WILMINGTON, Del., Oct. 25, 2016 /PRNewswire/ --
Third-Quarter Highlights
- GAAP1 earnings per share totaled $0.01 versus $0.14
in prior year. Operating earnings2 per
share increased to $0.34 from
$0.13 in prior year.
- Sales of $4.9 billion
increased 1 percent. Volumes grew 3 percent on increased demand
primarily in Performance Materials, Agriculture, Nutrition &
Health, and Industrial Biosciences. Local prices declined by 2
percent.
- Total company gross margins expanded 45 basis points. GAAP
(loss) from continuing operations before taxes was $(56) million, including charges of $(280) million related to an asset impairment and
transaction costs. Prior year GAAP income of $227 million included a benefit of $147 million from insurance recoveries.
- Total segment pre-tax operating
earnings2 of $607
million increased 40 percent. Total segment operating
margins increased about 350 basis points, and operating margins
expanded in all reportable segments.
- GAAP operating costs3 increased by 2 percent.
Excluding significant items and non-operating pension/OPEB costs,
operating costs2 declined by 14 percent versus prior
year.
- Free cash flow4 improved by about $1.3 billion year-to-date primarily due to
working capital improvements and lower capital
expenditures.
- DuPont now expects full-year 2016 GAAP earnings to be about
$2.71 per share, an increase of 30
percent from prior year. 2016 operating
earnings2 are now expected to increase 17
percent versus prior year to $3.25
per share.
DuPont (NYSE: DD), a science company that brings world-class,
innovative products, materials, and services to the global
marketplace, today announced third-quarter 2016 GAAP earnings of
$0.01 per share and operating
earnings2 of $0.34
per share. Prior year GAAP and operating earnings2
were $0.14 and $0.13 per share, respectively. Refer to
Schedule B for details of significant items excluded from operating
earnings per share.
Third-quarter 2016 sales totaled $4.9
billion, up 1 percent versus prior year as 3-percent volume
growth more than offset 2-percent lower local price.
Free cash flow4 improvement of $1.3 billion year-to-date reflected improvements
in working capital, lower tax payments, lower capital expenditures
and the absence of Chemours cash outflows.
"This quarter we continued the strong momentum from the first
half of the year. We increased segment operating earnings 40
percent, expanded operating margins in each reportable segment,
reduced costs, grew volumes and improved free cash flow. As a
result of our continued performance and progress against strategic
initiatives, we are raising our operating earnings guidance for the
year," said Ed Breen, chairman and
CEO of DuPont. "We also are making progress preparing for the
merger with Dow. We developed an organizational design that
fosters innovation and takes advantage of our market connections to
drive growth. In addition, we have finalized plans to realize our
cost synergies. We continue to work constructively with regulators
in key jurisdictions to close the merger as soon as possible. In
the event that regulators in those jurisdictions use their full
allotted time, closing would be expected to occur in the first
quarter of 2017. We expect the intended spins to occur about 18
months after closing."
Global
Consolidated Net Sales – 3rd Quarter
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
|
|
September 30,
2016
|
|
Percent Change Due
to:
|
|
|
|
|
%
|
|
Local Price
and
|
|
|
|
|
|
Portfolio
/
|
|
|
$
|
|
Change
|
|
Product
Mix**
|
|
Currency
|
|
Volume**
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. & Canada
|
|
$
1,597
|
|
1
|
|
(4)
|
|
-
|
|
6
|
|
(1)
|
EMEA *
|
|
1,133
|
|
(5)
|
|
-
|
|
(2)
|
|
(2)
|
|
(1)
|
Asia
Pacific
|
|
1,421
|
|
7
|
|
(1)
|
|
-
|
|
6
|
|
2
|
Latin America
|
|
766
|
|
-
|
|
(1)
|
|
4
|
|
(3)
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Consolidated
Sales
|
$
4,917
|
|
1
|
|
(2)
|
|
-
|
|
3
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Europe,
Middle East & Africa
|
|
|
|
|
|
|
|
|
|
|
** Organic sales
growth is defined as the sum of local price and product mix and
volume.
|
|
|
Segment Net Sales
– 3rd Quarter
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
|
|
September 30,
2016
|
|
Percent Change Due
to:
|
|
|
|
|
|
|
Local Price
and
|
|
|
|
|
|
Portfolio
/
|
|
|
$
|
|
% Change
|
|
Product
Mix
|
|
Currency
|
|
Volume
|
|
Other
|
(Dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
Agriculture
|
|
$
1,119
|
|
2
|
|
(3)
|
|
2
|
|
4
|
|
(1)
|
Electronics &
Communications
|
493
|
|
(7)
|
|
(1)
|
|
-
|
|
(6)
|
|
-
|
Industrial
Biosciences
|
|
392
|
|
5
|
|
-
|
|
(1)
|
|
5
|
|
1
|
Nutrition &
Health
|
|
823
|
|
2
|
|
(1)
|
|
(1)
|
|
4
|
|
-
|
Performance
Materials
|
|
1,334
|
|
2
|
|
(2)
|
|
-
|
|
4
|
|
-
|
Protection
Solutions
|
|
722
|
|
-
|
|
(1)
|
|
-
|
|
1
|
|
-
|
Other
|
|
34
|
|
|
|
|
|
|
|
|
|
|
Consolidated Net
Sales
|
|
$
4,917
|
|
1
|
|
(2)
|
|
-
|
|
3
|
|
-
|
Operating
Earnings(2)- 3rd Quarter
|
|
|
|
|
|
|
|
|
|
|
|
|
Change vs.
2015
|
(Dollars in
millions)
|
3Q16
|
|
3Q15
|
|
$
|
|
%
|
Agriculture
|
$
(189)
|
|
$
(210)
|
|
$
21
|
|
10%
|
Electronics &
Communications
|
108
|
|
104
|
|
4
|
|
4%
|
Industrial
Biosciences
|
78
|
|
61
|
|
17
|
|
28%
|
Nutrition &
Health
|
135
|
|
102
|
|
33
|
|
32%
|
Performance
Materials
|
371
|
|
317
|
|
54
|
|
17%
|
Protection
Solutions
|
162
|
|
146
|
|
16
|
|
11%
|
Other
|
(58)
|
|
(87)
|
|
29
|
|
33%
|
Total segment
operating earnings (5)
|
607
|
|
433
|
|
174
|
|
40%
|
|
|
|
|
|
|
|
|
Exchange gains
(losses) (6)
|
(76)
|
|
(36)
|
|
(40)
|
|
nm
|
Corporate expenses
(5)
|
(83)
|
|
(111)
|
|
28
|
|
-25%
|
Interest
expense
|
(93)
|
|
(82)
|
|
(11)
|
|
13%
|
Operating earnings
before income taxes (2)
|
355
|
|
204
|
|
151
|
|
74%
|
Provision for income
taxes on operating earnings (2)
|
(53)
|
|
(87)
|
|
34
|
|
|
Less: Net income
attributable to noncontrolling interests
|
4
|
|
—
|
|
4
|
|
|
Operating earnings
(2)
|
$
298
|
|
$
117
|
|
$
181
|
|
155%
|
|
|
|
|
|
|
|
|
Operating earnings
per share (2)
|
$0.34
|
|
$0.13
|
|
$
0.21
|
|
162%
|
GAAP earnings per
share
|
$0.01
|
|
$0.14
|
|
$
(0.13)
|
|
-93%
|
|
|
|
|
|
|
|
|
(5) See Schedules B
and C for listing of significant items.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6) See Schedule D
for additional information on exchange gains and losses.
|
|
|
|
|
The following is a summary of business results for each of the
company's reportable segments comparing the third quarter with the
prior year.
Agriculture - A seasonal operating loss of
$189 million improved $21 million, or 10 percent, as cost savings,
higher volumes and a $28 million
benefit from currency were partially offset by lower local price
and higher product costs. Increased seed volumes were
partially offset by lower fungicide and insecticide volumes.
Increased seed prices were more than offset by lower crop
protection prices. Prior year operating earnings included a
$27 million gain from asset sales and
a $21 million benefit related to
prior periods. Operating margins expanded by 230 basis
points.
Electronics & Communications - Operating
earnings of $108 million increased
$4 million, or 4 percent, as cost
savings more than offset lower demand, driven by declines in
Tedlar® film and continued weakness in consumer
electronics. Operating margins expanded by about 240 basis
points.
Industrial Biosciences - Operating earnings of
$78 million increased $17 million, or 28 percent, as increased demand
in bioactives and biomaterials and cost savings more than offset
lower volume in CleanTech. Demand in bioactives increased due
to growth in home and personal care while strength in biomaterials
reflected growth in the apparel market. Operating margins
expanded by 360 basis points.
Nutrition & Health - Operating earnings of
$135 million increased $33 million, or 32 percent, on continued
broad-based volume growth led by probiotics, cultures and
ingredient systems; cost savings; and lower product costs.
Operating margins expanded by 380 basis points.
Performance Materials - Operating earnings of
$371 million increased $54 million, or 17 percent. Cost savings,
increased demand in automotive markets (primarily in China), and lower product costs more than
offset a $14 million negative impact
from currency, as well as the absence of a $16 million net benefit from a joint venture in
the prior year. Operating margins expanded by about 350 basis
points.
Protection Solutions - Operating earnings of
$162 million increased $16 million, or 11 percent, driven by cost
savings and increased volumes. Volume growth was driven by
increased demand in Tyvek® protective materials and
surfaces, primarily in North America. Operating margins
expanded by 225 basis points.
2016 Outlook
The company now expects full-year 2016 GAAP earnings to be about
$2.71 per share, an increase of 30
percent from prior year. Full-year 2016 operating
earnings2 are now expected to increase 17 percent versus
prior year to $3.25 per share, up
from our previously communicated range of $3.15 - $3.20 per share. The estimated headwind
from a higher base tax rate is now expected to be about
$0.07 per share. The company
continues to expect a benefit of $0.64 per share from the 2016 global cost savings
and restructuring plan and a headwind from currency of about
$0.15 per share. The company's
full-year 2016 GAAP earnings include an expected charge of about
$0.37 per share for transaction costs
associated with the planned merger with Dow.
DuPont will hold a conference call and webcast on Tuesday, Oct. 25, 2016, at 8:00 AM EDT to discuss this news release.
The webcast and additional presentation materials can be accessed
by visiting the company's investor website (Events &
Presentations) at www.investors.dupont.com. A replay of the
conference call webcast will be available for 90 days by calling
1-630-652-3042, Passcode 6102133#. For additional information
see the investor center at http://www.dupont.com.
Use of Non-GAAP Measures
This earnings release includes information that does not conform
to U.S. generally accepted accounting principles (GAAP) and are
considered non-GAAP measures. These measures include the
company's consolidated results and earnings per share on an
operating earnings basis, which excludes significant items and
non-operating pension and other postretirement employee benefit
costs (operating earnings and operating EPS), total segment pre-tax
operating earnings, operating costs and corporate expenses on an
operating earnings basis. Management uses these measures
internally for planning, forecasting and evaluating the performance
of the company's segments, including allocating resources and
evaluating incentive compensation. From a liquidity
perspective, management uses free cash flow, which is defined as
cash provided/used by operating activities less purchases of
property, plant and equipment. Free cash flow is useful to
investors and management to evaluate the company's cash flow and
financial performance, and is an integral financial measure used in
the company's financial planning process. Management believes that
these non-GAAP measurements are meaningful to investors as they
provide insight with respect to ongoing operating results of the
company and provide a more useful comparison of year-over-year
results. These non-GAAP measurements supplement our GAAP
disclosures and should not be viewed as an alternative to GAAP
measures of performance. Reconciliations of non-GAAP measures
to GAAP are provided in schedules A, C and D. Details of
significant items are provided in schedule B.
About DuPont
DuPont (NYSE: DD) has been bringing world-class science and
engineering to the global marketplace in the form of innovative
products, materials, and services since 1802. The company
believes that by collaborating with customers, governments, NGOs,
and thought leaders we can help find solutions to such global
challenges as providing enough healthy food for people everywhere,
decreasing dependence on fossil fuels, and protecting life and the
environment. For additional information about DuPont and its
commitment to inclusive innovation, please visit
http://www.dupont.com.
Forward-Looking Statements: This communication contains
"forward-looking statements" within the meaning of the federal
securities laws, including Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of
1934, as amended. In this context, forward-looking statements often
address expected future business and financial performance and
financial condition, and often contain words such as "expect,"
"anticipate," "intend," "plan," "believe," "seek," "see," "will,"
"would," "target," similar expressions, and variations or negatives
of these words.
Forward-looking statements by their nature address matters that
are, to different degrees, uncertain, such as statements about the
consummation of the proposed transaction and the anticipated
benefits thereof. Forward-looking statements are not guarantees of
future performance and are based on certain assumptions and
expectations of future events which may not be realized.
Forward-looking statements also involve risks and uncertainties,
many of which are beyond the company's control. Some of the
important factors that could cause the company's actual results to
differ materially from those projected in any such forward-looking
statements are: fluctuations in energy and raw material prices;
failure to develop and market new products and optimally manage
product life cycles; ability to respond to market acceptance,
rules, regulations and policies affecting products based on
biotechnology and, in general, for products for the agriculture
industry; outcome of significant litigation and environmental
matters, including realization of associated indemnification
assets, if any; failure to appropriately manage process safety and
product stewardship issues; changes in laws and regulations or
political conditions; global economic and capital markets
conditions, such as inflation, interest and currency exchange
rates; business or supply disruptions; security threats, such as
acts of sabotage, terrorism or war, natural disasters and weather
events and patterns which could affect demand as well as
availability of products for the agriculture industry; ability to
protect and enforce the company's intellectual property rights;
successful integration of acquired businesses and separation of
underperforming or non-strategic assets or businesses; and risks
related to the agreement entered on December
11, 2015, with The Dow Chemical Company pursuant to which
the companies have agreed to effect an all-stock merger of equals,
including the completion of the proposed transaction on anticipated
terms and timing, the ability to fully and timely realize the
expected benefits of the proposed transaction and risks related to
the intended business separations contemplated to occur after the
completion of the proposed transaction. Important risk factors
relating to the proposed transaction and intended business
separations include, but are not limited to, (i) the
completion of the proposed transaction on anticipated terms and
timing, including obtaining regulatory approvals, anticipated
tax treatment, unforeseen liabilities, future capital expenditures,
revenues, expenses, earnings, synergies, economic performance,
indebtedness, financial condition, losses, future prospects,
business and management strategies for the management, expansion
and growth of the new combined company's operations and other
conditions to the completion of the merger, (ii) the ability of Dow
and DuPont to integrate the business successfully and to achieve
anticipated synergies, risks and costs and pursuit and/or
implementation of the potential separations, including anticipated
timing, any changes to the configuration of businesses included in
the potential separation if implemented, (iii) the intended
separation of the agriculture, material science and specialty
products businesses of the combined company post-mergers in one or
more tax efficient transactions on anticipated terms and timing,
including a number of conditions which could delay, prevent or
otherwise adversely affect the proposed transactions, including
possible issues or delays in obtaining required regulatory
approvals or clearances, disruptions in the financial markets or
other potential barriers, (iv) potential litigation relating to the
proposed transaction that could be instituted against Dow, DuPont
or their respective directors, (v) the risk that disruptions from
the proposed transaction will harm Dow's or DuPont's business,
including current plans and operations, (vi) the ability of Dow or
DuPont to retain and hire key personnel, (vii) potential adverse
reactions or changes to business relationships resulting from the
announcement or completion of the merger, (viii) uncertainty as to
the long-term value of DowDuPont common stock, (ix) continued
availability of capital and financing and rating agency actions,
(x) legislative, regulatory and economic developments, (xi)
potential business uncertainty, including changes to existing
business relationships, during the pendency of the merger that
could affect Dow's and/or DuPont's financial performance, (xii)
certain restrictions during the pendency of the merger that may
impact Dow's or DuPont's ability to pursue certain business
opportunities or strategic transactions and (xiii) unpredictability
and severity of catastrophic events, including, but not limited to,
acts of terrorism or outbreak of war or hostilities, as well as
management's response to any of the aforementioned factors. These
risks, as well as other risks associated with the proposed merger,
are more fully discussed in the joint proxy statement/prospectus
included in the registration statement on Form S-4 declared
effective by the SEC on June 9, 2016
(File No. 333-209869), as last amended, (the "Registration
Statement") in connection with the proposed merger. While the list
of factors presented here is, and the list of factors presented in
the Registration Statement are, considered representative, no such
list should be considered to be a complete statement of all
potential risks and uncertainties. Unlisted factors may present
significant additional obstacles to the realization of
forward-looking statements. Consequences of material differences in
results as compared with those anticipated in the forward-looking
statements could include, among other things, business disruption,
operational problems, financial loss, legal liability to third
parties and similar risks, any of which could have a material
adverse effect on Dow's or DuPont's consolidated financial
condition, results of operations, credit rating or liquidity.
Neither Dow nor DuPont assumes any obligation to publicly provide
revisions or updates to any forward-looking statements regarding
the proposed transaction and intended business separations, whether
as a result of new information, future developments or otherwise,
should circumstances change, except as otherwise required by
securities and other applicable laws. The company undertakes no
duty to publicly revise or update any forward-looking statements as
a result of future developments, or new information or otherwise,
should circumstances change, except as otherwise required by
securities and other applicable laws.
E.I. du Pont de
Nemours and Company
|
Consolidated Income
Statements
|
(Dollars in
millions, except per share amounts)
|
|
SCHEDULE
A
|
|
|
|
|
|
|
|
|
Three Months
Ended September 30,
|
|
Nine Months
Ended September 30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Net sales
|
$
|
4,917
|
|
|
$
|
4,873
|
|
|
$
|
19,383
|
|
|
$
|
19,831
|
|
Cost of goods
sold
|
3,090
|
|
|
3,084
|
|
|
11,322
|
|
|
11,703
|
|
Other operating
charges (1)
|
176
|
|
|
91
|
|
|
504
|
|
|
413
|
|
Selling, general and
administrative expenses (1)
|
1,016
|
|
|
1,046
|
|
|
3,355
|
|
|
3,540
|
|
Research and
development expense
|
410
|
|
|
441
|
|
|
1,260
|
|
|
1,415
|
|
Other (loss) income,
net (1)
|
(16)
|
|
|
98
|
|
|
407
|
|
|
552
|
|
Interest expense
(1)
|
93
|
|
|
82
|
|
|
278
|
|
|
260
|
|
Employee separation /
asset related charges, net (1)
|
172
|
|
|
—
|
|
|
159
|
|
|
40
|
|
|
|
|
|
|
|
|
|
(Loss) Income from
continuing operations before income taxes
|
(56)
|
|
|
227
|
|
|
2,912
|
|
|
3,012
|
|
(Benefit from)
Provision for income taxes on continuing operations
(1)
|
(69)
|
|
|
96
|
|
|
643
|
|
|
886
|
|
Income from
continuing operations after income taxes
|
13
|
|
|
131
|
|
|
2,269
|
|
|
2,126
|
|
(Loss) Income from
discontinued operations after income taxes
|
(7)
|
|
|
104
|
|
|
(7)
|
|
|
89
|
|
|
|
|
|
|
|
|
|
Net income
|
6
|
|
|
235
|
|
|
2,262
|
|
|
2,215
|
|
|
|
|
|
|
|
|
|
Less: Net
income attributable to noncontrolling interests
|
4
|
|
|
—
|
|
|
14
|
|
|
9
|
|
|
|
|
|
|
|
|
|
Net income
attributable to DuPont
|
$
|
2
|
|
|
$
|
235
|
|
|
$
|
2,248
|
|
|
$
|
2,206
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss)
per share of common stock:
|
|
|
|
|
|
|
|
Basic earnings per
share of common stock from continuing operations
|
$
|
0.01
|
|
|
$
|
0.14
|
|
|
$
|
2.57
|
|
|
$
|
2.34
|
|
Basic (loss) earnings
per share of common stock from discontinued operations
|
(0.01)
|
|
|
0.12
|
|
|
(0.01)
|
|
|
0.10
|
|
Basic earnings per
share of common stock (2)
|
$
|
—
|
|
|
$
|
0.26
|
|
|
$
|
2.56
|
|
|
$
|
2.44
|
|
|
|
|
|
|
|
|
|
Diluted earnings
(loss) per share of common stock:
|
|
|
|
|
|
|
|
Diluted earnings per
share of common stock from continuing operations
|
$
|
0.01
|
|
|
$
|
0.14
|
|
|
$
|
2.56
|
|
|
$
|
2.33
|
|
Diluted (loss)
earnings per share of common stock from discontinued
operations
|
(0.01)
|
|
|
0.12
|
|
|
(0.01)
|
|
|
0.10
|
|
Diluted earnings per
share of common stock (2)
|
$
|
—
|
|
|
$
|
0.26
|
|
|
$
|
2.55
|
|
|
$
|
2.43
|
|
|
|
|
|
|
|
|
|
Dividends per share
of common stock
|
$
|
0.38
|
|
|
$
|
0.38
|
|
|
$
|
1.14
|
|
|
$
|
1.34
|
|
|
|
|
|
|
|
|
|
Average number of
shares outstanding used in earnings (loss) per share (EPS)
calculation:
|
|
|
|
|
|
|
|
Basic
|
874,292,000
|
|
|
887,275,000
|
|
|
874,274,000
|
|
|
899,883,000
|
|
Diluted
|
879,391,000
|
|
|
891,286,000
|
|
|
878,606,000
|
|
|
905,522,000
|
|
Reconciliation of
Non-GAAP Measures
|
|
|
|
|
|
|
|
|
|
|
|
Summary of
Earnings Comparison
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2016
|
|
2015
|
|
%
Change
|
|
2016
|
|
2015
|
|
%
Change
|
Income from
continuing operations after income taxes (GAAP)
|
$
|
13
|
|
|
$
|
131
|
|
|
(90)%
|
|
|
$
|
2,269
|
|
|
$
|
2,126
|
|
|
7
|
%
|
Less: Significant
items (charge) benefit included in income from
continuing
operations after
income taxes (per Schedule B)
|
(216)
|
|
|
88
|
|
|
|
|
(37)
|
|
|
63
|
|
|
|
Non-operating
pension/OPEB costs included in income from continuing
operations after
income taxes (3)
|
(73)
|
|
|
(74)
|
|
|
|
|
(208)
|
|
|
(210)
|
|
|
|
Net income
attributable to noncontrolling interest from continuing
operations
|
4
|
|
|
—
|
|
|
|
|
14
|
|
|
9
|
|
|
|
Operating earnings
(Non-GAAP) (4)
|
$
|
298
|
|
|
$
|
117
|
|
|
155
|
%
|
|
$
|
2,500
|
|
|
$
|
2,264
|
|
|
10
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
from continuing operations (GAAP)
|
$
|
0.01
|
|
|
$
|
0.14
|
|
|
(93)%
|
|
|
$
|
2.56
|
|
|
$
|
2.33
|
|
|
10
|
%
|
Less: Significant
items (charge) benefit included in EPS (per Schedule B)
|
(0.25)
|
|
|
0.10
|
|
|
|
|
(0.04)
|
|
|
0.07
|
|
|
|
Non-operating
pension/OPEB costs included in EPS (3)
|
(0.08)
|
|
|
(0.09)
|
|
|
|
|
(0.24)
|
|
|
(0.23)
|
|
|
|
Operating earnings
per share (Non-GAAP) (4)
|
$
|
0.34
|
|
|
$
|
0.13
|
|
|
162
|
%
|
|
$
|
2.84
|
|
|
$
|
2.49
|
|
|
14
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
E.I. du Pont de
Nemours and Company
|
Condensed
Consolidated Balance Sheets
|
(Dollars in
millions, except per share amounts)
|
|
SCHEDULE A
(continued)
|
|
|
|
|
September
30, 2016
|
|
December
31, 2015
|
Assets
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
4,452
|
|
|
$
|
5,300
|
|
Marketable
securities
|
|
1,080
|
|
|
906
|
|
Accounts and notes
receivable, net
|
|
7,073
|
|
|
4,643
|
|
Inventories
|
|
5,168
|
|
|
6,140
|
|
Prepaid
expenses
|
|
525
|
|
|
398
|
|
Total current
assets
|
|
18,298
|
|
|
17,387
|
|
Property, plant
and equipment, net of accumulated
depreciation
(September 30, 2016 - $14,895; December
31, 2015 - $14,346)
|
|
9,654
|
|
|
9,784
|
|
Goodwill
|
|
4,267
|
|
|
4,248
|
|
Other intangible
assets
|
|
3,787
|
|
|
4,144
|
|
Investment in
affiliates
|
|
687
|
|
|
688
|
|
Deferred income
taxes
|
|
4,466
|
|
|
3,799
|
|
Other
assets
|
|
1,322
|
|
|
1,116
|
|
Total
|
|
$
|
42,481
|
|
|
$
|
41,166
|
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Accounts
payable
|
|
$
|
2,627
|
|
|
$
|
3,398
|
|
Short-term borrowings
and capital lease obligations
|
|
3,242
|
|
|
1,165
|
|
Income
taxes
|
|
109
|
|
|
173
|
|
Other accrued
liabilities
|
|
3,132
|
|
|
5,580
|
|
Total current
liabilities
|
|
9,110
|
|
|
10,316
|
|
Long-term
borrowings and capital lease obligations
|
|
8,114
|
|
|
7,642
|
|
Other
liabilities
|
|
14,927
|
|
|
12,591
|
|
Deferred income
taxes
|
|
376
|
|
|
417
|
|
Total
liabilities
|
|
32,527
|
|
|
30,966
|
|
|
|
|
|
|
Commitments and
contingent liabilities
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
Preferred
stock
|
|
237
|
|
|
237
|
|
Common stock, $0.30
par value; 1,800,000,000 shares authorized;
Issued at September 30, 2016 - 956,356,000;
December 31, 2015 - 958,388,000
|
|
287
|
|
|
288
|
|
Additional paid-in
capital
|
|
11,214
|
|
|
11,081
|
|
Reinvested
earnings
|
|
15,407
|
|
|
14,510
|
|
Accumulated other
comprehensive loss
|
|
(10,667)
|
|
|
(9,396)
|
|
Common stock held in
treasury, at cost (87,041,000 shares at September 30, 2016 and
December 31, 2015)
|
|
(6,727)
|
|
|
(6,727)
|
|
Total DuPont
stockholders' equity
|
|
9,751
|
|
|
9,993
|
|
Noncontrolling
interests
|
|
203
|
|
|
207
|
|
Total
equity
|
|
9,954
|
|
|
10,200
|
|
Total
|
|
$
|
42,481
|
|
|
$
|
41,166
|
|
E.I. du Pont de
Nemours and Company
|
Condensed
Consolidated Statement of Cash Flows
|
(Dollars in
millions)
|
|
SCHEDULE A
(continued)
|
|
|
Nine Months
Ended September 30,
|
|
2016
|
|
2015
|
Total
Company
|
|
|
|
|
|
|
|
Net income
|
$
|
2,262
|
|
|
$
|
2,215
|
|
Adjustments to
reconcile net income to cash used for operating
activities:
|
|
|
|
Depreciation
|
707
|
|
|
856
|
|
Amortization of
intangible assets
|
272
|
|
|
307
|
|
Net periodic pension
benefit cost
|
474
|
|
|
445
|
|
Contributions to
pension plans
|
(427)
|
|
|
(260)
|
|
Gain on sale of
businesses and other assets
|
(385)
|
|
|
(48)
|
|
Other operating
activities - net
|
668
|
|
|
89
|
|
Change in operating
assets and liabilities - net
|
(4,648)
|
|
|
(5,449)
|
|
Cash used for
operating activities
|
(1,077)
|
|
|
(1,845)
|
|
Investing
activities
|
|
|
|
Purchases of
property, plant and equipment
|
(759)
|
|
|
(1,291)
|
|
Investments in
affiliates
|
(2)
|
|
|
(59)
|
|
Payments for
businesses - net of cash acquired
|
—
|
|
|
(77)
|
|
Proceeds from sale of
businesses and other assets - net
|
240
|
|
|
79
|
|
Net increase in
short-term financial instruments
|
(168)
|
|
|
(252)
|
|
Foreign currency
exchange contract settlements
|
(370)
|
|
|
543
|
|
Other investing
activities - net
|
(16)
|
|
|
12
|
|
Cash used for
investing activities
|
(1,075)
|
|
|
(1,045)
|
|
Financing
activities
|
|
|
|
Dividends paid to
stockholders
|
(1,004)
|
|
|
(1,210)
|
|
Net increase in
borrowings
|
2,576
|
|
|
3,262
|
|
Repurchase of common
stock
|
(416)
|
|
|
(2,353)
|
|
Proceeds from
exercise of stock options
|
140
|
|
|
208
|
|
Cash transferred to
Chemours at spin-off
|
—
|
|
|
(250)
|
|
Other financing
activities - net
|
(16)
|
|
|
(87)
|
|
Cash provided by
(used for) financing activities
|
1,280
|
|
|
(430)
|
|
Effect of exchange
rate changes on cash
|
24
|
|
|
(266)
|
|
Decrease in cash
and cash equivalents
|
(848)
|
|
|
(3,586)
|
|
Cash and cash
equivalents at beginning of period
|
5,300
|
|
|
6,910
|
|
Cash and cash
equivalents at end of period
|
$
|
4,452
|
|
|
$
|
3,324
|
|
|
|
|
|
Reconciliation of
Non-GAAP Measure
|
|
|
|
Calculation of
Free Cash Flow - Total Company
|
|
|
|
|
Nine Months Ended
September 30,
|
|
2016
|
|
2015
|
Cash used for
operating activities (GAAP)
|
$
|
(1,077)
|
|
|
$
|
(1,845)
|
|
Purchases of
property, plant and equipment
|
(759)
|
|
|
(1,291)
|
|
Free cash flow
(Non-GAAP)
|
$
|
(1,836)
|
|
|
$
|
(3,136)
|
|
|
|
|
|
(1) See
Schedule B for detail of significant items.
|
(2) The
sum of the individual earnings per share amounts from continuing
operations and discontinued operations may not equal the total
company earnings per share amounts due to rounding.
|
(3) Year
to date September 30, 2015, non-operating pension/OPEB costs
includes a $23 exchange loss on foreign pension
balances.
|
(4)
Operating earnings and operating earnings per share are defined as
earnings from continuing operations excluding significant items and
non-operating pension/OPEB costs. Non-operating pension/OPEB costs
includes all of the components of net periodic benefit cost from
continuing operations with the exception of the service cost
component.
|
E.I. du Pont de
Nemours and Company
|
Schedule of
Significant Items from Continuing Operations
|
(Dollars in
millions, except per share amounts)
|
|
SCHEDULE
B
|
|
|
|
|
|
|
|
|
|
|
SIGNIFICANT
ITEMS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax
|
|
After-tax
|
|
($ Per
Share)
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
1st
Quarter
|
|
|
|
|
|
|
|
|
|
|
|
Transaction costs
(1)
|
$
|
(24)
|
|
|
$
|
(12)
|
|
|
$
|
(21)
|
|
|
$
|
(11)
|
|
|
$
|
(0.02)
|
|
|
$
|
(0.01)
|
|
Customer claims
adjustment/recovery (4)
|
23
|
|
|
35
|
|
|
15
|
|
|
22
|
|
|
0.02
|
|
|
0.02
|
|
Gain on sale of
entity (5)
|
369
|
|
|
—
|
|
|
214
|
|
|
—
|
|
|
0.24
|
|
|
—
|
|
Restructuring
charges, net (2)
|
(77)
|
|
|
—
|
|
|
(48)
|
|
|
—
|
|
|
(0.06)
|
|
|
—
|
|
Asset impairment
charge (3)
|
—
|
|
|
(37)
|
|
|
—
|
|
|
(30)
|
|
|
—
|
|
|
(0.03)
|
|
Ukraine devaluation
(6)
|
—
|
|
|
(40)
|
|
|
—
|
|
|
(38)
|
|
|
—
|
|
|
(0.04)
|
|
1st Quarter -
Total
|
$
|
291
|
|
|
$
|
(54)
|
|
|
$
|
160
|
|
|
$
|
(57)
|
|
|
$
|
0.18
|
|
|
$
|
(0.06)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2nd
Quarter
|
|
|
|
|
|
|
|
|
|
|
|
Transaction costs
(1)
|
$
|
(76)
|
|
|
$
|
(25)
|
|
|
$
|
(59)
|
|
|
$
|
(38)
|
|
|
$
|
(0.07)
|
|
|
$
|
(0.04)
|
|
Customer claims
recovery (4)
|
30
|
|
|
—
|
|
|
19
|
|
|
—
|
|
|
0.02
|
|
|
—
|
|
Restructuring
adjustments / charges (2)
|
90
|
|
|
(2)
|
|
|
59
|
|
|
(2)
|
|
|
0.07
|
|
|
—
|
|
Litigation settlement
(7)
|
—
|
|
|
112
|
|
|
—
|
|
|
72
|
|
|
—
|
|
|
0.08
|
|
2nd Quarter -
Total
|
$
|
44
|
|
|
$
|
85
|
|
|
$
|
19
|
|
|
$
|
32
|
|
|
$
|
0.02
|
|
|
$
|
0.04
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3rd
Quarter
|
|
|
|
|
|
|
|
|
|
|
|
Transaction costs
(1)
|
$
|
(122)
|
|
|
$
|
(9)
|
|
|
$
|
(91)
|
|
|
$
|
(6)
|
|
|
$
|
(0.10)
|
|
|
$
|
(0.01)
|
|
Restructuring
charges, net(2)
|
(17)
|
|
|
—
|
|
|
(14)
|
|
|
—
|
|
|
(0.02)
|
|
|
—
|
|
Asset impairment
charge(3)
|
(158)
|
|
|
|
|
(111)
|
|
|
|
|
(0.13)
|
|
|
|
Customer claims
adjustment/recovery (4)
|
—
|
|
|
147
|
|
|
—
|
|
|
94
|
|
|
—
|
|
|
0.11
|
|
3rd Quarter -
Total
|
$
|
(297)
|
|
|
$
|
138
|
|
|
$
|
(216)
|
|
|
$
|
88
|
|
|
$
|
(0.25)
|
|
|
$
|
0.10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-to-date Total
(8)
|
$
|
38
|
|
|
$
|
169
|
|
|
$
|
(37)
|
|
|
$
|
63
|
|
|
$
|
(0.04)
|
|
|
$
|
0.07
|
|
E.I. du Pont de
Nemours and Company
|
Schedule of
Significant Items from Continuing Operations
|
(Dollars in
millions, except per share amounts)
|
|
(1)
|
Third, second and
first quarter 2016 included charges of $(122), $(76) and $(24),
respectively, recorded in selling, general and administrative
expenses related to costs associated with the planned merger with
The Dow Chemical Company and related activities.
|
|
|
|
Third quarter and
first quarter 2015 included charges of $(9) and $(12) respectively,
recorded in other operating charges associated with transaction
costs related to the separation of the Performance Chemicals
segment. Second quarter 2015 included charges of $(25) associated
with transaction costs related to the separation of the Performance
Chemicals segment consisting of $(5) recorded in other operating
charges and $(20) recorded in interest expense. Second
quarter 2015 also includes a tax charge of $(17) due to a state tax
rate change associated with the separation.
|
|
|
(2)
|
Third, second and
first quarter 2016 included (charges) / benefits of $(17), $90 and
$(2), respectively, associated with the 2016 Global Cost Savings
and Restructuring Program. The charges in the third and
first quarters were primarily due to identification of additional
asset related charges with the first quarter charge being offset by
reduction in severance and related benefit costs. The second
quarter benefit was primarily due to the reduction in severance and
related benefit costs due to the elimination of positions at a
lower cost than expected. The third quarter charge consisted
of $(14) recorded in employee separation/asset related charges, net
and $(3) recorded to other (loss) income, net. The second and
first quarter charge / benefit was recorded in employee
separation/asset related charges, net. The quarterly impact of this
activity by segment is as follows:
|
|
- Third quarter 2016 impact by segment: Agriculture -
$(13), Electronics & Communications - $(2), Nutrition &
Health - $(1), Performance Materials - $2, and Corporate expenses -
$(3).
- Second quarter 2016
impact by segment: Agriculture - $5, Electronics &
Communications - $8, Industrial Biosciences - $3, Nutrition &
Health - $12, Performance Materials - $9, Protection Solutions -
$7, and Corporate expenses - $46.
- First quarter 2016
impact by segment: Agriculture - $(21), Electronics &
Communications - $7, Industrial Biosciences - $1, Nutrition &
Health - $1, Performance Materials - $(4), Protection Solutions -
$3, Other - $(3), and Corporate expenses - $14.
|
|
First quarter 2016
included a $(75) restructuring charge recorded in employee
separation/asset related charges, net related to the decision to
not re-start the Agriculture segment's insecticide manufacturing
facility at the La Porte site located in La Porte, Texas. The
charge included $(41) of asset related charges, $(18) of contract
termination costs, and $(16) of employee severance and related
benefit costs.
|
|
|
|
Second quarter 2015
included a $(2) restructuring charge recorded in employee
separation/asset related charges, net associated with the 2014
restructuring program. These adjustments were primarily due to the
identification of additional projects in certain segments, offset
by lower than estimated individual severance costs and workforce
reductions achieved through non-severance programs. The net
reduction impacted segment earnings for the three months ended as
follows: Agriculture - $(4), Electronics & Communications -
$11, Industrial Biosciences - $(1), Nutrition & Health - $(4),
Performance Materials - $(2), Protection Solutions - $1, and Other
- $(3).
|
|
|
(3)
|
During third quarter
2016, a $(158) pre-tax impairment charge was recorded in employee
separation / asset related charges, net related to the write-down
of indefinite lived intangible assets within the Industrial
Biosciences segment. The third quarter charge was the result
of realignment of brand marketing strategies and a determination to
phase out the use of certain acquired trade names.
|
|
|
|
During first quarter
2015, a $(37) pre-tax impairment charge was recorded in
employee separation / asset related charges, net for a cost basis
investment within the Other segment. The assessment resulted
from the venture's revised operating plan reflecting
underperformance of its European wheat based ethanol facility and
deteriorating European ethanol market conditions.
|
|
|
(4)
|
The company recorded
insurance recoveries of $30, $147 and $35 in the second quarter
2016, third quarter 2015 and first quarter 2015, respectively, in
other operating charges for recovery of costs for customer claims
related to the use of the Agriculture's segment
Imprelis® herbicide.
|
|
|
|
First quarter 2016
included a benefit of $23 in other operating charges for reduction
in accrual for customer claims related to the use of the
Imprelis® herbicide.
|
|
|
(5)
|
First quarter 2016
included a gain of $369 recorded in other (loss) income, net
associated with the sale of the DuPont (Shenzhen) Manufacturing
Limited entity, which held certain buildings and other
assets. The gain is reflected as a Corporate item.
|
|
|
(6)
|
First quarter 2015
included a charge of $(40) in other (loss) income, net associated
with remeasuring the company's Ukrainian hryvnia net monetary
assets. Ukraine's central bank adopted a decision to no longer set
the indicative hryvnia exchange rate. The hryvnia became a
free-floating exchange rate and lost approximately a third of its
value through the quarter.
|
|
|
(7)
|
Second quarter 2015
included a gain of $112, net of legal expenses, recorded in other
(loss) income, net related to the company's settlement of a legal
claim. This matter relates to the Protection Solutions
segment.
|
|
|
(8)
|
Earnings per share
for the year may not equal the sum of quarterly earnings per share
due to the changes in average share calculations.
|
E.I. du Pont de
Nemours and Company
|
Consolidated Segment
Information
|
(Dollars in
millions)
|
|
SCHEDULE
C
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
SEGMENT NET SALES
(1)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Agriculture
|
|
$
|
1,119
|
|
|
$
|
1,093
|
|
|
$
|
8,123
|
|
|
$
|
8,248
|
|
Electronics &
Communications
|
|
493
|
|
|
532
|
|
|
1,439
|
|
|
1,577
|
|
Industrial
Biosciences
|
|
392
|
|
|
374
|
|
|
1,099
|
|
|
1,081
|
|
Nutrition &
Health
|
|
823
|
|
|
810
|
|
|
2,459
|
|
|
2,449
|
|
Performance
Materials
|
|
1,334
|
|
|
1,302
|
|
|
3,918
|
|
|
4,021
|
|
Protection
Solutions
|
|
722
|
|
|
723
|
|
|
2,237
|
|
|
2,319
|
|
Other
|
|
34
|
|
|
39
|
|
|
108
|
|
|
136
|
|
Consolidated net
sales
|
|
$
|
4,917
|
|
|
$
|
4,873
|
|
|
$
|
19,383
|
|
|
$
|
19,831
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
SEGMENT OPERATING
EARNINGS (1)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Agriculture
|
|
$
|
(189)
|
|
|
$
|
(210)
|
|
|
$
|
1,777
|
|
|
$
|
1,700
|
|
Electronics &
Communications
|
|
108
|
|
|
104
|
|
|
260
|
|
|
272
|
|
Industrial
Biosciences
|
|
78
|
|
|
61
|
|
|
203
|
|
|
165
|
|
Nutrition &
Health
|
|
135
|
|
|
102
|
|
|
369
|
|
|
288
|
|
Performance
Materials
|
|
371
|
|
|
317
|
|
|
969
|
|
|
935
|
|
Protection
Solutions
|
|
162
|
|
|
146
|
|
|
526
|
|
|
494
|
|
Other
|
|
(58)
|
|
|
(87)
|
|
|
(167)
|
|
|
(164)
|
|
Total segment
operating earnings
|
|
607
|
|
|
433
|
|
|
3,937
|
|
|
3,690
|
|
Corporate
expenses
|
|
(83)
|
|
|
(111)
|
|
|
(252)
|
|
|
(413)
|
|
Interest
expense
|
|
(93)
|
|
|
(82)
|
|
|
(278)
|
|
|
(240)
|
|
Operating earnings
before income taxes and exchange (losses) gains
|
|
431
|
|
|
240
|
|
|
3,407
|
|
|
3,037
|
|
Net exchange (losses)
gains (2)
|
|
(76)
|
|
|
(36)
|
|
|
(212)
|
|
|
117
|
|
Operating earnings
before income taxes (Non-GAAP)
|
|
$
|
355
|
|
|
$
|
204
|
|
|
$
|
3,195
|
|
|
$
|
3,154
|
|
Non-operating
pension/OPEB costs (3)
|
|
(114)
|
|
|
(115)
|
|
|
(321)
|
|
|
(311)
|
|
Total significant
items before income taxes
|
|
(297)
|
|
|
138
|
|
|
38
|
|
|
169
|
|
(Loss) Income from
continuing operations before income taxes (GAAP)
|
|
$
|
(56)
|
|
|
$
|
227
|
|
|
$
|
2,912
|
|
|
$
|
3,012
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
SIGNIFICANT ITEMS BY
SEGMENT (PRE-TAX) (1)(4)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Agriculture
|
|
$
|
(13)
|
|
|
$
|
147
|
|
|
$
|
(51)
|
|
|
$
|
178
|
|
Electronics &
Communications
|
|
(2)
|
|
|
—
|
|
|
13
|
|
|
11
|
|
Industrial
Biosciences
|
|
(158)
|
|
|
—
|
|
|
(154)
|
|
|
(1)
|
|
Nutrition &
Health
|
|
(1)
|
|
|
—
|
|
|
12
|
|
|
(4)
|
|
Performance
Materials
|
|
2
|
|
|
—
|
|
|
7
|
|
|
(2)
|
|
Protection
Solutions
|
|
—
|
|
|
—
|
|
|
10
|
|
|
113
|
|
Other
|
|
—
|
|
|
—
|
|
|
(3)
|
|
|
(40)
|
|
Total significant
items by segment
|
|
(172)
|
|
|
147
|
|
|
(166)
|
|
|
255
|
|
Corporate
expenses
|
|
(125)
|
|
|
(9)
|
|
|
204
|
|
|
(26)
|
|
Interest
expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(20)
|
|
Net exchange (losses)
gains
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(40)
|
|
Total significant
items before income taxes
|
|
$
|
(297)
|
|
|
$
|
138
|
|
|
$
|
38
|
|
|
$
|
169
|
|
E.I. du Pont de
Nemours and Company
|
Consolidated Segment
Information
|
(Dollars in
millions)
|
|
SCHEDULE C
(continued)
|
Corporate
Expenses
|
|
|
|
|
The reconciliation
below reflects GAAP corporate expenses excluding significant
items.
|
|
|
|
|
|
Three Months
Ended September 30,
|
|
|
2016
|
|
2015
|
Corporate expenses
(GAAP)
|
|
$
|
208
|
|
|
$
|
120
|
|
Significant items
(4)
|
|
125
|
|
|
9
|
|
Corporate expenses
(Non-GAAP)
|
|
$
|
83
|
|
|
$
|
111
|
|
|
|
|
|
|
(1)
Segment operating earnings is defined as income (loss) from
continuing operations before income taxes excluding significant
pre-tax benefits (charges), non-operating pension/OPEB costs,
exchange gains (losses), corporate expenses and interest. DuPont
Sustainable Solutions, previously within the company's Safety &
Protection segment (now Protection Solutions) was comprised of two
business units: Clean Technologies (CleanTech) and Consulting
Solutions. Effective January 1, 2016, the CleanTech business
is reported in the Industrial Biosciences segment and the
Consulting Solutions business unit is reported within Other.
Reclassifications of prior year data have been made to conform to
current year classifications.
|
(2)
See Schedule D for additional information on exchange gains
and losses. Year to date September 30, 2015 exchange gains,
on an operating earnings basis (Non-GAAP), excludes the impact of a
$23 exchange loss on non-operating pension.
|
(3) Year
to date September 30, 2015, non-operating pension/OPEB costs
includes a $23 exchange loss on foreign pension
balances.
|
(4)
See Schedule B for detail of significant items.
|
E.I. du Pont de
Nemours and Company
|
Reconciliation of
Non-GAAP Measures
|
(Dollars in millions,
except per share amounts)
|
|
SCHEDULE
D
|
|
|
|
|
|
|
|
|
|
Reconciliations of
Adjusted EBIT / EBITDA to Consolidated Income
Statements
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September
30,
|
|
Nine Months Ended
September
30,
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Income from
continuing operations after income taxes (GAAP)
|
|
$
|
13
|
|
|
$
|
131
|
|
|
$
|
2,269
|
|
|
$
|
2,126
|
|
Add: (Benefit from)
Provision for income taxes on continuing operations
|
|
(69)
|
|
|
96
|
|
|
643
|
|
|
886
|
|
(Loss) Income from
continuing operations before income taxes
|
|
$
|
(56)
|
|
|
$
|
227
|
|
|
$
|
2,912
|
|
|
$
|
3,012
|
|
Add: Significant
items charge (benefit) before income taxes(2)
|
|
297
|
|
|
(138)
|
|
|
(38)
|
|
|
(169)
|
|
Add: Non-operating
pension/OPEB costs (1)
|
|
114
|
|
|
115
|
|
|
321
|
|
|
311
|
|
Operating earnings
before income taxes (Non-GAAP)
|
|
$
|
355
|
|
|
$
|
204
|
|
|
$
|
3,195
|
|
|
$
|
3,154
|
|
Less: Net income
attributable to noncontrolling interests from continuing
operations
|
|
4
|
|
|
—
|
|
|
14
|
|
|
9
|
|
Add: Interest
expense (2)
|
|
|
93
|
|
|
82
|
|
|
278
|
|
|
240
|
|
Adjusted EBIT from
operating earnings (Non-GAAP)
|
|
444
|
|
|
286
|
|
|
3,459
|
|
|
3,385
|
|
Add: Depreciation and
amortization
|
|
280
|
|
|
291
|
|
|
979
|
|
|
1,035
|
|
Adjusted EBITDA from
operating earnings (Non-GAAP)
|
|
$
|
724
|
|
|
$
|
577
|
|
|
$
|
4,438
|
|
|
$
|
4,420
|
|
Reconciliation of
Operating Costs to Consolidated Income Statement Line
Items
|
GAAP operating costs
is defined as other operating charges, selling, general and
administrative expenses, and research and development costs. The
reconciliation below reflects operating costs excluding significant
items and non-operating pension/OPEB costs.
|
|
|
|
|
|
Three Months Ended
September 30, 2016
|
|
Three Months Ended
September 30, 2015
|
|
As
Reported
(GAAP)
|
Less:
Significant
Items (2)
|
Less: Non-
Operating
Pension/OPEB
Costs
|
(Non-GAAP)
|
|
As
Reported
(GAAP)
|
Less:
Significant
(2)
|
Less: Non-
Operating
Pension/OPEB
Costs
|
(Non-GAAP)
|
Other operating
charges
|
$
|
176
|
|
$
|
—
|
|
$
|
—
|
|
$
|
176
|
|
|
$
|
91
|
|
$
|
(138)
|
|
$
|
—
|
|
$
|
229
|
|
Selling, general and
administrative
expenses
|
1,016
|
|
122
|
|
45
|
|
849
|
|
|
1,046
|
|
—
|
|
46
|
|
1,000
|
|
Research and
development expense
|
410
|
|
—
|
|
17
|
|
393
|
|
|
441
|
|
—
|
|
17
|
|
424
|
|
Total
|
$
|
1,602
|
|
$
|
122
|
|
$
|
62
|
|
$
|
1,418
|
|
|
$
|
1,578
|
|
$
|
(138)
|
|
$
|
63
|
|
$
|
1,653
|
|
|
Reconciliation of
Operating Earnings Per Share (EPS) Outlook
|
The reconciliation
below represents the company's outlook on an operating earnings
basis, defined as earnings excluding significant items and
non-operating pension/OPEB costs.
|
|
|
|
|
|
|
|
|
|
Year Ended
December 31,
|
|
|
|
2016
Outlook
|
|
2015
Actual
|
Operating EPS
(Non-GAAP)
|
|
|
$
|
3.25
|
|
|
$
|
2.77
|
|
|
|
|
|
|
|
Significant items
(2)
|
|
|
|
|
|
Transaction costs
(3)
|
|
|
(0.37)
|
|
|
(0.07)
|
|
Gain on sale of
entity
|
|
|
0.24
|
|
|
—
|
|
Restructuring
adjustments / charges
|
|
|
(0.01)
|
|
|
(0.58)
|
|
Customer claims
adjustment/recovery
|
|
|
0.04
|
|
|
0.23
|
|
Litigation
settlement
|
|
|
—
|
|
|
0.10
|
|
Asset impairment
charge
|
|
|
(0.13)
|
|
|
(0.03)
|
|
Ukraine
devaluation
|
|
|
—
|
|
|
(0.04)
|
|
|
|
|
|
|
|
Non-operating
pension/OPEB costs - estimate
|
|
|
(0.31)
|
|
|
(0.29)
|
|
|
|
|
|
|
|
EPS from continuing
operations (GAAP)
|
|
|
$
|
2.71
|
|
|
$
|
2.09
|
|
E.I. du Pont de
Nemours and Company
Reconciliation of Non-GAAP
Measures (Dollars in millions,
except per share amounts)
|
|
SCHEDULE D
(continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange
Gains/Losses on Operating Earnings (2)
|
|
|
|
|
|
|
|
|
The company routinely
uses forward exchange contracts to offset its net exposures, by
currency, related to the foreign currency denominated monetary
assets and liabilities of its operations. The objective of this
program is to maintain an approximately balanced position in
foreign currencies in order to minimize, on an after-tax basis, the
effects of exchange rate changes. The net pre-tax exchange gains
and losses are recorded in other (loss) income, net and the related
tax impact is recorded in (benefit from) provision for income taxes
on the Consolidated Income Statements.
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Subsidiary
Monetary Position Gain (Loss)
|
|
|
|
|
|
|
|
|
Pre-tax exchange
gains (losses)
|
|
$
|
6
|
|
|
$
|
(210)
|
|
|
$
|
185
|
|
|
$
|
(297)
|
|
Local tax benefits
(expenses)
|
|
18
|
|
|
67
|
|
|
(29)
|
|
|
(26)
|
|
Net after-tax impact
from subsidiary exchange gains (losses)
|
|
$
|
24
|
|
|
$
|
(143)
|
|
|
$
|
156
|
|
|
$
|
(323)
|
|
|
|
|
|
|
|
|
|
|
Hedging Program
Gain (Loss)
|
|
|
|
|
|
|
|
|
Pre-tax exchange
(losses) gains
|
|
$
|
(82)
|
|
|
$
|
174
|
|
|
$
|
(397)
|
|
|
$
|
414
|
|
Tax benefits
(expenses)
|
|
30
|
|
|
(63)
|
|
|
143
|
|
|
(150)
|
|
Net after-tax impact
from hedging program exchange (losses) gains
|
|
$
|
(52)
|
|
|
$
|
111
|
|
|
$
|
(254)
|
|
|
$
|
264
|
|
|
|
|
|
|
|
|
|
|
Total Exchange
Gain (Loss)
|
|
|
|
|
|
|
|
|
Pre-tax exchange
(losses) gains (4)
|
|
$
|
(76)
|
|
|
$
|
(36)
|
|
|
$
|
(212)
|
|
|
$
|
117
|
|
Tax benefits
(expenses)
|
|
48
|
|
|
4
|
|
|
114
|
|
|
(176)
|
|
Net after-tax
exchange losses
|
|
$
|
(28)
|
|
|
$
|
(32)
|
|
|
$
|
(98)
|
|
|
$
|
(59)
|
|
|
|
|
|
|
|
|
|
|
As shown above, the
"Total Exchange Gain (Loss)" is the sum of the "Subsidiary Monetary
Position Gain (Loss)" and the "Hedging Program Gain
(Loss)."
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Base Income Tax Rate to Effective Income Tax Rate
|
|
|
|
|
Base income tax rate
is defined as the effective income tax rate less the effect of
exchange gains (losses), as defined above, significant items and
non-
operating pension/OPEB costs.
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
(Loss) Income from
continuing operations before income taxes (GAAP)
|
|
$
|
(56)
|
|
|
$
|
227
|
|
|
$
|
2,912
|
|
|
$
|
3,012
|
|
Add:
Significant items - charge (benefit) (2)
|
|
297
|
|
|
(138)
|
|
|
(38)
|
|
|
(169)
|
|
Non-operating pension/OPEB costs (1)
|
|
114
|
|
|
115
|
|
|
321
|
|
|
311
|
|
Less: Net
exchange (losses) gains (4)
|
|
(76)
|
|
|
(36)
|
|
|
(212)
|
|
|
117
|
|
|
|
Income from
continuing operations before income taxes, significant items,
exchange (losses) gains, and non-operating pension/OPEB
costs (Non-GAAP)
|
$
|
431
|
|
|
$
|
240
|
|
|
$
|
3,407
|
|
|
$
|
3,037
|
|
|
|
|
|
|
|
|
|
|
(Benefit from)
Provision for income taxes on continuing operations
(GAAP)
|
|
$
|
(69)
|
|
|
$
|
96
|
|
|
$
|
643
|
|
|
$
|
886
|
|
Add: Tax
benefits (expenses) on significant items
|
|
81
|
|
|
(50)
|
|
|
(75)
|
|
|
(106)
|
|
Tax benefits on non-operating pension/OPEB costs
|
|
41
|
|
|
41
|
|
|
113
|
|
|
101
|
|
Tax benefits (expenses) on exchange gains/losses
|
|
48
|
|
|
4
|
|
|
114
|
|
|
(176)
|
|
Provision for income
taxes on continuing earnings, excluding exchange
(losses)gains (Non-GAAP)
|
$
|
101
|
|
|
$
|
91
|
|
|
$
|
795
|
|
|
$
|
705
|
|
|
|
|
|
|
|
|
|
|
Effective income tax
rate (GAAP)
|
|
123.2%
|
|
|
42.3%
|
|
|
22.1%
|
|
|
29.4%
|
|
Significant items and
non-operating pension/OPEB costs effect
|
|
(108.3)%
|
|
|
0.3%
|
|
|
(0.8)%
|
|
|
(1.5)%
|
|
Tax rate, from
continuing operations before significant items and non-operating
pension/OPEB costs
|
14.9%
|
|
|
42.6%
|
|
|
21.3%
|
|
|
27.9%
|
|
Exchange (losses)
gains effect
|
|
8.5%
|
|
|
(4.7)%
|
|
|
2.0%
|
|
|
(4.7)%
|
|
Base income tax rate
from continuing operations (Non-GAAP)
|
|
23.4%
|
|
|
37.9%
|
|
|
23.3%
|
|
|
23.2%
|
|
|
|
|
|
|
|
|
|
|
(1) Year
to date September 30, 2015, non-operating pension/OPEB costs
includes a $23 exchange loss on foreign pension
balances.
|
(2) See
Schedule B for detail of significant items.
|
(3) The
2016 outlook for significant items includes the current estimate
for full year 2016 transaction costs associated with the planned
merger with The Dow Chemical Company and related
activities.
|
(4) Year
to date September 30, 2015 exchange gains, on an operating earnings
basis (Non-GAAP), excludes a $23 exchange loss on non-operating
pension.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/dupont-reports-third-quarter-2016-results-300350262.html
SOURCE DuPont