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E. I. DU PONT
DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES RECONCILIATION OF
NON-GAAP MEASURES (UNAUDITED) (dollars in millions) SEGMENT SALES Year 2014
Year 2008 Total Segment Sales (a) 35,011 26,499 Less: Performance Chemicals
(b) 6,497 6,245 Less: Other 5 160 Total Segment Sales (excluding Performance
Chemicals and Other) 28,509 20,094 Segment sales includes transfers. SEGMENT
ADJUSTED OPERATING EARNINGS Segment Pre-tax Operating Income (PTOI) (GAAP)
(c) 6,356 3,373 Less: Performance Chemicals PTOI (b) 913 619 Less:
Other/Pharma PTOI (391) 839 Less: Corporate Expenses (d) 572 479 Add:
Significant Items (e) (444) 466 Segment Adjusted Operating Earnings
(excluding Performance Chemicals and Other/Pharma) (f) (Non-GAAP) 4,818 1,902
Prior periods reflect the reclassifications of Viton¨ fluoroelastomers from
Performance Materials to Performance Chemicals. Segment PTOI is defined as
income (loss) from continuing operations before income taxes excluding
non-operating pension and other postretirement employee benefit costs,
exchange gains (losses), corporate expenses and interest. Represents total
corporate expenses excluding significant items, an estimate of DuPont
Performance Coatings residual costs and an estimate for an amount that would
be allocated to Performance Chemicals. Represents significant items included
in Segment PTOI, excluding those related to Performance Chemicals and
Other/Pharma. Segment adjusted operating margin (non-GAAP) is based on total
segment sales and segment adjusted operating earnings, excluding Performance
Chemicals and Other/Pharma. Year Year 2014 2008 ADJUSTED OPERATING EARNINGS
AFTER INCOME TAXES Income From Continuing Operations After Income Taxes
(GAAP) 3,621 2,083 Add: Significant Items Charge - After-tax 9 378 Add:
Non-Operating Pension & OPEB Costs / (Credit) - After-tax 84 (250) Less:
Net Income Attributable to Noncontrolling Interests 11 4 Less: Pharma
Operating Earnings - After-tax (a) 14 666 Less: Performance Chemicals
Operating Earnings - After-tax (b), (c) 755 537 Adjusted Operating Earnings -
After-tax (excluding Performance Chemicals and Pharma) (Non-GAAP) 2,934 1,004
Pharma operating earnings assumes a 35% tax rate. Performance Chemicals
operating earnings assumes a base income tax rate from continuing operations
of 19.2% and 20.4% for 2014 and 2008, respectively. Prior periods reflect the
reclassifications of Viton¨ fluoroelastomers from Performance Materials to
Performance Chemicals. The prior page includes company information that does
not conform with generally accepted accounting principles (GAAP). Management
believes the use of these non-GAAP measures is 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 used
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 are
available on the Investor Center of www.dupont.com. Reconciliations of
non-GAAP measures to GAAP are also included herein. 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 companys control. Some of the important factors
that could cause the companys 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 DuPonts 2015 Annual Meeting. Information about
DuPonts directors and executive officers is available in DuPonts definitive
proxy statement, filed with the SEC on March 23, 2015, for its 2015 Annual
Meeting. To the extent holdings of DuPonts 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 DuPonts 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 SECs website at www.sec.gov. Copies also will
be available free of charge at DuPonts website at www.dupont.com or by
contacting DuPont Investor Relations at (302) 774-4994. (1) Segment sales
include transfers. CAGR is calculated excluding Performance Coatings,
Performance Chemicals and Other (2) Segment adjusted operating margin is
based on total segment sales and segment adjusted operating earnings,
excluding Performance Chemicals and Other/Pharma. Segment adjusted operating
earnings are calculated using segment pre-tax operating income excluding
significant items; calculations include certain corporate expenses and
exclude adjusted operating earnings of Performance Chemicals and
Pharma/Other. Calculation is from 12/31/08 to 12/31/14 (3) Adjusted operating
earnings after-tax is defined as income from continuing operations after-tax
excluding non-operating pension/OPEB costs and significant items.
Reconciliations of non-GAAP measures to GAAP are included above Source:
Datastream as of 12/31/2014, Bloomberg, Capital IQ, FactSet (4) Total
Shareholder Return calculated as the appreciation or depreciation of share
price, plus any dividends, over a given period, expressed as a percentage of
the shares value at the beginning of the period. Assumes dividends are
re-invested at the closing price applicable on the ex-dividend date. Proxy
Peers and S&P Indices are USD market cap-weighted (5) Proxy Peers
consists of 3M, Air Products, Baxter Intl, Boeing, Caterpillar, Dow, Emerson,
Honeywell, Ingersoll Rand, Johnson Controls, Johnson and Johnson, Kimberly
Clark, Merck, Monsanto, Procter and Gamble, Syngenta AG, and United
Technologies (6) S&P Chemicals in 2014 consists of Airgas, Air Products,
CF Industries, Dow, DuPont, Eastman Chemical, Ecolab, FMC, IFF,
LyondellBasell, Monsanto, Mosaic, PPG, Praxair, Sherwin-Williams, and Sigma-Aldrich
(7) S&P Materials in 2014 consists of Air Products, Airgas, Alcoa,
Allegheny Technologies, Avery Dennison, Ball, Bemis, CF Industries, Dow
Chemical, DuPont, Eastman Chemical, Ecolab, FMC, Freeport-McMoRan, IFF,
International Paper, LyondellBasell, Martin Marietta Materials, MeadWestvaco,
Monsanto, Mosaic, Newmont Mining, Nucor, Owens Illinois, PPG, Praxair, Sealed
Air, Sherwin-Williams, Sigma-Aldrich, and Vulcan Materials (8) All figures
exclude Performance Chemicals
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