could -- it doesn't have to be a buyer of our seed in order to subscribe to the service. It is something that is going to continue to grow and develop, it is not going to move the needle today but it has potential as we enter into the next decade to be approaching the $0.5 billion range in the way of topline growth. So it is something that could be a significant needle mover in the future, just not right now. But it is an area where we have enjoyed a leadership position and it is one we are going to continue to develop and invest in as we go forward. It only strengthens the already strong position we had in some of the other areas. So when you look at our channel access and how we go to market, we call directly on the farmer, we are not going through retailers, wholesalers -- and that relationship, that confidence is what allows us to build on this offering with the farmers and gives them the confidence to deal with us and have these subscriptions in place and to work with us in this space. Does that direct sales and marketing approach that you have help get the word out and get people familiar with the product? 7

8 Yes, most certainly it has helped in that regard and that relationship already being there existing has only furthered the opportunities. And then like I say, it is that relationship that builds that confidence in the farmer to having us have access to that data and provide that service to the farmer. That is something that I don't know -- we don't talk about a lot or maybe people don't appreciate but how does the farmer view his own data? Is that an asset to him? How does he decide who he is going to partner with and share that data with? So that is an asset to him. It helps him around the planting, the yields, the treatment of the fields, the type of seed that should be planted in that acre of land, the right product for the right acre. We have an arrangement with John Deere where the wireless sort of connection of the equipment to the database and so all of that is in place that helps drive the ability to accumulate and then analyze that data. Then obviously part of our services is helping to interpret and advise in that area. QUESTIONS AND ANSWERS Unidentified Audience Member Nick, I am wondering on the biofuels side, the changes in the renewable fuels legislation, does that change the NPV of your enzymes and plans on cellulosic? Secondly, what has to happen to make butanol a major commercial reality? To make what? Unidentified Audience Member Butanol, bio butanol. So the RFS that you are referring to, there are some discussions around changes there. There were some changes to the RVOs this year but those numbers actually for cellulosic ethanol went up. It was the only category out of all of them that actually increased and it increased to a level that is in line with kind of the capacity that is coming online this year. We are very excited about our progress in that space. We have the facility coming online the end of this year, 2014 in Nevada, Iowa. This will be a 30 million gallon facility that will allow us to truly prove out the technology. We've proved the technology in the smaller scale pilot facility but this now will allow us to do it in a much larger scale and then open up the opportunity for licensing and material sales not only here in the States but abroad as well. So I think the RFS is working. I think it continues to have support from the current administration and I think it is something that will continue on an ongoing way. 8

9 Bio butanol is about one year behind the ethanol progress that we have made. It is on track as well. It has always been slated to be one year later so by the end of 2015, we will have that first bio butanol facility in place. It brings with it as I think you know, Bob, a lot of additional value creation opportunities with the bio butanol that ethanol in and of itself doesn't have. It has got a higher energy density so it brings more value to the users in that regard. It can use existing systems because it doesn't have that same affinity for water so you can use existing distribution systems, it has lower vapor pressure so you are not limited to the time of year in the mixing. So it brings a lot of value and what you are going to see there more than anything else is probably retrofits or conversions that will take place versus on the cellulosic ethanol, those will be greenfield facilities that will be built with the technology being used. Unidentified Audience Member Nick, along the lines of the spinoff of the TiO2 business, can you to explain to us what is the strategic rationale for targeting having a low BBB rating for the spinoff because a lot of the peers seem to be high-yield rated and so it would allow DuPont to extract more value from the spinoff in a case that you were able to add more leverage? Great question. So we haven't firmed up or decided exactly where we are going to come out. We've talked about a low investment grade BBB- sort of rating right now but we haven't landed the plane on that one yet. It could be that it is a notch below that which would be more of a high-yield below investment grade. And as you pointed out when you look at the competitive set, much of the competitive set that Spinco would be dealing with is in fact at that lower rating and that does provide the opportunity for additional value in the way of cash to come back to DuPont because the debt load would be greater. But that is one of the variables. There is all the other variables that have to come into play around not just the debt load but the dividend load, the liabilities we are putting on the entity and other things that are all going to play into that rating position. But your point is right on and we haven't yet firmly committed to exactly what that rating is going to be. We have talked in the concept of low investment grade but it is not absolute at this point. I think we will have to end it there. Okay. For everyone who hasn't already grabbed lunch, grab it outside. We are going to be back in three or four minutes with our panel discussion on prospects for a US manufacturing Renaissance. 9

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