DuPont de Nemours, Inc.

Please stand by. We're about to begin. Good day and welcome to Dow DuPont's fourth quarter 2018 earnings call. You may signal to ask a question by pressing star 1 at any time during today's presentation. Also, today's call is being recorded. I would now like to turn the call over to Jen Driscoll, VP of Investor Relations. Please go ahead, ma'am.

Thank you, Rochelle. Good morning, everyone. Thank you for joining us for Dow DuPont's fourth quarter 2018 earnings conference call. We're making this call available to investors and media via webcast. We've prepared slides to supplement our comments during this conference call. These slides are posted on the Investor Relations section of Dow DuPont's website and through the link to our webcast. Speaking on the call today are Ed Breen, Chief Executive Officer, Howard Ungerleiter, Chief Financial Officer, Jim Fitterling, Jim Collins, and Mark Doyle, who are Chief Operating Officers for Dow DuPont's Material Science, Agriculture, and Specialty Divisions, respectively, and Laurie Koch and Neil Chure, who will lead IR for the new DuPont and new Dow, respectively. Please read the forward-looking statement disclaimer contained in the news release and slides. During our call, we'll make forward-looking statements regarding our expectations or predictions about the future. Because these statements are based on current assumptions and factors that involve risks and uncertainties, our actual performance and results may differ materially from our forward-looking statements. Our Form 10 in each of Dow's and DuPont's Form 10 case, as well as Dow's and Corteva's Form 10s, and Dow DuPont's prospective supplement, filed on November 16th of 2018, include detailed discussion of principal risks and uncertainties which may cause such differences. Also, we'll comment on segment results on a divisional basis, so please take note of the divisional disclaimer in our earnings release and slides. Unless otherwise specified, all historical financial measures presented today for the full year 2018 are on a pro forma basis. and all financials, where applicable, exclude significant items. We'll also refer to non-GAAP measures. The reconciliation to the most directly comparable GAAP financial measure and other associated disclosures are contained in our earnings release and on our website. With that, I'll turn the call over to Ed.

Thanks, Jen, and thanks, everyone, for joining us. Today we reported fourth quarter and full year results for 2018, and as we'll discuss on this call, it was a good year on all counts. as we delivered innovative solutions to customers, exceeded our cost synergy target, and at the same time prepared stand-up three industry-leading world-class companies. In terms of our overarching performance for the full year, we grew adjusted EPS 21% on a pro forma basis to $4.11. We delivered a net sales increase of 8%, with price improvement in all regions and volume growth in most regions. We also increased operating EBITDA 13%. In two months, we plan to separate the new Dow, followed shortly thereafter by the separation of Corteva from new DuPont. We made significant progress this year towards these important milestones, and I'd like to thank the teams for all their hard work to make this happen. Now let me recap the high points of the year we concluded. First, we delivered on the earnings objective we set for ourselves, strengthened by well-executed capacity additions and many new product launches, leading to overall local price improvement for each of the divisions and volume growth across the majority of our segments. Second, we upped our cost synergy target to $3.6 billion, 20% higher than our initial target, and we have delivered more than $1.8 billion in savings since merger close. Third, after completing our initial 4 billion share buyback program, we announced a new 3 billion share repurchase authorization and completed 1.4 billion of that in the fourth quarter. We have returned nearly 10 billion to shareholders since the merger closed and intend to complete another 1.6 billion share repurchase by the end of the quarter. And finally, we announced the future boards, including many new directors. Across each board, our directors bring strong and highly relevant experience, insights, and key expertise to help our companies launch, grow, and deliver for all stakeholders. We also announced the three CEOs. Each one is a talented leader with deep knowledge of their industry, has a track record of delivering value, and is highly focused on increasing shareholder returns. They also have great teams supporting them, successful, dedicated operators who know their respective businesses and markets extremely well. As a result of the process we have been through in creating them, we are confident that each company will be well positioned in its markets with appropriate capital structures and plans to invest capital in R&D in ways that will drive significant shareholder value creation now and into the future. I couldn't be more excited about where each one is headed. Howard will go over our fourth quarter results in more detail, so I'll point out a couple of things that we're keeping an eye on. We saw some short-term softening in the fourth quarter, including a steady drop in the price of oil and destocking in a few of our value chains that went beyond normal seasonality. Even in this environment, we were able to offset the headwinds to deliver flat sales year over year, which included 1% volume growth. We also delivered year-over-year adjusted EPS growth because of unique levers in our control, such as cost synergies, new capacity additions, and product innovations. We believe our market share held up well, our execution was good, and our new products are resonating with customers. As we look at 2019, we are confident that the global economy will grow. However, there is more uncertainty than usual over the precise rate of growth we expect. We anticipate China to continue to grow this year, albeit at a slower pace, along with slowing activity in Europe. We expect modest growth in most other regions. Let me provide some context to our expectations, starting with material science. We have consistently been forecasting a period of margin compression in both the polyurethanes and polyethylene chains due to capacity additions across the industry. These dynamics have turned out largely as we expected, and Jim Fitterling will go into more detail about the trends we saw in the fourth quarter and the start to the year. For specialty products, we see benefits in 2019 from global economic growth and from our highly differentiated market positions, as Mark Doyle will explain. And in agriculture, we expect to realize first-half benefits from cost synergies and new products. offset by currency, and higher unit costs, as Jim Collins will outline. With that, let me turn it over to Howard.