WILMINGTON, Del., April 25, 2017 /PRNewswire/ --
First-Quarter Highlights
- GAAP1 earnings per share increased 9 percent to
$1.52 from $1.39 in prior year. Operating
earnings2 per share increased 30 percent to $1.64 from $1.26 in
prior year.
- Sales of $7.7 billion
increased 5 percent on a 4-percent benefit from volume and a
1-percent benefit from local price. Sales grew in most segments,
led by Agriculture, Performance Materials, and Electronics &
Communications.
- Agriculture sales increased 4 percent reflecting benefits
from local price and volume. Pricing growth was driven by
double-digit gains in Latin
America, the launch of new soybean varieties in North America and increased sunflower seed
sales in Europe. Volume growth was
driven by the change in timing of seed deliveries and increased
insecticide and sunflower seed volumes, partially offset by lower
expected corn acreage in North
America.
- Total company gross margin expanded by more than 80 basis
points. Segment operating margins expanded by about 250 basis
points, led by improvements in Electronics & Communications,
Performance Materials and Agriculture.
- Free cash flow3 improved over $200 million.
- DuPont expects first-half 2017 GAAP1 earnings per
share of about $2.42, a decrease of
about 5 percent versus prior year. First-half 2017 operating
earnings2 per share are expected to be
about $2.90, an increase of about 16
percent versus prior year.
DuPont (NYSE: DD), a science company that brings world-class,
innovative products, materials, and services to the global
marketplace, today announced first-quarter 2017 GAAP1
earnings of $1.52 per share and
operating earnings2 of $1.64 per share. Prior year
GAAP1 and operating earnings2 were
$1.39 per share and $1.26 per share, respectively. Refer to
Schedule B for details of significant items excluded from operating
earnings per share.
1
Generally Accepted Accounting Principles (GAAP)
|
2 See
schedules A, C, and D for definitions and reconciliations of
non-GAAP measures.
|
3 Free
cash flow is defined as cash used for operating activities less
purchases of property, plant and equipment. See schedule A
for reconciliation of non-GAAP measure.
|
First-quarter sales were $7.7
billion, up 5 percent versus prior year on a 4-percent
benefit from volume and a 1-percent benefit from local price.
Volume grew in almost all segments, led by Performance Materials,
Electronics & Communications and Agriculture. Agriculture
sales were positively impacted by the change in timing of seed
deliveries which benefitted first quarter sales by approximately
$140 million. This timing
change benefitted total company net sales by 2 percent in the
quarter.
"Our team delivered strong operational performance in the first
quarter, growing operating EPS by 30 percent," said Ed Breen, Chairman and CEO. "The strength of our
new product introductions and increased demand in key markets
together resulted in top-line increases in almost every
business. We also made significant progress on key milestones
in the merger with Dow, including receipt of conditional approval
from the European Commission and an agreement with FMC to divest
certain crop protection assets and acquire substantially all of its
Health & Nutrition segment. We continue to expect to close the
merger in August of this year and quickly begin working on the
500-plus projects already identified to deliver the targeted
$3 billion in cost synergies."
Global Consolidated Net Sales – 1st Quarter
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
|
|
March 31,
2017
|
|
Percent Change Due
to:
|
|
|
|
|
%
|
|
Local Price
and
|
|
|
|
|
|
Portfolio
/
|
|
|
$
|
|
Change
|
|
Product
Mix
|
|
Currency
|
|
Volume
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
U.S. & Canada
|
|
$
3,576
|
|
-
|
|
1
|
|
-
|
|
(1)
|
|
-
|
EMEA *
|
|
2,110
|
|
5
|
|
1
|
|
(3)
|
|
8
|
|
(1)
|
Asia
Pacific
|
|
1,451
|
|
13
|
|
(1)
|
|
(1)
|
|
16
|
|
(1)
|
Latin America
|
|
606
|
|
14
|
|
7
|
|
11
|
|
(3)
|
|
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Consolidated
Sales
|
$
7,743
|
|
5
|
|
1
|
|
-
|
|
4
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Europe,
Middle East & Africa
|
|
|
|
|
|
|
Segment Net Sales – 1st Quarter
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
|
March 31,
2017
|
|
Percent Change Due
to:
|
|
|
|
|
|
Local Price
and
|
|
|
|
|
|
Portfolio
/
|
|
$
|
|
% Change
|
|
Product
Mix
|
|
Currency
|
|
Volume
|
|
Other
|
(Dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
Agriculture
|
$
3,928
|
|
4
|
|
2
|
|
1
|
|
2
|
|
(1)
|
Electronics &
Communications
|
510
|
|
13
|
|
-
|
|
(1)
|
|
15
|
|
(1)
|
Industrial
Biosciences
|
368
|
|
5
|
|
2
|
|
(1)
|
|
4
|
|
-
|
Nutrition &
Health
|
789
|
|
(1)
|
|
-
|
|
(1)
|
|
-
|
|
-
|
Performance
Materials
|
1,368
|
|
10
|
|
-
|
|
(1)
|
|
11
|
|
-
|
Protection
Solutions
|
747
|
|
2
|
|
(2)
|
|
(1)
|
|
5
|
|
-
|
Other
|
33
|
|
|
|
|
|
|
|
|
|
|
Consolidated Net
Sales
|
7,743
|
|
5
|
|
1
|
|
-
|
|
4
|
|
-
|
Operating Earnings – 1st Quarter
|
|
|
|
|
Change vs.
2016
|
(Dollars in
millions)
|
1Q17
|
|
1Q16
|
|
$
|
|
%
|
Agriculture
|
$
1,236
|
|
$
1,101
|
|
$
135
|
|
12%
|
Electronics &
Communications
|
89
|
|
59
|
|
30
|
|
51%
|
Industrial
Biosciences
|
75
|
|
63
|
|
12
|
|
19%
|
Nutrition &
Health
|
121
|
|
104
|
|
17
|
|
16%
|
Performance
Materials
|
355
|
|
273
|
|
82
|
|
30%
|
Protection
Solutions
|
177
|
|
176
|
|
1
|
|
1%
|
Other
|
(62)
|
|
(59)
|
|
(3)
|
|
-5%
|
Total segment
operating earnings (4)
|
1,991
|
|
1,717
|
|
274
|
|
16%
|
|
|
|
|
|
|
|
|
Exchange gains
(losses) (5)
|
(59)
|
|
(121)
|
|
62
|
|
nm
|
Corporate expenses
(4)
|
(69)
|
|
(86)
|
|
17
|
|
-20%
|
Interest
expense
|
(84)
|
|
(92)
|
|
8
|
|
-9%
|
Operating earnings
before income taxes (2)
|
1,779
|
|
1,418
|
|
361
|
|
25%
|
Provision for income
taxes on operating earnings (2) (4)
|
(338)
|
|
(303)
|
|
(35)
|
|
|
Less: Net income
attributable to noncontrolling interests
|
8
|
|
6
|
|
2
|
|
|
Operating earnings
(2)
|
$
1,433
|
|
$
1,109
|
|
$
324
|
|
29%
|
|
|
|
|
|
|
|
|
Operating earnings
per share (2)
|
$1.64
|
|
$
1.26
|
|
$
0.38
|
|
30%
|
GAAP
(1)earnings per share
|
$1.52
|
|
$
1.39
|
|
$
0.13
|
|
9%
|
|
|
|
|
|
|
|
|
(4) See Schedules B
and C for listing of significant items.
|
|
|
|
|
|
|
|
|
(5) See Schedule D
for additional information on exchange gains and losses.
|
The following is a summary of business results for each of the
company's reportable segments comparing first quarter with the
prior year, unless otherwise noted.
Agriculture – First-quarter 2017 operating earnings of
$1,236 million increased $135 million, or 12 percent, on local price and
volume growth. Pricing growth was realized by double-digit
increases in Brazil driven by the
company's newest corn hybrids and increased sunflower seed sales in
Europe. Volume growth was driven by an approximately
$140 million benefit from the change
in timing of seed deliveries, increased insecticides and sunflower
seed sales partially offset by a decrease in expected corn acreage
in North America. Operating margins expanded by about 240
basis points.
Electronics & Communications – First-quarter
2017 operating earnings of $89
million increased $30 million,
or 51 percent, on volume growth and the absence of a $16 million prior year litigation expense.
Volume growth was driven by increased demand in consumer
electronics and semiconductor markets, as well as stronger
photovoltaic material sales. Operating earnings included a
gain on the sale of a business offset by costs associated with a
legal matter. Operating margins expanded by 440 basis points.
Industrial Biosciences – First-quarter 2017 operating
earnings of $75 million increased
$12 million, or 19 percent, on volume
growth, improved joint venture performance and cost savings,
partially offset by declines in CleanTech. Volume growth
reflected increased demand for biomaterials in apparel and
carpeting and bioactives in the grain processing market.
Operating margins expanded by about 250 basis points.
Nutrition & Health – First-quarter 2017 operating
earnings of $121 million increased
$17 million, or 16 percent, on plant
productivity, mix enrichment and cost savings. Volume growth
in probiotics and emulsifiers was offset by declines in protein
solutions and systems and texturants. Operating margins expanded by
235 basis points.
Performance Materials - First-quarter 2017 operating
earnings of $355 million increased
$82 million, or 30 percent, driven by
higher volumes and cost savings. Increased demand for
polymers in automotive markets, specialty copolymers growth in
packaging and timing benefits from the second quarter 2017 drove
increased volumes. Overall volume growth was constrained by
lower ethylene sales as the business prepares for a planned
turnaround of the ethylene cracker in the second quarter.
Operating margins expanded by about 410 basis points.
Protection Solutions – First-quarter 2017 operating
earnings of $177 million increased
$1 million, or 1 percent, as volume
growth and cost savings offset higher raw material costs,
unfavorable mix and lower plant productivity. Volume growth
reflected improved demand for Nomex® thermal-resistant
fiber in oil and gas and mass transportation markets partially
offset by declines in Kevlar® high-strength materials,
Tyvek® protective materials and surfaces. Operating
margins contracted by 45 basis points.
First-Half 2017 Outlook
The company expects first-half 2017 GAAP1 earnings
per share of about $2.42, a decrease
of about 5 percent from prior year. First-half 2017 operating
earnings2 per share are expected to be about
$2.90, an increase of about 16
percent versus prior year primarily driven by sales growth.
The increase in sales is due to the impact of the change in
timing of seed deliveries, primarily related to the southern U.S
route-to-market change in Agriculture, and strength in global
automotive markets. These benefits are anticipated to be
partially offset by the expected reduction in planted corn acres in
North America and higher product
costs in Performance Materials and Agriculture.
The company's first-half 2017 GAAP1 earnings includes
an expected net charge of about $0.32
per share for significant items primarily related to transaction
costs associated with the planned merger with Dow. Prior year
GAAP1 earnings included a net benefit of $0.20 per share from significant items, primarily
due to a gain on the sale of an entity.
DuPont will hold a conference call and webcast on Tuesday, Apr. 25, 2017, at 8:00 AM ET to discuss this news release.
The webcast and additional presentation materials can be accessed
by visiting the company's investor website (Events &
Presentations) at www.investors.dupont.com. A replay of the
conference call webcast will be available for 90 days by calling
1-630-652-3042, Passcode 6328583#. For additional information
see the investor center at http://www.dupont.com.
Use of Non-GAAP Measures
This earnings release includes information that does not conform
to U.S. generally accepted accounting principles (GAAP) and are
considered non-GAAP measures. These measures include the
company's consolidated results and earnings per share on an
operating earnings basis, which excludes significant items and
non-operating pension and other post employment benefit costs
(operating earnings and operating EPS), total segment pre-tax
operating earnings, operating costs and corporate expenses on an
operating earnings basis. Management uses these measures
internally for planning, forecasting and evaluating the performance
of the company's segments, including allocating resources and
evaluating incentive compensation. From a liquidity
perspective, management uses free cash flow, which is defined as
cash provided by/used for operating activities less purchases of
property, plant and equipment. Free cash flow is useful to
investors and management to evaluate the company's cash flow and
financial performance, and is an integral financial measure used in
the company's financial planning process. Management believes that
these non-GAAP measurements are meaningful to investors as they
provide insight with respect to ongoing operating results of the
company and provide a more useful comparison of year-over-year
results. These non-GAAP measurements supplement our GAAP
disclosures and should not be viewed as an alternative to GAAP
measures of performance. Reconciliations of non-GAAP measures
to GAAP are provided in schedules A, C and D. Details of
significant items are provided in schedule B.
About DuPont
DuPont (NYSE: DD) has been bringing world-class science and
engineering to the global marketplace in the form of innovative
products, materials, and services since 1802. The company
believes that by collaborating with customers, governments, NGOs,
and thought leaders we can help find solutions to such global
challenges as providing enough healthy food for people everywhere,
decreasing dependence on fossil fuels, and protecting life and the
environment. For additional information about DuPont and its
commitment to inclusive innovation, please visit
http://www.dupont.com.
Forward-Looking Statements: 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 merger of equals transaction with The
Dow Chemical Company (the "DowDuPont Merger") and the proposed
transaction with FMC and the anticipated benefits thereof. These
and other forward-looking statements, including the failure to
consummate the DowDuPont Merger or the proposed transaction or to
make or take any filing or other action required to consummate such
transactions in a timely manner or at all, are not guarantees of
future results and are subject to risks, uncertainties and
assumptions that could cause actual results to differ materially
from those expressed in any forward-looking statements. Important
risk factors that may cause such a difference include, but are not
limited to, (i) the completion of the DowDuPont Merger and 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 or the Health and Nutrition business's
operations and other conditions to the completion of the DowDuPont
Merger and the proposed transaction, (ii) the possibility that the
DowDuPont Merger and the proposed transaction may not close,
including because the various approvals, authorizations and
declarations of non-objections from certain regulatory and
governmental authorities with respect to either the DowDuPont
Merger or the proposed transaction may not be obtained, on a timely
basis or otherwise, including that these regulatory or governmental
authorities may not approve of FMC as an acceptable purchaser of
the Ag business in connection with the proposed transaction or may
impose conditions on the granting of the various approvals,
authorizations and declarations of non-objections, including
requiring the respective Dow, DuPont and FMC businesses, including
the Health and Nutrition business (in the case of DuPont) and the
Ag business (in the case of FMC), to divest certain assets if
necessary to obtain certain regulatory approvals or otherwise
limiting the ability of the combined company to integrate parts of
the Dow and DuPont businesses and/or the DuPont and Health and
Nutrition businesses, (iii) the ability of DuPont to integrate the
Health and Nutrition business successfully and to achieve
anticipated synergies, (iv) potential litigation or regulatory
actions relating to the DowDuPont Merger or the proposed
transaction that could be instituted against DuPont or its
directors, (v) the risk that disruptions from the DowDuPont Merger
or the proposed transaction will harm DuPont's business, including
current plans and operations, (vi) the ability of DuPont to retain
and hire key personnel, (vii) potential adverse reactions or
changes to business relationships resulting from the announcement
or completion of the DowDuPont Merger or the proposed transaction,
(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 DowDuPont Merger or the proposed transaction that could affect
DuPont's financial performance, (xii) certain restrictions during
the pendency of the DowDuPont Merger or the proposed transaction
that may impact 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 DowDuPont Merger
or the proposed transaction, are or will be more fully discussed in
(1) DuPont's most recently filed Form 10-K, 10-Q and 8-K reports,
(2) DuPont's subsequently filed Form 10-K and 10-Q reports and (3)
the joint proxy statement/prospectus included in the Registration
Statement filed with the SEC in connection with the DowDuPont
Merger. While the list of factors presented here is, and the list
of factors presented in the relevant Form 10-K, 10-Q and 8-K
reports and 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 DuPont's consolidated financial
condition, results of operations, credit rating or liquidity.
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.
E.I. du Pont de
Nemours and Company
|
Consolidated Income
Statements
|
(Dollars in
millions, except per share amounts)
|
|
SCHEDULE
A
|
|
|
|
|
Three Months
Ended
March
31,
|
|
2017
|
|
2016
|
Net sales
|
$
|
7,743
|
|
|
$
|
7,405
|
|
Cost of goods
sold
|
4,371
|
|
|
4,242
|
|
Other operating
charges (1)
|
204
|
|
|
185
|
|
Selling, general and
administrative expenses (1)
|
1,260
|
|
|
1,128
|
|
Research and
development expense
|
416
|
|
|
418
|
|
Other income, net
(1)
|
(306)
|
|
|
(372)
|
|
Interest
expense
|
84
|
|
|
92
|
|
Employee separation /
asset related charges, net (1)
|
152
|
|
|
77
|
|
|
|
|
|
Income from
continuing operations before income taxes
|
1,562
|
|
|
1,635
|
|
Provision for income
taxes on continuing operations (1)
|
224
|
|
|
406
|
|
Income from
continuing operations after income taxes
|
1,338
|
|
|
1,229
|
|
(Loss) income from
discontinued operations after income taxes
|
(217)
|
|
|
3
|
|
|
|
|
|
Net income
|
1,121
|
|
|
1,232
|
|
|
|
|
|
Less: Net
income attributable to noncontrolling interests
|
8
|
|
|
6
|
|
|
|
|
|
Net income
attributable to DuPont
|
$
|
1,113
|
|
|
$
|
1,226
|
|
|
|
|
|
Basic earnings per
share of common stock:
|
|
|
|
Basic earnings per
share of common stock from continuing operations
|
$
|
1.53
|
|
|
$
|
1.40
|
|
Basic loss per share
of common stock from discontinued operations
|
(0.25)
|
|
|
—
|
|
Basic earnings per
share of common stock (2)
|
$
|
1.28
|
|
|
$
|
1.40
|
|
|
|
|
|
Diluted earnings per
share of common stock:
|
|
|
|
Diluted earnings per
share of common stock from continuing operations
|
$
|
1.52
|
|
|
$
|
1.39
|
|
Diluted loss per share
of common stock from discontinued operations
|
(0.25)
|
|
|
—
|
|
Diluted earnings per
share of common stock (2)
|
$
|
1.27
|
|
|
$
|
1.39
|
|
|
|
|
|
Dividends per share
of common stock
|
$
|
0.38
|
|
|
$
|
0.38
|
|
|
|
|
|
Average number of
shares outstanding used in earnings per share (EPS)
calculation:
|
|
|
|
Basic
|
866,516,000
|
|
|
873,546,000
|
|
Diluted
|
871,083,000
|
|
|
877,251,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Non-GAAP Measures
|
|
|
|
|
|
Summary of
Earnings Comparison
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
2017
|
|
2016
|
|
%
Change
|
Income from
continuing operations after income taxes (GAAP)
|
$
|
1,338
|
|
|
$
|
1,229
|
|
|
9%
|
Less: Significant
items (charge) benefit included in income from continuing
operations after income taxes (per Schedule B)
|
(36)
|
|
|
160
|
|
|
|
Non-operating
pension/OPEB costs included in income from continuing operations
after income taxes
|
(67)
|
|
|
(46)
|
|
|
|
Net income
attributable to noncontrolling interest from continuing
operations
|
8
|
|
|
6
|
|
|
|
Operating earnings
(Non-GAAP) (3)
|
$
|
1,433
|
|
|
$
|
1,109
|
|
|
29%
|
|
|
|
|
|
|
Earnings per share
from continuing operations (GAAP)
|
$
|
1.52
|
|
|
$
|
1.39
|
|
|
9%
|
Less: Significant
items (charge) benefit included in EPS (per Schedule B)
|
(0.04)
|
|
|
0.18
|
|
|
|
Non-operating
pension/OPEB costs included in EPS
|
(0.08)
|
|
|
(0.05)
|
|
|
|
Operating earnings
per share (Non-GAAP) (3)
|
$
|
1.64
|
|
|
$
|
1.26
|
|
|
30%
|
|
|
|
|
|
|
E.I. du Pont de
Nemours and Company
|
Condensed
Consolidated Balance Sheets
|
(Dollars in
millions, except per share amounts)
|
|
SCHEDULE A
(continued)
|
|
|
|
|
March
31,
2017
|
|
December
31,
2016
|
Assets
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
3,347
|
|
|
$
|
4,605
|
|
Marketable
securities
|
|
2,570
|
|
|
1,362
|
|
Accounts and notes
receivable, net
|
|
7,272
|
|
|
4,971
|
|
Inventories
|
|
5,287
|
|
|
5,673
|
|
Prepaid
expenses
|
|
574
|
|
|
506
|
|
Total current
assets
|
|
19,050
|
|
|
17,117
|
|
Property, plant
and equipment, net of accumulated depreciation
(March
31, 2017 - $14,994; December 31, 2016 - $14,736)
|
|
9,084
|
|
|
9,231
|
|
Goodwill
|
|
4,172
|
|
|
4,180
|
|
Other intangible
assets
|
|
3,624
|
|
|
3,664
|
|
Investment in
affiliates
|
|
687
|
|
|
649
|
|
Deferred income
taxes
|
|
3,382
|
|
|
3,308
|
|
Other
assets
|
|
1,851
|
|
|
1,815
|
|
Total
|
|
$
|
41,850
|
|
|
$
|
39,964
|
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Accounts
payable
|
|
$
|
3,038
|
|
|
$
|
3,705
|
|
Short-term borrowings
and capital lease obligations
|
|
2,279
|
|
|
429
|
|
Income
taxes
|
|
185
|
|
|
101
|
|
Other accrued
liabilities
|
|
4,308
|
|
|
4,662
|
|
Total current
liabilities
|
|
9,810
|
|
|
8,897
|
|
Long-term
borrowings and capital lease obligations
|
|
8,099
|
|
|
8,107
|
|
Other
liabilities
|
|
11,911
|
|
|
12,333
|
|
Deferred income
taxes
|
|
395
|
|
|
431
|
|
Total
liabilities
|
|
30,215
|
|
|
29,768
|
|
|
|
|
|
|
Commitments and
contingent liabilities
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
Preferred
stock
|
|
237
|
|
|
237
|
|
Common stock, $0.30
par value; 1,800,000,000 shares authorized;
Issued
at March 31, 2017 - 953,937,000; December 31, 2016 -
950,044,000
|
|
286
|
|
|
285
|
|
Additional paid-in
capital
|
|
11,354
|
|
|
11,190
|
|
Reinvested
earnings
|
|
15,704
|
|
|
14,924
|
|
Accumulated other
comprehensive loss
|
|
(9,423)
|
|
|
(9,911)
|
|
Common stock held in
treasury, at cost (87,041,000 shares at March 31, 2017 and December
31, 2016)
|
|
(6,727)
|
|
|
(6,727)
|
|
Total DuPont
stockholders' equity
|
|
11,431
|
|
|
9,998
|
|
Noncontrolling
interests
|
|
204
|
|
|
198
|
|
Total
equity
|
|
11,635
|
|
|
10,196
|
|
Total
|
|
$
|
41,850
|
|
|
$
|
39,964
|
|
E.I. du Pont de
Nemours and Company
|
Condensed
Consolidated Statement of Cash Flows
|
(Dollars in
millions)
|
|
SCHEDULE A
(continued)
|
|
|
Three Months
Ended
March
31,
|
|
2017
|
|
2016
|
Total
Company
|
|
|
|
|
|
|
|
Net income
|
$
|
1,121
|
|
|
$
|
1,232
|
|
Adjustments to
reconcile net income to cash used for operating
activities:
|
|
|
|
Depreciation
|
230
|
|
|
238
|
|
Amortization of
intangible assets
|
51
|
|
|
122
|
|
Net periodic
pension benefit cost
|
109
|
|
|
146
|
|
Contributions
to pension plans
|
(82)
|
|
|
(88)
|
|
Gain on sale of
businesses and other assets
|
(192)
|
|
|
(374)
|
|
Asset-related
charges
|
119
|
|
|
78
|
|
Other operating
activities - net
|
78
|
|
|
180
|
|
Change in
operating assets and liabilities - net
|
(3,058)
|
|
|
(3,340)
|
|
Cash used for
operating activities
|
(1,624)
|
|
|
(1,806)
|
|
Investing
activities
|
|
|
|
Purchases of
property, plant and equipment
|
(330)
|
|
|
(357)
|
|
Investments in
affiliates
|
(22)
|
|
|
(1)
|
|
Proceeds from sale of
businesses and other assets - net
|
283
|
|
|
193
|
|
Net (increase)
decrease in short-term financial instruments
|
(1,205)
|
|
|
282
|
|
Foreign currency
exchange contract settlements
|
(15)
|
|
|
(78)
|
|
Other investing
activities - net
|
(46)
|
|
|
(12)
|
|
Cash (used for)
provided by investing activities
|
(1,335)
|
|
|
27
|
|
Financing
activities
|
|
|
|
Dividends paid to
stockholders
|
(331)
|
|
|
(334)
|
|
Net increase in
borrowings
|
1,844
|
|
|
958
|
|
Proceeds from
exercise of stock options
|
160
|
|
|
36
|
|
Other financing
activities - net
|
(32)
|
|
|
(35)
|
|
Cash provided by
financing activities
|
1,641
|
|
|
625
|
|
Effect of exchange
rate changes on cash
|
60
|
|
|
20
|
|
Decrease in cash
and cash equivalents
|
(1,258)
|
|
|
(1,134)
|
|
Cash and cash
equivalents at beginning of period
|
4,605
|
|
|
5,300
|
|
Cash and cash
equivalents at end of period
|
$
|
3,347
|
|
|
$
|
4,166
|
|
|
|
|
|
Reconciliation of
Non-GAAP Measure
|
|
|
|
Calculation of
Free Cash Flow - Total Company
|
|
|
|
|
Three Months Ended
March 31,
|
|
2017
|
|
2016
|
Cash used for
operating activities (GAAP)
|
$
|
(1,624)
|
|
|
$
|
(1,806)
|
|
Purchases of
property, plant and equipment
|
(330)
|
|
|
(357)
|
|
Free cash flow
(Non-GAAP)
|
$
|
(1,954)
|
|
|
$
|
(2,163)
|
|
|
|
|
|
(1) See
Schedule B for detail of significant items.
|
(2) The
sum of the individual earnings per share amounts from continuing
operations and discontinued operations may not equal the total
company earnings per share amounts due to rounding.
|
(3)
Operating earnings and operating earnings per share are defined as
earnings from continuing operations excluding significant items and
non-operating pension/OPEB costs. Non-operating pension/OPEB costs
includes all of the components of net periodic benefit cost from
continuing operations with the exception of the service cost
component.
|
E.I. du Pont de
Nemours and Company
|
Schedule of
Significant Items from Continuing Operations
|
(Dollars in
millions, except per share amounts)
|
|
SCHEDULE
B
|
|
|
|
|
|
|
|
|
|
|
SIGNIFICANT
ITEMS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax
|
|
After-tax
(6)
|
|
($ Per
Share)
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
1st
Quarter
|
|
|
|
|
|
|
|
|
|
|
|
Transaction costs
(1)
|
$
|
(170)
|
|
|
$
|
(24)
|
|
|
$
|
(122)
|
|
|
$
|
(21)
|
|
|
$
|
(0.14)
|
|
|
$
|
(0.02)
|
|
Restructuring
charges, net (2)
|
(152)
|
|
|
(77)
|
|
|
(100)
|
|
|
(48)
|
|
|
(0.11)
|
|
|
(0.06)
|
|
Gain on sale of
business / entity (3)
|
162
|
|
|
369
|
|
|
86
|
|
|
214
|
|
|
0.10
|
|
|
0.24
|
|
Income tax items
(4)
|
47
|
|
|
—
|
|
|
100
|
|
|
—
|
|
|
0.11
|
|
|
—
|
|
Customer claims
adjustment/recovery (5)
|
—
|
|
|
23
|
|
|
—
|
|
|
15
|
|
|
—
|
|
|
0.02
|
|
1st Quarter -
Total
|
$
|
(113)
|
|
|
$
|
291
|
|
|
$
|
(36)
|
|
|
$
|
160
|
|
|
$
|
(0.04)
|
|
|
$
|
0.18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
First quarter 2017
and 2016 included charges of $(170) and $(24), respectively,
recorded in selling, general and administrative expenses related to
costs associated with the planned merger with The Dow Chemical
Company and related activities. For first quarter 2017 and
2016, the effective tax rate for the total of pre-tax charges was
28.2% and 12.5%, respectively. A significant portion of the
transaction costs are in the US; however, those costs are not
always tax-deductible.
|
|
|
(2)
|
First quarter 2017
included a $(152) restructuring charge recorded in employee
separation/asset related charges, net, primarily associated with
actions to improve plant productivity. The charge included
$(33) of severance and related benefit costs and $(119) of
asset-related charges. The asset-related charges mainly
consists of accelerated depreciation associated with decision to
close the Company's Protection Solutions Cooper River manufacturing
site located near Charleston, South Carolina. Additional
charges for accelerated depreciation are expected in 2017, the
majority of which will be recognized in the second
quarter.
|
|
|
|
First quarter 2016
included a $(75) restructuring charge recorded in employee
separation / asset related charges, net related to the decision not
to re-start the Agriculture segment's insecticide manufacturing
facility at the La Porte site located in La Porte, Texas. The
charge included $(41) of asset-related charges, $(18) of contract
termination costs, and $(16) of employee severance and related
benefit costs.
|
|
|
|
First quarter 2016
included a $(2) charge in employee separation/asset related
charges, net associated with the 2016 Global Cost Savings and
Restructuring Program. This charge was primarily due to the
identification of additional projects in certain segments, offset
by reduction in severance and related benefit costs due to
workforce reductions achieved through non-severance
programs.
|
|
|
(3)
|
First quarter 2017
included a gain of $162 recorded in other income, net associated
with the sale of the company's global food safety diagnostic
business, a part of the Nutrition & Health segment. The
effective tax rate for the gain on sale was 46.9% due to
unfavorable tax consequences of non-deductible goodwill.
|
|
|
|
First quarter 2016
included a gain of $369 recorded in other 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)
|
First quarter 2017
included a tax benefit of $53, as well as a $47 benefit on
associated accrued interest reversals (recorded in other income,
net), related to a reduction in the company's unrecognized tax
benefits due to the closure of various tax statutes of
limitations.
|
|
|
(5)
|
First quarter 2016
included a benefit of $23, in other operating charges for
reductions in the accrual for customer claims related to the use of
the Imprelis® herbicide.
|
|
|
(6)
|
Unless specifically
addressed in notes above, the income tax effect on significant
items was calculated based upon the enacted tax laws and statutory
income tax rates applicable in the tax jurisdiction(s) of the
underlying non-GAAP adjustment.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
E.I. du Pont de
Nemours and Company
|
Consolidated Segment
Information
|
(Dollars in
millions)
|
|
SCHEDULE
C
|
|
|
|
|
|
|
Three Months
Ended
March
31,
|
SEGMENT NET
SALES
|
|
2017
|
|
2016
|
Agriculture
|
|
$
|
3,928
|
|
|
$
|
3,786
|
|
Electronics &
Communications
|
|
510
|
|
|
452
|
|
Industrial
Biosciences
|
|
368
|
|
|
352
|
|
Nutrition &
Health
|
|
789
|
|
|
801
|
|
Performance
Materials
|
|
1,368
|
|
|
1,249
|
|
Protection
Solutions
|
|
747
|
|
|
729
|
|
Other
|
|
33
|
|
|
36
|
|
Consolidated net
sales
|
|
$
|
7,743
|
|
|
$
|
7,405
|
|
|
|
|
|
|
|
|
Three Months
Ended
March 31,
|
SEGMENT OPERATING
EARNINGS (1)
|
|
2017
|
|
2016
|
Agriculture
|
|
$
|
1,236
|
|
|
$
|
1,101
|
|
Electronics &
Communications
|
|
89
|
|
|
59
|
|
Industrial
Biosciences
|
|
75
|
|
|
63
|
|
Nutrition &
Health
|
|
121
|
|
|
104
|
|
Performance
Materials
|
|
355
|
|
|
273
|
|
Protection
Solutions
|
|
177
|
|
|
176
|
|
Other
|
|
(62)
|
|
|
(59)
|
|
Total segment
operating earnings
|
|
1,991
|
|
|
1,717
|
|
Corporate
expenses
|
|
(69)
|
|
|
(86)
|
|
Interest
expense
|
|
(84)
|
|
|
(92)
|
|
Operating earnings
before income taxes and exchange losses
|
|
1,838
|
|
|
1,539
|
|
Exchange
losses(2)
|
|
(59)
|
|
|
(121)
|
|
Operating earnings
before income taxes (Non-GAAP)
|
|
$
|
1,779
|
|
|
$
|
1,418
|
|
Non-operating
pension/OPEB costs
|
|
(104)
|
|
|
(74)
|
|
Total significant
items before income taxes
|
|
(113)
|
|
|
291
|
|
Income from
continuing operations before income taxes (GAAP)
|
|
$
|
1,562
|
|
|
$
|
1,635
|
|
|
|
|
|
|
|
|
Three Months
Ended
March 31,
|
SIGNIFICANT ITEMS BY
SEGMENT (PRE-TAX) (3)
|
|
2017
|
|
2016
|
Agriculture
|
|
$
|
—
|
|
|
$
|
(73)
|
|
Electronics &
Communications
|
|
(5)
|
|
|
7
|
|
Industrial
Biosciences
|
|
(6)
|
|
|
1
|
|
Nutrition &
Health
|
|
160
|
|
|
1
|
|
Performance
Materials
|
|
(11)
|
|
|
(4)
|
|
Protection
Solutions
|
|
(124)
|
|
|
3
|
|
Other
|
|
—
|
|
|
(3)
|
|
Total significant
items by segment
|
|
14
|
|
|
(68)
|
|
Corporate
expenses
|
|
(127)
|
|
|
359
|
|
Total significant
items before income taxes
|
|
$
|
(113)
|
|
|
$
|
291
|
|
E.I. du Pont de
Nemours and Company
|
Consolidated Segment
Information
|
(Dollars in
millions)
|
|
SCHEDULE C
(continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate
Expenses
|
|
|
|
|
|
|
The reconciliation
below reflects GAAP corporate expenses (income) excluding
significant items.
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
March
31,
|
|
|
|
|
2017
|
|
2016
|
Corporate expenses
(income) (GAAP)
|
|
|
|
$
|
196
|
|
|
$
|
(273)
|
|
Less:
Significant items charge (benefit) (3)
|
|
|
|
127
|
|
|
(359)
|
|
Corporate expenses
(Non-GAAP)
|
|
|
|
$
|
69
|
|
|
$
|
86
|
|
|
|
|
|
|
|
|
(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.
|
(2)
See Schedule D for additional information on exchange gains
and losses.
|
(3)
See Schedule B for detail of significant items.
|
E.I. du Pont de
Nemours and Company
|
Reconciliation of
Non-GAAP Measures
|
(Dollars in
millions, except per share amounts)
|
|
SCHEDULE
D
|
|
|
|
|
Reconciliations of
Adjusted EBIT / EBITDA to Consolidated Income
Statements
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
2017
|
|
2016
|
Income from
continuing operations after income taxes (GAAP)
|
|
$
|
1,338
|
|
|
$
|
1,229
|
|
Add: Provision for
income taxes on continuing operations
|
|
224
|
|
|
406
|
|
Income from
continuing operations before income taxes
|
|
$
|
1,562
|
|
|
$
|
1,635
|
|
Add: Significant
items charge (benefit) before income taxes(1)
|
|
113
|
|
|
(291)
|
|
Add: Non-operating
pension/OPEB costs
|
|
104
|
|
|
74
|
|
Operating earnings
before income taxes (Non-GAAP)
|
|
$
|
1,779
|
|
|
$
|
1,418
|
|
Less: Net income
attributable to noncontrolling interests from continuing
operations
|
|
8
|
|
|
6
|
|
Add: Interest
expense
|
|
84
|
|
|
92
|
|
Adjusted EBIT from
operating earnings (Non-GAAP)
|
|
$
|
1,855
|
|
|
$
|
1,504
|
|
Add: Depreciation and
amortization
|
|
281
|
|
|
360
|
|
Adjusted EBITDA from
operating earnings (Non-GAAP)
|
|
$
|
2,136
|
|
|
$
|
1,864
|
|
|
|
Reconciliation of
Operating Costs to Consolidated Income Statement Line
Items
|
GAAP operating costs
is defined as other operating charges, selling, general and
administrative expenses, and research and development expense. The
reconciliation below reflects operating costs excluding significant
items and non-operating pension/OPEB costs.
|
|
|
|
|
|
Three Months Ended
March 31, 2017
|
|
Three Months Ended
March 31, 2016
|
|
As Reported
(GAAP)
|
Less: Significant
Items (1)
|
Less:
Non-Operating Pension/OPEB Costs
|
(Non-GAAP)
|
|
As Reported
(GAAP)
|
Less: Significant
Items (1)
|
Less:
Non-Operating Pension/OPEB Costs
|
(Non-GAAP)
|
Other operating
charges
|
$
|
204
|
|
$
|
—
|
|
$
|
—
|
|
$
|
204
|
|
|
$
|
185
|
|
$
|
(23)
|
|
$
|
—
|
|
$
|
208
|
|
Selling, general and
administrative expenses
|
1,260
|
|
170
|
|
31
|
|
1,059
|
|
|
1,128
|
|
24
|
|
30
|
|
1,074
|
|
Research and
development expense
|
416
|
|
—
|
|
16
|
|
400
|
|
|
418
|
|
—
|
|
11
|
|
407
|
|
Total
|
$
|
1,880
|
|
$
|
170
|
|
$
|
47
|
|
$
|
1,663
|
|
|
$
|
1,731
|
|
$
|
1
|
|
$
|
41
|
|
$
|
1,689
|
|
|
|
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.
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30,
|
|
|
|
2017
Outlook
|
|
2016
Actual
|
EPS from continuing
operations (GAAP)
|
|
|
$
|
2.42
|
|
|
$
|
2.55
|
|
|
|
|
|
|
|
Significant items
(1)
|
|
|
|
|
|
Transaction
costs
|
|
|
(0.30)
|
|
|
(0.09)
|
|
Gain on sale of
business / entity
|
|
|
0.10
|
|
|
0.24
|
|
Restructuring charges
/ adjustments
|
|
|
(0.23)
|
|
|
0.01
|
|
Income tax
items
|
|
|
0.11
|
|
|
—
|
|
Customer claims
adjustment/recovery
|
|
|
—
|
|
|
0.04
|
|
|
|
|
|
|
|
Non-operating
pension/OPEB costs - estimate
|
|
|
(0.16)
|
|
|
(0.15)
|
|
|
|
|
|
|
|
Operating EPS
(Non-GAAP)
|
|
|
$
|
2.90
|
|
|
$
|
2.50
|
|
E.I. du Pont de
Nemours and Company
|
Reconciliation of
Non-GAAP Measures
|
(Dollars in
millions, except per share amounts)
|
|
SCHEDULE D
(continued)
|
|
|
|
|
|
|
|
|
|
Exchange
Gains/Losses on Operating Earnings
|
|
|
|
|
The company routinely
uses forward exchange contracts to offset its net exposures, by
currency, related to the foreign currency denominated monetary
assets and liabilities of its operations. The objective of this
program is to maintain an approximately balanced position in
foreign currencies in order to minimize, on an after-tax basis, the
effects of exchange rate changes. The net pre-tax exchange gains
and losses are recorded in other loss, net and the related tax
impact is recorded in provision for (benefit from) income taxes on
the Consolidated Income Statements.
|
|
|
|
|
|
|
|
Three Months
Ended
March 31,
|
|
|
2017
|
|
2016
|
Subsidiary
Monetary Position Gain (Loss)
|
|
|
|
|
Pre-tax exchange
gains
|
|
$
|
26
|
|
|
$
|
33
|
|
Local tax
benefits
|
|
36
|
|
|
13
|
|
Net after-tax impact
from subsidiary exchange gains
|
|
$
|
62
|
|
|
$
|
46
|
|
|
|
|
|
|
Hedging Program
Gain (Loss)
|
|
|
|
|
Pre-tax exchange
losses
|
|
$
|
(85)
|
|
|
$
|
(154)
|
|
Tax
benefits
|
|
30
|
|
|
55
|
|
Net after-tax impact
from hedging program exchange losses
|
|
$
|
(55)
|
|
|
$
|
(99)
|
|
|
|
|
|
|
Total Exchange
Gain (Loss)
|
|
|
|
|
Pre-tax exchange
losses
|
|
$
|
(59)
|
|
|
$
|
(121)
|
|
Tax
benefits
|
|
66
|
|
|
68
|
|
Net after-tax
exchange gains (losses)
|
|
$
|
7
|
|
|
$
|
(53)
|
|
|
|
|
|
|
As shown above, the
"Total Exchange Gain (Loss)" is the sum of the "Subsidiary Monetary
Position Gain (Loss)" and the "Hedging Program Gain
(Loss)."
|
|
|
|
|
|
E.I. du Pont de
Nemours and Company
|
Reconciliation of
Non-GAAP Measures
|
(Dollars in
millions, except per share amounts)
|
|
SCHEDULE D
(continued)
|
|
|
|
|
|
|
|
Reconciliation of
Base Income Tax Rate to Effective Income Tax Rate
|
Base income tax rate
is defined as the effective income tax rate less the effect of
exchange gains (losses), as defined above, significant items and
non-operating pension/OPEB costs.
|
|
|
|
|
|
Three Months
Ended
March 31,
|
|
2017
|
|
2016
|
Income from
continuing operations before income taxes (GAAP)
|
$
|
1,562
|
|
|
$
|
1,635
|
|
Add:
Significant items - charge (benefit) (1)
|
113
|
|
|
(291)
|
|
Non-operating pension/OPEB costs
|
104
|
|
|
74
|
|
Less: Exchange
losses
|
(59)
|
|
|
(121)
|
|
Income from
continuing operations before income taxes, significant
items,
exchange losses, and non-operating pension/OPEB costs
(Non-GAAP)
|
$
|
1,838
|
|
|
$
|
1,539
|
|
|
|
|
|
Provision for income
taxes on continuing operations (GAAP)
|
$
|
224
|
|
|
$
|
406
|
|
Add: Tax
benefits (expenses) on significant items
|
77
|
|
|
(131)
|
|
Tax benefits on non-operating pension/OPEB
benefits/costs
|
37
|
|
|
28
|
|
Tax benefits on exchange losses
|
66
|
|
|
68
|
|
Provision for income
taxes on continuing earnings, excluding exchange losses
(Non-GAAP)
|
$
|
404
|
|
|
$
|
371
|
|
|
|
|
|
Effective income tax
rate (GAAP)
|
14.3
|
%
|
|
24.8
|
%
|
Significant items and
non-operating pension/OPEB costs effect
|
4.7
|
%
|
|
(3.4)
|
%
|
Tax rate, from
continuing operations before significant items and non-operating
pension/OPEB costs
|
19.0
|
%
|
|
21.4
|
%
|
Exchange gains
(losses) effect
|
3.0
|
%
|
|
2.7
|
%
|
Base income tax rate
from continuing operations (Non-GAAP)
|
22.0
|
%
|
|
24.1
|
%
|
|
|
|
|
(1) See
Schedule B for detail of significant items.
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/dupont-reports-first-quarter-results-300444835.html
SOURCE DuPont