What changed in this filing

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Item 7. Management’s Discussion and Analysis

2022-02-11 compared with 2021-02-12 · 348 added, 453 removed, 421 unchanged (66% of the section changed)

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• Environmental Matters

As of December 31, 2020, the Company has $ 6 billion of working capital and over $2.5 billion in cash and cash equivalents.

As of December 31, 2021, the Company has $3.8 billion of net working capital and over $2 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 continued operations.

In response to the uncertainty surrounding the extent and duration of the COVID-19 pandemic, the Company has also taken additional measures throughout the year to further ensure its liquidity and capital resources.

The Company continually assesses its liquidity position, including possible sources of incremental liquidity, in light of the current economic environment, capital market conditions and Company performance.

On February 1, 2021, DuPont completed the separation and distribution of the Nutrition & Biosciences business (the “N&B Business”), and merger of Nutrition & Biosciences, Inc.

(“N&B”), a DuPont subsidiary formed to hold the N&B Business, with a subsidiary of IFF.

The distribution was effected through an exchange offer (the “Exchange Offer”) where, on the terms and subject to the conditions of the Exchange Offer, eligible participating DuPont stockholders had the option to tender all, some or none of their shares of common stock, par value $0.01 per share, of DuPont (the “DuPont Common Stock”) for a number of shares of common stock, par value $0.01 per share, of N&B (the “N&B Common Stock”) and which resulted in all shares of N&B Common Stock being distributed to DuPont stockholders that participated in the Exchange Offer.

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”).

In connection with the N&B Transaction, N&B made a one-time cash payment of approximately $7.3 billion (the “Special Cash Payment”) to DuPont.

The company used a portion of the proceeds to retire its $3 billion term loan facilities on February 1, 2021 and will use the proceeds to fund the redemption, in accordance with their terms, of the $2 billion May 2020 Notes issuance.

See discussion below and within “Liquidity and Capital Resources” for more information.

Effective August 31, 2017, pursuant to the merger of equals transactions contemplated by the Agreement and Plan of Merger, dated as of December 11, 2015, as amended on March 31, 2017 ("DWDP Merger Agreement"), The Dow Chemical Company ("TDCC") and E.

DWDP Merger & Distributions

Effective August 31, 2017, the Dow Chemical Company ("TDCC") and E.

du Pont de Nemours and Company ("EID") each merged with subsidiaries of DowDuPont Inc.

("DowDuPont") and, as a result, TDCC and EID became subsidiaries of DowDuPont (the "DWDP Merger").

Prior to the DWDP Merger, DowDuPont did not conduct any business activities other than those required for its formation and matters contemplated by the DWDP Merger Agreement.

TDCC was determined to be the accounting acquirer in the DWDP Merger.

Except as otherwise indicated by the context, the term "TDCC" includes TDCC and its consolidated subsidiaries and "EID" includes EID and its consolidated subsidiaries.

DowDuPont completed a series of internal reorganizations and realignment steps in order to separate into three, independent, publicly traded companies - one for each of its agriculture, materials science and specialty products businesses.

DowDuPont formed two wholly owned subsidiaries:

("Dow," formerly known as Dow Holdings Inc.), to serve as a holding company for its materials science business, and Corteva, Inc.

("Corteva"), to serve as a holding company for its agriculture business.

DWDP Distributions

On April 1, 2019, the Company completed the separation of the materials science business through the spin-off of Dow Inc., including Dow’s subsidiary TDCC (the “Dow Distribution”).

On June 1, 2019, the Company completed the separation of the agriculture business through the spin-off of Corteva including Corteva’s subsidiary EID, (the “Corteva Distribution and together with the Dow Distribution, the “DWDP Distributions”).

On April 1, 2019, the Company completed the separation of the materials science business through the spin-off of Dow Inc., (“Dow”) including Dow’s subsidiary TDCC (the “Dow Distribution”).

On June 1, 2019, the Company completed the separation of the agriculture business through the spin-off of Corteva, Inc.

(“Corteva”) including Corteva’s subsidiary EID, (the “Corteva Distribution and together with the Dow Distribution, the “DWDP Distributions”).

Following the Corteva Distribution, the Company holds the specialty products business.

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Beginning on June 3, 2019, the Company's common stock is traded on the NYSE under the ticker symbol “DD.”

The results of operations of DuPont for the 2019 and 2018 periods presented reflect the historical financial results of Dow and Corteva as discontinued operations, as applicable.

The results of operations of DuPont for the 2019 period presented reflects the historical financial results of Dow and Corteva as discontinued operations, as applicable.

The cash flows and comprehensive income related to Dow and Corteva have not been segregated and are included in the Consolidated Statements of Cash Flows and Consolidated Statements of Comprehensive Income, respectively, for the applicable period.

Unless otherwise indicated, the information in the notes to the Consolidated Financial Statements refer only to DuPont's continuing operations and do not include discussion of balances or activity of Dow or Corteva.

The statements of operations and pro forma statements of operations included in this report and as discussed below include costs previously allocated to the materials science and agriculture businesses that did not meet the definition of expenses related to discontinued operations in accordance with Financial Accounting Standards Codification 205, "Presentation of Financial Statements" ("ASC 205") and thus are reflected in the Company's results of continuing operations.

A significant portion of these costs relate to TDCC and consist of leveraged services provided through service centers, as well as other corporate overhead costs related to information technology, finance, manufacturing, research & development, sales & marketing, supply chain, human resources, sourcing & logistics, legal and communications, public affairs & government affairs functions.

These costs are no longer incurred by the Company following the DWDP Distributions.

N&B Transaction

On December 31, 2020, DuPont commenced the Exchange Offer which expired at one minute past 11:59 PM ET on January 29, 2021.

Pursuant to the Exchange Offer, on February 1, 2021, DuPont accepted approximately 197.4 million shares of DuPont Common Stock in exchange for about 141.7 million shares of N&B Common Stock.

The closing of the N&B Merger followed on February 1, 2021 after satisfaction of certain other conditions, including the receipt of the Special Cash Payment.

In the N&B Merger, each share of N&B common stock was automatically converted into the right to receive one share of IFF common stock, par value $0.125 per share (“IFF Common Stock”).

See Note 25 to the Consolidated Financial Statements for more information.

At December 31, 2020, the financial results of the N&B Business are included in continuing operations for all periods presented.

On February 1, 2021, the Company completed the divestiture of the Nutrition & Biosciences (“N&B”) business to International Flavors & Fragrance Inc.

(“IFF”) in a Reverse Morris Trust transaction (the “N&B Transaction”) that resulted in IFF issuing shares to DuPont stockholders.

In connection with the N&B Transaction, N&B made a one-time cash payment of approximately $7.3 billion (the “Special Cash Payment”) to DuPont.

The results of operations of DuPont for all periods presented reflect 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 Consolidated Statements of Cash Flows and Consolidated Statements of Comprehensive Income, respectively, for the applicable period.

2021 Segment Realignment

DuPont’s worldwide operations are managed through global businesses, which are currently reported in five reportable segments:

Electronics & Imaging;

Nutrition & Biosciences;

Transportation & Industrial;

Safety & Construction;

and Non-Core.

In conjunction with the closing of the N&B Transaction on February 1, 2020, the Company announced changes to its reportable segments (the “2021 Segment Realignment”).

These changes result in the following:

• Realignment of certain businesses from Transportation & Industrial to Electronics & Imaging

• Dissolution of the Non-Core segment with the businesses to be divested and previously divested reflected in Corporate

• Realignment of the remaining Non-Core businesses to Transportation & Industrial

In addition, the following name changes will occur:

• Electronic & Imaging will be renamed Electronics & Industrial

• Transportation & Industrial will be renamed Mobility & Materials

• Safety & Construction will be renamed Water & Protection

The changes became effective February 1, 2021 and the Company will report financial results under this new structure beginning in the first quarter of 2021.

The results included in Management’s Discussion and Analysis of Financial Condition and Results of Operations are not reflective of the 2021 Segment Realignment.

Effective February 1, 2021, in conjunction with the closing of the N&B Transaction, the Company changed its management and reporting structure (the “2021 Segment Realignment”).

DuPont’s worldwide operations are managed through global businesses, which are currently reported in three reportable segments:

Electronics & Industrial;

Water & Protection;

and Mobility & Materials.

The changes became effective February 1, 2021 and have been retrospectively reflected in the segment results for all periods presented.

ANALYSIS OF OPERATIONS

The novel coronavirus (“COVID-19”) pandemic has resulted in significant economic disruption and continues to adversely impact the broader global economy, including certain of the Company’s customers and suppliers.

The ultimate extent of the effects of the COVID-19 pandemic on the Company is highly uncertain and will depend on future developments and the effects could exist for an extended period of time even after the pandemic subsides.

During 2020, the Company benefited from strong demand in certain key end-markets, principally electronics, water filtration, health & wellness and personal protection.

Although results reflect notable improvement in automotive markets, along with residential construction, in the second half of 2020 compared to the first half of 2020, the COVID-19 pandemic adversely impacted demand in aerospace, commercial construction, oil & gas, and select industrial end-markets.

In response to this uncertainty, the Company delayed certain capital investments in select sectors throughout the year.

Nutrition & Biosciences Financing

In the third quarter of 2020, N&B completed an offering of $6.25 billion of senior unsecured notes (the “N&B Notes Offering”).

The net proceeds of approximately $6.2 billion from the N&B Notes Offering were deposited into an escrow account and at December 31, 2020 are reflected as restricted cash in the Company’s consolidated financial statements.

In the first quarter of 2020, N&B entered into a senior unsecured term loan agreement in the amount of $1.25 billion split evenly between three- and five-year facilities.

See Note 14 of the Consolidated Financial Statements for additional information.

COVID-19 Update

The novel coronavirus (“COVID-19”) and its variants continue to adversely impact the broader global economy, including certain of the Company’s customers and suppliers.

During 2021, the Company benefited from strong demand in certain key end-markets, principally in electronics, water filtration and continued recovery within the automotive markets and commercial construction.

Although results reflect notable improvement, the COVID-19 pandemic has caused widespread supply chain challenges due to labor, raw material and component shortages.

In addition, logistic challenges have increased significantly in the second half of 2021.

Intended Rogers Acquisition

On November 2, 2021, the Company announced that it had entered into a definitive agreement to acquire all the outstanding shares of Rogers Corporation (“Rogers”) for about $5.2 billion (the “Intended Rogers Acquisition”).

The acquisition is expected to close by the end of the second quarter of 2022, pending receipt of regulatory approvals and satisfaction of customary closing conditions.

When complete, the acquisition of Rogers, is expected to broaden the Company’s presence in the electronic materials market.

Rogers is complementary to and aligned strategically with the Company’s existing Electronics & Industrial segment.

The completion of the acquisition is subject to regulatory approvals and other customary closing conditions.

Mobility & Materials Segment Intended Divestiture

On November 2, 2021 the Company announced that it has initiated a divestiture process related to a substantial portion of the Mobility & Materials segment, which predominantly includes the Engineering Polymers and Performance Resins lines of business (the “In-Scope M&M Businesses”).

The outcome of which, including the entry into a definitive agreement, is subject to the approval of the DuPont Board of Directors.

The scope of the intended divestiture excludes certain product lines including Auto Adhesives and Multibase TM .

The divestiture of the In-Scope M&M Businesses may include a full or partial separation of the businesses from the Company.

The Mobility & Materials segment will remain in its current management and reporting structure while these strategic alternatives are considered.

Laird Performance Materials

On July 1, 2021, DuPont completed the acquisition of Laird Performance Materials ("Laird PM") from Advent International (“Laird PM Acquisition”) for cash consideration of $2.404 billion, which reflects adjustments, primarily for acquired cash and net working capital.

See Note 3 to the Consolidated Financial Statements for additional information.

On December 31, 2021, the Company completed the sale of its Clean Technologies business unit, which is part of Corporate.

Total consideration related to the sale of the business is approximately $510 million, with cash proceeds of about $500 million reflecting adjustments for customary closing costs as defined within the purchase agreement.

For the year ended December 31, 2021, a pre-tax loss of $3 million ($39 million loss net of tax, primarily driven by nondeductible goodwill) on the disposition was recorded in "Sundry income (expense) - net" in the Company's Consolidated Statements of Operations.

In the second quarter of 2021, the Company completed the sale of its Solamet® business unit, which was part of Corporate.

Total consideration received related to the sale of the business was approximately $190 million.

The sale resulted in a pre-tax gain of $140 million ($105 million net of tax) which was recorded in "Sundry income (expense) - net" in the Company's Consolidated Statements of Operations.

In the fourth quarter of 2020, the Company entered into a definitive agreement to sell its Biomaterials business unit, which includes the Company's equity method investment in DuPont Tate & Lyle Bio Products.

In January 2021, the Company entered into separate definitive agreements to sell its Clean Technologies and Solamet® businesses.

These divestitures, subject to regulatory approval and customary closing conditions, are expected to close in the first half of 2021.

The sale of the Biomaterials business unit is subject to customary closing conditions and is expected to close by mid-year 2022.

In the third quarter of 2020, the Company completed the sale of its trichlorosilane business (“TCS Business”) along with its equity ownership interest in DC HSC Holdings LLC and Hemlock Semiconductor L.L.C.

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The TCS/HSC Disposal resulted in a net pre-tax benefit of $396 million ($236 million net of tax) which was recorded in “Sundry income (expense) – net” in the Company’s Consolidated Statements of Operations.

In the first quarter of 2020, the Company completed the sale of its Compound Semiconductor Solutions business unit, a part of the Electronics & Imaging segment, to SK Siltron, for approximately $420 million.

In the first quarter of 2020, the Company completed the sale of its Compound Semiconductor Solutions business unit, a part of the Electronics & Industrial segment, to SK Siltron, for approximately $420 million.

The sale resulted in a pre-tax gain of $197 million ($102 million net of tax) recorded in "Sundry income (expense) - net" in the Company's Consolidated Statements of Operations.

In the third quarter of 2019, the Company completed the sale and separation of its Sustainable Solutions business unit, a part of the Non-Core segment, to Gyrus Capital.

The sale resulted in a pre-tax gain of $28 million ($22 million net of tax) which was recorded in "Sundry income (expense) - net" in the Company's Consolidated Statements of Operations.

See Note 4 of the Consolidated Financial Statements for additional information.

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The parties have agreed that, during the term of this sharing arrangement, Chemours will bear 50% of any qualified spend and the Company and Corteva shall together bear 50% of any qualified spend.

As of December 31, 2020, the Company has recorded a liability of $59 million in connection with the cost sharing arrangement related to future eligible PFAS costs.

On January 21, 2021, EID and Chemours entered into settlement agreements with plaintiffs’ counsel representing the Ohio MDL plaintiffs providing for a settlement of cases and claims in the Ohio MDL totaling $83 million in cash with each of the Company and EID contributing approximately $27 million and Chemours contributing approximately $29 million.

As of December 31, 2020, the Company has recorded an indemnification liability of $27 million related to the settlement.

Total pre-tax charges of $86 million ($66 million after-tax) related to both of the above matters are reflected as a loss from discontinued operations for the year ended December 31, 2020 in the Company's Consolidated Statements of Operations.

As of December 31, 2021, the Company has recorded an indemnification liability of $126 million in connection with the cost sharing arrangement related to future eligible PFAS costs.

Total pre-tax charges of $98 million ($76 million after-tax) and $86 million ($66 million after-tax) related to the MOU are reflected as a loss from discontinued operations for the year ended December 31, 2021 and 2020, respectively, in the Company's Consolidated Statements of Operations.

See Note 16 of the Consolidated Financial Statements for additional information.

Goodwill, Long-Lived Asset and Indefinite-Lived Asset Impairments

During the third quarter of 2020, multiple triggering events occurred requiring the Company to perform impairment analyses associated with its Non-Core segment.

As a result of the analyses performed, the Company recorded aggregate pre-tax, non-cash goodwill impairment charges of $183 million recognized in "Goodwill impairment charges" and aggregate pre-tax, non-cash asset impairment charges of $370 million recognized in “Restructuring and asset related charges - net” in the Consolidated Statements of Operations.

During the second quarter of 2020, continued near-term demand weakness in global automotive production resulting from the COVID-19 pandemic, along with revised views of recovery based on third party market information, served as a triggering event requiring the Company to perform an impairment analysis of the goodwill associated with its Transportation & Industrial reporting unit.

During the third quarter of 2020, multiple triggering events occurred requiring the Company to perform impairment analyses associated with its Mobility & Materials segment and corporate businesses.

As a result of the analyses performed, the Company recorded aggregate pre-tax, non-cash goodwill impairment charges of $183 million recognized in "Goodwill impairment charges" within its corporate businesses and aggregate pre-tax, non-cash asset impairment charges of $318 million within its Mobility & Materials segment and $52 million within corporate businesses both recognized in “Restructuring and asset related charges - net” in the Consolidated Statements of Operations.

During the second quarter of 2020, demand weakness in global automotive production resulting from the COVID-19 pandemic, along with revised views of recovery, served as a triggering event requiring the Company to perform an impairment analysis of the goodwill associated with its Mobility & Materials and Industrial Solutions reporting units.

As a result of the analysis performed, the Company recorded pre-tax, non-cash goodwill impairment charges of $2,498 million recognized in "Goodwill impairment charges" in the Consolidated Statements of Operations.

In connection with the Transportation & Industrial impairment analysis, the Company also recorded pre-tax, non-cash impairment charges of $21 million related to indefinite-lived intangible assets recognized in “Restructuring and asset related charges - net” in the Consolidated Statements of Operations.

During the first quarter of 2020, the Company was required to perform interim impairment tests of its goodwill and long-lived assets as expectations of proceeds related to certain potential divestitures within the Non-Core segment gave rise to fair value indicators and, thus, served as triggering events.

In connection with the Mobility & Materials impairment analysis, the Company also recorded pre-tax, non-cash impairment charges of $21 million related to indefinite-lived intangible assets recognized in “Restructuring and asset related charges - net” in the Consolidated Statements of Operations.

During the first quarter of 2020, the Company was required to perform interim impairment tests of its goodwill and long-lived assets as expectations of proceeds related to certain potential divestitures related to the businesses held in Corporate gave rise to fair value indicators and, thus, served as triggering events.

As a result of the analysis performed, the Company recorded pre-tax, non-cash impairment charges related to goodwill of $533 million.

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The charges were recognized in “Restructuring and asset related charges - net” in the Consolidated Statements of Operations.

During the second quarter of 2019, the Company was required to perform interim impairment tests of its goodwill due to the internal distribution of the specialty products legal entities from EID to DowDuPont (the "Internal SP Distribution") and the Second Quarter Segment Realignment.

As a result of the analyses performed, the Company recorded pre-tax, non-cash impairment charges during the year ended December 31, 2019, totaling $1,175 million, of which $933 million related to the Nutrition & Biosciences segment and $242 million related to the Non-Core segment.

As a result of the analyses performed, the Company recorded pre-tax, non-cash impairment charges during the year ended December 31, 2019 of $242 million impacting Corporate.

The charges were recognized in "Goodwill impairment charges" in the Consolidated Statements of Operations.

See Notes 5 and 13 of the Consolidated Financial Statements.

Equity Method Investment Impairment

During the second quarter of 2019, in connection with the Internal SP Distribution and the impairment of the Industrial Biosciences reporting unit, the Company performed an impairment analysis on the reporting unit's equity method investments.

As a result of the analysis performed, the Company recorded pre-tax, non-cash impairment charges of $63 million to write-down the value of an equity method investment.

The charge was recognized in "Restructuring and asset related charges - net" in the Consolidated Statements of Operations.

See Note 5 of the Consolidated Financial Statements.

On February 12, 2020, the Board of Directors declared a first quarter dividend of $0.30 per share, paid on March 16, 2020, to shareholders of record on February 28, 2020.

On April 29, 2020, the Company announced that its Board of Directors declared a second quarter dividend of $0.30 per share, paid on June 15, 2020, to shareholders of record on May 29, 2020.

On June 25, 2020, the Company announced that its Board of Directors declared a third quarter dividend of $0.30 per share, paid on September 15, 2020, to shareholders of record on July 31, 2020.

On October 14, 2020, the Company announced that its Board of Directors declared a fourth quarter dividend of $0.30 per share, paid on December 15, 2020, to shareholders of record on November 30, 2020.

See Notes 6 and 14 of the Consolidated Financial Statements for additional information.

On February 18, 2021, the Board of Directors declared a first quarter dividend of $0.30 per share, paid on March 15, 2021, to shareholders of record on March 1, 2021.

On April 28, 2021, the Board of Directors declared a second quarter dividend of $0.30 per share, paid on June 15, 2021, to shareholders of record on May 28, 2021.

On June 17, 2021, the Board of Directors declared a third quarter dividend of $0.30 per share, paid on September 15, 2021, to shareholders of record on July 30, 2021.

On October 14, 2021, the Board of Directors declared a fourth quarter dividend of $0.30 per share, paid on December 15, 2021, to shareholders of record on November 30, 2021.

The DuPont Board of Directors on February 7, 2022, declared a first quarter 2022 dividend of $0.33 per share, a ten percent per share increase versus the first quarter 2021 dividend, payable on March 15, 2022, to holders of record at the close of business on February 28, 2022.

Share Buyback Program

On June 1, 2019, the Company's Board of Directors approved a $2 billion share buyback program, which expires on June 1, 2021.

During the year ended December 31, 2020, the Company repurchased and retired 6.1 million shares for $232 million.

As of the year ended December 31, 2020, the Company had repurchased and retired 16.9 million shares under this program at a total cost of $982 million.

In the first quarter of 2021, the Company's Board of Directors authorized a $1.5 billion share buyback program, which expires on June 30, 2022 (the "2021 Share Buyback Program").

As of December 31, 2021, the Company had repurchased and retired a total of 14.5 million shares for $1.1 billion under the 2021 Share Buyback Program.

On June 1, 2019, the Company's Board of Directors approved a $2 billion share buyback program, which expired on June 1, 2021.

At the expiry of the 2019 Share Buyback Program, the Company had repurchased and retired a total of 29.9 million shares at a cost of $2 billion.

In February 2022, the Company's Board of Directors authorized an additional $1.0 billion share buyback program which expires on March 31, 2023, (the “2022 Share Buyback Program”).This authorization enables the Company to repurchase shares following the expected completion of the remaining authorization under its 2021 Share Buyback Program.

Restructuring Programs

2021 Restructuring Actions

In October 2021, the Company approved targeted restructuring actions to capture near term cost reductions (the "2021 Restructuring Actions").

For the year ended December 31, 2021, DuPont recorded a pre-tax charge related to the 2021 Restructuring Actions in the amount of $46 million, recognized in "Restructuring and asset related charges - net" in the Company's Consolidated Statements of Operations, comprised of $26 million of severance and related benefit costs and $20 million of asset related charges.

At December 31, 2021, total liabilities related to the 2021 Restructuring Actions were $25 million for severance and related benefits.

The Company expects actions related to this program to be substantially complete by the first half of 2022.

2020 Restructuring Program

During the first quarter of 2020, the Company approved restructuring actions designed to capture near-term cost reductions and to further simplify certain organizational structures in anticipation of the N&B Transaction (the "2020 Restructuring Program").

For the year ended December 31, 2020, the Company recorded a pre-tax charge related to the 2020 Restructuring Program of $179 million, recognized in "Restructuring and asset related charges - net" in the Company's Consolidated Statements of Operations.

The Company recorded pre-tax restructuring charges of $180 million inception-to-date, consisting of severance and related benefit costs of $128 million and asset related charges of $52 million, recognized in "Restructuring and asset related charges - net" in the Company's Consolidated Statements of Operations.

At December 31, 2021, total liabilities related to the program were $15 million, which represents expected future cash payments related to this program for the payment of severance and related benefits.

The 2020 Restructuring Program was considered substantially complete at December 31, 2020.

The 2020 Restructuring Program is considered substantially complete.

2019 Restructuring Program

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At December 31, 2021, total liabilities related to the program were $2 million, which represents expected future cash payments related to this program for the payment of severance and related benefits.

The 2019 Restructuring Program was considered substantially complete at June 30, 2020.

DowDuPont Cost Synergy Program

In September and November 2017, the Company approved post-merger restructuring actions under the DowDuPont Cost Synergy Program (the “Synergy Program”), adopted by the DowDuPont Board of Directors.

The Synergy Program was designed to integrate and optimize the organization following the DWDP Merger and in preparation for the DWDP Distributions.

The Company recorded pre-tax restructuring charges of $492 million inception-to-date, consisting of severance and related benefit costs of $213 million, asset related charges of $212 million and contract termination charges of $67 million.

The DowDuPont Cost Synergy program the program was considered substantially complete at June 30, 2020.

The 2019 Restructuring Program is considered substantially complete.

RESULTS OF OPERATIONS

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Portfolio & Other Total

Electronics & Imaging (1) % — % 8 % — % 7 % — % (1) % (1) % — % (2) %

Nutrition & Biosciences 1 (1) — — — 1 (2) — (1) (2)

Transportation & Industrial

(4) — (11) — (15) 3 (2) (10) — (9)

Safety & Construction 2 — (8) 2 (4) 3 (1) — (4) (2)

Non-Core 3 — (14) (11) (22) 1 (2) (11) (3) (15)

Electronics & Industrial — % 1 % 12 % 6 % 19 % (1) % — % 6 % — % 5 %

Water & Protection 2 1 8 — 11 2 — (8) 2 (4)

Mobility & Materials 12 2 12 — 26 (4) — (11) — (15)

Corporate 3 1 4 (33) (25) 2 — (23) (18) (39)

Total 4 % 2 % 10 % — % 16 % (1) % — % (6) % — % (7) %

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2021 versus 2020

The Company reported net sales for the year ended December 31, 2020 of $20.4 billion, down 5 percent from $21.5 billion for the year ended December 31, 2019, due to a 4 percent decrease in volume and a 1 percent decline due to portfolio actions.

Local price and product mix and currency remained flat.

Volume declined across all geographic regions with the exception of Asia Pacific where it increased 2 percent.

Volume gains in Electronics & Imaging (up 8 percent) were more than offset by declines in Non-Core (down 14 percent), Transportation & Industrial (down 11 percent) and Safety & Construction (down 8 percent).

Portfolio and other changes contributed 1 percent of the sales decrease which impacted Non-Core (down 11 percent) offset by Safety & Construction (up 2 percent).

Currency was flat compared with the same period last year in all segments with the exception of Nutrition & Bioscience (down 1 percent).

Local price increased in Latin America (up 4 percent) and in Non-Core (up 3 percent) and Safety & Construction (up 2 percent).

The Company reported net sales for the year ended December 31, 2021 of $16.7 billion, up 16 percent from $14.3 billion for the year ended December 31, 2020, due to a 10 percent increase in volume, a 4 percent increase due to local price and product mix, and a 2 percent favorable currency impact.

Portfolio and other changes was flat.

Volume grew across all geographic regions and across all segments, most notably Electronics & Industrial and Mobility & Materials (both up 12 percent).

Local price and product mix increased across all regions and all segments with the exception of Electronics & Industrial where it was flat.

Currency was up 2 percent compared with the same period last year, driven primarily by EMEA (up 4 percent) and Asia Pacific (up 1 percent).

Portfolio and other changes were flat overall as the acquisition of Laird PM in Electronics & Industrial (up 6 percent) was offset by the decline within Corporate (down 33 percent) due to the sale of businesses.

2020 versus 2019

The Company reported net sales for the year ended December 31, 2019 of $21.5 billion, down 5 percent from $22.6 billion for the year ended December 31, 2018, due to a 4 percent decrease in volume, a 2 percent unfavorable currency impact and a 1 percent decline in portfolio actions slightly offset by a 2 percent increase in local price.

Volume declined across all geographic regions and all segments with the exception of Nutrition & Biosciences and Safety & Construction which were both flat.

The most notable volume decreases were in Non-Core (down 11 percent) and Transportation & Industrial (down 10 percent).

Currency was down 2 percent compared with last year, driven primarily by EMEA currencies (down 5 percent).

Local price was up 2 percent compared with last year.

Local price increased in all geographic regions and in all segments except Electronics & Imaging (flat).

Portfolio and other changes contributed 1 percent of the sales decrease which impacted Safety & Construction (down 4 percent;

within EMEA), Non-Core (down 3 percent) and Nutrition & Biosciences (down 1 percent).

The Company reported net sales for the year ended December 31, 2020 of $14.3 billion, down 7 percent from $15.4 billion for the year ended December 31, 2019, due to a 6 percent decrease in volume and a 1 percent decline due to local price and product mix.

Portfolio and other changes and currency were flat.

Volume declined across all geographic regions with the exception of Asia Pacific where it increased 3 percent.

Volume gains in Electronics & Industrial (up 6 percent) were more than offset by declines in Mobility & Materials (down 11 percent) and Water & Protection (down 8 percent).

Local price increased in Latin America (up 1 percent) and Water & Protection (up 2 percent).

Portfolio and other changes were flat overall.

The divestitures in Corporate (down 18 percent) were offset by Water & Protection (up 2 percent).

Currency was flat compared with the same period last year in all segments.

Cost of Sales

Cost of sales was $13.5 billion for the year ended December 31, 2020, down from $14.1 billion for the year ended December 31, 2019.

Cost of sales decreased for the year ended December 31, 2020 primarily due to lower sales volume, cost synergies, and the absence in 2020 of costs previously allocated to the materials science and agriculture businesses that did not meet the definition of expenses related to discontinued operations in accordance with ASC 205 and therefore remained as costs of continuing operations for periods prior to the DWDP Distributions, offset by approximately $245 million of charges associated with temporarily idling several manufacturing plants to align supply with demand due to COVID-19, driven primarily by the Transportation & Industrial segment.

Cost of sales was $10.8 billion for the year ended December 31, 2021, up from $9.5 billion for the year ended December 31, 2020.

Cost of sales increased for the year ended December 31, 2021 primarily due to increased sales volume, currency impacts, and higher raw materials and logistics costs.

The increase was partially offset by the absence of approximately $230 million of charges in the prior year associated with temporarily idling several manufacturing plants to align supply with demand due to COVID-19.

Cost of sales as a percentage of net sales for the year ended December 31, 2021 was 64.9 percent compared with 66.3 percent for the year ended December 31, 2020.

For the year ended December 31, 2020, cost of sales was $9.5 billion, down from $10.0 billion for the year ended December 31, 2019.

Cost of sales decreased for the year ended December 31, 2019 primarily due to lower sales volume, cost synergies, portfolio actions related to current year divestitures, currency impacts, and lower costs previously allocated to the materials science and agriculture businesses that did not meet the definition of expenses related to discontinued operations in accordance with ASC 205 and therefore remained as costs of continuing operations for periods prior to the DWDP Distributions.

Cost of sales decreased for the year ended December 31, 2020 primarily due to lower sales volume, cost synergies, and the absence in 2020 of costs previously allocated to the materials science and agriculture businesses that did not meet the definition of expenses related to discontinued operations in accordance with ASC 205 and therefore remained as costs of continuing operations for periods prior to the DWDP Distributions, offset by approximately $230 million of charges associated with temporarily idling several manufacturing plants to align supply with demand due to COVID-19, driven primarily by the Mobility & Materials segment.

Cost of sales as a percentage of net sales for the year ended December 31, 2020 was 66.3 percent compared with 65.0 percent for the year ended December 31, 2019.

Research and Development Expense ("R&D")

R&D expense was $860 million for the year ended December 31, 2020, $955 million for the year ended December 31, 2019, and $1,070 million for the year ended December 31, 2018.

R&D as a percentage of net sales was 4 percent for both the years ended December 31, 2020 and 2019, and 5 percent for the year December 31, 2018.

R&D expense was $618 million for the year ended December 31, 2021, down from $625 million for the year ended December 31, 2020, and $689 million for the year ended December 31, 2019.

R&D as a percentage of net sales was 4 percent for the years ended December 31, 2021, 2020, and 2019.

R&D expense in 2021 compared to 2020 was relatively consistent, the slight decline was primarily due to productivity actions.

The decrease in R&D costs in 2020 compared to 2019 was due to productivity actions as well as the absence of R&D costs previously allocated to the materials science and agriculture businesses that did not meet the definition of expenses related to discontinued operations in accordance with ASC 205 and therefore remained as a cost of continuing operations for periods prior to the DWDP Distributions.

The decrease in R&D costs in 2019 compared to 2018 was primarily due to lower R&D costs previously allocated to the materials science and agriculture businesses that did not meet the definition of expenses related to discontinued operations in accordance with ASC 205 and therefore remained as costs of continuing operations for periods prior to the DWDP Distributions.

Selling, General and Administrative Expenses ("SG&A")

For the year ended December 31, 2020, SG&A expenses totaled $2,235 million, down from $2,663 million in the year ended December 31, 2019 and $3,028 million for the year ended December 31, 2018.

For the year ended December 31, 2021, SG&A expenses totaled $1,855 million, up from $1,701 million in the year ended December 31, 2020 and down from $2,057 million for the year ended December 31, 2019.

SG&A as a percentage of net sales was 11 percent, 12 percent, and 13 percent for the years ended December 31, 2021, 2020, and 2019, respectively.

The decrease in SG&A costs in 2020 compared to 2019 was due to productivity actions, temporarily reducing costs due to COVID-19 restrictions, overall reducing spending, and the absence of SG&A costs previously allocated to the materials science and agriculture businesses that did not meet the definition of expenses related to discontinued operations in accordance with ASC 205 and therefore remained as costs of continuing operations for periods prior to the DWDP Distributions.

The decrease in SG&A costs in 2019 compared to 2018 was due to cost synergies and lower SG&A costs previously allocated to the materials science and agriculture businesses that did not meet the definition of expenses related to discontinued operations in accordance with ASC 205 and therefore remained as costs of continuing operations for periods prior to the DWDP Distributions.

The increase in SG&A costs in 2021 compared with 2020 was primarily due to incremental costs from higher personnel related expenses, currency fluctuations, and six months of consolidating Laird PM.

The decrease in SG&A costs in 2020 compared to 2019 was due to productivity actions, temporarily reducing costs due to COVID-19 restrictions, overall reduced spending, and the absence of SG&A costs previously allocated to the materials science and agriculture businesses that did not meet the definition of expenses related to discontinued operations in accordance with ASC 205 and therefore remained as costs of continuing operations for periods prior to the DWDP Distributions.

Amortization of Intangibles

Amortization of intangibles was $725 million, $696 million, and $701 million for the years ended December 31, 2021, 2020, and 2019, respectively.

The increase in amortization in 2020 compared with 2019 was primarily due to the amortization of the Nutrition and Biosciences tradename that was reclassified to definite-lived intangibles in the fourth quarter of 2019 in connection with the N&B Transaction.

Amortization in 2019 compared with 2018 was relatively flat.

The increase in amortization of intangibles in 2021 compared to 2020 was primarily due to the amortization of the intangible assets acquired in the Laird PM Acquisition, partially offset by lower amortization due to the sale of the trichlorosilane business ("TCS Business") in the third quarter of 2020, as well as the classification of the Biomaterials and Clean Technologies business units as held for sale in the third quarter of 2020.

Amortization expense in 2020 compared to 2019 was relatively flat.

See Note 14 to the Consolidated Financial Statements for additional information on intangible assets.

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Restructuring and asset related charges - net were $55 million, $845 million, and $152 million for the years ended December 31, 2021, 2020 and 2019, respectively.

The activity for the year ended December 31, 2020 included a $588 million impairment charge related to long-lived assets and a $52 million impairment charge related to indefinite-lived intangible assets in the Non-Core segment, a $21 million impairment charge related to indefinite-lived intangible assets in the Transportation & Industrial segment, a $179 million charge related to the 2020 Restructuring Program, a $2 million charge related to the 2019 Restructuring Program and a $7 million charge related to the DowDuPont Cost Synergy Program.

The charges for the year ended December 31, 2019 included a charge of $138 million related to the 2019 Restructuring Program, a $113 million charge related to the DowDuPont Cost Synergy Program, and a $63 million impairment charge related to an equity method investment.

The charges for the year ended December 31, 2018 related to the Synergy Program.

The activity for the year ended December 31, 2021 included a $46 million charge related to the 2021 Restructuring Actions, a $12 million charge related to the 2020 Restructuring Program, a $1 million charge related to the 2019 Restructuring Program and a $4 million credit related to the DowDuPont Cost Synergy Program.

The charges for the year ended December 31, 2020 included a $270 million impairment charge related to long-lived assets and a $52 million impairment charge related to indefinite-lived intangible assets in Corporate, a $318 million impairment charge related to long-lived assets and a $21 million impairment charge related to indefinite-lived intangible assets in the Mobility & Materials segment, a $168 million charge related to the 2020 Restructuring Program, a $5 million charge related to the 2019 Restructuring Program and a $11 million charge related to the DowDuPont Cost Synergy Program.

The charges for the year ended December 31, 2019 included a charge of $119 million related to the 2019 Restructuring Program and a $33 million charge to the DowDuPont Cost Synergy Program.

See Note 6 to the Consolidated Financial Statements for additional information.

Goodwill Impairment Charges

There were no goodwill impairment charges for the year ended December 31, 2021.

Goodwill impairment charges were $3,214 million and $242 million for the years ended December 31, 2020 and 2019, respectively.

For the year ended December 31, 2020, goodwill impairment charges relate to the Transportation & Industrial and Non-Core segments.

For the year ended December 31, 2019, goodwill impairment charges relate to the Nutrition & Biosciences and Non-Core segments.

There were no goodwill related impairments in the year ended December 31, 2018.

For the year ended December 31, 2020, goodwill impairment charges related to a business reported in Corporate and the Mobility & Materials and Industrial Solutions reporting units.

For the year ended December 31, 2019, goodwill impairment charges related to businesses reported in Corporate.

See Note 14 to the Consolidated Financial Statements for additional information.

Integration and Separation Costs

Integration and separation costs were $594 million in 2020, $1,342 million in 2019 and $1,887 million in 2018.

Integration and separation costs primarily reflect costs related to the N&B Transaction, which began in the fourth quarter of 2019, the post-DWDP Merger integration, and activities related to the DWDP Distributions.

The decline was primarily related to the timing of the DWDP Distributions.

Acquisition, Integration and Separation Costs

Acquisition, integration and separation costs were $133 million, $177 million and $1,257 million for the years ended December 31, 2021, 2020 and 2019, respectively.

Acquisition, integration and separation costs primarily consist of financial advisory, information technology, legal, accounting, consulting, and other professional advisory fees.

For the year-ended December 31, 2021 these costs were primarily associated with the execution of strategic initiatives, including the acquisition of Laird PM, the planned divestiture of the In-Scope M&M Businesses, the Intended Rogers Acquisition, and the completed and planned divestitures of the held for sale businesses included within Corporate.

For the years ended December 31, 2020 and December 31, 2019 these costs were primarily associated with the preparation and execution of activities related to the DWDP Merger, post-DWDP Merger integration, and the DWDP Distributions.

Equity in Earnings of Nonconsolidated Affiliates

The Company's share of the earnings of nonconsolidated affiliates was $94 million, $187 million, and $85 million for the years ended December 31, 2021, 2020 and 2019, respectively.

The increase in earnings of nonconsolidated affiliates for the year ended December 31, 2020 compared to the prior year is due to higher HSC Group equity earnings in the first half of 2020, driven mainly by customer settlements in the second quarter of 2020.

The decrease in earnings of nonconsolidated affiliates for the year ended December 31, 2019 compared to the year ended December 31, 2018 was primarily due to lower equity earnings from the HSC Group for the year ended December 31, 2019.

For the year ended December 31, 2019 lower equity earnings from the HSC Group was mainly attributable to asset impairment charges, partially offset by benefits associated with customer contract settlements.

The decrease in earnings of nonconsolidated affiliates for the year ended December 31, 2021 compared to the prior year is primarily due to the sale of DC HSC Holdings LLC and Hemlock Semiconductor L.L.C.

(the "HSC Group") in the third quarter of 2020.

The increase in earnings of nonconsolidated affiliates for the year ended December 31, 2020 compared to the year ended December 31, 2019 is due to higher HSC Group equity earnings in the first half of 2020, driven mainly by customer settlements in the second quarter of 2020.

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 includes a variety of income and expenses 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 for the year ended December 31, 2021 was $163 million compared with $667 million and $144 million in the years ended December 31, 2020 and 2019, respectively.

The year ended December 31, 2020 included a net pre-tax benefit of $396 million associated with the TCS/HSC Disposal as discussed above, a pre-tax gain of $197 million related to the sale of the Compound Semiconductor Solutions business unit in the Electronics & Imaging segment, miscellaneous income of $47 million, and income related to non-operating pension and other post-employment benefit plans of $32 million, partially offset by foreign currency exchange losses of $56 million.

The year ended December 31, 2021 included a net pre-tax benefit of $140 million associated with the sale of the Solamet® business unit within Corporate, a pre-tax gain of $28 million related to the sale of assets within the Electronics & Industrial segment, income related to non-operating pension and other post-employment benefit plans of $52 million, partially offset by foreign currency exchange losses of $53 million, and miscellaneous expenses of $11 million.

The year ended December 31, 2020 included a net pre-tax benefit of $396 million associated with the TCS/HSC Disposal, a pre-tax gain of $197 million related to the sale of the Compound Semiconductor Solutions business unit in the Electronics & Industrial segment, miscellaneous income of $32 million, and income related to non-operating pension and other post-employment benefit plans of $30 million, partially offset by foreign currency exchange losses of $39 million.

The year ended December 31, 2019 included a net gain on sale of assets and investments of $144 million, income related to non-operating pension and other post-employment benefit plans of $72 million and interest income of $56 million, partially offset by foreign currency exchange losses of $104 million and miscellaneous expenses of $24 million which includes a $48 million charge reflecting a reduction in gross proceeds from lower withholding taxes related to a prior year legal settlement.

The net gain on sale of assets includes income of $92 million related to a sale of assets within the Electronics & Imaging segment and as well as a gain of $28 million related to the sale of the Sustainable Solutions business unit within the Non-Core segment.

The year ended December 31, 2018 included income related to non-operating pension and other post-employment benefit plans of $96 million, miscellaneous income of $83 million and interest income of $39 million, partially offset by foreign currency exchange losses of $93 million and loss on divestiture and change in joint venture ownership of $41 million.

The foreign currency exchange losses included a $50 million foreign currency exchange loss related to adjustments to foreign currency exchange contracts as a result of U.S.

The loss on divestitures and change in joint venture ownership include a $14 million loss on the divestiture of the European XPS STYROFOAM TM business (related to Safety & Construction) and a $27 million negative impact for adjustments related to the Dow Silicones ownership restructure (related to Non-Core).

See Notes 6 to the Consolidated Financial Statements for additional information.

The net gain on sale of assets includes income of $92 million related to a sale of assets within the Electronics & Industrial segment and as well as a gain of $28 million related to the sale of the Sustainable Solutions business unit included in Corporate.

See Note 7 to the Consolidated Financial Statements for additional information.

Interest Expense

Interest expense was $525 million, $672 million, and $667 million for the years ended December 31, 2021, 2020, and 2019, respectively.

The increase in interest expense in 2020 compared to 2019 primarily relates to financing costs associated with the N&B Transaction and the May Debt Offering, partially offset by reduced borrowing rates on floating rate debt.

For the year ended December 31, 2018, there was less than one quarter of interest expense as the Company did not have outstanding

borrowings until the 2018 Senior Notes issuance in the fourth quarter of 2018.

The decrease in interest expense in 2021 compared to 2020 primarily relates to the maturity of the November 2020 Notes, the early repayment of the $3.0 billion Term Loan Facilities in February 2021, and significant reduction of commercial paper borrowings, partially offset by structuring fees and the amortization of commitment fees related to the Intended Rogers Acquisition financing agreements.

The increase in interest expense in 2020 compared to 2019 primarily relates to financing costs associated with the May 2020 Debt Offering, partially offset by reduced borrowing rates on floating rate debt.

Refer to Note 15 to the Consolidated Financial Statements for additional information.

(Benefit from) Provision for Income Taxes on Continuing Operations

Provision for (Benefit from) 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 attributes.

For the year ended December 31, 2021, the Company's effective tax rate was 17.9 percent on pre-tax income from continuing operations of $2,196 million.

The effective tax rate differential for the year ended December 31, 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.

For the year ended December 31, 2020, the Company's effective tax rate was (7.1) percent on a pre-tax loss from continuing operations of $2,246 million.

The effective tax rate for the year ended December 31, 2020, was principally the result of a non-tax-deductible goodwill impairment charge impacting the Non-Core segment in the first and third quarter and a non-tax-deductible goodwill impairment charge impacting the Transportation and Industrial segment in the second quarter, coupled with an allocation of non-tax-deductible goodwill related to the TCS/HSC Disposal.

See Note 13 for more information regarding the goodwill impairment charges.

The underlying factors affecting the Company’s overall tax rate are summarized in Note 7 to the Consolidated Financial Statements.

The effective tax rate differential was principally the result of the non-tax-deductible goodwill impairment charge impacting Corporate in the first and third quarter and a non-tax-deductible goodwill impairment charge impacting the Mobility & Materials and Electronics & Industrial segments in the second quarter, coupled with an allocation of non-tax-deductible goodwill related to the TCS/HSC Disposal.

For the year ended December 31, 2019, the Company's effective tax rate was 1.6 percent on a pre-tax loss from continuing operations of $126 million.

The effective tax rate was principally the result of the non-tax-deductible goodwill impairment charges impacting the Nutrition & Biosciences and Non-Core segments.

For the year ended December 31, 2018, the Company's effective tax rate was 32.6 percent on pre-tax income from continuing operations of $600 million.

The effective tax was favorably impacted by the geographic mix of earnings but was more than offset by a $67 million charge associated with a valuation allowance recorded against the net deferred tax asset position of the Company’s legal entity in Brazil related to the separated agriculture business.

(Loss) Income from Discontinued Operations, Net of Tax

Loss from discontinued operations, net of tax was $49 million for the year ended December 31, 2020, compared to income from discontinued operations, net of tax of $1,214 million and $3,595 million for the years ended December 31, 2019 and 2018, respectively.

For the year ended December 31, 2020, loss from discontinued operations, net of tax primarily related to litigation matters, partially offset by a gain related to the DWDP Tax Matters Agreement.

For the year ended December 31, 2019 and 2018, income from discontinued operations, net of tax primarily related to the DWDP Distributions.

The decrease each year is attributable to the timing of the DWDP Distributions.

Refer to Notes 3 and 15 to the Consolidated Financial Statements for additional information.

Net Income Attributable to Noncontrolling Interests

Net income attributable to noncontrolling interests, including the portion attributable to discontinued operations, was $28 million, $102 million, and $155 million, for the years ended December 31, 2020, 2019, and 2018 respectively.

Net income attributable to noncontrolling interests of continuing operations was $28 million, $30 million, and $39 million, for the years ended December 31, 2020, 2019, and 2018 respectively.

The effective tax rate differential was principally the result of the non-tax-deductible goodwill impairment charges impacting Corporate.

The underlying factors affecting the Company’s overall tax rate are summarized in Note 8 to the Consolidated Financial Statements.

SUPPLEMENTAL UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION

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The historical consolidated financial information has been adjusted to give effect to pro forma events that are (1) directly attributable to the DWDP Distributions and the DWDP Financings (collectively the "DWDP Transactions"), (2) factually supportable and (3) with respect to the statements of operations, expected to have a continuing impact on the results.

The unaudited pro forma statements of operations for the years ended December 31, 2019 and 2018 give effect to the pro forma events as if the DWDP Transactions had occurred on January 1, 2018.

There were no pro forma adjustments for the year ended December 31, 2020.

The unaudited pro forma statements of operations for the years ended December 31, 2019 give effect to the pro forma events as if the DWDP Transactions had occurred on January 1, 2018.

There were no pro forma adjustments for the years ended December 31, 2021 and 2020.

Restructuring or integration activities or other costs following the DWDP Distributions that may be incurred to achieve cost or growth synergies of DuPont are not reflected.

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Pro Forma Adjustments 2

Pro Forma DuPont 1

Pro Forma Adjustments 2

Net sales $ 15,436 $ — $ 15,436

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Interest expense

668 29 697 55 629 684

(Loss) Income from continuing operations before income taxes

(474) 122 (352) 600 (210) 390

Provision for income taxes on continuing operations

140 30 170 195 (42) 153

(Loss) Income from continuing operations, net of tax

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Net income attributable to noncontrolling interests of continuing operations

30 — 30 39 — 39

Net (loss) income from continuing operations attributable to DuPont

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Weighted-average common shares outstanding - basic

746.3 746.3 767.0 767.0

Weighted-average common shares outstanding - diluted

746.3 746.3 771.8 771.8

See the Company's historical U.S.

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SEGMENT RESULTS

Prior to April 1, 2019, the Company's measure of profit / loss for segment reporting purposes is pro forma Operating EBITDA as this is the manner in which the Company's chief operating decision maker ("CODM") assessed performance and allocates resources.

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 / other post-employment benefits (“OPEB”) / charges, and foreign exchange gains / losses, adjusted for significant items.

Prior to April 1, 2019, the Company's measure of profit / loss for segment reporting purposes was pro forma Operating EBITDA as this was the manner in which the Company's chief operating decision maker ("CODM") assessed performance and allocated resources.

The Company defines pro forma Operating EBITDA as pro forma earnings (i.e.

pro forma "Income (loss) from continuing operations before income taxes") before interest, depreciation, amortization, non-operating pension / other post-employment benefits (“OPEB”) / charges, and foreign exchange gains/losses, excluding the impact of costs historically allocated to the materials science and agriculture businesses that did not meet the criteria to be recorded as discontinued operations and adjusted for significant items.

Effective April 1, 2019, 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, adjusted for significant items.

pro forma "Income (loss) from continuing operations before income taxes") before interest, depreciation, amortization, non-operating pension / OPEB benefits / charges, and foreign exchange gains/losses, excluding the impact of costs historically allocated to the materials science and agriculture businesses that did not meet the criteria to be recorded as discontinued operations and adjusted for significant items.

Pro forma adjustments were determined in accordance with Article 11 of Regulation S-X.

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Events that are not expected to have a continuing impact on the combined results are excluded from the pro forma adjustments.

Those pro forma adjustments include the impact of various supply agreements entered into in connection with the Dow Distribution ("supply agreements") and are adjustments to "Cost of sales." The impact of these supply agreements are reflected in pro forma Operating EBITDA for the periods noted above as they are included in the measure of profit/loss reviewed by the CODM in order to show meaningful comparability among periods while assessing performance and making resource allocation decisions.

Those pro forma adjustments include the impact of various supply agreements entered into in connection with the Dow Distribution ("supply agreements") and are adjustments to "Cost of sales." The impact of these supply agreements are reflected in pro forma Operating EBITDA for the year ended December 31, 2019 as they are included in the measure of profit/loss reviewed by the CODM in order to show meaningful comparability among periods while assessing performance and making resource allocation decisions.

Refer to the Supplemental Unaudited Pro Forma Combined Financial Information section for further information.

ELECTRONICS & IMAGING

The Electronics & Imaging 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 of semiconductors and integrated circuits, and provides innovative metallization processes for metal finishing, decorative, and industrial applications as well as films and laminate materials for a broad range of uses in printed circuit board and other electronic industry applications.

Electronics & Imaging is a leading provider of photopolymer plates and platemaking systems used in flexographic printing and digital inks for textile, commercial and home-office printing applications.

In addition, the segment provides cutting-edge materials for the manufacturing of rigid and flexible displays for organic light emitting diode ("OLED"), and other display applications.

Electronics & Imaging For the Years Ended December 31,

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 ("OLED").

In addition, the segment produces high performance elastomer and polyimide parts, medical silicones and specialty lubricants.

Electronics & Industrial For the Years Ended December 31,

In millions 2021 2020 2019

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Equity earnings $ 41 $ 34 $ 24

For the year ended December 31, 2019 and 2018 operating EBITDA is on a pro forma basis.

Electronics & Imaging For the Years Ended December 31,

For the year ended December 31, 2019 operating EBITDA is on a pro forma basis.

Electronics & Industrial For the Years Ended December 31,

Percentage change from prior year 2021 2020

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2021 Versus 2020

Electronics & Imaging net sales were $3,814 million for the year ended December 31, 2020, up from $3,554 million for the year ended December 31, 2019.

Electronics & Industrial net sales were $5,554 million for the year ended December 31, 2021, up 19 percent from $4,674 million for the year ended December 31, 2020.

Net sales increased due to a 12 percent increase in volume, a 6 percent portfolio and other increase and a 1 percent favorable currency impact.

Local price and product mix were flat.

Volume growth was driven by Industrial Solutions primarily due to increased demand in consumer electronics and healthcare markets.

Semiconductor Technologies volume growth was led by new technology ramps at advanced nodes within logic and foundry and growth in high performance computing and 5G communications markets.

Within Interconnect Solutions, the increase was driven by the July 1, 2021 acquisition of Laird PM, increases in consumer electronics, and continued volume recovery within industrial applications.

Operating EBITDA was $1,758 million for the year ended December 31, 2021, up 20 percent compared with $1,468 million for the year ended December 31, 2020 driven by strong volume growth and the acquisition of Laird PM and partially offset by higher raw material and logistic costs.

The years ended December 31, 2021 and 2020 include income of $28 million and $40 million, respectively, related to the sale of assets.

2020 Versus 2019

Electronics & Industrial net sales were $4,674 million for the year ended December 31, 2020, up from $4,446 million for the year ended December 31, 2019.

Net sales increased due to a 6 percent volume increase partially offset by a 1 percent decrease in local price.

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Volume growth within Interconnect Solutions was driven by increased material content in next-generation smartphones.

Within Image Solutions, volume growth in OLED materials for displays and digital printing inks for the consumer segment offset weakness in flexographic plates and commercial printing and textile inks.

Within Industrial Solutions, volume growth in KALREZ® for electronics applications, OLED materials for displays and digital printing inks for the consumer segment offset weakness in flexographic plates and declines in the automotive and aerospace end markets.

Volume grew significantly in Asia Pacific.

Operating EBITDA was $1,468 million for the year ended December 31, 2020, up 1 percent compared with pro forma Operating EBITDA of $1,454 million for the year ended December 31, 2019 as volume growth, productivity and higher equity income more than offset higher raw material logistic costs and lower gains related to asset sales.

2019 Versus 2018

Electronics & Imaging net sales were $3,554 million for the year ended December 31, 2019, down from $3,635 million for the year ended December 31, 2018 due to a 1 percent volume decline and a 1 percent unfavorable currency impact, primarily in Asia Pacific and EMEA.

Volume decreased overall as Semiconductor Technologies and Interconnect Solutions declines more than offset volume gains in Image Solutions.

Within Semiconductor Technologies, weakened demand in the memory sector was partially offset by increased volumes related to semiconductor packaging materials.

Demand for advanced materials for smartphones remained strong but overall volumes in Interconnect Solutions were down due to soft circuit board demand.

Volume growth in Image Solutions reflects increased demand for OLED materials partially offset by volume declines in flexographic printing.

Pro forma Operating EBITDA was $1,147 million for the year ended December 31, 2019, down 5 percent compared with $1,210 million for the year ended December 31, 2018, as higher raw material costs, volume declines and an unfavorable currency impact more than offset cost synergies and income associated with an asset sale.

NUTRITION & BIOSCIENCES

The Nutrition & Biosciences segment is an innovation-driven and customer-focused segment that provides solutions for the global food and beverage, dietary supplements, pharma, home and personal care, energy, and animal nutrition markets.

The segment is one of the world's largest producers of specialty ingredients, developing and manufacturing solutions for the global food and beverage, dietary supplements and pharmaceutical markets.

Additionally, the segment is an industry pioneer and innovator that works with customers to improve the performance, productivity and sustainability of their products and processes, through differentiated technology in ingredients applications, fermentation, biotechnology, chemistry and manufacturing process excellence.

Nutrition & Biosciences For the Years Ended December 31,

In millions 2020 2019 2018

Net sales $ 6,059 $ 6,076 $ 6,216

Operating EBITDA 1

$ 1,523 $ 1,406 $ 1,420

Equity earnings $ 4 $ (1) $ (1)

For the year ended December 31, 2019 and 2018 operating EBITDA is on a pro forma basis.

Nutrition & Biosciences For the Years Ended December 31,

Percentage change from prior year 2020 2019

Change in Net Sales from Prior Period due to:

Local price & product mix

Portfolio & other

2020 Versus 2019

Nutrition & Biosciences net sales were $6,059 million for the year ended December 31, 2020, or essentially flat compared with $6,076 million for the year ended December 31, 2019.

A 1 percent increase in local price was offset by a 1 percent unfavorable currency impact.

Volume remained flat.

Food & Beverage volume declined due to decreased demand in food service and sweeteners, partially offset by higher demand for plant-based meat.

Health & Biosciences volume gains were driven by probiotics along with strong demand in home & personal care and animal nutrition, offset by declined demand in biorefinery and microbial control.

Pharma Solutions volume gains were driven by increased demand in key products.

Operating EBITDA was $1,523 million for the year ended December 31, 2020, up 8 percent compared with pro forma Operating EBITDA of $1,406 million for the year ended December 31, 2019 due to a cost productivity actions, favorable product mix led by Health & Biosciences, and pricing gains.

2019 Versus 2018

Nutrition & Biosciences net sales were $6,076 million for the year ended December 31, 2019, down from $6,216 million for the year ended December 31, 2018, due to a 2 percent unfavorable currency impact, primarily in EMEA and Latin America, and a 1 percent decrease from portfolio actions partially offset by a 1 percent increase in local price.

Volume was flat year over year as volume gains in Food & Beverage, primarily in cellulosics from growing demand in the meat alternatives and high protein nutritional beverages, was offset by declines in Health & Biosciences due to continued market-driven softness in biorefineries and decreased volume related to home and personal care applications which were partially offset by strength in food enzymes.

Pro forma Operating EBITDA was $1,406 million for the year ended December 31, 2019, down 1 percent compared with $1,420 million for the year ended December 31, 2018 as unfavorable impacts related to product mix and currency were partially offset by cost synergies, productivity actions and pricing gains.

TRANSPORTATION & INDUSTRIAL

The Transportation & Industrial segment provides high-performance engineering resins, adhesives, silicones, lubricants and parts to engineers and designers in the transportation, electronics, healthcare, industrial and consumer end-markets to enable systems solutions for demanding applications and environments.

The segment delivers a broad range of polymer-based high-performance materials in its product portfolio, including elastomers and thermoplastic and thermoset engineering polymers which are used by customers to fabricate components for mechanical, chemical and electrical systems.

In addition, the segment produces innovative engineering polymer solutions, high performance parts, specialty silicones and differentiated adhesive technologies to meet customer specifications in automotive, aerospace, electronics, industrial, healthcare and consumer markets.

Transportation & Industrial is a global leader of advanced materials that provide technologies that differentiate customers’ products with improved performance characteristics enabling the transition to hybrid-electric-connected vehicles, high speed high frequency connectivity and smart healthcare.

Transportation & Industrial

For the Years Ended December 31,

In millions 2020 2019 2018

Net sales $ 4,189 $ 4,950 $ 5,422

Operating EBITDA 1

$ 916 $ 1,313 $ 1,518

Equity earnings $ 4 $ 4 $ 1

For the year ended December 31, 2019 and 2018 operating EBITDA is on a pro forma basis.

Transportation & Industrial

For the Years Ended December 31,

Percentage change from prior year 2020 2019

Change in Net Sales from Prior Period due to:

Local price & product mix

Portfolio & other

2020 Versus 2019

Transportation & Industrial net sales were $4,189 million for the year ended December 31, 2020, down from $4,950 million for the year ended December 31, 2019 due to a 11 percent decrease in volume and a 4 percent decrease in local price.

Volume declines were due to the impact of the COVID-19 pandemic on the automotive industry and the other key industrial markets.

Operating EBITDA was $916 million for the year ended December 31, 2020, down 30 percent compared with pro forma Operating EBITDA of $1,313 million for the year ended December 31, 2019 driven primarily by price and volume declines due to the COVID-19 pandemic and approximately $170 million in charges associated with temporarily idling several manufacturing plants to align supply with demand.

2019 Versus 2018

Transportation & Industrial net sales were $4,950 million for the year ended December 31, 2019, down from $5,422 million for the year ended December 31, 2018.

The change in net sales was due to a 10 percent decrease in volume and a 2 percent unfavorable currency impact, primarily in EMEA and Asia Pacific, which more than offset a 3 percent increase in local price.

Volume declines were primarily due to destocking in the automotive channel and decreased demand in automotive and electronics markets in Asia Pacific and EMEA.

Local price increased across all regions and primarily in Mobility Solutions.

Pro forma Operating EBITDA was $1,313 million for the year ended December 31, 2019, down 14 percent compared with $1,518 million for the year ended December 31, 2018 as volume declines, higher raw material costs and an unfavorable currency impact were partially offset by pricing gains and cost synergies.

SAFETY & CONSTRUCTION

Safety & Construction is the global leader in providing innovative engineered products and integrated systems for a number of industries including, worker safety, water purification and separation, transportation, energy, medical packaging and building materials.

Safety & Construction addresses the growing global needs of businesses, governments and consumers for solutions that make life safer, healthier and better.

WATER & PROTECTION

Water & Protection is the global leader in providing innovative engineered products and integrated systems for a number of industries including, worker safety, water purification and separation, transportation, energy, medical packaging and building materials.

Water & Protection addresses the growing global needs of businesses, governments and consumers for solutions that make life safer, healthier and better.

By uniting market-driven science and engineering 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.

Safety & Construction For the Years Ended December 31,

Water & Protection For the Years Ended December 31,

In millions 2021 2020 2019

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Equity earnings $ 36 $ 26 $ 27

For the year ended December 31, 2019 and 2018 operating EBITDA is on a pro forma basis.

Safety & Construction For the Years Ended December 31,

For the year ended December 31, 2019 operating EBITDA is on a pro forma basis.

Water & Protection For the Years Ended December 31,

Percentage change from prior year 2021 2020

3 unchanged sentences

2021 Versus 2020

Safety & Construction net sales were $4,993 million for the for the year ended December 31, 2020, down from $5,201 million for the year ended December 31, 2019 as a 2 percent increase in local price and 2 percent increase in portfolio were more than offset by a 8 percent volume decline.

Water & Protection net sales were $5,552 million for the for the year ended December 31, 2021, up 11 percent from $4,993 million for the year ended December 31, 2020 due to an 8 percent increase in volume, a 2 percent increase in local price, and a 1 percent favorable currency impact.

Portfolio was flat.

Volume growth across the segment was driven by ongoing recovery of end markets following the COVID-19 pandemic.

Volume gains in Safety Solutions were driven by continued recovery in end-markets for aramid fibers most notably in NOMEX® and KEVLAR®.

Within Shelter Solutions, volume growth was driven by the ongoing recovery of commercial construction and continued demand in residential construction and do-it-yourself applications.

Water Solutions volume gains reflect strong demand for water technologies led by reverse osmosis membranes in industrial and desalination markets.

Operating EBITDA was $1,385 million for the year ended December 31, 2021, up 5 percent compared with $1,313 million for the year ended December 31, 2020 as volume gains and the absence of costs associated with temporarily idling several manufacturing facilities were partially offset by higher raw material and logistics costs.

2020 Versus 2019

Water & Protection net sales were $4,993 million for the year ended December 31, 2020, down from $5,201 million for the year ended December 31, 2019 as a 2 percent increase in local price and 2 percent increase in portfolio were more than offset by a 8 percent volume decline.

The portfolio impact reflects the recent acquisitions in the Water Solutions business.

2 unchanged sentences

Operating EBITDA was $1,313 million for the year ended December 31, 2020, down 4 percent compared with pro forma Operating EBITDA of $1,370 million for the year ended December 31, 2019 due to lower volumes, the absence of licensing income, and costs associated with idling facilities more than offsetting pricing gains, improved product mix, and productivity actions.

2019 Versus 2018

Safety & Construction net sales were $5,201 million for the year ended December 31, 2019, down from $5,294 million for the year ended December 31, 2018 as portfolio declines of 4 percent and a 1 percent unfavorable impact from currency in all regions more than offset a 3 percent increase in local price.

The portfolio impact reflects the prior year divestiture of the European XPS STYROFOAM™ business on December 1, 2018.

Local price increased across all businesses and in all regions.

Volume was flat compared with the prior year as volume growth in Water Solutions was offset by declines in Safety Solutions and Shelter Solutions.

Water Solutions volume gains were driven by strong demand for ion exchange and reverse osmosis membranes mainly in the industrial market.

Safety Solutions volume declined as a result of supply constraints and planned maintenance downtime which more than offset TYVEK® volume gains from increased demand in the personal protection market.

Volume declines in Shelter Solutions were primarily due to weakness in the construction market.

Pro forma Operating EBITDA was $1,419 million for the year ended December 31, 2019, up 11 percent compared with $1,283 million for the year ended December 31, 2018 due to local price gains, cost synergies, productivity improvements and volume gains partially offset by an unfavorable impact from currency.

The Non-Core segment is a leading global supplier of key materials for the manufacturing of photovoltaic cells and panels, including innovative metallization pastes, backsheet materials and silicone encapsulants and adhesives.

The segment provides materials used in components and films for consumer electronics, automotive, and aerospace markets.

Additionally, the segment provides sustainable materials and services for sulfuric acid production and regeneration technologies, alkylation technology for production of clean, high-octane gasoline, and a comprehensive suite of aftermarket service and solutions offerings, including safety consulting and services, to improve the safety, productivity, and sustainability of organizations across a range of industries.

The Non-Core segment is also a leading producer of specialty biotechnology materials for carpet and apparel markets as well as polyester films for the healthcare, photovoltaics, electronics, packaging and labels, and electrical insulation industries.

Until its sale in the third quarter of 2020, the segment also includes the Company's share of the results of the HSC Group, a U.S.-based group of companies that manufacture and sell polycrystalline silicon products for the photovoltaic and semiconductor industries.

Non-Core For the Years Ended December 31,

MOBILITY & MATERIALS

The Mobility & Materials segment provides high-performance engineering thermoplastics and advanced solutions to engineers and designers in the transportation, electronics, industrial, consumer and renewable energy end-markets to enable systems solutions for demanding applications and environments.

In addition, the segment supplies key materials for the manufacturing of photovoltaic cells and panels, including backsheet materials and silicone encapsulates and adhesives.

The segment provides specialty pastes and films used in consumer electronics, automotive, and aerospace markets.

Mobility & Materials is a global leader of advanced materials that provides technologies that differentiate customers’ products with improved performance characteristics enabling the transition to hybrid-electric-connected vehicles and high speed high frequency connectivity.

Mobility & Materials

For the Years Ended December 31,

In millions 2021 2020 2019

3 unchanged sentences

Equity earnings $ 9 $ 19 $ 4

$ 122 $ 258 $ 400

For the year ended December 31, 2019 and 2018 operating EBITDA is on a pro forma basis.

Excludes a net charge primarily related to a joint venture in the Non-Core segment.

Non-Core For the Years Ended December 31,

For the year ended December 31, 2019 operating EBITDA is on a pro forma basis.

Mobility & Materials

For the Years Ended December 31,

Percentage change from prior year 2021 2020

2 unchanged sentences

Portfolio & other

(22) % (15) %

2021 Versus 2020

Non-Core net sales were $1,342 million for the year ended December 31, 2020, down from $1,731 million for the year ended December 31, 2019 due to a 14 percent decrease in volume and an 11 percent portfolio decline which more than offset a 3 percent increase in local price.

The portfolio decline was driven by the third quarter 2020 sale of the trichlorosilane ("TCS") business within Photovoltaic & Advanced Materials and the third quarter 2019 sale of the Sustainable Solutions business.

Volume declines were driven by declines in demand for trichlorosilanes, TEDLAR® aircraft films, biomaterials due to weakened demand in carpet and apparel markets, and lower volumes in Clean Technologies.

Operating EBITDA was $168 million for the year ended December 31, 2020, down 67 percent compared with pro forma Operating EBITDA of $512 million for the year ended December 31, 2019 due to declines in customer settlements, volume declines, the absence of the gain on the sale of the Sustainable Solutions business, and the absence of earnings from the Sustainable Solutions, TCS, and HSC businesses.

Mobility & Materials net sales were $5,045 million for the year ended December 31, 2021, up 26 percent from $4,005 million for the year ended December 31, 2020.

Net sales increased due to a 12 percent increase in local price and product mix, a 12 percent increase in volume and a 2 percent favorable currency impact.

The local price increase reflects actions taken to offset higher raw material costs and higher metals pricing.

Volume growth was attributable to the continued recovery of key end markets, primarily the global automotive market.

Operating EBITDA was $1,082 million for the year ended December 31, 2021, up 84 percent compared with $588 million for the year ended December 31, 2020 driven by higher volumes, pricing gains, and the absence of $170 million of charges recorded in the prior year associated with temporarily idling several manufacturing facilities which offset higher raw material and logistic costs.

2020 Versus 2019

Non-Core net sales were $1,731 million for the year ended December 31, 2019, down from $2,027 million for the year ended December 31, 2018 due to a 11 percent decrease in volume, a 3 percent portfolio decline and a 2 percent unfavorable impact from currency, primarily in Asia Pacific, which more than offset a 1 percent increase in local price.

Portfolio declines were due to the sale of the Sustainable Solutions business in the third quarter of 2019.

Volume declines in Photovoltaic & Advanced Materials were driven by weak demand for trichlorosilanes due to low polysilicon production and lower paste sales in electronic component end markets.

Biomaterials volume declines were primarily a result of a slow-down in demand in the carpet and apparel markets.

Pro forma Operating EBITDA was $512 million for the year ended December 31, 2019, down 27 percent compared with $702 million for the year ended December 31, 2018 as a result of volume declines, lower HSC Group equity earnings due to lower customer settlements, and unfavorable impacts from currency and portfolio actions, which were partially offset by cost synergies and a gain on the sale of the Sustainable Solutions business.

Mobility & Materials net sales were $4,005 million for the year ended December 31, 2020, down from $4,690 million for the year ended December 31, 2019 due to a 11 percent decrease in volume and a 4 percent decrease in local price.

Volume declines were due to the impact of the COVID-19 pandemic on the automotive industry and the other key industrial markets.

Operating EBITDA was $588 million for the year ended December 31, 2020, down 38 percent compared with pro forma Operating EBITDA of $954 million for the year ended December 31, 2019 driven primarily by price and volume declines due to the COVID-19 pandemic and approximately $170 million in charges associated with temporarily idling several manufacturing plants to align supply with demand.

Corporate 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.

The sales and activity of to be divested and previously divested businesses including the operations of Biomaterials, Clean Technologies, and Solamet® business units, and the TCS Business along with its equity ownership interest in DC HSC Holdings LLC and Hemlock Semiconductor L.L.C.

(the "HSC Group”) are reflected as Corporate activity.

To date, the following divestitures of businesses held within Corporate have occurred:

• Clean Technologies on December 31, 2021;

• Solamet® in the third quarter 2021;

• the TCS Business and HSC Group in the third quarter 2020;

• the Sustainable Solutions business in third quarter 2019.

Corporate net sales related to the divested businesses were $502 million, $666 million, and $1,099 million for the years ended December 31, 2021, 2020, and 2019, respectively.

The decrease in sales for the year ended December 31, 2021, was driven by the timing of portfolio actions, discussed above, offset by volume growth driven by demand in carpet and apparel markets within Biomaterials and pricing gains.

For the year ended December 31, 2020, sales declined due to the portfolio actions discussed above and volume declines which were led by lower demand in Biomaterials due to weakened demand in carpet and apparel markets and lower volumes in Clean Technologies.

Operating EBITDA was $(55) million and $70 million for the year ended December 31, 2021 and 2020, respectively and pro forma Operating EBITDA was $366 million for the years ended December 31, 2019.

The decrease in EBITDA both years was primarily the result of portfolio actions and declines in customer settlements.

In 2022, the Company expects demand to remain strong across all segments led by on-going strength in semiconductors, along with continued demand in industrial technologies, smartphone sales, water filtration and residential construction.

The Company anticipates raw material and logistic costs will remain at elevated levels in 2022.

The anticipated strong demand, productivity actions and Laird PM acquisition synergies along with benefits from continued pricing actions in response to incremental cost increases, are expected to deliver earnings improvement versus 2021.

The Company continues to closely monitor macroeconomic and geopolitical developments.

LIQUIDITY & CAPITAL RESOURCES

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The Company’s primary source of incremental liquidity is cash flows from operating activities.

COVID-19 continues to impact the broader global economy, including negatively impacting economic growth and creating disruption and volatility in the global financial and capital markets, which could result in increases in the cost of capital and/or adversely impact the availability of and access to capital, which could negatively affect DuPont’s liquidity.

COVID-19 continues to impact the broader global economy.

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.

however, DuPont is unable to predict the extent of COVID-19 related impacts which depends on highly uncertain and unpredictable future developments, including the duration and spread of the COVID-19 outbreak, and the speed and extent of the resumption of normal economic and operating conditions.

However, DuPont is unable to predict the extent of COVID-19 related impacts which depend on uncertain and unpredictable future developments.

In light of this uncertainty, the Company has taken steps to further ensure liquidity and capital resources, as discussed below.

2 unchanged sentences

$ 2,011 $ 2,544

$ 21,811 $ 17,447

The net proceeds of approximately $6.2 billion from the N&B Notes Offering were recorded within non-current “Restricted cash” in the Consolidated Balance Sheets at December 31, 2020 and thus are not included in "Cash and cash equivalents" as presented in the table above.

This includes $6.25 billion of debt obligations associated with the N&B Notes Offering.

Total debt $ 10,782 $ 15,612

The net proceeds of approximately $6.2 billion received from an offering of senior unsecured notes associated with the N&B Transaction were recorded within non-current “Restricted cash” in the Consolidated Balance Sheets at December 31, 2020 and thus are not included in "Cash and cash equivalents" as presented in the table above.

The Company's cash and cash equivalents at December 31, 2021 and December 31, 2020 were $2.0 billion and $2.5 billion, respectively, of which $1.4 billion at December 31, 2021 and $1.8 billion at December 31, 2020 were held by subsidiaries in foreign countries, including United States territories.

1 unchanged sentence

Total debt at December 31, 2021 and December 31, 2020 was $10.8 billion and $15.6 billion, respectively.

The increase was primarily due to the N&B Notes Offering and the May Debt Offering.

This increase was partially offset by the repayment of the notes due in November 2020 and a decline in commercial paper.

As of December 31, 2020, the Company is contractually obligated to make future cash payments of $21,958 million and $9,235 million associated with principal and interest, respectively, on debt obligations.

Related to the principal balance, $5 million will be due in the next twelve months and the remainder will be due subsequent to 2021.

The decrease was primarily due to the termination and repayment of the Company's $3.0 billion term loan facilities in the first quarter of 2021, and the redemption of the May 2020 Notes in the second quarter of 2021, described further below, in accordance with a special mandatory redemption feature.

As of December 31, 2021, the Company is contractually obligated to make future cash payments of $10.7 billion and $5.9 billion associated with principal and interest, respectively, on debt obligations.

Related to the principal, all payments will be due subsequent to 2022.

Related to interest, $503 million will be due in the next twelve months and the remainder will be due subsequent to 2022.

The majority of interest obligations will be due in 2027 or later.

The obligations associated with the N&B Notes Offering were separated from the Company on February 1, 2021, upon consummation of the N&B Transaction.

This resulted in $6,250 million of principal, mostly due subsequent to 2025, and related $2,637 million of future interest obligations being separated from the Company.

Term Loan and Revolving Credit Facilities

2 unchanged sentences

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.

In June 2019, the Company entered into a 364-day $750 million revolving credit facility (the “Old 364-Day Revolving Credit Facility”).

In April 2020, the Company entered into a $1 billion 364-day revolving credit facility (the “$1B Revolving Credit Facility").

The $1B Revolving Credit Facility replaced the Old 364-Day Revolving Credit Facility, improving the Company’s liquidity position in response to near term uncertainties.

As of the effectiveness of the $1B Revolving Credit Facility, the Old 364-Day Revolving Credit Facility was terminated.

The $1B Revolving Credit facility may be used for general corporate purposes.

On February 1, 2021, the Company terminated its fully drawn $3.0 billion Term Loan Facilities.

1 unchanged sentence

The Company funded the repayment with proceeds from the Special Cash Payment.

On April 15, 2021, the Company entered into an updated $1.0 billion 364-day revolving credit facility (the “2021 $1B Revolving Credit Facility") as the $1.0 billion 364-day revolving credit facility entered in April 2020 (the “2020 $1B Revolving Credit Facility") expired mid-April.

As of the effectiveness of the 2021 $1B Revolving Credit Facility, the 2020 $1B Revolving Credit Facility was terminated.

The 2021 $1B Revolving Credit facility may be used for general corporate purposes.

The Company intends to renew the 364-Day Revolving Credit Facility on or prior to expiration.

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 $2.0 billion of 2.169 percent fixed rate notes due May 1, 2023 (the “May 2020 Debt Offering”).

The proceeds from the May Debt Offering were used by the Company to repay the Company’s $0.5 billion in floating rate notes due November 2020 and $1.5 billion of 3.77 percent fixed-rate notes due November 2020.

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 intends to redeem the May 2020 Notes in May 2021 and will fund the redemption with proceeds from the Special Cash Payment.

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

On November 2, 2021, the Company announced that it had entered into a definitive agreement to acquire all the outstanding shares of Rogers for about $5.2 billion.

The acquisition is expected to close by the end of the second quarter of 2022 subject to regulatory approvals and other customary closing conditions.

Concurrent with the signing of the definitive agreement, the Company entered into a Bridge Commitment Letter (the “Bridge Letter”) in an aggregate principal amount of $5.2 billion to secure committed financing for 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 (the "2021 Term Loan Facility").

The 2021 Term Loan Facility is intended to fund the Intended Rogers Acquisition and will be drawn upon contemporaneously with the close of the Intended Rogers Acquisition.

The 2021 Term Loan Facility is required to be repaid upon completion of the intended divestiture of the In-Scope M&M Businesses.

Commensurate with the entry into the 2021 Term Loan Facility, the commitments under the Bridge Letter were terminated.

Commercial Paper

In April 2019, DuPont authorized a $3.0 billion commercial paper program (the “DuPont Commercial Paper Program”).

At December 31, 2020, the Company had no issuances outstanding of commercial paper ($1.8 billion at December 31, 2019).

The Company’s issuance under the Commercial Paper Program in 2019 included the issuance of $1.4 billion (the “Funding CP Issuance”) in May 2019 in anticipation of the Corteva Distribution, as well as borrowings for general corporate purposes.

Nutrition & Biosciences Financing

In January 2020, N&B entered into a senior unsecured term loan agreement in the amount of $1.25 billion split evenly between three- and five-year facilities ("N&B Term Loan Facilities").

On September 16, 2020 (the “Offering Date”), N&B completed an offering in the aggregate principal amount of $6.25 billion of senior unsecured notes in six series, comprised of the following (collectively, the “N&B Notes Offering" and together with the N&B Term Loan Facilities, the “Permanent Financing”):

$300 million aggregate principal amount of 0.697% Senior Notes due 2022;

$1.0 billion aggregate principal amount of 1.230% Senior Notes due 2025;

$1.2 billion aggregate principal amount of 1.832% Senior Notes due 2027;

$1.5 billion aggregate principal amount of 2.300% Senior Notes due 2030;

$750 million aggregate principal amount of 3.268% Senior Notes due 2040;

and $1.5 billion aggregate principal amount of 3.468% Senior Notes due 2050.

The net proceeds of approximately $6.2 billion from the N&B Notes Offering were deposited into an escrow account.

On February 1, 2021, upon consummation of the N&B Transaction, the proceeds from the Permanent Financing were used to make the Special Cash Payment and to pay the related financing fees and expenses.

At this time, the net proceeds from the N&B Notes Offering were released from escrow.

The obligations and liabilities associated with the Permanent Financing were also separated from the Company upon consummation of the N&B Transaction.

At December 31, 2021 the Company has $150 million of commercial paper issued and outstanding.

Credit Ratings

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Standard & Poor’s BBB+ A-2 Stable

Moody’s Investors Service Baa1 P-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 2018 Senior Notes also contain customary default provisions.

The Term Loan Facilities, the Five-Year Revolving Credit Facility and the $1B Revolving Credit Facility 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.

The senior unsecured notes (the "2018 Senior Notes") also contain customary default provisions.

The 2021 Term Loan Facility, the Five-Year Revolving Credit Facility and the 2021 $1B Revolving Credit Facility 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 December 31, 2021, the Company was in compliance with this financial covenant.

1 unchanged sentence

The Company’s cash flows from operating, investing and financing activities, as reflected in the Consolidated Statements of Cash Flows, are summarized in the following table.

The cash flows related to the materials science and agriculture businesses have not been segregated and are included in the Consolidated Statements of Cash Flows for the years ended December 31, 2019 and 2018.

The cash flows related to N&B have not been segregated and are included in the Consolidated Statements of Cash Flows for all periods presented, while cash flows related to the materials science and agriculture businesses are included in the Consolidated Statements of Cash Flows for the year ended December 31, 2019.

Cash Flow Summary

10 unchanged sentences

Cash, cash equivalents and restricted cash in discontinued operations

$ — $ — $ 5,431

Cash Flows from Operating Activities

Cash provided by operating activities was $4,095 million and $1,409 million for the years ended December 31, 2020 and 2019, respectively.

Cash provided by operating activities increased in 2020 compared with 2019, primarily due to a release of cash from net working capital in 2020 versus a use of cash for net working capital in the prior period, partially offset by lower earnings versus the prior period.

Cash provided by operating activities for the year ended December 31, 2018 was $4,731 million.

Cash provided by operating activities decreased in 2019 compared to 2018, primarily driven by the impact of the DWDP Distributions of the materials science and agriculture businesses to period earnings, partially offset by a decrease in the use of cash for net working capital versus the prior period.

Cash provided by operating activities was $2,281 million, $4,095 million and $1,409 million for the years ended December 31, 2021, 2020 and 2019, respectively.

Cash provided by operating activities decreased in 2021 compared with 202 0, primarily due to the use of cash from accounts and notes receivable and inventories in 2021 compared to the release of cash from those same balance sheet assets in 2020.

In 2021, these changes were driven by economic recovery resulting in sales growth/higher accounts receivable and supply chain challenges resulting in higher inventory levels.

Cash provided by operating activities increased in 2020 compared with 2019, largely due t o a release of cash from net working capital in 2020 versus a use of cash for net working capital in the prior period, partially offset by lower earnings versus the prior period.

Activity related to the N&B business is included in the full year of the 2020 comparative period and the first month of 2021.

Net Working Capital 1

6 unchanged sentences

Current ratio 1.89:1 2.31:1

Net working capital at December 31, 2020 has been presented to exclude the assets and liabilities related to the N&B Transaction.

The assets and liabilities related to the N&B Transaction are presented as assets of discontinued operations and liabilities of discontinued operations, respectively, in the Consolidated Balance Sheets.

Cash Flows from Investing Activities

Cash used for investing activities in 2021 was $2,401 million compared to cash used for investing of $202 million in 2020.

The decrease in cash used was primarily attributable to lower capital expenditures and an increase in proceeds from sales of property and businesses, partially offset by a decrease in proceeds from sales and maturities of investments.

Cash used for investing activities in 2018 was $2,462 million primarily driven by capital expenditures and purchases of investments, which were partially offset by proceeds from sales and maturities of investments and proceeds from interests in trade accounts receivable conduits.

Capital expenditures totaled $1,194 million for the year ended December 31, 2020, $2,472 million for the year ended December 31, 2019, and $3,837 million for the year ended December 31, 2018.

The Company expects 2021 capital expenditures to be approximately $825 million.

The increase in cash used was primarily attributable to the acquisition of Laird PM, and decrease in cash proceeds received from the sales of Solamet ® and Clean Technologies businesses in 2021 compared to the cash proceeds received from the sales of the TCS Business and Compound Semiconductor Solutions business units in 2020 partially offset by lower capital expenditures in 2021.

Cash used for investing activities in 2019 was $2,313 million primarily driven by capital expenditures and purchases of investments, which were partially offset by proceeds from sales and maturities of investments and proceeds from sales of property and business.

Activity related to the N&B business is included in the full year of the comparative period and the first month of 2021.

Capital expenditures totaled $891 million, $1,194 million and $2,472 million for the years ended December 31, 2021, 2020 and 2019, respectively.

The Company expects 2022 capital expenditures to be about $900 million.

The Company may adjust its spending throughout the year as economic conditions develop.

Cash Flows from Financing Activities

Cash provided by financing activities in 2020 was $3,238 million compared to cash used by financing activities of $11,550 million in 2019.

The difference in cash flows from financing activities in 2020 versus the prior year is primarily driven by the increase in proceeds from the issuance of long-term debt, largely related to the N&B Transaction, as well as the impact of the DWDP Distributions of the materials science and agriculture businesses to cash balances in 2019, partially offset by the increased use of cash in decreasing short-term notes payable.

Cash used for financing activities in 2018 was $1,918 million.

The primary driver of the difference in cash used for financing activities between 2019 and 2018 is the increased proceeds in issuance of long-term debt in 2018 and the impact of the DWDP Distributions of the materials science and agriculture businesses to cash balances in 2019.

Cash used for financing activities in 2021 was $6,507 million compared to cash provided by financing activities of $3,238 million in 2020.

The difference in cash flows from financing activities in 2021 versus the prior year is primarily driven by the use of cash in repayment of long-term debt, repurchases of common stock and significant reduction in issuances of long-term debt, which was partially offset by cash provided by increase in short-term notes payable and reduction in dividends paid to stockholders due to less shares outstanding.

Cash used for financing activities in 2019 was $11,550 million, primarily driven by repurchases of common stock and impact of the DWDP Distributions of the materials science and agriculture businesses to cash balances.

Activity related to the N&B business is included in the full year of the comparative period and the first month of 2021.

The following table provides dividends paid to common shareholders for the years ended December 31, 2021, 2020, and 2019:

4 unchanged sentences

$ 630 $ 882 $ 1,611

The 2019 and 2018 dividends include dividends paid to DowDuPont common stockholders prior to the DWDP Distributions.

The 2019 dividends include dividends paid to DowDuPont common stockholders prior to the DWDP Distributions.

The 2020 dividends include dividends paid to common stockholders prior to the N&B Transaction.

Share Buyback Programs

On June 1, 2019, the Company's Board of Directors authorized a $2 billion share buyback program, which expires on June 1, 2021.

As of December 31, 2020, the Company had repurchased 16.9 million shares under this program since inception at a total cost of $982 million, including 6.1 million shares repurchased and retired for $232 million during the year ended December 31, 2020.

Under this program, the Company has remaining authorization to repurchase and retire about $1 billion of its common stock in the open market or privately negotiated deals.

The timing and amount of any share repurchases will be determined by the Company based on its evaluation of market conditions and other factors.

On June 1, 2019, the Company's Board of Directors authorized a $2.0 billion share buyback program, which expired on June 1, 2021 ("2019 Share Buyback Program").

At the expiry of the 2019 Share Buyback Program, the Company had repurchased and retired a total cost of 29.9 million shares at a cost of $2.0 billion.

In the first quarter of 2021, the Company's Board of Directors authorized a $1.5 billion share buyback program, which expires on June 30, 2022 ("2021 Share Buyback Program").

As of December 31, 2021, the Company had repurchased and retired a total of 14.5 million shares for $1.1 billion under the 2021 Share Buyback Program.

In February 2022, the Company's Board of Directors authorized an additional $1.0 billion share buyback program which expires on March 31, 2023, (the “2022 Share Buyback Program”).

This authorization enables the Company to repurchase shares following the expected completion of the remaining authorization under its 2021 Share Buyback Program.

See Part II, Item 5.

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Pension and Other Post-Employment Plans

TDCC and EID did not merge their pension plans and other post-employment benefit plans as a result of the DWDP Merger.

TDCC and EID had defined benefit pension plans in the United States and a number of other countries.

Subsequent to the DWDP Distributions, the Company retained defined benefit pension plans in a number of other countries but does not have any qualified defined benefit pension plan in the United States.

The Company's funding policy is to contribute to defined benefit pension plans based on pension funding laws and local country requirements.

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Prior to the Dow Distribution, TDCC made discretionary contributions exceeding funding requirements.

In 2018 TDCC contributed $1,656 million to its pension plans, including contributions to fund benefit payments for its non-qualified pension plans.

In the third quarter of 2018, TDCC made $1,100 million discretionary contributions to their principal U.S.

pension plans, which are included in the 2018 contribution amounts above.

The discretionary contributions were based on TDCC's funding policies, which permit discretionary contributions to defined benefit pension plans when economics encourage funding, and reflected considerations relating to tax deductibility and capital structure.

During the three months of 2019, TDCC made contributions of $103 million to TDCC plans that were separated with Dow after the DWDP Distributions.

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Prior to the Corteva Distribution, EID made discretionary contributions exceeding funding requirements.

EID contributed $1,308 million, including discretionary contributions of $1,100 million to its principal U.S.

pension plans in 2018.

These contributions included contributions to fund benefit payments for non-qualified pension plans.

The discretionary contributions were based on EID's funding policies, which permit discretionary contributions to defined benefit pension plans when economics encourage funding, and reflected considerations relating to tax deductibility and capital structure.

During the five months of 2019, EID made $36 million contributions to plans that were separated from the Company in conjunction with the Corteva Distribution.

Restructuring

In October 2021, the Company approved targeted restructuring actions to capture near term cost reductions (the "2021 Restructuring Actions").

At December 31, 2021, total liabilities related to the 2021 Restructuring Actions were $25 million for severance and related benefits.

The Company expects actions related to this program to be substantially complete by the first half of 2022.

In March 2020, the Company approved restructuring actions designed to capture near-term cost reductions and to further simplify certain organizational structures in anticipation of the N&B Transaction.

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Future cash payments related to the 2019 Restructuring Program are anticipated to be $2 million and relate to the payment of severance and related benefits.

In September and November 2017, the Company approved post-merger restructuring actions under the DowDuPont Cost Synergy Program, adopted by the DowDuPont Board of Directors.

The Synergy Program was designed to integrate and optimize the organization following the DWDP Merger and in preparation for the DWDP Distributions whereby the Company has recorded pre-tax restructuring charges attributable to the continuing operations of DuPont of $492 million inception-to-date, consisting of severance and related benefit costs of $213 million, asset related charges of $212 million and contract termination and other charges of $67 million.

In September and November 2017, the Company approved post-merger restructuring actions under the DowDuPont Cost Synergy Program, which was designed to integrate and optimize the organization following the DWDP Merger and in preparation for the DWDP Distributions.

The Company has recorded pre-tax restructuring charges attributable to the continuing operations of DuPont of $342 million inception-to-date, consisting of severance and related benefit costs of $136 million, asset related charges of $159 million and contract termination and other charges of $47 million.

The activities related to the Synergy Program are expected to result in additional cash expenditures of $6 million and relate primarily to the payment of severance and related benefit costs.

Actions associated with the Synergy Program, including employee separations, are considered substantially complete.

See Note 6 to the Consolidated Financial Statements for more information on the Company's restructuring programs.

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Certain Guarantee Contracts

Guarantees arise in the ordinary course of business from relationships with customers and nonconsolidated affiliates when the Company undertakes an obligation to guarantee the performance of others if specific triggering events occur.

Guarantees arise in the ordinary course of business from relationships with nonconsolidated affiliates when the Company undertakes an obligation to guarantee the performance of others if specific triggering events occur.

At December 31, 2021 and December 31, 2020, the Company had directly guaranteed $170 million and $167 million, respectively, of such obligations.

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Over such period, Chemours will deposit a total of $500 million into the account and DuPont and Corteva, together, will deposit an additional $500 million pursuant to the terms of their existing Letter Agreement.

The Company is contractually obligated to make deposits to the escrow account of $50 million no later than September 30, 2021.

As per the terms of the MOU, the Company deposited $50 million to the escrow account on September 30, 2021.

Additional information regarding the MOU and funding of the escrow account can be found in Note 16 to the Consolidated Financial Statements.

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As of December 31, 2021, the Company is contractually obligated to make future cash payments of $191 million related to other miscellaneous obligations, the majority of which is due subsequent to 2022.

In 2021, the Company expects demand to remain strong for semiconductors, smartphones, protective garments, water and residential construction, along with continued improvements in automotive markets.

This anticipated strong demand, along with benefits from our continued cost actions, are expected to drive earnings improvement.

In addition, the Company is expected to benefit from a lower share count resulting from the Exchange Offer and lower interest expense resulting from the pay down of Commercial Paper and the pay down of the Term Loan Facilities and May 2020 Notes, both funded by proceeds from the Special Cash Payment.

RECENT ACCOUNTING PRONOUNCEMENTS

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Management believes that the following represent some of the more critical judgment areas in the application of the Company's accounting policies which could have a material effect on the Company's financial position, liquidity or results of operations.

Pension Plans

Pension Plans and Other Post-Employment Benefits

Accounting for employee benefit plans involves numerous assumptions and estimates.

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Expected rate of return on plan assets 9 (9)

Additional information with respect to pension plans, liabilities and assumptions is discussed under "Long-term Employee Benefits" beginning on page 57 and in Note 19 to the Consolidated Financial Statements.

Additional information with respect to pension plans, liabilities and assumptions is discussed under "Long-term Employee Benefits" and in Note 19 to the Consolidated Financial Statements.

Legal Contingencies

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In making determinations of likely outcomes of litigation matters, management considers many factors.

These factors include, but are not limited to, the nature of specific claims including unasserted claims, the Company's experience with similar types of claims, the jurisdiction in which the matter is filed, input from outside legal counsel, the likelihood of resolving the matter through alternative dispute resolution mechanisms, and the matter's current status.

matter through alternative dispute resolution mechanisms, and the matter's current status.

Considerable judgment is required in determining whether to establish a litigation accrual when an adverse judgment is rendered against the Company in a court proceeding.

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It is reasonably possible that changes to the Company’s global unrecognized tax benefits could be significant;

however, due to the uncertainty regarding the timing of completion of audits and possible outcomes, a current estimate of the range of increases or decreases that may occur within the next twelve months cannot be made.

however, due to the uncertainty regarding the timing of completion of audits and the possible outcomes, a current estimate of the range of increases or decreases that may occur within the next twelve months cannot be made.

Deferred income taxes result from differences between the financial and tax basis of the Company's assets and liabilities and are adjusted for changes in tax rates and tax laws when changes are enacted.

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See Note 8 to the Consolidated Financial Statements for additional details related to the deferred tax liability balance.

Assessments of Long-Lived Assets and Goodwill

The assets and liabilities of acquired businesses are measured at their estimated fair values at the dates of acquisition.

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The determination and allocation of fair value to the assets acquired and liabilities assumed is based on various assumptions and valuation methodologies requiring considerable management judgment, including estimates based on historical information, current market data and future expectations.

The Company’s significant assumptions in these analyses include, but are not limited to, future cash flow projections (with probability weighting applied when applicable), the weighted average cost of capital, the terminal growth rate, and the tax rate for the income approach, and metrics of publicly traded companies or historically completed transactions of comparable businesses for the market approach.

The Company will also apply a weighting to the market approach and income approach to determine the fair value.

When applicable, third party purchase offers may be utilized to measure fair value under the market approach.

Although the estimates are deemed reasonable by management based on information available at the dates of acquisition, those estimates are inherently uncertain.

The principal assumptions in these analyses include, future cash flow projections, the weighted average cost of capital, the terminal growth rate, and the tax rate for the income approach.

For the market approach, the company uses metrics of publicly traded companies or historically completed transactions of comparable businesses.

The estimates are deemed reasonable by management based on information available at the dates of acquisition, however, estimates are i nherently uncertain.

Assessment of the potential impairment of goodwill, other intangible assets, property, plant and equipment, investments in nonconsolidated affiliates, and other assets is an integral part of the Company's normal ongoing review of operations.

Testing for potential impairment of these assets is significantly dependent on numerous assumptions and reflects management's best estimates at a particular point in time.

The dynamic economic environments in which the Company's diversified product lines operate, and key economic and product line assumptions with respect to projected selling prices, market growth and inflation

rates, can significantly affect the outcome of impairment tests.

Estimates based on these assumptions may differ significantly from actual results.

Changes in factors and assumptions used in assessing potential impairments can have a significant impact on the existence and magnitude of impairments, as well as the time in which such impairments are recognized.

Ch anges in factors and assumptions used in assessing potential impairments can have a significant impact on the existence and magnitude of impairments, as well as the time in which such impairments are recognized.

In addition, the Company continually reviews its diverse portfolio of assets to ensure they are achieving their greatest potential and are aligned with the Company's growth strategy.

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Such an assessment could result in impairment losses.

The Company performs goodwill impairment testing at the reporting unit level which is defined as the operating segment or one level below the operating segment.

The Company performs its annual goodwill impairment testing during the fourth quarter at the reporting unit level which is defined as the operating segment or one level below the operating segment.

One level below the operating segment, or component, is a business in which discrete financial information is available and regularly reviewed by segment management.

The Company aggregates certain components into reporting units based on economic similarities.

The Company tests goodwill for impairment annually (during the fourth quarter), or more frequently when events or circumstances indicate it is more likely than not that the fair value of the reporting unit has declined below its carrying value.

As of the date of the annual impairment test, the Company identified twelve reporting units, of which seven have goodwill assigned.

Two of those reporting units were reclassified as held for sale disposal groups as of the date of the annual impairment test.

Of those two reporting units, one has goodwill assigned and is presented in “Assets held for sale” in the Consolidated Balance Sheet.

The held for sale disposal groups are recorded at the lower of carrying amount or fair value less cost to sell each reporting period the disposal group is reclassified as held for sale.

The Company has seven reporting units, of which one reporting unit has no goodwill and is reported within the held-for-sale disposal group.

For purposes of goodwill impairment testing, the Company has the option to first perform qualitative testing to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value .

The qualitative evaluation is an assessment of factors, including reporting unit or asset specific operating results and cost factors, as well as industry, market and macroeconomic conditions, to determine whether it is more likely than not (more than 50%) that the fair value of a reporting unit or asset is less than the respective carrying amount, including goodwill.

If the Company chooses not to complete a qualitative assessment for a given reporting unit or if the initial assessment indicates that it is more likely than not that the carrying value of a reporting unit exceeds its estimated fair value, additional quantitative testing is required.

The qualitative evaluation is an assessment of factors, including reporting unit or asset specific operating results and cost factors, as well as industry, market and macroeconomic conditions, to determine whether it is more likely than not that the fair value of a reporting unit or asset is less than the respective carrying amount, including goodwill.

If the Company chooses not to complete a qualitative assessment for a given reporting unit or if the initial assessment indicates that it is more likely than not that t he carrying value of a reporting unit exceeds its estimated fair value, additional quantitative testing is required.

If additional quantitative testing is performed, an impairment loss is recognized in the amount by which the carrying value of the reporting unit exceeds its fair value, limited to the amount of goodwill at the reporting unit.

The Company determined fair values for each of the reporting units using a combination of the income approach and market approach.

The Company determines fair values for each of the reporting units using a combination of the income approach and market approach.

Under the income approach, fair value is determined based on the present value of estimated future cash flows, discounted at an appropriate risk-adjusted rate.

The Company uses its internal forecasts to estimate future cash flows and includes an estimate of long-term future growth rates based on its most recent views of the long-term outlook for each reporting unit.

The discounted cash flow valuations are completed using the following key assumptions:

projected revenue growth rates;

discount rates;

and terminal values.

The Company applies probability-weighted scenarios to the income approach to determine the concluded fair value of the reporting unit given the uncertainty in the current economic environment to determine the concluded fair value, where applicable.

These key assumptions are determined through evaluation of the Company as a whole and underlying business fundamentals and industry risk.

Actual results may differ from those assumed in the Company’s forecasts.

The Company uses internal forecasts to estimate future cash flows and includes an estimate of long-term future growth rates based on its most recent views of the long-term outlook for each reporting unit.

Discounted cash flow valuations are completed using the following key assumptions:

projected revenue, projected margins, discount rates, tax rates, and terminal values.

These key assumptions are determined through evaluation of the Company as a whole, underlying business fundamentals and industry risk.

The Company derives its discount rates using a capital asset pricing model and analyzing published rates for industries relevant to its reporting units to estimate the cost of equity financing.

The Company uses discount rates that are commensurate with the risks and uncertainty inherent in the respective reporting units and in its internally developed forecasts.

Discount rates used in the Company’s reporting unit valuations ranged from 8% to 9.5%.

Under the market approach, the Company used the Guideline Public Company Method ("GPCM").

The selected peer sets were based on close competitors and reviews of analysts' reports, public filings, and industry research related to firms operating in the respective reporting units industries.

In selecting the EBIT/EBITDA multiples and determining the fair value, the Company considered the size, growth, and profitability of each reporting unit versus the relevant guideline public companies.

Under the market approach, the Company applies the Guideline Public Company Method ("GPCM").

Selected peer sets are based on close competitors, publicly traded companies and reviews of analysts' reports, public filings, and industry research.

In selecting the EBIT/EBITDA multiples and determining the fair value, the Company considers the size, growth, and profitability of each reporting unit versus the relevant guideline public companies.

When applicable, third party purchase offers may be utilized to measure fair value.

Estimating the fair value of reporting units requires the use of estimates and significant judgments that are based on a number of factors including actual operating results.

It is reasonably possible that the judgments and estimates described above could change in future periods.

2020 Interim Goodwill Impairment Testing

During the third quarter of 2020, multiple triggering events occurred requiring the Company to perform impairment analyses associated with its Non-Core segment.

As a result of the analysis performed, the Company recorded pre-tax, non-cash impairment charges related to goodwill of $533 million.

The charges were recognized in "Goodwill impairment charge" in the Consolidated Statements of Operations.

The Company’s analyses above use a combination of the discounted cash flow models (a form of the income approach) utilizing Level 3 unobservable inputs and the market approach.

The Company’s significant assumptions in these analyses include, but are not limited to, future cash flow projections, the weighted average cost of capital, the terminal growth rate, and the tax rate.

The Company’s estimates of future cash flows are based on current regulatory and economic climates, recent operating results, and planned business strategies.

These estimates could be negatively affected by changes in federal, state, or local regulations or economic downturns.

Future cash flow estimates are, by their nature, subjective and actual results may differ materially from the Company’s estimates.

If the Company’s ongoing estimates of future cash flows are not met, the Company may have to record additional impairment charges in future periods.

The Company also uses the Guideline Public Company Method, a form of the market approach (utilizing Level 3 unobservable inputs), which is derived from metrics of publicly traded companies or historically completed transactions of comparable businesses.

The selection of comparable businesses is based on the markets in which the reporting units operate giving consideration to risk profiles, size, geography, and diversity of products and services.

When applicable, third party purchase offers may be utilized to measure fair value.

For further information see Note 13 to the Consolidated Financial Statements.

2020 Annual Goodwill Impairment Testing

In the fourth quarter of 2020, the Company performed its annual goodwill impairment testing by applying the qualitative assessment to four of its reporting units and the quantitative assessment to two of its reporting units.

For the reporting units tested under the qualitative assessment, the Company considered various qualitative factors that would have affected the estimated fair value of the reporting units, and the results of the qualitative assessments indicated that it is not more likely than not that the fair values of the reporting units were less than their carrying values.

For the reporting units tested under the quantitative assessment, the results indicated that, the estimated fair values of the reporting units exceeded their carrying values.

Estimates based on these assumptions may differ significantly from actual results.

Impairment and Disposals of Long-Lived Assets

In the fourth quarter of 2021, the Company performed its annual goodwill impairment testing by applying the qualitative assessment to all of its reporting units.

The Company considered various qualitative factors that would have affected the estimated fair value of the reporting units, and the results of the qualitative assessments indicated that it is not more likely than not that the fair values of the reporting units were less than their carrying values.

As part of the 2021 Segment Realignment, the Company assessed and re-defined certain reporting units effective February 1, 2021, including reallocation of goodwill on a relative fair value basis, as applicable, to reporting units impacted.

A combination of quantitative and qualitative goodwill impairment analyses was then performed for reporting units impacted by this new structure and no impairments were identified.

The Company evaluates the carrying value of long-lived assets (collectively the “asset group”) to be held and used when events or changes in circumstances indicate the carrying value may not be recoverable.

Such reviews are performed in accordance with ASC 360.

The carrying value of a long-lived asset group is considered impaired when the anticipated future undiscounted cash flows to be derived from the asset group over the remaining economic life of the asset group’s primary asset are separately identifiable and are less than its carrying value.

The carrying value of a long-lived asset group is considered impaired when the anticipated future undiscounted cash flows to be derived from the asset group are less than its carrying value.

In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset group.

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Long-lived assets to be disposed of by sale, if material, are classified as held for sale and reported at the lower of carrying amount or fair value less cost to sell, and depreciation is ceased.

Long-lived assets to be disposed of other than by sale are classified as held and used until they are disposed of and reported at the lower of carrying amount or fair value.

Long-lived assets to be disposed of other than by sale are classified as held and used until they are disposed of.

Depreciation is recognized over the remaining useful life of the assets.

Valuation of Acquired Intangible Assets

The Company engaged an independent third-party valuation specialist to assist with the allocation of the total purchase price for the acquisition of Laird Performance Materials to the fair value of the net assets acquired.

This required the use of several assumptions and estimates, including, but not limited to, the customer attrition rate, the discount rate, the royalty rates, the economic life, the EBITDA margin, the contributory asset charge, and the projected revenue for the customer-related intangible asset, the discount rate, the projected revenue, the royalty rate, the obsolescence rate, and the economic life for the developed technology, and the discount rate, the projected revenue, the royalty rate, and the economic life for the trademark/tradename.

Although the Company believes the assumptions and estimates made were reasonable and appropriate, these estimates require significant judgment by management and are based in part on historical experience and information obtained from Laird Performance Materials management.

For further information see Note 3 to the Consolidated Financial Statements.

LONG-TERM EMPLOYEE BENEFITS

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In general, however, improvements in plans' funded status tends to moderate subsequent funding needs.

The Company contributed $28 million, $497 million, and $93 million to its funded pension plans for the years ended December 31, 2020, December 31, 2019, and December 31, 2018, respectively.

The Company contributed $28 million to its funded pension plans for the years ended December 31, 2021 and December 31, 2020, respectively.

The Company contributed $497 million to its funded pension plans for the year ended December 31, 2019.

The Company does maintain one U.S.

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The Company's remaining pension plans with no plan assets are paid from operating cash flows.

The Company made benefit payments of $70 million, $71 million, and $61 million to its unfunded plans for the years ended December 31, 2020, December 31, 2019, and December 31, 2018, respectively.

The Company's OPEB plans are unfunded and the cost is paid from operating cash flows.

Pre-tax cash requirements to cover payments for the Company's OPEB plans was $3 million for the year ended December 31, 2020 and $1 million for the years ended December 31, 2019 and December 31, 2018, respectively.

In 2021, the Company expects to contribute approximately $100 million to its funded pension plans and its remaining plans with no plan assets, and about $6 million for its OPEB plans.

The Company made benefit payments of $60 million, $73 million, and $72 million to its unfunded plans, including OPEB plans, for the years ended December 31, 2021, December 31, 2020, and December 31, 2019, respectively.

In 2022, the Company expects to contribute approximately $90 million to its funded pension plans and its remaining plans with no plan assets.

The amount and timing of actual future contributions will depend on applicable funding requirements, discount rates, investment performance, plan design, and various other factors.

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The above charges (benefit) for pension and OPEB are determined as of the beginning of each period.

See "Pension Plans and Other Post-Employment Benefits" under the Critical Accounting Estimates section beginning on page 53 of this report for additional information on determining annual expense.

For 2021, long term employee benefit expense from continuing operations is expected to decrease by about $20 million.

The decrease is mainly due to lower interest cost and higher expected return on plan assets.

See "Pension Plans and Other Post-Employment Benefits" under the Critical Accounting Estimates section of this report for additional information on determining annual expense.

For 2022, long term employee benefit expense from continuing operations is not expected to change materially as compared to 2021.

ENVIRONMENTAL MATTERS

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Company policy requires that all operations fully meet or exceed legal and regulatory requirements.

In addition, the Company implements voluntary programs to reduce air emissions, minimize the generation of hazardous waste, decrease the volume of water use and discharges, increase the efficiency of energy use and reduce the generation of persistent, bioaccumulative and toxic materials.

Management has noted a global upward trend in the amount and complexity of proposed chemicals regulation.

The costs to comply with complex environmental laws and regulations, as well as internal voluntary programs and goals, are significant and will continue to be significant for the foreseeable future.

The Company has incurred environmental remediation costs of $6 million, $28 million, and $15 million for the years ended December 31, 2020, 2019 and 2018, respectively.

In addition, the Company implements various voluntary programs to reduce its environmental footprint, which includes initiatives to reduce air emissions, minimize the generation of hazardous waste, decrease the volume of water use and discharges, increase the efficiency of energy use, and reduce the generation of persistent, bioaccumulative and toxic materials.

In October 2019 DuPont announced its sustainability strategy and 2030 Sustainability Goals.

The Company’s sustainability strategy and goals prioritize global challenges such as climate change, water stewardship, advancing circular economy and processes, improving health and safety, and more.

With these goals, DuPont is committed to using the Company's strength in innovation to advance progress on several of the United Nations’ Sustainable Development Goals, increasing resiliency and reducing environmental and social impacts across value chains, and ensuring people are put at the center of all the Company's work.

Executive responsibility for overall sustainability performance sits with the Chief Technology & Sustainability Officer (the “CTSO”).

The CTSO role was created specifically for DuPont to capitalize on the intrinsic link between sustainability and innovation in the Company’s operating model.

The CTSO reports directly to the CEO, and routinely engages the Environmental, Health, Safety & Sustainability (EHS&S) Committee of the Board of Directors on matters of sustainability.

DuPont’s sustainability initiatives and strategy are discussed further in its 2021 Sustainability Report, which is available under Sustainability in the "About Us" section of its website;

this report is not incorporated by reference and should not be considered part of this Form 10-K.

The costs to comply with complex environmental laws and regulations, as well as internal voluntary programs and goals, such as DuPont’s sustainability strategy, are significant and will continue to be significant for the foreseeable future.

Based on existing facts and circumstances, management does not believe that year-over-year changes, if any, in environmental expenses charged to current operations will have a material impact on the Company's financial position, liquidity or results of operations.

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Longer term, expenditures are subject to considerable uncertainty and may fluctuate significantly.

Climate Change

The Company believes that climate change is an important global environmental issue that presents risks and opportunities.

The Company is continuously evaluating opportunities for existing and new product and service offerings to meet the anticipated demands of a low-carbon economy.

As part of DuPont’s sustainability strategy, the Company announced an Acting on Climate Goal.

The objective of the Acting on Climate goal is to reduce the Company’s greenhouse gas (GHG) emissions by 30 percent, measured from a base year of 2019, including sourcing 60 percent of electricity for operations from renewable energy and delivering carbon neutral operations by 2050.

DuPont reports on its progress against these goals in its annual sustainability report.

In 2022, the Company plans to include its inaugural TCFD Index in its Sustainability Report and additional climate-related disclosure in its response to the CDP Climate survey.

In line with the objectives of the Acting on Climate goal, DuPont signed a virtual power purchase agreement (the “VPPA”) with a subsidiary of NextEra Energy Resources, LLC in 2021.

The VPPA will deliver the equivalent of 135 megawatts of new wind power capacity or approximately 528,000 megawatt hours (MWh) of renewable electricity on an annual basis beginning in 2023.

The Company is actively engaged in efforts to develop constructive public policies to reduce GHG emissions and encourage lower-carbon forms of energy.

DuPont is part of several organizations, including the CEO Climate Dialogue, a collaboration between large companies and NGOs working together to advance effective climate legislation in the US.

DuPont is also part of the Alliance to Save Energy, which is an organization advocating to advance federal energy efficiency policy, as well as other organizations that advocate for clean mobility and renewable fuel.

Public policies may bring higher operating costs as well as greater revenue and margin opportunities.

Legislative efforts to control or limit GHG emissions could affect the Company's energy source and supply choices as well as increase the cost of energy and raw materials derived from fossil fuels.

Such efforts are also anticipated to provide the business community with greater certainty for the regulatory future, help guide investment decisions, and drive growth in demand for low-carbon and energy-efficient products, technologies, and services.

Similarly, demand is expected to grow for products that facilitate adaptation to a changing climate.

However, the current unsettled policy environment in the U.S., where many company facilities are located, adds an element of uncertainty to business decisions, particularly those relating to long-term capital investments.

In addition, significant differences in regional or national approaches could present challenges in a global marketplace.

An effective global climate policy framework will help drive the market changes that are needed to stimulate and efficiently deploy new innovations in science and technology, while maintaining open and competitive global markets.

Environmental Operating Costs

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The Company also incurs costs related to environmental related research and development activities including environmental field and treatment studies as well as toxicity and degradation testing to evaluate the environmental impact of products and raw materials.

Remediation Accrual

Environmental Remediation

The Company has directly incurred environmental remediation costs of $14 million, $6 million, and $28 million for the years ended December 31, 2021, 2020 and 2019, respectively.

Changes in the remediation accrual balance are summarized below:

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Capital expenditures for environmental projects, either required by law or necessary to meet the Company’s internal environmental goals, were $40 million for the year ended December 31, 2021.

The Company currently estimates expenditures for environmental-related capital projects to be approximately $48 million in 2021.

Climate Change

The Company believes that climate change is an important global issue that presents risks and opportunities.

For instance, the Company continuously evaluates opportunities for existing and new product and service offerings to meet the anticipated demands of a low-carbon economy.

In 2019, the Company announced nine new sustainability goals, including an Acting on Climate goal to achieve a 30 percent reduction in absolute greenhouse gas (GHG) emissions by 2030 and carbon neutral operations by 2050.

DuPont reports on its progress against these goals in its annual sustainability report.

The Company is actively engaged in efforts to develop constructive public policies to reduce GHG emissions and encourage lower-carbon forms of energy.

Such policies may bring higher operating costs as well as greater revenue and margin opportunities.

Legislative efforts to control or limit GHG emissions could affect the Company's energy source and supply choices as well as increase the cost of energy and raw materials derived from fossil fuels.

Similarly, demand is expected to grow for products that facilitate adaptation to a changing climate.

In addition, significant differences in regional or national approaches could present challenges in a global marketplace.

Sustainability

In October 2019, DuPont announced its fifth-generation sustainability strategy — nine ambitious priorities that reflect the Company's best opportunity to make a positive impact in the world while advancing our business objectives.

The ten-year strategy prioritizes global challenges such as climate change, water stewardship, advancing circular economy and processes, improving health and safety, and more.

With these goals, DuPont committed to using the Company's strength in innovation to advance progress on several of the United Nations’ Sustainable Development Goals (SDGs), increasing resiliency and reducing environmental and social impacts across value chains, and ensuring people are put at the center of all our work.

This amount includes $11 million of expenditures used towards the Company's climate change initiatives.

The Company currently estimates expenditures for environmental-related capital projects to be approximately $48 million in 2022, with $19 million estimated for climate change initiatives.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis