Third Quarter 2023 Highlights
- Net Sales of $3.1 billion
decreased 8%; organic sales decreased 10% versus year-ago
period
- GAAP Income from continuing operations of $291 million; operating EBITDA of $775 million
- GAAP EPS from continuing operations of $0.62; adjusted EPS of $0.92
- Cash provided by operating activities from continuing
operations of $740 million; adjusted
free cash flow of $621 million
WILMINGTON, Del., Nov. 1, 2023
/PRNewswire/ -- DuPont (NYSE: DD) announced its financial
results(1) for the third quarter ended September 30, 2023.
"We delivered solid third quarter earnings despite ongoing
volume headwinds from channel inventory destocking and continued
softness in China. Sequential
operating EBITDA growth of 5% and margin improvement of 140 basis
points in the third quarter demonstrated sound operating execution,
while strong cash generation and conversion during the quarter also
highlighted our efforts to prioritize working capital improvement
in the currently uneven global business climate," said Ed Breen, DuPont Executive Chairman and Chief
Executive Officer.
"As expected, our Interconnect Solutions business within the
electronics portfolio recorded a second straight quarter of
sequential sales lift and we are seeing signs of demand
stabilization within semiconductor end-markets. We are, however,
seeing additional channel destocking as well as slower industrial
water demand in China. In response
to these ongoing volume headwinds, we continue to control our
spending and are also planning to take additional restructuring
actions to continue to drive operational performance," Breen
added.
"This morning we also announced that today we will close the
previously announced sale of our 80.1% ownership interest in the
Delrin® business to TJC," Breen continued. "With this
Delrin® sale, completion of our $3.25 billion accelerated share repurchase
transaction ("ASR") and launch of a new $2
billion ASR in September, we have significantly advanced our
strategic priorities aimed at driving shareholder value."
Third Quarter 2023
Results(1)
|
|
Dollars in millions,
unless noted
|
3Q'23
|
3Q'22
|
Change
vs.
3Q'22
|
Organic Sales
(2)
vs.
3Q'22
|
Net sales
|
$3,058
|
$3,317
|
(8) %
|
(10) %
|
GAAP Income from
continuing operations
|
$291
|
$359
|
(19) %
|
|
Operating
EBITDA(2)
|
$775
|
$856
|
(9) %
|
|
Operating
EBITDA(2) margin %
|
25.3 %
|
25.8 %
|
(50)bps
|
|
GAAP EPS from
continuing operations
|
$0.62
|
$0.69
|
(10) %
|
|
Adjusted
EPS(2)
|
$0.92
|
$0.82
|
12 %
|
|
Cash provided by
operating activities – cont. ops.
|
$740
|
$578
|
28 %
|
|
Adjusted free cash
flow(2)
|
$621
|
$423
|
47 %
|
|
Net sales
- Net sales decreased 8% as organic sales(2) decline
of 10% was slightly offset by favorable portfolio impact of 2%,
primarily reflecting the August
1st acquisition of Spectrum.
- Organic sales(2) decline of 10% reflects lower
volume primarily from semiconductor and construction end-markets,
as well as the impact of channel inventory destocking.
- 13% organic sales(2) decline in Electronics &
Industrial; 8% organic sales(2) decline in Water &
Protection; 1% organic sales(2) growth in the retained
businesses reported in Corporate, which includes mid-single digit
growth in the adhesives business.
- 12% organic sales(2) decline in Asia Pacific; 10% organic sales(2)
decline in U.S. & Canada; 2%
organic sales(2) decline in EMEA.
|
(1) Results
and cash flows are 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, organic sales, and adjusted free cash flow are
non-GAAP measures and only reflect continuing operations. See pages
6-7 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 12 of this
communication.
|
GAAP Income/GAAP EPS from continuing operations
- GAAP income/GAAP EPS from continuing operations decreased as
lower segment earnings and the absence of a one-time credit
recorded in the prior year related to the CARES Act more than
offset lower net interest expense and the impact of a lower share
count related to the accelerated share repurchase
transactions.
Operating EBITDA(2)
- Operating EBITDA(2) decreased as volume declines and
the impact of reduced production rates to better align inventory
with demand were partially offset by lower input costs and earnings
associated with Spectrum.
- Operating EBITDA(2) margin increased 140 basis
points sequentially in the third quarter.
Adjusted EPS(2)
- Adjusted EPS(2) increased as the impact of a lower
share count and lower net interest expense more than offset lower
segment earnings.
Cash provided by operating activities from continuing
operations
- Cash provided by operating activities from continuing
operations in the quarter of $740
million and capital expenditures of $119 million resulted in adjusted free cash
flow(2) of $621
million.
Third Quarter 2023
Segment Highlights
|
|
Electronics &
Industrial
|
|
Dollars in millions,
unless noted
|
3Q'23
|
3Q'22
|
Change
vs.
3Q'22
|
Organic
Sales(2)
vs.
3Q'22
|
Net sales
|
$1,368
|
$1,511
|
(9) %
|
(13) %
|
Operating
EBITDA
|
$383
|
$473
|
(19) %
|
|
Operating EBITDA margin
%
|
28.0 %
|
31.3 %
|
(330) bps
|
|
Net sales
- Net sales decreased 9% as organic sales(2) decline
of 13% was partially offset by favorable portfolio impact of 4%
primarily reflecting the Spectrum acquisition within Industrial
Solutions.
- Organic sales(2) decline of 13% reflects a 12%
decline in volume and a 1% decline in price.
- Semiconductor Technologies sales down high-teens on an
organic basis resulting from a continuation of inventory destocking
and reduced semiconductor fab utilization rates due to ongoing
consumer electronics demand weakness. On a reported basis,
Semiconductor Technologies sales were flat sequentially in the
third quarter.
- Interconnect Solutions sales down 11% year-over-year on
an organic basis driven by lower consumer electronics volumes and
channel inventory destocking, as well as the impact of lower
pass-through metals prices. On a reported basis, Interconnect
Solutions sales increased 8% sequentially in the third
quarter.
- Industrial Solutions sales down high-single digits on an
organic basis due primarily to channel inventory destocking within
biopharma markets and continued lower demand in electronics-related
markets, slightly offset by increased demand for OLED
materials.
Operating EBITDA
- Operating EBITDA decreased due to volume declines and reduced
production rates to better align inventory with demand, slightly
offset by earnings associated with Spectrum.
- Operating EBITDA(2) margin increased 140 basis
points sequentially in the third quarter.
Water &
Protection
|
|
Dollars in millions,
unless noted
|
3Q'23
|
3Q'22
|
Change
vs.
3Q'22
|
Organic
Sales(2)
vs.
3Q'22
|
Net sales
|
$1,413
|
$1,534
|
(8) %
|
(8) %
|
Operating
EBITDA
|
$362
|
$382
|
(5) %
|
|
Operating EBITDA margin
%
|
25.6 %
|
24.9 %
|
70 bps
|
|
Net sales
- Net sales decreased 8% due to a 9% decline in volume slightly
offset by a 1% increase in price.
- Safety Solutions sales down high-single digits on an
organic(2) basis due to volume declines driven by
channel inventory destocking.
- Shelter Solutions sales down high-single digits on an
organic(2) basis driven by continued construction market
softness, including channel inventory destocking.
- Water Solutions sales down mid-single digits on an
organic(2) basis driven by lower volumes resulting
primarily from weaker industrial demand as well as distributor
inventory destocking in China.
Operating EBITDA
- Operating EBITDA decreased due to lower volumes partially
offset by the impact of net pricing benefits.
- Operating EBITDA(2) margin increased 100 basis
points sequentially in the third quarter.
Outlook
|
|
Dollars in millions,
unless noted
|
|
Full Year
2023E
|
Net sales
|
|
~$12,170
|
Operating
EBITDA(2)
|
|
~$2,975
|
Adjusted
EPS(2)
|
|
~$3.45
|
"Our teams continue to successfully execute in a constrained
volume environment through strong internal discipline and focus on
operational excellence," said Lori
Koch, Chief Financial Officer of DuPont. "I am pleased with
our sequential margin improvement despite volume headwinds and by
our strong cash performance during the third quarter."
"As we look at the fourth quarter, underlying consumer
electronics demand is expected to be similar with the third quarter
and reflected by stable order rates from our customers, with some
sequential sales lift expected in Semiconductor Technologies," Koch
continued. "However, versus our prior guidance, we are seeing
additional channel inventory destocking and slower industrial water
demand in China. We are revising
our 2023 full year net sales and operating EBITDA guidance to
reflect near-term volume headwinds and are also planning additional
restructuring actions with realization of savings expected to begin
later in the first quarter of 2024."
Conference Call
The Company will host a live webcast
of its third 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.
DuPontTM and all products, unless otherwise noted,
denoted with TM, SM or ® are
trademarks, service marks or registered trademarks of affiliates of
DuPont de Nemours, Inc.
Overview
Beginning in the second quarter of
2023, the Company has segregated the cash flows from discontinued
operations from the cash flows from continuing operations in
accordance with ASC 230, Statement of Cash Flows. The interim
Consolidated Statements of Cash Flows have been recast for all
periods to reflect the change in presentation.
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 approved the divestiture
of the Delrin® acetal homopolymer (H-POM) business. On November 1, 2023, DuPont completed the
divestiture of the Delrin® business to TJC LP, (the "Delrin®
Divestiture" and together with the M&M Divestiture, the
"M&M Divestitures")
The financial position of DuPont as of September 30, 2023 and December 31, 2022 presents the assets and
liabilities of the Delrin® Divestiture as discontinued operations.
The results of operations for the three and nine months ended
September 30, 2023 present the
financial results of the Delrin® Divestiture as discontinued
operations. In the comparative periods, the results of operations
for both the M&M Divestiture and the Delrin® Divestiture are
presented as discontinued operations. For the nine months ended
September 30, 2023, the interim
Consolidated Statements of Cash Flows present the cash flows of the
Delrin® Divestiture as discontinued operations. The interim
Consolidated Statements of Cash Flows for the nine months ended
September 30, 2022, present the cash
flows from the businesses divested as part of the M&M
Divestitures as discontinued operations. 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 about 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) risks and
uncertainties related to the settlement agreement concerning PFAS
liabilities reached June 2023 with
plaintiff water utilities by Chemours, Corteva, EIDP and DuPont,
including timing of court approval and the level of opt-outs
from the settlement; (ii) 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, including the outcome of any pending
or future litigation related to PFAS or PFOA, including personal
injury claims and natural resource damages claims; the extent and
cost of ongoing remediation obligations and potential future
remediation obligations; changes in laws and regulations applicable
to PFAS chemicals; (iii) 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; (iv) indemnification of certain legacy
liabilities; (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 management, productivity and infrastructure actions; (vi)
risks and uncertainties, including increased costs and the ability
to obtain raw materials and meet customer needs from, among
other events, pandemics and responsive actions; timing and recovery
from demand declines in consumer-facing markets, including in
China; adverse changes in
worldwide economic, political, regulatory, international trade,
geopolitical, capital markets and other external conditions; and
other factors beyond the Company's control, including inflation,
recession, military conflicts, natural and other disasters or
weather related events, that impact the operations of the Company;
its customers and/or suppliers; (vii) ability to offset increases
in cost of inputs, including raw materials, energy and logistics;
(viii) risks associated with demand and market conditions in the
semiconductor industry and associated end markets, including from
continuing or expanding trade disputes or restrictions, including
on exports to China of
U.S.-regulated products and technology; (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
Unless otherwise
indicated, all financial metrics presented reflect continuing
operations only.
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 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 about
$605 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 from continuing operations 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 from continuing operations. 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.
Beginning in the second quarter of 2023, the Company has
segregated the cash flows from discontinued operations from the
cash flows from continuing operations in accordance with ASC 230,
Statement of Cash Flows. In connection with this change, the
Company updated the definition of adjusted free cash flow to
include only activities from continuing operations. The Company
believes that excluding cash flows from discontinued operations
provides the Company's investors with better visibility into the
underlying businesses cash generation for ongoing businesses.
Adjusted free cash flows has been recast for all periods to reflect
the change in definition.
Previously, 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 the 2021 measures of adjusted free cash flow
were not necessary. Following the change to adjusted free cash flow
from continuing operations, noted above, adjustments to exclude 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 will be adjusted to the extent they relate to
continuing operations. Management notes that for the three and nine
month periods ended September 30,
2023 and 2022, respectively, there were no exclusions for
items that are unusual in nature and/or infrequent in
occurrence.
Adjusted free cash flow conversion is defined as adjusted free
cash flow from continuing operations divided by net income from
continuing operations adjusted to exclude the after-tax impact of
noncash impairment charges, gains or losses on divestitures and
amortization expense of intangibles.
DuPont de Nemours,
Inc.
Consolidated
Statements of Operations
|
|
In millions, except per
share amounts (Unaudited)
|
Three Months
Ended
September 30,
|
Nine Months
Ended
September 30,
|
2023
|
2022
|
2023
|
2022
|
Net sales
|
$
3,058
|
$
3,317
|
$
9,170
|
$
9,913
|
Cost of
sales
|
1,954
|
2,095
|
5,967
|
6,354
|
Research and
development expenses
|
128
|
129
|
380
|
413
|
Selling, general and
administrative expenses
|
360
|
356
|
1,058
|
1,130
|
Amortization of
intangibles
|
155
|
146
|
448
|
447
|
Restructuring and
asset related charges - net
|
8
|
—
|
39
|
101
|
Acquisition,
integration and separation costs
|
9
|
7
|
15
|
28
|
Equity in earnings of
nonconsolidated affiliates
|
11
|
16
|
40
|
62
|
Sundry income
(expense) - net
|
55
|
26
|
112
|
123
|
Interest
expense
|
102
|
128
|
295
|
370
|
Income from continuing
operations before income taxes
|
408
|
498
|
1,120
|
1,255
|
Provision for income
taxes on continuing operations
|
117
|
139
|
287
|
299
|
Income from continuing
operations, net of tax
|
291
|
359
|
833
|
956
|
Income (loss) from
discontinued operations, net of tax
|
37
|
17
|
(357)
|
723
|
Net income
|
328
|
376
|
476
|
1,679
|
Net income
attributable to noncontrolling interests
|
9
|
9
|
31
|
37
|
Net income available
for DuPont common stockholders
|
$
319
|
$
367
|
$
445
|
$
1,642
|
|
Per common share
data:
|
|
|
|
|
Earnings per common
share from continuing operations - basic
|
$
0.62
|
$
0.69
|
$
1.76
|
$
1.81
|
Earnings (loss) per
common share from discontinued operations - basic
|
0.08
|
0.05
|
(0.78)
|
1.44
|
Earnings per common
share - basic
|
$
0.71
|
$
0.73
|
$
0.97
|
$
3.25
|
Earnings per common
share from continuing operations - diluted
|
$
0.62
|
$
0.69
|
$
1.75
|
$
1.80
|
Earnings (loss) per
common share from discontinued operations - diluted
|
0.08
|
0.05
|
(0.78)
|
1.44
|
Earnings per common
share - diluted
|
$
0.70
|
$
0.73
|
$
0.97
|
$
3.24
|
|
Weighted-average common
shares outstanding - basic
|
451.7
|
499.4
|
456.5
|
505.6
|
Weighted-average common
shares outstanding - diluted
|
453.4
|
500.4
|
457.8
|
506.9
|
DuPont de Nemours,
Inc. Consolidated Balance Sheets
|
|
In millions, except
share amounts (Unaudited)
|
September 30,
2023
|
December 31,
2022
|
Assets
|
|
|
Current
Assets
|
|
|
Cash and cash
equivalents
|
$
1,338
|
$
3,662
|
Marketable
securities
|
—
|
1,302
|
Restricted cash and
cash equivalents
|
409
|
7
|
Accounts and notes
receivable - net
|
2,399
|
2,518
|
Inventories
|
2,279
|
2,329
|
Prepaid and other
current assets
|
196
|
161
|
Assets of discontinued
operations
|
1,314
|
1,291
|
Total current
assets
|
7,935
|
11,270
|
Property, plant and
equipment - net of accumulated depreciation (September 30,
2023 - $4,711; December 31, 2022 - $4,448)
|
5,756
|
5,731
|
Other Assets
|
|
|
Goodwill
|
17,251
|
16,663
|
Other intangible
assets
|
6,038
|
5,495
|
Restricted cash and
cash equivalents - noncurrent
|
—
|
103
|
Investments and
noncurrent receivables
|
751
|
733
|
Deferred income tax
assets
|
103
|
109
|
Deferred charges and
other assets
|
1,299
|
1,251
|
Total other
assets
|
25,442
|
24,354
|
Total Assets
|
$
39,133
|
$
41,355
|
Liabilities and
Equity
|
|
|
Current
Liabilities
|
|
|
Short-term
borrowings
|
$
475
|
$
300
|
Accounts
payable
|
1,685
|
2,103
|
Income taxes
payable
|
119
|
233
|
Accrued and other
current liabilities
|
1,272
|
951
|
Liabilities of
discontinued operations
|
137
|
146
|
Total current
liabilities
|
3,688
|
3,733
|
Long-Term
Debt
|
7,740
|
7,774
|
Other Noncurrent
Liabilities
|
|
|
Deferred income tax
liabilities
|
1,326
|
1,158
|
Pension and other
post-employment benefits - noncurrent
|
511
|
522
|
Other noncurrent
obligations
|
1,241
|
1,151
|
Total other noncurrent
liabilities
|
3,078
|
2,831
|
Total
Liabilities
|
14,506
|
14,338
|
Commitments and
contingent liabilities
|
|
|
Stockholders'
Equity
|
|
|
Common stock
(authorized 1,666,666,667 shares of $0.01 par value
each;
issued 2023:
430,011,698 shares; 2022: 458,124,262 shares)
|
4
|
5
|
Additional paid-in
capital
|
48,190
|
48,420
|
Accumulated
deficit
|
(22,854)
|
(21,065)
|
Accumulated other
comprehensive loss
|
(1,148)
|
(791)
|
Total DuPont
stockholders' equity
|
24,192
|
26,569
|
Noncontrolling
interests
|
435
|
448
|
Total
equity
|
24,627
|
27,017
|
Total Liabilities and
Equity
|
$
39,133
|
$
41,355
|
DuPont de Nemours,
Inc.
Consolidated
Statement of Cash Flows
|
|
In millions
(Unaudited)
|
Nine Months Ended
September 30,
|
2023
|
2022
|
Operating
Activities
|
|
|
Net income
|
$
476
|
$
1,679
|
(Loss) income from
discontinued operations
|
(357)
|
723
|
Net income from
continuing operations
|
$
833
|
$
956
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
Depreciation and
amortization
|
853
|
861
|
Credit for deferred
income tax and other tax related items
|
(40)
|
(124)
|
Earnings of
nonconsolidated affiliates in excess of dividends
received
|
(13)
|
(11)
|
Net periodic benefit
costs
|
23
|
1
|
Periodic benefit plan
contributions
|
(49)
|
(44)
|
Net gain on sales of
assets, businesses and investments
|
(8)
|
(75)
|
Restructuring and
asset related charges - net
|
39
|
101
|
Other net
loss
|
72
|
12
|
Changes in assets and
liabilities, net of effects of acquired and divested
companies:
|
|
|
Accounts and notes
receivable
|
100
|
(232)
|
Inventories
|
57
|
(318)
|
Accounts
payable
|
(191)
|
32
|
Other assets and
liabilities, net
|
(131)
|
(95)
|
Cash provided by
operating activities - continuing operations
|
$
1,545
|
$
1,064
|
Investing
Activities
|
|
|
Capital
expenditures
|
(474)
|
(502)
|
Proceeds from sales of
property and businesses, net of cash divested
|
16
|
364
|
Acquisitions of
property and businesses, net of cash acquired
|
(1,761)
|
5
|
Purchases of
investments
|
(32)
|
(15)
|
Proceeds from sales
and maturities of investments
|
1,334
|
15
|
Other investing
activities, net
|
(2)
|
4
|
Cash used for
investing activities - continuing operations
|
$
(919)
|
$
(129)
|
Financing
Activities
|
|
|
Changes in short-term
borrowings
|
175
|
1,137
|
Proceeds from credit
facility
|
—
|
600
|
Repayments of credit
facility
|
—
|
(600)
|
Purchases of common
stock
|
(2,000)
|
(1,125)
|
Proceeds from issuance
of Company stock
|
22
|
83
|
Employee taxes paid
for share-based payment arrangements
|
(25)
|
(25)
|
Distributions to
noncontrolling interests
|
(34)
|
(27)
|
Dividends paid to
stockholders
|
(495)
|
(500)
|
Other financing
activities, net
|
(2)
|
(4)
|
Cash used for
financing activities - continuing operations
|
$
(2,359)
|
$
(461)
|
Cash Flows from
Discontinued Operations
|
|
|
Cash used for
operations - discontinued operations
|
(176)
|
(350)
|
Cash used for
investing activities - discontinued operations
|
(60)
|
(56)
|
Cash used for
financing activities - discontinued operations
|
—
|
(19)
|
Cash used in
discontinued operations
|
$
(236)
|
$
(425)
|
Effect of exchange rate
changes on cash, cash equivalents and restricted cash
|
(56)
|
(191)
|
Decrease in cash,
cash equivalents and restricted cash
|
$
(2,025)
|
$
(142)
|
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
|
1,747
|
1,896
|
Cash, cash equivalents
and restricted cash from discontinued operations, end of
period
|
—
|
38
|
Cash, cash
equivalents and restricted cash at end of period
|
$
1,747
|
$
1,934
|
DuPont de Nemours,
Inc.
Net Sales by
Segment and Geographic Region
|
|
Net Sales by Segment
and Geographic Region
|
Three Months
Ended
|
Nine Months
Ended
|
In millions
(Unaudited)
|
Sep 30,
2023
|
Sep 30,
2022
|
Sep 30,
2023
|
Sep 30,
2022
|
Electronics &
Industrial
|
$
1,368
|
$
1,511
|
$
3,976
|
$
4,574
|
Water &
Protection
|
1,413
|
1,534
|
4,356
|
4,460
|
Corporate & Other
1
|
277
|
272
|
838
|
879
|
Total
|
$
3,058
|
$
3,317
|
$
9,170
|
$
9,913
|
U.S. &
Canada
|
$
1,093
|
$
1,149
|
$
3,161
|
$
3,293
|
EMEA
2
|
535
|
523
|
1,702
|
1,665
|
Asia
Pacific3
|
1,302
|
1,524
|
3,945
|
4,622
|
Latin
America
|
128
|
121
|
362
|
333
|
Total
|
$
3,058
|
$
3,317
|
$
9,170
|
$
9,913
|
Net Sales Variance
by Segment
and Geographic Region
|
Three Months Ended
September 30, 2023
|
|
Local Price
&
Product Mix
|
Volume
|
Total
Organic
|
Currency
|
Portfolio &
Other
|
Total
|
|
Percent change from
prior year
(Unaudited)
|
|
Electronics &
Industrial
|
(1) %
|
(12) %
|
(13) %
|
— %
|
4 %
|
(9) %
|
|
Water &
Protection
|
1
|
(9)
|
(8)
|
—
|
—
|
(8)
|
|
Corporate & Other
1
|
(1)
|
2
|
1
|
1
|
—
|
2
|
|
Total
|
— %
|
(10) %
|
(10) %
|
— %
|
2 %
|
(8) %
|
|
U.S. &
Canada
|
1 %
|
(11) %
|
(10) %
|
— %
|
5 %
|
(5) %
|
|
EMEA2
|
3
|
(5)
|
(2)
|
4
|
—
|
2
|
|
Asia
Pacific3
|
(1)
|
(11)
|
(12)
|
(2)
|
(1)
|
(15)
|
|
Latin
America
|
—
|
2
|
2
|
—
|
4
|
6
|
|
Total
|
— %
|
(10) %
|
(10) %
|
— %
|
2 %
|
(8) %
|
|
|
Net Sales Variance
by Segment
and Geographic Region
|
Nine Months Ended
September 30, 2023
|
|
Local Price
&
Product Mix
|
Volume
|
Total
Organic
|
Currency
|
Portfolio &
Other
|
Total
|
|
Percent change from
prior year
(Unaudited)
|
|
Electronics &
Industrial
|
1 %
|
(13) %
|
(12) %
|
(1) %
|
— %
|
(13) %
|
|
Water &
Protection
|
4
|
(5)
|
(1)
|
(1)
|
—
|
(2)
|
|
Corporate & Other
1
|
2
|
3
|
5
|
(1)
|
(9)
|
(5)
|
|
Total
|
2 %
|
(8) %
|
(6) %
|
(1) %
|
— %
|
(7) %
|
|
U.S. &
Canada
|
3 %
|
(8) %
|
(5) %
|
— %
|
1 %
|
(4) %
|
|
EMEA2
|
4
|
(2)
|
2
|
—
|
—
|
2
|
|
Asia
Pacific3
|
1
|
(11)
|
(10)
|
(3)
|
(2)
|
(15)
|
|
Latin
America
|
1
|
6
|
7
|
—
|
2
|
9
|
|
Total
|
2 %
|
(8) %
|
(6) %
|
(1) %
|
— %
|
(7) %
|
|
|
|
1.
|
Corporate & Other
includes activities of the Retained Businesses
and Biomaterials prior to its May 2022 divestiture.
|
2.
|
Europe, Middle East and
Africa.
|
3.
|
Net sales attributed to
China, for the three months ended September 30, 2023 and 2022 were
$563 million and $688 million, respectively, while for the nine
months ended months ended September 30, 2023 and 2022 net sales
attributed to China were $1,669 million and $2,119 million,
respectively.
|
DuPont de Nemours,
Inc.
Selected Financial
Information and Non-GAAP Measures
|
|
|
|
Operating
EBITDA by Segment
|
Three Months
Ended
|
Nine Months
Ended
|
|
In millions
(Unaudited)
|
Sep 30,
2023
|
Sep 30,
2022
|
Sep 30,
2023
|
Sep 30,
2022
|
|
Electronics &
Industrial
|
$
383
|
$
473
|
$
1,094
|
$
1,429
|
|
Water &
Protection
|
362
|
382
|
1,074
|
1,071
|
|
Corporate & Other
1
|
30
|
1
|
59
|
3
|
|
Total
|
$
775
|
$
856
|
$
2,227
|
$
2,503
|
|
1. In addition to
corporate expenses, Corporate & Other includes activities of
the Retained Businesses and Biomaterials prior to its May 2022
divestiture.
|
|
|
|
|
|
|
|
|
Equity in Earnings
of Nonconsolidated Affiliates by Segment
|
Three Months
Ended
|
Nine Months
Ended
|
|
In millions
(Unaudited)
|
Sep 30,
2023
|
Sep 30,
2022
|
Sep 30,
2023
|
Sep 30,
2022
|
|
Electronics &
Industrial
|
$
3
|
$
7
|
$
11
|
$
26
|
|
Water &
Protection
|
8
|
9
|
29
|
31
|
|
Corporate & Other
1
|
—
|
—
|
—
|
5
|
|
Total equity earnings
included in operating EBITDA (GAAP)
|
$
11
|
$
16
|
$
40
|
$
62
|
|
1. Corporate &
Other includes activities of the Retained Businesses and
Biomaterials prior to its May 2022 divestiture.
|
|
|
|
|
|
|
|
|
Reconciliation of
"Income from continuing operations, net of tax" to
"Operating EBITDA"
|
Three Months
Ended
|
Nine Months
Ended
|
|
|
In millions
(Unaudited)
|
Sep 30,
2023
|
Sep 30,
2022
|
Sep 30,
2023
|
Sep 30,
2022
|
|
Income from continuing
operations, net of tax (GAAP)
|
$
291
|
$
359
|
$
833
|
$
956
|
|
+ Provision for income
taxes on continuing operations
|
117
|
139
|
287
|
299
|
|
Income from continuing
operations before income taxes
|
$
408
|
$
498
|
$
1,120
|
$
1,255
|
|
+ Depreciation and
amortization
|
294
|
283
|
853
|
861
|
|
- Interest
income 1
|
34
|
5
|
132
|
8
|
|
+ Interest
expense
|
102
|
127
|
295
|
365
|
|
'- Non-operating pension/OPEB benefit (costs) credits
1
|
(3)
|
7
|
(7)
|
20
|
|
'- Foreign exchange losses (gains), net
1
|
17
|
5
|
(31)
|
9
|
|
+ Future reimbursable
indirect costs
|
2
|
14
|
6
|
45
|
|
- Significant items
(charge) benefit
|
(17)
|
49
|
(47)
|
(14)
|
|
Operating EBITDA
(non-GAAP)
|
$
775
|
$
856
|
$
2,227
|
$
2,503
|
|
1. Included in
"Sundry income (expense) - net."
|
|
|
|
Reconciliation of
"Cash provided by operating activities - continuing
operations" to
Adjusted Free Cash Flow 1
|
Three Months
Ended
|
Nine Months
Ended
|
In millions
(Unaudited)
|
Sep 30,
2023
|
Sep 30,
2022
|
Sep 30,
2023
|
Sep 30,
2022
|
Cash provided by
operating activities - continuing operations (GAAP)
2
|
$
740
|
$
578
|
$
1,545
|
$
1,064
|
Capital
expenditures
|
(119)
|
(155)
|
(474)
|
(502)
|
Adjusted Free Cash Flow
(non-GAAP)
|
$
621
|
$
423
|
$
1,071
|
$
562
|
|
|
1.
|
Adjusted Free Cash Flow
is calculated on a continuing operations basis for all periods
presented. Refer to the definitions of Non-GAAP metrics on page 6
for additional information.
|
2.
|
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 -
continuing operations" for the nine month periods noted.
|
DuPont de Nemours,
Inc.
Selected Financial
Information and Non-GAAP Measures
|
|
Significant Items
Impacting Results for the Three Months Ended September 30,
2023
|
In millions, except per
share amounts (Unaudited)
|
Pretax
1
|
Net
Income 2
|
EPS
3
|
Income Statement
Classification
|
Reported results
(GAAP)
|
$ 408
|
$ 282
|
$ 0.62
|
|
Less: Significant
items
|
|
|
|
|
Acquisition,
integration and separation costs 4
|
(9)
|
(9)
|
(0.02)
|
Acquisition,
integration and separation
costs
|
Restructuring and
asset related charges - net 5
|
(8)
|
(6)
|
(0.01)
|
Restructuring and asset
related charges -
net
|
Income tax related
item
|
—
|
6
|
0.01
|
Provision for income
taxes on
continuing operation
|
Total significant
items
|
$ (17)
|
$
(9)
|
$
(0.02)
|
|
Less: Amortization of
intangibles
|
(155)
|
(121)
|
(0.27)
|
Amortization of
intangibles
|
Less: Non-op pension /
OPEB benefit costs
|
(3)
|
(2)
|
(0.01)
|
Sundry income (expense)
- net
|
Less: Future
reimbursable indirect costs
|
(2)
|
(1)
|
—
|
Selling, general and
administrative
expenses
|
Adjusted results
(non-GAAP)
|
$ 585
|
$ 415
|
$ 0.92
|
|
|
Significant Items
Impacting Results for the Three Months Ended September 30,
2022
|
In millions, except per
share amounts (Unaudited)
|
Pretax
1
|
Net
Income 2
|
EPS
3
|
Income Statement
Classification
|
Reported results
(GAAP)
|
$ 498
|
$ 343
|
$ 0.69
|
|
Less: Significant
items
|
|
|
|
|
Acquisition,
integration and separation costs 6
|
(7)
|
(5)
|
(0.01)
|
Acquisition,
integration and separation
costs
|
Gain on divestiture
7
|
5
|
3
|
0.01
|
Sundry income (expense)
- net
|
Intended Rogers
Acquisition financing fees 8
|
(1)
|
(1)
|
—
|
Interest
expense
|
Income tax related
item
|
—
|
13
|
0.02
|
Provision for income
taxes on
continuing operation
|
Employee Retention
Credit 9
|
52
|
40
|
0.08
|
Cost of sales; Research
and
development expenses; Selling, general
and administrative expenses
|
Total significant
items
|
$
49
|
$
50
|
$ 0.10
|
|
Less: Amortization of
intangibles
|
(146)
|
(113)
|
(0.22)
|
Amortization of
intangibles
|
Less: Non-op pension /
OPEB benefit credits
|
7
|
6
|
0.01
|
Sundry income (expense)
- net
|
Less: Future
reimbursable indirect costs
|
(14)
|
(11)
|
(0.02)
|
Cost of sales; Research
and
development expenses; Selling, general
and administrative expenses
|
Adjusted results
(non-GAAP)
|
$ 602
|
$ 411
|
$ 0.82
|
|
|
|
1.
|
Income (loss) from
continuing operations before income taxes.
|
2.
|
Net income 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.
|
Acquisition,
integration and separation costs related to the Spectrum
Acquisition.
|
5.
|
Includes Board approved
restructuring plans and other asset related charges.
|
6.
|
Acquisition,
integration and separation costs related to the sale of the
Biomaterials business unit and the Terminated Intended Rogers
Acquisition.
|
7.
|
Reflects gain related
to interest on a milestone payment associated with the TCS/HSC
disposal.
|
8.
|
Reflects structuring
fees and the amortization of the commitment fees related to the
financing agreements entered into for the Terminated Intended
Rogers Acquisition.
|
9.
|
Employee Retention
Credit pursuant to the Coronavirus Aid, Relief, and Economic
Security ("CARES") Act as enhanced by the Consolidated
Appropriations Act ("CAA") and American Rescue Plan Act
("ARPA").
|
DuPont de Nemours,
Inc.
Selected Financial
Information and Non-GAAP Measures
|
|
Significant Items
Impacting Results for the Nine Months Ended September 30,
2023
|
In millions, except per
share amounts (Unaudited)
|
Pretax
1
|
Net
Income 2
|
EPS
3
|
Income Statement
Classification
|
Reported results
(GAAP)
|
$
1,120
|
$ 802
|
$ 1.75
|
|
Less: Significant
items
|
|
|
|
|
Acquisition,
integration and separation costs 4
|
(15)
|
(14)
|
(0.03)
|
Acquisition,
integration and separation
costs
|
Restructuring and
asset related charges - net 5
|
(39)
|
(30)
|
(0.06)
|
Restructuring and asset
related charges -
net
|
Gain on divestiture
6
|
7
|
6
|
0.01
|
Sundry income (expense)
- net
|
Income tax related
item
|
—
|
5
|
0.01
|
Provision for income
taxes on
continuing operations
|
Total significant
items
|
$ (47)
|
$ (33)
|
$
(0.07)
|
|
Less: Amortization of
intangibles
|
(448)
|
(350)
|
(0.77)
|
Amortization of
intangibles
|
Less: Non-op pension /
OPEB benefit costs
|
(7)
|
(5)
|
(0.01)
|
Sundry income (expense)
- net
|
Less: Future
reimbursable indirect costs
|
(6)
|
(4)
|
(0.01)
|
Selling, general and
administrative
expenses
|
Adjusted results
(non-GAAP)
|
$
1,628
|
$
1,194
|
$ 2.61
|
|
|
Significant Items
Impacting Results for the Nine Months Ended September 30,
2022
|
In millions, except per
share amounts (Unaudited)
|
Pretax
1
|
Net
Income 2
|
EPS
3
|
Income Statement
Classification
|
Reported results
(GAAP)
|
$
1,255
|
$ 914
|
$ 1.80
|
|
Less: Significant
items
|
|
|
|
|
Acquisition,
integration and separation costs 7
|
(28)
|
(22)
|
(0.04)
|
Acquisition,
integration and separation
costs
|
Restructuring and
asset related charges - net 5
|
(7)
|
(5)
|
(0.01)
|
Restructuring and asset
related charges -
net
|
Asset impairment
charges 8
|
(94)
|
(65)
|
(0.13)
|
Restructuring and asset
related charges -
net
|
Gain on divestitures
9
|
68
|
60
|
0.12
|
Sundry income (expense)
- net
|
Intended Rogers
Acquisition financing fees 10
|
(5)
|
(4)
|
(0.01)
|
Interest
Expense
|
Income tax related
item
|
—
|
(1)
|
—
|
Provision for income
taxes on
continuing operations
|
Employee Retention
Credit 11
|
52
|
40
|
0.08
|
Cost of sales; Research
and
development expenses; Selling, general
and administrative expenses
|
Total significant
items
|
$ (14)
|
$
3
|
$ 0.01
|
|
Less: Amortization of
intangibles
|
(447)
|
(347)
|
(0.69)
|
Amortization of
intangibles
|
Less: Non-op pension /
OPEB benefit credits
|
20
|
16
|
0.03
|
Sundry income (expense)
- net
|
Less: Future
reimbursable indirect costs
|
(45)
|
(35)
|
(0.07)
|
Cost of sales; Research
and
development expenses; Selling, general
and administrative expenses
|
Adjusted results
(non-GAAP)
|
$
1,741
|
$
1,277
|
$ 2.52
|
|
|
|
1.
|
Income (loss) from
continuing operations before income taxes.
|
2.
|
Net income 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.
|
Acquisition,
integration and separation costs related to the Spectrum
Acquisition.
|
5.
|
Includes Board approved
restructuring plans and asset related charges.
|
6.
|
Reflects post-closing
adjustments related to previously divested businesses.
|
7.
|
Acquisition,
integration and separation costs related to primarily related to
costs associated with the divestiture of the Biomaterials business
unit and the Intended Rogers Acquisition.
|
8.
|
Reflects a pre-tax
impairment charge related to an equity method
investment.
|
9.
|
Reflects the gains on
sale of the Biomaterials business unit within Corporate &
Other, the sale of land use right within the Water & Protection
segment, and the gain related to interest on a milestone payment
associated with the TCS/HSC Disposal.
|
10.
|
Reflects structuring
fees and the amortization of the commitment fees related to the
financing agreements entered into for the Terminated Intended
Rogers Acquisition.
|
11.
|
Employee Retention
Credit pursuant to the Coronavirus Aid, Relief, and Economic
Security ("CARES") Act as enhanced by the Consolidated
Appropriations Act ("CAA") and American Rescue Plan Act
("ARPA").
|
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SOURCE DuPont