- Net Sales of $3.0 billion
decreased 8%; organic sales decreased 3% versus year-ago
period
- GAAP Income from continuing operations of $273 million; operating EBITDA of $714 million
- GAAP EPS from continuing operations of $0.58; adjusted EPS of $0.84
- Operating cash flow of $343
million; adjusted free cash flow of $102 million
WILMINGTON, Del., May 2, 2023
/PRNewswire/ -- DuPont (NYSE: DD) today announced financial
results(1) for the first quarter ended March 31, 2023.
"We delivered earnings in line with our expectations for the
first quarter of 2023 which reflects our team's continued strong
execution despite a lower volume environment in electronics and
construction-related end markets," said Ed
Breen, DuPont Executive Chairman and Chief Executive
Officer. "While sales within Semiconductor Technologies and
Interconnect Solutions were down during the quarter as expected,
Industrial Solutions as well as the Water & Protection segment
delivered organic sales growth and we saw continued robust demand
within our auto adhesives portfolio. Our businesses are
well-equipped to leverage leading market positions and accelerate
growth when consumer-driven, short-cycle electronics end markets
recover."
"Today we also announced a definitive agreement to acquire
Spectrum Plastics Group(3), a leading manufacturer of
critical components and devices primarily into medical end-markets
for highly complex, mission critical applications," Breen
continued. "This intended acquisition adds to DuPont's industrial
technologies growth pillar and strengthens our existing position in
stable and fast-growing healthcare end-markets. We expect this deal
to add substantial shareholder value over time through both growth
and clear synergies with our existing medical-related
products."
First Quarter 2023
Results(1)
|
|
Dollars in millions,
unless noted
|
1Q'23
|
1Q'22
|
Change
vs.
1Q'22
|
Organic Sales
(2)
vs.
1Q'22
|
Net sales
|
$3,018
|
$3,274
|
(8) %
|
(3) %
|
GAAP Income from
continuing operations
|
$273
|
$232
|
18 %
|
|
Operating
EBITDA(2)
|
$714
|
$818
|
(13) %
|
|
Operating
EBITDA(2) margin %
|
23.7 %
|
25.0 %
|
(130) bps
|
|
GAAP EPS from
continuing operations
|
$0.58
|
$0.42
|
38 %
|
|
Adjusted
EPS(2)
|
$0.84
|
$0.82
|
2 %
|
|
|
Net sales
- Net sales decreased 8% as organic sales(2) declined
3%, along with currency headwinds of 3% and unfavorable portfolio
impact of 2%.
- Organic sales(2) decline of 3% consisted of a 7%
decrease in volume partially offset by a 4% increase in price.
-
- Lower volume resulted from decreased consumer electronics
spending and channel inventory destocking, along with softness in
construction end-markets, partially offset by continued strength in
areas such as water, auto adhesives and in industrial end-markets
such as aerospace and healthcare.
- Price increase reflects the carryover impact of actions taken
in 2022 to offset broad-based cost inflation.
- 4% organic sales(2) growth in Water &
Protection; 13% organic sales(2) declines in Electronics
& Industrial; 6% organic sales(2) growth in the
retained businesses reported in Corporate.
- 5% organic sales(2) growth in EMEA, 1% organic
sales(2) growth in U.S. & Canada and 10% organic sales(2)
decline in Asia Pacific.
GAAP Income/GAAP EPS from continuing operations
- GAAP income/GAAP EPS from continuing operations increased as
the absence of an asset impairment charge recorded in the prior
year related to an equity method investment, lower net interest
expense and the impact of a lower share count related to our
accelerated share repurchase program more than offset lower segment
earnings and a higher tax rate.
Operating EBITDA(2)
- Operating EBITDA(2) decreased primarily due to
volume declines as pricing and disciplined cost control were offset
by inflationary cost pressure related primarily to higher raw
material costs, along with currency headwinds.
Adjusted EPS(2)
- Adjusted EPS(2) increased as lower net interest
expense and the impact of a lower share count related to our
accelerated share repurchase program more than offset lower segment
earnings and a higher tax rate.
Operating cash flow
- Operating cash flow in the quarter of $343 million and capital expenditures of
$241 million resulted in adjusted
free cash flow(2) of $102
million. Adjusted free cash flow(2) in the
quarter includes headwinds of about $75
million for transaction costs related to the M&M
Divestitures.
First Quarter 2023
Segment Highlights
|
|
Electronics &
Industrial
|
|
Dollars in millions,
unless noted
|
1Q'23
|
1Q'22
|
Change
vs.
1Q'22
|
Organic
Sales(2)
vs.
1Q'22
|
Net sales
|
$1,296
|
$1,536
|
(16) %
|
(13) %
|
Operating
EBITDA
|
$362
|
$476
|
(24) %
|
|
Operating EBITDA margin
%
|
27.9 %
|
31.0 %
|
(310) bps
|
|
|
Net sales
- Net sales decreased 16% as organic sales(2) declined
13%, along with currency headwinds of 2% and unfavorable portfolio
impact of 1%.
- Organic sales(2) decline of 13% driven by a 15%
decrease in volume partially offset by a 2% increase in price.
-
- Interconnect Solutions sales down 21% on an
organic(2) basis on volume declines related to decreased
consumer electronics spending and channel inventory
destocking.
- Semiconductor Technologies sales down mid-teens on an
organic(2) basis driven by volume declines resulting
from reduced semiconductor fab utilization rates due to weaker
end-market demand and channel inventory destocking.
- Industrial Solutions sales up low single-digits on an
organic(2) basis as pricing and ongoing strength in
broad-based industrial markets such as aerospace and healthcare
were partially offset by lower demand in consumer-driven advanced
printing and lighting applications.
Operating EBITDA
- Operating EBITDA decreased due primarily to volume declines and
reduced production rates to better align with demand.
Water &
Protection
|
|
Dollars in millions,
unless noted
|
1Q'23
|
1Q'22
|
Change
vs.
1Q'22
|
Organic
Sales(2)
vs.
1Q'22
|
Net sales
|
$1,449
|
$1,429
|
1 %
|
4 %
|
Operating
EBITDA
|
$344
|
$341
|
1 %
|
|
Operating EBITDA margin
%
|
23.7 %
|
23.9 %
|
(20) bps
|
|
|
Net sales
- Net sales increased 1% as organic sales(2) growth of
4% was mostly offset by a 3% currency headwind.
- Organic sales(2) growth of 4% reflects a 6% increase
in price resulting from the carryover impact of broad-based actions
taken in 2022 to offset cost inflation partially offset by a 2%
decrease in volume driven by Shelter Solutions.
-
- Water Solutions sales up low double-digits on an
organic(2) basis on pricing and continued strong demand
for water technologies.
- Safety Solutions sales up mid single-digits on an
organic(2) basis on pricing and volume gains resulting
from strength in aerospace, automotive and healthcare
end-markets.
- Shelter Solutions sales down mid single-digits on an
organic(2) basis as pricing gains were more than offset
by volume declines in construction markets.
Operating EBITDA
- Operating EBITDA increased as pricing and disciplined cost
control were mostly offset by inflationary cost pressure related
primarily to higher raw material and energy costs, currency
headwinds and lower volumes.
Outlook(4)
|
|
Dollars in millions,
unless noted
|
2Q'23E
|
Full Year
2023E
|
Net sales
|
~$3,020
|
$12,300 -
$12,500
|
Operating
EBITDA(2)
|
~$715
|
$3,000 -
$3,100
|
Adjusted
EPS(2)(4)
|
~$0.84
|
$3.55 -
$3.70
|
|
"I am pleased with our team's focus on execution as we start the
year in an environment of select volume pressure with lower volumes
in electronics and construction," said Lori
Koch, Chief Financial Officer of DuPont. "We continue to
expect ongoing strength throughout the year in areas such as water,
automotive, aerospace and healthcare. Within electronics markets,
we continue to see weakness and channel inventory destocking in the
near-term."
"Based on recent customer feedback and third-party market
forecasts within electronics, we expect customer utilization rates
to bottom relatively near-term and to improve during the third
quarter, which is about a quarter later than previously expected,"
Koch continued. "Due to the delay in electronics recovery, we are
adjusting the high-end of our existing guidance ranges for full
year net sales, operating EBITDA and adjusted EPS. For the second
quarter 2023, we expect similar results to the first quarter as
overall market conditions are anticipated to be generally the
same."
(1)
|
Results presented on a continuing operations
basis. See page 5 for further information, including the basis of
presentation included in this release.
|
(2)
|
Adjusted EPS, operating EBITDA, operating
EBTIDA margin, organic sales and free cash flow are non-GAAP
measures. See page 6 for further discussion, including a definition
of significant items. Reconciliation to the most directly
comparable GAAP measure, including details of significant items
begins on page 11 of this communication.
|
(3)
|
Acquisition of Spectrum Plastics Group
("Spectrum") is expected to close by the end of the third quarter
2023, subject to customary closing conditions and regulatory
approval.
|
(4)
|
2023 outlook on page 3 excludes estimated
impact related to intended acquisition of Spectrum. Adjusted EPS
outlook on page 3 assumes that by year-end 2023, the Company
substantially completes the remaining repurchase authority under
its $5 billion share buyback program announced on November 8,
2022.
|
Conference Call
The Company will host a live webcast
of its first quarter earnings conference call with investors to
discuss its results and business outlook beginning today at
8:00 a.m. ET. The slide presentation
that accompanies the conference call will be posted on the DuPont's
Investor Relations Events and Presentations page. A replay of the
webcast also will be available on the DuPont's Investor Relations
Events and Presentations page following the live event.
About DuPont
DuPont (NYSE: DD) is a global innovation
leader with technology-based materials and solutions that help
transform industries and everyday life. Our employees apply diverse
science and expertise to help customers advance their best ideas
and deliver essential innovations in key markets including
electronics, transportation, construction, water, healthcare and
worker safety. More information about the company, its businesses
and solutions can be found at www.dupont.com. Investors can access
information included on the Investor Relations section of the
website at investors.dupont.com.
DuPont™ and all products, unless otherwise noted, denoted with
™, SM or ® are trademarks, service marks or registered
trademarks of affiliates of DuPont de Nemours, Inc.
Overview
On November 1,
2022, DuPont completed the divestiture, previously announced
on February 18, 2022, of the
majority of the historical Mobility & Materials segment,
including the Engineering Polymers business line and select product
lines within the Advanced Solutions and Performance Resins business
lines (the "M&M Divestiture"), to Celanese Corporation
("Celanese"). The Company also announced on February 18, 2022, that its Board of Directors
has approved the divestiture of the Delrin® acetal homopolymer
(H-POM) business. In addition to the entry into definitive
agreements, the Company anticipates that the closing of the sale of
Delrin® would be subject to regulatory approvals and other
customary closing conditions, (the "Delrin® Divestiture" and
together with the M&M Divestiture, the "M&M
Divestitures").
The financial position of DuPont as of March 31, 2023 and December 31, 2022 presents the assets and
liabilities of the Delrin® Divestiture as discontinued operations.
The results of operations for the three months ended March 31, 2023 present the financial results of
the Delrin® Divestiture as discontinued operations. In the
comparative period, the results of operations for both the M&M
Divestiture and the Delrin® Divestiture are presented as
discontinued operations. The cash flows of these businesses have
not been segregated and are included in the Consolidated Statement
of Cash Flows. Unless otherwise indicated, the discussion of
results, including the financial measures further discussed below,
refer only to DuPont's Continuing Operations and do not include
discussion of balances or activity of the M&M
Divestitures.
Cautionary Statement Regarding 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," and
similar expressions and variations or negatives of these words.
Forward-looking statements address matters that are, to varying
degrees, uncertain and subject to risks, uncertainties, and
assumptions, many of which that are beyond DuPont's control, that
could cause actual results to differ materially from those
expressed in any forward-looking statements. Forward-looking
statements are not guarantees of future results. Some of the
important factors that could cause DuPont's actual results to
differ materially from those projected in any such forward-looking
statements include, but are not limited to: (i) the possibility
that the Company may fail to realize the anticipated benefits of
the $5 billion share repurchase
program announced on November 8, 2022
and that the program may be suspended, discontinued or not
completed prior to its termination on June
30, 2024; (ii) ability to achieve anticipated tax treatments
in connection with mergers, acquisitions, divestitures, and other
portfolio changes actions and impact of changes in relevant tax and
other laws; (iii) indemnification of certain legacy liabilities;
(iv) risks and costs related to each of the parties respective
performance under and the impact of the arrangement to share future
eligible PFAS costs by and between DuPont, Corteva and Chemours;
(v) failure to timely close on anticipated terms (or at all),
realize expected benefits and effectively manage and achieve
anticipated synergies and operational efficiencies in connection
with mergers, acquisitions, divestitures and other portfolio
changes, including the acquisition of Spectrum; (vi) risks and
uncertainties, including increased costs and the ability to obtain
raw materials, related to operational and supply chain impacts or
disruptions, which may result from, among other events, pandemics
and responsive actions, timing and recovery from demand decline in
consumer facing markets, including China, and geo-political and weather related
events; (vii) ability to offset increases in cost of inputs,
including raw materials, energy and logistics; (viii) risks from
continuing or expanding trade disputes or restrictions, including
on exports to China of U.S.
regulated products and technology impacting the semiconductor
business; (ix) risks, including ability to achieve, and costs
associated with DuPont's sustainability strategy including the
actual conduct of the company's activities and results thereof, and
the development, implementation, achievement or continuation of any
goal, program, policy or initiative discussed or expected; and (x)
other risks to DuPont's business, operations; each as further
discussed in DuPont's most recent annual report and subsequent
current and periodic reports filed with the U.S. Securities and
Exchange Commission. 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 or supply chain
disruption, operational problems, financial loss, legal liability
to third parties and similar risks, any of which could have a
material adverse effect on DuPont's consolidated financial
condition, results of operations, credit rating or liquidity. You
should not place undue reliance on forward-looking statements,
which speak only as of the date they are made. DuPont assumes no
obligation to publicly provide revisions or updates to any
forward-looking statements whether as a result of new information,
future developments or otherwise, should circumstances change,
except as otherwise required by securities and other applicable
laws.
Non-GAAP Financial Measures
This communication
includes information that does not conform to accounting principles
generally accepted in the United States
of America ("U.S. GAAP") and are considered non-GAAP
measures. Management uses these measures internally for planning,
forecasting and evaluating the performance of the Company,
including allocating resources. DuPont's management believes these
non-GAAP financial measures are useful to investors because they
provide additional information related to the ongoing performance
of DuPont to offer a more meaningful comparison related to future
results of operations. These non-GAAP financial measures supplement
disclosures prepared in accordance with U.S. GAAP, and should not
be viewed as an alternative to U.S. GAAP. Furthermore, such
non-GAAP measures may not be consistent with similar measures
provided or used by other companies. Reconciliations for these
non-GAAP measures to U.S. GAAP are provided in the Selected
Financial Information and Non-GAAP Measures starting on page 12 and
in the Reconciliation to Non-GAAP Measures on the Investors section
of the Company's website. Non-GAAP measures included in this
communication are defined below. The Company has not provided
forward-looking U.S. GAAP financial measures or a reconciliation of
forward-looking non-GAAP financial measures to the most comparable
U.S. GAAP financial measures on a forward-looking basis because the
Company is unable to predict with reasonable certainty the ultimate
outcome of certain future events. These events include, among
others, the impact of portfolio changes, including asset sales,
mergers, acquisitions, and divestitures; contingent liabilities
related to litigation, environmental and indemnifications matters;
impairments and discrete tax items. These items are uncertain,
depend on various factors, and could have a material impact on U.S.
GAAP results for the guidance period.
Indirect costs, such as those related to corporate and shared
service functions previously allocated to the M&M Divestitures,
do not meet the criteria for discontinued operations and remain
reported within continuing operations. A portion of these indirect
costs include costs related to activities the Company is performing
post-closing of the M&M Divestiture or will perform post-close
of the Delrin Divestiture and for which it is/will be reimbursed
("Future Reimbursable Indirect Costs"). Future Reimbursable
Indirect Costs are reported within continuing operations but are
excluded from operating EBITDA as defined below. The remaining
portion of these indirect costs is not subject to future
reimbursement ("Stranded Costs"). Stranded Costs are reported
within continuing operations in Corporate & Other and are
included within Operating EBITDA.
Adjusted earnings per common share from continuing
operations - diluted ("Adjusted EPS"), is defined as earnings per
common share from continuing operations - diluted, excluding the
after-tax impact of significant items, after-tax impact of
amortization expense of intangibles, the after-tax impact of
non-operating pension / other post employment benefits ("OPEB")
credits / costs and Future Reimbursable Indirect Costs. Management
estimates amortization expense in 2023 associated with intangibles
to be approximately $590 million on a
pre-tax basis, or approximately $1.00
per share.
The Company's measure of profit/loss for segment reporting
purposes is Operating EBITDA as this is the manner in which the
Company's chief operating decision maker ("CODM") assesses
performance and allocates resources. The Company defines Operating
EBITDA as earnings (i.e., "Income from continuing operations before
income taxes") before interest, depreciation, amortization,
non-operating pension / OPEB benefits / charges, and foreign
exchange gains / losses, excluding Future Reimbursable Indirect
Costs, and adjusted for significant items. Reconciliations of these
measures are provided on the following pages. Operating EBITDA
Margin is defined as Operating EBITDA divided by Net Sales.
Significant items are items that arise outside the ordinary
course of the Company's business that management believes may cause
misinterpretation of underlying business performance, both
historical and future, based on a combination of some or all of the
item's size, unusual nature and infrequent occurrence. Management
classifies as significant items certain costs and expenses
associated with integration and separation activities related to
transformational acquisitions and divestitures as they are
considered unrelated to ongoing business performance.
Organic Sales is defined as net sales excluding the impacts of
currency and portfolio.
Adjusted free cash flow is defined as cash provided by/used for
operating activities less capital expenditures and excluding the
impact of cash inflows/outflows that are unusual in nature and/or
infrequent in occurrence that neither relate to the ordinary course
of the Company's business nor reflect the Company's underlying
business liquidity. As a result, adjusted free cash flow represents
cash that is available to the Company, after investing in its asset
base, to fund obligations using the Company's primary source of
liquidity, cash provided by operating activities. In
connection with its earnings release for the third quarter of 2022,
the Company updated the definition of adjusted free cash flow to
exclude the impact of cash inflows/outflows that are of a certain
magnitude, unusual in nature and/or infrequent in occurrence that
neither relate to the ordinary course of the Company's business nor
reflect the Company's underlying business liquidity. The change was
driven by the estimated tax payments associated with the M&M
Divestiture which meet the magnitude criterion, were unusual in
nature and infrequent in occurrence and were not related to the
Company's ordinary course of business or underlying business
liquidity. The Company believes that excluding items of this nature
provides the Company's investors with better understanding of and
enables them to compare our underlying business liquidity from
period to period. Similar adjustments to prior year measures of
adjusted free cash flow were not necessary. Management notes
that for the periods ended March 31,
2023 and 2022, respectively, there were no exclusions for
items that are unusual in nature and/or infrequent in occurrence.
Management believes adjusted free cash flow, even though it may be
defined differently from other companies, is useful to investors,
analysts and others to evaluate the Company's cash flow and
financial performance, and it is an integral measure used in the
Company's financial planning process.
Adjusted free cash flow conversion is defined as adjusted free
cash flow divided by net income adjusted to exclude the after-tax
impact of noncash impairment charges, gains or losses on
divestitures, amortization expense of intangibles and tax
benefit/expense from discontinued operations.
DuPont de Nemours, Inc.
|
Consolidated Statements of
Operations
|
|
In millions, except per
share amounts (Unaudited)
|
Three Months Ended March 31,
|
2023
|
2022
|
Net sales
|
$
3,018
|
$
3,274
|
Cost of
sales
|
1,983
|
2,110
|
Research and
development expenses
|
127
|
143
|
Selling, general and
administrative expenses
|
340
|
389
|
Amortization of
intangibles
|
147
|
153
|
Restructuring and
asset related charges - net
|
14
|
101
|
Acquisition,
integration and separation costs
|
—
|
8
|
Equity in earnings of
nonconsolidated affiliates
|
15
|
26
|
Sundry income
(expense) - net
|
29
|
3
|
Interest
expense
|
95
|
120
|
Income from continuing
operations before income taxes
|
356
|
279
|
Provision for income
taxes on continuing operations
|
83
|
47
|
Income from continuing
operations, net of tax
|
273
|
232
|
(Loss) Income from
discontinued operations, net of tax
|
(8)
|
276
|
Net income
|
265
|
508
|
Net income
attributable to noncontrolling interests
|
8
|
20
|
Net income available
for DuPont common stockholders
|
$
257
|
$
488
|
|
Per common share
data:
|
|
|
Earnings per common
share from continuing operations - basic
|
$
0.58
|
$
0.42
|
(Loss) Earnings per
common share from discontinued operations - basic
|
(0.02)
|
0.54
|
Earnings per common
share - basic
|
$
0.56
|
$
0.95
|
Earnings per common
share from continuing operations - diluted
|
$
0.58
|
$
0.42
|
(Loss) Earnings per
common share from discontinued operations - diluted
|
(0.02)
|
0.53
|
Earnings per common
share - diluted
|
$
0.56
|
$
0.95
|
|
Weighted-average
common shares outstanding - basic
|
458.8
|
512.0
|
Weighted-average
common shares outstanding - diluted
|
460.2
|
513.8
|
DuPont de Nemours,
Inc.
|
Consolidated
Balance Sheets
|
|
In millions, except
share amounts (Unaudited)
|
March 31,
2023
|
December 31,
2022
|
Assets
|
|
|
Current
Assets
|
|
|
Cash and cash
equivalents
|
$
3,525
|
$
3,662
|
Marketable
securities
|
1,319
|
1,302
|
Accounts and notes
receivable - net
|
2,438
|
2,518
|
Inventories
|
2,443
|
2,329
|
Prepaid and other
current assets
|
157
|
168
|
Assets of discontinued
operations
|
1,318
|
1,291
|
Total current
assets
|
11,200
|
11,270
|
Property, plant and
equipment - net of accumulated depreciation (March 31, 2023
- $4,574; December 31, 2022 - $4,448)
|
5,738
|
5,731
|
Other Assets
|
|
|
Goodwill
|
16,703
|
16,663
|
Other intangible
assets
|
5,366
|
5,495
|
Restricted cash and
cash equivalents
|
104
|
103
|
Investments and
noncurrent receivables
|
744
|
733
|
Deferred income tax
assets
|
112
|
109
|
Deferred charges and
other assets
|
1,241
|
1,251
|
Total other
assets
|
24,270
|
24,354
|
Total Assets
|
$
41,208
|
$
41,355
|
Liabilities and
Equity
|
|
|
Current
Liabilities
|
|
|
Short-term
borrowings
|
$
300
|
$
300
|
Accounts
payable
|
1,921
|
2,103
|
Income taxes
payable
|
186
|
233
|
Accrued and other
current liabilities
|
863
|
951
|
Liabilities of
discontinued operations
|
136
|
146
|
Total current
liabilities
|
3,406
|
3,733
|
Long-Term
Debt
|
7,807
|
7,774
|
Other Noncurrent
Liabilities
|
|
|
Deferred income tax
liabilities
|
1,145
|
1,158
|
Pension and other
post-employment benefits - noncurrent
|
527
|
522
|
Other noncurrent
obligations
|
1,162
|
1,151
|
Total other noncurrent
liabilities
|
2,834
|
2,831
|
Total
Liabilities
|
14,047
|
14,338
|
Commitments and
contingent liabilities
|
|
|
Stockholders'
Equity
|
|
|
Common stock
(authorized 1,666,666,667 shares of $0.01 par value
each;
issued 2023:
459,016,898 shares; 2022: 458,124,262 shares)
|
5
|
5
|
Additional paid-in
capital
|
48,256
|
48,420
|
Accumulated
deficit
|
(20,807)
|
(21,065)
|
Accumulated other
comprehensive (loss) income
|
(717)
|
(791)
|
Total DuPont
stockholders' equity
|
26,737
|
26,569
|
Noncontrolling
interests
|
424
|
448
|
Total
equity
|
27,161
|
27,017
|
Total Liabilities and
Equity
|
$
41,208
|
$
41,355
|
DuPont de Nemours,
Inc.
|
Consolidated
Statement of Cash Flows
|
|
In millions
(Unaudited)
|
Three Months Ended
March 31,
|
2023
|
2022
|
Operating
Activities
|
|
|
Net income
|
$
265
|
$
508
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
Depreciation and
amortization
|
277
|
342
|
Credit for deferred
income tax and other tax related items
|
(9)
|
(252)
|
Earnings of
nonconsolidated affiliates (in excess of) less than dividends
received
|
(10)
|
18
|
Net periodic benefit
costs (credits)
|
8
|
(1)
|
Periodic benefit plan
contributions
|
(21)
|
(20)
|
Net (gain) loss on
sales and split-offs of assets, businesses and
investments
|
(19)
|
3
|
Restructuring and
asset related charges - net
|
14
|
101
|
Other net
loss
|
28
|
24
|
Changes in assets and
liabilities, net of effects of acquired and divested
companies:
|
|
|
Accounts and notes
receivable
|
48
|
(254)
|
Inventories
|
(133)
|
(277)
|
Accounts
payable
|
(52)
|
304
|
Other assets and
liabilities, net
|
(53)
|
(287)
|
Cash provided by
operating activities
|
343
|
209
|
Investing
Activities
|
|
|
Capital
expenditures
|
(241)
|
(251)
|
Proceeds from sales of
property and businesses, net of cash divested
|
—
|
15
|
Acquisitions of
property and businesses, net of cash acquired
|
—
|
5
|
Purchases of
investments
|
(17)
|
—
|
Other investing
activities, net
|
(1)
|
2
|
Cash used for
investing activities
|
(259)
|
(229)
|
Financing
Activities
|
|
|
Changes in short-term
notes borrowings
|
—
|
254
|
Purchases of common
stock
|
—
|
(375)
|
Proceeds from issuance
of Company stock
|
12
|
83
|
Employee taxes paid
for share-based payment arrangements
|
(26)
|
(22)
|
Distributions to
noncontrolling interests
|
(34)
|
(18)
|
Dividends paid to
stockholders
|
(165)
|
(169)
|
Cash transferred to
IFF and subsequent adjustments
|
—
|
(11)
|
Cash used for
financing activities
|
(213)
|
(258)
|
Effect of exchange
rate changes on cash, cash equivalents and restricted
cash
|
(7)
|
(25)
|
Decrease in cash,
cash equivalents and restricted cash
|
(136)
|
(303)
|
Cash, cash equivalents
and restricted cash from continuing operations, beginning of
period
|
3,772
|
2,037
|
Cash, cash equivalents
and restricted cash from discontinued operations, beginning of
period
|
—
|
39
|
Cash, cash
equivalents and restricted cash at beginning of
period
|
3,772
|
2,076
|
Cash, cash equivalents
and restricted cash from continuing operations, end of
period
|
3,636
|
1,734
|
Cash, cash equivalents
and restricted cash from discontinued operations, end of
period
|
—
|
39
|
Cash, cash
equivalents and restricted cash at end of period
|
$
3,636
|
$
1,773
|
DuPont de Nemours,
Inc.
|
Net Sales by Segment
and Geographic Region
|
|
Net Sales by Segment
and Geographic Region
|
Three Months
Ended
|
In millions
(Unaudited)
|
Mar 31,
2023
|
Mar 31,
2022
|
Electronics &
Industrial
|
$
1,296
|
$
1,536
|
Water &
Protection
|
1,449
|
1,429
|
Corporate & Other
1
|
273
|
309
|
Total
|
$
3,018
|
$
3,274
|
U.S. &
Canada
|
$
1,023
|
$
1,049
|
EMEA
2
|
582
|
577
|
Asia
Pacific3
|
1,293
|
1,545
|
Latin
America
|
120
|
103
|
Total
|
$
3,018
|
$
3,274
|
Net Sales Variance
by Segment
and Geographic Region
|
Three Months Ended
March 31, 2023
|
Local Price
&
Product Mix
|
Volume
|
Total
Organic
|
Currency
|
Portfolio /
Other
|
Total
|
Percent change from
prior year
(Unaudited)
|
Electronics &
Industrial
|
2 %
|
(15) %
|
(13) %
|
(2) %
|
(1) %
|
(16) %
|
Water &
Protection
|
6
|
(2)
|
4
|
(3)
|
—
|
1
|
Corporate & Other
1
|
5
|
—
|
5
|
(3)
|
(14)
|
(12)
|
Total
|
4 %
|
(7) %
|
(3) %
|
(3) %
|
(2) %
|
(8) %
|
U.S. &
Canada
|
6 %
|
(5) %
|
1 %
|
— %
|
(3) %
|
(2)
|
EMEA2
|
5
|
—
|
5
|
(4)
|
—
|
1
|
Asia Pacific
|
3
|
(13)
|
(10)
|
(4)
|
(2)
|
(16)
|
Latin
America
|
3
|
14
|
17
|
—
|
—
|
17
|
Total
|
4 %
|
(7) %
|
(3) %
|
(3) %
|
(2) %
|
(8) %
|
1.
|
Corporate & Other
includes activities of the Retained Businesses and other previously
divested businesses including Biomaterials.
|
2.
|
Europe, Middle East and
Africa.
|
3.
|
Net sales attributed to
China, for the three months ended March 31, 2023 and 2022
were $525 million and $707 million, respectively.
|
DuPont de Nemours,
Inc. Selected Financial Information and Non-GAAP
Measures
|
|
Operating EBITDA by
Segment
|
Three Months Ended
|
In millions
(Unaudited)
|
Mar 31, 2023
|
Mar 31, 2022
|
Electronics &
Industrial
|
$
362
|
$
476
|
Water &
Protection
|
344
|
341
|
Corporate & Other
1
|
8
|
1
|
Total
|
$
714
|
$
818
|
1. Corporate &
Other includes activities of the Retained Businesses and other
previously divested businesses including Biomaterials.
|
|
|
|
|
|
|
Equity in Earnings of Nonconsolidated Affiliates by
Segment
|
Three Months Ended
|
In millions
(Unaudited)
|
Mar 31, 2023
|
Mar 31, 2022
|
Electronics &
Industrial
|
$
5
|
$
10
|
Water &
Protection
|
10
|
14
|
Corporate & Other
1
|
—
|
2
|
Total equity earnings
included in operating EBITDA (GAAP)
|
$
15
|
$
26
|
1. Corporate &
Other includes activities of the Retained Businesses and other
previously divested businesses including Biomaterials.
|
|
|
|
|
Reconciliation of "Income (Loss) from continuing
operations, net of tax" to
"Operating EBITDA"
|
Three Months Ended
|
In millions
(Unaudited)
|
Mar 31,
2023
|
Mar 31,
2022
|
Income from continuing
operations, net of tax (GAAP)
|
$
273
|
$
232
|
+ Provision for
(benefit from) income taxes on continuing operations
|
83
|
47
|
Income from continuing
operations before income taxes
|
$
356
|
$
279
|
+ Depreciation and
amortization
|
277
|
297
|
- Interest
income 1
|
46
|
1
|
+ Interest
expense
|
95
|
118
|
'- Non-operating pension/OPEB benefit (costs) credits
1
|
(2)
|
7
|
- Foreign
exchange losses, net 1
|
(20)
|
(5)
|
+ Future reimbursable
indirect costs
|
2
|
16
|
- Significant
items
|
(8)
|
(111)
|
Operating EBITDA
(non-GAAP)
|
$
714
|
$
818
|
1. Included in "Sundry
income (expense) - net."
|
|
|
Reconciliation of "Cash provided by operating
activities" to Adjusted Free Cash
Flow
|
Three Months Ended
|
In millions
(Unaudited)
|
Mar 31, 2023
|
Mar 31, 2022
|
Cash provided by
operating activities (GAAP) 1
|
$
343
|
$
209
|
Capital
expenditures
|
(241)
|
(251)
|
Adjusted free cash flow
(non-GAAP)
|
$
102
|
$
(42)
|
1. Refer to the
Consolidated Statement of Cash Flows included in the schedules
above for major GAAP cash flow categories as well as further detail
relating to
the changes in "Cash provided by operating activities" for the
three month periods noted. In addition, includes cash activity
related to the Delrin® Divestiture
in both periods and in the comparative period, includes cash
activity related to the M&M Divestiture.
|
DuPont de Nemours,
Inc. Selected Financial Information and Non-GAAP
Measures
|
|
Significant Items
Impacting Results for the Three Months Ended March 31,
2023
|
In millions, except per
share amounts (Unaudited)
|
Pretax
1
|
Net Income
2
|
EPS
3
|
Income Statement
Classification
|
Reported results
(GAAP)
|
$ 356
|
$ 273
|
$ 0.58
|
|
Less: Significant
items
|
|
|
|
|
Restructuring and
asset related charges - net 4
|
(14)
|
(11)
|
(0.02)
|
Restructuring and asset
related charges -
net
|
Gain on divestiture
5
|
6
|
5
|
0.01
|
Sundry income (expense)
- net
|
Total significant
items
|
$
(8)
|
$
(6)
|
$
(0.01)
|
|
Less: Amortization of
intangibles
|
(147)
|
(115)
|
(0.25)
|
Amortization of
intangibles
|
Less: Non-op pension /
OPEB benefit
|
(2)
|
(1)
|
—
|
Sundry income (expense)
- net
|
Less: Future
reimbursable indirect costs
|
(2)
|
(1)
|
—
|
Selling, general and
administrative
expenses
|
Adjusted results
(non-GAAP)
|
$ 515
|
$ 396
|
$ 0.84
|
|
|
Significant Items
Impacting Results for the Three Months Ended March 31,
2022
|
In millions, except per
share amounts (Unaudited)
|
Pretax
1
|
Net Income
2
|
EPS
3
|
Income Statement
Classification
|
Reported results
(GAAP)
|
$ 279
|
$ 214
|
$ 0.42
|
|
Less: Significant
items
|
|
|
|
|
Acquisition,
integration and separation costs 6
|
(8)
|
(6)
|
(0.01)
|
Acquisition,
integration and separation
costs
|
Restructuring and
asset related charges - net 4
|
(7)
|
(5)
|
(0.01)
|
Restructuring and asset
related charges
- net
|
Asset impairment
charges 7
|
(94)
|
(65)
|
(0.13)
|
Restructuring and asset
related charges
- net
|
Terminated Intended
Rogers Acquisition
financing fees 8
|
(2)
|
(1)
|
—
|
Interest
expense
|
Income tax related
item
|
—
|
(3)
|
(0.01)
|
Provision for income
taxes on
continuing operations
|
Total significant
items
|
$ (111)
|
$ (80)
|
$
(0.16)
|
|
Less: Amortization of
intangibles
|
(153)
|
(119)
|
(0.23)
|
Amortization of
intangibles
|
Less: Non-op pension /
OPEB benefit
|
7
|
5
|
0.01
|
Sundry income (expense)
- net
|
Less: Future
reimbursable indirect costs
|
(16)
|
(12)
|
(0.02)
|
Cost of sales; Research
and
development expenses; Selling, general
and administrative expenses
|
Adjusted results
(non-GAAP)
|
$ 552
|
$ 420
|
$ 0.82
|
|
1.
|
Income (loss) from
continuing operations before income taxes.
|
2.
|
Net income (loss) from
continuing operations available for DuPont common stockholders. The
income tax effect on significant items was calculated based
upon the enacted tax laws and statutory income tax rates applicable
in the tax jurisdiction(s) of the underlying non-GAAP
adjustment.
|
3.
|
Earnings (loss) per
common share from continuing operations - diluted.
|
4.
|
Includes Board approved
restructuring plans and other asset related charges.
|
5.
|
Reflects post-closing
adjustments related to previously divested businesses.
|
6.
|
Acquisition,
integration and separation costs related to strategic initiatives
including the acquisition of Laird PM and the Intended Rogers
Acquisition.
|
7.
|
Reflects a pre-tax
impairment charge related to an equity method
investment.
|
8.
|
Reflects structuring
fees and the amortization of the commitment fees related to the
financing agreements entered into in preparation for the
Terminated
Intended Rogers Acquisition.
|
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SOURCE DuPont