DuPont de Nemours Inc

Current report

Risks related to recent trade disputes, responsive actions, investigations by foreign governments, regulations and policies could have an adverse impact on our operations and reduce the competitiveness or availability of our products relative to local and global competitors.

Current report

Trade regulations, policies and disputes can and have increased tariffs and trade barriers, which can and have limited DuPont’s ability to sell certain products to certain customers, and have otherwise impacted its global supply and distribution chains and research and development activities, particularly those arising out of relations between the U.S. and China. The U.S. government recently announced tariffs on product imports from certain countries, including Canada, Mexico and China. These actions have resulted, and are expected to further result, in responsive actions by impacted countries on U.S. goods and companies. The extent and duration of the tariffs and the resulting impact on general economic conditions and on DuPont’s business are uncertain and depend on various factors, such as negotiations between the U.S. and affected countries, the responses of other countries or regions, exemptions or exclusions that may be granted, availability and cost of alternative sources of merchandise, and DuPont’s buying organization’s ability to execute our merchandise sourcing model to offset the effects of the tariffs.

Current report

In addition, the Company is subject to export control and economic sanctions laws and regulations that restrict the delivery of some products and services to certain countries (and nationals thereof), to certain end users, and for certain end uses. These restrictions have and may in the future prohibit the transfer of certain of DuPont’s products, services and technologies, and have and may in the future require us to obtain a license from the U.S. government before delivering the controlled item or service. Obtaining export licenses may be difficult, costly and time-consuming, and DuPont may fail to receive licenses that it applies for on a timely basis or at all. The Company must also comply with export control and economic sanctions laws and regulations imposed by other countries. DuPont’s export and trade control compliance program may be ineffective or circumvented, exposing us to legal liabilities. Compliance with these laws could significantly limit the Company’s sales in the future.

Current report

Ultimately, changes in, and responses to, U.S. trade controls have the potential to reduce the competitiveness of DuPont products and cause sales to decline, which could have a material adverse effect on the Company’s business, financial condition and results of operations. Such risks may be especially exacerbated as they relate to China and Hong Kong, a market that represented approximately 19% of the Company’s consolidated net sales for the year ended December 31, 2024.

Current report

On April 4, 2025, the Company announced that it was aware of a report that the State Administration for Market Regulation of the People's Republic of China has initiated an investigation in connection with the Company’s Tyvek® business. The investigation is ongoing and DuPont is fully committed to cooperating. DuPont Tyvek® sales to China in full year 2024 were approximately $90 million, less than 1% of DuPont’s 2024 consolidated net sales.

Previous report

The factors described below represent the Company's principal risks related to the Intended Business Separations.

Previous report

DuPont may be unable to achieve all the benefits that it expects to achieve from the Intended Business Separations, if the Intended Business Separations are effected at all.

Previous report

The success of the Intended Business Separations ultimately depends on, among other things, DuPont's ability to internally separate the Electronics and Water businesses in a manner that facilitates the Intended Business Separations on a U.S. federal income tax-free basis and enables the future Electronics and Water companies as well as “new” DuPont, as an industrials-focused company, (the “FutureCos” and each, a “FutureCo”), to benefit from increased focus and agility in their respective industries.

Previous report

DuPont, and each of its businesses, has and continues to benefit from efficiencies through the optimization of its global footprint, leveraging of corporate, procurement and functional services and costs across all of its businesses. While the Intended Business Separations are expected to create dis-synergies, the intent is to stand the FutureCos in a way that is favorably competitive for each FutureCo’s respective industry.

Previous report

The separation and distribution transactions necessary to effectuate the Intended Business Separations will be complex, costly and time-consuming, and are subject to difficulties, uncertainties and unanticipated risks, each of which may diminish the benefits the Company expects to realize from the Intended Business Separations. These include, but are not limited to:

Previous report

•delays, both generally and as a result of failure to satisfy all of the required conditions to the Intended Business Separations;

Previous report

•unanticipated developments or changes, including changes in law, macroeconomic environment, market conditions or regulatory or political conditions;

Previous report

•difficulties in optimizing the Intended Business Separations in an efficient and effective manner to achieve business opportunities and growth prospects;

Previous report

•costs or inefficiencies associated with dis-synergies related to the Intended Business Separations, including due to increased borrowing costs;

Previous report

•the diversion of management’s attention from ongoing business concerns and performance shortfalls at the Company as result of the devotion of management’s attention to the Intended Business Separations;

Previous report

•the possibility of faulty assumptions underlying expectations regarding the integration process, including with respect to the Intended Business Separations;

Previous report

•unanticipated issues in creating information technology, communications programs, financial procedures and operations, and other systems, procedures and policies;

Previous report

•impact on relationships with employees, suppliers, customers, distributors, licensors and other stakeholders;

Previous report

•tax costs or inefficiencies associated with creating the operations of the Intended Business Separations; and

Previous report

•potential negative reactions from the financial markets if the Company fails to complete the Intended Business Separations, as currently expected, within the anticipated time frame or at all.

Previous report

If the Intended Business Separations are completed, each of the FutureCos will incur ongoing costs of operating as independent companies that will no longer be shared, and each of the FutureCos will be smaller, less diversified companies with more limited businesses concentrated in their respective industries than DuPont is today. As a result, the FutureCos may be more vulnerable to changing market conditions, be subject to costs that exceed the Company’s estimates and the Intended Business Separations may result in existing shareholders divesting the stock of the FutureCos where investment strategies no longer align, which may affect the market price of the respective FutureCos’ common stock following the consummation of the Intended Business Separations. Each of these risks may diminish the benefits the Company expects to realize from the Intended Business Separation. Further, if the Intended Business Separations are ultimately not consummated, the anticipated benefits, operational efficiencies, business opportunities and growth prospects may not be realized fully or at all, or may take longer to realize than expected, and the value of common stock, the revenues, levels of expenses and results of operations of the Company and the FutureCos may be adversely affected. In addition, the Company will have incurred costs (which may be significant) without realizing the benefits of such transaction.

Previous report

The Intended Separation Transactions may adversely impact DuPont’s ability to access the capital markets and its cost of capital.

Previous report

The Intended Business Separations may have the effect of, among other things:

Previous report

•requiring the Company to dedicate significant cash flow to the Company’s debt, including, without limitation, the payment of principal and interest, payment of costs associated with the refinance, repayment, redemption, repurchase or exchange of the Company’s outstanding debt, and payment of costs associated with the Intended Business Separations, which will reduce funds the Company has available for other purposes;

Previous report

•exposing the Company to interest rate risk at the time of refinancing outstanding debt or on the portion of the Company’s debt obligations that are issued at variable rates;

Previous report

•increasing the borrowing costs associated with the re-allocation or taking on of new debt; and

Previous report

•although the Company expects to maintain investment grade ratings, resulting in downgrades of the Company’s credit ratings leading to increased borrowing costs to the Company.

Previous report

DuPont’s primary sources of liquidity to finance operations, including stock repurchases and dividends on its common stock, is cash generated by its businesses and access to the debt capital markets. Further, DuPont expects to repay, redeem, repurchase or exchange all of its senior notes, of which there are about $7.1 billion aggregate principal amount outstanding, with maturities in 2025, 2028, 2038 and 2048. If the Company’s ability to continue to raise money in the debt capital markets is impaired, or if there is a significant increase in the cost of debt, there may be a significant negative effect on the Company’s liquidity. If the Company is unable to generate sufficient cash flow or maintain access to adequate external financing, it could restrict the Company’s current operations, activities under its current and future stock buyback programs, and the Company’s growth opportunities, which could adversely affect the Company’s operating results.

Previous report

If either distribution, together with certain related transactions, were to fail to qualify for non-recognition treatment for U.S. federal income tax purposes, then DuPont could be subject to significant tax liability.

Previous report

It is expected that DuPont will receive a tax opinion from Skadden, Arps, Slate, Meagher & Flom LLP, its tax counsel, as a condition to each distribution, in form and substance acceptable to DuPont, substantially to the effect that, among other things, each such distribution along with certain related transactions will qualify for non-recognition treatment under the Internal Revenue Code of 1986, as amended (the “Code,” and such opinion, the “Tax Opinion”). The Tax Opinion is expected to rely on certain facts, assumptions, and undertakings, and certain representations from DuPont and the FutureCos, regarding the past and future conduct of each of the three businesses and other matters. Notwithstanding the receipt of the Tax Opinion, the Internal Revenue Service (the “IRS”) could determine on audit that either, or both, of the distributions and/or certain related transactions should be treated as taxable transactions if it determines that any of these facts, assumptions, representations or undertakings are not correct or have been violated, or that the distributions should be taxable for other reasons, including if the IRS were to disagree with the conclusions of the Tax Opinion. If the distributions and/or certain related transactions fail to qualify for tax-free treatment under U.S. federal, state and local tax law and/or foreign tax law, it is expected that DuPont could incur significant tax liabilities under U.S. federal, state, local and/or foreign tax law.

Previous report

Generally, corporate taxes resulting from the failure of a distribution to qualify for tax-free treatment for U.S. federal income tax purposes would be imposed on DuPont. Under a tax matters agreement expected to be entered into between DuPont and the FutureCos, the responsibility for such taxes may be allocated to the FutureCos under certain circumstances and each FutureCo may be obligated to indemnify DuPont against any such taxes imposed on it. To the extent that DuPont is responsible for any liability as a result of the failure of either distribution and/or certain related transactions to qualify for non-recognition treatment for U.S. federal income tax purposes, there could be a material adverse impact on DuPont’s business, financial condition, results of operations and cash flows in reporting periods following the Intended Business Separations.