DowDuPont 2Q18 Earnings Conference Call August 2, 2018
Second Quarter Highlights Financial & Operational Highlights – Sales grew 17% - up in all divisions, all regions – Volume grew 10% with gains in all divisions, all regions – Local price rose 4% with gains in all divisions, all regions – Operating EBITDA increased 29%, up double-digits in all divisions – Adjusted EPS rose 41% to $1.37 Cost Synergy Highlights – >$375MM of cost synergy savings in 2Q, ~$900MM since merger close – Increasing YoY savings target to $1.4B from $1.2B – On pace to deliver 75% of $3.3B run-rate by end of 3Q18 ©2018 DowDuPont. All rights reserved. 2
Progress to Spins & Key Activities . Delivered earnings growth each quarter since merger close Merger . Increased cost synergy target to $3.3B; accelerated Year 1 run-rate target Close . Achieved nearly $900MM in cost synergy savings since merger close Timing of . Announced Materials Science leadership Thru . Announced 10 new Advisory Committee members Separations 1H18 . Returned $5.6B to shareholders since merger close April 1, 2019 . Completed realignment of Hemlock Semi. JV to New DuPont . Announce Corteva and New DuPont leadership . Achieve 75% cost synergy run-rate by end of 3Q and $1.4B YoY savings in 2018 . Initial Forms 10 filing: New Dow in Sep; Corteva in Oct 2H18 . Finalize capital structure June 1, 2019 . Investor events – November . Begin to deploy IT systems and stand up legal entities . Finalize agreement terms (site services, raw material purchases, etc.) June 1, 2019 . Forms 10 made effective . Analyst & investor events . Equity roadshows 1H19 . Complete IT systems and legal entity transitions . New Dow separates . Corteva separates; New DuPont formed ©2018 DowDuPont. All rights reserved. 3
2Q 2018 Financial Highlights1 Financial Performance Snapshot 2Q18 2Q17 B/(W) Net Sales ($MM) 24,245 20,717 3,528 + 17% Operating EBITDA ($MM) 5,676 4,393 1,283 + 29% GAAP EPS from Cont. Ops. ($/share) 0.76 1.07 (0.31) (29%) Adjusted EPS ($/share) 1.37 0.97 0.40 + 41% 2Q 2018 Pro Forma Adjusted EPS Variance Highlights • Continuing synergy $1.37 acceleration • Price & Volume gains • Higher equity earnings • Favorable currency impact • Lower pension & OPEB $0.97 costs • Lower tax rate 2Q17 2Q18 Other • Higher raw material costs Currency Synergies Lower Lower Tax • Increased turnaround Materials Turnarounds Net of Raw of Net Pension/OPEB Equity Equity Earnings Price Volume,&Price activity in Materials Science ©2018 DowDuPont. All rights reserved. 4 1. Prior year net sales and non-GAAP information is on a pro forma basis and was determined in accordance with Article 11 of Regulation S-X.
3Q18 Modeling Guidance Refer to slide 12 in Appendix for additional commentary on 3Q segment outlook Net Sales: $20.0B – $20.5B Adj. EPS: ↗ up mid-thirties percent ↗ up low-teens percent Division Outlook 3Q18 vs. 3Q171 Net Sales Op. EBITDA (incl. Equity Earnings) Agriculture Up mid-single digits percent Up mid-twenties percent Materials Science2 Up mid-teens percent Up high-single digits percent Electronics & Imaging2 Flat Up low-single digits percent Nutrition & Biosciences Up mid-teens percent Up mid-twenties percent Transportation & Advanced Polymers Up mid-single digits percent Up high-twenties percent Spec. Products Safety & Construction Up high-single digits percent Up low-teens percent 3Q Operational Tax Rate Corporate Segment Operating EBITDA ($175)MM – ($195)MM 19 – 22% (excl. EGL, DuPont Amort. & Sig. Items) D&A (includes the DuPont Amortization expense $1.5B – $1.6B DuPont Non-operating pension/OPEB $125MM – $135MM YoY below) (includes step-up D&A) (included in Op. EBITDA) benefit Net Interest Expense DuPont Amortization expense ~$320MM pre-tax (net of Interest Income, which is reported in $320MM – $340MM Taxed at ~21% (this is added back while calculating Adj. EPS) Sundry Income/Expense line) 3Q18 Net Income attributable to non-controlling ~$40MM Share Count ~2,315MM Interests (reduced from net income) YoY Synergy Savings Realized in Q318: $400MM – $425MM 1. All 3Q17 numbers are on a pro forma basis 2. Reflects HSC portfolio realignment between Materials Science Division (PM&C Segment) to Specialty Products Division (E&I Segment) 5 ©2018 DowDuPont. All rights reserved.
FY18 Modeling Guidance Full Year Net Sales: ↗ up low-teens percent Full Year Adj. EPS: ↗ up low-twenties percent Division Outlook FY18 vs. FY171 Net Sales Op. EBITDA (incl. Equity Earnings) Agriculture Flat Up mid-single digits percent Materials Science2 Up mid-teens percent Up mid-teens percent Specialty Products2 Up high-single digits percent Up high-teens percent FY Operational Tax Rate Corporate Segment Operating EBITDA ($720)MM – ($740)MM 20 – 22% (excl. EGL, DuPont Amort. & Sig. Items) D&A (includes the DuPont Amortization expense $5.6B – $5.8B DuPont Non-operating pension/OPEB $500MM – $525MM YoY below) (includes step-up D&A) (included in Op. EBITDA) benefit Net Interest Expense DuPont Amortization expense ~$1.25B pre-tax (net of Interest Income, which is reported in $1.25B – $1.30B Taxed at ~21% (this is added back while calculating Adj. EPS) Sundry Income/Expense line) FY18 Net Income attributable to non-controlling ~$160MM Share Count ~2,320MM Interests (reduced from net income) YoY Synergy Savings Realized in FY18: $1.4B 1. All FY17 numbers are on a pro forma basis 2. Reflects HSC portfolio realignment between Materials Science Division (PM&C Segment) to Specialty Products Division (E&I Segment) 6 ©2018 DowDuPont. All rights reserved.
Agriculture Highlights Second Quarter Results 2Q18 2Q17 • Seed sales of $3.9 billion increased 35% driven by sales volumes recovered from Net Sales ($MM) 5,730 4,595 weather-related delays in planting in the Northern Hemisphere. Higher local price, Op. EBITDA ($MM) 1,685 1,165 related to new corn hybrids and A-series soybean. Op. EBITDA Margin 29.4% 25.4% • Crop Protection sales of $1.9 billion rose 7%, primarily due to volume gains associated YoY Sales change: Vol +20%, Local Price +4% with weather-related delays. Insecticide sales grew 20%, driven by strong product Currency +1%, Port./Other – positioning and better supply. Currency offset a decline in local price. • Operating EBITDA of $1.7 billion increased 45% due to the volume growth in NA and 1H 2018 Net Sales EMEA, higher selling prices in Seed, cost synergies, currency and lower pension/OPEB costs, partly offset lower expected planted area in North America, higher soybean royalty costs, increased R&D spending and investments in digital platforms. First Half Results • Net sales of $9.5 billion decreased 1% as higher local prices, currency and new product sales were more than offset by a volume decline due to lower expected planted area in North America and Brazil, and sales of lower technology seeds in Brazil. Seed Seed Crop Protection sales declined 3% while Crop Protection sales rose 3%. • Operating EBITDA of $2.6 billion declined 2% on higher product costs, lower expected 1H18 1H17 planted area in NA, a weaker Safrinha season and investments to support new product launches, partly offset by cost synergies, currency, lower pension/OPEB costs and Net Sales ($MM) 9,538 9,644 sales gains in Crop Protection. Op. EBITDA ($MM) 2,576 2,626 Op. EBITDA Margin 27.0% 27.2% Second Half Outlook YoY Sales change: Vol (5%), Local Price +2% • Sales in 2H expected to rise mid-single digits with volume and price gains, including Currency +2%, Port./Other – benefits from new product launches, partly offset by currency and portfolio. • Op. EBITDA in 2H to improve by >$100 million with growth in LA, new product launches in Crop Protection and cost synergies, partly offset by currency, portfolio and a corn-to- soy shift in Brazil. ©2018 DowDuPont. All rights reserved. 7 Prior year information is on a pro forma basis and was determined in accordance with Article 11 of Regulation S-X.
Materials Science Highlights Division Highlights 2Q18 2Q17 Division Sales Change Net Sales ($MM) 12,583 10,696 Vol +10% • Net sales up 18%; Op. EBITDA up 22%; both up in all segments Local Price +5% • $175MM higher equity earnings (Kuwait JV’s up $99MM, Sadara Op. EBITDAJen/Ann ($MM) 2,581 2,120 Currency +3% up $82MM) Op. EBITDA Margin 20.5% 19.8% Port./Other – Performance Materials & Coatings Industrial Intermediates & Infrastructure Packaging & Specialty Plastics • Net sales up 15%; Op. EBITDA up 5% • Net sales up 29%; Op. EBITDA up 64% • Net sales up 12%; Op. EBITDA up 14% • Consumer Solutions delivered double- • Polyurethanes & CAV sales up double- • Sales gains driven by volume and local digit sales growth on local price gains digits in all regions led by improved price gains in most regions in all regions, price/volume pricing, customer wins in downstream • Double-digit demand growth in food & management in upstream silicone systems applications and improved specialty, industrial & consumer and intermediates and growth synergies Sadara supply rigid packaging end-markets • Coatings & Performance Monomers • Industrial Solutions sales grew in • Op. EBITDA up on broad-based price sales grew, led by local price industrial and consumer-led increases and volume growth, higher increases in all regions applications including lubricants and equity earnings and cost synergies, • Op. EBITDA up on increased pricing, solvents which more than offset increased improved product mix and cost & • Op. EBITDA up on higher price, cost feedstock costs and higher planned growth synergies, partly offset by the synergies and increased equity turnaround activity absence of a SQLY asset sale gain earnings 2Q18 2Q17 2Q18 2Q17 2Q18 2Q17 Net Sales ($MM) 2,599 2,255 Net Sales ($MM) 3,885 3,013 Net Sales ($MM) 6,099 5,428 Op. EBITDA ($MM) 569 540 Op. EBITDA ($MM) 682 417 Op. EBITDA ($MM) 1,330 1,163 Op. EBITDA Margin 21.9% 23.9% Op. EBITDA Margin 17.6% 13.8% Op. EBITDA Margin 21.8% 21.4% YoY Sales Change: Vol +2%, YoY Sales Change: Vol +18%, YoY Sales Change: Vol +8%, Local Price +10%, Currency +3%, Port./Other – Local Price +8%, Currency +3%, Port./Other – Local Price +1%, Currency +3%, Port./Other – ©2018 DowDuPont. All rights reserved. 8 Prior year information is on a pro forma basis and was determined in accordance with Article 11 of Regulation S-X.
Specialty Products Highlights Division Highlights 2Q18 2Q17 Division Sales Change Net Sales ($MM) 5,857 5,328 Vol +4% • Volume gains delivered by all four segments and across all regions Local Price +1% Op. EBITDAJen/Ann ($MM) 1,592 1,298 Currency +3% • Op. EBITDA margin expanded by 280 bps Op. EBITDA Margin 27.2% 24.4% Port./Other +2% Electronics & Imaging Nutrition & Biosciences Trans & Adv Polymers Safety & Construction • Volume growth led by a • Volume growth led by N&H • Volume gains led by • Volume gains led by double-digit gain in on improved demand in increases in all key end- strength in aramids in interconnect solutions & specialty proteins & markets including auto, industrial and aerospace continued strength in semis; continued gains in probiotics electronics, aerospace & end-markets partially offset by declines in & pharma healthcare. Gains in local • Construction volumes photovoltaics • Volume growth in IB on price were driven by nylon increased due to end- • Op. EBITDA down 9% as increased demand for amid tight supply and higher market improvement cost synergies, volume bioactives & double-digit feedstock costs • Op. EBITDA increased 30% growth, lower pension/OPEB gains in CleanTech • Op. EBITDA up 45% as primarily due to lower costs, and a currency benefit • Op. EBITDA up 36% on a sales gains, lower pension/OPEB costs, were more than offset by the portfolio benefit, cost pension/OPEB costs, increased volume, cost absence of a prior year gain synergies, volume growth currency and cost synergies synergies and currency; on the sale of a business and lower pension/OPEB were partly offset by higher partially offset by higher raw and higher unit costs costs raw materials material costs 2Q18 2Q17 2Q18 2Q17 2Q18 2Q17 2Q18 2Q17 Net Sales ($MM) 1,203 1,221 Net Sales ($MM) 1,775 1,494 Net Sales ($MM) 1,468 1,284 Net Sales ($MM) 1,411 1,329 Op. EBITDA ($MM) 372 410 Op. EBITDA ($MM) 433 318 Op. EBITDA ($MM) 446 308 Op. EBITDA ($MM) 341 262 Op. EBITDA Margin 30.9% 33.6% Op. EBITDA Margin 24.4% 21.3% Op. EBITDA Margin 30.4% 24.0% Op. EBITDA Margin 24.2% 19.7% YoY Sales change: Vol +3%, Local Price – YoY Sales change: Vol +4%, Local Price +1% YoY Sales change: Vol +6%, Local Price +5% YoY Sales change: Vol +3%, Local Price +1% Currency +1%, Port./Other (5%) Currency +3%, Port./Other +11% Currency +3% , Port./Other – Currency +2%, Port./Other – ©2018 DowDuPont. All rights reserved. 9 Prior year information is on a pro forma basis and was determined in accordance with Article 11 of Regulation S-X.
Appendix
3Q18 Segment Expectations Refer in conjunction with slide 5. Segments Key Sales and Operating EBITDA Outlook Drivers (3Q18 vs. 3Q171) 3Q sales growth in mid-single digits on new products - including increased Leptra® corn penetration and new crop protection launches - and pricing benefits. Operating EBITDA to rise mid-20s percent in 3Q led by cost synergies, lower pension/OPEB expense and sales gains, partly offset by unfavorable currency (BRL) and portfolio changes. Full-year sales Agriculture expected to be flat with new product launches and pricing offset by reductions in planted area in NA and LA. Full-year EBITDA up mid-single digits due to pricing, cost synergies and lower pension/OPEB costs, partly offset by higher royalty expense and investments in R&D and digital platforms. Sales up on continued pricing momentum, currency tailwinds and robust downstream market demand. Operating EBITDA Performance Materials growth driven by pricing gains in upstream silicone intermediates, as well as cost and growth synergies. Note: Effective in & Coatings 3Q18, HSC equity earnings will be reported in the Electronics & Imaging segment. Sales growth on volume from new Sadara capacity and sustained healthy demand. Operating EBITDA expected to be down on softening isocyanates pricing, from 1H levels, as well as an MDI force majeure ($40MM – $60MM headwind) on the Industrial Intermediates USGC. These headwinds are expected to be partly offset by continued cost synergies. 3Q18 equity earnings expected to be & Infrastructure up ~$30MM YoY on sustained MEG margins and continued Sadara improvement. The YoY Sadara improvement is expected to moderate vs. the 1H pace as the JV laps full commercial operations. Sales growth supported by U.S. Gulf Coast capacity additions and strong demand. Operating EBITDA up on new capacity, lower startup costs (~$20MM in 3Q18) and continued cost synergies, partly offset by higher feedstock costs and turnaround Packaging & Specialty activity (up $40MM - $60MM YoY). 3Q18 equity earnings expected to be flat YoY at ~$70MM, as improvement from Sadara Plastics and the Kuwait JVs are offset by the Thailand JVs due to compressing naphtha margins. The YoY Sadara improvement is expected to moderate vs. the 1H pace as the JV laps full commercial operations. Sales expected to be about flat as volume growth will be offset by lower local price. Continued strength in semiconductors and interconnect solutions is expected to be partially offset by declines in photovoltaics due to reduced incentives in China. Electronics & Imaging Operating EBITDA expected to be up low-single-digits percent on cost synergies, volume growth and lower pension/OPEB costs partially offset by higher raw material costs, growth investments and lower equity earnings from the HSC joint venture. Sales expected to be up mid-teens percent on benefits from portfolio-related actions (FMC acquisition), volume growth and Nutrition & Biosciences local price gains. Operating EBITDA expected to be up in the mid-twenties percent range on sales gains, cost synergies, lower pension/OPEB costs, partially offset by higher raw material costs and growth investments. Sales to increase by mid-single digits percent driven by volume and local pricing gains, reflecting strong end-market demand Transportation & and continued tightness in nylon markets. Operating EBITDA projected to increase by the high-twenties percent on sales Advanced Polymers gains, cost synergies and lower pension/OPEB expense, partly offset by higher raw materials costs. Sales to be up by the high-single digits percent on volume and local pricing gains driven by continued strength in industrial and construction markets. Operating EBITDA estimated to increase by the low-teens percent due to lower pension/OPEB Safety & Construction expense, cost synergies and sales gains partly offset by higher raw materials costs and the absence of a prior-year gain ($30MM). 1. 3Q17 on a pro forma basis 12 ©2018 DowDuPont. All rights reserved.
Safe Harbor Statement Regulation G This presentation includes information that does not conform to U.S. GAAP and are considered non-GAAP measures. These measures include the Company's pro forma consolidated results and pro forma earnings per share on an adjusted basis, which excludes the after-tax impact of pro forma significant items and the after-tax impact of pro forma amortization expense associated with DuPont's intangible assets. Management uses these measures internally for planning, forecasting and evaluating the performance of the Company's segments, including allocating resources. DowDuPont's management believes that these non-GAAP measures best reflect the ongoing performance of the Company during the periods presented and provide more relevant and meaningful information to investors as they provide insight with respect to ongoing operating results of the Company and a more useful comparison of year-over-year results. These non-GAAP measures supplement the Company's U.S. GAAP disclosures and should not be viewed as an alternative to U.S. GAAP measures of performance. Furthermore, such non-GAAP measures may not be consistent with similar measures provided or used by other companies. Reconciliations of non-GAAP measures to GAAP are provided in the financial schedules attached to the earnings news release and the Investor Relations section of the Company’s website. DowDuPont does not provide forward-looking GAAP financial measures or a reconciliation of forward-looking non-GAAP financial measures to the most comparable GAAP financial measures on a forward- looking basis because the Company is unable to predict with reasonable certainty the ultimate outcome of pending litigation, unusual gains and losses, foreign currency exchange gains or losses, potential future asset impairments and purchase accounting fair value adjustments, as well as discrete taxable events, without unreasonable effort. These items are uncertain, depend on various factors, and could have a material impact on GAAP results for the guidance period. Operating EBITDA is defined as earnings (i.e.,” Income from continuing operations before income taxes”) before interest, depreciation, amortization and foreign exchange gains (losses), excluding significant items. Pro forma Operating EBITDA is defined as pro forma earnings (i.e., pro forma “Income from continuing operations before income taxes”) before interest, depreciation, amortization and foreign exchange gains (losses), excluding the impact of adjusted significant items. Adjusted EPS is defined as “Earnings per common share from continuing operations – diluted” excluding the after-tax impact of significant items and the after-tax impact of amortization expense associated with DuPont’s intangible assets. Pro forma Adjusted EPS is defined as “Pro forma earnings per common share from continuing operations – diluted” excluding the after-tax impact of pro forma significant items and the after-tax impact of pro forma amortization expense associated with DuPont’s intangible assets. Full year and prior year information is on a pro forma basis and was determined in accordance with Article 11 of Regulation S-X. Cautionary Statement about Forward-Looking Statements This communication contains “forward-looking statements” within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In this context, forward-looking statements often address expected future business and financial performance and financial condition, and often contain words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “see,” “will,” “would,” “target,” and similar expressions and variations or negatives of these words. On December 11, 2015, The Dow Chemical Company (“Dow”) and E. I. du Pont de Nemours and Company (“DuPont”) entered into an Agreement and Plan of Merger, as amended on March 31, 2017, (the “Merger Agreement”) under which the companies would combine in an all-stock merger of equals transaction (the “Merger”). Effective August 31, 2017, the Merger was completed and each of Dow and DuPont became subsidiaries of DowDuPont (Dow and DuPont, and their respective subsidiaries, collectively referred to as the "Subsidiaries"). Forward-looking statements by their nature address matters that are, to varying degrees, uncertain, including the intended separation, subject to approval of the Company’s Board of Directors, and customary closing conditions, of DowDuPont’s agriculture, materials science and specialty products businesses in one or more tax-efficient transactions on anticipated terms (the “Intended Business Separations”). Forward-looking statements are not guarantees of future performance and are based on certain assumptions and expectations of future events which may not be 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 DowDuPont’s, Dow’s or DuPont’s actual results to differ materially from those projected in any such forward-looking statements include, but are not limited to: (i) costs to achieve and achieving the successful integration of the respective agriculture, materials science and specialty products businesses of Dow and DuPont, anticipated tax treatment, unforeseen liabilities, future capital expenditures, revenues, expenses, earnings, productivity actions, economic performance, indebtedness, financial condition, losses, future prospects, business and management strategies for the management, expansion and growth of the combined operations; (ii) costs to achieve and achievement of the anticipated synergies by the combined agriculture, materials science and specialty products businesses; (iii) risks associated with the Intended Business Separations, including conditions which could delay, prevent or otherwise adversely affect the proposed transactions, including possible issues or delays in obtaining required regulatory approvals or clearances related to the Intended ©2018 DowDuPont. All rights reserved. 13
Safe Harbor Statement, continued Forward-Looking Statements, continued Business Separations, associated costs, disruptions in the financial markets or other potential barriers; (iv) disruptions or business uncertainty, including from the Intended Business Separations, could adversely impact DowDuPont’s business (either directly or as conducted by and through Dow or DuPont), or financial performance and its ability to retain and hire key personnel; (v) uncertainty as to the long-term value of DowDuPont common stock; and (vi) risks to DowDuPont’s, Dow’s and DuPont’s business, operations and results of operations from: the availability of and fluctuations in the cost of feedstocks and energy; balance of supply and demand and the impact of balance on prices; failure to develop and market new products and optimally manage product life cycles; ability, cost and impact on business operations, including the supply chain, of responding to changes in market acceptance, rules, regulations and policies and failure to respond to such changes; outcome of significant litigation, environmental matters and other commitments and contingencies; failure to appropriately manage process safety and product stewardship issues; global economic and capital market conditions, including the continued availability of capital and financing, as well as inflation, interest and currency exchange rates; changes in political conditions, including trade disputes and retaliatory actions; business or supply disruptions; security threats, such as acts of sabotage, terrorism or war, natural disasters and weather events and patterns which could result in a significant operational event for the Company, adversely impact demand or production; ability to discover, develop and protect new technologies and to protect and enforce the Company’s intellectual property rights; failure to effectively manage acquisitions, divestitures, alliances, joint ventures and other portfolio changes; 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 are and will be more fully discussed in the current, quarterly and annual reports filed with the U. S. Securities and Exchange Commission by DowDuPont. While the list of factors presented here is, 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 DowDuPont’s, Dow’s or DuPont’s consolidated financial condition, results of operations, credit rating or liquidity. None of DowDuPont, Dow or DuPont assumes any obligation to publicly provide revisions or updates to any forward-looking statements whether as a result of new information, future developments or otherwise, should circumstances change, except as otherwise required by securities and other applicable laws. A detailed discussion of some of the significant risks and uncertainties which may cause results and events to differ materially from such forward-looking statements is included in the section titled “Risk Factors” (Part I, Item 1A) of DowDuPont’s 2017 annual report on Form 10-K. The Dow Diamond, DuPont Oval logo, DuPont™, the DowDuPont logo and all products, unless otherwise noted, denoted with ™, ℠ or ® are trademarks, service marks or registered trademarks of The Dow Chemical Company, E. I. du Pont de Nemours and Company, DowDuPont Inc. or their affiliates. In order to provide the most meaningful comparison of results of operations and results by segment, supplemental unaudited pro forma financial information has been included in the following financial schedules. The unaudited pro forma financial information is based on the historical consolidated financial statements and accompanying notes of both Dow and DuPont and has been prepared to illustrate the effects of the Merger, assuming the Merger had been consummated on January 1, 2016. The results for the three months ended March 31, 2018, are presented on a U.S. GAAP basis. For all other periods presented, adjustments have been made for (1) the preliminary purchase accounting impact, (2) accounting policy alignment, (3) eliminate the effect of events that are directly attributable to the Merger Agreement (e.g., one-time transaction costs), (4) eliminate the impact of transactions between Dow and DuPont, and (5) eliminate the effect of consummated divestitures agreed to with certain regulatory agencies as a condition of approval for the Merger. The unaudited pro forma financial information was based on and should be read in conjunction with the separate historical financial statements and accompanying notes contained in each of the Dow and DuPont Quarterly Reports on Form 10-Q and Annual Reports on Form 10-K for the applicable periods. The pro forma financial statements were prepared in accordance with Article 11 of Regulation S-X. The unaudited pro forma financial information has been presented for informational purposes only and is not necessarily indicative of what DowDuPont's results of operations actually would have been had the Merger been completed as of January 1, 2016, nor is it indicative of the future operating results of DowDuPont. The unaudited pro forma financial information does not reflect any cost or growth synergies that DowDuPont may achieve as a result of the Merger, future costs to combine the operations of Dow and DuPont or the costs necessary to achieve any cost or growth synergies. Discussion of revenue, operating EBITDA and price/volume metrics on a divisional basis for Agriculture is based on the results of the Agriculture segment; for Materials Science is based on the combined results of the Performance Materials & Coatings, Industrial Intermediates & Infrastructure, and Packaging & Specialty Plastics segments; and for Specialty Products is based on the combined results of the Electronics & Imaging, Nutrition & Biosciences, Transportation & Advanced Polymers, and Safety & Construction segments. The divisional discussions are for informational purposes only and do not purport to be indicative of results, including on a pro forma basis, for each of Agriculture, Materials Science and Specialty Products on a standalone basis as if the Intended Business Separations had already occurred. Furthermore, the divisional discussions should not be construed as representative of future results of operations or financial condition for each of Agriculture, Materials Science and Specialty Products on a standalone basis in connection with the Intended Business Separations. ©2018 DowDuPont. All rights reserved. 14