WILMINGTON, Del., Aug. 1, 2019 /PRNewswire/ --
- 2Q19 GAAP EPS from continuing operations of $(1.48); Adjusted EPS of $0.97, up 9 percent versus prior year
- 2Q19 GAAP Income (loss) from continuing operations of
$(1.1B); Operating EBITDA of
$1.4B
- Operating EBITDA margins improve 170 basis points on
disciplined cost control and higher local price
- Raises full year pro forma adjusted EPS guidance to
$3.75 to $3.85; lowers organic growth to slightly down
versus prior year; driving additional cost actions
- $2 billion share repurchase
program authorized upon stand-up as independent company;
$250 million repurchased to date
DuPont (NYSE: DD) today announced financial results for the
second quarter of 2019 and raised its full year guidance for pro
forma adjusted EPS1 to a range of $3.75 to $3.85.
"In the face of weaker than expected market conditions, our
teams delivered on our bottom-line commitments by driving both cost
and pricing actions resulting in operating EBITDA(1)
margin improvement of 170 basis points in the quarter," said
Marc Doyle, DuPont Chief Executive
Officer.
"We also improved gross margin by more than 200 basis points
with gains in each of our core segments," Doyle continued.
"We delivered these results by continuing to realize the benefits
from our cost synergy initiatives, enacting new productivity
programs in the face of challenged end markets, and driving higher
pricing based on the value-added solutions we deliver.
We saw strength in probiotics, water, safety, aerospace and
healthcare end markets where we were able to capitalize on our
strong customer relationships and innovative solutions.
However, our portfolio is diverse, and our top-line results were
impacted by the on-going softness in our short-cycle
businesses."
Second Quarter Results
Net sales for the quarter totaled $5.5
billion, down 7 percent versus the same quarter last
year. On an organic basis, net sales were down 3 percent with
2 percent higher pricing being more than offset by 5 percent lower
volumes. Currency and portfolio headwinds decreased sales by
3 percent and 1 percent, respectively.
GAAP Income (loss) from continuing operations totaled
$(1.1 billion), versus pro forma GAAP
Income (loss) from continuing operations of $(11) million in the year-ago period.
Operating EBITDA was $1.4
billion, flat with pro forma operating EBITDA(1)
in the prior year. Operating EBITDA margins improved 170
basis points to 26.0 percent driven by cost synergies and higher
local price.
GAAP EPS from continuing operations declined to ($1.48), versus pro forma GAAP EPS from
continuing operations in the year-ago period of ($0.02) mostly attributable to goodwill
impairment charges of $1.57 per share
and an income tax charge of $0.22 per
share offset by the absence of costs historically allocated to Dow
and Corteva of $0.35 per share.
Adjusted EPS(1) increased 9 percent to $0.97, compared with pro forma adjusted EPS in
the year-ago period of $0.89
primarily driven by lower depreciation and amortization and a lower
share count.
"Our results show our readiness to respond to continuously
evolving market conditions," said Ed
Breen, Executive Chairman of DuPont. "We drove
productivity actions, significantly improved our margins and began
executing immediately on a share repurchase program. This
performance-based mindset and commitment to shareholder value
starting at the Board level and through each of our businesses is
critical as we move forward."
Second Quarter Segment Highlights
Electronics & Imaging
Electronics &
Imaging reported net sales of $858
million, down 7 percent from the year-ago period. Organic
sales were down 5 percent driven by lower volumes. Currency
was a 2 percent headwind.
Volume gains in Display Technologies were more than offset by
softer volumes in Semiconductor Technologies and Interconnect
Solutions. Display Technologies volume gains were led by
double-digit growth in OLEDs. Within Semiconductor Technologies,
weak demand for our products due to high inventory levels in the
memory sector, which accounts for about half of our semiconductor
volumes, more than offset double-digit growth in semiconductor
packaging materials. Within Interconnect Solutions, demand for
advanced materials critical for next-generation smartphones
remained strong. Despite this strength, overall volumes in
Interconnect Solutions was down mid-single digits due to soft
circuit board demand.
Operating EBITDA for the segment was $246
million, a decrease of 15 percent from pro forma operating
EBITDA of $290 million in the
year-ago period, driven primarily by the impact of lower volumes
and an unfavorable product mix more than offsetting cost
synergies.
Nutrition & Biosciences
Nutrition &
Biosciences reported net sales of $1.6
billion, down 4 percent from the year-ago period.
Organic sales were flat with the year-ago period with a 1 percent
price improvement offset by a 1 percent volume decline;
currency and portfolio were headwinds of 3 percent and 1 percent,
respectively.
Volume gains in Health & Biosciences were more than offset
by softer volumes in Food & Beverage and Pharma Solutions.
Health & Biosciences volume gains were led by double-digit
growth in probiotics and mid-single digit growth in microbial
control. These gains were partially offset by lower bioactives
volumes resulting from ongoing challenged conditions in U.S. energy
markets. Food & Beverage volumes were lower versus the year-ago
period with gains in specialty proteins led by growing demand in
plant-based meats more than offset by declines in functional
solutions driven by unseasonably cooler weather impacting our dairy
market. Pharma Solutions volumes declined low-single digits versus
the year-ago period due to capacity constraints, mix enrichment as
we shift the portfolio toward higher-margin products and a strong
comparison in the prior year. We anticipate both Food &
Beverage and Pharma Solutions to return to positive growth in the
third quarter. Local price improved across all businesses in
the quarter.
Operating EBITDA for the segment was $391
million, an increase of 2 percent from pro forma operating
EBITDA of $383 million in the
year-ago period with cost synergies and pricing gains more than
offsetting higher raw materials costs, currency headwinds and the
impact of lower volumes.
Transportation & Industrial
Transportation
& Industrial reported net sales of $1.3
billion, down 10 percent from the year-ago period. Organic
sales were down 7 percent with a 5 percent price improvement more
than offset by a 12 percent volume decline; currency was a 3
percent headwind.
Volumes declined 12 percent due to lower autobuilds, primarily
for the China market, weak
electronics demand and continued de-stocking in both the automotive
and electronics channels. Europe
and Asia volumes were down
mid-teens as China tariff concerns
coupled with inventory destocking impacted demand.
Local price improved across all regions and businesses in the
quarter.
Operating EBITDA for the segment was $357
million, a decrease of 11 percent from pro forma operating
EBITDA of $402 million in the
year-ago period with pricing gains and cost synergies more than
offset by the impact from lower volumes and currency headwinds.
Safety & Construction
Safety &
Construction reported net sales of $1.3
billion, down 2 percent from the year-ago period. Organic
sales increased 5 percent with a 4 percent price improvement and a
1 percent volume gain. The December
2018 divestiture of the European STYROFOAM™ business reduced
sales by 4 percent. Currency was a 3 percent headwind.
Local price increased across all businesses and in all regions,
led by Safety and Water Solutions.
High-single digit volume gains in the Water Solutions business
were mostly offset by lower volumes in the Shelter Solutions
business on continued softness in North
America residential construction demand. Safety Solutions
volumes were flat with the year-ago period driven by capacity
constraints in Tyvek® and aramid product lines.
Operating EBITDA for the segment totaled $382 million, an increase of 29 percent from pro
forma operating EBITDA of $296
million in the year-ago period. The earnings growth was led
by strength in the Water and Safety Solutions businesses driven by
local price gains, cost synergies, and productivity improvements
more than offsetting a currency headwind.
Non-Core
Non-Core reported net sales of
$442 million, down 16 percent from
the year-ago period. Organic sales were down 14 percent versus the
year-ago period driven by lower volumes; currency was a
2 percent headwind.
Volume declines were driven by weak demand for trichlorosilane
due to historically low polysilicon pricing and lower paste sales
into electronic component end markets. Volumes in the biomaterials
business were lower versus the same quarter last year primarily
from a slow-down in the U.S. residential carpet market.
Operating EBITDA for the segment was $99
million, a decrease of 20 percent from pro forma operating
EBITDA of $123 million in the
year-ago period, primarily driven by lower volumes.
Outlook
"Our team is delivering operating leverage through our financial
results which allows us today to raise our full year pro forma
adjusted EPS guidance despite expectations of a softer top line,"
said Jeanmarie Desmond, Chief
Financial Officer of DuPont. "We now expect full year organic sales
to be slightly down versus prior year consistent with our
expectation that soft demand in our short-cycle businesses extends
into the second half. In addition to actions we took in the second
quarter, we are taking new cost actions in the second half to
mitigate our expected top line headwinds."
Conference Call
The Company will host a live
webcast of its second 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 and additional materials,
including reconciliations to non-GAAP measures, can be accessed on
DuPont's Investor Relations Events and Presentations page. A replay
of the webcast will also 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 third 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) constraints on DuPont's ability to take
strategic action concerning certain levels of assets and businesses
under an agreement entered in connection with the Corteva
Distribution; (iii) restrictions under intellectual property cross
license agreements entered into in connection with the
Distributions; (iv) non-compete restrictions agreed in connection
with the Distributions; (v) 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; (vi) risks related to indemnification obligations of
Historical DuPont contingent liabilities in connection with the
Corteva Distribution (vii) potential liability arising from
fraudulent conveyance and similar laws in connection with the
Distributions; (viii) disruptions or business uncertainty,
including from the Distributions, could adversely impact DuPont's
business or financial performance and its ability to retain
and hire key personnel; (ix) uncertainty as to the long-term value
of DuPont common stock; (x) potential inability or reduced access
to the capital markets or increased cost of borrowings,
including as a result of a credit rating downgrade;
(xi) uncertainties related to share buybacks
including costs, time and ability to complete; and
(xii) risks to DuPont's business, operations and results of
operations 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; impairment of goodwill or intangible assets especially as to
those assets that were stepped up at September 1, 2017 based on merge-related
acquisition method of accounting; changes in political
conditions, including tariffs, trade disputes and retaliatory
actions; the availability of and fluctuations in the cost of raw
materials and energy; business or supply disruptions; 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; failure to effectively manage acquisitions,
divestitures, alliances, joint ventures and other portfolio
changes; 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 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. 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 I, Item 1A) of
the company's 2018 Annual Report on Form 10-K as modified by its
2019 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 statements of operations and pro forma 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 Consolidated
interim 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 unaudited 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
Statements of Operations, expected to have a continuing impact on
the results. The unaudited pro forma statements of operations for
the six months ended June 30, 2019
and for three and six months ended June 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
June 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 unaudited 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 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.
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, after-tax impact of
non-operating pension / other post employment benefits
("OPEB")/charges, and 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.
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, 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.
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
June 30,
|
Six Months Ended
June 30,
|
2019
|
2018
|
2019
|
2018
|
Net sales
|
$
|
5,468
|
|
$
|
5,857
|
|
$
|
10,882
|
|
$
|
11,454
|
|
Cost of
sales
|
3,496
|
|
4,085
|
|
7,117
|
|
7,890
|
|
Research and
development expenses
|
232
|
|
270
|
|
499
|
|
544
|
|
Selling, general and
administrative expenses
|
642
|
|
768
|
|
1,368
|
|
1,570
|
|
Amortization of
intangibles
|
252
|
|
266
|
|
508
|
|
531
|
|
Restructuring and
asset related charges - net
|
137
|
|
46
|
|
208
|
|
99
|
|
Goodwill impairment
charge
|
1,175
|
|
—
|
|
1,175
|
|
—
|
|
Integration and
separation costs
|
347
|
|
428
|
|
958
|
|
793
|
|
Equity in earnings of
nonconsolidated affiliates
|
49
|
|
54
|
|
89
|
|
111
|
|
Sundry income
(expense) - net
|
(19)
|
|
82
|
|
65
|
|
(16)
|
|
Interest
expense
|
165
|
|
—
|
|
316
|
|
—
|
|
(Loss) Income from
continuing operations before income taxes
|
(948)
|
|
130
|
|
(1,113)
|
|
122
|
|
Provision for income
taxes on continuing operations
|
155
|
|
99
|
|
64
|
|
164
|
|
(Loss) Income from
continuing operations, net of tax
|
(1,103)
|
|
31
|
|
(1,177)
|
|
(42)
|
|
Income from
discontinued operations, net of tax
|
566
|
|
1,773
|
|
1,212
|
|
2,983
|
|
Net (loss)
income
|
(537)
|
|
1,804
|
|
35
|
|
2,941
|
|
Net income
attributable to noncontrolling interests
|
34
|
|
35
|
|
85
|
|
79
|
|
Net (loss) income
available for DuPont common stockholders
|
$
|
(571)
|
|
$
|
1,769
|
|
$
|
(50)
|
|
$
|
2,862
|
|
Per common share
data:
|
|
|
|
|
(Loss) Earnings per
common share from continuing operations - basic
|
$
|
(1.48)
|
|
$
|
0.03
|
|
$
|
(1.59)
|
|
$
|
(0.09)
|
|
Earnings per common
share from discontinued operations - basic
|
0.72
|
|
2.26
|
|
1.52
|
|
3.78
|
|
(Loss) Earnings per
common share - basic
|
$
|
(0.76)
|
|
$
|
2.29
|
|
$
|
(0.07)
|
|
$
|
3.69
|
|
(Loss) Earnings per
common share from continuing operations - diluted
|
$
|
(1.48)
|
|
$
|
0.03
|
|
$
|
(1.59)
|
|
$
|
(0.09)
|
|
Earnings per common
share from discontinued operations - diluted
|
0.72
|
|
2.24
|
|
1.52
|
|
3.78
|
|
(Loss) Earnings per
common share - diluted
|
$
|
(0.76)
|
|
$
|
2.27
|
|
$
|
(0.07)
|
|
$
|
3.69
|
|
Weighted-average
common shares outstanding - basic
|
749.0
|
|
769.6
|
|
749.6
|
|
771.0
|
|
Weighted-average
common shares outstanding - diluted
|
749.0
|
|
774.5
|
|
749.6
|
|
771.0
|
|
DuPont de Nemours,
Inc.
|
Condensed
Consolidated Balance Sheets
|
|
In millions, except
share amounts (Unaudited)
|
Jun 30,
2019
|
Dec 30,
2018
|
Assets
|
|
|
Current
Assets
|
|
|
Cash and cash
equivalents
|
$
|
1,661
|
|
$
|
8,548
|
|
Marketable
securities
|
8
|
|
29
|
|
Accounts and notes
receivable - net
|
4,214
|
|
3,391
|
|
Inventories
|
4,390
|
|
4,107
|
|
Other current
assets
|
350
|
|
305
|
|
Assets of discontinued
operations
|
—
|
|
110,085
|
|
Total current
assets
|
10,623
|
|
126,465
|
|
Investments
|
|
|
Investments in
nonconsolidated affiliates
|
1,653
|
|
1,745
|
|
Other
investments
|
29
|
|
28
|
|
Noncurrent
receivables
|
36
|
|
47
|
|
Total
investments
|
1,718
|
|
1,820
|
|
Property, plant and
equipment - net of accumulated depreciation (June 30, 2019 -
$4,667; December 31, 2018 - $4,199)
|
9,806
|
|
9,917
|
|
Other
Assets
|
|
|
Goodwill
|
33,330
|
|
34,496
|
|
Other intangible
assets
|
14,150
|
|
14,655
|
|
Deferred income tax
assets
|
219
|
|
178
|
|
Deferred charges and
other assets
|
997
|
|
134
|
|
Total other
assets
|
48,696
|
|
49,463
|
|
Total
Assets
|
$
|
70,843
|
|
$
|
187,665
|
|
Liabilities and
Equity
|
|
|
Current
Liabilities
|
|
|
Short-term borrowings
and finance lease obligations
|
$
|
1,621
|
|
$
|
15
|
|
Accounts
payable
|
3,020
|
|
2,619
|
|
Income taxes
payable
|
164
|
|
115
|
|
Accrued and other
current liabilities
|
1,652
|
|
1,129
|
|
Liabilities of
discontinued operations
|
—
|
|
69,244
|
|
Total current
liabilities
|
6,457
|
|
73,122
|
|
Long-Term
Debt
|
15,608
|
|
12,624
|
|
Other Noncurrent
Liabilities
|
|
|
Deferred income tax
liabilities
|
3,662
|
|
3,912
|
|
Pension and other
postretirement benefits - noncurrent
|
1,102
|
|
1,343
|
|
Other noncurrent
obligations
|
1,438
|
|
764
|
|
Total other noncurrent liabilities
|
6,202
|
|
6,019
|
|
Total
Liabilities
|
$
|
28,267
|
|
$
|
91,765
|
|
Commitments and
Contingent Liabilities
|
|
|
Stockholders'
Equity
|
|
|
Common stock
(authorized 1,666,666,667 shares of $0.01 par value each;
issued 2019: 747,443,517
shares; 2018: 784,143,433 shares)
|
7
|
|
8
|
|
Additional paid-in
capital
|
51,129
|
|
81,976
|
|
(Accumulated deficit)
Retained earnings
|
(8,299)
|
|
30,257
|
|
Accumulated other
comprehensive loss
|
(831)
|
|
(12,394)
|
|
Unearned ESOP
shares
|
—
|
|
(134)
|
|
Treasury stock at cost
(2019: 0 shares; 2018: 27,817,518 shares)
|
—
|
|
(5,421)
|
|
Total DuPont's
stockholders' equity
|
42,006
|
|
94,292
|
|
Noncontrolling
interests
|
570
|
|
1,608
|
|
Total
equity
|
42,576
|
|
95,900
|
|
Total Liabilities and
Equity
|
$
|
70,843
|
|
$
|
187,665
|
|
DuPont de Nemours,
Inc.
|
Pro Forma
Consolidated Statements of Operations
|
|
In millions, except
per share amounts (Unaudited)
|
Three Months
Ended
|
Six Months
Ended
|
Jun 30,
2019
|
Jun 30,
2018
|
Jun 30,
2019
|
Jun 30,
2018
|
As
Reported
|
Pro Forma
1
|
Pro Forma
1
|
Pro Forma
1
|
Net sales
|
$
|
5,468
|
|
$
|
5,857
|
|
$
|
10,882
|
|
$
|
11,454
|
|
Cost of
sales
|
3,496
|
|
4,103
|
|
7,139
|
|
7,926
|
|
Research and
development expenses
|
232
|
|
270
|
|
499
|
|
544
|
|
Selling, general and
administrative expenses
|
642
|
|
768
|
|
1,368
|
|
1,570
|
|
Amortization of
intangibles
|
252
|
|
266
|
|
508
|
|
531
|
|
Restructuring, and
asset related charges - net
|
137
|
|
46
|
|
208
|
|
99
|
|
Goodwill impairment
charge
|
1,175
|
|
—
|
|
1,175
|
|
—
|
|
Integration and
separation costs
|
347
|
|
291
|
|
785
|
|
565
|
|
Equity in earnings of
nonconsolidated affiliates
|
49
|
|
54
|
|
89
|
|
111
|
|
Sundry income
(expense) - net
|
(19)
|
|
82
|
|
65
|
|
(16)
|
|
Interest
expense
|
165
|
|
171
|
|
345
|
|
342
|
|
(Loss) Income from
continuing operations before income taxes
|
(948)
|
|
78
|
|
(991)
|
|
(28)
|
|
Provision for income
taxes on continuing operations
|
155
|
|
89
|
|
94
|
|
133
|
|
(Loss) Income from
continuing operations, net of tax
|
(1,103)
|
|
(11)
|
|
(1,085)
|
|
(161)
|
|
Net income (loss)
attributable to noncontrolling interests
|
9
|
|
(2)
|
|
13
|
|
11
|
|
Net loss from
continuing operations available for DuPont common
stockholders
|
$
|
(1,112)
|
|
$
|
(9)
|
|
$
|
(1,098)
|
|
$
|
(172)
|
|
|
|
|
|
|
Per common share
data:
|
|
|
|
|
Loss per common share
from continuing operations - basic
|
$
|
(1.48)
|
|
$
|
(0.02)
|
|
$
|
(1.47)
|
|
$
|
(0.24)
|
|
Loss per common share
from continuing operations - diluted
|
$
|
(1.48)
|
|
$
|
(0.02)
|
|
$
|
(1.47)
|
|
$
|
(0.24)
|
|
|
|
|
|
|
Weighted-average
common shares outstanding - basic
|
749.0
|
|
769.6
|
|
749.6
|
|
771.0
|
|
Weighted-average
common shares outstanding - diluted
|
749.0
|
|
769.6
|
|
749.6
|
|
771.0
|
|
1. Refer to pages 16
and 17 for additional detail on the pro forma adjustments included
in the pro forma statements of operations
|
DuPont de Nemours,
Inc.
|
Net Sales by
Segment and Geographic Region
|
|
Net Sales by
Segment and Geographic Region
|
Three Months
Ended
|
Six Months
Ended
|
In millions
(Unaudited)
|
Jun 30,
2019
|
Jun 30,
2018
|
Jun 30,
2019
|
Jun 30,
2018
|
As
Reported
|
Pro
Forma
|
As
Reported
|
Pro
Forma
|
Electronics &
Imaging
|
$
|
858
|
|
$
|
921
|
|
$
|
1,683
|
|
$
|
1,785
|
|
Nutrition &
Biosciences
|
1,558
|
|
1,621
|
|
3,093
|
|
3,198
|
|
Transportation &
Industrial
|
1,269
|
|
1,417
|
|
2,586
|
|
2,795
|
|
Safety &
Construction
|
1,341
|
|
1,372
|
|
2,624
|
|
2,636
|
|
Non-Core
|
442
|
|
526
|
|
896
|
|
1,040
|
|
Total
|
$
|
5,468
|
|
$
|
5,857
|
|
$
|
10,882
|
|
$
|
11,454
|
|
U.S. &
Canada
|
$
|
1,826
|
|
$
|
1,857
|
|
$
|
3,602
|
|
$
|
3,643
|
|
EMEA
1
|
1,291
|
|
1,492
|
|
2,671
|
|
2,957
|
|
Asia
Pacific
|
2,034
|
|
2,178
|
|
3,979
|
|
4,211
|
|
Latin
America
|
317
|
|
330
|
|
630
|
|
643
|
|
Total
|
$
|
5,468
|
|
$
|
5,857
|
|
$
|
10,882
|
|
$
|
11,454
|
|
Net Sales Variance
by Segment
and Geographic Region
|
Three Months Ended
Jun 30, 2019
|
|
Local Price &
Product Mix
|
Volume
|
Total
Organic
|
Currency
|
Portfolio /
Other
|
Total
|
|
Percent change from
prior year
|
|
Electronics &
Imaging
|
—
|
%
|
(5)
|
%
|
(5)
|
%
|
(2)
|
%
|
—
|
%
|
(7)
|
%
|
|
Nutrition &
Biosciences
|
1
|
|
(1)
|
|
—
|
|
(3)
|
|
(1)
|
|
(4)
|
|
|
Transportation &
Industrial
|
5
|
|
(12)
|
|
(7)
|
|
(3)
|
|
—
|
|
(10)
|
|
|
Safety &
Construction
|
4
|
|
1
|
|
5
|
|
(3)
|
|
(4)
|
|
(2)
|
|
|
Non-Core
|
—
|
|
(14)
|
|
(14)
|
|
(2)
|
|
—
|
|
(16)
|
|
|
Total
|
2
|
%
|
(5)
|
%
|
(3)
|
%
|
(3)
|
%
|
(1)
|
%
|
(7)
|
%
|
|
U.S. &
Canada
|
1
|
%
|
(3)
|
%
|
(2)
|
%
|
—
|
%
|
—
|
%
|
(2)
|
%
|
|
EMEA
1
|
3
|
|
(6)
|
|
(3)
|
|
(6)
|
|
(4)
|
|
(13)
|
|
|
Asia
Pacific
|
2
|
|
(6)
|
|
(4)
|
|
(3)
|
|
—
|
|
(7)
|
|
|
Latin
America
|
4
|
|
(3)
|
|
1
|
|
(4)
|
|
(1)
|
|
(4)
|
|
|
Total
|
2
|
%
|
(5)
|
%
|
(3)
|
%
|
(3)
|
%
|
(1)
|
%
|
(7)
|
%
|
|
Net Sales Variance
by Segment
and Geographic Region
|
Six Months Ended
Jun 30, 2019
|
|
Local Price &
Product Mix
|
Volume
|
Total
Organic
|
Currency
|
Portfolio /
Other
|
Total
|
|
Percent change from
prior year
|
|
Electronics &
Imaging
|
—
|
%
|
(4)
|
%
|
(4)
|
%
|
(2)
|
%
|
—
|
%
|
(6)
|
%
|
|
Nutrition &
Biosciences
|
1
|
|
(1)
|
|
—
|
|
(3)
|
|
—
|
|
(3)
|
|
|
Transportation &
Industrial
|
6
|
|
(10)
|
|
(4)
|
|
(3)
|
|
—
|
|
(7)
|
|
|
Safety &
Construction
|
4
|
|
2
|
|
6
|
|
(2)
|
|
(4)
|
|
—
|
|
|
Non-Core
|
(2)
|
|
(10)
|
|
(12)
|
|
(2)
|
|
—
|
|
(14)
|
|
|
Total
|
3
|
%
|
(4)
|
%
|
(1)
|
%
|
(3)
|
%
|
(1)
|
%
|
(5)
|
%
|
|
U.S. &
Canada
|
1
|
%
|
(2)
|
%
|
(1)
|
%
|
—
|
%
|
—
|
%
|
(1)
|
%
|
|
EMEA
1
|
4
|
|
(4)
|
|
—
|
|
(6)
|
|
(4)
|
|
(10)
|
|
|
Asia
Pacific
|
2
|
|
(5)
|
|
(3)
|
|
(3)
|
|
—
|
|
(6)
|
|
|
Latin
America
|
5
|
|
(2)
|
|
3
|
|
(4)
|
|
(1)
|
|
(2)
|
|
|
Total
|
3
|
%
|
(4)
|
%
|
(1)
|
%
|
(3)
|
%
|
(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
|
Six Months
Ended
|
|
Jun 30,
2019
|
Jun 30,
2018
|
Jun 30,
2019
|
Jun 30,
2018
|
In millions
(Unaudited)
|
As
Reported
|
Pro
Forma
|
Pro
Forma
|
Pro
Forma
|
Electronics &
Imaging
|
246
|
|
290
|
|
534
|
|
567
|
|
Nutrition &
Biosciences
|
391
|
|
383
|
|
744
|
|
751
|
|
Transportation &
Industrial
|
357
|
|
402
|
|
730
|
|
791
|
|
Safety &
Construction
|
382
|
|
296
|
|
756
|
|
622
|
|
Non-Core
|
99
|
|
123
|
|
193
|
|
233
|
|
Corporate
|
(53)
|
|
(72)
|
|
(105)
|
|
(136)
|
|
Total
|
$
|
1,422
|
|
$
|
1,422
|
|
$
|
2,852
|
|
$
|
2,828
|
|
|
|
|
|
|
Equity in Earnings
(Losses) of Nonconsolidated Affiliates by Segment
|
Three Months
Ended
|
Six Months
Ended
|
|
Jun 30,
2019
|
Jun 30,
2018
|
Jun 30,
2019
|
Jun 30,
2018
|
In millions
(Unaudited)
|
As
Reported
|
Pro
Forma
|
Pro
Forma
|
Pro
Forma
|
Electronics &
Imaging
|
5
|
|
6
|
|
8
|
|
13
|
|
Nutrition &
Biosciences
|
—
|
|
—
|
|
—
|
|
1
|
|
Transportation &
Industrial
|
2
|
|
1
|
|
2
|
|
3
|
|
Safety &
Construction
|
7
|
|
8
|
|
15
|
|
13
|
|
Non-Core
|
35
|
|
39
|
|
64
|
|
81
|
|
Total
|
$
|
49
|
|
$
|
54
|
|
$
|
89
|
|
$
|
111
|
|
|
|
|
|
|
Reconciliation of
"Income (loss) from continuing operations, net of tax" to
"Operating EBITDA"
|
Three Months
Ended
|
Six Months
Ended
|
|
Jun 30,
2019
|
Jun 30,
2018
|
Jun 30,
2019
|
Jun 30,
2018
|
In millions
(Unaudited)
|
As
Reported
|
Pro
Forma
|
Pro
Forma
|
Pro
Forma
|
(Loss) income from
continuing operations, net of tax
|
$
|
(1,103)
|
|
$
|
(11)
|
|
$
|
(1,085)
|
|
$
|
(161)
|
|
+ Provision for
income taxes on continuing operations
|
155
|
|
89
|
|
94
|
|
133
|
|
(Loss) income from
continuing operations before income taxes
|
$
|
(948)
|
|
$
|
78
|
|
$
|
(991)
|
|
$
|
(28)
|
|
+ Depreciation and
amortization
|
507
|
|
551
|
|
1,034
|
|
1,102
|
|
- Interest
income 1
|
9
|
|
11
|
|
49
|
|
21
|
|
+ Interest
expense
|
165
|
|
171
|
|
345
|
|
342
|
|
- Non-operating
pension/OPEB benefit 1
|
18
|
|
28
|
|
39
|
|
55
|
|
- Foreign
exchange (losses) gains, net
|
(17)
|
|
53
|
|
(78)
|
|
(72)
|
|
+ Costs historically
allocated to the materials science and agriculture businesses
2
|
—
|
|
352
|
|
256
|
|
608
|
|
- Adjusted
Significant items
|
(1,708)
|
|
(362)
|
|
(2,218)
|
|
(808)
|
|
Operating
EBITDA
|
$
|
1,422
|
|
$
|
1,422
|
|
$
|
2,852
|
|
$
|
2,828
|
|
|
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 Jun 30,
2019
|
In millions, except
per share amounts (Unaudited)
|
Pretax
1
|
Net
Income 2
|
EPS
3
|
Income Statement
Classification
|
Reported results
(GAAP)
|
$
|
(948)
|
|
$
|
(1,112)
|
|
$
|
(1.48)
|
|
|
Less: Significant
items
|
|
|
|
|
Integration and
separation costs 4
|
(347)
|
|
(255)
|
|
(0.34)
|
|
Integration and
separation costs
|
Restructuring and
asset related charges - net 5
|
(138)
|
|
(105)
|
|
(0.14)
|
|
Restructuring and
asset related charges
|
Goodwill impairment
charge
|
(1,175)
|
|
(1,173)
|
|
(1.57)
|
|
Goodwill impairment
charge
|
Income tax related
item
|
(48)
|
|
(167)
|
|
(0.22)
|
|
Sundry income
(expense) - net;
Provision for income
taxes on continuing operations
|
Total significant
items
|
$
|
(1,708)
|
|
$
|
(1,700)
|
|
$
|
(2.27)
|
|
|
Less: Merger-related
amortization of intangibles
|
(199)
|
|
(157)
|
|
(0.21)
|
|
Amortization of
intangibles
|
Less: Non-op pension
/ OPEB benefit
|
18
|
|
20
|
|
0.03
|
|
Sundry income
(expense) - net
|
Adjusted results
(non-GAAP)
|
$
|
941
|
|
$
|
725
|
|
$
|
0.97
|
|
|
|
Significant Items
Impacting Pro Forma Results for the Three Months Ended Jun 30,
2018
|
In millions, except
per share amounts (Unaudited)
|
Pretax
1
|
Net
Income 2
|
EPS
3
|
Income Statement
Classification
|
Pro forma results
(GAAP)
|
$
|
78
|
|
$
|
(9)
|
|
$
|
(0.02)
|
|
|
Less: Significant
items
|
|
|
|
|
Integration and
separation costs 4
|
(291)
|
|
(237)
|
|
(0.31)
|
|
Integration and
separation costs
|
Restructuring and
asset related charges - net 5
|
(46)
|
|
(38)
|
|
(0.05)
|
|
Restructuring and
asset related charges
|
Merger-related
inventory step-up amortization 6
|
(4)
|
|
(1)
|
|
—
|
|
Cost of
sales
|
Net loss on
divestitures and changes in joint venture ownership
|
(21)
|
|
(16)
|
|
(0.02)
|
|
Sundry income
(expense) - net
|
Total significant
items
|
$
|
(362)
|
|
$
|
(292)
|
|
$
|
(0.38)
|
|
|
Less: Merger-related
amortization of intangibles
|
(207)
|
|
(163)
|
|
(0.21)
|
|
Amortization of
intangibles
|
Less: Non-op pension
/ OPEB benefit
|
28
|
|
22
|
|
0.03
|
|
Sundry income
(expense) - net
|
Less: Costs
historically allocated to the materials science and agriculture
businesses 7
|
(352)
|
|
(271)
|
|
(0.35)
|
|
Cost of sales;
Research and development expense; Selling, general and
administrative expenses
|
Adjusted pro forma
results (non-GAAP)
|
$
|
971
|
|
$
|
695
|
|
$
|
0.89
|
|
|
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. Earnings (loss)
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. Includes the fair
value step-up in Historical DuPont's inventories as a result of the
Merger.
|
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.
|
DuPont de Nemours,
Inc.
|
Selected Financial
Information and Non-GAAP Measures
|
|
Significant Items
Impacting Results for the Six Months Ended Jun 30,
2019
|
In millions, except
per share amounts (Unaudited)
|
Pretax
1
|
Net Income
2
|
EPS
3
|
Income Statement
Classification
|
Pro forma results
(GAAP)
|
$
|
(991)
|
|
$
|
(1,098)
|
|
$
|
(1.47)
|
|
|
Less: Significant
items
|
|
|
|
|
Integration and
separation costs 4
|
(785)
|
|
(600)
|
|
(0.80)
|
|
Integration and
separation costs
|
Restructuring and
asset related charges - net 5
|
(210)
|
|
(160)
|
|
(0.21)
|
|
Restructuring and
asset related charges
|
Goodwill impairment
charge
|
(1,175)
|
|
(1,173)
|
|
(1.57)
|
|
Goodwill impairment
charge
|
Income tax related
item
|
(48)
|
|
(105)
|
|
(0.14)
|
|
Sundry income
(expense) - net;
Provision for income
taxes on continuing operations
|
Total significant
items
|
$
|
(2,218)
|
|
$
|
(2,038)
|
|
$
|
(2.72)
|
|
|
Less: Merger-related
amortization of intangibles
|
$
|
(399)
|
|
$
|
(314)
|
|
$
|
(0.42)
|
|
Amortization of
Intangibles
|
Less: Non-op pension
/ OPEB benefit
|
$
|
39
|
|
$
|
37
|
|
$
|
0.04
|
|
Sundry income
(expense) - net
|
Less: Costs
historically allocated to the materials science and agriculture
businesses 6
|
$
|
(256)
|
|
$
|
(197)
|
|
$
|
(0.26)
|
|
Cost of sales;
Research and development expense; Selling, general and
administrative expenses
|
Adjusted pro forma
results (non-GAAP)
|
$
|
1,843
|
|
$
|
1,414
|
|
$
|
1.89
|
|
|
|
Significant Items
Impacting Pro Forma Results for the Six Months Ended Jun 30,
2018
|
In millions, except
per share amounts (Unaudited)
|
Pretax
1
|
Net Income
2
|
EPS
3
|
Income Statement
Classification
|
Pro forma results
(GAAP)
|
$
|
(28)
|
|
$
|
(172)
|
|
$
|
(0.24)
|
|
|
Less: Significant
items
|
|
|
|
|
Integration and
separation costs 4
|
(565)
|
|
(459)
|
|
(0.60)
|
|
Integration and
separation costs
|
Restructuring and
asset related charges - net 5
|
(99)
|
|
(80)
|
|
(0.10)
|
|
Restructuring and
asset related charges
|
Merger-related
inventory step-up amortization 7
|
(73)
|
|
(62)
|
|
(0.08)
|
|
Cost of
sales
|
Net loss on
divestitures and changes in joint venture ownership
|
(21)
|
|
(16)
|
|
(0.02)
|
|
Sundry income
(expense) - net
|
Income tax related
items 8
|
(50)
|
|
(145)
|
|
(0.19)
|
|
Sundry income
(expense) - net;
Provision for income
taxes on continuing operations
|
Total significant
items
|
(808)
|
|
(762)
|
|
(0.99)
|
|
|
Less: Merger-related
amortization of intangibles
|
(415)
|
|
(326)
|
|
$
|
(0.42)
|
|
Amortization of
Intangibles
|
Less: Non-op pension
/ OPEB benefit
|
55
|
|
44
|
|
$
|
0.06
|
|
Sundry income
(expense) - net
|
Less: Costs
historically allocated to the materials science and agriculture
businesses
|
(608)
|
|
(468)
|
|
$
|
(0.61)
|
|
Cost of sales;
Research and development expense; Selling, general and
administrative expenses
|
Adjusted pro forma
results (non-GAAP)
|
$
|
1,748
|
|
$
|
1,340
|
|
$
|
1.72
|
|
|
1. 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. 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. 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.
|
7. Includes the fair
value step-up in Historical DuPont's inventories as a result of the
Merger.
|
8. 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 (EPS) Outlook
|
The reconciliation
below represents the Company's outlook of earnings per common share
from continuing operations - diluted (GAAP) to Adjusted earnings
per common share from continuing operations - diluted (non-GAAP).
The U.S. GAAP Outlooks in the table below are forward looking and
as such are inherently difficult to predict and estimate. The U.S.
GAAP Outlooks 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 (EPS) Outlook
|
Three Months
Ended
Sept 30,
2019
|
Three Months
Ended
Sept 30,
2018
|
|
Full Year
Ended
Dec 31,
2019
|
Twelve Months
Ended
Dec 31,
2018
|
|
Outlook
|
Pro
Forma4
|
|
Outlook Pro
Forma
|
Pro
Forma4
|
Earnings (loss) per
common share from continuing operations - diluted (GAAP)
|
$ 0.62
- 0.72
|
$
|
0.09
|
|
|
$ (0.18)
- 0.02
|
$
|
0.21
|
|
Less: Significant
items benefit (charge) 1
|
(0.13) - (0.08)
1
|
(0.43)
|
|
|
(2.93) - (2.83)
1
|
(2.07)
|
|
Less: Merger-related
amortization of intangibles 2,3
|
(0.21)
|
(0.21)
|
|
|
(0.84)
|
(0.83)
|
|
Less: Non-op pension
/ OPEB benefit 2
|
0.02
|
0.03
|
|
|
0.10
|
0.10
|
|
Less: Costs
historically allocated to the materials science and agriculture
businesses 2
|
—
|
(0.24)
|
|
|
(0.26)
|
(1.04)
|
|
Adjusted earnings per
share from continuing operations - diluted (Non - GAAP)
|
$ 0.94 -
0.99
|
$
|
0.94
|
|
|
$ 3.75 -
3.85
|
$
|
4.05
|
|
1. Includes the
Company's best estimate of integration costs related to the Merger
and Distributions for the Outlook periods noted. The Outlook for
the full year 2019 includes the net charges for significant items
recorded by the Company through June 30, 2019.
|
2. Amounts represent
the Company's best estimate.
|
3. Merger related
amortization of intangibles equals the amortization of Historical
EID intangibles.
|
4. As reflected in
the Company's Form 8-K filed with the SEC on June 7,
2019.
|
DuPont de Nemours,
Inc.
|
Supplemental
Unaudited Pro Forma Combined Financial Information
|
|
Unaudited Pro
Forma Combined
Statement of
Income
|
Three Months Ended
June 30,
|
2018
|
In millions, except
per share amounts
|
DuPont
1
|
Pro Forma
Adjustments2
|
Pro
Forma
|
Net sales
|
$
|
5,857
|
|
$
|
—
|
|
$
|
5,857
|
|
Cost of
sales
|
4,085
|
|
18
|
|
4,103
|
|
Research and
development expenses
|
270
|
|
—
|
|
270
|
|
Selling, general and
administrative expenses
|
768
|
|
—
|
|
768
|
|
Amortization of
intangibles
|
266
|
|
—
|
|
266
|
|
Restructuring and
asset related charges - net
|
46
|
|
—
|
|
46
|
|
Integration and
separation costs
|
428
|
|
(137)
|
|
291
|
|
Equity in earnings of
nonconsolidated affiliates
|
54
|
|
—
|
|
54
|
|
Sundry income
(expense) - net
|
82
|
|
—
|
|
82
|
|
Interest
expense
|
—
|
|
171
|
|
171
|
|
Income (Loss) from
continuing operations before income taxes
|
130
|
|
(52)
|
|
78
|
|
Provision (Credit)
for income taxes on continuing operations
|
99
|
|
(10)
|
|
89
|
|
Income (Loss) from
continuing operations, net of tax
|
31
|
|
(42)
|
|
(11)
|
|
Net loss attributable
to noncontrolling interests
|
(2)
|
|
—
|
|
(2)
|
|
Net income (loss)
from continuing operations attributable to DuPont
|
33
|
|
(42)
|
|
(9)
|
|
|
|
|
|
Per common share
data:
|
|
|
|
Loss per common share
from continuing operations - basic
|
$
|
(0.03)
|
|
|
$
|
(0.02)
|
|
Loss per common share
from continuing operations - diluted
|
$
|
(0.03)
|
|
|
$
|
(0.02)
|
|
|
|
|
|
Weighted-average
common shares outstanding - basic
|
769.6
|
|
|
769.6
|
|
Weighted-average
common shares outstanding - diluted
|
774.5
|
|
|
769.6
|
|
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
Statement of
Operations
|
Six Months Ended
June 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
|
$
|
10,882
|
|
$
|
—
|
|
$
|
10,882
|
|
$
|
11,454
|
|
$
|
—
|
|
$
|
11,454
|
|
Cost of
sales
|
7,117
|
|
22
|
|
7,139
|
|
7,890
|
|
36
|
|
7,926
|
|
Research and
development expenses
|
499
|
|
—
|
|
499
|
|
544
|
|
—
|
|
544
|
|
Selling, general and
administrative expenses
|
1,368
|
|
—
|
|
1,368
|
|
1,570
|
|
—
|
|
1,570
|
|
Amortization of
intangibles
|
508
|
|
—
|
|
508
|
|
531
|
|
—
|
|
531
|
|
Restructuring and
asset related charges - net
|
208
|
|
—
|
|
208
|
|
99
|
|
—
|
|
99
|
|
Goodwill impairment
charge
|
1,175
|
|
—
|
|
1,175
|
|
—
|
|
—
|
|
—
|
|
Integration and
separation costs
|
958
|
|
(173)
|
|
785
|
|
793
|
|
(228)
|
|
565
|
|
Equity in earnings of
nonconsolidated affiliates
|
89
|
|
—
|
|
89
|
|
111
|
|
—
|
|
111
|
|
Sundry income
(expense) - net
|
65
|
|
—
|
|
65
|
|
(16)
|
|
—
|
|
(16)
|
|
Interest
expense
|
316
|
|
29
|
|
345
|
|
—
|
|
342
|
|
342
|
|
(Loss) income from
continuing operations before income taxes
|
(1,113)
|
|
122
|
|
(991)
|
|
122
|
|
(150)
|
|
(28)
|
|
Provision (Credit)
for income taxes on continuing operations
|
64
|
|
30
|
|
94
|
|
164
|
|
(31)
|
|
133
|
|
(Loss) income from
continuing operations, net of tax
|
(1,177)
|
|
92
|
|
(1,085)
|
|
(42)
|
|
(119)
|
|
(161)
|
|
Net income
attributable to noncontrolling interests
|
13
|
|
—
|
|
13
|
|
11
|
|
—
|
|
11
|
|
Net (loss) income
from continuing operations attributable to DuPont
|
(1,190)
|
|
92
|
|
(1,098)
|
|
(53)
|
|
(119)
|
|
(172)
|
|
|
|
|
|
|
|
|
Per common share
data:
|
|
|
|
|
|
|
Loss per common share
from continuing operations - basic
|
$
|
(1.59)
|
|
|
$
|
(1.47)
|
|
$
|
(0.09)
|
|
|
$
|
(0.24)
|
|
Loss per common share
from continuing operations - diluted
|
$
|
(1.59)
|
|
|
$
|
(1.47)
|
|
$
|
(0.09)
|
|
|
$
|
(0.24)
|
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding - basic
|
749.6
|
|
|
749.6
|
|
771.0
|
|
|
771.0
|
|
Weighted-average
common shares outstanding - diluted
|
749.6
|
|
|
749.6
|
|
771.0
|
|
|
771.0
|
|
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.
|
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SOURCE DuPont