WILMINGTON, Del., July 25, 2017 /PRNewswire/ --
Second-Quarter Highlights
- GAAP1 earnings per share decreased 16 percent to
$0.97 from $1.16 in prior year. Operating
earnings2 per share increased 11 percent to $1.38 from $1.24 in
prior year.
- Sales of $7.4 billion
increased 5 percent on a 6-percent benefit from volume partially
offset by a 1-percent decline in local price. Volume grew in all
reportable segments, primarily led by Agriculture, Electronics
& Communications and Protection Solutions.
- Segment operating margins expanded by about 80 basis points,
led by improvements in Electronics & Communications, Industrial
Biosciences and Agriculture.
First-Half Highlights
- GAAP1 earnings per share decreased 2 percent to
$2.50 from $2.55 in prior year. Operating
earnings2 per share increased 21 percent to $3.02 from $2.50 in
prior year.
- Sales of $15.2 billion
increased 5 percent driven by volume growth. Sales grew in most
segments, led by Agriculture, Performance Materials and Electronics
& Communications.
- Agriculture sales increased 5 percent on a 5-percent benefit
from volume and a 1-percent benefit from local price, partially
offset by a 1-percent negative impact from portfolio. Volume growth
was driven by a benefit from the timing of seed deliveries,
including the route-to-market change in the southern U.S.,
increased insecticide and fungicide sales, higher soybean sales in
North America, and increased
sunflower and corn seed sales in Europe. This growth was partially offset by
the expected decline in corn volume related to reduced corn area in
North America.
- Total company gross margin expanded by 45 basis points.
Segment operating margins expanded by about 170 basis points, led
by improvements in Electronics & Communications, Performance
Materials and Agriculture.
- Free cash flow3 improved by about $200 million, excluding about $2.8 billion of increased pension
contributions.
DuPont (NYSE: DD), a science company that brings world-class,
innovative products, materials, and services to the global
marketplace, today announced second-quarter 2017 GAAP1
earnings from continuing operations of $0.97 per share and operating
earnings2 of $1.38 per
share. Prior year GAAP1 and operating
earnings2 were $1.16 per
share and $1.24 per share,
respectively. Refer to Schedule B for details of significant
items excluded from operating earnings per share.
For first-half 2017, DuPont delivered GAAP1 earnings
from continuing operations of $2.50
per share and operating earnings2 of $3.02 per share. Prior-year GAAP1 and
operating earnings2 per share were $2.55 and $2.50,
respectively.
Second-quarter sales totaled $7.4
billion, up 5 percent versus prior year on a 6-percent
benefit from volume partially offset by a 1-percent decline in
local price. Volume grew in all reportable segments, led by
Agriculture, Electronics & Communications and Protection
Solutions. First-half sales of $15.2
billion increased 5 percent versus prior year on a 5-percent
benefit from volume. Sales grew in most segments, led by
Agriculture, Performance Materials and Electronics &
Communications. Agriculture sales were positively impacted by
the change in timing of seed deliveries, including the southern
U.S. route-to-market change, which benefitted first-half sales by
approximately $200 million, or about
1 percent.
"Our increased operating earnings per share and strong sales
growth of 5 percent were driven by volume growth from our highly
productive innovation pipeline," said Ed
Breen, chairman and CEO of DuPont. "We continue to see
the results of the focus, efficiency and productivity our teams are
delivering as we move toward the expected August closing of the
merger with Dow. Our integration planning will enable us to begin
implementation quickly, including launching the projects to achieve
our $3 billion cost synergies target,
and move toward standing up the strong, independent companies we
intend to create."
Global Consolidated Net Sales – 2nd Quarter
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
|
|
June 30,
2017
|
|
Percent Change Due
to:
|
|
|
|
|
%
|
|
Local Price
and
|
|
|
|
|
|
Portfolio
/
|
|
|
$
|
|
Change
|
|
Product
Mix
|
|
Currency
|
|
Volume
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. & Canada
|
|
$
3,769
|
|
6
|
|
-
|
|
-
|
|
6
|
|
-
|
EMEA *
|
|
1,428
|
|
1
|
|
-
|
|
(2)
|
|
3
|
|
-
|
Asia
Pacific
|
|
1,705
|
|
10
|
|
(1)
|
|
-
|
|
11
|
|
-
|
Latin America
|
|
522
|
|
(3)
|
|
(4)
|
|
2
|
|
(1)
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Consolidated
Sales
|
$
7,424
|
|
5
|
|
(1)
|
|
-
|
|
6
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Europe,
Middle East & Africa
|
|
|
|
|
|
|
|
|
|
|
Global Consolidated Net Sales – First Half
|
|
Six Months
Ended
|
|
|
|
|
|
|
|
|
|
|
June 30,
2017
|
|
Percent Change Due
to:
|
|
|
|
|
%
|
|
Local Price
and
|
|
|
|
|
|
Portfolio
/
|
|
|
$
|
|
Change
|
|
Product
Mix
|
|
Currency
|
|
Volume
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. & Canada
|
|
$
7,345
|
|
3
|
|
-
|
|
-
|
|
3
|
|
-
|
EMEA *
|
|
3,538
|
|
3
|
|
1
|
|
(3)
|
|
6
|
|
(1)
|
Asia
Pacific
|
|
3,156
|
|
11
|
|
(1)
|
|
-
|
|
13
|
|
(1)
|
Latin America
|
|
1,128
|
|
6
|
|
1
|
|
7
|
|
(2)
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Consolidated
Sales
|
$
15,167
|
|
5
|
|
-
|
|
-
|
|
5
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Europe,
Middle East & Africa
|
|
|
|
|
|
|
|
|
|
|
Segment Net Sales – 2nd Quarter
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
|
|
June 30,
2017
|
|
Percent Change Due
to:
|
|
|
|
|
|
|
Local Price
and
|
|
|
|
|
|
Portfolio
/
|
|
|
$
|
|
% Change
|
|
Product
Mix
|
|
Currency
|
|
Volume
|
|
Other
|
(Dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
Agriculture
|
|
$
3,446
|
|
7
|
|
(1)
|
|
-
|
|
8
|
|
-
|
Electronics &
Communications
|
546
|
|
11
|
|
(1)
|
|
(1)
|
|
13
|
|
-
|
Industrial
Biosciences
|
|
395
|
|
11
|
|
3
|
|
(1)
|
|
9
|
|
-
|
Nutrition &
Health
|
|
818
|
|
(2)
|
|
(1)
|
|
(1)
|
|
1
|
|
(1)
|
Performance
Materials
|
|
1,381
|
|
3
|
|
2
|
|
(1)
|
|
2
|
|
-
|
Protection
Solutions
|
|
801
|
|
2
|
|
(2)
|
|
(1)
|
|
5
|
|
-
|
Other
|
|
37
|
|
|
|
|
|
|
|
|
|
|
Consolidated Net
Sales
|
|
$
7,424
|
|
5
|
|
(1)
|
|
-
|
|
6
|
|
-
|
Segment Net Sales – First Half
|
|
Six Months
Ended
|
|
|
|
|
|
|
|
|
|
|
June 30,
2017
|
|
Percent Change Due
to:
|
|
|
|
|
|
|
Local Price
and
|
|
|
|
|
|
Portfolio
/
|
|
|
$
|
|
% Change
|
|
Product
Mix
|
|
Currency
|
|
Volume
|
|
Other
|
(Dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
Agriculture
|
|
$
7,374
|
|
5
|
|
1
|
|
-
|
|
5
|
|
(1)
|
Electronics &
Communications
|
1,056
|
|
12
|
|
(1)
|
|
(1)
|
|
14
|
|
-
|
Industrial
Biosciences
|
|
763
|
|
8
|
|
2
|
|
(1)
|
|
7
|
|
-
|
Nutrition &
Health
|
|
1,607
|
|
(2)
|
|
-
|
|
(1)
|
|
-
|
|
(1)
|
Performance
Materials
|
|
2,749
|
|
6
|
|
1
|
|
(1)
|
|
6
|
|
-
|
Protection
Solutions
|
|
1,548
|
|
2
|
|
(2)
|
|
(1)
|
|
5
|
|
-
|
Other
|
|
70
|
|
|
|
|
|
|
|
|
|
|
Consolidated Net
Sales
|
|
$
15,167
|
|
5
|
|
-
|
|
-
|
|
5
|
|
-
|
Operating Earnings – 2nd Quarter
|
|
|
|
|
Change vs.
2016
|
(Dollars in
millions)
|
2Q17
|
|
2Q16
|
|
$
|
|
%
|
Agriculture
|
$
963
|
|
$
865
|
|
$
98
|
|
11%
|
Electronics &
Communications
|
116
|
|
93
|
|
23
|
|
25%
|
Industrial
Biosciences
|
76
|
|
62
|
|
14
|
|
23%
|
Nutrition &
Health
|
135
|
|
130
|
|
5
|
|
4%
|
Performance
Materials
|
329
|
|
325
|
|
4
|
|
1%
|
Protection
Solutions
|
191
|
|
188
|
|
3
|
|
2%
|
Other
|
(53)
|
|
(50)
|
|
(3)
|
|
-6%
|
Total segment
operating earnings (4)
|
1,757
|
|
1,613
|
|
144
|
|
9%
|
|
|
|
|
|
|
|
|
Exchange losses
(5)
|
(140)
|
|
(15)
|
|
(125)
|
|
nm
|
Corporate expenses
(4)
|
(51)
|
|
(83)
|
|
32
|
|
-39%
|
Interest
expense
|
(99)
|
|
(93)
|
|
(6)
|
|
6%
|
Operating earnings
before income taxes(2)
|
1,467
|
|
1,422
|
|
45
|
|
3%
|
Provision for income
taxes on operating earnings (2) (4)
|
(251)
|
|
(325)
|
|
74
|
|
|
Less: Net income
attributable to noncontrolling interests
|
7
|
|
4
|
|
3
|
|
|
Operating earnings
(2)
|
$
1,209
|
|
$
1,093
|
|
$
116
|
|
11%
|
|
|
|
|
|
|
|
|
Operating earnings
per share (2)
|
$
1.38
|
|
$
1.24
|
|
$
0.14
|
|
11%
|
GAAP
(1)earnings per share
|
$
0.97
|
|
$
1.16
|
|
$
(0.19)
|
|
-16%
|
Operating Earnings – First Half
|
|
|
|
|
Change vs.
2016
|
(Dollars in
millions)
|
YTD 2017
|
|
YTD 2016
|
|
$
|
|
%
|
Agriculture
|
$
2,199
|
|
$
1,966
|
|
$
233
|
|
12%
|
Electronics &
Communications
|
205
|
|
152
|
|
53
|
|
35%
|
Industrial
Biosciences
|
151
|
|
125
|
|
26
|
|
21%
|
Nutrition &
Health
|
256
|
|
234
|
|
22
|
|
9%
|
Performance
Materials
|
684
|
|
598
|
|
86
|
|
14%
|
Protection
Solutions
|
368
|
|
364
|
|
4
|
|
1%
|
Other
|
(115)
|
|
(109)
|
|
(6)
|
|
-6%
|
Total segment
operating earnings (4)
|
3,748
|
|
3,330
|
|
418
|
|
13%
|
|
|
|
|
|
|
|
|
Exchange losses
(5)
|
(199)
|
|
(136)
|
|
(63)
|
|
nm
|
Corporate expenses
(4)
|
(120)
|
|
(169)
|
|
49
|
|
-29%
|
Interest
expense
|
(183)
|
|
(185)
|
|
2
|
|
-1%
|
Operating earnings
before income taxes(2)
|
3,246
|
|
2,840
|
|
406
|
|
14%
|
Provision for income
taxes on operating earnings (2) (4)
|
(589)
|
|
(628)
|
|
39
|
|
|
Less: Net income
attributable to noncontrolling interests
|
15
|
|
10
|
|
5
|
|
|
Operating earnings
(2)
|
$
2,642
|
|
$
2,202
|
|
$
440
|
|
20%
|
|
|
|
|
|
|
|
|
Operating earnings
per share (2)
|
$
3.02
|
|
$
2.50
|
|
$
0.52
|
|
21%
|
GAAP
(1)earnings per share
|
$
2.50
|
|
$
2.55
|
|
$
(0.05)
|
|
-2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4) See Schedules B
and C for listing of significant items and their impact by
segment.
|
|
|
|
|
|
|
|
|
|
|
(5) 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 second quarter and
first half with the prior year, unless otherwise noted.
Agriculture – Second-quarter 2017 operating earnings of
$963 million increased $98 million, or 11 percent, on volume growth,
partially offset by declines in local price and higher product
costs. Volume growth was driven by increased insecticide and
fungicide sales, a benefit from the southern U.S. route-to-market
change and higher soybean sales in North
America, driven by the increase in planted area.
Reductions in local price reflected declines in crop protection and
increased product costs mainly driven by higher soybean
royalties. Operating margins expanded by about 105 basis
points.
First-half operating earnings of $2,199
million increased $233
million, or 12 percent, on growth in volume and local
price. Volume growth was driven by a benefit from the change
in timing of seed deliveries including the southern U.S.
route-to-market change, increased insecticide and fungicide sales,
higher soybean sales in North
America, and increased sunflower and corn seed sales in
Europe. Volume growth was partially offset by the expected
decline in corn volume related to reduced corn area in North America. Pricing growth was realized by
double-digit increases in Brazil
driven by the company's newest corn hybrids and lower product cost
within crop protection, partially offset by price declines in
Latin America and Asia and higher soybean royalties.
Operating margins expanded by about 175 basis points.
Electronics & Communications – Second-quarter 2017
operating earnings of $116 million
increased $23 million, or 25 percent,
as volume growth more than offset a decline in local price.
Volume growth was due to increased demand in consumer electronics
and semiconductor markets, as well as stronger photovoltaic
sales. Operating margins expanded by about 240 basis
points.
First-half operating earnings of $205
million increased $53 million,
or 35 percent, on volume growth and the absence of a $16 million prior-year litigation expense,
partially offset by lower local price. Operating earnings
included a gain on the sale of a business offset by costs
associated with a legal matter. Operating margins expanded by
335 basis points.
Industrial Biosciences - Second-quarter 2017 operating
earnings of $76 million increased
$14 million, or 23 percent, on volume
growth and mix enrichment, partially offset by higher costs due to
growth investments. Broad-based volume growth was driven by
increased demand for biomaterials in apparel and carpeting,
bioactives in the grain processing market, and CleanTech.
Operating margins expanded by about 180 basis points.
First-half operating earnings of $151
million increased $26 million,
or 21 percent, on volume growth and mix enrichment, partially
offset by higher costs due to growth investments. Volume
growth was driven by increased demand for biomaterials in apparel
and carpeting and bioactives in the grain processing market.
Operating margins expanded by about 210 basis points.
Nutrition & Health – Second-quarter 2017 operating
earnings of $135 million increased
$5 million, or 4 percent, on volume
growth. Increased demand in probiotics was partially offset
by declines in systems and texturants and protein solutions.
Operating margins expanded by about 95 basis points.
First-half operating earnings of $256
million increased $22 million,
or 9 percent, on plant productivity, mix enrichment and cost
savings, partially offset by a $6
million negative impact from portfolio. Volume growth
in probiotics was offset by declines in systems and texturants and
protein solutions. Operating margins expanded by about 165
basis points.
Performance Materials - Second-quarter 2017 operating
earnings of $329 million increased
$4 million, or 1 percent, as volume
growth, higher local price, and the absence of costs associated
with a contractual claim were largely offset by higher raw material
costs and the planned turnaround of the ethylene cracker.
Increased demand for polymers in automotive markets and increased
demand for high-performance parts in semiconductor and aerospace
markets drove the higher volumes. Operating margins
contracted by about 50 basis points.
First-half operating earnings of $684
million increased $86 million,
or 14 percent, driven by volume growth, cost savings and the
absence of costs associated with a contractual claim, partially
offset by higher raw material costs and the planned turnaround of
the ethylene cracker. Volume growth was driven by increased
demand for polymers in automotive markets and high-performance
parts in semiconductor and aerospace markets. Operating
margins expanded by about 175 basis points.
Protection Solutions – Second-quarter 2017 operating
earnings of $191 million increased
$3 million, or 2 percent, as volume
growth more than offset lower local price and product mix and
higher costs due to growth investments. Volume growth
reflected improved demand for Tyvek® protective material
in medical packaging and protective apparel and Nomex®
thermal-resistant fiber in oil and gas markets. Operating
margins contracted by about 5 basis points.
First-half operating earnings of $368
million increased $4 million,
or 1 percent, as volume growth was partially offset by lower local
price and product mix as well as higher raw material costs.
Volume growth was primarily driven by increased demand for
Nomex® in oil and gas markets, Kevlar®
high-strength materials, and Tyvek®. Operating
margins contracted by about 25 basis points.
DuPont will hold a conference call and webcast on Tuesday, July 25, 2017, at 8:00 AM ET 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 9189324#. 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 post-employment 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 by/used for 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:
On
December 11, 2015, DuPont and The Dow
Chemical Company ("Dow") announced entry into an Agreement and Plan
of Merger, as amended on March 31,
2017, and as may be amended from time to time in accordance
with its terms, (the "Merger Agreement") under which the companies
will combine in an all-stock merger (the "Merger Transaction"),
subject to satisfaction of closing conditions, including receipt of
regulatory approval. Dow and DuPont have obtained conditional
approval for the Merger Transaction from the antitrust regulatory
authorities in the United States,
Brazil, Canada and China, among others. The conditional approvals
were granted based on the companies fulfilling their commitments to
divest certain assets, among other conditions (the "Conditional
Commitments"). In connection with the Conditional Commitments,
DuPont entered into a definitive agreement (the "FMC Transaction
Agreement") with FMC Corporation (FMC). Under the FMC Transaction
Agreement subject to the closing of the Merger Transaction in
addition to customary closing conditions, including regulatory
approval, FMC will acquire certain Crop Protection business and
R&D assets from DuPont and DuPont has agreed to acquire certain
assets relating to FMC's Health and Nutrition segment
(collectively, the "FMC Transactions"). The combined company will
be DowDuPont Inc. DuPont and Dow intend, following consummation of
the Merger Transaction, that DowDuPont Inc. will pursue, subject to
the receipt of approval by the board of directors of DowDuPont, the
separation of the combined company's agriculture business,
specialty products business, and materials science business through
a series of tax-efficient transactions (collectively, the "Intended
Business Separations"). For more information, please see DuPont's
latest annual, quarterly and current reports on Forms 10-K, 10-Q
and 8-K, as well as the joint proxy/prospectus included in the
DowDuPont Registration Statement on Form S-4 filed in connection
with the Merger Transaction.
This document contains forward-looking statements which may be
identified by their use of words like "plans," "expects," "will,"
"believes," "intends," "estimates," "anticipates" or other words of
similar meaning. All statements that address expectations or
projections about the future, including statements about the
company's strategy for growth, product development, regulatory
approval, market position, anticipated benefits of recent
acquisitions, timing of anticipated benefits from restructuring
actions, outcome of contingencies, such as litigation and
environmental matters, expenditures, financial results and timing
of, as well as expected benefits, including synergies, from the
Merger Transaction and the Intended Business Separations, are
forward-looking statements. These and other forward-looking
statements, including the failure to consummate the Merger
Transaction, the Intended Business Separations, the FMC
Transactions or the Conditional Commitments, to make or take any
filing or other action required to consummate such transactions in
a timely manner or at all, are not guarantees of future results and
are subject to risks, uncertainties and assumptions that could
cause actual results to differ materially from those expressed in
any forward-looking statements. 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 Merger Transaction, the Intended Business
Separations, the FMC Transactions and the Conditional Commitments.
These risks, as well as other risks associated with the Merger
Transaction, the Intended Business Separations, the FMC
Transactions and the Conditional Commitments, are or will be more
fully discussed in (1) DuPont's most recently filed Form 10-K, 10-Q
and 8-K reports, (2) DuPont's subsequently filed Form 10-K and 10-Q
reports and (3) the joint proxy statement/prospectus included in
the Registration Statement filed with the SEC about the Merger
Transaction. 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,
monetary 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. The company assumes no obligation to publicly
provide revisions or updates to any forward-looking statements,
whether because of new information, future developments 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
June
30,
|
|
Six Months
Ended
June
30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net sales
|
$
|
7,424
|
|
$
|
7,061
|
|
$
|
15,167
|
|
$
|
14,466
|
Cost of goods
sold
|
4,192
|
|
3,990
|
|
8,563
|
|
8,232
|
Other operating
charges (1)
|
176
|
|
143
|
|
380
|
|
328
|
Selling, general and
administrative expenses (1)
|
1,348
|
|
1,211
|
|
2,608
|
|
2,339
|
Research and
development expense
|
441
|
|
432
|
|
857
|
|
850
|
Other (loss) income,
net (1)
|
(21)
|
|
51
|
|
285
|
|
423
|
Interest
expense
|
99
|
|
93
|
|
183
|
|
185
|
Employee separation /
asset related charges, net (1)
|
160
|
|
(90)
|
|
312
|
|
(13)
|
|
|
|
|
|
|
|
|
Income from
continuing operations before income taxes
|
987
|
|
1,333
|
|
2,549
|
|
2,968
|
Provision for income
taxes on continuing operations (1)
|
128
|
|
306
|
|
352
|
|
712
|
Income from
continuing operations after income taxes
|
859
|
|
1,027
|
|
2,197
|
|
2,256
|
Income (loss) from
discontinued operations after income taxes
|
10
|
|
(3)
|
|
(207)
|
|
—
|
|
|
|
|
|
|
|
|
Net income
|
869
|
|
1,024
|
|
1,990
|
|
2,256
|
|
|
|
|
|
|
|
|
Less: Net
income attributable to noncontrolling interests
|
7
|
|
4
|
|
15
|
|
10
|
|
|
|
|
|
|
|
|
Net income
attributable to DuPont
|
$
|
862
|
|
$
|
1,020
|
|
$
|
1,975
|
|
$
|
2,246
|
|
|
|
|
|
|
|
|
Basic earnings per
share of common stock:
|
|
|
|
|
|
|
|
Basic earnings per
share of common stock from continuing operations
|
$
|
0.98
|
|
$
|
1.17
|
|
$
|
2.51
|
|
$
|
2.56
|
Basic earnings (loss)
per share of common stock from discontinued operations
|
0.01
|
|
—
|
|
(0.24)
|
|
—
|
Basic earnings per
share of common stock (2)
|
$
|
0.99
|
|
$
|
1.16
|
|
$
|
2.27
|
|
$
|
2.56
|
|
|
|
|
|
|
|
|
Diluted earnings per
share of common stock:
|
|
|
|
|
|
|
|
Diluted earnings per
share of common stock from continuing operations
|
$
|
0.97
|
|
$
|
1.16
|
|
$
|
2.50
|
|
$
|
2.55
|
Diluted earnings
(loss) per share of common stock from discontinued
operations
|
0.01
|
|
—
|
|
(0.24)
|
|
—
|
Diluted earnings per
share of common stock (2)
|
$
|
0.99
|
|
$
|
1.16
|
|
$
|
2.26
|
|
$
|
2.55
|
|
|
|
|
|
|
|
|
Dividends per share
of common stock
|
$
|
0.38
|
|
$
|
0.38
|
|
$
|
0.76
|
|
$
|
0.76
|
|
|
|
|
|
|
|
|
Average number of
shares outstanding used in earnings per share (EPS)
calculation:
|
|
|
|
|
|
|
|
Basic
|
868,481,000
|
|
875,013,000
|
|
867,496,000
|
|
874,269,000
|
Diluted
|
872,750,000
|
|
879,179,000
|
|
871,920,000
|
|
878,214,000
|
Reconciliation of
Non-GAAP Measures
|
|
|
|
|
|
|
|
|
|
|
|
|
Summary of
Earnings Comparison
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
|
2017
|
|
|
2016
|
|
%
Change
|
|
2017
|
|
2016
|
|
%
Change
|
Income from
continuing operations after income taxes (GAAP)
|
$
|
859
|
|
|
$
|
1,027
|
|
(16)%
|
|
$
|
2,197
|
|
$
|
2,256
|
|
(3)%
|
Less: Significant
items (charge) benefit included in income from continuing
operations after
income taxes (per Schedule B)
|
(290)
|
|
|
19
|
|
|
|
(326)
|
|
179
|
|
|
Non-operating
pension/OPEB costs included in income from continuing operations
after income
taxes
|
(67)
|
|
|
(89)
|
|
|
|
(134)
|
|
(135)
|
|
|
Net income
attributable to noncontrolling interest from continuing
operations
|
7
|
|
|
4
|
|
|
|
15
|
|
10
|
|
|
Operating earnings
(Non-GAAP) (3)
|
$
|
1,209
|
|
|
$
|
1,093
|
|
11%
|
|
$
|
2,642
|
|
$
|
2,202
|
|
20%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
from continuing operations (GAAP)
|
$
|
0.97
|
|
|
$
|
1.16
|
|
(16)%
|
|
$
|
2.50
|
|
$
|
2.55
|
|
(2)%
|
Less: Significant
items (charge) benefit included in EPS (per Schedule B)
|
(0.33)
|
|
|
0.02
|
|
|
|
(0.37)
|
|
0.20
|
|
|
Non-operating
pension/OPEB costs included in EPS
|
(0.08)
|
|
|
(0.10)
|
|
|
|
(0.15)
|
|
(0.15)
|
|
|
Operating earnings
per share (Non-GAAP) (3)
|
$
|
1.38
|
|
|
$
|
1.24
|
|
11%
|
|
$
|
3.02
|
|
$
|
2.50
|
|
21%
|
E.I. du Pont de
Nemours and Company
|
Condensed
Consolidated Balance Sheets
|
(Dollars in
millions, except per share amounts)
|
|
SCHEDULE A
(continued)
|
|
|
|
|
|
|
|
June
30,
2017
|
|
December
31,
2016
|
Assets
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
3,254
|
|
$
|
4,605
|
Marketable
securities
|
|
2,974
|
|
1,362
|
Accounts and notes
receivable, net
|
|
8,562
|
|
4,971
|
Inventories
|
|
4,856
|
|
5,673
|
Prepaid
expenses
|
|
476
|
|
506
|
Total current
assets
|
|
20,122
|
|
17,117
|
Property, plant
and equipment, net of accumulated depreciation
(June
30, 2017 - $15,294 December 31, 2016 - $14,736)
|
|
8,959
|
|
9,231
|
Goodwill
|
|
4,232
|
|
4,180
|
Other intangible
assets
|
|
3,623
|
|
3,664
|
Investment in
affiliates
|
|
698
|
|
649
|
Deferred income
taxes
|
|
2,841
|
|
3,308
|
Other
assets
|
|
2,731
|
|
1,815
|
Total
|
|
$
|
43,206
|
|
$
|
39,964
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Accounts
payable
|
|
$
|
2,756
|
|
$
|
3,705
|
Short-term borrowings
and capital lease obligations
|
|
3,473
|
|
429
|
Income
taxes
|
|
153
|
|
101
|
Other accrued
liabilities
|
|
4,060
|
|
4,662
|
Total current
liabilities
|
|
10,442
|
|
8,897
|
Long-term
borrowings and capital lease obligations
|
|
10,086
|
|
8,107
|
Other
liabilities
|
|
9,718
|
|
12,333
|
Deferred income
taxes
|
|
366
|
|
431
|
Total
liabilities
|
|
30,612
|
|
29,768
|
|
|
|
|
|
Commitments and
contingent liabilities
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
Preferred
stock
|
|
237
|
|
237
|
Common stock, $0.30
par value; 1,800,000,000 shares authorized;
Issued
at June 30, 2017 - 954,703,000; December 31, 2016 -
950,044,000
|
|
286
|
|
285
|
Additional paid-in
capital
|
|
11,424
|
|
11,190
|
Reinvested
earnings
|
|
16,233
|
|
14,924
|
Accumulated other
comprehensive loss
|
|
(9,065)
|
|
(9,911)
|
Common stock held in
treasury, at cost (87,041,000 shares at June 30, 2017 and
December 31, 2016)
|
|
(6,727)
|
|
(6,727)
|
Total DuPont
stockholders' equity
|
|
12,388
|
|
9,998
|
Noncontrolling
interests
|
|
206
|
|
198
|
Total
equity
|
|
12,594
|
|
10,196
|
Total
|
|
$
|
43,206
|
|
$
|
39,964
|
E.I. du Pont de
Nemours and Company
|
Condensed
Consolidated Statement of Cash Flows
|
(Dollars in
millions)
|
|
SCHEDULE A
(continued)
|
|
|
|
|
|
Six Months
Ended
June
30,
|
|
2017
|
|
2016
|
Total
Company
|
|
|
|
|
|
|
|
Net income
|
$
|
1,990
|
|
$
|
2,256
|
Adjustments to
reconcile net income to cash used for operating
activities:
|
|
|
|
Depreciation
|
462
|
|
473
|
Amortization
of intangible assets
|
108
|
|
226
|
Net periodic
pension benefit cost
|
219
|
|
320
|
Contributions
to pension plans
|
(2,994)
|
|
(237)
|
Gain on sale
of businesses and other assets
|
(202)
|
|
(385)
|
Asset-related
charges
|
279
|
|
78
|
Other
operating activities - net
|
279
|
|
300
|
Change in
operating assets and liabilities - net
|
(4,196)
|
|
(4,491)
|
Cash used for
operating activities
|
(4,055)
|
|
(1,460)
|
Investing
activities
|
|
|
|
Purchases of
property, plant and equipment
|
(524)
|
|
(507)
|
Investments in
affiliates
|
(22)
|
|
(2)
|
Proceeds from sale of
businesses and other assets - net
|
296
|
|
212
|
Net (increase)
decrease in short-term financial instruments
|
(1,610)
|
|
174
|
Foreign currency
exchange contract settlements
|
(29)
|
|
(280)
|
Other investing
activities - net
|
(43)
|
|
(15)
|
Cash used for
investing activities
|
(1,932)
|
|
(418)
|
Financing
activities
|
|
|
|
Dividends paid to
stockholders
|
(664)
|
|
(669)
|
Net increase in
borrowings
|
5,041
|
|
1,632
|
Proceeds from
exercise of stock options
|
203
|
|
70
|
Other financing
activities - net
|
(49)
|
|
(39)
|
Cash provided by
financing activities
|
4,531
|
|
994
|
Effect of exchange
rate changes on cash
|
105
|
|
(5)
|
Decrease in cash
and cash equivalents
|
(1,351)
|
|
(889)
|
Cash and cash
equivalents at beginning of period
|
4,605
|
|
5,300
|
Cash and cash
equivalents at end of period
|
$
|
3,254
|
|
$
|
4,411
|
|
|
|
|
Reconciliation of
Non-GAAP Measure
|
|
|
|
Calculation of
Free Cash Flow - Total Company
|
|
|
|
|
Six Months Ended
June 30,
|
|
2017
|
|
2016
|
Cash used for
operating activities (GAAP)
|
$
|
(4,055)
|
|
$
|
(1,460)
|
Purchases of
property, plant and equipment
|
(524)
|
|
(507)
|
Free cash flow
(Non-GAAP)
|
$
|
(4,579)
|
|
$
|
(1,967)
|
|
|
(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)
|
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
(6)
|
|
($ Per
Share)
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
1st
Quarter
|
|
|
|
|
|
|
|
|
|
|
|
Transaction costs
(1)
|
$
|
(170)
|
|
$
|
(24)
|
|
$
|
(122)
|
|
$
|
(21)
|
|
$
|
(0.14)
|
|
$
|
(0.02)
|
Restructuring
charges, net (2)
|
(152)
|
|
(77)
|
|
(100)
|
|
(48)
|
|
(0.11)
|
|
(0.06)
|
Gain on sale of
business / entity (3)
|
162
|
|
369
|
|
86
|
|
214
|
|
0.10
|
|
0.24
|
Income tax items
(4)
|
47
|
|
—
|
|
100
|
|
—
|
|
0.11
|
|
—
|
Customer claims
adjustment / recovery (5)
|
—
|
|
23
|
|
—
|
|
15
|
|
—
|
|
0.02
|
1st Quarter -
Total
|
$
|
(113)
|
|
$
|
291
|
|
$
|
(36)
|
|
$
|
160
|
|
$
|
(0.04)
|
|
$
|
0.18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2nd
Quarter
|
|
|
|
|
|
|
|
|
|
|
|
Transaction costs
(1)
|
$
|
(216)
|
|
$
|
(76)
|
|
$
|
(159)
|
|
$
|
(59)
|
|
$
|
(0.18)
|
|
$
|
(0.07)
|
Restructuring
charges, net (2)
|
(160)
|
|
90
|
|
(102)
|
|
59
|
|
(0.12)
|
|
0.07
|
Income tax items
(4)
|
—
|
|
—
|
|
(29)
|
|
—
|
|
(0.03)
|
|
—
|
Customer claims
adjustment / recovery (5)
|
—
|
|
30
|
|
—
|
|
19
|
|
—
|
|
0.02
|
2nd Quarter -
Total
|
$
|
(376)
|
|
$
|
44
|
|
$
|
(290)
|
|
$
|
19
|
|
$
|
(0.33)
|
|
$
|
0.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-to-date
Total
|
$
|
(489)
|
|
$
|
335
|
|
$
|
(326)
|
|
$
|
179
|
|
$
|
(0.37)
|
|
$
|
0.20
|
E.I. du Pont de
Nemours and Company
|
Schedule of
Significant Items from Continuing Operations
|
(Dollars in
millions, except per share amounts)
|
|
(1)
|
Second quarter and
first quarter 2017 included charges of $(216) and $(170),
respectively, and second quarter and first quarter 2016
included charges of $(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. For second quarter and first quarter
2017, the effective tax rate for the total of pre-tax charges was
26.4% and 28.2%, respectively. For second quarter and first quarter
2016, the effective tax rate for the total of pre-tax charges was
22.4% and 12.5%, respectively. A significant portion of the
transaction costs are in the US; however, those costs are not
always tax-deductible.
|
|
|
(2)
|
Second quarter and
first quarter 2017 included restructuring charges of $(160) and
$(152), respectively, recorded in employee separation / asset
related charges, net, primarily associated with actions to improve
plant productivity. Year-to-date charges included $(33) of
severance and related benefit costs and $(279) of asset-related
charges. The asset-related charges mainly consists of
accelerated depreciation associated with decision to close the
company's Protection Solutions Cooper River manufacturing site
located near Charleston, South Carolina.
|
|
Second quarter 2016
included a $90 benefit recorded in employee separation / asset
related charges, net associated with the 2016 Global Cost Savings
and Restructuring Program. This 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.
|
|
First quarter 2016
included a $(75) restructuring charge recorded in employee
separation / asset related charges, net related to the decision not
to 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.
|
|
First quarter 2016
included a $(2) charge in employee separation / asset related
charges, net associated with the 2016 Global Cost Savings and
Restructuring Program. This charge was primarily due to the
identification of additional projects in certain segments, offset
by a reduction in severance and related benefit costs due to
workforce reductions achieved through non-severance
programs.
|
|
|
(3)
|
First quarter 2017
included a gain of $162 recorded in other (loss) income, net
associated with the sale of the company's global food safety
diagnostic business, a part of the Nutrition & Health
segment. The effective tax rate for the gain on sale was
46.9% due to unfavorable tax consequences of non-deductible
goodwill.
|
|
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.
|
|
|
(4)
|
Second quarter 2017
included a tax charge of $(29) related to the elimination of a tax
benefit recorded in 2016 due to the second quarter 2017 principal
U.S. pension plan contribution.
|
|
First quarter 2017
included a tax benefit of $53, as well as a $47 benefit on
associated accrued interest reversals (recorded in other (loss)
income, net), related to a reduction in the company's unrecognized
tax benefits due to the closure of various tax statutes of
limitations.
|
|
|
(5)
|
The company recorded
insurance recoveries of $30 in the second quarter 2016 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
reductions in the accrual for customer claims related to the use of
the Imprelis® herbicide.
|
|
|
(6)
|
Unless specifically
addressed in notes above, 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.
|
E.I. du Pont de
Nemours and Company
|
Consolidated Segment
Information
|
(Dollars in
millions)
|
|
SCHEDULE
C
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
SEGMENT NET
SALES
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Agriculture
|
|
$
|
3,446
|
|
$
|
3,218
|
|
$
|
7,374
|
|
$
|
7,004
|
Electronics &
Communications
|
|
546
|
|
494
|
|
1,056
|
|
946
|
Industrial
Biosciences
|
|
395
|
|
355
|
|
763
|
|
707
|
Nutrition &
Health
|
|
818
|
|
835
|
|
1,607
|
|
1,636
|
Performance
Materials
|
|
1,381
|
|
1,335
|
|
2,749
|
|
2,584
|
Protection
Solutions
|
|
801
|
|
786
|
|
1,548
|
|
1,515
|
Other
|
|
37
|
|
38
|
|
70
|
|
74
|
Consolidated net
sales
|
|
$
|
7,424
|
|
$
|
7,061
|
|
$
|
15,167
|
|
$
|
14,466
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
SEGMENT OPERATING
EARNINGS (1)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Agriculture
|
|
$
|
963
|
|
$
|
865
|
|
$
|
2,199
|
|
$
|
1,966
|
Electronics &
Communications
|
|
116
|
|
93
|
|
205
|
|
152
|
Industrial
Biosciences
|
|
76
|
|
62
|
|
151
|
|
125
|
Nutrition &
Health
|
|
135
|
|
130
|
|
256
|
|
234
|
Performance
Materials
|
|
329
|
|
325
|
|
684
|
|
598
|
Protection
Solutions
|
|
191
|
|
188
|
|
368
|
|
364
|
Other
|
|
(53)
|
|
(50)
|
|
(115)
|
|
(109)
|
Total segment
operating earnings
|
|
1,757
|
|
1,613
|
|
3,748
|
|
3,330
|
Corporate
expenses
|
|
(51)
|
|
(83)
|
|
(120)
|
|
(169)
|
Interest
expense
|
|
(99)
|
|
(93)
|
|
(183)
|
|
(185)
|
Operating earnings
before income taxes and exchange losses
|
|
1,607
|
|
1,437
|
|
3,445
|
|
2,976
|
Exchange
losses(2)
|
|
(140)
|
|
(15)
|
|
(199)
|
|
(136)
|
Operating earnings
before income taxes (Non-GAAP)
|
|
$
|
1,467
|
|
$
|
1,422
|
|
$
|
3,246
|
|
$
|
2,840
|
Non-operating
pension/OPEB costs
|
|
(104)
|
|
(133)
|
|
(208)
|
|
(207)
|
Total significant
items before income taxes
|
|
(376)
|
|
44
|
|
(489)
|
|
335
|
Income from
continuing operations before income taxes (GAAP)
|
|
$
|
987
|
|
$
|
1,333
|
|
$
|
2,549
|
|
$
|
2,968
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
SIGNIFICANT ITEMS BY
SEGMENT (PRE-TAX) (3)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Agriculture
|
|
$
|
—
|
|
$
|
35
|
|
$
|
—
|
|
$
|
(38)
|
Electronics &
Communications
|
|
(1)
|
|
8
|
|
(6)
|
|
15
|
Industrial
Biosciences
|
|
—
|
|
3
|
|
(6)
|
|
4
|
Nutrition &
Health
|
|
—
|
|
12
|
|
160
|
|
13
|
Performance
Materials
|
|
(2)
|
|
9
|
|
(13)
|
|
5
|
Protection
Solutions
|
|
(157)
|
|
7
|
|
(281)
|
|
10
|
Other
|
|
—
|
|
—
|
|
—
|
|
(3)
|
Total significant
items by segment
|
|
(160)
|
|
74
|
|
(146)
|
|
6
|
Corporate
expenses
|
|
(216)
|
|
(30)
|
|
(343)
|
|
329
|
Total significant
items before income taxes
|
|
$
|
(376)
|
|
$
|
44
|
|
$
|
(489)
|
|
$
|
335
|
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 (income) excluding
significant items.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Corporate expenses
(income) (GAAP)
|
$
|
267
|
|
$
|
113
|
|
$
|
463
|
|
$
|
(160)
|
Less:
Significant items charge (benefit) (3)
|
216
|
|
30
|
|
343
|
|
(329)
|
Corporate expenses
(Non-GAAP)
|
$
|
51
|
|
$
|
83
|
|
$
|
120
|
|
$
|
169
|
|
|
|
|
|
|
|
|
Net sales
|
7,424
|
|
7,061
|
|
15,167
|
|
14,466
|
Corporate expenses
(income) (GAAP) - Percentage of net sales
|
3.6%
|
|
1.6%
|
|
3.1%
|
|
(1.1)%
|
Corporate expenses
(Non-GAAP) - Percentage of net sales
|
0.7%
|
|
1.2%
|
|
0.8%
|
|
1.2%
|
|
|
(1)
|
Segment operating
earnings is defined as income from continuing operations before
income taxes excluding significant pre-tax benefits (charges),
non-operating pension/OPEB costs, exchange losses, corporate
expenses and interest.
|
(2)
|
See Schedule D for
additional information on exchange gains and losses.
|
(3)
|
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
June 30,
|
|
Six Months
Ended
June 30,
|
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Income from
continuing operations after income taxes (GAAP)
|
|
$
|
859
|
|
$
|
1,027
|
|
$
|
2,197
|
|
$
|
2,256
|
Add: Provision for
income taxes on continuing operations
|
|
128
|
|
306
|
|
352
|
|
712
|
Income from
continuing operations before income taxes
|
|
$
|
987
|
|
$
|
1,333
|
|
$
|
2,549
|
|
$
|
2,968
|
Add: Significant
items charge (benefit) before income taxes(1)
|
|
376
|
|
(44)
|
|
489
|
|
(335)
|
Add: Non-operating
pension/OPEB costs
|
|
104
|
|
133
|
|
208
|
|
207
|
Operating earnings
before income taxes (Non-GAAP)
|
|
$
|
1,467
|
|
$
|
1,422
|
|
$
|
3,246
|
|
$
|
2,840
|
Less: Net income
attributable to noncontrolling interests from continuing
operations
|
|
7
|
|
4
|
|
15
|
|
10
|
Add: Interest
expense
|
|
|
99
|
|
93
|
|
183
|
|
185
|
Adjusted EBIT from
operating earnings (Non-GAAP)
|
|
$
|
1,559
|
|
$
|
1,511
|
|
$
|
3,414
|
|
$
|
3,015
|
Add: Depreciation and
amortization
|
|
289
|
|
339
|
|
570
|
|
699
|
Adjusted EBITDA from
operating earnings (Non-GAAP)
|
|
$
|
1,848
|
|
$
|
1,850
|
|
$
|
3,984
|
|
$
|
3,714
|
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 expense. The
reconciliation below reflects operating costs excluding significant
items and non-operating pension/OPEB costs.
|
|
|
|
|
|
Three Months Ended
June 30, 2017
|
|
Three Months Ended
June 30, 2016
|
|
As
Reported
(GAAP)
|
|
Less:
Significant
Items (1)
|
|
Less: Non-
Operating
Pension/OPEB
Costs
|
|
(Non-GAAP)
|
|
As
Reported
(GAAP)
|
|
Less:
Significant
Items
(1)
|
|
Less: Non-
Operating
Pension/OPEB
Costs
|
|
(Non-GAAP)
|
Other operating
charges
|
$
|
176
|
|
$
|
—
|
|
$
|
—
|
|
$
|
176
|
|
$
|
143
|
|
$
|
(30)
|
|
$
|
—
|
|
$
|
173
|
Selling, general and
administrative
expenses
|
1,348
|
|
216
|
|
31
|
|
1,101
|
|
1,211
|
|
76
|
|
53
|
|
1,082
|
Research and
development expense
|
441
|
|
—
|
|
16
|
|
425
|
|
432
|
|
—
|
|
20
|
|
412
|
Total
|
$
|
1,965
|
|
$
|
216
|
|
$
|
47
|
|
$
|
1,702
|
|
$
|
1,786
|
|
$
|
46
|
|
$
|
73
|
|
$
|
1,667
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
|
7,424
|
|
|
|
|
|
$
|
7,424
|
|
$
|
7,061
|
|
|
|
|
|
$
|
7,061
|
Percentage of net
sales
|
26.5%
|
|
|
|
|
|
22.9%
|
|
25.3%
|
|
|
|
|
|
23.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30, 2017
|
|
Six Months Ended
June 30, 2016
|
|
As
Reported
(GAAP)
|
|
Less:
Significant
Items (1)
|
|
Less: Non-
Operating
Pension/OPEB
Costs
|
|
(Non-GAAP)
|
|
As
Reported
(GAAP)
|
|
Less:
Significant
Items (1)
|
|
Less: Non-
Operating
Pension/OPEB
Costs
|
|
(Non-GAAP)
|
Other operating
charges
|
$
|
380
|
|
$
|
—
|
|
$
|
—
|
|
$
|
380
|
|
$
|
328
|
|
$
|
(53)
|
|
$
|
—
|
|
$
|
381
|
Selling, general and
administrative
expenses
|
2,608
|
|
386
|
|
62
|
|
2,160
|
|
2,339
|
|
100
|
|
83
|
|
2,156
|
Research and
development expense
|
857
|
|
—
|
|
32
|
|
825
|
|
850
|
|
—
|
|
31
|
|
819
|
Total
|
$
|
3,845
|
|
$
|
386
|
|
$
|
94
|
|
$
|
3,365
|
|
$
|
3,517
|
|
$
|
47
|
|
$
|
114
|
|
$
|
3,356
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
|
15,167
|
|
|
|
|
|
$
|
15,167
|
|
$
|
14,466
|
|
|
|
|
|
$
|
14,466
|
Percentage of net
sales
|
25.4%
|
|
|
|
|
|
22.2%
|
|
24.3%
|
|
|
|
|
|
23.2%
|
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
|
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 provision for (benefit from) income taxes
on the Consolidated Income Statements.
|
|
|
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June 30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Subsidiary
Monetary Position Gain (Loss)
|
|
|
|
|
|
|
|
|
Pre-tax exchange
(losses) gains
|
|
$
|
(54)
|
|
$
|
146
|
|
$
|
(28)
|
|
$
|
179
|
Local tax benefits
(expenses)
|
|
94
|
|
(60)
|
|
130
|
|
(47)
|
Net after-tax impact
from subsidiary exchange gains
|
|
$
|
40
|
|
$
|
86
|
|
$
|
102
|
|
$
|
132
|
|
|
|
|
|
|
|
|
|
Hedging Program
Gain (Loss)
|
|
|
|
|
|
|
|
|
Pre-tax exchange
losses
|
|
$
|
(86)
|
|
$
|
(161)
|
|
$
|
(171)
|
|
$
|
(315)
|
Tax
benefits
|
|
31
|
|
58
|
|
61
|
|
113
|
Net after-tax impact
from hedging program exchange losses
|
|
$
|
(55)
|
|
$
|
(103)
|
|
$
|
(110)
|
|
$
|
(202)
|
|
|
|
|
|
|
|
|
|
Total Exchange
Gain (Loss)
|
|
|
|
|
|
|
|
|
Pre-tax exchange
losses
|
|
$
|
(140)
|
|
$
|
(15)
|
|
$
|
(199)
|
|
$
|
(136)
|
Tax benefits
(expenses)
|
|
125
|
|
(2)
|
|
191
|
|
66
|
Net after-tax
exchange losses
|
|
$
|
(15)
|
|
$
|
(17)
|
|
$
|
(8)
|
|
$
|
(70)
|
|
As shown above, the
"Total Exchange Gain (Loss)" is the sum of the "Subsidiary Monetary
Position Gain (Loss)" and the "Hedging Program Gain (Loss)."
|
E.I. du Pont de
Nemours and Company
|
Reconciliation of
Non-GAAP Measures
|
(Dollars in
millions, except per share amounts)
|
|
SCHEDULE D
(continued)
|
|
|
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
June 30,
|
|
Six Months
Ended
June 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Income from
continuing operations before income taxes (GAAP)
|
$
|
987
|
|
$
|
1,333
|
|
$
|
2,549
|
|
$
|
2,968
|
Add:
Significant items - charge (benefit) (1)
|
376
|
|
(44)
|
|
489
|
|
(335)
|
Non-operating pension/OPEB costs
|
104
|
|
133
|
|
208
|
|
207
|
Less: Exchange
losses
|
(140)
|
|
(15)
|
|
(199)
|
|
(136)
|
Income from
continuing operations before income taxes, significant
items,
exchange losses, and non-operating pension/OPEB costs
(Non-GAAP)
|
$
|
1,607
|
|
$
|
1,437
|
|
$
|
3,445
|
|
$
|
2,976
|
|
|
|
|
|
|
|
|
Provision for income
taxes on continuing operations (GAAP)
|
$
|
128
|
|
$
|
306
|
|
$
|
352
|
|
$
|
712
|
Add: Tax
benefits (expenses) on significant items
|
86
|
|
(25)
|
|
163
|
|
(156)
|
Tax benefits on non-operating pension/OPEB costs
|
37
|
|
44
|
|
74
|
|
72
|
Tax benefits (expenses) on exchange gains/losses
|
125
|
|
(2)
|
|
191
|
|
66
|
Provision for income
taxes on continuing earnings, excluding exchange losses
(Non-GAAP)
|
$
|
376
|
|
$
|
323
|
|
$
|
780
|
|
$
|
694
|
|
|
|
|
|
|
|
|
Effective income tax
rate (GAAP)
|
13.0%
|
|
23.0%
|
|
13.8%
|
|
24.0%
|
Significant items and
non-operating pension/OPEB costs effect
|
4.1%
|
|
(0.1)%
|
|
4.3%
|
|
(1.9)%
|
Tax rate, from
continuing operations before significant items and non-operating
pension/OPEB costs
|
17.1%
|
|
22.9%
|
|
18.1%
|
|
22.1%
|
Exchange gains
(losses) effect
|
6.3%
|
|
(0.4)%
|
|
4.5%
|
|
1.2%
|
Base income tax rate
from continuing operations (Non-GAAP)
|
23.4%
|
|
22.5%
|
|
22.6%
|
|
23.3%
|
|
(1) See Schedule B
for detail of significant items.
|
1
|
Generally Accepted
Accounting Principles (GAAP)
|
2
|
See schedules A, C,
and D for definitions and reconciliations of non-GAAP
measures.
|
3
|
Free cash flow is
defined as cash used for operating activities less purchases of
property, plant and equipment. See schedule A for reconciliation of
non-GAAP measure.
|
View original
content:http://www.prnewswire.com/news-releases/dupont-reports-second-quarter-and-first-half-results-300493310.html
SOURCE DuPont