DUPONT DE NEMOURS, INC. MANAGEMENT REPORT AND ANALYSIS OF FINANCIAL POSITION AND OPERATING RESULTS (Form 10-Q)

0
Management's discussion and analysis of financial condition and results of
operations is provided as a supplement to, and should be read in conjunction
with, the interim Consolidated Financial Statements and related notes to enhance
the understanding of the Company's operations and present business environment.
Components of management's discussion and analysis of financial condition and
results of operations include:

•Insight

•Result of Operations
•Segment Results
•Changes in Financial Condition

OVERVIEW

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

As of September 30, 2022, the Company has $2.0 billion of working capital and
approximately $1.8 billion in cash and cash equivalents. The Company expects its
cash and cash equivalents, cash generated from operations, and ability to access
the debt capital markets to provide sufficient liquidity and financial
flexibility to meet the liquidity requirements associated with its continuing
operations.

Below are recent developments and significant historical transactions affecting this Quarterly Report on Form 10-Q.

Mobility & Materials Divestitures
On November 1, 2022 DuPont completed the previously announced divestiture of the
majority of the historic Mobility & Materials segment, including the Engineering
Polymers business line and select product lines within the Advanced Solutions
and Performance Resins business lines (the "M&M Divestiture"). On February 17,
2022, the Company entered into a Transaction Agreement (the "Transaction
Agreement") with Celanese Corporation ("Celanese"). Refer to Note 24 -
Subsequent Events for further information. The Company also announced on
February 18, 2022 that its Board of Directors approved of the divestiture of the
Delrin® acetal homopolymer (H-POM) business (the "Delrin® Divestiture"), subject
to entry into a definitive agreement and satisfaction of closing conditions. The
Delrin® Divestiture together with the M&M Divestiture discussed above (the "M&M
Divestitures") represent a strategic shift that will have a major impact on
DuPont's operations and results.

The financial position of DuPont as of September 30, 2022 and December 31, 2021
present the businesses to be divested as part of the M&M Divestiture and the
Delrin® Divestiture (the "M&M Businesses") as assets and liabilities held for
sale, presented as discontinued operations. The results of operations for the
three and nine months ended September 30, 2022 and 2021 present the financial
results of the M&M Businesses as discontinued operations. The cash flows and
comprehensive income of the M&M Businesses have not been segregated and are
included in the interim Consolidated Statements of Cash Flows and interim
Consolidated Statements of Comprehensive Income, respectively, for all periods
presented. Unless otherwise indicated, the information in the notes to the
interim Consolidated Financial Statements refer only to DuPont's continuing
operations and do not include discussion of balances or activity of the M&M
Businesses. See Note 4 to the interim Consolidated Financial Statements for
additional information.

The Auto Adhesives & Fluids, MultibaseTM and Tedlar® product lines, previously
reported within the historic Mobility & Materials segment, (the "Retained
Businesses") are not included in the scope of the M&M Divestitures. Effective
with the signing of the Transaction Agreement, the Retained Businesses were
realigned to Corporate & Other. The reporting changes have been retrospectively
applied for all periods presented.

                                       42

--------------------------------------------------------------------------------
  Table of Contents
Recent Developments

Macroeconomic Conditions
Certain macroeconomic factors, including the inflationary cost environment and
supply chain disruptions, along with the novel coronavirus ("COVID-19") and its
variants, continue to adversely impact the global economy, including certain
suppliers of the Company's key raw materials. As a result of COVID-19, the
Company qualified for a tax credit of payroll taxes under the Employee Retention
Credit ("ERC") pursuant to the Coronavirus Aid, Relief, and Economic Security
("CARES") Act as enhanced by the Consolidated Appropriations Act and American
Rescue Plan Act. In the third quarter of 2022, the Company recorded
approximately $59 million of benefit to the ERC for full year 2020 and Q1 2021
payroll taxes previously paid. The benefit was recorded as an offset to the Cost
of Sales, Research and Development Expenses ("R&D") and Selling, General and
Administrative Expenses ("SG&A"), with a portion, approximately $7 million, of
the benefit relating to discontinued operations. The Company anticipates
receiving a refund of the credit in 2023.

Within the third quarter of 2022, while end-market demand remained strong, the
Company experienced rising costs of raw materials, logistic and energy due to
inflationary pressures, rising interest rates and foreign currency impacts,
particularly in EMEA. At this time, the Company is not able to predict the
extent to which these macroeconomic events may impact its consolidated results
of operations or financial condition. In addition, the Company is assessing the
recently announced US regulations covering the export of semiconductor materials
into China and is monitoring developments to determine the potential impact of
these regulations to the Semiconductor business.

The Inflation Reduction Act of 2022 ("IRA") was signed into law on August 16,
2022. The IRA introduces a new 15% corporate minimum tax, based on adjusted
financial statement income of certain large corporations. Applicable
corporations would be allowed to claim a credit for the minimum tax paid against
regular tax in future years. While this tax law change does not have an
immediate effect, the Company will continue to evaluate its impact as further
information becomes available. The Inflation Reduction Act also includes an
excise tax that would impose a 1% surcharge on stock repurchases, effective
January 1, 2023.

Russia, Belarus, Ukraine
With respect to the war in the Ukraine, the Company's business and operational
environment is impacted by, among other things, responsive governmental actions
including sanctions imposed by the U.S. and other governments. In the second
quarter of 2022, the Company exited substantially all business operations in
Russia, the net sales from which are less than one percent of DuPont's
consolidated net sales in 2021. The Company does not have operations in the
Ukraine. DuPont has experienced supply chain challenges and increased logistics,
raw material and energy costs due in part to the negative impact on the global
economy from the ongoing war in Ukraine. The extent to which the conflict may
continue to impact DuPont in future periods will depend on future developments,
including the severity and duration of the conflict, its impact on regional and
global economic conditions, and the extent of supply chain disruptions. DuPont
will continue to monitor the conflict and assess the related sanctions and other
effects and may take further actions if necessary.

Dividends

On June 30, 2022the Company announced that its Board of Directors declared a third quarter dividend of $0.33 per share paid on September 15, 2022to shareholders of record on July 29, 2022.

On October 19, 2022the Company announced that its Board of Directors declared a fourth quarter dividend of $0.33 per share payable on December 15, 2022to shareholders of record on November 30, 2022.

Laird Acquisition
On July 1, 2021, the Company completed the acquisition of Laird Performance
Materials ("Laird PM") from Advent International. The Company paid for the
acquisition from existing cash balances. See Note 3 to the interim Consolidated
Financial Statements and "Liquidity and Capital Resources" for more information.

N&B Transaction
On February 1, 2021, the Company completed the divestiture of the Nutrition &
Biosciences ("N&B") business to International Flavors & Fragrance Inc. ("IFF").
The distribution was effected through an exchange offer (the "Exchange Offer")
and the consummation of the Exchange Offer was followed by the merger of N&B
with a wholly owned subsidiary of IFF, with N&B surviving the merger as a wholly
owned subsidiary of IFF (the "N&B Merger" and, together with the Exchange Offer,
the "N&B Transaction").

                                       43
--------------------------------------------------------------------------------
  Table of Contents
The results of operations of DuPont for the three and nine months ended
September 30, 2021 present the historical financial results of N&B as
discontinued operations. The cash flows and comprehensive income related to N&B
have not been segregated and are included in the interim Consolidated Statements
of Cash Flows and interim Consolidated Statements of Comprehensive Income,
respectively, for the applicable periods. Unless otherwise indicated, the
information in the notes to the interim Consolidated Financial Statements refer
only to DuPont's continuing operations and do not include discussion of balances
or activity of N&B. See Note 4 to the interim Consolidated Financial Statements
for additional information on the N&B Transaction.


RESULTS OF OPERATIONS

Summary of Sales Results                                           Three Months Ended       Nine Months Ended
                                                                      September 30,           September 30,
In millions                                                          2022        2021        2022        2021
Net sales                                                        $   3,317    $ 3,199    $   9,913    $ 9,320


The following table summarizes the sales variances by segment and by geographic region compared to the previous year:

Sales variances by segment and Geographic region

                                          Three Months Ended September 30, 2022                                       Nine Months Ended September 30, 2022
Percentage change from   Local Price &                                  Portfolio &                 Local Price &                                  Portfolio &
prior year                Product Mix      Currency        Volume          Other          Total      Product Mix      Currency        Volume          Other          Total
Electronics &
Industrial                         3  %           (4) %          4  %             -  %        3  %            2  %           (3) %          6  %             7  %       12  %
Water & Protection                13              (5)            2                -          10              12              (3)           (1)               -           8
Corporate & Other 1               10              (4)            5              (30)        (19)             10              (3)            -              (27)        (20)
Total                              8  %           (4) %          3  %            (3) %        4  %            7  %           (3) %          2  %             -  %        6  %
U.S. & Canada                     12  %            -  %          7  %            (5) %       14  %           12  %            -  %          5  %            (2) %       15  %
EMEA 2                             9             (10)           (3)              (4)         (8)              9              (8)           (1)              (1)         (1)
Asia Pacific                       5              (5)            2               (2)          -               3              (3)            2                1           3
Latin America                     12               -            15               (2)         25               9               -             8                1          18
Total                              8  %           (4) %          3  %            (3) %        4  %            7  %           (3) %          2  %             -  %        6  %

1.Corporate & Other includes the businesses of the retained businesses and the previously divested businesses Biomaterials, Clean Technologies and Solamet®. 2.Europe, Middle East and Africa.

The Company reported net sales for the three months ended September 30, 2022 of
$3.3 billion, up 4 percent from $3.2 billion for the three months ended
September 30, 2021, due to an 8 percent increase in local price and product mix,
a 3 percent increase in volume, partially offset by a 3 percent decrease in
portfolio actions and a 4 percent unfavorable currency impact. Local price and
product mix increased across all operating segments, including within Water &
Protection (up 13 percent), Electronics & Industrial (up 3 percent) and
Corporate & Other (up 10 percent). Local price and product mix increased across
all regions. Volume also increased across each segment with Electronics &
Industrial (up 4 percent), Water & Protection (up 2 percent) and Corporate &
Other (up 5 percent). Portfolio and other changes declined 3 percent driven by
Corporate & Other (down 30 percent) due to the sale of the Biomaterials and
Clean Technologies businesses. Currency was down 4 percent compared with the
same period last year, primarily driven by the weakening of the euro against the
U.S. dollar in EMEA (down 10 percent).

Net sales for the nine months ended September 30, 2022 were $9.9 billion, up 6
percent from $9.3 billion for the nine months ended September 30, 2021, due to a
7 percent increase in local price and product mix, a 2 percent increase in
volume, partially offset by a 3 percent unfavorable currency impact. Local price
and product mix increased across all operating segments, including within Water
& Protection (up 12 percent), Electronics & Industrial (up 2 percent) and
Corporate & Other (up 10 percent). Local price and product mix increased across
all regions. Volume increase was driven by Electronics & Industrial (up 6
percent), partially offset by Water & Protection (down 1 percent), and Corporate
& Other was flat. Portfolio and other in total was flat, however, the addition
of Laird PM in Electronics & Industrial (up 7 percent) was offset by declines
within Corporate & Other (down 27 percent) due to the sale of the Biomaterials,
Clean Technologies and Solamet® businesses. Currency was down 3 percent compared
with the same period last year, primarily driven by the weakening of the euro
against the U.S. dollar in EMEA (down 8 percent).

                                       44

--------------------------------------------------------------------------------
  Table of Contents
Cost of Sales
Cost of sales was $2.1 billion for the three months ended September 30, 2022, up
from $2.0 billion for the three months ended September 30, 2021. Cost of sales
increased for the three months ended September 30, 2022 primarily due to
increased sales volume, higher raw materials costs and higher logistics and
energy costs, partially offset by a payroll tax credit recognized under the ERC
of the CARES Act.

Cost of sales as a percentage of net sales for the three months ended
September 30, 2022 was 63%, compared to 64% for the three months ended September 30, 2021.

For the nine months ended September 30, 2022, cost of sales was $6.4 billion, up
from $5.9 billion for the nine months ended September 30, 2021. Cost of sales
increased for the nine months ended September 30, 2022 primarily due to
increased sales volume, currency impacts, and higher raw materials and higher
logistics and energy costs, partially offset by a payroll tax credit recognized
under the ERC of the CARES Act.

Cost of sales as a percentage of net sales for the nine months ended
September 30, 2022 was 64%, compared to 63% for the nine months ended September 30, 2021.

Research and Development Expenses ("R&D")
R&D expenses totaled $129 million in the third quarter of 2022, down from $137
million in the third quarter of 2021. This slight decrease was due to a payroll
tax credit recognized under the ERC of the CARES Act. R&D as a percentage of net
sales was consistent period over period at 4 percent for the three months ended
September 30, 2022 and 2021.

For the first nine months of 2022, R&D expenses totaled $413 million up from
$409 million in the first nine months of 2021. R&D as a percentage of net sales
was consistent period over period at 4 percent for the nine months ended
September 30, 2022 and 2021.

Selling, General and Administrative Expenses ("SG&A")
SG&A expenses were $356 million in the third quarter of 2022, down from $411
million in the third quarter of 2021. SG&A as a percentage of net sales was 11
percent and 13 percent for the three months ended September 30, 2022 and 2021,
respectively. The decline for the three months ended September 30, 2022 as
compared with the same period of the prior year was primarily due to currency
fluctuations, lower personnel related expenses and a payroll tax credit
recognized under the ERC of the CARES Act.

For the first nine months of 2022, SG&A expenses totaled $1,130 million, down
from $1,201 million in the first nine months of 2021. SG&A as a percentage of
net sales was 11 percent and 13 percent for the nine months ended September 30,
2022 and 2021, respectively. The decline for the nine months ended September 30,
2022 as compared with the same period of the prior year was primarily due to
currency fluctuations, lower personnel related expenses and a payroll tax credit
recognized under the ERC of the CARES Act.

Amortization of Intangibles
Amortization of intangibles was $146 million in the third quarter of 2022, down
from $158 million in the third quarter of 2021. The decrease for the three
months ended September 30, 2022 as compared with the same period of the prior
year was primarily due to currency fluctuations.

In the first nine months of 2022, amortization of intangibles was $447 million,
up from $410 million in the same period of the prior year. The increase for the
nine months ended September 30, 2022 as compared with the same period of the
prior year was primarily due to the amortization of the intangible assets
acquired in the July 1, 2021 Laird PM acquisition.

Restructuring and Asset Related Charges - Net
Restructuring and asset related charges - net were zero in the third quarter of
2022, down from $1 million in the third quarter of 2021. The activity in the
third quarter of 2021 is related to the 2020 Restructuring Program.

In the first nine months of 2022, restructuring and asset related charges - net
were $101 million, up from $8 million in the same period last year. The activity
for the nine months of 2022 includes a $94 million impairment charge related to
an equity method investment. The activity for the nine months of 2021 is
primarily related to the 2020 Restructuring Program.

See note 6 of the interim consolidated financial statements for more information.

                                       45

--------------------------------------------------------------------------------
  Table of Contents
Acquisition, Integration and Separation Costs
Acquisition, integration and separation costs were $7 million in the third
quarter of 2022, down from $29 million in the third quarter of 2021. In the
first nine months of 2022, acquisition, integration and separation costs were
$28 million, down from $58 million in the same period of the prior year.
Acquisition, integration and separation costs primarily consist of financial
advisory, information technology, legal, accounting, consulting, and other
professional advisory fees. For the three and nine months ended September 30,
2022 these costs were primarily related to the divestiture of the Biomaterials
business unit, the 2021 acquisition of Laird PM and the Intended Rogers
Acquisition. Comparatively, for the three and nine months ended September 30,
2021 these costs were primarily associated with the acquisition of Laird PM and
the divestitures of the Biomaterials, Clean Technologies and Solamet® business
units. See Note 3 to the interim Consolidated Financial Statements for
additional information.

The separation costs associated with the M&M divestitures are presented in “Income from discontinued operations, net of tax” in the Interim Consolidated Statements of Income. See note 4 of the interim consolidated financial statements for more information.

Equity in Earnings of Nonconsolidated Affiliates
The Company's share of the earnings of nonconsolidated affiliates was $16
million in the third quarter of 2022, down from $22 million in the third quarter
of 2021. In the first nine months of 2022, the Company's share of the earnings
of nonconsolidated affiliates was $62 million, down from $65 million in the
first nine months of 2021. The decrease is primarily due to lower equity
earnings across the portfolio in the third quarter of 2022.

Sundry Income (Expense) - Net
Sundry income (expense) - net includes a variety of income and expense items
such as foreign currency exchange gains or losses, interest income, dividends
from investments, gains and losses on sales of investments and assets,
non-operating pension and other post-employment benefit plan credits or costs,
and certain litigation matters. Sundry income (expense) - net in the third
quarter of 2022 was income of $26 million compared with income of $1 million in
the third quarter of 2021. The third quarter of 2022 primarily included income
related to non-operating pension and other post-employment benefit credits of $7
million, interest income of $5 million, a $6 million adjustment to gain on prior
divestitures and foreign currency exchange gains of $5 million. The third
quarter of 2021 primarily included benefits related to non-operating pension and
other post-employment benefit credits of $9 million, and adjustments to previous
gains on divestiture and sales of other assets of $8 million, partially offset
by foreign currency exchange losses of $19 million.

In the first nine months of 2022, sundry income (expense) - net was income of
$123 million compared with income of $155 million. The first nine months of 2022
primarily included benefits related to income related to non-operating pension
and other post-employment benefit credits of $20 million, miscellaneous income
of $11 million, foreign currency exchange gains of $9 million and net gain on
the sale of the Biomaterials division of $26 million and $37 million related to
the sale of a land use right within the Water & Protection segment. The first
nine months of 2021 included benefits related to the sale of assets within
Corporate & Other and the Electronics & Industrial segment of $140 million and
$28 million, respectively, and income related to non-operating pension and other
post-employment benefit credits of $22 million, partially offset by
miscellaneous expenses of $17 million and foreign currency exchange losses of
$35 million.

Interest Expense
Interest expense was $128 million and $115 million for the three months ended
September 30, 2022 and 2021, respectively. Interest expense was $370 million and
$390 million for the nine months ended September 30, 2022 and 2021,
respectively. The increase in interest expense for the three months ended
September 30, 2022 compared to the same period of the prior year primarily
relates to increased commercial paper borrowing and intra-quarter borrowing on
the 364-day Revolving Credit Facility. The decrease in interest expense nine
months ended September 30, 2022 compared to the same period of the prior year
primarily relates to the reduction in long-term debt following the N&B
Transaction, specifically the early repayment of the $3.0 billion Term Loan
Facilities in February 2021 and the redemption of the May 2020 Notes completed
in May 2021. Refer to Note 15 to the interim Consolidated Financial Statements
for additional information.

                                       46
--------------------------------------------------------------------------------
  Table of Contents
Provision for Income Taxes on Continuing Operations
The Company's effective tax rate fluctuates based on, among other factors, where
income is earned and the level of income relative to tax attribute. The
effective tax rate on continuing operations for the third quarter of 2022 was
27.9 percent, compared with an effective tax rate of 23.6 percent for the third
quarter of 2021. The effective tax rate differential for the third quarter of
2022 was driven by the cumulative impact of currency fluctuation and the
geographic mix of earnings. The effective tax rate differential for the second
quarter of 2021 included a $12 million tax benefit relating to the impact of
changes in tax law enacted during the quarter. For the first nine months of
2022, the effective tax rate on continuing operations was 23.8 percent, compared
with 14.2 percent for the first nine months of 2021. The effective tax rate for
the third quarter and for the first nine months of 2021 was principally the
result of a $59 million tax benefit related to the step-up in tax basis in the
goodwill of the Company's European regional headquarters legal entity.


SECTOR RESULTS

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

The Mobility & Material Businesses costs that are classified as discontinued
operations include only direct operating expenses incurred by the M&M Businesses
which the Company will cease to incur upon the close of the M&M Divestitures.
Indirect costs, such as those related to corporate and shared service functions
previously allocated to the M&M Businesses, do not meet the criteria for
discontinued operations and remain reported within continuing operations. A
portion of these indirect costs include costs related to activities the Company
will continue to undertake post-closing of the M&M Divestiture, and for which it
will be reimbursed ("Future Reimbursable Indirect Costs"). Future Reimbursable
Indirect Costs are reported within continuing operations but are excluded from
operating EBITDA as defined below. The remaining portion of these indirect costs
are not subject to future reimbursement ("Stranded Costs"). Stranded Costs are
reported within continuing operations in Corporate & Other and are included
within Operating EBITDA.

The Company's measure of profit/loss for segment reporting purposes is Operating
EBITDA as this is the manner in which the Company's chief operating decision
maker ("CODM") assesses performance and allocates resources. The Company defines
Operating EBITDA as earnings (i.e., "Income from continuing operations before
income taxes") before interest, depreciation, amortization, non-operating
pension / OPEB benefits / charges, and foreign exchange gains / losses,
excluding Future Reimbursable Indirect Costs, and adjusted for significant
items. Reconciliations of these measures can be found in Note 23 to the interim
Consolidated Financial Statements.

                                       47

--------------------------------------------------------------------------------
  Table of Contents
ELECTRONICS & INDUSTRIAL

The Electronics & Industrial segment is a leading global supplier of
differentiated materials and systems for a broad range of consumer electronics
including mobile devices, television monitors, personal computers and
electronics used in a variety of industries. The segment is a leading provider
of materials and solutions for the fabrication and packaging of semiconductors
and integrated circuits and provides innovative solutions for thermal management
and electromagnetic shielding as well as metallization processes for metal
finishing, decorative, and industrial applications. Electronics & Industrial is
a leading provider of platemaking systems and photopolymer plates for the
packaging graphics industry, digital printing inks and cutting-edge materials
for the manufacturing of displays for organic light emitting diode. In addition,
the segment produces innovative engineering polymer solutions, high performance
parts, medical silicones and specialty lubricants.

Electronics & Industrial                                                 Three Months Ended                Nine Months Ended
                                                                                      September 30,   September 30,  September 30,
In millions                                                       September 30, 2022       2021           2022            2021
Net sales                                                        $        1,511       $     1,467    $      4,574    $     4,087
Operating EBITDA                                                 $          473       $       475    $      1,429    $     1,335
Equity earnings                                                  $            7       $        13    $         26    $        32



Electronics & Industrial                                    Three Months Ended         Nine Months Ended
Percentage change from prior year                           September 30, 2022        September 30, 2022
Change in Net Sales from Prior Period due to:
Local price & product mix                                                     3  %                      2  %
Currency                                                                     (4)                       (3)
Volume                                                                        4                         6
Portfolio & other                                                             -                         7
Total                                                                         3  %                     12  %



Electronics & Industrial net sales were $1,511 million for the three months
ended September 30, 2022, up 3 percent from $1,467 million for the three months
ended September 30, 2021. Net sales increased due to a 4 percent increase in
volume and a 3 percent increase in local price, partially offset by 4 percent
unfavorable currency impact. Volume growth was led by Semiconductor Technologies
which was driven by continued transition to more advanced node technologies and
high performance computing, including cloud and data centers. Volume gains in
Industrial Solutions were driven by growth in electronics applications,
healthcare and aerospace markets. Within Interconnect Solutions, volume gains in
industrial-end markets and for applications requiring electromagnetic shieldingg
and thermal management were more than offset by declines in smartphones,
consumer electronics and automotive markets.

Operating EBITDA was $473 million for the three months ended September 30, 2022which remained stable compared to $475 million for the three months ended
September 30, 2021. Volume growth and price gains were offset by higher raw material logistics and energy costs and lower equity earnings.

Electronics & Industrial net sales were $4,574 million for the nine months ended
September 30, 2022, up 12 percent from $4,087 million for the nine months ended
September 30, 2021. Net sales increased due to a 7 percent increase in
portfolio, a 6 percent increase in volume and a 2 percent increase in local
price, partially offset by 3 percent unfavorable currency impact. The portfolio
impact reflects the July 1, 2021 acquisition of Laird PM. Volume growth was led
by Semiconductor Technologies which was driven by transition to more advanced
node technologies, growth in high performance computing and 5G communications.
Within Industrial Solutions, volume gains were driven by higher demand in
healthcare and industrial-end markets as well as continued strength in
electronics applications. Within Interconnect Solutions, volume gains driven by
Laird acquisition and higher demand in industrial films, were more than offset
by weakness in consumer electronics, smartphones, and automotive.

Operating EBITDA was $1,429 million for the nine months ended September 30, 2022up 7% from $1,335 million for the nine months ended
September 30, 2021 driven by strong volume growth and price gains, the acquisition of Laird PM, partially offset by higher raw material and logistics costs and higher plant start-up costs.

                                       48

--------------------------------------------------------------------------------
  Table of Contents
WATER & PROTECTION

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

Water & Protection                                                   Three Months Ended                Nine Months Ended
                                                                                  September 30,   September 30,  September 30,
In millions                                                   September 30, 2022       2021           2022            2021
Net sales                                                    $        1,534       $     1,397    $      4,460    $     4,137
Operating EBITDA                                             $          382       $       353    $      1,071    $     1,060
Equity earnings                                              $            9       $         7    $         31    $        27




Water & Protection                                           Three Months Ended         Nine Months Ended
Percentage change from prior year                            September 30, 2022        September 30, 2022
Change in Net Sales from Prior Period due to:
Local price & product mix                                                     13  %                     12  %
Currency                                                                      (5)                       (3)
Volume                                                                         2                        (1)
Portfolio & other                                                              -                         -
Total                                                                         10  %                      8  %



Water & Protection net sales were $1,534 million for the three months ended
September 30, 2022, up 10 percent from $1,397 million for the three months ended
September 30, 2021. Net sales increased due to a 13 percent increase in local
price and a 2 percent increase in volume, partially offset by a 5 percent
unfavorable currency impact. Local price & product mix gains were driven by
broad-based actions across all lines of business to offset continued cost
inflation, led by Shelter Solutions and Safety Solutions. Volume growth was
driven by strong global demand across all technologies within Water Solutions.

Operating EBITDA was $382 million for the three months ended September 30, 2022,
up 8 percent compared with $353 million for the three months ended September 30,
2021 driven by volume increases and pricing gains which together more than
offset higher raw material, logistics and energy costs, changes in product mix
and unfavorable currency impacts.

Water & Protection net sales were $4,460 million for the nine months ended
September 30, 2022, up 8 percent from $4,137 million for the nine months ended
September 30, 2021. Net sales increased due to a 12 percent increase in local
price, partially offset by a 3 percent unfavorable currency impact and a 1
percent decrease in volume. Demand in Shelter Solutions residential commercial
construction markets as well as increased demand for water technologies within
Water Solutions were offset by volume declines in Safety Solutions. Within Water
& Protection pricing actions throughout the segment were driven by Shelter
Solutions and Safety Solutions.

Operating EBITDA was $1,071 million for the nine months ended September 30, 2022up 1% from $1,060 million for the nine months ended
September 30, 2021 as pricing actions were partially offset by higher raw material, logistics and energy costs, as well as product mix and unfavorable currency effects.

                                       49

--------------------------------------------------------------------------------
  Table of Contents
Corporate & Other

Corporate & Other includes sales and activity of the Retained Businesses
including the Auto Adhesives & Fluids, MultibaseTM and Tedlar® product lines,
previously reported in the historic Mobility & Materials segment. Related to the
M&M Divestitures, Corporate & Other includes Stranded Costs and Future
Reimbursable Indirect Costs. The results of Corporate & Other include the sales
and activity of previously divested businesses including the operations of
Biomaterials, Clean Technologies, and Solamet® business units. Corporate & Other
also includes certain enterprise and governance activities including
non-allocated corporate overhead costs and support functions, leveraged
services, non-business aligned litigation expenses and other costs not absorbed
by reportable segments.

Corporate & Other                                                 Three Months Ended             Nine Months Ended
                                                             September 30,  September 30,   September 30,  September 30,
In millions                                                      2022           2021            2022            2021
Net sales                                                    $      272    $        335    $        879    $     1,096
Operating EBITDA                                             $        1    $        (11)   $          3    $         5
Equity earnings                                              $        -    $          2    $          5    $         6


Corporate & Other net sales were $272 million for the three months ended
September 30, 2022down $335 million for the three months ended
September 30, 2021. Net sales decreased mainly due to the disposals of the Biomaterials business in May 2022 and the Clean Technologies activity in
December 2021.

Corporate & Other net sales were $879 million for the nine months ended
September 30, 2022, down from $1,096 million for the nine months ended
September 30, 2021. Net sales primarily decreased due to the divestitures of the
Biomaterials, Clean Technologies and Solamet® businesses, partially offset by an
increase in the net sales of the Retained Businesses.

                                       50

--------------------------------------------------------------------------------
  Table of Contents
CHANGES IN FINANCIAL CONDITION

Liquidity & Capital Resources
Information related to the Company's liquidity and capital resources can be
found in the Company's 2021 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 nine months ended September 30, 2022.

The Company continually reviews its sources of liquidity and debt portfolio and
may make adjustments to one or both to ensure adequate liquidity and increase
the Company's optionality and financing efficiency as it relates to financing
cost and balancing terms/maturities. The Company's primary source of incremental
liquidity is cash flows from operating activities. Management expects the
generation of cash from operations and the ability to access the debt capital
markets and other sources of liquidity will continue to provide sufficient
liquidity and financial flexibility to meet the Company's and its subsidiaries'
obligations as they come due.

        In millions                    September 30, 2022    December 31, 2021
        Cash and cash equivalents     $             1,785   $            1,972
        Total debt                    $            11,851   $           10,782



The Company's cash and cash equivalents at September 30, 2022 and December 31,
2021 were $1.8 billion and $2.0 billion, respectively, of which $1.5 billion
at September 30, 2022 and $1.4 billion at December 31, 2021 were held by
subsidiaries in foreign countries, including United States territories. The
increase in cash and cash equivalents held by subsidiaries in foreign countries
is due to operating cash flows during the period partly offset by repatriation
activities. For each of its foreign subsidiaries, the Company makes an assertion
regarding the amount of earnings intended for permanent reinvestment, with the
balance available to be repatriated to the United States.

Total debt at September 30, 2022 and December 31, 2021 was $11.9 billion and
$10.8 billion, respectively. The increase was primarily due to the increase in
commercial paper issuances.

As of September 30, 2022, the Company is contractually obligated to make future
cash payments of $10.7 billion and $5.7 billion associated with principal and
interest, respectively, on debt obligations assuming held to maturity. Related
to the principal balance, all payments will be due subsequent to December 31,
2022. Related to interest, $514 million will be due in the next twelve months
and the remainder will be due subsequent to September 30, 2023. On November 8,
2022, the Company announced its intent to redeem $2.5 billion of 2018 Senior
Notes by the end of 2022. Refer to Note 24 - Subsequent Events for additional
information.

Revolving Credit Facilities
On April 12, 2022, the Company entered into a new $2.5 billion five-year
revolving credit facility (the "Five-Year Revolving Credit Facility"). As of the
effectiveness of the Five-Year Revolving Credit Facility, the Company's prior
$3 billion five-year revolving credit facility entered in May 2019 was
terminated. All material conditions and covenants in the Five-Year Revolving
Credit Facility are consistent with those of the prior, terminated credit
facility. The Five-Year Revolving Credit Facility is generally expected to
remain undrawn and serve as a backstop to the Company's commercial paper and
letter of credit issuance.

On April 12, 2022, the Company entered into an updated $1.0 billion 364-day
revolving credit facility (the "2022 $1B Revolving Credit Facility") as the $1.0
billion 364-day revolving credit facility entered in April 2021 (the "2021 $1B
Revolving Credit Facility") had an expiration date in mid-April. As of the
effectiveness of the 2022 $1B Revolving Credit Facility, the 2021 $1B Revolving
Credit Facility was terminated. The 2022 $1B Revolving Credit facility may be
used for general corporate purposes.

In July 2022the company took $600 million under the 364-day revolving credit facility to facilitate certain internal intercompany restructuring steps related to the M&M divestiture. The Company repaid the loan in September 2022.

Special Cash Payment
In connection with and in accordance with the terms of the N&B Transaction,
prior to consummation of the Exchange Offer and the N&B Merger, DuPont received
a one-time cash payment of approximately $7.3 billion, (the "Special Cash
Payment") pursuant to the terms of the N&B Separation and Distribution
Agreement. The Company utilized the Special Cash Payment to repay the $3 billion
Term Loan Facilities and used a portion of the Special Cash Payment to redeem
the May 2020 Notes, as discussed below.

                                       51

--------------------------------------------------------------------------------
  Table of Contents
Term Loan Facilities
On February 1, 2021, the Company terminated its fully drawn $3 billion term loan
facilities. The termination triggered the repayment of the aggregate outstanding
principal amount of $3 billion, plus accrued and unpaid interest through and
including January 31, 2021. The Company funded the repayment with proceeds from
the Special Cash Payment.

May 2020 Debt Offering
On May 1, 2020, the Company completed an underwritten public offering of senior
unsecured notes (the "May 2020 Notes") in the aggregate principal amount of $2
billion of 2.169 percent fixed rate Notes due May 1, 2023 (the "May 2020 Debt
Offering"). Upon consummation of the N&B Transaction, the special mandatory
redemption feature of the May 2020 Debt Offering was triggered, requiring the
Company to redeem all of the May 2020 Notes at a redemption price equal to 100%
of the aggregate principal amount of the May 2020 Notes plus accrued and unpaid
interest. The Company redeemed the May 2020 Notes on May 13, 2021 and funded the
redemption with proceeds from the Special Cash Payment.

Laird Performance Materials
On July 1, 2021, the Company completed the acquisition of Laird PM from Advent
International for aggregate consideration of $2.4 billion, which reflects
adjustments, including for acquired cash and net working capital. The
acquisition is part of the Interconnect Solutions business within the
Electronics & Industrial segment. The Company paid for the acquisition from
existing cash balances.

Intended Rogers Acquisition
In connection with the Intended Rogers Acquisition, on November 22, 2021, the
Company entered into a two-year senior unsecured committed term loan agreement
in the amount of $5.2 billion. In October 2022, the facility was amended to
extend the lending commitment (as amended the "Amended 2021 Term Loan
Facility"). On November 1, 2022, the M&M Divestiture closed and therefore based
on the terms of the Amended 2021 Term Loan Facility the commitment was
terminated. Refer to Note 24 - Subsequent Events for additional information.

The Amended 2021 Term Loan Facility, the Five-Year Revolving Credit Facility,
the 2022 $1B Revolving Credit Facilities and the revolving credit facilities
entered into in 2022 contain a financial covenant, typical for companies with
similar credit ratings, requiring that the ratio of Total Indebtedness to Total
Capitalization for the Company and its consolidated subsidiaries not exceed
0.60. At September 30, 2022, the Company was in compliance with this financial
covenant.

Credit Ratings
The Company's credit ratings impact its access to the debt capital markets and
cost of capital. The Company remains committed to maintaining a strong financial
position with a balanced financial policy focused on maintaining a strong
investment-grade rating and driving shareholder value and remuneration. At
November 4, 2022, DuPont's credit ratings were as follows:

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



The Company's indenture covenants include customary limitations on liens, sale
and leaseback transactions, and mergers and consolidations, subject to certain
limitations. The senior unsecured notes (the "2018 Senior Notes") also contain
customary default provisions. The Amended 2021 Term Loan Facility, the Five-Year
Revolving Credit Facility, the 2022 $1B Revolving Credit Facilities and the
revolving credit facilities entered into in 2022 contain a financial covenant,
typical for companies with similar credit ratings, requiring that the ratio of
Total Indebtedness to Total Capitalization for the Company and its consolidated
subsidiaries not exceed 0.60. At September 30, 2022, the Company was in
compliance with this financial covenant.

                                       52

————————————————– ——————————

Contents

© Edgar Online, source Previews

Share.

About Author

Comments are closed.