Executive Summary

Q4 2016 net sales were $5.21B, down 2% year over year; operating EPS rose 89% to $0.51 and GAAP EPS was $0.29 as cost savings and currency benefits offset Agriculture timing headwinds .
Segment operating margins expanded by 305 bps in Q4, led by Performance Materials (+275 bps) and Nutrition & Health (+615 bps), while Protection Solutions contracted ~60 bps on lower plant utilization .
FY16 free cash flow improved $1.6B to $2.28B; net debt fell to $2.57B by year-end on stronger cash generation and lower capex .
Guidance: Q1 2017 GAAP EPS expected down ~18% y/y (includes ~$0.15 merger costs), but operating EPS up ~8% y/y; merger with Dow expected to close in 1H17 pending approvals—key stock catalyst .

What Went Well and What Went Wrong

What Went Well

“We exceeded our expectations for earnings, cost savings, operating margin expansion and free cash flow improvement” in 2016; merger integration planning progressing, with closing targeted for 1H17 (CEO Ed Breen) .
Performance Materials: Q4 operating earnings +17% to $328M on lower product costs, cost savings, and global auto demand; margins expanded ~275 bps .
Nutrition & Health: Q4 operating earnings +59% to $135M aided by cost savings and a $27M asset sale; operating margin improved ~615 bps; 14th consecutive quarter of y/y margin improvement .

What Went Wrong

Agriculture: Q4 net sales -10% to $1.39B as route-to-market change in the southern U.S. shifted ~$200M seed shipments into Q1 2017; despite a $78M currency tailwind, timing reduced Q4 sales and operating earnings .
Protection Solutions: Q4 operating earnings -3% to $142M as cost savings were more than offset by higher unit costs from lower plant utilization and currency headwinds; margin contracted ~60 bps .
Significant items: Q4 included pre-tax charges of $(557)M (ERP impairment $(435)M, transaction costs $(164)M), driving GAAP-to-operating EPS adjustments of $(0.44) per share; non-operating pension/OPEB curtailment gain provided $0.29 per share benefit .

Financial Results

Consolidated Metrics (USD)

Metric	Q2 2016	Q3 2016	Q4 2016
Net Sales ($B)	$7.06	$4.92	$5.21
GAAP EPS	$1.16	$0.01	$0.29
Operating EPS (Non-GAAP)	$1.24	$0.34	$0.51
Adjusted EBITDA ($B)	$1.85	$0.724	$1.002

Segment Net Sales ($B)

Segment	Q2 2016	Q3 2016	Q4 2016
Agriculture	$3.22	$1.12	$1.39
Electronics & Communications	$0.49	$0.49	$0.52
Industrial Biosciences	$0.36	$0.39	$0.40
Nutrition & Health	$0.84	$0.82	$0.81
Performance Materials	$1.34	$1.33	$1.33
Protection Solutions	$0.79	$0.72	$0.72
Other	$0.04	$0.03	$0.04
Total	$7.06	$4.92	$5.21

Segment Operating Earnings ($M)

Segment	Q2 2016	Q3 2016	Q4 2016
Agriculture	$865	$(189)	$(19)
Electronics & Communications	$93	$108	$98
Industrial Biosciences	$62	$78	$67
Nutrition & Health	$130	$135	$135
Performance Materials	$325	$371	$328
Protection Solutions	$188	$162	$142
Other	$(50)	$(58)	$(48)
Total	$1,613	$607	$703

KPIs

KPI	Q2 2016	Q3 2016	Q4 2016
Net Debt ($B)	$5.26	$5.82	$2.57

KPI	FY 2015	FY 2016
Free Cash Flow ($B)	$0.69	$2.28

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Operating EPS (Non-GAAP)	FY 2016	$3.15–$3.20 (raised low end)	$3.25	Raised
GAAP EPS	FY 2016	$2.70–$2.75	~$2.71	Maintained (narrowed to ~midpoint)
GAAP EPS	Q1 2017	—	Down ~18% y/y (incl. ~$0.15 merger costs)	New
Operating EPS (Non-GAAP)	Q1 2017	—	Up ~8% y/y	New
Base Tax Rate	Q1 2017	—	~22–23%	New
Capex	FY 2017	—	In line with D&A	New

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 & Q3 2016)	Current Period (Q4 2016)	Trend
Agriculture timing & route-to-market	Q2: preparing for Brazil/US route-to-market changes; Q3: shift of seed deliveries from Q4 to Q1	~$200M seed shipments shifted to Q1’17; Q4 sales would be +3% ex timing	Timing impact peaked in Q4; expected to reverse in Q1’17
Product launches (Leptra®, Zorvec®)	Q2–Q3: successful launches, share gains in Brazil, Asia	Leptra® penetration continues; expansion of RR2 Xtend™ soy; planned limited Qrome® intro in 2017	Positive adoption; supports pricing/mix
Automotive demand	Q2–Q3: strong demand, particularly China	Continued strength across APAC/NA/EU, driving PM volumes	Stable to improving
Consumer electronics/PV	Q2–Q3: softness; Tedlar® declines; Solamet® new launches	E&C up 6% on Solamet® paste; PV demand in China remains weaker	Mixed; portfolio/innovation offsets
Cost savings & operating costs	Q2–Q3: significant opex reductions; run-rate $1.0B by YE16	Exceeded 2016 savings; operating costs down 11% (non-GAAP)	Sustained benefit
FX impacts	Q2–Q3: net exchange losses; hedging effects	Q4 pre-tax exchange gains $106M; net after-tax exchange losses $(24)M	Less negative vs prior periods

Management Commentary

Ed Breen, CEO: “2016 was an important year for DuPont as we exceeded our expectations for earnings, cost savings, operating margin expansion and free cash flow improvement… We now expect the merger to close in the first half of 2017, pending regulatory approval.” .
Q4 outlook drivers: Operating EPS growth driven by cost savings and reversal of seed delivery timing to Q1; GAAP EPS includes ~$0.15 merger transaction costs .
Balance sheet & cash priorities: ~$1.3B dividends planned for 2017; capex aligned with D&A; FY16 share repurchases $916M (~13M shares) .

Q&A Highlights

The full Q4 2016 earnings call transcript was not available in our document corpus; we relied on the press release and earnings slides for qualitative insights. The call webcast details and replay were provided (8:00 AM ET; replay passcode 6670063#) .

Estimates Context

S&P Global consensus (EPS and revenue) was unavailable for CTA-PA in our SPGI mapping at this time. Values retrieved from S&P Global were unavailable.
External consensus reference: Zacks/Nasdaq reported Q4 operating EPS consensus of $0.42; DuPont delivered $0.51, a beat of $0.09, while sales were “slightly shy” of consensus (exact revenue consensus not provided) .

Key Takeaways for Investors

Operating execution remains strong: broad-based margin expansion, cost savings ahead of plan, and cash generation inflection ($2.28B FCF) support de-leveraging and shareholder returns .
Agriculture timing is transitory: ~$200M seed shipment shift depressed Q4 but should lift Q1 2017 operating EPS ~8% y/y; watch U.S. corn-to-soy shift as a partial headwind .
Auto end-market strength continues to underpin Performance Materials, offsetting price pass-through pressures; monitor raw material pricing and planned Q2 ethylene mini-turnaround .
E&C resilience: Solamet® momentum offsets PV/Tedlar® weakness; innovation cadence remains a lever amid mixed electronics demand .
Merger with Dow is the catalyst: closing targeted for 1H17; transaction costs weigh on GAAP EPS near term, but synergy and portfolio actions should drive medium-term rerating .
Near-term trading: Expect Q1 2017 operating EPS lift versus y/y on timing reversal and cost actions; GAAP EPS optics negative from merger charges—focus on non-GAAP trajectory .

EIDP, Inc. (CTA-PA)·Q4 2016 Earnings Summary