WILMINGTON, Del., July 26, 2016 /PRNewswire/ --
Second-Quarter Highlights
- GAAP1 earnings per share totaled $1.16 versus $1.06
in prior year. Operating earnings2 per
share increased 14 percent to $1.24,
including $0.05 per share of negative
impact from currency.
- Sales of $7.1 billion
reflected 2-percent volume growth, due to Agriculture, Performance
Materials and Nutrition & Health. Local price, currency and
portfolio in aggregate negatively impacted sales by 3 percent,
resulting in total sales declining 1 percent.
- Agriculture sales reflected 3-percent volume growth, driven
by higher corn seed and insecticide sales, partially offset by
lower soybean volumes in North
America. Volume growth was offset by negative impacts from
currency and portfolio.
- Total company gross margins expanded more than 100 basis
points. Total segment operating margins increased about 250 basis
points, as operating margins expanded in all reportable
segments.
- Total segment pre-tax operating
earnings2 of $1,613
million increased 11 percent, despite approximately
$60 million of negative impact from
currency.
- GAAP operating costs3 declined by approximately
$160 million. Excluding significant
items and non-operating pension/OPEB costs, operating
costs2 declined by approximately $220 million, a 12-percent reduction versus prior
year.
- GAAP corporate expenses declined 26 percent versus prior
year. Excluding significant items, corporate expenses2
declined by $65 million or 44
percent.
- DuPont now expects full-year 2016 GAAP earnings to be in the
range of $2.70 - $2.75 per share and
has increased the low-end of its previous 2016 operating
earnings2 range by $0.10 per share to $3.15 – $3.20 per
share.
DuPont (NYSE: DD), a science company that brings world-class,
innovative products, materials, and services to the global
marketplace, today announced second-quarter 2016 GAAP earnings of
$1.16 per share and operating
earnings2 of $1.24
per share. Prior year GAAP and operating earnings2
were $1.06 and $1.09 per share, respectively. Refer to
Schedule B for details of significant items.
Second-quarter 2016 sales totaled $7.1
billion, down slightly versus prior year as volume growth of
2 percent was more than offset by pressure from local price,
currency and portfolio.
"Our continued focus on our plan delivered strong results. Solid
execution enabled volume growth of 2 percent, and we expanded
operating margins across all reportable segments. Cost
savings, mix enrichment from new technologies and lower product
costs contributed to the margin expansion. Continued progress on
our cost savings program keeps us on track to reach $1 billion on a run-rate basis by year-end," said
Ed Breen, chair and CEO of DuPont.
"We are pleased with the overwhelming vote of approval the merger
received from our shareholders. We are preparing to hit the ground
running immediately after closing, which we continue to expect
later this year as we work closely with regulators in all relevant
jurisdictions. We look forward to standing up three strong
businesses and enhancing our ability to offer innovative,
value-added solutions and increased choice to our customers."
Global Consolidated Net Sales – 2nd
Quarter
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
|
|
June 30,
2016
|
|
Percent Change Due
to:
|
|
|
|
|
%
|
|
Local Price
and
|
|
|
|
|
|
Portfolio
/
|
|
|
$
|
|
Change
|
|
Product
Mix**
|
|
Currency
|
|
Volume**
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. & Canada
|
|
$
3,550
|
|
(1)
|
|
(1)
|
|
-
|
|
1
|
|
(1)
|
EMEA *
|
|
1,418
|
|
(4)
|
|
-
|
|
-
|
|
(3)
|
|
(1)
|
Asia
Pacific
|
|
1,557
|
|
3
|
|
(2)
|
|
(2)
|
|
6
|
|
1
|
Latin America
|
|
536
|
|
(1)
|
|
(1)
|
|
(6)
|
|
7
|
|
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Consolidated
Sales
|
$
7,061
|
|
(1)
|
|
(1)
|
|
(1)
|
|
2
|
|
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Europe,
Middle East & Africa
|
|
|
|
|
|
|
|
|
|
|
** Organic sales
growth is defined as the sum of local price and product mix and
volume.
|
|
|
Segment Net Sales – 2nd Quarter
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
|
|
June 30,
2016
|
|
Percent Change Due
to:
|
|
|
|
|
%
|
|
Local Price
and
|
|
|
|
|
|
Portfolio
/
|
|
|
$
|
|
Change
|
|
Product
Mix
|
|
Currency
|
|
Volume
|
|
Other
|
(Dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
Agriculture
|
|
$
3,218
|
|
-
|
|
-
|
|
(2)
|
|
3
|
|
(1)
|
Electronics &
Communications
|
494
|
|
(6)
|
|
(2)
|
|
-
|
|
(4)
|
|
-
|
Industrial
Biosciences
|
|
355
|
|
(1)
|
|
-
|
|
(1)
|
|
-
|
|
-
|
Nutrition &
Health
|
|
835
|
|
1
|
|
(1)
|
|
(1)
|
|
3
|
|
-
|
Performance
Materials
|
|
1,335
|
|
-
|
|
(4)
|
|
-
|
|
4
|
|
-
|
Protection
Solutions
|
|
786
|
|
(2)
|
|
-
|
|
-
|
|
(2)
|
|
-
|
Other
|
|
38
|
|
|
|
|
|
|
|
|
|
|
Consolidated Net
Sales
|
|
7,061
|
|
(1)
|
|
(1)
|
|
(1)
|
|
2
|
|
(1)
|
Operating Earnings(1) – 2nd
Quarter
|
|
|
|
|
Change vs.
2015
|
(Dollars in
millions)
|
2Q16
|
|
2Q15
|
|
$
|
|
%
|
Agriculture
|
$
865
|
|
$
772
|
|
$
93
|
|
12%
|
Electronics &
Communications
|
93
|
|
89
|
|
4
|
|
4%
|
Industrial
Biosciences
|
62
|
|
50
|
|
12
|
|
24%
|
Nutrition &
Health
|
130
|
|
100
|
|
30
|
|
30%
|
Performance
Materials
|
325
|
|
301
|
|
24
|
|
8%
|
Protection
Solutions
|
188
|
|
181
|
|
7
|
|
4%
|
Other
|
(50)
|
|
(46)
|
|
(4)
|
|
-9%
|
Total segment
operating earnings (2)
|
1,613
|
|
1,447
|
|
166
|
|
11%
|
|
|
|
|
|
|
|
|
Exchange gains
(losses) (2),(3)
|
(15)
|
|
11
|
|
(26)
|
|
nm
|
Corporate expenses
(2)
|
(83)
|
|
(148)
|
|
65
|
|
-44%
|
Interest
expense(2)
|
(93)
|
|
(74)
|
|
(19)
|
|
26%
|
Operating earnings
before income taxes (1)
|
1,422
|
|
1,236
|
|
186
|
|
15%
|
Provision for income
taxes on operating earnings (1)
|
(325)
|
|
(237)
|
|
(88)
|
|
|
Less: Net income
attributable to noncontrolling interests
|
4
|
|
5
|
|
(1)
|
|
|
Operating earnings
(1)
|
$
1,093
|
|
$
994
|
|
$
99
|
|
10%
|
|
|
|
|
|
|
|
|
Operating earnings
per share (1)
|
$
1.24
|
|
$
1.09
|
|
$
0.15
|
|
14%
|
GAAP earnings per
share
|
$
1.16
|
|
$
1.06
|
|
$
0.10
|
|
9%
|
|
|
|
|
|
|
|
|
(1) See Schedules A,
C and D for reconciliations of non-GAAP measures.
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) See Schedules B
and C for listing of significant items.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) 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 with the
prior year, unless otherwise noted.
Agriculture – Operating earnings of $865 million increased $93
million, or 12 percent, on lower product costs, higher
volumes and cost savings, partially offset by a $36 million negative currency impact.
Increased corn seed and insecticide volumes were partially offset
by lower soybean volumes. Operating margins expanded by 290
basis points. Excluding the impact of currency, operating
earnings increased 17 percent.
Electronics & Communications – Operating earnings of
$93 million increased $4 million, or 4 percent, as cost savings and
lower product costs more than offset lower demand in consumer
electronics and a $1 million negative
impact from currency. Operating margins expanded by 200 basis
points. Excluding the impact of currency, operating earnings
increased 6 percent.
Industrial Biosciences – Operating earnings of
$62 million increased $12 million, or 24 percent, on cost savings
partially offset by a $3 million
negative impact from currency. Sales growth in bioactives due
to benefits from new product introductions in home and personal
care and increased demand in biomaterials were offset by lower
volume in CleanTech. Operating margins expanded by about 350
basis points. Excluding the impact of currency, operating earnings
increased 30 percent.
Nutrition & Health – Operating earnings of
$130 million increased $30 million, or 30 percent, on cost savings and
broad-based volume growth led by probiotics and specialty proteins.
Operating margins expanded by about 350 basis points. Excluding a
$3 million negative impact from
currency, operating earnings increased 33 percent.
Performance Materials – Operating earnings of
$325 million increased $24 million, or 8 percent. Cost savings,
increased demand in automotive markets (primarily in China and North
America) and increased volumes for ethylene due to a prior
year unplanned ethylene outage, were partially offset by a
$16 million negative impact from
currency, as well as costs associated with a contractual claim.
Operating margins expanded by over 180 basis points. Excluding the
impact of currency, operating earnings increased 13 percent.
Protection Solutions – Operating earnings of $188 million increased $7
million, or 4 percent, driven by lower product costs and
cost savings, partially offset by lower volumes and a $4 million negative currency impact. Operating
margins expanded by about 150 basis points. Volume declines in
Nomex® thermal-resistant fiber and Kevlar®
high-strength material were driven by weakness in the oil and gas
industry and delays in military spending. Excluding the impact of
currency, operating earnings increased 6 percent.
2016 Outlook
The company now expects full-year 2016 GAAP earnings to be in
the range of $2.70 to $2.75 per share
and operating earnings2 to be in the range of
$3.15 to $3.20 per share, an increase
of $0.10 per share to the low-end of
its previously communicated range. The estimated negative currency
impact for full-year 2016 is now expected to be about $0.15 per share. The company continues to
expect a benefit of $0.64 per share
from the 2016 global cost savings and restructuring plan and a
headwind from a higher base tax rate in 2016 of about $0.10 per share. The company's full-year
2016 GAAP earnings includes an expected charge of about
$0.45 per share for transaction costs
associated with the planned merger with Dow. For third-quarter
2016, the company expects operating earnings per share to be 50
percent higher than the prior year.
DuPont will hold a conference call and webcast on Tuesday, July 26, 2016, at 8:00 AM EDT to discuss this news release.
The webcast and additional presentation materials can be accessed
by visiting the company's investor website (Events &
Presentations) at www.investors.dupont.com. A replay of the
conference call webcast will be available for 90 days by calling
1-630-652-3042, Passcode 7979114#. For additional information
see the investor center at http://www.dupont.com.
Use of Non-GAAP Measures
This earnings release includes information that does not conform
to U.S. generally accepted accounting principles (GAAP) and are
considered non-GAAP measures. These measures include the
company's consolidated results and earnings per share on an
operating earnings basis, which excludes significant items and
non-operating pension and other postretirement employee benefit
costs (operating earnings and operating EPS), total segment pre-tax
operating earnings, operating costs and corporate expenses on an
operating earnings basis. Management uses these measures
internally for planning, forecasting and evaluating the performance
of the Company's segments, including allocating resources and
evaluating incentive compensation. 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. Additional non-GAAP measures presented in the
earnings release include operating EPS and segment operating
earnings excluding currency. Management believes that
operating EPS and segment operating earnings excluding currency are
useful in providing additional perspective regarding business
results and trends. These non-GAAP measurements supplement
our GAAP disclosures and should not be viewed as an alternative to
GAAP measures of performance. Reconciliations of non-GAAP
measures to GAAP are provided in schedules A, C and D.
Details of significant items are provided in schedule B.
About DuPont
DuPont (NYSE: DD) has been bringing world-class science and
engineering to the global marketplace in the form of innovative
products, materials, and services since 1802. The company
believes that by collaborating with customers, governments, NGOs,
and thought leaders we can help find solutions to such global
challenges as providing enough healthy food for people everywhere,
decreasing dependence on fossil fuels, and protecting life and the
environment. For additional information about DuPont and its
commitment to inclusive innovation, please visit
http://www.dupont.com.
Forward-Looking Statements: This communication contains
"forward-looking statements" within the meaning of the federal
securities laws, including Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of
1934, as amended. In this context, forward-looking statements often
address expected future business and financial performance and
financial condition, and often contain words such as "expect,"
"anticipate," "intend," "plan," "believe," "seek," "see," "will,"
"would," "target," similar expressions, and variations or negatives
of these words.
Forward-looking statements by their nature address matters that
are, to different degrees, uncertain, such as statements about the
consummation of the proposed transaction and the anticipated
benefits thereof. Forward-looking statements are not guarantees of
future performance and are based on certain assumptions and
expectations of future events which may not be realized.
Forward-looking statements also involve risks and uncertainties,
many of which are beyond the company's control. Some of the
important factors that could cause the company's actual results to
differ materially from those projected in any such forward-looking
statements are: fluctuations in energy and raw material prices;
failure to develop and market new products and optimally manage
product life cycles; ability to respond to market acceptance,
rules, regulations and policies affecting products based on
biotechnology and, in general, for products for the agriculture
industry; outcome of significant litigation and environmental
matters, including realization of associated indemnification
assets, if any; failure to appropriately manage process safety and
product stewardship issues; changes in laws and regulations or
political conditions; global economic and capital markets
conditions, such as inflation, interest and currency exchange
rates; business or supply disruptions; security threats, such as
acts of sabotage, terrorism or war, natural disasters and weather
events and patterns which could affect demand as well as
availability of products for the agriculture industry; ability to
protect and enforce the company's intellectual property rights;
successful integration of acquired businesses and separation of
underperforming or non-strategic assets or businesses; and risks
related to the agreement entered on December
11, 2015, with The Dow Chemical Company pursuant to which
the companies have agreed to effect an all-stock merger of equals,
including the completion of the proposed transaction on anticipated
terms and timing, the ability to fully and timely realize the
expected benefits of the proposed transaction and risks related to
the intended business separations contemplated to occur after the
completion of the proposed transaction. Important risk factors
relating to the proposed transaction and intended business
separations include, but are not limited to, (i) the
completion of the proposed transaction on anticipated terms and
timing, including obtaining regulatory approvals, anticipated
tax treatment, unforeseen liabilities, future capital expenditures,
revenues, expenses, earnings, synergies, economic performance,
indebtedness, financial condition, losses, future prospects,
business and management strategies for the management, expansion
and growth of the new combined company's operations and other
conditions to the completion of the merger, (ii) the ability of Dow
and DuPont to integrate the business successfully and to achieve
anticipated synergies, risks and costs and pursuit and/or
implementation of the potential separations, including anticipated
timing, any changes to the configuration of businesses included in
the potential separation if implemented, (iii) the intended
separation of the agriculture, material science and specialty
products businesses of the combined company post-mergers in one or
more tax efficient transactions on anticipated terms and timing,
including a number of conditions which could delay, prevent or
otherwise adversely affect the proposed transactions, including
possible issues or delays in obtaining required regulatory
approvals or clearances, disruptions in the financial markets or
other potential barriers, (iv) potential litigation relating to the
proposed transaction that could be instituted against Dow, DuPont
or their respective directors, (v) the risk that disruptions from
the proposed transaction will harm Dow's or DuPont's business,
including current plans and operations, (vi) the ability of Dow or
DuPont to retain and hire key personnel, (vii) potential adverse
reactions or changes to business relationships resulting from the
announcement or completion of the merger, (viii) uncertainty as to
the long-term value of DowDuPont common stock, (ix) continued
availability of capital and financing and rating agency actions,
(x) legislative, regulatory and economic developments, (xi)
potential business uncertainty, including changes to existing
business relationships, during the pendency of the merger that
could affect Dow's and/or DuPont's financial performance, (xii)
certain restrictions during the pendency of the merger that may
impact Dow's or DuPont's ability to pursue certain business
opportunities or strategic transactions and (xiii) unpredictability
and severity of catastrophic events, including, but not limited to,
acts of terrorism or outbreak of war or hostilities, as well as
management's response to any of the aforementioned factors. These
risks, as well as other risks associated with the proposed merger,
are more fully discussed in the joint proxy statement/prospectus
included in the registration statement on Form S-4 declared
effective by the SEC on June 9, 2016
(File No. 333-209869), as last amended, (the "Registration
Statement") in connection with the proposed merger. While the list
of factors presented here is, and the list of factors presented in
the Registration Statement are, considered representative, no such
list should be considered to be a complete statement of all
potential risks and uncertainties. Unlisted factors may present
significant additional obstacles to the realization of
forward-looking statements. Consequences of material differences in
results as compared with those anticipated in the forward-looking
statements could include, among other things, business disruption,
operational problems, financial loss, legal liability to third
parties and similar risks, any of which could have a material
adverse effect on Dow's or DuPont's consolidated financial
condition, results of operations, credit rating or liquidity.
Neither Dow nor DuPont assumes any obligation to publicly provide
revisions or updates to any forward-looking statements regarding
the proposed transaction and intended business separations, whether
as a result of new information, future developments or otherwise,
should circumstances change, except as otherwise required by
securities and other applicable laws. The company undertakes no
duty to publicly revise or update any forward-looking statements as
a result of future developments, or new information or otherwise,
should circumstances change, except as otherwise required by
securities and other applicable laws.
E.I. du Pont de
Nemours and Company
Consolidated Income
Statements
(Dollars in
millions, except per share amounts)
|
|
|
SCHEDULE
A
|
|
|
|
|
|
|
|
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Net sales
|
$
|
7,061
|
|
|
$
|
7,121
|
|
|
$
|
14,466
|
|
|
$
|
14,958
|
|
Cost of goods
sold
|
3,990
|
|
|
4,103
|
|
|
8,232
|
|
|
8,619
|
|
Other operating
charges (1)
|
143
|
|
|
174
|
|
|
328
|
|
|
322
|
|
Selling, general and
administrative expenses (1)
|
1,211
|
|
|
1,274
|
|
|
2,339
|
|
|
2,494
|
|
Research and
development expense
|
432
|
|
|
495
|
|
|
850
|
|
|
974
|
|
Other income, net
(1)
|
(51)
|
|
|
(255)
|
|
|
(423)
|
|
|
(454)
|
|
Interest expense
(1)
|
93
|
|
|
94
|
|
|
185
|
|
|
178
|
|
Employee separation /
asset related charges, net (1)
|
(90)
|
|
|
2
|
|
|
(13)
|
|
|
40
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations before income taxes
|
1,333
|
|
|
1,234
|
|
|
2,968
|
|
|
2,785
|
|
Provision for income
taxes on continuing operations (1)
|
306
|
|
|
260
|
|
|
712
|
|
|
790
|
|
Income from
continuing operations after income taxes
|
1,027
|
|
|
974
|
|
|
2,256
|
|
|
1,995
|
|
Loss from
discontinued operations after income taxes
|
(3)
|
|
|
(29)
|
|
|
—
|
|
|
(15)
|
|
|
|
|
|
|
|
|
|
Net income
|
1,024
|
|
|
945
|
|
|
2,256
|
|
|
1,980
|
|
|
|
|
|
|
|
|
|
Less: Net
income attributable to noncontrolling interests
|
4
|
|
|
5
|
|
|
10
|
|
|
9
|
|
|
|
|
|
|
|
|
|
Net income
attributable to DuPont
|
$
|
1,020
|
|
|
$
|
940
|
|
|
$
|
2,246
|
|
|
$
|
1,971
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss)
per share of common stock:
|
|
|
|
|
|
|
|
Basic earnings per
share of common stock from continuing operations
|
$
|
1.17
|
|
|
$
|
1.07
|
|
|
$
|
2.56
|
|
|
$
|
2.19
|
|
Basic loss per share
of common stock from discontinued operations
|
—
|
|
|
(0.03)
|
|
|
—
|
|
|
(0.02)
|
|
Basic earnings per
share of common stock (2)
|
$
|
1.16
|
|
|
$
|
1.04
|
|
|
$
|
2.56
|
|
|
$
|
2.17
|
|
|
|
|
|
|
|
|
|
Diluted earnings
(loss) per share of common stock:
|
|
|
|
|
|
|
|
Diluted earnings per
share of common stock from continuing operations
|
$
|
1.16
|
|
|
$
|
1.06
|
|
|
$
|
2.55
|
|
|
$
|
2.17
|
|
Diluted loss per share
of common stock from discontinued operations
|
—
|
|
|
(0.03)
|
|
|
—
|
|
|
(0.02)
|
|
Diluted earnings per
share of common stock (2)
|
$
|
1.16
|
|
|
$
|
1.03
|
|
|
$
|
2.55
|
|
|
$
|
2.15
|
|
|
|
|
|
|
|
|
|
Dividends per share
of common stock
|
$
|
0.38
|
|
|
$
|
0.49
|
|
|
$
|
0.76
|
|
|
$
|
0.96
|
|
|
|
|
|
|
|
|
|
Average number of
shares outstanding used in earnings (loss) per share
(EPS) calculation:
|
|
|
|
|
|
|
|
Basic
|
875,013,000
|
|
|
905,761,000
|
|
|
874,269,000
|
|
|
906,296,000
|
|
Diluted
|
879,179,000
|
|
|
911,681,000
|
|
|
878,214,000
|
|
|
912,748,000
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Non-GAAP Measures
|
|
|
|
|
Summary of
Earnings Comparison
|
|
|
|
|
|
|
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
|
2016
|
|
2015
|
|
%
Change
|
|
2016
|
|
2015
|
|
%
Change
|
Income from
continuing operations after income taxes (GAAP)
|
$
|
1,027
|
|
|
$
|
974
|
|
|
5%
|
|
$
|
2,256
|
|
|
$
|
1,995
|
|
|
13%
|
Less: Significant
items benefit (charge) included in income from continuing
operations after income taxes (per Schedule B)
|
19
|
|
|
32
|
|
|
|
|
179
|
|
|
(25)
|
|
|
|
Non-operating
pension/OPEB costs included in income from continuing
operations after income taxes (3)
|
(89)
|
|
|
(57)
|
|
|
|
|
(135)
|
|
|
(136)
|
|
|
|
Net income
attributable to noncontrolling interest from continuing
operations
|
4
|
|
|
5
|
|
|
|
|
10
|
|
|
9
|
|
|
|
Operating earnings
(Non-GAAP) (4)
|
$
|
1,093
|
|
|
$
|
994
|
|
|
10%
|
|
$
|
2,202
|
|
|
$
|
2,147
|
|
|
3%
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
from continuing operations (GAAP)
|
$
|
1.16
|
|
|
$
|
1.06
|
|
|
9%
|
|
$
|
2.55
|
|
|
$
|
2.17
|
|
|
18%
|
Less: Significant
items benefit (charge) included in EPS (per Schedule B)
|
0.02
|
|
|
0.04
|
|
|
|
|
0.20
|
|
|
(0.02)
|
|
|
|
Non-operating
pension/OPEB costs included in EPS (3)
|
(0.10)
|
|
|
(0.07)
|
|
|
|
|
(0.15)
|
|
|
(0.16)
|
|
|
|
Operating earnings
per share (Non-GAAP) (4)
|
$
|
1.24
|
|
|
$
|
1.09
|
|
|
14%
|
|
$
|
2.50
|
|
|
$
|
2.35
|
|
|
6%
|
|
|
|
|
|
|
|
|
|
|
|
|
E.I. du Pont de
Nemours and Company
Condensed
Consolidated Balance Sheets
(Dollars in
millions, except per share amounts)
|
|
|
SCHEDULE A
(continued)
|
|
|
|
|
June
30,
2016
|
|
December
31,
2015
|
Assets
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
4,411
|
|
|
$
|
5,300
|
|
Marketable
securities
|
|
742
|
|
|
906
|
|
Accounts and notes
receivable, net
|
|
7,656
|
|
|
4,643
|
|
Inventories
|
|
4,756
|
|
|
6,140
|
|
Prepaid
expenses
|
|
526
|
|
|
398
|
|
Total current
assets
|
|
18,091
|
|
|
17,387
|
|
Property, plant
and equipment, net of accumulated depreciation
(June
30, 2016- $14,699; December 31, 2015 - $14,346)
|
|
9,624
|
|
|
9,784
|
|
Goodwill
|
|
4,245
|
|
|
4,248
|
|
Other intangible
assets
|
|
3,967
|
|
|
4,144
|
|
Investment in
affiliates
|
|
695
|
|
|
688
|
|
Deferred income
taxes
|
|
4,474
|
|
|
3,799
|
|
Other
assets
|
|
1,170
|
|
|
1,116
|
|
Total
|
|
$
|
42,266
|
|
|
$
|
41,166
|
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Accounts
payable
|
|
$
|
2,244
|
|
|
$
|
3,398
|
|
Short-term borrowings
and capital lease obligations
|
|
2,295
|
|
|
1,165
|
|
Income
taxes
|
|
164
|
|
|
173
|
|
Other accrued
liabilities
|
|
3,675
|
|
|
5,580
|
|
Total current
liabilities
|
|
8,378
|
|
|
10,316
|
|
Long-term
borrowings and capital lease obligations
|
|
8,119
|
|
|
7,642
|
|
Other
liabilities
|
|
14,818
|
|
|
12,591
|
|
Deferred income
taxes
|
|
410
|
|
|
417
|
|
Total
liabilities
|
|
31,725
|
|
|
30,966
|
|
|
|
|
|
|
Commitments and
contingent liabilities
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
Preferred
stock
|
|
237
|
|
|
237
|
|
Common stock, $0.30
par value; 1,800,000,000 shares authorized;
Issued
at June 30, 2016 - 961,258,000; December 31, 2015 -
958,388,000
|
|
288
|
|
|
288
|
|
Additional paid-in
capital
|
|
11,212
|
|
|
11,081
|
|
Reinvested
earnings
|
|
16,084
|
|
|
14,510
|
|
Accumulated other
comprehensive loss
|
|
(10,757)
|
|
|
(9,396)
|
|
Common stock held in
treasury, at cost (87,041,000 shares at June 30, 2016 and December
31, 2015)
|
|
(6,727)
|
|
|
(6,727)
|
|
Total DuPont
stockholders' equity
|
|
10,337
|
|
|
9,993
|
|
Noncontrolling
interests
|
|
204
|
|
|
207
|
|
Total
equity
|
|
10,541
|
|
|
10,200
|
|
Total
|
|
$
|
42,266
|
|
|
$
|
41,166
|
|
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,
|
|
2016
|
|
2015
|
Total
Company
|
|
|
|
|
|
|
|
Net income
|
$
|
2,256
|
|
|
$
|
1,980
|
|
Adjustments to
reconcile net income to cash used for operating
activities:
|
|
|
|
Depreciation
|
473
|
|
|
615
|
|
Amortization of
intangible assets
|
226
|
|
|
257
|
|
Net periodic pension
benefit cost
|
320
|
|
|
294
|
|
Contributions to
pension plans
|
(237)
|
|
|
(204)
|
|
Gain on sale of
businesses and other assets
|
(385)
|
|
|
(22)
|
|
Other operating
activities - net
|
378
|
|
|
59
|
|
Change in operating
assets and liabilities - net
|
(4,534)
|
|
|
(5,024)
|
|
Cash used for
operating activities
|
(1,503)
|
|
|
(2,045)
|
|
Investing
activities
|
|
|
|
Purchases of
property, plant and equipment
|
(507)
|
|
|
(938)
|
|
Investments in
affiliates
|
(2)
|
|
|
(50)
|
|
Proceeds (payments)
from sale of businesses and other assets - net
|
212
|
|
|
(29)
|
|
Net decrease
(increase) in short-term financial instruments
|
174
|
|
|
(422)
|
|
Foreign currency
exchange contract settlements
|
(280)
|
|
|
443
|
|
Other investing
activities - net
|
(15)
|
|
|
13
|
|
Cash used for
investing activities
|
(418)
|
|
|
(983)
|
|
Financing
activities
|
|
|
|
Dividends paid to
stockholders
|
(669)
|
|
|
(875)
|
|
Net increase in
borrowings
|
1,632
|
|
|
2,110
|
|
Repurchase of common
stock
|
—
|
|
|
(353)
|
|
Proceeds from
exercise of stock options
|
88
|
|
|
201
|
|
Other financing
activities - net
|
(14)
|
|
|
(81)
|
|
Cash provided by
financing activities
|
1,037
|
|
|
1,002
|
|
Effect of exchange
rate changes on cash
|
(5)
|
|
|
(138)
|
|
Decrease in cash
and cash equivalents
|
(889)
|
|
|
(2,164)
|
|
Cash and cash
equivalents at beginning of period
|
5,300
|
|
|
6,910
|
|
Cash and cash
equivalents at end of period
|
$
|
4,411
|
|
|
$
|
4,746
|
|
|
|
|
|
Reconciliation of
Non-GAAP Measure
|
|
|
|
Calculation of
Free Cash Flow - Total Company
|
|
|
|
|
Six Months
Ended
June
30,
|
|
2016
|
|
2015
|
Cash used for
operating activities (GAAP)
|
$
|
(1,503)
|
|
|
$
|
(2,045)
|
|
Purchases of
property, plant and equipment
|
(507)
|
|
|
(938)
|
|
Free cash flow
(Non-GAAP)
|
$
|
(2,010)
|
|
|
$
|
(2,983)
|
|
|
|
|
|
(1) See
Schedule B for detail of significant items.
|
(2) The
sum of the individual earnings per share amounts from continuing
operations and discontinued operations may not equal the total
company earnings per share amounts due to rounding.
|
(3) Year
to date June 30, 2015 non-operating pension/OPEB costs includes an
after-tax exchange loss on foreign pension balances of
$23.
|
(4)
Operating earnings and operating earnings per share are defined as
earnings from continuing operations excluding significant items and
non-operating pension/OPEB costs. Non-operating pension/OPEB costs
includes all of the components of net periodic benefit cost from
continuing operations with the exception of the service cost
component.
|
E.I. du Pont de
Nemours and Company
Schedule of
Significant Items from Continuing Operations
(Dollars in
millions, except per share amounts)
|
|
|
SCHEDULE
B
|
|
|
|
|
|
|
|
|
|
|
SIGNIFICANT
ITEMS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax
|
|
After-tax
|
|
($ Per
Share)
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
1st
Quarter
|
|
|
|
|
|
|
|
|
|
|
|
Transaction costs
(1)
|
$
|
(24)
|
|
|
$
|
(12)
|
|
|
$
|
(21)
|
|
|
$
|
(11)
|
|
|
$
|
(0.02)
|
|
|
$
|
(0.01)
|
|
Customer claims
adjustment/recovery (2)
|
23
|
|
|
35
|
|
|
15
|
|
|
22
|
|
|
0.02
|
|
|
0.02
|
|
Gain on sale of
entity (3)
|
369
|
|
|
—
|
|
|
214
|
|
|
—
|
|
|
0.24
|
|
|
—
|
|
Restructuring
charges, net (4)
|
(77)
|
|
|
—
|
|
|
(48)
|
|
|
—
|
|
|
(0.06)
|
|
|
—
|
|
Asset impairment
charge (5)
|
—
|
|
|
(37)
|
|
|
—
|
|
|
(30)
|
|
|
—
|
|
|
(0.03)
|
|
Ukraine devaluation
(6)
|
—
|
|
|
(40)
|
|
|
—
|
|
|
(38)
|
|
|
—
|
|
|
(0.04)
|
|
1st Quarter -
Total
|
$
|
291
|
|
|
$
|
(54)
|
|
|
$
|
160
|
|
|
$
|
(57)
|
|
|
$
|
0.18
|
|
|
$
|
(0.06)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2nd
Quarter
|
|
|
|
|
|
|
|
|
|
|
|
Transaction costs
(1)
|
$
|
(76)
|
|
|
$
|
(25)
|
|
|
$
|
(59)
|
|
|
$
|
(38)
|
|
|
$
|
(0.07)
|
|
|
$
|
(0.04)
|
|
Customer claims
recovery (2)
|
30
|
|
|
—
|
|
|
19
|
|
|
—
|
|
|
0.02
|
|
|
—
|
|
Restructuring
adjustments / charges (4)
|
90
|
|
|
(2)
|
|
|
59
|
|
|
(2)
|
|
|
0.07
|
|
|
—
|
|
Litigation settlement
(7)
|
—
|
|
|
112
|
|
|
—
|
|
|
72
|
|
|
—
|
|
|
0.08
|
|
2nd Quarter -
Total
|
$
|
44
|
|
|
$
|
85
|
|
|
$
|
19
|
|
|
$
|
32
|
|
|
$
|
0.02
|
|
|
$
|
0.04
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-to-date Total
(8)
|
$
|
335
|
|
|
$
|
31
|
|
|
$
|
179
|
|
|
$
|
(25)
|
|
|
$
|
0.20
|
|
|
$
|
(0.02)
|
|
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 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.
|
|
|
|
Second quarter 2015
included charges of $(25) associated with transaction costs related
to the separation of the Performance Chemicals segment consisting
of $(5) recorded in other operating charges and $(20) recorded in
interest expense. Second quarter 2015 also includes a tax
charge of $(17) due to a state tax rate change associated with the
separation. First quarter 2015 included charges of $(12) recorded
in other operating charges associated with transaction costs
related to the separation of the Performance Chemicals
segment.
|
|
|
(2)
|
The company recorded
insurance recoveries of $30 and $35 in the second quarter 2016 and
first quarter 2015, respectively, in other operating charges for
recovery of costs for customer claims related to the use of the
Agriculture's segment Imprelis® herbicide.
First quarter 2016
included a benefit of $23 in other operating charges for reduction
in accrual for customer claims related to the use of the
Imprelis® herbicide.
|
|
|
(3)
|
First quarter 2016
included a gain of $369 recorded in other 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 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. The
benefit impacted segment earnings as follows: Agriculture - $5,
Electronics & Communications - $8, Industrial Biosciences - $3,
Nutrition & Health - $12, Performance Materials - $9,
Protection Solutions - $7, and Corporate expenses - $46.
|
|
|
|
First quarter 2016
included a $(2) restructuring charge recorded 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 reduction in severance and related
benefit costs. The net charge impacted segment earnings as
follows: Agriculture - $(21), Electronics & Communications -
$7, Industrial Biosciences - $1, Nutrition & Health - $1,
Performance Materials - $(4), Protection Solutions - $3, Other -
$(3), and Corporate expenses - $14.
|
|
|
|
First quarter 2016
included a $(75) restructuring charge recorded in employee
separation/asset related charges, net related to the decision to
not re-start the Agriculture segment's insecticide manufacturing
facility at the La Porte site located in La Porte, Texas. The
charge included $(41) of asset related charges, $(18) of contract
termination costs, and $(16) of employee severance and related
benefit costs.
|
|
|
|
Second quarter 2015
included a $(2) restructuring charge recorded in employee
separation/asset related charges, net associated with the 2014
restructuring program. These adjustments were primarily due to the
identification of additional projects in certain segments, offset
by lower than estimated individual severance costs and workforce
reductions achieved through non-severance programs. The net
reduction impacted segment earnings for the three months ended as
follows: Agriculture - $(4), Electronics & Communications -
$11, Industrial Biosciences - $(1), Nutrition & Health - $(4),
Performance Materials - $(2), Protection Solutions - $1, and Other
- $(3).
|
|
|
(5)
|
During first quarter
of 2015, a $(37) pre-tax impairment charge was recorded
in employee separation / asset related charges, net for a cost
basis investment within the Other segment. The assessment
resulted from the venture's revised operating plan reflecting
underperformance of its European wheat based ethanol facility and
deteriorating European ethanol market conditions. One of the
primary investors has communicated they would not fund the revised
operating plan of the investee. As a result, the carrying
value of our 6% equity investment in this venture exceeds its fair
value.
|
|
|
(6)
|
First quarter 2015
included a charge of $(40) in other income, net associated with
remeasuring the company's Ukrainian hryvnia net monetary assets.
Ukraine's central bank adopted a decision to no longer set the
indicative hryvnia exchange rate. The hryvnia became a
free-floating exchange rate and lost approximately a third of its
value through the quarter.
|
|
|
(7)
|
Second quarter 2015
included a gain of $112, net of legal expenses, recorded in other
income, net related to the company's settlement of a legal
claim. This matter relates to the Protection Solutions
segment.
|
|
|
(8)
|
Earnings per share
for the year may not equal the sum of quarterly earnings per share
due to the changes in average share calculations.
|
|
|
E.I. du Pont de
Nemours and Company
Consolidated Segment
Information
(Dollars in
millions)
|
|
|
SCHEDULE
C
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
SEGMENT NET SALES
(1)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Agriculture
|
|
$
|
3,218
|
|
|
$
|
3,218
|
|
|
$
|
7,004
|
|
|
$
|
7,155
|
|
Electronics &
Communications
|
|
494
|
|
|
528
|
|
|
946
|
|
|
1,045
|
|
Industrial
Biosciences
|
|
355
|
|
|
357
|
|
|
707
|
|
|
707
|
|
Nutrition &
Health
|
|
835
|
|
|
826
|
|
|
1,636
|
|
|
1,639
|
|
Performance
Materials
|
|
1,335
|
|
|
1,338
|
|
|
2,584
|
|
|
2,719
|
|
Protection
Solutions
|
|
786
|
|
|
806
|
|
|
1,515
|
|
|
1,596
|
|
Other
|
|
38
|
|
|
48
|
|
|
74
|
|
|
97
|
|
Consolidated net
sales
|
|
$
|
7,061
|
|
|
$
|
7,121
|
|
|
$
|
14,466
|
|
|
$
|
14,958
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
SEGMENT OPERATING
EARNINGS (1)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Agriculture
|
|
$
|
865
|
|
|
$
|
772
|
|
|
$
|
1,966
|
|
|
$
|
1,910
|
|
Electronics &
Communications
|
|
93
|
|
|
89
|
|
|
152
|
|
|
168
|
|
Industrial
Biosciences
|
|
62
|
|
|
50
|
|
|
125
|
|
|
104
|
|
Nutrition &
Health
|
|
130
|
|
|
100
|
|
|
234
|
|
|
186
|
|
Performance
Materials
|
|
325
|
|
|
301
|
|
|
598
|
|
|
618
|
|
Protection
Solutions
|
|
188
|
|
|
181
|
|
|
364
|
|
|
348
|
|
Other
|
|
(50)
|
|
|
(46)
|
|
|
(109)
|
|
|
(77)
|
|
Total segment
operating earnings
|
|
1,613
|
|
|
1,447
|
|
|
3,330
|
|
|
3,257
|
|
Corporate
expenses
|
|
(83)
|
|
|
(148)
|
|
|
(169)
|
|
|
(302)
|
|
Interest
expense
|
|
(93)
|
|
|
(74)
|
|
|
(185)
|
|
|
(158)
|
|
Operating earnings
before income taxes and exchange
(losses) gains
|
|
1,437
|
|
|
1,225
|
|
|
2,976
|
|
|
2,797
|
|
Net exchange (losses)
gains (2)
|
|
(15)
|
|
|
11
|
|
|
(136)
|
|
|
153
|
|
Operating earnings
before income taxes (Non-GAAP)
|
|
$
|
1,422
|
|
|
$
|
1,236
|
|
|
$
|
2,840
|
|
|
$
|
2,950
|
|
Non-operating
pension/OPEB costs (3)
|
|
(133)
|
|
|
(87)
|
|
|
(207)
|
|
|
(196)
|
|
Total significant
items before income taxes
|
|
44
|
|
|
85
|
|
|
335
|
|
|
31
|
|
Income from
continuing operations before income taxes (GAAP)
|
|
$
|
1,333
|
|
|
$
|
1,234
|
|
|
$
|
2,968
|
|
|
$
|
2,785
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
SIGNIFICANT ITEMS BY
SEGMENT (PRE-TAX) (1)(4)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Agriculture
|
|
$
|
35
|
|
|
$
|
(4)
|
|
|
$
|
(38)
|
|
|
$
|
31
|
|
Electronics &
Communications
|
|
8
|
|
|
11
|
|
|
15
|
|
|
11
|
|
Industrial
Biosciences
|
|
3
|
|
|
(1)
|
|
|
4
|
|
|
(1)
|
|
Nutrition &
Health
|
|
12
|
|
|
(4)
|
|
|
13
|
|
|
(4)
|
|
Performance
Materials
|
|
9
|
|
|
(2)
|
|
|
5
|
|
|
(2)
|
|
Protection
Solutions
|
|
7
|
|
|
113
|
|
|
10
|
|
|
113
|
|
Other
|
|
—
|
|
|
(3)
|
|
|
(3)
|
|
|
(40)
|
|
Total significant
items by segment
|
|
74
|
|
|
110
|
|
|
6
|
|
|
108
|
|
Corporate
expenses
|
|
(30)
|
|
|
(5)
|
|
|
329
|
|
|
(17)
|
|
Interest
expense
|
|
—
|
|
|
(20)
|
|
|
—
|
|
|
(20)
|
|
Net exchange gains
(losses)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(40)
|
|
Total significant
items before income taxes
|
|
$
|
44
|
|
|
$
|
85
|
|
|
$
|
335
|
|
|
$
|
31
|
|
E.I. du Pont de
Nemours and Company
Consolidated Segment
Information
(Dollars in
millions)
|
|
|
SCHEDULE C
(continued)
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Segment Operating Earnings and Operating Earnings EPS excluding the
impact of currency (Non-GAAP)
|
Segment operating
earnings and operating earnings per share excluding the impact of
currency assumes current operating earnings results using foreign
currency exchange rates in effect for the comparable prior-year
period.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
June 30,
2015
|
|
Three Months
Ended
June 30,
2016
|
|
|
Segment Operating
Earnings
|
|
Segment Operating
Earnings
|
|
Impact of
Currency
|
|
Segment Operating
Earnings Excluding Currency
|
|
%
Change
|
Agriculture
|
|
$
|
772
|
|
|
$
|
865
|
|
|
$
|
(36)
|
|
|
$
|
901
|
|
|
17%
|
Electronics &
Communications
|
|
89
|
|
|
93
|
|
|
(1)
|
|
|
94
|
|
|
6
|
Industrial
Biosciences
|
|
50
|
|
|
62
|
|
|
(3)
|
|
|
65
|
|
|
30
|
Nutrition &
Health
|
|
100
|
|
|
130
|
|
|
(3)
|
|
|
133
|
|
|
33
|
Performance
Materials
|
|
301
|
|
|
325
|
|
|
(16)
|
|
|
341
|
|
|
13
|
Protection
Solutions
|
|
181
|
|
|
188
|
|
|
(4)
|
|
|
192
|
|
|
6
|
Other
|
|
(46)
|
|
|
(50)
|
|
|
—
|
|
|
(50)
|
|
|
(9)
|
Total segment
operating earnings
|
|
$
|
1,447
|
|
|
$
|
1,613
|
|
|
$
|
(63)
|
|
|
$
|
1,676
|
|
|
16%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
June 30,
2015
|
|
Three Months
Ended
June 30,
2016
|
|
|
Operating
Earnings
per share (Non-GAAP)
(5)
|
|
Operating
Earnings
per share (Non-GAAP)
(5)
|
|
Impact of
Currency
|
|
Operating
Earnings
per share excluding
currency (Non-GAAP)
(5)
|
|
%
Change
|
Operating earnings
per share (Non-GAAP) (5)
|
|
$
|
1.09
|
|
|
$
|
1.24
|
|
|
$
|
(0.05)
|
|
|
$
|
1.29
|
|
|
18%
|
|
|
|
|
|
|
|
|
|
|
|
Corporate
Expenses
|
|
|
|
|
The reconciliation
below reflects GAAP corporate expenses excluding significant
items.
|
|
|
|
|
|
Three Months
Ended
June
30,
|
|
|
2016
|
|
2015
|
Corporate expenses
(GAAP)
|
|
$
|
113
|
|
|
$
|
153
|
|
Significant items
(4)
|
|
30
|
|
|
5
|
|
Corporate expenses
(Non-GAAP)
|
|
$
|
83
|
|
|
$
|
148
|
|
|
|
|
|
|
(1)
Segment operating earnings is defined as income (loss) from
continuing operations before income taxes excluding significant
pre-tax benefits (charges), non-operating pension/OPEB costs,
exchange gains (losses), corporate expenses and interest. DuPont
Sustainable Solutions, previously within the company's Safety &
Protection segment (now Protection Solutions) was comprised of two
business units: Clean Technologies (CleanTech) and Consulting
Solutions. Effective January 1, 2016, the CleanTech business
is reported in the Industrial Biosciences segment and the
Consulting Solutions business unit is reported within Other.
Reclassifications of prior year data have been made to conform to
current year classifications.
|
(2)
See Schedule D for additional information on exchange gains
and losses. Year to date June 30, 2015 exchange gains, on an
operating earnings basis (Non-GAAP), excludes the impact of a $23
exchange loss on non-operating pension.
|
(3) Year
to date June 30, 2015, non-operating pension/OPEB costs includes a
$23 exchange loss on foreign pension balances.
|
(4)
See Schedule B for detail of significant items.
|
(5) See
Schedule A for reconciliation of operating earnings per
share.
|
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,
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Income from
continuing operations before income taxes (GAAP)
|
|
$
|
1,333
|
|
|
$
|
1,234
|
|
|
$
|
2,968
|
|
|
$
|
2,785
|
|
Add: Significant
items benefit before income taxes
|
|
(44)
|
|
|
(85)
|
|
|
(335)
|
|
|
(31)
|
|
Add: Non-operating
pension/OPEB costs (1)
|
|
133
|
|
|
87
|
|
|
207
|
|
|
196
|
|
Operating earnings
before income taxes (Non-GAAP)
|
|
$
|
1,422
|
|
|
$
|
1,236
|
|
|
$
|
2,840
|
|
|
$
|
2,950
|
|
Less: Net income
attributable to noncontrolling interests from
continuing operations
|
|
4
|
|
|
5
|
|
|
10
|
|
|
9
|
|
Add: Interest
expense (2)
|
|
|
93
|
|
|
74
|
|
|
185
|
|
|
158
|
|
Adjusted EBIT from
operating earnings (Non-GAAP)
|
|
1,511
|
|
|
1,305
|
|
|
3,015
|
|
|
3,099
|
|
Add: Depreciation and
amortization
|
|
339
|
|
|
362
|
|
|
699
|
|
|
745
|
|
Adjusted EBITDA from
operating earnings (Non-GAAP)
|
|
$
|
1,850
|
|
|
$
|
1,667
|
|
|
$
|
3,714
|
|
|
$
|
3,844
|
|
Reconciliation of
Operating Costs to Consolidated Income Statement Line
Items
|
GAAP operating costs
is defined as other operating charges, selling, general and
administrative expenses, and research and development costs. The
reconciliation below reflects operating costs excluding significant
items and non-operating pension/OPEB costs.
|
|
|
|
|
|
Three months ended
June 30, 2016
|
|
Three months ended
June 30, 2015
|
|
As Reported
(GAAP)
|
Less: Significant
Items (2)
|
Less: Non-
Operating
Pension/
OPEB Costs
|
(Non-GAAP)
|
|
As Reported
(GAAP)
|
Less: Significant
Items (2)
|
Less: Non-
Operating
Pension/
OPEB Costs
|
(Non-GAAP)
|
Other operating
charges
|
$
|
143
|
|
$
|
(30)
|
|
$
|
—
|
|
$
|
173
|
|
|
$
|
174
|
|
$
|
5
|
|
$
|
—
|
|
$
|
169
|
|
Selling, general and
administrative
expenses
|
1,211
|
|
76
|
|
53
|
|
1,082
|
|
|
1,274
|
|
—
|
|
35
|
|
1,239
|
|
Research and
development expense
|
432
|
|
—
|
|
20
|
|
412
|
|
|
495
|
|
—
|
|
13
|
|
482
|
|
Total
|
$
|
1,786
|
|
$
|
46
|
|
$
|
73
|
|
$
|
1,667
|
|
|
$
|
1,943
|
|
$
|
5
|
|
$
|
48
|
|
$
|
1,890
|
|
|
|
Reconciliation of
Operating Earnings Per Share (EPS) Outlook
|
|
The reconciliation
below represents the company's outlook on an operating earnings
basis, defined as earnings excluding significant items and
non-operating pension/OPEB costs.
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
December 31,
|
|
|
|
|
2016
Outlook
|
|
2015
Actual
|
|
Operating EPS
(Non-GAAP)
|
|
|
$ 3.15 -
3.20
|
|
|
$
|
2.77
|
|
|
|
|
|
|
|
|
|
Significant items
(2)
|
|
|
|
|
|
|
Transaction costs
(3)
|
|
|
(0.45)
|
|
|
(0.07)
|
|
|
Gain on sale of
entity
|
|
|
0.24
|
|
|
—
|
|
|
Restructuring
adjustments / charges
|
|
|
0.01
|
|
|
(0.58)
|
|
|
Customer claims
adjustment/recovery
|
|
|
0.04
|
|
|
0.23
|
|
|
Litigation
settlement
|
|
|
—
|
|
|
0.10
|
|
|
Asset impairment
charge
|
|
|
—
|
|
|
(0.03)
|
|
|
Ukraine
devaluation
|
|
|
—
|
|
|
(0.04)
|
|
|
|
|
|
|
|
|
|
Non-operating
pension/OPEB costs - estimate (4)
|
|
|
(0.29)
|
|
|
(0.29)
|
|
|
|
|
|
|
|
|
|
EPS from continuing
operations (GAAP)
|
|
|
$ 2.70 -
2.75
|
|
|
$
|
2.09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
E.I. du Pont de
Nemours and Company
Reconciliation of
Non-GAAP Measures
(Dollars in
millions, except per share amounts)
|
|
|
SCHEDULE D
(continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange
Gains/Losses on Operating Earnings (2)
|
|
|
|
The company routinely
uses forward exchange contracts to offset its net exposures, by
currency, related to the foreign currency denominated monetary
assets and liabilities of its operations. The objective of this
program is to maintain an approximately balanced position in
foreign currencies in order to minimize, on an after-tax basis, the
effects of exchange rate changes. The net pre-tax exchange gains
and losses are recorded in other 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,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Subsidiary
Monetary Position Gain (Loss)
|
|
|
|
|
|
|
|
|
Pre-tax exchange
gains (losses)
|
|
$
|
146
|
|
|
$
|
29
|
|
|
$
|
179
|
|
|
$
|
(87)
|
|
Local tax (expenses)
benefits
|
|
(60)
|
|
|
25
|
|
|
(47)
|
|
|
(93)
|
|
Net after-tax impact
from subsidiary exchange gains (losses)
|
|
$
|
86
|
|
|
$
|
54
|
|
|
$
|
132
|
|
|
$
|
(180)
|
|
|
|
|
|
|
|
|
|
|
Hedging Program
Gain (Loss)
|
|
|
|
|
|
|
|
|
Pre-tax exchange
(losses) gains
|
|
$
|
(161)
|
|
|
$
|
(18)
|
|
|
$
|
(315)
|
|
|
$
|
240
|
|
Tax benefits
(expenses)
|
|
58
|
|
|
6
|
|
|
113
|
|
|
(87)
|
|
Net after-tax impact
from hedging program exchange (losses) gains
|
|
$
|
(103)
|
|
|
$
|
(12)
|
|
|
$
|
(202)
|
|
|
$
|
153
|
|
|
|
|
|
|
|
|
|
|
Total Exchange
Gain (Loss)
|
|
|
|
|
|
|
|
|
Pre-tax exchange
(losses) gains (5)
|
|
$
|
(15)
|
|
|
$
|
11
|
|
|
$
|
(136)
|
|
|
$
|
153
|
|
Tax (expenses)
benefits
|
|
(2)
|
|
|
31
|
|
|
66
|
|
|
(180)
|
|
Net after-tax
exchange (losses) gains
|
|
$
|
(17)
|
|
|
$
|
42
|
|
|
$
|
(70)
|
|
|
$
|
(27)
|
|
|
|
|
|
|
|
|
|
|
As shown above, the
"Total Exchange Gain (Loss)" is the sum of the "Subsidiary Monetary
Position Gain (Loss)" and the "Hedging Program Gain
(Loss)."
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Base Income Tax Rate to Effective Income Tax Rate
|
|
|
|
|
Base income tax rate
is defined as the effective income tax rate less the effect of
exchange gains (losses), as defined above, significant items and
non-operating pension/OPEB costs.
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Income from
continuing operations before income taxes (GAAP)
|
|
$
|
1,333
|
|
|
$
|
1,234
|
|
|
$
|
2,968
|
|
|
$
|
2,785
|
|
Add:
Significant items - benefit (2)
|
|
(44)
|
|
|
(85)
|
|
|
(335)
|
|
|
(31)
|
|
Non-operating pension/OPEB costs (1)
|
|
133
|
|
|
87
|
|
|
207
|
|
|
196
|
|
Less: Net
exchange (losses) gains (5)
|
|
(15)
|
|
|
11
|
|
|
(136)
|
|
|
153
|
|
Income from
continuing operations before income taxes, significant
items,
exchange (losses) gains, and non-operating pension/OPEB costs
(Non-GAAP)
|
$
|
1,437
|
|
|
$
|
1,225
|
|
|
$
|
2,976
|
|
|
$
|
2,797
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes on continuing operations (GAAP)
|
|
$
|
306
|
|
|
$
|
260
|
|
|
$
|
712
|
|
|
$
|
790
|
|
Add: Tax
expenses on significant items
|
|
(25)
|
|
|
(53)
|
|
|
(156)
|
|
|
(56)
|
|
Tax benefits on non-operating pension/OPEB costs
|
|
44
|
|
|
30
|
|
|
72
|
|
|
60
|
|
Tax (expenses) benefits on exchange gains/losses
|
|
(2)
|
|
|
31
|
|
|
66
|
|
|
(180)
|
|
Provision for income
taxes on continuing earnings, excluding exchange gains (losses)
(Non-GAAP)
|
$
|
323
|
|
|
$
|
268
|
|
|
$
|
694
|
|
|
$
|
614
|
|
|
|
|
|
|
|
|
|
|
Effective income tax
rate (GAAP)
|
|
23.0%
|
|
|
21.1%
|
|
|
24.0%
|
|
|
28.4%
|
|
Significant items and
non-operating pension/OPEB costs effect
|
|
(0.1)%
|
|
|
(1.9)%
|
|
|
(1.9)%
|
|
|
(1.5)%
|
|
Tax rate, from
continuing operations before significant items and non-operating
pension/OPEB costs
|
22.9%
|
|
|
19.2%
|
|
|
22.1%
|
|
|
26.9%
|
|
Exchange (losses)
gains effect
|
|
(0.4)%
|
|
|
2.7%
|
|
|
1.2%
|
|
|
(4.9)%
|
|
Base income tax rate
from continuing operations (Non-GAAP)
|
|
22.5%
|
|
|
21.9%
|
|
|
23.3%
|
|
|
22.0%
|
|
|
|
|
|
|
|
|
|
|
(1) Year
to date June 30, 2015, non-operating pension/OPEB costs includes a
$23 exchange loss on foreign pension balances.
|
(2) See
Schedule B for detail of significant items.
|
(3) The
2016 outlook for significant items includes the current estimate
for full year 2016 transaction costs associated with the planned
merger with The Dow Chemical Company and related
activities.
|
(4) The
2016 estimate for non-operating pension/OPEB costs does not include
additional settlements and curtailments expected during the
remainder of the year as a result of actions associated with the
2016 global cost savings and restructuring plan.
|
(5) Year
to date June 30, 2015 exchange gains, on an operating earnings
basis (Non-GAAP), excludes a $23 exchange loss on non-operating
pension.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/dupont-reports-second-quarter-2016-results-300303650.html
SOURCE DuPont