WILMINGTON, Del., May 5, 2015 /PRNewswire/ -- DuPont (NYSE:
DD) today mailed a letter from CEO Ellen
Kullman emphasizing that shareholders have a clear choice in
this proxy contest: support DuPont on its path of continued value
creation, overseen by a world-class Board that includes two new
change agents specifically chosen for their operating experience
and records of value creation; or allow Trian to displace the
DuPont Board's accomplished leadership in order to pursue its
value-destructive breakup agenda. The Company urges shareholders to
protect the value of their investment in DuPont by voting "FOR" all
12 of DuPont's highly qualified, experienced directors using the
WHITE proxy card today.
The full text of the letter follows:
LETTER FROM CEO
ELLEN KULLMAN
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May 5, 2015
Dear Fellow Shareholder,
With this year's Annual Meeting just one week away, I wanted to
share my personal perspective on why this is such a pivotal moment
for DuPont—and why your vote is so important.
After 27 years at DuPont and six with the extraordinary
privilege of serving as its leader, I still marvel at our ability
to find novel ways of connecting science to the
marketplace—helping customers develop solutions to deeply
complex problems through the unique science and engineering
capabilities that only DuPont can bring to bear. In doing so,
we increase the value of your Company and fulfill our
responsibility to you, our owners.
Making this happen demands an unyielding focus on our value
drivers—the ingrained cost discipline that increases
returns, combined with strategic decision making and successful
portfolio management that delivers value to shareholders now, while
securing the future of new solutions and outcomes that we expect
from science-driven innovation. Over the six years of my tenure as
Chair and CEO, we have taken significant action to further that
objective. We have dramatically reshaped and retooled our
Company to ensure we can solve for the needs of the world's growing
population during a new age of resource scarcity—and
can translate that directly into compelling and sustainable value
for shareholders.
This program of change has taken direct aim at DuPont's
productivity and shifted the portfolio to center on the
highest-potential opportunities where DuPont's science and
engineering can deliver the greatest value. We have already
driven more than $2 billion of cost
productivity and expect to deliver additional annual run-rate
savings of at least $1.3 billion by
the end of 2017. We divested Performance Coatings and
initiated the separation of Performance Chemicals, now known as
Chemours, as well as acquired Danisco and Pannar Seed to further
strengthen our offerings in enzymes and across the
agriculture-to-food value chain—to name a few of the most
significant moves. While driving these changes, we also
returned more than $14 billion to our
shareholders.1
While we have more to do, our progress is unquestionable and
began long before Trian's investment. Over the past six
years, our ongoing business has generated 19% compound annual
growth rate (CAGR) in adjusted operating earnings per
share2 and 6% revenue growth.3 These results
are reflected in the total shareholder return of 266% we delivered
during the same period.4
Your Board, composed of world-class directors with the expertise
to oversee a global science company like DuPont, plays an active
role in this transformation process. The Board, together with
management, embraces constructive change. Consistent
with our approach to skills-based board building, we recently added
Ed Breen and Jim Gallogly specifically because of their
exceptional combination of operating experience and track records
of value creation through portfolio transformation and vigorous
cost reduction. They are committed to bringing their operational
expertise to the already strong Board as we continue driving
improvement across the Company. You can count on all of your
outstanding directors to continue to evaluate our rapidly changing
Company and deliver superior value.
We know we have more work to do. Ongoing portfolio change,
operating model redesign, targeted R&D investment and a focus
on productivity are driving the next phase of significant
profitable growth as the next generation DuPont fully emerges.
At this critical time, while we are working on multiple
fronts to continue our positive momentum and our leaders must stay
focused on execution, Trian has launched its campaign against
DuPont to break up the Company and increase both risk and
leverage. They have attacked our R&D with no basis of
experience and clearly do not understand how it delivers value and
contributes to both improving margins and growth. They have
tried to assert that they have the "better way," but the only
company they have overseen in this sector went into
bankruptcy. And the only source of industry experience they
can cite is Dennis Reilley, a member
of Trian's advisory board who is also a director of our competitor,
The Dow Chemical Company. This creates an unacceptable
competitive risk.
Trian's proxy fight has targeted the leadership of DuPont's
board to introduce instability in the hope of effecting their
agenda. They have launched an extended campaign of
misinformation and distortion to try to undermine the Company's
strong track record. Trian is not the right answer for
DuPont or its shareholders.
As a DuPont shareholder, you have a powerful voice in this
matter. Your choice is clear: support us on our path to
continued value creation, overseen by a world-class Board that
includes two new change agents specifically chosen for their
operating experience and records of value creation; or allow Trian
to displace our Board's accomplished leadership in order to pursue
the same brand of short-term financial engineering that Trian has
applied to much simpler businesses in the consumer and retail
sectors. Advancing their value-destructive breakup of DuPont
would derail today's progress and destroy the enormous opportunity
ahead. Your Board and management are determined to prevent
the negative and far-reaching effects on our shareholders,
customers, employees and the communities in which we operate.
There is only one week remaining before the 2015 Annual Meeting
of Shareholders. The only way to ensure the strongest future
for DuPont is to vote the WHITE proxy card "FOR" ALL 12 of
DuPont's directors today.
We have critical work to continue on your behalf, and we look
forward to meeting and exceeding your expectations in the months
and years ahead.
Thank you.
Sincerely,
ELLEN KULLMAN
Chair of
the Board and Chief Executive Officer
For more information, please visit dupontdelivers.com
Each and Every
Vote is
Important!
Shareholders with
questions about how to vote their shares may
contact:
INNISFREE M&A
INCORPORATED
Shareholders Call Toll-Free: (877) 750-9501
Banks and Brokers Call Collect: (212) 750-5833
REMEMBER: We urge shareholders to
simply discard any "gold" proxy card they may receive
from Trian. Submitting a vote on the gold proxy card – even if
shareholders "withhold" on Trian's nominees – will revoke any vote
previously submitted on DuPont's WHITE proxy
card. The best way to support the DuPont Board is to vote
using ONLY the WHITE proxy card.
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Use of Non-GAAP Measures: This letter to shareholders
contains certain non-GAAP measurements that management believes are
meaningful to investors because they provide insight with respect
to operating results of the company and additional metrics for use
in comparison to competitors. These measures should not be viewed
as an alternative to GAAP measures of performance. Furthermore,
these measures may not be consistent with similar measures provided
by other companies. This data should be read in conjunction with
previously published company reports on Forms 10-K, 10-Q, and
8-K. These reports, along with reconciliations of non-GAAP
measures to GAAP are available on the Investor Center of
www.dupont.com under Key Financials & Filings. Reconciliations
of non-GAAP measures to GAAP are provided below.
RECONCILIATION OF
NON-GAAP MEASURES (UNAUDITED)
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Year
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Year
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RECONCILIATION OF
ADJUSTED OPERATING EPS
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2014
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2008
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EPS from continuing
operations (GAAP)
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3.90
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2.28
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Add: Significant
Items
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0.01
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0.42
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Add: Non-Operating
Pension & OPEB Costs / (Credits)
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0.10
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(0.28)
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Operating EPS
(Non-GAAP)
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4.01
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2.42
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Less: Performance
Chemicals (a),(b)
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0.82
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0.59
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Less: Pharma
(c)
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0.02
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0.73
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Adjusted Operating
EPS (excluding Performance Chemicals, Pharma) (Non-GAAP)
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3.17
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1.10
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(a) Prior periods
reflect the reclassifications of Viton® fluoroelastomers from
Performance Materials to Performance Chemicals.
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(b) Performance
Chemicals operating earnings assumes a base income tax rate from
continuing operations of 19.2% and 20.4% for 2014 and 2008,
respectively.
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(c) Pharma
operating earnings assumes a 35% tax rate.
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Year
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Year
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SEGMENT SALES
(dollars in millions)
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2014
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2008
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Total Segment Sales
(a)
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35,011
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26,499
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Less: Performance
Chemicals (b)
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6,497
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6,245
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Less:
Other
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5
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160
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Total Segment Sales
(excluding Performance Chemicals and Other)
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28,509
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20,094
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(a) Segment sales
includes transfers.
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(b) Prior periods
reflect the reclassifications of Viton® fluoroelastomers
from
Performance
Materials to Performance Chemicals.
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Forward Looking Statements
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 and financial results, are
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; significant litigation and environmental
matters; 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, weather events and natural disasters; 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
successful completion of the proposed spinoff of the Performance
Chemicals segment including ability to fully realize the expected
benefits of the proposed spinoff. The company undertakes no duty to
update any forward-looking statements as a result of future
developments or new information.
ADDITIONAL INFORMATION AND WHERE TO FIND IT
DuPont has filed a definitive proxy statement with the U.S.
Securities and Exchange Commission (the "SEC") with respect to the
2015 Annual Meeting. DUPONT STOCKHOLDERS ARE STRONGLY ENCOURAGED TO
READ THE DEFINITIVE PROXY STATEMENT (INCLUDING ANY AMENDMENTS AND
SUPPLEMENTS), THE ACCOMPANYING WHITE PROXY CARD AND OTHER DOCUMENTS
FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY BECAUSE THEY CONTAIN
IMPORTANT INFORMATION.
DuPont, its directors, executive officers and other employees
may be deemed to be participants in the solicitation of proxies
from DuPont stockholders in connection with the matters to be
considered at DuPont's 2015 Annual Meeting. Information about
DuPont's directors and executive officers is available in DuPont's
definitive proxy statement, filed with the SEC on March 23, 2015, for its 2015 Annual Meeting. To
the extent holdings of DuPont's securities by such directors or
executive officers have changed since the amounts printed in the
proxy statement, such changes have been or will be reflected on
Statements of Change in Ownership on Form 4 filed with the
SEC. Information regarding the identity of potential
participants, and their direct or indirect interests, by security
holdings or otherwise, is set forth in the definitive proxy
statement and, to the extent applicable, will be updated in other
materials to be filed with the SEC in connection with DuPont's 2015
Annual Meeting. Stockholders will be able to obtain any proxy
statement, any amendments or supplements to the proxy statement and
other documents filed by DuPont with the SEC free of charge at the
SEC's website at www.sec.gov. Copies also will be available free of
charge at DuPont's website at www.dupont.com or by contacting
DuPont Investor Relations at (302) 774-4994.
1 Represents cumulative share repurchases and
dividends paid. Calculated from 12/31/08 – 12/31/14.
2 Adjusted operating EPS compound annual growth rate
is calculated from 12/31/08 –12/31/14
and is defined as diluted earnings per share from continuing
operations excluding non-operating pension/OPEB costs, significant
items, Performance Chemicals and Pharma. As required under
U.S. GAAP, EPS from continuing operations excludes Performance
Coatings for all periods presented. Reconciliations of non-GAAP
measures to GAAP are included below.
3 Segment sales include transfers and exclude
Performance Coatings, Performance Chemicals and Other; Compounded
Annual Growth Rate (CAGR) is calculated from 12/31/08 –12/31/14.
4 Total Shareholder Return measured from 12/31/08 – 12/31/14. Calculated as the
appreciation or depreciation of share price, plus any dividends,
over a given period, expressed as a percentage of the share's value
at the beginning of the period. Assumes dividends are re-invested
at the closing price applicable on the ex-dividend date. Source:
Datastream.
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SOURCE DuPont