What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2025-02-14 compared with 2024-02-15 · 216 added, 287 removed, 491 unchanged (51% of the section changed)

13 unchanged sentences

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.

Intended Electronics Separation

On May 22, 2024, DuPont announced a plan to separate each of its Electronics and Water businesses in a tax-free manner to its shareholders, (the “Previously Intended Business Separations”).

On January 15, 2025, DuPont announced it is targeting November 1, 2025, for the completion of the intended separation of the Electronics business (the “Intended Electronics Separation”).

DuPont also announced that it would retain the Water business.

The Intended Electronics Separation will not require a shareholder vote and is subject to satisfaction of customary conditions, including final approval by DuPont's Board of Directors, receipt of tax opinion from counsel, the filing and effectiveness of a Form 10 registration statement with the U.S.

Securities and Exchange Commission, applicable regulatory approvals and satisfactory completion of financing.

Mobility & Materials Divestitures

9 unchanged sentences

The Delrin® Divestiture together with the M&M Divestiture (collectively the "M&M Divestitures" and the businesses in scope for the M&M Divestitures collectively the "M&M Businesses") represent a strategic shift that has a major impact on DuPont's operations and results.

The financial position of DuPont as of December 31, 2022 presents the assets and liabilities of the Delrin® Divestiture as held for sale, presented as discontinued operations.

The results of operations for the year ended December 31, 2023 present the financial results of the Delrin® Divestiture through the November 1, 2023 transaction date, as discontinued operations.

In the comparative period, the results of operations for the years ended December 31, 2022 and 2021 present the financial results of the M&M Businesses as discontinued operations.

For the year ended December 31, 2023, the Consolidated Statements of Cash Flows present the cash flows of the Delrin® Divestiture as discontinued operations.

In the comparative period, the cash flows for the years ended December 31, 2022 and 2021 present the financial results of the M&M Businesses as discontinued operations.

In the comparative period, the results of operations for the year ended December 31, 2022 present the financial results of the M&M Businesses as discontinued operations.

For the year ended December 31, 2023, the Consolidated Statements of Cash Flows present the cash flows of the Delrin® Divestiture as

discontinued operations.

In the comparative period, the cash flows for the year ended December 31, 2022 present the financial results of the M&M Businesses as discontinued operations.

The comprehensive income of the M&M Businesses have not been segregated and are included in the Consolidated Statements of Comprehensive Income, respectively, for all periods presented.

3 unchanged sentences

The Retained Businesses are included in Corporate & Other.

Donatelle Plastics Acquisition

On July 28, 2024, DuPont completed the acquisition of Donatelle Plastics, LLC ("Donatelle Plastics"), for a net purchase price of $365 million (the "Donatelle Plastics Acquisition") which includes immaterial adjustments for acquired cash and net working capital.

The net purchase price also includes the estimated fair value for a contingent earn-out liability of $40 million.

Donatelle Plastics is a medical device company specializing in the design, development and manufacture of medical components and devices.

Donatelle Plastics part of Industrial Solutions within the Electronics & Industrial segment.

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

Spectrum Acquisition

1 unchanged sentence

Spectrum manufactures flexible packaging products, plastic and silicone extrusions, and components for the industrial, food and medical business sectors throughout the United States and international markets.

Spectrum is being integrated into the Electronics & Industrial segment.

Spectrum is part of the Electronics & Industrial segment.

The net purchase price was approximately $1,781 million, including a net upward adjustment of approximately $43 million for acquired cash and net working capital, among other items.

1 unchanged sentence

Terminated Intended Rogers Acquisition

On November 1, 2022, the Company announced the termination of the previously announced agreement to acquire the outstanding shares of Rogers Corporation (“Rogers”) as DuPont and Rogers were unable to obtain timely clearance from all the required regulators ("Terminated Intended Rogers Acquisition").

N&B Transaction

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

(“IFF”) 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 comprehensive income related to N&B has not been segregated and are included in the Consolidated Statements of Comprehensive Income 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 N&B.

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

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 $2.4 billion, which reflects adjustments, primarily for acquired cash and net working capital.

Laird PM has been integrated into the Electronic & Industrials segment.

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

Other Divestitures

2 unchanged sentences

In May 2022, a pre-tax gain of $26 million ($21 million net of tax) was recorded in "Sundry income (expense) - net" in the Company's Consolidated Statements of Operations.

The results of operations of the Biomaterials business unit are reported in Corporate & Other for 2021 and 2022.

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

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 & Other.

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.

The results of operations of the Biomaterials business unit are reported in Corporate & Other for 2022.

ANALYSIS OF OPERATIONS

Macroeconomic Conditions

In 2023, DuPont continued to experience the impact of macroeconomic factors primarily involving channel inventory destocking and slower industrial demand in China.

The ultimate extent to which these macroeconomic factors will continue to impact DuPont's results is not known.

The global economy has been impacted in recent years by supply chain disruptions and inflationary cost pressures as well as the military conflict between Russia and Ukraine and the COVID-19 pandemic.

In 2022, the Company exited substantially all business operations in Russia and the Company does not have operations in the Ukraine.

The military conflict in the Ukraine did not have a significant impact on results in 2023.

The COVID-19 pandemic is not expected to have a significant impact on the Company's businesses globally in the foreseeable future.

Joint Settlement Agreement

2 unchanged sentences

As of December 31, 2024, the Company has recorded an indemnification liability of $222 million in connection with the cost sharing arrangement related to future eligible PFAS costs.

Total pre-tax charges of $487 million and $96 million related to the MOU are reflected as a loss from discontinued operations for the year ended December 31, 2023 and 2022, respectively, in the Company's Consolidated Statements of Operations.

The pre-tax charges for the year ended December 31, 2023, are primarily driven by the definitive agreement reached in June 2023 by Chemours, Corteva, EIDP and DuPont to comprehensively resolve all PFAS-related claims of a defined class of U.S.

public water systems, (the “Water District Settlement Agreement”) for $1.185 billion in cash to be paid to a Qualified Settlement Fund, (the “Water District Settlement Fund”) of which DuPont is responsible for $400 million.

DuPont’s $400 million contribution was made in the third quarter 2023 and is reflected in “Restricted cash and cash equivalents “on the Consolidated Balance Sheets as of December 31, 2023.

The increase in pre-tax charges also reflects the agreement by Chemours, Corteva and DuPont with the State of Ohio in which the three companies agreed to pay $110 million of which DuPont’s portion is $39 million.

The Ohio agreement triggers a supplemental payment of $25 million to the State of Delaware related to an agreement reached in 2021 of which the Company’s portion is $9 million.

Total pre-tax charges of $46 million, $487 million and $96 million related to the MOU are reflected as a loss from discontinued operations for the year ended December 31, 2024, 2023 and 2022, respectively, in the Company's Consolidated Statements of Operations.

The increase in pre-tax charges for the year ended December 31, 2023, are primarily driven by the definitive agreement reached in June 2023 by Chemours, Corteva, EIDP and DuPont to comprehensively resolve all PFAS-related claims of a defined class of U.S.

public water systems, (the “Water District Settlement Agreement”) for $1.185 billion in cash to be paid to a Qualified Settlement Fund, (the “Water District Settlement Fund”).

DuPont’s contribution of $400 million to the Water District Settlement Fund was made in the third quarter 2023 and is reflected in “Restricted cash and cash equivalents “on the Consolidated Balance Sheets as of December 31, 2023.

The Company’s total contribution, including interest, of $408 million has been removed from "Restricted cash and cash equivalents - current" along with the associated "Accrued and other current liabilities" within the Consolidated Balance Sheets as of December 31, 2024, as the settlement became final in the second quarter 2024.

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

Long-Lived Asset and Indefinite-Lived Asset Impairments

In connection with the M&M Divestitures, in the first quarter of 2022 a portion of an equity method investment was reclassified to “Assets of discontinued operations” within the Consolidated Balance Sheets.

The reclassification served as a triggering event requiring the Company to perform an impairment analysis on the retained portion of the equity method investment held within “Investments and noncurrent receivables” on the Consolidated Balance Sheets.

As a result of the analysis the Company recorded an impairment charge of $94 million ($65 million net of tax) in “Restructuring and asset related charges - net” in the Consolidated Statements of Operations for the year ended December 31, 2023 related to the Electronics & Industrial segment.

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

During 2024, the Board of Directors authorized and paid quarterly dividends of $0.38 per share to shareholders of record in the first, second, third and fourth quarters, respectively.

The DuPont Board of Directors on February 5, 2024 declared a first quarter 2024 dividend of $0.38 per share, a 6 percent per share increase versus the first quarter 2023 dividend, payable on March 15, 2024, to holders of record at the close of business on February 29, 2024.

Share Buyback Program

In February 2022, the Company's Board of Directors authorized a $1.0 billion share buyback program, with an expiration date in March 2023.

At the end of the third quarter 2022, the Company had repurchased and retired a total of 11.9 million shares for $750 million under the 2022 Share Buyback Program, with $250 million remaining on the authorization.

The remaining $250 million was completed in 2022 as part of the Company's $3.25B ASR Transaction discussed below.

On November 7, 2022, DuPont’s Board of Directors approved a new share repurchase program authorizing the repurchase and retirement of up to $5 billion of common stock (the "$5B Share Buyback Program") in addition to the $250 million remaining under the Company’s 2022 Share Buyback Program.

The new repurchase program expires on June 30, 2024, unless extended or shortened by the Board of Directors.

On November 10, 2022, DuPont entered into an accelerated share repurchase ("ASR") transaction with three financial counterparties for the repurchase of an aggregate of approximately $3.25 billion (the "$3.25B ASR Transaction").

In accordance with the terms of the agreements with the counterparties, DuPont received initial deliveries of 38.8 million shares in the aggregate, which were retired immediately and were recorded as a reduction to retained earnings.

The $3.25B ASR transaction was funded with cash on hand from the M&M Divestiture.

In connection with the completion of the transaction, the remaining $613 million was settled as a forward contract indexed to DuPont common stock at the time of settlement, classified within stockholders’ equity.

At the completion of the $3.25B ASR Transaction, the Company had repurchased and retired a total of 46.8 million shares at an average price of $69.44 per share.

In the third quarter 2023, DuPont entered into an ASR agreement with three financial counterparties to repurchase an aggregate of $2.0 billion of common stock (the "$2B ASR Transaction").

DuPont paid an aggregate of $2.0 billion to the counterparties and received initial deliveries of 21.2 million shares in aggregate of DuPont common stock, which were retired immediately and recorded as a reduction to retained earnings of $1.6 billion.

The remaining $400 million was evaluated as an unsettled forward contract indexed to DuPont common stock, classified within stockholders’ equity as of December 31, 2023.

Subsequent to year end, in the first quarter of 2024, the accelerated share repurchase agreements under the $2B ASR Transaction were settled.

The settlement resulted in the delivery of 6.7 million additional shares of DuPont common stock, which were retired immediately and will be recorded as a reduction to retained earnings in the first quarter of 2024.

In total, the Company repurchased 27.9 million shares at an average price of $71.67 per share under the $2B ASR Transaction.

The completion of the $2B ASR Transaction completes the $5B Share Buyback Program and the Company's stock repurchase authorization.

Subsequent to year end, in the first quarter 2024, the Company’s Board of Directors approved a new share repurchase program authorizing the repurchase and retirement of up to $1 billion of common stock (“the $1B Program”).

Under the $1B Program, repurchases may be made from time to time on the open market at prevailing market prices or in privately negotiated transactions off market, including additional ASR agreements in accordance with applicable federal securities laws.

The Company completed its share buyback programs that were open in 2022 and 2023.

In the first quarter 2024, the Company’s Board of Directors approved a new share repurchase program authorizing the repurchase and retirement of up to $1 billion of common stock (the "$1B Share Buyback Program”).

Under the $1B Share Buyback Program, repurchases may be made from time to time on the open market at prevailing market prices or in privately negotiated transactions off market, including additional ASR agreements in accordance with applicable federal securities laws.

The $1B Program terminates on June 30, 2025, unless extended or shortened by the Board of Directors.

The timing and number of shares to be repurchased will depend on factors such as the share price, economic and market conditions, and corporate and regulatory requirements.

In the first quarter 2024, DuPont entered an ASR agreement with one counterparty for the repurchase of about $500 million of common stock;

DuPont received initial deliveries in February 2024, of 6 million shares of common stock.

The final number of shares to be repurchased will be based on the volume-weighted average stock price for DuPont common stock during the term of the ASR agreement, less an agreed upon discount.

Final settlement is expected in the second quarter of 2024.

In the first half of 2024, the Company entered and completed a $500 million ASR transaction under the $1B Share Buyback Program.

In total, the Company repurchased 6.9 million shares at an average price of $71.96 per share under the Q1 2024 ASR Transaction.

In connection with the Previously Intended Separations and continuing in light of the Intended Electronics Separation, DuPont announced its intent not to complete the remaining $500 million in share buyback authority under the $1B Share Buyback program.

See the discussion under Liquidity and Capital Resources starting on page 47 for more information.

The Inflation Reduction Act of 2022 introduced a 1 percent nondeductible excise tax imposed on the net value of certain stock repurchases made after December 31, 2022.

The net value is determined by the fair market value of the stock repurchased during the tax year, reduced by the fair market value of stock issued during the tax year.

The Company recorded total excise tax of $21.2 million as a reduction to retained earnings for the year ended December 31, 2023.

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

In the first quarter of 2022, the Company purchased 5.1 million shares for approximately $375 million, thereby completing the program.

At the expiry of the 2021 Share Buyback Program, the Company had repurchased and retired a total of 19.6 million shares for $1.5 billion under the 2021 Share Buyback Program.

The Company recorded total excise tax of $8 million and $21 million, respectively, as a reduction to retained earnings for the years ended December 31, 2024 and 2023, reflected within stockholders' equity and a corresponding liability within "Accounts Payable" in our Consolidated Balance Sheets as of December 31, 2024 and 2023.

Interest Rate Swap Agreements

In the second quarter of 2022, the Company entered into fixed-to-floating interest rate swap agreements with an aggregate notional principal amount totaling $1 billion to hedge changes in the fair value of the Company's long-term debt due to interest rate change movements.

These swaps converted the $1 billion of the Company's $1.65 billion principal amount of fixed rate notes due 2038 into floating rate debt for the portion of their terms through 2032 with an interest rate based on the Secured Overnight Finance Rate (SOFR).

In the second quarter of 2022, the Company entered into fixed-to-floating interest rate swap agreements ("2022 Swaps") with an aggregate notional principal amount totaling $1 billion to hedge changes in the fair value of the Company’s long-term debt due to interest rate change movements.

These swaps converted $1 billion of the Company’s $1.65 billion principal amount of fixed rate notes due 2038 into floating rate debt for the portion of their terms through 2032 with an interest rate based on the Secured Overnight Financing Rate ("SOFR").

Under the terms of the agreements, the Company agrees to exchange, at specified intervals, fixed for floating interest amounts based on the agreed upon notional principal amount.

The interest rate swaps are designated as fair value hedges and expire on November 15, 2032.

For more information see Note 21 to the Consolidated Financial Statements.

The 2022 Swaps expire on November 15, 2032 and are carried at fair value.

Since inception of the 2022 Swaps, fair value hedge accounting has been applied and thus, changes in the fair value of the 2022 Swaps and changes in the fair value of the related hedged portion of long-term debt were presented and net to zero in "Sundry income (expense) – net" in the Consolidated Statements of Operations.

On June 5, 2024, DuPont issued a notice of redemption to the bond trustee with respect to a partial redemption of $650 million aggregate principal amount of its 2038 Notes in accordance with their terms.

The redemption was effective on June 15, 2024.

As a result of the announced redemption, the Company dedesignated the then current hedging relationship.

At the time of dedesignation, the total amount recorded as a cumulative fair value basis adjustment on the 2038 Notes was a loss of $81 million of which $32 million was recognized as a component of the loss from partial extinguishment of debt.

The remaining basis adjustment is amortized to interest expense over the remaining term of the 2038 Notes.

The basis adjustment amortization for the year December 31, 2024 was $1 million.

Refer to Note 15 for additional details on the partial redemption of the 2038 Notes.

In June 2024, the Company entered into two forward-starting fixed-to-floating interest rate swap agreements (“2024 Swaps”) to hedge the changes in the fair value of the Company’s long-term debt due to interest rate change movements.

One swap converted $2.15 billion principal amount of the fixed rate notes due 2048 into floating rate debt for the portion of their terms from 2025 through 2048 with an interest rate based on SOFR.

The other swap converted $1 billion principal amount of the 2038 Notes into floating rate debt for the portion of their terms from 2032 through 2038 with an interest rate based on SOFR.

The 2024 Swaps have a mandatory early termination date of December 15, 2025 and are carried at fair value.

Fair value hedge accounting has not been applied.

The 2022 Swaps and 2024 Swaps are considered economic hedges of the Company’s fixed rate debt.

As such, changes in the fair value and gain or loss from net interest settlement of the 2022 Swaps after the date of dedesignation and changes in the fair value of the 2024 Swaps since inception have been recorded in “Sundry income (expense) – net” in the Consolidated Statements of Operations.

The amount charged related to interest rate swaps not designated as hedges was a loss of $138 million and zero for the years December 31, 2024 and 2023, respectively.

Restructuring Programs

1 unchanged sentence

In December 2023, the Company approved targeted restructuring actions to capture near-term cost reductions due to macroeconomic factors as well as to further simplify certain organizational structures following the Spectrum acquisition and Delrin® Divestiture (the "2023-2024 Restructuring Program").

For the year ended December 31, 2023, DuPont recorded a pre-tax charge related to the 2023-2024 Restructuring Program in the amount of $110 million, recognized in "Restructuring and asset related charges - net" in the Company's Consolidated Statements of Operations, comprised of $80 million of severance and related benefit costs and asset related charges of $30 million.

DuPont recorded a pre-tax charge related to the 2023-2024 Restructuring Program in the amount of $199 million inception-to-date, recognized in "Restructuring and asset related charges - net" in the Company's Consolidated Statements of Operations, comprised of $114 million of severance and related benefit costs and asset related charges of $85 million.

At December 31, 2024, total liabilities related to the 2023-2024 Restructuring Program were $47 million for severance and related benefit costs, recognized in "Accrued and other current liabilities" in the Consolidated Balance Sheets.

4 unchanged sentences

The 2022 Restructuring Program is considered substantially complete.

2021 Restructuring Actions

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

DuPont recorded pre-tax charges related to the 2021 Restructuring Actions in the amount of $47 million inception-to-date, consisting of severance and related benefit costs of $27 million and asset related charges of $20 million.

At December 31, 2023, total liabilities related to the 2021 Restructuring Actions were $1 million for severance and related benefits.

The 2021 Restructuring Program is considered substantially complete.

RESULTS OF OPERATIONS

19 unchanged sentences

2024 versus 2023

The Company reported net sales for the year ended December 31, 2024 of $12.4 billion, up 3 percent from $12.1 billion for the year ended December 31, 2023, due to a 2 percent increase in volume and a 3 percent increase in portfolio partially offset by 1 percent decreases due to local price and product mix as well as currency.

The volume increase was driven by Electronics & Industrial (up 8 percent) partially offset by Water & Protection (down 2 percent) and Corporate & Other (down 3 percent).

Portfolio and other changes increased by 3 percent compared to the same period last year, driven by Electronics & Industrial (up 6 percent), partially offset by Corporate & Other (down 1 percent).

Local price and product mix decreased within Electronics & Industrial (down 2 percent), Water & Protection (down 1 percent) and Corporate & Other (down 1 percent).

The 1 percent decrease in currency was driven by Asia Pacific (down 2 percent).

2023 versus 2022

The Company reported net sales for the year ended December 31, 2023 of $12.1 billion, down 7 percent from $13.0 billion for the year ended December 31, 2022, due to an 8 percent decrease in volume and a 1 percent unfavorable currency impact partially offset by a 2 percent increase due to local price and product mix.

Volume decrease was driven by Electronics & Industrial (down 11 percent) and Water and Protection (down 7 percent) partially offset by Corporate & Other (up 2 percent).

Local price and product mix increased within Water & Protection (up 3 percent) and Corporate & Other (up 1 percent) and reminded flat in Electronics & Industrial.

Local price and product mix increased within Water & Protection (up 3 percent) and Corporate & Other (up 1 percent) and remained flat in Electronics & Industrial.

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

2022 versus 2021

The Company reported net sales for the year ended December 31, 2022 of $13.0 billion, up 4 percent from $12.6 billion for the year ended December 31, 2021, due to a 7 percent increase due to local price and product mix, a 1 percent increase in volume, partially offset by a 3 percent unfavorable currency impact and a 1 percent decrease in portfolio and other.

Local price and product mix increased across all operating segments, including within Water & Protection (up 12 percent), Electronics & Industrial (up 2 percent) and Corporate & Other (up 10 percent).

Volume increase was driven by Electronics & Industrial (up 3 percent) partially offset by Water & Protection (down 1 percent), and Corporate & Other was flat.

Portfolio and other changes declined 1 percent driven by declines within Corporate & Other (down 29 percent) due to the sale of the Biomaterials, Clean Technologies and Solamet® businesses, partially offset by the addition of Laird PM in Electronics & Industrial (up 5 percent).

Currency was down 3 percent compared with the same period last year, primarily driven by EMEA (down 8 percent) and Asia Pacific (down 4 percent).

Cost of Sales

Cost of sales was $7.8 billion for the year ended December 31, 2023, down from $8.4 billion for the year ended December 31, 2022.

Cost of sales decreased for the year ended December 31, 2023 primarily due to decreased sales volume and lower raw material, logistics and energy costs.

Cost of sales as a percentage of net sales for the years ended December 31, 2023 and 2022 was 65 percent.

For the year ended December 31, 2022, cost of sales was $8.4 billion, up from $8.0 billion for the year ended December 31, 2021.

Cost of sales increased for the year ended December 31, 2022 primarily due to higher raw materials and higher logistics and energy costs, increased sales volume and partially offset by currency impacts and a payroll tax credit recognized under the ERC of the CARES Act.

Cost of sales was $7.9 billion for the year ended December 31, 2024, up from $7.8 billion for the year ended December 31, 2023.

Cost of sales increased for the year ended December 31, 2024 primarily due to increased sales volume mostly offset by lower raw material, logistics and energy costs.

Cost of sales as a percentage of net sales for the year ended December 31, 2024 was 64 percent compared with 65 percent for the year ended December 31, 2023.

For the year ended December 31, 2023, cost of sales was $7.8 billion, down from $8.4 billion for the year ended December 31, 2022.

Cost of sales decreased for the year ended December 31, 2023 primarily due to decreased sales volume and lower raw material, logistics and energy costs.

Cost of sales as a percentage of net sales for the years ended December 31, 2023 and December 31, 2022 was 65 percent.

Research and Development Expense ("R&D")

R&D expense was $508 million for the year ended December 31, 2023, down from $536 million for the year ended December 31, 2022 and $557 million for the year ended December 31, 2021.

R&D expense was $531 million for the year ended December 31, 2024, up from $508 million for the year ended December 31, 2023 and $536 million for the year ended December 31, 2022.

R&D as a percentage of net sales was 4 percent for the years ended December 31, 2024, 2023 and 2022.

The increase in 2024 compared to 2023 was primarily due to higher variable compensation.

The decrease in R&D expense in 2023 compared to 2022 was primarily due to lower personnel related expenses partially offset by the Spectrum Acquisition.

The slight decline in 2022 compared to 2021 was primarily due to a payroll tax credit recognized under the ERC of the CARES Act as well as currency fluctuations.

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

For the year ended December 31, 2023, SG&A expenses totaled $1,408 million, down from $1,467 million in the year ended December 31, 2022 and $1,602 million for the year ended December 31, 2021.

For the year ended December 31, 2024, SG&A expenses totaled $1,552 million, up from $1,408 million in the year ended December 31, 2023 and $1,467 million for the year ended December 31, 2022.

SG&A as a percentage of net sales was 13 percent, 12 percent, and 11 percent for the years ended December 31, 2024, 2023 and 2022, respectively.

The increase in SG&A cost in 2024 compared to 2023 was primarily due to higher variable compensation and incremental cost from the Spectrum and Donatelle acquisitions.

The decrease in SG&A costs in 2023 compared with 2022 was primarily due to lower Stranded Costs related to the M&M Divestiture, lower personnel related expenses and lower bad debt expense partially offset by the Spectrum Acquisition.

The decrease in SG&A cost in 2022 compared to 2021 was primarily due to currency fluctuations, lower personnel related expenses and a payroll tax credit recognized under the ERC of the CARES Act.

Amortization of Intangibles

Amortization of intangibles was $595 million, $600 million and $590 million for the years ended December 31, 2024, 2023 and 2022, respectively.

The slight decrease in amortization of intangibles in 2024 compared to 2023 was primarily due to absence of amortization in 2024 from fully amortized assets.

The increase in amortization of intangibles in 2023 compared to 2022 was primarily due to the amortization of the intangible assets acquired in the Spectrum Acquisition in the third quarter of 2023 partially offset by the absence of amortization in 2023 from fully amortized assets.

The increase in amortization of intangibles in 2022 compared to 2021 was primarily due to the amortization of the intangible assets acquired in the Laird PM Acquisition in the third quarter of 2021.

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

1 unchanged sentence

Restructuring and asset related charges - net were $87 million, $146 million and $155 million for the years ended December 31, 2024, 2023 and 2022, respectively.

The activity for the year ended December 31, 2023 DuPont recorded a pre-tax charge related to the 2023-2024 Restructuring Program in the amount of $110 million .

For the years ended December 31, 2024 and 2023, DuPont recorded a pre-tax charge related to the 2023-2024 Restructuring Program in the amount of $89 million and $110 million, respectively .

The activity for the year ended December 31, 2022 included a pre-tax charge related to the 2022 Restructuring Program in the amount of $61 million of severance and related benefit costs and a $94 million ($65 million net of tax) impairment related to an equity method investment within the Electronics & Industrial segment.

The charges for the year ended December 31, 2021 included a $46 million charge related to the 2021 Restructuring Actions.

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

Inventory write-offs associated with restructuring programs are recorded to "Cost of Sales” in the Consolidated Statements of Operations.

Goodwill Impairment Charges

For the year ended December 31, 2023, goodwill impairment charges of $804 million related to the Water & Protection segment.

For the years ended December 31, 2024 and 2022, there were no goodwill impairment charges.

For the year ended December 31, 2023, there was a goodwill impairment charge of $804 million related to the Water & Protection segment.

Acquisition, Integration and Separation Costs

1 unchanged sentence

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

For the year ended December 31, 2024, these costs were primarily related to the Previously Intended Business Separations, including the Intended Electronics Separation.

For the year ended December 31, 2023, these costs were primarily related to Spectrum Acquisition.

For the year ended December 31, 2022 these costs were primarily related to the Terminated Intended Rogers Acquisition, specifically the $162.5 million termination fee paid, the Biomaterials business unit divestiture and the prior year acquisition of Laird PM.

Comparatively, for the year ended December 31, 2021 these costs were primarily associated with the acquisition of Laird PM and the divestitures of the Biomaterials, Clean Technologies and Solamet® business units.

For the year ended December 31, 2022, these costs were primarily related to the Terminated Intended Rogers Corporation Acquisition, specifically the $162.5 million termination fee paid, the Biomaterials business unit divestiture and the Laird PM acquisition in 2021.

Equity in Earnings of Nonconsolidated Affiliates

The Company's share of the earnings of nonconsolidated affiliates was $60 million, $51 million and $75 million for the years ended December 31, 2024, 2023 and 2022, respectively.

The decrease in earnings of nonconsolidated affiliates for the year ended December 31, 2023 and 2022 compared to the prior years is primarily due to lower equity earnings.

The increase in earnings of nonconsolidated affiliates for the year ended December 31, 2024 and 2023 compared to the prior years is primarily due to higher earnings in the underlying nonconsolidated affiliates.

Sundry Income (Expense) - Net

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 divestiture and 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, 2023 was $102 million compared with $191 million and $145 million in the years ended December 31, 2022 and 2021, respectively.

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, losses on debt extinguishments and assets, non-operating pension and other post-employment benefit plan credits or costs, interest rate swap mark-to-market adjustments, interest rate swap net interest settlement and certain litigation matters.

Sundry income (expense) - net for the year ended December 31, 2024 was $76 million of expense compared with $102 million and $191 million of income in the years ended December 31, 2023 and 2022, respectively.

The year ended December 31, 2024 included a $138 million net loss related to interest rate swap activity including mark-to-market adjustments and a $74 million loss on debt extinguishment partially offset by $73 million of interest income.

The decrease in interest income period over period is due to the decreased cash balance in 2024.

The year ended December 31, 2023 included interest income of $155 million and a $19 million net gain on divestiture and sales of other assets, primarily related to a land sale within the Water & Protection segment, partially offset by foreign currency exchange losses of $73 million.

The year ended December 31, 2022 included interest income of $50 million primarily due to higher cash on hand and marketable securities in the fourth quarter, income of $37 million related to the second quarter sale of a land use right within the Water & Protection segment, a $26 million gain on sale of the Biomaterials business unit recorded in the second quarter, income related to non-operating pension and other post-employment benefit plans of $28 million and foreign currency exchange gains of $15 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 & Other, 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 $30 million, partially offset by foreign currency exchange losses of $53 million, and miscellaneous expenses of $15 million.

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

1 unchanged sentence

Interest expense was $366 million, $396 million, and $492 million for the years ended December 31, 2024, 2023 and 2022, respectively.

The decrease in interest expense from the 2023 compared to 2022, is primarily due to the redemption of $2.5 billion fixed-rate long-term senior unsecured notes due in November 2023, the decrease in commercial paper borrowing and the absence of the structuring and the commitment fees on term loans related to the Terminated Intended Rogers Acquisition, partially offset by the increase in interest expense from the interest rate swap.

The decrease in interest expense in 2022 compared to 2021 is primarily due to the redemption in the fourth quarter of 2022 of $2.5 billion of 2018 Senior Notes due in November 2023, the absence of interest in 2022 on the May 2022 Notes and the absence of the structuring fee on the term loan related to the Terminated Intended Rogers Acquisition, partially offset by increase in interest expense from commercial paper borrowings.

The decrease in interest expense in 2024 compared to 2023 is primarily due to the absence of interest expense on the $300 million floating-rate long-term senior unsecured notes that matured in November 2023 and the partial redemption of $650 million aggregate principal amount of the 2038 notes during the second quarter 2024, partially offset by a reduction in capitalized interest.

The decrease in interest expense from the 2023 compared to 2022, is primarily due to the redemption of $2.5 billion fixed-rate long-term senior unsecured notes due in November 2023, the decrease in commercial paper borrowing and the absence of the structuring and the commitment fees on term loans related to the Terminated Intended Rogers Corporation Acquisition, partially offset by the increase in interest expense from the interest rate swap.

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, 2024, the Company's effective tax rate was 34.7 percent on pre-tax income from continuing operations of $1,192 million.

The effective tax rate differential for the year ended December 31, 2023, was principally the result the result of the non-tax-deductible goodwill impairment charge of $804 million in the fourth quarter partially offset by a $324 million tax benefit recorded in connection with an internal restructuring.

The effective tax rate for the year ended December 31, 2024, was principally driven by the geographic mix of earnings offset by the U.S.

taxation of foreign operations as well as certain discrete tax expenses, including the settlement in the second quarter of an international tax audit for which the Company is partially indemnified.

In addition, there was a $103 million tax expense recorded in connection with an internal restructuring.

For the year ended December 31, 2023, the Company's effective tax rate was (5.8) percent on pre-tax income from continuing operations of $504 million.

The effective tax rate differential was principally the result of the non-tax-deductible goodwill impairment charge of $804 million in the fourth quarter of 2023 partially offset by a $324 million tax benefit recorded in connection with an internal restructuring.

For the year ended December 31, 2022, the Company's effective tax rate was 26.7 percent on pre-tax income from continuing operations of $1,448 million.

The effective tax rate differential was driven by the U.S tax effect of foreign earnings and dividends, geographic mix of earnings and the tax impacts of acquisition, integration, and separation costs.

For the year ended December 31, 2021, the Company's effective tax rate was 16.4 percent on pre-tax loss from continuing operations of $1,444 million.

The effective tax rate differential 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.

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

SEGMENT RESULTS

The revenues and certain expenses of the M&M Businesses are classified as discontinued operations in the current and historical periods.

In addition, the Auto Adhesives & Fluids, MultibaseTM and Tedlar® product lines within the historical Mobility & Materials segment (the "Retained Businesses") are not included in the scope of the M&M Divestitures and are included in Corporate & Other.

The revenues and certain expenses of the M&M Businesses are classified as discontinued operations in the historical periods.

Certain expenses, including separation costs, of the M&M Businesses are classified as discontinued operations in the current period.

In addition, the Auto Adhesives & Fluids, Multibase TM and Tedlar® product lines within the historical Mobility & Materials segment (the "Retained Businesses") are not included in the scope of the M&M Divestitures and are included in Corporate & Other.

The costs of the M&M Businesses that are classified as discontinued operations include only direct operating expenses incurred prior to the November 1, 2022 M&M Divestiture and prior to the November 1, 2023 Delrin® Divestiture.

7 unchanged sentences

Spectrum is part of the Electronics & Industrial segment.

Effective as of January 1, 2024, Electronics & Industrial realigned certain product lines that comprise its business units (Industrial Solutions, Interconnect Solutions and Semiconductor Technologies) that are intended to optimize business operations across the segment leading to enhanced value for customers and cost savings.

The net trade revenue table, within Note 5 to the Consolidated Financial Statements, has been recast for all periods presented to reflect the new structure.

The realignment did not result in changes to total Electronics & Industrial segment net sales.

On July 28, 2024, DuPont completed the acquisition of Donatelle Plastics, LLC ("Donatelle Plastics"), (the "Donatelle Plastics Acquisition").

Donatelle Plastics is being integrated into Industrial Solutions within the Electronics & Industrial segment.

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.

1 unchanged sentence

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.

The Electronics & Industrial 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.

The segment is a leading global supplier of differentiated materials and systems for a broad range of consumer electronics devices including mobile phones, computers, tablets, television monitors and other electronics applications used in a variety of industries.

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").

12 unchanged sentences

2024 Versus 2023

Electronics & Industrial net sales were $5,930 million for the year ended December 31, 2024, up 11 percent from $5,337 million for the year ended December 31, 2023.

Net sales increased due to an 8 percent increase in volume and a 6 percent increase in portfolio actions partially offset by a 2 percent decline in local price and product mix and a 1 percent unfavorable currency impact.

Volume growth in Semiconductor Technologies and Interconnect Solutions was partially offset by declines in Industrial Solutions.

Within Semiconductor Technologies, volume gains were driven by semiconductor demand recovery, primarily due to AI technology applications, advanced node transitions and higher China demand, as well as higher volume in OLED materials led by new product launches.

Broad based volume growth in Interconnect Solutions driven by end-market recovery, market share gains and demand from AI-driven technology ramps.

Volume declines in Industrial Solutions were driven by channel inventory destocking, primarily for Kalrez® and within biopharma markets.

The portfolio impact reflects the August 2023 acquisition of Spectrum and the July 2024 acquisition of Donatelle Plastics.

The unfavorable currency impact is primarily driven by the Japanese yen.

Operating EBITDA was $1,717 million for the year ended December 31, 2024, up 17 percent compared with $1,472 million for the year ended December 31, 2023 primarily due to volume growth, the impact of higher production rates in Semiconductor Technologies and Interconnect Solutions, savings from restructuring actions and the earnings contribution from the Spectrum and Donatelle Plastics acquisitions partially offset by higher variable compensation and select growth investments.

2023 Versus 2022

Electronics & Industrial net sales were $5,337 million for the year ended December 31, 2023, down 10 percent from $5,917 million for the year ended December 31, 2022.

Net sales decreased due to an 11 percent volume decline and a 1 percent currency headwind offset by a 2 percent increase in portfolio.

Volume declines in Semiconductor Technologies were driven by inventory destocking and reduced semiconductor fabrication utilization rates due to ongoing consumer electronics demand weakness, led by China.

Volume declines in Semiconductor Technologies were driven by inventory destocking and reduced semiconductor fabrication utilization rates due to electronics demand weakness, led by China, slightly offset by increased demand for OLED materials.

Volume declines in Interconnect Solutions related to decreased spending on consumer and industrial electronics and related channel inventory destocking, both led by China.

Within Industrial Solutions, volume declines were driven by channel inventory destocking within biopharma markets and continued lower demand in consumer electronics markets slightly offset by increased demand for OLED materials.

The local price and product mix gains in Semiconductor Technologies and Industrial Solutions are a result of actions taken to offset cost inflation.

These gains were offset by local price and product mix declines in Interconnect Solutions, including the impact of lower pass-through metals, as well as declines in OLED materials.

Within Industrial Solutions, volume declines were driven by channel inventory destocking within electronic parts and biopharma markets and lower demand in printing and packaging markets.

Local price and product mix gains in Semiconductor Technologies and Industrial Solutions, as a result of actions taken to offset cost inflation, were offset by declines in Interconnect Solutions, including the impact of lower pass-through metals prices.

The unfavorable currency impact is primarily driven by the Japanese yen and Chinese yuan.

1 unchanged sentence

Operating EBITDA was $1,472 million for the year ended December 31, 2023, down 20 percent compared with $1,836 million for the year ended December 31, 2022 primarily due to decreased sales volumes, the impact of reduced production rates to better align inventory with demand, slightly offset by the earnings associated with Spectrum.

2022 Versus 2021

Electronics & Industrial net sales were $5,917 million for the year ended December 31, 2022, up 7 percent from $5,554 million for the year ended December, 31 2021.

Net sales increased due to a 5 percent increase from portfolio changes, a 3 percent increase in volume, and a 2 percent increase in local price, and partially offset by a 3 percent unfavorable currency impact.

The portfolio impact primarily reflects the July 1, 2021 acquisition of Laird PM.

Volume growth was led by Semiconductor Technologies which was driven by strong end-market demand primarily due to continued transition to more advanced node technologies and high performance computing.

Within Industrial Solutions, volume gains were driven by growth in healthcare and industrial-end markets as well as continued strength in electronics applications.

Volumes within Interconnect Solutions were down due to weakness in consumer electronics and smartphones.

Operating EBITDA was $1,836 million for the year ended December 31, 2022, up 4 percent compared with $1,758 million for the year ended December 31, 2021 driven by strong volume growth and the acquisition of Laird PM and partially offset by higher raw material, logistics and energy costs, as well as weaker product mix in Interconnect Solutions.

WATER & PROTECTION

13 unchanged sentences

2024 Versus 2023

Water & Protection net sales were $5,423 million for the year ended December 31, 2024, down 4 percent from $5,633 million for the year ended December 31, 2023 due to a 2 percent decline in volume, and 1 percent declines related to local price and product mix and unfavorable currency impacts.

Safety Solutions had volume declines mainly due to channel inventory destocking, primarily in medical packaging products within healthcare markets.

Water Solutions volume declines were primarily due to distributor inventory destocking from weaker industrial demand in China.

Shelter Solutions sales were relatively flat from mixed demand in construction markets.

The unfavorable currency impact is primarily driven by the Japanese yen, and Chinese yuan, partially offset by the Euro.

Operating EBITDA was $1,360 million for the year ended December 31, 2024, down 2 percent compared with $1,388 million for the year ended December 31, 2023 driven by decreased volumes and higher variable compensation, partially offset by productivity and savings from restructuring actions.

2023 Versus 2022

Water & Protection net sales were $5,633 million for the year ended December 31, 2023, down 5 percent from $5,957 million for the year ended December 31, 2022 due to a 7 percent decline in volume and a 1 percent unfavorable currency impact, partially offset by a 3 percent increase in local price and product mix.

6 unchanged sentences

The currency impacts were primarily driven by the Chinese yuan and the Japanese yen.

2022 Versus 2021

Water & Protection net sales were $5,957 million for the year ended December 31, 2022, up 7 percent from $5,552 million for the year ended December 31, 2021 due to a 12 percent increase in local price, partially offset by a 4 percent unfavorable currency impact and a 1 percent decrease in volume.

Portfolio was flat.

Local price increased across all businesses and in all regions, led by Shelter Solutions and Safety Solutions.

Volume growth in Water Solutions was more than offset by a decline in Safety Solutions while Shelter Solutions was flat.

Water Solutions volume gains were driven by strong global demand across all technologies led by reverse osmosis membranes and ultra filtration.

Safety Solutions volume declined primarily as a result of lower demand for TYVEK® garments.

Shelter Solutions was flat due to weakness in the construction market largely in North America and EMEA.

Operating EBITDA was $1,431 million for the year ended December 31, 2022, up 3 percent compared with $1,385 million for the year ended December 31, 2021 as pricing actions and more disciplined cost control more than offset higher raw material, logistics and energy costs, unfavorable impact from currency, and lower volumes.

Corporate & Other

1 unchanged sentence

Related to the M&M Divestitures, Corporate & Other includes Stranded Costs and Future Reimbursable Indirect Costs.

The results of Corporate & Other include the sales and activity of the Biomaterials (prior to its May 2022 divestiture), Clean Technologies (prior to its December 2021 divestiture), and Solamet® (prior to its June 2021 divestiture) business units.

The results of Corporate & Other include the sales and activity of the Biomaterials (prior to its May 2022 divestiture) business units.

Corporate & Other includes DuPont's equity interest in Derby Holdings Group related to the Delrin® Divestiture.

Corporate & Other also includes certain enterprise and governance activities including non-allocated corporate overhead costs and support functions, leveraged services, non-business aligned litigation expenses and other costs not absorbed by reportable segments.

5 unchanged sentences

Equity earnings $ (7) $ — $ 5

For the first quarter of 2024, the Company anticipates additional inventory destocking within our industrial-based businesses along with continued weak demand in China.

Sequentially, from first quarter to the second quarter of 2024 the Company anticipates some inventory destocking abatement, seasonality factors and realization of cost savings.

For the full year 2024, the Company anticipates an electronics market recovery, including improvement in semiconductor fabrication utilization rates, as well as improved orders within industrial markets as customer inventory levels normalize.

The Company continues to closely monitor macroeconomic as well as geopolitical developments.

For the full year 2025, the Company anticipates ongoing strength within semiconductor markets as well as more normalized sales patterns in China.

Continued growth is expected in the markets served by Interconnect Solutions driven by improved consumer electronics demand and refresh cycles for devices in support of AI adoption.

Within the healthcare markets, the Company anticipates growth acceleration in demand for medical devices along with continued demand stabilization for medical packaging applications and biopharma markets.

In the markets served by Water, the Company expects increased demand to drive year over year volume growth.

The Company anticipates stable demand within the markets served by the Company’s other industrial-based product lines.

LIQUIDITY & CAPITAL RESOURCES

5 unchanged sentences

In millions December 31, 2024 December 31, 2023

Cash, cash equivalents and marketable securities $ 2,392 $ 4,964

Cash and cash equivalents $ 1,850 $ 2,392

Total debt $ 7,171 $ 7,800

1 unchanged sentence

For each of its foreign subsidiaries, the Company makes an assertion regarding the amount of earnings intended for permanent reinvestment, with the balance available to be repatriated to the United States.

The Company held no investments in marketable securities at December 31, 2023 and $1,302 million at December 31, 2022.

The decrease in cash, cash equivalents and marketable securities at December 31, 2023 compared to December 31, 2022 was due to cash used in the current year to fund the $2B ASR transaction, the Spectrum Acquisition, Restricted Cash in connection with the Water District Settlement Agreement and general corporate purposes, partially offset by the proceeds from the Delrin® Divestiture.

Refer to subsequent paragraphs for further discussion of the drivers of the change in cash, cash equivalents.

Total debt at December 31, 2023 and December 31, 2022 was $7.8 billion and $8.1 billion, respectively.

The decrease was primarily due to the repayment of the 2018 Senior Notes of $300 million due in November 2023, partially offset by the mark to market impact to the fair value of an interest rate swap used to hedge changes in the fair value of the hedged item due to changes in the SOFR as of December 31, 2023.

The Company held no investments in marketable securities at December 31, 2024 and 2023 .

The decrease in cash and cash equivalents at December 31, 2024 compared to December 31, 2023 was due to cash used in the current year to fund the Q1 2024 ASR Transaction, the Donatelle Acquisition, partial redemption of 2038 Notes and general corporate purposes.

Refer to subsequent paragraphs for further discussion of the drivers of the change in cash and cash equivalents.

Total debt at December 31, 2024 and 2023 was $7.2 billion and $7.8 billion, respectively.

The decrease was primarily due to the partial redemption of $650 million of 2038 Notes discussed below.

As of December 31, 2024, the Company is contractually obligated to make future cash payments of $7.3 billion and $4.0 billion associated with principal and interest, respectively, on debt obligations.

Related to the principal, all payments will be due subsequent to 2024.

Related to the principal, $1.9 billion will be due in the next twelve months and the remainder will be due subsequent to 2025.

The Company may address the maturity with cash on hand, issuance of commercial paper, utilizing existing credit facilities, accessing the debt capital markets or a combination of any of them.

Related to interest, $359 million will be due in the next twelve months and the remainder will be due subsequent to 2025.

The majority of interest obligations will be due in 2030 or later.

In relation to the Company’s fixed-to-floating interest rate swap agreements, there is a mandatory early termination date of December 15, 2025.

The mark-to-market value on these swaps at December 31, 2024 is $116 million.

The final settlement amount will depend on movements in interest rates.

Refer to Note 21 to the Consolidated Financial Statements for more information on the Company’s interest rate swap agreements.

Capital Structure Actions

In connection with the Previously Intended Business Separations, on June 5, 2024, DuPont issued a notice of redemption to the bond trustee with respect to a partial redemption of $650 million aggregate principal amount of its 2038 Notes, in accordance with their terms.

The partial redemption occurred on June 15, 2024, at the redemption price set forth in the indenture of the 2038 Notes.

The Company funded the repayment with cash on hand.

As a result of the early redemption of the debt, for the year ended December 31, 2024, the Company incurred a loss of approximately $74 million, which consisted of the redemption premium, write-off of the deferred debt issuance costs and the basis adjustment from fair value hedge accounting on the 2022 Swaps associated with this borrowing.

See Note 21 for further detail on the 2022 Swaps.

In connection with the Previously Intended Business Separations and continuing in light of the Intended Electronics Separation, DuPont is considering potentially repaying, redeeming, repurchasing, or exchanging some or all of its other senior notes, which could include redemptions, tender offers, open market purchases, privately negotiated transactions, or other transactions or a combination of any of them, which will be on pricing terms that are determined at the time of any such transaction.

Such transactions will depend on liquidity considerations, contractual and legal restrictions, prevailing market conditions and other factors.

Revolving Credit Facilities

On April 12, 2022, the Company entered into a $2.5 billion five-year revolving credit facility (the "Five-Year Revolving Credit Facility") and terminated its $3 billion five-year revolving credit facility entered in May 2019.

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.

Also on April 12, 2022, the Company entered into an updated $1.0 billion 364-day revolving credit facility (the “2022 $1B Revolving Credit Facility") and terminated its $1.0 billion 364-day revolving credit facility entered in April 2021 (the “2021 $1B Revolving Credit Facility").

The 2022 $1B Revolving Credit Facility may be used for general corporate purposes.

In July 2022, the Company drew down $600 million under the 2022 $1B Revolving Credit Facility in order to facilitate certain intercompany internal restructuring steps related to the M&M Divestiture.

The Company has entered a $1.0 billion 364-day revolving credit facility in the second quarter of each calendar year beginning in 2022.

In July 2022, the Company drew down $600 million under its 2022 $1 billion revolving credit facility in order to facilitate certain intercompany internal restructuring steps related to the M&M Divestiture.

The Company repaid the borrowing in September 2022.

In April 2023, the Company's 2022 $1B Revolving Credit Facility expired.

In May 2023, the Company entered into a new $1 billion 364-day revolving credit facility (the "2023 $1B Revolving Credit Facility").

The 2023 $1B Revolving Credit Facility may be used for general corporate purposes.

The following table summarizes the Company's credit facilities:

Committed and Available Credit Facilities at December 31, 2024

In millions Effective Date Committed Credit Credit Available Maturity Date Interest

Five-Year Revolving Credit Facility 1

April 2022 $ 2,500 $ 2,484 April 2027 Floating Rate

2024 $1B Revolving Credit Facility 2

May 2024 1,000 1,000 May 2025 Floating Rate

Total Committed and Available Credit Facilities $ 3,500 $ 3,484

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.

The 2024 $1B Revolving Credit Facility is available to be used for general corporate purposes.

There were no drawdowns under the facility during the year ended December 31, 2024.

The Company intends to enter a new $1 billion 364-day revolving credit facility on or about the expiration of the 2023 $1B Revolving Credit Facility.

The Company intends to enter into a new revolving credit facility in the second quarter 2025.

Repayment of Senior Notes

In November 2022, the Company redeemed in full $2.5 billion in fixed-rate long term senior unsecured notes due 2023 at a redemption price equal to 100 percent of the aggregated principal amount plus the accrued and unpaid interest.

In November 2022, the Company redeemed in full $2.5 billion of the 2023 Notes at a redemption price equal to 100 percent of the aggregated principal amount plus the accrued and unpaid interest.

The redemption was funded with the net proceeds from the M&M Divestiture.

11 unchanged sentences

At December 31, 2024 and 2023, the Company had no issuances outstanding of commercial paper.

The Company’s issuance under the Commercial Paper Program was used for general corporate purposes.

On February 1, 2021, the Company terminated its fully drawn $3.0 billion term loan facilities.

The termination triggered the repayment of the aggregate outstanding principal amount of $3.0 billion, plus accrued and unpaid interest through and including January 31, 2021.

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

Donatelle Plastics Acquisition

On July 28, 2024, DuPont completed the acquisition of Donatelle Plastics, LLC for a net purchase price of $365 million, which includes the estimated fair value for a contingent earn-out liability of $40 million.

The Company utilized existing cash balances to complete the acquisition.

Spectrum Acquisition

3 unchanged sentences

The Company utilized the MOU escrow account balance of approximately $100 million and cash on hand to make its $400 million contribution to the Water District Settlement Fund.

The $400 million contribution, plus interest, to the Water District Settlement Fund is reflected as "Restricted cash and cash equivalents" on the Condensed Consolidated Balance sheets.

The $400 million contribution will be reflected as a cash outflow within cash flows from discontinued operations after the entry of judgment becomes final and non-appealable.

The judgment became final in April 2024, therefore the $400 million contribution, plus interest, to the Water District Settlement Fund is reflected as a cash outflow within cash flows from discontinued operations during the year ended December 31, 2024.

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

5 unchanged sentences

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

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.

Credit Ratings

3 unchanged sentences

Credit Ratings Long-Term Rating Short-Term Rating Outlook

Standard & Poor’s BBB+ A-2 Stable

Moody’s Investors Service Baa1 P-2 Stable

Fitch Ratings BBB+ F-2 Stable

Standard & Poor’s BBB+ A-2 Watch Negative

Moody’s Investors Service Baa1 P-2 Negative

Fitch Ratings BBB+ F-2 Watch Negative

The Company's indenture covenants include customary limitations on liens, sale and leaseback transactions, and mergers and consolidations, subject to certain limitations.

3 unchanged sentences

Summary of Cash Flows

Beginning in the second quarter of 2023, the Company has segregated the cash flows from discontinued operations from the cash flows from continuing operations in accordance with ASC 230, Statement of Cash Flows.

The Consolidated Statements of Cash Flows have been recast for all periods to reflect the change in presentation.

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.

9 unchanged sentences

$ (1,847) $ (2,989) $ (7,646)

Cash (used in) provided by discontinued operations $ (306) $ (763) $ 1,414

Cash used for discontinued operations $ (474) $ (306) $ (763)

Effect of exchange rate changes on cash, cash equivalents and restricted cash

2 unchanged sentences

Cash provided by operating activities of continuing operations was $2,321 million, $2,191 million and $1,249 million for the years ended December 31, 2024, 2023 and 2022, respectively.

Cash provided by operating activities increased in 2024 compared with 2023, primarily from higher earnings the net impact from changes in variable compensation payouts and accruals partially offset by an increase in cash used by net working capital.

Cash provided by operating activities increased in 2023 compared with 2022 , primarily from improvements in working capital.

The decrease in cash provided by operating activities in 2022 was primarily driven by the increase in working capital.

The table below reflects net working capital on a continuing operations basis:

9 unchanged sentences

The assets and liabilities related to the Delrin® Divestiture are presented as assets of discontinued operations and liabilities of discontinued operations, respectively.

Cash Flows provided by Investing Activities - Continuing Operations

Cash provided by investing activities of continuing operations in 2023 was $172 million compared to cash provided by investing activities of $9,004 million in 2022.

The decrease in cash provided from investing activities in 2023 versus the 2022 is primarily attributable to the absence of cash proceeds received from the M&M Divestiture and cash paid for the Spectrum acquisition, partially offset by proceeds from the Delrin® Divestiture, net of cash divested and the absence of cash used in the purchase of investments and an increase in cash provided by the proceeds from sales and maturities of investments.

The increase in cash provided from investing activities in 2022 versus the prior year is primarily attributable to the cash proceeds received from the M&M Divestiture, a decrease in cash used in acquisition of property and business and a decrease in purchases of investments partially offset by the absence of proceeds from sale and maturities of investments.

Cash used for investing activities in 2021 of $2,298 million was primarily attributable to the acquisition of Laird PM.

Cash Flows used in/ provided by Investing Activities - Continuing Operations

Cash used in investing activities of continuing operations in 2024 was $849 million compared to cash provided by investing activities of $172 million and $9,004 million in 2023 and 2022, respectively .

The change in investing activities in 2024 versus the 2023 is primarily attributable to the absence of proceeds received from sales and maturity of investments and proceeds from sales of property and business partially offset by the impact of the change in cash paid for acquisition in each year.

Cash provided by investing activities in 2022 is primarily attributable to the cash proceeds received from the M&M Divestiture partially offset by purchases of investments.

Capital expenditures totaled $579 million, $619 million and $662 million for the years ended December 31, 2024, 2023 and 2022, respectively.

The Company expects 2024 capital expenditures to be about $600 million.

The Company expects 2025 capital expenditures to be about $660 million which includes separation-related capital expenditures.

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

Cash Flows used for Financing Activities - Continuing Operations

Cash used for financing activities of continuing operations in 2023 was $2,989 million compared to cash used for financing activities of $7,646 million in 2022.

The decrease in cash used for financing activities in 2023 versus the 2022 is primarily attributable to the decrease in cash used for repurchases of common stocks and decrease in the payment of long-term debt.

The increase in cash used for financing activities in 2022 versus the prior year is primarily driven by the increase in cash used for repurchases of common stocks and repayment of short-term borrowings mostly offset by a decrease in cash used for the payment of long-term debt.

In 2021, cash used by financing activities was $7,589 million, primarily driven by the cash used for the repayment of long-term debt and repurchases of common stock.

Cash Flows from Discontinued Operations

Cash used from discontinued operations was $306 million compared with $763 million in the same period last year.

Cash used for financing activities of continuing operations in 2024 was $1,847 million compared to cash used for financing activities of $2,989 million and $7,646 million in 2023 and 2022, respectively .

The decrease in cash used in financing activities in 2024 versus the 2023 is primarily attributable to the decrease in share buyback activities partially offset by the partial redemption of the 2038 Notes.

The decrease in 2023 versus the 2022 is primarily attributable to the decrease in share buyback activities and decrease in the payment of long-term debt.

Cash used for financing activities in 2022 primarily driven by the share buyback activities and the redemption of 2023 Notes.

Cash Flows used for Discontinued Operations

Cash used for discontinued operations was $474 million compared with $306 million in the same period last year.

The cash used from discontinued operations includes MOU activity, refer to Note 4 to the Consolidated Financial Statements for additional information.

1 unchanged sentence

The activity for the year ended December 31, 2022, Consolidated Statements of Cash Flows present the financial results of the M&M Businesses as discontinued operations.

In 2021, cash provided by discontinued operations of $1,414 million reflects activity of the M&M Businesses and the N&B business including $1.25 billion of proceeds from the issuance of long-term debt transferred to IFF at split-off.

Refer to Note 4 to the Consolidated Financial Statements for further details.

The following table provides dividends paid to common shareholders for the years ended December 31, 2024, 2023 and 2022:

3 unchanged sentences

Dividends paid to common stockholders $ 635 $ 651 $ 652

Share Buyback Programs

9 unchanged sentences

The remaining $400 million was evaluated as an unsettled forward contract indexed to DuPont common stock, classified within stockholders’ equity as of December 31, 2023.

The accelerated repurchase agreements under the $2B ASR Transaction were settled during the first quarter of 2024.

2 unchanged sentences

The completion of the $2B ASR Transaction completes the $5B Share Buyback Program.

The $1B Program terminates on June 30, 2025, unless extended or shortened by the Board of Directors.

The $1B Share Buyback Program terminates on June 30, 2025, unless extended or shortened by the Board of Directors.

The timing and number of shares to be repurchased will depend on factors such as the share price, economic and market conditions, and corporate and regulatory requirements.

In the first quarter 2024, consistent with its previously announced intention, DuPont entered into an ASR agreement with one counterparty for the repurchase of about $500 million of common stock;

DuPont received initial deliveries in February 2024, of 6.0 million shares of common stock.

The final number of shares to be repurchased will be based on the volume-weighted average stock price for DuPont common stock during the term of the ASR agreement, less an agreed upon discount.

Final settlement is expected in the second quarter 2024.

At this time and with the continued focus on the Intended Electronic Separation, the Company does not currently plan to complete the remaining authorization under the $1B Share Buyback Program.

Also in the first quarter 2024, DuPont entered an ASR agreement with one counterparty for the repurchase of about $500 million of common stock ("Q1 2024 ASR Transaction").

DuPont paid an aggregate of $500 million to the counterparty and received initial deliveries of 6.0 million shares of DuPont common stock, which were retired immediately and recorded as a reduction of retained earnings of $400 million.

The remaining $100 million was evaluated as an unsettled forward contract indexed to DuPont common stock, classified within stockholders' equity as of March 31, 2024.

In the second quarter of 2024, the Q1 2024 ASR Transaction was completed.

The settlement resulted in the delivery of approximately 1.0 million additional shares of DuPont common stock, which were retired immediately and recorded as a reduction of retained earnings of $72 million.

In total, the Company repurchased 6.9 million shares at an average price of $71.96 per share under the Q1 2024 ASR Transaction.

The Inflation Reduction Act of 2022 introduced a 1 percent nondeductible excise tax imposed on the net value of certain stock repurchases made after December 31, 2022.

The net value is determined by the fair market value of the stock repurchased during the tax year, reduced by the fair market value of stock issued during the tax year.

The Company recorded total excise tax of $21.2 million as a reduction to retained earnings for the year ended December 31, 2023.

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").

At the expiry of the 2021 Share Buyback Program, the Company had repurchased and retired a total of 19.6 million shares for $1.5 billion under the 2021 Share Buyback Program.

The Company recorded total excise tax of $8 million and $21 million, respectively, as a reduction to retained earnings for the years ended December 31, 2024 and 2023.

See Part II, Item 5.

10 unchanged sentences

At December 31, 2023, total liabilities related to the 2023-2024 Restructuring Program were $79 million for severance and related benefit costs, recognized in "Accrued and other current liabilities" in the Consolidated Balance Sheets.

For the years ended December 31, 2023 through December 31, 2024, DuPont recorded a pre-tax charge related to the 2023-2024 Restructuring Program in the amount of $199 million, recognized in "Restructuring and asset related charges - net" in the Company's Consolidated Statements of Operations, comprised of $114 million of severance and related benefit costs and asset related charges of $85 million.

At December 31, 2024, total liabilities related to the 2023-2024 Restructuring Program were $47 million for severance and related benefit costs,

recognized in "Accrued and other current liabilities" in the Consolidated Balance Sheets.

Inventory write-offs for plant line closures in connection with the 2023-2024 Restructuring Program were $25 million in "Cost of Sales" within the Consolidated Statements of Operations for the year ended December 31, 2024.

In October 2022, the Company approved targeted restructuring actions to capture near-term cost reductions and to further simplify certain organizational structures following the M&M Divestitures (the "2022 Restructuring Program").

For the year ended December 31, 2023, DuPont recorded a pre-tax charge related to the 2022 Restructuring Program in the amount of $35 million, recognized in "Restructuring and asset related charges - net" in the Company's Consolidated Statements of Operations, comprised of severance and related benefit costs.

For the years ended December 31, 2023 through December 31, 2024, DuPont recorded a pre-tax charge related to the 2022 Restructuring Program in the amount of $94 million, recognized in "Restructuring and asset related charges - net" in the Company's Consolidated Statements of Operations, comprised of severance and related benefit costs.

At December 31, 2024, total liabilities related to the 2022 Restructuring Program were $1 million for severance and related benefit costs, recognized in "Accrued and other current liabilities" in the Consolidated Balance Sheets.

Actions related to the 2022 Restructuring Program are substantially complete.

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

For the years ended December 31, 2021 through December 31, 2023, DuPont recorded pre-tax charges inception to date related to the 2021 Restructuring Actions in the amounts of $47 million recognized in "Restructuring and asset related charges - net" in the Company's Consolidated Statements of Operations, comprised of $27 million of severance and related benefit costs and $20 million of asset related charges.

At December 31, 2023, total liabilities related to the 2021 Restructuring Actions were $1 million for severance and related benefit costs.

Actions related to the 2021 Restructuring Program are substantially complete.

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

4 unchanged sentences

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.

DuPont's aggregate escrow deposits of $35 million at December 31, 2024, are reflected in "Restricted cash and cash equivalents - noncurrent" on the Consolidated Balance Sheet.

As of June 30, 2023, DuPont had deposited an aggregate of $100 million into the MOU Escrow Account all of which it used to fund in part its $400 million contribution to the Water District Settlement Fund.

As a result, $405 million, including interest, is reflected in "Restricted cash and cash equivalents" on the Consolidated Balance Sheets at December 31, 2023.

DuPont's aggregate MOU escrow deposits of $100 million excluding interest, at December 31, 2022 is reflected in "Restricted cash and cash equivalents - noncurrent" on the Consolidated Balance Sheets.

The judgment became final in April 2024, therefore $400 million contribution, plus interest, to the Water District Settlement Fund is reflected as a cash outflow within cash flows from discontinued operations during the year ended December 31, 2024.

See Note 16 to the Consolidated Financial Statements for more information.

As of December 31, 2023, the Company expected to make cash payments related to qualified PFAS spend of $30 million in the next twelve months.

As of December 31, 2024, the Company expects to make cash payments related to qualified PFAS spend of $30 million in the next twelve months.

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

44 unchanged sentences

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.

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.

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.

In such situations, the Company will

not recognize a loss if, based upon a thorough review of all relevant facts and information, management believes that it is probable that the pending judgment will be successfully overturned on appeal.

In such situations, the Company will not recognize a loss if, based upon a thorough review of all relevant facts and information, management believes that it is probable that the pending judgment will be successfully overturned on appeal.

A detailed discussion of significant litigation matters is contained in Note 16 to the Consolidated Financial Statements.

19 unchanged sentences

Applicable corporations will be allowed to claim a credit for the minimum tax paid against regular tax in future years.

The Company is an applicable corporation subject to the CAMT requirements however, the Company did not incur a CAMT liability for 2023.

The Company is an applicable corporation subject to the CAMT requirements however, the Company did not incur a CAMT liability for 2024 and 2023.

The IRA also established an excise tax that imposes a 1 percent surcharge on stock repurchases, effective January 1, 2023.

Refer to Note 18 to the Consolidated Financial Statements for further information on the 1 percent surcharge on stock repurchases.

Assessment of Income Tax Impacts related to 2023 Internal Legal Entity Restructurings

During 2023, the Company completed certain internal restructurings which resulted in estimated income tax impacts from a United States federal, state, and foreign jurisdiction perspective.

The estimated tax impact of certain internal restructurings was calculated using valuations of legal entities and intellectual property, which involved the use of the income approach and assumptions, including, projected revenue growth rate, EBITDA margin, the weighted average costs of capital, capitalization rate, royalty rates, tax rate, capital expenditures, and terminal growth rates.

The Company recorded a deferred income tax benefit of $324 million for the year ended December 31, 2023, related to these internal restructurings.

Assessment of Income Tax Impacts related to the M&M Divestitures

In connection with the M&M Divestitures, the Company completed certain internal restructurings which resulted in estimated income tax impacts from a United States federal, state and foreign jurisdiction perspective.

The estimated tax impact of certain internal restructurings was calculated using valuations of components of legal entities and intellectual property, which involved the use of the income and/or market approach and assumptions, including, projected EBITDA, the weighted average costs of capital, royalty rates, tax rate, capital expenditures, and terminal growth rates for the income approach and projected EBITDA and market multiples for the market approach.

The tax effect of these internal restructurings are included in the overall tax consequences of the M&M Divestitures.

The Company recorded net income tax expense of $21 million and $127 million for the years ended December 31, 2023 and 2022, respectively, related to the estimated tax impact of these internal restructurings from a United States and foreign jurisdiction perspective.

Although the Company believes the estimated tax impacts are reasonable and appropriate, these estimates required significant judgment regarding the application of tax laws and regulations.

Upon final resolution by the United States Internal Revenue Service or foreign tax authority through audit or litigation, the Company’s income tax calculations and related filing positions regarding certain elements of these transactions could be different, which could have a material impact on the Company.

Valuation of Acquired Intangible Assets

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

The excess of the purchase price over the estimated fair value of the net assets acquired, including identified intangibles, is recorded as goodwill.

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 principal assumptions in these analyses include projected revenue, gross margins, selling, administrative, research and development expenses (SARD), depreciation, changes in net working capital, capital expenditures, the weighted average cost of capital, the terminal growth rates, and the tax rates for the income approach.

For the market approach, the company uses projected EBITDA and derived multiples from comparable market transactions.

The estimates are deemed reasonable by management based on information available at the dates of acquisition;

however, estimates are i nherently uncertain.

The Company engaged an independent third-party valuation specialist to assist with the allocation of the total purchase price for the acquisition of Spectrum Plastics Group ("Spectrum") 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, net sales attributable to existing customers, 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 Spectrum management.

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

Assessments of Long-Lived Assets and Goodwill

10 unchanged sentences

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

The Company has seven reporting units.

The Company has eight reporting units.

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 .

5 unchanged sentences

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 including Level 3 unobservable inputs :

projected revenue, gross margins, selling, administrative, research and development expenses (SARD), depreciation, changes in net working capital, capital expenditures, the weighted average cost of capital, the terminal growth rate, and the tax rate.

Discounted cash flow valuations are completed using the following key assumptions, some of which are considered significant, including Level 3 unobservable inputs :

projected revenue growth, EBITDA margin, capital expenditures, weighted average cost of capital, terminal growth rate, and the tax rate.

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

3 unchanged sentences

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.

In selecting the 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.

2 unchanged sentences

Goodwill Impairment Testing at October 1, 2024

In the fourth quarter of 2023 at October 1, the Company performed its annual goodwill impairment testing by applying the qualitative assessment to six of its reporting units and the quantitative assessment to two of its reporting units.

In the fourth quarter of 2024 at October 1, the Company performed its annual goodwill impairment testing by applying the qualitative assessment to seven of its reporting units and the quantitative assessment to one reporting unit.

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.

The estimated fair value of the Protection reporting unit within Water & Protection exceeded its carrying value by less than 5 percent.

Given this level of fair value, the reporting unit is sensitive to changes in the significant assumptions used in the analysis.

Goodwill Impairment Testing at December 31, 2023

In connection with the preparation of the full year 2023 financial statements, the continuation of previously disclosed challenging macroeconomic environment in the residential, non-residential, and the repair and remodel construction markets, as well as incremental channel inventory destocking in healthcare and industrial end-markets served as a triggering event requiring the Company to perform an impairment analysis of the goodwill associated with its Protection reporting unit (aggregation of the Safety and Shelter businesses) as of December 31, 2023.

The Company used a combination of the income approach and market approach as mentioned above.

As a result of the analysis performed, the Company recorded a non-cash goodwill impairment charge of $804 million recognized in “Goodwill impairment charge” in the Consolidated Statements of Operations.

Impairment and Disposals of Long-Lived Assets and Impairment of Indefinite-Lived Intangible Assets

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.

The Company tests its indefinite-lived intangible assets for impairment during the fourth quarter, or more frequently when events or changes in circumstances indicate that the fair value is below 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.

Indefinite-lived intangible assets are considered impaired when their carrying value exceeds their fair value.

In 2023, the Company identified a triggering event within Protection and assessed the indefinite-lived intangible assets and the long-lived assets of certain groups for impairment, noting no impairments were identified.

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.

Fair value of the asset group is determined using a combination of a discounted cash flow model and/or market approach.

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.

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

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

The estimated fair value of the Protection reporting unit within Water & Protection exceeded its carrying value by approximately 5 percent.

Given this level of fair value, the reporting unit is sensitive to changes in the significant assumptions used in the analysis, including projected revenue growth, EBITDA margin, weighted average cost of capital, terminal growth rate and tax rate.

LONG-TERM EMPLOYEE BENEFITS

24 unchanged sentences

The Company's income can be affected by pension and defined contribution charges/(benefits) as well as OPEB costs.

The following table summarizes the extent to which the Company's income for the years ended December 31, 2023, December 31, 2022 and December 31, 2021 was affected by pre-tax charges related to long-term employee benefits:

The following table summarizes the extent to which the Company's income for the years ended December 31, 2024, December 31, 2023 and December 31, 2022 was affected by pre-tax charges related to long-term employee benefits, which include defined contributions and net periodic benefit costs (credits):

For the Years Ended

3 unchanged sentences

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 2024, long term employee benefit expense from continuing operations is expected to decrease by about $15 million compared to 2023.

The decrease is mainly due to lower interest costs.

For 2025, long term employee benefit expense from continuing operations is expected to increase by about $14 million compared to 2024.

The increase is mainly due to higher expected net periodic benefit costs.

ENVIRONMENTAL MATTERS

2 unchanged sentences

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

In addition, the Company implements various voluntary programs to reduce its environmental footprint, which include initiatives to reduce air emissions, minimize the generation of hazardous waste, decrease the volume of water used and discharged, increase the efficiency of energy use, and seek to avoid, eliminate or minimize substances of concerns.

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.

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 with 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 2023 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.

In addition, the Company implements various voluntary programs to reduce its environmental footprint, which include initiatives to reduce air emissions, and greenhouse gas (GHG) emissions, minimize the generation of hazardous waste, decrease the volume of water used and discharged, increase the efficiency of energy use, and seek to avoid, eliminate or minimize substances of concerns.

The Company incurs, and expects to incur for the foreseeable future, costs to comply with complex environmental laws and regulations, as well as internal voluntary programs and goals, such as DuPont’s sustainability strategy.

2 unchanged sentences

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 in 2019 an Acting on Climate Goal to reduce the Company’s greenhouse gas (GHG) emissions, 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.

In the second quarter of 2023, DuPont announced that it had strengthened its climate goals including, among other things, increasing its reduction targets for Scope 1 and 2 GHG emissions and establishing a Scope 3 GHG emissions reduction goal measured from a 2020 base year.

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

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

In April 2023, DuPont announced that the Appaloosa Run Wind Energy Center, a wind energy project resulting from the VPPA with NextEra, is operational and generating clean, renewable energy.

The Appaloosa Run Wind Energy Center, located in Upton County, Texas, generates 135 megawatts of new wind power capacity or approximately 528,000 megawatt hours (MWh) of renewable electricity annually.

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

9 unchanged sentences

Environmental Remediation

The Company has incurred environmental remediation costs of $69 million, $12 million and $14 million, for the years ended December 31, 2023, 2022 and 2021, respectively.

The Company has incurred environmental remediation costs, including indemnification remediation costs, of $21 million, $69 million and $12 million, for the years ended December 31, 2024, 2023 and 2022, respectively.

Changes in the remediation accrual balance are summarized below:

9 unchanged sentences

Balance at December 31, 2024 $ 129

Excludes indemnification remediation obligations and payments.

Represents the net change in indemnified remediation obligations based on activity pursuant to the DWDP Separation and Distribution Agreement and Letter Agreement as discussed below and in Note 16 to the Consolidated Financial Statements.

This is not inclusive of the environmental accrual related to eligible PFAS costs associated with the MOU of $146 million and $152 million as of December 31, 2024 and 2023, respectively.

Primarily represents the increase in the Company's indemnification liability for Non-PFAS costs under the DWDP Separation and Distribution Agreement and Letter Agreement.

Considerable uncertainty exists with respect to environmental remediation costs, and, under adverse changes in circumstances, the potential liability may range up to $285 million above the amount accrued as of December 31, 2024.

8 unchanged sentences

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