WILMINGTON, Del., Oct. 31, 2019 /PRNewswire/ --
- 3Q19 GAAP EPS from continuing operations of $0.49; Adjusted EPS of $0.96, up 2 percent versus prior year
- 3Q19 GAAP Income from continuing operations of $372 million; Operating EBITDA of $1.4 billion
- Operating EBITDA margins improve 20 basis points versus prior
year with pricing gains, disciplined cost control and benefits from
portfolio actions more than offsetting softer volumes and currency
pressure
- Reiterates full-year guidance for organic revenue of slightly
down versus prior year and narrows the guidance range for pro forma
adjusted EPS to $3.77 to $3.82
- More than $800 million returned
to shareholders since June 1
including $600 million of share
repurchases
DuPont (NYSE: DD) today announced financial results for the
third quarter of 2019 and is reiterating its full-year guidance for
organic revenue of slightly down versus prior year and narrows the
range of pro forma adjusted EPS (1) to $3.77 to $3.82
versus the prior range of $3.75 to
$3.85, maintaining the midpoint of
the guide.
"Amid ongoing challenged market conditions and currency
headwinds, we delivered earnings per share growth and expanded
margins through continued price improvement, cost discipline and
portfolio actions," said Marc Doyle,
DuPont Chief Executive Officer. "We saw continued strength in
high-growth areas such as Water Solutions, where we recently
announced agreements to make two strategic acquisitions and are
encouraged by a second consecutive quarter of improving
China sales and a strong start to
the second half in our electronics business."
"We are confident that our ongoing investments in innovation and
the actions we are taking to set up each of our businesses with a
best-in-class cost structure will allow for significant growth
acceleration over the long term," Doyle stated.
Third Quarter Results
Net sales for the quarter totaled $5.4
billion, down 5 percent versus the same quarter last year.
On an organic basis, net sales were down 2 percent with 1 percent
higher price being more than offset by 3 percent lower volume.
Currency and portfolio headwinds decreased sales by 2 percent and 1
percent, respectively.
GAAP Income from continuing operations totaled $372 million, versus pro forma GAAP Income from
continuing operations of $88 million
in the year-ago period. Operating EBITDA(1) was
$1.4 billion, down 4 percent versus
pro forma operating EBITDA(1) in the prior year.
Operating EBITDA margins improved 20 basis points to 25.8 percent
versus prior year driven by pricing gains, benefits from portfolio
actions and disciplined cost control.
GAAP EPS from continuing operations totaled $0.49 versus pro forma GAAP EPS from continuing
operations in the year-ago period of $0.09; the improvement is mostly attributable to
the absence of costs historically allocated to Dow and Corteva of
$0.24 per share and lower integration
and separation costs of $0.23 per
share partially offset by higher restructuring and asset related
charges of $0.08 per share. Adjusted
EPS(1) increased 2 percent to $0.96, compared with pro forma adjusted EPS in
the year-ago period of $0.94
primarily driven by lower depreciation and amortization and a lower
share count partially offset by currency headwinds and slightly
lower segment results.
"I remain impressed with our team's ability to deliver in a
tough macro environment," said Ed
Breen, Executive Chairman of DuPont. "With the entire
organization aligned and focused on our strategic priorities, I am
confident that we will continue to unlock the value-creating
opportunities this portfolio offers."
Third Quarter Segment Highlights
Electronics & Imaging
Electronics & Imaging
reported net sales of $934 million,
down 1 percent from the year-ago period. Organic sales were down 1
percent due to a 1 percent decline in price; volumes were flat.
Strong volume gains in Interconnect Solutions, driven by higher
content in the next-generation premium smartphones, were offset by
softer volumes in Advanced Printing and Semiconductor
Technologies.
Within Semiconductor Technologies, gains in logic and foundry
were more than offset by ongoing weakness in memory. Sequentially,
Semiconductor Technologies volumes were up 5 percent. Regionally,
net sales for the segment were up 3 percent versus prior year in
Asia Pacific including
double-digit growth in China.
Operating EBITDA for the segment was $320
million, a decrease of 1 percent from pro forma operating
EBITDA of $322 million in the
year-ago period, as income associated with a planned asset sale was
more than offset by unfavorable product mix.
Nutrition & Biosciences
Nutrition &
Biosciences reported net sales of $1.5
billion, down 1 percent from the year-ago period. Organic
sales were up 2 percent with price and volume each improving 1
percent. Currency and portfolio were headwinds of 2 percent and 1
percent, respectively.
Volume gains in Food & Beverage and Pharma Solutions as well
as pricing gains in Pharma Solutions led to the second consecutive
quarter of accelerating organic growth for Nutrition &
Biosciences. Food & Beverage volumes were driven by gains in
specialty proteins and cellulosics from growing demand in
plant-based meats. Strong demand in Pharma Solutions led to
high-single digit organic growth in the quarter. Within Health
& Biosciences, growth in food enzymes and animal nutrition was
offset by market-driven softness in biorefineries and
probiotics.
Operating EBITDA for the segment was $360
million, a decrease of 1 percent from pro forma operating
EBITDA of $364 million in the
year-ago period; the decline attributable to the June 2019 divestiture of the Natural Colors
business which reduced operating EBITDA by about 1 percent. Pricing
gains and cost synergies offset the impact of unfavorable product
mix and currency headwinds.
Transportation & Industrial
Transportation &
Industrial reported net sales of $1.2
billion, down 11 percent from the year-ago period. Organic
sales were down 10 percent with a 1 percent price improvement more
than offset by an 11 percent volume decline; currency was a 1
percent headwind.
Volumes declined due to lower auto builds, weak electronics
demand and continued destocking in the automotive channel. Both
Europe and Asia volumes were down low teens as the impact
from China tariffs coupled with
inventory destocking impacted demand.
Local price improved across all regions in the quarter.
Operating EBITDA for the segment was $306
million, a decrease of 20 percent from pro forma operating
EBITDA of $383 million in the
year-ago period with pricing gains and cost reductions more than
offset by the impact from lower volumes and currency headwinds.
Safety & Construction
Safety & Construction
reported net sales of $1.3 billion,
down 3 percent from the year-ago period. Organic sales increased 2
percent with a 3 percent price improvement offset by a 1 percent
volume decline. The December 2018
divestiture of the European STYROFOAM™ business reduced sales by 4
percent. Currency was a 1 percent headwind.
Local price increased across all businesses and in all regions,
led by the Safety and Water Solutions businesses.
Volume gains in Water Solutions, led by strong demand in
industrial and wastewater treatment markets, were more than offset
by continued softness in Shelter Solutions driven by North America construction. Within Safety
Solutions, demand remains strong across all product lines, however,
volume gains in Tyvek® and Nomex® were offset
by lower volumes in Kevlar® primarily from limited
production due to planned maintenance downtime and raw material
disruptions in the supply chain.
Operating EBITDA for the segment totaled $352 million, an increase of 1 percent from pro
forma operating EBITDA of $350
million in the year-ago period with pricing gains more than
offsetting higher manufacturing costs, primarily from costs
associated with planned maintenance, and a currency headwind.
Non-Core
Non-Core reported net sales of $431 million, down 12 percent from the year-ago
period. Organic sales were down 8 percent driven by 10 percent
volume declines offset by 2 percent pricing gains. The September 2019 divestiture of the DuPont
Sustainable Solutions business reduced sales by 3 percent. Currency
was a 1 percent headwind.
Volume gains in photovoltaic materials and Clean Technologies
were more than offset by declines in trichlorosilane demand due to
historically low polysilicon pricing and lower metallization paste
sales into electronic and automotive component end markets. Volumes
in the Biomaterials business were down primarily due to weakened
demand in the carpet and apparel markets.
Operating EBITDA for the segment was $88
million, an increase of 2 percent from pro forma operating
EBITDA of $86 million in the year-ago
period, with a gain on the sale of DuPont Sustainable Solutions and
continued cost productivity offsetting the impact of lower
volumes.
Outlook
"With our end markets generally performing consistent with our
expectations, today we reiterate our full-year guidance for organic
sales of slightly down versus prior year. We also are narrowing the
range of our full-year guidance for pro forma adjusted EPS to
$3.77 to $3.82, maintaining the midpoint of the prior
guidance," said Jeanmarie Desmond,
Chief Financial Officer of DuPont. "I am pleased with our team's
execution enabling us to deliver on all the levers within our
control to maintain both our organic revenue and pro forma adjusted
EPS expectations for the year."
Conference Call
The Company will host a live webcast
of its third quarter earnings conference call with investors to
discuss its results and business outlook today at 8:00 a.m. ET. The slide presentation that
accompanies the conference call will be posted on the DuPont's
Investor Relations Events and Presentations page. A replay of the
webcast also will be available on the DuPont's Investor Relations
Events and Presentations page following the live event.
About DuPont
DuPont (NYSE: DD) is a global innovation
leader with technology-based materials, ingredients and solutions
that help transform industries and everyday life. Our employees
apply diverse science and expertise to help customers advance their
best ideas and deliver essential innovations in key markets
including electronics, transportation, construction, water, health
and wellness, food and worker safety. More information can be found
at www.dupont.com.
Cautionary Statement Regarding Forward Looking
Statements
This communication contains "forward-looking statements"
within the meaning of the federal securities laws, including
Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. In this
context, forward-looking statements often address expected future
business and financial performance and financial condition, and
often contain words such as "expect," "anticipate," "intend,"
"plan," "believe," "seek," "see," "will," "would," "target," and
similar expressions and variations or negatives of these
words.
On April 1, 2019, the Company
completed the separation of its materials science business into a
separate and independent public company by way of a pro rata
dividend-in-kind of all the then outstanding stock of Dow Inc. (the
"Dow Distribution"). The Company completed the separation of its
agriculture business into a separate and independent public company
on June 1, 2019, by way of a pro rata
dividend-in-kind of all the then outstanding stock of Corteva, Inc.
(the "Corteva Distribution").
Forward-looking statements address matters that are, to
varying degrees, uncertain and subject to risks, uncertainties and
assumptions, many of which that are beyond DuPont's control, that
could cause actual results to differ materially from those
expressed in any forward-looking statements. Forward-looking
statements are not guarantees of future results. All statements
about guidance, outlook and estimates, including for the fourth
quarter 2019, full year 2019, additional guidance and any
statements denoted by "2019E" are forward looking statements. Some
of the important factors that could cause DuPont's actual results
to differ materially from those projected in any such
forward-looking statements include, but are not limited to: (i)
ability and costs to achieve all the expected benefits from the Dow
Distribution and the Corteva Distribution (together, the
"Distributions"); (ii) restrictions under intellectual property
cross license agreements entered into in connection with the
Distributions; (iii) non-compete restrictions agreed in connection
with the Distributions; (iv) the incurrence of significant costs in
connection with the Distributions, including costs to service debt
incurred by the Company to establish the relative credit profiles
of Corteva, Dow and DuPont and increased costs related to supply,
service and other arrangements that, prior to the Dow Distribution,
were between entities under the common control of DuPont; (v) risks
related to indemnification of certain legacy liabilities of E. I.
du Pont de Nemours and Company ("Historical EID") in connection
with the Corteva Distribution; (vi) potential liability arising
from fraudulent conveyance and similar laws in connection with the
Distributions; (vii) failure to effectively manage acquisitions,
divestitures, alliances, joint ventures and other portfolio
changes, including meeting conditions under the Letter Agreement
entered in connection with the Corteva Distribution, related to the
transfer of certain levels of assets and businesses; (viii)
uncertainty as to the long-term value of DuPont common stock; (ix)
potential inability or reduced access to the capital markets or
increased cost of borrowings, including as a result of a credit
rating downgrade and (x) other risks to DuPont's business,
operations and results of operations including from: failure to
develop and market new products and optimally manage product life
cycles; ability, cost and impact on business operations, including
the supply chain, of responding to changes in market acceptance,
rules, regulations and policies and failure to respond to such
changes; outcome of significant litigation, environmental matters
and other commitments and contingencies; failure to appropriately
manage process safety and product stewardship issues; global
economic and capital market conditions, including the continued
availability of capital and financing, as well as inflation,
interest and currency exchange rates; changes in political
conditions, including tariffs, trade disputes and retaliatory
actions; impairment of goodwill or intangible assets; the
availability of and fluctuations in the cost of energy and raw
materials; business or supply disruption, including in connection
with the Distributions; security threats, such as acts of sabotage,
terrorism or war, natural disasters and weather events and patterns
which could result in a significant operational event for DuPont,
adversely impact demand or production; ability to discover, develop
and protect new technologies and to protect and enforce DuPont's
intellectual property rights; 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 are and will be more fully discussed in DuPont's current,
quarterly and annual reports and other filings made with the U.S.
Securities and Exchange Commission, in each case, as may be amended
from time to time in future filings with the SEC. While the list of
factors presented here is considered representative, no such list
should be considered 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
DuPont's consolidated financial condition, results of operations,
credit rating or liquidity. You should not place undue reliance on
forward-looking statements, which speak only as of the date they
are made. DuPont assumes no obligation to publicly provide
revisions or updates to any forward-looking statements whether as a
result of new information, future developments or otherwise, should
circumstances change, except as otherwise required by securities
and other applicable laws. A detailed discussion of some of
the significant risks and uncertainties which may cause results and
events to differ materially from such forward-looking statements is
included in the section titled "Risk Factors" (Part II, Item 1A) of
DuPont's Quarterly Report on Form 10-Q filed on August 6, 2019 as may be modified by DuPont's
subsequent quarterly reports on Form 10-Q and current reports on
Form 8-K.
Throughout this filing, except as otherwise noted by the
context, the terms "DuPont" or "the Company" used herein mean
DuPont de Nemours, Inc. and its consolidated subsidiaries. On
June 1, 2019, DowDuPont Inc.
("DowDuPont") changed its registered name to DuPont de Nemours Inc.
("DuPont") (for certain events prior to June
1, 2019, the Company may be referred to as DowDuPont).
Beginning on June 3, 2019, the
Company's common stock began trading on the New York Stock Exchange
under the ticker symbol "DD".
Overview
Effective August 31,
2017, pursuant to the merger of equals transaction
contemplated by the Agreement and Plan of Merger, dated as of
December 11, 2015, as amended on
March 31, 2017, The Dow Chemical
Company and its consolidated subsidiaries ("Historical Dow") and E.
I. du Pont de Nemours and Company and its consolidated subsidiaries
("Historical EID") each merged with subsidiaries of DowDuPont and
as a result, Historical Dow and Historical EID became subsidiaries
of DowDuPont (the "Merger"). Prior to the Merger, DowDuPont did not
conduct any business activities other than those required for its
formation and matters contemplated by the Merger Agreement.
Historical Dow was determined to be the accounting acquirer in the
Merger and as a result, Historical EID's assets and liabilities
were reflected at fair value as of the close of the Merger.
Effective as of 5:00 p.m. on
April 1, 2019, DowDuPont completed
the separation of its materials science business into a separate
and independent public company by way of a distribution of Dow Inc.
("Dow") through a pro rata dividend in-kind of all of the
then-issued and outstanding shares of Dow's common stock, par value
$0.01 per share (the "Dow Common
Stock"), to holders of DowDuPont's common stock, par value
$0.01 per share (the "DowDuPont
Common Stock"), as of the close of business on March 21, 2019 (the "Dow Distribution"). Dow's
historical financial results for periods prior to April 1, 2019 are reflected in DuPont's
consolidated financial statements as discontinued operations.
Effective as of 12:01 a.m. on
June 1, 2019, DuPont completed the
separation of its agriculture business into a separate and
independent public company by way of a distribution of Corteva Inc.
("Corteva") through a pro rata dividend in-kind of all of the
then-issued and outstanding shares of Corteva's common stock, par
value $0.01 per share (the "Corteva
Common Stock"), to holders of DuPont de Nemours, Inc.'s common
stock, par value $0.01 per share, as
of the close of business on May 24,
2019 (the "Corteva Distribution" and, together with the Dow
Distribution, the "Distributions"). Corteva's historical financial
results for periods prior to June 1,
2019 are reflected in DuPont's consolidated financial
statements as discontinued operations.
The unaudited pro forma interim Consolidated Statements of
Operations (discussed below) included herein include costs
previously allocated to the materials science and agriculture
businesses that did not meet the definition of expenses related to
discontinued operations in accordance with Financial Accounting
Standards Codification 205, "Presentation of Financial Statements"
("ASC 205") and thus are reflected in the Company's results of
continuing operations. A significant portion of these costs relate
to Historical Dow and consist of leveraged services provided
through service centers, as well as other corporate overhead costs
related to information technology, finance, manufacturing, research
& development, sales & marketing, supply chain, human
resources, sourcing & logistics, legal and communications,
public affairs & government affairs functions. These costs are
no longer incurred by the Company following the Distributions.
Following the Corteva Distribution, DuPont holds the specialty
products business. In addition, immediately following the Corteva
Distribution, on June 1, 2019, DuPont
completed a 1-for-3 reverse stock split (the "Reverse Stock Split")
and as a result, DuPont common stockholders now hold one share of
common stock of DuPont for every three shares held prior to the
Reverse Stock Split. The historical financial information presented
herein has been retroactively adjusted to reflect this change.
Unaudited Pro Forma Financial Information
In order to
provide the most meaningful comparison of results of operations and
results by segment, supplemental unaudited pro forma financial
information has been included in the following financial schedules.
The unaudited pro forma financial information (the "pro forma
financial statements") is derived from DuPont's interim
Consolidated Financial Statements and accompanying notes, adjusted
to give effect to certain events directly attributable to the
Distributions and Financings (as defined below). In contemplation
of the Distributions and to achieve the respective credit profiles
of each of DuPont, Dow, and Corteva, in the fourth quarter of 2018,
DowDuPont consummated a public underwritten offer of eight series
of senior unsecured notes (the "2018 Senior Notes") in the
aggregate principal amount of $12.7
billion and entered into a term loan agreement consisting of
two term loan facilities (the "Term Loan Facilities") in the
aggregate principal amount of $3.0
billion. In May 2019, the
funds from the Term Loan Facilities were drawn, along with the
issuance of approximately $1.4
billion in commercial paper (the "Funding CP Issuance"
together with the 2018 Senior Notes and Term Loan Facilities, the
"Financings"). The net proceeds from the Financings together with
cash from operations were used to fund cash contributions to Dow
and Corteva, and DowDuPont's $3.0
billion share repurchase program which was completed in the
first quarter of 2019 (the "Share Repurchase Program").
The pro forma financial statements were prepared in accordance
with Article 11 of Regulation S-X. The historical consolidated
financial information has been adjusted to give effect to pro forma
events that are (1) directly attributable to the Distributions and
the Financings (collectively the "Transactions"), (2) factually
supportable and (3) with respect to the interim Consolidated
Statements of Operations, expected to have a continuing impact on
the results. The unaudited pro forma interim Statements of
Operations for the nine months ended September 30, 2019 and for three and nine months
ended September 30, 2018 give effect
to the pro forma events as if they had been consummated on
January 1, 2018. There were no pro
forma adjustments for the three months ended September 30, 2019.
Restructuring or integration activities or other costs following
the Distributions that may be incurred to achieve cost or growth
synergies of DuPont are not reflected. The pro forma financial
statements provide shareholders with summary financial information
and historical data that is on a basis consistent with how DuPont
reports current financial information.
The pro forma financial statements are presented for
informational purposes only, and do not purport to represent what
DuPont's results of operations or financial position would have
been had the Transactions occurred on the dates indicated, nor do
they purport to project the results of operations or financial
position for any future period or as of any future date.
Non-GAAP Financial Measures
This earnings release
includes information that does not conform to accounting principles
generally accepted in the United States
of America ("U.S. GAAP") and are considered non-GAAP
measures. Management uses these measures internally for planning,
forecasting and evaluating the performance of the Company,
including allocating resources. DuPont's management believes these
non-GAAP financial measures are useful to investors because they
provide additional information related to the ongoing performance
of DuPont to offer a more meaningful comparison related to future
results of operations. These non-GAAP financial measures supplement
disclosures prepared in accordance with U.S. GAAP, and should not
be viewed as an alternative to U.S. GAAP. Furthermore, such
non-GAAP measures may not be consistent with similar measures
provided or used by other companies. Reconciliations for these
non-GAAP measures to U.S. GAAP are provided in the Selected
Financial Information and Non-GAAP Measures starting on page 12.
Non-GAAP measures included in this release are defined as
follows:
Pro forma adjusted earnings per common share from continuing
operations - diluted, is defined as pro forma earnings per common
share from continuing operations - diluted, excluding the after-tax
impact of significant items, after-tax impact of amortization
expense associated with intangibles acquired as part of the Merger,
after-tax impact of non-operating pension / other post employment
benefits ("OPEB") / charges and the after-tax impact of costs
historically allocated to the materials science and agriculture
businesses that did not meet the criteria to be recorded as
discontinued operations. Although amortization of intangibles
acquired as part of the Merger is excluded from these non-GAAP
measures, management believes it is important for investors to
understand that such intangible assets contribute to revenue
generation. Amortization of intangible assets that relate to past
acquisitions will recur in future periods until such intangible
assets have been fully amortized. Any future acquisitions may
result in amortization of additional intangible assets.
Adjusted earnings per common share from continuing operations -
diluted, is defined as earnings per common share from continuing
operations - diluted, excluding the after-tax impact of significant
items, after-tax impact of amortization expense associated with
intangibles acquired as part of the Merger and the after-tax impact
of non-operating pension / other post employment benefits
("OPEB")/charges. Although amortization of intangibles acquired as
part of the Merger intangible assets is excluded from these
non-GAAP measures, management believes it is important for
investors to understand that such intangible assets contribute to
revenue generation. Amortization of intangible assets that relate
to past acquisitions will recur in future periods until such
intangible assets have been fully amortized. Any future
acquisitions may result in amortization of additional intangible
assets.
Pro forma operating EBITDA, is defined as earnings (i.e. pro
forma income (loss) from continuing operations before income taxes)
before interest, depreciation, amortization, non-operating pension
/ OPEB benefits / charges, and foreign exchange gains / losses,
excluding the impact of costs historically allocated to the
materials science and agriculture businesses that did not meet the
criteria to be recorded as discontinued operations and excluding
significant items.
Operating EBITDA, is defined as earnings (i.e. income (loss)
from continuing operations before income taxes) before interest,
depreciation, amortization, non-operating pension / OPEB benefits /
charges, and foreign exchange gains / losses, adjusted for
significant items.
Organic Sales is defined as net sales excluding the impacts of
currency and portfolio.
(1) Adjusted EPS, pro forma adjusted EPS, operating EBITDA and
pro forma operating EBITDA are non-GAAP measures. See page 7
for further discussion.
DuPont de Nemours,
Inc.
Consolidated Statements of Operations
|
|
In millions, except
per share amounts (Unaudited)
|
Three Months
Ended
September 30,
|
Nine Months
Ended
September 30,
|
2019
|
2018
|
2019
|
2018
|
Net sales
|
$
|
5,426
|
|
$
|
5,683
|
|
$
|
16,308
|
|
$
|
17,137
|
|
Cost of
sales
|
3,531
|
|
3,770
|
|
10,648
|
|
11,660
|
|
Research and
development expenses
|
225
|
|
264
|
|
724
|
|
808
|
|
Selling, general and
administrative expenses
|
645
|
|
731
|
|
2,013
|
|
2,301
|
|
Amortization of
intangibles
|
247
|
|
256
|
|
755
|
|
787
|
|
Restructuring and
asset related charges - net
|
82
|
|
11
|
|
290
|
|
110
|
|
Goodwill impairment
charges
|
—
|
|
—
|
|
1,175
|
|
—
|
|
Integration and
separation costs
|
191
|
|
519
|
|
1,149
|
|
1,312
|
|
Equity in earnings of
nonconsolidated affiliates
|
43
|
|
45
|
|
132
|
|
156
|
|
Sundry income
(expense) - net
|
79
|
|
(9)
|
|
144
|
|
(25)
|
|
Interest
expense
|
177
|
|
—
|
|
493
|
|
—
|
|
Income (loss) from
continuing operations before income taxes
|
450
|
|
168
|
|
(663)
|
|
290
|
|
Provision for income
taxes on continuing operations
|
78
|
|
37
|
|
142
|
|
201
|
|
Income (loss) from
continuing operations, net of tax
|
372
|
|
131
|
|
(805)
|
|
89
|
|
Income from
discontinued operations, net of tax
|
5
|
|
408
|
|
1,217
|
|
3,391
|
|
Net income
|
377
|
|
539
|
|
412
|
|
3,480
|
|
Net income
attributable to noncontrolling interests
|
5
|
|
38
|
|
90
|
|
117
|
|
Net income available
for DuPont common stockholders
|
$
|
372
|
|
$
|
501
|
|
$
|
322
|
|
$
|
3,363
|
|
|
Per common share
data:
|
|
|
|
|
Earnings (Loss) per
common share from continuing operations - basic
|
$
|
0.49
|
|
$
|
0.15
|
|
$
|
(1.10)
|
|
$
|
0.06
|
|
Earnings per common
share from discontinued operations - basic
|
0.01
|
|
0.50
|
|
1.53
|
|
4.29
|
|
Earnings per common
share - basic
|
$
|
0.50
|
|
$
|
0.65
|
|
$
|
0.43
|
|
$
|
4.35
|
|
Earnings (Loss) per
common share from continuing operations - diluted
|
$
|
0.49
|
|
$
|
0.15
|
|
$
|
(1.10)
|
|
$
|
0.06
|
|
Earnings per common
share from discontinued operations - diluted
|
0.01
|
|
0.50
|
|
1.53
|
|
4.26
|
|
Earnings per common
share - diluted
|
$
|
0.50
|
|
$
|
0.65
|
|
$
|
0.43
|
|
$
|
4.32
|
|
|
Weighted-average
common shares outstanding - basic
|
745.5
|
|
765.4
|
|
748.2
|
|
769.1
|
|
Weighted-average
common shares outstanding - diluted
|
747.7
|
|
770.4
|
|
748.2
|
|
774.4
|
|
DuPont de Nemours,
Inc.
Condensed Consolidated Balance Sheets
|
|
In millions, except
per share amounts (Unaudited)
|
Sept 30,
2019
|
Dec 30,
2018
|
Assets
|
|
|
Current
Assets
|
|
|
Cash and cash
equivalents
|
$
|
2,107
|
|
$
|
8,548
|
|
Marketable
securities
|
6
|
|
29
|
|
Accounts and notes
receivable - net
|
3,962
|
|
3,391
|
|
Inventories
|
4,306
|
|
4,107
|
|
Other current
assets
|
307
|
|
305
|
|
Assets of discontinued
operations
|
—
|
|
110,275
|
|
Total current
assets
|
10,688
|
|
126,655
|
|
Investments
|
|
|
Investments in
nonconsolidated affiliates
|
1,670
|
|
1,745
|
|
Other
investments
|
28
|
|
28
|
|
Noncurrent
receivables
|
35
|
|
47
|
|
Total
investments
|
1,733
|
|
1,820
|
|
Property, plant and
equipment - net of accumulated depreciation (September 30, 2019 -
$4,822; December 31,
2018 - $4,199)
|
9,699
|
|
9,917
|
|
Other
Assets
|
|
|
Goodwill
|
32,935
|
|
34,496
|
|
Other intangible
assets
|
13,769
|
|
14,655
|
|
Deferred income tax
assets
|
231
|
|
178
|
|
Deferred charges and
other assets
|
1,064
|
|
134
|
|
Total other
assets
|
47,999
|
|
49,463
|
|
Total
Assets
|
$
|
70,119
|
|
$
|
187,855
|
|
Liabilities and
Equity
|
|
|
Current
Liabilities
|
|
|
Short-term borrowings
and finance lease obligations
|
$
|
1,975
|
|
$
|
15
|
|
Accounts
payable
|
2,944
|
|
2,619
|
|
Income taxes
payable
|
148
|
|
115
|
|
Accrued and other
current liabilities
|
1,549
|
|
1,129
|
|
Liabilities of
discontinued operations
|
—
|
|
69,434
|
|
Total current
liabilities
|
6,616
|
|
73,312
|
|
Long-Term
Debt
|
15,610
|
|
12,624
|
|
Other Noncurrent
Liabilities
|
|
|
Deferred income tax
liabilities
|
3,474
|
|
3,912
|
|
Pension and other post
employment benefits - noncurrent
|
1,050
|
|
1,343
|
|
Other noncurrent
obligations
|
1,457
|
|
764
|
|
Total other noncurrent liabilities
|
5,981
|
|
6,019
|
|
Total
Liabilities
|
$
|
28,207
|
|
$
|
91,955
|
|
Commitments and
contingent liabilities
|
|
|
Stockholders'
Equity
|
|
|
Common stock
(authorized 1,666,666,667 shares of $0.01 par value each;
issued 2019:
742,678,900 shares; 2018: 784,143,433 shares)
|
7
|
|
8
|
|
Additional paid-in
capital
|
51,155
|
|
81,976
|
|
(Accumulated deficit)
Retained earnings
|
(8,289)
|
|
30,257
|
|
Accumulated other
comprehensive loss
|
(1,529)
|
|
(12,394)
|
|
Unearned ESOP
shares
|
—
|
|
(134)
|
|
Treasury stock at cost
(2019: 0 shares; 2018: 27,817,518 shares)
|
—
|
|
(5,421)
|
|
Total DuPont
stockholders' equity
|
41,344
|
|
94,292
|
|
Noncontrolling
interests
|
568
|
|
1,608
|
|
Total
equity
|
41,912
|
|
95,900
|
|
Total Liabilities and
Equity
|
$
|
70,119
|
|
$
|
187,855
|
|
DuPont de Nemours,
Inc.
Pro Forma Consolidated Statements of Operations
|
|
In millions, except
per share amounts (Unaudited)
|
Three Months
Ended
|
Nine Months
Ended
|
Sept 30,
2019
|
Sept 30,
2018
|
Sept 30,
2019
|
Sept 30,
2018
|
As
Reported
|
Pro Forma
1
|
Pro Forma
1
|
Pro Forma
1
|
Net sales
|
$
|
5,426
|
|
$
|
5,683
|
|
$
|
16,308
|
|
$
|
17,137
|
|
Cost of
sales
|
3,531
|
|
3,789
|
|
10,670
|
|
11,715
|
|
Research and
development expenses
|
225
|
|
264
|
|
724
|
|
808
|
|
Selling, general and
administrative expenses
|
645
|
|
731
|
|
2,013
|
|
2,301
|
|
Amortization of
intangibles
|
247
|
|
256
|
|
755
|
|
787
|
|
Restructuring and
asset related charges - net
|
82
|
|
11
|
|
290
|
|
110
|
|
Goodwill impairment
charges
|
—
|
|
—
|
|
1,175
|
|
—
|
|
Integration and
separation costs
|
191
|
|
385
|
|
976
|
|
950
|
|
Equity in earnings of
nonconsolidated affiliates
|
43
|
|
45
|
|
132
|
|
156
|
|
Sundry income
(expense) - net
|
79
|
|
(9)
|
|
144
|
|
(25)
|
|
Interest
expense
|
177
|
|
171
|
|
522
|
|
513
|
|
Income (loss) from
continuing operations before income taxes
|
450
|
|
112
|
|
(541)
|
|
84
|
|
Provision for income
taxes on continuing operations
|
78
|
|
24
|
|
172
|
|
157
|
|
Income (loss) from
continuing operations, net of tax
|
372
|
|
88
|
|
(713)
|
|
(73)
|
|
Net income
attributable to noncontrolling interests from continuing
operations
|
5
|
|
15
|
|
18
|
|
26
|
|
Net income (loss)
from continuing operations available for DuPont common
stockholders
|
$
|
367
|
|
$
|
73
|
|
$
|
(731)
|
|
$
|
(99)
|
|
|
|
|
|
|
Per common share
data:
|
|
|
|
|
Earnings (Loss) per
common share from continuing operations - basic
|
$
|
0.49
|
|
$
|
0.09
|
|
$
|
(0.98)
|
|
$
|
(0.15)
|
|
Earnings (Loss) per
common share from continuing operations - diluted
|
$
|
0.49
|
|
$
|
0.09
|
|
$
|
(0.98)
|
|
$
|
(0.15)
|
|
|
|
|
|
|
Weighted-average
common shares outstanding - basic
|
745.5
|
|
765.4
|
|
748.2
|
|
769.1
|
|
Weighted-average
common shares outstanding - diluted
|
747.7
|
|
770.4
|
|
748.2
|
|
774.4
|
|
1.
|
Refer to pages 16 and
17 for additional detail on the pro forma adjustments included in
the pro forma interim Consolidated Statements of
Operations.
|
DuPont de Nemours,
Inc.
Net Sales by Segment and Geographic Region
|
|
Net Sales by
Segment and Geographic Region
|
Three Months
Ended
|
Nine Months
Ended
|
In millions
(Unaudited)
|
Sept 30,
2019
|
Sept 30,
2018
|
Sept 30,
2019
|
Sept 30,
2018
|
As
Reported
|
Pro
Forma
|
Pro
Forma
|
Pro
Forma
|
Electronics &
Imaging
|
$
|
934
|
|
$
|
940
|
|
$
|
2,617
|
|
$
|
2,725
|
|
Nutrition &
Biosciences
|
1,525
|
|
1,533
|
|
4,618
|
|
4,731
|
|
Transportation &
Industrial
|
1,209
|
|
1,357
|
|
3,795
|
|
4,152
|
|
Safety &
Construction
|
1,327
|
|
1,364
|
|
3,951
|
|
4,000
|
|
Non-Core
|
431
|
|
489
|
|
1,327
|
|
1,529
|
|
Total
|
$
|
5,426
|
|
$
|
5,683
|
|
$
|
16,308
|
|
$
|
17,137
|
|
U.S. &
Canada
|
$
|
1,822
|
|
$
|
1,814
|
|
$
|
5,424
|
|
$
|
5,457
|
|
EMEA
1
|
1,227
|
|
1,362
|
|
3,898
|
|
4,319
|
|
Asia
Pacific
|
2,057
|
|
2,164
|
|
6,036
|
|
6,375
|
|
Latin
America
|
320
|
|
343
|
|
950
|
|
986
|
|
Total
|
$
|
5,426
|
|
$
|
5,683
|
|
$
|
16,308
|
|
$
|
17,137
|
|
Net Sales Variance
by Segment
and Geographic Region
|
Three Months Ended
September 30, 2019
|
|
Local Price
&
Product Mix
|
Volume
|
Total
Organic
|
Currency
|
Portfolio /
Other
|
Total
|
|
Percent change from
prior year (Unaudited)
|
|
Electronics &
Imaging
|
(1)
|
%
|
—
|
%
|
(1)
|
%
|
—
|
%
|
—
|
%
|
(1)
|
%
|
|
Nutrition &
Biosciences
|
1
|
|
1
|
|
2
|
|
(2)
|
|
(1)
|
|
(1)
|
|
|
Transportation &
Industrial
|
1
|
|
(11)
|
|
(10)
|
|
(1)
|
|
—
|
|
(11)
|
|
|
Safety &
Construction
|
3
|
|
(1)
|
|
2
|
|
(1)
|
|
(4)
|
|
(3)
|
|
|
Non-Core
|
2
|
|
(10)
|
|
(8)
|
|
(1)
|
|
(3)
|
|
(12)
|
|
|
Total
|
1
|
%
|
(3)
|
%
|
(2)
|
%
|
(2)
|
%
|
(1)
|
%
|
(5)
|
%
|
|
U.S. &
Canada
|
2
|
%
|
(2)
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
|
EMEA
1
|
1
|
|
(4)
|
|
(3)
|
|
(3)
|
|
(4)
|
|
(10)
|
|
|
Asia
Pacific
|
1
|
|
(5)
|
|
(4)
|
|
(1)
|
|
—
|
|
(5)
|
|
|
Latin
America
|
—
|
|
(4)
|
|
(4)
|
|
(2)
|
|
(1)
|
|
(7)
|
|
|
Total
|
1
|
%
|
(3)
|
%
|
(2)
|
%
|
(2)
|
%
|
(1)
|
%
|
(5)
|
%
|
|
Net Sales Variance
by Segment
and Geographic Region
|
Nine Months Ended
September 30, 2019
|
|
Local Price
&
Product Mix
|
Volume
|
Total
Organic
|
Currency
|
Portfolio /
Other
|
Total
|
|
Percent change from
prior year (Unaudited)
|
|
Electronics &
Imaging
|
—
|
%
|
(3)
|
%
|
(3)
|
%
|
(1)
|
%
|
—
|
%
|
(4)
|
%
|
|
Nutrition &
Biosciences
|
1
|
|
—
|
|
1
|
|
(2)
|
|
(1)
|
|
(2)
|
|
|
Transportation &
Industrial
|
4
|
|
(10)
|
|
(6)
|
|
(3)
|
|
—
|
|
(9)
|
|
|
Safety &
Construction
|
4
|
|
1
|
|
5
|
|
(2)
|
|
(4)
|
|
(1)
|
|
|
Non-Core
|
(1)
|
|
(10)
|
|
(11)
|
|
(1)
|
|
(1)
|
|
(13)
|
|
|
Total
|
2
|
%
|
(4)
|
%
|
(2)
|
%
|
(2)
|
%
|
(1)
|
%
|
(5)
|
%
|
|
U.S. &
Canada
|
1
|
%
|
(2)
|
%
|
(1)
|
%
|
—
|
%
|
—
|
%
|
(1)
|
%
|
|
EMEA
1
|
3
|
|
(4)
|
|
(1)
|
|
(5)
|
|
(4)
|
|
(10)
|
|
|
Asia
Pacific
|
2
|
|
(5)
|
|
(3)
|
|
(2)
|
|
—
|
|
(5)
|
|
|
Latin
America
|
3
|
|
(3)
|
|
—
|
|
(3)
|
|
(1)
|
|
(4)
|
|
|
Total
|
2
|
%
|
(4)
|
%
|
(2)
|
%
|
(2)
|
%
|
(1)
|
%
|
(5)
|
%
|
|
1. Europe, Middle
East and Africa.
|
DuPont de Nemours,
Inc.
|
Selected Financial
Information and Non-GAAP Measures
|
|
Operating
EBITDA by Segment
|
Three Months
Ended
|
Nine Months
Ended
|
|
Sept 30,
2019
|
Sept 30,
2018
|
Sept 30,
2019
|
Sept 30,
2018
|
In millions
(Unaudited)
|
As
Reported
|
Pro
Forma
|
Pro
Forma
|
Pro
Forma
|
Electronics &
Imaging
|
$
|
320
|
|
$
|
322
|
|
$
|
854
|
|
$
|
889
|
|
Nutrition &
Biosciences
|
360
|
|
364
|
|
1,104
|
|
1,115
|
|
Transportation &
Industrial
|
306
|
|
383
|
|
1,036
|
|
1,174
|
|
Safety &
Construction
|
352
|
|
350
|
|
1,108
|
|
972
|
|
Non-Core
|
88
|
|
86
|
|
281
|
|
319
|
|
Corporate
|
(25)
|
|
(50)
|
|
(130)
|
|
(186)
|
|
Total
|
$
|
1,401
|
|
$
|
1,455
|
|
$
|
4,253
|
|
$
|
4,283
|
|
|
|
|
|
|
Equity in Earnings
of Nonconsolidated Affiliates by Segment
|
Three Months
Ended
|
Nine Months
Ended
|
|
Sept 30,
2019
|
Sept 30,
2018
|
Sept 30,
2019
|
Sept 30,
2018
|
In millions
(Unaudited)
|
As
Reported
|
Pro
Forma
|
Pro
Forma
|
Pro
Forma
|
Electronics &
Imaging
|
$
|
10
|
|
$
|
7
|
|
$
|
18
|
|
$
|
20
|
|
Nutrition &
Biosciences
|
—
|
|
—
|
|
—
|
|
1
|
|
Transportation &
Industrial
|
1
|
|
1
|
|
3
|
|
4
|
|
Safety &
Construction
|
7
|
|
6
|
|
22
|
|
19
|
|
Non-Core
|
25
|
|
31
|
|
89
|
|
112
|
|
Total
|
$
|
43
|
|
$
|
45
|
|
$
|
132
|
|
$
|
156
|
|
|
|
|
|
|
Reconciliation of
"Income (loss) from continuing operations, net of
tax" to "Operating EBITDA"
|
Three Months
Ended
|
Nine Months
Ended
|
|
Sept 30,
2019
|
Sept 30,
2018
|
Sept 30,
2019
|
Sept 30,
2018
|
In millions
(Unaudited)
|
As
Reported
|
Pro
Forma
|
Pro
Forma
|
Pro
Forma
|
Income (loss) from
continuing operations, net of tax
|
$
|
372
|
|
$
|
88
|
|
$
|
(713)
|
|
$
|
(73)
|
|
+ Provision for
income taxes on continuing operations
|
78
|
|
24
|
|
172
|
|
157
|
|
Income (loss) from
continuing operations before income taxes
|
$
|
450
|
|
$
|
112
|
|
$
|
(541)
|
|
$
|
84
|
|
+ Depreciation and
amortization
|
499
|
|
542
|
|
1,533
|
|
1,644
|
|
- Interest
income 1
|
1
|
|
8
|
|
50
|
|
29
|
|
+ Interest
expense
|
177
|
|
171
|
|
522
|
|
513
|
|
- Non-operating
pension/OPEB benefit 1
|
21
|
|
24
|
|
60
|
|
79
|
|
- Foreign
exchange (losses) gains, net 1
|
(23)
|
|
(26)
|
|
(101)
|
|
(98)
|
|
+ Costs historically
allocated to the materials science and agriculture
businesses 2
|
—
|
|
234
|
|
256
|
|
842
|
|
- Adjusted
significant items
|
(274)
|
|
(402)
|
|
(2,492)
|
|
(1,210)
|
|
Operating
EBITDA
|
$
|
1,401
|
|
$
|
1,455
|
|
$
|
4,253
|
|
$
|
4,283
|
|
|
|
1.
|
Included in "Sundry
income (expense) - net."
|
2.
|
Costs previously
allocated to the materials science and agriculture businesses that
did not meet the definition of expenses related to discontinued
operations in
accordance with ASC 205.
|
DuPont de Nemours,
Inc.
Selected Financial Information and Non-GAAP Measures
|
|
Significant Items
Impacting Results for the Three Months Ended September 30,
2019
|
In millions, except
per share amounts (Unaudited)
|
Pretax
1
|
Net Income
2
|
EPS
3
|
Income Statement
Classification
|
Reported results
(GAAP)
|
$
|
450
|
|
$
|
367
|
|
$
|
0.49
|
|
|
Less: Significant
items
|
|
|
|
|
Integration and
separation costs 4
|
(191)
|
|
(147)
|
|
(0.19)
|
|
Integration and
separation costs
|
Restructuring and
asset related charges - net 5
|
(83)
|
|
(65)
|
|
(0.09)
|
|
Restructuring and
asset related charges
- net
|
Total significant
items
|
$
|
(274)
|
|
$
|
(212)
|
|
$
|
(0.28)
|
|
|
Less: Merger-related
amortization of intangibles
|
(199)
|
|
(155)
|
|
(0.21)
|
|
Amortization of
intangibles
|
Less: Non-op pension
/ OPEB benefit
|
21
|
|
18
|
|
0.02
|
|
Sundry income
(expense) - net
|
Adjusted results
(non-GAAP)
|
$
|
902
|
|
$
|
716
|
|
$
|
0.96
|
|
|
Significant Items
Impacting Pro Forma Results for the Three Months Ended September
30, 2018
|
In millions, except
per share amounts (Unaudited)
|
Pretax
1
|
Net Income
2
|
EPS
3
|
Income Statement
Classification
|
Pro forma results
(GAAP)
|
$
|
112
|
|
$
|
73
|
|
$
|
0.09
|
|
|
Less: Significant
items
|
|
|
|
|
Integration and
separation costs 4
|
(385)
|
|
(330)
|
|
(0.42)
|
|
Integration and
separation costs
|
Restructuring and
asset related charges - net 5
|
(11)
|
|
(5)
|
|
(0.01)
|
|
Restructuring and
asset related charges
- net
|
Net loss on
divestitures and changes in joint
venture ownership 6
|
(6)
|
|
(6)
|
|
(0.01)
|
|
Sundry income
(expense) - net
|
Income tax related
item 7
|
—
|
|
9
|
|
0.01
|
|
Provision for income
taxes on
continuing operations
|
Total significant
items
|
$
|
(402)
|
|
$
|
(332)
|
|
$
|
(0.43)
|
|
|
Less: Merger-related
amortization of intangibles
|
(202)
|
|
(158)
|
|
(0.21)
|
|
Amortization of
intangibles
|
Less: Non-op pension
/ OPEB benefit
|
24
|
|
20
|
|
0.03
|
|
Sundry income
(expense) - net
|
Less: Costs
historically allocated to the materials
science and agriculture businesses 8
|
(234)
|
|
(180)
|
|
(0.24)
|
|
Cost of sales;
Research and
development expense; Selling, general
and administrative expenses
|
Adjusted pro forma
results (non-GAAP)
|
$
|
926
|
|
$
|
723
|
|
$
|
0.94
|
|
|
1.
|
Income from
continuing operations before income taxes.
|
2.
|
Net income from
continuing operations available for DuPont common stockholders. The
income tax effect on significant items was calculated based
upon the enacted tax laws and statutory income tax rates applicable
in the tax jurisdiction(s) of the underlying non-GAAP
adjustment.
|
3.
|
Earnings per common
share from continuing operations - diluted.
|
4.
|
Integration and
separation costs related to post-Merger integration activities and
activities related to the Distributions.
|
5.
|
Includes Board
approved restructuring plans and asset related charges, which
include other asset impairments.
|
6.
|
Reflects a pretax
loss for post-closing adjustments related to the Dow Silicones
ownership restructure.
|
7.
|
Includes a $91
million benefit related to the effects of U.S. Tax Reform, offset
by a a tax valuation allowance recorded against the net deferred
tax
asset position of a Brazilian legal entity ($49 million expense)
and tax charges associated with the Distributions ($33 million
expense).
|
8.
|
Costs previously
allocated to the materials science and agriculture businesses that
did not meet the definition of expenses related to discontinued
operations in accordance with ASC 205.
|
DuPont de Nemours,
Inc.
Selected Financial Information and Non-GAAP Measures
|
|
Significant Items
Impacting Pro Forma Results for the Nine Months Ended September 30,
2019
|
In millions, except
per share amounts (Unaudited)
|
Pretax
1
|
Net Income
2
|
EPS
3
|
Income Statement
Classification
|
Pro forma results
(GAAP)
|
$
|
(541)
|
|
$
|
(731)
|
|
$
|
(0.98)
|
|
|
Less: Significant
items
|
|
|
|
|
Integration and
separation costs 4
|
(976)
|
|
(747)
|
|
(1.00)
|
|
Integration and
separation costs
|
Restructuring and
asset related charges - net 5
|
(293)
|
|
(225)
|
|
(0.30)
|
|
Restructuring and
asset related charges
- net
|
Goodwill impairment
charge
|
(1,175)
|
|
(1,173)
|
|
(1.57)
|
|
Goodwill impairment
charge
|
Income tax related
item 6
|
(48)
|
|
(105)
|
|
(0.14)
|
|
Sundry income
(expense) - net;
Provision for income
taxes on
continuing operations
|
Total significant
items
|
$
|
(2,492)
|
|
$
|
(2,250)
|
|
$
|
(3.01)
|
|
|
Less: Merger-related
amortization of intangibles
|
(598)
|
|
(469)
|
|
(0.63)
|
|
Amortization of
Intangibles
|
Less: Non-op pension
/ OPEB benefit
|
60
|
|
55
|
|
0.07
|
|
Sundry income
(expense) - net
|
Less: Costs
historically allocated to the materials
science and agriculture businesses 7
|
(256)
|
|
(197)
|
|
(0.26)
|
|
Cost of sales;
Research and
development expense; Selling, general
and administrative expenses
|
Adjusted pro forma
results (non-GAAP)
|
$
|
2,745
|
|
$
|
2,130
|
|
$
|
2.85
|
|
|
Significant Items
Impacting Pro Forma Results for the Nine Months Ended September 30,
2018
|
In millions, except
per share amounts (Unaudited)
|
Pretax
1
|
Net Income
2
|
EPS
3
|
Income Statement
Classification
|
Pro forma results
(GAAP)
|
$
|
84
|
|
$
|
(99)
|
|
$
|
(0.15)
|
|
|
Less: Significant
items
|
|
|
|
|
Integration and
separation costs 4
|
(950)
|
|
(789)
|
|
(1.02)
|
|
Integration and
separation costs
|
Restructuring and
asset related charges - net 5
|
(110)
|
|
(85)
|
|
(0.11)
|
|
Restructuring and
asset related charges
- net
|
Merger-related
inventory step-up amortization 8
|
(73)
|
|
(62)
|
|
(0.08)
|
|
Cost of
sales
|
Net loss on
divestitures and changes in joint
venture ownership
|
(27)
|
|
(22)
|
|
(0.03)
|
|
Sundry income
(expense) - net
|
Income tax related
items 9
|
(50)
|
|
(136)
|
|
(0.17)
|
|
Sundry income
(expense) - net;
Provision for income
taxes on
continuing operations
|
Total significant
items
|
$
|
(1,210)
|
|
$
|
(1,094)
|
|
$
|
(1.41)
|
|
|
Less: Merger-related
amortization of intangibles
|
(617)
|
|
(484)
|
|
(0.63)
|
|
Amortization of
Intangibles
|
Less: Non-op pension
/ OPEB benefit
|
79
|
|
64
|
|
0.09
|
|
Sundry income
(expense) - net
|
Less: Costs
historically allocated to the materials
science and agriculture businesses 7
|
(842)
|
|
(648)
|
|
(0.84)
|
|
Cost of sales;
Research and
development expense; Selling, general
and administrative expenses
|
Adjusted pro forma
results (non-GAAP)
|
$
|
2,674
|
|
$
|
2,063
|
|
$
|
2.64
|
|
|
1.
|
(Loss) Income from
continuing operations before income taxes.
|
2.
|
Net (loss) income
from continuing operations available for DuPont common
stockholders. The income tax effect on significant items was
calculated based
upon the enacted tax laws and statutory income tax rates applicable
in the tax jurisdiction(s) of the underlying non-GAAP
adjustment.
|
3.
|
(Loss) Earnings per
common share from continuing operations - diluted.
|
4.
|
Integration and
separation costs related to post-Merger integration activities and
activities related to the Distributions.
|
5.
|
Includes Board
approved restructuring plans and asset related charges, which
includes other asset impairments.
|
6.
|
Includes a $48
million charge in "Sundry income (expense) - net" which reflects a
reduction in gross proceeds from lower withholding taxes related to
a
prior year legal settlement.
|
7.
|
Costs previously
allocated to the materials science and agriculture businesses that
did not meet the definition of expenses related to discontinued
operations in accordance with ASC 205.
|
8.
|
Includes the fair
value step-up in Historical DuPont's inventories as a result of the
Merger and the acquisition of FMC Corporation's Health and
Nutrition
business in November 2017.
|
9.
|
Includes a foreign
exchange loss related to adjustments to Historical EID's foreign
currency exchange contracts as a result of U.S. tax
reform.
|
DuPont de Nemours,
Inc.
Selected Financial Information and Non-GAAP Measures
|
|
Reconciliation of
Adjusted Earnings Per Share Outlook
|
The reconciliation
below represents the Company's outlook of pro forma earnings per
common share from continuing operations - diluted (GAAP) to pro
forma adjusted earnings per common share from continuing operations
- diluted (non-GAAP). The U.S. GAAP Outlook in the table below are
forward looking and as such are inherently difficult to predict and
estimate. The U.S. GAAP Outlook do not include estimates of certain
possible future events as the Company is not able to predict with
reasonable certainty the occurrence, timing or ultimate outcome of
certain future events, including contingent liabilities related to
litigation, environmental and indemnifications matters; asset
sales, mergers, acquisitions, divestitures or other portfolio
related actions; impairments and discrete tax items, that
could have a material impact on U.S. GAAP results for the Outlook
periods.
|
|
Adjusted Earnings
Per Share Outlook
|
|
Twelve Months
Ended
Dec 31,
2019
|
Twelve Months
Ended
Dec 31,
2018
|
|
|
Outlook Pro
Forma 1
|
Pro Forma
2
|
(Loss) Earnings per
common share from continuing operations - diluted (GAAP)
|
|
$ (0.36)
- (0.26)
|
$0.21
|
Less: Significant
items benefit (charge)
|
|
(3.13) - (3.08)
3
|
(2.07)
|
Less: Merger-related
amortization of intangibles 4
|
|
(0.84)
|
(0.83)
|
Less: Non-op pension
/ OPEB benefit
|
|
0.10
|
0.10
|
Less: Costs
historically allocated to the materials science and
agriculture
businesses
|
|
(0.26)
|
(1.04)
|
Adjusted earnings per
share from continuing operations - diluted (non - GAAP)
|
|
$ 3.77 -
3.82
|
$4.05
|
1.
|
Amounts represent the
Company's best estimate.
|
2.
|
As reflected in the
Company's Form 8-K filed with the SEC on June 7, 2019.
|
3.
|
The Outlook for the
full year 2019 includes the net charges for significant items
recorded by the Company through September
30, 2019. In addition, the Outlook for the full year includes the
Company's best estimate of integration and separation costs
related to the Merger and Distributions for the fourth quarter of
2019.
|
4.
|
Merger related
amortization of intangibles equals the amortization of Historical
EID intangibles.
|
DuPont de Nemours,
Inc.
Supplemental Unaudited Pro Forma Combined Financial
Information
|
|
Unaudited Pro
Forma Combined Statement of Income
|
Three Months Ended
September 30, 2018
|
In millions, except
per share amounts
|
DuPont
1
|
Pro Forma
Adjustments2
|
Pro
Forma
|
Net sales
|
$
|
5,683
|
|
$
|
—
|
|
$
|
5,683
|
|
Cost of
sales
|
3,770
|
|
19
|
|
3,789
|
|
Research and
development expenses
|
264
|
|
—
|
|
264
|
|
Selling, general and
administrative expenses
|
731
|
|
—
|
|
731
|
|
Amortization of
intangibles
|
256
|
|
—
|
|
256
|
|
Restructuring and
asset related charges - net
|
11
|
|
—
|
|
11
|
|
Integration and
separation costs
|
519
|
|
(134)
|
|
385
|
|
Equity in earnings of
nonconsolidated affiliates
|
45
|
|
—
|
|
45
|
|
Sundry income
(expense) - net
|
(9)
|
|
—
|
|
(9)
|
|
Interest
expense
|
—
|
|
171
|
|
171
|
|
Income from
continuing operations before income taxes
|
168
|
|
(56)
|
|
112
|
|
Provision for income
taxes on continuing operations
|
37
|
|
(13)
|
|
24
|
|
Income from
continuing operations, net of tax
|
131
|
|
(43)
|
|
88
|
|
Net income
attributable to noncontrolling interests from continuing
operations
|
15
|
|
—
|
|
15
|
|
Net income from
continuing operations attributable to DuPont
|
$
|
116
|
|
$
|
(43)
|
|
$
|
73
|
|
|
|
|
|
Per common share
data:
|
|
|
|
Earnings per common
share from continuing operations - basic
|
$
|
0.15
|
|
|
$
|
0.09
|
|
Earnings per common
share from continuing operations - diluted
|
$
|
0.15
|
|
|
$
|
0.09
|
|
|
|
|
|
Weighted-average
common shares outstanding - basic
|
765.4
|
|
|
765.4
|
|
Weighted-average
common shares outstanding - diluted
|
770.4
|
|
|
770.4
|
|
1.
|
See the U.S. GAAP
interim Consolidated Statements of Operations.
|
2.
|
Certain pro forma
adjustments were made to illustrate the estimated effects of the
Transactions, assuming that the Transactions had
occurred on January 1, 2018. The pro forma adjustments are
consistent with those identified and disclosed in the Company's
Current
Report on Form 8-K filed with the SEC on June 7, 2019. The
adjustments include the impact to "Cost of sales" of different
pricing than
historical intercompany and intracompany practices related to
various supply agreements entered into in connection with the
Dow
Distribution, adjustments to "Integration and separation costs" to
eliminate one time transaction costs directly attributable to
the
Distributions, and adjustments to "Interest expense" to reflect the
impact of the Financings.
|
DuPont de Nemours,
Inc.
Supplemental Unaudited Pro Forma Combined Financial
Information
|
|
Unaudited Pro
Forma Combined
Statements of
Operations
|
Nine Months Ended
September 30,
|
2019
|
2018
|
In millions, except
per share amounts
|
DuPont
1
|
Pro Forma
Adjustments2
|
Pro
Forma
|
DuPont
1
|
Pro Forma
Adjustments2
|
Pro
Forma
|
Net sales
|
$
|
16,308
|
|
$
|
—
|
|
$
|
16,308
|
|
$
|
17,137
|
|
$
|
—
|
|
$
|
17,137
|
|
Cost of
sales
|
10,648
|
|
22
|
|
10,670
|
|
11,660
|
|
55
|
|
11,715
|
|
Research and
development expenses
|
724
|
|
—
|
|
724
|
|
808
|
|
—
|
|
808
|
|
Selling, general and
administrative expenses
|
2,013
|
|
—
|
|
2,013
|
|
2,301
|
|
—
|
|
2,301
|
|
Amortization of intangibles
|
755
|
|
—
|
|
755
|
|
787
|
|
—
|
|
787
|
|
Restructuring and
asset related charges - net
|
290
|
|
—
|
|
290
|
|
110
|
|
—
|
|
110
|
|
Goodwill impairment
charges
|
1,175
|
|
—
|
|
1,175
|
|
—
|
|
—
|
|
—
|
|
Integration and
separation costs
|
1,149
|
|
(173)
|
|
976
|
|
1,312
|
|
(362)
|
|
950
|
|
Equity in earnings of
nonconsolidated affiliates
|
132
|
|
—
|
|
132
|
|
156
|
|
—
|
|
156
|
|
Sundry income
(expense) - net
|
144
|
|
—
|
|
144
|
|
(25)
|
|
—
|
|
(25)
|
|
Interest
expense
|
493
|
|
29
|
|
522
|
|
—
|
|
513
|
|
513
|
|
(Loss) Income from
continuing operations before
income taxes
|
(663)
|
|
122
|
|
(541)
|
|
290
|
|
(206)
|
|
84
|
|
Provision for income
taxes on continuing
operations
|
142
|
|
30
|
|
172
|
|
201
|
|
(44)
|
|
157
|
|
(Loss) Income from
continuing operations, net of
tax
|
(805)
|
|
92
|
|
(713)
|
|
89
|
|
(162)
|
|
(73)
|
|
Net income
attributable to noncontrolling
interests from continuing operations
|
18
|
|
—
|
|
18
|
|
26
|
|
—
|
|
26
|
|
Net (loss) income
from continuing operations
attributable to DuPont
|
$
|
(823)
|
|
$
|
92
|
|
$
|
(731)
|
|
$
|
63
|
|
$
|
(162)
|
|
$
|
(99)
|
|
|
|
|
|
|
|
|
Per common share
data:
|
|
|
|
|
|
|
(Loss) Earnings per
common share from
continuing operations - basic
|
$
|
(1.10)
|
|
|
$
|
(0.98)
|
|
$
|
0.06
|
|
|
$
|
(0.15)
|
|
(Loss) Earnings per
common share from
continuing operations - diluted
|
$
|
(1.10)
|
|
|
$
|
(0.98)
|
|
$
|
0.06
|
|
|
$
|
(0.15)
|
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding -
basic
|
748.2
|
|
|
748.2
|
|
769.1
|
|
|
769.1
|
|
Weighted-average
common shares outstanding -
diluted
|
748.2
|
|
|
748.2
|
|
774.4
|
|
|
774.4
|
|
1.
|
See the U.S. GAAP
interim Consolidated Statements of Operations.
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2.
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Certain pro forma
adjustments were made to illustrate the estimated effects of the
Transactions, assuming that the Transactions had occurred on
January 1,
2018. The pro forma adjustments are consistent with those
identified and disclosed in the Company's Current Report on Form
8-K filed with the SEC on June 7,
2019. The adjustments include the impact to "Cost of sales" of
different pricing than historical intercompany and intracompany
practices related to various
supply agreements entered into in connection with the Dow
Distribution, adjustments to "Integration and separation costs" to
eliminate one time transaction
costs directly attributable to the Distributions, and adjustments
to "Interest expense" to reflect the impact of the
Financings
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SOURCE DuPont