Gregory Friedman - Vice President of Investor Relations Edward Breen - Chief Executive Officer Howard Ungerleider - Chief Financial Officer Andrew Liveris - Executive Chairman James Fitterling - Chief Operating Officer of Materials Science Division James Collins - Chief Operating Officer of Agriculture Division Marc Doyle - Chief Operating Officer, Material Science, Agriculture and Specialty Products Neal Sheorey - Vice President of Investor Relations.

David Begleiter - Deutsche Bank P.J.

Juvekar - Citigroup Jeffrey Zekauskas - JP Morgan Vincent Andrews - Morgan Stanley Hassan Ahmed - Alembic Global John Roberts - UBS Christopher Parkinson - Credit Suisse Frank Mitsch - Wells Fargo Securities Steve Byrne - Bank of America Merrill Lynch Peter Butler - Glen Hill Investments Arun Viswanathan - RBC Capital Markets Jonas Oxgaard - Bernstein & Co..

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

Thank you, Mitchell. Good morning, everyone. Thank you for joining us for our fourth quarter and full-year 2017 earnings conference call. DowDuPont is making this call available to investors and media via webcast.

We have prepared slides to support our comments, these slides are posted on the Investor Relations section of DowDuPont's website and through the link to our webcast. Speaking on the call today are Ed Breen, Chief Executive Officer; Howard Ungerleider, Chief Financial Officer; and Andrew Liveris, Executive Chairman.

Also with us in the room today for our Q&A session are Jim Fitterling, Jim Collins, and Marc Doyle, Chief Operating Officer for DowDuPont's Material Science, Agriculture and Specialty Products Divisions, respectively and Neal Sheorey, Vice President of Investor Relations.

Please read the forward-looking statement disclaimers contained in the news release and slides.

In summary, it indicates that statements in the news release, presentation and conference call that states the Company's or management's expectations or predictions of the future are forward-looking statements intended to be covered by the Safe Harbor provisions under Federal Securities laws.

Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially.

A detailed discussion of principle risks and uncertainties which may cause actual results and events to differ materially from such forward-looking statements is included in the section titled Risk Factors and each of DuPont’s, Dow's and DuPont's most recently quarterly report on Form 10-Q.

Last, we will also refer to non-GAAP measures, a reconciliation to the most directly comparable GAAP financial measure and other associated disclosures are contained in our earnings release and on our website. I will now turn the call over to Ed..

Great. Thanks, Greg and thanks everyone for joining this DowDuPont fourth quarter earnings call. I will start by covering the financial highlights. Then provide an update on our three key strategic drivers; the merger, the synergies and the spins.

This past quarter marked the first full quarter of operations for DowDuPont and as you saw, our teams delivered strong results. Turning to Slide 4, the fourth quarter highlights were; sales increased 13%; volume rose 6%, well ahead of global GDP; operating EBITDA grew 24%; and adjusted EPS increased 41%.

We benefited from strong underlying demand for our products and leading positions in growing markets. All eight operating segments recorded quarterly sales growth as did every geography. We delivered excellent operating EBITDA leverage.

Operating EBITDA rose in nearly every segment on increased volume and price, cost synergies, lower pension and OPEB cost, and higher equity earnings. For the full-year, the trends were directionally similar. Pro forma sales, operating EBITDA and adjusted EPS, all grew by double-digits percentages.

Now, I will share an update on the merger, synergies and intended spins. Since our last earnings call, we completed the sale of certain Dow Brazil corn seed asset. This was the third and final key remedy divestiture required by regulators. In addition, we completed the realignment of our businesses.

Management responsibility for the business is shifting from the material science division to the specialty products division now rest with the new leaders. With that work behind us, our focus now turns to the synergies and the intended spins. Our goal was to hit a run rate of $500 million in cost synergies by the end of 2017. We exceeded this goal.

We executed projects with run rate savings of more than $800 million at the end of the year. In fact, about 75% of our synergy projects have now been launched. And as a result of that quick start, our realized savings in the fourth quarter were more than $200 million.

Today we are pleased to announce that we have raised our cost synergy commitment to 3.3 billion, up 10% versus our original plan. The lion’s share of the increase reflects upside from procurement.

Our procurements teams have worked across DowDuPont together, billing contract-by-contract to identify savings opportunity and have been incentivized to deliver and lock in the highest possible savings. Here is how the new synergy commitment breaks down by division.

We see 1.1 billion coming from AG, $1.235 billion from the materials and $965 million from specialty product. Finally, on Slide 5, I will update you on our timeline for the separations and intended spins. Based on our progress this past quarter, we identified ways to accelerate the spin timing.

We no longer expect our spins to take up to 24 months from merge date. Rather we now expect to complete the separations about 14 to 16 months from today. We anticipate materials science separating first by the end of the first quarter of 2019 and we expect agriculture and specialty products to separate shortly after that by June 1, 2019.

The next steps as you can see include allocating assets and liabilities to each of the independent companies we are standing up in such a way that we achieve the desired credit ratings and that we can compete well with the peers and our respective industries. I'll keep you apprised of our efforts with this timeline on each of our earnings calls.

In addition, you will be able to see our progress when we file the initial form 10s this fall when they go effective about six months later subject to SEC approval and when we launch our equity road shows before listing the securities. In summary, our businesses are performing well.

The spins are anticipated to occur in only 14 to 16 months from today. And meanwhile, we are taking up our cost synergy number to $3.3 billion.

We are excited about the opportunity ahead for our company and for our shareholders as we create these three companies, each focused on serving specific growth industries with more agility and lower cost structures. With more than $4 billion combined in cost and growth synergies, we feel very much in control of our future.

Now, let me turn the call over to Howard to review our financial results in more detail..

Thanks, Ed. Moving to Slide 6 and a summary of our fourth quarter results. As Ed mentioned, we closed the year with strong financial performance, achieving double-digit top and bottom-line growth.

Drivers of the EPS increase include strong business results, quick actions to capture cost synergies, contributions from new capacity additions, improved equity earnings and a benefit from lower pension and OPEB costs with approximately two thirds of these costs in the Specialty Products segment.

Our double-digit sales increase was driven by broad based volume growth in all operating segments and geographies and price gains in all geographies. Volume grew 6% on strong consumer demand across all of our key end markets.

From a geography perspective, we saw particular strength in EMEA driven by the continued ramp up of Sadara and in Asia Pacific also due to the contributions from Sadara as well as strong demand for Electronics & Imaging.

Local price rose 5% as we drove pricing initiatives in all geographies in response to higher raw material cost and tighter supply demand fundamentals. Equity earnings increase led by improved results from Sadara and increased earnings from Hemlock Semiconductor.

And as Ed mentioned, we delivered great early progress on our cost synergies through to the bottom-line. These gains translated to operating EBITDA of $3.9 billion in the quarter. Cash flow from operations in the quarter was $4.2 billion driven by increased cash earnings and AG seasonal cash inflow partly offset by contributions to pension plan.

And we have returned nearly $2 billion of cash to our owners, which included $1 billion of share repurchases. Turning to the drivers of our tax rate as well as our 2018 guidance in light of U.S. tax reform.

This quarter's operating tax rate was 18%, which was lower than our model and guidance primarily due to our geographic mix of earnings, and benefits from changes in tax rate in certain foreign jurisdictions. We will also see that we recognized the net tax benefit of $1.1 billion resulting from the new tax legislation.

This benefit is based on two pieces. The first is a gain of $2.7 billion, which was primarily driven by the remeasurement of our deferred tax assets and liabilities.

This net benefit was principally due to the purchase accounting step-up as a result of the merger, which was partially offset by a $1.6 billion charge for our foreign unrepatriated earnings. Looking ahead, we expect the U.S. tax reform to lower our 2018 tax rate by 1 to 2 percentage points to a range of 20% to 23%.

Now, turning to our segment results, starting with AG on Slide 7. In a tough AG market, our business grew delivering gains in the quarter and for the full-year. In the fourth quarter, operating EBITDA more than doubled to $224 million primarily driven by cost synergies, volume increases, and a net portfolio gain.

Sales growth was realized in both seed and crop protection. Seed volume and price rose on earlier Brazil Safrinha deliveries, doubling of corn sales in Argentina driven by penetration of Leptra corn hybrids and growth in the European sunflower and corn seed business.

Crop protection volume increased, driven primarily by the continued penetration of new products such as Vessarya fungicide and increased demand from Optinyte nitrogen stabilizers. Volume growth was offset by pricing declines driven by generic pricing pressure, specifically in Latin America and Asia Pacific.

Looking ahead for AG, we anticipate full-year sales to increase in the mid single-digit percent range and operating EBITDA to increase in the high teens percentage range. For the year, we expect to deliver top and bottom-line growth driven by new product introductions and cost synergy deliveries.

We estimate first half sales and operating EBITDA to be about equal to last year, which is in line with the estimated corn area planted in North America in 2018 and reflective of the challenging price environment. We anticipate about 45% of the first half results landing in the first quarter and 55% in the second quarter.

We also anticipate a ramp in our cost synergy realization in the second half and expect our new product introductions to be fully ramped and contributing to growth in the latter half of the year. Turning to Materials Science on Slide 8.

Performance Materials & Coatings operating EBITDA increased to $613 million, up from pro forma operating EBITDA of $392 million, primarily due to increased pricing, higher equity earnings, strong end-market demand and cost synergies.

Consumer Solutions delivered double-digit sales growth in all geographies, driven by strong gains in local price in Asia Pacific and EMEA. Industrial Intermediates & Infrastructure operating EBITDA rose to $677 million, up from pro forma operating EBITDA of $489 million on pricing momentum, improved equity earnings, demand growth and cost synergies.

Polyurethanes & CAV benefited from strong demand and price increases in downstream systems applications as well as from tight MDI fundamentals. Industrial Solutions achieved double-digit sales growth, led by demand in electronic processing, crop defense, and food and pharmaceuticals.

The Packaging & Specialty Plastics segment reported operating EBITDA of $1.3 billion, flat with pro forma operating EBITDA in the year-ago period. Price and volume gains offset increased feedstock costs, production and cost impacts from hurricane-related disruptions, maintenance activities as well as commissioning and start-up costs.

The Packaging & Specialty Plastics business delivered double-digit sales growth in food and specialty packaging as well as in industrial and consumer packaging in EMEA. Volume growth in North America was driven by robust demand in food and specialty packaging as well as in health and hygiene applications.

Looking ahead, the business continues to advance the next tranches of growth. Our Nordel EPDM facility is mechanically complete and well into commissioning activities.

In fact, the unit just recently produced its first prime material and will spend the remainder of the first quarter ramping to race and qualifying product with customers, reaching full start-up by the end of the first quarter.

Additionally, our new low-density polyethylene unit is also mechanically complete and we expect it to be started up by the end of our first quarter. Moving to specialty products on Slide 9, Electronics & Imaging achieved operating EBITDA of $367 million up from pro forma operating EBITDA of $331 million.

Volume growth in cost synergies more than offset hurricane related costs, a negative impact from portfolio and higher raw material costs. Growth in the segment was driven by double-digit volume gains in consumer electronics, industrial and semiconductor end-markets.

Nutrition and biosciences reported operating EBITDA of $352 million up from pro forma operating EBITDA of $309 million primarily driven by a portfolio of benefit cost synergies and volume growth.

Volume gains were led by increased demand for bioactives, continued growth in probiotics, demand for microbial control solutions and energy markets and growth in pharmaceuticals. Transportation and advanced polymer's operating EBITDA increased to $365 million, up from pro forma operating EBITDA of $276 million.

Benefits from volume gains, improved local price and cost synergies more than offset higher raw material costs, double-digit sales growth was led by strong demand from the automotive, electrics and industrial markets.

Safety and construction achieved operating EBITDA of $285 million up from pro forma operating EBITDA of $227 million, on broad based volume growth including solid demand across industrial markets, construction and medical packaging.

Looking ahead to the full-year for this -, we see continued strong market demand, namely from semiconductor, nutrition, construction and automotive markets. We plan to continue to add capacity in higher growth areas where we offer compelling customer benefits.

We are talking to customers about our enhanced offerings, based on the portfolio realignment and are making good progress with the cost synergy delivery plans, resulting in gross margin expansion in all four segments.

We see top-line growth for the group at global GDP are better, led by nutrition and biosciences which will benefit from a full-year of the FMC business and gains in safety and construction.

Turning to our modeling guidance on Slide 10, starting with our first quarter outlook, we expect continued healthy demand as well as pricing gains across most of our businesses. At the Company level, we expect net sales to be in the range of $20.5 billion to $21.3 billion.

Operating EBITDA is expected to be in the range of $4.6 billion to $4.8 billion. First quarter results in the Ag segment will be impacted by a timing shift of sales into the second quarter resulting from an expected delay in farmers' final planting decisions in North America.

The quarterly results will also be negatively impacted by an expected unfavorable product mix in the Brazil Safrinha season driven by the delayed summer season harvest. Excluding the AG segment DowDuPont's first quarter sales and operating EBITDA are expected to increase 8% and 13% year-over-year respectively.

Volume gains, pricing momentum, cost synergies and lower pension OPEB costs are anticipated to more than offset higher feedstock cost. On the U.S. Gulf Coast, recent severe winter weather has caused operational and logistics issues across the industry.

We expect this to translate into a headwind of $50 million to $70 million for the material science portfolio, which will be partly offset by the earnings contributions from the U.S. Gulf Coast startups. I also encourage you to refer to Slide 18 in the appendix for the future commentary on our segment outlook for the first quarter.

Next I'll briefly outline our expectations for the full-year 2017 which you will find on Slide 11. We expect top-line growth in the mid-single digit percent driven by continued healthy demand in our core end markets.

We expect EPS growth in the mid to high-teens percent on improved business results including contributions from new capacity additions, cost synergies and lower pension OPEB costs. Higher interest expense related to our growth projects coming online will be partly offset by the tailwind from lower tax rate.

Finally, I would like to end with some comments on Sadara, on Slide 12. In 2017, the JV made significant strides bringing all 26 units at the world class site online. In the fourth quarter Sadara steadily ramped up its asset and tested the site’s full integration.

The JV’s strong operational performance gives us confidence as we move towards to the next step, the lender reliability test. Sadara is planning to conduct test runs in the coming months and expect to be ready for a full LRT late this year or early next year. Here are some points on the scale and breadth we have already achieved.

In 2017 Sadara produced four billion more pounds of product than 2016. Sadara’s polyethylene has already been supplied to more than 700 customers in 71 countries. The year derivatives are ramping up with products already delivered to 240 customers in 50 countries.

And in the isocyanate chain, Sadara has delivered MDI to nearly 200 customers in almost 40 countries and TDI sales are just beginning. Sadara is well positioned to meet the strong consumer led growth drivers in the emerging regions of Asia, Eastern Europe, India and Africa.

Financially, in 2017, the JV performed in line or better than the guidance we provided in terms of its contributions to material sciences revenue, EBITDA and cash flow. As we look to 2018 and the JV enters its first year of all commercial operations, we see $200 million tailwind to EBITDA from Sadara on a year-over-year basis.

This is an important step for the long-term profitability of this JV and it shows that the JV is making solid progress in spite of the underlying factors that have changed since both partners authorize the project. Sadara with oversight from both partners is implementing an action plan that aligns to these new reality.

And that’s why we and our partner remain fully committed to this growth investment in the long-term average annual contribution from Sadara which we still see is about 400 million a year over the cycle. As we look ahead, Sadara will continue executing its go forward action plan.

This includes further ramping operating rates, selling out and optimizing the product mix, scaling down start-up and commissioning and preparing the site and our teams for LRT activities. With that, I will turn the call over to Andrew..

Thank you, Howard. On Slide 13, I want to start by acknowledging the incredible progress our teams and our Board have together achieved in just five short months. We are already demonstrating the value creation potential of this historic merge and spin transaction. Here are the headlines since closing the merger on September 1.

We realigned the portfolio, further positioning intended spins for long-term competitive advantage and sustainable growth, with unanimous Board approval, just 12 days after merger closed. All remedy actions required to close the merger were completed on target.

Our Board announced dividend and buyback plan, and we initially began returning cash to our owners with nearly $2 billion returned in the fourth quarter alone. We rapidly made progress to get to our cost synergy commitment.

As Ed and Howard mentioned, we exited the quarter ahead of our run rate commitment and are already seeing cost reductions hit the bottom-line, and our confidence led us to increase our synergy commitment now to $3.3 billion.

On the spin timing we announced today an accelerated timeline to unlock three world class companies, with material science spinning first, followed shortly after by the separation of agriculture and specialty products.

And last but not least, we remain squarely focused on operational discipline, commercial excellence and hedge our business management delivering double-digit top and bottom-line growth this year.

In sum, it was a breakthrough year for DowDuPont and our stakeholders, one where we delivered on all of our financial, strategic, and operational commitments. On Slide 14, I want to take a broader view of the growth investments in our control as we work through the steps of this transaction.

Our three divisions are capitalizing on a series of strategic investments in their core end markets and continuing to expand our portfolio to meet rising consumer demand. First, in AG, we successfully launched Enlist cotton in 2017 and achieved approval to enable the full launch of Enlist corn in the U.S. and Canada for the 2018 growing season.

We also completed the acquisition of Granular, which will further position us to help grow us enhance their business. Looking ahead, our combined AG pipeline is stronger than ever and we expect to launch 21 new products in the next five years equally balanced between seeds and crop protection.

In Materials Science, we will continue to capture growth from our capacity expansions in the Middle East and on the U.S. gulf coast. We are bringing on the industry's broadest and most differentiated derivative slate at a time when demand for our products and technologies is robust around the globe.

And finally in Specialty Products, we are adding capacity in higher growth end markets to meet increasing demand from our customers. For example, Electronics & Imaging is bringing on additional capacity with CMP pad production at a time when demand for our unique capabilities is very strong.

In Nutrition & Health, we are expanding capacity in robotics enabling us to strengthen our position as an industry leader and allowing for an increased pace of new product development. And for Transportation & Advanced Polymers, we are adding extrusion capacity to reflect trends in the automotive sector.

These growth investments and many others in our playbook positioned each intended spin for enhanced earnings growth and cash flow generation as well as further strengthen their long-term competitive advantages. With that, I will turn to our near-term outlook on Slide 15.

Throughout much of the world, economic expansion has gained momentum, driven in the large parts by robust and upbeat fundamental in consumer and business confidence, employment, and wage growth and manufacturing our infrastructure investment activity.

In fact, for the first time in many years we are seeing broad based synchronous growth around the world. In developed economies in particular, we continued to see strong leading indicators of broad based and sustainable growth.

In addition, we see the comprehensive tax reform in the United States as a catalyst for increased domestic capital investment, which will take advantage of enhanced competitiveness and pro-business investment incentives.

We are also bullish on developing economics with the emerging middle class in India, China, Africa and the Middle East continued to support sustainable growth.

We are mindful that volatility and uncertainty remained in this environment and there are select sectors, where we are cautious most notably AG as we see soft market fundamentals persisting in the near-term.

But on the whole, we are optimistic about the products and technologies within DowDuPont's portfolio, which are well positioned to meet growing needs in our core end markets. I will close with our priorities going forward on Slide 16.

Simply put, they are delivering greater earnings and cash flow growth, achieving our cost and growth synergy commitments and driving towards standing up and separating the intended companies.

All three of these priorities are shared by your board with the focus of the board squarely on delivering the increased synergies, achieving all the milestones in spin timing, ensuring the capital structure of the intended spin such that each can achieve their targeted credit ratings and driving the accelerated spin timeline that we showed you today.

The board and management team have never been more confident in the teams we have in place to deliver against our key priorities. Our pathway is clear and we have our hands on all the value creating levers.

We are creating three industry leading companies, focused and agile organizations ready to adapt at the speed of business today and with vast growth potential benefiting our customers, communities, employers – employees and shareholders alike. With that, I will now turn it to Neal to open the Q&A..

Thank you, Andrew. With that, let’s move on to your questions. First, I would like to remind you that our forward-looking statements apply to both our prepared remarks and the following Q&A.

Rachelle, would you please provide the Q&A instructions?.

[Operator Instructions]. And our first question today will come from David Begleiter with Deutsche Bank..

Hey. Good morning.

Ed and Andrew, on the synergies, do you believe there is further upside potential on the cost synergies and any further update or confidence on realizing the growth synergies over the next couple of years?.

Yes, this is Ed. On the synergy front look, I feel really good about where we got here with the extra $300 million. Look , we are going to be still looking over the next six, seven months for any other synergies we have and I will see where we end up, I don’t want to pre-comment on that. But I will say two things.

Our procurement teams are still working very hard and they are not through everything yet, but they did hit the bigger items first, so just to give you a little perspective. And There is an awful lot of work going on with Marc Doyle and his team on the SpecCo side simply because so many end-market businesses came together with Dow and DuPont.

So we are still taking a really hard look there. So that would be the opportunities, we are still testing as we go down the road. But I will tell you just to the second part of your question, we have really moved more to the growth synergy focus now.

Marc on the SpecCo side has all the teams now getting together now that we are managed as one business from both the Dow side integrated in with the DuPont side and we are really working through a whole list of great action items there for growth.

So, I think you’re just going to see a lot more opportunities in SpecCo than we simply would have had before when we realigned the whole portfolio. And my gut is David by time on the next earnings call; we will be talking a lot more specifics with you about where we see our biggest growth opportunities from putting these businesses together.

And of course, we have talked on the AG side. There is huge amount of opportunity there just because of the different channels to market that we have, and Jim Collins and the teams have already played extensive work into that because those teams have been together for over a year now talking about these type of things.

So again, we will talk more about that next quarter. But that’s where the excitement inside the company will now turn to once we lock down of what is the final cost synergy number, let’s really just get focused now on the growth side of that..

And next to move on to P.J. Juvekar with Citigroup..

Yes. Good morning. A question on AG. You mentioned price declines in crop chemicals due to generic pressure. Can you be more specific on that, which can be insecticides, herbicides. And then what is the risk that this pricing pressure comes to the U.S.

this spring?.

Hey good morning PJ, it's Jim. Yes, specifically in the fourth quarter we mentioned some price pressure primarily generic and that's really coming out of Latin America and mostly aimed at fungicide portfolio. Some of the [indiscernible] derivatives that we sold, we sold both the straight [indiscernible] and several mixtures in that marketplace.

And some of those straight molecules came under a little bit of stress. So when I think about pricing pressure and some leakage as you suggested into North America, we are really are not seeing as much on the chemistry side as we are likely have feel in the seed side due to the pretty aggressive competitive pressure out there.

And just really tough market for growers with commodity prices and a trending where they are. We are expecting as Howard said in his comments, that it's going to be a tough fill here as we start out the year..

And next we will hear from Jeff Zekauskas with JPMorgan..

Hi, good morning. I have a two part question. In your guidance you say that the cost synergies year-over-year are about $1 billion benefit, and so if you not doubt about 250 in 2017 that's about $1.25 billion. So that means you have got $2 billion more to go in order to get to your target.

Why is the number for 2018 such small relative to the total? Second question is your cash flow from operations was $4.2 billion. But last year, Dow and DuPont each combined generated $6.3 billion cash flow.

So what was the amount of your non-recurring charges -cash in the fourth quarter so we can head them back to the $4.2 billion?.

Yes let me hit the cost synergy and maybe turn it over to Howards on the cash piece. Remember, there is run rate synergies and then synergies captured within the period. So we are on a very significant ramp as we said we did over $200 million that we have got in the quarter, but we actually exited at a $800 million run-rate.

Now remember, when we track all of our synergies as when we accomplished the task and is done, and then what will happen Jeff is some of these takes six ,seven, eight months to kick in. I will just give you two examples, I think just they are easy to understand, but I could give you 20 of them.

We are doing a lot of rooftop consolidation, and by the way even more announced SpecCo than we are planning because if everything coming together. And by the time we get out of leases or maybe sell one of the properties consolidate into either a Dow or DuPont location.

You are kind of - some of these projects - we are tracking them and then how long they are going to take, they take some months.

And by the way another easy one it happens to be a fairly decent number for us is on a current track manufacturing side, we are making a lot of moves on the contract manufacturing side, but we have contracts in place that could be another four, five, six months before it ends with a contractor and we make our move.

So again we are tracking every one of them in detail, but that's why you will see as we exit even this next calendar year 2018. You will see a very high run rate or ramp at the end of 2018, but of course you won't see that same number actually hit and fall within the year.

And so we will give you both numbers both times, but you will by the time we get the 2019 most of this is kicking in and we will be on the tail end of it. Literally as I said 75% of the projects are already launched, so we are really in flick of it right now and you just got to give it some months in many of these cases to actually kick into place.

And don’t forget one of the other big delays and we have already taken a bunch of these actions is on the AG side also where it takes a planting season to actually realize the savings.

So a lot of Jim Collins bigger moves like the seed production consolidation from third-parties internally to an old heritage DuPont product facility, you won’t see until you get into the next year. But again, we will keep you posted on what actions we have taken and then try to give you a lot of clarity around in period versus run rate..

Hey, Jeff. This is Howard. On the cash from ops, good question and you’re right to target areas that you did. You know because of the merger, we don’t have any pro forma statements on cash flow.

But when you do an apples-to-apples look, our cash from ops is actually up almost $1.5 billion versus the same quarter a year ago when you strip out some of those one-time items. So nearly a 30% increase in the cash from ops on an apples-to-apples basis versus same quarter a year ago..

And next to move on to Vincent Andrews with Morgan Stanley..

Thank you. And good morning, everyone. Ed, I’m just wondering if the change in U.S.

tax rates has impacted your calculus at all in terms of the strategic opportunities that might be available at Specialty Co and I guess what I mean by that is, obviously one scenario is simply that the wait and see, at what multiples Specialty Co will trade at in late 2019 post the two spins.

But given elevated peer equity multiples today and now at lower tax rates, just kind of wondering if M&A may be more appealing in terms of crystallizing multiples today versus kind of do reverse Morris Trust or other more tax efficient structures that would likely take more time and therefore encounter risk as where equity market multiples might evolve to? Thanks..

That’s a loaded question. By the way just in general on tax reform, I mean you saw the benefit we are getting from that one to two points in the factory, actually [indiscernible] DuPont it would even be a bigger percent probably double that just for background.

But I just mentioned a couple of points so that we are clear on this, we do have a decent amount of overseas cash between the merge company, I think it’s $12.2 billion out of our $13.5 billion literally.

But what we are obviously going through right now is about all the beginning of - moving all the liabilities around and see how we get to the ratings that we want with the rating agencies for the three businesses.

So our teams right now are in a little different mode than a typical company because we are really now looking at what does each of the three companies need to maintaining overseas cash, especially based on the SpecCo realignment of the portfolio.

So what do we actually need to leave overseas to run of international operations and where, and then what do we have that we want to bring back et cetera, vis-à-vis based on the ratings that we want also. So that whole exercise is going on right now with our treasury and finance teams throughout the Company.

But to your point on SpecCo, look, SpecCo has always had a lot of optionality to it and what we can do to create shareholder value.

One of the things I love about it, just the way it’s configured now, I love it, because I think it comps extremely well against the best peer companies in that sector and I don’t mind saying their names on the phone the Honeywell and the 3M. Our EBITDA margins by the end of this year will be right on top of the best of those two.

Our CapEx spend is about 4% to 5% of sales which is right on top of best-in-class peer which should allude to a great ROIC for the business done right. Our R&D is about in line with where those peer companies are. So just the way the portfolio was configured now.

I think we sit really pretty as people start to understand it more the power of what we have put together, I think it should be afforded a multiple in the range of those companies.

Having said that, we will always look at the best shareholder creation steps we can take and these are for any companies within a SpecCo and we will certainly look at that as we go down the road. Don't expect anything for us to be doing stuff now.

We are literally just integrating thousands of people together in businesses, and we want to get back right and be very comfortable that we are positioned and then we will look at all our options..

And next we will move to Hassan Ahmed with Alembic Global..

Good morning guys. A bit of an interesting here obviously on the ethylene, polyethylene side of things. Obviously as I see it a couple of moving parts and then you obviously have the U.S. capacity coming online, which should be a headwind.

But on the other side, a lot of charter around China pollution related curves and now obviously, the latest and greatest news about China sort of banning the import of solid plastic waste. So just wanted to sort of get a sense of how you're thinking about the nearer term 2018 side of things within the global ethylene, polyethylene market..

Good morning Hassan, this is James, sorry about the voice. Yes, I think we now look for growth and be a still solid and about 3.7% growth rate as we look forward. China obviously has continued to grow actually; the emerging markets are continuing to grow.

So while new polyethylene capacity has come on in the U.S., not enough has come on really to keep up with the market growth rate. And if you look at what is happening right now actually ethylene is longer than polyethylene in the Gulf Coast. We don't have enough plans right now in the Gulf Coast to convert it also.

I think you're going to see things are going to be a lot more balanced in 2018 and 2019 and people anticipate. The recycling bans are having some impacts in some countries. As I probably hear more noise about that in Europe, where places like Germany have no place to move materials and it’s backing up to both PET and polyethylene.

And of course, there is no place to incinerate in Europe, the incinerators are all full. But all that said, I'm not sure that has a very big effect on the leverage and PE growth rate. Most of that recycling is going to move to another country and some of them is moving to Southeast Asia right now.

Your point on China though in terms of carbon and emission is very true. For several years, their emissions have gone down from burning less coal last year they rose. There are a lot of concerns about that you have seen a lot of pressures being put on.

They need to sustain negative coal burning rates like negative 1% per year to actually have an impact on pollution and the way you see that is the big pull that's coming on LNG into China.

They are going to have to increase LNG import something like at the rate of 17% to 19% per year and the China keep the pressure on coal and to keep the pollution down. Right now, MTO in China is out of the money by about $150 a ton, those operating rates are low.

So all these dynamics I think are very favorable for us as we look forward with this new capacity coming on in the U.S. gulf and two more furnaces for TX-9 and a couple of new plants; one in Europe and one in the U.S. Gulf Coast in the next couple of years..

And I would just add Jim, Middle East, we have said this many times that the supply side is pent upped there with lack of wet gas.

And so many of the Middle East producers including our friends at Aramco are now looking at ways to get liquids into the ethylene mix, which means a hell of a lot of byproducts, and you’re going to have to move a whole lot of other type of materials.

So the CapEx upside of that as well as the multiple products will slow down supply from the Middle East. So, I think that our asset is well timed from the last based on [ridgy] (Ph) thing and I think that adds to the point on supply side.

So we have always said this cycle looks more like a ridge and we see nothing that’s going to stop that for at least foreseeable years..

And next to move to John Roberts with UBS..

Thank you. I think the guidance for the fourth quarter for Performance Materials & Industrial Intermediates, EBITDA growth was 10% to 15% in that range, you loop through your guidance.

So maybe, you could give us just a rough bridge of the guidance versus the results, where was the upside versus what you are expecting?.

Yes, John. So, our revenue was up 15% versus same quarter last year and all businesses and all those were up. Prices up 10%, volume was up 4% and consumer solutions tranches up 9% and it was up revenue 14%.

Even Monomers & Coatings was up on price by 10% and volume up 4%, and that was led by North America and Asia Pacific, and the construction outlook there continues to be good. Look, we have downstream demand across all the silicones markets and application, but I think that’s true as well for Marc’s businesses.

The acrylic operating rates have been better. MMA is still tight and I expect it to be tight through the first half [indiscernible] looks like it’s going to be tight through 2020. The acrylic operating rates are much better.

So, I think all of that’s been very constructive and we have seen everything moving in the right direction, which I think looks to be..

And next we will hear from Christopher Parkinson with Credit Suisse..

Thank you. So you’re already actually in a pretty solid fashion across Specialty Co in regard to synergies as well as taking some portfolio actions on some lower return businesses albeit some smaller ones.

But last quarter you also discussed what you referred to as your playbook to deliver the $1 billion in revenue synergies, in which you mentioned Health & Nutrition as well as in acquisition of FMC. Can you just give us a little more color on both of these fronts and as well as what your ultimate long-term goals are? Thank you..

Yes. Let me hit the first part on the portfolio and let Marc talk about some of the growth initiatives, which he has really been digging into with his team.

We have already done our full analysis on the portfolio and there clearly are parts of the portfolio like you expect from a business diverse like that, that we would want to exit and monetize the asset.

In the ballpark you would pull on that, it would be somewhere between 5% and 10% of the portfolio or things we would take a look at and they just don’t fit our strategic focus and by the way, our EBITDA margins will actually go up bit closer on the lower end of our averages in a couple of cases very significantly. So that cleanup will be important.

We will try to accomplish some of that this year. We got it gated a little bit by the stress on our financial teams doing the spins. But we know kind of what we want to do from that end.

And one thing, we have I think talked about pretty extensively to keep in mind, there is clearly some of that we wanted to do in the nutrition and health side, because we have got four, five really big growth areas there, but we have a few that are a little more in the commoditized side that we would want to clean up.

So that's the one specific area we want to get to. But Marc, let's talk about some of the growth things you're working on..

Yes thanks Ed, and thanks Chris for the question. Just focusing on N&B as a starting point and as you referenced that. The general theme here is focusing on the segments that we think have really attractive long-term growth potential and particularly the combinations that we put together in Specialty Co.

And so as an example within N&B, the traditional N&H business has now created a pharmaceutical recipient business that's really unrivaled. The combination of the FMC business in that's space on the Dow business in that space.

And we did complete the integration of that business together, it's been launched now throughout in the market talking to channel partners and finding a lot of opportunities to grow faster, because we have just got a very unrivaled portfolio now of products in that space and it's a pretty attractive long-term growth space.

And then I would also mentioned of course that doubling down in the growth investment in some of the other real horses like the probiotics business, which has been growing double-digits now for several years and is really reaching an appreciable scale. And so just maybe one final comment, you asked about the playbook for innovation.

It's really around portfolio management, shifting the focus to these higher growth segment, it's about ensuring that we are leveraging best practices across all of the specialty businesses and it's about putting in place direct culture of focused on innovation, customers and market knowledge.

And so these things are the levers that we will play out over the next couple of years to pick up the growth rate of the whole division..

And next we move on to Frank Mitsch with Wells Fargo Securities..

Hi, good morning gentlemen and get well soon Mr. Fitterling. Howard as I think about your share buyback program. You guys said $4 billion was kind of a first tranche that you wanted to get out there. You did a $1 billion in buybacks in Q4.

Your guidance for fiscal calendar 2018 is $5 million shares lower than for first quarter 2018 which seems kind alike. Can you please enlighten me on what is your strategy is there and might we see it upsized et cetera.

What is the pace we should be thinking about?.

Frank good morning. I'm not sure I can enlighten you, but I really answer to your question, how you're doing. What I would say is we did a $1 billion in the fourth quarter. As we think about Q1 I would say you should think about that same rate of the first quarter is another $1 billion.

Of course we are going to continue to be opportunistic as we were in the fourth quarter.

Remember that and Ed made a comment on earlier question I mean we are working on the capital structure of all three companies and that's the work that we have to do through the balance of this year until we get each of the new divisions rated, we don't have broad access for the debt capital markets, so we want to maintain financial flexibility, and I would say prudent levels of liquidity.

But with that said, we are going to continue to be opportunistic. And don't forget in terms of the guidance, you have got a time - a weighted average effect right, because you're not buying in the first month of the every quarters.

So you are basically doing it in a lag basis because of when we report earnings and the open window versus the prior period..

And next we move on to Steve Byrne with Bank of America..

Thank you.

Given your comment about challenging fundamentals in AG, do you expect more traction in your financing program to those growers that buy both seed and chemicals given your broader platform in those products now? And any update on the use of the Mycogen brand throughout that retail channel, are you planning to expand that? And then just lastly, any update on Chinese import approval on Enlist soy when do you think you might be able to launch that?.

Great, Steve. Thanks for the questions.

On your first part, you are right, around our programs and our offering, it’s a little bit early in that North America season to connecting point just what the uptake might look like, our TruChoice program that we have out there I think is one of the most competitive in the industry and it does a nice job of rewarding loyalty and opportunity for our broad set of customers across the North American continent to participate appropriately.

So we are excited about that. Your third question was around Enlist soy, and as we talked about before, we feel like we are the next on in the queue for solutions around that with Chinese regulators, we have complied and supplied all of the documentation and information that’s required and have had some really good dialogue.

Enlist soy along with Qrome represent a pretty substantial opportunity for us in the seed business for growth for the future. So we are quite interested in getting those approved. And we are monitoring that very, very carefully.

Your second question was around the Mycogen brand, and Mycogen brand has a spot of nice opportunity in the retail and distribution marketplace.

And as I said before, I have talked about this, this gives us a unique opportunity to penetrate more into that space by putting more and better genetics in those bags upping our gain there and leveraging kind of a multi brand, multi-channel now approach.

So yes, we are excited about the Mycogen brand and stay tuned as you see us move forward through the latter part of 2018 and into 2019. We will be refining that multi-channel multi brand strategy not only in North America, but you will see additional brands in Europe and in Latin America to kind of round up that offer..

Yes let me just add on the AG piece because you have mentioned a top AG market. Just to put this in perspective, last year we grew the revenue line low single-digits and we had double-digit earnings growth in the AG business, between both the Dow and the DuPont portfolio.

We are forecasting this year that we are going to have mid single-digit revenue growth and high teens earnings growth which certainly doesn’t make me feel bad. And probably it’s driven by two core factors, there is more than this, but if you look at it high level, a lot of our synergies kick-in in the second half of the year in AG.

So that’s something within our own control and Jim has a lot of product launches that are kicking in that we expect for the second half of the year and those two really drive the results for us. So yes we get choppy quarter-to-quarter because of the shift in the AG business.

But when you look at the whole year picture and the whole planting season, we think we are keying up for a nice year in a tough market that’s probably going to be flat but we are feeling good about our positioning..

And we will move on to Peter Butler with [Glen Hill Investments] (Ph)..

Hey. Good morning. I guess I have one question relating to your balance sheet. If you're successful in consummating all the deals that you might be contemplating now.

What might your balance sheet look like just before you start the spinoffs with material?.

So Peter, this is Howard. I'll take a stand at the question. I mean what we are working on now is really setting up these three separate publicly traded companies all for growth - all with more focus and the ability to move faster.

We are pretty clear that target credit metrics and credit profiles that we are working on the Materials Science should look like Dow in the fourth quarter of 2015. The AG Company should look like DuPont in the fourth quarter of 2015 and we have set investment grade for the Specialty division.

So we are setting up pretty strong investment grade companies that will all be focused on growth and obviously, I think Ed mentioned it in his prepared remarks, but we are working on the assets and liabilities, and the pensions and the cash and the debt.

And so that's the work that we have in front of us and you will be hearing more as the timeline slide in the deck shows, you will be hearing more as we get through the next several quarters through the end of 2018..

I guess the punch line is we are highly confident though. We are going to get to the credit ratings we want, because we already know in aggregate what we have and we are going to fortunate to get to where we need to be. So it's not a while we just got a lot of hard lifting to do, we get it all the right places..

And so I think as you said in your script, we are in control of the cost synergies. We have the playbook, they add details. We know when that will hit, we know the lag lead on AG, we know that that number is in our imminent future. And now, we are getting the growth synergy conversation the earlier question deeply within all three divisions.

So when you look at the go-forward 12 months in front of us here before we get the spin, the abilities ahead you lift on cost synergies and get the growth synergy platform, will give us three robust balance sheets to enable us to go through more work on growth or share buyback or both most likely..

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

Great. Thanks good morning. Just a question on the guidance here. I just wanted to confirm, did you say that Q1 EBITDA will be up 13% year-on-year ex some of the onetime items.

And Q1 is usually your strongest EBITDA quarter? Is that going to be the case in 2018 given typical AG segment seasonality, or do you expect something different in 2018?.

Well. Let me just hit one point, we are going to have a little bit of a different flow this year, because we have such significant cost synergies kicking in which obviously drops rate to our EBITDA line.

So that's a little different than just running our normal seasonality in the business, so just keep that in perspective, but just let me turn it over to Howard..

Yes. I would just say that operating EBITDA and what you see on the modeling side ex-AG up 13%. When you include AG, because of the seasonal shift that James talked about, Ed has talked about between Q1 and Q2 it's obviously lower than that, but 4.6 to 4.8 is the guidance we are giving for operating EBITDA for Q1 for the company..

And next we move to Jonas Oxgaard with Bernstein..

Good morning guys. I'm trying to understand the guidance now the full-year guidance for – talking especially plastics. Now, I realized some of the records saying the guidance to commodities with few trials.

But in spite of flat sales and yet in the very page, you talked about $1.5 billion extra revenue from Sadara, TX-9 derivatives are going to be in line, crude at $50 higher than it was in 2017 average.

So why class sales?.

Yes, Jonas. This is Jim, a couple of things if you looked at where we were in the fourth quarter, one of the things that was in the fourth quarter numbers was a pretty high amount of ethylene and hydrocarbons byproduct sales.

If you remember we came out of the hurricane and we actually were running pretty well, most of our competitors were having some trouble with the crackers, but our crackers were running and some of the polyethylene plants were down, we had [indiscernible (0:37)] for example.

So we had a little bit different mix than we usually had with more hydrocarbon sales. Our view going forward is, we will have less of that next year. I think we will have a lighter crack slate next year, which means less byproducts in Europe. In this year, we had a big season in Europe, butadiene prices spike.

And so I think that’s going to come off a little bit. We are going to have higher hydrocarbon costs through the year. So we are anticipating we will be able to keep up with that. But we are not anticipating a huge margin improvement on that. And we have got some start-up costs in the first part of the year.

So I think in general and you’re right, the plastics business volumes are going to increase, but the hydrocarbon byproduct sales and the ethylene sales are going to come down a bit. And with the lighter crack slate, it will be a little bit less advantageous in Europe for us for byproduct sales..

And that is all the time we do have for questions. I would now like to turn the call back over to Mr. Neal Sheorey for any additional or closing remarks..

Thank you, Rachelle. And thank you everyone for joining our call. We appreciate your interest in DowDuPont. For your reference, a copy of our transcript will be posted on DowDuPont's website later today. This concludes our call. Thank you very much..

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