UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q



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

For the quarterly period ended March 31, ~~2016~~2017



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

Commission File Number 1-815

E. I. du Pont de Nemours and Company

(Exact Name of Registrant as Specified in Its Charter)



Delaware		51-0014090
(State or other Jurisdiction of		(I.R.S. Employer
Incorporation or Organization)		Identification No.)

974 Centre Road, Wilmington, Delaware 19805

(Address of Principal Executive Offices)

(302) 774-1000

(Registrant’s Telephone Number)

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 x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that registrant was required to submit and post such files.) Yes x No o

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



Large Accelerated Filer x		Accelerated Filer o

Non-Accelerated Filer o		Smaller reporting company o

		Emerging growth company o

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. o

Indicate by check mark whether the ~~Registrant~~registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes o No x

The Registrant had ~~873,512,000~~867,032,000 shares (excludes 87,041,000 shares of treasury stock) of common stock, $0.30 par value, outstanding at April ~~15, 2016.~~17, 2017.

Table of Contents

E. I. DU PONT DE NEMOURS AND COMPANY

Table of Contents

The terms “DuPont” or the “company” as used herein refer to E. I. du Pont de Nemours and Company and its consolidated subsidiaries, or to E. I. du Pont de Nemours and Company, as the context may indicate.



			Page
Part I	Financial Information

Item 1.	Consolidated Financial Statements (Unaudited)
	Consolidated Income Statements		3
	Consolidated Statements of Comprehensive Income		4
	Condensed Consolidated Balance Sheets		5
	Condensed Consolidated Statements of Cash Flows		6
	Notes to the Consolidated Financial Statements
	Note 1.	Summary of Significant Accounting Policies	7
	Note 2.	~~Proposed~~Planned Merger with Dow Chemical	89
	Note 3.	Divestitures and Other Transactions	910
	Note 4.	Employee Separation / Asset Related Charges, Net	11
	Note 5.	Other Income, Net	12
	Note 6.	Income Taxes	13
	Note 7.	Earnings Per Share of Common Stock	1314
	Note 8.	Inventories	1314
	Note 9.	Other Intangible Assets	1415
	Note 10.	Short-Term and Long-Term Borrowings	15
	Note 11.	Commitments and Contingent Liabilities	1516
	Note 12.	Stockholders’ Equity	1820
	Note 13.	Financial Instruments	2022
	Note 14.	Long-Term Employee Benefits	25
	Note 15.	Segment Information	26

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		28
	Cautionary Statements About Forward-Looking Statements		28
	Recent Developments		30
	Results of Operations		31
	Recent Accounting Pronouncements		33
	Segment Reviews		34
	Liquidity & Capital Resources		36
	Contractual Obligations		3837

Item 3.	Quantitative and Qualitative Disclosures About Market Risk		3837
Item 4.	Controls and Procedures		3937

Part II	Other Information

Item 1.	Legal Proceedings		4038
Item 1A.	Risk Factors		40
~~Item 5.~~	~~Other Information~~		4139
Item 6.	Exhibits		4240
Signature			4341
Exhibit Index			4442

PART I. FINANCIAL INFORMATION


Item 1.	CONSOLIDATED FINANCIAL STATEMENTS

E. I. du Pont de Nemours and Company

Consolidated Income Statements (Unaudited)

(Dollars in millions, except per share)


	Three Months Ended						Three Months Ended
	March 31,						March 31,
	2016			2015			2017			2016
Net sales	$	7,405		$	7,837		$	7,743		$	7,405
Cost of goods sold	4,242			4,516			4,371			4,242
Other operating charges	185			148			204			185
Selling, general and administrative expenses	1,128			1,220			1,260			1,128
Research and development expense	418			479			416			418
Other income, net	(372		)	(199		)	(306		)	(372		)
Interest expense	92			84			84			92
Employee separation / asset related charges, net	77			38			152			77
Income from continuing operations before income taxes	1,635			1,551			1,562			1,635
Provision for income taxes on continuing operations	406			530			224			406
Income from continuing operations after income taxes	1,229			1,021			1,338			1,229
Income from discontinued operations after income taxes	3			14
(Loss) income from discontinued operations after income taxes							(217		)	3
Net income	1,232			1,035			1,121			1,232
Less: Net income attributable to noncontrolling interests	6			4			8			6
Net income attributable to DuPont	$	1,226		$	1,031		$	1,113		$	1,226
Basic earnings per share of common stock:
Basic earnings (loss) per share of common stock:
Basic earnings per share of common stock from continuing operations	$	1.40		$	1.12		$	1.53		$	1.40
Basic earnings per share of common stock from discontinued operations	—			0.01
Basic loss per share of common stock from discontinued operations							(0.25		)	—
Basic earnings per share of common stock	$	1.40		$	1.13		$	1.28		$	1.40
Diluted earnings per share of common stock:
Diluted earnings (loss) per share of common stock:
Diluted earnings per share of common stock from continuing operations	$	1.39		$	1.11		$	1.52		$	1.39
Diluted earnings per shares of common stock from discontinued operations	—			0.01
Diluted loss per share of common stock from discontinued operations							(0.25		)	—
Diluted earnings per share of common stock	$	1.39		$	1.13		$	1.27		$	1.39
Dividends per share of common stock	$	0.38		$	0.47		$	0.38		$	0.38

See Notes to the Consolidated Financial Statements beginning on page 7.

E. I. du Pont de Nemours and Company

Consolidated Statements of Comprehensive Income (Unaudited)

(Dollars in ~~millions, except per share)~~millions)

Three Months Ended
March 31,
2016 2015
Net income $ 1,232
$ 1,035
Other comprehensive loss, before tax:
      Cumulative translation adjustment 170
(1,189 )
      Net revaluation and clearance of cash flow hedges to earnings:
      Additions and revaluations of derivatives designated as cash flow hedges 16
(22 )
      Clearance of hedge results to earnings 11
7
      Net revaluation and clearance of cash flow hedges to earnings 27
(15 )
      Pension benefit plans:
      Net loss (1,191 ) (4 )
      Effect of foreign exchange rates 1
100
      Reclassifications to net income:
                Amortization of prior service benefit (2 ) (2 )
                Amortization of loss 172
209
                Curtailment / settlement loss 50
5
      Pension benefit plans, net (970 ) 308
      Other benefit plans:
      Net loss (124 ) —
      Reclassifications to net income:
                Amortization of prior service benefit (39 ) (52 )
                Amortization of loss 17
19
                Curtailment gain (30 ) —
      Other benefit plans, net (176 ) (33 )
      Net unrealized loss on securities (8 ) —
Other comprehensive loss, before tax (957 ) (929 )
      Income tax benefit (expense) related to items of other comprehensive loss 402
(86 )
Other comprehensive loss, net of tax (555 ) (1,015 )
Comprehensive income 677
20
      Less: Comprehensive income attributable to noncontrolling interests 6
4
Comprehensive income attributable to DuPont $ 671
$ 16



	Three Months Ended
	March 31,
	2017			2016
Net income	$	1,121		$	1,232
Other comprehensive income (loss), net of tax:
Cumulative translation adjustment	378			170
Adjustments to pension benefit plans	109			(619		)
Adjustments to other benefit plans	4			(115		)
Net change in unrealized losses on securities	—			(8		)
Net (losses) gains on cash flow hedging derivative instruments	(3		)	17
Total other comprehensive income (loss)	488			(555		)
Comprehensive income	1,609			677
Comprehensive income attributable to noncontrolling interests, net of tax	8			6
Comprehensive income attributable to DuPont	$	1,601		$	671

See Notes to the Consolidated Financial Statements beginning on page 7.

E. I. du Pont de Nemours and Company

Condensed Consolidated Balance Sheets (Unaudited)

(Dollars in millions, except per share)


	March 31, 2016			December 31, 2015			March 31, 2017			December 31, 2016
Assets
Current assets
Cash and cash equivalents	$	4,166		$	5,300		$	3,347		$	4,605
Marketable securities	623			906			2,570			1,362
Accounts and notes receivable, net	6,917			4,643			7,272			4,971
Inventories	5,482			6,140			5,287			5,673
Prepaid expenses	677			398			574			506
Total current assets	17,865			17,387			19,050			17,117
Property, plant and equipment, net of accumulated depreciation (March 31, 2016 - $14,621; December 31, 2015 - $14,346)	9,649			9,784
Property, plant and equipment, net of accumulated depreciation (March 31, 2017 - $14,994; December 31, 2016 - $14,736)							9,084			9,231
Goodwill	4,256			4,248			4,172			4,180
Other intangible assets	4,071			4,144			3,624			3,664
Investment in affiliates	689			688			687			649
Deferred income taxes	4,142			3,799			3,382			3,308
Other assets	1,129			1,116			1,851			1,815
Total	$	41,801		$	41,166		$	41,850		$	39,964
Liabilities and Equity
Current liabilities
Accounts payable	$	2,773		$	3,398		$	3,038		$	3,705
Short-term borrowings and capital lease obligations	1,625			1,165			2,279			429
Income taxes	171			173			185			101
Other accrued liabilities	4,386			5,580			4,308			4,662
Total current liabilities	8,955			10,316			9,810			8,897
Long-term borrowings and capital lease obligations	8,126			7,642			8,099			8,107
Other liabilities	13,700			12,591			11,911			12,333
Deferred income taxes	422			417			395			431
Total liabilities	31,203			30,966			30,215			29,768
Commitments and contingent liabilities
Stockholders’ equity
Preferred stock	237			237			237			237
Common stock, $0.30 par value; 1,800,000,000 shares authorized; Issued at March 31, 2016 - 960,450,000; December 31, 2015 - 958,388,000	288			288
Common stock, $0.30 par value; 1,800,000,000 shares authorized; Issued at March 31, 2017 - 953,937,000; December 31, 2016 - 950,044,000							286			285
Additional paid-in capital	11,140			11,081			11,354			11,190
Reinvested earnings	15,400			14,510			15,704			14,924
Accumulated other comprehensive loss	(9,951		)	(9,396		)	(9,423		)	(9,911		)
Common stock held in treasury, at cost (87,041,000 shares at March 31, 2016 and December 31, 2015)	(6,727		)	(6,727		)
Common stock held in treasury, at cost (87,041,000 shares at March 31, 2017 and December 31, 2016)							(6,727		)	(6,727		)
Total DuPont stockholders’ equity	10,387			9,993			11,431			9,998
Noncontrolling interests	211			207			204			198
Total equity	10,598			10,200			11,635			10,196
Total	$	41,801		$	41,166		$	41,850		$	39,964

See Notes to the Consolidated Financial Statements beginning on page 7.

E. I. du Pont de Nemours and Company

Condensed Consolidated Statements of Cash Flows (Unaudited)

(Dollars in millions)


	Three Months Ended						Three Months Ended
	March 31,						March 31,
	2016			2015			2017			2016
Operating activities
Net income	$	1,232		$	1,035		$	1,121		$	1,232
Adjustments to reconcile net income to cash used for operating activities:
Depreciation	238			306			230			238
Amortization of intangible assets	122			140			51			122
Net periodic pension benefit cost	146			147			109			146
Contributions to pension plans	(88		)	(124		)	(82		)	(88		)
Gain on sale of businesses and other assets	(374		)	—			(192		)	(374		)
Asset related charges							119			78
Other operating activities - net	258			(1		)	78			180
Change in operating assets and liabilities - net	(3,378		)	(3,626		)	(3,058		)	(3,340		)
Cash used for operating activities	(1,844		)	(2,123		)	(1,624		)	(1,806		)
Investing activities
Purchases of property, plant and equipment	(357		)	(565		)	(330		)	(357		)
Investments in affiliates	(1		)	(45		)	(22		)	(1		)
Proceeds from sale of businesses and other assets - net	193			25			283			193
Purchases of short-term financial instruments	(95		)	(125		)	(2,073		)	(95		)
Proceeds from maturities and sales of short-term financial instruments	377			125			868			377
Foreign currency exchange contract settlements	(78		)	442			(15		)	(78		)
Other investing activities - net	(12		)	3			(46		)	(12		)
Cash provided by (used for) investing activities	27			(140		)
Cash (used for) provided by investing activities							(1,335		)	27
Financing activities
Dividends paid to stockholders	(334		)	(429		)	(331		)	(334		)
Net increase in short-term (less than 90 days) borrowings	665			980			1,681			665
Long-term and other borrowings:
Receipts	654			120			197			654
Payments	(361		)	(1,409		)	(34		)	(361		)
Repurchase of common stock	—			(282		)
Proceeds from exercise of stock options	51			170			160			36
Other financing activities - net	(12		)	(1		)	(32		)	(35		)
Cash provided by (used for) financing activities	663			(851		)
Cash provided by financing activities							1,641			625
Effect of exchange rate changes on cash	20			(174		)	60			20
Decrease in cash and cash equivalents	$	(1,134	)	$	(3,288	)	$	(1,258	)	$	(1,134	)
Cash and cash equivalents at beginning of period	5,300			6,910			4,605			5,300
Cash and cash equivalents at end of period	$	4,166		$	3,622		$	3,347		$	4,166

See Notes to the Consolidated Financial Statements beginning on page 7.

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)

Note 1. Summary of Significant Accounting Policies

Interim Financial Statements

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (GAAP) for interim financial information and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair statement of the results for interim periods have been included. Results for interim periods should not be considered indicative of results for a full year. These interim Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and Notes thereto contained in the company’s Annual Report on Form 10-K for the year ended December 31, ~~2015~~2016, collectively referred to as the ~~“2015~~“2016 Annual ~~Report”.~~Report.” The Consolidated Financial Statements include the accounts of the company and all of its subsidiaries in which a controlling interest is ~~maintained, as well as variable interest entities (VIEs) for which DuPont is the primary beneficiary.~~ maintained.

Basis of Presentation

Certain reclassifications of prior year's data have been made to conform to current year's presentation. ~~On July~~As noted below under “Recent Accounting Pronouncements”, effective January 1, ~~2015,~~2017, the company ~~completed~~adopted the ~~separation~~Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. 2016-09, Compensation - Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting. In conjunction with the adoption of ~~its Performance Chemicals segment through~~this ASU, the spin-off of all of the issued and outstanding stock of The Chemours Company (Chemours). In accordance with GAAP, the financial position and results of operations of the Performance Chemicals segment are presented as discontinued operations and, as such, have been excluded from continuing operations and segment results for all periods presented. The sum of the individual earnings per share amounts from continuing operations and discontinued operations may not equal the total company ~~earnings per share amounts due to rounding. The~~retrospectively reclassified cash flows ~~and comprehensive income~~ related to ~~the Performance Chemicals segment have not been segregated and are included~~income tax impacts associated with employee share-based payments in the interim Condensed Consolidated Statements of Cash Flows, and Comprehensive Income, respectively, for all periods presented. Amounts related to the Performance Chemicals segment are consistently included or excluded from the Notes to the interim Consolidated Financial Statements based on the respective financial statement line item. See Note 3 for additional information.as described below.

Recent Accounting Pronouncements

Accounting Pronouncements Implemented in ~~2016~~

In November 2015, the FASB issued Accounting Standards Update (ASU) No. 2015-17, Income Taxes (Topic 740), Balance Sheet Classification of Deferred Taxes. The amendments under the new guidance require that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The guidance is effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Earlier application is permitted for all entities as of the beginning of an interim or annual reporting period. The amendments in this ASU may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. The company adopted this guidance effective January 1, 2016 on a retrospective basis. As a result of the adoption, $368 and $37 of deferred tax assets and liabilities, respectively, were reclassified from current to noncurrent assets and liabilities, respectively, as of December 31, 2015.

In May 2015, the FASB issued ASU No. 2015-07, Fair Value Measurement (Topic 820), Disclosures for Investments in Certain Entities that Calculate Net Asset Value per Share or its Equivalent. This guidance removes the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. The guidance also removes the requirement to make certain disclosures for all investments that are eligible to be measured at fair value using the net asset value per share practical expedient. Rather, those disclosures are limited to investments for which the entity has elected to measure the fair value using that practical expedient. The guidance is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. A reporting entity should apply the amendments retrospectively to all periods presented and early adoption is permissible. The company adopted this guidance effective January 1, 2016. The guidance will only impact disclosure and will not impact the company's financial position or results of operations.

~~New Accounting Pronouncements to be Implemented~~2017

In March 2016, the FASB ~~Issued~~issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment ~~Accounting.~~Accounting, which modifies the accounting for certain aspects of share-based payments to employees. The ~~ASU~~new guidance requires excess tax benefits and tax deficiencies to be recorded in the income statement when stock awards vest or are settled. In addition, cash flows related to excess tax benefits will no longer be separately classified as a financing activity apart from other income tax cash flows. The standard also allows the company to repurchase more of an employee’s vested shares for tax withholding purposes without triggering liability accounting, and clarifies that all cash payments made to tax authorities on an employee’s behalf for withheld shares should be presented as a financing activity on the statement of cash flows. The company adopted this standard as of January 1, 2017.

The primary impact of adoption was ~~issued as part~~the recognition of excess tax benefits in the company's provision for income taxes rather than additional paid-in capital, which is applied prospectively in accordance with the guidance. Adoption of the new standard resulted in the recognition of $20 of excess tax benefits in the company's provision for income taxes rather than additional paid-in capital for the quarter ended March 31, 2017.

The company elected to apply the presentation requirements for cash flows related to excess tax benefits retrospectively to all periods presented which resulted in a decrease to both net cash used for operating activities and net cash provided by financing activities of $20 and $15 for quarters ended March 31, 2017 and 2016, respectively. The presentation requirements for cash flows related to employee taxes paid for withheld shares resulted in a decrease to both net cash used for operating activities and net cash provided by financing activities of $26 and $23 for the quarters ended March 31, 2017 and 2016, respectively.

The remaining updates required by this standard did not have a material impact to the company’s interim Consolidated Financial Statements.

New Accounting Pronouncements to be Implemented

In March 2017, the FASB ~~Simplification Initiative~~issued ASU No. 2017-07, Compensation - Retirement Benefits (Topic 715), Improving the Presentation of Net Periodic Pension Cost and ~~involves several aspects~~Net Periodic Postretirement Benefit Cost. The new guidance requires registrants to present the service cost component of ~~accounting~~net periodic benefit cost in the same income statement line item or items as other employee compensation costs arising from services rendered during the period. In addition, only the service cost component will be eligible for ~~shared-based payment~~capitalization in assets. Registrants will present the other components of net periodic benefit cost separately from the service cost component; and, the line item or items used in the income statement to present the other components of net periodic benefit cost must be disclosed. The guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted as of the beginning of an annual period. The new standard must be adopted retrospectively for the presentation of the service cost component and the other components of net periodic benefit cost in the income statement, and prospectively for the capitalization of the service cost component of net periodic benefit cost in assets. The company plans to adopt this guidance in the first quarter of 2018 and is currently evaluating the impact on the Consolidated Financial Statements and related disclosures. See Note 14 for the components of net periodic benefit cost.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)

In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment. The new guidance eliminates the requirement to determine the fair value of individual assets and liabilities of a reporting unit to measure goodwill impairment. Under the amendments in the new ASU, goodwill impairment testing will be performed by comparing the fair value of the reporting unit with its carrying amount and recognizing an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. The new standard is effective for annual and interim goodwill impairment tests in fiscal years beginning after December 15, 2019, and should be applied on a prospective basis. Early adoption is permitted for annual or interim goodwill impairment testing performed after January 1, 2017. The company is currently evaluating the timing of adoption.

In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805), Clarifying the Definition of a Business. The new guidance narrows the existing definition of a business and provides a framework for evaluating whether a transaction should be accounted for as an acquisition (or disposal) of assets or a business. The guidance requires an entity to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set of transferred assets and activities (collectively, the set) is not a business. To be considered a business, the set would need to include an input and a substantive process that together significantly contribute to the ability to create outputs, as defined by the ASU. The guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within those annual reporting periods, and should be applied prospectively. Early adoption is permitted. The company will apply this guidance to applicable transactions ~~including~~after the adoption date.

In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740), Intra-Entity Transfers of Assets Other Than Inventory. The new guidance requires that entities recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs, rather than when the asset is sold to an outside party. The guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. The new guidance requires adoption on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The company plans to adopt this guidance in the first quarter of 2018 and ~~classification~~is currently evaluating the impact this guidance will have on the Consolidated Financial Statements and related disclosures.

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments. The new guidance makes eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows. The guidance is effective for ~~annual periods~~fiscal years beginning after December 15, ~~2016,~~2017, and interim periods within those ~~annual periods.~~fiscal years. Early adoption is permitted, ~~for any entity~~including adoption in ~~any~~an interim ~~or annual~~ period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity that elects early adoption must adopt all of the amendments in the same period. The new guidance requires adoption on a retrospective basis unless it is impracticable to apply, in which case the company would be required to apply the amendments prospectively as of the earliest date practicable. The company is currently evaluating the impact this guidance will have on the Consolidated Financial Statements and related ~~disclosures.~~

~~Table of Contents~~

~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in millions, except per share)~~

disclosures, but does not expect there to be a significant impact.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The amendments under the new guidance will require lessees to recognize almost all leases on their balance sheet as a right-of-use asset and a lease liability, other than leases that meet the definition of a ~~short- term~~short-term lease. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance. Classification will be based on criteria that are largely similar to those applied in current lease ~~accounting, but without explicit bright lines.~~accounting. Lessor accounting is similar to the current model, but updated to align with certain changes to the lessee model and the new revenue recognition standard. The new leasing standard will be effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. The new standard must be adopted using a modified retrospective transition, requiring application at the beginning of the earliest comparative period presented. The company is currently evaluating the impact of adopting this guidance on its financial position and results of operations. The company is the lessee under various agreements for facilities and equipment that are currently accounted for as operating leases. A complete discussion of these leases is included in the company's 2016 Annual Report in Note 15, "Commitments and Contingent Liabilities."

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)

In May 2014, the FASB ~~and the International Accounting Standards Board (IASB) jointly~~ issued ASU No. ~~2014-9,~~2014-09, Revenue from Contracts with Customers (Topic 606), which was further updated in March, April, May and ~~April~~December 2016. The new guidance clarifies the principles for recognizing revenue and develops a common revenue standard for ~~GAAP and International Financial Reporting Standards (IFRS).~~GAAP. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. The new standard also will result in additional disclosure requirements to describe the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. In July 2015, the FASB approved a deferral of the ASU effective date from annual and interim periods beginning after December 15, 2016 to annual and interim periods beginning after December 15, 2017. The company ~~is currently evaluating~~continues to evaluate the impact of ~~adopting this guidance~~the new standard on its ~~financial position~~Consolidated Financial Statements and ~~results~~disclosures. Based on the analysis conducted to date, the company does not believe the impact upon adoption will be material to its Consolidated Financial Statements. The company plans to adopt the standard in the first quarter of ~~operations.~~2018 under the modified retrospective transition method.

Note 2. ~~Proposed~~Planned Merger with Dow Chemical

On December 11, 2015, DuPont and The Dow Chemical Company (Dow) announced entry into an Agreement and Plan of Merger, as amended on March 31, 2017, (the Merger Agreement), under which the companies will combine in an all-stock merger of ~~equals.~~equals (the Merger Transaction) subject to satisfaction of customary closing conditions, including receipt of regulatory approval. The ~~companies anticipate that the merger will close and become effective (the Effective Time), in the second half of 2016 and the~~ combined company will be named ~~DowDuPont.~~DowDuPont Inc. (DowDuPont). The Merger Transaction will be accomplished through the merger of separate DowDuPont subsidiaries with and into each of Dow and DuPont with DuPont and Dow surviving as subsidiaries of DowDuPont (the Mergers). Following the consummation of the merger, DuPont and Dow intend to pursue, subject to the receipt of approval by the board of directors of DowDuPont, the separation of the combined company’s agriculture business, specialty products business and material science business through a series of tax-efficient transactions (collectively, the Intended Business ~~Separations.)~~Separations).

On March 27, 2017, DuPont and Dow announced that the European Commission (EC) granted conditional regulatory clearance in Europe for the Merger Transaction conditional on DuPont and Dow fulfilling certain commitments. DuPont is required to sell certain assets related to its Crop Protection business and research and development (R&D) organization, specifically the company’s Cereal Broadleaf Herbicides and Chewing Insecticides portfolios, including Rynaxypyr^®, Cyazypyr^® and Indoxacarb as well as the Crop Protection R&D pipeline and organization, excluding seed treatment, nematicides, and late-stage R&D programs. The company will continue to develop and bring to market its late-stage Crop Protection R&D programs and retain the personnel needed to support the Crop Protection marketed products and R&D programs not required to be divested per the EC's conditional approval.

On March 31, 2017, DuPont entered into a definitive agreement (the FMC Transaction Agreement) with FMC Corporation (FMC). Under the FMC Transaction Agreement, FMC will acquire the Crop Protection business and R&D assets that DuPont is required to divest in order to obtain EC approval of the Merger Transaction as described above, (the Divested Ag Business) and DuPont has agreed to acquire certain assets relating to FMC’s Health and Nutrition segment, excluding its Omega-3 products, (the Acquired H&N Business) (collectively, the FMC Transactions). Additionally, FMC will pay DuPont $1,200 in cash, subject to certain adjustments as set forth in the FMC Transaction Agreement, which reflects the difference in value between the Divested Ag Business and the Acquired H&N Business. DuPont will retain accounts receivable and accounts payable associated with the Divested Ag Business, with an expected net value of $425 at closing.

The divestiture will satisfy DuPont’s commitments to the EC in connection with its conditional regulatory clearance of the merger with Dow. The FMC Transaction is expected to close in the fourth quarter of 2017, subject to the closing of the Merger Transaction, in addition to customary closing conditions, including regulatory approval of the FMC Transactions. Under the FMC Transaction Agreement, DuPont is not required to take certain specified actions to obtain regulatory approval wi

th respect to the acquisition of the Acquired H&N Business (Divestiture Actions) that would reasonably be likely to result in the one-year loss of revenues to DuPont, Dow, DowDuPont Inc., their respective subsidiaries or the Acquired H&N Business in excess of $350 in the aggregate (based on fiscal year 2016 annual revenues) (a Substantial Detriment).

To accommodate the requirements of the FMC Transaction Agreement, DuPont and Dow entered into Amendment No. 1 to the Merger Agreement which, among other things, extends the termination date of the Merger Agreement from June 15, 2017 to August 31, 2017, and sets forth the companies' current intention, subject to approval of the DowDuPont board of directors, that the first step in the Intended Business Separation process will be the spin-off of the post-merger material science business, assuming that such sequencing would allow for the completion of all of the Intended Business Separations, through spin-offs as currently anticipated, within 18 months following closing of the merger and would not adversely impact the value of the intended spin-off transactions to DowDuPont's shareholders.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)

Additional information about the Merger Agreement and the Intended Business Separations is set forth in the company’s Current ~~Report~~Reports on Form 8-K filed with the ~~SEC~~U.S. Securities and Exchange Commission (the SEC) on March 31, 2017, March 27, 2017 and December 11, ~~2015 and~~2015; the company’s 2015 and 2016 Annual ~~Report~~Reports filed with the SEC on February 4, 2016 and February 2, 2017, respectively, and the registration statement on Form S-4 (File No. 333-209869) (as amended, the Registration Statement) filed by DowDuPont and declared effective by the SEC on June 9, 2016. The Registration Statement constitutes a prospectus of DowDuPont and includes a joint proxy statement of Dow and DuPont. The joint proxy statement relates to the separate special meetings of the companies’ respective common stock shareholders of record as of the close of business on June 2, 2016, to adopt the Merger Agreement and related matters. DuPont's special meeting of stockholders was held on July 20, 2016, which resulted in a vote for adoption of the Merger Agreement and approval of related matters.

Dow and DuPont continue to work constructively with regulators to address questions and obtain approval, and to prepare for closing as soon as possible after closing conditions have been met. Consummation of the merger is contingent on satisfaction of customary closing conditions, including the receipt of regulatory approval from the U.S., European Commission, China, Brazil and Canada. Subject to satisfaction of these customary closing conditions, including the receipt of regulatory approvals, closing is anticipated to occur no earlier than August 1, 2017.

During the three months ended March 31, 2017 and 2016, the company incurred $170 and $24, respectively, of costs in connection with the planned merger with ~~Dow.~~Dow and the Intended Business Separations, including costs relating to integration and separation planning. These costs were recorded in selling, general and administrative expenses in the company's interim Consolidated Income Statements and primarily include financial advisory, legal, accounting, consulting and other advisory fees and expenses.

~~Table of Contents~~

~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in millions, except per share)~~

Note 3. Divestitures and Other Transactions

Food Safety Diagnostic Sale

In February 2017, the company completed the sale of its global food safety diagnostic business, a part of the Nutrition & Health segment, to Hygiena LLC. The sale resulted in a pre-tax gain of $162 ($86 net of tax). The gain was recorded in other income, net in the company's interim Consolidated Income Statements for the three months ended March 31, 2017.

DuPont (Shenzhen) Manufacturing Limited

In March 2016, the company ~~sold~~recognized the sale of its 100 percent ~~of its~~ ownership interest in DuPont (Shenzhen) Manufacturing Limited to the Feixiang Group. The sale of the entity, which held certain buildings and other assets, resulted in a pre-tax gain of $369 ($214 net of tax). The gain was recorded in other income, net in the company's interim Consolidated Income Statements for the three months ended March 31, 2016 and was reflected as a Corporate item.

Performance Chemicals

On July 1, 2015, ~~(the Distribution Date),~~ DuPont completed the separation of its Performance Chemicals segment through the spin-off of all of the issued and outstanding stock of The Chemours Company (the Separation). To effect the spin-off, DuPont distributed to its stockholders one share of Chemours common stock, par value $0.01 per share, for every five shares of DuPont common stock, par value $0.30 per share, (the Distribution) outstanding as of 5:00 p.m. June 23, 2015, the record date for the Distribution. In lieu of fractional shares of Chemours, stockholders of DuPont received cash, which generally was taxable. In connection with the Separation, the company and The Chemours Company (Chemours) entered into a Separation Agreement, discussed below, and a Tax Matters Agreement and certain ancillary agreements, including an employee matters agreement, agreements related to transition and site services, and intellectual property cross licensing arrangements. In addition, the companies have entered into certain supply agreements. In the first quarter 2016, the company prepaid $190 for certain goods and services expected to be delivered by Chemours over twelve to fifteen months. As of March 31, 2016, the balance of the prepayment was $168 recorded within prepaid expenses on the Condensed Consolidated Balance Sheet.

Separation Agreement

The company and Chemours entered into a Separation Agreement that sets forth, among other things, the agreements between the company and Chemours regarding the principal transactions necessary to effect the Separation and also sets forth ancillary agreements that govern certain aspects of the company’s relationship with Chemours after the separation. Among other matters, the Separation Agreement and the ancillary agreements provide for the allocation between DuPont and Chemours of assets, employees, liabilities and obligations (including investments, property and employee benefits and tax-related assets and liabilities) attributable to periods prior to, at and after the completion of the Separation.

Pursuant to the Separation Agreement, Chemours indemnifies DuPont against certain litigation, environmental, workers' compensation and other liabilities that arose prior to the distribution. The term of this indemnification is indefinite and includes defense costs and expenses, as well as monetary and non-monetary settlements and judgments. In connection with the recognition of liabilities related to these matters, the company records an indemnification asset when recovery is deemed probable. At March 31, ~~2016,~~2017, the indemnified assets are ~~$94~~$422 within accounts and notes receivable, net and ~~$384~~$350 within other assets ~~offset~~on the condensed Consolidated Balance Sheet. See Note 11 for further discussion of certain litigation and environmental matters indemnified by ~~the corresponding liabilities of $94 within other accrued liabilities and $384 within other liabilities.~~Chemours.

~~The results~~

Table of ~~operations of the Performance Chemicals segment are presented as~~Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)

Loss from discontinued operations ~~as summarized below:~~

Three Months Ended
March 31,
2016 2015
Net sales $ —
$ 1,335
Cost of goods sold —
1,037
Other operating charges 7
135
Selling, general and administrative expenses —
92
Research and development expense —
20
Other income, net —
1
(Loss) income from discontinued operations before income taxes (7 ) 50
(Benefit) provision for income taxes (3 ) 36
(Loss) income from discontinued operations after income taxes $ (4 ) $ 14

~~During~~in the company's interim Consolidated Income Statement during the three months ended March 31, 2017 includes a charge of $335 ($224 net of tax) in connection with the perfluorooctanoic acid (PFOA) multi-district litigation settlement. See Note 11 for further discussion. Income from discontinued operations during the three months ended March 31, 2016, ~~and 2015, the company incurred~~includes $7 ~~and $81~~ of costs ~~respectively,~~ in connection with the separation transaction primarily related to professional fees associated with preparation of regulatory filings and separation activities within finance, tax, legal, and information system functions. Income from discontinued operations during the three months ended March 31, 2016 and 2015, includes $7 and $69 of these costs, respectively. Income from continuing operations during the three months ended March 31, 2015, includes $12 of these costs, respectively, recorded in other operating charges in the company's interim Consolidated Income Statements.

~~Table of Contents~~

~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in millions, except per share)~~

~~The following table presents depreciation, amortization and purchases of property, plant and equipment of the discontinued operations related to Performance Chemicals:~~

Three Months Ended
March 31
2016 2015
Depreciation $ —
$ 62
Amortization of intangible assets —
1
Purchases of property, plant and equipment —
150

~~Table of Contents~~

~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in millions, except per share)~~

Note 4. Employee Separation / Asset Related Charges, Net

2017 Restructuring Program

During the first quarter 2017, DuPont committed to take actions to improve plant productivity and better position its businesses for productivity and growth before and after the anticipated closing of the Merger Transaction. In connection with these actions, the company expects to incur pre-tax charges of $326, comprised of $293 of asset-related charges and $33 in severance and related benefit costs (the 2017 restructuring program). The charges primarily relate to the closure of the Protection Solutions segment's Cooper River manufacturing site located near Charleston, South Carolina. The actions associated with this plan are expected to be substantially complete by the end of 2017.

Of the $326 of pre-tax charges discussed above, $152 was recognized during the three months ended March 31, 2017 in employee separation / asset related charges, net, in the company's interim Consolidated Financial Statement, consisting of $33 of severance and related benefit costs and $119 of asset-related charges. The asset-related charges mainly consist of accelerated depreciation associated with the closure of the Cooper River manufacturing site. Additional charges for accelerated depreciation are expected in 2017, the majority of which will be recognized in the second quarter.

The 2017 restructuring program charge related to the segments, as well as corporate expenses, was as follows:



	Three Months Ended March 31, 2017
Electronics & Communications	$	5
Industrial Biosciences	6
Nutrition & Health	2
Performance Materials	11
Protection Solutions	124
Corporate expenses	4
	$	152

Account balances and activity for the 2017 restructuring program are summarized below:



	Severance and Related Benefit Costs			Asset Related Charges¹			Total
Charges to income from continuing operations for the quarter ended March 31, 2017	$	33		$	119		$	152
Payments	(1		)	—			(1		)
Asset write-offs	—			(119		)	(119		)
Balance as of March 31, 2017	$	32		$	—		$	32


^1.	Includesaccelerated depreciation related to site closure. Charge for accelerated depreciation represents the difference between the depreciation expense to be recognized over the revised useful life of the site, based upon the anticipated date the site will be closed and depreciation expense as determined utilizing the useful life prior to the restructuring action.

La Porte Plant, La Porte, Texas

In March 2016, DuPont announced its decision to not re-start the Agriculture segment’s insecticide manufacturing facility at the La Porte site located in La Porte, Texas. The facility manufactures Lannate^® and Vydate^® insecticides and has been shut down since November 2014. As a result of this decision, during the three months ended March 31, 2016, a pre-tax charge of $75 was recorded in employee separation / asset related charges, net in the company's interim Consolidated Income Statement which included $41 of asset related charges, $18 of contract termination costs, and $16 of employee severance and related benefit costs.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)

2016 Global Cost Savings and Restructuring Plan

At March 31, ~~2016,~~2017, total liabilities related to the program were ~~$504.~~$63. The restructuring actions associated with the charge were substantially completed in 2016. A complete discussion of restructuring initiatives is included in the company's ~~2015~~2016 Annual Report in Note 4, "Employee Separation / Asset Related Charges, Net."

Account balances and activity for the restructuring ~~program~~plan, which reflect timing of payments, are summarized below:

Severance and Related Benefit Costs Asset Related Charges
Other Non-Personnel Charges¹
Total
Balance at December 31, 2015 $ 648
$ —
$ 32
$ 680
Payments (124 ) —
(20 ) (144 )
Net translation adjustment 3
—
—
3
Other adjustments (44 ) 37
9
2
Asset write-offs —
(37 ) —
(37 )
Balance as of March 31, 2016 $ 483
$ —
$ 21
$ 504



	Severance and Related Benefit Costs			Other Non-Personnel Charges¹			Total
Balance at December 31, 2016	$	100		$	22		$	122
Payments	(50		)	(10		)	(60		)
Net translation adjustment	1			—			1
Balance as of March 31, 2017	$	51		$	12		$	63


^1.^1.Other non-personnel charges consist of contractual obligation costs.	~~Other non-personnel charges consist of contractual obligation costs.~~

During the three months ended March 31, 2016, a net charge of $2 was recorded associated with the 2016 global cost savings and restructuring plan in employee separation / asset related charges, net in the company's interim Consolidated Income ~~Statements.~~Statement. This was primarily due to the identification of additional projects in certain segments, offset by lower than estimated workforce reductions achieved through non-severance programs. The net charge related to the segments for the three months ended March 31, 2016 was as follows: Agriculture - $21, Electronics & Communications - $(7), Industrial Biosciences - $(1), Nutrition & Health - $(1), Performance Materials - $4, Protection Solutions - $(3), Other - $3, as well as Corporate expenses $(14).

~~2014 Restructuring Program~~

At March 31, 2016, total liabilities related to the 2014 restructuring program were $55. A complete discussion of restructuring initiatives is included in the company's 2015 Annual Report in Note 4, "Employee Separation / Asset Related Charges, Net."

~~Account balances and activity related to the 2014 restructuring program are summarized below:~~

Severance and Related Benefit Costs
Other Non-Personnel Charges ¹
Total
Balance at December 31, 2015 $ 76
$ 2
$ 78
Payments (23 ) —
(23 )
Balance as of March 31, 2016 $ 53
$ 2
$ 55


^1.	~~Other non-personnel charges consist of contractual obligation costs.~~

~~Cost Basis Investment Impairment~~

During the first quarter 2015, a $38 pre-tax impairment charge was recorded in employee separation / asset related charges, net within the Other segment. The majority related to a cost basis investment in which the assessment resulted from the venture's revised operating plan reflecting underperformance of its European wheat based ethanol facility and deteriorating European ethanol market conditions. As a result, the carrying value of DuPont's 6 percent cost basis investment in this venture exceeded its fair value by $37, such that an impairment charge was recorded.

~~Table of Contents~~

~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in millions, except per share)~~

Note 5. Other Income, Net


	Three Months Ended					Three Months Ended
	March 31,					March 31,
	2016			2015		2017			2016
Royalty income	$	57		$	34	$	45		$	57
Interest income	16			25		25			16
Equity in earnings of affiliates, net	10			4		18			10
Net gain on sales of businesses and other assets¹	373			5
Net exchange (losses) gains²	(121		)	79
Net gain on sales of businesses and other assets^1,2						192			373
Net exchange losses						(59		)	(121		)
Miscellaneous income and expenses, net³	37			52		85			37
Other income, net	$	372		$	199	$	306		$	372


^1.	Includes a pre-tax gain of $162 ($86 net of tax) for the three months ended March 31, 2017 related to the sale of the global food safety diagnostic business. See Note 3 for additional information.


^2.	Includes a pre-tax gain of $369 ($214 net of tax) for the three months ended March 31, 2016 related to the sale of DuPont (Shenzhen) Manufacturing Limited. See Note 3 for additional information.


^2.	~~The $79 net exchange gain for the three months ended March 31, 2015, includes a net $(40) pre-tax exchange loss associated with the devaluation of the Ukrainian hryvnia.~~

^3.

Miscellaneous income and expenses, net, includes interest items, ~~certain insurance recoveries and~~ gains related to litigation settlements, and other items. For the three months ended March 31, 2017, the amount includes a $47 benefit associated with accrued interest reversals related to a reduction in the company's unrecognized tax benefits due to the closure of various tax statutes of limitations. See Note 6 for additional information.

The following table summarizes the impacts of the company's foreign currency hedging program on the company's results of operations for the three months ended March 31, ~~2016~~2017 and ~~2015.~~2016. The company routinely uses foreign currency exchange contracts to offset its net exposures, by currency, related to the foreign currency-denominated monetary assets and liabilities. The objective of this program is to maintain an approximately balanced position in foreign currencies in order to minimize, on an after-tax basis, the effects of exchange rate changes on net monetary asset positions. The hedging program gains (losses) are largely taxable (tax deductible) in the U.S., whereas the offsetting exchange gains (losses) on the re-measurement of ~~the~~certain net monetary asset positions are ~~often~~ not taxable (tax deductible) in their local jurisdictions. The net pre-tax exchange gains (losses) are recorded in other income, net and the related tax impact is recorded in provision for income taxes on continuing operations in the interim Consolidated Income Statements.

Three Months Ended
March 31,
2016 2015
Subsidiary Monetary Position Gain (Loss)
Pre-tax exchange gain (loss)¹
$ 33
$ (200 )
Local tax benefits (expenses) 13
(109 )
Net after-tax impact from subsidiary exchange gain (loss) 46
(309 )

Hedging Program Gain (Loss)
Pre-tax exchange (loss) gain (154 ) 279
Tax benefits (expenses) 55
(100 )
Net after-tax impact from hedging program exchange (loss) gain (99 ) 179

Total Exchange Gain (Loss)
Pre-tax exchange (loss) gain (121 ) 79
Tax benefits (expenses) 68
(209 )
Net after-tax exchange loss $ (53 ) $ (130 )


^1.	~~Excludes equity affiliates.~~

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)



	Three Months Ended
	March 31,
	2017			2016
Subsidiary Monetary Position Gain (Loss)
Pre-tax exchange gains	$	26		$	33
Local tax benefits	36			13
Net after-tax impact from subsidiary exchange gains	62			46

Hedging Program Gain (Loss)
Pre-tax exchange losses	(85		)	(154		)
Tax benefits	30			55
Net after-tax impact from hedging program exchange losses	(55		)	(99		)

Total Exchange Gain (Loss)
Pre-tax exchange losses	(59		)	(121		)
Tax benefits	66			68
Net after-tax exchange gains (losses)	$	7		$	(53	)

Note 6. Income Taxes

Each year the company files hundreds of tax returns in the various national, state and local income taxing jurisdictions in which it operates. These tax returns are subject to examination and possible challenge by the tax authorities. Positions challenged by the tax authorities may be settled or appealed by the company. As a result, there is an uncertainty in income taxes recognized in the company’s financial statements in accordance with accounting for income taxes and accounting for uncertainty in income taxes. It is reasonably possible that ~~net reductions~~changes to the ~~company’s~~company's global unrecognized tax benefits could be insignificant; however, due to the uncertainty regarding the timing of completion of audits and possible outcomes, a current estimate of the range of ~~$100 to $120~~increases or decreases that may occur within the next twelve months ~~with~~cannot be made.

During the ~~majority~~three months ended March 31, 2017, the company recognized a tax benefit of $57, as well as a $50 pre-tax benefit on associated accrued interest reversals, related to a reduction in the company's unrecognized tax benefits due to the ~~settlement~~closure of ~~uncertain tax positions with~~ various tax ~~authorities.~~statutes of limitations. Income from continuing operations during the three months ended March 31, 2017 includes a tax benefit of $53 and a pre-tax benefit of $47 for accrued interest reversals (recorded in other income, net). Loss from discontinued operations during the three months ended March 31, 2017 includes a tax benefit of $4 and a pre-tax benefit of $3 for the accrued interest reversal.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)

Note 7. Earnings Per Share of Common Stock

Set forth below is a reconciliation of the numerator and denominator for basic and diluted earnings per share calculations for the periods indicated:


	Three Months Ended						Three Months Ended
	March 31,						March 31,
	2016			2015			2017			2016
Numerator:
Income from continuing operations after income taxes attributable to DuPont	$	1,223		$	1,017		$	1,330		$	1,223
Preferred dividends	(2		)	(2		)	(2		)	(2		)
Income from continuing operations after income taxes available to DuPont common stockholders	$	1,221		$	1,015		$	1,328		$	1,221

Income from discontinued operations after income taxes available to DuPont common stockholders	$	3		$	14
(Loss) income from discontinued operations after income taxes available to DuPont common stockholders							$	(217	)	$	3

Net income available to common stockholders	$	1,224		$	1,029		$	1,111		$	1,224

Denominator:
Weighted-average number of common shares outstanding - Basic	873,546,000			906,835,000			866,516,000			873,546,000
Dilutive effect of the company’s employee compensation plans	3,705,000			6,984,000			4,567,000			3,705,000
Weighted-average number of common shares outstanding - Diluted	877,251,000			913,819,000			871,083,000			877,251,000

The following average number of stock options were antidilutive, and therefore not included in the dilutive earnings per share calculations:

Three Months Ended
March 31,
2016 2015
Average number of stock options 5,104,000
—



	Three Months Ended
	March 31,
	2017	2016
Average number of stock options	6,000	5,104,000

The change in the average number of stock options that were antidilutive in the three months ended March 31, ~~2016~~2017, compared to the same period last year was due to changes in the company's average stock price.

Note 8. Inventories


	March 31, 2016			December 31, 2015			March 31, 2017			December 31, 2016
Finished products	$	3,401		$	3,779		$	2,953		$	3,113
Semi-finished products	1,559			1,780			1,838			2,009
Raw materials, stores and supplies	721			783			669			719
	5,681			6,342			5,460			5,841
Adjustment of inventories to a last-in, first-out (LIFO) basis	(199		)	(202		)	(173		)	(168		)
Total	$	5,482		$	6,140		$	5,287		$	5,673

1314

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)

Note 9. Other Intangible Assets

The gross carrying amounts and accumulated amortization of other intangible assets by major class are as follows:


	March 31, 2016							December 31, 2015							March 31, 2017							December 31, 2016
	Gross		Accumulated Amortization			Net		Gross		Accumulated Amortization			Net		Gross		Accumulated Amortization			Net		Gross		Accumulated Amortization			Net
Intangible assets subject to amortization (Definite-lived):
Customer lists	$	1,635	$	(552	)	$	1,083	$	1,621	$	(529	)	$	1,092	$	1,597	$	(612	)	$	985	$	1,574	$	(586	)	$	988
Patents	457		(232		)	225		454		(220		)	234		451		(280		)	171		446		(259		)	187
Purchased and licensed technology	1,204		(736		)	468		1,173		(649		)	524		930		(577		)	353		964		(579		)	385
Trademarks	26		(14		)	12		26		(13		)	13
Trademarks / trade names															53		(16		)	37		53		(15		)	38
Other ¹	180		(76		)	104		180		(72		)	108		172		(86		)	86		171		(82		)	89
	3,502		(1,610		)	1,892		3,454		(1,483		)	1,971		3,203		(1,571		)	1,632		3,208		(1,521		)	1,687

Intangible assets not subject to amortization (Indefinite-lived):
In-process research and development	71		—			71		72		—			72		74		—			74		73		—			73
Microbial cell factories	306		—			306		306		—			306		306		—			306		306		—			306
Pioneer germplasm	1,048		—			1,048		1,048		—			1,048		1,057		—			1,057		1,053		—			1,053
Trademarks/tradenames	754		—			754		747		—			747
Trademarks / trade names															555		—			555		545		—			545
	2,179		—			2,179		2,173		—			2,173		1,992		—			1,992		1,977		—			1,977
Total	$	5,681	$	(1,610	)	$	4,071	$	5,627	$	(1,483	)	$	4,144	$	5,195	$	(1,571	)	$	3,624	$	5,185	$	(1,521	)	$	3,664


^1.	Primarily consists of sales ~~and grower~~ networks, marketing and manufacturing alliances and noncompetition agreements.

The aggregate pre-tax amortization expense from continuing operations for definite-lived intangible assets was ~~$122~~$51 and ~~$139~~$122 for the three months ended March 31, ~~2016~~2017 and ~~2015,~~2016, respectively. The estimated aggregate pre-tax amortization expense from continuing operations for the remainder of ~~2016~~2017 and each of the next five years is approximately ~~$207, $207, $208, $213, $200~~$151, $209, $211, $193, $138 and ~~$147,~~$115, respectively.

~~Table of Contents~~

~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in millions, except per share)~~

Note 10. Short-Term and Long-Term Borrowings

Repurchase Facility

In ~~February 2016,~~January 2017, the company entered into a committed receivable repurchase agreement of up to ~~$1,000~~$1,300 (the Repurchase Facility). The Repurchase Facility is structured to account for the seasonality of the agricultural business and expires on November 30, ~~2016.~~2017. Under the Repurchase Facility, the company may sell a portfolio of available and eligible outstanding customer notes receivables within the Agriculture segment to participating institutions and simultaneously must agree to repurchase such notes receivable at a future date. The Repurchase Facility is considered a secured borrowing with the customer notes receivables utilized as collateral. The amount of collateral required equals ~~105%~~105 percent of the outstanding borrowing amounts. Borrowings under the Repurchase Facility have an interest rate of the London interbank offered rate (LIBOR) plus ~~0.75%.~~0.75 percent.

As of March 31, ~~2016,~~2017, $315 of notes receivable, recorded in accounts and notes receivable, net, were pledged as collateral against outstanding borrowings under the Repurchase Facility of $300, recorded in short-term borrowings and capital lease obligations.

Term Loan Facility

In March 2016, the company entered into a credit agreement that provides for a three-year, senior unsecured term loan facility in the aggregate principal amount of $4,500 ~~(the~~(as amended from time to time, the Term Loan Facility). In the first quarter of 2017, the Term Loan Facility was amended to extend the date on which the commitment to lend terminates. As a result, DuPont may make up to seven term loan borrowings ~~within one year of the closing date and~~through July 27, 2018; amounts repaid or prepaid are not available for subsequent borrowings. The Term Loan Facility matures in March 2019 at which time all outstanding borrowings, including accrued but unpaid interest, become immediately due and payable.

~~Under the Term Loan Facility, DuPont can borrow funds at LIBOR plus a spread from 0.75% to 1.25% (LIBOR Loan Rate) depending on DuPont's long term credit rating.~~ As of March 31, ~~2016,~~2017, the company had borrowed $500 ~~at the LIBOR Loan Rate~~ and had unused commitments of $4,000 under the Term Loan Facility.

~~DuPont has the option~~

Table of obtaining a same day loan under the Term Loan Facility at an interest rate based on the higher of a) the LIBOR Loan Rate, b) the federal funds effective rate plus 0.5% plus a margin from 0.00% to 0.25% depending on DuPont's long term credit rating (Margin) or c) the prime rate plus Margin.Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)

Note 11. Commitments and Contingent Liabilities

Guarantees

Indemnifications

In connection with acquisitions and divestitures as of March 31, ~~2016,~~2017, the company has indemnified respective parties against certain liabilities that may arise in connection with these transactions and business activities prior to the completion of the ~~transaction.~~transactions. The term of these indemnifications, which typically pertain to environmental, tax and product liabilities, is generally indefinite. In addition, the company indemnifies its duly elected or appointed directors and officers to the fullest extent permitted by Delaware law, against liabilities incurred as a result of their activities for the company, such as adverse judgments relating to litigation matters. If the indemnified party were to incur a liability or have a liability increase as a result of a successful claim, pursuant to the terms of the indemnification, the company would be required to reimburse the indemnified party. The maximum amount of potential future payments is generally unlimited.

Obligations for Equity Affiliates & Others

The company has directly guaranteed various debt obligations under agreements with third parties related to equity affiliates, customers and suppliers. InAdditionally, in connection with the ~~separation,~~Separation, the company has directly guaranteed Chemours' purchase obligations under an agreement with a third party supplier. At March 31, ~~2016~~2017 and December 31, ~~2015~~2016, the company had directly guaranteed $~~323~~356 and $~~337~~354, respectively, of such obligations. These amounts represent the maximum potential amount of future (undiscounted) payments that the company could be required to make under the guarantees. The company would be required to perform on these guarantees in the event of default by the guaranteed party.

The company assesses the payment/performance risk by assigning default rates based on the duration of the guarantees. These default rates are assigned based on the external credit rating of the counterparty or through internal credit analysis and historical default history for counterparties that do not have published credit ratings. For counterparties without an external rating or available credit history, a cumulative average default rate is used.

In certain cases, the company has recourse to assets held as collateral, as well as personal guarantees from customers and suppliers. Assuming liquidation, these assets are estimated to cover 2720 percent of the $~~112~~176 of guaranteed obligations of customers and suppliers.

~~Table of Contents~~

~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in millions, except per share)~~

Set forth below are the company's guaranteed obligations at March 31, ~~2016~~2017:


	Short-Term		Long-Term		Total		Short-Term		Long-Term		Total
Obligations for customers and suppliers¹:
Bank borrowings (terms up to 6 years)	$	96	$	16	$	112
Bank borrowings (terms up to 5 years)							$	167	$	9	$	176
Obligations for equity affiliates²:
Bank borrowings (terms up to 1 year)	178		—		178		165		—		165
Obligations for Chemours³:
Chemours' purchase obligations (final expiration - 2018)	22		11		33		15		—		15
Total	$	296	$	27	$	323	$	347	$	9	$	356


^1.	Existing guarantees for customers and suppliers, as part of contractual agreements.


^2.	Existing guarantees for equity affiliates' liquidity needs in normal operations.


^3.	Guarantee for Chemours' raw material purchase obligations under agreement with third party supplier.

Litigation

The company is subject to various legal proceedings arising out of the normal course of its business including product liability, intellectual property, commercial, environmental and antitrust lawsuits. It is not possible to predict the outcome of these various proceedings. Although considerable uncertainty exists, management does not anticipate that the ultimate disposition of these matters will have a material adverse effect on the company's results of operations, consolidated financial position or liquidity. However, the ultimate liabilities could be material to results of operations in the period recognized.

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)

PFOA

DuPont used PFOA (collectively, perfluorooctanoic acids and its salts, including the ammonium salt), as a processing aid to manufacture some fluoropolymer resins at various sites around the world including its Washington Works plant in West Virginia. At March 31, ~~2016,~~2017, DuPont has ana total accrual balance of ~~$14~~$686 related to the PFOA matters discussed ~~below. Pursuant~~below and has recorded a total indemnification asset of $350 from Chemours pursuant to the Separation Agreement discussed in Note 3 and the ~~company is indemnified by~~first quarter 2017 agreement between Chemours ~~for the PFOA matters discussed below. As a result, the company has recorded an indemnification asset of $14 corresponding to the accrual balance as of March 31, 2016.~~and DuPont.

The accrual includes charges related to DuPont's obligations under agreements with the U.S. Environmental Protection Agency and voluntary commitments to the New Jersey Department of Environmental Protection. These obligations and voluntary commitments include surveying, sampling and testing drinking water in and around certain company sites and offering treatment or an alternative supply of drinking water if tests indicate the presence of PFOA in drinking water at or greater than the national Provisional Health Advisory.

~~Drinking Water Actions~~Leach v. DuPont

In August 2001, a class action, captioned Leach vv. DuPont, was filed in West Virginia state court alleging that residents living near the Washington Works facility had suffered, or may suffer, deleterious health effects from exposure to PFOA in drinking water.

DuPont and attorneys for the class reached a settlement in 2004 that binds about 80,000 ~~residents.~~residents, (the Leach Settlement). In 2005, DuPont paid the plaintiffs’ attorneys’ fees and expenses of $23 and made a payment of $70, which class counsel designated to fund a community health project. The company funded a series of health studies which were completed in October 2012 by an independent science panel of experts (the C8 Science Panel). The studies were conducted in communities exposed to PFOA to evaluate available scientific evidence on whether any probable link exists, as defined in the ~~settlement agreement,~~Leach Settlement Agreement, between exposure to PFOA and human disease.

The C8 Science Panel found probable links, as defined in the ~~settlement agreement,~~Leach Settlement Agreement, between exposure to PFOA and pregnancy-induced hypertension, including preeclampsia; kidney cancer; testicular cancer; thyroid disease; ulcerative colitis; and diagnosed high cholesterol.

In May 2013, a panel of three independent medical doctors released its initial recommendations for screening and diagnostic testing of eligible class ~~members.~~members for the six human diseases for which the C8 Science Panel determined a probable link exists. In September 2014, the medical panel recommended follow-up screening and diagnostic testing three years after initial testing, based on individual results. The medical panel has not communicated its anticipated schedule for completion of its protocol. ~~The~~Under the Leach Settlement Agreement, the company is obligated to fund up to $235 for a medical monitoring program for eligible class members and, in addition, administrative costs associated with the program, including class counsel fees. In January 2012, the company established and put $1 into an escrow account to fund medical monitoring as required by the settlement agreement.

~~Table of Contents~~

~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in millions, except per share)~~

~~Under the settlement agreement, the~~ The balance in the escrow ~~amount~~account must be at least $0.5; as a result, transfers of additional funds may be required periodically. The ~~court appointed~~court-appointed Director of Medical Monitoring has established the program to implement the medical panel's recommendations and the registration process, as well as eligibility screening, is ongoing. Diagnostic screening and testing has begun and associated payments to service providers are being disbursed from the escrow account; at March 31, ~~2016,~~2017 less than $1 has been disbursed.

In addition, under the settlement agreement, the company must continue to provide water treatment designed to reduce the level of PFOA in water to six area water districts, including the Little Hocking Water Association (LHWA), and private well users.

Class members may pursue personal injury claims against DuPont only for those human diseases for which the C8 Science Panel determined a probable link exists. At March 31, 2016 and December 31, 2015, there were approximately 3,500 lawsuits pending in various federal and state courts in Ohio and West Virginia. These lawsuits are consolidated in multi-district litigation in Ohio federal court (MDL). About 75 percent of the lawsuits allege personal injury claims associated only with high cholesterol and/or thyroid disease from exposure to PFOA in drinking water. As a result of plaintiffs' corrected pleadings and further discovery, the company has revised downward to 30 the estimated number of pending lawsuits alleging wrongful death.

In 2014, six plaintiffs from the MDL were selected for individual trial. The jury awarded $1.6 in compensatory damages in the first individual trial, captioned Bartlett v DuPont, which was tried to a verdict in October 2015. The plaintiff alleged that exposure to PFOA in drinking water had caused kidney cancer. DuPont, through Chemours, is appealing the decision. The second matter selected for trial, Wolf v DuPont, involved allegations that exposure to PFOA in drinking water caused ulcerative colitis, a confidential settlement for an inconsequential amount was reached and substantially completed in Wolf v DuPont. Three cases are scheduled for trial in 2016 starting in May, August and November, respectively; the plaintiffs in each of these cases allege exposure to PFOA in drinking water caused cancer.

In January 2016, the court determined that 40 cases in which plaintiffs assert cancer claims, would be scheduled for trial in 2017, beginning in April of that year. Less than 10 percent of the 3,500 pending lawsuits involve claims that exposure to PFOA in drinking water caused cancer.

~~DuPont, through Chemours, denies the allegations in these lawsuits and is defending itself vigorously.~~

~~Additional Actions~~

In the first quarter 2016, a confidential settlement was reached in the Ohio action brought by the LHWA claiming, “imminent and substantial endangerment to health and or the environment” under the Resource Conservation and Recovery Act (RCRA) in addition to general claims of PFOA contamination of drinking water. The cost of the settlement was paid by Chemours.

~~PFOA Summary~~

While it is probable that the company will incur liabilities related to funding the medical monitoring program, such liabilities cannot be reasonably estimated due to uncertainties surrounding the level of participation by eligible class members and the scope of testing. In addition, under the Leach Settlement Agreement, the company must continue to provide water treatment designed to reduce the level of PFOA in water to six area water districts, including the Little Hocking Water Association (LHWA), and private well users.

Multi-District Litigation

Leach class members may pursue personal injury claims against DuPont ~~believes~~only for the six human diseases for which the C8 Science Panel determined a probable link exists. At March 31, 2017, there were approximately 3,550 lawsuits, of which about 30 allege wrongful death, pending in various federal and state courts in Ohio and West Virginia. These lawsuits are consolidated in multi-district litigation (MDL) in the U.S. District Court for the Southern District of Ohio (the Court).

The table below approximates the number of lawsuits based on primary alleged disease.



Alleged Injury	Number of Claims
Kidney cancer	210
Testicular cancer	70
Ulcerative colitis	300
Preeclampsia	200
Thyroid disease	1,430
High cholesterol	1,340

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)

In February 2017, DuPont entered into an agreement in principle with MDL plaintiffs’ counsel providing for a global settlement of all cases and claims in the MDL, including all filed and unfiled personal injury cases and claims that ~~it is reasonably possible~~are part of the plaintiffs’ counsel’s claim inventory as well as the cases captioned Bartlett v. DuPont, Freeman v. DuPont, Moody v. DuPont and Vigneron v. DuPont, (the MDL Trial Plaintiffs).

In connection with all filed and unfiled personal injury cases and claims that ~~it could incur additional liabilities~~are part of the plaintiffs' counsel's claim inventory, on March 31, 2017, DuPont and MDL plaintiffs’ counsel entered into a definitive agreement covering Leach class members who either, 1) asserted a qualifying claim, not previously settled, withdrawn or dismissed as of February 11, 2017; or 2) claimed to have a qualifying condition and on or before February 11, 2017, had retained counsel for purposes of making a qualifying claim,(the Master Settlement Agreement). Also on March 31, 2017, DuPont and MDL plaintiffs’ counsel entered into a definitive agreement related to the MDL Trial Plaintiffs (the MDL Trial Plaintiffs Settlement Agreement). The Master Settlement Agreement and the MDL Trial Plaintiffs Settlement Agreement (collectively referred to as the MDL Settlement) are not subject to court approval.

The aggregate total settlement amount under the MDL Settlement is $670.7 in cash. DuPont and Chemours have agreed that half of that amount will be paid by Chemours and half by DuPont. DuPont’s payment would not be subject to indemnification or reimbursement by Chemours. In exchange for that payment, DuPont and Chemours will receive a complete release of all claims by the settling plaintiffs. The MDL Settlement was entered into solely by way of compromise and settlement and is not in any way an admission of liability or fault by DuPont or Chemours. The Master Settlement Agreement includes a "Walk-Away Right" that allows DuPont to terminate the settlement if required participation thresholds are not met for any disease category. Whether those thresholds are met will be determined in accordance with the Master Settlement Agreement at various dates into the third quarter 2017, subject to extension. The Master Settlement Agreement will not be deemed effective until the date on which the parties agree that the required participation thresholds have been met (the MSA Effective Date).

In connection with the MDL Settlement, the company increased the accrual related to the PFOA multi-district litigation to $670.7 at March 31, 2017, (the MDL Settlement Accrual). Due to the first quarter 2017 agreement with Chemours discussed above, the company increased the indemnification asset related to the PFOA multi-district litigation to $335 at March 31, 2017. The remainder of the MDL Settlement Accrual amount was recorded as a charge of $335 ($224 net of tax) to loss from discontinued operations in the company's interim Consolidated Income Statement during the three months ended March 31, 2017.

DuPont and Chemours have also agreed, subject to and following the MSA Effective Date, to a limited sharing of potential future PFOA liabilities (i.e., indemnifiable losses, as defined in the Separation Agreement) for a period of 5 years, starting on the MSA Effective Date. During that five-year period, Chemours would annually pay future PFOA liabilities up to $25 and, if such amount is exceeded, DuPont would pay any excess amount up to the next $25 (which payment will not be subject to indemnification by Chemours), with Chemours annually bearing any further excess liabilities. After the five-year period, this limited sharing agreement would expire, and Chemours’ indemnification obligations under the Separation Agreement would continue unchanged. Chemours has also agreed that, upon the occurrence of the MSA Effective Date, it will not contest its liability to DuPont under the Separation Agreement for PFOA liabilities on the basis of ostensible defenses generally applicable to the indemnification provisions under the Separation Agreement, including defenses relating to punitive damages, fines or penalties or attorneys’ fees, and waives any such defenses with respect to PFOA liabilities. Chemours has, however, retained defenses as to whether any particular PFOA claim is within the scope of the indemnification provisions of the Separation Agreement.

Status of MDL Post MDL Settlement

In 2014, six cases from the MDL were selected for individual trial. In 2016, three of these cases, (two kidney cancer cases and one ulcerative colitis case), were settled for amounts immaterial individually and in the aggregate, and one case was voluntarily withdrawn by plaintiffs.

Three other ~~PFOA matters discussed above; however,~~cases were tried to verdict in 2015 (Bartlett v. DuPont, kidney cancer), 2016 (Freeman v. DuPont, testicular cancer), and 2017 (Vigneron v. DuPont, testicular cancer), and a ~~range~~fourth trial (Moody v. DuPont, testicular cancer) began in 2017 and was still underway at the time of the MDL Trial Plaintiffs Settlement Agreement. The Bartlett jury awarded compensatory damages of $1.6 and no punitive damages. That verdict was on appeal to the U.S. Court of Appeals for the Sixth Circuit at the time of the MDL Trial Plaintiffs Settlement Agreement. The Freeman jury awarded compensatory damages of $5.1 and $0.5 in punitive damages and attorneys’ fees. The Vigneron jury awarded compensatory damages of $2 and punitive damages of $10.5. Post-trial motions in Freeman and Vigeron were still pending at the time of the MDL Trial Plaintiffs Settlement Agreement.

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)

As a result of the MDL Settlement, all litigation and judicial proceedings related to the MDL pending before the Court and U.S. Court of Appeals for the Sixth Circuit have been stayed (the MDL Stay). At March 31, 2017, the MDL Settlement Accrual reflects management’s best estimate of MDL-related loss. If the Master Settlement Agreement is terminated or otherwise does not proceed, additional lawsuits could go to trial or appeal over the course of many years. In this event, management would consider the outcomes of such ~~liabilities, if any, cannot be reasonably estimated at this time, due to~~rulings, trials and appeals, the uniqueness of the individual MDL ~~plaintiff's~~plaintiff’s claims and the ~~company's~~ defenses to those claims, both as to potential liability and damages on an individual ~~claims~~claim basis, among other ~~factors. As noted above,~~factors, in reviewing its estimate of or ability to reasonably estimate loss.

Additional Actions

Since 2006, DuPont has undertaken obligations under agreements with the U.S. Environmental Protection Agency (EPA), including a 2009 consent decree under the Safe Drinking Water Act (the Order), and voluntary commitments to the New Jersey Department of Environmental Protection (NJDEP). These obligations and voluntary commitments include surveying, sampling and testing drinking water in and around certain company ~~is indemnified~~sites and offering treatment or an alternative supply of drinking water if tests indicate the presence of PFOA in drinking water at or greater than the national health advisory level, even if provisional, as established from time to time by EPA. A provisional health advisory level was set in 2009 at 0.4 parts per billion (ppb) for PFOA in drinking water considering episodic exposure. In May 2016, EPA announced a health advisory level of 0.07 ppb for PFOA in drinking water considering lifetime versus episodic exposure. In January 2017, EPA announced it had amended the Order to include Chemours, and to make the new health advisory level the trigger for additional actions by the companies, thus expanding the obligations to the EPA beyond the previously established testing and water supply commitments around the Washington Works facility. The company's accrual balance at March 31, 2017, include $15 related to these ~~PFOA matters.~~obligations and voluntary commitments.

Environmental

The company is also subject to contingencies pursuant to environmental laws and regulations that in the future may require the company to take further action to correct the effects on the environment of prior disposal practices or releases of chemical or petroleum substances by the company or other parties. The company accrues for environmental remediation activities consistent with the policy as described in the company's ~~2015~~2016 Annual Report in Note 1, ~~“Summary~~"Summary of Significant Accounting Policies.”" Much of this liability results from the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA, often referred to as Superfund), ~~RCRA~~the Resource Conservation and Recovery Act (RCRA) and similar state and global laws. These laws require the company to undertake certain investigative, remediation and restoration activities at sites where the company conducts or once conducted operations or at sites where company-generated waste was disposed. The accrual also includes estimated costs related to a number of sites identified by the company for which it is probable that environmental remediation will be required, but which are not currently the subject of enforcement activities.

~~Table of Contents~~

~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in millions, except per share)~~

Remediation activities vary substantially in duration and cost from site to site. These activities, and their associated costs, depend on the mix of unique site characteristics, evolving remediation technologies, diverse regulatory agencies and enforcement policies, as well as the presence or absence of potentially responsible parties. At March 31, ~~2016,~~2017, the Condensed Consolidated Balance Sheet included a liability of ~~$492,~~$487, relating to these matters and, in management's opinion, is appropriate based on existing facts and circumstances. The average time frame over which the accrued or presently unrecognized amounts may be paid, based on past history, is estimated to be 15-20 years. Considerable uncertainty exists with respect to these costs and, under adverse changes in circumstances, the potential liability may range up to ~~$1,025~~$775 above the amount accrued as of March 31, ~~2016.~~2017. Pursuant to the Separation Agreement discussed in Note 3, the company is indemnified by Chemours for certain environmental matters, included in the liability of ~~$492,~~$487, that have an estimated liability of ~~$282~~$265 as of March 31, ~~2016~~2017, and a potential exposure that ranges up to approximately ~~$618~~$400 above the amount accrued. As such, the company has recorded an indemnification asset of ~~$282~~$265 corresponding to the company’s accrual balance related to these matters at March 31, ~~2016.~~2017.

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)

Note 12. Stockholders’ Equity

~~Share Repurchase Program~~Other Comprehensive Income (Loss)

~~2015 Share Buyback Plan~~The changes and after-tax balances of components comprising accumulated other comprehensive loss are summarized below:



	Cumulative Translation Adjustment¹			Net Gains (Losses) on Cash Flow Hedging Derivative Instruments			Pension Benefit Plans			Other Benefit Plans			Unrealized Gain (Loss) on Securities			Total
2017
Balance January 1, 2017	$	(2,843	)	$	7		$	(6,720	)	$	(357	)	$	2		$	(9,911	)
Other comprehensive income (loss) before reclassifications	378			2			(15		)	—			1			366
Amounts reclassified from accumulated other comprehensive income (loss)	—			(5		)	124			4			(1		)	122
Net other comprehensive income (loss)	378			(3		)	109			4			—			488
Balance March 31, 2017	$	(2,465	)	$	4		$	(6,611	)	$	(353	)	$	2		$	(9,423	)


^1.	The cumulative translation adjustment gain for the three months ended March 31, 2017 is primarily driven by the weakening of the U.S. dollar (USD) against the European Euro (EUR) and the Brazilian real (BRL).



	Cumulative Translation Adjustment¹			Net Gains (Losses) on Cash Flow Hedging Derivative Instruments			Pension Benefit Plans²			Other Benefit Plans			Unrealized Gain (Loss) on Securities			Total
2016
Balance January 1, 2016	$	(2,333	)	$	(24	)	$	(7,043	)	$	22		$	(18	)	$	(9,396	)
Other comprehensive (loss) income before reclassifications	170			10			(762		)	(79		)	(9		)	(670		)
Amounts reclassified from accumulated other comprehensive income (loss)	—			7			143			(36		)	1			115
Net other comprehensive (loss) income	170			17			(619		)	(115		)	(8		)	(555		)
Balance March 31, 2016	$	(2,163	)	$	(7	)	$	(7,662	)	$	(93	)	$	(26	)	$	(9,951	)


^1.	The cumulative translation adjustment gain for the three months ended March 31, 2016 is primarily driven by the weakening of the USD against the EUR and BRL.


^2.	The Pension Benefit Plans loss recognized in other comprehensive (loss) income during the three months ended March 31, 2016 includes the impact of the re-measurement of the principal U.S. pension plan as of March 31, 2016. See Note 14 for additional information.

The tax (expense) benefit on the ~~first quarter 2015, DuPont announced its intention~~net activity related to ~~buy back shares~~each component of about $4,000 using the distribution proceeds received from Chemours. In connection with the completion of the spin-off of Chemours, the Board of Directors authorized the use of the distribution proceeds to buy back shares of the company's common stockother comprehensive income (loss) were as follows: $2,000 to be purchased and retired by December 31, 2015, which was completed during 2015, with the remainder to be purchased and retired by December 31, 2016. There were no share repurchases under this plan in the first quarter 2016. As of March 31, 2016, in aggregate, the company has paid $2,000 and received and retired 35 million shares.



For the three months ended March 31,	2017			2016
Net gains (losses) on cash flow hedging derivative instruments	$	1		$	(10	)
Pension benefit plans, net	(60		)	351
Other benefit plans, net	(2		)	61
Tax (expense) benefit from income taxes related to other comprehensive income (loss) items	$	(61	)	$	402

~~2014 Share Buyback Plan~~

In January 2014, the company's Board of Directors authorized a $5,000 share buyback plan that replaced the 2011 plan. During the three months ended March 31, 2015, the company purchased and retired 3.6 million shares in the open market for a total cost of $282, which offset the dilution from employee compensation plans in the first quarter of 2015. There were no share repurchases under this plan in the first quarter 2016. As of March 31, 2016, in aggregate, the company has purchased 34.7 million shares at a total cost of $2,353 under the plan. There is no required completion date for the remaining stock purchases.

1820

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)

~~Other Comprehensive Income (Loss)~~

A summary of the ~~changes in~~reclassifications out of accumulated other comprehensive loss ~~for the three months ended March 31, 2016 and 2015~~ is provided as follows:

Three Months Ended Three Months Ended Affected Line Item in Consolidated Income Statements
March 31, 2016 March 31, 2015
Pre-Tax Tax After-Tax Pre-Tax Tax After-Tax
Cumulative translation adjustment⁽¹⁾
$ 170
$ —
$ 170
$ (1,189 ) $ —
$ (1,189 )
Net revaluation and clearance of cash flow hedges to earnings:
Additions and revaluations of derivatives designated as cash flow hedges 16
(6 ) 10
(22 ) 6
(16 ) See (2) below
Clearance of hedge results to earnings:
Foreign currency contracts —
—
—
(8 ) 3
(5 ) Net sales
Commodity contracts 11
(4 ) 7
15
(6 ) 9
Cost of goods sold
Net revaluation and clearance of cash flow hedges to earnings 27
(10 ) 17
(15 ) 3
(12 )
Pension benefit plans:
Net loss (1,191 ) 428
(763 ) (4 ) 1
(3 ) See (2) below
Effect of foreign exchange rates 1
—
1
100
(27 ) 73
See (2) below
Reclassifications to net income:
Amortization of prior service benefit (2 ) 1
(1 ) (2 ) 1
(1 ) See (3) below
Amortization of loss 172
(60 ) 112
209
(74 ) 135
See (3) below
Curtailment loss 49
(17 ) 32
—
—
—
See (3) below
Settlement loss 1
(1 ) —
5
(2 ) 3
See (3) below
Pension benefit plans, net (970 ) 351
(619 ) 308
(101 ) 207

Other benefit plans:
Net loss (124 ) 45
(79 ) —
—
—
See (2) below
Reclassifications to net income:
Amortization of prior service benefit (39 ) 13
(26 ) (52 ) 19
(33 ) See (3) below
Amortization of loss 17
(7 ) 10
19
(7 ) 12
See (3) below
Curtailment gain (30 ) 10
(20 ) —
—
—
See (3) below
Other benefit plans, net (176 ) 61
(115 ) (33 ) 12
(21 )
Net unrealized loss on securities:
Unrealized loss on securities arising during the period (9 ) —
(9 ) —
—
—
See (4) below
Reclassification of gain realized in net income 1
—
1
—
—
—
Other income, net
Net unrealized loss on securities (8 ) —
(8 ) —
—
—

Other comprehensive loss $ (957 ) $ 402
$ (555 ) $ (929 ) $ (86 ) $ (1,015 )



	2017			2016			Consolidated Statements of Income Classification
For the three months ended March 31,	2017			2016			Consolidated Statements of Income Classification
Net gains (losses) on cash flow hedging derivative instruments, before tax:	$	(8	)	$	11		See (1) below
Tax expense (benefit)	3			(4		)	See (2) below
After-tax	$	(5	)	$	7
Amortization of pension benefit plans:
Prior service benefit	(1		)	(2		)	See (3) below
Actuarial losses	190			172			See (3) below
Curtailment loss	—			49			See (3) below
Settlement loss	—			1			See (3) below
Total before tax	$	189		$	220
Tax benefit	(65		)	(77		)	See (2) below
After-tax	$	124		$	143
Amortization of other benefit plans:
Prior service benefit	(17		)	(39		)	See (3) below
Actuarial losses	23			17			See (3) below
Curtailment gain	—			(30		)	See (3) below
Total before tax	$	6		$	(52	)
Tax (benefit) expense	(2		)	16			See (2) below
After-tax	$	4		$	(36	)
Net realized gains (losses) on investments, before tax:	(1		)	1			See (4) below
Tax expense	—			—			See (2) below
After-tax	$	(1	)	$	1
Total reclassifications for the period, after-tax	$	122		$	115

^1.

~~The increase in currency translation adjustment gains over prior year for the three months ended March 31, 2016 is primarily driven by the modest weakening~~Cost of the U.S. dollar (USD) against the European Euro and Brazilian real. The increase in currency translation adjustment losses over prior year for the three months ended March 31, 2015 is primarily driven by the strengthening USD against the European Euro and Brazilian real.goods sold.


^2.	~~These amounts represent changes in accumulated other comprehensive loss excluding changes due to reclassifying amounts to the interim Consolidated Income Statements. See Notes 13 and 14~~Provision for ~~additional information.~~income taxes from continuing operations.


^3.	These accumulated other comprehensive loss components are included in the computation of net periodic benefit cost of the company's pension and other ~~long-term employee~~ benefit plans. See Note 14 for additional information.


^4.	The unrealized loss on securities during the three months ended March 31, 2016 is due to the re-measurement of USD denominated marketable securities held by certain foreign entities at March 31, 2016 with a corresponding offset to cumulative translation adjustment.Other income, net.

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)

~~The changes and after-tax balances of components comprising accumulated other comprehensive loss are summarized below:~~

Cumulative Translation Adjustment Net Revaluation and Clearance of Cash Flow Hedges to Earnings Pension Benefit Plans Other Benefit Plans Unrealized (Loss) Gain on Securities Total
2016

Balance January 1, 2016 $ (2,333 ) $ (24 ) $ (7,043 ) $ 22
$ (18 ) $ (9,396 )
Other comprehensive income (loss) before reclassifications 170
10
(762 ) (79 ) (9 ) (670 )
Amounts reclassified from accumulated other comprehensive income (loss) —
7
143
(36 ) 1
115
Balance March 31, 2016 $ (2,163 ) $ (7 ) $ (7,662 ) $ (93 ) $ (26 ) $ (9,951 )

Cumulative Translation Adjustment Net Revaluation and Clearance of Cash Flow Hedges to Earnings Pension Benefit Plans Other Benefit Plans Unrealized (Loss) Gain on Securities Total
2015

Balance January 1, 2015 $ (919 ) $ (6 ) $ (7,895 ) $ 262
$ 2
$ (8,556 )
Other comprehensive income (loss) before reclassifications (1,189 ) (16 ) 70
—
—
(1,135 )
Amounts reclassified from accumulated other comprehensive income (loss) —
4
137
(21 ) —
120
Balance March 31, 2015 $ (2,108 ) $ (18 ) $ (7,688 ) $ 241
$ 2
$ (9,571 )

Note 13. Financial Instruments

Cash, Cash Equivalents and Marketable Securities

The company's cash, cash equivalents and marketable securities as of March 31, ~~2016~~2017 and December 31, ~~2015~~2016 are comprised of the following:

March 31, 2016 December 31, 2015
Cash and Cash Equivalents Marketable Securities Total Estimated Fair Value Cash and Cash Equivalents Marketable Securities Total Estimated Fair Value
Cash $ 1,630
$ —
$ 1,630
$ 1,938
$ —
$ 1,938

Level 1:
Money market funds $ 412
$ —
$ 412
$ 550
$ —
$ 550
U.S. Treasury securities¹
—
529
529
—
788
788

Level 2:
Certificate of deposit / time deposits²
$ 2,124
$ 94
$ 2,218
$ 2,812
$ 118
$ 2,930

Total cash, cash equivalents and marketable securities $ 4,166
$ 623
$ 5,300
$ 906



	March 31, 2017						December 31, 2016
	Cash and Cash Equivalents		Marketable Securities		Total Estimated Fair Value		Cash and Cash Equivalents		Marketable Securities		Total Estimated Fair Value
Cash	$	1,515	$	—	$	1,515	$	1,892	$	—	$	1,892

Level 2:
Certificate of deposit / time deposits¹	1,832		2,570		4,402		2,713		1,362		4,075

Total cash, cash equivalents and marketable securities	$	3,347	$	2,570			$	4,605	$	1,362


^1.	Available-for-sale securities are reported at estimated fair value with unrealized gains and losses reported as component of accumulated other comprehensive loss. Proceeds from the sale of available-for-sale securities were $260 in the three months ended March 31, 2016.


^2.	~~Held-to-maturity~~Represents held-to-maturity investments ~~are~~ reported at amortized cost.

The estimated fair value of the company's cash equivalents, which approximates carrying value as of March 31, ~~2016~~2017 and December 31, ~~2015,~~2016, was determined using ~~level 1 and level~~Level 2 inputs within the fair value hierarchy. Level ~~1 measurements were based on observed net asset values and level~~ 2 measurements were based on current interest rates for similar investments with comparable credit risk and time to maturity.

~~Table of Contents~~

~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in millions, except per share)~~

The estimated fair value of the held-to-maturity securities, which approximates carrying value as of March 31, ~~2016~~2017 and December 31, ~~2015,~~2016, was determined using ~~level~~Level 2 inputs within the fair value ~~hierarchy, as described below.~~hierarchy. Level 2 measurements were based on current interest rates for similar investments with comparable credit risk and time to maturity. The carrying value approximates fair value due to the short-term nature of the investments.

~~The~~Available-for-sale securities are reported at estimated fair value ~~of the available-for-sale securities~~with unrealized gains and losses reported as a component of March 31, 2016 and December 31, 2015 was determined using level 1 inputs within the fair value hierarchy. Level 1 measurements were based on quoted market prices in active markets for identical assets and liabilities. The available-for-sale securities as of March 31, 2016 and December 31, 2015 are held by certain foreign subsidiaries in which the USD is not the functional currency. The fluctuations in foreign exchange are recorded in accumulated other comprehensive loss. ~~These fluctuations are subsequently reclassified from accumulated other comprehensive loss to earnings in the period in which the marketable~~There were no sales of available-for-sale securities ~~are sold and the gains and losses on these securities offset a portion of the foreign exchange fluctuations in earnings~~ for the ~~company.~~three months ended March 31, 2017. The proceeds from the sale of available-for-sale securities for the three months ended March 31, 2016 were $260.

Debt

The estimated fair value of the company's total debt, including interest rate financial instruments, was determined using level 2 inputs within the fair value hierarchy, as described in the company's ~~2015~~2016 Annual Report in Note 1, “Summary of Significant Accounting Policies.” Based on quoted market prices for the same or similar issues or on current rates offered to the company for debt of the same remaining maturities, the fair value of the company's debt was approximately~~$10,310~~ $10,800 and $~~9,050~~8,890 as of March 31, ~~2016~~2017 and December 31, ~~2015~~2016, respectively.

Derivative Instruments

Objectives and Strategies for Holding Derivative Instruments

In the ordinary course of business, the company enters into contractual arrangements (derivatives) to reduce its exposure to foreign currency, interest rate and commodity price risks. The company has established a variety of derivative programs to be utilized for financial risk management. These programs reflect varying levels of exposure coverage and time horizons based on an assessment of risk.

Derivative programs have procedures and controls and are approved by the Corporate Financial Risk Management Committee, consistent with the company's financial risk management policies and guidelines. Derivative instruments used are forwards, options, futures and swaps. The company has not designated any nonderivatives as hedging instruments.

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)

The company's financial risk management procedures also address counterparty credit approval, limits and routine exposure monitoring and reporting. The counterparties to these contractual arrangements are major financial institutions and major commodity exchanges. The company is exposed to credit loss in the event of nonperformance by these counterparties. The company utilizes collateral support annex agreements with certain counterparties to limit its exposure to credit losses. The company's derivative assets and liabilities are reported on a gross basis in the Condensed Consolidated Balance Sheets. The company anticipates performance by counterparties to these contracts and therefore no material loss is expected. Market and counterparty credit risks associated with these instruments are regularly reported to management.

The notional amounts of the company's derivative instruments were as follows:


	March 31, 2016		December 31, 2015		March 31, 2017		December 31, 2016
Derivatives designated as hedging instruments:
Foreign currency contracts	$	1	$	10
Commodity contracts	265		356		$	282	$	422
Derivatives not designated as hedging instruments:
Foreign currency contracts	9,320		8,065		7,342		9,896
Commodity contracts	16		70		460		7

Foreign Currency Risk

The company's objective in managing exposure to foreign currency fluctuations is to reduce earnings and cash flow volatility associated with foreign currency rate changes. Accordingly, the company enters into various contracts that change in value as foreign exchange rates change to protect the value of its existing foreign currency-denominated assets, liabilities, commitments and cash flows.

~~Table of Contents~~

~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in millions, except per share)~~

The company routinely uses ~~foreign currency exchange contracts, including~~ forward exchange ~~and option~~ contracts to offset its net exposures, by currency, related to the foreign currency-denominated monetary assets and liabilities of its operations. The primary business objective of this hedging program is to maintain

an approximately balanced position in foreign currencies so that exchange gains and losses resulting from exchange rate changes,

net of related tax effects, are minimized. The company also uses foreign currency exchange contracts to offset a portion of the company's exposure to certain foreign currency-denominated revenues so that gains and losses on these contracts offset changes

in the USD value of the related foreign currency-denominated revenues. The objective of the hedge program is to reduce earnings

and cash flow volatility related to changes in foreign currency exchange rates.

~~Interest Rate Risk~~

The company may use interest rate swaps to manage the interest rate mix of the total debt portfolio and related overall cost of borrowing. Interest rate swaps involve the exchange of fixed for floating rate interest payments to effectively convert fixed rate debt into floating rate debt based on USD LIBOR. Interest rate swaps allow the company to achieve a target range of floating rate debt.

Commodity Price Risk

Commodity price risk management programs serve to reduce exposure to price fluctuations on purchases of inventory such as corn, soybeans and soybean meal. The company enters into over-the-counter and exchange-traded derivative commodity instruments to hedge the commodity price risk associated with agricultural commodity exposures.

Derivatives Designated as Cash Flow Hedges

Foreign Currency Contracts

The company uses foreign currency exchange instruments such as forwards and options to offset a portion of the company's exposure to certain foreign ~~currency denominated~~currency-denominated revenues so that gains and losses on these contracts offset changes in the USD value of the related foreign ~~currency denominated~~currency-denominated revenues. In addition, the company occasionally uses forward ~~foreign currency~~ exchange contracts to offset a portion of the company's exposure to certain foreign currency-denominated transactions such as capital expenditures.

Commodity Contracts

The company enters into over-the-counter and exchange-traded derivative commodity instruments, including options, futures and swaps, to hedge the commodity price risk associated with agriculture commodity exposures.

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)

While each risk management program has a different time maturity period, most programs currently do not extend beyond the next two-year period. Cash flow hedge results are reclassified into earnings during the same period in which the related exposure impacts earnings. Reclassifications are made sooner if it appears that a forecasted transaction is not probable of occurring. The following table summarizes the after-tax effect of cash flow hedges on accumulated other comprehensive loss for the three months ended March 31, ~~2016~~2017 and ~~2015:~~2016:


	Three Months Ended						Three Months Ended
	March 31,						March 31,
	2016			2015			2017			2016
Beginning balance	$	(24	)	$	(6	)	$	7		$	(24	)
Additions and revaluations of derivatives designated as cash flow hedges	10			(16		)	2			10
Clearance of hedge results to earnings	7			4			(5		)	7
Ending balance	$	(7	)	$	(18	)	$	4		$	(7	)

At March 31, ~~2016~~2017, an after-tax net ~~loss~~gain of $38 is expected to be reclassified from accumulated other comprehensive loss into earnings over the next 12twelve months.

~~Table of Contents~~

~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in millions, except per share)~~

Derivatives not Designated in Hedging Relationships

Foreign Currency Contracts

The company routinely uses ~~foreign currency exchange contracts, including~~ forward exchange ~~and options~~ contracts to reduce its net exposure, by currency, related to foreign currency-denominated monetary assets and liabilities of its operations so that exchange gains and losses resulting from exchange rate changes are minimized. The netting of such exposures precludes the use of hedge accounting; however, the required revaluation of the forward contracts and the associated foreign currency-denominated monetary assets and liabilities intends to achieve a minimal earnings impact, after taxes. The company also uses foreign currency exchange contracts ~~including forward exchange and options contracts,~~ to offset a portion of the company's exposure to certain foreign currency-denominated revenues so that gains and losses on ~~these~~the contracts offset changes in the USD value of the related foreign currency-denominated revenues.

Commodity Contracts

The company utilizes options, futures and swaps that are not designated as hedging instruments to reduce exposure to commodity price fluctuations on purchases of inventory such as corn, soybeans and soybean meal.

Fair Values of Derivative Instruments

The table below presents the fair values of the company's derivative assets and liabilities within the fair value hierarchy, as described in the company's ~~2015~~2016 Annual Report in Note 1, “Summary of Significant Accounting Policies.”


		Fair Value Using Level 2 Inputs					Fair Value Using Level 2 Inputs
	Balance Sheet Location	March 31, 2016		December 31, 2015		Balance Sheet Location	March 31, 2017		December 31, 2016
Asset derivatives:
Derivatives not designated as hedging instruments:
Foreign currency contracts	Accounts and notes receivable, net	$	51	$	74
Total asset derivatives¹		$	51	$	74
Cash collateral	Other accrued liabilities	$	—	$	7
Foreign currency contracts¹						Accounts and notes receivable, net	$	60	$	182
Commodity contracts						Accounts and notes receivable, net	6		—
Total asset derivatives²							$	66	$	182
Cash collateral¹						Other accrued liabilities	$	—	$	52

Liability derivatives:
Derivatives not designated as hedging instruments:
Foreign currency contracts	Other accrued liabilities	$	138	$	80	Other accrued liabilities	$	69	$	121
Commodity contracts	Other accrued liabilities	1		4
Total liability derivatives¹		$	139	$	84
Total liability derivatives²							$	69	$	121


^1.	Cash collateral held as of March 31, 2017 and December 31, 2016 is related to foreign currency derivatives not designated as hedging instruments.


^2.	The company's derivative assets and liabilities subject to enforceable master netting arrangements totaled ~~$44~~$48 at March 31, ~~2016~~2017 and ~~$35~~$114 at December 31, ~~2015~~.2016.

2324

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)

Effect of Derivative Instruments


	Amount of Gain (Loss) Recognized in OCI¹ (Effective Portion)					Amount of Gain (Loss) Recognized in Income²							Amount of Gain (Loss) Recognized in OCI¹ (Effective Portion)				Amount of Gain (Loss) Recognized in Income²
Three Months Ended March 31,	2016		2015			2016			2015			Income Statement Classification	2017		2016		2017			2016			Income Statement Classification
Derivatives designated as hedging instruments:
Fair value hedges:
Interest rate swaps	$	—	$	—		$	—		$	(1	)	Interest expense
Cash flow hedges:
Foreign currency contracts	—		(2		)	—			8			Net sales
Commodity contracts	16		(20		)	11			(15		)	Cost of goods sold	$	4	$	16	$	8		$	(11	)	Cost of goods sold
	16		(22		)	11			(8		)		4		16		8			(11		)
Derivatives not designated as hedging instruments:
Foreign currency contracts	—		—			(154		)	279			Other income, net³	—		—		(85		)	(154		)	Other income, net³
Foreign currency contracts	—		—			(4		)	—			Net sales	—		—		—			(4		)	Net sales
Foreign currency contracts	—		—			—			(11		)	Income from discontinued operations after income taxes
Commodity contracts	—		—			—			2			Cost of goods sold	—		—		4			—			Cost of goods sold
	—		—			(158		)	270				—		—		(81		)	(158		)
Total derivatives	$	16	$	(22	)	$	(147	)	$	262			$	4	$	16	$	(73	)	$	(169	)


^1.	OCI is defined as other comprehensive income (loss).


^2.	For cash flow hedges, this represents the effective portion of the gain (loss) reclassified from accumulated OCI into income during the period. For the three months ended March 31, ~~2016~~2017 and ~~2015~~2016, there was no material ineffectiveness with regard to the company's cash flow hedges.


^3.	Gain (loss) recognized in other income, net, was partially offset by the related gain (loss) on the foreign currency-denominated monetary assets and liabilities of the company's operations, ~~which were~~ ~~$33~~ ~~and~~ ~~$(200)~~ ~~for the three months ended~~ ~~March 31, 2016~~ ~~and~~ ~~2015, respectively. See~~see Note 5 for additional information.

~~Table of Contents~~

~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Dollars in millions, except per share)~~

Note 14. Long-Term Employee Benefits

~~Pension Plans~~Defined Benefit Pensions

The workforce reductions in ~~the first quarter of~~ 2016 related to the 2016 global cost savings and restructuring plan triggered ~~a curtailment~~curtailments for certain of the company's pension plans, including the principal U.S. pension plan. ~~As a result,~~For the principal U.S. pension plan, the company recorded a curtailment ~~loss~~losses of $49 during the quarter ended March 31, 2016 and re-measured the principal U.S. pension plan as of March 31, 2016. The curtailment loss was driven by the ~~change~~changes in the benefit obligation based on the demographics of the terminated positions partially offset by accelerated recognition of a portion of the prior service benefit. In connection with the re-measurement, the company ~~updated the discount rate assumed at December 31, 2015 from 4.47 percent to 4.13 percent for the plan. The re-measurement increased the underfunded status~~recognized a pre-tax net loss of ~~the pension plan by~~ $1,191 ~~with a corresponding increase in net loss~~ within other comprehensive ~~loss~~income (loss) for the three months ended March 31, 2016.

The following sets forth the components of the company’s net periodic benefit cost for pensions:


	Three Months Ended						Three Months Ended
	March 31,						March 31,
	2016			2015			2017			2016
Service cost	$	47		$	66		$	33		$	47
Interest cost	217			273			195			217
Expected return on plan assets	(338		)	(404		)	(308		)	(338		)
Amortization of loss	172			209			190			172
Amortization of prior service benefit	(2		)	(2		)	(1		)	(2		)
Curtailment loss	49			—			—			49
Settlement loss	1			5			—			1
Net periodic benefit cost - Total	$	146		$	147		$	109		$	146
Less: Discontinued operations	(4		)	1			—			(4		)
Net periodic benefit cost - Continuing operations	$	150		$	146		$	109		$	150

Other ~~Long-Term Employee Benefit Plans~~Post Employment Benefits

As a result of the workforce reductions noted above, ~~a curtailment was~~curtailments were triggered for the company's other ~~long term employee~~post employment benefit plans. The company recorded a curtailment ~~gain~~gains of $30 ~~and re-measured~~for the ~~associated plans as of~~three months ended March 31, 2016. The curtailment ~~gain was~~gains were driven by accelerated recognition of a portion of the prior service benefit partially offset by the change in the benefit obligation based on the demographics of the terminated positions. In connection with the re-measurement, the company updated the associated plans’ weighted average discount rate assumed at December 31, 2015 from 4.30 percent to 3.94 percent. The re-measurement resulted in a net increase of $124 to the company’s other long-term employee benefit obligation with a corresponding increase to net loss within other comprehensive loss for the three months ended March 31, 2016.

~~The following sets forth the components of the company’s net periodic benefit cost for other long-term employee benefits:~~

Three Months Ended
March 31,
2016 2015
Service cost $ 3
$ 4
Interest cost 23
28
Amortization of loss 17
19
Amortization of prior service benefit (39 ) (52 )
Curtailment gain (30 ) —
Net periodic benefit cost- Total
$ (26 ) $ (1 )
Less: Discontinued operations —
1
Net periodic benefit cost - Continuing operations $ (26 ) $ (2 )

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)

The following sets forth the components of the company’s net periodic benefit cost (credit) for other post employment benefits:



	Three Months Ended
	March 31,
	2017			2016
Service cost	$	2		$	3
Interest cost	22			23
Amortization of loss	23			17
Amortization of prior service benefit	(17		)	(39		)
Curtailment gain	—			(30		)
Net periodic benefit cost (credit)- Total	$	30		$	(26	)

Note 15. Segment Information

Segment operating earnings is defined as income (loss) from continuing operations before income taxes excluding significant pre-tax benefits (charges), non-operating pension and other ~~postretirement employee~~post employment benefit (OPEB) costs, exchange gains (losses), corporate expenses and interest. Non-operating pension and ~~other postretirement employee benefit~~OPEB costs includes all of the components of net periodic benefit cost from continuing operations with the exception of the service cost component. DuPont Sustainable Solutions, previously within the company's Safety & Protection segment (now Protection Solutions) was comprised of two business units: clean technologies and consulting solutions. Effective January 1, 2016, the clean technologies business unit is reported within the Industrial Biosciences segment, and the consulting solutions business unit is reported within Other. Effective July 1, 2015, certain corporate expenses are included in segment operating earnings. Reclassifications of prior year data have been made to conform to current year classifications.


Three Months Ended March 31,	Agriculture¹		Electronics & Communications		Industrial Biosciences		Nutrition & Health		Performance Materials		Protection Solutions		Other			Total		Agriculture¹		Electronics & Communications		Industrial Biosciences		Nutrition & Health		Performance Materials		Protection Solutions		Other			Total
2017
Net sales																		$	3,928	$	510	$	368	$	789	$	1,368	$	747	$	33		$	7,743
Operating earnings																		1,236		89		75		121		355		177		(62		)	1,991

2016
Net sales	$	3,786	$	452	$	352	$	801	$	1,249	$	729	$	36		$	7,405	$	3,786	$	452	$	352	$	801	$	1,249	$	729	$	36		$	7,405
Operating earnings	1,101		59		63		104		273		176		(59		)	1,717		1,101		59		63		104		273		176		(59		)	1,717

2015
Net sales	$	3,937	$	517	$	350	$	813	$	1,381	$	790	$	49		$	7,837
Operating earnings	1,138		79		54		86		317		167		(31		)	1,810


^1.	As of March 31, ~~2016~~,2017, Agriculture net assets were ~~$7,454~~,$9,131, an increase of ~~$703~~$2,789 from ~~$6,751~~$6,342 at December 31, ~~2015~~.2016. The increase was primarily due to higher trade receivables related to normal seasonality in the sales and cash collections cycle.

Reconciliation to interim Consolidated Income Statements

Three Months Ended March 31,
2016 2015
Total segment operating earnings $ 1,717
$ 1,810
Significant pre-tax charges not included in segment operating earnings (68 ) (2 )
Non-operating pension and other postretirement employee benefit costs (74 ) (86 )
Net exchange (losses) gains¹
(121 ) 79
Corporate income (expenses)^2,3,4,5
273
(166 )
Interest expense (92 ) (84 )
Income from continuing operations before income taxes $ 1,635
$ 1,551



	Three Months Ended March 31,
	2017			2016
Total segment operating earnings	$	1,991		$	1,717
Significant pre-tax benefits (charges) not included in segment operating earnings	14			(68		)
Non-operating pension and other post employment benefit costs	(104		)	(74		)
Exchange losses	(59		)	(121		)
Corporate (expenses) income^1,2,3,4,5	(196		)	273
Interest expense	(84		)	(92		)
Income from continuing operations before income taxes	$	1,562		$	1,635


^1.	Includes a charge of $(40) associated with remeasuring the company's Ukrainian hryvnia net monetary assets in the three months ended March 31, 2015, which were recorded in other income, net in the company's interim Consolidated Income Statements. See Note 5 for additional information.


^2.	Includes transaction costs associated with the planned merger with Dow and related activities of $(170) and $(24), in the three months ended March 31, 2017 and 2016, respectively, which were recorded in selling, general and administrative expenses in the company's interim Consolidated Income Statements. See Note 2 for additional information.


^2.	Includes a $(4) charge recorded in employee separation / asset related charges, net in the company's interim Consolidated Income Statement for the three months ended March 31, 2017 associated with the 2017 restructuring program. See Note 4 for additional information.


^3.	Includes a $47 benefit on accrued interest reversals recorded in other income, net, in the company's interim Consolidated Income Statement for the three months ended March 31, 2017, related to a reduction in the company’s unrecognized tax benefits due to the closure of various tax statutes of limitations. See Note 6 for additional information.


^4.	Includes a gain of $369 associated with the sale of DuPont (Shenzhen) Manufacturing Limited entity, which held certain buildings and other assets. The gain was recorded in other income, net, in the company's interim Consolidated Income Statement for the three months ended March 31, 2016. See Note 3 for additional information.


^4.5.	Includes a $14 net benefit recorded in employee separation / asset related charges, net in the company's interim Consolidated Income Statement for the three months ended March 31, 2016 associated with the 2016 global cost savings and restructuring plan. See Note 4 for additional information.


^5.	Includes transaction costs associated with the separation of the Performance Chemicals segment of $(12) in the three months ended March 31, 2015, which were recorded in other operating charges in the company's interim Consolidated Income Statements. See Note 3 for additional information.

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share)

~~Additional~~Significant Pre-tax Benefits (Charges) Not Included in Segment ~~Details~~Operating Earnings

The three months ended March 31, ~~2016~~2017 and ~~2015,~~2016, respectively, included the following significant pre-tax benefits (charges) which are excluded from segment operating earnings:

Three Months Ended March 31,
2016 2015
Agriculture^1,2,3
$ (73 ) $ 35
Electronics & Communications²
7
—
Industrial Biosciences²
1
—
Nutrition & Health²
1
—
Performance Materials²
(4 ) —
Protection Solutions²
3
—
Other^2,4
(3 ) (37 )
$ (68 ) $ (2 )



	Three Months Ended March 31,
	2017			2016
Agriculture^1,4,5	$	—		$	(73	)
Electronics & Communications^2,4	(5		)	7
Industrial Biosciences^2,4	(6		)	1
Nutrition & Health^2,3,4	160			1
Performance Materials^2,4	(11		)	(4		)
Protection Solutions^2,4	(124		)	3
Other⁴	—			(3		)
	$	14		$	(68	)

^1.

Includes $23 for reduction in accrual recorded in other operating charges in the company's interim Consolidated Income Statement for the three months ended March 31, 2016, ~~for customer claims related to the use of the Imprelis~~^® ~~herbicide. The three months ended March 31, 2015, includes $35 of net insurance recoveries recorded in other operating charges for recovery of costs~~ for customer claims related to the use of the Imprelis^® herbicide.


^2.	Includes a ~~$(16) net~~$(148) restructuring charge ~~recorded~~ in employee separation / asset related charges, net in the company's interim Consolidated Income Statement for the three months ended March 31, 2017, associated with the 2017 restructuring program. See Note 4 for additional information.


^3.	Includes a $162 gain recorded in other income, net, in the company's interim Consolidated Income Statement for the three months ended March 31, 2017, associated with the sale of the company's global food safety diagnostic business. See Note 3 for additional information.

^4.

Includes a $(16) net restructuring charge in employee separation / asset related charges, net in the company's interim Consolidated Income Statement for the three months ended March 31, 2016, associated with the 2016 global cost savings and restructuring program. The net charge impacted segment earnings as follows: Agriculture - $(21), Electronics & Communications - $7, Industrial Biosciences - $1, Nutrition & Health - $1, - Performance Materials - $(4), Protection Solutions - $3 and Other - $(3). See Note 4 for additional information.


^3.5.	Includes a $(75) restructuring charge recorded in employee separation / asset related charges, net in the company's interim Consolidated Income Statement for the three months ended March 31, 2016, related to the decision not to re-start the insecticide manufacturing facility at the La Porte site located in La Porte, Texas. See Note 4 for additional information.


^4.	~~Includes a $(37) pre-tax impairment charge recorded in employee separation / asset related charges, net for a cost basis investment. See Note 4 for additional information.~~


Item 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Cautionary Statements About Forward-Looking Statements

This report contains forward-looking statements which may be identified by their use of words like “plans,” “expects,” “will,” “anticipates,” “believes,” “intends,” “projects,” “estimates” or other words of similar meaning. All statements that address expectations or projections about the future, including statements about the company's strategy for growth, product development, regulatory approval, market position, anticipated benefits of recent acquisitions, timing of anticipated benefits from restructuring actions, outcome of contingencies, such as litigation and environmental matters, expenditures, and financial results, ~~and timing~~Forward-looking statements including statements about the consummation of ~~as well as~~and expected benefits, including synergies, from the ~~proposed~~planned merger with The Dow Chemical Company (Dow) (the Merger Transaction) and ~~intended post-merger separations,~~the proposed separation of the combined company’s (DowDuPont) agriculture business, specialty products business and material science business through a series of tax-efficient transactions (the Intended Business Separations), and the FMC Transactions, as defined below, in which, among other things, FMC will acquire the Divested Ag Business, as defined below and DuPont will acquire the Acquired H&N Business, as defined below, and the anticipated benefits thereof. These and other forward-looking statements, including the failure to consummate the Merger Transaction or FMC Transactions or to make or take any filing or other action required to consummate such transactions in a timely manner or at all, are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed in any forward-looking statements.

Forward-looking statements are based on certain assumptions and expectations of future events which may not be accurate or realized. Forward-looking statements also involve risks and uncertainties, many of which are beyond the company's control. ~~Some of the important factors that could cause the company's actual results to differ materially from those projected in any such forward-looking statements are:~~

Risks related to the agreement between DuPont and Dow to effect an all-stock merger of equals, including the completion of the proposed transaction on anticipated terms and timing, the ability to fully and timely realize the expected benefits of the proposed transaction and risks related to the intended business separations contemplated to occur after the completion of the proposed transaction. Important risk factors relating to the proposed transaction and intended business separations include, but are not limited to, (i) the completion of the proposed transaction on anticipated terms and timing, including obtaining shareholder and regulatory approvals, anticipated tax treatment, unforeseen liabilities, future capital expenditures, revenues, expenses, earnings, synergies, economic performance, indebtedness, financial condition, losses, future prospects, business and management strategies for the management, expansion and growth of the new combined company’s operations and other conditions to the completion of the merger, (ii) the ability of Dow and DuPont to integrate the business successfully and to achieve anticipated synergies, risks and costs and pursuit and/or implementation of the potential separations, including anticipated timing, any changes to the configuration of businesses included in the potential separation if implemented, (iii) the intended separation of the agriculture, material science and specialty products businesses of the combined company post-mergers in one or more tax efficient transactions on anticipated terms and timing, including a number of conditions which could delay, prevent or otherwise adversely affect the proposed transactions, including possible issues or delays in obtaining required regulatory approvals or clearances, disruptions in the financial markets or other potential barriers, (iv) potential litigation relating to the proposed transaction that could be instituted against Dow, DuPont or their respective directors, (v) the risk that disruptions from the proposed transaction will harm Dow’s or DuPont’s business, including current plans and operations, (vi) the ability of Dow or DuPont to retain and hire key personnel, (vii) potential adverse reactions or changes to business relationships resulting from the announcement or completion of the merger, (viii) uncertainty as to the long-term value of DowDuPont common stock, (ix) continued availability of capital and financing and rating agency actions, (x) legislative, regulatory and economic developments, (xi) potential business uncertainty, including changes to existing business relationships, during the pendency of the merger that could affect Dow’s and/or DuPont’s financial performance, (xii) certain restrictions during the pendency of the merger that may impact Dow’s or DuPont’s ability to pursue certain business opportunities or strategic transactions and (xiii) unpredictability and severity of catastrophic events, including, but not limited to, acts of terrorism or outbreak of war or hostilities, as well as management’s response to any of the aforementioned factors. These risks, as well as other risks associated with the proposed merger, are more fully discussed in the joint proxy statement/prospectus included in the preliminary registration statement on Form S-4 filed with the SEC in connection with the proposed merger. While the ~~list~~lists of factors presented here ~~is,~~ and ~~the list of factors presented~~ in the ~~preliminary registration statement on Form S-4~~Registration Statement are considered representative, no such list should be considered to be a complete statement of all potential risks and uncertainties. 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 disruption, operational problems, financial loss, legal liability to third parties and similar risks, any of which could have a material adverse effect on ~~Dow’s or~~ DuPont’s consolidated financial condition, results of operations, credit rating or ~~liquidity;~~liquidity. Some of the important factors that could cause the company's actual results to differ materially from those projected in any such forward-looking statements are:

Risks related to the DowDuPont Merger, the Intended Business Separations and the FMC Transactions including, but not limited to, (i) the completion of the Merger Transaction and the FMC Transactions on anticipated terms and timing, including obtaining regulatory approvals, anticipated tax treatment, unforeseen liabilities, future capital expenditures, revenues, expenses, earnings, synergies, economic performance, indebtedness, financial condition, losses, future prospects, business and management strategies for the management, expansion and growth of the new combined company’s operations or the Acquired H&N Business and other conditions to the completion of the Merger Transaction and the FMC Transactions, (ii) the possibility that the Merger Transaction and the FMC Transactions may not close, including because the various approvals, authorizations and declarations of non-objections from certain regulatory and governmental authorities with respect to either the Merger Transaction or the FMC Transactions may not be obtained, on a timely basis or otherwise, including that these regulatory or governmental authorities may not approve of FMC as an acceptable purchaser of the Divested Ag Business in connection with the FMC Transactions or may impose conditions on the granting of the various approvals, authorizations and declarations of non-objections, including requiring the respective Dow, DuPont and FMC businesses, including the Acquired H&N Business (in the case of DuPont) and the Divested Ag Business (in the case of FMC), to divest certain assets if necessary to obtain certain regulatory approvals or otherwise limiting the ability of the combined company to integrate parts of the Dow and DuPont businesses and/or the DuPont and Health and Nutrition businesses, (iii) the ability of DuPont to integrate the Acquired H&N Business successfully and to achieve anticipated synergies, (iv) potential litigation or regulatory actions relating to the Merger Transaction or the FMC Transactions that could be instituted against DuPont or its directors, (v) the risk that disruptions from the Merger Transaction or the FMC Transactions will harm DuPont’s business, including current plans and operations, (vi) the ability of DuPont to retain and hire key personnel, (vii) potential adverse reactions or changes to business relationships resulting from the announcement or completion of the Merger Transaction or the FMC Transactions, (viii) uncertainty as to the long-term value of DowDuPont common stock, (ix) continued availability of capital and financing and rating agency actions, (x) legislative, regulatory and economic developments, (xi) potential business uncertainty, including changes to existing business relationships, during the pendency of the Merger Transaction or the FMC Transactions that could affect DuPont’s financial performance, (xii) certain restrictions during the pendency of the Merger Transaction or the FMC Transactions that may impact DuPont’s ability to pursue certain business opportunities or strategic transactions and (xiii) unpredictability and severity of catastrophic events, including, but not limited to, acts of terrorism or outbreak of war or hostilities, as well as management’s response to any of the aforementioned factors. These risks, as well as other risks associated with the Merger Transaction or the FMC Transactions, are more fully discussed in (1) DuPont’s most recently filed Form 10-K, 10-Q and 8-K reports, (2) DuPont’s subsequently filed Form 10-K and 10-Q

reports and (3) the joint proxy statement/prospectus included in the Registration Statement filed with the SEC in connection with the Merger Transaction;

Volatility in energy and raw material prices;

Failure to develop and market new products and optimally manage product life cycles;

Outcome of significant litigation and environmental matters, including those related to divested businesses, including realization of associated indemnification assets, if any;

Failure to appropriately manage process safety and product stewardship issues;

Ability to obtain and maintain regulatory approval for its products especially in the Agriculture segment;

Failure to realize all of the expected benefits from cost and productivity initiatives to the extent and as anticipated;

Effect of changes in tax, environmental and other laws and regulations or political conditions in the United States of America (U.S.) and other countries in which the company operates;

Conditions in the global economy and global capital markets, including economic factors such as inflation, deflation, fluctuation in currency rates, interest rates and commodity prices;

Failure to appropriately respond to market acceptance, government rules, regulations and policies affecting products based on biotechnology;

Impact of business disruptions, including supply disruptions, and security threats, regardless of cause, including acts of sabotage, cyber-attacks, terrorism or war, natural disasters and weather events and patterns which could affect demand as well as availability of product, particularly in the Agriculture segment;

Ability to discover, develop and protect new technologies and enforce the company's intellectual property rights; and

Successful integration of acquired businesses and separation of underperforming or non-strategic assets or businesses.

For further discussion of some of the important factors that could cause the company's actual results to differ materially from those projected in any such forward-looking statements, see the Risk Factors discussion set forth under Part I, Item 1A of the company's ~~2015~~2016 Annual Report.

Recent Developments

DuPont Dow Merger of Equals

On December 11, 2015, DuPont and ~~The~~ Dow ~~Chemical Company (Dow)~~ announced entry into an Agreement and Plan of Merger, as amended on March 31, 2017 (the Merger Agreement), under which the companies will combine in an all-stock merger of ~~equals.~~equals (the Merger Transaction) subject to satisfaction of customary closing conditions, including receipt of regulatory approval. The ~~companies anticipate that the merger will close and become effective (the Effective Time), in the second half of 2016 and the~~ combined company will be named ~~DowDuPont.~~DowDuPont Inc. (DowDuPont). Following the consummation of the ~~merger,~~Merger Transaction, DuPont and Dow intend to pursue, subject to the receipt of approval by the ~~board~~Board of ~~directors~~Directors of DowDuPont, the separation of the combined company’s agriculture business, specialty products business and material science business through a series of tax-efficient transactions (collectively, the Intended Business ~~Separations.)~~Separations).

On March 27, 2017, DuPont and Dow announced that the European Commission (EC) granted conditional regulatory clearance in Europe for the Merger Transaction conditional on DuPont and Dow fulfilling certain commitments. DuPont is required to sell certain assets related to its Crop Protection business and research and development (R&D) organization, specifically the company’s Cereal Broadleaf Herbicides and Chewing Insecticides portfolios, including Rynaxypyr^®, Cyazypyr^® and Indoxacarb, as well as the Crop Protection R&D pipeline and organization, excluding seed treatment, nematicides, and late-stage R&D programs. The company will continue to develop and bring to market its late-stage Crop Protection R&D programs and retain the personnel needed to support the Crop Protection marketed products and R&D programs not required to be divested per the EC’s conditional approval.

On March 31, 2017, DuPont entered into a definitive agreement (the FMC Transaction Agreement) with FMC Corporation (FMC). Under the FMC Transaction Agreement, FMC will acquire the Crop Protection business and R&D assets that DuPont is required to divest in order to obtain EC approval of the Merger Transaction as described above, (the Divested Ag Business), and DuPont has agreed to acquire certain assets relating to FMC’s Health and Nutrition segment, excluding its Omega-3 products, (the Acquired H&N Business) (collectively, the FMC Transactions). Additionally, FMC will pay DuPont $1.2 billion in cash, subject to certain adjustments as set forth in the FMC Transaction Agreement, which reflects the difference in value between the Divested Ag Business and the Acquired H&N Business. DuPont will retain accounts receivable and accounts payable associated with the Divested Ag Business, with an expected net value of $425 million at closing. The assets associated with the Divested Ag Business generated revenues in 2016 of about $1.4 billion. The FMC Health and Nutrition business being acquired, which includes texturants as food ingredients and pharmaceutical excipients, generated approximately $700 million in revenues in 2016.

To accommodate the transaction with FMC, DuPont and Dow have amended the Merger Agreement to extend the “Outside Date” to August 31, 2017, and the companies anticipate closing of the merger to occur no sooner than August 1, 2017, subject to satisfaction of customary closing conditions, including receipt of regulatory approvals. The companies still expect the Intended Business Separations to occur within 18 months after closing the Merger Transaction. In addition, Dow and DuPont ~~currently anticipate that~~now expect the ~~intended business separation transactions~~first step in the Intended Business Separations process will be ~~consummated as soon as practicable following~~ the spin-off of the post-merger material science business. About $3 billion in aggregate cost synergies are currently expected to be realized on a run-rate basis by the combined businesses within 24 months after consummation of the ~~merger, but consummation~~Merger Transaction, with approximately $1.6 billion from the material science business; approximately $1 billion from the agriculture business; and approximately $0.4 billion from the specialty products business.

In connection with obtaining regulatory clearance for the Merger Transaction, on February 2, 2017, Dow announced that it will divest its global Ethylene Acrylic Acid (EAA) copolymers and ionomers business to SK Global Chemical Co., LTD. Consummation of the ~~intended business separation transactions~~divestiture is conditioned on closing the Merger Transaction and regulatory clearance for the divestiture as other customary closing conditions.

See Note 2 to the interim Consolidated Financial Statements for additional information.

Settlement of PFOA MDL

As previously reported, approximately 3,550 lawsuits have been filed in various federal and state courts in Ohio and West Virginia alleging personal injury from exposure to perfluorooctanoic acid and its salts, including the ammonium salt (PFOA), in drinking water as a result of the historical manufacture or use of PFOA at the Washington Works plant outside Parkersburg, West Virginia. That plant is now owned and/or operated by The Chemours Company (Chemours). These personal injury lawsuits were consolidated in multi-district litigation in the United States District Court for the Southern District of Ohio (the MDL). In February 2017, DuPont and plaintiffs’ counsel agreed to a settlement in principle of the MDL; the parties executed the definitive settlement agreements in March 2017. The total settlement amount is $670.7 million in cash, half of which will be paid by Chemours and half paid by DuPont. In exchange for that payment, DuPont and Chemours will receive a complete release of all claims by the settling plaintiffs. The settlement was entered into solely by way of compromise and is not ~~expected to exceed 18-24 months after the merger.~~in any way an admission of liability or fault by DuPont or Chemours.

~~During the three months ended~~As a result at March 31, ~~2016~~2017, the company ~~has incurred $24~~increased the accrual related to the MDL to $670.7 million and the indemnification asset for indemnification by Chemours to $335 million. The company recorded a charge of ~~costs in connection with the planned merger with Dow. These costs were recorded in selling, general and administrative expenses~~$335 million ($224 million net of tax) to loss from discontinued operations in the company's interim Consolidated Income ~~Statements~~Statement for the three months ended March 31, ~~2016, and primarily include financial advisory, legal, accounting, consulting and other advisory fees and expenses.~~2017 for the remainder of the settlement not subject to indemnification by Chemours. See Note 11 to the interim Consolidated Financial Statements for additional information.

~~DuPont (Shenzhen) Manufacturing Limited~~2017 Restructuring Program

In the first quarter 2017, DuPont committed to take actions to improve plant productivity and better positions its businesses for productivity and growth before and after the anticipated closing of the Merger Transaction. In connection with these actions, the company expects to incur pre-tax charges of $326 million, comprised of $293 million of asset-related charges and $33 million in severance and related benefit costs (the 2017 restructuring program). The charges primarily relate to the closure of the Protection Solutions segment's Cooper River manufacturing site located near Charleston, South Carolina. The actions associated with this program are expected to be substantially complete by the end of 2017. The company anticipates including savings associated with these actions against the targeted $3 billion of cost synergies associated with the Merger Transaction.

Of the $326 million of pre-tax charges discussed above, $152 million was recognized during the three months ended March 31, 2017 in employee separation / asset related charges, net, in the company's interim Consolidated Income Statement, consisting of $33 million of severance and related benefit costs and $119 million of asset-related charges. The asset-related charges mainly consist of accelerated depreciation associated with the closure of the Cooper River manufacturing site. The remainder of the charges relate to accelerated depreciation, the majority of which will be recognized in the second quarter.

Sale of Food Safety Diagnostic Business

In December 2016, the company ~~sold 100 percent of~~announced an agreement to sell its ~~ownership interest in DuPont (Shenzhen) Manufacturing Limited to the Feixiang Group. The sale~~global food safety diagnostic business, a part of the ~~entity~~Nutrition & Health segment, to Hygiena LLC. The transaction closed in February 2017 and resulted in a pre-tax gain of ~~$369~~$162 million ($~~214~~86 million net of tax). The gain was recorded in other income, net in the company's interim Consolidated Income Statements for the three months ended March 31, ~~2016 and reflected as a Corporate item.~~

~~La Porte Plant, La Porte, Texas~~

In March 2016, DuPont announced its decision to not re-start the Agriculture segment’s insecticide manufacturing facility at the La Porte site located in La Porte, Texas. The facility manufactures Lannate^® ~~and Vydate~~^® insecticides and has been shut down since November 2014. As a result of this decision, during the three months ended March 31, 2016, a pre-tax charge of $75 million was recorded in employee separation / asset related charges, net which included $41 million of asset related charges, $18 million of contract termination costs, and $16 million of employee severance and related benefit costs. This charge is not reflected in Agriculture's segment operating earnings for the three months ended March 31, 2016.2017.

Agriculture's segment operating earnings was negatively impacted by $40 million from the shutdown of the La Porte manufacturing facility for the three months ended March 31, 2016 as compared to the same period in prior year due to lower sales of Lannate^® ~~and Vydate~~^® ~~insecticides, fixed overhead costs and write-off of inventory. The DuPont Crop Protection business has identified alternative sources for the supply of methomyl, the active ingredient in Lannate~~^® in order to meet the majority of the expected demand for this product. These new sources have either been or are in the process of being registered in the relevant markets. In addition, the business is actively pursuing the procurement of oxamyl, the active ingredient in Vydate^®.

~~2016 Global Cost Savings and Restructuring Plan~~

In December 2015, DuPont announced a 2016 global cost savings and restructuring plan designed to reduce $730 million in costs in 2016 compared with 2015, which represents a reduction of operating costs on a run-rate basis of about $1.0 billion by end of 2016. As part of the plan, the company committed to take structural actions across all businesses and staff functions globally to operate more efficiently by further consolidating businesses and aligning staff functions more closely with them. In the first quarter 2016, in connection with the restructuring actions, the company recorded a net pre-tax charge to earnings of $2 million, comprised of $(44) million of severance and related benefit costs, $37 million of asset related charges, and $9 million of contract termination costs.

~~The restructuring actions associated with this charge are expected to impact approximately 10 percent of DuPont’s workforce and to be substantially complete in 2016.~~

~~Separation of Performance Chemicals~~

On July 1, 2015 (the Distribution Date), DuPont completed the separation of its Performance Chemicals segment through the spin-off of all of the issued and outstanding stock of The Chemours Company (Chemours). The financial position and results of operations of the Performance Chemicals segment are presented as discontinued operations and, as such, have been excluded from continuing operations and segment results for all periods presented.

Results of Operations

Overview

The following is a summary of the results of continuing operations for the three months ended March 31, ~~2016:~~2017:

Net ~~Sales~~sales were ~~$7.4~~$7.7 billion, ~~down 6~~5 percent ~~from $7.8 billion in~~above the same period last year, ~~principally~~ reflecting a 4 percent ~~negative currency impact~~volume increase and 21 percent ~~lower volume. Local price and product mix gains in Agriculture and volume growth in Nutrition & Health were more than offset by declines~~higher local prices. Sales grew in most ~~of the remaining~~segments, led by Agriculture, Performance Materials, and Electronics & Communications.

Segment operating earnings increased in all reportable segments driven by higher volumes. Segment operating margins expanded in most reportable segments.

~~Agriculture net sales~~First quarter results include pre-tax charges of $322 million, comprised of $170 million of costs in connection with the planned merger with Dow and ~~operating earnings reflected local pricing gains, improved mix from new products, higher corn area from a strong start~~the Intended Business Separations, including costs relating to ~~the North American corn season,~~integration and separation, and $152 million of restructuring charges, partially offset by a ~~negative currency impact and lower crop protection and soybean volumes.~~

~~Growth~~$162 million gain from the sale of the global food safety diagnostics business. First quarter results in ~~segment operating earnings from Nutrition & Health, Industrial Biosciences, and Protection Solutions was more than offset by declines in~~prior year included a pre-tax gain of $369 million for the ~~remaining segments.~~sale of the DuPont (Shenzhen) Manufacturing Limited entity.

Income from continuing operations after taxes was $1.3 billion versus $1.2 billion ~~versus $1.0 billion~~for the same period in the prior year, principally reflecting the gain on the sale of DuPont (Shenzhen) Manufacturing Limited and cost savings related to the 2016 cost savings and restructuring plan, partly offset by lower segment operating earnings.year.

~~The 2016 cost savings and restructuring plan is on track to deliver $730 million in cost reductions in 2016 versus prior year.~~

Net Sales

Net sales for the three months ended March 31, ~~2016~~2017 were ~~$7.4~~$7.7 billion, up 5 percent versus ~~$7.8~~$7.4 billion in the prior year ~~a 6 percent decline, attributable to a~~reflecting 4 percent ~~negative impact from weaker currencies, particularly~~higher volume, and a 1 percent increase in local prices. Worldwide sales volume increased 4 percent, largely driven by a 16 percent volume increase in Asia Pacific where Performance Materials and Electronics & Communications had significant growth. Volume increased 8 percent in EMEA, driven by increased seed sales in Eastern Europe, and higher sales in the ~~Brazilian real~~Performance Materials and ~~European Euro, and 2 percent lower volume. Lower volume~~Protection Solutions segments. The increase in local price principally reflects ~~reduced demand for crop protection insecticide products and soybean seeds, competitive pressures impacting Solamet~~^® ~~paste, lower demand for ethylene and ethylene-based products and lower demand for~~higher seed prices, primarily in Latin America, partly offset by a decline in the Protection Solutions ~~products. Lower volumes were partially offset by increased corn seed volumes in North America and Brazil and broad-based growth in Nutrition & Health.~~segment. Net sales in developing markets, declined 4 percent to $2.1 billion, reflecting a 9 percent negative currency impact, largely due to weaker currencies in Latin America and Eastern Europe, partially offset by 5 percent increase in volume and local price, primarily from Agriculture and Nutrition & Health in Europe and Asia Pacific, principally China. Developing marketswhich include China, India, and countries ~~located~~ in Southeast Asia, Latin America, Eastern and Central Europe, Middle East, and Africa, were $2.4 billion, up 15 percent, driven by higher volume. Volume largely reflects strong growth in Electronics & Communications and ~~Southeast Asia.~~Performance Materials in developing Asia Pacific, and Agriculture in developing EMEA. Sales in developing markets represent 31 percent of total sales versus 29 percent last year.

The ~~tables~~table below shows a regional breakdown of net sales based on location of customers and percentage variances from the prior year:


	Three Months Ended March 31, 2016				Percent Change Due to:								Three Months Ended March 31, 2017			Percent Change Due to:
	Net Sales ($ Billions)		Percent Change vs. 2015		Local Price and Product Mix		Currency		Volume		Portfolio and Other		Net Sales ($ Billions)		Percent Change vs. 2016	Local Price and Product Mix		Currency		Volume		Portfolio and Other
Worldwide	$	7.4	(6	)	—		(4	)	(2	)	—		$	7.7	5	1		—		4		—
U.S. & Canada	3.6		(3	)	(1	)	—		(1	)	(1	)	3.6		—	1		—		(1	)	—
Europe, Middle East & Africa (EMEA)	2.0		(8	)	1		(6	)	(3	)	—		2.1		5	1		(3	)	8		(1	)
Asia Pacific	1.3		(6	)	(3	)	(2	)	(3	)	2		1.4		13	(1	)	(1	)	16		(1	)
Latin America	0.5		(12	)	7		(17	)	(1	)	(1	)	0.6		14	7		11		(3	)	(1	)

Cost of Goods Sold (COGS)

COGS ~~totaled $4.2 billion~~ for the first quarter ~~2016 versus $4.5~~2017 increased 3 percent to $4.4 billion from $4.2 billion in the prior ~~year, a 6~~year. The increase principally reflects 4 percent ~~decrease, principally due to the strengthening of the U.S. dollar versus global currencies, lower volume and lower costs for raw materials, energy and freight.~~higher sales volume. COGS as a percentage of ~~net~~ sales ~~was essentially flat~~decreased to 56 percent from 57 percent in the prior year, ~~over year at about 57 percent.~~

reflecting higher selling prices, lower unit costs and favorable mix.

Other Operating Charges

Other operating charges were ~~$185~~$204 million for the first quarter ~~2016~~of 2017 versus ~~$148~~$185 million in the prior year, ~~a 25 percent increase, primarily due to litigation expenses and~~principally reflecting the absence of ~~$35 million of insurance recoveries related to Imprelis~~^® ~~herbicide claims, partially offset by~~ a $23 million prior-year benefit from a reduction in the estimated liability related to Imprelis^® herbicide claims and the absence of separation costs associated with the separation of Performance Chemicals. Additional information related to the separation is included in Note 3 to the interim Consolidated Financial Statements.claims.

Selling, General and Administrative Expenses (SG&A)

SG&A ~~totaled $1.1~~expenses were $1.3 billion for the first quarter ~~2016~~of 2017 versus ~~$1.2~~$1.1 billion in the prior year, ~~an 8 percent decrease,~~with the increase primarily ~~due to lower~~driven by costs in connection with the planned merger with Dow and related ~~to the 2016 cost savings~~activities and ~~restructuring plan and the strengthening of the U.S. dollar versus global currencies,~~increases in commission expense, partially offset by cost savings. During the three months ended March 31, 2017 and 2016, the company incurred $170 million and $24 million, respectively, of transaction costs associated with the planned merger with ~~the Dow and related activities.~~Dow. SG&A was approximately 1516 percent and 1615 percent of net sales for the ~~first quarter~~three months ended March 31, 2017 and 2016, ~~and 2015,~~ respectively. ~~The decrease as a percentage of net sales was due to the lower costs noted above.~~

Research and Development Expense (R&D)

R&D ~~totaled~~expense was relatively flat at $416 million and $418 million ~~for~~in the first quarter 2017 and 2016, versus and $479 million in the prior year, a 13 percent decrease, primarily due to lower costs related to the 2016 cost savings and restructuring plan and the strengthening of the U.S. dollar versus global currencies.respectively. R&D was approximately 5 percent and 6 percent of net sales for the ~~first quarter~~three months ended March 31, 2017 and 2016, ~~and 2015,~~ respectively.

Other Income, Net

Other income, net totaled ~~$372~~$306 million for the first quarter ~~2016, an increase~~ of ~~$173 million~~2017 compared to ~~$199~~$372 million in the prior year, a decrease of $66 million, primarily due to the change in net gains on sales of businesses and other assets period over period, partially offset with a decrease in pre-tax exchange losses and the reversal of accrued interest related to unrecognized tax benefits. The first quarter 2017 included pre-tax gain of $162 million associated with the sale of the global food safety diagnostics business. The first quarter 2016 included a pre-tax gain of $369 million associated with the sale of DuPont (Shenzhen) Manufacturing Limited ~~entity, partially offset by an increase in net pre-tax exchange losses of $200 million. The increase in pre-tax net exchange losses was driven by losses on foreign currency exchange contracts.~~ entity.

See ~~Notes~~Note 5 ~~and 13~~ to the interim Consolidated Financial Statements for ~~further discussion of the company's policy of hedging the foreign currency-denominated monetary assets and liabilities.~~ additional information.

~~Additional information related to the company's other income, net, is included in Note 5 to the interim Consolidated Financial Statements.~~

Interest Expense

Interest expense totaled ~~$92~~$84 million in the first quarter ~~2016,~~2017 as compared to ~~$84~~$92 million in ~~2015, an increase of 10 percent,~~the prior year, The $8 million decrease was primarily due to lower ~~capitalized~~ interest ~~related to construction projects,~~on long-term debt, partially offset by ~~lower borrowings.~~interest on commercial paper.

Employee Separation / Asset Related Charges, Net

~~For the three months ended March 31, 2016, employee~~Employee separation / asset related charges, net ~~were~~totaled $152 million versus $77 million ~~compared~~in the prior year. The charges recorded in the first quarter 2017 related to ~~$38 million~~the 2017 restructuring program. The charges in ~~2015. First~~the first quarter 2016 included a $75 million charge related to the decision not to re-start the insecticide manufacturing facility at the La Porte site located in La Porte, Texas, ~~and~~as well as a $2 million net restructuring charge associated with the 2016 global cost savings and restructuring ~~program. First quarter 2015 included a $38 million charge related to cost investment impairments.~~plan.

See Note 4 to the interim Consolidated Financial Statements for additional information.

Provision for Income Taxes on Continuing Operations

The company's effective tax rate for the first quarter ~~2016~~2017 was ~~24.8~~14.3 percent as compared to ~~34.2~~24.8 percent in ~~2015.~~2016. The lower effective tax rate is primarily driven by the impact of the company’s exchange gains / (losses) recognized on the re-measurement of the net monetary asset positions which are often not taxable / (tax deductible) in their local jurisdictions, as well asrelates to the absence of the ~~2015 tax impact associated with the Ukraine hryvnia re-measurement, partially offset by the~~unfavorable tax consequences of ~~the~~a gain on the sale of an entity in the first quarter 2016, tax benefits related to a reduction in the company’s unrecognized tax benefits due to the closure of various tax statutes of limitations, as well as increased tax benefits on costs associated with the planned merger with Dow and employee separation / asset related charges. Net favorable tax consequences of the adoption of Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. 2016-09, Compensation - Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting, as well as changes in accruals for certain prior year tax positions, also contributed to the lower effective tax rate. Those tax benefits were partially offset by the unfavorable ~~geographic mix~~tax consequences of ~~earnings.~~non-deductible goodwill associated with the gain on the sale of the company’s global food safety diagnostics business in the first quarter 2017.

See ~~Notes 3 and 5~~Note 6 to the interim Consolidated Financial Statements for additional information.

~~Outlook~~

~~The company has revised its full-year 2016 outlook from previous expectations included within the 2015 Annual Report to include the following:~~

~~Since December 2015, the U.S. dollar has weakened against most other currencies; as a result the company expects currency to be less of a headwind for full-year 2016 than previously anticipated.~~

In Agriculture, higher-than-anticipated corn planted area is expected to partially offset the impact of Pioneer’s transition to an agency-based route-to-market approach in the southern U.S., which will shift some sales from 2016 to the first quarter of 2017. Seasonal timing benefits realized through the first quarter 2016 from a stronger-than-anticipated start in Agriculture are expected to be offset in the second quarter.

~~For full-year 2016, the company expects to incur about $420 million ($0.40 per share) of transactions costs related to the planned merger with Dow and related activities.~~

Workforce reductions in the first quarter 2016 related to the 2016 global cost savings and restructuring plan triggered curtailments and related re-measurements of the U.S. pension and other-post-retirement employee benefit plans. As a result, the company has reduced the expected decrease in 2016 long-term employee benefits expense from continuing operations as compared to 2015 to $120 million from $230 million at December 31, 2015. See further information included in Note 14 to the interim Consolidated Financial Statements. The company expects future workforce reductions associated with this plan during the year to trigger additional settlements and curtailments, the impacts of which cannot be reasonably estimated at this time.

~~See additional information regarding 2016 outlook under "Segment Reviews" beginning on page 34.~~

Recent Accounting Pronouncements

See Note 1 to the interim Consolidated Financial Statements for a description of recent accounting pronouncements.

Segment Reviews

Summarized below are comments on individual segment net sales and operating earnings for the three month period ended March 31, ~~2016~~2017 compared with the same period in ~~2015~~2016. Segment operating earnings is defined as income (loss) from continuing operations before income taxes excluding significant pre-tax benefits (charges), non-operating pension and other ~~postretirement~~post employment employee benefit costs, exchange gains (losses), corporate expenses and interest. Non-operating pension and other ~~postretirement employee~~post employment benefit costs includes all of the components of net periodic benefit costs from continuing operations with the exception of the service cost component. ~~Reclassifications of prior year data have been made to conform to current year classifications.~~ See Note 15 to the interim Consolidated Financial Statements for details related to significant pre-tax benefits (charges) excluded from segment operating earnings. All references to prices are based on local price unless otherwise specified.

A reconciliation of segment operating earnings to income from continuing operations before income taxes for the three month periods ended March 31, ~~2016~~2017 and ~~2015~~2016 is included in Note 15 to the interim Consolidated Financial Statements.

DuPont Sustainable Solutions, previously within the company's Safety & Protection segment (now Protection Solutions) was comprised of two business units: clean technologies and consulting solutions. Effective January 1, 2016, the clean technologies business unit became part of the Industrial Biosciences segment with the focus on working with customers to improve the performance, productivity and sustainability of their products and processes. The company is exploring a range of options to maximize the growth of the consulting solutions business unit which effective January 1, 2016, is reported within Other.

The following table summarizes first quarter ~~2016~~2017 segment net sales and related variances versus prior year:


	Three Months Ended											Three Months Ended
	March 31, 2016				Percentage Change Due to:							March 31, 2017				Percentage Change Due to:
	Segment Net Sales ($ Billions)		Percent Change vs. 2015		Local Price and Product Mix		Currency		Volume		Portfolio and Other	Segment Net Sales ($ Billions)		Percent Change vs. 2016		Local Price and Product Mix		Currency		Volume	Portfolio and Other
Agriculture	$	3.8	(4	)	2		(5	)	(1	)	—	$	3.9	4		2		1		2	(1	)
Electronics & Communications	0.5		(13	)	(3	)	(1	)	(9	)	—	0.5		13		—		(1	)	15	(1	)
Industrial Biosciences	0.4		1		2		(3	)	1		1	0.4		5		2		(1	)	4	—
Nutrition & Health	0.8		(1	)	—		(4	)	3		—	0.8		(1	)	—		(1	)	—	—
Performance Materials	1.2		(10	)	(5	)	(2	)	(3	)	—	1.4		10		—		(1	)	11	—
Protection Solutions	0.7		(8	)	(1	)	(2	)	(5	)	—	0.7		2		(2	)	(1	)	5	—

Agriculture - First quarter ~~2016~~2017 segment net sales of ~~$3,786~~$3,928 million ~~decreased $151~~increased $142 million, or 4 percent, ~~primarily due to~~on price and volume growth. A benefit from currency was offset by portfolio changes. Local pricing growth was realized by double-digit increases in Brazil, driven by the ~~negative impact~~continued expansion of ~~currency~~Pioneer^® brand hybrids with Leptra^® insect protection, the launch of Pioneer^® brand soybeans with Roundup Ready 2 Xtend^®1 technology, and ~~lower volumes, partially offset with higher local price from pricing actions to mitigate currency impacts~~increased sunflower seed sales in ~~Europe~~Europe. Volume growth was driven by the shift in timing of seed deliveries, which benefited first quarter sales by approximately $140 million, insecticide growth and ~~Brazil and improved mix from new products in North America corn seed. Lower insecticide and soybean~~increased sunflower seed ~~volumes~~sales. These increases were partially offset by ~~increased~~lower North America corn seed volumes impacted by an expected decrease in ~~North America due to higher expected acreage, higher~~ corn ~~seed volume in Brazil from the Safrinha season and increased demand for sunflower seed in Europe.~~acreage. Operating earnings of ~~$1,101~~$1,236 million ~~decreased $37~~increased $135 million, or 312 percent, primarily due to an $83 million negative currency impact, lower volumes and about a $40 million negative impact from the shutdown of the La Porte manufacturing facility due to lost sales, fixed overhead costs and inventory write-offs, partially offset by localon price and ~~product mix gains and cost savings.~~

~~Outlook~~ Full year 2016 segment net sales are expected to be down low-single digits percent as local price and product mix gains are more than offset by the negative impact of currency. Higher corn seed volumes are expected to be offset by lower insecticide and soybean seed volumes. Full year operating earnings are expected to be up mid-single digits percent as cost savings and local price and product mix gains more than offset the negative impact of currency.volume growth.

Electronics & Communications - First quarter ~~2016~~2017 segment net sales of ~~$452~~$510 million ~~decreased $65~~increased $58 million, or 13 percent, ~~primarily due to competitive pressures impacting Solamet~~^®~~paste, lower demand for products for the consumer electronics market, lower pricing from the pass-through of lower metals prices and~~as increased volume growth was partially offset by the negative impact offrom currency ~~partially offset~~and portfolio changes. Volume growth was driven by ~~volume growth for Tedlar~~^®~~film for photovoltaics.~~increased demand in consumer electronics and semiconductor markets, as well as stronger photovoltaic material sales. Operating earnings of ~~$59~~$89 million ~~decreased $20~~increased $30 million, or 2551 percent, ~~as lower sales~~on volume growth and the absence of a $16 million prior year litigation ~~expense were partially~~expense. Operating earnings included a gain on the sale of a business offset by ~~cost savings.~~

~~Outlook~~ ~~Full year 2016 segment net sales are expected to be down low-single digits percent~~costs associated with second half growth in photovoltaics and consumer electronics which will mostly offset first half declines. Full year operating earnings are expected to be up low-teens percent due to second half sales improvement and cost savings.a legal matter.

Industrial Biosciences - First quarter ~~2016~~2017 segment net sales of ~~$352~~$368 million increased $2$16 million, or 15 percent, ~~primarily~~ due to ~~higher pricing~~growth in volume and ~~volume from new product introductions in bioactives and increased demand for biomaterials, mostly~~price, partially offset by the negative impact of ~~currency and lower~~currency. Volume growth reflected increased demand for biomaterials in carpeting and apparel, and bioactives in the grain processing market, partially offset by declines in clean ~~technologies offerings.~~technologies. Operating earnings of ~~$63~~$75 million increased $9$12 million, or 1719 percent, ~~reflecting the absence of~~on volume growth, improved joint venture performance and cost ~~from the write-off of a prior year acquisition related indemnification asset in clean technologies and improved mix from new products,~~savings, partially offset by ~~a negative impact from currency.~~

~~Outlook~~ ~~Full year 2016 segment net sales are expected to be about flat. Volume improvement, pricing, the impact of new product introductions~~declines in bioactives, including increased market penetration in animal nutrition and home and personal care, and the portfolio impact from the fourth quarter 2015 acquisition of enzyme and technology assets from Dyadic International Inc. are expected to be offset by lower demand for clean ~~technology offerings and the negative impact of currency. Full year 2016 operating earnings are expected to be up by the low-teens percent, primarily due mix enrichment and cost savings.~~technologies.

Nutrition & Health - First quarter ~~2016~~2017 segment net sales of ~~$801~~$789 million decreased $12 million, or 1 percent, primarily due to the negative impact of ~~currency, partially~~currency. Volume and price growth in probiotics and emulsifiers was offset by ~~broad-based volume growth led by probiotics, cultures, ingredient~~declines in protein solutions and systems ~~texturants~~ and ~~specialty proteins.~~texturants. Operating earnings of ~~$104~~$121 million increased ~~$18~~$17 million, or 2116 percent, on plant productivity and mix enrichment.

¹Registered trademark of Monsanto Technology LLC used under license.

Performance Materials - First quarter 2017 segment net sales of $1,368 million increased $119 million, or 10 percent, as volume growth ~~and cost savings more than offset a negative currency impact.~~

~~Outlook~~ ~~Full year 2016 segment net sales are expected to be about flat with continued strength in probiotics and cultures,~~was partially offset by the negative impact of currency. ~~Full year 2016 operating earnings are expected to be up~~Volume growth was driven by increased demand for polymers in automotive markets, particularly in China and Europe, coupled with specialty copolymers growth in packaging and timing benefits from the second quarter 2017. Overall volume growth was constrained by lower ethylene sales as the business prepares for a planned turnaround of the ethylene cracker in the ~~low-twenty~~second quarter. Operating earnings of $355 million increased $82 million, or 30 percent, ~~range, as mix enrichment~~driven by higher volumes and cost ~~savings more than offset the negative impact of currency.~~savings.

~~Performance Materials~~Protection Solutions - First quarter ~~2016~~2017 segment net sales of ~~$1,249~~$747 million ~~decreased $132~~increased $18 million, or 102 percent, ~~primarily due lower local price, lower~~as increased volume ~~and a negative impact from currency. Lower price~~ was ~~driven by lower ethylene prices and competitive pressure in commodity product lines. Lower volumes in ethylene and ethylene-based products were~~ partially offset by increased demand in Asia Pacific automotive markets, primarily in China. Operating earnings of $273 million decreased $44 million, or 14 percent, primarily due to lower sales and a $19 million negative impact from currency, partially offset by lower costs.

~~Outlook~~ Full year 2016 segment net sales are expected to be about flat and full year 2016 operating earnings are expected to be down in the mid-single digits percent range, as volume growth is anticipated to be more than offset by lower local price and the negative impact of currency. ~~Full year 2015 operating earnings included $49 million of benefits from a joint venture, the sale of a business and realization of tax benefits associated with a manufacturing site.~~

~~Protection Solutions -~~ ~~First quarter 2016 segment net sales of $729 million decreased $61 million, or 8 percent, primarily due to lower volume, the negative impact of currency, and lower local price.~~ Volume ~~declines in~~growth reflected improved demand for Nomex^® thermal-resistant fiber in oil and gas and mass transit markets, partially offset by declines in Kevlar^® high-strength material, ~~and~~ Tyvek^® protective material, ~~were driven by weakness in the oil~~ and ~~gas industry, delays in military spending, and lower industrial market demand.~~surfaces. Operating earnings of ~~$176~~$177 million increased $9$1 million, or 51 percent, ~~on lower costs and improved plant utilization at the Chambers Works facility, partially offset by lower sales and a $6 million negative currency impact.~~

~~Outlook~~ ~~Full year 2016 segment net sales are expected to be about flat~~ as volume growth ~~is anticipated to~~and cost savings offset ~~price~~higher raw material costs, unfavorable mix and ~~the negative impact of currency. Full year 2016 operating earnings are expected to be up by the high single digits percent, primarily due to~~ lower ~~costs.~~plant productivity.

Liquidity & Capital Resources

Information related to the company's liquidity and capital resources can be found in the company's ~~2015~~2016 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, ~~2016.~~2017.


(Dollars in millions)	March 31, 2016		December 31, 2015		March 31, 2017		December 31, 2016
Cash, cash equivalents and marketable securities	$	4,789	$	6,206	$	5,917	$	5,967
Total debt	9,751		8,807		10,378		8,536

The company's cash, cash equivalents and marketable securities at March 31, ~~2016~~2017 and December 31, ~~2015~~2016 are ~~$4.8~~$5.9 billion and ~~$6.2~~$6.0 billion, respectively. ~~The $1.4 billion decrease was primarily due to seasonal working capital requirements.~~

Total debt as of March 31, ~~2016~~2017 was ~~$9.8~~$10.4 billion, a ~~$1.0~~$1.9 billion increase from ~~$8.8~~$8.5 billion as of December 31, ~~2015,~~2016, due primarily to increased borrowings ~~under the Term Loan Facility~~from commercial paper and the Repurchase Facility ~~discussed below, as well as increased commercial paper borrowings, net of debt maturities.~~used to fund seasonal working capital requirements.

In March 2016, the company entered into a credit agreement that provides for a three-year, senior unsecured term loan facility in the aggregate principal amount of $4.5 billion ~~(the~~(as amended from time to time, the Term Loan Facility). In the first quarter of 2017, the Term Loan Facility was amended to extend the date on which the commitment to lend terminates. As a result, DuPont may make up to seven term loan borrowings ~~within one year of the closing date and~~through July 27, 2018; amounts repaid or prepaid are not available for subsequent borrowings. ~~The proceeds from the borrowings under the Term Loan Facility will be used for the company's general corporate purposes including debt repayment, working capital and share repurchases.~~ The Term Loan Facility matures in March 2019 at which time all outstanding borrowings, including accrued but unpaid interest, become immediately due and payable. As of March 31, ~~2016,~~2017, the company had borrowed $500 million and had unused commitments of $4.0 billion under the Term Loan Facility.

~~In addition, in March 2016,~~ DuPont may elect to borrow under the ~~company amended the existing revolving credit facility~~Term Loan Facility to ~~reduce the aggregate principal amount of commitments from $4 billion to $3 billion consistent with lower expected commercial paper borrowings.~~meet its short-term liquidity needs.

The Term Loan Facility and the amended revolving credit facility contain customary representations and warranties, affirmative and negative covenants, and events of default that are typical for companies with similar credit ratings and generally consistent with those applicable to DuPont’s long-term public debt. The Term Loan Facility and the amended revolving credit facility contain a financial covenant requiring that the ratio of Total Indebtedness to Total Capitalization for DuPont and its consolidated subsidiaries not exceed 0.6667. At March 31, ~~2016,~~2017, the company was in compliance with this financial covenant.

The Term Loan Facility and the amended revolving credit facility impose additional affirmative and negative covenants on DuPont and its subsidiaries after the closing of the proposed merger with Dow, subject to certain limitations, including to:

not sell, lease or otherwise convey to DowDuPont, its shareholders or its non-DuPont subsidiaries, any assets or properties of DuPont or its subsidiaries unless the aggregate amount of revenues attributable to all such assets and properties so conveyed after the merger does not exceed 30% of the consolidated revenues of DuPont and its subsidiaries as of December 31, 2015; and

~~not guarantee any indebtedness or other obligations of DowDuPont, Dow or their respective subsidiaries (other than of DuPont and its subsidiaries).~~

The Term Loan Facility and the amended revolving credit facility will terminate, and the loans and other amounts thereunder will become due and payable, upon the sale, transfer, lease or other disposition of all or substantially all of the assets of the Agriculture line of business to DowDuPont, its shareholders or any of its non-DuPont subsidiaries.

In ~~February 2016,~~January 2017, in line with seasonal agricultural working capital requirements, the company entered into a committed receivable repurchase agreement of up to $1$1.3 billion (the Repurchase Facility) that expires on November 30, ~~2016.~~2017. Under the Repurchase Facility, the company may sell a portfolio of available and eligible outstanding customer notes receivables within the Agriculture segment to participating institutions and simultaneously agree to repurchase at a future date. See further discussion of this facility in Note 10 to the interim Consolidated Financial Statements.

The company has access to approximately ~~$8.6~~$8.9 billion in unused credit lines, an increase of ~~$3.7~~$1.0 billion from ~~$4.9~~$7.9 billion as of December 31, ~~2015~~2016. The increase was primarily due to the ~~Term Loan Facility and~~ Repurchase Facility ~~discussed above, partially offset by the amended revolving credit facility~~ discussed above. These unused credit lines provide support to meet the company's short-term liquidity needs and for general corporate purposes ~~including letters~~which may include funding of ~~credit.~~discretionary and non-discretionary contributions to certain benefit plans, severance plans in the event of a change in control, repayment and refinancing of debt, working capital, capital expenditures and repurchases and redemptions of securities.

In 2017, the company anticipated making contributions of about $230 million to the principal U.S. pension plan. The company is evaluating potential, additional discretionary contributions to this plan that could result in a significant reduction to the underfunded benefit obligation, a portion of which is expected to be funded through proceeds from a debt offering. Any additional contribution above the $230 million depends on various factors including market conditions, access to capital markets and tax deductible limits.

Summary of Cash Flows

Cash used for operating activities was ~~$1.8~~$1.6 billion for the three months ended March 31, ~~2016~~2017 compared to ~~$2.1~~$1.8 billion during the same period in ~~2015.~~2016. The ~~$0.3~~$0.2 billion decrease in cash used for ~~operations~~operating activities was primarily due ~~primarily~~ to the absence of the prior year prepayment to Chemours of $190 million and lower working capital requirements and the positive currency impact that offsets cash used by foreign currency exchange contract settlements that is included in investing activities. The positive currency impacts weretax payments, partially offset by transaction costs associated with the ~~prepayment~~merger and the Intended Business Separations, including costs relating to ~~Chemours.~~integration and separation planning.

Cash ~~provided by~~used for investing activities was ~~$27 million~~$1.3 billion for the three months ended March 31, ~~2016~~2017 compared to ~~$140~~$27 million ~~of cash used~~provided by investing activities during the same period ~~last year.~~in 2016. The ~~change was primarily the result of proceeds received from the sale of an entity, the sale of marketable securities and reduced purchases of property, plant and equipment. The reduction~~increase in ~~purchases of property, plant and equipment~~cash used for investing activities was primarily due to ~~the absence~~increased net purchases of ~~Chemours in 2016. This was~~marketable securities, partially offset by ~~the decrease in cash received~~proceeds from ~~foreign currency contract settlements.~~sales of businesses and other assets.

Cash provided by financing activities was ~~$0.7~~$1.6 billion for the three months ended March 31, ~~2016~~2017, compared to ~~$0.9~~$0.6 billion ~~of cash used~~ during the same period last year. The ~~change~~$1.0 billion increase to cash provided by financing activities was primarily due to increased short-term borrowings ~~and lower~~in commercial paper for seasonal working capital requirements.

In January 2017, the Board of Directors declared a first quarter common stock ~~repurchases.~~

~~Dividends paid~~dividend of $0.38 per share. The first quarter dividend payments to shareholders during the three months ended March 31, ~~2016~~2017 totaled $0.3 billion. In January 2016, the Board of Directors declared a first quarter dividend of $0.38 per share. In April 2016, the Board of Directors declared a second quarter dividend of $0.38 per share. With the first and second quarter 2016 dividends, the company has paid quarterly consecutive dividends since the company’s first dividend in the fourth quarter 1904.

In January 2014, the company's Board of Directors authorized a $5 billion share buyback plan that replaced the 2011 plan. During the three months ended March 31, 2015, the company purchased and retired 3.6 million shares in the open market for a total cost of $282 million, which offset the dilution from employee compensation plans in the first quarter of 2015. There were no share repurchases under this plan in the first quarter 2016. There is no required completion date for the remaining stock purchases.

In the first quarter 2015, DuPont announced its intention to buy back shares of about $4 billion using the distribution proceeds received from Chemours. In connection with the completion of the spin-off of Chemours, the Board of Directors authorized the use of the distribution proceeds to buy back shares of the company's common stock as follows: $2 billion to be purchased and retired by December 31, 2015, which was completed during 2015, with the remainder to be purchased and retired by December 31, 2016. There were no share repurchases under this plan in the first quarter 2016. DuPont's objective continues to be to complete the remaining $2 billion stock buyback by year end 2016. As a result of the planned merger with Dow, the company will not repurchase shares until after the shareholder vote on the merger. After the vote the company will evaluate the opportunities to enter the market and plans to make repurchases.

~~See Note 12 to the interim Consolidated Financial Statements for additional information.~~

Guarantees and Off-Balance Sheet Arrangements

For detailed information related to Guarantees, Indemnifications, and Obligations for Equity Affiliates and Others, see the company's ~~2015~~2016 Annual Report, Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations, Off- Balance Sheet Arrangements, and Note 11 to the interim Consolidated Financial Statements.

Contractual Obligations

Information related to the company's contractual obligations at December 31, ~~2015~~2016 can be found in the company's ~~2015~~2016 Annual Report, Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations, Off-Balance Sheet Arrangements.


Item 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

See Note 13 ~~“Financial Instruments”,~~ to the interim Consolidated Financial Statements. See also Part II, Item 7A. Quantitative and Qualitative Disclosures About Market Risk, of the company's ~~2015~~2016 Annual Report for information on the company's utilization of financial instruments and an analysis of the sensitivity of these instruments.

Item 4. CONTROLS AND PROCEDURES

a) 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 Securities and Exchange Commission. 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, ~~2016~~2017, 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.

b) Changes in Internal Control over Financial Reporting

There has been no change in the company's internal control over financial reporting that occurred during the quarter ended March 31, ~~2016~~2017 that has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting.

PART II. OTHER INFORMATION


Item 1.	LEGAL PROCEEDINGS

The company is 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 11 to the interim Consolidated Financial Statements.

Litigation

PFOA: Environmental and Litigation Proceedings

For purposes of this report, the term PFOA means collectively perfluorooctanoic acid and its salts, including the ammonium salt and does not distinguish between the two forms. Information related to this matter is included in Note 11 to the ~~interim~~ Consolidated Financial Statements under the heading PFOA.

La Porte Plant, La Porte, Texas

The U.S. Environmental Protection Agency (EPA) conducted a multimedia inspection at the La Porte facility in January 2008. DuPont, EPA and the Department of Justice (DOJ) began discussions in the fall 2011 relating to the management of certain materials in the facility's waste water treatment system, hazardous waste management, flare and air emissions. These negotiations continue.

~~La Porte Plant, La Porte, Texas~~ - Crop Protection - release Incident Investigations

On November 15, 2014, there was a release of methyl mercaptan at the company’s La Porte facility. The release occurred at the site’s Crop Protection unit resulting in four employee fatalities inside the unit. DuPont continues to cooperate with ~~those~~ governmental agencies, including the U.S. Environmental Protection Agency (EPA) and the Department of Justice (DOJ), still conducting investigations. These investigations could result in sanctions and penalties against the company.

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 descriptions are included per Regulation S-K, Item 103(5)(c) of the Securities Exchange Act of 1934.

La Porte Plant, La Porte, Texas - EPA Multimedia Inspection

The EPA conducted a multimedia inspection at the La Porte facility in January 2008. DuPont, EPA and DOJ began discussions in the fall 2011 relating to the management of certain materials in the facility's waste water treatment system, hazardous waste management, flare and air emissions. These negotiations continue.

Sabine Plant, Orange, Texas - EPA Multimedia Inspection

In June 2012, DuPont began discussions with EPA and DOJ related to a multimedia inspection that EPA conducted at the Sabine facility in March 2009 and December 2015. The discussions involve the management of materials in the facility's waste water treatment system, hazardous waste management, flare and air emissions, including leak detection and repair. These negotiations continue.

La Porte Plant, La Porte, Texas - OSHA Release Incident Citations

In May 2015, the Occupational Safety & Health Administration (OSHA) cited the company in connection with the November 2014 release for ~~eight~~14 violations (twelve serious, one repeat and one ~~repeat violation~~other-than-serious) with an aggregate associated penalty of $99,000. The company has contested the citations and the matter is ~~contesting OSHA’s findings.~~before the U.S. Occupational Safety and Health Review Commission (the OSHRC). The hearing before an administrative law judge appointed by OSHRC has been postponed to the second quarter 2017.

La Porte Plant, La Porte, Texas - OSHA Process Safety Management (PSM) Audit

In 2015, OSHA conducted a PSM audit of the Crop Protection and Fluoroproducts units at the La Porte Plant. In July 2015, OSHA cited the company for three willful, one repeat and ~~four~~five serious PSM violations and placed the company in its Severe Violator Enforcement Program. OSHA has proposed a penalty of $273,000. The company has contested the citations and the matter is ~~contesting OSHA’s findings.~~before the OSHRC. A hearing before an administrative law judge appointed by OSHRC has been postponed to the second quarter 2017.

~~Sabine Plant, Orange, Texas~~

In June 2012, DuPont began discussions with DOJ and EPA related to multimedia inspections that EPA conducted at the Sabine facility in March 2009 and December 2015. The discussions involve the management of materials in the facility's waste water treatment system, hazardous waste management, flare and air emissions, including leak detection and repair.

Item 1A. RISK FACTORS

~~There have been no material changes~~The following risk factor presented in the company's risk factors discussed in Part I, Item 1A, Risk Factors, in the company's ~~2015~~2016 Annual ~~Report.~~Report is updated solely to reflect Amendment No. 1 to the Merger Agreement which, among other things, extends the Merger Agreement to August 31, 2017.

The Merger Agreement may be terminated in accordance with its terms and the Mergers may not be completed.

The completion of the Mergers is subject to the satisfaction or waiver of a number of conditions. Those conditions include: (i) the receipt of certain domestic and foreign regulatory approvals under competition laws, including the termination or expiration of the waiting period under the HSR Act; (ii) the absence of certain governmental restraints or prohibitions preventing completion of the DuPont Merger or the Dow Merger; (iii) the approval of the shares of DowDuPont Common Stock to be issued to DuPont stockholders and Dow stockholders for listing on the NYSE; (iv) the reasonable determination by DuPont and Dow that neither the DuPont Merger nor the Dow Merger will constitute an acquisition of a 50 percent or greater interest in Dow or DuPont, under Section 355(e) of the Code; (v) the truth and correctness of the representations and warranties made by both parties (generally subject to certain “materiality” and “material adverse effect” qualifiers); (vi) the performance by DuPont and Dow of their respective obligations under the Merger Agreement in all material respects; and (vii) the receipt by both parties of legal opinions from their respective tax counsels with respect to the tax-free nature of each of the Mergers.

These conditions to the closing may not be fulfilled and, accordingly, the Mergers may not be completed. In addition, if the Mergers are not completed by August 31, 2017, either DuPont or Dow may choose not to proceed with the Mergers, and the parties can mutually decide to terminate the Merger Agreement at any time prior to the consummation of the Mergers. In addition, DuPont or Dow may elect to terminate the Merger Agreement in certain other circumstances. If the Merger Agreement is terminated, Dow and DuPont may incur substantial fees in connection with termination of the Merger Agreement and will not recognize the anticipated benefits of the Mergers.

~~Item 5. OTHER INFORMATION~~

As noted in Note 1 to the interim Consolidated Financial Statements, effective January 1, 2016, the company adopted Accounting Standards Update (ASU) No. 2015-17, Income Taxes (Topic 740), Balance Sheet Classification of Deferred Taxes. The amendments under the new guidance require that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position on a retrospective basis. In conjunction with the early adoption of ASU No. 2015-17 in the first quarter 2016, the company also retrospectively reclassified deferred charges previously recorded in the current deferred income taxes line item to prepaid expenses on the Consolidated Balance Sheets.

~~The following line items within the Consolidated Balance Sheets as of December 31, 2015 and 2014, respectively, were affected by the ASU adoption:~~

2015 2014
(Dollars in millions) As reported As reported under ASU No. 2015-17 Change: (Decrease) / Increase As reported As reported under ASU No. 2015-17 Change: (Decrease) / Increase
Assets
Current assets
Prepaid expenses $ 248
$ 398
$ 150
$ 264
$ 452
$ 188
Deferred income taxes 518
—
(518 ) 532
—
(532 )

Deferred income taxes $ 3,431
$ 3,799
$ 368
$ 3,734
$ 4,078
$ 344

Liabilities and Equity
Current liabilities
Income taxes $ 210
$ 173
$ (37 ) $ 534
$ 487
$ (47 )

Deferred income taxes $ 380
$ 417
$ 37
$ 459
$ 506
$ 47

DuPont Sustainable Solutions, previously within the company's Safety & Protection segment (now Protection Solutions) was comprised of two business units: clean technologies and consulting solutions. Effective January 1, 2016, the clean technologies business is reported in the Industrial Biosciences segment and the consulting solutions business unit is reported within Other. The following reflects the revised segment information for the reportable segments impacted by this 2016 segment reorganization for the years ended December 31, 2015, 2014 and 2013:

(Dollars in millions) 2015 2014 2013
Industrial Biosciences
Net Sales $ 1,478
$ 1,624
$ 1,631
Operating Earnings 243
269
232
Significant pre-tax charges not included in segment operating earnings (61 ) (20 ) (1 )
Depreciation and amortization 101
102
98
Equity in earnings of affiliates 7
8
2
Segment net assets 3,154
3,241
3,325
Affiliate net assets 41
45
48
Purchases of property, plant and equipment 84
94
84
Protection Solutions
Net Sales $ 3,039
$ 3,304
$ 3,229
Operating Earnings 641
672
553
Significant pre-tax benefits (charges) not included in segment operating earnings 105
(45 ) 6
Depreciation and amortization 156
168
178
Equity in earnings of affiliates 23
28
21
Segment net assets 2,295
2,339
2,464
Affiliate net assets 71
78
83
Purchases of property, plant and equipment 96
98
101
Other
Net Sales $ 184
$ 213
$ 237
Operating Earnings (235 ) (233 ) (208 )
Significant pre-tax (charges) benefits not included in segment operating earnings (40 ) (10 ) 1
Depreciation and amortization 6
8
9
Equity in earnings of affiliates (30 ) (47 ) (48 )
Segment net assets 258
316
122
Affiliate net assets 23
16
19
Purchases of property, plant and equipment 132
203
115


Item 6.	EXHIBITS

Exhibits: The list of exhibits in the Exhibit Index to this report is incorporated herein by reference.

SIGNATURE

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.



	E. I. DU PONT DE NEMOURS AND COMPANY
	(Registrant)

	Date:	April ~~26, 2016~~25, 2017


	By:	/s/ Nicholas C. Fanandakis

		Nicholas C. Fanandakis
		Executive Vice President and
		Chief Financial Officer
		(As Duly Authorized Officer and
		Principal Financial and Accounting Officer)

EXHIBIT INDEX



Exhibit Number		Description

3.1		Company’s Restated Certificate of Incorporation (incorporated by reference to Exhibit 99.2 to the company’s Current Report on Form 8-K (Commission file number 1-815) dated June 1, 2015).

3.2		Company’s Bylaws, as last amended effective October 22, 2015 (incorporated by reference to Exhibit 3.2 to the company's Quarterly Report on Form 10-Q (Commission file number 1-815) for the period ended September 30, 2015).

4		The company agrees to provide the Commission, on request, copies of instruments defining the rights of holders of long-term debt of the company and its subsidiaries.

10.1*		The DuPont Stock Accumulation and Deferred Compensation Plan for Directors, as last amended effective January 1, 2009 (incorporated by reference to Exhibit 10.1 to the company's Annual Report on Form 10-K (Commission file number 1-815) for the year ended December 31, 2013).

10.2*		Company’s Supplemental Retirement Income Plan, as last amended effective December 18, 1996 (incorporated by reference to Exhibit 10.2 to the company’s Annual Report on Form 10-K (Commission file number 1-815) for the year ended December 31, 2011).

10.3*		Company’s Pension Restoration Plan, as last amended effective June 29, 2015 (incorporated by reference to Exhibit 10.3 to the company's Quarterly Report on Form 10-Q (Commission file number 1-815) for the period ended June 30, 2015).

10.4*		Company’s Rules for Lump Sum Payments, as last amended effective May 15, 2014 (incorporated by reference to Exhibit 10.4 to the company's Quarterly Report on Form 10-Q (Commission file number 1-815) for the period ended June 30, 2015).

10.5*		Company’s Stock Performance Plan, as last amended effective January 25, 2007 (incorporated by reference to Exhibit 10.5 to the company’s Annual Report on Form 10-K (Commission file number 1-815) for the year ended December 31, 2011).

10.6*		Company’s Equity and Incentive Plan, as amended ~~October 23, 2014~~and restated effective March 14, 2016 (incorporated by reference to Exhibit 10.06 to the company's Quarterly Report on Form 10-Q (Commission file number 1-815) for the period ended ~~September~~June 30, ~~2014)~~2016).

10.7*		Form of 2013 Award Terms under the company’s Equity and Incentive Plan (incorporated by reference to Exhibit 10.7 to the company’s Quarterly Report on Form 10-Q (Commission file number 1-815) for the period ended June 30, 2013).

10.8*		Company’s Retirement Savings Restoration Plan, as last amended effective May 15, 2014. (incorporated by reference to Exhibit 10.08 to the company's Quarterly Report on Form 10-Q (Commission file number 1-815) for the period ended June 30, 2014).

10.9*		Company’s Retirement Income Plan for Directors, as last amended January 2011 (incorporated by reference to Exhibit 10.9 to the company's Quarterly Report on Form 10-Q (Commission file number 1-815) for the period ended March 31, 2012).

10.10*		Company's Senior Executive Severance Plan, as amended and restated effective December 10, 2015 (incorporated by reference to Exhibit 10.10 to the company's Annual Report on Form 10-K (Commission file number 1-815) for the year ended December 31, 2015). The company agrees to furnish supplementally a copy of any omitted schedules to the Commission upon request.



Exhibit Number		Description

10.11*		Supplemental Deferral Terms for Deferred Long Term Incentive Awards and Deferred Variable Compensation Awards (incorporated by reference to Exhibit 10.12 to the company's Annual Report on Form 10-K (Commission file number 1-815) for the year ended December 31, 2013).

10.12*		Form of 2014 Award Terms under the Company's Equity and Incentive Plan (incorporated by reference to Exhibit 10.13 to the company's Quarterly Report on Form 10-Q (Commission file number 1-815) for the period ended March 31, 2014).

10.13*		Company’s Management Deferred Compensation Plan, as last amended effective April 15, 2014 (incorporated by reference to Exhibit 10.13 to the company's Quarterly Report on Form 10-Q (Commission file number 1-815) for the period ended June 30, 2014).

10.14*		Separation Agreement dated October 5, 2015, by and between E. I. du Pont de Nemours and Company and Ellen J. Kullman (incorporated by reference to Exhibit 10.1 to the company's Current Report on Form 8-K (Commission file 1-815) dated October 5, 2015).

10.15*		Form of 2015 Award Terms under the Company's Equity and Incentive Plan (incorporated by reference to Exhibit 10.15 to the company's Quarterly Report on 10-Q (Commission file number 1-815) for the period ended March 31, 2015).

10.16*		~~Letter Agreement dated January 4,~~Form of 2016 Award Terms under the Company’s Equity and entered January 18, 2016, by and between the Company and Mr. James C. Borel (incorporated by reference to Exhibit 10.1 to the company's Current Report on Form 8-K (Commission file number 1-815) dated January 22, 2016).Incentive Plan.

10.1710.18*		Separation Agreement by and between the Company and The Chemours Company (incorporated by reference to ~~reference to~~ Exhibit 2.1 to the ~~company’s~~company's Current Report on Form 8-K (Commission file number 1-815) dated July 8, 2015).

~~10.18~~10.19		Tax Matters Agreement by and between the Company and The Chemours Company (incorporated by reference to ~~reference to~~ Exhibit 2.2 to the ~~company’s~~company's Current Report on Form 8-K (Commission file number 1-815) dated July 8, 2015).

10.1910.20*		Agreement and Plan of Merger by and between the Company and The Dow Chemical Company, dated as of December 11, 2015 (incorporated by reference to Exhibit 2.1 to the company's Current Report on Form 8-K (Commission file number 1-815) dated December 11, 2015).

10.2010.21*		Master Repurchase Agreement ~~with Cooperative~~by and among Cooperatieve Rabobank, U.A. (New York Branch) ~~and~~, The Bank of Tokyo Mitsubishi UFJ Ltd. (New York Branch) and PHI Financial Services, Inc. dated as of ~~February 3, 2016 (incorporated by reference to Exhibit 10.20 to the company's Annual Report on Form 10-K (Commission file number 1-815) for the year ended December~~January 31, ~~2015).~~

10.21**		Master Framework Agreement with Cooperative Rabobank, U.A. (New York Branch) and The Bank of Tokyo Mitsubishi UFJ Ltd. (New York Branch) dated as of February 3, 2016 (incorporated by reference to Exhibit 10.21 to the company's Annual Report on Form 10-K (Commission file number 1-815) for the year ended December 31, 2015).2017.

10.22**		Master Framework Agreement by and among Cooperatieve Rabobank, U.A. (New York Branch), The Bank of Tokyo Mitsubishi UFJ Ltd. (New York Branch) and PHI Financial Services, Inc. dated as of January 31, 2017.

10.23*		Form of ~~2016~~2017 Award Terms under the Company's Equity and Incentive Plan.

10.24**		Amendment No. 1, dated March 31, 2017, to the Agreement and Plan of Merger, dated as of December 11, 2015 by and among the Company, The Dow Chemical Company, Diamond Merger Sub, Inc., Orion Merger Sub, Inc. and Diamond-Orion HoldCo, Inc. (n/k/a DowDuPont Inc.) (incorporated by reference to Exhibit 2.1 to the Company’s current report on Form 8-K (Commission file number 1-815) dated March 31, 2017.

10.25**		Transaction Agreement, dated as of March 31, 2017, by and between the Company and FMC Corporation.

12		Computation of Ratio of Earnings to Fixed Charges.

31.1		Rule 13a-14(a)/15d-14(a) Certification of the company’s Principal Executive Officer.

31.2		Rule 13a-14(a)/15d-14(a) Certification of the company’s Principal Financial Officer.



32.1		Section 1350 Certification of the company’s Principal Executive Officer. The information contained in this Exhibit shall not be deemed filed with the Securities and Exchange Commission nor incorporated by reference in any registration statement filed by the registrant under the Securities Act of 1933, as amended.

32.2		Section 1350 Certification of the company’s Principal Financial Officer. The information contained in this Exhibit shall not be deemed filed with the Securities and Exchange Commission nor incorporated by reference in any registration statement filed by the registrant under the Securities Act of 1933, as amended.

101.INS		XBRL Instance Document



101.SCH		XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		XBRL Taxonomy Extension Label Linkbase Document

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

*Management contract or compensatory plan or arrangement.

**DuPont hereby undertakes to furnish supplementally a copy of any omitted schedule or exhibit to such agreement to the U.S. Securities and Exchange Commission upon request.

4644



	Three Months Ended
	March 31
	2016		2015
Depreciation	$	—	$	62
Amortization of intangible assets	—		1
Purchases of property, plant and equipment	—		150



	Severance and Related Benefit Costs			Other Non-Personnel Charges ¹		Total
Balance at December 31, 2015	$	76		$	2	$	78
Payments	(23		)	—		(23		)
Balance as of March 31, 2016	$	53		$	2	$	55



	Three Months Ended									Three Months Ended									Affected Line Item in Consolidated Income Statements
	March 31, 2016									March 31, 2015
	Pre-Tax			Tax			After-Tax			Pre-Tax			Tax			After-Tax
Cumulative translation adjustment⁽¹⁾	$	170		$	—		$	170		$	(1,189	)	$	—		$	(1,189	)
Net revaluation and clearance of cash flow hedges to earnings:
Additions and revaluations of derivatives designated as cash flow hedges	16			(6		)	10			(22		)	6			(16		)	See (2) below
Clearance of hedge results to earnings:
Foreign currency contracts	—			—			—			(8		)	3			(5		)	Net sales
Commodity contracts	11			(4		)	7			15			(6		)	9			Cost of goods sold
Net revaluation and clearance of cash flow hedges to earnings	27			(10		)	17			(15		)	3			(12		)
Pension benefit plans:
Net loss	(1,191		)	428			(763		)	(4		)	1			(3		)	See (2) below
Effect of foreign exchange rates	1			—			1			100			(27		)	73			See (2) below
Reclassifications to net income:
Amortization of prior service benefit	(2		)	1			(1		)	(2		)	1			(1		)	See (3) below
Amortization of loss	172			(60		)	112			209			(74		)	135			See (3) below
Curtailment loss	49			(17		)	32			—			—			—			See (3) below
Settlement loss	1			(1		)	—			5			(2		)	3			See (3) below
Pension benefit plans, net	(970		)	351			(619		)	308			(101		)	207
Other benefit plans:
Net loss	(124		)	45			(79		)	—			—			—			See (2) below
Reclassifications to net income:
Amortization of prior service benefit	(39		)	13			(26		)	(52		)	19			(33		)	See (3) below
Amortization of loss	17			(7		)	10			19			(7		)	12			See (3) below
Curtailment gain	(30		)	10			(20		)	—			—			—			See (3) below
Other benefit plans, net	(176		)	61			(115		)	(33		)	12			(21		)
Net unrealized loss on securities:
Unrealized loss on securities arising during the period	(9		)	—			(9		)	—			—			—			See (4) below
Reclassification of gain realized in net income	1			—			1			—			—			—			Other income, net
Net unrealized loss on securities	(8		)	—			(8		)	—			—			—
Other comprehensive loss	$	(957	)	$	402		$	(555	)	$	(929	)	$	(86	)	$	(1,015	)



	2015							2014
(Dollars in millions)	As reported		As reported under ASU No. 2015-17		Change: (Decrease) / Increase			As reported		As reported under ASU No. 2015-17		Change: (Decrease) / Increase
Assets
Current assets
Prepaid expenses	$	248	$	398	$	150		$	264	$	452	$	188
Deferred income taxes	518		—		(518		)	532		—		(532		)

Deferred income taxes	$	3,431	$	3,799	$	368		$	3,734	$	4,078	$	344

Liabilities and Equity
Current liabilities
Income taxes	$	210	$	173	$	(37	)	$	534	$	487	$	(47	)

Deferred income taxes	$	380	$	417	$	37		$	459	$	506	$	47